Filed Pursuant to Rule 497
File Number 33-62674
GREAT NORTHERN INSURED ANNUITY CORPORATION
SUPPLEMENT DATED DECEMBER 4, 1998
TO THE PROSPECTUS
DATED MAY 1, 1998
FOR THE GROUP AND INDIVIDUAL
MODIFIED GUARANTEED
ANNUITY CONTRACTS
Form A 3080-93-07
Form A 3085-93-07
Offered by
GREAT NORTHERN INSURED ANNUITY CORPORATION
6604 West Broad Street
Richmond, VA 23230
(804) 281-6000
The purpose of this Supplement is to make certain changes to your prospectus
regarding the market value adjustment. Please add or replace the following as
indicated:
On page 8 in the "Market Value Adjustment" subsection in the "Description of the
Contract" section:
Add the following sentence after the third sentence in the fourth
paragraph:
However, a negative market value adjustment will not exceed an amount
that would reduce the credited interest on a Guarantee Period below an
effective rate of 3% per year determined from the date we established
the relevant Guarantee Period to the date of the transfer or payment
(the "Negative Market Value Adjustment Floor").
On page 9 add the following paragraph after the seventh paragraph:
In the first example, assume the initial account value in the Guarantee
Period was $7,912.23 ($7,912.23 with interest credited at 5.0% for 4.8
years equals $10,000) and that no withdrawals or transfers have been
previously taken. The Negative Market Value Adjustment Floor requires
that the net payment (assuming no surrender charge) at least equal the
initial account value in the Guarantee Period with interest credited at
a rate of 3.0% per year ($7,912.23 with interest credited at 3% per
year for 4.8 years equals $9,118.23). The amount of the Negative Market
Value Adjustment Floor is the difference between this minimum required
net payment and the amount withdrawn ($9,118.23 - $10,000 = -$881.77).
In this example, the Negative Market Value Adjustment Floor does not
affect the amount of the market value adjustment.
On page 9 add the following sentence after the second sentence in the
eighth paragraph:
However, at the 7% and 8% levels the Negative Market Value Adjustment
Floor would apply and the amount of the market value adjustment would
be limited to -$881.77.
<PAGE>
On page 28 delete the table and related footnotes contained in the Appendix and
replace it with the following:
Market Value Adjustments, Withdrawal Charges and Net Sub-Account
Values for a 10-year Sub-Account With a Guaranteed Interest
Rate of 5% Based on Interpolated Current Interest Rates of:
Guaranteed Rate New Rate
5.00% 3%
End 0f Sub- Market Minimum Net
Certificate Account Value Withdrawal 3% Guaranteed Sub-
Year Value Adjustment Charge Account Account
Value Value
1 10,500 1,984 735 10,300 11,749
2 11,025 1,834 662 10,609 12,197
3 11,576 1,668 579 10,927 12,666
4 12,155 1,487 486 11,255 13,156
5 12,763 1,288 383 11,593 13,668
6 13,401 1,072 268 11,941 14,204
7 14,071 836 141 12,299 14,766
8 14,775 579 0 12,668 15,354
9 15,513 301 0 13,048 15,815
10 16,289 0 0 13,439 16,289
Guaranteed Rate New Rate
5.00% 5%
End 0f Sub- Market Minimum Net
Certificate Account Value Withdrawal 3% Guaranteed Sub-
Year Value Adjustment Charge Account Account
Value Value
1 10,500 0 735 10,300 10,300
2 11,025 0 632 10,609 10,609
3 11,576 0 553 10,927 11,024
4 12,155 0 464 11,255 11,691
5 12,763 0 366 11,593 12,397
6 13,401 0 256 11,941 13,145
7 14,071 0 134 12,299 13,937
8 14,775 0 0 12,668 14,775
9 15,513 0 0 13,048 15,513
10 16,289 0 0 13,439 16,289
Guaranteed Rate New Rate
5.00% 7%
End 0f Sub- Market Minimum Net
Certificate Account Value Withdrawal 3% Guaranteed Sub-
Year Value Adjustment Charge Account Account
Value Value
1 10,500 -1,640 735 10,300 10,300
2 11,025 -1,475 632 10,609 10,609
3 11,576 -1,367 553 10,927 10,927
4 12,155 -1,242 464 11,255 11,255
5 12,763 -1,097 366 11,593 11,593
6 13,401 -930 256 11,941 12,215
7 14,071 -739 134 12,299 13,197
8 14,775 -522 0 12,668 14,252
9 15,513 -277 0 13,048 15,236
10 16,289 0 0 13,439 16,289
<PAGE>
The formulas used in determining the amounts shown in the above table are as
follows:
<TABLE>
<S> <C>
(1) Market Value Adjustment Factor (MVA) = (1+ Guaranteed Interest Rate) n/365 - 1
----------------------------------------
1 + Current Interest Rate
(2) Maximum Free Withdrawal Amount (MFW) = Prior Year's Interest.
(3) Market Value Adjustment = (Sub-Account Value - MFW) x MVA.
(4) Withdrawal Charge = (Sub-Account Value - MFW) x Withdrawal Charge Percent].
(5) [Minimum Guarantee at 3% (MG3) of purchase payment = Purchase
Payment x (1.03)^(n/365).]
(6) Net Sub-Account Value = Maximum of {[(Sub-Account Value - MFW) x
(1+ MVA-Withdrawal Charge Percent)] + MFW].} or MG3.
</TABLE>
PLEASE KEEP THIS SUPPLEMENT WITH YOUR PROSPECTUS
