GREAT NORTHERN INSURED ANNUITY CORPORATION
GNA VARIABLE INVESTMENT ACCOUNT
POST SUBSTITUTION
SUPPLEMENT DATED DECEMBER 12, 1997
TO
PROSPECTUS DATED MAY 1, 1997
Great Northern Insured Annuity Corporation ("GNA") made the following
substitutions of shares held by investment subdivisions of the GNA Variable
Investment Account (the "Account"):
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Before the Substitution After the Substitution
Shares of Adjustable Rate Portfolio - Shares of Income Fund -
GNA Variable Series Trust GE Investments Funds, Inc.
Shares of Government Portfolio - Shares of Income Fund -
GNA Variable Series Trust GE Investments Funds, Inc.
Shares of Fixed Income Portfolio - Shares of Income Fund
Variable Investment Trust GE Investments Funds, Inc.
Shares of Growth Portfolio - Shares of Premier Growth Equity Fund -
GNA Variable Series Trust GE Investments Funds, Inc.
Shares of Value Portfolio - Shares of Value Equity Fund - GNA
Variable Series Trust GE Investments Funds, Inc.
Shares of International Equity Portfolio - Shares of International
Equity Fund Variable Investment Trust GE Investments Funds, Inc.
Shares of U.S. Equity Portfolio - Shares of U.S. Equity Fund -
Variable Investment Trust GE Investments Funds, Inc.
Shares of Money Market Portfolio - Shares of Money Market Fund
Variable Investment Trust GE Investments Funds, Inc.
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The foregoing substitutions were carried out pursuant to an order of
the Securities and Exchange Commission issued on December 11, 1997, with the
approval of any necessary department of insurance. The effect of such a share
substitution was to replace certain portfolios of GNA Variable Series Trust and
Variable Investment Trust with those of GE Investments Funds, Inc. as investment
options under the Contracts described in your May 1, 1997, prospectus.
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The investment objectives of the substituted funds are as follows:
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------------------------------------------- ---------------------------------------------------------------
Income Fund - Seeks to provide maximum income consistent with prudent
GE Investments Funds, Inc. investment management and preservation of capital by
investing primarily in income-bearing debt securities and
other income-bearing instruments.
------------------------------------------- ---------------------------------------------------------------
Premier Growth Equity Fund - Seeks to provide long-term growth of capital as well as
GE Investments Funds, Inc. future (rather than current) income. The portfolio seeks to
achieve its objective by investing primarily in
growth-oriented equity securities.
------------------------------------------- ---------------------------------------------------------------
Value Equity Fund - Seeks to provide long-term growth of capital. The portfolio
GE Investments Funds, Inc. seeks to achieve this objective by investing primarily in
common stock and other equity
securities that are
under-valued by the market at
the time of purchase and offer
above-average potential for
capital growth.
------------------------------------------- ---------------------------------------------------------------
International Equity Fund - Seeks to provide long-term growth of capital. The portfolio
GE Investments Funds, Inc. seeks to achieve this objective by investing primarily in
foreign equity and equity-related securities.
------------------------------------------- ---------------------------------------------------------------
U.S. Equity Fund - Seeks to provide long-term growth of capital. The portfolio
GE Investments Funds, Inc. seeks to achieve this objective by investing primarily in
equity securities of U.S. companies.
------------------------------------------- ---------------------------------------------------------------
Money Market Fund - Seeks to provide the highest level of current income as is
GE Investments Funds, Inc. consistent with high liquidity and safety of principal by
investing in various types of good quality money market
securities.
------------------------------------------- ---------------------------------------------------------------
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Each participant affected by the substitution has been sent a written
notice informing them that the substitutions were carried out and that they may
make one transfer of all amounts under a Certificate invested in any one of the
affected variable sub-accounts to another variable sub-account before January
16, 1998, without such transfer counting as one of the six free transfers
permitted in each certificate year. GNA will not exercise any rights reserved
under any Certificate to impose additional restrictions on transfers relating to
the variable Sub-accounts until at least thirty (30) days after the
substitutions.
Because the substitution resulted in the GE Investments Funds, Inc. portfolios
replacing all of the GNA Variable Series Trust and Variable Investment Trust
portfolios as described above, all references to the GNA Variable Series Trust
and/or any of its portfolios and the Variable Investment Trust and/or any of its
portfolios are hereby deleted and replaced with the GE Investments Funds, Inc.
and/or its portfolios.
<PAGE>
Accordingly, the third paragraph on the cover of the prospectus is deleted and
replaced with the following:
The assets of each Sub-account are invested in shares of GE Investments
Funds, Inc., a mutual fund with six investment portfolios available under the
Contract (the Money Market Fund, the International Equity Fund, the Value Equity
Fund, the Income Fund, the U.S. Equity Fund, and the Premier Growth Equity
Fund)(see the accompanying Prospectus of the Fund). Fixed Certificate Values may
be accumulated under Fixed Guarantee Periods for a specified number of years
ranging from one to ten.
The first paragraph of Investment Options subsection is deleted and replaced
with the following:
Purchase payments may be allocated among the sixteen investment options
currently available under the Contract: six Variable Sub-accounts and ten Fixed
Guarantee Periods. The Variable Sub-accounts invest in shares of a corresponding
Portfolio: the Money Market Fund, the International Equity Fund, the Value
Equity Fund, the Income Fund, the U.S. Equity Fund, and the Premier Growth
Equity Fund of the GE Investments Funds, Inc. (see the accompanying Prospectus
of the Fund).
The table under Portfolio Annual Expenses is deleted and replaced by the
following:
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Total Annual Expenses
Portfolio Management Fees Other Expenses
Money Market Fund .10% .05% .15%
International Equity Fund 1.00% .50% 1.50%
Value Equity Fund .65% .26% .91%
Income Fund .50% .25% .75%
U.S. Equity Fund .55% .25% .80%
Premier Growth Equity Fund* .65% .16% .81%
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* This portfolio had not yet commenced operations as of December 31, 1996.
Therefore, the fees and expenses for this portfolio are estimates. Actual
expenses may be greater or less than those shown.
<PAGE>
The table in the Example subsection is deleted and replaced with the following:
A Participant would pay the following expenses on a $1,000 investment, assuming
5% annual return on assets, if the Participant:
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surrendered his or her Certificate at annuitized or did not surrender his
the end of the applicable or her Certificate at the end of the
period: applicable
period:
-------------------------------------- -------------------------------------
Portfolio 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10 Year
--------- ---- ----- ----- ----- ----- ----- ---- ----
Money Market Fund $61 $86 $105 $191 $16 $51 $88 $191
International Equity Fund $75 $127 $173 $328 $30 $91 $156 $328
Value Equity Fund $69 $110 $144 $270 $24 $74 $126 $270
Income Fund $67 $105 $136 $254 $22 $69 $118 $254
U.S. Equity Fund $68 $106 $139 $259 $23 $71 $121 $259
Premier Growth Equity Fund $68 $107 $139 $260 $23 $71 $121 $260
</TABLE>
The first sentence of the third paragraph of the GNA Variable Investment Account
subsection is deleted and replaced with the following:
There are currently six Variable Sub-accounts within the Separate Account
available under the Contracts: the Money Market Sub-account, the International
Equity Sub-account, the Value Equity Sub-account, the Income Sub-account, the
U.S. Equity Sub-account, and the Premier Growth Sub-account.
The first two paragraphs of THE FUNDS section are deleted and replaced with the
following:
The assets of each Variable Sub-account of the Separate Account are invested in
shares of a corresponding Portfolio: the Money Market Fund, the International
Equity Fund, the Value Equity Fund, the Income Fund, the U.S. Equity Fund, and
the Premier Growth Equity Fund of the GE Investments Funds, Inc. GE Investments
Funds, Inc. 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.
The investment adviser of GE Investments Funds, Inc. is GE Investment Management
Incorporated ("GEIM"), a wholly-owned subsidiary of General Electric Company
("GE"). Pursuant to its investment advisory agreements and subject to its board
of directors, GEIM has retained NWQ Investment Management Company ("NWQ") as the
investment sub-adviser to provide day-to-day portfolio management to the Value
Equity Fund.
<PAGE>
The following investment objective of each portfolio is added to the third
paragraph of THE FUND section:
The Income Fund. The investment objective of the Income Fund is to provide
maximum income consistent with prudent investment management and preservation of
capital by investing primarily in income-bearing debt securities and other
income-bearing instruments.
The Premier Growth Equity Fund. The investment objective of the Premier Growth
Equity Fund is to provide long-term growth of capital as well as future (rather
than current) income. The portfolio seeks to achieve its objective by investing
primarily in growth-oriented equity securities.
The Value Equity Fund. The investment objective of the Value Equity Fund is to
provide long-term growth of capital. The portfolio seeks to achieve this
objective by investing primarily in common stock and other equity securities
that are under-valued by the market at the time of purchase and offer
above-average potential for capital growth.
The International Equity Fund. The investment objective of the International
Equity Fund is to provide long-term growth of capital. The portfolio seeks to
achieve this objective by investing primarily in foreign equity and
equity-related securities.
The U.S. Equity Fund. The investment objective of the U.S. Equity Fund is to
provide long-term growth of capital. The portfolio seeks to achieve this
objective by investing primarily in equity securities of U.S. companies.
Money Market Fund. The investment objective of the Money Market Fund is to
provide the highest level of current income as is consistent with high liquidity
and safety of principal by investing in various types of good quality money
market securities.
This supplement should be retained with the prospectus
for future reference.
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