As filed with the Securities and Exchange Commission on February 26, 1997
Registration No. 33-54116
811-5649
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-4
REGISTRATION UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ___
Post-Effective Amendment No.6
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No.19
INTRAMERICA VARIABLE ANNUITY ACCOUNT
(Formerly named First Charter Variable Annuity Account)
INTRAMERICA LIFE INSURANCE COMPANY
(Name of Depositor)
9 Ramland Road Orangeburg, New York 10962
(Address of Depositor's Principal Executive Offices)
(Depositor's Telephone Number, including Area Code) (914) 398-4440
Richard G. Petitt
Intramerica Life Insurance Company
9 Ramland Road
Orangeburg, New York 10962
(Name and Address of Agent for Service)
Copy to:
Stephen E. Roth, Esq.
Sutherland, Asbill & Brennan, L.L.P.
1275 Pennsylvania Avenue, N. W.
Washington, D. C. 20004-2404
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Approximate Date of Proposed Public Offering: As soon as practicable after
the effective date of the Registration Statement.
It is proposed that this filing will become effective:
___ immediately upon filing pursuant to paragraph (b)
___ on _________ pursuant to paragraph (b)
___ 60 days after filing pursuant to paragraph (a)(i)
_X_ on May 1, 1997 pursuant to paragraph (a)(i)
___ 75 days after filing pursuant to paragraph (a)(ii)
___ on _____________ pursuant to paragraph (a)(ii) of Rule 485
If appropriate check the following box:
___ this Post-Effective Amendment designates a new effective date for a
previously
___ filed Post Effective Amendment.
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the
Registrant has registered an indefinite number or amount of securities
under the Securities Act of 1933. The Registrant filed the Rule 24f-2
Notice for the year ended December 31, 1996 on February 21, 1997.
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CROSS REFERENCE SHEET
PURSUANT TO RULE 495(a)
Showing Location in Part A (Prospectus) and Part B (Statement of Additional
Information) of Registration Statement of Information Required by Form N-4
___________________________________________________________________________
PART A
Item of Form N-4 Prospectus Caption
1. Cover Page..................... Cover Page
2. Definitions.................... Definitions
3. Synopsis or Highlights......... Summary; Fee Table
4. Condensed Financial
Information.................... Condensed Financial Information;
Calculation of Yields and Total
Returns; Other Performance Data
5. General Description of Registrant,
Depositor, and Portfolio Companies
(a) Depositor................. Intramerica Life Insurance
Company
(b) Registrant................ Summary; Intramerica Variable
Annuity Account
(c) Portfolio Company........ Summary; Scudder Variable Life
Investment Fund
(d) Fund Prospectus.......... Scudder Variable Life Investment
Fund
(e) Voting Rights............ Voting Rights
(f) Administrators........... Records and Reports; Written
Notices and Requests; Other
Inquiries
6. Deductions and Expenses....... Summary; Charges and Deductions
(a) General................. Summary; Mortality and Expense
Risk Charge; Contract
Administration Charge; Records
Maintenance Charge; Premium
Taxes; Other Taxes; Transfer
Charges
(b) Sales Load............... Summary; Charges and Deductions
(c) Special Purchase Plan.... Employment-Related Benefit Plans
(d) Commissions.............. Distribution of the Contract
(e) Expenses - Registrant.... Summary; Other Taxes
(f) Fund Expenses............ Summary; Scudder Variable Life
Investment Fund;
(g) Organizational Expenses N/A
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Item of Form N-4 Prospectus Caption
7. General Description of the Variable
Annuity Contracts
(a) Persons with Rights...... Summary; The Contract;
Distributions Under the Contract;
Voting Rights
(b) (i) Allocation of
Premium Payments Summary; Allocation of Net
Payments
(ii) Transfers........ Summary; Transfers
(iii) Exchanges........ N/A
(c) Changes................... Addition, Deletion, or
Substitution
of Investments; The Contract
(d) Inquiries................. Records and Reports; Written
Notices and Requests; Owner
Inquiries
8. Annuity Period................. Summary; Annuity Payments;
Maturity Date; Annuity Income
Options
9. Death Benefit.................. Summary; Death Benefit; Death of
Owner; Employment-Related Benefit
Plans; Annuity Income Options
10. Purchases and Contract Value
(a) Purchases................. Contract Application and Issuance
of Contracts; Payments;
Allocation of Net Payments;
Account Value; Contract Ownership
(b) Valuation................. Account Value
(c) Daily Calculation......... Account Value
(d) Underwriter............... Distribution of the Contract
11. Redemptions
(a) By Owner.................. Summary; Full and Partial
Surrender Privileges; Death
Benefit; Annuity Payments;
Annuity Income Options
(b) Texas ORP................. N/A
(c) Check Delay............... Deferment of Payment and
Transfers
(d) Lapse..................... Contract Expiration
(e) Free Look................. Examination Period
12. Taxes.......................... Summary; Certain Federal Income
Tax Consequences
13. Legal Proceedings.............. Legal Proceedings
14. Table of Contents of the
Statement of Additional Index to Statement of Additional
Information.................... Information
PART B
Statement of Additional
Item of Form N-4 Information Caption
15. Cover Page..................... Cover Page
16. Table of Contents.............. Table of Contents
17. General Information State...... Regulation of Intramerica
and History
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Statement of Additional
Item of Form N-4 Information Caption
18. Services
(a) Fees and Expenses
of Registrant............. N/A
(b) Management Contracts...... N/A
(c) Custodian................. Safekeeping of the Variable
Account's Assets
Independent Accountants... Financial Statements; Independent
Accountants
(d) Assets of Registrant...... N/A
(e) Affiliated Persons........ N/A
(f) Principal Underwriter..... Part A - Distribution of the
Contract
19. Purchase of Securities
Being Offered.................. Part A - The Contract;
Distribution of the Contract
20. Underwriters................... Part A - Distribution of the
Contract
21. Calculation of Performance Data Calculation of Yields and Total
Returns
22. Annuity Payments............... Part A - Annuity Payments;
Annuity Income Options
23. Financial Statements........... Financial Statements
PART C
Item of Form N-4 Part C Caption
24. Financial Statements and
Exhibits...................... Financial Statements and Exhibits
(a) Financial Statements..... (a) Financial Statements
(b) Exhibits................. (b) Exhibits
25. Directors and Officers of the
Depositor..................... Directors and Officers of the
Depositor
26. Persons Controlled By or Under
Common Control With the
Depositor or Registrant....... Persons Controlled By or Under
Common Control With the
Depositor or Registrant
27. Number of Contract Owners..... Number of Contract Owners
28. Indemnification............... Indemnification
29. Principal Underwriters........ Principal Underwriters
30. Location of Accounts.......... Location of Accounts and Records
and Records
31. Management Services........... Management Services
32. Undertakings.................. Undertakings
Signatures.................... Signatures
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SCUDDER HORIZON PLAN
PROSPECTUS FOR
FLEXIBLE PREMIUM VARIABLE DEFERRED ANNUITY
This Prospectus describes the no sales load Flexible Premium Variable
Deferred Annuity (the "Contract") offered by Intramerica Life Insurance
Company ("Intramerica"), 9 Ramland Road, Orangeburg, New York 10962. The
Contract is designed to provide for accumulation of capital on a tax-
deferred basis for retirement or other long-term purposes. The Contract is
available to individuals as well as to certain retirement plans and
individual retirement accounts that qualify for special federal income tax
treatment. The Contract also may be purchased for use as an Individual
Retirement Annuity that qualifies for special federal income tax treatment
applicable to "IRAs."
The Contract currently may be purchased for a minimum initial payment
of $2,500. No commission or sales charge is deducted from the purchase
payments or from amounts payable upon surrender of the Contract. The Owner
of a Contract (the "Owner") may make additional payments subject to certain
conditions and limitations.
The Owner may direct that payments accumulate on a completely variable
basis, a completely fixed basis or a combination thereof. To the extent
the Owner elects to have payments invested on a variable basis, he or she
may allocate all or a portion of the payments to one or more subaccounts
(the "Subaccounts") of the Intramerica Variable Annuity Account (the
"Variable Account"). Each Subaccount invests exclusively in mutual fund
portfolios of the Scudder Variable Life Investment Fund (the "Fund"), an
investment company registered under the Investment Company Act of 1940, as
amended. The Fund offers one class of shares for the Money Market
Portfolio and two classes of shares (Class A and Class B shares) for the
other portfolios. The Subaccounts invest exclusively in the Money Market
Portfolio and Class A shares of the Bond Portfolio, the Capital Growth
Portfolio, the Balanced Portfolio, the Growth and Income Portfolio, the
International Portfolio, and the Global Discovery Portfolio. (Continued on
next page)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Date of This Prospectus is May 1, 1997
<PAGE>
(Continued from cover page)
Class B shares are subject to a 12b-1 fee or charge equal to an annual rate
of up to 0.25% of the average daily net asset value of its Class B shares
of the applicable portfolio. Class A shares are not subject to such
charges. A more complete description of Class A and Class B shares is set
forth in the attached prospectus for the Fund. Scudder, Stevens & Clark,
Inc. acts as sole investment adviser to the Fund. The Owner bears the
complete investment risk for all payments allocated to the Variable
Account.
This Prospectus sets forth the information that a prospective investor
should know before investing in the Contract. Please read it carefully and
retain it for future reference. A Statement of Additional Information
about the Contract and the Variable Account, which has the same date as
this Prospectus, has been filed with the Securities and Exchange Commission
and is incorporated herein by reference. The Statement of Additional
Information is available at no cost by writing to Intramerica Life
Insurance Company, 9 Ramland Road, Orangeburg, New York 10962 or by calling
(800) 833-0194. The table of contents of the Statement of Additional
Information is included at the end of this Prospectus.
<PAGE>
TABLE OF CONTENTS
Page
DEFINITIONS 1
SUMMARY 4
FEE TABLE 8
CONDENSED FINANCIAL INFORMATION 10
Financial Statements for the Variable Account
and Intramerica 11
CALCULATION OF YIELDS AND TOTAL RETURNS 11
OTHER PERFORMANCE DATA 12
INTRAMERICA AND THE VARIABLE ACCOUNT 13
Intramerica Life Insurance Company 13
Intramerica Variable Annuity Account 13
SCUDDER VARIABLE LIFE INVESTMENT FUND 14
Addition, Deletion, or Substitution
of Investments 17
THE CONTRACT 18
Contract Application and Issuance of the Contract 18
Examination Period 18
Payments 19
Allocation of Net Payments 20
Transfers 21
Account Value 24
Contract Ownership 25
Assignment of the Contract 26
DISTRIBUTIONS UNDER THE CONTRACT 27
Full and Partial Surrender Privileges 27
Annuity Payments 28
Annuity Income Options 29
Maturity Date 31
Death Benefit 32
Beneficiary Provisions 32
Death of Owner 32
Employment-Related Benefit Plans 33
CHARGES AND DEDUCTIONS 33
Mortality and Expense Risk Charge 33
Contract Administration Charge 34
Records Maintenance Charge 34
Premium Taxes 35
Other Taxes 35
Transfer Charges 35
Charges Against the Fund 35
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TABLE OF CONTENTS
Page
CERTAIN FEDERAL INCOME TAX CONSEQUENCES 36
Tax Status of the Contract 37
Taxation of Annuities 39
Taxation of Intramerica 42
GENERAL PROVISIONS 43
The Contract 43
Deferment of Payment and Transfers 43
Contract Expiration 43
Misstatement of Age or Sex 43
Nonparticipating Contract 44
Written Notices and Requests:
Owner Inquiries 44
Records and Reports 44
DISTRIBUTION OF THE CONTRACT 44
THE GENERAL ACCOUNT 45
VOTING RIGHTS 46
LEGAL PROCEEDINGS 47
ADDITIONAL INFORMATION 47
TABLE OF CONTENTS FOR STATEMENT
OF ADDITIONAL INFORMATION 48
If you have any questions about your Contract, please call or write our
home office at 9 Ramland Road, Orangeburg, New York 10962, (800) 833-0194.
The Contract is available only in the State of New York.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN
WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESMAN OR OTHER
PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN
CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON.
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DEFINITIONS
Account Value -- The total on any Valuation Date of the amount(s) in
the Subaccount(s) and the General Account of a Contract. The Account Value
is referred to as the Accumulated Value in the Contract.
Age -- The Annuitant's age on his or her birthday nearest to the
Contract Anniversary.
Annuitant -- The person whose life is used to determine the duration
and amount of any Annuity Payments and upon whose death, if it occurs prior
to the Maturity Date, a Death Benefit under the Contract is paid.
Annuity Income Option -- One of the ways the Owner may elect to
receive Annuity Payments.
Annuity Payments -- A series of payments made under an Annuity Income
Option if the Annuitant is living on the Maturity Date and the Contract is
in force at such time.
Beneficiary -- The person(s) designated under the Contract to receive
the benefits of the Contract if no Owner is living.
Code -- The Internal Revenue Code of 1986, as amended, or any
successor provision or provisions.
Contract -- The no sales load Flexible Premium Variable Deferred
Annuity offered by Intramerica and described in this Prospectus. It
includes the Contract, any endorsements and amendments, application, and
financial questionnaire.
Contract Anniversary -- The same date in each year as the Contract
Date.
Contract Date -- The date set forth in the Contract that is used to
determine Contract Months, Contract Years and Contract Anniversaries. The
Contract Date will be the same as the Effective Date unless the Effective
Date is the 29th, 30th, or 31st of a month, in which case the Contract Date
will be the 28th of the same month.
Contract Month -- A period beginning on a Monthly Anniversary and
ending on the day immediately preceding the next Monthly Anniversary.
Contract Year -- A period beginning on a Contract Anniversary and
ending on the day immediately preceding the next Contract Anniversary.
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Death Benefit -- An amount equal to the greater of the Account Value
or the Guaranteed Death Benefit of the Contract, payable in the event of
the death of the Annuitant prior to the Maturity Date.
Declaration Period -- A period of time specified by Intramerica of not
less than one year or more than five, during which specified rates of
interest will be paid on amounts allocated to the General Account.
Effective Date -- A date within two business days after a completed
application and the full initial Payment have been received by Intramerica.
Examination Period -- The period of time during which the Owner may
cancel the Contract and receive a refund of the initial Payment plus or
minus any gains or losses on investments in the selected Subaccount(s)
and/or interest earned on amounts allocated to the General Account. The
Owner may cancel the Contract within thirty days after receiving such
Contract.
Fund -- The Scudder Variable Life Investment Fund, an open-end,
diversified management investment company in which the Subaccounts invest.
General Account -- The account containing assets of Intramerica other
than those allocated to the Variable Account or any other separate account.
It provides for a minimum rate of accumulation that will be fixed and
guaranteed for a period of not less than one year or more than five.
Guaranteed Death Benefit -- The sum of the Payments made less any
partial surrenders.
Home Office -- The principal office of Intramerica, located at 9
Ramland Road, Orangeburg, New York 10962.
Intramerica -- Intramerica Life Insurance Company.
Joint Annuitant -- If Annuity Income Option 2 is selected, the person
designated by the Owner whose life, in addition to the life of the
Annuitant, is used to determine the amount and duration of Annuity
Payments.
Joint Owner -- The person sharing the privileges of ownership as
stated in the Contract. If a Joint Owner is named, Intramerica will
presume ownership to be as joint tenants with right of survivorship.
Maturity Date -- The date on which Annuity Payments are scheduled to
begin if the Annuitant is living.
Monthly Anniversary -- The same date in each month as the Contract
Date.
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Net Payment -- The Payment less any applicable premium taxes.
Nonqualified Contract -- A Contract other than a Qualified Contract.
Owner -- The person having the privileges of ownership stated in the
Contract, including the right to receive Annuity Payments if the Annuitant
is living on the Maturity Date and the Contract is in force.
Payment -- Any initial or subsequent investment in the Contract.
Payments are referred to as Premiums in the Contract.
Portfolio -- One of the separate investment portfolios of the Fund in
which the Variable Account invests. They are: the Money Market Portfolio
and Class A shares of the Bond Portfolio, the Capital Growth Portfolio, the
Balanced Portfolio, the Growth and Income Portfolio, the International
Portfolio, and the Global Discovery Portfolio.
Proof of Death -- One of the following: (i) a certified copy of a
death certificate, (ii) a copy of a certified decree of a court of
competent jurisdiction as to the finding of death, or (iii) any other proof
satisfactory to Intramerica.
Qualified Contract -- A Contract that qualifies as an individual
retirement annuity under Section 408(b) of the Code or a Contract purchased
and held by a retirement plan or as an individual retirement account that
qualifies for special federal income tax treatment under Section 401(a) or
408(a) of the Code.
SEC -- Securities and Exchange Commission.
Subaccount -- An investment division of the Variable Account. Each
Subaccount invests in shares of a different Fund Portfolio.
Unit Value -- The value of each unit which is calculated each
Valuation Period. It is similar to the net asset value of a mutual fund.
The Unit Value for each Subaccount is stated in the section of the
prospectus entitled "CONDENSED FINANCIAL INFORMATION" under the heading
"Accumulation Unit Value".
Valuation Date -- Each day on which valuation of the assets of the
Variable Account is required by applicable law, which currently is each day
that the New York Stock Exchange is open for trading.
Valuation Period -- The period that begins at the close of one
Valuation Date and ends at the close of the next succeeding Valuation Date.
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Variable Account -- Intramerica Variable Annuity Account, which is a
separate account of Intramerica consisting of assets allocated under the
Contract to the Variable Account and assets allocated under other variable
annuity contracts issued by Intramerica.
Written Notice (or Written Request) -- A notice or request made in
writing by the Owner or other person to Intramerica. Such notice or
request must be on the form provided by Intramerica and/or contain such
information as Intramerica requires to process the notice or request. All
written notices and requests must be sent to Intramerica at its Home
Office.
1940 Act -- The Investment Company Act of 1940, as amended.
SUMMARY
This summary contains certain basic information about the Contract.
The following questions and answers should be read in conjunction with the
detailed information appearing elsewhere in this Prospectus.
Why should a person consider purchasing the Contract?
The Contract is designed to provide for accumulation of capital on a
tax-deferred basis for retirement or other long-term purposes.
How can the Contract be purchased?
The Contract currently may be purchased for a minimum initial Payment
of $2,500. No commission or sales charge is deducted from the purchase
price or from amounts payable upon surrender of the Contract. An Owner may
make additional Payments under the Contract, subject to certain conditions
and limitations, and will not be charged a commission or sales charge for
such additional Payments invested in the Contract. (See "Contract
Application and Issuance of the Contract," p. 18 and "Payments," p. 19)
Can this Contract be used as an IRA?
Yes, the Contract is available to individuals purchasing individual
retirement annuities. It is also available to certain retirement plans and
retirement accounts that qualify for special federal income tax treatment.
Intramerica requires that persons purchase separate Contracts if they
desire to invest moneys qualifying for different annuity tax treatment
under the Code.
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What investments are available under the Contract?
Currently, the Owner may invest in the following Subaccounts for a
variable rate of return or the General Account for a fixed rate of return.
The Subaccounts are: Money Market, Bond, Capital Growth, Balanced, Growth
and Income, International, and Global Discovery. Each Subaccount invests
in Class A shares of the corresponding mutual fund Portfolio. All
Portfolios are part of the Scudder Variable Life Investment Fund. The
assets of each Portfolio are held separately from the other Portfolios and
each has separate investment objectives and policies which are described
more fully in the accompanying prospectus for the Fund. The investment
adviser for the Portfolios is Scudder, Stevens & Clark, Inc. (See "Scudder
Variable Life Investment Fund," p. 14)
How are Payments allocated under the Contract?
Payments may be allocated to one or more Subaccounts and/or the
General Account, as selected by the Owner. Each Subaccount invests in a
separate mutual fund Portfolio with distinct investment objectives and
policies. The Account Value will vary with the investment performance of
the selected Subaccount(s) and the corresponding mutual fund Portfolio(s).
The Owner bears the complete investment risk for all Payments invested in
the Subaccount(s). Payments allocated to the General Account will earn
interest at rates declared and guaranteed by Intramerica. (See "Allocation
of Net Payments," p. 20, "Intramerica Variable Annuity Account," p. 13 and
"The General Account," p. 45)
What is the purpose of the Variable Account?
The Variable Account was established under the laws of the State of
New York, to invest payments received under variable annuities including
the Contract. Under New York law, the assets in the Variable Account
associated with the Contract generally are not chargeable with the
liabilities arising out of any other business conducted by Intramerica. To
the extent that an Owner allocates amounts to the Variable Account, the
Account Value will vary in accordance with the investment performance of
the selected Subaccounts. Therefore, the Owner bears the entire investment
risk under the Contract for amounts allocated to the Variable Account.
(See "Intramerica Variable Annuity Account," p. 13)
The Variable Account was originally established on June 8, 1988 by
First Charter Life Insurance Company ("First Charter"). On November 1,
1992, the Variable Account was transferred from First Charter Life
Insurance Company to Intramerica pursuant to a merger of First Charter with
and into Intramerica. See "Intramerica and the Variable Account," p. 13.
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Can assets be transferred within the Contract?
Yes. The Owner has the flexibility to transfer assets among the
Subaccounts and from the Subaccounts to the General Account at any time.
Amounts may be transferred within the General Account and from the General
Account to the Subaccounts at the end of a Declaration Period. Currently,
no charge is being imposed for any transfers among the Subaccounts or to
the General Account. Intramerica, at its sole discretion, may at any time
in the future impose a transfer charge of $20 for the third and each
subsequent transfer request made during a Contract Year. (See "Transfers,"
p. 21)
What are the current charges and deductions associated with the Contract?
Deductions will be made from the Contract's Account Value in the
Subaccounts on a daily basis for (i) costs incurred by Intramerica in
administering the Contract at an annual rate of .30% of the value of net
assets in each Subaccount and (ii) the assumption by Intramerica of certain
mortality and expense risks in connection with the Contract at an annual
rate of .40% of the value of net assets in each Subaccount. These charges
are not imposed on amounts allocated to the General Account. (See "Charges
and Deductions," p. 33)
Currently, Intramerica does not charge an annual maintenance fee.
However, the Contract permits Intramerica to deduct an amount up to $40.
(See "Records Maintenance Charge," p. 34)
No premium tax currently is payable by Intramerica under New York law.
Intramerica reserves the right to deduct any premium taxes payable in
respect of any future Payments. (See "Premium Taxes," p. 35)
The charges noted above are those currently being deducted by
Intramerica. For a more detailed discussion, including maximum level
charges set forth in the Contract, see "Charges and Deductions," p. 33.
The net asset values of the Subaccounts reflect the investment
advisory fee and other expenses incurred by the Fund. (See "Charges
Against the Fund," p. 35)
What are the annuity benefits under the Contract?
If the Annuitant is living on the Maturity Date and the Contract is in
force, Annuity Payments will be made to the Owner in accordance with the
terms of the Contract and the Annuity Income Option selected by the Owner.
Three Annuity Income Options are currently available: (i) a life annuity
with installment refund, (ii) joint and survivor life annuity with
installment refund and (iii) installments for life. In addition, the Owner
may select any other Annuity Income Option which is offered by Intramerica
on the Maturity Date of the Contract. The amount of the Annuity Payments
under the selected Annuity Income Option will be fixed at the Maturity
Date.
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What other distributions can be made under the Contract?
A full or partial surrender of the Contract may be made at any time,
subject to certain conditions. No commission or surrender charge is
deducted from the Account Value upon a full or partial surrender. No full
or partial surrender may be made after the Maturity Date or the Annuitant's
death. (See "Full and Partial Surrender Privileges," p. 27) If the
Annuitant dies before the Maturity Date, the greater of the Account Value
or the Guaranteed Death Benefit will be paid to the Owner. (See "Death
Benefit," p. 32) If the Owner of a Nonqualified Contract dies before the
Maturity Date and prior to the Annuitant's death, the Account Value will be
paid in a lump sum no later than five years following the Owner's death.
(See "Death of Owner," p. 32)
What are the federal income tax consequences of investment in the Contract?
With respect to Owners who are natural persons, there should be no
federal income tax payable on increases in the Account Value until there is
a distribution (e.g., a Surrender or Annuity Payment) or deemed
distribution (e.g., a pledge or assignment of the Contract) under the
Contract. Generally, a portion of any distribution or deemed distribution
will be taxable as ordinary income. The taxable portion of certain
distributions will be subject to withholding unless the taxpayer elects
otherwise. In addition, a penalty tax may apply to distributions or deemed
distributions under certain circumstances. (See "Certain Federal Income
Tax Consequences," p. 36)
Can the Contract be returned after it is delivered?
Yes. The Contract contains a provision for an Examination Period
which permits the Owner to cancel a Contract by returning it within thirty
days after receipt. Upon return of the Contract to our Home Office,
Intramerica will refund the initial Payment plus or minus any investment
experience on amounts allocated to the Subaccounts and interest earned on
amounts allocated to the General Account. (See "Examination Period," p.
18)
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FEE TABLE
This Fee Table illustrates the current charges and deductions under
the Contract, including fees and expenses of the Fund for the 1996 calendar
year. The purpose of this table is to assist in understanding the various
cost and expenses that the Owner will bear directly and indirectly.
Information pertaining to the Fund has been provided by the Fund. For more
information on the charges described in this Table, see "CHARGES AND
DEDUCTIONS" and the Fund's prospectus, a current copy of which accompanies
this Prospectus.
Contract Owner Transaction Expenses
Sales Load Imposed on Payments NONE
Deferred Sales Load NONE
Surrender Fee NONE
Transfer Charge (transfers made between Subaccounts
and/or to the General Account during a Contract Year) NONE
Annual Records Maintenance Charge NONE
Variable Account Annual Expenses (as a percentage of Account Value)
Contract Administration Charge 0.30%
Mortality and Expense Risk Charge 0.40%
Total Variable Account Annual Expenses 0.70%
Fund Annual Expenses (as a percentage of average net assets for the 1996
calendar year)
Other Total
Expenses Portfolio
Management (after Reim- Operating
Fees bursement) Expenses
Money Market Portfolio
Bond Portfolio
Capital Growth Portfolio
Balanced Portfolio
International Portfolio
Growth and Income Portfolio
Global Discovery Portfolio
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Example
The following example illustrates the expenses the Owner would pay on a
$1,000 investment, assuming 5% annual return on assets, if the Owner
continued the Contract, surrendered or annuitized at the end of each
period:
1 Year 3 Years 5 Years 10 Years
Money Market Subaccount
Bond Subaccount
Capital Growth Subaccount
Balanced Subaccount
International Subaccount
Growth and Income Subaccount
Global Discovery Subaccount
The fee table and example set forth above are based upon the current
level of charges deducted by Intramerica. Intramerica reserves the right
to increase the Mortality and Expense Risk Charge to .70% per year,
establish a Records Maintenance Charge of up to $40 per year and impose a
transfer charge of $20 for the third and each subsequent transfer request
made during a Contract Year. For a more detailed description of all charges
set forth in the Contract, see "CHARGES AND DEDUCTIONS."
Intramerica, as well as other insurance companies whose separate
accounts invest in the Fund, has agreed to reimburse the Fund to the extent
that the total operating expenses exceed .75% for each Portfolio except for
the International and Global Discovery Portfolios, where total operating
expenses are to be reimbursed to the extent they exceed 1.50%.
This example should not be considered representative of past or future
expenses, performance or returns. Actual expenses may be greater or less
than those shown. The assumed 5% annual return is hypothetical; actual
annual returns may be more or less than the assumed return.
9
<PAGE>
<TABLE>
C O N D E N S E D F I N A N C I A L I N F O R M A T I O N
The following condensed financial information is derived from the financial
statements of the Variable Account. The data should be read in conjunction with
the financial statements, related notes and other financial information included
in the Statement of Additional Information.
The following table sets forth certain information regarding the
Subaccounts for a Contract for the period from commencement of business
operations through December 31, 1996.
<CAPTION>
Accumulation unit value:
Year Ended December 31, Commencement
Subaccount 1996 1995 1994 1993 1992 1991 1990 Date*
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Money Market $18.056 $17.300 $16.494 $16.019 $15.729 $15.331 $14.598 $14.167
Bond $22.979 $22.508 $19.181 $20.287 $18.179 $17.109 $14.653 $13.877
Capital Growth $33.863 $28.388 $22.222 $24.773 $20.638 $19.514 $14.096 $15.820
Balanced $28.326 $25.496 $20.270 $20.840 $19.531 $18.389 $14.592 $15.401
International $30.987 $27.188 $24.641 $25.027 $18.287 $19.003 $17.174 $20.228
Growth and Income $20.713 $17.075 $13.053 N/A N/A N/A N/A $12.500
Global Discovery $13.126 N/A N/A N/A N/A N/A N/A $12.500
* The Money Market, Bond, Capital Growth, Balanced and International
Subaccounts commenced operations on July 11, 1990. The Growth and Income
Subaccount commenced operations on May 1, 1994. The Global Discovery Subaccount
commenced operations on May 1, 1996.
</TABLE>
<TABLE>
<CAPTION>
Number of units outstanding at end of period:
Year Ended December 31,
Subaccount 1996 1995 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C>
Money Market 238,274 243,859 268,339 131,078 125,768 47,824 26,377
Bond 85,140 96,927 94,625 98,676 96,098 62,249 6,283
Capital Growth 275,153 288,084 282,635 245,368 207,556 57,599 15,167
Balanced 143,029 139,688 127,222 148,473 119,541 37,971 7,381
International 305,834 302,226 339,372 261,484 84,950 36,962 12,741
Growth and Income 381,681 279,098 145,245 N/A N/A N/A N/A
Global Discovery 115,344 N/A N/A N/A N/A N/A N/A
</TABLE>
10
<PAGE>
Financial Statements for the Variable Account and Intramerica
The financial statements and reports of independent certified public
accountants for the Variable Account and Intramerica are contained in the
Statement of Additional Information.
C A L C U L A T I O N O F Y I E L D S A N D
T O T A L R E T U R N S
From time to time, Intramerica may advertise yields and average annual
total returns for the Subaccounts. In addition, Intramerica may advertise
the effective yield of the Money Market Subaccount for the Contract. These
figures will be based on historical earnings and are not intended to
indicate future performance.
The yield of the Money Market Subaccount for the Contract refers to
the annualized income generated by an investment in the Subaccount over a
specified seven-day period. The yield is calculated by assuming that the
income generated for that seven-day period is generated each seven-day
period over a 52-week period and is shown as a percentage of the
investment. The effective yield is calculated similarly, but when
annualized, the income earned by an investment in the Subaccount is assumed
to be reinvested. The effective yield will be slightly higher than the
yield because of the compounding effect of this assumed reinvestment.
The yield of a Subaccount (except the Money Market Subaccount) for the
Contract refers to the annualized income generated by an investment in the
Subaccount over a specified thirty-day period. The yield is calculated by
assuming that the income generated by the investment during that thirty-day
period is generated each thirty-day period over a twelve-month period and
is shown as a percentage of the investment.
The average annual total return of a Subaccount for the Contract
refers to return quotations assuming an investment has been held in the
Subaccount for various periods of time including, but not limited to, a
period measured from the date the Subaccount commenced operations. When a
Subaccount has been in operation for one, five and ten years, respectively,
the average annual total return for these periods will be provided. The
total return quotations for the Contract will represent the average annual
compounded rates of return that would equate an initial investment of
$1,000 under the Contract to the redemption value of that investment as of
the last day of each of the periods for which total return quotations are
provided.
11
<PAGE>
The yield and total return calculations for the Contract do not
reflect the effect of any premium taxes that may be applicable to a
particular Contract. To the extent that a premium tax is applicable to a
particular Contract, the yield and/or total return of that Contract will be
reduced. Because charges differ under different variable annuity contracts
funded by the Subaccounts, the yield and total return calculations for the
Subaccounts will be different for the Contract than for other such variable
annuity contracts. For additional information regarding yields and total
returns calculated using the standard formats briefly described above,
please refer to the Statement of Additional Information, a copy of which
may be obtained from Intramerica.
O T H E R P E R F O R M A N C E D A T A
Intramerica may from time to time disclose average annual total return
in non-standard formats and cumulative total return for Contracts funded by
the Subaccounts.
Intramerica may from time to time also disclose yields, standard total
returns and non-standard total returns for the Fund's Portfolios, including
such disclosures for periods prior to the date the Variable Account
commenced operations. For periods prior to the date the Variable Account
commenced operations, performance information for Contracts funded by the
Subaccounts will be calculated based on the performance of the Fund's
Portfolios and the assumption that the Subaccounts were in existence for
the same periods as those indicated for the Fund's Portfolios, with the
level of Contract charges equal to those that were in effect at the
inception of the Subaccounts for the Contracts.
Non-standard performance data will only be disclosed if the standard
performance data for the required periods is also disclosed. For
additional information regarding the calculation of other performance data,
please refer to the Statement of Additional Information, a copy of which
may be obtained from Intramerica.
Performance and expense information for the Contract and each
Subaccount may be compared in advertising, sales literature, and other
communications to performance and expense information of other variable
annuity contracts tracked by independent services such as Lipper Analytical
Services, Inc. ("Lipper"), Morningstar and Variable Annuity Research Data
Service ("V.A.R.D.S."), which monitor and rank the performance and expenses
of variable annuity issuers on an industry-wide basis. From time to time,
Intramerica may also compare performance information for the Contract to
other indices that measure performance, such as Standard & Poor's 500
Composite ("S & P 500") or the Dow Jones Industrial Average ("Dow").
Unmanaged indices may assume reinvestment of dividends that generally do
not reflect deductions for administrative and management costs and
expenses.
12
<PAGE>
Intramerica may also report other information including the effect of
tax-deferred compounding on a Subaccount's investment returns or returns in
general, which may be illustrated by tables, graphs, or charts. All income
and capital gains derived from Subaccount investments are reinvested and
compound tax-deferred until distributed. Such tax-deferred compounding can
lead to substantial long-term accumulation of assets, provided that the
underlying Portfolio's investment experience is positive.
I N T R A M E R I C A A N D
T H E V A R I A B L E A C C O U N T
Intramerica Life Insurance Company
Intramerica is a stock life insurance company incorporated under the
laws of the State of New York on March 24, 1966, and offers graded death
benefit life insurance in New York and New Jersey on a direct marketing
basis. Intramerica had assets of $129.4 million as of December 31, 1996.
The principal offices of Intramerica are located at 9 Ramland Road,
Orangeburg, New York 10962, and its telephone number at that address is
(800) 833-0194.
In 1991, Charter National Life Insurance Company ("Charter") purchased
the Colonial Penn Group, Inc., which indirectly owns Intramerica, a New
York domestic life insurer. On November 1, 1992, First Charter Life
Insurance Company ("First Charter"), a subsidiary of Charter, was merged
with and into Intramerica. As the company surviving the merger,
Intramerica acquired legal ownership of all of First Charter's assets,
including the Variable Account, and became responsible for all of First
Charter's liabilities and obligations. As a result of the merger, all
Contracts issued by First Charter before the merger became Contracts issued
by Intramerica after the merger.
Charter is a wholly owned subsidiary of Leucadia National Corporation
("Leucadia"), a New York corporation. Leucadia is a diversified holding
company, the common stock of which is listed on the New York and Pacific
Stock Exchanges under the symbol ("LUK"). Campet, Inc., a Leucadia
subsidiary, owns all of the outstanding stock of CNL, Inc. ("CNL"), the
principal underwriter for the Contract. See "DISTRIBUTION OF THE
CONTRACT."
Intramerica Variable Annuity Account
The Variable Account was established by First Charter on June 8, 1988,
as a separate investment account under the laws of the State of New York.
It became a separate investment account of Intramerica on November 1, 1992
when First Charter was merged into Intramerica (see "Intramerica Life
13
<PAGE>
Insurance Company" above). The name of the Variable Account was changed to
the "Intramerica Variable Annuity Account" in connection with the merger
described above. The Account was not otherwise changed. The Variable
Account will receive and invest the Payments under the Contract. In
addition, the Variable Account may receive and invest payments for other
variable annuity contracts offered by Intramerica.
Under New York law, the assets of the Variable Account are the
property of Intramerica and the obligations of the Contract are obligations
of Intramerica. Assets in the Variable Account attributable to the Contract
generally are not chargeable with liabilities arising out of any other
business conducted by Intramerica. However, assets of the Variable Account
will be available to cover the liabilities of the General Account of
Intramerica to the extent that the assets of the Variable Account exceed
its liabilities arising under the contracts it supports. The obligations
under the Contracts are obligations of Intramerica.
The Variable Account currently is divided into Subaccounts. Each
Subaccount invests exclusively in shares of one of the Portfolios of the
Fund. Income, gains and losses from the assets of each Subaccount, whether
or not realized, are credited to or charged against such Subaccount without
regard to income, gains or losses from any other Subaccount or arising out
of any other business conducted by Intramerica.
The Variable Account is registered with the SEC as a unit investment
trust under the 1940 Act and meets the definition of a "separate account"
under the Federal securities laws. Registration with the SEC does not
involve supervision of the management or investment practices or policies
of the Variable Account or Intramerica by the SEC.
S C U D D E R V A R I A B L E L I F E
I N V E S T M E N T F U N D
The Variable Account will invest exclusively in shares of the Scudder
Variable Life Investment Fund (the "Fund"). The Fund is registered with
the SEC under the 1940 Act as an open-end, diversified management
investment company. Scudder, Stevens & Clark, Inc. is the sole investment
adviser to the Fund. The registration of the Fund does not involve
supervision of its management or investment practices or policies by the
SEC. The Fund is designed to provide an investment vehicle for variable
annuity contracts and variable life insurance policies. Therefore, shares
of the Fund are sold only to insurance company separate accounts, including
the Variable Account. Intramerica cannot guarantee that the Fund will
always be available for the Contract, but in the unlikely event that it is
not available, Intramerica will do everything reasonably necessary to
secure the availability of a comparable fund.
14
<PAGE>
In addition to the Variable Account, shares of the Fund are being sold
to variable life insurance and variable annuity separate accounts of other
insurance companies, including an insurance company affiliated with
Intramerica. In the future, it may be disadvantageous for the Variable
Account and variable annuity separate accounts of other life insurance
companies, or for both variable life insurance separate accounts and
variable annuity separate accounts, to invest simultaneously in the Fund.
Currently, neither Intramerica nor the Fund foresees any such disadvantages
to either variable annuity owners or variable life insurance owners. The
management of the Fund intends to monitor events in order to identify any
material conflicts between and among variable annuity owners and variable
life insurance owners and to determine what action, if any, should be taken
in response. In addition, if Intramerica believes that the Fund's response
to any of those events or conflicts insufficiently protects Owners, it will
take appropriate action on its own. For more information, see "Investment
Concept of the Fund" in the Fund's prospectus, a current copy of which
accompanies this Prospectus.
The Fund currently consists of the following Portfolios: the Money
Market Portfolio and Class A shares of the Bond Portfolio, the Capital
Growth Portfolio, the Balanced Portfolio, the Growth and Income Portfolio,
the International Portfolio, and the Global Discovery Portfolio. The
Global Discovery Portfolio commenced operations on May 1, 1996. Each
Portfolio represents, in effect, a separate mutual fund with its own
distinct investment objectives and policies. The income or losses of one
Portfolio generally have no effect on the investment performance of any
other Portfolio.
The investment objectives and policies of the Portfolios available
under the Contract are summarized below:
Money Market Portfolio: This Portfolio seeks to maintain stability of
capital and, consistent therewith, to maintain liquidity of capital and to
provide current income. This Portfolio seeks to maintain a constant net
asset value of $1.00 per share. It will invest in money market securities
such as U.S. Treasury obligations, commercial paper, certificates of
deposit and bankers' acceptances of domestic and foreign banks, including
foreign branches of domestic banks, and will enter into repurchase
agreements.
Bond Portfolio: This Portfolio pursues a policy of investing for a
high level of income consistent with a high-quality portfolio of debt
securities. It primarily invests in U.S. Government, corporate, and other
notes and bonds.
Capital Growth Portfolio: This Portfolio seeks long-term capital
appreciation and, consistent therewith, current income through a broad and
flexible investment program. The Portfolio seeks to achieve these
objectives by investing primarily in income-producing, publicly traded
equity securities, including common stocks and securities convertible into
common stocks.
15
<PAGE>
Balanced Portfolio: This Portfolio seeks a balance of growth and
income from a diversified portfolio of equity and fixed income securities.
The Portfolio also seeks long-term preservation of capital through a
quality-oriented investment approach that is designed to reduce risk.
Growth and Income Portfolio: This Portfolio seeks long-term growth of
capital, current income and growth of income. It primarily invests in
common stocks, preferred stocks, and securities convertible into common
stocks of companies which offer the prospect for growth of earnings while
paying higher than average current dividends.
International Portfolio: This Portfolio seeks long-term growth of
capital primarily through diversified holdings of marketable foreign equity
investments. It invests in companies, wherever organized, which do
business primarily outside the United States. The Portfolio intends to
diversify investments among several countries and not to concentrate
investments in any particular industry.
Global Discovery Portfolio: This Portfolio seeks above-average capital
appreciation over the long term. It primarily invests in equity securities
of small companies located around the world.
There is no assurance that any Portfolio will achieve its stated
objective. More detailed information, including a description of risks
involved in investing in each of the Portfolios, is contained in the
prospectus for the Fund, a current copy of which accompanies this
Prospectus. Information contained in the Fund's prospectus should be read
carefully before investing in the Contract.
Scudder, Stevens & Clark, Inc. (the "Adviser"), an investment adviser
registered with the SEC under the Investment Advisers Act of 1940, manages
daily investments and business affairs of the Fund, subject to the policies
established by the Trustees of the Fund. For rendering advisory services
to the Portfolios, the Adviser receives compensation monthly at annual
rates equal to .370%, .475%, .475%, .475%, .475%, .875%, and .975% of the
average daily net asset values of the Money Market Portfolio, Bond
Portfolio, Capital Growth Portfolio, Balanced Portfolio, Growth and Income
Portfolio, International Portfolio, and the Global Discovery Portfolio,
respectively. For additional information, see the Fund's prospectus, a
current copy of which accompanies this Prospectus.
16
<PAGE>
Addition, Deletion, or Substitution of Investments
Subject to any applicable law, Intramerica retains the right to make
certain changes in the Variable Account and its investments. Intramerica
reserves the right to eliminate the shares of any Portfolio and to
substitute shares of another Portfolio of the Fund or of another registered
open-end management investment company, if the shares of the Portfolio are no
longer available for investment or if, in Intramerica's judgment, investment
in any Portfolio would be inappropriate in view of the purposes of the
Variable Account. To the extent required by the 1940 Act, substitutions or
eliminations of shares attributable to an Owner's interest in a Subaccount
will not be made without prior notice to the Owner and the prior approval
of the SEC. Nothing contained herein shall prevent the Variable Account
from purchasing other securities for other series or classes of variable
annuity contracts, or from effecting an exchange between series or classes
of variable annuity contracts on the basis of requests made by Owners.
New Subaccounts may be established when marketing, tax, investment or
other conditions warrant such additions. Any new Subaccounts may be made
available to existing Owners on a basis to be determined by Intramerica.
Each additional Subaccount will purchase shares in a Portfolio of the Fund
or in another mutual fund or investment vehicle. Intramerica may also
eliminate one or more Subaccounts if, in its sole discretion, marketing,
tax, investment or other conditions warrant such elimination. In the event
any Subaccount is eliminated, Intramerica will notify Owners and request a
reallocation of the amounts invested in the eliminated Subaccount. If the
Owner provides no such reallocation, Intramerica will reinvest the amounts
invested in the eliminated Subaccount in the Subaccount that invests in the
Money Market Portfolio (the "Money Market Subaccount").
In the event of any such substitution, change, or elimination,
Intramerica may, by appropriate endorsement, make such changes in the
Contract as may be necessary or appropriate to reflect such substitution,
change or elimination. Furthermore, if deemed to be in the best interests
of persons having voting rights under the Contract, the Variable Account
may be (i) operated as a management company under the 1940 Act or any
other form permitted by law, (ii) deregistered under the 1940 Act, in the
event such registration is no longer required or (iii) combined with one or
more other separate accounts. To the extent permitted by applicable law,
Intramerica also may transfer the assets of the Variable Account associated
with the Contract to another separate account.
The investment policy of the Variable Account will not be changed
unless the change has been approved by the Superintendent of Insurance of
the State of New York.
17
<PAGE>
T H E C O N T R A C T
The description of the Contract contained in this Prospectus is
qualified in its entirety by reference to the Contract for the Flexible
Premium Variable Deferred Annuity, a copy of which has been filed as an
exhibit to the Registration Statement for the Contract and which is
available upon request from Intramerica.
Contract Application and Issuance of the Contract
The Contract is available to certain retirement plans and individual
retirement accounts that qualify for special federal income tax treatment,
to individuals purchasing individual retirement annuities that qualify for
special federal income tax treatment and to individuals and entities that
do not qualify for such special tax treatment. The Contract is not
available for use as a "Tax-sheltered Annuity" qualifying under Section
403(b) of the Code. An Owner who purchases a Contract which qualifies as
an individual retirement annuity under Section 408(b) of the Code should be
aware that the Code requires that such a Contract contain certain
restrictive terms. See "CERTAIN FEDERAL INCOME TAX CONSEQUENCES -- Tax
Status of the Contract."
In order to comply with New York law, the Annuitant must be between
the ages of 1 and 80. Before it will issue a Contract, Intramerica must
receive a properly completed Contract application and a minimum initial
Payment of $2,500. (See "Initial Payment," below.) Upon request, a
Premium Receipt form will be mailed to the Owner. The Annuitant must be
named in the Contract application. In the case of a Contract qualifying as
an individual retirement annuity under Section 408(b) of the Code, the
Owner must be the Annuitant. See "CERTAIN FEDERAL INCOME TAX CONSEQUENCES
- -- Tax Status of the Contract." Acceptance of an application is subject to
Intramerica's sole discretion and Intramerica reserves the right to decline
an application for any reason. In the event an application is declined,
the initial Payment will be refunded in full.
After underwriting is completed and the Contract is delivered to the
Owner, the term of the Contract will be deemed to have commenced as of the
Effective Date. The Effective Date is a date within two business days
after a completed application and the full initial Payment are received by
Intramerica. The Contract Date will be the same as the Effective Date
unless the Effective Date is the 29th, 30th or 31st of the month, in which
case the Contract Date will be the 28th day of the same month. The
Contract Date is the date used to determine Contract Months, Contract Years
and Contract Anniversaries.
Examination Period
The Contract contains a provision for an Examination Period which
permits the Owner to cancel a Contract within thirty days after receipt of
such Contract. Upon return of the Contract in accordance with its terms,
18
<PAGE>
Intramerica will refund the initial Payment plus or minus any investment
experience on amounts allocated to the Subaccount(s) plus interest earned
on amounts allocated to the General Account. Intramerica will calculate
such refund as of the date the Contract is mailed to Intramerica. The
amount refunded may be more or less than the initial Payment, depending
upon the investment performance of the selected Subaccount(s). See "THE
CONTRACT --Payments," "THE CONTRACT -- Allocation of Net Payments," and
"THE CONTRACT -- Account Value."
Payments
Initial Payment. Currently, the minimum initial Payment needed to
purchase a Contract is $2,500. The Contract permits Intramerica, at its
sole discretion, to increase the minimum initial Payment to $5,000 at any
time. The initial Payment is the only Payment required to be made under
the Contract. At the time the initial Payment is made, a prospective Owner
must specify whether the purchase will be a Nonqualified or Qualified
Contract. If the initial Payment is derived from an exchange or surrender
of another annuity contract, Intramerica may require that the prospective
purchaser provide information with regard to the federal income tax status
of the previous annuity contract. Intramerica will require that persons
purchase separate Contracts if they desire to invest moneys qualifying for
different annuity tax treatment under the Code. Each such separate
Contract would require a minimum initial Payment of $2,500. The Company
reserves the right to waive the minimum initial Payment amount and accept
less than $2,500 at its discretion.
The initial Net Payment will be credited to the Contract within two
business days after receipt of the Payment if a properly completed Contract
application is received by Intramerica with such Payment, or within two
business days after a Contract application which was incomplete upon
receipt by Intramerica is made complete. If, for any reason, the initial
Net Payment is not credited to the prospective purchaser's Contract within
five business days after receipt by Intramerica because the application is
incomplete, the initial Net Payment will be returned immediately to the
prospective purchaser unless such prospective purchaser, after receiving
notice of the delay from Intramerica, specifically requests that the
Payment not be returned.
Additional Payments. While the Annuitant is living and prior to the
Maturity Date, the Owner may, subject to the limitations discussed below,
make additional Payments. Currently, there is no minimum additional
Payment amount nor is there a maximum number of additional Payments that
may be made per Contract Year. Under the Automatic Investment Plan, the
Owner is able to make regular investments in any of the variable
Subaccounts from a checking account ($50 minimum). The Automatic
Investment Plan cannot be used to invest in the General Account. Call
Intramerica at (800) 833-0194 for more information and an Automatic
Investment Plan application.
19
<PAGE>
The Contract gives Intramerica the right to require that each
additional Payment be at least $1,000 and to limit the frequency of
additional Payments to a maximum of four per Contract Year. Intramerica,
at its discretion, may require that additional Payments comply with the
limitations it is permitted to impose under the Contract. Any additional
Payments will be credited to the Contract upon receipt at Intramerica's
Home Office.
Additional Payments with respect to a Contract must qualify for the
same federal income tax treatment as the initial Payment made under the
Contract. Intramerica will not accept an additional Payment if the federal
income tax treatment of such Payment will be different from that of the
initial Payment.
Limitations on Payments. Intramerica reserves the right to reject any
Payment. Intramerica normally will require a prospective purchaser to
complete a financial questionnaire for Payments in excess of $250,000.
Intramerica also may reject any Payment or additional Payment that would
cause the total Payments made by the Owner to exceed $1,000,000. With
respect to a Contract that qualifies as an individual retirement annuity
under Section 408(b) of the Code, the total Payments (including the initial
Payment), with respect to any calendar year, may not exceed $2,000 unless
the portion of such Payments in excess of $2,000 qualifies as a rollover
amount or contribution under Section 402(a)(5) or 408(d)(3) or other
applicable provisions of the Code. See "CERTAIN FEDERAL INCOME TAX
CONSEQUENCES -- Tax Status of the Contract."
All checks or drafts should be made payable to Scudder Horizon Plan.
A Payment can also be made by requesting on the application that Scudder
Insurance Agency of New York, Inc. redeem shares in an existing Scudder
Fund Account and apply the proceeds towards a Contract.
Allocation of Net Payments
The Owner must allocate the Net Payments to one or more of the
Subaccounts, to the General Account or to any combination thereof. If any
portion of a Net Payment is allocated to the General Account, the Owner
must specify the Declaration Period to which the Net Payment is to be
allocated. See "THE GENERAL ACCOUNT." The Owner must indicate the initial
allocation in the Contract application. Upon receipt by Intramerica, the
Net Payment will be allocated as directed by the Owner. All allocations
must be made in whole percentages and must total 100%. If the allocations
do not total 100%, Intramerica will recompute the allocations
proportionately by dividing the percentage in each Subaccount selected, as
indicated on the application, by the sum of the percentages indicated.
This new percentage will be applied to the Net Payment. The following
example illustrates how this recomputation will be made:
20
<PAGE>
Example Indicated Actual
Allocation Allocation
Subaccount #1 25% 25% / 105% = 24%
Subaccount #2 40% 40% / 105% = 38%
Subaccount #3 40% 40% / 105% = 38%
Total 105% 100%
All Net Payments will be allocated at the time they are credited to the
Owner's Contract.
Additional Net Payments made directly by the Owner will be allocated
in the same proportion as the initial Net Payment unless Written Notice to
the contrary is received with such additional Net Payments. Once a change
in allocation is made, all future Net Payments will be allocated in
accordance with the new allocation unless contrary instructions are
received with such additional Net Payments. However, if the Owner has
funds deducted from a checking account and applied under the Automatic
Investment Plan option, the Owner must provide Intramerica with written
notice to change the allocation of future additional Net Payments.
Transfers
Subject to certain conditions and charges, amounts may be transferred
among the Subaccounts and from one or more of the Subaccounts to the
General Account at any time. Transfers also may be made between different
Declaration Periods in the General Account and from the General Account to
one or more of the Subaccounts, but only at the end of the applicable
Declaration Period(s). Transfer of amounts from a Subaccount to the
General Account may be made only if such transfer would not cause a
Contract's value in the General Account to exceed $250,000. See "THE
GENERAL ACCOUNT."
Currently, no charge is being imposed for any transfers among
Subaccounts or from the Subaccounts to the General Account. The Contract,
however, permits Intramerica to deduct $20 for the third and each
subsequent transfer request made during a Contract Year. Intramerica, at
its sole discretion, may impose the transfer charge at any time. For a
discussion of transfer charges, see "CHARGES AND DEDUCTIONS -- Transfer
Charges."
Transfer requests must be by Written Notice or by telephone if elected
by a currently valid telephone transfer request form on file with
Intramerica. Intramerica employs reasonable procedures to confirm that
instructions communicated by telephone are genuine and if it follows such
procedures it will not be liable for any losses due to unauthorized or
fraudulent instructions. Intramerica, however, may be liable for such
losses if it does not follow those reasonable procedures. The procedures
Intramerica follows for telephone
21
<PAGE>
transfers include confirming the correct name, contract number and personal
code for each telephone transfer. See "GENERAL PROVISIONS -- Written
Notices and Requests: Owner Inquiries." Transfers will be deemed
effective, and values in connection with transfers will be determined, as
of the end of the Valuation Period during which the transfer request is
received. However, Intramerica may be permitted to delay the effective
date of a transfer in certain circumstances. See "GENERAL PROVISIONS --
Deferment of Payment and Transfers."
Asset Rebalancing Option. In order to maintain a particular
percentage allocation among the Subaccounts, the Owner may select the asset
rebalancing option. With asset rebalancing, Intramerica automatically
reallocates the Account Value in the Subaccounts quarterly to the
allocation selected by the Owner. Over a period of time, this method of
investing may help an Owner buy low and sell high although there can be no
assurance of this. This investment method does not assure profits and does
not protect against loss in declining markets.
To elect the asset rebalancing option, the Account Value in the
Contract must be at least $2,500 and a completed Asset Rebalancing Option
form must be received at Intramerica's Home Office. The Owner must
designate the applicable Subaccounts and the percentage allocations for
each of the applicable Subaccounts to be rebalanced quarterly. If the
asset rebalancing option is elected, all amounts allocated to the variable
Subaccounts must be included in the asset rebalancing option. The Owner
may not participate in dollar cost averaging and asset rebalancing at the
same time. The General Account is not available for the asset rebalancing
option.
Selection of asset rebalancing will result in the transfer of funds to
one or more of the Subaccounts on the date specified by the Owner. If the
Owner has specified, or the form is received on the 29th, 30th or 31st,
Intramerica will consider the effective date to be the first Valuation Date
of the following month. If no date is specified or if the request is
received after the specified date, Intramerica will transfer funds on the
date of receipt of the Asset Rebalancing Option form and on the quarterly
anniversary of the applicable date thereafter. The amounts transferred
will receive the Unit Values for the affected Subaccounts at the end of the
Valuation Date on which the transfers occur. If the effective date is not
a Valuation Date, the transfer will occur on the next Valuation Date.
The Owner may terminate this option at any time by Written Notice. In
the event of a transfer by written request or telephone instructions, this
option will terminate automatically. In either event, the amounts in the
Subaccounts that have not been transferred will remain in those Subaccounts
regardless of the percentage allocation unless the Owner instructs
otherwise. If the Owner wishes to resume the asset rebalancing option
after it has been canceled, a new Asset Rebalancing Option form must be
completed and sent to Intramerica's Home Office. Intramerica may
discontinue, modify, or suspend the asset rebalancing option at any time.
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Dollar Cost Averaging. Dollar cost averaging is a systematic method
of investing in which units are purchased in fixed dollar amounts so that
the cost is averaged over time. The Owner may dollar cost average their
allocations in the Subaccounts under the Contract by authorizing
Intramerica to make periodic transfers from any one Subaccount to one or
more other Subaccounts. Amounts transferred will purchase units in those
Subaccounts at the Unit Value of that Subaccount as of the Valuation Date
the transfer occurs. Since the value of the units will vary, the amounts
transferred to a Subaccount will result in the purchase of a greater number
of units when the Unit Value is low and the purchase of a lesser number of
units when the Unit Value is high. Similarly, the amounts transferred to a
Subaccount will result in the liquidation of a greater number of units when
the Unit Value is low and the liquidation of a fewer number of units when
the Unit Value is high. Dollar cost averaging does not assure a profit and
does not protect against loss in declining markets.
To elect dollar cost averaging, the Account Value in the Contract must
be at least $2,500 and a completed Dollar Cost Averaging form must be
received at Intramerica's Home Office. The Owner must designate the
frequency and period of time of the transfers, the Subaccount from which
transfers are to be made and the Subaccounts and allocation percentages to
which funds are to be transferred. The Owner may not participate in dollar
cost averaging and asset rebalancing at the same time. The General Account
is not available for the dollar cost averaging option.
After Intramerica has received a completed Dollar Cost Averaging form,
Intramerica will transfer the amounts designated by the Owner from the
Subaccount from which transfers are to be made to the Subaccount or
Subaccounts chosen by the Owner. The minimum amount that may be
transferred is $50. Each transfer will occur on the date specified by the
Owner. If the Owner has specified, or the form is received on the 29th,
30th or 31st, Intramerica will consider the effective date to be the first
Valuation Date of the following month. If no date is specified, funds will
be transferred on the monthly, quarterly, semiannual or annual anniversary,
(whichever corresponds to the frequency selected by the Owner), of the date
of receipt of a completed Dollar Cost Averaging form. The amounts
transferred will receive the Unit Values for the affected Subaccounts at
the end of the Valuation Date on which the transfers occur. If the
anniversary is not a Valuation Date, the transfer will occur on the next
Valuation Date. Dollar cost averaging will terminate when the total amount
elected has been transferred, or when the value in the Subaccount from
which transfers are made is insufficient to transfer the requested amount.
The Owner may terminate this option at any time by Written Notice.
Upon receipt of Written Notice, the value in the Subaccount from which
transfers were being made will remain in that Subaccount unless the Owner
instructs otherwise. If the Owner wishes to continue transferring on a
dollar cost averaging basis after the expiration of the applicable period,
or the amount
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in the Subaccount elected is insufficient to transfer the total requested
amount, or after the dollar cost averaging option has been canceled, a new
Dollar Cost Averaging Option form must be completed and sent to
Intramerica's Home Office. Intramerica may discontinue, modify, or suspend
the dollar cost averaging option at any time.
Account Value
On the Effective Date, the Account Value equals the initial Net
Payment. Thereafter, the Account Value equals the Account Value from the
previous Valuation Date increased by: (i) any additional Net Payments
received by Intramerica, (ii) any increase in the Account Value due to
investment results of the selected Subaccount(s) and (iii) any interest
earned on that portion of the Account Value held in the General Account
during the Valuation Period; and reduced by: (i) any decrease in the
Account Value due to investment results of the selected Subaccount(s), (ii)
a daily charge to cover the mortality and expense risks assumed by
Intramerica and the cost of administering the Contract, (iii) any amounts
charged against the Account Value for records maintenance, (iv) amounts
deducted for partial surrenders, and (v) amounts deducted, if any, for
transfer charges with respect to transfers that occurred during the
Valuation Period. See "CHARGES AND DEDUCTIONS."
The Account Value is expected to change from Valuation Period to
Valuation Period, reflecting the investment experience of the selected
Subaccount(s), interest earned in the General Account and the deduction of
charges. The amount available for distribution of Annuity Payments is
equal to the Account Value on the Maturity Date; a Contract ceases to
accumulate value after the Maturity Date.
Unit Value. Each Subaccount has a distinct value (the "Unit Value").
In addition, because of differences in variable annuity contracts funded by
the Subaccounts, units in a Subaccount attributable to the Contract will
have different unit values than those attributable to other variable
annuity contracts funded by the Subaccount. When a Net Payment is
allocated or an amount is transferred to a Subaccount, a number of units
are purchased based on the Unit Value of the Subaccount as of the end of
the Valuation Period during which the allocation is made. When amounts are
transferred out of or deducted from a Subaccount, units are redeemed in a
similar manner.
For each Subaccount, the Unit Value on a given Valuation Date is based
on the net asset value of a share of the corresponding Portfolio in which
such Subaccount invests. (For the calculation of the net asset value with
respect to a Portfolio, see the prospectus for the Fund, a current copy of
which accompanies this Prospectus.) Each Valuation Period has a single
Unit Value which applies to each day in that period. The Unit Value for
each subsequent Valuation Period is the Investment Experience Factor
(described below) for that Valuation Period multiplied by the Unit Value
for the immediately preceding Valuation Period.
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Investment Experience Factor. The "Investment Experience Factor"
measures the investment performance of a Subaccount during a Valuation
Period. An Investment Experience Factor is calculated separately for each
of the Subaccounts. The Investment Experience Factor of a Subaccount for a
Valuation Period equals (a) divided by (b), minus (c), where:
(a) is (i) the value of the net assets of the Subaccount at the
end of the preceding Valuation Period, plus
(ii) the investment income and capital gains, realized or
unrealized, credited to the net assets of that Subaccount during the
Valuation Period for which the Investment Experience Factor is being
determined, minus
(iii) the capital losses, realized or unrealized, charged
against those assets during the Valuation Period, minus
(iv) any amount charged against the Subaccount for taxes or
any amount set aside during the Valuation Period by Intramerica as a
provision for taxes attributable to the operation or maintenance of that
Subaccount (see "CHARGES AND DEDUCTIONS -- Other Taxes"); and
(b) is the value of the net assets of that Subaccount at the end
of the preceding Valuation Period; and
(c) is a charge that compensates Intramerica for certain
administrative expenses and mortality and expense risks which are assumed
by Intramerica in connection with the Contract. See "CHARGES AND
DEDUCTIONS -- Mortality and Expense Risk Charge" and "CHARGES AND
DEDUCTIONS --Contract Administration Charge."
Contract Ownership
Subject to certain restrictions discussed below, an Owner may
designate a new Owner or Joint Owner at any time during the life of the
Annuitant. Under the terms of the Contract, if a Joint Owner is named,
unless otherwise specified by the Owner, Intramerica will presume the
ownership to be as joint tenants with right of survivorship. If any Owner
dies before the Annuitant and before the Maturity Date, the rights of the
Owner will belong to the Joint Owner, if any, otherwise to the Beneficiary.
The interest of any Owner or Joint Owner may be subject to the rights of
any assignee. See "THE CONTRACT -- Assignment of the Contract."
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A new Owner or a Joint Owner may not be designated with respect to a
Contract that qualifies as an individual retirement annuity under Section
408(b) of the Code. See "CERTAIN FEDERAL INCOME TAX CONSEQUENCES -- Tax
Status of the Contract." An Owner's designation of a new Owner may be
subject to federal income tax. See "CERTAIN FEDERAL INCOME TAX
CONSEQUENCES -- Taxation of Annuities."
An Owner may designate a new Owner by submitting Written Notice to
Intramerica. The change will take effect as of the date the Written Notice
was signed. Intramerica will not be liable for any payment made or other
action taken before the Written Notice was received and recorded by
Intramerica.
Assignment of the Contract
Except in the case of a Contract that qualifies as an individual
retirement annuity under Section 408(b) of the Code, an Owner may assign:
(i) all or a portion of his or her right to receive Annuity Payments under
the Contract or (ii) the Contract as collateral security. An assignment by
the Owner before the Maturity Date of any portion of the right to receive
Annuity Payments entitles the assignee to receive the assigned Annuity
Payments in a lump sum as of the Maturity Date. Such lump sum payment
generally will be made within seven days. An assignment by the Owner after
the Maturity Date of any portion of the right to receive Annuity Payments
entitles the assignee to receive the assigned Annuity Payments in
accordance with the Annuity Income Option in effect on the Maturity Date.
The assignee may not select an Annuity Income Option or change an existing
Annuity Income Option. See "THE CONTRACT --Contract Ownership."
In the case of a Qualified Contract, certain assignments permissible
under the Contract may adversely affect the qualification for special
federal income tax treatment of the underlying retirement plan or
individual retirement account. Potential purchasers of Qualified Contracts
are urged to consult their tax advisers.
If the right to receive Annuity Payments is assigned or the Contract
is assigned as collateral security, the Owner's rights and those of any
Beneficiary will be subject to such assignment. Intramerica is not
responsible for the adequacy of any assignment and will not be bound by the
assignment until satisfactory written evidence of the assignment has been
received. In certain circumstances, an assignment will be subject to
federal income tax. See "CERTAIN FEDERAL INCOME TAX CONSEQUENCES --
Taxation of Annuities."
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D I S T R I B U T I O N S U N D E R T H E C O N T R A C T
Any Annuity Payment, Account Value or Death Benefit available under
the Contract is not less than the minimum benefits required by any statute
of the State of New York.
Full and Partial Surrender Privileges
Subject to certain conditions, a full or partial surrender of the
Contract may be made at any time. No full or partial surrenders may be
made after the Maturity Date. The amount available for any surrender is
the Account Value.
No commission or sales charge is deducted from the Account Value upon
full or partial surrender of a Contract.
In addition to the conditions set forth above, the ability of an Owner
to effect a partial surrender of a Contract is subject to these further
conditions: (i) the minimum amount that can be withdrawn in a partial
surrender is $500 and (ii) the Contract must have an Account Value of at
least $2,500 after the surrender. (If Intramerica, at its sole discretion,
should increase the minimum initial payment to $5,000, Contracts issued
after that date will be required to have an Account Value of at least
$5,000 after a partial surrender.) In addition, a partial surrender
request must contain explicit instructions as to the withdrawal of amounts
from each of the selected Subaccounts. Funds allocated to the General
Account will be withdrawn proportionally from all Declaration Periods in
the General Account. Within each Declaration Period, surrenders will be on
a first-in, first-out basis.
The Owner may effect a partial surrender by sending a Written Notice
to Intramerica or by telephone if a currently valid telephone transfer
request form is on file with Intramerica. The Owner may effect a full
surrender only by sending a Written Notice to Intramerica. The Account
Value payable to the Owner upon a full or partial surrender will be
calculated at the price next computed after Intramerica receives a request
for surrender. Intramerica generally will pay the Owner any Account Value
owed in respect of a full or partial surrender within seven days of receipt
of the request for surrender. If, at the time an Owner makes a full or
partial surrender request, such Owner has not provided Intramerica with a
written election not to have federal income taxes withheld, Intramerica, by
law, must withhold such taxes from the taxable portion of any full or
partial surrender. In addition, the Code provides that a federal penalty
tax may be imposed on certain surrenders. See "CERTAIN FEDERAL INCOME TAX
CONSEQUENCES -- Taxation of Annuities."
Because the Owner assumes the entire investment risk for all amounts
allocated to the Variable Account, the total amount paid upon surrender of
the Contract (taking into account any prior withdrawals) may be more or
less than the total Payments made under the Contract. See "THE CONTRACT --
Account Value."
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Systematic Withdrawals. Intramerica currently offers an option under
which partial surrenders of the Contract may be elected by systematic
withdrawals. The Owner may elect to receive systematic withdrawals before
the Maturity Date by sending a completed Systematic Withdrawal form to
Intramerica at its Home Office. The completed form must include the
written consent of any assignee or irrevocable beneficiary, if applicable.
The Owner may designate the systematic withdrawal amount as a percentage of
the Account Value allocated to the Subaccounts and/or General Account, or
as a specified dollar amount. The Owner may designate that systematic
withdrawals be made monthly, quarterly, semiannually, or annually. If the
Owner has specified, or the form is received on the 29th, 30th or 31st,
Intramerica will consider the effective date to be the first Valuation Date
of the following month. If no date is specified, the systematic withdrawal
option will commence on the date of receipt of the form.
Each systematic withdrawal must be at least $250. The systematic
withdrawal option will terminate if the amount to be withdrawn exceeds the
Account Value or would cause the Account Value to be below $2,500. If any
portion of the systematic withdrawal is to be withdrawn from the General
Account, the amount requested will be deducted proportionately from each
Declaration Period, and will be on a first-in, first-out basis within the
Declaration Period(s).
Each systematic withdrawal will occur as of the end of the Valuation
Period during which the withdrawal is scheduled. The systematic withdrawal
will be deducted from the Owner's Account Value in the Subaccounts and/or
the General Account as directed by the Owner.
The Owner may terminate this option at any time by Written Notice. If
this option is terminated, either by Written Notice by the Owner, or if the
amount to be withdrawn has caused the Account Value to be below $2,500, and
the Owner wishes to resume systematic withdrawals, a new Systematic
Withdrawal form must be completed and sent to Intramerica's Home Office.
Intramerica may discontinue, modify, or suspend the systematic withdrawal
option at any time. The tax consequences of a systematic withdrawal,
including a 10% penalty tax imposed on withdrawals made prior to the Owner
attaining age 59 1/2 should be carefully considered. See "CERTAIN FEDERAL
INCOME TAX CONSEQUENCES -- Taxation of Annuities".
Annuity Payments
The Annuity Payments provided under this Contract on the Maturity Date
will not be less than that available using the Account Value to purchase
any single premium immediate annuity contract being offered by Intramerica
to the same class of annuitants. If the Annuitant is living on the
Maturity Date and the Contract is in force, Annuity Payments will be made
to the Owner in accordance with the terms of the Contract and the Annuity
Income Option selected by the Owner. The first Annuity Payment will be
made within seven days after the Maturity Date.
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The amount of the periodic Annuity Payments will depend upon (i) the
Account Value on the Maturity Date, (ii) the age and sex of the Annuitant
(or, in the case of Annuity Income Option 2, the age and sex of the
Annuitant and the Joint Annuitant) on the Maturity Date and (iii) the
Annuity Income Option selected. See "DISTRIBUTIONS UNDER THE CONTRACT --
Annuity Income Options." On the Maturity Date, the dollar amount of each
periodic Annuity Payment under an Annuity Income Option is fixed and will
not change. After the Maturity Date, the Contract will no longer
participate in the Variable Account because the Account Value is
transferred to the General Account on the Maturity Date. If, at the time
of an Annuity Payment, the Owner has not provided Intramerica with a
written election not to have federal income taxes withheld, Intramerica, by
law, must withhold such taxes from the taxable portion of such Annuity
Payment. In addition, the Code provides that a federal penalty tax may be
imposed on certain premature Annuity Payments. See "CERTAIN FEDERAL INCOME
TAX CONSEQUENCES -- Taxation of Annuities."
The amount of the monthly Annuity Payments under Annuity Income
Options 1, 2, and 3, described below, may be determined by dividing the
Account Value on the Maturity Date by 1,000 and multiplying the result by
the appropriate factor contained in the table for the Annuity Income Option
selected. The appropriate factor is based on a guaranteed minimum interest
rate of 3.5%. This factor will be determined at the time of maturity,
subject to current market conditions. The annuity tables for Annuity
Income Options 1, 2, and 3 are contained in the Contract. Information
concerning the amount of the periodic payments under additional Annuity
Income Options that become available, if any, will be provided to the Owner
prior to the Maturity Date. See "DISTRIBUTIONS UNDER THE CONTRACT --
Annuity Income Options."
Annuity Income Options
At any time prior to the Maturity Date, the Owner may designate the
Annuity Income Option under which Annuity Payments are to be made. If the
Owner does not select an Annuity Income Option by the Maturity Date, fixed
monthly Annuity Payments will be made to the Owner (i) for the life of the
Annuitant or (ii) until the sum of the monthly Annuity Payments made under
the Contract equals the Account Value on the Maturity Date, whichever is
longer (Annuity Income Option 1). Except with the consent of Intramerica,
Annuity Income Options are not available if the Account Value is less than
$2,000 or is insufficient to produce monthly payments of at least $20. In
such cases, Intramerica will pay the Account Value in a lump sum.
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Subject to the exceptions discussed above, three Annuity Income
Options are available under the Contract. Intramerica may offer additional
Annuity Income Options in the future which would become available to all
Contract Owners. Information concerning the availability of such
additional Annuity Income Options, if any, will be provided prior to the
time an Annuity Income Option is to be selected.
The following Annuity Income Options currently are available:
Option 1. Life Annuity with Installment Refund - Monthly Annuity
Payments will be made to the Owner (i) for the life of the Annuitant or
(ii) until the sum of the monthly Annuity Payments made equals the Account
Value on the Maturity Date, whichever is longer. If the Owner dies before
the sum of the monthly Annuity Payments made equals the Account Value on
the Maturity Date, the remaining Annuity Payments will be made to the
Beneficiary designated by the Owner. See "DISTRIBUTIONS UNDER THE CONTRACT
- -- Beneficiary Provisions."
Option 2. Joint and Survivor Life Annuity with Installment Refund -
Monthly Annuity Payments will be made to the Owner (i) for as long as
either the Annuitant or the Joint Annuitant is living or (ii) until the sum
of the monthly Annuity Payments made equals the Account Value on the
Maturity Date, whichever is longer. If all Owner(s) die before the sum of
the monthly Annuity Payments made equals the Account Value on the Maturity
Date, the remaining Annuity Payments will be made to the Beneficiary
designated by the Owner. See "DISTRIBUTIONS UNDER THE CONTRACT --
Beneficiary Provisions."
Option 3. Installments for Life - Monthly Annuity Payments will be
made to the Owner for as long as the Annuitant is living. Payments under
this option will end with the last payment made prior to the death of the
Annuitant. Under this option, it would be possible for the Owner to
receive only one Annuity Payment if the Annuitant died prior to the date of
the second payment, two Annuity Payments if he or she died prior to the
date of the third payment, etc.
At any time before the Maturity Date, the Owner may select Annuity
Income Option 1, 2 or 3 or may change a prior selection of an Annuity
Income Option by sending Written Notice to Intramerica. In addition, on
the Maturity Date, an Owner may elect to receive Annuity Payments under any
options made available by Intramerica in the future.
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Upon selection of Annuity Income Option 2, the Owner must designate a
Joint Annuitant. The life of the Joint Annuitant also will be used to
determine the duration of Annuity Payments. The amount of the monthly
Annuity Payments under Annuity Income Option 2 will be determined by the
age and sex of both the Annuitant and the Joint Annuitant. Prior to the
Maturity Date, the Owner may select a new Joint Annuitant at any time by
sending Written Notice to Intramerica. The Owner may not select a new
Joint Annuitant after the Maturity Date.
In the case of a Contract qualifying as an individual retirement
annuity under Section 408(b) of the Code, an Annuity Income Option may not
be selected with a Period Certain that will guarantee Annuity Payments
beyond the life (or life expectancy) of the Annuitant and the Beneficiary.
See "CERTAIN FEDERAL INCOME TAX CONSEQUENCES -- Tax Status of the
Contract."
Maturity Date
The Owner may specify in the Contract application the Contract
Anniversary on which Annuity Payments are to begin. The Maturity Date can
be no later than the Contract Anniversary nearest the Annuitant's 80th
birthday or the tenth Contract Anniversary. If no Maturity Date is
specified in the Contract application, the Maturity Date will be the later
of the Contract Anniversary nearest the Annuitant's 80th birthday or the
tenth Contract Anniversary.
In the case of a Qualified Contract, other than an individual
retirement annuity qualifying under Section 408(b) of the Code, selection
of certain Maturity Dates permissible under the Contract may adversely
affect the qualification of the underlying retirement plan for special
federal income tax treatment. Potential purchasers of such Qualified
Contracts are urged to consult their tax advisers.
In the case of a Contract qualifying as an individual retirement
annuity under Section 408(b) of the Code, the minimum required distribution
must be no later than April 1 of the calendar year following the calendar
year in which the Annuitant attains age 70-1/2. See "CERTAIN FEDERAL
INCOME TAX CONSEQUENCES -- Tax Status of the Contract."
Subject to the preceding discussion with respect to individual
retirement annuities, the Owner may advance or defer the Maturity Date at
any time while the Annuitant is living. The new Maturity Date chosen by
the Owner must be a Contract Anniversary not later than (i) the Contract
Anniversary nearest the Annuitant's 80th birthday; or (ii) ten years from
the upcoming Contract Anniversary, whichever is later. A Maturity Date may
be changed only by Written Notice to Intramerica prior to the then-
scheduled Maturity Date.
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Death Benefit
If the Annuitant dies prior to the Maturity Date, a Death Benefit will
be paid to the Owner as specified in the Contract. No Death Benefit is
payable if the Annuitant dies on or after the Maturity Date.
If the Annuitant dies prior to the Maturity Date, a Death Benefit
equal to the greater of (i) the Account Value or (ii) the sum of the
Payments made less the amount of any partial surrenders will be paid in a
lump sum to the Owner. If the Owner is a natural person, the Owner may
elect to continue the Contract and become the Annuitant if the deceased
Annuitant was not the Owner. The amount of the Death Benefit will be
calculated at the price next computed after Intramerica receives Proof of
Death of the Annuitant. The Death Benefit will be paid to the Owner within
seven days after Intramerica receives Proof of Death, or as soon thereafter
as Intramerica has sufficient information to make the payment.
Beneficiary Provisions
The Beneficiary will receive any amounts payable under the Contract if
the Beneficiary survives the Owner(s). If no Beneficiary is specified, or
if no Beneficiary survives the Owner by thirty days, the estate of the
Owner will receive any remaining amounts payable under the Contract.
While the Annuitant is living, the Owner may change the Beneficiary by
sending Written Notice to Intramerica. The change will take effect as of
the date the Written Notice was signed. Intramerica will not be liable for
any payment made or other action taken before the notice is received and
recorded by Intramerica. A Beneficiary named irrevocably may not be
changed without written consent of such Beneficiary. The interest of any
Beneficiary is subject to the rights of any assignee. See "THE CONTRACT --
Assignment of the Contract."
Death of Owner
In the case of a Nonqualified Contract in which the Owner or any Joint
Owner (i) is a natural person, (ii) is not the Annuitant and (iii) dies
before the Maturity Date and prior to the Annuitant's death, the Death
Benefit provisions described above do not apply. The Account Value will be
paid in a lump sum no later than five years following the date of the
Owner's death to the Joint Owner, if applicable; otherwise to the
Beneficiary. See "THE CONTRACT -- Contract Ownership." The Account Value
will be calculated at the price next computed after Intramerica receives
Proof of Death of the Owner. If the Joint Owner, if applicable, or the
Beneficiary is the surviving spouse of the Owner, he or she may elect to
continue the Contract as if he or she were the original Owner.
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Employment-Related Benefit Plans
In 1983, the Supreme Court held in Arizona Governing Committee v.
Norris that optional annuity payments provided under an employer's deferred
compensation plan could not, under Title VII of the Civil Rights Act of
1964, vary between men and women on the basis of sex. The Contract
described in this Prospectus contains Annuity Payment rates for certain
Annuity Income Options that distinguish between men and women.
Accordingly, employers and employee organizations should consider, in
consultation with legal counsel, the impact of Norris, and Title VII
generally, on any employment-related insurance or benefit program for which
a Contract may be purchased.
C H A R G E S A N D D E D U C T I O N S
No commissions or sales charges are deducted from Payments invested in
the Contract or from amounts payable to the Owner upon full or partial
surrender of the Contract. As more fully described below, certain charges
and deductions will be made in connection with the Contract to compensate
Intramerica for (i) providing the Annuity Payments, (ii) assuming certain
risks in connection with the Contract, and (iii) administering the
Contract.
Mortality and Expense Risk Charge
Intramerica deducts a daily charge from the Account Value for certain
mortality and expense risks connected with the Contract. A daily rate of
.0010997% of the value of net assets in each Subaccount is charged
currently. This corresponds to an annual rate of .40%. Of this amount,
approximately .30% is charged to cover mortality risks and approximately
.10% is charged to cover expense risks assumed by Intramerica in connection
with the Contract. Intramerica reserves the right at any time to increase
the Mortality and Expense Risk Charge to .70%, which corresponds to a daily
rate of .0019245%, the maximum set forth in the Contract. The Mortality
and Expense Risk Charge is applicable only during the period from the
Effective Date to the Maturity Date and is not imposed against the General
Account. This charge is reflected in the Investment Experience Factor for
the Contract for each Subaccount.
The Account Value and Annuity Payments are not affected by changes in
actual mortality experience or by actual expenses incurred by Intramerica.
The mortality risks assumed by Intramerica arise from the contractual
obligations to pay Death Benefits prior to the Maturity Date and to make
Annuity Payments for the entire life of the Annuitant (or, in the case of
Annuity Income Option 2, the entire life of the Annuitant and the Joint
Annuitant). Thus, an Owner is assured that neither the Annuitant's
longevity
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(or, in the case of Annuity Income Option 2, the Annuitant's and the Joint
Annuitant's longevity) nor an improvement in life expectancy in general
which is greater than expected, will have an adverse effect on the Annuity
Payments; this eliminates the risk of outliving the funds accumulated for
retirement in instances in which the Contract is purchased to provide funds
for retirement.
With respect to expense risks, Intramerica assumes the risk that the
actual expenses involved in administering the Contract, including Contract
maintenance costs, administrative costs, mailing costs, data processing
costs and costs of other services, may exceed the amount recovered from any
administrative charges.
Contract Administration Charge
Intramerica has primary responsibility for the administration of the
Contract and the Variable Account. Administrative expenses for Intramerica
include expenses with respect to (i) processing applications, Contract
changes, tax reporting, cash surrenders, death claims and initial and
subsequent Payments; (ii) annual and semiannual reports to Owners and
regulatory compliance reports; and (iii) overhead costs. Intramerica
deducts a daily charge from the Account Value for incurring administrative
expenses connected with the Contract and the Variable Account. A daily
rate of .0008248% of the value of net assets in each Subaccount is charged;
this corresponds to an annual rate of .30%. The Contract Administration
Charge is applicable only during the period from the Effective Date to the
Maturity Date and is not imposed against the General Account. This charge
is reflected in the Investment Experience Factor for the Contract for each
Subaccount.
Records Maintenance Charge
Currently, no charge is being imposed for records maintenance. The
Contract, however, permits Intramerica to deduct a Records Maintenance
Charge of up to $40 from the Account Value of each Contract at the end of
each Contract Year to reflect the cost of performing records maintenance
for the Contracts. If such a charge were imposed, it would be deducted
proportionately from each Subaccount and each of the Declaration Period(s)
in the General Account (on a first-in, first-out basis within each
Declaration Period) in which the Owner has funds allocated. The Records
Maintenance Charge, if deducted, would apply only during the period from
the Effective Date to the Maturity Date and would not be assessed if the
Owner surrendered the Contract during a Contract Year.
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Premium Taxes
Under New York law, no premium tax is currently payable by
Intramerica; however, the Contract permits Intramerica to deduct any
applicable premium taxes with respect to any future Payments.
Other Taxes
No charges currently are made against the Variable Account for
federal, state or local taxes. Should Intramerica determine that any such
taxes may be imposed with respect to the Variable Account, Intramerica may
deduct such taxes from amounts held in the Variable Account. See "CERTAIN
FEDERAL INCOME TAX CONSEQUENCES --Taxation of Intramerica."
Transfer Charges
Currently, no charge is being imposed for transfers among Subaccounts
or from the Subaccounts to the General Account. The Contract, however,
permits Intramerica to deduct $20 for the third and each subsequent
transfer request made by the Owner during a Contract Year. For the purpose
of determining whether a transfer charge is payable, initial allocations of
Payments are not considered transfers nor are reallocations of amounts
among Declaration Periods in the General Account or transfers from the
General Account to the Subaccounts at the end of a Declaration Period. All
transfer requests made at the same time will be treated as one request. No
transfer charges will be imposed for transfers which are not at the Owner's
request. Intramerica, at its sole discretion, may impose the transfer
charge described above for the third and each subsequent transfer request
at any time. See "THE CONTRACT -- Transfers."
Charges Against the Fund
Scudder, Stevens & Clark, Inc. provides investment advisory services
to the Fund for the Portfolios under the investment advisory agreement
between the Fund, on behalf of the Portfolios, and the Adviser, for a fee.
The Fund is responsible for all of its other expenses. The net assets of
the Fund attributable to the Variable Account will reflect deductions in
connection with the investment advisory fee and other expenses incurred by
the Fund. The investment advisory fees differ with respect to each of the
Portfolios. See "SCUDDER VARIABLE LIFE INVESTMENT FUND." For more
information concerning the investment advisory fee and other charges
against the Portfolios, see the prospectus for the Fund, a current copy of
which accompanies this Prospectus.
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C E R T A I N F E D E R A L I N C O M E
T A X C O N S E Q U E N C E S
The following summary is a general discussion of certain of the
expected federal income tax consequences of investment in and distributions
with respect to the Contract, based on the Code, proposed and final
Treasury Regulations thereunder, judicial authority, and current
administrative rulings and practice. This summary discusses only certain
federal income tax consequences to "United States Persons," and does not
discuss state, local or foreign tax consequences. "United States Persons"
means citizens or residents of the United States, domestic corporations,
domestic partnerships, and trusts or estates that are subject to United
States federal income tax regardless of the source of their income. This
summary does not discuss the consequences of an exchange of another annuity
contract for the Contract or a surrender of another annuity contract to
provide funds for investment in the Contract. Additional information
regarding such exchanges or surrenders is contained in the Statement of
Additional Information, which is available at no cost to any person
requesting a copy by writing to Intramerica or by calling (800) 833-0194.
The Qualified Contract was designed for use by retirement plans and
individual retirement accounts that qualify for special federal income tax
treatment under Section 401(a) or 408(a) of the Code and by individuals
purchasing individual retirement annuities that qualify for special federal
income tax treatment under Section 408(b) of the Code. Certain
requirements must be satisfied in purchasing a Qualified Contract for the
plan, account or annuity to retain its special tax treatment. This summary
does not discuss such requirements, and assumes that Qualified Contracts
are purchased pursuant to retirement plans or individual retirement
accounts or are individual retirement annuities that qualify for such
special tax treatment. Additionally, because any distribution with respect
to a Qualified Contract, other than an individual retirement annuity
qualifying under Section 408(b) of the Code, will be made to an entity that
is exempt from federal income tax, this summary does not discuss the
annuity consequences with respect to Qualified Contracts other than such
individual retirement annuities.
THE DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL PURPOSES ONLY.
EACH POTENTIAL PURCHASER IS URGED TO CONSULT HIS OR HER OWN TAX ADVISER AS
TO THE CONSEQUENCES OF INVESTMENT IN A CONTRACT UNDER FEDERAL AND
APPLICABLE STATE, LOCAL AND FOREIGN TAX LAWS BEFORE MAKING ANY PAYMENT.
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Tax Status of the Contract
Section 817(h) of the Code provides that in order for a variable
contract which is based on a segregated asset account to qualify as an
annuity contract under the Code, the investments made by such account must
be "adequately diversified" in accordance with Treasury regulations. The
Treasury regulations issued under Section 817(h) apply a diversification
formula to each of the Subaccounts. The Variable Account, through the Fund
and its Portfolios, intends to comply with the diversification requirements
of the Treasury regulations. Intramerica and the Fund have entered into
agreements regarding participation in the Fund that require the Fund and
its Portfolios to be operated in compliance with the Treasury regulations.
In certain circumstances, owners of variable annuity contracts may be
considered the owners, for federal income tax purposes, of the assets of
the separate accounts used to support their contracts. In those
circumstances, income and gains from the separate account assets would be
includible in the variable contract owner's gross income. The IRS has
stated in published rulings that a variable contract owner will be
considered the owner of separate account assets if the contract owner
possesses incidents of ownership in those assets, such as the ability to
exercise investment control over the assets. The Treasury Department has
also announced, in connection with the issuance of regulations concerning
diversification, that those regulations "do not provide guidance concerning
the circumstances in which investor control of the investments of a
segregated asset account may cause the investor (i.e., the Policyowner),
rather than the insurance company, to be treated as the owner of the assets
in the account." This announcement also stated that guidance would be
issued by way of regulations or rulings on the "extent to which
policyholders may direct their investments to particular subaccounts
without being treated as owners of the underlying assets."
The ownership rights under the Contract are similar to, but different
in certain respects from, those described by the IRS in rulings in which it
was determined that policyowners were not owners of separate account
assets. For example, the Owner has additional flexibility in allocating
premium payments and contract values. These differences could result in an
Owner being treated as the owner of a pro rata portion of the assets of the
Variable Account. In addition, Intramerica does not know what standards
will be set forth, if any, in the regulations or rulings which the Treasury
Department has stated it expects to issue. Intramerica therefore reserves
the right to modify the Contract as necessary to attempt to prevent an
Owner from being considered the owner of a pro rata share of the assets of
the Variable Account.
The Code also requires that Nonqualified Contracts contain specific
provisions for distribution of Contract proceeds upon the death of an
Owner. In order to be treated as an annuity contract for federal income tax
purposes, the Code requires that such contracts provide that (a) if any
Owner dies on or after
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the Maturity Date and before the entire interest in the Contract has been
distributed, the remaining portion must be distributed at least as rapidly
as under the method in effect on the Owner's death, or (b) if any Owner
dies before the Maturity Date, the entire interest in the Contract must
generally be distributed within five years after the Owner's date of death.
These requirements will be considered satisfied if the entire interest
in the Contract is used to purchase an immediate annuity under which
payments will begin within one year of the Owner's death and will be made
for the life of the "designated beneficiary" or for a period not extending
beyond the life expectancy of the "designated beneficiary." Under Section
72(s) the designated beneficiary is the person to whom ownership of the
Contract passes by reason of death and must be a natural person in order to
take advantage of the exceptions noted. If the designated beneficiary is
the Owner's surviving spouse and the Owner dies before the Maturity Date,
the Contract may be continued with the surviving spouse as the new Owner.
The Nonqualified Contracts contain provisions intended to comply with these
requirements of the Code. No regulations interpreting these requirements
of the Code have yet been issued and thus no assurance can be given that
the provisions contained in the Contract satisfy all such Code
requirements. The provisions contained in the Nonqualified Contracts will
be reviewed and modified if necessary to assure that they comply with the
Code requirements when clarified by regulation or otherwise. Similar rules
apply to Qualified Contracts. See "DISTRIBUTIONS UNDER THE CONTRACT --
Death of Owner."
Other rules may apply to Qualified Contracts.
Natural Persons. With respect to Owners who are natural persons, the
Contract should be treated as an annuity contract for federal income tax
purposes, the taxation of which is described below. See "CERTAIN FEDERAL
INCOME TAX CONSEQUENCES -- Taxation of Annuities."
Non-natural Persons. Pursuant to Section 72(u) of the Code, an
annuity contract held by a taxpayer other than a natural person generally
will not be treated as an annuity contract under the Code. Accordingly, an
Owner who is not a natural person will recognize as ordinary income for a
taxable year the excess of (i) the sum of the Account Value as of the close
of the taxable year and all distributions under the Contract paid in the
taxable year and previous taxable years over (ii) the sum of the Payments
made for the taxable year and any prior taxable year and the amounts
includable in gross income for any prior taxable year with respect to the
Contract. Section 72(u) of the Code does not apply to (i) a Contract in
which the nominal Owner is not a natural person but the beneficial Owner is
a natural person, (ii) a Qualified Contract or (iii) a single-payment
annuity, the Maturity Date of which is no later than one year from the date
of the single Payment and provides for a series of substantially equal
periodic payments during the annuity period. Instead, such Contracts are
taxed as described below under the heading "Taxation of Annuities."
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Individual Retirement Annuities. In order to qualify as an individual
retirement annuity under Section 408(b) of the Code, a Contract must
contain certain provisions, including the following: (i) the Owner must be
the Annuitant; (ii) the Contract may not be transferable by the Owner,
e.g., the Owner may not designate a new Owner or assign the Contract as
collateral security; (iii) the total Payments for any Contract Year may not
exceed $2,000, unless the portion of such Payments in excess of $2,000
qualifies as a rollover amount or contribution under Section 402(a)(5) or
408(d)(3) of the Code; (iv) Annuity Payments must begin no later than April
1 of the calendar year following the calendar year in which the Annuitant
attains age 70-1/2 and meet certain other requirements; (v) an Annuity
Income Option with a Period Certain that will guarantee Annuity Payments
beyond the life expectancy of the Annuitant and the Beneficiary may not be
selected; and (vi) certain payments of Death Benefits must be made in the
event the Annuitant dies prior to the distribution of the Account Value.
Contracts intended to qualify as individual retirement annuities under
Section 408(b) of the Code contain such provisions.
Other Qualified Contracts. A Contract may be purchased by a trust or
custodial account that forms a retirement plan qualified under Section
401(a) of the Code or an individual retirement account qualified under
Section 408(a) of the Code. The contributions and benefits in respect of a
participant in such a plan or account will be determined by the terms and
conditions of the plan or account, rather than the Contract. Intramerica
shall be under no obligation either (i) to determine whether any payment,
distribution or other transaction under the Contract complies with the
provisions, terms and conditions of such plan or account or of applicable
law or (ii) to administer such plan or account, including without
limitation any provisions required by the Retirement Equity Act of 1984.
The Contract is intended for use by such plans and accounts solely for the
accumulation of retirement savings. Adverse tax consequences to the plan
or account, the participant or both may result if this Contract is
transferred or assigned by the plan or account to any individual as a means
to provide benefit payments. A qualified tax adviser should be consulted
with respect to the use of the Contract in connection with such a plan or
account.
Taxation of Annuities
The discussion below applies only to those Contracts that qualify as
annuity contracts for federal income tax purposes.
In General. An Owner of a Contract should not be taxed on increases
in the Account Value until distribution occurs either in the form of
amounts received in partial or full surrender or as Annuity Payments under
the Annuity Income Option selected. For this purpose, the assignment,
pledge, or agreement to assign or pledge any portion of the Account Value
(including
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assignment prior to the Maturity Date of an Owner's right to receive
Annuity Payments) generally will be treated as a distribution in the amount
of such portion of the Account Value. Any such deemed distribution
generally will be taxable in an amount equal to the excess (if any) of the
Account Value immediately before the distribution is deemed to occur over
the Investment in the Contract at such time. The taxable portion of any
such distribution generally will be taxed as ordinary income.
Additionally, when an Owner designates a new Owner prior to the Maturity
Date without receiving full and adequate consideration, the old Owner
generally will be treated as receiving a distribution under the Contract in
an amount equal to the excess (if any) of the Account Value at the time of
such designation over the Investment in the Contract at such time.
"Investment in the Contract" means (i) the aggregate amount of any Payments
made by or on behalf of the recipient or deemed recipient minus (ii) the
aggregate amount received under the Contract which was excluded from the
gross income of the recipient or deemed recipient (except that the amount
of any loan from, or secured by a Contract will be disregarded to the
extent that such amount is excluded from gross income) plus (iii) the
amount of any loan from, or secured by a Contract to the extent that such
amount is included in the gross income of the Owner. Additionally, the
assignment prior to the Maturity Date of an Owner's right to receive
Annuity Payments without full and adequate consideration generally will be
treated as a distribution under the Contract in an amount equal to the
excess of the Account Value at the time of such assignment over the
Investment in the Contract at such time; any such deemed distribution will
be taxable in full.
Surrenders. In the case of a partial surrender under a Nonqualified
Contract, the amount received generally will be taxable in an amount equal
to the excess (if any) of the Account Value immediately before the
surrender over the Investment in the Contract at such time. In the case of
a partial surrender under a Qualified Contract, generally a portion of the
amount received, based on the ratio of the Investment in the Contract to
the Account Value, will be includable in the recipient's taxable income.
In the case of a full surrender under a Nonqualified or Qualified Contract,
the amount received generally will be taxable only to the extent it exceeds
the Investment in the Contract. In the case of a Qualified Contract (i)
the Investment in the Contract may be zero and (ii) certain surrenders will
not be taxed if they qualify under Section 402(a) or 408(d)(3) of the Code
as rollover contributions to certain retirement plans and individual
retirement arrangements.
Annuity Payments. Generally, a portion of each of the Annuity
Payments will be includable in the taxable income of the recipient. There
is, in general, no tax on the portion of each Annuity Payment that bears
the same ratio to the amount of such Annuity Payment as the Investment in
the Contract bears to the total expected value of the Annuity Payments for
the term of the
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payments; the remainder of each Annuity Payment is taxable. Once the
aggregate amount received under the Contract on or after the Maturity Date
that was excluded from gross income equals the Investment in the Contract
as of the Maturity Date, any additional Annuity Payments will be included
in gross income in their entirety. If, after the Maturity Date, Annuity
Payments cease by reason of the death of the Annuitant, the excess (if any)
of the Investment in the Contract as of the Maturity Date over the
aggregate amount of Annuity Payments received on or after the Maturity Date
that was excluded from gross income is allowable as a deduction for the
last taxable year of the Annuitant.
Penalty Taxes. In the case of a deemed distribution under a
Nonqualified Contract resulting from a pledge, assignment or agreement to
pledge or assign, a surrender of a Nonqualified Contract, or an Annuity
Payment with respect to a Nonqualified Contract, a federal penalty tax may
be imposed on the taxpayer equal to 10% of the amount of the distribution
(or deemed distribution) that is includable in gross income. The penalty
tax generally will not apply to any distribution (i) made on or after the
date on which the taxpayer attains age 59-1/2; (ii) made as a result of the
death of the Owner; (iii) attributable to the disability of the taxpayer;
or (iv) which is part of a series of substantially equal periodic payments
made (not less frequently than annually) for the life (or life expectancy)
of the taxpayer or the joint lives (or joint life expectancies) of such
taxpayer and his or her beneficiary. Similar penalties apply to Qualified
Contracts. In addition, if a minimum distribution is required under a
Qualified Contract as a result of the Annuitant's death or attainment of
age 70-1/2, a 50% excise tax will apply to the portion of any such required
minimum distribution that is not actually distributed. In the case of
Qualified Contracts, penalty taxes or other adverse tax consequences may
result if excess contributions are made, if an annual distribution from the
individual retirement annuity and certain other retirement arrangements
exceed specified amounts, or in certain other circumstances.
Transfer of Ownership. A transfer of ownership of a Contract or
Assignment of a Contract may result in certain tax consequences to the
Owner that are not discussed herein. An Owner contemplating any such
transfer or assignment of a Contract should contact a competent tax adviser
with respect to the potential tax effects of such a transaction.
Withholding. The portion of any distribution under a Contract that is
includable in gross income will be subject to federal income tax
withholding unless the recipient of such distribution elects not to have
federal income tax withheld. Election forms will be provided at the time
distributions are requested or made. Effective January 1, 1993, certain
distributions from retirement plans qualified under Section 401(a) of the
Code are subject to mandatory withholding.
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Multiple Contracts. All Nonqualified deferred annuity contracts that
are issued by Intramerica (or its affiliates) to the same Contract Owner
during any calendar year will be treated as one annuity contract for
purposes of determining the amount includable in gross income under Section
72(e) of the Code. The Treasury Department has specific authority to issue
regulations that prevent the avoidance of Section 72(e) through the serial
purchase of annuity contracts or otherwise. There also may be other
situations in which the Treasury may conclude that it would be appropriate
to aggregate two or more annuity contracts purchased by the same Owner.
Accordingly, an Owner should consult a competent tax adviser before
purchasing more than one annuity contract.
Taxation of Death Benefit Proceeds. Amounts may be distributed from a
Contract because of the death of the Owner or the Annuitant. Generally,
such amounts are includable in the income of the recipient as follows: (i)
if distributed in a lump sum, they are taxed in the same manner as a full
surrender of the Contract, as described above, or (ii) if distributed under
an Annuity Option, they are taxed in the same manner as Annuity Payments,
as described above. For these purposes, the investment in the Contract is
not affected by the Owner's or Annuitant's death. That is, the investment
in the contract remains the amount of any purchase payments paid which were
not excluded from gross income.
Tax Legislation. In past years, legislation has been proposed in the
U.S. Congress which would have adversely modified the federal taxation of
certain annuities. For example, one such proposal would have adversely
affected annuities that do not have "substantial life contingencies" by
taxing income as it is credited to the annuity. Although Congress is not
now actively considering any legislation regarding the taxation of
annuities, there is no way of knowing if legislation affecting the taxation
of annuities will, at some time, be enacted, or the extent to which any
change in the taxation of annuities would be retroactive in effect (i.e.,
effective prior to the date of enactment).
Taxation of Intramerica
At the present time, Intramerica makes no charge to the Variable
Account for any federal, state or local taxes that it incurs which may be
attributable to such Account or to the Contract. Intramerica, however,
reserves the right in the future to make a charge for any such tax or other
economic burden resulting from the application of the tax laws that it
determines to be properly attributable to the Variable Account or to the
Contract.
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G E N E R A L P R O V I S I O N S
The Contract
The Contract, any endorsements and amendments thereon and the Contract
application constitute the entire contract between Intramerica and the
Owner. Only the President, a Vice President or the Secretary of
Intramerica is authorized to change or waive the terms of a Contract. Any
change or waiver must be in writing and signed by one of those persons.
Deferment of Payment and Transfers
Payment of any amount due from the Variable Account with respect to a
surrender, Death Benefit or the death of the Owner of a Nonqualified
Contract generally will occur within seven days from the date the Written
Notice is received, except that Intramerica may be permitted to defer such
payment if: (i) the New York Stock Exchange is closed for other than usual
weekends or holidays or trading on the Exchange is otherwise restricted;
(ii) an emergency exists as defined by the SEC or the SEC requires that
trading be restricted; or (iii) the SEC permits a delay for the protection
of Owners. Transfers also may be deferred under these circumstances.
Payment of any Account Value from amounts allocated to the General
Account may be deferred for a period of six months after Written Notice is
received by Intramerica.
Any Payment which is derived, all or in part, from any amount paid to
Intramerica by check or draft may be postponed until such time as
Intramerica determines that such instrument has been honored.
Contract Expiration
The Contract will expire and be of no effect if the Account Value
becomes insufficient to cover deductions for the Mortality and Expense Risk
Charge, the Contract Administration Charge, a Records Maintenance Charge if
imposed, and any transfer charges.
Misstatement of Age or Sex
If the Annuitant's age or sex (and/or the Joint Annuitant's age or
sex, if Annuity Income Option 2 is selected) has been misstated on the
application, Intramerica will recalculate the Annuity Payments to reflect
the calculations that would have been made had the Annuitant's age and sex
(and/or the Joint
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Annuitant's age and sex, if Annuity Income Option 2 is selected) been
correctly stated. If Intramerica underpays or overpays the Annuity Benefit
because of a misstatement, the amount thereof with interest at 6% per year
will be added to or subtracted from the current or next succeeding payment.
Nonparticipating Contract
The Contract does not participate in the divisible surplus of
Intramerica. No dividends are payable on the Contract.
Written Notices and Requests: Owner Inquiries
Any Written Notice or Written Request required to be sent to
Intramerica should be sent to 9 Ramland Road, Orangeburg, New York 10962.
Any notice or request must be on the required form provided by Intramerica
and contain such information as Intramerica requires to process such notice
or request, including the Contract number and the Owner's full name and
signature. Any notice sent by Intramerica to an Owner will be sent to the
address shown in the application unless a Written Notice of an address
change has been filed with Intramerica. All Owner inquiries should be
addressed to Intramerica at its Home Office or made by calling (800) 833-
0194.
Records and Reports
Intramerica will maintain all records relating to the Variable
Account. At the end of each calendar quarter, Intramerica will send
Owners, at their last known address of record, statements itemizing the
Account Value, additional Payments, transfers, any charges, and any partial
surrenders made during the year. Owners will also be sent annual and
semiannual reports for the Fund which will include a list of the securities
in each Portfolio as of the current date of the report to the extent
required by the 1940 Act.
D I S T R I B U T I O N O F T H E C O N T R A C T
The principal underwriter of the Contract is CNL. CNL is registered
with the SEC as a broker-dealer under the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and is a member of the National Association of
Securities Dealers, Inc. The principal address of CNL is 8301 Maryland
Avenue, St. Louis, Missouri 63105.
For its services as Principal Underwriter, Intramerica pays a .50%
commission, as a percentage of Payments, to CNL. Intramerica paid
commissions of $17,844, $19,288 and $37,970 to CNL on the sale of the
Contracts in 1996, 1995 and 1994, respectively.
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CNL has contracted with Scudder Insurance Agency of New York, Inc.
("Scudder") for Scudder's services in connection with the distribution of
the Contract. Scudder is a subsidiary of Scudder Fund Distributors, Inc.,
which is registered with the SEC as a broker-dealer under the 1934 Act and
is a member of the National Association of Securities Dealers, Inc.
Individuals directly involved in the sale of the Contract are registered
representatives of Scudder and licensed insurance agents. The principal
address of Scudder is 345 Park Avenue, New York, New York 10154.
The Contract will be offered to the public on a continuous basis and
neither CNL nor Scudder anticipates discontinuing the offering of the
Contract. However, both CNL and Scudder reserve the right to discontinue
the offering at any time.
T H E G E N E R A L A C C O U N T
Payments allocated or amounts transferred to the General Account under
the Contract become part of the General Account assets of Intramerica,
which support annuity and insurance obligations. The General Account
includes all of Intramerica's assets, except those assets segregated in
separate accounts. Intramerica has sole discretion to invest the assets of
the General Account, subject to applicable law. Because of exemptive and
exclusionary provisions, interests in the General Account have not been
registered under the Securities Act of 1933 (the "1933 Act"), nor is the
General Account registered as an investment company under the 1940 Act.
Accordingly, neither the General Account nor any interests therein are
subject to the provisions of such statutes, and, as a result, the staff of
the SEC has not reviewed the disclosures in this Prospectus relating to the
General Account. However, disclosures about the General Account may be
subject to certain generally applicable provisions of the federal
securities laws relating to the accuracy and completeness of statements
made in prospectuses.
Intramerica guarantees that it will credit interest at an effective
annual rate of at least 3.5%, compounded monthly. Intramerica may, at its
sole discretion, declare higher interest rates for amounts allocated or
transferred to the General Account ("Declared Rates"). Each such Declared
Rate will be fixed and guaranteed by Intramerica and applied to a specific
period of time, which will not be less than one year or more than five
years (the "Declaration Period"). An Owner must specify one or more of the
Declaration Periods currently offered by Intramerica when allocating or
transferring funds to or within the General Account. At any one time, an
Owner may have amounts earning different Declared Rates within a
Declaration Period because amounts were allocated or transferred to that
Declaration Period at different times. Intramerica will not accept
allocations to the General Account which would increase a Contract's value
in the General Account to over $250,000. Subject
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to deductions for any applicable charges, Intramerica guarantees that the
value held in the General Account will equal all amounts allocated or
transferred to the General Account, plus any interest credited thereto,
less any amounts surrendered or transferred from the General Account. An
Owner is not entitled to share in the investment experience of the General
Account.
An amount allocated or transferred to the General Account may not be
transferred from or within the General Account prior to the end of the
Declaration Period with which it is associated. Intramerica will notify
Owners having funds allocated to the General Account associated with an
expiring Declaration Period prior to the end of the Declaration Period and
will request instructions as to the reallocation of such amounts. If no
instructions are received from the Owner prior to the end of the
Declaration Period, the portion of the Account Value attributable to that
Declaration Period will be transferred to the Money Market Subaccount at
the end of the Declaration Period.
For a discussion of transfer rights, charges, and surrender privileges
relating to amounts allocated to the General Account, see "THE CONTRACT --
Transfers," "DISTRIBUTIONS UNDER THE CONTRACT -- Full and Partial Surrender
Privileges" and "CHARGES AND DEDUCTIONS --Transfer Charges."
V O T I N G R I G H T S
To the extent required by law, Intramerica will vote the Fund's shares
held in the Variable Account at regular and special shareholder meetings of
the Fund in accordance with instructions received from persons having
voting interests in the corresponding Subaccounts. If, however, the 1940
Act or any regulation thereunder should be amended or if the present
interpretation thereof should change, and as a result, Intramerica
determines that it is permitted to vote the Fund's shares in its own right,
it may elect to do so.
The number of votes that an Owner has the right to instruct will be
calculated separately for each Subaccount and will be determined by
dividing a Contract's value in a Subaccount by the net asset value per
share of the corresponding Portfolio in which the Subaccount invests.
Fractional shares will be counted. The number of votes of a Portfolio that
the Owner has the right to instruct will be determined as of the date
coincident with the date established by the Fund for determining
shareholders eligible to vote at the meeting of the Fund. Voting
instructions will be solicited by written communications prior to that
meeting in accordance with procedures established by the Fund. Each person
having a voting interest in a Subaccount will receive proxy material,
reports, and other materials relating to the appropriate Portfolio.
Intramerica will vote shares of the Fund for which no timely
instructions are received in proportion to the voting instructions which
are received with respect to all variable annuity contracts (including the
Contract)
46
<PAGE>
issued by Intramerica and participating in that Portfolio. Intramerica also
will vote shares it owns that are not attributable to variable annuity
contracts in the same proportion.
Separate accounts of other insurance companies, including an insurance
company affiliated with Intramerica, also invest premiums for variable life
and variable annuity contracts in the Fund. It is to be expected that Fund
shares held by those separate accounts will be voted according to the
instructions of the owners of those variable life and variable annuity
contracts. This will dilute the effect of the Owners' voting instructions.
Intramerica does not see any disadvantages to this dilution.
L E G A L P R O C E E D I N G S
There are no legal proceedings to which the Variable Account is a
party or to which the assets of the Variable Account are subject.
Intramerica is not involved in any litigation that is of material
importance in relation to its total assets or that relates to the Variable
Account.
A D D I T I O N A L I N F O R M A T I O N
A registration statement has been filed with the SEC under the
Securities Act of 1933 and the 1940 Act with respect to the Contract
offered hereby. This Prospectus does not contain all of the information
set forth in the registration statement and the amendments and exhibits to
the registration statement, to all of which reference is made for further
information concerning the Variable Account, Intramerica and the Contract
offered hereby. Statements contained in this Prospectus as to the contents
of the Contract and other legal instruments are summaries. For a complete
statement of the terms thereof, reference is made to such instruments as
filed.
47
<PAGE>
TABLE OF CONTENTS FOR
STATEMENT OF ADDITIONAL INFORMATION
Prospectus
Page Reference*
STATE REGULATION OF INTRAMERICA 1 13
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
OF CERTAIN EXCHANGES AND SURRENDERS 1 36
SAFEKEEPING OF THE VARIABLE ACCOUNT'S
ASSETS 2 13
CALCULATION OF YIELDS
AND TOTAL RETURNS 2 11
Money Market Subaccount Yields 2
Other Subaccount Yields 3
Total Returns 4
Effect of the Records Maintenance Charge
on Performance Data 5
OTHER PERFORMANCE DATA 5 12
Cumulative Total Returns 5
Comparison of Performance and
Expense Information 6
LEGAL MATTERS 6 47
INDEPENDENT ACCOUNTANTS 7
FINANCIAL STATEMENTS 8 10
* The corresponding section headings may be found in the Prospectus at
the pages indicated.
48
<PAGE>
INTRAMERICA
VARIABLE ANNUITY ACCOUNT
STATEMENT OF
ADDITIONAL INFORMATION
FOR THE
SCUDDER HORIZON PLAN
FLEXIBLE PREMIUM VARIABLE
DEFERRED ANNUITY
Offered by
INTRAMERICA LIFE INSURANCE COMPANY
(A New York Stock Life Insurance Company)
9 Ramland Road
Orangeburg, New York 10962
---------------
This Statement of Additional Information expands upon subjects
discussed in the current Prospectus for the Flexible Premium Variable
Deferred Annuity (the "Contract") offered by Intramerica Life Insurance
Company. You may obtain a copy of the Prospectus, dated May 1, 1997, by
calling (800) 225-2470, or writing to Scudder Insurance Agency of New York,
Inc., 345 Park Avenue, New York, New York 10154. Terms used in the current
Prospectus for the Contract are incorporated in this Statement.
THIS STATEMENT OF ADDITIONAL INFORMATION IS
NOT A PROSPECTUS AND SHOULD BE READ ONLY
IN CONJUNCTION WITH THE PROSPECTUS FOR THE CONTRACT.
Dated May 1, 1997
<PAGE>
TABLE OF CONTENTS
Prospectus
Page Reference*
STATE REGULATION OF INTRAMERICA 1 13
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
OF CERTAIN EXCHANGES AND SURRENDERS 1 36
SAFEKEEPING OF THE VARIABLE ACCOUNT'S ASSETS 2 13
CALCULATION OF YIELDS AND TOTAL RETURNS 2 11
Money Market Subaccount Yields 2
Other Subaccount Yields 3
Total Returns 4
Effect of the Records Maintenance Charge on
Performance Data 5
OTHER PERFORMANCE DATA 5 12
Cumulative Total Returns 5
Comparison of Performance and Expense Information 6
LEGAL MATTERS 6 47
INDEPENDENT ACCOUNTANTS 7
FINANCIAL STATEMENTS 8 10
* The corresponding section headings may be found in the Prospectus at the
pages indicated.
<PAGE>
In order to supplement the description in the Prospectus, the
following provides additional information about Intramerica and the
Contract which may be of interest to an Owner.
STATE REGULATION OF INTRAMERICA
Intramerica is a stock life insurance company organized under the laws
of the State of New York on March 24, 1966. Intramerica is subject to
regulation by the State of New York Insurance Department. Quarterly
statements covering the operations and reporting on the financial condition
of Intramerica are filed with the New York Superintendent of Insurance.
Periodically, the Superintendent examines the financial condition of
Intramerica, including the liabilities and reserves of the Variable Account
and any other separate account of which Intramerica is the depositor.
Intramerica is an indirect wholly-owned subsidiary of Charter National
Life Insurance Company ("Charter"), a Missouri stock life insurance
company. Charter is engaged principally in the offering of insurance
products on a direct marketing basis in 49 states, the District of Columbia
and Puerto Rico. Charter is a wholly-owned subsidiary of Leucadia National
Corporation ("Leucadia"), a New York corporation. Leucadia is a
diversified holding company, the common stock of which is listed on the New
York and Pacific Stock Exchanges. Campet, Inc., a Leucadia subsidiary owns
all of the outstanding stock of CNL, Inc. ("CNL"), the principal
underwriter of the Contract.
The Variable Account was originally established by First Charter Life
Insurance Company ("First Charter"), a subsidiary of Charter, on June 8,
1988. At that time, First Charter's corporate name was "Baldwin Life
Insurance Company" and the Variable Account was named "Baldwin Variable
Annuity Account." These names were changed to "First Charter Life
Insurance Company" and "First Charter Variable Annuity Account"
respectively, in October, 1988. On November 1, 1992, First Charter was
merged with and into Intramerica. Pursuant to the merger, Intramerica
acquired the Variable Account which was then renamed "Intramerica Variable
Annuity Account."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF
CERTAIN EXCHANGES AND SURRENDERS
Under Section 1035 of the Code, generally no gain or loss is
recognized on a qualifying exchange of an annuity contract for another
annuity contract. A direct exchange of an annuity contract for the
Contract qualifies as an exchange under Section 1035 of the Code. There
are, however, certain exceptions to this rule. Moreover, although the
issue is not free from doubt, certain surrenders under an annuity contract
followed by an investment in the Contract also may qualify as exchanges
under Section 1035 of the Code. Due to the uncertainty of the rules
regarding the determination of whether a transaction qualifies under
Section 1035 of the Code, prospective purchasers are urged to consult their
own tax advisers.
In addition to being nontaxable events, certain exchanges under
Section 1035 of the Code also may result in a carry-over of the federal
income tax treatment of the old annuity contract to the new annuity
contract. Due to the complexity of the rules regarding the proper
treatment of an exchange qualifying under Section 1035 of the Code
prospective purchasers are urged to consult their own tax advisers.
1
<PAGE>
SAFEKEEPING OF THE VARIABLE ACCOUNT'S ASSETS
Intramerica holds the assets of the Variable Account. The assets are
kept segregated and held separate and apart from the general funds of
Intramerica. Intramerica maintains records of all purchases and
redemptions of the shares of each Portfolio. A blanket fidelity bond in
the amount of $10,000,000 covers all of the officers and employees of
Intramerica.
CALCULATION OF YIELDS AND TOTAL RETURNS
From time to time, Intramerica may disclose yields, total returns and
other performance data for the Subaccounts in accordance with regulations
published by the Securities and Exchange Commission. Because of the
charges and deductions imposed under the Contract, the yield for the
Subaccounts will be lower than the yield for their respective Portfolios.
Also, because of differences in Variable Account charges for different
variable annuity contracts invested in the Variable Account, the yields,
total returns and other performance data for the Subaccounts will be
different for the Contract than for such other variable annuity contracts.
The calculations of yields, total returns and other performance data do not
reflect the effect of any premium tax since no premium tax on the Contract
is currently payable under New York law.
The yields and total returns for periods prior to the date the
Subaccounts commenced operations, when disclosed, are based on the
performance of the Scudder Variable Life Investment Fund's Portfolios and
the assumption that the Subaccounts were in existence for the same periods
as the Fund's Portfolios with the level of Contract charges equal to those
that were in effect at the inception of the Subaccounts for the Contracts.
The Subaccounts and Portfolios commenced operations, as indicated:
Subaccount/Portfolio Subaccount Portfolio
Money Market July, 1990 July, 1985
Bond July, 1990 July, 1985
Balanced July, 1990 July, 1985
Capital Growth July, 1990 July, 1985
International July, 1990 May, 1987
Growth and Income May, 1994 May, 1994
Global Discovery May, 1996 May, 1996
Money Market Subaccount Yields
Based on the method of calculation described below, the Current Yield
and Effective Yield on amounts held in the Money Market Subaccount for the
seven-day period ended December 31, 1996, were as follows:
Current Yield = 4.31%
Effective Yield = 4.40%
The Current Yield is computed by determining the net change (exclusive
of realized gains and losses on the sale of securities and unrealized
appreciation and depreciation) at the end of a seven-day period in the
value of a hypothetical account having a balance of one unit of the Money
Market Subaccount at the beginning of the seven-day period, dividing the
net change in account value by the
2
<PAGE>
value of the account at the beginning of the period to determine the base
period return, and annualizing this quotient on a 365-day basis. The net
change in account value reflects (i) net income from the Portfolio
attributable to the hypothetical account and (ii) charges and deductions
imposed under a Contract that are attributable to the hypothetical account.
The charges and deductions for the hypothetical account include the per
unit charges for Administration and Mortality and Expense Risk. The
Current Yield is calculated according to the following formula:
Current Yield = ((NCS - ES) / UV) x (365 / 7)
The Effective Yield is calculated by compounding the unannualized base
period return according to the following formula:
Effective Yield = (1 + ((NCS - ES) / UV))(to the power of 365 / 7) - 1
Where, for both formulas:
NCS = The net change in the value of the Portfolio (exclusive of realized
gains and losses on the sale of securities and unrealized appreciation and
depreciation) for the seven-day period attributable to a hypothetical
account having a balance of one Subaccount unit under a Contract.
ES = Per unit expenses of the Subaccount for the Contracts for the seven-
day period.
UV = The unit value for a Contract on the first day of the seven-day
period.
The Current and Effective Yield on amounts held in the Money Market
Subaccount normally will fluctuate on a daily basis. Therefore, the
disclosed yield for any given past period is not an indication or
representation of future yields or rates of return. The Money Market
Subaccount's actual yield is affected by changes in interest rates on money
market securities, average maturity of the Money Market Portfolio, the
types and quality of securities held by the Money Market Portfolio and its
operating expenses.
Other Subaccount Yields
Based on the method of calculation described below, the 30-Day Yield
for the Bond Subaccount for the 30-Day period ended December 31, 1996, was
as follows:
30-Day Yield = 5.39%
The 30-Day Yield refers to income generated by the Bond Subaccount
over a specific 30-day period. Because the yield is annualized, the yield
generated during the 30-day period is assumed to be generated each 30-day
period over a 12-month period. The yield is computed by: (i) dividing
the net investment income of the Portfolio attributable to the Subaccount
units less Subaccount expenses attributable to the Contracts for the
period, by the maximum offering price per unit on the last day of the
period times the daily average number of units outstanding for the period,
compounding that yield for a six-month period and (ii) multiplying that
result by two. Expenses attributable to the Bond Subaccount for the
Contracts include the Administration Charge and the Mortality and Expense
Risk Charge. The 30-Day Yield is calculated according to the following
formula:
30-Day Yield = 2 x ((((NI -ES) / (U x UV)) + 1)to the power of 6 - 1)
3
<PAGE>
Where:
NI = Net income of the portfolio for the 30-day period attributable to the
Subaccount's units.
ES = Expenses of the Subaccount for the Contracts for the 30-day period.
U = The average daily number of units outstanding attributable to the
Contracts.
UV = The highest unit value at the close of the last day in the 30-day
period.
The 30-Day Yield on amounts held in the Bond Subaccount normally will
fluctuate over time. Therefore, the disclosed yield for any given past
period is not an indication or representation of future yields or rates of
return. The Bond Subaccount's actual yield is affected by the types and
quality of securities held by the Portfolio and its operating expenses.
Total Returns
Intramerica may disclose Standard Average Annualized Total Returns
("Total Returns") for one or more of the Subaccounts for various periods of
time. One of the periods of time will include the period measured from the
date the Subaccount commenced operations. When a Subaccount has been in
operation for one, five and ten years, respectively, the Total Returns for
these periods will be provided. Total Returns for other periods of time
may, from time to time, also be disclosed. Based on the method of
calculation described below, the Total Returns for the Subaccounts were as
follows:
Inception of Inception of One Year Five Year
the Subaccount the Portfolio Period Ending Period Ending
Subaccount to 12/31/96 to 12/31/96 12/31/96 12/31/96
Money Market 3.81% 4.76% 4.37% 3.32%
Bond 8.09% 7.57% 2.09% 6.07%
Balanced 9.86% 10.59% 11.10% 9.01%
Capital Growth 12.46% 13.28% 19.28% 11.64%
International 6.80% 9.04% 13.97% 10.26%
Growth and Income* 20.81% 20.81% 21.30% N/A
Global Discovery** 7.58% 7.58% N/A N/A
* Five Year Total Returns are not applicable for the Growth and Income
Subaccount as it commenced operation on May 1, 1994.
** One and Five Year Total Returns are not applicable for the Global
Discovery Subaccount as it commenced operation on May 1, 1996.
Total Returns represent the average annual compounded rates of return
that would equate a single investment of $1,000 to the redemption value of
the investment as of the last day of each of the periods. The ending date
for each period for which Total Return quotations are provided will be for
the most recent month end practicable, considering the type and media of
the communication, and will be stated in the communication.
Total Returns will be calculated using Subaccount Unit Values which
Intramerica calculates on each Valuation Date based on the performance of
the Subaccount's underlying Portfolio, and the deductions for the Mortality
and Expense Risk Charge, the Administration Charge and (for periods prior
to January 25,
4
<PAGE>
1991) the Records Maintenance Charge. An average per dollar Records
Maintenance Charge attributable to the hypothetical account for the period
is used. The Total Return is calculated according to the following
formula:
TR = (ERV / P )(to the power of 1 / N) - 1
Where:
TR = The average annual total return net of Subaccount recurring charges
for the Contracts.
ERV = The ending redeemable value of the hypothetical account at the end of
the period.
P = A hypothetical single payment of $1,000.
N = The number of years in the period.
Effect of the Records Maintenance Charge on Performance Data
The Contract provides for an annual $40 Records Maintenance Charge to
be deducted at the end of each Contract Year proportionately from each
Subaccount and each Declaration Period in the General Account in which the
Owner has funds allocated. Currently, Intramerica is not deducting the
Records Maintenance Charge. For purposes of reflecting the Records
Maintenance Charge on performance information prior to January 25, 1991,
the $40 annual charge was converted into a per dollar per day charge based
on the average Accumulated Value of all Contracts on the last day of the
period for which quotations are provided.
The assumed average Records Maintenance Charge was not, except in rare
instances, reflective of its actual effect on a particular Contract.
OTHER PERFORMANCE DATA
Cumulative Total Returns
Intramerica may disclose Cumulative Total Returns in conjunction with
the standard format described previously. The Cumulative Total Returns for
the Subaccounts were as follows:
Inception of Inception of One Year FiveYear
the Subaccount the Portfolio Period Ending Period Ending
Subaccount to 12/31/96 to 12/31/96 12/31/96 12/31/96
Money Market 27.45% 70.41% 4.37% 17.77%
Bond 65.59% 130.85% 2.09% 34.31%
Balanced 83.92% 217.29% 11.10% 54.04%
Capital Growth 114.05% 317.63% 19.28% 73.53%
International 53.19% 130.84% 13.97% 63.07%
Growth and Income* 65.70% 65.70% 21.30% N/A
Global Discovery** 5.01% 5.01% N/A N/A
* Five Year Returns are not applicable for the Growth and Income
Subaccount as it commenced operation on May 1, 1994.
** One Year and Five Year Returns are not applicable for the Global
Discovery Subaccount as it commenced operation on May 1, 1996.
5
<PAGE>
The Cumulative Total Returns are calculated using the following formula:
CTR = (ERV / P) - 1
Where:
CTR = The Cumulative Total Return net of Subaccount recurring charges for
the period.
ERV = The ending redeemable value of the hypothetical investment at the end
of the period.
P = A hypothetical single payment of $1,000.
Comparison of Performance and Expense Information
Expenses and performance information for each Subaccount may be
compared in advertising, sales literature, and other communications to
expenses and performance information of other variable annuity products
investing in mutual funds (or investment portfolios of mutual funds) with
investment objectives similar to each of the Subaccounts tracked by
independent services such as Lipper Analytical Services, Inc. ("Lipper"),
Morningstar and the Variable Annuity Research Data Service ("V.A.R.D.S.").
Lipper, Morningstar and V.A.R.D.S. monitor and rank the performance and
expenses of variable annuity issuers in each of the major categories of
investment objectives on an industry-wide basis.
Lipper's and Morningstar's rankings include variable life insurance
issuers as well as variable annuity issuers. V.A.R.D.S. rankings only
compare variable annuity issuers. The performance analyses prepared by
Lipper and V.A.R.D.S. each rank such issuers on the basis of total return,
assuming reinvestment of distributions, but do not take sales charges or
certain expense deductions at the separate account level into
consideration. The performance analyses prepared by Morningstar rates
subaccount performance relative to its investment class based on total
returns. Morningstar deducts front end loads from total returns and
deducts half of the surrender charge, if applicable, for the relevant time
period when calculating performance figures. In addition, Morningstar and
V.A.R.D.S. prepare risk adjusted rankings, which consider the effects of
market risk on total return performance. This type of ranking provides
data as to which funds provide the highest total return within various
categories defined by the degree of risk inherent in their investment
objectives.
From time to time, Intramerica may also compare the performance of
each Subaccount to indices that measure stock market performance, such as
Standard & Poors 500 Composite ("S & P 500") or the Dow Jones Industrial
Average ("Dow"). Unmanaged indices such as these may assume reinvestment
of dividends but generally do not reflect "deductions" for the expenses of
operating and managing an investment portfolio.
LEGAL MATTERS
Sutherland, Asbill & Brennan, L.L.P. of Washington, D.C. has provided
advice on certain legal matters relating to the Federal Securities Laws.
All matters of New York law pertaining to the Contracts, including the
validity of the Contract and Intramerica's authority to issue the Contract
under New York Insurance Law, have been passed upon by Alexis M. Berg,
General Counsel of Intramerica Life Insurance Company.
6
<PAGE>
INDEPENDENT ACCOUNTANTS
The financial statements of the Intramerica Variable Annuity Account
as of December 31, 1996 and for each of the two years in the period ended
December 31, 1996 and the financial statements of Intramerica Life
Insurance Company as of December 31, 1996 and 1995and for each of the three
years in the period ended December 31, 1996 have been included in this
Registration Statement in reliance on the reports of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of said firm as
experts in accounting and auditing.
FINANCIAL STATEMENTS
The financial statements of Intramerica, which are included in this
Statement of Additional Information, should be considered only as bearing
on the ability of Intramerica to meet its obligation under the Contract.
They should not be considered as bearing on the investment performance of
the assets held in the Variable Account.
Financial Statements to be added by Amendment.
7
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
All required financial statements are included in Part B of this
Registration Statement.
(b) Exhibits
(1) (a) Resolutions of the Board of Directors of First Charter Life
Insurance Company authorizing establishment of the Variable Annuity Account
(b) Resolutions of the Board of Directors of Intramerica
regarding the acquisition of the Variable Annuity Account
(2) Not applicable
(3) (a) Principal Underwriting Agreement, dated September 1,1989,
amended January 25, 1991, by and between First Charter Life Insurance
Company on its own behalf and on behalf of First Charter Variable Annuity
Account,and CNL, Inc.
(b) Amendment, dated October 26, 1992, to the Principal
Underwriting Agreement
(c) Form of Marketing and Solicitation Agreement between Scudder
Fund Distributors, Inc., First Charter Life Insurance Company, CNL, Inc.
and First Charter Variable Annuity Account
(d) Amendment, dated October 26, 1992, to the Marketing and
Solicitation Agreement
(4) (a) Contract for the Flexible Premium Variable Deferred Annuity
(S 1802)
(5) (a) Application for the Flexible Premium Variable Deferred
Annuity (A 1802)
(b) Financial Questionnaire (B 1802)
(6) (a) Charter of Intramerica Life Insurance Company
(b) By-Laws of Intramerica Life Insurance Company
(7) Not Applicable
(8) (a) Participation Agreement dated May 11, 1994, by and between
Scudder Variable Life Investment Fund and Intramerica Life Insurance
Company
(b) Reimbursement Agreement dated May 11, 1994, by and between
Scudder, Stevens & Clark, Inc. and Intramerica Life Insurance Company
(c) General Services and Expense Reimbursement Agreement dated
September 1, 1989, between First Charter Life Insurance Company and Charter
National Life Insurance Company
(9) (a) Opinion and Consent of Counsel i
(b) Consent of Counsel i
(10) Consent of Independent Accountants i
(11) Not Applicable
(12) Not Applicable
(13) Schedule for Computation of Performance Data
(14) Power of Attorney
(i) Incorporated by reference to the Post-Effective Amendment No. 5 to
the Registration Statement on Form N-4, File No. 33-54116, filed on April
19, 1996.
C-1
<PAGE>
Item 25. Directors and Officers of the Depositor
Name and Principal Positions and offices
Business Address* with Depositor
Richard G. Petitt Chairman, Chief Executive Officer
Colonial Penn Life and Director
Insurance Co.
399 Market Street
Philadelphia, PA 19181
Alexis M. Berg Vice President, Secretary,
Colonial Penn Life General Counsel and Director
Insurance Co.
399 Market Street
Law Department
Philadelphia, PA 19181
Elizabeth A. Clifford Vice President, Controller
Colonial Penn Life and Treasurer
Insurance Co.
399 Market Street
Philadelphia, PA 19181
Linda H. Gerdes Senior Vice President, Assistant
Secretary, Chief Administrative
Officer and Director
Karen M. Henneberg Assistant Vice President
Colonial Penn Life
Insurance Co.
399 Market Street
Philadelphia, PA 19181
Elizabeth H. Lally Director
Four M Corporation
115 Steven Avenue
Valhalla, NY 10595
Godfrey H. Murrain, Esq. Director
225 Broadway, Suite 3504
New York, NY 10007
Henry H. Wulsin Vice President and Director
Colonial Penn
Insurance Co.
2650 Audubon Road
Norristown, PA 19403
Howard M. Pines Director
BeamPines, Inc.
600 3rd Avenue
New York, NY 10007
David L. Baxter Senior Vice President and Chief Actuary
Colonial Penn Life
Insurance Co.
399 Market Street
Philadelphia, PA 19181
C-2
<PAGE>
Name and Principal Positions and offices
Business Address* with Depositor
Timothy C. Sentner Vice President
Colonial Penn Life
Insurance Co.
399 Market Street
Philadelphia, PA 19181
Allen S. Miller Vice President
Charter National Life
Insurance Co.
8301 Maryland Avenue
St. Louis MO 63105
Kathleen A. Urbanowicz Assistant Vice President
Charter National Life
Insurance Co.
8301 Maryland Avenue
St. Louis MO 63105
Gregory R. Barstead President, Chief Operating
Colonial Penn Life. Officer and Director
Insurance Co
399 Market Street
Philadelphia, PA 19181
Robert F. Vickery Vice President
Colonial Penn Life
Insurance Co.
399 Market Street
Philadelphia, PA 19181
William R. Ziegler Director
Parson & Brown
230 Park Avenue
New York, NY 10169
* The principal business address of each person listed above, unless
otherwise indicated, is Intramerica Life Insurance Company, 9 Ramland Road,
Orangeburg, New York 10962.
Item 26. Persons Controlled by or Under Common Control With the
Depositor or Registrant
Intramerica is the depositor of Intramerica Variable Annuity Account, a
separate account. This separate account was originally established by
First Charter Life Insurance Company in connection with the sale of
Variable Annuity Contracts by First Charter. First Charter was merged with
and into Intramerica on November 1, 1992.
Intramerica is an indirect wholly-owned subsidiary of Charter National Life
Insurance Company ("Charter"). First Charter was a direct wholly-owned
subsidiary of Charter.
Charter is a stock life insurance company incorporated under the laws of
Missouri on December 7, 1955. Charter is engaged principally in the
offering of insurance products on a direct marketing basis and had assets
of $3.048 billion as of December 31, 1996. Charter is admitted to do
business in 49 states, the District of Columbia and Puerto Rico. The
principal offices of Charter are located at 8301 Maryland Avenue, St.
Louis, Missouri 63105, and its telephone number at that address is (314)
725-7575.
Charter is a wholly-owned subsidiary of Leucadia National Corporation
("Leucadia"), a New York corporation. Leucadia is a diversified holding
company, the common stock of which is listed on the New York and Pacific
Stock Exchanges.
C-3
<PAGE>
Campet, Inc., a Leucadia subsidiary owns all of the outstanding stock of
CNL, Inc. ("CNL"), the principal underwriter for the Contracts.
Set forth below is certain information concerning each of the persons under
common control with Intramerica, including state of organization,
percentage of voting securities owned or other basis of control and
principal business.
Percent of
Jurisdiction Voting
of Securities Principal
Name Incorporation Owned* Business
Campet, Inc. Delaware 100% Investments
Centurion Ins. Co. New York 100% Insurance
WMAC Investment Corp. Wisconsin 100% Holding Company
Colonial Penn Madison Wisconsin 100% Insurance
Insurance Co.
Bellpet, Inc. Delaware 100% Holding Company
Baldwin-CIS L.L.C. Delaware 100% Investments
Solana Corporation Utah 100% Holding Company
Baldwin Forest Delaware 100% Investments
Products L.L.C.
Conwed Corporation Delaware 100% Real Estate
Leucadia Film Utah 100% Film Products
Corporation
Neward Corporation New York 100% Owner and Operator of
Oil Wells
Rastin Investing Corp. Delaware 100% Investments
HSD Venture California 100% Real Estate
American Investment Delaware 100% Holding Company
Company
Leucadia Aviation, Inc. Delaware 100% Aviation
LNC Investments, Inc. Delaware 100% Investments
The Sperry and
Hutchinson Co., Inc. New Jersey 100% Trading Stamps
Leucadia, Inc. New York 100% Manufacturing &
Investments
College Life Indiana 100% Real Estate
Development Corp.
Phlcorp, Inc. Pennsylvania 100% Holding Company
Empire Insurance Co. New York 100% Insurance
American Investment Utah 100% Banking
Bank, N.A.
Wedgewood Investments Delaware 100% Investments
L.L.C.
Leucadia Financial Utah 100% Real Estate
Corporation
AIC Financial Corp. Delaware 100% Real Estate
Leucadia Cellars Delaware 100% Investments
American Investment Utah 100% Thrift Loan
Financial
Allcity Insurance Co. New York 89.8% Insurance
Charter National Life
Insurance Comp Missouri 100% Insurance
Colonial Penn Franklin
Insurance Compa Pennsylvania 100% Insurance
Colonial Penn Adminis-
trative Services Delaware 100% Administrator
Colonial Penn Group, Delaware 100% Holding Company
Inc.
Bay Colony Insurance California 100% Insurance
Company
Colonial Penn Delaware 100% Holding Company
Holdings, Inc.
Colonial Penn Ins. Co. Pennsylvania 100% Insurance
Colonial Penn Life Pennsylvania 100% Insurance
Ins. Co.
CPI Investment, Inc. Delawar 100% Investments
Intramerica Life New York 100% Insurance
Ins. Co.
Leucadia Properties, Utah 100% Real Estate
Inc.
C-4
<PAGE>
Percent of
Jurisdiction Voting
of Securities Principal
Name Incorporation Owned* Business
Terracor II Utah 100% Real Estate
CPAX, Inc. Delaware 100% Holding Company
The Village at Florida 100% Real Estate
Inlet Beach, Inc.
Pennpark Investors Illinois 80% Real Estate
L.L.C.
Professional Data Indiana 100% Real Estate
Management, Inc.
Bayside Casualty New Jersey 100% Insurance
Insurance Company
Leucadia Investors, New York 100% Investments
Inc.
Silver Mountain Utah 100% Real Estate
Industries, Inc.
Telluride Properties Utah 100% Real Estate
Acquisition, Inc.
Baldwin Enterprises, Colorado 100% Holding Company
Inc.
Commercial Loan
Insurance Company Wiscon 100% Insurance
NSAC, Inc. Colorado 100% Real Estate
RERCO, Inc. Delaware 100% Finance
330 MAD. PARENT CO Delaware 100% Investments
WMAC Credit Insurance Wisconsin 100% Insurance
Corp.
Providential Life Arkansas 100% Insurance
Insurance Co.
Andrus Vineyard Co., California 95% Vineyard
L.L.C.
CDS Devco, Inc. California 80% Investments
San Elijo Ranch, Inc. California 68% Real Estate
RRP, Inc. Colorado 100% Real Estate
CDS Holding Delaware 100% Holding Company
Corporation
International Delaware 75% Holding Company
Bottlers L.L.C.
Pepsi International Delaware 75% Holding Company
Bottlers L.L.C.
LUK-REN, Inc. New York 100% Real Estate
Pine Ridge Texas 75% Winery
Associates, L.P.
Leucadia Bottling Utah 100% Holding Company
L.L.C.
Leucadia Power Utah 100% Holding Company
Holdings, Inc.
Colonial Penn Mexico 100% Insurance
De Mexico, Inc.
* Unless otherwise noted, voting securities are owned by Leucadia. A
number of subsidiaries of Leucadia are not included on this list. Taken
together and considered as a single subsidiary, they would not constitute a
significant subsidiary of Leucadia. More detailed information will be
supplied upon request. In addition, inactive companies are not included on
this list.
Item 27. Numbers of Contract Owners
As of December 31, 1996 there were 1,048 Owners of the flexible premium
variable deferred annuity, of which 1,028 were Non-qualified and 20 were
Qualified, issued by the Variable Account.
Item 28. Indemnification
Section 722 of New York General and Business Corporation Law, in brief,
allows a corporation to indemnify any person who is a party or who is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, against expenses, including
attorneys' fee, judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action if he acted
in good faith and in a manner reasonably believed to be in or not opposed
to the best interests of the corporation. Where any person was or is a
party or is threatened to be made a party in an action or suit by or in the
right of the
C5
<PAGE>
corporation to procure a judgment in its favor, indemnification may not be
paid where such person shall have been adjudged to be liable for negligence
or misconduct in the performance of his duty to the corporation, unless a
court determines that the person is fairly and reasonably entitled to
indemnity. A corporation has the power to give any further indemnity, to
any person who is or was a director, officer, employee or agent, as
provided for in the articles of incorporation or as authorized by any by-
law which has been adopted by vote of the shareholders, provided that no
such indemnity shall indemnify any person whose action was finally adjudged
to have been knowingly fraudulent, deliberately dishonest or the result of
willful misconduct.
Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers and controlling persons of Intramerica
and the Variable Account pursuant to the foregoing statute, or otherwise,
Intramerica and the Variable Account have been advised that in the opinion
of the SEC such indemnification is against public policy as expressed in
the 1933 Act and is, therefore, unenforceable. In the event that a claim
is made for indemnification against such liabilities (other than the
payment by Intramerica or the Variable Account of expenses incurred or paid
by a director, officer or controlling person in connection with the
securities being registered), Intramerica or the Variable Account will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the 1933 Act, and will be governed by the final adjudication
of such issue.
Item 29. Principal Underwriter
CNL is the principal underwriter for the Intramerica Variable Annuity
Account, a separate account of Intramerica formed in connection with the
distribution of variable annuity contracts by Intramerica. Currently, CNL
also acts as principal underwriter for variable annuity contracts and
variable life policies issued by the Charter National Variable Account.
The directors and officers of CNL are as follows:
Name and Principal Positions and offices
Business Address* with Underwriter
Richard G. Petitt Chairman and Director
Colonial Penn Life
Insurance Co.
399 Market Street
Philadelphia, PA 19181
Allen S. Miller President and Director
Gregory R. Barstead Executive Vice President
Colonial Penn Life. Treasurer and Director
Insurance Co
399 Market Street
Philadelphia, PA 19181
Kathleen A. Urbanowicz Vice President and Assistant Secretary
Karen M. Henneberg Vice President and Secretary
Colonial Penn Life
Insurance Co.
399 Market Street
Philadelphia, PA 19181
Elizabeth A. Clifford Senior Vice President, and Controller
Colonial Penn Life
Insurance Co.
399 Market Street
Philadelphia, PA 19181
C-6
<PAGE>
Name and Principal Positions and offices
Business Address* with Underwriter
Ronald Stitt Assistant Secretary
Colonial Penn Life
Insurance Co.
399 Market Street
Philadelphia, PA 19181
Alexis M. Berg Director
Colonial Penn Life
Insurance Co.
399 Market Street
Philadelphia, PA 19181
* The principal business address of each person listed above, unless
otherwise indicated, is Charter National Life Insurance Company, 8301
Maryland Avenue, St. Louis, Missouri 63105.
Item 30. Location of Accounts and Records
All accounts and records required to be maintained by Section 31(a) of the
1940 Act and rules under it are maintained by Intramerica at its Home
Office.
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
Intramerica Life Insurance Company hereby represents that the fees and
charges deducted under the Contract, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred,
and the risks assumed by Intramerica Life Insurance Company.
C-7
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant certifies that it meets the requirements for
effectiveness of this amended Registration Statement and has duly caused
this amended Registration Statement to be signed on its behalf in the City
of Philadelphia and the State of Pennsylvania on this 24th day of February,
1997.
INTRAMERICA VARIABLE ANNUITY ACCOUNT
(Registrant)
(Seal) INTRAMERICA LIFE INSURANCE COMPANY
(Depositor)
Attest: _____________________ By:___________________________________
/S/ Alexis M. Berg /S/ Karen M. Henneberg
Vice President, General Assistant Vice President,
Counsel & Corporate Compliance
Secretary
As required by the Securities Act of 1933 this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.
Signature Title Date
*________________________ Chairman of the Board, Chief ________
Richard G. Petitt Executive Officer and Director
*________________________ Vice President, Secretary, ________
Alexis M. Berg General Counsel and Director
*________________________ Vice President, Treasurer and ________
Elizabeth A. Clifford Controller
*________________________ Senior Vice President, Assistant ________
Linda H. Gerdes Secretary, Chief Administrative
Officer and Director
<PAGE>
Signature Title Date
*________________________ Vice President ________
Timothy C. Sentner
*________________________ Director ________
Elizabeth H. Lally
*________________________ Vice President ________
Allen S. Miller
*________________________ Director ________
Godfrey H. Murrain, Esq.
*________________________ Director ________
Howard M. Pines
*________________________ Senior Vice President and Chief ________
David L. Baxter Actuary
*________________________ Vice President and Director ________
Henry H. Wulsin
*________________________ President, Chief Operating ________
Gregory R. Barstead Officer and Director
*________________________ Director ________
William R. Ziegler
*________________________ Vice President ________
Robert F. Vickery
* Pursuant to Power of Attorney
<PAGE>
(Seal) Date: February 24, 1997
Attest: _____________________ By:___________________________________
/S/ Alexis M. Berg /S/ Karen M. Henneberg
Vice President, General Assistant Vice President,
Counsel & Corporate Compliance
Secretary
PRINCIPAL UNDERWRITING AGREEMENT
AGREEMENT dated September 1, 1989, by and between First Charter Life
Insurance Company ("First Charter"), a New York corporation, on its own
behalf and on behalf of First Charter Variable Annuity Account ("Variable
Account"), and CNL, Inc. ("CNL"), a Missouri corporation.
WITNESSETH:
WHEREAS, the Variable Account is a segregated asset account
established and maintained by First Charter pursuant to the laws of the
State of New York for certain variable deferred annuities to be issued by
First Charter (the "Contracts"), under which income, gains, and losses,
whether or not realized, from assets allocated to such account, will be, in
accordance with the Contracts, credited to or charged against such account
without regard to other income, gains, or losses of First Charter; and
WHEREAS, First Charter has registered the Variable Account as a unit
investment trust under the Investment Company Act of 1940 (the "Investment
Company Act"); and
WHEREAS, CNL has registered as a broker-dealer under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") and is a member firm
of the National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, First Charter has registered the Contracts under the
Securities Act of 1933 and proposes to issue and sell the Contracts through
CNL acting as its principal underwriter.
NOW, THEREFORE, First Charter and CNL hereby mutually agree as
follows:
1. Underwriter.
(a) First Charter grants to CNL the exclusive right, during
the term of this Agreement, subject to the registration requirements of the
Securities Act of 1933 and the Investment Company Act and the provisions of
the Securities Exchange Act, to be the principal underwriter of the
Contracts. CNL agrees to use its best efforts to distribute the Contracts,
and to undertake to provide sales services relative to the Contracts and
otherwise to perform all duties and functions necessary and proper for the
distribution of the Contracts.
(b) To the extent necessary to offer the Contracts, CNL shall
be duly registered or otherwise qualified under the securities laws of any
state or other jurisdiction. The sales representatives of CNL soliciting
applications for the Contracts shall be duly and appropriately licensed,
registered or otherwise qualified for the sale of such Contracts (and the
riders offered in connection therewith, if any) under the federal
securities laws, any applicable state insurance laws and securities laws of
each state or other jurisdiction in which such contracts may lawfully be
sold and in which First Charter is licensed to sell Contracts. CNL shall
be responsible for the training, supervision, and control of its
representatives for the purposes of the NASD Rules of Fair Practice and
federal and state securities law requirements applicable in connection with
the offering and sale of the procedures in compliance with NASD Rules of
Fair Practice, Section 27, Paragraph 2177.
(c) CNL agrees to offer the Contracts for sale in accordance
with the prospectuses therefor filed with the Securities and Exchange
Commission ("Commission") then in effect. CNL is not authorized to give
any information or to make any representations concerning the Contracts
other than those contained in such current prospectus or in such sales
literature as may be authorized by First Charter.
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<PAGE>
(d) all purchase payments made or other monies payable under
the Contracts shall be paid or remitted by or on behalf of Contract Owners
directly to First Charter or its designated servicing agent and shall
become the exclusive property of First Charter. First Charter will retain
all such payments and monies except to the extent such payments and monies
are allocated to the Variable Account.
2. Sales Agreements
(a) CNL is hereby authorized to enter into separate written
agreements, on such terms and conditions as CNL may determine to be not
inconsistent with this Agreement, with broker/dealers registered as such
under the Securities Exchange Act which agree to participate in the
distribution of the Contracts and to use their best efforts to solicit
applications for the Contracts. All such sales agreements shall provide
that each broker/dealer will assume full responsibility for continued
compliance by itself and its representatives with applicable federal and
state securities laws, and shall be in such form and contain such other
provisions as First Charter may from time to time require. Such
broker/dealer shall assume any legal responsibility of First Charter for
the acts, commissions, or defalcations of such representatives insofar as
they relate to the sale of the Contracts. Such broker/dealers and their
representatives soliciting applications for the Contracts shall be duly and
appropriately licensed, registered, or otherwise qualified for the sale of
such Contracts (and the riders offered in connection therewith, if any)
under the federal securities laws, any applicable state insurance and
securities laws of each state or other jurisdiction in which such Contracts
may be lawfully sold and in which First Charter is licensed to sell the
Contracts. Each such organization shall be both registered as a
broker/dealer under the Securities Exchange Act and a member of the NASD,
or if not so registered or not such a member, then the representatives of
such organization soliciting applications for Contracts shall be registered
representatives of a registered broker/dealer and NASD member which is an
affiliate of such organization and which maintains full responsibility for
the training, supervision, and control of the representatives selling the
Contracts.
(b) Applications for the Contracts solicited by such
organizations through their representatives shall be forwarded to First
Charter. All payments for Contracts shall be made by check or money order
payable to "First Charter Life Insurance Company" and remitted promptly by
such organizations to First Charter as agent for CNL. First Charter will
also accept wire transfers via Federal Funds to an account designated by
First Charter. All broker/dealers who agree to participate in the
distribution of the Contracts shall act as independent contractors and
nothing herein contained shall constitute such broker/dealers or their
agents or employees as employees of First Charter in connection with the
sale of the Contracts.
3. Compensation. First Charter shall pay CNL commissions for
performing the sales services set forth herein for Contracts sold under
dealer sales agreements that CNL enters into with other broker/dealers
pursuant to paragraph 2, above, the amount of which commissions are as set
forth in Schedule A to this Agreement, which Schedule may be hereafter
amended from time to time by mutual agreement of First Charter and CNL.
4. Administrative Services. First Charter agrees to maintain all
required books of account and related financial records on behalf of CNL.
All such books of account and records shall be maintained and preserved
pursuant to Rules 17a-3 and 17a-4 under the Securities Exchange Act (or the
corresponding provisions of any future federal securities laws or
regulations). In addition, First Charter will maintain records of all
sales commissions paid to sales representatives of CNL in connection with
the sale of the Contracts. All such books and records shall be maintained
by First Charter on behalf of and as agent for CNL whose property they are
and shall remain for all purposes, and shall at all times be subject to
reasonable periodic, special, or other examination by the Commission and
all other regulatory bodies having jurisdiction. First Charter also agrees
to send to CNL's customers all required confirmations on customer
transactions.
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<PAGE>
5. Reports. CNL shall have the responsibility for maintaining the
records of sales representatives licensed, registered, and otherwise
qualified to sell the Contracts and for furnishing periodic reports thereof
to First Charter.
6. Regulation.
(a) This Agreement shall be subject to the provisions of the
Investment Company Act and the Securities Exchange Act and the rules,
regulations, and rulings thereunder and of the NASD, from time to time in
effect, including such exemptions from the Investment Company Act as the
Commission may grant, and the terms hereof shall be interpreted and
construed in accordance therewith. Without limiting the generality of the
foregoing, the term "assigned" shall not include any transactions exempted
from section 15(b)(2) of the Investment Company Act.
(b) CNL shall submit to all regulatory and administrative
bodies having jurisdiction over the present and future operations of First
Charter or Variable Account, any information, reports or other material
which any such body by reason of this Agreement may request or require
pursuant to applicable laws or regulations. Without limiting the
generality of the foregoing, CNL shall furnish the State of New York
Secretary of State and/or the Director of Insurance with any information or
reports which the Secretary of State and/or the Director of Insurance may
request in order to ascertain whether the variable operations of First
Charter are being conducted in a manner consistent with any other
applicable law or regulations.
7. Suitability. First Charter and CNL each wish to ensure that the
Contracts distributed by CNL will be issued to purchasers for whom the
Contract will be suitable. CNL shall take reasonable steps to ensure that
the various sales representatives appointed by it shall not make
recommendations to an applicant to purchase a Contract in the absence of
reasonable grounds to believe that the purchase of the Contract is suitable
for such applicant. While not limited to the following, a sales
representative after reasonable inquiry of such applicant concerning the
applicant's insurance and investment objectives, financial situation and
needs, and the likelihood of whether the applicant will persist with the
Contract for such a period of time that First Charter's acquisition costs
are amortized over a reasonable period of time. CNL will require that the
applicant complete the Financial Questionnaire, Form #B1601, for premium
amounts in excess of $250,000. At its sole discretion, CNL may require
Form #B1601 for lesser amounts.
8. Prospectuses and Promotional Material. First Charter shall
furnish CNL with copies of all prospectuses, financial statements, and
other documents and materials which CNL reasonably requests for use in
connection with the distribution of the Contracts. First Charter shall
have responsibility for the preparation, filing, and printing of all
required prospectuses and/or registration statements in connection with the
Contracts, and the payment of all related expenses. CNL and First Charter
shall cooperate fully in designing, drafting, and reviewing sales promotion
materials, and with respect to the preparation of individual sales
proposals related to the sale of the Contracts. CNL shall not use any such
materials not provided or approved by First Charter.
9. Investigation and Proceedings.
(a) CNL and First Charter agree to cooperate fully in any
insurance regulatory investigation or proceeding or judicial proceeding
arising in connection with the Contracts distributed under this Agreement.
CNL and First Charter further agree to cooperate fully in any securities
regulatory inspection, inquiry, investigation or proceeding or any judicial
proceeding with respect to First Charter, CNL, their affiliates and their
representatives to the extent that such inspection, inquiry, investigation
or proceeding is in connection with Contracts distributed under this
Agreement. Without limiting the foregoing:
3
<PAGE>
(i) CNL will be notified promptly of any customer
complaint or notice of any regulatory inspection, inquiry, investigation or
proceeding or judicial proceeding received by First Charter with respect to
CNL or any representative or which may affect First Charter's issuance of
any Contracts marketed under this Agreement; and
(ii) CNL will promptly notify First Charter of any
customer complaint or notice of any regulatory inspection, inquiry,
investigation or judicial proceeding received by CNL or any representative
with respect to First Charter or its affiliates in connection with any
Contracts distributed under this Agreement or any activity in connection
with any Contracts.
(b) In the case of a customer complaint, CNL and First Charter
will cooperate in investigating such complaint and shall arrive at a
mutually satisfactory response.
10. Exclusivity. The services of CNL hereunder are not to be deemed
exclusive, and CNL shall be free to render similar services to others so
long as its services hereunder are not impaired or interfered with thereby.
11. Benefit. This Agreement shall inure to the benefit of and be
binding upon the successors of the parties hereto.
12. Notices. All notices and other communications provided for
hereunder shall be in writing and shall be delivered by hand or mailed
first class, postage prepaid, addressed as follows:
(a) If to First Charter
First Charter Life Insurance Company
315 Park Avenue South
New York, New York 10010
Attention: W. J. Olvany, Jr.
(b) If to CNL
CNL, Inc.
8301 Maryland Avenue
St. Louis, Missouri 63105
Attention: C. M. Butts, Jr.
or to such other address as First Charter or CNL shall designate by written
notice to the other.
13. Amendment. This Agreement may be amended from time to time by the
mutual agreement and consent of the parties hereto.
14. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
15. Termination. This Agreement shall be effective upon its
execution. It may be terminated at any time by either party hereto on 60
days' written notice to the other party hereto, without the payment of any
penalty. This Agreement shall terminate automatically if it shall be
assigned. Upon termination of this Agreement, all authorizations, rights
and obligations shall cease except (i) the obligation to settle accounts
hereunder, issued pursuant to applications received by First Charter prior
to termination and (ii) the agreements contained in paragraph 9 thereof.
16. Applicable Law. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of New York.
4
<PAGE>
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
shall be deemed one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
(seal)
Attest: FIRST CHARTER LIFE INSURANCE COMPANY
____________________________ By: __________________________
/S/ Vonda Ramsey /S/ William J. Olvany, Jr.
Title: Secretary Title: President
(seal)
Attest: CNL, INC.
____________________________ By: __________________________
/S/ P. M. Frank /S/ Charles M. Butts, Jr.
Title: Secretary Title: President
5
<PAGE>
SCHEDULE A - 1
SCHEDULE OF COMMISSIONS
First Charter shall pay CNL the following commissions with respect to the
Contracts sold as a percentage of premiums received:
SINGLE PREMIUM VARIABLE DEFERRED ANNUITY - 4.75%
Policy Form #P1600
First Charter shall pay CNL the following expense allowance with respect to
the Contracts sold as a percentage of premiums received:
SINGLE PREMIUM VARIABLE DEFERRED ANNUITY - 1.25%
Policy Form #P1600
During the first six months of the contract year, following our receipt of
a premium, 100% of commission and expense allowance is repayable upon
occurrence of a Free Look Return, Cash Surrender or Lapse.
This Schedule of Commissions will take effect on the date shown below.
FIRST CHARTER LIFE INSURANCE COMPANY CNL, INC.
BY __________________________ By: __________________________
/S/ William J. Olvany, Jr. /S/ Charles M. Butts, Jr.
Title: President Title: President
Effective Date: 09/01/89
6
<PAGE>
SCHEDULE A - 2
SCHEDULE OF COMMISSIONS
First Charter shall pay CNL the following commissions with respect to the
Contracts sold as a percentage of premiums received:
FLEXIBLE PREMIUM VARIABLE DEFERRED ANNUITY - 3.5%
Policy Form #S1800
During the first Contract Year, following our receipt of a premium, the
chargeback percentage is 3.0% repayable upon occurrence of any amount
surrendered that reduces the accumulated value below the total premium
paid, a Free Look Return, or Lapse. On each of the next two Contract
Anniversaries, the chargeback percentage decreases by 1.0%. Thereafter,
there is no chargeback.
This Schedule of Commissions will take effect on the date shown below.
FIRST CHARTER LIFE INSURANCE COMPANY CNL, INC.
BY __________________________ By: __________________________
/S/ William J. Olvany, Jr. /S/ Charles M. Butts, Jr.
Title: President Title: President
Effective Date: 09/01/89
7
<PAGE>
SCHEDULE A - 2
SCHEDULE OF COMMISSIONS
First Charter shall pay CNL the following commissions with respect to the
Contracts sold as a percentage of premiums received:
FLEXIBLE PREMIUM VARIABLE DEFERRED ANNUITY
Policy Form #S1800
Commissions payable for contracts issued:
A commission of .5% on new and additional payments. The commission is
payable monthly.
This Schedule of Commissions will take effect on the date shown below.
FIRST CHARTER LIFE INSURANCE COMPANY
BY __________________________
/S/ William J. Olvany, Jr.
Title: President
CNL, INC.
By: __________________________
/S/ Kathleen A. Urbanowicz
Title: Vice President
Effective Date: 01/25/91
8
<PAGE>
FIRST CHARTER LIFE INSURANCE COMPANY
FIRST CHARTER
October 26, 1992
CNL, Inc.
8301 Maryland Avenue
St. Louis, Missouri
Attn: Michael T. Lynch, President
Re: Principal Underwriting Agreement
You are hereby notified of the pending merger of First Charter Life
Insurance Company ("First Charter"), a New York stock life insurance
company, with and into Intramerica Life Insurance Company ("Intramerica"),
a New York stock life insurance company. Intramerica will be the surviving
corporation in the Merger.
The Effective Date of the Merger shall be as of the later of 12:01 a.m.
Eastern Standard Time on October 1, 1992, or the first day of the month
following the receipt by Intramerica of all necessary and appropriate
approvals, assurances, consents, and orders from the Securities and
Exchange Commission ("SEC") or its staff with respect to the merger and any
related transactions.
On the Effective Date of the Merger, Intramerica, as First Charter's
successor, will assume, as a matter of law, all of the contractual
obligations of First Charter with respect to the Principal Underwriting
Agreement, dated September 1, 1989 by and between First Charter, on its own
behalf and on behalf of First Charter Variable Annuity Account, and CNL,
Inc. (the "Agreement"). Furthermore, on the Effective Date of the Merger,
the Intramerica Variable Annuity Account will be the successor to the First
Charter Variable Annuity Account.
This Notice is given in acknowledgment of Section 11 of the Agreement which
states that the Agreement shall inure to the benefit of and be binding upon
the successors of the parties thereto. This Notice is provided to all
parties to the Agreement in accordance with Section 12 of the Agreement.
FIRST CHARTER LIFE INSURANCE COMPANY
BY __________________________________
/S/ ROBERT L. ROBINSON, PRESIDENT
315 PARK AVENUE SOUTH NEW YORK, NEW YORK 10010 1-800-624-2464 212-533-8701
FIRST CHARTER LIFE INSURANCE COMPANY
FIRST CHARTER
October 26, 1992
Scudder Insurance Agency of New York, Inc.
345 Park Avenue
New York, New York 10154-0010
Re: Principal Underwriting Agreement
You are hereby notified of the pending merger of First Charter Life
Insurance Company ("First Charter"), a New York stock life insurance
company, with and into Intramerica Life Insurance Company ("Intramerica"),
a New York stock life insurance company. Intramerica will be the surviving
corporation in the Merger.
The Effective Date of the Merger shall be as of the later of 12:01 a.m.
Eastern Standard Time on October 1, 1992, or the first day of the month
following the receipt by Intramerica of all necessary and appropriate
approvals, assurances, consents, and orders from the Securities and
Exchange Commission ("SEC") or its staff with respect to the merger and any
related transactions.
On the Effective Date of the Merger, Intramerica, as First Charter's
successor, will assume, as a matter of law, all of the contractual
obligations of First Charter with respect to the Principal Underwriting
Agreement, dated September 1, 1989 by and between First Charter, on its own
behalf and on behalf of First Charter Variable Annuity Account, and CNL,
Inc. (the "Agreement"). Furthermore, on the Effective Date of the Merger,
the Intramerica Variable Annuity Account will be the successor to the First
Charter Variable Annuity Account.
This Notice is given in acknowledgment of Section 11 of the Agreement which
states that the Agreement shall inure to the benefit of and be binding upon
the successors of the parties thereto. This Notice is provided to all
parties to the Agreement in accordance with Section 12 of the Agreement.
FIRST CHARTER LIFE INSURANCE COMPANY
BY __________________________________
/S/ ROBERT L. ROBINSON, PRESIDENT
A.MSA
315 PARK AVENUE SOUTH NEW YORK, NEW YORK 10010 1-800-624-2464 212-533-8701
<PAGE>
Exhibit 3 (b)
MARKETING AND SOLICITATION AGREEMENT
AGREEMENT, dated as of August 1,1989 by and among Scudder Fund
Distributors, Inc. ("Scudder"), First Charter Life Insurance Company
("First Charter"), First Charter Variable Annuity Account (the "Variable
Account") and CNL, Inc. ("CNL").
WHEREAS, First Charter has created and plans to sell annuity contracts
bearing a form number of S1800 which will invest in the Scudder Variable
Life Investment Fund and which it will call "Flexible Premium Variable
Deferred Annuities" (the "Contracts"), and the Contracts have been
registered under the Securities Act of 1933 (the "Securities Act"); and
WHEREAS, the Variable Account is a segregated asset account established and
maintained by First Charter pursuant to the laws of the State of New York
and is a unit investment trust registered with the Securities and Exchange
Commission (the "SEC"), and payments under each Contract will be allocated
at the discretion of the owner of the Contract (the "Owner") to one or more
Subaccounts (the "Subaccounts") of the Variable Account; and
WHEREAS, CNL, a broker-dealer registered under the Securities Exchange Act
of 1934 (the "Securities Exchange Act"), is the principal underwriter of
the Contracts and, as such, wishes to retain Scudder, a broker-dealer
registered under the Securities Exchange Act, to advertise and be the sole
agent in connection with the solicitation of applicants to purchase the
Contracts, and Scudder has agreed to advertise and be the sole agent in
connection with the solicitation of applicants to purchase the Contracts.
WHEREAS, First Charter, as the insurance company issuing the Contracts,
wishes to appoint Scudder and its subsidiary ("Scudder Insurance Agency of
New York"), which is licensed or qualified to be licensed as an insurance
agent in New York, to be its insurance agent in connection with the
solicitation of applicants to purchase the Contracts, and Scudder and the
insurance agency subsidiary have agreed to be insurance agents of First
Charter in connection with the solicitation of applicants to purchase the
Contracts.
WHEREAS, Scudder, in its sole discretion, has chosen to fulfill certain of
its responsibilities and obligations under this Agreement by acting through
the insurance agency subsidiaries or other affiliates, and First Charter
and CNL have no objection to this arrangement.
WHEREAS, First Charter and CNL wish to retain Scudder to perform certain
administrative services for First Charter and CNL and Scudder wishes to
perform such services.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration the sufficiency of which is hereby expressly
acknowledged, the parties hereto agree as follows:
1. Appointment of Scudder.
First Charter, as the insurance company hereby appoints Scudder and the
insurance agency subsidiaries to be its insurance agents in New York in
connection with the
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solicitation of applicants to purchase the Contracts and Scudder and the
insurance agency subsidiaries accept such appointment. CNL, as the
principal underwriter for the Contracts, hereby appoints Scudder to be its
sole agent in connection with the solicitation of applicants to purchase
the Contracts and Scudder accepts such appointment.
First Charter and CNL hereby appoint Scudder to provide them with
administrative services (the "Subject Services"). The Subject Services
shall include, but not be limited to, assisting applicants who purchase
Contracts in setting up new accounts, assisting in the preparation of
account statements, reports and other communications with Owners, assisting
in the transferring of funds between mutual funds associated with Scudder
and the Variable Account, and answering customer service inquiries directed
to Scudder.
2. Authority and Duties of Scudder.
For purposes of complying with sections 2.1 and 2.2, Scudder shall include
all subsidiaries of Scudder organized to solicit applicants to purchase the
Contracts.
2.1 Authorization.
Scudder is hereby authorized to solicit applications for the purchase of
the Contracts in New York through direct mail, media advertising and sales
personnel, where Scudder is qualified to do business and, licensed under
New York state insurance laws and New York state securities authorities.
This authorization is exclusive and is limited to the state of New York.
2.2 Licensing of Representatives.
First Charter and CNL shall assist Scudder in fulfilling the insurance
licensing requirements of the state of New York and shall assist Scudder in
the licensing of personnel under New York insurance laws to sell the
Contracts. Scudder shall assume all costs in connection with the licensing
of Scudder or any of its personnel and will reimburse First Charter for any
fees required in the insurance licensing of Scudder or its personnel.
2.3 Applications for Contracts.
All applications for Contracts shall be made on application forms prepared
by First Charter, and shall be sent by the applicants directly to First
Charter. All applications are subject to acceptance or rejection by First
Charter at its sole discretion.
2.4 Prospectuses, Etc.
Scudder shall be provided with prospectuses relating to the Contracts and
such other material as First Charter and Scudder determine between them to
be necessary or desirable for use in connection with sales of the
Contracts. No representations in connection with the sales of the
Contracts, other than those contained in the Prospectus, approved sales
literature, or approved advertising applicable to the Contracts, shall be
made by Scudder or its representatives.
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2.5 Advertising.
Scudder shall be responsible for promoting and advertising the Contracts to
prospective applicants. The amount and types of sales literature and
advertising employed by Scudder, which may but will not necessarily include
brochures, letters, illustrations and other similar materials transmitted
directly to potential applicants or published in print or audio-visual
media, shall be determined by Scudder, but only after consultation with and
subject to written approval by First Charter and CNL, which approval will
not be unreasonably withheld. The sales literature and advertising employed
by Scudder shall not contain any information regarding First Charter, CNL,
the Variable Account or any of their affiliates other than information,
including the prospectus for the Contracts, supplied to Scudder by First
Charter in writing. Scudder shall be responsible for filing with the NASD
any sales literature and advertising employed and agrees to provide First
Charter with copies of all material submitted to the NASD as well as any
NASD comments. First Charter shall be responsible for filing sales and
advertising material with the State of New York, and agrees to provide
Scudder with copies of all comments received from the State of New York
with respect to such material
2.6 Offering Expenses.
Expenses relating to the preparation of the Scudder Variable Life
Investment Fund prospectus will be paid by Scudder. Expenses relating to
the preparation of the Contracts prospectus will be paid by First Charter.
Scudder will pay for the printing of all prospectuses and will be
reimbursed by First Charter for those prospectuses to be delivered to
Owners of the Contracts.
2.7 Confirmations
CNL, as agent for Scudder, will confirm to the applicant in accordance with
Rule 10b-10 under the Securities Exchange Act the initial allocation of
premiums to the Subaccounts, the issuance of the Contract and such other
information required by Rule 10b-10 or administrative interpretations
thereunder. CNL will also notify the applicant that Scudder was the broker-
dealer through which the applicant was solicited and confirm certain
subsequent Contract transactions.
2.8 Maintenance of Books and Records.
First Charter, CNL, the Variable Account and Scudder agree to keep all
records required by federal and state laws, to maintain books, accounts and
records so as to clearly and accurately disclose the precise nature and
details of the transactions, and to assist one another in the timely
preparation of records and reports.
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2.9 Regulatory Matters.
First Charter, CNL, the Variable Account and Scudder shall each submit to
all regulatory and administrative bodies which have jurisdiction over the
Contracts or persons soliciting their purchase any information, reports or
other material required pursuant to applicable laws or regulations.
2.10 Reporting
Each party hereto shall promptly furnish to any other party hereto any
reports and information which such other party may request for the purpose
of meeting reporting and recordkeeping requirements under the insurance
laws of the state of New York and any other state or jurisdiction and under
the federal or state securities laws or the rules of the National
Association of Securities Dealers Inc. (the "NASD").
2.11 Notification of Complaints.
First Charter and CNL shall immediately notify Scudder, and Scudder shall
immediately notify First Charter and CNL, at the address in the notice
provision of this Agreement, of any sales-related or other complaint or
grievance relating to the Contracts or the transactions contemplated herein
which shall come to their attention, and shall promptly reduce such notice
to writing if oral. First Charter, CNL and Scudder shall promptly furnish
to the other party all written materials in connection with any such
complaints or grievances and will cooperate with each other in the
investigation of such complaints or grievances.
2.12 Notification of Regulatory Proceedings.
First Charter shall immediately notify Scudder, at the address in the
notice provision of this Agreement, of (i) the issuance by any regulatory
body of any stop order with respect to the registration statement or any
prospectus relating to the Contracts, (ii) any request by the SEC for any
amendment to such registration statement or any prospectus, or (iii) the
initiation of any proceedings for that purpose or for any other purpose
relating to the registration or offering of the Contracts, and of any other
action or circumstances that may prevent the lawful offer or sale of any of
the Contracts in the state of New York. First Charter will make every
reasonable effort to prevent the issuance of any stop order and if any stop
order is issued, to obtain the lifting thereof at the earliest possible
moment
CNL shall immediately notify Scudder, at the address in the notice
provision of this Agreement, of the issuance by any regulatory body of any
order with respect to the operation or business of CNL, or the initiation
of any proceeding for any purpose relating to the sale of the Contracts,
and of any other actions or circumstances that may prevent the lawful offer
or sale of any of the Contracts in the state of New York.
Scudder shall immediately notify First Charter, at the address in the
notice provision of this Agreement, of the issuance by any regulatory body
of any order with respect to the operation or business of Scudder, or
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the initiation of any proceeding for any purpose relating to the sale of
the Contracts, and of any other actions or circumstances that may prevent
the lawful offer or sale of any of the Contracts in the state of New York.
In addition, Scudder shall promptly advise First Charter if any of its
Telemarketing Personnel are subject to any proceedings or are sanctioned or
suspended by the NASD or any state or other jurisdiction.
2.13 Non-Solicitation.
Neither First Charter nor CNL shall, either while this Agreement is in
force or after its termination, 1). contact applicants for the Contracts
solicited by Scudder for the purpose of inducing them to purchase, other
than the Contract described herein, any of its products or those of their
affiliates; 2). advise or induce Owners of Contracts solicited by Scudder
to surrender their Contracts or advise them to purchase other Contracts
whose subaccounts invest in funds which are not managed by Scudder; 3).
sell or disclose in any manner a list, partial or complete, of the
prospective owners of the Contracts solicited by Scudder or its sales
personnel; except for as follows:
(a) as may be required pursuant to federal or state laws or regulations, or
NASD rules,
(b) as may occur inadvertently rather than as a pattern of conduct,
(c) with Scudder's prior written consent, or
(d) pursuant to an order of the Securities and Exchange Commission
(inducing any action taken pursuant to an undertaking required by such
order).
2.14 Relationship Between the Parties.
First Charter, the Variable Account, CNL and Scudder are independent
contractors. Nothing contained in this Agreement shall create, or shall be
construed to create, the relationship of an employer and employee between
any of First Charter, the Variable Account, CNL and Scudder.
2.15 Violation of Law.
Nothing contained in this Agreement shall require First Charter, CNL, the
Variable Account, Scudder or the Fund to do anything which, in its
judgment, would be a violation of any federal or state law or regulation or
NASD rule applicable to it.
2.16 Consent to Provide Additional Fund Options
While this agreement is in effect and upon mutual consent by First Charter
and Scudder additional Fund options may be made available to Owners of
Contracts solicited by Scudder.
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3. Compensation.
3.1 Compensation Payable to Scudder.
(a) CNL shall pay Scudder compensation attributable to the Contracts, which
shall be equal to 3.0% of each premium payment received by First Charter on
such Contracts. Such amount to be payable within 30 days after the end of
each month.
(b) In the event of a Free-Look Return, Pull Surrender, or Partial
Surrender of an applicable Contract, there shall be a chargeback of the
commission to Scudder. CNL may deduct any such amount from any amount owed
to Scudder. Any such amount owed to CNL by Scudder and not deducted from
amounts owed to Scudder shall be payable within 30 days after written
notice to Scudder.
(c) The amount of the chargeback will be a percentage of the initial
premium and each additional premium, calculated as follows:
(i) From the date of each premium payment to the next Contract
Anniversary, the chargeback percentage is 3.0%.
(ii) On each of the next two (2) Contract Anniversaries, the chargeback
percentage decreases by 1.0%.
(iii) Thereafter, there is no chargeback
(iv) Chargebacks will be applicable to any amount surrendered that reduces
the accumulated value below the total premiums paid.
(v) On partial surrenders, any chargeback will be applied to the premiums
on a first-in, first-out basis.
3.2 Upon Termination.
Scudder shall continue to receive the compensation described in Section 3.1
(a) and 3.1 (b) until this agreement terminates in accordance with
provision 10.2 of this agreement.
Scudder and its affiliates retain all rights, whether created by statute or
common law, to the term "Scudder" and to all trademarks, tradenames,
service marks and other similar rights incorporating the term "Scudder."
First Charter agrees that upon termination of this agreement First Charter
will discontinue the use of the term "Scudder" in the marketing name of the
Contracts described herein.
4. Representations and Warranties of First Charter and CNL.
4.1 Authority.
Each of First Charter, CNL and the Variable Account represents and warrants
to Scudder that it has full power and authority to enter into this
Agreement and that it has all appropriate licenses to carry on its business
as contemplated hereby and First Charter represents that it has full power
and authority to issue the Contracts.
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4.2 Registration Statements, Prospectuses, the Variable Account and CNL.
First Charter represents and warrants to Scudder as follows, with respect
to each Contract
(a) First Charter has filed with the SEC a registration statement under
the Securities Act which has become effective with the SEC (the
"Contracts Registration Statement").
(b) The prospectus and Statement of Additional Information relating to each
Contract contained in the Contracts Registration Statement, including any
supplements or amendments thereto (the "Contracts Prospectus"), contains
all statements and information which are required to be stated therein by
the Securities Act and the Investment Company Act and the rules and
regulations thereunder (the "Regulations") and in all respects conforms to
the requirements thereof, and the Contracts Prospectus does not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that the foregoing representations shall
not apply to information contained in or omitted from the Contracts
Prospectus in reliance upon, and in conformity with, information furnished
to First Charter in writing by Scudder or the Fund specifically for use in
the preparation thereof.
(c) The Variable Account has been duly established and is validly existing
under the Insurance Law of the State of New York and is registered as a
unit investment trust with the SEC.
(d) CNL is registered as a broker-dealer under the Securities Exchange Act
and in such states and other jurisdictions as the business transacted by it
requires, is a member in good standing of the NASD, has obtained any other
approvals, licenses, authorizations, orders or consents which are necessary
to enter into and carry out all transactions contemplated by this
Agreement, and is bonded as required by all applicable laws and
regulations.
5. Representations and Warranties of Scudder
5.1 Authority.
Scudder represents and warrants to First Charter, CNL and the Variable
Account that it has full power and authority to enter into this Agreement.
5.2 Licenses.
Scudder represents and warrants to First Charter, CNL and the Variable
Account that, pursuant to Section 2.1, it has taken all actions in order to
qualify to solicit applicants in the state of New York. That it is
registered as a broker-dealer under the Securities Exchange Act and in the
state of New York and other jurisdictions as the business transacted by it
requires, and is a member in good standing of the NASD, has obtained any
other
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approvals, licenses, authorizations, orders or consents which are necessary
to enter into and carry out all transactions contemplated by this
Agreement, and is bonded as required by all applicable laws and
regulations.
5.3 Qualifications of Sales Personnel.
Scudder represents and warrants to First Charter, CNL and the Variable
Account that each sales personnel receiving compensation for soliciting
applicants for the Contracts or answering customer inquiries will be a
registered representative or principal of Scudder and shall possess a
license to sell life insurance and/or variable contracts and will have
received an appointment or license by or through Scudder insurance agencies
or brokers and, where necessary, through First Charter, and a level of
qualification with the NASD appropriate for the Contracts.
5.4 Representations Upon Assignment.
If Scudder assigns this Agreement as provided in paragraph 11.1 below, the
representations made in paragraphs 5.1 through 5.3 above shall be read to
apply to the affiliate where the context so requires.
6. Indemnification.
6.1 Of Scudder With Respect to the Contracts Prospectus.
First Charter will indemnify and hold harmless Scudder and any insurance
agency or-broker subsidiaries of Scudder organized to sell the Contracts
against any and all losses, claims, damages or liabilities (or actions in
respect thereof), to which Scudder may become subject, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Contracts Prospectus, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; and will reimburse Scudder for any
legal or other expenses reasonably incurred by it in connection with
investigating or defending against such loss, claim, damage, liability or
action in respect thereof; provided, however, that First Charter shall not
be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in the Contracts
Registration Statement or any such amendment or supplement in reliance upon
and in conformity with information furnished in writing by Scudder
specifically for use in the preparation thereof.
First Charter shall not indemnify Scudder for any action where an applicant
for any of the Contracts was not furnished or sent or given, at or prior to
written confirmation of the sale of the Contract, a copy of the appropriate
Contracts Prospectus, or if requested, the related Statement of Additional
Information, and any supplements or amendments to either furnished to
Scudder by First Charter.
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The foregoing indemnities shall, upon the same terms and conditions, extend
to and inure to the benefit of each director and officer of Scudder and any
person controlling Scudder within the meaning of Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act.
6.2 Of First Charter, CNL and the Variable Account With Respect to
the Scudder Variable Life Investment Fund Prospectus.
Scudder will indemnify and hold harmless First Charter against any and all
losses, claims, damages or liabilities (or actions in respect thereof), to
which First Charter may become subject, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Fund Prospectus, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and will reimburse First Charter for any legal or other
expenses reasonably incurred by it in connection with investigating or
defending against such loss, claim, damage, liability or action in respect
thereof.
The foregoing indemnities shall, upon the same terms and conditions, extend
to and inure to the benefit of each director and officer of First Charter
and any person controlling First Charter within the meaning of Section 15
of the Securities Act or Section 20 of the Securities Exchange Act.
6.3 Of First Charter, CNL and the Variable Account With Respect to
Negligence.
Scudder shall indemnify and hold harmless First Charter, CNL and the
Variable Account from any losses, claims, damages or liabilities (or
actions in respect thereof) to which First Charter, CNL or the Variable
Account may become subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or result from
negligent, fraudulent or unauthorized acts or omissions by Scudder, its
employees or principals, including but not limited to negligent, fraudulent
or unauthorized solicitation of applications for the Contracts, except as
stated herein.
The foregoing indemnities shall, upon the same terms and conditions, extend
to and inure to the benefit of each director and officer of First Charter,
CNL and the Variable Account and any person controlling First Charter, CNL
and the Variable Account within the meaning of Section 15 of the Securities
Act or Section 20 of the Securities Exchange Act.
6.4 Of Scudder With Respect to Negligence.
First Charter shall indemnify and hold harmless Scudder against any losses,
claims, damages or liabilities (or actions in respect thereof) to which
Scudder may become subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or result
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from negligent, fraudulent or unauthorized acts or omissions by First
Charter, CNL or the Variable Account or the employees of any of them.
The foregoing indemnities shall, upon the same terms and conditions, extend
to and inure to the benefit of each director and officer of Scudder and any
person controlling Scudder within the meaning of Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act.
6.5 Of Scudder with Respect to the Contracts.
First Charter shall indemnify and hold harmless Scudder against any losses,
claims, damages or liabilities (or actions in respect thereof) to which
Scudder may become subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or result from
First Charter's performance of, or failure to perform, its duties under the
Contracts or First Charter's alleged performance, or alleged failure to
perform, its duties under the Contracts.
6.6 Notice of Actions.
Promptly after receipt by an indemnified party of notice of the
commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may otherwise have to any indemnified party otherwise than on
account of its indemnity agreement contained in this paragraph. In case any
such action shall be brought against any indemnified party, and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in, and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party). After notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
7. Regulations.
All parties agree to observe and comply with the existing laws and rules or
regulations of applicable local, state, or federal regulatory authorities
and with those which may be enacted or adopted during the term of this
Agreement regulating the business contemplated hereby in any jurisdiction
in which the business described herein is to be transacted.
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8. Suitability.
CNL will require that the applicant complete the Financial Questionnaire,
Form B 1601 for premium amounts in excess of $250,000. CNL may, at its sole
discretion, require Form B 1601 for lesser amounts.
9. Non-Exclusivity.
The services of Scudder, First Charter, and CNL hereunder are not to be
deemed exclusive, and each party shall be free to render similar services
to others so long as its services hereunder are not impaired or interfered
with thereby. First Charter, CNL, and Scudder agree that none of the
parties to this agreement have any property rights as to marketing approach
or product design.
10. Effectiveness and Termination.
10.1 Effectiveness.
This Agreement shall be effective upon execution by the parties and will
remain in effect unless terminated as provided in paragraph 10.2,10.3, or
1.1 below.
10.2 Termination.
This Agreement may be terminated by either First Charter or Scudder at any
time by ninety (90) days written notice to the other.
10.3 Termination for Cause.
In the event of any material breach (as defined in paragraphs 10.4 and 10.5
below) of this Agreement by any party, the aggrieved party may, at its
option, terminate this Agreement by giving notice of termination, effective
upon the date specified in such termination notice. This remedy shall be in
addition to any other remedies available under this Agreement or at law.
10.4 Material Breach by First Charter, CNL or the Variable
Account.
First Charter, CNL and the Variable Account shall be deemed to have
materially breached this Agreement and failed to perform hereunder upon the
occurrence of any of the following events:
(a) First Charter, CNL or the Variable Account shall become insolvent
or otherwise admit in writing its inability to pay its debts when
they become due, become bankrupt, seek protection under any law
for the protection of insolvency, or have a receiver or conservator
appointed for it under any law pertaining to the insolvency of First
Charter, CNL or the Variable Account; or
(b) First Charter, CNL or the Variable Account shall breach any material
provision of this Agreement and such breach shall remain uncured for more
than thirty (30) days following First Charter's receipt of Scudder's
written notice of such breach.
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10.5 Material Breach by Scudder.
Scudder shall be deemed to have materially breached this Agreement and
failed to perform hereunder upon the occurrence of any of the following
events:
(a) Scudder shall become insolvent or otherwise admit in writing its
inability to pay its debts when they become due, become bankrupt, seek
protection under any law for the protection of insolvents, or have a
receiver or conservator appointed for it under any law pertaining to the
insolvency of Scudder; or
(b) Scudder shall breach any material provision of this Agreement and such
breach shall remain uncured for more than thirty (30) days following
Scudder's receipt of First Charter's written notice of such breach.
10.6 Survival Provisions.
Upon termination of this Agreement, the provisions of the following shall
survive:
(a) paragraphs 2.10, 2.11, 2.12, and 2.13
(b) Sections 4, 5 and 6,
(c) this paragraph 10.6, and
(d) Section 11.
11. Miscellaneous.
11.1 Benefit.
This Agreement shall be binding on and shall inure to the benefit of the
parties to it and their respective successors and assigns, provided that
neither Scudder nor First Charter may assign this Agreement or any rights
or obligations hereunder (except to an affiliate in order to comply with
applicable laws or regulations) and this Agreement will terminate
automatically in the event of a purported assignment by either such party.
If this Agreement is assigned to an affiliate as permitted herein, the
assignor shall not be relieved of its obligations hereunder.
11.2 Notices.
All notices and other communications provided for hereunder shall be in
writing and shall be delivered by hand or mailed first class, postage
prepaid, addressed as follows:
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(a) If to First Charter:
First Charter Life Insurance Company
315 Park Avenue South
New York, New York 10010
(b) If to CNL:
CNL, Inc.
8301 Maryland Avenue
St. Louis, Missouri 63105
(c) If to the Variable Account
First Charter Variable Annuity Account
315 Park Avenue South.
New York, New York 10010
(d) If to Scudder:
Scudder Funds Distributors, Inc.
175 Federal Street
Boston, Massachusetts 02110
or to such other address as First Charter, CNL, the Variable Account or
Scudder shall designate by written notice to the others.
11.3 Limitations.
No party other than First Charter shall have the authority on behalf of
First Charter to make, alter, or discharge any Contract issued by First
Charter; to waive any forfeiture or to grant or permit any extension of
time for making any premium payments; to alter the forms which First
Charter may prescribe or to substitute other forms in place of those
prescribed by First Charter; or to enter into any proceeding in a court of
law or before a regulatory agency in the name of or on behalf of First
Charter.
11.4 Waiver.
Failure of any party to insist upon strict compliance with any of the
conditions of this Agreement shall not be construed as a waiver of any of
the conditions, but the same shall remain in full force and effect. No
waiver of any of the provisions of this Agreement shall be deemed to or
shall constitute a waiver of any other provisions, whether or not similar,
nor shall any waiver constitute a continuing waiver.
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11.5 Applicable Law.
This Agreement and the rights and obligations of the parties created hereby
shall be construed in accordance with the laws of the State of New York.
11.6 Enforceability.
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall
not be affected thereby.
11.7 Entire Agreement.
The parties declare that there are no other oral or other agreements or
understandings among them affecting this Agreement or relating to the
selling or servicing of the Contracts, except as disclosed herein. This
Agreement supersedes all prior agreements among the parties and constitutes
the entire Agreement among the parties.
This Agreement may be modified only if in writing and if executed by those
persons authorized to enter into Agreements on behalf of the parties
hereto.
11.8 Miscellaneous.
The headings in this Agreement are for purposes of reference only and shall
not limit or define the meaning hereof.
This Agreement may be executed in several counterparts, each of which is an
original, but all of which together shall constitute one instrument.
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IN WITNESS, the parties hereto have caused this Agreement to be executed in
their names and on their behalf by and through their duly authorized
officers as of the date first above written.
SCUDDER FUND DISTRIBUTORS, INC.
By: _____________________________
/S/ David S. Lee
President
FIRST CHARTER LIFE INSURANCE COMPANY
By _______________________________
/S/ William J. Olvany, Jr.
President
CNL, Inc.
By: ______________________________
/S/ Charles M. Butts, Jr.
President
FIRST CHARTER VARIABLE ANNUITY ACCOUNT
By: FIRST CHARTER LIFE INSURANCE
COMPANY
By: ______________________________
/S/ William J. Olvany, Jr.
President
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FIRST CHARTER LIFE INSURANCE COMPANY
FIRST CHARTER
October 26, 1992
CNL, Inc.
8301 Maryland Avenue
St. Louis, Missouri
Attn: Michael T. Lynch, President
Re: Marketing and Solicitation Agreement
You are hereby notified of the pending merger of First Charter Life
Insurance Company ("First Charter"), a New York stock life insurance
company, with and into Intramerica Life Insurance Company ("Intramerica"),
a New York stock life insurance company. Intramerica will be the surviving
corporation in the Merger.
The Effective Date of the Merger shall be as of the later of 12:01 a.m.
Eastern Standard Time on October 1, 1992, or the first day of the month
following the receipt by Intramerica of all necessary and appropriate
approvals, assurances, consents, and orders from the Securities and
Exchange Commission ("SEC") or its staff with respect to the merger and any
related transactions.
On the Effective Date of the Merger, Intramerica, as First Charter's
successor, will assume, as a matter of law, all of the contractual
obligations of First Charter with respect to the Marketing and Solicitation
Agreement, dated as of October 25, 1989 by and among Scudder Insurance
Agency of New York, Inc., First Charter, First Charter Variable Annuity
Account, and CNL, Inc., as amended January 25, 1991 (the "Agreement").
Furthermore, on the Effective Date of the Merger, the Intramerica Variable
Annuity Account will be the successor to the First Charter Variable Annuity
Account.
This Notice is given in acknowledgment of Section 11.1 of the Agreement
which states that the Agreement shall be binding on and shall inure to the
benefit of the parties to it and their respective successors and assigns.
This Notice is provided to all parties to the Agreement in accordance with
Section 11.2 of the Agreement.
FIRST CHARTER LIFE INSURANCE COMPANY
BY __________________________________
/S/ ROBERT L. ROBINSON, PRESIDENT
315 PARK AVENUE SOUTH NEW YORK, NEW YORK 10010 1-800-624-2464 212-533-8701
INTRAMERICA LIFE INSURANCE COMPANY
UNANIMOUS CONSENT OF THE
EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS
The undersigned, being a member of the Executive Committee of Intramerica
Life Insurance Company, hereby waives notice and the holding of a meeting,
and consents to the adoption of the following resolution, to have the same
force and effect as if adopted at a meeting duly called and held on
September 15, 1982:
RESOLVED, that Intramerica Life Insurance Company does hereby establish two
separate accounts, with such sub-accounts as the officers of the Company
may deem appropriate, designated Intramerica Life Insurance Company
Separate Account No. 1 and Intramerica Life Insurance Company Separate
Account No. 2, respectively (collectively referred to as the "Separate
Accounts") or such other names as the officers of the Company deem
appropriate, for the uses and purposes, and subject to the conditions set
forth below;
FURTHER RESOLVED, that the Separate Accounts are established for the
purpose of providing for the issuance of both individual and group variable
and fixed annuity contracts (the "Contracts") which will provide that part
or all of the payments and benefits will reflect the investment experience
of Separate Account No. 1 and Separate Account No. 2, respectively. Any
such separate account shall receive, hold, invest and reinvest only the
monies arising from (i) premiums, contributions or payments made pursuant
to the variable and fixed annuity contracts participating therein; (ii)
such assets of the Company as shall be deemed appropriate to be invested in
the same manner as the assets applicable to the Company's reserve liability
under the variable and fixed annuity contracts participating in such
separate accounts; or as may be necessary for the establishment of such
separate accounts; (iii) the dividends, interest and gains produced by the
foregoing;
FURTHER RESOLVED, that the officers of the Company be, and that they hereby
are, authorized and empowered to take any and all action necessary or
appropriate to (a) register the Contracts under the Securities Act of 1933
in such amounts as the officers of the Company shall from time to time deem
appropriate; and (b) take any and all other action necessary or desirable
to comply with the Securities Act of 1933, the Securities Exchange Act of
1934, the Investment Company Act of 1940, and all other applicable state
and federal laws in connection with the offering of said Contracts and the
operation of the Separate Accounts;
FURTHER RESOLVED, that the officers of the Company be, and that they hereby
are, authorized and empowered to perform all such acts and do all such
things as may in their judgment and discretion be necessary or
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Page 2
desirable to give full effect to these resolutions and the intent and
purpose of the same so as to enable the Company to establish and operate
the Separate Accounts and issue variable annuity contracts, including,
without limitation: (a) determining voting and other rights and procedures
for the conduct of the business of the Separate Accounts, including,
without limitation, rights and procedures relating to investment policy,
investment advisory services, selection of independent accountants and the
selection of a management committee; (b) the preparing and executing of
service agreements, underwriting agreements, custodian agreements,
investment advisory agreements and such other agreements and documents
respecting such Separate Accounts as they may deem necessary or desirable;
(c) determining the terms and conditions of the contracts being authorized;
and (d) determining the jurisdictions in which appropriate action shall be
taken to obtain the requisite qualification, registration and/or
authorization for the sale of such Contracts.
IN WITNESS WHEREOF, the undersigned has executed these presents as of the
15th day of September, 1982.
Member of the Executive Committee
RB#5-j
DECLARATION OF INTENTION AND CHARTER
OF
INTRAMERICA LIFE INSURANCE COMPANY
We, the undersigned, being natural persons of full age and at least two-
thirds of us citizens of the United States and residents of the State of
New York, hereby declare our intention to form a corporation for the
purpose of doing the kinds of insurance business authorized by paragraphs
1, 2 and 3 of Section 46 of the Insurance Law of the State of New York, and
for that purpose do adopt the following Charter, to wit:
CHARTER
Section 1. The name of the corporation shall be INTRAMERICA LIFE
INSURANCE COMPANY.
Section 2. The principal office of this company shall be located in the
county and state of New York.
Section 3. The kinds of insurance to be transacted by this corporation
shall be,
"Life Insurance", meaning, pursuant to Paragraph 1 of Section 46 of the
Insurance Law, every insurance upon the lives of human begins and every
insurance appertaining thereto. The business of life insurance shall be
deemed to include the granting of endowment benefits; additional benefits in
the event of death by accident or accidental means; additional benefits
operating to safeguard the contract from lapse, or to provide a special
surrender value, in the event of total and permanent disability of the
insured; and optional modes of settlement of proceeds.
<PAGE>
"Annuities", meaning, pursuant to paragraph 2 of Section 46 of the
Insurance Law, all agreements to make periodical payments where the making or
continuance of all or some of a series of such payments, or the amount of any
such payment, is dependent upon the continuance of human life, except payments
made under the authority of paragraph one.
"Accident and health insurance", meaning, pursuant to Paragraph 3 of
Section 46 of the Insurance Law,
(a) Insurance against death or personal injury by accident or by any
specified kind or kinds of accident and insurance against sickness, ailment
or bodily injury, including insurance providing disability benefits
pursuant to article nine of the workmen's compensation law, except as
specified in subparagraph (b) following; and
(b) Non-cancellable disability insurance, meaning insurance against
disability resulting from sickness, ailment or bodily injury, (but not
including insurance solely against accidental injury) under any contract
which does not give the insurer the option to cancel or otherwise terminate
the contract at or after one year from its effective date or renewal date.
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<PAGE>
Section 4. The mode and manner in which the corporate powers of this
corporation shall be exercised are through a board of directors and
committees thereof and through such officers and agents as such board shall
empower.
Section 5. The number of directors of this corporation shall be not more
than 21, and in no cases shall the number of directors be less than 13, and
the manner of determining the exact number of directors shall be as
specified in the by-laws of the corporation.
Section 6. The directors of the corporation shall be elected at the
annual meeting of stockholders of the corporation.
The annual meeting of the stockholders of the corporation shall be held on
the first Wednesday of June in each and every year, or if such first
Wednesday of June in any year be a legal holiday, then the next succeeding
business day. At such annual meeting directors shall be elected for the
ensuing year, the directors to take office immediately upon election and to
hold office until the next annual meeting and until their successors are
elected. At each annual meeting, each stockholder of record on the books
of the corporation, who shall have held his shares in his own name for at
least 30 days prior to the meeting, shall be entitled to one vote in person
or by proxy for each share of stock so held by him. Directors shall be
chosen and elected by plurality of the whole number of shares voted at the
meeting.
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<PAGE>
Whenever any vacancies shall occur in the board of directors by death,
resignation or removal otherwise, the remaining members of the board, at a
meeting called for that purpose, or at any regular meeting, shall elect a
director or directors to fill the vacancies thus occasioned, and each
director so elected shall hold office for the unexplored term of the
director whose place he has taken.
Section 7. At all times a majority of the directors of this corporation
shall be citizens and residents of this State or of adjoining states, and
not less than three thereof shall be residents of the State. Each director
shall be at least 21 years of age.
Section 8. The names and post office residence addresses of the
directors, who shall serve until the first annual meeting of this
corporation, shall be:
CLARENCE B. JONES
5505 Independence Avenue
Bronx, New York
GEORGE D. BROOKS
726 Nostrand Avenue
Brooklyn, New York
RANDOLPH W. CAMERON
35-37 Paulding Avenue
Bronx, New York
JOHN DREW
1108 North Center Street
Birmingham, Alabama
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<PAGE>
BERNARD D. FISCHMAN
115 Central Park West
New York, New York
ADOLPH KOEPPEL
633 Chelsea Road
Oceanside, New York
IRVING I. LESMICK
231-16 - 125th Street
Laurelton, New York
GODFREY H. MURRAIN
195-07 100th Avenue
Hollis, New York
BURTON PIERCE
3500 Fieldston Road
Bronx, New York
WILLIAM ROWE
1 Fenimore Road
New Rochelle, New York
THEODORE STENT
6015 Independence Avenue
Bronx, New York
WYATT TEE WALKER
52 Delaware Road
Yonkers, New York
Section 9. The duration of the corporate existence of this corporation
shall be perpetual.
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<PAGE>
Section. 10. The amount of the authorized capital of the corporation shall
be Six Hundred Thousand Dollars ($600,000) to consist solely of shares of
common stock at $1.00 par value each.
Section. 11. The board of directors, at a meeting held at any time prior
to the first annual meeting of the members, and thereafter at its annual
meeting, which shall be held immediately after the annual meeting of the
members, shall elect from its own number a President, a Secretary and a
Treasurer, and if any at its option at any time appoint or elect such other
officers as shall be provided in the by-laws. In case a quorum is not
present at such meeting, the same shall be adjourned to another day by the
directors present. Officers elected by the board shall respectively hold
office at the pleasure of the board of directors or until the next annual
meeting and until their successors are chosen and have qualified. Other
officers shall serve at the pleasure of the board unless otherwise provided
in the by-laws. Vacancies in the elective offices occurring in the
interval between annual meetings may be filled at any time by the board of
directors and a person so selected shall hold office at the please of the
board of directors or until his successor is chosen and has qualified. One
person may hold two or more offices if it shall be so provided in the by-
laws.
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<PAGE>
Section 12. No stockholder of this corporation shall henceforth have a pre-
emptive right because of his stock holdings to have first offered to him
any part of any stock of this corporation, hereafter issued, optioned or
sold, or any part of any debentures, bonds and securities of this
corporation convertible into stock (hereinafter called "securities")
hereafter issued, optioned or sold by the corporation. Thus, any and all
of the stock of this corporation presently authorized, and any and all of
the stock and securities of this corporation which may be hereafter
authorized, may at any time be issued, optioned and contracted for sale,
and/or sold and disposed of by direction of the directors of this
corporation to such persons, and upon such terms and conditions as may to
the directors seem proper and advisable without first offering the said
stock or securities or any part thereof to the holders of stock, securities
or obligations of the corporation
IN WITNESS WHEREOF, we have hereunto subscribed our names this 15th day of
February 1965.
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<PAGE>
S/ CLARENCE B. JONES
CLARENCE B. JONES
S/ GEORGE D. BROOKS
GEORGE D. BROOKS
S/ RANDOLPH W. CAMERON
RANDOLPH W. CAMERON
S/ JOHN DREW
JOHN DREW
S/ BERNARD D. FISCHMAN
BERNARD D. FISCHMAN
S/ D. PARKE GIBSON
D. PARKE GIBSON
S/ ADOLPH KOEPPEL
ADOLPH KOEPPEL
S/ IRVING I. LESNICK
IRVING I. LESNICK
S/ GODFREY H. MURRAIN
GODFREY H. MURRAIN
S/ BURTON PIERCE
BURTON PIERCE
S/ WILLIAM E. ROWE
WILLIAM E. ROME
S/ THEODORE STENT
THEODORE STENT
S/ WYATT TEE WALKER
WYATT TEE WALKER
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<PAGE>
STATE OF NEW YORK)
COUNTY OF NEW YORK) ss.:
On the 12 day of January, 1965, before me personally came
CLARENCE B. JONES
to me known, and known to me to be the same person described in and who
executed the foregoing Declaration of Intention and Charter and
acknowledged that he executed the same.
S/HAROLD D. KOZUPSKY
Notary Public, State of New York
No. 30-7348825
Qualified in Nassau County
Commission Expires March 30, 1966
STATE OF NEW YORK)
COUNTY OF NEW YORK) ss.:
On the 14 day of January, 1965, before me personally came
GEORGE BROOKS
to me known, and known to me to be the same person described in and who
executed the foregoing Declaration of Intention and Charter and
acknowledged that he executed the same.
S/WHARTON Y. BRANDON
Notary Public, State of New York
No. 31-5425125
Qualified in New York County
Commission Expires March 30, 1966
STATE OF NEW YORK)
COUNTY OF NEW YORK) ss.:
On the 23 day of January, 1965, before me personally came
RANDOLPH W. CAMERON
to me known, and known to me to be the same person described in and who
executed the foregoing Declaration of Intention and Charter and
acknowledged that he executed the same.
S/HERMAN SCHWARTZ
Notary Public, State of New York
No. 03-8872790
Qualified in Bronx County
Commission Expires March 30, 1966
STATE OF ALABAMA)
COUNTY OF JEFFERSON) ss.:
On the 23 day of January, 1965, before me personally came
JOHN DREW
to me known, and known to me to be the same person described in and who
executed the foregoing Declaration of Intention and Charter and
acknowledged that he executed the same.
S/LUCY A. DICKERSON PINKARD
Notary Public
My Commission Expires July 12, 1966
[SEAL]
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<PAGE>
STATE OF NEW YORK)
COUNTY OF NEW YORK) ss.:
On the 19 day of January, 1965, before me personally came
BERNARD D. FISCHMAN
to me known, and known to me to be the same person described in and who
executed the foregoing Declaration of Intention and Charter and
acknowledged that he executed the same.
S/AMOR PRADO
Notary Public, State of New York
No. 24-3152325
Qualified in Kings County
Cert.filed with N.Y. County Cl
Commission Expires March 30, 1966
STATE OF NEW YORK)
COUNTY OF NEW YORK) ss.:
On the 23 day of January, 1965, before me personally came
D. PARKE GIBSON
to me known, and known to me to be the same person described in and who
executed the foregoing Declaration of Intention and Charter and
acknowledged that he executed the same.
S/HERMAN SCHWARTZ
Notary Public, State of New York
No. 30-8872790
Qualified in Bronx County
Commission Expires March 30, 1966
STATE OF NEW YORK)
COUNTY OF NASSAU) ss.:
On the 15 day of February, 1965, before me personally came
ADOLPH KOEPPEL
to me known, and known to me to be the same person described in and who
executed the foregoing Declaration of Intention and Charter and
acknowledged that he executed the same.
S/HELENE B. ROCHE
Notary Public, State of New York
No. 30-3315060
Qualified in Nassau County
Term Expires March 30, 1966
STATE OF NEW YORK)
COUNTY OF NASSAU) ss.:
On the 11 day of January, 1965, before me personally came
IRVING I. LESNICK
to me known, and known to me to be the same person described in and who
executed the foregoing Declaration of Intention and Charter and
acknowledged that he executed the same.
S/ADRIEN E. LAURENCELLE, JR
Notary Public, State of New York
No. 30-7442150
Qualified in Nassau County
Commission Expires March 30, 1966
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<PAGE>
STATE OF NEW YORK)
COUNTY OF NEW YORK) ss.:
On the 19 day of January, 1965, before me personally came
GODFREY H. MURRAIN
to me known, and known to me to be the same person described in and who
executed the foregoing Declaration of Intention and Charter and
acknowledged that he executed the same.
S/DAVID G. LUBELL
Notary Public, State of New York
No. 60-7611865
Qualified in Westchester County
Commission Expires March 30, 1966
STATE OF NEW YORK)
COUNTY OF BRONX) ss.:
On the 2 day of February, 1965, before me personally came
BURTON PIERCE
to me known, and known to me to be the same person described in and who
executed the foregoing Declaration of Intention and Charter and
acknowledged that he executed the same.
S/JULIUS H. FIORILLO
Notary Public, State of New York
No. 03-1222000
Qualified in Bronx County
Commission Expires March 30, 1966
STATE OF NEW YORK)
COUNTY OF NEW YORK) ss.:
On the 18 day of January, 1965, before me personally came
WILLIAM ROWE
to me known, and known to me to be the same person described in and who
executed the foregoing Declaration of Intention and Charter and
acknowledged that he executed the same.
S/ABRAHAM WILKENFELD
Notary Public, State of New York
No. 41-0672200
Qualified in Queens County
Term Expires March 30, 1966
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<PAGE>
STATE OF NEW YORK)
COUNTY OF BRONX) ss.:
On the 18 day of January, 1965, before me personally came
THEODORE STENT
to me known, and known to me to be the same person described in and who
executed the foregoing Declaration of Intention and Charter and
acknowledged that he executed the same.
S/ CLARENCE B. JONES
Notary Public, State of New York
No. 03-1993078
Qualified in Bronx County
Commission Expires March 30, 1966
STATE OF NEW YORK)
COUNTY OF WESTCHESTER) ss.:
On the 29 day of January, 1965, before me personally came
WYATT TEE WALKER
to me known, and known to me to be the same person described in and who
executed the foregoing Declaration of Intention and Charter and
acknowledged that he executed the same.
S/ALLEN KNABLE
Notary Public, State of New York
No. 60-7309230
Qualified in Westchester County
Term Expires March 30, 1966
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<PAGE>
Exhibit 6(b)
BY-LAWS
INTRAMERICA LIFE INSURANCE COMPANY
AS AMENDED AND RESTATED
AUGUST 31, 1992
ARTICLE I.
MEETINGS OF STOCKHOLDERS
SECTION 1. Annual Meetings. The annual meeting of the stockholders shall
be held on a date as shall be fixed each year by the Board of Directors or
President. If in any year the Board of Directors or President does not fix
a date for the annual meeting, it shall be held on the last business day in
April in such year.
SECTION 2. Special Meetings. Special meetings of stockholders for any
purpose may be called by the Board of Directors or President and shall be
called by the President or Secretary at the written request of the holders
of record of a majority of the outstanding shares of the corporation
entitled to vote at such meeting. Special meetings shall be held, at such
time as may be fixed in the call and stated in the notice of meeting or
waiver thereof. At any such special meeting only such business may be
transacted as is related to the purposes set forth in the notice of
meeting.
SECTION 3. Place of Meetings. Meetings of stockholders' shall be held at
such place, within or without the State of New York, as may be fixed in the
call and notice of meeting or waiver thereof.
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SECTION 4. Notice of Meetings. Notice of each meeting of stockholders
shall be given in writing and shall state the place, date and hour of the
meeting and, in the case of special meetings, (i) the purpose or purposes
for which the meeting is called and (ii) at whose direction the notice is
being issued.
A copy of the notice of any meeting shall be given, personally or by mail,
not less than ten (10) nor more than fifty (50) days before the date of the
meeting, to each stockholder entitled to vote at such meeting.
SECTION 5. Waiver of Notice. Notice of any meeting need not be given to
any stockholder who submits a signed waiver of notice, in person or by
proxy, whether before or after the meeting. The attendance of any
stockholder at a meeting, in person or by proxy, without protesting prior
to the conclusion of the meeting the lack of notice of such meeting, shall
constitute a waiver of notice by him.
SECTION 6. Qualification of Voters. Except as may be otherwise provided
in the Charter, every stockholder of record shall be entitled at every
meeting of stockholders to one vote for every share standing in his or her
name on the record of stockholders of the corporation.
Stocks of the corporation standing in the name of another domestic or
foreign corporation of any type or kind may be voted by such officer, agent
or proxy as the by-laws or similar regulations of such corporation may
provide, or in the absence of such provision, as the Board of Directors of
such corporation may determine.
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SECTION 7. Quorum. At any meeting of the stockholders the presence, in
person or by proxy, of the holders of a majority of the stocks entitled to
vote thereat shall constitute a quorum for the transaction of any business.
When a quorum is once present to organize a meeting, it is not broken by
the subsequent withdrawal of any stockholders.
The stockholders present may adjourn the meeting despite the absence of a
quorum.
SECTION 8. Proxies. Every stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent without a meeting may authorize
another person or persons to act for him by proxy.
Every proxy must be signed by the stockholder of record or his or her
attorney-in-fact. No proxy shall be valid after the expiration of eleven
(11) months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the stockholder executing
it, except as otherwise provided therein and as permitted by law.
SECTION 9. Voting. Directors shall be elected by a plurality of the votes
cast at a meeting of stockholders by the holders of stocks entitled to vote
in the election.
Whenever any corporate action, other than the election of directors, is to
be taken by vote of the stockholders, it shall, except as other required by
law, be authorized by a majority of the votes cast thereat in person or by
proxy.
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<PAGE>
SECTION 10. Consents. Whenever the stockholders are required or permitted
to take any action by vote, such action may be taken without a meeting by a
written consent, setting forth the action so taken, signed by the holders
of all outstanding stocks entitled to vote thereon.
ARTICLE II.
BOARD OF DIRECTORS
SECTION 1. Power of Board and Qualification of Directors.
The business of the corporation shall be managed by the Board of Directors,
each of whom shall be at least eighteen (18) years of age and not less than
three (3) of whom shall be residents of New York State. At all times a
majority of the directors shall be citizens and residents of the United
States. AT all times at least a third of the directors must be persons who
are not officers or employees of the corporation or of any entity
controlling, controlled by or under common control with the corporation and
who are not beneficial owners of a controlling interest in the voting stock
of the corporation or any such entity ("Non-Affiliated directors").
SECTION 2. Number of Directors.- The number of directors constituting the
entire Board of Directors shall be a number which is not less than thirteen
(13) no more than twenty-one (21) as may be fixed from time to time by
resolution adopted by the majority of the Board.
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<PAGE>
SECTION 3. Election and Term of Directors. At each annual meeting of
stockholders, all directors shall be elected for the ensuing year, the
directors to take office immediately upon election and to hold office until
the next annual meeting and until their successors have been elected and
qualified.
Notice of election shall have been filed in the office of the
Superintendent of Insurance at least ten (1) days before the day of any
meeting at which an election of directors will be held.
SECTION 4. Resignations. Any director of the corporation may resign at
any time by giving written notice to the Board of Directors or to the
president or to the Secretary of the corporation. Such resignation shall
take effect at the time specified therein; and unless otherwise specified
therein the acceptance of such resignation shall not be necessary to make
it effective.
SECTION 5. Removal of Directors. Any or all of the directors may be
removed with or without cause by vote of the stockholders.
SECTION 6. Newly Created Directorships and Vacancies. Newly created
directorships resulting from an increase in the number of directors and all
vacancies occurring in the Board of Directors by death, resignation,
removal or otherwise, including the removal of directors without cause,
shall be filled by vote of remaining members of the Board at a meeting
called for that purpose or at any regular meeting, although less than a
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<PAGE>
quorum exists, provided, however, that no director so elected shall take
office until ten (10) days after written notice of his election shall have
been filed in the Office of the Superintendent of Insurance of the State of
New York. Each director so elected to fill the vacancy shall hold office
for the unexpired term of the director whose place he or she has taken. A
director elected to fill a newly created directorship shall serve until the
next annual meeting of stockholders, and until his other successor has been
elected and qualified.
SECTION 7. Executive and Other Committees of Directors. The Board of
Directors, by resolution adopted by a majority of the entire Board, may
designate from among its members an executive committee and such other
committees as they may deem necessary or appropriate to serve at the
pleasure of the Board of Directors, each consisting of five (5) or more
directors, and each of which, to the extent provided in the resolution and
permitted by law, shall have all the authority of the Board.
The Board of Directors shall establish one or more committees comprised
solely of Non-Affiliated Directors. Such committee or committees shall
have responsibility for (i) recommending the selection of independent
certified public accountants, (ii) reviewing the corporation's financial
condition, the scope and results of the independent audit and any internal
audit, (iii) nominating candidates for director for election by the
stockholders of the corporation, (iv) evaluating the performance of
officers deemed by such committee or committees to be principal officers of
the corporation and (v) recommending to the Board the selection and
compensation of such officers.
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<PAGE>
Three members shall constitute a quorum of any committee of the Board of
Directors. Not less than one-third of the members of any committee shall
be Non-Affiliated Directors.
The Board of Directors may designate one (1) or more directors as alternate
members of any committee who may replace any absent member or members at
any meeting of such committee.
SECTION 8. Compensation of Directors. The Board of Directors shall vote
and have authority to fix the compensation of directors for services in any
capacity, or to allow a fixed sum plus expenses, if any, for attendance at
meetings of the Board of committees of directors. No director who is also
an officer shall receive compensation for services as a director.
ARTICLE III.
MEETINGS OF THE BOARD
SECTION 1. Regular Meetings. Regular meetings of the Board of Directors
may be held without notice at such times and places, within or without the
State of New York, as may from time to time be fixed y the Board. Officers
shall be elected annually at a regular meeting of the Board of Directors to
be held immediately following each annual meeting of the stockholders. The
Board shall hold at least one regular meeting each year.
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<PAGE>
SECTION 2. Special Meetings; Notice; Waiver. Special meetings of the
Board of Directors may be held at any time and place, within or without the
State of New York upon the call of the Board of Directors or the President
by oral, telegraphic or written notice, duly given to or sent or mailed to
each director not less than one (1) day before such meeting. Special
meetings shall be called by the President on the written request of any two
(2) directors.
Notice of a special meeting need not be given to any director who submits a
signed waiver of notice whether before or after the meeting, or who attends
the meeting without protesting, prior thereto or at its commencement, the
lack of notice to him or to her.
A notice, or waiver of notice, need not specify the purpose of any special
meeting of the Board of Directors
SECTION 3. Quorum; Action by the Board; Adjournment. At all meetings of
the Board of Directors, a majority of the entire Board shall constitute a
quorum for the transaction of business. At least one (1) Non-Affiliated
Director must be included in any quorum for the transaction of business at
any meeting of the Board or of any committee thereof.
The vote of a majority of the directors present at the time of the vote, if
a quorum is present at such time, shall be the act of the Board.
A majority of the directors present, whether or not a quorum is present,
may adjourn any meeting to another time and place.
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<PAGE>
SECTION 4. Action Without a Meeting. When time is of the essence and
provided the action to be taken is not to be a substitute for a regular
meeting, any action required or permitted to be taken by the Board or any
committee thereof may be taken without a meeting if all members of the
Board or the committee consent in writing to the adoption of a resolution
authorizing the action, and such resolution and the written consent thereto
by the members of the Board or the committee shall be filed with the
minutes of the proceedings of the Board or committee.
SECTION 5. Conference Telephone. Any one or more members of the Board or
any committee thereof may participate in a meeting of such Board or
committee by means of a conference telephone or similar communication
equipment allowing all persons participating in the meeting to hear each
other at the same time. Participation by such means shall constitute
presence in person at a meeting.
ARTICLE IV.
OFFICERS
SECTION 1: Officers. The Board of Directors shall elect a President, a
Secretary and a Treasurer of the corporation and from time to time may
elect or appoint one or more Vice Presidents and such other officers as it
may determine. Any two (2) or more offices may be held by the same person,
except the offices of President and Secretary.
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SECTION 2. President. The President shall be a member of the Board of
Directors and shall be the Chief Administrative or Operating Officer of the
corporation and shall perform such duties as are customary to that office,
and shall also perform such other duties as shall be assigned, from time to
time, by the Board of Directors.
SECTION 3. Vice president. Each Vice President, if elected, shall have
such power and perform such duties as may be assigned by the President or
the Board of Directors.
SECTION 4. Secretary. The Secretary shall be a member of the Board of
Directors and shall keep the minutes of all meetings of the stockholders
and of the Board. The Secretary shall see that all notices are duly given
in accordance with the provisions of law and these by-Laws; shall be
custodian of the records and of the corporation seal or seals of the
corporation; shall see that the corporation seal is affixed to all
documents, the execution of which, on behalf of the corporation, under this
seal, is duly authorized, and when the seal is so affixed may attest the
same; may sign, with the President or a Vice President, certificates of
stock of the corporation; and, in general, shall perform all duties as are
customary to that office, and shall also perform such other duties as shall
be assigned, from time to time, by the President or the Board.
SECTION 5. Treasurer. The Treasurer shall be a member of the Board of
Directors and shall have charge of and be responsible for all funds,
securities, receipts and disbursements of the corporation, and shall
deposit or
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cause to be deposited, in the name of the corporation, all moneys or other
valuable effects in such banks, trust companies or other depositories as
shall, from time to time, be selected by the Board; may endorse for
collection on behalf of the corporation, checks, notes and other
obligations; may sign receipts and vouchers for payments made to the
corporation, singly or jointly with another person as the Board may
authorize; shall render to the President and to the Board, whenever
requested, an account of the financial condition of the corporation; may
sign, with the President or a Vice President, certificates of stock of the
corporation; and, in general, shall perform all duties as are customary to
that office, and shall also perform such other duties as shall be assigned,
from time to time, by the President or the Board.
SECTION 6. Term of Office; Removal. Each officer shall hold office for
such term as may be prescribed by the Board and until his or her successor
has been elected or appointed and qualified. Any officer may be removed by
the Board with or without cause. The removal of any officer without cause
shall be without prejudice to his or her contract rights, it any. The
election or appointment of an officer shall not of itself create contract
rights.
SECTION 7. Powers and Duties. The officers of the corporation shall each
have such powers and authority and perform such duties in the management of
the property and affair of the corporation as from time to time may be
prescribed by the Board of Directors and, to the extent not so prescribed,
they shall each have such powers and authority and perform such duties in
the management of the affairs and property of the corporation, subject to
the control of the Board, as generally pertain to their respective offices.
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<PAGE>
Securities of other corporations held by the corporation may be voted by
any officer designated by the Board and, in the absence of any such
designation, by the President, any Vice President, the Secretary or the
Treasurer.
The Board may require any officer to give security for the faithful
performance of his duties.
SECTION 8. Compensation. The Board shall have power to fix the
compensation of all officers of the corporation. It may authorize any
officer, upon whom the power of appointing subordinate officers, may have
been conferred, to fix the compensation of such subordinate officers.
ARTICLE V.
INDEMNITY
SECTION 1. Indemnification of Officers and Directors. To the full extent
authorized by law, the corporation shall indemnify any person made, or
threatened to be made, a party to an action or proceeding, whether criminal
or civil, by reason of the fact the he or she, or his or her testator or
intestate, is or was a director or officer of the corporation or serves or
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<PAGE>
served any other corporation in any capacity at the request of the
corporation, against amounts paid in connection with such actin or
proceeding including reasonable attorneys' fees incurred in connection with
the defense or settlement of such action or with an appeal therefrom.
Nothing contained herein shall affect the right of any person to receive
indemnification under contract, or the right to be awarded indemnification
by a court in accordance with law and, during pendency of litigation, an
allowance of expenses including attorneys' fees.
ARTICLE VI.
STOCK CERTIFICATES
SECTION 1. Form of Stock Certificates. The stocks of the corporation
shall be represented by certificates, in such form as the Board of
Directors may from time to time prescribe, signed by the President or a
Vice President and the Secretary or an Assistance Secretary or the
Treasurer or an Assistant Treasurer, and shall be sealed with the seal of
the corporation or a facsimile thereof. In case any such officer who has
signed such certificate shall have ceased to be such before such
certificates is issued, it may be issued by the corporation which the same
effect as if such officer had not ceased to be such at the date of its
issue.
SECTION 2. Registration of Transfers. Shares of the corporation shall be
transferable only upon the books of the corporation, by the person
specified by the certificate representing such shares or by special
endorsement of the person entitled to such shares, or by the duly
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<PAGE>
authorized attorney-in-fact or other legal representative of such person.
The corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder in fact thereof and accordingly
shall not be bound to recognize any equitable or other claim to or interest
in such share or shares on the part of any other person, whether or not it
shall have express or other notice thereof, save as expressly provided by
law.
SECTION 3. Record Date. For the purpose of determining the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, other than the annual meeting of stockholders, or to
express consent to or dissent from any proposal without a meeting, or for
the purpose of determining stockholders entitled to receive payment of any
divided or the allotment of any rights, or for the purpose of any other
action, the Board of Directors may fix, in advance, a date as the record
date for any such determination of stockholders. Such date shall not be
more than 50 nor less than 10 days before the date of such meeting, nor
more than 50 days prior to any other action. Determination of stockholders
of record for purposes of the annual meeting of stockholders shall be as
set forth in the Charter of this corporation.
SECTION 4. Lost Certificates. In the case of the loss or destruction of
any certificate of stock, a new certificate may be issued upon the
following conditions:
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<PAGE>
The owner of said certificate shall file with the Secretary of the
corporation an affidavit giving the facts in relation to the ownership, and
in relation to the loss or destruction of said certificate, stating its
number and the number of shares represented thereby; such affidavit to be
in such form and contain such statements as shall satisfy the President and
Secretary that said certificate has been accidentally destroyed or lost,
and that a new certificate ought to be issued in lieu thereof.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
SECTION 1. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the corporation and shall be in such form as the Board
of Directors may from time to time determine.
SECTION 2. Fiscal Year. The fiscal year of the corporation shall be the
twelve (12) months ending December 31.
SECTION 3. Check and Notes. All checks or demands for money and notes or
other instruments evidencing indebtedness or obligations of the corporation
shall be signed by such officer or officers or other person or persons as
shall be thereunto authorized from time to time by the Board of Directors.
SECTION 4. Contracts. All contracts, deeds, documents and instruments
requiring a seal shall be executed by the President, or any Vice President,
under the seal of the Company affixed and attested to by the Secretary or
the Treasurer. All such papers may also be executed and the seal of the
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<PAGE>
Company affixed and attested to by such other person or person as may be
designated by a majority of the Board of Directors in the event the act or
signature of the aforesaid designated officers or their duly elected
assistants cannot reasonably be obtained because of absence, sickness or
other incapacity. All checks, notes, drafts, demands for money and other
obligations of the Company not requiring a seal shall be signed by the
President, any Vice president or the Treasurer or by such other officers or
agents as the Board of Directors may from time to time designate, and any
such signature or signatures may be evidenced by a facsimile to the extent
authorized by the Board of Directors.
ARTICLE VI.
STOCK CERTIFICATES
AMENDMENTS
SECTION 1. Power to Amend. The By-Laws may be adopted, amended or
repealed by the stockholders. The By-Laws may also be adopted, amended or
repealed by vote of a majority of the entire Board of Directors subject to
being amended or repealed by the stockholders entitled to vote thereon.
BY.INT
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PARTICIPATION AGREEMENT
PARTICIPATION AGREEMENT (the "Agreement") made by and between SCUDDER
VARIABLE LIFE INVESTMENT FUND (the "Fund"), a Massachusetts business trust
created under a Declaration of Trust dated March 15, 1985, as amended, with
a principal place of business in Boston, Massachusetts and INTRAMERICA LIFE
INSURANCE COMPANY, a New York corporation (the "Company"), with a principal
place of business in Pearl River, New York on behalf of Intramerica
Variable Annuity Account, a separate account of the Company, and any other
separate account of the Company as designated by the Company from time to
time, upon written notice to the Fund in accordance with Section 10 herein
(each, an "Account").
WHEREAS, the Fund acts as the investment vehicle for the separate accounts
established for variable life insurance policies and variable annuity
contracts (collectively referred to herein as "Variable Insurance
Products") to be offered by insurance companies which have entered into
participation agreements substantially identical to this Agreement
("Participating Insurance Companies") and their affiliated insurance
companies; and
WHEREAS, the beneficial interest in the Fund is divided into several series
of shares of beneficial interest ("Shares"), and additional series of
Shares may be established, each designated a "Portfolio and representing
the interest in a particular managed portfolio of securities; and
WHEREAS, it is in the best interest of Participating Insurance Companies to
make capital contributions if required so that the annual expenses of each
Portfolio of the Fund in which a
<PAGE>
Participating Insurance Company is a shareholder will not exceed a fixed
percentage of the Portfolio's average annual net assets; and
WHEREAS, the Parties desire to evidence their agreement as to certain other
matters,
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements hereinafter contained, the parties hereto agree as follows:
1. Additional Definitions.
For the purposes of this Agreement, the followinq definitions shall apply:
(a) The "expenses of a Portfolio" for any fiscal year shall mean the
expenses for such fiscal year as shown in the Statement of Operations (or
similar report) certified by the Fund's independent public accountants;
(b) A "Portfolio's average daily net assets" for each fiscal year shall
mean the sum of the net asset values determined throughout the year for the
purpose of determining net asset value per Share, divided by the number of
such determinations during such year;
(c) The Company's "Required Contributions on behalf of the Account in
respect of a Portfolio for any fiscal year shall mean an amount equal to
the expenses of that Portfolio for such year minus the- below-indicated
percentage of that Portfolio's average daily net assets for the year:
International Portfolio..................1.50%
Each other Portfolio.....................0.75%
multiplied by a fraction the denominator or which is the average daily net
assets of that Portfolio and the numerator of which is
2
<PAGE>
the average daily net asset value of the Shares of that Portfolio owned by
the Account (referred to herein as a "Participating Shareholder"). The
Company's Required Contribution in respect of a Portfolio shall be pro-
rated based on the number of business days on which this Agreement is in
effect for periods of less than a fiscal year.
(d) The "average daily net asset value of the Shares of the Portfolio"
owned by the Account for any fiscal year of the Fund shall mean the greater
of (i) $500,00O or (ii) the sum of the aggregate net asset values of the
Shares so owned determined during the fiscal year, as of each determination
of the net asset value per Share, divided by the total number of
determinations of net asset value during such year.
(e) "Shares" means shares of beneficial interest, without par value, of any
Portfolio, now or hereafter created, of the Fund.
2. Capital Contribution.
The Company on behalf of the Account shall, within sixty days after the end
of each fiscal year of the Fund, make a capital contribution to the Fund in
respect of each Portfolio equal to the Required Contribution for that
Portfolio for such year; provided, however, that in the event that both
clauses (i) and (ii) of paragraph (d) of Section 1 of this Agreement or
similar agreements are applicable to different Participating Insurance
Companies during the same fiscal year, there shall be a proportionate
reduction of the Required Contribution of each Participating Insurance
Company to which said clause (ii) is applicable so that the total of all
required capital contributions to the Fund on
3
<PAGE>
behalf of any Portfolio is not greater than the excess of the expenses of
that Portfolio for that fiscal year less the percentage of that Portfolio's
total expenses set forth in paragraph (c) of Section 1 of this Agreement
for such fiscal year.
3. Duty of Fund to Sell.
The Fund shall make its Shares available for purchase at the applicable net
asset value per Share by Participating Insurance Companies and their
affiliates and separate accounts on those days on which the Fund calculates
its net asset value pursuant to rules of the Securities and Exchange
Commission; provided, however, that the Trustees of the Fund may refuse to
sell Shares of any Portfolio to any person, or suspend or terminate the
offering of Shares of any Portfolio, if such action is required by law or
by regulatory authorities having jurisdiction or is, in the sole discretion
of the Trustees, necessary in the best interest of the shareholders of any
Portfolio.
4. Requirement to Execute Participation Agreement; Requests.
Each Participating Insurance Company shall, prior to purchasing Shares in
the Fund, execute and deliver a participation agreement in a form
substantially identical to this Agreement.
The Fund shall make available, upon written request from the Participating
Insurance Company given in accordance with Paragraph 10, to each
Participating Insurance Company which has executed an Agreement and which
Agreement has not been terminated pursuant to Paragraph 8 (i) a list of all
other Participating Insurance Companies, and (ii) a copy of the Agreement
as executed by any other Participating Insurance Company.
4
<PAGE>
The Fund shall also make available upon request to each Participating
Insurance Company which has executed an Agreement and which Agreement has
not been terminated pursuant to Paragraph 8, the net asset value of any
Portfolio of the Fund as of any date upon which the Fund calculates the net
asset value of its Portfolios for the purpose of purchase and redemption of
Shares.
5. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Fund and each of
its Trustees and officers and each person, if any, who controls the Fund
within the meaning of Section 15 of the Securities Act of 1933 (the "Act")
against any and all losses, claims, damages, liabilities or litigation
(including legal and other expenses), arising out of the acquisition of any
Shares by any person, to which the Fund or such Trustees, officers or
controlling person may become subject under the Act, under any other
statute, at common law or otherwise, which (i) may be based upon any
wrongful act by the Company, any of its employees or representatives, any
affiliate of or any person acting on behalf of the Company or a principal
underwriter of its insurance products, or (ii) may be based upon any untrue
statement or alleged untrue statement of a material fact contained in a
registration statement or prospectus covering Shares or any amendment
thereof or supplement thereto or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading if such a statement or omission was
made in reliance upon information furnished to the Fund by the Company, or
(iii)- may be based on any untrue statement or alleged untrue statement of
a material fact contained in a
5
<PAGE>
registration statement or prospectus covering insurance products sold by
the Company or any insurance company which is an affiliate thereof, or any
amendments or supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statement or statements therein not misleading, unless such
statement or omission was made in reliance upon information furnished to
the Company or such affiliate by or on behalf of the Fund; provided,
however, that in no case (i) is the Company's indemnity in favor of a
Trustee or officer or any other person deemed to protect such Trustee or
officer or other person against any liability to which any such person
would otherwise be subject by reason of willful misfeasance, bad faith, or
gross negligence in the performance of his duties or by reason of his
reckless disregard of obligations and duties under this Agreement or (ii)
is the Company to be liable under its indemnity agreement contained in this
Paragraph 5 with respect to any claim made against the Fund or any person
indemnified unless the Fund or such person, as the case may-be, shall have
notified the Company in writing pursuant to Paragraph 10 within a
reasonable time after the summons or other first legal process giving
information of the nature of the claims shall have been served upon the
Fund or upon such person (or after the Fund or such person shall have
received notice of such service on any designated agent), but failure to
notify the Company of any such claim shall not relieve the Company from any
liability which it has to the Fund or any person against whom such action
is brought otherwise than on account of its indemnity agreement contained
in this Paragraph 5. The Company shall be entitled to participate, at its
own expense,
6
<PAGE>
in the defense, or, if it so elects, to assume the defense of any suit
brought to enforce any such liability, but, if it elects to assume the
defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Fund, to its officers and Trustees, or to any
controlling person or persons, defendant or defendants in the suit. In the
event that the Company elects to assume the defense of any such suit and
retain such counsel, the Fund, such officers and Trustees or controlling
person or persons, defendant or defendants in the suit, shall bear the fees
and expenses of any additional counsel retained by them, but, in case the
Company does not elect to assume the defense of any such suit, the Company
will reimburse the Fund, such officers and Trustees or controlling person
or persons, defendant or defendants in such suit, for the reasonable fees
and expenses of any counsel retained by them. The Company agrees promptly
to notify the Fund pursuant to Paragraph 10 of the commencement of any
litigation or proceedings against it in connection with the issue and sale
of any Shares.
(b) The Fund agrees to indemnify and hold harmless the Company and each of
its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Act against any and all
losses, claims, damages, liabilities or litigation (including legal and
other expenses) to which it or such directors, officers or controlling
person may become subject under the Act, under any other statute, at common
law or otherwise, arising out of the acquisition of any Shares by any
person which (i) may be based upon any wrongful act by the Fund, any of its
employees or representatives or a principal underwriter of the
7
<PAGE>
Fund, or (ii) may be based upon any untrue statement or alleged untrue
statement of a material fact contained in a registration statement or
prospectus covering Shares or any amendment thereof or supplement thereto
or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading unless such statement or omission was made in reliance upon
information furnished to the Fund by the Company or (iii) may be based on
any untrue statement or alleged untrue statement of a material fact
contained in a registration statement or prospectus covering insurance
products sold by the Company, or any amendment or supplement thereto, or
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement or statements
therein not misleading, if such statement or omission was made in reliance
upon information furnished to the Company by or on behalf of the Fund;
provided, however, that in no case (i) is the Fund's indemnity in favor of
a director or officer or any other person deemed to protect such director
or officer or other person against any liability to which any such person
would otherwise be subject by reason of willful misfeasance, bad faith, or
gross negligence in the performance of his duties or by reason of his
reckless disregard of obligations and duties under this Agreement or (ii)
is the Fund to be liable under its indemnity agreement contained in this
Paragraph 5 with respect to any claims made against the Company or any such
director, officer or controlling person unless it or such director, officer
or controlling person, as the case may be, shall have notified the Fund in
writing pursuant to Paragraph 10 within a reasonable time after the summons
8
<PAGE>
or other first legal process giving information of the nature of the claim
shall have been served upon it or upon such director, officer or
controlling person (or after the Company or such director, officer or
controlling person shall have received notice of such service on any
designated agent), but failure to notify the Fund of any claim shall not
relieve it from any liability which it may have to the person against whom
such action is brought otherwise than on account of its indemnity agreement
contained in this Paragraph. The Fund will be entitled to participate at
its own expense in the defense, or, if it so elects, to assume the defense
of any suit brought to enforce any such liability, but if the Fund elects
to assume the defense, such defense shall be conducted by counsel chosen by
it and satisfactory to the Company, its directors, officers or controlling
person or persons, defendant or defendants, in the suit. In the event the
Fund elects to assume the defense of any such suit and retain such counsel,
the Company, its directors, officers or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of
any additional counsel retained by them, but, in case the Fund does not
elect to assume the defense of any such suit, it will reimburse the Company
or such directors, officers or controlling person or persons, defendant or
defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Fund agrees promptly to notify the Company pursuant
to Paragraph 10 of the commencement of any litigation or proceedings
against it or any of its officers or Trustees in connection with the
issuance or sale of any Shares.
9
<PAGE>
6. Procedure for Resolving Irreconcilable Conflicts.
(a) The Trustees of the Fund will monitor the operations of the Fund for
the existence of any material irreconcilable conflict among the interests
of all the contract holders and policy owners of Variable Insurance
Products (the "Participants") of all separate accounts investing in the
Fund. An irreconcilable material conflict may arise, among other things,
from: (a) an action by any state insurance regulatory authority; (b) a
change in applicable insurance laws or regulations; (c) a tax ruling or
provision of the Internal Revenue Code or the regulations thereunder; (d)
any other development relating to the tax treatment of insurers, contract
holders or policy owners or beneficiaries of Variable Insurance Products;
(e) the manner in which the investments of any Portfolio are being managed;
(f) a difference in voting instructions given by variable annuity contract
holders, on the one hand, and variable life insurance policy owners, on the
other hand, or by the contract holders or policy owners of different
participating insurance companies; or (g) a decision by an insurer to
override the voting instructions of Participants.
(b) The Company will be responsible for reporting any potential or existing
conflicts to the Trustees of the Fund. The Company will be responsible for
assisting the Trustees in carrying out their responsibilities under this
Paragraph 6(b) and Paragraph 6(a), by providing the Trustees with all
information reasonably necessary for the Trustees to consider the issues
raised. The Fund will also request its investment adviser to report to the
Trustees any such conflict which comes to the attention of the adviser.
10
<PAGE>
(c) If it is determined by a majority of the Trustees of the Fund, or a
majority of its disinterested Trustees, that a material irreconcilable
conflict exists involving the Company, the Company shall, at its expense,
and to the extent reasonably practicable (as determined by a majority of
the disinterested Trustees), take whatever steps are necessary to eliminate
the irreconcilable material conflict, including withdrawing the assets
allocable to some or all of the separate accounts from the Fund or any
Portfolio and reinvesting such assets in a different investment medium,
including another Portfolio of the Fund, offering to the affected
Participants the option of making such a change or establishing a new
funding medium including a registered investment company.
For purposes of this Paragraph 6(c), the Trustees, or the disinterested
Trustees, shall determine whether or not any proposed action adequately
remedies any irreconcilable material conflict. In the event of a
determination of the existence of an irreconcilable material conflict, the
Trustees shall cause the Fund to take such action, such as the
establishment of one or more additional Portfolios, as they in their sole
discretion determine to be in the interest of all shareholders and
Participants in view of all applicable factors, such as cost, feasibility,
tax, regulatory and other considerations. In no event will the Fund be
required by this Paragraph 6(c) to establish a new funding medium for any
variable contract or policy.
The Company shall not be required by this Paragraph 6(c) to establish a new
funding medium for any variable contract or policy if an offer to do so has
been declined by a vote of a majority of the Participants materially
adversely affected by the material
11
<PAGE>
irreconcilable conflict. The Company will recommend to its Participants
that they decline an offer to establish a new funding medium only if the
Company believes it is in the best interest of the Participants.
(d) The Trustees' determination of the existence of an irreconcilable
material conflict and its implications promptly shall be communicated to
all Participating Insurance Companies by written notice thereof delivered
or mailed, first class postage prepaid.
7. Voting Privileges.
The Company shall be responsible for assuring that its separate account or
accounts participating in the Fund shall use a calculation method of voting
procedures substantially the same as the following: those Participants
permitted to give instructions and the number of Shares for which
instructions may be given will be determined as of the record date for the
Fund shareholders' meeting, which shall not be more than 60 days before the
date of the meeting. Whether or not voting instructions are actually given
by a particular Participant, all Fund shares held in any separate account
or sub-account thereof and attributable to policies will be voted for,
against, or withheld from voting on any proposition in the same proportion
as (i) the aggregate record date cash value held in such sub-account for
policies giving instructions, respectively, to vote for, against, or
withhold votes on such proposition, bears to (ii) the aggregate record date
cash value held in the sub-account for all policies for which voting
instructions are received. Participants continued in effect under lapse
options will not be permitted to give voting instructions.
12
<PAGE>
Shares held in any other insurance company general or separate account or
sub-account thereof will be voted in the proportion specified in the second
preceding sentence for shares attributable to policies.
8. Duration and Termination.
This Agreement shall remain in force one year from the date of its
execution (such date and any anniversary of such date being hereinafter
called a "Renegotiation Date"), and from year to year thereafter provided
that neither the Company nor the Fund shall have given written notice to
the other within thirty (30) days prior to a Renegotiation Date that it
desires to renegotiate the amount of contribution to capital due hereunder
("Renegotiation Notice"). In the event any other Participating Insurance
Company (which thereafter remains a Participating Insurance Company) shall
cease to be subject to the obligation to make capital contributions under
the terms of their respective Participation Agreement, this agreement will
remain in effect; however, the Company shall discontinue payment of capital
contributions as defined in paragraph (c) of Section 1 of this Agreement.
If a Renegotiation Notice is properly given as aforesaid and the Fund and
the Company shall fail, within sixty (60) days after the Renegotiation
Date, either to enter into an amendment to this Agreement or a written
acknowledgment that the Agreement shall continue in effect, this Agreement
shall terminate as of the one hundred twentieth day after such
Renegotiation Date. If this Agreement is so terminated, the Fund may, at
any time thereafter, automatically redeem the Shares of any Portfolio held
by a Participating Shareholder. This Agreement may be terminated at any
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<PAGE>
time, at the option of either of the Company or the Fund, when neither the
Company, any insurance company nor the separate account or accounts of such
insurance company which is an affiliate thereof which is not a
Participating Insurance Company own any Shares of the Fund or may be
terminated by either party to the Agreement upon a determination by a
majority of the Trustees of the Fund, or a majority of its disinterested
Trustees, following certification thereof by a Participating Insurance
Company given in accordance with Paragraph 10 that an irreconcilable
conflict exists among the interests of (i) all contract holders and policy
holders of Variable Insurance Products of all separate accounts or (ii) the
interests of the Participating Insurance Companies investing in the Fund.
Notwithstanding anything to the contrary in this Agreement or its
termination as provided herein, the Company's obligation to make a capital
contribution to the Fund in accordance with this Agreement at the time in
effect shall continue (i) following a properly given Renegotiation Notice,
in the absence of agreement otherwise, until termination of this Agreement,
and (ii) (except termination due to the existence of an irreconcilable
conflict), following termination of this Agreement, until the later of the
fifth anniversary of the date of this Agreement or the date on which the
Company, its separate account(s) or the separate account(s) of any
affiliated insurance company owns no Shares.
9. Compliance.
The Fund will comply with the provisions of Section 4240(a) of the New York
Insurance Law.
Each Portfolio of the Fund will comply with the provisions of Section
817(h) of the Internal Revenue Code of 1986, as amended
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<PAGE>
(the "Code"), relating to diversification requirements for variable
annuity, endowment and life insurance contracts. Specifically, each
Portfolio will comply with either (i) the requirement of Section 817(h)(1)
of the Code that its assets be adequately diversified, or (ii) the "Safe
Harbor for Diversification" specified in Section 817(h)(2) of the Code, or
(iii) the diversification requirement of Section 817(h)(1) of the Code by
having all or part of its assets invested in U.S. Treasury securities which
qualify for the "Special Rule for Investments in United States Obligations"
specified in Section 817(h)(3) of the Code .
The provisions of Paragraphs 6 and 7 of this Agreement shall be interpreted
in a manner consistent with any Rule or order of the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended,
applicable to the parties hereto.
No Shares of any Portfolio of the Fund may be sold to the general public.
10. Notices.
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at
such other address as such party may from time to time specify in writing
to the other party.
If to the Fund:
Scudder Variable Life Investment Fund
175 Federal Street
Boston, Massachusetts 02110
(617) 482-3990
Attn: David B. Watts
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If to the Company:
Intramerica Life Insurance Company
One Blue Hills Plaza
Pearl River, New York 10965
Attn: Linda Gerdes, Senior Vice President
cc: Colonial Penn Life Insurance Company
1818 Market Street, 26th Floor
Philadelphia, PA 19181
Attn: Karen Henneberg
11. Massachusetts Law to Apply.
This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts.
12. Miscellaneous.
The name "Scudder Variable Life Investment Fund" is the designation of the
Trustees for the time being under a Declaration of Trust dated March 15,
1985, as amended, and all persons dealing with the Fund must look solely to
the property of the Fund for the enforcement of any claims against the Fund
as neither the Trustees, officers, agents or shareholders assume any
personal liability for obligations entered into on behalf of the Fund. No
Portfolio shall be liable for any obligations properly attributable to any
other Portfolio.
The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be
executed simultaneously in two or more counterparts, each of which taken
together shall constitute one and the same instrument.
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13. Entire Agreement.
This Agreement incorporates the entire understanding and agreement among
the parties hereto, and supersedes any and all prior understandings and
agreements between the parties hereto with respect to the subject matter
hereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and behalf by its duly authorized representative
and its seal to be hereunder affixed
hereto as of the 11th day of May, 1994.
SEAL SCUDDER VARIABLE LIFE
INVESTMENT FUND
By: ________________________________
/S/ David B. Watts
President
SEAL INTRAMERICA LIFE INSURANCE
COMPANY
By: ________________________________
Name /S/ Richard G. Petitt
Title President
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REIMBURSEMENT AGREEMENT
REIMBURSEMENT AGREEMENT (the "Agreement") made by and between SCUDDER,
STEVENS & CLARK, INC., a Delaware corporation ("SS&C"), with a principal
place of business in Boston, Massachusetts and INTRAMERICA LIFE INSURANCE
COMPANY, a New York corporation (the "Company"), with a principal place of
business in Pearl River, New York on behalf of the Intramerica Variable
Annuity Account, a separate account of the Company, and any other separate
account of the Company as designated by the Company from time to time, upon
written notice to the Fund in accordance with Section 8 herein (the
"Account").
WHEREAS, SS&C has caused to be organized Scudder Variable Life Investment
Fund (the "Fund"), a Massachusetts business trust created under a
Declaration of Trust dated March 15, 1985, as amended, the beneficial
interest in which is divided into several series, each designated a
"Portfolio" and representing the interest in a particular managed portfolio
of securities; and
WHEREAS, the purpose of the Fund is to act as the investment vehicle for
the separate accounts established for variable life insurance policies and
variable annuity contracts to be offered by insurance companies which have
entered into reimbursement agreements substantially identical to this
Agreement ("Participating Insurance Companies"); and
WHEREAS, the parties desire to express their agreement as to certain other
matters;
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements hereinafter contained, the parties hereto agree as follows:
<PAGE>
1. Additional Definitions.
For purposes of this Agreement, the following definitions shall apply:
(a) The "average annual net asset value of the Shares of each Portfolio of
the Fund" shall mean the sum of the aggregate net asset values of the
Shares of such Portfolio owned by the Account (referred to herein as the
"Participating Shareholder") determined as of each determination of the net
asset value per Share of the Fund during the fiscal year, divided by the
number of such determinations during such year.
(b) "Shares" means shares of beneficial interest, without par value, of any
Portfolio, now or hereafter created, of the Fund.
2. Access to Other Products.
SS&C shall permit a Participating Shareholder to participate in any
registered investment company other than the Fund which is intended as the
funding vehicle for insurance products and for which SS&C or an affiliate
of SS&C acts as investment adviser, on the same basis as other insurance
companies are permitted to participate in such a registered investment
company. This provision shall not require SS&C to make available to the
Company shares of any investment company which is organized solely as the
funding vehicle for insurance products offered by a single insurance
company or a group of affiliated insurance companies.
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3. Right to Review and Approve Sales Materials.
The Company shall furnish, or shall cause to be furnished, to SS&C or its
designee, at least twenty days prior to its intended use, each piece of
promotional material in which SS&C or the Fund is named. No such material
shall be used unless SS&C or its designee shall have approved such use in
writing, or twenty days shall have elapsed without approval, rejection or
objection since receipt by SS&C or its designee of such material.
SS&C shall furnish, or shall cause to be furnished, to the Company or its
designee, at least twenty days prior to its intended use, each piece of
promotional material in which the Company or its separate account(s) is
named. No such material shall be used unless the Company or its designee
shall have approved such use in writing, or twenty days shall have elapsed
without approval, rejection or objection since receipt by the Company or
its designee of such material.
4. Sales Organization Meetings.
Representatives of SS&C or its designee shall meet with the sales
organizations of the Company at such reasonable times and places as may be
agreed upon by the Company and SS&C or its designee for the purpose of
educating sales personnel about the Fund.
5. Duration.
This Agreement shall remain in force one year from the date of its
execution (such date and any anniversary of such date being hereinafter
called an "Anniversary Date"), and from year to year thereafter provided
that neither the Company nor the Fund shall have given written notice to
the other within thirty (30) days
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prior to an Anniversary Date that it desires to terminate the Agreement,
except that the obligation of each party hereto to indemnify the other
party hereto shall continue with respect to all losses, claims, damages,
liabilities or litigation based upon the acquisition of Shares purchased as
the funding vehicle for any variable life insurance policy or variable
annuity contract issued by the Company or any affiliated insurance company.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless SS&C and each of its
Directors and officers and each person, if any, who controls SS&C within
the meaning of Section 15 of the Securities Act of 1933 (the Act") or any
person, controlled by or under common control with SS&C ("affiliate")
against any and all losses, claims, damages, liabilities or litigation
(including legal and other expenses) to which SS&C or such Directors,
officers or controlling person may become subject under the Act, under any
other statute, at common law or otherwise, arising out of the acquisition
of any Shares by any person which (i) may be based upon any wrongful act by
the Company, any of its employees or representatives, any affiliate of or
any person acting on behalf of the Company or a principal underwriter of
its insurance products, or (ii) may be based upon any untrue statement or
alleged untrue statement of a material fact contained in a registration
statement or prospectus covering Shares or any amendment thereof or
supplement thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or omission was made
in reliance upon information furnished to SS&C
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or the Fund by the Company, provided, however, that in no case (i) is
the Company's indemnity in favor of a Director or officer or any other
person deemed to protect such Director or officer or other person against
any liability to which any such person would otherwise be subject by reason
of willful misfeasance, bad faith, or gross negligence in the performance
of his duties or by reason of his reckless disregard of obligations and
duties under this Agreement or (ii) is the Company to be liable under its
indemnity agreement contained in this Paragraph 6 with respect to any claim
made against SS&C or any person indemnified unless SS&C or such person, as
the case may be, shall have notified the Company in writing pursuant to
Paragraph 8 within a reasonable time after the summons or other first legal
process giving information of the nature of the claims shall have been
served upon SS&C or upon such person (or after SS&C or such person shall
have received notice of such service on any designated agent), but failure
to notify the Company of any such claim shall not relieve the Company from
any liability which it has to SS&C or any person against whom such action
is brought otherwise than on account of the indemnity agreement contained
in this Paragraph 6. The Company shall be entitled to participate, at its
own expense, in the defense, or, if it so elects, to assume the defense of
any suit brought to enforce any such liability, but, if it elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to SS&C, to its officers and Directors, or to any controlling
person or persons, defendant or defendants in the suit. In the event that
the Company elects to assume the defense of any such suit and retain such
counsel, SS&C, such officers and Directors or
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controlling person or persons, defendant or defendants in the suit, shall
bear the fees and expenses of any additional counsel retained by them, but,
in case the Company does not elect to assume the defense of any such suit,
the Company will reimburse SS&C, such officers and Directors or controlling
person or persons, defendant or defendants in such suit, for the reasonable
fees and expenses of any counsel retained by them. The Company agrees
promptly to notify SS&C pursuant to Paragraph 8 of the commencement of any
litigation or proceedings against it in connection with the issue and sale
of any Shares.
(b) SS&C agrees to indemnify and hold harmless the Company and each of its
directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the Act against any and all losses,
claims, damages, liabilities or litigation (including legal and other
expenses) to which it or such directors, officers or controlling persons
may become subject under the Act, under any other statute, at common law or
otherwise, arising out of the acquisition of any Shares by any person which
(i) may be based upon any wrongful act by SS&C, any of its employees or
representatives or a principal underwriter of the Fund, or (ii) may be
based upon any untrue statement or alleged untrue statement of a material
fact contained in a registration statement or prospectus covering Shares or
any amendment thereof or supplement thereto or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if such statement
or omission was made in reliance upon information furnished to the Company
by SS&C; provided, however, that in no case (i) is SS&C's
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indemnity in favor of a director or officer or any other person deemed to
protect such director or officer or other person against any liability to
which any such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of his
duties or by reason of his reckless disregard of obligations and duties
under this Agreement or (ii) is SS&C to be liable under its indemnity
agreement contained in this Paragraph 6 with respect to any claims made
against the Company or any such director, officer or controlling person
unless it or such director, officer or controlling person, as the case may
be, shall have notified SS&C in writing pursuant to Paragraph 8 within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon it or
upon such director, officer or controlling person (or after the Company or
such director, officer or controlling person shall have received notice of
such service on any designated agent), but failure to notify SS&C of any
claim shall not relieve it from any liability which it may have to the
person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this Paragraph 6. SS&C will be entitled to
participate at its own expense in the defense, or, if it so elects, to
assume the defense of any suit brought to enforce any such liability, but
if SS&C elects to assume the defense, such defense shall be conducted by
counsel chosen by it and satisfactory to the Company, its directors,
officers or controlling person or persons, defendant or defendants, in the
suit. In the event SS&C elects to assume the defense of any such suit and
retain such counsel, the Company, its directors, officers or controlling
person or persons,
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defendant or defendants in the suit, shall bear the fees and expenses of
any additional counsel retained by them, but, in case SS&C does not elect
to assume the defense of any such suit, it will reimburse the Company or
such directors, officers or controlling person or persons, defendant or
defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. SS&C agrees promptly to notify the Company pursuant to
Paragraph 9 of the commencement of any litigation or proceedings against it
or any of its officers or Directors in connection with the issuance or sale
of any Shares.
7. Massachusetts Law to Apply.
This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts.
8. Notices.
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at
such other address as such party may from time to time specify in writing
to the other party.
If to SS&C:
Scudder, Stevens & Clark, Inc.
17S Federal Street
Boston, Massachusetts 02110
(617) 482-3990
Attn: David s. watts
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If to the Company:
Intramerica Life Insurance Company
One Blue Hills Plaza
Pearl River, New York 10965
Attn: Linda Gerdes, Senior Vice President
cc: Colonial Penn Life Insurance Company
1818 Market Street, 26th Floor
Philadelphia, PA 19181
Attn: Karen Henneberg
9. Miscellaneous.
The captions in the Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be
executed simultaneously in two or more counterparts, each of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the 11th day of May,
1994.
SEAL
SEAL SCUDDER, STEVENS & CLARK, INC.
By: /S/ David S. Lee
David S. Lee
Authorized Officer
SEAL INTRAMERICA LIFE INSURANCE COMPANY
By: /S/ R. Petitt
Name Richard G. Petitt
Title: President
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Exhibit 8 (c)
GENERAL SERVICES AND EXPENSE REIMBURSEMENT AGREEMENT
Between
FIRST CHARTER LIFE INSURANCE COMPANY
and
CHARTER NATIONAL LIFE INSURANCE COMPANY
<PAGE>
This General Services and Expense Reimbursement Agreement (the "Agreement")
dated September 1, 1989, is entered into by and between First Charter Life
Insurance Company, a life insurance company incorporated under the laws of
the State of New York (the "Company"), and Charter National Life Insurance
Company, an affiliated life insurance company incorporated under the laws
of the State of Missouri ("Charter").
WHEREAS, the Company is duly licensed as an insurance company in the State
of New York and is engaged in the annuity business; and
WHEREAS, Charter has special knowledge and performs certain services in
connection with the annuities; and
WHEREAS, Charter has offered to perform certain of these services for the
Company, and the parties desire to enter into an agreement in connection
therewith; and
WHEREAS, Charter may incur certain expenses associated with the
development, administration, promotion, and sale of the annuity products
issued by First Charter:
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
A. SERVICES TO BE PERFORMED BY CHARTER
The Company hereby agrees to pay for and Charter agrees to provide and
perform, so long as this Agreement is in force, the following services in
accordance with the Company's commission rates, rules, and procedures now
in force or as may be amended or supplemented from time to time.
1. Administration. Charter shall administer the commissions, contract
accounting, record keeping, claims (excluding activities involving contact
with the owners and beneficiaries), and other functions necessary or
appropriate to fully handle the annuity business covered under this
Agreement. The Company at its home office shall perform all owner services
involving personal contact or communication with an owner or beneficiary,
including, but not limited to, surrender requests (including computations
and payments of benefits); determination and payment of contract benefits;
contract conversions; beneficiary changes; contract changes; requests for
general information; premium payments; and consumer complaints.
2. Reports to the Company. Charter shall provide the Company with a
statement quarterly or more frequently, as the Company may request, in form
satisfactory to the Company, with accounting and financial data concerning
the annuity business covered by this Agreement sufficient to enable the
Company to service its contract owners. Charter shall, within thirty (30)
days after written demand therefor, prepare on behalf of the Company
reports concerning the business covered by this Agreement sufficient to
enable the Company to comply with the reporting requirements of the State
of New York and other states in which the Company is doing business,
including, but not limited to, reports such as interim requests for
information and questionnaires. It is agreed that the intent of this
paragraph is that Charter shall provide the Company with all data necessary
for the Company to serve its contract owners and comply with the
requirements of law and regulatory authorities, in the form required
thereby; it is not the intent of the parties to impose upon Charter any
duties beyond such requirements.
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3. Records and Access to Records. Charter shall prepare and maintain
up-to-date and correct records, which shall be considered the property of
the Company and which shall be available for examination by or surrender to
the Company, at the Company's expense, at such times as the Company may
reasonably request during Charter's business hours. The owner accounting
and statistical information contained in such records shall, upon request,
be transmitted to the Company in sufficient detail to enable it to meet its
contract owner service obligations. Sufficient records shall be maintained
in the office of the Company to enable it to process any inquiry made or
application submitted by an contract owner or beneficiary with no
significant delay. If it is necessary to transfer records in connection
with the performance of specific services, copies of such records shall be
transferred and the originals maintained at the home office of the Company.
Persons providing services shall forward to the home office of the Company
the originals or copies of all work papers, related records, and documents
prepared and utilized in connection with such services. While records
which are maintained solely on EDP tapes, disks, etc., need not be
forwarded to the Company, Charter, when requested, shall provide print-outs
of such tapes, disks, etc., which shall be available for inspection by the
Superintendent of the New York Insurance Department at the Company's home
office.
4. Faithful Representation and Performance. In consideration of the
authority granted herein, Charter shall: faithfully represent the Company
in all matters pertaining to and within the jurisdiction and scope of this
Agreement; serve the Company as herein provided; and exercise due diligence
in carrying out all instructions and requests of the Company.
5. Right of Charter to Represent Other Companies Charter may
represent one or more insurance companies writing the same or different
types of coverage as the Company without affecting Charter's rights
hereunder.
B. OBLIGATIONS OF COMPANY AND FORM OF CONTRACTS
1. The Company agrees to cooperate fully with Charter and to render
all assistance reasonably required in order to enable Charter to carry out
its obligations and undertakings hereunder.
2. The parties shall agree on forms, plans, types, and character of
the annuity contracts which may be offered, as described in Exhibit A, as
attached hereto, and which may be amended by written consent of both
parties.
3. The Company reserves the right, without any liability whatsoever
to Charter, to withdraw from use, upon sixty (60) days' written notice to
Charter, any contract, form, or practice used. If such withdrawal is by
regulatory actions, the withdrawal notice would be deemed to coincide with
any notice given by any regulatory body.
C. REIMBURSEMENT OF EXPENSES
The Company hereby agrees to pay all costs incurred by Charter for the
administrative services provided to the Company pursuant to this Agreement.
Subject to its prior consent, the Company also agrees to reimburse Charter
for such other expenses that Charter may incur on behalf of the Company.
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<PAGE>
D. INDEMNIFICATION
1. Charter shall, and by this Agreement does hereby agree to, hold
harmless and indemnify the Company from any and all claims, actions, suits,
judgments, damages, fines, and other proceedings, together with all costs,
expenses, and other amounts (including attorneys' fees) arising from any
act, error, or omission under this Agreement or any reinsurance agreement
(except for intentional, fraudulent, or negligent acts, errors, or
omissions of the company, including without limitation: (a) any act, duty,
or obligation to be performed by Charter under this Agreement or any
reinsurance agreement; (b) any act, error, or omission performed or failed
to be performed by an employee of Charter, an Agent appointed by Charter,
or any other individual or entity acting for, through, or on behalf of
Charter and/or the Company pursuant to this Agreement or any reinsurance
agreement; or (c) with respect to any business produced, processed, or
issued pursuant to this Agreement or reinsured pursuant to any reinsurance
agreement.
2. In the event that the Company is named a party to any
administrative or other proceeding or litigation concerning any matter set
forth in the paragraph above, Charter (a) shall initiate and institute any
and all appropriate actions, at the Company's expense, to defend the
Company; (b) shall promptly forward to the Company copies of all
communications, correspondence, and pleadings as the same are filed or
received; and (c) shall, and by this Agreement does, hold harmless and
indemnify the Company from the items set forth in the paragraph above,
imposed or incurred by the Company as a result of such proceeding or
litigation. Charter shall, and by this Agreement does, hold harmless and
indemnify the Company in the event of a final judgment or an award for
punitive, compensatory, or other special damages in excess of contractual
amounts.
In the event any such proceeding or litigation seeks punitive or other
special damages, the Company, as a condition to Charter's agreement to hold
harmless and indemnify the Company: (a) shall, if notice of such action is
first received by the Company, notify Charter of such fact in writing
within fifteen (15) days after receipt by the Company, at the Company's
home office, of the summons or other appropriate notice of commencement of
proceeding or suit; and (b) shall solicit Charter's advice with respect to
all matters pertaining to participation in or direction of such proceeding
or litigation. In such latter event, Charter may, without limitation of
other legal, equitable, or other remedies or alternatives then or
thereafter available, defend such proceeding or litigation either in the
name of the Company or in the name of Charter; provided, however, nothing
contained herein shall diminish or mitigate Charter's liability for the
contractual amount of any such claim.
3. Failure of the Company to exercise any right or privilege
contained under this Agreement shall not be deemed a waiver or abrogation
of any of the Company's rights or remedies under this Article or this
Agreement.
4. The terms and conditions of this Article shall survive any
termination of this Agreement.
E. TERRITORY
The territorial limits to which this Agreement shall apply and the
authority of Charter shall exist for business written in the Commonwealths,
Territories, and all the States in which the Company is licensed or may
become licensed. It is the intent of the Company that it refer all
inquiries from Agents appointed by Charter with respect to annuities to
Charter, and advise Charter of any inquiries from other agents with respect
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to annuities, but it will not be deemed to have breached this
Agreement for failure to do so unless it shall have intentionally and with
bad faith violated this covenant. This Agreement shall not be deemed to
create any exclusive territorial or other right or rights in favor of
Charter with respect to the acceptance of annuities by the Company.
F. OFFICE OF ADMINISTRATOR
Charter shall maintain its office and perform its obligations hereunder at
8301 Maryland Avenue, St. Louis, Missouri 63105.
G. REPORTS, RETURNS, AND TAXES
Charter shall make and file all reports and returns required of it by any
municipal, state, or federal government by virtue of Charter's doing
business as an independent contractor. The reports, returns, and taxes
which are required of Charter shall not include state premium taxes or any
other taxes levied against the Company, or any reports or returns which
must be made by the Company.
H. AUTHORITY OF ADMINISTRATOR
Charter is not authorized to obligate the Company, except as specifically
set forth in this Agreement, or to alter, modify, waive, or change any of
the terms, rates, or conditions of the contracts described in Exhibit A
unless such changes are first approved by the Company and the states in
which it is to be used.
I. MISCELLANEOUS
1. Amending the Agreement. This Agreement replaces the prior agreement
between the parties and now therefore, constitutes the entire agreement
between the parties and may be amended in writing by authorized officers of
the Company and Charter.
2. Notices. All notices required to be given under the terms of this
Agreement or which either of the parties hereto may desire to give
hereunder, shall be in writing and shall be sent by United States Certified
Mail, postage prepaid, return receipt requested, addressed to the party to
be notified at its principal place of business. Any change in address shall
be given in writing. Until such change of address is received by the other
party, any notice addressed to the previously designated place of business
shall be deemed sufficient.
3. Independent Contractors. Charter and the Company shall operate as
independent contractors. The parties are not and shall not be considered
Joint adventurers, partners, employer-employee, or agent of the other, and
neither shall have power to bind or obligate the other except as set forth
in this Agreement.
4. Term of Agreement - Termination Without Cause. This Agreement
shall be unlimited as to its duration but may be terminated by either party
without cause upon sixty (60) days written notice to the other party at any
given time.
In the event of termination under this Article, Charter agrees to transfer
information in its possession pertaining to the Company, to the Company or
its designee.
5. Assignment of Interest by Administrator. Neither this Agreement
nor the rights and interest of Charter hereunder shall be pledged,
assigned, sold, or otherwise alienated without the prior written consent of
the Company. Any assignment without
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the written consent of the Company shall render this Agreement null and
void at the option of the Company.
6. Arbitration. Any claims made by one party against the other or
disputes between the parties shall be settled by submitting the same to
arbitration in accordance with the rules of the American Arbitration
Association then in effect.
7. Benefit. This Agreement shall inure to the benefit of the
successors and assigns of the Company.
8. Agreement Execution. This Agreement shall be executed
simultaneously in two counterparts, each of which shall be deemed an
original, which together shall constitute one and the same Agreement.
IN. WITNESS WHEREOF, the parties hereto have hereunto set their hands the
day and year first above written.
Attest: FIRST CHARTER LIFE INSURANCE COMPANY
____________________ By ___________________________
/S/
Secretary President
Attest CHARTER NATIONAL LIFE
INSURANCE COMPANY
____________________ By ___________________________
/S/
Secretary Senior vice President
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EXHIBIT "A"
Name of Contract; Application; Certificate Form Numbers
Single Premium Variable Deferred Annuity P 1600
Application for Single Premium Variable A 1601
Deferred Annuity
Financial Questionnaire to Application B 1601
Flexible Premium Variable Deferred Annuity S 1800
Application for Flexible Premium Variable A 1801
Deferred Annuity
Flexible Premium Deferred Annuity N 2000
Application for Flexible Premium Deferred Annuity A 2001
Attest: FIRST CHARTER LIFE INSURANCE COMPANY
____________________ By ___________________________
/S/
Secretary President
Attest CHARTER NATIONAL LIFE
INSURANCE COMPANY
____________________ By ___________________________
/S/
Secretary Senior vice President
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each Officer/Director whose signature
appears below hereby constitutes and appoints Karen M. Henneberg and
Gregory R. Barstead of Intramerica Life Insurance Company, and each of them
(with power to each of them to act alone), as such person's true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for such person and in such person's name, place, and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the Registration Statements on Form N-4,
(File No. 33-54116) filed under the Securities Act of 1933 and the
Investment Company Act of 1940, and to file all exhibits thereto, and all
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully and to all intents and purposes as such
person might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or a substitute or substitutes, may
or shall lawfully do or cause to be done by virtue hereof.
Signature Date Signature Date
____________________________________ ________________________________
/S/ Henry H. Wulsin /S/ Judith E. Baylinson
Exhibit A
RESOLUTIONS OF THE
BOARD OF DIRECTORS
OF
BALDWIN LIFE INSURANCE COMPANY
(NEW YORK)
The following resolutions were adopted by the Board of Directors of Baldwin
Life Insurance Company on June 8, 1988:
BE IT RESOLVED, that the Board of Directors of Baldwin Life Insurance
Company ("Company"), pursuant to the provisions of Section 4240 of the New
York Insurance Law (the "Insurance Law"), hereby establishes a separate
account designated the "Baldwin Variable Annuity Account" (hereinafter the
"Variable Annuity Account") for the following uses and purposes, and
subject to such conditions as hereinafter set forth; be it
FURTHER RESOLVED, that the Variable Annuity Account is established for the
purpose of providing for the issuance by the Company of variable annuity
contracts ("Contracts") the form of which shall be kept on file with the
Secretary of the Company, and shall constitute a separate account into
which are allocated
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amounts paid to or held by the Company under such Contracts; be it
FURTHER RESOLVED, that the income, gains and losses, whether or not
realized, from assets allocated to the Variable Annuity Account shall, in
accordance with the Contracts, be credited to or charged against such
account without regard to other income, gains, or losses of the Company; be
it
FURTHER RESOLVED, that that portion of the assets of the Variable Annuity
Account equal to the reserves and other contract liabilities with respect
to the Variable Annuity Account shall not be chargeable with liabilities
arising out of any other business the Company may conduct; be it
FURTHER RESOLVED, that the Variable Annuity Account shall be divided into
Investment Subaccounts, each of which shall invest in the shares of an
investment company subject to or registered under the Investment Company
Act of 1940, the investment of which comply with the restrictions and
limitations on investments set forth in Section 4240 (b) of the Insurance
Law, and net premiums under the Contracts shall be allocated to the
eligible portfolios set forth in the Contracts in accordance with
instructions received from Owners of the Contracts; be it
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FURTHER RESOLVED, that the Board of Directors expressly reserves the right
to add, combine, or remove any Investment Subaccount of the Variable
Annuity Account as it may hereafter deem necessary or appropriate; be it
FURTHER RESOLVED, that the President or any Vice President, and each of
them, with full power to act without the others, be, and they hereby are,
severally authorized during the initial stages of the Variable Annuity
Account to allocate and contribute to the Variable Annuity Account, for a
limited period and without the purpose of funding annuities, funds which
the Company might otherwise invest, in accordance with the Insurance Law
for the purpose of commencing the Variable Annuity Account's operation
and/or to meet any minimum capital requirements of the Investment Company
Act of 1940; provided, however, that the aggregate amount net of
withdrawals shall not exceed the least of (x) $500,000; (y) one percent of
the Company's admitted assets as of December 31 next preceding; or (z) five
percent of the Company's surplus to policyholders as of the date of
contribution; be it
FURTHER RESOLVED, that the President or any Vice President, and each of
them, with full power to act without the others, be, and they hereby are,
severally authorized to transfer cash from time to time between the
Company's general account and the Variable
3
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Annuity Account as deemed necessary or appropriate and consistent with the
terms of the Contracts; provided, however, there shall at all times be
maintained in the Variable Annuity Account assets with a value at least
equal to the reserves and other contract liabilities with respect to the
Variable Annuity Account; be it
FURTHER RESOLVED, that the Board of Directors of the Company reserves the
right to change the designation of the Variable Annuity Account hereafter
to such other designation as it may deem necessary or appropriate; be it
FURTHER RESOLVED, that the President or any Vice President, and each of
them, with full power to act without the others, with such assistance from
the Company's independent certified public accountants, legal counsel and
independent consultants or others as they may require, be, and they hereby
are, severally authorized and directed to take all action necessary to: (a)
register the Variable Annuity Account as a unit investment trust under the
Investment Company Act of 1940; (b) register the Contracts in such amounts,
which may be an indefinite amount, as the said officers of the Company
shall from time to time deem appropriate under the Securities Act of 1933;
and (c) take all other actions which are necessary or appropriate in
connection with the offer and sale of said Contracts and the operation of
the Variable Annuity Account in order to comply with the
4
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Securities Act of 1933, the Securities Exchange Act of 1934, the Investment
Company Act of 1940, and all other applicable federal, state or local laws,
and the rules and regulations promulgated thereunder, including the filing
of any amendments or supplements to registration statements, any
undertakings and any applications for exemptions from the Investment
Company Act of 1940 or other applicable federal laws or local laws as the
said officers of the Company shall deem necessary or appropriate; be it
FURTHER RESOLVED, that the President or any Vice President, and each of
them, with full power to act without the others, be, and they hereby are,
severally authorized and empowered to prepare, execute and cause to be
filed with the Securities and Exchange Commission, on behalf of Variable
Annuity Account, a Notification of Registration under the Investment
Company Act of 1940, and any and all amendments or supplements to the
foregoing on behalf of the Variable Annuity Account and the Company and on
behalf of and as attorneys-in-fact for the principal executive officer, the
principal financial officer, the principal accounting officer and/or any
other officer of the Company; be it
FURTHER RESOLVED, that William J. Olvany, Jr., President of the Company, be
and hereby is, duly appointed as agent for the service of process in
connection with any registration statement
5
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to be filed with the Securities and Exchange Commission; be it
FURTHER RESOLVED, that the President or any Vice President, and each of
them, with full power to act without the others, be, and they hereby are,
severally authorized on behalf of the Variable Annuity Account and on
behalf of the Company to take any and all action that any of them may deem
necessary or appropriate in connection with the offer and sale of the
Contracts, including the preparation and filing of any registrations or
qualifications, whether in respect of the Company, its officers, agents and
employees, or of the Contracts, under the insurance and securities laws of
any of the states of the United States of America and all other necessary
or appropriate jurisdictions, and in connection therewith to prepare,
execute, deliver and file all applications, reports, undertakings,
resolutions, consents to service of process, and other documents and
instruments as may be necessary or appropriate under laws of any such
jurisdiction and to take any and all other actions which the said officers
or legal counsel of the Company may deem necessary or appropriate
(including entering into whatever agreements and contracts may be
necessary) in order to establish or maintain such registrations or
qualifications or exemptions therefrom; be it
FURTHER RESOLVED, that the attached uniform form of corporate resolution
regarding the offering of the sale of securities in
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various states be, and it hereby is, adopted with respect to the offering
and sale of the Contracts in such states or other jurisdictions as may be
deemed necessary or appropriate; be it
FURTHER RESOLVED, that the President or any Vice President, and each of
them, with full power to act without the others, be, and they hereby are,
severally authorized on behalf of the Company to execute and file
irrevocable written consents in connection with the Variable Annuity
Account to be used in such states wherein such consents to service of
process may be requisite under the insurance or securities laws therein in
connection with said registration or qualification of the Contracts and to
appoint the appropriate state official, or such other person as may be
allowed by said insurance or securities laws, agent of the Company for the
purpose of receiving and accepting process; be it
FURTHER RESOLVED, that the President or any Vice President, and each of
them, with full power to act without the others, be, and they hereby are,
severally authorized to establish procedures under which the Company will
institute procedures for providing pass through voting rights for Owners of
the Contracts with respect to voting securities owned by the Variable
Annuity Account; be it
7
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FURTHER RESOLVED, that the President or any Vice President, and each of
them, with full power to act without the others, be, and they hereby are,
severally authorized to execute such agreement or agreements in such form
and with such terms as they or any of them may deem necessary or
appropriate (i) with CNL, Inc. ("CNL") or any other qualified entity
pursuant to which CNL or such other entity will be appointed to act as
principal underwriter and distributor of the Contracts and (ii) with one or
more qualified banks or other qualified entities pursuant to which any such
bank or other qualified entity will be appointed to provide administrative
and/or custodial services in connection with the establishment and
maintenance of the Variable Annuity Account and the design, issuance and
administration of the Contracts; be it
FURTHER RESOLVED, that, because it is expected that the Variable Annuity
Account will invest solely in the securities issued by one or more
investment companies registered under the Investment Company Act of 1940,
the President or any Vice President, and each of them, with full power to
act without the others, be, and they hereby are, severally authorized to
execute whatever agreement or agreements on behalf of the Company with any
such investment company or any holder or agent for the holder of any
securities thereof as may be necessary or appropriate to enable such
investments to be made; be it
8
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FURTHER RESOLVED, that the President or any Vice President, and each of
them, with full power to act without the others, be, and they hereby are,
severally authorized to execute and deliver such agreements and other
documents and do all such acts and things as may be deemed necessary or
appropriate to carry out the foregoing resolutions and the intent and
purposes thereof; be it
FURTHER RESOLVED, that the Company shall, and it hereby does, adopt and
establish the following Standards of Suitability with regard to the
Contracts:
1. Unless the Company has reasonable grounds to believe the purchase
of a variable annuity contract is suitable for the applicant on the basis
of information concerning the applicant's insurance and investment
objectives, financial situations and needs, and any other information known
to the Company or the agent making the recommendation;
a. no recommendation shall be made to an applicant to purchase
such Contract and
b. no such Contract shall be issued.
2. The Company will make it clear to the applicant that, depending on
the investment performance of the Investment Subaccounts in which he elects
to have his premium
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invested, the cash value of his Contract may increase or decrease.
3. Each applicant will be provided with a current prospectus on the
Contract and the Subaccounts available for investment.
10
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I N T R A M E R I C A
Intramerica Life Insurance Company
9 Ramland Road, Orangeburg, New York 10962
FLEXIBLE PREMIUM VARIABLE
DEFERRED ANNUITY
Right to Make Additional Premium Payments
Subject to Certain Conditions.
We Will Pay an Annuity Subject to the Provisions
of this Contract Beginning on the Maturity Date.
The Accumulated Value May Increase or Decrease
in Accordance With the Experience of the Selected Subaccounts.
Death Benefits Are Provided Under This Contract
Prior to the Maturity Date.
Annuity Benefits Are Not Guaranteed as to Dollar
Amount Prior to the Maturity Date.
Annuity Income Options Are Available.
Nonparticipating.
Thirty-Day Right to Examine Contract - You may return this Contract to Us
for any reason within thirty days of the date You receive it. Upon receipt
of the Contract, We will return the premium plus or minus any investment
experience on amounts allocated to the subaccounts and interest earned on
amounts allocated to the General Account, determined on the Valuation Date
You return the Contract to Us. The Contract will be void as of the
Contract Date.
Signed for the Company in Orangeburg, New York, on the Contract Date.
Alexis M. Berg Richard G. Petitt
Secretary President
This is a Legal Contract Between You and Us. Please Read Your Contract
Carefully.
S1802
<PAGE>
Page 2
CONTRACT SPECIFICATIONS
FLEXIBLE PREMIUM VARIABLE DEFERRED ANNUITY
INITIAL PREMIUM
SEPARATE ACCOUNT - INTRAMERICA VARIABLE ANNUITY ACCOUNT
ALLOCATION OF NET PREMIUM
SCUDDER GROWTH AND INCOME SCUDDER MONEY MARKET
SCUDDER BALANCED SCUDDER BOND
SCUDDER INTERNATIONAL SCUDDER CAPITAL GROWTH
SCUDDER GLOBAL DISCOVERY
GENERAL ACCOUNT 1 YEAR GENERAL ACCOUNT 3 YEAR
CONTRACT DATE ANNUITANT
CONTRACT NUMBER AGE AT ISSUE
PREMIUM SEX
MATURITY DATE OWNER
<PAGE>
TABLE OF CONTENTS
Page
Summary 5
Definitions 6-7
Premiums 7
The Variable Annuity Account 8-9
The General Account 9
Accumulated Value 9-10
Annuity Benefit 11
Charges 12
General Provisions 12-14
Ownership 14
Beneficiary Provisions 14
Payments on Death 15
Annuity Income Options 16-19
Basis of Calculations 20
Individual Retirement Provision 21-22
Qualified Plan Provision 22
Page 3
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INDEX
Page
Accounting Procedures 20
Allocation of Net Premium(s) 7
Annuitant 11
Annuity Change Option 11
Annuity Income Option Conditions 16
Annuity Payments 11
Assignment 13
Beneficiary Designation 14
Change in Subaccounts 8
Change of Beneficiary 14
Change of Investment Policy 8
Change of Owner 14
Changes to the Contract 12
Conformity With Laws 14
Contract Administration Charge 12
Contract Date 13
Contract, The 12
Death of Annuitant 15
Death of Owner 15
Declaration of Rates and Periods 9
Effective Date 12
Full Surrender 9
How Accumulated Value is Calculated 20
Interest 9
Joint Ownership 14
Limitations on Additional Premium(s) 7
Maturity Date 11
Misstatements 13
Mortality and Expense Risk Charge 12
Non-Individual Ownership 14
Partial Surrender 10
Premium Tax 12
Proof of Death 15
Protection of Death Benefit 15
Records Maintenance Charge 12
Reports to Owner 14
Right to Defer Payment 13
Rights Reserved by the Company 8
Simultaneous Death of Owner and Annuitant 15
Subaccounts 8
Taxes 12
Transfers 10
Variable Annuity Account 8
Page 4
<PAGE>
SUMMARY
This Contract is a flexible premium variable deferred annuity. It provides
a Death Benefit to the Owner if the Annuitant dies prior to the Maturity
Date. It also provides an Annuity Benefit to the Owner if the Annuitant is
living on the Maturity Date. The initial premium for this Contract is
shown on Page 2. At any time before the Maturity Date and while the
Annuitant is alive, the Owner may make additional premium payments subject
to the limitations described on Page 7 of this Contract.
The Accumulated Value of this Contract will vary according to how the Owner
allocates the Net Premium(s). Allocations may be made to the General
Account and/or to one or more of the subaccounts of the Variable Annuity
Account. Each Subaccount invests its assets in one of a series of
registered investment company funds. If amounts are allocated to the
General Account, the minimum rate of accumulation will be fixed and
guaranteed. If amounts are allocated to one or more of the subaccounts,
the amount of the Accumulated Value will not be guaranteed and will vary
with the investment performance of the subaccount(s) selected.
The Owner may make a partial surrender of this Contract at any time prior
to the Maturity Date. Any such surrender will cause the Annuity Benefit to
be reduced.
If the Owner dies prior to both the Maturity Date and the Annuitant's death
and that Owner is not the Annuitant, the Contract may be continued for a
period no longer than five years following the date of the Owner's death.
This is a brief description of the provisions of this Contract. They are
fully described on the remaining pages.
Page 5
<PAGE>
DEFINITIONS
ACCUMULATED VALUE is the total of the value of the amounts in any
subaccount and/or the General Account for this
Contract as of any Valuation Date prior to the
Maturity Date.
AGE means the age of the Annuitant on the birthday
nearest to the Contract Anniversary.
ANNUITANT is the person whose life is used to determine the
duration and amount of any annuity payments and is
shown on Page 2.
ANNUITY BENEFIT is a series of payments to be made under any
Annuity Income Option scheduled to begin on the
Maturity Date.
ANNUITY INCOME OPTION is any method of receiving annuity payments as
described on Page 16.
BENEFICIARY is the person named in the application or by later
designation to receive any benefits under this
Contract if the Owner dies before the Annuitant
and there is no Joint Owner with a right of
survivorship.
COMPANY, WE, US is Intramerica Life Insurance Company.
CONTRACT YEAR, shall be measured from the Contract Date shown on
MONTH, Page 2.
ANNIVERSARY
DEATH BENEFIT is the amount We will pay to the Owner if the
Annuitant dies before the Maturity Date. It will
be equal to the greater of the premiums(s) paid
less any partial surrenders, or the Accumulated
Value calculated on the date We receive proof of
death.
DECLARATION PERIOD is a stated period of time, not less than one year
or more than five years, during which a declared
interest rate of not less than 3.5% may be in
effect on amounts in the General Account.
GENERAL ACCOUNT is the General Account of Intramerica Life
Insurance Company which provides a minimum rate of
accumulation that will be fixed and guaranteed.
JOINT ANNUITANT any person whose life is used, in addition to that
of the Annuitant, to determine annuity payments.
MATURITY DATE is the date the Annuity Benefit is scheduled to
begin if the Annuitant is living.
NET PREMIUM is equal to the premium less premium taxes, if
any.
NONPARTICIPATING means this Contract does not share in the profits
or surplus of the Company, and no dividends are
payable.
OWNER, JOINT is the person who owns and has all rights under
OWNER, YOU this Contract and is the person scheduled to
receive the Annuity Benefit. Joint Ownership will
be presumed to be as joint tenants with right of
survivorship unless otherwise stated.
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DEFINITIONS (Continued)
VALUATION DATE is each day on which valuation of the
subaccount(s) is required by applicable law and
currently includes each day the New York Stock
Exchange is open for trading.
VALUATION PERIOD is the period that starts at the close of a
Valuation Date and ends at the close of the next
succeeding Valuation Date.
VARIABLE ANNUITY is the separate account of Intramerica Life
ACCOUNT Insurance Company as shown on Page 2.
WRITTEN NOTICE is notice in writing to Us at our Home Office, the
address for which is 9 Ramland Road, Orangeburg,
New York 10962.
PREMIUMS
ALLOCATION OF NET PREMIUM(S)
The Owner determines the allocation of the Net Premium(s) to the General
Account and/or one or more of the subaccounts of the Variable Annuity
Account. All allocations must be in whole percentages which add up to
100%.
The Accumulated Value will vary with the investment performance of each
subaccount to which the Owner allocates Net Premium(s). Net Premium(s)
that are allocated to the General Account, the minimum rate of accumulation
will be fixed and guaranteed. We may, at our sole discretion, credit a
higher rate to such amounts. We reserve the right to reject any allocation
of amounts which would cause the value in the General Account to exceed
$250,000.
LIMITATIONS ON ADDITIONAL PREMIUM(S)
While the Annuitant is living, the Owner may make additional premium
payments at any time and in any amount prior to the Maturity Date.
Additional premiums will be allocated in the same manner as the most recent
allocation unless We receive other instructions from the Owner.
We reserve the right to:
a) reject any premium payment which would cause the total premiums paid
to exceed $1,000,000;
b) limit the minimum amount of each premium payment to $1,000; and
c) limit the frequency of premium payments to four times per Contract
Year.
Annuity accumulations and distributions are taxed differently under federal
tax law based upon whether the funds are qualified or nonqualified and, in
some cases, when funds were first contributed to an annuity contract and by
whom they were contributed. These various tax types impose significantly
different tax-reporting responsibilities on Us. We reserve the right to
and will reject any additional premiums that are not of the same tax type
as the initial premium.
Page 7
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THE VARIABLE ANNUITY ACCOUNT
VARIABLE ANNUITY ACCOUNT
The Variable Annuity Account is a separate investment account established
by Us in accordance with New York law. Although the assets of this account
are owned by Us and will be used to provide values and benefits under this
annuity, these assets are held separately from our other assets and are not
part of our general account. That portion of the assets of the Variable
Annuity Account equal to the reserves and other Contract liabilities will
not be charged with the liabilities arising out of any other business that
We may conduct. We have the right to transfer to our general account any
assets of the Variable Annuity Account that are in excess of such reserves
and other liabilities.
SUBACCOUNTS
The Variable Annuity Account consists of subaccounts, each of which invests
in shares of a designated registered investment company fund. The income,
if any, and gains and losses, realized or unrealized, of such subaccounts
shall be credited to or charged against the amounts allocated to such
subaccount without regard to other income, gains, or losses of the Variable
Annuity Account or the Company.
Each distribution of income, dividends, and capital gains from a subaccount
will be reinvested in shares of the fund.
The values and benefits of this Contract depend on the investment
performance of the subaccount(s) You select. You bear the investment risk
for amounts allocated to the subaccount(s). We do not guarantee their
investment performance.
CHANGE IN SUBACCOUNTS
We can add, remove, or combine subaccounts as permitted by law. When a
subaccount is removed, We have the right to substitute a different
subaccount.
We can also add, remove, or substitute subaccount investments as permitted
by law.
We will notify You in advance of liquidation or removal of a subaccount in
which any of your Contract values are invested. We will ask You to tell Us
how these funds should be reallocated. In the absence of instructions, We
will transfer the amount in the liquidated subaccount to the Money Market
subaccount.
CHANGE OF INVESTMENT POLICY
The investment policy of the Variable Annuity Account will not be changed
unless the change has been approved by the Superintendent of Insurance of
the State of New York.
RIGHTS RESERVED BY THE COMPANY
We reserve the right to take certain actions in compliance with applicable
laws, and, if required, with approval of the Owner. These actions are:
a) to create new separate investment accounts;
b) to combine or substitute separate investment accounts;
c) to transfer all or part of the assets of the Variable Annuity Account
to another separate investment account;
Page 8
<PAGE>
THE VARIABLE ANNUITY ACCOUNT (Continued)
d) to operate the Variable Annuity Account as a management investment
company and to charge investment advisory fees under the Investment Company
Act of 1940 or in any other form permitted by law; and
e) to deregister the Variable Annuity Account under the Investment
Company Act of 1940 if registration is no longer required.
THE GENERAL ACCOUNT
INTEREST
Any funds allocated to the General Account will earn interest at the rate
of at least .28709% per month, which equates to the guaranteed rate of 3.5%
per year.
DECLARATION OF RATES AND PERIODS
We may declare interest rates greater than 3.5% at our sole discretion.
Any such declarations of interest will be for periods of from one to five
years. We may maintain up to five Declaration Periods for new issues and
transfers from the subaccounts. If You allocate Net Premium or make
transfers to the General Account, You must specify a Declaration Period.
The declared interest rate in effect on the day You allocate funds to the
General Account will be guaranteed for the Declaration Period selected.
This rate will apply to both the amount allocated and the interest credited
on such amount. Each allocation to the General Account will have a special
interest rate and Declaration Period associated with it.
Prior to the expiration of any Declaration Period to which You allocated
funds, You must tell Us how the funds are to be reallocated. If We do not
receive instructions from You by the end of the Declaration Period, We will
transfer such funds to the Money Market subaccount.
ACCUMULATED VALUE
On any Valuation Date on or before the Maturity Date, the Accumulated Value
is the total of the value of the amounts in the selected subaccount(s)
and/or the General Account for this Contract. The amount of Accumulated
Value depends on the total of premium(s) paid, the investment performance
of the selected subaccount(s), interest earned on amounts allocated to the
General Account, any charges, and any deductions for partial surrenders.
Premium(s) allocated to the subaccounts will result in your Accumulated
Value increasing or decreasing according to the investment performance of
such subaccounts.
FULL SURRENDER
The Owner may, by Written Notice, surrender this Contract at any time prior
to the Maturity Date and while the Annuitant is living. Upon surrender, We
will pay the Accumulated Value of this Contract in a lump sum and this
Contract will terminate.
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ACCUMULATED VALUE (Continued)
PARTIAL SURRENDER
At any time prior to the Maturity Date, you may request in writing a
partial surrender of this Contract. We reserve the right to impose the
following conditions:
a) The amount surrendered must be at least $500.
b) The remaining Accumulated Value must be at least $5,000.
c) If You have funds invested in more than one subaccount, You must
instruct Us as to what amount(s) should be withdrawn from which
subaccount(s).
d) Funds allocated to the General Account will be withdrawn
proportionately from all Declaration Periods of the General Account.
Within each Declaration Period, surrenders will be on a first-in, first-out
basis.
TRANSFERS
The Owner may transfer all or a portion of the Contract's value among the
subaccounts and the General Account. Transfers may be made:
a) among subaccounts at any time.
b) from one or more of the subaccounts to the General Account at any
time, provided the value in the General Account after the transfer will not
exceed $250,000.
c) from the General Account to the subaccounts only at the end of the
Declaration Period associated with the funds being transferred.
All transfers made at the same time will be treated as one request. We
will deduct a $20 charge for the third and each subsequent transfer
requests in any Contract Year.
Allocation of Net Premium(s) are not considered transfers, nor are
reallocations of funds from or within the General Account at the end of a
Declaration Period.
Page 10
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ANNUITY BENEFIT
ANNUITANT
The Annuitant will be as named in the application and once the Contract is
issued, cannot be changed. The Annuitant is the person whose life will be
used to determine the duration and amount of any Annuity Benefit.
MATURITY DATE
The Maturity Date will generally be stated on the application. If it is
not indicated on the application, We will use the later of the Contract
Anniversary nearest the Annuitant's 80th birthday or ten years from the
Contract Date.
ANNUITY CHANGE OPTION
The Owner may elect to change the Maturity Date and/or the Annuity Income
Option. Any such request must be made in writing prior to the Maturity
Date and sent to Us at our Home Office. The new Maturity Date may be any
future Contract Anniversary not later than the later of:
a) the Contract Anniversary nearest the Annuitant's 80th birthday; or
b) ten years from the next Contract Anniversary.
ANNUITY PAYMENTS
On the Maturity Date, We will calculate the Accumulated Value of this
Contract. The Annuity Benefit will then be determined based on the Annuity
Income Option selected, the age and sex of the Annuitant (and the age and
sex of the Joint Annuitant if Option 2 is selected), and the amount of
Accumulated Value. If no Annuity Income Option has been selected, We will
pay benefits under Option 1. The first annuity payment will be made to the
Owner within seven days after the Maturity Date. All payments by Us are
payable at our Home Office or by mail from our Home Office.
If payment of an Annuity Benefit is contingent upon the Annuitant's living,
We may require proof that the Annuitant is alive prior to any scheduled
payment date.
Page 11
<PAGE>
CHARGES
CONTRACT ADMINISTRATION CHARGE
A Contract Administration Charge is deducted from the values in the
subaccount(s) on a daily basis. The charge will be made in an amount up to
.000008260 of the Contract's value in each such subaccount per day which
corresponds to a maximum annual rate of .30%.
MORTALITY AND EXPENSE RISK CHARGE
A Mortality and Expense Risk Charge is deducted from the values in the
subaccount(s) on a daily basis. The charge will be made in an amount up to
.000019275 of the Contract's value in each such subaccount per day which
corresponds to a maximum annual rate of .70%.
RECORDS MAINTENANCE CHARGE
On each Contract Anniversary, We may deduct a Records Maintenance Charge of
up to $40.00. This charge will be deducted proportionately from the values
in each subaccount and each Declaration Period in the General Account on
such date.
PREMIUM TAX
Any premium tax or franchise tax payable by Us on this Contract will be
deducted from each premium payment.
TAXES
If at any time We incur any tax liability resulting from the assets held by
or premiums allocated to the Variable Annuity Account, We may charge the
Variable Annuity Account for such tax.
GENERAL PROVISIONS
THE CONTRACT
We have issued this Contract in consideration of the application and
payment of the initial premium. The Contract with the application
attached, any endorsements and the financial questionnaire, if applicable,
make the entire Contract. No statement made by You or on Your behalf shall
be used in defense of a claim under the Contract unless it is contained in
the written application. All statements made by You or contained in the
application shall be deemed representations and not warranties.
CHANGES TO THE CONTRACT
This Contract may be changed in writing by mutual agreement between the
Owner and the Company. Only the President, a Vice President, or the
Secretary of the Company is authorized to change or waive the terms of the
Contract.
EFFECTIVE DATE
The Effective Date will be within two business days after the full initial
premium and completed application have been received at our Home Office.
The Owner may request a premium receipt signed by an officer of the
Company. No coverage will take effect until the check or draft for the
premium is honored.
Page 12
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GENERAL PROVISIONS (Continued)
CONTRACT DATE
The Contract Date will be used to determine Contract Months, Contract
Anniversaries, Contract Years, and age of the Annuitant. The Contract Date
will be the same as the Effective Date unless the Effective Date is the
29th, 30th, or 31st of the month, in which case the Contract Date will be
the 28th of the same month.
MISSTATEMENTS
If the Annuitant's age or sex has been misstated on the application, We
will recalculate the Annuity Benefit to that which the Accumulated Value
would have established had the Annuitant's age or sex been correctly
stated. In the case of Option 2, if the Joint Annuitant's age or sex has
been misstated, a similar adjustment will be made. If We underpay or
overpay the Annuity Benefit because of a misstatement, the amount thereof
with interest at 6% per year will be added to or subtracted from the
current or next succeeding payment.
ASSIGNMENT
You may assign the right to receive annuity payments and also assign the
Contract as collateral security. We are not responsible for the adequacy
of any assignment. When an assignment is filed with and recorded by Us at
our Home Office, your rights and those of the Beneficiary will be subject
to it.
A Qualified Contract is not assignable.
RIGHT TO DEFER PAYMENT
We will ordinarily pay any amount payable as a result of surrender or death
within seven days after We receive a written request in a form satisfactory
to Us.
Payment of any Accumulated Value or Death Benefit from amounts allocated to
the subaccounts may be deferred:
a) for any period during which the New York Stock Exchange is closed for
trading (except for normal weekend or holiday closings) or trading is
restricted as determined by the Securities and Exchange Commission;
b) when the Securities and Exchange Commission has determined that a
state of emergency exists which may make such payment impractical; or
c) when the Securities and Exchange Commission permits by an order the
postponement for the protection of Contract Owners.
Transfers also may be deferred for the reasons given above.
Payment of any Accumulated Value from amounts allocated to the General
Account may be deferred for a period of six months after a Written Notice
is received.
If a check or draft has been submitted to Us on this Contract, We have a
right to defer any payment of Accumulated Value or Death Benefit until such
check or draft has been honored.
Page 13
<PAGE>
GENERAL PROVISIONS (Continued)
REPORTS TO OWNER
Annual Statement - We will send the Owner an Annual Statement each year.
It will reflect the Accumulated Value, any additional premium payment(s),
any partial surrender(s), and any charges made during the year.
Fund Annual Report - The Owner will also receive an annual report for each
Portfolio of the registered investment company fund.
CONFORMITY WITH LAWS
To the extent this Contract conflicts with any applicable laws or the
requirements of the Internal Revenue Service concerning distributions on
death, this Contract shall be considered to be amended to conform with such
requirements.
OWNERSHIP
CHANGE OF OWNER
The Owner may choose a new Owner at any time while the Annuitant is living
by filing a Written Notice with our Home Office. The change will take
effect on the date the notice was signed. The naming of a new Owner will
void any prior ownership designation. We will not be liable for any
payment which may have been made or action taken before the notice is
recorded at our Home Office.
JOINT OWNERSHIP
If a Joint Owner is named at any time, the Owners will be presumed to be as
joint tenants with right of survivorship, unless otherwise stated.
NON-INDIVIDUAL OWNERSHIP
If an Owner of a Contract is not an individual, the Annuitant shall be
treated as the beneficial Owner.
BENEFICIARY PROVISIONS
BENEFICIARY DESIGNATION
As long as the Annuitant is living, the Owner will receive any benefits of
this Contract. If all Owners die before the Annuitant, the ownership
rights belong to the Beneficiary.
CHANGE OF BENEFICIARY
While the Annuitant is living, the Owner may change the Beneficiary by
filing a Written Notice with Us at our Home Office; however, a Beneficiary
named irrevocably may not be changed without the written consent of that
Beneficiary. The change will take effect on the date the Written Notice
was signed. Any Death Benefit paid before We record a change of
Beneficiary will not be subject to that change.
Page 14
<PAGE>
PAYMENTS ON DEATH
DEATH OF ANNUITANT
If the Annuitant dies prior to the Maturity Date and this Contract has not
been surrendered, We will pay to the Owner the greater of the premium(s)
paid less any partial surrenders, or the Accumulated Value calculated on
the date We receive proof of death. This amount will be paid in a lump
sum. On a Nonqualified Contract owned by a natural person, the Owner may
elect to continue the Contract, and the Owner becomes the Annuitant.
DEATH OF OWNER
If any Owner dies prior to both the Maturity Date and the Annuitant's
death, and that Owner is not the Annuitant, the Contract may be continued
for a period no longer than five years following the date of the Owner's
death. If a lump sum payment is elected, the Accumulated Value calculated
on the date We receive proof of the Owner's death will be paid to the Joint
Owner if applicable, otherwise to the Beneficiary. If no Beneficiary is
named, We will make the payment to the estate of the Owner. If the Joint
Owner or the Beneficiary is the surviving spouse, he or she may elect to
continue the Contract as if he or she were the original Owner.
If the Beneficiary dies within thirty days after the Owner's death and We
have not yet paid the Death Benefit, it will be paid as if the Beneficiary
had died first unless the Owner requests otherwise.
SIMULTANEOUS DEATH OF OWNER AND ANNUITANT
If both the Owner and the Annuitant die at the same time while the Contract
is in force, and there is no surviving Owner, We will pay to the
Beneficiary the greater of the premium(s) paid less any partial surrenders
or the Accumulated Value calculated on the date We receive proof of the
Annuitant's death. This amount will be paid in a lump sum. If no
Beneficiary is named, We will pay the amount to the estate of the Owner as
of the date We receive proof of the Annuitant's death.
If the Annuitant dies within thirty days after the Owner's death and We
have not yet paid the Death Benefit, it will be paid as if the Annuitant
had died first unless the Owner requests otherwise.
PROOF OF DEATH
The amount payable on death will be paid when We receive due proof of such
death at our Home Office. Claims forms will be made available upon
request. All payments by Us are payable at our Home Office or by mail from
our Home Office.
The amount of any assignment made on this Contract prior to the Maturity
Date will be paid to the assignee first in a lump sum. Any balance payable
by Us will then be paid as indicated.
PROTECTION OF DEATH BENEFIT
Except as permitted by law, no payment of the Death Benefit or interest
thereon will be subject to the claim of creditors of the Beneficiary or to
legal process against the Beneficiary.
Page 15
<PAGE>
ANNUITY INCOME OPTIONS
The Accumulated Value of this Contract may be applied under one of the
following Options:
Option 1. LIFE ANNUITY WITH INSTALLMENT REFUND - The amount will be
distributed in equal installments to the Owner for as long as the Annuitant
is living. If the Annuitant dies before the sum of the installments paid
equals or exceeds the Accumulated Value on the Maturity Date, We will
continue to pay installments to the Owner (or to the Beneficiary if the
Owner is not living) until the sum of such installments equals or exceeds
the Accumulated Value on the Maturity Date.
Option 2. JOINT AND SURVIVOR LIFE WITH INSTALLMENT REFUND - The amount will
be distributed in equal installments to the Owner for as long as either the
Annuitant or the Joint Annuitant is living. If both of the Annuitants die
before the sum of the installments paid equals or exceeds the Accumulated
Value on the Maturity Date, We will continue to pay installments to the
Owner (or the Beneficiary if the Owner is not living) until the sum of such
installments equals or exceeds the Accumulated Value on the Maturity Date.
Option 3. INSTALLMENTS FOR LIFE - The amount will be distributed in equal
installments to the Owner only as long as the Annuitant is living. When
the Annuitant dies, payments cease.
Option 4. OTHER ANNUITY INCOME OPTIONS - The amount may be distributed
under any other Annuity Income Option available at the time a method of
payment is selected.
The Annuity Benefit provided under this Contract on the Maturity Date will
not be less than that available using the Accumulated Value to purchase any
single premium immediate annuity contract being offered by the Company to
the same class of annuitants.
The guaranteed minimum annuity payment amounts (per $1,000 of Accumulated
Value) are based on the 1983a Individual Annuity Mortality Table.
ANNUITY INCOME OPTION CONDITIONS:
Any amount payable under an Annuity Income Option will be subject to the
following conditions:
a) The effective date of an Annuity Income Option will be the Maturity
Date.
b) The amount will be paid in a lump sum if it is less than $2,000 or is
insufficient to produce monthly payments of at least $20.
c) The amount of installment payments will be determined by the age and
sex of the Annuitant (and, if Option 2 is selected, by the age and sex of
the Joint Annuitant) on the Maturity Date.
d) Proof satisfactory to Us of the identity, birth date and sex of any
person on whose life an Annuity Benefit depends must be provided to Us
before any annuity payments will be made.
e) If the Owner has assigned this Contract prior to the Maturity Date,
We will first pay to the assignee in one sum the amount to which he or she
is entitled. We will then apply any remaining balance to the chosen
Annuity Income Option.
Page 16
<PAGE>
OPTION 1. MONTHLY INSTALLMENTS FOR LIFE - INSTALLMENT REFUND ANNUITY
Per $1,000 of Accumulated Value
Age Male Female Age Male Female Age Male Female
1 3.11 3.06 35 3.70 3.54 69 6.35 5.79
2 3.12 3.07 36 3.73 3.57 70 6.52 5.94
3 3.12 3.07 37 3.77 3.60 71 6.69 6.09
4 3.13 3.08 38 3.81 3.63 72 6.88 6.26
5 3.14 3.09 39 3.84 3.66 73 7.07 6.44
6 3.15 3.10 40 3.88 3.69 74 7.27 6.63
7 3.16 3.10 41 3.92 3.72 75 7.49 6.83
8 3.17 3.11 42 3.97 3.76 76 7.72 7.04
9 3.19 3.12 43 4.01 3.80 77 7.96 7.26
10 3.20 3.13 44 4.06 3.83 78 8.21 7.51
11 3.21 3.14 45 4.11 3.87 79 8.47 7.76
12 3.22 3.15 46 4.16 3.92 80 8.74 8.03
13 3.23 3.16 47 4.21 3.96 81 9.03 8.32
14 3.25 3.17 48 4.26 4.01 82 9.34 8.61
15 3.26 3.19 49 4.32 4.06 83 9.65 8.93
16 3.28 3.20 50 4.38 4.11 84 9.98 9.27
17 3.29 3.21 51 4.45 4.16 85 10.34 9.62
18 3.31 3.22 52 4.51 4.22 86 10.69 9.99
19 3.32 3.24 53 4.58 4.27 87 11.07 10.38
20 3.34 3.25 54 4.66 4.34 88 11.47 10.78
21 3.36 3.26 55 4.73 4.40 89 11.90 11.19
22 3.38 3.28 56 4.81 4.47 90 12.34 11.63
23 3.40 3.29 57 4.90 4.54 91 12.80 12.08
24 3.42 3.31 58 4.99 4.62 92 13.31 12.54
25 3.44 3.33 59 5.08 4.70 93 13.86 13.02
26 3.46 3.35 60 5.18 4.78 94 14.41 13.54
27 3.48 3.36 61 5.29 4.87 95 15.02 14.08
28 3.51 3.38 62 5.40 4.96 96 15.69 14.63
29 3.53 3.40 63 5.51 5.06 97 16.45 15.24
30 3.56 3.42 64 5.63 5.17 98 17.22 15.93
31 3.58 3.45 65 5.76 5.28 99 18.07 16.71
32 3.61 3.47 66 5.90 5.39 l00 19.04 17.51
33 3.64 3.49 67 6.04 5.52
34 3.67 3.52 68 6.19 5.65
Page 17
<PAGE>
OPTION 2. MONTHLY INSTALLMENTS FOR LIFE - JOINT & SURVIVOR 100%
Per $1,000 of Accumulated Value
Male Female Age
Age 45 46 47 48 49 50 51 52 53
45 3.68 3.71 3.73 3.75 3.77 3.79 3.81 3.83 3.85
46 3.70 3.72 3.74 3.76 3.79 3.81 3.83 3.85 3.87
47 3.71 3.73 3.76 3.78 3.80 3.83 3.85 3.87 3.90
48 3.72 3.75 3.77 3.80 3.82 3.85 3.87 3.89 3.92
49 3.73 3.76 3.79 3.81 3.84 3.86 3.89 3.92 3.94
50 3.75 3.77 3.80 3.83 3.85 3.88 3.91 3.94 3.96
51 3.76 3.79 3.81 3.84 3.87 3.90 3.93 3.96 3.99
52 3.77 3.80 3.83 3.86 3.89 3.92 3.95 3.98 4.01
53 3.78 3.81 3.84 3.87 3.90 3.93 3.96 3.99 4.03
54 55 56 57 58 59 60 61 62
54 4.08 4.11 4.15 4.18 4.21 4.25 4.28 4.31 4.34
55 4.10 4.14 4.17 4.21 4.24 4.28 4.31 4.34 4.38
56 4.12 4.16 4.20 4.23 4.27 4.31 4.34 4.38 4.41
57 4.14 4.18 4.22 4.26 4.30 4.34 4.38 4.41 4.45
58 4.16 4.20 4.24 4.28 4.32 4.37 4.41 4.45 4.49
59 4.18 4.22 4.26 4.31 4.35 4.39 4.44 4.48 4.53
60 4.19 4.24 4.28 4.33 4.37 4.42 4.47 4.51 4.56
61 4.21 4.25 4.30 4.35 4.40 4.45 4.50 4.55 4.60
62 4.22 4.27 4.32 4.37 4.42 4.47 4.52 4.58 4.63
63 64 65 66 67 68 69 70 71
63 4.72 4.77 4.83 4.88 4.93 4.98 5.03 5.08 5.13
64 4.75 4.81 4.87 4.92 4.98 5.04 5.09 5.15 5.20
65 4.78 4.84 4.91 4.97 5.03 5.09 5.15 5.21 5.26
66 4.81 4.88 4.94 5.01 5.07 5.14 5.20 5.27 5.33
67 4.84 4.91 4.98 5.05 5.12 5.19 5.26 5.32 5.39
68 4.87 4.94 5.01 5.09 5.16 5.23 5.31 5.38 5.45
69 4.89 4.97 5.04 5.12 5.20 5.28 5.36 5.43 5.51
70 4.91 4.99 5.07 5.15 5.24 5.32 5.40 5.49 5.57
71 4.93 5.02 5.10 5.18 5.27 5.36 5.45 5.54 5.62
72 73 74 75 76 77 78 79 80
72 5.77 5.86 5.96 6.05 6.13 6.21 6.29 6.37 6.44
73 5.82 5.93 6.02 6.12 6.22 6.31 6.40 6.48 6.55
74 5.88 5.98 6.09 6.19 6.30 6.40 6.49 6.58 6.67
75 5.92 6.04 6.15 6.26 6.37 6.48 6.59 6.69 6.78
76 5.97 6.09 6.21 6.33 6.45 6.56 6.68 6.79 6.89
77 6.01 6.13 6.26 6.39 6.52 6.64 6.76 6.89 7.00
78 6.05 6.18 6.31 6.45 6.58 6.71 6.85 6.98 7.10
79 6.08 6.22 6.36 6.50 6.64 6.78 6.93 7.07 7.20
80 6.11 6.25 6.40 6.54 6.69 6.85 7.00 7.15 7.29
Factors for any other ages and combinations will be provided upon request.
Page 18
<PAGE>
OPTION 3. MONTHLY INSTALLMENTS FOR LIFE
Dollar Amount Per $1,000 of Accumulated Value
Age Male Female Age Male Female Age Male Female
0 3.10 3.05 34 3.71 3.54 68 7.02 6.13
1 3.11 3.06 35 3.75 3.57 69 7.26 6.32
2 3.12 3.07 36 3.79 3.60 70 7.52 6.53
3 3.13 3.08 37 3.83 3.63 71 7.80 6.75
4 3.14 3.08 38 3.87 3.66 72 8.09 6.99
5 3.15 3.09 39 3.91 3.69 73 8.41 7.26
6 3.16 3.10 40 3.96 3.73 74 8.75 7.54
7 3.17 3.11 41 4.01 3.76 75 9.12 7.85
8 3.18 3.12 42 4.06 3.80 76 9.51 8.18
9 3.20 3.13 43 4.11 3.84 77 9.92 8.54
10 3.21 3.14 44 4.17 3.89 78 10.37 8.94
11 3.22 3.15 45 4.22 3.93 79 10.85 9.36
12 3.23 3.16 46 4.29 3.98 80 11.37 9.82
13 3.25 3.17 47 4.35 4.03 81 11.92 10.32
14 3.26 3.18 48 4.42 4.08 82 12.50 10.87
15 3.28 3.19 49 4.49 4.14 83 13.12 11.46
16 3.29 3.20 50 4.56 4.20 84 13.78 12.09
17 3.31 3.22 51 4.64 4.26 85 14.47 12.78
18 3.32 3.23 52 4.72 4.32 86 15.20 13.52
19 3.34 3.24 53 4.80 4.39 87 15.98 14.31
20 3.36 3.26 54 4.89 4.46 88 16.79 15.16
21 3.38 3.27 55 4.99 4.54 89 17.66 16.05
22 3.40 3.29 56 5.09 4.62 90 18.58 17.00
23 3.42 3.31 57 5.20 4.71 91 19.56 17.98
24 3.44 3.32 58 5.32 4.80 92 20.61 19.01
25 3.46 3.34 59 5.44 4.90 93 21.74 20.08
26 3.48 3.36 60 5.57 5.00 94 22.97 21.18
27 3.51 3.38 61 5.71 5.11 95 24.29 22.34
28 3.53 3.40 62 5.86 5.23 96 25.73 23.55
29 3.56 3.42 63 6.02 5.36 97 27.30 24.84
30 3.59 3.44 64 6.20 5.49 98 29.05 26.25
31 3.62 3.46 65 6.38 5.64 99 30.99 27.82
32 3.65 3.49 66 6.58 5.79 l00 33.16 29.59
33 3.68 3.51 67 6.79 5.95
Page 19
<PAGE>
BASIS OF CALCULATIONS
The reserves under this Contract are not less than the minimum required by
the insurance laws of the State of New York. The method used in computing
reserves and Accumulated Values in the Variable Annuity Account is in
accordance with actuarial procedures that recognize the variable nature of
such an Account.
Any Annuity Benefit, Accumulated Value, Cash Value or Death Benefit
available under this Contract is not less than the minimum benefits
required by any statute of the State of New York.
HOW ACCUMULATED VALUE IS CALCULATED
On the Effective Date, the Accumulated Value equals the Net Premium.
Thereafter, Accumulated Value equals the Accumulated Value on the prior
Valuation Date, increased by:
a) Any increase in the Accumulated Value due to investment results of
the selected subaccount(s);
b) Interest earned on the Contract's value allocated to the General
Account; and
c) Additional Net Premium(s) paid;
and reduced by:
a) Any decrease in the Accumulated Value due to investment results of
the selected subaccount(s);
b) Contract Administration Charges;
c) Mortality and Expense Risk Charges; and
d) Any Records Maintenance Charges, transfer charges or any charge for
tax liability resulting from assets held by the Variable Annuity Account.
ACCOUNTING PROCEDURES:
The Contract's value in each subaccount is maintained in units. A unit
value is determined on each Valuation Date. The Contract's value in any
subaccount is the number of units times the unit value.
Changes in the net asset value of the designated fund, distributions from
the fund, and tax charges with respect to a fund for the Valuation Period
are taken into account in computing the unit value for each subaccount.
Contract Administration Charges and Mortality and Expense Risk Charges are
accounted for by a deduction from the unit values each Valuation Period.
All additions to or deductions from a subaccount are made on the basis of
the unit value as of the end of the Valuation Period for which the
transaction is to be effective.
Page 20
<PAGE>
INDIVIDUAL RETIREMENT PROVISION
If requested on the application, this Contract may be used as a means of
establishing an Individual Retirement Annuity as defined in Section 408(b)
of the Internal Revenue Code as amended (the "Code"). To ensure favorable
tax treatment if such a selection is made, this Contract will be subject to
the following restrictions:
a) The Owner must be the Annuitant.
b) The Owner may not name a new Owner or a Joint Owner to this Contract.
c) Distributions must begin no later than April 1 following the calendar
year in which the Annuitant attains age 70-1/2 (the "required beginning
date"). Prior to the required beginning date, the Owner shall elect, in a
manner acceptable to the Company, to have the balance in the Contract
distributed in:
(i) A single lump sum payment;
(ii) Equal or substantially equal monthly, quarterly, or annual
payments over the life of the Owner or over the lives of the joint and last
survivor of the Owner and his or her designated Beneficiary; or
(iii) Equal or substantially equal annual payments over a specified
period that may not be longer than the Owner's life expectancy or the joint
and last survivor life expectancy of the Owner and his or her designated
Beneficiary.
d) An annuity payment schedule may not be elected with a Period Certain
which will guarantee annuity payments beyond the life expectancies of the
Annuitant and the Beneficiary. Payments must be at least annually and in
equal amounts.
e) The Contract may not be transferred, sold, assigned, discounted, or
pledged as collateral for a loan or as security for the performance of any
obligation or for any other purpose to any person other than as a surrender
to the Company.
f) Annual premiums, other than qualified rollover contributions, may not
exceed $2,000. The Owner has the sole responsibility for determining
whether the premium qualifies under applicable federal tax requirements.
g) If the Owner dies before the entire interest is distributed to him or
her, the remaining interest shall be distributed as follows:
(i) If the Owner dies before the required beginning date, as soon as
practicable but no later than five years following the date of the Owner's
death, We shall pay in a lump sum to the named Beneficiary or Beneficiaries
the greater of the Accumulated Value calculated on the date We receive
proof of death or the total of the premium paid less any partial
surrenders.
(ii) If the Owner dies on or after the required beginning date,
distribution must be made at least as rapidly as the method of distribution
in effect at the time of the Owner's death.
Page 21
<PAGE>
INDIVIDUAL RETIREMENT PROVISION (Continued)
h) Distribution under this provision of the Contract must satisfy the
minimum distribution rules of Section 408(b)(3) of the Code, including the
minimum incidental death benefit requirement of Treasury Regulation 1.408-
8. The Owner or Beneficiary, as applicable, has the sole responsibility to
elect a distribution that will satisfy these rules.
i) We reserve the right to modify this Contract or Amendment to the
extent necessary to qualify as an individual retirement annuity for federal
income tax purposes, subject to the approval of the New York Insurance
Department.
Annuity payments may not begin before the Annuitant attains the age of 59-
1/2 without incurring a penalty tax except in the situations described in
Section 72(t) of the Code.
Notwithstanding the provisions of this Contract, the above restrictions
will apply if this provision is applicable.
QUALIFIED PLAN PROVISION
If requested on the application, this Contract may be issued to or
purchased by the trustee of a pension or profit sharing plan intended to
qualify under Section 401(a) of the Code. The following provisions apply
and replace any contrary Contract provisions:
a) Except as allowed by the qualified pension or profit-sharing plan of
which this Contract is a part, the Contract may not be transferred, sold,
assigned, discounted or pledged, either as collateral for a loan or as
security for the performance of an obligation or for any other purpose, to
any person other than the Company.
b) This Contract shall be subject to the provisions, terms and
conditions of the qualified pension or profit-sharing plan of which the
Contract is a part. Any payment, distribution or transfer under this
Contract shall comply with the provisions, terms and conditions of such
plan as determined by the plan administrator, trustee or other designated
plan fiduciary. The Company shall be under no obligation either (1) to
determine whether any such payment, distribution or transfer complies with
the applicable law, or (2) to administer such plan, including, without
limitation, any provisions required by the Retirement Equity Act of 1984.
c) Notwithstanding any provision to the contrary in this Contract or the
qualified pension or profit-sharing plan of which this Contract is a part,
the Company reserves the right to amend or modify this Contract to the
extent necessary to comply with any law, regulation, ruling or other
requirement deemed by the Company to be necessary to establish or maintain
the qualified status of such pension or profit-sharing plan.
Page 22
<PAGE>
FLEXIBLE PREMIUM VARIABLE
DEFERRED ANNUITY
Right to Make Additional Premium Payments
Subject to Certain Conditions.
We Will Pay an Annuity Subject to the Provisions of this
Contract Beginning on the Maturity Date Specified on Page 2.
The Accumulated Value May Increase or Decrease
in Accordance With the Experience of the Selected Subaccounts.
Death Benefits Are Provided Under This Contract Prior to the Maturity Date.
Annuity Benefits Are Not Guaranteed as to Dollar
Amount Prior to the Maturity Date.
Annuity Income Options Are Available.
Nonparticipating.
Thirty-Day Right to Examine Contract - You may return this Contract to Us
for any reason within thirty days of the date You receive it. Upon receipt
of the Contract, We will return to You the Premium paid, plus or minus any
investment experience on amounts allocated to the subaccounts and interest
earned on amounts allocated to the General Account, determined on the
Valuation Date You return the Contract to Us. The Contract will be void as
of the Contract Date.
If You have any questions concerning this Contract or if anyone suggests
that You change or replace this Contract, please contact the Home Office of
the Company.
INTRAMERICA LIFE INSURANCE COMPANY
9 Ramland Road, Orangeburg, New York 10962
S1802
<PAGE>
SCUDDER
HORIZON
A tax-advantaged asset-building plan
Q0-1-96
Variable Annuity Application
Intramerica Life Insurance Company
9 Ramland Road - Orangeburg, New York 10962 - 1-800-833-0194
1. OWNER INFORMATION 2. JOINT OWNER INFORMATION,
If Applicable
NAME_______________________________ NAME_______________________________
Last First Middle Last First Middle
ADDRESS____________________________ ADDRESS____________________________
Street Apt.# Street Apt. #
___________________________________ ___________________________________
City State Zip City State Zip
Social Security/Tax ID#____________ Social Security/Tax ID#____________
Birth Date________________ Sex____ Birth Date________________ Sex____
Month Day Year Month Day Year
Phone#s( )__________ ( )_________ Phone#s( )_________ ( )__________
Day Night Day Night
Maturity Date: At Age ____ or ____ Years
from the Contract Date
3. AMOUNT AND ALLOCATION OF PAYMENT
( ) Check payable to "Scudder Horizon Plan" is enclosed in the amount of
$____________ (minimum investment $2,500).
( ) Payment by exchange of Scudder fund shares. (Complete "Authorization
for Exchange" section.)
( ) Payment by 1035 Exchange from another policy.
Type of Annuity:
( )Nonqualified ( )IRA Rollover ( )Pension/Profit Sharing Trust
Please indicate the allocation of payment using whole percentages that
total 100%.
Scudder Money Market ____% Scudder Capital Growth ____%
Scudder Bond ____% Scudder International ____%
Scudder Balanced ____% Scudder Global Discovery ____%
Scudder Growth and Income ____% General Account ____% ____ years
General Account ____% ____ years
4. ANNUITANT INFORMATION, If Other Than Owner
NAME ___________________________________________
Last First Middle
ADDRESS ________________________________________
Street Apt.#
________________________________________________
City State Zip
Birth Date _____________________ Sex __________
Month Day Year
5. BENEFICIARY DESIGNATION
NAME ___________________________________________
Last First Middle
ADDRESS ________________________________________
Street Apt. #
________________________________________________
City State Zip
Birth Date ______________ _____________________
Month Day Year Relationship to Owner
A1802(97)
<PAGE>
6. WILL THIS ANNUITY REPLACE ANY EXISTING LIFE INSURANCE POLICY OR ANNUITY
CONTRACT?
( )No___________ ( )Yes______________________________________________
Company, amount, and type of policy or contract
7. OTHER INFORMATION
____________________________________ ___________________________________
Your Employer's Name Your Occupation
____________________________________
Your Employer's Address
Home Office Endorsements Only: (Do not write in this space)
8. SIGNATURES
To the best of my knowledge and belief, all statements made in this
application are true and complete. I understand and agree that Intramerica
may correct errors and omissions on the application, noting the changes
under "Home Office Endorsements." I will review any such corrections or
changes when the contract is issued. My acceptance of the contract shall
constitute acceptance of the changes. I also understand that where state
insurance regulations require, any amendment as to age at issue, payment
amount, or benefits will be made only with my written consent.
I understand that proof of the annuitant's age must be furnished before
annuity payments begin. Evidence satisfactory to Intramerica that the
annuitant is living will be furnished when requested by Intramerica, but
not more than once a year.
The contract will become effective on the contract date assigned by
Intramerica. In the event that either the payment or this application is
not acceptable to Intramerica, I understand Intramerica's liability will be
limited to a return of any payment made.
I UNDERSTAND THAT THE ACCUMULATED VALUE AND DEATH BENEFIT MAY INCREASE OR
DECREASE DEPENDING ON THE INVESTMENT PERFORMANCE OF THE SUBACCOUNTS.
I have received a current prospectus for this contract and the subaccounts
of the Variable Annuity Account.
I certify that: (a) I have shown my correct taxpayer identification number;
and (b) I am not subject to backup withholding as a result of a failure to
report all interest or dividends.
I ( )do ( )do not want federal income tax withheld from any distribution.
The Internal Revenue Service does not require your consent to any provision
of this document other than the certifications required to avoid backup
withholding.
Dated at_________________ this______ day of______, 19___.
City State
___________________________________ ___________________________________
Owner's Signature Joint Owner's Signature
(if applicable)
For Company Use Only
To your knowledge and belief, will replacement of life insurance or
annuities be involved? ( )Yes ( )No
The above answer and statements are true and complete to the best of my
knowledge and belief.
____________________________________ ____________________________________
Agent's Name (please print) Agent's Signature
<PAGE>
FINANCIAL QUESTIONNAIRE
This questionnaire will provide Intramerica Life Insurance Company with the
financial data needed to properly evaluate your application. It MUST be
completed when a Payment exceeds $250,000 or upon request. The information
provided here is confidential, and will be used only to assist in the
evaluation of your application.
Owner's Name _____________________________________________________________
(Please Print)
ANNUAL INCOME
Salary $______________
Bonuses or Commission $______________
Interest and Dividends $______________
Other Income (incl. spouse) $______________
TOTAL INCOME $________________
ASSETS
Cash, Bank Deposits $______________
Securities (stock, bonds, etc.) $______________
Real Estate, Property $______________
Other Assets $______________
TOTAL ASSETS $________________
LIABILITIES
Mortgages $______________
Loans or Notes Payable $______________
Other Liabilities $______________
TOTAL LIABILITIES $________________
CURRENT TOTAL NET WORTH $________________
The purpose of this contract is:
[ ] accumulation [ ] income [ ] estate planning
[ ] other (please explain)___________________________________________
The above information reflects my current financial condition.
SIGNED_______________________________________________ DATE_____________
(Owner)
B1802
<PAGE>
MONEY MARKET YIELDS
7-DAY CURRENT YIELD
Current Yield = ((NSC - ES) / UV) x (365 / 7)
Where: NCS = The net change in the value of the Portfolio (exclusive
of realized gains and losses on the sale of securities and unrealized
appreciation and depreciation) for the 7-day period attributable to a
hypothetical account having a balance of 1 Subaccount unit.
ES = ADMIN + M&E + RMC
Where: ES = Per unit expenses of the Subaccount for the 7-day period.
ADMIN = Per unit Administration Charges deducted for the 7-day
period.
M&E = Per unit Mortality & Expenses Risk Charges deducted for
the 7-day period.
RMC = Per unit Records Maintenance Charges for the 7-day
period.
RMC = (40 / AAV /365) x AUV x 7
Where: AAV = Average Accumulated Value of Contracts on the last day of
the 7-day period.
AUV = The sum of the unit values on the first and last day of the 7-day
period divided by 2.
UV = The unit value on the first day of the 7-day period.
For Example:
If: NCS = .001342474
AAV = 55,000
AUV = 1.002678
UV = 1.002345
ADMIN = .000059325
M&E = .000135126
Then: RMC = (40 / 55,000 / 365) x 1.002678 x 7, or
RMC = .000013985
ES = .000059325 + .000135126 + .000013985
ES = .000208436
1
<PAGE>
Then: Current Yield = ((.001342474 - .000208436) / 1.002345)
x (365 /7)
Current Yield = .058993641
Current Yield = 5.90%
7-DAY EFFECTIVE YIELD
Effective Yield = (1 + (NCS - ES) / UV) to the power of 365/7 -
1
Where: NCS = NCS as calculated for the Current Yield.
ES = ES as calculated for the Current Yield.
UV = UV as calculated for the Current Yield.
For Example:
If: Effective Yield = (1 + (.001342474 - .000208436)
/ 1.002345) to the power of 365/7 - 1
Effective Yield = .06073313
Effective Yield = 6.07%
2
<PAGE>
OTHER SUBACCOUNT YIELDS
30-DAY YIELD
Yield = 2 x ((((NI - ES) / (U x UV)) + 1) to the power of 6 - 1)
Where: NI = Net income of the Portfolio for the 30-day period
attributable to the Subaccount's units.
ES = ADMIN + M&E + RMC
Where: ES = Expenses of the Subaccount for the 30-day period.
ADMIN = Administration Charges deducted from the Subaccount for
the 30-day period.
M&E = Mortality & Expense Risk Charges deducted from the
Subaccount for the 30-day period.
RMC = (40 / AAV / 365) x (U x AUV) x 30
Where: AAV = Average Accumulated Value of Contracts on the last day of
the 30-day period.
U = The average number of units outstanding, which equals the
number of units on the first day of the 30-day period plus the number units
on the last day of the 30-day period the sum of which is divided by 2.
AUV = The sum of the unit values on the first and last day of
the 30-day period divided by 2.
UV = The unit value at the close (highest) of the last day in
the 30-day period.
For Example:
If: NI = 10,000.00
ADMIN = 250.00
M&E = 583.33
AAV= 55,000
U = 1,000,000
AUV = 1.011234
UV = 1.012345
3
<PAGE>
Then: RMC = (40 / 55,000 / 365) x (1,000,000 x 1.011234) x 30
RMC = 60.447362
ES = 250.00 + 583.33 + 60.447362
ES = 893.777362
Then: Yield = 2 x ((((10,000 - 893.777362) / (1,000,000 x
1.012345)) + 1) to the power of 6 -1)
Yield = .110399
Yield = 11.04%
4
<PAGE>
TOTAL RETURN
AVERAGE ANNUAL STANDARD TOTAL RETURNS
TR = ((ERV / P) to the power of 1/N) -1
Where: TR = Average annual total return.
ERV = The ending redeemable value of the hypothetical account at
the end of the period.
P = A hypothetical initial payment of $1,000.
N = Number of years and/or fractions of years in the period.
ERV = (1,000 x ((EUV - BUV) / BUV)) +1,000 - RMC
Where: EUV = Unit value at the end of the period.
BUV = Unit value at the beginning of the period.
RMC = The Records Maintenance Charge attributable to the
hypothetical account for the period.
RMC = (40 / AAV / 365) x (N x 365)
x (1,000 + (1,000 x ((EUV - BUV) / BUV) / 2))
Where: AAV = Average Accumulated Value of Contracts on the last day of
the period.
For Example:
If: P = 1,000
N = 1.25
AAV = 55,000
EUV = 1.123456
BUV = 1.000000
Then: RMC = (40 / 55,000 / 365) x (1.25 x 365)
x (1,000 + (1,000 x ((1.123456 - 1.000000) / 1.000000)
/ 2 ))
RMC = .965207
Then: ERV = (1,000 x ((1.123456 - 1.000000) / 1.000000))
+ 1,000 - .965207
ERV = 1,122.484793
5
<PAGE>
Then: TR = ((1,122.484793 / 1,000) to the power of 1/1.25) -1
TR = .096843
TR = 9.68%
CUMULATIVE TOTAL RETURNS
CTR = (ERV / P) - 1
Where: CTR = Cumulative total return.
ERV = The ending redeemable value of a 1,000 hypothetical
account at the end of the period.
P = A hypothetical intial payment of 1,000.
ERV = (1,000 X ((EUV - BUV) / BUV)) + 1,000 - RMC
Where: EUV = Unit value at the end of the period.
BUV = Unit value at the beginning of the period.
RMC = The Records Maintenance Charge attributable to the
hypothetical account for the period.
RMC = (40 / AAV / 365) x (N x 365)
x (1,000 + (1,000 x ((EUV - BUV) / BUV) / 2))
Where: AAV = Average Accumulated Value of Contracts on the last day of
the period.
6
<PAGE>
EXHIBIT LIST
(1) (a) Resolutions of the Board of Directors of First Charter Life
Insurance Company authorizing establishment of the Variable Annuity Account
(1) (b) Resolutions of the Board of Directors of Intramerica regarding the
acquisition of the Variable Annuity Account
(3) (a) Principal Underwriting Agreement, dated September 1,1989, amended
January 25, 1991
(3) (b) Amendment, dated October 26, 1992, to the Principal Underwriting
Agreement
(3) (c) Form of Marketing and Solicitation Agreement
(3) (d) Amendment, dated October 26, 1992, to the Marketing and
Solicitation Agreement
(4) (a) Contract for the Flexible Premium Variable Deferred Annuity (S
1802)
(5) (a) Application for the Flexible Premium Variable Deferred Annuity (A
1802)
(5) (b) Financial Questionnaire (B 1802)
(6) (a) Charter of Intramerica Life Insurance Company
(6) (b) By-Laws of Intramerica Life Insurance Company
(8) (a) Participation Agreement dated May 11, 1994
(8) (b) Reimbursement Agreement dated May 11, 1994
(8) (c) General Services and Expense Reimbursement Agreement dated
September 1, 1989
(13) Schedule for Computation of Performance Data
(14) Power of Attorney
