<PAGE> 1
As filed with the Securities and Exchange Commission on February 25, 1998
Registration No. 33-46217
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 7
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 8
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT A
(FORMERLY, FNAL VARIABLE ACCOUNT)
(Exact name of Registrant)
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
(FORMERLY, FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY)
(Name of Depositor)
Corporate Center at Rye
555 Theodore Fremd Avenue, Suite C-209
Rye, New York 10580-9966
(Address of Depositor's Principal Executive Offices)
(914) 921-1020
(Depositor's Telephone Number Including Area Code)
Copy to:
Joseph Scott J. Sumner Jones, Esq.
President Jones & Blouch, L.L.P.
The Manufacturers Life Insurance 1025 Thomas Jefferson Street N.W.
Company of New York Suite 405 West
Corporate Center at Rye Washington, D.C. 20007-0805
555 Theodore Fremd Avenue
Suite C-209
Rye, New York 10580-9966
(Name and Address of Agent for Service)
-----------------------
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on [date] pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)
[ ] 75 days after filing pursuant to paragraph (a)
[X] on May 1, 1998 pursuant to paragraph (a)(1) of Rule 485
<PAGE> 2
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
CROSS REFERENCE TO ITEMS REQUIRED BY FORM N-4
N-4 Item
Part A Caption in Prospectus
- ------ ---------------------
1.................................. Cover Page
2.................................. Special Terms
3.................................. Summary
4.................................. Performance Data;
Financial Statements
5.................................. General Information about The
Manufacturers Life Insurance Company of
New York The Manufacturers Life
Insurance Company of New York Separate
Account A Manufacturers Investment Trust
6.................................. Charges and Deductions; Withdrawal
Charge; Administration Fees; Mortality
and Expense Risk Charge; Taxes; Appendix
A; Appendix B
7.................................. Accumulation Provisions; Company
Approval; Purchase Payments;
Accumulation Units; Net Investment
Factor; Transfers Among Investment
Options; Special Transfer Services -
Dollar Cost Averaging; Asset Rebalancing
Program; Withdrawals; Special Withdrawal
Services - Systematic Withdrawal Plan;
Contract Owner Inquiries; Other Contract
Provisions; Ownership; Beneficiary;
Modification;
8.................................. Annuity Provisions; General; Annuity
Options; Determination of Amount of the
First Variable Annuity Payment; Annuity
Units and the Deter- mination of
Subsequent Variable Annuity Payments;
Transfers After Maturity Date
9.................................. Accumulation Provisions; Death Benefit
Before Maturity Date; Annuity
Provisions; Death Benefit After Maturity
Date
10................................. Accumulation Provisions; Purchase
Payments; Accumula- tion Units; Value of
Accumula-
<PAGE> 3
tion Units; Net Investment Factor;
Distribution of Contracts
11 ............................... Withdrawals; Accumula- tion Provisions;
Purchase Payments; Other Contract
Provisions; Ten Day Right to Review
12................................. Federal Tax Matters; Intro- duction; The
Company's Tax Status; Taxation of
Annuities in General; Diversification
Requirements; Qualified Retirement Plans
13............................... Legal Proceedings
14............................... Statement of Additional
Information - Table of Contents
Caption in Statement of
Part B Additional Information
- ------ ----------------------
15................................. Cover Page
16................................. Table of Contents
17................................. General History and Information.
18................................. Services-Accountants;
Services-Servicing Agent
19................................. Not Applicable
20................................. Principal Underwriter
21................................. Performance Data
22................................. Not Applicable
23................................. Financial Statements
<PAGE> 4
PART A
INFORMATION REQUIRED IN A PROSPECTUS
<PAGE> 5
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
Annuity Service Office and Mailing Address
Corporate Center at Rye
555 Theodore Fremd Avenue, Suite C-209
Rye, New York 10580-9966
- --------------------------------------------------------------------------------
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT A
- --------------------------------------------------------------------------------
OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
FLEXIBLE PURCHASE PAYMENT INDIVIDUAL DEFERRED
COMBINATION FIXED AND VARIABLE ANNUITY CONTRACT
NON-PARTICIPATING
This Prospectus describes a flexible purchase payment individual
deferred combination fixed and variable annuity contract (the "contract") issued
by The Manufacturers Life Insurance Company of New York, formerly First North
American Life Assurance Company (the "Company"), a stock life insurance company
organized under the laws of the state of New York. The contract is designed for
use in connection with retirement plans which may or may not qualify for special
Federal income tax treatment.
The contract provides for the accumulation of contract values and the
payment of annuity benefits on a variable and/or fixed basis. The contract
offers thirty-eight investment options: thirty-five variable and three fixed.
The variable portion of the contract value and annuity payments, if selected on
a variable basis, will vary according to the investment performance of the
sub-accounts of The Manufacturers Life Insurance Company of New York Separate
Account A, formerly the FNAL Variable Account (the "Variable Account"). The
Variable Account is a separate account established by the Company. Purchase
payments and earnings on those purchase payments may be allocated to and
transferred among one or more of thirty-five sub-accounts of the Variable
Account. The assets of each sub-account are invested in shares of the
Manufacturers Investment Trust, formerly NASL Series Trust (the "Trust"), a
mutual fund having an investment portfolio for each sub-account of the Variable
Account (see the accompanying Prospectus of the Trust). Fixed contract values
may be accumulated under one, three and six year fixed account investment
options. Except as specifically noted herein and as set forth under the caption
"FIXED ACCOUNT INVESTMENT OPTIONS" below, this Prospectus describes only the
variable portion of the contract.
Additional information about the variable portion of the contract and
Variable Account is contained in a Statement of Additional Information, dated
the same date as this Prospectus, which has been filed with the Securities and
Exchange Commission (the "SEC") and is incorporated herein by reference. The
Statement of Additional Information is available without charge upon request by
writing the Company at the above address or telephoning (914) 921-1020. In
addition, the SEC maintains a Web site (http://www.sec.gov) that contains the
Statement of Additional Information, material incorporated by reference, and
other information regarding registrants that file electronically with the SEC.
The table of contents for the Statement of Additional Information is included on
page XX of this Prospectus.
SHARES OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY.
PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE. IT
CONTAINS INFORMATION ABOUT THE VARIABLE ACCOUNT AND THE VARIABLE PORTION OF THE
CONTRACT THAT A PROSPECTIVE PURCHASER SHOULD KNOW BEFORE INVESTING.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC NOR HAS THE
SEC PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is May 1, 1998.
V9.PRO598
<PAGE> 6
TABLE OF CONTENTS
SPECIAL TERMS.................................................................3
SUMMARY ......................................................................5
GENERAL INFORMATION ABOUT THE MANUFACTURERS LIFE INSURANCE COMPANY
OF NEW YORK, THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT A AND MANUFACTURERS INVESTMENT TRUST .......................13
The Manufacturers Life Insurance Company of New York......................13
The Manufacturers Life Insurance Company of New York
Separate Account A .....................................................13
Manufacturers Investment Trust............................................13
DESCRIPTION OF THE CONTRACT..................................................18
ACCUMULATION PROVISIONS ..................................................18
Purchase Payments ...................................................18
Accumulation Units ..................................................19
Value of Accumulation Units .........................................19
Net Investment Factor ...............................................19
Transfers Among Investment Options ..................................20
Maximum Number of Investment Options.................................20
Special Transfer Services - Dollar Cost Averaging....................20
Asset Rebalancing Program............................................20
Withdrawals..........................................................21
Special Withdrawal Services - Systematic Withdrawal Plan.............22
Loans................................................................22
Death Benefit Before Maturity Date...................................23
ANNUITY PROVISIONS .......................................................24
General .............................................................24
Annuity Options .....................................................24
Determination of Amount of the First Variable Annuity Payment........25
Annuity Units and the Determination of
Subsequent Variable Annuity Payments ................................26
Transfers After Maturity Date .......................................26
Death Benefit on or After Maturity Date..............................26
OTHER CONTRACT PROVISIONS ................................................26
Ten Day Right to Review .............................................26
Ownership ...........................................................27
Beneficiary .........................................................27
Modification ........................................................27
Company Approval ....................................................27
Misstatement and Proof of Age, Sex or Survival.......................27
FIXED ACCOUNT INVESTMENT OPTIONS..........................................27
CHARGES AND DEDUCTIONS ......................................................30
Withdrawal Charges........................................................30
Administration Fees.......................................................31
Mortality and Expense Risk Charge ........................................31
Taxes ....................................................................32
FEDERAL TAX MATTERS .........................................................32
INTRODUCTION .............................................................32
THE COMPANY'S TAX STATUS .................................................32
TAXATION OF ANNUITIES IN GENERAL .........................................32
Tax Deferral During Accumulation Period..............................32
Taxation of Partial and Full Withdrawals.............................34
Taxation of Annuity Payments.........................................34
Taxation of Death Benefit Proceeds...................................34
Penalty Tax on Premature Distributions...............................35
Aggregation of Contracts.............................................35
QUALIFIED RETIREMENT PLANS...................................................35
Qualified Plan Types.................................................36
Direct Rollovers.....................................................37
FEDERAL INCOME TAX WITHHOLDING............................................38
GENERAL MATTERS..............................................................38
Performance Data..........................................................38
Financial Statements......................................................38
Asset Allocation and Timing Services......................................38
Distribution of Contracts ................................................39
Contract Owner Inquiries..................................................39
Confirmation Statements...................................................39
Legal Proceedings ........................................................39
Other Information ........................................................39
STATEMENT OF ADDITIONAL INFORMATION -
Table of Contents..........................................................39
APPENDIX A
Examples of Calculation of Withdrawal Charge..............................40
<PAGE> 7
SPECIAL TERMS
The following terms as used in this Prospectus have the indicated
meanings:
Accumulation Unit - A unit of measure that is used to calculate the
value of the variable portion of the contract before the maturity date.
Annuitant - Any natural person or persons whose life is used to
determine the duration of annuity payments involving life contingencies. If the
contract owner names more than one person as an "Annuitant," the second person
named shall be referred to as "Co-Annuitant." The "Annuitant" is as specified in
the application, unless changed. All provisions based on the date of the death
of the "Annuitant" will be based on the date of death of the last to survive of
the "Annuitant" or "Co-Annuitant." In the event of the death of the "Annuitant"
or "Co-Annuitant" who is also a contract owner, a death benefit is payable under
the Death of Owner provision. The "Annuitant" and "Co-Annuitant" will be
referred to collectively as "Annuitant."
Annuity Option - The method selected by the contract owner (or as
specified in the contract if no selection is made) for annuity payments made by
the Company.
Annuity Service Office - The service office of the Company is Corporate
Center at Rye, 555 Theodore Fremd Avenue, Suite C-209, Rye, New York 10580-9966.
Annuity Unit - A unit of measure that is used after the maturity date
to calculate variable annuity payments.
Beneficiary - The person, persons or entity entitled to the death
benefit under the contract upon the death of the annuitant. The beneficiary is
as specified in the application, unless changed (see also "Successor Owner").
Contingent Beneficiary - The person, persons or entity to become the
beneficiary if the beneficiary is not alive. The contingent beneficiary is as
specified in the application, unless changed.
Contract Anniversary - The anniversary of the contract date.
Contract Date - The date of issue of the contract.
Contract Value - The total of the investment account values and, if
applicable, any amount in the loan account attributable to the contract.
Contract Year - The period of twelve consecutive months beginning on
the contract date or any anniversary thereof.
Debt - Any amounts in the loan account attributable to the contract
plus any accrued loan interest. The loan provision is applicable to certain
qualified contracts only.
Due Proof of Death - Due Proof of Death is required upon the death of
the Annuitant or the Owner. One of the following must be received at the Annuity
Service Office within one year of the date of death:
(a) A certified copy of a death certificate;
(b) A certified copy of a decree of a court of competent jurisdiction
as to the finding of death; or
(c) Any other proof satisfactory to us.
Death benefits will be paid within 7 days of receipt of due proof of death and
all required claim forms by the Annuity Service Office.
Fixed Annuity - An annuity option with payments which are predetermined
and guaranteed as to dollar amount.
General Account - All the assets of the Company other than assets in
separate accounts.
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Investment Account - An account established by the Company which
represents a contract owner's interest in an investment option prior to the
maturity date.
Investment Account Value - The value of a contract owner's investment
in an investment account.
Investment Options - The investment choices available to contract
owners. There are thirty-five variable and three fixed investment options under
the contract.
Loan Account - The portion of the general account that is used for
collateral when a loan is taken.
Market Value Charge - A charge that may be assessed if amounts are
withdrawn or transferred from the three or six year investment options prior to
the end of the interest rate guarantee period.
Maturity Date - The date on which annuity benefits commence. The
maturity date is the date specified on the contract specifications page and is
generally the first day of the month following the annuitant's 90th birthday.
Net Purchase Payment - The purchase payment less the amount of premium
tax, if any.
Non-Qualified Contracts - Contracts which are not issued under
qualified plans.
Owner or Contract Owner - The person, persons (co-owner) or entity
entitled to all of the ownership rights under the contract. The owner has the
legal right to make all changes in contractual designations where specifically
permitted by the contract. The owner is as specified in the application, unless
changed.
Portfolio or Trust Portfolio - A separate investment portfolio of the
Trust, a mutual fund in which the Variable Account invests, or of any successor
mutual fund.
Purchase Payment - An amount paid by a contract owner to the Company as
consideration for the benefits provided by the contract.
Qualified Contracts - Contracts issued under qualified plans.
Qualified Plans - Retirement plans which receive favorable tax
treatment under Section 401, 403, 408 or 408A of the Internal Revenue Code of
1986, as amended.
Separate Account - A segregated account of the Company that is not
commingled with the Company's general assets and obligations.
Sub-Account(s) - One or more of the sub-accounts of the Variable
Account. Each sub-account is invested in shares of a different Trust portfolio.
Successor Owner - The person, persons or entity to become the owner if
the owner dies prior to the Maturity Date. The successor owner is as specified
in the application, unless changed. If no Successor Owner is designated or the
Successor Owner dies before the Owner, the Owner's estate is the Successor Owner
(see also "Beneficiary").
Valuation Date - Any date on which the New York Stock Exchange is open
for business and the net asset value of a Trust portfolio is determined.
Valuation Period - Any period from one valuation date to the next,
measured from the time on each such date that the net asset value of each
portfolio is determined.
Variable Account - The Variable Account, which is a separate account of
the Company.
Variable Annuity - An annuity option with payments which: (1) are not
predetermined or guaranteed as to dollar amount, and (2) vary in relation to the
investment experience of one or more specified sub-accounts.
3
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SUMMARY
The Contract. The contract offered by this Prospectus is flexible
purchase payment individual deferred combination fixed and variable annuity
contract. The contract provides for the accumulation of contract values and the
payment of annuity benefits on a variable and/or fixed basis. Except as
specifically noted herein and as set forth under the caption "FIXED ACCOUNT
INVESTMENT OPTIONS" below, this Prospectus describes only the variable portion
of the contract.
Retirement Plans. The contract may be issued pursuant to either
non-qualified retirement plans or plans qualifying for special income tax
treatment under the Internal Revenue Code of 1986, as amended (the "Code"), such
as individual retirement accounts and annuities, including Roth IRAs, pension
and profit-sharing plans for corporations and sole proprietorships/partnerships
("H.R. 10" and "Keogh" plans), and tax-sheltered annuities for tax-exempt
organizations (see "QUALIFIED RETIREMENT PLANS").
Purchase Payments. A contract may be issued upon the making of an
initial purchase payment of as little as $30. A minimum of $300 must be paid
during the first contract year. Purchase payments may be made at any time,
except that if a purchase payment would cause the contract value to exceed
$1,000,000, or the contract value already exceeds $1,000,000, additional
purchase payments will be accepted only with the prior approval of the Company
(see "PURCHASE PAYMENTS").
Investment Options. Purchase payments may be allocated among the
thirty-eight investment options currently available under the contract:
thirty-five variable account investment options and three fixed account
investment options. Due to current administrative capabilities, a contract owner
is limited to a maximum of 17 investment options (including all fixed account
investment options) during the period prior to the maturity date of the
contract. The thirty-five variable account investment options are the
thirty-five sub-accounts of the Variable Account, a separate account established
by the Company. The sub-accounts invest in corresponding portfolios of the
Trust: Pacific Rim Emerging Markets Trust, Science and Technology Trust,
International Small Cap Trust, Emerging Growth Trust, Pilgrim Baxter Growth
Trust, Small/Mid Cap Trust, International Stock Trust, Worldwide Growth Trust,
Global Equity Trust, Small Company Value Trust, Equity Trust, Growth Trust,
Quantitative Equity Trust, Blue Chip Growth Trust, Real Estate Securities Trust,
Value Trust, International Growth and Income Trust, Growth and Income Trust,
Equity-Income Trust, Balanced Trust, Aggressive Asset Allocation Trust, High
Yield Trust, Moderate Asset Allocation Trust, Conservative Asset Allocation
Trust, Strategic Bond Trust, Global Government Bond Trust, Capital Growth Bond
Trust, Investment Quality Bond Trust, U.S. Government Securities Trust, Money
Market Trust, Lifestyle Aggressive 1000 Trust, Lifestyle Growth 820 Trust,
Lifestyle Balanced 640 Trust, Lifestyle Moderate 460 Trust and the Lifestyle
Conservative 280 Trust (see the accompanying Prospectus of the Trust). The
portion of the contract value in the Variable Account and monthly annuity
payments, if selected on a variable basis, will reflect the investment
performance of the sub-accounts selected (see "THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NEW YORK SEPARATE ACCOUNT A"). Purchase payments may also be
allocated to the three fixed account investment options: one, three and six year
guaranteed investment accounts. Under the fixed account investment options, the
Company guarantees the principal value of purchase payments and the rate of
interest credited to the investment account for the term of the guarantee
period. The portion of the contract value in the fixed account investment
options and monthly annuity payments, if selected on a fixed basis, will reflect
such interest and principal guarantees (see "FIXED ACCOUNT INVESTMENT OPTIONS").
Subject to certain regulatory limitations, the Company may elect to add,
subtract or substitute investment options.
Transfers. Prior to the maturity date, amounts may be transferred among
the variable account investment options and from the variable account investment
options to the fixed account investment options without charge. In addition,
amounts may be transferred prior to the maturity date among the fixed account
investment options and from the fixed account investment options to the variable
account investment options, subject to a one year holding period requirement
(with certain exceptions) and a market value charge which may apply to such a
transfer (see "FIXED ACCOUNT INVESTMENT OPTIONS"). After the maturity date,
transfers are not permitted from variable annuity options to fixed annuity
options or from fixed annuity options to variable annuity options. Transfers
from any investment account must be at least $300 or, if less, the entire
balance in the investment account. If, after the transfer the amount remaining
in the investment account of the contract from which the transfer is made is
less than $100, then we will transfer the entire amount instead of the requested
amount. The Company may impose certain additional limitations
4
<PAGE> 10
on transfers (see "TRANSFERS AMONG INVESTMENT OPTIONS" and "TRANSFERS AFTER
MATURITY DATE"). Transfer privileges may also be used under a special service
offered by the Company to dollar cost average an investment in the contract (see
"SPECIAL TRANSFER SERVICES - DOLLAR COST AVERAGING").
Withdrawals. Prior to the earlier of the maturity date or the death of
the annuitant, the contract owner may withdraw all or a portion of the contract
value. The amount withdrawn from any investment account must be at least $300
or, if less, the entire balance of the investment account. If a partial
withdrawal plus any applicable withdrawal charge would reduce the contract value
to less than $300, the withdrawal request will be treated as a request to
withdraw the entire contract value. A withdrawal charge and an administration
fee may be imposed (see "WITHDRAWALS"). A withdrawal may be subject to income
tax and a 10% penalty tax (see "FEDERAL TAX MATTERS"). Withdrawal privileges may
also be exercised pursuant to the Company's systematic withdrawal plan service
(see "SPECIAL WITHDRAWAL SERVICES - SYSTEMATIC WITHDRAWAL PLAN").
Loans. The Company offers a loan privilege to owners of contracts
issued in connection with Section 403(b) qualified plans that are not subject to
Title I of ERISA. Owners of such contracts may obtain loans using the contract
as the only security for the loan. The effective cost of a contract loan is 2%
per year of the amount borrowed (see "LOANS").
Confirmation Statements. Owners will be sent confirmation statements
for certain transactions in their account. Owners should carefully review these
statements to verify their accuracy. Any mistakes should immediately be reported
to the Company's Annuity Service Office. If the owner fails to notify the
Company's Annuity Service Office of any mistake within 60 days of the mailing of
the confirmation statement, the owner will be deemed to have ratified the
transaction.
Death Benefit Before Maturity Date. Generally, if the annuitant dies
before the maturity date, the Company will pay to the beneficiary the minimum
death benefit less any debt. During the first contract year, the minimum death
benefit is the greater of (a) the contract value on the date due proof of death
and all required claim forms are received at the Company's Annuity Service
Office, or (b) the sum of all purchase payments made, less any amount deducted
in connection with partial withdrawals. Except as provided below, during any
subsequent contract year, the minimum death benefit will be the greater of (a)
the contract value on the date due proof of death and all required claim forms
are received at the Company's Annuity Service Office, or (b) the minimum death
benefit determined in accordance with these provisions as of the last day of the
previous contract year plus any purchase payments made and less any amount
deducted in connection with partial withdrawals since then. If the annuitant
dies after the first of the month following his or her 85th birthday, the
minimum death benefit is the greater of: (a) the contract value on the date due
proof of death and all required claim forms are received at the Company's
Annuity Service Office, or (b) the excess of the sum of all purchase payments
less the sum of any amounts deducted in connection with partial withdrawals. In
certain other cases, an amount equal to the owner's interest will be distributed
when the owner dies before the maturity date (see "DEATH BENEFIT BEFORE MATURITY
DATE"). If the annuitant dies after the maturity date and annuity payments have
been selected based on an annuity option providing for payments for a guaranteed
period, the Company will make the remaining guaranteed payments to the
beneficiary (see "DEATH BENEFIT ON OR AFTER MATURITY DATE").
Annuity Payments. The Company offers a variety of fixed and variable
annuity options. Periodic annuity payments will begin on the maturity date. The
contract owner selects the maturity date, frequency of payment and annuity
option (see "ANNUITY PROVISIONS").
Ten Day Review. Within 10 days of receipt of a contract, the contract
owner may cancel the contract by returning it to the Company (see "TEN DAY RIGHT
TO REVIEW").
Charges and Deductions. The following table and Example are designed to
assist contract owners in understanding the various costs and expenses that
contract owners bear directly and indirectly. The table reflects expenses of the
Variable Account and the Trust. The items listed under "Contract Owner
Transaction Expenses" and "Separate Account Annual Expenses" are more completely
described in this Prospectus (see "CHARGES AND DEDUCTIONS"). The items listed
under "Trust Annual Expenses" are described in detail in the accompanying Trust
Prospectus to which reference should be made.
5
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CONTRACT OWNER TRANSACTION EXPENSES
DEFERRED SALES LOAD (as percentage of purchase payments)
<TABLE>
<CAPTION>
NUMBER OF COMPLETE YEARS WITHDRAWAL
PURCHASE PAYMENT IN CHARGE
CONTRACT PERCENTAGE
-------- ----------
<C> <C>
0 6%
1 6%
2 5%
3 4%
4 3%
5 2%
6+ 0%
ANNUAL CONTRACT FEE..............................$30
SEPARATE ACCOUNT ANNUAL EXPENSES (as a percentage of average account value)
Mortality and expense risk fees.................1.25%
Administration fee - asset based...............0.15%
Total Separate Account Annual Expenses .........1.40%
</TABLE>
TRUST ANNUAL EXPENSES (as a percentage of Trust average net assets)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL TRUST
TRUST PORTFOLIO FEES EXPENSES ANNUAL EXPENSES
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Pacific Rim Emerging Markets........ 0.850% 0.570% 1.420%
Science and Technology.............. 1.100% 0.160% 1.260%
International Small Cap............. 1.100% 0.210% 1.310%
Emerging Growth..................... 1.050% 0.060% 1.110%
Pilgrim Baxter Growth............... 1.050% 0.130% 1.180%
Small/Mid Cap....................... 1.000% 0.050% 1.050%
International Stock................. 1.050% 0.330% 1.380%
Worldwide Growth.................... 1.000% 0.320% 1.320%
Global Equity....................... 0.900% 0.110% 1.010%
Small Company Value................. 1.050% 0.100%* 1.150%
Equity.............................. 0.750% 0.050% 0.800%
Growth ............................. 0.850% 0.100% 1.950%
Quantitative Equity................. 0.700% 0.070% 0.770%
Blue Chip Growth.................... 0.925% 0.050% 0.975%
Real Estate Securities.............. 0.700% 0.070% 0.770%
Value............................... 0.800% 0.160% 0.960%
International Growth and Income..... 0.950% 0.170% 1.120%
Growth and Income................... 0.750% 0.040% 0.790%
Equity Income....................... 0.800% 0.050% 0.850%
Balanced ........................... 0.800% 0.080% 0.880%
Aggressive Asset Allocation......... 0.750% 0.150% 0.900%
High Yield.......................... 0.775% 0.110% 0.885%
Moderate Asset Allocation........... 0.750% 0.100% 0.850%
Conservative Asset Allocation....... 0.750% 0.140% 0.890%
Strategic Bond...................... 0.775% 0.100% 0.875%
Global Government Bond.............. 0.800% 0.130% 0.930%
Capital Growth Bond................. 0.650% 0.080% 0.730%
Investment Quality Bond............. 0.650% 0.090% 0.740%
</TABLE>
6
<PAGE> 12
<TABLE>
<S> <C> <C> <C>
U.S. Government Securities.......... 0.650% 0.070% 0.720%
Money Market ....................... 0.500% 0.040% 0.540%
</TABLE>
7
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<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL TRUST
TRUST PORTFOLIO FEES EXPENSES ANNUAL EXPENSES
<S> <C> <C> <C> <C>
Lifestyle Aggressive 1000#.......... 0% 1.116%** 1.116%
Lifestyle Growth 820#............... 0% 1.048%** 1.048%
Lifestyle Balanced 640#............ 0% 0.944%** 0.944%
Lifestyle Moderate 460#............. 0% 0.850%** 0.850%
Lifestyle Conservative 260#......... 0% 0.708%** 0.708%
</TABLE>
#Each Lifestyle Trust will invest in shares of the Underlying Portfolios.
Therefore, each Lifestyle Trust will, in addition to its own expenses, such as
certain Other Expenses, bear its pro rata share of the fees and expenses
incurred by the Underlying Portfolios and the investment return of each
Lifestyle Trust will be net of the Underlying Portfolio expenses.
*Based on estimates of payments to be made during the current fiscal year.
**Reflects expenses of the Underlying Portfolios. Manufacturers Securities
Services, LLC has voluntarily agreed to pay the expenses of each Lifestyle Trust
(excluding the expenses of the Underlying Portfolios). This voluntary expense
reimbursement may be terminated at any time. If such expense reimbursement was
not in effect, Total Trust Annual Expenses would be .04% higher (based on
expenses of the Lifestyle Trusts for the fiscal year ended December 31, 1997) as
noted in the chart below:.
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL TRUST ANNUAL
FEES EXPENSES EXPENSES
<S> <C> <C> <C>
Lifestyle Aggressive 1000 Trust 0% 1.156% 1.156%
Lifestyle Growth 820 Trust 0% 1.088% 1.088%
Lifestyle Balanced 640 Trust 0% 0.984% 0.984%
Lifestyle Moderate 460 Trust 0% 0.890% 0.890%
Lifestyle Conservative 280 Trust 0% 0.748% 0.748%
</TABLE>
EXAMPLE
A contract owner would pay the following expenses on a $1,000 investment,
assuming 5% annual return on assets, if the contract owner surrendered the
contract at the end of the applicable time period:
<TABLE>
<CAPTION>
TRUST PORTFOLIO 1 YEAR 3 YEARS 5 YEARS** 10 YEARS**
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets....... $84 $138 $182 $321
Science & Technology............... 83 133 174 305
International Small Cap............ 83 134 177 310
Emerging Growth.................... 81 129 167 291
Pilgrim Baxter Growth.............. 82 131 170 298
Small/Mid Cap...................... 81 127 164 285
International Stock................ 84 136 180 317
Worldwide Growth................... 83 135 177 311
Global Equity...................... 81 126 162 281
Small Company Value................ 82 130
Equity............................. 79 120 151 260
Growth ............................ 80 124 159 275
Quantitative Equity................ 78 119 150 257
Blue Chip Growth................... 80 125 160 277
Real Estate Securities............. 78 119 150 257
Value.............................. 80 125 159 276
</TABLE>
8
<PAGE> 14
<TABLE>
<S> <C> <C> <C> <C>
International Growth and Income.... 82 129 167 292
Growth and Income.................. 78 120 151 259
Equity Income ..................... 79 121 154 265
Balanced........................... 79 122 155 268
Aggressive Asset Allocation........ 80 123 156 270
High Yield......................... 79 122 155 268
Moderate Asset Allocation.......... 79 121 154 265
Conservative Asset Allocation...... 79 123 156 269
Strategic Bond..................... 79 122 155 267
Global Government Bond............. 80 124 158 273
Capital Growth Bond................ 78 118 148 253
Investment Quality Bond............ 78 119 148 254
U.S. Government Securities........ 78 118 147 252
Money Market....................... 76 112 138 233
Lifestyle Aggressive 1000*......... 82 129 167 291
Lifestyle Growth 820*.............. 81 127 164 285
Lifestyle Balanced 640*............ 80 124 158 274
Lifestyle Moderate 460*............ 79 121 154 265
Lifestyle Conservative 280*........ 78 117 146 250
</TABLE>
*The Example of Expenses for the Lifestyle Trusts is calculated using the
midpoint of the minimum and maximum fees set forth under Annual Operating
Expenses.
** The Example of Expenses for the Small Company Trust contains figures for only
1 and 3 years, since it is a newly created portfolio.
9
<PAGE> 15
A contract owner would pay the following expenses on a $1,000 investment,
assuming 5% annual return on assets, if the contract owner annuitized as
provided in the contract or did not surrender the contract at the end of the
applicable time period:
<TABLE>
<CAPTION>
TRUST PORTFOLIO 1 YEAR 3 YEARS 5 YEARS* 10 YEARS*
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets........ $29 $89 $152 $321
Science & Technology................ 28 85 144 305
International Small Cap............. 28 86 147 310
Emerging Growth..................... 26 80 137 291
Pilgrim Baxter Growth............... 27 82 140 298
Small/Mid Cap....................... 25 78 134 285
International Stock................. 29 88 150 317
Worldwide Growth.................... 28 86 147 311
Global Equity....................... 25 77 132 281
Small Company Value................. 26 81 139 295
Equity ............................. 23 71 121 260
Growth.............................. 24 75 129 275
Quantitative Equity................. 23 70 120 257
Blue Chip Growth.................... 25 76 130 277
Real Estate Securities.............. 23 70 120 257
Value............................... 25 76 129 276
International Growth and Income..... 26 80 137 292
Growth and Income................... 23 70 121 259
Equity Income....................... 23 72 124 265
Balanced ........................... 24 73 125 268
Aggressive Asset Allocation......... 24 74 126 270
High Yield.......................... 24 73 125 268
Moderate Asset Allocation........... 23 72 124 265
Conservative Asset Allocation....... 24 73 126 269
Strategic Bond...................... 24 73 125 267
Global Government Bond.............. 24 75 128 273
Capital Growth...................... 22 69 118 253
Investment Quality Bond............. 22 69 118 254
U.S. Government Securities.......... 22 68 117 252
Money Market........................ 20 63 108 233
Lifestyle Aggressive 1000........... 26 80 137 291
Lifestyle Growth 820................ 25 78 134 285
Lifestyle Balanced 640.............. 24 75 128 274
Lifestyle Moderate 460.............. 23 72 124 265
Lifestyle Conservative 280.......... 22 68 116 250
</TABLE>
* The Example of Expenses for the Small Company Value Trust contains figures for
only 1 and 3 years, since it is a newly created portfolio.
For purposes of presenting the foregoing Example, the Company has made
certain assumptions mandated by the SEC. The Company has assumed that, where
applicable, the maximum sales load is deducted, that there are no transfers or
other transactions and that the "Other Expenses" line item under "Trust Annual
Expenses" will remain the same. Such assumptions, which are mandated by the SEC
in an attempt to provide prospective investors with standardized data with which
to compare various annuity contracts, do not take into account certain features
of the contract and prospective changes in the size of the Trust which may
operate to change the expenses borne by contract owners. Consequently, the
amounts listed in the Example above should not be considered a representation of
past or future expenses and actual expenses borne by contract owners may be
greater or lesser than those shown.
10
<PAGE> 16
In addition, for purposes of calculating the values in the above
Example, the Company has translated the $30 annual administration charge listed
under "Annual Contract Fee" to a .086% annual asset charge based on the $35,000
approximate average size. So translated, such charge would be higher for smaller
contracts and lower for larger contracts.
The above summary is qualified in its entirety by the detailed
information appearing elsewhere in this Prospectus and Statement of Additional
Information and the Prospectus and Statement of Additional Information for the
Trust, to which reference should be made. This Prospectus generally describes
only the variable aspects of the contract, except where fixed aspects are
specifically mentioned.
TABLE OF ACCUMULATION UNIT VALUES
<TABLE>
<CAPTION>
UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS AT
SUB-ACCOUNT START OF YEAR* END OF YEAR END OF YEAR
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets
1997 .............................. $12.500000
Science & Technology
1997 .............................. $12.500000
International Small Cap
1996 .............................. $12.500000 $13.493094 365,317.719
1997 ..............................
Emerging Growth
1997 .............................. $12.500000
Pilgrim Baxter Growth
1997 .............................. $12.500000
Small/Mid Cap
1996 .............................. $12.500000 $13.215952 746,253.254
1997 ..............................
International Stock
1997 .............................. $12.500000
Worldwide Growth
1997 .............................. $12.500000
Global Equity
1992 .............................. $12.003976 $11.790318 21,242.936
1993 .............................. 11.790318 15.450341 701,425.817
1994 .............................. 15.450341 15.500933 1,612,831.628
1995 .............................. 15.500933 16.459655 1,679,042.917
1996 .............................. 16.495655 18.276450 1,955,863.791
1997 ..............................
Equity
1992 .............................. $12.386657 $13.143309 17,805.389
1993 .............................. 13.143309 15.075040 532,797.733
1994 .............................. 15.075040 14.786831 1,212,483.594
1995 .............................. 14.786831 20.821819 1,680,197.930
1996 .............................. 20.821819 24.664354 2,439,815.649
1997 ..............................
Growth
1996 .............................. $12.500000 $13.727312 140,312.944
1997 ..............................
Quantitative Equity
1997 .............................. $12.500000
Blue Chip Growth
1992 .............................. $10.000000 $ 9.923524 105,743.980
1993 .............................. 9.923524 9.413546 605,012.548
</TABLE>
11
<PAGE> 17
<TABLE>
<S> <C> <C> <C> <C>
1994 .............................. 9.413546 8.837480 1,049,124.977
1995 .............................. 8.837480 11.026969 1,318,608.463
1996 .............................. 11.026969 13.688523 1,623,697.582
1997 ..............................
Real Estate Securities
1997 .............................. $12.500000
Value
1997 .............................. $12.500000
International Growth and Income
1995 .............................. $10.000000 $10.554228 419,354.257
1996 .............................. 10.554228 11.718276 1,080,586.010
1997 ..............................
Growth and Income
1992 .............................. $10.942947 $11.927411 33,716.020
1993 .............................. 11.927411 12.893007 753,734.211
1994 .............................. 12.893007 13.076664 1,298,075.564
1995 .............................. 13.076664 16.660889 1,702,726.488
1996 .............................. 16.660889 20.178770 2,601,497.610
1997 ..............................
Equity-Income
1993 .............................. $10.000000 $11.175534 1,087,538.574
1994 .............................. 11.175534 11.107620 2,147,059.046
1995 .............................. 11.107620 13.548849 2,700,623.434
1996 .............................. 13.548849 16.011513 3,362,755.333
1997 ..............................
Balanced
1997 .............................. $12.500000
Aggressive Asset Allocation
1992 .............................. $10.880194 $11.623893 6,314.930
1993 .............................. 11.623893 12.642493 220,581.039
1994 .............................. 12.642493 12.381395 395,570.370
1995 .............................. 12.381395 14.990551 463,740.240
1996 .............................. 14.990551 16.701647 600,271.664
1997 ..............................
High Yield
1997 .............................. $12.500000
Moderate Asset Allocation
1992 .............................. $11.012835 $11.772128 31,652.055
1993 .............................. 11.772128 12.775798 526,706.519
1994 .............................. 12.775798 12.396295 994,126.229
1995 .............................. 12.396295 14.752561 1,070,866.388
1996 .............................. 14.752561 15.995076 1,346,688.023
1997 ..............................
Conservative Asset Allocation
1992 .............................. $11.102574 $11.821212 3,884.882
1993 .............................. 11.821212 12.705196 176,613.459
1994 .............................. 12.705196 12.298940 267,695.021
1995 .............................. 12.298940 14.320582 306,895.403
1996 .............................. 14.320582 15.113142 424,786.597
1997 ..............................
Strategic Bond
1993 .............................. $10.000000 $10.750617 414,573.339
1994 .............................. 10.750617 9.965972 737,151.981
1995 .............................. 9.965972 11.716972 878,455.666
1996 .............................. 11.716972 13.250563 1,663,287.368
</TABLE>
12
<PAGE> 18
<TABLE>
<S> <C> <C> <C> <C>
1997 ..............................
Global Government Bond
1992 .............................. $13.322602 $13.415849 7,122.534
1993 .............................. 13.415849 15.741586 299,274.049
1994 .............................. 15.741586 14.630721 463,867.775
1995 .............................. 14.630721 17.772344 417,838.308
1996 .............................. 17.772344 19.803954 462,253.788
1997 ..............................
Capital Growth Bond
1997 .............................. $12.500000
Investment Quality Bond (formerly called Bond Sub-account)
1992 .............................. $13.147350 $13.936240 1,442.768
1993 .............................. 13.936240 15.118716 209,360.256
1994 .............................. 15.118716 14.216516 309,793.553
1995 .............................. 14.216516 16.751499 305,028.908
1996 .............................. 16.751499 16.943257 386,465.721
1997 ..............................
U.S. Gov. Securities (formerly called U.S. Gov. Bond Sub-account)
1992 .............................. $13.015785 $13.651495 13,906.158
1993 .............................. 13.651495 14.490734 546,010.063
1994 .............................. 14.490734 14.111357 652,508.827
1995 .............................. 14.111357 16.083213 696,869.324
1996 .............................. 16.083213 16.393307 807,763.458
1997 ..............................
Money Market
1992 .............................. $12.892485 $13.137257 11.495
1993 .............................. 13.137257 13.303085 141,771.056
1994 .............................. 13.303085 13.623292 464,720.715
1995 .............................. 13.623292 14.190910 639,836.317
1996 .............................. 14.190910 14.699636 1,256,691.417
1997 ..............................
Lifestyle Aggressive 1000
1997 .............................. $12.500000
Lifestyle Growth 820
1997 .............................. $12.500000
Lifestyle Balanced 640
1997 .............................. $12.500000
Lifestyle Moderate 460
1997 .............................. $12.500000
Lifestyle Conservative 260
1997 .............................. $12.500000
</TABLE>
* Units under this series of contracts were first credited under the
sub-accounts on August 9, 1994, except in the case of International Growth and
Income where units were first credited on January 9, 1995, Small/Mid Cap and
International Small Cap where units were first credited on March 4, 1996, Growth
where units were first credited on July 15, 1996, Pacific Rim Emerging Markets,
Science & Technology, Emerging Growth, Pilgrim Baxter Growth, International
Stock, Worldwide Growth, Quantitative Equity, Real Estate Securities, Value,
Balanced, High Yield, Capital Growth Bond, Lifestyle Aggressive 1000, Lifestyle
Growth 820, Lifestyle Balanced 640, Lifestyle Moderate 460, Lifestyle
Conservative 280 where units were first credited on January 1, 1997.
13
<PAGE> 19
GENERAL INFORMATION ABOUT
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK,
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT A
AND MANUFACTURERS INVESTMENT TRUST
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
The Manufacturers Life Insurance Company of New York, (the "Company")
is a stock life insurance company organized in 1992 under the laws of the state
of New York. The Company's principal office is located at Corporate Center at
Rye, 555 Theodore Fremd Avenue, Suite C-209, Rye, New York 10580-9966.
The Company is a wholly-owned subsidiary of The Manufacturers Life
Insurance Company of North America, formerly North American Security Life
Insurance Company ("Manulife North America"). Manulife North America is a stock
life insurance company organized under the laws of Delaware in 1979 with its
principal office located at 116 Huntington Avenue, Boston, Massachusetts 02116.
Manulife North America's principal business is offering a variable annuity
contract, similar to that offered by the Company in New York, in 49 other
states, the District of Columbia and Puerto Rico.
The ultimate parent of Manulife North America is The Manufacturers Life
Insurance Company ("Manulife"), a Canadian mutual life insurance company based
in Toronto, Canada. Prior to January 1, 1996, Manulife North America was a
wholly owned subsidiary of North American Life Assurance Company ("NAL"), a
Canadian mutual life insurance company. On January 1, 1996, NAL and Manulife
merged with the combined company retaining the name Manulife.
On January 19, 1998, the Board of Directors of Manulife asked the
management of Manulife to prepare a plan for conversion of Manulife from a
mutual life insurance company to an investor-owned, publicly traded stock
company. Any demutualization plan for Manulife is subject to the approval of the
Manulife Board of Directors and policyholders as well as regulatory approval.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT A
The Company established The Manufacturers Life Insurance Company of New
York Separate Account A (the "Variable Account") on March 4, 1992 as a separate
account under the laws of New York. The income, gains and losses, whether or not
realized, from assets of the Variable Account are, in accordance with the
contracts, credited to or charged against the Variable Account without regard to
other income, gains or losses of the Company. Nevertheless, all obligations
arising under the contracts are general corporate obligations of the Company.
Assets of the Variable Account may not be charged with liabilities arising out
of any other business of the Company.
The Variable Account is registered with the SEC under the Investment
Company Act of 1940, as amended (the "1940 Act") as a unit investment trust. A
unit investment trust is a type of investment company which invests its assets
in specified securities, such as the shares of one or more investment companies.
Registration under the 1940 Act does not involve supervision by the SEC of the
management or investment policies or practices of the Variable Account.
There are currently thirty-five sub-accounts within the Variable
Account. The Company reserves the right, subject to prior approval of the New
York Superintendent of Insurance and compliance with applicable law, to add
other sub-accounts, eliminate existing sub-accounts, combine sub-accounts or
transfer assets in one sub-account to another sub-account established by the
Company or an affiliated company.
MANUFACTURERS INVESTMENT TRUST
The assets of each sub-account of the Variable Account are invested in
shares of a corresponding portfolio of the Manufacturers Investment Trust (the
"Trust"). A description of each portfolio is set forth below. The Trust is
registered under the 1940 Act as an open-end management investment company. Each
of the portfolios is diversified for purposes of the 1940 Act, except for the
Global Government Bond Trust, the Emerging Growth Trust and the five
14
<PAGE> 20
Lifestyle Trusts, which are non-diversified. The Trust receives investment
advisory services from Manufacturers Securities Services, LLC ("MSS"), the
successor to NASL Financial Services, Inc..
The Trust currently has fifteen Subadvisers who manage all of the portfolios:
<TABLE>
<CAPTION>
SUBADVISER SUBADVISER TO
---------- -------------
<S> <C>
Fidelity Management Trust Company Equity Trust
Conservative Asset Allocation Trust
Moderate Asset Allocation Trust
Aggressive Asset Allocation Trust
Founders Asset Management, Inc. Growth Trust
Worldwide Growth Trust
Balanced Trust
International Small Cap Trust
Fred Alger Management, Inc. Small/Mid Cap Trust
J.P. Morgan Investment Management Inc. International Growth and Income Trust
Manufacturers Adviser Corporation Pacific Rim Emerging Markets Trust
Quantitative Equity Trust
Real Estate Securities Trust
Capital Growth Bond Trust
Money Market Trust
Lifestyle Trusts
Miller Anderson & Sherrerd, LLP Value Trust
High Yield Trust
Morgan Stanley Asset Management Inc. Global Equity Trust
Oechsle International Advisors, L.P. Global Government Bond Trust
Pilgrim Baxter & Associates, Ltd. Pilgrim Baxter Growth Trust
Rosenberg Institutional Equity Management Small Company Value Trust
Rowe Price-Fleming International, Inc. International Stock Trust
Salomon Brothers Asset Management Inc U.S. Government Securities Trust
Strategic Bond Trust
T. Rowe Price Associates, Inc. Science & Technology Trust
Blue Chip Growth Trust
Equity-Income Trust
Warburg Pincus Asset Management, Inc. Emerging Growth Trust
Wellington Management Company, LLP Growth and Income Trust
Investment Quality Bond Trust
</TABLE>
15
<PAGE> 21
The following is a brief description of each portfolio:
The PACIFIC RIM EMERGING MARKETS TRUST seeks long-term growth of
capital by investing in a diversified portfolio that is comprised
primarily of common stocks and equity-related securities of
corporations domiciled in countries in the Pacific Rim region.
The SCIENCE & TECHNOLOGY TRUST seeks long-term growth of capital.
Current income is incidental to the portfolio's objective.
The INTERNATIONAL SMALL CAP TRUST seeks capital appreciation by
investing primarily in securities issued by foreign companies which
have total market capitalization or annual revenues of $1 billion or
less. These securities may represent companies in both established and
emerging economies throughout the world.
The EMERGING GROWTH TRUST seeks maximum capital appreciation by
investing primarily in a portfolio of equity securities of domestic
companies. The Emerging Growth Trust ordinarily will invest at least
65% of its total assets in common stocks or warrants of emerging growth
companies that represent attractive opportunities for maximum capital
appreciation.
The PILGRIM BAXTER GROWTH TRUST seeks capital appreciation by investing
in companies believed by the subadviser to have an outlook for strong
earnings growth and the potential for significant capital appreciation.
The SMALL/MID CAP TRUST seeks long term capital appreciation by
investing at least 65% of its total assets (except during temporary
defensive periods) in small/mid cap equity securities. As used herein
small/mid cap equity securities are equity securities of companies
that, at the time of purchase, have total market capitalization between
$500 million and $5 billion.
The INTERNATIONAL STOCK TRUST seeks long-term growth of capital by
investing primarily in common stocks of established, non-U.S.
companies.
The WORLDWIDE GROWTH TRUST seeks long-term growth of capital by
normally investing at least 65% of its total assets in equity
securities of growth companies in a variety of markets throughout the
world.
The GLOBAL EQUITY TRUST seeks long-term capital appreciation by
investing primarily in equity securities throughout the world,
including U.S. issuers and emerging markets.
The SMALL COMPANY VALUE TRUST seeks long term growth of capital by
investing in equity securities of smaller companies which are traded
principally in the markets of the United States.
The EQUITY TRUST seeks growth of capital, by investing primarily in
common stocks of United States issuers and securities convertible into
or carrying the right to buy common stocks.
The GROWTH TRUST seeks long term growth of capital by investing at
least 65% of the portfolio's total assets in common stocks of
well-established, high-quality growth companies that the subadviser
believes have the potential to increase earnings faster than the rest
of the market.
The QUANTITATIVE EQUITY TRUST seeks to achieve intermediate and
long-term growth through capital appreciation and current income by
investing in common stocks and other equity securities of well
established companies with promising prospects for providing an above
average rate of return.
The BLUE CHIP GROWTH TRUST seeks to achieve long-term growth of
capital. Current income is a secondary objective and many of the stocks
in the portfolio are expected to pay dividends.
16
<PAGE> 22
The REAL ESTATE SECURITIES TRUST seeks to achieve a combination of
long-term capital appreciation and satisfactory current income by
investing in real estate related equity and debt securities.
The VALUE TRUST seeks to realize an above-average total return over a
market cycle of three to five years, consistent with reasonable risk by
investing primarily in common and preferred stocks, convertible
securities, rights and warrants to purchase common stocks, ADRs and
other equity securities of companies with equity capitalizations
usually greater than $300 million.
The INTERNATIONAL GROWTH AND INCOME TRUST seeks long-term growth of
capital and income by investing, under normal circumstances, at least
65% of its total assets in equity securities of foreign issuers. The
Portfolio may also invest in debt securities of corporate or sovereign
issuers rated A or higher by Moody's Investor Servies, Inc. or Standard
&Poor's Corporation or, if unrated, of equivalent credit quality as
determined by the subadviser.
The GROWTH AND INCOME TRUST seeks long-term growth of capital and
income, consistent with prudent investment risk, by investing primarily
in a diversified portfolio of common stocks of United States issuers
which the subadviser believes are of high quality.
The EQUITY-INCOME TRUST seeks to provide substantial dividend income
and also long term capital appreciation by investing primarily in
dividend-paying common stocks, particularly of established companies
with favorable prospects for both increasing dividends and capital
appreciation.
The BALANCED TRUST seeks current income and capital appreciation by
investing in a balanced portfolio of common stocks, U.S. and foreign
government obligations and a variety of corporate fixed-income
securities.
The HIGH YIELD TRUST seeks to realize an above-average total return
over a market cycle of three to five years, consistent with reasonable
risk by investing primarily in high yield debt securities, including
corporate bonds and other fixed-income securities.
The AUTOMATIC ASSET ALLOCATION TRUSTS seek the highest potential total
return consistent with a specified level of risk tolerance --
conservative, moderate or aggressive -- by investing primarily in the
kinds of securities in which the Equity, Investment Quality Bond, U.S.
Government Securities and Money Market Trusts may invest.
- The AGGRESSIVE ASSET ALLOCATION TRUST seeks the highest total
return consistent with an aggressive level of risk tolerance.
This Trust attempts to limit the decline in portfolio value in
very adverse market conditions to 15% over any three year
period.
- The MODERATE ASSET ALLOCATION TRUST seeks the highest total
return consistent with a moderate level of risk tolerance. This
Trust attempts to limit the decline in portfolio value in very
adverse market conditions to 10% over any three year period.
- The CONSERVATIVE ASSET ALLOCATION TRUST seeks the highest
total return consistent with a conservative level of risk
tolerance. This Trust attempts to limit the decline in portfolio
value in very adverse market conditions to 5% over any three
year period.
The STRATEGIC BOND TRUST seeks a high level of total return consistent
with preservation of capital by giving its subadviser broad discretion
to deploy the portfolio's assets among certain segments of the
fixed-income market as the subadviser believes will best contribute to
achievement of the portfolio's investment objective.
The GLOBAL GOVERNMENT BOND TRUST seeks a high level of total return by
placing primary emphasis on high current income and the preservation of
capital, by investing primarily in a global portfolio of
17
<PAGE> 23
high-quality, fixed-income securities of foreign and United States
governmental entities and supranational issuers.
The CAPITAL GROWTH BOND TRUST seeks to achieve growth of capital by
investing in medium-grade or better debt securities, with income as a
secondary consideration. The Capital Growth Bond Trust differs from
most "bond" funds in that its primary objective is capital
appreciation, not income.
The INVESTMENT QUALITY BOND TRUST seeks a high level of current income
consistent with the maintenance of principal and liquidity, by
investing primarily in a diversified portfolio of investment grade
corporate bonds and U.S. Government bonds with intermediate to longer
term maturities. The portfolio may also invest up to 20% of its assets
in non-investment grade fixed income securities.
The U.S. GOVERNMENT SECURITIES TRUST seeks a high level of current
income consistent with preservation of capital and maintenance of
liquidity, by investing in debt obligations and mortgage-backed
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities and derivative securities such as collateralized
mortgage obligations backed by such securities.
The MONEY MARKET TRUST seeks maximum current income consistent with
preservation of principal and liquidity, by investing in high quality
money market instruments with maturities of 397 days or less issued
primarily by United States entities.
The LIFESTYLE AGGRESSIVE 1000 TRUST seeks to provide long term growth
of capital (current income is not a consideration) by investing 100% of
the Lifestyle Trust's assets in other portfolios of the Trust
("Underlying Portfolios") which invest primarily in equity securities.
The LIFESTYLE GROWTH 820 TRUST seeks to provide long term growth of
capital with consideration also given to current income by investing
approximately 20% of the Lifestyle Trust's assets in Underlying
Portfolios which invest primarily in fixed income securities and
approximately 80% of its assets in Underlying Portfolios which invest
primarily in equity securities.
The LIFESTYLE BALANCED 640 TRUST seeks to provide a balance between a
high level of current income and growth of capital with a greater
emphasis given to capital growth by investing approximately 40% of the
Lifestyle Trust's assets in Underlying Portfolios which invest
primarily in fixed income securities and approximately 60% of its
assets in Underlying Portfolios which invest primarily in equity
securities.
The LIFESTYLE MODERATE 460 TRUST seeks to provide a balance between a
high level of current income and growth of capital with a greater
emphasis given to high income by investing approximately 60% of the
Lifestyle Trust's assets in Underlying Portfolios which invest
primarily in fixed income securities and approximately 40% of its
assets in Underlying Portfolios which invest primarily in equity
securities.
The LIFESTYLE CONSERVATIVE 280 TRUST seeks to provide a high level of
current income with some consideration also given to growth of capital
by investing approximately 80% of the Lifestyle Trust's assets in
Underlying Portfolios which invest primarily in fixed income securities
and approximately 20% of its assets in Underlying Portfolios which
invest primarily in equity securities.
In pursuing the Strategic Bond, High Yield and Investment Quality Bond
Trusts' investment objective, each portfolio expects to invest a portion of its
assets in high yield securities, commonly known as "junk bonds" which also
present a high degree of risk. The risks of these securities include price
volatility and risk of default in the payment of interest and principal. See
"Risk Factors Relating to High Yield Securities" contained in the Trust
Prospectus before investing in any of these Trusts.
In pursuing the Pacific Rim Emerging Markets, International Stock,
Worldwide Growth, International Small Cap, Global Equity, Strategic Bond,
International Growth and Income, High Yield and Global Government Bond
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Trusts' investment objective, each portfolio may invest up to 100% of its assets
in foreign securities which may present additional risks. See "Foreign
Securities" contained in the Trust Prospectus before investing in any of these
Trusts.
If the shares of a Trust portfolio are no longer available for
investment or in the Company's judgment investment in a Trust portfolio becomes
inappropriate in view of the purposes of the Variable Account, the Company may
eliminate the shares of a portfolio and substitute shares of another portfolio
of the Trust or another open-end registered investment company. Substitution may
be made with respect to both existing investments and the investment of future
purchase payments. However, no such substitution will be made without notice to
the contract owner and prior approval of the SEC to the extent required by the
1940 Act.
The Company will vote shares of the Trust portfolios held in the
Variable Account at meetings of shareholders of the Trust in accordance with
voting instructions received from the persons having the voting interest under
the contracts. The number of portfolio shares for which voting instructions may
be given will be determined by the Company in the manner described below, not
more than 90 days prior to the meeting of the Trust. Trust proxy material will
be distributed to each person having the voting interest under the contract
together with appropriate forms for giving voting instructions. Portfolio shares
held in the Variable Account that are attributable to contract owners and as to
which no timely instructions are received and portfolio shares held in the
Variable Account that are beneficially owned by the Company will be voted by the
Company in proportion to the instructions received.
Prior to the maturity date, the person having the voting interest under
a contract is the contract owner and the number of votes as to each portfolio
for which voting instructions may be given is determined by dividing the value
of the investment account corresponding to the sub-account in which such
portfolio shares are held by the net asset value per share of that portfolio.
After the maturity date, the person having the voting interest under a contract
is the annuitant and the number of votes as to each portfolio for which voting
instructions may be given is determined by dividing the reserve for the contract
allocated to the sub-account in which such portfolio shares are held by the net
asset value per share of that portfolio. Generally, the number of votes tends to
decrease as annuity payments progress since the amount of reserves attributable
to a contract will usually decrease after commencement of annuity payments. The
Company reserves the right to make any changes in the voting rights described
above that may be permitted by the Federal securities laws or regulations or
interpretations of these laws or regulations.
A full description of the Trust, including the investment objectives,
policies and restrictions of each of the portfolios is contained in the
Prospectus for the Trust and should be read by a prospective purchaser before
investing.
DESCRIPTION OF THE CONTRACT
ACCUMULATION PROVISIONS
PURCHASE PAYMENTS
Purchase payments are paid to the Company at its Annuity Service
Office. The minimum purchase payment is $30; however, at least $300 must be paid
during the first contract year. Purchase payments may be made at any time. The
Company may provide by separate agreement for purchase payments to be
automatically withdrawn from a contract owner's bank account on a periodic
basis. If a purchase payment would cause the contract value to exceed $1,000,000
or the contract value already exceeds $1,000,000, additional purchase payments
will be accepted only with the prior approval of the Company.
The Company may, at its option, cancel a contract at the end of any
three consecutive contract years in which no purchase payments have been made,
if both (i) the total purchase payments made over the life of the contract, less
any withdrawals, are less than $2,000; and (ii) the contract value at the end of
such three year period is less than $2,000. Upon cancellation the Company will
pay the contract owner the contract value computed as of the valuation period
during which the cancellation occurs less the annual $30 administration fee and
less any debt. The amounts paid will be treated as withdrawals for Federal tax
purposes and, thus, may be subject to income tax and to a 10% penalty tax (see
"FEDERAL TAX MATTERS").
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Purchase payments are allocated among the investment options in
accordance with the percentages designated by the contract owner in the
application. In addition, contract owners have the option to participate in the
Guarantee Plus Program administered by the Company. Under the Guarantee Plus
Program the initial purchase payment is split between the fixed and variable
investment options. A percentage of the initial purchase payment is allocated to
the chosen fixed account, such that, at the end of the guaranteed period the
fixed account will have grown to an amount at least equal to the total initial
purchase payment. The percentage depends upon the current interest rate of the
fixed investment option. The balance of the initial purchase payment is
allocated among the variable investment options as indicated on the contract
specifications page. Contract owners may elect to participate in the Guarantee
Plus Program on the contract application and may obtain full information
concerning the program and its restrictions from their securities dealers or the
Annuity Service Office. The contract owner may change the allocation of
subsequent purchase payments at any time upon written notice to the Company.
ACCUMULATION UNITS
The Company will establish an investment account for the contract owner
for each variable account investment option to which such contract owner
allocates purchase payments. Purchase payments are credited to such investment
accounts in the form of accumulation units. The following discussion of
accumulation units, the value of accumulation units and the net investment
factor formula pertains only to the accumulations in the variable account
investment options. The parallel discussion regarding accumulations in the fixed
account investment options appears elsewhere in this Prospectus (see "FIXED
ACCOUNT INVESTMENT OPTIONS").
The number of accumulation units to be credited to each investment
account is determined by dividing the net purchase payment allocated to that
investment account by the value of an accumulation unit for that investment
account for the valuation period during which the purchase payment is received
at the Company's Annuity Service Office complete with all necessary information
or, in the case of the first purchase payment, pursuant to the procedures
described below.
Initial purchase payments received by mail will usually be credited in
the valuation period during which received at the Annuity Service Office, and in
any event not later than two business days after receipt of a properly completed
application and all information necessary for processing of the application. The
applicant will be informed of any deficiencies in an application if it cannot be
processed and the purchase payment credited within two business days after
receipt. If the deficiencies are not remedied within five business days after
receipt, the purchase payment will be returned promptly to the applicant, unless
the applicant specifically consents to the Company's retaining the purchase
payment until all necessary information is received. Initial purchase payments
received by wire transfer from broker-dealers will be credited in the valuation
period during which received where such broker-dealers have made special
arrangements with the Company for the collection and forwarding of contract
applications.
VALUE OF ACCUMULATION UNITS
The value of accumulation units will vary from one valuation period to
the next depending upon the investment results of the particular sub-accounts to
which purchase payments are allocated. The value of an accumulation unit for
each sub-account was arbitrarily set at $10 or $12.50 for the first valuation
period under other contracts issued by the Company or an affiliate of the
Company. The value of an accumulation unit for any subsequent valuation period
is determined by multiplying the value of an accumulation unit for the
immediately preceding valuation period by the net investment factor for such
sub-account (described below) for the valuation period for which the value is
being determined.
NET INVESTMENT FACTOR
The net investment factor is an index used to measure the investment
performance of a sub-account from one valuation period to the next. The net
investment factor for each sub-account for any valuation period is determined by
dividing (a) by (b) and subtracting (c) from the result:
Where (a) is:
(1) the net asset value per share of a portfolio share held in the
sub-account determined at the end of the current valuation period, plus
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(2) the per share amount of any dividend or capital gain distributions
made by the portfolio on shares held in the sub-account if the "ex-dividend"
date occurs during the current valuation period.
Where (b) is:
the net asset value per share of a portfolio share held in the
sub-account determined as of the end of the immediately preceding valuation
period.
Where (c) is:
a factor representing the charges deducted from the sub-account on a
daily basis for administrative expenses and mortality and expense risks. Such
factor is equal on an annual basis to 1.40%: (0.15% for administrative expenses
and 1.25% for mortality and expense risks).
The net investment factor may be greater or less than or equal to one;
therefore, the value of an accumulation unit may increase, decrease or remain
the same.
TRANSFERS AMONG INVESTMENT OPTIONS
Before the maturity date the contract owner may transfer amounts among
the variable account investment options and from such investment options to the
fixed account investment options at any time and without charge upon written
notice to the Company. Accumulation units will be canceled from the investment
account from which amounts are transferred and credited to the investment
account to which amounts are transferred. The Company will effect such transfers
so that the contract value on the date of the transfer will not be affected by
the transfer. The contract owner must transfer at least $300 or, if less, the
entire value of the investment account. If after the transfer the amount
remaining in the investment account is less than $100, then the Company will
transfer the entire amount instead of the requested amount. The Company reserves
the right to limit, upon notice, the maximum number of transfers a contract
owner may make to one per month or six at any time within a contract year. The
Company reserves the right to defer the transfer privilege at any time that the
Company is unable to purchase or redeem shares of the Trust portfolios. In
addition, in accordance with applicable law, the Company reserves the right to
modify or terminate the transfer privilege at any time.
MAXIMUM NUMBER OF INVESTMENT OPTIONS
Due to current administrative capabilities, a contract owner is limited
to a maximum of 17 investment options (including all fixed account investment
options) during the period prior to the maturity date of the contract (the
"Contract Period"). In calculating this limit for each contract owner,
investment options to which the contract owner has allocated purchased payments
at any time during the Contract Period will be counted toward the 17 maximum
even if the contract owner no longer has contract value allocated to these
investment options.
SPECIAL TRANSFER SERVICES - DOLLAR COST AVERAGING
The Company administers a Dollar Cost Averaging ("DCA") program which
enables a contract owner to pre-authorize a periodic exercise of the contractual
transfer rights described above. Contract owners entering into a DCA agreement
instruct the Company to transfer monthly a predetermined dollar amount from any
sub-account or the one year fixed account investment option to other
sub-accounts until the amount in the sub-account from which the transfer is made
or one year fixed account investment option is exhausted. The DCA program is
generally suitable for contract owners making a substantial deposit to the
contract and who desire to control the risk of investing at the top of a market
cycle. The DCA program allows such investments to be made in equal installments
over time in an effort to reduce such risk. Contract owners interested in the
DCA program may elect to participate in the program on the contract application
or by separate application. Contract owners may obtain a separate application
and full information concerning the program and its restrictions from their
securities dealer or the Annuity Service Office.
ASSET REBALANCING PROGRAM
The Company administers an Asset Rebalancing Program which enables a
contract owner to indicate to the Company the percentage levels he or she would
like to maintain in particular portfolios. The contract owner's contract
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value will be automatically rebalanced pursuant to the schedule described below
to maintain the indicated percentages by transfers among the portfolios. (Fixed
Account Investment Options are not eligible for participation in the Asset
Rebalancing Program). The entire value of the variable investment accounts must
be included in the Asset Rebalancing Program. Other investment programs, such as
the DCA Program, or other transfers or withdrawals may not work in concert with
the Asset Rebalancing Program. Therefore, contract owners should monitor their
use of other programs and any other transfers or withdrawals while the Asset
Rebalancing Program is being used. Contract owners interested in the Asset
Rebalancing Program may obtain a separate application and full information
concerning the program and its restrictions from their securities dealer or the
Annuity Service Office.
For rebalancing programs begun on or after October 1, 1996 asset
rebalancing will only be permitted on the following time schedules:
(i) quarterly on the 25th day of the last month of the quarter (or
the next business day if the 25th is not a business day);
(ii) semi-annually on June 25th or December 26th (or the next business
day if these dates are not business days); or
(iii) annually on December 26th (or the next business day if December
26th is not a business day).
Rebalancing will continue to take place on the last business day of every
calendar quarter for rebalancing programs begun prior to October 1, 1996.
WITHDRAWALS
Prior to the earlier of the maturity date or the death of the
annuitant, the contract owner may withdraw all or a portion of the contract
value upon written request, complete with all necessary information to the
Company's Annuity Service Office. For certain qualified contracts, exercise of
the withdrawal right may require the consent of the qualified plan participant's
spouse under the Internal Revenue Code of 1986, as amended (the "Code") and
regulations promulgated by the Treasury Department. In the case of a total
withdrawal, the Company will pay the contract value as of the date of receipt of
the request at its Annuity Service Office, less the annual $30 administration
fee, any debt and any applicable withdrawal charge, and the contract will be
canceled. In the case of a partial withdrawal, the Company will pay the amount
requested and cancel that number of accumulation units credited to each
investment account necessary to equal the amount withdrawn from each investment
account plus any applicable withdrawal charge deducted from such investment
account (see "CHARGES AND DEDUCTIONS").
When making a partial withdrawal, the contract owner should specify the
investment options from which the withdrawal is to be made. The amount requested
from an investment option may not exceed the value of that investment option
less any applicable withdrawal charge. If the contract owner does not specify
the investment options from which a partial withdrawal is to be taken, a partial
withdrawal will be taken from the variable account investment options until
exhausted and then from the fixed account investment options. If the partial
withdrawal is less than the total value in the variable account investment
options, the withdrawal will be taken pro rata from the variable account
investment options: taking from each such variable account investment option an
amount which bears the same relationship to the total amount withdrawn as the
value of such variable account investment option bears to the total value of all
the contract owner's investments in variable account investment options.
For the rules governing the order and manner of withdrawals from the
fixed account investment options, see "FIXED ACCOUNT INVESTMENT OPTIONS".
There is no limit on the frequency of partial withdrawals; however, the
amount withdrawn must be at least $300 or, if less, the entire balance in the
investment option. If after the withdrawal (and deduction of any withdrawal
charge) the amount remaining in the investment option is less than $100, the
Company will treat the partial withdrawal as a withdrawal of the entire amount
held in the investment option. If a partial withdrawal plus any applicable
withdrawal charge would reduce the contract value to less than $300, the Company
will treat the partial withdrawal as a total withdrawal of the contract value.
The amount of any withdrawal from the variable account investment
options will be paid promptly, and in any event within seven days of receipt of
the request, complete with all necessary information at the Company's Annuity
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Service Office, except that the Company reserves the right to defer the right of
withdrawal or postpone payments for any period when: (1) the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (2)
trading on the New York Stock Exchange is restricted, (3) an emergency exists as
a result of which disposal of securities held in the Variable Account is not
reasonably practicable or it is not reasonably practicable to determine the
value of the Variable Account's net assets, or (4) the SEC, by order, so permits
for the protection of security holders; provided that applicable rules and
regulations of the SEC shall govern as to whether the conditions described in
(2) and (3) exist.
Withdrawals from the contract may be subject to income tax and a 10%
penalty tax. Withdrawals are permitted from contracts issued in connection with
Section 403(b) qualified plans only under limited circumstances (see "FEDERAL
TAX MATTERS").
SPECIAL WITHDRAWAL SERVICES - SYSTEMATIC WITHDRAWAL PLAN
The Company administers a Systematic Withdrawal Plan ("SWP") which
enables a contract owner to pre-authorize a periodic exercise of the contractual
withdrawal rights described above. Contract owners entering into a SWP agreement
instruct the Company to withdraw a level dollar amount from specified investment
options on a periodic basis. The total of SWP withdrawals in a contract year is
limited to not more than 10% of the purchase payments made to ensure that no
withdrawal or market value charge will ever apply to a SWP withdrawal. If an
additional withdrawal is made from a contract participating in SWP, the SWP will
terminate automatically and may be reinstated only on or after the next contract
anniversary pursuant to a new application. SWP is not available to contracts
participating in the dollar cost averaging program or for which purchase
payments are being automatically deducted from a bank account on a periodic
basis. SWP withdrawals will be withdrawn without withdrawal and market value
charges. SWP withdrawals may, however, be subject to income tax and a 10%
penalty tax (see "FEDERAL TAX MATTERS"). Contract owners interested in SWP may
elect to participate in this program on the contract application or by separate
application. Contract owners may obtain a separate application and full
information concerning the program and its restrictions from their securities
dealer or the Annuity Service Office.
LOANS
The Company offers a loan privilege only to owners of contracts issued
in connection with Section 403(b) qualified plans that are not subject to Title
I of ERISA. Owners of such contracts may obtain loans using the contract as the
only security for the loan. Loans are subject to provisions of the Code and to
applicable retirement program rules (collectively, "loan rules"). Tax advisors
and retirement plan fiduciaries should be consulted prior to exercising loan
privileges.
Under the terms of the contract, the maximum loan value is equal to 80%
of the contract value, although loan rules may serve to reduce such maximum loan
value in some cases. The amount available for a loan at any given time is the
loan value less any outstanding debt. Debt equals the amount of any loans plus
accrued interest. Loans will be made only upon written request from the owner.
The Company will make loans within seven days of receiving a properly completed
loan application (applications are available from the Annuity Service Office),
subject to postponement under the same circumstances that payment of withdrawals
may be postponed (see "WITHDRAWALS").
When an owner requests a loan, the Company will reduce the owner's
investment in the investment accounts and transfer the amount of the loan to the
loan account, a part of the Company's general account. The owner may designate
the investment accounts from which the loan is to be withdrawn. Absent such a
designation, the amount of the loan will be withdrawn from the investment
accounts in accordance with the rules for making partial withdrawals (see
"WITHDRAWALS"). The contract provides that owners may repay contract debt at any
time. Under applicable loan rules, loans generally must be repaid within five
years, repayments must be made at least quarterly and repayments must be made in
substantially equal amounts. When a loan is repaid, the amount of the repayment
will be transferred from the loan account to the investment accounts. The owner
may designate the investment accounts to which a repayment is to be allocated.
Otherwise, the repayment will be allocated in the same manner as the owner's
most recent purchase payment. On each contract anniversary, the Company will
transfer from the investment accounts to the loan account the amount by which
the debt on the contract exceeds the balance in the loan account.
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The Company charges interest of 6% per year on contract loans. Loan
interest is payable in arrears and, unless paid in cash, the accrued loan
interest is added to the amount of the debt and bears interest at 6% as well.
The Company credits interest with respect to amounts held in the loan account at
a rate of 4% per year. Consequently, the net cost of loans under the contract is
2%. If on any date debt under a contract exceeds the contract value, the
contract will be in default. In such case the owner will receive a notice
indicating the payment needed to bring the contract out of default and will have
a thirty-one day grace period within which to pay the default amount. If the
required payment is not made within the grace period, the contract may be
foreclosed (terminated without value).
The amount of any debt will be deducted from the minimum death benefit
(see "DEATH BENEFIT BEFORE MATURITY DATE"). In addition, debt, whether or not
repaid, will have a permanent effect on the contract value because the
investment results of the investment accounts will apply only to the unborrowed
portion of the contract value. The longer debt is outstanding, the greater the
effect is likely to be. The effect could be favorable or unfavorable. If the
investment results are greater than the rate being credited on amounts held in
the loan account while the debt is outstanding, the contract value will not
increase as rapidly as it would have if no debt were outstanding. If investment
results are below that rate, the contract value will be higher than it would
have been had no debt been outstanding.
DEATH BENEFIT BEFORE MATURITY DATE
The following discussion applies principally to contracts that are not
issued in connection with qualified plans, i.e., a "non-qualified contract." The
requirements of the tax law applicable to qualified plans, and the tax treatment
of amounts held and distributed under such plans, are quite complex.
Accordingly, a prospective purchaser of the contract to be used in connection
with a qualified plan should seek competent legal and tax advice regarding the
suitability of the contract for the situation involved and the requirements
governing the distribution of benefits, including death benefits, from a
contract used in the plan. In particular, a prospective purchaser who intends to
use the contract in connection with a qualified plan should consider that the
contract provides a minimum death benefit (described below) that could be
characterized as an incidental death benefit. There are limits on the amount of
incidental benefits that may be provided under certain qualified plans and the
provision of such benefits may result in currently taxable income to plan
participants (see "FEDERAL TAX MATTERS").
Death of Annuitant who is not the Contract Owner. The Company will pay
the minimum death benefit, less any debt, to the beneficiary if the contract
owner is not the annuitant and the annuitant dies before the contract owner and
before the maturity date. If there is more than one such annuitant, the minimum
death benefit will be paid on the death of the last surviving co-annuitant. The
minimum death benefit will be paid either as a lump sum or in accordance with
any of the annuity options available under the contract. An election to receive
the death benefit under an annuity option must be made within 60 days after the
date on which the death benefit first becomes payable (see "ANNUITY OPTIONS").
Rather than receiving the minimum death benefit, the beneficiary may elect to
continue the contract as the new contract owner. (In general, a beneficiary who
makes such an election will nonetheless be treated for Federal income tax
purposes as if he had received the minimum death benefit.)
Death of Annuitant who is the Contract Owner. The Company will pay the
minimum death benefit, less any debt, to the beneficiary if the contract owner
is the annuitant, dies before the maturity date and is not survived by a
co-annuitant. If the contract is a non-qualified contract, the contract owner is
the annuitant and the contract owner dies before the maturity date survived by a
co-annuitant, the Company, instead of paying the minimum death benefit to the
beneficiary, will pay to the successor owner an amount equal to the amount
payable on total withdrawal without reduction for any withdrawal charge (see
"WITHDRAWALS"). If the contract is a non-qualified contract, distribution of the
minimum death benefit to the beneficiary (or of the amount payable to the
successor owner) must be made within five years after the owner's death. If the
beneficiary or successor owner, as appropriate, is an individual, in lieu of
distribution within five years of the owner's death, distribution may be made as
an annuity which begins within one year of the owner's death and is payable over
the life of the beneficiary (or the successor owner) or over a period not in
excess of the life expectancy of the beneficiary (or the successor owner). If
the owner's spouse is the beneficiary (or the successor owner, as appropriate)
that spouse may elect to continue the contract as the new owner in lieu of
receiving the distribution. In such a case, the distribution rules applicable
when a contract owner dies generally will apply when that spouse, as the owner,
dies.
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Death of Owner who is not the Annuitant. If the owner is not the
annuitant and dies before the maturity date and before the annuitant, the
successor owner will become the owner of the contract. If the contract is a
non-qualified contract, an amount equal to the amount payable on total
withdrawal, without reduction for any withdrawal charge, will be paid to the
successor owner (see "WITHDRAWALS"). Distribution of that amount to the
successor owner must be made within five years of the owner's death. If the
successor owner is an individual, in lieu of distribution within five years of
the owner's death, distribution may be made as an annuity which begins within
one year of the owner's death and is payable over the life of the successor
owner (or over a period not greater than the successor owner's life expectancy).
If the owner's spouse is the successor owner, that spouse may elect to continue
the contract as the new contract owner in lieu of receiving the distribution. In
such a case, the distribution rules applicable when a contract owner dies
generally will apply when that spouse, as the owner, dies. If there is more than
one owner, distribution will occur upon the death of any owner. If both owners
are individuals, distribution will be made to the remaining owner rather than to
the successor owner.
Entity as Owner. In the case of a non-qualified contract which is not
owned by an individual (for example, a non-qualified contract owned by a
corporation or a trust), the special rules stated in this paragraph apply. For
purposes of distributions of death benefits before the maturity date, any
annuitant will be treated as the owner of the contract, and a change in the
annuitant or any co-annuitant shall be treated as the death of the owner. In the
case of distributions which result from a change in an annuitant when the
annuitant does not actually die, the amount distributed will be reduced by
charges which would otherwise apply upon withdrawal (see "WITHDRAWALS").
If the contract is a non-qualified contract and there is both an
individual and a non-individual contract owner, death benefits must be paid as
provided in the contract upon the death of any annuitant, a change in any
annuitant, or the death of any individual contract owner, whichever occurs
earlier.
If the annuitant dies on or prior to the first month following his or
her 85th birthday, the minimum death benefit is as follows: during the first
contract year, the minimum death benefit is the greater of: (a) the contract
value on the date due proof of death and all required claim forms are received
at the Company's Annuity Service Office, or (b) the sum of all purchase payments
made, less any amount deducted in connection with partial withdrawals. Except as
provided below, during any subsequent contract year, the minimum death benefit
will be the greater of: (a) the contract value on the date due proof of death
and all required claim forms are received at the Company's Annuity Service
Office, or (b) the minimum death benefit determined in accordance with these
provisions as of the last day of the previous contract year plus any purchase
payments made and less any amount deducted in connection with partial
withdrawals since then. If the annuitant dies after the first of the month
following his or her 85th birthday, the minimum death benefit is the greater of:
(a) the contract value on the date due proof of death and all required claim
forms are received at the Company's Annuity Service Office, or (b) the excess of
the sum of all purchase payments less the sum of any amounts deducted in
connection with partial withdrawals.
Death benefits will be paid within seven days of receipt of due proof
of death and all required claim forms at the Company's Annuity Service Office,
subject to postponement under the same circumstances that payment of withdrawals
may be postponed (see "WITHDRAWALS").
ANNUITY PROVISIONS
GENERAL
The proceeds of the contract payable on death, withdrawal or the
contract maturity date may be applied to the annuity options described below,
subject to the distribution of death benefits provisions (see "DEATH BENEFIT
BEFORE MATURITY DATE").
Generally, annuity benefits under the contract will begin on the
maturity date. The maturity date is the date specified on the contract
specifications page, unless changed. If no date is specified, the maturity date
is the maximum maturity date described below. The maximum maturity date is the
first day of the month following the 90th birthday of the annuitant. The
contract owner may specify a different maturity date at any time by written
request at least one month before both the previously specified and the new
maturity date. The new maturity date must be the first day of a month no later
than the first day of the month following the 90th birthday of the annuitant
(see "FEDERAL TAX MATTERS -
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- -Taxation of Annuities in General-- Delayed Maturity Dates"). Distributions from
qualified contracts may be required before the maturity date (see "FEDERAL TAX
MATTERS--Qualified Retirement Plans").
The contract owner may select the frequency of annuity payments.
However, if the contract value at the maturity date is such that a monthly
payment would be less than $20, the Company may pay the contract value, less any
debt, in one lump sum to the annuitant on the maturity date.
ANNUITY OPTIONS
Annuity benefits are available under the contract on a fixed or
variable basis, or any combination of fixed and variable bases. Upon purchase of
the contract, and on or before the maturity date, the contract owner may select
one or more of the annuity options described below on a fixed and/or variable
basis (except Option 5 which is available on a fixed basis only) or choose an
alternate form of settlement acceptable to the Company. If an annuity option is
not selected, we will provide either variable or fixed, or a combination
variable and fixed, annuity payments in proportion to the Investment Account
Value of each Investment Option at the Maturity Date. Annuity payments will
continue for 10 years or the life of the Annuitant, if longer. Treasury
Department regulations may preclude the availability of certain annuity options
in connection with certain qualified contracts.
The following annuity options are guaranteed in the contract.
Option 1(a): Non-Refund Life Annuity - An annuity with payments during
the lifetime of the annuitant. No payments are due after the death of the
annuitant. Since there is no guarantee that any minimum number of payments will
be made, an annuitant may receive only one payment if the annuitant dies prior
to the date the second payment is due.
Option 1(b): Life Annuity with Payments Guaranteed for 10 Years - An
annuity with payments guaranteed for 10 years and continuing thereafter during
the lifetime of the annuitant. Since payments are guaranteed for 10 years,
annuity payments will be made to the end of such period if the annuitant dies
prior to the end of the tenth year.
Option 2(a): Joint & Survivor Non-Refund Life Annuity - An annuity with
payments during the lifetimes of the annuitant and a designated co-annuitant. No
payments are due after the death of the last survivor of the annuitant and
co-annuitant. Since there is no guarantee that any minimum number of payments
will be made, an annuitant or co-annuitant may receive only one payment if the
annuitant and co-annuitant die prior to the date the second payment is due.
Option 2(b): Joint & Survivor Life Annuity with Payments Guaranteed for
10 Years - An annuity with payments guaranteed for 10 years and continuing
thereafter during the lifetimes of the annuitant and a designated co-annuitant.
Since payments are guaranteed for 10 years, annuity payments will be made to the
end of such period if both the annuitant and the co-annuitant die prior to the
end of the tenth year.
In addition to the foregoing annuity options which the Company is
contractually obligated to offer at all times, the Company currently offers the
following annuity options. The Company may cease offering the following annuity
options at any time and may offer other annuity options in the future.
Option 3: Life annuity with Payments Guaranteed for 5, 15 or 20 Years -
An Annuity with payments guaranteed for 5, 15 or 20 years and continuing
thereafter during the lifetime of the annuitant. Since payments are guaranteed
for the specific number of years, annuity payments will be made to the end of
the last year of the 5, 15 or 20 year period.
Option 4: Joint & Two-Thirds Survivor Non-Refund Life Annuity - An
annuity with full payments during the joint lifetime of the annuitant and a
designated co-annuitant and two-thirds payments during the lifetime of the
survivor. Since there is no guarantee that any minimum number of payments will
be made, an annuitant or co-annuitant may receive only one payment if the
annuitant and co-annuitant die prior to the date the second payment is due.
Option 5: Period Certain Only Annuity for 5, 10, 15 or 20 years - An
annuity with payments for a 5, 10, 15 or 20 year period and no payments
thereafter.
DETERMINATION OF AMOUNT OF THE FIRST VARIABLE ANNUITY PAYMENT
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<PAGE> 32
The first variable annuity payment is determined by applying that
portion of the contract value used to purchase a variable annuity, measured as
of a date not more than ten business days prior to the maturity date (minus any
applicable premium taxes), to the annuity tables contained in the contract. The
rates contained in such tables depend upon the annuitant's age, sex and annuity
option selected, except for contracts issued in connection with certain employer
sponsored plans where sex-based tables may not be used. Under such tables, the
longer the life expectancy of the annuitant under any life annuity option or the
duration of any period for which payments are guaranteed under the option, the
smaller will be the amount of the first monthly variable annuity payment. The
tables are based on the 1983-a Individual Annuitant Mortality Table projected at
Scale G, and reflect an assumed interest rate of 4% per year.
ANNUITY UNITS AND THE DETERMINATION OF SUBSEQUENT VARIABLE ANNUITY PAYMENTS
Variable annuity payments subsequent to the first will be based on the
investment performance of the sub-accounts selected. The amount of such
subsequent payments is determined by dividing the amount of the first annuity
payment from each sub-account by the annuity unit value of such sub-account (as
of the same date the contract value to effect the annuity was determined) to
establish the number of annuity units which will thereafter be used to determine
payments. This number of annuity units for each sub-account is then multiplied
by the appropriate annuity unit value as of a uniformly applied date not more
than ten business days before the annuity payment is due, and the resulting
amounts for each sub-account are then totaled to arrive at the amount of the
payment to be made. The number of annuity units remains constant during the
annuity payment period. A pro-rata portion of the administration fee will be
deducted from each annuity payment.
The value of an annuity unit for each sub-account for any valuation
period is determined by multiplying the annuity unit value for the immediately
preceding valuation period by the net investment factor for that sub-account
(see "NET INVESTMENT FACTOR") for the valuation period for which the annuity
unit value is being calculated and by a factor to neutralize the assumed
interest rate.
A 4% assumed interest rate is built into the annuity tables in the
contract used to determine the first variable annuity payment. A higher
assumption would mean a larger first annuity payment, but more slowly rising
subsequent payments when actual investment performance exceeds the assumed rate,
and more rapidly falling subsequent payments when actual investment performance
is less than the assumed rate. A lower assumption would have the opposite
effect. If the actual net investment performance is 4% annually, annuity
payments will be level.
TRANSFERS AFTER MATURITY DATE
Once variable annuity payments have begun, the contract owner may
transfer all or part of the investment upon which such payments are based from
one sub-account to another. Transfers will be made upon notice to the Company at
least 30 days before the due date of the first annuity payment to which the
change will apply. Transfers after the maturity date will be made by converting
the number of annuity units being transferred to the number of annuity units of
the sub-account to which the transfer is made, so that the next annuity payment
if it were made at that time would be the same amount that it would have been
without the transfer. Thereafter, annuity payments will reflect changes in the
value of the new annuity units. The Company reserves the right to limit, upon
notice, the maximum number of transfers a contract owner may make per contract
year to four. The Company reserves the right to defer the transfer privilege at
any time that the Company is unable to purchase or redeem shares of the Trust
portfolios. In addition, in accordance with applicable law, the Company reserves
the right to modify or terminate the transfer privilege at any time. Once
annuity payments have commenced, no transfers may be made from a fixed annuity
option to a variable annuity option or from a variable annuity option to a fixed
annuity option.
DEATH BENEFIT ON OR AFTER MATURITY DATE
If annuity payments have been selected based on an Annuity Option
providing for payments for a guaranteed period, and the Annuitant dies on or
after the Maturity Date, we will make the remaining guaranteed payments to the
Beneficiary. Any remaining payments will be made as rapidly as under the method
of distribution being used as of the date of the Annuitant's death. If no
Beneficiary is living, we will commute any unpaid guaranteed payments to a
single sum (on the basis of the interest rate used in determining the payments)
and pay that single sum to the estate of the last to die of the Annuitant and
the Beneficiary.
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<PAGE> 33
OTHER CONTRACT PROVISIONS
TEN DAY RIGHT TO REVIEW
The contract owner may cancel the contract by returning it to the
Company's Annuity Service Office or agent at any time within 10 days after
receipt of the contract. Within 7 days of receipt of the contract by the
Company, the Company will pay to the contract owner an amount equal to the
contract value computed at the end of the valuation period on the date of
surrender. When the contract is issued as an individual retirement annuity under
Sections 408 or 408A of the Code, during the first 7 days of the 10 day period,
the Company will return all purchase payments if this is greater than the amount
otherwise payable.
No withdrawal charge is imposed upon return of the contract within the
ten day right to review period.
OWNERSHIP
The contract owner is the person entitled to exercise all rights under
the contract. Prior to the maturity date, the contract owner is the person
designated in the application or as subsequently named. On and after the
maturity date, the annuitant is the contract owner and after the death of the
annuitant, the beneficiary is the contract owner.
In the case of non-qualified contracts, ownership of the contract may
be changed or the contract collaterally assigned at any time during the lifetime
of the annuitant prior to the maturity date, subject to the rights of any
irrevocable beneficiary. Assigning a contract, or changing the ownership of a
contract, may be treated as a distribution of the contract value for Federal tax
purposes (see "FEDERAL TAX MATTERS"). Any change of ownership or assignment must
be made in writing. Any change must be approved by the Company. Any assignment
and any change, if approved, will be effective as of the date on which written.
The Company assumes no liability for any payments made or actions taken before a
change is approved or assignment is accepted or responsibility for the validity
or sufficiency of any assignment.
In the case of qualified contracts, ownership of the contract generally
may not be transferred except by the trustee of an exempt employees' trust which
is part of a retirement plan qualified under Section 401 of the Code or as
otherwise permitted by applicable IRS regulations. Subject to the foregoing, a
qualified contract may not be sold, assigned, transferred, discounted 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 the Company.
BENEFICIARY
The beneficiary is the person, persons, or entity designated in the
application or as subsequently named. The beneficiary may be changed during the
lifetime of the annuitant subject to the rights of any irrevocable beneficiary.
Any change must be made in writing, approved by the Company and if approved,
will be effective as of the date on which written. The Company assumes no
liability for any payments made or actions taken before the change is approved.
Prior to the maturity date, if no beneficiary survives the annuitant, the
contract owner or the contract owner's estate will be the beneficiary. The
interest of any beneficiary is subject to that of any assignee. In the case of
certain qualified contracts, regulations promulgated by the Treasury Department
prescribe certain limitations on the designation of a beneficiary.
MODIFICATION
The contract may not be modified by the Company without the consent of
the contract owner, except as may be required to make it conform to any law or
regulation or ruling issued by a governmental agency or to improve the rights
and/or benefits under the contract.
COMPANY APPROVAL
The Company reserves the right to accept or reject any contract
application at its sole discretion.
MISSTATEMENT AND PROOF OF AGE, SEX OR SURVIVAL
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The Company may require proof of age, sex or survival of any person
upon whose age, sex or survival any payment depends. If the age or sex of the
annuitant has been misstated, the benefits will be those that would have been
provided for the annuitant's correct age and sex. If the Company has made
incorrect annuity payments, the amount of any underpayment will be paid
immediately and the amount of any overpayment will be deducted from future
annuity payments.
FIXED ACCOUNT INVESTMENT OPTIONS
Due to certain exemptive and exclusionary provisions, interests in the
fixed account investment options are not registered under the Securities Act of
1933 (the "1933 Act") and the Company's general account is not registered as an
investment company under the 1940 Act. Accordingly, neither interests in the
fixed account investment options nor the general account are subject to the
provisions or restrictions of the 1933 Act or the 1940 Act and the staff of the
SEC has not reviewed the disclosures in this Prospectus relating thereto.
Disclosures relating to interests in the fixed account investment options and
the general account, however, may be subject to certain generally applicable
provisions of the Federal securities laws relating to the accuracy of statements
made in a registration statement.
Investment Options. There are three fixed account investment options
under the contract: one, three and six year investment accounts. Fixed
investment accounts provide for the accumulation of interest on purchase
payments at guaranteed rates for the duration of the one, three or six year
guarantee period. The guaranteed interest rates on new amounts allocated or
transferred to a fixed investment account are determined from time-to-time by
the Company in accordance with market conditions. In no event will the
guaranteed rate of interest be less than 4%. Once an interest rate is guaranteed
for a fixed investment account, it is guaranteed for the duration of the
guarantee period and may not be changed by the Company.
Investment Accounts. Contract owners may allocate purchase payments, or
make transfers from the variable investment options, to the fixed account
investment options at any time prior to the maturity date. The Company
establishes a separate investment account each time the contract owner allocates
or transfers amounts to a fixed account investment option, except that amounts
allocated or transferred to the same fixed account investment option on the same
day will establish a single investment account. Amounts may not be allocated to
a fixed account investment option that would extend the guarantee period beyond
the maturity date.
Renewals. At the end of a guarantee period, the contract owner may
establish a new investment account with the same guarantee period at the then
current interest rate, select a different fixed account investment option or
transfer the amounts to a variable account investment option, all without the
imposition of any charge. The contract owner may not select a guarantee period
that would extend beyond the maturity date. In the case of renewals within one
year of the maturity date, the only fixed account investment option available is
to have interest accrued up to the maturity date at the then current interest
rate for one year guarantee periods.
If the contract owner does not specify the renewal option desired, the
Company will select the same guarantee period as has just expired, so long as
such period does not extend beyond the maturity date. In the event a renewal
would extend beyond the maturity date, the Company will select the longest
period that will not extend beyond such date, except in the case of a renewal
within one year of the maturity date in which case the Company will credit
interest up to the maturity date at the then current interest rate for one year
guarantee periods.
Market Value Charge. Any amount withdrawn, transferred or borrowed from
a three or six year investment account prior to the end of the guarantee period
may be subject to a market value charge. A market value charge will be
calculated separately for each investment account affected by a transaction to
which a market value charge may apply. The market value charge for an investment
account will be calculated by multiplying the amount withdrawn or transferred
from the investment account by the adjustment factor described below.
The adjustment factor is determined by the following formula:
0.75x(B-A)xC/12 where:
A- The guaranteed interest rate on the investment account.
B- The guaranteed interest rate available, on the date the request
is processed, for amounts allocated to a new investment account
with the same length of guarantee period as the investment
account from which the amounts are being withdrawn.
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C- The number of complete months remaining to the end of the
guarantee period.
For purposes of applying this calculation, the maximum difference
between "B" and "A" will be 3%. The adjustment factor will never be greater than
2x(A-4%) and never less than zero.
The total market value charge will be the sum of the market value
charges for each investment account being withdrawn. Where the guaranteed rate
available on the date of the request is less than the rate guaranteed on the
investment account from which the amounts are being withdrawn (B-A in the
adjustment factor is negative), there is no market value charge. There is only a
market value charge when interest rates have increased (B-A in the adjustment
factor is positive).
There will be no market value charge on withdrawals from the fixed
account investment options in the following situations: (a) death of the
annuitant; (b) amounts withdrawn to pay fees or charges; (c) amounts withdrawn
from three and six year investment accounts within one month prior to the end of
the guarantee period; and (d) amounts withdrawn in any year that do not exceed
10% of total purchase payments less any prior partial withdrawals in that year.
Notwithstanding application of the foregoing formula, in no event will
the market value charge (i) exceed the earnings attributable to the amount
withdrawn from an investment account, (ii) together with any withdrawal charges
for an investment account be greater than 10% of the amount transferred or
withdrawn, or (iii) reduce the amount payable on withdrawal or transfer below
the amount required under the non-forfeiture laws of the state with jurisdiction
over the contract. The cumulative effect of the market value and withdrawal
charges (or the effect of the withdrawal charge itself) could, however, result
in a contract owner receiving total withdrawal proceeds of less than the
contract owner's investment in the contract.
Transfers. Prior to the maturity date, the contract owner may transfer
amounts among the fixed account investment options and from the fixed account
investment options to the variable account investment options, subject to the
following conditions. An amount in a fixed investment account may not be
transferred until held in such account for at least one year, except transfers
may be made pursuant to the Dollar Cost Averaging program. Consequently, except
as noted above, amounts in one year investment accounts effectively may not be
transferred prior to the end of the guarantee period. Amounts in three and six
year investment accounts may be transferred, after the one year holding period
has been satisfied, but the market value charge described above may apply to
such a transfer. The market value charge, if applicable, will be deducted from
the amount transferred.
The contract owner must specify the fixed account investment option
from or to which a transfer is to be made. Where there are multiple investment
accounts within a fixed account investment option, the contract owner may
designate the particular investment accounts from which a transfer is to be
taken. Absent such a designation, amounts will be withdrawn from the fixed
account investment options on a first-in-first-out basis.
Withdrawals. Prior to the earlier of the maturity date or the death of
the annuitant, the contract owner may make total and partial withdrawals of
amounts held in fixed account investment options. Withdrawals from fixed account
investment options will be made in the same manner and be subject to the same
limitations as set forth under "WITHDRAWALS", plus the following provisions also
apply to withdrawals from fixed account investment options: (1) the Company
reserves the right to defer payment of amounts withdrawn from fixed account
investment options for up to six months from the date it receives the written
withdrawal request (if a withdrawal is deferred for more than 10 days pursuant
to this right, the Company will pay interest on the amount deferred at a rate
not less than 4% per year); (2) if there are multiple investment accounts under
a fixed account investment option, amounts must be withdrawn from such accounts
on a first-in-first-out basis; and (3) the market value charge described above
may apply to withdrawals from the three and six year investment options. In the
event a market value charge applies to a withdrawal from a fixed investment
account, it will be calculated with respect to the full amount in the investment
account and deducted from the amount payable in the case of a total withdrawal.
In the case of a partial withdrawal, the market value charge will be calculated
on the amount requested and deducted, if applicable, from the remaining
investment account value.
Where a contract owner requests a partial withdrawal from a contract in
excess of the amounts in the variable account investment options and does not
specify the fixed account investment options from which the withdrawal is to be
made, such withdrawal will be made from the one, three and six year investment
options in that order. Within such
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sequence, where there are multiple investment accounts within a fixed account
investment option, withdrawals will be made on a first-in-first-out basis.
Withdrawals from the contract may be subject to income tax and a 10%
penalty tax. Withdrawals are permitted from contracts issued in connection with
Section 403(b) qualified plans only under limited circumstances (see "FEDERAL
TAX MATTERS").
Loans. The Company offers a loan privilege only to owners of contracts
issued in connection with Section 403(b) qualified plans that are not subject to
Title I of ERISA. Owners of such contracts may obtain loans using the contract
as the only security for the loan. Owners of such contracts may borrow amounts
allocated to fixed investment accounts in the same manner and subject to the
same limitations as set forth under "LOANS". The market value charge described
above may apply to amounts transferred from three and six year investment
accounts to the loan account in connection with such loans and, if applicable,
will be deducted from the amount so transferred.
Fixed Annuity Options. Subject to the distribution of death benefits
provisions (see "DEATH BENEFIT BEFORE THE MATURITY DATE"), on death, withdrawal
or the maturity date of the contract, the proceeds may be applied to a fixed
annuity option (see "ANNUITY OPTIONS"). The amount of each fixed annuity payment
is determined by applying the portion of the proceeds applied to purchase the
fixed annuity (less any applicable premium taxes), to the appropriate table in
the contract. If the table in use by the Company is more favorable to the
contract owner, the Company will substitute that table. The Company guarantees
the dollar amount of fixed annuity payments.
CHARGES AND DEDUCTIONS
Charges and deductions under the contracts are assessed against
contract values or annuity payments. Currently, there are no deductions made
from purchase payments. In addition, there are deductions from and expenses paid
out of the assets of the Trust portfolios that are described in the accompanying
Prospectus of the Trust.
WITHDRAWAL CHARGES
If a withdrawal is made from the contract before the maturity date, a
withdrawal charge (contingent deferred sales charge) may be assessed against
amounts withdrawn attributable to purchase payments that have been in the
contract less than six complete contract years. There is never a withdrawal
charge with respect to earnings accumulated in the contract, certain other
amounts available without withdrawal charges described below or purchase
payments that have been in the contract more than six complete contract years.
In no event may the total withdrawal charges exceed 6% of the amount invested.
The amount of the withdrawal charge and when it is assessed is discussed below:
1. Each withdrawal from the contract is allocated first to the "amounts
available without withdrawal charges" and second to "unliquidated purchase
payments". In any contract year, the amounts available without withdrawal
charges for that year is the greater of (1) the excess of the contract value on
the date of withdrawal over the unliquidated purchase payments (the accumulated
earnings on the contract) or (2) 10% of total purchase payments less any prior
partial withdrawals in that year. Withdrawals allocated to the amounts available
without withdrawal charges may be withdrawn without the imposition of a
withdrawal charge.
2. If a withdrawal is made for an amount in excess of the amounts
available without withdrawal charges, the excess will be allocated to purchase
payments which will be liquidated on a first-in first-out basis. On any
withdrawal request, the Company will liquidate purchase payments equal to the
amount of the withdrawal request which exceeds the amounts available without
withdrawal charges in the order such purchase payments were made: the oldest
unliquidated purchase payment first, the next purchase payment second, etc.
until all purchase payments have been liquidated.
3. Each purchase payment or portion thereof liquidated in connection
with a withdrawal request is subject to a withdrawal charge based on the length
of time the purchase payment has been in the contract. The amount of the
withdrawal charge is calculated by multiplying the amount of the purchase
payment being liquidated by the applicable withdrawal charge percentage obtained
from the table below.
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<TABLE>
<CAPTION>
NUMBER OF COMPLETE YEARS WITHDRAWAL
PURCHASE PAYMENT IN CHARGE
CONTRACT PERCENTAGE
-------- ----------
<C> <C>
0 6%
1 6%
2 5%
3 4%
4 3%
5 2%
6+ 0%
</TABLE>
The total withdrawal charge will be the sum of the withdrawal charges
for the purchase payments being liquidated.
4. The withdrawal charge is deducted from the contract value remaining
after the contract owner is paid the amount requested, except in the case of a
complete withdrawal when it is deducted from the amount otherwise payable. In
the case of a partial withdrawal, the amount requested from an investment
account may not exceed the value of that investment account less any applicable
withdrawal charge.
5. There is no withdrawal charge on distributions made as a result of
the death of the annuitant or contract owner and no withdrawal charges are
imposed on the maturity date if the contract owner annuitizes as provided in the
contract.
The amount collected from the withdrawal charge will be used to
reimburse the Company for the compensation paid to cover selling concessions to
broker-dealers, preparation of sales literature and other expenses related to
sales activity.
For examples of calculation of the withdrawal charge, see Appendix A.
Withdrawals from the fixed account investment options may be subject to a market
value charge in addition to the withdrawal charge described above (see "FIXED
ACCOUNT INVESTMENT OPTIONS").
Withdrawal Charge Waiver in Connection with Clinton's Administration's
Fiscal Year 1999 Budget Proposal
The Clinton administration's Fiscal Year 1999 Budget proposal dated
February 2, 1998 (the "1999 Budget Proposal") contains proposals to change the
taxation of non-qualified annuity contracts (see "FEDERAL TAX MATTERS -
Introduction"). While it is uncertain whether the 1999 Budget Proposal will
become law, if the 1999 Budget Proposal is enacted substantially as proposed,
withdrawal charges will be waived on purchase payments made on or after February
2, 1998, provided such amounts are withdrawn within 60 days of the date that the
1999 Budget Proposal becomes law. The Company reserves the right to terminate
this withdrawal charge waiver at any time. If the waiver is terminated, purchase
payments made from February 2, 1998 to the termination date of the waiver will
not be subject to withdrawal charge as provided above. This waiver does not
affect a contract owner's right to cancel a contract within the ten day right to
review period (see "OTHER CONTRACT PROVISIONS - Ten Day Right to Review").
Withdrawals may be subject to income tax to the extent of earnings under the
contract and, if made prior to age 59 1/2, generally will be subject to a 10%
IRS penalty tax (see "FEDERAL TAX MATTERS - Taxation of Partial and Full
Withdrawals").
ADMINISTRATION FEES
Each year the Company will deduct an annual administration fee of $30
as partial compensation for the cost of providing all administrative services
attributable to the contracts and the operations of the Variable Account and the
Company in connection with the contracts. Prior to the maturity date, this
administration fee is deducted on the last day of each contract year. It is
withdrawn from each investment option in the same proportion that the value of
such investment option bears to the contract value. If the entire contract is
withdrawn on other than the last day of any contract year, the $30
administration fee will be deducted from the amount paid. During the annuity
period, the fee is deducted on a pro-rata basis from each annuity payment.
A daily charge in an amount equal to 0.15% of the value of each
variable investment account on an annual basis is also deducted from each
sub-account to reimburse the Company for administrative expenses. This asset
based
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<PAGE> 38
administrative charge will not be deducted from the fixed account investment
options. The charge will be reflected in the contract value as a proportionate
reduction in the value of each variable investment account. Because this portion
of the administrative fee is a percentage of assets rather than a flat amount,
larger contracts will in effect pay a higher proportion of this portion of the
administrative expense than smaller contracts.
The Company does not expect to recover from such fees any amount in
excess of its accumulated administrative expenses. Even though administrative
expenses may increase, the Company guarantees that it will not increase the
amount of the administration fees. There is no necessary relationship between
the amount of the administrative charge imposed on a given contract and the
amount of the expense that may be attributed to that contract.
MORTALITY AND EXPENSE RISK CHARGE
The mortality risk assumed by the Company is the risk that annuitants
may live for a longer period of time than estimated. The Company assumes this
mortality risk by virtue of annuity rates incorporated into the contract which
cannot be changed. This assures each annuitant that his longevity will not have
an adverse effect on the amount of annuity payments. Also, the Company
guarantees that if the annuitant dies before the maturity date, it will pay a
minimum death benefit (see "DEATH BENEFIT BEFORE MATURITY DATE"). The expense
risk assumed by the Company is the risk that the administration charges or
withdrawal charge may be insufficient to cover actual expenses.
To compensate it for assuming these risks, the Company deducts from
each of the sub-accounts a daily charge in an amount equal to 1.25% of the value
of the variable investment accounts on an annual basis, consisting of .8% for
the mortality risk and .45% for the expense risk. The charge will be reflected
in the contract value as a proportionate reduction in the value of each variable
investment account. The rate of the mortality and expense risk charge cannot be
increased. If the charge is insufficient to cover the actual cost of the
mortality and expense risks undertaken, the Company will bear the loss.
Conversely, if the charge proves more than sufficient, the excess will be profit
to the Company and will be available for any proper corporate purpose including,
among other things, payment of distribution expenses. The mortality and expense
risk charge is not assessed against the fixed account investment options.
TAXES
The Company reserves the right to charge, or provide for, certain taxes
against purchase payments, contract values or annuity payments. Such taxes may
include premium taxes or other taxes levied by any government entity which the
Company determines to have resulted from the (i) establishment or maintenance of
the Variable Account, (ii) receipt by the Company of purchase payments, (iii)
issuance of the contracts, or (iv) commencement or continuance of annuity
payments under the contracts. The State of New York does not currently assess a
premium tax. In the event New York does impose a premium tax, the Company
reserves the right to pass-through such tax to contract owners. For a discussion
on premium taxes which may be applicable to non-New York residents, see "STATE
PREMIUM TAXES" in the Statement of Additional Information. The Company will
withhold taxes to the extent required by applicable law.
FEDERAL TAX MATTERS
INTRODUCTION
The following discussion of the Federal income tax treatment of the
contract is not exhaustive, does not purport to cover all situations, and is not
intended as tax advice. A qualified tax advisor should always be consulted with
regard to the application of law to individual circumstances. This discussion is
based on the Code, Treasury Department regulations, and interpretations existing
on the date of this Prospectus. These authorities, however, are subject to
change by Congress, the Treasury Department, and judicial decisions.
The 1999 Budget Proposal contains proposals to change the taxation of
non-qualified annuity contracts. The 1999 Budget Proposal proposes to tax
exchanges of variable contracts for fixed contracts, exchanges of fixed
contracts for variable contracts, exchanges of variable contracts for variable
contracts and reallocation within variable contracts. Currently, owners of
annuity contracts may exchange their contracts for another annuity without
currently incurring tax, and reallocations among investment options are not
treated as a taxable exchange. In addition, the 1999 Budget Proposal proposes
that the contract
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owner's basis in annuity contracts be reduced annually by 1.25% of the cash
value for purposes of determining the taxable gain on surrenders, withdrawals,
and all annuity payments except those made for life at the rates guaranteed in
the contract. Currently, basis in annuity contracts is not reduced by this
amount. The 1999 Budget Proposal states that it generally would apply only to
contracts issued after the date of first congressional committee action, but
that the new exchange and reallocation rules would also apply to any existing
contract that was materially changed. While it is uncertain whether the 1999
Budget Proposal will become law, if the 1999 Budget Proposal is enacted
substantially as proposed, withdrawal charges will be waived (see "CHARGES AND
DEDUCTIONS - Reduction or Elimination of Withdrawal Charge").
This discussion does not address state or local tax consequences
associated with the purchase of a contract. In addition, THE COMPANY MAKES NO
GUARANTEE REGARDING ANY TAX TREATMENT -- FEDERAL, STATE, OR LOCAL -OF ANY
CONTRACT OR OF ANY TRANSACTION INVOLVING A CONTRACT.
THE COMPANY'S TAX STATUS
The Company is taxed as a life insurance company under the Code. Since
the operations of the Variable Account are a part of, and are taxed with, the
operations of the Company, the Variable Account is not separately taxed as a
"regulated investment company" under the Code. Under existing Federal income tax
laws, investment income and capital gains of the Variable Account are not taxed
to the extent they are applied under a contract. The Company does not anticipate
that it will incur any Federal income tax liability attributable to such income
and gains of the Variable Account, and therefore the Company does not intend to
make provision for any such taxes. If the Company is taxed on investment income
or capital gains of the Variable Account, then the Company may impose a charge
against the Variable Account in order to make provision for such taxes.
TAXATION OF ANNUITIES IN GENERAL
TAX DEFERRAL DURING ACCUMULATION PERIOD
Under existing provisions of the Code, except as described below, any
increase in the contract value is generally not taxable to the contract owner or
annuitant until received, either in the form of annuity payments, as
contemplated by the contract, or in some other form of distribution. However,
certain requirements must be satisfied in order for this general rule to apply,
including: (1) the contract must be owned by an individual (or treated as owned
by an individual), (2) the investments of the Variable Account must be
"adequately diversified" in accordance with Treasury Department regulations, (3)
the Company, rather than the owner, must be considered the owner of the assets
of the Variable Account for Federal tax purposes, and (4) the contract must
provide for appropriate amoritization, through annuity payments, of the
contract's purchase payments and earnings, e.g., the maturity date must not
occur at too advanced an age.
Non-Natural Owners. As a general rule, deferred annuity contracts held
by "non-natural persons" such as a corporation, trust or other similar entity,
as opposed to a natural person, are not treated as annuity contracts for Federal
income tax purposes. The investment income on such contracts is taxed as
ordinary income that is received or accrued by the owner of the contract during
the taxable year. There are several exceptions to this general rule for
non-natural contract owners. First, contracts will generally be treated as held
by a natural person if the nominal owner is a trust or other entity which holds
the contract as an agent for a natural person. However, this special exception
will not apply in the case of any employer who is the nominal owner of an
annuity contract under a non-qualified deferred compensation arrangement for its
employees.
In addition, exceptions to the general rule for non-natural contract
owners will apply with respect to (1) contracts acquired by an estate of a
decedent by reason of the death of the decedent, (2) certain qualified
contracts, (3) certain contracts purchased by employers upon the termination of
certain qualified plans, (4) certain contracts used in connection with
structured settlement agreements, and (5) contracts purchased with a single
premium when the annuity starting date (as defined in the tax law) is no later
than a year from purchase of the annuity and substantially equal periodic
payments are made, not less frequently than annually, during the annuity period.
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Loss of Interest Deduction where Contracts are held by or for the
Benefit of Certain Non-Natural Persons. In the case of contracts issued after
June 8, 1997 to a non-natural taxpayer (such as a corporation or a trust) or
held for the benefit of such an entity, recent changes in the tax law may result
in otherwise deductible interest no longer being deductible by the entity,
regardless of whether the interest relates to debt used to purchase or carry the
contract. However, this interest deduction disallowance does not affect
contracts where the income on such contracts is treated as ordinary income that
is received or accrued by the owner during the taxable year. Entities that are
considering purchasing the contract, or entities that will be beneficiaries
under a contract, should consult a tax advisor.
Diversification Requirements. For a contract to be treated as an
annuity for Federal income tax purposes, the investments of the Variable Account
must be "adequately diversified" in accordance with Treasury Department
Regulations. The Secretary of the Treasury has issued regulations which
prescribe standards for determining whether the investments of the Variable
Account are "adequately diversified." If the Variable Account failed to comply
with these diversification standards, a contract would not be treated as an
annuity contract for Federal income tax purposes and the contract owner would
generally be taxable currently on the excess of the contract value over the
premiums paid for the contract.
Although the Company does not control the investments of the Trust, it
expects that the Trust will comply with such regulations so that the Variable
Account will be considered "adequately diversified."
Ownership Treatment. In certain circumstances, a variable annuity
contract owner may be considered the owner, for Federal income tax purposes, of
the assets of the separate account used to support his or her contract. In those
circumstances, income and gains from such separate account assets would be
includible in the contract owner's gross income. The Internal Revenue Service
(the "IRS") has stated in published rulings that a variable contract owner will
be considered the owner of separate account assets if the owner possesses
incidents of ownership in those assets, such as the ability to exercise
investment control over the assets. In addition, the Treasury Department
announced, in connection with the issuance of regulations concerning investment
diversification, that those regulations "do not provide guidance concerning the
circumstances in which investor control of the investments of a segregated asset
account may cause the investor, rather than the insurance company, to be treated
as the owner of the assets in the account." This announcement also stated that
guidance would be issued by way of regulations or rulings on the "extent to
which policyholders may direct their investments to particular sub-accounts [of
a separate account] without being treated as owners of the underlying assets."
As of the date of this Prospectus, no such guidance has been issued.
The ownership rights under this contract are similar to, but different
in certain respects from, those described by the IRS in rulings in which it was
determined that contract owners were not owners of separate account assets. For
example, the owner of this contract has the choice of many more investment
options to which to allocate premiums and contract values, and may be able to
transfer among investment options more frequently than in such rulings. These
differences could result in the contract owner being treated as the owner of the
assets of the Variable Account and thus subject to current taxation on the
income and gains from those assets. In addition, the Company does not know what
standards will be set forth in the regulations or rulings which the Treasury
Department has stated it expects to issue. The Company therefore reserves the
right to modify the contract as necessary to attempt to prevent the contract
owner from being considered the owner of the assets of the Variable Account.
Delayed Maturity Dates. If the contract's maturity date occurs (or is
scheduled to occur) at a time when the annuitant has reached an advanced age,
e.g., past age 85, it is possible that the contract would not be treated as an
annuity for Federal income tax purposes. In that event, the income and gains
under the contract could be currently includible in the owner's income.
The remainder of this discussion assumes that the contract will be
treated as an annuity contract for Federal income tax purposes and that the
Company will be treated as the owner of the Variable Account assets.
TAXATION OF PARTIAL AND FULL WITHDRAWALS
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In the case of a partial withdrawal, amounts received are includible in
income to the extent the contract value before the withdrawal exceeds the
"investment in the contract." In the case of a full withdrawal, amounts received
are includible in income to the extent they exceed the "investment in the
contract." For these purposes the investment in the contract at any time equals
the total of the purchase payments made under the contract to that time (to the
extent such payments were neither deductible when made nor excludable from
income as, for example, in the case of certain employer contributions to
qualified plans) less any amounts previously received from the contract which
were not included in income.
Other than in the case of certain qualified contracts, any amount
received as a loan under a contract, and any assignment or pledge (or agreement
to assign or pledge) any portion of the contract value, is treated as a
withdrawal of such amount or portion. (Loans, assignments and pledges are
permitted only in limited circumstances under qualified contracts.) The
investment in the contract is increased by the amount includible in income with
respect to such assignment or pledge, though it is not affected by any other
aspect of the assignment or pledge (including its release). If an individual
transfers his or her interest in an annuity contract without adequate
consideration to a person other than the owner's spouse (or to a former spouse
incident to divorce), the owner will be taxed on the difference between the
"contract value" and the "investment in the contract" at the time of transfer.
In such case, the transferee's investment in the contract will be increased to
reflect the increase in the transferor's income.
The contract provides a death benefit that in certain circumstances may
exceed the greater of the purchase payments and the contract value. As described
elsewhere in this Prospectus, the Company imposes certain charges with respect
to the death benefit. It is possible that those charges (or some portion
thereof) could be treated for Federal income tax purposes as a partial
withdrawal from the contract.
There may be special income tax issues present in situations where the
owner and the annuitant are not the same person and are not married to one
another. A tax advisor should be consulted in those situations.
TAXATION OF ANNUITY PAYMENTS
Normally, the portion of each annuity payment taxable as ordinary
income is equal to the excess of the payment over the exclusion amount. In the
case of variable annuity payments, the exclusion amount is the "investment in
the contract" (defined above) allocated to the variable annuity option, adjusted
for any period certain or refund feature, when payments begin to be made divided
by the number of payments expected to be made (determined by Treasury Department
regulations which take into account the annuitant's life expectancy and the form
of annuity benefit selected). In the case of fixed annuity payments, the
exclusion amount is the amount determined by multiplying (1) the payment by (2)
the ratio of the investment in the contract allocated to the fixed annuity
option, adjusted for any period certain or refund feature, to the total expected
value of annuity payments for the term of the contract (determined under
Treasury Department regulations). A simplified method of determining the taxable
portion of annuity payments applies to contracts issued in connection with
certain qualified plans other than IRAs.
Once the total amount of the investment in the contract is excluded
using these ratios, annuity payments will be fully taxable. If annuity payments
cease because of the death of the annuitant and before the total amount of the
investment in the contract is recovered, the unrecovered amount generally will
be allowed as a deduction to the annuitant in his or her last taxable year.
TAXATION OF DEATH BENEFIT PROCEEDS
Amounts may be distributed from a contract because of the death of an
owner or the annuitant. Prior to the maturity date, such death benefit proceeds
are includible in income as follows: (1) if distributed in a lump sum, they are
taxed in the same manner as a full withdrawal, as described above, or (2) if
distributed under an annuity option, they are taxed in the same manner as
annuity payments, as described above. After the maturity date, where a
guaranteed period exists under an annuity option and the annuitant dies before
the end of that period, payments made to the beneficiary for the remainder of
that period are includible in income as follows: (1) if received in a lump sum,
they are includible in income to the extent that they exceed the unrecovered
investment in the contract at that time, or (2) if distributed in accordance
with the existing annuity option selected, they are fully
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excludable from income until the remaining investment in the contract is deemed
to be recovered, and all annuity payments thereafter are fully includible in
income.
PENALTY TAX ON PREMATURE DISTRIBUTIONS
There is a 10% penalty tax on the taxable amount of any payment from a
non-qualified contract unless the payment is: (a) received on or after the
contract owner reaches age 59 1/2; (b) attributable to the contract owner's
becoming disabled (as defined in the tax law); (c) made to a beneficiary on or
after the death of the contract owner or, if the contract owner is not an
individual, on or after the death of the primary annuitant (as defined in the
tax law); (d) made as a series of substantially equal periodic payments (not
less frequently than annually) for the life (or life expectancy) of the
annuitant or for the joint lives (or joint life expectancies) of the annuitant
and designated beneficiary (as defined in the tax law); (e) made under an
annuity contract purchased with a single premium when the annuity starting date
(as defined in the tax law) is no later than a year from purchase of the annuity
and substantially equal periodic payments are made, not less frequently than
annually, during the annuity period; or (f) made with respect to certain
annuities issued in connection with structured settlement agreements. (A similar
penalty tax, applicable to distributions from certain qualified contracts, is
discussed below.)
AGGREGATION OF CONTRACTS
In certain circumstances, the amount of an annuity payment or a
withdrawal from a contract that is includible in income may be determined by
combining some or all of the non-qualified contracts owned by an individual. For
example, if a person purchases a contract offered by this Prospectus and also
purchases at approximately the same time an immediate annuity, the IRS may treat
the two contracts as one contract. In addition, if a person purchases two or
more deferred annuity contracts from the same insurance company (or its
affiliates) during any calendar year, all such contracts will be treated as one
contract. The effects of such aggregation are not clear; however, it could
affect the amount of a withdrawal or an annuity payment that is taxable and the
amount which might be subject to the penalty tax described above.
QUALIFIED RETIREMENT PLANS
The contracts are also designed for use in connection with certain
types of retirement plans which receive favorable treatment under the Code.
Numerous special tax rules apply to the participants in such qualified plans and
to the contracts used in connection with such qualified plans. Therefore, no
attempt is made in this Prospectus to provide more than general information
about use of the contract with the various types of qualified plans.
The tax rules applicable to qualified plans vary according to the type
of plan and the terms and conditions of the plan itself. For example, for both
withdrawals and annuity payments under certain qualified contracts, there may be
no "investment in the contract" and the total amount received may be taxable.
Also, loans from qualified contracts, where allowed, are subject to a variety of
limitations, including restrictions as to the amount that may be borrowed, the
duration of the loan, and the manner in which the loan must be repaid. (Owners
should always consult their tax advisors and retirement plan fiduciaries prior
to exercising their loan privileges.) Both the amount of the contribution that
may be made, and the tax deduction or exclusion that the owner may claim for
such contribution, are limited under qualified plans. If this contract is used
in connection with a qualified plan, the owner and annuitant must be the same
individual. If a co-annuitant is named, all distributions made while the
annuitant is alive must be made to the annuitant. Also, if a co-annuitant is
named who is not the annuitant's spouse, the annuity options which are available
may be limited, depending on the difference in ages between the annuitant and
co-annuitant. Furthermore, the length of any guarantee period may be limited in
some circumstances to satisfy certain minimum distribution requirements under
the Code.
In addition, special rules apply to the time at which distributions
must commence and the form in which the distributions must be paid. For example,
failure to comply with minimum distribution requirements applicable to qualified
plans will result in the imposition of an excise tax. This excise tax generally
equals 50% of the amount by which a minimum required distribution exceeds the
actual distribution from the qualified plan. In the case of IRAs, distributions
of minimum amounts (as specified in the tax law) must generally commence by
April 1 of the calendar year following the calendar year in which the owner
attains age 70 1/2. In the case of certain other
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qualified plans, distributions of such minimum amounts must generally commence
by the later of this date or April 1 of the calendar year following the calendar
year in which the employee retires.
There is also a 10% penalty tax on the taxable amount of any payment
from certain qualified contracts. (The amount of the penalty tax is 25% of the
taxable amount of any payment received from a "SIMPLE retirement account" during
the 2 year period beginning on the date the individual first participated in any
qualified salary reduction arrangement (as defined in the tax law) maintained by
the individual's employer.) There are exceptions to this penalty tax which vary
depending on the type of qualified plan. In the case of an "Individual
Retirement Annuity" or an "IRA", including a "SIMPLE IRA," exceptions provide
that the penalty tax does not apply to a payment (a) received on or after the
contract owner reaches age 59 1/2, (b) received on or after the owner's death or
because of the owner's disability (as defined in the tax law), or (c) made as a
series of substantially equal periodic payments (not less frequently than
annually) for the life (or life expectancy) of the owner or for the joint lives
(or joint life expectancies) of the owner and designated beneficiary (as defined
in the tax law). These exceptions, as well as certain others not described
herein, generally apply to taxable distributions from other qualified plans
(although, in the case of plans qualified under Sections 401 and 403, exception
"c" above for substantially equal periodic payments applies only if the owner
has separated from service). In addition, the penalty tax does not apply to
certain distributions from IRAs taken after December 31, 1997 which are used for
qualified first time home purchasers or for higher education expenses. Special
conditions must be met to qualify for these two exceptions to the penalty tax.
Owners wishing to take a distribution form an IRA for these purposes should
consult their tax advisor.
When issued in connection with a qualified plan, a contract will be
amended as generally necessary to conform to the requirements of the plan.
However, contract owners, annuitants, and beneficiaries are cautioned that the
rights of any person to any benefits under qualified plans may be subject to the
terms and conditions of the plans themselves, regardless of the terms and
conditions of the contract. In addition, the Company shall not be bound by terms
and conditions of qualified plans to the extent such terms and conditions
contradict the contract, unless the Company consents.
QUALIFIED PLAN TYPES
Following are brief descriptions of various types of qualified plans in
connection with which the Company may issue a contract.
Individual Retirement Annuities. Section 408 of the Code permits
eligible individuals to contribute to an individual retirement program known as
an "IRA." IRAs are subject to limits on the amounts that may be contributed, the
persons who may be eligible and on the time when distributions may commence.
Also, distributions from certain other types of qualified retirement plans may
be "rolled over" on a tax-deferred basis into an IRA. The contract may not,
however, be used in connection with an "Education IRA" under Section 530 of the
Code.
IRAs generally may not provide life insurance coverage, but they may
provide a death benefit that equals the greater of the premiums paid and the
contract value. The contract provides a death benefit that in certain
circumstances may exceed the greater of the purchase payments and the contract
value. It is possible that the contract's death benefit could be viewed as
providing life insurance coverage with the result that the contract would not be
viewed as satisfying the requirements of an IRA.
Simplified Employee Pensions (SEP-IRAs). Section 408(k) of the Code
allows employers to establish simplified employee pension plans for their
employees, using the employees' IRAs for such purposes, if certain criteria are
met. Under these plans the employer may, within specified limits, make
deductible contributions on behalf of the employees to IRAs. As discussed above
(see Individual Retirement Annuities), there is some uncertainty regarding the
treatment of the contract's death benefit for purposes of the tax rules
governing IRAs (which would include SEP-IRAs). Employers intending to use the
contract in connection with such plans should seek competent advice.
SIMPLE IRAs. Section 408(p) of the Code permits certain small employers
to establish "SIMPLE retirement accounts," including SIMPLE IRAs, for their
employees. Under SIMPLE IRAs, certain deductible
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contributions are made by both employees and employers. SIMPLE IRAs are subject
to various requirements, including limits on the amounts that may be
contributed, the persons who may be eligible, and the time when distributions
may commence. As discussed above (see Individual Retirement Annuities), there is
some uncertainty regarding the proper characterization of the contract's death
benefit for purposes of the tax rules governing IRAs (which would include SIMPLE
IRAs). Employers intending to use the contract in connection with such plans
should seek competent advice.
Corporate and Self-Employed ("H.R. 10" and "Keogh") Pension and
Profit-Sharing Plans. Sections 401(a) and 403(a) of the Code permit corporate
employers to establish various types of tax-favored retirement plans for
employees. The Self-Employed Individuals' Tax Retirement Act of 1962, as
amended, commonly referred to as "H.R. 10" or "Keogh", permits self-employed
individuals also to establish such tax-favored retirement plans for themselves
and their employees. Such retirement plans may permit the purchase of the
contracts in order to provide benefits under the plans. The contract provides a
death benefit that in certain circumstances may exceed the greater of the
purchase payments and the contract value. It is possible that such death benefit
could be characterized as an incidental death benefit. There are limitations on
the amount of incidental benefits that may be provided under pension and profit
sharing plans. In addition, the provision of such benefits may result in current
taxable income to participants. Employers intending to use the contract in
connection with such plans should seek competent advice.
Tax-Sheltered Annuities. Section 403(b) of the Code permits public
school employees and employees of certain types of charitable, educational and
scientific organizations specified in Section 501(c)(3) of the Code to have
their employers purchase annuity contracts for them and, subject to certain
limitations, to exclude the amount of purchase payments from gross income for
tax purposes. These annuity contracts are commonly referred to as "tax-sheltered
annuities". Purchasers of the contracts for such purposes should seek competent
advice as to eligibility, limitations on permissible amounts of purchase
payments and other tax consequences associated with the contracts. In
particular, purchasers should consider that the contract provides a death
benefit that in certain circumstances may exceed the greater of the purchase
payments and the contract value. It is possible that such death benefit could be
characterized as an incidental death benefit. If the death benefit were so
characterized, this could result in currently taxable income to purchasers. In
addition, there are limitations on the amount of incidental benefits that may be
provided under a tax-sheltered annuity. Even if the death benefit under the
contract were characterized as an incidental death benefit, it is unlikely to
violate those limits unless the purchaser also purchases a life insurance
contract as part of his or her tax-sheltered annuity plan.
Tax-sheltered annuity contracts must contain restrictions on
withdrawals of (i) contributions made pursuant to a salary reduction agreement
in years beginning after December 31, 1988, (ii) earnings on those
contributions, and (iii) earnings after 1988 on amounts attributable to salary
reduction contributions (and earnings on those contributions) held as of the
last day of the year beginning before January 1, 1989. These amounts can be paid
only if the employee has reached age 59 1/2, separated from service, died, or
become disabled (within the meaning of the tax law), or in the case of hardship
(within the meaning of the tax law). Amounts permitted to be distributed in the
event of hardship are limited to actual contributions; earnings thereon cannot
be distributed on account of hardship. Amounts subject to the withdrawal
restrictions applicable to Section 403(b)(7) custodial accounts may be subject
to more stringent restrictions. (These limitations on withdrawals do not apply
to the extent the Company is directed to transfer some or all of the contract
value to the issuer of another tax-sheltered annuity or into a Section 403(b)(7)
custodial account.)
Roth IRAs. Recently enacted Section 408A of the Code permits eligible
individuals to contribute to a type of IRA known as a "Roth IRA." Roth IRAs
differ from other IRAs in several respects. Among the differences is that,
although contributions to a Roth IRA are not deductible, "qualified
distributions" from a Roth IRA will be excludable from income. Additionally, the
eligibility and mandatory distribution requirements for Roth IRAs differ from
non-Roth IRAs. Furthermore, a rollover may be made to a Roth IRA only if it is a
"qualified rollover contribution." A "qualified rollover contribution" is a
rollover contribution to a Roth IRA from another Roth IRA or from a non-Roth
IRA, but only if such rollover contribution meets the rollover requirements for
IRAs under section 408(d)(3) of the Code. In the case of a qualified rollover
contribution or a transfer from a non-Roth IRA to a Roth IRA, any portion of the
amount rolled over which would be includible in gross income were it not part of
a qualified rollover contribution or
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a nontaxable transfer will be includible in gross income. However, the 10
percent penalty tax on premature distributions generally will not apply.
All or part of amounts in a non-Roth IRA may be converted into a Roth
IRA. Such a conversion can be made without taking an actual distribution from
the IRA. For example, an individual may make a conversion by notifying the IRA
issuer or trustee, whichever is applicable. The conversion of an IRA to a Roth
IRA is a special type of qualified rollover distribution. Hence, the IRA
participant must be eligible to make a qualified rollover distribution in order
to convert an IRA to a Roth IRA. A conversion typically will result in the
inclusion of some or all of the IRA value in gross income, as described above.
Persons with adjusted gross incomes in excess of $100,000 or who are married and
file a separate return are not eligible to make a qualified rollover
contribution or a transfer in a taxable year from a non-Roth IRA to a Roth IRA.
Any "qualified distribution" from a Roth IRA is excludible from gross
income. A "qualified distribution" is a payment or distribution which satisfies
two requirements. First, the payment or distribution must be (a) made after the
Owner attains age 59 1/2, (b) made after the Owner's death, (c) attributable to
the Owner being disabled, or (d) a qualified first-time homebuyer distribution
within the meaning of section 72(t)(2)(F) of the Code. Second, the payment or
distribution must be made in a taxable year that is at least five years after
(a) the first taxable year for which a contribution was made to any Roth IRA
established for the Owner, or (b) in the case of a payment or distribution
properly allocable to a qualified rollover contribution from a non-Roth IRA (or
income allocable thereto), the taxable year in which the rollover contribution
was made. A distribution from a Roth IRA which is not a qualified distribution
is generally taxed in the same manner as a distribution from non-Roth IRAs.
Distributions from a Roth IRA need not commence at age 70 1/2.
As described above (see Individual Retirement Annuities), there is some
uncertainty regarding the proper characterization of the Contract's death
benefit for purposes of the tax rules governing IRAs (which include Roth IRAs).
Persons intending to use the Contract in connection with a Roth IRA should seek
competent advice.
DIRECT ROLLOVERS
If the contract is used in connection with a retirement plan that is
qualified under Sections 401(a), 403(a), or 403(b) of the Code, any "eligible
rollover distribution" from the contract will be subject to "direct rollover"
and mandatory withholding requirements. An eligible rollover distribution
generally is any taxable distribution from such qualified plans, excluding
certain amounts such as (i) minimum distributions required under Section
401(a)(9) of the Code, and (ii) certain distributions for life, life expectancy,
or for 10 years or more which are part of a "series of substantially equal
periodic payments."
Under these requirements, Federal income tax equal to 20% of the
eligible rollover distribution will be withheld from the amount of the
distribution. Unlike withholding on certain other amounts distributed from the
contract, discussed below, the owner cannot elect out of withholding with
respect to an eligible rollover distribution. However, this 20% withholding will
not apply if, instead of receiving the eligible rollover distribution, the
distributee elects to have it directly transferred to certain qualified plans.
Prior to receiving an eligible rollover distribution, a notice will be provided
explaining generally the direct rollover and mandatory withholding requirements
and how to avoid the 20% withholding by electing a direct rollover.
FEDERAL INCOME TAX WITHHOLDING
The Company will withhold and remit to the U.S. Government a part of
the taxable portion of each distribution made under a contract unless the
distributee notifies the Company at or before the time of the distribution that
he or she elects not to have any amounts withheld. In certain circumstances, the
Company may be required to withhold tax. The withholding rates applicable to the
taxable portion of periodic annuity payments are the same as the withholding
rates generally applicable to payments of wages. In addition, the withholding
rate applicable to the taxable portion of non-periodic payments (including
withdrawals prior to the maturity date and rollovers from non-Roth IRAs to Roth
IRAs) is 10%. As discussed above, the withholding rate applicable to eligible
rollover distributions is 20%.
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GENERAL MATTERS
PERFORMANCE DATA
Each of the sub-accounts may in its advertising and sales materials
quote total return figures. The sub-accounts may advertise both "standardized"
and "non-standardized" total return figures, although standardized figures will
always accompany non-standardized figures. Non-standardized total return figures
may be quoted assuming both (i) redemption at the end of the time period and
(ii) not assuming redemption at the end of the time period. Standardized figures
include total return figures from: (i) the inception date of the sub-account of
the Variable Account which invests in the portfolio or (ii) ten years, whichever
period is shorter. Non-standardized figures include total return numbers from:
(i) inception date of the portfolio or (ii) ten year, whichever period is
shorter. Such figures will always include the average annual total return for
recent one year and, when applicable, five and ten year periods and, where less
than ten years, the inception date of the sub-account, in the case of
standardized returns, and the inception date of the portfolio, in the case of
non-standardized returns. Where the period since inception is less than one
year, the total return quoted will be the aggregate return for the period. The
average annual total return is the average annual compounded rate of return that
equates a purchase payment to the market value of such purchase payment on the
last day of the period for which such return is calculated. The aggregate total
return is the percentage change (not annualized) that equates a purchase payment
to the market value of such purchase payment on the last day of the period for
which such return is calculated. For purposes of the calculations it is assumed
that an initial payment of $1,000 is made on the first day of the period for
which the return is calculated. For total return figures quoted for periods
prior to the commencement of the offering of this contract, October 31, 1992,
standardized performance data will be the historical performance of the Trust
portfolio from the date the applicable sub-account of the Variable Account first
became available for investment under other contracts offered by the Company,
adjusted to reflect current contract charges. In the case of non-standardized
performance, performance figures will be the historical performance of the Trust
portfolio from the inception date of the portfolio (or in the case of the Trust
portfolios created in connection with the merger of Manulife Series Fund, Inc.
into the Trust, the inception date of the applicable predecessor Manulife Series
Fund portfolio), adjusted to reflect current contract charges. Past performance
figures quoted are not intended to indicate future performance of any
sub-account. More detailed information on the computations is set forth in the
Statement of Additional Information.
FINANCIAL STATEMENTS
Financial Statements for the Variable Account and for the Company are
contained in the Statement of Additional Information.
ASSET ALLOCATION AND TIMING SERVICES
The Company is aware that certain third parties may offer asset
allocation and timing services in connection with the contracts. In certain
cases the Company may agreed to honor transfer instructions from such asset
allocation and timing services where it has received powers of attorney, in a
form acceptable to it, from the contract owners participating in the service.
THE COMPANY DOES NOT ENDORSE, APPROVE OR RECOMMEND SUCH SERVICES IN ANY WAY AND
CONTRACT OWNERS SHOULD BE AWARE THAT FEES PAID FOR SUCH SERVICES ARE SEPARATE
AND IN ADDITION TO FEES PAID UNDER THE CONTRACTS.
DISTRIBUTION OF CONTRACTS
MSS, located at 73 Tremont Street, Boston, Massachusetts 02108, a
Delaware limited liability company controlled by the parent of the Company, is
the principal underwriter of the contracts in addition to providing advisory
services to the Trust. MSS is a broker-dealer registered under the Securities
Exchange Act of 1934 (the "1934 Act") and a member of the National Association
of Securities Dealers, Inc. (the "NASD").
Sales of the contracts will be made by registered representatives of
broker-dealers authorized by MSS and the company to sell the contracts. Such
registered representatives will also be licensed insurance agents of the
Company. MSS will pay distribution compensation to selling brokers in varying
amounts which under
41
<PAGE> 47
normal circumstances are not expected to exceed 1% of purchase payments plus
0.80% of the contract value per year commencing one year after each initial
purchase payment. MSS may from time to time pay additional compensation pursuant
to promotional contests. Additionally, in some circumstances, MSS will be
compensated for providing marketing support for the distribution of the
contracts.
CONTRACT OWNER INQUIRIES
All contract owner inquiries should be directed to the Company's
Annuity Service Office at Corporate Center at Rye, 555 Theodore Fremd Avenue,
Suite C-209, Rye, New York 10580-9966.
CONFIRMATION STATEMENTS
Owners will be sent confirmation statements for certain transactions in
their account. Owners should carefully review these statements to verify their
accuracy. Any mistakes should immediately be reported to the Company's Annuity
Service Office. If the owner fails to notify the Company's Annuity Service
Office of any mistake within 60 days of the mailing of the confirmation
statement, the owner will be deemed to have ratified the transaction.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Variable Account is a party
or to which the assets of the Variable Account are subject. Neither the Company
nor MSS are involved in any litigation that is of material importance in
relation to their total assets or that relates to the Variable Account.
OTHER INFORMATION
A registration statement has been filed with the SEC under the 1933 Act
and the 1940 Act with respect to the variable portion of the contracts discussed
in this Prospectus. Not all the information set forth in the registration
statement, amendments and exhibits thereto has been included in this Prospectus.
Statements contained in this Prospectus or the Statement of Additional
Information concerning the content of the contracts and other legal instruments
are only summaries. For a complete statement of the terms of these documents,
reference should be made to the instruments filed with the SEC.
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
General Information and History............................................ 3
Performance Data........................................................... 3
State Premium Taxes........................................................ 6
Services .................................................................. 7
Independent Auditors.............................................. 7
Servicing Agent................................................... 7
Principal Underwriter............................................. 7
Cancellation of Contract.......................................... 7
Appendix A: State Premium Taxes............................................ 8
Financial Statements....................................................... 9
42
<PAGE> 48
APPENDIX A
EXAMPLES OF CALCULATION OF WITHDRAWAL CHARGE
Example 1 - Assume a single payment of $50,000 is made into the contract, no
transfers are made, no additional payments are made and there are no partial
withdrawals. The table below illustrates four examples of the withdrawal charges
that would be imposed if the contract is completely withdrawn, based on
hypothetical contract values.
<TABLE>
HYPOTHETICAL AMOUNT PURCHASE
CONTRACT CONTRACT AVAILABLE WITHOUT PAYMENTS WITHDRAWAL CHARGE
YEAR VALUE WITHDRAWAL CHARGES LIQUIDATED PERCENT AMOUNT
- ---- ----- ------------------ ---------- ------- ------
<C> <C> <C> <C> <C> <C>
1 55,000 5,000(a) 50,000 6% 3,000
3 50,500 5,000(b) 45,500 5% 2,275
5 60,000 10,000(c) 50,000 3% 1,500
7 70,000 20,000(d) 50,000 0% 0
</TABLE>
(a) During any contract year the amount that may be withdrawn without withdrawal
charges is the greater of accumulated earnings, or 10% of the total purchase
payments made under the contract less any prior partial withdrawals in that
contract year. In the first contract year the earnings under the contract and
10% of purchase payments both equal $5,000. Consequently, on total withdrawal
$5,000 is withdrawn without withdrawal charges, the entire $50,000 purchase
payment is liquidated and the withdrawal charge is assessed against such
liquidated purchase payment (contract value less withdrawal amount without
charges).
(b) In the example for the third contract year, the accumulated earnings of $500
is less than 10% of purchase payments, therefore the amount that may be
withdrawn without withdrawal charges is equal to 10% of purchase payments
($50,000 X 10% = $5,000) and the withdrawal charge is only applied to purchase
payments liquidated (contract value less withdrawal amount without charges).
(c) In the example for the fifth contract year, the accumulated earnings of
$10,000 is greater than 10% of purchase payments ($5,000), therefore the amount
that may be withdrawn without withdrawal charges is equal to the accumulated
earnings of $10,000 and the withdrawal charge is applied to the purchase
payments liquidated (contract value less withdrawal amount without charges).
(d) There is no withdrawal charge on any purchase payments liquidated that have
been in the contract for at least 6 years.
43
<PAGE> 49
Example 2 - Assume a single payment of $50,000 is made into the
contract, no transfers are made, no additional payments are made and there are a
series of four partial withdrawals made during the third contract year of
$2,000, $5,000, $7,000, and $8,000.
<TABLE>
<CAPTION>
HYPOTHETICAL PARTIAL WITHDRAW WITHDRAWAL PURCHASE
CONTRACT REQUESTED AMOUNT PAYMENTS WITHDRAWAL CHARGE
VALUE WITHOUT CHARGES LIQUIDATED PERCENT AMOUNT
<C> <C> <C> <C> <C> <C>
65,000 2,000 15,000(a) 0 5% 0
49,000 5,000 3,000(b) 2,000 5% 100
52,000 7,000 4,000(c) 3,000 5% 150
44,000 8,000 0(d) 8,000 5% 400
</TABLE>
(a) The amount that can be withdrawn without withdrawal charges during any
contract year is the greater of the contract value less the unliquidated
purchase payments (accumulated earnings), or 10% of purchase payments less 100%
of all prior withdrawals in that contract year. For the first example,
accumulated earnings of $15,000 is the amount that can be withdrawn without
withdrawal charges since it is greater than 10% of purchase payments less prior
withdrawals ($5,000-0). The amount requested ($2,000) is less than the amount
that can be withdrawn without withdrawal charges so no purchase payments are
liquidated and no withdrawal charge applies.
(b) The contract has negative accumulated earnings ($49,000-$50,000), so the
amount that can be withdrawn without withdrawal charges is limited to 10% of
purchase payments less all prior withdrawals. Since $2,000 has already been
withdrawn earlier in the current contract year, the remaining amount that can be
withdrawn without withdrawal charges during the third contract year is $3,000.
The $5,000 partial withdrawal will consist of $3,000 amount that can be
withdrawn without withdrawal charge, and the remaining $2,000 will be subject to
a withdrawal charge and result in purchase payments being liquidated. The
remaining unliquidated purchase payments are $48,000.
(c) The contract has increased in value to $52,000. The unliquidated purchase
payments are $48,000 so the accumulated earnings are $4,000, which is greater
than 10% of purchase payments less prior withdrawals ($5,000-$2,000-$5,000<0).
Hence the amount that can be withdrawn without withdrawal charges is $4,000.
Therefore, $3,000 of the $7,000 partial withdrawal will be subject to a
withdrawal charge and result in purchase payments being liquidated. The
remaining unliquidated purchase payments are $45,000.
(d) The amount that can be withdrawn without withdrawal charges is zero since
the contract has negative accumulated earnings ($44,000-$45,000) and the full
10% of purchase payments ($5,000) has already been utilized. The full amount of
$8,000 will result in purchase payments being liquidated subject to a withdrawal
charge. At the beginning of the next contract year the full 10% of purchase
payments would be available again for withdrawal requests during that year.
44
<PAGE> 50
PART B
INFORMATION REQUIRED IN A
STATEMENT OF ADDITIONAL INFORMATION
<PAGE> 51
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
THE MANUFACTURERS LIFE INSURANCE COMPANY OF
NEW YORK SEPARATE ACCOUNT A
- --------------------------------------------------------------------------------
of
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
FLEXIBLE PURCHASE PAYMENT INDIVIDUAL DEFERRED
COMBINATION FIXED AND VARIABLE ANNUITY CONTRACT
NON-PARTICIPATING
This Statement of Additional Information is not a Prospectus. It contains
information in addition to that described in the Prospectus and should be read
in conjunction with the Prospectus dated the same date as this Statement of
Additional Information. The Prospectus may be obtained by writing The
Manufacturers Life Insurance Company of New York, at the Annuity Service Office,
Corporate Center at Rye, 555 Theodore Fremd Avenue, Suite C-209, Rye, New York
10580-9966 or by telephoning (914) 921-1020.
The date of this Statement of Additional Information is May 1, 1998.
- --------------------------------------------------------------------------------
<PAGE> 52
V9SAI598
<PAGE> 53
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
Page
General Information and History............................................3
Performance Data...........................................................3
State Premium Taxes........................................................6
Services...................................................................7
Independent Auditors..............................................7
Servicing Agent...................................................7
Principal Underwriter.............................................7
Cancellation of Contract..........................................7
Appendix A - State Premium Taxes...........................................8
Financial Statements.......................................................9
<PAGE> 54
GENERAL INFORMATION AND HISTORY
The Manufacturers Life Insurance Company of New York Separate Account A
("Variable Account") is a separate investment account of The Manufacturers Life
Insurance Company of New York, formerly First North American Life Assurance
Company (the "Company"), a stock life insurance company organized under the laws
of New York in 1992. The Company is a wholly-owned subsidiary of The
Manufacturers Life Insurance Company of North America, formerly North American
Security Life Insurance Company ("Manulife North America"), a stock life
insurance company established in 1979 in Delaware. The ultimate parent of
Manulife North America is The Manufacturers Life Insurance Company ("Manulife"),
a Canadian mutual life insurance company based in Toronto, Canada. Prior to
January 1, 1996, Manulife North America was a wholly owned subsidiary of North
American Life Assurance Company ("NAL"), a Canadian mutual life insurance
company. On January 1, 1996, NAL and Manulife merged with the combined company
retaining the name Manulife.
PERFORMANCE DATA
Each of the sub-accounts may in its advertising and sales materials
quote total return figures. The sub-accounts may advertise both "standardized"
and "non-standardized" total return figures, although standardized figures will
always accompany non-standardized figures. Non-standardized total return figures
may be quoted assuming both (i) redemption at the end of the time period and
(ii) not assuming redemption at the end of the time period. Standardized figures
include total return figures from: (i) the inception date of the sub-account of
the Variable Account which invests in the portfolio or (ii) inception date of
the portfolio or (ii) ten years, whichever period is shorter. Such figures will
always include the average annual total return for recent one year and, when
applicable, five and ten year periods and, where less than ten years, the
inception date of the sub-account, in the case of standardized returns, and the
inception date of the portfolio, in the case of non-standardized returns. Where
the period since inception is less than one year, the total return quoted will
be the aggregate return for the period. The average annual total return is the
average annual compounded rate of return that equates a purchase payment to the
market value of such purchase payment on the last day of the period for which
such return is calculated. The aggregate total return is the percentage change
(not annualized) that equates a purchase payment to the market value of such
purchase payment on the last day of the period for which such return is
calculated. For purposes of the calculations it is assumed that an initial
payment of $1,000 is made on the first day of the period for which the return is
calculated.
In calculating standardized return figures, all recurring charges (all
asset charges (mortality and expense risk fees and administrative fees)) are
reflected and the asset charges are reflected in changes in unit values.
Standardized total return figures will be quoted assuming redemption at the end
of the period. Non-standardized total return figures reflecting redemption at
the end of the time period are calculated on the same basis as the standardized
returns. Non-standardized total return figures not reflecting redemption at the
end of the time period are calculated on the same basis as the standardized
returns except that the calculations assume no redemption at the end of the
period and do not reflect deduction of the annual contract fee. The Company
believes such non-standardized figures not reflecting redemptions at the end of
the time period are useful to contract owners who wish to assess the performance
of an ongoing contract of the size that is meaningful to the individual contract
owner.
For total return figures quoted for periods prior to the commencement
of the offering of this contract, October 31, 1992, standardized performance
data will be the historical performance of the Trust portfolio from the date the
applicable sub-account of the Variable Account first became available for
investment under other contracts offered by the Company; adjusted to reflect
current contract charges. In the case of non-standardized performance,
performance figures will be the historical performance of the Trust portfolio
from the inception date of the portfolio (or in the case of the Trust portfolios
created in connection with the merger of Manulife Series Fund, Inc. into the
Trust, the inception date of the applicable predecessor. Manulife Series Fund
portfolio), adjusted to reflect current contract charges.
<PAGE> 55
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FIGURES
CALCULATED AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
==========================================================================================
TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION INCEPTION
OR 10 YEARS, DATE*
WHICHEVER
SHORTER
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets N/A N/A -37.94% 1/1/97
- ------------------------------------------------------------------------------------------
Science & Technology N/A N/A 3.17% 1/1/97
- ------------------------------------------------------------------------------------------
International Small Cap -6.04% N/A 0.72% 3/4/96
- ------------------------------------------------------------------------------------------
Emerging Growth N/A N/A 10.53% 1/1/97
- ------------------------------------------------------------------------------------------
Pilgrim Baxter Growth N/A N/A -6.76% 1/1/97
- ------------------------------------------------------------------------------------------
Small/Mid Cap 7.59% N/A 7.45% 3/4/96
- ------------------------------------------------------------------------------------------
International Stock N/A N/A -4.31% 1/1/97
- ------------------------------------------------------------------------------------------
Worldwide Growth N/A N/A 5.66% 1/1/97
- ------------------------------------------------------------------------------------------
Global Equity 13.06% 12.63% 13.08% 10/31/92
- ------------------------------------------------------------------------------------------
Small Company Value N/A N/A -9.98% 10/1/97
- ------------------------------------------------------------------------------------------
Equity 11.53% 16.78% 18.18%+ 10/31/92
- ------------------------------------------------------------------------------------------
Growth 17.55% N/A 19.40% 7/15/96
- ------------------------------------------------------------------------------------------
Quantitative Equity N/A N/A 22.79% 1/1/97
- ------------------------------------------------------------------------------------------
Blue Chip Growth 19.11% 11.09% 10.91% 12/11/92
- ------------------------------------------------------------------------------------------
Real Estate Securities N/A N/A 13.53% 1/1/97
- ------------------------------------------------------------------------------------------
Value N/A N/A 14.39% 1/1/97
- ------------------------------------------------------------------------------------------
International Growth and Income -6.84% N/A 3.33% 1/9/95
- ------------------------------------------------------------------------------------------
Growth and Income 24.92% 16.88% 17.37% 10/31/92
- ------------------------------------------------------------------------------------------
Equity-Income 21.84% N/A 15.47% 2/19/93
- ------------------------------------------------------------------------------------------
Balanced N/A N/A 10.82% 1/1/97
- ------------------------------------------------------------------------------------------
Aggressive Asset Allocation 11.38% 10.58% 10.99% 10/31/92
- ------------------------------------------------------------------------------------------
High Yield N/A N/A 5.06% 1/1/97
- ------------------------------------------------------------------------------------------
Moderate Asset Allocation 8.20% 8.71% 9.04% 10/31/92
- ------------------------------------------------------------------------------------------
Conservative Asset Allocation 3.84% 6.52% 6.76% 10/31/92
- ------------------------------------------------------------------------------------------
Strategic Bond 3.41% N/A 7.41% 2/19/93
- ------------------------------------------------------------------------------------------
Global Government Bond -4.03% 7.93% 7.63% 10/31/92
- ------------------------------------------------------------------------------------------
Capital Growth Bond N/A N/A 1.88% 1/1/97
- ------------------------------------------------------------------------------------------
Investment Quality Bond 2.27% 5.10% 5.33% 10/31/92
- ------------------------------------------------------------------------------------------
U.S. Government Securities 1.09% 4.58% 4.67% 10/31/92
- ------------------------------------------------------------------------------------------
Money Market -1.99% 2.42% 2.55% 10/31/92
- ------------------------------------------------------------------------------------------
Lifestyle Aggressive 1000 N/A N/A 4.80% 1/1/97
- ------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 56
<TABLE>
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lifestyle Growth 820 N/A N/A 7.29% 1/1/97
- ------------------------------------------------------------------------------------------
Lifestyle Balanced 640 N/A N/A 7.38% 1/1/97
- ------------------------------------------------------------------------------------------
Lifestyle Moderate 460 N/A N/A 6.79% 1/1/97
- ------------------------------------------------------------------------------------------
Lifestyle Conservative 280 N/A N/A 5.07% 1/1/97
- ------------------------------------------------------------------------------------------
</TABLE>
* Inception date of the sub-account of the Variable Account which invests in the
portfolio.
<PAGE> 57
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FIGURES
(ASSUMING REDEMPTION AT THE END OF THE TIME PERIOD)
CALCULATED AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
==========================================================================================
TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION INCEPTION
OR 10 YEARS, DATE OF
WHICHEVER PORTFOLIO
SHORTER
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets* -38.40% N/A -10.33% 10/4/94
- ------------------------------------------------------------------------------------------
Science & Technology N/A N/A 3.17% 1/1/97
- ------------------------------------------------------------------------------------------
International Small Cap -6.04% N/A 0.72% 3/4/96
- ------------------------------------------------------------------------------------------
Emerging Growth N/A N/A 10.53% 1/1/97
- ------------------------------------------------------------------------------------------
Pilgrim Baxter Growth N/A N/A -6.76% 1/1/97
- ------------------------------------------------------------------------------------------
Small/Mid Cap 7.59% N/A 7.54% 3/4/96
- ------------------------------------------------------------------------------------------
International Stock N/A N/A -4.31% 1/1/97
- ------------------------------------------------------------------------------------------
Worldwide Growth N/A N/A 5.66% 1/1/97
- ------------------------------------------------------------------------------------------
Global Equity 13.06% 12.63% 8.18% 3/18/88
- ------------------------------------------------------------------------------------------
Small Company Value N/A N/A -9.98% 10/1/97
- ------------------------------------------------------------------------------------------
Equity 11.53% 16.78% 13.50%+ 6/18/85
- ------------------------------------------------------------------------------------------
Growth 17.55% N/A 19.40% 7/15/96
- ------------------------------------------------------------------------------------------
Quantitative Equity* 21.97% 14.52% 13.48% 4/30/87
- ------------------------------------------------------------------------------------------
Blue Chip Growth 19.11% 11.09% 10.91% 12/11/92
- ------------------------------------------------------------------------------------------
Real Estate Securities* 10.70% 14.95% 14.22% 4/30/87
- ------------------------------------------------------------------------------------------
Value N/A N/A 14.39% 1/1/97
- ------------------------------------------------------------------------------------------
International Growth and Income -6.84% N/A 3.33% 1/9/95
- ------------------------------------------------------------------------------------------
Growth and Income 24.92% 16.88% 15.57% 4/23/91
- ------------------------------------------------------------------------------------------
Equity-Income 21.84% N/A 15.47% 2/19/93
- ------------------------------------------------------------------------------------------
Balanced N/A N/A 10.82% 1/1/97
- ------------------------------------------------------------------------------------------
Aggressive Asset Allocation 11.38% 10.58% 8.51% 8/3/89
- ------------------------------------------------------------------------------------------
High Yield N/A N/A 5.06% 1/1/97
- ------------------------------------------------------------------------------------------
Moderate Asset Allocation 8.20% 8.71% 7.51% 8/3/89
- ------------------------------------------------------------------------------------------
Conservative Asset Allocation 3.84% 6.52% 6.21% 8/3/89
- ------------------------------------------------------------------------------------------
Strategic Bond 3.41% N/A 7.41% 2/19/93
- ------------------------------------------------------------------------------------------
Global Government Bond 11.43% 8.28% 8.04% 3/18/88
- ------------------------------------------------------------------------------------------
Capital Growth Bond* 1.31% 5.15% 6.97%+ 6/26/84
- ------------------------------------------------------------------------------------------
Investment Quality Bond 2.27% 5.10% 5.42% 6/18/85
- ------------------------------------------------------------------------------------------
U.S. Government Securities 1.09% 4.58% 5.82% 3/18/88
- ------------------------------------------------------------------------------------------
Money Market -1.99% 2.42% 3.93%+ 6/18/85
- ------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 58
<TABLE>
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lifestyle Aggressive 1000 N/A N/A 4.80% 1/1/97
- ------------------------------------------------------------------------------------------
Lifestyle Growth 820 N/A N/A 7.29% 1/1/97
- ------------------------------------------------------------------------------------------
Lifestyle Balanced 640 N/A N/A 7.38% 1/1/97
- ------------------------------------------------------------------------------------------
Lifestyle Moderate 460 N/A N/A 6.79% 1/1/97
- ------------------------------------------------------------------------------------------
Lifestyle Conservative 280 N/A N/A 5.07% 1/1/97
- ------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 59
+ Ten year average annual return.
* On December 31, 1996, Manulife Series Fund, Inc. merged with the Trust.
Performance presented for these sub-accounts is based upon the performance of
the respective predecessor Manulife Series Fund portfolio for periods prior to
December 31, 1996. Performance for each of these sub-accounts is based on the
historical performance of the predecessor Manulife Series Fund portfolio,
adjusted to reflect current contract charges, and therefore, does not reflect
for periods prior to December 31, 1996 the current Trust portfolio expenses that
an investor would incur as a holder of units of the sub-account.
<PAGE> 60
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FIGURES
(ASSUMING NO REDEMPTION AT THE END OF THE TIME PERIOD)
CALCULATED AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
==========================================================================================
TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION INCEPTION
OR 10 YEARS, DATE OF
WHICHEVER PORTFOLIO
SHORTER
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets* -35.04% N/A -9.28% 10/4/94
- ------------------------------------------------------------------------------------------
Science & Technology N/A N/A 9.18% 1/1/97
- ------------------------------------------------------------------------------------------
International Small Cap -0.62 N/A 3.92% 3/4/96
- ------------------------------------------------------------------------------------------
Emerging Growth N/A N/A 16.59% 1/1/97
- ------------------------------------------------------------------------------------------
Pilgrim Baxter Growth N/A N/A -1.38% 1/1/97
- ------------------------------------------------------------------------------------------
Small/Mid Cap 13.66% N/A 10.58% 3/4/96
- ------------------------------------------------------------------------------------------
International Stock N/A N/A 1.22% 1/1/97
- ------------------------------------------------------------------------------------------
Worldwide Growth N/A N/A 11.73% 1/1/97
- ------------------------------------------------------------------------------------------
Global Equity 19.12% 13.05% 8.23% 3/18/88
- ------------------------------------------------------------------------------------------
Small Company Value N/A N/A -4.81% 10/1/97
- ------------------------------------------------------------------------------------------
Equity 17.59% 17.15% 13.54%+ 6/18/85
- ------------------------------------------------------------------------------------------
Growth 23.61% N/A 23.23% 7/15/96
- ------------------------------------------------------------------------------------------
Quantitative Equity* 28.03% 14.92% 13.52%+ 4/30/87
- ------------------------------------------------------------------------------------------
Blue Chip Growth 25.17% 11.54% 11.23% 12/11/92
- ------------------------------------------------------------------------------------------
Real Estate Securities* 16.76% 15.34% 14.27%+ 4/30/87
- ------------------------------------------------------------------------------------------
Value N/A N/A 20.46% 1/1/97
- ------------------------------------------------------------------------------------------
International Growth and Income -1.47% N/A 4.94% 1/9/95
- ------------------------------------------------------------------------------------------
Growth and Income 30.99% 17.25% 15.62% 4/23/91
- ------------------------------------------------------------------------------------------
Equity-Income 27.90% N/A 15.87% 2/19/93
- ------------------------------------------------------------------------------------------
Balanced N/A N/A 16.88% 1/1/97
- ------------------------------------------------------------------------------------------
Aggressive Asset Allocation 11.41% 8.93% 7.43% 8/3/89
- ------------------------------------------------------------------------------------------
High Yield N/A N/A 11.12% 1/1/97
- ------------------------------------------------------------------------------------------
Moderate Asset Allocation 14.26% 9.20% 7.56% 8/3/89
- ------------------------------------------------------------------------------------------
Conservative Asset Allocation 9.89% 7.04% 6.26% 8/3/89
- ------------------------------------------------------------------------------------------
Strategic Bond 9.44% N/A 7.94% 2/19/93
- ------------------------------------------------------------------------------------------
Global Government Bond 1.52% 8.43% 7.36% 3/18/88
- ------------------------------------------------------------------------------------------
Capital Growth Bond* 7.20% 5.70% 7.02%+ 6/26/84
- ------------------------------------------------------------------------------------------
Investment Quality Bond 8.23% 5.64% 5.47%+ 6/18/85
- ------------------------------------------------------------------------------------------
U.S. Government Securities 6.97% 5.14% 5.87% 3/18/88
- ------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 61
<TABLE>
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Money Market 3.69% 3.02% 3.98%+ 6/18/85
- ------------------------------------------------------------------------------------------
Lifestyle Aggressive 1000 N/A N/A 10.86% 1/1/97
- ------------------------------------------------------------------------------------------
Lifestyle Growth 820 N/A N/A 13.35% 1/1/97
- ------------------------------------------------------------------------------------------
Lifestyle Balanced 640 N/A N/A 13.44% 1/1/97
- ------------------------------------------------------------------------------------------
Lifestyle Moderate 460 N/A N/A 12.86% 1/1/97
- ------------------------------------------------------------------------------------------
Lifestyle Conservative 280 N/A N/A 11.13% 1/1/97
- ------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 62
+ Ten year average annual return.
* On December 31, 1996, Manulife Series Fund, Inc. merged with the Trust.
Performance presented for these sub-accounts is based upon the performance of
the respective predecessor Manulife Series Fund portfolio for periods prior to
December 31, 1996. Performance for each of these sub-accounts is based on the
historical performance of the predecessor Manulife Series Fund portfolio,
adjusted to reflect current contract charges, and therefore, does not reflect
for periods prior to December 31, 1996 the current Trust portfolio expenses that
an investor would incur as a holder of units of the sub-account.
* * * * *
In addition to the non-standardized returns quoted above, each of the
sub-accounts may from time to time quote aggregate non-standardized total
returns calculated in the same manner as set forth above for other time periods.
From time to time the Trust may include in its advertising and sales literature
general discussions of economic theories, including but not limited to,
discussions on how demographic and political trends can affect the financial
markets. Further, the Trust may also include in its advertising and sales
literature specific information on each of the Trust's subadvisers, including
but not limited to, research capabilities of a subadviser, assets under
management, information relating to other clients of a subadviser, and other
generalized information.
STATE PREMIUM TAXES
New York does not currently assess a premium tax. In the event New York
does impose a premium tax, the Company reserves the right to pass-through such
tax to contract owners. For residents of all other states, except for residents
in Pennsylvania, South Dakota and Kentucky premium taxes will be deducted from
the contract value used to provide for fixed or variable annuity payments unless
required otherwise by applicable law. The amount deducted will depend on the
premium tax assessed in the applicable state. State premium taxes currently
range from 0% to 3.5% depending on the jurisdiction and the tax status of the
contract and are subject to change by the legislature or other authority. (See
"APPENDIX B: STATE PREMIUM TAXES") FOR RESIDENTS OF PENNSYLVANIA, SOUTH DAKOTA
AND KENTUCKY THE FOLLOWING PREMIUM TAX ASSESSMENT WILL APPLY: A premium tax will
be assessed against all non-qualified purchase payments received from contract
owners who are residents of South Dakota. The rate of tax is 1.25% for South
Dakota residents. If the Kentucky Revenue Cabinet's policy change on premium
taxes becomes effective as expected, a premium tax will be assessed against all
purchase payments received on or after July 1, 1997 from contract owners who are
residents of Kentucky. The rate of tax is 2.00% for Kentucky residents. Purchase
payments received for the period October 1, 1992 through September 7, 1995 for
non-qualified contracts of Pennsylvania residents will be assessed a 2.00%
premium tax; purchase payments received on or after September 8, 1995 will not
be assessed a premium tax. For purchase payments received on or after October 1,
1992 (July 1, 1997 for Kentucky), the state premium tax will be collected upon
payment of any withdrawal benefits, upon any annuitization or payment of death
benefits. For payments received prior to October 1, 1992 (July 1, 1997 for
Kentucky) the premium tax will deducted upon annuitization only. In the states
of Pennsylvania and South Dakota, purchase payments received in connection with
the funding of a qualified plan are exempt from state premium tax.
SERVICES
INDEPENDENT AUDITORS
The financial statements of the Company and the Variable Account at
December 31, 1997 and 1996 and for the years then ended appearing in this
Statement of Additional Information have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon appearing elsewhere
herein, and are included in reliance upon such given upon the authority of such
firm as experts in accounting and auditing.
<PAGE> 63
The statutory balance sheet of the Company as of December 31, 1995 and
the related statutory statements of operations, changes in capital and deficit
and cash flows for each of the two years in the period ended December 31, 1995,
appearing in this Statement of Additional Information have been included herein
in reliance on the report (which report includes an adverse opinion as to
generally accepted accounting principles and an unqualified opinion as to
statutory accounting practices prescribed or permitted by the Insurance
Department of the State of New York), of Coopers & Lybrand L.L.P., independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
The statement of operations and changes in net assets of the Variable
Account for the year ended December 31, 1995, appearing in this Statement of
Additional Information has been included herein in reliance on the report of
Coopers & Lybrand L.L.P., independent accountants, given on the authority of
that firm as experts in accounting and auditing.
SERVICING AGENT
Computer Sciences Corporation Financial Services Group ("CSC FSG")
provides to the Company a computerized data processing recordkeeping system for
variable annuity administration. Vantage provides various daily, semimonthly,
monthly, semiannual and annual reports including: daily updates on accumulation
unit values, variable annuity participants and transactions, and agent
production and commissions; semimonthly commission statements; monthly summaries
of agent production and daily transaction reports; semiannual statements for
contract owners; and annual contract owner tax reports. CSC FSG receives
approximately $7.50 per policy per year, plus certain other fees paid by the
Company for the services provided.
PRINCIPAL UNDERWRITER
Manufacturers Securities Services, LLC, ("MSS") the successor to NASL
Financial Services, Inc., a Delaware limited liability partnership controlled by
the parent of the Company, serves as principal underwriter of the contracts.
Contracts are offered on a continuous basis. The aggregate dollar amount of
underwriting commissions paid to MSS in 1997, 1996 and 1995 respectively were
____________, $7,049,687, $5,659,896. MSS did not retain any of these amounts
during such periods.
CANCELLATION OF CONTRACT
The Company may, at its option, cancel a contract at the end of any
three consecutive contract years in which no purchase payments by or on behalf
of the contract owner have been made, if both (i) the total purchase payments
made for the contract, less any withdrawals, are less than $2,000; and (ii) the
contract value at the end of such three year period is less than $2,000. The
Company, as a matter of administrative practice, will attempt to notify a
contract owner prior to such cancellation in order to allow the contract owner
to make the necessary purchase payment to keep the contract in force.
<PAGE> 64
APPENDIX A
STATE PREMIUM TAXES
Premium taxes vary according to the state and are subject to change. In
many jurisdictions there is no tax at all. For current information, a tax
advisor should be consulted.
<TABLE>
<CAPTION>
TAX RATE
---------------------------
QUALIFIED NON-QUALIFIED
STATE CONTRACTS CONTRACTS
- --------------------------------------------------------------------------------
<S> <C> <C>
CALIFORNIA .50% 2.35%
DISTRICT OF COLUMBIA 2.25% 2.25%
KANSAS .00 2.00%
KENTUCKY 2.00% 2.00%
MAINE .00 2.00%
NEVADA .00 3.50%
PUERTO RICO 1.00% 1.00%
SOUTH DAKOTA .00 1.25%
TEXAS .04% .04%
WEST VIRGINIA 1.00% 1.00%
WYOMING .00 1.00%
</TABLE>
<PAGE> 65
FINANCIAL STATEMENTS
<PAGE> 66
PART C
OTHER INFORMATION
<PAGE> 67
Item 24. Financial Statements and Exhibits
(a) Financial Statements
(1) Financial Statements of the Registrant, The
Manufacturers Life Insurance Company of New York
Separate Account A (Part B of the registration
statement) - to be filed by amendment
(2) Financial Statements of the Depositor, The
Manufacturers Life Insurance Company of New York
(Part B of the registration statement) - to be filed
by amendment
(b) Exhibits
(1) (a) Resolution of the Board of Directors of
First North American Life Assurance Company
establishing the FNAL Variable Account is
filed herewith.
(b) Resolution of the Board of Directors of
First North American Life Assurance Company
establishing the Fixed Separate Account is
filed herewith.
(c) Resolution of the Board of Directors of
First North American Life Assurance Company
establishing The Manufacturers Life
Insurance Company of New York Separate
Account D and The Manufacturers Life
Insurance Company of New York Separate
Account E is filed herewith.
(2) Agreements for custody of securities and similar
investments - Not Applicable.
(3) (a) Underwriting Agreement between The
Manufacturers Life insurance Company of New
York (Depositor) and Manufacturers
Securities Services, LLC (Underwriter) is
filed herewith.
(b) Selling Agreement between The Manufacturers
Life Insurance Company of New York,
Manufactures Securities Services, LLC
(Underwriter), Selling Broker Dealers, and
General Agent is filed herewith.
(4) Form of Specimen Flexible Purchase Payment Individual
Deferred Combination Fixed and Variable Annuity
Contract, Non-Participating is filed herewith.
(4) (a) Specimen Death Benefit Endorsement was
previously filed as Exhibit (b)(4)(i) to
post-effective amendment no. 5 to the
Registrant's registration statement on Form
N-4 dated April 30, 1996.
(4) (b) Specimen Death Benefit Endorsement was
previously filed as Exhibit (b)(3)(iii) to
post effective amendment no. 6 to the
Registrant's registration statement on Form
N-4 dated February 28, 1997
(5) Form of Specimen Application for Flexible Purchase
Payment Individual Deferred Combination Fixed and
Variable Annuity Contract, Non-Participating is filed
herewith.
(6) (a)(i) Declaration of Intention and Charter of
First North American Life Assurance Company
is filed herewith.
1
<PAGE> 68
(a)(ii) Certificate of amendment of the Declaration
of Intention and Charter of First North
American Life Assurance Company is filed
herewith.
(a)(iii) Certificate of amendment of the Declaration
of Intention and Charter of The
Manufacturers Life Insurance Company of New
York is filed herewith
(b) By-laws of The Manufacturers Life Insurance
Company of New York are filed herewith.
(7) Contract of reinsurance in connection with the
variable annuity contracts being offered - Not
Applicable.
(8) Other material contracts not made in the ordinary
course of business which are to be performed in whole
or in part on or after the date the registration
statement is filed:
(a) Administrative Agreement between The
Manufactures Life Insurance Company and The
Manufacturers Life Insurance Company of New
York is filed herewith.
(b) Investment Services Agreement between First
North American Life Assurance Company and
Elliott and Page, Ltd - previously filed as
exhibit (b)(8)(iv) to Form N-4 filed on
September 2, 1992.
(c) License and Service Agreement between North
American Security Life Insurance Company,
First North American Life Assurance Company,
and Mentap Systems, Inc. - Previously filed
as Exhibit (b)(8)(v) to FNAL Variable
Account Registration Statement on Form N-4
filed on April 28, 1995.
(9) Opinion of Counsel and consent to its use as to the
legality of the securities being registered was.
previously filed as exhibit (b)(9) to Form N-4 filed
on September 2, 1992.
(10) (a) Written consent of Ernst & Young LLP,
independent auditors will be filed by
amendment.
(b) Written consent of Coopers & Lybrand L.L.P,
independent accountants will be filed by
amendment.
(11) All financial statements omitted from Item 23,
Financial Statements - Not Applicable.
(12) Agreements in consideration for providing initial
capital between or among Registrant, Depositor,
Underwriter or initial contract owners - Not
Applicable.
(13) Schedule for computation of each performance
quotation provided in the Registration Statement in
response to Item 21 was previously filed as Exhibit
(13) to post effective amendment no. 5 to the
Registrant's registration statement on Form N-4 dated
April 30, 1996.
(14) Power of Attorney - First North American Life
Assurance Company Directors was previously filed as
Exhibit (b)(3)(iii) to post effective amendment no. 6
to the Registrant's registration statement on Form
N-4 dated February 28, 1997.
2
<PAGE> 69
(21) Financial Data Schedule - Not Applicable.
3
<PAGE> 70
Item 25. Directors and Officers of the Depositor.
OFFICERS AND DIRECTORS OF THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
NAME AND PRINCIPAL BUSINESS POSITION WITH THE MANUFACTURERS
ADDRESS LIFE INSURANCE COMPANY OF
NEW YORK
John Richardson Director and Chairman
Manulife Financial
200 Bloor Street East
North Tower 11
Ontario, Canada M4W-1E5
Bruce R. Gordon Director
200 Bloor Street East
North Tower 10
Toronto, Ontario
Canada M4W-1E5
Joseph Scott President & Director
73 Tremont Street
Boston, MA 02108-3915
David W. Libby Treasurer
73 Tremont Street
Boston, MA 02108-3915
Theodore Kilkuskie Director
73 Tremont Street
Boston, MA 02108
John D. DesPrez III Director
73 Tremont Street
Boston, MA 02108
Robert C. Perez Director
715 North Avenue
New Rochelle, NY 01801
James K. Robinson Director
7 Summit Drive
Rochester, New York 14620-3127
4
<PAGE> 71
Neil M. Merkl Esq. Director
35-35 161st Street
Flushing, New York 11358
Bruce Avedon Director
6601 Hitching Post Lane
Cincinnati, OH 45230
Ruth Ann Fleming Director
145 Western Drive
Short Hills, NJ 07078-1930
Tracy Anne Kane Secretary; Counsel
73 Tremont Street
Boston, MA 02108
Stephanie Elliman Vice President & Chief
International Corporate Center at Rye Administrative Officer
555 Theodore Fremd Avenue
Rye, New York 10580
5
<PAGE> 72
Item 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH DEPOSITOR OR
REGISTRANT.
THE MANUFACTURERS LIFE INSURANCE COMPANY
Manulife Corporate Organization as at December 31, 1997
The Manufacturers Life Insurance Company (Canada)
1. Cantay Holdings Inc. - Ontario (100%)
2. 484551 Ontario Limited - Ontario (100%)
a. 911164 Ontario Inc. - Ontario (100%)
3. Churchill Lifestyles Corp. (100%)
4. 495603 Ontario Limited - Ontario (100%)
5. 1198183 Ontario Limited - Ontario (100%)
6. 1198184 Ontario Limited - Ontario (100%)
7. 1235434 Ontario Limited - Ontario (100%)
8. 576986 Ontario Inc. - Ontario (100%)
9. Balmoral Developments Inc. - Ontario (100%)
10. Manulife Bank of Canada - Canada (100%)
11. Manulife Securities International Ltd. - Canada (100%)
12. Family Realty First Corp. - Ontario (100%)
13. NAL Resources Limited - Alberta (100%)
14. Manulife International Capital Corporation Limited - Ontario (100%)
a. Regional Power Inc. - Ontario (100%)
i. La Regionale Power (Port Cartier) Inc. - Ontario (100%)
ii. La Regionale Power Angliers Inc. - Ontario (100%)
iii. Addalam Power Corporation - Philippines (100%)
15. Peel-de Maisonneuve Investments Ltd. - Canada (100%)
a. 2932121 Canada Inc. - Canada (100%)
16. FNA Financial Inc. - Canada (100%)
a. NAL Trustco Inc. - Ontario (100%)
b. First North American Insurance Company - Canada (100%)
c. Elliott & Page Limited - Ontario (100%)
d. Seamark Asset Management Ltd. - Canada (67.86%)
e. NAL Resources Management Limited - Canada (100%)
i. NAL Energy Inc. - Alberta (100%)
17. ManuCab Ltd. - Canada (100%)
a. Plazcab Service Limited - Newfoundland (100%)
18. Manufacturers Life Capital Corporation Inc. - Canada (100%)
19. The North American Group Inc. - Ontario (100%)
20. 994744 Ontario Inc. - Ontario (100%)
21. 1268337 Ontario Inc. - Ontario (100%)
22. 3426505 Canada Inc. - Canada (100%)
23. The Manufacturers Investment Corporation - Michigan (100%)
a. Manulife Reinsurance Corporation (U.S.A.) - Michigan (100%)
i. The Manufacturers Life Insurance Company (U.S.A.) - Michigan
(100%)
(1) Dover Leasing Investments, LLC - Delaware (99%)
(2) The Manufacturers Life Insurance Company of America -
Michigan (100%)
(a) Manulife Holding Corporation - Delaware (100%)
(i) Manufacturers Adviser Corporation - Colorado
(100%)
(ii) Succession Plainning International, Inc. -
Wisconsin (100%)
(iii) ManEquity, Inc. - Colorado (100%)
6
<PAGE> 73
(iv) Manulife Property Management of Washington, D.C.
Inc. - Washington, D.C. (100%)
(v) ManuLife Service Corporation - Colorado (100%)
(vi) Manulife Leasing Company, LLC - Delaware (80%)
(3) Capitol Bankers Life Insurance Company - Michigan (100%)
(4) Ennal, Inc. - Ohio (100%)
(5) Manulife-Wood Logan Holding Co. Inc. - Delaware (62.5%)
(a) Wood Logan Associates, Inc. - Connecticut (100%)
(i) Wood Logan Distributors, Inc. -
Connecticut (100%)
(b) The Manufacturers Life Insurance Company of North
America - Delaware (100%)
(i) Manufacturers Securities Services, LLC -
Massachusetts (100%)
(ii) The Manufacturers Life Insurance Company of New
York - New York (100%)
ii. Manulife Reinsurance Limited - Bermuda (100%)
(1) MRL Holding, LLC - Delaware (99%)
(a) Manulife-Wood Logan Holding Co. Inc. - Delaware (22.5%)
iii. MRL Holding, LLC - Delaware (1%)
24. Manulife International Investment Management Limited - U.K. (100%)
a. Manulife International Fund Management Limited - U.K. (100%)
25. WT(SW) Properties Ltd. - U.K. (100%)
26. Manulife Europe Ruckversicherungs-Aktiengesellschaft - Germany (100%)
27. Manulife International Holdings Limited - Bermuda (100%)
a. Manulife (International) Limited - Bermuda (100%)
i. Zhong Hong Life Insurance Co., Ltd. - China (51%)
ii. The Manufacturers (Pacific Asia) Insurance Company Limited - H.K.
(100%)
iii. Newtime Consultants Limited - H.K. (100%)
28. Manulife (International) Reinsurance Limited - Bermuda (100%)
a. Manulife (International) P & C Limited - Bermuda (100%)
b. Manufacturers P & C Limited - Barbados (100%)
c. Manufacturers Life Reinsurance Limited - Barbados (100%)
29. Chinfon-Manulife Insurance Company Limited - Bermuda (100%)
30. Manulife (Malaysia) SDN. BHD. - Malaysia (100%)
31. Manulife (Thailand) Ltd. - Thailand (100%)
32. Young Poong Manulife Insurance Company - Korea (100%)
33. Manulife Data Services Inc. - Barbados (100%)
a. Manulife Funds Direct (Barbados) Limited - Barbados (100%)
i. Manulife Funds Direct (Hong Kong) Limited - H.K. (100%)
34. OUB Manulife Pte. Ltd. - Singapore (100%)
35. Manulife Holdings (Hong Kong) Limited - H.K. (100%)
36. ManuLife Financial Systems (Hong Kong) Limited - H.K. (100%)
37. P.T. Asuransi Jiwa Dhamala ManuLife - Indonesia (51%)
a. P.T. AMP Panin Life - Indonesia (100%)
Item 27. NUMBER OF CONTRACT OWNERS.
As of December 31, 1997, there were 4,991 qualified and 7,870 non-qualified
contracts of the series offered hereby outstanding.
7
<PAGE> 74
Item 28. INDEMNIFICATION.
Article 10 of the Charter of the Company provides as follows:
TENTH: No director of the Corporation shall be personally liable to the
Corporation or any of its shareholders for damages for any breach of duty as a
director; provided, however, the foregoing provision shall not eliminate or
limit (i) the liability of a director if a judgment or other final adjudication
adverse to such director established his or her such acts or omissions were in
bad faith or involved intentional misconduct or were acts or omissions (a) which
he or she knew or reasonably should have known violated the New York Insurance
Law or (b) which violated a specific standard of care imposed on directors
directly, and not by reference, by a provision of the New York Insurance Law (or
any regulations promulgated thereunder) or (c) which constituted a knowing
violation of any other law, or establishes that the director personally gained
in fact a financial profit or other advantage to which the director was not
legally entitled or (ii) the liability of a director for any act or omission
prior to the adoption of this Article by the shareholders of the Corporation.
Any repeal or modification of this Article by the shareholders of the
Corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the Corporation existing
at the time of such repeal or modification.
8
<PAGE> 75
Article VII of the By-laws of the Company provides as follows:
SECTION VII.1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Corporation may
indemnify any person made, or threatened to be made, a party to an action by or
in the right of the corporation to procure a judgment in its favor by reason of
the fact that he or she, his or her testator, testatrix or intestate, is or was
a director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director or officer of any other corporation of any type or
kind, domestic or foreign, of any partnership, joint venture, trust, employee
benefit plan or other enterprise, against amounts paid in settlement and
reasonable expenses, including attorneys' fees, actually and necessarily
incurred by him or her in connection with the defense or settlement of such
action, or in connection with an appeal therein, if such director or officer
acted, in good faith, for a purpose which he or she reasonably believed to be
in, or, in the case of service for any other corporation or any partnership,
joint venture, trust, employee benefit plan or other enterprise, not opposed to,
the best interests of the Corporation, except that no indemnification under this
Section shall be made in respect of (1) a threatened action, or a pending action
which is settled or is otherwise disposed of, or (2) any claim, issue or matter
as to which such person shall have been adjudged to be liable to the
Corporation, unless and only to the extent that the court in which the action
was brought, or , if no action was brought, any court of competent jurisdiction,
determines upon application that, in view of all the circumstances of the case,
the person is fairly and reasonably entitled to indemnity for such portion of
the settlement amount and expenses as the court deems proper.
The Corporation may indemnify any person made, or threatened to be made, a party
to an action or proceeding (other than one by or in the right of the Corporation
to procure a judgment in its favor), whether civil or criminal, including an
action by or in the right of any other corporation of any type or kind, domestic
or foreign, or any partnership, joint venture, trust, employee benefit plan or
other enterprise, which any director or officer of the Corporation served in any
capacity at the request of the Corporation, by reason of the fact that he or
she, his or her testator, testatrix or intestate, was a director or officer of
the Corporation, or served such other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise in any capacity, against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys' fees actually and necessarily incurred as a result of such action or
proceeding, or any appeal therein, if such director or officer acted, in good
faith, for a purpose which he or she reasonably believed to be in, or, in the
case of service for any other corporation or any partnership, joint venture,
trust, employee benefit plan or other enterprise, not opposed to, the best
interests of the Corporation and, in criminal actions or proceedings, in
addition, had no reasonable cause to believe that his or her conduct was
unlawful.
The termination of any such civil or criminal action or proceeding by judgment,
settlement, conviction or upon a plea of nolo contendere, of its equivalent,
shall not in itself create a presumption that any such director or officer did
not act, in good faith, for a purpose which he or she reasonably believed to be
in, or, in the case of service for any other corporation or any partnership,
joint venture, trust, employee benefit plan or other enterprise, not opposed to,
the best interest of the Corporation or that he or she had reasonable cause to
believe that his or her conduct was unlawful.
Notwithstanding the foregoing, Registrant hereby makes the following undertaking
pursuant to Rule 484 under the Securities Act of 1933:
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the
9
<PAGE> 76
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
Notwithstanding the foregoing, Registrant hereby makes the following undertaking
pursuant to Rule 484 under the Securities Act of 1933:
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
Item 29. PRINCIPAL UNDERWRITERS.
a. Name of Investment Company Capacity In which acting
-------------------------- ------------------------
Manufacturers Investment Trust Investment Adviser
The Manufacturers Life Insurance Principle Underwriter
Company of North America Separate
Account A
The Manufacturers Life Insurance Principle Underwriter
Company of North America Separate
Account B
The Manufacturers Life Insurance Principle Underwriter
Company of New York Separate
Account A
b. The Manufacturers Life Insurance Company of North America is the
managing member of Manufacturers Securities Services, LLC and has sole power to
act on behalf of Manufacturers Securities Services, LLC. The officers and
directors of The Manufacturers Life Insurance Company of North America are set
forth under Item 25.
Name and Principal Position with The Manufacturers Life Insurance
Business Address Company of North America
- ---------------- ------------------------
John D. Richardson Director and Chairman of the Board of
200 Bloor Street East Directors
North Tower, 11th Floor
Toronto, Ontario
Canada M4W-1E5
Peter S. Hutchison Director
200 Bloor Street East
10
<PAGE> 77
North Tower, 7th Floor
Toronto, Ontario
Canada M4W-1E5
John D. DesPrez III President & Director
73 Tremont Street
Boston, MA 02108
James Boyle Vice President, Administration and Chief
116 Huntington Avenue Administrative Officer
Boston, MA 02116
John G. Vrysen Vice President & Chief Actuary
73 Tremont Street
Boston, MA 02108
Hugh McHaffie Vice President, U.S. Annuities and Product
73 Tremont Street Development
Boston, MA 02108
Richard C. Hirtle Vice President, Strategic Development and
116 Huntington Avenue Accumulation Life Products
Boston, MA 02116
James D. Gallagher Vice President, Secretary and General Counsel
73 Tremont Street
Boston, MA 02108
Janet Sweeney Vice President, Corporate Services
73 Tremont Street
Boston, MA 02108
Robert Boyda Vice President, Investment Management Services
73 Tremont Street
Boston, MA 01208
11
<PAGE> 78
Name and Principal Position with The Manufacturers Life
Business Address Insurance Company of North America
- ---------------- ----------------------------------
David W. Libbey Vice President, Treasurer & Chief
73 Tremont Street Financial Officer
Boston, MA 02108
c. None.
Item 30. LOCATION OF ACCOUNTS AND RECORDS.
All books and records are maintained at Corporate Center at Rye, 555 Theodore
Fremd Avenue, Rye, New York 10580.
Item 31. MANAGEMENT SERVICES.
The Company has entered into an Administrative Services Agreement with The
Manufacturers Life Insurance Company ("Manulife"). This Agreement provides that
under the general supervision of the Board of Directors of the Company, and
subject to initiation, preparation and verification by the Chief Administrative
Officer of the Company, Manulife shall provide accounting services related to
the provision of a payroll support system, general ledger, accounts payable, tax
and auditing services.
Item 32. UNDERTAKINGS.
Representation of Insurer Pursuant to Section 26 of the Investment Company Act
of 1940
The Manufacturers Life Insurance Company of New York ("Company") hereby
represents that the fees and charges deducted under the contracts issued
pursuant to this registration statement, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by the Company.
12
<PAGE> 79
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
(1)(a) Resolution of the Board of Directors of First North American
Life Assurance Company establishing the FNAL Variable
Account
(1)(b) Resolution of the Board of Directors of First North American
Life Assurance Company establishing the Fixed Separate
Account
(1)(c) Resolution of the Board of Directors of First North American
Life Assurance Company establishing The Manufacturers Life
Insurance Company of New York Separate Account D and The
Manufacturers Life Insurance Company of New York Separate
Account E
(3)(a) Underwriting Agreement between The Manufacturers Life
Insurance Company of New York (Depositor) and Manufacturer
Securities Services, LLC (Underwriter), and General Agents
is filed herewith.
(3)(b) Selling Agreement between The Manufacturers Life Insurance
Company of New York, Manufactures Securities Services, LLC
(Underwriter), Selling Broker Dealers, and General Agent
(4) Form of Specimen Flexible Purchase Payment Individual
Deferred Combination Fixed and Variable Annuity Contract,
Non-Participating
(5) Form of Specimen Application for Flexible Purchase Payment
Individual Deferred Combination Fixed and Variable Annuity
Contract, Non-Participating
(6)(a)(i) Declaration of Intention and Charter of First North American
Life Assurance Company
(6)(a)(ii) Certificate of amendment of the Declaration of Intention and
Charter of First North American Life Assurance Company
(6)(a)(iii) Certificate of amendment of the Declaration of Intention and
Charter of The Manufacturers Life Insurance Company of New
York
(6)(b) By-laws of First North American Life Assurance Company
(8)(a) Administrative Agreement between The Manufacturers Life
Insurance Company and The Manufacturers Life Insurance
Company of New York
13
<PAGE> 80
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, The Manufacturers Life Insurance
Company of New York Separate Account A, has duly caused this Amendment to its
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Boston, and Commonwealth of Massachusetts on the
25th day of February, 1998.
THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NEW YORK SEPARATE ACCOUNT A
(Registrant)
By: THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NEW YORK
(Depositor)
By: /s/ Joseph Scott
------------------------------------
Joseph Scott
President
Attest:
/s/ Tracy Anne Kane
- --------------------------
Tracy Anne Kane
Secretary
<PAGE> 81
As required by the Securities Act of 1933, this amended Registration
Statement has been signed by the following persons in the capacities with the
Depositor and on the dates indicated.
SIGNATURE TITLE DATE
* Director 2/25/98
- --------------------------- (Chairman)
John Richardson
/s/ Joseph Scott Director; President 2/25/98
- --------------------------- (Chief Executive Officer)
Joseph Scott
/s/ John D. DesPrez III Director 2/25/98
- ---------------------------
John D. DesPrez III
Director 2/25/98
- ---------------------------
Theodore Kilkuski
* Director 2/25/98
- ---------------------------
Robert C. Perez
* Director 2/25/98
- ---------------------------
H. Bruce Gordon
* Director 2/25/98
- ---------------------------
James K. Robinson
* Director 2/25/98
- ---------------------------
Neil M. Merkl
* Director 2/25/98
- ---------------------------
Bruce Avedon
<PAGE> 82
* Director 2/25/98
- ---------------------------
Ruth Ann Fleming
*By: /s/ Tracy Anne Kane February 25, 1998
---------------------------- -----------------
Tracy Anne Kane Date
Attorney-in-Fact
Pursuant to Powers
of Attorney
<PAGE> 1
Exhibit 1A
SECRETARY'S CERTIFICATE
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
I, KIMBERLY S. CICCARELLI, ASSISTANT SECRETARY of THE MANUFACTURERS LIFE
INSURANCE COMPANY OF NEW YORK (the "Company") do hereby certify that the
following is a true and correct copy of the action taken by the Board of
Directors of the Company on March 4, 1992, and that the following resolutions
are in full force and effect on the date hereof:
ESTABLISHMENT OF SEPARATE ACCOUNT
RESOLVED, that the Company, pursuant to the provisions of New York law and
subject to the approval of the Superintendent of Insurance of New York, hereby
establishes a separate account to be designated initially as the FNAL Variable
Account (hereinafter referred to as "Variable Account") for the following uses
and purposes and subject to such conditions as are hereinafter set forth; and it
is
RESOLVED, that the Variable Account shall be established for the purpose of
providing for the issuance by the Company of such variable annuity contracts
(hereinafter referred to as "Contracts") of the Company as the Board of
Directors may designate for such purpose and shall constitute a separate account
into which are allocated amounts paid to or held by the Company under such
Contracts and any dividend accumulations with respect to such Contracts; and it
is
RESOLVED, that the Company shall receive and hold in the Variable Account
amounts arising from (i) premiums paid pursuant to the Contracts and (ii) such
assets of the Company as the proper officers of the Company may deem prudent and
appropriate to have invested in the same manner as the assets applicable to its
reserve liability under the Contracts and lodged in the Variable Account, and
any dividend accumulations thereon; and it is
RESOLVED, that contracts issued by the Company shall provide that the portion of
the assets of the separate account equal to the reserves and other contract
liabilities with respect to such account shall not be chargeable with
liabilities arising out of any other business the Company may conduct, and the
income, gains and losses, whether or not realized, from assets allocated to the
Variable Account shall, in accordance with the Contracts, be credited to or
charged against such Variable Account without regard to other income, gains or
losses of the Company; and it is
RESOLVED, that the officers of the Company are hereby authorized and directed to
take all action as may be necessary or appropriate to cause the separate account
to be registered as a unit investment trust under the Investment Company Act of
1940 ("Act"), as amended, and one or more applications to be made for such
exemptive or other orders under the Act as may be necessary or desirable; and it
is
RESOLVED, that the officers of the Company are hereby authorized and directed to
take all such action as may be necessary or appropriate to cause to be filed
with the Securities and Exchange Commission in accordance with the provisions of
the Securities Act of 1933, as amended, one or more registration statements and
any amendments thereto relating to such variable annuity contracts, and to pay
the registration fees required in connection therewith; and it is
RESOLVED, that thirteen (13) subaccounts of the Variable Account are
established, within the Variable Account, to which net payments under the
Contracts will be allocated in accordance with instructions received from
Contract holders and that the Board of Directors is authorized to increase or
decrease the number of subaccounts in the Variable Account as deemed necessary
or appropriate; and it is
<PAGE> 2
RESOLVED, that the proper officers of the Company are authorized and directed to
negotiate and execute an Underwriting Agreement with NASL Financial Services,
Inc., a registered member broker-dealer, under which it will act as principal
underwriter and distributor of the Contracts participating in the Variable
Account; and it is
RESOLVED, that the proper officers of the Company are authorized to transfer
funds from time to time between the Variable Account and the General Account of
the Company as deemed necessary or appropriate and in accordance with the terms
of the Contracts; and it is
FURTHER RESOLVED, that the proper officers of the Company and its counsel are
authorized, in the name and on behalf of the Company, under its corporate seal
or otherwise to execute and deliver such corporate documents and certificates
and to take such further action as may be necessary or desirable, including, but
not limited to, the payment of applicable fees, in order to effectuate the
purposes of the foregoing resolutions or any of them, and such officers are
authorized to pay such expenses, as in their judgment shall be necessary, proper
or advisable in order fully to carry out the intent and accomplish the purposes
of the foregoing resolutions.
DATED at Boston, Massachusetts as of December 9, 1997.
/s/ Kimberely S. Ciccarelli
---------------------------
KIMBERLY S. CICCARELLI
ASSISTANT SECRETARY
<PAGE> 1
Exhibit 1B
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
I, KIMBERLY S. CICCARELLI, ASSISTANT SECRETARY of FIRST NORTH AMERICAN LIFE
ASSURANCE COMPANY (the "Company") do hereby certify that the following is a true
and correct copy of the action taken by the Board of Directors of the Company on
May 6 1997, and that the following resolutions are in full force and effect on
the date hereof:
Variable Life Separate Accounts
RESOLVED, that pursuant to Section 4240 of the New York Insurance Laws, and
subject to the approval of the Superintendent of Insurance of New York, the
Company hereby establishes two separate accounts which shall each be
divided into up to thirty five (35) variable sub-accounts for use in
connection with the offer and sale of variable life insurance contracts,
the issuance of which is hereby authorized. Such separate accounts are to
be designated initially as the FNAL Variable Life Account I and the FNAL
Variable Life Account II (hereinafter referred to as "Variable Life
Accounts") and such sub-accounts shall be designated the "Global Equity",
"Blue Chip Growth", "Equity", "Equity-Income", "Growth and Income",
"International Growth and Income", "Strategic Bond", "Global Government
Bond", "Investment Quality Bond", "U.S. Government Securities", "Money
Market", "Aggressive Asset Allocation", "Moderate Asset Allocation",
"Conservative Asset Allocation", "Pacific Rim Emerging Markets", "Growth",
"Science & Technology", "Emerging Growth", "Pilgrim Baxter Growth",
"International Stock", "Worldwide Growth", "Quantitative Equity", "Equity
Index", "Value", "Real Estate Securities", "Balanced", "High Yield",
"Capital Growth Bond", "Conservative Lifestyle", "Moderate Lifestyle",
"Balanced Lifestyle", "Growth Lifestyle", "Aggressive Lifestyle",
"Small/Mid Cap", "International Small Cap", respectively; and it is
FURTHER RESOLVED, that each variable life insurance contract issued by the
Company shall provide that the portion of the assets of the separate
account equal to the reserves and other contract liabilities with respect
to such account shall not be chargeable with liabilities arising out of any
other business the Company may conduct and, consistent with the provisions
of Section 4240 of the New York Insurance Laws, as amended, that income,
gains and losses, realized or unrealized, from assets allocated to the
separate account shall be credited or charged against such account without
regard to other income, gains or losses of the Company; and it is
FURTHER RESOLVED, that the officers of the Company are hereby authorized
and directed to take all such action as may be necessary or appropriate to
cause the separate account to comply with registration requirements of the
Investment Company Act of 1940 ("1940 Act") as it may be amended from time
to time; and it is
FURTHER RESOLVED, that the officers of the Company are hereby authorized
and directed to take all such action as may be necessary or appropriate to
cause the separate account to
<PAGE> 2
comply with the registration requirements of the Securities Act of 1933 as
it may be amended from time to time; and it is
FURTHER RESOLVED, that the officers of the Company are hereby authorized
and directed to perform all such acts and do all things as may, in their
judgment and discretion, be necessary or desirable to give full effect to
these resolutions so as to enable the Company to establish the separate
account and issue variable life insurance contracts, including, without
limitation: (a) the preparation, execution of, or amendment to, the
custodian agreement, underwriting agreements, and such other agreements and
documents respecting such separate account or contracts as they may deem
necessary or desirable; (b) the determination of the terms and conditions
of the variable life insurance contracts herein authorized, and (c) the
determination of all other actions requisite to obtain the qualification,
registration or authorization for the sale of variable life insurance
contracts.
MVA Separate Account
RESOLVED, that pursuant to Section 4223 of the New York Insurance Laws, New
York Regulation 127 and subject to the approval of the Superintendent of
Insurance of New York, the Company hereby establishes a separate account to
be designated initially as the FNAL Fixed Separate Account for use in
connection with the offer and sale of market value adjusted deferred
annuity contracts ("the Contracts"), the issuance of which is hereby
authorized; and it is
FURTHER RESOLVED, that the FNAL Fixed Separate Account shall constitute a
non-unitized, non insulated separate account into which are allocated
amounts paid to or held by the Company under such Contracts and any
dividend accumulations with respect to such Contracts; and it is
FURTHER RESOLVED, that Contracts issued by the Company shall provide that
the assets of the separate account shall be held at market value,
determined using external pricing sources where available, and shall be
chargeable with liabilities arising out of any other business the Company
may conduct; and it is
FURTHER RESOLVED, that the separate account shall be managed in accordance
with the Board approved investment policy for the general account and that
all times, the Company shall maintain in the separate account an aggregate
market value at least equal to the aggregate cash values of the liabilities
adjusted by the market value adjustment formula; and it is
FURTHER RESOLVED, that the officers of the Company are hereby authorized
and directed to take all such action as may be necessary or appropriate to
cause to be filed with the Securities and Exchange Commission in accordance
with the provisions of the Securities Act of 1933, as amended, one or more
registration statements and any amendments thereto relating
<PAGE> 3
to such market value adjusted annuity contracts, and to pay the
registration fees required in connection therewith; and it is
FURTHER RESOLVED, that, if at any time it is determined that the
registration of the separate account is required under the 1940 Act, the
officers of the Company are hereby authorized and directed to take all such
action as may be necessary or appropriate to cause the separate account to
comply with registration requirements of the 1940 Act as it may be amended
from time to time; and it
FURTHER RESOLVED, that the officers of the Company are hereby authorized
and directed to perform all such acts and do all things as may, in their
judgment and discretion, be necessary or desirable to give full effect to
these resolutions so as to enable the Company to establish the separate
account and issue variable life insurance contracts, including, without
limitation: (a) the preparation, execution of, or amendment to, the
custodian agreement, underwriting agreements, and such other agreements and
documents respecting such separate account or contracts as they may deem
necessary or desirable; (b) the determination of the terms and conditions
of the variable life insurance contracts herein authorized, and (c) the
determination of all other actions requisite to obtain the qualification,
registration or authorization for the sale of variable life insurance
contracts.
DATED at Boston, Massachusetts as of December 9, 1997.
/s/ Kimberely S. Ciccarelli
---------------------------
KIMBERLY S. CICCARELLI
ASSISTANT SECRETARY
(CORPORATE SEAL)
<PAGE> 1
Exhibit 1C
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
I, KIMBERLY S. CICCARELLI, ASSISTANT SECRETARY of FIRST NORTH AMERICAN LIFE
ASSURANCE COMPANY (the "Company") do hereby certify that the following is a true
and correct copy of the action taken by the Board of Directors of the Company on
August 20, 1997, and that the following resolutions are in full force and effect
on the date hereof:
The Manufacturers Life Insurance Company of New York Separate Account D
RESOLVED, that pursuant to Section 4240 of the New York Insurance Laws, and
subject to the approval of the Superintendent of Insurance of New York, the
Company does hereby establish a separate account which shall be divided
into seventeen (17) variable sub-accounts for use in connection with the
offer and sale of group annuity contracts, the issuance of which is hereby
authorized. Such separate account is hereby designated as "The
Manufacturers Life Insurance Company of New York Separate Account D" and
such sub-accounts shall be designated but not limited to the "Developing
Markets", "Science & Technology", "Capital Appreciation", "Mid-Cap Growth",
"International Stock", "Contra", "Growth Opportunities", " Socially
Responsible", "Discovery", "Small-Cap Value", "Mid-Cap Value", "Value",
"Growth & Income", "Diversified Capital", "High-Yield", "Income", and
"Short-Term Government", respectively; and it is
FURTHER RESOLVED, that each variable group annuity contract issued by the
Company shall provide that the portion of the assets of the separate
account equal to the reserves and other contract liabilities with respect
to such account shall not be chargeable with liabilities arising out of any
other business the Company may conduct and, consistent with the provisions
of Section 4240 of the New York Insurance Laws, as amended, that income,
gains and losses, realized or unrealized, from assets allocated to the
separate account shall be credited or charged against such account without
regard to other income, gains or losses of the Company; and it is
FURTHER RESOLVED, that, if at any time it is determined that the
registration of the separate account is required under the Investment
Company Act of 1940 (the "1940 Act"), the officers of the Company are
hereby authorized and directed to take all such action as may be necessary
or appropriate to cause the separate account to comply with registration
requirements of the 1940 Act as it may be amended from time to time; and it
is
FURTHER RESOLVED, that, if at any time it is determined that the
registration of the separate account is required under the Securities Act
of 1933, the officers of the Company are hereby authorized and directed to
take all such action as may be necessary or appropriate to cause the
separate account to comply with the registration requirements of the
Securities Act of 1933 as it may be amended from time to time; and it is
<PAGE> 2
FURTHER RESOLVED, that the officers of the Company are hereby authorized
and directed to perform all such acts and do all things as may, in their
judgment and discretion, be necessary or desirable to give full effect to
these resolutions so as to enable the Company to establish the separate
account and issue variable group annuity contracts, including, without
limitation: (a) the preparation, execution of, or amendment to, the
custodian agreement, underwriting agreements, and such other agreements and
documents respecting such separate account or contracts as they may deem
necessary or desirable; (b) the determination of the terms and conditions
of the variable group annuity contracts herein authorized, and (c) the
determination of the jurisdiction or jurisdictions in which action shall be
taken to obtain the requisite qualification, registration or authorization
for the sale of variable group annuity contracts.
The Manufacturers Life Insurance Company of New York Separate Account E
RESOLVED, that pursuant to Section 4240 of the New York Insurance Laws, and
subject to the approval of the Superintendent of Insurance of New York, the
Company does hereby establish a separate account which shall be divided
into twenty-two (22) variable sub-accounts for use in connection with the
offer and sale of group annuity contracts, the issuance of which is hereby
authorized. Such separate account is hereby designated as "The
Manufacturers Life Insurance Company of New York Separate Account E" and
such sub-accounts shall be designated but not limited to the "Foreign",
"Future Science & Technology", "Future Blue Chip Growth", "Future
Equity-Income", "Future Emerging Growth", "Future Capital Appreciation",
"Quantitative Equity", "Index Stock", "Future Global Equity", "Future
Growth", "Future Real Estate Securities", "Balanced", "Future Value",
"Capital Growth Bond", "Future High-Yield", "Future Strategic Bond", "Money
Market", "Future Lifestyle Aggressive", "Future Lifestyle Growth", "Future
Lifestyle Balanced", "Future Lifestyle Moderate", "Future Lifestyle
Conservative", respectively; and it is
FURTHER RESOLVED, that each variable group annuity contract issued by the
Company shall provide that the portion of the assets of the separate
account equal to the reserves and other contract liabilities with respect
to such account shall not be chargeable with liabilities arising out of any
other business the Company may conduct and, consistent with the provisions
of Section 4240 of the New York Insurance Laws, as amended, that income,
gains and losses, realized or unrealized, from assets allocated to the
separate account shall be credited or charged against such account without
regard to other income, gains or losses of the Company; and it is
FURTHER RESOLVED, that, if at any time it is determined that the
registration of the separate account is required under the 1940 Act, the
officers of the Company are hereby authorized and directed to take all such
action as may be necessary or appropriate to cause the separate account to
comply with registration requirements of the 1940 Act as it may be amended
from time to time; and it is
<PAGE> 3
FURTHER RESOLVED, that, if at any time it is determined that the
registration of the separate account is required under the Securities Act
of 1933, the officers of the Company are hereby authorized and directed to
take all such action as may be necessary or appropriate to cause the
separate account to comply with the registration requirements of the
Securities Act of 1933 as it may be amended from time to time; and it is
FURTHER RESOLVED, that the officers of the Company are hereby authorized
and directed to perform all such acts and do all things as may, in their
judgment and discretion, be necessary or desirable to give full effect to
these resolutions so as to enable the Company to establish the separate
account and issue variable group annuity contracts, including, without
limitation: (a) the preparation, execution of, or amendment to, the
custodian agreement, underwriting agreements, and such other agreements and
documents respecting such separate account or contracts as they may deem
necessary or desirable; (b) the determination of the terms and conditions
of the variable group annuity contracts herein authorized, and (c) the
determination of the jurisdiction or jurisdictions in which action shall be
taken to obtain the requisite qualification, registration or authorization
for the sale of variable group annuity contracts.
Plan of Operations: Approval to Rename Separate Accounts
WHEREAS, the Board of Directors voted on May 6, 1997 to establish two
Variable Life Separate Accounts designated the "FNAL Variable Life Account
I" and the "FNAL Variable Life Account II" and a separate account to
support the market value adjusted product designated the "FNAL Fixed
Separate Account"; and
WHEREAS, it is recommended that the names of all of the Company's separate
accounts be amended, including the prior existing separate account
designated the "FNAL Variable Account"; it is
RESOLVED, that the "FNAL Variable Account" be changed to "The Manufacturers
Life Insurance Company of New York Separate Account A"; and it is
FURTHER RESOLVED, that the "FNAL Variable Life Account I" be changed to
"The Manufacturers Life Insurance Company of New York Separate Account B"
and the "FNAL Variable Life Account II" be changed to "The Manufacturers
Life Insurance Company of New York Separate Account C"; and it is
FURTHER RESOLVED that the "FNAL Fixed Separate Account" be changed to "The
Manufacturers Life Insurance Company of New York Separate Account G", and
it is
FURTHER RESOLVED, that the above changes will be effective concurrently
with the effective date of the name change of the Company.
DATED at Boston, Massachusetts as of December 9, 1997.
/s/ Kimberely S. Ciccarelli
---------------------------
KIMBERLY S. CICCARELLI
ASSISTANT SECRETARY
( CORPORATE SEAL)
<PAGE> 1
Exhibit 3a
UNDERWRITING AND DISTRIBUTION AGREEMENT
AGREEMENT made this 7th day of October, 1997, by and between The
Manufacturers Life Insurance Company of New York ("Manulife New York"), a New
York corporation, and Manufacturers Securities Services, LLC ("LLC"), a Delaware
limited liability company.
WITNESSETH:
WHEREAS, Manulife New York sells certain insurance products listed on
Exhibit A hereto (the "Insurance Contracts"), some of which are regulated as
securities under the federal securities laws (the "Registered Insurance
Products"), and
WHEREAS, Manulife New York has entered into an Underwriting Agreement with
NASL Financial Services, Inc. ("NASL Financial") whereby NASL Financial was
appointed as its principal underwriter and exclusive representative for the
distribution of certain Manulife New York variable insurance products (the
"Prior Agreement"); and
WHEREAS, NASL Financial merged with and into LLC on September 30, 1997; and
WHEREAS, Manulife New York is deemed to be under common control with LLC
for the purposes of the application of Article 15 of the New York Insurance Law;
and
WHEREAS, LLC is registered with the Securities and Exchange Commission
("SEC") as a broker-dealer under the 1934 Act, is a member of the National
Association of Securities Dealers, Inc. ("NASD") and has been duly appointed and
licensed as an insurance agent of Manulife New York; and
<PAGE> 2
WHEREAS, Manulife New York wishes to terminate the Prior Agreement and to
arrange for the underwriting of all Registered Insurance Contracts through LLC
in conformity with the requirements of the Securities Exchange Act of 1934
("1934 Act"); and
WHEREAS, Manulife New York wishes to arrange for the distribution of all of
its Insurance Products through LLC and to authorize LLC to enter into agreements
with selling entities with respect thereto.
NOW, THEREFORE, the parties hereto agree as follows:
1. (a) Manulife New York hereby appoints LLC as the principal
underwriter of, and its exclusive representative for the distribution of, the
Insurance Contracts, and LLC hereby agrees to use its best efforts to arrange
for the sale of the Insurance Contracts by general agents and, in connection
with Registered Insurance Contracts, by other broker-dealer registered under the
1934 Act. LLC agrees to assist such entities and their representatives and
associated persons to the extent that and in such manner as LLC shall deem
appropriate in order to enhance the sale of Insurance Contracts and the payment
of purchase payments thereunder.
(b) The territory to which this Agreement shall apply shall be limited
to the State of New York.
2. (a) With the consent of Manulife New York, LLC may execute agreements
for the sale and distribution of the Insurance Contracts ("Selling Agreements")
with (i) other general agents/broker-dealers duly qualified under applicable
Federal and state laws to offer and sell the Registered Insurance Contracts; and
(ii) general agents to offer and sell Manulife New York insurance products other
than the Registered Insurance Contracts. Manulife New York may, in its sole
discretion, refuse to consent to a Selling Agreement or refuse to appoint a
general agent or sub-agent pursuant thereto.
2
<PAGE> 3
(b) Such Selling Agreements shall contain such terms and conditions as
LLC shall deem appropriate and which are acceptable to Manulife New York. Such
agreements may provide that any confirmation required to be sent in connection
with the issuance of Insurance Contracts or the receipt of purchase payments
thereunder will be sent by Manulife New York. All Selling Agreements shall
provide that no commission shall be paid in excess of the limitations imposed by
Section 4228 of the New York Insurance Law and no expense allowance payment
shall be made in excess of the amount approved for payment by the Company to LLC
pursuant to New York Insurance Department Regulation No. 49.
3. Manulife New York will prepare and maintain all books and records
relating to the Insurance Contracts including such books and records as LLC is
required to maintain under the 1934 Act to the extent such requirements are
applicable to the Registered Insurance Contracts. For purposes of this
Agreement, books and records maintained for LLC shall be deemed to be the
property of LLC and shall be subject at all times to examination by the SEC in
accordance with Section 17(a) of the 1934 Act.
4. LLC will not accept or receive on behalf of Manulife New York any
Registered Insurance Contract purchase payment. LLC will not permit any other
broker-dealer to participate in the distribution of the Registered Insurance
Contracts unless such broker-dealer agrees that (i) it will not accept any
purchase payment other than the first and (ii) it will not accept any first
purchase payment unless made payable to Manulife New York. Such broker-dealer
must also agree to forward promptly to Manulife New York at the service office
designated by it any first purchase payment received by such broker-dealer
together with a completed Registered Insurance Contract application. Manulife
New York reserves the right to reject any application in its sole discretion.
3
<PAGE> 4
5. Manulife New York will furnish to LLC currently effective prospectuses
relating to Registered Insurance Contracts in such numbers as LLC may reasonably
require from time to time. LLC shall be responsible for the preparation at its
own expense of sales materials relative to the Contracts and agrees to use its
best efforts to obtain any approvals or clearances required from the NASD or
other regulatory authorities with respect to such sales materials. Any sales
materials prepared by LLC or its designee, must be approved by Manulife New York
prior to use. LLC is responsible for all other expenses incurred by it in the
performance of this Agreement.
6. As compensation for the expenses incurred and services performed by
LLC hereunder, Manulife New York will pay LLC the commissions and expense
allowances in connection with the Insurance Contracts marketed and distributed
pursuant to this Agreement as set forth on Exhibit B hereto. Such payments shall
be made within one week in which payments upon which such commission and expense
allowance is based are received by Manulife New York. Manulife New York reserves
the right to revise such commissions and allowances upon at least ten (10) days'
prior notice to LLC. Any amendment to said Exhibit shall apply to compensation
due on applications received by Manulife New York after the effective date
thereof.
7. All commissions and expense allowances in connection with Insurance
Contract sales shall be paid by or on behalf of LLC in accordance with the terms
of the applicable Selling Agreement then in effect.
8. LLC shall have no right to incur any indebtedness on behalf of
Manulife New York pursuant to this Agreement. LLC hereby authorizes Manulife New
York to set off LLC's liabilities to Manulife New York against any and all
amounts otherwise payable to LLC pursuant hereto.
4
<PAGE> 5
9. Manulife New York represents that the Prior Agreement will be
terminated as of the effective date hereof.
10. This Agreement shall be construed in accordance with and governed by
the law of the State of New York.
11. This Agreement shall take effect as of the date set forth above and
may be terminated at any time by either party hereto on sixty (60) days' written
notice.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF
NEW YORK
By /s/ Joseph M. Scott
------------------------------------------
Joseph M. Scott, President
Attest: /s/ Kimberely S. Ciccarelli
---------------------------
MANUFACTURERS SECURITIES SERVICES
COMPANY, L.L.C. by its Managing Member The
Manufacturers Life Insurance Company of North
America
By /s/ John D. Desprez, III
------------------------------------------
John D. DesPrez, III, President
Attest: /s/ Kimberely S. Ciccarelli
---------------------------
5
<PAGE> 6
EXHIBIT A
INSURANCE CONTRACTS
(Products which are not Registered Insurance Contracts are identified as such.)
(i) Individual variable annuities or fixed and variable annuities
(ii) Fixed annuities (registered and non-registered)
(iii) Term life insurance (non-registered)
(iv) Universal life insurance (non-registered)
(v) Variable life insurance.
(vi) Variable universal life insurance
(vii) Group annuities (non-registered)
(ix) Such other Insurance Products as are from time to time agreed by the
parties to the foregoing Agreement and added to this Schedule A in
accordance therewith.
6
<PAGE> 1
Exhibit 3B
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
HOME OFFICE:
International Corporate Center at Rye
555 Theodore Fremd Avenue, Suite C-209
Rye, New York 10580
SELLING AGREEMENT
AGREEMENT by and between The Manufacturers Life Insurance
Company of New York ("MLNY"), a New York Corporation; Manufacturers Securities
Services, LLC ("MSS"), a Delaware limited liability Company which is a
registered broker-dealer with the Securities and Exchange Commission under the
Securities Act of 1934 (the "1934 Act"), a member of the National Association of
Securities Dealers, Inc. ("NASD") and duly licensed and appointed with MLNY;
(Selling Broker-Dealer), also a registered broker-dealer and member of the NASD;
and (General Agent).
I. INTRODUCTION
WHEREAS, MLNY has issued certain insurance and annuity contracts, and some
of these Contracts are registered under the Securities Act of 1933 (the "1933
Act") ("Contracts" or "Contracts" collectively); and
WHEREAS, MLNY has, pursuant to an Underwriting and Distribution Agreement
dated October 7, 1997, appointed MSS as principal underwriter and exclusive
representative for the distribution of the Contracts and has authorized MSS to
enter into agreements, subject to the consent of MLNY, with Selling
Broker-Dealers and General Agents for the distribution of the Contracts; and
WHEREAS, Selling Broker-Dealer and General Agent wish to participate in the
distribution of the Contracts;
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:
<PAGE> 2
II. APPOINTMENT
Subject to the terms and conditions of this Agreement, MLNY and MSS hereby
appoint ____________________________ as Selling-Broker-Dealer and
___________________________ as General Agent for the solicitation of
applications for the purchase of the Contracts, and Selling Broker-Dealer and
General Agent accept such appointment.
III. AUTHORITY AND DUTIES OF GENERAL AGENT
A. LICENSING AND APPOINTMENT OF SUBAGENTS
General Agent is authorized to appoint Sub-agents to solicit sales of the
Contracts. General Agent warrants that all Sub-agents appointed by General Agent
pursuant to this Agreement shall not solicit nor aid, directly or indirectly, in
the solicitation of any application for any Contract until that Sub-agent is
fully licensed under the applicable insurance laws, and, in connection with
securities regulated Contracts, is a fully registered representative of Selling
Broker-Dealer. General Agent shall prepare and transmit the appropriate
licensing and appointment forms to MLNY. General Agent shall pay all fees to
state insurance regulatory authorities in connection with obtaining necessary
licenses and appointments for Sub-agents. All fees payable to such regulatory
authorities in connection with the initial MLNY appointment of Sub-agents who
already possess necessary licenses shall be paid by MLNY. Any renewal license
fees due after the initial appointment shall be paid by General Agent. General
Agent shall periodically provide MLNY with a list of all Sub-agents appointed by
General Agent and the jurisdictions where such Sub-agents are licensed to
solicit sales of the Contracts. MLNY shall periodically provide General Agent
with a list which shows: 1) the jurisdiction where MLNY is authorized to do
business; and 2) any limitations on the availability of the Contracts in any of
such jurisdictions. General Agent agrees to fulfill all requirements set forth
in the General Letter of Recommendation attached as Exhibit A in conjunction
with the submission of licensing and appointment papers for all applicants as
Sub-agents submitted by General Agent.
B. REJECTION OF SUB-AGENT
MSS or MLNY may, by written notice to General Agent, refuse to permit any
Sub-agent the right to solicit applications for the sale of any of the
Contracts, require General Agent to cause any Sub-agent to cease such
solicitations or sales and cancel the appointment of any Sub-agent.
C. SUPERVISION OF SUB-AGENTS
General Agent shall supervise any Sub-agents appointed pursuant to this
Agreement to solicit sales of the Contracts and bear responsibility for all acts
and omissions of each Sub-agent. General Agent shall comply with and exercise
all responsibilities required by applicable federal and state law and
regulations. General Agent shall not be responsible for those supervisory
responsibilities belonging to Selling Broker-Dealer under applicable securities
laws which include, but are not limited to, supervising and training Sub-agents
in their capacity as registered representatives. Nothing contained in this
Agreement or otherwise shall be deemed to make any Sub-agent appointed by
General
<PAGE> 3
Agent an employee or agent of MLNY or MSS. MLNY and MSS shall not have
any responsibility for the training and supervision of any Sub-agent or any
other employee of General Agent. If the act or omission of a Sub-agent or any
other employee General Agent is the proximate cause of any claim, damage or
liability (including reasonable attorneys' fees) to MLNY or MSS, General Agent
shall be responsible and liable therefore.
Before a Sub-agent is permitted to sell the Contracts, General Agent,
Selling Broker-Dealer and Sub-agent shall have entered into a written agreement
pursuant to which: 1) Sub-agent is appointed a Sub-agent of General Agent and a
registered representative of Selling Broker-Dealer 2) Sub-agent agrees that his
or her selling activities relating to securities regulated Contracts shall be
under the supervision and control of Selling Broker-Dealer and his or her
selling activities relating to insurance regulated Contracts shall be under the
supervision and control of General Agent; and 3) that Sub-agent's right to
continue to sell such Contracts is subject to his or her continued compliance
with such agreement and any procedures, rules or regulations implemented by
Selling Broker-Dealer or General Agent.
IV. AUTHORITY AND DUTIES OF SELLING BROKER-DEALER
A. SUPERVISION OF REGISTERED REPRESENTATIVES
Selling Broker-Dealer agrees that it has full responsibility for the
training and supervision of all persons, including Sub-agents of General Agent,
associated with Selling Broker-Dealer who are engaged directly or indirectly in
the offer or sale of securities regulated Contracts. All such persons shall be
subject to the control of Selling Broker-Dealer with respect to their securities
regulated activities. Broker-Dealer shall: 1) train and supervise Sub-agents, in
their capacity as registered representatives, in the sale of securities
regulated Contracts; 2) use its best efforts to cause such Sub-agents to qualify
under applicable federal and state laws to engage in the sale of securities
regulated Contracts; 3) provide MLNY and MSS to their satisfaction, with
evidence of Sub-agents' qualifications to sell securities regulated Contracts;
and 4) notify MLNY if any of such Sub-agents ceases to be a registered
representative of Selling Broker-Dealer. Selling Broker-Dealer agrees that a
Sub-agent must be a registered representative of Selling Broker-Dealer before
engaging in the solicitation of any securities regulated Contracts and have
entered into the written agreement more fully described in Section III,
Paragraph C. MLNY and MSS shall not have any responsibility of the supervision
of any registered representative or any other employee or affiliate of Selling
Broker-Dealer. If the act or omission of a registered representative or any
other employee or affiliate of Selling Broker-Dealer is the proximate cause of
any claim, damage, or liability (including reasonable attorneys' fees) to MLNY
or MSS, Selling Broker-Dealer shall be responsible and liable therefore. Selling
Broker-Dealer shall fully comply with the requirements of the NASD and of the
1934 Act and all other applicable federal or state laws.
Selling Broker-Dealer shall establish such rules and procedures as may be
necessary to cause diligent supervision of the securities activities of the
Sub-agents. Upon request of MSS, Selling Broker-Dealer shall furnish such
records as may be necessary to establish diligent supervision.
<PAGE> 4
V. AUTHORITY AND DUTIES OF GENERAL AGENT AND SELLING
BROKER-DEALER
A. CONTRACTS
The securities and insurance regulated Contracts issued by MLNY to which
the Agreement applies are listed in Schedule I, which may be amended from time
to time by MLNY. MLNY, in its sole discretion with prior or concurrent written
notice to Selling Broker-Dealer and General Agent, may suspend distribution of
any Contracts. MLNY also has the right to amend any Contracts at any time.
B. SECURING APPLICATIONS
Each application for a Contract shall be made on an application form
provided by MLNY, and all payments collected by Selling Broker-Dealer, General
Agent or any registered representative and Sub-agent shall be remitted promptly
in full, together with such application form and any other required
documentation, directly to MLNY at the address indicated on such application or
to such other address as may be designated. Selling Broker-Dealer and General
Agent shall review all such applications for completeness. Check or money order
in payment of such Contracts should be made payable to the order of "The
Manufacturers Life Insurance Company of New York." All applications are subject
to the acceptance or rejection by MLNY in its sole discretion.
C. RECEIPT OF MONEY
All money payable in connection with any of the Contracts whether as
premium, purchase payment or otherwise and whether paid by or on behalf of any
contract owner or anyone else having an interest in the Contracts, is the
property of MLNY and shall be transmitted immediately in accordance with the
administrative procedures of MLNY without any deduction or offset for any reason
including but not limited to, any deduction or offset for compensation claimed
by Selling Broker-Dealer or General Agent, unless there has been a prior
arrangement for net wire transmissions between MLNY and Selling Broker-Dealer or
General Agent.
D. NOTICE OF SUB-AGENT'S NONCOMPLIANCE
Selling Broker-Dealer shall notify MSS and General Agent in the event a
Sub-agent fails or refuses to submit to the supervision of Selling Broker-Dealer
or General Agent in accordance with this Agreement, the agreement between
Selling Broker-Dealer, General Agent and Sub-agent referred to in Section III,
Paragraph C and Section IV, Paragraph A, or otherwise fails to meet the rules
and standards imposed by Selling Broker-Dealer or its registered representatives
or General Agent or its Sub-agents. Selling Broker-Dealer or General Agent shall
also immediately notify such Sub-agent that he or she is no longer authorized to
sell the Contracts, and both Selling Broker-Dealer and General Agent shall take
whatever additional action may be necessary to terminate the sales activities of
such Sub-agent relating to the Contracts.
E. SALES PROMOTION, ADVERTISING AND PROSPECTUSES
No sales promotion materials, circulars, documents or any advertising
relating to any of the Contracts shall be used by Selling Broker-Dealer, General
Agent or any Sub-agents unless the specific item has been approved in writing by
MLNY prior to use. Selling Broker-Dealer shall be provided, without any expense
to Selling
<PAGE> 5
Broker-Dealer, with prospectuses relating to securities regulated Contracts.
Selling Broker-Dealer and General Agent shall be provided with such other
material as MLNY determines necessary or desirable for use in connection with
sales of the Contracts. Nothing in these provisions shall prohibit Selling
Broker-Dealer or General Agent from advertising life insurance and annuities on
a generic basis.
VI. COMPENSATION
A. COMMISSIONS AND FEES
Commissions and fees payable to Selling Broker-Dealer or General Agent in
connection with the securities regulated Contracts shall be paid by MSS to
Selling Broker-Dealer or General Agent, or as otherwise required by law.
Commissions and fees payable to Selling Broker-Dealer, General Agent or
Sub-agent in connection with the insurance regulated Contracts shall be paid by
MSS to Selling Broker-Dealer or General Agent, or as otherwise required by law.
Selling Broker-Dealer or General Agent, as applicable, shall pay Sub-agent. MSS
will provide Selling Broker-Dealer and General Agent with a copy of its current
Contracts, Commissions and Fees Schedule. Unless otherwise provided in the
Contracts, Commissions and Fees Schedule, commissions will be paid as a
percentage of premiums or purchase payments (collectively, Payments) received in
cash or their legal tender and accepted by MLNY on applications obtained by the
various Sub-agents appointed by General Agent hereunder. Upon termination of
this Agreement, all compensation to the Selling Broker-Dealer and General Agent
hereunder shall cease. However, Selling Broker-Dealer and General Agent shall be
entitled to receive compensation for all new and additional premium payments
which are in process at the time of termination, and shall continue to be liable
for any chargebacks pursuant to the provisions of said Contracts, Commissions
and Fees Schedule, or any other amounts advanced by or otherwise due MSS or MLNY
hereunder. No commission shall be paid in excess of the limits of Section 4228
of the New York Insurance Law and no expense allowance payment shall be made in
excess of the amount approved for payment by Manufacturers Life Insurance
Company of New York pursuant to New York Insurance Department Regulation No. 49.
B. TIME OF PAYMENT
MSS will pay any commissions due General Agent or Selling Broker-Dealer
hereunder within fifteen (15) days after the end of the calendar month in which
Payments upon which such commission is based are accepted by MLNY.
C. AMENDMENT OF SCHEDULES
MSS and MLNY may, upon at least ten (10) days' prior written notice to
Selling Broker-Dealer and General Agent, change the Contracts, Commissions and
Fees Schedule by written amendment of such Schedule. Any such change shall apply
to compensation due on applications received by MLNY after the effective date of
such by MLNY after the effective date of such notice.
D. PROHIBITION AGAINST REBATES
MSS or MLNY may terminate this Agreement if Selling Broker-Dealer, General
Agent or any Sub-agent of General Agent rebates, offers to rebate or withholds
any part of any Payments on the Contracts. If Selling Broker-Dealer, General
Agent or any Sub-agent of General Agent shall at any time induce or endeavor to
induce any owner of
<PAGE> 6
any Contract issued hereunder to discontinue payments or to relinquish any such
Contract, except under circumstances where there is reasonable grounds for
believing the Contract is not suitable for such person, anyand all compensation
due Selling Broker-Dealer or General Agent here under shall cease and terminate.
E. INDEBTEDNESS AND RIGHT OF SET OFF
Nothing contained in this Agreement shall be construed as giving Selling
Broker-Dealer or General Agent the right to incur any indebtedness on behalf of
MSS or MLNY. Selling Broker-Dealer and General Agent hereby authorize MSS to set
off liabilities of Selling Broker-Dealer and General Agent to MSS or MLNY
against any and all amounts otherwise payable to Selling Broker-Dealer or
General Agent.
VII. GENERAL PROVISIONS
A. WAIVER
Failure of any party to insist upon strict compliance with any of the
conditions of the Agreement shall not be construed as a waiver of any of the
conditions, but the same shall remain in full force and effect. No waiver of any
of the provisions of this Agreement shall be deemed to be, or shall constitute,
a waiver of any other provisions, whether or not similar, nor shall any waiver
constitute a continuing waiver.
B. LIMITATIONS
No party other than MLNY shall have the authority to 1) make, alter, or
discharge any Contract issued by MLNY; 2) waive any forfeiture or extend the
time of making any Payments; or 3) enter into any proceedings in a court of law
or before a regulatory agency in the name of or on behalf of MLNY. No party
other than MSS and MLNY, respectively, shall have the authority to: 1) alter the
forms which MSS or MLNY prescribe, or substitute other forms in place of those
prescribed by MSS; or 2) enter into any proceeding in a court of law or before a
regulatory agency in the name of or on behalf of MSS.
C. FIDELITY BOND AND OTHER LIABILITY COVERAGE
Selling Broker-Dealer and General Agent hereby assign any proceeds received
from a fidelity bonding company, error and omissions or other liability
coverage, to MLNY or MSS as their interest may appear, to the extent of their
loss due to activities covered by the bond, policy or other liability coverage.
If there is any deficiency amount, whether due to a deductible or otherwise,
Selling Broker-Dealer or General Agent shall promptly pay such amounts on
demand. Selling Broker-Dealer and General Agent hereby indemnify and hold
harmless MLNY and MSS from any deficiency and from the costs of collection
thereof (including reasonable attorneys' fees).
D. BINDING EFFECT
This Agreement shall be binding on and shall insure to the benefit of the
parties to it and their respective successors and assigns provided that neither
Selling Broker-Dealer nor General Agent may assign this Agreement or any rights
or obligations hereunder without prior written consent of MLNY.
E. REGULATIONS
All parties agree to observe and comply with the existing laws and rule or
<PAGE> 7
regulations of applicable local, state or federal regulatory authorities and
with those which may be enacted or adopted during the term of this Agreement
regulating the business contemplated hereby in any jurisdiction in which the
business described herein is to be transacted.
F. INDEMNIFICATION
1) MSS agrees to indemnify and hold harmless Selling Broker-Dealer and
General Agent, their officers, directors and employees, against any and all
losses, claims, damages or liabilities to which they may become subject under
the 1933 Act, the 1934 Act, or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact or any
omission or alleged omission to state a material fact required to be stated or
necessary to make the statements made not misleading in the registration
statement for the Contracts or for the shares of Manufacturers Investment Trust
("Trust") filed pursuant to the 1933 Act, or any prospectus included as a part
thereof, as from time to time amended and supplemented. MSS agrees to indemnify
and hold harmless Selling Broker-Dealer and General Agent, their officers,
directors and employees, against any and all losses, claims, damages or
liabilities to which they may become subject under the 1933 Act, the 1934 Act,
or other federal or state statutory law or regulation, at common law or
otherwise insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact or any omission or alleged omission to state
a material fact required to be stated or necessary to make the statements made
not misleading in any advertisement or sales literature approved in writing by
MLNY pursuant to Section V, Paragraph E of this Agreement. 2) Selling
Broker-Dealer and General Agent agree to indemnify and hold harmless MSS and
MLNY, their officers, directors, and employees, against any and all losses,
claims, damages or liabilities to which they may become subject under the 1933
Act, the 1934 Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of liabilities (or actions in respect
thereof) arise out of or are based upon: a) any oral or written
misrepresentations by Selling Broker-Dealer or General Agent or their officers,
directors, employees or agents unless such misrepresentation is contained in the
registration statement for the Contracts or Trust shares, any prospectus
included as a part thereof, as from time to time amended and supplemented, or
any advertisement or sales literature approved in writing by MLNY pursuant to
Section V, Paragraph E, of this Agreement, or b) the failure of Selling
Broker-Dealer or General Agent or their officers, directors, employees or agents
to comply with any applicable provisions of this Agreement.
G. NOTICES
All notices or communications shall be sent to the address shown in this
Agreement, or to such other address as the party may request, by giving written
notice to the other parties.
H. GOVERNING LAW
This Agreement shall be construed in accordance with and governed by the
laws of the State of New York.
<PAGE> 8
I. AMENDMENT OF AGREEMENT
MLNY reserves the right to amend this Agreement in writing at any time. The
submission of an application for the Contracts by Selling Broker-Dealer or
General Agent five or more business days after notice of any such amendment has
been sent to the other parties shall constitute agreement to such amendment.
J. GENERAL AGENT AS BROKER-DEALER
If Selling Broker-Dealer and General Agent are the same person or legal
entity, such person or legal entity shall have the rights and obligations
hereunder of both Selling Broker-Dealer and General Agent and this Agreement
shall be binding and enforceable in both capacities.
K. COMPLAINTS AND INVESTIGATIONS
General Agent, Selling Broker- Dealer and MSS agree to cooperate fully in
the event of any regulatory investigation, inquiry or proceedings, judicial
proceedings or customer complaint involving the Contracts. In furtherance of the
foregoing: 1) each party will notify all other parties of any such
investigation, inquiry, proceedings or complaint involving the Contracts or
affecting the ability of a party to perform pursuant to this Agreement within 10
days of obtaining knowledge of the same; and 2) in the case of a customer
complaint the involved parties will consult with each other prior to sending any
written response with respect to such complaint.
L. TERMINATION
This Agreement may be terminated without cause, by any party upon thirty
(30) days' prior written notice; and may be terminated, for cause, by any party
immediately; and shall be terminated as respects securities regulated Contracts
if MSS or Selling Broker-Dealer shall cease to be a registered broker-dealer
under the Securities Exchange 1934 Act and a member of the NASD.
ADDRESS FOR NOTICES
For The Manufacturers Life Insurance Company of New York:
International Corporate Center at Rye
555 Theodore Fremd Avenue
Suite C-209
Rye, NY 10580
<PAGE> 9
For Manufacturers Security Services, LLC: ------------------------------------
------------------------------------
73 Tremont Street
Boston, MA 02108
For General Agent:
------------------------------------
For Selling Broker-Dealer: ------------------------------------
- --------------------------------------- ------------------------------------
- --------------------------------------- ------------------------------------
This Agreement shall be effective upon execution by General Agent and Selling
Broker-Dealer, and delivery of the Agreement to MSS.
Manufacturers Securities Services, LLC by
The Manufacturers Life Insurance
Company of North America, Managing
Member, By: Dated:
------------------------------
/s/ Richard Hirtle
- --------------------------------------- ------------------------------------
Richard Hirtle, VP Treasurer & CFO (General Agent)
By:
---------------------------------
(Name and Title)
The Manufacturers Life Insurance Company ------------------------------------
of New York, By: (Selling Broker-Dealer)
/s/ Joseph M. Scott By:
- --------------------------------------- ------------------------------------
Joseph M. Scott, President (Name and Title)
<PAGE> 10
EXHIBIT A
GENERAL LETTER OF RECOMMENDATION
General Agent hereby certifies to MLNY that all of the following
requirements will be fulfilled in conjunction with the submission of
licensing/appointment papers for all applicants as Sub-agents submitted by
General Agent. General Agent will, upon request, forward proof of compliance
with same to MLNY in a timely manner.
1. We have made a thorough and diligent inquiry and investigation relative
to each applicant's identity, residence and business reputation and declare that
each applicant is personally known to us, has been examined by us, is known to
be of good moral character, has a good business reputation, is reliable, is
financially responsible and is worthy of a license. Each individual is
trustworthy, competent and qualified to act as an agent for MLNY to hold himself
or herself out in good faith to the general public. We vouch for each applicant.
2. We have on file a B-300, B-301 or U-4 form which was completed by each
applicant. We have fulfilled all the necessary investigative requirements for
the registration of each applicant as a registered representative through our
NASD member firm, and each applicant is presently registered as an NASD
registered representative. The above information in our files indicates no fact
or condition which would disqualify the applicant from receiving a license and
all the findings of all investigative information is favorable.
3. We certify that all educational requirements have been met for the
specific state in which each applicant is requesting a license, and that all
such persons have fulfilled the appropriate examination, education and training
requirements.
4. If the applicant is required to submit his or her picture, signature,
and securities registration in the state in which he or she is applying for a
license, we certify that those items forwarded to MLNY are those of the
applicant and the securities registration is a true copy of the original.
5. We hereby warrant that the applicant is not applying for a license with
MLNY in order to place insurance chiefly and solely on his or her life or
property, lives or property of his or her relatives, or property or liability of
his or her associates.
6. We certify that each applicant will receive close and adequate
supervision, and that we will make inspection when needed of all or any risks
written by these applicants, to the end that the insurance interest of the
public will be properly protected.
7. We will not permit any applicant to transact insurance as an agent until
duly licensed therefore. No applicants have been given a contract or furnished
supplies, nor have any applicants been permitted to write, solicit business, or
act as an agent in any capacity, and they will not be so permitted until the
certificate of authority or license applied for is received.
8. We certify that the General Agent, Selling Broker-Dealer and applicant
shall have entered into a written agreement pursuant to which: a) applicant is
appointed a Sub-agent of General Agent and a registered representative fee
Selling Broker-Dealer; b) applicant agrees that his or her selling activities
relating to securities regulated Contracts shall be under the supervision and
control of Selling Broker-Dealer and his or her selling activities relating to
insurance regulated Contracts shall be under the supervision and control of
General Agent; and c) that applicant's right to continue to sell such Contracts
is subject to this or her continued compliance with such agreement and any
procedures, rules or regulations implemented by Selling Broker-Dealer or General
Agent.
<PAGE> 1
THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NEW YORK
- --------------------------------------------------------------------------------
HOME OFFICE:
International Corporate Center at Rye
555 Theodore Fremd Avenue
Rye, N.Y. 10580
THIS IS A LEGAL CONTRACT - READ IT CAREFULLY.
WE AGREE to pay the benefits of this Contract in accordance with its terms.
THIS CONTRACT is issued in consideration of the Application
and the Purchase Payments.
SIGNED FOR THE COMPANY at its Executive Office, Rye, New York,
on the Contract Date.
DETAILS OF VARIABLE ACCOUNT PROVISIONS ON PAGE 9
DETAILS OF FIXED ACCOUNT PROVISIONS ON PAGE 10
DETAILS OF MARKET VALUE CHARGE PROVISIONS ON PAGE 10
President Secretary
Flexible Purchase Payment Deferred Combination Fixed and Variable Annuity
Non-Participating
ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON
THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT ARE VARIABLE AND
NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
TEN DAY RIGHT TO REVIEW
The Contract Owner may cancel the Contract by returning it to our Annuity
Service Office or agent at any time within 10 days after receipt of the
Contract. Within 7 days of receipt of the Contract by us, we will pay the
Contract Value, computed at the end of the Valuation Period, on the date of
surrender, to the Contract Owner.
<PAGE> 2
INTRODUCTION
- --------------------------------------------------------------------------------
This is a flexible purchase payment deferred combination fixed and variable
annuity. This Contract provides that prior to the Maturity Date, the Contract
Value will accumulate on either a fixed or variable basis or a combination of
both. After the Maturity Date, annuity payments may be either fixed or variable,
or a combination of fixed and variable.
The variable portion of the Contract will vary with the investment performance
of the Variable Account. The fixed portion of the Contract will accumulate based
on interest rates guaranteed by the Company for the period selected.
If you select annuity payments on a variable basis, the payment amount will vary
with the investment performance of the Variable Account.
You must allocate Purchase Payments among one or more Investment Options. The
Investment Options are identified in the Application and on the Contract
Specifications Page.
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Contract Specifications Page Page
PART 1 - DEFINITIONS .................................................... 1
PART 2 - GENERAL PROVISIONS.............................................. 3
PART 3 - OWNERSHIP....................................................... 5
PART 4 - BENEFITS ....................................................... 6
PART 5 - PURCHASE PAYMENTS .............................................. 8
PART 6 - VARIABLE ACCOUNT PROVISIONS .................................... 9
PART 7 - FIXED ACCOUNT PROVISIONS ....................................... 10
PART 8 - ANNUITY PROVISIONS ............................................. 11
PART 9 - TRANSFERS ...................................................... 12
PART 10 - WITHDRAWAL PROVISIONS .......................................... 13
PART 11 - CHARGES AND DEDUCTIONS ......................................... 16
PART 12 - PAYMENT OF CONTRACT BENEFITS ................................... 16
<PAGE> 3
PART 1 DEFINITIONS
- --------------------------------------------------------------------------------
ACCUMULATION UNIT A unit of measure that is used to calculate the
value of the variable portion of the Contract
before the Maturity Date.
ANNUITANT Any natural person or persons whose life is used
to determine the duration of annuity payments
involving life contingencies. If you name more
than one person as an "Annuitant", the second
person named shall be referred to as "Co-
Annuitant". All provisions based on the date of
death of the "Annuitant" will be based on the date
of death of the last to survive of the "Annuitant"
or "Co-Annuitant". In the event of the death of
the "Annuitant" or "Co-Annuitant" who is also a
Contract Owner, a death benefit is payable under
the Death of Owner Provision. The "Annuitant" and
"Co-Annuitant" will be collectively referred to as
"Annuitant" in this Contract. The Annuitant is as
specified in the Application, unless changed.
ANNUITY OPTION The method selected by you for annuity payments
made by us. Unless you indicate otherwise, we will
provide either variable or fixed, or a combination
variable and fixed annuity payments in proportion
to the Investment Account Value of each Investment
Option at the Maturity Date. Annuity payments will
continue for 10 years or the life of the
Annuitant, if longer.
ANNUITY SERVICE OFFICE Any office designated by us for the receipt of
Purchase Payments and processing of Contract
Owner requests.
ANNUITY UNIT A unit of measure that is used after the Maturity
Date to calculate Variable Annuity payments.
BENEFICIARY The person or persons, or entity entitled to the
death benefit under this Contract upon the death
of the Annuitant. The Beneficiary is as specified
in the Application, unless changed. (See also
"Successor Owner")
CONTINGENT BENEFICIARY The person or persons, or entity to become the
Beneficiary if the Beneficiary is not alive. The
Contingent Beneficiary is as specified in the
Application, unless changed.
CONTRACT ANNIVERSARY The anniversary of the Contract Date.
CONTRACT DATE The date of issue of the Contract.
CONTRACT VALUE The total of the Investment Account Values and, if
applicable, any amount in the Loan Account
attributable to the Contract.
CONTRACT YEAR The period of twelve consecutive months beginning
on the Contract Date or any anniversary
thereafter.
DEBT Any amounts in the Loan Account attributable to
the Contract plus any accrued loan interest. The
loan provision is applicable to Qualified
Contracts only.
DESIGNATED BENEFICIARY For purposes of section 72(s) of the Internal
Revenue Code of 1986, the "designated beneficiary"
under the contract shall be the individual who is
entitled to receive the amounts payable on death,
or if any Owner is not an individual, on any
change in (or death of) the Annuitant or
Co-Annuitant.
FIXED ANNUITY An Annuity Option with payments which are
predetermined and guaranteed as to dollar amount.
GENERAL ACCOUNT All the assets of The Manufacturers Life Insurance
Company of New York other than assets in separate
accounts.
1
<PAGE> 4
INVESTMENT ACCOUNT An account established by us which represents your
interest in an Investment Option prior to the
Maturity Date.
INVESTMENT ACCOUNT VALUE The value of your investment in an Investment
Account.
INVESTMENT OPTIONS The Investment Options can be either fixed or
variable. The Investment Options available under
this Contract are shown on the Contract
Specifications Page.
LOAN ACCOUNT The portion of the General Account that is used
for collateral when a loan is taken.
MARKET VALUE CHARGE A charge that may be assessed if amounts are
withdrawn or transferred from the 3-year or 6-year
Investment Options prior to the end of the
interest rate guarantee period.
MATURITY DATE The date on which annuity benefits commence. It is
the date specified on the Contract Specifications
Page, unless changed.
NET PURCHASE PAYMENT The Purchase Payment less the amount of premium
tax, if any, deducted from the Purchase Payment.
NON-QUALIFIED CONTRACTS Contracts which are not issued under Qualified
Plans.
OWNER OR CONTRACT OWNER The person, persons, or entity entitled to the
ownership rights under this Contract. The Owner
is as specified in the Application, unless
changed.
PORTFOLIO OR TRUST A separate portfolio of Manufacturers Investment
PORTFOLIO Trust, a mutual fund in which PORTFOLIO the
Variable Account invests, or any successor mutual
fund.
PURCHASE PAYMENT An amount paid to us by you as consideration for
the benefits provided by the Contract.
QUALIFIED CONTRACTS Contracts issued under Qualified Plans.
QUALIFIED PLANS Retirement Plans which receive favorable tax
treatment under section 401, 403, 408 or 457, of
the Internal Revenue Code of 1986, as amended.
SEPARATE ACCOUNT A segregated account of The Manufacturers Life
Insurance Company of New York that is not
commingled with our general assets and
obligations.
SUB-ACCOUNT(S) One or more of the Sub-Accounts of the Variable
Account. Each Sub-Account is invested in shares of
a different Trust Portfolio.
SUCCESSOR OWNER The person, persons, or entity to become the Owner
if the Owner dies prior to the Maturity Date. The
Successor Owner is as specified in the
Application, unless changed. If no Successor
Owner is designated, or the Successor Owner dies
before the Owner, the Owner's estate is the
Successor Owner. (See also "Beneficiary")
VALUATION DATE Any date on which the New York Stock Exchange is
open for business and the net asset value of a
Trust Portfolio is determined.
VALUATION PERIOD Any period from one Valuation Date to the next,
measured from the time on each such date that the
net asset value of each Portfolio is determined.
VARIABLE ACCOUNT The Manufacturers Life Insurance Company of New
York Separate Account A, which is a separate
account of The Manufacturers Life Insurance
Company of New York.
VARIABLE ANNUITY An Annuity Option with payments which: (1) are not
predetermined or guaranteed as to dollar amount,
and (2) vary in relation to the investment ex
perience of one or more specified variable
Sub-Accounts.
WE AND YOU "We", "us" and "our" means The Manufacturers Life
Insurance Company of
2
<PAGE> 5
New York. "You" or "your" means the Owner of this
Contract.
PART 2 GENERAL PROVISIONS
- --------------------------------------------------------------------------------
ENTIRE CONTRACT This Contract and any Contract endorsements and
attached copy of the Application are the entire
Contract. Only our President, Vice-President or
Secretary may agree to change or waive any
provisions of the Contract. The change or waiver
must be in writing.
We will not change or modify this Contract without
your consent except as may be required to make it
conform to any applicable law or regulation or any
ruling issued by a government agency.
The benefits and values available under this
Contract are not less than the minimum required
by the state of New York. We have filed a detailed
statement of the method used to calculate the
benefits and values with the New York Department
of Insurance.
BENEFICIARY The Beneficiary is the person or persons to whom
benefits will be paid upon death of the Annuitant.
Unless otherwise indicated, the Beneficiary will
be revocable. A revocable Beneficiary may be
changed by you. If changed, the Beneficiary is as
shown in the latest change. Prior to the Maturity
Date, if no Beneficiary survives the Annuitant,
you or your estate will be the Beneficiary. The
interest of any revocable Beneficiary is subject
to that of any assignee. If more than one
Beneficiary is designated, the interest of a
Beneficiary who dies before any other Beneficiary
will pass to the surviving Beneficiaries in
proportion to their share in the benefits unless
otherwise provided.
CHANGE IN MATURITY DATE Prior to the Maturity Date, you may change the
Maturity Date by written request at least one
month before both the previously specified
Maturity Date and the new Maturity Date. After the
election, the new Maturity Date will become the
Maturity Date. The maximum Maturity Date will be
the first of the month following the Annuitant's
eighty-fifth birthday. Any extension of the
maximum Maturity Date will be allowed only with
our prior approval.
ASSIGNMENT You may assign this Contract at any time during
the lifetime of the Annuitant and prior to the
Maturity Date. No assignment will be binding on us
unless it is written in a form acceptable to us
and received at our Annuity Service Office. We
will not be liable for any payments made or
actions we take before the assignment is accepted
by us. An absolute assignment will revoke the
interest of any revocable Beneficiary. We will not
be responsible for the validity of any as
signment. A Qualified Contract may not be assigned
to any person other than the employer.
CLAIMS OF CREDITORS To the extent permitted by law, no payments under
this Contract will be subject to the claims of
your, the Beneficiary's or the Annuitant's
creditors.
MISSTATEMENT AND PROOF We may require proof of age, sex or survival of
OF AGE, SEX OR SURVIVAL any person upon whose age, sex or survival any
payments depend. If the age or sex of the
Annuitant has been misstated, the benefits will be
those which the Purchase Payments would have
provided for the correct age and sex. If we have
made incorrect annuity payments, the amount of any
underpayment, adjusted with interest at 4% per
annum, will be paid immediately. The amount of any
overpayment will be deducted from future annuity
payments.
ADDITION, DELETION OR We reserve the right, subject to prior approval of
the New York
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SUBSTITUTION OF superintendent of Insurance and compliance with
INVESTMENT OPTIONS applicable law, to make additions to, deletions
from, or substitutions for the Portfolio shares
that are held by the Variable Account or that the
Variable Account may purchase. We reserve the
right to eliminate the shares of any of the
eligible Portfolios and to substitute shares of
another Portfolio of the Trust, or of another
open-end registered investment company, if the
shares of any eligible Portfolio are no longer
available for in vestment, or if in our judgment
further investment in any eligible Portfolio
should become inappropriate in view of the
purposes of the Variable Account. We will not
substitute any shares attributable to your
interest in a Sub-Account without notice to you
and prior approval of the Securities and Exchange
Commission to the extent required by the
Investment Company Act of 1940. Nothing contained
herein shall prevent the Variable Account from
purchasing other securities for other series or
classes of contracts, or from effecting a
conversion between shares of another open-end
investment company.We reserve the right, subject
to prior approval of the New York Superintendent
of Insurance and compliance with applicable law,
to establish additional Sub-Accounts which would
invest in shares of a new Portfolio of the Trust
or in shares of another open-end investment
company. We also reserve the right, subject to
prior approval of the New York Superintendent of
Insurance and compliance with applicable law, to
eliminate existing Sub-Accounts, to combine
Sub-Accounts or to transfer assets in a
Sub-Account to another Separate Account
established by us or an affiliated company. In the
event of any such substitutions or changes, we
may, by appropriate endorsement, make such changes
in this and other Contracts as may be necessary or
appropriate to reflect such substitutions or
changes. If deemed by us to be in the best
interests of persons having voting rights under
the Contracts, the Variable Account may be
operated as a management company under the
Investment Company Act of 1940 or it may be
deregistered under such Act in the event such
registration is no longer required.
NON-PARTICIPATING Your Contract is non-participating and will not
share in our profits or surplus earnings. We will
pay no dividends on your Contract.
REPORTS At least once each year we will send you a report
containing information required by the Investment
Company Act of 1940 and the laws of the state of
New York.
INSULATION The portion of the assets of the Variable Account
equal to the reserves and other contract
liabilities with respect to such account are not
chargeable with liabilities arising out of any
other business we may conduct. Moreover, the
income, gains and losses, realized or unrealized,
from assets allocated to the Variable Account
shall be credited to or charged against such
account without regard to our other income, gains
or losses.
OWNERSHIP OF ASSETS We shall have exclusive and absolute ownership and
control of our assets, including the assets of the
Variable Account.
CURRENCY AND PLACE OF All payments made to or by us shall be made in the
PAYMENTS lawful currency of the United States of America.
Payments to us or by us shall be made at the
Annuity Service Office or elsewhere if we consent.
NOTICES AND ELECTIONS To be effective, all notices and elections you
make under this Contract must be in writing,
signed by you and received by us at our Annuity
Service Office. Un less otherwise provided, all
notices, requests and elections will be effective
when received by us, complete with all necessary
information and your signature, at our Annuity
Service Office.
GOVERNING LAW This Contract will be governed by the laws of the
state of New York.
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PART 3 OWNERSHIP
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GENERAL During the Annuitant's lifetime and prior to the
Maturity Date, the Owner of this Contract shall be
the person so named in the Application or the
latest change filed with us. On and after the
Maturity Date, the Annuitant is the Owner of the
Contract. After the Annuitant's death, the
Beneficiary is the Owner of the Contract.
CHANGE OF OWNER, Subject to the rights of an irrevocable
ANNUITANT, BENEFICIARY Beneficiary, you may change the Beneficiary during
the Annuitant's lifetime by written request in a
form acceptable to us and which is received at our
Annuity Service Office. The Annuitant may not be
changed after the Maturity Date. You need not send
us the Contract unless we request it. Any change
must be approved by us. If approved, it will take
effect on the date you signed the request. We will
not be liable for any payments or actions we take
before the change is approved. In the case of the
Qualified Contracts, ownership of the Contract
generally may not be transferred except by the
trustee of an exempt employees' trust which is
part of a retirement plan qualified under section
401 of the Internal Revenue Code. Subject to the
foregoing, a Qualified Contract may not be sold,
assigned, transferred, discounted 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 the employer.
PART 4 BENEFITS
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ANNUITY BENEFITS We will pay a monthly income to the Annuitant, if
living, on the Maturity Date. Payments can be
fixed or variable, or a combination of fixed and
variable. Annuity benefits will commence on the
Maturity Date and continue for the period of time
provided for under the Annuity Option selected.
We may pay the Contract Value, less Debt, on the
Maturity Date in one lump sum if the monthly
income is less than $20.
On or before the Maturity Date you must select how
the Contract Value will be used to provide the
monthly income. You may select a Fixed or Variable
Annuity. Unless you indicate otherwise, we will
provide either variable or fixed, or a combination
variable and fixed annuity payments in proportion
to the Investment Account Value of each Investment
Option at the Maturity Date. Annuity payments will
continue for 10 years or the life of the
Annuitant, if longer.
If a Variable Annuity is used, the amount of the
first monthly annuity payment will be obtained
from the appropriate option table under the
"Payment of Contract Benefits" Section. Subsequent
monthly annuity payments will vary based on the
investment experience of the Sub-Account(s) used
to effect the annuity. The method used to
calculate the amount of the initial and subsequent
payments is described under the "Variable Annuity
Payments" Section of Part 8.
If a Fixed Annuity is used, the portion of the
Contract Value used to effect a Fixed Annuity will
be applied to the appropriate table contained in
this Contract. If the table in use by us on the
Maturity date is more favorable to you, we will
use that table. We guarantee the dollar amount of
fixed annuity payments.
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DEATH BENEFIT BEFORE DEATH OF ANNUITANT WHERE YOU ARE NOT THE
MATURITY DATE ANNUITANT. We will pay the minimum death benefit,
less any Debt, to the Beneficiary if you are not
the Annuitant and the Annuitant dies before the
Maturity Date. Payment will be made either as a
lump sum or in accordance with any Annuity Option
described in this Contract. If there is more than
one Annuitant, the minimum death benefit will be
paid on the death of the last surviving
Co-Annuitant. Upon the death of the Annuitant, the
Beneficiary becomes the Owner of the Contract and
may elect to continue the Contract rather than to
receive payment of the minimum death benefit.
DEATH OF ANNUITANT WHERE YOU ARE THE ANNUITANT. We
will pay the minimum death benefit, less any debt,
to the Beneficiary if you are the Annuitant, there
is no surviving Co-Annuitant and you die before
the Maturity Date. The Beneficiary becomes
entitled to exercise ownership rights in the
Contract and may continue the Contract. If this is
a Non-Qualified Contract, the following special
distribution rules apply. Distribution of the
Beneficiary's interest in the Contract must be
made within 5 years after your death or as an
annuity which begins within one year of death and
is payable over the life of the Beneficiary (or
over a period not in excess of the Beneficiary's
life expectancy). If your spouse is the
Beneficiary, your spouse may elect to be treated
as Owner and distribution will be made no later
than the date on which distribution would be
required after the death of your spouse. If you
are the Annuitant, there is a surviving
Co-Annuitant, and you die before the Maturity
Date, payment of your interest in the Contract
will be made in accordance with the Death of Owner
provision of this Contract.
MINIMUM DEATH BENEFIT. If the Annuitant dies on or
prior to the first of the month following his or
her 85th birthday, the minimum death benefit will
be determined as follows:
1. During the first 6 Contract Years, the
minimum death benefit will be the greater of:
a) the Contract Value on the date that due
proof of death is received at the
Annuity Service Office, or
b) The sum of all Purchase Payments made,
less any amount deducted in connection
with partial withdrawals.
2. During any subsequent 6 Contract Year period,
the minimum death benefit will be the greater
of:
a) the Contract Value on the date that due
proof of death is received at the
Annuity Service Office, or
b) the minimum death benefit on the last
day of the previous 6 Contract Year
period plus any Purchase Payments made
and less any amount deducted in
connection with partial withdrawals
since then.
If the Annuitant dies after the first of the month
following his or her 85th birthday, the minimum
death benefit will be the Contract Value on the
date that due proof of death is received at the
Annuity Service Office.
DEATH OF OWNER. If you die before the Annuitant
and before the Maturity Date, the Successor Owner
will become the Owner of the Contract and will be
entitled to your interest in the Contract (the
amount payable on total withdrawal). If this is a
Non-Qualified Contract, the following special
distribution rules apply. Distribution of such
interest must be made within 5 years after your
death or as an annuity which begins within one
year of death and is payable over the life of the
Successor Owner (or over a period not in excess of
the Successor Owner's life expectancy). If your
spouse is the Successor Owner, your spouse will be
treated as Owner and distribution will be made no
later than the date distribution would be required
after the
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death of your spouse. If you
DEATH BENEFIT ON OR AFTER If annuity payments have been selected based on an
MATURITY DATE Annuity Option providing for a guaranteed period,
and the Annuitant dies on or after the Maturity
Date, we will make the remaining guaranteed
payments to the Beneficiary. Such payments will be
made as rapidly as under the method of
distribution being used as of the date of the
Annuitant's death. If no Beneficiary is living, we
will commute any unpaid guaranteed payments to a
single sum (on the basis of the interest rate used
in determining the payments) and pay that single
sum to the estate of the last to die of the
Annuitant and the Beneficiary.
DUE PROOF OF DEATH Due proof of death is required upon the death of
the Annuitant or the Owner. Due proof of death is
one of the following received at the Annuity
Service Office within 1 year of the date of death:
a) A certified copy of a death certificate.
b) A certified copy of a decree of a court of
competent jurisdiction as to the finding of
death.
c) Any other proof satisfactory to us.
Death benefits will be paid within 7 days of
receipt of due proof of death, accompanied by
appropriate distribution instructions.
PART 5 PURCHASE PAYMENTS
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GENERAL All Purchase Payments under this Contract are
payable at our Annuity Service Office or such
other place as we may designate.
The minimum Purchase Payment will be $30. However
at least $300 must be paid during the first
Contract Year. Purchase Payments may be made at
any time. If a Purchase Payment would cause the
Contract Value to exceed $1,000,000, or the
Contract Value already exceeds $1,000,000, no
additional Purchase Payments will be accepted
without our prior approval.
NONPAYMENT OF PURCHASE If, prior to the Maturity Date, no Purchase
PAYMENTS FOR THREE YEARS Payments are made for three consecutive Contract
Years, and if both:
a) the total Purchase Payments made, less any
partial withdrawals, are less than $2,000;
and
b) the Contract Value at the end of such three
year period is less than $2,000;
we may cancel the Contract and pay you the
Contract Value (measured as of the Valuation
Period during which the cancellation occurs), less
any Debt and administration fee.
ALLOCATION OF NET When we receive Purchase Payments, the Net
PURCHASE PAYMENTS Purchase Payments will be allocated among
Investment Options in accordance with the
allocation percentages shown in the Application.
You may change the allocation of subsequent
Purchase Payments at any time, without charge, by
giving us written notice.
PART 6 VARIABLE ACCOUNT PROVISIONS
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INVESTMENT ACCOUNT We will establish a separate Investment Account
for you for each variable Investment Option to
which you allocate amounts. The Investment Account
represents the number of your Accumulation Units
in an Investment Option.
INVESTMENT ACCOUNT VALUE The Investment Account Value of an Investment
Account is determined by (a) times (b) where:
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a) equals the number of Accumulation Units
credited to the Investment Account, and
b) equals the value of the appropriate
Accumulation Unit.
ACCUMULATION UNITS We will credit Net Purchase Payments to your
Investment Accounts in the form of Accumulation
Units. The number of Accumulation Units to be
credited to each Investment Account of the
Contract will be determined by dividing the Net
Purchase Payment allocated to that Investment
Account by the Accumulation Unit value for that
Investment Account.
Accumulation Units will be adjusted for any
transfers and will be canceled on payment of a
death benefit, withdrawal, maturity or assessment
of certain charges based on their value for the
Valuation Period in which such transaction occurs.
VALUE OF ACCUMULATION The Accumulation Unit value for any Valuation
UNIT Period is determined by multiplying the
Accumulation Unit value for the immediately
preceding Valuation Period by the "net investment
factor" for the Investment Account for the
Valuation Period for which the value is being
determined. The value of an Accumulation Unit may
increase, decrease or remain the same from one
Valuation Period to the next.
NET INVESTMENT FACTOR The net investment factor for a variable
Investment Account is an index that measures the
investment performance of a Sub-Account from one
Valuation Period to the next. The net investment
factor for any Valuation Period is determined by
dividing (a) by (b) and subtracting (c) from the
result where:
a) is the net result of:
1) the net asset value per share of a
Portfolio share held in the Sub-Account
determined as of the end of the current
Valuation Period, plus
2) the per share amount of any dividend or
capital gain distributions made by the
Portfolio on shares held in the
Sub-Account if the "ex-dividend" date
occurs during the current Valuation
Period, and
(b) is the net asset value per share of a
Portfolio share held in the Sub-Account
determined as of the end of the immediately
preceding Valuation Period, and
(c) is a factor representing the charges deducted
from the Sub-Account on a daily basis. Such
factor is equal on an annual basis to 1.40%
(1.25% for mortality and expense risks; and
0.15% for administrative expenses).
The net investment factor may be greater or less
than, or equal to, one.
PART 7 FIXED ACCOUNT PROVISIONS
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INVESTMENT ACCOUNT We will establish a separate Investment Account
for you each time you allocate amounts to a fixed
Investment Option. Any amounts you allocate to the
same fixed Investment Option on the same day will
establish a new Investment Account. Amounts
invested in these Investment Accounts will earn
interest at the guaranteed rate in effect on the
date the amounts are allocated for the duration of
the guarantee period.
We will determine the guaranteed rate from time to
time for new allocations, but in no event will the
minimum guaranteed rate under a fixed Investment
Account be less than 4%.
GUARANTEE PERIODS For any amounts allocated to the
fixed options, you have the choice of the length
of the guarantee period. The amount can be
allocated into any combination of the 1-year,
3-year or 6-year guarantee periods.
Separate Investment Accounts will be established
for each guarantee period. The guarantee period
will be the 1-year, 3-year or 6-year period
measured from the date the amount is allocated to
the Investment Account.
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Amounts cannot be allocated to a fixed option that
would extend the guarantee period beyond the
Maturity Date.
RENEWALS The renewal amount is the Investment
Account Value at the end of the particular
guarantee period.
The renewal amount will be automatically renewed
in the same Investment Option at the end of the
guarantee period, unless you specify otherwise. If
renewal in a particular Investment Option would
result in the guarantee period for that In
vestment Account being beyond the Maturity Date,
the renewal amount may not be renewed in that
Investment Option. The renewal amount will be
applied to the longest guarantee period of an
Investment Option such that the guarantee period
does not extend beyond the Maturity Date. Renewals
within 3 years of the Maturity Date will be
applied to the 1 Year Investment Option.
INVESTMENT ACCOUNT VALUE The amount in the Investment Accounts will
accumulate at a rate of interest determined by us
and in effect on the date the amount is allocated
to the Investment Account. The Investment Account
Value is the accumulated value of the amount
invested in the Investment Account reduced by any
withdrawals, loans, transfers or charges taken
from the Investment Account.
MARKET VALUE CHARGE Any amounts withdrawn from a 3-year or a 6-year
fixed Investment Account, prior to the end of the
guarantee period, may be subject to a Market Value
Charge. The Market Value Charge will only apply to
amounts withdrawn from a 3-year or 6-year
Investment Account pursuant to a partial
withdrawal, total withdrawal, transfer or a loan.
A Market Value Charge will be calculated
separately for each 3-year or 6-year Investment
Account affected. The Market Value Charge for a
particular Investment Account will be calculated
by multiplying the amount withdrawn or transferred
from the Investment Account by the adjustment
factor described below.
The adjustment factor for a particular Investment
Account is determined by the following formula:
0.75 x (B-A) x C/12
Where A, B and C are defined as follows:
A- The guaranteed interest rate on the
Investment Account.
B- The guaranteed interest rate available, on
the date the request is processed, for
amounts allocated to a new Investment Account
with the same length of guarantee period as
the Investment Account from which amounts are
being withdrawn.
C-The number of complete months remaining to
the end of the guarantee period.
For purposes of this calculation, the maximum
difference between "B" and "A" will be 3%.
Furthermore, the adjustment factor will never be
greater than 2 x (A - 4%) and never less than
zero.The total Market Value Charge will be the sum
of the Market Value Charges for each Investment
Account being withdrawn. For full withdrawals, the
Market Value Charge will be calculated on the
total amount of each Investment Account, and the
total Market Value Charge will be deducted from
the amount otherwise payable. For partial
withdrawals, the Market Value Charge will be
calculated based on the withdrawal amount
requested from each Investment Account and the
Market Value Charge, if applicable, will be
deducted from the remaining Investment Account
Value.
For transfers (including transfers to the Loan
Account pursuant to a loan request) the Market
Value Charge, if applicable, will be deducted from
the amount transferred.
There will be no Market Value Charge on
withdrawals from the fixed
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Investment Accounts in the following situations:
(a) death of the Annuitant, (b) amounts withdrawn
to pay any fees or charges, and (c) amounts
withdrawn from 3-year or 6-year Investment
Accounts within one month prior to the end of the
guarantee period.
In no event will the Market Value Charge exceed
the earnings attributable to the amount withdrawn
from an Investment Account.
In no event will the Market Value Charge plus any
withdrawal charges for an In vestment Account be
greater than 10% of the amount transferred or
withdrawn.
In no event will the Market Value Charge reduce
the amount payable on withdrawal or transfer below
the amount required under the non-forfeiture laws
of the state that has jurisdiction over this
Contract.
PART 8 ANNUITY PROVISIONS
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VARIABLE ANNUITY PAYMENTS The amount of the first variable annuity payment
is determined by applying the portion of the
Contract Value used to effect a Variable Annuity,
measured as of a date not more than 10 business
days prior to the Maturity Date (minus any ap
plicable premium taxes), to the appropriate
tables(s) contained in this Contract. If the table
in use by us on the Maturity Date is more
favorable to you, we will use that table.
Subsequent payments will be based on the
investment performance of one or more Sub-Accounts
as you select. The amount of such payments is
determined by the number of Annuity Units credited
for each Sub-Account. Such number is determined by
dividing the portion of the first payment
allocated to that Sub-Account by the Annuity Unit
value for that Sub-Account determined as of the
same date that the Contract Value to effect
annuity payments was determined. This number of
Annuity Units for each Sub-Account is then
multiplied by the appropriate Annuity Unit value
for each subsequent determination date, which is a
uniformly applied date not more than 10 business
days before the payment is due.
MORTALITY AND EXPENSE We guarantee that the dollar amount of each
GUARANTEE variable annuity payment will not be affected by
changes in mortality and expense experience.
ANNUITY UNIT VALUE The value of an Annuity Unit for each Sub-Account
for any Valuation Period is determined as follows:
a) The net investment factor for the Sub-Account
for the Valuation Period for which the Annuity
Unit value is being calculated is multiplied by
the value of the Annuity Unit for the preceding
Valuation Period; and
b) The result is adjusted to compensate for the
interest rate assumed in the tables used to
determine the first variable annuity payment.
The dollar value of Annuity Units may increase,
decrease or remain the same from one Valuation
Period to the next.
FIXED ANNUITY PAYMENTS The amount of each fixed annuity payment is
determined by applying the portion of the Contract
Value used to effect a Fixed Annuity measured as
of a date not more than 10 business days prior to
the Maturity Date (minus any applicable premium
taxes) to the appropriate table contained in this
Contract. If the table in use by us on the
Maturity Date is more favorable to you, we will
use that table. In addition, at the time of their
commencement, fixed annuity payments will not be
less than those provided by an amount applied to
purchase a single consideration immediate annuity
to the same class of annuitants at that time. This
amount will be the greater of:
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a) the contract value less applicable withdrawal
charges
b) 95% of the contract value
We guarantee the dollar amount of fixed annuity
payments.
PART 9 TRANSFERS
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TRANSFERS Before the Maturity Date you may transfer amounts
among Investment Accounts of the Contract. There
is no transaction charge for transfers, however,
amounts transferred from a 3-year or 6-year fixed
Investment Account prior to the end of the
guarantee period may be subject to a Market Value
Charge. Amounts will be canceled from the
Investment Accounts from which amounts are
transferred and credited to the Investment Account
to which amounts are transferred. We will effect
such transfers so that the Contract Value on the
date of transfer will not be affected by the
transfer, except for the Market Value Charge, if
applicable.
We reserve the right to limit, upon notice, the
maximum number of transfers you may make per
Contract Year to one per month or six at any time
within a Contract Year.
You must transfer at least $300 or, if less, the
entire amount in the Investment Account each time
you make a transfer. If, after the transfer, the
amount remaining in the Investment Account of the
Contract from which the transfer is made is less
than $100, then we will transfer the entire amount
instead of the requested amount. We reserve the
right to defer the transfer privilege at any time
that we are unable to purchase or redeem shares of
the Trust Portfolios. In addition, in accordance
with applicable law, the Company reserves the
right to modify or terminate the transfer
privilege at any time.
Amounts may not be transferred from a fixed
Investment Account unless those amounts have been
in the fixed Investment Account for at least one
year. Amounts transferred from a 3-year or 6-year
fixed Investment Account may be subject to a
Market Value Charge. The Market Value Charge, if
applicable, will be deducted from the amount
transferred.
Once variable annuity payments have begun, you may
transfer all or part of the investment upon which
your variable annuity payments are based from one
Sub-Account to another. To do this, we will
convert the number of variable Annuity Units you
hold in the Sub-Account from which you are
transferring to a number of variable Annuity Units
of the Sub-Account to which you are transferring
so that the amount of a variable annuity payment,
if it were made at that time, would not be
affected by the transfer. After that, your
variable annuity payments will reflect changes in
the values of your new variable Annuity Units. You
must give us notice at least 30 days before the
due date of the first variable annuity payment to
which the transfer will apply. We reserve the
right to limit, upon notice, the maximum number of
transfers you may make per Contract Year after
variable annuity payments have begun to four.
After the Maturity Date, transfers will not be
allowed from a fixed to a variable Annuity Option,
or from a variable to a fixed Annuity Option.
PART 10 WITHDRAWAL PROVISIONS
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CONTRACT VALUE Your Contract Value is equal to the total of the
Investment Account Values and, if applicable, any
amount in the Loan Account attributable to the
Contract.
PAYMENTS OF WITHDRAWALS You may withdraw part or all of the Contract
Value, less any Debt, at any time before the
earlier of the death of the Annuitant or the
Maturity Date, by sending us a written request. We
will pay all withdrawals within seven days of
receipt at the Annuity Service Office subject to
postponement in certain circumstances, as
specified below.
SUSPENSION OF PAYMENTS We may defer the right of withdrawal, or postpone
the date of payment, from the variable Investment
Accounts for any period when: (1) the New York
Stock Exchange is closed (other than customary
weekend and holiday closings); (2) trading on the
New York Stock Exchange is restricted; (3) an
emergency exists as a result of which disposal of
securities held in the Variable Account is not
reasonably practicable or it is not reasonably
practicable to determine the value of the Variable
Account's net assets; or (4) the Securities and
Exchange Commission, by order, so permits for the
protection of security holders; provided that
applicable rules and regulations of the Securities
and Exchange Commission shall govern as to whether
the conditions described in (2) and (3) exist.
We may defer the right of withdrawal from the
fixed Investment Accounts for not more than six
months from the day we receive written request and
the Contract, if required. If such payments are
deferred 10 days or more, the amount deferred will
earn interest at a rate not less than 4% per year.
TOTAL WITHDRAWAL If you are withdrawing all of the Contract Value,
we will deduct, if applicable, the Debt, the
withdrawal charge, the Market Value Charge and the
administration fee from the amount otherwise
payable.
PARTIAL WITHDRAWAL If you are withdrawing part of the Contract Value,
you should specify the amount that should be
withdrawn from each Investment Option of the
Contract. If there are multiple Investment
Accounts under a fixed Investment Option, the
requested amount from that Investment Option must
be withdrawn from those Investment Accounts on a
first-in-first-out basis. If you do not specify,
the requested amount will be withdrawn in the
following order:
a) from the variable Investment Accounts, on a pro
rata basis,
b) 1-year Investment Accounts,
c) 3-year Investment Accounts, and
d) 6-year Investment Accounts.
We will deduct the withdrawal charge and the
Market Value Charge, if applicable, from the
Contract Value remaining after payment of the
requested amount.
WITHDRAWAL CHARGE If a withdrawal is made from the Contract before
the Maturity Date, a withdrawal charge (contingent
deferred sales charge) may be assessed against
Purchase Payments that have been in your Contract
for less than 6 years. No withdrawal charge will
apply to Purchase Payments being withdrawn that
have been in the Contract for 6 or more years. The
amount of the withdrawal charge and when it is
assessed is discussed below:
1. An amount can be withdrawn without withdrawal
charges. This amount is defined as the
greater of:
a) the excess of the Contract Value on the
date of withdrawal over the unliquidated
Purchase Payments, or
b) after the first Contract Year, 10% of
total Purchase Payments minus 100% of all
prior partial withdrawals, in that contract
year.
The amount withdrawn without withdrawal charges
will be applied to your requested withdrawal in
the following order:
12
<PAGE> 15
a) withdrawals from the variable Investment
Accounts,
b) withdrawals from your 1-year Investment
Accounts,
c) withdrawals from your 3-year Investment
Accounts, and
d) withdrawals from your 6-year Investment
Accounts.
2. Withdrawals in excess of the amount available
without withdrawal charges as defined in (1)
above, may be subject to withdrawal charges.
A withdrawal charge will be assessed against
Purchase Payments liquidated that have been
in the Contract for less than 6 years.
Purchase Payments will be liquidated on a
first-in-first-out basis. We will liquidate
Purchase Payments in the order such Purchase
Payments were made: the oldest unliquidated
Purchase Payment first, the next Purchase
Payment second, etc...until all Purchase
Payments have been liquidated.
3. Any Purchase Payments liquidated are subject
to a withdrawal charge based on the length of
time the Purchase Payment has been in this
Contract. The withdrawal charge is determined
by multiplying the amount of the Purchase
Payment being liquidated by the applicable
withdrawal charge percentage obtained from
the table below.
Number of Complete Years
Purchase Payment has been Withdrawal Charge
in Contract Percentage
------------------------- -----------------
0 6%
1 6
2 5
3 4
4 3
5 2
6+
The total withdrawal charge will be the sum of the
withdrawal charges for the Purchase Payments being
liquidated.
4. The withdrawal charge is deducted from the
Contract Value remaining after you are paid
the amount requested, except in the case of a
complete withdrawal when it is deducted from
the amount otherwise payable. In the case of
a partial withdrawal, the amount requested
from an Investment Account may not exceed the
value of that Investment Account less any
applicable withdrawal charge and/or Market
Value Charge, if applicable.
5. In no event will the aggregate withdrawal
charge be greater than 6% of the total
Purchase Payments made.
FREQUENCY AND AMOUNT OF You may make as many partial withdrawals as you
PARTIAL WITHDRAWALS wish. Any withdrawal from an Investment Account of
the Contract must be at least $300 or the entire
balance of the Investment Account, if less. If
after the withdrawal, the amount remaining in the
Investment Account is less than $100, then we will
consider the withdrawal request to be a request
for withdrawal of the entire amount held in the
Investment Account. If a partial withdrawal would
reduce the Contract Value to less than $300, then
we will treat the partial withdrawal request as a
total withdrawal of the Contract Value.
PART 11 CHARGES AND DEDUCTIONS
- --------------------------------------------------------------------------------
MORTALITY AND EXPENSE Amounts invested in a variable Investment Option
RISK CHARGE are subject to a mortality and expense charge to
compensate us for assuming the mortality and
expense risks. We deduct from each Sub-Account a
charge each Valuation Period at an annual rate of
1.25% (0.8% for mortality risk and 0.45% for
expense risk). There are no mortality and expense
risk charges associated with fixed Investment
Options.
ADMINISTRATION FEES To compensate us for assuming certain
administrative expenses we charge administration
fees equal to $30 per year plus we deduct from
each Sub-Account a charge each Valuation Period at
an annual rate of 0.15%. The 0.15% administration
fee does not apply to the fixed Investment Option.
Prior to the Maturity Date, the $30 administrative
fee is deducted on each
13
<PAGE> 16
Contract Anniversary. It is withdrawn from each
Investment Option in the same proportion that the
value of the Investment Accounts of each
Investment Option bears to the Contract Value. If
the Contract Value is totally withdrawn on any
date other than the Contract Anniversary, we will
deduct the total amount of the $30 administration
fee from the amount paid.
During the annuity period, the $30 administration
fee is deducted on a pro rata basis from each
annuity payment.
The 0.15% administration fee is added to the
mortality and expense risk charge of 1.25% and is
reflected in the net investment factor used to
determine the value of Accumulation Units and
Annuity Units for the variable portion of the
Contract.
TAXES We reserve the right to charge certain taxes
against your Purchase Payments, Contract Value, or
annuity payments, as appropriate. Such taxes may
include any premium taxes or other taxes levied by
any government entity which we, in our sole
discretion, determine have resulted from the
establishment or maintenance of the Variable
Account, or from the receipt by us of Purchase
Payments, or from the issuance of this Contract,
or from the commencement or continuance of annuity
payments under this Contract.
PART 12 PAYMENT OF CONTRACT BENEFITS
- --------------------------------------------------------------------------------
GENERAL Benefits payable under this Contract may be
applied in accordance with one or more of the
Annuity Options described below.
ALTERNATE ANNUITY OPTIONS Instead of settlement in accordance with the
Annuity Options described below, you may choose an
alternate form of settlement acceptable to us.
DESCRIPTION OF ANNUITY Option 1: Life Annuity
OPTIONS (a) Life Non-Refund. We will make payments during
the lifetime of the Annuitant. No payments
are due after the death of the Annuitant.
(b) Life 10-Year Certain. We will make payments
for 10 years and after that during the
lifetime of the Annuitant. No payments are
due after the death of the Annuitant or, if
later, the end of the 10-year period certain.
Option 2: Joint and Survivor Life Annuity
(a) Joint and Survivor Non-Refund. We will make
payments during the joint lifetime of the
Annuitant and Co-Annuitant. Payments will
then continue during the remaining lifetime
of the survivor. No payments are due after
the death of the last survivor of the
Annuitant and Co-Annuitant.
(b) Joint and Survivor with 10-Year Certain. We
will make payments for 10 years and after
that during the joint lifetime of the
Annuitant and Co-Annuitant. Payments will
then continue during the remaining lifetime
of the survivor. No payments are due after
the death of the survivor of the Annuitant
and Co-Annuitant or, if later, the end of the
10-year period certain.
ANNUITY PAYMENT RATES The annuity payment rates on the attached tables
show, that for each $1,000 applied, the dollar
amount of both (a) the first monthly variable
annuity payment based on the assumed interest rate
of 4% and (b) the monthly fixed annuity payment,
when this payment is based on the minimum
guaranteed interest rate of 4% per year. The
annuity payment rates for payments made on a less
frequent basis (quarterly, semiannual or annual)
will be quoted by us upon request.
The annuity payment rates are based on the 1983
Table A projected at Scale G with interest at the
rate of 4% per annum and assume births in year
1942. The amount of each annuity payment will
depend upon the sex and adjusted age of the
Annuitant, the Co-Annuitant, if any, or other
payee. The adjusted age is determined from the
actual age nearest birthday at the time
14
<PAGE> 17
the first monthly annuity payment is due, as
follows:
<TABLE>
<CAPTION>
Calendar Year of Birth and Adjustment to Actual Age
-------------------------- ------------------------
<S> <C> <C>
1899 - 1905 +6
1906 - 1911 +5
1912 - 1918 +4
1919 - 1925 +3
1926 - 1932 +2
1933 - 1938 +1
1939 - 1945 0
1946 - 1951 -1
1952 - 1958 -2
1959 - 1965 -3
1966 - 1972 -4
1973 - 1979 -5
1980 + -6
</TABLE>
The dollar amount of annuity payment for any age
or combination of ages not shown following or for
any other form of Annuity Option agreed to by us
will be quoted on request.
15
<PAGE> 18
AMOUNT OF FIRST MONTHLY ANNUITY PAYMENT
PER $1000 OF CONTRACT VALUE
OPTION 1: LIFE ANNUITY
<TABLE>
<CAPTION>
Option 1(A): Non-Refund Option 1(B): 10-Year Certain
- --------------------------------------------------------------------------------
Adjusted Adjusted
Age of Age of
Annuitant Male Female Annuitant Male Female
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
55 4.83 4.44 55 4.78 4.41
60 5.24 4.74 60 5.15 4.70
65 5.79 5.15 65 5.62 5.08
70 6.35 5.70 70 6.21 5.58
75 7.51 6.49 75 6.89 6.21
80 8.81 7.56 80 7.65 6.98
85 10.57 9.06 85 8.40 7.80
- --------------------------------------------------------------------------------
</TABLE>
OPTION 2: JOINT AND SURVIVOR LIFE ANNUITY
<TABLE>
Option 2(A): Non-Refund
- --------------------------------------------------------------------------------
<CAPTION>
AGE OF CO-ANNUITANT
Adjusted
Age of 10 Years 5 Years Same 5 Years 10 Years
Annuitant Younger Younger Age Older Older
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
55 3.87 3.99 4.13 4.27 4.41
60 4.02 4.18 4.36 4.55 4.73
65 4.21 4.43 4.67 4.92 5.16
70 4.47 4.76 5.08 5.43 5.75
75 4.80 5.20 5.65 6.11 6.54
80 5.26 5.80 6.41 7.04 7.60
85 5.89 6.63 7.47 8.29 8.97
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
Option 2(B): 10-Year Certain
- --------------------------------------------------------------------------------
<CAPTION>
AGE OF CO-ANNUITANT
Adjusted
Age of 10 Years 5 Years Same 5 Years 10 Years
Annuitant Younger Younger Age Older Older
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
55 3.87 3.99 4.13 4.27 4.41
60 4.02 4.18 4.36 4.55 4.73
65 4.21 4.43 4.66 4.91 5.15
70 4.46 4.75 5.07 5.40 5.70
75 4.80 5.18 5.61 6.03 6.39
80 5.24 5.75 6.30 6.81 7.20
85 5.82 6.47 7.13 7.68 8.06
- --------------------------------------------------------------------------------
</TABLE>
Monthly installments for ages not shown will be furnished on request.
16
<PAGE> 19
- --------------------------------------------------------------------------------
THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NEW YORK
- --------------------------------------------------------------------------------
<PAGE> 20
Manulife Financial and the block design are registered service marks of The
Manufacturers Life Insurance Company and are used by it and its subsidiaries.
<PAGE> 1
<TABLE>
<S> <C> <C> <C>
====================================================================================================================================
Flexible Payment Deferred Combination Fixed and Variable Annuity Application. Payment (or original of exchange/transfer request)
must accompany Application. Please make check payable to The Manufacturers Life Insurance Company of New York (the "Company") and
address to: International Corporate Center at Rye, 555 Theodore Fremd Avenue, Suite C-209, Rye, New York 10580.
====================================================================================================================================
1. OWNERS (Applicants) CO-OWNER (OPTIONAL)
Name* Name*
- ---------------------------------------------------------------- ----------------------------------------------------------------
First Middle Last First Middle Last
Address _____ _____ _____
- ---------------------------------------------------------------- Sex [ ] M [ ] F Date of Birth | | | |
Street |_____|_____|_____|
Month Day Year
- ---------------------------------------------------------------- __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __
City State Zip | | | | | | | | | | | | | | | | | | | |
_____ _____ _____ |__|__|__|__|__|__|__|__|__| or |__|__|__|__|__|__|__|__|__|
Sex [ ] M [ ] F Date of Birth | | | | Social Security Number Tax ID Number
|_____|_____|_____|
Month Day Year ===============================================================
Daytime Phone Number: ( ) _____________________________ SUCCESSOR OWNER* (Optional)
__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __
| | | | | | | | | | | | | | | | | | | | Name*
|__|__|__|__|__|__|__|__|__| or |__|__|__|__|__|__|__|__|__| ----------------------------------------------------------------
Social Security Number Tax ID Number First Middle Last
_____ _____ _____
Client Brokerage Acct. # (If applicable):__________________ Sex [ ] M [ ] F Date of Birth | | | |
|_____|_____|_____|
- ---------------------------------------------------------------- Month Day Year
ANNUITANTS (If different from Owner) __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __
| | | | | | | | | | | | | | | | | | | |
Name* |__|__|__|__|__|__|__|__|__| or |__|__|__|__|__|__|__|__|__|
- ---------------------------------------------------------------- Social Security Number Tax ID Number
First Middle Last
Address
- ---------------------------------------------------------------- ----------------------------------------------------------------
Street 2. INVESTMENT ALLOCATION
----------------------------------------------------------------
- ----------------------------------------------------------------
City State Zip Allocate payment with application of $____________ as indicated
_____ _____ _____ below. (must total 100%):
Sex [ ] M [ ] F Date of Birth | | | |
|_____|_____|_____| ____ % Manufacturers Adviser Pac Rim Emerging Mkts (008)
Month Day Year
__ __ __ __ __ __ __ __ __ ____ % T. Rowe Price Science & Technology (016)
| | | | | | | | | |
|__|__|__|__|__|__|__|__|__| ____ % Founders Int'l Small Cap (006)
Social Security Number
____ % Warburg Pincus Emerging Growth (020)
- ----------------------------------------------------------------
CO-ANNUITANT (OPTIONAL) ____ % Pilgrim Baxter Growth (022)
Name* ____ % Fred Alger Small/Mid Cap (011)
- ----------------------------------------------------------------
First Middle Last ____ % Rowe Price-Fleming Int'l Stock (024)
_____ _____ _____
Sex [ ] M [ ] F Date of Birth | | | | ____ % Founders Worldwide Growth (026)
|_____|_____|_____|
Month Day Year ____ % Morgan Stanley Global Equity (009)
__ __ __ __ __ __ __ __ __
| | | | | | | | | | ____ % Rosenberg Small Company Value (119)
|__|__|__|__|__|__|__|__|__|
Social Security Number ____ % Fidelity Equity (001)
- ---------------------------------------------------------------- ____ % Founders Growth (005)
BENEFICIARIES
(Enclose signed letter if more information is required.) ____ % Manufacturers Adviser Quant Equity (065)
Name* ____ % T. Rowe Price Blue Chip Growth (012)
- ---------------------------------------------------------------
First Middle Last Relationship ____ % Manufacturers Adviser Real Estate Securities (068)
_____ _____ _____ __ __ __ __ __ __ __ __ __
Date of Birth | | | | | | | | | | | | | | ____ % Miller Anderson Value (066)
|_____|_____|_____| |__|__|__|__|__|__|__|__|__|
Month Day Year Social Security Number ____ % J.P. Morgan Int'l Growth & Income (013)
Name* ____ % Wellington Management Growth & Income (017)
- ---------------------------------------------------------------
First Middle Last Relationship ____ % T. Rowe Price Equity-Income (007)
_____ _____ _____ __ __ __ __ __ __ __ __ __
Date of Birth | | | | | | | | | | | | | | ____ % Founders Balanced (071)
|_____|_____|_____| |__|__|__|__|__|__|__|__|__|
Month Day Year Social Security Number ____ % Fidelity Aggr Asset Alloc (004)
CONTINGENT BENEFICIARY ____ % Miller Anderson High Yield (076)
Name* ____ % Fidelity Mod Asset Alloc (003)
- ---------------------------------------------------------------
First Middle Last Relationship ____ % Fidelity Cons Asset Alloc (002)
_____ _____ _____ __ __ __ __ __ __ __ __ __
Date of Birth | | | | | | | | | | | | | | ____ % Salomon Brothers Strategic Bond (015)
|_____|_____|_____| |__|__|__|__|__|__|__|__|__|
Month Day Year Social Security Number ____ % Oechsle Global Gov't Bond (010)
- ---------------------------------------------------------------- ____ % Manufacturers Adviser Capital Growth Bond (080)
REMARKS
____ % Wellington Management Inv Quality Bond (018)
____ % Salomon Brothers U.S. Gov't Securities (014)
____ % Manufacturers Adviser Money Market (019)
FIXED ACCOUNTS
____ % 1 Yr (028)** ____ % 3 Yr (029) ____ % 6 Yr (030)
LIFESTYLE PORTFOLIOS
____ % Cons 280 (179) ____ % Mod 460 (180)
____ % Bal 640 (181) ____ % Growth 820 (182)
____ % Aggr 1000 (183)
- ------------------------------------------------------------------------------------------------------------------------------------
APP-VEN-NY-9 *Unless subsequently changed in accordance with terms of Contract issued. 9/97
</TABLE>
<PAGE> 2
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
3. PLAN SPECIFICS
- ------------------------------------------------------------------------------------------------------------------------------------
TYPE OF PLAN (Must be completed)
[ ] Non-Qualified or [ ] IRA Rollover [ ] IRA Transfer [ ] IRA Tax Year____________
[ ] Profit Sharing [ ] 401(k) [ ] SEP IRA Tax Year_________
[ ] Money Purchase [ ] Keogh (HR-10) [ ] 403(b) Check if ERISA [ ]
[ ] Defined Benefit [ ] Other Qualified _________
- ------------------------------------------------------------------------------------------------------------------------------------
Will the purchase of this Annuity replace or change any other insurance or annuity? [ ] No [ ] Yes
(If "Yes," state company and contract number in Remarks, and attach replacement forms.)
If 1035 exchange, or any other transfer of assets, attach original of exchange form or letter.
- ------------------------------------------------------------------------------------------------------------------------------------
Has Annuitant or applicant(s) any other annuities or insurance with the Company? [ ] No [ ] Yes
(If "Yes," list contract number in Remarks.)
- ------------------------------------------------------------------------------------------------------------------------------------
Maturity Date _______________ (mm/yy). Default is the Annuitant's 90th birthday.
- ------------------------------------------------------------------------------------------------------------------------------------
4. SIGNATURES (Irrevocable Beneficiary, if designated, must also sign application.)
- ------------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF APPLICANT: It is hereby agreed that the Contract applied for shall not take effect until the later of: (1) the issuance
of the Contract, or (2) receipt by the Company at its Annuity Service Office of the first payment required under the Contract. The
foregoing information is true and complete to the best of the Applicant's knowledge and belief and is correctly recorded. The
Proposed Owner agrees to be bound by the representations herein and acknowledges the receipt of an effective Prospectus describing
the Contract applied for. The Contract applied for is suitable for my/our insurance investment objectives, financial situation and
needs. When utilizing Check Plus or the Systematic Withdrawal Program, I/we agree to hold the Company harmless if any debit/transfer
is erroneously received by the bank indicated on my voided check, or is not honored upon presentation, and any accumulation units
may be canceled, due to such electronic debits/transfers. Irrevocable Beneficiary must authorize participation by signing below.
I UNDERSTAND THAT ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THE CONTRACT APPLIED FOR, WHEN BASED ON THE INVESTMENT EXPERIENCE OF
A SEPARATE ACCOUNT, ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
- ------------------------------------------------------------------------------------------------------------------------------------
Signed in (State) Date Signed Signature of Owner/Applicant Signature of Co-Owner
- ------------------------------------------------------------------------------------------------------------------------------------
Signature of Annuitant Signature of Co-Annuitant Signature of Irrevocable Beneficiary
(if different from Owner) (if different from Owner) (if designated)
STATEMENT OF AGENT: Will this contract replace or change any existing life insurance or annuity in this or any other company?
[ ] Yes [ ] No If yes, please explain under Remarks. I certify (1) the Applicant signed this Application in my presence; and (2) I
am authorized and qualified to discuss the Contract herein applied for.
- ------------------------------------------------------------------------------------------------------------------------------------
Signature of Agent Print Full Name Name of Firm
- ------------------------------------------------------------------------------------------------------------------------------------
Agent Number Agent Phone Number State License ID Number
====================================================================================================================================
Broker/Dealer Use Only (Optional)
Plan T [ ] Plan NT [ ] (If left blank, Plan NT will be selected.)
- ------------------------------------------------------------------------------------------------------------------------------------
5. OTHER
- ------------------------------------------------------------------------------------------------------------------------------------
APP-VEN-NY-9 2 9/97
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
====================================================================================================================================
SERVICE OPTIONS [X] Indicate each option you wish to elect.
====================================================================================================================================
[ ] GUARANTEE PLUS PROGRAM (Minimum Payment $5,000)
The Company will allocate a portion of the payment with this application to the 6-year Fixed Account, such that, at the end of the
6-year period, the account will have grown to an amount at least equal to the total payment. The remaining balance will be allocated
proportionately according to the investment selections on the application, which should total 100% excluding the amount allocated to
the 6-year Fixed Account.
====================================================================================================================================
[ ] CHECK PLUS - AUTOMATIC PURCHASE*
I authorize the Company to collect $________ (minimum $30) starting the month of _____________ by initiating electronic debit
entries to my bank account with the following frequency: [ ] Monthly: [ ] 5th or [ ] 20th [ ] Quarterly (20th of January, April,
July and October). When utilizing Check Plus, I agree that if any debit/transfer is erroneously received by the bank indicated on
the enclosed check, or is not honored upon presentation, any accumulation units may be canceled, and I agree to hold the Company
harmless from any loss due to such electronic debits/transfers. (PLEASE ATTACH A VOIDED CHECK/WITHDRAWAL SLIP.)
====================================================================================================================================
[ ] DOLLAR COST AVERAGING* (Minimum Payment $6,000)
I authorize the Company to transfer an amount (minimum $100) each month as indicated below. Transfers are available from all
variable and the one-year fixed investment options. A maximum of 10% from the one-year fixed investment option may be transferred
monthly. Please make first transfer on _____/_____/_____ (mm/dd/yy).
Source Fund Destination Fund Amount
_______________________________ _______________________________ $____________________________
_______________________________ _______________________________ $____________________________
_______________________________ _______________________________ $____________________________
_______________________________ _______________________________ $____________________________
_______________________________ _______________________________ $____________________________
====================================================================================================================================
[ ] SYSTEMATIC WITHDRAWAL PLAN* (Minimum Payment $12,000)
I authorize withdrawals (minimum $100) from my Contract Value to commence as indicated below. A maximum of 10% of payments may be
withdrawn annually. When utilizing the Systematic Withdrawal Plan, I agree that if any debit/transfer is erroneously received by
the bank indicated on the enclosed voided check, or is not honored upon presentation, any accumulation units may be canceled, and I
agree to hold the Company harmless from any loss due to such electronic debits/transfers.
From: ___________________________________________ $__________________________
From: ___________________________________________ $__________________________
From: ___________________________________________ $__________________________
From: ___________________________________________ $__________________________
From: ___________________________________________ $__________________________
Please indicate frequency: [ ] Monthly or [ ] Quarterly (January, April, July and October)
Day of Withdrawal [ ] 7th [ ] 16th or [ ] 26th
Please [ ] Withhold [ ] Do not withhold Federal Income Taxes
[ ] I wish to utilize Electronic Funds Transfer in the processing of my Systematic Withdrawal Plan.
PLEASE ATTACH A VOIDED CHECK
Or, if different from owner, make check payable to:
- ------------------------------------------------------------------------------------------------------------------------------------
First Middle Last
- ------------------------------------------------------------------------------------------------------------------------------------
Street City State Zip
(Please allow 7 business days for receipt of check.)
- ------------------------------------------------------------------------------------------------------------------------------------
APP-VEN-NY-9 *Unless subsequently changed in accordance with terms of Contract issued. 9/97
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
====================================================================================================================================
SERVICE OPTIONS [X] Indicate each option you wish to elect.
====================================================================================================================================
[ ] AUTOMATIC REBALANCING
If marked, the policyholder's contract value, excluding amounts in the fixed account investment options, will be automatically
rebalanced to maintain the rebalancing percentage levels in the variable portfolios as selected below, based on the current total
value of the eligible portfolios on the day of rebalancing.
You may change the rebalancing percentages or terminate your participation in the program by providing the Manufacturers Life
Insurance Company of New York with a completed Automatic Rebalancing Authorization form.
If a policyholder elects to participate in Automatic Rebalancing, the total value of the variable portfolios must be included in the
program. Therefore, subsequent payments received and applied to portfolios in percentages different from the current rebalancing
allocation will be rebalanced at the next date of rebalancing unless the subsequent payments are allocated to the fixed account
investment options.
Rebalancing will occur on the 25th of the month (or next business day), please indicate frequency:
[ ] Quarterly [ ] Semi-Annually (June & December) [ ] Annually (December)
ASSET ALLOCATIONS (must total 100%):
____ % Manufacturers Adviser Pac Rim Emerging Mkts (008) ____ % Wellington Management Growth & Income (017)
____ % T. Rowe Price Science & Technology (016) ____ % T. Rowe Price Equity-Income (007)
____ % Founders Int'l Small Cap (006) ____ % Founders Balanced (071)
____ % Warburg Pincus Emerging Growth (020) ____ % Fidelity Aggr Asset Alloc (004)
____ % Pilgrim Baxter Growth (022) ____ % Miller Anderson High Yield (076)
____ % Fred Alger Small/Mid Cap (011) ____ % Fidelity Mod Asset Alloc (003)
____ % Rowe Price-Fleming Int'l Stock (024) ____ % Fidelity Cons Asset Alloc (002)
____ % Founders Worldwide Growth (026) ____ % Salomon Brothers Strategic Bond (015)
____ % Morgan Stanley Global Equity (009) ____ % Oechsle Global Gov't Bond (010)
____ % Rosenberg Small Company Value (119) ____ % Manufacturers Adviser Capital Growth Bond (080)
____ % Fidelity Equity (001) ____ % Wellington Management Inv Quality Bond (018)
____ % Founders Growth (005) ____ % Salomon Brothers U.S. Gov't Securities (014)
____ % Manufacturers Adviser Quant Equity (065) ____ % Manufacturers Adviser Money Market (019)
____ % T. Rowe Price Blue Chip Growth (012) LIFESTYLE PORTFOLIOS
____ % Manufacturers Adviser Real Estate Securities (068) ____ % Cons 280 (179) ____ % Mod 460 (180)
____ % Miller Anderson Value (066) ____ % Bal 640 (181) ____ % Growth 820 (182)
____ % J.P. Morgan Int'l Growth & Income (013) ____ % Aggr 1000 (183)
====================================================================================================================================
AUTHORIZATION
====================================================================================================================================
Owner
- ------------------------------------------------------------------------------------------------------------------------------------
Please Print First Name Middle Last
Owner Signature Date
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
APP-VEN-NY-9 *Unless subsequently changed in accordance with terms of Contract issued. 9/97
</TABLE>
<PAGE> 1
DECLARATION OF INTENTION
AND
CHARTER OF
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
We, the undersigned, all being natural persons of the age of eighteen
years or over, and at least a majority of us being citizens and residents of the
United States, and at least three of us being residents of the State of New
York, do hereby declare our intention to form a stock life insurance corporation
for the purpose of doing the kinds of insurance business authorized by
Paragraphs 1, 2 and 3 of Subsection (a) of Section 1113 of the Insurance Law of
the State of New York, and for that purpose do adopt the following charter:
<PAGE> 2
CHARTER
OF
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
FIRST: The name of the corporation shall be First North
American Life Assurance Company (hereinafter referred to as the "Corporation").
SECOND: The principal office of the Corporation shall be located
in the County of Westchester, State of New York.
THIRD: The kinds of insurance to be transacted by the
Corporation shall be those defined in Paragraphs 1, 2 and 3 of Subsection (a) of
Section 1113 of the Insurance Law of the State of New York as follows:
(1) "Life insurance," means every insurance upon the
lives of human beings and every insurance appertaining thereto,
including the granting of endowment benefits, additional
benefits in the event of death by accident, additional benefits
to safeguard the contract from lapse, or provide a special
surrender value, upon total and permanent disability of the
insured, and optional modes of settlement of proceeds. Amounts
paid the insurer for life insurance and proceeds applied under
optional modes of settlement or under dividend options may be
allocated by the insurer to one or more separate accounts
pursuant to section four thousand two hundred forty of this
chapter.
(2) "Annuities," means all agreements to make
periodical payments for a period certain or where the making or
continuance of all or of some of a series of such payments, or
the amount of any such payment, depends upon the continuance of
human life, except payments made under the authority of
paragraph on hereof. Amounts paid the
-2-
<PAGE> 3
insurer to provide annuities and proceeds applied under
optional modes of settlement or under dividend options may be
allocated by the insurer to one or more separate accounts
pursuant to section four thousand two hundred forty of this
chapter.
(3) "Accident and health insurance," means (I)
insurance against death or personal injury by accident or by
any specified kind or kinds of accident and insurance against
sickness, ailment or bodily injury, including insurance
providing disability benefits pursuant to article nine of the
workers' compensation law, except as specified in item (ii)
hereof; and (ii) non-cancelable disability insurance, meaning
insurance against disability resulting from sickness, ailment
or bodily injury (but excluding insurance solely against
accidental injury) under any contract which does not give the
insurer the option to cancel or otherwise terminate the
contract at or after one year from its effective date or
renewal date.
and such other kind or kinds of insurance or other business or businesses as a
stock life insurance company now is or hereafter may be permitted to transact
under the Insurance Law of the State of New York.
FOURTH: The manner in which the corporate powers of the
Corporation shall be exercised are through a Board of Directors and through such
committees, officers and agents as the Board of Directors shall empower.
FIFTH: The Board of Directors of the Corporation shall consist
of the number of directors as may from time to time be determined in accordance
with the By-Laws of the Corporation, but shall not be less than thirteen nor
more than eighteen in number. However, the initial number of directors shall be
thirteen. In
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<PAGE> 4
the event the number of directors duly elected and serving shall be less than
thirteen, the Corporation shall not for that reason be dissolved, but the
vacancy or vacancies shall be filled as provided in paragraph Sixth.
SIXTH: (a) The directors of the Corporation shall be elected at
each annual meeting of shareholders which shall be held on the second Friday in
March of each year, commencing in the year 1991, by the majority vote of those
present and voting, a quorum being present. At each annual meeting of
shareholders, each shareholder of record on the books of the Corporation on the
date of record fixed by the Board of Directors in accordance with the By-Laws of
the Corporation shall be entitled to one vote, in person or by proxy, for each
share of stock so registered in his name. The holders of a majority of the
shares of stock entitled to vote at such meeting shall constitute a quorum at
such meeting. Each director so elected shall hold office until the next annual
meeting of shareholders and until a successor is duly elected and qualified. If
any vacancy shall occur in the Board of Directors by reason of death,
resignation, removal or otherwise, the remaining member of the Board of
Directors at a meeting called for that purpose on such notice as may be provided
for in the By-Laws of the Corporation, or at any regular meeting thereof, may
elect a director so elected shall hold office until the next annual meeting of
shareholders and until a successor is duly elected and qualified.
-4-
<PAGE> 5
(b) The officers of the Corporation shall be President, a
Secretary and a Treasurer, and shall be appointed or elected by the Board of
Directors, in addition to such other officers as may be appointed or elected by
the Board of Directors in accordance with the By-Laws of the Corporation, as
soon as practicable after the annual election of directors. Each officer so
elected shall hold office until a successor is duly appointed or elected and
qualified. If any vacancy shall occur in any office or the Corporation by reason
of death, resignation, removal or otherwise, the Board of Directors at a meeting
called for that purpose on such notice as may be provided for in the By-Laws of
the Corporation, or at any regular meeting thereof, may appoint or elect an
officer or officers to fill the vacancy or vacancies, and each officer so
appointed or elected shall hold office for the term for which he has been
appointed or elected and until a successor is duly appointed or elected and has
qualified.
(C) Each director shall be at least eighteen years of age,
and at all times a majority of the directors shall be citizens and residents of
the United States, and not less than three of the directors shall be residents
of the State of New York. A director shall not be required to hold any shares of
stock of the Corporation.
SEVENTH: The names and post office residence addresses of the
directors who shall serve until the first annual meeting of the shareholders of
the Corporation are:
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<PAGE> 6
Name Address
---- -------
William Joseph Atherton 8 Hastings Lane
Medford, Massachusetts
Bruce Avedon 6601 Hitching Post Lane
Cincinnati, Ohio
Kenneth Henry Conrad 40 Pond Circle
Jamaica Plain, Massachusetts
John David DesPrez 23 Bristol Road
Wellesley, Massachusetts
Ruth Ann Fleming 145 Western Drive
Short Hills, New Jersey
Robert C. Jones Angel Hill Road
Chatham, New York
Richard Charles Hirtle 156 Pleasant Street
Whitman, Massachusetts
Peter Seaton Hutchison 63 Rumsey Road
Toronto, Ontario
Canada
Brian Leslie Moore 28 Heathview Avenue
Willowdale, Ontario
Canada
Robert C. Perez 50 West 70th Street
New York, New York
James K. Robinson 7 Summit Drive
Rochester, New York
John Gysbertus Vrysen 19 Sweetland Farm Road
Norfolk, Massachusetts
Howell Douglas Wood 218 Sleepy Hollow Road
New Canaan, Connecticut
EIGHTH: The duration of the corporate existence of the
Corporation shall be perpetual.
NINTH: The amount of the capital of the Corporation shall be
two million dollars ($2,000,000), and shall consist of
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<PAGE> 7
two million (2,000,000) shares of capital stock having a par value of one dollar
($1.00) per share.
TENTH: No director of the Corporation shall be personally
liable to the Corporation or any of its shareholders for damages for any breach
of duty as a director; provided, however, that the foregoing provision shall not
eliminate or limit (i) the liability of a director if a judgment or other final
adjudication adverse to such director establishes that his or her such acts or
omissions were acts or omissions (a) which he or she knew or reasonably should
have known violated the New York Insurance Law or (b) which violated a specific
standard of care imposed on directors directly, and not by reference, by a
provision of the New York Insurance Law (or any regulations promulgated
thereunder) or (c) which constituted a knowing violation of any other law, or
establishes that the director personally gained in fact a financial profit or
other advantage to which the director for any act or omission prior to the
adoption of this Article by the shareholders of the Corporation. Any repeal or
modification of this Article by the shareholders of the Corporation shall be
prospective only, and shall not adversely affect any limitation on the personal
liability of a director of the Corporation existing at the time of such repeal
or modification.
-7-
<PAGE> 8
IN WITNESS WHEREOF, the undersigned have hereunto subscribed
their names as of this 30th day of January, 1992.
/s/ Richard C. Hirtle
------------------------------------
Richard C. Hirtle
/s/ Kenneth H. Conrad
------------------------------------
Kenneth H. Conrad
/s/ John G. Vrysen
------------------------------------
John G. Vrysen
/s/ William J. Atherton
------------------------------------
William J. Atherton
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<PAGE> 9
STATE OF MASSACHUSETTS )
: SS.:
COUNTY OF SUFFOLK )
On this 30th day of January , 1992, before me personally came
RICHARD HIRTLE to me personally known and known to me to be one of the persons
who executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Valerie Lapaglia
------------------------------------
Notary Public
STATE OF MASSACHUSETTS )
: SS.:
COUNTY OF SUFFOLK )
On this 30th day of January , 1992, before me personally came
KENNETH CONRAD to me personally known and known to me to be one of the persons
who executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Valerie Lapaglia
------------------------------------
Notary Public
-9-
<PAGE> 10
STATE OF MASSACHUSETTS )
: SS.:
COUNTY OF SUFFOLK )
On this 30th day of January , 1992, before me personally came
JOHN G. VRYSEN to me personally known and known to me to be one of the persons
who executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Valerie Lapaglia
------------------------------------
Notary Public
STATE OF MASSACHUSETTS )
: SS.:
COUNTY OF SUFFOLK )
On this 30th day of January , 1992, before me personally came
WILLIAM ATHERTON to me personally known and known to me to be one of the persons
who executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Valerie Lapaglia
------------------------------------
Notary Public
-10-
<PAGE> 11
IN WITNESS WHEREOF, the undersigned have hereunto subscribed
their names as of this 30th day of January, 1992.
------------------------------------
/s/ Carlos B. Barbosa
------------------------------------
Carlos B. Barbosa
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<PAGE> 12
PROVINCE OF ONTARIO )
: SS.:
CITY OF NORTH YORK )
On this 28th day of January , 1992, before me personally came
CARLOS BARBOSA to me personally known and known to me to be one of the persons
who executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/
------------------------------------
Notary Public
STATE OF ____________ )
: SS.:
COUNTY OF____________ )
On this ____ day of ___________, 19 __ , before me personally
came _______________to me personally known and known to me to be one of the
persons who executed the foregoing instrument, and he duly acknowledged to me
that he executed the same.
------------------------------------
Notary Public
-12-
<PAGE> 13
IN WITNESS WHEREOF, the undersigned have hereunto subscribed
their names as of this 27th day of January, 1992.
/s/ Lynn Silberman
------------------------------------
Lynn Silberman
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<PAGE> 14
STATE OF NEW YORK )
: SS.:
COUNTY OF RICHMOND )
On this 27th day of January , 1992, before me personally came
LYNN SILBERMAN to me personally known and known to me to be one of the persons
who executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Kathy Slaven
------------------------------------
Notary Public
STATE OF ____________)
: SS.:
COUNTY OF ___________)
On this ____ day of ______________, 19__, before me personally
came ______________ to me personally known and known to me to be one of the
persons who executed the foregoing instrument, and he duly acknowledged to me
that he executed the same.
------------------------------------
Notary Public
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<PAGE> 15
IN WITNESS WHEREOF, the undersigned have hereunto subscribed
their names as of this 30th day of January, 1992.
/s/ Ruth Ann Fleming
------------------------------------
Ruth Ann Fleming
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<PAGE> 16
STATE OF MASSACHUSETTS )
: SS.:
COUNTY OF SUFFOLK )
On this 30th day of January , 1992, before me personally came
RUTH ANN FLEMING to me personally known and known to me to be one of the persons
who executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Valerie Lapaglia
------------------------------------
Notary Public
STATE OF ________________)
: SS.:
COUNTY OF _______________)
On this _____ day of ___________, 19 __, before me personally
came ________________________ to me personally known and known to me to be one
of the persons who executed the foregoing instrument, and he duly acknowledged
to me that he executed the same.
------------------------------------
Notary Public
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<PAGE> 17
IN WITNESS WHEREOF, the undersigned have hereunto subscribed
their names as of this 30th day of January, 1992.
/s/ Brian L. Moore
------------------------------------
Brian L. Moore
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<PAGE> 18
CITY OF NORTH YORK )
: SS.:
PROVINCE OF ONTARIO )
On this 30th day of January , 1992, before me personally came
BRIAN L. MOORE to me personally known and known to me to be one of the persons
who executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/
------------------------------------
Notary Public
STATE OF ________________)
: SS.:
COUNTY OF _______________)
On this _____ day of ___________, 19 __, before me personally
came ________________________ to me personally known and known to me to be one
of the persons who executed the foregoing instrument, and he duly acknowledged
to me that he executed the same.
------------------------------------
Notary Public
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<PAGE> 19
IN WITNESS WHEREOF, the undersigned have hereunto subscribed
their names as of this 30th day of January, 1992.
/s/ Donald D. Gabay
------------------------------------
Donald D. Gabay
/s/ Stewart H. Walker
------------------------------------
Stewart H. Walker
/s/ David M. Kaston
------------------------------------
David M. Kaston
/s/ Charles S. Berlin
------------------------------------
Charles S. Berlin
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<PAGE> 20
STATE OF NEW YORK )
: SS.:
COUNTY OF NEW YORK )
On this 30th day of January , 1992, before me personally came
DONALD D. GABAY to me personally known and known to me to be one of the persons
who executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Deborah T. Cassarino
------------------------------------
Notary Public
STATE OF NEW YORK )
: SS.:
COUNTY OF NEW YORK )
On this 30th day of January , 1992, before me personally came
STEWART H. WALKER to me personally known and known to me to be one of the
persons who executed the foregoing instrument, and he duly acknowledged to me
that he executed the same.
/s/ Deborah T. Cassarino
------------------------------------
Notary Public
-20-
<PAGE> 21
STATE OF NEW YORK )
: SS.:
COUNTY OF NEW YORK )
On this 30th day of January , 1992, before me personally came
DAVID KASTON to me personally known and known to me to be one of the persons who
executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Deborah T. Cassarino
------------------------------------
Notary Public
STATE OF NEW YORK )
: SS.:
COUNTY OF NEW YORK )
On this 30th day of January , 1992, before me personally came
CHARLES S. BERLIN to me personally known and known to me to be one of the
persons who executed the foregoing instrument, and he duly acknowledged to me
that he executed the same.
/s/ Deborah T. Cassarino
------------------------------------
Notary Public
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<PAGE> 22
STATE OF NEW YORK )
: SS.:
COUNTY OF NASSAU )
On this 24th day of January , 1992, before me personally came
ILANA HANAU to me personally known and known to me to be one of the persons who
executed the foregoing instrument, and he duly acknowledged to me that he
executed the same.
/s/ Merril C. Schapiro
------------------------------------
Notary Public
STATE OF ________________)
: SS.:
COUNTY OF _______________)
On this _____ day of ___________, 19 __, before me personally
came ________________________ to me personally known and known to me to be one
of the persons who executed the foregoing instrument, and he duly acknowledged
to me that he executed the same.
------------------------------------
Notary Public
-22-
<PAGE> 1
NORTH AMERICAN SECURITY LIFE INSURANCE COMPANY
SECRETARY' S CERTIFICATE
I, John D. DesPrez Ill, Secretary of North American Security Life Insurance
Company (the "Company") do hereby certify that the following is a true and
correct copy of resolutions passed by the Board of Directors of the Company on
the 4th day of March 1992, and that the said resolutions are in full force and
effect on the date hereof:
Pursuant to the authority of Section 141(f) of the General Corporation Law
of the State of Delaware, the undersigned, being all of the directors of the
Corporation, do take and adopt the following action by their written consent:
WHEREAS, North American Security Life Insurance Company (the "Company")
desires to establish a subsidiary to be known as First North American
Life Assurance Company; it is
RESOLVED, that the Company be and it is hereby authorized to establish a
subsidiary to be known as First North American Life Assurance Company;
and it is
FURTHER RESOLVED, that the proper officers of the Company be, and they
hereby are, authorized and directed to do all things and execute all
instruments and documents necessary or desirable to effect the
foregoing.
DATED at Boston, Massachusetts as of the 6th day of March, 1992
/s/ John D. DesPrez III
--------------------------------
John D. DesPrez
Secretary
-24-
<PAGE> 2
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
SECRETARY'S CERTIFICATE
I, Christina M. Perrino, Secretary of First North Amerian Life
Assurance company ("the Company") do hereby certify that the following is a true
and correct copy of a resolution passed by the Board of Directors of the Company
on the 4th day of March, 1992, and that the said resolutions are in full force
and effect on the date hereof:
RESOLVED, That the Company give to the Superintendent of Financial
Institutions in Canada ("the Superintendent") the Undertaking required by the
Superintendent; and that the Undertaking shall be as set forth below; and that
the proper officers of the Company be, and they hereby are, authorized and
directed to do all thing and take all actions necessary to execute and deliver
the Undertaking to the Superintendent.
UNDERTAKING
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
First North American Life Assurance Company ("First North American")hereby
undertakes that while North American Security Life Insurance Company ("Security
Life") holds an investment in the shares of First North American, First North
American will
1. Provide the Superintendent with copies of its financial statement, a
copy of the annual report that it is required to file with its
supervisory authority, and such other information concerning its
financial condition and affairs as he may from time to time request;
2. Limit its activities to the transaction of the business of life
insurance, personal accident and sickness insurance, together with such
other activities as may be necessarily incidental to the transaction of
such business.
3. Not make any investment that North American Life Assurance Company of
Canada is prohibited from making by section 52 of the Canadian and
British Insurance Companies Act;
4. Not acquire or hold, except with the approval of the Superintendent,
shares of any corporation incorporated to undertake contracts of life
insurance;
5. Not acquire or hold except with the approval of the Superintendent, more
than thirty percent of the common shares of any corporation except a
real estate corporation
-25-
<PAGE> 3
DATED at Boston, Massachusetts as of the 6th day of March, 1992.
/s/Christina M. Perrino
-----------------------------------
Secretary
-26-
<PAGE> 4
UNDERTAKING
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
First North American Life
First North American Life Assurance Company ("First North American") hereby
undertakes that while North American Security Life Insurance Company ("Security
Life") holds an investment in the shares of First North American, First North
American will
1. Provide the Superintendent with copies of its financial statements, a
copy of the annual report that it is required to file with its
supervisory authority, and such other information concerning its
financial condition and affairs as he may from time to time request;
2. Limit its activities to the transaction of the business of life
insurance, personal accident and sickness insurance, together with such
other activities as may be necessarily incidental to the transaction of
such business;
3. Not make any investment that North American Life Assurance Company of
Canada is prohibited from making by section 52 of the Canadian and
British Insurance Companies Act;
4. Not acquire or hold, except with the approval of the Superintendent,
shares of any corporation incorporated to undertake contracts of life
insurance; and
5. Not acquire or hold, except with the approval of the Superintendent,
more than thirty percent of the common shares of any corporation except
a real estate corporation.
DATED at Boston, Massachusetts as of the 6th day of, 1992.
FIRST NORTH AMERICAN LIFE
ASSURANCE COMPANY
/s/ John D. DesPrez III
----------------------------------
By: John D. DesPrez III
Executive Vice President
----------------------------------
Title
-27-
<PAGE> 5
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
DIRECTORS AND OFFICERS
William J. Atherton Director; President
Bruce Avedon Director
Kenneth H. Conrad Director; Vice President
Administration
James R. Crysdale Associate Treasurer
John D. DePrez III Director; Executive Vice President
Ruth Ann Fleming Director
R. Courtney Jones Director
Richard S. Hirtle Director; Vice President
& Treasurer
Peter S. Hutchinson Director
Brian L. Moore Chairman of the Board
Sarah A. Murphy Chief Administrative Officer
Morton Patrontasch Associate Treasurer
Christina M. Perrino Secretary & Counsel
Robert C. Perez Director
James K. Robinson Director
John G. Vrysen Director; Vice President & Actuary
H. Douglas Wood Director
-28-
<PAGE> 6
CERTIFICATE OF AMENDMENT
of the
DECLARATION OF INTENTION AND CHARTER
of
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
Under
Section 805 Of The Business Corporation Law and Section 1206 of the Insurance
Law
The undersigned officers of First North American Life Assurance Company
(the "Corporation"), duly organized and existing under the Laws of the State of
New York, do hereby certify that:
1. That the name of the Corporation is First North American Life
Assurance Company.
2. That the Declaration of Intention and Charter (the "Charter")
was filed on February 10, 1992 with the Superintendent of Insurance.
3. That the Charter of the Corporation is hereby amended to change
the name of the Corporation by deleting paragraph FIRST in its entirety and
inserting the following in lieu thereof:
FIRST: The name of the Corporation shall be The Manufacturers
Life Insurance Company of New York (hereinafter referred to as
the "Corporation").
4. That the foregoing amendment has been duly authorized by the
Board of Directors at their regularly scheduled meeting held May 6, 1997 and by
the Sole Stockholder of the Corporation at a Special Meeting held May 6, 1997,
in accordance with the provisions of Section 803(a) of the Business Corporation
Law of the State of New York.
5. That the foregoing amendment shall be effective at 12:01 a.m.
Eastern Standard Time on October 1, 1997.
<PAGE> 7
IN WITNESS WHEREOF, First North American Life Assurance Company has
caused this Certificate to be executed by Joseph Scott, President and Tracy
Kane, Secretary.
FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY
By /s/ Joseph Scott
----------------------------------------
Joseph Scott, President
By /s/ Tracy Kane
----------------------------------------
Tracy Kane, Secretary
Commonwealth of Massachusetts )
)
County of Suffolk )
On this 9th day of September, 1997, before me personally came Joseph
Scott, President and Tracy Kane, Secretary of First North American Life
Assurance Company, the Corporation described in the above executed instrument,
and that he/she signed his/her name thereto by order of the Directors of said
Corporation.
/s/ Kimberly S. Ciccarelli
----------------------------------------
Notary Public
Commission Expires November 13, 2003
<PAGE> 1
Exhibit 6a(iii)
CERTIFICATE OF AMENDMENT
OF THE
DECLARATION OF INTENTION AND CHARTER
OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
UNDER
SECTION 805 OF THE BUSINESS CORPORATION LAW AND SECTION 1206 OF THE
INSURANCE LAW
The undersigned officers of The Manufacturers Life Insurance Company of
New York (the "Corporation"), duly organized and existing under the Laws of the
State of New York, do hereby certify that:
1. That the name of the Corporation is The Manufacturers Life Insurance
Company of New York, originally formed as First North American Life Assurance
Company.
2. That the Declaration of Intention and Charter (the "Charter") was
filed on February 10, 1992 with the Superintendent of Insurance and amended on
October 1,1997 to change the name of the Corporation.
3. That the Charter of the Corporation is hereby amended to decrease the
number of Directors of the Corporation by deleting paragraph FIFTH in its
entirety and inserting the following in lieu thereof:
FIFTH: The Board of Directors of the Corporation shall consist of the
number of Directors as may from time to time be determined in
accordance with the By-Laws of the Corporation, but shall not be less
than nine nor more than eighteen in number, of which four, but not
less than one-third, must not be officers or employees of the
Corporation or any entity controlling, controlled by, or under common
control with the Corporation and who are not beneficial owners of a
controlling interest in the voting stock of the Corporation or any
such entity. The number of Directors shall be increased to not less
than thirteen within one year following the end of the calendar year
in which the Corporation exceeded one and one-half billion dollars in
admitted assets. In the event the number of Directors duly elected and
serving shall be less than nine, the Corporation shall not for that
reason be dissolved, but the vacancy or vacancies shall be filled as
provided in paragraph Sixth.
<PAGE> 2
4. That the foregoing amendment has been duly authorized by the Board of
Directors at their regularly scheduled meeting held August 20, 1997, and by the
Sole Stockholder of the Corporation at a Special Meeting held August 20, 1997,
in accordance with the provisions of Section 803(a) of the Business Corporation
Law of the State of New York.
IN WITNESS WHEREOF, The Manufacturers Life Insurance Company of New York
has caused this Certificate to be executed by Joseph Scott, President and Tracy
Kane, Secretary.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
By /s/ Joseph Scott
-----------------------------------------------
Joseph Scott, President
By /s/ Tracy Kane
-----------------------------------------------
Tracy Kane, Secretary
STATE of Massachusetts )
)
County of Suffolk )
On this 17th day of October, 1997, before me personally came Joseph Scott,
President and Tracy Kane, Secretary of The Manufacturers Life Insurance Company
of New York, the Corporation described in the above executed instrument, and
that he/she signed his/her name thereto by order of the Directors of said
Corporation.
/s/ Kimberly S. Ciccarelli
--------------------------
Notary Public
Commission Expires November 13, 2003
<PAGE> 1
BY-LAWS
OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
ARTICLE I
CHARTER
-------
SECTION I.1. CHARTER. The name and purpose of the Corporation
shall be as set forth in the Charter. These By-Laws, the powers of the
Corporation and of its directors and shareholders, and all matters concerning
the conduct and regulation of the business and affairs of the Corporation shall
be subject to such provisions in regard thereto, if any, as are set forth in the
Charter. All references in these By-Laws to the Charter shall mean the Charter
as from time to time amended.
ARTICLE II
OFFICES
-------
SECTION II.1. OFFICES. The principal office of the Corporation
shall be located in the County of Westchester, State of New York. The
Corporation, in addition to its principal office, may also establish and
maintain such other offices and places of business, within or without the State
of New York, as the Board of Directors may from time to time determine.
ARTICLE III
SHAREHOLDERS
------------
SECTION III.1. ANNUAL MEETING. The annual meeting of the
shareholders of the Corporation for the election of directors and for the
transaction of such other business as may properly come before the meeting shall
be held on the second Friday in March of each year, at 10:00 a.m., or on such
other date or at such other time as may be fixed by the Board of Directors and
stated in the notice of the meeting. The place of the meeting shall be the
principal office of
<PAGE> 2
the Corporation, or such other place, within or without the State of New York,
as may be fixed by the Board of Directors and stated in the notice of the
meeting.
SECTION III.2. SPECIAL MEETINGS. A special meeting of the
shareholders may be called at any time by the President or the Board of
Directors, and shall be called by the President upon the written request of
one-third of the shareholders of record entitled to vote, such written request
to state the purpose or purposes of the meeting and to be delivered to the
President. All special meetings shall be held at the principal office of the
Corporation, or at such other place, within or without the State of New York, as
may be designated by the President, at a date and time to be fixed by the
President, which date shall not be later than thirty days from the date of the
receipt of such written request.
SECTION III.3. NOTICE OF MEETINGS AND WAIVER. Except as
otherwise required by law, a written notice of each meeting of shareholders,
whether annual or special, stating the place, date and hour of the meeting,
shall be given not less than ten or more than fifty days before the meeting to
each shareholder of record entitled to vote at such meeting. No notice of any
meeting of shareholders need be given to a shareholder if a written waiver of
notice, executed before, during or after the meeting by such shareholder or his
attorney thereunto duly authorized, is filed with the records of the meeting, or
to any shareholder who shall attend such meeting in person or by proxy otherwise
than for the express purpose of objecting, prior to the conclusion of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened, or to any shareholder with whom communication is at the time
unlawful.
SECTION III.4. QUORUM AND ADJOURNMENT. Except as otherwise
required by law, the Charter or these By-Laws, at all meetings of shareholders,
the holders of a majority of the shares entitled to vote at such meeting,
present in person or represented by proxy, shall constitute a quorum for the
transaction of business. In the absence of a quorum, any officer entitled to
2
<PAGE> 3
preside over or act as secretary of such meeting may adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum be present. At any such adjourned meeting at which a quorum may be
present, any business may be transacted which might have been transacted at the
meeting as originally notified. If the adjournment is for more than thirty days
or a new record date is fixed, notice of adjournment of a meeting of
shareholders to another time or place shall be given to each shareholder of
record entitled to vote at such meeting.
SECTION III.5. VOTING. Shareholders entitled to vote shall
have one vote for each share of stock, and a proportionate vote for a fractional
share of stock, entitled to vote held by them of record according to the records
of the Corporation. The Corporation shall not, directly or indirectly, vote any
share of its own stock. The vote upon any question shall be by ballot whenever
requested by any person entitled to vote but, unless such a request is made,
voting may be conducted in any way approved by the meeting. In the absence of a
higher standard required by law, the Charter or these By-Laws, any matter
properly before a meeting of shareholders shall be decided by a majority of the
votes cast hereon.
SECTION III.6. PROXIES. Shareholders entitled to vote at a
meeting or to express consent or dissent without a meeting may vote either in
person or by proxy in writing dated not more than six months before the meeting
named therein, which proxy shall be filed with the Secretary or other person
responsible to record the proceedings of the meeting before being voted. Unless
otherwise specifically limited by their terms, such proxies shall entitle the
holders thereof to vote at any adjournment of such meeting but shall not be
valid after eleven months from its date, unless the proxy provides for a longer
period. The Secretary shall determine the validity of any proxy submitted for
use at any meeting.
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SECTION III.7. WAIVER OF IRREGULARITIES. Unless otherwise
provided by law, all informalities and irregularities in calls, notices of
meetings and in the manner of voting, form of proxy, credentials and methods of
ascertaining those present, shall be deemed waived if no objection is made
thereto at the meeting.
SECTION III.8. ACTION BY WRITTEN CONSENT. So far as permitted
by law, any action required or permitted to be taken at any meeting of
shareholders may be taken without meeting if a written consent setting forth
such action is signed by all the shareholders entitled to vote thereon and such
written consent is filed with the records of the Corporation. Written consent
thus given shall have the same effect as a unanimous vote of shareholders.
ARTICLE IV
BOARD OF DIRECTORS
------------------
SECTION IV.1. POWER OF BOARD AND QUALIFICATION OF DIRECTORS.
The business of the Corporation shall be managed by its Board of Directors,
which may exercise all such powers of the Corporation and do all such lawful
acts and things as are not by law, the Charter or these By-Laws directed or
required to be exercised or done by the shareholders.
Each director shall be at least eighteen years of age. Not
less than three of the directors shall be residents of the State of New York,
and a majority of the directors shall be citizens and residents of the United
States. At least four of the directors shall be persons who are not officers or
employees of the Corporation or of any entity controlling, controlled by, or
under common control with the Corporation and who are not beneficial owners of a
controlling interest in the voting stock of the Corporation or any such entity.
A director meeting the qualifications of the immediately preceding sentence is
hereinafter referred to as a "Non-Affiliated Director." No director need be a
shareholder.
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SECTION IV.2. NUMBER, ELECTION AND TERM OF OFFICE. The Board
of Directors shall consist of not less than nine nor more than eighteen
directors. The number of directors shall be fixed by majority vote of the entire
Board; provided that no decrease in the number of directors shall shorten the
term of any incumbent director. Subject to the provisions of Section 4.8 hereof,
the directors shall be elected annually by the shareholders entitled to vote at
the annual meeting of shareholders, by a majority of votes at such election.
Each director, whether elected at an annual meeting or pursuant to Section 4.8
hereof, shall continue in office until the annual meeting of shareholders held
next after his or her election and until his or her successor shall have been
elected and qualified or until his or her earlier death, resignation or removal
in the manner hereinafter provided. No election of directors shall be valid
unless a notice of the election shall have been filed with the Superintendent of
Insurance of the State of New York at least ten days before the election.
SECTION IV.3. REGULAR MEETINGS. A regular meeting of the Board
of Directors for the election of officers and for the transaction of such other
business as may properly come before the meeting shall be held without notice at
the place where the annual meeting of shareholders is held, immediately
following such meeting. The Board of Directors by resolution shall provide for
the holding of three additional regular meetings, with or without notice, and
shall fix the times and places, within or without the State of New York, at
which such meetings shall be held. One regular meeting shall be held in each
calendar quarter.
SECTION IV.4. SPECIAL MEETINGS, NOTICE AND WAIVER. Special
meetings of the Board of Directors may be called by the President, and shall be
called by the President upon receipt of a written request of not less than three
directors. All special meetings shall be held at a date, time and place to be
fixed by the President, and the President shall direct the Secretary to give
notice of each special meeting to each director by mail at least five days
before such meeting
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is to be held or in person or by telephone or telegraph at least two days before
such meeting. Such notice shall state the date, time, place and purposes of such
meeting. Notice of a meeting need not be given to any director if a written
waiver of notice, executed by him or her before, during or after the meeting, is
filed with the records of the meeting.
SECTION IV.5. QUORUM AND CONFERENCE CALL MEETINGS. A majority
of the entire Board of Directors, at least one of whom shall be a Non-Affiliated
Director, shall constitute a quorum for the transaction of business. When a
quorum is present at any meeting, a majority of the directors present may take
any action except as otherwise expressly required by law, the Charter or these
By-Laws. In the absence of a quorum, a majority of the directors present at the
time and place of any meeting, may adjourn such meeting from time to time until
a quorum be present. If by reason of one or more vacancies there is less than
the minimum number of directors, the Board of Directors shall have the power to
function legally prior to the filling of the vacancy; provided, however, that
there shall always be a quorum. Any one or more directors may participate in a
regular or special meeting of the Board by means of a conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting by such means
shall constitute presence in person at such meeting. Notwithstanding the
foregoing, with respect to at least one of the regular meetings in each calendar
year, which meeting shall be designated by the Board of Directors, the quorum
requirements set forth in this Section may be met only if the requisite number
and category of directors are physically present at the place at which the
meeting is held.
SECTION IV.6. CHAIRMAN. The Board of Directors may elect, from
among its members, a Chairman. The Chairman of the Board, if one is elected,
shall preside at all meetings of the Board of Directors and shall have such
other powers and duties as may be granted or assigned to him or her from time to
time by the Board of Directors. If a Chairman of the Board is
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elected but is absent or unable to preside at meetings of the Board of
Directors, or if no Chairman is elected, the President shall preside at such
meetings.
SECTION IV.7. RESIGNATION AND REMOVAL. Any director may resign
at any time by giving written notice of such resignation to either the Board of
Directors, the President or the Secretary. Unless otherwise specified therein,
such resignation shall take effect upon receipt thereof by the Board of
Directors or by the President or Secretary. Any director may be removed either
with or without cause at any time by the affirmative vote of the shareholders of
record holding a majority of the outstanding shares of the Corporation entitled
to vote for the election of directors, given at a meeting of the shareholders
called for that purpose, or by the holders of a majority of the outstanding
shares entitled to vote for the election of directors without holding a meeting
or notice but by merely presenting their majority to the Secretary of the
Corporation in writing for the removal of a director or directors without cause.
Any director may be removed with cause by a majority of the total number of
directors constituting the entire Board of Directors at a meeting of the Board
of Directors.
SECTION IV.8. VACANCIES. A vacancy in the Board of Directors
arising by reason of death, resignation, removal (with or without cause),
increase in the number of directors, or otherwise, which may occur between
annual meetings of the shareholders of the Corporation may be filled by a
majority vote of the remaining directors, though less than a quorum. Any such
vacancy may also be filled by the shareholders entitled to vote for the election
of directors at any meeting held during the existence of such vacancy.
SECTION IV.9. COMPENSATION. The Board of Directors may
authorize payment of a retainer fee to one or more of the directors in instances
where, in the discretion of the Board, such payment is deemed appropriate. Other
than such payments, if any, directors, as such, shall not be compensated for
their services but by resolution of the Board of Directors may be paid a fee for
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attendance at each meeting of the Board of Directors or a committee thereof;
provided, however, that no director shall be paid a fee, whether by retainer,
for attendance, or otherwise, if such director is also a salaried officer of the
Corporation. Nothing in these by-laws contained shall prevent any director from
serving the Corporation in any other capacity or receiving compensation
therefor.
SECTION IV.10. ACTION BY WRITTEN CONSENT. So far as permitted
by law, any action required or permitted to be taken at any meeting of the Board
of Directors may be taken without a meeting if a written consent setting forth
such action is signed by all the directors entitled to vote thereon and such
written consent is filed with the records of the Corporation. Written consent
thus given shall have the same effect as a unanimous vote of directors.
ARTICLE V
COMMITTEES OF DIRECTORS
-----------------------
SECTION V.1. COMMITTEES. The Board of Directors, by the
affirmative vote of the majority of the entire Board, shall appoint from among
its members an Audit, Nominating and Evaluation Committee, which shall be
comprised solely of Non-Affiliated Directors, an Executive Committee, an
Investment Committee and such other committees as it may deem necessary. Each
member of each such committee shall continue in office during the pleasure of
the Board or until he or she shall cease to be a director.
Except to the extent a greater proportion is required by the
provisions of this Article V, not less than one-third of the members of each
such committee shall consist of Non-Affiliated Directors, at least one of whom
shall be present to constitute a quorum for the transaction of business. The
presence, at any meeting of a committee, of a majority of its members then in
office, at lease one of whom is a Non-Affiliated Director, shall constitute a
quorum for the transaction of business. A majority of such quorum may decide any
questions that
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may come before such meeting. Any one or more members of a committee may
participate in a meeting of such committee by means of a conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting by such means
shall constitute presence in person at such meeting. So far as permitted by law,
any action required or permitted to be taken at any meeting of any committee
appointed and established by the Board of Directors may be taken without a
meeting if a written consent setting forth such action is signed by all of the
members of such committee entitled to vote thereon and such written consent is
filed with the records of the Corporation.
SECTION V.2. EXECUTIVE COMMITTEE. The Board of Directors shall
appoint an Executive Committee consisting of not less than five directors, and
may designate as Chairman of the Executive Committee one of the members so
appointed. The Chairman of the Executive Committee shall preside at all meetings
of the Executive Committee at which he is present. The Executive Committee shall
keep a record of its proceedings and shall adopt its own rules of procedure. The
Executive Committee shall submit a written report of its activities to the Board
of Directors at the next meeting of the Board of Directors. Each director may
inspect and review, at any time during normal business hours, the minutes of the
meetings of the Executive Committee, and said minutes shall be retained by the
Secretary of the Corporation and made available to the Board of Directors at
each of its meetings.
Except as otherwise provided by law, the Charter or these
By-Laws, all the powers of the Board of Directors when not in session, may be
vested, to the extent from time to time determined by the Board of Directors, in
the Executive Committee. To the extent appropriate to carry out this provision,
references in these By-Laws to the Board of Directors shall be read to mean the
Executive Committee. The Executive
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Committee may authorize one or more officers, employees or agents of the
Corporation to carry out the exercise of its powers. The Executive Committee
shall have the power and authority to declare dividends and to authorize the
issuance of common stock. The Executive Committee shall not have and may not
exercise the following powers:
(1) To submit to the shareholders any action which by any
applicable statute requires shareholders' approval;
(2) To fill any vacancy in the Board of Directors or in any
committee thereof;
(3) To fix the compensation of any director for serving on
the Board or any committee thereof;
(4) To amend or repeal these By-Laws, or to adopt new
By-Laws;
(5) To amend, alter or repeal any resolution of the Board
of Directors which by its terms provides that it shall not be amended or
repealed.
SECTION V.3. AUDIT, NOMINATING AND EVALUATION COMMITTEE. The
Board of Directors shall appoint an Audit, Nominating and Evaluation Committee
consisting of not less than five directors, and may designate as Chairman of the
Audit, Nominating and Evaluation Committee one of the members so appointed. The
Audit, Nominating and Evaluation Committee shall consist solely of
Non-Affiliated Directors. The Chairman of the Audit, Nominating and Evaluation
Committee shall preside at all meetings of the Audit, Nominating and Evaluation
Committee at which he or she is present. The Audit, Nominating and Evaluation
Committee shall keep a record of its proceedings and shall adopt its own rules
of procedure. The Audit, Nominating and Evaluation Committee shall submit a
report of its activities to the Board of Directors at the next meeting of the
Board of Directors. The Audit, Nominating and Evaluation Committee shall have
responsibility for: (1) recommending the selection of independent certified
public accountants; (2) reviewing the Corporation's financial condition, the
scope and results of
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the independent audit and any internal audit; (3) nominating candidates for
director for election by shareholders; and (4) evaluating the performance of
officers who, pursuant to Section 6.1 of Article VI of these By-Laws, are
principal officers of the Corporation and recommending to the Board of Directors
the selection and compensation of such principal officers.
The Audit, Nominating and Evaluation Committee shall, to the
extent empowered by the Board, have and possess all of the rights and powers of
the Board of Directors, between meetings of the Board of Directors, to: (1) meet
and discuss with the representative of any firm of certified public accountants,
for reviewing the Corporation's financial condition, the scope and results of
the independent audit and any internal audit; (2) to nominate candidates for
director for election by shareholders; and (3) to evaluate the performance of
officers who, pursuant to Section 6.1 of Article VI of these By-Laws, are
principal officers of the Corporation and to recommend to the Board of Directors
the selection and compensation of such principal officers. The Audit, Nominating
and Evaluation Committee shall, to the extent empowered by the Board, have and
possess all of the rights and powers of the Board of Directors, between meetings
of the Board of Directors, to meet and discuss with the representatives of any
firm of certified public accountants retained by the Corporation, at any time
and from time to time, whether before and/or after the preparation of the
year-end financial statements of the Corporation, the scope of the audit of such
firm with respect to any year, and to question such representatives with respect
thereto. In addition, the Audit, Nominating and Evaluation Committee shall have
the authority to meet with and question officers and employees of the
Corporation with respect to financial matters pertaining to the Corporation. The
Audit, Nominating and Evaluation Committee shall not have and may not exercise
any of the powers referred to in clauses (1) through (5), inclusive, of Section
5.2 hereof.
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SECTION V.4. INVESTMENT COMMITTEE. The Board of Directors
shall appoint an Investment Committee consisting of not less than five
directors, and may designate as Chairman of the Investment Committee one of the
members so appointed. The Chairman of the Investment Committee shall preside at
all meetings of the Investment Committee at which he or she is present. The
Investment Committee shall keep a record of its proceedings and shall adopt its
own rules of procedure. The Investment Committee shall submit a report of its
activities to the Board of Directors at the next meeting of the Board of
Directors.
The Investment Committee shall have the power to invest the
funds of the Corporation in deposits with banks and insurance companies, the
purchase and acquisition of stocks, bonds and other securities, in the name and
in behalf of the Corporation and to withdraw any such deposits and to sell and
dispose of the stocks, bonds and other securities owned by the Corporation, at
such times and upon such terms as it may deem wise and advantageous to the
Corporation; provided, however, that in any case where the investment of such
funds in stocks, bonds or other securities involves the active participation of
the Corporation in the management of the business represented by any such
securities, the Investment Committee shall not have the power to make any
investments or otherwise deal with such securities without the approval of the
Board of Directors. All actions of the Investment Committee shall be subject to
revision or alteration by the Board of Directors; provided, however, that rights
or acts of third parties shall not be affected by any such revision or
alteration.
ARTICLE VI
OFFICERS
--------
SECTION VI.1. NUMBER AND PRINCIPAL OFFICERS. The officers of
the Corporation shall be a President, a Secretary, a Treasurer, and such other
officers as may be appointed in accordance with the provisions of Section 6.3
hereof. So far as permitted by applicable law, any
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two or more offices may be held by the same person, except that the President
and the Secretary shall not be the same person. The President, any
Vice-Presidents appointed or elected by the Board of Directors, the Secretary
and the Treasurer shall be principal officers of the Corporation for purposes of
Section 5.3 of Article V of these By-Laws.
SECTION VI.2. ELECTION, TERM OF OFFICE AND QUALIFICATION. The
President, the Treasurer and the Secretary shall be elected annually by the
directors at their first meeting following the annual meeting of shareholders,
by vote of a majority of the directors present and voting, and other officers,
if any, may be elected or appointed by the directors at said meeting or at any
other time. The President shall be and remain a director. No other officer need
be a director.
Except as otherwise provided by law or by the Charter or by
these By-Laws, the President, the Treasurer and the Secretary shall hold office
until the first meeting of the directors following the next annual meeting of
shareholders and until their respective successors are chosen and qualified, or,
in each case, until he or she sooner dies, resigns or is removed, unless a
shorter period shall have been specified by the terms of his or her election or
appointment. Each agent, if any, shall retain his or her authority at the
pleasure of the directors.
SECTION VI.3. OTHER OFFICERS. The Board of Directors from time
to time may appoint other officers or agents, including but not limited to one
or more Vice-Presidents, one or more assistant treasurers and one or more
assistant secretaries, each of whom shall hold office for such period, have such
authority and perform such duties as are provided in these By-Laws or as the
Board of Directors from time to time may determine. The Board of Directors may
delegate to any officer or committee the power to appoint any such other
officers or agents and to prescribe their respective authorities and duties.
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SECTION VI.4. PRESIDENT. The President shall, subject to the
control of the Board of Directors, have general charge of the business, affairs
and property of the Corporation, and control over its several officers. The
President shall do and perform such other duties and may exercise such other
powers as from time to time may be assigned to him or her by these By-Laws or by
the Board of Directors.
SECTION VI.5. TREASURER. Subject to the order of the Board of
Directors, the Treasurer shall have supervision over the funds, securities,
receipts and disbursements of the Corporation and shall be the chief accounting
officer of the Corporation. He or she shall cause all monies and other valuable
effects to be deposited in the name and to the credit of the Corporation, in
such banks or trust companies or with such bankers or other depositories as
shall be selected by the Board of Directors or which he or she shall select
pursuant to authority conferred upon him or her by the Board of Directors. He or
she shall cause the funds of the Corporation to be disbursed by checks or drafts
upon the authorized depositories of the Corporation and shall cause to be taken
and preserved proper vouchers for all monies disbursed. He or she shall cause to
be kept correct books of account of the business and transactions of the
Corporation and shall render to the President, the Board of Directors or the
Executive Committee, whenever requested, an account of the financial condition
of the Corporation and of his or her transactions as Treasurer. He or she shall
be responsible for keeping and maintaining the stock books and stock transfer
books of the Corporation. He or she shall be empowered, from time to time, to
require of the officers or agents of the Corporation reports or statements
giving such information as he or she may desire with respect to any and all
financial transactions of the Corporation, and shall have such other powers and
duties as from time to time may be assigned to him or her by these By-laws or by
the Board of Directors or by the President. If required by the Board of
Directors, he or she shall give the Corporation a bond in such sum with
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such surety or sureties as shall be satisfactory to the Board for the faithful
performance of his or her duties.
SECTION VI.6. SECRETARY. The Secretary shall keep and record
all the minutes of the meetings of shareholders and the Board of Directors in
books to be maintained for that purpose, and shall perform like duties for
committees of the Board of Directors when required. He or she shall give notice
to the shareholders and the Board of Directors in accordance with the provisions
of these By-Laws or as required by statute. Except for those records for which
the Treasurer is responsible, the Secretary shall be responsible for the records
of the Corporation and the Board of Directors. He or she shall keep in safe
custody the seal of the Corporation and shall see that the seal is affixed to
all documents the execution of which, on behalf of the Corporation under its
seal, shall have been duly authorized. He or she shall see that all lists,
books, reports, statements and certificates and other documents and records
required by law to be kept or filed are properly kept or filed. He or she shall
perform all duties and shall have all powers incident to the office of the
Secretary and shall perform such other duties and have such other powers as from
time to time may be assigned to him or her by these By-Laws or by the Board of
Directors or the President.
SECTION VI.7. VICE-PRESIDENTS. The Vice-Presidents, if any, in
the order designated by the Board of Directors or, lacking such designation, by
the President, shall in the absence or disability of the President perform the
duties and exercise the powers of the President and shall perform such other
duties as the Board of Directors shall prescribe.
SECTION VI.8. RESIGNATION AND REMOVAL. Any officer may resign
at any time by giving written notice of such resignation to the Board of
Directors or to the President or the Secretary. Unless otherwise specified
therein, such resignation shall take effect upon receipt thereof by the Board of
Directors, the President or the Secretary. Any officer may be removed,
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either with or without cause, by vote of a majority of the total number of
directors constituting the entire Board of Directors, at a special meeting of
the Board of Directors called for that purpose.
SECTION VI.9. VACANCIES. A vacancy in any office because of
death, resignation, removal or any other cause shall be filled for the unexpired
portion of the term in the manner prescribed by these By-laws for the regular
election or appointment to such office.
SECTION VI.10. SALARIES. Subject to the provisions of Article
V of these By-Laws, the salaries or other compensation of the officers shall be
fixed from time to time by the Board of Directors and no officer shall be
prevented from receiving such salary or other compensation by reason of the fact
that he or she is also a director of the Corporation; provided, however, that no
director shall be paid a fee, whether by retainer, for attendance, or otherwise,
if such director is also a salaried officer of the Corporation.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
SECTION VII.1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The
Corporation may indemnify any person made, or threatened to be made, a party to
an action by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he or she, his or her testator, testatrix or
intestate, is or was a director or officer of the Corporation, or is or was
serving at the request of the Corporation as a director or officer of any other
corporation of any type or kind, domestic or foreign, of any partnership, joint
venture, trust, employee benefit plan or other enterprise, against amounts paid
in settlement and reasonable expenses, including attorneys' fees, actually and
necessarily incurred by him or her in connection with the defense or settlement
of such action, or in connection with an appeal therein, if such director or
officer acted, in good faith, for a purpose which he or she reasonably believed
to be in, or, in the case of service for any
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other corporation or any partnership, joint venture, trust, employee benefit
plan or other enterprise, not opposed to, the best interests of the Corporation,
except that no indemnification under this Section shall be made in respect of
(1) a threatened action, or a pending action which is settled or is otherwise
disposed of, or (2) any claim issue or matter as to which such person shall have
been adjudged to be liable to the Corporation, unless and only to the extent
that the court in which the action was brought, or, if no action was brought,
any court of competent jurisdiction, determines upon application that, in view
of all the circumstances of the case, the person is fairly and reasonably
entitled to indemnity for such portion of the settlement amount and expenses as
the court deems proper.
The Corporation may indemnify any person made, or threatened
to be made, a party to an action or proceeding (other than one by or in the
right of the Corporation to procure a judgment in its favor), whether civil or
criminal, including an action by or in the right or any other corporation of any
type or kind, domestic or foreign, or any partnership, joint venture, trust,
employee benefit plan or other enterprise, which any director or officer of the
Corporation served in any capacity at the request of the Corporation, but reason
of the fact that he or she, his or her testator, testatrix or intestate, was a
director or officer of the Corporation, or served such other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise in
any capacity, against judgments, fines, amounts paid in settlement and
reasonable expenses, including attorneys' fees actually and necessarily incurred
as a result of such action or proceeding, or any appeal therein, if such
director or officer acted, in good faith, for a purpose which he or she
reasonably believed to be in, or, in the case of service for any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise, not opposed to, the best interests of the Corporation and, in
criminal actions or proceedings, in addition, had no reasonable cause to believe
that his or her conduct was unlawful.
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The termination of any such civil or criminal action or
proceeding by judgment, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not in itself create a presumption that any
such director or officer did not act, in good faith, for a purpose which he or
she reasonably believed to be in, or, in the case of service for any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise, not opposed to, the best interest of the Corporation or that
he or she had reasonable cause to believe that his or her conduct was unlawful.
A person who has been successful, on the merits or otherwise,
in the defense of a civil or criminal action or proceeding of the character
described in the first two paragraphs of this Article VII, shall be entitled to
indemnification as authorized in such paragraphs. Except as provided in the
preceding sentence and unless ordered by a court, any indemnification under such
paragraphs shall be made by the Corporation, only if authorized in the specific
case:
(1) By the Board of Directors acting by a quorum consisting of
directors which are not parties to such action or proceeding upon a
finding that the director, officer or employee has met the standard of
conduct set forth in the first two paragraphs of this Article VII, as
the case may be or
(2) If such a quorum is not obtainable with due diligence or,
even if obtainable, a quorum of disinterested directors so directs,
(a) By the Board of Directors upon the opinion in
writing of independent legal counsel that indemnification is proper in
the circumstances because the applicable standard of conduct set forth
in the first two paragraphs of this Article VII has been met by such
director, officer or employee, or
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(b) By the shareholders upon a finding that the
director, officer or employee has met the applicable standard of
conduct set forth in such paragraphs.
Expenses, including attorneys' fees, incurred in defending a
civil or criminal action or a proceeding may be paid by the Corporation in
advance of the final disposition of such action or proceeding, if authorized in
accordance with the preceding paragraph, subject to repayment to the Corporation
in case the person receiving such advancement is ultimately found, under the
procedure set forth in this Article VII, not to be entitled to indemnification
or, where indemnification is granted, to the extent the expenses so advanced by
the Corporation exceed the indemnification to which he or she is entitled.
Nothing herein shall affect the right of any person to be
awarded indemnification or, during the pendency of litigation, an allowance of
expenses, including attorneys' fees, by a court in accordance with law.
If any expenses or other amounts are paid by way of
indemnification, otherwise than by court order or action by the shareholders,
the Corporation shall, not later than the next annual meeting of shareholders
unless such meeting is held within three months from the date of such payment,
and in any event, within fifteen months from the date of such payment, mail to
its shareholders of record at the time entitled to vote for the election of
directors a statement specifying the persons paid, the amounts paid, and the
nature and status at the time of such payment of the litigation or threatened
litigation.
The Corporation shall have the power, in furtherance of the
provisions of this Article VII, to apply for, purchase and maintain insurance of
the type and in such amounts as is or may hereafter be permitted by Section 726
of the Business Corporation Laws.
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No payment of indemnification, advancement or allowance under
Sections 721 or 726, inclusive, or the Business Corporation Law shall be made
unless a notice has been filed with the Superintendent of Insurance of the State
of New York, not less than thirty days prior to such payment, specifying the
persons to be paid, the amounts to be paid, the manner in which such payment is
authorized and the nature and status, at the time of such notice, of the
litigation or threatened litigation.
ARTICLE VIII
CONFLICT OF INTEREST
--------------------
SECTION VIII.1. CONFLICT OF INTEREST. No director, officer or
employee of the Corporation shall have any position with or a substantial
interest in any other business enterprise operated for profit, the existence of
which would conflict or might reasonably be supposed to conflict with the proper
performance of his or her Corporation duties or responsibilities, or which might
tend to affect his or her independence of judgment with respect to transactions
between the Corporation and such other business enterprise, without full and
complete disclosure thereof to the Board of Directors. Each director, officer or
employee who has such a conflicting or possibly conflicting interest with
respect to any transactions which he or she knows is under consideration by the
Board, is required to make timely disclosure thereof so that it may be part of
the directors' consideration of the transaction.
The holding of any office or position in any corporation
affiliated with the Corporation or any corporation owning a majority of the
stock of the Corporation and carrying out the duties of any such office or
position shall not be deemed to be a conflicting interest; nor shall this
Article VIII be construed to prevent the receipt of any salaries or other
benefits from any corporation affiliated with the Corporation or from any
corporation owning the majority of the stock of the Corporation. The ownership
of one percent or more of the issued and outstanding
20
<PAGE> 21
stock of any corporation doing business with the Corporation or competing with
the Corporation shall be considered to be a "substantial interest in any other
business enterprise operated for profit"; provided, however, that ownership of
the stock or other securities of any corporation affiliated with the Corporation
or of any corporation owning a majority of the stock of the Corporation shall
not be considered to be a conflicting interest.
SECTION VIII.2. GIFTS. None of the directors, officers and
employees shall accept gifts, gratuities or favors of any kind from any person,
firm or corporation doing business or seeking to do business with the
Corporation under circumstances from which it could reasonably be inferred that
the purpose of the gift, gratuity or favor could be to influence the said
director, officer or employee in the conduct of Corporation transactions with
the donor or the interest the donor is representing. Nothing in this Section 8.2
shall be construed to prohibit either the giving or the receiving of normal
hospitality or a social nature or normal practice of gift exchange on a
reciprocal basis between person having close personal relationships unrelated to
business.
ARTICLE IX
EXECUTION OF INSTRUMENTS AND SEAL
---------------------------------
SECTION IX.1. EXECUTION OF INSTRUMENTS. Except as the Board of
Directors may generally or in particular cases authorize the execution thereof
in some other manner, all documents, instruments or writings of any nature made,
accepted or endorsed by the Corporation shall be signed, executed, verified,
acknowledged and delivered by the President, any Vice- President, or the
Secretary.
SECTION IX.2. CORPORATION SEAL. The corporate seal shall be in
the form of a circle and shall bear the name of the Corporation and shall
indicate its formation under the laws of the State of New York; provided, that
the form of such seal shall be subject to alteration from time to time by the
Board of Directors.
21
<PAGE> 22
ARTICLE X
CAPITAL STOCK
-------------
SECTION X.1. NUMBER OF SHARES AND PAR VALUE. The total number
of shares and the par value of all stock which the Corporation is authorized to
issue shall be as stated in the Charter.
SECTION X.2. CERTIFICATES OF SHARES. Each shareholder shall be
entitled to a certificate, signed by the President and the Treasurer or
Secretary certifying the number and class of the shares owned by him or her in
the Corporation. Such signatures may be facsimiles if the certificates are
countersigned by a transfer agent or registered by a registrar other than the
Corporation or its employees. Certificates for shares of the stock of the
Corporation shall be in such form as shall be approved by the Board of
Directors, and the seal of the Corporation shall be affixed thereto. There shall
be entered upon the stock books of the Corporation the number of each
certificate issued, the name of the person owning the shares represented
thereby, the number of shares and the date thereof.
SECTION X.3. LOST, STOLEN OR DESTROYED CERTIFICATES. The Board
of Directors may direct a new certificate or certificates to be issued in place
of any certificate or certificates therefore issued by the Corporation alleged
to have been lost, stolen or destroyed, upon the making of an affidavit of the
fact by the owner claiming the certificate or certificates to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or certificates, the
Board of Directors may, in its discretion as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or his or her legal representative, the advertise
the same in such manner as it shall require and/or to give the Corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate or certificates
alleged to have been lost, stolen or destroyed.
22
<PAGE> 23
SECTION X.4. RECORD DATE. In order that the Corporation may
determine the shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or to express consent to a corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than fifty days nor less than
ten days before the date of such meeting, nor more than fifty days prior to any
other action. A determination of shareholders of record entitled to notice of or
to vote at a meeting of shareholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting. Absent Board of Directors action, the record
date shall be ten days before the date of such meeting.
SECTION X.5. STOCK TRANSFERS. Transfers of stock shall be made
only upon the books of the Corporation, and only upon surrender to the
Corporation or the transfer agent of the Corporation of a certificate for shares
duly endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer.
ARTICLE XI
DIVIDENDS
---------
SECTION XI.1. DIVIDENDS. Dividends upon the capital stock of
the Corporation may be declared by the Board of Directors at any regular or
special meeting; provided, however, that the Corporation shall not distribute
any dividend to its shareholders unless a notice of intention to declare such
dividend has been filed with the Superintendent of Insurance of the State of New
York not less than thirty days after such filing gives written notice to the
Corporation of
23
<PAGE> 24
his or her disapproval of such distribution, on the ground that he or she finds
that the financial condition of the Corporation does not warrant the
distribution of such dividend.
ARTICLE XII
APPLICATIONS, POLICIES AND PREMIUMS
-----------------------------------
SECTION XII.1. APPLICATIONS, POLICIES AND PREMIUMS. The
President, or a duly authorized Vice-President, shall prescribe and approve all
forms of policies issued by the Corporation, including all riders and provisions
included in or attached to such policies, and the forms of applications
therefor. The President, or a duly authorized Vice-President, shall fix all
rates of premiums
ARTICLE XIII
FISCAL YEAR
-----------
SECTION XIII.1. FISCAL YEAR. The fiscal year of the Corporation
shall end on the last day of December annually.
ARTICLE XIV
NOTICES
-------
SECTION XIV.1. NOTICES. Whenever, under the provisions of law,
the Charter or these By-Laws, notice is required to be given to any director or
shareholder, it shall not be construed to mean personal notice unless
specifically allowed, but such notice may be given in writing, by certified or
registered mail, return receipt requested, addressed to such director or
shareholder, at his or her address as it appears on the records of the
Corporation, with postage there prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
ARTICLE XV
AMENDMENTS
----------
24
<PAGE> 25
SECTION XV.1. AMENDMENTS. These By-Laws may be amended,
changed or repealed by the Board of Directors, except that the Board may take no
action which, by law or the Charter, is required to be taken by the
shareholders, or which excludes or limits the right of a shareholder to vote on
a matter. Any By-Law so amended, changed or repealed by the directors may be
further altered or amended or reinstated by the shareholders in the manner
provided below.
These By-Laws may be amended, changed or repealed by a
majority vote of the shareholders present at any annual meeting or at a special
meeting called for that purpose, provided that the notice of any such annual or
special meeting shall specify the subject matter of the proposed amendment,
change or repeal shall have been submitted in writing and filed with the
Secretary at least five days prior to such meeting.
25
<PAGE> 1
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement (this "Agreement") is
made effective as of 12:01 a.m., Eastern Standard Time, on the 1st day of
October, 1997 ("Effective Date"), by and between THE MANUFACTURERS LIFE
INSURANCE COMPANY, a corporation organized under the Insurance Companies Act
(Canada) ("Provider") and THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK,
a New York stock life insurance corporation ("Company").
WHEREAS, Provider has extensive experience in the operation of
an insurance business and has provided certain services to Company pursuant to
the terms of an Administrative Services Agreement effective July, 8, 1992
between the Company and North American Life Assurance Company, which
subsequently merged with and into the Provider (the "Prior Agreement"); and
WHEREAS, Company desires Provider to perform administrative
and special services (collectively, "services") for Company in its insurance
operations and desires further to make use in its day-to-day operations of
certain property, equipment and facilities (collectively, "facilities") of
Provider as Company may request; and
WHEREAS, Provider and Company contemplate that such an
arrangement will achieve certain operating economies and improve services to the
mutual benefit of both; and
WHEREAS, Provider and Company wish to assure that all charges
for services and the use of facilities incurred hereunder are reasonable and in
accordance with the requirements of New York Insurance Department Regulation No.
33 and to the extent practicable
<PAGE> 2
reflect actual costs and are arrived at in a fair and equitable manner, and that
estimated costs, whenever used, are adjusted periodically, to bring them into
alignment with actual costs; and
WHEREAS, Provider and Company wish to identify the services to
be rendered to Company by Provider and the facilities to be used by Company and
to provide a method of fixing bases for determining the charges to be made to
Company:
NOW, THEREFORE, in consideration of the premises and of the
mutual promises set forth herein, and intending to be legally bound hereby,
Provider and Company agree as follows:
PERFORMANCE OF SERVICES AND USE OF FACILITIES. Subject
to the terms, conditions and limitations of this Agreement, Provider agrees to
the extent requested by Company to perform diligently and in a professional
manner such services for Company as Company determines to be reasonably
necessary in the conduct of its insurance operations.
Subject to the terms, conditions and limitations of this
Agreement, Provider agrees to the extent requested by Company to make available
to Company such of its facilities as Company and Provider may mutually determine
to be reasonably necessary in the conduct of its insurance operations, including
but not limited to data processing equipment, business property (whether owned
or leased) and communications equipment.
Provider agrees at all times to maintain sufficient facilities
and trained personnel of the kind necessary to perform this Agreement.
With the Company's prior written consent, Provider may arrange
to furnish such services through one or more of its affiliates, subject to the
terms, conditions and limitations set forth herein. The Provider shall furnish
the Company with written confirmation of the nature and extent of services to be
provided to the Company by such affiliates and the location(s) at which
<PAGE> 3
such services shall be performed. Any such affiliate shall agree in writing to
observe and be bound by all terms and conditions of this Agreement in performing
such services and its records shall be subject to inspection, audit and
examination by the Company in accordance with Section 5 and 6 hereof. Charges
for such services shall be determined consistent with the requirements of
Section 3, and shall be included in the statement furnished by the Provider to
the Company pursuant to Section 4. Provider shall, at all times, remain liable
to the Company for the performance of services by such affiliates to the same
extent as if they had been performed by Provider itself.
CAPACITY OF PERSONNEL AND STATUS OF FACILITIES. Whenever
Provider utilizes its personnel to perform services for Company pursuant to this
Agreement, such personnel shall at all times remain employees of Provider
subject solely to its direction and control, and Provider shall alone retain
full liability to such employees for their welfare, salaries, fringe benefits,
legally required employer contributions and tax obligations.
No facility of Provider used in performing services for or
subject to use by Company shall be deemed to be transferred, assigned, conveyed
or leased by performance or use pursuant to this Agreement.
EXERCISE OF JUDGMENT IN RENDERING SERVICES. In providing
any services hereunder which require the exercise of judgment by Provider,
Provider shall perform any such service in accordance with any standards and
guidelines Company develops and communicates to Provider. In performing any
services hereunder, Provider shall at all times act in a manner reasonably
calculated to be in or not opposed to the best interests of Company.
CONTROL. The performance of services by Provider for
Company pursuant to this Agreement shall in no way impair the absolute control
of the business and
<PAGE> 4
operations of Provider or Company by their respective Boards of Directors.
Provider shall act hereunder so as to assure the separate operating identity of
Company, consistent with the provisions of Section 1507 of the New York
Insurance Law.
SERVICES. The performance of Provider under this Agreement
with respect to the business and operations of Company shall at all times be
subject to the direction and control of the Board of Directors of Company.
Subject to the foregoing and to the terms, conditions and
limitations of this Agreement, Provider shall provide to Company the services
set forth below in connection with the insurance business of the Company.
(a) UNDERWRITING. Subject to underwriting standards
established by Company and communicated to Provider, Provider shall provide
underwriting services, including review of policy applications, assignment of
policy numbers, MIB review, medical review and other investigations and actual
policy issue, all subject to final approval of Company. Provider shall provide
assistance to the Company in the development of all underwriting criteria
pursuant to which all new business applications and policyowner service
transactions requiring underwriting decisions will be processed and acted upon.
All new applications will initially be sent to Provider. Upon completion of
underwriting, originals will be sent to the Company and retained at its home
offices in Rye, New York. All policyowner service transactions requiring any
underwriting decisions shall be determined by Provider personnel.
(b) POLICY OWNER SERVICES. Provider shall provide automated
systems and personnel to assist with policyowner services, from the point of
issue through termination of
<PAGE> 5
coverage. Policyowner records of the Company shall be maintained at the home
offices of the Company.
(c) CLAIMS. Subject to claims settlement procedures
established by Company and communicated to Provider, Provider shall provide
claims services, including verification that the policy was in force, and review
and investigation of claims, all subject to final approval of Company.
(d) MARKETING. Upon request of the Company, Provider shall
assist the Company in preparation of marketing material, assist in the
recruitment and product training of agents and provide other marketing support
services. However, all decisions regarding the approval of marketing material
and the acceptance, appointment or termination of agents shall be made by the
Company.
(e) ACCOUNTING. Preparation and maintenance of financial
statements and reports, including all required GAAP and statutory financial
statements and all federal, state or local tax returns.
(f) FUNCTIONAL SUPPORT SERVICES. Provider shall provide (i)
actuarial services, including rate and profit share analysis, product
development, counseling on reserving requirements, work required for or in
support of rate and/or form submissions and actuarial certifications, (ii)
telecommunications services and electronic data processing services, facilities
and integration, including software programming and documentation, hardware
utilization related to provision of certain policy owner services and
administration, a system facilitating access to Provider's electronic data
processing system, (iii) legal services, including representation of Company in
the prosecution or defense of actions and in the negotiation and preparation of
contracts, agreements and agency documents, product development and drafting
<PAGE> 6
and filing of policies and forms, governmental relations and advising on
regulatory compliance and rendering opinions on various legal matters, (iv)
purchasing and employee relations services, and (v) consultation in negotiating
banking, accounting, and treasury arrangements.
CHARGES. Company agrees to reimburse Provider for
services and facilities provided by Provider to Company pursuant to this
Agreement. The charge to Company for such services and facilities shall include
all direct and directly allocable expenses, reasonably and equitably determined
to be attributable to Company by Provider, plus a reasonable charge for direct
overhead, the amount of such charge for overhead to be agreed upon by the
parties from time to time.
Subject to New York Insurance Department Regulation 33, the
bases for determining such charges to Company shall be those used by Provider
for internal cost distribution. Such bases shall be modified and adjusted by
mutual agreement where necessary or appropriate to reflect fairly and equitably
the actual incidence of cost incurred by Provider on behalf of Company.
Cost analyses will be made from time to time by Provider to
determine, as closely as possible, the actual cost of services rendered and
facilities made available to Company hereunder. Provider shall forward to
Company the information developed by these analyses, and such information shall
be used to develop bases for the distribution of expenses which more currently
reflect the actual incidence of cost incurred by Provider on behalf of Company.
Provider's determination of charges hereunder shall be
presented to Company, and if Company objects to any such determination, it shall
so advise Provider within thirty (30) days of receipt of notice of said
determination. Unless the parties can reconcile any such objection, they shall
agree to the selection of a firm of independent certified public accountants
which shall
<PAGE> 7
determine the charges properly allocable to Company and shall, within a
reasonable time, submit such determination, together with the basis therefor, in
writing to Provider and Company whereupon such determination shall be binding.
The expenses of such a determination by a firm of independent certified public
accountants shall be borne equally by Provider and Company.
PAYMENT. Provider shall submit to Company within thirty
(30) days of the end of each calendar quarter a written statement of the amount
estimated to be owed by Company for services and the use of facilities pursuant
to this Agreement in that calendar quarter, and Company shall pay to Provider
within fifteen (15) days following receipt of such written statement the amount
set forth in the statement.
Within thirty (30) days after the end of each calendar year,
Provider will submit to Company a detailed written statement of the charges due
from Company to Provider in that calendar year, including charges not included
in any previous statements, and any balance payable or to be refunded as shown
in such statement shall be paid or refunded within fifteen (15) days following
receipt of such written statement by Company.
ACCOUNTING RECORDS AND DOCUMENTS. Provider shall be
responsible for maintaining full and accurate accounts and records of all
services rendered and facilities used pursuant to this Agreement and such
additional information as Company may reasonably request for purposes of its
internal bookkeeping and accounting operations. Provider shall keep such
accounts and records insofar as they pertain to the computation of charges
hereunder available at its principal offices for audit, inspection and copying
by Company and persons authorized by it or any governmental agency having
jurisdiction over Company during all reasonable business hours.
<PAGE> 8
With respect to accounting and statistical records prepared by
Provider by reason of its performance under this Agreement, summaries of such
records shall be delivered to Company within thirty (30) days from the end of
the quarter to which the records pertain.
OTHER RECORDS AND DOCUMENTS. All books, records, and
files established and maintained by Provider by reason of its performance under
this Agreement which, absent this Agreement, would have been held by Company,
shall be deemed the property of Company, and shall be subject to examination at
all times by Company and persons authorized by it or any governmental agency
having jurisdiction over Company, and shall be delivered to Company at least
quarterly.
With respect to original documents other than those provided
for in Section 5 hereof which would otherwise be held by Company and which may
be obtained by Provider in performing under this Agreement, Provider shall
deliver such documents to Company within thirty (30) days of their receipt by
Provider except where continued custody of such original documents is necessary
to perform hereunder.
7. RIGHT TO CONTRACT WITH THIRD PARTIES. Nothing herein shall
be deemed to grant Provider an exclusive right to provide services to Company,
and Company retains the right to contract with any third party, affiliated or
unaffiliated, for the performance of services or for the use of facilities as
are available to or have been requested by Company pursuant to this Agreement.
8. CONTACT PERSON(S). Company and Provider each shall appoint
one or more individuals who shall serve as contact person(s) for the purpose of
carrying out this Agreement. Such contact person(s) shall be authorized to act
on behalf of their respective parties as to the matters pertaining to this
Agreement. Effective upon execution of this Agreement, the
<PAGE> 9
initial contact person(s) shall be those set forth in Appendix A. Each party
shall notify the other, in writing, as to the name, address and telephone number
of any replacement for any such designated contact person.
9. TERMINATION AND MODIFICATION. This Agreement shall remain
in effect until terminated by either Provider or Company upon giving thirty (30)
days or more advance written notice, provided that Company shall have the right
to elect to continue to receive data processing services and/or to continue to
utilize data processing facilities and related software for up to 180 days from
the date of such notice. Subject to the terms (including any limitations and
restrictions) of any applicable software or hardware licensing agreement then in
effect between Provider and any licensor, Provider shall, upon termination of
this Agreement, grant to Company a perpetual license, without payment of any
fee, in any electronic data processing software developed or used by Provider in
connection with the services provided to Company hereunder if such software is
not commercially available and is necessary, in Company's reasonable judgment,
for Company to perform subsequent to termination the functions provided by
Provider hereunder. Upon termination, Provider shall promptly deliver to Company
all books and records that are, or are deemed by this Agreement to be, the
property of Company.
10. SETTLEMENT ON COMPLETE TERMINATION. No later than sixty
(60) days after the effective date of termination of this Agreement, Provider
shall deliver to Company a detailed written statement for all charges incurred
and not included in any previous statement to the effective date of termination.
The amount owed or to be refunded hereunder shall be due and payable within
fifteen (15) days of receipt of such statement.
11. ASSIGNMENT. This Agreement and any rights pursuant hereto
shall not be assignable by either party hereto, except as set forth herein or by
operation of law. Except as
<PAGE> 10
and to the extent specifically provided in this Agreement, nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties hereto, or their respective legal successors, any rights, remedies,
obligations or liabilities, or to relieve any person other than the parties
hereto, or their respective legal successors, from any obligations or
liabilities that would otherwise be applicable. The representations, warranties,
covenants and agreements contained in this Agreement shall be binding upon,
extend to and inure to the benefit of the parties hereto, their, and each of
their, successors and assigns respectively.
12. GOVERNING LAW; SERVICE OF SUIT; FORUM SELECTION. This
Agreement shall be governed by and construed and enforced in accordance with the
internal laws of the State of New York applicable to contracts made and to be
performed in that State, without regard to principles of conflict of laws.
13. ARBITRATION. Any unresolved dispute or difference between
the parties arising out of or relating to this Agreement, or the breach thereof,
except as provided in Section 3, shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
and the Expedited Procedures thereof. The award rendered by the Arbitrator shall
be final and binding upon the parties, and judgment upon the award rendered by
the Arbitrator may be entered in any Court having jurisdiction thereof.
The arbitration shall take place in New York, New York.
14. NOTICE. All notices, statements or requests provided for
hereunder shall be deemed to have been duly given when delivered by hand to an
officer of the other party, or when deposited with the U.S. Postal Service, as
first class certified or registered mail, postage prepaid, overnight courier
service, telex or telecopier, addressed
<PAGE> 11
If to Provider to:
The Manufacturers Life Insurance Company
200 Bloor Street East
Toronto Ontario Canada M4W 1E5
Attention: Senior Vice President and General
Manager, U.S. Operations
If to Company to:
The Manufacturers Life Insurance Company of New York
International Corporate Center at Rye
555 Theodore Fremd Avenue
Rye, New York 10580
Attention: President
or to such other persons or places as each party may from time to time designate
by written notice sent as aforesaid.
15. ENTIRE AGREEMENT. This Agreement, together with such
amendments as may from time to time be executed in writing by the parties in
accordance with Section 1505 of the New York Insurance Law, constitutes the
entire agreement and understanding between the parties in respect of the
transactions contemplated hereby and supersedes the Prior Agreement, as well as
any and all other agreements, arrangements and understandings relating to the
subject matter hereof, including the Administrative Services Agreement effective
as of July 8, 1992 between the Company and North American Security Life
Insurance Company.
16. SECTION HEADINGS. Section headings contained herein are
for reference purposes only and shall not affect the meaning or interpretation
of this Agreement.
<PAGE> 12
17. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed in duplicate by their respective officers duly authorized so to do,
and their respective corporate seals to be affixed hereto, as of the date and
year first above written.
(Seal) THE MANUFACTURERS LIFE INSURANCE COMPANY
BY /s/ JOhn D. Richardson
-----------------------------------------------
John D. Richardson
Senior Vice President and General Manager U.S.
Operations
Attest: /s/ Kimberly S. Ciccarelli
-------------------------------
(Seal) THE MANUFACTURERS LIFE INSURANCE COMPANY
OF NEW YORK
BY /s/ Joseph M. Scott
--------------------------------------
Joseph M. Scott
President
<PAGE> 13
APPENDIX A
CONTACT PERSON(S) FOR PROVIDER
Theodore Kilkuskie, Vice President, U.S. Individual Insurance
Bruce Gordon, Vice President, U.S. Pensions
John D. DesPrez, Vice President, U.S. Annuities
CONTACT PERSON(S) FOR COMPANY
Joseph Scott, President
Stephanie Elliman, Vice President
