<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 4, 1999
Registration No. 33-23458, 811-5627
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Post-Effective Amendment No. 24
to
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
SEPARATE ACCOUNT A
(EXACT NAME OF TRUST)
GOLDEN AMERICAN LIFE INSURANCE COMPANY
(NAME OF DEPOSITOR)
1475 Dunwoody Road
West Chester, PA 19380
610-425-3400
(ADDRESS AND TELEPHONE NUMBER OF DEPOSITOR'S PRINCIPAL OFFICES)
MARILYN TALMAN, ESQ. COPY TO:
Golden American Life Insurance Company Kimberly J. Smith, Esq.
1475 Dunwoody Road Sutherland, Asbill & Brennan LLP
West Chester, PA 19380 1275 Pennsylvania Avenue, N.W.
(NAME AND ADDRESS OF AGENT FOR Washington, D.C. 20004-2404
SERVICE OF PROCESS)
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE:
[X] immediately upon filing pursuant to paragraph (b)
[ ] on ___________ pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on _________ pursuant to paragraph (a)(1) of rule (485)
[ ] this Post-Effective Amendment designates a new effective date
for a previously filed Post-Effective Amendment.
TITLE OF SECURITIES BEING REGISTERED:
Individual and group flexible premium variable life insurance policies
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
A soon as practical after the effective date of the Registration Statement
- --------------------------------------------------------------------------------
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GOLDEN AMERICAN SEPARATE ACCOUNT A (FILE NO. 333-23458)
Cross-Reference Table
Form N-8B-2 Item No. Caption in Prospectus
- -------------------- ---------------------
1, 2 Cover; Golden American Life Insurance Company;
Separate Account A
3 Inapplicable
4 Golden American Life Insurance Company
5, 6 Separate Account A
7 Inapplicable
8 Financial Statements
9 Inapplicable
10(a), (b), (c), Policy Summary; Policy Values, Determining the
(d), (e) Value of Amounts in the Divisions of the
Variable Account; Charges, Deductions
and Refunds; Partial Withdrawals; The
Fixed Account; Transfers of Account
Values; Right to Exchange Policy; Lapse;
Reinstatement; Premiums
10(f) Voting Privileges; Right to Change Operations
10(g), (h) Right to Change Operations
10(i) Tax Considerations; Detailed Information about the
GoldenSelect Variable Life Policy;
Other General Policy Provisions; The Fixed Account
11, 12 Separate Account A
13 Policy Summary; Charges, Deductions and Refunds;
Corporate Purchasers and Group or Sponsored
Arrangements
Form N-8B-2 Item No. Caption in Prospectus
14, 15 Policy Summary; Free Look; Other General Policy
Provisions; Applying for a Policy
16 Premiums; Allocation of Premiums
17 Payment; Partial Withdrawal
18 Policy Summary; Tax Considerations; Detailed
Information about the GoldenSelect Genesis I and
Genesis Flex Life Policy; Separate Account A
19 Reports to Policy Owners; Notification and
Claims Procedures; Performance Information
(Appendix C)
20 See 10(g) & 10(a)
21 Policy Loans
22 Policy Summary; Premiums; Grace Period; Separate
Account A; Detailed Information about
the GoldenSelect Genesis I and Genesis
Flex Variable Life Policy
23 Inapplicable
24 Inapplicable
25 Golden American Life Insurance Company
26 Inapplicable
27, 28, 29, 30 Golden American Life Insurance Company
31, 32, 33, 34 Inapplicable
35 Inapplicable
36 Inapplicable
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Form N-8B-2 Item No. Caption in Prospectus
- -------------------- ---------------------
37 Inapplicable
38, 39, 40, 41(a) Other General Policy Provisions; Distribution of
the Policies; Golden American Life Insurance
Company
41(b), 41(c), 42, 43 Inapplicable
44 Determining the Value in the Divisions of the
Variable Account
45 Inapplicable
46 Partial Withdrawals; Detailed
Information about the GoldenSelect
Genesis I and Genesis Flex Variable Life
Policy
47, 48, 49, 50 Inapplicable
51 Detailed Information about the
GoldenSelect Genesis I and Genesis Flex
Variable Life Policy
52 Determining the Value in the Divisions
of the
Variable Account; Right to Change Operations
53(a) Tax Considerations
53(b), 54, 55 Inapplicable
56, 57, 58 Inapplicable
59 Financial Statements
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Prospectus
GOLDENSELECT GENESIS I AND GOLDENSELECT GENESIS FLEX
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICIES
issued by
GOLDEN AMERICAN LIFE INSURANCE COMPANY
AND
SEPARATE ACCOUNT A
YOUR POLICY
o is an individual or group flexible
[left col. boxed] premium variable life insurance policy;
Consider carefully o may be classified as a "life
the policy charges, insurance" contract (usually,
deductions, and Genesis Flex) or as a "modified endowment
refunds beginning contract" (usually, Genesis I) under
on page { }__ in federal income tax laws, depending on your
this prospectus. premium payments;
o is available on a single life basis
or a joint and last survivor
You should read ("survivorship") basis;
this prospectus and o is issued by Golden American Life
keep it for future Insurance Company; and
reference. A o is returnable by you during the free
prospectus for each look period if you are not satisfied.
underlying fund
portfolio must YOUR POLICY PREMIUM PAYMENTS
accompany and o are flexible, so the premium amount
should be read and frequency may vary;
together with this o are divided between variable
prospectus. investment divisions and the fixed
account, based on your instructions;
o are invested into shares of the
This policy is not underlying investment portfolios under
available in all each division; and
jurisdictions. o can be invested in up to twenty-two
This policy is not divisions, as well as the fixed account,
offered in any at any time.
jurisdiction where
this type of YOUR INVESTMENT VALUE
offering is not o is the sum of your holdings in the
legal. Depending variable divisions and the fixed
on the state where account;
it is issued, o has no guaranteed minimum cash
policy features may value under the variable divisions.
vary. You should The value varies with the value of
rely only on the the matching mutual fund portfolio;
information o has a minimum guaranteed rate of
contained in this return if you have amounts in the
prospectus. We fixed account; and
have not authorized o is subject to various expenses and
anyone to provide charges, including deferred sales
you with charges;
information that is
different. DEATH PROCEEDS
o are paid if your policy is still in
force at the death of the insured
Replacing your person(s) (second to die for
existing life survivorship policies);
insurance policy(s) o are equal to the death benefit
with this policy minus outstanding policy loans,
may not be accrued loan interest and unpaid
beneficial to you. charges incurred before the death
of the insured person(s);
o for Genesis I policies, are
calculated under your choice of
options;
o Option I- your policy's face amount
o Option II (for Genesis I policies
only)- your policy's face amount
plus the Option II death benefit
adjustment; and
o are generally not federally income
taxed if your policy continues to
meet the federal income tax
definition of life insurance.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED
THESE SECURITIES OR DETERMINED THAT THIS PROSPECTUS IS ACCURATE
OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
MAY 1, 1999
<TABLE>
<C> <C>
ISSUED BY: Golden American Life UNDERWRITTEN BY: Directed Services, Inc.
Insurance Company
1475 Dunwoody Drive
West Chester, PA 19380
</TABLE>
THROUGH ITS: Separate Account A
ADMINISTERED BY: Customer Service Center
P.O. Box 2700
West Chester, PA 19380-2700
(800) 366-0066
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TABLE OF CONTENTS
INDEX OF SPECIAL TERMS 1
POLICY SUMMARY 2
YOUR POLICY 2
FREE LOOK PERIOD OR RIGHT TO EXAMINE POLICY 2
YOUR POLICY PREMIUMS 2
ALLOCATION OF PREMIUMS 2
VARIABLE DIVISIONS 3
POLICY VALUES 3
HOW THE INVESTMENT VALUE VARIES 3
ALLOCATION CHANGES 4
SPECIAL POLICY FEATURES 4
ADDITIONAL BENEFITS 4
DOLLAR COST AVERAGING 4
LOANS 4
PARTIAL WITHDRAWALS 4
POLICY MODIFICATION, TERMINATION AND CONTINUATION FEATURES 4
FREE LOOK PERIOD OR RIGHT TO EXAMINE POLICY 4
RIGHT TO CONVERT POLICY 4
SURRENDER 4
LAPSE 5
REINSTATEMENT 5
DEATH BENEFITS 5
CHARGES AND DEDUCTIONS 5
CHARGES DEDUCTED FROM YOUR INVESTMENT VALUE 5
TAX CONSIDERATIONS 6
INFORMATION ABOUT GOLDEN AMERICAN, THE VARIABLE ACCOUNT, THE
INVESTMENT OPTIONS AND THE FIXED ACCOUNT 7
GOLDEN AMERICAN LIFE INSURANCE COMPANY 7
YEAR 2000 PREPAREDNESS 7
SEPARATE ACCOUNT A 8
VARIABLE ACCOUNT STRUCTURE 8
ORDER OF VARIABLE ACCOUNT LIABILITIES 8
VARIABLE DIVISIONS 8
INVESTMENT PORTFOLIOS 8
OBJECTIVES OF THE INVESTMENT PORTFOLIOS 9
THE FIXED ACCOUNT 10
MAXIMUM NUMBER OF INVESTMENT DIVISIONS 11
DETAILED INFORMATION ABOUT THE GOLDENSELECT GENESIS I AND GENESIS
FLEX VARIABLE LIFE INSURANCE POLICIES 11
APPLYING FOR A POLICY 11
PREMIUMS 12
ALLOCATION OF PREMIUM PAYMENTS 13
LIFE INSURANCE PREMIUM PAYMENT TEST (GENESIS FLEX) 13
MODIFIED ENDOWMENT CONTRACTS (GENESIS I) 13
MAKING ADDITIONAL PREMIUM PAYMENTS 14
PLANNED PREMIUMS (GENESIS FLEX ONLY) 14
UNPLANNED PREMIUMS 14
ADDITIONAL PREMIUM ALLOCATION 14
PREMIUM PAYMENTS AFFECT YOUR COVERAGE 14
DEATH BENEFITS 15
FACE AMOUNT 15
DEATH BENEFIT OPTIONS 15
VARIABLE INSURANCE AMOUNT 16
CHANGES IN DEATH BENEFIT OPTION (GENESIS I ONLY) 16
i
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CHANGES IN DEATH BENEFIT AMOUNTS 17
GUARANTEE PERIOD 17
BENEFITS AT MATURITY 18
POLICY VALUES 18
INVESTMENT VALUE 18
CASH SURRENDER VALUE 18
INVESTMENT VALUE IN EACH DIVISION OF ACCOUNT A 18
TABULAR VALUE 19
INDEX OF INVESTMENT EXPERIENCE AND UNIT VALUE 19
HOW WE DETERMINE THE EXPERIENCE FACTOR 19
NET RATE OF RETURN FOR ACCOUNT A 20
ALLOCATION CHANGES 20
EXCESSIVE TRADING 20
FIXED ACCOUNT TRANSFERS 20
DOLLAR COST AVERAGING 21
CHANGING DOLLAR COST AVERAGING 21
WHAT HAPPENS IF A DIVISION IS NOT AVAILABLE 21
POLICY LOANS 22
LOAN REPAYMENT 22
LOANS AND YOUR BENEFITS 23
PARTIAL WITHDRAWALS 23
PARTIAL WITHDRAWAL MECHANICS 23
ACCELERATED RECOVERY OF DEFERRED CHARGES 23
EFFECT OF A PARTIAL WITHDRAWAL ON THE INVESTMENT VALUE AND
DEATH BENEFIT 24
EFFECT OF A PARTIAL WITHDRAWAL ON GUARANTEED BENEFITS 24
RIGHT TO CONVERT POLICY 24
LAPSE 25
IF THE GUARANTEE PERIOD IS NOT IN EFFECT 25
IF THE GUARANTEE PERIOD IS IN EFFECT 25
GRACE PERIOD 25
REINSTATEMENT 26
SURRENDER 26
GENERAL POLICY PROVISIONS 26
FREE LOOK PERIOD OR RIGHT TO EXAMINE POLICY 26
YOUR POLICY 27
ATTAINED AGE 27
OWNERSHIP 27
BENEFICIARY 27
COLLATERAL ASSIGNMENT 27
INCONTESTABILITY 27
MISSTATEMENTS OF AGE OR GENDER 28
SUICIDE 28
ESTABLISHING SURVIVORSHIP -- SURVIVORSHIP POLICIES ONLY 29
PAYMENT 29
NOTIFICATION AND CLAIMS PROCEDURES 29
NON-PARTICIPATING 29
DISTRIBUTION OF THE POLICIES 29
SETTLEMENT PROVISIONS 30
PAYMENT WHEN NAMED PERSON DIES 30
ADMINISTRATIVE INFORMATION ABOUT THE POLICY 31
VOTING PRIVILEGES 31
MATERIAL CONFLICTS 31
RIGHT TO CHANGE OPERATIONS 32
REPORTS TO OWNERS 32
CHARGES, DEDUCTIONS AND REFUNDS 32
DEDUCTIONS FROM INVESTMENT VALUE 33
ii
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SALES CHARGE 33
TAX CHARGES 33
CORPORATE TAX CHARGE 33
ISSUE CHARGES 34
DAILY DEDUCTIONS FROM THE VARIABLE ACCOUNT 35
MORTALITY AND EXPENSE RISK CHARGE 35
GUARANTEED ISSUE 35
CHARGES FOR ADDITIONAL BENEFITS 35
CHANGES IN MONTHLY CHARGES 35
POLICY TRANSACTION FEES 35
PARTIAL WITHDRAWAL 35
ALLOCATION CHANGES 36
FEES AND EXPENSES OF THE PORTFOLIOS 36
PORTFOLIO ANNUAL EXPENSES 37
PORTFOLIO ANNUAL EXPENSES 38
GROUP OR SPONSORED ARRANGEMENTS OR CORPORATE PURCHASERS 38
OTHER CHARGES 39
TAX CONSIDERATIONS 39
GENESIS FLEX AND GENESIS I 39
TAX STATUS OF THE POLICY 39
DIVERSIFICATION REQUIREMENTS 39
TAX TREATMENT OF POLICY BENEFITS 40
MODIFIED ENDOWMENT CONTRACTS 40
MULTIPLE POLICIES 40
DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM MODIFIED ENDOWMENT
CONTRACTS 40
DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM POLICIES THAT ARE
NOT MODIFIED ENDOWMENT CONTRACTS 41
INVESTMENT IN THE POLICY 41
POLICY LOANS 41
SECTION 1035 EXCHANGES 41
TAX-EXEMPT POLICY OWNERS 41
CHANGES TO COMPLY WITH THE LAW 42
OTHER 42
POSSIBLE TAX LAW CHANGES 43
OUR INCOME TAXES 43
ILLUSTRATIONS 43
ADDITIONAL INFORMATION 51
DIRECTORS AND OFFICERS 51
REINSURANCE 52
ADDITIONAL INFORMATION 52
STATE REGULATION 52
LEGAL MATTERS 52
LEGAL PROCEEDINGS 53
EXPERTS 53
REGISTRATION STATEMENT 53
FINANCIAL STATEMENTS 54
APPENDIX A A-1
iii
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<PAGE>
INDEX OF SPECIAL TERMS
The following special terms are used in this prospectus. We
explain each term on the page(s) listed in the body of this
prospectus and in the summary, if applicable:
Account A { }
Attained Age { }
Cash Surrender Value { }
Customer Service Center { }
Debt { }
Face Amount { }
Free Look Period { }
Guarantee Period { }
Insured { }
Investment Date { }
Investment Results { }
Investment Value { }
Issue Age { }
Issue Date { }
Joint Insured { }
Life Insurance Premium Payment Test { }
Maturity Date { }
Net Amount at Risk { }
Net Rate of Return { }
Net Single Premium Factor { }
Option I Death Benefit { }
Option II Death Benefit { }
Option II Death Benefit Adjustment { }
Option II Guaranteed Death Benefit { }
Policy Anniversary { }
Policy Date { }
Policyowner { }
Policy Year { }
Processing Dates { }
Processing Period { }
Tabular Net Amount at Risk { }
Tabular Value { }
Valuation Date { }
Valuation Period { }
Variable Insurance Amount { }
1
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POLICY SUMMARY
[two-column format]
THIS SUMMARY HIGHLIGHTS SOME OF THE IMPORTANT POINTS ABOUT YOUR
POLICY. THE POLICY IS MORE FULLY DESCRIBED IN THE ATTACHED,
COMPLETE PROSPECTUS. PLEASE READ THE PROSPECTUS CAREFULLY.
"WE," "US," "OUR," "GOLDEN AMERICAN" AND THE "COMPANY" REFER TO
GOLDEN AMERICAN LIFE INSURANCE COMPANY. "YOU" AND "YOUR" REFER
TO THE POLICY OWNER. THE OWNER IS THE INDIVIDUAL, ENTITY,
PARTNERSHIP, REPRESENTATIVE OR PARTY WHO MAY EXERCISE ALL RIGHTS
OVER THE POLICY AND RECEIVE THE POLICY BENEFITS DURING THE LIFE
OF THE INSURED PERSON(S).
ANY STATE VARIATIONS ARE COVERED IN A SPECIAL POLICY FORM FOR USE
IN THAT STATE. THIS PROSPECTUS PROVIDES A GENERAL DESCRIPTION OF
THE POLICY. YOUR ACTUAL POLICY AND ANY RIDERS ARE THE
CONTROLLING DOCUMENTS. IF YOU WOULD LIKE TO REVIEW A COPY OF THE
POLICY AND RIDERS, CONTACT OUR CUSTOMER SERVICE CENTER.
YOUR POLICY
Your policy provides life insurance protection on the insured
person(s). The policy includes the basic policy, any
applications, and any riders or endorsements. As long as the
policy remains in force, we pay a death benefit on the death of
the insured person (under a survivorship policy, the second
insured to die). While your policy is in force, you may access
your policy value by taking loans or partial withdrawals. You
may also surrender your value for its cash surrender value. When
the insured person (or, for a survivorship policy, the younger
insured person) turns age 100, we will pay you the cash surrender
value of the policy, and coverage will end. SEE BENEFITS AT
MATURITY, PAGE { }.
Life insurance is not a short-term investment. You should
evaluate your need for life insurance coverage and the policy's
long-term investment potential and risks before purchasing a
policy.
FREE LOOK PERIOD OR RIGHT TO EXAMINE POLICY
You have the right to examine your policy and return it for a
refund of premiums paid if you are not satisfied for any reason.
The policy is then void. SEE FREE LOOK PERIOD OR RIGHT TO
EXAMINE POLICY, PAGE { }.
YOUR POLICY PREMIUMS
The policies are flexible premium policies because the amount and
frequency of the payments you make (premiums) may vary, within
limits. You must make premium payments:
o necessary to keep your policy in force;
o necessary to continue certain benefits; and
o for us to issue your policy.
The minimum premium under Genesis I is $25,000 ($15,000 for 1035
exchanges). The minimum planned annual premium for Genesis Flex
is $5,000. Depending on your choices, it may not be enough to
maintain your guarantee period, or to keep your policy in force.
The amount of premium you pay affects the length of time your
policy stays in force. SEE PREMIUMS, PAGE { }.
ALLOCATION OF PREMIUMS
During the free look period, we allocate your premium payments to
the Liquid Asset Division. Thereafter, we allocate your
investment value based on your investment instructions. You may
allocate the premiums among one or more variable divisions, the
fixed account, or both. We allocate your initial premium for you
after we:
o receive your initial premium;
o approve your policy application; and
o have the information we require.
You may not invest in more than twenty-two investment divisions,
and the fixed account, at any time.
You need to divide your investment choices so that the
percentages are in whole numbers equaling 100%. SEE ALLOCATION
OF PREMIUM PAYMENTS, PAGE { }.
VARIABLE DIVISIONS
Keep in mind that any amount you direct into the fixed account
earns a minimum fixed interest rate set by us. But if you direct
an amount into any variable division, it will be invested in one
or more of the following investment portfolios, and depending on
2
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<PAGE>
market conditions, you may make or lose money. The investment
portfolios of the variable divisions are described in the
prospectuses for the underlying investment portfolios. SEE
OBJECTIVES OF THE INVESTMENT PORTFOLIOS, PAGE { }.
The All-Growth and the Growth Opportunities Series are closed to
premium payments and transfer allocations on and after May 1,
1999.
Each investment portfolio has its own investment objective.
GCG TRUST
Liquid Asset Series
Limited Maturity Bond Series
Global Fixed Income Series
Total Return Series
Equity Income Series
Fully Managed Series
Rising Dividends Series
Growth & Income Series
Growth Series
Value Equity Series
Research Series
Mid-Cap Growth Series
All-Growth Series
Growth Opportunities Series
Strategic Equity Series
Capital Appreciation Series
Small Cap Series
Real Estate Series
Hard Assets Series
Managed Global Series
Developing World Series
Emerging Markets Series
PIMCO TRUST
PIMCO High Yield Bond Portfolio
PIMCO StocksPLUS Growth and Income
Portfolio
SEE OBJECTIVES OF THE INVESTMENT PORTFOLIOS, PAGE { }.
GOLDEN AMERICAN FIXED ACCOUNT
POLICY VALUES
Your investment value is the amount you have in the fixed account
and the amount you have in the variable divisions. Your
investment value reflects:
o premiums;
o deductions for charges;
o the investment performance of the amounts you have in the
variable divisions;
o interest earned on amounts you have in the fixed account;
and
o interest earned and charged on amounts you have in the
general account as security for policy loans.
We subtract charges and partial withdrawals you take from your
investment value. You make a partial withdrawal when you
withdraw part of your cash surrender value. Partial withdrawals
may trigger immediate assessment of remaining deferred sales
charges.
Your cash surrender value is equal to your investment value minus
any unrecovered deferred sales charges and any policy charges
incurred but not yet deducted, plus any accrued general account
loan interest credited.
HOW THE INVESTMENT VALUE VARIES
Your policy's investment value varies each day based on its
investment results. You bear the risk of poor investment
performance and you receive the benefits from favorable
investment performance. SEE OBJECTIVES OF THE INVESTMENT
PORTFOLIOS, PAGE { }.
ALLOCATION CHANGES
After the free look period, you may make up to twelve free
transfers among the variable divisions or to the fixed account
per policy year.
We reserve the right to charge $25 for each transfer over twelve
you make in a policy year. This charge does not apply to any
dollar cost averaging transfers-they are free. There are
restrictions on transfers to or from the fixed account. SEE
TRANSFERS OF INVESTMENT VALUE, PAGE { }.
SPECIAL POLICY FEATURES
ADDITIONAL BENEFITS
You may attach additional benefits to your policy by rider. A
rider adds benefits to your policy. We deduct a monthly charge
from your investment value for these benefits.
3
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DOLLAR COST AVERAGING
You may choose to have dollar cost averaging on your policy.
Dollar cost averaging is a systematic plan of transferring
investment values to selected investment divisions. It is
intended to protect your policy's value from short-term price
fluctuations. However, dollar cost averaging does not assure a
profit, nor does it protect against a loss in a declining market.
Dollar cost averaging is free. SEE DOLLAR COST AVERAGING, PAGE {
}.
LOANS
You may take loans against 90% of your policy's cash surrender
value. The cash surrender value is your investment value minus
any unrecovered deferred sales charges, plus any accrued general
account loan interest credited, minus any policy charges incurred
but not yet deducted. We charge an annual loan interest rate of
5%. We credit a guaranteed annual interest rate of at least 4.0%
on amounts held in the general account, or 5% on values securing
preferred loans. SEE POLICY LOANS, PAGE { }.
PARTIAL WITHDRAWALS
You may withdraw part of your investment value any time after
your first policy year. You may make up to four partial
withdrawals per policy year without charge. Partial withdrawals
may reduce the death benefit, and above a certain amount, may be
subject to accelerated recovery of deferred loading. SEE PARTIAL
WITHDRAWALS, PAGE { }.
POLICY MODIFICATION, TERMINATION AND CONTINUATION FEATURES
FREE LOOK PERIOD OR RIGHT TO EXAMINE POLICY
You have the right to examine your policy and return it for a
refund if you are not satisfied for any reason during the free
look period. SEE FREE LOOK PERIOD OR RIGHT TO EXAMINE POLICY,
PAGE { }.
RIGHT TO CONVERT POLICY
For 24 months after the policy date you can convert your policy
to a guaranteed policy, unless state law requires differently.
SEE RIGHT TO CONVERT POLICY, PAGE { }.
SURRENDER
You may surrender your policy for its cash surrender value at any
time while the insured person(s) is/are living.
We calculate your cash surrender value on the valuation date we
receive your request and policy at our customer service center.
All insurance coverage ends on that date. SEE SURRENDER, PAGE {
}.
LAPSE
In general, insurance coverage continues as long as your policy's
cash surrender value is enough to pay the monthly deductions. We
guarantee that your policy will not lapse during the guarantee
period, if you meet the conditions to maintain the guarantee
period. SEE LAPSE, PAGE { }.
REINSTATEMENT
You may reinstate your policy and its riders within three years
of its lapse if you have not surrendered the policy and the
insured person(s) is/are still living.
You will need to give proof that the insured person(s)
continue(s) to be insurable. You will need to pay required
reinstatement premiums.
We will reinstate any policy loans existing when coverage ended,
with accrued loan interest to the date of the lapse. SEE
REINSTATEMENT, PAGE { }.
DEATH BENEFITS
At the death of the insured person (under survivorship policies,
the second insured to die), we pay death proceeds to the
beneficiary if your policy is still in force. The
beneficiary(ies) is (are) the person or people you name to
receive the death proceeds. The death proceeds equal the death
benefit payable under your death benefit option, minus the amount
of your outstanding policy loans and accrued loan interest, and
any accrued but unpaid policy charges. SEE DEATH BENEFITS, PAGE
{ }.
Under Genesis I, after your first policy year, you may change
your death benefit option once every three policy years. You may
change your face amount while your policy is in force, subject to
certain restrictions. SEE CHANGES IN DEATH BENEFIT AMOUNTS, PAGE
{ }.
4
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CHARGES AND DEDUCTIONS
CHARGES DEDUCTED FROM YOUR INVESTMENT VALUE
We periodically deduct charges from your investment value to
cover the services provided, expenses incurred and risks assumed
in connection with the policies.
Deferred Loading. We deduct a sales load equal to 6.0% of each
premium. We deduct this sales load in equal installments over a
six-year period (a deduction of 1.0% of premium per year).
Insurance Based Charges.
Premium Taxes. Your premium incurs a charge for premium or other
state and local taxes when we receive it. For Genesis I policies
we deduct a premium tax charge equal to 2.40% of premium. This
premium tax charge is designed to approximate the average premium
tax that we expect to pay. Currently, the premium tax charge is
deferred and will be deducted in equal annual installments over a
six year period (a deduction of 0.40% per year). For Genesis
Flex Policies, the amounts we deduct depend on the state of
residence of the insured(s). These charges are expressed as a
percentage of premium and can range from 2.0% to 4.0%. SEE
DEDUCTIONS FOR INSURANCE BASED CHARGES, PAGE { }.
Corporate Tax Charge. We reserve the right to deduct a corporate
tax charge equal to 1.38% of each premium payment. When assessed,
the charge will be deducted in equal installments over a six year
period from the date we receive and accept each premium payment.
Issue Charges
Per Policy Charge. We charge $200 for policies written on a
single life basis and $300 for policies written on a survivorship
basis. We currently waive this charge for the Genesis I policy.
Deferred Face Amount Charge. We charge an amount per $1,000 of
initial face amount and any increases in face amount deducted in
equal installments over a six year period following receipt of
the initial premium or increase in face amount. This charge will
vary based on the attained age and sex of the insured (the
younger insured for survivorship policies) and the policy chosen
and will never exceed a maximum of $12 per $1,000 of face amount.
A portion of this charge will be considered to be an additional
sales load.
Mortality Charges
Mortality Cost. We deduct an amount per $1,000 of net amount at
risk. The amount is based on each insured's sex, attained age
and underwriting class.
Minimum Death Benefit Guarantee Charge. We deduct an amount per
$1,000 of tabular net amount at risk. The amount is based on the
attained age of the insured (the younger insured for survivorship
policies). The charge will never exceed $0.15 per $1,000 of face
amount per quarter.
Transaction and Other Charges
Annual Administrative Charge. Currently we impose an annual
administrative charge of $40. We guarantee the charge will never
exceed $80 per policy year. If total premiums paid equal
$100,000 or more, or if the investment value is at least $100,000
at the time the charge is due, the charge will be zero.
Loan Interest Charge. On each policy anniversary, we calculate
the loan interest charge and deduct it from the investment value.
This charge is 5.0% annually (accrued daily) of the outstanding
loans.
Excess Allocation Charge. We currently allow unlimited
allocation changes without charge but reserve the right to charge
$25 for each allocation change in excess of twelve in a policy
year. We also reserve the right to limit allocation changes.
Partial Withdrawal Charge. If you take more than four partial
withdrawals per policy year, we may impose a charge of the lesser
of $25 and 2.0% of the amount withdrawn for each additional
partial withdrawal. We do not currently impose this charge.
Deductions from Divisions of Account A
Mortality and Expense Risk Charge. We deduct from each division
of Account A, a daily asset based charge equivalent to an annual
rate of 0.90%.
Asset Based Administrative Charge. We deduct from each division
of Account A, a daily asset based charge equivalent to an annual
rate of 0.10%.
Portfolio Expenses
There are fees and expenses deducted from each portfolio. SEE
FEES AND EXPENSES OF THE PORTFOLIOS, PAGE { }. The investment
performance of the
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portfolios and expenses and deductions of
certain charges from the GCG Trust and the PIMCO Trust will
affect your investment value. Please read the Trusts'
prospectuses for details. SEE FEES AND EXPENSES FROM THE
PORTFOLIOS, PAGE { }.
TAX CONSIDERATIONS
Under current federal income tax law, death benefits of life
insurance policies generally are not subject to income tax. In
order for this treatment to apply, the policy must qualify as a
life insurance contract as defined in the Internal Revenue Code.
We believe the policies will qualify as life insurance contracts.
However, there is some uncertainty as to policies insuring two
individuals, and policies issued on a substandard basis. SEE TAX
STATUS OF THE POLICY, PAGE { }.
Assuming the policies qualify as life insurance contracts, under
current federal income tax law, your investment value earnings
are generally not subject to income tax as long as they remain
within your policy. However, depending on circumstances, the
following events may cause taxable consequences for you:
o partial withdrawals;
o surrender;
o lapse; or
o an exchange of insured person.
In addition to the events listed above, if your policy is a
modified endowment contract (usually, Genesis I), loans against
or secured by the policy may cause a tax. A 10% penalty tax may
be imposed on any distribution from a modified endowment
contract, as well. SEE MODIFIED ENDOWMENT CONTRACTS, PAGE { }.
INFORMATION ABOUT GOLDEN AMERICAN, THE VARIABLE ACCOUNT, THE
INVESTMENT OPTIONS AND THE FIXED ACCOUNT
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 with
approximately $461.8 billion in assets as of December 31, 1998.
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 ("First Golden"),
which is authorized to do business in New York and Delaware. We
offer variable annuities and variable life insurance.
Administrative services for the Contract are provided at our
customer service center, at the address shown on the cover.
Golden American's consolidated financial statements appear in
this prospectus.
Equitable of Iowa is the holding company for Equitable Life
Insurance Company of Iowa ("Equitable Life"), USG Annuity & Life
Company, Locust Street Securities, Inc., Equitable American
Insurance Company, Directed Services, Inc. ("DSI"), and Golden
American. On October 24, 1997, ING acquired all interest in
Equitable of Iowa and its subsidiaries including Golden American.
DSI is 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, an investment advisory firm who serves as portfolio manager
to some Series of the GCG Trust. ING also owns Baring
International Investment Limited, another portfolio manager of
the GCG Trust.
YEAR 2000 PREPAREDNESS
Like other business organizations and individuals around the
world, Golden American and its Separate Account A could be
adversely affected if the computer systems doing the accounts
processing or on which Golden American and/or Separate Account A
relies do not properly process and calculate date-related
information related to the end of the year 1999. This is
commonly known as the Year 2000 (or Y2K) Problem. Golden
American's operations could be adversely affected if significant
customers, suppliers and other third parties, including
underlying mutual funds, would be unable to transact business in
the Year 2000 and thereafter as a result of the Year 2000 issue.
Golden American has developed a plan to address the Year 2000
issue in a timely manner and is taking steps that it believes are
reasonably designed
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to address the Year 2000 Problem with respect
to the computer systems that it uses and to obtain satisfactory
assurances that comparable steps are being taken by its and
Separate Account A's major service providers. Management
believes Golden American's systems are or will be substantially
compliant by Year 2000. To mitigate the effect of outside
influences and other dependencies relative to the Year 2000,
Golden American has identified and contacted these third parties
to obtain assurances that necessary steps are being taken to
prepare for the Year 2000. Golden American will continue these
communications and establish compliance checkpoints through the
Year 2000 transition. Golden American is currently developing a
contingency plan to address the content of third party compliance
statements and any systems that may malfunction despite the
testing being performed. The contingency plan is anticipated to
be completed by June 30, 1999. At this time, however, we cannot
guarantee that these steps will be sufficient to avoid any
adverse impact on Golden American and Account A.
SEPARATE ACCOUNT A
VARIABLE ACCOUNT STRUCTURE
We established Separate Account A (the "variable account") on
July 14, 1988 under Minnesota's insurance law. It now operates
under Delaware law. It is a unit investment trust, registered
with the SEC under the Investment Company Act of 1940. The SEC
does not supervise our management of the variable account or
Golden American.
All obligations of Account A under a policy are general
obligations of Golden American. The variable account is a
separate investment account. It is used to support our variable
life insurance policies, and for other purposes allowed by law
and regulation. We keep the variable account assets separate
from our general account and other separate accounts. We may
offer other variable life insurance contracts that invest in the
variable account. We do not discuss these contracts in this
prospectus. The variable account may invest in other securities
not available for the policy described in this prospectus. The
general account has all of our assets other than those held in
the variable account (variable divisions) or any other separate
accounts.
Golden American owns all the assets in the variable account. We
credit gains to or charge losses against the variable account
without regard to performance of other investment accounts.
ORDER OF VARIABLE ACCOUNT LIABILITIES
State law provides that we may not charge general account
liabilities against variable account assets equal to its reserves
and other liabilities.
The variable account may have liabilities from assets credited to
other variable life policies offered by the variable account. If
the assets of variable account are greater than the required
reserves and policy liabilities, we may transfer the excess to
our general account.
VARIABLE DIVISIONS
The variable account has several divisions. Each division
invests in shares of a matching investment portfolio. This means
that the investment performance of a policy depends on the
performance of the investment portfolios you choose. Each
investment portfolio has an investment objective. These
investment portfolios are not available directly to individual
investors. They are only available as the underlying investments
for variable annuity and variable life insurance contracts and
certain pension accounts.
INVESTMENT PORTFOLIOS
Each of the investment portfolios is a separate series of an open-
end management investment company. Currently, each division of
Account A invests in a Series of the GCG Trust or the PIMCO
Trust. DSI serves as the Manager to each Series of the GCG
Trust, and Pacific Investment Management Company ("PIMCO") serves
as Manager to each Series of the PIMCO Trust. The GCG Trust and
DSI have retained several portfolio managers to manage the assets
of each Series of the GCG Trust. PIMCO manages the assets of
each Series of the PIMCO Trust.
The investment portfolios sell shares to separate accounts of
insurance companies. These insurance companies may or may not be
affiliated with us. This is known as "shared funding."
Investment portfolios may sell shares as the underlying
investment for both variable annuity and variable life insurance
contracts. This process is known as "mixed funding."
The investment portfolios may sell shares to certain qualified
pension and retirement plans that qualify under Section 401 of
the Internal Revenue Code ("IRC"). As a result, a material
conflict of interest may arise between insurance companies,
owners of
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different types of contracts and retirement plans or
their participants.
If there is a material conflict, the company will consider what
should be done, including removing the investment portfolio from
the variable account. There are certain risks with mixed and
shared funding, and with selling shares to qualified pension and
retirement plans. See the investment portfolios' prospectuses.
OBJECTIVES OF THE INVESTMENT PORTFOLIOS
Each investment portfolio has a different investment objective
that it tries to achieve by following its investment strategy.
The objectives and policies of each investment portfolio affect
its return and its risks. With this prospectus, you must receive
the current prospectus for each investment portfolio. We
summarize the investment objectives for each investment portfolio
here. You should read each investment portfolio prospectus.
Some investment portfolio advisers (or their affiliates) may pay
us compensation for administration, distribution or other
expenses. Currently, these advisers include Pacific Investment
Management Company ("PIMCO"). The amount of compensation is
usually based on assets of the investment portfolio from
contracts that we issue (or administer).
The All-Growth and the Growth Opportunities Series are closed to
premium payments and transfer allocations on and after May 1,
1999.
GCG TRUST
The GCG Trust is an open-end management investment company, more
commonly called a mutual fund.
Trust Consolidation. Shares of Equi-Select Series Trust, an open-
end management investment company, were formerly available for
investment through the variable account divisions. Pursuant to
an order which Golden American, First Golden and Equitable Life
requested, and which the SEC granted, Golden American substituted
shares of investment portfolios of the GCG Trust for shares of
investment portfolios of the Equi-Select Series Trust. The Equi-
Select Series Trust no longer exists, and its investment
portfolios are no longer available for investment through the
variable account divisions.
The following Divisions invest in designated Series of the GCG
Trust:
Liquid Asset Series-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 instrumentali-ties, bank obligations, commercial paper and
short-term corporate debt securities. All securities will mature
in less than one year.
Limited Maturity Bond Series-Seeks highest current income
consistent with low risk to principal and liquidity. Also seeks
to enhance its total return through capital appreciation when
market factors, such as falling interest rates and rising bond
prices, indicate that capital appreciation may be available
without significant risk to principal. Invests primarily in
diversified limited maturity debt securities with average
maturity dates of five years or shorter and in no cases more than
seven years.
Global Fixed Income Series-Seeks high total return. Invests
primarily in high-grade fixed income securities, both foreign and
domestic.
Total Return Series-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.
Equity Income Series (formerly Multiple Allocation Series)-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.
Fully Managed Series-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.
Rising Dividends Series-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".
Growth & Income Series-Seeks long-term total return. Invests
primarily in common stocks of companies where the potential for
change (earnings acceleration) is significant.
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Growth Series (formerly Value + Growth Series)-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 Series-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 Series-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.
Mid-Cap Growth Series-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.
All-Growth Series-Seeks capital appreciation. Invests primarily
in growth securities of middle-range capitalization companies.
Growth Opportunities Series-Seeks capital appreciation. Invests
primarily in equity securities of domestic companies emphasizing
companies with market capitalizations of $1 billion or more.
Strategic Equity Series-Seeks capital appreciation. Invests
primarily in common stocks of medium- and small-sized companies.
Capital Appreciation Series-Seeks long-term capital growth.
Invests primarily in equity securities believed by the portfolio
manager to be undervalued.
Small Cap Series-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 Series-Seeks capital appreciation. Current income is
a secondary objective.
Invests primarily in publicly-traded real estate equity
securities.
Hard Assets Series-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.
Managed Global Series-Seeks capital appreciation. Current income
is only an incidental consideration. Invests primarily in common
stocks traded in securities markets throughout the world.
Developing World Series-Seeks capital appreciation. Invests
primarily in equity securities of companies in developing or
emerging countries.
Emerging Markets Series-Seeks long-term capital appreciation.
Invests primarily in equity securities of companies in at least
six different emerging market countries.
PIMCO VARIABLE INSURANCE TRUST
The PIMCO Trust is also a mutual fund. The following Divisions
invest in designated Series of the PIMCO Trust:
PIMCO High Yield Bond Portfolio-Seeks to maximize total return,
consistent with 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 Growth and Income Portfolio-Seeks to achieve a
total return which exceeds the total return performance of the
S&P 500. Invests primarily in common stocks, options, futures,
options on futures and swaps.
THE FIXED ACCOUNT
You may allocate all or a part of the premiums and transfers of
your investment value into the fixed account. The fixed account
is part of our general account which guarantees principal. It
pays interest at rates we declare.
The general account supports our non-variable insurance and
annuity obligations. We have not registered interests in the
fixed account under the Securities Act of 1933. Also, we have
not registered the fixed account or the general account as an
investment company under the Investment Company Act of 1940
(because of exemptive and exclusionary provisions). This means
that the general account, the fixed account and its interests are
generally not subject to regulation under these Acts.
The SEC staff has not reviewed the disclosures included in this
prospectus relating to the general account and the fixed account.
These disclosures,
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however, may be subject to certain
requirements of the federal securities law regarding accuracy and
completeness of statements made in this prospectus. For more
details regarding the general account, see your policy.
The amount you have in the fixed account is the sum of premiums
you allocate to that division, plus transfers you made to the
fixed account, plus interest earned.
Amounts you transfer out of or withdraw from the fixed account
reduce this amount. It is also reduced by deductions for charges
from your investment value allocated to the fixed account.
We declare the interests rate that apply to all amounts in the
fixed account. These rates will be no less than 4% annually and
will expire on the last day of the calendar month one year after
the allocation to the Fixed Account was made (the "Expiry Date").
Interest compounds daily at an effective annual rate that equals
the declared rate. We credit interest as of each valuation date.
We pay interest regardless of the actual investment performance
of our account. We carry all the investment risk for the fixed
account.
MAXIMUM NUMBER OF INVESTMENT DIVISIONS
You may invest in a total of twenty-two divisions, as well as the
fixed account, at any time.
DETAILED INFORMATION ABOUT THE GOLDENSELECT GENESIS I AND GENESIS
FLEX VARIABLE LIFE INSURANCE POLICIES
This prospectus describes our standard GoldenSelect Genesis Flex
and Genesis I variable life insurance policies. There may be
differences in your policy because of state requirements where we
issue your policy. We will describe any such differences in your
policy.
The illustrations beginning on page { } are to show how the
GoldenSelect policies work.
APPLYING FOR A POLICY
You purchase a GoldenSelect policy by submitting an application
to us. On the policy date, the insured person must be no older
than age 75. For a survivorship policy, both insured persons
must be age 75 or under, and at least one insured person must be
age 20 or over. We reserve the right to consider applications
for an insured person (or persons) up to age 80. The insured
person is the person on whose life we issue a policy and upon
whose death we pay death proceeds. For survivorship policies, we
pay death proceeds on the death of the last surviving insured.
Age is the insured person's age on the birthday nearest your
policy date, plus the number of completed policy years since the
policy date.
Before we issue a policy or apply your premium to the investment
divisions, we require satisfactory evidence of insurability of
the insured person and payment of your initial premium. We will
apply any money that you submit before we issue your policy to
our general account. At issue, we will allocate the initial
premium to the Liquid Asset Division.
Insured persons must also meet our underwriting requirements in
order for us to accept either initial or unplanned premium
payments. We assign each insured person to an underwriting class
according to the method of underwriting we use, the smoking
status of the insured person and the classification of the
mortality risk of the insured person. The classification can be
standard, preferred or special.
We use two methods of underwriting:
(1) non-medical underwriting, based mainly on your answers in the
application or enrollment form; and
(2) medical underwriting, based on additional medical information
which may include a physical examination.
The underwriting classes combined with the attained age, sex, and
smoking status of the insured person(s) determine the mortality
rates we will use in calculating mortality cost deductions, net
single premium factors and guarantee periods.
The investment date is the date we apply your initial premium to
the policy. It is the valuation date when we have received your
initial premium, your policy is issued, and all issue
requirements are met. Your initial premium is the premium we
must receive
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before coverage can begin. The minimum initial
Genesis I premium is $25,000 ($15,000 if under a 1035 exchange).
The minimum planned annual premium under Genesis Flex will never
be more than $5,000. We may reduce the minimum initial premium
for group or sponsored arrangements or corporate purchasers. Our
underwriting and reinsurance procedures in effect at the time you
apply limit the maximum face amount.
The policy date is when your policy is effective. The policy
date determines:
o monthly processing dates;
o policy months;
o policy years; and
o policy anniversaries.
It is not affected by when you receive the policy. In the case
of certain payroll deduction plans or other automatic investment
plans, the policy date may be different from the date we receive
the first premium payment. If the policy date is earlier, we
charge monthly deductions from the policy date. This applies
even if the policy date is before the investment date. Under
certain circumstances, we may back date your policy up to a
maximum of six months from the date we approve your application.
PREMIUMS
You may choose the amount and frequency of premium payments,
within limits.
You purchase an initial death benefit, which is the face amount
under the Option I Death Benefit, with an initial premium
payment. The minimum initial Genesis I premium is $25,000
($15,000 if under a 1035 exchange). The minimum planned annual
premium under Genesis Flex will never be more than $5,000.
We may refuse a premium payment if such payment would cause the
net amount at risk under the policy to exceed $2,500,000.
A table of illustrative premiums for a specified face amount is
shown below. This table shows actual premiums for $250,000 of
coverage at each issue age for males and females. We may accept
lower premium payments in the case of Genesis I.
For certain group or sponsored arrangements, we may reduce the
minimum premium requirements. We may offer planned premium
payment periods of durations other than 10 years. Such durations
would cause the illustrative premiums for a specified face amount
as shown below to change. We may also reduce the charges in a
policy where the initial or total premium payments exceed amounts
we specify in our published rules. However, any reductions will
reflect differences in costs or services and will not
discriminate unfairly against any person.
GENESIS I
TABLE OF ILLUSTRATIVE PREMIUMS WITH A
FACE AMOUNT OF $250,000
SINGLE LIFE, NON-SMOKER
PREMIUM
-------
ISSUE
AGE MALE FEMALE
- --- ---- ------
50 $ 95,484 $ 84,669
60 128,696 114,574
70 165,233 151,151
SURVIVORSHIP, NON-SMOKERS
ISSUE AGE
---------
MALE FEMALE PREMIUM
- ---- ------ -------
55 45 $63,990
60 55 86,763
70 65 120,989
GENESIS FLEX
TABLE OF ILLUSTRATIVE PREMIUMS WITH A
FACE AMOUNT OF $250,000
SINGLE LIFE, NON-SMOKER
PREMIUM
-------
ISSUE
AGE MALE FEMALE
- --- ---- ------
50 $ 11,623 $ 10,255
60 16,354 14,212
70 23,632 20,170
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SURVIVORSHIP, NON-SMOKERS
ISSUE AGE
---------
MALE FEMALE PREMIUM
- ---- ------ -------
55 45 $ 7,594
60 55 10,319
70 65 14,615
ALLOCATION OF PREMIUM PAYMENTS
Before the end of the free look period, we will allocate your
initial premium to the Liquid Asset Division.
At the end of the free look period, we will allocate your
investment value to the divisions according to your instructions.
However, if we receive written
instructions with your initial premium to allocate all or a
portion of such premium to the Fixed Account, we will do so even
before the end of the free look period.
LIFE INSURANCE PREMIUM PAYMENT TEST (GENESIS FLEX)
We designed Genesis Flex to comply with the Life Insurance
Premium Payment Test. As such, certain distributions under a
policy, such as loans, should receive favorable tax treatment
afforded life insurance policies under Federal tax law.
MODIFIED ENDOWMENT CONTRACTS (GENESIS I)
Genesis I is generally a "modified endowment contract." As such,
the amount of certain distributions made during the insured's
lifetime, such as policy loans, partial withdrawals or
surrenders, will be includible in your gross income to the extent
of any income in the policy ("income-first basis"), and a 10%
penalty tax may be imposed on such income distributed before you
attain age 59 1/2.
For more information on "modified endowment contracts," and the
Life Insurance Premium Payment Test, SEE TAX CONSIDERATIONS, PAGE
{ }.
MAKING ADDITIONAL PREMIUM PAYMENTS
PLANNED PREMIUMS (GENESIS FLEX ONLY)
You can make premium payments on a planned basis during the first
ten policy years following issue of the policy or increase in
face amount subject to our minimum premium requirements. Subject
to our rules, we may offer planned premium payment periods of
other than 10 years. We will send reminder notices for planned
premiums that are not paid as part of an automatic withdrawal
program. Any change in the amount, period and frequency of
planned premiums will be subject to our rules at the time of the
request. We will treat any premium we receive more than 30 days
after a planned premium payment date as an unplanned premium. In
addition, we will treat any premium we receive above the planned
premium as an unplanned premium.
UNPLANNED PREMIUMS
You can make unplanned premium payments while coverage is in
effect, provided the insured party is age 80 or under. Under
survivorship policies, both insured parties must be alive and
also age 80 or under. Subject to our rules, the minimum
unplanned premium is $5,000 under a Genesis I policy and $500
under a Genesis Flex policy. We may require evidence of
insurability based on our underwriting rules if the unplanned
premium would cause the death benefit to increase. Unless
otherwise specified, if there is any debt, we will use any
unplanned premium as a loan repayment with any excess applied as
an additional premium payment. SEE TAX STATUS OF THE POLICY,
PAGE { }.
On the date we receive and accept your additional premium
payment, the following will occur:
(1) Your variable insurance amount will increase.
(2) Your investment value will increase. SEE INVESTMENT VALUE,
PAGE { }.
(3) Your tabular value will increase. SEE TABULAR VALUE, PAGE { }.
On the processing date on or next following the date we receive
and accept the additional premium payment, your guaranteed
benefits will increase as follows:
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(1) If your guarantee period before the premium payment ends
before the maturity date, we will use your tabular value as of
the processing date to calculate your new guarantee period,
subject to any maximum guarantee period shown in your policy
Schedule. We will apply any excess as indicated in (2).
(2) If your guarantee period ends on the maturity date, we will
apply your tabular value or the excess from (1) as a net single
premium for life to increase the face amount.
(3) The guarantee period ends on the earlier of the date
determined above, or any maximum shown in the policy schedule.
ADDITIONAL PREMIUM ALLOCATION
We will allocate any additional premiums to the Liquid Asset
Division until we accept them according to our rules. Unless
you specify otherwise, we will allocate additional premium
payments among the divisions of Account A and the Fixed Account
in proportion to the investment value in each division of Account
A and the Fixed Account on the date we accept the premium. If
there is no investment value attributable to Account A, we will
allocate the additional premium payments to the Fixed Account.
PREMIUM PAYMENTS AFFECT YOUR COVERAGE
If you stop making premium payments or you make insufficient
premium payments, your policy continues in effect only until your
cash surrender value no longer covers the monthly deductions for
your benefits. If this happens, your policy may lapse. SEE
LAPSE, PAGE { }.
If you do not take out a policy loan, we guarantee that your
policy will not lapse during the guarantee period, regardless of
your cash surrender value. However, if the cash surrender value
of your policy drops below zero because of policy debt, we can
terminate your policy, even during the guarantee period. SEE
LAPSE, PAGE { }.
DEATH BENEFITS
You can decide the amount of insurance you need, now and in the
future. When we issue your policy, we base the initial insurance
coverage on the instructions in your application.
FACE AMOUNT
Your face amount can change as a result of:
o your choice of death benefit option;
o increases to satisfy the federal income tax law definition
of life insurance;
o a change in your death benefit option;
o partial withdrawals;
o requested increases or decreases in the face amount; or
o a transaction which causes the face amount to change.
As long as your policy is in force, we will pay the death
proceeds to your beneficiary(ies) when the insured person dies
under a single life policy, or on the death of the last surviving
insured under a survivorship policy. The beneficiary(ies)
is(are) the person (people) you name to receive the death
proceeds from your policy. The death proceeds are:
o your face amount; plus
o any appropriate adjustments for your death benefit option;
minus
o your outstanding policy loans with accrued loan interest;
minus
o outstanding policy charges owing before the insured person's
date of death.
There could be outstanding policy charges if the insured dies
while your policy is in the grace period.
DEATH BENEFIT OPTIONS
If you buy a Genesis I policy, you have a choice of two death
benefit options: Option I or Option II. Currently, we do not
offer death benefit Option II for Genesis Flex policies.
All Genesis I policies are purchased with the Option I Death
Benefit. After the first policy anniversary, you may change the
death benefit option under your policy and thereafter, you may
change back and forth between the two, subject to our rules at
the time you request the change. You may change your death
benefit option on any policy anniversary, but no more frequently
than once every three policy years. SEE CHANGES IN DEATH BENEFIT
OPTION, PAGE { }.
Under death benefit Option I, your death benefit is the greater
of:
1. your face amount as of the most recent processing date (the
date each quarter when
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we deduct charges from the divisions
and the fixed account), plus any premiums you have paid and
minus any partial withdrawals you have made since that
processing date; or
2.your variable insurance amount. SEE VARIABLE INSURANCE
AMOUNT, PAGE { }.
Under death benefit Option II, your death benefit is the greater
of:
1. your face amount plus the Option II death benefit
adjustment, as of the date of death of the insured
person(s); or
2.your variable insurance amount. SEE VARIABLE INSURANCE
AMOUNT, PAGE { }.
The Option II death benefit adjustment is the greater of (i) the
Option II guaranteed death benefit or (ii) your investment value
plus debt.
When we issue your policy, the Option II guaranteed death benefit
equals the premiums you have paid. On each valuation date during
the guarantee period, we calculate the Option II guaranteed death
benefit as follows:
(1) We take the Option II guaranteed death benefit from the
prior valuation date;
(2) We add interest at the Option II guaranteed death benefit
interest rate (as defined below);
(3) We add any premiums you paid during the current valuation
period; and
(4) We subtract any partial withdrawals you have made during the
current valuation period.
In no event will the Option II guaranteed death benefit be
greater than two times the sum of each premium you paid, minus
any partial withdrawals associated with each premium paid. After
your guarantee period ends, the Option II guaranteed death
benefit is zero.
The Option II guaranteed death benefit interest rate equals 7%;
however, (i) for the Liquid Asset Division it equals the net rate
of return during the current valuation period, if less than an
annualized rate of 7%; (ii) for the fixed account it equals the
rate of interest credited to such amounts during the current
valuation period, if less than an annualized rate of 7%; and
(iii) for amounts transferred to the general account as
collateral for any policy loans, it equals the rate of interest
credited to such amounts during the current valuation period, if
less than an annualized rate of 7%.
VARIABLE INSURANCE AMOUNT
Federal income tax law requires that your death benefit be at
least as much as your investment value plus policy debt
multiplied by a factor defined by law. This factor is based on:
o the insured person's age;
o the insured person's gender; and
o underwriting class.
We will adjust your policy to continue to qualify as life
insurance under the federal income tax laws in existence at the
time the policy was issued.
Accordingly, the variable insurance amount will vary daily based
on the investment results, premium payments made and partial
withdrawals taken and will be determined as follows:
(1) We determine the investment value;
(2) We add any debt;
(3) We multiply by the net single premium factor.
It will never be less than the amount required by applicable law
to keep the policy qualified as life insurance.
CHANGES IN DEATH BENEFIT OPTION (GENESIS I ONLY)
Starting one year after your policy date, you may request a
change in your death benefit option once every three policy
years. The change will take effect on the processing date on or
next following the date that we approve it the change.
After we approve your request, we send a new policy schedule page
to you. You should attach it to your policy. We may ask you to
return your policy to our customer service center so that we can
note the change in your schedule. A death benefit option change
applies to your entire face amount.
For you to change from death benefit Option I to Option II, you
must provide to us proof that the insured person(s) is (are)
insurable under our normal rules of underwriting for your policy
class, except in Florida.
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On the effective date of your option change (the next processing
date after our approval), your face amount is changed as follows:
Change Change Face Amount
From To Following Change:
---- -- -----------------
Option I Option II your face amount before the
change minus the Option II death
benefit adjustment as of the effective
date of the change.
Option I Option II your face amount before the
change plus the Option II death
benefit adjustment as of the effective
date of the change.
We increase or decrease your face amount to keep the amount of
your death benefit the same as on the date you changed your death
benefit option. When your death benefit remains the same, there
is no immediate change in the net amount at risk so your cost of
insurance charges are the same. SEE CHARGES, DEDUCTIONS AND
REFUNDS, PAGE { }.
You may incur tax consequences due to a change in your death
benefit option. SEE TAX STATUS OF THE POLICY, PAGE { }, AND
MODIFIED ENDOWMENT CONTRACTS, PAGE { }. You should consult a tax
advisor before changing your death benefit option.
CHANGES IN DEATH BENEFIT AMOUNTS
Contact our customer service center to request an increase or
decrease in your policy death benefit. The request is effective
as of the next processing date on or next following the date we
receive your request and approve it, unless there are
underwriting or other requirements.
You may want to increase the face amount under your policy. You
may do this while your policy is in force. You may request a
decrease in the face amount. You must provide evidence that the
insured person(s) is (are) still insurable in order to increase
your death benefit. You may request a change in the face amount
only after your first policy anniversary.
The increase must at least equal the minimum increase we then
allow. Any decrease in the face amount must at least equal the
minimum decrease we then allow. If there have been any prior
increases in your face amount, we will apply the decrease first
against the prior increases in the reverse order of their
effective dates. Decreases in the face amount will be subject to
our rules at the time of request.
Decreases in the face amount could result in the policy becoming
a "modified endowment contract" or have other adverse tax
consequences. SEE TAX CONSIDERATIONS, PAGE { }.
After we approve your request, we send you a new schedule page
for your policy which includes the:
o face amount;
o benefit under any applicable riders;
o guaranteed cost of insurance rates; and
o annual premium.
Keep this new schedule with your policy. We may ask you to send
your policy to us so that we can note the change in your
schedule.
In some instances, we do not approve a requested change because
it would disqualify your policy as life insurance under the
applicable federal income tax law. If we disapprove a change, we
provide you with a notice of our decision. SEE TAX
CONSIDERATIONS, PAGE { }.
If you change your death benefit amount, the tabular value will
be used to calculate a new guarantee period. Any part of the
tabular value in excess of the amount required to increase the
guarantee period to life will be applied as a net single premium
for life to increase the face amount.
You may incur tax consequences due to an increase or decrease in
your death benefit. SEE TAX STATUS OF THE POLICY, PAGE { } AND
MODIFIED ENDOWMENT CONTRACTS, PAGE { }. You should consult a tax
advisor before changing your death benefit amount.
GUARANTEE PERIOD
The death benefit under your policy is subject to a guaranteed
minimum amount for a guaranteed minimum period of time regardless
of investment results. The guaranteed minimum amount is your
policy's face amount and the policy's guarantee period is the
minimum period of time we guarantee that your policy will remain
in force regardless of its investment results. However, if you
take out policy loans, and your cash surrender value is negative,
we will terminate your policy before the end of the guarantee
period unless sufficient payment is made. SEE POLICY LOANS, PAGE
{ }.
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Your guarantee period at issue depends upon your initial premium
payment and face amount. Thereafter, the guarantee period may
change if (1) you take a partial withdrawal, (2) you pay a
planned or unplanned premium, or (3) you change the face amount
of your policy. For Genesis Flex, each planned premium extends
the guarantee period, and if you pay all planned premiums as
planned and the insured(s) is (are) in a standard or better
underwriting class, the guarantee period will last until the
maturity date of your policy. For Genesis I, if you elect the
minimum face amount we allow for a given single premium and the
insured(s) is (are) in a standard or better underwriting class,
the guarantee period will last until the maturity date of your
policy; however, if you elect a face amount greater than such
minimum, your guarantee period will end before the maturity date.
We will calculate the guarantee period using (1) rates no greater
than the guaranteed maximum cost of insurance rates shown in the
policy and (2) a 4.0% interest assumption. For a given premium
payment and face amount, the guarantee period will differ
depending on the age, sex and underwriting class of the
insured(s). For example under a single life policy, for the same
premium and face amount, an older insured will have a shorter
guarantee period than a younger insured of the same sex and in
the same underwriting class.
Lifetime Guarantee Option
Subject to our rules, you may be able to purchase a lifetime
guarantee option. If the guarantee period under your policy ends
before the maturity date, you may request a change to your policy
such that the guarantee period will end on the maturity date.
The request must be in a written form satisfactory to us. On the
date we receive your request, if the Option II death benefit is
in effect under your policy, we will first change the death
benefit option to the Option I Death Benefit and then change the
face amount such that the guarantee period will end on the
maturity date. If the Option I Death Benefit is already in
effect under your policy, we will change the current face amount
such that the guarantee period will end on the maturity date.
SEE GUARANTEE PERIOD, PAGE { }.
When Your Guarantee Period Ends Before the Maturity Date
After the end of the guarantee period and a grace period, we may
cancel your policy if the cash surrender value on a processing
date will not cover the charges due. SEE CHARGES, DEDUCTIONS AND
REFUNDS, PAGE { }.
BENEFITS AT MATURITY
If the insured person reaches age 100 (for survivorship policies,
if the younger insured person reaches age 100), coverage under
the policy will end, and we will pay you the cash surrender value
of the policy. Your cash surrender value is your investment
value minus any unrecovered deferred charges, plus any accrued
general account loan interest credited, minus any policy charges
incurred but not yet deducted. Some part of this payment may be
taxable. You should consult your tax adviser.
POLICY VALUES
INVESTMENT VALUE
Your investment value is the total amount you have in the fixed
account and the variable divisions. Your investment value thus
reflects:
o all premiums paid;
o all fees and charges;
o your policy loans;
o partial withdrawals;
o the variable divisions' investment performance; and
o interest accrued in the fixed account, and in the general
account on amounts held as collateral for loans.
CASH SURRENDER VALUE
Your policy's cash surrender value fluctuates daily with the
investment results. With respect to premiums allocated to
Account A, we do not guarantee any minimum cash surrender value.
On any date, the cash surrender value equals the investment value
minus any deferred charges not yet deducted, plus any accrued
general account loan interest credited, minus any charges
incurred and not yet deducted.
INVESTMENT VALUE IN EACH DIVISION OF ACCOUNT A
On each valuation date, the amount of investment value in each
division of Account A will be calculated as follows:
(1) We take the amount of investment value in the division at the
end of the preceding valuation period.
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(2) We multiply (1) by the division's net rate of return for the
current valuation period.
(3) We add (1) and (2) together.
(4) We add to (3) any additional premium payments allocated to
the division during the current valuation period.
(5) We add or subtract reallocations to or from the division
during the current valuation period.
(6) We subtract from (5) any partial withdrawal and any
associated charges allocated to the division during the current
valuation period.
(7) We add to (6) any loan repayments or loan interest payments
received and subtract any loans which are allocated to the
division during the current valuation period.
(8) If the policy anniversary occurs during the current valuation
period, we add to (7) the amount allocated to the division for
any general account loan interest credited.
(9) If a processing date occurs during the current valuation
period, we subtract from (8) the amounts allocated to the
applicable division for deferred loading, insurance based charges
and transaction and other charges.
If the processing date is also the policy anniversary, any loan
interest charge will be deducted from the investment value. SEE
CHARGES AND DEDUCTIONS, PAGE { }. Amounts in (8) and (9) will be
allocated to each division in the proportion that (7) bears to
the investment value.
(10) If the charges in (9) exceed the amount in (8), we will
first calculate the cash surrender value to determine the amount
of any overdue charges and then set the amount of investment
value in each division and the fixed account to zero.
TABULAR VALUE
Before the investment date, your tabular value is zero. Your
tabular value on the investment date equals the investment value
on that date. Thereafter, we calculate your tabular value in the
same manner as your cash surrender value except that: (i) the
mortality cost will be based on rates no greater than the
guaranteed maximum cost of insurance rates; (ii) currently other
charges are not reflected in our computations; and (iii) the net
rate of return will be based on the interest rate used in our
computations, which is currently 4% per year. The tabular value
calculations do not reflect loans, repayments, or loan interest
payments. We calculate the variable insurance amount used in
computing the tabular value in the same manner as described under
Insurance Benefits, except that tabular value replaces the
investment value plus debt.
MEASUREMENT OF INVESTMENT EXPERIENCE
INDEX OF INVESTMENT EXPERIENCE AND UNIT VALUE
We determine the investment experience of Account A on each
valuation date. We use an index to measure changes in experience
during a valuation period. We set the index at $10 when the
first investments in a division are made, except for the Growth
Opportunities, Developing World, OTC, Research, Total Return,
Growth & Income, Growth, and Global Fixed Income Divisions which
started with indices of $10.97, $10.63, $14.64, $16.43, $13.76,
$10.94, $11.99, and $12.24, respectively. The index for a
current valuation period equals the index for the last valuation
period multiplied by the experience factor for the current
period.
We may express the value of amounts allocated to Account A
divisions in units. The index of investment experience is equal
to the value of one unit.
We determine the number of units for a given amount on a
valuation date by dividing the dollar value of that amount by the
index of investment experience for that date.
HOW WE DETERMINE THE EXPERIENCE FACTOR
For divisions of Account A, the experience factor reflects the
investment experience of the portfolio in which the division
invests as well as the charges assessed against the division for
a valuation period. The factor is calculated as follows:
(1) We take the net asset value of the portfolio in which a
division invests as of the end of the current valuation period.
(2) We add to (1) the amount of any dividend or capital gains
distribution declared during the current valuation period for
such portfolio and reinvested in the portfolio. We subtract from
that amount a charge for our taxes, if any.
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(3) We divide (2) by the net asset value of the portfolio at the
end of the preceding valuation period.
(4) We subtract the daily mortality and expense risk charge.
SEE MORTALITY AND EXPENSE RISK CHARGE, PAGE { }.
(5) We subtract the daily asset based administrative charge.
SEE ADMINISTRATIVE CHARGE, PAGE { }.
Calculations for divisions investing in mutual fund portfolios
are made on a per share basis.
NET RATE OF RETURN FOR ACCOUNT A
The net rate of return for an Account A division during a
valuation period is the experience factor for that valuation
period minus one. SEE INDEX OF INVESTMENT EXPERIENCE AND UNIT
VALUE, PAGE { }.
The value of amounts allocated to the variable divisions goes up
or down depending on investment performance.
FOR AMOUNTS IN THE VARIABLE DIVISIONS, THERE IS NO GUARANTEED
MINIMUM CASH VALUE.
ALLOCATION CHANGES
After your free look period ends, you may make up to twelve free
transfers among the variable divisions, or to the fixed account,
in each policy year. We do not limit your number of transfers,
but we charge a $25 fee for each transfer that you make after the
first twelve. We also reserve the right to limit, upon notice,
the maximum number of transfers you may make within a contract
year. Special limits apply to transfers to and from the fixed
account. See below.
You may make transfer requests in writing to our customer service
center. Your transfer takes effect on the valuation date we
receive your request. The minimum amount we allow you to
transfer on one day is $250. However, if the amount remaining in
a variable division is less than $250 when you make a transfer
request, we transfer the entire amount out of that division.
EXCESSIVE TRADING
Excessive trading activity can disrupt investment portfolio
management strategies and increase portfolio expenses. Thus, we
may limit excessive transfer activity.
Excessive transfers may cause:
o increased trading and transaction costs;
o disruption of planned investment strategies;
o forced and unplanned portfolio turnover;
o lost opportunity costs; and
o the investment portfolios to have large asset swings that
decrease their ability to provide maximum investment return
to all policyowners.
In response to excessive trading, we may refuse to place, or
accept restrictions on, transfers made by third-party agents
acting on behalf of owners. We may do the same for transfers
made by a market timing service. We will make refusals or place
restrictions when we determine, in our sole discretion, that
transfers are harmful to the investment portfolios, or
policyowners as a whole.
FIXED ACCOUNT TRANSFERS
We consider any allocation of premium or transfer of investment
value to the fixed account to be a separate fixed account
allocation. We currently permit transfers from an allocation of
the fixed account only once a year on or within 30 days of the
Expiry Date of the guaranteed interest rate. SEE THE FIXED
ACCOUNT, PAGE { }.
Each year, you may transfer out of an allocation a maximum of:
(a) 33% of the amount of such allocation, or (b) $2,000,
whichever is greater. If we receive your transfer request up to
30 days before the Expiry Date, we will make the transfer on the
Expiry Date. If we receive your request on or within 30 days
after the Expiry Date, we will make the transfer at the end of
the valuation period in which we receive a satisfactory transfer
request at our Service Center.
The minimum transfer amount is $250 or the entire remaining
amount of the allocation on the transfer date, whichever is less.
Unless you specify otherwise, we will transfer amounts from
allocations within the Fixed Account from the fixed allocations
closest to their respective rate Expiry Date. These rules are
subject to change in the future.
We reserve the right to establish an interest rate for transfers
to the Fixed Account that may differ from the rate that we
establish for allocations of planned and unplanned premiums to
the Fixed Account. Transfers to the fixed account are not
otherwise restricted. We also reserve the right to reduce the
amount otherwise available for transfer from the
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Fixed Account by
any amounts that have been previously withdrawn from the Fixed
Account.
DOLLAR COST AVERAGING
If your policy has at least $10,000 of investment value invested
in the fixed account, the Limited Maturity Bond Division or the
Liquid Asset Division, you can elect dollar cost averaging. The
main goal of dollar cost averaging is to protect your policy
values from short-term price changes.
You may add dollar cost averaging to your policy at any time.
With dollar cost averaging, you designate for automatic transfer
either a dollar amount, or a percentage of your investment value,
from the fixed account, or the division investing in the Limited
Maturity Bond Division or the Liquid Asset Division. We
automatically transfer the amount you select for dollar cost
averaging each period from your chosen division to one or more
other variable divisions. You may not make transfers to the
fixed account under dollar cost averaging.
This systematic plan of transferring investment values is
intended to reduce the risk of investing too much when the price
of an investment portfolio's shares is high. It also reduces the
risk of investing too little when the price of an investment
portfolio's shares is low.
Since you transfer the same dollar amount to other divisions each
period, you purchase more units in a division if the value per
unit is low, and you purchase fewer units if the value per unit
is high.
Dollar cost averaging does not assure a profit nor does it
protect you against a loss in a declining market.
The minimum amount that you may transfer each month is $250. The
maximum amount that you may transfer is the investment value in
the Fixed Account, the Limited Maturity Bond Division or the
Liquid Asset Division divided by 12. Under this program, dollar
cost averaging will commence on the later of 20 days after the
issue date and the end of the free look period.
The first dollar cost averaging date must be at least five days
after we receive your dollar cost averaging request. Dollar cost
averaging cannot begin before the end of your free look period.
Dollar cost averaging automatically takes place monthly, on the
same calendar day each month as the policy date.
We do not count dollar cost averaging transfers toward your
twelve free transfer limit per policy year. There is no charge
for this feature.
The dollar amount will be allocated to the divisions in which you
are invested in proportion to your investment value in each
division unless you specify otherwise. If, on any transfer date,
the investment value in the specified division or Fixed Account
equals or is less than the amount you have elected to have
transferred, we will transfer the entire amount and the program
will end.
CHANGING DOLLAR COST AVERAGING
You may change your dollar cost averaging program one time per
policy year, or cancel this program by sending satisfactory
notice to our customer service center at least seven days before
the next transfer date.
WHAT HAPPENS IF A DIVISION IS NOT AVAILABLE
When a distribution is made from an investment portfolio
supporting a variable division in which reinvestment is not
available, we will allocate the distribution, unless you specify
otherwise, to the Liquid Asset Division.
Such a distribution can occur when (a) an investment portfolio
matures, or (b) a distribution from a portfolio cannot be
reinvested in the portfolio due to the unavailability of
securities for acquisition. When an investment portfolio
matures, we will notify you 30 days in advance of that date. To
elect an allocation to other than the Liquid Asset Division, you
must provide satisfactory notice to us at least seven days prior
to the date the portfolio matures. We will not count such a
transfer toward your twelve free transfer limit per policy year.
When a distribution from a portfolio cannot be reinvested in the
portfolio due to the unavailability of securities for
acquisition, we will notify you promptly after the allocation to
the Liquid Asset Division has occurred. If within 30 days you
allocate the investment value from the Liquid Asset Division to
other divisions of your choice, such allocations will not be
included in determining if the excess allocation charge will
apply.
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POLICY LOANS
You may borrow against your policy any time after the free look
period, or as required by law, by using your policy as security
for a loan. The amount you borrow is called a policy loan. Your
policy debt is:
1. the total amount you borrow from your policy, plus
2. any policy loan interest that is capitalized when due, minus
3. any policy loan repayments you make.
Unless state law requires differently, any new policy loan you
take must be at least $500. The maximum amount you can borrow on
any valuation date, unless required differently by state law, is
90% of the sum of your cash surrender value plus any outstanding
policy loans and interest. The minimum and maximum amounts will
be shown in your policy.
If you request an additional loan, we add the amount you request
to your existing outstanding policy loan. This way, there is
only one loan outstanding on any one policy at any time.
Your request for a policy loan must be directed to our customer
service center.
Based on our administrative system, we may have other rules for
policy loans. For example, we may require that your loan request
be for a dollar amount rather than a percentage to be taken from
a specific division.
For Genesis I policies, you may have to pay a 10% penalty tax on
loans. For information on the tax treatment of loans from
policies that are "modified endowment contracts," SEE MODIFIED
ENDOWMENT CONTRACTS, PAGE { }.
Loan interest charges on your policy loan accrue daily at an
annual interest rate of 5.0%. Interest is due in arrears on each
policy anniversary. If you do not pay your interest when it is
due, we add it to your policy loan on your policy anniversary.
You may repay all or part of your policy loan at any time while
your policy is in force. We assume that any payments you make,
other than your scheduled premiums, are policy loan repayments.
You must tell us otherwise if you want us to consider additional
payments as premiums. Each loan repayment must be $500 or the
amount of the loan, whichever is less.
When you take a policy loan, we transfer an amount equal to your
policy loan amount from the variable divisions and the fixed
account to our general account as collateral for your loan. We
follow this same process for loan interest in the amount due at
your policy anniversary. We credit loan collateral with interest
at an annual rate of at least 4% (and, on a current basis, 5% for
"preferred loans").
With respect to Genesis I policies, loans where the amount of the
collateral equals the investment value minus the total of all
premium payments under the policy and the initial loan being
carried over on a 1035 exchange are considered "Preferred
Loans." With respect to Genesis Flex policies, all new loans
taken after the insured person (youngest insured person in the
case of survivorship policies) turns age 60 or after the tenth
policy anniversary are considered "Preferred Loans." The tax
consequences of Preferred Loans are uncertain. You should
consult a tax advisor as to these consequences.
Unless you tell us otherwise, we deduct the amount transferred
from each division in the same proportion that your investment
value in that division has to your net investment value
immediately before the loan transaction. We determine the
amounts in each division as of the valuation date when we receive
your loan request.
Any policy loans you take may have tax consequences. SEE
DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM MODIFIED ENDOWMENT
CONTRACTS, PAGE { }, AND DISTRIBUTIONS OTHER THAN DEATH BENEFITS
FROM POLICIES THAT ARE NOT MODIFIED ENDOWMENT CONTRACTS, PAGE {
}.
LOAN REPAYMENT
We transfer the amount of interest credited to you for a policy
year from the general account on your policy anniversaries. When
you make a loan repayment, we transfer an amount equal to your
repayment from the general account. Unless you tell us
otherwise, we allocate these transfer amounts among the variable
divisions and the fixed account in the same proportion as your
current premium allocation.
LOANS AND YOUR BENEFITS
Even if you repay your loan, it is important for you to know that
any loan against your policy has a permanent effect on your
investment value. This means that the benefits under your policy
may also be affected.
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The loan is a first lien on your policy. This means we deduct
your policy loan and accrued loan interest from the death
proceeds payable and the cash surrender value payable on
surrender.
Failure to repay your loan may affect the guaranteed premium,
minimum death benefit and the length of time your policy remains
in force. The policy lapses (even during the guarantee period)
when the cash surrender value minus policy loans and accrued loan
interest is not enough to cover your monthly deductions. Loans
increase the risk that your policy may lapse. If your policy
lapses with a loan outstanding, you may have adverse tax
consequences. SEE TAX CONSIDERATIONS, PAGE { }.
If you do not repay your policy loan, we deduct your outstanding
policy loan amount and accrued loan interest from the death
proceeds payable and the cash surrender value payable on
surrender.
PARTIAL WITHDRAWALS
You may request a partial withdrawal after the free look period
by contacting our customer service center. The effective date of
the partial withdrawal will be the date that we receive your
written request at our customer service center.
You may make up to four partial withdrawals per policy year
without charge. If you make more than four partial withdrawals
in a policy year, we can charge $25 or 2% of the amount
withdrawn, whichever is less, for each additional withdrawal. If
you purchased your policy in connection with a Section 1035
exchange, you may not make partial withdrawals for the first
seven policy years. We may set rules on partial withdrawals,
based on our administrative system. For example, we may require
that you specify a dollar amount rather than a percentage to be
taken from a specific division.
The minimum partial withdrawal you may make is $1,000. The
maximum partial withdrawal you may make during any policy year,
without accelerating recovery of the deferred loading, is 15% of
your investment value. In no event may a partial withdrawal be
more than 90% of your investment value, less any applicable
unrecovered deferred loading. If you request a withdrawal of
more than this maximum, we may require you to surrender your
policy. When you take a partial withdrawal, we deduct your
withdrawal amount plus any applicable fees from your investment
value. SEE CHARGES, DEDUCTIONS AND REFUNDS, PAGE { }.
Partial withdrawals may have adverse tax consequences. SEE TAX
CONSIDERATIONS, PAGE { }.
PARTIAL WITHDRAWAL MECHANICS
Unless you tell us otherwise, we will make a partial withdrawal
from the variable divisions in the same proportion that each
division has to your investment value immediately before your
withdrawal. If there is insufficient investment value in the
divisions, we will deduct the remaining reduction from your
allocations to the fixed account.
We will send a new schedule showing the effect of your withdrawal
if there is any change to your face amount.
To make this change, we may ask that you return the policy to our
customer service center. Your withdrawal and any reductions in
the death benefits are effective as of the valuation date on
which we receive your request. SEE DISTRIBUTIONS OTHER THAN
DEATH BENEFITS FROM MODIFIED ENDOWMENT CONTRACTS, PAGE { }, AND
DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM POLICIES THAT ARE
NOT MODIFIED ENDOWMENT CONTRACTS, PAGE { }.
ACCELERATED RECOVERY OF DEFERRED CHARGES
An excess partial withdrawal is the amount by which the sum of
all partial withdrawals taken during a policy year plus the
current partial withdrawal exceed 15% of the investment value on
the date of the withdrawal. We will consider an excess partial
withdrawal to be a partial surrender of the policy and we will
recover a pro rata portion of the unrecovered deferred charges.
We will deduct this amount in proportion to the investment value
in each division or the Fixed Account from which the excess
partial withdrawal was taken.
Collection of a portion of the deferred loading for an excess
partial withdrawal may shorten the period during which the
deferred loading is recovered, or the last installment amount may
be reduced.
EFFECT OF A PARTIAL WITHDRAWAL ON THE INVESTMENT VALUE AND DEATH
BENEFIT
As of the effective date of a partial withdrawal:
(1) We reduce the investment value of the policy by the partial
withdrawal and any associated charges.
(2) Unless you specify otherwise, the reduction in investment
value will be in proportion to the
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investment value in each
division in which you are invested as of the effective date of
the partial withdrawal. If there is insufficient investment
value in the divisions, we will deduct the remaining reduction
from your allocations to the fixed account.
(3) We will reduce any amounts paid in accordance with the
suicide provision of the policy by the amount of any partial
withdrawals and any associated charges.
(4) The variable insurance amount will reflect the partial
withdrawal and any associated charges.
EFFECT OF A PARTIAL WITHDRAWAL ON GUARANTEED BENEFITS
A partial withdrawal may affect the guaranteed benefits under the
policy. The change, if any, in the face amount and guarantee
period as of the processing date on or next following the
effective date of a partial withdrawal will be calculated as
follows:
(1) Before effecting the partial withdrawal, we calculate the
death benefit as of the date of the partial withdrawal.
(2) We subtract from (1) the amount of the partial withdrawal and
any associated charges.
(3) If the amount determined in (2) is less than the face amount,
we reduce the face amount to the amount determined in (2).
Decreases in the face amount could result in your policy becoming
a "modified endowment contract" or have other adverse tax
consequences. SEE MODIFIED ENDOWMENT CONTRACTS, PAGE { }.
(4) We will use the tabular value as of such processing date and
the face amount to calculate a new guarantee period. The
guarantee period ends on the earlier of the date so determined
and any maximum shown in the policy. In no event will we allow a
partial withdrawal that will reduce the guarantee period below
the minimum shown in the policy, or that will reduce the face
amount below the amount we would then allow.
If the death benefit becomes payable before the processing date
on or next following the effective date of a partial withdrawal,
we will deduct the amount of the partial withdrawal from the
death benefit proceeds payable, if the death benefit is
determined to be the face amount.
RIGHT TO CONVERT POLICY
During the first 24 months after your policy date, you have the
right to convert your policy to a guaranteed policy, unless state
law requires differently. To do this, we transfer the entire
amount you have in the variable divisions to the fixed account.
We allocate all of your future premiums only to the fixed
account. WE DO NOT ALLOW ANY FUTURE PAYMENTS OR TRANSFERS TO THE
VARIABLE DIVISIONS WHEN YOU EXERCISE THIS RIGHT.
We will not charge you for the transfer to make this exchange.
SEE THE FIXED ACCOUNT, PAGE { }.
We will also offer this right of conversion any time there is a
change in the investment adviser of any portfolio or if there is
a material change in the investment objectives or restrictions of
any portfolio in which the divisions invest. We will notify you
if there is any such change. You will be able to convert your
policy within 60 days after our notice or the effective date of
the change, whichever is later.
LAPSE
Your insurance coverage continues as long as your policy cash
surrender value is enough to pay all deductions each month. We
guarantee your policy not to lapse during the guarantee period,
unless there is debt and the cash surrender value is negative.
If there is an outstanding policy loan on which interest is
accruing, your policy will lapse if the accrued interest owed on
the loan is more than the cash surrender value.
IF THE GUARANTEE PERIOD IS NOT IN EFFECT
Your policy, including all of its attached riders, lapses
entirely on any monthly processing date where your cash surrender
value is not enough to pay all of the monthly deductions from
your investment value.
You have a 61-day grace period beginning on that monthly
processing date to avoid lapse of your policy. SEE GRACE PERIOD,
PAGE { }. It is important that you pay the full amount we
request within the 61-day grace period. If you do not, your
policy and all of its riders lapse without value. We then
withdraw your remaining account balance from the variable
divisions and the fixed account. We deduct
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amounts which you owe
us, including any deferred sales charge, and inform you that the
policy has ended.
If the insured person(s) die(s) during the grace period, we pay
death proceeds to your beneficiary with reductions for policy
loans, accrued loan interest, and monthly deductions owed.
IF THE GUARANTEE PERIOD IS IN EFFECT
If the guarantee period is in effect, your policy's face amount
will not lapse during the guarantee period, so long as there is
no policy debt. This is true even if your cash surrender value
is not enough to cover all of the deductions from your investment
value on any monthly processing date. SEE GUARANTEE PERIOD, PAGE
{ }.
The guarantee period does not protect benefits you may have under
riders attached to your policy. These benefits lapse if on any
monthly processing date your policy cash surrender value is not
enough to pay all monthly deductions from your investment value.
While the guarantee period applies, we reduce your investment
value by monthly deductions, but not below zero. We permanently
waive monthly deductions which occur during the guarantee period
which would reduce your investment value below zero. Deductions
resume when there is positive investment value.
|------------------------------|
| LAPSE SUMMARY |
|------------------------------|
| If the | If the |
| guarantee | guarantee |
| period is in | period is |
| effect | not in |
| | effect |
|---------------|--------------|
|Your policy | Your policy |
|does not lapse | enters the |
|if you do not | grace period |
|have enough | if your cash |
|cash surrender | surrender |
|value to pay | value is not |
|the monthly | enough to |
|deductions. | pay the |
|However, if | monthly |
|you have any | charges. If |
|riders, they | you do not |
|lapse and only | pay enough |
|your base | premium to |
|coverage | cover the |
|remains in | past due |
|force. | monthly |
|Charges for | charges, |
|your coverage | plus the |
|are deducted | monthly |
|each month | charges |
|until your | through the |
|remaining | following |
|investment | two months, |
|value is not | your policy |
|enough to pay | lapses. |
|these charges. | |
|At this point, | |
|we waive the | |
|monthly | |
|charges for | |
|the rest of | |
|the guarantee | |
|period. | |
|-------------------------------
GRACE PERIOD
Your policy enters the 61-day grace period if, as of a monthly
processing date:
1. your cash surrender value is negative; and
2. your guarantee period has expired or terminated.
We notify you that the policy is in a grace period at least 30
days before the grace period ends. We provide this notice to
you, or a person to whom you have assigned your policy, at the
last address you have listed in our records. We also notify you
of the required premium payment amount necessary to reinstate
your policy. This amount is generally the amount of past due
charges, plus the amount that covers your estimated monthly
policy deductions and all riders attached to your policy for the
next two months.
If we receive your payment of the required amount before the end
of the grace period, we use it to make the overdue deductions.
If there is a remaining balance, we apply it to your investment
value in the same manner as your other premium payments.
REINSTATEMENT
If you do not pay enough in premium before the end of the grace
period, you may still reinstate your policy and its riders within
three years after the grace period.
Unless state law requires differently, we will reinstate your
policy and riders if:
1. you have not surrendered your policy for its cash surrender
value;
2. you provide satisfactory evidence to us that the insured
person (and any people insured under your riders) is still
insurable according to our normal rules of underwriting for
your type of policy; and
3. You pay us at least the reinstatement cost, which is the
minimum payment for which we would then issue the policy
based on the attained age and underwriting class of the
insured(s) as of the effective date of the reinstatement.
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Reinstatement is effective as of the processing date following
our approval of your reinstatement application. If you had any
policy loans when coverage ended, we reinstate them with accrued
loan interest to the date of lapse.
We apply the premiums received after reinstatement according to
the premium allocation instructions in effect at the start of the
grace period, unless you tell us otherwise.
SURRENDER
You may surrender your policy for its cash surrender value any
time while the insured person(s) is/are living. You do this by
sending a written request and your policy to our customer service
center. You may elect to have this amount paid in a single
payment or applied under one or more Income Plans. SEE
SETTLEMENT PROVISIONS, PAGE { }.
Your cash surrender value is your investment value, minus any
unrecovered deferred charges, plus any accrued general account
loan interest credited, minus any policy charges incurred but not
yet deducted.
We deduct costs and expenses from your net investment value on
the monthly processing date before you surrender your policy. We
do not add or pro-rate them at surrender.
We compute your cash surrender value as of the valuation date we
receive your surrender request and policy at our customer service
center. All insurance coverage ends on that date.
A surrender of your policy may have adverse tax consequences.
SEE DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM MODIFIED
ENDOWMENT CONTRACTS, PAGE { }, AND DISTRIBUTIONS OTHER THAN DEATH
BENEFITS FROM POLICIES THAT ARE NOT MODIFIED ENDOWMENT CONTRACTS,
PAGE { }.
GENERAL POLICY PROVISIONS
FREE LOOK PERIOD OR RIGHT TO EXAMINE POLICY
You may cancel your policy within the free look period and we
will refund any premiums paid without interest. Generally under
a Genesis I policy, this period ends 10 days from the date you
receive the policy. For purposes of administering our allocation
rules, we deem this period as ending 15 days after a policy is
mailed from our customer service center. Some states may require
a longer free look period.
Under a Genesis Flex policy, the free look period generally ends
on the latest of (i) 10 days after you receive your policy, (ii)
45 days from the date you complete part I of the application or
enrollment form, or (iii) 10 days from the mailing of the notice
of cancellation right.
If you cancel the policy, we will require that you wait six
months before applying to us again.
If you cancel your policy during this free look period, you will
receive a refund of all premium paid. When you send your
cancellation request, your insurance coverage ends.
YOUR POLICY
The entire contract between you and us is the combination of:
o your policy;
o a copy of your original application and any applications for
an increase or a decrease;
o all of your riders;
o endorsements;
o schedule page for policy changes; and
o any reinstatement applications.
If you make a change to your coverage, we give you a copy of your
application and new schedules. If you sent us your policy, we
attach these items to your policy. Otherwise, you need to attach
the new application and schedule to your policy. Unless there is
fraud, we consider all statements made in an your application to
be representations and not guarantees. We use no statement to
deny a claim, unless it is in an application.
A president or an officer of our company and our secretary or
assistant secretary must sign all changes or amendments we make
to your policy. No other person may change the terms or
conditions of your policy.
ATTAINED AGE
We issue your policy at the age of the insured person(s) stated
in your policy schedule. This is based on the age of the insured
person(s) as of the nearest birthday to the policy date. We
determine an insured person's attained age at any given time by
adding the number of completed policy years to the age shown in
the schedule.
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OWNERSHIP
The original owner is the person named in the policy application.
If you are so named on your policy application, then you are
considered the owner. As owner, you can exercise all rights and
receive the benefits during the life of the insured person(s).
This includes the right to change the owner, beneficiaries, or
method to pay proceeds.
All rights of ownership are limited by the rights of any person
who has been assigned rights under the policy, and any
irrevocable beneficiary.
You may name a new owner by giving us written notice. The
effective date of the change to the new owner is the date the old
owner signs the notice. Until we record this change at our
customer service center, we will not change any of our actions.
A change in ownership may cause the old owner to recognize
taxable income on gain.
BENEFICIARY
You, as owner, name the beneficiary when you apply for your
policy. The primary beneficiary who survives the insured person
receives the death proceeds payable. Other surviving
beneficiaries receive death proceeds only if there is no primary
beneficiary who has survived the insured person. If more than
one beneficiary survives the insured person, they share the death
proceeds equally, unless you have told us otherwise. If none of
your policy beneficiaries has survived the insured person, we pay
the death proceeds to you as owner, or to your estate.
Once you tell us who you want as beneficiary, we keep this on
file. You may name a new beneficiary during the insured person's
lifetime. We pay the death proceeds to the most recent
beneficiary on file whom you have named.
COLLATERAL ASSIGNMENT
You may assign your policy as security by sending written notice
to us. After we record the assignment, your rights as owner and
the beneficiary's rights (unless the beneficiary was made a
permanent beneficiary under an earlier assignment) are subject to
the assignment. It is the owner's responsibility to make sure
the assignment is valid. If your policy is a modified endowment
contract (usually, Genesis I), a collateral assignment of your
policy will be treated as a taxable distribution and may be
subject to a 10% penalty tax.
INCONTESTABILITY
We can question the validity of your insurance policy if there
have been material misstatements in your application. There are
limits on how and when we can question your policy.
o We will not question the statements in your application,
attached at issue, if your policy has been in effect for two
years from your policy date (during the lifetime of the
insured person(s)) or the date specified by state law.
o We will not question statements in your application for any
reinstatement, after the reinstatement has been in effect
(during the lifetime of the insured person(s)) for two years
from the effective date of any reinstatement.
o We will not question the statements in your application for
any coverage change that increases any benefit regarding the
insured person (during the lifetime of the insured
person(s)) after two years from the effective date of the
new increase.
We may revoke this policy if we issued or reinstated your policy
based on a false or misleading statement in an application. This
includes any reinstatement application.
For survivorship policies, after the second policy anniversary we
will send you by certified mail a request for notification of the
death of either insured. If the death of either insured has
occurred and you fail to reply to such request and provide proof
of death of either insured, if applicable, we may contest the
validity of coverage under the policy. If their policy is
reinstated, this provision will be measured from the effective
date of the reinstated policy.
MISSTATEMENTS OF AGE OR GENDER
If an insured person's age or gender has been misstated, we
adjust the death benefit. We adjust death benefits to the amount
which would have been purchased for the insured person's correct
age and gender. We base this on the cost of insurance charges
deducted from your investment value on the last monthly
processing date before the insured person's death, or as
otherwise required by state law.
If unisex cost of insurance rates apply, we do not make any
adjustments for a misstatement of gender.
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SUICIDE
If the insured person commits suicide, while sane or insane,
within two years of your policy date or date of reinstatement, we
limit death benefits to:
1. the total of all premiums paid to the time of death minus
2. the amount of outstanding policy loans and accrued loan
interest, minus
3. any partial withdrawals you have taken, unless state
law requires otherwise.
If the insured person has been changed, and the new insured
person dies by suicide within two years of the change date, we
then limit the death benefit to:
1. your cash surrender value as of the change date plus
2. the premiums you paid since the change date less
3. the sum of any increases in policy loans, accrued loan
interest, and partial withdrawals taken since the change
date.
We make a limited payment to the beneficiary for an increase if
the insured commits suicide, while sane or insane within two
years of the effective date of the increase. The payment we make
is the cost of insurance and any applicable monthly expense
charges deducted for such increase.
For survivorship policies, if either insured commits suicide
within two years from the policy's issue date, upon notification
we will issue coverage to the last surviving insured on a single
life basis as of the issue date. If there is no surviving
insured, the death benefit will be limited to the amount of the
premium payments made.
If the last surviving insured commits suicide within two years of
the effective date of any increase in face amount requested by
the policyowners, we will terminate the coverage attributable to
such increase in face amount and pay only a limited benefit. The
limited benefit will be the amount of mortality cost deductions
made for such increase.
If the last surviving insured commits suicide within two years of
any date we receive and accept an additional premium which
requires evidence of insurability, any amount of death benefit
which would not be payable except for the fact that the
additional premium was made will be limited to the amount of the
additional premium.
ESTABLISHING SURVIVORSHIP -- SURVIVORSHIP POLICIES ONLY
If we are unable to determine which of the insureds was the last
survivor on the basis of the proofs of death provided to us, we
shall consider the insured (not the joint insured) to be the last
surviving insured.
PAYMENT
Within seven days after we receive all information required to
process a payment, we pay:
o death proceeds;
o cash surrender value upon surrender;
o partial withdrawals; and
o loan proceeds.
We execute transfers among the variable divisions as of the
valuation date of our receipt of your request at our customer
service center.
We may, however, delay payment if we contest the policy. We may
also delay processing payments from Separate Account A in
connection with any of these transactions at any of the following
times:
o when the NYSE is closed for trading;
o when trading on the NYSE is restricted by the SEC;
o when there is an emergency so that it is not reasonably
possible to sell securities in the variable divisions or to
determine the value of a divisions assets;
o when a governmental body with jurisdiction over the separate
account allows suspension by its order; or
o the check used to pay the premium has not cleared through
the banking system. This may take up to 15 days.
Any SEC rules and regulations that apply determine whether these
conditions exist.
We determine death proceeds on the date of death of the insured
person (for survivorship policies, the death of the last
surviving insured). The death proceeds are not affected by
changes in the value of the variable divisions after the date of
death. We pay interest at our stated rate, or at any higher rate
required by law, from the insured person's date of death to the
date of payment.
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We may delay payment for up to six months from our fixed account,
unless state law requires otherwise. We may also delay for up to
six months payment of any:
o surrender proceeds;
o withdrawal amounts; or
o loan amounts.
We pay interest at our declared rate, or at any higher rate
required by law, from the date we receive the request if we delay
payment more than 30 days.
NOTIFICATION AND CLAIMS PROCEDURES
We must receive in writing any election, designation, change,
assignment or request made by the owner.
You must use a form acceptable to us. We are not liable for
actions taken before we receive and record the written notice.
We may require you to return your policy for any policy change,
or at its surrender.
If the insured person(s) die(s) while your policy is still in
force, please let us or your registered representative know as
soon as possible. We immediately send you instructions on how to
make a claim. As proof of an insured person's death, we may
require you provide proof of the insured person's age, and a
certified copy of the insured person's death certificate.
The beneficiary and the insured person's next of kin may also
need to sign authorization forms. These authorization forms
allow us to get information about the insured person. This
information may include medical records of doctors and hospitals
used by the insured person.
NON-PARTICIPATING
Your policy does not participate in the surplus earnings of
Golden American.
DISTRIBUTION OF THE POLICIES
DSI, 1475 Dunwoody Drive, West Chester, PA 19380, is principal
underwriter and distributor of the policies, as well as for other
policies issued through Account A and other separate accounts of
Golden American. DSI is a wholly owned subsidiary of Equitable
of Iowa. DSI is a New York corporation and was organized in
1987. DSI is registered with the SEC as a broker-dealer and is a
member of the National Association of Securities Dealers, Inc.
("NASD"). We pay DSI for acting as principal underwriter under a
distribution agreement. The amount we paid under this agreement
for all of the policies issued through Separate Account A came to
approximately $835,000 for 1996, $1,372,000 for 1997, and
$745,000 for 1998.
DSI will enter into sales agreements with other broker-dealers to
sell the policies. These agreements provide for payment of
commissions of up to 7% of premiums for the Genesis I policy.
Currently, for the Genesis Flex policy, the first year commission
will be greater but in no event more than 37 1/2% of premiums
with 4.5% commission on renewal premiums. The agreements also
provide that applications for policies may be solicited by
registered representatives of the broker-dealers appointed by
Golden American to sell its variable life insurance and variable
annuities. These broker-dealers are registered with the SEC and
are members of the NASD. The registered representatives are
authorized under applicable state regulations to sell variable
life insurance and variable annuities. The offering of the
policies will be continuous.
SETTLEMENT PROVISIONS
You may elect to have the beneficiary receive the death proceeds
other than in one sum. If you make this election, you must do so
during the lifetime of the insured person(s). If you have not
made this election, the beneficiary may do so within one year
after we receive proof of the death of the insured person(s).
You may also take your cash surrender value in other than one
sum.
Plans 1, 2 and 3 are supported by our general account assets and
do not vary to reflect investment experience of the Account.
Plan 4 may be supported by a separate account in which case it
will vary with investment experience.
Our approval is needed for any plan where:
(1) the person named to receive payment is other than the owner
or beneficiary; or
(2) the person named is not a natural person, such as a
corporation; or
(3) any income payment would be less than $500.
You may select from these payment options:
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Option I: INCOME FOR A FIXED
PERIOD: Payments are
made in equal
installments for a
fixed number of
years.
Option II: LIFE INCOME WITH
PAYOUTS FOR A
DESIGNATED PERIOD:
Payments are made to
the person named in
equal monthly
installments and
guaranteed for at
least a period
certain. The period
certain can be 10 or
20 years. Other
periods certain are
available on request.
A refund certain may
be chosen instead.
Under this
arrangement, income
is guaranteed until
payments equal the
amount applied.
Option III: JOINT LIFE INCOME:
Payments are made in
monthly installments
as long as at least
one of two named
persons is living.
Payments end
completely when both
named persons die.
Option IV: ANNUITY PLAN: An
amount can be used to
purchase any single
premium annuity we
offer. We will issue
a written agreement
putting the plan into
effect.
PAYMENT WHEN NAMED PERSON DIES
When the person named to receive payment dies, we will pay any
amounts still due as provided by the plan agreement. The amounts
still due are determined as follows:
(1) For plans 1, 2, or any remaining guaranteed payments,
payments will be continued. Under plans 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 annual discount interest rate is 3.0% for
plan 1 and 3.50% for plan 2. We will, however, base the discount
interest rate on the interest rate used to calculate the payments
for plans 1 and 2 if such payments were not based on the tables
in the policy.
(2) For plan 3, no amounts are payable after both named persons
have died.
(3) For plan 4, the annuity agreement will state the amount due,
if any.
ADMINISTRATIVE INFORMATION ABOUT THE POLICY
VOTING PRIVILEGES
We invest the variable divisions' assets in shares of investment
portfolios. We are the legal owner of the shares held in the
variable account, and we have the right to vote on certain
issues. Among other things, we may vote on issues described in
the fund's current prospectus, or requiring a vote by
shareholders under the Investment Company Act of 1940.
Even though we own the shares, we give you the opportunity to
tell us how to vote the number of shares attributable to your
investment value. We vote the shares in accordance with your
instructions at meetings of investment portfolio shareholders.
We vote any portfolio shares that are not attributable to
policies, and any investment portfolio shares where the owner
does not give us instructions, the same way we vote where we did
receive owner instructions.
We reserve the right to vote investment portfolio shares without
getting instructions from policy owners if the federal securities
laws, regulations, or their interpretations change to allow this.
You may only instruct us on matters relating to the investment
portfolios corresponding to divisions where you have invested
assets as of the record date by the investment portfolio's Board
for the portfolio's shareholders meeting. We determine the
number of investment portfolio shares in each division that we
attribute to your policy by dividing your investment value
allocated to that division by the net asset value of one share of
the matching investment portfolio.
We count fractional shares. If you have a voting interest, we
send you proxy material and a form on which to give us your
voting instructions.
All investment portfolio shares have the right to one vote. The
votes of all investment portfolios are cast together on a
collective basis, except on issues where the interests of the
portfolios differ. In these cases, voting is done on a portfolio-
by-portfolio basis.
Examples of issues that require a portfolio-by-portfolio vote
are:
1. changes in the fundamental investment policy of a particular
investment portfolio, or
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2. approval of an investment advisory agreement.
MATERIAL CONFLICTS
We are required to track events to identify any material
conflicts from using investment portfolios for both variable life
and variable annuity separate accounts. The boards of the
investment portfolios, Golden American, and other insurance
companies participating in the investment portfolios, have this
same duty. There may be a material conflict if:
o state insurance law or federal income tax law changes;
o investment management of an investment portfolio changes; or
o voting instructions given by owners of variable life
insurance policies and variable annuity contracts differ.
The investment portfolios may sell shares to certain qualified
pension and retirement plans qualifying under Code Section 401.
These include cash or deferred arrangements under Code Section
401(k). Therefore, there is a possibility that a material
conflict may arise between the interests of owners in general, or
certain classes of owners, and these retirement plans or
participants in these retirement plans.
If there is a material conflict, we have the duty to determine
appropriate action, including removing the portfolios involved
from our variable investment options. We may take other action
to protect policy owners. This could mean delays or
interruptions of the variable operations.
When state insurance regulatory authorities require us, we may
ignore instructions relating to changes in an investment
portfolio's adviser or its investment policies. If we do ignore
voting instructions, we give you a summary of our actions in the
next semi-annual report to owners.
Under the Investment Company Act of 1940, we must get your
approval for certain actions involving our separate account. In
this case, you have one vote for every $100 of value you have in
the variable divisions. We cast votes credited to amounts in the
variable divisions not credited to policies in the same
proportion as votes cast by owners.
RIGHT TO CHANGE OPERATIONS
Subject to state limitations, we may from time to time make any
of the following changes to our separate account.
1. Change the investment objective.
2. Offer additional divisions which will invest in portfolios
we find appropriate for our policy.
3. Eliminate variable divisions.
4. Combine two or more variable divisions.
5. Substitute a new investment portfolio for a portfolio in
which the division currently invests. A substitution may
become necessary if, in our judgment:
o a portfolio no longer suits the purposes of your policy;
o there is a change in laws or regulations;
o there is a change in a portfolio's investment objectives
or restrictions;
o the portfolio is no longer available for investment; or
o another reason a substitution is appropriate.
6. Transfer assets related to your policy class to another
separate account.
7. Withdraw the separate account from registration under the
1940 Act.
8. Operate the separate account as a management investment
company under the 1940 Act.
9. Cause one or more divisions to invest in a mutual fund other
than, or in addition to, the investment portfolios.
10. Stop selling these policies.
11. End any employer or plan trustee agreement with us under
its terms.
12. Limit or eliminate any voting rights for the separate
account.
13. Combine our separate account with other accounts.
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14. Make any changes required by the 1940 Act, its rules or
regulations.
We will not make a change until it is effective with the SEC, and
approved by the appropriate state insurance departments, if
necessary. We notify you of changes. If you then wish to
transfer the amount you have in the affected division to another
variable division, or to the fixed account, you may do so free of
charge. Just notify us at our customer service center.
REPORTS TO OWNERS
At the end of each policy year we send a report to you that
shows:
o your total policy death benefit;
o your investment value;
o policy loans, if any, plus accrued interest;
o your cash surrender value;
o information about the variable divisions;
o your account transactions during the previous year showing
premiums, allocation changes, deductions, loans or
withdrawals.
We also send semi-annual reports with financial information on
the investment portfolios, including a list of the investment
holdings of each portfolio to you.
We send confirmation notices to you throughout the year for
certain policy transactions.
CHARGES, DEDUCTIONS AND REFUNDS
The amount of a charge may not exactly correspond to the cost
incurred by us with providing the service or benefits associated
with the particular policy. Many charges are not at "cost." For
example, the deferred loading may not fully cover all of the
sales and distribution expenses actually incurred by us and
proceeds from other charges, including the mortality and expense
risk charge or cost of insurance charges, may be used in part to
cover such expenses.
DEDUCTIONS FROM INVESTMENT VALUE
We deduct the charges described below from your investment value.
With respect to any investment value attributable to the Fixed
Account, we will deduct charges from each fixed allocation on a
pro rata basis, unless we specify otherwise.
SALES CHARGE
Deductions for Deferred Loading; Recovery of Deferred Loading.
Although the sales load is chargeable to each premium payment
when we receive it, we defer the loading, and deduct it in equal
installments on each policy anniversary over a six year period
following our receipt and acceptance of each premium payment.
This applies both to the initial and any additional premiums. The
deferred loading applicable to each premium payment is 6.0% (a
deduction of 1.0% of premium per year). We may lower or waive
this load with respect to later premium payments made in
connection with Genesis Flex.
If you surrender your policy, we will deduct the total amount of
any unrecovered deferred loading from the amount we pay you. We
also immediately recover a portion of the deferred loading
applicable to an excess partial withdrawal. Collection of a
portion of the deferred loading due to an excess partial
withdrawal may shorten the period of recovery, or the last
installment amount may be reduced. SEE PARTIAL WITHDRAWALS, PAGE
{ }.
As a result of the deferred loading structure, a positive net
rate of return will give a higher cash surrender value and a
negative net rate of return will give a lower cash surrender
value than would be the case had the deferred loading been
deducted from your premium.
The deferred loading covers the costs of distribution, preparing
our sales literature, promotional expenses, and other direct and
indirect expenses. The amount charged is not specifically
related to sales expenses in a particular year. We recover the
sales costs over the period all policies remain in effect. We
pay the sales expenses from our own resources including:
o the sales charge; and
o profit we may earn on other charges we deduct from your
policy.
We may reduce or waive the sales charge for certain group or
sponsored arrangements, or for corporate purchasers.
TAX CHARGES
Almost all states levy taxes on life insurance premium payments.
These premium taxes vary in
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amount from state to state from 0% to
3.5%, and may vary from jurisdiction to jurisdiction within a
state.
For Genesis I policies, we deduct a premium tax charge equal to
2.40% of premium. Currently, the premium tax charge is deferred
and will be deducted in equal annual installments over a six
year period (a deduction of 0.40% per year). If you surrender
your Genesis I policy, we will deduct the total amount of any
unrecovered deferred premium tax charge from the amount we pay
you. We reserve the right to change the amount of the premium
tax charge for future premium payments to conform to changes in
the average premium tax that we expect to pay.
For Genesis Flex policies, the amounts we deduct depend on the
state of residence of the insured person(s). These charges range
from 2.0% to 3.5% of each premium. We reserve the right to
change this percentage for future premium payments to conform
with changes in the law or if the insured(s) change(s) state of
residence. We deduct the charge from the investment value on the
first quarterly processing date following receipt and acceptance
of each premium payment. We deduct any charges for premium taxes
incurred but not yet deducted from the amount we pay you if you
surrender your policy. We return any premium taxes as part of the
refund if you cancel your policy during the free look period.
CORPORATE TAX CHARGE
We currently do not but reserve the right to assess a corporate
tax charge of up to 1.38% of premiums. The charge will be
deducted from the investment value in equal installments on each
policy anniversary over a six year period following receipt and
acceptance of each premium payment. If you surrender the policy,
we will deduct the total amount of any corporate tax charge not
yet deducted from the amount we pay you.
ISSUE CHARGES
Per Policy Charge
We charge $200 for policies written on a single life basis and
$300 for policies written on a survivorship basis. This charge
is incurred on the issue date and deducted from the investment
value on the first policy anniversary. We currently waive this
charge for the Genesis I policy.
Deferred Face Amount Charge
We assess a charge that is expressed per $1,000 of initial face
amount and of any increases in face amount. It will vary based
on the age and sex of the insured (the younger insured for
survivorship policies) and on whether you choose a Genesis I or
Genesis Flex policy. It will never exceed a maximum of $12 per
$1,000 of face amount. You incur this charge on the issue date
or effective date of any increase in face amount, and we deduct
it from the investment value in equal installments on each policy
anniversary over a six year period following the effective date
of such increase in face amount. We deduct the total amount of
any deferred face amount charge not yet deducted when determining
the cash surrender value payable if you surrender your policy.
Mortality Cost
We deduct the mortality cost from the investment value on each
quarterly processing date. We calculate it as follows:
(1) We determine the Death Benefit as of the beginning of the
processing period and adjust it with interest at the rate shown
in the policy to the middle of the processing period.
(2) We subtract from (1) the cash surrender value plus any debt
as of the beginning of the processing period, adjusted with
interest to the end of the processing period. (This is the net
amount at risk).
(3) We determine the current cost of insurance rate per $1,000
based on each insured's sex, issue age, years since the policy
date and underwriting class.
(4) We multiply the net amount at risk in (2) by (3) and then
divide this result by 1,000.
During the guarantee period, in no event will the mortality cost
be greater than the amount determined by substituting the tabular
value for the cash surrender value plus debt in (2) above and the
guaranteed maximum cost of insurance rate per $1,000 for the
current cost of insurance rate per $1,000 in (3) above. In
addition, the tabular value will be substituted for the Option II
death benefit adjustment in calculating the death benefit in (1)
above. SEE INSURANCE BENEFITS, POLICY GUARANTEES, PAGE { }.
Minimum Death Benefit Guarantee Charge
We deduct an amount per $1,000 of tabular net amount at risk. The
amount is based on the attained age of the insured (the younger
insured for survivorship policies). We deduct the charge from
the investment value on each quarterly processing date during the
guarantee period. The quarterly
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charge will never exceed $0.15
per $1,000 of face amount per quarter.
The guaranteed death benefit risks are related to potentially
unfavorable investment results. One risk is that the policy's
cash surrender value cannot cover the charges due during the
guarantee period. Another risk is that we may have to limit the
deduction for mortality cost.
Annual Administrative Charge
The annual administrative charge is incurred at the beginning of
each policy year and deducted from the investment value at the
end of each policy year on the policy anniversary. We deduct any
annual administrative charge incurred but not yet deducted from
the amount we pay you if the policy is surrendered. If the
investment value at the end of a policy anniversary equals or
exceeds $100,000 or the sum of the premiums paid equals or
exceeds $100,000, the charge is zero. Otherwise, the amount
deducted is $40 per policy year.
Loan Interest Charge
On each policy anniversary, we calculate the loan interest charge
and deduct it from the investment value. This charge is 5.0%
annually (accrued daily) of the outstanding loans. Between
policy Anniversaries, your cash surrender value will reflect the
accrued charge.
DAILY DEDUCTIONS FROM THE VARIABLE ACCOUNT
MORTALITY AND EXPENSE RISK CHARGE
We deduct a charge each day for the mortality and expense risks
we take on. This charge is 0.002477% per day of the amount you
have in the variable divisions. This is an annual rate of 0.90%.
The mortality risk we assume is that insured people as a group,
may live less time than we estimated. We assume an expense risk
that other expenses we have in issuing and administering the
policies, and in operating the variable divisions are greater
than the amount we estimated when we set these charges.
The mortality and expense risk charge does not apply to your
investment value which is invested in the fixed account or as
loan security in the general account.
Administrative Charge
We charge each division of Account A with a daily asset based
charge to cover a portion of the policy administration. The
daily charge is at a rate of 0.000276% (equivalent to an annual
rate of 0.10%) of the assets in each division. This charge is
designed to cover ongoing costs such as:
o premium billing and collections;
o claim processing;
o policy transactions;
o record keeping;
o reporting and communications with owners; and
o other expenses and overhead.
GUARANTEED ISSUE
We may offer policies on a guaranteed issue basis for certain
group or sponsored arrangements. When this happens, we issue
these policies up to a preset face amount with reduced evidence
of insurability requirements. Guaranteed issue policies may
carry a different mortality risk to us compared with policies
that are fully underwritten. So, we may charge different cost of
insurance rates for guaranteed issue policies. The cost of
insurance rates under these circumstances may depend on the:
o issue age of the insured people;
o size of the group; and
o total premium the group pays.
Generally, most guaranteed issued policies have higher overall
charges for insurance than a similar underwritten policy issued
in the standard non-tobacco user, or standard tobacco user class.
This means that an insured person in a group or sponsored
arrangement could get individually underwritten insurance
coverage at a lower overall cost.
CHARGES FOR ADDITIONAL BENEFITS
On each monthly processing date, we deduct the cost of additional
benefits under your riders.
CHANGES IN MONTHLY CHARGES
Changes we make in the cost of insurance charges or charges for
additional benefits are for a class of insured persons. We base
the new charge on changes in expectations about:
o investment earnings;
o mortality;
o the time policies remain in effect;
o expenses; and
o taxes.
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New monthly charges will never be more than the guaranteed
maximum rates shown in your policy.
POLICY TRANSACTION FEES
We also charge fees for certain transactions you may make in your
policy. We take transaction fees from the variable and the fixed
accounts in the same proportion that your investment value in
each division has to your net investment value immediately after
the transaction.
PARTIAL WITHDRAWAL
For our costs, we charge a service fee against your investment
value for each partial withdrawal you take after four partial
withdrawals in a policy year. The fee is $25. We may also
recover deferred sales charges from your investment value. SEE
PARTIAL WITHDRAWALS, PAGE { }.
ALLOCATION CHANGES
For our costs, there is a $25 fee for each additional allocation
change over twelve per policy year. If you include multiple
allocation changes in one request, it counts as one allocation
change. There is no fee if you are transferring your investment
value into the fixed account under the right to convert feature
in your policy. SEE ALLOCATION CHANGES, PAGE { }, AND RIGHT TO
CONVERT POLICY, PAGE { }.
FEES AND EXPENSES OF THE PORTFOLIOS
The variable account purchases shares of the investment
portfolios at net asset value. This price reflects investment
management fees and other direct expenses that are deducted from
the portfolio assets. The following table describes these
investment management fees and other direct expenses of the
investment portfolios.
[end two-column format]
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GCG TRUST PORTFOLIO ANNUAL EXPENSES (AS A PERCENTAGE OF PORTFOLIO AVERAGE
NET ASSETS)/1/
Total Annual Total Annual
Investment Operating Total Operating
Portfolio Management Other Expenses Waivers Expenses
--------- Fees/2/ Expenses Without and With Waivers
---------- /3/ Waivers and Reductions and
-------- Reductions ----------Reductions/4/
---------- ------------
Liquid Asset Series 0.59% 0.00% 0.59% -- 0.59%
Limited Maturity 0.60% 0.00% 0.60% -- 0.60%
Bond Series
Global Fixed Income 1.60% 0.05% 1.65% 0.05% 1.60%
Series
Total Return Series 0.94% 0.04% 0.98% 0.01% 0.97%
Equity Income Series 0.98% 0.00% 0.98% -- 0.98%
Fully Managed Series 0.98% 0.00% 0.98% -- 0.98%
Rising Dividends 0.98% 0.00% 0.98% -- 0.98%
Series
Growth & Income 1.08% 0.00% 1.08% -- 1.08%
Series
Growth Series 1.08% 0.01% 1.09% -- 1.09%
Value Equity Series 0.98% 0.00% 0.98% -- 0.98%
Research Series 0.94% 0.00% 0.94% -- 0.94%
Mid-Cap Growth 0.94% 0.01% 0.95% -- 0.95%
Series
All-Growth Series 0.98% 0.01% 0.99% -- 0.99%
Growth Opportunities 1.10% 0.05% 1.15% -- 1.15%
Series
Strategic Equity 0.98% 0.01% 0.99% -- 0.99%
Series
Capital Appreciation 0.98% 0.00% 0.98% -- 0.98%
Series
Small Cap Series 0.98% 0.01% 0.99% -- 0.99%
Real Estate Series 0.98% 0.01% 0.99% -- 0.99%
Hard Assets Series 0.98% 0.02% 1.00% -- 1.00%
Managed Global 1.25% 0.01% 1.26% -- 1.26%
Series
Developing World 1.75% 0.08% 1.83% -- 1.83%
Series
Emerging Markets 1.75% 0.08% 1.83% -- 1.83%
Series
_______________________________
/1/ These portfolio expenses are not direct charges against
division assets or reductions from contract values. Rather, we
factor these portfolio expenses when computing each underlying
portfolio's net asset value. We use the share price to calculate
the unit values of the divisions. For a more complete
description of the portfolios' costs and expenses, see the GCG
Trust Prospectus.
/2/ Fees decline as combined assets increase. See the prospectus
for the GCG Trust for more information.
/3/ 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 annualized.
/4/ 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 Research portfolio and 1.74% for
the Global Fixed Income portfolio. This agreement will remain in
place through December 31, 1999.
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PIMCO VARIABLE INSURANCE TRUST PORTFOLIO ANNUAL EXPENSES (AS A
PERCENTAGE OF PORTFOLIO AVERAGE NET ASSETS)/1/
Total Annual Total Annual
Investment Operating Total Operating
Portfolio Management Other Expenses Waivers Expenses
--------- Fees Expenses Without and With Waivers
--------- -------- Waivers and Reductions and
Reductions /2/ Reductions/2/
---------- --------- ------------
PIMCO High Yield 0.50% 0.25%/3/ 0.81% 0.06% 0.75%
Bond Portfolio
PIMCO StocksPLUS 0.40% 0.25% 0.72% 0.07% 0.65%
Growth and Income
Portfolio
_______________________________
/1/ The investment portfolios provided this portfolio expense
information. We have not independently verified this
information. These portfolio expenses are not direct charges
against division assets or reductions from contract values.
Rather, we factor these portfolio expenses when computing each
underlying portfolio's net asset value. We use the share price
to calculate the unit values of the divisions. For a more
complete description of the portfolios' costs and expenses, see
the PIMCO Prospectus.
/2/ 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.
/3/ 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.
[two-column format]
GROUP OR SPONSORED ARRANGEMENTS OR CORPORATE PURCHASERS
Individuals, corporations or other institutions may purchase this
policy. For group or sponsored arrangements (including our home
office employees), corporate purchases, or special exchange
programs which we may offer from time to time, we may reduce or
waive the:
o administrative charge;
o deferred loading;
o minimum initial premium;
o minimum additional premium; or
o other charges normally assessed.
We can reduce or waive these items due to expected economies
under a group or sponsored arrangement or with a corporate
purchaser. Group arrangements include those in which there is a
trustee, an employer, or an association. The group either
purchases policies covering a group of individuals on a group
basis, or endorses a policy to a group of individuals. Sponsored
arrangements include those where an employer or association
allows us to offer policies to its employees or members on an
individual basis. Group or sponsored arrangements that have been
set up solely to buy policies or that have been in existence less
than six months will not qualify for reduced charges.
Our sales, administration and mortality costs generally vary with
the size and stability of the group, among other factors. We
take all these factors into account when we reduce charges. A
group or sponsored arrangement must meet certain requirements to
qualify for reduced charges. We make reductions to charges based
on our rules in effect when we approve a policy application form.
We may change these rules from time to time.
Sponsored arrangement corporations may have different group
premium payments and premium requirements.
We will not be unfairly discriminatory in any variation in the
deferred sales charge, administrative charge, or other charges,
fees and privileges. These variations are based on differences in
costs or services.
OTHER CHARGES
Under current law, we pay no tax on investment income and capital
gains included in variable life insurance policy reserves. This
means that no charge is currently made to any variable division
for our federal income taxes. If the tax law changes and we have
federal income tax chargeable to the variable divisions, we may
make such a charge in the future.
In several states, we must pay state and local taxes, in addition
to any premium taxes which apply. Currently, these taxes are not
large. However, if
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these taxes increase, we may charge for such
taxes when they are chargeable to our variable divisions .
TAX CONSIDERATIONS
GENESIS FLEX AND GENESIS I
We designed the Genesis Flex policy to comply with the Life
Insurance Premium Payment Test under Federal tax law. As a
result, you generally should not be taxed on any loans you
receive under a Genesis Flex policy. The Genesis I policy will
not comply with the Life Insurance Premium Payment Test and thus
will be a "modified endowment contract" under Federal tax law.
Loans, partial withdrawals and surrenders under a Genesis I
policy may be taxable in whole or in part and may also be subject
to a 10% penalty tax.
The following summary provides a general description of the
federal income tax considerations associated with the policy and
does not purport to be complete or to cover all tax situations.
This discussion is not intended as tax advice. Counsel or other
competent tax advisers should be consulted for more complete
information. This discussion is based upon our understanding of
the present federal income tax laws . No representation is made
as to the likelihood of continuation of the present federal
income tax laws or as to how they may be interpreted by the
Internal Revenue Service.
TAX STATUS OF THE POLICY
The Genesis Flex and Genesis I policies were designed to qualify
as a life insurance contracts under the Internal Revenue Code.
All terms and provisions of the policies shall be construed in a
manner which is consistent with that design.
In order to qualify as a life insurance contract for federal
income tax purposes and to receive the tax treatment normally
accorded life insurance contracts under federal tax law, a policy
must satisfy certain requirements which are set forth in the
Internal Revenue Code. We believe all our policies satisfy the
applicable requirements. However, there is very little guidance,
with respect to policies issued on a substandard basis and
policies issued on a survivorship basis. If it is subsequently
determined that a policy does not satisfy the applicable
requirements, we may take appropriate steps to bring the policy
into compliance with such requirements and we reserve the right
to restrict policy transactions in order to do so.
DIVERSIFICATION REQUIREMENTS
In addition to meeting the Code Section 7702 tests, Code Section
817(h) requires separate account investments, such as our
variable account, to be "adequately diversified." The Treasury
has issued regulations which set the standards for measuring the
adequacy of any diversification. To be adequately diversified,
each variable division must meet certain tests. If your variable
life policy is not adequately diversified under these
regulations, it is not treated as life insurance under Code
Section 7702. You would then be subject to federal income tax on
your policy income as you earn it. Our variable divisions'
investment portfolios have promised they will meet the
diversification standards that apply to your policy.
In certain circumstances, you, as owner of a variable life
insurance contract, may be considered the owner for federal
income tax purposes of the separate account assets used to
support your contract. Any income and gains from the separate
account assets are includable in the gross income from your
policy under these circumstances. The IRS has stated in
published rulings that a variable contract owner is considered
the owner of separate account assets if the contract owner has
"indicia of ownership" in those assets. "Indicia of ownership"
includes the ability to exercise investment control over the
assets.
Your ownership rights under your policy are similar to, but
different in some ways from those described by the IRS in rulings
in which it determined that policy owners are not owners of
separate account assets. For example, you have flexibility in
allocating your premium payments and in your policy values.
These differences could result in the IRS treating you as the
owner of a pro rata share of the variable account assets. We do
not know what standards will be set forth in the future, if any,
in the Treasury's regulations or rulings that it expects to
issue. We reserve the right to modify your policy, as necessary,
to try to prevent you from being considered the owner of a pro
rata share of the variable account assets, or to otherwise
qualify your policy for favorable tax treatment.
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The following discussion assumes that the policy will qualify as
a life insurance contract for federal income tax purposes.
TAX TREATMENT OF POLICY BENEFITS
We believe that the death benefit under a policy is generally
excludable from the gross income of the beneficiary. However,
there are exceptions to this general rule. Federal, state and
local transfer, estate inheritance, and other tax consequences of
ownership or receipt of policy proceeds depend on the
circumstances of each policy owner or beneficiary. A tax adviser
should be consulted on these consequences.
Generally, the policy owner will not be taxed on any of the
policy cash value until there is a distribution. When
distributions from a policy occur, or when loans are taken out
from or secured by a policy, the tax consequences depend on
whether the policy is a "Modified Endowment Contract."
Special rules may apply if you are subject to the alternative
minimum tax. You should consult a tax adviser if you are subject
to the alternative minimum tax.
MODIFIED ENDOWMENT CONTRACTS
Under the Internal Revenue Code, certain life insurance contracts
are classified as "modified endowment contracts," with less
favorable tax treatment than other life insurance contracts. Due
to the flexibility of the policies at to premiums and benefits,
the individual circumstances of each policy will determine
whether it is classified as a modified endowment contract. The
rules are too complex to be summarized here, but generally depend
on the amount of premiums paid during the first seven policy
years. Certain changes in a policy after it is issued could also
cause it to be classified as a modified endowment contract. A
current or prospective policy owner should consult with a
competent advisor to determine whether a policy transaction will
cause the policy to be classified as a modified endowment
contract.
MULTIPLE POLICIES
All modified endowment contracts that are issued by us (or our
affiliates) to the same policy owner during any calendar year are
treated as one modified endowment contract for purposes of
determining the amount includable in the policy owner's income
when a taxable distribution occurs.
DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM MODIFIED ENDOWMENT
CONTRACTS
Once a policy is classified as a modified endowment contract, the
following tax rules apply both prospectively and to any
distributions made in the prior two years:
1. All distributions other than death benefits, including
distributions upon surrender and withdrawals, from a
modified endowment contact will be treated first as
distributions of gain taxable as ordinary income and as tax-
free recovery of the policy owner's investment in the policy
only after all gain has been distributed.
2. Loans taken from or secured by a policy classified as a
modified endowment contract are treated as distributions and
taxed accordingly.
3. A 10% additional income tax may be imposed on the amount
subject to tax. Consult a tax adviser to determine whether
you may be subject to this penalty tax.
DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM POLICIES THAT ARE
NOT MODIFIED ENDOWMENT CONTRACTS
Distributions other than death benefits from a policy that is not
classified as a modified endowment contract are generally treated
first as a recovery of the policy owner's investment in the
policy and only after the recovery of all investment in the
policy as taxable income. However, certain distributions which
must be made in order to enable the policy to continue to qualify
as a life insurance contract for federal income tax purposes if
policy benefits are reduced during the first fifteen policy years
may be treated in whole or in part as ordinary income subject to
tax.
Loans from or secured by a policy that is not a modified
endowment contract are generally
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not treated as distributions.
However, the tax consequences of Preferred Loans are uncertain.
Finally, neither distributions from nor loans from or secured by
a policy that is not a modified endowment contract are subject to
the 10% additional income tax.
INVESTMENT IN THE POLICY
Your investment in the policy is generally your aggregate
premiums. When a distribution is taken from the policy, your
investment in the policy is reduced by the amount of the
distribution that is tax free.
POLICY LOANS
In general, interest on a policy loan will not be deductible.
Before taking out a policy loan, you should consult a tax adviser
as to the tax consequences.
SECTION 1035 EXCHANGES
Code Section 1035 generally provides that no gain or loss shall
be recognized on the exchange of one life insurance policy for
another life insurance policy, or for an endowment or annuity
contract. We accept 1035 exchanges with outstanding loans.
Special rules and procedures apply to Section 1035 transactions.
If you wish to take advantage of Section 1035, you should consult
your tax adviser.
TAX-EXEMPT POLICY OWNERS
Special rules may apply where a policy is owned by a tax-exempt
entity. Tax-exempt entities should consult their tax adviser
regarding the consequences of purchasing and owning a policy.
These consequences could include an effect on the tax-exempt
status of the entity and the possibility of the unrelated
business income tax.
CHANGES TO COMPLY WITH THE LAW
So that your policy continues to qualify as life insurance under
the Code, we reserve the right to refuse to accept all or part of
your premium payments, or to change your death benefit. We may
refuse to allow you to make partial withdrawals that would cause
your policy to fail to qualify as life insurance. We also may:
o make changes to your policy or its riders;
o require you to make additional premium payments; or
o make distributions from your policy to the degree that we
deem necessary to qualify your policy as life insurance for
tax purposes.
If we make any change of this type, it applies the same to all
affected policies. We will give you advance notice of this
change.
The tax law limits the amount we can charge for mortality costs
and other expenses used to calculate whether your policy
qualifies as life insurance for federal income tax purposes. We
must base these calculations on reasonable mortality charges and
other charges reasonably expected to be paid. The Treasury
issued proposed regulations on what it considers reasonable for
mortality charges. We believe that the charges used for your
policy should meet the Treasury's current requirement for
"reasonableness." We reserve the right to make changes to the
mortality charges if future regulations have standards which make
changes necessary in order to continue to qualify your policy as
life insurance for federal income tax purposes.
Additionally, assuming that you do not want your policy to be or
to become a Modified Endowment Contract, we include a policy
endorsement under which we have the right to amend your policy,
including riders. We do this to make sure that your policy
continues to meet the seven-pay test for federal income tax
purposes. If the policy premium you pay is more than the seven-
pay limit, we have the right to remove any excess premium or to
make any appropriate adjustments to your policy's investment
value and death benefit.
Any increase in your death benefit will cause an increase in your
cost of insurance charges.
OTHER
Policy owners may use our policies in various arrangements,
including:
o qualified plans;
o non-qualified deferred compensation or salary continuance
plans;
o split dollar insurance plans;
o executive bonus plans;
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o retiree medical benefit plans; and
o other plans.
The tax consequences of these plans may vary depending on the
particular facts and circumstances of each arrangement. So, if
you want to use any of our policy in this type of arrangement,
you should consult a qualified tax adviser regarding the tax
issues of your particular arrangement.
In recent years, Congress has adopted new rules relating to life
insurance owned by businesses. Any business contemplating the
purchase of a new policy or a change in an existing policy should
consult a tax advisor.
The favorable tax treatment of Section 101(a) will not apply to
benefits paid at maturity of the policy (Attained Age 100).
The IRS requires us to withhold income taxes from any portion of
the amounts individuals receive in a taxable transaction. We do
not withhold income taxes if you elect in writing not to have
withholding apply. If the amount withheld for you is
insufficient to cover income taxes, you may have to pay income
taxes and possibly penalties later.
Depending on your particular jurisdiction and the circumstances
of you and your beneficiary, tax consequences of ownership or
receipt of your policy benefits will vary. These taxes include
federal estate and gift taxes, and state and local inheritance
taxes.
If a trustee under a pension or profit-sharing plan, or similar
deferred compensation arrangement, owns a policy, the federal,
state and estate tax consequences could differ. The amounts of
life insurance that may be purchased on behalf of a participant
in a pension or profit-sharing plan are limited. The current
cost of insurance for the net amount at risk is treated as a
"current fringe benefit" and must be included annually in the
plan participant's gross income. We report this cost (generally
referred to as the "P.S. 58" cost) to the plan annually. If a
policy is distributed to you from the plan, the cash value is
immediately taxable to the extent it exceeds your basis. If the
plan participant dies while covered by the plan and the policy
proceeds are paid to the participant's beneficiary, then the
excess of the death benefit over the cash value is not taxable.
However, the balance of the proceeds will generally be taxable to
the extent it exceeds the participant's cost basis in the policy.
Policies owned under these types of plans may be subject to
restrictions under the Employee Retirement Income Security Act of
1974 ("ERISA"). You should consult a qualified adviser regarding
ERISA.
POSSIBLE TAX LAW CHANGES
Although the likelihood of legislative changes is uncertain,
there is always the possibility that the tax treatment of the
policy could change by legislation or otherwise. Consult a tax
adviser with respect to legislative developments and their effect
on the policy.
OUR INCOME TAXES
Under current law we pay no tax on investment income and capital
gains reflected in variable life insurance policy reserves
(except to the extent the federal deferred acquisition cost may
be considered such a tax). Consequently, no charge is currently
being made to any division of our variable account for our
federal income taxes. We reserve the right, however, to make
such a charge in the future if the tax law changes and we incur
federal income tax which is attributable to the variable account.
We must pay state and local taxes (in addition to applicable
taxes based on premiums) in several states. At the present time,
these taxes are not substantial. However, if these taxes
increase, we reserve the right to charge for such taxes when they
are attributable to our variable account.
YOU SHOULD CONSULT QUALIFIED LEGAL OR TAX ADVISERS FOR COMPLETE
INFORMATION ON FEDERAL, STATE, LOCAL, AND OTHER TAX
CONSIDERATIONS.
ILLUSTRATIONS
The following tables are intended to show how the policy works.
This includes how benefits and values can vary over a long period
of time. Each table also compares these values with total
premiums paid with interest. The policies illustrated include:
39
<PAGE>
<PAGE>
[following table in not in two-column format]
<TABLE>
<CAPTION>
Stated
Tobacco User Type of Basis of Death Initial
Gender Age Status Policy Policy Benefit Premium
------ --- ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
Male 30 Non-tobacco Genesis I Single $507,639 $100,000
User
Male 55 Non-tobacco Genesis Flex Single $181,432 $10,000
User
Male 45 Non-tobacco Genesis Flex Survivorship $258,618 $10,000
User
</TABLE>
The tables show how death benefits, investment values, and cash
surrender values of a hypothetical policy could vary over an
extended period of time, assuming the variable divisions had
constant hypothetical gross annual investment returns of 0%, 6%,
or 12% over the periods indicated in each table. The amounts
shown would differ if we had used female or unisex rates.
Values would differ from those in the tables if the annual
investment returns were not constant.
These illustrations assume there are no policy loans, and that no
premium has been allocated to the fixed account.
The third column of each table shows what would happen if an
amount equal to the assumed premiums were invested to earned
interest after taxes, of 5% compounded annually.
We illustrate premium payments as if they were made at the
beginning of the year.
The difference between the investment value and the cash
surrender value in the first six years of the policy shows the
effect of the deferred sales charge.
The tables show the net investment return on your policy is lower
than the gross investment return on the variable divisions. We
show this effect in the amounts for death benefits, investment
values and cash surrender values. This effect is due to
deductions from premiums, the mortality and expense risk charge,
monthly deductions, cost of insurance rider charges, and deferred
sales charges. The tables show charges at the maximum rates we
guarantee in our policies.
The tables also reflect the effect on each division's investment
performance of the portfolio charge for management and portfolio
expenses.
The tables reflect annual management fees of 1.015% of the
portfolios' aggregate average daily net assets. This
hypothetical rate is a simple average of the investment advisory
fee applying to the investment portfolios for the years ending
December 31, 1998. We assume other portfolio expenses at the
rate of 0.035% of the portfolios' average daily net assets. This
is an average of all the portfolios' other expenses for the year
ending December 31, 1998. These total 1.05%. Actual fees vary
by portfolio. The sponsor may have agreements to waive or
otherwise pay each investment division for operating expenses
which are greater than certain limits. The table's values assume
that the current expense reimbursement arrangements will
continue. However, they may not.
The effect of these charges and expenses, and mortality and
expense risk charges result in a net rate of return of:
o (2.04)% on a 0% gross rate of return;
o 3.90% on a 6% gross rate of return; and
o 9.84% on a 12% gross rate of return
The tables assume that charges have been deducted. This includes
administrative and sales charges. The tables show that we do not
currently charge against the variable account for state or
federal taxes. If we charge for the taxes in the future, it will
take a higher gross rate of return than the rates shown to
produce the same death benefits, account values, and cash
surrender values.
If we are asked to do so, we will give a comparable personal
illustration based on:
o the insured person's age and gender;
o the insured person's underwriting classification;
o initial face amount; and
o premiums consistent with your policy form.
At issue, we deliver an individualized illustration showing the
premium you chose and the insured person's actual risk class.
After we issue the policy, if you ask us to, we will give you an
illustration of future policy benefits. We base these
hypothetical future benefits on both guaranteed and current cost
factor assumptions and actual account value.
[end two-column format]
40
<PAGE>
<PAGE>
TABLE 1: SINGLE LIFE GENESIS I POLICY
MALE ISSUE AGE: 30, NON-SMOKER GUARANTEE PERIOD AT ISSUE: LIFE
INITIAL PREMIUM: $100,000 FACE AMOUNT: $507,639
GUARANTEED MAXIMUM MORTALITY COSTS
TOTAL PREMIUMS END OF YEAR
PAID PLUS DEATH BENEFIT(2)
INTEREST AT 5% AS OF ASSUMING HYPOTHETICAL GROSS
POLICY YEAR PAYMENTS(1) END OF YEAR ANNUAL INVESTMENT RETURN OF
0% 6% 12%
- ------------------------------------------------------------------------------
1 $100,000 $105,000 $507,639 $507,639 $515,695
2 110,250 507,639 507,639 538,108
3 115,763 507,639 507,639 561,993
4 121,551 507,639 507,639 587,440
5 127,628 507,639 507,639 614,529
6 134,010 507,639 507,639 643,345
7 140,710 507,639 507,639 678,262
8 147,746 507,639 507,639 715,185
9 155,133 507,639 507,639 754,226
10 162,889 507,639 507,639 795,502
15 207,893 507,639 507,639 1,040,044
20 265,330 507,639 507,639 1,362,498
30 432,194 507,639 507,639 2,346,857
41
<PAGE>
<PAGE>
END OF YEAR END OF YEAR
INVESTMENT VALUE (2) CASH SURRENDER VALUE(2)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY YEAR 0% 6% 12% 0% 6% 12%
- ------------------------------------------------------------------------------
1 $ 93,433 $ 99,243 $105,044 $ 88,095$ 93,905 $ 99,706
2 89,567 101,134 113,354 85,297 96,863 109,083
3 85,774 103,091 122,445 82,571 99,888 119,242
4 82,043 105,111 132,385 79,908 102,975 130,250
5 78,371 107,191 143,251 77,304 106,123 142,183
6 74,750 109,328 155,121 74,750 109,328 155,121
7 72,246 112,591 169,156 72,246 112,591 169,156
8 69,759 115,947 184,475 69,759 115,947 184,475
9 67,287 119,396 201,191 67,287 119,396 201,191
10 64,822 122,936 219,423 64,822 122,936 219,423
15 52,479 141,988 338,353 52,479 141,988 338,353
20 39,743 163,226 520,383 39,743 163,226 520,383
30 9,818 210,063 1,208,126 9,818 210,063 1,208,126
(1) All payments are illustrated as if made at the beginning of the Policy Year.
(2) Assumes no policy loan or partial withdrawal has been made.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF
RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN
OWNER AND THE INVESTMENT EXPERIENCE OF THE SERIES OF THE TRUST. THE DEATH
BENEFIT, INVESTMENT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL RATES OF RETURN AVERAGED
0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE
AVERAGES FOR INDIVIDUAL POLICY YEARS. THEY WOULD ALSO BE DIFFERENT IF ANY
POLICY LOANS OR PARTIAL WITHDRAWALS WERE MADE. NO REPRESENTATIONS CAN BE MADE
BY GOLDEN AMERICAN LIFE INSURANCE COMPANY OR ACCOUNT A OR THE TRUSTS THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
A PERIOD OF TIME.
42
<PAGE>
<PAGE>
TABLE 2: SINGLE LIFE GENESIS FLEX POLICY
MALE ISSUE AGE: 55, NON-SMOKER GUARANTEE PERIOD AT ISSUE: 6.50 YEARS(1)
INITIAL PREMIUM: $10,000 FACE AMOUNT: $181,432
GUARANTEED MAXIMUM MORTALITY COSTS
TOTAL PREMIUMS END OF YEAR
PAID PLUS DEATH BENEFIT(2)
INTEREST AT 5% AS OF ASSUMING HYPOTHETICAL GROSS
POLICY YEAR PAYMENTS(1) END OF YEAR ANNUAL INVESTMENT RETURN OF
0% 6% 12%
- ------------------------------------------------------------------------------
1 $10,000 $ 10,500 $181,432 $181,432 $181,432
2 10,000 21,525 181,432 181,432 181,432
3 10,000 33,101 181,432 181,432 181,432
4 10,000 45,256 181,432 181,432 181,432
5 10,000 58,019 181,432 181,432 181,432
6 10,000 71,420 181,432 181,432 181,432
7 10,000 85,491 181,432 181,432 181,432
8 10,000 100,266 181,432 181,432 181,432
9 10,000 115,779 181,432 181,432 199,357
10 (age 65) 10,000 132,068 181,432 181,432 227,309
15 168,556 181,432 181,432 295,069
20 215,125 181,432 181,432 387,377
30 (age 85) 350,415 181,432 181,432 669,410
43
<PAGE>
<PAGE>
END OF YEAR END OF YEAR
INVESTMENT VALUE (2) CASH SURRENDER VALUE(2)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY YEAR 0% 6% 12% 0% 6% 12%
- ------------------------------------------------------------------------------
1 $ 7,552 $ 8,103 $ 8,655 $ 6,184 $ 6,735 $ 7,287
2 14,990 16,560 18,198 13,395 14,966 16,604
3 22,125 25,195 28,527 20,404 23,475 26,807
4 28,973 34,025 39,730 27,226 32,278 37,983
5 35,547 43,064 51,904 33,874 41,390 50,230
6 41,864 52,331 65,176 40,364 50,831 63,676
7 48,217 62,125 79,968 46,717 60,625 78,468
8 54,449 72,310 96,299 52,949 70,810 94,799
9 60,587 82,925 114,236 59,087 81,425 112,736
10 (age 65) 66,745 94,101 133,594 65,245 92,601 132,094
15 49,702 101,884 195,020 49,702 101,884 195,020
20 32,727 109,517 283,140 32,727 109,517 283,140
30 (age 85) 0 116,568 566,064 0 116,568 566,064
(1) If all planned premiums are paid as illustrated the Guarantee Period after
the last payment will be for life.
(2) All payments are illustrated as if made at the beginning of the Policy Year.
(3) Assumes no policy loan or partial withdrawal has been made.
(4) Guarantee Period applies.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF
RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN
OWNER AND THE INVESTMENT EXPERIENCE OF THE SERIES OF THE TRUST. THE DEATH
BENEFIT, INVESTMENT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL RATES OF RETURN AVERAGED
0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE
AVERAGES FOR INDIVIDUAL POLICY YEARS. THEY WOULD ALSO BE DIFFERENT IF ANY
POLICY LOANS OR PARTIAL WITHDRAWALS WERE MADE. NO REPRESENTATIONS CAN BE MADE
BY GOLDEN AMERICAN LIFE INSURANCE COMPANY OR ACCOUNT A OR THE TRUSTS THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
A PERIOD OF TIME.
44
<PAGE>
<PAGE>
TABLE 3: JOINT AND LAST SURVIVOR GENESIS FLEX POLICY
MALE ISSUE AGE: 55, NON-SMOKER FEMALE ISSUE AGE: 55, NON-SMOKER
INITIAL PREMIUM: $10,000 FACE AMOUNT: $258,618
GUARANTEE PERIOD AT ISSUE: 18.00 YEARS(1)
GUARANTEED MAXIMUM MORTALITY COSTS
TOTAL PREMIUMS END OF YEAR
PAID PLUS DEATH BENEFIT(2)
INTEREST AT 5% AS OF ASSUMING HYPOTHETICAL GROSS
POLICY YEAR PAYMENTS(1) END OF YEAR ANNUAL INVESTMENT RETURN OF
0% 6% 12%
- ------------------------------------------------------------------------------
1 $10,000 $ 10,500 $258,618 $258,618 $258,618
2 10,000 21,525 258,618 258,618 258,618
3 10,000 33,101 258,618 258,618 258,618
4 10,000 45,256 258,618 258,618 258,618
5 10,000 58,019 258,618 258,618 258,618
6 10,000 71,420 258,618 258,618 258,618
7 10,000 85,491 258,618 258,618 258,618
8 10,000 100,266 258,618 258,618 258,618
9 10,000 115,779 258,618 258,618 288,628
10 (age 65) 10,000 132,068 258,618 258,618 423,066
20 10,000 215,125 258,618 258,618 554,848
30 (age 85) 350,415 258,618 258,618 957,659
45
<PAGE>
<PAGE>
END OF YEAR END OF YEAR
INVESTMENT VALUE (2) CASH SURRENDER VALUE(2)
ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
POLICY YEAR 0% 6% 12% 0% 6% 12%
- ------------------------------------------------------------------------------
1 $ 8,752 $ 9,332 $ 9,912 $ 7,444 $ 8,024 $ 8,604
2 17,500 19,201 20,972 15,953 17,655 19,425
3 25,940 29,325 32,989 24,255 27,640 31,304
4 34,075 39,711 46,056 32,352 37,988 44,332
5 41,910 50,367 60,272 40,248 48,705 58,610
6 49,447 61,299 75,750 47,947 59,799 74,250
7 56,950 72,777 92,875 55,450 71,277 91,375
8 64,256 84,657 111,729 62,756 83,157 110,229
9 71,365 96,951 132,360 69,865 95,451 130,860
10 (age 65) 78,358 109,753 154,889 76,858 108,253 153,389
15 65,429 126,882 239,026 65,429 126,882 239,026
20 51,721 145,350 365,414 51,721 145,350 365,414
30 (age 85) 9,848 171,724 786,708 9,848 171,724 786,708
(1) If all planned premiums are paid as illustrated the Guarantee Period after
the last payment will be for life.
(2) All payments are illustrated as if made at the beginning of the Policy Year.
(3) Assumes no policy loan or partial withdrawal has been made.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF
RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN
OWNER AND THE INVESTMENT EXPERIENCE OF THE SERIES OF THE TRUST. THE DEATH
BENEFIT, INVESTMENT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL RATES OF RETURN AVERAGED
0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE
AVERAGES FOR INDIVIDUAL POLICY YEARS. THEY WOULD ALSO BE DIFFERENT IF ANY
POLICY LOANS OR PARTIAL WITHDRAWALS WERE MADE. NO REPRESENTATIONS CAN BE MADE
BY GOLDEN AMERICAN LIFE INSURANCE COMPANY OR ACCOUNT A OR THE TRUSTS THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
A PERIOD OF TIME.
46
<PAGE>
<PAGE>
[two-column format]
ADDITIONAL INFORMATION
DIRECTORS AND OFFICERS
Name, Age and Address* Position and Offices with
Golden American
- ---------------------- -------------------------
Barnet Chernow (49) President and Director
Myles R. Tashman (56) Director, Executive Vice
President, General
Counsel and Secretary
R. Brock Armstrong (52) Director and Chairman of
5780 Powers Ferry Rd., NW the Board of Directors
Atlanta, GA 30327
Michael W. Cunningham (50) Director
5780 Powers Ferry Rd., NW
Atlanta, GA 30327
Linda B. Emory (60) Director
5780 Powers Ferry Rd., NW
Atlanta, GA 30327
Phillip R. Lowery (46) Director
5780 Powers Ferry Rd., NW
Atlanta, GA 30327
James R. McInnis (51) Executive Vice President
Stephen J. Preston (41) Executive Vice President
and Chief Actuary
E. Robert Koster (40) Senior Vice President and
Chief Financial
Officer
Patricia M. Corbett (34) Treasurer
909 Locust Avenue
Des Moines, IA 50309
David L. Jacobson (49) Senior Vice President
and Assistant Secretary
William B. Lowe (34) Senior Vice President
909 Locust Avenue
Des Moines, IA 50309
Ronald R. Blasdell (45) Senior Vice Presidnet
Steven G. Mandel (39) Senior Vice President
__________________
* Except as noted, all directors and officers are located at
Golden American's office at 1475 Dunwoody Drive, West Chester, PA
19380
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
affiliates of Golden American. 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 of Golden American Life and
of First Golden American Life Insurance Company of New York
("First Golden") in April, 1998. From 1993 to 1998, Mr. Chernow
served as Executive Vice President of Golden American. From 1996
to 1998, Mr. Chernow also served as Executive Vice President of
First Golden. He was elected to serve as a Director of Golden in
April of 1998 and First Golden in June, 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 has
also served as a Director, Executive Vice President, General
Counsel and Secretary to First Golden since June, 1996. He was
elected to serve as a director of Golden American in January,
1998.
Mr. R. Brock Armstrong was elected to serve as a Director and
Chairman of the Board of Directors in April, 1999. He was
elected to serve as a Director of First Golden, in December 1998,
a Director and President of Equitable Life Insurance Company of
Iowa in April, 1999. He became a Group Executive of ING Group in
October 1998. Prior to October 1998, Mr. Armstrong was Senior
Vice President, The Prudential Insurance Company of America, from
April 1997 to October 1998; Executive Vice President, London
Insurance Group, From August 1994 to April 1997; President and
Chief Financial Officer of Security First Group, From August 1991
to August 1994.
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.
Ms. Linda B. Emory became a Director of Golden American in April
1999. Since September 1995, she has served as a Director for Life
Insurance Company of Georgia, Southland Life Insurance Company,
Security Life of Denver, Midwestern United Life Insurance
Company, First ING of New York and Columbine Insurance Company.
Also, she is an Executive Vice President of ING North America
Insurance Corporation.
47
<PAGE>
<PAGE>
Mr. Phillip R. Lowery became a Director of Golden American in
April, 1999. Presently, he is Executive Vice President and Chief
Actuary for ING FSI North America a position he has held since
1990.
Mr. James R. McInnis joined Golden American in December, 1997 as
Executive Vice President. From 1982 through November, 1997, he
was with the Endeavor Group and held various offices, including
President at the time of 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 B. 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. Prior to joining Equitable Life, he was
an Associate Vice President of
Lincoln Benefit Life from July 1990 through December 1993.
Mr. Steven G. Mandel joined Golden American in October 1988 and
became a Senior Vice President in June 1998.
Mr. Ronald R. Blasdell joined Golden American in February 1994
and became a Senior Vice President in June 1998. Prior to
joining Golden American, he was with United Pacific Life
Insurance Company,
from November 1988 to November 1993.
REINSURANCE
Golden American reinsures all or a portion of the mortality risks
under the policies with one or more appropriately licensed
insurance companies.
ADDITIONAL INFORMATION
Additional information may be obtained from our customer service
center, the address and telephone number of which are on the
cover of this prospectus.
STATE REGULATION
We are regulated and supervised by the Insurance Department of
the State of Delaware, which periodically examines our financial
condition and operations. In addition, we are subject to the
insurance laws and regulations in every jurisdiction in which we
do business. As a result, the provisions of these policies may
vary somewhat from jurisdiction to jurisdiction.
We are required to submit annual statements, including financial
statements, of our operations and finances to the insurance
departments of the various jurisdictions in which we do business
to determine solvency and compliance with state insurance laws
and regulations.
We are also subject to various federal securities laws and
regulations.
LEGAL MATTERS
The legal validity of the policies described in this prospectus
has been passed on by Myles R. Tashman, 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.
LEGAL PROCEEDINGS
Golden American and its affiliates, like other insurance
companies, are 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
48
<PAGE>
<PAGE>
payments have been made. Although the outcome of any
litigation cannot be predicted with certainty, Golden American
believes that at the present time, there are no pending or
threatened lawsuits that are reasonably like to have a material
adverse impact on Separate Account A or Golden American.
EXPERTS
The financial statements of Golden American Life Insurance
Company and Separate Account A appearing in this prospectus and
registration statement have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon
appearing elsewhere herein and in the registration statement and
are included in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.
Actuarial matters included in this prospectus have been examined
by Stephen J. Preston, F.S.A., MAAA, as stated in his opinion
filed as an exhibit to the Registration Statement we filed with
the SEC.
REGISTRATION STATEMENT
We have filed a Registration Statement relating to the Variable
Account and the variable life insurance policy described in this
prospectus with the SEC. The Registration Statement, which is
required by the Securities Act of 1933, includes additional
information that is not required in this prospectus under the
rules and regulations of the SEC. The additional information may
be obtained from the SEC's principal office in Washington, DC.
You will have to pay a fee for the material.
49
<PAGE>
<PAGE>
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS OF ACCOUNT A
The audited financial statements of Account A are listed below and included
herein beginning on the following page:
Report of Independent Auditors
Financial Statements -- Audited
Audited Statement of Assets and Liability -- December 31, 1998
Audited Statements of Operations for the Years ended December 31, 1998,
1997 and 1996
Audited Statements of Changes in Net Assets for the Years ended December
31, 1998, 1997 and 1996
Notes to Financial Statements
FINANCIAL STATEMENTS OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
The audited financial statements of Golden American prepared in accordance
with generally accepted accounting principles ("GAAP") are listed below and
included herein following the financial statements of Account A:
Report of Independent Auditors
Financial Statements -- Audited
Consolidated Balance Sheets -- Post-Merger as of December 31, 1998 and
Post-Acquisition as of December 31, 1997
Consolidated Statements of Income -- Post-Merger for the year ended
December 1998 and for the period October 25, 1997 through December 31, 1997,
Post-Acquisition for the periods January 1, 1997 through October 24, 1997,
and August 14, 1996 through December 31, 1996 and Pre-Acquisition for the
period January 1, 1996 through August 13, 1996
Consolidated Statements of Changes in Stockholder's Equity -- Post-Merger
for the year ended December 1998 and for the period October 25, 1997 through
December 31, 1997, Post-Acquisition for the periods January 1, 1997 through
October 24, 1997, and August 14, 1996 through December 31, 1996 and
Pre-Acquisition for the period January 1, 1996 through August 13, 1996
Consolidated Statements of Cash Flows -- Post-Merger for the year ended
December 1998 and for the period October 25, 1997 through December 31, 1997,
Post-Acquisition for the periods January 1, 1997 through October 24, 1997,
and August 14, 1996 through December 31, 1996 and Pre-Acquisition for the
period January 1, 1996 through August 13, 1996
Notes to Consolidated Financial Statements -- December 31, 1998
The financial statements of Golden American, which are included herein should
be distinguished from the Financial Statements of Account A and should be
considered only as bearing on the ability of Golden American to meet its
obligations under the Policies. They should not be considered as bearing on the
investment performance of the assets held in Account A.
50
<PAGE>
FINANCIAL STATEMENTS
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996
WITH REPORT OF INDEPENDENT AUDITORS
51
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
TABLE OF CONTENTS
Report of Independent Auditors.............................................. 53
Audited Financial Statements
Statement of Assets and Liability........................................... 54
Statements of Operations.................................................... 55
Statements of Changes in Net Assets......................................... 62
Notes to Financial Statements............................................... 69
52
<PAGE>
FINANCIAL STATEMENTS OF SEPARATE ACCOUNT A
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 A as of December 31, 1998, and
the related statements of operations and changes in net assets for each of the
three 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 A at December 31, 1998, and the results of
its operations and changes in its net assets for each of the three years in
the period then ended in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
Des Moines, Iowa
February 25, 1999
53
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
STATEMENT OF ASSETS AND LIABILITY
DECEMBER 31, 1998
(DOLLARS IN THOUSANDS)
COMBINED
--------
ASSETS
Investments at net asset value:
The GCG Trust:
Liquid Asset Series, 2,417,878 shares (cost - $2,418)........... $ 2,418
Limited Maturity Bond Series, 93,633 shares (cost - $1,015)..... 1,000
Hard Assets Series, 47,314 shares (cost - $479)................. 454
All-Growth Series, 109,052 shares (cost - $1,557)............... 1,635
Real Estate Series, 42,416 shares (cost - $679)................. 576
Fully Managed Series, 234,008 shares (cost - $3,597)............ 3,564
Multiple Allocation Series, 202,030 shares (cost - $2,608)...... 2,560
Capital Appreciation Series, 269,720 shares (cost - $5,040)..... 4,879
Rising Dividends Series, 308,038 shares (cost - $5,892)......... 6,780
Emerging Markets Series, 120,497 shares (cost - $1,026)......... 805
Value Equity Series, 201,392 shares (cost - $3,378)............. 3,198
Strategic Equity Series, 127,803 shares (cost - $1,624)......... 1,638
Small Cap Series, 191,056 shares (cost - $2,619)................ 3,063
Managed Global Series, 226,003 shares (cost - $3,128)........... 3,207
Mid-Cap Growth Series, 82,760 shares (cost - $1,337)............ 1,498
Growth & Income Series, 160,691 shares (cost - $2,413).......... 2,510
Research Series, 140,550 shares (cost - $2,742)................. 2,855
Total Return Series, 130,161 shares (cost - $2,031)............. 2,057
Value + Growth Series, 105,483 shares (cost - $1,489)........... 1,648
Global Fixed Income Series, 525 shares (cost - $6).............. 6
PIMCO Variable Insurance Trust:
PIMCO High Yield Bond Portfolio, 8,017 shares (cost - $79)...... 78
PIMCO StocksPLUS Growth and Income Portfolio, 5,794 shares
(cost - $68)................................................. 73
-------
TOTAL ASSETS (cost - $45,225)................................ 46,502
LIABILITY
Payable to Golden American Life Insurance Company for charges
and fees........................................................ 102
-------
TOTAL NET ASSETS................................................ $46,400
=======
NET ASSETS
For variable life insurance policies.............................. $43,556
Retained in Separate Account A by Golden American Life
Insurance Company............................................... 2,844
-------
TOTAL NET ASSETS................................................ $46,400
=======
See accompanying notes.
54
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996, EXCEPT AS NOTED
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
LIQUID ASSET LIMITED MATURITY HARD ASSETS
DIVISION BOND DIVISION DIVISION
----------------------- ----------------------- -----------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
(LOSS)
Income:
Dividends............. $ 142 $ 117 $ 85 $ 30 $ 68 $ 119 26 $ 73 $ 2
Capital gains
distributions......... -- -- -- -- -- -- 16 79 60
------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL INVESTMENT INCOME 142 117 85 30 68 119 42 152 62
Expenses:
Mortality and expense
risk and asset based
administrative
charges............... 26 22 17 8 9 10 8 9 3
------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL EXPENSES......... 26 22 17 8 9 10 8 9 3
------- ------- ------- ------- ------- ------- ------- ------- -------
NET INVESTMENT INCOME
(LOSS)................. 116 95 68 22 59 109 34 143 59
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS
Net realized gain
(loss) on investments.. -- -- -- (5) (24) 39 (347) 174 28
Net unrealized
appreciation
(depreciation) of
investments............ -- -- -- 35 19 (113) 226 (248) (7)
------- ------- ------- ------- ------- ------- ------- ------- -------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS......... $ 116 $ 95 $ 68 $ 52 $ 54 $ 35 $ (87)$ 69 $ 80
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
(a)Commencement of operations, January 30, 1996
(b)Commencement of operations, September 23, 1996
(c)Commencement of operations, October 2, 1996
(d)Commencement of operations, February 20, 1997
(e)Commencement of operations, February 21, 1997
(f)Commencement of operations, July 31, 1998
(g)Commencement of operations, August 3, 1998
(h)Commencement of operations, September 4, 1998
See accompanying notes.
55
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ALL-GROWTH REAL ESTATE FULLY MANAGED
DIVISION DIVISION DIVISION
----------------------- ----------------------- -----------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
(LOSS)
Income:
Dividends............. $ 9 $ 4 $ 39 $ 28 $ 29 $ 16 $ 105 $ 89 $ 72
Capital gains
distributions......... 10 54 6 52 26 7 196 130 87
------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL INVESTMENT INCOME 19 58 45 80 55 23 301 219 159
Expenses:
Mortality and expense
risk and asset based
administrative
charges............... 16 17 16 6 8 2 28 25 16
------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL EXPENSES......... 16 17 16 6 8 2 28 25 16
------- ------- ------- ------- ------- ------- ------- ------- -------
NET INVESTMENT INCOME
(LOSS)................. 3 41 29 74 47 21 273 194 143
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS
Net realized gain
(loss) on investments.. 21 (21) (7) (159) 144 27 72 179 18
Net unrealized
appreciation
(depreciation) of
investments............ 115 55 (82) (89) (54) 27 194 (16) 77
------- ------- ------- ------- ------- ------- ------- ------- -------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS......... $ 139 $ 75 $ (60) $ (174)$ 137 $ 75 $ 151 $ 357 $ 238
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
(a)Commencement of operations, January 30, 1996
(b)Commencement of operations, September 23, 1996
(c)Commencement of operations, October 2, 1996
(d)Commencement of operations, February 20, 1997
(e)Commencement of operations, February 21, 1997
(f)Commencement of operations, July 31, 1998
(g)Commencement of operations, August 3, 1998
(h)Commencement of operations, September 4, 1998
See accompanying notes.
56
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MULTIPLE CAPITAL RISING
ALLOCATION APPRECIATION DIVIDENDS
DIVISION DIVISION DIVISION
----------------------- ----------------------- -----------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
(LOSS)
Income:
Dividends............. $ 129 $ 163 $ 96 $ 64 $ 175 $ 27 $ 32 $ 30 $ 20
Capital gains
distributions......... 139 80 85 373 347 168 236 79 17
------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL INVESTMENT INCOME 268 243 181 437 522 195 268 109 37
Expenses:
Mortality and expense
risk and asset based
administrative
charges............... 23 21 18 41 31 19 53 33 17
------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL EXPENSES......... 23 21 18 41 31 19 53 33 17
------- ------- ------- ------- ------- ------- ------- ------- -------
NET INVESTMENT INCOME
(LOSS)................. 245 222 163 396 491 176 215 76 20
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS
Net realized gain
(loss) on investments.. 41 94 31 441 221 73 452 308 45
Net unrealized
appreciation
(depreciation) of
investments............ (110) 27 (50) (378) 122 104 5 523 235
------- ------- ------- ------- ------- ------- ------- ------- -------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS......... $ 176 $ 343 $ 144 $ 459 $ 834 $ 353 $ 672 $ 907 $ 300
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
(a)Commencement of operations, January 30, 1996
(b)Commencement of operations, September 23, 1996
(c)Commencement of operations, October 2, 1996
(d)Commencement of operations, February 20, 1997
(e)Commencement of operations, February 21, 1997
(f)Commencement of operations, July 31, 1998
(g)Commencement of operations, August 3, 1998
(h)Commencement of operations, September 4, 1998
See accompanying notes.
57
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
EMERGING VALUE STRATEGIC
MARKETS EQUITY EQUITY
DIVISION DIVISION DIVISION
----------------------- ----------------------- -----------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
(LOSS)
Income:
Dividends............. -- $ 2 -- $ 71 $ 210 $ 27 $ 45 $ 64 $ 6
Capital gains
distributions......... -- -- -- 26 51 49 63 1 6
------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL INVESTMENT INCOME -- 2 -- 97 261 76 108 65 12
Expenses:
Mortality and expense
risk and asset based
administrative
charges............... $ 11 12 $ 9 27 19 10 12 9 2
------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL EXPENSES......... 11 12 9 27 19 10 12 9 2
------- ------- ------- ------- ------- ------- ------- ------- -------
NET INVESTMENT INCOME
(LOSS)................. (11) (10) (9) 70 242 66 96 56 10
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS
Net realized gain
(loss) on investments.. (84) 54 (21) 206 188 12 18 60 13
Net unrealized
appreciation
(depreciation) of
investments............ (47) (184) 59 (291) 45 42 (115) 111 17
------- ------- ------- ------- ------- ------- ------- ------- -------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS......... $ (142)$ (140)$ 29 $ (15)$ 475 $ 120 $ (1)$ 227 $ 40
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
(a)Commencement of operations, January 30, 1996
(b)Commencement of operations, September 23, 1996
(c)Commencement of operations, October 2, 1996
(d)Commencement of operations, February 20, 1997
(e)Commencement of operations, February 21, 1997
(f)Commencement of operations, July 31, 1998
(g)Commencement of operations, August 3, 1998
(h)Commencement of operations, September 4, 1998
See accompanying notes.
58
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SMALL CAP MANAGED GLOBAL MID-CAP GROWTH
DIVISION DIVISION DIVISION
----------------------- ----------------------- -----------------------
1998 1997 1996(a) 1998 1997 1996(b) 1998 1997 1996(c)
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
(LOSS)
Income:
Dividends............. -- -- -- $ 45 $ 42 -- $ 64 $ 18 --
Capital gains
distributions......... -- -- -- 90 2 -- -- 1 $ 4
------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL INVESTMENT INCOME -- -- -- 135 44 -- 64 $ 19 4
Expenses:
Mortality and expense
risk and asset based
administrative
charges............... $ 25 $ 16 $ 6 13 3 -- 12 3 --
------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL EXPENSES......... 25 16 6 13 3 -- 12 3 --
------- ------- ------- ------- ------- ------- ------- ------- -------
NET INVESTMENT INCOME
(LOSS)................. (25) (16) (6) 122 41 -- 52 16 4
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS
Net realized gain
(loss) on investments.. 202 118 8 310 33 -- (177) -- 2
Net unrealized
appreciation
(depreciation) of
investments............ 310 101 33 122 (44)$ 1 129 36 (4)
------- ------- ------- ------- ------- ------- ------- ------- -------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS......... $ 487 $ 203 $ 35 $ 554 $ 30 $ 1 $ 4 $ 52 $ 2
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
(a)Commencement of operations, January 30, 1996
(b)Commencement of operations, September 23, 1996
(c)Commencement of operations, October 2, 1996
(d)Commencement of operations, February 20, 1997
(e)Commencement of operations, February 21, 1997
(f)Commencement of operations, July 31, 1998
(g)Commencement of operations, August 3, 1998
(h)Commencement of operations, September 4, 1998
See accompanying notes.
59
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
TOTAL VALUE +
GROWTH & INCOME RESEARCH RETURN GROWTH
DIVISION DIVISION DIVISION DIVISION
----------------------- --------------- --------------- ---------------
1998 1997 1996(c) 1998 1997(d) 1998 1997(e) 1998 1997(e)
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
(LOSS)
Income:
Dividends............. $ 74 $ 87 -- $ 152 $ 18 $ 113 $ 12 $ 68 --
Capital gains
distributions......... -- 1 -- -- 7 -- 4 -- --
------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL INVESTMENT INCOME 74 88 -- 152 25 113 16 68 --
Expenses:
Mortality and expense
risk and asset based
administrative
charges............... 15 7 -- 15 3 12 2 7 $ 2
------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL EXPENSES......... 15 7 -- 15 3 12 2 7 2
------- ------- ------- ------- ------- ------- ------- ------- -------
NET INVESTMENT INCOME
(LOSS)................. 59 81 -- 137 22 101 14 61 (2)
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS
Net realized gain
(loss) on investments.. (25) 142 -- 136 70 8 7 (30) 55
Net unrealized
appreciation
(depreciation) of
investments............ 164 (69)$ 2 132 (19) 23 3 197 (38)
------- ------- ------- ------- ------- ------- ------- ------- -------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS......... $ 198 $ 154 $ 2 $ 405 $ 73 $ 132 $ 24 $ 228 $ 15
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
(a)Commencement of operations, January 30, 1996
(b)Commencement of operations, September 23, 1996
(c)Commencement of operations, October 2, 1996
(d)Commencement of operations, February 20, 1997
(e)Commencement of operations, February 21, 1997
(f)Commencement of operations, July 31, 1998
(g)Commencement of operations, August 3, 1998
(h)Commencement of operations, September 4, 1998
See accompanying notes.
60
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
GLOBAL PIMCO STOCKSPLUS
FIXED HIGH YIELD GROWTH AND
INCOME BOND INCOME COMBINED
DIVISION DIVISION DIVISION -----------------------
1998(h) 1998(g) 1998(f) 1998 1997 1996
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
(LOSS)
Income:
Dividends............. -- $ 1 $ 1 $ 1,199 $ 1,201 $ 509
Capital gains
distributions......... -- -- -- 1,201 862 489
------- ------- ------- ------- ------- -------
TOTAL INVESTMENT INCOME -- 1 1 2,400 2,063 998
Expenses:
Mortality and expense
risk and asset based
administrative
charges............... -- -- -- 358 251 145
------- ------- ------- ------- ------- -------
TOTAL EXPENSES......... -- -- -- 358 251 145
------- ------- ------- ------- ------- -------
NET INVESTMENT INCOME
(LOSS)................. -- 1 1 2,042 1,812 853
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS
Net realized gain
(loss) on investments.. $ (50) -- -- 1,030 1,802 268
Net unrealized
appreciation
(depreciation) of
investments............ -- (1) 5 238 370 341
------- ------- ------- ------- ------- -------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS......... $ (50) -- $ 6 $ 3,310 $ 3,984 $ 1,462
======= ======= ======= ======= ======= =======
</TABLE>
(a)Commencement of operations, January 30, 1996
(b)Commencement of operations, September 23, 1996
(c)Commencement of operations, October 2, 1996
(d)Commencement of operations, February 20, 1997
(e)Commencement of operations, February 21, 1997
(f)Commencement of operations, July 31, 1998
(g)Commencement of operations, August 3, 1998
(h)Commencement of operations, September 4, 1998
See accompanying notes.
61
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996, EXCEPT AS NOTED
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
LIQUID ASSET LIMITED MATURITY HARD ASSETS
DIVISION BOND DIVISION DIVISION
----------------------- ----------------------- -----------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)...... $ 116 $ 95 $ 68 $ 22 $ 59 $ 109 $ 34 $ 143 $ 59
Net realized gain (loss) on
investments..................... -- -- -- (5) (24) 39 (347) 174 28
Net unrealized appreciation
(depreciation) of investments... -- -- -- 35 19 (113) 226 (248) (7)
------ ------- ------- ------- ------- ------- ------- ------- -------
Net increase (decrease) in net
assets resulting from operations 116 95 68 52 54 35 (87) 69 80
Changes from policy related
transactions:
Premiums.......................... 8,625 10,919 10,103 30 23 3 19 12 4
Surrenders and other withdrawals.. (1,081) (3,040) (2,084) (169) (106) (22) (203) (45) (44)
Net transfers among Divisions and
Fixed Interest Division of
Golden American Life Insurance
Company......................... (8,288) (7,465) (8,526) 198 (107) 334 40 87 375
Net additions to (from) assets
retained in the account by
Golden American Life Insurance
Company........................ 887 73 (23) (18) (20) 39 (8) 1 44
Policy related charges and fees.. (21) (11) (11) (9) (7) (6) (13) (9) (6)
------ ------- ------- ------- ------- ------- ------- ------- -------
Increase (decrease) in net assets
from policy related transactions. 122 476 (541) 32 (217) 348 (165) 46 373
------ ------- ------- ------- ------- ------- ------- ------- -------
Total increase (decrease)........ 238 571 (473) 84 (163) 383 (252) 115 453
NET ASSETS AT BEGINNING OF PERIOD.. 2,174 1,603 2,076 914 1,077 694 705 590 137
------ ------- ------- ------- ------- ------- ------- ------- -------
NET ASSETS AT END OF PERIOD........ $ 2,412 $ 2,174 $ 1,603 $ 998 $ 914 $ 1,077 $ 453 $ 705 $ 590
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
(a)Commencement of operations, January 30, 1996
(b)Commencement of operations, September 23, 1996
(c)Commencement of operations, October 2, 1996
(d)Commencement of operations, February 20, 1997
(e)Commencement of operations, February 21, 1997
(f)Commencement of operations, July 31, 1998
(g)Commencement of operations, August 3, 1998
(h)Commencement of operations, September 4, 1998
See accompanying notes.
62
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ALL-GROWTH REAL ESTATE FULLY MANAGED
DIVISION DIVISION DIVISION
----------------------- ----------------------- -----------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)...... $ 3 $ 41 $ 29 $ 74 $ 47 $ 21 $ 273 $ 194 $ 143
Net realized gain (loss) on
investments..................... 21 (21) (7) (159) 144 27 72 179 18
Net unrealized appreciation
(depreciation) of investments... 115 55 (82) (89) (54) 27 (194) (16) 77
------ ------- ------- ------- ------- ------- ------- ------- -------
Net increase (decrease) in net
assets resulting from operations 139 75 (60) (174) 137 75 151 357 238
Changes from policy related
transactions:
Premiums.......................... 57 52 22 27 8 1 97 55 5
Surrenders and other withdrawals.. (256) (61) (32) (140) (21) (3) (153) (336) (131)
Net transfers among Divisions and
Fixed Interest Division of
Golden American Life Insurance
Company......................... (317) 177 680 93 206 198 800 549 787
Net additions to (from) assets
retained in the account by
Golden American Life Insurance
Company........................ (21) (29) 63 (9) 25 20 (38) 40 80
Policy related charges and fees.. (17) (14) (13) (6) (7) (2) (33) (26) (13)
------- ------- ------- ------- ------- ------- ------- ------- -------
Increase (decrease) in net assets
from policy related transactions. (554) 125 720 (35) 211 214 673 282 728
------- ------- ------- ------- ------- ------- ------- ------- -------
Total increase (decrease)........ (415) 200 660 (209) 348 289 824 639 966
NET ASSETS AT BEGINNING OF PERIOD.. 2,047 1,847 1,187 784 436 147 2,732 2,093 1,127
------- ------- ------- ------- ------- ------- ------- ------- -------
NET ASSETS AT END OF PERIOD........ $ 1,632 $ 2,047 $ 1,847 $ 575 $ 784 $ 436 $ 3,556 $ 2,732 $ 2,093
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
(a)Commencement of operations, January 30, 1996
(b)Commencement of operations, September 23, 1996
(c)Commencement of operations, October 2, 1996
(d)Commencement of operations, February 20, 1997
(e)Commencement of operations, February 21, 1997
(f)Commencement of operations, July 31, 1998
(g)Commencement of operations, August 3, 1998
(h)Commencement of operations, September 4, 1998
See accompanying notes.
63
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MULTIPLE CAPITAL RISING
ALLOCATION APPRECIATION DIVIDENDS
DIVISION DIVISION DIVISION
----------------------- ----------------------- -----------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)...... $ 245 $ 222 $ 163 $ 396 $ 491 $ 176 $ 215 $ 76 $ 20
Net realized gain (loss) on
investments..................... 41 94 31 441 221 73 453 308 45
Net unrealized appreciation
(depreciation) of investments... (110) 27 (50) (378) 122 104 5 523 235
------- ------- ------- ------- ------- ------- ------- ------- -------
Net increase (decrease) in net
assets resulting from operations 176 343 144 459 834 353 672 907 300
Changes from policy related
transactions:
Premiums.......................... 78 97 18 215 82 7 248 182 37
Surrenders and other withdrawals.. (247) (122) (152) (499) (368) (145) (528) (149) (79)
Net transfers among Divisions and
Fixed Interest Division of
Golden American Life Insurance
Company......................... 229 33 454 (1,237) 2,574 1,292 1,878 1,058 1,355
Net additions to (from) assets
retained in the account by
Golden American Life Insurance
Company........................ (29) 7 38 (54) 225 151 (74) 105 161
Policy related charges and fees.. (22) (18) (15) (37) (43) (27) (62) (41) (19)
------- ------- ------- ------- ------- ------- ------- ------- -------
Increase (decrease) in net assets
from policy related transactions. 9 (3) 343 (1,612) 2,470 1,278 1,462 1,155 1,455
------- ------- ------- ------- ------- ------- ------- ------- -------
Total increase (decrease)........ 185 340 487 (1,153) 3,304 1,631 2,134 2,062 1,755
NET ASSETS AT BEGINNING OF PERIOD.. 2,369 2,029 1,542 6,023 2,719 1,088 4,631 2,569 814
------- ------- ------- ------- ------- ------- ------- ------- -------
NET ASSETS AT END OF PERIOD........ $ 2,554 $ 2,369 $ 2,029 $ 4,870 $ 6,023 $ 2,719 $ 6,765 $ 4,631 $ 2,569
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
(a)Commencement of operations, January 30, 1996
(b)Commencement of operations, September 23, 1996
(c)Commencement of operations, October 2, 1996
(d)Commencement of operations, February 20, 1997
(e)Commencement of operations, February 21, 1997
(f)Commencement of operations, July 31, 1998
(g)Commencement of operations, August 3, 1998
(h)Commencement of operations, September 4, 1998
See accompanying notes.
64
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
EMERGING VALUE STRATEGIC
MARKETS EQUITY EQUITY
DIVISION DIVISION DIVISION
----------------------- ----------------------- -----------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)...... $ (11)$ (10)$ (9) $ 70 $ 242 $ 66 $ 96 $ 56 $ 10
Net realized gain (loss) on
investments..................... (84) 54 (21) 206 188 12 18 60 13
Net unrealized appreciation
(depreciation) of investments... (47) (184) 59 (291) 45 42 (115) 111 17
------- ------- ------- ------- ------- ------- ------- ------- -------
Net increase (decrease) in net
assets resulting from operations (142) (140) 29 (15) 475 120 (1) 227 40
Changes from policy related
transactions:
Premiums.......................... 39 48 5 142 93 8 40 45 --
Surrenders and other withdrawals.. (19) (17) (118) (363) (107) (31) (15) (17) (1)
Net transfers among Divisions and
Fixed Interest Division of
Golden American Life Insurance
Company......................... (83) 48 527 547 735 1,130 334 467 424
Net additions to (from) assets
retained in the account by
Golden American Life Insurance
Company........................ (10) (20) 45 (39) 59 130 (18) 53 51
Policy related charges and fees.. (9) (11) (10) (29) (21) (12) (9) (7) (2)
------- ------- ------- ------- ------- ------- ------- ------- -------
Increase (decrease) in net assets
from policy related transactions. (82) 48 449 258 759 1,225 332 541 472
------- ------- ------- ------- ------- ------- ------- ------- -------
Total increase (decrease)........ (224) (92) 478 243 1,234 1,345 331 768 512
NET ASSETS AT BEGINNING OF PERIOD.. 1,027 1,119 641 2,948 1,714 369 1,305 537 25
------- ------- ------- ------- ------- ------- ------- ------- -------
NET ASSETS AT END OF PERIOD........ $ 803 $ 1,027 $ 1,119 $ 3,191 $ 2,948 $ 1,714 $ 1,636 $ 1,305 $ 537
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
(a)Commencement of operations, January 30, 1996
(b)Commencement of operations, September 23, 1996
(c)Commencement of operations, October 2, 1996
(d)Commencement of operations, February 20, 1997
(e)Commencement of operations, February 21, 1997
(f)Commencement of operations, July 31, 1998
(g)Commencement of operations, August 3, 1998
(h)Commencement of operations, September 4, 1998
See accompanying notes.
65
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SMALL CAP MANAGED GLOBAL MID-CAP GROWTH
DIVISION DIVISION DIVISION
----------------------- ----------------------- -----------------------
1998 1997 1996(a) 1998 1997 1996(b) 1998 1997 1996(c)
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)...... $ (25)$ (16)$ (6) $ 122 $ 41 -- $ 52 $ 16 $ 4
Net realized gain (loss) on
investments..................... 202 118 8 310 33 -- (177) -- 2
Net unrealized appreciation
(depreciation) of investments... 310 101 33 122 (44)$ 1 129 36 (4)
------- ------- ------- ------- ------- ------- ------- ------- -------
Net increase (decrease) in net
assets resulting from operations 487 203 35 554 30 1 4 52 2
Changes from policy related
transactions:
Premiums.......................... 114 98 8 72 6 (2) 166 38 1
Surrenders and other withdrawals.. (286) (40) (5) (108) (4) -- (117) (10) --
Net transfers among Divisions and
Fixed Interest Division of
Golden American Life Insurance
Company......................... 589 643 1,134 2,157 386 87 1,022 269 72
Net additions to (from) assets
retained in the account by
Golden American Life Insurance
Company........................ (31) 38 125 (11) 43 8 (5) 20 7
Policy related charges and fees.. (26) (20) (10) (14) (5) -- (22) (5) (1)
------- ------- ------- ------- ------- ------- ------- ------- -------
Increase (decrease) in net assets
from policy related transactions. 360 719 1,252 2,096 426 93 1,044 312 79
------- ------- ------- ------- ------- ------- ------- ------- -------
Total increase (decrease)........ 847 922 1,287 2,650 456 94 1,048 364 81
NET ASSETS AT BEGINNING OF PERIOD.. 2,209 1,287 -- 550 94 -- 445 81 --
------- ------- ------- ------- ------- ------- ------- ------- -------
NET ASSETS AT END OF PERIOD........ $ 3,056 $ 2,209 $ 1,287 $ 3,200 $ 550 $ 94 $ 1,493 $ 445 $ 81
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
(a)Commencement of operations, January 30, 1996
(b)Commencement of operations, September 23, 1996
(c)Commencement of operations, October 2, 1996
(d)Commencement of operations, February 20, 1997
(e)Commencement of operations, February 21, 1997
(f)Commencement of operations, July 31, 1998
(g)Commencement of operations, August 3, 1998
(h)Commencement of operations, September 4, 1998
See accompanying notes.
66
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
TOTAL VALUE +
GROWTH & INCOME RESEARCH RETURN GROWTH
DIVISION DIVISION DIVISION DIVISION
----------------------- --------------- --------------- ---------------
1998 1997 1996(c) 1998 1997(d) 1998 1997(e) 1998 1997(e)
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)...... $ 59 $ 81 -- $ 137 $ 22 $ 101 $ 14 $ 61 $ (2)
Net realized gain (loss) on
investments..................... (25) 142 -- 136 70 8 7 (30) 55
Net unrealized appreciation
(depreciation) of investments... 164 (69)$ 2 132 (19) 23 3 197 (38)
------- ------- ------- ------- ------- ------- ------- ------- -------
Net increase (decrease) in net
assets resulting from operations 198 154 2 405 73 132 24 228 15
Changes from policy related
transactions:
Premiums.......................... 81 78 1 377 10 46 1 48 16
Surrenders and other withdrawals.. (41) (4) -- (26) (4) (15) (1) (7) --
Net transfers among Divisions and
Fixed Interest Division of
Golden American Life Insurance
Company......................... 1,232 798 71 1,312 721 1,404 483 960 229
Net additions to (from) assets
retained in the account by
Golden American Life Insurance
Company........................ (25) (15) 9 (55) 77 (14) 10 (11) 186
Policy related charges and fees.. (22) (13) -- (32) (8) (15) (3) (12) (8)
------- ------- ------- ------- ------- ------- ------- ------- -------
Increase (decrease) in net assets
from policy related transactions. 1,225 844 81 1,576 796 1,406 490 978 423
------- ------- ------- ------- ------- ------- ------- ------- -------
Total increase (decrease)........ 1,423 998 83 1,981 869 1,538 514 1,206 438
NET ASSETS AT BEGINNING OF PERIOD.. 1,081 83 -- 869 -- 514 -- 438 --
------- ------- ------- ------- ------- ------- ------- ------- -------
NET ASSETS AT END OF PERIOD........ $ 2,504 $ 1,081 $ 83 $ 2,850 $ 869 $ 2,052 $ 514 $ 1,644 $ 438
======= ======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
(a)Commencement of operations, January 30, 1996
(b)Commencement of operations, September 23, 1996
(c)Commencement of operations, October 2, 1996
(d)Commencement of operations, February 20, 1997
(e)Commencement of operations, February 21, 1997
(f)Commencement of operations, July 31, 1998
(g)Commencement of operations, August 3, 1998
(h)Commencement of operations, September 4, 1998
See accompanying notes.
67
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996, EXCEPT AS NOTED
(CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PIMCO
GLOBAL PIMCO STOCKSPLUS
FIXED HIGH YIELD GROWTH AND
INCOME BOND INCOME COMBINED
DIVISION DIVISION DIVISION -----------------------
1998(h) 1998(g) 1998(f) 1998 1997 1996
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss)...... -- $ 1 $ 1 $ 2,042 $ 1,812 $ 853
Net realized gain (loss) on
investments..................... $ (50) -- -- 1,030 1,802 268
Net unrealized appreciation
(depreciation) of investments... -- (1) 5 238 370 341
------- ------- ------- ------- ------- -------
Net increase (decrease) in net
assets resulting from operations (50) -- 6 3,310 3,984 1,462
Changes from policy related
transactions:
Premiums.......................... (1) -- -- 10,520 11,863 10,221
Surrenders and other withdrawals.. -- (4) -- (4,277) (4,452) (2,847)
Net transfers among Divisions and
Fixed Interest Division of
Golden American Life Insurance
Company......................... 57 84 67 3,078 1,891 394
Net additions to (from) assets
retained in the account by
Golden American Life Insurance
Company........................ -- (2) -- 415 878 948
Policy related charges and fees.. -- (1) -- (411) (277) (147)
------- ------- ------- ------- ------- -------
Increase (decrease) in net assets
from policy related transactions. 56 77 67 9,325 9,903 8,569
------- ------- ------- ------- ------- -------
Total increase (decrease)........ 6 77 73 12,635 13,887 10,031
NET ASSETS AT BEGINNING OF PERIOD.. -- -- -- 33,765 19,878 9,847
------- ------- ------- ------- ------- -------
NET ASSETS AT END OF PERIOD........ $ 6 $ 77 $ 73 $46,400 $33,765 $19,878
======= ======= ======= ======= ======= =======
</TABLE>
(a)Commencement of operations, January 30, 1996
(b)Commencement of operations, September 23, 1996
(c)Commencement of operations, October 2, 1996
(d)Commencement of operations, February 20, 1997
(e)Commencement of operations, February 21, 1997
(f)Commencement of operations, July 31, 1998
(g)Commencement of operations, August 3, 1998
(h)Commencement of operations, September 4, 1998
See accompanying notes.
68
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 1 - ORGANIZATION
Golden American Life Insurance Company Separate Account A (the
"Account") was established by Golden American Life Insurance
Company ("Golden American") to support the operations of
flexible premium variable life insurance policies ("Policies").
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 Policies by crediting
insurance premiums to one or more divisions within the Account
or the Golden American Fixed Interest Division, which is not
part of the Account, as elected by the Policyowners. The
portion of the Account's assets applicable to Policies 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.
At December 31, 1998, the Account had, under GoldenSelect
Policies (Genesis I and Genesis Flex), twenty-two investment
divisions: Liquid Asset, Limited Maturity Bond, Hard Assets, All-
Growth, Real Estate, Fully Managed, Multiple Allocation, Capital
Appreciation, Rising Dividends, Emerging Markets, Value Equity,
Strategic Equity, Small Cap, Managed Global, Mid-Cap Growth
(formerly OTC), Growth & Income, Research, Total Return, Value +
Growth, Global Fixed Income, PIMCO High Yield Bond and PIMCO
StocksPLUS Growth and Income ("Divisions"). The assets in each
Division are invested in shares of a designated series
("Series," which may also be referred to as a "Portfolio") of
mutual funds, The GCG Trust and the PIMCO Variable Insurance
Trust, (the "Trusts"). The Developing World and Growth
Opportunities Divisions were available under GoldenSelect
Policies but did not have investments at December 31, 1998.
Prior to August 14, 1998, the Account also had certain
investment divisions available from the Equi-Select Series
Trust. In an effort to consolidate operations, Golden American
requested permission from the Securities and Exchange Commission
("SEC") to substitute shares of each Portfolio of the Equi-
Select Series Trust with shares of a similar Series of The GCG
Trust. On August 14, 1998, after approval from the SEC, shares
of each Portfolio of the Equi-Select Series Trust were
substituted with shares of a similar series of The GCG Trust.
The consolidation resulted in the following Series being
substituted from The GCG Trust:
Equi-Select Series Trust The GCG Trust
Investment Division Investment Division
------------------------ -------------------
OTC Mid-Cap Growth
Research Research
Total Return Total Return
Value + Growth Value + Growth
Growth & Income Growth & Income
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.
69
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 Policyowners are excluded in the
determination of the federal income tax liability of Golden
American.
NOTE 3 - CHARGES AND FEES
Under the terms of the Policies, certain charges are allocated
to the Policies to cover Golden American's expenses in
connection with the issuance and administration of the Policies.
Following is a summary of these charges:
MORTALITY AND EXPENSE RISK AND ASSET BASED ADMINISTRATIVE
CHARGES: Golden American assumes mortality and expense risks
related to the operations of the Account and, in accordance with
the terms of the Policies, deducts a daily charge from the
assets of the Account at annual rates of either .80% or .90% of
the assets attributable to the Policies to cover these risks.
For certain Policies, a daily asset based administrative charge
at an annual rate of .10% is deducted from assets attributable
to the Policies.
ADMINISTRATIVE CHARGES: An administrative charge of $200
(single life) or $300 (joint life) is made to cover the cost of
underwriting and issuing a Policy. The charge is deducted in
quarterly installments on each Policy during the first Policy
year. In addition, an administrative charge of $10 per Policy
is deducted quarterly to cover ongoing administrative expenses.
MORTALITY COST: A mortality cost is deducted equal to the cost
of providing coverage under the Policies. The cost is based on
each insurer's sex, attained age, and underwriting class and can
be adjusted, subject to certain maximum amounts set forth in the
Policies.
MINIMUM DEATH BENEFIT GUARANTEE CHARGE: A minimum death benefit
guarantee charge is assessed at a maximum rate per year of $0.60
per $1,000 of face or net amount at risk, as defined in each
Policy. The charge is deducted in equal installments on each
Policy quarterly processing date during the guarantee period.
DEFERRED SALES LOAD: Under Policies offered subsequent to
October 1995, a sales load of 6% of premium is deducted in equal
installments over a six-year period. Under Policies offered
prior to October 1995, a sales load of up to 7.5% was assessed
to each premium payment for sales-related expenses as specified
in the Policy. For the Policies offered prior to October 1995,
the sales load is deducted in equal annual installments over the
period the Policy is in force, not to exceed ten years. The
sales load on all Policies is chargeable to each premium when it
is received by Golden American. The amount of such charge is
initially advanced by Golden American to Policyowners. This
amount is included in the accumulation value and then deducted
in equal installments on each Policy anniversary date over a
period of either six or ten years. Upon surrender of the
Policy, the unamortized deferred sales load is deducted from the
accumulation value by Golden American.
DEFERRED FACE AMOUNT CHARGE: A charge is assessed which is
deducted in equal installments over a six year period following
receipt of the initial premium or increase in face amount. This
charge varies based on the face amount, age and sex of the
insured and the Policy chosen. This charge will never exceed
$12 per $1,000 of face amount. A portion of this charge is
considered to be an additional sales load.
PREMIUM TAXES: Premiums are subject to a charge for premium and
other state and local taxes. The amount and timing of the
payment by Golden American depends on the state of residence and
currently ranges up to 4.0% of premiums. Although the premium
tax is chargeable to each premium when received, the amount of
such charge is
70
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 3 - CHARGES AND FEES (CONTINUED)
initially advanced by Golden American to Policyowners and
included as a component of the Policyowner's investment value
and then deducted in equal installments on each Policy
anniversary date over a period of either six or ten years. Upon
the surrender of the Policy, any unamortized premium taxes are
deducted from the Policyowner's investment value. For some
Policies, the deferred premium taxes are collected in one
installment at the end of the Policy processing period following
the premium collection.
LOAN CHARGE: A current net loan charge of up to 1.00% is made
based on the Policy loan amount on Policies that allow loans.
The charge is accrued daily, as applicable, and deducted on each
Policy anniversary date.
OTHER CHARGES: Twelve free investment re-allocations among
Divisions per Policy are allowed each Policy year. For each
additional investment re-allocation, a $25 charge may be made
from the amount transferred between each Division. For each
partial withdrawal in excess of four per year, a charge is made
equal to the lesser of $25 and 2% of the amount withdrawn.
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:
YEAR ENDED DECEMBER 31
--------------------------
1998 1997 1996
-------- -------- --------
(DOLLARS IN THOUSANDS)
Balance at beginning of year $2,429 $1,551 $ 603
Sales load advanced 767 825 758
Premium tax advanced 271 322 304
Net transfer from Fixed Interest
Division -- 94 38
Amortization of deferred sales load
and premium tax (623) (363) (152)
------ ------ ------
Balance at end of year $2,844 $2,429 $1,551
====== ====== ======
71
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
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 1997 1996
-------------------- -------------------- --------------------
PURCHASES SALES PURCHASES SALES PURCHASES SALES
-------------------- -------------------- --------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
The GCG Trust
Liquid Asset Division $22,611 $22,372 $13,442 $12,871 $ 9,546 $10,017
Limited Maturity Bond Division 398 344 3,241 3,399 1,100 642
Hard Assets Division 6,948 7,080 4,335 4,146 576 140
All-Growth Division 204 755 1,263 1,099 1,918 1,168
Real Estate Division 3,093 3,055 6,843 6,584 337 102
Fully Managed Division 1,237 289 1,229 751 1,054 180
Multiple Allocation Division 556 301 908 689 915 408
Capital Appreciation Division 1,885 3,104 3,945 981 2,513 1,054
Rising Dividends Division 2,916 1,236 2,021 785 1,653 174
Emerging Markets Division 2,178 2,271 588 551 777 335
Value Equity Division 1,826 1,497 1,952 949 1,390 94
Strategic Equity Division 552 124 1,079 482 583 100
Small Cap Division 1,236 900 2,239 1,535 1,404 153
Managed Global Division 14,100 11,877 809 340 96 3
Mid-Cap Growth Division 12,222 11,124 416 82 127 47
Growth & Income Division 2,006 720 4,003 3,074 81 --
Research Division 4,261 2,546 1,563 742 -- --
Total Return Division 1,690 180 571 65 -- --
Value + Growth Division 1,249 208 2,605 2,182 -- --
Global Fixed Income Division 4,323 4,267 -- -- -- --
PIMCO Variable Insurance Trust:
PIMCO High Yield Bond Portfolio 86 7 -- -- -- --
PIMCO StocksPLUS Growth and
Income Portfolio 69 1 -- -- -- --
------- ------- ------- ------- ------- -------
COMBINED $85,646 $74,258 $53,052 $41,307 $24,070 $14,617
======= ======= ======= ======= ======= =======
</TABLE>
72
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 5 - SUMMARY OF CHANGES FROM UNIT TRANSACTIONS
Policyowners' transactions shown in the following table reflect
gross inflows ("Purchases") and outflows ("Sales") in units for
each Division.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------------------------------------------------
1998 1997 1996
-------------------- -------------------- --------------------
PURCHASES SALES PURCHASES SALES PURCHASES SALES
-------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
The GCG Trust
Liquid Asset Division 1,585,803 1,575,552 973,006 937,639 751,988 792,125
Limited Maturity Bond Division 21,495 19,604 195,361 208,941 64,993 41,870
Hard Assets Division 387,627 390,222 181,583 177,600 29,493 9,091
All-Growth Division 13,955 50,356 80,436 73,085 131,273 83,029
Real Estate Division 126,885 131,070 276,497 266,809 15,888 4,944
Fully Managed Division 45,578 13,056 55,134 38,235 55,652 11,003
Multiple Allocation Division 13,857 13,050 34,857 34,416 43,404 23,182
Capital Appreciation Division 61,997 135,741 159,349 46,074 148,680 67,690
Rising Dividends Division 121,562 55,078 107,589 42,323 113,046 12,227
Emerging Markets Division 254,914 250,189 56,756 54,201 78,278 33,532
Value Equity Division 93,161 80,872 102,289 59,623 96,086 6,366
Strategic Equity Division 31,056 7,888 81,966 36,885 51,542 8,565
Small Cap Division 89,683 63,335 187,527 125,606 121,574 12,919
Managed Global Division 1,034,663 870,875 65,487 27,970 8,986 250
Mid-Cap Growth Division 622,118 580,413 23,612 4,933 8,153 3,011
Growth & Income Division 126,743 50,768 267,409 204,064 6,613 4
Research Division 193,134 116,164 84,489 38,856 -- --
Total Return Division 92,613 10,087 35,701 4,087 -- --
Value + Growth Division 81,538 15,029 177,892 144,389 -- --
Global Fixed Income Division 321,091 320,650 -- -- -- --
PIMCO Variable Insurance Trust:
PIMCO High Yield Bond Portfolio 8,389 720 -- -- -- --
PIMCO StocksPLUS Growth and
Income Portfolio 6,582 39 -- -- -- --
--------- --------- --------- --------- --------- ---------
COMBINED 5,334,444 4,750,758 3,146,940 2,525,736 1,725,649 1,109,808
========= ========= ========= ========= ========= =========
</TABLE>
73
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
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- REAL FULLY
ASSET BOND ASSETS GROWTH ESTATE MANAGED
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
----------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Unit transactions $ 1,997 $ 766 $ 358 $ 1,280 $ 481 $ 2,631
Accumulated investment income (loss)
and net realized gain (loss)
on investments 415 247 120 274 197 958
Net unrealized appreciation
(depreciation) of investments -- (15) (25) 78 (103) (33)
------- ------- ------- ------- ------- -------
$ 2,412 $ 998 $ 453 $ 1,632 $ 575 $ 3,556
======= ======= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
MULTIPLE CAPITAL RISING EMERGING VALUE STRATEGIC
ALLOCATION APPRECIATION DIVIDENDS MARKETS EQUITY EQUITY
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
----------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Unit transactions $ 1,541 $ 2,998 $ 4,739 $ 1,158 $ 2,577 $ 1,369
Accumulated investment income (loss)
and net realized gain (loss)
on investments 1,061 2,033 1,138 (134) 794 253
Net unrealized appreciation
(depreciation) of investments (48) (161) 888 (221) (180) 14
------- ------- ------- ------- ------- -------
$ 2,554 $ 4,870 $ 6,765 $ 803 $ 3,191 $ 1,636
======= ======= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
MANAGED MID-CAP GROWTH & TOTAL
SMALL CAP GLOBAL GROWTH INCOME RESEARCH RETURN
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
----------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Unit transactions $ 2,331 $ 2,615 $ 1,435 $ 2,150 $ 2,372 $ 1,896
Accumulated investment income (loss)
and net realized gain (loss)
on investments 281 506 (103) 257 365 130
Net unrealized appreciation
(depreciation) of investments 444 79 161 97 113 26
------- ------- ------- ------- ------- -------
$ 3,056 $ 3,200 $ 1,493 $ 2,504 $ 2,850 $ 2,052
======= ======= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
PIMCO
STOCKSPLUS
VALUE + GLOBAL FIXED PIMCO HIGH GROWTH AND
GROWTH INCOME YIELD BOND INCOME
DIVISION DIVISION DIVISION DIVISION COMBINED
----------------------------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Unit transactions $ 1,401 $ 56 $ 77 $ 67 $36,295
Accumulated investment income (loss)
and net realized gain (loss)
on investments 84 (50) 1 1 8,828
Net unrealized appreciation
(depreciation) of investments 159 -- (1) 5 1,277
------- ------- ------- ------- -------
$ 1,644 $ 6 $ 77 $ 73 $46,400
======= ======= ======= ======= =======
</TABLE>
74
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 7 - UNIT VALUES
Accumulation unit value information (which is based on total assets)
for units outstanding by policy type as of December 31, 1998 was as
follows:
TOTAL UNIT
DIVISION/POLICY UNITS UNIT VALUE VALUE
- ------------------------------------------------------------------------
(IN THOUSANDS)
LIQUID ASSET
Variable Life - Single 1,884 $15.12 $ 28
Variable Life - Joint 160,461 14.89 2,390
-------
2,418
LIMITED MATURITY BOND
Variable Life - Single 129 17.74 2
Variable Life - Joint 57,289 17.42 998
-------
1,000
HARD ASSETS
Variable Life - Single 1,702 15.15 26
Variable Life - Joint 28,860 14.85 428
-------
454
ALL-GROWTH
Variable Life - Single 457 16.40 7
Variable Life - Joint 101,554 16.03 1,628
-------
1,635
REAL ESTATE
Variable Life - Joint 25,493 22.60 576
FULLY MANAGED
Variable Life - Joint 166,978 21.34 3,564
MULTIPLE ALLOCATION
Variable Life - Single 452 23.18 11
Variable Life - Joint 111,800 22.80 2,549
-------
2,560
CAPITAL APPRECIATION
Variable Life - Single 6,866 25.47 174
Variable Life - Joint 187,218 25.13 4,705
-------
4,879
RISING DIVIDENDS
Variable Life - Single 1,883 23.31 44
Variable Life - Joint 292,116 23.06 6,736
-------
6,780
EMERGING MARKETS
Variable Life - Single 9 6.71 --
Variable Life - Joint 121,222 6.64 805
-------
805
75
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 7 - UNIT VALUES (CONTINUED)
TOTAL UNIT
DIVISION/POLICY UNITS UNIT VALUE VALUE
- ------------------------------------------------------------------------
(IN THOUSANDS)
VALUE EQUITY
Variable Life - Single 2,395 $18.73 $ 45
Variable Life - Joint 169,765 18.58 3,153
-------
3,198
STRATEGIC EQUITY
Variable Life - Joint 113,785 14.40 1,638
SMALL CAP
Variable Life - Joint 196,924 15.55 3,063
MANAGED GLOBAL
Variable Life - Joint 210,041 15.27 3,207
MID-CAP GROWTH
Variable Life - Single 5,661 23.04 130
Variable Life - Joint 59,865 22.84 1,368
-------
1,498
GROWTH & INCOME
Variable Life - Single 2,600 17.29 45
Variable Life - Joint 143,329 17.20 2,465
-------
2,510
RESEARCH
Variable Life - Single 5,632 23.47 133
Variable Life - Joint 116,971 23.27 2,722
-------
2,855
TOTAL RETURN
Variable Life - Joint 114,140 18.02 2,057
VALUE + GROWTH
Variable Life - Joint 100,012 16.47 1,648
GLOBAL FIXED INCOME
Variable Life - Joint 441 13.31 6
PIMCO HIGH YIELD BOND
Variable Life - Joint 7,669 10.11 78
PIMCO STOCKSPLUS
GROWTH AND INCOME
Variable Life - Joint 6,543 11.14 73
--------- -------
COMBINED 2,522,146 $46,502
========= =======
76
<PAGE>
<PAGE>
FINANCIAL STATEMENTS OF GOLDEN AMERICAN LIFE INSURANCE COMPANY
For the years ended December 31, 1998 and 1997
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. 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
77
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
POST-MERGER
--------------------------------------
December 31, 1998 December 31, 1997
------------------- -----------------
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
================== ================
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
================== ================
See accompanying notes.
78
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
<TABLE>
<CAPTION>
POST-MERGER POST-ACQUISITION PRE-ACQUISITION
------------------------------------ ------------------------------------ ------------------
For the period| For the period For the period| For the period
October 25, 1997| January 1, 1997 August 14, 1996| January 1, 1996
For the year 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 puchased 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.
79
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(Dollars in thousands)
<TABLE>
<CAPTION>
PRE-ACQUISITION
------------------------------------------------------------------------------------
Accumulated
Other
Redeemable Additional Comprehensive Retained Total
Common Preferred Paid-in Income Earnings Stockholder's
Stock Stock Capital (Loss) (Deficit) Equity
------------- ------------- ------------- ------------- ------------- -------------
<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
============ ============ ============ ============ ============ ===========
<CAPTION>
POST-ACQUISITION
------------------------------------------------------------------------------------
Accumulated
Other
Redeemable Additional Comprehensive Retained Total
Common Preferred Paid-in Income Earnings Stockholder's
Stock Stock Capital (Loss) (Deficit) Equity
------------- ------------- ------------- ------------- ------------- -------------
<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>
See accompanying notes.
xx
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(Dollars in thousands)
<TABLE>
<CAPTION>
POST-MERGER
------------------------------------------------------------------------------------
Accumulated
Other
Redeemable Additional Comprehensive Retained Total
Common Preferred Paid-in Income Earnings Stockholder's
Stock Stock Capital (Loss) (Deficit) Equity
------------- ------------- ------------- ------------- ------------- -------------
<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.
80
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
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.
81
<PAGE>
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(Dollars in thousands)
<TABLE>
<CAPTION>
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 from 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.
82
<PAGE>
<PAGE>
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 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.
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.
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.
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 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.
<PAGE>
3. INVESTMENT OPERATIONS
- ------------------------------------------------------------------------------
INVESTMENT RESULTS
Major categories of net investment income are summarized below:
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)
Fixed maturities $35,224 $4,443 | $18,488
Equity securities -- 3 | --
Mortgage loans on real |
estate 6,616 879 | 3,070
Policy loans 619 59 | 482
Short-term investments 1,311 129 | 443
Other, net 246 (154) | 24
Funds held in escrow -- -- | --
------- ------ | -------
Gross investment income 44,016 5,359 | 22,507
Less investment expenses (1,531) (232) | (851)
------- ------ | -------
Net investment income $42,485 $5,127 | $21,656
======= ====== | =======
<PAGE>
POST-ACQUISITION PRE-ACQUISITION
---------------- | ---------------
For the period | For the period
August 14, 1996 | January 1, 1996
through | through
December 31, 1996 | August 13, 1996
------------------ | ---------------
(Dollars in thousands)
Fixed maturities $5,083 | $4,507
Equity securities 103 | --
Mortgage loans on real |
estate 203 | --
Policy loans 78 | 73
Short-term investments 441 | 341
Other, net 2 | 22
Funds held in escrow -- | 145
------ | ------
Gross investment income 5,910 | 5,088
Less investment expenses (115) | (98)
------ | ------
Net investment income $5,795 | $4,990
====== | ======
Realized gains (losses) on investments are as follows:
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)
Fixed maturities, |
available for sale ($1,428) $25 | $151
Mortgage loans (63) (10) | --
------- --- | ----
Realized gains (losses) |
on investments ($1,491) $15 | $151
======= === ====
<PAGE>
POST-ACQUISITION PRE-ACQUISITION
---------------- | ---------------
For the period | For the period
August 14, 1996 | January 1, 1996
through | through
December 31, 1996 | August 13, 1996
----------------- | ----------------
(Dollars in thousands)
Fixed maturities, |
available for sale $42 | ($420)
Mortgage loans -- | --
--- | -----
Realized gains (losses) |
on investments $42 | ($420)
=== =====
The change in unrealized appreciation (depreciation) on securities at
fair value is as follows:
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)
Fixed maturities: |
Available for sale $1,100 ($3,494) | $4,197
Held for investment -- -- | --
Equity securities (2,390) (68) | (462)
------- ------- | ------
Unrealized appreciation |
(depreciation) of |
securities ($1,290) ($3,562) | $3,735
======= ======= ======
<PAGE>
POST-ACQUISITION | PRE-ACQUISITION
----------------- | ----------------
For the period | For the period
August 14, 1996 | January 1, 1996
through | through
December 31, 1996 | August 13, 1996
----------------- | ----------------
(Dollars in thousands)
Fixed maturities: |
Available for sale $2,497 | ($3,045)
Held for investment -- | (90)
Equity securities (4) | (2)
------ | -------
Unrealized appreciation |
(depreciation) of |
securities $2,493 | ($3,137)
====== =======
<PAGE>
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:
POST-MERGER
----------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ---------
(Dollars in thousands)
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
===============================================
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.
<PAGE>
POST-MERGER
-------------------------
Estimated
Amortized Fair
December 31, 1998 Cost 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
======== ========
<PAGE>
An analysis of sales, maturities and principal repayments of the Companies'
fixed maturities portfolio is as follows:
Gross Gross Proceeds
Amortized Realized Realized from
Cost Gains Losses Sale
--------- -------- -------- --------
(Dollars in thousands)
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
======== ==== ======= ========
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
======== ==== ======= ========
<PAGE>
<TABLE>
<CAPTION>
Gross Gross Proceeds
Amortized Realized Realized from
Cost Gains Losses Sale
- ------------------------------------------------------------------------------
(Dollars in thousands)
<S> <C> <C> <C> <C>
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
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, October 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 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.
<PAGE>
The following compares carrying values as shown for financial reporting
purposes with estimated fair values:
POST-MERGER
-----------------------------------------
December 31 1998 1997
- ----------- -------------------- -------------------
Estimated Estimated
Carrying Fair Carrying Fair
Value Value Value Value
-------- --------- -------- -----------
(Dollars in thousands)
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
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.
<PAGE>
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.
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
October 25, 1997
For the year 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.
<PAGE>
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 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.
<PAGE>
An analysis of the VPIF asset is as follows:
| PRE-
POST-ACQUISITION | ACQUISITION
-------------------- | -----------
For the For the | For the
period period | period
January August | January
1, 1997 14, 1996 | 1, 1996
through through | through
October December | August
24, 1997 31, 1996 | 13, 1996
------------------------ | -----------
(Dollars in thousands)
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 amoritization (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
======= ======= ======
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.
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.
<PAGE>
INCOME TAX EXPENSE
Income tax expense (benefit) included in the consolidated financial
statements is as follows:
<TABLE>
<CAPTION>
PRE-
POST-MERGER | POST-ACQUISITION | ACQUISITION
--------------------------| --------------------------| -------------
For the| For the For the| For the
period| period period| period
October 25,| January 1, August 14,| January 1,
For the year 1997| 1997 1996| 1996
ended through| through through| through
December 31, December 31,| October 24, December 31,| August 13,
1998 1997| 1997 1996| 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>
<PAGE>
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>
<CAPTION>
| | PRE-
| | ACQUISI-
POST-MERGER | POST-ACQUISITION | TION
----------------------| --------------------| ---------
For the| For the For the| For the
period| period period| period
October| January August| January
For the 25, 1997| 1, 1997 14, 1996| 1, 1996
year ended through| through through| through
December December| October December| August
31, 1998 31, 1997| 24, 1997 31, 1996| 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>
<PAGE>
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:
<TABLE>
<CAPTION>
POST-MERGER
---------------- ----------------
December 31 1998 1997
- ------------------------------------------------------------ ----------------
(Dollars in thousands)
<S> <C> <C>
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
================ ================
</TABLE>
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.
<PAGE>
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:
<TABLE>
<CAPTION>
1998 1997
------------------------
(Dollars in thousands)
<S> <C> <C>
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
========================
</TABLE>
<TABLE>
<CAPTION>
1998 1997
------------------------
(Dollars in thousands)
<S> <C> <C>
Funded status:
Funded status at December 31 ($4,454) ($956)
Unrecognized net loss 2,266 --
------------------------
Net amount recognized ($2,188) ($956)
========================
</TABLE>
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:
<TABLE>
<CAPTION>
December 31 1998 1997
- ------------------------------------------------------------------
<S> <C> <C>
Discount rate 6.75% 7.25%
Expected return on plan assets 9.50 9.00
Rate of compensation increase 4.00 5.00
</TABLE>
The following table provides the net periodic benefit cost for the fiscal
years 1998 and 1997:
<TABLE>
<CAPTION>
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.
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, 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.
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.
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 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.
{ }
<PAGE>
<PAGE>
APPENDIX A
[Two-column format]
NET SINGLE PREMIUM FACTOR
The net single premium factor is based on the age, sex and
underwriting class of the insured(s). It decreases as an
insured's age increases. As a result, the variable insurance
amount will decrease in relationship to the policy's investment
value as the insured's age increases. Also, net single premium
factors may be higher for a woman than for a man of the same age.
A table of minimum net single premium factors is included in the
policy.
TABLES OF ILLUSTRATIVE MINIMUM
NET SINGLE PREMIUM FACTORS
SINGLE LIFE, MALE, AGE 35,
NON-SMOKER
POLICY YEAR NSP FACTOR
----------- ----------
1 4.28987
5 3.74881
10 3.17597
15 2.70250
20 2.31286
25 1.99777
30 1.74514
35 1.54717
40 1.39370
45 1.28082
50 1.19623
55 1.13703
60 1.08538
65 1.02207
SURVIVORSHIP, MALE AND FEMALE,
AGE 35, NON-SMOKERS
POLICY YEAR NSP FACTOR
----------- ----------
1 6.43408
5 5.50113
10 4.52680
15 3.73086
20 3.08264
25 2.55812
30 2.13693
35 1.80584
40 1.55097
45 1.36578
50 1.23618
55 1.15170
60 1.08806
65 1.02207
A-1
<PAGE>
<PAGE>
PART II
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of section 15(d) of the Securities Exchange
Act of 1934, the undersigned Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that section.
REQUIRED REPRESENTATION
Registrant makes the following representation:
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.
RULE 484 UNDERTAKING
Golden American Life Insurance Company's Articles of Incorporation provide, in
Article XIII, for indemnification of directors, officers and employees of the
company.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provision, or otherwise under circumstances
where the burden of proof set forth in section 11(b) of the Act has not been
sustained, the Registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the 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 whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
REPRESENTATION PURSUANT TO RULE 6e-3(T)
This filing is made pursuant to Rules 6c-3 and 6e-3(T) under the Investment
Company Act of 1940.
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents: the
facing sheet; the prospectus; the undertaking to file reports; Rule 484
Undertaking; Representations Pursuant to Section 26(e) , Rule 484 and Rule
6e-3(T); the signatures; Consents of Stephen J. Preston, Myles R. Tashman,
Esq., Ernst & Young, LLP, independent auditors, and Sutherland, Asbill &
Brennan LLP; and the following exhibits:
1.A (1) Resolution of Board of Directors establishing the separate
account.
(2) Custodian Agreement.
(3) Distributing Contracts:
(a) Distribution Agreement between Directed Services,
Inc., and Golden American
(b) Form of typical Sales Agreement between Directed Services,
Inc., and various broker-dealers.
(c) Organizational Agreement.
(d) Addendum to Organizational Agreement.
(e) Expense Reimbursement Agreement.
(f) Expense Reimbursement Agreement Amendment No. 1
(g) Expense Reimbursement Agreement Amendment No. 2
(h) Expense Reimbursement Agreement Amendment No. 3
(i) Expense Reimbursement Agreement Amendment No. 4
(j) Form of Assignment for Organizational Agreement.
(4) Not Applicable.
(5) Form of each type of contract:
(a) Individual Joint and Last Survivor - Variable Life Insurance
Policy
(b) Group Flexible Premium - Variable Life Insurance Policy
(c) Group Joint and Last Survivor - Variable Life Insurance
Policy
(d) Charge Deduction Division Rider.
(e) Discretionary Group Charge Deduction Division Rider.
(f) Partial Withdrawal Rider.
(g) Discretionary Group Partial Withdrawal Rider.
(h) Discretionary Group Incontestability and Suicide Amendment
Rider.
(i) Incontestability and Suicide Amendment Rider.
(j) Mortality Cost Calculation Amendment.
(k) Flexible Premium Variable Life Insurance Policy
(l) Flexible Premium Joint and Last Survivor Variable Life
Insurance Policy
(m) Group Flexible Premium Variable Life Insurance Policy
(n) Group Flexible Premium Joint and Last Survivor Variable Life
Ins. Policy
(6) (a) Articles of Incorporation of Golden American.
(b) Certificates of Amendment of the Restated Articles of
Incorporation of Golden American Life Insurance Company.
(c) Certificate of Amendment of the Restated Articles of
Incorporation of MB Variable Life Insurance Company.
(d) Certificate of Amendment of the Restated Articles of
Incorporation of Golden American Life Insurance Company
(12/28/93).
(e) By-Laws of Golden American.
(f) By-Laws of Golden American, as amended.
(g) Certificate of Amendment of the By-Laws of MB Variable Life
Insurance Company, as amended.
(h) By-Laws of Golden American, as amended (12/21/93).
(7) Not Applicable.
(8) Not Applicable.
(9) Not Applicable.
(10) Form of Application:
(a) Group Flexible Premium Variable Life Insurance Application/
Enrollment Form (GA-A/EL-2/97).
(b) Flexible Premium Variable Life Insurance Application/Enrollment
Form
2. See 1.A(5)
3. Opinion and Consent of Counsel as to the legality of the securities being
registered.
4. Financial Schedules.
5. Not Applicable.
6. Opinion and Consent of Stephen J. Preston, F.S.A., M.A.A.A.
7. See Item 3
8. Consent of Ernst & Young LLP, Independent Auditors.
9. Consent of Sutherland, Asbill & Brennan LLP
10. Powers of Attorney.
<PAGE>
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 the 3rd
day of May, 1999.
SEPARATE ACCOUNT A
(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 persons in the capacities indicated on
May 3, 1999.
Signature Title
President and Director
- -------------------- of Depositor
Barnett Chernow*
Senior Vice President,
- -------------------- Chief Financial Officer
E. Robert Koster*
DIRECTORS OF DEPOSITOR
- -----------------------
Myles R. Tashman
- -----------------------
R. Brock Armstrong
- -----------------------
Michael W. Cunningham
- -----------------------
Linda B. Emory
- -----------------------
Phillip R. Lowery
By: /s/ Marilyn Talman Attorney-in-Fact
-----------------------
Marilyn Talman
_______________________
*Executed by Marilyn Talman on behalf of those indicated pursuant
to Power of Attorney.
<PAGE>
EXHIBIT INDEX
Exhibit Item
- ------- ----
EX-99.A1 Resolution of Board of Directors establishing the separate
account.
EX-99.A2 Custodian Agreement.
EX-99.A3A Distribution Agreement between Directed Services,
Inc., and Golden American
EX-99.A3B Form of typical Sales Agreement between Directed Services,
Inc., and various broker-dealers.
EX-99.A3C Organizational Agreement.
EX-99.A3D Addendum to Organizational Agreement.
EX-99.A3E Expense Reimbursement Agreement.
EX-99.A3F Expense Reimbursement Agreement Amendment No. 1
EX-99.A3G Expense Reimbursement Agreement Amendment No. 2
EX-99.A3H Expense Reimbursement Agreement Amendment No. 3
EX-99.A3I Expense Reimbursement Agreement Amendment No. 4
EX-99.A3J Form of Assignment for Organizational Agreement.
EX-99.A5A Individual Joint and Last Survivor - Variable Life Insurance
Policy
EX-99.A5B Group Flexible Premium - Variable Life Insurance Policy
EX-99.A5C Group Joint and Last Survivor - Variable Life Insurance
Policy
EX-99.A5D Charge Deduction Division Rider.
EX-99.A5E Discretionary Group Charge Deduction Division Rider.
EX-99.A5F Partial Withdrawal Rider.
EX-99.A5G Discretionary Group Partial Withdrawal Rider.
EX-99.A5H Discretionary Group Incontestability and Suicide Amendment
Rider.
EX-99.A5I Incontestability and Suicide Amendment Rider.
EX-99.A5J Mortality Cost Calculation Amendment.
EX-99.A5K Flexible Premium Variable Life Insurance Policy
EX-99.A5L Flexible Premium Joint and Last Survivor Variable Life
Insurance Policy
EX-99.A5M Group Flexible Premium Variable Life Insurance Policy
EX-99.A5N Group Flexible Premium Joint and Last Survivor Variable Life
Ins. Policy
EX-99.A6A Articles of Incorporation of Golden American.
EX-99.A6B Certificates of Amendment of the Restated Articles of
Incorporation of Golden American Life Insurance Company.
EX-99.A6C Certificate of Amendment of the Restated Articles of
Incorporation of MB Variable Life Insurance Company.
EX-99.A6D Certificate of Amendment of the Restated Articles of
Incorporation of Golden American Life Insurance Company
(12/28/93).
EX-99.A6E By-Laws of Golden American.
EX-99.A6F By-Laws of Golden American, as amended.
EX-99.A6G Certificate of Amendment of the By-Laws of MB Variable Life
Insurance Company, as amended.
EX-99.A6H By-Laws of Golden American, as amended (12/21/93).
EX-99.A10A Group Flexible Premium Variable Life Insurance Application/
Enrollment Form (GA-A/EL-2/97).
EX-99.A10B Flexible Premium Variable Life Insurance Application/Enrollment
Form
EX-99.3 Opinion and Consent of Counsel as to the legality of the
securities being registered.
EX-99.4 Financial Schedules
EX-99.6 Opinion and Consent of Stephen J. Preston, F.S.A., M.A.A.A.
EX-99.8 Consent of Ernst & Young LLP, Independent Auditors
EX-99.9 Consent of Sutherland, Asbill & Brennan LLP
EX-99-10 Powers of Attorney
<PAGE>
Exhibit (1)
Golden American Life Insurance Company
TO: File DATE: July 14, 1988
FROM: Fred H. Davidson
SUBJECT: Western Capital Specialty Managers Separate Accounts A
& B
- -----------------------------------------------------------------
Pursuant to resolution of the Board of Directors of Golden
American Life Insurance Company, dated March 25, 1988, the
following separate accounts are hereby established to hold the
assets funding the indicated variable contracts or policies:
* Western Capital Specialty Managers Separate Account A for
variable life insurance policies investing in the Western
Capital Special Managers Trust.
* Western Capital Specialty Managers Separate Account B for
variable annuity contracts investing in the Western Capital
Specialty Managers Trust.
SECOND AMENDMENT
BANKERS TRUST COMPANY
(U.S. CUSTODY)
This Second Amendment ("Second Amendment") dated as of May 4, 1999,
between Golden American Life Insurance Company (the "Customer") and
Bankers Trust Company (the "Custodian");
WITNESSETH:
WHEREAS, The Customer and Custodian have entered into a Custody
Agreement dated February 13, 1995 (the "Agreement") and a First
Amendment dated May 13, 1996 (the "Amendment"), and
WHEREAS, the Customer and Custodian desire to continue the
Agreement as amended on the same terms and conditions as existing as
of the date hereof, notwithstanding that the Customer and Custodian
will no longer be affiliated entities upon the closing of that Stock
Purchase Agreement dated May 3, 1996 between Whitewood Properties
Corp. and Equitable of Iowa Companies ("Stock Purchase Agreement");
NOT, THEREFORE, THE parties hereto hereby agree as follows:
1. Continuation of Agreement. Effective as of the Closing Date (as
defined in the Stock Purchase Agreement), the Agreement, as amended
by the Amendment, shall continue upon the same terms and conditions;
provided, however, that Customer may terminate the Agreement upon
thirty (30) days notice to Custodian.
2. Reference to and Effect Upon the Agreement. Except as specially
amended and agreed to above, the terms and provisions of the
Agreement and the amendment are hereby ratified and confirmed and
shall remain in full force and effect.
3. Acknowledgement of Applicability of Stock Purchase Agreement.
The Customer and Custodian hereby acknowledge that this Second
Amendment is being entered into pursuant to Section 5.13 of the Stock
Purchase Agreement, and each agree to undertake such further actions
as may be necessary to carry out and effectuate the purposes of
Section 5.13 of the Stock Purchase Agreement as related to the
services to be provided pursuant to the Agreement.
IN WITNESS WHEREOF, the parties hereby have caused this
Second Amendment to be duly executed by their respective
authorized officers as of the date appearing in the first
paragraph.
BANKERS TRUST COMPANY
By: ________________________/s/
Name: Joseph Wadlinger
Title: Vice President
GOLDEN AMERICAN LIFE INSURANCE COMPANY
By: _______________________/s/
Name: Mary Bea Wilkinson
Title: Senior Vice President & Treasurer
By: ________________________/s/
Name: Barnett Chernow
Title: Executive Vice President
FIRST AMENDMENT
This FIRST AMENDMENT ("Amendment") dated as of May 13, 1996
between GOLDEN AMERICAN LIFE INSURANCE COMPANY (the
"Customer") and BANKERS TRUST COMPANY (the "Custodian");
WITNESSETH:
WHEREAS, the Customer and the Custodian have entered into a
Custody Agreement dated as of February 13, 1996 (the
"Agreement"); and
WHEREAS, the Customer and the Custodian have agreed to amend
the Agreement on the terms and conditions herein set forth;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Amendment to Agreement. Effective as of the date
hereof, the Agreement is hereby amended by inserting the
following into the first paragraph of Section 9, after the
sixth sentence thereof:
The Custodian shall indemnify the Customer for any loss
of Securities in the Custodian's custody to the extent
that such loss was caused by the negligence or
dishonesty of the Custodian. In the event of a loss of
Securities for which the Custodian is obligated to
indemnify the Customer, the Custodian shall either
replace the Securities or the value of the Securities
together with the value of any loss of rights or
privileges resulting from said loss of Securities.
2. Reference to and Effect Upon the Agreement. Except as
specifically amended above, the terms and provisions of the
Agreement are hereby ratified and confirmed and shall remain
in full force and effect.
3. Governing Law. This Amendment shall be governed by,
and construed in accordance with, the laws of the State of
New York.
4. Headings. Section headings in this Amendment are
included herein for convenience of reference only and shall
not constitute a part of this Amendment for any other
purposes.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their respective authorized
officers as of the date appearing in the first paragraph
above.
BANKERS TRUST COMPANY
By: ____________________/s/
Name: Joseph Wadlinger
Title: Vice President
GOLDEN AMERICAN LIFE INSURANCE
By: /s/
Name: Mary Bea Wilkinson
Title: Senior Vice President &
Treasurer
By: /s/
Name: David L. Jacobson
Title: Senior Vice
President & Asst. Sec.
BANKERS TRUST COMPANY
CUSTODIAN AGREEMENT
US CUSTODY
AGREEMENT dated as of February 13, 1995 between BANKERS
TRUST COMPANY (the "Custodian") and Golden American Life
Insurance Company (the "Customer").
1. Employment of Custodian. The Customer hereby employs
the Custodian as custodian of all assets of the Customer
which are delivered to and accepted by the Custodian (the
"Property") pursuant to the terms and conditions set forth
herein. Without limitations, such Property shall include
stocks and other equity interests of every type, evidences
of indebtedness, other instruments representing same or
rights or obligations to receive, purchase, deliver or sell
same and other non-cash investment property of the Customer
that is acceptable for deposit ("Securities") and cash from
whatever source and in whatever currency ("Cash"). The
Custodian shall not be responsible for any property of the
Customer held or received by the Customer or others and not
delivered to and accepted by the Custodian or any of its
Subcustodians (as that term is defined in Section 4 below)
as hereinafter provided.
2. Custody Account. The Custodian agrees to establish and
maintain one or more custody accounts on its books in the
name of the Customer (the "Account") for any and all
Property consisting of Securities from time to time received
and accepted by the Custodian or any of its Subcustodians
for the account of the Customer. Any and all Property
consisting of Cash from time to time received and accepted
by the Custodian or any of its Subcustodians for the account
of the Customer shall be credited to one or more demand
deposit accounts or custody cash accounts of the Customer
(the "Cash Account") on the books of the Custodian. The
Custodian shall have the right, in its sole discretion, to
refuse to accept any Property that is not in proper form for
deposit for any reason. The Customer acknowledges its
responsibility as a principal for all of its obligations to
the Custodian arising under or in connection with this
Agreement, notwithstanding that it may be acting on behalf
of other persons, and warrants its authority to deposit in
the Account or Cash Account, as the case may be, any
Property received therefor by the Custodian or its
Subcustodian and to give, and authorize others to give,
instructions relative thereto pursuant to the terms of this
Agreement. The Custodian may deliver securities of the same
class in place of those deposited in the Account. The
Customer further agrees that the Custodian shall not be
subject to, nor shall its rights and obligations under this
Agreement or with respect to the Account or the Cash
Account, as the case may be, be affected by, any agreement
between the Customer and any other person.
The Custodian shall hold, keep safe and protect as
custodian for the Account, on behalf of the Customer, all
Property in the Account and the Cash Account. Subject to
the provisions of the next paragraph relating to Securities
issued outside of the United States and collections of
income in a currency other than United States dollars, all
transactions involving the Property shall be executed or
settled solely in accordance with Instructions (as that
terms is defined in Section 8), except that until the
Custodian receives Instructions to the contrary, the
Custodian will:
(a) collect all interest and dividends and all other income
and payments, whether paid in cash or in kind, on the
Property, as same become payable and credit the same to the
Cash Account;
(b) present for payment all Securities held in the Account
which are called, redeemed or retired or otherwise become
payable and all coupons and other income items which call
for payment upon presentation to the extent that the
Custodian is actually aware of such opportunities and credit
the cash received to the Cash Account;
(c) (I) exchange Securities where the exchange is purely
ministerial (including, without limitation, the exchange of
temporary securities for those in definitive form and the
exchange of warrants, or other documents of entitlement of
securities, for the Securities themselves); and (ii) when
notification of a tender or exchange offer (other than
ministerial exchanges described in (I) above) is received
for the Account, endeavor to receive Instructions, provided
that if such Instructions are not received in time for the
Custodian to take timely action, no action shall be taken
with respect thereto;
(d) whenever notification of a rights entitlement or a
fractional interest resulting from a rights issue, stock
dividend or stock split is received for the Account and such
rights entitlement or fractional interest bears and
expiration date, if after endeavoring to obtain Instructions
such Instructions are not received in time for the Custodian
to take timely action, sell in the discretion of the
Custodian (which sale the Customer hereby authorizes the
Custodian to make) such rights entitlement or fractional
interest and credit the Cash Account with the net proceeds
of such sale:
(e) execute in the Customer's name for the Account,
whenever the Custodian deems it appropriate, such ownership
and other certificates as may be required to obtain the
payment of income from the Property; and
(f) appoint brokers and agents for any of the ministerial
transaction involving the Securities described in (a) - (e),
including, without limitation, affiliates of the Custodian
or any Subcustodian.
Notwithstanding the foregoing and any Instructions
received in connection therewith, with respect to Securities
issued outside of the United States, the Custodian shall not
assume any responsibility with respect to coupon payments,
redemptions, exchanges, or similar matters affecting such
Securities, and its duties hereunder shall be limited to the
safekeeping of such Securities only. Collections of income
in foreign currency are, to the extent possible, to be
converted into United States dollars as soon as practicable,
and in effecting such conversions the Custodian may use such
methods or agencies as it may see fit, including the
facilities of its own foreign division at customary rates.
The Custodian shall deliver, subject to Section 7
below, any and all Property in the Account in accordance
with Instructions and, in connection therewith, the Customer
will accept delivery of Securities of the same class and
denomination in place of those contained in the Account.
3. Records, Ownership of Property and Statements. The
ownership of the Property, whether held by the Custodian or
a Subcustodian or in a Securities System (as that term is
defined in Section 4) in which the Custodian participates,
shall be clearly recorded on the Custodian's books as
belonging to the Account or the Cash Account and not for the
Custodian's own interest. The Custodian shall keep accurate
and detailed accounts of all investments, receipts,
disbursements and other transactions for the Account and the
Cash Account. All accounts, books and records of the
Custodian relating thereto shall be open, upon reasonable
notice from the Customer to the Custodian, to inspection and
audit at all reasonable times during normal business hours
by any person designated by the Customer.
Subject to the election of the Customer as hereinafter
provided, the Custodian will supply to the Customer from
time to time, as mutually agreed upon, a statement in
respect to any Property in the Account or the Cash Account
held by the Custodian or by a Subcustodian. In the absence
of the filing in writing with the Custodian by the Customer
of exceptions or objections to any such statement within
sixty (60) days of the mailing thereof, the Customer shall
be deemed to have approved such statement; and in such case
or upon written approval of the Customer of any such
statement, such statement shall be presumed to be correct
for all purposes with respect to all information set forth
therein. In addition, the Customer understands that it has
the option to elect to participate in the Custodian's
electronic on-line service and communication system which
can provide the Customer, on a daily basis, with the ability
to view on-line or to print on hard copy (the "Electronic On-
Line System"): (I) all transactions involving the delivery
in and out of the Account on a free or payment basis; (ii)
payments of principal and interest or dividends; (iii)
pending transactions and fails; and (iv) schedules of
Securities in the Account plus the market values thereof.
To the extent that the electronic On-Line system shall
include market values of Securities in the Account, the
Customer hereby acknowledges that the Custodian now obtains
and will in the future obtain information on such values
from outside sources (presently Mellon Invest Data
Corporation and Telstat) which the Custodian deems to be
reliable, confirms that the Custodian does not verify nor
represent or warrant either the accuracy or the completeness
of any such information furnished or transacted by or
through the Electronic On-Line System, and the Custodian
shall be without liability in selecting and using such
sources and furnishing any information derived therefrom.
4. Subcustodians, Securities Systems and Foreign
Subcustodians.
(a) The Customer authorizes and instructs the Custodian to
hold the Property in the Account in custody accounts which
have been established by the Custodian with (a) one of its
U.S. branches or another U.S. bank or trust company or
branch thereof located in the U.S. (individually, a
"Subcustodian"), or (b) a U.S. securities depository or
clearing agency or system in which the Custodian or a
Subcustodian participates (individually, a "Securities
System"). The Custodian shall select in its sole discretion
the entity or entities in the custody of which any of the
Securities may be so maintained or with which any Cash may
be so deposited. The Custodian may, at any time in its
discretion, upon written notification to the Customer,
terminate the employment of any Subcustodian or Securities
System.
(b) In the event that the Customer invests in a Security
for which the principal trading market is a country other
than the United States or which is to be acquired or
presented for payment in a country other than the United
States, the Custodian will use reasonable effort to appoint
a subcustodian in the appropriate jurisdiction ("Foreign
Subcustodian"). The Foreign Subcustodian may be a banking
institution, securities depository or securities clearing
system organized under the laws of a country other than the
United States.
5. Holding of Securities, Nominees, etc. Securities in
the Account which are held by the Custodian or any
Subcustodian may be held by such entity in the name of the
Customer, in the Custodian's or Subcustodian's own name, in
the name of the Custodian's or Subcustodian's nominee, or in
bearer form. Securities which are held by a Subcustodian or
are eligible for deposit in a Securities System as provided
above may be maintained with the Subcustodian or the
Securities System in an account for the Custodian's or
Subcustodian's customers. The Custodian or Subcustodian, as
the case may be, may combine certificates representing
Securities held in the Account with certificates of the same
issue held by it as fiduciary or as a custodian. In the
event that any Securities in the name of the Custodian or
its nominee or held by one of its Subcustodians and
registered in the name of such Subcustodian or its nominee
are called for partial redemption by the issuer of such
Security, the Custodian may, subject tot he rules or
regulations pertaining to allocation of any securities
depository in which such Securities have been deposited,
allot, or cause to be allotted, the called portion to the
respective beneficial holders of such class of security in
any manner the Custodian deems to be fair and equitable.
<PAGE>
13. Notices. Except as otherwise provided in this Agreement, all
requests, demands or other communications between the parties or notices in
connection herewith (a) shall be in writing, hand delivered or sent by
registered mail, telex or facsimile addressed, if to the Customer:
GOLDEN AMERICAN LIFE INSURANCE COMPANY
1001 JEFFERSON STREET, SUITE 400
WILMINGTON, DE 19801
TELEPHONE #: 302-576-3418
FACSIMILE #: 302-576-3590
and if to the Custodian, to
BANKERS TRUST COMPANY
16 Wall Street, New York, New York 10005
Attention: Andrew Rabinovich
Fax: 212-618-3096
Telex:
Answerback:
or in the case to such other address as shall have been furnished to the
receiving party pursuant to the provisions hereof and (b) shall be deemed
effective when received, or, in the case of telex, when the proper number
and acknowledged by a proper answerback.
14. Security for Payment. To secure payment of all fees to Custodian
hereunder, including but not limited to amounts payable pursuant to the
indemnification provisions, the Customer hereby grants to Custodian a coninuing
security interest in and right of setoff against the Account, the Cash Account
and all Property held therein from time to time in the full amount of such
obligations. Should the Customer fail to pay promptly any amounts owed
hereunder, Custodian shall be entitled to use available Cash in the Cash
Account, and to dispose of Securities in the Account as is necessary. In any
such case and without limiting the foregoing, the Custodian shall be entitled
to take such other action(s) or exercise such other options, poewers and rights
as the Custodian now or hereafter has as a secured creditor under the New York
Uniform Commercial Code or any other applicable law.
15. Governing Law and Successors and Assigns. This Agreement shall be
governed by the law of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Custodian.
16. Publicity. Customer shall furnish to Custodian at its office
referred to in Section 13 above, prior to any distribution thereof, copies of
any material prepared for distribution to any persons who are not parties
hereto that refer in any way to Custodian. Customer shall not distribute or
permit the distribution of such materials if Custodian reasonably objects
in writing within ten (10) business days (or such other time as may be mutually
agreed) after receipt thereof. The provisions of this Section shall survive
the termination of this Agreement.
17. Submissions to Jurisdiction. To the extent, if any, to which the
Customer nor any of its respective properties may be deemed to have or hereafter
to acquire immunity, on the ground of soveriegnty or otherwise, from any
judicial process or proceeding to enforce this Agreement or to collect amounts
due hereunder (including, without limitation, attachment proceedinngs to
judgement or in aid of execution) in any jurisdiction, the Customer hereby
waives such immunity and aggrees not to claim the same. Any suit, in action
or proceeding arising out of this Agreement may be instituted
EXHIBIT 3(a)
DISTRIBUTION AGREEMENT
AGREEMENT dated December 27, 1988, by and between Golden American Life
Insurance Company, ("Golden American") a Minnesota corporation, on its own
behalf and on behalf of the Western Capital Specialty Managers Separate
Account B ("Account") and Directed Services, Inc., ("DSI"), a New York
corporation wholly owned by Golden Financial Group ("GFG"), a Delaware
corporation.
WHEREAS, Golden American and GFG entered into an agreement effective
____________________, 1988 (the "Golden American-GFG Agreement"), pursuant to
which Golden American may market Deferred Variable Annuity and Variable
Annuity Certain Contracts ("Annuity Contracts") designed by GFG; and
WHEREAS, the Account is a separate account established and maintained by
Golden American pursuant to the laws of the State of Minnesota for variable
annuity contracts issued by Golden American under which income, gains, and
losses, whether or not realized, from assets allocated to such Account, are
credited to or charged against such Account without regard to other income,
gains or losses of Golden American; and
WHEREAS, Golden American proposes to issue and sell Annuity Contract
through the Account to suitable purchasers; and
WHEREAS, DSI is duly registered as a broker-dealer under the Securities
Exchange Act of 1934 ("1934 Act") and is a member of the National Association
of Securities Dealers, Inc. ("NASD"); and
WHEREAS, Golden American and DSI desire to enter into an agreement
pursuant to which DSI will act as a principal underwriter for the sale of the
Annuity Contracts and may distribute the Annuity Contracts through one or more
organizations as set forth in Section 2. below.
NOW, THEREFORE, GOLDEN AMERICAN AND DSI HEREBY AGREE AS FOLLOWS:
1. TERM.
This Agreement shall remain in force until it is terminated in accordance
with the provisions of paragraph 13.
2. PRINCIPAL UNDERWRITER.
Golden American hereby appoints DSI and DSI accepts such appointment,
during the term of this Agreement, subject to any registration
requirements of The Securities Act of 1933 ("1933 Act"), The Investment
Company Act of 1940 ("1940 Act"), and the provisions of the 1934 Act, to
be a distributor and principal underwriter of the Annuity Contracts
issued though the Account. DSI shall offer the Annuity Contracts for
sale and distribution at premium rates to be set by Golden American and
GFG. Annuity Contracts may be sold only by persons who are duly licensed
annuity agents appointed by Golden American and NASD registered
representatives as set forth in Section 3 below. Golden American hereby
appoints DSI as its agent for the sale of Annuity Contracts in such
jurisdictions as Golden American is properly licensed to sell Annuity
Contracts.
3. SALE AGREEMENTS.
DSI is hereby authorized to enter into separate written agreements,
("Sales Agreements"), on such terms and conditions as DSI may determine
not to be inconsistent
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with this Agreement, with broker/dealers which
agree to participate in the distribution of and to use their best efforts
to solicit applications for Annuity Contracts. Such broker/dealers and
their agents or representatives soliciting applications for Annuity
Contracts shall be duly and appropriately licensed, registered or
otherwise qualified for the sale of Annuity Contracts under the insurance
laws and any applicable securities laws of each state or other
jurisdiction in which the Annuity Contracts may be lawfully sold and in
which Golden American is licensed to sell Annuity Contracts. Each such
broker/dealer shall be both registered as a broker-dealer under the 1934
Act and a member of the NASD, or if not so registered or not such a
member, then the agents and representatives of such organization
soliciting applications for Annuity Contracts shall be agents and
registered representatives of a registered broker/dealer and NASD member
which is the parent or other affiliate of such organization and which
maintains full responsibility for the training, supervision, and control
of the agents and representatives selling Annuity Contracts.
DSI shall have the responsibility for the supervision of all such
broker/dealers to the extent required by law and shall assume any legal
responsibilities of Golden American for the acts, commissions or
defalcations of any such broker/dealers. Applications materials for
Annuity Contracts solicited by such broker/dealers through their agents
or representatives shall be forwarded to DSI. All payments for Annuity
Contracts shall be remitted promptly by such broker/dealers directly to
Golden American.
If held at any time by DSI or a broker/dealer, such payments shall be
held in a fiduciary capacity as agent for Golden American and shall be
remitted promptly to Golden American. All such payments, whether by
check, money order, or wire order, shall be the property of Golden
American. Anything in this Distribution Agreement to the contrary
notwithstanding, Golden American shall retain the rights to control the
sale of Annuity Contracts and to appoint and discharge annuity agents for
the sale of Annuity Contracts. DSI shall be held to the exercise of
reasonable care in carrying out the provisions of this Distribution
Agreement.
4. ANNUITY AGENTS.
DSI is authorized to appoint the broker/dealer described in paragraph 3.
above as agents of Golden American for the sale of Annuity Contracts.
Golden American will undertake to appoint such agents authorized to
represent Golden American in the appropriate states or jurisdictions;
provided that Golden American reserves the right to refuse to appoint any
proposed agent, or once appointed to terminate the same without notice.
5. SUITABILITY.
Golden American wishes to ensure that the Annuity Contracts distributed
by DSI will be issued to purchasers for whom the Annuity Contracts shall
be suitable. DSI shall take reasonable steps to ensure that the various
agents appointed by it to sell Annuity Contracts shall not make
recommendations to an applicant to purchase Annuity Contracts in the
absence of reasonable grounds to believe that the purchase of Annuity
Contracts is suitable for such applicant. While not limited to the
following, a determination of suitability shall be based on information
furnished to an agent after reasonable inquiry concerning the applicant's
insurance and investment objectives and financial situation and needs.
6. SALES MATERIALS.
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The responsibility of the parties hereto for consulting with respect to
the design and the drafting and legal review and filing of sales
materials, and for the preparation of sales proposals related to the sale
of Annuity Contracts shall be as the parties hereto agree in writing.
DSI shall ensure, in its Sales Agreements, that organizations appointed
by it, and registered representatives of such organizations, shall not
use, develop or distribute any sales materials which have not been
approved by GFG and Golden American.
7. REPORTS.
DSI shall have the responsibility for, with respect to agents appointed
by it, maintaining the records of agents licensed, registered and
otherwise qualified to sell Annuity Contracts, and for furnishing
periodic reports to Golden American as to the sale of Annuity Contracts
made pursuant to this Agreement.
8. RECORDS.
DSI shall maintain and preserve for the periods prescribed by law or
other agreement, such accounts, books, and other documents as are
required of it by applicable laws and regulations. The books, accounts
and records of Golden American, the Account and DSI as to all
transactions hereunder shall be maintained so as to clearly and
accurately disclose the nature and details of the transactions, including
such accounting information as necessary to support the reasonableness of
the amounts to be paid by Golden American hereunder.
9. COMPENSATION.
Golden American shall pay DSI the compensation due it as set forth in the
attached Exhibit, as such Exhibit may from time to time be amended.
10. INDEPENDENT CONTRACTOR.
DSI shall act as an independent contractor and nothing herein contained
shall constitute DSI or its agents or employees as employees of Golden
American in connection with the sale of Annuity Contracts.
11. INVESTIGATION AND PROCEEDINGS.
(a) DSI and Golden American agree to cooperate fully in insurance
regulatory investigations or proceedings or judicial proceedings
arising in connection with the offering, sale or distribution of
Annuity Contracts distributed under this Agreement. DSI and Golden
American further agree to cooperate fully in any securities
regulatory investigation or proceeding or judicial proceeding with
respect to Golden American, DSI, their affiliates and their agents
or representatives to the extent that such investigation or
proceedings is in connection with the Annuity Contracts offered,
sold or distributed under this Agreement. Without limiting the
forgoing:
(i) DSI will be notified promptly of any customer
complaint or notice of any regulatory investigation or
proceeding or judicial proceeding received by Golden
American with respect to DSI or any agent or representative
or which may affect Golden American's issuance of Annuity
Contracts marketed under this Agreement.
(ii) DSI will promptly notify Golden American of any
customer complaint or
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notice of any regulatory investigation
or proceeding received by DSI or its affiliates with respect
to DSI or any agent or representative in connection with any
Annuity Contracts distributed under this Agreement or any
activity in connection with Annuity Contracts.
(b) In the case of a substantive customer complaint, DSI and Golden
American will cooperate in investigating such complaint and any
response to such complaint will be sent to the other party to the
Agreement for approval not less than five business days prior to its
being sent to the customer or regulatory authority, except that if a
more prompt response is required, the proposed response shall be
communicated by telephone or telegraph.
12. INDEMNIFICATION.
(a) Golden American agrees to indemnify and hold harmless DSI and
its affiliates and each officer and director thereof against any
losses, claims, damages or liabilities, joint or several, to which
DSI or its affiliates or such officer or director may become
subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue
statement of a material fact, required to be stated therein or
necessary to make the statements therein not misleading, contained
(i) in any prospectus, or any amendment thereof, or
(ii) in any blue-sky application or other document
executed by Golden American specifically for the purpose of
qualifying Annuity Contracts for sale under the securities
laws of any jurisdiction.
Golden American will reimburse DSI and each officer or director,
for any legal or other expenses reasonably incurred by DSI or such
officer or director in connection with investigating or defending
any such loss, claim, damage, liability or action; provided
that Golden American will not be liable in any such case to the
extent that such loss, claim, damage or liability arises out of, or
is based upon, an untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity
with information (including, without limitation, negative responses
to inquiries) furnished to Golden American by or on behalf of DSI
specifically for use in the preparation of any prospectus or ant
amendment thereof or any such blue-sky application or any amendment
thereof or supplement thereto.
(b) DSI agrees to indemnify and hold harmless Golden American and
its directors, each of its officers who has signed the registration
statement and each person, if any, who controls Golden American
within the meaning of the 1933 Act or the 1934 Act, against any
losses, claims, damages or liabilities to which Golden American and
any such director or officer or controlling person may become
subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon:
(i) Any untrue statement or alleged untrue statement
of a material fact or omission or alleged omission to state
a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not misleading,
contained (a) in any prospectus or any amendments thereof,
or, (b) in
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any blue-sky application, in each case to the
extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with information
(including without limitation, negative responses to
inquiries) furnished to Golden American by DSI specifically
for use in the preparation of any prospectus or any
amendments thereof or any such blue-sky application or any
such amendment thereof or supplement thereto; or
(ii) Any unauthorized use of sales materials or any
verbal or written misrepresentations or any unlawful sales
practices concerning Annuity Contracts by DSI; or
(iii) Claims by agents or representatives or employees of DSI for
commissions, service fees, expense allowances or other
compensation or remuneration of any type.
DSI will reimburse Golden American and any
director or officer or controlling person for any legal or
other expenses reasonably incurred by Golden American, such
director or controlling person in connection with
investigating or defending any such loss, claim, damage,
liability or action. This indemnity agreement will be in
addition to any liability which DSI may otherwise have.
(c) Promptly after receipt by a party entitled to indemnification
("indemnified party") under this paragraph 12 of notice of the
commencement of any action, if a claim in respect thereof is to be
made against any person obligated to provide indemnification
under this paragraph 12 ("indemnifying party"), such indemnified
party will notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying
party will not relieve it from any liability under this paragraph
12, except to the extent that the omission results in a failure of
actual notice to the indemnifying party and such indemnifying party
is damaged solely as a result of the failure to give such notice.
In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate therein, and
to the extent that it may wish, to assume the defense thereof, with
separate counsel satisfactory to the indemnified party. Such
participation shall not relieve such indemnifying party of the
obligation to reimburse the indemnified party for reasonable legal
and other expenses incurred by such indemnified party in defending
himself, except for such expenses incurred after the indemnifying
party has deposited funds sufficient to the effect the settlement,
with prejudice, of the claim in respect of which indemnity is
sought. Any such indemnifying party shall not be liable to any such
indemnified party on account of any settlement of any claim or
action effected without the consent of such indemnifying party.
The indemnity agreements contained in this paragraph 12 shall
remain operative and in full force and effect, regardless of:
(i) any investigation made by or on behalf of DSI or
any officer or director thereof or by or on behalf of Golden
American;
(ii) delivery of any Annuity Contracts and payments
therefore; and
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(iii) any termination of this Agreement.
A successor by law of DSI or any of the parties to this
Agreement, as the case may be, shall be entitled to the benefits of
the indemnity agreement contained in this paragraph 12.
13. TERMINATION.
a. This Agreement may be terminated at any time by mutual consent
of the parties.
b. Either party may terminate of the other materially breaches any
of the terms of this Agreement and fails to cure the breach within
sixty days of notification by the other party of such breach.
c. This Agreement shall terminate automatically upon the
termination of the Golden American-GFG Agreement.
d. Upon termination of this Agreement all authorizations, rights
and obligations shall cease except;
(i) the obligation to settle accounts hereunder,
including commissions for Annuity Contracts in effect at the
time of termination;
(ii) the agreements contained in paragraph 11 hereof; and
(iii) the indemnity set for in paragraph 12 hereof.
14. REGULATION.
This Agreement shall be subject to the provisions of the 1940 Act and the
1934 Act and the rules, regulations, and rulings thereunder and of the
NASD, from time to time in effect, including such exemptions from the
1940 Act as the SEC may grant, and the terms thereof shall be interpreted
and construed in accordance therewith.
DSI shall submit to all regulatory and administrative bodies having
jurisdiction over the operations of Golden American or the Account,
present or future, any information, reports or other material which any
such body by reason of this Agreement may request or require pursuant to
applicable laws or regulations.
15. SEVERABILITY.
If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
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16. GENERAL.
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of New York.
A. Force Majeure
Either party may be excused for delay or failure to perform under this
Agreement if such delay or failure is due to the direct or indirect
result of acts of God or government, war or national emergency, or for
any cause beyond the reasonable control of either party.
B. Entire Agreement
This Agreement and any attachments hereto and the material incorporated
herein by reference set forth the entire agreement between the parties,
and supercede all prior representations, agreements and understandings,
written or oral. Changes in the Agreement may be made only in a writing
signed by both the parties hereto.
C. Notices
All notices or other communications under this Agreement shall be in
writing and, unless otherwise specifically provided for herein, shall be
deemed given when addressed
(a) if to Golden American:
Mr. Fred H. Davidson
Golden American Life Insurance Company
909 Third Avenue
New York, NY 10022
(b) if to DSI:
Mr. James G. Kaiser
Directed Services, Inc.
909 Third Avenue
New York, NY 10022
D. Successors, Assigns
This Agreement shall be binding upon and shall insure to the benefit of
the parties and their respective successors and assigns. Neither this
Agreement nor any right hereunder may be assigned without the written
consent of the other parties.
E. Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
F. Severability
If any term or provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of terms
and provisions of this
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Agreement shall remain in full force and effect
and shall not be affected or impaired thereby.
G. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall constitute an original and all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Attest: GOLDEN AMERICAN LIFE INSURANCE COMPANY
/s/Bernard R. Beckerlegge /s/Fred H. Davidson
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Bernard R. Beckerlegge Fred H. Davidson
Secretary President
Attest: DIRECTED SERVICES, INC.
/s/Bernard R. Beckerlegge /s/James G. Kaiser
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Bernard R. Beckerlegge James G. Kaiser
Secretary President
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EXHIBIT 3(b)
DEALERS AGREEMENT
AGREEMENT dated __________, by and between Directed
Services, Inc. ("Distributor"), a New York corporation and
__________ ("Broker/Dealer"), a __________
(corporation)(partnership).
WITNESSETH
In consideration of the mutual promises contained herein,
the parties hereto agree as follows:
A. DEFINITIONS
1. Account - The Western Capital Specialty Managers Separate
Account B ("Account") established and maintained by Golden
American Life Insurance Company, ("Golden American"), a
Minnesota corporation, pursuant to the laws of Minnesota, as
applicable, to fund the benefits under annuity contracts
offered through the Account.
2. Annuity Contracts - Deferred Variable Annuity and Variable
Annuity Certain contract which may be issued by Golden
American and for which Distributor has been appointed
principal under writer pursuant to a Distribution Agreement,
a copy of which has been furnished to Broker/Dealer.
3. Prospectus - The Prospectus relating to the Annuity
Contracts and the Account, including financial statements
and all exhibits.
4. 1933 Act - The Securities Act of 1933, as amended.
5. 1934 Act - The Securities Exchange Act of 1934, as amended.
6. SEC - The Securities and Exchange Commission.
B. AGREEMENTS OF DISTRIBUTOR
1. Pursuant to the authority delegated to it by Golden
American, Distributor hereby authorizes Broker/Dealer during
the term of this Agreement to solicit application for the
Annuity Contracts from eligible persons provided that
Broker/Dealer has been notified by Distributor that the
Annuity Contracts are qualified for sale under all
applicable securities and insurance laws. In connection
with the solicitation of applications for Annuity Contracts,
Broker/Dealer is hereby authorized to offer riders that are
available with Annuity Contracts in accordance with
instructions furnished by Distributor or Golden American.
2. Distributor, during the term of this Agreement, will notify
Broker/Dealer of the issuance by the SEC of any stop order
with respect to the offering of Annuity Contracts and of any
other action or circumstance that may prevent the lawful
sale of Annuity Contracts in any state or jurisdiction.
3. During the term of this Agreement, Distributor shall advise
Broker/Dealer of any amendment to the Prospectus or any
amendment or supplement thereto.
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C. AGREEMENTS OF BROKER/DEALER
1. It is understood and agreed that Broker/Dealer is a
registered Broker/Dealer under the 1934 Act and a member of
the National Association of Securities Dealers, Inc. and
that the agents or representatives of Broker/Dealer who will
be soliciting applications for Annuity Contracts also will
be duly registered representatives of Broker/Dealer.
2. Commencing at such times as Distributor and Broker/Dealer
shall agree upon, Broker/Dealer agrees to use its best
efforts to find purchasers for the Annuity Contracts
acceptable to Golden American. In meeting its obligation to
use its best efforts to solicit applications for the Annuity
Contracts, Broker/Dealer shall, during the terms of this
Agreement, engage in the following activities:
a. Continuously utilize only such training, sales and
other materials as have been approved by Golden
American;
b. Establish and implement reasonable procedures for
periodic inspections and supervision of sales practices
of its agents or representatives and submit periodic
reports to Distributor as may be requested on the
results of such inspections and the compliance with
such procedures.
c. Broker/Dealer shall take reasonable steps to ensure
that the various representatives appointed by
Broker/Dealer shall not make recommendations to an
applicant to purchase an Annuity Contract in the
absence of reasonable grounds to believe that the
purchase of an Annuity Contract is suitable for such
applicant. While not limited to the following, a
determination of suitability shall be based on
information furnished to Golden American after
reasonable inquiry concerning the applicant's insurance
and investment objectives and financial situation and
needs.
3. All payments for an Annuity Contract collected by agents or
representatives of Broker/Dealer shall be held at all times
ina fiduciary capacity and shall be remitted promptly in
full together with such applications, forms and other
required documentation to an office of Golden American
designated by Distributor. Checks or money orders in
payment of premiums shall be drawn to the order of Golden
American. Broker/Dealer acknowledges that Golden American
retains the ultimate right to control the sale of Annuity
Contracts and that the Distributor or Golden American shall
have the unconditional right to reject, in whole or in part,
any application for an Annuity Contract. In the event
Golden American or Distributor rejects an application,
Golden American immediately will return all payments
directly to the purchasers and Broker/Dealer will be
notified of such action.
4. Broker/Dealer shall act as an independent contractor, and
nothing herein contained shall constitute Broker/Dealer, its
agents or representatives, or any employees thereof as
employees of Golden American or Distributor in connection
with the solicitation of applications for Annuity Contracts.
Broker/Dealer, its agents or representative, and its
employees shall not hold themselves out to be employees of
Golden American or Distributor in this connection or in any
dealings with respect to Annuity Contracts.
5. Broker/Dealer agrees that it will not develop, or use any
sales, training, explanatory or other materials in
connection with the solicitation of applications for Annuity
Contracts hereunder without the prior written consent of
Distributor of Golden American.
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6. Solicitation and other activities by Broker/Dealer shall be
undertaken only in accordance with the applicable laws and
regulations. No agent or representative of Broker/Dealer
shall solicit applications for Annuity Contracts until duly
licensed and appointed by Golden American as an annuity and
variable contract Broker/Dealer or agent of Golden American
in the appropriate states or other jurisdictions.
Broker/Dealer shall ensure that such agents or
representative fulfill any training requirements necessary
to be licensed. Broker/Dealer understands and acknowledges
that neither it nor its agents or representative is
authorized by Distributor or Golden American to give any
information or make representation in connection with this
Agreement or the offering of an Annuity Contract other than
those contained in the Prospectus or other solicitation
material authorized in writing by Distributor or Golden
American.
7. Broker/Dealer shall not have authority on behalf of
Distributor or Golden American to make, alter or discharge
any form with respect to an Annuity Contract; waive any
forfeiture, extend the time of paying any premium; or
receive any monies or premiums due to Golden American,
except as set forth in Section C.3. of this Agreement.
8. Broker/Dealer shall have the responsibility for maintaining
all records of pertaining to its representatives, who are
licensed, registered and otherwise qualified to sell Annuity
Contracts. Broker/Dealer shall maintain such other records
as are required of it by applicable laws and regulations.
The books, accounts and records of Broker/Dealer relating to
the sale of Annuity Contracts shall be maintained so as to
clearly and accurately disclose the nature and details of
the transactions. All records maintained by Broker/Dealer
in connection with this Agreement shall, upon request,
become the property of Golden American and shall, in any
event, be delivered to Golden American upon termination of
this Agreement, free from any claims or retention of rights
by Broker/Dealer. Nothing in this Section C.8. shall be
interpreted to prevent Broker/Dealer from retaining copies
of any such records which Broker/Dealer in its discretion,
deems necessary or desirable to keep. The Broker/Dealer
shall keep confidential all information obtained pursuant to
this Agreement and may disclose such information only if
Golden American has authorized such disclosure, or its
disclosure is expressly required by applicant, federal or
state regulatory authorities. Broker/Dealer shall promptly
notify Distributor of any such demand or request, and shall
afford Distributor and Golden American the opportunity to
contest the same before providing records to any regulatory
authorities.
D. COMPENSATION
1. Pursuant to the Distribution Agreement between the
Distributor and Golden American, Distributor shall cause
Golden American to arrange for the payment of commissions to
Broker/Dealer as compensation for the sale of Annuity
Contracts sold by an agent or representative of
Broker/Dealer. The amount of such compensation shall be
based on a schedule to be determined by Golden American.
Golden American should identify to Broker/Dealer with each
such payment the name of the agent or representative of
Broker/Dealer who solicited the Annuity Contract covered by
the payment.
2. Neither Broker/Dealer nor any of its agents or
representatives shall have any right to withhold or deduct
any part of any premium it shall receive for purposes of
payment of commission or otherwise. Neither Broker/Dealer
nor any of its agents or representatives shall have an
interest in any compensation paid by Golden American to
Distributor, now or hereafter, in connection with the sale
of Annuity Contracts hereunder.
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E. COMPLAINTS AND INVESTIGATIONS
Broker/Dealer and Distributor jointly agree to cooperate
fully in any insurance regulatory investigation or
proceeding or judicial proceeding arising in connection with
the Annuity Contracts marketed under this Agreement.
Broker/Dealer and Distributor further agree to cooperate
fully in any securities regulatory investigation or
proceeding or judicial proceeding with respect to
Broker/Dealer, Distributor, their affiliates and their
agents or representatives to the extent that such
investigation o proceeding is in connection with an Annuity
Contract marketed under this Agreement. Broker/Dealer shall
furnish applicable federal and state regulatory authorities
with any information or reports in connection with its
services under this Agreement which such authorities may
request in order to ascertain whether Golden American's
operations are being conducted in a manner consistent with
any applicable law ore regulation.
F. TERM OF AGREEMENT
1. This Agreement shall continue in force for one year from its
effective date and thereafter shall automatically be renewed
every year for a further one year period; provided that
either party may unilaterally terminate this Agreement upon
thirty (30) days written notice to the other party of its
intention to do so.
2. Upon termination of this agreement, all authorizations,
rights and obligations shall cease except (a) the agreements
contained in Section C.8. and Section E hereof; (b) the
indemnity set for the in Section G hereof; and (c) the
obligations to settle accounts hereunder, including
commission payments for Annuity Contracts in effect at the
time of termination or issued pursuant to applications
received by Broker/Dealer prior to termination.
G. INDEMNITY
1. Broker/Dealer shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement.
2. Distributor agrees to indemnify and hold harmless
Broker/Dealer and each officer or director of Broker/Dealer
against any losses, claims, damages or liabilities, joint or
several, to which Broker/Dealer or such officer or director
may become subject, under the 1933 Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material
fact, required to be stated therein or necessary to make the
statements therein not misleading, contained in the
Prospectus or any amendment thereof provided by Golden
American or by the Distributor.
3. Broker/Dealer agrees to indemnify and hold harmless Golden
American and Distributor and each of their current and
former directors and officers and each person if any, who
controls or has controlled Golden American or Distributor
within the meaning of the 1933 Act or the 1934 Act, against
any losses, claims or damages or liabilities to which Golden
American or Distributor and any such director or officer or
controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or
are based upon:
-4-
<PAGE>
<PAGE>
a. Any verbal or written misrepresentations or any
unlawful sales practices concerning Annuity Contracts
by Broker/Dealer;
b. Claims by agents or representatives or employees of
Broker/Dealer for commissions, service fees,
development allowances or other compensation or
remuneration of any type; or
c. The failure of Broker/Dealer, its officers, employees,
or agents to comply with the provisions of this
Agreement.
Broker/Dealer will reimburse Golden American and
Distributor and any director or officer or controlling
person of either for any legal or other expenses
reasonably incurred by Golden American, Distributor, or
such director officer or controlling person in
connection with investigating or defending any such
loss, claims, damage liability or action. This
indemnity agreement will be in addition to any
liability which Broker/Dealer may otherwise have.
H. ASSIGNABILITY
This Agreement shall not be assigned by either party without
the written consent of the other, and any assignment without
such written consent shall be void.
I. GOVERNING LAW
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
Attest: DIRECTED SERVICES, INC.
____________________ ______________________________
Attest: BROKER/DEALER
____________________ ______________________________
Secretary President
-5-
EXHIBIT 3(c)
ORGANIZATIONAL AGREEMENT AMONG
WESTERN CAPITAL SPECIALTY MANAGERS TRUST
and
WESTERN CAPITAL VARIABLE ADVISORS CORP.
and
GOLDEN AMERICAN LIFE INSURANCE COMPANY
Agreement dated as of December 28, 1988, (the "Agreement"),
by and among Western Capital Specialty Managers Trust ("Trust"),
Western Capital Variable Advisors Corp. ("Western Capital") and
Golden American Life Insurance Company ("Golden American"), on
its own behalf and on behalf of any separate accounts of Golden
American shown on Exhibit A hereto (the "Variable Accounts").
WHEREAS, the Trust is registered as an open-end management
investment company under the Investment Company Act of 1940
("ICA"), as amended, and shares of the portfolios of the Trust
are registered under the Securities Act of 1933 ("Securities
Act") as amended, and the Trust will initially consist of seven
separate series; and
WHEREAS, shares of the series of the Trust shown on Exhibit
B ("Series") will be sold to the Variable Accounts to fund
benefits under variable life insurance policies which may
include variable life insurance policies classified as modified
endowment contracts, and variable annuity contracts (all of such
life insurance policies and annuity contracts referred to
collectively as the "Policies") to be issued by Golden American
through the Variable Accounts after the Trust's Registration
Statement is declared effective by the Securities and Exchange
Commission ("SEC"); and
WHEREAS, Western Capital will act as the Trust's Manager,
pursuant to a Management Agreement, a copy of which is attached
hereto as Exhibit C, to be entered into by Western Capital and
the Trust; and
WHEREAS, Western Capital is, and for the duration of this
Agreement, will remain if required by applicable law, duly
registered as an investment adviser under the Investment
Advisers Act of 1940.
NOW, THEREFORE, in consideration of the premises and the
mutual promises and covenants hereinafter set forth, the parties
hereby agree as follows:
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2
1. Western Capital and the Trust will take all such actions
as are necessary to permit the sale of the shares of
each Series to the Variable Accounts including, but not
limited to, organization of the Trust, as a
Massachusetts business Trust and registration of the
Trust under the ICA and registration of the shares of
each Series under the Securities Act. Western Capital
and the Trust shall amend the Registration Statement for
the Trust from time to time as required in order to
effect the continuous offering of shares of each Series
of the Trust. The Trust's responsibility to make shares
of the Series available to the Variable Accounts shall
be governed by the Settlement Agreement among the Trust,
the Variable Accounts and Western Capital; Financial
Group.
2. Western Capital will pay, on behalf of the Trust, all
expenses of the Trust incurred on or prior to the
commencement of operations of the Trust, including, but
not limited to, legal fees, auditing fees, SEC
registration fees, and organizational fees, that are
determined to be "organizational costs" of the Trust
(the "Organizational Costs").
3. Such Organizational Costs will be recovered by Western
Capital from the Trust over a period not less than five
years.
4. Golden American agrees that prior to the effective date
of the Registration Statement for the Trust, Golden
American or an affiliate shall invest $100,000 in the
Trust subject to the understanding that at such time
Golden American or its affiliate has no current
intention of reselling the shares so acquired. All
redemptions by Golden American or its affiliate of any
part of its investment in the Trust will be effected in
accordance with any applicable legal standards.
5. With respect to any of the Policies funded by the
Variable Accounts, Golden American agrees as follows:
a. That any prospectus offering a life insurance
contract funded by one of the Variable Accounts where
it is reasonable probable that such contract would be a
"modified endowment contract," as that term is defined
in Section 7702A of the Internal Revenue Code of 1986,
as amended (the "Code"), will identify such a contract
as a modified endowment contract (or policy); and
b. That Golden American will take all necessary steps
to ensure that any contract (or policy), including life
insurance policies classified as modified
endowment
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<PAGE>
3
contracts, and funded by one of the Variable Accounts,
will qualify as a life insurance contract under Section
7702 of the Code, and Golden American will immediately
notify the Trust and Western Capital upon having a
reasonable basis for believing that the Policies have
ceased to be so treated or that they might not be so
treated in the future; and
c. That Golden American will take all necessary steps
to ensure that any contract described n its prospectus
as a annuity and funded by one of the Variable Accounts
will qualify as an annuity under Section 72 of the
Code.
6. Golden American will take all necessary steps to ensure
that the Policies will be registered under the
Securities Act during the term of this Agreement and
that the Policies will be issued in compliance with all
applicable federal and state laws.
Golden American shall amend the Registration Statements
respecting the Policies from time to time as required to
effect the continuous offerings of the Policies. Golden
American represents and warrants that it is an insurance
company duly organized and in good standing under
Minnesota law, that it has established each Variable
Account shown on Exhibit A as a duly organized, validly
existing segregated asset account, established by
resolutions of the Board of Directors of Golden
American; and that the Variable Accounts are, and will
be during the term if this Agreement, duly registered
unit investment Trusts under the ICA to serve as
segregated investment accounts for the Policies. Golden
American will pay all expenses in connection with
organizing the Variable Accounts, developing the
Policies and preparing and filing with the SEC
Registration Statements for the Policies, obtaining
authorizations to offer the Policies in the various
states and other initial expenses associated with the
Policies.
7. Golden American shall vote shares of each Series of the
Trust held in a Variable Account or a division thereof
at regular and special meetings of the Trust in
accordance with instructions timely received by Golden
American (or its designated agent) from owners of
Policies funded by such Variable Accounts or division
thereof having a voting interest in the Series. Golden
American shall vote shares of a Series of the Trust held
in a Variable Account or a division thereof that are
attributable to the Policies as to which no timely
instructions are received, as well as shares not
attributable to the Policies and owned beneficially by
Golden American in the same proportion as the votes cast
by owners of the Policies funded by that Variable
Account or division thereof having a voting interest in
the Series from whom instructions have been timely
received. Golden American shall vote shares of each
Series of the Trust held in its general account, if any,
in the same proportion as the votes cast with respect to
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<PAGE>
4
shares of the Series held in all Variable Accounts of
Golden American or divisions thereof, in the aggregate.
In the event of a shareholder meeting, Golden American
agrees to provide the Trust and/or Western Capital with
a list of the names and addresses of owners of the
Policies within five (5) days of receipt of a written
request for such list. The party requesting such list
shall bear the reasonable cost incurred by Golden
American in preparing and providing such list, which
shall be paid upon delivery of the list. Golden
American further agrees to provide notice to the Trust
and to Western Capital if Golden American or an
affiliate has reason to know about a meeting of owners
of the Policies or shares of the Trust. In the event
that a vote of shareholders of the Trust is held prior
to the sale of any Policies, Golden American or its
affiliate will vote shares of the Trust acquired with
its investment of $100,000 an any other amounts invested
for initial capitalization as instructed by Western
Capital.
8. Western Capital and the Trust will use reasonable
efforts to manage each Series of the Trust so that each
such Series will qualify as a "Regulated Investment
Company" under Subchapter M of the Code and will use
reasonable efforts to maintain such qualification and
will notify Golden American immediately upon having a
reasonable basis for believing that the Trust (or any
Series thereof) has ceased to so qualify or might not so
qualify in the future. Golden American shall also
notify the Trust and Western Capital immediately upon
having a reasonable basis for believing that the Trust
(or any Series thereof) has ceased to qualify as a
Regulated Investment Company or might not so qualify in
the future, PROVIDED HOWEVER, that Golden American's
agreement to notify Western Capital and the Trust with
respect to any matter contained in this paragraph will
in no way alleviate or relive Western Capital's and the
Trust's responsibility under this Section 8.
9. Western Capital and the Trust will take all necessary
steps to ensure that the Trust (and each Series thereof)
will comply with the diversification provisions of
Section 817(h) of the Code and the regulations issued
thereunder relating to the diversification requirements
for variable life insurance policies and variable
annuity contracts and any prospective amendments or
other modifications to Section 817 or regulations
<PAGE>
<PAGE>
5
thereunder and will notify Golden American immediately
upon having a reasonable basis for believing that the
Trust (or any Series thereof) has ceased to comply.
Golden American shall notify the Trust and Western
Capital immediately upon having a reasonable basis for
believing that the Trust (or any Series thereof) has
ceased to comply with the diversification provisions of
Section 817(h) of the Code or the regulations issued
thereunder and any prospective amendments or other
modifications to Section 817 or regulations thereunder,
PROVIDED HOWEVER, that Golden American's agreement to
notify Western Capital and the Trust with respect to the
above matter contained in this Section 9 will in no way
alleviate or relieve Western Capital's and the Trust's
responsibility under this Section 9.
Western Capital or the Trust or both of them shall be
entitled to receive and act upon advice of counsel to
Western Capital or the Trust to meet the requirements
specified in Sections 8 and 9 and shall be without
liability for any action taken or a thing done (or for
any omission to act) in reliance upon such advice.
Golden American shall promptly notify the Trust and
Western Capital of any pertinent changes, modifications
to, or interpretations of Section 817(h) of the Code and
the regulations issued thereunder and any successor
thereto, or any prospective amendments or other
modifications to Section 817 or regulations thereunder.
For purposes of monitoring whether the Trust and the
Variable Accounts are eligible for the start-up period
during which the Variable Accounts shall be considered
to be adequately diversified under paragraph (c)(2)(i)
of Tres. Reg. SS 1.817-5T (or any successor thereof),
Golden American shall monitor amounts allocated to the
Variable Accounts or (divisions thereof) ("Allocated
Amounts") by owners of Policies funded by the Variable
Accounts (or divisions thereof) during the first year
after any amount received under one of the Policies is
first allocated to any Variable Account (or division
thereof) ("First Year") to ensure that no more than
thirty (30) percent of the amount allocated to any
Variable Account (or division thereof), as of any date
during such year, is attributable to premium and
investment income that was received more than one year
before such date (the percentage of such Allocated
Amount being referred to hereafter as the "Old Money
Percentage"). For this purpose, premium income and
investment income shall be treated as received as
provided in Tres. Reg. SS 1.817-5(T) (or any
successor
<PAGE>
<PAGE>
6
thereto) or other applicable law and determination under
this provision shall be made consistent with Tres. Reg.
SS 1.817-5T(c)(2) or any successor thereto.
Golden American will notify Western Capital immediately
in the event that the Old Money Percentage equals or
exceeds twenty (20) percent as of any date during the
First Year, determined as prescribed above; and in the
event that the Old Money Percentage equals or exceeds
thirty (30) percent during the First Year, shall notify
Western Capital and the Trust immediately and advise
such parties that the Variable Accounts shall no longer
be considered adequately diversified during the First
Year under paragraph (c)(2)(i) of Regulation 1.817-5T.
Golden American agrees that Western Capital and the
Trust shall not be liable for failure to meet their
responsibilities under this Section 9 during the First
Year if Golden American fails to comply with the
monitoring and notice responsibilities specified in this
Section 9.
10. The Trust and Western Capital agree that separate
accounts of Golden American and of other insurance
companies acceptable to the Trust and Western Capital
will have the right to purchase and sell shares of the
Series of the Trust. The Variable Accounts agree that
they will invest only in shares of the Trust.
11. Western Capital and the Trust will provide Golden
American and its auditors with any information it may
reasonable request, and with access to such books and
records that relate to the ordinary operating expenses
of the Trust.
12. The Trust will not sell or permit the sale of shares of
the Trust to separate accounts of life insurance
companies that are not affiliates of Golden American
without first obtaining an appropriate exemptive order
from the SEC, unless the rules under the ICA are amended
to permit "shared funding" without first obtaining
individual exemptive relief. With respect to serving as
the common investment vehicle for (1) both variable
annuity contracts and variable life insurance policies,
or (2) for variable life insurance policies of one
insurer and variable life insurance policies and/or
variable annuity contracts of another insurer, the
parties agree to comply with any conditions imposed
under any exemptive order issued by the Securities and
Exchange Commission, or as specified in Rule 6e-2, or
Rule 6e-3(T) under the ICA, or, if permanently adopted,
Rule 6e-3, as amended, whichever is applicable.
13. Each party hereto shall cooperate with each other party
and all appropriate governmental authorities having
jurisdiction (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit
<PAGE>
<PAGE>
7
such authorities reasonable access to its books and
records in connection with any investigation or inquiry
relating to this Agreement or the transactions
contemplated hereby.
Golden American agrees that neither it nor any of its
affiliates shall give any information or make any
representations or statements on behalf of the Trust or
concerning the Trust in connection with the offer or
sale of the Policies other than the information or
representations contained in the Registration Statement
for the Trust's shares, as such Registration Statement
may be amended or supplemented from time to time, or in
reports or proxy statements for the Trust, or in sales
literature or other promotional material approved by the
Trust or Western Capital, except with the written
permission of the Trust or Western Capital.
Western Capital agrees that neither it nor any of its
affiliates shall give any information or make any
representations or statements on behalf of the Policies
or concerning the Policies in connection with the offer
or sale, other than the information or representations
contained in the Registration Statement for the
Policies, as such Registration Statement may be amended
or supplemented from time to time, or in reports for the
Polices or in sales literature or other promotional
material approved by Golden American or its affiliates,
except with the written permission of Golden American or
its affiliates.
14. Western Capital shall, at its own expense, or if
appropriate, the expense of the Trust, provide Golden
American with at least three complete copies of all
registration statements, prospectuses, statements of
additional information, sales literature and other
promotional materials, applications for exemptions,
request for no-action letters, and any and all
amendments to the foregoing, that relate to the Trust or
its shares, promptly after the filing of such document
with the SEC or other regulatory authorities or the
submission of such document to the SEC staff whichever
is applicable.
Golden American or its affiliate shall, at its own
expense, or if appropriate, the expense of the Trust,
provide Golden American with at least three complete
copies of all registration statements, prospectuses,
statements of additional information, sales literature
and other promotional materials, applications for
exemptions, request for no-action letters, and any and
all amendments to the foregoing, that relate to the
Policies promptly after the filing of such document with
the SEC or other regulatory authorities or the
submission of such document to the SEC staff whichever
is applicable.
<PAGE>
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8
15. (a) Subject to the limitations of subparagraphs (b)and (c)
of this Section 17 of this Agreement, Western Capital
agrees to indemnify and hold harmless Golden American
and each of its directors, officers, and employees and
each person, if any, who controls Golden American within
the meaning of Section 15 of the Securities Act
(collectively, the "Indemnified Parties") against any
and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of
Western Capital) or litigation expenses (including legal
and other expenses) to which the Indemnified Parties may
become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages,
liabilities, or expenses (or actions in respect thereof)
or settlements are related to the operation of the
Trust, and: (i) arise as a result of any failure by
Western Capital to provide the services and furnish the
materials under the terms of this Agreement to which it
is subject (including a failure to meet its
responsibilities under Sections 8 and 9 of this
Agreement); or (ii) arise out of or result from any
material breach of any representation or warranty made
by Western Capital in this Agreement or arise out of or
result from any other material breach of this Agreement
by Western Capital.
(b) Western Capital shall not be liable under Section 15(a)
of this Agreement with respect to any losses, claims,
damages, liabilities, or litigation expenses to which an
Indemnified Party would otherwise be subject by reason
of such Indemnified Party's willful misfeasance, bad
faith, or gross negligence in the performance of such
Indemnified Party's duties, or by reason of such
Indemnified Party's reckless disregard of obligations
and duties under this Agreement or to Golden American or
the Variable Accounts, whichever is applicable.
(c) Western Capital shall not be liable under Section 15(a)
of this Agreement with respect to any claim made against
an Indemnified Party unless such Indemnified Party shall
have notified Western Capital in writing within a
reasonable time after the summons or other first legal
process giving the information of the nature of the
claim shall have been served upon such Indemnified Party
(or after such Indemnified Party shall have received
notice of such service on any designated agent), but
failure to notify Western Capital of any such claims
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9
shall not relieve Western Capital from any liability
which it may have to the Indemnified Party against whom
such action is brought otherwise than on account of
Section 15(a) of this Agreement. In case any action is
brought against the Indemnified Parties, Western Capital
will be entitled to participate, at its own expense, in
the defense thereof. Western Capital also shall be
entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action, and,
after notice to such party Western Capital's election to
assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel
retained by it, Western Capital shall not be liable to
such party under this Agreement for any legal or other
expenses subsequently incurred by such party
independently in connection with the defense thereof
other than reasonable costs of investigation.
(d) Subject to the limitations of subparagraphs (e) and (f)
of this Section 15 of this Agreement, the Trusts agrees
to indemnify and hold harmless Golden American and each
of its directors, officers, and employees and each
person, if any, who controls Golden American within the
meaning of Section 15 of the Securities Act
(collectively, the "Indemnified Parties") against any
and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of
the Trust) or litigation expenses (including legal and
other expenses) to which the Indemnified Parties may
become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages,
liabilities, or expenses (or actions in respect thereof)
or settlements are related to the operation of the
Trust, and: (i) arise as a result of any failure of the
Trust to provide the services and furnish the materials
under the terms of this Agreement to which it is subject
(including a failure to meet its responsibilities under
Sections 8 and 9 of this Agreement); or (ii) arise out
of or result from any material breach of any
representation or warranty made by the Trust in this
Agreement or arise out of or result from any other
material breach of this Agreement by the Trust.
(e) The Trust shall not be liable under Section 15(d) of
this Agreement with respect to any losses, claims,
damages, liabilities, or litigation expenses to which an
Indemnified Party would otherwise be subject by reason
of such Indemnified Party's willful misfeasance, bad
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<PAGE>
10
faith, or gross negligence in the performance of such
Indemnified Party's duties, or by reason of such
Indemnified Party's reckless disregard of obligations
and duties under this Agreement or to Golden American or
the Variable Accounts, whichever is applicable.
(f) The Trust shall not be liable under Section 15(d) of
this Agreement with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall
have notified the Trust in writing within a reasonable
time after the summons or other first legal process
giving the information of the nature of the claim shall
have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of
such service on any designated agent), but failure to
notify the Trust of any such claims shall not relieve
the Trust from any liability which it may have to the
Indemnified Party against whom such action is brought
otherwise than on account of Section 15(d) of this
Agreement. In case any action is brought against the
Indemnified Parties, the Trust will be entitled to
participate, at its own expense, in the defense thereof.
the Trust also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in
the action, and, after notice to such party the Trust's
election to assume the dense thereof, the Indemnified
Party shall bear the fees and expenses of any additional
counsel retained by it, Western Capital shall not be
liable to such party under this Agreement for any legal
or other expenses subsequently incurred by such party
independently in connection with the defense thereof
other than reasonable costs of investigation.
16. (a) Subject to the limitations of subsections (b) and
(c) of this Section 16 Golden American agrees to
indemnify and hold harmless Western Capital and the
Trust and each of its Trustees, directors, officers, and
employees and each person, if any, who controls Western
Capital or the Trust within the meaning of Section 15
of the Securities Act (collectively, the "Indemnified
Parties") against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with
the written consent of Golden American) or litigation
expenses (including legal and other expenses) to which
the Indemnified Parties may become subject under any
statute, at common law or otherwise, insofar as such
losses, claims, damages, liabilities, or expenses (or
actions in respect thereof) or settlements are related
<PAGE>
<PAGE>
11
to the operation of the Variable Account or Trust, and:
(i) arise as a result of any failure of Golden American
or any of its affiliates to provide the services and
furnish the materials under the terms of this Agreement
to which it is subject (including a failure to meet its
responsibilities under Sections 5 and 9 of this
Agreement); or (ii) arise out of or result from any
material breach by Golden American or any of its
affiliates of any representation or warranty made by
Golden American in this Agreement by Golden American or
arise out of or result from any other material breach of
this Agreement by Golden American or any of its
affiliates.
(b) Golden American shall not be liable under Section 16 of
this Agreement with respect to any losses, claims,
damages, liabilities, or litigation expenses to which an
Indemnified Party would otherwise be subject by reason
of such Indemnified Party's willful misfeasance, bad
faith, or gross negligence in the performance of such
Indemnified Party's duties, or by reason of such
Indemnified Party's reckless disregard of obligations
and duties under this Agreement or to Western Capital or
the Trust, whichever is applicable.
(c) Golden American shall not be liable under Section 16
with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified
Golden American in writing within a reasonable time
after the summons or other first legal process giving
the information of the nature of the claim shall have
been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such
service on any designated agent), but failure to notify
Golden American of any such claim shall not relieve
Western Capital or its affiliates from any liability
which it may have to the Indemnified Party against whom
such action is brought otherwise than on account of
Section 16 of this Agreement. In case any action is
brought against the Indemnified Parties, Golden American
will be entitled to participate, at its own expense, in
the defense thereof. Golden American also shall be
entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action, and,
after notice to such party Golden American's election to
assume the dense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel
retained by it, Golden American shall not be liable
to
<PAGE>
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12
such party under this Agreement for any legal or other
expenses subsequently incurred by such party
independently in connection with the defense thereof
other than reasonable costs of investigation.
17. Each party of this Agreement agrees to promptly notify
the other parties of the commencement of any litigation
or proceedings against it or any of its officers,
Trustees, directors or employees in connection with this
Agreement, the issuance or sale of the Policies, the
operation of a Variable Account, or the sale or
acquisition of shares of the Trust.
18. This Agreement may be terminated without cause by any of
the parties upon giving one hundred and twenty (120)
days' written notice of to the other parties, PROVIDED
HOWEVER, that if any party fails to carry out its
responsibilities enumerated under this Agreement in any
material respect, the other parties shall have the right
to terminate this Agreement immediately and further
provided, in the event the Trust is made available to
separate accounts of insurance companies other than
Golden American, that if a majority of the disinterested
Trustees determine that an irreconcilable material
conflict exists among the contract owners and
policyowners segregated asset accounts or the interests
of persons for which the Trustees are required to
monitor under the conditions referred to in Section 12
of this Agreement, then any party shall have the right
to terminate this Agreement immediately. Upon
termination of this Agreement, all authorizations,
rights and obligations under this Agreement, except for
the provisions contained in Sections 15 and 16 hereof,
shall cease.
19. Unless earlier terminated pursuant to Section 18 hereof,
this Agreement shall remain in effect for a one year
period beginning on its date of execution and will
continue thereafter in effect from year to year. Upon
termination of this Agreement, all authorizations,
rights and obligations impose on the parties under this
Agreement except for the indemnification provisions
contained in Section 15 and 16 above shall cease. The
parties further agree that in the event of a termination
of this Agreement, each party shall cooperate with the
other parties to ensure that existing policy owners will
not suffer any adverse consequences resulting from such
termination.
20. This Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the laws
of the State of New York.
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13
21. This Agreement shall be subject to the provisions of the
Securities Act, the Securities Exchange Act of 1934 and
the ICA and the rules, regulations and rulings
thereunder, including such exemptions from those
statutes, rules and regulations as the SEC may grant and
the terms hereof shall be interpreted and construed in
accordance therewith. The term "affiliate" as used in
this Agreement shall mean an "affiliated person" as
defined in Section 2(a)(3) of the Investment Company
Act. This Agreement may not be assigned by any party
without the written consent of the other parties to this
Agreement.
22. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected
thereby.
23. Any notice shall be sufficiently given when sent by
registered or certified mail to the other parties at the
address of such parties set fort below or at such other
address as such party may from time to time specify in
writing to the other parties:
To: Golden American Life Insurance Company
909 Third Avenue, 19th Floor
New York, New York 10022
To: Western Capital Specialty Managers Trust
1925 Century Park East, Suite 2350
Los Angeles, CA 90067
with a copy to
Jeffrey S. Puretz
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005
To: Western Capital Variable Advisors Corp.
1925 Century Park East, Suite 2350
Los Angeles, CA 90067
24. The rights remedies and obligations contained in this
Agreement are cumulative and are in addition to any and
all rights, remedies and obligations, at law or in
equity, which the parties hereto are entitled to under
state or federal laws.
25. A copy of the Trust's Declaration of Trust is on file
with the Secretary of the Commonwealth of Massachusetts.
The Declaration of Trust has been executed on behalf of
the Trust by certain Trustees in their capacity as
Trustees of the Trust and not individually. The
obligations of this Agreement shall be binding upon the
assets and property of the Trust and shall not be
<PAGE>
<PAGE>
14
binding upon any Trustee, Officer, employee or
shareholder of the Trust individually.
<PAGE>
<PAGE>
15
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
WESTERN CAPITAL SPECIALTY MANAGERS TRUST
By: /s/ Charles F. Parisi
---------------------
Charles F. Parisi
President
Attest: /s/ William C. Richardson
-------------------------
Name: William C. Richardson
Title: President
WESTERN CAPITAL VARIABLE ADVISORS CORP.
By: /s/ Charles F. Parisi
---------------------
Charles F. Parisi
President
Attest: /s/ William C. Richardson
-------------------------
Name: William C. Richardson
Title: President
GOLDEN AMERICAN LIFE INSURANCE COMPANY
By: /s/ Fred H. Davidson
--------------------
Fred H. Davidson
President
Attest: /s/ Bernard R. Beckerlegge
--------------------------
Name: Bernard R. Beckerlegge
Title: Secretary
<PAGE>
<PAGE>
16
GOLDEN AMERICAN LIFE INSURANCE COMPANY
on behalf of the Variable Accounts
By: /s/ Fred H. Davidson
--------------------
Fred H. Davidson
President
Attest: /s/ Bernard R. Beckerlegge
--------------------------
Name: Bernard R. Beckerlegge
Title: Secretary
<PAGE>
<PAGE>
EXHIBIT A TO
ORGANIZATIONAL AGREEMENT AMONG
WESTERN CAPITAL SPECIALTY MANAGERS TRUST
and
WESTERN CAPITAL VARIABLE ADVISORS CORP.
and
GOLDEN AMERICAN LIFE INSURANCE COMPANY
The Western Capital Specialty Managers Separate Account A
The Western Capital Specialty Managers Separate Account B
<PAGE>
<PAGE>
EXHIBIT B TO
ORGANIZATIONAL AGREEMENT AMONG
WESTERN CAPITAL SPECIALTY MANAGERS TRUST
and
WESTERN CAPITAL VARIABLE ADVISORS CORP.
and
GOLDEN AMERICAN LIFE INSURANCE COMPANY
Multiple Allocation Series
Fully Managed Series
Limited Maturity Bond Series
Natural Resources Series
Real Estate Series
All-Growth Series
Liquid Asset Series
Exhibit (3)(d)
<PAGE>
WESTERN CAPITAL SPECIALTY MANAGERS TRUST
1925 Century Park East, Suite 2350
Los Angeles, California 90067
April 13, 1989
Western Capital Variable Advisors
Corporation
1925 Century Park East, Suite 2350
Los Angeles, California 90067
Golden American Life Insurance Company
909 Third Avenue, 19th Floor
New York, New York 10022
Re: ADDENDUM TO ORGANIZATIONAL AGREEMENT
Dear Sirs:
The Organizational Agreement dated as of December 28, 1988
by and among Western Capital Specialty Managers Trust("Trust"),
Western Capital Variable Advisors Insurance Corporation ("Western
Capital"), and Golden American Life Insurance Company ("Golden
American") on its own behalf and on behalf of Western Capital
Specialty Managers Separate Accounts A and B is hereby amended by
adding thereto the following provisions:
"Western Capital agrees to waive its management fee
with respect to the Liquid Asset Series, otherwise
payable under the Management Agreement between Western
Capital and the Trustin an amount at an annual rate
equal to .20% of the average daily net assets of the
Liquid Asset Series, during the period from April 13,
1989 to December 31, 1989.
In addition, Western Capital and Golden American each
agrees to pay the Trust one half of the amount by which
the remaining expenses, other than extraordinary
expenses, incurred by the Trust on behalf of the Liquid
Asset Series between April 13, 1989 and April 13, 1990
exceed 0.8% of the Liquid Asset Series' average daily
net assets during such period. Western
<PAGE>
Capital and Golden American each further agrees to pay
the Trust one half of the amount by which expenses,
other than extraordinary expenses, incurred by the
Trust in behalf of the Limited Maturity Bond Series
between April 13, 1989 and April 13, 1990 exceed 1.0%
of the Limited Maturity Bond Series' average daily net
assets during such period. Such payments shall be made
(1) on December 31, 1989 with respect to expenses
incurred by the Trust between April 13, 1989 and
December 31, 1989, and (2) on April 13, 1990 with
respect to expenses incurred by the Trust between
January 1, 1990 and April 13, 1990."
If you are in agreement with the foregoing, please sign the
form of acceptance on the enclosed counterpart hereof and return
the same to us.
Very truly yours,
Western Capital Specialty
Managers Trust
By: /s/ Charles F. Parisi
----------------------
President
The foregoing Addendum to the
Organizational Agreement dated
December 28, 1988 is hereby
accepted as of the date first
above written
Western Capital Variable Advisors Corporation
By: /s/ Charles F. Parisi Date: 5/31/89
------------------------ --------
President
Golden American Life Insurance Company
By: /s/ F. H. Davidson Date: 6/7/89
------------------------ --------
- 2 -
<PAGE>
Exhibit (3)(e)
EXPENSE REIMBURSEMENT AGREEMENT
This Agreement is entered into effective as of the 20th day
of March, 1991, by and between The Specialty Managers Trust (the
"Trust"), a Massachusetts business trust, and Directed Services,
Inc. ("Manager"), a New York corporation, whose name is scheduled
to be changed to The Golden Financial Group, Inc. on or about May
1, 1991.
WHEREAS, the Trust is an open-end diversified management
investment company issuing shares in several different classes,
each class known as a Series; and
WHEREAS, Golden American Life Insurance Company ("Golden
American") and The Mutual Benefit Life insurance Company ("MBL"),
through certain of their respective separate accounts, invest in
shares of the operating Series of the Trust; and
WHEREAS, the parties hereto wish to limit the ordinary
operating expenses of the Trust borne by owners of the variable
annuities and variable life insurance policies issued or to be
issued by Golden American or MBL (the "Policies"):
NOW, THEREFORE, the parties do hereby agree as follows:
1. TERM OF AGREEMENT. This Agreement shall commence as of the
first day of May, 1991, and shall continue through the close of
business on December 31, 1991, unless earlier terminated by
mutual agreement of the parties, expressed in a writing signed by
all of the parties hereto.
2. REIMBURSEMENT OF EXPENSES OF THE SERIES OF THE TRUST. In
partial consideration for the Trust offering its shares solely to
separate accounts of Golden American and MBL, Manager hereby
agrees to pay the Trust the amount by which the ordinary
operating expenses of each of the Series exceeds the percentage
of the average daily net assets of each Series as set forth
below:
(i) Liquid Asset Series .80%
(ii) Limited Maturity Bond Series .90%
(iii) All Growth Series 1.50%
(iv) Natural Resources Series 1.50%
(v) Real Estate Series 1.50%
(vi) Multiple Allocation Series 1.50%
(vii) Fully Managed Series 1.50%
In no event shall the Manager, under this Reimbursement
Agreement, pay to the Trust any amount with respect to any
extraordinary expenses of the Trust.
3. FREQUENCY OF REIMBURSEMENTS. The amount of reimbursement,
if any, for each operating Series of the Trust shall be
determined monthly. Manager hereby agrees to pay the Trust any
amount due hereunder not later than the 15th day of the following
calendar month.
4. PROVISION OF FINANCIAL STATEMENTS. For such period as the
Manager is obligated to pay any of the ordinary operating
expenses of the Trust pursuant to the provisions of this
Agreement, Manager hereby agrees to provide the Board of Trustees
of the Trust on a quarterly basis the unaudited financial
statements of Manager and on an annual basis the audited
financial statements of the Manager.
5. ASSIGNMENT AND MODIFICATION. This Agreement may be modified
or assigned only by a writing signed by all of the parties.
<PAGE>
Page Two
6. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties have executed this Agreement
effective as of the date first written above.
DIRECTED SERVICES, INC.
By: /s/F.H. Davidson
-----------------------
THE SPECIALTY MANAGERS TRUST
By: /s/
-----------------------
Exhibit (3)(f)
EXPENSE REIMBURSEMENT AGREEMENT
AMENDMENT NO. 1
This Amendment No. 1 to Expense Reimbursement Agreement
("Agreement") is entered into effect as of the 31st day of December
1991, by and between The Specialty Managers Trust (the "Trust"), a
Massachusetts business trust whose name is scheduled to be changed to
The GCG Trust on or about January 31, 1992, and Directed Services,
Inc. ("Manager"), a New York corporation.
WHEREAS, the Trust is an open-end diversified management
investment company issuing shares in several different classes, each
class known as a series; and
WHEREAS, MB Variable Life Insurance Company, currently
conducting business in certain jurisdictions as Golden American Life
Insurance Company ("Golden American") and the Mutual Benefit Life
Insurance Company in Rehabilitation, successor to The Mutual Benefit
Life Insurance Company ("MBL"), through certain of their respective
separate accounts, invest in shares of the operating Series of the
Trust; and
WHEREAS, the parties hereto wish to limit the ordinary operating
expenses of the Trust borne by owners of the variable annuities and
variable life insurance policies issued or to be issued by Golden
American or MBL (the "Policies"); and
WHEREAS, the parties have previously entered into the Agreement
effective as of the 20th day of March, 1991, which Agreement
continues through the close of business on December 31, 1991; and
WHEREAS, the parties wish to amend the Agreement;
NOW, THEREFORE, the parties do hereby agree as follows:
1. Term of Agreement. The Agreement shall continue in full force
and effect and upon the same terms and conditions as originally set
forth through the close of business on April 30, 1992, except as set
forth in Section 2 hereof.
2. Reimbursement of Expenses of the Series of the Trust.
Commencing February 17, 1992, and continuing through the close of
business on April 30, 1992, Manager hereby agrees to pay the Trust
the amount by which the ordinary operating expenses of each of the
Series exceeds the percentage of the average daily net assets of each
Series as set forth below:
(i) Liquid Asset Series .80%
(ii) Limited Maturity Bond Series .90%
(iii) All Growth Series 1.50%
(iv) Natural Resources Series 1.50%
(v) Real Estate Series 1.50%
(vi) Multiple Allocation Series 1.20%
(vii) Fully Managed Series 1.20%
IN WITNESS WHEREOF, the parties have executed this Agreement
effective as of the date first written above.
DIRECTED SERVICES, INC.
By: /s/ Bernard R. Beckerlegge
-----------------------------------------
THE SPECIALTY MANAGERS TRUST
By: /s/ Fred H. Davidson
-----------------------------------------
Exhibit (3)(g)
EXPENSE REIMBURSEMENT AGREEMENT
AMENDMENT NO. 2
This Amendment No. 2 to Expense Reimbursement Agreement
("Agreement") is entered into effect as of the 1st day of May 1992,
by and between The GCG Trust (formerly The Specialty Managers Trust)
(the "Trust"), a Massachusetts business trust, and Directed Services,
Inc. ("Manager"), a New York corporation.
WHEREAS, the Trust is an open-end diversified management
investment company issuing shares in several different classes, each
class known as a series; and
WHEREAS, Golden American Life Insurance Company (formerly MB
Variable Life Insurance Company) ("Golden American") and the Mutual
Benefit Life Insurance Company in Rehabilitation, successor to The
Mutual Benefit Life Insurance Company ("MBL"), through certain of
their respective separate accounts, invest in shares of the operating
Series of the Trust; and
WHEREAS, the parties hereto wish to limit the ordinary operating
expenses of the Trust borne by owners of the variable annuities and
variable life insurance policies issued or to be issued by Golden
American or MBL (the "Policies"); and
WHEREAS, the parties have previously entered into the Agreement
effective as of the 20th day of March, 1991, as last amended on
December 31, 1991; and
WHEREAS, the parties wish to amend the Agreement;
NOW, THEREFORE, the parties do hereby agree as follows:
1. Term of Agreement. The Agreement shall continue in full force
and effect and upon the same terms and conditions as originally set
forth through the close of business on December 31, 1992, except as
set forth in Section 2 hereof.
2. Reimbursement of Expenses of the Series of the Trust.
Commencing May 1, 1992, and continuing through the close of business
on December 31, 1992, Manager hereby agrees to pay the Trust the
amount by which the ordinary operating expenses of each of the Series
exceeds the percentage of the average daily net assets of each Series
as set forth below:
(i) Liquid Asset Series .75%
(ii) Limited Maturity Bond Series .75%
(iii) All Growth Series 1.50%
(iv) Natural Resources Series 1.50%
(v) Real Estate Series 1.50%
(vi) Multiple Allocation Series 1.20%
(vii) Fully Managed Series 1.20%
(viii) Capital Appreciation Series 1.20%
IN WITNESS WHEREOF, the parties have executed this Agreement
effective as of the date first written above.
DIRECTED SERVICES, INC.
By: /s/ Bernard R. Beckerlegge
-----------------------------------------
THE SPECIALTY MANAGERS TRUST
By: /s/ Fred H. Davidson
-----------------------------------------
Exhibit (3)(h)
EXPENSE REIMBURSEMENT AGREEMENT
AMENDMENT NO. 3
This Amendment No. 3 to Expense Reimbursement Agreement
("Agreement") is entered into effect as of the 1st day of November
1992, by and between The GCG Trust (formerly The Specialty Managers
Trust) (the "Trust"), a Massachusetts business trust, and Directed
Services, Inc. ("Manager"), a New York corporation.
WHEREAS, the Trust is an open-end diversified management
investment company issuing shares in several different classes, each
class known as a series; and
WHEREAS, Golden American Life Insurance Company (formerly MB
Variable Life Insurance Company) ("Golden American"), through certain
of its respective separate accounts, invest in shares of the
operating Series of the Trust; and
WHEREAS, the parties hereto wish to limit the ordinary operating
expenses of the Trust borne by owners of the variable annuities and
variable life insurance policies issued or to be issued by Golden
American (the "Policies"); and
WHEREAS, the parties have previously entered into the Agreement
effective as of the 20th day of March, 1991, as last amended on May
1, 1992; and
WHEREAS, the parties wish to amend the Agreement;
NOW, THEREFORE, the parties do hereby agree as follows:
1. Term of Agreement. The Agreement shall continue in full force
and effect and upon the same terms and conditions as originally set
forth through the close of business on December 31, 1993, except as
set forth in Section 2 hereof.
2. Reimbursement of Expenses of the Series of the Trust.
Commencing November 1, 1992, and continuing through the close of
business on December 31, 1993, Manager hereby agrees to pay the Trust
the amount by which the ordinary operating expenses of each of the
Series exceeds the percentage of the average daily net assets of each
Series as set forth below:
(i) Liquid Asset Series .60%
(ii) Limited Maturity Bond Series .60%
(iii) All Growth Series 1.00%
(iv) Natural Resources Series 1.00%
(v) Real Estate Series 1.00%
(vi) Multiple Allocation Series 1.00%
(vii) Fully Managed Series 1.00%
(viii) Capital Appreciation Series 1.00%
IN WITNESS WHEREOF, the parties have executed this Agreement
effective as of the date first written above.
DIRECTED SERVICES, INC.
By: /s/ Bernard R. Beckerlegge
-----------------------------------------
THE SPECIALTY MANAGERS TRUST
By: /s/ Fred H. Davidson
-----------------------------------------
Exhibit (3)(i)
EXPENSE REIMBURSEMENT AGREEMENT
AMENDMENT NO. 4
This Amendment No. 4 to Expense Reimbursement Agreement
("Agreement") is entered into effect as of the 22nd day of March,
1993, by and between The GCG (the "Trust"), a Massachusetts business
trust, and Directed Services, Inc. ("Manager"), a New York
corporation.
WHEREAS, the Trust is an open-end diversified management
investment company issuing shares in several different classes, each
class known as a series; and
WHEREAS, Golden American Life Insurance Company ("Golden
American"), through certain of its respective separate accounts,
invest in shares of the operating Series of the Trust; and
WHEREAS, the parties hereto wish to limit the ordinary operating
expenses of the Trust borne by owners of the variable annuities and
variable life insurance policies issued or to be issued by Golden
American (the "Policies"); and
WHEREAS, the parties have previously entered into the Agreement
effective as of the 20th day of March, 1991, as last amended on
November 1, 1992; and
WHEREAS, the parties wish to amend the Agreement;
NOW, THEREFORE, the parties do hereby agree as follows:
1. Term of Agreement. The Agreement shall continue in full force
and effect and upon the same terms and conditions as originally set
forth through the close of business on December 31, 1993, except as
set forth in Section 2 hereof.
2. Reimbursement of Expenses of the Series of the Trust.
Commencing March 22, 1993, and continuing through the close of
business on December 31, 1993, Manager hereby agrees to pay the Trust
the amount by which the ordinary operating expenses of each of the
Series exceeds the percentage of the average daily net assets of each
Series as set forth below:
(i) Liquid Asset Series .60%
(ii) Limited Maturity Bond Series .60%
(iii) All Growth Series 1.00%
(iv) Natural Resources Series 1.00%
(v) Real Estate Series 1.00%
(vi) Multiple Allocation Series 1.00%
(vii) Fully Managed Series 1.00%
(viii) Capital Appreciation Series 1.00%
(ix) The Fund for Life Series .50%
IN WITNESS WHEREOF, the parties have executed this Agreement
effective as of the date first written above.
DIRECTED SERVICES, INC.
By: /s/ Bernard R. Beckerlegge
-----------------------------------------
THE SPECIALTY MANAGERS TRUST
By: /s/ Fred H. Davidson
-----------------------------------------
<PAGE>
Exhibit (3)(j)
ASSIGNMENT AGREEMENT FOR
ORGANIZATIONAL AGREEMENT
AGREEMENT, made this _____ day of __________, 1991, by and
among Specialty Advisors Corp. ("SAC") (formerly Western Capital
Variable Advisors Corp.), a California corporation; Directed
Services, Inc. ("DSI"), a New York corporation; Golden American
Life Insurance Company ("Golden American"), a stock life
insurance company incorporated under the laws of the State of
Minnesota, on its own behalf and on behalf of any separate
accounts of Golden American shown on Exhibit A of the
Organizational Agreement, as defined below; and The Specialty
Managers trust, a Massachusetts business Trust("Trust").
WHEREAS, the Trust is registered with the Securities and
Exchange Commission as an open-end management investment company
under the Investment Company Act of 1940, as amended ("Act"), and
the Trust issues shares in several different classes, each of
which is known as a "Series"; and
WHEREAS, the Trust, SAC and Golden American entered into an
Organizational Agreement dated December 28, 1988 ("Organizational
Agreement"); and
WHEREAS, SAC has served as Manager to the Trust pursuant to
a Management Agreement between the Trustand SAC dated November 1,
1988; and
<PAGE>
WHEREAS, the Trustand SAC have terminated the Management
Agreement with SAC, effective at the close of business on March
20, 1991; and
WHEREAS, commencing March 21, 1991, DSI has agreed to serve
as manager to the Trust pursuant to a new Management Agreement
between the Trustand DSI dated March 20, 1991; and
WHEREAS, SAC Golden American and the Trust desire to assign
SAC's interest in the Organizational Agreement to DSI and DSI
desires to be the assignee of SAC's interest.
NOW, THEREFORE, it is agreed as follows:
1. ASSIGNMENT. Effective as of March 21, 1991, SAC hereby
assigns to DSI all of its interest in the Organizational
Agreement.
2. PERFORMANCE OF DUTIES. DSI hereby assumes and agrees
to perform all of SAC's duties and obligations under the
Organizational Agreement and be subject to all of the terms and
conditions of said Agreement as if they applied to SAC. DSI
shall not be responsible for any claim or demand arising under
the Organizational Agreement from services rendered prior to the
effective date of this Assignment Agreement unless otherwise
agreed by DSI, and SAC shall not be responsible for any claim or
demand arising under the Organizational Agreement from services
rendered after the effective date of this Assignment Agreement
unless otherwise agreed by SAC.
-2-
<PAGE>
3. REPRESENTATION OF DSI. DSI represents and warrants
that it is registered as an investment adviser under the
Investment Advisers Act of 1940 and will remain registered as
long as required by applicable law.
4. CONSENT. The Trust and Golden American hereby consent
to this assignment by SAC of its rights under the Organizational
Agreement to DSI and the assumption by DSI of SAC's interest in
such Agreement and the duties and obligations thereunder, and
agree, subject to the terms and conditions of said Agreement, to
look to DSI for the performance of the duties and obligations
formerly owed by SAC under said Agreement.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have cause this
Assignment Agreement to be executed by their duly authorized
officers hereunto duly attested as of the date and year written
above.
Specialty Advisors Corp.
_______________________ By: _______________________________
Attest
_______________________ _______________________________
Title Title
Directed Services, Inc.
_______________________ By: _______________________________
Attest
_______________________ _______________________________
Title Title
-4-
<PAGE>
Golden American Life Insurance Company
_______________________ By: _______________________________
Attest
_______________________ _______________________________
Title Title
The Specialty Managers Trust
_______________________ By: _______________________________
Attest
_______________________ _______________________________
Title Title
-5-
<PAGE>
Exhibit (5)(a)
Flexible Premium Joint and
Last Survivor Variable
Life Insurance Policy
Golden American is a stock company domiciled in Minneapolis,
Minnesota.
- --------------------------------------------------------------------
Policy Number Initial Premium Face Amount
[123456] [$50,000] [152,000]
- --------------------------------------------------------------------
Owner Insured Joint Insured
[John Q. Public] [Jane S. Public]
- --------------------------------------------------------------------
Separate Account(s)
Separate Account A
- --------------------------------------------------------------------
This policy is a legal contract between its owner and us. Please read
it carefully. In this policy, you or your refers to the owner shown
above. We, our or us refers to the Golden American Life Insurance
Company. You may allocate this policy's investment value among the
separate account divisions shown on Page 3B and the general account
division shown on Page 3C.
Death Benefit Provided by this Policy
We will pay the death benefit proceeds to the beneficiary when we
receive proof of the death of the last surviving insured of the joint
insureds shown above. For details on death benefit proceeds see
Insurance Benefits.
At issue, the death benefit equals this policy's face amount.
Afterwards, the death benefit may increase or decrease on any day,
depending on this policy's investment results but will never be less
than this policy's face amount. The period for which the death
benefit is in effect may change with the investment results but will
never be less than this policy's guarantee period. For details on
death benefit proceeds and the guarantee period see Insurance
Benefits.
Cash Value Benefits
During the lifetimes of the insureds and while this policy is in
effect, we provide cash value benefits and other important rights as
described in this policy.
The cash surrender value may increase or decrease on any day,
depending on the investment results for this policy. No minimum
amount is guaranteed, except for any amounts allocated to the
Guaranteed Division. See Your Policy Benefits for information on cash
surrender values.
Right to Examine this Policy
This policy may be returned on or before the end of the free look
period. This period ends 10 days after the date you receive this
policy. Mail or deliver this policy to the Customer Service Center
shown below. The returned policy will be treated as if we never
issued it. We will promptly return the initial premium payment.
Customer Service Center Secretary:
MBL Variable, Inc.
Post Office Box 5179, FDR Station
New York, New York 10150-5179 President:
Flexible Premium Joint and Last Survivor Variable Life Insurance
Variable life insurance payable upon death of the last surviving
insured. Death benefit subject to guaranteed minimum during guarantee
period. Guaranteed minimum is policy's face amount. Flexible premium
payments. Non-participating. Investment results reflected in policy
benefits.
<PAGE>
<PAGE>
A copy of the application(s) and any additional benefit riders and
endorsements are at the back of this policy.
Specification Pages
The specification pages (Pages 3A to 3H) follow this page. They give
specific facts about this policy and its coverage. Please refer to
them while reading this policy.
Policy Contents 2
Specification Pages
Payment and Investment
Information 3A
The Separate Accounts 3B
The General Account 3C
Policy Facts 3D
Expense Charges 3E
Insurance Charges 3F
Net Single Premium Factors 3G
Income Plan Factors 3H
Introduction to this Policy 4
This Policy is a Contract
Key Dates and Ages
Right to Name a Contingent Owner
The Beneficiary
Change of Owner or Beneficiary
Premium Payments and Allocation
Changes 5
Initial Premium Payments
Additional Premium Payments
Allocation of Additional Premium Payments
Your Right to Reallocate Investment Value
Separate Account Division not Available
How We Measure a Policy's
Investment Value 7
The Separate Accounts
The General Account
Valuation Period
Investment Value
Amount of Investment Value in Each Division
Charges Deducted from Investment Value
Tabular Value
Measurement of Investment Experience
Your Policy Benefits 11
Cash Value Benefits
Policy Loans
Right to Exchange
<PAGE>
<PAGE>
Insurance Benefits 13
Variable Insurance Amount
Proceeds Payable to the Beneficiary
Insurance Coverage Period 14
How we Determine the Guarantee
Period and Face Amount
Termination of Policy after
Guarantee Period
How to Reinstate this Policy
Choosing An Income Plan 15
The Income Plans
Payment When Named Person Dies
Other Important Information 16
Contesting this Policy
Policy Values Report
Changing this Policy
Policy Changes - Applicable Tax Law
Errors in Ages or Sexes
Sending Notice to Us
Suicide
Payments We May Defer
Establishing Survivorship
Claims of Creditors
Assignment
Non-participating
Authority to make Agreements
Changes in Expense Charges and Insurance Charges
Maturity Date of this Policy
Required Note on Our Computations
<PAGE>
<PAGE>
Payment and Investment Information
- --------------------------------------------------------------------
Policy Number Initial Premium Face Amount
[123456] [$50,000] [$150,000]
- --------------------------------------------------------------------
Owner Policy Date Issue Date Residence State
[John Public] [January 1, 1998] [January 1, 1998] [Delaware]
- --------------------------------------------------------------------
Insured Sex Issue Age Underwriting Class Smoking Status
[John Pubic] [Male] [65] [Non-Medical] [Non-Smoker]
- --------------------------------------------------------------------
Joint Insured Sex Issue Age Underwriting Class Smoking Status
[Jane Public] [Female] [35] [Non-Medical]
[Non-Smoker]
- --------------------------------------------------------------------
Separate Account(s)
Separate Account A
- --------------------------------------------------------------------
Initial Investment
Initial premium payment received: [$50,000]
less [3%] of premium for premium tax [$1,500]
Investment value in Liquid Asset Division on
[January 1, 1998] [$48,500]
As requested in the application, on [/R/ALLOCDATE_] we will change the
allocation of your investment value among the following divisions,
unless we receive other instructions before that date:
Percentage of
Division Investment Value
-------- ----------------
Total 100%
Additional Premium Payment Information
We will accept additional premium payments until one of the insureds
reaches the attained age of [80].
The minimum additional payment which may be made is [$500].
Investment Value Allocation Rules
The maximum number of divisions in which you may be invested at any
one time is [eight]. You are allowed five allocation changes per
policy year without charge. We will impose a charge for each
additional allocation change in excess of five. The excess allocation
charge is shown on Page 3E. No allocation changes are allowed during
the free look period.
Allocation Changes by Telephone
You may request allocation changes by telephone during our telephone
request business hours. You may call our Customer Service Center at 1-
800-447-3644 (in New York, the number is 212-688-7070) to make
allocation changes by using the personal identification number you
will receive. You may also mail a request for allocation changes to
the Customer Service Center at the address shown on the cover page.
<PAGE>
<PAGE>
The Separate Accounts 3B1
- --------------------------------------------------------------------
Policy Number Initial Premium Face Amount
[123456] [$50,000] [$150,000]
- --------------------------------------------------------------------
Owner Insured Joint Insured
[John Public] [John Public] [Jane Public]
- --------------------------------------------------------------------
Separate Account
Separate Account A
- --------------------------------------------------------------------
Managed Separate Account
[Not available.]
Divisions Investing in Shares of a Mutual Fund
[Separate Account A is a unit investment trust separate account,
organized in and governed by the laws of the State of Minnesota, our
state of domicile. It is divided into divisions.
Each division listed below invests in shares of the mutual fund
portfolio designated. Each portfolio is a part of The Specialty
Managers Trust managed by Directed Services, Inc.
ALL-GROWTH
DIVISION
ALL-GROWTH SERIES
Portfolio Manager - Pilgrim Baxter & Associates, Ltd.
CAPITAL
APPRECIATION
DIVISION
CAPITAL APPRECIATION SERIES
Portfolio Manager - INVESCO (NY), Inc.
DEVELOPING
WORLD
DIVISION
DEVELOPING WORLD SERIES
Portfolio Manager - Montgomery Asset Management, LLC
FULLY
MANAGED
DIVISION
FULLY MANAGED SERIES
Portfolio Manager - T. Rowe Price Associates, Inc.
GROWTH
OPPORTUNITIES
DIVISION
GROWTH OPPORTUNITIES SERIES
Portfolio Manager - Montgomery Asset Management, LLC
MULTIPLE
ALLOCATION
DIVISION
MULTIPLE ALLOCATION SERIES
Portfolio Manager - Zweig Advisors Inc.
RISING
DIVIDENDS
DIVISION
RISING DIVIDENDS SERIES
Portfolio Manager - Kayne Anderson Investment Management, LLC
<PAGE>
<PAGE>
The Separate Accounts 3B2
- --------------------------------------------------------------------
Policy Number Initial Premium Face Amount
[123456] [$50,000] [$150,000]
- --------------------------------------------------------------------
Owner Insured Joint Insured
[John Public] [John Public] [Jane Public]
- --------------------------------------------------------------------
Separate Account
Separate Account A
- --------------------------------------------------------------------
STRATEGIC
EQUITY
DIVISION
STRATEGIC EQUITY SERIES
Portfolio Manager - Zweig Advisors Inc.
VALUE
EQUITY
DIVISION
VALUE EQUITY SERIES
Portfolio Manager - Eagle Asset Management, Inc.
STRATEGIC
EQUITY
DIVISION
STRATEGIC EQUITY SERIES
Portfolio Manager - Zweig Advisors Inc.
EMERGING
MARKETS
DIVISION
EMERGING MARKETS SERIES
Portfolio Manager - J. P. Morgan Investment Management Inc.
GLOBAL
FIXED
INCOME
DIVISION
GLOBAL FIXED INCOME PORTFOLIO
Portfolio Manager - Barings Investment Limited International
GROWTH AND
INCOME
DIVISION
GROWTH AND INCOME PORTFOLIO
Portfolio Manager - Robertson, Stephens & Company Investment
Management, L.P.
HARD
ASSETS
DIVISION
HARD ASSETS SERIES
Portfolio Manager - Van Eck Associates Corporation
LIMITED
MATURITY
BOND
DIVISION
LIMITED MATURITY BOND SERIES
Portfolio Manager - ING Investment Management, LLC
LIQUID
ASSET
DIVISION
LIQUID ASSET SERIES
Portfolio Manager - ING Investment Management, LLC
<PAGE>
<PAGE>
The Schedule (continued)
- --------------------------------------------------------------------
Policy Number Initial Premium Face Amount
[123456] [$50,000] [$150,000]
- --------------------------------------------------------------------
Owner Insured Joint Insured
[John Public] [John Public] [Jane Public]
- --------------------------------------------------------------------
Separate Account
Separate Account A
- --------------------------------------------------------------------
TOTAL
RETURN
DIVISION
TOTAL RETURN PORTFOLIO
Portfolio Manager - Massachusetts Financial Services Company
VALUE +
GROWTH
DIVISION
VALUE + GROWTH PORTFOLIO
Portfolio Manager - Robertson, Stephens & Company Investment
Management, L.P.
NOTE: PLEASE REFER TO THE PROSPECTUSES FOR THE CONTRACT AND THE GCG
TRUST FOR MORE DETAILS.
Each division listed below invests in shares of the mutual fund
portfolio (the "Portfolio") designated. Each portfolio is a part of
the PIMCO Trust managed by Pacific Investment Management Company
("PIMCO").
HIGH YIELD
BOND
DIVISION
HIGH YIELD BOND PORTFOLIO
Portfolio Manager - PIMCO
STOCKSPLUS
GROWTH AND
INCOME
DIVISION
STOCKSPLUS GROWTH AND INCOME PORTFOLIO
Portfolio Manager - PIMCO
<PAGE>
<PAGE>
The General Account 3C1
- --------------------------------------------------------------------
Policy Number Initial Premium Face Amount
[123456] [$50,000] [$150,000]
- --------------------------------------------------------------------
Owner Insured Joint Insured
[John Public] [John Public] [Jane Public]
- --------------------------------------------------------------------
General Account
The general account offers a guaranteed interest division, known as
the Guaranteed Division, for allocation of funds under this policy.
Guaranteed Division
The Guaranteed Division provides a minimum of [4%] annual interest.
At our sole discretion, we may periodically declare a higher interest
rate. Such rate will apply to the policy year(s) next following the
date of declaration. Any such declaration will be by class and will
be based on changes in future expectations.
Limitations on Allocations
You may allocate up to [50%] of your initial premium payment to this
division. You may also allocate subsequent premium payments to this
division but such allocations may be subject to restrictions.
Currently we will only permit subsequent allocations within [30] days
after the policy date and each policy anniversary and they are limited
so that after such allocation, the investment value in the Guaranteed
Division is no more than [50%] of the total investment value.
Reallocations
You may reallocate your investment value to or from the Guaranteed
Division to or from other divisions within [30] days after the policy
date and each policy anniversary. Reallocations to the Guaranteed
Division are limited so that after the reallocation, the investment
value in the Guaranteed Division is no more than [50%] of the total
investment value. Reallocations from the Guaranteed Divisions are
subject to the following restrictions:
(1) You may reallocate the greater of [25%] of the initial premium
payment allocated to this division and [25%] of the investment
value in this division as of the policy anniversary, on each of
the first [four] policy anniversaries;
(2) Thereafter you may reallocate up to [25%] of the investment value
in this division as of the policy anniversary to other divisions;
and
(3) If the investment value in this division is [$5,000] or less you
may reallocate the entire amount.
The amounts available for reallocation will be adjusted to reflect any
partial withdrawals allocated to the Guaranteed Division, as discussed
below.
Automatic Transfer of Interest Option
You may choose to have all of the interest earned in the Guaranteed
Division, less charges allocated to this division, during each
processing period automatically transferred to the Account on each
processing date. The interest earned, less charges, will be allocated
to the divisions in which you are invested in proportion to your
investment value in each division unless you specify otherwise. If
you are not invested in any divisions of the Account we will allocate
the interest earned, less charges, to the Specially Designated
Division. You may choose to elect or cancel this option by sending us
a satisfactory notice to our Customer Service Center.
<PAGE>
<PAGE>
The General Account
- --------------------------------------------------------------------
Policy Number Initial Premium Face Amount
[123456] [$50,000] [$150,000]
- --------------------------------------------------------------------
Owner Insured Joint Insured
[John Public] [John Public] [Jane Public]
- --------------------------------------------------------------------
Policy Loans
If any portion of you investment value is allocated to the Guaranteed
Division, policy loans and repayments will be allocated pro rata to
the divisions of the Account and the Guaranteed Division. If a policy
loan or portion of a policy loan is allocated to the Guaranteed
Division, investment value equal to the allocated portion of the
policy loan will be transferred from the Guaranteed Division to our
general account as collateral for that portion of the policy loan. If
a loan repayment is allocated to the Guaranteed Division, the amount
allocated to the division will be treated as a new allocation to the
Guaranteed Division and will be credited with interest at the declared
interest rate in effect for that policy year. Any such allocations
from this division will reduce the amount available for reallocation.
Deductions for Charges
Unless you have elected the Charge Deduction Division, a pro rata
portion of the deferred load, administrative charge, mortality cost,
loan charge and any partial withdrawal or excess allocation charge
will be deducted from the investment value in the Guaranteed Division.
If a portion of your investment value is allocated to the Guaranteed
Division, we will reimburse the portion of the deferred load
installments applicable to the Guaranteed Division as they are
recovered on each processing date during the first policy year. If
you surrender the policy, we will deduct the total amount of any
remaining deferred loading from the amount we pay you.
Limitations on Partial Withdrawals
The investment value in the Guaranteed Division may be withdrawn only
within [30] days after a policy anniversary and is subject to the same
restrictions as described under Reallocations, above. If the sum of
any reallocations during this period and the pro rata or specified
portion of the partial withdrawal is greater than the amount allowed
by the Guaranteed Division allocation restrictions, the maximum
allowable partial withdrawal amount will be allocated to the
Guaranteed Division and any balance will be allocated pro rata to the
divisions of the Account. Unless you specify otherwise, partial
withdrawals during this period will be allocated pro rata to the
divisions of the Account and the Guaranteed Division. Any such
deductions from this division will reduce any amount available for
reallocation.
Right to Exchange
If you are exercising your right to exchange this policy for a fixed
benefit life insurance policy, any limitation on allocations described
above will not apply, and you may reallocate all of the investment
value under your policy to this division at any time within the first
eighteen months of your policy.
Other Divisions
We may from time to time offer other divisions where assets are held
in our general account.
<PAGE>
<PAGE>
Policy Facts 3D
- --------------------------------------------------------------------
Policy Number Initial Premium Face Amount
[123456] [$50,000] [$150,000]
- --------------------------------------------------------------------
Owner Insured Joint Insured
[John Public] [John Public] [Jane Public]
- --------------------------------------------------------------------
Separate Account
Separate Account A
- --------------------------------------------------------------------
Policy Processing Date
Policy processing dates are the days when we deduct charges from the
investment value, even though they might be incurred earlier. The
policy processing dates for your policy are [April 5th] of each year.
Policy Processing Period
The first policy processing period is the period from the policy date
to the first policy processing date. After that, a policy processing
period is the period between successive policy processing dates.
Specially Designated Division
When a distribution is made from an investment portfolio underlying a
separate account division in which reinvestment is not available, we
will allocate the amount of the distribution to the [Liquid Asset
Division] unless you specify otherwise.
Mortality Table and Interest Rate used in Our Computations
Insured: [MORTALITY TABLE HERE] [For attained ages up to and
including age 19 the aggregate table will be used. Thereafter the
smoker table will be used unless non-smoker status has been applied
for and granted.]
Joint Insured: [MORTALITY TABLE HERE] [For attained ages up to and
including age 19 the aggregate table will be used. Thereafter the
smoker table will be used unless non-smoker status has been applied
for and granted.]
[Interest at 4% per year].
<PAGE>
<PAGE>
Policy Loan Rules
The maximum loan value percentage is [90%].
The minimum amount of any loan is [$1,000].
The minimum repayment amount is the lesser of [$1,000] and the amount
of the loan. The loan interest rate is [5%] per year, due and payable
on each policy anniversary.
Initial Guarantee Period
The initial guarantee period expires on [April 1, 1998_].
Maturity Date of this Policy
The policy matures on [January 1, 2035].
Optional Benefit Riders, if any
[Charge Deduction Division Rider] [(Not applicable.)]
[Partial Withdrawal Rider]
<PAGE>
<PAGE>
Expense Charges 3E1
- --------------------------------------------------------------------
Policy Number Initial Premium Face Amount
[123456] [$50,000] [$150,000]
- --------------------------------------------------------------------
Owner Insured Joint Insured
[John Public] [John Public] [Jane Public]
- --------------------------------------------------------------------
Separate Account
Separate Account A
- --------------------------------------------------------------------
Deductions from Additional Premiums
Premium Taxes
[None]
Deductions from the Investment Value
Initial Administrative Charge
[None]
Quarterly Administrative Charge
[None]
Quarterly Recovery of Deferred Policy Loading
[None]
Loan Charge
We charge [1.00%] of your policy loan amount on each policy
anniversary, accrued daily.
Excess Allocation Charge
If you make more than five allocation changes during a policy year, we
will impose a [$25] charge at the time each additional allocation is
processed. The charge will be deducted in proportion to the amount
being transferred from each division.
<PAGE>
<PAGE>
Expense Charges 3E2
- --------------------------------------------------------------------
Policy Number Initial Premium Face Amount
[123456] [$50,000] [$150,000]
- --------------------------------------------------------------------
Owner Insured Joint Insured
[John Public] [John Public] [Jane Public]
- --------------------------------------------------------------------
Separate Account
Separate Account A
- --------------------------------------------------------------------
Deductions from the Separate Account Divisions
Mortality and Expense Risk Charge
We charge a daily rate of [0.002477%] of the assets in each division
(equivalent to an annual rate of [0.90%]) for mortality and expense
risks.
Asset Based Administrative Charge
We charge a daily rate of 0.000276% of the assets in each division of
the Account (equivalent to an annual rate of 0.10%) to cover a portion
of the policy administration.
<PAGE>
<PAGE>
Insurance Charges 3F
- --------------------------------------------------------------------
Policy Number Initial Premium Face Amount
[123456] [$50,000] [$150,000]
- --------------------------------------------------------------------
Owner Insured Joint Insured
[John Public] [John Public] [Jane Public]
- --------------------------------------------------------------------
Separate Account
Separate Account A
- --------------------------------------------------------------------
Mortality Cost
The mortality cost is deducted from the investment value on each
policy processing date. The guaranteed maximum cost of insurance
rates per $1,000 of the net amount at risk are shown below.
TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES
(Quarterly Rates per $1,000 of Net Amount at Risk)
Policy COI Policy COI Policy COI
Year Rate Year Rate Year Rate
------ ------ ------ ------- ------ ---------
1 .00067 26 .59317 51 32.61385
2 .00218 27 .70536 52 37.00999
3 .00399 28 .84278 53 41.72058
4 .00616 29 1.01105 54 46.73954
5 .00874 30 1.21229 55 52.11409
6 .01192 31 1.44865 56 57.87959
7 .01573 32 1.72414 57 64.23938
8 .02015 33 2.03816 58 71.46431
9 .02544 34 2.39934 59 80.22655
10 .03161 35 2.82032 60 92.06771
11 .03904 36 3.31997 61 110.37960
12 .04767 37 3.92133 62 143.18332
13 .05781 38 4.65199 63 212.55763
14 .06964 39 5.53184 64 270.08071
15 .08381 40 6.56406 65 333.33333
16 .10050 41 7.75180
17 .12081 42 9.09063
18 .14516 43 10.58108
19 .17480 44 12.23753
20 .21006 45 14.10334
21 .25177 46 16.23831
22 .30081 47 18.70798
23 .35688 48 21.57777
24 .42238 49 24.86748
25 .50051 50 28.55748
Rates shown are based on each insured's attained age, smoking status
and underwriting class as of the policy date and each policy
anniversary. They do not change during a policy year.] For attained
ages up to and including age 19 the aggregate table will be used.
Thereafter the smoker table will be used unless non-smoker status has
been applied for and granted. For attained ages up to and including
age 19 the aggregate table will be used. Thereafter the smoker table
will be used unless non-smoker status has been applied for and
granted.
Minimum Death Benefit Guarantee Cost
See Quarterly Recovery of Deferred Policy Loading
<PAGE>
<PAGE>
Net Single Premium Factors 3G
- --------------------------------------------------------------------
Policy Number Initial Premium Face Amount
[123456] [$50,000] [$150,000]
- --------------------------------------------------------------------
Owner Insured Joint Insured
[John Public] [John Public] [Jane Public]
- --------------------------------------------------------------------
Separate Account
Separate Account A
- --------------------------------------------------------------------
[TABLE OF NET SINGLE PREMIUM FACTORS
(Factors Per $1,000 of Cash Surrender Value)
/R/IF PAGE3GA="(U)"
Policy NSP Policy NSP Policy NSP
Year Factor Year Factor Year Factor
------ ------ ------ ------- ------ ---------
1 6.68170 26 2.38178 51 1.20435
2 5.96589 27 2.29746 52 1.18755
3 5.73667 28 2.21694 53 1.17215
4 5.51644 29 2.14016 54 1.15793
5 5.30484 30 2.06704 55 1.14463
6 5.10156 31 1.99751 56 1.13202
7 4.90628 32 1.93143 57 1.11982
8 4.71871 33 1.86870 58 1.10776
9 4.53855 34 1.80914 59 1.09554
10 4.36552 35 1.75263 61 1.08291
11 4.19936 36 1.69906 61 1.06977
12 4.03981 37 1.64837 62 1.05631
13 3.88663 38 1.60054 63 1.04342
14 3.73958 39 1.55558 64 1.03406
15 3.59842 40 1.51350 65 1.02207
16 3.46296 41 1.47422 66 1.00000
17 3.33298 42 1.43762
18 3.20830 43 1.40354
19 3.08876 44 1.37177
20 2.97418 45 1.34212
21 2.86440 46 1.31446
22 2.75926 47 1.28871
23 2.65859 48 1.26485
24 2.56222 49 1.24287
25 2.46999 50 1.22274
Factors shown are based on each insured's attained age, smoking status
and underwriting class, as of the policy date and each policy
anniversary after that. For attained ages up to and including age 19
the aggregate table will be used. Thereafter the smoker table will be
used unless non-smoker status has been applied for and granted. For
attained ages up to and including age 19 the aggregate table will be
used. Thereafter the smoker table will be used unless non-smoker
status has been applied for and granted.
On policy processing dates not shown, we determine the Net Single
Premium Factor in a consistent manner with allowance for time elapsed.
The Net Single Premium Factor on a date during a policy processing
period is determined by interpolating between the factors for the
policy processing date immediately preceding and immediately following
that date. For the first policy processing period, the starting point
is the policy date.
Adjustment of Net Single Premium Factors
To keep the policy qualified as life insurance under federal income
tax laws or regulations, we will adjust the net single premium factors
to reflect guarantees provided under the Guaranteed Division. We will
make the adjustment for the year after an additional premium payment
or partial withdrawal is made if it increases or decreases the face
amount. The net single premium factor for the first policy year has
been adjusted to reflect the guarantees in the Guaranteed Division.]
<PAGE>
<PAGE>
Income Plan Factors 3H
- --------------------------------------------------------------------
Policy Number Initial Premium Face Amount
[123456] [$50,000] [$150,000]
- --------------------------------------------------------------------
Owner Insured Joint Insured
[John Public] [John Public] [Jane Public]
- --------------------------------------------------------------------
Separate Account
Separate Account A
- --------------------------------------------------------------------
[Values for other payment periods, ages, or joint life combinations
are available on request. Monthly payments are shown for each $1,000
applied.
Table for Income for a Fixed Period
Fixed Period Monthly Fixed Period Monthly Fixed Period Monthly
of Years Income of Years Income of Years Income
- ------------ ------- ------------ ------- ------------ -------
1 $84.68 11 $8.88 21 $5.33
2 42.96 12 8.26 22 5.16
3 29.06 13 7.73 23 5.00
4 22.12 14 7.28 24 4.85
5 17.95 15 6.89 25 4.72
6 15.18 16 6.54 26 4.60
7 13.20 17 6.24 27 4.49
8 11.71 18 5.98 28 4.38
9 10.56 19 5.74 29 4.28
10 9.64 20 5.53 30 4.19
<PAGE>
<PAGE>
Table for Income for Life
Male/Female Male/Female Male/Female
Age 10 Years Certain 20 Years Certain Refund Certain
- ---- ---------------- ---------------- --------------
50 $4.93/4.52 $4.68/4.40 $4.74/ 4.42
55 5.45/4.96 4.99/4.72 5.16/ 4.79
60 6.11/5.52 5.30/5.07 5.75/ 5.29
65 6.91/6.26 5.54/5.40 6.52/ 5.97
70 7.79/7.18 5.68/5.62 7.33/ 6.74
75 8.61/8.18 5.75/5.73 8.61/ 7.90
80 9.24/9.01 5.77/5.76 10.43/ 9.50
85 & Over 9.62/9.52 5.77/5.77
12.16/10.98]
Age of Female 50 55 60 65 70
50 3.63 3.74 3.82 3.89 3.93
55 3.82 3.99 4.13 4.25 4.33
60 4.00 4.25 4.48 4.68 4.84
65 4.16 4.49 4.83 5.15 5.44
70 4.29 4.70 5.15 5.64 6.12
<PAGE>
<PAGE>
Introduction to this Policy
You are the owner of this policy. This policy insures your life and
the life of the joint insured unless other insureds have been named in
the application. The insureds are shown on Page 3A. You, as the
owner, have the rights and options described in this policy.
This Policy is a Contract
This policy is a legal contract between you and us. We provide
insurance coverage and other benefits as stated in this policy. We do
this in return for a completed application and the required initial
premium payment. Whenever we use the word policy, we mean the entire
contract. The entire contract consists of:
(1) the basic policy;
(2) the attached copy of the initial application;
(3) all subsequent applications to change the basic policy; and
(4) any optional benefit riders or endorsements.
Optional benefit riders and endorsements add provisions or change the
terms of the basic policy.
Key Dates and Ages Referred to in this Policy
Issue Date
This is the date this policy is issued at our Customer Service Center.
The contestable and suicide periods are measured from this date. See
Page 3A.
Policy Date
This date is used to determine policy processing dates, policy years
and anniversaries. The policy date may or may not be the same as the
date of issue. See Page 3A.
Issue Age
This is each insureds' age on his or her last birthday on or before
the policy date. See Page 3A.
Attained Age
For each insured, this is the issue age plus the number of full years
elapsed since the policy date.
Right to Name a Contingent Owner
You may name a contingent owner. You may want to do this in case you
die before a death benefit is payable under this policy. Ownership of
this policy would then pass to the contingent owner. If there is no
contingent owner, ownership would pass to your estate.
The Beneficiary
The beneficiary is the person to whom we pay the death benefit
proceeds upon the death of the last surviving insured. We pay the
proceeds to the primary beneficiary. If the primary beneficiary dies
before the last surviving insured, the proceeds are paid to the
contingent beneficiary, if any. If there is no surviving beneficiary,
we pay the proceeds to the last surviving insured's estate.
One or more persons may be named as primary beneficiaries or
contingent beneficiaries. In the case of more than one beneficiary,
we will assume the proceeds are to be paid in equal shares to the
surviving beneficiaries. You can specify other than equal shares.
You have the right to change beneficiaries, unless you designate the
primary beneficiary irrevocable. When an irrevocable beneficiary has
been designated, you and the irrevocable beneficiary must act together
to exercise the rights and options under this policy.
Change of Owner or Beneficiary
During either insured's lifetime and while this policy is in effect,
you can transfer ownership of this policy, change the contingent
ownership, or change the beneficiary. To do this, you must send us
written notice of the change in a form satisfactory to us. The change
will take effect as of the day the notice is signed, but will not
affect any payments made or action taken by us before we record the
notice.
<PAGE>
<PAGE>
Premium Payments and Allocation Changes
- ---------------------------------------------------------------------
Initial Premium Payment
The initial payment is required to put this policy in effect. The
amount and allocation of the initial premium payment is shown on Page
3A.
Additional Premium Payments
If both insureds are alive, you may make additional premium payments
under this policy after the end of the free look period. Additional
premium payments are subject to the restrictions shown on Page 3A and
may be subject to evidence of insurability based on our underwriting
rules. We reserve the right to return any additional premium payments
that we believe would cause this policy to fail to qualify as life
insurance under applicable tax laws.
Unless you specify otherwise, if there is any policy debt, any
additional premium payment will be used first as a loan repayment with
any excess applied as an additional premium. See Policy Loans.
As of the date we receive and accept your additional premium payment:
(1) The variable insurance amount will increase.
(2) Any deferred policy loading will increase. Any such increase
will be recovered in level installments from this policy's
investment value. See Page 3E for details.
(3) The tabular value will increase by the amount of the payment less
any premium deduction and less any deferred policy loading
applicable to such payment as shown on Page 3E. See Tabular
Value.
The guaranteed benefits will increase as of the policy processing date
on or next following the date we receive and accept the additional
premium payment. See How We Determine the Guarantee Period and Face
Amount.
Where to Make Payments
Remit the premium payments to our Customer Service Center at the
address shown on the cover page. On request we will give you a
receipt signed by our treasurer.
Allocation of Additional Premium Payments
As of the date we receive and accept an additional premium payment,
the increase in the investment value will be allocated among the
separate account and general account divisions in accordance with your
instructions. If no such instructions are received by us, allocation
will be among the divisions in proportion to the amount of investment
value in each division as of the date we receive and accept the
payment.
Your Right to Reallocate Investment Value among Divisions
You can reallocate the investment value among the divisions after the
end of the free look period. The number of allocation changes that we
will allow each policy year is shown on Page 3A. To make an
allocation change, you must provide us with satisfactory notice at our
Customer Service Center. The change will take effect when we receive
the notice. Some general account divisions may have restrictions on
reallocations. See Page 3C.
<PAGE>
<PAGE>
Premium Payments and Allocation Changes (continued)
What Happens if a Separate Account Division is not Available
When a distribution is made from a managed separate account division
or from an investment portfolio supporting a unit investment trust
separate account division in which reinvestment is not available, we
will allocate the distribution to the Specially Designated Division
shown on Page 3D unless you specify otherwise.
Such a distribution can occur when an investment portfolio or division
matures; when a distribution from a portfolio or division can not be
reinvested in the portfolio or division due to the unavailability of
securities; or for other reasons. When this occurs because of
maturity, we will notify you 30 days in advance of such date. To
elect an allocation to other than the Specially Designated Division
shown on Page 3D, you must provide satisfactory notice to us at least
seven days prior to the date the investment matures. Such allocations
will not be counted as an allocation change of the investment value
for purposes of the number of free changes permitted.
<PAGE>
<PAGE>
How We Measure a Policy's Investment Value
The variable life insurance benefits under this policy are provided
through investments which may be made in our separate and general
accounts.
The Separate Accounts
These accounts, which are designated on Page 3B, are kept separate
from our general account and any other separate accounts we may have.
They are used to support variable life insurance policies and may be
used for other purposes permitted by applicable laws and regulations.
We own the assets in the separate accounts. Assets equal to the
reserves and other liabilities of each separate account will not be
chargeable with liabilities that arise from any other business we
conduct, but we may transfer to our general account assets which
exceed the reserves and other liabilities of the separate accounts.
Income, realized and unrealized gains or losses from assets in a
separate account are credited to or charged against the account
without regard to other income, gains or losses in our other
investment accounts.
One type of separate account will invest in mutual funds, unit
investment trusts and other investment portfolios which we determine
to be suitable for this policy's purposes. This separate account is
treated as a unit investment trust under Federal securities laws. It
is registered with the Securities and Exchange Commission (SEC) under
the Investment Company Act of 1940. The separate account is also
governed by state laws as designated on Page 3B.
One type of separate account will invest directly in portfolio
securities deemed appropriate by the investment adviser and the
committee managing the separate account. This separate account is
treated as an open end, diversified management investment company
under Federal securities laws. It is registered with the Securities
and Exchange Commission (SEC) under the Investment Company Act of
1940. The separate account is also governed by state laws as
designated on Page 3B.
Separate Account Divisions
A unit investment trust separate account includes divisions, each
investing in a designated investment portfolio. The divisions and the
investment portfolios in which they invest, if applicable, are
specified on Page 3B. Some of the portfolios designated may be
managed by a separate investment adviser. Such adviser may be
registered under the Investment Advisers Act of 1940.
A managed separate account includes divisions, each investing directly
in portfolios of securities designed to meet the objectives of the
division. The divisions, if applicable and their objectives are
specified on Page 3B. Some of the divisions designated may be managed
by a separate investment adviser. Such adviser may be registered
under the Investment Advisers Act of 1940.
Changes Within the Separate Account
We may from time to time make additional separate account divisions
available. These divisions will invest in investment portfolios we
find suitable for this policy. We also have the right to eliminate
divisions from the separate account, to combine two or more divisions,
or to substitute a new portfolio for the portfolio in which a division
invests. A substitution may become necessary if, in our judgment, a
portfolio no longer suits the purposes of this policy. This may
happen due to a change in laws or regulations, or a change in a
portfolio's investment objectives or restrictions, or because the
portfolio is no longer available for investment, or for some other
reason. We will get any required approval from the insurance
department of our state of domicile before making such a substitution.
This approval process is on file with the insurance department of the
jurisdiction in which this policy is delivered. We will also get any
required approval from the SEC and any other required approvals before
making such a substitution.
Subject to any required regulatory approvals, we reserve the right to
transfer assets of the separate account or of a division, which we
determine to be associated with the class of policies to which this
policy belongs, to another separate account or division.
<PAGE>
<PAGE>
How We Measure a Policy's Investment Value (continued)
When permitted by law, we reserve the right to:
(1) deregister the separate account under the Investment Company Act
of 1940;
(2) operate the separate account as a management company under the
Investment Company Act of 1940, if it is operating as a unit
investment trust;
(3) operate the separate account as a unit investment trust under the
Investment Company Act of 1940, if it is operating as a managed
separate account;
(4) restrict or eliminate any voting rights of policyowners, or other
persons who have voting rights as to the separate account; and
(5) combine the separate account with other separate accounts.
The General Account
The general account contains all of the assets of the company other
than those in the separate accounts we establish.
Guaranteed Interest Division
This division provides for a guarantee of principal (less charges) for
the amounts allocated to this division. We will periodically
determine an interest rate of not less than 4% per year, that will be
credited to that division.
Other Divisions
We may from time to time offer other divisions where assets are held
in our general account.
Valuation Period
Each division will be valued at the end of each valuation period on a
valuation date. A valuation period is each business day together with
any non-business days before it. A business day is any day the New
York Stock Exchange (NYSE) is open for trading, or any day in which
the SEC requires that mutual funds, unit investment trusts or other
investment portfolios be valued.
Investment Value
The investment value is the amount that this policy provides for
investment at any time. It is the sum of the amount of investment
value in each of the separate account and general account divisions.
You select the separate account and general account divisions to which
to allocate the investment value. The maximum number of divisions to
which the investment value may be allocated at any one time is shown
on Page 3A.
Amount of Investment Value in Each Division
On the Policy Date
On the policy date, the investment value is allocated to each division
as shown on Page 3A.
On each Valuation Date
At the end of each subsequent valuation period, the amount of
investment value in each division will be calculated as follows:
(1) We take the amount of investment value in the division at the end
of the preceding valuation period.
(2) We multiply (1) by the division's net rate of return for the
current valuation period.
(3) We add (1) and (2).
(4) We add to (3) any additional premium payments (less any premium
deductions as shown on Page 3E) allocated to the division during
the current valuation period.
(5) We add or subtract allocations to or from the division during the
current valuation period.
(6) We add to (5) any loan repayments received and subtract from (5)
any loans which are allocated to the division during the current
valuation period.
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How We Measure a Policy's Investment Value (continued)
(7) If a policy processing date occurs during the current valuation
period, we subtract from (6) the amounts allocated to the
division for:
(a) expense charges as shown on Page 3E; and
(b) insurance charges as shown on Page 3F and the mortality cost
as shown below.
All amounts in (7) will be allocated to each division in the
proportion that (6) bears to the investment value.
(8) If the charges in (7) exceed the amount in (6), we will first
calculate the cash surrender value to determine the amount of any
overdue charges and then set the amount of investment value in each
division to zero.
Charges Deducted from Investment Value on each Policy Processing Date
SEE ENDORSEMENT
Mortality Cost
We will deduct the mortality cost on each policy processing date as
follows:
(1) We determine the policy's net amount at risk on the same day of
each month in the policy processing period starting with the
previous policy processing date. The net amount at risk on each
date is:
(a) the death benefit as of that date, less
(b) the sum of the cash surrender value and any policy debt as
of that date.
(2) We adjust each net amount at risk in (1) for interest at the rate
used in our computations which is shown on Page 3D to reflect
that:
(a) we assume claims are paid immediately upon the death of the
last surviving insured, and
(b) we deduct the mortality cost at the end of each policy
processing period.
(3) We add the three monthly amounts in (2) and divide by three to
determine the average net amount at risk for the period.
(4) We divide (3) by $1,000.
(5) We determine the current cost of insurance rate per $1,000 of net
amount at risk based on the insureds' sexes, attained ages,
underwriting classes and the value of (4) above. If the
insureds' underwriting classes change as a result of an
additional premium payment, we will determine the current cost of
insurance rate per $1,000 of net amount at risk separately for
increases in death benefit after the effective date of such
increase.
(6) We multiply (4) by (5).
In no event will (6) be greater than the amount determined by
substituting the tabular value for the cash surrender value in (1)(b)
above and the guaranteed maximum cost of insurance rate for the
current cost of insurance rate per $1,000 in (5).
We may change the current cost of insurance rates per $1,000 from time
to time. Any change in the current rates will be as described in
Changes in Expense Charges and Insurance Charges. They will never be
more than the guaranteed maximum cost of insurance rates per $1,000
shown on Page 3F. The mortality cost during a policy processing
period is calculated in a similar manner with allowance for time
elapsed.
Other Deductions from Investment Value
Expense charges, including administrative and other fees, and recovery
of any deferred policy loading, are shown on Page 3E. The charges for
any minimum death benefit guarantee, and the cost of any benefits from
optional benefit riders, are shown on Page 3F. The net loan cost is
described in the Policy Loans provision.
Tabular Value
The tabular value on the policy date equals investment value on that
date. Thereafter, the tabular value is calculated the same as the
cash surrender value except the mortality cost will be based on the
guaranteed maximum cost of insurance rates and the net rate of return
will be based on the interest rate used in our computations, as shown
on Page 3D. The tabular value calculations do not reflect loans,
repayments, expense charges, or minimum death benefit guarantee costs.
In the calculation of the tabular value, the variable insurance amount
on any date is equal to the tabular value as of such date multiplied
by the net single premium factor as of such date.
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How We Measure a Policy's Investment Value (continued)
Measurement of Investment Experience
Index of Investment Experience
The investment experience of a separate account division is determined
on each valuation date. We use an index to measure changes in each
division's experience during a valuation period. We set the index at
$10 when the first investments in each division are made. The index
for a current valuation period equals the index for the preceding
valuation period multiplied by the experience factor for the current
period.
How We Determine the Experience Factor
For divisions investing in unit investment trusts the experience
factor reflects the investment experience of the portfolio in which
the division invests as well as the charges assessed against the
division for a valuation period. The factor is calculated as follows:
(1) We take the net asset value of the portfolio in which the
division invests as of the end of the current valuation period.
(2) We add to (1) the amount of any dividend or capital gains
distribution for the investment portfolio declared during the
current valuation period and reinvested in the portfolio. We
subtract from that amount a charge for our taxes, if any.
(3) We divide (2) by the net asset value of the portfolio at the end
of the preceding valuation period.
(4) We subtract the daily mortality and expense risk charge for each
division shown on Page 3E for each day in the valuation period.
This charge is to cover expense and mortality risks that we are
assuming.
(5) For certain divisions, we subtract an additional charge equal to
the daily charge shown on Page 3E for each day in the valuation
period.
Calculations for divisions investing in unit investment trusts are on
a per unit basis. Calculations for divisions investing in mutual fund
portfolios are made on a per share basis.
For divisions of a managed separate account investing directly in
portfolio securities, the experience factor reflects the investment
experience of the division as well as the charges assessed against the
division for a valuation period. The factor is calculated as follows:
(1) Take the value of the assets in the division at the end of the
preceding valuation period.
(2) Add to (1) any investment income and capital gains, realized or
unrealized, credited to the assets during the current valuation
period.
(3) Subtract from (2) any capital losses, realized or unrealized,
charged against the assets during the current valuation period.
(4) Subtract from (3) any amount charged against the division for any
taxes.
(5) Divide (4) by the value of the assets in the division at the end
of the preceding valuation period.
(6) Subtract from (5) a charge for operating expenses actually
incurred.
(7) Subtract from (6) the charge for investment management as shown
on Page 3E.
(8) Subtract from (7) the charge for mortality and expense risks as
shown on page 3E.
Net Rate of Return for Separate Account Division
The net rate of return for a separate account division during a
valuation period is the experience factor for that valuation period
minus one.
Net Rate of Return for Guaranteed Interest Division
The net rate of return for the Guaranteed Interest Division for a
valuation period is the rate for the number of days in the valuation
period equivalent to the effective annual interest rate declared for
that division.
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Your Policy Benefits
There are important rights and benefits that are available to you as
the owner of this policy during the lifetime of either insured. We
discuss these rights and benefits in this section.
Cash Value Benefit
Cash Surrender Value
The cash surrender value is determined as follows:
(1) We take the policy's investment value;
(2) We deduct any unrecovered deferred policy loading;
(3) We deduct any expense charges shown on Page 3E and insurance
charges shown on Page 3F that have been incurred but not yet
deducted, including:
(a) any first year administrative charge;
(b) any quarterly administrative charge to be deducted on the
next policy processing date;
(c) any net loan charge accrued since the last policy
processing date;
(d) the pro rata part of the mortality cost since the last
policy processing date;
(e) the pro rata part of any minimum death benefit risk premium;
and,
(f) the pro rata part of any charges for optional benefit
riders.
Surrendering to Receive the Cash Surrender Value
You may surrender this policy at any time and receive its cash
surrender value. The cash surrender value may be paid in cash or
under one or more income plans. See Choosing an Income Plan. To
surrender this policy you must return it to our Customer Service
Center with a signed request for surrender in a form satisfactory to
us. The surrender will take effect on the date this policy and the
request are sent to us. The cash surrender value will vary daily. We
will determine the cash surrender value as of the date we receive this
policy and the signed request at our Customer Service Center. We will
usually pay the cash surrender value within seven days, but we may
delay payment as described in the Payments We may Defer provision.
Policy Loans
You may borrow money from us. This policy will be the only security
we require for the loan. A loan may be taken any time this policy is
in effect after the free look period. You may repay all or part of
the loan at any time while the policy is in effect.
When We will Make the Loan
We will usually loan the money within seven days after we receive a
request satisfactory to us, but we may delay making the loan as
described in the Payments We may Defer provision. If the loan is to
be used to pay premiums on another life insurance policy offered by
us, we will make the loan immediately.
Loan Value
The maximum loan value percentage is shown on Page 3D. The amount of
the loan may not exceed the sum of the cash surrender value plus any
existing policy debt, multiplied by the maximum loan value percentage.
Any existing policy debt will be deducted from a new loan. The
minimum permissible amounts of any loan and repayment are shown on
page 3D.
Loan Interest
The loan interest rate is shown on Page 3D. Interest accrues (builds
up) each day. Interest payments are due as shown on Page 3D. If
interest is not paid when due, it will be added to the amount of the
loan. The sum of all outstanding loans plus accrued interest is
called the policy debt.
Interest payments when received will be allocated among the divisions
in accordance with your instructions. If no instructions are received
by us, we will allocate the interest payments in proportion to the
amount of investment value in each division.
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Your Policy Benefits (continued)
Effect of a Loan
A loan will be transferred out of the divisions and a repayment will
be transferred into the divisions. A policy loan reduces the
investment value while repayment of a loan will cause an increase in
the investment value. Unless you specify otherwise, loans and
repayments will be allocated in proportion to the amount of investment
value in each division as of the date of the loan or repayment.
A loan, whether or not repaid, will have a permanent effect on the
cash surrender values and may have a permanent effect on the death
benefits. See How We Measure a Policy's Investment Value. If not
repaid, the policy debt will reduce the amount of death benefit
proceeds and cash surrender value.
If, on any valuation date, there is policy debt outstanding and the
cash surrender value is negative, we will terminate the policy. We
will not do this, however, until 31 days after we send you an overloan
notice. We will notify you and anyone who holds this policy as
collateral at their last known address.
Net Loan Cost
The net loan cost will be calculated on each policy processing date as
follows:
(1) We determine the outstanding policy loan(s) since the previous
policy anniversary.
(2) We multiply (1) by the daily loan charge shown on Page 3E taking
account of the time elapsed.
Loans and repayments during a policy processing period will affect our
calculations.
Right to Exchange for Fixed Life Insurance
We must provide you with an option during the first 18 months to
exchange this policy for a joint and last survivor life insurance
policy on the lives of the insureds under which the benefits do not
vary with the investment experience of a separate account. In effect,
we make this option available to you by permitting you to reallocate
all of the policy's investment value to the Guaranteed Interest
Division of the general account. If, at any time during the first 18
months, you request an allocation change of all of this policy's
investment value from the separate account divisions to the Guaranteed
Interest Division and indicate in a form satisfactory to us that you
are making the allocation change in exercise of your exchange right,
we will reallocate the investment value of this contract to the
Guaranteed Interest Division without charge. At the time of such
election, there is no effect on the policy's face amount, net amount
at risk, underwriting classes, or issue ages.
After exercise of this exchange right, we will automatically credit
all future premium payments and deduct loans from the Guaranteed
Interest Division.
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Insurance Benefits
Variable Insurance Amount
The variable insurance amount on the policy date equals the cash
surrender value as of such date multiplied by the net single premium
factor on such date. Thereafter, the variable insurance amount will
vary daily based on the investment results and any premium payments
made. The variable insurance amount will be determined as of each
date after the policy date as follows:
(1) We determine the cash surrender value of this policy as of such
date.
(2) We add to (1) any policy debt as of such date.
(3) We multiply (2) by the net single premium factor as of such date,
shown on page 3G.
In no event will the variable insurance amount be less than that
required to keep this policy qualified as life insurance under the
Federal income tax laws.
Proceeds Payable to the Beneficiary
We will pay the death benefit proceeds to the beneficiary upon the
death of the last surviving insured. The proceeds may be paid in cash
or under one or more income plans. See Choosing an Income Plan.
Death Benefit Proceeds
Death benefit proceeds are determined as follows:
(1) We determine this policy's death benefit, which is the larger of
the face amount and the variable insurance amount.
(2) We subtract from (1) any policy debt.
(3) We add to (2) any amounts due from optional benefit riders.
The values above will be those as of the date of death of the last
surviving insured. If the last surviving insured dies during the
grace period, we will pay the beneficiary the death benefit proceeds
in effect immediately prior to the grace period reduced by any overdue
charges. The death benefit will never be less than that required to
keep this policy qualified as life insurance under the Federal income
tax laws.
If the death benefit is payable after an additional premium payment
has been accepted and before the next policy processing date, we will
pay the beneficiary the larger of:
(1) the amount of the death benefit calculated as of the prior policy
processing date plus the amount of the additional premium
payment; and
(2) the variable insurance amount as of the date of death.
The amount paid to the beneficiary will be reduced by the amount of
any policy debt and any overdue charges if the policy is in a grace
period.
How to Claim Death Benefit Proceeds
The beneficiary should contact our Customer Service Center for
instructions. We will usually pay the proceeds within seven days
after we receive due proof of the death of each of the insureds, and
any other requirements. We may delay payment of all or part of the
death benefit proceeds as described in the Payments We May Defer
provision. We will add interest to the death benefit proceeds at an
annual rate of at least 4% from the date of the last surviving
insured's death to the date of payment. Interest added to death
benefit proceeds will not be less than that required by any applicable
law.
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Insurance Coverage Period
How We Determine the Guarantee Period and Face Amount
On the Policy Date
The initial guarantee period and face amount on the policy date are
shown on Page 3D. The guarantee period and face amount are not
affected by investment results nor the allocation of the investment
value among the divisions. They will change as described below as a
result of any additional premium payments.
When an Additional Premium Payment is Made
The guaranteed benefits will increase as follows:
(1) We take the immediate increase in cash surrender value resulting
from the additional premium payment, and add interest for the
period from the date we receive and accept the additional premium
payment to the policy processing date on or next following such
date.
(2) If the guarantee period prior to payment is less than for life:
the total of (1) and the tabular value as of such policy
processing date will be used to calculate a new guarantee period.
Any part of such total in excess of the amount required to
increase the guarantee period to the whole of life will be
applied as in (3) below.
(3) If the guarantee period is for life: the amount from (1) or
excess amount from (2) above will be applied as a net single premium
for the whole of life to increase the face amount of this policy.
For these calculations we use the interest rate and mortality table
from Page 3D.
Termination of Policy after Guarantee Period
At any time after the end of the guarantee period, if the cash
surrender value on a policy processing date is negative, we will
notify you of our plan to terminate this policy. This negative cash
surrender value will be considered as an overdue charge as of such
policy processing date. We will not terminate this policy due to a
negative cash surrender value until the end of a grace period of 61
days from the date we mail the notice to you and anyone who holds this
policy as collateral, at their last known addresses.
To avoid termination, you must pay us at least the charges that were
due on the policy processing date on which we determined that the cash
surrender value was insufficient. This amount will be specified on
the notice we send. If the last surviving insured dies during the
grace period, we will pay the beneficiary the insurance benefits as
described in Proceeds Payable to the Beneficiary.
How to Reinstate this Policy
If we have terminated this policy at the end of the grace period, you
may reinstate it while both insureds are living if:
(1) You ask for reinstatement within three years from the end of the
grace period;
(2) We receive satisfactory evidence of the insureds' insurability;
and
(3) You pay us at least the reinstatement cost. The reinstatement
cost is the minimum payment for which we would then issue this
policy based on the insureds' attained ages as of the effective
date of the reinstated policy.
The effective date of the reinstated policy will be the policy
processing date on or next following the date we approve your
reinstatement application.
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Choosing an Income Plan
While this policy is in effect, you may choose one or more income
plans for the payment of death benefit proceeds. If, at the time of
the death of the last surviving insured, no plan has been chosen for
paying death benefit proceeds, the beneficiary may choose a plan
within one year. You may also elect an income plan on surrender of
the policy for its cash surrender value. For each plan we will issue
a separate written agreement putting the plan into effect.
Our approval is needed for any plan where:
(1) the person named to receive payment is other than the owner or
beneficiary; or
(2) the person named is not a natural person, such as a corporation;
or
(3) any income payment would be less than $500.
The Income Plans
There are four income plans to choose from. They are:
Plan 1. Income for a Fixed Period
Payment is made in equal installments for a fixed number of years. We
guarantee each monthly payment will be at least the Income For Fixed
Period amount shown on Page 3H. Values for annual, semiannual or
quarterly payments are available on request.
Plan 2. Income for Life
Payment is made to the person named in equal monthly installments and
guaranteed for at least a period certain. The period certain can be
10 or 20 years. Other periods certain are available on request. A
refund certain may be chosen 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 each payment will be at least the amount shown in the
Income for Life table on Page 3H. By age we mean the named person's
age on his or her last birthday before the plan's effective date.
Amounts for ages not shown are available on request.
Plan 3. Joint Life Income
This plan is available if there are two persons named to receive
payments. At least one of the persons named must be either the owner
or beneficiary of this policy. Monthly payments are made as long as
at least one of the named persons is living. The monthly payment
amounts are available upon request.
Plan 4. Annuity Plan
An amount can be used to buy any single premium annuity we offer on
the plan's effective date.
Payments when Named Person Dies
When the person named to receive payment dies, we will pay any amounts
still due as provided by the plan agreement. The amounts still due
are determined as follows:
(1) For plans 1, 2, or any remaining guaranteed payments, payments
will be continued. Under plans 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 3% for plan 1 and 3.5% for
plan 2. We will, however, base the discount interest rate on the
rate of interest used to calculate the payment for plans 1 and
2, if such payments were not based on the table in this policy.
(2) For plan 3, no amounts are payable after both named persons have
died.
(3) For plan 4, the annuity agreement will state the amount due, if
any.
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Other Important Information
Limits on Our Contesting this Policy
We rely on the statements made in the applications. Legally, they are
considered representations, not warranties. We can contest the
validity of this policy if any material misstatements are made in the
initial application, a copy of which is attached. We can also contest
any amount of death benefit which would not be payable except for the
fact that an additional premium payment was made if any material
misstatements are made in any application required with the premium
payment.
We will not contest the validity of this policy after this policy has
been in effect during the lifetime of both insureds for two years from
the date of issue. Nor will we contest any amount of death benefit
attributable to an additional premium payment after it has been in
effect during the lifetime of both insureds for two years from the
date we receive and accept such premium payment.
If this policy is reinstated, this provision will be measured from the
effective date of the reinstated policy.
Policy Values Reports
We will send you a report within 31 days after each policy processing
date shown on Page 3D. The report will show the death benefit, cash
surrender value and policy debt as of such date. The report will also
show the allocation of the investment value on such date and any
changes since the last report. The report will also include any other
information that may be currently required by the insurance
supervisory official of the jurisdiction in which this policy is
delivered.
Changing this Policy
This policy or any optional benefit riders may be changed to another
plan of insurance according to our rules at the time of the change.
Policy Changes - Applicable Tax Law
For you and the beneficiary to receive the tax treatment accorded to
life insurance under Federal law, this policy must qualify initially
and continue to qualify as life insurance under the Internal Revenue
Code or successor law. Therefore, to maintain this qualification to
the maximum extent permitted by law, we have reserved in this policy
the right to return any additional premium payments that would cause
this policy to fail to qualify as life insurance under applicable tax
law as interpreted by us. Further, we reserve the right to make
changes in this policy or its optional benefit riders or to make
distributions from this policy to the extent we deem it necessary to
continue to qualify this policy as life insurance. Any such changes
will apply uniformly to all policies that are affected. You will be
given advance written notice of such change.
Error in Ages or Sexes
If an insured's age or sex has been misstated on the application, the
death benefit shall be that which would be purchased by the mortality
cost determined for the current processing period based on the correct
age and sex. In addition, the benefit provided by any optional
benefit rider shall be the amount purchased by the rider deduction for
the current processing period based on the correct age and sex.
Sending Notice to Us
Any written notices or requests should be sent to our Customer Service
Center. The address is shown on the cover page. Please include your
name, policy number, and, if you are not one of the insureds, the
names of the insureds.
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Other Important Information (continued)
Suicide
If the last surviving insured commits suicide within two years from
the date of issue, while sane or insane, the death benefit will be
limited to the amount of the premium payments made.
If the last suriving insured commits suicide, while sane or insane,
within two years of any date we receive and accept an additional
premium payment, any amount of death benefit which would not be
payable except for the fact that the additional premium payment was
made will be limited to the amount of such premium payment. The death
benefit we will pay will be reduced by any policy debt.
Payments We May Defer
We may not be able to determine the value of the assets of the
separate account divisions because:
(1) the NYSE is closed for trading;
(2) the SEC determines that a state of emergency exists; or
(3) an order or pronouncement of the SEC permits a delay for the
protection of policyowners.
During such times, as to amounts allocated to the divisions of the
separate account(s), we may delay:
(1) determination and payment of the cash surrender value and loan
requests;
(2) determination and payment of any death benefit in excess of the
face amount if death occurs prior to the end of the guarantee
period; after the guarantee period we may delay determination and
payment of the entire death benefit; and
(3) allocation changes of the investment value.
As to amounts allocated to the Guaranteed Interest Division, we may,
at any time, defer payment of the cash surrender value or loan
requests for up to six months after we receive a request for it. We
will allow interest of at least 4% a year on any cash surrender value
payment derived from the Guaranteed Interest Division that we defer 30
days or more.
Establishing Survivorship
If we are unable to determine which of the insureds was the last
survivor on the basis of the proofs of death provided to us, we shall
consider the insured to be the last surviving insured.
Claims of Creditors
The proceeds of this policy will be free from creditors claims to the
extent allowed by law.
Assignment - Using this Policy as Collateral Security
The owner can assign this policy as collateral security for a loan or
other obligation. This does not change the ownership, but the owner's
rights and any beneficiary's rights are subject to the terms of the
assignment. To make or release an assignment, we must receive written
notice, satisfactory to us, at our Customer Service Center. We are
not responsible for the validity of any assignment, nor will the
assignment affect any payments made or actions taken by us before we
record the written notice.
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Other Important Information (continued)
Non-Participating
This policy does not participate in the divisible surplus of the
Golden American Life Insurance Company.
Authority to Make Agreements
All agreements made by us must be signed by our president or a vice
president and by our secretary or an assistant secretary. No other
person, including an insurance agent or broker, can:
(1) change any of this policy's terms; or
(2) make any agreements binding on us.
Changes in Expense Charges and Insurance Charges
Changes in expense charges or insurance charges will be by class and
based upon changes in future expectations for such elements as:
mortality, persistency, expenses and taxes. Any change in policy cost
factors will be determined in accordance with procedures and standards
on file, if required, with the insurance supervisory official of the
jurisdiction in which this policy is delivered.
Maturity Date of this Policy
On the maturity date of this policy shown on Page 3D, we will pay you
the cash surrender value if either insured is then living. The cash
surrender value may be paid in cash or under one or more income plans.
See Choosing an Income Plan.
Required Note on Our Computations
Our computations of reserves, cash surrender values, tabular value and
the maximum mortality costs are based on the mortality table and
interest at the rate shown on Page 3D. In calculating the maximum
mortality costs, we use the attained age, sex and underwriting classes
of both insureds and their individual mortality cost to determine
annual mortality costs for the joint and last survivor status. When
making our computations, we assume that death claims are paid
immediately.
We have filed a detailed statement of our computations with the
insurance supervisor of the state or jurisdiction where this policy is
delivered. All policy values equal or exceed those required by the
law of that state or jurisdiction. Any benefit provided by an
attached optional benefit rider will not increase these values unless
stated in that rider.
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Flexible Premium Joint and Last Survivor Variable Life Insurance
Variable life insurance payable upon death of the last surviving
insured. Death benefit subject to guaranteed minimum during Guarantee
Period. Guaranteed minimum is policy's face amount. Flexible premium
payments. Non-participating. Investment results reflected in policy
benefits.
Exhibit (5)(b)
GOLDEN Group Flexible Premium
AMERICAN Variable Life
LIFE INSURANCE Insurance
COMPANY Certificate
Golden American is a stock company domiciled in Minneapolis,
Minnesota.
Offices: 909 Third Avenue, 19th Floor, New York, New York 10022
Certificate of Insurance
Policyholder: [Golden Investors Trust] Group Policy Number: [G000001-
0E]
Certificate Owner: [John Doe] Certificate Number: [123456]
Insured: [John Doe] Issue Date: January 1, 1998
In this certificate "we", "our" and "us" refers to the Golden
American Life Insurance Company. "You" and "your" refers to the
owner shown above.
We certify that the person named as insured above is insured under
the group policy number shown above. All insurance will take effect
on the certificate date shown in the Certificate Schedule.
This certificate describes the benefits and provisions of the policy.
The policy, as issued to the policyholder by us, alone makes up the
agreement under which benefits are paid. The policy may be inspected
at the office of the policyholder.
This certificate may be returned before the end of the free look
period. This period ends 10 days after the date you receive this
certificate. The certificate should be mailed or delivered to the
Customer Service Center shown below. The returned certificate will
be treated as if we never issued it. We will promptly return the
investment value plus any charges we have deducted as of the date the
returned certificate is received by us.
Signed for Golden American Life Insurance Company on the issue date.
Customer Service Center Secretary:
MBL Variable, Inc.
Post Office Box 5179, FDR Station
New York, New York 10150-5179 President:
<PAGE>
<PAGE>
Group Flexible Premium Variable Life Insurance Certificate
Variable insurance payable upon death of the insured. Death benefit
subject to guaranteed minimum during the guarantee period.
Guaranteed minimum is face amount shown in the Certificate Schedule.
Additional premium payments accepted during lifetime of insured as
shown in the Certificate Schedule. Non-participating. Investment
results reflected in certificate benefits.
A copy of the enrollment form and any additional benefit riders and
endorsements are at the back of this certificate.
Schedule Pages
The schedule pages (Pages A to H) follow this page. They give
specific facts about this certificate and its coverage. Please refer
to them while reading this certificate.
<PAGE>
<PAGE>
Table of Contents
The contents of the certificate appear in the following order:
Schedule
Important Terms (i)
Introduction to the Certificate 1
Effective Date of Insurance
Termination
Beneficiary
Right to Name Contingent Certificate Owner
Change of Certificate Owner or Beneficiary
Premium Payments and
Allocation Changes 2
Initial Premium Payment
Additional Premium Payments
Initial Premium Allocation
Additional Premium Allocations
Reallocation of Investment Value
Account Division Not Available
How We Measure the Investment Value 3
Separate Accounts
General Account
Valuation Period
Investment Value
Investment Value In Each Division
Charges Deducted from Investment Value
in Each Processing Period
Tabular Value
Measurement of Investment Experience
Certificate Owner's Benefits 7
Cash Surrender Value
Loans
Conversion Right
Insurance Benefits 9
Variable Insurance Amount
Death Benefit Proceeds
Insurance Coverage Period 9
How We Determine the Guarantee Period
and Face Amount
Termination after the Guarantee Period
Choosing an Income Plan 10
The Income Plans
Payments When Named Person Dies
General Provisions 11
Entire Policy
Non-participating
Incontestability
Suicide
Errors in Age or Sex
Value Reports
Payments We May Defer
Claims of Creditors
Changes in Charges
Computations
Facility of Payment
Assignment
Maturity Date
Sending Notice to Us
<PAGE>
<PAGE>
Certificate Schedule
Separate Account: Separate Account A
Certificate Owner: [John Doe] Face Amount: [$100,000]
Certificate Date: [January 1, 1998] Initial Premium: [$100,000]
Underwriting Class: [Medical]
Insured: [John Doe], [Male], [35], [Non-Smoker]
Resident State: [Delaware]
<PAGE>
<PAGE>
PREMIUM PAYMENT AND INVESTMENT INFORMATION
Investment
Initial premium [$100,000]
less [3]% of premium for premium tax $[3,000]
Investment Value $[97,000]
Your investment value has been allocated to the following
division(s):
Percentage of
Division Investment Value
-------- ----------------
Total 100%
Additional Premium Payments
Minimum Payment $500
Maximum attained age of insured 80
Allocations
Maximum divisions at any one time 7
Allocation changes per
certificate year without charge 5
<PAGE>
<PAGE>
MANAGED SEPARATE ACCOUNT
Not available.
SEPARATE ACCOUNT
Divisions Investing in Shares of Mutual Funds
Separate Account A is an unit investment trust separate account
organized in and governed by the laws of the state of Minnesota, our
state of domicile. Separate Account A is divided into divisions.
Each division listed invests in shares of the mutual fund portfolios
of The Specialty Managers Trust managed by Directed Services, Inc.
GV390(c) Page 2
The Schedule (continued)
SEPARATE ACCOUNTS AND GENERAL ACCOUNT (continued)
TOTAL
RETURN
DIVISION
TOTAL RETURN PORTFOLIO
Portfolio Manager - Massachusetts Financial Services Company
VALUE +
GROWTH
DIVISION
VALUE + GROWTH PORTFOLIO
Portfolio Manager - Robertson, Stephens & Company Investment
Management, L.P.
NOTE: PLEASE REFER TO THE PROSPECTUSES FOR THE CONTRACT AND
THE GCG TRUST FOR MORE DETAILS.
Each division listed below invests in shares of the mutual fund
portfolio (the "Portfolio") designated. Each portfolio is a part of
the PIMCO Trust managed by Pacific Investment Management Company
("PIMCO").
HIGH YIELD
BOND
DIVISION
HIGH YIELD BOND PORTFOLIO
Portfolio Manager - PIMCO
STOCKSPLUS
GROWTH AND
INCOME
DIVISION
STOCKSPLUS GROWTH AND INCOME PORTFOLIO
Portfolio Manager - PIMCO
<PAGE>
<PAGE>
GENERAL ACCOUNT
The general account offers a guaranteed interest division, as shown
below, known as the Guaranteed Division, for allocation of funds
under this certificate.
Guaranteed Division
Not available, except as specified below.
Right to Exchange
If you are exercising your right to exchange this certificate for a
fixed benefit insurance policy, you may reallocate all of the
investment value under your certificate to this division at any time
within the first eighteen months of your certificate.
<PAGE>
<PAGE>
CERTIFICATE FACTS
Processing Dates
[July 1, 1999]
Specially Designated Division
Liquid Asset Division.
Mortality Table and Interest Rate
[For attained age up to and including age 19 the aggregate table will
be used. Thereafter the smoker table will be used unless non-smoker
status has been applied for and granted.]
Interest at 4% per year.
Loans
Maximum Loan Value 90%
Minimum Amount of Loan $1,000
Minimum Repayment Lesser of $1,000 and the loan balance.
Loan Interest Rate 5% per year, due and payable on each
certificate anniversary.
Initial Guarantee Period
The initial guarantee period expires on rGUARDATE_.
Maturity Date
[January 1, 2035]
Optional Benefit Riders
Charge Deduction Division Rider [(Not Applicable)]
Partial Withdrawal Rider
<PAGE>
<PAGE>
EXPENSE CHARGES
Deductions from Initial Premium Payment
Premium Tax [None]
Deductions from Additional Premium Payments
Premium Tax [None]
We reserve the right to change the amount of the deduction on future
payments to conform to changes in the amount payable by Golden
American under applicable law as of the date(s) of such premium
payments or if the insured changes state of residence.
Deductions from Investment Value
Initial Administrative Charge
[None]
Initial Charge [0.00]
Quarterly Installment [0.00]
Quarterly Administrative Charge
[None]
Quarterly Charge [0.00]
Quarterly Recovery of Deferred Loading
[None]
[This loading is recovered in equal installments on each processing
date during the deferred period. It applies to both the initial and
any additional premium payments. The installment amount is deducted
on each processing date following receipt of the premium for the
deferred period until the entire deferred loading has been recovered.
The deferred loading consists of a sales load of 6.0%, which
compensates us for sales expenses, plus a minimum death benefit
guarantee charge of 1.5% to cover the minimum death benefit
guarantee, and a premium charge of 1.5% (this is deemed to be sales
load) to cover the tax effect of the recently passed tax legislation.
If a portion of your investment value is allocated to the Guaranteed
Division, we will reimburse the portion of the deferred load
installments applicable to the Guaranteed Division as they are
recovered on each processing date during the first certificate year.
If you surrender the certificate, we will deduct the total amount of
any remaining deferred loading from the amount we pay you.]
Deferred Period six years
Deferred Loading [5.5%] of premium
Installment Amount [3%]
Loan Charge
This is the amount charged on each certificate anniversary, accrued
daily.
Loan Charge 1.00% of certificate loan amount
<PAGE>
<PAGE>
EXPENSE CHARGES (continued)
Excess Allocation Charge
This is the amount charged for each allocation change in excess of
five.
Excess Allocation Charge $25
Deductions from the Separate Account Divisions
Mortality and Expense Risk Charge
We charge 0.002477% of the assets in each division of the Account on
a daily basis (equivalent to an annual charge of 0.90%) for mortality
and expense risks.
Asset Based Administrative Charge
We charge 0.000276% of the assets in each division of the Account on
a daily basis (equivalent to an annual rate of 0.10%) to cover a
portion of the certificate administration.
<PAGE>
<PAGE>
Insurance Charges
Mortality Cost
The mortality cost is deducted from the investment value on each
processing date. The guaranteed maximum cost of insurance rates per
$1,000 of the net amount at risk are shown below.
TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES
(Attained Age Quarterly Rates per $1,000 of Net Amount at Risk)
Policy COI Policy COI Policy COI
Year Rate Year Rate Year Rate
------ ------- ------ -------- ------ ---------
1 0.42197 26 3.11976 51 40.10724
2 0.44502 27 3.43642 52 44.22778
3 0.47509 28 3.80510 53 48.56507
4 0.50767 29 4.22756 54 53.12521
5 0.54276 30 4.69842 55 57.98599
6 0.58536 31 5.21363 56 63.23411
7 0.63049 32 5.76864 57 68.98968
8 0.67765 33 6.36034 58 75.55128
9 0.72883 34 6.99993 59 83.65520
10 0.78403 35 7.71034 60 94.88605
11 0.84629 36 8.51896 61 112.64768
12 0.91308 37 9.45286 62 144.95912
13 0.98492 38 10.54419 63 213.90366
14 1.06330 39 11.79520 64 270.81871
15 1.14927 40 13.18656 65 333.33333
16 1.24680 41 14.69222
17 1.35800 42 16.29761
18 1.48583 43 17.99296
19 1.63189 44 19.79381
20 1.79260 45 21.76136
21 1.97107 46 23.96822
22 2.16378 47 26.48381
23 2.36613 48 29.37305
24 2.58877 49 32.63735
25 2.83876 50 36.23427
Rates shown are based on the insured's attained age, smoking status
and underwriting class as of the certificate date and the certificate
anniversary. They do not change during a certificate year. For
attained age up to and including age 19 the aggregate table will be
used. Thereafter the smoker table will be used unless non-smoker
status has been applied for and granted.
Minimum Death Benefit Guarantee Charge
See Quarterly Recovery of Deferred Loading
<PAGE>
<PAGE>
NET SINGLE PREMIUM FACTORS
Net Single Premium Factors
TABLE OF NET SINGLE PREMIUM FACTORS
(Attained Age Factors Per $1,000 of Cash Surrender Value)
Policy NSP Policy NSP Policy NSP
Year Factor Year Factor Year Factor
------ ------- ------ -------- ------ ---------
1 4.64372 26 1.95970 51 1.18501
2 4.16891 27 1.90636 52 1.17190
3 4.03074 28 1.85533 53 1.15967
4 3.89760 29 1.80664 54 1.14813
5 3.76931 30 1.76027 55 1.13709
6 3.64570 31 1.71616 56 1.12636
7 3.52676 32 1.67419 57 1.11571
8 3.41229 33 1.63421 58 1.10491
9 3.30207 34 1.59606 59 1.09366
10 3.19595 35 1.55962 60 1.08175
11 3.09376 36 1.52483 61 1.06910
12 2.99542 37 1.49169 62 1.05597
13 2.90076 38 1.46025 63 1.04328
14 2.80964 39 1.43057 64 1.03402
15 2.72193 40 1.40270 65 1.02207
16 2.63752 41 1.37658 66 1.00000
17 2.55634 42 1.35208
18 2.47835 43 1.32903
19 2.40350 44 1.30726
20 2.33177 45 1.28660
21 2.26302 46 1.26697
22 2.19716 47 1.24836
23 2.13405 48 1.23081
24 2.07350 49 1.21440
25 2.01540 50 1.19914
Factors shown are based on the insured's attained age, smoking status
and underwriting class as of the certificate date and each
certificate anniversary after that. For attained age up to and
including age 19 the aggregate table will be used. Thereafter the
smoker table will be used unless non-smoker status has been applied
for and granted.
On processing dates not shown, we determine the Net Single Premium
Factor in a consistent manner with allowance for time elapsed.
The Net Single Premium Factor on a date during a processing period is
determined by interpolating between the factors for the processing
date immediately preceding and immediately following that date. For
the first processing period, the starting point is the certificate
date.
Adjustment of Net Single Premium Factors
[Not applicable] To keep the certificate qualified as life insurance
under federal income tax laws or regulations, we will adjust the net
single premium factors to reflect guarantees provided under the
Guaranteed Division. We will make the adjustment for the year after
an additional premium payment or partial withdrawal is made if it
increases or decreases the face amount. The net single premium
factor for the first certificate year has been adjusted to reflect
the guarantees in the Guaranteed Division.
<PAGE>
<PAGE>
INCOME PLANS
Income Plans Tables
Values for other payment periods, ages or joint life combinations are
available on request. Monthly payments are shown for each $1,000
applied.
Table for Income for a Fixed Period
Fixed Period Monthly Fixed Period Monthly Fixed Period Monthly
of Years Income of Years Income of Years Income
------------ ------- ------------ ------- ------------ -------
1 $84.68 11 $8.88 21 $5.33
2 42.96 12 8.26 22 5.16
3 29.06 13 7.73 23 5.00
4 22.12 14 7.28 24 4.85
5 17.95 15 6.89 25 4.72
6 15.18 16 6.54 26 4.60
7 13.20 17 6.24 27 4.49
8 11.71 18 5.98 28 4.38
9 10.56 19 5.74 29 4.28
10 9.64 20 5.53 30 4.19
Table for Income for Life
Age 10 Years Certain 20 Years Certain Refund Certain
- ---- ---------------- ---------------- --------------
50 $4.93 $4.68 $4.74
55 5.45 4.99 5.16
60 6.11 5.30 5.75
65 6.91 5.54 6.52
70 7.79 5.68 7.33
75 8.61 5.75 8.61
80 9.24 5.77 10.43
85 & Over 9.62 5.77 12.16
<PAGE>
<PAGE>
Important Terms
Account: This is a separate account established to hold segregated
assets and used only to support variable life insurance.
Age: Attained age for the insured is the insured's issue age plus the
number of full years since the certificate date. Issue age is an
insured's age on his or her last birthday on or before the
certificate date.
Cash Surrender Value: This is the investment value less any
certificate charges incurred but not yet deducted.
Certificate Date: This is the date used to determine processing
dates, certificate years and certificate anniversaries. It may or
may not be the same as the issue date but it usually is the date the
initial premium is received by our Customer Service Center.
Certificate Owner: This is the person named as such in the enrollment
form and to whom this certificate is issued.
Customer Service Center: This is where our policies are serviced.
The address is shown on the cover.
Death Benefit: This is the larger of the face amount and the variable
insurance amount. Any debt will be deducted from the death benefit
before payment.
Debt: This is the sum of all outstanding loans plus accrued interest
under this certificate.
Face Amount: This is the minimum death benefit we will pay under this
certificate while such certificate and the policy are in force.
Additional premium payments may increase the face amount under this
certificate.
Guarantee Period: This is the time we will guarantee that this
certificate will remain in force regardless of the investment
experience unless there is debt and the cash surrender value is
negative. Additional premium payments may increase the guarantee
period under this certificate.
Insured: This is the person named on the enrollment form who is
insured under the policy as described in this certificate.
Issue Date: This is the date this certificate is issued at our
Customer Service Center. The contestable and suicide periods are
measured from this date.
Investment Value: This is the amount available under this certificate
for investment at any time. It is the sum of the amounts invested in
each of the divisions selected.
Maturity Date: This is the anniversary of the certificate date
immediately following the insured's 100th birthday. On this date
coverage under this certificate matures and the cash surrender value
is payable.
<PAGE>
<PAGE>
Net Single Premium Factor: This is the the factor used in the
calculation of the variable insurance amount. It is based on the
attained age, smoking status and sex of the insured and is designed
to ensure that coverage under the policy as described in this
certificate meets the definition of life insurance under the
provisions of the Internal Revenue Code.
Policyholder: This is the person or entity to whom the policy is
issued.
Processing Date(s): This is the first day of each quarter after the
certificate date. They are the days when we deduct certain charges
from the investment value under this certificate.
Processing Period: This is the period between consecutive processing
dates with the first such period beginning on the certificate date.
Specially Designated Division: This is a division for allocation of a
distribution from a division or portfolio in which reinvestment is
not available.
Valuation Period: This is each business day together with any non-
business days before it. A business day is any day the New York
Stock Exchange (NYSE) is open for trading or any day the Securities
and Exchange Commission (SEC) requires mutual funds, unit investment
trusts or other investment portfolios to be valued.
Variable Insurance Amount: This is the cash surrender value plus any
debt multiplied by the net single premium factor.
<PAGE>
<PAGE>
Introduction to the Certificate
Effective Date of Insurance
The insured will be covered under the policy from the issue date
shown in the Certificate Schedule.
Termination
Insurance will terminate under this certificate on the earlier of the
following dates:
(1) The date the policy terminates.
(2) The date you request termination of this certificate by written
notice.
(3) On the maturity date shown in the Certificate Schedule.
(4) If there is a debt, thirty-one days after we mail to you notice
that the cash surrender value is negative.
(5) Sixty one days after we mail notice to you that the cash
surrender value is negative.
(6) Death of the insured under this certificate.
Beneficiary
The beneficiary is the person to whom we will pay death benefit
proceeds upon the death of the insured. We pay the proceeds to the
primary beneficiary. If such beneficiary dies before the insured the
proceeds are paid to the contingent beneficiary, if any. If there is
no surviving beneficiary, we pay the proceeds to the estate of the
insured. One or more persons may be named as primary beneficiaries
or contingent beneficiaries. In such case we will assume the
proceeds are to be paid in equal shares to the surviving
beneficiaries. If all primary beneficiaries have died we then pay
the surviving contingent beneficiaries in equal shares. You can
specify other than equal shares.
If an irrevocable beneficiary has been named, you and the irrevocable
beneficiary must act together to exercise the rights and options
under the policy as described in this certificate.
Right to Name a Contingent Certificate Owner
You may want to name a contingent certificate owner before any death
benefit proceeds are payable under this certificate. Ownership of
the rights under the policy as described in this certificate will
then pass to the contingent certificate owner. If no contingent
certificate owner is named, ownership will pass to your estate.
<PAGE>
<PAGE>
Change of Certificate Owner or Beneficiary
During the insured's lifetime and while this certificate is in effect
under the policy you can transfer ownership of coverage described in
this certificate, change the contingent ownership or change the
beneficiary. Written notice of any change must be given to us on a
form satisfactory to us. The change will take effect the date the
notice is signed. However, the change will not affect any payments
made or action taken by us before we receive the notice of change at
our Customer Service Center.
<PAGE>
<PAGE>
Premium Payments and Allocation Changes
Initial Premium Payment
The initial premium payment is required to put this certificate in
effect. The amount and allocation of the initial premium payment is
shown in the Certificate Schedule.
Additional Premium Payments
Additional premium payments may be made if the insured is living.
Satisfactory notice to us must be given for additional premium
payments. Evidence of insurability based on our underwriting rules
may be required. Such premium payments are subject to any
restrictions shown in the Certificate Schedule.
We reserve the right to return any additional premium payment that we
believe would cause this policy to fail to qualify as life insurance
under applicable tax laws.
Unless specified otherwise, if there is any debt, any additional
premium payment will be used as a loan repayment with any excess
applied as an additional premium payment.
On the date we receive and accept such payment:
(1) The variable insurance amount will increase;
(2) Any deferred loading in a certificate year of payment will
increase. The increase will be recovered in level installments
from the investment value. See Certificate Schedule for
details.
(3) The tabular value will increase by the amount of the payment
less any premium deductions before allocation and less any
deferred loading applicable to such payment shown in the
Certificate Schedule.
The guaranteed benefits will increase as of the processing date on or
next following the date we receive and accept the additional premium
payment.
Additional premium payments are to be sent to our Customer Service
Center. Upon request a receipt will be given.
<PAGE>
<PAGE>
Initial Premium Allocation
The initial premium payment is shown in the Certificate Schedule and
is allocated to selected divisions on the date we receive it. The
initial allocation is shown in the Certificate Schedule.
Additional Premium Allocations
On the date we receive and accept an additional premium payment the
increase in the investment value will be allocated among the separate
account and general account divisions. Unless otherwise indicated,
the allocation will be to the divisions in proportion to the
investment value in each division on the date we receive and accept
such payment.
Reallocation of Investment Value
The investment value may be reallocated among the divisions. The
number of allocation changes that we will allow in the certificate
year is shown in the Certificate Schedule. To make any change,
satisfactory notice must be given to our Customer Service Center.
The change will take effect when we receive the notice. Restrictions
for reallocation into and out of the divisions are shown in the
Certificate Schedule.
<PAGE>
<PAGE>
Account Division Not Available
When a distribution is made from a managed separate account division
or from an investment portfolio supporting a unit investment trust
separate account division in which reinvestment is not available, we
will allocate the distribution to the Specially Designated Division
shown in the Certificate Schedule, unless you specify otherwise.
Such a distribution can occur when a division or a portfolio has a
maturity date; when distribution from a division or a portfolio
cannot be reinvested in the division or portfolio due to the
unavailability of securities or for any other reason. When this
occurs because of a maturity date, we will notify you 30 days in
advance of such date. To elect an allocation other than the
Specially Designated Division you must give us satisfactory notice at
least seven days prior to a maturity date. Such allocations will not
be counted as an allocation change of the investment value for the
purposes of the number of free changes permitted.
How We Measure the Investment Value
The variable insurance benefits under the policy are provided through
investments made in our separate accounts and general account.
Separate Accounts
These accounts are separate from our general account and any other
separate accounts we may have. They support variable insurance
benefits and are used for other purposes permitted by applicable laws
and regulations. We own the assets in the separate accounts. Assets
equal to the reserves and other liabilities of each account will not
be charged with liabilities from any other business we conduct. We
may transfer to our general account assets exceeding the reserves and
other liabilities of the separate accounts. Income realized and
unrealized gains or losses from assets in each separate account are
credited to or charged against the account without regard to other
income, gains or losses in our other investment accounts.
One type of separate account invests in mutual funds, unit investment
trusts and other investment portfolios we determine to be suitable.
The separate account is treated as a unit investment trust under
Federal securities laws. It is registered with the SEC under the
Investment Company Act of 1940. The separate account is also
governed by state laws as shown in the Certificate Schedule.
<PAGE>
<PAGE>
One type of separate account will invest directly in portfolio
securities deemed appropriate by the investment adviser and committee
managing the separate account. This separate account is treated as
an open end, diversified management investment company under Federal
securities laws. It is registered with the SEC under the Investment
Company Act of 1940. The separate account is also governed by state
laws as shown in the Certificate Schedule.
Separate Account Divisions
A unit investment trust separate account includes divisions each
investing in a designated investment portfolio. Some of the
portfolios designated may be managed by separate investment advisers
who may be registered under the Investment Advisers Act of 1940. The
divisions and the investment portfolios are shown in the Certificate
Schedule, if applicable.
A managed separate account includes divisions, each investing
directly in portfolios of securities designed to meet the objectives
of the division. The divisions and their objectives, if applicable,
are specified in the Certificate Schedule. Some of the divisions
designated may be managed by a separate investment adviser. Such
advisers may be registered under the Investment Advisers Act of 1940.
<PAGE>
<PAGE>
Changes Within The Separate Accounts
We may, from time to time, make additional separate account divisions
available. These divisions will invest in investment portfolios we
find suitable. We also have the right to eliminate divisions from
the separate account, combine two or more divisions or substitute a
new portfolio for the portfolio in which a division invests. A
substitution may become necessary if, in our judgment, a portfolio no
longer suits the purposes under the policy as described in the
certificate. Changes may be required because of a change in law or
regulation, or a change in a portfolio's investment objectives or
restrictions, or because a portfolio is no longer available for
investment or for some other reason. We will get approval from the
regulatory authority of our state of domicile before making any
substitution. This approval process is on file with the insurance
department of the jurisdiction in which the policy is delivered. We
will also get any required approval from the SEC and any other
required approvals.
Subject to any required regulatory approvals, we reserve the right to
transfer assets of the separate account or of a division which we
determine to be associated with a class of policies to which the
policy belongs, to another separate account or division.
When permitted by law, we reserve the right to:
(1) deregister a separate account under the Investment Company Act
of 1940;
(2) operate a separate account as a management company under the
Investment Company Act of 1940, if it is operating as a unit
investment trust;
(3) operate a separate account as a unit investment trust under the
Investment Company Act of 1940, if it is operating as a managed
separate account;
(4) restrict or eliminate any voting rights of certificate owners or
other persons having voting rights as to the separate account;
and
(5) combine a separate account with other separate accounts.
General Account
The general account contains all of our assets other than assets of
the separate accounts we establish.
General Account Divisions
The divisions are shown in the Certificate Schedule.
<PAGE>
<PAGE>
Valuation Period
Each division will be valued at the end of each valuation period on a
valuation date.
Investment Value
The investment value is the amount that is available under this
certificate for investment at any time. It is the sum of the amount
of investment value in each division of the separate account and
general account. You select the divisions for allocation of the
investment value. The number of divisions to which the investment
value may be allocated at any one time is shown in the Certificate
Schedule.
Investment Value in Each Division
On the certificate date the investment value is allocated to each
division as shown in the Certificate Schedule.
At the end of each subsequent valuation period, the investment value
in each division will be calculated as follows:
(1) Take the investment value of the division at the end of the
preceding valuation period.
(2) Multiply (1) by the division's net rate of return for the
current valuation period.
(3) Add (1) and (2).
<PAGE>
<PAGE>
(4) Add to (3) any additional premium payments (less any premium
deductions shown in the Certificate Schedule) allocated to the
division during the current valuation period.
(5) Add or subtract allocations to or from that division during the
current valuation period.
(6) Add to (5) any loan repayments received and subtract from (5)
any loans which are allocated to the division during the current
valuation period.
(7) If a processing date occurs during the current valuation period,
subtract from (6) the amounts allocated to that division for:
(a) expense charges; and
(b) insurance charges and mortality costs.
Amounts in (7) will be allocated to each division in the
proportion that (6) bears to the investment value.
(8) If the charges in (7) exceed the amount in (6), first calculate
the cash surrender value to determine the amount of any overdue
charges and then set the investment value in each division to
zero.
Charges Deducted from Investment Value in Each Processing Period SEE
ENDORSEMENT
Mortality Costs
The mortality cost is deducted on each processing date as follows:
(1) Determine the net amount at risk on the same day of each month
of the processing period starting with the previous processing
date. The net amount at risk on each date is:
(a) the death benefit as of that date; less
(b) the sum of the cash surrender value and any debt as of that
date.
(2) Adjust each net amount at risk in (1) for interest used in our
calculations as shown in the Certificate Schedule to reflect
that we:
(a) assume claims are paid immediately upon death of the
insured; and
(b) deduct the mortality costs at the end of the processing
period.
(3) Add the three monthly amounts in (2) and divide by three to
determine the average net amount at risk for the period.
(4) Divide (3) by $1,000.
(5) Determine the current cost of insurance rate per $1,000 of net
amount at risk based on the insured's sex, attained age,
underwriting class and the value of rate (4) above. If the
insured's underwriting class changes because of additional
premium payments, we will determine the current cost of
insurance rate per $1,000 of net amount separately for increases
in the death benefit after the effective date of the increase.
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(6) Multiply (4) by (5).
In no event will (6) be greater than the amount determined by
substituting the tabular value for cash surrender value in (1)(b)
above and the guaranteed maximum cost of insurance rate for the
current cost of insurance rate per $1,000 in (5).
We may reduce or increase the cost of insurance rate per $1,000 from
time to time based on the experience of a group participating under
the policy. The change will never be retroactive. The change will
never be more than the guaranteed maximum cost of insurance per
$1,000 shown in the Certificate Schedule. The mortality cost during
a processing period is calculated in a similar manner with allowance
for time elapsed.
Other Deductions
Expense charges are shown in the Certificate Schedule. The charges
for any minimum death benefit guarantee and the cost of any benefits
from optional benefit riders are also shown in the Certificate
Schedule. The net loan cost is described in Loans.
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Tabular Value
The tabular value on the certificate date equals investment value on
that date. Thereafter, the tabular value is calculated the same as
the cash surrender value except the mortality cost will be based on
the guaranteed maximum cost of insurance rates and the net rate of
return will be based on the interest rate used in our computations,
as shown in the certificate schedule. The tabular value calculations
do not reflect loans, repayments, expenses charges or the minimum
death benefit guarantee charge. In the calculation of the tabular
value, the variable insurance amount on any date is equal to the
tabular value as of such date multiplied by the net single premium of
such date.
Measurement of Investment Experience
The investment experience of a separate account division is
determined at the end of each division's valuation period. We use an
index to measure changes in experience during a valuation period. We
set the index at $10 when the first investments in a division are
made. The index for a current valuation period equals the index for
the last valuation period multiplied by the experience factor for the
current period.
The Experience Factor
The experience factor for a valuation period reflects the investment
experience of the portfolio in which the division invests and the
charges assessed to the division. The factor is calculated as
follows:
(1) Take the net asset value at the end of a current valuation
period of a division's corresponding portfolio.
(2) Add the amount of any dividend or capital gains distribution
declared during the current valuation period for such portfolio
and reinvested in the portfolio. Subtract a charge for taxes,
if any.
(3) Divide (2) by the net asset value of the portfolio at the end of
the preceding valuation period.
(4) Subtract the daily mortality and expense risk charge for each
division shown in the Certificate Schedule for each day in the
valuation period. This charge is to cover expense and mortality
risks that we are assuming.
(5) For certain divisions, subtract an additional charge equal to
the daily charge shown in the Certificate Schedule for each day
in the valuation period.
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Calculations for divisions investing in mutual fund portfolios are
made on a per share basis. Calculations for divisions investing in
unit investment trusts are on a per unit basis.
For divisions of a managed separate account investing directly in
portfolio securities, the experience factor reflects the investment
experience of the division as well as the charges assessed against
the division for a valuation period. The factor is calculated as
follows:
(1) Take the value of the assets in the division at the end of the
preceding valuation period.
(2) Add to (1) any investment income and capital gains, realized or
unrealized, credited to the assets during the current valuation
period.
(3) Subtract from (2) any capital losses, realized or unrealized,
charged against the assets during the current valuation period.
(4) Subtract from (3) any amount charged against the division for
any taxes.
(5) Divide (4) by the value of the assets in the division at the end
of the preceding valuation period.
(6) Subtract from (5) a charge for operating expenses actually
incurred.
(7) Subtract from (6) the charge for investment management as shown
in the Certificate Schedule.
(8) Subtract from (7) the charge for mortality and expense risks as
shown in the Certificate Schedule.
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Net Rate of Return - Separate Account Division
The net rate of return during a valuation period is the experience
factor for that valuation period minus one.
Net Rate of Return - Guaranteed Interest Division
The net rate of return for the Guaranteed Interest Division for a
valuation period is the rate for the number of days in the valuation
period equivalent to the effective annual interest rate declared for
that division.
Certificate Owner's Benefits
There are important rights and benefits available to you during the
lifetime of the insured. These rights and benefits are discussed in
this section.
Cash Surrender Value
The cash surrender value is determined as follows:
(1) Take the investment value;
(2) Deduct any unrecovered deferred loading;
(3) Deduct any expense charges and insurance charges shown in the
Schedule that have been incurred but not yet deducted,
including;
(a) any first year administrative charge;
(b) any quarterly administrative charge to be deducted on the
next processing date;
(c) any net loan charge accrued since the last processing date;
(d) the pro rata part of the mortality cost since the last
processing date;
(e) the pro rata part of any minimum death benefit risk
premium; and
(f) the pro rata part of any charges for optional benefit
riders.
The cash surrender value may be paid in cash or under one or more
income plans. To surrender this certificate a signed request for
surrender in a form satisfactory to us must be submitted to our
Customer Service Center together with the certificate. The surrender
will take effect on the date the request is sent to us. We will
determine the cash surrender value as of the date we receive the
signed request and the certificate at our Customer Service Center.
We may delay payment as described under the Payments We may Defer
provision.
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Loans
You may borrow against the cash surrender value. The certificate
will be the only security we require for the loan. A loan may be
taken or repaid while the certificate is in effect provided the
policy is in force.
When We Will Make a Loan
We will usually loan the money within seven days after we receive a
request satisfactory to us. We may delay making the loan as
described in Payments We may Defer. If the loan is to be used to pay
premiums on other variable life insurance coverage offered by us we
will make the loan immediately.
Loan Value
The maximum loan value percentage is shown in the Certificate
Schedule. The amount of the loan may not exceed the sum of the cash
surrender value plus any existing debt, multiplied by the maximum
loan value percentage. Any existing debt will be deducted from a new
loan. The minimum amount of loan and repayment is shown in the
Certificate Schedule.
Interest
The interest rate is shown in the Certificate Schedule. Interest
accrues each day. Interest payments are due as shown in the
Certificate Schedule. If interest is not paid when due it will be
added to the amount of the loan. The sum of all outstanding loans
plus accrued interest is the debt.
Interest payments when received will be allocated among the divisions
in accordance with your instructions. If no instructions are
received by us, we will allocate the interest payments in proportion
to the amount of investment value in each division.
Effects of a Loan
A loan will be taken out of the divisions and a repayment will go
into the divisions. A loan reduces the investment value while
repayment increases it. Unless specified otherwise, loans and
repayments will be allocated in proportion to the amount of
investment value in each division as of the date of the loan or
repayment. A loan, whether or not repaid, will have a permanent
effect on the cash surrender values and may have a permanent effect
on the death benefits. If not repaid the debt will reduce the amount
of death benefit and cash surrender value. If on any valuation date
there is a loan outstanding and the cash surrender value is negative
we will terminate the certificate 31 days after we send you an
overloan notice. We will notify you and anyone who holds the
certificate as collateral at his or her last known address.
Net Loan Cost
The net loan cost will be calculated on each processing date as
follows:
(1) Determine the outstanding loan(s) since the last certificate
anniversary;
(2) Multiply by the daily loan charge shown in the Certificate
Schedule taking account of the time elapsed.
Loans and repayments during a processing period will affect our
calculation.
Conversion Right
If an insured terminates membership or ceases to be a member of an
eligible class, insurance under this certificate can be converted to
an individual policy of variable life insurance customarily issued by
us. No evidence of insurability will be required. The amount of
insurance available will be an amount agreed to by us and that does
not exceed the amount of life insurance that existed under the
policy.
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If the policy terminates or is amended to discontinue an eligible
class to which an insured belongs, an individual policy of variable
life insurance will be available without evidence of insurability.
The amount of insurance under the new policy will be the amount
required, for a conversion to an individual policy, by the state or
jurisdiction where such policy is issued.
The premium for the individual policy will be at our then customary
rate that applies to the:
(1) form and amount of insurance;
(2) class of risk to which the insured then belongs; and
(3) the attained age of the insured on the effective date of the
policy.
The individual policy of variable life insurance will:
(1) only be issued if application is made and the first premium is
paid to us within 31 days after termination of coverage under
the policy.
(2) take effect no later than the end of a period of 31 days after
termination of coverage under the policy.
(3) be without disability or other supplemental benefits.
If the insured dies during the 31 day period during which an
application for an individual policy can be made, we will pay as a
death benefit, under the policy, the amount of insurance that could
have been converted.
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Insurance Benefits
Variable Insurance Amount
The variable insurance amount on the certificate date equals the cash
surrender value on that date multiplied by the net single premium
factor for that date. Thereafter, the variable insurance amounts
will vary daily based on investment results and any premiums paid.
The variable insurance amount after the certificate date will be
determined as follows:
(1) Determine the cash surrender value as of such date;
(2) Add to (1) any debt as of such date.
(3) Multiply (2) by the net single premium factor as of such date.
The variable insurance amount will never be less than required to
qualify the coverage described in the certificate as life insurance
under applicable Federal income tax laws. The Table of Net Single
Premium Factors is in the Certificate Schedule.
Death Benefit Proceeds
We will pay the death benefit proceeds to the beneficiary when we
receive due proof of the death of the insured. The proceeds may be
paid in cash or be allocated to one or more income plans. The death
benefit proceeds will never be less than required to qualify the
coverage described in the certificate as life insurance under
applicable Federal income tax laws.
Death benefit proceeds are determined on the date of death of the
insured as follows:
(1) Determine the larger of the face amount and the variable
insurance amount;
(2) Subtract from (1) any debt;
(3) Add to (2) any amounts due from optional benefit riders.
If the insured dies during any grace period we will pay the
beneficiary the death proceeds in effect immediately prior to such
grace period reduced by any overdue charges.
If the death benefit is payable after an additional premium payment
has been accepted and before the next processing date, we will pay
the beneficiary the larger of:
(1) the amount of the death benefit calculated as of the prior
processing date plus the amount of the additional premium
payment; and
(2) the variable insurance amount as of the date of death.
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To Claim Death Benefit Proceeds
The beneficiary should contact our Customer Service Center for
instructions. We usually pay the proceeds within seven days after we
receive due proof of the death of the insured and all other
requirements. We may delay all or part of the death benefit proceeds
as described under the Payments We may Defer provision. Interest
will be paid on death benefit proceeds from the date of death of the
insured to the date of payment. Interest will never be less than
required by applicable law.
Insurance Coverage Period
How We Determine the Guarantee Period and Face Amount
On the Certificate Date
The initial guarantee period and face amount on the certificate date
are shown in the Certificate Schedule. The guarantee period and face
amount are not affected by investment results nor the allocation of
the investment value among the divisions. They will change as
described below as a result of any additional premium payments.
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When an Additional Premium Payment is Made
The guaranteed benefits will increase as follows:
(1) We take the immediate increase in cash surrender value resulting
from an additional premium payment and add interest for the
period from the date we receive and accept the additional
premium payment to the processing date on or next following such
date.
(2) If the guarantee period prior to such premium payment is less
than for the whole of life the total of (1) and the tabular
value as of the processing date will be used to calculate a new
guarantee period. Any part of such total amount in excess of
the amount required to increase the guarantee period to the
whole of life will be applied as indicated in (3).
(3) If the guarantee period is for life; the amount from (1) or the
excess from (2) will be applied as a net single premium for the
whole of life to increase the face amount.
The mortality table and interest rate used are shown in the
Certificate Schedule.
Termination After the Guarantee Period
At any time after the end of a guarantee period, if the cash
surrender value on a processing date is negative, we will notify you
of the pending termination of insurance under the policy as described
in the certificate. This negative cash surrender value will be
considered as an overdue charge as of such processing date. We will
not terminate the coverage due to a negative cash surrender value
until the end of a grace period of 61 days from the date we mail
notice to you.
To avoid termination, you must pay us at least the charges that were
due on the processing date on which we determined that the cash
surrender value was insufficient. The amount will be in the notice
we send. If the insured dies during the grace period, we will pay
the beneficiary as described in the Death Benefit Proceeds provision.
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Choosing an Income Plan
While coverage is in effect you may choose one or more income plans
for the distribution of the death benefit proceeds. If, at the time
of the death of the insured, no plan has been chosen for payment of
the death benefit proceeds, the beneficiary may choose a plan within
one year. You may also elect an income plan on surrender of the
certificate for its cash surrender value. For each plan we will
issue a separate written agreement putting the plan into effect.
Our approval is needed for any plan where: (1) the person named to
receive payment is other than you or the beneficiary; or (2) the
person named is not a natural person, such as a corporation; or (3)
any income payment is less than $500.
The Income Plans
Income Plan 1. Income for a Fixed Period
Payment is made in equal installments for a fixed number of years.
We guarantee each monthly payment will be at least the Income for
Fixed Period amount shown in the Certificate Schedule. Values for
annual, semiannual or quarterly payments are available on request.
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Income Plan 2. Income for Life
Payment is made in equal monthly installments and guaranteed for at
least a period certain. The period certain can be 10 or 20 years.
Other periods certain are available on request. A refund certain may
be chosen instead. Under this arrangement, income is guaranteed
until payments equal the amount applied. If the person named lives
beyond the guaranteed period, payments will continue until death.
We guarantee each payment will be at least the amount shown in the
Income for Life table in the Certificate Schedule. By age we mean
the named person's age on the last birthday before the plan's
effective date. Amounts for ages not shown are available on request.
Income Plan 3. Joint Life Income
This plan is available if there are two persons named to receive
payments. At least one of the persons named must be either you or
the beneficiary. Monthly payments are made as long as at least one
of the named persons is living. The monthly payment amounts are
available on request.
Income Plan 4. Annuity
An amount can be used to buy any single premium annuity we offer on
the plan's effective date.
Payments When Named Person Dies
When the person named to receive the income payments dies, we will
pay any amounts still due as provided by the plan agreement. The
amounts still due are determined as follows:
(1) For plans 1, 2 or any remaining guaranteed payments will be
continued. Under plans 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 3% for plan 1 and 3.5% for
plan 2. We will, however, base the discount interest rate on
the interest rate used to calculate the payments for plans 1 and
2, if such payments were not based on the table in the policy.
(2) For plan 3, no amounts are payable after both named persons have
died.
(3) For plan 4, the annuity agreement will state the amount due, if
any.
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General Provisions
Entire Policy
The policy, including any attached optional benefit riders,
endorsements, amendments, the application of the policyholder, and
the enrollment forms for the insureds, constitutes the entire policy
between the policyholder and us. All statements made by the
policyholder, any certificate owner or any insured will be deemed
representations and not warranties. No such statement will be used
in any contest unless it is contained in the application signed by
the policyholder or in a written instrument signed by you or an
insured, a copy of which has been furnished to you, the beneficiary
or to the policyholder.
Non-participating
This certificate does not participate in our divisible surplus.
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Incontestability
We rely on the statements an insured or a certificate owner makes in
the enrollment form. We can contest the validity of the coverage
under the policy as described in this certificate if any material
misstatements are made in the initial enrollment form. We can also
contest any amount of death benefit which would not be payable except
for the fact that an additional premium payment was made if any
material misstatements are made in any document required with such
premium payment. We cannot contest such coverage unless such
statement is contained in a written instrument signed by an insured
or certificate owner.
We will not contest the validity of the coverage under the policy as
described in this certificate after it has been in effect during the
lifetime of the insured for two years from the issue date. Nor will
we contest any amount of death benefit attributable to any additional
premium payment after it has been in effect during the lifetime of
the insured for two years from the date we receive and accept such
premium payment.
Suicide
If the insured commits suicide, while sane or insane, within two
years from the issue date, the death benefit will be limited to the
amount of the premium payments made, less any outstanding debt.
If the insured commits suicide, while sane or insane, within two
years of any date we receive and accept an additional premium
payment, any amount of death benefit which would not be payable
except for the fact that the additional premium payment was made will
be limited to the amount of such premium payment, less any
outstanding debt.
Errors in Age or Sex
If an insured's age or sex has been misstated on the enrollment form,
the death benefit shall be that which would be purchased by the
mortality cost determined for the current processing period based on
the correct age and sex. In addition, the benefit provided by any
optional benefit rider shall be the amount purchased by the rider
deduction for the current processing period based on the correct age
and sex.
Value Reports
We will send you reports not less often than annually. The report
will show the death benefit, cash surrender value and any debt as of
such date. The report will also show the allocation of the
investment value on such date and any changes since the last report.
The report will also include any other information required by the
insurance supervisory official of the jurisdiction in which the
policy is issued.
Payments We May Defer
We may not be able to determine the value of the assets of the
separate account divisions because 1) the NYSE is closed for trading;
2) the SEC determines that a state of emergency exists; or 3) an
order or pronouncement of the SEC permits a delay for the protection
of certificate owners.
During such times as to amounts allocated to the divisions of the
separate account(s), we may delay: 1) determination and payment of
the cash surrender value and loan requests; 2) determination and
payment of any death benefit proceeds in excess of the face amount if
death occurs prior to the end of a guarantee period; after the
guarantee period we may delay determination and payment of the entire
death benefit; and 3) allocation changes of the investment value.
We may at any time defer payments of the cash surrender value or loan
requests for up to six months after we receive a written request for
such amounts allocated to the Guaranteed Interest Division. We will
pay interest on cash surrender value payment requests from the
Guaranteed Interest Division deferred 30 days or more.
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Claims of Creditors
Proceeds described in the certificate will be free from creditors
claims to the extent allowed by law.
Changes in Charges
Changes in expense charges, insurance charges or surrender charges
will be by class and based upon changes in future expectations for
such elements as: mortality, persistency, expenses and taxes. Any
change in charges will be within required procedures and standards on
file, if required, with the insurance supervisory official of the
jurisdiction in which the policy is issued.
Computations
Computations of reserves, cash surrender values, tabular value and
maximum mortality costs are based on the mortality table and interest
rate shown in the Certificate Schedule. In calculating the maximum
mortality costs, we use the attained age, sex and underwriting class
of the insured. When making our computations, we assume that death
claims are paid immediately.
We have filed a detailed statement of our computations with the
insurance supervisory official of the state or jurisdiction where the
policy is issued. All values equal or exceed those required by the
law of that state or jurisdiction. Any benefit provided by an
attached optional benefit rider will not increase these values unless
stated in that rider.
Facility of Payment
If no beneficiary is named, we reserve the right to pay an amount not
to exceed $2,000 to any person we determine to be entitled to such
amount by reason of incurred expenses incident to the last illness or
death of the insured.
Assignment
The benefits can be assigned. This does not change the ownership and
all rights are subject to the terms of the assignment. To make or
release an assignment, we must receive written notice, satisfactory
to us, at our Customer Service Center. We are not responsible for
the validity of any assignment, nor will the assignment affect any
payments made or action taken by us before we receive such written
notice.
Maturity Date
On the maturity date shown in the Certificate Schedule, the cash
surrender value will be paid if the insured is then living while this
certificate is in effect under the policy. The cash surrender value
may be paid in cash or under one or more income plans. See Choosing
an Income Plan.
Sending Notice to Us
Any written notices or requests should be sent to our Customer
Service Center.
Group Flexible Premium Variable Life Insurance Certificate
Variable insurance payable upon death of the insured. Death benefit
subject to guaranteed minimum during the guarantee period.
Guaranteed minimum is face amount shown in the Certificate Schedule.
Additional premium payments accepted during lifetime of insured as
shown in the Certificate Schedule. Non-participating. Investment
results reflected in certificate benefits.
Exhibit (5)(c)
Group Flexible Premium
Joint and Last
Survivor Variable
Life Insurance Certificate
Golden American is a stock company domiciled in Minneapolis,
Minnesota.
Offices: 909 Third Avenue, 19th Floor, New York, New York 10022
Certificate of Insurance
Policyholder: Group Policy Number:
[Golden Investors Trust] G000002
Certificate Owner: Certificate Number:
[John Doe] [123456]
Insured: Issue Date:
[John Doe] [January 1, 1998]
Joint Insured:
[Jane Doe]
In this certificate "we", "our" and "us" refers to the Golden
American Life Insurance Company. "You" and "your" refers to the
owner shown above.
We certify that the persons named as joint insureds above are insured
under the group policy number shown above. All insurance will take
effect on the certificate date shown in the Certificate Schedule.
This certificate describes the benefits and provisions of the policy.
The policy, as issued to the policyholder by us, alone makes up the
agreement under which benefits are paid. The policy may be inspected
at the office of the policyholder.
This certificate may be returned before the end of the free look
period. This period ends 10 days after the date you receive this
certificate. The certificate should be mailed or delivered to the
Customer Service Center shown below. The returned certificate will
be treated as if we never issued it. We will promptly return the
investment value plus any charges we have deducted as of the date the
returned certificate is received by us.
Signed for Golden American Life Insurance Company on the issue date.
Customer Service Center Secretary:
MBL Variable, Inc.
Post Office Box 5179, FDR Station
New York, New York 10150-5179 President:
Group Flexible Premium Joint and Last Survivor Variable Life
Insurance Certificate
Variable insurance payable upon death of the last surviving insured.
Death benefit subject to guaranteed minimum during the guarantee
period. Guaranteed minimum is face amount shown in the Certificate
Schedule. Additional premium payments accepted during lifetime of
insureds as shown in the Certificate Schedule. Non-participating.
Investment results reflected in certificate benefits.
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A copy of the enrollment form and any additional benefit riders and
endorsements are at the back of this certificate.
Schedule Pages
The schedule pages (Pages A to H) follow this page. They give
specific facts about this certificate and its coverage. Please refer
to them while reading this certificate.
Table of Contents
The contents of the certificate appear in the following order:
Schedule
Important Terms (i)
Introduction to the Certificate 1
Effective Date of Insurance
Termination
Beneficiary
Right to Name Contingent Certificate Owner
Change of Certificate Owner or Beneficiary
Premium Payments and
Allocation Changes 2
Initial Premium Payment
Additional Premium Payments
Initial Premium Allocation
Additional Premium Allocations
Reallocation of Investment Value
Account Division Not Available
How We Measure the Investment Value 3
Separate Accounts
General Account
Valuation Period
Investment Value
Investment Value In Each Division
Charges Deducted from Investment Value
in Each Processing Period
Tabular Value
Measurement of Investment Experience
Certificate Owner's Benefits 7
Cash Surrender Value
Loans
Conversion Right
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Insurance Benefits 9
Variable Insurance Amount
Death Benefit Proceeds
Insurance Coverage Period 9
How We Determine the Guarantee Period and
Face Amount
Termination after the Guarantee Period
Choosing an Income Plan 10
The Income Plans
Payments When Named Person Dies
General Provisions 11
Entire Policy
Non-participating
Incontestability
Suicide
Errors in Ages or Sexes
Value Reports
Payments We May Defer
Claims of Creditors
Changes in Charges
Computations
Establishing Survivorship
Facility of Payment
Assignment
Maturity Date
Sending Notice to Us
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Certificate Schedule
Separate Account: Separate Account A
Certificate Owner: [John Doe] Face Amount: [$100,000]
Certificate Date: [January 1, 1998] Initial Premium: [$100,000]
Insured: [John Doe], [Male], [45], [Non-Smoker] Underwriting Class:
[Medical]
Joint Insured: [Jane Doe], [Female], [45], [Non-Smoker] Underwriting
Class: [Medical
Residence State: [Delaware]
PREMIUM PAYMENT AND INVESTMENT INFORMATION
Investment
Initial premium [$100,000]
less [3]% of premium for premium tax [$3,000]
Investment Value [$97,000]
Your investment value has been allocated to the following
division(s):
Percentage of
Division Investment Value
-------- ----------------
Total 100%
Additional Premium Payments
Minimum Payment $500
Maximum attained age of insureds 80
Allocations
Maximum divisions at any one time 7
Allocation changes per certificate year without charge 5
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SEPARATE ACCOUNTS
Managed Separate Account
Not available.
Divisions Investing in Shares of Mutual Funds
Separate Account A is an unit investment trust separate account
organized in and governed by the laws of the state of Minnesota, our
state of domicile. Separate Account A is divided into divisions.
Each division listed invests in shares of the mutual fund portfolios
of The Specialty Managers Trust managed by Directed Services, Inc.
ALL-GROWTH
DIVISION
ALL-GROWTH SERIES
Portfolio Manager - Pilgrim Baxter & Associates, Ltd.
CAPITAL
APPRECIATION
DIVISION
CAPITAL APPRECIATION SERIES
Portfolio Manager - INVESCO (NY), Inc.
DEVELOPING
WORLD
DIVISION
DEVELOPING WORLD SERIES
Portfolio Manager - Montgomery Asset Management, LLC
FULLY
MANAGED
DIVISION
FULLY MANAGED SERIES
Portfolio Manager - T. Rowe Price Associates, Inc.
GROWTH
OPPORTUNITIES
DIVISION
GROWTH OPPORTUNITIES SERIES
Portfolio Manager - Montgomery Asset Management, LLC
MULTIPLE
ALLOCATION
DIVISION
MULTIPLE ALLOCATION SERIES
Portfolio Manager - Zweig Advisors Inc.
RISING
DIVIDENDS
DIVISION
RISING DIVIDENDS SERIES
Portfolio Manager - Kayne Anderson Investment Management, LLC
<PAGE>
<PAGE>
STRATEGIC
EQUITY
DIVISION
STRATEGIC EQUITY SERIES
Portfolio Manager - Zweig Advisors Inc.
VALUE
EQUITY
DIVISION
VALUE EQUITY SERIES
Portfolio Manager - Eagle Asset Management, Inc.
STRATEGIC
EQUITY
DIVISION
STRATEGIC EQUITY SERIES
Portfolio Manager - Zweig Advisors Inc.
EMERGING
MARKETS
DIVISION
EMERGING MARKETS SERIES
Portfolio Manager - J. P. Morgan Investment Management Inc.
GLOBAL
FIXED
INCOME
DIVISION
GLOBAL FIXED INCOME PORTFOLIO
Portfolio Manager - Barings Investment Limited International
GROWTH AND
INCOME
DIVISION
GROWTH AND INCOME PORTFOLIO
Portfolio Manager - Robertson, Stephens & Company Investment
Management, L.P.
HARD
ASSETS
DIVISION
HARD ASSETS SERIES
Portfolio Manager - Van Eck Associates Corporation
LIMITED
MATURITY
BOND
DIVISION
LIMITED MATURITY BOND SERIES
Portfolio Manager - ING Investment Management, LLC
LIQUID
ASSET
DIVISION
LIQUID ASSET SERIES
Portfolio Manager - ING Investment Management, LLC
<PAGE>
<PAGE>
MANAGED
GLOBAL
DIVISION
MANAGED GLOBAL SERIES
Portfolio Manager - Putnam Investment Management, Inc.
MID-CAP
GROWTH
DIVISION
MID-CAP GROWTH SERIES
Portfolio Manager - Massachusetts Financial Services Co.
REAL
ESTATE
DIVISION
REAL ESTATE SERIES
Portfolio Manager - EII Realty Securities, Inc.
RESEARCH
DIVISION
RESEARCH PORTFOLIO
Portfolio Manager - Massachusetts Financial Services Company
SMALL
CAP
DIVISION
SMALL CAP SERIES
Portfolio Manager - Fred Alger Management, Inc.
<PAGE>
<PAGE>
GV390(c) Page 2
The Schedule (continued)
SEPARATE ACCOUNTS AND GENERAL ACCOUNT (continued)
TOTAL
RETURN
DIVISION
TOTAL RETURN PORTFOLIO
Portfolio Manager - Massachusetts Financial Services Company
VALUE +
GROWTH
DIVISION
VALUE + GROWTH PORTFOLIO
Portfolio Manager - Robertson, Stephens & Company Investment
Management, L.P.
NOTE: PLEASE REFER TO THE PROSPECTUSES FOR THE CONTRACT AND THE GCG
TRUST FOR MORE DETAILS.
Each division listed below invests in shares of the mutual fund
portfolio (the "Portfolio") designated. Each portfolio is a part of
the PIMCO Trust managed by Pacific Investment Management Company
("PIMCO").
HIGH YIELD
BOND
DIVISION
HIGH YIELD BOND PORTFOLIO
Portfolio Manager - PIMCO
STOCKSPLUS
GROWTH AND
INCOME
DIVISION
STOCKSPLUS GROWTH AND INCOME PORTFOLIO
Portfolio Manager - PIMCO
<PAGE>
<PAGE>
GENERAL ACCOUNT
The general account offers a guaranteed interest division, as shown
below, known as the Guaranteed Division, for allocation of funds
under this certificate.
Guaranteed Division
Not available, except as specified below.
Right to Exchange
If you are exercising your right to exchange this certificate for a
fixed benefit insurance policy, you may reallocate all of the
investment value under your certificate to the Guaranteed Division at
any time within the first eighteen months of your certificate.
<PAGE>
<PAGE>
CERTIFICATE FACTS
Processing Dates
[April 5, 1998]
Specially Designated Division
Liquid Asset Division.
Mortality Table and Interest Rate
Insured: [MORTALITY TABLE HERE]
For attained ages up to and including age 19 the aggregate table will
be used. Thereafter the smoker table will be used unless non-smoker
status has been applied for and granted.
Joint Insured: [MORTALITY TABLE FOR JOINT HERE].
For attained ages up to and including age 19 the aggregate table will
be used. Thereafter the smoker table will be used unless non-smoker
status has been applied for and granted.
Interest at 4% per year.
Loans
Maximum Loan Value 90%
Minimum Amount of Loan $1,000
Minimum Repayment Lesser of $1,000 and the loan balance.
Loan Interest Rate 5% per year, due and payable on each
certificate anniversary.
Initial Guarantee Period
The initial guarantee period expires on [February 1, 1998].
Maturity Date
[January 1, 2030]
Optional Benefit Riders
Charge Deduction Division Rider - (Not Applicable)
Partial Withdrawal Rider
<PAGE>
<PAGE>
EXPENSE CHARGES
Deductions from Initial Premium Payment
Premium Tax [None]
Deductions from Additional Premium Payments
Premium Tax [3] of each premium
We reserve the right to change the amount of the deduction on future
payments to conform to changes in the amount payable by Golden
American under applicable law as of the date(s) of such premium
payments or if the insured changes state of residence.
Deductions from Investment Value
Initial Administrative Charge
[None]
Initial Charge [$0.00]
Quarterly Installment [$25.00]
Quarterly Administrative Charge
[None]
Quarterly Recovery of Deferred Loading
[None]
The deferred loading consists of a sales load of 6.0%, which
compensates us for sales expenses, plus a minimum death benefit
guarantee charge of 1.5% to cover the minimum death benefit
guarantee, and a premium charge of 1.5% (this is deemed to be sales
load) to cover the tax effect of the recently passed tax legislation.
Deferred Period six years
Deferred Loading [5%] of premium
Installment Amount [3%]
Loan Charge
This is the amount charged on each certificate anniversary, accrued
daily.
Loan Charge 1.00% of certificate loan amount
<PAGE>
<PAGE>
EXPENSE CHARGES (continued)
Excess Allocation Charge
This is the amount charged for each allocation change in excess of
five.
Excess Allocation Charge $25
Deductions from the Separate Account Divisions
Mortality and Expense Risk Charge
We charge a daily rate of 0.002477% of the assets in each division
(equivalent to an annual rate of 0.90%) for mortality and expense
risks.
Asset Based Administrative Charge
We charge a daily rate of 0.000276% of the assets in each division of
the Account (equivalent to an annual rate of 0.10%) to cover a
portion of the certificate administration.
<PAGE>
<PAGE>
Insurance Charges
Mortality Cost
The mortality cost is deducted from the investment value on each
processing date. The guaranteed maximum cost of insurance rates per
$1,000 of the net amount at risk are shown below.
TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES
(Attained Age Quarterly Rates per $1,000 of Net Amount at Risk)
Policy COI Policy COI Policy COI
Year Rate Year Rate Year Rate
------ ------ ------ ------- ------ ---------
1 .00067 26 .59317 51 32.61385
2 .00218 27 .70536 52 37.00999
3 .00399 28 .84278 53 41.72058
4 .00616 29 1.01105 54 46.73954
5 .00874 30 1.21229 55 52.11409
6 .01192 31 1.44865 56 57.87959
7 .01573 32 1.72414 57 64.23938
8 .02015 33 2.03816 58 71.46431
9 .02544 34 2.39934 59 80.22655
10 .03161 35 2.82032 60 92.06771
11 .03904 36 3.31997 61 110.37960
12 .04767 37 3.92133 62 143.18332
13 .05781 38 4.65199 63 212.55763
14 .06964 39 5.53184 64 270.08071
15 .08381 40 6.56406 65 333.33333
16 .10050 41 7.75180
17 .12081 42 9.09063
18 .14516 43 10.58108
19 .17480 44 12.23753
20 .21006 45 14.10334
21 .25177 46 16.23831
22 .30081 47 18.70798
23 .35688 48 21.57777
24 .42238 49 24.86748
25 .50051 50 28.55748
Rates shown are based on each insured's attained age, smoking status
and underwriting class as of the certificate date and the certificate
anniversary. They do not change during a certificate year. For
attained ages up to and including age 19 the aggregate table will be
used. Thereafter the smoker table will be used unless non-smoker
status has been applied for and granted. For attained ages up to and
including age 19 the aggregate table will be used. Thereafter the
smoker table will be used unless non-smoker status has been applied
for and granted.
Minimum Death Benefit Guarantee Charge
See Quarterly Recovery of Deferred Loading
<PAGE>
<PAGE>
NET SINGLE PREMIUM FACTORS
Net Single Premium Factors
TABLE OF NET SINGLE PREMIUM FACTORS
(Attained Age Factors Per $1,000 of Cash Surrender Value)
Policy NSP Policy NSP Policy NSP
Year Factor Year Factor Year Factor
------ ------ ------ ------- ------ ---------
1 6.68170 26 2.38178 51 1.20435
2 5.96589 27 2.29746 52 1.18755
3 5.73667 28 2.21694 53 1.17215
4 5.51644 29 2.14016 54 1.15793
5 5.30484 30 2.06704 55 1.14463
6 5.10156 31 1.99751 56 1.13202
7 4.90628 32 1.93143 57 1.11982
8 4.71871 33 1.86870 58 1.10776
9 4.53855 34 1.80914 59 1.09554
10 4.36552 35 1.75263 61 1.08291
11 4.19936 36 1.69906 61 1.06977
12 4.03981 37 1.64837 62 1.05631
13 3.88663 38 1.60054 63 1.04342
14 3.73958 39 1.55558 64 1.03406
15 3.59842 40 1.51350 65 1.02207
16 3.46296 41 1.47422 66 1.00000
17 3.33298 42 1.43762
18 3.20830 43 1.40354
19 3.08876 44 1.37177
20 2.97418 45 1.34212
21 2.86440 46 1.31446
22 2.75926 47 1.28871
23 2.65859 48 1.26485
24 2.56222 49 1.24287
25 2.46999 50 1.22274
Factors shown are based on each insured's attained age, smoking
status and underwriting class as of the certificate date and each
certificate anniversary after that. For attained ages up to and
including age 19 the aggregate table will be used. Thereafter the
smoker table will be used unless non-smoker status has been applied
for and granted. For attained ages up to and including age 19 the
aggregate table will be used. Thereafter the smoker table will be
used unless non-smoker status has been applied for and granted. _
On processing dates not shown, we determine the Net Single Premium
Factor in a consistent manner with allowance for time elapsed.
The Net Single Premium Factor on a date during a processing period is
determined by interpolating between the factors for the processing
date immediately preceding and immediately following that date. For
the first processing period, the starting point is the certificate
date.
Adjustment of Net Single Premium Factors
Not applicable. To keep the certificate qualified as life insurance
under federal income tax laws or regulations, we will adjust the net
single premium factors to reflect guarantees provided under the
Guaranteed Division. We will make the adjustment for the year after
an additional premium payment or partial withdrawal is made if it
increases or decreases the face amount. The net single premium
factor for the first certificate year has been adjusted to reflect
the guarantees in the Guaranteed Division.
<PAGE>
<PAGE>
INCOME PLANS
Income Plans Tables
Values for other payment periods, ages or joint life combinations are
available on request. Monthly payments are shown for each $1,000
applied.
Table for Income for a Fixed Period
Fixed Period Monthly Fixed Period Monthly Fixed Period Monthly
of Years Income of Years Income of Years Income
- ------------ ------- ------------ ------- ------------ -------
1 $84.68 11 $8.88 21 $5.33
2 42.96 12 8.26 22 5.16
3 29.06 13 7.73 23 5.00
4 22.12 14 7.28 24 4.85
5 17.95 15 6.89 25 4.72
6 15.18 16 6.54 26 4.60
7 13.20 17 6.24 27 4.49
8 11.71 18 5.98 28 4.38
9 10.56 19 5.74 29 4.28
10 9.64 20 5.53 30 4.19
Table for Income for Life
Age 10 Years Certain 20 Years Certain Refund Certain
- ---- ---------------- ---------------- --------------
50 $4.93 $4.68 $4.74
55 5.45 4.99 5.16
60 6.11 5.30 5.75
65 6.91 5.54 6.52
70 7.79 5.68 7.33
75 8.61 5.75 8.61
80 9.24 5.77 10.43
85 & Over 9.62 5.77 12.16
<PAGE>
<PAGE>
Important Terms
Account: This is a separate account established to hold segregated
assets and used only to support variable life insurance.
Age: Attained age for each insured is the insured's issue age plus
the number of full years since the certificate date. Issue age is an
insured's age on his or her last birthday on or before the
certificate date.
Cash Surrender Value: This is the investment value less any
certificate charges incurred but not yet deducted.
Certificate Date: This is the date used to determine processing
dates, certificate years and certificate anniversaries. It may or
may not be the same as the issue date but it usually is the date the
initial premium is received by our Customer Service Center.
Certificate Owner: This is the person named as such in the enrollment
form and to whom this certificate is issued.
Customer Service Center: This is where our policies are serviced.
The address is shown on the cover.
Death Benefit: This is the larger of the face amount and the variable
insurance amount. Any debt will be deducted from the death benefit
before payment.
Debt: This is the sum of all outstanding loans plus accrued interest
under this certificate.
Face Amount: This is the minimum death benefit we will pay under this
certificate while such certificate and the policy are in force.
Additional premium payments may increase the face amount under this
certificate.
Guarantee Period: This is the time we will guarantee that this
certificate will remain in force regardless of the investment
experience unless there is debt and the cash surrender value is
negative. Additional premium payments may increase the guarantee
period under this certificate.
Insured: This is each person named on the enrollment form who is
insured under the policy as described in this certificate.
Issue Date: This is the date this certificate is issued at our
Customer Service Center. The contestable and suicide periods are
measured from this date.
Investment Value: This is the amount available under this certificate
for investment at any time. It is the sum of the amounts invested in
each of the divisions selected.
Joint Insured: This is the person named as such in the enrollment
form.
Maturity Date: This is the anniversary of the certificate date
immediately following the younger insured's 100th birthday. On this
date coverage under this certificate matures and the cash surrender
value is payable.
Net Single Premium Factor: This is the factor used in the calculation
of the variable insurance amount. It is based on the attained age,
smoking status and sex of the insureds and is designed to ensure that
coverage under the policy as described in this certificate meets the
definition of life insurance under the provisions of the Internal
Revenue Code.
Policyholder: This is the person or entity to whom the policy is
issued.
Processing Date(s): This is the first day of each quarter after the
certificate date. They are the days when we deduct certain charges
from the investment value under this certificate.
Processing Period: This is the period between consecutive processing
dates with the first such period beginning on the certificate date.
Specially Designated Division: This is a division for allocation of a
distribution from a division or portfolio in which reinvestment is
not available.
Valuation Period: This is each business day together with any non-
business days before it. A business day is any day the New York
Stock Exchange (NYSE) is open for trading or any day the Securities
and Exchange Commission (SEC) requires mutual funds, unit investment
trusts or other investment portfolios to be valued.
Variable Insurance Amount: This is the cash surrender value plus any
debt multiplied by the net single premium factor.
<PAGE>
<PAGE>
Introduction to the Certificate
Effective Date of Insurance
The insureds will be covered under the policy from the issue date
shown in the Certificate Schedule.
Termination
Insurance will terminate under this certificate on the earlier of the
following dates:
(1) The date the policy terminates.
(2) The date you request termination of this certificate by written
notice.
(3) On the maturity date shown in the Certificate Schedule.
(4) If there is a debt, thirty-one days after we mail to you notice
that the cash surrender value is negative.
(5) Sixty one days after we mail notice to you that the cash
surrender value is negative.
(6) Death of the last surviving insured under this certificate.
Beneficiary
The beneficiary is the person to whom we will pay death benefit
proceeds upon the death of the last surviving insured. We pay the
proceeds to the primary beneficiary. If such beneficiary dies before
the last surviving insured the proceeds are paid to the contingent
beneficiary, if any. If there is no surviving beneficiary, we pay
the proceeds to the estate of the last surviving insured. One or
more persons may be named as primary beneficiaries or contingent
beneficiaries. In such case we will assume the proceeds are to be
paid in equal shares to the surviving beneficiaries. If all primary
beneficiaries have died we then pay the surviving contingent
beneficiaries in equal shares. You can specify other than equal
shares.
If an irrevocable beneficiary has been named, you and the irrevocable
beneficiary must act together to exercise the rights and options
under the policy as described in this certificate.
Right to Name a Contingent Certificate Owner
You may want to name a contingent certificate owner before any death
benefit proceeds are payable under this certificate. Ownership of
the rights under the policy as described in this certificate will
then pass to the contingent certificate owner. If no contingent
certificate owner is named, ownership will pass to your estate.
Change of Certificate Owner or Beneficiary
During either insured's lifetime and while this certificate is in
effect under the policy you can transfer ownership of coverage
described in this certificate, change the contingent ownership or
change the beneficiary. Written notice of any change must be given
to us on a form satisfactory to us. The change will take effect the
date the notice is signed. However, the change will not affect any
payments made or action taken by us before we receive the notice of
change at our Customer Service Center.
<PAGE>
<PAGE>
Premium Payments and Allocation Changes
Initial Premium Payment
The initial premium payment is required to put this certificate in
effect. The amount and allocation of the initial premium payment is
shown in the Certificate Schedule.
Additional Premium Payments
Additional premium payments may be made if both insureds are living.
Satisfactory notice to us must be given for additional premium
payments. Evidence of insurability based on our underwriting rules
may be required. Such premium payments are subject to any
restrictions shown in the Certificate Schedule.
We reserve the right to return any additional premium payment that we
believe would cause this policy to fail to qualify as life insurance
under applicable tax laws.
Unless specified otherwise, if there is any debt, any additional
premium payment will be used as a loan repayment with any excess
applied as an additional premium payment.
On the date we receive and accept such payment:
(1) The variable insurance amount will increase;
(2) Any deferred loading in a certificate year of payment will
increase. The increase will be recovered in level installments
from the investment value. See Certificate Schedule for
details.
(3) The tabular value will increase by the amount of the payment
less any premium deductions before allocation and less any
deferred loading applicable to such payment shown in the
Certificate Schedule.
The guaranteed benefits will increase as of the processing date on or
next following the date we receive and accept the additional premium
payment.
Additional premium payments are to be sent to our Customer Service
Center. Upon request a receipt will be given.
Initial Premium Allocation
The initial premium payment is shown in the Certificate Schedule and
is allocated to selected divisions on the date we receive it. The
initial allocation is shown in the Certificate Schedule.
Additional Premium Allocations
On the date we receive and accept an additional premium payment the
increase in the investment value will be allocated among the separate
account and general account divisions. Unless otherwise indicated,
the allocation will be to the divisions in proportion to the
investment value in each division on the date we receive and accept
such payment.
Reallocation of Investment Value
The investment value may be reallocated among the divisions. The
number of allocation changes that we will allow in the certificate
year is shown in the Certificate Schedule. To make any change,
satisfactory notice must be given to our Customer Service Center.
The change will take effect when we receive the notice. Restrictions
for reallocation into and out of the divisions are shown in the
Certificate Schedule.
<PAGE>
<PAGE>
Account Division Not Available
When a distribution is made from a managed separate account division
or from an investment portfolio supporting a unit investment trust
separate account division in which reinvestment is not available, we
will allocate the distribution to the Specially Designated Division
shown in the Certificate Schedule, unless you specify otherwise.
Such a distribution can occur when a division or a portfolio has a
maturity date; when distribution from a division or a portfolio
cannot be reinvested in the division or portfolio due to the
unavailability of securities or for any other reason. When this
occurs because of a maturity date, we will notify you 30 days in
advance of such date. To elect an allocation other than the
Specially Designated Division you must give us satisfactory notice at
least seven days prior to a maturity date. Such allocations will not
be counted as an allocation change of the investment value for the
purposes of the number of free changes permitted.
How We Measure the Investment Value
The variable insurance benefits under the policy are provided through
investments made in our separate accounts and general account.
Separate Accounts
These accounts are separate from our general account and any other
separate accounts we may have. They support variable insurance
benefits and are used for other purposes permitted by applicable laws
and regulations. We own the assets in the separate accounts. Assets
equal to the reserves and other liabilities of each account will not
be charged with liabilities from any other business we conduct. We
may transfer to our general account assets exceeding the reserves and
other liabilities of the separate accounts. Income realized and
unrealized gains or losses from assets in each separate account are
credited to or charged against the account without regard to other
income, gains or losses in our other investment accounts.
One type of separate account invests in mutual funds, unit investment
trusts and other investment portfolios we determine to be suitable.
The separate account is treated as a unit investment trust under
Federal securities laws. It is registered with the SEC under the
Investment Company Act of 1940. The separate account is also
governed by state laws as shown in the Certificate Schedule.
One type of separate account will invest directly in portfolio
securities deemed appropriate by the investment adviser and committee
managing the separate account. This separate account is treated as
an open end, diversified management investment company under Federal
securities laws. It is registered with the SEC under the Investment
Company Act of 1940. The separate account is also governed by state
laws as shown in the Certificate Schedule.
Separate Account Divisions
A unit investment trust separate account includes divisions each
investing in a designated investment portfolio. Some of the
portfolios designated may be managed by separate investment advisers
who may be registered under the Investment Advisers Act of 1940. The
divisions and the investment portfolios are shown in the Certificate
Schedule, if applicable.
A managed separate account includes divisions, each investing
directly in portfolios of securities designed to meet the objectives
of the division. The divisions and their objectives, if applicable,
are specified in the Certificate Schedule. Some of the divisions
designated may be managed by a separate investment adviser. Such
advisers may be registered under the Investment Advisers Act of 1940.
<PAGE>
<PAGE>
Changes Within The Separate Accounts
We may, from time to time, make additional separate account divisions
available. These divisions will invest in investment portfolios we
find suitable. We also have the right to eliminate divisions from
the separate account, combine two or more divisions or substitute a
new portfolio for the portfolio in which a division invests. A
substitution may become necessary if, in our judgment, a portfolio no
longer suits the purposes under the policy as described in the
certificate. Changes may be required because of a change in law or
regulation, or a change in a portfolio's investment objectives or
restrictions, or because a portfolio is no longer available for
investment or for some other reason. We will get approval from the
regulatory authority of our state of domicile before making any
substitution. This approval process is on file with the insurance
department of the jurisdiction in which the policy is delivered. We
will also get any required approval from the SEC and any other
required approvals.
Subject to any required regulatory approvals, we reserve the right to
transfer assets of the separate account or of a division which we
determine to be associated with a class of policies to which the
policy belongs, to another separate account or division.
When permitted by law, we reserve the right to:
(1) deregister a separate account under the Investment Company Act
of 1940;
(2) operate a separate account as a management company under the
Investment Company Act of 1940, if it is operating as a unit
investment trust;
(3) operate a separate account as a unit investment trust under the
Investment Company Act of 1940, if it is operating as a managed
separate account;
(4) restrict or eliminate any voting rights of certificate owners or
other persons having voting rights as to the separate account;
and
(5) combine a separate account with other separate accounts.
General Account
The general account contains all of our assets other than assets of
the separate accounts we establish.
General Account Divisions
The divisions are shown in the Certificate Schedule.
Valuation Period
Each division will be valued at the end of each valuation period on a
valuation date.
Investment Value
The investment value is the amount that is available under this
certificate for investment at any time. It is the sum of the amount
of investment value in each division of the separate account and
general account. You select the divisions for allocation of the
investment value. The number of divisions to which the investment
value may be allocated at any one time is shown in the Certificate
Schedule.
Investment Value In Each Division
On the certificate date the investment value is allocated to each
division as shown in the Certificate Schedule.
At the end of each subsequent valuation period, the investment value
in each division will be calculated as follows:
(1) Take the investment value of the division at the end of the
preceding valuation period.
(2) Multiply (1) by the division's net rate of return for the
current valuation period.
(3) Add (1) and (2).
<PAGE>
<PAGE>
(4) Add to (3) any additional premium payments (less any premium
deductions shown in the Certificate Schedule) allocated to the
division during the current valuation period.
(5) Add or subtract allocations to or from that division during the
current valuation period.
(6) Add to (5) any loan repayments received and subtract from (5)
any loans which are allocated to the division during the current
valuation period.
(7) If a processing date occurs during the current valuation period,
subtract from (6) the amounts allocated to that division for:
(a) expense charges; and
(b) insurance charges and mortality costs.
Amounts in (7) will be allocated to each division in the proportion
that (6) bears to the investment value.
(8) If the charges in (7) exceed the amount in (6), first calculate
the cash surrender value to determine the amount of any overdue
charges and then set the investment value in each division to
zero.
Charges Deducted from Investment Value in Each Processing Period SEE
ENDORSEMENT
Mortality Costs
The mortality cost is deducted on each processing date as follows:
(1) Determine the net amount at risk on the same day of each month
of the processing period starting with the previous processing
date. The net amount at risk on each date is:
(a) the death benefit as of that date; less
(b) the sum of the cash surrender value and any debt as of that
date.
(2) Adjust each net amount at risk in (1) for interest used in our
calculations as shown in the Certificate Schedule to reflect
that we:
(a) assume claims are paid immediately upon death of the last
surviving insured; and
(b) deduct the mortality costs at the end of the processing
period.
(3) Add the three monthly amounts in (2) and divide by three to
determine the average net amount at risk for the period.
(4) Divide (3) by $1,000.
(5) Determine the current cost of insurance rate per $1,000 of net
amount at risk based on the insured's sexes, attained ages,
underwriting classes and the value of rate (4) above. If the
insured's underwriting classes change because of additional
premium payments, we will determine the current cost of
insurance rate per $1,000 of net amount separately for increases
in the death benefit after the effective date of the increase.
(6) Multiply (4) by (5).
In no event will (6) be greater than the amount determined by
substituting the tabular value for cash surrender value in (1)(b)
above and the guaranteed maximum cost of insurance rate for the
current cost of insurance rate per $1,000 in (5).
We may reduce or increase the cost of insurance rate per $1,000 from
time to time based on the experience of a group participating under
the policy. The change will never be retroactive. The change will
never be more than the guaranteed maximum cost of insurance per
$1,000 shown in the Certificate Schedule. The mortality cost during
a processing period is calculated in a similar manner with allowance
for time elapsed.
Other Deductions
Expense charges are shown in the Certificate Schedule. The charges
for any minimum death benefit guarantee and the cost of any benefits
from optional benefit riders are also shown in the Certificate
Schedule. The net loan cost is described in Loans.
<PAGE>
<PAGE>
Tabular Value
The tabular value on the certificate date equals investment value on
that date. Thereafter, the tabular value is calculated the same as
the cash surrender value except the mortality cost will be based on
the guaranteed maximum cost of the insurance rates and the net rate
of return will be based on the interest rate used in our
computations, as shown in the certificate schedule. The tabular
value calculations do not reflect loans, repayments, expenses charges
or the minimum death benefit guarantee charge, In the calculation of
the tabular value, the variable insurance amount on any date is equal
to the tabular value as of such date multiplied by the net single
premium of such date.
Measurement of Investment Experience
The investment experience of a separate account division is
determined at the end of each division's valuation period. We use an
index to measure changes in experience during a valuation period. We
set the index at $10 when the first investments in a division are
made. The index for a current valuation period equals the index for
the last valuation period multiplied by the experience factor for the
current period.
The Experience Factor
The experience factor for a valuation period reflects the investment
experience of the portfolio in which the division invests and the
charges assessed to the division. The factor is calculated as
follows:
(1) Take the net asset value at the end of a current valuation
period of a division's corresponding portfolio.
(2) Add the amount of any dividend or capital gains distribution
declared during the current valuation period for such portfolio
and reinvested in the portfolio. Subtract a charge for taxes,
if any.
(3) Divide (2) by the net asset value of the portfolio at the end of
the preceding valuation period.
(4) Subtract the daily mortality and expense risk charge for each
division shown in the Certificate Schedule for each day in the
valuation period. This charge is to cover expense and mortality
risks that we are assuming.
(5) For certain divisions, subtract an additional charge equal to
the daily charge shown in the Certificate Schedule for each day
in the valuation period.
Calculations for divisions investing in mutual fund portfolios are
made on a per share basis. Calculations for divisions investing in
unit investment trusts are on a per unit basis.
For divisions of a managed separate account investing directly in
portfolio securities, the experience factor reflects the investment
experience of the division as well as the charges assessed against
the division for a valuation period. The factor is calculated as
follows:
(1) Take the value of the assets in the division at the end of the
preceding valuation period.
(2) Add to (1) any investment income and capital gains, realized or
unrealized, credited to the assets during the current valuation
period.
(3) Subtract from (2) any capital losses, realized or unrealized,
charged against the assets during the current valuation period.
(4) Subtract from (3) any amount charged against the division for
any taxes.
(5) Divide (4) by the value of the assets in the division at the end
of the preceding valuation period.
(6) Subtract from (5) a charge for operating expenses actually
incurred.
(7) Subtract from (6) the charge for investment management as shown
in the Certificate Schedule.
(8) Subtract from (7) the charge for mortality and expense risks as
shown in the Certificate Schedule.
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Net Rate of Return - Separate Account Division
The net rate of return during a valuation period is the experience
factor for that valuation period minus one.
Net Rate of Return - Guaranteed Division
The net rate of return for the Guaranteed Division for a valuation
period is the rate for the number of days in the valuation period
equivalent to the effective annual interest rate declared for that
division.
Certificate Owner's Benefits
There are important rights and benefits available to you during the
lifetime of either insured. These rights and benefits are discussed
in this section.
Cash Surrender Value
The cash surrender value is determined as follows:
(1) Take the investment value;
(2) Deduct any unrecovered deferred loading;
(3) Deduct any expense charges and insurance charges shown in the
Schedule that have been incurred but not yet deducted,
including;
(a) any first year administrative charge;
(b) any quarterly administrative charge to be deducted on the
next processing date;
(c) any net loan charge accrued since the last processing date;
(d) the pro rata part of the mortality cost since the last
processing date;
(e) the pro rata part of any minimum death benefit risk
premium; and
(f) the pro rata part of any charges for optional benefit
riders.
The cash surrender value may be paid in cash or under one or more
income plans. To surrender this certificate a signed request for
surrender in a form satisfactory to us must be submitted to our
Customer Service Center together with the certificate. The surrender
will take effect on the date the request is sent to us. We will
determine the cash surrender value as of the date we receive the
signed request and the certificate at our Customer Service Center.
We may delay payment as described under the Payments We may Defer
provision.
Loans
You may borrow against the cash surrender value. The certificate
will be the only security we require for the loan. A loan may be
taken or repaid while the certificate is in effect provided the
policy is in force.
When We Will Make a Loan
We will usually loan the money within seven days after we receive a
request satisfactory to us. We may delay making the loan as
described in Payments We may Defer. If the loan is to be used to pay
premiums on other variable life insurance coverage offered by us we
will make the loan immediately.
Loan Value
The maximum loan value percentage is shown in the Certificate
Schedule. The amount of the loan may not exceed the sum of the cash
surrender value plus any existing debt, multiplied by the maximum
loan value percentage. Any existing debt will be deducted from a new
loan. The minimum amount of loan and repayment is shown in the
Certificate Schedule.
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Interest
The interest rate is shown in the Certificate Schedule. Interest
accrues each day. Interest payments are due as shown in the
Certificate Schedule. If interest is not paid when due it will be
added to the amount of the loan. The sum of all outstanding loans
plus accrued interest is the debt.
Interest payments when received will be allocated among the divisions
in accordance with your instructions. If no instructions are
received by us, we will allocate the interest payments in proportion
to the amount of investment value in each division.
Effects of a Loan
A loan will be taken out of the divisions and a repayment will go
into the divisions. A loan reduces the investment value while
repayment increases it. Unless specified otherwise, loans and
repayments will be allocated in proportion to the amount of
investment value in each division as of the date of the loan or
repayment. A loan, whether or not repaid, will have a permanent
effect on the cash surrender values and may have a permanent effect
on the death benefits. If not repaid the debt will reduce the amount
of death benefit and cash surrender value. If on any valuation date
there is a loan outstanding and the cash surrender value is negative
we will terminate the certificate 31 days after we send you an
overloan notice. We will notify you and anyone who holds the
certificate as collateral at his or her last known address.
Net Loan Cost
The net loan cost will be calculated on each processing date as
follows:
(1) Determine the outstanding loan(s) since the last certificate
anniversary;
(2) Multiply by the daily loan charge shown in the Certificate
Schedule taking account of the time elapsed.
Loans and repayments during a processing period will affect our
calculation.
Conversion Right
If an insured terminates membership or ceases to be a member of an
eligible class, insurance under this certificate can be converted to
an individual policy of variable life insurance customarily issued by
us. No evidence of insurability will be required. The amount of
insurance available will be an amount agreed to by us and that does
not exceed the amount of life insurance that existed under the
policy.
If the policy terminates or is amended to discontinue an eligible
class to which an insured belongs, an individual policy of variable
life insurance will be available without evidence of insurability.
The amount of insurance under the new policy will be the amount
required, for a conversion to an individual policy, by the state or
jurisdiction where such policy is issued.
The premium for the individual policy will be at our then customary
rate that applies to the:
(1) form and amount of insurance;
(2) class of risk to which the insureds then belong; and
(3) the attained age of the insureds on the effective date of the
policy.
The individual policy of variable life insurance will:
(1) only be issued if application is made and the first premium is
paid to us within 31 days after termination of coverage under
the policy.
(2) take effect no later than the end of a period of 31 days after
termination of coverage under the policy.
(3) be without disability or other supplemental benefits.
If the last surviving insured dies during the 31 day period during
which an application for an individual policy can be made, we will
pay as a death benefit, under the policy, the amount of insurance
that could have been converted.
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Insurance Benefits
Variable Insurance Amount
The variable insurance amount on the certificate date equals the cash
surrender value on that date multiplied by the net single premium
factor for that date. Thereafter, the variable insurance amounts
will vary daily based on investment results and any premiums paid.
The variable insurance amount after the certificate date will be
determined as follows:
(1) Determine the cash surrender value as of such date;
(2) Add to (1) any debt as of such date.
(3) Multiply (2) by the net single premium factor as of such date.
The variable insurance amount will never be less than required to
qualify the coverage described in the certificate as life insurance
under applicable Federal income tax laws. The Table of Net Single
Premium Factors is in the Certificate Schedule.
Death Benefit Proceeds
We will pay the death benefit proceeds to the beneficiary when we
receive due proof of the death of each of the insureds. The proceeds
may be paid in cash or be allocated to one or more income plans. The
death benefit proceeds will never be less than required to qualify
the coverage described in the certificate as life insurance under
applicable Federal income tax laws.
Death benefit proceeds are determined on the date of death of the
last surviving insured as follows:
(1) Determine the larger of the face amount and the variable
insurance amount;
(2) Subtract from (1) any debt;
(3) Add to (2) any amounts due from optional benefit riders.
If the last surviving insured dies during any grace period we will
pay the beneficiary the death proceeds in effect immediately prior to
such grace period reduced by any overdue charges.
If the death benefit is payable after an additional premium payment
has been accepted and before the next processing date, we will pay
the beneficiary the larger of:
(1) the amount of the death benefit calculated as of the prior
processing date plus the amount of the additional premium
payment; and
(2) the variable insurance amount as of the date of death.
To Claim Death Benefit Proceeds
The beneficiary should contact our Customer Service Center for
instructions. We usually pay the proceeds within seven days after we
receive due proof of the deaths of both insureds and all other
requirements. We may delay all or part of the death benefit proceeds
as described under the Payments We may Defer provision. Interest
will be paid on death benefit proceeds from the date of death of the
last surviving insured to the date of payment. Interest will never
be less than required by applicable law.
Insurance Coverage Period
How We Determine the Guarantee Period and Face Amount
On the Certificate Date
The initial guarantee period and face amount on the certificate date
are shown in the Certificate Schedule. The guarantee period and face
amount are not affected by investment results nor the allocation of
the investment value among the divisions. They will change as
described below as a result of any additional premium payments.
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When an Additional Premium Payment is Made
The guaranteed benefits will increase as follows:
(1) We take the immediate increase in cash surrender value resulting
from an additional premium payment and add interest for the
period from the date we receive and accept the additional
premium payment to the processing date on or next following such
date.
(2) If the guarantee period prior to such premium payment is less
than for the whole of life the total of (1) and the tabular
value as of the processing date will be used to calculate a new
guarantee period. Any part of such total amount in excess of
the amount required to increase the guarantee period to the
whole of life will be applied as indicated in (3).
(3) If the guarantee period is for life; the amount from (1) or the
excess from (2) will be applied as a net single premium for the
whole of life to increase the face amount.
The mortality table and interest rate used are shown in the
Certificate Schedule.
Termination After the Guarantee Period
At any time after the end of a guarantee period, if the cash
surrender value on a processing date is negative, we will notify you
of the pending termination of insurance under the policy as described
in the certificate. This negative cash surrender value will be
considered as an overdue charge as of such processing date. We will
not terminate the coverage due to a negative cash surrender value
until the end of a grace period of 61 days from the date we mail
notice to you.
To avoid termination, you must pay us at least the charges that were
due on the processing date on which we determined that the cash
surrender value was insufficient. The amount will be in the notice
we send. If the last surviving insured dies during the grace period,
we will pay the beneficiary as described in the Death Benefit
Proceeds provision.
Choosing an Income Plan
While coverage is in effect you may choose one or more income plans
for the distribution of the death benefit proceeds. If, at the time
of the death of the last surviving insured, no plan has been chosen
for payment of the death benefit proceeds, the beneficiary may choose
a plan within one year. You may also elect an income plan on
surrender of the certificate for its cash surrender value. For each
plan we will issue a separate written agreement putting the plan into
effect.
Our approval is needed for any plan where: (1) the person named to
receive payment is other than you or the beneficiary; or (2) the
person named is not a natural person, such as a corporation; or (3)
any income payment is less than $500.
The Income Plans
Income Plan 1. Income for a Fixed Period
Payment is made in equal installments for a fixed number of years.
We guarantee each monthly payment will be at least the Income for
Fixed Period amount shown in the Certificate Schedule. Values for
annual, semiannual or quarterly payments are available on request.
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Income Plan 2. Income for Life
Payment is made in equal monthly installments and guaranteed for at
least a period certain. The period certain can be 10 or 20 years.
Other periods certain are available on request. A refund certain may
be chosen instead. Under this arrangement, income is guaranteed
until payments equal the amount applied. If the person named lives
beyond the guaranteed period, payments will continue until death.
We guarantee each payment will be at least the amount shown in the
Income for Life table in the Certificate Schedule. By age we mean
the named person's age on the last birthday before the plan's
effective date. Amounts for ages not shown are available on request.
Income Plan 3. Joint Life Income
This plan is available if there are two persons named to receive
payments. At least one of the persons named must be either you or
the beneficiary. Monthly payments are made as long as at least one
of the named persons is living. The monthly payment amounts are
available on request.
Income Plan 4. Annuity
An amount can be used to buy any single premium annuity we offer on
the plan's effective date.
Payments when Named Person Dies
When the person named to receive the income payments dies, we will
pay any amounts still due as provided by the plan agreement. The
amounts still due are determined as follows:
(1) For plans 1, 2 or any remaining guaranteed payments will be
continued. Under plans 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 3% for plan 1 and 3.5% for
plan 2. We will, however, base the discount interest rate on
the interest rate used to calculate the payments for plans 1 and
2, if such payments were not based on the table in the policy.
(2) For plan 3, no amounts are payable after both named persons have
died.
(3) For plan 4, the annuity agreement will state the amount due, if
any.
General Provisions
Entire Policy
The policy, including any attached optional benefit riders,
endorsements, amendments, the application of the policyholder, and
the enrollment forms for the insureds, constitutes the entire policy
between the policyholder and us. All statements made by the
policyholder, any certificate owner or any insured will be deemed
representations and not warranties. No such statement will be used
in any contest unless it is contained in the application signed by
the policyholder or in a written instrument signed by you or an
insured, a copy of which has been furnished to you, the beneficiary
or to the policyholder.
Non-participating
This certificate does not participate in our divisible surplus.
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Incontestability
We rely on the statements an insured or a certificate owner makes in
the enrollment form. We can contest the validity of the coverage
under the policy as described in this certificate if any material
misstatements are made in the initial enrollment form. We can also
contest any amount of death benefit which would not be payable except
for the fact that an additional premium payment was made if any
material misstatements are made in any document required with such
premium payment. We cannot contest such coverage unless such
statement is contained in a written instrument signed by an insured
or certificate owner.
We will not contest the validity of the coverage under the policy as
described in this certificate after it has been in effect during the
lifetime of both insureds for two years from the issue date. Nor
will we contest any amount of death benefit attributable to any
additional premium payment after it has been in effect during the
lifetime of both insureds for two years from the date we receive and
accept such premium payment.
Suicide
If the last surviving insured commits suicide, while sane or insane,
within two years from the issue date, the death benefit will be
limited to the amount of the premium payments made, less any
outstanding debt.
If the last surviving insured commits suicide, while sane or insane,
within two years of any date we receive and accept an additional
premium payment, any amount of death benefit which would not be
payable except for the fact that the additional premium payment was
made will be limited to the amount of such premium payment, less any
outstanding debt.
Errors in Ages or Sexes
If an insured's age or sex has been misstated on the enrollment form,
the death benefit shall be that which would be purchased by the
mortality cost determined for the current processing period based on
the correct age and sex. In addition, the benefit provided by any
optional benefit rider shall be the amount purchased by the rider
deduction for the current processing period based on the correct age
and sex.
Value Reports
We will send you reports not less often than annually. The report
will show the death benefit, cash surrender value and any debt as of
such date. The report will also show the allocation of the
investment value on such date and any changes since the last report.
The report will also include any other information required by the
insurance supervisory official of the jurisdiction in which the
policy is issued.
Payments We May Defer
We may not be able to determine the value of the assets of the
separate account divisions because 1) the NYSE is closed for trading;
2) the SEC determines that a state of emergency exists; or 3) an
order or pronouncement of the SEC permits a delay for the protection
of certificate owners.
During such times as to amounts allocated to the divisions of the
separate account(s), we may delay: 1) determination and payment of
the cash surrender value and loan requests; 2) determination and
payment of any death benefit proceeds in excess of the face amount if
death occurs prior to the end of a guarantee period; after the
guarantee period we may delay determination and payment of the entire
death benefit; and 3) allocation changes of the investment value.
We may at any time defer payments of the cash surrender value or loan
requests for up to six months after we receive a written request for
such amounts allocated to the Guaranteed Division. We will pay
interest on cash surrender value payment requests from the
Guaranteedt Division deferred 30 days or more.
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Claims of Creditors
Proceeds described in the certificate will be free from creditors
claims to the extent allowed by law.
Changes in Charges
Changes in expense charges, insurance charges or surrender charges
will be by class and based upon changes in future expectations for
such elements as: mortality, persistency, expenses and taxes. Any
change in charges will be within required procedures and standards on
file, if required, with the insurance supervisory official of the
jurisdiction in which the policy is issued.
Computations
Computations of reserves, cash surrender values, tabular value and
maximum mortality costs are based on the mortality table and interest
rate shown in the Certificate Schedule. In calculating the maximum
mortality costs, we use the attained ages, sexes and underwriting
classes of both insureds and their individual mortality cost to
determine annual mortality costs for the joint and last survivor
status. When making our computations, we assume that death claims
are paid immediately.
We have filed a detailed statement of our computations with the
insurance supervisory official of the state or jurisdiction where the
policy is issued. All values equal or exceed those required by the
law of that state or jurisdiction. Any benefit provided by an
attached optional benefit rider will not increase these values unless
stated in that rider.
Establishing Survivorship
If we are unable to determine which of the insureds was the last
survivor on the basis of the proof of death provided to us, we will
consider the insured member, as named in the enrollment form, to be
the surviving insured.
Facility of Payment
If no beneficiary is named, we reserve the right to pay an amount not
to exceed $2,000 to any person we determine to be entitled to such
amount by reason of incurred expenses incident to the last illness or
death of the surviving insured.
Assignment
The benefits can be assigned. This does not change the ownership and
all rights are subject to the terms of the assignment. To make or
release an assignment, we must receive written notice, satisfactory
to us, at our Customer Service Center. We are not responsible for
the validity of any assignment, nor will the assignment affect any
payments made or action taken by us before we receive such written
notice.
Maturity Date
On the maturity date shown in the Certificate Schedule, the cash
surrender value will be paid if either insured is then living while
this certificate is in effect under the policy. The cash surrender
value may be paid in cash or under one or more income plans. See
Choosing an Income Plan.
Sending Notice to Us
Any written notices or requests should be sent to our Customer
Service Center.
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Group Flexible Premium Joint and Last Survivor Variable Life
Insurance Certificate
Variable insurance payable upon death of the last surviving insured.
Death benefit subject to guaranteed minimum during the guarantee
period. Guaranteed minimum is face amount shown in the Certificate
Schedule. Additional premium payments accepted during lifetime of
insureds as shown in the Certificate Schedule. Non-participating.
Investment results reflected in certificate benefits.
Exhibit (5)(d)
Charge
Deduction
Division
Rider
Golden American is a stock company domiciled in Minneapolis,
Minnesota
In this rider, we, our and us refers to Golden American Life
Insurance Company. This rider is a part of the policy and any
certificate to which it is attached. Its benefits are subject to all
of the terms of this rider and the policy.
We will deduct all charges against the investment value of a
certificate (including the Excess Allocation Charge and any charges
imposed by any other riders to the policy), from the Charge Deduction
Division if the certificate owner has elected this option. If the
charges are greater than the amount in the Charge Deduction Division,
we will deduct these charges proportionately from all of the
divisions in which the certificate owner is invested.
The certificate owner may at any time while the certificate under the
policy is in force cancel this option. To do this a written request
must be sent to our Customer Service Center. Any change will take
effect within seven days of the date we receive the request. If the
certificate owner cancels this option, all charges will be deducted
against the investment value of that certificate proportionately from
all of the divisions in which that certificate owner is invested.
The Charge Deduction Division for the policy is the Liquid Asset
Market Division.
President Secretary
Customer Service Center
P.O. Box 5179 - FDR Station
NY 10150 - 5179
Exhibit (5)(e)
Charge
Deduction
Division
Rider
Golden American is a stock company domiciled in Minneapolis,
Minnesota
In this rider, we, our and us refers to Golden American Life
Insurance Company. This rider is a part of the policy and any
certificate to which it is attached. Its benefits are subject to all
of the terms of this rider and the policy.
We will deduct all charges against the investment value of a
certificate (including the Excess Allocation Charge and any charges
imposed by any other riders to the policy), from the Charge Deduction
Division if the certificate owner has elected this option. If the
charges are greater than the amount in the Charge Deduction Division,
we will deduct these charges proportionately from all of the
divisions in which the certificate owner is invested.
The certificate owner may at any time while the certificate under the
policy is in force cancel this option. To do this a written request
must be sent to our Customer Service Center. Any change will take
effect within seven days of the date we receive the request. If the
certificate owner cancels this option, all charges will be deducted
against the investment value of that certificate proportionately from
all of the divisions in which that certificate owner is invested.
The Charge Deduction Division for the policy is the Liquid Asset
Market Division.
President Secretary
Customer Service Center
P.O. Box 5179 - FDR Station
NY 10150 - 5179
Exhibit (5)(f)
Partial
Withdrawal
Rider
Golden American is a stock company domiciled in Minneapolis,
Minnesota
In this rider, we, our and us refers to Golden American Life
Insurance Company. This rider is a part of the policy and any
certificate to which it is attached. Its benefits are subject to all
of the terms of this rider and the policy. This rider gives the
certificate owner the right to make partial withdrawals of the cash
surrender value of the certificate after the first certificate year.
The amount of a partial withdrawal may be applied under one or more
income plans, subject to the requirements of the policy as described
in the certificate. See Choosing an Income Plan. The partial
withdrawal charge, the minimum partial withdrawal and the maximum
withdrawal percentage are shown in the Partial Withdrawal Rider
Schedule attached with this rider.
Requirements for Each Partial Withdrawal
Each partial withdrawal is subject to the following requirements:
(1) A partial withdrawal is not permitted during the first year of
each certificate. After the first certificate anniversary a partial
withdrawal may be made by the certificate owner once during each
certificate year.
(2) The amount requested must be at least equal to the minimum
partial withdrawal amount.
(3) The maximum amount that may be withdrawn is determined by
multiplying the cash surrender value of the certificate by the
maximum withdrawal percentage.
(4) The maximum amount that be may withdrawn is further limited by
the minimum face amount and guarantee period requirements of the
policy as described in the certificate. See Effect of a Partial
Withdrawal on Guaranteed Benefits, below.
(5) Any partial withdrawal made will have no impact on the
calculation or deduction of any deferred charges against the
investment value of the certificate.
(6) There will be a charge for each partial withdrawal made.
(7) A partial withdrawal may not be repaid.
Requesting a Partial Withdrawal
A request for a partial withdrawal must be in a written form
satisfactory to us. The effective date of a partial withdrawal will
be the date we receive a written request at our Customer Service
Center.
Effect of a Partial Withdrawal on the Investment Value and Death
Benefit
As of the effective date of a partial withdrawal:
(1) The investment value of the certificate will be reduced by the
sum of the partial withdrawal and the partial withdrawal charge.
(2) The reduction in the investment value will be allocated among
the investment divisions in accordance with the certificate owner's
instructions. If we do not receive any such instructions, allocation
will be among the investment divisions in proportion to the amount of
investment value in each division as of the effective date of the
partial withdrawal.
(3) Any amounts paid in accordance with the suicide provision of
this policy will be reduced by the amount of any partial withdrawals
and partial withdrawal charges.
(4) The variable insurance amount will reflect the partial
withdrawal.
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As of the processing date on or next following the effective date of
a partial withdrawal the guaranteed benefits may decrease. See
Effect of a Partial Withdrawal on Guaranteed Benefits.
If the death benefit becomes payable before the processing date on or
next following the effective date of a partial withdrawal, we will
deduct the amount of the partial withdrawal plus the partial
withdrawal charge from the death benefit proceeds payable, if the
death benefit is determined to be the face amount.
Effect of a Partial Withdrawal on Guaranteed Benefits
A partial withdrawal may effect the guaranteed benefits under the
certificate. The change, if any, in the face amount, guarantee
period and tabular value as of the processing date on or next
following the effective date of a partial withdrawal will be
calculated as follows:
(1) We determine the tabular value as of the effective date of the
partial withdrawal immediately before the partial withdrawal.
(2) We multiply (1) by 110%.
(3) We determine the sum of the cash surrender value plus any debt
as of the effective date of the partial withdrawal immediately
before the partial withdrawal.
(4) We subtract the amount of the partial withdrawal from (3).
(5) We subtract (4) from (2).
(6) If the amount in (5) is zero or negative, the face amount and
guaranteed period will not be reduced.
(7) If the amount in (5) is positive, we add interest, at the rate
used in our computations shown in the certificate Schedule, to
the sum of the partial withdrawal plus the partial withdrawal
charge, for the period from the effective date of the partial
withdrawal to the processing date on or next following such
date.
(8) The amount in (7) will first be applied as a net single premium
for the guarantee period to reduce the face amount of the
certificate. In no event will we allow the face amount to be
reduced below the minimum for which we would then issue the
certificate under our rules.
(9) Any excess from (8) will next be applied to reduce the guarantee
period. In no event will we allow a partial withdrawal that
will reduce the guarantee period, as measured from the
processing date on or next following the effective date of the
partial withdrawal, below the minimum for which we would then
issue the certificate under our rules.
(10) The tabular value will be reduced by the amount in (5), if
positive. If this amount is negative or zero, the tabular value
will not be reduced as a result of the partial withdrawal.
Notice
We will send the certificate owner a notice of how the certificate
benefits are affected by a partial withdrawal.
President Secretary
MBL Variable, Inc.
Customer Service Center
P.O. Box 5179 - FDR Station
NY 10150 - 5179
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Partial Withdrawal Rider Schedule
Policyholder: [Golden Investors Trust]
Group Policy Number: [123-1234]
Certificate Owner: [John Q Publicity]
Certificate Number: [12345]
Minimum Partial Withdrawal: [$1,000]
Maximum Withdrawal Percentage: [15%]
Partial Withdrawal Charge: [The lesser of $25 and 2% of the amount
withdrawn]
Exhibit (5)(g)
Partial
Withdrawal
Rider
Golden American is a stock company domiciled in Minneapolis,
Minnesota
In this rider, we, our and us refers to Golden American Life
Insurance Company. This rider is a part of the policy and any
certificate to which it is attached. Its benefits are subject to all
of the terms of this rider and the policy. This rider gives the
certificate owner the right to make partial withdrawals of the cash
surrender value of the certificate after the first certificate year.
The amount of a partial withdrawal may be applied under one or more
income plans, subject to the requirements of the policy as described
in the certificate. See Choosing an Income Plan. The partial
withdrawal charge, the minimum partial withdrawal and the maximum
withdrawal percentage are shown in the Partial Withdrawal Rider
Schedule attached with this rider.
Requirements for Each Partial Withdrawal
Each partial withdrawal is subject to the following requirements:
(1) A partial withdrawal is not permitted during the first year of
each certificate. After the first certificate anniversary a partial
withdrawal may be made by the certificate owner once during each
certificate year.
(2) The amount requested must be at least equal to the minimum
partial withdrawal amount.
(3) The maximum amount that may be withdrawn is determined by
multiplying the cash surrender value of the certificate by the
maximum withdrawal percentage.
(4) The maximum amount that be may withdrawn is further limited by
the minimum face amount and guarantee period requirements of the
policy as described in the certificate. See Effect of a Partial
Withdrawal on Guaranteed Benefits, below.
(5) Any partial withdrawal made will have no impact on the
calculation or deduction of any deferred charges against the
investment value of the certificate.
(6) There will be a charge for each partial withdrawal made.
(7) A partial withdrawal may not be repaid.
Requesting a Partial Withdrawal
A request for a partial withdrawal must be in a written form
satisfactory to us. The effective date of a partial withdrawal will
be the date we receive a written request at our Customer Service
Center.
Effect of a Partial Withdrawal on the Investment Value and Death
Benefit
As of the effective date of a partial withdrawal:
(1) The investment value of the certificate will be reduced by the
sum of the partial withdrawal and the partial withdrawal charge.
(2) The reduction in the investment value will be allocated among
the investment divisions in accordance with the certificate owner's
instructions. If we do not receive any such instructions, allocation
will be among the investment divisions in proportion to the amount of
investment value in each division as of the effective date of the
partial withdrawal.
(3) Any amounts paid in accordance with the suicide provision of
this policy will be reduced by the amount of any partial withdrawals
and partial withdrawal charges.
(4) The variable insurance amount will reflect the partial
withdrawal.
<PAGE>
<PAGE>
As of the processing date on or next following the effective date of
a partial withdrawal the guaranteed benefits may decrease. See
Effect of a Partial Withdrawal on Guaranteed Benefits.
If the death benefit becomes payable before the processing date on or
next following the effective date of a partial withdrawal, we will
deduct the amount of the partial withdrawal plus the partial
withdrawal charge from the death benefit proceeds payable, if the
death benefit is determined to be the face amount.
Effect of a Partial Withdrawal on Guaranteed Benefits
A partial withdrawal may effect the guaranteed benefits under the
certificate. The change, if any, in the face amount, guarantee
period and tabular value as of the processing date on or next
following the effective date of a partial withdrawal will be
calculated as follows:
(1) We determine the tabular value as of the effective date of the
partial withdrawal immediately before the partial withdrawal.
(2) We multiply (1) by 110%.
(3) We determine the sum of the cash surrender value plus any debt
as of the effective date of the partial withdrawal immediately
before the partial withdrawal.
(4) We subtract the amount of the partial withdrawal from (3).
(5) We subtract (4) from (2).
(6) If the amount in (5) is zero or negative, the face amount and
guaranteed period will not be reduced.
(7) If the amount in (5) is positive, we add interest, at the rate
used in our computations shown in the certificate Schedule, to
the sum of the partial withdrawal plus the partial withdrawal
charge, for the period from the effective date of the partial
withdrawal to the processing date on or next following such
date.
(8) The amount in (7) will first be applied as a net single premium
for the guarantee period to reduce the face amount of the
certificate. In no event will we allow the face amount to be
reduced below the minimum for which we would then issue the
certificate under our rules.
(9) Any excess from (8) will next be applied to reduce the guarantee
period. In no event will we allow a partial withdrawal that
will reduce the guarantee period, as measured from the
processing date on or next following the effective date of the
partial withdrawal, below the minimum for which we would then
issue the certificate under our rules.
(10) The tabular value will be reduced by the amount in (5), if
positive. If this amount is negative or zero, the tabular value
will not be reduced as a result of the partial withdrawal.
Notice
We will send the certificate owner a notice of how the certificate
benefits are affected by a partial withdrawal.
President Secretary
MBL Variable, Inc.
Customer Service Center
P.O. Box 5179 - FDR Station
NY 10150 - 5179
<PAGE>
<PAGE>
Partial Withdrawal Rider Schedule
Policyholder: [Golden Investors Trust]
Group Policy Number: [123-1234]
Certificate Owner: [John Q Publicity]
Certificate Number: [12345]
Minimum Partial Withdrawal: [$1,000]
Maximum Withdrawal Percentage: [15%]
Partial Withdrawal Charge: [The lesser of $25 and 2% of the amount
withdrawn]
Exhibit (5)(h)
Incontestability
and
Suicide
Amendment
Golden American is a stock company domiciled in Minneapolis,
Minnesota
In this amendment, we, our and us refers to Golden American Life
Insurance Company. This amendment is a part of the policy and any
certificate to which it is attached. Its benefits are subject to all
of the terms of this amendment and the policy.
The Incontestability and Suicide provisions of the Joint and Last
Survivor Policy are amended as follows:
Incontestability
The following is added to the Incontestability provision:
After the second anniversary of the certificate date we will send the
certificate owner by certified mail, a request for notification of
the death of either insured. Failure of the certificate owner to
reply to such request and provide proof of death of either insured,
if applicable, may result in a contest of the validity of coverage
under this policy as described in the certificate.
Suicide
The Suicide provision is replaced by the following:
If either insured commits suicide, while sane or insane, within two
years from the certificate's date of issue, we will issue coverage to
the last surviving insured on a single life basis as of the issue
date. If there is no surviving insured, the death benefit will be
limited to the amount of the premium payments made.
If the last surviving insured commits suicide, while sane or insane,
within two years of any date we receive and accept an additional
payment, any amount of death benefit which would not be payable
except for the fact that the additional payment was made will be
limited to the amount of the additional payment.
The death benefit we will pay will be reduced by any certificate
debt, by any partial withdrawals taken and any partial withdrawal
charges.
President Secretary
- --------------------------------------------
Customer Service Center
P.O. Box 5179 - FDR Station
New York, New York 10150 - 5179
1-800-447-3644
1-212-688-7070 (In New York)
Exhibit (5)(i)
Incontestability
and
Suicide
Amendment
Golden American is a stock company domiciled in Minneapolis,
Minnesota
In this amendment, we, our and us refers to Golden American Life
Insurance Company. This amendment is a part of the policy and any
certificate to which it is attached. Its benefits are subject to all
of the terms of this amendment and the policy.
The Incontestability and Suicide provisions of the Joint and Last
Survivor Policy are amended as follows:
Incontestability
The following is added to the Incontestability provision:
After the second anniversary of the certificate date we will send the
certificate owner by certified mail, a request for notification of
the death of either insured. Failure of the certificate owner to
reply to such request and provide proof of death of either insured,
if applicable, may result in a contest of the validity of coverage
under this policy as described in the certificate.
Suicide
The Suicide provision is replaced by the following:
If either insured commits suicide, while sane or insane, within two
years from the certificate's date of issue, we will issue coverage to
the last surviving insured on a single life basis as of the issue
date. If there is no surviving insured, the death benefit will be
limited to the amount of the premium payments made.
If the last surviving insured commits suicide, while sane or insane,
within two years of any date we receive and accept an additional
payment, any amount of death benefit which would not be payable
except for the fact that the additional payment was made will be
limited to the amount of the additional payment.
The death benefit we will pay will be reduced by any certificate
debt, by any partial withdrawals taken and any partial withdrawal
charges.
President Secretary
- --------------------------------------------
Customer Service Center
P.O. Box 5179 - FDR Station
New York, New York 10150 - 5179
1-800-447-3644
1-212-688-7070 (In New York)
<PAGE>
MBL Variable, Inc.
Customer Service Center
for The Golden American Life Insurance Company
P.O.Box 5179 - FDR Station
New York, New York 10150-5179
Mortality Cost
Calculation
Amendment
Golden American is a stock company domiciled in Minneapolis,
Minnesota
This amendment is part of the group policy and any certificates to
which it is attached. Its benefits are subject to all of the terms
of this amendment and the policy.
In the Group Flexible Premium Variable Life Insurance Policy and its
certificates under Charges Deducted from Investment Value in Each
Processing Period, Mortality Costs, the first two paragraphs are
replaced with the following:
Charges Deducted from Investment Value in Each Processing Period
MORTALITY COST
The mortality cost is determined on each processing date as follows:
(1) Determine the death benefit as of the beginning of the
processing period, and adjust it with interest at the rate shown in
the Certificate Schedule to the middle of the processing period since
death claims are paid immediately.
(2) Subtract from (1) the cash surrender value plus any debt as of
the beginning of the processing period, adjusted with interest to the
end of the processing period since mortality costs are deducted at
the end of such period.
(3) Determine the current cost of insurance rate based on the
insured's sex, age and underwriting class.
(4) Multiply (2) by (3).
During the guarantee period, in no event will (4) be greater than the
amount determined by substituting the tabular value for the cash
surrender value plus any debt in (2) above and the guaranteed maximum
cost of insurance rate for the current cost of insurance rate in (3).
EXHIBIT (5)(k)
GOLDEN FLEXIBLE PREMIUM
AMERICAN VARIABLE LIFE
LIFE INSURANCE INSURANCE POLICY
COMPANY
A SUBSIDIARY OF [LOGO] BANKERS TRUST COMPANY
GOLDEN AMERICAN IS A STOCK COMPANY DOMICILED IN WILMINGTON, DELAWARE
- --------------------------------------------------------------------------------
Policy Number Separate Account(s)
[I000015-OH] [SEPARATE ACCOUNT A]
- --------------------------------------------------------------------------------
Owner Insured
[JOHN Q. PUBLIC] [JOHN Q. PUBLIC]
- --------------------------------------------------------------------------------
Initial Premium Face Amount
[$50,000.00] [$92,851.00]
- --------------------------------------------------------------------------------
This policy is a legal contract between its owner and us. PLEASE READ IT
CAREFULLY. In this policy, YOU or YOUR refers to the owner shown above.
WE, OUR or US refers to the Golden American Life Insurance Company. You
may allocate this policy's investment value among the separate account
divisions shown on page 3C and the general account division(s) shown on
page 3D.
CASH VALUE BENEFITS
THE CASH SURRENDER VALUE MAY INCREASE OR DECREASE ON ANY DAY, DEPENDING ON
THE INVESTMENT RESULTS OF THIS POLICY. NO MINIMUM AMOUNT IS GUARANTEED,
EXCEPT FOR ANY AMOUNTS ALLOCATED TO THE DIVISION(S) IN THE GENERAL ACCOUNT.
SEE YOUR POLICY BENEFITS FOR INFORMATION ON CASH SURRENDER VALUES.
DEATH BENEFIT PROVIDED BY THIS POLICY
THE DEATH BENEFIT MAY INCREASE OR DECREASE ON ANY DAY, DEPENDING ON THIS
POLICY'S INVESTMENT RESULTS AND WILL NEVER BE LESS THAN THIS POLICY'S FACE
AMOUNT. THE PERIOD FOR WHICH THE DEATH BENEFIT IS IN EFFECT MAY CHANGE
WITH THE INVESTMENT RESULTS BUT WILL NEVER BE LESS THAN THIS POLICY'S
GUARANTEE PERIOD. FOR DETAILS ON DEATH BENEFIT PROCEEDS AND THE GUARANTEE
PERIOD SEE INSURANCE BENEFITS AND INSURANCE COVERAGE PERIOD.
Due proof of death must be submitted to us upon the death of the insured.
All death proceeds due under the policy will be paid according to the
beneficiary designation and the provisions of the policy. Payment of such
proceeds by us will completely discharge our liability with respect to the
amounts so paid.
RIGHT TO EXAMINE THIS POLICY
This policy may be returned at any time during the free look period. This
period ends 10 days after the date you receive the policy. The policy
should be mailed or delivered to the Customer Service Center shown below or
to any of our agents. The returned policy will be treated as if we never
issued it. We will promptly return any premium payments.
Customer Service Center
1001 Jefferson Street, Suite 400 Secretary: /s/ Bernard R. Breckerlegge
Wilmington, DE 19801
President: /s/ Terry L. Kendall
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Variable life insurance payable upon death of insured. Death benefit
subject to guaranteed minimum during guarantee period. Guaranteed minimum
is face amount. Option to increase or decrease face amount. Change of
death benefit option. Flexible premium payments. Partial withdrawals.
Non-participating. Investment results reflected in policy benefits.
<PAGE>
POLICY CONTENTS 2
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SPECIFICATION PAGES
PREMIUM PAYMENT AND INVESTMENT INSURANCE BENEFITS........................................16
INFORMATION....................................3A VARIABLE INSURANCE AMOUNT
INFORMATION ON DEATH BENEFIT CHANGES..............3B SCHEDULED CHANGES IN FACE AMOUNT
THE SEPARATE ACCOUNTS.............................3C UNSCHEDULED CHANGES IN FACE AMOUNT
THE GENERAL ACCOUNT...............................3D DEATH BENEFIT PROCEEDS
POLICY FACTS......................................3E CHANGING THE DEATH BENEFIT OPTION
EXPENSE CHARGES...................................3F
INSURANCE CHARGES.................................3G INSURANCE COVERAGE PERIOD.................................18
NET SINGLE PREMIUM FACTORS........................3H HOW WE DETERMINE THE GUARANTEE
INCOME PLAN FACTORS...............................3I PERIOD AND FACE AMOUNT
TERMINATION OF THE POLICY AFTER
INTRODUCTION TO THIS POLICY..........................4 THE GUARANTEE PERIOD
THIS POLICY IS A CONTRACT HOW TO REINSTATE THIS POLICY
KEY DATES AND AGES REFERRED TO IN
THIS POLICY CHOOSING AN INCOME PLAN...................................20
RIGHT TO NAME A CONTINGENT OWNER THE INCOME PLANS
BENEFICIARY PAYMENT WHEN NAMED PERSON DIES
CHANGE OF OWNER OR BENEFICIARY
GENERAL PROVISIONS........................................21
PREMIUM PAYMENTS AND ALLOCATION NON-PARTICIPATING
CHANGES....................6 INCONTESTABILITY
INITIAL PREMIUM PAYMENT SUICIDE
ADDITIONAL PREMIUM PAYMENTS ERRORS IN AGE OR SEX
ADDITIONAL PREMIUM ALLOCATIONS VALUE REPORTS
REALLOCATION OF INVESTMENT VALUE CHANGING THIS POLICY
ACCOUNT DIVISION NOT AVAILABLE POLICY CHANGES - APPLICABLE TAX LAW
PAYMENTS WE MAY DEFER
HOW WE MEASURE THE INVESTMENT VALUE..................8 CLAIMS OF CREDITORS
THE SEPARATE ACCOUNTS CHANGES IN CHARGES
THE GENERAL ACCOUNT CHANGES IN CHARGES FOR PREMIUM TAXES
VALUATION PERIOD CHANGES IN PREMIUM CHARGE - CORPORATE TAX
INVESTMENT VALUE EXPERIENCE CREDIT
INVESTMENT VALUE IN EACH DIVISION COMPUTATIONS
CHARGE DEDUCTION DIVISION OPTION ASSIGNMENT
CHARGES DEDUCTED FROM INVESTMENT VALUE AUTHORITY TO MAKE AGREEMENTS
TABULAR VALUE MATURITY DATE
MEASUREMENT OF INVESTMENT EXPERIENCE SENDING NOTICE TO US
YOUR POLICY BENEFITS.................................13
CASH SURRENDER VALUE
LOANS
PARTIAL WITHDRAWALS
RIGHT TO EXCHANGE FOR FIXED BENEFIT
LIFE INSURANCE
</TABLE>
A copy of the application(s) and any additional benefit riders and endorsements
are at the back of this policy.
SPECIFICATION PAGES
The specification pages (pages 3A to 3I) follow this page. They give specific
facts about this policy and its coverage. Please refer to them while reading
this policy.
<PAGE>
PREMIUM PAYMENT AND INVESTMENT INFORMATION (continued) 3A2
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Policy Number Separate Account(s)
[I000015-OH] [SEPARATE ACCOUNT A]
- ------------------------------------------------------------------------------------------------------------------
Insured Owner
[JOHN Q. PUBLIC] [JOHN Q. Public]
- ------------------------------------------------------------------------------------------------------------------
Insured's Issue Age Insured's Sex Insured's Residence State Underwriting Class
[35] [MALE] [DELAWARE] [NON-MEDICAL/NON-SMOKER]
- ------------------------------------------------------------------------------------------------------------------
Initial Premium Policy Date Issue Date Investment Date
[$50,000.00] [MAY 1, 1991] [MAY 1, 1991] [MAY 1, 1991]
- ------------------------------------------------------------------------------------------------------------------
Death Benefit Option Face Amount Planned Premium Premium Payment Period
[OPTION II] [$92,851.00] [NOT APPLICABLE] TO AGE 95
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
ADDITIONAL PREMIUM PAYMENTS
Minimum Unplanned Premium Payment [$5,000]
Minimum Planned Premium Payment [Not Applicable]
PLANNED PREMIUMS
PAYMENT DATES
[Not Applicable]
RESTRICTIONS
[Not Applicable]
ALLOCATIONS
The maximum number of divisions in which you may be invested at any one
time is ten. You are allowed unlimited allocation changes per policy year
without charge. We reserve the right to impose a charge for any allocation
change in excess of twelve per policy year. The excess allocation charge
is shown on page 3F. No allocation changes are allowed during the free
look period.
ALLOCATION CHANGES BY TELEPHONE
You may request allocation changes by telephone during our telephone
request business hours. You may call the Customer Service Center at 1-800-
366-0066 to make allocation changes by using the personal identification
number you will receive. You may also mail a request for an allocation
change to the Customer Service Center at the address shown on the cover
page.
<PAGE>
INFORMATION ON DEATH BENEFIT CHANGES 3B
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Scheduled Face Amount Changes: [Not Applicable]
Effective Dates of Scheduled Face
Amount Increases: [Not Applicable]
Minimum Unscheduled Increase or Decrease
In Face Amount: $10,000
Death Benefit Option II Adjustment: [The larger of (i) the guaranteed death benefit and (ii) the
Investment Value plus Debt.
GUARANTEED DEATH BENEFIT
On the Coverage Date the guaranteed death benefit is equal
to the premiums paid. On subsequent Valuation Dates
during the Guarantee Period, the guaranteed death benefit
is equal to (i) the benefit on the prior Valuation Date; (ii)
plus interest at the Guaranteed Death Benefit Interest Rate
for the current Valuation Period; (iii) plus any additional
premiums paid during the current Valuation Period; (iv) less
any partial withdrawals made during the current Valuation
Period. In no event will the guaranteed death benefit be
greater than two times the sum of the premiums paid less
any partial withdrawals taken. After the Guarantee Period
the guaranteed death benefit is zero.
GUARANTEED DEATH BENEFIT INTEREST RATE
The Guaranteed Death Benefit Interest Rate is equal to 7%;
however, (i) for the Liquid Asset Division, it is equal to the
net rate of return during the current Valuation Period, if
less than an annualized rate of 7%; (ii) for the Fixed Interest
Division, it is equal to the rate of interest credit to such
amounts during the current Valuation Period, if less than an
annualized rate of 7%; and (iii) for amounts transferred to
the General Account as collateral for policy loans, it is equal
to the rate of interest credit to such amounts during the
current Valuation Period, if less than an annualized rate of
7%.]
</TABLE>
<PAGE>
THE GENERAL ACCOUNT 3D
- --------------------------------------------------------------------------------
The General Account offers a fixed interest division, known as the Fixed
Interest Division, for allocation of premiums and investment value.
FIXED INTEREST DIVISION
The Fixed Interest Division provides a minimum of 4% annual interest rate. At
our sole discretion, we may periodically declare a higher interest rate, the
Guaranteed Interest Rate, for at least a one-year period from the date of
allocation to the Fixed Interest Division. This rate will expire the Expiry
Date on the last day of the calendar month one year after the allocation to the
Fixed Interest Division was made. Any such declaration will be by class and
will be based on our future expectations.
Each allocation of premium or reallocation of Investment Value to the Fixed
Interest Division is considered a separate allocation.
LIMITATIONS ON ALLOCATIONS
We reserve the right to restrict allocations into the general account. Such
limits may be dollar restrictions on allocations into the Fixed Interest
Division or we may restrict reallocations into the Fixed Interest Division.
DEDUCTIONS FOR CHARGES
Unless you have elected the Charge Deduction Division or unless otherwise
specified in this policy, charges will be deducted from the divisions and the
Fixed Interest Division in proportion to the Investment Value in each division
and the Fixed Interest Division. With respect to any Investment Value
attributable to the Fixed Interest Division, charges will be deducted from each
allocation on a pro-rata basis.
We currently do not deduct the Mortality and Expense Charge and the Asset-Based
Administrative Charge with respect to that amount of Investment Value allocated
to the Fixed Interest Division while such Investment Value remains allocated to
the Fixed Interest Division.
REALLOCATIONS FROM THE FIXED INTEREST DIVISION
Reallocations from an allocation of the Fixed Interest Division are currently
permitted once each year. The maximum amount you may reallocate out of an
allocation of the Fixed Interest Division each year is the greater of 33 percent
of the amount of such allocation or $2,000. The minimum amount of a
reallocation out of an allocation is the lesser of $250.00 or the entire amount
remaining in an allocation on the transfer date. If we received your
reallocation requests within the thirty days prior to an Expiry Date, the
transfer will be made on the Expiry Date. If we receive your reallocation
requests on or within thirty days following the Expiry Date, the reallocation
will be made at the end of the Valuation Period in which a satisfactory
reallocation request is received by us.
Unless otherwise specified, we will reallocate amounts from the Fixed Interest
Division starting with those allocations closest to their Expiry Date first.
We reserve the right to reduce the amount otherwise available for transfer from
the Fixed Interest Division by any amounts previously withdrawn from the Fixed
Interest Division.
POLICY LOANS
Policy loans and repayments will be allocated pro-rata to the divisions of the
Separate and the Fixed Interest Division. If a policy loan or a portion of a
policy loan is allocated to the Fixed Interest Division, Investment Value equal
to the allocated portion will be transferred to the general account as
collateral for that portion of the policy loan. While in the general account as
collateral for a policy loan such amounts will earn interest at the rates
declared for amounts in the general account securing policy loans. If a loan
repayment is allocated to the Fixed Interest Division, the amount allocated to
the Fixed Interest Division will be treated as a new allocation to the Fixed
Interest Division and will be credited with the interest rate in effect on that
date for allocations to the Fixed Interest Division.
RIGHT TO EXCHANGE
If the right to exchange this policy for fixed benefit life insurance is being
exercised, all of the Investment Value under this policy will be allocated to
the Fixed Interest Division.
<PAGE>
EXPENSE CHARGES 3Fl-A
- --------------------------------------------------------------------------------
DEDUCTION FROM PREMIUMS
None
DEDUCTIONS FROM THE INVESTMENT VALUE
PREMIUM TAXES
We deduct a premium charge of 2.4% of each premium. This premium tax
charge is designed to approximate the average premium tax that we expect to
pay to state and local governments. Currently this premium tax is deferred
and will be deducted in equal installments at the end of each anniversary
of the policy date over a six-year period following the receipt and
acceptance of each premium payment. We deduct any unrecovered deferred
premium tax charge when determining the cash surrender value payable if a
policy is surrendered. We also immediately recover a portion of deferred
premium tax charge for excess partial withdrawals. Collection of a portion
of the deferred premium tax charge due to an excess partial withdrawal may
shorten the period of recovery or the last installment may be reduced.
PREMIUM CHARGE - CORPORATE TAX
Currently this charge is zero. However, we reserve the right to deduct a
charge against any future premium payments to conform with changes in the
amount payable by us under applicable Federal income tax law as of the
dates(s) of such premium payments.
INITIAL ADMINISTRATIVE CHARGE
We charge $200.00 for initial administrative expenses. This charge is
incurred on the issue date and deducted pro-rata from each division on the
first anniversary of the policy date. We deduct any incurred initial
administrative charge from the amount we pay you if the policy is
surrendered before the first anniversary of the policy date.
DEFERRED FACE AMOUNT CHARGE
We charge $1.31 per $1,000 of initial face amount and will assess a charge
for any increases in face amount. The charge for any increase in face
amount will vary based on the attained age and sex of the insured and will
never exceed $12 per $1,000 of face amount. The charge is incurred on the
issue date or date of any increases in face amount and deducted pro-rata
from each division in equal installments on each anniversary of the policy
date over a six year period following receipt and acceptance of any
premium.
A portion of this charge will reimburse us for the cost of underwriting and
issuing a policy not covered by the initial administrative charge above.
The remainder of this charge will be considered to be an additional sales
load. This charge together with the deferred premium charge will not
exceed the maximum sales load allowable.
We deduct any unrecovered deferred face amount charge from the amount we
pay you if the policy is surrendered.
RECOVERY OF DEFERRED CHARGE FOR PREMIUM TAXES
None
<PAGE>
EXPENSE CHARGES 3Fl-B
- --------------------------------------------------------------------------------
DEDUCTION FROM PREMIUMS
None
DEDUCTIONS FROM THE INVESTMENT VALUE
PREMIUM TAXES
[We deduct 2.700% of premium incurred when each premium is received for
premium or other state and local taxes applicable to a policy. We reserve
the right to change the percentage for future premium payments to conform
with changes in the amount payable by us under applicable law as of the
date(s) of such premium payments or if the insured changes state of
residence. This charge is deducted pro-rata from each division on the
first quarterly processing date following receipt and acceptance of each
premium payment. We deduct any charges for premium taxes incurred but not
yet deducted from the amount we pay you if the policy is surrendered.]
PREMIUM CHARGE - CORPORATE TAX
Currently this charge is zero. However, we reserve the right to deduct a
charge against any future premium payments to conform with changes in the
amount payable by us under applicable Federal income tax law as of the
dates(s) of such premium payments.
INITIAL ADMINISTRATIVE CHARGE
We charge $200.00 for initial administrative expenses. This charge is
incurred on the issue date and deducted pro-rata from each division on the
first anniversary of the policy date. We deduct any incurred initial
administrative charge from the amount we pay you if the policy is
surrendered before the first anniversary of the policy date.
DEFERRED FACE AMOUNT CHARGE
We charge $1.31 per $1,000 of initial face amount and will assess a charge
for any increases in face amount. The charge for any increase in face
amount will vary based on the attained age and sex of the insured and will
never exceed $12 per $1,000 of face amount. The charge is incurred on the
issue date or date of any increases in face amount and deducted pro-rata
from each division in equal installments on each anniversary of the policy
date over a six year period following receipt and acceptance of any
premium.
A portion of this charge will reimburse us for the cost of underwriting and
issuing a policy not covered by the initial administrative charge above.
The remainder of this charge will be considered to be an additional sales
load. This charge together with the deferred premium charge will not
exceed the maximum sales load allowable.
We deduct any unrecovered deferred face amount charge from the amount we
pay you if the policy is surrendered.
RECOVERY OF DEFERRED CHARGE FOR PREMIUM TAXES
None
<PAGE>
EXPENSE CHARGES 3F1-C
- --------------------------------------------------------------------------------
DEDUCTION FROM PREMIUMS
None
DEDUCTIONS FROM THE INVESTMENT VALUE
PREMIUM TAXES
[None.]
PREMIUM CHARGE - CORPORATE TAX
Currently this charge is zero. However, we reserve the right to deduct a
charge against any future premium payments to conform with changes in the
amount payable by us under applicable Federal income tax law as of the
dates(s) of such premium payments.
INITIAL ADMINISTRATIVE CHARGE
We charge $200.00 for initial administrative expenses. This charge is
incurred on the issue date and deducted pro-rata from each division on the
first anniversary of the policy date. We deduct any incurred initial
administrative charge from the amount we pay you if the policy is
surrendered before the first anniversary of the policy date.
DEFERRED FACE AMOUNT CHARGE
We charge $1.31 per $1,000 of initial face amount and will assess a charge
for any increases in face amount. The charge for any increase in face
amount will vary based on the attained age and sex of the insured and will
never exceed $12 per $1,000 of face amount. The charge is incurred on the
issue date or date of any increases in face amount and deducted pro-rata
from each division in equal installments on each anniversary of the policy
date over a six year period following receipt and acceptance of any
premium.
A portion of this charge will reimburse us for the cost of underwriting and
issuing a policy not covered by the initial administrative charge above.
The remainder of this charge will be considered to be an additional sales
load. This charge together with the deferred premium charge will not
exceed the maximum sales load allowable.
We deduct any unrecovered deferred face amount charge from the amount we
pay you if the policy is surrendered.
RECOVERY OF DEFERRED CHARGE FOR PREMIUM TAXES
None
<PAGE>
EXPENSE CHARGES (continued) 3F2
- --------------------------------------------------------------------------------
PERIODIC ADMINISTRATIVE CHARGE
We charge $40.00 per policy year to cover a portion of our ongoing
administrative expenses. This charge will never exceed $80 per policy
year. The charge is incurred at the beginning of the policy year and
deducted pro-rata from the investment value in all divisions at the end of
each policy year on each anniversary of the policy date. At the time of
deduction, this charge will be waived if: (1) the Investment Value is at
least $100,000; or (2) the sum of premiums paid to date is at least
$100,000.
We deduct any periodic administrative charge incurred but not yet deducted
from the amount we pay you if the policy is surrendered.
RECOVERY OF DEFERRED PREMIUM CHARGE
We charge 6.0% of each premium for sales expenses. This charge is deducted
in equal installments at the end of each policy year on each anniversary of
the policy date over a six year period following receipt and acceptance of
each premium payment. We deduct any unrecovered deferred premium charge
when determining the cash surrender value payable if the policy is
surrendered. We also immediately recover a portion of the deferred premium
charge for excess partial withdrawals. Collection of a portion of the
deferred premium charge due to an excess partial withdrawal may shorten the
period of recovery or the last installment amount may be reduced.
The Deferred Premium Charge will not be applied to any initial loan shown
on Page 3A1.
LOAN INTEREST CHARGE
We deduct any loan interest on each anniversary of the policy date, accrued
daily. The current loan interest rate is 5% (equivalent to a daily rate of
0.01370%).
SURRENDER CHARGE
None
ADDITIONAL SURRENDER CHARGE
None
EXCESS ALLOCATION CHARGE
If you make more than twelve allocation changes during a policy year, we
reserve the right to impose a $25 excess allocation charge when each
additional allocation change is processed. The charge will be deducted in
proportion to the amount being transferred from each division.
PARTIAL WITHDRAWAL CHARGE
If you take more than four partial withdrawals during a policy year, we
impose a charge for each additional partial withdrawal. The charge is the
lesser of $25 and 2% of the amount withdrawn.
DEDUCTIONS FROM THE SEPARATE ACCOUNT DIVISIONS
MORTALITY AND EXPENSE RISK CHARGE
We charge 0.90% of the assets in each division on an annual basis
(equivalent to a daily charge of 0.002477%).
ASSET BASED ADMINISTRATIVE CHARGE
We charge 0.10% of the assets in each division on an annual basis
(equivalent to a daily charge of 0.000276%).
<PAGE>
EXHIBIT (5)(l)
GOLDEN FLEXIBLE PREMIUM
AMERICAN JOINT AND LAST
LIFE INSURANCE SURVIVOR VARIABLE
COMPANY LIFE INSURANCE POLICY
A SUBSIDIARY OF [LOGO] BANKERS TRUST COMPANY
GOLDEN AMERICAN IS A STOCK COMPANY DOMICILED IN WILMINGTON, DELAWARE
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Policy Number Separate Account(s)
[I000013-OI] [SEPARATE ACCOUNT A]
- ------------------------------------------------------------------------------
Owner
Insured [JOHN Q. PUBLIC] [JOHN Q. PUBLIC]
Joint Insured [JANE S. PUBLIC]
- ------------------------------------------------------------------------------
Initial Premium Face Amount
[$25,000.00] [$153,664.00]
- ------------------------------------------------------------------------------
This policy is a legal contract between its owner and us. PLEASE READ IT
CAREFULLY. In this policy, YOU or YOUR refers to the owner shown above.
WE, OUR or US refers to the Golden American Life Insurance Company. You
may allocate this policy's investment value among the separate account
divisions shown on page 3C and the general account division(s) shown on
page 3D.
CASH VALUE BENEFITS
THE CASH SURRENDER VALUE MAY INCREASE OR DECREASE ON ANY DAY, DEPENDING ON
THE INVESTMENT RESULTS OF THIS POLICY. NO MINIMUM AMOUNT IS GUARANTEED,
EXCEPT FOR ANY AMOUNTS ALLOCATED TO THE DIVISION(S) IN THE GENERAL ACCOUNT.
SEE YOUR POLICY BENEFITS FOR INFORMATION ON CASH SURRENDER VALUES.
DEATH BENEFIT PROVIDED BY THIS POLICY
THE DEATH BENEFIT MAY INCREASE OR DECREASE ON ANY DAY, DEPENDING ON THIS
POLICY'S INVESTMENT RESULTS AND WILL NEVER BE LESS THAN THIS POLICY'S FACE
AMOUNT. THE PERIOD FOR WHICH THE DEATH BENEFIT IS IN EFFECT MAY CHANGE
WITH THE INVESTMENT RESULTS BUT WILL NEVER BE LESS THAN THIS POLICY'S
GUARANTEE PERIOD. FOR DETAILS ON DEATH BENEFIT PROCEEDS AND THE GUARANTEE
PERIOD SEE INSURANCE BENEFITS AND INSURANCE COVERAGE PERIOD.
Due proof of death must be submitted to us upon the death of each of the
insureds. All death proceeds due under the policy will be paid according
to the beneficiary designation and the provisions of the policy.
Payment of such proceeds by us will completely discharge our liability with
respect to the amounts so paid.
RIGHT TO EXAMINE THIS POLICY
This policy may be returned at any time during the free look period. This
period ends 10 days after the date you receive the policy. The policy
should be mailed or delivered to the Customer Service Center shown below or
to any of our agents. The returned policy will be treated as if we never
issued it. We will promptly return any premium payments.
Customer Service Center Secretary: /s/ Bernard R. Breckerlegge
1001 Jefferson Street, Suite 400
Wilmington, DE 19801 President: /s/ Terry L. Kendall
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE POLICY
- --------------------------------------------------------------------------------
Variable life insurance payable upon death of the last surviving insured.
Death benefit subject to guaranteed minimum during guarantee period.
Guaranteed minimum is face amount. Option to increase or decrease face
amount. Change of death benefit option. Flexible premium payments.
Partial withdrawals. Nonparticipating. Investment results reflected
in policy benefits.
<PAGE>
POLICY CONTENTS 2
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SPECIFICATION PAGES
PREMIUM PAYMENT AND INVESTMENT INSURANCE BENEFITS..............................................16
INFORMATION........................................3A VARIABLE INSURANCE AMOUNT
INFORMATION ON DEATH BENEFIT CHANGES..................3B SCHEDULED CHANGES IN FACE AMOUNT
THE SEPARATE ACCOUNTS.................................3C UNSCHEDULED CHANGES IN FACE AMOUNT
THE GENERAL ACCOUNT...................................3D DEATH BENEFIT PROCEEDS
POLICY FACTS..........................................3E CHANGING THE DEATH BENEFIT OPTION
EXPENSE CHARGES.......................................3F
INSURANCE CHARGES.....................................3G INSURANCE COVERAGE PERIOD.......................................18
NET SINGLE PREMIUM FACTORS............................3H HOW WE DETERMINE THE GUARANTEE
INCOME PLAN FACTORS...................................3I PERIOD AND FACE AMOUNT
TERMINATION OF THE POLICY AFTER
INTRODUCTION TO THIS POLICY..............................4 THE GUARANTEE PERIOD
THIS POLICY IS A CONTRACT HOW TO REINSTATE THIS POLICY
KEY DATES AND AGES REFERRED
TO IN THIS POLICY CHOOSING AN INCOME PLAN.........................................20
RIGHT TO NAME A CONTINGENT OWNER THE INCOME PLANS
BENEFICIARY PAYMENT WHEN NAMED PERSON DIES
CHANGE OF OWNER OR BENEFICIARY
GENERAL PROVISIONS..............................................21
PREMIUM PAYMENTS AND ALLOCATION NON-PARTICIPATING
CHANGES......................6 INCONTESTABILITY
INITIAL PREMIUM PAYMENT SUICIDE
ADDITIONAL PREMIUM PAYMENTS ERRORS IN AGE OR SEX
ADDITIONAL PREMIUM ALLOCATIONS VALUE REPORTS
REALLOCATION OF INVESTMENT VALUE CHANGING THIS POLICY
ACCOUNT DIVISION NOT AVAILABLE POLICY CHANGES - APPLICABLE TAX LAW
PAYMENTS WE MAY DEFER
HOW WE MEASURE THE INVESTMENT VALUE......................8 CLAIMS OF CREDITORS
THE SEPARATE ACCOUNTS CHANGES IN CHARGES
THE GENERAL ACCOUNT CHANGES IN CHARGES FOR PREMIUM TAXES
VALUATION PERIOD CHANGES IN PREMIUM CHARGE - CORPORATE TAX
INVESTMENT VALUE EXPERIENCE CREDIT
INVESTMENT VALUE IN EACH DIVISION COMPUTATIONS
CHARGE DEDUCTION DIVISION OPTION ESTABLISHING SURVIVORSHIP
CHARGES DEDUCTED FROM INVESTMENT VALUE ASSIGNMENT
TABULAR VALUE AUTHORITY TO MAKE AGREEMENTS
MEASUREMENT OF INVESTMENT EXPERIENCE MATURITY DATE
SENDING NOTICE TO US
YOUR POLICY BENEFITS.....................................13
CASH SURRENDER VALUE
LOANS
PARTIAL WITHDRAWALS
RIGHT TO EXCHANGE FOR FIXED BENEFIT
LIFE INSURANCE
</TABLE>
A copy of the application(s) and any additional benefit riders and endorsements
are at the back of this policy.
SPECIFICATION PAGES
The specification pages (pages 3A to 3I) follow this page. They give specific
facts about this policy and its coverage. Please refer to them while reading
this policy.
<PAGE>
PREMIUM PAYMENT AND INVESTMENT INFORMATION (continued) 3A2
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Policy Number Separate Account(s)
[I000013-0I] [SEPARATE ACCOUNT A]
- -------------------------------------------------------------------------------------------------------------
Owner
Insured [JOHN Q. PUBLIC] [JOHN Q. PUBLIC]
Joint Insured [JANE S. PUBLIC]
- -------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C> <C>
Issue Age Sex Residence State Underwriting Class
Insured [35] [MALE] [DELAWARE] [NON-MEDICAL/NON-SMOKER]
Joint Insured [35] [FEMALE] [DELAWARE] [NON-MEDICAL/NON-SMOKER]
- -------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C>
Initial Premium Policy Date Issue Date Investment Date
[$25,000.00] [MAY 1, 1991] [MAY 1, 1991] [MAY 1, 1991]
- -------------------------------------------------------------------------------------------------------------
Death Benefit Option Face Amount Planned Premium Premium Payment Period
[OPTION II] [$153,664.00] [NOT APPLICABLE] TO AGE 95
- -------------------------------------------------------------------------------------------------------------
</TABLE>
ADDITIONAL PREMIUM PAYMENTS
Minimum Unplanned Premium Payment [$5,000]
Minimum Planned Premium Payment [Not Applicable]
PLANNED PREMIUMS
PAYMENT DATES
[Not Applicable]
RESTRICTIONS
[Not Applicable]
ALLOCATIONS
The maximum number of divisions in which you may be invested at any one
time is ten. You are allowed unlimited allocation changes per policy year
without charge. We reserve the right to impose a charge for any allocation
change in excess of twelve per policy year. The excess allocation charge
is shown on page 3F. No allocation changes are allowed during the free
look period.
ALLOCATION CHANGES BY TELEPHONE
You may request allocation changes by telephone during our telephone
request business hours. You may call the Customer Service Center at 1-800-
366-0066 to make allocation changes by using the personal identification
number you will receive. You may also mail a request for an allocation
change to the Customer Service Center at the address shown on the cover
page.
<PAGE>
INFORMATION ON DEATH BENEFIT CHANGES 3B
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Scheduled Face Amount Changes: [Not Applicable]
Effective Dates of Scheduled Face
Amount Increases: [Not Applicable]
Minimum Unscheduled Increase or Decrease
In Face Amount: $10,000
Death Benefit Option II Adjustment: [The larger of (i) the guaranteed death benefit and (ii) the
Investment Value plus Debt.
GUARANTEED DEATH BENEFIT
On the Coverage Date the guaranteed death benefit is equal
to the premiums paid. On subsequent Valuation Dates
during the Guarantee Period, the guaranteed death benefit
is equal to (i) the benefit on the prior Valuation Date; (ii)
plus interest at the Guaranteed Death Benefit Interest Rate
for the current Valuation Period; (iii) plus any additional
premiums paid during the current Valuation Period; (iv) less
any partial withdrawals made during the current Valuation
Period. In no event will the guaranteed death benefit be
greater than two times the sum of the premiums paid less
any partial withdrawals taken. After the Guarantee Period
the guaranteed death benefit is zero.
GUARANTEED DEATH BENEFIT INTEREST RATE
The Guaranteed Death Benefit Interest Rate is equal to 7%;
however, (i) for the Liquid Asset Division, it is equal to the
net rate of return during the current Valuation Period, if
less than an annualized rate of 7%; (ii) for the Fixed Interest
Division, it is equal to the rate of interest credit to such
amounts during the current Valuation Period, if less than an
annualized rate of 7%; and (iii) for amounts transferred to
the General Account as collateral for policy loans, it is equal
to the rate of interest credit to such amounts during the
current Valuation Period, if less than an annualized rate of
7%.]
</TABLE>
<PAGE>
THE GENERAL ACCOUNT 3D
- --------------------------------------------------------------------------------
The General Account offers a fixed interest division, known as the Fixed
Interest Division, for allocation of premiums and investment value.
FIXED INTEREST DIVISION
The Fixed Interest Division provides a minimum of 4% annual interest rate. At
our sole discretion, we may periodically declare a higher interest rate, the
Guaranteed Interest Rate, for at least a one-year period from the date of
allocation to the Fixed Interest Division. This rate will expire the Expiry
Date on the last day of the calendar month one year after the allocation to the
Fixed Interest Division was made. Any such declaration will be by class and
will be based on our future expectations.
Each allocation of premium or reallocation of Investment Value to the Fixed
Interest Division is considered a separate allocation.
LIMITATIONS ON ALLOCATIONS
We reserve the right to restrict allocations into the general account. Such
limits may be dollar restrictions on allocations into the Fixed Interest
Division or we may restrict reallocations into the Fixed Interest Division.
DEDUCTIONS FOR CHARGES
Unless you have elected the Charge Deduction Division or unless otherwise
specified in this policy, charges will be deducted from the divisions and the
Fixed Interest Division in proportion to the Investment Value in each division
and the Fixed Interest Division. With respect to any Investment Value
attributable to the Fixed Interest Division, charges will be deducted from each
allocation on a pro-rata basis.
We currently do not deduct the Mortality and Expense Charge and the Asset-Based
Administrative Charge with respect to that amount of Investment Value allocated
to the Fixed Interest Division while such Investment Value remains allocated to
the Fixed Interest Division.
REALLOCATIONS FROM THE FIXED INTEREST DIVISION
Reallocations from an allocation of the Fixed Interest Division are currently
permitted once each year. The maximum amount you may reallocate out of an
allocation of the Fixed Interest Division each year is the greater of 33 percent
of the amount of such allocation or $2,000. The minimum amount of a
reallocation out of an allocation is the lesser of $250.00 or the entire amount
remaining in an allocation on the transfer date. If we received your
reallocation requests within the thirty days prior to an Expiry Date, the
transfer will be made on the Expiry Date. If we receive your reallocation
requests on or within thirty days following the Expiry Date, the reallocation
will be made at the end of the Valuation Period in which a satisfactory
reallocation request is received by us.
Unless otherwise specified, we will reallocate amounts from the Fixed Interest
Division starting with those allocations closest to their Expiry Date first.
We reserve the right to reduce the amount otherwise available for transfer from
the Fixed Interest Division by any amounts previously withdrawn from the Fixed
Interest Division.
POLICY LOANS
Policy loans and repayments will be allocated pro-rata to the divisions of the
Separate and the Fixed Interest Division. If a policy loan or a portion of a
policy loan is allocated to the Fixed Interest Division, Investment Value equal
to the allocated portion will be transferred to the general account as
collateral for that portion of the policy loan. While in the general account as
collateral for a policy loan such amounts will earn interest at the rates
declared for amounts in the general account securing policy loans. If a loan
repayment is allocated to the Fixed Interest Division, the amount allocated to
the Fixed Interest Division will be treated as a new allocation to the Fixed
Interest Division and will be credited with the interest rate in effect on that
date for allocations to the Fixed Interest Division.
RIGHT TO EXCHANGE
If the right to exchange this policy for fixed benefit life insurance is being
exercised, all of the Investment Value under this policy will be allocated to
the Fixed Interest Division.
<PAGE>
EXPENSE CHARGES 3F1-A
- --------------------------------------------------------------------------------
DEDUCTION FROM PREMIUMS
None
DEDUCTIONS FROM THE INVESTMENT VALUE
PREMIUM TAXES
We deduct a premium charge of 2.4% of each premium. This premium tax
charge is designed to approximate the average premium tax that we expect to
pay to state and local governments. Currently this premium tax is deferred
and will be deducted in equal installments at the end of each anniversary
of the policy date over a six-year period following the receipt and
acceptance of each premium payment. We deduct any unrecovered deferred
premium tax charge when determining the cash surrender value payable if a
policy is surrendered. We also immediately recover a portion of deferred
premium tax charge for excess partial withdrawals. Collection of a portion
of the deferred premium tax charge due to an excess partial withdrawal may
shorten the period of recovery or the last installment may be reduced.
PREMIUM CHARGE - CORPORATE TAX
Currently this charge is zero. However, we reserve the right to deduct a
charge against any future premium payments to conform with changes in the
amount payable by us under applicable Federal income tax law as of the
dates(s) of such premium payments.
INITIAL ADMINISTRATIVE CHARGE
We charge $300.00 for initial administrative expenses. This charge is
incurred on the issue date and deducted pro-rata from each division on the
first anniversary of the policy date. We deduct any incurred initial
administrative charge from the amount we pay you if the policy is
surrendered before the first anniversary of the policy date.
DEFERRED FACE AMOUNT CHARGE
We charge $0.49 per $1,000 of initial face amount and will assess a charge
for any increases in face amount. The charge for any increase in face
amount will vary based on the attained age and sex of the younger insured
and will never exceed $12 per $1,000 of face amount. The charge is
incurred on the issue date or date of any increases in face amount and
deducted pro-rata from each division in equal installments on each
anniversary of the policy date over a six year period following receipt and
acceptance of any premium.
A portion of this charge will reimburse us for the cost of underwriting and
issuing a policy not covered by the initial administrative charge above.
The remainder of this charge will be considered to be an additional sales
load. This charge together with the deferred premium charge will not
exceed the maximum sales load allowable.
We deduct any unrecovered deferred face amount charge from the amount we
pay you if the policy is surrendered.
RECOVERY OF DEFERRED CHARGE FOR PREMIUM TAXES
None
<PAGE>
EXPENSE CHARGES 3F1-B
- --------------------------------------------------------------------------------
DEDUCTION FROM PREMIUMS
None
DEDUCTIONS FROM THE INVESTMENT VALUE
PREMIUM TAXES
[None.]
PREMIUM CHARGE - CORPORATE TAX
Currently this charge is zero. However, we reserve the right to deduct a
charge against any future premium payments to conform with changes in the
amount payable by us under applicable Federal income tax law as of the
dates(s) of such premium payments.
INITIAL ADMINISTRATIVE CHARGE
We charge $300.00 for initial administrative expenses. This charge is
incurred on the issue date and deducted pro-rata from each division on the
first anniversary of the policy date. We deduct any incurred initial
administrative charge from the amount we pay you if the policy is
surrendered before the first anniversary of the policy date.
DEFERRED FACE AMOUNT CHARGE
We charge $0.49 per $1,000 of initial face amount and will assess a charge
for any increases in face amount. The charge for any increase in face
amount will vary based on the attained age and sex of the younger insured
and will never exceed $12 per $1,000 of face amount. The charge is
incurred on the issue date or date of any increases in face amount and
deducted pro-rata from each division in equal installments on each
anniversary of the policy date over a six year period following receipt and
acceptance of any premium.
A portion of this charge will reimburse us for the cost of underwriting and
issuing a policy not covered by the initial administrative charge above.
The remainder of this charge will be considered to be an additional sales
load. This charge together with the deferred premium charge will not
exceed the maximum sales load allowable.
We deduct any unrecovered deferred face amount charge from the amount we
pay you if the policy is surrendered.
RECOVERY OF DEFERRED CHARGE FOR PREMIUM TAXES
None
<PAGE>
EXPENSE CHARGES 3F1-C
- --------------------------------------------------------------------------------
DEDUCTION FROM PREMIUMS
None
DEDUCTIONS FROM THE INVESTMENT VALUE
PREMIUM TAXES
[We deduct 2.000% of premium incurred when each premium is received for
premium or other state and local taxes applicable to a policy. We reserve
the right to change the percentage for future premium payments to conform
with changes in the amount payable by us under applicable law as of the
date(s) of such premium payments or if the insured changes state of
residence. This charge is deducted pro-rata from each division on the
first quarterly processing date following receipt and acceptance of each
premium payment. We deduct any charges for premium taxes incurred but not
yet deducted from the amount we pay you if the policy is surrendered.]
PREMIUM CHARGE - CORPORATE TAX
Currently this charge is zero. However, we reserve the right to deduct a
charge against any future premium payments to conform with changes in the
amount payable by us under applicable Federal income tax law as of the
dates(s) of such premium payments.
INITIAL ADMINISTRATIVE CHARGE
We charge $300.00 for initial administrative expenses. This charge is
incurred on the issue date and deducted pro-rata from each division on the
first anniversary of the policy date. We deduct any incurred initial
administrative charge from the amount we pay you if the policy is
surrendered before the first anniversary of the policy date.
DEFERRED FACE AMOUNT CHARGE
We charge $0.49 per $1,000 of initial face amount and will assess a charge
for any increases in face amount. The charge for any increase in face
amount will vary based on the attained age and sex of the younger insured
and will never exceed $12 per $1,000 of face amount. The charge is
incurred on the issue date or date of any increases in face amount and
deducted pro-rata from each division in equal installments on each
anniversary of the policy date over a six year period following receipt and
acceptance of any premium.
A portion of this charge will reimburse us for the cost of underwriting and
issuing a policy not covered by the initial administrative charge above.
The remainder of this charge will be considered to be an additional sales
load. This charge together with the deferred premium charge will not
exceed the maximum sales load allowable.
We deduct any unrecovered deferred face amount charge from the amount we
pay you if the policy is surrendered.
RECOVERY OF DEFERRED CHARGE FOR PREMIUM TAXES
None
<PAGE>
EXPENSE CHARGES 3F2
- --------------------------------------------------------------------------------
PERIODIC ADMINISTRATIVE CHARGE
We charge $40.00 per policy year to cover a portion of our ongoing
administrative expenses. This charge will never exceed $80 per policy
year. The charge is incurred at the beginning of the policy year and
deducted pro-rata from the investment value in all divisions at the end of
each policy year on each anniversary of the policy date. At the time of
deduction, this charge will be waived if: (1) the Investment Value is at
least $100,000; or (2) the sum of premiums paid to date is at least
$100,000.
We deduct any periodic administrative charge incurred but not yet deducted
from the amount we pay you if the policy is surrendered.
RECOVERY OF DEFERRED PREMIUM CHARGE
We charge 6.0% of each premium for sales expenses. This charge is deducted
in equal installments at the end of each policy year on each anniversary of
the policy date over a six year period following receipt and acceptance of
each premium payment. We deduct any unrecovered deferred premium charge
when determining the cash surrender value payable if the policy is
surrendered. We also immediately recover a portion of the deferred premium
charge for excess partial withdrawals. Collection of a portion of the
deferred premium charge due to an excess partial withdrawal may shorten the
period of recovery or the last installment amount may be reduced.
The Deferred Premium Charge will not be applied to any initial loan shown
on Page 3A1.
LOAN INTEREST CHARGE
We deduct any loan interest on each anniversary of the policy date, accrued
daily. The current loan interest rate is 5% (equivalent to a daily rate of
0.01370%).
SURRENDER CHARGE
None
ADDITIONAL SURRENDER CHARGE
None
EXCESS ALLOCATION CHARGE
If you make more than twelve allocation changes during a policy year, we
reserve the right to impose a $25 excess allocation charge when each
additional allocation change is processed. The charge will be deducted in
proportion to the amount being transferred from each division.
PARTIAL WITHDRAWAL CHARGE
If you take more than four partial withdrawals during a policy year, we
impose a charge for each additional partial withdrawal. The charge is the
lesser of $25 and 2% of the amount withdrawn.
DEDUCTIONS FROM THE SEPARATE ACCOUNT DIVISIONS
MORTALITY AND EXPENSE RISK CHARGE
We charge 0.90% of the assets in each division on an annual basis
(equivalent to a daily charge of 0.002477%).
ASSET BASED ADMINISTRATIVE CHARGE
We charge 0.10% of the assets in each division on an annual basis
(equivalent to a daily charge of 0.000276%).
<PAGE>
EXHIBIT (5)(m)
GOLDEN GROUP FLEXIBLE
AMERICAN PREMIUM VARIABLE
LIFE INSURANCE LIFE INSURANCE
COMPANY CERTIFICATE
A SUBSIDIARY OF [LOGO] BANKERS TRUST COMPANY
GOLDEN AMERICAN IS A STOCK COMPANY DOMICILED IN WILMINGTON, DELAWARE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Policyholder Group Policy Number
GOLDEN INVESTORS TRUST G000002
- ----------------------------------------------------------------------------------------------------
Insured Certificateowner
JOHN Q. PUBLIC JOHN Q. PUBLIC
- ----------------------------------------------------------------------------------------------------
Initial Premium Certificate Date Coverage Date Investment Date
$25,000.00 MAY 1, 1991 MAY 1, 1991 MAY 1, 1991
- ---------------------------------------------------------------------------------------------------
Separate Account(s) Certificate Number
SEPARATE ACCOUNT A C000004-OH
- ----------------------------------------------------------------------------------------------------
</TABLE>
In this Certificate "We," "Our" and "Us" refers to Golden American Life
Insurance Company. "You" and "Your" refers to the Certificateowner
shown above.
We certify that the person named as Insured above is insured under the group
policy number shown above. All insurance will take effect on the Coverage Date.
THE CASH SURRENDER VALUE MAY INCREASE OR DECREASE ON ANY DAY, DEPENDING ON THE
INVESTMENT RESULTS OF THIS CERTIFICATE. NO MINIMUM AMOUNT IS GUARANTEED, EXCEPT
FOR ANY AMOUNTS ALLOCATED TO THE DIVISION(S) IN THE GENERAL ACCOUNT. SEE
CERTIFICATEOWNER'S BENEFITS FOR INFORMATION ON CASH SURRENDER VALUES.
THE DEATH BENEFIT MAY INCREASE OR DECREASE ON ANY DAY, DEPENDING ON THIS
CERTIFICATE'S INVESTMENT RESULTS AND WILL NEVER BE LESS THAN THIS CERTIFICATE'S
FACE AMOUNT. THE PERIOD FOR WHICH THE DEATH BENEFIT IS IN EFFECT MAY CHANGE
WITH THE INVESTMENT RESULTS BUT WILL NEVER BE LESS THAN THIS CERTIFICATE'S
GUARANTEE PERIOD. FOR DETAILS ON DEATH BENEFIT PROCEEDS AND THE GUARANTEE
PERIOD, SEE INSURANCE BENEFITS AND INSURANCE COVERAGE PERIOD.
Due proof of death must be submitted to Us upon the death of the Insured. All
death proceeds due under the Certificate will be paid according to the
beneficiary designation and the provisions of the Certificate. Payment of such
proceeds by Us will completely discharge Our liability with respect to the
amounts so paid.
This Certificate may be returned at any time during the free look period. This
period ends 10 days after the date You receive the Certificate. The Certificate
should be mailed or delivered to the Customer Service Center shown in the
Schedule or to any of Our agents. The returned Certificate will be treated as
if We never issued it. We will promptly return any premium payments.
All provisions set forth on the following pages are a part of this Certificate
issued under the Policy.
Signed for Golden American Life Insurance Company.
President /s/ Terry L. Kendall Secretary /s/ Bernard R. Breckerlegge
- --------------------------------------------------------------------------------
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CERTIFICATE
Variable insurance payable upon death of the Insured. Death Benefit subject to
guaranteed minimum during the Guarantee Period. Guaranteed minimum is Face
Amount. Option to increase or decrease Face Amount. Change of Death Benefit
Option. Flexible premium payments. Partial Withdrawals. Non-Participating.
Investment results reflected in Certificate benefits.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
THE SCHEDULE INSURANCE BENEFITS. . . . . . . . . . . . . . . 12
Premium Payment and Investment Variable Insurance Amount
Information . . . . . . . . . . . . . . . . . . . . . A Scheduled Changes in Face Amount
Information on Death Benefit Changes. . . . . . . . . B Unscheduled Changes in Face Amount
Separate Accounts and General Account . . . . . . . . C Death Benefit Proceeds
Certificate Facts . . . . . . . . . . . . . . . . . . D Changing the Death Benefit Option
Expense Charges . . . . . . . . . . . . . . . . . . . E
Insurance Charges . . . . . . . . . . . . . . . . . . F INSURANCE COVERAGE PERIOD . . . . . . . . . . . 14
Net Single Premium Factors. . . . . . . . . . . . . . G How We Determine the Guarantee Period
Income Plans. . . . . . . . . . . . . . . . . . . . . H and Face Amount
Termination after the Guarantee Period
IMPORTANT TERMS. . . . . . . . . . . . . . . . . . . . . (i) How to Reinstate Coverage
INTRODUCTION TO THE CERTIFICATE. . . . . . . . . . . . . . 1 CHOOSING AN INCOME PLAN . . . . . . . . . . . . 16
Effective Date of Insurance The Income Plans
Termination Payment When Named Person Dies
Beneficiary
Right to Name a Contingent Certificateowner GENERAL PROVISIONS. . . . . . . . . . . . . . . 17
Change of Certificateowner or Beneficiary Entire Contract
Non-Participating
PREMIUM PAYMENTS AND Incontestability
ALLOCATION CHANGES. . . . . . . . . . . . . . . . . . . . 2 Suicide
Initial Premium Payment Errors in Age or Sex
Additional Premium Payments Value Reports
Additional Premium Allocations Changing the Certificate
Reallocation of Investment Value Policy Changes - Applicable Tax Law
Account Division Not Available Payments We May Defer
Claims of Creditors
HOW WE MEASURE THE INVESTMENT VALUE. . . . . . . . . . . . 4 Changes in Charges
Separate Accounts Changes in Premium or Other State
The General Account and Local Taxes
Valuation Period Changes in Premium Charge - Corporate Tax
Investment Value Experience Credit
Investment Value in Each Division Computations
Charge Deduction Division Option Agency
Charges Deducted from Investment Value Assignment
Tabular Value Maturity Date
Measurement of Investment Experience Sending Notice to Us
CERTIFICATEOWNER'S BENEFITS. . . . . . . . . . . . . . . . 9
Continuation of Insurance
Cash Surrender Value
Loans
Partial Withdrawals
Continuation
Exchange Right
</TABLE>
<PAGE>
THE SCHEDULE (continued)
- --------------------------------------------------------------------------------
PREMIUM PAYMENT AND INVESTMENT INFORMATION (continued)
ADDITIONAL PREMIUM PAYMENTS
Minimum Unplanned Premium Payment $5,000
Minimum Planned Premium Payment Not Applicable
PLANNED PREMIUMS
PAYMENT DATES
Not Applicable
RESTRICTIONS
Not Applicable
ALLOCATIONS
Maximum divisions at any one time ten
Allocation changes per Certificate Year without charge unlimited
CUSTOMER SERVICE CENTER
1001 Jefferson Street, Suite 400
Wilmington, DE 19801
Page A2
<PAGE>
THE SCHEDULE (continued)
- --------------------------------------------------------------------------------
INFORMATION ON DEATH BENEFIT CHANGES
<TABLE>
<CAPTION>
<S> <C>
Scheduled Face Amount Changes: Not Applicable
Effective Dates of Scheduled Face
Amount Increases: Not Applicable
Minimum Unscheduled Increase or Decrease
in Face Amount: $10,000
Death Benefit Option II Adjustment: The larger of (i) the guaranteed death benefit and
(ii) the Investment Value plus Debt.
GUARANTEED DEATH BENEFIT
On the Coverage Date the guaranteed death benefit
is equal to the Investment Value. On subsequent
valuation dates during the Guarantee Period, the
guaranteed death benefit is equal to (i) the benefit
on the prior valuation date; (ii) plus interest at 7.0%
for the current Valuation Period, except that with
respect to amounts in the Liquid Asset Division or
the Fixed Interest Division, the interest rate applied
to such amounts will be the net rate of return for
the Liquid Asset Division or the rates credited to the
Fixed Interest Division as applicable during the
current Valuation Period, if it is less than 7%; (iii)
plus any additional premiums paid during the
current Valuation Period; (iv) less any partial
withdrawals made during the current Valuation
Period. In no event will the guaranteed death
benefit be greater than two times the sum of the
premiums paid less any partial withdrawals taken.
After the guarantee period the guaranteed death
benefit is zero.
</TABLE>
Page B
<PAGE>
THE SCHEDULE (continued)
- --------------------------------------------------------------------------------
SEPARATE ACCOUNTS AND GENERAL ACCOUNT (continued)
<TABLE>
<CAPTION>
<S> <C> <C>
LIQUID LIQUID ASSET SERIES
ASSET Objective - High level of current income consistent with the
DIVISION preservation of capital and liquidity.
Investments - Obligations of the U.S. Government and its agencies and
instrumentalities; bank obligations; commercial paper and
short-term corporate debt securities.
Term - All issues maturing in less than one year.
Portfolio Manager - Bankers Trust Company
VALUE VALUE EQUITY SERIES
EQUITY Objective - Capital appreciation.
DIVISION Investments - Investment primarily in equity securities which meet
quantitative standards considered to indicate above-average
financial soundness and high intrinsic value relative to price.
Portfolio Manager - Eagle Asset Management, Inc.
</TABLE>
NOTE: PLEASE REFER TO THE PROSPECTUSES FOR THE GROUP POLICY AND THE GCG
TRUST FOR MORE DETAILS
[THE GENERAL ACCOUNT
FIXED INTEREST DIVISION
The Fixed Interest Division provides a minimum of 4% annual interest rate.
At our sole discretion, we may periodically declare higher interest rates.
Such rates will apply to periods following the date of declaration. Any
such declaration will be by class and will be based on our future
expectations.
LIMITATIONS ON ALLOCATIONS
We reserve the right to restrict allocations into the general account.
Such limits may be dollar restrictions on allocations into the general
account or we may restrict reallocations into the general account.
GUARANTEE PERIODS
Each allocation to the Fixed Interest Division will be guaranteed an
interest rate for the entire Initial Guaranteed Period elected. We
currently offer an Initial Guarantee Period of one year. The Initial
Guarantee Period starts on the day an allocation is made to the Fixed
Interest Division and ends on the last day of the calendar month following
one year, the Maturity Date.
At the end of a Guarantee Period, you may transfer the Accumulation Value
in such Guarantee Period to the Divisions or to a Guarantee Period we then
offer. If we do not receive notification by the Maturity Date, your
Accumulation Value in the maturing Guarantee Period will automatically be
transferred to a one year Guarantee Period. Upon such automatic transfer
you will have thirty days to reallocate any of your Accumulation Value to
the Divisions.
DEDUCTIONS FOR CHARGES
Unless you have elected the Charge Deduction Division, a pro-rata portion
of the administrative charge, deferred sales load, mortality cost and loan
charge, if any, will be deducted from the value of the Guaranteed Division.
We currently do not deduct the Mortality and Expense Charge and the Asset-
Based Administrative Charge with respect to that amount of Accumulation
Value allocated to the Fixed Interest Division while such Accumulation
Value remains allocated to the Fixed Interest Division.]
Page C3
<PAGE>
THE SCHEDULE (continued)
- --------------------------------------------------------------------------------
[THE GENERAL ACCOUNT (continued)
REALLOCATIONS FROM THE FIXED INTEREST DIVISION
You may reallocate your Investment Value from the Fixed Interest Division
to other divisions within 30 days of the Maturity Date of a Guarantee
Period. The maximum amount you may reallocate per year is equal to the
greater of 33% of an allocation or $2,000.00.
The minimum amount of a reallocation is $250.00.
We reserve the right to reduce the amount otherwise available for transfer
from the Fixed Interest Division by any amounts previously withdrawn from
the Fixed Interest Division.
POLICY LOANS
Policy loans and repayments will be allocated pro-rata to the divisions of
the Separate and the Fixed Interest Division. If a policy loan or a
portion of a policy loan is allocated to the Fixed Interest Division,
Investment Value equal to the allocated portion will be transferred to the
general account as collateral for that portion of the policy loan. While
in the general account as collateral for a policy loan such amounts will
earn interest at the rates declared for amounts in the general account
securing policy loans. If a loan repayment is allocated to the Fixed
Interest Division, the amount allocated to the Fixed Interest Division will
be treated as a new allocation to the Fixed Interest Division and will be
credited with the interest rate in effect on that date for allocations to
the Fixed Interest Division.
CONVENTIONAL PARTIAL WITHDRAWALS
Amounts withdrawn from a Fixed Interest Division may be subject to
surrender charge if such amounts cause the total amount withdrawn from the
Certificate in a Certificate Year to exceed 15% of the Certificate's
Accumulation Value.]
RIGHT TO EXCHANGE
If the right to exchange this Certificate for fixed benefit life insurance
is being exercised, all of the Investment Value under this Certificate will
be allocated to the Fixed Interest Division.
Page C4
<PAGE>
THE SCHEDULE (continued)
- --------------------------------------------------------------------------------
EXPENSE CHARGES
DEDUCTIONS FROM PREMIUMS
None
DEDUCTIONS FROM INVESTMENT VALUE
PREMIUM TAXES
We deduct a premium charge of 2.4% of each premium. This premium tax
charge is designed to approximate the average premium tax that we expect to
pay to state and local governments. Currently this premium tax is deferred
and will be deducted in equal installments at the end of each anniversary
of the policy date over a six-year period following the receipt and
acceptance of each premium payment. We deduct any unrecovered deferred
premium tax charge when determining the cash surrender value payable if a
policy is surrendered. We also immediately recover a portion of deferred
premium tax charge for excess partial withdrawals. Collection of a portion
of the deferred premium tax charge due to an excess partial withdrawal may
shorten the period of recovery or the last installment may be reduced.
PREMIUM CHARGE - CORPORATE TAX
Currently this charge is zero. However, We reserve the right to deduct a
charge against any future premium payments to conform with changes in the
amount payable by Us under applicable Federal income tax law as of the
dates(s) of such premium payments.
INITIAL ADMINISTRATIVE CHARGE
We charge $200.00 for initial administrative expenses. This charge is
incurred on the Coverage Date and deducted pro rata from each division on
the first anniversary of the Certificate Date. We deduct any incurred
initial administrative charge from the amount We pay You if the Certificate
is surrendered before the first anniversary of the Certificate Date.
DEFERRED FACE AMOUNT CHARGE
We charge $1.31 per $1,000 of initial Face Amount and will assess a charge
for any increases in Face Amount. The charge for any increase in Face
Amount will vary based on the Attained Age and sex of the Insured and will
never exceed $12 per $1,000 of Face Amount. The charge is incurred on the
Coverage Date or date of any increases in Face Amount and deducted pro rata
from each division in equal installments on each anniversary of the
Certificate Date over a six year period following receipt and acceptance of
any premium.
A portion of this charge will reimburse Us for the cost of underwriting and
issuing a Certificate not covered by the initial administrative charge
above. The remainder of this charge will be considered to be an additional
sales load. This charge together with the deferred premium charge will not
exceed the maximum sales load allowable.
We deduct any unrecovered deferred face amount charge from the amount We
pay You if the Certificate is surrendered.
RECOVERY OF DEFERRED CHARGE FOR PREMIUM TAXES
None
Page E1-A
<PAGE>
THE SCHEDULE (continued)
- --------------------------------------------------------------------------------
EXPENSE CHARGES
DEDUCTIONS FROM PREMIUMS
None
DEDUCTIONS FROM INVESTMENT VALUE
PREMIUM TAXES
We deduct 2.700% of premium incurred when each premium is received for
premium or other state and local taxes applicable to a Certificate. We
reserve the right to change the percentages for future premium payments to
conform with changes in the amount payable by Us under applicable law as of
the date(s) of such premium payments or if the Insured changes state of
residence. This charge is deducted pro rata from each division on the
first quarterly processing date following receipt and acceptance of each
premium payment. We deduct any charges for premium taxes incurred but not
yet deducted from the amount We pay You if the Certificate is surrendered.
PREMIUM CHARGE - CORPORATE TAX
Currently this charge is zero. However, We reserve the right to deduct a
charge against any future premium payments to conform with changes in the
amount payable by Us under applicable Federal income tax law as of the
dates(s) of such premium payments.
INITIAL ADMINISTRATIVE CHARGE
We charge $200.00 for initial administrative expenses. This charge is
incurred on the Coverage Date and deducted pro rata from each division on
the first anniversary of the Certificate Date. We deduct any incurred
initial administrative charge from the amount We pay You if the Certificate
is surrendered before the first anniversary of the Certificate Date.
DEFERRED FACE AMOUNT CHARGE
We charge $1.31 per $1,000 of initial Face Amount and will assess a charge
for any increases in Face Amount. The charge for any increase in Face
Amount will vary based on the Attained Age and sex of the Insured and will
never exceed $12 per $1,000 of Face Amount. The charge is incurred on the
Coverage Date or date of any increases in Face Amount and deducted pro rata
from each division in equal installments on each anniversary of the
Certificate Date over a six year period following receipt and acceptance of
any premium.
A portion of this charge will reimburse Us for the cost of underwriting and
issuing a Certificate not covered by the initial administrative charge
above. The remainder of this charge will be considered to be an additional
sales load. This charge together with the deferred premium charge will not
exceed the maximum sales load allowable.
We deduct any unrecovered deferred face amount charge from the amount We
pay You if the Certificate is surrendered.
RECOVERY OF DEFERRED CHARGE FOR PREMIUM TAXES
None
Page E1-B
<PAGE>
THE SCHEDULE (continued)
- --------------------------------------------------------------------------------
EXPENSE CHARGES
DEDUCTIONS FROM PREMIUMS
None
DEDUCTIONS FROM INVESTMENT VALUE
PREMIUM TAXES
None.
PREMIUM CHARGE - CORPORATE TAX
Currently this charge is zero. However, We reserve the right to deduct a
charge against any future premium payments to conform with changes in the
amount payable by Us under applicable Federal income tax law as of the
dates(s) of such premium payments.
INITIAL ADMINISTRATIVE CHARGE
We charge $200.00 for initial administrative expenses. This charge is
incurred on the Coverage Date and deducted pro rata from each division on
the first anniversary of the Certificate Date. We deduct any incurred
initial administrative charge from the amount We pay You if the Certificate
is surrendered before the first anniversary of the Certificate Date.
DEFERRED FACE AMOUNT CHARGE
We charge $1.31 per $1,000 of initial Face Amount and will assess a charge
for any increases in Face Amount. The charge for any increase in Face
Amount will vary based on the Attained Age and sex of the Insured and will
never exceed $12 per $1,000 of Face Amount. The charge is incurred on the
Coverage Date or date of any increases in Face Amount and deducted pro rata
from each division in equal installments on each anniversary of the
Certificate Date over a six year period following receipt and acceptance of
any premium.
A portion of this charge will reimburse Us for the cost of underwriting and
issuing a Certificate not covered by the initial administrative charge
above. The remainder of this charge will be considered to be an additional
sales load. This charge together with the deferred premium charge will not
exceed the maximum sales load allowable.
We deduct any unrecovered deferred face amount charge from the amount We
pay You if the Certificate is surrendered.
RECOVERY OF DEFERRED CHARGE FOR PREMIUM TAXES
None
Page E1-C
<PAGE>
THE SCHEDULE (continued)
- --------------------------------------------------------------------------------
EXPENSE CHARGES (continued)
PERIODIC ADMINISTRATIVE CHARGE
We charge $40.00 per Certificate Year to cover a portion of Our ongoing
administrative expenses. This charge will never exceed $80 per Certificate
Year. The charge is incurred at the beginning of the Certificate Year and
deducted pro rata from the Investment Value in all divisions at the end of
each Certificate Year on each anniversary of the Certificate Date. If the
initial and additional premiums paid during the first Certificate Year
equal $100,000 or more, this charge will be waived under the Certificate.
We deduct any periodic administrative charge incurred but not yet deducted
from the amount We pay You if the Certificate is surrendered.
RECOVERY OF DEFERRED PREMIUM CHARGE
We charge 6.0% of each premium for sales expenses. This charge is deducted
in equal installments at the end of each Certificate Year on each
anniversary of the Certificate Date over a six year period following
receipt and acceptance of each premium payment. We deduct any
unrecovered deferred premium charge when determining the Cash Surrender
Value payable if the Certificate is surrendered. We also immediately
recover a portion of the deferred premium charge for excess partial
withdrawals. Collection of a portion of the deferred premium charge due
to an excess partial withdrawal may shorten the period of recovery or
the last installment amount may be reduced.
The Deferred Premium Charge will not be applied to any initial loan shown
on Page A1.
SCHEDULED FACE AMOUNT INCREASE CHARGE
None
UNSCHEDULED FACE AMOUNT INCREASE CHARGE
None
LOAN INTEREST CHARGE
We deduct any loan interest on each anniversary of the Certificate Date,
accrued daily. The current loan interest rate is 5% (equivalent to a daily
rate of 0.01370%).
SURRENDER CHARGE
None
ADDITIONAL SURRENDER CHARGE
None
EXCESS ALLOCATION CHARGE
If You make more than twelve allocation changes during a Certificate Year,
We reserve the right to impose a $25 excess allocation charge when each
additional allocation change is processed. The charge will be deducted in
proportion to the amount being transferred from each division.
PARTIAL WITHDRAWAL CHARGE
If you take more than four partial withdrawals during a Certificate Year,
We impose a charge for each additional partial withdrawal. The charge is
the lesser of $25 and 2% of the amount withdrawn.
Page E2
<PAGE>
EXHIBIT (5)(n)
GROUP FLEXIBLE PREMIUM
GOLDEN JOINT AND LAST
AMERICAN SURVIVOR VARIABLE
LIFE INSURANCE LIFE INSURANCE
COMPANY CERTIFICATE
A SUBSIDIARY OF [LOGO] BANKERS TRUST COMPANY
GOLDEN AMERICAN IS A STOCK COMPANY DOMICILED IN WILMINGTON, DELAWARE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S>
- --------------------------------------------------------------------------------------------------------
Policyholder Group Policy Number
GOLDEN INVESTORS TRUST G000003
- --------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
Certificateowner
Insured JOHN Q. PUBLIC JOHN Q. PUBLIC
Joint Insured JANE S. PUBLIC
- --------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C>
Initial Premium Certificate Date Coverage Date Investment Date
$50,000.00 MAY 1, 1991 MAY 1, 1991 MAY 1, 1991
- --------------------------------------------------------------------------------------------------------
Separate Account(s) Certificate Number
SEPARATE ACCOUNT A C000003-0I
- --------------------------------------------------------------------------------------------------------
</TABLE>
In this Certificate "We," "Our" and "Us" refers to Golden American Life
Insurance Company. "You" and "Your" refers to the Certificateowner shown above.
We certify that the persons named as Insured and Joint Insured above are insured
under the group policy number shown above. All insurance will take effect on
the Coverage Date.
THE CASH SURRENDER VALUE MAY INCREASE OR DECREASE ON ANY DAY, DEPENDING ON THE
INVESTMENT RESULTS OF THIS CERTIFICATE. NO MINIMUM AMOUNT IS GUARANTEED, EXCEPT
FOR ANY AMOUNTS ALLOCATED TO THE DIVISION(S) IN THE GENERAL ACCOUNT. SEE
CERTIFICATEOWNER'S BENEFITS FOR INFORMATION ON CASH SURRENDER VALUES.
THE DEATH BENEFIT MAY INCREASE OR DECREASE ON ANY DAY, DEPENDING ON THIS
CERTIFICATE'S INVESTMENT RESULTS AND WILL NEVER BE LESS THAN THIS CERTIFICATE'S
FACE AMOUNT. THE PERIOD FOR WHICH THE DEATH BENEFIT IS IN EFFECT MAY CHANGE
WITH THE INVESTMENT RESULTS BUT WILL NEVER BE LESS THAN THIS CERTIFICATE'S
GUARANTEE PERIOD. FOR DETAILS ON DEATH BENEFIT PROCEEDS AND THE GUARANTEE
PERIOD, SEE INSURANCE BENEFITS AND INSURANCE COVERAGE PERIOD.
Due proof of death must be submitted to Us upon the death of each of the
Insureds. All death proceeds due under the Certificate will be paid according
to the beneficiary designation and the provisions of the Certificate. Payment
of such proceeds by Us will completely discharge Our liability with respect
to the amounts so paid.
This Certificate may be returned at any time during the free look period. This
period ends 10 days after the date You receive the Certificate. The Certificate
should be mailed or delivered to the Customer Service Center shown in the
Schedule or to any of Our agents. The returned Certificate will be treated as
if We never issued it. We will promptly return any premium payments.
All provisions set forth on the following pages are a part of this Certificate
issued under the Policy.
Signed for Golden American Life Insurance Company.
President /s/ Terry L. Kendall Secretary /s/ Bernard R. Breckerlegge
- --------------------------------------------------------------------------------
GROUP FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE
CERTIFICATE
Variable insurance payable upon death of the last surviving Insured. Death
Benefit subject to guaranteed minimum during the Guarantee Period. Guaranteed
minimum is Face Amount. Option to increase or decrease Face Amount. Change of
Death Benefit Option. Flexible premium payments. Partial Withdrawals. Non-
Participating. Investment results reflected in Certificate benefits.
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
THE SCHEDULE
Premium Payment and Investment
Information . . . . . . . . . . . . . . . . . . . . A INSURANCE BENEFITS . . . . . . . . . . . . . . .12
Information on Death Benefit Changes. . . . . . . . . B Variable Insurance Amount
Separate Accounts and General Account . . . . . . . . C Scheduled Changes in Face Amount
Certificate Facts . . . . . . . . . . . . . . . . . . D Unscheduled Changes in Face Amount
Expense Charges . . . . . . . . . . . . . . . . . . . E Death Benefit Proceeds
Insurance Charges . . . . . . . . . . . . . . . . . . F Changing the Death Benefit Option
Net Single Premium Factors. . . . . . . . . . . . . . G
Income Plans. . . . . . . . . . . . . . . . . . . . . H INSURANCE COVERAGE PERIOD. . . . . . . . . . . .14
How We Determine the Guarantee Period
IMPORTANT TERMS. . . . . . . . . . . . . . . . . . . . . (i) and Face Amount
Termination after the Guarantee Period
INTRODUCTION TO THE CERTIFICATE. . . . . . . . . . . . . . 1 How to Reinstate Coverage
Effective Date of Insurance
Termination CHOOSING AN INCOME PLAN. . . . . . . . . . . . .16
Beneficiary The Income Plans
Right to Name a Contingent Certificateowner Payment When Named Person Dies
Change of Certificateowner or Beneficiary
GENERAL PROVISIONS . . . . . . . . . . . . . . .17
PREMIUM PAYMENTS AND Entire Contract
ALLOCATION CHANGES . . . . . . . . . . . . . . . . . . . 2 Non-Participating
Initial Premium Payment Incontestability
Additional Premium Payments Suicide
Additional Premium Allocations Errors in Age or Sex
Reallocation of Investment Value Value Reports
Account Division Not Available Changing the Certificate
Policy Changes - Applicable Tax Law
HOW WE MEASURE THE INVESTMENT VALUE. . . . . . . . . . . . 4 Payments We May Defer
Separate Accounts Claims of Creditors
The General Account Changes in Charges
Valuation Period Changes in Premium or Other State
Investment Value and Local Taxes
Investment Value in Each Division Changes in Premium Charge - Corporate Tax
Charge Deduction Division Option Experience Credit
Charges Deducted from Investment Value Computations
Tabular Value Establishing Survivorship
Measurement of Investment Experience Agency
Assignment
CERTIFICATEOWNER'S BENEFITS. . . . . . . . . . . . . . . . 9 Maturity Date
Continuation of Insurance Sending Notice to Us
Cash Surrender Value
Loans
Partial Withdrawals
Continuation
Exchange Right
</TABLE>
<PAGE>
THE SCHEDULE (continued)
- --------------------------------------------------------------------------------
PREMIUM PAYMENT AND INVESTMENT INFORMATION (continued)
ADDITIONAL PREMIUM PAYMENTS
Minimum Unplanned Premium Payment $5,000
Minimum Planned Premium Payment Not Applicable
PLANNED PREMIUMS
PAYMENT DATES
Not Applicable
RESTRICTIONS
Not Applicable
ALLOCATIONS
Maximum divisions at any one time ten
Allocation changes per Certificate Year without charge unlimited
CUSTOMER SERVICE CENTER
1001 Jefferson Street, Suite 400
Wilmington, DE 19801
Page A2
<PAGE>
THE SCHEDULE (continued)
- --------------------------------------------------------------------------------
INFORMATION ON DEATH BENEFIT CHANGES
<TABLE>
<CAPTION>
<S> <C>
Scheduled Face Amount Changes: Not Applicable
Effective Dates of Scheduled Face
Amount Increases: Not Applicable
Minimum Unscheduled Increase or Decrease
in Face Amount: $10,000
Death Benefit Option II Adjustment: The larger of (i) the guaranteed death benefit and
(ii) the Investment Value plus Debt.
GUARANTEED DEATH BENEFIT
On the Coverage Date the guaranteed death benefit
is equal to the Investment Value. On subsequent
valuation dates during the Guarantee Period, the
guaranteed death benefit is equal to (i) the benefit
on the prior valuation date; (ii) plus interest at 7.0%
for the current Valuation Period, except that with
respect to amounts in the Liquid Asset Division or
the Fixed Interest Division, the interest rate applied
to such amounts will be the net rate of return for
the Liquid Asset Division or the rates credited to the
Fixed Interest Division as applicable during the
current Valuation Period, if it is less than 7%; (iii)
plus any additional premiums paid during the
current Valuation Period; (iv) less any partial
withdrawals made during the current Valuation
Period. In no event will the guaranteed death
benefit be greater than two times the sum of the
premiums paid less any partial withdrawals taken.
After the guarantee period the guaranteed death
benefit is zero.
</TABLE>
Page B
<PAGE>
THE SCHEDULE (continued)
- --------------------------------------------------------------------------------
SEPARATE ACCOUNTS AND GENERAL ACCOUNT (continued)
<TABLE>
<CAPTION>
<S> <C> <C>
LIQUID LIQUID ASSET SERIES
ASSET Objective - High level of current income consistent with the
DIVISION preservation of capital and liquidity.
Investments - Obligations of the U.S. Government and its agencies and
instrumentalities; bank obligations; commercial paper and
short-term corporate debt securities.
Term - All issues maturing in less than one year.
Portfolio Manager - Bankers Trust Company
VALUE VALUE EQUITY SERIES
EQUITY Objective - Capital appreciation.
DIVISION Investments - Investment primarily in equity securities which meet
quantitative standards considered to indicate above-average
financial soundness and high intrinsic value relative to price.
Portfolio Manager - Eagle Asset Management, Inc.
</TABLE>
NOTE: PLEASE REFER TO THE PROSPECTUSES FOR THE GROUP POLICY AND THE GCG
TRUST FOR MORE DETAILS
[THE GENERAL ACCOUNT
FIXED INTEREST DIVISION
The Fixed Interest Division provides a minimum of 4% annual interest rate.
At our sole discretion, we may periodically declare higher interest rates.
Such rates will apply to periods following the date of declaration. Any
such declaration will be by class and will be based on our future
expectations.
LIMITATIONS ON ALLOCATIONS
We reserve the right to restrict allocations into the general account.
Such limits may be dollar restrictions on allocations into the general
account or we may restrict reallocations into the general account.
GUARANTEE PERIODS
Each allocation to the Fixed Interest Division will be guaranteed an
interest rate for the entire Initial Guaranteed Period elected. We
currently offer an Initial Guarantee Period of one year. The Initial
Guarantee Period starts on the day an allocation is made to the Fixed
Interest Division and ends on the last day of the calendar month following
one year, the Maturity Date.
At the end of a Guarantee Period, you may transfer the Accumulation Value
in such Guarantee Period to the Divisions or to a Guarantee Period we then
offer. If we do not receive notification by the Maturity Date, your
Accumulation Value in the maturing Guarantee Period will automatically be
transferred to a one year Guarantee Period. Upon such automatic transfer
you will have thirty days to reallocate any of your Accumulation Value to
the Divisions.
DEDUCTIONS FOR CHARGES
Unless you have elected the Charge Deduction Division, a pro-rata portion
of the administrative charge, deferred sales load, mortality cost and loan
charge, if any, will be deducted from the value of the Guaranteed Division.
We currently do not deduct the Mortality and Expense Charge and the Asset-
Based Administrative Charge with respect to that amount of Accumulation
Value allocated to the Fixed Interest Division while such Accumulation
Value remains allocated to the Fixed Interest Division.]
Page C3
<PAGE>
THE SCHEDULE (continued)
- --------------------------------------------------------------------------------
[THE GENERAL ACCOUNT (continued)
REALLOCATIONS FROM THE FIXED INTEREST DIVISION
You may reallocate your Investment Value from the Fixed Interest Division
to other divisions within 30 days of the Maturity Date of a Guarantee
Period. The maximum amount you may reallocate per year is equal to the
greater of 33% of an allocation or $2,000.00.
The minimum amount of a reallocation is $250.00.
We reserve the right to reduce the amount otherwise available for transfer
from the Fixed Interest Division by any amounts previously withdrawn from
the Fixed Interest Division.
POLICY LOANS
Policy loans and repayments will be allocated pro-rata to the divisions of
the Separate and the Fixed Interest Division. If a policy loan or a
portion of a policy loan is allocated to the Fixed Interest Division,
Investment Value equal to the allocated portion will be transferred to the
general account as collateral for that portion of the policy loan. While
in the general account as collateral for a policy loan such amounts will
earn interest at the rates declared for amounts in the general account
securing policy loans. If a loan repayment is allocated to the Fixed
Interest Division, the amount allocated to the Fixed Interest Division will
be treated as a new allocation to the Fixed Interest Division and will be
credited with the interest rate in effect on that date for allocations to
the Fixed Interest Division.
CONVENTIONAL PARTIAL WITHDRAWALS
Amounts withdrawn from a Fixed Interest Division may be subject to
surrender charge if such amounts cause the total amount withdrawn from the
Certificate in a Certificate Year to exceed 15% of the Certificate's
Accumulation Value.]
RIGHT TO EXCHANGE
If the right to exchange this Certificate for fixed benefit life insurance
is being exercised, all of the Investment Value under this Certificate will
be allocated to the Fixed Interest Division.
Page C4
<PAGE>
THE SCHEDULE (continued)
- --------------------------------------------------------------------------------
EXPENSE CHARGES
DEDUCTIONS FROM PREMIUMS
None
DEDUCTIONS FROM INVESTMENT VALUE
PREMIUM TAXES
We deduct a premium charge of 2.4% of each premium. This premium tax
charge is designed to approximate the average premium tax that we expect to
pay to state and local governments. Currently this premium tax is deferred
and will be deducted in equal installments at the end of each anniversary
of the policy date over a six-year period following the receipt and
acceptance of each premium payment. We deduct any unrecovered deferred
premium tax charge when determining the cash surrender value payable if a
policy is surrendered. We also immediately recover a portion of deferred
premium tax charge for excess partial withdrawals. Collection of a portion
of the deferred premium tax charge due to an excess partial withdrawal may
shorten the period of recovery or the last installment may be reduced.
PREMIUM CHARGE - CORPORATE TAX
Currently this charge is zero. However, We reserve the right to deduct a
charge against any future premium payments to conform with changes in the
amount payable by Us under applicable Federal income tax law as of the
dates(s) of such premium payments.
INITIAL ADMINISTRATIVE CHARGE
We charge $300.00 for initial administrative expenses. This charge is
incurred on the Coverage Date and deducted pro rata from each division on
the first anniversary of the Certificate Date. We deduct any incurred
initial administrative charge from the amount We pay You if the Certificate
is surrendered before the first anniversary of the Certificate Date.
DEFERRED FACE AMOUNT CHARGE
We charge $0.49 per $1,000 of initial Face Amount and will assess a charge
for any increases in Face Amount. The charge for any increase in Face
Amount will vary based on the Attained Age and sex of the younger Insured
and will never exceed $12 per $1,000 of Face Amount. The charge is
incurred on the Coverage Date or date of any increases in Face Amount and
deducted pro rata from each division in equal installments on each
anniversary of the Certificate Date over a six year period following
receipt and acceptance of any premium.
A portion of this charge will reimburse Us for the cost of underwriting and
issuing a Certificate, not covered by the initial administrative charge
above. The remainder of this charge will be considered to be an additional
sales load. This charge together with the deferred premium charge will not
exceed the maximum sales load allowable.
We deduct any unrecovered deferred face amount charge from the amount We
pay You if the Certificate is surrendered.
RECOVERY OF DEFERRED CHARGE FOR PREMIUM TAXES
None
Page E1-A
<PAGE>
THE SCHEDULE (continued)
- --------------------------------------------------------------------------------
EXPENSE CHARGES
DEDUCTIONS FROM PREMIUMS
None
DEDUCTIONS FROM INVESTMENT VALUE
PREMIUM TAXES
We deduct 2.700% of premium incurred when each premium is received for
premium or other state and local taxes applicable to a Certificate. We
reserve the right to change the percentage for future premium payments to
conform with changes in the amount payable by Us under applicable law as of
the date(s) of such premium payments or if the Insured(s) changes state of
residence. This charge is deducted pro rata from each division on the
first quarterly processing date following receipt and acceptance of each
premium payment. We deduct any charges for premium taxes incurred but not
yet deducted from the amount We pay You if the Certificate is surrendered.
PREMIUM CHARGE - CORPORATE TAX
Currently this charge is zero. However, We reserve the right to deduct a
charge against any future premium payments to conform with changes in the
amount payable by Us under applicable Federal income tax law as of the
dates(s) of such premium payments.
INITIAL ADMINISTRATIVE CHARGE
We charge $300.00 for initial administrative expenses. This charge is
incurred on the Coverage Date and deducted pro rata from each division on
the first anniversary of the Certificate Date. We deduct any incurred
initial administrative charge from the amount We pay You if the Certificate
is surrendered before the first anniversary of the Certificate Date.
DEFERRED FACE AMOUNT CHARGE
We charge $0.49 per $1,000 of initial Face Amount and will assess a charge
for any increases in Face Amount. The charge for any increase in Face
Amount will vary based on the Attained Age and sex of the younger Insured
and will never exceed $12 per $1,000 of Face Amount. The charge is
incurred on the Coverage Date or date of any increases in Face Amount and
deducted pro rata from each division in equal installments on each
anniversary of the Certificate Date over a six year period following
receipt and acceptance of any premium.
A portion of this charge will reimburse Us for the cost of underwriting and
issuing a Certificate, not covered by the initial administrative charge
above. The remainder of this charge will be considered to be an additional
sales load. This charge together with the deferred premium charge will not
exceed the maximum sales load allowable.
We deduct any unrecovered deferred face amount charge from the amount We
pay You if the Certificate is surrendered.
RECOVERY OF DEFERRED CHARGE FOR PREMIUM TAXES
None
Page E1-B
<PAGE>
THE SCHEDULE (continued)
- --------------------------------------------------------------------------------
EXPENSE CHARGES
DEDUCTIONS FROM PREMIUMS
None
DEDUCTIONS FROM INVESTMENT VALUE
PREMIUM TAXES
None.
PREMIUM CHARGE - CORPORATE TAX
Currently this charge is zero. However, We reserve the right to deduct a
charge against any future premium payments to conform with changes in the
amount payable by Us under applicable Federal income tax law as of the
dates(s) of such premium payments.
INITIAL ADMINISTRATIVE CHARGE
We charge $300.00 for initial administrative expenses. This charge is
incurred on the Coverage Date and deducted pro rata from each division on
the first anniversary of the Certificate Date. We deduct any incurred
initial administrative charge from the amount We pay You if the Certificate
is surrendered before the first anniversary of the Certificate Date.
DEFERRED FACE AMOUNT CHARGE
We charge $0.49 per $1,000 of initial Face Amount and will assess a charge
for any increases in Face Amount. The charge for any increase in Face
Amount will vary based on the Attained Age and sex of the younger Insured
and will never exceed $12 per $1,000 of Face Amount. The charge is
incurred on the Coverage Date or date of any increases in Face Amount and
deducted pro rata from each division in equal installments on each
anniversary of the Certificate Date over a six year period following
receipt and acceptance of any premium.
A portion of this charge will reimburse Us for the cost of underwriting and
issuing a Certificate, not covered by the initial administrative charge
above. The remainder of this charge will be considered to be an additional
sales load. This charge together with the deferred premium charge will not
exceed the maximum sales load allowable.
We deduct any unrecovered deferred face amount charge from the amount We
pay You if the Certificate is surrendered.
RECOVERY OF DEFERRED CHARGE FOR PREMIUM TAXES
None
Page E1-C
<PAGE>
THE SCHEDULE (continued)
- --------------------------------------------------------------------------------
EXPENSE CHARGES (continued)
PERIODIC ADMINISTRATIVE CHARGE
We charge $40.00 per Certificate Year to cover a portion of Our ongoing
administrative expenses. This charge will never exceed $80 per Certificate
Year. The charge is incurred at the beginning of the Certificate Year and
deducted from the Investment Value in all divisions at the end of each
Certificate Year on each anniversary of the Certificate Date. If the
initial and additional premiums paid during the first Certificate Year
equal $100,000 or more, this charge will be waived under the Certificate.
We deduct any periodic administrative charge incurred but not yet deducted
from the amount We pay You if the Certificate is surrendered.
RECOVERY OF DEFERRED PREMIUM CHARGE
We charge 6.0% of each premium for sales expenses. This charge is deducted
in equal installments at the end of each year on each anniversary of the
Certificate Date over a six year period following receipt and acceptance of
each premium payment. We deduct any unrecovered deferred premium charge
when determining the Cash Surrender Value payable if the Certificate is
surrendered or immediately recover a portion of the deferred premium charge
for excess partial withdrawals. Collection of a portion of the deferred
premium charge due to an excess partial withdrawal may shorten the period
of recovery or the last installment amount may be reduced.
The Deferred Premium Charge will not be applied to any initial loan shown
on Page Al.
SCHEDULED FACE AMOUNT INCREASE CHARGE
None
UNSCHEDULED FACE AMOUNT INCREASE CHARGE
None
LOAN INTEREST CHARGE
We deduct any loan interest on each anniversary of the Certificate Date,
accrued daily. The current loan interest rate is 5% (equivalent to a daily
rate of 0.01370%).
SURRENDER CHARGE
None
ADDITIONAL SURRENDER CHARGE
None
EXCESS ALLOCATION CHARGE
If You make more than twelve allocation changes during a Certificate Year,
We reserve the right to impose a $25 excess allocation charge when each
additional allocation change is processed. The charge will be deducted in
proportion to the amount being transferred from each division.
PARTIAL WITHDRAWAL CHARGE
If you take more than four partial withdrawals during a Certificate Year,
We impose a charge for each additional partial withdrawal. The charge is
the lesser of $25 and 2% of the amount withdrawn.
Page E2
EXHIBIT 6(a)
ARTICLES OF INCORPORATION
OF
ST. PAUL LIFE INSURANCE COMPANY
WE, the undersigned incorporators, all natural persons of full
age; for the purpose of forming a corporation, under and pursuant
to the general corporation laws of the State of Minnesota,
Chapter 300, Minnesota's Statutes Annotated, do hereby adopt the
following Articles of Incorporation.
ARTICLE I.
The name of this Company is St. Paul Life Insurance Company.
ARTICLE II.
The nature of the business and the objects and purposes to be
transferred, performed and carried on by the Company are those of
an insurance company. To this end it shall have the power:
(1) To engage in the general business of life insurance
company, and to effect all forms, types, variations and
combinations of life insurance, endowment or annuity
contracts or policies on a group of individuals fixed or
variable basis, for the payment of money in a single sum or
in installations upon the contingencies of death, disability
or survivorship. To provide in such policies or contracts
supplemental thereto, for additional benefits in the event
of the death of the insured by accident, total and permanent
disability of the insured, or specific dismemberment or
disablement suffered by the insured.
(2) To engage in the general business of an accident and
health insurance company for the purpose of effecting
insurance against loss or damage by the sickness, bodily
injury or death accident of the insured or dependents on a
group of individual basis; to effect all forms, types,
variations and combinations of policies or contracts of
insurance providing for indemnities in the event of death,
sickness or disability.
(3) To effect contracts of reinsurance or co-insurance of
any individual or group risk underwritten by this company,
<PAGE>
<PAGE>
to reinsure risks of this company or any part thereof with
any other company or to reinsure the whole of any portion of
the risks of any other company.
(4) To effect any kinds of classes of insurance business
which companies of its kind are now or any hereafter be
permitted by law to transact, whether or not such kinds or
classes of insurance are specifically enumerated elsewhere
in these Articles of Incorporation r existing amendments
thereto.
(5) To conduct business in any state or territory of the
United States in the Dominion of Canada and in any foreign
country.
(6) To acquire, hold and dispose of shares of stock,
notes, bonds or other evidences of indebtedness or
securities of any other corporation or corporations.
(7) To transact all business and to do all other things
necessary or incidental to the foregoing purpose.
(8) The powers herein conferred upon the company are in
furtherance and not in limitation to the powers conferred by
the statutes of the State of Minnesota as from time to time
in force and effect, and the Corporation shall have in
addition to such authorized statutory powers as are in these
Articles of Incorporation recited; all other powers and
privileges conferred by the statutes of the State of
Minnesota now existing or hereinafter enacted.
(9) The Company hall have the power and authority to
acquire, own, and hold stock in any other insurance company;
whether previously existing or in the process of being
organized, and whether or not engaged in the type of
insurance heretofore specified.
ARTICLE III.
The principal place of transacting the business of this Company
shall be 385 Washington Street, St. Paul, Minnesota 55102.
ARTICLE IV.
The duration of this Company shall be perpetual.
<PAGE>
<PAGE>
ARTICLE V.
The government of the Company and the management of its affairs
shall be vested in a Board of Directors of not less than three
(3) nor more than eighteen (18) members, all of whom shall be
shareholders and shall be elected annually by the shareholders at
each annual meeting. The annual meeting shall be held, unless
otherwise designated by the Board of Directors, on the Friday
preceding the first Tuesday of February of each year at such time
and place within or without the State of Minnesota as the Board
shall determine. The first Board of Directors of this Company
who shall hold office until their respective successors are
elected and qualified, shall consist of:
R. B. Richardson 600 Park Avenue
Helena, Montana 59601
R. E. Young 385 Washington Street
St. Paul, Minnesota 55102
Lee Wiegard 385 Washington Street
St. Paul, Minnesota 55102
W. G. Smith 385 Washington Street
St. Paul, Minnesota 55102
ARTICLE VI.
The authorized amount of capital stock of this Company shall be
One Million, Five Hundred Thousand Dollars ($1,500,000) divided
into One Hundred Fifty Thousand (150,000) shares of common stock
of the par value of Ten Dollars ($10.00) each. Each share of
stock shall entitle the holder to one vote, and shareholders
shall not be entitled to cumulate their votes for the election of
directors. The Board of Directors of the Company shall have the
power to cause to be issued from time to time any and all of the
authorized but unissued share of the stock of the Company at such
prices and for such consideration as they in their unrestricted
discretion deem wise and advisable. Shareholders shall not have
any preemptive right to subscribe for any shares of such unissued
stock.
ARTICLE VII.
The highest amount of indebtedness or liability to which the
Company shall at any time be subject, including bank loans and
similar borrowing but exclusive of liability under insurance
polices and other obligations routinely incurred in the ordinary
course of the Company's business shall be Two Million Two Hundred
Fifty Thousand Dollars ($2,250,000)
<PAGE>
<PAGE>
ARTICLE VIII.
The name sand post office address of the incorporators forming
this company are:
R. M. Hubbs 385 Washington Street
St. Paul, Minnesota 55102
C. B. Drake, Jr. 385 Washington Street
St. Paul, Minnesota 55102
R. E. Young 385 Washington Street
St. Paul, Minnesota 55102
IN WITNESS WHEREOF, the undersigned incorporators have hereunto
set their hands this 2nd day if January, 1973.
In the presence of:
/s/ R. M. Hubbs
- ------------------------ ------------------------
R. M. Hubbs, Incorporator
- ------------------------
/s/ C. B. Drake, Jr.
- ------------------------ ------------------------
C. B. Drake, Jr., Incorporator
- ------------------------
/s/ R. E. Young
- ------------------------ ------------------------
R. E. Young, Incorporator
- ------------------------
<PAGE>
<PAGE>
INDIVIDUAL ACKNOWLEDGMENT
STATE OF _________________________)
) SS
COUNTRY OF _______________________)
On this, the 2nd day of January, 1973 before me, the
undersigned officer, personally appeared R. M. Hubbs, C. B.
Drake, Jr., R. E. Young, known to me to be the persons whose
names are subscribed to the within instrument and acknowledge to
me that the same was executed for the purpose therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal.
/s/
----------------------------
Notary Public
My Commission Expires ________
______________________________
The foregoing Articles of Incorporation of St. Paul Life
Insurance Company are hereby approved the 2ND day if January,
1973.
/s/
----------------------------
Commissioner of Insurance
State of Minnesota
- ---------------------------------------
STATE OF MINNESOTA-DEPARTMENT OF STATE
I hereby certify that the within
instrument was filed for record in this
office on the 2nd day of January, 1973
at 1:00 P.M. and was recorded in book
2:39 of incorporated on page 1.
Arlen I. Erdahl, Secretary of State.
- ---------------------------------------
<PAGE>
<PAGE>
ST. PAUL LIFE INSURANCE COMPANY/ 385 Washington Street, Box 40,
St. Paul, Minnesota 55102
August 22, 1973
St. Paul Life Fund, Inc.
P.O. Box 1386
Minneapolis, Minnesota 55440
Re: St. Paul Life Fund, Inc. - Name
Gentlemen:
This letter is to officially authorize the use of the name St.
Paul Life Fund, Inc. by your company in connection with the new
mutual fund being organized. Since St. Paul Life Fund, Inc. is
an organization within our corporate family, we have no objection
to the use of the name.
You may use a copy of this letter for filing with the Secretary
of State in the State of Minnesota when the Articles of
Incorporation are filed in that office.
If there is anything further you need in connection with this
matter, please so inform me.
Very truly your,
/s/ George M. Hof
-----------------
George M. Hof
General Counsel
[STAMP]
STATE OF MINNESOTA
DEPARTMENT OF STATE
FILED
AUGUST 30, 1973
/S/ Arlen I. Erdahl
<PAGE>
<PAGE>
This agreement of Merger made and executed in duplicate this 6th
day of December, 1973, by and between ST., PAUL LIFE INSURANCE
COMPANY, Minnesota corporation, hereinafter referred to as "St.
Paul", and the directors thereof, parties of the first part, and
ST., PAUL LIFE AND CASUALTY COMPANY, a Minnesota corporation, and
wholly owned subsidiary of St. Paul, hereinafter referred to as
"Life and Casualty", and the directors thereof, parties of the
second part, said corporations being hereinafter sometimes
collectively called the "constituent corporations".
WHERE AS, after full consideration by their respective Boards of
Directors, both companies have concluded that a statutory merger
of the companies would be advisable and generally to the
advantage and welfare or said corporations and their respective
stockholders and policyholders.
NOW, THEREFORE, in consideration of the premises an mutual
agreement, covenants and undertakings herein contained by each
party to be faithfully kept and performed, it is hereby agreed by
and between the parties hereto, each acting pursuant to and under
authority of the laws of the State of Minnesota, as follows:
SECTION 1
Life and Casualty shall be merged with and into St. Paul as of
the close of business DECEMBER 10, 1973, and that thereupon the
corporate existence of Life and Casualty shall cease and the
corporate existence of St. Paul shall continue under the same of
St. Paul Life Insurance Company, a stock life insurance
corporation organized and existing under the laws of the State of
Minnesota (said surviving corporation being sometimes hereinafter
called the "Company").
SECTION 2
It is in the intent hereof that the identity, existence,
purposes, and powers of St. Paul shall continue unaffected and
unimpaired by the merger herein provided for and that the
Articles of Incorporation under which the business of the Company
is to be conducted and which shall be the Articles of
Incorporation of the Company shall be the Articles of
Incorporation of St. Paul, subject to amendment from time to time
in the manner now or hereafter prescribed by law.
SECTION 3
Upon this Agreement of Merger becoming effective, St. Paul as the
surviving corporation shall:
1. Possess all the rights, privileges, powers, franchises
and interests of Life and Casualty.
2. Possess all property and all rights to and interests in
all property, real, personal and all debts and
<PAGE>
<PAGE>
obligations due to the constituent corporations or
either of them including, without limiting the
foregoing general language, payments due under any
mortgages. interests under any and all reinsurance
agreements, premiums on existing policies and all
chooses in action belonging to either of them and all
of the foregoing shall be seemed to be sold, assigned,
transferred and set over to and invested in St. Paul as
the surviving corporation without further deed,
instrument or act of transfer.
3. Assume and be responsible for all the liabilities,
obligations and duties of the constituent corporations
including, without limiting the foregoing general
language, all liabilities and obligations which have
arisen under or by virtue of any and all policies of
insurance or other reinsurance, agreements including
those involving reinsurance, or endorsements issued or
entered into by Life and Casualty on or before the
effective date of this Merger Agreement. All rights of
creditors and all liens upon he property of either of
said constituent corporations shall be preserved
unimpaired, limited in lien to the property affected by
such lien at the time of the merger, and all debts,
liabilities an duties of the respective constituent
corporations shall thenceforth attach to said surviving
corporation, and may be enforced against it to the same
extent as if said debts, liabilities and duties had
been incurred or contracted by it. The liability of
the constituent corporations or of the stockholders or
officers, thereof, or of persons doing or transacting
business with such corporation, shall not, in any way,
be lessened or impaired by this merger.
4. Be responsible for all the liabilities and obligations
of Life and Casualty; provided, however, the rights of
the creditors of the constituent corporations or any
persons dealing with such corporations shall not me
impaired by such merger and any claim existing or
action or proceeding pending by or against any of the
constituent corporations may be prosecuted to judgment
as of the merger had not taken place or the surviving
corporation may be proceeded against or substituted in
its place.
5. Assume all the rights and obligations of life and
Casualty under contracts, bonds, policies and other
undertakings executed by Life and Casualty before the
effective date of this Agreement of Merger whether such
contracts, bonds, policies and other undertakings are
effective before or after the effective date of this
Agreement of merger. More specifically, Life and
Casualty shall and does hereby cede to St. Paul, and
St. Paul shall and does hereby reinsure and assume, of
<PAGE>
<PAGE>
the outstanding insurance contracts together with all
contracts and agreements, arising under and out of all
such contracts issued or assumed by Life and Casualty
and in force according to their terms on the nooks and
records of Life and Casualty as of the effective date
and time of the merger or which may be reinstated
thereafter in accordance with their terms, subjects,
however, to the same rights and privileges which would
have been possessed by the constituent corporations if
such reinsurance had not been effective. In addition,
St. Paul assumes subject to Life and Casualty's
defenses thereon, and agrees to be bound by the
obligations of Life and Casualty, if any as of the sate
and time of the merger, arising out of insurance
transactions effected prior to that date.
6. Assume all of the tights and obligations of Life and
casualty under all written powers of attorney executed
in the name of and filed by Life and casualty with all
federal,state and other governmental authorities.
7. Assume all the rights and obligations of Life and
Casualty under all federal and state franchises,
permits and licenses granted to or acquire by Life and
Casualty.
8. Assume all the rights and obligations of Life and
Casualty with respect to deposits, rates or forms
deposited or filed by Life and Casualty with all
deferral and state regulatory authorities for any
purpose whatsoever.
SECTION 4
The By-Laws of St. Paul shall remain and by the By-Laws of the
Company until they shall be altered or amended in the manner
presently or hereafter provided.
SECTION 5
All persons who shall be officers of St. Paul upon the merger
becoming effect shall be and remain like officers of the Company
until the Board of Directors of the Company shall elect their
respective successors.
SECTION 6
St. Paul shall pay all expenses of carrying this Agreement into
effect and accomplishing the merger.
SECTION 7
All persons who shall be directors of St. Paul upon the merger
becoming effective shall be and remain like directors of the
Company until the stockholders of the Company shall elect their
respective successors.
<PAGE>
<PAGE>
1. From and after the effective date of this Agreement ____ of
stock of Life and Casualty shall be canceled upon presentation to
the Secretary of St. Paul. All shares of stock of Life and
Casualty, except directors qualifying shares, are held by St.
Paul; therefore an exchange of stock is to not deemed necessary
by the signatories to this Agreement for Merger.
2. If any stockholder of either constituent corporation is
dissatisfied with the terms of the merger and objects thereto in
writing, he shall have the rights to have the value of his stock
appraised and paid for, and to appeal; to the courts, as provided
for dissatisfied stockholders by Minnesota Statutes Section
60A.16(5).
3. Any stockholder of either constituent corporation who does
not vote against the merger shall be deemed to have assented to
the merger as specified in this Agreement. Moreover, any
stockholders of either constituent corporation who votes against
this merger or objects thereto in writing within twenty (20) days
after filing of this Agreement but who fails to demand or apply
for payment of his stock shall be deemed to have assented to said
merger.
SECTION 9
Following the effective date of the merger, the Certificate of
Authority of Life and Casualty shall be surrendered to the
Commissioner of Insurance of the State of Minnesota.
SECTION 10
Life and Casualty agrees from time to time and when requested by
the Company that it will execute and deliver or cause to be
executed and delivered all such deeds, agreements and other
instruments and will take or cause to be taken all such further
action as the Company may deem necessary or desirable in order to
vest in and confirm to the Company title to and possession of all
property, rights, privileges, powers, franchises, and immunities
of Life and casualty and otherwise to carry out the intended
purposes of this Agreement and to that and the proper officers
and directors of the constituent corporations are fully
authorized in the name of Life and Casualty or otherwise to take
all such action and sign all such documents as mat be deemed
necessary or advisable.
SECTION 11
The constituent corporations shall do all things reasonably
within their respective powers to cause all statutory and other
procedures to be completed in time for the merger to become
effective as of the close of business on December 10,1973. If,
notwithstanding, the procedures cannot be completed in time for
the merger to become effective on December 10, 1973, as
aforesaid, in such event the effective date and time of the
merger shall be as of the close of business on the day on which a
copy of this Agreement of merger, having been duly adopted,
certified and acknowledged as required by law, is duly approved
and filed with the Commissioner of insurance of the State of
Minnesota, as provided in Section 60A.16(3)92) of the Minnesota
Statutes.
<PAGE>
<PAGE>
____________________________________________________________ This
Agreement, have caused these presents to be executed by their
respective President and their corporate seals to be affixed and
attested by the Corporate Secretaries and members of the Board of
Directors of each of the constituent corporations have joined
herein as of the day and year first above written.
ST. PAUL LIFE INSURANCE COMPANY
(Corporate Seal) A Minnesota Corporation
Attest:
/s/ /s/ R. E. Young
- ------------------------- -------------------------
Secretary R. E. Young
President
/s/ W. G. Smith /s/ R. E. Young
- ------------------------- ----------------------------
W. G. Smith R. E. Young
/s/ Lee Wiegard
- --------------------------
Lee Wiegard
BOARD OF DIRECTORS
None ST. PAUL LIFE AND CASUALTY COMPANY
(Corporate Seal) A Minnesota Corporation
/s/ /s/ R. E. Young
- ------------------------- --------------------------
Secretary R. E. Young
President
/s/ R. M. Collins, Jr. /s/ R. E. Young
- ------------------------- ----------------------------
R. M. Collins, Jr. R. E. Young
/s/ C. B. Drake, Jr.
- --------------------------
C. B. Drake, Jr.
BOARD OF DIRECTORS
<PAGE>
<PAGE>
T-41,712
STATE OF MINNESOTA )
:SS
COUNTY OF RAMSEY )
This is to certify that on the 10th day of December, 1973, before
me, personally came R. E. Young, President of St. Paul Life
Insurance Company, a Minnesota corporation with whom I am
personally acquainted, who being by me duly sworn says that he is
President and R. A. Dreis is the Secretary of St. Paul Life
Insurance Company, a Minnesota corporation, one of the
corporations described in and a party to the foregoing Merger
Agreement; that he knows the common seal of said corporation;
that the said seal affixed to said Agreement is the common seal
of said corporation, and the name of the corporation was
subscribed thereto by said President and said Secretary and the
common seal was affixed thereto all by the order of the Board of
Directors of said corporation and that the said Agreement is the
act and deed of said corporation.
WITNESS, my hand and official seal this 10th day of December,
1973.
/s/ Sally LaMirande
-------------------
Notary Public
SALLY LAMIRANDE, Notary
Public, Ramsey County, Minn.
My Commission Expires
Sept. 23, 1975.
STATE OF MINNESOTA )
:SS
COUNTY OF RAMSEY )
The undersigned Secretary of St. Paul Life Insurance Company, a
Minnesota corporation, one of the corporations described herein
and a party to the foregoing Merger Agreement, hereby certified
that a majority of the directors of said corporation signed the
foregoing Merger Agreement before him and his presence.
IN WITNESS WHEREOF, the undersigned set his hand and affixed the
corporate seal of said corporation this 6th day of December,
1973.
(Corporate Seal) /s/ R. A. Dreis
----------------------
R. A. Dreis, Secretary
<PAGE>
<PAGE>
T-41,713
STATE OF MINNESOTA )
:SS
COUNTY OF RAMSEY )
This is to certify that on the 10th day of December, 1973, before
me, personally came R. E. Young, President of St. Paul Life and
Casualty Company, a Minnesota corporation with whom I am
personally acquainted, who being by me duly sworn says that he is
President and R. A. Dreis is the Secretary of St. Paul Life and
Casualty Company, a Minnesota corporation, one of the
corporations described in and a party to the foregoing Merger
Agreement; that he knows the common seal of said corporation;
that the said seal affixed to said Agreement is the common seal
of said corporation, and the name of the corporation was
subscribed thereto by said President and said Secretary and the
common seal was affixed thereto all by the order of the Board of
Directors of said corporation and that the said Agreement is the
act and deed of said corporation.
WITNESS, my hand and official seal this 10th day of December,
1973.
/s/ Sally LaMirande
-------------------
Notary Public
SALLY LAMIRANDE, Notary
Public, Ramsey County, Minn.
My Commission Expires
Sept. 23, 1975.
STATE OF MINNESOTA )
:SS
COUNTY OF RAMSEY )
The undersigned Secretary of St. Paul Life and Casualty Company,
a Minnesota corporation, one of the corporations described herein
and a party to the foregoing Merger Agreement, hereby certified
that a majority of the directors of said corporation signed the
foregoing Merger Agreement before him and his presence.
IN WITNESS WHEREOF, the undersigned set his hand and affixed the
corporate seal of said corporation this 6th day of December,
1973.
(Corporate Seal) /s/ R. A. Dreis
----------------------
R. A. Dreis, Secretary
<PAGE>
<PAGE>
T-41, 714
CERTIFICATE OF ADOPTION OF MERGER AGREEMENT
I, R. A. Dreis, Secretary of St. Paul Life Insurance Company, a
Minnesota corporation, do hereby certify:
1. That said Merger Agreement was submitted to the
directors of St. Paul Life Insurance Company, a
Minnesota corporation, at a meeting thereof duly called
and held on the 6TH day of DECEMBER, 1973 in St. Paul,
Minnesota.
2. That at said meeting of directors on the 6TH day of
DECEMBER, 1973, said Merger Agreement was adopted and
approved by unanimous vote of those directors present
and voting.
IN WITNESS WHEREOF, I have hereunto signed my name as the
Secretary of St. Paul Life Insurance Company on the 6TH day of
DECEMBER, 1973.
(Corporate Seal) /s/ R. A. Dreis
----------------------
R. A. Dreis, Secretary
STATE OF MINNESOTA )
:SS
COUNTY OF RAMSEY )
I, SALLY LAMIRANDE, Notary Public, certify that R. A. Dreis,
personally came before me this day and acknowledged that he is
the Secretary of the St. Paul Life Insurance Company, a Minnesota
corporation, and that by due authority given and as the act of
the corporation, the foregoing Certificate of Adoption of Merger
Agreement was signed in its name by said Secretary and sealed
with its corporation seal.
WITNESS, my hand and official seal this 10TH day of DECEMBER,
1973.
/s/ Sally LaMirande
-------------------
Notary Public
SALLY LAMIRANDE, Notary
Public, Ramsey County, Minn.
My Commission Expires
Sept. 23, 1975.
<PAGE>
<PAGE>
T-41, 716
CERTIFICATE OF ADOPTION OF MERGER AGREEMENT
I, R. A. Dreis, Secretary of St. Paul Life and Casualty Company,
a Minnesota corporation, do hereby certify:
1. That said Merger Agreement was submitted to the
directors of St. Paul Life and Casualty Company, a
Minnesota corporation, at a meeting thereof duly called
and held on the 6TH day of DECEMBER, 1973 in St. Paul,
Minnesota.
2. That at said meeting of directors on the 6TH day of
DECEMBER, 1973, said Merger Agreement was adopted and
approved by unanimous vote of those directors present
and voting.
IN WITNESS WHEREOF, I have hereunto signed my name as the
Secretary of St. Paul Life and Casualty Company on the 6TH day
of DECEMBER, 1973.
(Corporate Seal) /s/ R. A. Dreis
----------------------
R. A. Dreis, Secretary
STATE OF MINNESOTA )
:SS
COUNTY OF RAMSEY )
I, SALLY LAMIRANDE, Notary Public, certify that R. A. Dreis,
personally came before me this day and acknowledged that he is
the Secretary of the St. Paul Life and Casualty Company, a
Minnesota corporation, and that by due authority given and as the
act of the corporation, the foregoing Certificate of Adoption of
Merger Agreement was signed in its name by said Secretary and
sealed with its corporation seal.
WITNESS, my hand and official seal this 10TH day of DECEMBER,
1973.
/s/ Sally LaMirande
-------------------
Notary Public
SALLY LAMIRANDE, Notary
Public, Ramsey County, Minn.
My Commission Expires
Sept. 23, 1975.
<PAGE>
<PAGE>
T-41, 715
CERTIFICATE OF ADOPTION OF MERGER AGREEMENT
I, R. A. Dreis, Secretary of St. Paul Life and Casualty Company,
a Minnesota corporation, do hereby certify:
1. That said Merger Agreement was submitted to the
directors of St. Paul Life and Casualty Company, a
Minnesota corporation, at a meeting thereof duly called
and held on the 6TH day of DECEMBER, 1973 in St. Paul,
Minnesota.
2. That at said meeting of directors on the 6TH day of
DECEMBER, 1973, said Merger Agreement was adopted and
approved by unanimous vote of those directors present
and voting.
IN WITNESS WHEREOF, I have hereunto signed my name as the
Secretary of St. Paul Life and Casualty Company on the 6TH day
of DECEMBER, 1973.
(Corporate Seal) /s/ R. A. Dreis
----------------------
R. A. Dreis, Secretary
STATE OF MINNESOTA )
:SS
COUNTY OF RAMSEY )
I, SALLY LAMIRANDE, Notary Public, certify that R. A. Dreis,
personally came before me this day and acknowledged that he is
the Secretary of the St. Paul Life and Casualty Company, a
Minnesota corporation, and that by due authority given and as the
act of the corporation, the foregoing Certificate of Adoption of
Merger Agreement was signed in its name by said Secretary and
sealed with its corporation seal.
WITNESS, my hand and official seal this 10TH day of DECEMBER,
1973.
/s/ Sally LaMirande
-------------------
Notary Public
SALLY LAMIRANDE, Notary
Public, Ramsey County, Minn.
My Commission Expires
Sept. 23, 1975.
<PAGE>
<PAGE>
T-41,717
CERTIFICATE OF COMMISSIONER OF INSURANCE
STATE OF MINNESOTA
This is to certify that I have examined the foregoing Merger
Agreement and find the same to comply with all the laws of
Minnesota, and I do hereby fully approve the same for filing with
the Secretary of State.
WITNESS my hand and official seal the 10 day of DECEMBER, 1973.
(Official Seal)
/s/ Berton W. Heaton
---------------------------------
Commission of Insurance
Filed ---------------------------
---------------------------------
Secretary of State
-----------------------------
STATE OF MINNESOTA
DEPARTMENT OF STATE
I hereby certify that the
within Instrument was filed
for record in the office on
the 12 day of December A. D.
1973, at 8 o'clock a.m. and
was duly recorded in book T-41
of Incorporation on page 707
/s/ Arlen I Erdahl
------------------
Secretary of State
-----------------------------
<PAGE>
<PAGE>
9-AA
H-52,531
AMENDMENT TO ARTICLES OF INCORPORATION
ST. PAUL LIE INSURANCE COMPANY
The undersigned, the duly elected President and Secretary of
St. Paul Life Insurance Company, hereby certify that the Articles
of Incorporation for said corporation were amended at a
Stockholder's Meeting held December 21, 1984, as follows:
RESOLVED, That Article III of the Articles of Incorporation
of the St. Paul Life Insurance Company, and the same is
hereby, amended effective as of the date of approval of the
Insurance Commissioner of Minnesota and the filing with the
Secretary of State of Minnesota to read as follows:
Article III. The principal of transacting the business
of this Company shall be in Woodbury, a suburb of Saint
Paul, County of Washington, State of Minnesota.
IN WITNESS WHEREOF, the undersigned have signed and acknowledged
this Amendment to Articles of Incorporation this 6th day of
February, 1980
(Corporate Seal) /S/ R. L. Gunderson
--------------------------
R. L. Gunderson, President
/S/ George M. Hof
--------------------------
George M. Hof, Secretary
STATE O MINNESOTA
COUNTY OF WASHINGTON
The foregoing instrument was acknowledged before me this 5th day
of February, 1980, by R. L. Gunderson and George M. Hof the
President and Secretary of St. Paul Life Insurance Company, a
Minnesota corporation, on behalf of the corporation.
(Notary Public Stamp) /s/ Joanne F. Humpal
--------------------
Notary Public
Ramsey County
The foregoing Amendment to Articles of Incorporation for St. Paul
Life Insurance Company is hereby approved this 13th day of
February, 1980.
/s/ Michael D. ________
--------------------
Commissioner of Insurance
State of Minnesota
<PAGE>
<PAGE>
H-52,532
-----------------------------
STATE OF MINNESOTA
DEPARTMENT OF STATE
I hereby certify that the
within Instrument was filed
for record in the office on
the 19 day of February A. D.
1980, at 4:30 o'clock p.m. and
was duly recorded in book H-52
of Incorporation on page 531
/s/ Joan Anderson Grace
----------------------
Secretary of State
-----------------------------
<PAGE>
<PAGE>
9-AA
S-63,221
AMENDMENT TO ARTICLES OF INCORPORATION
ST. PAUL LIE INSURANCE COMPANY
The undersigned, the duly elected President and Secretary of
St. Paul Life Insurance Company, hereby certify that the Articles
of Incorporation for said corporation were amended at a
Stockholder's Meeting held December 21, 1984, as follows:
RESOLVED FURTHER, That Article VIII of the Articles of
Incorporation be amended as follows:
The highest amount of indebtedness and liability to
which the corporation shall at any time be subject,
exclusive of policy liabilities an other reserves,
shall be One Hundred Million Dollars ($100,000,000).
IN WITNESS WHEREOF, the undersigned have signed and acknowledged
this Amendment to Articles of Incorporation this 2nd day of
January, 1985
(Corporate Seal) /S/ R. L. Gunderson
--------------------------
R. L. Gunderson, President
/S/ David C. Storlie
--------------------------
David C. Storlie, Secretary
STATE O MINNESOTA
COUNTY OF WASHINGTON
The foregoing instrument was acknowledged before me this 2nd day
of January, 1985, by R. L. Gunderson and David C. Storlie the
President and Secretary of St. Paul Life Insurance Company, a
Minnesota corporation, on behalf of the corporation.
(Notary Public Stamp) /s/ Joanne F. Humpal
--------------------
Notary Public
Ramsey County
<PAGE>
<PAGE>
S-63,222
The foregoing Amendment to Articles of Incorporation for St. Paul
Life Insurance Company is hereby approved this 14 day of January,
1985.
/s/ Michael D. Hatch
--------------------
Commissioner of Commerce
State of Minnesota
-----------------------------
STATE OF MINNESOTA
DEPARTMENT OF STATE
I hereby certify that the
within Instrument was filed
for record in the office on
the 31 day of January A. D.
1985, at 4:30 o'clock p.m. and
was duly recorded in book S-63
of Incorporation on page 221
/s/ Joan Anderson Grace
----------------------
Secretary of State
-----------------------------
<PAGE>
<PAGE>
9-AA
D-64,355
AMENDMENT TO ARTICLES OF INCORPORATION
ST. PAUL LIE INSURANCE COMPANY
The undersigned, the duly elected President and Secretary of
St. Paul Life Insurance Company, hereby certify that the Articles
of Incorporation for said corporation were amended at a
Stockholder's Meeting held December 21, 1984, as follows:
RESOLVED FURTHER, That Article VII of the Articles of
Incorporation be amended as follows:
The highest amount of indebtedness and liability to
which the corporation shall at any time be subject,
exclusive of policy liabilities an other reserves,
shall be One Hundred Million Dollars ($100,000,000).
IN WITNESS WHEREOF, the undersigned have signed and acknowledged
this Amendment to Articles of Incorporation this 2nd day of
January, 1985
(Corporate Seal) R. L. Gunderson
--------------------------
R. L. Gunderson, President
/S/ David C. Storlie
--------------------------
David C. Storlie, Secretary
STATE O MINNESOTA
COUNTY OF WASHINGTON
The foregoing instrument was acknowledged before me this 6TH day
of March, 1985, by R. L. Gunderson and David C. Storlie the
President and Secretary of St. Paul Life Insurance Company, a
Minnesota corporation, on behalf of the corporation.
(Notary Public Stamp) /s/ Joanne F. Humpal
--------------------
Notary Public
Ramsey County
This Amendment to Articles of Incorporation is hereby approved
this 13 day of March, 1985.
/s/ Michael D. Hatch
--------------------
Commissioner of Commerce
State of Minnesota
<PAGE>
<PAGE>
D-64,356
-----------------------------
STATE OF MINNESOTA
DEPARTMENT OF STATE
I hereby certify that the
within Instrument was filed
for record in the office on
the 8th day of April A. D.
1985, at 4:30 o'clock p.m. and
was duly recorded in book D-64
of Incorporation on page 355
/s/ Joan Anderson Grace
----------------------
Secretary of State
-----------------------------
<PAGE>
<PAGE>
4009
ARTICLES OF INCORPORATION
OF
GOLDEN AMERICAN INSURANCE COMPANY
ARTICLE I
The name of this Company is Golden American Life Insurance
Company.
ARTICLE II.
The name of the business and the objects and purposes to be
transacted, provided, and carried on by the Company are those of
an insurance company. To this end it shall have the powers:
(1) To engage in the general business of life insurance
company, and to effect all forms, types, variations and
combinations of life insurance, endowment or annuity
contracts or policies on a group of individuals fixed or
variable basis, for the payment of money in a single sum or
in installations upon the contingencies of death, disability
or survivorship. To provide in such policies or contracts
supplemental thereto, for additional benefits in the event
of the death of the insured by accident, total and permanent
disability of the insured, or specific dismemberment or
disablement suffered by the insured.
(2) To engage in the general business of an accident and
health insurance company for the purpose of effecting
insurance against loss or damage by the sickness, bodily
injury or death accident of the insured or dependents on a
group of individual basis; to effect all forms, types,
variations and combinations of policies or contracts of
insurance providing for indemnities in the event of death,
sickness or disability.
(3) To effect contracts of reinsurance or co-insurance of
any individual or group risk underwritten by this company,
to reinsure risks of this company or any part thereof with
any other company or to reinsure the whole of any portion of
the risks of any other company.
(4) To effect any kinds of classes of insurance business
which companies of its kind are now or any hereafter be
permitted by law to transact, whether or not such kinds or
classes of insurance are specifically enumerated elsewhere
in these Articles of Incorporation r existing amendments
thereto.
(5) To conduct business in any state or territory of the
United States in the Dominion of Canada and in any foreign
country.
(6) To acquire, hold and dispose of shares of stock,
notes, bonds or other evidences of indebtedness or
securities of any other corporation or corporations.
<PAGE>
<PAGE>
4010
(7) To transact all business and to do all other things
necessary or incidental to the foregoing purpose.
(8) The powers herein conferred upon the company are in
furtherance and not in limitation to the powers conferred by
the statutes of the State of Minnesota as from time to time
in force and effect, and the Corporation shall have in
addition to such authorized statutory powers as are in these
Articles of Incorporation recited; all other powers and
privileges conferred by the statutes of the State of
Minnesota now existing or hereinafter enacted.
(9) The Company hall have the power and authority to
acquire, own, and hold stock in any other insurance company;
whether previously existing or in the process of being
organized, and whether or not engaged in the type of
insurance heretofore specified.
ARTICLE III.
*The principal place of transacting the business of this Company
shall in Woodbury, a suburb of Saint Paul, County of Washington,
State of Minnesota.
ARTICLE IV.
The duration of this Company shall be perpetual.
ARTICLE V.
The government of the Company and the management of its affairs
shall be vested in a Board of Directors of not less than three
(3) nor more than eighteen (18) members, all of whom shall be
shareholders and shall be elected annually by the shareholders at
each annual meeting. The annual meeting shall be held, unless
otherwise designated by the Board of Directors, on the Friday
preceding the first Tuesday of February of each year at such time
and place within or without the State of Minnesota as the Board
shall determine. The first Board of Directors of this Company
who shall hold office until their respective successors are
elected and qualified, shall consist of:
R. B. Richardson 600 Park Avenue
Helena, Montana 59601
R. E. Young 385 Washington Street
St. Paul, Minnesota 55102
Lee Wiegard 385 Washington Street
St. Paul, Minnesota 55102
W. G. Smith 385 Washington Street
St. Paul, Minnesota 55102
*Amended 2-1-80
<PAGE>
<PAGE>
4011
ARTICLE VI.
The authorized amount of capital stock of this Company shall be
One Million, Five Hundred Thousand Dollars ($1,500,000) divided
into One Hundred Fifty Thousand (150,000) shares of common stock
of the par value of Ten Dollars ($10.00) each.
Each share of stock shall entitle the holder to one vote, and
shareholders shall not be entitled to cumulate their votes for
the election of directors. The Board of Directors of the Company
shall have the power to cause to be issued from time to time any
and all of the authorized but unissued share of the stock of the
Company at such prices and for such consideration as they in
their unrestricted discretion deem wise and advisable.
Shareholders shall not have any preemptive right to subscribe for
any shares of such unissued stock.
ARTICLE VII.
*The highest amount of indebtedness or liability to which the
corporation shall at any time be subject, exclusive of policy
liability and other reserves shall be One Hundred Million Dollars
($100,000,000)
ARTICLE VIII.
The name sand post office address of the incorporators forming
this company are:
R. M. Hubbs 385 Washington Street
St. Paul, Minnesota 55102
C. B. Drake, Jr. 385 Washington Street
St. Paul, Minnesota 55102
R. E. Young 385 Washington Street
St. Paul, Minnesota 55102
The foregoing Articles of Incorporation are hereby approved this
18th day of December, 1987, to be effective January 1, 1988.
/s/ James G. Miller
- -------------------------------
James G. Miller
Deputy Commissioner of Commerce
*Amended 12-21-84
<PAGE>
<PAGE>
4012
I, David C. Storlie, Secretary of the St. Paul Life Insurance
Company of St. Paul, Minnesota, do hereby certify that the
foregoing Articles of Incorporation are a true and correct of the
Articles of Incorporation as of December 18, 1987.
ST. PAUL LIFE INSURANCE COMPANY
/s/ David C. Storlie
--------------------
Dated: December 18, 1987
St. Paul, Minnesota
Subscribed and sworn to before me this
18th day of December, 1987.
/s/ Joanne F. Humpal
- --------------------
Notary Public
(Stamp)
- ----------------------------------
JOANNE F. HUMPAL
Notary Public, Ramsey County, Minn.
My Commission Expires
December 30, 1989
- ----------------------------------
-----------------------------
STATE OF MINNESOTA
DEPARTMENT OF STATE
FILED
DECEMBER 18, 1987
/s/ Joan Anderson Grace
----------------------
Secretary of State
-----------------------------
<PAGE>
<PAGE>
3538
ARTICLES OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
GOLDEN AMERICAN LIFE INSURANCE COMPANY
WE, THE UNDERSIGNED, officers of Golden American Life Insurance
Company, a corporation subject to the provisions of Chapter 300,
Minnesota Statutes, do hereby certify that resolutions as
hereinafter set forth were adopted as of the 7th day of March,
1988, by written authorization of the sole shareholder:
RESOLVED, that the sole shareholder of this corporation
hereby amends the corporation's Articles of
Incorporation to include a new Article, Article VIII,
to read as follows:
A director of the corporation shall not be personally
liable to the corporation or its shareholders for
monetary damages for breach of fiduciary duty as a
director, except for (i) liability based on a breach of
the duty of loyalty to the corporation or the
shareholders; (ii) liability or acts of omissions not
in good faith or that involve intentional misconduct or
a knowing violation of law; (iii) liability for acts
prohibited under Minnesota Statutes, Section 300.60;
(iv) liability under Minnesota Statutes, Section
300.64, Subdivisions 1, 2, and 3; (v) liability for any
transaction from which the director derived an improper
personal benefit; or (vi) liability for any act or
omission occurring prior to the date this Article
becomes effective. If Chapter 300 of the Minnesota
Statues hereafter is amended to authorize the further
elimination or limitation of the liability of
directors, then the liability of a director of the
corporation in addition to the limitation on personal
liability provided herein, shall be limited to the
fullest extent permitted by the amended Chapter 300 of
the Minnesota Statutes. Any repeal of amendment of
this Article by the shareholders of the corporation
shall be prospective only, shall not adversely affect
any elimination of or limitation on the personal
liability of a director of the corporation existing at
the time of such repeal or amendment and shall e made
only upon the affirmative vote of the same percentage
of votes represented by shares of the common stock of
the corporation present, in person or by proxy, at a
meeting of shareholders duly called for such purpose,
as were
<PAGE>
<PAGE>
3537
originally obtained to adopt this Article. If after
the adoption of this Article, Chapter 300 of the
Minnesota Statutes is amended to adversely affect any
elimination of or limitation on the personal liability
of a director of the corporation, any such amendment
shall be prospective only and shall not adversely
affect any elimination of or limitation on the personal
liability of a director of the corporation existing at
the time of such amendment.
RESOLVED, FURTHER, the President and Secretary be, and
they hereby are, authorized, empowered and directed to
make, execute and acknowledge such documents as may be
required by Minnesota Statutes, Chapter 300, to reflect
this amendment in the articles of Incorporation and to
cause such document or documents to be filed for record
in the manner required by law.
/s/ Fred Davidson
--------------------
Fred Davidson
President
/s/ Helene K. Netter
--------------------
Helene K. Netter
Assistant Secretary
STATE OF NEW YORK )
: SS.:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before as this __ day
of March, 1988, by Fred Davidson and Helene K. Netter, the
President and Assistant Secretary, respectively, of Golden
American Life Insurance Company, a Minnesota corporation, on
behalf of the corporation.
/s/ Rhonda Silverman
--------------------
Notary Public
(Stamp) (Stamp)
STATE OF MINNESOTA Rhonda Silverman
DEPARTMENT OF STATE Notary Public, State of N. Y.
FILED No. 473115
MARCH 18, 1988
JOAN ANDERSON GRACE
SECRETARY OF STATE
<PAGE>
<PAGE>
-----------------------------
STATE OF MINNESOTA
DEPARTMENT OF STATE
I hereby certify that
this is a true and complete
copy of the document as filed
for record in this office
DATED: June 9, 1988
/s/ Joan Anderson Grace
----------------------
Secretary of State
-----------------------------
By /s/ Teresa Nutt
-----------------------
-----------------------------
<PAGE>
EXHIBIT (6)(b)
RESTATED CERTIFICATE OF INCORPORATION
OF
GOLDEN AMERICAN LIFE INSURANCE COMPANY
--------------------------------------
Adopted in accordance with the provisions of Sections 242 and 245 of the
General Corporation Law of the State of Delaware
--------------------------------------
The undersigned, Terry L. Kendall, President of Golden American Life
Insurance Company, a corporation organized and existing under the laws of the
State of Delaware (the "Corporation"), hereby certifies as follows:
1. The name of the Corporation is Golden American Life Insurance
Company. The Corporation was originally incorporated in the State of
Minnesota under the name St. Paul Life Insurance Company as a domestic
insurance corporation. The Corporation's original; articles of incorporation
were filed with the Department of State of the State of Minnesota on January
2, 1973 (the "Original Certificate"). A number of amendments have thereafter
been made to the Original Certificate by means of various certificates of
amendment and restatement, all of which were also filed in Minnesota.
2. the Corporation has been redomesticated from the State of Minnesota
to the State of Delaware, effective as of the date of the filing of this
certificate, pursuant to Section 4946 of the Delaware Insurance Code (18 DEL.
C.S 4946) and all other applicable provisions o f Delaware and Minnesota law.
A Certificate of Incorporation incorporating all of the provisions of the
Original Certificate, as amended, has today been filed as the Delaware
Certificate of Incorporation of the Corporation to implement the Corporation's
redomestication to Delaware. The Corporation is now filing this Restated
Certificate of Incorporation to amend and restate such Delaware Certificate of
Incorporation and to eliminate unnecessary provisions included therein.
3. The Certificate of Incorporation of the Corporation is hereby amended
and restated in its entirety as follows:
ARTICLE I
The name of the Corporation is Golden American Life Insurance Company.
ARTICLE II
The registered office of the Corporation in the State of Delaware is
located at 1001 Jefferson Street, Suite 550, Wilmington, New Castle County,
Delaware 19801. The Corporation is its own registered agent at that address.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
the State of Delaware.
ARTICLE IV
The total number of shares of stock which the Corporation shall have
authority to issue is 250,000. All such shares are to be common stock, par
value of Ten Dollars ($10) per share, and are to be of one class.
<PAGE>
<PAGE>
ARTICLE V
The Corporation is to have perpetual existence.
ARTICLE VI
The number of directors constituting the Board of Directors of the
Corporation shall be such as from time to time shall be fixed by, or in the
manner provided in, the By-laws of the Corporation.
ARTICLE VII
Unless and except to the extent that the By-laws of the Corporation shall
so require, the election of directors of the Corporation need not be by
written ballot.
ARTICLE VIII
In furtherance and not in limitation of the powers conferred by the laws
of the State of Delaware, the Board of Directors is expressly authorized and
empowered to make, alter and repeal the By-laws of the Corporation, subject to
the power of the stockholders of the Corporation to alter or repeal any by-law
made by the Board of Directors.
ARTICLE IX
A director of this Corporation shall not be liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except to the extent such exemption from liability or limitation
thereof is not permitted under the General Corporation Law of the State of
Delaware as the same exists or may hereafter be amended.
Any repeal or modification of the foregoing paragraph shall not adversely
affect any right or protection of a director of the Corporation existing
hereunder with respect to any act or omission occurring prior to such repeal
or modification.
ARTICLE X
The Corporation reserves the right at any time, and from time to time, to
amend, alter, change or repeal any provision contained in this Certificate of
Incorporation, and other provisions authorized by the laws of the State of
Delaware at the time in force may be added or inserted, in the manner now or
hereafter prescribed by law; and all rights, preferences and privileges of
whatsoever nature conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to this Certificate of Incorporation in its present
form or as hereafter amended are granted subject to the rights reserved in
this article.
4. That such Restated Certificate of Incorporation has been duly adopted
in accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware by the unanimous written consent of
all of the stockholders entitled to vote in accordance with the provisions of
Section 228 of the General Corporation Law of the State of Delaware.
-2-
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Restated
Certificate of Incorporation as of this 21ST day of December, 1993.
By: /s/ Terry L. Kendall
--------------------
Terry L. Kendall
President
Attest:
/s/ Bernard R. Beckerlegge
- --------------------------
Bernard R. Beckerlegge
Secretary
-3-
<PAGE>
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
RESTATED ARTICLES OF INCORPORATION
OF
GOLDEN AMERICAN LIFE INSURANCE COMPANY
We, the undersigned officer of Golden American Life
Insurance Company, a corporation subject to the provisions of
Chapter 300 of the Minnesota Statutes, do hereby certify that
resolutions as hereinafter set forth were adopted as of the 16th
day of April, 1991, written authorization of the sole
stockholder:
VOTED: That the Restated Certificate of Incorporation of
the Corporation be amended to read as follows:
"FIRST": The name of the Corporation is MB Variable Life
Insurance Company".
VOTED: That all other paragraphs of the Restated
Certificate of Incorporation shall remain unchanged.
VOTED: That the directors and officers of the Corporation
be, and they hereby are, authorized to do and cause to be done
all things in their judgment necessary or advisable to effect the
amendment of the Restated Certificate of Incorporation of the
Corporation.
The undersigned, Fred H. Davidson and Bernard R.
Beckerlegge, the President and Secretary, respectively, of Golden
American Life Insurance Company, do hereby certify that the
foregoing Certificate of Amendment of the Restated Articles of
Incorporation of Golden American Life Insurance Company is a true
and correct copy of such Certificate and contains therein a true
and correct copy of the Resolution of The Mutual Benefit Life
Insurance Company, the sole stockholder of Golden American Life
Insurance Company as of this 17th day of April, 1991.
/s/ Fred H. Davidson
-----------------------------
Fred H. Davidson, President
/s/ Bernard R. Beckerlegge
-----------------------------
Bernard R. Beckerlegge, Secretary
GOLDEN AMERICAN LIFE INSURANCE COMPANY
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 10:00 am 02/22/1995
950040023-2365510
<PAGE>
<PAGE>
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
GOLDEN AMERICAN LIFE INSURANCE COMPANY
Golden American Life Insurance Company, a corporation
organized and existing under and by virtue of the General
Corporation Law of the State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
FIRST: that the Board of Directors of the Corporation, by
the unanimous written consent of its members filed with the
minutes of the Board, adopted a resolution declaring advisable
the following amendment to the Restated Certificate of
Incorporation of the Corporation:
RESOLVED, that Article IV of the Restated Certificate of
Incorporation of the Corporation be amended to read in full as
follows:
The total number of shares of stock which the
corporation shall have authority to issue is 300,000,
consisting of 50,000 shares of preferred stock, par
value $5,000 per share, and 250,000 shares of common
stock, par value $10.00 per share.
PART I
SERIES OF REDEEMABLE PREFERRED STOCK
Section 1. DESIGNATION AND NUMBER OF SHARES.
This series of Preferred Stock shall be designated
the "Series A Redeemable Preferred Stock" (the "Series
A Preferred Stock"). The number of authorized shares
of Series A Preferred Stock shall be ten thousand
(10,000).
Section 2. RANK.
The Series A Preferred Stock shall, as to the
distribution of assets upon the liquidation,
<PAGE>
<PAGE>
dissolution or winding up of the Corporation, rank (i)
prior to the common stock of the Corporation, par value
$10.00 per share of (the "Common Stock"), and any other
capital stock of the Corporation (other than any other
class or series of a class of capital stock of the
Corporation the terms of which expressly provide that
the shares thereof rank senior or on a parity as to the
payment of dividends and the distribution of assets
upon the liquidation, dissolution or winding up of the
Corporation with the shares of the Series A Preferred
Stock) (such securities, other than those described in
the immediately preceding parenthetical clause,
collectively referred to herein as the "Junior
Securities") and (ii) on a parity with any other class
or series of a class of capital stock of the
Corporation the terms of which expressly provide that
the shares thereof rank on a parity as to the payment
of dividends and the distribution of assets upon the
liquidation, dissolution or winding up of the
Corporation with the shares of the Series A Preferred
Stock (the "Parity Securities").
Section 3. DIVIDENDS.
(a) The holders of the Series A Preferred Stock shall
be entitled to receive, when as and if declared by the
Board of Directors of the Corporation (the "Board"),
out of funds legally available therefor, cash dividends
in an amount equal to the Applicable Dividend Rate (as
defined in Section 3(b) below) multiplied by the
Redemption Price (as defined in Section 4(a) below).
Such dividends shall be payable quarterly on the last
Business Day (as defined in Section 3(b) below) of
March, June, September, and December of each year (each
such date being referred to herein as a "Quarterly
Dividend Payment Date") commencing March 31, 1995.
Each such dividend shall be payable to holders of
record of shares of Series A Preferred Stock, as they
appear on the stock record books of the Corporation at
the close of business on the record date for such
dividend, which record date shall be fixed by the Board
and shall be not more than 60 days nor less than 10
days prior to the Quarterly Dividend Payment Date for
such dividend. Such dividends shall begin to accrue
and be cumulative from the date on which the first
shares of Series A Preferred Stock are issued, whether
or not there shall be funds legally available for the
payment thereof and whether or not the Board shall have
declared such dividends.
-2-
<PAGE>
<PAGE>
(b) For purposes of this Section 3, the term
"Applicable Dividend Rate" shall mean a percentage not
to exceed the sum of (i) 1.5% and (ii) the highest
"Prime Rate" as published under the "Money Rates"
subsection in THE WALL STREET JOURNAL on (A) December
30, 1994 for purposes of determining the Applicable
Dividend Rate for the dividend payable on March 31,
1995 or (B) the Quarterly Dividend Payment Date for the
immediately preceding quarterly period (whether or not
a dividend was actually declared and paid for such
period) for purposes of determining the Applicable
Dividend Rate for dividends payable after March 31,
1995. For purposes of this Section 3, the term
"Business Day" shall mean a day on which the New York
Stock Exchange is open for trading.
(c) When dividends are not paid in full upon the
Series A Preferred Stock, any dividends declared or
paid upon shares of Series A Preferred Stock and any
Parity Securities shall be declared or paid, as the
case may be, pro rata so that the amounts or dividends
declared or paid, as the case may be, per share on the
Series A Preferred Stock and such other Parity
Securities in all cases bear to each other the same
ratio that accumulated and unpaid dividends per share
on the shares of Series A Preferred Stock and such
other Parity Securities bear to each other. No
interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments
on the Series A Preferred Stock or any Parity
Securities which may be in arrears.
(d) Unless full cumulative dividends have been or
contemporaneously are declared by the Board and paid or
declared and a sum set apart sufficient for such
payment by the Corporation on the Series A Preferred
Stock for all quarterly periods ending on or prior
to the date of payment of dividends on any Junior
Securities, no dividends shall be declared or paid or
sum set apart for such payment or any other
distribution made on or with respect to such Junior
Securities for any period, other than dividends payable
or distributions made in shares of Junior Securities.
(e) Unless full cumulative dividends have been or
contemporaneously are declared by the Board and paid of
declared and a sum set apart sufficient for payment by
the Corporation on the Series A Preferred Stock for all
-3-
<PAGE>
<PAGE>
quarterly periods ending on or prior to the date of any
event described in clause (i) or (ii) of this Section
3(e), the Corporation shall not, and shall not permit
any subsidiary thereof to (i) redeem, purchase, retire
or otherwise acquire for any consideration any shares
of Series A Preferred Stock, unless (A) all shares of
Series A Preferred Stock outstanding shall be redeemed,
repurchased, retired or otherwise acquired or (B) the
shares of Series A Preferred Stock are redeemed,
purchased, retired or otherwise acquired pro rata from
among the holders of the shares then outstanding or
(ii) redeem, purchase, retire or otherwise acquire for
any consideration, or make any payment on account of a
sinking fund or other similar fund for redemption,
purchase retirement or acquisition of, any Junior
Securities or any Parity Securities, or any warrant,
right or option to purchase any thereof, or make any
distribution in respect thereof, directly or
indirectly, whether in cash, obligations or securities
of the Corporation or other property, except, (i) in
the case of Junior Securities, redemptions, purchases,
retirements, acquisitions or distributions made in
shares of Junior Securities or (ii) in the case of
Parity Securities, pro rata redemptions, purchase,
retirements or acquisitions so that the amounts
redeemed, purchased, retired or otherwise acquired or
paid or distributed in respect thereof, as the case may
be, per share on the Series A Preferred Stock and such
other Parity Securities in all cases bear to each other
the same ratio that accumulated and unpaid dividends
per share on the shares of Series A Preferred Stock and
such other Parity Securities bear to each other.
Section 4. REDEMPTION.
(a) To the extent the Corporation shall have funds
legally available therefor, the Corporation may redeem
at its option the Series A Preferred Stock in cash, at
the option of the Corporation, at any time or from time
to time, in whole or in part, at a redemption price in
cash of five thousand dollars ($5,000) per share (the
"Redemption Price"), together with accrued and unpaid
dividends thereon (whether or not declared) through the
date fixed by the Corporation for redemption (The
"Redemption Date"), without interest.
(b) At least 30 days but not more than 60 days
prior to the Redemption Date, a written notice of such
-4-
<PAGE>
<PAGE>
redemption (the "Redemption Notice") shall be given by
first class mail, postage prepaid, to each holder of
record of shares of Series A Preferred Stock. The
Redemption Notice shall be sent to such holder at such
holder's address as shown on the records of the
Corporation and shall state: (i) the Redemption Date;
(ii) the number of shares of Series A Preferred Stock
to be redeemed and, if less than all the shares held by
such holder are to be redeemed, the number of shares to
be redeemed from such holder; (iii) the Redemption
Price; and (iv) the place or places where such holder
is to surrender the certificate or certificates for
such holder's shares to the Corporation.
(c) On or after the Redemption Date, each holder
of shares of the Series A Preferred Stock which have
been redeemed shall present and surrender the
certificate or certificates for such holder's shares
to the Corporation at the place designated in the
Redemption Notice and thereupon the Redemption Price of
such shares shall be paid to or on the order of the
person whose name appears on such certificate or
certificates as the owner thereof and each surrendered
certificate shall be canceled. In case fewer than all
of the shares represented by any such certificate are
redeemed, a new certificate shall be issued
representing the unredeemed shares without cost to the
holder thereof.
(d) From and after the Redemption Date (unless default
shall be made by the Corporation in payment of the
Redemption Price), all rights of the holders of the
Series A Preferred Stock with respect to shares that
have been redeemed shall cease and terminate, except
the right to receive the Redemption Price thereof upon
the surrender of certificates representing the same,
and such shares shall not thereafter be transferred
(except with the consent of the Corporation) on the
books of the Corporation and such shares shall not be
deemed to be outstanding for any purpose whatsoever.
Section 5. LIQUIDATION.
(a) the share of Series A Preferred Stock shall
rank prior to the shares of Junior Securities upon
liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary (a
"Liquidation transaction"), so that in the event of any
-5-
<PAGE>
<PAGE>
Liquidation transaction, the holders of shares of
Series A Preferred Stock then outstanding shall be
entitled to receive out of the assets or surplus funds
of the Corporation available for distribution to its
stockholders, or proceeds thereof, whether from
capital, surplus or earnings before any distribution is
made to holders of any Junior Securities, a liquidation
preference in the amount per share of Series A
Preferred Stock equal to five thousand dollars
($5,000), plus an amount equal to all accrued and
unpaid dividends (whether or not declared) on the
shares of Series A Preferred Stock to the date of final
distribution.
(b) If, upon any Liquidation Transaction, the
assets or surplus funds of the Corporation, or proceeds
thereof whether from capital, surplus or earnings,
distributable among the holders of shares of Series A
Preferred Stock and any Parity Securities then
outstanding are insufficient to pay in full the
preferential liquidation payments due to such holders,
such assets, surplus funds or proceeds shall be
distributable among such holders pro rata in accordance
with the amounts that would be payable on such shares
of Series A Preferred Stock and Parity Securities if
all amounts payable thereon were payable in full. In
the event of a Liquidating Transaction, the Corporation
shall give written notice thereof to the holders of
shares of Series A Preferred Stock, by first class
mail, postage prepaid, to such holders' respective
addresses as shown on the stock books of the
Corporation.
(c) Neither the consolidation, merger, or other
business combination of the Corporation with or into
any other person or persons nor the sale of all or
substantially all of the assets of the Corporation
shall be deemed to be a Liquidation Transaction.
Section 6. VOTING RIGHTS.
The holders of shares of Series A Preferred Stock
shall not be entitled to any voting rights except as
required by law.
SECOND: That in lieu of a meeting and vote of stockholders,
the sole stockholder of the Corporation has given its unanimous
written consent to said amendment in accordance with the
-6-
<PAGE>
<PAGE>
provisions of Section 228 and 242 of the General Corporation Law
of the State of Delaware.
THIRD: That the aforesaid amendment was duly adopted in
accordance with the applicable provisions of Sections 151, 228
and 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said Golden American Life Insurance
Company has caused this certificate to be signed by David L.
Jacobson, its Senior Vice President, this 22nd day of February,
1995.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
By: /s/ David L. Jacobson
--------------------------
David L. Jacobson
Senior Vice President
-7-
EXHIBIT (6)(c)
CERTIFICATE OF AMENDMENT
OF THE
RESTATED ARTICLES OF INCORPORATION
OF
GOLDEN AMERICAN LIFE INSURANCE COMPANY
We, the undersigned officer of Golden American Life
Insurance Company, a corporation subject to the provisions of
Chapter 300 of the Minnesota Statutes, do hereby certify that
resolutions as hereinafter set forth were adopted as of the 16th
day of April, 1991, written authorization of the sole
stockholder:
VOTED: That the Restated Certificate of Incorporation of
the Corporation be amended to read as follows:
"FIRST": The name of the Corporation is MB Variable Life
Insurance Company".
VOTED: That all other paragraphs of the Restated
Certificate of Incorporation shall remain unchanged.
VOTED: That the directors and officers of the Corporation
be, and they hereby are, authorized to do and cause to be done
all things in their judgment necessary or advisable to effect the
amendment of the Restated Certificate of Incorporation of the
Corporation.
The undersigned, Fred H. Davidson and Bernard R.
Beckerlegge, the President and Secretary, respectively, of Golden
American Life Insurance Company, do hereby certify that the
foregoing Certificate of Amendment of the Restated Articles of
Incorporation of Golden American Life Insurance Company is a true
and correct copy of such Certificate and contains therein a true
and correct copy of the Resolution of The Mutual Benefit Life
Insurance Company, the sole stockholder of Golden American Life
Insurance Company as of this 17th day of April, 1991.
/s/ Fred H. Davidson
-----------------------------
Fred H. Davidson, President
/s/ Bernard R. Beckerlegge
-----------------------------
Bernard R. Beckerlegge, Secretary
GOLDEN AMERICAN LIFE INSURANCE COMPANY
EXHIBIT (6)(d)
STATE OF DELAWARE
[GRAPHIC OF LIBERTY AND INDEPENDENCE SEAL WITH TWO MEN ON OUTSIDE.]
DEPARTMENT OF INSURANCE
DOVER, DELAWARE
-------[GRAPHIC OF DIAMOND SYMBOL]-------
I, DONNA LEE H. WILLIAMS, INSURANCE COMMISSIONER OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THAT the attached Certificate of Restated Certificate of
Incorporation of the GOLDEN AMERICAN LIFE INSURANCE COMPANY, as filed with the
Delaware Secretary of State on December 21, 1993, is a true and correct copy
of the document on file with this Department.
IN WITNESS WHEREOF, I HAVE HEREUNTO
SET MY HAND AND AFFIXED THE OFFICIAL
SEAL OF THIS DEPARTMENT AT THE CITY OF
DOVER, THIS 7TH DAY OF JANUARY, 1994,
/S/ DONNA LEE H. WILLIAMS
--------------------------------------
Insurance Commissioner
--------------------------------------
Deputy Insurance Commissioner
<PAGE>
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
--------------------------------
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
RESTATED CERTIFICATE OF INCORPORATION OF "GOLDEN AMERICAN LIFE INSURANCE
COMPANY" FILED IN THIS OFFICE ON THE TWENTY-FIRST DAY OF DECEMBER, A.D. 1993,
AT 11:32 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO NEW CASTLE
COUNTY RECORDER OF DEEDS ON THE TWENTY-EIGHTH DAY OF DECEMBER, A.D. 1993 FOR
RECORDING.
----------
[GRAPHIC OF SECRETARY OF STATE SEAL] /S/ WILLIAM T. QUILLEN
----------------------
WILLIAM T. QUILLEN, SECRETARY OF STATE
AUTHENTICATION: *4215285
933625028 DATE: 12/28/1993
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
OF
GOLDEN AMERICAN LIFE INSURANCE COMPANY
--------------------------------------
Adopted in accordance with the provisions of Sections 242 and 245 of the
General Corporation Law of the State of Delaware
--------------------------------------
The undersigned, Terry L. Kendall, President of Golden American Life
Insurance Company, a corporation organized and existing under the laws of the
State of Delaware (the "Corporation"), hereby certifies as follows:
1. The name of the Corporation is Golden American Life Insurance
Company. The Corporation was originally incorporated in the State of
Minnesota under the name St. Paul Life Insurance Company as a domestic
insurance corporation. The Corporation's original; articles of incorporation
were filed with the Department of State of the State of Minnesota on January
2, 1973 (the "Original Certificate"). A number of amendments have thereafter
been made to the Original Certificate by means of various certificates of
amendment and restatement, all of which were also filed in Minnesota.
2. the Corporation has been redomesticated from the State of Minnesota
to the State of Delaware, effective as of the date of the filing of this
certificate, pursuant to Section 4946 of the Delaware Insurance Code (18 DEL.
C.S 4946) and all other applicable provisions o f Delaware and Minnesota law.
A Certificate of Incorporation incorporating all of the provisions of the
Original Certificate, as amended, has today been filed as the Delaware
Certificate of Incorporation of the Corporation to implement the Corporation's
redomestication to Delaware. The Corporation is now filing this Restated
Certificate of Incorporation to amend and restate such Delaware Certificate of
Incorporation and to eliminate unnecessary provisions included therein.
3. The Certificate of Incorporation of the Corporation is hereby amended
and restated in its entirety as follows:
ARTICLE I
The name of the Corporation is Golden American Life Insurance Company.
ARTICLE II
The registered office of the Corporation in the State of Delaware is
located at 1001 Jefferson Street, Suite 550, Wilmington, New Castle County,
Delaware 19801. The Corporation is its own registered agent at that address.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
the State of Delaware.
ARTICLE IV
The total number of shares of stock which the Corporation shall have
authority to issue is 250,000. All such shares are to be common stock, par
value of Ten Dollars ($10) per share, and are to be of one class.
<PAGE>
ARTICLE V
The Corporation is to have perpetual existence.
ARTICLE VI
The number of directors constituting the Board of Directors of the
Corporation shall be such as from time to time shall be fixed by, or in the
manner provided in, the By-laws of the Corporation.
ARTICLE VII
Unless and except to the extent that the By-laws of the Corporation shall
so require, the election of directors of the Corporation need not be by
written ballot.
ARTICLE VIII
In furtherance and not in limitation of the powers conferred by the laws
of the State of Delaware, the Board of Directors is expressly authorized and
empowered to make, alter and repeal the By-laws of the Corporation, subject to
the power of the stockholders of the Corporation to alter or repeal any by-law
made by the Board of Directors.
ARTICLE IX
A director of this Corporation shall not be liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except to the extent such exemption from liability or limitation
thereof is not permitted under the General Corporation Law of the State of
Delaware as the same exists or may hereafter be amended.
Any repeal or modification of the foregoing paragraph shall not adversely
affect any right or protection of a director of the Corporation existing
hereunder with respect to any act or omission occurring prior to such repeal
or modification.
ARTICLE X
The Corporation reserves the right at any time, and from time to time, to
amend, alter, change or repeal any provision contained in this Certificate of
Incorporation, and other provisions authorized by the laws of the State of
Delaware at the time in force may be added or inserted, in the manner now or
hereafter prescribed by law; and all rights, preferences and privileges of
whatsoever nature conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to this Certificate of Incorporation in its present
form or as hereafter amended are granted subject to the rights reserved in
this article.
4. That such Restated Certificate of Incorporation has been duly adopted
in accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware by the unanimous written consent of
all of the stockholders entitled to vote in accordance with the provisions of
Section 228 of the General Corporation Law of the State of Delaware.
-2-
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Restated
Certificate of Incorporation as of this 21ST day of December, 1993.
By: /s/ Terry L. Kendall
--------------------
Terry L. Kendall
President
Attest:
/s/ Bernard R. Beckerlegge
- --------------------------
Bernard R. Beckerlegge
Secretary
-3-
<PAGE>
EXHIBIT (6)(e)
BYLAWS
OF
GOLDEN AMERICAN LIFE INSURANCE COMPANY
<PAGE>
GOLDEN AMERICAN LIFE INSURANCE COMPANY
INDEX
ARTICLE I.
STOCKHOLDERS
------------
Page
Sec. 1 Notice of Meetings 1
Sec. 2 Annual Stockholders' Meetings 1
Sec. 3 Special Stockholders' Meetings 2
Sec. 4 Quorum and Adjournments 2
Sec. 5 Form of Proxy 2
ARTICLE II.
BOARD OF DIRECTORS
------------------
Sec. 1 Authority and Duties of Directors 2
Sec. 2 Regular Meetings 3
Sec. 3 Annual Meetings 3
Sec. 4 Special Meetings 3
Sec. 5 Waiver of Notice of Special Meetings 3
Sec. 6 Action in Writing 4
Sec. 7 Quorum 4
Sec. 8 Vacancies 4
ARTICLE III.
OFFICERS
--------
Sec. 1 Election and Removal 4
Sec. 2 Number 4
Sec. 3 Duties of Chairman 5
Sec. 4 Duties of President 5
Sec. 5 Duties of Executive Vice President 5
Sec. 6 Duties of Vice Presidents 5
Sec. 7 Duties of Secretary 5
Sec. 8 Duties of Treasurer 6
Sec. 9 Duties of Actuary 6
Sec. 10 Duties of General Counsel 6
Sec. 11 Duties of Medical Director 6
Sec. 12 Duties of Other Officers 6
ARTICLE IV.
CAPITAL STOCK
-------------
Sec. 1 Certificates 7
Sec. 2 Transfer 7
ARTICLE V.
COMMITTEES
----------
Sec. 1 Executive Committee 7
Sec. 2 Other Committees 7
<PAGE>
ARTICLE VI.
CORPORATE ACTIONS
-----------------
Sec. 1 Dividends 8
Sec. 2 Loaning Company's Moneys 8
Sec. 3 Borrowing Money 8
Sec. 4 Depositories 8
ARTICLE VII.
MISCELLANEOUS
-------------
Sec. 1 Fiscal Year 8
Sec. 2 Corporate Seal 8
Sec. 3 Nominees 8
Sec. 4 Officers' and Employees' Bonds 9
Sec. 5 Indemnification of Directors and Officers 9
Sec. 6 Voting Stock 9
Sec. 7 Execution of Documents 9
Sec. 8 Amendments 9
<PAGE>
BYLAWS
OF
GOLDEN AMERICAN LIFE INSURANCE COMPANY
ARTICLE I.
STOCKHOLDERS
NOTICE OF MEETINGS
Section 1. Not less than fifteen (15) days prior to the time appointed
for the holding of any stockholders' meetings, a notice thereof shall be given
either in person or by mail addressed to each stockholder at his last known
address, over the signature of an officer of the Company. In the case of an
annual meeting, the said notice shall state that it is to be held for the
election of directors and the transaction of such other business as may come
before the meeting. In case of a special meeting of the stockholders, the
notice shall state generally the nature of the business to be considered.
Unless the Board of Directors shall otherwise determine, stockholders of
record on the date of mailing shall be entitled to notice of any meeting, and
stockholders of record on the date of any meeting shall be entitled to vote
thereat.
All business transacted at any meeting of the stockholders at which all
of the stockholders are present, or the holding of which shall have consented
to in writing or by telegraph shall be valid, though no previous notice of
such meeting be given.
ANNUAL STOCKHOLDERS' MEETINGS
*Section 2. The Annual Meeting of the Stockholders shall be held each
year at the office of the Company in the City of St. Paul, Minnesota, or at
such other place as may be designated by the Board of Directors, in accordance
with the Articles of Incorporation.
At said meeting the stockholders shall elect a Board of Directors
consisting of not less than five (5) nor more than twelve (12) members who
shall hold office for one year or until their successors are elected and
qualified. At such meeting there may be transacted any other business that
may be brought before it.
Should the annual election of directors not take place in any year on the
day hereinbefore fixed therefor, for any reason whatever, such election may be
held on such other day within six (6) months thereafter as may be appointed
therefor by the Board of Directors, they giving notice thereof as in the case
of the Annual Meeting.
* Amended 12-21-84
-1-
<PAGE>
SPECIAL STOCKHOLDERS' MEETINGS
Section 3. Special meetings of the stockholders may be held on call of
the Board of Directors with notice of said meeting being given in the same
manner as notice of an Annual Meeting.
QUORUM AND ADJOURNMENTS
Section 4. At all annual or special meetings of the stockholders, the
holders of a majority of the outstanding shares of the capital stock, whether
present in person or by proxy, shall constitute a quorum for the transaction
of business, but less than a majority may adjourn from time to time or sine
die.
FORM OF PROXY
Section 5. Any stockholder may be represented at any stockholders'
meeting by written proxy or power of attorney signed by the stockholder, and
filed with the Secretary of the Company at any time prior to the opening of
the meeting.
ARTICLE II.
BOARD OF DIRECTORS
AUTHORITY AND DUTIES OF DIRECTORS
*Section 1. The Board of Directors shall have authority and
responsibility for the general management of the corporation in all those
matters which are not reserved for action by the stockholders. Without
limiting the generality of the foregoing, the Board shall have specific
authority:
A. To call special meetings of the stockholders when they deem it
necessary, in the manner provided in these Bylaws.
B. To make rules and regulations not inconsistent with the law, the
Articles of Incorporation or the Bylaws of the Company.
C. To incur such indebtedness as may be deemed necessary and to
authorize the execution by the appropriate officers, in the name of
the Company, of any required evidence of such indebtedness.
It shall be the duty of the Board of Directors, without limiting the
generality of the forgoing:
A. To cause to be kept a complete record of all its meetings and acts,
and also all proceedings of the meetings of stockholders, and to
cause to be presented a full statement at the regular meetings of
the stockholders, showing in detail the assets and liabilities of
the Company and generally the condition of its affairs.
* Amended 12-21-84
-2-
<PAGE>
B. To require the Secretary and the Treasurer and their assistants to
keep full and accurate books and accounts and to prescribe the form
and mode of keeping such books.
C. To cause to be issued to the stockholders certificates of stock in
the proportion to their several interests, not to exceed in the
aggregate the authorized capital stock of the Company.
D. To cause the monies of the Company to be safely kept and to
determine the method of signing Company checks and orders for
transfer or withdrawal of the funds of this Company on deposit with
any bank in whatever form.
E. To reserve, allot, or set aside such a amount in excess of the
reserve required by law to be held and maintained as shall, in their
judgment, be for the best interests of the Company.
F. To adopt and exercise such plans and systems of insurance as they
may deem necessary for the best interests of the Company.
REGULAR MEETINGS
*Section 2. The Board of Directors shall meet from time to time without
notice at such places within or without the State of Minnesota, and at such
times and dates as the Board of Directors shall determine.
ANNUAL MEETINGS
Section 3. The Annual Meeting of the Board of Directors shall be held
immediately following the annual stockholders' meeting, and no notice thereof
shall be required.
SPECIAL MEETINGS
Section 4. Special meetings of the Board of Directors may be called by
the Chairman, the President, or any two (2) directors on written request to
the Secretary stating the object of the meeting. Notices of special meetings
of the Board of Directors, stating the time, date, place and object of the
meeting, shall be given to each director either in person or by telephone, or
by telegraph or mail addressed to each director's last known address at least
twenty-four (24) hours prior to the time of such meeting.
WAIVER OF NOTICE OF SPECIAL MEETINGS
Section 5. All business transacted at any special meeting at which all
of the directors are either present, or to the holding of which they shall
have consented in writing, or by telegraph, shall be valid, though no previous
notice of such meeting be given.
* Amended 12-21-84
-3-
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ACTION IN WRITING
Section 6. Any action which may be taken by the Board of Directors or
any committee thereof may be taken without a meeting if done in writing signed
by all members of the Board of Directors or Committee.
QUORUM
Section 7. A majority of the full Board of Directors shall constitute a
quorum for the transaction of business, but less than a majority may adjourn
from time to time or sine die. In case of adjournment to a subsequent sate
and hour, the Secretary shall give notice of the adjourned meeting in the
manner provided by Section 4 of this Article.
VACANCIES
*Section 8. The Board of Directors shall have the power to elect
successors to fill up to three(3) vacancies that may occur in their own body,
such successors to serve until the next annual meeting of the stockholders.
If more than three (3) vacancies occur during any year, the remaining
directors may call a special meeting of stockholders to fill such additional
vacancies or the remaining directors may continue to act so long as a quorum
remains, but such directors, if less than a quorum, shall promptly call a
special meeting of the stockholders to fill such additional vacancy or
vacancies.
ARTICLE III.
OFFICERS
ELECTION AND REMOVAL
Section 1. The officer of the Company shall be elected to serve during
the pleasure of the Board of Directors, except that the Chairman, if any, and
the President shall be elected by the Board of Directors at its Annual Meeting
to serve for one year and until the election and qualification of their
successors; and the Board of Directors may at any time create additional
offices and define the duties thereof, or, with or without cause, abolish
offices and remove the incumbents therefrom.
NUMBER
*Section 2. The Board of Directors may elect a Chairman, an Executive
Vice President and shall elect a President; one or more Vice Presidents; an
Actuary, a General Counsel; a Secretary; a Treasurer; a Medical Director, and
such additional officers as it may in its discretion determine.
* Amended 12-21-84
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DUTIES OF CHAIRMAN
*Section 3. CHAIRMAN. The Chairman shall be responsible for making
recommendations concerning Company policy to the Board of Directors or the
Executive Committee. He shall preside at meetings of stockholders and the
Board of Directors. He shall be consulted on major policy decisions and shall
act in an advisory capacity in connection with the business of the
corporation, and shall perform such duties as may be specifically assigned to
him by the Board of Directors.
DUTIES OF PRESIDENT
*Section 4. PRESIDENT. The President shall be the chief executive
officer of the Company with general responsibility for the efficient,
profitable management of the Company, and for designating the duties, powers
and authority of all officers and employees of the Company. He shall be a
member of the Executive Committee. He shall have the authority to delegate
any of said duties as he may from time to time, in his discretion, determine.
In the absence of the Chairman, the President shall assume his duties.
In the event of the inability of the President to act, the Executive Vice
President, if any, otherwise the Vice President with the greatest seniority in
that office shall perform the duties and exercise the powers of the President
until some person is appointed by the Board of Directors or the Executive
Committee.
DUTIES OF EXECUTIVE VICE PRESIDENT
*Section 5. EXECUTIVE VICE PRESIDENT. The Executive Vice President, if
one is elected, shall assist the President, shall assume the President's
duties in his absence, and shall have specific accountability for the quality
of performance in those areas of the Company's operations which the President
shall determine. He shall have such additional responsibilities as may be
assigned by the Board of Directors or the President.
DUTIES OF VICE PRESIDENTS
Section 6. VICE PRESIDENTS. The Vice Presidents, one or more of whom
may be elected in the discretion of the Board of Directors, shall have such
duties as the Board of Directors or the President shall prescribe.
DUTIES OF SECRETARY
Section 7. SECRETARY. The Secretary shall take charge of and affix the
seal of the Company to all certificates of stock. He shall be present at all
meetings of the stockholders and of the Board of Directors, shall attend
meetings of the Executive Committee and other committees as requested, and
shall keep a true and accurate record of all meetings in books provided for
that purpose. He shall be the custodian of all the official corporate papers
of the Company except those of a financial nature. In the absence of the
Secretary, an Assistant Secretary shall be appointed by the President to
execute the foregoing duties. He shall perform such other assignments as may
be made by the Board of Directors or the President.
* Amended 12-21-84
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DUTIES OF THE TREASURER
Section 8. TREASURER. The Treasurer shall be accountable, jointly with
such other officer or officers as may be designated by the Board of Directors,
for the safekeeping of all monies and securities of the company, consistent
with the rules adopted by the board of Directors therefor. He shall keep a
complete record of all investments, mortgages and securities and shall attend
to the collection of payments and interest due thereon. It shall be his
responsibility to keep the Company's monies deposited in the name of the
Company unless the Board of Directors shall direct otherwise, and to control
the amount of bank balances in each depository of the Company, and he shall
have such other responsibilities as may be assigned by the Board of Directors
or the President.
DUTIES OF ACTUARY
Section 9. ACTUARY. The Actuary shall supervise and be responsible for
the routine duties of the Actuarial Department and shall have the general
duties of supervision and management usually vested in the office of Actuary
for a life insurance company and such additional responsibilities as may be
assigned by the Board of Directors or the President.
DUTIES OF GENERAL COUNSEL
Section 10. GENERAL COUNSEL. The General Counsel shall be accountable
for providing representation for the Company in all litigation, for promoting
legality of the Company's operations by providing legal advice to the Company,
its directors, officers and employees upon all matters pertaining to Company
affairs, and for conducting such reviews and investigations as may be needed
to measure and assure compliance. He shall have such additional
responsibilities as may be assigned by the Board of Directors or the
President.
DUTIES OF MEDICAL DIRECTOR
Section 11. MEDICAL DIRECTOR. The Medical Director, if one is elected,
shall be accountable for providing quality medical evaluations and advice to
aid in the underwriting of risks and settlement of claims, for the
qualification and appointment of local medical examiners as required, for
advising the officers and directors of the Company on medical matters, and for
such additional assignments as may be made by the Board of Directors or the
President.
DUTIES OF OTHER OFFICERS
Section 12. OTHER OFFICERS. The Other Officers, who may be elected in
such manner and with such titles as the Board if Directors may in its
discretion determine, shall have such duties as the Board of Directors or the
President shall prescribe.
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ARTICLE IV.
CAPITAL STOCK
CERTIFICATES
Section 1. The certificates of capital stock of the Company shall be
numbered in progression, and they shall exhibit the name or names of the
person or persons owning the shares represented thereby, the number of shares
for which they are issued, the name of the state in which the Company is
organized, the name of Company, and shall be signed by the President or a Vice
President and the Secretary or and Assistant Secretary under the corporate
seal of the Company.
TRANSFER
Section 2. Shares of capital stock of the Company may be transferred at
any time by the holder or by an attorney legally constituted or by a legal
representative of the holder. No transfer shall be valid except between the
parties thereto until entered in proper form on the books of the Company.
Surrendered certificates shall be canceled by the Secretary and shall be
placed in the certificate book opposite the memorandum of the issue of that
certificate before a new certificate shall be issued in lieu thereof.
ARTICLE V.
COMMITTEES
EXECUTIVE COMMITTEE
Section 1. There shall be an Executive Committee consisting of three or
more Directors, including the President, to be elected annually by the Board
of Directors.
The Executive Committee shall be responsible for officers' salary
administration and shall have and exercise the authority of the Board of
Directors in the management of the business of the Company in the interval
between meetings of the Board of Directors, provided, however, that the
Executive Committee shall not have the power to declare a dividend or to cause
to be issued any of the Company's authorized but unissued stock.
The Executive Committee may meet upon the call of the President or any
two members and a majority of the Committee shall constitute a quorum.
Any action which may be taken by the committee may be taken without a
meeting if done in writing signed by each member of the Committee.
Actions of the Executive Committee shall be recorded by the Secretary and
reported to the Board of Directors at its next meeting.
OTHER COMMITTEES
Section 2. Additional standing committees may be created as desired or
required for specific purposes at any time by action of the Board of
Directors.
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ARTICLE VI.
CORPORATE ACTIONS
DIVIDENDS
Section 1. The Board of Directors may declare dividends on the stock
issued and outstanding from any source as permitted by the laws of Minnesota.
LOANING COMPANY'S MONEYS
Section 2. The Company shall not loan any of its funds to any officer,
Director or member of any committee passing on investments.
BORROWING MONEY
Section 3. The Board of Directors may authorize its officers to negotiate
and borrow money with such limitations as the Board of Directors may from time
to time determine, and within such limitations, such duly authorized officers
may execute, in the name of the Company, its bonds, notes or other suitable
obligation therefore; and to secure the payment thereof, may mortgage its
income, rights or property, whether real, personal or both.
DEPOSITORIES
Section 4. All moneys, checks and evidences of money received by or
belonging to this Company shall be deposited to the credit of the company in
such banks or trust companies as may designated pursuant to authority of the
Board of Directors.
ARTICLE VII.
MISCELLANEOUS
FISCAL YEAR
Section 1. The fiscal year of the Company shall end at December 31 of
each year.
CORPORATE SEAL
Section 2. The corporate seal of this Company shall be a circular die,
around the edge of which shall appear the word, "Golden American Life
Insurance Company," and in the center of which shall appear the words
"Corporate Seal."
NOMINEES
Section 3. The Board of Directors may by resolution, if permitted under
the applicable laws of the State of Minnesota, authorize the establishment or
designation of a nominee or nominees for the purpose of registering securities
owned by the Company in the name of such nominee or nominees rather than in
the Company's name. Upon such establishment or designating shares of stock
and other securities owned by this Company may be registered in the name of
such nominee or nominees.
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OFFICERS' AND EMPLOYEES' BONDS
Section 4. The officers and the employees of the Company shall furnish
bonds for the faithful performance of their duties when so required, and in
the form as from time to time may be determined by the Board of Directors.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 6. The Company 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 the Company 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.
The Company may also, to the extent permitted by law, indemnify any other
person who is or was serving the Company 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.
The Company may purchase and maintain insurance on behalf of any such
person or persons to be indemnified under the provisions in the above
paragraphs, against any such liability to the extent permitted by law.
VOTING STOCK
Section 6. The President or the Treasurer, or a proxy appointed by
either of them, unless some other person or persons shall be appointed by the
Board of Directors, may vote shares in another corporation owned by the
Company.
EXECUTION OF DOCUMENTS
Section 7. All contracts, including policies of insurance issued by the
Company, shall be signed by the President or a Vice President and by the
Secretary or an Assistant Secretary. Both signatures may be facsimile,
engraved or printed if the contract is countersigned by a duly authorized
registrar, agent, officer or employee designated by the Board of Directors for
such purpose. The President, a Vice President or the Treasurer shall execute
the transfer and assignment of any and all securities owned by the Company.
AMENDMENTS
Section 8. These Bylaws may be amended by a majority vote of the
stockholders at their Annual Meeting, or at any other meeting called for that
purpose.
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I, David C. Storlie, Secretary of the Golden American Life Insurance Company
of St. Paul, Minnesota, do hereby certify that the foregoing Bylaws are a true
and correct copy of the Bylaws as of January 4, 1988.
GOLDEN AMERICAN LIFE INSURANCE COMPANY
/s/ David C. Storlie
--------------------
Dated: January 4, 1988
St. Paul, Minnesota
Subscribed and sworn to before me this
4th day of January, 1988.
/s/ Joanne F. Humpal
- --------------------
Notary Public
[GRAPHIC NOTARY STAMP: "Joanne F. Humpal
Notary Public, Ramsey County, Minn.
MY COMMISSION EXPIRES
December 30, 1989."]
EXHIBIT (6)(f)
(AS AMENDED 12/21/93)
BY-LAWS
OF
GOLDEN AMERICAN LIFE INSURANCE COMPANY
ARTICLE I
STOCKHOLDERS
Section 1.1. ANNUAL MEETINGS. An annual meeting of stockholders shall
be held for the election of directors at such date, time and place, either
within or without the State of Delaware, as may be designated by resolution of
the Board of Directors from time to time. Any other proper business may be
transacted at the annual meeting.
Section 1.2. SPECIAL MEETINGS. Special meetings of stockholders for any
purpose or purposes may be called at any time by the Board of Directors, or by
a committee of the Board of Directors that has been duly designated by the
Board of Directors and whose powers and authority, as expressly provided in a
resolution of the Board of Directors, include the power to call such meetings,
but such special meetings may not be called by any other person or persons.
Section 1.3. NOTICE OF MEETINGS. Whenever stockholders are required or
permitted to take any action at a meeting, a written notice of the meeting
shall be given that shall state the place, date and hour of the meeting and,
in the case of a special meeting, the purpose or purposes for which the
meeting is called. Unless otherwise provided by law, the certificate of
incorporation or these by-laws, the written notice of any meetings shall be
given not less than ten nor more than sixty days before the date of the
meeting to each stockholder entitled to vote at such meeting. If mailed, such
notice shall be deemed to be given when deposited in the United States mail,
postage prepaid, directed to the stockholder at his address as it appears on
the records of the corporation.
Section 1.4. ADJOURNMENTS. Any meetings of stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meetings at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business
which might have been transacted at the original meeting. If the adjournment
is for more than thirty days, or if after the adjournment a new record date is
fixed for the adjourned meeting, notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.
Section 1.5. QUORUM. Except as otherwise provided by law, the
certificate of incorporation or these by-laws, at each meeting of stockholders
the presence in person or by proxy of the holders of a majority in voting
power of the outstanding shares of stock entitled to vote at the meeting shall
be necessary and sufficient to constitute a quorum. In the absence of a
quorum, the stockholders so present may, by majority vote, adjourn the meeting
from time to time in the manner provided in Section 1.4 of these by-laws until
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a quorum shall attend. Shares of its own stock belonging to the corporation
or to another corporation, if a majority of the shares entitled to vote in the
election of directors of such other corporation is held, directly or
indirectly, by the corporation, shall neither be entitled to vote nor be
counted for quorum purposes; provided, however, that the foregoing shall not
limit the right of the corporation or any subsidiary of the corporation to
vote stock, including but not limited to its own stock, held by it in a
fiduciary capacity.
Section 1.6. ORGANIZATION. Meetings of stockholders shall be presided
over by the Chairman of the Board, if any, or in his absence by the Vice
Chairman of the Board, if any, or in his absence by the President, or in his
absence by a Vice President, or in the absence of the foregoing persons by a
chairman designated by the Board of Directors, or in the absence of such
designation by a chairman chosen at the meeting. The Secretary shall act as
secretary of the meeting, but in his absence the chairman of the meeting may
appoint any person to act as secretary of the meeting. The chairman of the
meeting shall announce at the meeting of stockholders the date and time of the
opening and the closing of the polls for each matter upon which the
stockholders will vote.
Section 1.7. VOTING: PROXIES. Except as otherwise provided by the
certificate of incorporation, each stockholder entitled to vote at any meeting
of stockholders shall be entitled to one vote for each share of stock held by
him which has voting power upon the matter in question. Each stockholder
entitled to vote at a meeting of stockholders or to express consent or dissent
to corporate action in writing without a meeting may authorize another person
or persons to act for him by proxy, but no such proxy shall be voted or acted
upon after three years from its date, unless the proxy provides for a longer
period. A proxy shall be irrevocable if it states that it is irrevocable and
if, and only as long as, it is coupled with an interest sufficient in law to
support an irrevocable power. A stockholder may revoke any proxy which is not
irrevocable by attending the meeting and voting in person or by filing an
instrument in writing revoking the proxy by delivering a proxy in accordance
with applicable law bearing a later date to the Secretary of the corporation.
Voting at meetings of stockholders need not be by written ballot. At all
meetings of stockholders for the election of directors a plurality of the
votes cast shall be sufficient to elect. All other elections and questions
shall, unless otherwise provided by law, the certificate of incorporation or
these by-laws, be decided by the affirmative vote of the holders of a majority
in voting power of the shares of stock which are present in person or by proxy
and entitled to vote thereon.
Section 1.8. FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD.
In order that the corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment
thereof, or to express consent to corporate action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution
or allotment of any rights, or entitled to exercise any rights in respect of
any change, conversion or exchange of stock or for the purpose of any other
lawful action, the Board of Directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the record date is
adopted by the Board of Directors, and which record date: (1) in the case of
determination of stockholders entitled to vote at any meeting of stockholders
or adjournment thereof, shall, unless otherwise required by law, not be more
than sixty nor less than ten days before the date of such meeting; (2) in the
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case of determination of stockholders entitled to express consent to corporate
action in writing without a meeting, shall not be more than ten days from the
date upon which the resolution fixing the record date is adopted by the Board
of Directors; and (3) in the case of any other action, shall not be more than
sixty days prior to such other action. If no record date is fixed: (1) the
record date of determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held; (2) the record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting, when nor prior
action of the Board of Directors is required by law, shall be the first date
ion which a signed written consent setting forth the action taken or proposed
to be taken is delivered to the corporation in accordance with applicable law,
or, if prior action by the Board of Directors is required by law, shall be at
the close of business on the day on which the Board of Directors adopts the
resolution taking such prior action; and (3) the record date for determine
stockholders for any other purpose shall be at the close of business on the
day on which the Board of Directors adopts the resolution relating thereto. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for
the adjourned meeting.
Section 1.9. LIST OF STOCKHOLDERS ENTITLED TO VOTE. The Secretary shall
prepare and make, at least ten days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or if not so
specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole
time thereof and may be inspected by any stockholder who is present. Upon the
willful neglect or refusal of the directors to produce such a list at any
meeting for the election of directors, they shall be ineligible for election
to any office at such meeting. Except as otherwise provided by law, the stock
ledger shall be the only evidence as to who are the stockholders entitled to
examine the stock ledger, the list of stockholders or the books of the
corporation, or to vote in person or by proxy at any meeting of stockholders.
Section 1.10. ACTION BY CONSENT OF STOCKHOLDERS. Unless otherwise
restricted by the certificate of incorporation, any action required or
permitted to be taken at any annual or special meeting of the stockholders may
be taken without a meeting, without prior notice and without a vote, if a
consent or consents in writing setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted
and shall be delivered (by hand or by certified or registered mail, return
receipt requested) to the corporation by delivery to its registered office in
the State of Delaware, its principal place of business, or an officer or agent
of the corporation having custody of the book in which proceedings of minutes
of stockholders are recorded. Prompt notice of the taking of the corporate
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action without a meeting by less than unanimous written consent shall be given
to those stockholders who have not consented in writing.
Section 1.11. INSPECTORS OF ELECTION. The corporation may, and shall if
required by law, in advance of any meeting of stockholders, appoint one or
more inspectors of election, who may be employees of the corporation, to act
at the meeting or any adjournment thereof and to make a written report
thereof. The corporation may designate one or more persons as alternate
inspectors to replace any inspector who fails to act. In the event that no
inspector so appointed or designated is able to act at a meeting of
stockholders, the person presiding at the meeting shall appoint one or more
inspectors to act at the meeting. Each inspector, before entering upon the
discharge of his or her duties, shall take and sign an oath to execute
faithfully the duties of inspector with strict impartiality and according to
the best of his or her ability. The inspector or inspectors so appointed or
designated shall (i) ascertain the number of shares of capital stock the
corporation outstanding and the voting power of each share, (ii) determine the
shares of capital stock of the corporation represented at the meeting and the
validity of proxies and ballots, (iii) count all votes and ballots, (iv)
determine and retain for a reasonable period a record of the disposition of
any challenges made to any determination by the inspectors, and (v) certify
their determination of the number of shares of capital stock of the
corporation represented at the meeting and such inspectors' count of all votes
and ballots. Such certification and report shall specify such other
information as may be required by law. In determining the validity and
counting of proxies and ballots cast at any meeting of stockholders of the
corporation, the inspectors may consider such information as is permitted by
applicable law. No person who is a candidate for an office at an election may
serve as an inspector at such election.
Section 1.12. CONDUCT OF MEETINGS. The Board of Directors of the
corporation may adopt by resolution such rules and regulations for the conduct
of the meeting of stockholders as it shall deem appropriate. Except to the
extent inconsistent with such rules and regulations as adopted by the Board of
Directors, the chairman of any meeting of stockholders shall have the right
and authority to prescribe such rules, regulations and procedures and to so
all such acts as, in the judgment of such chairman, are appropriate for the
proper conduct of the meeting. Such rules, regulations or procedures, whether
adopted by the Board of Directors or prescribed by the chairman of the
meeting, may include, without limitations, the following: (i) the
establishment of an agenda or order of business of the meeting; (ii) rules and
procedures for maintaining order at the meeting and the safety of those
present; (iii) limitations on attendance at or participation in the meeting to
stockholders of record of the corporation, their duly authorized and
constituted proxies or such other persons as the chairman of the meeting shall
determine; (iv) restrictions on entry to the meeting after the time fixed for
the commencement thereof; and (v) limitations on the time allotted to
questions or comment by participants. Unless and to the extent determined by
the Board of Directors or the chairman of the meeting, meetings of
stockholders shall not be required to be held in accordance with the rules of
parliamentary procedure.
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ARTICLE II
BOARD OF DIRECTORS
Section 2.1. NUMBER: QUALIFICATIONS. The Board of Directors shall
consist of not less than three (3) or more than twelve (12) members, the
number thereof to be determined from time to time by resolution of the Board
of Directors. Directors need not be stockholders.
Section 2.2. ELECTION: RESIGNATION; REMOVAL; VACANCIES. The Board of
Directors shall initially consist of the persons who were directors of the
corporation at the time of its redomestication to the State of Delaware, and
each such director shall hold office until the first annual meeting of
stockholders after such redomestication or until his successor is elected and
qualified. At each annual meeting of stockholders thereafter, the
stockholders shall elect directors each of whom shall hold office for a term
of one year or until his successor is elected and qualified. Any director may
resign at any time upon written notice to the corporation. Any newly created
directorship or any vacancy occurring in the Board of Directors for any cause
may be filled by a majority of the remaining member of the Board of Directors,
although such majority is less than a quorum, or by a plurality of the votes
cast at a meeting of stockholders, and each director so elected shall hold
office until the expiration of the term of office of the director whom he has
replaced or until his successor is elected and qualified.
Section 2.3. REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held at such places within or without the State of Delaware
and at such times as the Board of Directors may from time to time determine,
and if so determined notices thereof need not be given.
Section 2.4. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be held at any time or place within or without the State of
Delaware whenever called by the President, any Vice President, the Secretary,
or by any member of the Board of Directors. Notice of a special meeting of
the Board of Directors shall be given by the person or persons calling the
meeting at least twenty-four hours before the special meeting.
Section 2.5. TELEPHONIC MEETINGS PERMITTED. Members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting thereof by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
by-law shall constitute presence in person at such meeting.
Section 2.6. QUORUM: VOTE REQUIRED FOR ACTION. At all meetings of the
Board of Directors a majority of the whole Board of Directors shall constitute
a quorum for the transaction of business. Except in cases in which the
certificate of incorporation, these by-laws or applicable law otherwise
provides, the vote of a majority of the directors present at a meeting at
which a quorum is present shall be the act of the Board of Directors.
Section 2.7. ORGANIZATION. Meetings of the Board of Directors shall be
presided over by the Chairman of the Board, if any, or in his absence by the
Vice Chairman of the Board, if any, or in his absence by the President, or in
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their absence by a chairman chosen at the meeting. The Secretary shall act as
secretary of the meeting, but in his absence the chairman of the meeting may
appoint any person to act as secretary of the meeting.
Section 2.8. INFORMAL ACTION BY DIRECTORS. Unless otherwise restricted
by the certificate of incorporation or these by-laws, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board
of Directors or such committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board of Directors or such committee.
ARTICLE III
COMMITTEES
Section 3.1. COMMITTEES. The Board of Directors may, by resolution
passed by a majority of the whole Board of Directors, designate one or more
committees, each committee to consist of one or more of the directors of the
corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of
a member of the committee, the member or members thereof present at any
meeting and not disqualified from voting, whether or not he or they constitute
a quorum, may unanimously appoint another member of the Board of Directors to
act at the meeting in place of any such absent or disqualified member. Any
such committee, to the extent permitted by law and to the extent provided in
the resolution of the Board of Directors, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the
business and affairs of the corporation, and may authorize the seal of the
corporation to be affixed to all papers which may require it.
Section 3.2. COMMITTEE RULES. Unless the Board of Directors otherwise
provides, each committee designated by the Board of Directors may make, alter
and repeal rules for the conduct of its business. In the absence of such
rules each committee shall conduct its business in the same manner as the
Board of Directors conducts its business pursuant to Article II of these by-
laws.
ARTICLE IV
OFFICERS
Section 4.1. EXECUTIVE OFFICER: ELECTION; QUALIFICATIONS; TERM OF
OFFICE; RESIGNATION; REMOVAL; VACANCIES. The Board of Directors shall elect a
President and Secretary, and it may, if it so determines, choose a Chairman of
the Board and Vice Chairman of the Board from among its members. The Board of
Directors may also choose one or more Vice Presidents, one or more Assistant
Secretaries, a Treasurer and one or more Assistant Treasurers. Each such
officer shall hold office until the first meeting of the Board of Directors
after the annual meeting of stockholders next succeeding his election, and
until his successor is elected and qualified or until his earlier resignation
-6-
<PAGE>
<PAGE>
or removal. Any officer may resign at any time upon written notice to the
corporation. The Board of Directors may remove any officer with or without
cause at any time, but such removal shall be without prejudice to the
contractual rights of such officer, if any, with the corporation. Any number
of offices may be held by the same person. Any vacancy occurring in any
office of the corporation by death, resignation, removal or otherwise may be
filled for the unexpired portion of the term by the Board of Directors at any
regular or special meeting.
Section 4.2. POWERS AND DUTIES OF EXECUTIVE OFFICERS. The officers of
the corporation shall have such powers and duties in the management of the
corporation as may be prescribed in a resolution by the Board of Directors
and, to the extent not so provided, as generally pertain to their respective
offices, subject to the control of the Board of Directors. The Board of
Directors may require any officer, agent or employee to give security for the
faithful performance of his duties.
ARTICLE V
STOCK
Section 5.1. CERTIFICATES. Every holder of stock shall be entitled to
have a certificate signed by or in the name of the corporation by the Chairman
or Vice Chairman of the Board of Directors, if any, of the President or a Vice
President, and by the Treasurer or an Assistant Treasurer, or the Secretary or
an Assistant Secretary, of the corporation certifying the number of shares
owned by him in the corporation. Any of or all the signatures on the
certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the corporation with
the same effect as if he were such officer, transfer agent, or registrar at
the date of issue.
Section 5.2. LOST, STOLEN OR DESTROYED STOCK CERTIFICATES: ISSUANCE OF
NEW CERTIFICATES. The corporation may issue a new certificate of stock in he
place of any certificate theretofore issued by it, alleged to have been lost,
stolen or destroyed and the corporation may require the owner of the lost,
stolen or destroyed certificate, or his legal representative, to give the
corporation a bond sufficient to indemnify it against any claim that may be
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
ARTICLE VI
INDEMNIFICATION
Section 6.1. RIGHT TO INDEMNIFICATION. The corporation shall indemnify
and hold harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person who was or is made or
is threatened to be made a party or is otherwise involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative (a
"proceeding"), by reason of the fact that he, or a person for whom he is the
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<PAGE>
<PAGE>
legal representative, is or was a director or officer of the corporation or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust, enterprise or nonprofit entity, including service with respect to
employee benefit plans (an "indemnitee"), against all liability and loss
suffered and expenses (including attorneys' fees) reasonably incurred by such
indemnitee. The corporation shall be required to indemnify an indemnitee in
connection with a proceeding (or part thereof) initiated by such indemnitee
only if the initiation of such proceeding (or part thereof) by the indemnitee
was authorized by the Board of Directors of the corporation.
Section 6.2. PREPAYMENT OF EXPENSES. The corporation shall pay the
expenses (including attorney's fees) incurred by an indemnitee in defending
any proceeding in advance of its final disposition, PROVIDED, HOWEVER, that
the payment of expenses incurred by a director or officer in advance of the
final disposition of the proceeding shall be made only upon receipt of an
undertaking by the director or officer to repay all amounts advanced if it
should be ultimately determined that the director or officer is not entitled
to be indemnified under this Article or otherwise.
Section 6.3. CLAIMS. If a claim for indemnification or payment of
expenses under this Article is not paid in full within sixty days after a
written claim therefor by the indemnitee has been received by the corporation,
the indemnitee may file suit to recover the unpaid amount of such claim and,
if successful in whole or in part, shall be entitled to be paid the expenses
of prosecuting such claim. In any such action the corporation shall have the
burden of proving that the indemnitee was not entitled to the requested
indemnification or payment of expenses under applicable law.
Section 6.4. NONEXCLUSIVITY OF RIGHTS. The rights conferred on any
person by this Article VI shall not be exclusive of any other rights which
such person may have or hereafter acquire under any statute, provision of the
certificate of incorporation, these by-laws, agreement, vote of stockholders
or disinterested directors or otherwise.
Section 6.5. OTHER INDEMNIFICATION. The corporation's obligation, if
any, to indemnify any person who was or is serving at its request as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust, enterprise or nonprofit entity shall be reduced by any
amount such person may collect as indemnification from such other corporation,
partnership, joint venture, trust, enterprise or nonprofit enterprise.
Section 6.6. AMENDMENT OR REPEAL. Any repeal or modification of the
foregoing provisions of this Article VI shall not adversely affect any right
or protection hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification.
ARTICLE VII
MISCELLANEOUS
Section 7.1. FISCAL YEAR. The fiscal year of the corporation shall be
determined by resolution of the Board of Directors.
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<PAGE>
<PAGE>
Section 7.2. SEAL. The corporate seal shall have the name of the
corporation inscribed thereon and shall be in such form as may be approved
from time to time by the Board of Directors.
Section 7.3. WAIVER OF NOTICE OF MEETINGS OF STOCKHOLDERS, DIRECTORS AND
COMMITTEES. Any written waiver of notice, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at nor the purpose of any
regular or special meeting of the stockholders, directors, or members of a
committee of directors need be specified in any written waiver of notice.
Section 7.4. INTERESTED DIRECTORS: QUORUM. No contract or transaction
between the corporation and one or more of its directors or office, or between
the corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers, or have a
financial interest, shall be void or voidable solely for this reason, or
solely because the director or officer is present at or participates in the
meeting of the Board of Directors or committee thereof which authorizes the
contract or transaction, or solely because his or their votes are counted for
such purpose, if: (1) the material facts as to his relationship or interest
and as to the contract or transaction are disclosed or are know to the Board
of Directors or the committee, and the Board of Directors or committee in good
faith authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or (2) the material facts as to his
relationship or interest and as to the contract or transaction are disclosed
or are know to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the
stockholders; or (3) the contract or transaction is fair as to the corporation
as of the time it is authorized, approved or ratified, by the Board of
Directors, a committee thereof, or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting
of the Board of Directors or of a committee which authorizes the contract or
transaction.
Section 7.5. FORM OF RECORDS. Any records maintained by the corporation
in the regular course of its business, including its stock ledger, books of
account, and minute books, may be kept on, or be in the form of, punch cards,
magnetic tape, photographs, microphotographs, or any other information storage
device, provided that the records so kept can be converted into clearly
legible form within a reasonable time.
Section 7.6. AMENDMENT OF BY-LAWS. The by-laws may be altered or
repealed, and new by-laws made, by the Board of Directors, but the
stockholders may make additional by-laws and may alter and repeal any by-laws
whether adopted by them or otherwise.
-9-
EXHIBIT (6)(g)
NO. 000642
----------
STATE OF MINNESOTA
[GRAPHIC: STATE OF MINNESOTA CIRCULAR SEAL]
DEPARTMENT OF COMMERCE
THE UNDERSIGNED
COMMISSIONER OF COMMERCE
FOR THE STATE OF MINNESOTA
HEREBY CERTIFIES THAT
GOLDEN AMERICAN LIFE INSURANCE COMPANY
organized under the laws of MINNESOTA
has made application, paid the fees required and in all other respects
complied with the laws of the State of Minnesota and is hereby authorized to
transact the business of an insurance company for the lines of insurance
specified in Minnesota Statues, Section 60A. 06, Subdivision 1, Clause(s) 4
(INCLUDING VARIABLE CONTRACTS), 5A
unless this authority be suspended, revoked, or otherwise legally terminated.
This certificate shall be in effect until June 1, 1991.
IN TESTIMONY WHEREOF, I have hereunto
set my hand and affixed the official
seal of the Department of Commerce, of
the State of Minnesota at my office in
the City of St. Paul,
Minnesota, this FIRST day of JUNE,
1990
/S/ THOMAS H. B__MAN
--------------------
THOMAS H. B__MAN
Commissioner of Commerce
CM-00526-01
CHARTER LICENSE INSURANCE
<PAGE>
BYLAWS
OF
MB VARIABLE LIFE INSURANCE COMPANY
<PAGE>
MB VARIABLE LIFE INSURANCE COMPANY
INDEX
ARTICLE I.
STOCKHOLDERS
------------
Page
Sec. 1 Notice of Meetings 1
Sec. 2 Annual Stockholders' Meetings 1
Sec. 3 Special Stockholders' Meetings 2
Sec. 4 Quorum and Adjournments 2
Sec. 5 Form of Proxy 2
ARTICLE II.
BOARD OF DIRECTORS
------------------
Sec. 1 Authority and Duties of Directors 2
Sec. 2 Regular Meetings 3
Sec. 3 Annual Meetings 3
Sec. 4 Special Meetings 3
Sec. 5 Waiver of Notice of Special Meetings 3
Sec. 6 Action in Writing 4
Sec. 7 Quorum 4
Sec. 8 Vacancies 4
ARTICLE III.
OFFICERS
--------
Sec. 1 Election and Removal 4
Sec. 2 Number 4
Sec. 3 Duties of Chairman 5
Sec. 4 Duties of President 5
Sec. 5 Duties of Executive Vice President 5
Sec. 6 Duties of Vice Presidents 5
Sec. 7 Duties of Secretary 5
Sec. 8 Duties of Treasurer 6
Sec. 9 Duties of Actuary 6
Sec. 10 Duties of General Counsel 6
Sec. 11 Duties of Medical Director 6
Sec. 12 Duties of Other Officers 6
ARTICLE IV.
CAPITAL STOCK
-------------
Sec. 1 Certificates 7
Sec. 2 Transfer 7
ARTICLE V.
COMMITTEES
----------
Sec. 1 Executive Committee 7
Sec. 2 Other Committees 7
<PAGE>
ARTICLE VI.
CORPORATE ACTIONS
-----------------
Sec. 1 Dividends 8
Sec. 2 Loaning Company's Moneys 8
Sec. 3 Borrowing Money 8
Sec. 4 Depositories 8
ARTICLE VII.
MISCELLANEOUS
-------------
Sec. 1 Fiscal Year 8
Sec. 2 Corporate Seal 8
Sec. 3 Nominees 8
Sec. 4 Officers' and Employees' Bonds 9
Sec. 5 Indemnification of Directors and Officers 9
Sec. 6 Voting Stock 9
Sec. 7 Execution of Documents 9
Sec. 8 Amendments 9
<PAGE>
BYLAWS
OF
MB VARIABLE LIFE INSURANCE COMPANY
ARTICLE I.
STOCKHOLDERS
NOTICE OF MEETINGS
Section 1. Not less than fifteen (15) days prior to the time appointed
for the holding of any stockholders' meetings, a notice thereof shall be given
either in person or by mail addressed to each stockholder at his last known
address, over the signature of an officer of the Company. In the case of an
annual meeting, the said notice shall state that it is to be held for the
election of directors and the transaction of such other business as may come
before the meeting. In case of a special meeting of the stockholders, the
notice shall state generally the nature of the business to be considered.
Unless the Board of Directors shall otherwise determine, stockholders of
record on the date of mailing shall be entitled to notice of any meeting, and
stockholders of record on the date of any meeting shall be entitled to vote
thereat.
All business transacted at any meeting of the stockholders at which all
of the stockholders are present, or the holding of which shall have consented
to in writing or by telegraph shall be valid, though no previous notice of
such meeting be given.
ANNUAL STOCKHOLDERS' MEETINGS
*Section 2. The Annual Meeting of the Stockholders shall be held each
year at the office of the Company in the City of St. Paul, Minnesota, or at
such other place as may be designated by the Board of Directors, in accordance
with the Articles of Incorporation.
At said meeting the stockholders shall elect a Board of Directors
consisting of not less than five (5) nor more than twelve (12) members who
shall hold office for one year or until their successors are elected and
qualified. At such meeting there may be transacted any other business that
may be brought before it.
Should the annual election of directors not take place in any year on the
day hereinbefore fixed therefor, for any reason whatever, such election may be
held on such other day within six (6) months thereafter as may be appointed
therefor by the Board of Directors, they giving notice thereof as in the case
of the Annual Meeting.
* Amended 12-21-84
-1-
<PAGE>
SPECIAL STOCKHOLDERS' MEETINGS
Section 3. Special meetings of the stockholders may be held on call of
the Board of Directors with notice of said meeting being given in the same
manner as notice of an Annual Meeting.
QUORUM AND ADJOURNMENTS
Section 4. At all annual or special meetings of the stockholders, the
holders of a majority of the outstanding shares of the capital stock, whether
present in person or by proxy, shall constitute a quorum for the transaction
of business, but less than a majority may adjourn from time to time or sine
die.
FORM OF PROXY
Section 5. Any stockholder may be represented at any stockholders'
meeting by written proxy or power of attorney signed by the stockholder, and
filed with the Secretary of the Company at any time prior to the opening of
the meeting.
ARTICLE II.
BOARD OF DIRECTORS
AUTHORITY AND DUTIES OF DIRECTORS
*Section 1. The Board of Directors shall have authority and
responsibility for the general management of the corporation in all those
matters which are not reserved for action by the stockholders. Without
limiting the generality of the foregoing, the Board shall have specific
authority:
A. To call special meetings of the stockholders when they deem it
necessary, in the manner provided in these Bylaws.
B. To make rules and regulations not inconsistent with the law, the
Articles of Incorporation or the Bylaws of the Company.
C. To incur such indebtedness as may be deemed necessary and to
authorize the execution by the appropriate officers, in the name of
the Company, of any required evidence of such indebtedness.
It shall be the duty of the Board of Directors, without limiting the
generality of the forgoing:
A. To cause to be kept a complete record of all its meetings and acts,
and also all proceedings of the meetings of stockholders, and to
cause to be presented a full statement at the regular meetings of
the stockholders, showing in detail the assets and liabilities of
the Company and generally the condition of its affairs.
* Amended 12-21-84
-2-
<PAGE>
B. To require the Secretary and the Treasurer and their assistants to
keep full and accurate books and accounts and to prescribe the form
and mode of keeping such books.
C. To cause to be issued to the stockholders certificates of stock in
the proportion to their several interests, not to exceed in the
aggregate the authorized capital stock of the Company.
D. To cause the monies of the Company to be safely kept and to
determine the method of signing Company checks and orders for
transfer or withdrawal of the funds of this Company on deposit with
any bank in whatever form.
E. To reserve, allot, or set aside such a amount in excess of the
reserve required by law to be held and maintained as shall, in their
judgment, be for the best interests of the Company.
F. To adopt and exercise such plans and systems of insurance as they
may deem necessary for the best interests of the Company.
REGULAR MEETINGS
*Section 2. The Board of Directors shall meet from time to time without
notice at such places within or without the State of Minnesota, and at such
times and dates as the Board of Directors shall determine.
ANNUAL MEETINGS
Section 3. The Annual Meeting of the Board of Directors shall be held
immediately following the annual stockholders' meeting, and no notice thereof
shall be required.
SPECIAL MEETINGS
Section 4. Special meetings of the Board of Directors may be called by
the Chairman, the President, or any two (2) directors on written request to
the Secretary stating the object of the meeting. Notices of special meetings
of the Board of Directors, stating the time, date, place and object of the
meeting, shall be given to each director either in person or by telephone, or
by telegraph or mail addressed to each director's last known address at least
twenty-four (24) hours prior to the time of such meeting.
WAIVER OF NOTICE OF SPECIAL MEETINGS
Section 5. All business transacted at any special meeting at which all
of the directors are either present, or to the holding of which they shall
have consented in writing, or by telegraph, shall be valid, though no previous
notice of such meeting be given.
* Amended 12-21-84
-3-
<PAGE>
ACTION IN WRITING
Section 6. Any action which may be taken by the Board of Directors or
any committee thereof may be taken without a meeting if done in writing signed
by all members of the Board of Directors or Committee.
QUORUM
Section 7. A majority of the full Board of Directors shall constitute a
quorum for the transaction of business, but less than a majority may adjourn
from time to time or sine die. In case of adjournment to a subsequent sate
and hour, the Secretary shall give notice of the adjourned meeting in the
manner provided by Section 4 of this Article.
VACANCIES
*Section 8. The Board of Directors shall have the power to elect
successors to fill up to three(3) vacancies that may occur in their own body,
such successors to serve until the next annual meeting of the stockholders.
If more than three (3) vacancies occur during any year, the remaining
directors may call a special meeting of stockholders to fill such additional
vacancies or the remaining directors may continue to act so long as a quorum
remains, but such directors, if less than a quorum, shall promptly call a
special meeting of the stockholders to fill such additional vacancy or
vacancies.
ARTICLE III.
OFFICERS
ELECTION AND REMOVAL
Section 1. The officer of the Company shall be elected to serve during
the pleasure of the Board of Directors, except that the Chairman, if any, and
the President shall be elected by the Board of Directors at its Annual Meeting
to serve for one year and until the election and qualification of their
successors; and the Board of Directors may at any time create additional
offices and define the duties thereof, or, with or without cause, abolish
offices and remove the incumbents therefrom.
NUMBER
*Section 2. The Board of Directors may elect a Chairman, an Executive
Vice President and shall elect a President; one or more Vice Presidents; an
Actuary, a General Counsel; a Secretary; a Treasurer; a Medical Director, and
such additional officers as it may in its discretion determine.
* Amended 12-21-84
-4-
<PAGE>
DUTIES OF CHAIRMAN
*Section 3. CHAIRMAN. The Chairman shall be responsible for making
recommendations concerning Company policy to the Board of Directors or the
Executive Committee. He shall preside at meetings of stockholders and the
Board of Directors. He shall be consulted on major policy decisions and shall
act in an advisory capacity in connection with the business of the
corporation, and shall perform such duties as may be specifically assigned to
him by the Board of Directors.
DUTIES OF PRESIDENT
*Section 4. PRESIDENT. The President shall be the chief executive
officer of the Company with general responsibility for the efficient,
profitable management of the Company, and for designating the duties, powers
and authority of all officers and employees of the Company. He shall be a
member of the Executive Committee. He shall have the authority to delegate
any of said duties as he may from time to time, in his discretion, determine.
In the absence of the Chairman, the President shall assume his duties.
In the event of the inability of the President to act, the Executive Vice
President, if any, otherwise the Vice President with the greatest seniority in
that office shall perform the duties and exercise the powers of the President
until some person is appointed by the Board of Directors or the Executive
Committee.
DUTIES OF EXECUTIVE VICE PRESIDENT
*Section 5. EXECUTIVE VICE PRESIDENT. The Executive Vice President, if
one is elected, shall assist the President, shall assume the President's
duties in his absence, and shall have specific accountability for the quality
of performance in those areas of the Company's operations which the President
shall determine. He shall have such additional responsibilities as may be
assigned by the Board of Directors or the President.
DUTIES OF VICE PRESIDENTS
Section 6. VICE PRESIDENTS. The Vice Presidents, one or more of whom
may be elected in the discretion of the Board of Directors, shall have such
duties as the Board of Directors or the President shall prescribe.
DUTIES OF SECRETARY
Section 7. SECRETARY. The Secretary shall take charge of and affix the
seal of the Company to all certificates of stock. He shall be present at all
meetings of the stockholders and of the Board of Directors, shall attend
meetings of the Executive Committee and other committees as requested, and
shall keep a true and accurate record of all meetings in books provided for
that purpose. He shall be the custodian of all the official corporate papers
of the Company except those of a financial nature. In the absence of the
Secretary, an Assistant Secretary shall be appointed by the President to
execute the foregoing duties. He shall perform such other assignments as may
be made by the Board of Directors or the President.
* Amended 12-21-84
-5-
<PAGE>
DUTIES OF THE TREASURER
Section 8. TREASURER. The Treasurer shall be accountable, jointly with
such other officer or officers as may be designated by the Board of Directors,
for the safekeeping of all monies and securities of the company, consistent
with the rules adopted by the board of Directors therefor. He shall keep a
complete record of all investments, mortgages and securities and shall attend
to the collection of payments and interest due thereon. It shall be his
responsibility to keep the Company's monies deposited in the name of the
Company unless the Board of Directors shall direct otherwise, and to control
the amount of bank balances in each depository of the Company, and he shall
have such other responsibilities as may be assigned by the Board of Directors
or the President.
DUTIES OF ACTUARY
Section 9. ACTUARY. The Actuary shall supervise and be responsible for
the routine duties of the Actuarial Department and shall have the general
duties of supervision and management usually vested in the office of Actuary
for a life insurance company and such additional responsibilities as may be
assigned by the Board of Directors or the President.
DUTIES OF GENERAL COUNSEL
Section 10. GENERAL COUNSEL. The General Counsel shall be accountable
for providing representation for the Company in all litigation, for promoting
legality of the Company's operations by providing legal advice to the Company,
its directors, officers and employees upon all matters pertaining to Company
affairs, and for conducting such reviews and investigations as may be needed
to measure and assure compliance. He shall have such additional
responsibilities as may be assigned by the Board of Directors or the
President.
DUTIES OF MEDICAL DIRECTOR
Section 11. MEDICAL DIRECTOR. The Medical Director, if one is elected,
shall be accountable for providing quality medical evaluations and advice to
aid in the underwriting of risks and settlement of claims, for the
qualification and appointment of local medical examiners as required, for
advising the officers and directors of the Company on medical matters, and for
such additional assignments as may be made by the Board of Directors or the
President.
DUTIES OF OTHER OFFICERS
Section 12. OTHER OFFICERS. The Other Officers, who may be elected in
such manner and with such titles as the Board if Directors may in its
discretion determine, shall have such duties as the Board of Directors or the
President shall prescribe.
-6-
<PAGE>
ARTICLE IV.
CAPITAL STOCK
CERTIFICATES
Section 1. The certificates of capital stock of the Company shall be
numbered in progression, and they shall exhibit the name or names of the
person or persons owning the shares represented thereby, the number of shares
for which they are issued, the name of the state in which the Company is
organized, the name of Company, and shall be signed by the President or a Vice
President and the Secretary or and Assistant Secretary under the corporate
seal of the Company.
TRANSFER
Section 2. Shares of capital stock of the Company may be transferred at
any time by the holder or by an attorney legally constituted or by a legal
representative of the holder. No transfer shall be valid except between the
parties thereto until entered in proper form on the books of the Company.
Surrendered certificates shall be canceled by the Secretary and shall be
placed in the certificate book opposite the memorandum of the issue of that
certificate before a new certificate shall be issued in lieu thereof.
ARTICLE V.
COMMITTEES
EXECUTIVE COMMITTEE
Section 1. There shall be an Executive Committee consisting of three or
more Directors, including the President, to be elected annually by the Board
of Directors.
The Executive Committee shall be responsible for officers' salary
administration and shall have and exercise the authority of the Board of
Directors in the management of the business of the Company in the interval
between meetings of the Board of Directors, provided, however, that the
Executive Committee shall not have the power to declare a dividend or to cause
to be issued any of the Company's authorized but unissued stock.
The Executive Committee may meet upon the call of the President or any
two members and a majority of the Committee shall constitute a quorum.
Any action which may be taken by the committee may be taken without a
meeting if done in writing signed by each member of the Committee.
Actions of the Executive Committee shall be recorded by the Secretary and
reported to the Board of Directors at its next meeting.
OTHER COMMITTEES
Section 2. Additional standing committees may be created as desired or
required for specific purposes at any time by action of the Board of
Directors.
-7-
<PAGE>
ARTICLE VI.
CORPORATE ACTIONS
DIVIDENDS
Section 1. The Board of Directors may declare dividends on the stock
issued and outstanding from any source as permitted by the laws of Minnesota.
LOANING COMPANY'S MONEYS
Section 2. The Company shall not loan any of its funds to any officer,
Director or member of any committee passing on investments.
BORROWING MONEY
Section 3. The Board of Directors may authorize its officers to negotiate
and borrow money with such limitations as the Board of Directors may from time
to time determine, and within such limitations, such duly authorized officers
may execute, in the name of the Company, its bonds, notes or other suitable
obligation therefore; and to secure the payment thereof, may mortgage its
income, rights or property, whether real, personal or both.
DEPOSITORIES
Section 4. All moneys, checks and evidences of money received by or
belonging to this Company shall be deposited to the credit of the company in
such banks or trust companies as may designated pursuant to authority of the
Board of Directors.
ARTICLE VII.
MISCELLANEOUS
FISCAL YEAR
Section 1. The fiscal year of the Company shall end at December 31 of
each year.
CORPORATE SEAL
Section 2. The corporate seal of this Company shall be a circular die,
around the edge of which shall appear the word, "Golden American Life
Insurance Company," and in the center of which shall appear the words
"Corporate Seal."
NOMINEES
Section 3. The Board of Directors may by resolution, if permitted under
the applicable laws of the State of Minnesota, authorize the establishment or
designation of a nominee or nominees for the purpose of registering securities
owned by the Company in the name of such nominee or nominees rather than in
the Company's name. Upon such establishment or designating shares of stock
and other securities owned by this Company may be registered in the name of
such nominee or nominees.
-8-
<PAGE>
OFFICERS' AND EMPLOYEES' BONDS
Section 4. The officers and the employees of the Company shall furnish
bonds for the faithful performance of their duties when so required, and in
the form as from time to time may be determined by the Board of Directors.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 6. The Company 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 the Company 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.
The Company may also, to the extent permitted by law, indemnify any other
person who is or was serving the Company 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.
The Company may purchase and maintain insurance on behalf of any such
person or persons to be indemnified under the provisions in the above
paragraphs, against any such liability to the extent permitted by law.
VOTING STOCK
Section 6. The President or the Treasurer, or a proxy appointed by
either of them, unless some other person or persons shall be appointed by the
Board of Directors, may vote shares in another corporation owned by the
Company.
EXECUTION OF DOCUMENTS
Section 7. All contracts, including policies of insurance issued by the
Company, shall be signed by the President or a Vice President and by the
Secretary or an Assistant Secretary. Both signatures may be facsimile,
engraved or printed if the contract is countersigned by a duly authorized
registrar, agent, officer or employee designated by the Board of Directors for
such purpose. The President, a Vice President or the Treasurer shall execute
the transfer and assignment of any and all securities owned by the Company.
AMENDMENTS
Section 8. These Bylaws may be amended by a majority vote of the
stockholders at their Annual Meeting, or at any other meeting called for that
purpose.
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EXHIBIT (6)(h)
(AS AMENDED 12/21/93)
BY-LAWS
OF
GOLDEN AMERICAN LIFE INSURANCE COMPANY
ARTICLE I
STOCKHOLDERS
Section 1.1. ANNUAL MEETINGS. An annual meeting of stockholders shall
be held for the election of directors at such date, time and place, either
within or without the State of Delaware, as may be designated by resolution of
the Board of Directors from time to time. Any other proper business may be
transacted at the annual meeting.
Section 1.2. SPECIAL MEETINGS. Special meetings of stockholders for any
purpose or purposes may be called at any time by the Board of Directors, or by
a committee of the Board of Directors that has been duly designated by the
Board of Directors and whose powers and authority, as expressly provided in a
resolution of the Board of Directors, include the power to call such meetings,
but such special meetings may not be called by any other person or persons.
Section 1.3. NOTICE OF MEETINGS. Whenever stockholders are required or
permitted to take any action at a meeting, a written notice of the meeting
shall be given that shall state the place, date and hour of the meeting and,
in the case of a special meeting, the purpose or purposes for which the
meeting is called. Unless otherwise provided by law, the certificate of
incorporation or these by-laws, the written notice of any meetings shall be
given not less than ten nor more than sixty days before the date of the
meeting to each stockholder entitled to vote at such meeting. If mailed, such
notice shall be deemed to be given when deposited in the United States mail,
postage prepaid, directed to the stockholder at his address as it appears on
the records of the corporation.
Section 1.4. ADJOURNMENTS. Any meetings of stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meetings at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business
which might have been transacted at the original meeting. If the adjournment
is for more than thirty days, or if after the adjournment a new record date is
fixed for the adjourned meeting, notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.
Section 1.5. QUORUM. Except as otherwise provided by law, the
certificate of incorporation or these by-laws, at each meeting of stockholders
the presence in person or by proxy of the holders of a majority in voting
power of the outstanding shares of stock entitled to vote at the meeting shall
be necessary and sufficient to constitute a quorum. In the absence of a
quorum, the stockholders so present may, by majority vote, adjourn the meeting
from time to time in the manner provided in Section 1.4 of these by-laws until
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a quorum shall attend. Shares of its own stock belonging to the corporation
or to another corporation, if a majority of the shares entitled to vote in the
election of directors of such other corporation is held, directly or
indirectly, by the corporation, shall neither be entitled to vote nor be
counted for quorum purposes; provided, however, that the foregoing shall not
limit the right of the corporation or any subsidiary of the corporation to
vote stock, including but not limited to its own stock, held by it in a
fiduciary capacity.
Section 1.6. ORGANIZATION. Meetings of stockholders shall be presided
over by the Chairman of the Board, if any, or in his absence by the Vice
Chairman of the Board, if any, or in his absence by the President, or in his
absence by a Vice President, or in the absence of the foregoing persons by a
chairman designated by the Board of Directors, or in the absence of such
designation by a chairman chosen at the meeting. The Secretary shall act as
secretary of the meeting, but in his absence the chairman of the meeting may
appoint any person to act as secretary of the meeting. The chairman of the
meeting shall announce at the meeting of stockholders the date and time of the
opening and the closing of the polls for each matter upon which the
stockholders will vote.
Section 1.7. VOTING: PROXIES. Except as otherwise provided by the
certificate of incorporation, each stockholder entitled to vote at any meeting
of stockholders shall be entitled to one vote for each share of stock held by
him which has voting power upon the matter in question. Each stockholder
entitled to vote at a meeting of stockholders or to express consent or dissent
to corporate action in writing without a meeting may authorize another person
or persons to act for him by proxy, but no such proxy shall be voted or acted
upon after three years from its date, unless the proxy provides for a longer
period. A proxy shall be irrevocable if it states that it is irrevocable and
if, and only as long as, it is coupled with an interest sufficient in law to
support an irrevocable power. A stockholder may revoke any proxy which is not
irrevocable by attending the meeting and voting in person or by filing an
instrument in writing revoking the proxy by delivering a proxy in accordance
with applicable law bearing a later date to the Secretary of the corporation.
Voting at meetings of stockholders need not be by written ballot. At all
meetings of stockholders for the election of directors a plurality of the
votes cast shall be sufficient to elect. All other elections and questions
shall, unless otherwise provided by law, the certificate of incorporation or
these by-laws, be decided by the affirmative vote of the holders of a majority
in voting power of the shares of stock which are present in person or by proxy
and entitled to vote thereon.
Section 1.8. FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD.
In order that the corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment
thereof, or to express consent to corporate action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution
or allotment of any rights, or entitled to exercise any rights in respect of
any change, conversion or exchange of stock or for the purpose of any other
lawful action, the Board of Directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the record date is
adopted by the Board of Directors, and which record date: (1) in the case of
determination of stockholders entitled to vote at any meeting of stockholders
or adjournment thereof, shall, unless otherwise required by law, not be more
than sixty nor less than ten days before the date of such meeting; (2) in the
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case of determination of stockholders entitled to express consent to corporate
action in writing without a meeting, shall not be more than ten days from the
date upon which the resolution fixing the record date is adopted by the Board
of Directors; and (3) in the case of any other action, shall not be more than
sixty days prior to such other action. If no record date is fixed: (1) the
record date of determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held; (2) the record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting, when nor prior
action of the Board of Directors is required by law, shall be the first date
ion which a signed written consent setting forth the action taken or proposed
to be taken is delivered to the corporation in accordance with applicable law,
or, if prior action by the Board of Directors is required by law, shall be at
the close of business on the day on which the Board of Directors adopts the
resolution taking such prior action; and (3) the record date for determine
stockholders for any other purpose shall be at the close of business on the
day on which the Board of Directors adopts the resolution relating thereto. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for
the adjourned meeting.
Section 1.9. LIST OF STOCKHOLDERS ENTITLED TO VOTE. The Secretary shall
prepare and make, at least ten days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or if not so
specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole
time thereof and may be inspected by any stockholder who is present. Upon the
willful neglect or refusal of the directors to produce such a list at any
meeting for the election of directors, they shall be ineligible for election
to any office at such meeting. Except as otherwise provided by law, the stock
ledger shall be the only evidence as to who are the stockholders entitled to
examine the stock ledger, the list of stockholders or the books of the
corporation, or to vote in person or by proxy at any meeting of stockholders.
Section 1.10. ACTION BY CONSENT OF STOCKHOLDERS. Unless otherwise
restricted by the certificate of incorporation, any action required or
permitted to be taken at any annual or special meeting of the stockholders may
be taken without a meeting, without prior notice and without a vote, if a
consent or consents in writing setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted
and shall be delivered (by hand or by certified or registered mail, return
receipt requested) to the corporation by delivery to its registered office in
the State of Delaware, its principal place of business, or an officer or agent
of the corporation having custody of the book in which proceedings of minutes
of stockholders are recorded. Prompt notice of the taking of the corporate
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action without a meeting by less than unanimous written consent shall be given
to those stockholders who have not consented in writing.
Section 1.11. INSPECTORS OF ELECTION. The corporation may, and shall if
required by law, in advance of any meeting of stockholders, appoint one or
more inspectors of election, who may be employees of the corporation, to act
at the meeting or any adjournment thereof and to make a written report
thereof. The corporation may designate one or more persons as alternate
inspectors to replace any inspector who fails to act. In the event that no
inspector so appointed or designated is able to act at a meeting of
stockholders, the person presiding at the meeting shall appoint one or more
inspectors to act at the meeting. Each inspector, before entering upon the
discharge of his or her duties, shall take and sign an oath to execute
faithfully the duties of inspector with strict impartiality and according to
the best of his or her ability. The inspector or inspectors so appointed or
designated shall (i) ascertain the number of shares of capital stock the
corporation outstanding and the voting power of each share, (ii) determine the
shares of capital stock of the corporation represented at the meeting and the
validity of proxies and ballots, (iii) count all votes and ballots, (iv)
determine and retain for a reasonable period a record of the disposition of
any challenges made to any determination by the inspectors, and (v) certify
their determination of the number of shares of capital stock of the
corporation represented at the meeting and such inspectors' count of all votes
and ballots. Such certification and report shall specify such other
information as may be required by law. In determining the validity and
counting of proxies and ballots cast at any meeting of stockholders of the
corporation, the inspectors may consider such information as is permitted by
applicable law. No person who is a candidate for an office at an election may
serve as an inspector at such election.
Section 1.12. CONDUCT OF MEETINGS. The Board of Directors of the
corporation may adopt by resolution such rules and regulations for the conduct
of the meeting of stockholders as it shall deem appropriate. Except to the
extent inconsistent with such rules and regulations as adopted by the Board of
Directors, the chairman of any meeting of stockholders shall have the right
and authority to prescribe such rules, regulations and procedures and to so
all such acts as, in the judgment of such chairman, are appropriate for the
proper conduct of the meeting. Such rules, regulations or procedures, whether
adopted by the Board of Directors or prescribed by the chairman of the
meeting, may include, without limitations, the following: (i) the
establishment of an agenda or order of business of the meeting; (ii) rules and
procedures for maintaining order at the meeting and the safety of those
present; (iii) limitations on attendance at or participation in the meeting to
stockholders of record of the corporation, their duly authorized and
constituted proxies or such other persons as the chairman of the meeting shall
determine; (iv) restrictions on entry to the meeting after the time fixed for
the commencement thereof; and (v) limitations on the time allotted to
questions or comment by participants. Unless and to the extent determined by
the Board of Directors or the chairman of the meeting, meetings of
stockholders shall not be required to be held in accordance with the rules of
parliamentary procedure.
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ARTICLE II
BOARD OF DIRECTORS
Section 2.1. NUMBER: QUALIFICATIONS. The Board of Directors shall
consist of not less than three (3) or more than twelve (12) members, the
number thereof to be determined from time to time by resolution of the Board
of Directors. Directors need not be stockholders.
Section 2.2. ELECTION: RESIGNATION; REMOVAL; VACANCIES. The Board of
Directors shall initially consist of the persons who were directors of the
corporation at the time of its redomestication to the State of Delaware, and
each such director shall hold office until the first annual meeting of
stockholders after such redomestication or until his successor is elected and
qualified. At each annual meeting of stockholders thereafter, the
stockholders shall elect directors each of whom shall hold office for a term
of one year or until his successor is elected and qualified. Any director may
resign at any time upon written notice to the corporation. Any newly created
directorship or any vacancy occurring in the Board of Directors for any cause
may be filled by a majority of the remaining member of the Board of Directors,
although such majority is less than a quorum, or by a plurality of the votes
cast at a meeting of stockholders, and each director so elected shall hold
office until the expiration of the term of office of the director whom he has
replaced or until his successor is elected and qualified.
Section 2.3. REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held at such places within or without the State of Delaware
and at such times as the Board of Directors may from time to time determine,
and if so determined notices thereof need not be given.
Section 2.4. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be held at any time or place within or without the State of
Delaware whenever called by the President, any Vice President, the Secretary,
or by any member of the Board of Directors. Notice of a special meeting of
the Board of Directors shall be given by the person or persons calling the
meeting at least twenty-four hours before the special meeting.
Section 2.5. TELEPHONIC MEETINGS PERMITTED. Members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting thereof by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
by-law shall constitute presence in person at such meeting.
Section 2.6. QUORUM: VOTE REQUIRED FOR ACTION. At all meetings of the
Board of Directors a majority of the whole Board of Directors shall constitute
a quorum for the transaction of business. Except in cases in which the
certificate of incorporation, these by-laws or applicable law otherwise
provides, the vote of a majority of the directors present at a meeting at
which a quorum is present shall be the act of the Board of Directors.
Section 2.7. ORGANIZATION. Meetings of the Board of Directors shall be
presided over by the Chairman of the Board, if any, or in his absence by the
Vice Chairman of the Board, if any, or in his absence by the President, or in
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their absence by a chairman chosen at the meeting. The Secretary shall act as
secretary of the meeting, but in his absence the chairman of the meeting may
appoint any person to act as secretary of the meeting.
Section 2.8. INFORMAL ACTION BY DIRECTORS. Unless otherwise restricted
by the certificate of incorporation or these by-laws, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board
of Directors or such committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board of Directors or such committee.
ARTICLE III
COMMITTEES
Section 3.1. COMMITTEES. The Board of Directors may, by resolution
passed by a majority of the whole Board of Directors, designate one or more
committees, each committee to consist of one or more of the directors of the
corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of
a member of the committee, the member or members thereof present at any
meeting and not disqualified from voting, whether or not he or they constitute
a quorum, may unanimously appoint another member of the Board of Directors to
act at the meeting in place of any such absent or disqualified member. Any
such committee, to the extent permitted by law and to the extent provided in
the resolution of the Board of Directors, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the
business and affairs of the corporation, and may authorize the seal of the
corporation to be affixed to all papers which may require it.
Section 3.2. COMMITTEE RULES. Unless the Board of Directors otherwise
provides, each committee designated by the Board of Directors may make, alter
and repeal rules for the conduct of its business. In the absence of such
rules each committee shall conduct its business in the same manner as the
Board of Directors conducts its business pursuant to Article II of these by-
laws.
ARTICLE IV
OFFICERS
Section 4.1. EXECUTIVE OFFICER: ELECTION; QUALIFICATIONS; TERM OF
OFFICE; RESIGNATION; REMOVAL; VACANCIES. The Board of Directors shall elect a
President and Secretary, and it may, if it so determines, choose a Chairman of
the Board and Vice Chairman of the Board from among its members. The Board of
Directors may also choose one or more Vice Presidents, one or more Assistant
Secretaries, a Treasurer and one or more Assistant Treasurers. Each such
officer shall hold office until the first meeting of the Board of Directors
after the annual meeting of stockholders next succeeding his election, and
until his successor is elected and qualified or until his earlier resignation
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or removal. Any officer may resign at any time upon written notice to the
corporation. The Board of Directors may remove any officer with or without
cause at any time, but such removal shall be without prejudice to the
contractual rights of such officer, if any, with the corporation. Any number
of offices may be held by the same person. Any vacancy occurring in any
office of the corporation by death, resignation, removal or otherwise may be
filled for the unexpired portion of the term by the Board of Directors at any
regular or special meeting.
Section 4.2. POWERS AND DUTIES OF EXECUTIVE OFFICERS. The officers of
the corporation shall have such powers and duties in the management of the
corporation as may be prescribed in a resolution by the Board of Directors
and, to the extent not so provided, as generally pertain to their respective
offices, subject to the control of the Board of Directors. The Board of
Directors may require any officer, agent or employee to give security for the
faithful performance of his duties.
ARTICLE V
STOCK
Section 5.1. CERTIFICATES. Every holder of stock shall be entitled to
have a certificate signed by or in the name of the corporation by the Chairman
or Vice Chairman of the Board of Directors, if any, of the President or a Vice
President, and by the Treasurer or an Assistant Treasurer, or the Secretary or
an Assistant Secretary, of the corporation certifying the number of shares
owned by him in the corporation. Any of or all the signatures on the
certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the corporation with
the same effect as if he were such officer, transfer agent, or registrar at
the date of issue.
Section 5.2. LOST, STOLEN OR DESTROYED STOCK CERTIFICATES: ISSUANCE OF
NEW CERTIFICATES. The corporation may issue a new certificate of stock in he
place of any certificate theretofore issued by it, alleged to have been lost,
stolen or destroyed and the corporation may require the owner of the lost,
stolen or destroyed certificate, or his legal representative, to give the
corporation a bond sufficient to indemnify it against any claim that may be
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
ARTICLE VI
INDEMNIFICATION
Section 6.1. RIGHT TO INDEMNIFICATION. The corporation shall indemnify
and hold harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person who was or is made or
is threatened to be made a party or is otherwise involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative (a
"proceeding"), by reason of the fact that he, or a person for whom he is the
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legal representative, is or was a director or officer of the corporation or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust, enterprise or nonprofit entity, including service with respect to
employee benefit plans (an "indemnitee"), against all liability and loss
suffered and expenses (including attorneys' fees) reasonably incurred by such
indemnitee. The corporation shall be required to indemnify an indemnitee in
connection with a proceeding (or part thereof) initiated by such indemnitee
only if the initiation of such proceeding (or part thereof) by the indemnitee
was authorized by the Board of Directors of the corporation.
Section 6.2. PREPAYMENT OF EXPENSES. The corporation shall pay the
expenses (including attorney's fees) incurred by an indemnitee in defending
any proceeding in advance of its final disposition, PROVIDED, HOWEVER, that
the payment of expenses incurred by a director or officer in advance of the
final disposition of the proceeding shall be made only upon receipt of an
undertaking by the director or officer to repay all amounts advanced if it
should be ultimately determined that the director or officer is not entitled
to be indemnified under this Article or otherwise.
Section 6.3. CLAIMS. If a claim for indemnification or payment of
expenses under this Article is not paid in full within sixty days after a
written claim therefor by the indemnitee has been received by the corporation,
the indemnitee may file suit to recover the unpaid amount of such claim and,
if successful in whole or in part, shall be entitled to be paid the expenses
of prosecuting such claim. In any such action the corporation shall have the
burden of proving that the indemnitee was not entitled to the requested
indemnification or payment of expenses under applicable law.
Section 6.4. NONEXCLUSIVITY OF RIGHTS. The rights conferred on any
person by this Article VI shall not be exclusive of any other rights which
such person may have or hereafter acquire under any statute, provision of the
certificate of incorporation, these by-laws, agreement, vote of stockholders
or disinterested directors or otherwise.
Section 6.5. OTHER INDEMNIFICATION. The corporation's obligation, if
any, to indemnify any person who was or is serving at its request as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust, enterprise or nonprofit entity shall be reduced by any
amount such person may collect as indemnification from such other corporation,
partnership, joint venture, trust, enterprise or nonprofit enterprise.
Section 6.6. AMENDMENT OR REPEAL. Any repeal or modification of the
foregoing provisions of this Article VI shall not adversely affect any right
or protection hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification.
ARTICLE VII
MISCELLANEOUS
Section 7.1. FISCAL YEAR. The fiscal year of the corporation shall be
determined by resolution of the Board of Directors.
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Section 7.2. SEAL. The corporate seal shall have the name of the
corporation inscribed thereon and shall be in such form as may be approved
from time to time by the Board of Directors.
Section 7.3. WAIVER OF NOTICE OF MEETINGS OF STOCKHOLDERS, DIRECTORS AND
COMMITTEES. Any written waiver of notice, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at nor the purpose of any
regular or special meeting of the stockholders, directors, or members of a
committee of directors need be specified in any written waiver of notice.
Section 7.4. INTERESTED DIRECTORS: QUORUM. No contract or transaction
between the corporation and one or more of its directors or office, or between
the corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers, or have a
financial interest, shall be void or voidable solely for this reason, or
solely because the director or officer is present at or participates in the
meeting of the Board of Directors or committee thereof which authorizes the
contract or transaction, or solely because his or their votes are counted for
such purpose, if: (1) the material facts as to his relationship or interest
and as to the contract or transaction are disclosed or are know to the Board
of Directors or the committee, and the Board of Directors or committee in good
faith authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or (2) the material facts as to his
relationship or interest and as to the contract or transaction are disclosed
or are know to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the
stockholders; or (3) the contract or transaction is fair as to the corporation
as of the time it is authorized, approved or ratified, by the Board of
Directors, a committee thereof, or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting
of the Board of Directors or of a committee which authorizes the contract or
transaction.
Section 7.5. FORM OF RECORDS. Any records maintained by the corporation
in the regular course of its business, including its stock ledger, books of
account, and minute books, may be kept on, or be in the form of, punch cards,
magnetic tape, photographs, microphotographs, or any other information storage
device, provided that the records so kept can be converted into clearly
legible form within a reasonable time.
Section 7.6. AMENDMENT OF BY-LAWS. The by-laws may be altered or
repealed, and new by-laws made, by the Board of Directors, but the
stockholders may make additional by-laws and may alter and repeal any by-laws
whether adopted by them or otherwise.
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EXHIBIT (10)(a)
GOLDEN AMERICAN LIFE INSURANCE COMPANY VARIABLE LIFE INSURANCE
Golden American Life Insurance Company is a
stock company domiciled in Wilmington, Delaware
APPLICATION/ENROLLMENT FORM - PART I
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1.COVERAGE
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a)/ /Single Life c)/ /GOLDENSELECT Genesis I e)/ /Other
b)/ /Survivorship d)/ /GOLDENSELECT Genesis Flex
- --------------------------------------------------------------------------
2.PREMIUM
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a) Specific Face Amount $____ or b) Number of Years for Payments______
(Provide both from your illustration or enter only one and Golden
American will compute the other.)
c) Initial/Planned Modal Premium $________
d) Frequency of Payments / /Monthly (Preauthorized Check Only)
/ /Semiannually (Preauthorized Check Only)
/ /Quarterly (Preauthorized Check Only)
/ /Annually
e) Indicate Initial Payment $_______ / /Wired or / /Enclosed (Make
check payable to Golden American Life Ins. Co.)
f) Is this a 1035 Exchange? / /Yes / /No Is there an outstanding loan
with this Exchange? / /Yes / /No
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3.INSURED
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a)Name b)Male Female Soc. Sec. # or Tax ID.#
/ / / / - -
- ---------------------------------------------------------------------------
d)Permanent Address e)Occupation/Duties
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f)City State Zip g)Date & Place of Birth h)Height Weight
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4.JOINT INSURED (Complete if you checked survivorship)
- ---------------------------------------------------------------------------
a)Name b)Male Female Soc. Sec. # or Tax ID.#
/ / / / - -
- ---------------------------------------------------------------------------
d)Permanent Address e)Occupation/Duties
- ---------------------------------------------------------------------------
f)City State Zip g)Date & Place h)Height Weight i)Relation
of Birth to Insured
- ---------------------------------------------------------------------------
5.OWNER(S) (if other than insured)
- --------------------------------------------------------------------------
a)Name b)Male Female Soc. Sec. # or Tax ID.#
/ / / / - -
- ---------------------------------------------------------------------------
d)Permanent Address e)Phone
( )
- ---------------------------------------------------------------------------
f)City State Zip g)Date of Birth h)Relation
to Insured
- ---------------------------------------------------------------------------
6.CONTINGENT OWNER (Optional)
- ---------------------------------------------------------------------------
Name Address Relation
to Insured
- ---------------------------------------------------------------------------
7.PRIMARY BENEFICIARIES (Indicate Percentages)
- ---------------------------------------------------------------------------
Name % Address Relation
to Insured
- ---------------------------------------------------------------------------
Name % Address Relation
to Insured
- ---------------------------------------------------------------------------
8.CONTINGENT BENEFICIAR(IES) (List additional Contigent Beneficiaries
on the back)
- ---------------------------------------------------------------------------
Name % Address Relation
to Insured
- ---------------------------------------------------------------------------
Name % Address Relation
to Insured
- ---------------------------------------------------------------------------
GOLDEN AMERICAN LIFE INSURANCE COMPANY, CUSTOMER SERVICE CENTER,
PO Box 8794, Wilmington, DE 19899-8794
GA-A/EL-1024-2/97
<PAGE>
- ---------------------------------------------------------------------------
9.HOW CAN WE BEST CONTACT YOU? (if needed)
- ---------------------------------------------------------------------------
a) INSURED b)JOINT INSURED (if applicable)
- ---------------------------------------------------------------------------
Home Telephone: ( ) Home Telephone: ( )
- ---------------------------------------------------------------------------
Business Telephone: ( ) Business Telephone: ( )
- ---------------------------------------------------------------------------
Best Days: ____ Best Times:____ Best Days: ____ Best Times:____
Most Convenient Place to Call Most Convenient Place to Call
/ /Business / /Home / /Business / /Home
- ---------------------------------------------------------------------------
10.ALLOCATION INSTRUCTIONS
- ---------------------------------------------------------------------------
(A)ALLOCATION INSTRUCTIONS FOR INVESTMENT VALUE AFTER THE FREE LOOK PERIOD
Fill in allocation percentages in INITIAL column below. Your initial
premium is allocated to the General Account during the underwriting
process and to the Liquid Asset Division during the free look period. See
the prospectus for details.
(B)DOLLAR COST AVERAGING (DCA): Optional. Please check box to elect./ /
Amount of Monthly Transfer $____________________________ (minimum $250)
Division Transferred From:
(Minimum of $10,000 must be allocated to the division checked.)
/ / Limited Maturity Bond Division / / Liquid Asset Division
/ / 1-Year Fixed Allocation
Divisions Transferred To: Fill in percentage for allocation of DCA
below [(see (B) DCA].
- -----------------------------------------------------------------------------
ACCOUNT DIVISION INVESTMENT ADVISER (A)INITIAL (B) DCA
- -----------------------------------------------------------------------------
RESEARCH MASSACHUSETTS FINANCIAL SERVICES % %
COMPANY (MFS)
OTC MASSACHUSETTS FINANCIAL SERVICES % %
COMPANY (MFS)
TOTAL RETURN MASSACHUSETTS FINANCIAL SERVICES % %
COMPANY (MFS)
SMALL CAP FRED ALGER MANAGEMENT, INC. % %
GROWTH & INCOME ROBERTSON, STEPHENS & COMPANY
INVESTMENT MGMT, L.P. % %
VALUE + GROWTH ROBERTSON, STEPHENS & COMPANY
INVESTMENT MGMT, L.P. % %
ALL-GROWTH PILGRIM BAXTER & ASSOCIATES, LTD. % %
FULLY MANAGED T. ROWE PRICE ASSOCIATES, INC. % %
STRATEGIC EQUITY ZWEIG ADVISORS INC. % %
MULTIPLE ALLOCATION ZWEIG ADVISORS INC. % %
RISING DIVIDENDS KAYNE ANDERSON INVESTMENT
MANAGEMENT, L.P. % %
CAPITAL APPRECIATION CHANCELLOR LGT ASSET MANAGEMENT, INC. % %
VALUE EQUITY EAGLE ASSET MANAGEMENT, INC. % %
MANAGED GLOBAL PUTNAM INVESTMENT MANAGEMENT, INC. % %
EMERGING MARKETS PUTNAM INVESTMENT MANAGEMENT, INC. % %
HARD ASSETS VAN ECK ASSOCIATES CORPORATION % %
REAL ESTATE E.I.I. REALTY SECURITIES, INC. % %
LIMITED MATURITY BOND EQUITABLE INVESTMENT SERVICES, INC. % %
LIQUID ASSET EQUITABLE INVESTMENT SERVICES, INC. % %
FIXED INTEREST
DIVISION 1-YEAR % %
TOTAL 100% 100%
- ---------------------------------------------------------------------------
11.OPTIONAL SYSTEMATIC PARTIAL WITHDRAWALS (GOLDENSELECT GENESIS I ONLY)
- ---------------------------------------------------------------------------
If you want to receive Systematic Partial Withdrawals, your request
must be received in writing. For the appropriate form, please call our
Customer Service Center: 1-800-366-0066.
- --------------------------------------------------------------------------
12.TELEPHONE REALLOCATION AUTHORIZATION _________ Proposed Owner's Initials
- ---------------------------------------------------------------------------
I authorize Golden American Life Insurance Company ("Golden American")
to act upon reallocation instructions
given by telephone from _______________ (name of your registered
representative) upon furnishing his/her social security number.
Neither Golden American nor any person authorized by Golden American
will be responsible for any claim, loss, liability or expense in
connection with reallocation instructions received by telephone from
such person if Golden American or such other person acted on such
telephone instructions 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 policy
was purchased or until such time that I notify Golden American
otherwise in writing.
- ---------------------------------------------------------------------------
GOLDEN AMERICAN LIFE INSURANCE COMPANY, CUSTOMER SERVICE CENTER,
PO Box 8794, Wilmington, DE 19899-8794
GA-A/EL-1024-2/97
<PAGE>
- ---------------------------------------------------------------------------
13.PLEASE ANSWER THE FOLLOWING QUESTIONS.
- ---------------------------------------------------------------------------
Will the life insurance applied for replace or change any existing
annuity or life insurance on the life of the insured(s)?
/ /Yes / /No (If yes, please list policies, companies and amounts in
section 14).
If we are unable to issue life insurance, do you wish to apply for an
annuity? / /Yes / /No
- ---------------------------------------------------------------------------
14.PLEASE COMPLETE THE FOLLOWING INFORMATION.
(When answering yes, please explain.)
- ---------------------------------------------------------------------------
IN THE PAST TEN YEARS, HAVE YOU:
a)been refused life insurance or been asked to pay extra premiums?
Proposed Insured Proposed Joint Insured
/ /Yes / /No / /Yes / /No
------------------------------------------------------------------
b)had or been treated for cancer, diabetes, heart attack, chest pain,
stroke, central nervous system disorder, muscular disorder
respiratory disorder or hypertension?
Proposed Insured Proposed Joint Insured
/ /Yes / /No / /Yes / /No
------------------------------------------------------------------
c)had or been treated for a nervous or psychological disorder, epilepsy,
emphysema, kidney disorder, liver disorder or had or been advised to
have treatment for alcohol or drug abuse?
Proposed Insured Proposed Joint Insured
/ /Yes / /No / /Yes / /No
------------------------------------------------------------------
d)been diagnosed or treated by a member of the medical profession for
AIDS (Acquired Immune Deficiency Syndrome), the AIDS virus also known
as the Human Immunodeficiency Virus (HIV), AIDS-Related Complex (ARC),
or other disorder of the immune system?
Proposed Insured Proposed Joint Insured
/ /Yes / /No / /Yes / /No
------------------------------------------------------------------
15.In the past twelve months, have you smoked cigarettes, cigars or pipes,
or used chewing tobacco? (If yes, specify the product.)
Proposed Insured Proposed Joint Insured
/ /Yes / /No / /Yes / /No
- ---------------------------------------------------------------------------
16.REMARKS
- ---------------------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
- ---------------------------------------------------------------------------
GOLDEN AMERICAN LIFE INSURANCE COMPANY, CUSTOMER SERVICE CENTER,
PO Box 8794, Wilmington, DE 19899-8794
GA-A/EL-1024-2/97
<PAGE>
- ---------------------------------------------------------------------------
17. AUTHORIZATION TO RELEASE INFORMATION
- ---------------------------------------------------------------------------
I authorize any physician, hospital or other medical practitioner or
facility, insurance company, Medical Information Bureau, or any other
organization, institution or person that has any information about my
health or any non-medical information relevant to my insurability or that
of my minor children who are to be insured, to release such information to
Golden American Life Insurance Company ("Golden American"), its underwriters
and its reinsurers. I also authorize Golden American to obtain investigative
consumer reports, if appropriate.
I understand that the information that I authorize Golden American to
obtain will be used by Golden American to help determine my insurability or
my eiligibility for benefits under an existing policy.
I authorize Golden American to release information about my insurability
to its reinsurers, my Agent, and to the Medical Information Bureau, all as
described in Golden American's Notice of Insurance Information Practices, or
to the persons or businesses performing business or legal sevices in
connection with my insurance request or claim for benefits, or as may be
otherwise lawfully required or as I may further authorize.
I understand that I have a right to learn the content and receive a copy
of any report of information about me. This authorization is valid for 26
months from the date signed and a photographic copy is as valid as the
original. I have a right to ask for and receive a true copy of this
Authorization signed by me. I acknowledge receipt of the Fair Credit
Reporting Act and Medical Information Bureau Notice.
- ---------------------------------------------------------------------------
18.READ THE FOLLOWING STATEMENT CAREFULLY AND SIGN BELOW:
- ---------------------------------------------------------------------------
SUITABLITY STATEMENT
BY SIGNING BELOW, I ACKNOWLEDGE RECEIPT OF THE PROSPECTUS AND UNDERSTAND
THAT THE DEATH BENEFIT UNDER THIS COVERAGE MAY INCREASE OR DECREASE DEPENDING
ON INVESTMENT RESULTS, BUT AS LONG AS THE POLICY/CERTIFICATE IS IN EFFECT
WILL NEVER BE LESS THAN THE FACE AMOUNT. THE DURATION FOR WHICH THIS
COVERAGE IS IN EFFECT MAY DEPEND ON INVESTMENT RESULTS, BUT WILL NEVER BE
LESS THAN THE GUARANTEED PERIOD OF PROTECTION. THE POLICY/CERTIFICATE CASH
SURRENDER VALUE MAY INCREASE OR DECREASE ON ANY DAY DEPENDING ON THE
INVESTMENT RESULTS. NO MINIMUM CASH SURRENDER VALUE IS GUARANTEE. THIS IS A
LONG TERM COMMITMENT TO MEET INSURANCE NEEDS AND FINANCIAL GOALS.
Agreement
o I agree that, to the best of my knowledge and belief, all statements and
answers in this application/enrollment form are complete and true, and may
be relied upon in determining whether to issue the policy/certificate. I
understand that my answers will form a part of any policy/certificate to
be issued; and that no medical examiner or registered representative has
authority to: (a) modify this agreement; or (b) waive any of Golden
American's rights or requirements.
o If Golden American amends the application/enrollment form as indicated in
the amendments section below, I will approve of the change by accepting the
policy/certificate where permitted by state regulation. I understand that
any change in: (a) plan; (b) benefits applies for; (c) amount of insurance;
(d) age at issue; and (e) underwriting class, must be agreed to in writing.
o I also understand that unless otherwise provided by the Agreement of
Temporary Life Insurance, no coverage will take effect unless I pay the
initial premium; I receive and accept the policy/certficate; and my
answers and statements in this application/enrollment form continue to be
complete and true at the time of such payment and acceptance.
- ------------------------------ -----------------------------------
Signature of Proposed Insured Signed at (City,State) Date
- ------------------------------ -----------------------------------
Signature of Proposed Joint Signed at (City,State) Date
Insured (if applicable)
- ------------------------------ -----------------------------------
Signature of Proposed Owner Signed at (City,State) Date
(if other than insured)
- ------------------------------ -----------------------------------
Signature of Proposed Joint Signed at (City,State) Date
Owner (if applicable)
- ---------------------------------------------------------------------------
FOR AGENTS USE ONLY
- ---------------------------------------------------------------------------
DO YOU HAVE REASON TO BELIEVE THAT THE COVERAGE APPLIED FOR WILL REPLACE
OR CHANGE ANY EXISTING ANNUITY OR LIFE INSURANCE ON THE LIFE OF THE INSURED?
/ / YES / / NO
__________________________ _________________________ ___________________
Agent Signature Print Name & No. of Agent Social Security No.
__________________________________
Broker/Dealer/Branch
Have you provided an Agreement of Temporary Life Insurance to the
applicant? / /Yes / /No
- --------------------------------------------------------------------------
Amendments to the Application/Enrollment Form
- ---------------------------------------------------------------------------
GOLDEN AMERICAN LIFE INSURANCE COMPANY, CUSTOMER SERVICE CENTER,
PO Box 8794, Wilmington, DE 19899-8794
GA-A/EL-1024-2/97
<PAGE>
PLEASE DETACH AND RETAIN FOR APPLICANT'S RECORDS
- ---------------------------------------------------------------------------
NOTICE OF INSURANCE INFORMATION PRACTICES
- ---------------------------------------------------------------------------
Thank you for choosing Golden American Life Insurance Company. This
notice is given to you at the time that you apply for life insurance to tell
you about the kinds of information we may obtain in connection with your
application. We will treat all personal information as confidential. You
have the right of access and correction with respect to this information.
If you wish a more detailed explanation of our information practices, please
send your written request to Golden American Life Insurance Company,
Customer Service Center, P. O. Box 8794, Wilmington, Delaware 19899-8794.
- ---------------------------------------------------------------------------
FAIR CREDIT REPORTING NOTICE
- ---------------------------------------------------------------------------
To aid in establishing eligibility for insurance, an investigative
consumer report, including information about finances, character and
general reputation may be obtained. This information may be obtained
through personal interviews with you, your neighbors, friends and
acquaitances or through telephone interviews with you or a member of your
household. Even if you are not interviewed, you may ask to be interviewed
in connection with this report.
Any information obtained in this report would be for business purposes
only. No information will be revealed to any person contacted for the
purpose of completing the report.
You have the right to be informed whether or not an investigative
consumer report was requested. If such a report was requested, you have the
right to request and receive from Golden American Life Insurance Company,
the name, address and telephone number of each consumer reporting agency
making a report about you. You may also request and receive from all such
consumer reporting agencies, copies of any investigative consumer reports
they have made about you. Send your written request to:
o Golden American Life Insurance Company
Customer Service Center
P.O. Box 8794
Wilmington, Delaware 19899-8794
Please be sure to include your full name, date of birth and any applicable
policy number.
- ---------------------------------------------------------------------------
MEDICAL INFORMATION BUREAU NOTICE
- ---------------------------------------------------------------------------
Information on your insurability will be treated as confidential.
However, we may make a brief report on our conclusions to the Medical
Information Bureau ("Bureau"), a non-profit membership organization of
insurance companies, which operates an information exchange on behalf of
its member. If you apply to another Bureau member company for life or
health insurance coverage, or submit a claim for benefits to such a
company, that company may request the Bureau to provide information in
your file.
If you ask, the Bureau will arrange for disclosure to your of any
information it may have your file. If you believe the information is
inaccurate, you may contact the Bureau and seek a correction in accordance
with procedures similar to those set forth in the Federal Fair Credit
Reporting Act. The address of the Bureau of Information Office is:
o Post Office Box 105
Essex Station
Boston, MA 02112
The telephone number is:
o (617) 426-3660.
We may also release information to our reinsurers and to other life
insurance companies to whom you may apply for life or health insurance
or to whom you may submit a claim.
- ---------------------------------------------------------------------------
GOLDEN AMERICAN LIFE INSURANCE COMPANY, CUSTOMER SERVICE CENTER,
PO Box 8794, Wilmington, DE 19899-8794
GA-A/EL-1024-2/97
<PAGE>
EXHIBIT (10)(b)
GOLDEN AMERICAN LIFE INSURANCE COMPANY
A Subsidiary of Bankers Trust Company
GOLDEN AMERICAN LIFE INSURANCE COMPANY IS A STOCK COMPANY DOMICILED IN
WILMINGTON, DELAWARE
VARIABLE LIFE INSURANCE
APPLICATION/ENROLLMENT FORM--PART I
1. COVERAGE
a) / / Single Life c) / / GoldenSelect Genesis I e) / / Other
b) / / Survivorship d) / / GoldenSelect Genesis Flex
2. PREMIUM
a) Specific Face Amount $_______ or b) Number of Years for Payments______
(PROVIDE BOTH FROM YOUR ILLUSTRATION OR ENTER ONLY ONE AND GOLDEN
AMERICAN WILL COMPUTE THE OTHER.)
c) Initial/Planned Modal Premium $ _______
d) Frequency of Payments / / Monthly (Preauthorized Check Only)
/ / Semiannually (Preauthorized Check Only)
/ / Quarterly (Preauthorized Check Only)
/ / Annually
e) Indicate Initial Payment $_________ / / Wired or / / Enclosed
(MAKE CHECK PAYABLE TO GOLDEN AMERICAN LIFE INS. CO.)
f) Is this a 1035 Exchange? / / Yes / / No
Is there an outstanding loan with this Exchange?
/ / Yes / / No
3. INSURED
a) Name b) Male Female c)Soc. Sec. #
/ / / / or Tax ID.#
d) Permanent e) Occupation/Duties
Address
f) City State Zip g) Date of Birth
4. JOINT INSURED (COMPLETE IF YOU CHECKED SURVIVORSHIP)
a) Name b) Male Female c)Soc. Sec. #
/ / / / or Tax ID.#
d) Permanent e) Occupation/Duties
Address
f) City State Zip g) Date of Birth h) Relation
to Insured
5. OWNER(S) (IF OTHER THAN INSURED)
a) Name b) Male Female c)Soc. Sec. #
/ / / / or Tax ID.#
d) Permanent e) Phone
Address ( )
f) City State Zip g) Date of Birth h) Relation
to Insured
6. CONTINGENT OWNER (OPTIONAL)
Name Address Relation
to Insured
7. PRIMARY BENEFICIARIES (INDICATE PERCENTAGES)
Name % Address Relation
to Insured
Name % Address Relation
to Insured
8. CONTINGENT BENEFICIARY(IES) (LIST ADDITIONAL CONTINGENT BENEFICIARIES ON THE
BACK)
Name % Address Relation
to Insured
Name % Address Relation
to Insured
9. HOW CAN WE BEST CONTACT YOU?
a)Insured b)Joint Insured (IF APPLICABLE)
Home Telephone: ( ) Home Telephone: ( )
Business Telephone: ( ) Business Telephone: ( )
Best Days:_______ Best Times:____ Best Days:_______ Best Times:____
Most Convenient Place To Call Most Convenient Place to Call
/ / Business / / Home / / Business / / Home
Golden American Life Insurance Company, Customer Service Center, PO Box 8794,
Wilmington, DE 19899-8794
GA-A/EL-1014-6/95
<PAGE>
10. ALLOCATION INSTRUCTIONS
(A) ALLOCATION INSTRUCTIONS FOR INVESTMENT VALUE AFTER THE FREE LOOK PERIOD
FILL IN ALLOCATION PERCENTAGES IN INITIAL COLUMN BELOW. YOUR INITIAL
PREMIUM IS ALLOCATED TO THE GENERAL ACCOUNT DURING THE UNDERWRITING PROCESS
AND TO THE LIQUID ASSET DIVISION DURING THE FREE LOOK PERIOD. SEE THE
PROSPECTUS FOR DETAILS.
(B) DOLLAR COST AVERAGING (DCA): OPTIONAL. PLEASE CHECK BOX TO ELECT. / /
Amount of Monthly Transfer $ __________________ (minimum $250)
Division Transferred From: / / Limited Maturity Bond Division
/ / Liquid Asset Division
/ / 1 Year Fixed Interest Division
(MINIMUM OF $10,000 MUST BE ALLOCATED TO THE DIVISION CHECKED)
Divisions Transferred To: Fill in percentages for allocations of DCA below
[see (B) DCA].
ACCOUNT DIVISION INVESTMENT ADVISER (A) INITIAL (B) DCA
---------------- ------------------ ----------- ------
MULTIPLE ALLOCATION ZWEIG ADVISORS, INC. % %
FULLY MANAGED T. ROWE PRICE Associates, INC. % %
ALL-GROWTH WARBURG, PINCUS COUNSELLORS, INC. % %
CAPITAL APPRECIATION CHANCELLOR TRUST CO. % %
VALUE EQUITY EAGLE ASSET MANAGEMENT, INC. % %
RISING DIVIDENDS KAYNE, ANDERSON INV. MGMT., L.P. % %
REAL ESTATE EII REALTY SECURITIES, INC. % %
NATURAL RESOURCES VAN ECK ASSOCIATES CORP. % %
EMERGING MARKETS BANKERS TRUST COMPANY % %
LIMITED MATURITY BOND BANKERS TRUST COMPANY %
LIQUID ASSET BANKERS TRUST COMPANY %
FIXED INTEREST DIVISION 1 YEAR %
TOTAL 100% 100%
11. OPTIONAL SYSTEMATIC PARTIAL WITHDRAWALS (GOLDENSELECT GENESIS I ONLY)
If you want to receive Systematic Partial Withdrawals, your request must be
receive in writing. For the appropriate form, please call our Customer Service
Center: 1-800-366-0066.
12. TELEPHONE REALLOCATION AUTHORIZATION ________________ PROPOSED OWNER'S
INITIALS
I authorize Golden American Life Insurance Company ("Golden American") to act
upon reallocation instructions given by telephone from ______________________
(name of your registered representative) upon furnishing his/her social
security number. Neither Golden American nor any person authorized by Golden
American will be responsible for any claim, loss, liability or expense in
connection with reallocation instructions received by telephone from such
person if Golden American or such other person acted on such telephone
instructions 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
policy was purchased or until such time that I notify Golden American otherwise
in writing.
13. PLEASE ANSWER THE FOLLOWING QUESTIONS.
Will the life insurance applied for replace or change any existing annuity or
life insurance on the life of the insured(s)?
/ / Yes / / No
(If yes, please list policies, companies and amounts in section 14).
If we are unable to issue life insurance, do you wish to apply for an annuity?
/ / Yes / / No
14. REMARKS ___________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
GOLDEN AMERICAN LIFE INSURANCE COMPANY, CUSTOMER SERVICE CENTER, PO Box 8794,
Wilmington, DE 19899-8794 GA-A/EL-1014-6/95
<PAGE>
15. AUTHORIZATION TO RELEASE INFORMATION
I authorize any physician, hospital or other medical practitioner or
facility, insurance company, Medical Information Bureau, or any other
organization, institution or person that has any information about my health or
any non-medical information relevant to my insurability or that of my minor
children who are to be insured, to release such information to Golden American
Life Insurance Company ("Golden American"), its underwriters and its reinsurers.
I also authorize Golden American to obtain investigative consumer reports, if
appropriate.
I understand that the information that I authorize Golden American to obtain
will be used by Golden American to help determine my insurability or my
eligibility for benefits under an existing policy.
I authorize Golden American to release information about my insurability to its
reinsurers, my Agent, and to the Medical Information Bureau, all as described
in Golden American's Notice of Insurance Information Practices, or to the
persons or businesses performing business or legal services in connection with
my insurance request or claim for benefits, or as may be otherwise lawfully
required or as I may further authorize.
I understand that I have a right to learn the content and receive a copy of any
report of information about me. This authorization is valid for 26 months from
the date signed and a photographic copy is as valid as the original. I have a
right to ask for and receive a true copy of this Authorization signed by me. I
acknowledge receipt of the Fair Credit Reporting Act and Medical Information
Bureau Notice.
16. READ THE FOLLOWING STATEMENT CAREFULLY AND SIGN BELOW:
Suitability Statement
By signing below, I acknowledge receipt of the Prospectus and understand
that the death benefit under this coverage may increase or decrease
depending on its investment results, but as long as the policy/certificate
is in effect will never be less than the face amount. The duration for
which this coverage is in effect may depend on its investment results, but
will never be less than the guaranteed period of protection. The
policy/certificate's cash surrender value may increase or decrease on any
day depending on the investment results. No minimum cash surrender value is
guaranteed. This is a long term commitment to meet insurance needs and
financial goals.
Agreement
- - - I agree that, to the best of my knowledge and belief, all statements and
answers in this application/enrollment form are complete and true, and may
be relied upon in determining whether to issue the policy/certificate. I
understand that my answers will form a part of any policy/certificate to be
issued; and that no medical examiner or registered representative has the
authority to: (a) modify this agreement; or (b) waive any of Golden
American's rights or requirements.
- - - If Golden American amends the application/enrollment form as indicated in
the amendments section below, I will approve of the change by accepting the
policy/certificate where permitted by state regulation. I understand that
any change in: (a) plan; (b) benefits applied for; (c) amount of insurance;
(d) age at issue; and (e) underwriting class, must be agreed to in writing.
- - - I also understand that unless otherwise provided by the Agreement of
Temporary Life Insurance, no coverage will take effect unless I pay the
initial premium; I received and accept the policy/certificate; and my
answers and statements in this application/enrollment form continue to be
complete and true at the time of such payment and acceptance.
- - ------------------------------- --------------------------------
Signature of Proposed Insured Signed at (City, State) Date
- - ------------------------------- --------------------------------
Signature of Proposed Joint Signed at (City, State) Date
Insured (IF APPLICABLE)
- - ------------------------------- --------------------------------
Signature of Proposed Owner Signed at (City, State) Date
(IF OTHER THAN INSURED)
- - ------------------------------- --------------------------------
Signature of Proposed Joint Signed at (City, State) Date
Owner (IF APPLICABLE)
FOR AGENTS USE ONLY
DO YOU HAVE REASON TO BELIEVE THAT THE COVERAGE APPLIED FOR WILL REPLACE OR
CHANGE ANY EXISTING ANNUITY OR LIFE INSURANCE ON THE LIFE OF THE INSURED?
/ / Yes / / No
Agent Signature
-----------------------------------------
Print Name & No. of Agent
-------------------------------
Social Security No.
-------------------------------------
Broker/Dealer/Branch
------------------------------------
Florida License ID# (In Florida Only)
-------------------
Have you provided an Agreement of
Temporary Life Insurance to the applicant? / / Yes / / No
Amendments to the Application/Enrollment Form__________________________________
_______________________________________________________________________________
_______________________________________________________________________________
GOLDEN AMERICAN LIFE INSURANCE COMPANY, CUSTOMER SERVICE CENTER, PO Box 8794,
Wilmington, DE 19899-8794 GA-A/EL-1014-6/95
<PAGE>
NOTICE OF INSURANCE INFORMATION PRACTICES
Thank you for choosing Golden American Life Insurance Company. This notice is
given to you at the time that you apply for life insurance to tell you about the
kinds of information we may obtain in connection with your
application/enrollment form. We will treat all personal information as
confidential. You have the right of access and correction with respect to this
information. If you wish a more detailed explanation of our information
practices, please send your written request to Golden American Life Insurance
Company, Customer Service Center, P.O. Box 8794, Wilmington, Delaware
19899-8794.
FAIR CREDIT REPORTING NOTICE
To aid in establishing eligibility for insurance, an investigative consumer
report, including information about finances, character and general reputation
may be obtained. This information may be obtained through personal interviews
with you, your neighbors, friends and acquaintances or through telephone
interviews with your or a member of your household. Even if you are not
interviewed, you may ask to be interviewed in connection with this report.
Any information obtained in this report would be for business purposes only. No
information will be revealed to any person contacted for the purpose of
completing the report.
You have the right to be informed whether or not an investigative consumer
report was requested. If such a report was requested, you have the right to
request and receive from Golden American Life Insurance Company, the name,
address and telephone number of each consumer reporting agency making a report
about you. You may also request and receive from all such consumer reporting
agencies, copies of any investigative consumer reports they have made about you.
Send your written request to:
- - - Golden American Life Insurance Company
Customer Service Center
P.O. Box 8794
Wilmington, Delaware 19899-8794
Please be sure to include your full name, date of birth and any applicable
policy number.
MEDICAL INFORMATION BUREAU NOTICE
Information on your insurability will be treated as confidential. However, we
may make a brief report on our conclusions to the Medical Information Bureau
("Bureau"), a non-profit membership organization of life insurance companies,
which operates an information exchange on behalf of its members. If you apply to
another Bureau member company for life or health insurance coverage, or submit a
claim for benefits to such a company, that company may request the Bureau to
provide information in your file.
If you ask, the Bureau will arrange for disclosure to you of any information it
may have in your file. If you believe the information is inaccurate, you may
contact the Bureau and seek a correction in accordance with procedures similar
to those set forth in the Federal Fair Credit Reporting Act. The address of the
Bureau Information Office is:
- - - Post Office Box 105,
Essex Station
Boston, MA 02112
The telephone number is:
- - - (617) 426-3660.
We may also release information in our files to our reinsurers and to other life
insurance companies to whom you may apply for life or health insurance or to
whom you may submit a claim.
GOLDEN AMERICAN LIFE INSURANCE COMPANY, CUSTOMER SERVICE CENTER, PO Box 8794,
Wilmington, DE 19899-8794
GA-A/EL-1014-6/95 1-800-366-0066
Exhibit 3
ING VARIABLE ANNUITIES
MYLES R. TASHMAN
Executive Vice President,
General Counsel and Secretary
April 26, 1999
Members of the Board of Directors
Golden American Life Insurance Company
1475 Dunwoody Drive
West Chester, PA 19380-1478
Ms. Emory and 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 S-6 to be filed by the Company
and Separate Account A (the "Account") with the Securities and Exchange
Commission in connection with the registration under the Securities Act
of 1933, as amended, for the registration of the Variable Life
Insurance Policies to be issued with respect to the Account.
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 equal the
reserves and other liabilities under the Variable Life Insurance
Policies is not chargeable with liabilities arising out of any
other business the Company may conduct;
(4) The Variable Life Insurance Policies have been duly authorized by
the Company and, when issued as contemplated by the registration
statement, will constitute legal, validly issued and binding
obligations of the Company in accordance with their terms.
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>
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>
Exhibit 6
ING VARIABLE ANNUITIES
April 26, 1999
Members of the Board of Directors
Golden American Life Insurance Company
1475 Dunwoody Drive
West Chester, PA 19380-1478
Directors:
This opinion is furnished in connection with the filing of Post-
Effective Amendment No. 23 on Form S-6 ("Registration Statement") (File
No. 33-23458) which covers premiums expected to be received under the
flexible premium variable life insurance policies ("Policies") offered
by Separate Account A of Golden American Life Insurance Company
("Golden American"). The prospectuses included in the Registration
Statement describe Policies which are offered by Golden American in
each state where they have been approved by the appropriate state
insurance authorities. The Policy forms were prepared under my
direction, and I am familiar with the Registration Statement and the
exhibits thereto. In my opinion:
(1) The illustrations of death benefits, investment values, cash
surrender values and accumulated premiums for the Policies in the
prospectuses included in the Registration Statement based on
assumptions stated in the illustrations, are consistent with the
provisions of the Policies. The rate structure of the Policies has not
been designed so as to make the prospectuses, more favorable than for
Policies for other ages.
(2) The table of illustratives premiums and the table of illustrative
net single premium factors in the prospectuses are consistent with the
provisions of the Policies.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference to my name under the
heading "Experts" in the prospectuses.
Sincerely,
/s/ Stephen J. Preston
-----------------------------------
Stephen J. Preston F.S.A., M.A.A.A.
Executive Vice President and Chief Actuary
1475 Dunwoody Drive GoldenSelect Series
West Chester, PA 19380-1478 Issued by Golden American
Life Insurance Company
<PAGE>
Exhibit 8 - CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
use of our reports dated February 25, 1999, with respect to Separate Account A
and February 12, 1999, with respect to Golden American Life Insurance
Company in Post-Effective Amendment No. 24 to the Registration Statement
(Form S-6 No. 33-23458) and related Prospectus of Separate Account A.
Our audits also included the financial statement schedules of Golden American
Life Insurance Company included in Exhibit 4. 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
April 23, 1999
<PAGE>
EXHIBIT 9. CONSENT OF SUTHERLAND, ASBILL & BRENNAN LLP
<PAGE>
Sutherland Asbill & Brennan LLP
1275 Pennsylvania Ave, NW
Washington, DC 20004-2404
April 28, 1999
Board of Directors
Golden American Life Insurance Company
1475 Dunwoody Drive
West Chester, PA 19380
Ms. Emory 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. 24 to
the registration statement on Form S-6 for Separate Account A (File No. 33-
23458) of Golden American Life Insurance Company. 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/Kimberly J. Smith
-------------------------
Kimberly J. Smith
<PAGE>
EXHIBIT 10
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, on or before May
3, 1999, 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:
o Post-Effective Amendment currently designated #23 to Separate
Account A of Golden American's Registration Statement on Form
S-6 (Nos. 33-23458; 811-5627)
SIGNATURE TITLE DATE
- --------- ----- ----
/s/Barnett Chernow Director and President April 9, 1999
- ---------------------
Barnett Chernow
/s/Myles R. Tashman Director, Executive Vice April 8, 1999
- --------------------- President, General Counsel
Myles R. Tashman and Secretary
/s/R. Brock Armstrong Director April 12, 1999
- ---------------------
R. Brock Armstrong
/s/Michael W. Cunningham Director April 8, 1999
- ---------------------
Michael W. Cunningham
/s/Linda B. Emory Director April 9, 1999
- ---------------------
Linda B. Emory
/s/Phillip R. Lowery Director April 8, 1999
- ---------------------
Phillip R. Lowery
/s/E. Robert Koster Senior Vice President and April 7, 1999
- --------------------- Chief Financial Officer
E. Robert Koster
1475 Dunwoody Drive GOLDEN SELECT SERIES
West Chester, PA 19380 Issued by Golden American Life
Insurance Company
