Registration No. 33-31755
811-5880
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 12
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT No. 13
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THE GUARDIAN SEPARATE ACCOUNT D
(Exact Name of Registrant)
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THE GUARDIAN INSURANCE & ANNUITY COMPANY, INC.
(Name of Depositor)
7 Hanover Square, New York, New York 10004
(Complete address of depositor's principal executive offices)
Depositor's Telephone Number, including Area Code: (212) 598-8359
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RICHARD T. POTTER, JR., ESQ.
The Guardian Insurance & Annuity Company, Inc.
7 Hanover Square
New York, New York 10004
(Name and address of agent for service)
Copy to:
KIMBERLY J. SMITH, ESQ.
Sutherland, Asbill & Brennan
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
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It is proposed that this filing will become effective (check
appropriate box):
|_| immediately upon filing pursuant to paragraph (b) of Rule
485
|X| on May 1, 2000 pursuant to paragraph (b) of Rule 485
|_| 60 days after filing pursuant to paragraph (a)(1) of Rule
485
|_| on (date) pursuant to paragraph (a)(1) of Rule 485
|_| 75 days after filing pursuant to paragraph (a)(2) of Rule
485
|_| on (date) pursuant to paragraph (a)(2) 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.
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The Registrant has registered an indefinite number of its securities under
the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company
Act of 1940. The notice required by such rule for the Registrant's most fiscal
year was filed on March 24, 2000.
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<PAGE>
THE GUARDIAN SEPARATE ACCOUNT D
Cross Reference Sheet to Items In
Registration Statement on Form N-4
Form N-4 Item No. Location
Part A
Item 1. Cover Page................................ Cover
Item 2. Definitions............................... Special Terms Used in
This Prospectus
Item 3. Synopsis.................................. Summary: What is a
variable annuity
contract and how does
it work; Costs and
Expenses
Item 4. Condensed Unit Information................ Summary Financial
Information About the
Separate Account
Item 5. General Description of Registrant,
Depositor and Portfolio Companies ...... The Guardian Insurance
& Annuity Company,
Inc.; Variable
Investment Options;
Fixed-Rate Option;
Voting Rights
Item 6. Deductions................................ Expenses; Costs and
Expenses; Distribution
of the Contracts
Item 7. General Description of Variable
Annuity Contracts....................... Summary: What is a
variable annuity
contract and how does
it work?
Item 8. Annuity Period............................ The Annuity Period
Item 9. Death Benefit............................. Death Benefits; Enhanced
Death Benefits
Item 10. Purchases and Contract Value.............. Buying a Contract; the
Accumulation Period
Item 11. Redemptions............................... Surrenders and Partial
Withdrawals
Item 12. Taxes..................................... Federal Tax Matters
Item 13. Legal Proceedings......................... Legal Proceedings
Item 14. Table of Contents of the Statement of
Additional Information.................. Where to get more
Information
Part B
Item 15. Cover Page................................ Cover Page
Item 16. Table of Contents......................... Table of Contents
Item 17. General Information and History........... Not Applicable
Item 18. Services.................................. Services to the Separate
Account
Item 19. Purchase of Securities Being Offered...... Valuation of Assets of
the Separate Account;
Transferability
Restrictions
Item 20. Underwriters.............................. Services to the Separate
Account
Item 21. Calculation of Performance Data........... Performance Data
Item 22. Annuity Payments.......................... Annuity Payments
Item 23. Financial Statements...................... Financial Statements
Part C
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C to this Registration Statement.
<PAGE>
May 1, 2000
THE GUARDIAN INVESTOR
INDIVIDUAL VARIABLE ANNUITY
CONTRACT PROSPECTUS
This prospectus describes two types of Individual Deferred Variable Annuity
Contracts, the Single Premium Payment Contract and the Flexible Premium Payment
Contract. It contains important information that you should know before
investing in the contracts. Please read this prospectus carefully, along with
the accompanying fund prospectuses, and keep them for future reference.
The contracts are issued by The Guardian Insurance & Annuity Company, Inc.
(GIAC) through its Separate Account D (the Separate Account). They are designed
to provide tax deferred annuity benefits under retirement programs. It will also
pay a death benefit if the owner or annuitant dies before annuity payments
begin.
The Single Premium Payment Contract requires a minimum investment of $5,000,
while the Flexible Premium Payment Contract requires a minimum initial premium
payment of $500 ($1,000 in New York State). Your premiums may be invested in up
to twenty variable investment options or nineteen variable investment options
and a fixed-rate option. Special limits apply to transfers out of the fixed-rate
option. The variable investment options invest in the mutual funds listed below.
Some of these Funds may not be available in your state. The prospectuses for
these funds are attached.
The Guardian Variable Contract Funds, Inc.
The Guardian Stock Fund
The Guardian VC 500 Index Fund
The Guardian VC Asset Allocation Fund
The Guardian VC High Yield Bond Fund
The Guardian Bond Fund, Inc.
The Guardian Cash Fund, Inc.
GIAC Funds, Inc.
Baillie Gifford International Fund
Baillie Gifford Emerging Markets Fund
The Guardian Small Cap Stock Fund
Value Line Strategic Asset Management Trust
Value Line Centurion Fund
Gabelli Capital Series Funds, Inc.
Gabelli Capital Asset Fund
MFS Variable Insurance Trust
MFS Growth With Income Series
MFS Emerging Growth Series
MFS New Discovery Series
MFS Research Series
MFS Total Return Series
AIM Variable Insurance Funds Inc.
AIM V.I. Capital Appreciation Fund
AIM V.I. Global Utilities Fund
AIM V.I. Value Fund
Davis Variable Account Fund
Davis Financial Portfolio
Davis Real Estate Portfolio
Davis Value Portfolio
Fidelity VIP III Growth Opportunities Portfolio
Fidelity VIP Equity Income Portfolio
Fidelity VIP II Contrafund Portfolio
Fidelity VIP III Mid Cap Portfolio
Janus Aspen Series
Janus Aspen Aggressive Growth Portfolio
Janus Aspen Capital Appreciation Portfolio
Janus Aspen Growth Portfolio
Janus Aspen Worldwide Growth Portfolio
A Statement of Additional Information about the contracts and the Separate
Account is available free of charge by writing to GIAC at its Customer Service
Office, P.O. Box 26210, Lehigh Valley, Pennsylvania 18002, or by calling
1-800-221-3253. Its contents are noted on the last page of this prospectus.
The Statement of Additional Information, which is also dated May 1, 2000, is
incorporated by reference into this prospectus.
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These Securities have not been approved or disapproved by the Securities and
Exchange Commission or any state securities commission, nor has the Commission
or any state securities commission passed upon the accuracy or adequacy of this
prospectus.
The contracts are not a deposit or obligation of or guaranteed or endorsed by,
any bank or depository institution, and the contracts are not federally insured
by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other agency, and involves investment risk, including possible loss of the
principal amount invested.
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<PAGE>
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CONTENTS
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Annuity Contract Prospectus
Summary ................................................................... 1
- -- What is a variable annuity contract and how does it work? .............. 1
- -- The accumulation period ................................................ 1
- -- The annuity period ..................................................... 1
- -- Other contract features ................................................ 1
- -- Expenses ............................................................... 2
- -- Deciding to purchase a contract ........................................ 2
The Guardian Insurance & Annuity Company, Inc. ............................ 6
Buying a contract ......................................................... 6
- -- The application form ................................................... 6
- -- Payments ............................................................... 7
The accumulation period ................................................... 7
- -- How we allocate your premium payments .................................. 7
- -- The Separate Account ................................................... 8
- -- Variable investment options ............................................ 9
- -- Fixed-rate option ...................................................... 12
- -- Transfers .............................................................. 13
- -- Surrenders and partial withdrawals ..................................... 14
- -- Managing your annuity .................................................. 15
The annuity period ........................................................ 17
- -- When annuity payments begin ............................................ 17
- -- How your annuity payments are calculated ............................... 17
- -- Variable annuity payout options ........................................ 17
- -- Fixed-rate annuity payout options ...................................... 18
Other contract features ................................................... 19
- -- Death benefits ......................................................... 19
- -- Enhanced death benefits ................................................ 19
- -- Financial information .................................................. 20
- -- How we calculate unit values ........................................... 20
- -- Summary financial information about the Separate Account ............... 21
- -- Contract costs and expenses ............................................ 26
- -- Federal tax matters .................................................... 28
- -- Our income taxes ....................................................... 32
- -- Possible tax law changes ............................................... 32
- -- Performance results .................................................... 32
Your rights and responsibilities .......................................... 34
- -- Voting rights .......................................................... 34
- -- Your right to cancel the contract ...................................... 34
- -- Distribution of the contracts .......................................... 34
Special terms used in this prospectus ..................................... 35
Other information ......................................................... 36
- -- Legal Proceedings ...................................................... 36
- -- Where to get more information .......................................... 36
<PAGE>
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SUMMARY
WHAT IS A VARIABLE ANNUITY CONTRACT AND HOW DOES IT WORK?
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A VARIABLE ANNUITY CONTRACT allows you to accumulate tax-deferred savings which
are invested in options that you choose. This is the accumulation period of the
contract. On an agreed date, you or someone else you have named as the annuitant
will start receiving regular payments from the amount you have saved and any
investment earnings. This is the annuity period. The amount of the annuity
payments will depend on earnings during the accumulation period, and afterward
if you select a variable annuity option. That's why this product is called a
variable annuity.
The accumulation period
During the accumulation period, these contracts allow you to allocate your net
premium payments and accumulation value to as many as twenty variable investment
options, or nineteen variable investment options and a fixed-rate option.
When you allocate your premiums to the variable investment options, you bear the
risk of any investment losses. No assurance can be given that the value of the
contracts during the accumulation period, or the total amount of annuity
payments made under the contracts, will equal or exceed the net premium payments
allocated to the variable investment options. When you allocate your net premium
payments to the fixed-rate option, the contracts guarantee that they will earn a
minimum rate of interest and the investment risk is borne by GIAC.
GIAC has established a Separate Account to hold the variable investments in its
annuity contracts. The Separate Account has 31 investment divisions,
corresponding to 31 variable investment options, each of which invests in a
mutual fund. Your net premiums are used to buy accumulation units in the
investment divisions you have chosen, or are allocated to the fixed-rate option.
The total value of your contract's investment in the investment divisions and in
the fixed-rate option is known as the accumulation value. It's determined by
multiplying the number of variable accumulation units credited to your account
in each investment division by the current value of the division's units, and
adding your value in the fixed-rate option.
The value of units in a variable investment division reflects the investment
experience within the division. The value of units in the fixed-rate option
reflects interest accrued at a rate not less than the guaranteed minimum
specified in the contract. For a complete explanation, please see Financial
information: How we calculate unit values.
The annuity period
Payments to the annuitant under these contracts must begin no later than his or
her 85th birthday. Distributions under the contract are taxable, and if you take
money out of the contract before age 59 1/2, you may also incur a 10% federal
tax penalty on your earnings.
You may select one or a combination of three annuity payout options under the
contract:
o Life annuity without a guaranteed period
o Life annuity with a 10-year guaranteed period
o Joint and survivor annuity
These payout options are available on either a variable or fixed-rate basis.
They're described in more detail in the section titled The annuity period.
Other contract features
Transfers among investment options
You can make transfers among the variable investment options at any time.
Transfers to and from the fixed-rate option are only permitted during the
accumulation period. Certain restrictions apply to transfers out of the
fixed-rate option. Transfers must also comply with the rules of any retirement
plan that apply. Please see The accumulation period: Transfers.
Death benefits
If you, or another person named as the annuitant, should die before annuity
payments begin, then we pay a death benefit to the beneficiary. The contracts
also give you the option of purchasing a rider that may provide a greater death
benefit. Please see Other contract features: Death benefits.
Surrenders and partial withdrawals
At any time during the accumulation period, you may withdraw some or all of the
amount you have saved in the contract. Taking out all you have saved is known as
a surrender; taking out part of your savings is a partial withdrawal. These
options are not available once annuity payments begin. Please see The
accumulation period: Surrenders and partial withdrawals.
PROSPECTUS 1
<PAGE>
able once annuity payments begin. Please see The accumulation period: Surrenders
and partial withdrawals.
Expenses
The following are expenses that you will incur as a contract owner:
o Operating expenses for mutual funds comprising the variable investment
options
Management fees and other expenses associated with the Funds ranged from
.28% to 1.44% in 1999. Actual charges will depend on the variable
investment options you select.
o Mortality and expense risk charges
1.15% annually of the net asset value of your variable investment options.
o Administrative expenses
$35 annually will be deducted from the accumulation value of your
contract.
The following are expenses that you may incur as a contract owner:
o Contingent deferred sales charges
A charge of 1% to 6% against any amount that you withdraw that has been in
your contract for less than eight years. The actual amount will depend on
the number of years the amount has been invested.
o Enhanced death benefit expense
If you choose this benefit, the annual expense is up to 0.30% of the net
asset value of your variable investment options, depending on the rider
chosen.
o Premium taxes
A tax on premiums or annuity payments, applicable in some states and
municipalities only, that varies from 0.5% to 3.5% of premiums paid to the
contract.
Deciding to purchase a contract
You should consider purchasing a variable annuity contract if your objective is
to invest over a long period of time and to accumulate assets on a tax-deferred
basis, generally for retirement. You have the right to examine the contract and
return it for cancellation within 10 days of receiving it. This is known as the
free look period. The period may be longer than 10 days in some states.
Please see Financial information: Summary of financial information about the
Separate Account for more information about Separate Account D and unit values.
Please see Special terms used in this prospectus for definitions of key terms.
2 PROSPECTUS
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EXPENSE TABLE
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CONTRACT OWNER TRANSACTION EXPENSES
Sales Charge Imposed on Purchases: .................................... None
Transfer Fee: Currently, none (may charge $25 for each transfer)
Contingent Deferred Sales Charge:
(1) Single Premium Payment Contracts:(1)
In connection with Single Premium Payment Contracts, the following charges will
be assessed upon amounts withdrawn during the first seven Contract years
measured from the date of issue.
Number of
Contract Years Contingent
Completed from Date of Deferred Sales
the Premium Payment Charge Percentage(1)
---------------------- -----------------
1 6%
2 6%
3 5%
4 4%
5 3%
6 2%
7 1%
8+ 0%
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(2) Flexible Premium Payment Contracts:(2)
In connection with Flexible Premium Payment Contracts, this charge will be the
lesser of:
o 6% of the total payments made during the 84 months immediately preceding
the date of withdrawal, or
o 6% of the total amount being withdrawn.
Annual Contract Administration Fee:
Single Premium Payment Contract .......................................... $35
Flexible Premium Payment Contract ........................................ $35
Separate Account Level Annual Expenses:
<TABLE>
<CAPTION>
For Contract For Contract For Contract
Without With With Contract
Enhanced 7 Year Enhanced Anniversary Enhanced
Death Benefit Death Benefit Death Benefit
------------- --------------- --------------------
<S> <C> <C> <C>
(as a percentage of daily net asset value)
Mortality and Expense Risk Charge ............... 1.15% 1.15% 1.15%
Account Fees and Expenses ....................... 0% 0% 0%
Enhanced Death Benefit Charge ................... 0% .30% .25%
---- ---- -----
Total Separate Account Annual Expenses .......... 1.15% 1.45% 1.40%
</TABLE>
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PROSPECTUS 3
<PAGE>
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EXPENSE TABLE (Continued)
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Annual Expenses of the Funds:(3)
(as a percentage of average net assets)
Total fund
Management Other operating
fees expenses expenses
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The Guardian Cash Fund .50% .03% .53%
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The Guardian Bond Fund(4) .50% .07% .57%
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The Guardian Stock Fund .50% .02% .52%
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The Guardian Small Cap Stock Fund .75% .08% .83%
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The Guardian VC 500 Index Fund(5) .25% .03% .28%
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The Guardian VC Asset Allocation Fund(6) .50% .17% .67%
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The Guardian VC High Yield Bond Fund(7) .60% .54% 1.14%
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Baillie Gifford International Fund .80% .16% .96%
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Baillie Gifford Emerging Markets Fund 1.00% .44% 1.44%
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Value Line Centurion Fund(8) .50% .09% .59%
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Value Line Strategic Asset Management Trust(8) .50% .08% .58%
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Gabelli Capital Asset Fund 1.00% .08% 1.08%
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AIM V.I. Capital Appreciation Fund .62% .11% .73%
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AIM V.I. Global Utilities Fund .65% .49% 1.14%
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AIM V.I. Value Fund .61% .15% .76%
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Davis Financial Portfolio(9) .75% .25% 1.00%
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Davis Real Estate Portfolio(9) .75% .25% 1.00%
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Davis Value Portfolio(9) .75% .25% 1.00%
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Fidelity VIP II Contrafund Portfolio(10) .59% .16% .75%
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Fidelity VIP Equity-Income Portfolio(10) .49% .17% .66%
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Fidelity VIP III Growth Opportunities
Portfolio(10) .59% .19% .78%
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Fidelity VIP III Mid Cap Portfolio(10) .59% .48% 1.07%
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Janus Aspen Aggressive Growth Portfolio(11) .65% .02% .67%
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Janus Aspen Capital Appreciation Portfolio(11) .65% .04% .69%
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Janus Aspen Growth Portfolio(11) .65% .02% .67%
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Janus Aspen Worldwide Growth Portfolio(11) .65% .05% .70%
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MFS Emerging Growth Series(12) .75% .09% .84%
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MFS Growth With Income Series .75% .13% .88%
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MFS New Discovery Series(12) .90% .27% 1.17%
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MFS Research Series(12) .75% .11% .86%
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MFS Total Return Series(12) .75% .15% .90%
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(1) After the first contract year, you may withdraw in each contract year,
without a deferred sales charge, the greater of: (i) 10% of the
accumulation value on the date of the first withdrawal in the current
contract year, or (ii) 10% of the amount of the single premium payment.
For contracts issued in Section 1035 exchanges or in certain IRA transfers
or rollovers, this privilege may also be exercised in the first contract
year. The amount used to calculate this charge will not exceed the single
premium payment, and the charge will not exceed 6% of the amount being
withdrawn, as outlined in the table above.
(2) After the first contract year, you may withdraw in each contract year,
without a deferred sales charge, the greater of: (i) 10% of the
accumulation value on the date of the first withdrawal in the current
contract year, or (ii) 10% of the total premiums paid under the contract
in the 84 months immediately preceding the date of your withdrawal. For
contracts issued in Section 1035 exchanges or in certain IRA transfers or
rollovers, this privilege may also be exercised in the first contract
year. This charge will not exceed 6% of the total premiums paid in the 84
months preceding the date of your withdrawal.
(3) These percentages reflect the actual fees and expenses incurred by each
Fund during the year ended December 31, 1999 except for Janus Aspen Funds
and Guardian VC 500 Index Fund whose expenses are restated as described
below.
(4) Expenses reflected include interest expense. If interest expense were not
included, total expenses would be 0.55%.
(5) Expenses are based upon expenses for the fiscal year ended December 31,
1999, restated to reflect a reduction in the management fee for the Fund.
Expenses for the year ended December 31, 1999 were 0.29% after applicable
waivers and expense reimbursements, and 0.36% before applicable waivers
and expense reimbursements.
(6) Expenses do not include expenses of the underlying funds in which the
Guardian VC Asset Allocation Fund invests its assets. Including the
expense of the underlying funds, the Fund's total expenses would be 0.98%.
(7) Expenses reflected have not been grossed up to include the effects of
custody credits received by the Fund. With these credits, total expenses
would have been 0.99%.
(8) Total expenses have been grossed up to include custody credit
arrangements. However, the credit received does not affect the Funds'
total expenses. The operational expenses for Value Line Strategic Asset
Management Trust and Value Line Centurion Fund reflect expense
reimbursements paid by those funds to us for certain administrative and
shareholder servicing expenses that we incur on their behalf. For the year
ended December 31, 1999, we were reimbursed $857,868 by Value Line
Strategic Asset Management Trust, and $586,401 by Value Line Centurion
Fund.
(9) Had the adviser not absorbed certain expenses, the ratio of expenses to
average net assets would have been 2.29%, 4.24%, and 11.70% for Davis
Value Portfolio, Davis Financial Portfolio and Davis Real Estate
Portfolio, respectively.
(10) The expenses shown for Fidelity VIP II Contrafund Portfolio, Fidelity VIP
Equity-Income Portfolio, Fidelity VIP III Growth Opportunities Portfolio
and Fidelity VIP III Mid Cap Portfolio reflect varying arrangements
between these Funds and third parties who have either paid or reduced a
portion of the Funds' expenses. Without these reimbursements, total
expenses would have been .78%, .67%, .79% and 1.10%, respectively.
(11) Expenses are based upon expenses for the fiscal year ended December 31,
1999, restated to reflect a reduction in the management fee for Janus
Aspen Growth, Janus Aspen Aggressive Growth, Janus Aspen Capital
Appreciation, and Janus Aspen Worldwide Growth Portfolios. All expenses
are shown without the effect of expense offset arrangements.
(12) The MFS Funds have expense offset arrangements which reduce their
custodian fees based upon the amount of cash maintained by each Fund with
its custodian. The "Total expenses" in the table do not take into account
this expense reduction and are therefore higher than the actual expenses
of each Fund. The expenses shown for MFS New Discovery Series reflect an
agreement by the Fund's adviser to bear expenses, subject to reimbursement
by the Fund, such that the Fund's "Other Expenses" will not exceed 0.25%
of the Fund's average daily net assets during 1999. Reimbursement by the
Fund will be accomplished by the payment of an expense reimbursement fee
by the Fund to the Adviser, subject to the maximum of 0.25% described
above. Effective May 1, 2000, the adviser has contractually agreed,
subject to reimbursement, to bear expenses for the New Discovery Series
such that the New Discovery Series' "Other expenses" (after taking into
effect expense offset arrangements referred to above) will not exceed
0.15%. This arrangement will continue until at least May 1, 2001, unless
changed with the consent of the board of trustees which oversees the
Series.
4 PROSPECTUS
<PAGE>
The table on the preceding page will assist you in understanding the various
costs and expenses of the Separate Account and its underlying Funds. The
accompanying Fund prospectuses provide a more complete description of the
various costs and expenses.
Comparison of Contract Expenses Among Underlying Funds
For Single Premium (SP) and Flexible Premium (FP) Payment Contracts
Basic Contract
<TABLE>
<CAPTION>
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If you surrender your If you do not surrender
contract at the end of the or you annuitize at the end of
applicable time period: the applicable time period:
You would pay the You would pay the
following expenses on a $1,000 following expenses on a $1,000
investment, assuming a 5% investment, assuming a 5%
annual return on assets: annual return on assets:
Single Premium and Flexible Single Premium and Flexible
Premium Contracts Premium Contracts
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1 Yr. 3 Yrs. 5 Yrs. 10 Yrs. 1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
THE GUARDIAN CASH FUND $79 SP $107 SP $129 SP $214 SP $19 SP $57 SP $99 SP $214 SP
$79 FP $117 FP $159 FP $214 FP $19 FP $57 FP $99 FP $214 FP
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THE GUARDIAN BOND FUND $79 SP $109 SP $131 SP $218 SP $19 SP $59 SP $101 SP $218 SP
$79 FP $119 FP $161 FP $218 FP $19 FP $59 FP $101 FP $218 FP
- ---------------------------------------------------------------------------------------------------------------
THE GUARDIAN STOCK FUND $78 SP $107 SP $128 SP $213 SP $18 SP $57 SP $98 SP $213 SP
$78 FP $117 FP $158 FP $213 FP $18 FP $57 FP $98 FP $213 FP
- ---------------------------------------------------------------------------------------------------------------
THE GUARDIAN SMALL CAP STOCK $82 SP $117 SP $145 SP $246 SP $22 SP $67 SP $115 SP $246 SP
FUND $82 FP $127 FP $175 FP $246 FP $22 FP $67 FP $115 FP $246 FP
- ---------------------------------------------------------------------------------------------------------------
THE GUARDIAN VC 500 INDEX FUND $76 SP $99 SP $115 SP $186 SP $16 SP $49 SP $85 SP $186 SP
$76 FP $109 FP $115 FP $186 FP $16 FP $49 FP $85 FP $186 FP
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THE GUARDIAN VC ASSET $80 SP $112 SP $136 SP $229 SP $20 SP $62 SP $106 SP $229 SP
ALLOCATION FUND $80 FP $122 FP $136 FP $229 FP $20 FP $62 FP $106 FP $229 FP
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THE GUARDIAN VC HIGH YIELD $85 SP $127 SP $161 SP $279 SP $25 SP $77 SP $131 SP $279 SP
BOND FUND $85 FP $137 FP $191 FP $279 FP $25 FP $77 FP $131 FP $279 FP
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BAILLIE GIFFORD INTERNATIONAL $83 SP $121 SP $152 SP $260 SP $23 SP $71 SP $122 SP $260 SP
FUND $83 FP $131 FP $182 FP $260 FP $23 FP $71 FP $122 FP $260 FP
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BAILLIE GIFFORD EMERGING $88 SP $136 SP $177 SP $310 SP $28 SP $86 SP $147 SP $310 SP
MARKETS FUND $88 FP $146 FP $207 FP $310 FP $28 FP $86 FP $147 FP $310 FP
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VALUE LINE CENTURION FUND $79 SP $109 SP $132 SP $220 SP $19 SP $59 SP $102 SP $220 SP
$79 FP $119 FP $162 FP $220 FP $19 FP $59 FP $102 FP $220 FP
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VALUE LINE STRATEGIC ASSET $79 SP $109 SP $131 SP $219 SP $19 SP $59 SP $101 SP $219 SP
MANAGEMENT TRUST $79 FP $119 FP $161 FP $219 FP $19 FP $59 FP $101 FP $219 FP
- ---------------------------------------------------------------------------------------------------------------
GABELLI CAPITAL ASSET FUND $84 SP $125 SP $158 SP $273 SP $24 SP $75 SP $128 SP $273 SP
$84 FP $135 FP $188 FP $273 FP $24 FP $75 FP $128 FP $273 FP
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AIM V.I. CAPITAL APPRECIATION $81 SP $114 SP $139 SP $236 SP $21 SP $64 SP $109 SP $236 SP
FUND $81 FP $124 FP $169 FP $236 FP $21 FP $64 FP $109 FP $236 FP
- ---------------------------------------------------------------------------------------------------------------
AIM V.I. GLOBAL UTILITIES $85 SP $127 SP $161 SP $279 SP $25 SP $77 SP $131 SP $279 SP
FUND $85 FP $146 FP $191 FP $279 FP $25 FP $86 FP $131 FP $279 FP
- ---------------------------------------------------------------------------------------------------------------
AIM V.I. VALUE FUND $81 SP $115 SP $141 SP $239 SP $21 SP $65 SP $111 SP $239 SP
$81 FP $125 FP $171 FP $239 FP $21 FP $65 FP $111 FP $239 FP
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</TABLE>
PROSPECTUS 5
<PAGE>
Basic Contract (continued)
<TABLE>
<CAPTION>
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If you surrender your If you do not surrender
contract at the end of the or you annuitize at the end of
applicable time period: the applicable time period:
You would pay the You would pay the
following expenses on a $1,000 following expenses on a $1,000
investment, assuming a 5% investment, assuming a 5%
annual return on assets: annual return on assets:
Single Premium and Flexible Single Premium and Flexible
Premium Contracts Premium Contracts
-------------------------------------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs. 1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DAVIS FINANCIAL PORTFOLIO $83 SP $122 SP $154 SP $265 SP $23 SP $72 SP $124 SP $265 SP
$83 FP $132 FP $184 FP $265 FP $23 FP $72 FP $124 FP $265 FP
- ---------------------------------------------------------------------------------------------------------------
DAVIS REAL ESTATE PORTFOLIO $83 SP $122 SP $154 SP $265 SP $23 SP $72 SP $124 SP $265 SP
$83 FP $132 FP $184 FP $265 FP $23 FP $72 FP $124 FP $265 FP
- ---------------------------------------------------------------------------------------------------------------
DAVIS VALUE PORTFOLIO $83 SP $122 SP $154 SP $265 SP $23 SP $72 SP $124 SP $265 SP
$83 FP $132 FP $184 FP $265 FP $23 FP $72 FP $124 FP $265 FP
- ---------------------------------------------------------------------------------------------------------------
FIDELITY VIP II $81 SP $114 SP $140 SP $238 SP $21 SP $64 SP $110 SP $238 SP
CONTRAFUND PORTFOLIO $81 FP $124 FP $170 FP $238 FP $21 FP $64 FP $110 FP $238 FP
- ---------------------------------------------------------------------------------------------------------------
FIDELITY VIP EQUITY $80 SP $111 SP $136 SP $228 SP $20 SP $61 SP $106 SP $228 SP
INCOME PORTFOLIO $80 FP $121 FP $166 FP $228 FP $20 FP $61 FP $106 FP $228 FP
- ---------------------------------------------------------------------------------------------------------------
FIDELITY VIP III GROWTH $81 SP $115 SP $142 SP $241 SP $21 SP $65 SP $112 SP $241 SP
OPPORTUNITIES PORTFOLIO $81 FP $125 FP $172 FP $241 FP $21 FP $65 FP $112 FP $241 FP
- ---------------------------------------------------------------------------------------------------------------
FIDELITY VIP III MID CAP $84 SP $124 SP $157 SP $272 SP $24 SP $74 SP $127 SP $272 SP
PORTFOLIO $84 FP $134 FP $187 FP $272 FP $24 FP $74 FP $127 FP $272 FP
- ---------------------------------------------------------------------------------------------------------------
JANUS ASPEN AGGRESSIVE $80 SP $112 SP $136 SP $229 SP $20 SP $62 SP $106 SP $229 SP
GROWTH PORTFOLIO $80 FP $122 FP $166 FP $229 FP $20 FP $62 FP $106 FP $229 FP
- ---------------------------------------------------------------------------------------------------------------
JANUS ASPEN CAPITAL $80 SP $112 SP $137 SP $231 SP $20 SP $62 SP $107 SP $231 SP
APPRECIATION PORTFOLIO $80 FP $122 FP $167 FP $231 FP $20 FP $62 FP $107 FP $231 FP
- ---------------------------------------------------------------------------------------------------------------
JANUS ASPEN GROWTH PORTFOLIO $80 SP $112 SP $136 SP $229 SP $20 SP $62 SP $106 SP $229 SP
$80 FP $122 FP $166 FP $229 FP $20 FP $62 FP $106 FP $229 FP
- ---------------------------------------------------------------------------------------------------------------
JANUS ASPEN WORLDWIDE $80 SP $113 SP $138 SP $232 SP $20 SP $63 SP $108 SP $232 SP
GROWTH PORTFOLIO $80 FP $123 FP $168 FP $232 FP $20 FP $63 FP $108 FP $232 FP
- ---------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH SERIES $82 SP $117 SP $145 SP $248 SP $22 SP $67 SP $115 SP $248 SP
$82 FP $127 FP $175 FP $248 FP $22 FP $67 FP $115 FP $248 FP
- ---------------------------------------------------------------------------------------------------------------
MFS GROWTH WITH INCOME SERIES $82 SP $118 SP $147 SP $252 SP $22 SP $68 SP $117 SP $252 SP
$82 FP $128 FP $177 FP $252 FP $22 FP $68 FP $117 FP $252 FP
- ---------------------------------------------------------------------------------------------------------------
MFS NEW DISCOVERY SERIES $85 SP $128 SP $163 SP $282 SP $25 SP $78 SP $133 SP $282 SP
$85 FP $138 FP $193 FP $282 FP $25 FP $78 FP $133 FP $282 FP
- ---------------------------------------------------------------------------------------------------------------
MFS RESEARCH SERIES $82 SP $118 SP $146 SP $250 SP $22 SP $68 SP $116 SP $250 SP
$82 FP $128 FP $176 FP $250 FP $22 FP $68 FP $116 FP $250 FP
- ---------------------------------------------------------------------------------------------------------------
MFS TOTAL RETURN SERIES $82 SP $119 SP $148 SP $254 SP $22 SP $69 SP $118 SP $254 SP
$82 FP $129 FP $178 FP $254 FP $22 FP $69 FP $118 FP $254 FP
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
4 PROSPECTUS
<PAGE>
Comparison of Contract Expenses Among Underlying Funds
For Single Premium (SP) and Flexible Premium (FP) Payment Contracts
Contract with 7 Year Enhanced Death Benefit
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
If you surrender your If you do not surrender
contract at the end of the or you annuitize at the end of
applicable time period: the applicable time period:
You would pay the You would pay the
following expenses on a $1,000 following expenses on a $1,000
investment, assuming a 5% investment, assuming a 5%
annual return on assets: annual return on assets:
Single Premium and Flexible Single Premium and Flexible
Premium Contracts Premium Contracts
-------------------------------------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs. 1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
THE GUARDIAN CASH FUND $82 SP $117 SP $145 SP $246 SP $22 SP $67 SP $115 SP $246 SP
$82 FP $127 FP $175 FP $246 FP $22 FP $67 FP $115 FP $246 FP
- ---------------------------------------------------------------------------------------------------------------
THE GUARDIAN BOND FUND $82 SP $118 SP $147 SP $251 SP $22 SP $68 SP $117 SP $251 SP
$82 FP $128 FP $177 FP $251 FP $22 FP $68 FP $117 FP $251 FP
- ---------------------------------------------------------------------------------------------------------------
THE GUARDIAN STOCK FUND $82 SP $117 SP $144 SP $245 SP $22 SP $67 SP $114 SP $245 SP
$82 FP $127 FP $174 FP $245 FP $22 FP $67 FP $114 FP $245 FP
- ---------------------------------------------------------------------------------------------------------------
THE GUARDIAN SMALL CAP STOCK $85 SP $126 SP $160 SP $278 SP $25 SP $76 SP $130 SP $278 SP
FUND $85 FP $136 FP $180 FP $278 FP $25 FP $76 FP $130 FP $278 FP
- ---------------------------------------------------------------------------------------------------------------
THE GUARDIAN VC 500 INDEX FUND $79 SP $109 SP $131 SP $219 SP $19 SP $59 SP $101 SP $219 SP
$79 FP $119 FP $131 FP $219 FP $19 FP $59 FP $101 FP $219 FP
- ---------------------------------------------------------------------------------------------------------------
THE GUARDIAN VC ASSET $83 SP $121 SP $152 SP $261 SP $23 SP $71 SP $122 SP $261 SP
ALLOCATION FUND $83 FP $131 FP $152 FP $261 FP $23 FP $71 FP $122 FP $261 FP
- ---------------------------------------------------------------------------------------------------------------
THE GUARDIAN VC HIGH YIELD $88 SP $136 SP $177 SP $310 SP $28 SP $86 SP $147 SP $310 SP
BOND FUND $88 FP $146 FP $207 FP $310 FP $28 FP $86 FP $147 FP $310 FP
- ---------------------------------------------------------------------------------------------------------------
BAILLIE GIFFORD INTERNATIONAL $86 SP $130 SP $167 SP $292 SP $26 SP $80 SP $137 SP $292 SP
FUND $86 FP $140 FP $197 FP $292 FP $26 FP $80 FP $137 FP $292 FP
- ---------------------------------------------------------------------------------------------------------------
BAILLIE GIFFORD EMERGING $91 SP $145 SP $192 SP $340 SP $31 SP $95 SP $162 SP $340 SP
MARKETS FUND $91 FP $155 FP $222 FP $340 FP $31 FP $95 FP $162 FP $340 FP
- ---------------------------------------------------------------------------------------------------------------
VALUE LINE CENTURION FUND $82 SP $119 SP $148 SP $253 SP $22 SP $69 SP $118 SP $253 SP
$82 FP $129 FP $178 FP $253 FP $22 FP $69 FP $118 FP $253 FP
- ---------------------------------------------------------------------------------------------------------------
VALUE LINE STRATEGIC ASSET $82 SP $118 SP $147 SP $252 SP $22 SP $68 SP $117 SP $252 SP
MANAGEMENT TRUST $82 FP $128 FP $177 FP $252 FP $22 FP $68 FP $117 FP $252 FP
- ---------------------------------------------------------------------------------------------------------------
GABELLI CAPITAL ASSET FUND $87 SP $134 SP $174 SP $304 SP $27 SP $84 SP $144 SP $304 SP
$87 FP $144 FP $204 FP $304 FP $27 FP $84 FP $144 FP $304 FP
- ---------------------------------------------------------------------------------------------------------------
AIM V.I. CAPITAL APPRECIATION $84 SP $123 SP $155 SP $268 SP $24 SP $73 SP $125 SP $268 SP
FUND $84 FP $133 FP $185 FP $268 FP $24 FP $73 FP $125 FP $268 FP
- ---------------------------------------------------------------------------------------------------------------
AIM V.I. GLOBAL UTILITIES $88 SP $136 SP $177 SP $310 SP $28 SP $86 SP $147 SP $310 SP
FUND $88 FP $146 FP $207 FP $310 FP $28 FP $86 FP $147 FP $310 FP
- ---------------------------------------------------------------------------------------------------------------
AIM V.I. VALUE FUND $84 SP $124 SP $157 SP $271 SP $24 SP $74 SP $127 SP $271 SP
$84 FP $134 FP $187 FP $271 FP $24 FP $74 FP $127 FP $271 FP
- ---------------------------------------------------------------------------------------------------------------
DAVIS FINANCIAL PORTFOLIO $87 SP $132 SP $169 SP $296 SP $27 SP $82 SP $139 SP $296 SP
$87 FP $142 FP $199 FP $296 FP $27 FP $82 FP $139 FP $296 FP
- ---------------------------------------------------------------------------------------------------------------
DAVIS REAL ESTATE PORTFOLIO $87 SP $132 SP $169 SP $296 SP $27 SP $82 SP $139 SP $296 SP
$87 FP $142 FP $199 FP $296 FP $27 FP $82 FP $139 FP $296 FP
- ---------------------------------------------------------------------------------------------------------------
DAVIS VALUE PORTFOLIO $87 SP $132 SP $169 SP $296 SP $27 SP $82 SP $139 SP $296 SP
$87 FP $142 FP $199 FP $296 FP $27 FP $82 FP $139 FP $296 FP
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
PROSPECTUS 7
<PAGE>
Contract with 7 Year Enhanced Death Benefit (continued)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
If you surrender your If you do not surrender
contract at the end of the or you annuitize at the end of
applicable time period: the applicable time period:
You would pay the You would pay the
following expenses on a $1,000 following expenses on a $1,000
investment, assuming a 5% investment, assuming a 5%
annual return on assets: annual return on assets:
Single Premium and Flexible Single Premium and Flexible
Premium Contracts Premium Contracts
-------------------------------------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs. 1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FIDELITY VIP II $84 SP $124 SP $156 SP $270 SP $24 SP $74 SP $126 SP $270 SP
CONTRAFUND PORTFOLIO $84 FP $134 FP $186 FP $270 FP $24 FP $74 FP $126 FP $270 FP
- ---------------------------------------------------------------------------------------------------------------
FIDELITY VIP EQUITY $83 SP $121 SP $152 SP $260 SP $23 SP $71 SP $122 SP $260 SP
INCOME PORTFOLIO $83 FP $131 FP $182 FP $260 FP $23 FP $71 FP $122 FP $260 FP
- ---------------------------------------------------------------------------------------------------------------
FIDELITY VIP III GROWTH $84 SP $125 SP $158 SP $273 SP $24 SP $75 SP $128 SP $273 SP
OPPORTUNITIES PORTFOLIO $84 FP $135 FP $188 FP $273 FP $24 FP $75 FP $128 FP $273 FP
- ---------------------------------------------------------------------------------------------------------------
FIDELITY VIP III MID CAP $87 SP $134 SP $173 SP $303 SP $27 SP $84 SP $143 SP $303 SP
PORTFOLIO $87 FP $144 FP $203 FP $303 FP $27 FP $84 FP $143 FP $303 FP
- ---------------------------------------------------------------------------------------------------------------
JANUS ASPEN AGGRESSIVE $83 SP $121 SP $152 SP $261 SP $23 SP $71 SP $122 SP $261 SP
GROWTH PORTFOLIO $83 FP $131 FP $182 FP $261 FP $23 FP $71 FP $122 FP $261 FP
- ---------------------------------------------------------------------------------------------------------------
JANUS ASPEN CAPITAL $83 SP $122 SP $153 SP $263 SP $23 SP $72 SP $123 SP $263 SP
APPRECIATION PORTFOLIO $83 FP $132 FP $183 FP $263 FP $23 FP $72 FP $123 FP $263 FP
- ---------------------------------------------------------------------------------------------------------------
JANUS ASPEN GROWTH PORTFOLIO $83 SP $121 SP $152 SP $261 SP $23 SP $71 SP $122 SP $261 SP
$83 FP $131 FP $182 FP $261 FP $23 FP $71 FP $122 FP $261 FP
- ---------------------------------------------------------------------------------------------------------------
JANUS ASPEN WORLDWIDE $83 SP $122 SP $154 SP $265 SP $23 SP $72 SP $124 SP $265 SP
GROWTH PORTFOLIO $83 FP $132 FP $184 FP $265 FP $23 FP $72 FP $124 FP $265 FP
- ---------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH SERIES $85 SP $127 SP $161 SP $279 SP $25 SP $77 SP $131 SP $279 SP
$85 FP $137 FP $191 FP $279 FP $25 FP $77 FP $131 FP $279 FP
- ---------------------------------------------------------------------------------------------------------------
MFS GROWTH WITH INCOME SERIES $85 SP $128 SP $163 SP $283 SP $25 SP $78 SP $133 SP $283 SP
$85 FP $138 FP $193 FP $283 FP $25 FP $78 FP $133 FP $283 FP
- ---------------------------------------------------------------------------------------------------------------
MFS NEW DISCOVERY SERIES $88 SP $137 SP $178 SP $313 SP $28 SP $87 SP $148 SP $313 SP
$88 FP $147 FP $208 FP $313 FP $28 FP $87 FP $148 FP $313 FP
- ---------------------------------------------------------------------------------------------------------------
MFS RESEARCH SERIES $85 SP $127 SP $162 SP $281 SP $25 SP $77 SP $132 SP $281 SP
$85 FP $137 FP $192 FP $281 FP $25 FP $77 FP $132 FP $281 FP
- ---------------------------------------------------------------------------------------------------------------
MFS TOTAL RETURN SERIES $86 SP $129 SP $164 SP $285 SP $26 SP $79 SP $134 SP $285 SP
$86 FP $139 FP $194 FP $285 FP $26 FP $79 FP $134 FP $285 FP
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
These expense comparisons assume that the expenses incurred during the periods
shown will be the same as those reported in the Expense Table above. The
comparison does not represent past or future expenses. Actual expenses may be
higher or lower than those shown. The effect of the annual contract fee was
calculated by: (1) dividing the total contract fees for the year ended December
31, 1999 by total average net assets for the year; (2) adding this percentage to
annual expenses; and (3) calculating the dollar amounts. In addition, premium
taxes ranging from .5% to 3.5% are currently imposed by certain states and
municipalities, and will reduce the amount of each premium payment available for
allocation under the contract. See Deductions and charges.
8 PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
THE GUARDIAN INSURANCE & ANNUITY COMPANY, INC.
- --------------------------------------------------------------------------------
The Guardian Insurance & Annuity Company, Inc. (GIAC) is a stock life insurance
company incorporated in the state of Delaware in 1970. GIAC, which issues the
contracts offered with this prospectus, is licensed to conduct an insurance
business in all 50 states of the United States and the District of Columbia. The
company had total assets of over $12.3 billion as of December 31, 1999. Its
financial statements appear in the Statement of Additional Information.
GIAC's executive office is located at 7 Hanover Square, New York, New York
10004. The mailing address of the GIAC Customer Service Office, which
administers these contracts, is P.O. Box 26210, Lehigh Valley, Pennsylvania
18002.
GIAC is wholly owned by The Guardian Life Insurance Company of America (Guardian
Life), a mutual life insurance company organized in the state of New York in
1860. As of December 31, 1999, Guardian Life had total assets in excess of $31.6
billion. Guardian Life does not issue the contracts offered under this
prospectus and does not guarantee the benefits they provide.
BUYING A CONTRACT
There are two types of contracts. With a Flexible Premium Payment Contract, you
make regular payments throughout the accumulation period. With a Single Premium
Payment Contract, you make a single payment when you buy the contract. Both
types of contracts allow you to direct where your net premium payments are
invested.
The application form
If you would like to buy a contract, you must complete and sign the application
form. You or your agent then must send it, along with your initial premium
payment, by regular U.S. mail to the following address:
The Guardian Insurance & Annuity Company, Inc.
Customer Service Office
P.O. Box 26210
Lehigh Valley, Pennsylvania 18002
If you wish to send your application and payment by certified, registered or
express mail, please address it to:
The Guardian Insurance & Annuity Company, Inc.
Customer Service Office
3900 Burgess Place
Bethlehem, Pennsylvania 18017
Our decision to accept or reject your application is based on administrative
rules such as whether you have completed the form completely and accurately. We
have the right to reject any application or initial premium payment for any
reason.
PROSPECTUS 9
<PAGE>
If we accept your application as received, we will credit your net premium
payment to your new contract within two business days. If your application is
not complete within five business days of our receiving it, we will return it to
you along with your payment.
Payments
We require a minimum initial premium payment of $5,000 for Single Premium
Payment Contracts, and $500 for Flexible Premium Payment Contracts ($1,000 in
New York State). Thereafter, the minimum additional flexible payment is $100.
However, if you purchase a Flexible Premium Payment Contract through an employer
payroll deduction plan, we will accept purchase payments below $100. The total
amount paid in flexible premium payments in any contract year after the first
may not exceed, without our written consent, the lesser of 10 times the total
amount you paid in premium payments in the first contract year, or $100,000.
THE ACCUMULATION PERIOD
How we allocate your premium payments
After we receive your initial premium payment and issue a contract to you, we
will normally credit subsequent net premium payments to your contract on the
same day we receive them, provided we receive them prior to the close of our
regular business day.
If we receive your payment on a non-business day, or after our close, we will
normally credit it on the next business day. If required in your state or
municipality, premium taxes are deducted from your payment before we credit it
to your contract. We call the amount remaining after this deduction the net
premium payment.
We use your net premium payments to purchase accumulation units in the variable
investment options you have chosen or in the fixed-rate option, according to
your instructions in the application or as later changed. The prices of
accumulation units are set daily because they change along with the share values
of the Funds you invest in. The amount you pay for each unit will be the next
price calculated after we receive and accept your payment.
The value of accumulation units will vary as you earn interest in the fixed-rate
option or as the value of investments rises and falls in the variable investment
options.
You can change your investment option selections by notifying us in writing. We
will apply your new instructions to subsequent net premium payments after we
receive and accept them. Please remember that you cannot invest in more than
twenty variable investment options, or nineteen variable investment options and
the fixed-rate option at any given time.
10 PROSPECTUS
<PAGE>
The Separate Account
GIAC has established a Separate Account, known as Separate Account D, to receive
and invest your premium payments in the variable investment options. The
Separate Account has 31 investment divisions, corresponding to the 31 Funds
available to you. The performance of each division is based on the Fund in which
it invests. Each investment division is divided into two subdivisions, one for
tax qualified retirement plans and the other for non-tax qualified retirement
plans.
The Separate Account was established by GIAC in August 1989. It is registered as
a unit investment trust under the Investment Company Act of 1940 (the 1940 Act)
and meets the definition of a separate account under federal securities laws.
State insurance law provides that the assets of the Separate Account equal to
its reserves and other liabilities are not chargeable with GIAC's obligations
except those under annuity contracts issued through the Separate Account.
Income, gains and losses of the Separate Account are kept separate from other
income, gains or losses of the contract owner.
Each investment division is administered and accounted for as part of the
general business of GIAC. Under Delaware law, the income and capital gains or
capital losses of each investment division are credited to or charged against
the assets held in that division according to the terms of each contract,
without regard to other income, capital gains or capital losses of the other
investment divisions or of GIAC. Contract obligations are GIAC's responsibility.
According to Delaware insurance law, the assets of the Separate Account are not
chargeable with liabilities arising out of any other business GIAC may conduct.
Please see Financial Information: Federal tax matters.
We have the right to make changes to the Separate Account, to the investment
divisions within it, and to the fund shares they hold. These changes must be
made in a manner that is consistent with laws and regulations. When necessary,
we'll use this right to serve your best interests and to carry out the purposes
of the contract. Possible changes to the Separate Account and the investment
divisions include:
o deregistering the Separate Account under the 1940 Act
o operating the Separate Account as a management investment company, or in
another permissible form
o combining two or more Separate Accounts or investment divisions
o transferring assets to another Separate Account
o modifying the contracts where necessary to preserve the favorable tax
treatment that owners of variable annuities currently receive under the
Internal Revenue Code.
PROSPECTUS 11
<PAGE>
Variable investment options
You may choose to invest in a maximum of twenty of the 31 variable investment
options at any time. Each Fund is an open-end diversified management investment
company, registered with the Securities and Exchange Commission under the 1940
Act.
The Funds have different investment objectives which influence their risk and
return. The table below summarizes their main characteristics.
Some Funds have similar investment objectives and policies to other Funds
managed by the same adviser. However, the investment returns of the Funds may be
higher or lower than those of similar funds managed by the same adviser. There
is no assurance, and we make no representation, that the performance of any Fund
will be comparable to the performance of any other fund.
All of the funds are available for investment through other variable annuity
contracts funded by the Separate Account. Some of these Funds are also available
under other separate accounts supporting variable annuity contracts and variable
life insurance policies of GIAC and other companies. We do not anticipate any
inherent conflicts with these arrangements. However, it is possible that
conflicts of interest may arise in connection with the use of the same Funds
under both variable life insurance policies and variable annuity contracts, or
issued by different companies. While the Board of Directors of each Fund
monitors activities in an effort to avoid or correct any material irreconcilable
conflicts of interest arising out of this arrangement, we may also take actions
to protect the interests of our contract owners. See the accompanying Fund
prospectuses for more information about possible conflicts of interest.
Some investment advisers (or their affiliates) may pay us compensation for
administration, distribution or other expenses. Currently, these advisers
include Value Line, Inc., Massachusetts Financial Services Company, AIM
Advisors, Inc., Janus Capital Corporation, Fidelity Management & Research
Company and Davis Selected Advisers, LP. The amount of compensation is usually
based on assets of the relevant variable investment options from contracts that
we issue, and some advisers may pay us more than others.
12 PROSPECTUS
<PAGE>
<TABLE>
<CAPTION>
Fund Investment objective(s) Typical investments
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
The Guardian Stock Fund Long-term growth of capital U.S. common stocks
- -------------------------------------------------------------------------------------------------------------
The Guardian Small Cap Stock Fund Long-term growth of capital U.S. common stocks of companies
with small market capitalization
- -------------------------------------------------------------------------------------------------------------
The Guardian Bond Fund Maximum income without undue risk Investment grade debt
of principal; capital appreciation obligations
as a secondary objective
- -------------------------------------------------------------------------------------------------------------
The Guardian Cash Fund High level of current income Money market instruments
consistent with liquidity and
preservation of capital
- -------------------------------------------------------------------------------------------------------------
The Guardian VC 500 Index Fund Seeks to match the investment Common stocks of companies in the
performance of the Standard & S&P Index, which emphasizes large
Poor's 500 Corporate Stock U.S. companies
Price Index (the "S&P Index")
- -------------------------------------------------------------------------------------------------------------
The Guardian VC High Yield Current income; capital Corporate bonds and other debt
Bond Fund appreciation is a secondary securities rated below investment
objective grade
- -------------------------------------------------------------------------------------------------------------
The Guardian VC Asset Long-term total investment return Shares of The Guardian Stock Fund,
Allocation Fund consistent with moderate The Guardian Bond Fund, and The
investment risk Guardian Cash Fund
- -------------------------------------------------------------------------------------------------------------
Baillie Gifford International Fund Long-term capital appreciation Common stocks and convertible
securities issued by foreign
companies
- -------------------------------------------------------------------------------------------------------------
Baillie Gifford Emerging Markets Long-term capital appreciation Common stocks and convertible
Fund securities of emerging market
companies
- -------------------------------------------------------------------------------------------------------------
Value Line Centurion Fund Long-term growth of capital U.S. common stocks with selections
based on rankings of the Value
Line Ranking System
- -------------------------------------------------------------------------------------------------------------
Value Line Strategic Asset High total investment return U.S. common stocks with selections
Management Trust (current income and capital based on rankings of the Value
appreciation) consistent with Line Ranking System, bonds and
reasonable risk money market instruments
- -------------------------------------------------------------------------------------------------------------
Gabelli Capital Asset Fund Growth of capital; current income U.S. common stocks and convertible
as a secondary objective securities
- -------------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund Growth of capital Common stocks of medium and
small-sized growth companies
- -------------------------------------------------------------------------------------------------------------
AIM V.I. Global Utilities Fund High current income; growth of Common and preferred stocks of
capital as a secondary objective domestic or foreign public utilities
- -------------------------------------------------------------------------------------------------------------
AIM V.I. Value Fund Long-term growth of capital; Equity securities judged to be
income as a secondary objective undervalued by the investment
adviser
- -------------------------------------------------------------------------------------------------------------
Davis Financial Portfolio Growth of capital Common stocks of financial companies
- -------------------------------------------------------------------------------------------------------------
Davis Real Estate Portfolio Total return through a Securities issued by companies that
combination of growth and income are "principally engaged" in real
estate
- -------------------------------------------------------------------------------------------------------------
Davis Value Portfolio Growth of capital U.S. common stocks of companies with
at least $5 billion market
capitalization
- -------------------------------------------------------------------------------------------------------------
</TABLE>
PROSPECTUS 13
<PAGE>
<TABLE>
<CAPTION>
Fund Investment objective(s) Typical investments
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Fidelity VIP II Contrafund Long-term capital appreciation U.S. and foreign common stocks of
Portfolio companies believed to be undervalued
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Reasonable income; also considers Income-producing equity securities
Portfolio potential for capital appreciation
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP III Growth Capital growth U.S. and foreign common stocks
Opportunities Portfolio
- -------------------------------------------------------------------------------------------------------------
Fidelity VIP III Mid Cap Portfolio Long-term growth of capital Common stocks with medium market
capitalization, both U.S. and
foreign
- -------------------------------------------------------------------------------------------------------------
Janus Aspen Aggressive Long-term growth of capital Equity securities of medium-sized
Growth Portfolio companies; non-diversified
- -------------------------------------------------------------------------------------------------------------
Janus Aspen Capital Long-term growth of capital Equity securities of companies of
Aggressive Portfolio any size; non-diversified
- -------------------------------------------------------------------------------------------------------------
Janus Aspen Growth Long-term growth of capital in Common stocks of issuers of any size
Portfolio a manner consistent with
preservation of capital
- -------------------------------------------------------------------------------------------------------------
Janus Aspen Worldwide Long-term growth of capital in Common stocks of foreign and U.S.
Growth Portfolio a manner consistent with issuers; usually invests in at least
preservation of capital five countries, including the U.S.
- -------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Series Long-term growth of capital Common stocks of emerging growth
companies of any size
- -------------------------------------------------------------------------------------------------------------
MFS Growth With Income Series Reasonable current income and Equity securities issued by U.S.
long-term growth of capital and and foreign companies
income
- -------------------------------------------------------------------------------------------------------------
MFS New Discovery Series To seek capital appreciation Equity securities of companies that
offer superior prospects for growth,
both U.S. and foreign
- -------------------------------------------------------------------------------------------------------------
MFS Research Series Long-term growth of capital and Equity securities of companies
future income believed to possess better than
average prospects for long-term
growth
- -------------------------------------------------------------------------------------------------------------
MFS Total Return Series Above average income consistent Broad list of securities, including
with prudent employment of a combination of equity and
capital; as a secondary fixed-income, both U.S. and foreign
objective, to provide reasonable
opportunity for growth of capital
and income
- -------------------------------------------------------------------------------------------------------------
</TABLE>
Some of these Funds may not be available in your state.
14 PROSPECTUS
<PAGE>
The Funds' investment advisers and their principal business addresses are shown
in the table below.
<TABLE>
<CAPTION>
Fund Investment Adviser
and Principal Business Address
- ---------------------------------------------------------------------------------------
<S> <C>
The Guardian Stock Fund Guardian Investor Services Corporation
The Guardian Small Cap Stock Fund 7 Hanover Square
The Guardian Bond Fund New York, New York 10004
The Guardian Cash Fund
The Guardian VC 500 Index Fund
The Guardian VC Asset Allocation Fund
The Guardian VC High Yield Bond Fund
- ---------------------------------------------------------------------------------------
Baillie Gifford International Fund Guardian Baillie Gifford Limited (Adviser)
Baillie Gifford Emerging Markets Fund Baillie Gifford Overseas Limited (Sub-adviser)
1 Rutland Court
Edinburgh, Scotland
EH3 8EY
- ---------------------------------------------------------------------------------------
Value Line Centurion Fund Value Line, Inc.
Value Line Strategic Asset Management 220 East 42nd Street
Trust New York, New York 10017
- ---------------------------------------------------------------------------------------
Gabelli Capital Asset Fund Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580
- ---------------------------------------------------------------------------------------
MFS Growth With Income Series Massachusetts Financial Services Company
MFS Emerging Growth Series 500 Boylston Street
MFS New Discovery Series Boston, MA 02116
MFS Research Series
MFS Total Return Series
- ---------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund A I M Advisors, Inc.
AIM V.I. Global Utilities Fund 11 Greenway Plaza -- Suite 100
AIM V.I. Value Fund Houston, Texas 77046-1173
- ---------------------------------------------------------------------------------------
Davis Financial Portfolio Davis Selected Advisers, LP
Davis Real Estate Portfolio 2949 East Elvira Road
Davis Value Portfolio Suite 101
Tucson, Arizona 85706
- ---------------------------------------------------------------------------------------
Fidelity VIP II Contrafund Portfolio Fidelity Management & Research Company
Fidelity VIP Equity-Income Portfolio 82 Devonshire Street
Fidelity VIP III Growth Boston, Massachusetts 02109
Opportunities Portfolio
Fidelity VIP III Mid Cap Portfolio
- ---------------------------------------------------------------------------------------
Janus Aspen Aggressive Janus Capital Corporation
Growth Portfolio 100 Fillmore Street
Janus Aspen Capital Appreciation Denver, Colorado 80206-4928
Portfolio
Janus Aspen Growth Portfolio
Janus Aspen Worldwide Growth
Portfolio
- ---------------------------------------------------------------------------------------
</TABLE>
Before investing, please read the accompanying Fund prospectuses carefully. They
contain important information on the investment objectives, policies, charges
and expenses of the Funds.
PROSPECTUS 15
<PAGE>
Fixed-rate option
The fixed-rate option is not registered under the Securities Act of 1933 or as
an investment company under the 1940 Act, and is therefore not subject to the
provisions or restrictions of these Acts. However, the following disclosure
about the fixed-rate option may be subject to certain generally applicable
provisions of the federal securities laws regarding the accuracy and
completeness of statements not in prospectuses. The fixed-rate option may not be
available for allocation in all states in which the contracts are available.
In the fixed-rate option, we guarantee that the net premium payments you invest
will earn daily interest at a minimum annual rate of 3.5%. You can allocate all
of your net premium payments to this option, or you may choose it as one of your
twenty investment selections. The value of your net premiums invested in the
fixed-rate option does not vary with the investment experience of any Fund. The
money that you put into your fixed-rate option becomes part of GIAC's general
assets.
At certain times we may choose to pay interest at a rate higher than 3.5%, but
we aren't obliged to do so. Higher interest rates are determined at our
discretion, and we can change them prospectively without notice. We don't use a
specific formula to determine interest rates; rather we consider such factors as
general economic trends, current rates of return on our general account
investments, regulatory and tax requirements, and competitive factors. The rate
of interest we pay hasn't been limited by our Board of Directors.
Here are some of the important conditions that apply when we pay interest on
your investments in the fixed-rate option:
o The initial interest rate that we credit to your premiums or transfers
will be whatever rate is in effect on the date the amounts are allocated
to the fixed-rate option.
o This interest rate will continue until the next contract anniversary date.
o At that time, all payments and transfers allocated to the fixed-rate
option during the previous year, together with interest earned, will be
credited with the rate of interest in effect on the renewal date, known as
the renewal rate.
o The renewal rate will be guaranteed until the next contract anniversary
date.
If your state's insurance department permits, your contract may have what's
known as a bailout rate. If the renewal rate set on any contract anniversary
date is more than 3% below the interest rate for the previous year, or falls
below the minimum bailout rate outlined in your contract, you can withdraw all
or part of the money you have invested in the fixed-rate option for one year or
more from the contract without incurring a deferred sales charge.
When you buy a contract, please note:
- --------------------------------------------------------------------------------
o You can choose up to 20 investment options at any one time.
o If you select the fixed-rate option, you are limited to an
additional 19 variable options.
o There are no initial sales charges on the premium payments that you
allocate to the variable investment options. However, there may be
premium tax charges.
o All of the dividends and capital gains distributions that are
payable to variable investment options are reinvested in shares of
the applicable Fund at the current net asset value.
o When the annuity period of the contract begins, we will apply your
accumulation value to a payment option in order to make annuity
payments to you.
o You can arrange to transfer your investments among the divisions by
notifying us in writing or by telephone. Currently, there is no fee
for this, but we reserve the right to charge a fee and to limit the
number of transactions.
o You can change beneficiaries as long as the annuitant is living.
16 PROSPECTUS
<PAGE>
Transfers
You can transfer money among variable investment options both before and after
the date annuity payments begin. You can also transfer to and from the
fixed-rate option, but only before the date annuity payments begin. Transfers
are subject to certain conditions, which are described below.
If you are considering a transfer, be sure to look into each option carefully
and make sure your decisions will help you to achieve your long-term investment
goals.
During the accumulation period and up to 30 days before the date annuity
payments are scheduled to begin, you can transfer all or part of your
accumulation value among the contract options. These transfers are subject to
the following rules:
o We permit transfers from the fixed-rate option to any variable investment
option only once each contract year, during the 30 days beginning on the
contract anniversary date. Amounts that have been on deposit in the
fixed-rate option longest will be transferred out first. The maximum
yearly transfer from the fixed-rate option is the greater of the
following:
- -- 33 1/3% of the amount in the fixed-rate option on the applicable contract
anniversary date or
- -- $2,500.
Each transfer involving the variable investment options will be based on the
accumulation unit value that is next calculated after we have received proper
transfer instructions from you.
We will implement a transfer upon receiving your written or telephone
instructions in good order. If your request reaches our customer service office
before 3:30 p.m. Eastern time on a business day, we will normally implement it
that same day.
At this time, we do not limit the number of transfers you may make. However, we
have the right to limit the frequency of transfers to not more than once every
30 days.
At this time, we do not charge for transfers; however, we do have the right to
impose a fee of up to $25 per transfer. We will deduct any transfer charges on a
pro-rata basis from the options you transfer from.
We require proper authorization to honor telephone transfer instructions. If you
would like this privilege, please complete a transfer authorization form, or
give us authorization on your application. Once we have your authorization on
file, you can carry out a telephone transfer by calling 1-800-533-0099 between
9:00 a.m. and 3:30 p.m. Eastern time on any business day when we are open.
PROSPECTUS 17
<PAGE>
During periods of drastic economic or market changes it may be difficult to
contact us to request a telephone transfer. At such times, please send your
transfer request by regular or express mail and we will process it using the
accumulation unit value first calculated after we receive the request. We have
the right to modify, suspend or discontinue telephone transfer privileges at any
time without prior notice.
After the date annuity payments begin, if you have a variable annuity option you
can transfer all or part of the value of your annuity among the variable
investment options only once each calendar year. No fixed-rate option transfers
are permitted.
Surrenders and partial withdrawals
During the accumulation period and while the annuitant and all contract owners
are living, you can redeem your contract in whole. This is known as surrendering
the contract. If you redeem part of the contract, it's called a partial
withdrawal. We will not accept requests for surrenders or partial withdrawals
after the date annuity payments begin.
Your request for surrenders and partial withdrawals must be received in good
order. If you wish to surrender your contract, you must send us the contract or
we will not process the request. If you have lost the contract, we will require
an acceptable affidavit of loss.
To process a partial withdrawal, we will redeem enough accumulation units to
equal the dollar value of your request. When you surrender your contract, we
redeem all the units. For both transactions we use the unit value next
calculated after we receive a proper request from you. We will deduct any
applicable contract charges and deferred sales charges from the proceeds of a
surrender. In the case of a partial withdrawal, we will cash additional units to
cover these charges. If you have less than $1,000 left in your contract after a
partial withdrawal, we will cancel the contract and pay you the balance of the
proceeds. This is called an involuntary surrender and it may be subject to any
applicable contract charges and a deferred sales charge. Please see Financial
information: Federal tax matters.
Surrenders and partial withdrawals are subject to tax, and may be subject to
penalty taxes and mandatory federal income tax withholding. After the first
contract year, you are allowed to make an annual withdrawal of the following
amounts from the contract without paying a deferred sales charge:
- --------------------------------------------------------------------------------
When you call us, we will require identification of your contract as well
as your personal security code. We may accept transfer instructions from
anyone who can provide us with this information. Neither GIAC, Guardian
Investor Services Corporation, nor the Funds will be liable for any loss,
damage, cost or expense resulting from a telephone transfer we reasonably
believe to be genuine. As a result, you assume the risk of unauthorized or
fraudulent telephone transfers. We may record telephone conversations
regarding transfers without disclosure to the caller.
18 PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
There are special restrictions on withdrawals from contracts issued in
connection with Section 403(b) qualified plans. Please see Financial
information: Federal tax matters for details about how withdrawals can be
made from these contracts.
For Single Premium Payment Contracts
o 10% of your contract's accumulation value, or if greater,
o 10% of the amount of your single premium payment.
For Flexible Premium Payment Contracts
o 10% of your contract's accumulation value, or if greater,
o 10% of the total premiums paid during the 84 months immediately preceding
the date of your withdrawal.
These withdrawal privileges can be exercised in the first contract year of the
following contracts:
o Section 1035 exchanges
o IRA transfers
o rollovers from annuity contracts.
Unless you are making a withdrawal directly from the fixed-rate option in
accordance with the bailout provisions, we will cash accumulation units in the
following order:
o all variable accumulation units attributable to the investment divisions;
this will be done on a pro-rata basis unless you instruct us differently,
then
o all fixed accumulation units attributable to the fixed-rate option.
We will send you your payment within seven days of receiving a request from you
in good order. Please see Payments later in this section.
If you have a question about surrenders or withdrawals, please call us toll free
at 1-800-221-3253.
Managing your annuity
You may wish to take advantage of one of the programs we offer to help you build
a stronger annuity, such as dollar cost averaging.
There is no fee for dollar cost averaging, but we have the right to introduce
one. We also have the right to modify or discontinue this program. We'll give
you written notice if we do so.
Dollar Cost Averaging
You can transfer specific amounts of money from one investment option to another
on a monthly basis, as opposed to investing the total amount at one time. This
approach may help lower your average dollar cost of investing over time.
However, there is no guarantee that dollar cost averaging will result in profits
or prevent losses.
If you wish to take advantage of this program, you must designate a dollar
amount to be transferred automatically out of the Cash Fund investment division.
The money can go into one or more of the other variable investment options or
the fixed-rate option. The rule still applies
PROSPECTUS 19
<PAGE>
that you can invest in a maximum of only twenty options at one time (this
includes the required Cash Fund option).
You can begin dollar cost averaging when you buy your contract or at any time
afterwards, until annuity payments begin, by completing the dollar cost
averaging election form and returning it to us. We must receive it in good order
at least three business days before the monthly anniversary date of when you
wish the transfers to begin.
You may select dollar cost averaging from the Cash Fund investment division for
periods of 12, 24 or 36 months. Your total accumulation value at the time must
be at least $10,000 for transfers over a 12-month period, and $20,000 for
transfers over a 24 to 36 month period. Transfers will be made in the amounts
you designate and must be at least $100 per receiving contract investment
option.
Payments:
- --------------------------------------------------------------------------------
For all transactions, we can delay payment if the contract is being
contested. We may postpone any calculation or payment from the variable
investment options if:
o the New York Stock Exchange is closed for trading or trading has
been suspended, or
o the Securities and Exchange Commission restricts trading or
determines that a state of emergency exists which may make payment
or transfer impracticable
Assigning contract interests
If the contract is part of a corporate retirement plan or an individual
plan under sections 401(a), 403(b) or 408 of the Internal Revenue Code,
the contract owner's interest in the contract cannot be assigned, unless
the contract owner is not the annuitant or the annuitant's employer.
Assigned contract interests may be treated as a taxable distribution to
the contract owner. See Federal tax matters for more information.
Reports
At least twice each year, we send a report to each contract owner that
contains financial information about the Separate Account, according to
applicable laws, rules and regulations. Additionally, at least once each
year, we send a statement to each contract owner that reports the number
of accumulation units and their value under the contract.
20 PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
SUMMARY
- --------------------------------------------------------------------------------
THE ANNUITY PERIOD
When annuity payments begin
You choose the month and year in which we will begin paying annuity benefits.
The first payment is made on the first day of the month. The date you choose
can't be later than the annuitant's 85th birthday, unless we have agreed. Please
note that this date may be determined by the retirement plan under which your
annuity contract was issued.
How your annuity payments are calculated
Your annuity payments will be fixed, variable or a combination of both,
depending on whether you have chosen a fixed-rate or a variable rate payment
option. Your payments are determined by the following:
o the table in your contract reflecting the nearest age of the annuitant
o the annuity payout option you choose
o the investment returns of the variable investment options you choose, if
you choose a variable payment option.
The number and amount of your annuity payments won't be affected by the
longevity of annuitants as a group. Nor will they be affected by an increase in
our expenses over the amount we have charged in your contract.
We will make annuity payments once a month, except as follows:
o Proceeds of less than $2,000 will be delivered in a single payment.
o We may change the schedule of installment payments to avoid payments of
less than $20.
If you choose a variable annuity payment, or a combination of variable and fixed
payments, variable annuity payments assume a 4% annual investment return. We
compare the assumed rate of 4% to the actual returns of the variable investment
options you have chosen:
o if the actual net annual return on investment equals 4% -- the amount of
your variable annuity payments will not change
o if the actual net annual return on investment is greater than 4% -- the
amount of your variable annuity payments will increase
o if the actual net annual return on investment is less than 4% -- the
amount of your variable annuity payments will decrease.
Variable annuity payout options
The payout options currently offered are discussed below. You can choose to have
annuity payments made under any one of the variable or fixed-rate annuity payout
options that are available. You can make your choice at any time before your
annuity payments begin. At any time, we may discontinue any of these options or
make additional options available.
PROSPECTUS 21
<PAGE>
All variable annuity payout options are designated with the letter "V." After
the first payment, the amount of variable annuity payments will increase or
decrease to reflect the value of your variable annuity units. The value of the
units will reflect the performance of the variable investment options chosen.
This is why the amount of each payment will vary.
There are a variety of payout options for you to choose from that we've
described below. If you do not make a choice, we will automatically select
Option V-2. You may change options if you wish, provided you do so before
payments begin.
Option V-1 -- Life Annuity without Guaranteed Period
We make a payment once a month during the annuitant's lifetime, ending with the
payment preceding the annuitant's death. This option allows for the maximum
variable monthly payment because there is neither a guaranteed minimum number of
payments nor a provision for a death benefit for beneficiaries. It is possible
that an annuitant could receive only one payment, if he or she dies before the
date of the second payment.
Option V-2 -- Life Annuity with 10-Year Guaranteed Period
We make a payment once a month during the annuitant's lifetime, but if the
annuitant dies before receiving 10 years worth of payments (120), the remaining
payments will be made to the beneficiary. The beneficiary can then choose to
take all or part of the remaining payments in a lump sum at their current dollar
value. If the beneficiary dies while receiving the payments, the balance will be
paid in one sum at its current dollar value to the beneficiary's estate.
Option V-3 -- Joint and Survivor Annuity
We make a payment once a month during the joint lifetimes of the annuitant and a
designated second person, the joint annuitant. If one dies, payments will
continue during the survivor's lifetime, but the amount of the payment will then
be reduced to two-thirds of the number of units paid out each month when both
parties were alive. It is possible that the joint annuitants could receive only
one payment if they both die before the date of the second payment.
Fixed-rate annuity payout options
All Fixed Annuity Payout Options are designated by the letter "F."
Option F-1 -- Life Annuity without Guaranteed Period
We make a fixed payment once a month during the annuitant's lifetime, ending
with the payment preceding the annuitant's death. This option offers the maximum
fixed payment because there is neither a guaranteed minimum number of fixed
monthly payments nor a provision for a death benefit for beneficiaries. It is
possible that the annuitant could receive only one payment if he or she dies
before the date of the second payment.
22 PROSPECTUS
<PAGE>
Option F-2 -- Life Annuity with 10-Year Guaranteed Period
We make a fixed payment once a month during the annuitant's lifetime, but if the
annuitant dies before receiving 10 years worth of payments (120), the remaining
payments will be made to the beneficiary. The beneficiary can then choose to
take all or part of the remaining payments in a lump sum at their current dollar
value. If the beneficiary dies while receiving the payments, the balance will be
paid in one sum at its current dollar value to the beneficiary's estate.
Option F-3 -- Joint and Survivor Annuity
We make a fixed payment once a month during the joint lifetimes of the annuitant
and a designated second person, the joint annuitant. If one dies, payments will
continue during the survivor's lifetime, but the amount of the payment will then
be reduced to two-thirds of the number of units paid out each month when both
parties were alive. It is possible that the joint annuitants could receive only
one payment if they both die before the date of the second payment.
OTHER CONTRACT FEATURES
Death benefits
If the annuitant you have named or you (if the contract is a non-qualified
contract), dies before the date annuity payments begin, we pay a death benefit.
In addition, you have the option of buying an enhanced death benefit rider which
may provide a higher death benefit.
The regular death benefit is the greatest of:
o the accumulation value of the contract at the end of the valuation period
during which we receive proof of death;
o the total of all premiums paid, minus any partial withdrawals and any
deferred sales charges paid on any withdrawals; or
o the accumulation value of your contract as of the first contract
anniversary date following the date the Department of Insurance in your
state approves this contract feature, plus any premiums paid on or after
this anniversary, less any withdrawals and contingent deferred sales
charges made after this anniversary.
For annuitants aged 75 or older on the contract's issue date, the death benefit
will be the accumulation value at the end of the valuation period during which
we receive proof of death.
Generally, your beneficiaries will be taxed on the gain in your annuity
contract. Consult your tax adviser about the estate tax and income tax
consequences of your particular situation.
We normally pay the death benefit within seven days of receiving in good order
proof of death. However, we have the right to defer the payment of other
contract benefits under certain circumstances. These are described under
Surrenders and partial withdrawals.
PROSPECTUS 23
<PAGE>
Enhanced death benefits
The enhanced death benefit riders are available under current contracts that
have annuitants who are under age 75 at the time the rider is issued. If a death
benefit is payable and one of these options is in force, the beneficiary will
receive either the death benefit described above or the enhanced death benefit,
whichever is greater.
Two riders are offered:
o the 7 Year Enhanced Death Benefit Rider which has a daily charge
based on an annual rate of 0.30% of the net assets of your variable
investment options.
o the Contract Anniversary Enhanced Death Benefit Rider, which has a
daily charge based on an annual rate of 0.25% of the net assets of
your variable investment options.
These riders are available only in states where they have been approved.
7 Year Enhanced Death Benefit Rider
The enhanced death benefit under this rider is calculated as follows:
o The accumulation value of the contract at the end of the reset date
immediately preceding the annuitant's death:
- Plus any premiums paid after the reset date
- Minus any partial withdrawals after the reset date
- Minus any deferred sales charges and annuity taxes.
The first reset date is on the seventh contract anniversary date. After this,
each reset date will be each seventh contract anniversary date after that (i.e.,
the 14th, 21st and 28th contract anniversaries, and so on).
Contract Anniversary Enhanced Death Benefit Rider
The enhanced death benefit under this rider is calculated as follows:
o the highest accumulation value of the contract on any contract anniversary
before the annuitant's 85th birthday:
- plus any premiums paid after that contract anniversary
- minus any partial withdrawals after that contract anniversary
- minus any deferred sales charges and annuity taxes
24 PROSPECTUS
<PAGE>
We will terminate either enhanced death benefit rider on the earliest of the
following dates:
o the date the enhanced death benefit is paid out
o the date the contract terminates
o the date of the annuitant's 85th birthday
o the date annuity payments begin
o the date we receive a written termination request from you.
Once the rider is terminated, it cannot be reinstated. We reserve the right to
discontinue the offer of either enhanced death benefit rider at any time,
without prior notice.
FINANCIAL INFORMATION
How we calculate unit values
When you choose a variable investment option, you accumulate variable
accumulation units. With the fixed-rate option, you accumulate fixed
accumulation units. To calculate the number of accumulation units you buy with
each payment, we divide the amount you invest in each option by the value of
units in the option. We use the unit value next calculated after we have
received and accepted your payment. We calculate unit values at the close of
business of the New York Stock Exchange, usually at 4:00 p.m. Eastern time, each
day the Exchange is open for trading and GIAC is open for business.
To determine the value of your account, we multiply the number of accumulation
units in each option by the current unit value for the option.
We determine the value of a fixed accumulation unit by adding together its value
at the end of the preceding valuation period and any interest credited to the
unit since the end of that period.
We determine the value of a variable accumulation unit by multiplying its value
at the end of the preceding valuation period by the net investment factor for
the current valuation period.
PROSPECTUS 25
<PAGE>
The net investment factor is a measure of the investment experience of each
variable investment option. We determine the net investment factor for a given
valuation period as follows:
o At the end of the valuation period we add together the net asset value of
a Fund share and its portion of dividends and distributions made by the
Fund during the period.
o We divide this total by the net asset value of the particular Fund share
calculated at the end of the preceding valuation period.
o Finally we add up the daily charges (mortality and expense risks,
administrative expenses, any premium taxes, and the enhanced death benefit
rider where applicable) and subtract them from the above total.
Summary financial information about the Separate Account
The following unit financial information is derived from the financial
statements of Separate Account D, which were audited by PricewaterhouseCoopers
LLP, independent accountants, for the year ended December 31, 1999. The data
should be read in conjunction with the financial statements, related notes and
other financial information from the Guardian Separate Account D's 1999 Annual
Report to contract owners, which is incorporated by reference into the Statement
of Additional Information. A copy of the 1999 Annual Report to contract owners
and the Statement of Additional Information may be obtained by calling or
writing GIAC's Customer Service Office. The address and phone number appear on
the cover of this Prospectus.
The Funds in the tables below are only some of the variable investment options
available to you. The other Funds were not offered in 1999 and therefore are not
included in the summary financial information.
26 PROSPECTUS
<PAGE>
Summary financial information about the Separate Account
Selected data for accumulation units of the Separate Account
outstanding at the end of each period
<TABLE>
<CAPTION> Basic contract
Year Ended December 31,
Variable accumulation
unit value
at beginning of period ($): 1999 1998 1997 1996 1995 1994 1993 1992 1991
-------- -------- -------- -------- --------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
The Guardian Cash Fund 13.808 13.289 12.785 12.319 11.809 11.507 11.341 11.115 10.649
The Guardian Stock Fund 43.374 36.607 27.313 21.775 16.359 16.763 14.136 11.910 8.862
The Guardian Bond Fund 18.373 17.195 15.960 15.695 13.503 14.149 13.029 12.238 10.655
The Guardian Small
Cap Stock Fund 10.540 11.314 10.000(4) N/A N/A N/A N/A N/A N/A
Gabelli Capital Asset Fund 18.362 16.629 11.798 10.751 10.000(3) N/A N/A N/A N/A
Baillie Gifford
International Fund 21.222 17.717 16.012 14.036 12.766 12.803 9.662 10.739 10.00(1)
Baillie Gifford Emerging
Markets Fund 7.754 10.711 10.626 8.629 8.782 10.000(2) N/A N/A N/A
Value Line Centurion Fund 42.480 33.714 28.097 24.224 17.495 18.099 16.766 16.012 10.644
Value Line Strategic Asset
Management Trust 35.780 28.415 24.854 21.700 17.079 18.164 16.427 14.445 10.194
MFS Growth With
Income Series 12.569 10.395 10.000(4) N/A N/A N/A N/A N/A N/A
<CAPTION>
Year Ended December 31,
Variable accumulation
unit value
at end of period ($): 1999 1998 1997 1996 1995 1994 1993 1992 1991
-------- -------- -------- -------- --------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
The Guardian Cash Fund 14.301 13.808 13.289 12.785 12.319 11.809 11.507 11.341 11.115
The Guardian Stock Fund 56.237 43.374 36.607 27.313 21.775 16.359 16.763 14.136 11.910
The Guardian Bond Fund 18.009 18.373 17.195 15.960 15.695 13.503 14.149 13.029 12.238
The Guardian Small Cap
Stock Fund 14.071 10.540 11.314 N/A N/A N/A N/A N/A N/A
Gabelli Capital Asset Fund 21.746 18.362 16.629 11.798 10.751 N/A N/A N/A N/A
Baillie Gifford
International Fund 29.183 21.222 17.717 16.012 14.036 12.766 12.803 9.662 10.739
Baillie Gifford Emerging
Markets Fund 13.203 7.754 10.711 10.626 8.629 8.782 N/A N/A N/A
Value Line Centurion
Fund 53.845 42.480 33.714 28.097 24.224 17.495 18.099 16.766 16.012
Value Line Strategic Asset
Management Trust 43.994 35.780 28.415 24.854 21.700 17.079 18.164 16.427 14.445
MFS Growth With
Income Series 13.256 12.569 10.395 N/A N/A N/A N/A N/A N/A
</TABLE>
(1) Commencing February 8, 1991
(2) Commencing October 17, 1994
(3) Commencing May 1, 1995
(4) Commencing July 16, 1997
PROSPECTUS 27
<PAGE>
<TABLE>
<CAPTION>
Number of variable
accumulation units Year Ended December 31,
outstanding at end ----------------------------------------------------------------------------
of period 1999 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
The Guardian Cash Fund 13,934,054 14,263,345 13,909,645 14,702,759 14,168,060 15,006,889
The Guardian Stock Fund 41,964,138 50,156,253 55,579,619 50,275,930 43,472,046 35,419,142
The Guardian Bond Fund 9,203,256 11,326,075 12,034,797 12,663,085 13,111,356 11,671,070
The Guardian Small Cap Stock Fund 3,010,741 3,733,814 3,681,360 N/A N/A N/A
Gabelli Capital Asset Fund 4,615,764 5,301,775 4,972,853 3,748,050 2,148,368 N/A
Baillie Gifford International Fund 11,223,178 13,245,135 14,456,736 15,094,820 13,864,952 15,074,816
Baillie Gifford Emerging Markets Fund 3,055,038 2,924,415 4,422,388 3,371,380 1,440,233 606,438
Value Line Centurion Fund 8,400,109 9,176,838 10,475,161 5,944,240 9,664,499 8,309,405
Value Line Strategic Asset Management Trust 23,900,039 27,209,665 30,381,124 31,212,411 28,610,833 27,391,820
MFS Growth With Income Series 2,473,303 2,439,680 445,841 N/A N/A N/A
<CAPTION>
Number of variable
accumulation units Year Ended December 31,
outstanding at end -----------------------------------
of period 1993 1992 1991
---------- ---------- ----------
<S> <C> <C> <C>
The Guardian Cash Fund 9,999,693 8,494,270 6,714,968
The Guardian Stock Fund 25,090,864 12,672,045 6,587,669
The Guardian Bond Fund 11,792,527 8,432,998 4,211,457
The Guardian Small Cap Stock Fund N/A N/A N/A
Gabelli Capital Asset Fund N/A N/A N/A
Baillie Gifford International Fund 8,565,453 3,070,849 1,314,611
Baillie Gifford Emerging Markets Fund N/A N/A N/A
Value Line Centurion Fund 7,416,828 5,662,551 3,250,662
Value Line Strategic Asset Management Trust 23,033,364 13,179,119 5,217,022
MFS Growth With Income Series N/A N/A N/A
</TABLE>
28 PROSPECTUS
<PAGE>
Contract with 7 year enhanced death benefit(1)
Variable accumulation unit value Year ended December 31,
at beginning of period ($): 1999 1998 1997
- --------------------------------------------------------------------------------
The Guardian Cash Fund 10.411 10.050 $ 10.00
- --------------------------------------------------------------------------------
The Guardian Stock Fund 12.476 10.561 10.00
- --------------------------------------------------------------------------------
The Guardian Bond Fund 10.771 10.110 10.00
- --------------------------------------------------------------------------------
The Guardian Small Cap Stock Fund 9.421 10.143 10.00
- --------------------------------------------------------------------------------
Gabelli Capital Asset Fund 11.712 10.639 10.00
- --------------------------------------------------------------------------------
Baillie Gifford International Fund 12.606 10.556 10.00
- --------------------------------------------------------------------------------
Baillie Gifford Emerging Markets Fund 7.861 10.893 10.00
- --------------------------------------------------------------------------------
Value Line Centurion Fund 12.824 10.208 10.00
- --------------------------------------------------------------------------------
Value Line Strategic Asset Management Trust 12.886 10.259 10.00
- --------------------------------------------------------------------------------
MFS Growth With Income Series 12.845 10.655 10.00
- --------------------------------------------------------------------------------
Variable accumulation unit value Year ended December 31,
at end of period ($): 1999 1998 1997
- --------------------------------------------------------------------------------
The Guardian Cash Fund 10.751 10.411 $ 10.050
- --------------------------------------------------------------------------------
The Guardian Stock Fund 16.128 12.476 10.561
- --------------------------------------------------------------------------------
The Guardian Bond Fund 10.526 10.771 10.110
- --------------------------------------------------------------------------------
The Guardian Small Cap Stock Fund 12.538 9.421 10.143
- --------------------------------------------------------------------------------
Gabelli Capital Asset Fund 13.830 11.712 10.639
- --------------------------------------------------------------------------------
Baillie Gifford International Fund 17.284 12.606 10.556
- --------------------------------------------------------------------------------
Baillie Gifford Emerging Markets Fund 13.347 7.861 10.893
- --------------------------------------------------------------------------------
Value Line Centurion Fund 16.207 12.824 10.208
- --------------------------------------------------------------------------------
Value Line Strategic Asset Management Trust 15.788 12.886 10.259
- --------------------------------------------------------------------------------
MFS Growth With Income Series 13.506 12.845 10.655
- --------------------------------------------------------------------------------
(1) The 7 Year Enhanced Death Benefit Rider became available under this
contract commencing November 12, 1997.
PROSPECTUS 29
<PAGE>
Number of variable accumulation units Year ended December 31,
Outstanding at end of period: 1999 1998 1997
- --------------------------------------------------------------------------------
The Guardian Cash Fund 1,084,454 626,778 259,478
- --------------------------------------------------------------------------------
The Guardian Stock Fund 10,190,342 7,683,674 3,990,332
- --------------------------------------------------------------------------------
The Guardian Bond Fund 1,145,493 915,799 317,240
- --------------------------------------------------------------------------------
The Guardian Small Cap Stock Fund 706,437 820,470 542,814
- --------------------------------------------------------------------------------
Gabelli Capital Asset Fund 1,089,293 974,319 570,583
- --------------------------------------------------------------------------------
Baillie Gifford International Fund 1,457,210 1,040,689 513,510
- --------------------------------------------------------------------------------
Baillie Gifford Emerging Markets Fund 353,384 356,230 327,148
- --------------------------------------------------------------------------------
Value Line Centurion Fund 1,532,459 1,044,912 628,226
- --------------------------------------------------------------------------------
Value Line Strategic Asset Management Trust 4,795,070 3,004,574 1,389,018
- --------------------------------------------------------------------------------
MFS Growth With Income Series 632,195 664,067 41,031
- --------------------------------------------------------------------------------
30 PROSPECTUS
<PAGE>
Contract costs and expenses
The amount of a charge may not strictly correspond to the costs of providing the
services or benefits indicated by the name of the charge or related to a
particular contract. For example, the contingent deferred sales charge may not
fully cover all of the sales and distribution expenses actually incurred by
GIAC, and proceeds from other charges, including the mortality and expense risk
charge, may be used in part to cover these expenses.
No sales charges are deducted from your premium payments when you make them.
However, the following charges do apply:
Expenses of the Funds
The Funds you choose through your variable investment options have their own
management fees and general operating expenses. The deduction of these fees and
expenses is reflected in the per-share value of the Funds. They are fully
described in the Funds' prospectuses.
Mortality and expense risk charge
You will pay a daily charge based on an annual rate of 1.15% of the net assets
of your variable investment options to cover our mortality and expense risks.
(Approximately 0.70% covers mortality risks, while the remaining 0.45% covers
expense risks.) Mortality risks arise from our promise to pay death benefits and
make annuity payments to each annuitant for life. Expense risks arise from the
possibility that the amounts we deduct to cover sales and administrative
expenses may not be sufficient.
Administrative expenses
We deduct a yearly fee of $35 on each anniversary date of your contract during
the accumulation period. To pay this charge, we will cancel the number of
accumulation units that is equal in value to the fee. We cancel accumulation
units in the same proportion as the percentage of the contract's accumulation
value attributable to each variable investment option and the fixed-rate option.
If you surrender your contract before the contract anniversary date, we will
still deduct the contract fee for that year. This charge covers the cost of
administering the contracts, and is not expected to generate a profit.
In addition, the following charges may apply:
Contingent deferred sales charge
If you make a partial withdrawal from your account or surrender your contract,
you will pay a deferred sales charge on any premium payment amount that has been
in your contract for less than eight contract years. This charge compensates us
for expenses related to the sale of contracts. These include commissions to
registered representatives, as well as promotional expenses.
PROSPECTUS 31
<PAGE>
When we calculate the deferred sales charge, all amounts taken out are assumed
to come from the oldest premium. We do this to minimize the amount you owe. The
amount of the charge and the time period used to calculate it depend on the type
of contract you have. The deferred sales charge associated with single premium
payment contracts are listed in the table below.
Contract Deferred
Year Sales Charge
- --------------------------------------------
1 6%
- --------------------------------------------
2 6%
- --------------------------------------------
3 5%
- --------------------------------------------
4 4%
- --------------------------------------------
5 3%
- --------------------------------------------
6 2%
- --------------------------------------------
7 1%
- --------------------------------------------
8+ 0%
- --------------------------------------------
The deferred sales charge associated with flexible premium payment contracts is
calculated as the lesser of:
o 6% of the premium payments you have made within seven contract years (84
months) before the date of your request for the withdrawal or surrender;
or
o 6% of the amount withdrawn or surrendered.
Enhanced death benefit expenses
If you choose one of the enhanced death benefit riders and it is in effect, you
will pay a daily charge based on an annual rate of up to 0.30% of the net assets
of your variable investment options.
Premium taxes
Some states and municipalities may charge premium taxes when premium payments
are made or when you begin to receive annuity payments. These taxes range from
about 0.5% to 3.5% of your premium payments. We may deduct the premium tax
either from your premium payment when made, or from the annuity payments on the
date annuity payments begin, depending on state laws.
In jurisdictions where the premium tax is incurred when a premium payment is
made, we deduct the amount from your premium payment at the time it is made. We
reserve the right to pay the premium tax on your behalf and then deduct the same
amount from the value of your contract when you surrender it, or on your death,
or on the date annuity payments begin, whichever is first. We will do this only
if permitted by applicable law.
32 PROSPECTUS
<PAGE>
Transfer charge
Currently, we do not charge for transfers. However, we reserve the right to
charge up to $25 for each transfer. We will deduct this charge on a proportional
basis from the options from which amounts are transferred.
Federal tax matters
The following summary provides a general description of the Federal income tax
considerations associated with the contracts. It is not intended to be complete
or to cover all tax situations. This summary is not intended as tax advice. You
should consult a tax adviser for more complete information. This summary is
based on our understanding of the present Federal income tax laws. We make no
representation as to the likelihood of continuation of the present Federal
income tax laws or as to how they may be interpreted by the Internal Revenue
Service (IRS).
We believe that our contracts will qualify as annuity contracts for Federal
income tax purposes, and the following summary assumes so. Further details are
available in the Statement of Additional Information, under the heading Tax
Status of the Contracts.
When you invest in an annuity contract, you usually don't pay taxes on your
investment gains until you withdraw the money -- generally for retirement
purposes. In this way, annuity contracts have been recognized by the tax
authorities as a legitimate means of deferring tax on investment income.
We believe that if you are a natural person you won't be taxed on increases in
the accumulation value of a contract until a distribution occurs or until
annuity payments begin. For these purposes, the agreement to assign or pledge
any portion of a contact's accumulation value and, in the case of a qualified
contract (described below) any portion of an interest in the qualified plan
generally will be treated as a distribution.
When annuity payments begin, you will be taxed only on the investment gains you
have earned and not on the payments you made to purchase the contract.
Generally, withdrawals from your annuity should only be made once you reach age
59 1/2, die or are disabled; otherwise a 10% tax penalty may be applied against
any amounts included in income. Additional exceptions may apply to distributions
from a qualified contract. You should consult a tax adviser with regard to
exceptions from the penalty tax.
If you invest in a variable annuity as part of a pension plan or
employer-sponsored retirement program, your contract is called a qualified
contract. If your annuity is independent of any formal retirement or pension
plan, it is termed a non-qualified contract.
PROSPECTUS 33
<PAGE>
Taxation of non-qualified contracts
Non-natural person
If a non-natural person owns a non-qualified annuity contract, the owner
generally must include in income any increase in the excess of the accumulation
value over the investment in the contract (generally, the premiums or other
consideration paid for the contract) during the taxable year. There are some
exceptions to this rule, and a prospective owner that is not a natural person
should discuss these with a tax adviser.
This following summary generally applies to contracts owned by natural persons.
Withdrawals
When a withdrawal from a non-qualified contract occurs, the amount received will
be treated as ordinary income subject to tax up to an amount equal to any excess
of the accumulation value immediately before the distribution that exceeds the
owner's investment in the contract. Generally, the owner's investment in the
contract is the amount equal to the premiums or other consideration paid for the
contract, reduced by any amounts previously distributed from the contract that
were not subject to tax at that time. In the case of a surrender under a
non-qualified contract, the amount received generally will be taxable only to
the extent it exceeds the owner's investment in the contract.
Penalty tax on certain withdrawals
In the case of a distribution from a non-qualified contract, a federal tax
penalty may be imposed equal to 10% of the amount treated as income. However,
there is generally no penalty on distributions that are:
o made on or after the taxpayer reaches age 59 1/2
o made on or after the death of an owner
o attributable to the taxpayer's becoming disabled, or
o made as part of a series of substantially equal periodic payments for the
life -- or life expectancy -- of the taxpayer.
Other exceptions may apply under certain circumstances. Special rules may also
apply to the exceptions noted above. You should consult a tax adviser with
regard to exceptions from the penalty tax.
Annuity payments
Although tax consequences may vary depending on the payout option elected under
an annuity contract, a portion of each annuity payment is generally not taxed
and the remainder is taxed as ordinary income. The non-taxable portion of an
annuity payment is generally determined so that you recover your investment in
the contract ratably on a tax-free basis over the expected stream of annuity
payments, as determined when annuity payments begin. However, once your
investment in the contract has been fully recovered, the full amount of each
annuity payment is subject to tax as ordinary income.
34 PROSPECTUS
<PAGE>
Taxation of death benefits
Amounts may be distributed from a contract because of your death or the death of
the annuitant. Generally, such amounts are included in the income of the
recipient as follows:
o if distributed in a lump sum, they are taxed in the same manner as a
surrender of the contract
o if distributed under a payout option, they are taxed in the same way as
annuity payments.
Transfers, assignments and contract exchanges
Transferring or assigning ownership of a contract, designating an annuitant,
selecting certain maturity dates or exchanging a contract may result in certain
tax consequences to you that are not outlined here. If you are considering any
such transaction, you should consult a professional tax adviser.
Withholding tax
Annuity distributions are generally subject to withholding for the recipient's
federal income tax liability. However, recipients can generally choose not to
have tax withheld from distributions.
Multiple contracts
All annuity contracts issued by GIAC or its affiliates to the same owner during
any calendar year are treated as one annuity contract for purposes of
determining the amount included in the contract owner's income when a taxable
distribution occurs.
Taxation of qualified contracts
Your rights under a qualified contract may be subject to the terms of the
retirement plan itself, regardless of the terms of the qualified contract.
Adverse tax consequences may result if you do not ensure that contributions,
distributions and other transactions with respect to the contract comply with
the law.
Individual Retirement Accounts (IRAs)
As defined in Sections 219 and 408 of the Internal Revenue Code, individuals are
allowed to make annual contributions to an IRA of up to the lesser of $2,000 or
100% of their adjusted gross income. All or a portion of these contributions may
be deductible, depending on the person's income.
Distributions from certain pension plans may be rolled over into an IRA on a
tax-deferred basis without regard to these limits. So-called SIMPLE IRAs under
Section 408 (p) of the Internal Revenue Code and Roth IRAs under Section 408A,
may also be used in connection with variable annuity contracts.
SIMPLE IRAs allow employees to defer a percentage of annual compensation up to
$6,000 to a retirement plan, if the sponsoring employer makes matching or
non-elective contributions that meet the
PROSPECTUS 35
<PAGE>
requirements of the Internal Revenue Code. The penalty for a distribution from a
SIMPLE IRA that occurs within the firsttwo years after the employee begins to
participate in the plan is 25%, instead of the usual 10%.
Contributions to Roth IRAs are not tax-deductible, and contributions must be
made in cash or as a rollover or transfer from another Roth IRA or IRA. You may
wish to consult a tax adviser before combining any converted amounts with any
other Roth IRA contributions, including any other conversion amounts from other
tax years. A rollover or conversion of an IRA to a Roth IRA may be subject to
tax.
Distributions from Roth IRAs are generally not taxed. In addition to the 10%
penalty which generally applies to distributions made before age 59 1/2, a 10%
penalty will be imposed for any distribution made from a Roth IRA during the
five taxable years starting after you (or your spouse) first contribute to any
Roth IRA. A 10% penalty tax may apply to amounts attributable to a conversion
from an IRA if they are distributed during the five taxable years beginning with
the year in which the conversion was made.
Corporate pension and profit-sharing plans
Under Section 401(a) of the Internal Revenue Code, corporate employers are
allowed to establish various types of retirement plans for employees, and
self-employed individuals are allowed to establish qualified plans for
themselves and their employees.
Adverse tax consequences to the retirement plan, the participant or both may
result if the contract is transferred to any individual as a means of providing
benefit payments, unless the plan complies with all applicable requirements
before transferring the contract.
Tax-sheltered annuities
Under Section 403(b) of the Internal Revenue Code, public schools and other
eligible employers are allowed to purchase annuity contracts and mutual fund
shares through custodial accounts on behalf of employees. Generally, these
purchase payments are excluded for tax purposes from employee gross incomes.
However, these payments may be subject to FICA (Social Security) taxes.
Distributions of salary reduction contributions and earnings (other than your
salary reduction accumulation as of December 31, 1988) are not allowed before
age 59 1/2, separation from service, death or disability. Salary reduction
contributions may also be distributed upon hardship, but would generally be
subject to penalties.
Other tax issues
You should note that the annuity contract includes a death benefit that in some
cases may exceed the greater of the purchase payments or the contract value. The
death benefit could be viewed as an incidental benefit, the amount of which is
limited in any 401(a) or 403(b) plan. Because the death benefit may exceed this
limitation, employers using
36 PROSPECTUS
<PAGE>
the contract in connection with corporate pension and profit-sharing plans, or
tax-sheltered annuities, should consult their tax adviser.
Qualified contracts other than Roth IRAs have minimum distribution rules that
govern the timing and amount of distributions. You should refer to your
retirement plan, adoption agreement or consult a tax adviser for more
information about these distribution rules. Pension and annuity distributions
generally are subject to withholding for the recipient's federal income tax
liability at rates that vary according to the type of distribution and the
recipient's tax status. Recipients generally are provided the opportunity to
elect not to have tax withheld from distributions. "Eligible rollover
distributions" from section 401(a), 403(a) and 403(b) plans are subject to a
mandatory federal income tax withholding of 20%. An eligible rollover
distribution is the taxable portion of any distribution to an employee from such
a plan, except certain distributions such as distributions required by the
Internal Revenue Code or distributions in a specified annuity form. The 20%
withholding does not apply, however, if the employee chooses a direct rollover
from the plan to another tax-qualified plan or IRA.
Our income taxes
At the present time, we make no charge for any Federal, state or local taxes --
other than the charge for state and local premium taxes that we incur -- that
may be attributable to the investment divisions of the Separate Account or to
the contracts. We do have the right in the future to make additional charges for
any such tax or other economic burden resulting from the application of the tax
laws that we determine is attributable to the investment divisions of the
Separate Account or the contracts.
Under current laws in several states, we may incur state and local taxes in
addition to premium taxes. These taxes are not now significant and we are not
currently charging for them. If they increase, we may deduct charges for such
taxes.
- --------------------------------------------------------------------------------
As a result of a 1983 U.S. Supreme Court ruling, employer-related plans
must use rate tables that are gender-neutral to calculate annuity purchase
rates. We have revised our tables for employer-related plans and filed
them in the states where we do business. We will continue to use our
gender-distinct tables in all other contracts, unless it is prohibited by
state law. In those cases our gender-neutral tables will be used.
Possible tax law changes
Although the likelihood of legislative change is uncertain, there is always the
possibility that the tax treatment of the contracts could change by legislation
or otherwise. You should consult a tax adviser with respect to legislative
developments and their effect on the contracts.
We have the right to modify the contracts in response to legislative changes
that could otherwise diminish the favorable tax treatment annuity contract
owners currently receive. We make no guarantee regarding the tax status of any
contract and do not intend this summary as tax advice.
PROSPECTUS 37
<PAGE>
Performance results
From time to time, we may show performance information for the Separate
Account's investment divisions in advertisements, sales literature or other
materials provided to existing or prospective contract owners. These materials
are based upon historical information and are not necessarily representative of
future performance. More detail about historical performance appears in the
Statement of Additional Information. When we show performance, we'll always
include SEC standard performance, which reflects all fees and charges for
specified periods. We may also show non-standard performance, for example,
without showing the effect of certain charges such as deferred sales charges.
Among the key performance measures we use are total returns and yields.
Total returns include: average annual total return, total return, and change in
accumulation unit value -- all of which reflect the change in the value of an
investment in an investment division of the Separate Account over a specified
period, assuming the reinvestment of all income dividends and capital gains
distributions.
Yield figures may be quoted for investments in shares of the Cash Fund and the
Bond Fund. Current yield is a measure of the income earned on a hypothetical
investment over a specified base period of seven days for the Cash Fund
investment division, and 30 days (or one month) for the Bond Fund investment
division. Effective yield is another measure which may be quoted by the Cash
Fund investment division, which assumes that the net investment income earned
during a base period will be earned and reinvested for a year. Yields are
expressed as a percentage of the value of an accumulation unit at the beginning
of the base period. Yields are annualized, which assumes that an investment
division will generate the same level of net investment income over a one-year
period. However, yields fluctuate daily.
Advertisements and sales literature for the Separate Account's investment
divisions may compare a Fund's performance to that of investments offered
through the separate accounts of other insurance companies that have similar
investment objectives or programs. Promotional material may also compare a
Fund's performance to one or more indices of the types of securities which the
Fund buys and sells for its portfolio. Performance comparisons may be
illustrated by tables, graphs or charts. Additionally, promotional material may
refer to:
o the types and characteristics of certain securities
o features of a Fund's portfolio
o financial markets
o historical, current or perceived economic trends, and
o topics of general investor interest, such as personal financial planning.
In addition, advertisements and sales literature may refer to or reprint all or
portions of articles, reports or independent rankings or ratings which
38 PROSPECTUS
<PAGE>
relate specifically to the investment divisions or to other comparable
investments. However, such material will not be used to indicate future
performance.
Advertisements and sales literature about the variable annuity contracts and the
Separate Account may also refer to ratings given to GIAC by insurance company
rating organizations such as:
o Moody's Investors Service, Inc.
o Standard & Poor's Ratings Group
o A.M. Best & Co.
o Duff & Phelps.
These ratings relate only to GIAC's ability to meet its obligations under the
contracts' fixed-rate option and to pay death benefits provided under the
contracts, not to the performance of the variable investment options.
We are a member of the Insurance Marketplace Standards Association (IMSA), and
may include the IMSA logo and information about IMSA membership in our
advertisements. Companies that belong to IMSA subscribe to a set of ethical
standards for sales and service of individually owned life insurance and
annuities.
Further information about the performance of each investment division is
contained in their respective annual reports, which may be obtained from GISC
free of charge.
YOUR RIGHTS AND RESPONSIBILITIES
Voting rights
We own the Fund's shares, but you may have voting rights in the various Funds.
To the extent that we are required by law, we will cast our votes according to
the instructions of those contract owners who have an interest in variable
investment options investing in Funds holding a shareholder vote, as of the
shareholder meeting record date. Those votes for which we receive no
instructions will be voted in the same proportion as those we have received
instructions for. We'll solicit instructions when the Funds hold shareholder
votes. We have the right to restrict contract owner voting instructions if the
laws change to allow us to do so.
The owner of the contract has voting rights until the date annuity payments
begin. After that date, rights switch to the annuitant. Voting rights diminish
with the reduction of your contract value. The fixed-rate option has no voting
rights.
Your right to cancel the contract
During the 10-day period after receiving your contract, the free look period,
you have the right to examine your contract and return it for cancellation if
you change your mind about buying it. Longer periods may apply in some states.
PROSPECTUS 39
<PAGE>
Upon cancellation and as required by state law or regulation, we'll refund to
you either:
o the total amount you paid for the contract; or
o the sum of the surrender value of the contract, plus the difference
between the premiums you paid (including any contract fees or other
charges) and the amounts allocated to the variable and fixed-rate
investment options under the contract.
Distribution of the contracts
The variable annuity contracts are sold by insurance agents who are licensed by
GIAC and who are either registered representatives of GISC or of broker-dealer
firms which have entered into sales agreements with GISC and GIAC. GISC and such
other broker-dealers are members of the National Association of Securities
Dealers, Inc. GIAC will generally pay commissions to these individuals or
entities for the sale of contracts. These commissions may vary, but in total are
not expected to exceed 5.25% of each contract premium payment. We also reserve
the right to pay additional annual sales compensation of up to .45% of the value
of contracts, based on the value of the contracts and any riders that are in
force. Where permitted by state law, we reserve the right to pay additional
sales or service compensation while a contract is in force, based on the value
of a contract. Additional amounts may also be paid in connection with special
promotional incentives. The principal underwriter of the contracts is GISC,
located at 7 Hanover Square, New York, New York 10004.
40 PROSPECTUS
<PAGE>
SPECIAL TERMS USED IN THIS PROSPECTUS
Accumulation Period: The period between the issue date of the contract and the
retirement date.
Accumulation Unit: A measure used to determine the value of a contract owner's
interest under the contract before annuity payments begin. The contract has
variable accumulation units and fixed accumulation units.
Accumulation Value: The value of all the accumulation units in the variable
investment options and/or the fixed-rate option credited to a contract.
Annuitant: The person on whose life the annuity payments are based and on whose
death, prior to the retirement date, benefits under the contract are paid.
Retirement Date: The date on which annuity payments under the contact begin.
Annuity Payments: Periodic payments, either variable or fixed in nature, made by
GIAC to the contract owner at monthly intervals after the retirement date.
Annuity Unit: A measure used to determine the amount of any variable annuity
payment.
Business day: Each day the New York Stock Exchange is open for trading and GIAC
is open for business.
Contract Anniversary Date: The annual anniversary measured from the issue date
of the contract.
Contract owner: You (or your); the person(s) or entity designated as the owner
in the contract.
Funds: The diversified open-end management investment companies, each
corresponding to a variable investment option. The Funds are listed on the front
cover of this prospectus.
Good Order: Notice from any party authorized to initiate a transaction under
this contract, received in a format satisfactory to GIAC at its customer service
office, that contains all information required by GIAC to process that
transaction.
Valuation Period: The time period from the determination of one accumulation
unit and annuity unit value to the next.
Variable Investment Options: The Funds underlying the contract are the variable
investment options -- as distinguished from the fixed-rate option -- available
for allocations of net premium payments and accumulation values.
PROSPECTUS 41
<PAGE>
OTHER INFORMATION
Legal Proceedings
Neither the Separate Account nor GIAC is a party to any pending material legal
proceeding.
Where to get more information
Our Statement of Additional Information (SAI) has more details about the
contracts described in this prospectus. If you would like a free copy, please
call us toll-free at 1-800-221-3253, or write to us at the following address:
Guardian Insurance & Annuity Corporation
Customer Service Office
Box 26210
Lehigh Valley, Pennsylvania 18002
The SAI contains the following information:
o Services to the Separate Account
o Annuity payments
o Tax status of the contracts
o Performance data
o Valuation of assets of the Separate Account
o Transferability restrictions
o Experts
o Financial statements
42 PROSPECTUS
<PAGE>
THE GUARDIAN INVESTOR(R)
INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACTS
Issued Through
THE GUARDIAN SEPARATE ACCOUNT D
OF
THE GUARDIAN INSURANCE & ANNUITY COMPANY, INC.
--------------
Statement of Additional Information dated May 1, 2000
--------------
This Statement of Additional Information is not a prospectus but should be
read in conjunction with the current Prospectus for The Guardian Separate
Account D (marketed under the name "The Guardian Investor") dated May 1, 2000.
A free Prospectus is available upon request by writing or calling:
The Guardian Insurance & Annuity Company, Inc.
Customer Service Office
P.O. Box 26210 Lehigh Valley, Pennsylvania 18002
1-800-221-3253
Read the prospectus before you invest. Terms used in this Statement of
Additional Information shall have the same meaning as in the Prospectus.
TABLE OF CONTENTS
Page
----
Services to the Separate Account.................................... B-2
Annuity Payments.................................................... B-2
Tax Status of the Contracts ........................................ B-3
Performance Data.................................................... B-3
Valuation of Assets of the Separate Account......................... B-8
Transferability Restrictions........................................ B-9
Experts............................................................. B-9
Financial Statements................................................ B-9
B-1
<PAGE>
SERVICES TO THE SEPARATE ACCOUNT
The Guardian Insurance & Annuity Company, Inc. ("GIAC") maintains the books
and records of The Guardian Separate Account D (the "Separate Account"). GIAC, a
wholly owned subsidiary of The Guardian Life Insurance Company of America, acts
as custodian of the assets of the Separate Account. GIAC bears all expenses
incurred in the operations of the Separate Account, except the mortality and
expense risk charge and the administrative charge (as described in the
Prospectus), which are borne by the Contract owner.
Guardian Investor Services Corporation ("GISC"), a wholly owned subsidiary
of GIAC, serves as principal underwriter for the Separate Account pursuant to a
distribution and service agreement between GIAC and GISC. The Contracts are
offered continuously and are sold by GIAC insurance agents who are registered
representatives of either Park Avenue Securities LLC or of other broker-dealers
which have selling agreements with GISC and GIAC. In the years 1999, 1998 and
1997, GIAC paid commissions through GISC with respect to the sales of variable
annuity contracts in the amount of $32,178,498, $34,195,299 and $33,206,571,
respectively.
ANNUITY PAYMENTS
The objective of the Contracts is to provide benefit payments which will
increase at a rate sufficient to maintain purchasing power at a constant level.
For this to occur, the actual net investment rate must exceed the assumed
investment rate of 4% by an amount equal to the rate of inflation. Of course, no
assurance can be made that this objective will be met. If the assumed interest
rate were to be increased, benefit payments would start at a higher level but
would increase more slowly or decrease more rapidly. Likewise, a lower assumed
interest rate would provide a lower initial payment with greater increases or
lesser decreases in subsequent Annuity Payments.
Value of an Annuity Unit: The value of an Annuity Unit is determined
independently for each of the Variable Investment Options. For any Valuation
Period, the value of an Annuity Unit is equal to the value for the immediately
preceding Valuation Period multiplied by the annuity change factor for the
current Valuation Period. The Annuity Unit value for a Valuation Period is the
value determined as of the end of such period. The annuity change factor is
equal to the net investment factor for the same Valuation Period adjusted to
neutralize the assumed investment return used in determining the Annuity
Payments. The net investment factor is reduced by the amount of the mortality
and expense risk charge on an annual basis during the life of the Contract. The
dollar amount of any monthly payment due after the first monthly payment under a
Variable Investment Option will be determined by multiplying the number of
Annuity Units by the value of an Annuity Unit for the Valuation Period ending
ten (10) days prior to the Valuation Period in which the monthly payment is due.
Determination of the First Monthly Annuity Payment: At the time Annuity
Payments begin, the value of the Contract owner's account is determined by
multiplying the appropriate Variable or Fixed Accumulation Unit Value on the
Valuation Period ten (10) days before the date the first variable or fixed
Annuity Payment is due by the corresponding number of Variable or Fixed
Accumulation Units credited to the Contract owner's account as of the date the
first Annuity Payment is due, less any applicable premium taxes not previously
deducted.
The Contracts contain tables reflecting the dollar amount of the first
monthly payment which can be purchased with each $1,000 of value accumulated
under the Contract. The amounts depend on the variable or fixed Annuity Payout
Option selected, the mortality table used under the Contract (the 1983
Individual Mortality Table a projected using Scale G) and the nearest age of the
Annuitant. The first Annuity Payment is determined by multiplying the benefit
per $1,000 of value shown in the Contract tables by the number of thousands of
dollars of value accumulated under the Contract.
B-2
<PAGE>
Determination of the Second and Subsequent Monthly Variable Annuity
Payments: The amount of the second and subsequent variable Annuity Payments is
determined by multiplying the number of Annuity Units by the appropriate Annuity
Unit Value as of the valuation period ten (10) days prior to the day such
payment is due. The number of Annuity Units under a Contract is determined by
dividing the first monthly variable Annuity Payment by the value of the
appropriate Annuity Unit on the date of such payment. This number of Annuity
Units remains fixed during the variable Annuity Payment period, provided no
transfers among the Variable Investment Options are made. If a transfer among
the Variable Investment Options is made, the number of Annuity Units will be
adjusted accordingly.
The assumed investment return of 4% under the Contract is the measuring
point for subsequent variable Annuity Payments. If the actual net investment
rate (on an annual basis) remains constant at 4%, the variable Annuity Payments
will remain constant. If the actual net investment rate exceeds 4%, the variable
Annuity Payment will increase at a rate equal to the amount of such excess.
Conversely, if the actual rate is less than 4%, variable Annuity Payments will
decrease.
The second and subsequent monthly payments made under a Fixed Annuity
Payout Option will be equal to the amount of the first monthly fixed Annuity
Payment (described above).
TAX STATUS OF THE CONTRACTS
Tax law imposes several requirements that variable annuities must satisfy
in order to receive the tax treatment normally accorded to annuity contracts.
Diversification Requirements. The Code requires that the investments of
each investment division of the separate account underlying the contracts be
"adequately diversified" in order for the contracts to be treated as annuity
contracts for Federal income tax purposes. It is intended that each investment
division, through the fund in which it invests, will satisfy these
diversification requirements.
Owner Control. In certain circumstances, owners of variable annuity
contracts have been considered for Federal income tax purposes to be the owners
of the assets of the separate account supporting their contracts due to their
ability to exercise investment control over those assets. When this is the case,
the contract owners have been currently taxed on income and gains attributable
to the variable account assets. There is little guidance in this area, and some
features of our contracts, such as the flexibility of an owner to allocate
premium payments and transfer amounts among the investment divisions of the
separate account, have not been explicitly addressed in published rulings. While
we believe that the contracts do not give owners investment control over
separate account assets, we reserve the right to modify the contracts as
necessary to prevent an owner from being treated as the owner of the separate
account assets supporting the contract.
Required Distributions. In order to be treated as annuity contract for
Federal income tax purposes, section 72(s) of the Internal Revenue Code requires
any non-qualified contract to contain certain provisions specifying how your
interest in the contract will be distributed in the event of the death of a
holder of the contract. Specifically, section 72(s) requires that (a) if any
holder dies on or after the annuity starting date, but prior to the time the
entire interest in the contract has been distributed, the entire interest in the
contract will be distributed at least as rapidly as under the method of
distribution being used as of the date of such holder's death; and (b) if any
holder dies prior to the annuity starting date, the entire interest in the
contract will be distributed within five years after the date of such holder's
death. These requirements will be considered satisfied as to any portion of a
holder's interest which is payable to or for the benefit of a designated
beneficiary and which is distributed over the life of such designated
beneficiary or over a period not extending beyond the life expectancy of that
beneficiary, provided that such distributions begin within one year of the
holder's death. The designated beneficiary refers to a natural person designated
by the holder as a beneficiary and to whom ownership of the contract passes by
reason of death. However, if the designated beneficiary is the surviving spouse
of the deceased holder, the contract may be continued with the surviving spouse
as the new holder.
The non-qualified contracts contain provisions that are intended to comply
with these Code requirements, although no regulations interpreting these
requirements have yet been issued. We intend to review such provisions and
modify them if necessary to assure that they comply with the applicable
requirements when such requirements are clarified by regulation or otherwise.
Other rules may apply to qualified contracts.
PERFORMANCE DATA
The tables below provide performance results for each of the Separate
Account's Investment Divisions through December 31, 1999. The results shown in
this section are not an estimate or guarantee of future investment performance,
and do not represent the actual experience of amounts invested by a particular
Contract owner. Moreover, the performance information for each Investment
Division reflects the investment experience of its underlying Funds for periods
prior to the commencement of operations of the Separate Account (January 16,
1990) if the Funds existed prior to such date. Such results were calculated by
applying all Contract and Separate Account level charges to the historical Fund
performance results for such prior periods. During such prior periods, the Funds
were utilized as the underlying Funds for other separate accounts of GIAC which
were established in connection with the issuance of other variable contracts.
Several new Investment Divisions were added to the Separate Account as of
May 1, 2000. For performance information about those Investment Divisions, you
should refer to the prospectuses describing each one. The prospectuses were
provided with the prospectus for the Contract.
Average Annual Total Return Calculations
The first section of the following table was calculated using the
standardized method prescribed by the Securities and Exchange Commission. It
illustrates each Investment Division's average annual total return over the
periods shown. The average annual total return for an Investment Division for a
specified period is determined by reference to a hypothetical $1,000 investment
that includes capital appreciation and depreciation for the stated period,
according to the following formula:
P(1 + T)^n = ERV
Where: P = A hypothetical purchase of $1,000 from which no sales load is
deducted.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of the hypothetical $1,000 purchase
at the end of the period.
Each calculation assumes that all dividends and distributions are
reinvested at net asset value on the reinvestment dates during the period, that
no transfers or additional purchase payments were made and the surrender of the
Contract at the end of each period. The Investment Division's average annual
total return is the annual rate that would be necessary to achieve the ending
value of an investment kept in the Investment Division for the period specified.
The rate of return reflects all charges assessed against a
B-3
<PAGE>
Contract and at the Separate Account level except for any premium taxes that may
be payable. The charges reflected include any applicable contingent deferred
sales charge; the mortality and expense risk charge; and a pro-rated portion of
the contract administration fee. See the Prospectus for a detailed description
of such charges.
The second section of the table was calculated in the same manner as the
first except that no contingent deferred sales charge was deducted since it is
assumed that the Contract continues through the end of each period.
BASIC CONTRACT
<TABLE>
<CAPTION>
Average Annual Total Return for a
Contract Surrendered on 12/31/99
(FP = Flexible Premium Payment Contract; Average Annual Total Return on 12/31/99
SP = Single Premium Payment Contract) Assuming Contract Continues
---------------------------------------- ---------------------------------------
Length of Investment Period Length of Investment Period
---------------------------------------- ---------------------------------------
Ten Years (or Ten Years (or
Since Fund Since Fund
Investment Division Date of Fund Inception, Inception,
Corresponding To Inception One Year Five Years If Less) One Year Five Years If Less)
- ---------------------- ------------ -------- ---------- ------------- -------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
The Guardian Cash -2.51%FP 2.76%FP 3.58%FP
Fund................ 1/7/82 -2.51%SP 3.30%SP 3.58%SP 3.49% 3.82% 3.58%
The Guardian Bond -7.94%FP 4.87%FP 5.95%FP
Fund................ 5/1/83 -7.94%SP 5.37%SP 5.95%SP -2.06% 5.84% 5.95%
The Guardian Stock 23.55%FP 27.45%FP 18.56%FP
Fund................ 4/13/83 23.55%SP 27.68%SP 18.56%SP 29.55% 27.91% 18.56%
The Guardian Small 27.38%FP N/A 12.80%FP 33.38% N/A 14.83%
Cap Stock Fund...... 5/1/97 27.38%SP N/A 13.14%SP
Gabelli Capital 12.33%FP N/A 17.32%FP
Asset Fund.......... 5/1/95 12.33%SP N/A 17.68%SP 18.33% N/A 18.03%
Baillie Gifford 31.40%FP 17.26%FP 12.71%FP
International Fund.. 2/8/91 31.40%SP 17.57%SP 12.71%SP 37.40% 17.88% 12.71%
Baillie Gifford
Emerging Markets 64.14%SP 7.52%FP 4.46%FP
Fund................ 10/17/94 64.14%SP 7.97%SP 5.09%SP 70.14% 8.40% 5.40%
Value Line Centurion 20.65%FP 24.61%FP 18.00%FP
Fund ("VLCF")....... 11/15/83 20.65%SP 24.86%SP 18.00%SP 26.65% 25.11% 18.00%
Value Line Strategic
Asset Management 16.79%FP 20.16%FP 15.50%FP
Trust ("VLSAM")..... 10/1/87 16.79%SP 20.45%SP 15.50%SP 22.79% 20.73% 15.50%
MFS Growth With -0.62%FP N/A 18.83%FP
Income Series ...... 10/9/95 -0.62%SP N/A 19.24%SP 5.38% N/A 19.64%
</TABLE>
B-4
<PAGE>
CONTRACT WITH 7 YEAR ENHANCED DEATH BENEFIT
<TABLE>
<CAPTION>
Average Annual Total Return for a
Contract Surrendered on 12/31/99
(FP = Flexible Premium Payment Contract; Average Annual Total Return on 12/31/99
SP = Single Premium Payment Contract) Assuming Contract Continues
---------------------------------------- ---------------------------------------
Length of Investment Period Length of Investment Period
---------------------------------------- ---------------------------------------
Ten Years (or Ten Years (or
Since Fund Since Fund
Investment Division Date of Fund Inception, Inception,
Corresponding To Inception One Year Five Years If Less) One Year Five Years If Less)
- ---------------------- ------------ -------- ---------- ------------- -------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
The Guardian Cash -2.83%FP 2.44%FP 3.27%FP
Fund................ 1/7/82 -2.83%SP 2.98%SP 3.27%SP 3.17% 3.50% 3.27%
The Guardian Bond -8.22%FP 4.54%FP 5.63%FP
Fund................ 5/1/83 -8.22%SP 5.03%SP 5.63%SP -2.36% 5.52% 5.63%
The Guardian Stock 23.16%FP 27.06%FP 18.21%FP
Fund................ 4/13/83 23.16%SP 27.29%SP 18.21%SP 29.16% 27.52% 18.21%
The Guardian Small 26.98%FP N/A 8.48%FP
Cap Stock Fund...... 5/1/97 26.98%SP N/A 9.48%SP 32.98% N/A 14.48%
Gabelli Capital 11.98%FP N/A 16.96%FP
Asset Fund.......... 5/1/95 11.98%SP N/A 17.32%SP 17.98% N/A 17.67%
Baillie Gifford 30.99%FP 16.89%FP 12.37%FP
International Fund.. 2/8/91 30.99%SP 17.21%SP 12.37%SP 36.99% 17.53% 12.37%
Baillie Gifford
Emerging Markets 63.63%SP 7.18%FP 4.13%FP
Fund................ 10/17/94 63.63%SP 7.64%SP 4.77%SP 69.63% 8.08% 5.08%
Value Line Centurion 20.27%FP 24.23%FP 17.65%FP
Fund ("VLCF")....... 11/15/83 20.27%SP 24.48%SP 17.65%SP 26.27% 24.73% 17.65%
Value Line Strategic
Asset Management 16.42%FP 19.79%FP 15.15%FP
Trust ("VLSAM")..... 10/1/87 16.42%SP 20.08%SP 15.15%SP 22.42% 20.37% 15.15%
MFS Growth With -0.94%FP N/A 18.47%FP
Income Series ...... 10/9/95 -0.94%FP N/A 18.88%SP 5.06% N/A 19.28%
</TABLE>
Change in Accumulation Unit Value
The following performance information illustrates the cumulative change and
the actual annual change in Accumulation Unit values for the periods specified
for each Investment Division and is computed differently than the standardized
average annual total return information. No information is provided for
Investment Divisions that were added after December 31, 1999.
An Investment Division's cumulative change in Accumulation Unit values is
the rate at which the value of an Accumulation Unit changed over the time period
illustrated. The actual annual change in Accumulation Unit values is the rate at
which the value of an Accumulation Unit changed over each 12-month period
illustrated. The rates of change in Accumulation Unit values quoted in the
tables reflect a deduction for the mortality and expense risk charge and when
applicable, the Enhanced Death Benefit charge. They do not reflect deductions
for any contingent deferred sales charge, contract administration fee or premium
taxes. The rates of change would be lower if these charges were included.
B-5
<PAGE>
BASIC CONTRACT
<TABLE>
<CAPTION>
Cumulative Change in Accumulation Unit Value
for Period Ended December 31, 1999
--------------------------------------------------------------
Ten Years (or
Since Fund
Investment Division Inception, Date of Fund
Corresponding To One Year Five Years If Less) Inception
- ---------------------------------------- -------- ---------- ------------- ------------
<S> <C> <C> <C> <C>
The Guardian Cash Fund.................. 3.57% 21.10% 43.36% 1/7/82
The Guardian Bond Fund.................. -1.98% 33.37% 79.68% 5/1/83
The Guardian Stock Fund................. 29.66% 243.76% 453.37% 4/13/83
The Guardian Small Cap Stock Fund....... 33.49% N/A 40.71% 5/1/97
Gabelli Capital Asset Fund.............. 18.43% N/A 117.49% 5/1/95
Baillie Gifford International Fund...... 37.51% 128.59% 192.09% 2/8/91
Baillie Gifford Emerging Markets Fund... 70.28% 50.33% 32.03% 10/17/94
Value Line Centurion Fund............... 26.75% 207.77% 427.78% 11/15/83
Value Line Strategic Asset Management
Trust................................. 22.89% 157.58% 325.87% 10/1/87
MFS Growth With Income Series........... 5.47% N/A 114.06% 10/9/95
</TABLE>
CONTRACT WITH 7 YEAR ENHANCED DEATH BENEFIT
<TABLE>
<CAPTION>
Cumulative Change in Accumulation Unit Value
for Period Ended December 31, 1999
--------------------------------------------------------------
Ten Years (or
Since Fund
Investment Division Inception, Date of Fund
Corresponding To One Year Five Years If Less) Inception
- ---------------------------------------- -------- ---------- ------------- ------------
<S> <C> <C> <C> <C>
The Guardian Cash Fund.................. 3.26% 19.29% 39.12% 1/7/82
The Guardian Bond Fund.................. -2.77% 31.38% 74.36% 5/1/83
The Guardian Stock Fund................. 29.27% 238.62% 437.00% 4/13/83
The Guardian Small Cap Stock Fund....... 33.09% N/A 39.67% 5/1/97
Gabelli Capital Asset Fund.............. 18.08% N/A 114.45% 5/1/95
Baillie Gifford International Fund...... 37.10% 125.17% 184.36% 2/8/91
Baillie Gifford Emerging Markets Fund... 69.77% 48.08% 29.97% 10/17/94
Value Line Centurion Fund............... 26.37% 203.16% 412.16% 11/15/83
Value Line Strategic Asset Management
Trust................................. 22.52% 153.73% 313.27% 10/1/87
MFS Growth With Income Series........... 5.15% N/A 111.37% 10/9/95
</TABLE>
B-6
<PAGE>
BASIC CONTRACT
<TABLE>
<CAPTION>
Change in Accumulation Unit Value for 12-Month Period ended December 31,
------------------------------------------------------------------------------------
Investment Division
Corresponding To 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
- ---------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
The Guardian Cash Fund ...... 6.75% 4.38% 2.03% 1.46% 2.63% 4.32% 3.78% 3.94% 3.91 3.57
The Guardian Bond Fund ...... 6.31% 14.86% 6.46% 8.59% -4.56% 16.24% 1.68% 7.74% 6.85 -1.98
The Guardian Stock Fund ..... -12.80% 34.40% 18.69% 18.58% -2.41% 33.11% 25.43% 34.02% 18.49 29.66
The Guardian Small Cap Stock
Fund ........................ 13.14%* -6.84 33.49
Gabelli Capital Asset Fund .. 7.53%* 9.73% 40.95% 10.42 18.43
Baillie Gifford
International Fund .......... 7.40%* -9.95% 32.50% -0.28% 9.95% 14.08% 10.65% 19.78 37.51
Baillie Gifford Emerging
Markets Fund ................ -12.17%* -1.74% 23.14% 0.80% -27.61 70.28
Value Line Centurion Fund
("VLCF") .................... 4.33% 50.44% 4.71% 7.95% -3.34% 38.47% 15.98% 19.99% 26.00 26.75
Value Line Strategic Asset
Management Trust
("VLSAM") ................... -1.32% 41.69% 13.73% 10.57% -5.97% 27.06% 14.53% 14.33% 25.99 22.89
MFS Growth With Income
Series ...................... 23.01%* 28.29% 20.92 5.47
</TABLE>
* From date of commencement of public offering of Fund's shares through
December 31.
<TABLE>
<CAPTION>
CONTRACT WITH 7 YEAR ENHANCED DEATH BENEFIT
Change in Accumulation Unit Value for 12-Month Period ended December 31,
--------------------------------------------------------------------------------------
Investment Division
Corresponding To 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
- ---------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
The Guardian Cash Fund ...... 6.45 4.07 1.72 1.16 2.32 4.01 3.47 3.63 3.80 3.26
The Guardian Bond Fund ...... 6.00 14.51 6.14 8.26 -4.85 15.89 1.38 7.41 6.74 -2.27
The Guardian Stock Fund ..... -13.05 33.99 18.33 18.22 -2.70 32.71 25.05 33.62 18.37 29.27
The Guardian Small Cap Stock
Fund ........................ 3.11* -6.93 33.09
Gabelli Capital Asset Fund .. 9.40* 40.53 10.31 45.68
Baillie Gifford
International Fund .......... -10.22* 32.10 -0.58 9.62 13.74 10.31 19.66 37.10
Baillie Gifford Emerging
Markets Fund ................ -2.04* 22.77 0.49 -27.69 69.77
Value Line Centurion Fund
("VLCF") .................... 4.03 49.98 4.39 7.63 -3.63 38.05 15.63 19.63 25.88 26.37
Value Line Strategic Asset
Management Trust
("VLSAM") ................... -1.60 41.26 13.39 10.24 -6.25 26.68 14.18 13.98 25.86 22.52
MFS Growth With Income
Series ...................... 22.64* 27.91 20.80 5.15
</TABLE>
* From date of commencement of public offering of Fund's shares through
December 31.
B-7
<PAGE>
Calculation of Yield Quotations for the Cash Fund Investment Division
The yield of the Investment Division of the Separate Account investing in
the Cash Fund represents the net change, exclusive of gains and losses realized
by the Investment Division or the Cash Fund and unrealized appreciation and
depreciation with respect to the Cash Fund's portfolio of securities, in the
value of a hypothetical pre-existing Contract that is credited with one
Accumulation Unit at the beginning of the period for which yield is determined
(the "base period"). The base period generally will be a seven-day period. The
current yield for a base period is calculated by dividing (1) the net change in
the value of the Contract for the base period (see "Accumulation Period" in the
Prospectus) by (2) the value of the Contract at the beginning of the base period
and multiplying the result by 365/7. Deductions from purchase payments (for
example, any applicable premium taxes) and any applicable contingent deferred
sales charge assessed at the time of withdrawal or annuitization are not
reflected in the computation of current yield of the Investment Division. The
determination of net change in Contract value reflects all deductions that are
charged to a Contract owner, in proportion to the length of the base period and
the Investment Division's average Contract size. The current annualized yield of
the Cash Fund Investment Division for the 7-day period ended December 31, 1999
was 5.33%.
Yield also may be calculated on an effective or compound basis, which
assumes continual reinvestment by the Investment Division throughout an entire
year of net income earned by the Investment Division at the same rate as net
income is earned in the base period. The effective or compound yield for a base
period is calculated by (1) dividing (i) the net change in the value of the
Contract for the base period by (ii) the value of the Contract as of the
beginning of the base period, (2) adding 1 to the result, (3) raising the sum to
a power equal to 365 divided by the number of days in the base period, and (4)
subtracting 1 from the result. The effective annualized yield of the Cash Fund
Investment Division for the 7-day period ended December 31, 1999 was 5.47%.
The current and effective yields of the Cash Fund Investment Division will
vary depending on prevailing interest rates, the operating expenses and the
quality, maturity and type of instruments held in the Cash Fund's portfolio.
Consequently, no yield quotation should be considered as representative of what
the yield of the Investment Division may be for any specified period in the
future. The yield is subject to fluctuation and is not guaranteed.
Performance Comparisons
Advertisements and sales literature for the Separate Account's Investment
Divisions and their underlying Funds may compare their performance to other
investment vehicles and the separate accounts of other insurance companies as
reflected in independent performance data furnished by sources such as Lipper
Analytical Services, Inc., Morningstar, and Variable Annuity Research & Data
Service, all of which are independent services which monitor and rank the
performance of variable annuity issuers in each of the major categories of
investment objectives on an industry-wide basis. The performance analyses
prepared by such services rank issuers on the basis of total return, assuming
reinvestment of distributions, but may not take sales charges, redemption fees,
or certain expense deductions into consideration.
VALUATION OF ASSETS OF THE SEPARATE ACCOUNT
The value of Fund shares held in each Investment Division at the time of
each valuation is the redemption value of such shares at such time. If the right
to redeem shares of a Fund has been suspended, or payment of redemption value
has been postponed for the sole purpose of computing Annuity Payments, the
shares held in the Separate Account (and corresponding Annuity Units) may be
valued at fair value as determined in good faith by GIAC's Board of Directors.
B-8
<PAGE>
TRANSFERABILITY RESTRICTIONS
Where a Contract is owned in conjunction with a retirement plan qualified
under the Internal Revenue Code of 1986, as amended ("Code"), a tax-sheltered
annuity program or individual retirement account, and notwithstanding any other
provisions of the Contract, the Contract owner may not change the ownership of
the Contract nor may the Contract be sold, assigned or pledged as collateral for
a loan or as security for the performance of an obligation or for any other
purpose to any person other than GIAC unless the Contract owner is the trustee
of an employee trust qualified under the Code, the custodian of a custodial
account treated as such, or the employer under a qualified non-trusteed pension
plan.
EXPERTS
The Firm of PricewaterhouseCoopers LLP, 1177 Avenue of the Americas, New
York, New York 10036 currently serves as independent accountants for GIAC and
the Separate Account.
The financial statements of The Guardian Separate Account D incorporated in this
Registration Statement by reference to the Annual Report to Contractowners for
the year ended December 31, 1999 have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
The consolidated financial statements of the Guardian Insurance & Annuity
Company, Inc., as of December 31, 1999 and 1998 and for each of three years in
the period ended December 31, 1999 included in this Registration Statement have
been so included in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
FINANCIAL STATEMENTS
The consolidated financial statements of GIAC which are set forth herein
beginning on page B-10 should be considered only as bearing upon the ability of
GIAC to meet its obligations under the Contracts.
The financial statements of the Guardian Separate Account D are
incorporated herein by reference to the Separate Account's 1999 Annual Report to
Contract owners. Such financial statements, the notes thereto and the reports of
the independent accountants and auditors thereon are incorporated by reference
into this Statement of Additional Information or are included elsewhere in this
Registration Statement. A free copy of the 1999 Annual Report to Contract owners
accompanies this Statement of Additional Information.
B-9
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Directors of
The Guardian Insurance & Annuity Company, Inc.:
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income and comprehensive income, of changes in equity
and of cash flows present fairly, in all material respects, the financial
position of The Guardian Insurance & Annuity Company, Inc. and its subsidiaries
at December 31, 1999 and 1998, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.
These financial statements are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
As discussed in Note 2 to the consolidated financial statements, the Company
changed its method of accounting for costs of computer software developed or
obtained for internal use in 1999.
/s/ Pricewaterhouse Coopers LLP
February 14, 2000
B-10
<PAGE>
- --------------------------------------------------------------------------------
THE GUARDIAN INSURANCE
& ANNUITY COMPANY, INC.
- --------------------------------------------------------------------------------
The Guardian Insurance & Annuity Company, Inc.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
As of December 31,
---------------------
1999 1998
-------- --------
(In millions)
<S> <C> <C>
Assets:
Bonds, available for sale at fair
value (cost $572.7 million; $538.6 million, respectively) ....... $ 554.8 $ 549.0
Affiliated mutual funds ............................................ 78.0 42.9
Joint ventures ..................................................... 0.5 0.4
Policy loans ....................................................... 80.1 72.9
Short-term investments ............................................. 7.1 --
--------- ---------
Total invested assets .............................................. 720.5 665.2
--------- ---------
Cash and cash equivalents .......................................... 63.6 18.5
Deferred acquisition costs ......................................... 357.5 313.6
Deferred software costs ............................................ 11.6 --
Uncollected and unpaid premiums .................................... 3.4 2.1
Amounts receivable from reinsurers ................................. 46.5 42.5
Investment income due and accrued .................................. 9.9 9.4
Other assets ....................................................... 5.1 3.3
Accounts receivable ................................................ 37.5 22.2
Separate account assets ............................................ 11,063.8 8,841.7
--------- ---------
Total Assets ....................................................... $12,319.4 $ 9,918.5
========= =========
Liabilities:
Future policy benefits and other policyholder liabilities .......... $ 547.9 $ 480.0
Due to parent and mutual fund affiliates ........................... 69.6 32.2
Current federal income taxes ....................................... 18.2 25.8
Deferred federal income taxes ...................................... 102.8 98.8
Accrued expenses and other liabilities ............................. 110.0 47.5
Separate account liabilities ....................................... 10,970.4 8,764.8
--------- ---------
Total Liabilities .................................................. 11,818.9 9,449.1
--------- ---------
Stockholder's equity:
Common stock, 1999 - $100 par value, 25,000 shares authorized,
issued and outstanding; 1998 - $100 par value, 20,000 shares
authorized, issued and oustanding ............................... 2.5 2.0
Additional paid-in capital ......................................... 136.9 137.4
Retained earnings .................................................. 347.9 310.6
Accumulated other comprehensive income ............................. 13.2 19.4
--------- ---------
Stockholder's equity ............................................... 500.5 469.4
--------- ---------
Total Liabilities & Stockholder's Equity ........................... $12,319.4 $ 9,918.5
========= =========
</TABLE>
See notes to consolidated financial statements.
B-11
<PAGE>
The Guardian Insurance & Annuity Company, Inc.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
For the years ended December 31,
--------------------------------
1999 1998 1997
------ ------ ------
(In millions)
Revenues:
<S> <C> <C> <C>
Premiums ............................................... $ 12.0 $ 9.1 $ 3.7
Net investment income .................................. 45.4 41.4 38.7
Realized capital (losses) gains on investments ......... (1.7) 2.1 0.9
Income from brokerage operations ....................... 67.1 39.7 31.1
Administrative service fees ............................ 217.1 173.6 130.5
Other income ........................................... 17.5 24.0 20.3
------ ------ ------
Total revenues ......................................... 357.4 289.9 225.2
------ ------ ------
Benefits and other deductions:
Policyholder benefits .................................. 21.2 23.7 20.3
Amortization of deferred policy acquisition costs ...... 67.1 55.3 36.6
Amortization of deferred software costs ................ 1.8 -- --
Other operating costs and expenses ..................... 165.6 105.1 73.3
------ ------ ------
Total benefits and other deductions .................... 255.7 184.1 130.2
------ ------ ------
Income before income taxes ............................. 101.7 105.8 95.0
Federal income taxes:
Current expense ........................................ 12.1 24.4 17.2
Deferred expense ....................................... 12.3 12.0 16.2
------ ------ ------
Total federal income taxes ............................. 24.4 36.4 33.4
------ ------ ------
Net income ............................................. 77.3 69.4 61.6
Other comprehensive income, net of income tax:
Change in unrealized investment (losses) gains ......... (6.2) 3.2 12.6
------ ------ ------
Comprehensive income ................................... $ 71.1 $ 72.6 $ 74.2
====== ====== ======
</TABLE>
See notes to consolidated financial statements.
B-12
<PAGE>
The Guardian Insurance & Annuity Company, Inc.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
For the years ended December 31,
--------------------------------
1999 1998 1997
------ ------ ------
(In millions)
<S> <C> <C> <C>
Common stock at par value, beginning of year ........... $ 2.0 $ 2.0 $ 2.0
Increase in par value .................................. 0.5 -- --
------ ------ ------
Common stock at par value, end of year ................. 2.5 2.0 2.0
------ ------ ------
Capital in excess of par value, beginning of year ...... 137.4 137.4 137.4
(Decrease) in capital .................................. (0.5) -- --
------ ------ ------
Capital in excess of par value, end of year ............ 136.9 137.4 137.4
------ ------ ------
Retained earnings, beginning of year ................... 310.6 241.2 179.6
Net income ............................................. 77.3 69.4 61.6
Dividends to parent .................................... (40.0) -- --
------ ------ ------
Retained earnings, end of year ......................... 347.9 310.6 241.2
------ ------ ------
Accumulated comprehensive income,
net of deferred taxes, beginning of year ............ 19.4 16.2 3.6
Change in unrealized investment (losses) gains,
net of deferred taxes ............................... (6.2) 3.2 12.6
------ ------ ------
Accumulated comprehensive income,
net of deferred taxes, end of year .................. 13.2 19.4 16.2
------ ------ ------
Total stockholder's equity, end of year ................ $500.5 $469.4 $396.8
====== ====== ======
</TABLE>
See notes to consolidated financial statements
B-13
<PAGE>
The Guardian Insurance & Annuity Company, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
For the years ended December 31,
--------------------------------
1999 1998 1997
------ ------ ------
(In millions)
<S> <C> <C> <C>
Operating activities
Net income .............................................. $ 77.3 $ 69.4 $ 61.6
Adjustments to reconcile net income to net
cash provided by operating activities:
Changes in
Deferred policy acquisition costs .................... (43.9) (46.2) (45.9)
Deferred software costs .............................. (11.6) -- --
Uncollected premiums ................................. (1.3) 2.4 0.5
Amounts receivable from reinsurers ................... (4.0) (13.4) 24.9
Investment income due and accrued .................... (0.5) (0.5) (0.3)
Other assets ......................................... (1.8) 0.1 0.6
Accounts receivable .................................. (15.3) 8.6 (10.4)
Separate accounts, net ............................... (16.5) (14.8) (5.1)
Future policy benefits and policyholder liabilities .. 20.9 21.9 (17.0)
Payable to parent .................................... 10.7 5.7 8.9
Federal income taxes:
Current ............................................ (7.6) 9.1 6.9
Deferred ........................................... 4.0 14.1 19.2
Accrued expenses and other liabilities ............... 62.5 (1.5) (14.0)
Realized losses(gains) on investments ................ 1.7 (2.1) (0.9)
Other, net ........................................... (0.7) 1.0 (3.8)
------ ------ ------
Net cash provided by operating activities .......... 73.9 53.8 25.2
------ ------ ------
Investment activities
Proceeds from investments sold
Bonds ................................................ 142.2 280.9 315.4
Other items, net ..................................... -- -- (1.3)
Investments purchased
Bonds ................................................ (180.1) (331.7) (310.5)
Affiliated mutual funds .............................. (24.6) (3.3) (20.5)
------ ------ ------
Net cash used by investing activities .............. (62.5) (54.1) (16.9)
------ ------ ------
Financing activities
Additions to policyholder contract deposits ............. 107.7 54.8 61.7
Withdrawals from policyholder contract deposits ......... (60.7) (64.4) (61.8)
Dividend to parent ...................................... (13.3) -- --
------ ------ ------
Net cash provided (used) by financing activities ... 33.7 (9.6) (0.1)
------ ------ ------
(Decrease) Increase in cash ................................ 45.1 (9.9) 8.2
Cash and cash equivalents, at beginning of year ............ 18.5 28.4 20.2
------ ------ ------
Cash and cash equivalents, at end of year .................. $ 63.6 $ 18.5 $ 28.4
====== ====== ======
Supplemental disclosure:
Federal income taxes paid ............................... $ 19.7 $ 15.4 $ 10.2
====== ====== ======
</TABLE>
See notes to consolidated financial statements.
B-14
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
The Guardian Insurance & Annuity Company, Inc. (GIAC or the Company) is a
wholly owned subsidiary of The Guardian Life Insurance Company of America (The
Guardian). The Company, domiciled in the state of Delaware, is licensed to
conduct life and health insurance business in all fifty states and the District
of Columbia. The Company's primary business is the sale of variable deferred
annuity contracts and variable and term life insurance policies. For variable
products, other than 401(k) products, contracts are sold by insurance agents who
are licensed by GIAC and are either Registered Representatives of Park Avenue
Securities, LLP (PAS) or of broker dealer firms that have entered into sales
agreements with GIAC. The Company's general agency distribution system is used
for the sale of other products and policies.
PAS, a wholly owned subsidiary of the Company, is a registered broker
dealer under the Securities Exchange Act of 1934. PAS was established as a
broker dealer during 1999 and has assumed the registered representatives
formally affiliated with Guardian Investor Services Corporation (GISC).
GISC, a wholly owned subsidiary of the Company, is a registered broker
dealer under the Securities Exchange Act of 1934 and is a registered investment
adviser under the Investment Adviser's Act of 1940. GISC is the distributor and
underwriter for GIAC's variable products, and is the investment adviser to
certain mutual funds sponsored by GIAC which are investment options for the
variable products.
The Company has established fourteen insurance separate accounts primarily
to support the variable annuity, universal variable life and variable life
insurance products it offers. The majority of the separate accounts are unit
investment trusts registered under the Investment Company Act of 1940. Proceeds
from the sale of variable products are invested through these separate accounts
in certain mutual funds specified by the contractholders. Of these separate
accounts the Company maintains two separate accounts whose sole purpose is to
fund certain employee benefits plans of The Guardian.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation: The Company's consolidated financial statements are
prepared in accordance with accounting principles generally accepted in the
United States (GAAP). All significant intercompany balances and transactions
have been eliminated.
Accounting Changes: In March 1998, the American Institute of Certified
Public Accountants ("AICPA") issued Statement of Position ("SOP") 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use", which requires capitalization of external and certain internal
costs incurred to obtain or develop internal-use computer software during the
application development stage. The Company applied the provisions of SOP 98-1
prospectively effective January 1, 1999. The adoption of SOP 98-1 resulted in
$14.9 million of software costs being capitalized. Capitalized internal use
software is amortized on a straight-line basis over the estimated useful life of
the software.
Use of Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the period. Actual results could differ from those estimates.
VALUATION OF INVESTMENTS AND RELATED GAINS AND LOSSES:
Bonds and common stocks are classified as available for sale and carried
at estimated fair value, with unrealized appreciation or depreciation recorded
net of applicable deferred taxes are included in a separate component of equity,
"Accumulated other comprehensive income". The investment portfolio is reviewed
for investments that may have experienced a decline in value considered to be
other than temporary.
Joint ventures are carried on the equity basis of accounting.
Policy loans are stated at unpaid principal balance. The carrying amount
approximates fair value since loans on policies have no defined maturity date
and reduce the amount payable at death or surrender of the contract.
B-15
<PAGE>
The Guardian Insurance & Annuity Company, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
Securities purchase under agreements to resell and securities sold under
agreements to repurchase are treated as financing arrangements and are carried
at the amounts at which the securities will be subsequently resold or
reacquired, including accrued interest, as specified in the respective
agreements. The Company's policy is to take possession of securities purchased
under agreements to resell. The market value of securities to be repurchased or
resold is monitored, and additional collateral is requested, where appropriate,
to protect against credit exposure.
Securities repurchase and resale agreements and securities borrowed and
loaned transactions are used to generate net investment income and facilitate
trading activity. These instruments are short-term in nature (usually 30 days or
less) and are collateralized principally by U.S. Government and mortgage-backed
securities. The carrying amounts of these instruments approximate fair value
because of the relatively short period of time between the origination of the
instruments and their expected realization.
Realized investment gains, net are computed using the specific
identification method. Costs of bonds and stocks are adjusted for impairments
considered other than temporary. Allowances for losses on mortgage loans and
real estate are netted against asset categories to which they apply and
provisions for losses on investments are included in "Realized investment gains,
net." Decreases in lower of depreciated cost or fair value less selling costs of
investment real estate held for sale are recorded in "Realized investment gains,
net."
Short-term investments are stated at amortized cost and consist primarily
of investments with maturities as of purchase date of six months or less. Market
values for such investments approximate carrying value.
Cash and cash equivalents include cash on hand and highly liquid debt
instruments purchased with an original maturity of three months or less.
Deferred Policy Acquisition Costs are costs of acquiring new business,
principally commissions, underwriting, agency and policy issue expenses, all of
which vary with and are primarily related to the production of new business, are
deferred. Deferred policy acquisition costs are subject to recoverability
testing at the time of policy issue and loss recognition testing at the end of
each accounting period.
For investment-type products, deferred policy acquisition costs are
amortized over the shorter of the expected average life of the contracts or
thirty years, as a constant percentage of estimated gross profits arising
principally from investment results, mortality and expense margins and surrender
charges based on actual results and anticipated future experience, updated at
the end of each accounting period. The effect on the amortization of deferred
policy acquisition costs of revisions to estimated gross profits is reflected in
earnings in the period such estimated gross profits are revised.
For life insurance products, deferred policy acquisition costs are
amortized in proportion to anticipated premiums. Assumptions as to anticipated
premiums are estimated at the date of policy issue and are consistently applied
during the life of the contracts. Deviations from estimated experience are
reflected in earnings in the period such deviations occur. For these contracts,
the amortization periods generally are for the estimated life of the policy.
Separate account assets and liabilities are reported at market value, and
represent policyholder funds maintained in accounts having specific investment
objectives. The assets of each account are legally segregated and are not
subject to claims that arise out of any other business of the Company.
Investment risks associated with market value changes are generally borne by the
customers, except to the extent of minimum guarantees made by the Company with
respect to certain amounts. The investment results of separate accounts are
reflected in separate account liabilities. The amounts provided by the Company
to establish separate account investment portfolios (seed money) are included in
separate account assets.
Insurance Revenue and Expense Recognition consists of premiums and
benefits. Premiums for term life and certain annuity insurance products are
recognized as revenue when due and collected. The reserve for future policy
benefits has been provided on a net-level premium method based upon estimated
investment yields, mortality, and other assumptions which were appropriate at
the time the policies were issued. Benefits and expenses are associated with
earned premiums so as to result in recognition of profits over the life of the
contract. This association is accomplished by the provision for future policy
benefits and the deferral and amortization of policy acquisition costs.
Revenues for variable life and for individual and group variable annuity
products consist of net investment income and cost of insurance, policy
administration and surrender charges that have been earned and assessed against
policyholder account balances during the period. Policy benefits and claims that
are charged to expense include benefits and
B-16
<PAGE>
The Guardian Insurance & Annuity Company, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
claims incurred in the period in excess of related policy account balances,
maintenance costs and interest credited to policyholder account balances. The
policyholder account values represent an accumulation of gross premium payments
plus credited interest less expense and mortality charges and withdrawals.
Income Taxes for the Guardian and its life insurance and non-life
insurance subsidiaries file a consolidated federal income tax return. Current
federal taxes are charged or credited to operations based on amounts estimated
to be payable or recoverable as a result of taxable operations for the current
year. Deferred income tax assets and liabilities are recognized based on the
difference between financial statement carrying amounts and income tax basis of
assets and liabilities using enacted income tax rates and laws.
Reclassifications of certain amounts in prior years have been adjusted to
conform to current year presentation.
NOTE 3 - INVESTMENT SECURITIES
Market values of bonds and common stocks are based on quoted prices as
available. For certain private placement debt securities where quoted market
prices are not available, management estimates fair market value by using
adjusted market prices for like securities.
The cost and estimated market values of investments by major investment
category as of December 31, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
December 31, 1999
(In millions)
-------------------------------------------------
Gross Gross Estimated
Cost Unrealized Unrealized Market
Basis Gains Losses Value
------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
U.S. Treasury securities & obligations of U.S. ....
government corporations and agencies ............ $ 24.5 $ 0.2 $ 0.7 $ 24.0
Obligations of states and political subdivisions .. 30.7 0.1 0.5 30.3
Debt securities issued by foreign governments ..... 3.8 -- 0.1 3.7
Corporate debt securities ......................... 513.7 0.5 17.4 496.8
------- ------- ------- -------
Subtotal ........................................ 572.7 0.8 18.7 554.8
Affiliated mutual funds ........................... 61.0 17.2 0.2 78.0
------- ------- ------- -------
$ 633.7 $ 18.0 $ 18.9 $ 632.8
======= ======= ======= =======
(In millions)
-------------------------------------------------
Gross Gross Estimated
Cost Unrealized Unrealized Market
Basis Gains Losses Value
------- ---------- ---------- ---------
U.S. Treasury securities & obligations of U.S. ....
government corporations and agencies ............ $ 28.4 $ 1.5 $ -- $ 29.9
Obligations of states and political subdivisions .. 60.2 1.4 -- 61.6
Debt securities issued by foreign governments ..... 8.0 0.1 -- 8.1
Corporate debt securities ......................... 442.0 10.0 2.6 449.4
------- ------- ------- -------
Subtotal ........................................ 538.6 13.0 2.6 549.0
Affiliated mutual funds ........................... 36.9 6.6 0.6 42.9
------- ------- ------- -------
$ 575.5 $ 19.6 $ 3.2 $ 591.9
======= ======= ======= =======
</TABLE>
The amortized cost and estimated market value of bonds as of December 31,
1999 and 1998 by contractual maturity is shown below. Expected maturities will
differ from contractual maturities because borrowers may have the right to call
or prepay obligations.
B-17
<PAGE>
The Guardian Insurance & Annuity Company, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
<TABLE>
<CAPTION>
As of December 31, 1999
(In millions)
-----------------------
Estimated
Amortized Market
Cost Value
--------- ---------
<S> <C> <C>
Due in one year or less ............................................ $ 61.4 $ 61.2
Due after one year through five years .............................. 296.4 290.0
Due after five years through ten years ............................. 100.1 95.5
Due after ten years ................................................ 51.7 46.7
Sinking fund bonds (including collateralized mortgage obligations) . 63.1 61.4
--------- ---------
$ 572.7 $ 554.8
========= =========
As of December 31, 1998
(In millions)
-----------------------
Estimated
Amortized Market
Cost Value
--------- ---------
<S> <C> <C>
Due in one year or less ............................................ $ 47.5 $ 47.7
Due after one year through five years .............................. 250.0 253.2
Due after five years through ten years ............................. 102.5 107.8
Due after ten years ................................................ 67.6 68.3
Sinking fund bonds (including collateralized mortgage obligations) . 71.0 72.0
--------- ---------
$ 538.6 $ 549.0
========= =========
</TABLE>
The major categories of net investment income are summarized as follows:
<TABLE>
<CAPTION>
For the year ended December 31,
(In millions)
--------------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Fixed maturities ....................................... $ 37.2 $ 33.9 $ 31.8
Affiliated mutual funds ................................ 1.6 1.5 1.1
Policy loans ........................................... 3.7 3.5 3.4
Short-term investment .................................. 2.9 2.3 2.4
Joint venture dividend ................................. 1.3 1.3 1.1
------ ------ ------
46.7 42.5 39.8
Less: Investment expenses .............................. 1.3 1.1 1.1
------ ------ ------
Net investment income .................................. $ 45.4 $ 41.4 $ 38.7
====== ====== ======
</TABLE>
Realized gains and losses are based upon specific identification of the
investments. The components of gross realized gains and losses for the year
ended December 31, 1999, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
For the year ended December 31,
(In millions)
--------------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Realized gains from dispositions:
Bonds ................................................ $ 0.6 $ 2.2 $ 1.1
Separate account seed ................................ 0.9 -- 0.9
Realized losses from dispositions:
Bonds ................................................ (3.1) (0.1) (1.1)
Affiliated mutual funds .............................. (0.1) -- --
------ ------ ------
Realized gains ......................................... $ (1.7) $ 2.1 $ 0.9
====== ====== ======
</TABLE>
B-18
<PAGE>
The Guardian Insurance & Annuity Company, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
The net unrealized holding gains and losses, included in the consolidated
balance sheets as a component of comprehensive income and the changes for the
corresponding years are summarized as follows:
<TABLE>
<CAPTION>
For the years ended December 31,
(In millions)
--------------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Balance, beginning of year ............................. $ 19.4 $ 16.2 $ 3.6
Changes in unrealized investment gains (losses),
net of deferred taxes, attributable to:
Bonds .............................................. (20.4) 2.6 4.6
Affiliated mutual funds ............................ 9.1 (1.8) 7.3
Separate account seed .............................. 5.1 2.4 1.7
Other .............................................. -- -- (1.0)
------ ------ ------
Balance, end of year ................................... $ 13.2 $ 19.4 $ 16.2
====== ====== ======
</TABLE>
Currently, comprehensive income for the Company consists of net income and
the change in unrealized gains and losses on securities. As of December 31,
1999, 1998 and 1997, the change in unrealized gains and losses before tax was
$(12.9), $7.4 and $15.6 and after tax was $(6.2), $3.2 and $12.6, respectively.
Reclassification adjustments for the period, which include gains on
investment securities that were realized and included in net income of the
current period that also had been included in other comprehensive income as
unrealized holding gains in the period in which they arose, are as follows:
<TABLE>
<CAPTION>
For the years ended December 31,
(In millions)
--------------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Unrealized holding (losses) gains ...................... $(14.5) $ 5.7 $ 15.6
Less: Reclassification adjustments ..................... 1.6 1.7 --
------ ------ ------
Change in unrealized holding (losses) gains ............ $(12.9) $ 7.4 $ 15.6
====== ====== ======
</TABLE>
Special Deposit assets of $3.7 million and $4.1 million at December 31,
1999 and 1998, respectively, were on deposit with governmental authorities or
trustees as required by certain insurance laws.
NOTE 4 - DEFERRED POLICY ACQUISITION COSTS
The balances of and changes in deferred policy acquisition costs as of and
for the years ended December 31, 1999 and 1998 are summarized as follows:
<TABLE>
<CAPTION>
As of December 31,
(In millions)
-----------------------
1999 1998
<S> <C> <C>
Balance, beginning of year ......................................... $ 313.6 $ 267.4
Capitalization of deferrable expenses .............................. 93.8 77.0
Amortization of recoverable DAC balances ........................... (67.1) (55.3)
Interest on DAC .................................................... 21.7 24.2
Retrospectively applied adjustments ................................ (4.5) 0.3
--------- ---------
Balance, end of year ............................................... $ 357.5 $ 313.6
========= =========
</TABLE>
B-19
<PAGE>
The Guardian Insurance & Annuity Company, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
NOTE 5 - POLICYHOLDERS' ACCOUNT BALANCES
The balances of policyholders' account balances as of and for the years
ended December 31, 1999 and 1998 are summarized as follows:
As of December 31,
(In millions)
-----------------------
1999 1998
---------- ---------
Individual annuities ................................ $ 7,617.9 $ 6,492.8
Group annuities ..................................... 3,105.7 2,104.3
Variable life ....................................... 713.7 569.6
Interest-sensitive life contracts ................... 4.2 4.5
---------- ---------
Policyholders' account balances ..................... $ 11,441.5 $ 9,171.2
========== =========
Policyholders' account balances for investment-type contracts represent an
accumulation of gross premium payments plus credited interest less withdrawals,
expenses and mortality charges.
NOTE 6 - FEDERAL INCOME TAXES
The federal income tax expense in the consolidated statements of earnings
is summarized as follows:
For the years ended December 31,
(In millions)
--------------------------------
1999 1998 1997
------ ------ ------
Federal Income Tax expense:
Current ................................... $ 12.1 $ 24.4 $ 17.2
Deferred .................................. 12.3 12.0 16.2
------ ------ ------
Total ....................................... $ 24.4 $ 36.4 $ 33.4
====== ====== ======
The federal income taxes attributable to consolidated operations in
certain circumstances can be different from the amounts determined by
multiplying the earnings from operations before federal income taxes by the
expected federal income tax rate of 35%. The sources of the difference and the
tax effects of each source are as follows:
<TABLE>
<CAPTION>
For the years ended December 31,
(In millions)
--------------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Expected taxes on pre-tax income ....................... $ 35.6 $ 37.5 $ 33.3
Permanent adjustments:
Dividends received deduction on separate accounts .... (13.1) -- --
Reserve on overpayment of 1998 taxes in 1999 ........... 1.3 -- --
True-up of tax basis reserves .......................... 1.3 -- --
State and local taxes .................................. -- (0.5) 0.1
Foreign tax credit ..................................... (0.3) (0.3) --
Other .................................................. (0.4) (0.3) --
------ ------ ------
Total tax expense ...................................... $ 24.4 $ 36.4 $ 33.4
====== ====== ======
</TABLE>
B-20
<PAGE>
The Guardian Insurance & Annuity Company, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
The tax effect of temporary differences which give rise to deferred
federal income tax assets and liabilities as of December 31, 1999 and 1998, are
as follows:
As of December 31,
(In millions)
-----------------------
1999 1998
--------- ---------
Deferred tax assets:
Other liabilities ................................... $ 19.5 $ 15.7
DAC Proxy ........................................... 13.7 11.1
Amounts receivable from reinsurer ................... 0.3 0.9
Other ............................................... 3.9 1.4
--------- ---------
Total deferred tax assets ........................... 37.4 29.1
Deferred tax liabilities:
Deferred acquisition costs .......................... $ 125.1 $ 109.8
Capitalized software costs .......................... 4.1 --
Reserves ............................................ 7.7 6.0
Investments ......................................... 3.3 10.3
Other ............................................... -- 1.8
--------- ---------
Total deferred tax liabilities ...................... 140.2 127.9
--------- ---------
Net deferred tax liability .......................... $ 102.8 $ 98.8
========= =========
Management has concluded that the deferred income tax assets are more
likely than not to be realized. Therefore, no valuation allowance has been
provided.
NOTE 7 - REINSURANCE
The Company has entered into cession and assumption agreements on a
coinsurance, modified coinsurance and yearly renewable term basis with
affiliated and non-affiliated companies. Ceding reinsurance is used by the
Company to limit its risk from large exposures and to permit recovery of a
portion of direct losses, although ceded reinsurance does not relieve the
originating insurer of liability.
The Company has assumed and ceded coinsurance and modified coinsurance
agreements with affiliated companies. Under these agreements, included in the
consolidated statements of income are $0.9 million, $0.9 million and $1.0
million of assumed premiums at December 31, 1999, 1998 and 1997, and $83.1
million, $65.2 million and $43.6 million of ceded premiums at December 31, 1999,
1998 and 1997, respectively.
The Company terminated, during 1997, an assumption agreement with an
unaffiliated company. Under this agreement, included in the consolidated
statements of income are $(2.3) million of premiums at December 31, 1997.
NOTE 8 - FAIR VALUE OF FINANCIAL INSTRUMENTS
Estimated fair values for fixed maturities and equity securities, other
than private placement securities, are based on quoted market prices or
estimates from independent pricing services. Fair values for private placement
securities are estimated using a discounted cash flow model which considers the
current market spreads between the U.S. Treasury yield curve and corporate bond
yield curve, adjusted for the type of issue, its current credit quality and its
remaining average life. The fair value of certain non-performing private
placement securities is based on amounts estimated by management.
B-21
<PAGE>
The Guardian Insurance & Annuity Company, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
NOTE 9 - RELATED PARTY TRANSACTIONS
The Company is billed by The Guardian for all compensation and related
employee benefits for those employees of The Guardian who are engaged in the
Company's business and for the Company's use of The Guardian's centralized
services and agency force. The amounts charged for these services amounted to
$141.0 million in 1999, $100.8 million in 1998 and $72.2 million in 1997, and,
in the opinion of management, were considered appropriate for the services
rendered.
The Company had an investment in the Guardian Real Estate Account (GREA),
which was established in 1987 under Delaware Insurance law as an insurance
company separate account. GIAC had contributed capital to GREA to provide for
funds and to preserve liquidity. Effective December 19, 1997 GREA was liquidated
and, as a result, $6.7 million was returned to GIAC in the form of capital and
there was a realized gain recorded of $1.0 million.
A significant portion of the Company's separate account assets is invested
in affiliated mutual funds. Each of these funds has an investment advisory
agreement with the Company, except for The Baillie Gifford International Fund,
The Baillie Gifford Emerging Markets Fund, The Guardian Baillie Gifford
International Fund and The Guardian Baillie Gifford Emerging Markets Fund.
The separate account assets invested in affiliated mutual funds as of
December 31, 1999 and 1998 are as follows (in millions):
1999 1998
--------- ---------
The Guardian Stock Fund .............................. $ 4,153.9 $ 3,664.9
The Guardian VC 500 Index Fund ....................... 1.8 --
The Guardian VC Allocation Fund ...................... 0.8 --
The Guardian High Yield Bond Fund .................... 0.2 --
The Guardian Bond Fund ............................... 320.0 381.5
The Guardian Cash Fund ............................... 484.1 419.5
The Baillie Gifford International Fund ............... 662.3 526.4
The Baillie Gifford Emerging Markets Fund ............ 64.6 34.6
The Guardian Small Cap Stock Fund .................... 130.6 109.2
The Guardian Park Avenue Fund ........................ 621.3 511.6
The Guardian Park Avenue Small Cap Fund .............. 22.8 13.2
The Guardian Asset Allocation Fund ................... 46.0 39.8
The Guardian Baillie Gifford International Fund ...... 15.5 9.1
The Guardian Baillie Gifford Emerging Markets Fund ... 6.8 0.8
The Guardian Investment Quality Bond Fund ............ 12.7 9.3
The Guardian High Yield Bond Fund .................... 0.8 --
The Guardian Cash Management Fund .................... 126.4 57.9
--------- ---------
$ 6,670.6 $ 5,777.8
========= =========
The Company, in agreement with Baillie Gifford Overseas Ltd., has a joint
venture company -- Guardian Baillie Gifford Ltd. (GBG) -- that is organized as a
corporation in Scotland. GBG is registered in both the United Kingdom and the
United States to act as an investment advisor for the Baillie Gifford
International Fund (BGIF), the Baillie Gifford Emerging Markets Fund (BGEMF),
The Guardian Baillie Gifford International Fund (GBGIF) and The Guardian Baillie
Gifford Emerging Markets Fund (GBGEMF). The Funds are offered in the U.S. as
investment options under certain variable annuity contracts and variable life
policies.
B-22
<PAGE>
The Guardian Insurance & Annuity Company, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
The Company maintains investments in affiliated mutual funds. These
investments as of December 31, 1999 and 1998 are as follows (in millions):
1999 1998
--------- ---------
The Guardian Park Avenue Fund ........................ $ 0.1 $ 0.1
The Guardian Park Avenue Small Cap Fund .............. 2.5 1.8
The Guardian Small Cap Stock Fund .................... 35.2 26.1
The Guardian Asset Allocation Fund ................... 2.8 2.5
The Guardian Baillie Gifford International Fund ...... 2.9 2.1
The Guardian Baillie Gifford Emerging Markets Fund ... 1.5 0.9
The Guardian Investment Quality Bond Fund ............ 1.6 1.6
The Guardian High Yield Bond Fund .................... 1.6 1.6
The Guardian Cash Management Fund .................... 29.8 6.2
--------- ---------
$ 78.0 $ 42.9
========= =========
NOTE 10 - STATUTORY EQUITY AND INCOME
Applicable insurance department regulations require that the Company
prepare statutory financial statements in accordance with statutory accounting
practices prescribed or permitted by the New York Department of Insurance.
Statutory accounting practices primarily differ from GAAP by charging policy
acquisition costs to expense as incurred, establishing future policy benefits
reserves using different actuarial and interest assumptions, not providing for
deferred taxes, and valuing securities on a different basis.
The following reconciles the consolidated GAAP net income of the Company
to statutory net income as reported to the regulatory authorities:
<TABLE>
<CAPTION>
For the years ended December 31,
(In millions)
--------------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Consolidated GAAP net income ........................... $ 77.3 $ 69.4 $ 61.6
Adjustments to restate to statutory basis:
Statutory net income of subsidiaries ................. 3.3 (4.5) (4.3)
Change in deferred policy acquisition costs .......... (45.2) (43.2) (41.9)
Change in deferred software costs .................... (8.8) -- --
Deferred premiums .................................... 0.3 1.5 5.6
Re-estimation of future policy benefits .............. 13.1 9.7 3.3
Reinsurance .......................................... (3.8) (4.1) (12.4)
Deferred federal income tax expense .................. 11.2 11.9 16.2
Amortization of interest maintenance reserve ......... 0.4 0.3 0.1
Transfer to interest maintenance reserve ............. 2.4 (1.4) --
Other, net ........................................... 2.8 0.9 (0.2)
------ ------ ------
Statutory net income ................................... $ 53.0 $ 40.5 $ 28.0
====== ====== ======
</TABLE>
B-23
<PAGE>
The Guardian Insurance & Annuity Company, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
The following reconciles the consolidated GAAP stockholder's equity of the
Company to statutory capital and surplus as reported to the regulatory
authorities:
<TABLE>
<CAPTION>
As of December 31,
(In millions)
--------------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Consolidated GAAP stockholder's equity ................. $500.5 $469.4 $396.8
Add (deduct) cumulative effect of adjustments:
Deferred policy acquisition costs .................... (357.5) (313.6) (267.4)
Deferred software costs .............................. (11.6) -- --
Elimination of asset valuation reserve ............... (42.7) (29.6) (26.3)
Re-estimation of future policy benefits .............. (53.4) (46.9) (41.3)
Establishment of deferred income tax liability ....... 102.8 98.8 84.7
Unrealized gains on investments ...................... 19.8 (11.7) (7.9)
Other liabilities .................................... 66.7 48.1 33.5
Deferred premiums .................................... 8.2 7.8 7.0
Other, net ........................................... 5.4 5.1 3.6
------ ------ ------
Statutory capital and surplus .......................... $238.2 $227.4 $182.7
====== ====== ======
</TABLE>
B-24
<PAGE>
The Guardian Separate Account D
(Individual)
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) The following financial statements have been incorporated by reference
or are included in Part B:
(1) The Guardian Separate Account D (incorporated by reference into
Part B):
Statement of Assets and Liabilities as of December 31, 1999
Statement of Operations for the Year Ended December 31, 1999
Statements of Changes in Net Assets for the Two Years Ended
December 31, 1999 and 1998
Notes to Financial Statements
Report of PricewaterhouseCoopers LLP, Independent Accountants
(2) The Guardian Insurance & Annuity Company, Inc. (included in Part
B):
Consolidated Balance Sheets as of December 31, 1999 and 1998
Consolidated Statements of Income and Comprehensive Income for
the Three Years Ended December 31, 1999, 1998 and 1997
Consolidated Statements of Changes in Stockholder's Equity
for the Three Years Ended December 31, 1999, 1998 and 1997
Consolidated Statements of Cash Flow for the Three Years Ended
December 31, 1999, 1998 and 1997
Notes to Consolidated Financial Statements
Report of PricewaterhouseCoopers LLP, Independent Accountants
(b) Exhibits
Number Description
------ -----------
1 Resolutions of the Board of Directors of The Guardian
Insurance & Annuity Company, Inc. establishing Separate
Account D (1)
2 Not Applicable
3 Underwriting and Distribution Contracts:
(a) Distribution and Service Agreement between The
Guardian Insurance & Annuity Company, Inc. and
Guardian Investor Services Corporation, as
amended (1)
(b) Form of Broker-Dealer Supervisory and Service
Agreement (1)
4 Specimen of Variable Annuity Contract (1)
5 Form of Application for Variable Annuity Contract
6 (a) Certificate of Incorporation of The Guardian
Insurance & Annuity Company, Inc. (1)
(b) By-laws of The Guardian Insurance & Annuity Company,
Inc. (1)
7 Automatic Indemnity Reinsurance Agreement between The
Guardian Insurance & Annuity Company, Inc. and The
Guardian Life Insurance Company of America, as
amended (1)
<PAGE>
8 Amended and Restated Agreement for Services and
Reimbursement Therefore, between The Guardian Life
Insurance Company of America and The Guardian Insurance
& Annuity Company, Inc. (1)
9 Opinion and Consent of Counsel (1)
10 Consent of PricewaterhouseCoopers LLP
11 Not Applicable
12 Not Applicable
13 Powers of Attorney executed by a majority of the Board
of Directors and principal officers of The Guardian
Insurance & Annuity Company, Inc.
1. Incorporated by reference to the Registration Statement on Form N-4 (Reg.
33-31755), as previously filed on April 24, 1998.
C-2
<PAGE>
Item 25. Directors and Officers of the Depositor
The following is a list of directors and officers of The Guardian
Insurance & Annuity Company, Inc. ("GIAC"), the depositor of the
Registrant. The principal business address of each director and officer is
7 Hanover Square, New York, New York 10004.
Name
Positions with GIAC
- -------------------
Joseph D. Sargent President, Chief Executive Officer & Director
Edward K. Kane Executive Vice President & Director
Frank J. Jones Executive Vice President, Chief Investment Officer
& Director
Bruce C. Long Executive Vice President & Director
Thomas G. Sorell Senior Vice President
Philip H. Dutter Director
Arthur V. Ferrara Director
Leo R. Futia Director
Peter L. Hutchings Director
William C. Warren Director
Howard G. Most Vice President
Alexander M. Grant, Jr. Vice President
Howard W. Chin Vice President
Thomas M. Donahue Vice President
Robert J. Crimmins Vice President
Charles G. Fisher Vice President & Actuary
Dennis P. Mosticchio Vice President, Group Pensions
Frank L. Pepe Vice President & Controller
Richard T. Potter, Jr. Vice President and Counsel
Donald P. Sullivan, Jr. Vice President
Joseph A. Caruso Vice President & Corporate Secretary
Earl Harry Treasurer
C-3
<PAGE>
Item 26. Persons Controlled by or under Common Control with Registrant
The following list sets forth the persons directly controlled by The Guardian
Life Insurance Company of America ("Guardian Life") as of March 1, 2000:
<TABLE>
<CAPTION>
100% Percentage of
State of Incorporation Voting Securities
Name of Entity or Organization Owned
------------ ------------------ -------------
<S> <C> <C>
The Guardian Insurance & Delaware 100%
Annuity Company, Inc.
Guardian Asset Management Delaware 100%
Corporation
Guardian Trust Company, FSB Federal Savings Bank 100%
Fiduciary Insurance Company New York 100%
of America
Park Avenue Life Insurance Delaware 100%
Company
Private Healthcare Systems, Inc. Delaware 15%
Managed Dental Care, Inc. California 100%
First Commonwealth Delaware 100%
Guardian Hanover Corporation New York 100%
Managed Dental Guard, Inc. Texas 100%
Innovative Underwriters
Services New Jersey 100%
Dental Guard Preferred, Inc. Washington 100%
The Guardian Baillie Gifford
International Fund Massachusetts 19%
The Guardian Investment Quality Bond Fund Massachusetts 35%
Baillie Gifford International Fund Maryland 29%
Baillie Gifford Emerging Markets Fund Maryland 28%
The Guardian Tax-Exempt Bond Fund Massachusetts 92%
The Guardian Asset Allocation Fund Massachusetts 10%
The Guardian Park Avenue Small Cap Fund Massachusetts 24%
The Guardian Baillie Gifford Emerging
Markets Fund Massachusetts 60%
The Guardian High Yield Bond Fund Massachusetts 88%
The Guardian Small Cap Stock Fund Maryland 35%
The Guardian VC Asset Allocation Fund Maryland 94%
The Guardian VC 500 Index Fund Maryland 99%
The Guardian VC High Yield Bond Fund Maryland 99%
</TABLE>
The following list sets forth the persons directly controlled by affiliates
of Guardian Life, and thereby indirectly controlled by Guardian Life, as of
March 1, 2000:
Approximate
Percentage of Voting
Securities Owned
Place of Incorporation by Guardian Life
Name of Entity or Organization Affiliates
------------ ------------------- --------------
Guardian Investor Services New York 100%
Corporation
Guardian Baillie Gifford Limited Scotland 51%
The Guardian Cash Fund, Inc. Maryland 100%
The Guardian Bond Fund, Inc. Maryland 100%
The Guardian Variable Contract Maryland 100%
Funds, Inc.
GIAC Funds, Inc. Maryland 100%
Park Avenue Securities LLC Delaware 100%
The Guardian Park Avenue Fund Massachusetts 2%
Item 27. Number of Contractowners
Type of Contract Number as of April 1, 2000
---------------- --------------------------
Individual (Non-Qualified) 26,790
Individual (Qualified) 45,810
Group (Qualified) 576
--------------------------
Total 73,176
C-4
<PAGE>
Item 28. Indemnification
Reference is made to Article VIII of GIAC's By-Laws, as supplemented by
Section 3.2 of the Certificate of Incorporation of GIAC, filed as Exhibits 6(b)
and 6(a), respectively, to this Registration Statement and incorporated herein
by reference.
Item 29. Principal Underwriters
(a) Guardian Investor Services Corporation ("GISC") is the principal
underwriter of the Registrant's variable annuity contracts and it is also the
principal underwriter of shares of The Guardian Bond Fund, Inc.; The Guardian
Variable Contract Funds, Inc., a series fund consisting of The Guardian Stock
Fund, The Guardian VC Asset Allocation Fund, The Guardian VC High Yield Bond
Fund and The Guardian VC 500 Index Fund; The Guardian Cash Fund, Inc.; The Park
Avenue Portfolio, a series trust consisting of the following nine series: The
Guardian Cash Management Fund, The Guardian Park Avenue Fund, The Guardian Park
Avenue Small Cap Fund, The Guardian Investment Quality Bond Fund, The Guardian
High Yield Bond Fund, The Guardian Tax-Exempt Fund, The Guardian Asset
Allocation Fund, The Guardian Baillie Gifford International Fund and The
Guardian Baillie Gifford Emerging Markets Fund., and GIAC Funds, Inc. (formerly,
GBG Funds, Inc.) a series fund consisting of Baillie Gifford International Fund,
Baillie Gifford Emerging Markets Fund and The Guardian Small Cap Stock Fund. All
of the aforementioned funds and the series trust are registered with the SEC as
open-end management investment companies under the Investment Company Act of
1940, as amended ("1940 Act"). In addition, GISC is the distributor of variable
annuity and variable life insurance contracts currently offered by GIAC through
its separate accounts, The Guardian/Value Line Separate Account, The Guardian
Separate Account A, The Guardian Separate Account B, The Guardian Separate
Account C, The Guardian Separate Account D, The Guardian Separate Account E, The
Guardian Separate Account K and The Guardian Separate Account M, which are all
registered as unit investment trusts under the 1940 Act.
(b) The following is a list of directors and officers of GISC. The
principal business address of each person is 7 Hanover Square, New York, New
York 10004.
Name Position(s) with GISC
---- ---------------------
Bruce C. Long President & Director
Thomas G. Sorell Senior Vice President
Arthur V. Ferrara Director
Leo R. Futia Director
Peter L. Hutchings Director
Philip H. Dutter Director
Joseph D. Sargent Director
William C. Warren Director
Frank J. Jones Director
John B. Murphy Vice President
Frank L. Pepe Vice President & Controller
Richard T. Potter, Jr. Vice President and Counsel
Donald P. Sullivan, Jr. Vice President
C-5
<PAGE>
Name Position(s) with GISC
---- ---------------------
Earl C. Harry Treasurer
Joseph A. Caruso Vice President & Corporate Secretary
Item 30. Location of Accounts and Records
Most of the Registrant's accounts, books and other documents required to be
maintained by Section 31(a) of the 1940 Act and the rules promulgated thereunder
are maintained by GIAC, the depositor, at its Customer Service Office, 3900
Burgess Place, Bethlehem, Pennsylvania 18017. Documents constituting the
Registrant's corporate records are also maintained by GIAC but are located at
its Executive Office, 7 Hanover Square, New York, New York 10004.
Item 31. Management Services
None.
Item 32. Undertakings
(a) The Registrant hereby undertakes to include, as part of any application to
purchase a contract offered by the prospectus, a space that an applicant can
check to request a Statement of Additional Information.
(b) The Depositor, GIAC, hereby undertakes and 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 GIAC.
C-6
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant, The Guardian Separate Account D certifies that it meets
all of the requirements for effectiveness of this Post-Effective Amendment to
the Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933 and has duly caused this Post-Effective Amendment to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York and the State of New York on the 21st day of
April, 2000.
The Guardian Separate Account D
(Registrant)
By: THE GUARDIAN INSURANCE & ANNUITY
COMPANY, INC.
(Depositor)
By: /s/ Bruce C. Long
--------------------------------
Bruce C. Long
Executive Vice President
C-7
<PAGE>
As required by the Securities Act of 1933, this Registration Statement has
been signed by the following directors and principal officers of The Guardian
Insurance & Annuity Company, Inc. in the capacities and on the date indicated.
s/JOSEPH D. SARGENT * President, Chief Executive
- ------------------------------ Officer and Director
Joseph D. Sargent
(Principal Executive Officer)
s/FRANK J. JONES* Executive Vice President, Chief
- ------------------------------ Investment Officer and Director
Frank J. Jones
(Principal Financial Officer)
s/FRANK L. PEPE Vice President and Controller
- ------------------------------
Frank L. Pepe
(Principal Accounting Officer)
s/BRUCE C. LONG Executive Vice President
- ------------------------------ and Director
Bruce C. Long
s/ARTHUR V. FERRARA * Director
- ------------------------------
Arthur V. Ferrara
s/WILLIAM C. WARREN* Director
- ------------------------------
William C. Warren
s/EDWARD K. KANE* Executive Vice President
- ------------------------------ and Director
Edward K. Kane
s/LEO R. FUTIA* Director
- ------------------------------
Leo R. Futia
s/PHILIP H. DUTTER* Director
- ------------------------------
Philip H. Dutter
s/PETER L. HUTCHINGS*
- ------------------------------ Director
Peter L. Hutchings
By /s/ BRUCE C. LONG Date: April 21, 2000
--------------------------------
Bruce C. Long
Executive Vice President
* Pursuant to a Power of Attorney
C-8
<PAGE>
Exhibit Index
Number Description
- ------ -----------
10(a) Consent of PricewaterhouseCoopers LLP
13(a) Powers of Attorney
C-9
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Post-Effective
amendment No. 12 to the registration statement on Form N-4 (the "Registration
Statement") of our report dated February 16, 2000, relating to the financial
statements appearing in the December 31, 1999 Annual Report to Contractowners of
The Guardian Separate Account D.
We also consent to the use in this Post-Effective amendment No. 12 to the
registration statement on Form N-4 (the "Registration Statement") of our report
dated February 14, 2000 relating to the consolidated financial statements of
Guardian Insurance & Annuity Company, Inc., which appears in such Registration
Statement. We also consent to the reference to us under the headings "Experts"
and "Summary Financial Information about the Separate Account" in such
Registration Statement.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
New York, New York
April 21, 2000
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Joseph D. Sargent, whose
signature appears below, constitutes and appoints Bruce C. Long, Frank L. Pepe
and Richard T. Potter, Jr. each of them, his attorney-in-fact, each with the
power of substitution, for him in any and all capacities, to sign any
registration statements and amendments to registration statements for any and
all separate accounts established by The Guardian Insurance & Annuity Company,
Inc. which are currently in existance or which may be established in the future
and to file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or her substitutes,
may do or cause to be done by virtue hereof.
Dated September 23, 1999
/s/ Joseph D. Sargent
----------------------------
Joseph D. Sargent
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Arthur V. Ferrara, whose
signature appears below, constitutes and appoints Bruce C. Long, Frank L. Pepe
and Richard T. Potter, Jr. each of them, his attorney-in-fact, each with the
power of substitution, for him in any and all capacities, to sign any
registration statements and amendments to registration statements for any and
all separate accounts established by The Guardian Insurance & Annuity Company,
Inc. which are currently in existance or which may be established in the future
and to file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or her substitutes,
may do or cause to be done by virtue hereof.
Dated September 23, 1999
/s/ Arthur V. Ferrara
----------------------------
Arthur V. Ferrara
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Frank J. Jones, whose
signature appears below, constitutes and appoints Bruce C. Long, Frank L. Pepe
and Richard T. Potter, Jr. each of them, his attorney-in-fact, each with the
power of substitution, for him in any and all capacities, to sign any
registration statements and amendments to registration statements for any and
all separate accounts established by The Guardian Insurance & Annuity Company,
Inc. which are currently in existance or which may be established in the future
and to file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or her substitutes,
may do or cause to be done by virtue hereof.
Dated September 23, 1999
/s/ Frank J. Jones
----------------------------
Frank J. Jones
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Edward K. Kane, whose
signature appears below, constitutes and appoints Bruce C. Long, Frank L. Pepe
and Richard T. Potter, Jr. each of them, his attorney-in-fact, each with the
power of substitution, for him in any and all capacities, to sign any
registration statements and amendments to registration statements for any and
all separate accounts established by The Guardian Insurance & Annuity Company,
Inc. which are currently in existance or which may be established in the future
and to file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or her substitutes,
may do or cause to be done by virtue hereof.
Dated September 23, 1999
/s/ Edward K. Kane
----------------------------
Edward K. Kane
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Philip H. Dutter, whose
signature appears below, constitutes and appoints Bruce C. Long, Frank L. Pepe
and Richard T. Potter, Jr. each of them, his attorney-in-fact, each with the
power of substitution, for him in any and all capacities, to sign any
registration statements and amendments to registration statements for any and
all separate accounts established by The Guardian Insurance & Annuity Company,
Inc. which are currently in existance or which may be established in the future
and to file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or her substitutes,
may do or cause to be done by virtue hereof.
Dated September 23, 1999
/s/ Philip H. Dutter
----------------------------
Philip H. Dutter
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Leo R. Futia, whose
signature appears below, constitutes and appoints Bruce C. Long, Frank L. Pepe
and Richard T. Potter, Jr. each of them, his attorney-in-fact, each with the
power of substitution, for him in any and all capacities, to sign any
registration statements and amendments to registration statements for any and
all separate accounts established by The Guardian Insurance & Annuity Company,
Inc. which are currently in existance or which may be established in the future
and to file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or her substitutes,
may do or cause to be done by virtue hereof.
Dated September 23, 1999
/s/ Leo R. Futia
----------------------------
Leo R. Futia
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Peter L. Hutchings, whose
signature appears below, constitutes and appoints Bruce C. Long, Frank L. Pepe
and Richard T. Potter, Jr. each of them, his attorney-in-fact, each with the
power of substitution, for him in any and all capacities, to sign any
registration statements and amendments to registration statements for any and
all separate accounts established by The Guardian Insurance & Annuity Company,
Inc. which are currently in existance or which may be established in the future
and to file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or her substitutes,
may do or cause to be done by virtue hereof.
Dated September 23, 1999
/s/ Peter L. Hutchings
----------------------------
Peter L. Hutchings
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that William C. Warren, whose
signature appears below, constitutes and appoints Bruce C. Long, Frank L. Pepe
and Richard T. Potter, Jr. each of them, his attorney-in-fact, each with the
power of substitution, for him in any and all capacities, to sign any
registration statements and amendments to registration statements for any and
all separate accounts established by The Guardian Insurance & Annuity Company,
Inc. which are currently in existance or which may be established in the future
and to file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or her substitutes,
may do or cause to be done by virtue hereof.
Dated September 23, 1999
/s/ William C. Warren
----------------------------
William C. Warren
