As filed with the Securities and Exchange
Commission on April 20, 1999 Registration No. 33-60477
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 5
TO
FORM S-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Aetna Life Insurance and Annuity Company
----------------------------------------
Connecticut
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71-0294708
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151 Farmington Avenue, Hartford, Connecticut 06156, (860) 273-4686
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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)
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The annuities covered by this registration statement are to be issued from time
to time after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [XX]
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this Form, check the following box. [XX]
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. [ ] ______________
<PAGE>
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 number of the earlier effective registration statement for the same
offering. [ ] ______________
If this form is a post-effective amendment filed pursuant to Rule 462(d) 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>
Form S-2
Item No. Information Required in Prospectus Location
-------- ---------------------------------- --------
<S> <C> <C>
1 Forepart of the Registration Statement and Outside Front
Cover Page of Prospectus............................ Outside Front Cover
2 Inside Front and Outside Back Cover
Pages of Prospectus.................................. Table of Contents (inside front cover)
3 Summary Information, Risk Factors and Ratio of Earnings
to Fixed Charges..................................... Summary
4 Use of Proceeds...................................... Other Topics -- Investments
5 Determination of Offering Price...................... Not Applicable
6 Dilution............................................. Not Applicable
7 Selling Security Holders............................. Not Applicable
8 Plan of Distribution................................. Other Topics -- Distribution of Contracts
9 Description of Securities to be Registered..... Other Topics -- Description of the Guaranteed
Accumulation Account
10 Interests of Named Experts and Counsel....... Not Applicable
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Form S-2
Item No. Information Required in Prospectus Location
-------- ---------------------------------- --------
<S> <C> <C>
11 Information with Respect to the
Registrant........................................... Not Applicable
12 Incorporation of Certain Information by Reference.... Other Topics -- Incorporation of Certain Documents by
Reference; Other Topics -- Experts
13 Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.......................................... Not Applicable
</TABLE>
<PAGE>
Guaranteed Accumulation Account - May 3, 1999
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Introduction
The Guaranteed Accumulation Account (GAA) is a fixed interest option available
during the accumulation phase of certain variable annuity contracts issued by
Aetna Life Insurance and Annuity Company (the Company, we, us). Read this
prospectus carefully before investing in GAA and save it for future reference.
General Description
GAA offers investors the opportunity to earn specified guaranteed rates of
interest for specified periods of time, called guaranteed terms. We generally
offer several guaranteed terms at any one time for those considering investing
in GAA. Each guaranteed term offers a guaranteed interest rate for investments
that remain in GAA for the duration of the specific guaranteed term. The
guaranteed term establishes both the length of time for which we agree to credit
a guaranteed interest rate and how long your investment must remain in GAA in
order to receive the guaranteed interest rate.
We guarantee both principal and interest if, and only if, your investment
remains invested for the full guaranteed term. Charges related to the contract,
such as a maintenance fee or early withdrawal charge, may still apply even if
you withdraw at the end of the guaranteed term. Investments taken out of GAA
prior to the end of the guaranteed term may be subject to a market value
adjustment which may result in an investment gain or loss. (See "Market Value
Adjustment", page 11.)
This prospectus will explain:
> Guaranteed interest rates and guaranteed terms
> Contributions to GAA
> Types of investments available, and how they are classified
> How rates are offered
> How there can be an investment risk, and how we calculate gain or loss
> Contract charges that can affect your account value in GAA
> Taking investments out of GAA
> How to reinvest or withdraw at maturity
Additional Disclosure Information
Neither the Securities and Exchange Commission, nor any state securities
commission, has approved or disapproved of these securities or passed on the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense. We do not intend for this prospectus to be an offer to sell or
a solicitation of an offer to buy these securities in any state or jurisdiction
that does not permit their sale.
Our Home Office:
Aetna Life Insurance and Annuity Company
151 Farmington Avenue
Hartford, Connecticut 06156
(800)-GAA-Fund or (800)-422-3863
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Summary ..................................................................... 3
Description of the Guaranteed Accumulation Account .......................... 6
General, Contributions to GAA, Deposit Period, Guaranteed Terms,
Guaranteed Classifications, Guaranteed Interest Rates,
Maturity Value Transfer Provision
Transfers ................................................................... 9
Transfers from GAA, Transfers Between Guaranteed Term Classifications
Withdrawals ................................................................. 10
Deferral of Payments, Reinvestment Privilege
Market Value Adjustment ..................................................... 11
Deposit Period Yield, Current Yield, MVA Formula
Contract Charges ............................................................ 13
Other Topics ................................................................ 13
Income Phase -- Contract Loans -- Investments -- Distribution of Contracts
-- Taxation -- Year 2000 Readiness -- Experts -- Legal Matters -- Further
Information -- Incorporation of Certain Documents by Reference -- Inquiries
Appendix I -- Examples of Market Value Adjustment Calculations .............. 18
Appendix II -- Examples of Market Value Adjustment Yields ................... 20
</TABLE>
2
<PAGE>
Summary
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GAA is a fixed interest option that may be available during the accumulation
phase of your variable annuity contract. The following is a summary of certain
facts about GAA.
In General. Amounts that you invest in GAA will earn a guaranteed interest rate
if left in GAA for a specified period of time (the guaranteed term). You must
invest amounts in GAA for the full guaranteed term in order to receive the
quoted guaranteed interest rate. If you withdraw or transfer those amounts
before the end of the guaranteed term, we may apply a "market value adjustment,"
which may be positive or negative.
Deposit Periods. A deposit period is the time during which we offer a specific
guaranteed interest rate if you deposit dollars for a specific guaranteed term.
For a particular guaranteed interest rate and guaranteed term to apply to your
account dollars, you must invest them during the deposit period in which that
rate and term are offered.
Guaranteed Terms. The guaranteed term is the period of time account dollars must
be left in GAA in order to earn the guaranteed interest rate specified for that
guaranteed term. We offer different guaranteed terms at different times. Check
with your representative or the Company to learn the details about the
guaranteed term(s) currently offered.
Some variable annuity contracts that offer GAA distinguish between short- and
long-term classifications of GAA. Under those contracts, we make the following
distinction:
> Short-term classification--three years or less
> Long-term classification--between 3 and 10 years
Guaranteed Interest Rates. We guarantee different interest rates, depending on
when account dollars are invested in GAA. The interest rate we guarantee is an
annual effective yield; that means that the rate reflects a full year's
interest. We credit interest at a rate that will provide the guaranteed annual
effective yield over one year. The guaranteed interest rate(s) are guaranteed
for that deposit period and for the length of the guaranteed term.
The guaranteed interest rates we offer will always meet or exceed the minimum
interest rates agreed to in the contract. Apart from meeting the contractual
minimum interest rates, we can in no way guarantee any aspect of future
offerings.
Fees and Other Deductions. We do not make deductions from amounts in GAA to
cover mortality and expense risks. Rather, we consider these risks when
determining the credited rate. The following other types of charges may be
deducted from amounts held in, withdrawn or transferred from GAA:
> Market Value Adjustment. An MVA may be applied to amounts transferred or
withdrawn prior to the end of a guaranteed term, which reflects changes in
interest rates since the deposit period. The MVA may be positive or negative,
and therefore may increase or decrease the amount withdrawn to satisfy a
transfer or withdrawal request. See "Market Value Adjustment"
> Tax Penalties and/or Tax withholding. Amounts withdrawn may be subject to
withholding for federal income taxes, as well as a 10% penalty tax for
3
<PAGE>
amounts withdrawn prior to you having attained age 591/2. See "Taxation"; see
also the "Taxation" section of the contract prospectus
> Early Withdrawal Charge. An early withdrawal charge, which is a deferred sales
charge, may apply to amounts withdrawn from the contract, in order to
reimburse us for some of the sales and administrative expenses associated with
the contract. See "Contract Charges"; see also the "Fees" section of the
contract prospectus
> Maintenance Fee. A maintenance fee of up to $30 may be deducted, on an annual
basis, pro rata from all funding options including GAA. See "Contract
Charges"; see also the "Fees" section of the contract prospectus
Market Value Adjustment (MVA). If you withdraw or transfer all or part of your
account value from GAA before the guaranteed term is completed, an MVA may
apply. The MVA reflects the change in the value of the investment due to changes
in interest rates since the date of deposit. The MVA may be positive or negative
depending on interest rate activity at the time of withdrawal or transfer.
Withdrawals from GAA due to election of a lifetime income option or due to the
death of the participant (if withdrawn within the first six months following
death) will be subject to an aggregate market value adjustment (the sum of all
MVAs due to withdrawal) only if the aggregate market value adjustment is
positive. Withdrawals from GAA due to the election of a nonlifetime income
option may be subject to an aggregate MVA, whether positive or negative.
Maturity of a Guaranteed Term. On or before the end of a guaranteed term, the
contract holder or you, if applicable, may instruct us to
> Transfer the matured amount to one or more new guaranteed terms available
under the current deposit period
> Transfer the matured amount to other available investment options
> Withdraw the matured amount
Deductions may apply to withdrawals. (See "Contract Charges," "Taxation" and the
contract prospectus.) When a guaranteed term ends, if we have not received
instructions, we will automatically transfer the maturing investment into a
guaranteed term available in the current deposit period. (See "Maturity of a
Guaranteed Term" and "Maturity Value Transfer Provision.") For contracts that
distinguish between short-term and long-term classifications, we will generally
transfer the maturing investment to the available deposit period for the
guaranteed term having the shortest maturity within the same classification. For
other contracts, we will generally transfer the maturing investment in the
following manner based upon availability:
> To a guaranteed term of the same duration, if available; or
> To a guaranteed term with the next shortest duration, if available; or
> To a guaranteed term with the next longest duration
Maturity Value Transfer Provision. If we automatically transfer the matured
investment into the current deposit period, the contract holder or you, if
applicable, may, for a limited time, transfer or withdraw all or a portion of
the matured investment that was transferred without an MVA. Other fees,
including an early withdrawal charge, which is a deferred sales charge, and a
maintenance fee (up to $30), may be assessed on any withdrawals. See "Maturity
Value Transfer Provision."
4
<PAGE>
Transfer of Account Dollars. Generally, account dollars invested in GAA may be
transferred among guaranteed terms offered through GAA, and/or to other
investment options offered through the contract. However:
> Transfers may not be made during the deposit period in which your account
dollars are invested in GAA or for 90 days after the close of that deposit
period
> We may apply an MVA to transfers made before the end of a guaranteed term
Investments. Guaranteed interest rates credited during any guaranteed term do
not necessarily relate to investment performance. Deposits received into GAA,
regardless of the length of the guaranteed term or, where applicable, guaranteed
term classification, will generally be invested in federal, state and municipal
obligations, corporate bonds, preferred stocks, real estate mortgages, real
estate, certain other fixed income investments, and cash or cash equivalents.
All of our general assets are available to meet guarantees under GAA.
Amounts allocated to GAA are held in a nonunitized separate account except for
amounts allocated to short-term classifications of GAA before September 1, 1998,
which are held in the Company's general account. To the extent provided for in
the contract, assets of the separate account are not chargeable with liabilities
arising out of any other business that we conduct. See "Investments."
Notification of Maturity. We will notify you at least 18 calendar days prior to
the maturity of a guaranteed term. We will include information relating to the
current deposit period's guaranteed interest rates and the available guaranteed
terms. You may obtain information concerning available deposit periods,
guaranteed interest rates, and guaranteed terms by telephone five business days
prior to the maturity date (1-800-GAA-FUND or 1-800-422-3863). (See "Description
of the Guaranteed Accumulation Account--General" and "Maturity of a Guaranteed
Term.")
5
<PAGE>
Description of the Guaranteed
Accumulation Account
- --------------------------------------------------------------------------------
General
GAA offers guaranteed interest rates for specific guaranteed terms. For a
particular guaranteed interest rate and guaranteed term to apply to your account
dollars, you must invest them during the deposit period during which that rate
and term are offered. Each deposit period may offer more than one guaranteed
term. Guaranteed terms may be classified according to length of time to
maturity, and each deposit period may offer various guaranteed terms within
these classifications.
A market value adjustment may be applied to any values withdrawn or transferred
from a guaranteed term prior to the end of that guaranteed term, except for
amounts transferred under the maturity value transfer provision. In the case of
amounts withdrawn from a guaranteed term due to the death of the participant, we
will apply an aggregate market value adjustment (the sum of all market value
adjustments calculated due to this withdrawal), provided that it is positive,
and provided that the withdrawal is requested within six months of death. After
the six-month period, an aggregate market value adjustment, whether positive or
negative, will be applied. In the case of values withdrawn from guaranteed terms
to provide income phase payments under one of the lifetime income options, we
will apply an aggregate market value adjustment only if it is positive.
Withdrawals from GAA due to the election of a nonlifetime income option may be
subject to an aggregate MVA, whether positive or negative.
We maintain a toll-free telephone number for those wishing to obtain information
concerning available deposit periods, guaranteed interest rates, and guaranteed
terms. The telephone number is 1-800-GAA-FUND (1-800-422-3863). At least 18
calendar days before a guaranteed term matures, we will notify the contract
holder or you, if applicable, of the upcoming deposit period dates and the
current guaranteed interest rates, guaranteed terms and projected matured
guaranteed term values.
Contributions to GAA
The contract holder or you, if applicable, may invest in the guaranteed terms
available in the current deposit period by allocating new payments to GAA or by
transferring a sum from other funding options available under the contract or
from other guaranteed terms.
Though we may require a minimum payment(s) to a contract, we do not require a
minimum investment for a guaranteed term. Refer to the contract prospectus. We
reserve the right to establish a minimum amount for transfers from other funding
options.
Investments may not be transferred from a guaranteed term during the deposit
period in which the investment is applied or during the first ninety days after
the close of the deposit period. This restriction does not apply to amounts
transferred or withdrawn under the maturity value transfer provision. See
"Maturity Value Transfer Provision."
6
<PAGE>
Deposit Period
The deposit period is the period of time during which the contract holder or
you, if applicable, may direct investments to a particular guaranteed term(s)
and receive a stipulated guaranteed interest rate(s). Each deposit period may be
a month, a calendar quarter, or any other period of time we specify.
Guaranteed Terms
A guaranteed term is the time we specify during which we credit the guaranteed
interest rate. We will offer at least one guaranteed term of three years or less
and one term of more than three years in any deposit period. We offer guaranteed
terms at our discretion for various periods ranging from one to ten years.
Guaranteed Term Classifications
Some contracts distinguish between long-term and short-term guaranteed term
classifications. The following are the guaranteed term classifications:
Short-term--All guaranteed terms of 3 years or less
Long-term--All guaranteed terms of between 3 and 10 years
During each deposit period, we may offer more than one guaranteed term within
each guaranteed term classification. The contract holder or you, if applicable,
may allocate investments to guaranteed terms within one or both guaranteed term
classifications during a deposit period.
Guaranteed Interest Rates
Guaranteed interest rates are the rates that we guarantee will be credited on
amounts applied during a deposit period for a specific guaranteed term.
Guaranteed interest rates are annual effective yields, reflecting a full year's
interest. We credit interest at a rate that will provide the guaranteed annual
effective yield over one year. Guaranteed interest rates are credited according
to the length of the guaranteed term as follows:
Guaranteed Terms of One Year or Less: The rate is credited from the date of
deposit to the last day of the guaranteed term.
Guaranteed Terms of Greater than One Year: Several different guaranteed interest
rates may be applicable during a guaranteed term of more than one year. The
initial guaranteed interest rate is credited from the date of deposit to the end
of a specified period within the guaranteed term. We may credit several
different guaranteed interest rates for subsequent specific periods of time
within the guaranteed term. For example, for a 5-year guaranteed term we may
guarantee 5% for the first year, 4.75% for the next two years, and 4.5% for the
remaining two years.
We will not guarantee or credit a guaranteed interest rate below the minimum
rate specified in the contract, nor will we credit interest at a rate above the
guaranteed interest rate we announce prior to the start of a deposit period.
Our guaranteed interest rates are influenced by, but do not necessarily
correspond to, interest rates available on fixed income investments we may buy
using deposits directed to GAA (see "Investments"). We consider other factors
when determining guaranteed interest rates including regulatory and tax
requirements, sales commissions and administrative expenses borne by the
Company, general economic trends, and competitive factors. We make the final
determination regarding guaranteed interest rates. We cannot predict the level
of future guaranteed interest rates.
7
<PAGE>
[Begin sidebar]
Business Day--any day on which the New York Stock Exchange is open.
[End sidebar]
Maturity of a Guaranteed Term. At least 18 calendar days prior to the maturity
of a guaranteed term, we will notify the contract holder or you, if applicable,
of the upcoming deposit period, the projected value of the amount maturing at
the end of the guaranteed term, and the guaranteed interest rate(s) and
guaranteed term(s) available for the current deposit period. The contract holder
or you, if applicable, may transfer amounts in any maturing guaranteed term to
new guaranteed term(s), if available under the contract.
The contract holder or you, if applicable, may also transfer amounts in any
maturing guaranteed term to any of the allowable investment options available
under the contract. We do not apply a market value adjustment to amounts
transferred or surrendered from a guaranteed term on the date the guaranteed
term matures; however, we may assess an early withdrawal charge or maintenance
fee, if applicable. If we have not received direction from the contract holder
or you, if applicable, by the maturity date of a guaranteed term, we will
automatically transfer the matured value to one of the following:
> For contracts distinguishing between short- and long-term classifications, we
will generally transfer the amount maturing to the available deposit period
for the guaranteed term having the shortest maturity within the same
classification, though it may be different than the maturing term
> For contracts that do not distinguish between short- and long-term
classifications, we will generally transfer the maturing amount as follows:
o To a guaranteed term of the same duration, if available; or
o To a guaranteed term with the next shortest duration, if available; or
o To a guaranteed term with the next longest duration
The contract holder or you, if applicable, will receive a confirmation
statement, plus information on the new guaranteed interest rate(s) and
guaranteed term.
Maturity Value Transfer Provision
If we automatically reinvest the proceeds from a matured guaranteed term, the
contract holder or you, if applicable, may transfer or withdraw from GAA the
amount that was reinvested without a market value adjustment. An early
withdrawal charge or maintenance fee may apply to withdrawals. If the full
amount reinvested is transferred or withdrawn, we will include interest credited
to the date of the transfer or withdrawal. This provision is only available
until the last business day of the month following the maturity date of the
prior guaranteed term. This provision only applies to the first transfer or
withdrawal request received from the contract holder or you, if applicable, with
respect to a particular matured guaranteed term value, regardless of the amount
involved in the transaction.
8
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Transfers
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We allow the contractholder or you, if applicable, to transfer all or a portion
of your account value to GAA or to other investment options under the contract.
We do not permit transfers from any guaranteed term to any other guaranteed term
or investment option during the deposit period for that guaranteed term nor
during the first 90 days following the close of that deposit period, except for
amounts transferred under the maturity value transfer provision.
We do not apply a market value adjustment to the value transferred upon maturity
of a guaranteed term nor for values transferred under the maturity value
transfer provision. We do not count either of these types of transfers as one of
the 12 free transfers allowed per calendar year by those contracts allowing only
12 free transfers.
When the contract holder or you, if applicable, request the transfer of a
specific dollar amount, we account for any applicable market value adjustment in
determining the amount to be withdrawn from a guaranteed term(s) to fulfill the
request. Therefore, the amount we actually withdraw from the guaranteed term(s)
may be more or less than the requested dollar amount. (See "Appendix I" for an
example.) For more information on transfers, see the contract prospectus.
Transfers From GAA
For contracts that do not distinguish between short- and long-term
classifications, the contract holder or you, if applicable, may choose the
guaranteed term from which funds will be first withdrawn. If there is more than
one guaranteed term of the same duration, we will withdraw funds starting from
the oldest guaranteed term that has not reached maturity.
If we do not receive directions, we will withdraw funds pro rata from each
guaranteed term in which you are invested. If there is more than one guaranteed
term of the same duration, we will withdraw funds starting from the oldest
guaranteed term that has not reached maturity.
For contracts that distinguish between short- and long-term classifications, the
contract holder or you, if applicable, may choose the guaranteed term
classification from which funds will be first withdrawn. We will withdraw funds
starting from the oldest guaranteed term that has not reached maturity within
the classification chosen.
If we do not receive directions, we will withdraw funds pro rata from the
guaranteed term classifications, starting with the oldest guaranteed term that
has not reached maturity, and any other investment options.
We will apply a market value adjustment to the amount requested for transfer.
(See "Market Value Adjustment.")
Transfers Between Guaranteed Term Classifications
(For contracts that distinguish between short-term and long-term classifications
only)
The contract holder or you, if applicable, may transfer amounts from short-term
guaranteed terms to available long-term guaranteed terms of the current deposit
period, or from long-term guaranteed terms to available short-term guaranteed
terms of the current deposit period.
9
<PAGE>
For example, funds may be transferred from a 3-year guaranteed term (any time
after 90 days from the close of the deposit period applicable to that 3-year
guaranteed term) to the open deposit period of a 7-year guaranteed term.
Funds will be first transferred from the oldest deposit period for which the
guaranteed term has not reached maturity and we will assess a market value
adjustment on the transferred amount. These transfers are counted toward the 12
free transfers allowed per calender year by those contracts allowing only 12
free transfers.
We do not permit the transfer of value from one guaranteed term prior to its
maturity to another guaranteed term within the same classification. For example
we do not permit transfers from one-year to three-year, one-year to one-year,
five-year to seven-year, or ten-year to seven-year guaranteed terms.
Withdrawals
- --------------------------------------------------------------------------------
The contract allows for full or partial withdrawals from GAA at any time during
the accumulation phase. To make a full or partial withdrawal, a request form
(available from us) must be properly completed and submitted to our Home Office
(or other designated office as provided in the contract).
Partial withdrawals are made pro rata from funding options unless the contract
holder or you, if applicable, request otherwise. For contracts that do not
distinguish between short- and long-term classifications, each guaranteed term
is considered a separate funding option for the purpose of a partial withdrawal.
The contract holder or you, if applicable, may choose the guaranteed term from
which funds will be withdrawn. If there is more than one guaranteed term of the
same duration, we will withdraw funds starting from the oldest guaranteed term
that has not reached maturity. If no guaranteed term is elected, we will
withdraw funds pro rata from each guaranteed term in which you are invested. If
there is more than one guaranteed term of the same duration, we will withdraw
funds starting from the oldest guaranteed term that has not reached maturity.
For contracts distinguishing between short- and long-term classifications, each
guaranteed term classification is considered a separate funding option for the
purpose of a partial withdrawal. The contract holder or you, if applicable, may
elect to take a partial withdrawal from either guaranteed term classification.
We will first withdraw funds from the oldest guaranteed term that has not
reached maturity within the chosen classification. If no guaranteed term
classification is elected, we will withdraw funds pro rata from each
classification (starting with the oldest guaranteed term which has not reached
maturity) and other funding options.
We may apply a market value adjustment to withdrawals made prior to the end of a
guaranteed term, except for withdrawals made under the maturity value transfer
provision. (See "Market Value Adjustment.") We may deduct an early withdrawal
charge and/or a maintenance fee depending on the terms of the contract. The
early withdrawal charge is a deferred sales charge which may be deducted upon
withdrawal to reimburse us for some of the sales and administrative expenses
associated with the contract. A maintenance fee, up to $30, may be deducted pro
rata from each of the funding options, including
10
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[Begin sidebar]
Aggregate MVA is the total of all MVAs applied due to a transfer or withdrawal.
[End sidebar]
GAA. Refer to the contract prospectus for a description of these fees. When a
request for a partial withdrawal of a specific dollar amount is made, we will
include the market value adjustment in determining the amount to be withdrawn
from the guaranteed term(s) to fulfill the request. Therefore, the amount we
actually take from the guaranteed term(s) may be more or less than the dollar
amount requested. (See "Appendix I" for an example.)
Deferral of Payments
Under certain emergency conditions, we may defer payment of a GAA withdrawal for
up to six months. Refer to the contract prospectus for more details.
Reinvestment Privilege
The contract holder or you, if applicable, may elect to reinvest all or a
portion of a full withdrawal during the 30 days following such a withdrawal. We
must receive amounts for reinvestment within 60 days of the withdrawal.
We will apply reinvested amounts to the current deposit period. Amounts are
reinvested in the guaranteed term classifications, where applicable, in the same
proportion as prior to the full withdrawal. Any negative MVA we applied to a
withdrawal will not be refunded. Refer to the contract prospectus for further
details.
Market Value Adjustment
- --------------------------------------------------------------------------------
We apply a market value adjustment (MVA) to amounts transferred or withdrawn
from GAA prior to the end of a guaranteed term. To accommodate early withdrawals
or transfers, we may need to liquidate certain assets or use cash that could
otherwise be invested at current interest rates. When we sell assets prematurely
we could realize a profit or loss depending on market conditions.
The MVA reflects changes in interest rates since the deposit period. When
interest rates increase after the deposit period, the value of the investment
decreases and the market value adjustment amount may be negative. Conversely,
when interest rates decrease after the deposit period, the value of the
investment increases and the market value adjustment amount may be positive.
Therefore, the application of an MVA may increase or decrease the amount
withdrawn from a guaranteed term to satisfy a withdrawal or transfer request.
We may apply an aggregate MVA to transfers made in order to fund both a lifetime
or nonlifetime income payment option; however, we will not apply a negative
aggregate MVA to amounts transferred to fund lifetime income options. We will
also not apply a negative aggregate MVA to amounts withdrawn from guaranteed
terms due to your death, if withdrawn during the six months following your
death. After this six-month period, a positive or negative aggregate MVA may
apply.
Should two or more consecutive guaranteed terms have the same guaranteed
interest rate and mature on the same date, we will calculate an MVA applicable
11
<PAGE>
to each. We will apply the MVA that is more favorable to you to any withdrawal
or transfer from either guaranteed term prior to their maturity.
Calculation of the MVA
The amount of the MVA depends on the relationship between:
> The deposit period yield of U.S. Treasury Notes that will mature in the last
quarter of the guaranteed term
> The current yield of such U. S. Treasury Notes at the time of withdrawal
If the current yield is less than the deposit period yield, the MVA will
decrease the amount withdrawn from a guaranteed term to satisfy a transfer or
withdrawal request (the MVA will be positive). If the current yield is greater
than the deposit period yield, the MVA will increase the amount withdrawn from a
guaranteed term (the MVA will be negative or detrimental to the investor).
Under some contracts, election of a Systematic Distribution Option, as described
in the contract prospectus, will not result in an MVA for amounts withdrawn from
GAA.
Deposit Period Yield
We determine the deposit period yield used in the MVA calculation by considering
interest rates prevailing during the deposit period of the guaranteed term from
which the transfer or withdrawal will be made. First, we identify the Treasury
Notes that mature in the last three months of the guaranteed term. Then, we
determine their yield-to-maturity percentages for the last business day of each
week in the deposit period. We then average the resulting percentages to
determine the deposit period yield.
Treasury Note information may be found each business day in publications such as
the Wall Street Journal which publishes the yield-to-maturity percentages for
all Treasury Notes as of the preceding business day.
Current Yield
We use the same Treasury Notes identified for the deposit period yield to
determine the current yield--Treasury Notes that mature in the last three months
of the guaranteed item. However, we use the yield-to-maturity percentages for
the last business day of the week preceding the withdrawal and average those
percentages to get the current yield.
MVA Formula
The mathematical formula used to determine the MVA is:
x
---
{(1+i)} 365
-----
{(1+j)}
where i is the deposit period yield; j is the current yield; and x is the number
of days remaining (computed from Wednesday of the week of withdrawal) in the
guaranteed term. (For examples of how we calculate MVA, refer to Appendix I.)
We make an adjustment in the formula of the MVA to reflect the period of time
remaining in the guaranteed term from the Wednesday of the week of a withdrawal.
12
<PAGE>
Contract Charges
- --------------------------------------------------------------------------------
Certain charges may be deducted directly or indirectly from the funding options
available under the contract, including GAA.
The contract may have a maintenance fee of up to $30 that we will deduct, on an
annual basis, pro rata from all funding options including GAA. We may also
deduct a maintenance fee upon full withdrawal of a contract.
The contract may have an early withdrawal charge that we will deduct, if
applicable, upon a full or partial withdrawal from the contract. If the
withdrawal occurs prior to the maturity of a guaranteed term, both the early
withdrawal charge and an MVA may be assessed.
We do not deduct mortality and expense risk charges and other asset-based
charges that may apply to variable funding options from GAA. These charges are
only applicable to the variable funding options.
We may deduct premium taxes of up to 4% from amounts in GAA, and, under some
contracts, front end sales charges of up to 6%.
We reserve the right to charge $10 for each transfer over 12, for contracts that
restrict the number of free transfers of accumulated investment value between
available investment options to 12.
Refer to the contract prospectus for details on contract deductions.
Other Topics
- --------------------------------------------------------------------------------
Income Phase
GAA may not be used as a funding option during the income phase. Amounts
invested in guaranteed terms must be transferred to one or more of the options
available to fund income payments before income payments can begin.
An aggregate MVA, as previously described, may be applied to amounts transferred
to fund income payments before the end of a guaranteed term. Amounts used to
fund lifetime income payments will receive either a positive aggregate MVA or
none at all; however amounts transferred to fund a nonlifetime income payment
option can receive a positive or negative aggregate MVA.
Refer to the contract prospectus for a discussion of the income phase.
Contract Loans
(403(b) and some 401(a) Plans Only)
The contract holder or you, if applicable, may not take a loan from amounts held
in GAA, but we include GAA amounts when calculating the account value which
determines the amount available for a loan. Amounts held in GAA must be
transferred to a funding option available for loans in order to be received as a
loan. (Refer to the contract prospectus for more information on contract loans.)
We will apply an MVA to amounts transferred from guaranteed terms due to a loan
request.
13
<PAGE>
Investments
General Account. Amounts invested in guaranteed terms of three years or less
prior to September 1, 1998 were deposited into the Company's general account
supporting insurance and annuity obligations and will remain invested in the
general account until the end of their guaranteed terms. On or after September
1, 1998 the only new amounts allocated to the Company's general account are
amounts allocated or rolled over to short-term classifications of GAA under
contracts that had not yet received the necessary state approval to deposit
those amounts in the Company's separate account.
We invest general account assets of the Company in accordance with applicable
state laws, which govern the nature of investments made by life insurance
companies and the percentage of assets that may be committed to any particular
type of investment. These laws generally permit investments in federal, state
and municipal obligations; corporate bonds; preferred stocks; real estate
mortgages; real estate and certain other fixed income investments.
All of the general assets of the Company, including amounts deposited to GAA,
are available to meet the guarantees under GAA. The assets of the Company's
general account are chargeable with liabilities arising out of any other
business of the Company.
Separate Account. All guaranteed terms greater than three years, and except as
noted above, guaranteed terms of less than three years allocated or rolled over
on or after September 1, 1998 will be deposited in a nonunitized separate
account established under Connecticut law.
A nonunitized separate account is a separate account in which neither the
contract holder nor you participate in the performance of the assets through
unit values or any other interest. Contract holders and participants allocating
funds to the nonunitized separate account do not receive a unit value of
ownership of assets accounted for in this separate account. The risk of
investment gain or loss is borne entirely by the Company. All Company
obligations due to allocations to the nonunitized separate account are
contractual guarantees of the Company and are accounted for in the separate
account. All of the general assets of the Company are available to meet our
contractual guarantees. To the extent provided for in the applicable contract,
the assets of the nonunitized separate account are not chargeable with
liabilities resulting from any other business of the Company. Income, gains and
losses of the separate account are credited to or charged against the separated
account without regard to other income, gains or losses of the Company.
Types of Investments. We intend to invest primarily in investment-grade fixed
income securities including:
> Securities issued by the United States Government
> Issues of U.S. Government agencies or instrumentalities; these issues may or
may not be guaranteed by the United States Government
> Debt securities which have an investment grade, at the time of purchase,
within the four highest grades assigned by Moody's Investors Services, Inc.
(Aaa, Aa, A or Baa), Standard & Poor's Corporation (AAA, AA, A or BBB) or any
other nationally recognized rating service
> Other debt instruments, including those issued or guaranteed by banks or bank
holding companies, and of corporations, which although not rated by Moody's,
Standard & Poor's, or other nationally recognized rating services,
14
<PAGE>
are deemed by the Company's management to have an investment quality
comparable to securities which may be purchased as stated above
> Commercial paper, cash or cash equivalents, and other short-term investments
having a maturity of less than one year which are considered by the Company's
management to have investment quality comparable to securities which may be
purchased as stated above
We may invest in futures and options. We purchase financial futures, related
options and options on securities solely for non-speculative hedging purposes.
Should securities prices be expected to decline, we may sell a futures contract
or purchase a put option on futures or securities to protect the value of
securities held in or to be sold for the general account or the nonunitized
separate account. Similarly, if securities prices are expected to rise, we may
purchase a futures contract or a call option against anticipated positive cash
flow or may purchase options on securities.
We are not obligated to invest the assets attributable to the contracts
according to any particular strategy, except as required by Connecticut and
other state insurance laws. The guaranteed interest rates established by the
Company may not necessarily relate to the performance of the nonunitized
separate account.
Distribution of Contracts
We serve as underwriter for the securities sold through this prospectus. We are
registered as a broker-dealer with the Securities and Exchange Commission (SEC)
and are a member of the National Association of Securities Dealers, Inc. As
underwriter, we will contract with one or more registered broker-dealers to
offer and sell the contracts. We and our affiliate(s) may also sell the
contracts directly. All registered representatives for the broker-dealers
selling these securities will also be licensed as insurance agents to sell
variable annuity contracts. For additional information, see the contract
prospectus.
Taxation
You should seek advice from your tax adviser as to the application of federal
(and where applicable, state and local) tax laws to amounts paid to or
distributed under the contracts. Refer to the applicable contract prospectus for
a discussion of tax considerations connected with the contracts.
Taxation of the Company. We are taxed as a life insurance company under Part I
of Subchapter L of the Internal Revenue Code. The Company owns all assets
supporting the contract obligations of GAA. Any income earned on such assets is
considered income to the Company. We do not intend to make any provision or
impose a charge under the contracts with respect to any tax liability of the
Company.
Taxation of Payments and Distributions. For information concerning the tax
treatment of payments to and distributions from the contracts, please refer to
the applicable contract prospectus.
Year 2000 Readiness
The Company is dependent on computer systems and applications to conduct its
business. The Company has developed and is currently executing a comprehensive
risk-based plan designed to make its mission-critical information technology
(IT) systems and embedded systems Year 2000 ready. The plan for IT systems
covers five stages including (i) assessment, (ii) remediation, (iii)
15
<PAGE>
testing, (iv) implementation and (v) Year 2000 approval. At year-end 1997, the
Company had substantially completed the assessment stage. The remediation of
mission-critical IT systems was completed year-end 1998. The Company expects to
incur internal staffing costs, as well as consulting and other expenses related
to infrastructure and facilities enhancements necessary to prepare its systems
for the Year 2000. Total Year 2000 costs for these systems were $21 million
(after tax) in 1998 and are currently estimated to be $16 million (after tax) in
1999 and are expected to be funded through operating cash flows.
The Company deals with affiliated and unaffiliated third parties in connection
with the investments made by the Company with the amounts allocated to GAA.
Aetna Inc. and the Company have initiated communication with their critical
external relationships to determine the extent to which the Aetna organization
may be vulnerable to such parties' failure to resolve their own Year 2000
issues. The Aetna organization, including the Company, have assessed and are
prioritizing responses in an attempt to mitigate risks with respect to the
failure of these parties to be Year 2000 ready. The failure of third parties to
complete adequate preparations in a timely manner could have an adverse effect
on the operation of GAA, or the establishment of future guaranteed rates.
Experts
We have incorporated by reference into Post Effective Amendment No. 5 to the
Registration Statement of which this prospectus is a part and/or into this
prospectus:
> The consolidated balance sheets of the Company as of December 31, 1998 and
1997 and the related consolidated statement of income, changes in
shareholder's equity and cash flows and all related schedules for each of the
years in the three-year period ended December 31, 1998
> The reports of KPMG LLP
These statements are included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1998. We have relied upon the reports of KPMG LLP,
independent certified public accountants and upon their authority as experts in
accounting and auditing.
Legal Matters
The validity of the securities offered by this prospectus has been passed upon
by counsel to the Company.
Further Information
This prospectus does not contain all of the information contained in the
registration statement of which this prospectus is a part. Portions of the
registration statement have been omitted from this prospectus as allowed by the
SEC. You may obtain the omitted information from the offices of the SEC, as
described below.
We are required by the Securities Exchange Act of 1934 to file periodic reports
and other information with the SEC. You may inspect or copy information
concerning the Company at the Public Reference Room of the SEC at:
Securities and Exchange Commission
450 Fifth Street NW
Washington, DC 20549
16
<PAGE>
You may also obtain copies of these materials at prescribed rates from the
Public Reference Room of the above office. You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You
may also find more information about the Company at http://www.aetna.com.
A copy of the Company's annual report on Form 10-K for the year ended December
31, 1998 accompanies this prospectus. We refer to Form 10-K for a description of
the Company and its business, including financial statements. We intend to send
contract holders annual account statements and other such legally required
reports. We do not anticipate such reports will include periodic financial
statements or information concerning the Company.
You can find this prospectus and other information the Company must file with
the SEC on the SEC's web site at http://www.sec.gov.
Incorporation of Certain Documents by Reference
We have incorporated by reference the Company's latest Annual Report on Form
10-K, as filed with the SEC and in accordance with the Securities and Exchange
Act of 1934. The Annual Report must accompany this prospectus. Form 10-K
contains additional information about the Company including certified financial
statements for the latest fiscal year. We were not required to file any other
reports pursuant to Sections 13(a) or 15(d) of the Securities and Exchange Act
since the end of the fiscal year covered by that Form 10-K.
The registration statement for this prospectus incorporates some documents by
reference. We will provide a free copy of any such documents upon the request of
anyone who has received this prospectus. We will not include exhibits to those
documents unless they are specifically incorporated by reference into the
document. Direct requests to:
Aetna Life Insurance and Annuity Company
151 Farmington Avenue
Hartford, CT 06156
800-GAA-FUND
800-422-3863
Inquiries
You may contact us directly by writing to us at the address shown above or by
calling (800)-GAA-FUND or (800)-422-3863.
17
<PAGE>
Appendix I
Examples of Market Value Adjustment Calculations
- --------------------------------------------------------------------------------
The following are examples of market value adjustment ("MVA") calculations using
several hypothetical deposit period yields and current yields. These examples do
not include the effect of any early withdrawal charge that may be assessed under
the contract upon withdrawal.
EXAMPLE I
Assumptions:
i, the deposit period yield, is 8%
j, the current yield, is 10%
x, the number of days remaining (computed from Wednesday of the week of
withdrawal) in the guaranteed term, is 927.
x
---
MVA = {(1+i)} 365
-----
{(1+j)}
927
---
= {(1.08)} 365
------
{(1.10)}
=.9545
In this example, the deposit period yield of 8% is less than the current yield
of 10%; therefore, the MVA is less than 1. The amount withdrawn from the
guaranteed term is multiplied by this MVA.
If a withdrawal or transfer request of a specific dollar amount is requested,
the amount withdrawn from a guaranteed term will be increased to compensate for
the negative MVA amount. For example, a withdrawal request to receive a check
for $2,000 would result in a $2,095.34 withdrawal from the guaranteed term.
Assumptions:
i, the deposit period yield, is 5%
j, the current yield, is 6%
x, the number of days remaining (computed from Wednesday of the week of
withdrawal) in the guaranteed term, is 927.
x
---
MVA = {(1+i)} 365
-----
{(1+j)}
927
---
= {(1.05)} 365
------
{(1.06)}
=.9762
In this example, the deposit period yield of 5% is less than the current yield
of 6%; therefore, the MVA is less than 1. The amount withdrawn from the
guaranteed term is multiplied by this MVA.
If a withdrawal or transfer request of a specific dollar amount is requested,
the amount withdrawn from a guaranteed term will be increased to compensate for
the negative MVA amount. For example, a withdrawal request to receive a check
for $2,000 would result in a $2,048.76 withdrawal from the guaranteed term.
18
<PAGE>
EXAMPLE II
Assumptions:
i, the deposit period yield, is 10%
j, the current yield, is 8%
x, the number of days remaining (computed from Wednesday of the week of
withdrawal) in the guaranteed term, is 927.
x
---
MVA = {(1+i)} 365
-----
{(1+j)}
927
---
= {(1.08)} 365
------
{(1.10)}
=1.0477
In this example, the deposit period yield of 10% is greater than the current
yield of 8%; therefore, the MVA is greater than 1. The amount withdrawn from the
guaranteed term is multiplied by this MVA.
If a withdrawal or transfer request of a specific dollar amount is requested,
the amount withdrawn from a guaranteed term will be decreased to reflect the
positive MVA amount. For example, a withdrawal request to receive a check for
$2,000 would result in a $1,908.94 withdrawal from the guaranteed term.
Assumptions:
i, the deposit period yield, is 5%
j, the current yield, is 4%
x, the number of days remaining (computed from Wednesday of the week of
withdrawal) in the guaranteed term, is 927.
x
---
MVA = {(1+i)} 365
-----
{(1+j)}
927
---
= {(1.05)} 365
------
{(1.04)}
=1.0246
In this example, the deposit period yield of 5% is greater than the current
yield of 4%; therefore, the MVA is greater than 1. The amount withdrawn from the
guaranteed term is multiplied by this MVA.
If a withdrawal or transfer request of a specific dollar amount is requested,
the amount withdrawn from a guaranteed term will be decreased to reflect the
positive MVA amount. For example, a withdrawal request to receive a check for
$2,000 would result in a $1,951.98 withdrawal from the guaranteed term.
19
<PAGE>
Appendix II
Examples of Market Value Adjustment Yields
- --------------------------------------------------------------------------------
The following hypothetical examples show the market value adjustment based on a
given current yield at various times remaining in the guaranteed term. Table A
illustrates the application of the market value adjustment based on a deposit
period yield of 10%; Table B illustrates the application of the market value
adjustment based on a deposit period yield of 5%. The market value adjustment
will have either a positive or negative influence on the amount withdrawn from
or remaining in a guaranteed term. Also, the amount of the market value
adjustment generally decreases as the end of the guaranteed term approaches.
TABLE A: Deposit Period Yield of 10%
<TABLE>
<CAPTION>
Change in
Deposit
Current Period Time Remaining to
Yield Yield Maturity of Guaranteed Term
------- --------- --------------------------------------------------------------------------
8 Years 6 Years 4 Years 2 Years 1 Year 3 Months
------- ------- ------- ------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
15% +5% -29.9% -23.4% -16.3% -8.5% -4.3% -1.1%
13% +3% -19.4 -14.9 -10.2 -5.2 -2.7 -0.7
12% +2% -13.4 -10.2 -7.0 -3.5 -1.8 -0.4
11% +1% -7.0 -5.3 -3.6 -1.8 -0.9 -0.2
9% -1% 7.6 5.6 3.7 1.8 0.9 0.2
8% -2% 15.8 11.6 7.6 3.7 1.9 0.5
7% -3% 24.8 18.0 11.7 5.7 2.8 0.7
5% -5% 45.1 32.2 20.5 9.8 4.8 1.2
</TABLE>
TABLE B: Deposit Period Yield of 5%
<TABLE>
<CAPTION>
Change in
Deposit
Current Period Time Remaining to
Yield Yield Maturity of Guaranteed Term
------- --------- --------------------------------------------------------------------------
8 Years 6 Years 4 Years 2 Years 1 Year 3 Months
------- ------- ------- ------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
9% +4% -25.9% -20.1% -13.9% -7.2% -3.7% -0.9%
8% +3% -20.2 -15.6 -10.7 -5.5 -2.8 -0.7
7% +2% -14.0 -10.7 -7.3 -3.7 -1.9 -0.5
6% +1% -7.3 -5.5 -3.7 -1.9 -0.9 -0.2
4% -1% 8.0 5.9 3.9 1.9 1.0 0.2
3% -2% 16.6 12.2 8.0 3.9 1.9 0.5
2% -3% 26.1 19.0 12.3 6.0 2.9 0.7
1% -4% 36.4 26.2 16.8 8.1 4.0 1.0
</TABLE>
20
<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
Section 21 of Public Act No. 97-246 of the Connecticut General Assembly (the
"Act") provides that a corporation may provide indemnification of or advance
expenses to a director, officer, employee or agent only as permitted by Sections
33-770 to 33-778, inclusive, of the Connecticut General Statutes, as amended by
Sections 12 to 20, inclusive, of this Act. Reference is hereby made to Section
33-771(e) of the Connecticut General Statutes ("CGS") regarding indemnification
of directors and Section 33-776(d) of CGS 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, except to the extent that their certificate of incorporation expressly
provides otherwise, indemnify their directors, officers, employees and agents
against "liability" (defined as the obligation to pay a judgment, settlement,
penalty, fine, including an excise tax assessed with respect to an employee
benefit plan, or reasonable expenses incurred with respect to a proceeding) when
(1) a determination is made pursuant to Section 33-775 that the party seeking
indemnification has met the standard of conduct set forth in Section 33-771 or
(2) a court has determined that indemnification is appropriate pursuant to
Section 33-774. Under Section 33-775, the determination of and the authorization
for indemnification are made (a) by the disinterested directors, as defined in
Section 33-770(3); (b) by special counsel; (c) by the shareholders; or (d) in
the case of indemnification of an officer, agent or employee of the corporation,
by the general counsel of the corporation or such other officer(s) as the board
of directors may specify. Also, Section 33-772 provides that a corporation shall
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 he was a director of the corporation. In the case
of a proceeding by or in the right of the corporation or with respect to conduct
for which the director, officer, agent or employee was adjudged liable on the
basis that he received a financial benefit to which he was not entitled,
indemnification is limited to reasonable expenses incurred in connection with
the proceeding against the corporation to which the individual was named a
party.
The statute does specifically authorize a corporation to procure indemnification
insurance on behalf of an individual who was a director, officer, employer or
agent of the corporation. Consistent with the statute, Aetna Inc. has procured
insurance from Lloyd's of London and several major United States excess insurers
for its directors and officers and the directors and officers of its
subsidiaries, including the Depositor.
<PAGE>
<TABLE>
<CAPTION>
Item 16. Exhibits
Exhibits
<S> <C>
(4) Instruments Defining the Rights of Security Holders(1)
(a) Variable Annuity Contract (G-CDA-HF)(2)
(b) Variable Annuity Contract Certificate (GTCC-HF)(3)
(c) Variable Annuity Contract (GIT-CDA-HO)(4)
(d) Variable Annuity Contract (G-CDA-IA(RP))(5)
(e) Variable Annuity Contract Certificate (GTCC-IA(RP))(6)
(f) Variable Annuity Contract (G-CDA(99))(7)
(g) Variable Annuity Contract Certificate (CDACERT (99))(7)
(h) Variable Annuity Contract (GLIT-CDA-HO)(4)
(i) Variable Annuity Contract (GST-CDA-HO)(4)
(j) Variable Annuity Contract (IP-CDA-IB)(8)
(k) Variable Annuity Contract (I-CDA-IA(RP))(5)
(l) Variable Annuity Contract (I-CDA-HD)(4)
(m) Variable Annuity Contract (GIH-CDA-HB)(3)
(n) Variable Annuity Contract (IMT-CDA-HO)(3)
(o) Variable Annuity Contract (G-401-IB(X/M))(9)
(p) Variable Annuity Contract (G-CDA-IB(XC/SM))(9)
(q) Variable Annuity Contracts (G-CDA-IB(ATORP)) and
(G-CDA-IB(AORP))(10)
(r) Variable Annuity Contract (G-CDA-96(TORP))(11)
(s) Group Combination Annuity Contract (Nonparticipating) (A001RP95)(12)
(t) Group Combination Annuity Contract (Nonparticipating) (A007RC95)(12)
(u) Group Combination Annuity Certificate (Nonparticipating) (A020RV95)(12)
(v) Group Combination Annuity Certificate (Nonparticipating) (A027RV95)(12)
(w) Variable Annuity Contract (GID-CDA-HO)(13)
(x) Variable Annuity Contract (GSD-CDA-HO)(13)
(y) Variable Annuity Contract (IST-CDA-HO)(14)
(z) Variable Annuity Contract (I-CDA-HD(XC))(14)
(aa) Variable Annuity Contract (HR1O-DUA-GIA)(15)
(bb) Variable Annuity Contract (GA-UPA-GO)(15)
(cc) Variable Annuity Contracts (G-TDA-HH(XC/M)) and
(G-TDA-HH(XC/S))(16)
(dd) Variable Annuity Certificate (GTCC-HH(XC/M))(17)
(ee) Variable Annuity Certificate (GTCC-HH(XC/S))(17)
(ff) Variable Annuity Contract (IA-CDA-IA)(2)
(gg) Variable Annuity Contract (GLID-CDA-HO)(13)
(hh) Variable Annuity Contract (G-CDA-HD)(18)
(ii) Variable Annuity Contract Certificate (GTCC-HD)(6)
(jj) Variable Annuity Contract (G-CDA-IA(RPM/XC))(4)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(kk) Variable Annuity Contracts and Certificate (G-CDA-95(ORP)),
(G-CDA-95(TORP)) and (GTCC-95 (ORP))(10)
(ll) Variable Annuity Contracts and Certificate (G-CDA-ORP), (CDA-IB(TORP)) and (GTCC-95(TORP))(10)
(mm) Variable Annuity Contract (IRA-CDA-IC)(5)
(nn) Variable Annuity Contract (GIP-CDA-HB)(19)
(oo) Variable Annuity Contract (I-CDA-98(ORP))(6)
(5) Opinion re Legality
(10) Material contracts are listed under Item 14(a)10 in the Company's Form 10-K for the fiscal year ended
December 31, 1998 (File No. 33-23376), as filed with the Commission on March 25, 1999. Each of the
Exhibits so listed is incorporated by reference as indicated in the Form 10-K
(23) (a) Consent of Independent Auditors
(b) Consent of Legal Counsel (included in Exhibit (5) above)
(24) (a) Powers of Attorney(20)
(b) Certificate of Resolution Authorizing Signature by Power of Attorney(4)
(27) Financial Data Schedule
</TABLE>
Exhibits other than those listed above are omitted because they are not required
or are not applicable.
1. Incorporated by reference to Post-Effective Amendment No. 1 to Registration
Statement on Form S-1 (File No. 33-60477), as filed on April 15, 1996.
2. Incorporated by reference to Post-Effective Amendment No. 14 to Registration
Statement on Form N-4 (File No. 33-75964), as filed on July 29, 1997.
3. Incorporated by reference to Post-Effective Amendment No. 6 to Registration
Statement on Form N-4 (File No. 33-75980), as filed on February 12, 1997.
4. Incorporated by reference to Post-Effective Amendment No. 12 to the
Registration Statement or Form N-4 (File No. 33-75964), as filed on February
11, 1997.
5. Incorporated by reference to Post-Effective Amendment No. 5 to the
Registration Statement or Form N-4 (File No. 33-75986), as filed on April
12, 1996.
6. Incorporated by reference to Post-Effective Amendment No. 11 to Registration
Statement on Form N-4 (File No. 333-01107), as filed on February 4, 1999.
7. Incorporated by reference to Post-Effective Amendment No. 13 to Registration
Statement on Form N-4 (File No. 333-01107), as filed on April 7, 1999.
8. Incorporated by reference to Post-Effective Amendment No. 4 to Registration
Statement on Form N-4 (File No. 33-75988), as filed on April 15, 1996.
9. Incorporated by reference to Post-Effective Amendment No. 3 to Registration
Statement on Form N-4 (File No. 33-81216), as filed on April 7, 1996.
10. Incorporated by reference to Post-Effective Amendment No. 3 to Registration
Statement on Form N-4 (File No. 33-91846), as filed on April 15, 1996.
11. Incorporated by reference to Post-Effective Amendment No. 6 to Registration
Statement on Form N-4 (File No. 33-91846), as filed on August 6, 1996.
<PAGE>
12. Incorporated by reference to Registration Statement on Form N-4 (File No.
333-01107), as filed on February 21, 1996.
13. Incorporated by reference to Post-Effective Amendment No. 12 to Registration
Statement on Form N-4 (File No. 33-75982), as filed on February 20, 1997.
14. Incorporated by reference to Post-Effective Amendment No. 7 to Registration
Statement on Form N-4 (File No. 33-75992), as filed on February 13, 1997.
15. Incorporated by reference to Post-Effective Amendment No. 6 to Registration
Statement on Form N-4 (File No. 33-75974), as filed on February 28, 1997.
16. Incorporated by reference to Post-Effective Amendment No. 6 to Registration
Statement on Form N-4 (File No. 33-75962), as filed on April 17, 1996.
17. Incorporated by reference to Post-Effective Amendment No. 14 to Registration
Statement on Form N-4 (File No. 33-75962), as filed on April 17, 1998.
18. Incorporated by reference to Post-Effective Amendment No. 6 to Registration
Statement on Form N-4 (File No. 33-75982), as filed on April 22, 1996.
19. Incorporated by reference to Post-Effective Amendment No. 8 to Registration
Statement on Form N-4 (File No. 33-75980), as filed on August 19, 1997.
20. Incorporated by reference to Post-Effective Amendment No. 5 to Registration
Statement on Form N-4 (File No. 333-56297), as filed on February 25, 1999.
<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.
<PAGE>
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 all of the
requirements for filing on Form S-2 and has duly caused this Post-Effective
Amendment No. 5 to the Registration Statement on Form S-2 (File No. 33-60477) to
be signed on its behalf by the undersigned, thereunto duly authorized in the
City of Hartford, State of Connecticut, on this 20th day of April, 1999.
AETNA LIFE INSURANCE AND ANNUITY COMPANY
(REGISTRANT)
By: Thomas J. McInerney*
----------------------------------------
Thomas J. McInerney
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 5 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 )
- --------------------- (principal executive officer) )
Thomas J. McInerney )
)
Catherine H. Smith* Director and Chief Financial Officer ) April
- --------------------- ) 20, 1999
Catherine H. Smith )
)
Shaun P. Mathews* Director )
- --------------------- )
Shaun P. Mathews )
)
Deborah Koltenuk* Vice President, Treasurer and Corporate Controller )
- --------------------- )
Deborah Koltenuk )
By: /s/ J. Neil McMurdie
--------------------
J. Neil McMurdie
*Attorney-in-Fact
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Exhibit
- ----------- -------
<S> <C> <C>
16(5) Opinion re: Legality
----------
16(23)(a) Consent of Independent Auditors
----------
16(23)(b) Consent of Legal Counsel (included in Exhibit 16(5) above)
</TABLE>
[Aetna Logo] 151 Farmington Avenue
[Aetna Letterhead] Hartford, CT 06156
Julie E. Rockmore
Counsel
Law Division, RE4A
Investments & Financial Services
April 20, 1999 (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. 5 to Registration Statement on Form S-2
Prospectus Title: ALIAC Guaranteed Accumulation Account
File No. 33-60477
Dear Sir or Madam:
As Counsel of Aetna Life Insurance and Annuity Company, a Connecticut life
insurance company (the "Company"), I have represented the Company in connection
with the Guaranteed Accumulation Account (the "Account") available under certain
variable annuity contracts and the S-2 Registration Statement relating to such
Account.
In connection with this opinion, I or those for whom I have supervisory
responsibility, have reviewed Post-Effective Amendment No. 5 to the Registration
Statement on Form S-2 relating to such Account, including the prospectus, 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. 5 to the Registration Statement.
Sincerely,
/s/ Julie E. Rockmore
- ---------------------
Julie E. Rockmore
Counsel
Aetna Life Insurance and Annuity Company
Consent of Independent Auditors
The Shareholder and Board of Directors of
Aetna Life Insurance and Annuity Company:
We consent to the incorporation by reference in the registration statement No.
33-60477 on Post-Effective Amendment No. 5 on Form S-2 of Aetna Life Insurance
and Annuity Company and Subsidiary (the "Company") of our reports dated February
3, 1999 relating to the consolidated balance sheets of the Company as of
December 31, 1998 and 1997, and the related consolidated statements of income,
changes in shareholder's equity, and cash flows and all related schedules for
each of the years in the three-year period ended December 31, 1998, which
reports appear in the December 31, 1998 annual report on Form 10-K of the
Company and to the reference to our firm under the heading "Experts" in the
prospectus.
/s/ KPMG LLP
Hartford, Connecticut
April 20, 1999
