As filed with the Securities and Exchange Registration No. 33-64331
Commission on November 24, 1997
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 3
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. [X]
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 [X]
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
Form S-2 May 1, 1997 And As Amended
- -------- By Supplement Dated
Item No. Part A (Prospectus) December 31, 1997
- -------- ------------------- ---------------
<S> <C> <C>
1 Forepart of the Registration Statement and Outside Cover Page
Front Cover Page of Prospectus.......................
2 Inside Front and Outside Back Cover Pages Cover Page
of Prospectus........................................
3 Summary Information, Risk Factors and Ratio of Summary Information, and as amended;
Earnings to Fixed Charges............................ Description of Contracts, and as
amended; Financial Statements
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 Registered........... Description of Contracts, and as amended
10 Interests of Named Experts and Counsel............... Not Applicable
11 Information with Respect to the Not applicable
Registrant...........................................
12 Incorporation of Certain Information by Reference.... Incorporation of Certain Document by
Reference, and as amended
13 Disclosure of Commission Position on Indemnification Indemnification
for Securities Act Liabilities.......................
</TABLE>
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY
AETNA MULTI-RATE ANNUITY
Supplement dated December 31, 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] Inside Cover of Prospectus - Incorporation of Certain Documents By
Reference
The following is added to the section entitled "Incorporation Of Certain
Documents By Reference".
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] Page 5 - Summary Information
The tenth paragraph of the section entitled "Summary Information" has been
replaced with the following:
After you own your Contract for one year, you are entitled to one Special
Withdrawal per year, up to a maximum amount equal to 10% of the current value of
your Contract at the time of your withdrawal. Also, if the current value of your
Contract meets the minimum dollar amounts established by the Company, you can
arrange a program of Systematic Withdrawals. Systematic Withdrawals allow you to
withdraw specified amounts or percentages of your Contract's current value or to
withdraw amounts over specified time periods that you determine. Similarly, for
Contracts purchased as Individual Retirement Annuities, except for an Individual
Retirement Annuity under Section 408A of the Internal Revenue Code of 1986
("Roth IRA"), if you are at least age 70 1/2 and the current value of your
Contract meets the minimum dollar amounts established by the Company, you can
arrange a program of annual withdrawals through the Estate Conservation Option.
This option is designed to provide annual payments in an amount equal to the
minimum distribution that is required to be withdrawn each year under the
federal tax laws. Surrender fees do not apply to Special Withdrawals, Systematic
Withdrawals or withdrawals under the Estate Conservation Option or the Nursing
Home Waiver, but such withdrawals may be subject to taxes, penalties and
withholding taxes. (See "Federal Income Taxes.")
<PAGE>
[bullet] Page 7 - Description of Contracts
The fourth paragraph of the section entitled THE APPLICATION PROCESS has been
replaced with the following:
A Contract may be purchased as a rollover Individual Retirement Annuity by
transferring amounts previously accumulated (rollover amounts) under another
Individual Retirement Annuity or an Individual Retirement Account under Section
408 of the Internal Revenue Code of 1986 ("Tax Code"), or a retirement plan
qualified under Section 401 or 403 of the Tax Code. A Roth IRA Contract is a
special form of Individual Retirement Annuity which can accept nondeductible
contributions. When used as a Roth IRA, the Contract can only accept transfers
and rollovers from an Individual Retirement Annuity/Individual Account, subject
to ordinary income tax, or from another Roth IRA. Subject to state regulatory
approval, Roth IRA Contracts will be available on and after January 1, 1998.
[bullet] Page 10 -Withdrawals and Surrenders
The following is added to the section entitled THE ESTATE CONSERVATION OPTION.
Estate Conservation Option is not available under the Roth IRA Contract.
[bullet] Page 16 - Taxes You or Others Pay - Qualified Contracts
The following is added to the section entitled CONTRACTS PURCHASED AS A ROLLOVER
INDIVIDUAL RETIREMENT ANNUITY.
For Roth IRAs, the minimum distribution rules do not apply prior to your death.
You are not required to begin taking minimum annual distributions by April 1 of
the calendar year following the calendar year you attain age 70-1/2. The general
rule that Annuity payments may not extend beyond your life/life expectancy or
beyond the joint lives/joint life expectancies of you and your Beneficiary does
not apply to a Roth IRA. Minimum distribution rules apply to the Beneficiary at
your death.
Section 408A of the Tax Code permits eligible individuals to contribute to a
Roth IRA on an after-tax (nondeductible) basis.
Distributions from other types of qualified plans are not permitted to be
transferred or rolled over to a Roth IRA. A Roth IRA can accept
transfers/rollovers only from an IRA, subject to ordinary income tax, or from
another Roth IRA.
Any "qualified" distribution from a Roth IRA is not includible in gross income.
A "qualified" distribution is any distribution made after you have attained age
59-1/2, or on account of your death or disability, or for a qualified first-time
home purchase. A distribution will not be treated as "qualified" if it is made
within the 5-taxable year period
<PAGE>
beginning with the first taxable year for which a contribution was made. If a
distribution is not "qualified", the accumulated earnings are includible in
income.
The 10% premature distribution penalty will apply to the taxable portion of the
distribution unless one of the exceptions under the Tax Code applies. A partial
distribution will first be treated as a return of cost basis (i.e. aggregate
amount of contributions).
<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.
Item 16. Exhibits and Financial Statement Schedules
(4)(a) Group Annuity Contract (Form No. G1-MGA-95)(1)
(4)(b) Individual Annuity Contract (Form No. I1-MGA-95)(2)
(4)(c) Certificate (G1CC-MGA-95) to Group Annuity Contract Form No.
G1-MGA-95
(4)(d) Endorsement (E1-MGAIRA-95-2) to Group Annuity Contract Form
No. G1-MGA-95 and Certificate No. G1CC-MGA-95
(4)(e) Endorsement (E1-MGAROTH-97) to Group Annuity Contract Form No.
G1-MGA-95 and Certificate No. G1CC-MGA-95
(5) Opinion as to Legality
<PAGE>
(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), which was filed 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 Financials
(23)(a) Consent of Independent Auditors
(23)(b) Consent of Counsel (included in Exhibit 16(5) above)
(24)(a) Powers of Attorney(3)
(24)(b) Certificate of Resolution Authorizing Signature by Power of
Attorney(4)
(27) Financial Data Schedule
Exhibits other than these listed are omitted because they are not required or
are not applicable.
1. Incorporated by reference to the Registration Statement on Form S-2 (File
No. 33-64331), as filed electronically, on November 16, 1995 (Accession No.
0000908634-95-000119).
2. Incorporated by reference to Pre-Effective Amendment No. 2 to Registration
Statement on Form S-2 (File No. 33-64331), as filed electronically, on
January 17, 1996 (Accession No. 0000908634-96-000006).
3. 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).
4. 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 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 to the Registration Statement on Form S-2 (File No. 33-64331) to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of Hartford, State of Connecticut, on this 24th 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. 3 to 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 )
- ------------------------------------ )
Thomas J. McInerney (principal executive officer) )
)
Timothy A. Holt* Director and Chief Financial Officer ) November
- ----------------------------------- )
Timothy A. Holt ) 24, 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 )
)
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
<TABLE>
<CAPTION>
Exhibit No. Exhibit Page
<S> <C> <C>
4(a) Group Annuity Contract (Form No. G1-MGA-95) *
4(b) Individual Annuity Contract (Form No. I1-MGA-95) *
4(c) Certificate (G1CC-MGA-95) to Group Annuity Contract Form No. G1-MGA-95 --------------
4(d) Endorsement (E1-MGAIRA-95-2) to Group Annuity Contract Form No. G1-MGA-95
and Certificate No. G1CC-MGA-95 --------------
4(e) Endorsement (E1-MGAROTH-97) to Group Annuity Contract Form No. G1-MGA-95 and
Certificate No. G1CC-MGA-95 --------------
5 Opinion as to 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), which was filed
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 ---------------
23(b) Consent of Counsel (included in Exhibit 16(5) above) *
24(a) Powers of Attorney *
24(b) Certificate of Resolution Authorizing Signature by Power of Attorney *
27 Financial Data Schedule --------------
</TABLE>
*Incorporated by reference
-----------------------------------
Aetna Life Insurance and Annuity
Company Home Office: 151 Farmington
Avenue Hartford, Connecticut 06156
(800) 531-4547
A Stock Company
Aetna Life Insurance and Annuity
Company, herein called Aetna,
agrees to pay the benefits stated
in this Contract.
- --------------------------------------------------------------------------------
Certificate of Group To the Certificate Holder:
Annuity Coverage
Aetna certifies that coverage is in
force for you under the stated
Group Annuity Contract and
Certificate numbers. All data shown
here is taken from Aetna records
and is based upon information
furnished by you.
This Certificate is a summary of
the Group Annuity Contract
provisions. It replaces any and all
prior certificates, riders, or
amendments issued to you under the
stated Contract and Certificate
numbers. This Certificate is for
information only and is not a part
of the Contract.
- --------------------------------------------------------------------------------
Right to Cancel You may cancel the Account
evidenced by this Certificate
within 10 days of receiving it, by
sending a written notice to Aetna
at the above address or to the
agent from whom it was purchased.
Aetna will return all payments made
for this Certificate within 7 days
after it receives the notice of
cancellation and this Certificate.
/s/ Dan Kearney /s/ Susan E. Schechter
President Secretary
- --------------------------------------------------------------------------------
Certificate Holder(s) Certificate No.
SPECIMEN SPECIMEN
- --------------------------------------------------------------------------------
Contract Holder Group Annuity Contract No.
E.G. ANY BROKER SPECIMEN
- --------------------------------------------------------------------------------
Annuitant Name Type of Plan
JOHN DOE JR. SPECIMEN
- --------------------------------------------------------------------------------
THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA. APPLICATION OF A
MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR DECREASE IN THE
CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT APPLY TO A
GUARANTEED PERIOD AT THE TIME OF ITS MATURITY.
G1CC-MGA-95
<PAGE>
Specifications
- --------------------------------------------------------------------------------
Guaranteed Interest Rate There is a guaranteed interest rate
for the Purchase Payment held in
the AMG Account.
(See Contract Schedule I).
- --------------------------------------------------------------------------------
Deduction from Purchase Payment The Purchase Payment may be subject
to a deduction for premium taxes,
if applicable. (See 3.01).
- --------------------------------------------------------------------------------
Surrender Fee There may be a charge deducted upon
surrender. (See Contract
Schedule I).
2
<PAGE>
Contract Schedule I
Accumulation Period
ALIAC Modified Guaranteed Account (AMG Account)
- --------------------------------------------------------------------------------
Minimum Guaranteed Interest Rate: [3.0%]
(effective annual rate of return)
Maintenance Fee: The annual Maintenance Fee is
[$0.] [If the Account's Current
Value is [$50,000] or more on
the date the Maintenance Fee is
to be deducted, the Maintenance
Fee is $0.]
Annuity Date: The Annuity Date will be the
later of the date the Annuitant
reaches age [85] or the [10th]
anniversary of the Purchase
Payment.
Minimum Purchase Payment: [$10,000.]
Maximum Purchase Payment: Purchase Payments exceeding
[$1,000,000] must be approved by
Aetna.
Minimum Guaranteed Period Allocation Amount: [$1,000.]
Maximum Age of Certificate Holder at Issue: [90.] If there are joint
Certificate Holders, the age of
the oldest Certificate Holder
cannot exceed [90.]
Surrender Fee: Length of Time from Surrender Fee
Certificate Effective Date (Percentage of Net
(Years) Purchase Payment
Withdrawn)
Less than 1 year 7%
1 year but less than 2 7%
2 years but less than 3 6%
3 years but less than 4 6%
4 years but less than 5 5%
5 years but less than 6 4%
6 years but less than 7 2%
7 years or more 0%
After seven years have elapsed from the certificate
effective date, the Surrender Fee will no longer be
assessed.
Special Withdrawal: [10%]
Systematic Withdrawal Option (SWO): The specified payment or
specified percentage may not be
greater than [10%.]
See 1. GENERAL DEFINITIONS for explanations.
3
<PAGE>
Contract Schedule II
Annuity Period
Fixed Annuity
- --------------------------------------------------------------------------------
Minimum Guaranteed Interest Rate: [3.0%]
(effective annual rate of return):
See 1. GENERAL DEFINITIONS for explanations.
4
<PAGE>
TABLE OF CONTENTS
I. GENERAL DEFINITIONS
- --------------------------------------------------------------------------------
Page
1.01 Account...........................................................7
1.02 Accumulation Period...............................................7
1.03 Adjusted Current Value............................................7
1.04 Annuitant.........................................................7
1.05 Annuity...........................................................7
1.06 Annuity Date......................................................7
1.07 Beneficiary.......................................................7
1.08 Certificate Holder................................................7
1.09 Code..............................................................7
1.10 Contract..........................................................7
1.11 Contract Holder...................................................7
1.12 Current Value.....................................................8
1.13 Deposit Period....................................................8
1.14 Entire Contract...................................................8
1.15 Fixed Annuity.....................................................8
1.16 General Account...................................................8
1.17 Guaranteed Rates - AMG Account....................................8
1.18 Guaranteed Period.................................................8
1.19 Guaranteed Period Groups..........................................8
1.20 Maintenance Fee...................................................9
1.21 ALIAC Modified Guaranteed Account (AMG Account)...................9
1.22 Market Value Adjustment (MVA).....................................9
1.23 Matured Period Value..............................................9
1.24 Maturity Date.....................................................9
1.25 Net Purchase Payment..............................................9
1.26 Nonunitized Separate Account......................................9
1.27 Purchase Payment..................................................9
1.28 Reinvestment......................................................9
1.29 Surrender Value..................................................10
II. GENERAL PROVISIONS
- -------------------------------------------------------------------------------
2.01 Change of Contract...............................................10
2.02 Nonparticipating Contract........................................10
2.03 Payments and Elections...........................................10
2.04 State Laws.......................................................10
2.05 Control of Contract..............................................10
2.06 Designation of Beneficiary.......................................11
2.07 Misstatements and Adjustments....................................11
5
<PAGE>
Page
2.08 Incontestability.................................................11
2.09 Individual Certificates..........................................11
III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS
- -------------------------------------------------------------------------------
3.01 Net Purchase Payment.............................................11
3.02 Market Value Adjustment..........................................11
3.03 Notice to the Certificate Holder.................................12
3.04 Loans............................................................12
3.05 Systematic Withdrawal Option (SWO)...............................13
3.06 Death Benefit Amount.............................................14
3.07 Death Benefit Options available to Beneficiary...................14
3.08 Liquidation of Surrender Value...................................15
3.09 Surrender Fee....................................................16
3.10 Payment of Surrender Value.......................................16
3.11 Payment of Adjusted Current Value................................16
IV. ANNUITY PROVISIONS
- -------------------------------------------------------------------------------
4.01 Choices to be Made...............................................17
4.02 Terms of Annuity Options.........................................17
4.03 Death of Annuitant/Beneficiary...................................18
4.04 Annuity Options..................................................18
6
<PAGE>
I. GENERAL DEFINITIONS
- --------------------------------------------------------------------------------
1.01 Account: A record established for each
Certificate Holder to maintain the
value of the Net Purchase Payment held
on his/her behalf during the
Accumulation Period.
1.02 Accumulation Period: The period during which the Net
Purchase Payment is applied to an
Account to provide future Annuity
payment(s).
1.03 Adjusted Current Value: The Current Value of an Account plus
or minus any aggregate AMG Account
MVA, if applicable. (see 1.22)
1.04 Annuitant: The person named by the Certificate
Holder whose life is measured for
purposes of the guaranteed death
benefit and the duration of Annuity
payments under this Contract. Subject
to Aetna's approval, the Annuitant may
be changed by the Certificate Holder
by notifying Aetna in writing prior to
the Annuity Date of an Account.
1.05 Annuity: Payment of an income:
(a) For the life of one or two
persons;
(b) For a stated period; or
(c) For some combination of (a) and
(b).
1.06 Annuity Date: The date on which Annuity payments
begin under an Annuity option elected
by the Certificate Holder. (see 4.01)
The Annuity Date is shown on Contract
Schedule I. The Certificate Holder may
change this date by notifying Aetna at
least 30 days prior to the Annuity
Date.
1.07 Beneficiary: The person(s) entitled to receive
death benefits under the terms of this
Contract.
1.08 Certificate Holder: A person who purchases an interest in
this Contract as evidenced by a
certificate. Aetna reserves the right
to limit Account ownership to natural
persons. If more than one Certificate
Holder owns an Account, each
Certificate Holder will be a joint
Certificate Holder. Any joint
Certificate Holder must be the spouse
of the other joint Certificate Holder.
Joint Certificate Holders have joint
ownership rights and both must
authorize exercising any ownership
rights unless Aetna allows otherwise.
1.09 Code: The Internal Revenue Code of 1986, as
it may be amended from time to time.
1.10 Contract: This agreement between Aetna and the
Contract Holder.
1.11 Contract Holder: The entity to which the Contract is
issued.
7
<PAGE>
1.12 Current Value: The Net Purchase Payment plus any
interest credited; less all
Maintenance Fees deducted, any amounts
surrendered and any amounts applied to
an Annuity.
1.13 Deposit Period: A calendar week, a calendar month, a
calendar quarter, or any other period
of time specified by Aetna during
which the Net Purchase Payment and
Reinvestments are accepted into the
AMG Account for one or more Guaranteed
Periods. Aetna reserves the right to
extend the Deposit Period.
1.14 Entire Contract: The Contract, all attached pages and
any subsequent endorsements make up
the Entire Contract.
1.15 Fixed Annuity: An Annuity with payments that do not
vary in amount based on investment
performance.
1.16 General Account: The Account holding the assets of
Aetna, other than those assets held in
Aetna's separate accounts.
1.17 Guaranteed Rates Aetna will declare the interest rate
-- AMG Account: applicable for each Guaranteed Period
at the start of the Deposit Period for
that applicable Guaranteed Period. The
rate(s) are guaranteed by Aetna for
that Deposit Period and the ensuing
Guaranteed Period(s). The Guaranteed
Rates are effective annual rates of
return. That is, interest is credited
daily at a rate that will produce the
Guaranteed Interest Rate over the
period of a year. No Guaranteed Rate
will ever be less than the Minimum
Guaranteed Interest Rate shown on
Contract Schedule I.
For Guaranteed Periods of one year or
less, one Guaranteed Rate is credited
for the full Guaranteed Period. For
longer Guaranteed Periods, an initial
Guaranteed Rate is credited from the
date of deposit to the end of a
specified period within the Guaranteed
Period. There may be different
Guaranteed Rate(s) declared at the
beginning of the Deposit Period for
subsequent specified time intervals
throughout the Guaranteed Period.
1.18 Guaranteed Period: The period of time for which
Guaranteed Rates are guaranteed on the
Net Purchase Payment and Reinvestments
made during a current Deposit Period.
Such period begins on the day
following the close of the Deposit
Period and ends on the designated
Maturity Date. Guaranteed Periods are
offered at Aetna's discretion for
various lengths of time ranging up to
and including ten (10) years.
During a Deposit Period, Aetna may
make available any number of
Guaranteed Periods. The Certificate
Holder may allocate the Net Purchase
Payment or Reinvestment into any or
all of the available Guaranteed
Periods.
1.19 Guaranteed Period Groups: All Guaranteed Periods with the same
length of time from the close of the
Deposit Period until the designated
Maturity Date.
8
<PAGE>
1.20 Maintenance Fee: The Maintenance Fee, if any (see
Contract Schedule I), will be deducted
from the Account during the
Accumulation Period on each
anniversary of the date the Account is
established and upon surrender of the
entire Account.
1.21 ALIAC Modified An accumulation option where Aetna
Guaranteed Account guarantees rate(s) of interest for
(AMG Account): specified periods of time. All assets
of Aetna, including amounts in the
Nonunitized Separate Account, are
available to meet the guarantees under
the AMG Account.
1.22 Market Value Adjustment (MVA):An adjustment that may apply to the
amount withdrawn from a Guaranteed
Period prior to the end of that
Guaranteed Period. The adjustment
reflects the change in the value of
the investment due to changes in
interest rates since the date of
deposit and is computed using the
formula given in 3.02. The adjustment
is expressed as a percentage or a
factor of each dollar being withdrawn.
1.23 Matured Period Value: The amount payable on a Guaranteed
Period's Maturity Date.
1.24 Maturity Date: The last day of a Guaranteed Period.
1.25 Net Purchase Payment: The Purchase Payment less premium
taxes, as applicable.
1.26 Nonunitized Separate Account: A separate account set up by Aetna
under Title 38, Section 38a-433, of
the Connecticut General Statutes, that
holds assets for AMG Account
Guaranteed Periods. There are no
discrete units for the AMG Account.
The Certificate Holder does not
participate in the investment gain or
loss from the assets held in the
Nonunitized Separate Account. Such
gain or loss is borne entirely by
Aetna. The assets held in the AMG
Account may be chargeable with
liabilities arising out of any other
business of Aetna.
1.27 Purchase Payment: Payment accepted by Aetna at its Home
Office. Aetna reserves the right to
refuse to accept any Purchase Payment
at any time for any reason. No advance
notice will be given to the Contract
Holder.
1.28 Reinvestment: Aetna will notify the Certificate
Holder of the approaching Maturity
Date at least 18 calendar days prior
to the end of any Guaranteed Period.
If no specific direction is given by
the Certificate Holder prior to the
Maturity Date, each Matured Period
Value will be reinvested on the
Maturity Date for a Guaranteed Period
of the same duration. If a Guaranteed
Period of the same duration is
unavailable, each Matured Period Value
will automatically be reinvested on
the Maturity Date for the next
shortest Guaranteed Period available.
If no shorter Guaranteed Period is
available, the next longer Guaranteed
Period will be used. Aetna will mail a
confirmation statement to the
Certificate Holder the next business
day after the Maturity Date.
9
<PAGE>
1.28 Reinvestment (Cont'd): At any time prior to the Maturity
Date, the Certificate Holder may
request in writing a reinvestment of
the Matured Period Value in a
different Guaranteed Period(s) or a
surrender of all or a part of the
Matured Period Value without an MVA or
Surrender Fee. Such request will be
executed on the Maturity Date. If
reinvesting in a different Guaranteed
Period(s), all or part of the Matured
Period Value will be reinvested in the
elected Guaranteed Period(s) at the
then prevailing rate(s). This
provision only applies to a written
request from the Certificate Holder
received at Aetna's Home Office in
good order at least five (5) days
prior to the Maturity Date.
1.29 Surrender Value: The amount payable by Aetna upon the
surrender of all or any portion of an
Account.
II. GENERAL PROVISIONS
- --------------------------------------------------------------------------------
2.01 Change of Contract: Only an authorized officer of Aetna
may change the terms of this Contract.
Aetna reserves the right to modify
this Contract to meet the requirements
of applicable state and federal laws
or regulations. Aetna will notify the
Contract Holder and Certificate Holder
in writing of any changes.
2.02 Nonparticipating Contract: The Contract Holder, Certificate
Holders or Beneficiaries will not have
a right to share in the earnings of
Aetna.
2.03 Payments and Elections: While the Certificate Holder is
living, Aetna will pay the Certificate
Holder any Annuity payments as and
when due. After the Certificate
Holder's death, or at the death of the
first Certificate Holder if the
Account is owned jointly, any Annuity
payments will be paid in accordance
with 4.03. Aetna will make any other
payments within seven (7) calendar
days of receipt of a written request
for payment, which is in good order,
at its Home Office, except as provided
in 3.10.
2.04 State Laws: The Contract and the certificates
comply with the laws of the state in
which they are delivered. Any
surrender, death, or Annuity payments
are equal to or greater than the
minimum required by such laws. Annuity
tables for legal reserve valuation
shall be as required by state law.
Such tables may be different from
Annuity tables used to determine
Annuity payments.
2.05 Control of Contract: This is a Contract between the
Contract Holder and Aetna. The
Contract Holder has title to the
Contract. Contract Holder rights are
limited to accepting or rejecting
Contract modifications. The
Certificate Holder has all other
rights to amounts held in his or her
Account.
2.05 Control of Contract (Cont'd): Each Certificate Holder shall own all
amounts held in his or her Account.
Each Certificate Holder may make any
choices allowed by this Contract for
his or her Account. Choices made under
this Contract must be in writing. If
the Account is owned jointly, both
joint Certificate Holders must
authorize any choices in writing.
Until receipt of such choices at
Aetna's Home Office, Aetna may rely on
any previous choices made.
10
<PAGE>
The Contract is not subject to the
claims of any creditors of the
Contract Holder or the Certificate
Holder, except to the extent permitted
by law.
The Certificate Holder may assign or
transfer his or her rights under the
Contract. Aetna reserves the right not
to accept assignment or transfer to a
nonnatural person. Any assignment or
transfer made must be submitted to
Aetna's Home Office in writing and
will not be effective until accepted
by Aetna. Aetna assumes no
responsibility for the validity of any
assignment.
2.06 Designation of Beneficiary: Each Certificate Holder shall name his
or her Beneficiary. The Beneficiary
may be changed at any time. Changes to
a Beneficiary must be submitted to
Aetna's Home Office in writing and
will not be effective until received
and recorded by Aetna.
2.07 Misstatements and If Aetna finds the age of any
Adjustments: Annuitant to be misstated, the correct
facts will be used to adjust payments.
2.08 Incontestability: Aetna will not contest this Contract
from its effective date.
2.09 Individual Certificates: Aetna shall issue a certificate to
each Certificate Holder. The
certificate will summarize certain
provisions of the Contract.
Certificates are for information only
and are not a part of the Contract,
except as evidence of the Certificate
Holder's interest in the Contract.
III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS
- --------------------------------------------------------------------------------
3.01 Net Purchase Payment: This amount is the actual Purchase
Payment less any applicable premium
tax. Aetna reserves the right to
deduct any premium tax at any time
from the Purchase Payment or from the
Certificate Holder's Account.
The Certificate Holder shall
designate, on the enrollment form, the
allocation percentage of the Net
Purchase Payment to be applied to each
of the available Guaranteed Periods
during the current Deposit Period(s).
The minimum amount that may be
allocated to any Guaranteed Period is
shown on Contract Schedule I.
3.02 Market Value Adjustment: There will be an MVA for any
withdrawal before the end of a
Guaranteed Period when the withdrawal
is due to:
3.02 Market Value (a) Any full or partial surrender, but
Adjustment (Cont'd): not for a partial withdrawal under
the Systematic Withdrawal Option
(see 3.05); or
(b) Payment made to a Beneficiary as
a death benefit during the
Accumulation Period, but not
payment made within six months
of the date of the Annuitant's
death (see 3.06); or
(c) An election of an Annuity option.
Only a positive MVA, if any,
will apply upon election of option
2 or 3 (see 4.04).
11
<PAGE>
Market value adjusted amounts will be
equal to the amount withdrawn
multiplied by the following ratio:
x
-----
365
(1 + i)
-----------
x
-----
365
(1 + j)
Where:
i is the Deposit Period Yield
j is the Current Yield
x is the number of days
remaining, (computed from
Wednesday of the week of
withdrawal) in the Guaranteed
Period.
The Deposit Period Yield will be
determined as follows:
(a) At the close of the last
business day of each week of the
Deposit Period, a yield will be
computed as the average of the
yields on that day of U.S.
Treasury Notes which mature in
the last three months of the
Guaranteed Period.
(b) The Deposit Period Yield is the
average of those yields for the
Deposit Period. If withdrawal is
made before the close of the
Deposit Period, it is the
average of those yields on each
week preceding withdrawal.
The Current Yield is the average of
the yields on the last business day of
the week preceding withdrawal on the
same U.S. Treasury Notes included in
the Deposit Period Yield.
In the event that no U.S. Treasury
Notes which mature in the last three
months of the Guaranteed Period exist,
Aetna reserves the right to use the
U.S. Treasury Notes that mature in the
following quarter.
3.03 Notice to the Certificate Holder: The Certificate Holder will receive
statements at least annually from
Aetna showing the value of any amounts
held in the AMG Account.
Such values will be as of a specific
date no more than 60 days before the
date of the notice.
3.04 Loans: Loans are not available under this
Contract.
12
<PAGE>
3.05 Systematic Withdrawal Option (SWO): The Certificate Holder may elect a
distribution option under which a
portion of the Account's Current Value
will automatically be surrendered and
distributed each year. SWO payments
will be calculated based on the
Account's full Current Value. The
distributed amount is withdrawn pro
rata from each Guaranteed Period(s). A
Surrender Fee will not be deducted
from any portion of the Current Value
which is paid as a distribution under
SWO.
Certificate Holders should consult
their tax adviser prior to requesting
this distribution option.
(a) Amount of Distribution: The
Certificate Holder may elect one
of the three payment methods
described below.
(1) Specified Payment: Payments
of a designated dollar
amount. The annual amount
may not be greater than the
percentage shown on Contract
Schedule I times the Current
Value at time of election.
This annual dollar amount
will remain constant. At its
discretion, Aetna may
require a minimum initial
payment amount;
(2) Specified Period: Payments
which are made over a period
of time which must be at
least 10 years. The annual
amount paid each year is
calculated by dividing the
Current Value as of December
31 of the prior year by the
number of payment years
remaining; or
(3) Specified Percentage:
Payment of a designated
percentage which cannot be
greater than the percentage
shown on Contract Schedule
I. The percentage may be
changed by written request.
Aetna reserves the right to
limit the number of times
the percentage may be
changed. The annual amount
is calculated by multiplying
the Current Value as of
December 31 of the year
prior to the payment by the
designated percentage.
Payments upon the Certificate Holder's
or Annuitant's death will be made to
the Beneficiary in the manner
described in 3.07.
3.05 Systematic Withdrawal (b) Minimum Initial Current Value:
Option (SWO) (Cont'd): At its discretion, Aetna may
require a minimum initial
Current Value for election of
this option. If after election
of this option the Current Value
is insufficient to make a
scheduled SWO payment, Aetna
will distribute the entire
Account balance.
13
<PAGE>
(c) Date of Distribution: The
Certificate Holder shall specify
the initial distribution date.
As elected by the Certificate
Holder, SWO payments will be
made on a monthly or quarterly
basis unless Aetna allows
otherwise. If SWO payments are
made more frequently than
annually, the designated annual
amount is divided by the number
of payments due each calendar
year. Subsequent distributions
will be made on the 15th of any
month or such other date as
Aetna may designate or allow.
(d) Election and Revocation: SWO may
be elected by submitting a
completed and signed election
form to Aetna's Home Office.
Aetna reserves the right to
establish the date when SWO may
first be elected by a
Certificate Holder. Once
elected, this option may be
revoked by the Certificate
Holder or spousal Beneficiary,
if elected after the Certificate
Holder's death, by submitting a
written request to Aetna at its
Home Office. Any revocation will
apply only to amounts not yet
paid. SWO may be elected only
once by the Certificate Holder
or by the spousal Beneficiary.
3.06 Death Benefit Amount: If the Certificate Holder or Annuitant
dies before Annuity payments start,
the Beneficiary is entitled to a death
benefit under the Account. If the
Account is owned jointly, the death
benefit is paid at the first death of
either of the joint Certificate
Holders. If the Account is held by
joint Certificate Holders, the
survivor will be deemed the designated
Beneficiary and any other Beneficiary
on record will be treated as the
contingent Beneficiary. If the
Certificate Holder is a nonnatural
person, the death benefit will be
payable at the death of the Annuitant.
If paid within 6 months of the date of
the Annuitant's death, the death
benefit will be the Current Value of
the Account. Otherwise, the death
benefit will be the Adjusted Current
Value of the Account determined as of
the claim date. The claim date is the
date when proof of death and the
Beneficiary's claim are received in
good order at Aetna's Home Office.
When the Certificate Holder dies and
the Certificate Holder is not the
Annuitant, the death benefit payable
will be subject to a Surrender Fee, if
applicable.
3.07 Death Benefit Options available Prior to any election, or until
to Beneficiary: amounts must be otherwise distributed
under this section, the Current Value
of the Account will be retained in the
Account. The following options are
available to the Beneficiary:
3.07 Death Benefit Options available to (a) When the Certificate Holder dies
Beneficiary (Cont'd): or if the Certificate Holder is
not a natural person, when the
Annuitant dies:
14
<PAGE>
(1) If the Beneficiary is the
Certificate Holder's surviving
spouse, the Beneficiary may
exercise all Certificate
Holder rights under the
Contract and continue in the
Accumulation Period, or may
elect (i) or (ii) below.
Distributions from the Account
are not required until the
spousal Beneficiary's death.
The spousal Beneficiary may
elect to:
(i) Apply some or all of the
death benefit amount to
an Annuity option 1, 2
or 3 (see 4.04); or
(ii) Receive, at any time, a
lump sum payment equal
to the death benefit
amount.
(2) If the Beneficiary is an
individual who is not the
Certificate Holder's
surviving spouse, then
options (i) or (ii) under (1)
above apply. Any portion of
the death benefit amount not
applied to Annuity option 1,
2 or 3 within one year of the
Certificate Holder's death,
must be distributed within
five years of the date of
death.
(3) If the Beneficiary is not a
natural person, then only
option (ii) under (1) above
applies.
(4) If no Beneficiary has been
designated, a lump sum
payment equal to the death
benefit amount will be made
to the Certificate Holder's
estate.
(b) If the Certificate Holder is
a natural person but is not
the Annuitant, and the
Annuitant dies, the
Beneficiary may elect either
to apply the death benefit
amount to Annuity option 1, 2
or 3 within 60 days of the
Annuitant's date of death, or
to receive a lump sum
payment.
3.08 Liquidation of Surrender Value: All or any portion of the Account's
Current Value may be surrendered at
any time prior to the Annuity Date.
Surrender requests can be submitted as
a percentage of the Account value or
as a specific dollar amount. Net
Purchase Payment amounts are withdrawn
first, and then the excess value, if
any. For any partial surrender,
amounts are withdrawn on a pro rata
basis from the Guaranteed Period(s)
Groups of the AMG Account in which the
Current Value is invested. Within a
Guaranteed Period Group, the amount to
be surrendered will be withdrawn first
from the oldest Deposit Period, then
from the next oldest, and so on until
the amount requested is satisfied.
15
<PAGE>
3.08 Liquidation of Surrender After deduction of the Maintenance Fee
Value (Cont'd): and any premium tax, if applicable,
the surrendered amount shall be
reduced by a Surrender Fee, if
applicable. An MVA may apply to
amounts surrendered.
3.09 Surrender Fee: The Surrender Fee only applies to the
Net Purchase Payment portion
surrendered and varies according to
the elapsed time from the certificate
effective date (see Contract Schedule
I).
No Surrender Fee is deducted from any
portion of the Current Value which is
paid:
(a) To a Beneficiary due to the
Annuitant's death before Annuity
payments start (see 3.06);
(b) As a premium for an Annuity
option 1, 2 or 3 under this
Contract (see 4.04);
(c) As a distribution under the SWO
provision (see 3.05);
(d) At least 12 months after the
date of the Purchase Payment, in
an amount equal to or less than
the special withdrawal
percentage shown on Contract
Schedule I times the Current
Value at the time of the
withdrawal. This applies to the
first surrender request, partial
or full, in a calendar year. The
Current Value is calculated as
of the date the surrender
request is received in good
order at Aetna's Home Office.
This waiver is not available to
the Certificate Holder while SWO
is in effect;
(e) For a full surrender of the
Account where the Current Value
of the Account is $2,500 or less
and no surrenders have been
taken from the Account within
the prior 12 months; or
(f) Upon withdrawal of any Matured
Period Value; or
(g) By Aetna under 3.11.
3.10 Payment of Surrender Value: Under certain emergency conditions, as
allowed by law, Aetna may defer
payment for a period of up to 6
months.
3.11 Payment of Adjusted Current Value: Upon 90 days' written notice to the
Certificate Holder, Aetna will
terminate any Account if the Current
Value becomes less than $2,500
immediately following any partial
surrender. A Surrender Fee will not be
deducted from the Adjusted Current
Value.
16
<PAGE>
IV. ANNUITY PROVISIONS
- --------------------------------------------------------------------------------
4.01 Choices to be Made: The Certificate Holder may tell Aetna
to apply any portion of the Adjusted
Current Value (minus any premium tax)
for an Annuity under option 1, 2, or 3
(see 4.04). The first Annuity payment
may not be earlier than twelve months
after the Purchase Payment. At least
30 days prior to the Annuity Date, the
Certificate Holder must tell Aetna
which Annuity option is elected.
Annuity payments will be made monthly,
unless the Certificate Holder elects
otherwise in writing.
In lieu of the election of an Annuity,
the Certificate Holder may elect a
lump sum payment.
The Annuity purchase rate for the
option chosen reflects the Minimum
Guaranteed Interest Rate (see Contract
Schedule II), but may reflect a higher
interest rate.
4.02 Terms of Annuity Options: (a) When payments start, the age of
the Annuitant plus the number of
years for which payments are
guaranteed must not exceed 95.
(b) An Annuity option may not be
elected if the first payment
would be less than $50 or if the
total payments in a year would
be less than $250 (less if
required by state law). Aetna
reserves the right to increase
the minimum first Annuity
payment amount and the annual
minimum Annuity payment amount
based upon increases reflected
in the Consumer Price
Index-Urban, (CPI-U) since July
1, 1993.
(c) If an Annuity under option 1, 2
or 3 is chosen and a larger
payment would result from
applying the Surrender Value to
a current Aetna single premium
immediate Annuity, Aetna will
make the larger payment.
(d) For purposes of calculating the
guaranteed first payment of an
Annuity, the Annuitant's and
second Annuitant's adjusted age
will be used. The Annuitant's
and second Annuitant's adjusted
age is his or her age as of the
birthday closest to the Annuity
commencement date reduced by one
year for Annuity commencement
dates occurring during the
period of time through December
31, 1999. The Annuitant's and
second Annuitant's age will be
reduced by two years for Annuity
commencement dates occurring
during the period of time from
January 1, 2000 through December
31, 2009. The Annuitant's and
second Annuitant's age will be
reduced by one additional year
for Annuity commencement dates
occurring in each succeeding
decade.
The Annuity purchase rates for
options 2 and 3 are based on
mortality from 1983 Table a.
17
<PAGE>
4.02 Terms of Annuity Options (Cont'd): (e) Once elected, an Annuity option
may not be revoked and Annuity
payments cannot be commuted to a
lump sum.
4.03 Death of Annuitant/ Beneficiary: If the Annuitant dies after Annuity
payments have begun, the death
benefit, if any, will be payable to
the Beneficiary as specified in the
Annuity option elected. Death benefits
will be paid at least as rapidly as
under the method of distribution in
effect at the Annuitant's death.
If the Certificate Holder who is not
the Annuitant dies after Annuity
payments have begun, any remaining
payments under the Annuity option
elected will be made to the
Beneficiary at least as rapidly as
under the method of distribution in
effect at the Certificate Holder's
death.
If the Account is held by joint
Certificate Holders, the survivor will
be deemed the designated Beneficiary
and any other Beneficiary on record
will be treated as the contingent
Beneficiary.
Aetna will require proof of death.
4.04 Annuity Options: Option 1 -- Payments for a Stated
Period of Time -- An Annuity will be
paid for the number of years chosen.
The number of years must be at least
10 and not more than 30.
If a nonspouse Beneficiary elects this
option at the death of the Certificate
Holder, the period selected may not
extend beyond the Beneficiary's life
expectancy.
Option 2 -- Life Income -- An Annuity
will be paid for the life of the
Annuitant. If also chosen, Aetna will
guarantee payments for 60, 120, 180,
or 240 months.
Option 3 -- Life Income Based upon the
Lives of Two Annuitants -- An Annuity
will be paid during the lives of the
Annuitant and a second Annuitant.
Payments will continue until both
Annuitants have died. When this option
is chosen, one of the following
choices must be made:
(a) 100% of the payment to continue
after the first death;
(b) 66-2/3% of the payment to
continue after the first death;
(c) 50% of the payment to continue
after the first death;
(d) Payments for a minimum of 120
months with 100% of the payment
to continue after the first
death; or
(e) 100% of the payment to continue
at the death of the second
Annuitant and 50% of the payment
to continue at the death of the
Annuitant.
Other Options -- Aetna may make other
options available as allowed by the
laws of the state in which this
Contract and the certificate is
delivered.
18
<PAGE>
OPTION 1
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Guaranteed Monthly Quarterly Semi-Annual Annual
Years Rate Payment Payment Payment Payment
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
5 3.00% 17.91 53.59 106.78 211.99
6 3.00% 15.14 45.30 90.27 179.22
7 3.00% 13.16 39.39 78.49 155.83
8 3.00% 11.68 34.96 69.66 138.31
9 3.00% 10.53 31.52 62.81 124.69
10 3.00% 9.61 28.77 57.33 113.82
11 3.00% 8.86 26.52 52.85 104.93
12 3.00% 8.24 24.65 49.13 97.54
13 3.00% 7.71 23.08 45.98 91.29
14 3.00% 7.26 21.73 43.29 85.95
15 3.00% 6.87 20.56 40.96 81.33
16 3.00% 6.53 19.54 38.93 77.29
17 3.00% 6.23 18.64 37.14 73.74
18 3.00% 5.96 17.84 35.56 70.59
19 3.00% 5.73 17.13 34.14 67.78
20 3.00% 5.51 16.50 32.87 65.26
21 3.00% 5.32 15.92 31.72 62.98
22 3.00% 5.15 15.40 30.68 60.92
23 3.00% 4.99 14.92 29.74 59.04
24 3.00% 4.84 14.49 28.88 57.33
25 3.00% 4.71 14.09 28.08 55.76
26 3.00% 4.59 13.73 27.36 54.31
27 3.00% 4.47 13.39 26.68 52.97
28 3.00% 4.37 13.08 26.06 51.74
29 3.00% 4.27 12.79 25.49 50.60
30 3.00% 4.18 12.52 24.95 49.53
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
OPTION 2
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
Payments Guaranteed for a Stated Period of Months
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Adjusted
Age of None 60 120 180 240
Annuitant
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
50 $ 4.05 $ 4.05 $ 4.03 $ 3.99 $ 3.93
51 4.12 4.11 4.09 4.05 3.99
52 4.19 4.19 4.16 4.11 4.04
53 4.27 4.26 4.23 4.18 4.10
54 4.35 4.34 4.31 4.25 4.16
55 4.44 4.42 4.39 4.32 4.22
56 4.53 4.51 4.47 4.40 4.29
57 4.62 4.61 4.56 4.48 4.35
58 4.72 4.71 4.65 4.56 4.42
59 4.83 4.81 4.75 4.64 4.49
60 4.95 4.93 4.86 4.73 4.55
61 5.07 5.05 4.97 4.83 4.62
62 5.20 5.17 5.08 4.92 4.69
63 5.34 5.31 5.20 5.02 4.76
64 5.49 5.45 5.33 5.12 4.83
65 5.65 5.61 5.47 5.22 4.89
66 5.82 5.77 5.61 5.33 4.96
67 6.01 5.94 5.75 5.44 5.02
68 6.20 6.13 5.91 5.54 5.08
69 6.41 6.33 6.07 5.65 5.14
70 6.64 6.54 6.23 5.76 5.19
71 6.88 6.76 6.41 5.86 5.24
72 7.14 7.00 6.59 5.97 5.28
73 7.43 7.26 6.77 6.06 5.32
74 7.73 7.53 6.96 6.16 5.35
75 8.06 7.82 7.14 6.25 5.38
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
20
<PAGE>
OPTION 3
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Adjusted Ages
- ----------------------------------------
Second
Annuitant Annuitant Option 3a Option 3b Option 3c Option 3d Option 3e
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.03
55 55 3.88 4.25 4.47 3.87 4.14
55 60 3.99 4.44 4.71 3.98 4.42
60 55 3.99 4.44 4.71 3.98 4.42
60 60 4.24 4.71 4.99 4.23 4.57
60 65 4.38 4.97 5.32 4.38 4.93
65 60 4.38 4.97 5.32 4.38 4.93
65 65 4.72 5.33 5.70 4.71 5.14
65 70 4.93 5.68 6.15 4.91 5.66
70 65 4.93 5.68 6.15 4.91 5.66
70 70 5.40 6.21 6.70 5.36 5.96
70 75 5.69 6.68 7.32 5.62 6.67
75 70 5.69 6.68 7.32 5.62 6.67
75 75 6.37 7.45 8.15 6.23 7.12
75 80 6.78 8.11 8.99 6.54 8.13
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
21
<PAGE>
- --------------------------------------------------------------------------------
Aetna Life Insurance and Annuity Company
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
(800) 531-4547
Certificate of Group Annuity Contract Coverage
- --------------------------------------------------------------------------------
THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA. APPLICATION OF A
MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR DECREASE IN THE
CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT APPLY TO A
GUARANTEED PERIOD AT THE TIME OF ITS MATURITY.
Aetna Life Insurance and Annuity Company
Endorsement
This Contract or Certificate is endorsed as follows.
The following provisions apply to a Contract which qualifies as an Individual
Retirement Annuity under Internal Revenue Code (Code) Section 408(b). In the
case of a conflict with any provision in the Contract, the provisions of this
Endorsement control.
1. The Certificate Holder and the Annuitant must be the same person. Joint
Certificate Holders are not permitted.
2. The Certificate Holder's Account and the Certificate Holder's rights under
the Contract are not transferable. The Certificate Holder may not sell,
assign, transfer, pledge or use as collateral for a loan or as security for
the performance of an obligation or for any other purpose, his or her
interest in the Contract to any person other than the issuer of the
Contract.
3. The Certificate Holder's entire interest in the Contract is nonforfeitable.
4. The Certificate Holder's Account is established for the exclusive benefit
of the Certificate Holder or his or her Beneficiary(ies).
5. The Purchase Payment under this Contract must be a cash rollover amount
under Code Section 402(c), 403(a)(4), 403(b)(8), or 408(d)(3). Aetna may
require verification that a rollover amount qualifies as such under the
Code. Payments to Simplified Employee Pension plans and annual deductible
and nondeductible contributions to Individual Retirement Annuities are not
accepted under the Contract.
6. The entire interest of the Certificate Holder will be distributed, or begin
to be distributed, no later than the first day of April following the
calendar year in which the Certificate Holder attains age 70-1/2 (required
beginning date), over:
(a) The life of the Certificate Holder, or the lives of the Certificate
Holder and his or her designated Beneficiary, or
(b) A period certain not extending beyond the life expectancy of the
Certificate Holder or the joint and last survivor expectancy of the
Certificate Holder and his or her designated Beneficiary.
Payments must be made in periodic payments at intervals of no longer than
one year. In addition, payments must be either nonincreasing or they may
increase only as provided in Question and Answer F-3 of Section
1.401(a)(9)-l of the Proposed Income Tax Regulations.
E1-MGAIRA-95-2
<PAGE>
All distributions made hereunder shall be made in accordance with the
requirements of Section 401(a)(9) of the Code, including the incidental
death benefit requirements of Section 401(a)(9)(G) of the Code, and the
regulations thereunder, including the minimum distribution incidental
benefit requirements of Section 1.401(a)(9)-2 of the Proposed Income Tax
Regulations.
Life expectancy is computed by use of the expected return multiples in
Tables V and VI of Section 1.72-9 of the Income Tax Regulations. Life
expectancy for distributions under an Annuity option may not be
recalculated.
7. If distributions are to be made under the Systematic Withdrawal Option
(SWO) after the required beginning date, a higher amount will be
distributed in any year if required under the minimum distribution
requirements of the Code. The minimum amount to be distributed each year,
beginning with the first calendar year for which distributions are required
and then for each succeeding calendar year, shall not be less than the
quotient obtained by dividing the Current Value as of December 31 of the
prior year by the lesser of (1) the applicable life expectancy or (2) if
the Certificate Owner's spouse is not the designated Beneficiary, the
applicable divisor determined from the table set forth in Question and
Answer 4 of Section 1.401(a)(9)-2 of the Proposed Income Tax Regulations.
For purposes of this determination, life expectancy for the initial
distribution year will be calculated based on the applicable life
expectancy from Table V or VI of Section 1.72-9 of the Income Tax
Regulations. Distributions for any subsequent year shall be calculated
based on such life expectancy reduced by one for each calendar year which
has elapsed since the calendar year life expectancy was first calculated.
8. During the Accumulation Period, the Certificate Holder may elect the Estate
Conservation Option (ECO) to receive automatic annual withdrawals of the
minimum distribution required under the Code. The annual distribution
amount will be determined by dividing the Current Value as of December 31
of the prior year by the lesser of (1) the applicable life expectancy
recalculated each year in accordance with Question and Answer E-8 of
Section 1.401(a)(9)-l of the Proposed Income Tax Regulations, or (2) if the
Certificate Holder's spouse is not the designated Beneficiary, the
applicable divisor determined from the table set forth in Question and
Answer 4 of Section 1.401(a)(9)-2 of the Proposed Income Tax Regulations.
For purposes of this determination, life expectancy for the initial
distribution year will be calculated based on the applicable life
expectancy from Table V or VI of Section 1.72-9 of the Income Tax
Regulations.
Aetna will not impose a Surrender Fee on any portion of the Current Value
which is paid as an ECO distribution. The Surrender Fee will apply to any
additional amounts withdrawn while ECO is in effect.
The Certificate Holder may elect ECO beginning with the year he or she
turns age 70 1/2, but not earlier than 12 months after receipt of the
Purchase Payment, by submitting a properly completed election form to
Aetna's Home Office. Aetna may require a minimum initial Current Value for
the election of ECO.
The Certificate Holder, or a spousal Beneficiary if ECO is elected after
the Certificate Holder's death, may revoke ECO at any time by submitting a
written request to Aetna's Home Office. If ECO is revoked, it may not begin
again until 36 months have elapsed.
2
<PAGE>
9. At the death of the Certificate Holder:
(a) If the Certificate Holder dies on or after distribution of his or her
interest has begun, the remaining portion of such interest, if any,
will continue to be distributed at least as rapidly as under the
method of distribution being used prior to the Certificate Holder's
death;
(b) If the Certificate Holder dies before distribution of his or her
interest begins, the death benefit payable to the Beneficiary will be
distributed no later than December 31 of the calendar year which
contains the fifth anniversary of the date of the Certificate Holder's
death except to the extent that an election is made to receive
distribution under an Annuity option in accordance with (i) or (ii)
below.
(i) Distributions to the Beneficiary may be made in installments over
the life of the Beneficiary or over a period not extending beyond
the life expectancy of the Beneficiary commencing no later than
December 31 of the calendar year immediately following the
calendar year in which the Certificate Holder died.
(ii) If the Beneficiary is the Certificate Holder's surviving spouse,
and distributions are to be made in accordance with (i) above,
distributions must begin on or before the later of December 31 of
the calendar year immediately following the calendar year in
which the Certificate Holder died or December 31 of the calendar
year in which the Certificate Holder would have attained age
70 1/2.
A spousal Beneficiary may elect an Annuity option, SWO, ECO, a lump sum
payment, or treat the Contract as his or her own IRA. An election to treat
the Contract as his or her own will be deemed to have been made if such
surviving spouse makes a rollover to or from such Contract, or fails to
elect any of the above provisions.
Life expectancy is computed by use of the expected return multiples in
Tables V and VI of Section 1.72-9 of the Income Tax Regulations. Life
expectancies for distributions under an Annuity option may not be
recalculated.
Distributions under this section are considered to have begun if
distributions are made on account of the Certificate Holder reaching the
required beginning date or, if prior to the required beginning date,
distributions irrevocably commence over a period permitted and in an
Annuity option acceptable under Section 1.401(a)(9) of the Proposed Income
Tax Regulations.
If SWO or ECO is in effect and the Certificate Holder dies before the
required beginning date for minimum distributions, payments will cease and
the Beneficiary may claim the death benefit in accordance with the terms of
this Section.
If SWO or ECO is in effect and the Certificate Holder dies after the
required beginning date for minimum distributions, the Beneficiary may
elect to continue payments, if permitted by Section 1.401(a)(9) of the
Proposed Income Tax Regulations, or may claim the death benefit in
accordance with the terms of this Section.
3
<PAGE>
10. Aetna will furnish annual calendar year reports concerning the status of
the Certificate Holder's Account.
11. After two full consecutive certificate years, and upon 90 days written
notice to the Certificate Holder, Aetna may terminate the Certificate
Holder's Account if the paid-up Annuity benefit at maturity would be less
than $20 per month.
/s/ Dan Kearney
President
Aetna Life Insurance and Annuity Company
4
Aetna Life Insurance and Annuity Company
Endorsement
The Contract and Certificate are hereby endorsed to meet the qualification
requirements for a Roth Individual Retirement Annuity under Internal Revenue
Code ("Code") Section 408A. The following provisions apply and, in the case of a
conflict with any provision in the Contract, this endorsement controls.
Certificate Holder. The Certificate Holder and the Annuitant must be the same
person. Joint Certificate Holders are not permitted.
Nontransferable/Nonforfeitable. The Contract is nontransferable. The Certificate
Holder may not sell, assign, transfer, pledge or use as collateral for a loan or
as security for the performance of an obligation or for any other purpose, his
or her interest in the Contract to any person other than the issuer of the
Contract or to a spouse incident to a divorce under the provisions of Code
Section 408(d)(6). The Certificate Holder's entire interest in the Contract is
nonforfeitable.
Exclusive Benefit. The Account is established for the exclusive benefit of the
Certificate Holder or his or her Beneficiary(ies).
Contributions. The Purchase Payment under the Contract must be a cash rollover
amount under Code Section 408A(e). Aetna may require verification that a
rollover amount qualifies as such under the Code. Annual contributions are not
accepted under the Contract.
Distributions. The distribution rules of Code Section 401(a)(9)(A) do not apply.
Any periodic payments will be paid only to the Certificate Holder.
Payment of Death Benefit. Section 3.07 is deleted in its entirety. The death
benefit amount is determined in accordance with the provisions of Sections 3.06
and 3.02. At the death of the Certificate Holder:
(a) If the Certificate Holder dies on or after the date distribution of his
or her interest has begun, the remaining portion of such interest, if
any, will continue to be distributed at least as rapidly as under the
method of distribution being used prior to the Certificate Holder's
death.
(b) If the Certificate Holder dies before distribution of his or her interest
begins, the death benefit payable to the Beneficiary will be distributed
no later than December 31 of the calendar year which contains the fifth
anniversary of the date of the Certificate Holder's death, except to the
extent that an election is made to receive a distribution in accordance
with (i) or (ii) below.
(i) Distributions to the Beneficiary may be made in installments over
the life of the Beneficiary or over a period not extending beyond
the life expectancy of the Beneficiary, commencing no later than
December 31 of the calendar year immediately following the
calendar year in which the Certificate Holder died.
(ii) If the Beneficiary is the Certificate Holder's surviving spouse,
and distributions are to be made in accordance with (i) above,
distributions must begin on or before the later of December 31 of
the calendar year immediately following the calendar year in which
the Certificate Holder died or December 31 of the calendar year in
which the Certificate Holder would have attained age 70 1/2.
If the Certificate Holder dies before Annuity payments begin, a spousal
Beneficiary may elect an Annuity option, a systematic distribution option, a
lump sum payment or to treat the Account as his or her own IRA. The election to
treat the Account as his or her own IRA will be deemed to have been
E1-MGAROTH-97
<PAGE>
made if such surviving spouse makes a rollover to or from such Account, or fails
to elect to receive a distribution in accordance with (b) above.
Life expectancy is computed by use of the expected return multiples in Tables V
and VI of Section 1.72-9 of the Income Tax Regulations. Life expectancies for
distributions under an Annuity option may not be recalculated.
Annual Reports. Aetna will furnish annual calendar year reports concerning the
status of the Certificate Holder's Account.
Termination of Account. Upon 90 days written notice to the Certificate Holder,
Aetna may terminate the Certificate Holder's Account if no Purchase Payments
have been received for two full consecutive Certificate years and the paid-up
Annuity benefit at maturity would be less than $20 per month.
Right to Cancel. The Certificate Holder may cancel the Certificate within 10
days of receiving it by returning it to Aetna or to the person from whom it was
purchased. Within seven days from the cancellation request, Aetna will return
all the Certificate Holder's Purchase Payments.
Endorsed and made a part of the Contract and Certificate as of the Effective
Date.
/s/ Thomas J. McInerney
Thomas J. McInerney, President
Aetna Life Insurance and Annuity Company
[Aetna Letterhead]
[Aetna Logo] 151 Farmington Avenue
Hartford, CT 06156
Julie E. Rockmore
Counsel
Law Division, RE4A
November 24, 1997 Investments & Financial Services
(860) 273-4686
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. 3 to Registration Statement on Form S-2
Prospectus Title: Aetna Multi-Rate Annuity
File No. 33-64331
Dear Sir or Madam:
As Counsel of Aetna Life Insurance and Annuity Company (the "Company"), I have
represented the Company in connection with the Aetna Multi-Rate Annuity (the
"Annuity") available under certain variable annuity contracts and the S-2
Registration Statement relating to such Annuity.
In connection with such representation, I have reviewed Post-Effective Amendment
No. 3 to the Registration Statement on Form S-2 relating to such Annuity,
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 Company
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. 3 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. 33-64331 on Post-Effective
Amendment No. 3 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 24, 1997
Consent of Independent Auditors
The Board of Directors
Aetna Life Insurance and Annuity Company:
We consent to the incorporation by reference in the registration statement No.
33-64331 on Post-Effective Amendment No. 3 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 24, 1997
<TABLE> <S> <C>
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS CONTAINED IN THE FORM 10Q 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>
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<NAME> Aetna Life Insurance and Annuity Company
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<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
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