As filed with the Securities and Exchange Registration No. 333-24645
Commission on November 18, 1997
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Aetna Life Insurance and Annuity Company
------------------------------------------------
Connecticut
------------------------------------------------
71-0294708
------------------------------------------------
151 Farmington Avenue, Hartford, Connecticut 06156, (860) 273-4686
--------------------------------------------------------------------------
Julie E. Rockmore, Counsel
Aetna Life Insurance and Annuity Company
151 Farmington Avenue, RE4A, Hartford, Connecticut 06156
(860) 273-4686
------------------------------------------------
(Name, Address, including Zip Code, and Telephone Number,
including Area Code, of Agent for Service)
- -------------------------------------------------------------------------------
The annuities covered by this registration statement are to be issued from time
to time after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [XX]
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this Form, check the following box [XX]
<PAGE>
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Regulation S-K
Item 501(b)
<TABLE>
<CAPTION>
Location in Prospectus Dated May 1,
1997 and as Amended
Form S-2 by Supplement Dated
Item No. Information Required in Prospectus November 28, 1997
<S> <C> <C>
1 Forepart of the Registration Statement and Outside
Front Cover Page of
Prospectus ...................................... Outside Front Cover
2 Inside Front and Outside Back Cover Table of Contents (inside front cover)
Pages of Prospectus..............................
3 Summary Information.................................. Summary, and as amended
Risk Factors and Ratio of Earnings to Fixed Charges.. Not Applicable
4 Use of Proceeds...................................... Investments
5 Determination of Offering Price...................... Not Applicable
6 Dilution............................................. Not Applicable
7 Selling Security Holders............................. Not Applicable
8 Plan of Distribution................................. Distribution of Contracts
9 Description of Securities to be Description of the Guaranteed Account,
Registered....................................... and as amended
10 Interests of Named Experts and
Counsel.......................................... Not Applicable
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Location in Prospectus Dated May 1,
1997 and as Amended
Form S-2 by Supplement Dated
Item No. Information Required in Prospectus November 28, 1997
<S> <C> <C>
11 Information with Respect to the
Registrant........................................... Not Applicable
12 Incorporation of Certain Information Incorporation of Certain Documents by
by Reference......................................... Reference; Experts
13 Disclosure of Commission Position
on Indemnification for Securities
Act Liabilities...................................... Not Applicable
</TABLE>
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY
ALIAC GUARANTEED ACCOUNT
CREDITED INTEREST OPTION
Supplement dated November 28, 1997 to Prospectus Dated May 1, 1997
The information in this supplement updates and amends the information contained
in the Prospectus dated May 1, 1997 (the "Prospectus") and should be read with
that Prospectus.
[bullet] Incorporation of Certain Documents By Reference
The following is added to the section entitled "Incorporation of Certain
Documents By Reference" located on the inside cover of the Prospectus.
The Company's latest Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997, filed with the Commission pursuant to Section 15(d)
of the Exchange Act, is incorporated by reference into this Prospectus.
Part I of Form 10-Q is part of this Supplement.
The Company's Quarterly Reports on Form 10-Q for the quarters ending March 31,
1997 and June 30, 1997, filed with the Commission pursuant to Section 15(d) of
the Exchange Act, are incorporated by reference into this Prospectus.
[bullet] Additional Withdrawal Option
The following has been changed throughout the Prospectus:
"Additional Withdrawal Option" to "Systematic Distribution Option"
[bullet] Guaranteed Term
The definition of Guaranteed Term under the section entitled "Glossary" on page
3 of the Prospectus has been replaced with the following:
The period of time specified by the Company for which a specific Guaranteed Rate
or Rates are offered on amounts invested during a specific Deposit Period.
Guaranteed Terms are made available by the Company subject to the Company's
terms and conditions, including, but not limited to, the Company's right to
restrict allocations to new purchase payments or deposits (such as by
prohibiting transfers into a particular Guaranteed Term from any other
Guaranteed Term or from any other funding option or by prohibiting the
reinvestment of Matured Term Value into a particular Guaranteed Term). The
Company may offer more than one Guaranteed Term of the same duration and credit
one with a different rate subject to certain restrictions such as requiring the
use of the Dollar Cost Averaging Program.
[bullet] Market Value Adjustment
The second paragraph of the section entitled "Market Value Adjustment" in the
SUMMARY on page 5 of the Prospectus has been replaced with the following:
This provision does not apply to (1) amounts transferred on the Maturity Date;
(2) amounts transferred under the Maturity Value Transfer Provision; (3) amounts
distributed under one of the Systematic Distribution Options described in the
Contract Prospectus; and (4) amounts transferred from a Guaranteed Term in
connection with the Dollar Cost Averaging Program described in the Contract
Prospectus. However, if the Certificate Holder discontinues the Dollar Cost
Averaging Program and the amounts in it are transferred in accordance with the
Company's terms and conditions governing Guaranteed Terms, to another Guaranteed
Term, a market value adjustment will apply.
<PAGE>
[bullet] Maturity of a Guaranteed Term
The second paragraph of the section entitled "Maturity of a Guaranteed Term" in
the SUMMARY on page 5 of the Prospectus has been replaced with the following:
If the Company does not receive direction from the Certificate Holder by the
Maturity Date, the Matured Term Value will be reinvested in the Guaranteed
Account for a new Guaranteed Rate and Term under the then current Deposit
Period. The new Guaranteed Term will have the same length to maturity as the
Guaranteed Term that is maturing. If such a Guaranteed Term is not available,
the transfer will be to the next shortest available Guaranteed Term or if no
shorter Guaranteed Term is available, to the next longer available Guaranteed
Term. (See "Maturity of a Guaranteed Term").
[bullet] Contributions to the Guaranteed Account
The section entitled "Contributions to the Guaranteed Account" in the
DESCRIPTION OF THE ALIAC GUARANTEED ACCOUNT on page 7 has been replaced with the
following:
Amounts may be invested in the Guaranteed Account for the Guaranteed Terms and
at the Guaranteed Rates available during the then current Deposit Period by
allocating all or a portion of your Purchase Payment(s) to the Guaranteed
Account. You may also elect to transfer accumulated values from other funding
options available under the Contract or from other Guaranteed Terms of the
Guaranteed Account to the Guaranteed Account, subject to the transfer
limitations described in the Contract. The Company may also limit the number of
Guaranteed Terms an individual may select. At this time, if the Certificate
Holder has the Dollar Cost Averaging Program in effect in a Guaranteed Term and
wishes to add an additional deposit to be dollar cost averaged, all amounts to
be dollar cost averaged will have to be combined and the dollar cost averaging
amounts will be recalculated. This will affect the duration of amounts in the
Guaranteed Term.
The Company reserves the right to limit the number of investment options
selected during the Accumulation Period. At this time there is no limit on the
number of investment options selected during the Accumulation Period, but the
number of investment options that may be selected at any one time by a
Certificate Holder is limited to 18. Each Guaranteed Term is counted as one
investment option. There is no minimum amount required if investments come from
Purchase Payments; however, you must meet the minimum purchase amounts that are
set forth in your Contract. There is a $500 minimum for transfers from other
funding options.
Amounts invested in the Guaranteed Account during a Deposit Period may not be
transferred during that Deposit Period or for 90 days after the close of that
Deposit Period, except in connection with the Maturity Value Transfer Provision,
the Dollar Cost Averaging Program or the cessation by the Certificate Holder of
the Dollar Cost Averaging Program in certain circumstances, or the selection of
a Systematic Distribution Option available under the Contract for periodic or
systematic distributions (see "Transfers").
[bullet] Guaranteed Rates
The first paragraph of the section entitled "Guaranteed Rates" in the
DESCRIPTION OF THE ALIAC GUARANTEED ACCOUNT on page 7 has been replaced with the
following:
Guaranteed Rates are the interest rates that are guaranteed by the Company to be
credited on amounts invested during a Deposit Period for a specific Guaranteed
Term. The Company may offer different Guaranteed Rates on Guaranteed Terms of
the same duration and may have certain
2
<PAGE>
restrictions apply to the use of any Guaranteed Terms such as, but not limited
to, the requirement of the use of the Dollar Cost Averaging Program. The Company
may also limit the number of Guaranteed Terms an individual may select.
Guaranteed Rates are annual effective yields, reflecting a full year's interest.
The interest is credited daily at a rate that will produce the guaranteed annual
effective yield over the period of one year.
[bullet] Maturity of a Guaranteed Term
The second paragraph of the section entitled "Maturity of a Guaranteed Term" in
the DESCRIPTION OF THE ALIAC GUARANTEED ACCOUNT on page 8 of the Prospectus has
been replaced with the following:
If no direction from the Certificate Holder is received by the Company at its
Home Office by the Maturity Date, the Company will automatically reinvest the
Matured Term Value in the Guaranteed Account during the new Deposit Period. The
Matured Term Value will be invested for a Guaranteed Term having the same length
to maturity as the Guaranteed Term that is maturing. If such a term is not
available, the transfer will be to the next shortest available Guaranteed Term.
If no shorter Guaranteed Term is available, the next longer Guaranteed Term will
be used. The new Guaranteed Term may have a different length of time to maturity
than the maturing Guaranteed Term. For example, if a 3-year Guaranteed Term
matures and no direction is received, and a 3-year Guaranteed Term is not
available in the current Deposit Period, but a 1 year Guaranteed Term is
available for maturities, the Matured Term Value may be reinvested in the 1 year
Guaranteed Term, which is the next shortest Guaranteed Term then available.
[bullet] Transfers
The first and second paragraphs of the section entitled "Transfers" in the
TRANSFERS AND WITHDRAWALS on page 9 of the Prospectus has been replaced with the
following:
As described in the Contract Prospectus, all or any portion of accumulated
values under the Contract may be transferred to the Guaranteed Account or to
other funding options available under the Contract. The Company reserves the
right to limit the number of investment options selected during the Accumulation
Period. At this time there is no limit on the number of investment options
selected during the Accumulation Period, but the number of investment options
that may be selected at any one time by a Certificate Holder is limited to 18.
Each Guaranteed Term is counted as one investment option. The minimum amount
that may be transferred from other investment options to the Guaranteed Account
is $500.
Amounts applied to a Guaranteed Term during a Deposit Period may not be
transferred to any other funding option or to another Guaranteed Term during
that Deposit Period or for 90 days after the close of that Deposit Period. This
restriction does not apply to the selection of Systematic Distribution Options
available under the Contract or to transfers relating to the Dollar Cost
Averaging Program. However, if the Certificate Holder discontinues the Dollar
Cost Averaging Program, the Company may require that all amounts in that
Guaranteed Term be transferred into another Guaranteed Term in accordance with
the Company's terms and conditions governing Guaranteed Terms. A market value
adjustment will apply. (See Contract Prospectus).
3
<PAGE>
[bullet] Market Value Adjustment
This section replaces the first paragraph in the MARKET VALUE ADJUSTMENT on page
10 of the Prospectus with the following:
A Market Value Adjustment ("MVA") is applied to amounts transferred or withdrawn
from the Guaranteed Account before the Maturity Date, including transfers made
in order to elect a nonlifetime Annuity Option, but excluding transactions under
the Maturity Value Transfer Provision, transfers made in connection with the
Dollar Cost Averaging Program (unless the transfer is made as a result of the
discontinuance by the Certificate Holder of the Dollar Cost Averaging Program.--
See "Transfers"), and amounts withdrawn under one of the Systematic Distribution
Options.
4
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
TABLE OF CONTENTS
PAGE
----
PART I. FINANCIAL INFORMATION (unaudited)
Item 1. Financial Statements
Consolidated Statements of Income............................... 3
Consolidated Balance Sheets..................................... 4
Consolidated Statements of Changes in Shareholder's Equity...... 5
Consolidated Statements of Cash Flows........................... 6
Condensed Notes to Consolidated Financial Statements............ 7
Independent Auditors' Review Report............................. 11
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Consolidated Statements of Income
(millions)
<TABLE>
<CAPTION>
3 Months Ended September 30, 9 Months Ended September 30,
---------------------------- ----------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue:
Premiums $68.2 $35.5 $200.1 $99.9
Charges assessed against policyholders 127.7 99.1 350.2 289.3
Net investment income 269.5 259.7 804.9 771.8
Net realized capital gains 8.8 0.1 17.9 17.2
Other income 9.6 9.4 28.8 34.6
----- ----- ------- -------
Total revenue 483.8 403.8 1,401.9 1,212.8
Benefits and expenses:
Current and future benefits 286.5 245.6 853.4 719.1
Operating expenses 84.5 84.6 247.3 261.3
Amortization of deferred policy acquisition costs 40.1 17.9 92.4 46.6
Severance and facilities charges - 47.3 - 61.3
----- ----- ------- -------
Total benefits and expenses 411.1 395.4 1,193.1 1,088.3
----- ----- ------- -------
Income before income taxes 72.7 8.4 208.8 124.5
Income taxes 21.3 1.4 63.9 34.3
----- ----- ------- -------
Net income $51.4 $7.0 $144.9 $90.2
===== ===== ======= =======
</TABLE>
See Condensed Notes to Consolidated Financial Statements.
(3)
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Consolidated Balance Sheets
(millions, except share data)
<TABLE>
<CAPTION>
September 30, December 31,
Assets 1997 1996
- ------ ---- ----
<S> <C> <C>
Investments:
Debt securities available for sale, at fair value
(amortized cost: $12,736.4 and $12,539.1) $13,257.1 $12,905.5
Equity securities, available for sale:
Nonredeemable preferred stock (cost: $143.4 and $107.6) 166.5 119.0
Investment in affiliated mutual funds (cost: $42.0 and $77.3) 55.1 81.1
Common stock .8 .3
Short-term investments 111.8 34.8
Mortgage loans 12.9 13.0
Policy loans 453.7 399.3
--------- ---------
Total investments 14,057.9 13,553.0
Cash and cash equivalents 614.2 459.1
Accrued investment income 183.0 159.0
Premiums due and other receivables 37.3 26.6
Deferred policy acquisition costs 1,620.6 1,515.3
Reinsurance loan to affiliate 474.4 628.3
Other assets 40.1 33.7
Separate accounts assets 21,494.5 15,318.3
--------- ---------
Total assets $38,522.0 $31,693.3
========= =========
Liabilities and Shareholder's Equity
- ------------------------------------
Liabilities:
Future policy benefits $3,757.8 $3,617.0
Unpaid claims and claim expenses 28.0 28.9
Policyholders' funds left with the Company 11,074.5 10,663.7
--------- ---------
Total insurance reserve liabilities 14,860.3 14,309.6
Other liabilities 295.2 354.7
Income taxes:
Current 37.1 20.7
Deferred 74.8 80.5
Separate accounts liabilities 21,468.6 15,318.3
--------- ---------
Total liabilities 36,736.0 30,083.8
--------- ---------
Shareholder's equity:
Common stock, par value $50 (100,000 shares
authorized; 55,000 shares issued and outstanding) 2.8 2.8
Paid-in capital 418.0 418.0
Net unrealized capital gains 96.7 60.5
Retained earnings 1,268.5 1,128.2
--------- ---------
Total shareholder's equity 1,786.0 1,609.5
--------- ---------
Total liabilities and shareholder's equity $38,522.0 $31,693.3
========= =========
</TABLE>
See Condensed Notes to Consolidated Financial Statements.
(4)
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Consolidated Statements of Changes in Shareholder's Equity
(millions)
9 Months Ended September 30,
----------------------------
1997 1996
---- ----
Shareholder's equity, beginning of year $1,609.5 $1,583.0
Net change in unrealized capital gains 36.2 (93.4)
Net income 144.9 90.2
Common stock dividends (8.3) (1.5)
Other changes 3.7 -
-------- --------
Shareholder's equity, end of period $1,786.0 $1,578.3
======== ========
See Condensed Notes to Consolidated Financial Statements.
(5)
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Consolidated Statements of Cash Flows
(millions)
<TABLE>
<CAPTION>
9 Months Ended September 30,
----------------------------
1997 1996
---- ----
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $144.9 $90.2
Adjustments to reconcile net income to net cash provided by
(used for) operating activities:
Increase in accrued investment income (24.0) (13.0)
Increase in premiums due and other receivables (8.8) (2.3)
Increase in policy loans (54.4) (29.5)
Increase in deferred policy acquisition costs (105.3) (127.2)
Decrease in reinsurance loan to affiliate 153.9 22.1
Net increase in universal life account balances 224.1 172.5
Decrease in other insurance reserve liabilities (165.5) (125.2)
Net (decrease) increase in other liabilities and other assets (122.4) 126.8
Decrease in income taxes (3.9) (23.5)
Net accretion of discount on investments (51.9) (51.1)
Net realized capital gains (17.9) (17.2)
-------- ----------
Net cash (used for) provided by operating activities (31.2) 22.6
-------- ----------
Cash Flows from Investing Activities:
Proceeds from sales of:
Debt securities available for sale 3,828.5 3,830.6
Equity securities 61.3 114.5
Mortgage loans 0.1 8.6
Investment maturities and collections of:
Debt securities available for sale 966.8 681.8
Short-term investments 43.2 21.5
Cost of investment purchases in:
Debt securities available for sale (4,811.0) (4,996.5)
Equity securities (53.6) (63.7)
Short-term investments (120.1) (35.5)
Other, net - (9.1)
-------- ----------
Net cash used for investing activities (84.8) (447.8)
-------- ----------
Cash Flows from Financing Activities:
Deposits and interest credited for investment contracts 1,230.2 1,140.6
Withdrawals of investment contracts (925.8) (860.7)
Dividends paid to shareholder (8.3) (1.5)
Capital contribution to Separate Account (25.0) -
-------- ----------
Net cash provided by financing activities 271.1 278.4
-------- ----------
Net increase (decrease) in cash and cash equivalents 155.1 (146.8)
Cash and cash equivalents, beginning of period 459.1 568.8
-------- ----------
Cash and cash equivalents, end of period $614.2 $422.0
======== ==========
Supplemental cash flow information:
Income taxes paid, net $68.7 $61.4
======== ==========
</TABLE>
See Condensed Notes to Consolidated Financial Statements.
(6)
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Condensed Notes to Consolidated Financial Statements
1. Basis of Presentation
The consolidated financial statements include Aetna Life Insurance and
Annuity Company and its wholly owned subsidiaries, Aetna Insurance Company
of America and Aetna Private Capital, Inc. (collectively, the "Company").
Aetna Life Insurance and Annuity Company is a wholly owned subsidiary of
Aetna Retirement Holdings, Inc. ("HOLDCO"). HOLDCO is a wholly owned
subsidiary of Aetna Retirement Services, Inc., whose ultimate parent is
Aetna Inc. ("Aetna").
These consolidated financial statements have been prepared in accordance
with generally accepted accounting principles and are unaudited. Certain
reclassifications have been made to 1996 financial information to conform
to the 1997 presentation. These interim statements necessarily rely heavily
on estimates, including assumptions as to annualized tax rates. In the
opinion of management, all adjustments necessary for a fair statement of
results for the interim periods have been made. All such adjustments are of
a normal, recurring nature. The accompanying condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements and related notes as presented in the Company's 1996
Annual Report on Form 10-K. Certain financial information that is normally
included in annual financial statements prepared in accordance with
generally accepted accounting principles, but that is not required for
interim reporting purposes, has been condensed or omitted.
2. Future Application of Accounting Standards
Financial Accounting Standard ("FAS") No. 125, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities, was
issued in June 1996 and provides accounting and reporting standards for
transfers of financial assets and extinguishments of liabilities.
FAS No. 125 is effective for 1997 financial statements; however, certain
provisions relating to accounting for repurchase agreements and securities
lending are not effective until January 1, 1998. Provisions effective in
1997 did not have a material effect on the Company's financial position or
results of operations. The Company does not expect adoption of this
statement for provisions effective in 1998 to have a material effect on its
financial position or results of operations.
FAS No. 130, Reporting Comprehensive Income, was issued in June 1997 and
establishes standards for the reporting and presentation of comprehensive
income and its components in a full set of financial statements.
Comprehensive income encompasses all changes in shareholder's equity
(except those arising from transactions with owners) and includes net
income, net unrealized capital gains or losses on available for sale
securities. As this new standard only requires additional information in a
financial statement, it will not affect the Company's financial position or
results of operations. FAS No. 130 is effective for fiscal years beginning
after December 15, 1997, with earlier application permitted. The Company is
currently evaluating the presentation alternatives permitted by the
statement.
(7)
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Condensed Notes to Consolidated Financial Statements
(Continued)
2. Future Application of Accounting Standards - continued
FAS No. 131, Disclosures about Segments of an Enterprise and Related
Information, was issued in June 1997 and establishes standards for the
reporting of information relating to operating segments in annual financial
statements, as well as disclosure of selected information in interim
financial reports. This statement supersedes FAS No. 14, Financial
Reporting for Segments of a Business Enterprise, which requires reporting
segment information by industry and geographic area (industry approach).
Under FAS No. 131, operating segments are defined as components of a
company for which separate financial information is available and is used
by management to allocate resources and assess performance (management
approach). This statement is effective for year-end 1998 financial
statements. Interim financial information will be required beginning in
1999 (with comparative 1998 information). The Company does not anticipate
that this standard will significantly impact the composition of its current
operating segments, which are consistent with the management approach.
3. Financial Instruments
The Company engages in hedging activities to manage interest rate and price
risks. Such hedging activities have principally consisted of using
off-balance sheet instruments such as futures and forward contracts and
interest rate swap agreements. There were no such contracts or agreements
open as of September 30, 1997.
(8)
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Condensed Notes to Consolidated Financial Statements
(Continued)
4. Severance and Facilities Charges
In the second quarter of 1996, the Company was allocated severance and
facilities reserves from Aetna to reflect actions taken or to be taken to
reduce the level of corporate expenses and other costs previously absorbed
by Aetna's property-casualty operations.
In the third quarter of 1996, the Company established severance and
facilities reserves in the Financial Services and Individual Life Insurance
segments to reflect actions taken or to be taken in order to make its
businesses more competitive.
Activity for the nine months ended September 30, 1997 within the severance
and facilities reserves (pretax, in millions) and positions eliminated
related to such actions were as follows:
Reserve Positions
--------------------------------------------------------------------------
Balance at December 31, 1996 $ 47.9 524
Actions taken (1) (19.5) (129)
-------------------------
Balance at September 30, 1997 $ 28.4 395
--------------------------------------------------------------------------
(1) Includes $9.9 million of severance-related actions and $7.0 million of
corporate allocation-related actions.
The Company's severance actions are expected to be substantially completed
by March 31, 1998. The corporate allocation actions and vacating of certain
leased office space are expected to be substantially completed in 1997.
5. Related Party Transactions
Effective December 31, 1988, the Company entered into a reinsurance
agreement with Aetna Life Insurance Company ("Aetna Life") in which
substantially all of the nonparticipating individual life and annuity
business written by Aetna Life prior to 1981 was assumed by the Company.
Effective January 1, 1997, this agreement has been amended to transition
(based on underlying investment rollover in Aetna Life) from a modified
coinsurance to a coinsurance arrangement. As a result of this change,
reserves will be ceded to the Company from Aetna Life as investment
rollover occurs and the loan previously established will be reduced.
(9)
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Condensed Notes to Consolidated Financial Statements
(Continued)
6. Litigation
The Company is involved in numerous lawsuits arising, for the most part, in
the ordinary course of its business operations. While the ultimate outcome
of litigation against the Company cannot be determined at this time, after
consideration of the defenses available to the Company and any related
reserves established, it is not expected to result in liability for amounts
material to the financial condition of the Company, although it may
adversely affect results of operations in future periods.
7. Dividends
On June 27, 1997 and August 15, 1997, the Company paid a $5.3 million and
$3.0 million, respectively, dividend to HOLDCO. The additional amount of
dividends that may be paid by the Company to HOLDCO in 1997 without prior
approval by the Insurance Commissioner of the State of Connecticut is $62.8
million.
(10)
<PAGE>
Independent Auditors' Review Report
The Board of Directors
Aetna Life Insurance and Annuity Company:
We have reviewed the accompanying condensed consolidated balance sheet of Aetna
Life Insurance and Annuity Company and Subsidiaries as of September 30, 1997,
and the related condensed consolidated statements of income for the three-month
and nine-month periods ended September 30, 1997 and 1996, and the related
condensed consolidated statements of changes in shareholder's equity and cash
flows for the nine-month periods ended September 30, 1997 and 1996. These
condensed consolidated financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements for them
to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Aetna Life Insurance and Annuity
Company and Subsidiaries as of December 31, 1996, and the related consolidated
statements of income, changes in shareholder's equity, and cash flows for the
year then ended (not presented herein); and in our report dated February 4,
1997, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 1996, is fairly
presented, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.
/s/ KPMG PEAT MARWICK LLP
November 3, 1997
Hartford, Connecticut
(11)
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Not Applicable
Item 15. Indemnification of Directors and Officers
Reference is hereby made to Section 33-771(f) of the Connecticut General
Statutes ("C.G.S.") regarding indemnification of directors and Section 33-776(4)
regarding indemnification of officers, employees and agents of Connecticut
corporations. These statutes provide in general that Connecticut corporations
incorporated prior to January 1, 1997 shall indemnify their officers, directors,
employees and agents against "liability" (defined as the obligation to pay a
judgment, settlement, penalty, fine, excise tax in the case of an employee
benefit plan or reasonable expenses incurred with respect to a proceeding). In
the case of a proceeding by or in the right of the corporation, indemnification
is limited to reasonable expenses incurred in connection with the proceeding
against the corporation to which the individual was named a party. The
corporation's obligation to provide such indemnification does not apply unless
(1) the individual has met the standard of conduct set forth in Section 33-771;
and (2) a determination is made (by majority vote of a quorum of the board of
directors who were not parties to the proceeding, or if a quorum cannot be
obtained, by a committee of the board selected as described in Section
33-775(b)(2); by special legal counsel selected by the board of directors or
members thereof as described in Section 33-775(b)(3); by shareholders) that the
individual met the standard set forth in Section 33-771; or (3) the court, upon
application by the individual, determines in view of all the circumstances that
such person is reasonably entitled to be indemnified. Also, unless limited by
its Certificate of Incorporation, a corporation must indemnify an individual who
was wholly successful on the merits or otherwise against reasonable expenses
incurred by him in connection with a proceeding to which he was a party because
of his relationship as director, officer, employee or agent of the corporation.
The statute does specifically authorize a corporation to procure indemnification
insurance on behalf of an individual who is or was a director, officer, employer
or agent of the corporation. Consistent with the statute, Aetna Inc. has
procured insurance from Lloyd's of London and several major United States excess
insurers for its directors and officers and the directors and officers of its
subsidiaries, including the Depositor.
<PAGE>
Item 16. Exhibits and Financial Statement Schedules
Exhibits
(4) Instruments Defining the Rights of Security Holders:
(a) Variable Annuity Contract G-MP1(5/97)(1)
(b) Variable Annuity Contract Certificate MP1CERT(5/97)(1)
(c) Variable Annuity Contract I-MP1(5/97)(1)
(d) Variable Annuity Contract G-MP1(5/96)(2)
(e) Variable Annuity Contract Certificate MP1CERT(5/96)(2)
(f) Variable Annuity Contract I-MP1(5/96)(2)
(g) Variable Annuity Contract G-CDA-96(NY)(2)
(h) Variable Annuity Contract Certificate GMCC-96(NY)(2)
(i) Variable Annuity Contracts and Certificates G-CDA-IC(NQ),
G-CDA-IC(IR), I-CDA-IC(NQ/MP), I-CDA-IC(IR/MP),
GMCC-IC(NQ)(3)
(j) Variable Annuity Contracts and Certificates G-CDA-IC(IR/NY),
GMCC-IC(IR/NY), G-CDA-IC(NQ/NY), and GMCC-IC(NQ/NY)(4)
(k) Endorsements MP1IRA(5/97) and I-MP1IRA(5/97) to Contracts
G-MP1(5/96) and MP1CERT(5/96)(2)
(l) Endorsements MP1QP(5/97) and I-MP1QP(5/97) to Contracts
G-MP1(5/96) and MP1CERT(5/96)(2)
(m) Endorsements MP1TDA(5/97) and I-MP1TDA(5/97) to Contracts
G-MP1(5/96) and MP1CERT(5/96)(2)
(n) Endorsements MP1DC(5/97) and I-MP1DC(5/97) to Contracts
G-MP1(5/96) and MP1CERT(5/96)(2)
(o) Endorsement G-MP1IRA(11/96) to Contracts G-CDA-96(NY) and
GMCC-96(NY)(2)
(p) Endorsements MP1END(5/97) and I-MP1END (5/97)
to Contracts GMP1(5/96) and MP1CERT(5/96)(2)
(q) Endorsement MP1END(9/97) to Contract G-MP1(5/97) and
Certificate MP1CERT(5/97)(1)
(r) Endorsement I-MP1END(9/97) to Contract I-MP1(5/97)(1)
(s) Variable Annuity Contract Application (300-MAR-IB)(5)
(t) Variable Annuity Contract Application (710.6.13)(5)
(u) Form of Aetna Growth Plus Group Variable, Fixed or
Combination Annuity Contract (Nonparticipating)
(G-CDA-GPI(4/94))(6)
(v) Form of Aetna Growth Plus Individual Variable, Fixed or
Combination Annuity Contract (Nonparticipating)
(I-CDA-GPI(4/94))(6)
(w) Form of Certificate of Group Annuity Coverage
(GP1CERT(4/94))(6)
<PAGE>
(x) Form of Variable Fixed or Combination Annuity Contract
(Nonparticipating) (I-GP1(5/96))(7)
(y) Form of Group Variable, Fixed or Combination Annuity Conract
(nonparticipating (G-GP1(5/96))(7)
(z) Form of Certificate of Group Annuity Coverage
(GP1CERT(5/96))(7)
(aa) Form of Endorsement (GP1END(5/97)) to Contract
G-GP1(5/96)(7)
(bb) Form of Application for Aetna Growth Plus Group Variable,
Fixed or Combination Annuity Contract (Nonparticipating)
(GP1APP(4/94))(6)
(cc) Form of Application for Aetna Growth Plus Individual
Variable, Fixed or Combination Annuity Contract
(Nonparticipating) (I-GP1APP(4/94))(6)
(5) Opinion re Legality
(10) Material contracts are listed under Exhibit 10 in the
Company's Form 10-K for the fiscal year ended December 31,
1996 (File No. 33-23376), as filed electronically with the
Commission on March 28, 1997 (Accession No.
0000912057-97-010670). Each of the Exhibits so listed is
incorporated by reference as indicated in the Form 10-K.
(15) Letter Re: Unaudited Interim Financial Information
(23) (a) Consent of Independent Auditors
(b) Consent of Legal Counsel (Included in Item (5) above)
(24) (a) Powers of Attorney(1)
(b) Certificate of Resolution Authorizing Signature by Power
of Attorney(8)
(27) Financial Data Schedule
Exhibits other than those listed above are omitted because they are not required
or are not applicable.
1. Incorporated by reference to Post-Effective Amendment No. 30 to
Registration Statement on Form N-4 (File No. 33-34370), as filed
electronically on September 29, 1997 (Accession No. 0000950146-97-001485).
2. Incorporated by reference to Post-Effective Amendment No. 26 to
Registration Statement on Form N-4 (File No. 33-34370), as filed
electronically on February 21, 1997 (Accession No. 0000950146-97-000226).
3. Incorporated by reference to Post-Effective Amendment No. 15 to
Registration Statement on Form N-4 (File No. 33-34370), as filed on April
19, 1994.
4. Incorporated by reference to Post-Effective Amendment No. 1 to Registration
Statement on Form N-4 (File No. 33-87932), as filed electronically on
September 19, 1995 (Accession No. 0000950109-95-003821).
5. Incorporated by reference to Post-Effective Amendment No. 29 to
Registration Statement on Form N-4 (File No. 33-34370), as filed
electronically on August 18, 1997 (Accession No. 0000950146-97-001290).
6. Incorporated by reference to Registration Statement on Form N-4 (File No.
33-79122), as filed on May 18, 1994.
<PAGE>
7. Incorporated by reference to Post-Effective Amendment No. 7 to Registration
Statement on Form N-4 (File No. 33-79122), as filed electronically on April
22, 1997 (Accession No. 0000950146-97-00631).
8. Incorporated by reference to Post-Effective Amendment No. 5 to Registration
Statement on Form N-4 (File No. 33-75986), as filed electronically on April
12, 1996 (Accession No. 0000912057-96-006383).
<PAGE>
Item 17. Undertakings
The undersigned registrant hereby undertakes as follows, pursuant to Item
512 of Regulation S-K:
(a) Rule 415 offerings:
(1) To file, during any period in which offers or sales of the
registered securities are being made, a post-effective amendment
to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material changes to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(h) Request for Acceleration of Effective Date:
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, 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 a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a 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
<PAGE>
controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 18. Financial Statements and Schedules
Not Applicable
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets the
requirements for filing on Form S-2 and has duly caused this Post-Effective
Amendment No. 1 to the Registration Statement on Form S-2 (File No. 333-24645)
to be signed on its behalf by the undersigned, thereunto duly authorized in the
City of Hartford, State of Connecticut, on this 18th day of November, 1997.
By: AETNA LIFE INSURANCE AND
ANNUITY COMPANY
By: Thomas J. McInerney*
-----------------------------
Thomas J. McInerney
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
Thomas J. McInerney* Director and President )
- ------------------------------------ (principal executive officer) )
Thomas J. McInerney )
)
)
Timothy A. Holt* Director and Chief Financial Officer ) November
- ----------------------------------- )
Timothy A. Holt ) 18, 1997
)
)
Christopher J. Burns* Director )
- ------------------------------------ )
Christopher J. Burns )
)
)
J. Scott Fox* Director )
- ------------------------------------ )
J. Scott Fox )
)
)
John Y. Kim* Director )
- ------------------------------------ )
John Y. Kim )
)
)
Shaun P. Mathews* Director )
- ------------------------------------ )
Shaun P. Mathews )
<PAGE>
Deborah Koltenuk* Vice President and Treasurer, )
- ------------------------------------ Corporate Controller )
Deborah Koltenuk )
By: /s/ Julie E. Rockmore
--------------------------------------------
Julie E. Rockmore
*Attorney-in-Fact
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Page
16(4) Instruments Defining the Rights of Security Holders:
16(4)(a) Variable Annuity Contract G-MP1(5/97) *
16(4)(b) Variable Annuity Contract Certificate MP1CERT(5/97) *
16(4)(c) Variable Annuity Contract I-MP1(5/97) *
16(4)(d) Variable Annuity Contract G-MP1(5/96) *
16(4)(e) Variable Annuity Contract Certificate MP1CERT(5/96) *
16(4)(f) Variable Annuity Contract I-MP1(5/96) *
16(4)(g) Variable Annuity Contract G-CDA-96(NY) *
16(4)(h) Variable Annuity Contract Certificate GMCC-96(NY) *
16(4)(i) Variable Annuity Contracts and Certificates G-CDA-IC(NQ), *
G-CDA-IC(IR), I-CDA-IC(NQ/MP), I-CDA-IC(IR/MP),
GMCC-IC(NQ)
16(4)(j) Variable Annuity Contracts and Certificates G-CDA-IC(IR/NY), *
GMCC-IC(IR/NY), G-CDA-IC(NQ/NY), and
GMCC-IC(NQ/NY)
16(4)(k) Endorsements MP1IRA(5/97) and I-MP1IRA(5/97) to Contracts *
G-MP1(5/96) and MP1CERT(5/96)
16(4)(l) Endorsements MP1QP(5/97) and I-MP1QP(5/97) to Contracts *
G-MP1(5/96) and MP1CERT(5/96)
16(4)(m) Endorsements MP1TDA(5/97) and I-MP1TDA(5/97) to Contracts *
G-MP1(5/96) and MP1CERT(5/96)
*Incorporated by reference
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Exhibit Page
<S> <C> <C>
16(4)(n) Endorsements MP1DC(5/97) and I-MP1DC(5/97) to Contracts *
G-MP1(5/96) and MP1CERT(5/96)
16(4)(o) Endorsement G-MP1IRA(11/96) to Contracts G-CDA-96(NY)and GMCC-96(NY) *
16(4)(p) Endorsements MP1END(5/97) and I-MP1END (5/97) to Contracts GMP1(5/96) and *
MP1CERT(5/96)
16(4)(q) Endorsement MP1END(9/97) to Contract G-MP1(5/97) and Certificate *
MP1CERT(5/97)
16(4)(r) Endorsement I-MP1END(9/97) to Contract I-MP1(5/97) *
16(4)(s) Variable Annuity Contract Application (300-MAR-IB) *
16(4)(t) Variable Annuity Contract Application (710.6.13) *
16(4)(u) Form of Aetna Growth Plus Group Variable, Fixed or Combination Annuity Contract *
(Nonparticipating) (G-CDA-GPI(4/94))
16(4)(v) Form of Aetna Growth Plus Individual Variable, Fixed or Combination Annuity *
Contract (Nonparticipating) }
(I-CDA-GPI(4/94))
16(4)(w) Form of Certificate of Group Annuity Coverage (GP1CERT(4/94)) *
16(4)(x) Form of Variable Fixed or Combination Annuity Contract (Nonparticipating) *
(I-GP1(5/96))
16(4)(y) Form of Group Variable, Fixed or Combination Annuity Conract (nonparticipating *
(G-GP1(5/96))
16(4)(z) Form of Certificate of Group Annuity Coverage (GP1CERT(5/96)) *
16(4)(aa) Form of Endorsement (GP1END(5/97)) to Contract G-GP1(5/96) *
16(4)(bb) Form of Application for Aetna Growth Plus Group Variable, Fixed or Combination *
Annuity Contract (Nonparticipating) (GP1APP(4/94))
</TABLE>
*Incorporated by reference
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Exhibit Page
<S> <C> <C>
16(4)(cc) Form of Application for Aetna Growth Plus Individual Variable, Fixed or *
Combination Annuity Contract (Nonparticipating)
(I-GP1APP(4/94))
16(5) Opinion re Legality
-----------------
16(10) Material contracts are listed under Exhibit 10 in the Company's Form 10-K for *
the fiscal year ended December 31, 1996 (File No. 33-23376), as filed
electronically with the Commission on March 28, 1997 (Accession No.
0000912057-97-010670). Each of the Exhibits so listed is incorporated by
reference as indicated in the Form 10-K.
16(15) Letter re unaudited interim financial information -----------------
16(23)(a) Consent of Independent Auditors
-----------------
16(23)(b) Consent of Legal Counsel (Included in Item (5) above) *
16(24)(a) Powers of Attorney *
16(24)(b) Certificate of Resolution Authorizing Signature by Power of Attorney *
16(27) Financial Data Schedule
-----------------
</TABLE>
*Incorporated by reference
[Aetna letterhead]
[Aetna logo]
151 Farmington Avenue
Hartford, CT 06156
Julie E. Rockmore
Counsel
Law Division, RE4A
Investments & Financial Services
(860) 273-4686
November 18, 1997 Fax: (860) 273-8340
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, DC 20549
Re: Aetna Life Insurance and Annuity Company
Post-Effective Amendment No. 1 to
Registration Statement on Form S-2, File No. 333-24645
Prospectus Title: ALIAC Guaranteed Account
Dear Sirs:
As Counsel of Aetna Life Insurance and Annuity Company (the "Company"), I have
represented the Company in connection with the ALIAC Guaranteed Account (the
"Guaranteed Account"), a guaranteed interest option available under certain
variable annuity contracts, and the Form S-2 Registration Statement relating to
such account.
In connection with such representation, I have reviewed Post-Effective Amendment
No. 1 to the Registration Statement on Form S-2 for the Guaranteed Account,
including the prospectus, the prospectus supplement, and relevant proceedings of
the Board of Directors.
Based upon this review, and assuming the securities represented by the
Guaranteed Account are issued in accordance with the provisions of the
prospectus, I am of the opinion that the securities, when sold, will have been
legally issued, and will constitute a legal and binding obligation of the
Company.
I further consent to the use of this opinion as an exhibit to Post-Effective
Amendment No. 1 to the Registration Statement.
Sincerely,
/s/ Julie E. Rockmore
Julie E. Rockmore
Counsel
Aetna Life Insurance and Annuity Company
Letter Re: Unaudited Interim Financial Information
Aetna Life Insurance and Annuity Company
Hartford, Connecticut
Ladies and Gentlemen:
With respect to the registration statement No. 333-24645 on Post-Effective
Amendment No. 1 on Form S-2, we acknowledge our awareness of the use therein of
our reports dated May 5, 1997, August 4, 1997 and November 3, 1997 related to
our reviews of interim financial information of Aetna Life Insurance and Annuity
Company.
Pursuant to Rule 436(c) under the Securities Act of 1933, such reports are not
considered a part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the meaning
of Sections 7 and 11 of the Act.
/s/ KPMG Peat Marwick LLP
Hartford, Connecticut
November 14, 1997
Consent of Independent Auditors
The Shareholder and Board of Directors of
Aetna Life Insurance and Annuity Company:
We consent to the incorporation by reference in the registration statement No.
333-24645 on Post-Effective Amendment No. 1 on Form S-2 of Aetna Life Insurance
and Annuity Company (the "Company") of our reports dated February 4, 1997 with
respect to the consolidated balance sheets of the Company as of December 31,
1996 and 1995, and the related consolidated statements of income, changes in
shareholder's equity, and cash flows and the related schedules for each of the
years in the three-year period ended December 31, 1996, which reports appear in
the Company's 1996 Annual Report on Form 10-K and to the reference to our firm
under the heading "Experts" in the Prospectus.
/s/ KPMG Peat Marwick LLP
Hartford, Connecticut
November 14, 1997
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE FINANCIAL STATEMENTS CONTAINED IN THE FORM 10-Q FOR THE
FISCAL QUARTER ENDED SEPTEMBER 30, 1997 FOR AETNA LIFE
INSURANCE AND ANNUITY COMPANY AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000837010
<NAME> Aetna Life Insurance and Annuity Company
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<DEBT-HELD-FOR-SALE> 13,257
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 222
<MORTGAGE> 13
<REAL-ESTATE> 0
<TOTAL-INVEST> 14,058
<CASH> 614
<RECOVER-REINSURE> 9
<DEFERRED-ACQUISITION> 1,621
<TOTAL-ASSETS> 38,522
<POLICY-LOSSES> 3,758
<UNEARNED-PREMIUMS> 1
<POLICY-OTHER> 27
<POLICY-HOLDER-FUNDS> 11,075
<NOTES-PAYABLE> 0
0
0
<COMMON> 3
<OTHER-SE> 1,783
<TOTAL-LIABILITY-AND-EQUITY> 38,522
200
<INVESTMENT-INCOME> 805
<INVESTMENT-GAINS> 18
<OTHER-INCOME> 29
<BENEFITS> 853
<UNDERWRITING-AMORTIZATION> 0
<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> 209
<INCOME-TAX> 64
<INCOME-CONTINUING> 145
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 145
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS CONTAINED IN THE FORM 10K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1996 FOR AETNA LIFE INSURANCE AND ANNUITY COMPANY AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000837010
<NAME> AETNA LIFE INSURANCE AND ANNUITY COMPANY
<MULTIPLIER> 1,000,000
<CURRENCY> U.S Dollars
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 12,906
<DEBT-HELD-FOR-SALE> 0
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 200
<EQUITIES> 13
<MORTGAGE> 0
<REAL-ESTATE> 13,553
<TOTAL-INVEST> 459
<CASH> 10
<RECOVER-REINSURE> 1,515
<DEFERRED-ACQUISITION> 31,693
<TOTAL-ASSETS> 3,617
<POLICY-LOSSES> 1
<UNEARNED-PREMIUMS> 28
<POLICY-OTHER> 10,664
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
0
3
<COMMON> 1,607
<OTHER-SE> 31,693
<TOTAL-LIABILITY-AND-EQUITY> 134
1,046
<INVESTMENT-INCOME> 20
<INVESTMENT-GAINS> 45
<OTHER-INCOME> 969
<BENEFITS> 0
<UNDERWRITING-AMORTIZATION> 0
<UNDERWRITING-OTHER> 199
<INCOME-PRETAX> 58
<INCOME-TAX> 141
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 141
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
