GENERAL AMERICAN LIFE INSURANCE COMPANY
PROSPECTUS SUPPLEMENT
Dated August 12, 1999
This page supplements General American Life Insurance Company's variable product
prospectuses as set forth below. Please keep this supplement with your
prospectus for future reference.
On August 10, 1999, General American Life Insurance Company consented to an
Order of Administrative Supervision with the Missouri Department of Insurance.
We had advised the Department of our inability to meet substantial demands for
surrenders arising from our institutional funding agreement business without
jeopardizing interest of our other policyholders. Under the Order, we are
allowed to continue our normal course of business.
In 1993, we formed a marketing relationship with ARM Financial to offer a highly
specialized portfolio of funding agreements to institutional investors. We ceded
50% of the business to an ARM subsidiary. In June of this year, ARM put itself
up for sale, announcing that it was de-emphasizing its involvement in the
institutional business. This led to our recapture of the ARM portion of the
business, approximately $3.4 billion in assets and related liabilities. Moody's
Investor Services reviewed these events and lowered our financial strength
rating from A2 to A3. A significant number of the institutional investors
reacted to Moody's action by recalling their assets. While we are fully
capitalized to meet these obligations, the unexpected volume of recalls created
severe pressure on our liquidity position and the ability to convert the assets
within the tight time frame required. Defaults on the institutional business
caused the rating agencies to rate our company below investment grade.
We are a well-capitalized company and have adequate assets to meet all of our
obligations, including all obligations arising under your contract. The Order is
designed to allow us to respond to the request of our funding agreement
customers, making certain all obligations are honored.
