As filed with the Securities and Exchange Commission on April 26, 1996
Registration Nos. 811-8288
33-74092
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No.
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Post-Effective Amendment No. 3 X
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and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 3 X
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GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT E
(Exact Name of Registrant)
GREAT AMERICAN RESERVE INSURANCE COMPANY
(Name of Depositor)
11815 N. Pennsylvania Street
Carmel, Indiana 46032
(Address of Depositor's Principal Executive Offices)
(800) 888-4918
(Depositor's Telephone Number, including Area Code)
Karl W. Kindig, Esq.
Great American Reserve Insurance Company
11815 N. Pennsylvania Street
Carmel, Indiana 46032
(Name and Address of Agent for Service)
With a copy to:
Michael Berenson, Esq.
Jorden, Burt & Berenson
Suite 400 East
1025 Thomas Jefferson Street, N.W.
Washington, D.C. 20007-0805
Approximate Date of Proposed Public Offering: As soon as practicable following
the effective date of this Registration Statement.
It is proposed that this filing will become effective (check
appropriate space): immediately upon filing pursuant to paragraph
(b) of Rule 485
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X on May 1, 1996 pursuant to paragraph (b) of Rule 485
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60 days after filing pursuant to paragraph (a) (1) of Rule 485
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on [date] pursuant to paragraph (a) (1) of Rule 485
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75 days after filing pursuant to paragraph (a) (2) of Rule 485
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on [date] pursuant to paragraph (a) (2) of Rule 485
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If appropriate, check the following box:
this post-effective amendment designates a new effective date for
------
a previously filed post-effective amendment
Pursuant to the provisions of Rule 24f-2(a)(1) under the Investment Company Act
of 1940, Registrant has registered an indefinite number or amount of its
securities under the Securities Act of 1933 and filed a Rule 24f-2 notice for
its recent fiscal year on February 23, 1996. <PAGE>
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT E
FORM N-4
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
Under The Securities Act of 1933
Form N-4
Item No . PART A - Prospectus Caption
- --------- ------------------
1. Cover Page........................ Cover Page
2. Definitions....................... Definitions
3. Synopsis or Highlights............ Summary
4. Condensed Financial Information... Condensed Financial Information
5. General Description of Registrant, Great American Reserve, Variable
Depositor and Portfolio Companies. Account, and Investment Options
6. Deductions and Expense............ Contract Charges
7. General Description of Variable... The Contracts
Annuity Contracts
8. Annuity Period ................... The Contracts
Section B. Settlement Provisions
9. Death Benefit..................... The Contracts
Section B. Settlement Provisions:
Death Benefit on or After
Maturity Date
10. Purchase and Contract Values...... Great American Reserve, Variable
Account, and Investment Options
The Contracts
Section A. Accumulation Provisions
11. Redemptions....................... The Contracts
Section B. Settlement Provisions
12. Taxes............................. Federal Tax Matters
13. Legal Proceedings................. Not Applicable
14. Table of Contents of the Statement Table of Contents of the Statement
of Additional Information......... of Additional Information
<PAGE>
Form N-4
Item No.
- --------
PART B - Statement of Additional Information
-----------------------------------
15. Cover Page........................ Statement of Additional Information
Cover Page
16. Table of Contents................. Table of Contents
17. General Information and History... General Information and History
18. Services.......................... Not Applicable
19. Purchase of Securities............ Not Applicable
Being Offered
20. Underwriters...................... Distribution
21. Calculation of Performance Data... Calculation of Yield Quotations,
Calculation of Total Return
Quotations, and Other Performance
Data
22. Annuity Payments.................. Not Applicable
23. Financial Statements.............. Financial Statements
PART C
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C of this registration statement.
<PAGE>
PART A
<PAGE>
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT E
INDIVIDUAL & GROUP VARIABLE DEFERRED ANNUITY CONTRACTS
Offered by
Great American Reserve Insurance Company
Administrative Office:
11815 N. Pennsylvania Street, Carmel, IN 46032
(317) 817-3700
The Individual and Group Flexible Purchase Payment Variable Deferred
Annuity Contracts (the "Contracts") described by this Prospectus are offered by
Great American Reserve Insurance Company ("Great American Reserve"). The
Contracts are designed for use in retirement planning. Purchase Payments
received with respect to the Contracts (subject to certain deductions) are
deposited by Great American Reserve in the separate investment account entitled
Great American Reserve Variable Annuity Account E (the "Variable Account") for
further investment or in the general account of Great American Reserve.
The Variable Account is a unit investment trust separate account. The
Variable Account consists of 24 sub-accounts ("Sub-accounts"), each of which
invests in shares of the eligible open-end management investment companies
("Funds"). The Sub-accounts invest in shares of the following Funds: the Conseco
Series Trust Asset Allocation, Common Stock, Corporate Bond, Government
Securities, and Money Market Portfolios; The Alger American Fund Growth,
Leveraged AllCap, MidCap Growth, and Small Capitalization Portfolios; the Berger
IPT - 100, Berger IPT - Growth and Income, and Berger IPT - Small Company Growth
Funds; The Dreyfus Socially Responsible Growth Fund, Inc.; the Dreyfus Stock
Index Fund; the Federated Insurance Series High Income Bond, International
Equity, and Utility Funds; the Janus Aspen Series Aggressive Growth, Growth, and
Worldwide Growth Portfolios; and the Van Eck Worldwide Insurance Trust Gold and
Natural Resources, Worldwide Bond, Worldwide Emerging Markets, and Worldwide
Hard Assets Funds. Six of these Funds, including The Alger American Fund Growth
and MidCap Growth Portfolios; the Berger IPT - 100, Berger IPT - Growth and
Income, and Berger IPT - Small Company Growth Funds; and the Van Eck Worldwide
Insurance Trust Worldwide Emerging Markets Fund, will be available on May 1,
1996. The availability of such Funds may be delayed beyond May 1, 1996, pending
receipt of state approvals. Before investing in any of the Sub-accounts,
carefully review the prospectuses of the eligible Funds.
This Prospectus contains information regarding the Contracts which
investors should know before investing. It should be read and retained for
future reference. A Statement of Additional Information, incorporated herein by
reference and dated May 1, 1996, has been filed with the Securities and Exchange
Commission ("SEC"). Investors can obtain a free copy by contacting Great
American Reserve at the address or telephone number given above. The Table of
Contents of the Statement of Additional Information appears in this Prospectus
on page 36. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED ON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Investors should read and retain this Prospectus for future reference.
The date of this Prospectus is May 1, 1996.
<PAGE>
GREAT AMERICAN RESERVE 1995 ACCOUNT E
TABLE OF CONTENTS
Page
Definitions .............................................................4
Summary .............................................................5
Condensed Financial Information.............................................11
Great American Reserve, Variable Account,
and the Investment Options
A. Great American Reserve..............................................14
B. Variable Account....................................................14
C. Investment Options..................................................15
Voting Rights ............................................................17
The Contracts
A. Accumulation Provisions
Purchase Payments...................................................18
Allocation of Purchase Payments.....................................18
Accumulation Units..................................................18
Value of an Individual Account......................................18
Net Investment Factor for Each
Valuation Period................................................19
Information on the Fixed Account....................................19
Transfer Among Investment Options...................................20
Dollar Cost Averaging...............................................21
Rebalancing.........................................................21
Sweeps ............................................................21
Withdrawals.........................................................21
Systematic Withdrawal Plan..........................................22
Check Writing.......................................................22
Loans ............................................................22
Contract Charges
Withdrawal Charge...............................................23
Administrative Charges..........................................24
Mortality and Expense Risk
Charge......................................................24
Reduction or Elimination
of Contract Charges.........................................25
Premium Taxes...................................................25
Other Charges...................................................25
Death Benefit Before Maturity Date..................................25
Options Upon Termination of
Participation in the Plan
(For Group Contracts Only)......................................25
Restrictions Under Optional
Retirement Programs.............................................26
Restrictions Under Section 403(b)
Plans...........................................................26
B. Settlement Provisions
Optional Annuity Period Elections...................................26
Annuity Options.....................................................27
Proceeds Applied to Annuity Option..................................28
Determination of Amount of the First
Monthly Variable Annuity Payment................................28
Value of an Annuity Unit............................................28
Amounts of Subsequent Monthly
Variable Annuity Payments.......................................29
Transfers After Maturity Date.......................................29
Death Benefit on or After
Maturity Date...................................................30
C. Other Contract Provisions
Ten-Day Right to Review.............................................30
Ownership...........................................................30
Modification........................................................30
Company Approval....................................................30
Federal Tax Matters
A. General ............................................................31
B. Status of Contracts.................................................31
Non-Qualified Contracts.........................................32
Qualified Contracts.............................................33
C. Taxation of Distributions...........................................34
D. Other Considerations................................................35
General Matters
Performance Information.................................................36
Distribution of Contracts...............................................36
Contract Owner Inquiries................................................36
Legal Proceedings.......................................................36
Other Information.......................................................36
Table of Contents of the Statement of
Additional Information..................................................36
<PAGE>
DEFINITIONS
Accumulation Unit: An accounting unit of measure used to calculate the
values before the Maturity Date.
Annuitant: The named individual who receives annuity payments.
Annuity: A series of payments for life; or for life with a minimum number
of payments certain; or for a certain period; or for a certain payment amount.
Annuity Unit: An accounting unit of measure used to calculate the amount of
annuity payments.
Contract Value: The total of your Individual Account values held under the
Contract in each investment option of the Variable Account plus the Fixed
Account.
Contract Year: A period of 12 months commencing with the effective date of
your contract.
Fixed Account: The general account of Great American Reserve in which you
may choose to allocate purchase payments and Contract Values. It provides
guaranteed values and periodically adjusted interest rates. Great American
Reserve: Great American Reserve Insurance Company. Also referred to as "we" or
"us."
Individual Account: The record established by Great American Reserve which
represents a Contract Owner's interest in an investment option prior to the
Maturity Date.
Investment Options: The investment choices available to Contract Owners.
Maturity Date: The date on which annuity payments of the Contract begin.
Owner(s) or Contract Owner(s): The person, persons (co-owner) or entity
entitled to all of the ownership rights under the Contract. Also referred to as
"you" or "your."
Participant: (For group contracts only) Any eligible person participating
in a plan and for whom an Individual Account is established under a Contract.
Plan: A voluntary program of an employer that qualifies for special tax
treatment.
Purchase Payments: Premium payments made to Great American Reserve under
the terms of the Contract.
Valuation Period: The period of time from the end of one business day of
the New York Stock Exchange to the end of the next day or to the same time on
any day in which there are sufficient purchases or redemptions in Accumulation
Units that the current net asset value of those units might be materially
affected by changes in the value of the portfolio securities.
Variable Account (Great American Reserve Variable Annuity Account E): A
separate account established pursuant to the insurance laws of Texas. Assets
attributable to the variable portions of contracts are segregated from other
assets of Great American Reserve and are held in the Great American Reserve
Variable Annuity Account E.
Variable Annuity: An annuity which provides retirement payments which vary
in dollar amount with investment results.
<PAGE>
SUMMARY
The Contracts. The Contracts offered by this Prospectus are tax-deferred
flexible purchase payment individual or group variable annuity contracts. The
Contracts provide 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 set forth under the caption "Information on the Fixed Account," this
Prospectus describes only the variable portion of the Contracts.
Retirement Plans. The Contracts may be issued pursuant to either
non-qualified retirement plans or plans qualifying for special income tax
treatment under the Internal Revenue Code (the "Code"), such as individual
retirement annuities ("IRAs"), pension and profit sharing plans, tax-sheltered
annuities ("TSAs"), and state and local government deferred compensation plans
(see "Qualified Contracts").
Purchase Payments. The Contracts permit Purchase Payments to be made on a
flexible purchase payment basis. For TSAs, the minimum initial payment and
amount for each subsequent payment is $50 per month. For IRAs, the minimum
initial investment is $2,000 and the minimum amount of each additional payment
is $50. For non-qualified Contracts, the minimum initial investment is $5,000
and the minimum amount of each additional lump sum payment is $2,000 (or $200
per month). Purchase Payments may be made at any time, except that if a Purchase
Payment exceeds $250,000, it will be accepted only with the prior approval of
Great American Reserve (see "Purchase Payments").
Investment Options. Purchase Payments may be allocated among the 25
investment options available under the Contracts: 24 variable investment options
and one fixed option. The 24 variable investment options consist of Sub-accounts
which invest in shares of the following Funds: the Conseco Series Trust Asset
Allocation, Common Stock, Corporate Bond, Government Securities, and Money
Market Portfolios; The Alger American Fund Growth, Leveraged AllCap, MidCap
Growth, and Small Capitalization Portfolios; the Berger IPT - 100, Berger IPT
Growth and Income, and Berger IPT - Small Company Growth Funds; The Dreyfus
Socially Responsible Growth Fund, Inc.; the Dreyfus Stock Index Fund; the
Federated Insurance Series High Income Bond, International Equity, and Utility
Funds; the Janus Aspen Series Aggressive Growth, Growth, and Worldwide Growth
Portfolios; and the Van Eck Worldwide Insurance Trust Gold and Natural
Resources, Worldwide Bond, Worldwide Emerging Markets, and Worldwide Hard Assets
Funds. (see the accompanying prospectuses of the eligible Funds). The portion of
the Contract Value in the Variable Account will reflect the investment
performance of the investment options selected (see "Variable Account").
Purchase Payments may also be allocated to the Fixed Account (see "Information
on the Fixed Account"). Subject to certain regulatory limitations, Great
American Reserve 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 option without charge. In addition,
amounts may be transferred prior to the Maturity Date from the Fixed Account
investment option to the Variable Account investment options, subject to a limit
of 20 percent of the Fixed Account value per any six-month period (see
"Information on the Fixed Account"). 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. Great American Reserve may impose
certain additional limitations on transfers (see "Transfers Among Investment
Options"and "Transfers After Maturity Date"). Transfer privileges may also be
used under special services offered by Great American Reserve to dollar cost
average an investment in the contract (see "Dollar Cost Averaging"), transfer
earnings from the Fixed Account to another investment option (see "Sweeps"), or
rebalance an investment option on a periodic basis (see "Rebalancing").
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 Individual Account must <PAGE> be at least
$250 or, if less, the entire balance of the Individual Account. If a partial
withdrawal plus any applicable withdrawal charge would reduce the Contract Value
to less than $500, the withdrawal request may be treated as a request to
withdraw the entire Contract Value (see "Withdrawals"). A withdrawal charge and
an administrative fee may be imposed (see "Withdrawal Charge"). A withdrawal may
also be subject to a penalty tax (see "Federal Tax Matters"). Withdrawal
privileges may also be exercised pursuant to Great American Reserve's systematic
withdrawal plan (see "Systematic Withdrawal Plan") and check writing privileges
(see "Check Writing").
Loans. Your contract may contain a loan provision issued in connection with
certain qualified plans. Owners of such contracts may be eligible to obtain
loans using the contract as the only security for the loan (see "Loans").
Death Benefit Before Maturity Date. Generally, if the Annuitant dies before
the Maturity Date, Great American Reserve will pay to the beneficiary the
minimum death benefit less any outstanding loans (see "Death Benefit Before
Maturity Date").
Annuity Payments. Great American Reserve 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 "Settlement Provisions").
Ten-Day Review. Within 10 days of receipt of a Contract, a Contract Owner
may cancel the Contract by returning it to Great American Reserve (see "Ten-Day
Right to Review").
Charges and Deductions. The following table and examples are designed to
assist Contract Owners in understanding the various expenses that Contract
Owners bear directly and indirectly. The table reflects expenses of the Variable
Account and the underlying Portfolios. The items listed under "Contract Owner
Transaction Expenses"and "Variable Account Annual Expenses" are completely
described in this Prospectus (see "Contract Charges"). The items listed under
"Annual Fund Expenses After Reimbursement" are described in detail in the
accompanying prospectuses of the eligible Funds to which reference should be
made.
Contract Owner Transaction Expenses (1)
Sales Charge Imposed on Purchases............. None
Exchange Fee.................................. None
Surrender Fee................................. None
Deferred Sales Load (as a percentage
of purchase payments) (2)
First and Second Year................. 9%
Third Year............................ 8%
Fourth Year........................... 7%
Fifth Year............................ 5%
Sixth Year............................ 3%
Seventh Year or More.................. 0%
Annual Administrative Fee (2)................ $30
Variable Account Annual Expenses (as a
percentage of average account value)
Mortality and Expense Risk Fees............... 1.25%
Administrative Charge......................... 0.15%
Total Annual Expenses of Variable
Account (2)................................... 1.40%
(1) Premium taxes are not shown. Any premium tax due will be deducted from
Purchase Payments or from Individual Account values at the Maturity Date or
at such other time as the tax becomes due. The current range of premium
taxes in jurisdictions in which the Contracts are made available is from 0
percent to 3.5 percent.
(2) Great American Reserve may reduce or eliminate the sales, administrative,
or other expenses with certain contracts in cases when Great American
Reserve expects to incur lower sales and administrative expenses or perform
fewer services (see "Reduction or Elimination of Contract Charges"). Great
American Reserve will waive the annual administrative fee if the Owner's
Individual Account value is $25,000 or greater.
<PAGE>
<TABLE>
ANNUAL FUND EXPENSES AFTER REIMBURSEMENT(1) (AS A PERCENTAGE OF AVERAGE NET ASSETS)
<CAPTION>
Management Other Total
Fees Expenses Expenses
<S> <C> <C> <C>
Conseco Series Trust
Asset Allocation Portfolio (3)................... .55% .20% .75%(2)
Common Stock Portfolio (3)...................... .60% .20% .80%(2)
Corporate Bond Portfolio ........................ .50% .20% .70%(2)
Government Securities Portfolio.................. .50% .20% .70%(2)
Money Market Portfolio (3)...................... .25% .20% .45%(2)
The Alger American Fund
Alger American Leveraged AllCap Portfolio........ .85% .71%(4) 1.56%
Alger American Growth Portfolio.................. .75% .10% .85%
Alger American MidCap Growth Portfolio........... .80% .10% .90%
Alger American Small Capitalization Portfolio.... .85% .07% .92%
Berger Institutional Products Trust
Berger IPT - 100 Fund............................ .75% .22%(5) .97%(6)
Berger IPT - Growth and Income Fund.............. .75% .22%(5) .97%(6)
Berger IPT - Small Company Growth Fund........... .90% .22%(5) 1.12%(6)
The Dreyfus Socially Responsible Growth Fund, Inc.... .69% .58% 1.27%(7)
Dreyfus Stock Index Fund............................. .245% .155% .40%(8)
Federated Insurance Series
Federated High Income Bond Fund II............... .00% .80% .80%(9)
Federated International Equity Fund II........... .00% 1.25% 1.25%(9)
Federated Utility Fund II........................ .00% .85% .85%(9)
Janus Aspen Series
Aggressive Growth Portfolio...................... .75% .11% .86%(10)
Growth Portfolio................................. .65% .13% .78%(10)
Worldwide Growth Portfolio....................... .68% .22% .90%(10)
Van Eck Worldwide Insurance Trust
Gold and Natural Resources Fund.................. .75% .21% .96%
Worldwide Bond Fund.............................. .75% .23% .98%
Worldwide Emerging Markets Fund.................. 1.00% .40% 1.40%(11)
Worldwide Hard Assets Fund....................... 1.00% .40% 1.40%(11)
<FN>
(1) The Fund expenses shown above are assessed at the underlying Fund level and
are not direct charges against separate account assets or reductions from
Contract Values. These Fund expenses are taken into consideration in
computing each Fund's net asset value, which is the share price used to
calculate the Variable Account's unit value.
(2) Conseco Capital Management, Inc., the investment adviser of the Conseco
Series Trust, has voluntarily agreed to reimburse all expenses, including
management fees, in excess of the following percentage of the average
annual net assets of each listed Portfolio, so long as such reimbursement
would not result in a Portfolio's inability to qualify as a regulated
investment company under the Code: 0.75 percent for Asset Allocation; 0.80
percent for Common Stock; 0.70 percent for Corporate Bond and Government
Securities; and 0.45 percent for Money Market. The total percentage in the
above table is after reimbursement. In the absence of expense
reimbursement, the total fees and expenses in 1995 would have totaled: 0.87
percent for Asset Allocation; 0.80 percent for Common Stock; 0.74 percent
for Corporate Bond; 0.77 percent for Government Securities; 0.52 percent
for Money Market.
(3) Conseco Capital Management, Inc., since January 1, 1993, has voluntarily
waived its Management Fees in excess of the annual rates set forth above.
Absent such Fee waivers, the Management Fees would have totaled: 0.65
percent for Asset Allocation; 0.65 percent for Common Stock; and 0.50
percent for Money Market.
(4) The Alger American Leveraged AllCap Portfolio "Other Expenses" includes
0.06 percent of interest expense. Absent reimbursements to the Portfolio by
its manager, the amount of Other Expenses and Total Expenses would have
been 3.07 percent and 3.92 percent, respectively, for the Alger American
Leveraged AllCap Portfolio.
(5) Based on estimated expenses for the Funds' first year of operations.
(6) The Funds' investment adviser has agreed to waive its advisory fee to the
extent that normal operating expenses in any fiscal year of each of the
Berger IPT - 100 Fund and the Berger IPT - Growth and Income Fund exceed
1.00 percent and the normal operating expenses in any fiscal year of the
Berger IPT - Small Company Growth Fund exceed 1.15 percent of the
respective Funds' average daily net assets.
(7) The Dreyfus Corporation, the investment adviser of The Dreyfus Socially
Responsible Growth Fund, Inc., has voluntarily agreed to reimburse all or a
portion of its advisory fee to the extent that the total expenses of the
fund are in excess of 1.30 percent of the average annual net assets. In the
absence of expense reimbursement, the total fees and expenses in 1995 would
have totaled 0.42 percent.
(8) Mellon Equity Associates, the index manager of the Dreyfus Stock Index
Fund, and the Dreyfus Corporation have voluntarily agreed to reimburse all
or a portion of its advisory fee to the extent that the total expenses of
the fund are in excess of 0.40 percent of the average annual net assets. In
the absence of expense reimbursement, the total fees and expenses in 1995
would have totaled 1.33 percent.
(9) Federated Advisers, the investment adviser of the Federated Insurance
Series, has voluntarily agreed to reimburse all or a portion of its
advisory fee to the extent that the total expenses of the fund are in
excess of the following percentage of the average annual assets of each
listed Fund: 0.60 percent for High Income Bond; 1.00 percent for
International Equity; and 0.75 percent for Utility. In the absence of
expense reimbursement, the total fees and expenses in 1995 would have been:
4.20 percent for High Income Bond; 12.64 percent for International Equity;
and 3.09 percent for Utility.
(10) The expense figures shown are net of certain fee waivers or reductions from
Janus Capital Corporation, the investment adviser of the Janus Aspen
Series. Without such waivers or reductions, the total fees and expenses in
1995 would have totaled: 0.93 percent for Aggressive Growth; 0.98 percent
for Growth; and 1.09 percent for Worldwide Growth.
(11) Other expenses are based on estimated amounts for the Portfolio's current fiscal year.
</TABLE>
<PAGE>
<TABLE>
VARIABLE DEFERRED ANNUITY CONTRACT
Example 1-Assuming surrender of the contract at the end of the periods shown
(1):
You would pay the following expenses on a $1,000 investment, assuming a 5 percent annual return on assets:
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
Conseco Series Trust
Asset Allocation Portfolio......................... $108 $143 $166 $261
Common Stock Portfolio............................. 109 144 169 266
Corporate Bond Portfolio........................... 108 141 164 256
Government Securities Portfolio.................... 108 141 164 256
Money Market Portfolio............................. 105 133 151 230
The Alger American Fund
Alger American Leveraged AllCap Portfolio.......... 116 167 206 340
Alger American Growth Portfolio.................... 109 146 171 271
Alger American MidCap Growth Portfolio............. 110 147 174 276
Alger American Small Capitalization Portfolio...... 110 148 175 278
Berger Institutional Products Trust
Berger IPT - 100 Fund.............................. 110 149 177 283
Berger IPT - Growth and Income Fund................ 110 149 177 283
Berger IPT - Small Company Growth Fund............. 112 154 185 298
The Dreyfus Socially Responsible Growth Fund, Inc...... 113 158 192 312
Dreyfus Stock Index Fund............................... 105 132 148 225
Federated Insurance Series
Federated High Income Bond Fund II................. 109 144 169 266
Federated International Equity Fund II............. 113 158 191 310
Federated Utility Fund II.......................... 109 146 171 271
Janus Aspen Series
Aggressive Growth Portfolio........................ 109 146 172 272
Growth Portfolio................................... 108 143 168 264
Worldwide Growth Portfolio......................... 110 147 174 276
Van Eck Worldwide Insurance Trust
Gold and Natural Resources Fund.................... 110 149 177 282
Worldwide Bond Fund................................ 110 149 178 284
Worldwide Emerging Markets Fund.................... 115 162 199 325
Worldwide Hard Assets Fund......................... 115 162 199 325
(Continued)
<FN>
PLEASE REMEMBER THAT THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE EXPENSES AND THAT ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE SHOWN. SIMILARLY, THE 5 percent ANNUAL RATE OF RETURN IS NOT AN ESTIMATE
OR A GUARANTEE OF FUTURE INVESTMENT PERFORMANCE.
(1) This Contract is designed for retirement planning. Surrenders prior to the
Annuity Date are not consistent with the long-term purposes of the Contract
and the applicable tax laws.
The above table reflects estimates of expenses of the Variable Account and
the Funds. The standard table and examples assume the highest deductions
possible under a Contract, whether or not such deductions actually would be
made under such a Contract. Annual maintenance charges have been
approximated as a 16 basis point annual asset charge.
</TABLE>
<PAGE>
<TABLE>
VARIABLE DEFERRED ANNUITY CONTRACT
Example 2-Assuming annuitization of the contract at the end of the periods shown
(1): You would pay the following expenses on a $1,000 investment, assuming
a 5 percent annual return on assets:
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
Conseco Series Trust
Asset Allocation Portfolio......................... $108 $143 $122 $261
Common Stock Portfolio............................. 109 144 124 266
Corporate Bond Portfolio........................... 108 141 119 256
Government Securities Portfolio.................... 108 141 119 256
Money Market Portfolio............................. 105 133 107 230
The Alger American Fund
Alger American Leveraged AllCap Portfolio.......... 116 167 162 340
Alger American Growth Portfolio.................... 109 146 127 271
Alger American MidCap Growth Portfolio............. 110 147 129 276
Alger American Small Capitalization Portfolio...... 110 148 130 278
Berger Institutional Products Trust
Berger IPT - 100 Fund.............................. 110 149 133 283
Berger IPT - Growth and Income Fund................ 110 149 133 283
Berger IPT - Small Company Growth Fund............. 112 154 140 298
The Dreyfus Socially Responsible Growth Fund, Inc...... 113 158 148 312
Dreyfus Stock Index Fund............................... 105 132 104 225
Federated Insurance Series
Federated High Income Bond Fund II................. 109 144 124 266
Federated International Equity Fund II............. 113 158 147 310
Federated Utility Fund II.......................... 109 146 127 271
Janus Aspen Series
Aggressive Growth Portfolio........................ 109 146 127 272
Growth Portfolio................................... 108 143 123 264
Worldwide Growth Portfolio......................... 110 147 129 276
Van Eck Worldwide Insurance Trust
Gold and Natural Resources Fund.................... 110 149 132 282
Worldwide Bond Fund................................ 110 149 133 284
Worldwide Emerging Markets Fund.................... 115 162 154 325
Worldwide Hard Assets Fund......................... 115 162 154 325
(Continued)
<FN>
PLEASE REMEMBER THAT THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE EXPENSES AND THAT ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE SHOWN. SIMILARLY, THE 5 percent ANNUAL RATE OF RETURN IS NOT AN ESTIMATE
OR A GUARANTEE OF FUTURE INVESTMENT PERFORMANCE.
(1) This Contract is designed for retirement planning. Surrenders prior to the
Annuity Date are not consistent with the long-term purposes of the Contract
and the applicable tax laws.
The above table reflects estimates of expenses of the Variable Account and
the Funds. The standard table and examples assume the highest deductions
possible under a Contract, whether or not such deductions actually would be
made under such a Contract. Annual maintenance charges have been
approximated as a 16 basis point annual asset charge.
</TABLE>
<PAGE>
<TABLE>
VARIABLE DEFERRED ANNUITY CONTRACT-CONT.
Example 3-Assuming no surrender of the contract at the end of the periods shown
(1):
You would pay the following expenses on a $1,000 investment, assuming a 5 percent annual return on assets:
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
Conseco Series Trust
Asset Allocation Portfolio......................... $23 $71 $122 $261
Common Stock Portfolio............................. 24 73 124 266
Corporate Bond Portfolio........................... 23 70 119 256
Government Securities Portfolio.................... 23 70 119 256
Money Market Portfolio............................. 20 62 107 230
The Alger American Fund
Alger American Leveraged AllCap Portfolio.......... 31 95 162 340
Alger American Growth Portfolio.................... 24 74 127 271
Alger American MidCap Growth Portfolio............. 25 76 129 276
Alger American Small Capitalization Portfolio...... 25 76 130 278
Berger Institutional Products Trust
Berger IPT - 100 Fund.............................. 25 78 133 283
Berger IPT - Growth and Income Fund................ 25 78 133 283
Berger IPT - Small Company Growth Fund............. 27 82 140 298
The Dreyfus Socially Responsible Growth Fund, Inc...... 28 87 148 312
Dreyfus Stock Index Fund............................... 20 61 104 225
Federated Insurance Series
Federated High Income Bond Fund II................. 24 73 124 266
Federated International Equity Fund II............. 28 86 147 310
Federated Utility Fund II.......................... 24 74 127 271
Janus Aspen Series
Aggressive Growth Portfolio........................ 24 74 127 272
Growth Portfolio................................... 23 72 123 264
Worldwide Growth Portfolio......................... 25 76 129 276
Van Eck Worldwide Insurance Trust
Gold and Natural Resources Fund.................... 25 77 132 282
Worldwide Bond Fund................................ 25 78 133 284
Worldwide Emerging Markets Fund.................... 30 91 154 325
Worldwide Hard Assets Fund......................... 30 91 154 325
<FN>
PLEASE REMEMBER THAT THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE EXPENSES AND THAT ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE SHOWN. SIMILARLY, THE 5 percent ANNUAL RATE OF RETURN IS NOT AN ESTIMATE
OR A GUARANTEE OF FUTURE INVESTMENT PERFORMANCE.
(1) This Contract is designed for retirement planning. Surrenders prior to the
Annuity Date are not consistent with the long-term purposes of the Contract
and the applicable tax laws.
The above table reflects estimates of expenses of the Variable Account and
the Funds. The standard table and examples assume the highest deductions
possible under a Contract, whether or not such deductions actually would be
made under such a Contract. Annual maintenance charges have been
approximated as a 16 basis point annual asset charge.
</TABLE>
<PAGE>
<TABLE>
CONDENSED FINANCIAL INFORMATION
The tables below provide per unit information about the financial history
of each Sub-account. No per-unit information is provided with respect to the
Sub-accounts investing in The Alger American Fund Growth and Midcap Growth
Portfolios, the Berger IPT - 100, Berger IPT - Growth and Income, and Berger IPT
- - Small Company Growth Funds; or the Van Eck Worldwide Insurance Trust Worldwide
Emerging Markets Fund because such Funds were not available as of December 31,
1995. <CAPTION>
1995 1994
<S> <C> <C>
CONSECO SERIES TRUST
Asset Allocation (a)
Accumulation unit value at beginning of period $1.035 $1.000
Accumulation unit value at end of period $1.342 $1.035
Percentage change in accumulation unit value 29.67% 3.52%
Number of accumulation units outstanding at end of period 461,876 21,037
Common Stock (a)
Accumulation unit value at beginning of period $1.078 $1.000
Accumulation unit value at end of period $1.449 $1.078
Percentage change in accumulation unit value 34.42% 7.79%
Number of accumulation units outstanding at end of period 1,009,305 41,601
Corporate Bond (a)
Accumulation unit value at beginning of period $1.000 $1.000
Accumulation unit value at end of period $1.166 $1.000
Percentage change in accumulation unit value 16.61% (0.03)%
Number of accumulation units outstanding at end of period 350,623 12,553
Government Securities (a)
Accumulation unit value at beginning of period $0.997 $1.000
Accumulation unit value at end of period $1.154 $0.997
Percentage change in accumulation unit value 15.72% (0.26)%
Number of accumulation units outstanding at end of period 30,614 0
Money Market (a)
Accumulation unit value at beginning of period $1.014 $1.000
Accumulation unit value at end of period $1.056 $1.014
Percentage change in accumulation unit value $4.14% 1.38%
Number of accumulation units outstanding at end of period 641,747 0
(Continued)
<FN>
(a) Inception date was July 25, 1994.
(b) Inception date was June 1, 1995.
</TABLE>
<PAGE>
<TABLE>
CONDENSED FINANCIAL INFORMATION-CONT.
<CAPTION>
1995 1994
<S> <C> <C>
THE ALGER AMERICAN FUND:
Leveraged AllCap (b)
Accumulation unit value at beginning of period $1.000 N/A
Accumulation unit value at end of period $1.408 N/A
Percentage change in accumulation unit value 40.79% N/A
Number of accumulation units outstanding at end of period 207,147 N/A
Small Capitalization (b)
Accumulation unit value at beginning of period $1.000 N/A
Accumulation unit value at end of period $1.219 N/A
Percentage change in accumulation unit value 21.89% N/A
Number of accumulation units outstanding at end of period 517,903 N/A
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. (b)
Accumulation unit value at beginning of period $1.000 N/A
Accumulation unit value at end of period $1.175 N/A
Percentage change in accumulation unit value 17.49% N/A
Number of accumulation units outstanding at end of period 21,878 N/A
Dreyfus Stock Index Fund (b)
Accumulation unit value at beginning of period $1.000 N/A
Accumulation unit value at end of period $1.158 N/A
Percentage change in accumulation unit value 15.76% N/A
Number of accumulation units outstanding at end of period 191,752 N/A
FEDERATED INSURANCE SERIES
High Income Bond (b)
Accumulation unit value at beginning of period $1.000 N/A
Accumulation unit value at end of period $1.067 N/A
Percentage change in accumulation unit value 6.66% N/A
Number of accumulation units outstanding at end of period 26,380 N/A
International Equity (b)
Accumulation unit value at beginning of period $1.000 N/A
Accumulation unit value at end of period $1.025 N/A
Percentage change in accumulation unit value 2.51% N/A
Number of accumulation units outstanding at end of period 36,798 N/A
Utility (b)
Accumulation unit value at beginning of period $1.000 N/A
Accumulation unit value at end of period $1.122 N/A
Percentage change in accumulation unit value 12.21% N/A
Number of accumulation units outstanding at end of period 11,711 N/A
(Continued)
<FN>
(a) Inception date was July 25, 1994.
(b) Inception date was June 1, 1995.
</TABLE>
<PAGE>
<TABLE>
CONDENSED FINANCIAL INFORMATION-CONT.
<CAPTION>
1995 1994
<S> <C> <C>
JANUS ASPEN SERIES:
Aggressive Growth (b)
Accumulation unit value at beginning of period $1.000 N/A
Accumulation unit value at end of period $1.266 N/A
Percentage change in accumulation unit value 26.64% N/A
Number of accumulation units outstanding at end of period 122,278 N/A
Growth (b)
Accumulation unit value at beginning of period $1.000 N/A
Accumulation unit value at end of period $1.167 N/A
Percentage change in accumulation unit value 16.75% N/A
Number of accumulation units outstanding at end of period 138,532 N/A
Worldwide Growth (b)
Accumulation unit value at beginning of period $1.000 N/A
Accumulation unit value at end of period $1.211 N/A
Percentage change in accumulation unit value 21.12% N/A
Number of accumulation units outstanding at end of period 155,653 N/A
THE VAN ECK WORLDWIDE INSURANCE TRUST:
Gold and Natural Resources (b)
Accumulation unit value at beginning of period $1.000 N/A
Accumulation unit value at end of period $1.077 N/A
Percentage change in accumulation unit value 7.72% N/A
Number of accumulation units outstanding at end of period 68,730 N/A
Worldwide Bond (b)
Accumulation unit value at beginning of period $1.000 N/A
Accumulation unit value at end of period $1.018 N/A
Percentage change in accumulation unit value 1.82% N/A
Number of accumulation units outstanding at end of period 130,071 N/A
Worldwide Hard Assets (b)
Accumulation unit value at beginning of period $1.000 N/A
Accumulation unit value at end of period $1.049 N/A
Percentage change in accumulation unit value 4.94% N/A
Number of accumulation units outstanding at end of period 147,283 N/A
<FN>
(a) Inception date was July 25, 1994.
(b) Inception date was June 1, 1995.
</TABLE>
<PAGE>
GREAT AMERICAN RESERVE, VARIABLE ACCOUNT, AND THE INVESTMENT OPTIONS
A. Great American Reserve
Great American Reserve, originally organized in 1937, is principally
engaged in the life insurance business in 47 states and the District of
Columbia. Great American Reserve is a stock company organized under the laws of
the state of Texas and an indirect wholly owned subsidiary of Conseco, Inc.
("Conseco"). The operations of Great American Reserve are handled by Conseco.
Conseco is a publicly owned financial services holding company, the principal
operations of which are the development, marketing and administration of
specialized annuity and life insurance products. Conseco is located at 11825 N.
Pennsylvania Street, Carmel, Indiana 46032.
All inquiries regarding Individual Accounts, the Contracts, or any related
matter should be directed to Great American Reserve's Variable Annuity
Department at the address and telephone number shown on page 1 of this
Prospectus. The financial statements of Great American Reserve included in the
Statement of Additional Information should be considered only as bearing upon
the ability of Great American Reserve to meet the obligations under the
Contracts. Furthermore, neither the assets of Conseco nor those of any company
in the Conseco group of companies other than Great American Reserve support
these obligations. As of December 31, 1995, Great American Reserve had total
assets of $2.8 billion and total shareholder's equity of $442.6 million. Great
American Reserve does not guarantee the investment performance of the Variable
Account investment options. B. Variable Account
Great American Reserve established the Variable Account on November 12,
1993, as a separate account under Texas law. The assets of the Variable Account
are not chargeable with liabilities arising out of any other business Great
American Reserve may conduct. In addition, any income, gains or losses realized
or unrealized on assets of the Variable Account are credited to or charged
against the Variable Account without regard to other income, gains or losses of
Great American Reserve. Nevertheless, obligations arising under the Contracts
are general obligations of Great American Reserve. In addition to the net assets
and other liabilities for variable annuity contracts, the Variable Account's
assets will include assets derived from charges made by Great American Reserve.
Great American Reserve may transfer out to its general account any of the
Variable Account's assets that are in excess of the reserves and other
liabilities relating to the Contracts. The Variable Account is regulated by the
Insurance Department of Texas. Regulation by the state, however, does not
involve any supervision of the Variable Account, except to determine compliance
with broad statutory criteria.
The Variable Account is registered with the SEC as a unit investment trust
under the Investment Company Act of 1940 (the "1940 Act"). A unit investment
trust is a type of investment company which invests its assets in specified
securities, such as 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.
The Variable Account is segmented into Sub-accounts. Each Sub-account
invests in shares of one of the Funds and such shares are purchased at net asset
value. The Sub-accounts and Funds may be added or withdrawn as permitted by
applicable law. The Variable Account consists of 24 Sub-accounts, each of which
invests in shares of the eligible Funds of the Conseco Series Trust Asset
Allocation, Common Stock, Corporate Bond, Government Securities, and Money
Market Portfolios; The Alger American Fund Growth, Leveraged AllCap, MidCap
Growth and Small Capitalization Portfolios; the Berger IPT - 100, Berger IPT
Growth and Income, and Berger IPT - Small Company Growth Funds; The Dreyfus
Socially Responsible Growth Fund, Inc.; the Dreyfus Stock Index Fund; the
Federated Insurance Series High Income Bond, International Equity, and Utility
Funds; the Janus Aspen Series Aggressive Growth, Growth, and Worldwide Growth
Portfolios; and the Van Eck Worldwide Insurance Trust Gold and Natural
Resources, Worldwide Bond, Worldwide Emerging Markets, and <PAGE> Worldwide Hard
Assets Funds. Great American Reserve reserves the right 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 Great American
Reserve or an affiliated company. Great American Reserve will not eliminate
existing Sub-accounts or combine Sub-accounts without any required prior
approval of the appropriate state or federal regulatory authorities.
C. Investment Options
The investment objectives of the Funds available through the Variable Account
are briefly described below. More detailed information is contained in the
current prospectuses of the Funds.
Conseco Series Trust
Asset Allocation Portfolio seeks a high total investment return, consistent
with the preservation of capital and prudent investment risk. The Portfolio
seeks to achieve this objective by pursuing an active asset allocation strategy
whereby investments are allocated, based upon thorough investment research,
valuation and analysis of market trends and the anticipated relative total
return available, among various asset classes including debt securities, equity
securities, and money market instruments.
Common Stock Portfolio seeks to provide a high total return consistent with
preservation of capital and a prudent level of risk primarily by investing in
selected equity securities and other securities having the investment
characteristics of common stocks.
Corporate Bond Portfolio seeks to provide as high a level of income as is
consistent with preservation of capital by investing primarily in debt
securities.
Government Securities Portfolio seeks safety of capital, liquidity and
current income by investing primarily in securities issued by the U.S.
Government or an agency or instrumentality of the U.S. Government, including
mortgage-related securities.
Money Market Portfolio seeks current income consistent with stability of
capital and liquidity. An investment in this Portfolio is neither insured nor
guaranteed by the U.S. Government and there can be no assurance that the
Portfolio will be able to maintain a stable net asset value of $1.00 per share.
The Alger American Fund
Alger American Leveraged AllCap Portfolio seeks long-term capital
appreciation by investing in a diversified, actively managed portfolio of equity
securities. The Portfolio may engage in leveraging (up to 331/3 percent of its
assets) and options and futures transactions, which are deemed to be speculative
and which may cause the Portfolio's value to fluctuate.
Alger American Growth Portfolio seeks long-term capital appreciation by
investing in a diversified, actively managed portfolio of equity securities,
primarily of companies with total market capitalization of $1 billion or
greater.
Alger American MidCap Growth Portfolio seeks long-term capital
appreciation. Except during temporary defensive periods, the Portfolio invests
at least 65% of its total assets in equity securities of companies that, at the
time of purchase of the securities, have total market capitalization within the
range of companies included in the S&P MidCap 400 Index. This Index is designed
to track the performance of medium capitalization companies. At the date of this
Prospectus, the range of market capitalization of these companies was $153
million to $8.9 billion. The Portfolio may invest up to 35% of its total assets
in equity securities of larger or smaller issuers and in excess of that amount
(up to 100% of its assets) during temporary defensive periods.
Alger American Small Capitalization Portfolio seeks a long-term capital
appreciation. Except during temporary defensive periods, the Portfolio invests
at least 65% of its total assets in equity securities of companies that, at the
time of purchase of the securities, have total market capitalization within the
range of companies included in the Russell 2000 Growth Index. This Index is
designed to track the performance of small capitalization companies. At the date
of this Prospectus, the range of market capitalization of these companies was
$20 million to $3.0 billion. The Portfolio may invest up to 35% of its total
assets in equity securities of larger or smaller issuers and in excess of that
amount (up to 100% of its assets) during temporary defensive periods.
<PAGE>
Berger Institutional Products Trust
Berger IPT - 100 Fund seeks long-term capital appreciation by investing
primarily in common stocks of established companies which the Fund's adviser
believes offer favorable growth prospects. Current income is not an investment
objective.
Berger IPT - Growth and Income Fund seeks capital appreciation and
secondarily a moderate level of current income by investing primarily in common
stocks and other securities, such as convertible securities or preferred stocks,
which the Fund's adviser believes offer favorable growth prospects and are
expected to also provide current income.
Berger IPT - Small Company Growth Fund seeks capital appreciation by
investing primarily in equity securities (including common and preferred stocks,
convertible debt securities and other securities having equity features) of
small growth companies with market capitalization of less than $1 billion at the
time of initial purchase.
Dreyfus Stock Index Fund
Dreyfus Stock Index Fund seeks to provide investment results that
correspond to the price and yield performance of publicly traded common stocks
in the aggregate, as represented by the Standard & Poor's 500 Composite Price
Index. The Fund is neither sponsored by nor affiliated with the Standard &
Poor's Corporation.
The Dreyfus Socially Responsible Growth Fund, Inc.
The Dreyfus Socially Responsible Growth Fund, Inc. seeks to provide capital
growth through equity investment in companies that, in the opinion of the Fund's
management, not only meet traditional investment standards but also show
evidence that they conduct business in a manner that contributes to the
enhancement of the quality of life in America. Current income is secondary to
the primary goal.
Federated Insurance Series
Federated High Income Bond Fund II seeks to provide high current income by
investing at least 65 percent of its assets in lower rated fixed income
corporate debt obligations. Capital growth will be considered, but only when
consistent with the investment objective of high current income. The fixed
income securities in which the Fund will primarily invest are commonly referred
to as "junk bonds."
Federated International Equity Fund II seeks to obtain a total return on
its assets by investing at least 65 percent of its assets (and under normal
market conditions substantially all of its assets) in equity securities of
issuers located in at least three different countries outside of the United
States.
Federated Utility Fund II seeks to provide high current income and moderate
capital appreciation by investing at least 65 percent of its assets (under
normal conditions) in equity and debt securities of utility companies.
Janus Aspen Series
Aggressive Growth Portfolio seeks long-term growth of capital. The
Portfolio is a nondiversified fund that pursues its objective by normally
investing at least 50% of its equity assets in securities issued by medium-sized
companies. Medium-sized companies are those whose market capitalizations fall
within the range of companies in the S&P MidCap 400 Index (the "MidCap Index").
Companies whose capitalization falls outside this range after the Portfolio's
initial purchase continue to be considered medium-sized companies of the purpose
of this policy. As of December 29, 1995, the MidCap Index included companies
with capitalizations between approximately $118 million to $7.5 billion.
Growth Portfolio seeks long-term growth of capital in a manner consistent
with the preservation of capital. It pursues this objective by investing
primarily in common stocks of a large number of issuers of any size. Generally,
this Portfolio emphasizes issuers with larger market capitalizations.
Worldwide Growth Portfolio seeks long-term growth of capital in a manner
consistent with the preservation of capital. It pursues this objective by
investing primarily in common stocks of foreign and domestic issuers of any
size. The Portfolio normally invests in issuers from at least five different
countries including the United States. <PAGE>
Van Eck Worldwide Insurance Trust
Gold and Natural Resources Fund seeks long-term capital appreciation by
investing in equity and debt securities of companies engaged in the exploration,
development, production and distribution of gold and other natural resources,
such as strategic and other metals, minerals, forest products, oil, natural gas
and coal. Current income is not an investment objective.
Worldwide Bond Fund seeks high total return through a flexible policy of
investing globally, primarily in debt securities.
Worldwide Emerging Markets Fund seeks long-term capital appreciation by
investing primarily in equity securities in emerging markets around the world.
The fund emphasizes countries that, compared to the world's major economies,
exhibit relatively low gross national per capita as well as the potential for
rapid economic growth.
Worldwide Hard Assets Fund seeks long-term capital appreciation by
investing globally, primarily in equity securities and indexed securities of
"hard asset" companies which are directly or indirectly engaged to a significant
extent in the exploration, development, production and distribution of precious
metals, ferrous and non-ferrous metals, gas, petroleum, petrochemicals, forest
products, real estate and other basic non-agricultural commodities which,
historically, have been produced and marketed profitably during periods of
significant inflation.
There is no assurance that the Funds will achieve their stated objectives.
The Funds' shares are also available to certain separate accounts funding
variable life insurance policies and variable annuity contracts offered by other
insurance company separate accounts. This is called "mixed and shared
funding."Although we do not anticipate any inherent difficulties arising from
mixed and shared funding, it is theoretically possible that, due to differences
in tax treatment or other considerations, the interests of owners of various
contracts participating in the Funds might at some time be in conflict. The
Board of Directors or Trustees of each Fund, each Fund's investment adviser, and
Great American Reserve are required to monitor events to identify any material
conflicts that arise from the use of the Funds for mixed and shared funding. For
more information about the risks of mixed funding, please refer to the relevant
Fund prospectus.
If the shares of any of the Funds should no longer be available for
investment by the Variable Account or, if in the judgment of Great American
Reserve's management, further investment of such Funds shall become
inappropriate in view of the purpose of the Contract, Great American Reserve may
add or substitute shares of another Sub-account or of another Fund for eligible
Sub-account shares already purchased under the Contract. No substitution of Sub-
account shares may take place without prior approval of the SEC and notice to
Contract Owners, to the extent required by the 1940 Act.
Voting Rights
Contract Owners may instruct Great American Reserve as to the voting of
Fund shares attributable to their respective interests under the Contracts at
meetings of shareholders of the Funds. Contract Owners entitled to vote will
receive proxy material and a form on which voting instructions may be given.
Great American Reserve will vote the shares of each Sub-account held by the
Variable Account attributable to the Contracts in accordance with instructions
received from Contract Owners. Shares held in each Sub-account for which timely
instructions have not been received from Contract Owners will be voted by Great
American Reserve for or against any proposition, or Great American Reserve will
abstain, in the same proportion as shares in that Sub-account for which
instructions are received. Great American Reserve will vote, or abstain from
voting, any shares that are not attributable to Contract Owners in the same
proportion as all Contract Owners in the Variable Account vote or abstain.
However, if Great American Reserve determines that it is permitted to vote such
shares of the Funds in its own right, it may elect to do so, subject to the
then-current interpretation of the 1940 Act and the rules thereunder.
Under certain Contracts, not including contracts issued in connection with
governmental employers' deferred compensation plans described in this
Prospectus, Participants and Annuitants have the right <PAGE> to instruct the
Contract Owner with respect to the number of votes attributable to their
Individual Accounts. Votes attributable to Participants and Annuitants who do
not instruct the Contract Owner will be cast by the Contract Owner for or
against each proposal to be voted upon, in the same proportion as votes for
which instructions have been received. Participants and Annuitants entitled to
instruct the casting of votes will receive a notice of each meeting of Contract
Owners, and proxy solicitation materials, and a statement of the number of votes
attributable to their participation under the Contract.
The number of shares held in a Sub-account deemed attributable to a
Contract Owner's interest under a Contract will be determined on the basis of
the value of the Accumulation Units credited to the Contract Owner's account as
of the record date. On or after the Maturity Date, the number of attributable
shares will be based on the amount of assets held to meet annuity obligations to
the payee under the Contract as of the record date. On or after the Maturity
Date, the number of votes attributable to a Contract will generally decrease
since funds set aside for Annuitants will decrease as payments are made.
THE CONTRACTS
A. Accumulation Provisions
Purchase Payments. Purchase Payments are paid to Great American Reserve at
its Administrative Office. For TSAs, the minimum initial and subsequent purchase
payment is $50 per month. For IRAs the minimum initial investment is $2,000 and
the minimum amount of each additional payment is $50. For non-qualified
Contracts, the minimum initial investment is $5,000 and the minimum amount of
each additional lump sum payment is $2,000 (or $200 per month). Purchase
Payments may be made at any time. If a Purchase Payment would exceed $250,000,
the Purchase Payment will be acceptable only with the prior approval of Great
American Reserve. Great American Reserve reserves the right to refuse any
Purchase Payment.
Great American Reserve may, at its option and with prior notice, cancel
certain contracts in which no Purchase Payments have been made, or if the
Contract Value is less than $500. Upon cancellation, Great American Reserve will
pay the Contract Owner the Contract Value computed as of the Valuation Period
during which the cancellation occurs less any outstanding loans, any withdrawal
charge, and the $30 annual administrative fee. Such cancellation could have
adverse tax consequences (see "Federal Tax Matters").
Allocation of Purchase Payments. The Contract Owner may elect to have
Purchase Payments accumulated (a) on a fully variable basis invested in one or
more of the Sub-accounts of the Variable Account; (b) on a fully fixed basis
which reflects a compound interest rate guaranteed by Great American Reserve; or
(c) in a combination of any of the investment options.
An election to change the allocation of future Purchase Payments may be
made by the Contract Owner 30 days (a) subsequent to the date of establishment
of the Individual Account or (b) subsequent to a prior change in allocation.
Accumulation Units. Each Purchase Payment is credited to the Owner's
Individual Account in the form of Accumulation Units, at the close of the
Valuation Period in which the Purchase Payment is received at the Administrative
Office of Great American Reserve. The number of Accumulation Units credited is
determined by dividing the Purchase Payment amount by the value of an
Accumulation Unit at the close of that Valuation Period. Accumulation Units are
valued separately for each investment option, so a Contract Owner who has
elected to have amounts in an Individual Account accumulated in more than one
investment option will have several types of Accumulation Units credited to the
Individual Account.
Value of an Individual Account. The number of Accumulation Units credited
to an Individual Account will not be changed by any subsequent change in the
value of an Accumulation Unit, but the dollar value of an Accumulation Unit may
vary from Valuation Period
<PAGE>
to Valuation Period to reflect the investment experience of the appropriate
investment option. The value of an Individual Account at any time prior to the
Maturity Date can be determined by (a) multiplying the total number of
Accumulation Units credited to the Individual Account for each investment
option, respectively, by the appropriate current Accumulation Unit value; and
(b) totaling the resulting values for each portion of the Individual Account.
There is no assurance that the value of the Individual Account will equal or
exceed the Purchase Payments made. The Contract Owner will be advised at least
annually as to the number of Accumulation Units which are credited to the
Individual Account, the current Accumulation Unit values, and the values of the
Individual Account.
Net Investment Factor for Each Valuation Period. The Variable Account value
will fluctuate in accordance with the investment results and expenses of the
underlying eligible Funds and the deduction of certain charges. In order to
determine how these fluctuations affect Contract Value, an Accumulation Unit
value is utilized. Each Sub-account has its own Accumulation Units and value per
unit. The unit value applicable during any Valuation Period is determined at the
end of that period.
When eligible Fund shares were first purchased on behalf of the Variable
Account, Accumulation Units were valued at $1.00 each. The value of an
Accumulation Unit for each Sub-account at any valuation period thereafter is
determined by multiplying the value for the prior period by a net investment
factor. This factor may be greater or less than 1.0; therefore, the Accumulation
Unit may increase or decrease from Valuation Period to Valuation Period. A net
investment factor for each Sub-account is calculated by dividing (a) by (b) and
then subtracting (c) (i.e., (a/b) - c), where:
(a) is equal to:
(i) the net asset value per share of the eligible
Portfolio at the end of the Valuation Period; plus
(ii) the per share amount of any distribution made by the eligible
Portfolio if the "ex- dividend"date occurs during that same
Valuation Period.
(b) is the net asset value per share of the eligible
Portfolio at the end of the prior Valuation Period.
(c) is equal to the Valuation Period equivalent of the per year mortality
and expense risk charge and administrative charges as indicated in the
"Summary-Charges and Deductions" table.
Information on the Fixed Account. Because of exemptive and exclusionary
provisions, interests in the Fixed Account of the general account have not been
registered under the Securities Act of 1933 (the "1933 Act"), nor is the Fixed
Account of the general account registered as an investment company under the
1940 Act. Accordingly, neither the Fixed Account of the general account of Great
American Reserve nor any interest therein is generally subject to the provisions
of the 1933 or 1940 Acts, and we have been advised that the staff of the SEC has
not reviewed the disclosures in this Prospectus that relate to the fixed
portion. Disclosures regarding the Fixed Account of the Contracts and the
general account of Great American Reserve, however, may be subject to certain
generally applicable provisions of the federal securities laws relating to the
accuracy and completeness of statements made in prospectuses.
In addition to the 24 variable investment options described in this
Prospectus, the Contracts have a Fixed Account available for allocation of
Purchase Payments. Generally, the information in the Section called "Contracts"
applies in a like manner to the Fixed Account. However, there are some
differences.
The Fixed Account operates like a traditional annuity. Fixed Annuity Cash
Values increase based on interest rates that may change from time to time but
are guaranteed by Great American Reserve. Interest is credited daily and
compounded annually. Purchase Payments and transfers to the Fixed Account become
part of the general account of Great American Reserve. In contrast, Purchase
Payments and transfers for the Variable Account are applied to segregated asset
accounts; they are not commingled with Great American <PAGE> Reserve's main
portfolio of investments that support fixed annuity obligations. The gains
achieved or losses suffered by the segregated asset accounts have no effect on
the Fixed Account.
The Contracts allow you to transfer Contract Values between the Fixed and
Variable Account, but such transfers are restricted as follows:
1. You may transfer Contract Values from the Variable Account to the Fixed
Account once in any 30-day period.
2. You may transfer Contract Values from the Fixed Account to the Variable
Account once in any six- month period subject to a limit of 20 percent of
the Fixed Account value.
3. No transfers may be made from the Fixed Account once annuity payments
begin.
The administrative charge and the mortality and expense risk charge based
on the value of each Sub-account do not apply to values allocated to the Fixed
Account.
If you buy the annuity as a TSA or certain other qualified plans, the
Contract will contain a provision that allows a loan to be taken against the
Contract Values allocated to the Fixed Account. Loan provisions are described in
detail in the Contract.
Transfer Among Investment Options. Before the Maturity Date, Contract
Owners may transfer Variable Account value from one Sub-account to another Sub-
account and/or to the Fixed Account. The Contract allows Great American Reserve
to limit the number of transfers that can be made in a specified time period.
Contract Owners should be aware that transfer limitations may prevent a Contract
Owner from making a transfer on the date he or she desires, with the result that
the Contract Owner's future Contract Value may be lower than it would have been
had the transfer been made on the desired date. Great American Reserve is not
charging a transfer fee, but limits transfers to one every 30 days and limits
transfer from the Fixed Account to a maximum of 20 percent of the Fixed Account
value per any six-month period. All transfers requested for a Contract on the
same day will be treated as a single transfer in that period.
Great American Reserve's interest in applying these limitations is to
protect the interests of both Contract Owners who are not engaging in
significant transfer activity and Contract Owners who are engaging in such
activity. Great American Reserve has determined that the actions of Contract
Owners engaging in significant transfer activity among Sub-accounts may cause an
adverse effect on the performance of the underlying Portfolio for the Sub-
account involved. The movement of Sub-account values from one Sub-account to
another may prevent an underlying Portfolio from taking advantage of investment
opportunities because it must maintain a liquid position in order to handle
withdrawals. Such movement may also cause a substantial increase in fund
transaction costs which must be indirectly borne by the Contract Owner.
Transfers must be made by written authorization from the Contract Owner or
from the person acting for the Contract Owner as an attorney-in-fact under a
power-of-attorney if permitted by state law. By authorizing Great American
Reserve to accept telephone transfer instructions, a Contract Owner agrees to
accept and be bound by the conditions and procedures established by Great
American Reserve from time to time. We have instituted reasonable procedures to
confirm that any instructions communicated by telephone are genuine. All
telephone calls will be recorded, and the caller will be asked to produce your
personalized data prior to our initiating any transfer requests by telephone.
Additionally, as with other transactions, you will receive a written
confirmation of your transfer. If reasonable procedures are employed, neither
Great American Reserve nor GARCO Equity Sales, Inc. ("GARCO Equity Sales") will
be liable for following telephone instructions which it reasonably believes to
be genuine. Written transfer requests may be made by a person acting for the
Contract Owner as an attorney-in-fact under a power-of-attorney.
Transfer requests received by Great American Reserve before the close of
trading on the New York Stock Exchange (currently 4:00 p.m. Eastern time) will
be initiated at the close of business that day. Any request received later will
be initiated at the close of the next business day. <PAGE>
Dollar Cost Averaging. Great American Reserve administers a Dollar Cost
Averaging ("DCA") program which enables a Contract Owner to transfer the value
from the Fixed Account or Money Market Sub-account to another investment option
on a predetermined and systematic basis. 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.
Rebalancing. Rebalancing is a program, which if elected, provides for
periodic pre-authorized automatic transfers during the Accumulation Period among
the Sub-Accounts pursuant to written instructions from the Contract Owner. Such
transfers are made to maintain a particular percentage allocation among the
Portfolios as selected by the Contract Owner. Amounts in the Fixed Account will
not be transferred pursuant to the Rebalancing Program. The Contract Value must
be at least $5,000 to have transfers made pursuant to the Program. Any transfer
made pursuant to the Program must be in whole percentages in one (1%) percent
allocation increments. The maximum number of Sub-Accounts which can be used for
rebalancing is fifteen (15). A Contract Owner may select quarterly, semi-annual
or annual Rebalancing, on the date requested by the Contract Owner. Transfers
made pursuant to the Rebalancing Program are not taken into account in
determining any Transfer Fee. There is no fee for participating in the Program.
The Company reserves the right to terminate, modify or suspend the Rebalancing
Program at any time.
Sweeps. Sweeps are the transfer of the earnings from the Fixed Account into
another investment option on a periodic and systematic basis.
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 Great
American Reserve's Administrative Office. For certain qualified contracts,
exercise of the withdrawal right may be restricted and may require the consent
of the participant's spouse as required under the Code and regulations
thereunder. In the case of a total withdrawal, Great American Reserve will pay
the Contract Value as of the date of receipt of the request at its
Administrative Office, less the annual $30 administration fee, any outstanding
loans and any applicable withdrawal charge, and the Contract will be cancelled.
In the case of a partial withdrawal, Great American Reserve will pay the amount
requested and cancel that number of Accumulation Units credited to each
investment option of the Individual Account necessary to equal the amount
withdrawn from each investment option of the Individual Account plus any
applicable withdrawal charge deducted from such investment option of the
Individual Account. For withdrawals that can be made free of withdrawal charges,
see "Contract Charges."
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 Fixed Account until exhausted and then from
the Variable 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 the Contract Owner's investments
in the Variable Account investment options.
Only one partial withdrawal is permitted per any six-month period; however,
the amount withdrawn must be at least $250 or, if less, the entire balance in
the investment option. If a partial withdrawal plus any applicable withdrawal
charge would reduce the Contract Value to less than $500, Great American Reserve
reserves the right to treat the partial withdrawal as a total withdrawal of the
Contract Value. <PAGE>
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, except that Great American Reserve reserves the right to defer the
right of withdrawal or postpone payments for any periods 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) any emergency
exists as a result of which disposal of securities held in the Variable Account
is not reasonably practicable or it is not reasonably practical 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 a penalty tax and
withdrawals are permitted from Contracts issued in connection with certain
qualified plans only under limited circumstances (see "Federal Tax Matters").
Systematic Withdrawal Plan. Great American Reserve 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 an SWP agreement instruct Great American Reserve 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 free
withdrawal amounts to ensure that no withdrawal charge will ever apply to an SWP
withdrawal (see "Withdrawal Charge"). 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 a written request to Great American Reserve. SWP is
not available to Contracts participating in the dollar cost averaging program or
for which Purchase Payments are automatically deducted from a bank account on a
periodic basis. SWP is only available for withdrawals free of withdrawal
charges. SWP withdrawals may, however, be subject to the 10 percent federal tax
penalty on early withdrawals and to income tax (see "Federal Tax Matters").
Contract Owners interested in SWP may elect to participate in this program by
written request to Great American Reserve's Administrative Office.
Check Writing. A Contract Owner over age 59 1/2 and invested in the Money
Market Sub-account may authorize Great American Reserve to withdraw amounts from
the Money Market Sub-account by check by completing the required forms requested
from Great American Reserve. Once the forms are properly completed, signed and
returned to Great American Reserve, a supply of checks will be sent to the
Contract Owner. These checks may be payable by the Contract Owner to the order
of any person in any amount of $250 or more. When a check is presented for
payment, full and fractional Accumulation Units required to cover the amount of
the check and any applicable contract charges are withdrawn from the Contract
Owner's Individual Account by Great American Reserve at the next valuation
period. Checks will not be honored for withdrawal of Accumulation Units held
less than 15 calendar days, unless such Accumulation Units have been paid for by
bank wire. If the amount of the check is greater than the proceeds of the Money
Market Sub-account held in the Individual Account, the check is returned and the
Contract Owner may be subject to additional charges. The check writing privilege
may be terminated or suspended at any time by Great American Reserve. There is
an additional charge for this service to the Contract Owner by Great American
Reserve. A "stop payment" system is not available on these checks.
Loans. Your Contract may contain a loan provision issued in connection with
certain qualified plans. 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 advisers and retirement plan fiduciaries should be consulted prior
to exercising loan privileges. Loan provisions are described in detail in the
contract.
The amount of any loan will be deducted from the minimum death benefit (see
"Death Benefit Before the Maturity Date"). In addition, a loan, whether or not
repaid, will have a permanent effect on the Contract Value because the
investment results of the investment <PAGE> options will apply only to the
unborrowed portion of the Contract Value. The longer the loan 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 loan is outstanding, the Contract
Value will not increase as rapidly as it would have if no loan were outstanding.
If investment results are below that rate, the Contract Value will be higher
than it would have been if no loan had been outstanding.
CONTRACT CHARGES
Withdrawal Charge. There is no deduction for sales expenses from Purchase
Payments when made. However, Great American Reserve may assess a withdrawal
charge against the Purchase Payments when they are withdrawn to determine the
amount to be paid.
If a withdrawal is made from the Contract before the Maturity Date, a
withdrawal charge (a deferred sales load) may be assessed against Purchase
Payments that have been in the Contract less than six complete contract years.
There is never a charge with respect to free withdrawal amounts described below
or Purchase Payments that have been in the Contract more than six complete
contract years. The length of time from receipt of a Purchase Payment to the
time of withdrawal determines the withdrawal charge. For this purpose, Purchase
Payments will be deemed to be withdrawn in the order in which they are received
and will be first from Purchase Payments and then from other contract values.
The charge is a percentage of the Purchase Payment (not to exceed 8.5 percent of
the aggregate amount of the Purchase Payments made) and equals:
Charge Percentage Years per Payment
9% ....................................... 1
9% ....................................... 2
8% ....................................... 3
7% ....................................... 4
5% ....................................... 5
3% ....................................... 6
0% ....................................... 7 and thereafter
In addition, the following circumstances further limit or reduce withdrawal
charges: For issue ages up to 52, there is no withdrawal charge made after the
15th Contract Year and later; for issue ages 53 to 56, there is no withdrawal
charge made after you attain age 67 and later; for issue ages 57 and later, any
otherwise applicable withdrawal charge will be multiplied by a factor ranging
from .9 to 0 for Contract Years one through 10 and later, respectively.
After the first Contract Year, a Contract Owner may make a free withdrawal
from the investment options of the Individual Account for that year of an amount
up to the greater of: 10 percent of the Contract Value (as determined on the
date of receipt of the requested withdrawal), or the Contract Value divided by
the Owner's life expectancy based on the Code, or the amount of any Purchase
Payments that have been in the Contract more than six complete contract years
without the application of the withdrawal charge described above. Additional
withdrawals in excess of such amount in any Contract Year during the period when
withdrawal charges are applicable will be subject to the appropriate charge as
set forth above. From time to time, Great American Reserve may permit Contract
Owners to preauthorize partial withdrawals subject to certain limitations then
in effect. On or after the Maturity Date, withdrawal charges may be made under
the Fourth and Fifth Annuity Options (see "Annuity Options"). No withdrawal
charges otherwise applicable will be assessed in the event of death of the
Annuitant, death of the Contract Owner or if payments are made under an annuity
option provided for under the Contract that begins at least four years after the
effective date of the Contract and is paid under any life annuity option, or any
option with payments for a minimum period of five years.
In the case of a withdrawal of the entire amount of an Individual Account
with a certain dollar amount, the withdrawal charge is deducted from the
Purchase Payment amount withdrawn and the balance is paid to you. Example: You
request a total withdrawal of $2,000 and the applicable withdrawal charge is 5
percent. Your Individual Account will be reduced by $2,000 and you will receive
$1,880 (i.e., the $2,000 total withdrawal reduced by the 10 percent free
withdrawal less the 5 percent <PAGE> withdrawal charge and $30 Administrative
Fee). In the case of a partial withdrawal of an Individual Account in which you
request to receive a specified amount, the withdrawal charge will be calculated
on the total amount that must be withdrawn from your Individual Account in order
to provide you with the amount requested. Example: You request to receive $1,000
with a free withdrawal amount of $200 and the applicable withdrawal charge is 5
percent. Your Individual Account will be reduced by $1,042.11. In order to make
a withdrawal of $1,000, the amount withdrawn must be greater than the amount
requested by the amount of the withdrawal charge. The amount withdrawn is
calculated by dividing (a) the amount requested ($1,000 less the free withdrawal
amount of $200) by (b) 1.00, minus the applicable deduction rate of 5 percent
(or .95), which produces $1,042.11 ( $842.11 plus the $200 free withdrawal
amount). The value of the Individual Account will be reduced by this amount.
Administrative Charges. Prior to the Maturity Date, an annual
administrative fee of $30 is deducted on each Contract anniversary from the
Individual Account value. Great American Reserve will waive the annual
administrative fee if the Owner's Individual Account value is $25,000 or
greater. This administrative fee has been set at a level that will recover no
more than the actual costs associated with administering the Contracts. If an
Individual Account is fully withdrawn prior to the Maturity Date, the annual
administrative fee will be deducted from proceeds paid. The administrative fee
deduction is made first from amounts accumulated in the Fixed Account; if no or
an insufficient value exists in the Fixed Account, any balance will then be
deducted from the Sub-accounts of the Variable Account.
A daily charge in an amount equal to 0.15 percent of the value of each Sub-
account of the Variable Account on an annual basis is also deducted to reimburse
Great American Reserve for administrative expenses. This asset-based
administrative charge will not be deducted from the Fixed Account. The charge
will be reflected in the Contract Value as a proportionate reduction in the
value of each Sub-account of the Variable Account.
Great American Reserve does not expect to recover from such fees any amount
in excess of its accumulated administrative expenses. Even though administrative
expenses may increase, Great American Reserve guarantees that it will not
increase the amount of the administrative fees.
Mortality and Expense Risk Charge. Great American Reserve assumes two risks
under the Contract: an annuity mortality risk and an expense risk. Great
American Reserve makes daily deductions from the variable portion of a Contract
at an effective annual rate equal to 1.25 percent of the value of the assets of
the Variable Account for the mortality and expense risks assumed by Great
American Reserve consisting of .75 percent for the mortality risk and .50
percent for the expense risk. The annuity mortality risk is Great American
Reserve's promise to continue making annuity payments, determined in accordance
with the annuity tables and other provisions contained in the Contract,
regardless of how long the Annuitant lives and regardless of how long all
Annuitants as a group live. This promise assures that neither the longevity of
an Annuitant nor an improvement in life expectancy generally will have any
adverse effect on the monthly annuity payments, and that Annuitants will not
outlive the amounts which have been accumulated to provide such payment. The
promise is based on Great American Reserve's actuarial determination of expected
mortality rates among Annuitants. If, in the future, longevity of Annuitants as
a group is longer than Great American Reserve anticipated, Great American
Reserve must provide amounts from its assets which are not assets of its various
segregated asset accounts to fulfill its contract obligation. In that event, a
loss may fall on Great American Reserve. Conversely, if longevity among
Annuitants is shorter than anticipated, a gain may result to Great American
Reserve.
Great American Reserve also assumes the risk that the withdrawal charges
and the administrative fees may be insufficient to cover actual sales and
administrative expenses. If so, the shortfall will be made up from Great
American Reserve's general assets, which may include profits from other Sub-
account deductions. Conversely, if the sales deductions and administrative fees
exceed the actual sales and administrative expenses, a gain may result to Great
American Reserve. The mortality and <PAGE> expense risk charge is not assessed
against the Fixed Account.
Reduction or Elimination of Contract Charges. In some cases, Great American
Reserve may expect to incur lower sales and administrative expenses or perform
fewer services due to the size of the Contract, the average contribution and the
use of group enrollment procedures. Then, Great American Reserve may be able to
reduce or eliminate the contract charges for administrative expense and deferred
sales load charges.
Premium Taxes. Any premium tax due may be deducted from Purchase Payments
or from other values on the Maturity Date or at such other time as determined by
Great American Reserve. The current range of premium taxes in jurisdictions in
which the Contracts are made available is from 0 percent to 3.5 percent.
Other Charges. Currently, no charge is made against the Variable Account
for Great American Reserve's federal income taxes, or provisions for such taxes,
that may be attributable to the Variable Account. Great American Reserve may
charge each Sub-account of the Variable Account for its portion of any income
tax charged to the Sub-account or its assets. Under present laws, Great American
Reserve may incur state and local taxes (in addition to premium taxes) in
several states. At present, these taxes are not significant. If they increase,
however, Great American Reserve may decide to make charges for such taxes or
provisions for such taxes against the Variable Account. Any such charges against
the Variable Account or its Sub-accounts could have an adverse effect on the
investment experience of such Sub-accounts.
Death Benefit Before Maturity Date. If the Annuitant dies prior to the
Maturity Date, or the Owner if different than the Annuitant, Great American
Reserve will pay the minimum death benefit to the beneficiary. 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. Generally, the distribution of the
minimum death benefit must be made within five years after the Owner's death. If
the beneficiary is an individual, in lieu of distribution within five years of
the Owner's death, distribution may generally 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 over a period not in excess of the life expectancy of the
beneficiary. If the Owner's spouse is the beneficiary, 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 will
apply when that spouse, as the Owner, dies. In the case of a qualified contract,
the date on which distributions are required to begin shall not be earlier than
the date on which the Annuitant would have attained age 70 1/2. In the case of a
contract involving more than one Contract Owner, the death of any Contract Owner
shall cause this section to apply.
The minimum death benefit during the first seven contract years will be
equal to the greater of: (a) the Contract Value on the date due proof of death
is received at Great American Reserve's Administrative Office, or (b) the sum of
all Purchase Payments made, less any partial withdrawals. During any subsequent
seven-contract-year period, the minimum death benefit will be the greater of:
(a) the Contract Value on the date due proof of death is received at Great
American Reserve's Administrative Office; or (b) the Contract Value on the last
day of the previous seven-contract-year period plus any purchase payments made
and less any subsequent partial withdrawals; or (c) the sum of all premiums
paid, less any partial withdrawals. If the Annuitant or Owner dies after
attaining the age of 75, the death benefit will be the Contract Value on the
date due proof of death is received at Great American Reserve's Administrative
Office. The minimum death benefit will be reduced by any outstanding loans.
Death benefits generally will be paid within seven days of receipt of due
proof of death at Great American Reserve's Administrative Office, subject to
postponement under the same circumstances that payment or withdrawals may be
postponed (see "Withdrawals").
Options Upon Termination of Participation in the Plan (For Group Contracts
Only). Upon termination of participation in the Plan prior to the Maturity Date,
a Contract Owner will have the following options:
<PAGE>
(a) leave the Individual Account in force under the Contract, and the Sub-
account will continue to participate in the investment results of the
selected investment option. On the Maturity Date, the Participant will
begin to receive annuity payments. During the interim, any of the options
described below may be elected by the Contract Owner. This option will
automatically apply, unless written election of another option is filed
with Great American Reserve.
(b) apply the Individual Account to provide annuity payments commencing
immediately.
(c) convert the Individual Account to an individual variable annuity contract
of the type then being issued by Great American Reserve.
(d) terminate the Individual Account and receive its Contract Value less any
applicable charges and outstanding loans.
Restrictions Under Optional Retirement Programs. Participants in Optional
Retirement Programs can withdraw their interest in a Contract only upon (1)
termination of employment in all public institutions of higher education as
defined by applicable law, (2) retirement, or (3) death. Accordingly, a
Participant may be required to obtain a certificate of termination from his
employer before he can withdraw his interest.
Restrictions Under Section 403(b) Plans. Section 403(b) of the Code
provides that distributions (including withdrawals) under an annuity policy
attributable to contributions made pursuant to a salary reduction agreement
shall not begin prior to the time the employee:
(a) attains age 59 1/2, separates from the service of his or her employer,
dies, or becomes disabled; or
(b) suffers a financial hardship, as defined in then current Code and
regulations; or
(c) enters into a divorce settlement pursuant to applicable law.
Such Section only applies to distributions attributable to amounts accrued
under any such policy after December 31, 1988.
Such Section further provides that, in the event of a financial hardship,
any distribution made from any such policy shall consist only of contributions
made pursuant to a salary reduction agreement and shall not include any income
attributable to such contributions.
B. Settlement Provisions
Optional Annuity Period Elections. The Contract Owner selects a Maturity
Date and an Annuity option which may be on a fixed or variable basis, or a
combination of both. The Contract Owner may select a Maturity Date at any time
subject to applicable state requirements. The Maturity Date and the annuity
options are normally established by the terms of the Contract. If the Contract
Owner does not elect otherwise, (a) the manner of payment will be a lifetime
annuity with 120 monthly payments certain; and (b) the value of the Owner's
Individual Account will be applied as follows: (1) any value accumulated in the
Fixed Account will be applied to provide a fixed annuity; and (2) any value in
the Sub-account(s) of the Variable Account will be applied, separately, to
provide variable annuity payments.
By giving written notice to Great American Reserve at least 30 days prior
to the Maturity Date, the Contract Owner may elect to change (a) the annuity
option to any of the optional annuity forms described below or agreed to by
Great American Reserve, and (b) the manner in which the value of the Owner's
Individual Account is to be applied to provide annuity payments (for example, an
election that a portion or all of the amounts accumulated on a variable basis be
applied to provide fixed annuity payments or vice versa). Once annuity payments
commence, no changes may be elected by the Contract Owner (except transfers-see
"Transfers After Maturity Date").
No election may be made that would result in a first monthly annuity
payment of less than $50 if payments are to be on a fully fixed or variable
basis, or less than $50 on each basis if a combination of variable and fixed
annuity payments is elected. If at any time payments are or become less than $50
per monthly payment, Great American Reserve reserves the right to change the
frequency of payment to such interval as will result in <PAGE> annuity payments
of at least $50 each, except that payments shall not be made less frequently
than annually.
Prior to the selected Maturity Date, an Individual Account may be
terminated by the Contract Owner and the value thereof received in a lump sum.
Once annuity payments have commenced, neither the Annuitant nor the Contract
Owner can terminate the annuity benefit and receive a lump-sum settlement in
lieu thereof.
See "Federal Tax Matters" for information on the federal tax status of
annuity payments or other settlements in lieu thereof.
Annuity Options
First Option-Life Annuity. An Annuity payable monthly during the lifetime
of the Annuitant and ceasing with the last monthly payment due prior to the
death of the Annuitant. Of the first two options, this option offers the maximum
level of monthly payments since there is no minimum number of payments
guaranteed (nor a provision for a death benefit payable to a beneficiary). It
would be possible under this option to receive only one annuity payment if the
Annuitant died prior to the due date of the second annuity payment.
Second Option-Life Annuity With 120, 180 or 240 Monthly Payments
Guaranteed. An Annuity payable monthly during the lifetime of the Annuitant with
the guarantee that if, at the death of the Annuitant, payments have been made
for less than 120, 180 or 240 months, as elected, annuity payments will be
continued during the remainder of such period to the beneficiary designated by
the Contract Owner. If no beneficiary is designated, Great American Reserve
will, in accordance with the Contract provisions, pay in a lump sum to the
Annuitant's estate the present value, as of the date of death, of the number of
guaranteed annuity payments remaining after that date, computed on the basis of
the assumed net investment rate used in determining the first monthly payment.
See "Determination of Amount of the First Monthly Variable Annuity Payment"
below.
Because it provides a specified minimum number of annuity payments, this
option results in somewhat lower payments per month than the First Option.
Third Option-Installment Refund Life Annuity. Payments are made for the
installment refund period, which is the time required for the sum of the
payments to equal the amount applied, and thereafter for the life of the payee.
Fourth Option-Payments for a Fixed Period. Payments are made for the number
of years selected, which may be from three through 20. If elected on a variable
basis, payments under this option will vary monthly in accordance with the net
investment rate of the Sub-accounts of the Variable Account, as applicable.
Should the Annuitant die before the specified number of monthly payments is
made, the remaining payments will be commuted and paid to the designated
beneficiary in a lump sum payment.
Fifth Option-Payments of a Fixed Amount. Payments of a designated dollar
amount on a monthly, quarterly, semi-annual, or annual basis are made until the
Individual Account value applied under this option, adjusted each Valuation
Period to reflect investment experience, is exhausted within a minimum of three
years and a maximum of 20 years. Should the Annuitant die before the value is
exhausted, the remaining value will be commuted and paid to the beneficiary in a
lump sum payment. In lieu of a lump sum payment, the beneficiary may elect an
annuity option for distribution of any amount on deposit at the date of the
Annuitant's death which shall result in a rate of payment at least as rapid as
the rate of payment during the life of the Annuitant.
To the extent that the Fourth or Fifth Option is elected on a variable
basis, at any time during the payment period the Contract Owner may elect that
the remaining value be applied to effect a lifetime annuity under one of the
first two options described above, provided that the distribution will be made
at least as rapidly during the life of the Annuitant. Since the Contract Owner
may elect a lifetime annuity at any time, the annuity rate and expense risks
continue during the payment period. Accordingly, deductions for these risks will
continue to be made from the Individual Account values.
<PAGE>
Proceeds Applied to an Annuity Option. All or part of the Contract Value
may be applied to an annuity option. The proceeds that will be applied to the
annuity option will be as follows:
(a) the Contract Value less any outstanding loans, if the annuity option
elected begins at least four years after the effective date of your
contract and is paid under any life annuity option, or any option with
payments for a minimum period of five years, with no rights of early
withdrawal; or
(b) the death benefit if proceeds are payable under death of Annuitant; or
(c) Contract Value less any outstanding loans, withdrawal charge and any
administrative fee.
Determination of Amount of the First Monthly Variable Annuity Payment. On
or after the Maturity Date when annuity payments commence, the value of the
Individual Account is determined as the total of the product(s) of (a) the value
of an Accumulation Unit for each investment option at the end of the second
Valuation Period immediately preceding the Valuation Period in which the first
annuity payment is due and (b) the number of Accumulation Units credited to the
Individual Account with respect to each investment option as of the date the
Annuity is to commence. Premium tax, if assessed at such time by the applicable
jurisdiction, will be deducted from the Individual Account value. Any portion of
the Individual Account value for which a fixed annuity election has been made is
applied to provide fixed-dollar payments under the option elected.
The amount of the first monthly variable annuity payment is then calculated
by multiplying the Individual Account Value less any outstanding loans and
applicable charges, which is to be applied to provide variable payments, by the
amount of first monthly payment in accordance with annuity tables contained in
the Contract. The annuity tables are based on the 1983 Individual Annuity
Mortality Table. The amount of the first monthly payment varies according to the
form of annuity selected (see "Annuity Options" above), the age of the Annuitant
(for certain options) and the assumed net investment rate selected by the
Contract Owner. The standard assumed net investment rate is 3 percent per annum;
however, an alternative 5 percent per annum, or such other rate as Great
American Reserve may offer, may be selected prior to the Maturity Date.
The assumed net investment rates built into the annuity tables affect both
the amount of the first monthly variable annuity payment and the amount by which
subsequent payments may increase or decrease. Selection of a 5 percent rate,
rather than the standard 3 percent rate, would produce a higher first payment,
but subsequent payments would increase more slowly in periods when Annuity Unit
values are rising and decrease more rapidly in periods when Annuity Unit values
are declining. With either assumed rate, if the actual net investment rate
during any two or more successive months was equal to the assumed rate, the
annuity payments would be level during that period.
If a greater first monthly payment would result, Great American Reserve
will compute the first monthly payment on the same mortality basis as used in
determining the first payment under immediate annuity contracts being issued for
a similar class of Annuitants at the date the first monthly payment is due under
the Contract.
Value of an Annuity Unit. On the Maturity Date, a number of Annuity Units
is established for the Contract Owner for each investment option on which
variable annuity payments are to be based. For each Sub-account of the Variable
Account, the number of Annuity Units established is calculated by dividing (i)
the amount of the first monthly variable annuity payment on that basis by (ii)
the Annuity Unit value for that basis for the current Valuation Period. That
number of Annuity Units remains constant and is the basis for calculating the
amount of the second and subsequent annuity payments.
The Annuity Unit value is determined for each Valuation Period, for each
investment option, and is equal to the Annuity Unit value for the preceding
Valuation Period multiplied by the product of (i) the net investment factor for
the appropriate Sub-account (see "Net Investment Factor for Each Valuation
Period") for the second preceding Valuation Period and (ii) a factor to
neutralize the assumed net investment rate built into <PAGE> the annuity tables
(discussed under the preceding caption), for it is replaced by the actual net
investment rate in step (i). The daily factor for a 3 percent assumed net
investment rate is .99991902; for a 5 percent rate, the daily factor is
.99986634.
Amounts of Subsequent Monthly Variable Annuity Payments. The amounts of
subsequent monthly variable annuity payments are determined by multiplying (i)
the number of Annuity Units established for the Annuitant for the applicable
Sub-account by (ii) the Annuity Unit value for the Sub-account. If Annuity Units
are established for more than one Sub-account, the calculation is made
separately and the results combined to determine the total monthly variable
annuity payment.
1. Example of Calculation of Monthly Variable Annuity Payments. The
determination of the amount of the variable annuity payments can be
illustrated by the following hypothetical example. The example assumes that
the monthly payments are based on the investment experience of only one
investment option. If payments were based on the investment experience of
more than one investment option, the same procedure would be followed to
determine the portion of the monthly payment attributed to each investment
option.
2. First Monthly Payment. Assume that at the Maturity Date there are 40,000
Accumulation Units credited under a particular Individual Account and that
the value of an Accumulation Unit for the second Valuation Period prior to
the Maturity Date was $1.40000000; this produces a total value for the
Individual Sub-account of $56,000. Assume also that no premium tax is
payable and that the annuity tables in the Contract provide, for the option
elected, a first monthly variable annuity payment of $5.22 per $1,000 of
value applied; the first monthly payment to the Annuitant would thus be 56
multiplied by $5.22, or $292.32.
Assume that the Annuity Unit value for the Valuation Period in which
the first monthly payment was due was $1.30000000. This is divided into the
amount of the first monthly payment to establish the number of Annuity
Units for the Participant: $292.32 / $1.30000000 produces 224.862 Annuity
Units. The value of this number of Annuity Units will be paid in each
subsequent month.
3. Second Monthly Payment. The current Annuity Unit value is first calculated.
Assume a net investment factor of 1.01000000 for the second Valuation
Period preceding the due date of the second monthly payment. This is
multiplied by .99753980 to neutralize the assumed net investment rate of 3
percent per annum built into the number of Annuity Units determined above
(if an assumed net investment rate of 5 percent had been elected, the
neutralization factor would be .99594241), producing a result of
1.00751520. This is then multiplied by the Annuity Unit value for the
Valuation Period preceding the due date of the second monthly payment
(assume this value to be $1.30000000) to produce the current Annuity Unit
value, $1.30976976.
The second monthly payment is then calculated by multiplying the
constant number of Annuity Units by the current Annuity Unit value: 224.862
times $1.30976976 produces a payment of $294.52.
Transfers After Maturity Date. Transfers after the Maturity Date may be
made upon written notice to Great American Reserve at least 30 days before the
due date of the first annuity payment for which the change will apply. Transfers
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. Great
American Reserve reserves the right to limit, upon notice, the maximum number of
transfers a Contract Owner may make to one in any six- month period once annuity
payments have commenced. In addition, on or after the Maturity Date, no
transfers may be made from a fixed annuity option. Great American Reserve
reserves the right to defer the transfer privilege at any time that Great
American Reserve is unable to purchase or redeem shares of the Funds. Great
American Reserve also reserves the right to modify or terminate the transfer
privilege at any time in accordance with applicable law.
<PAGE>
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, Great American
Reserve will make the remaining guaranteed payments to the beneficiary. Such
payments will be made at least as rapidly as under the method of distribution
being used as of the date of the Annuitant's death. If no beneficiary is living,
Great American Reserve 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 Annuitant's estate.
C. Other Contract Provisions
Ten-Day Right to Review. Contracts allow a "10-day free look," wherein the
Contract Owner may revoke the contract by returning it to either a Great
American Reserve representative or to Great American Reserve's Administrative
Office within 10 days of delivery of the Contract. Great American Reserve deems
this period as ending 15 days after a Contract is mailed from its Administrative
Office. If the Contract is returned under the terms of the 10-day free look,
Great American Reserve will refund to the Contract Owner an amount equal to all
payments received with respect to the Contract.
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. Any change of ownership or assignment must be made in writing. Any
change must be approved by Great American Reserve. Any assignment and any
change, if approved, will be effective as of the date on which written. Great
American Reserve assumes no liability for any payments made or actions taken
before a change is approved or assignment is accepted, or responsibility for the
validity 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 employee's trust which is
part of a retirement plan qualified under Section 401 of the 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.
Modification. Great American Reserve may modify the Contract with the
approval of the Contract Owner unless provided otherwise by the Contract. After
the Contract has been in force, it may be modified by Great American Reserve
except that the mortality and expense risk charge, the withdrawal charges and
the administrative fees cannot be increased.
A Group Contract shall be suspended automatically on the effective date of
any modification initiated by Great American Reserve if the Contract Owner fails
to accept the modification. Effective with suspension, no new Participants may
enter the Plan but further Purchase Payments may be made on behalf of the
Participants then covered by the Contract.
No modification may affect Annuitants in any manner unless deemed necessary
to achieve the requirements of federal or state statutes or any rule or
regulation of the United States Treasury Department.
Company Approval. Each application is subject to acceptance by Great
American Reserve. Upon acceptance, a Contract is issued to the Contract Owner
and the Purchase Payment, as applicable to each investment option of the
Individual Account, is credited to the Owner's Individual Account. If an
application is complete upon receipt, the Purchase Payment will be credited to
the Owner's Individual Account within two business days. If it is not complete,
Great American Reserve will request additional information to complete the
processing <PAGE> of the application. If this is not accomplished within five
business days, Great American Reserve will return any Purchase Payment to the
applicant unless otherwise instructed. Subsequent Purchase Payments will be
credited to the Owner's Individual Account at the price next computed after the
Purchase Payment is received by Great American Reserve at its Administrative
Office.
FEDERAL TAX MATTERS
A. General
The operations of the Variable Account form a part of and are taxed with
the operations of Great American Reserve as a separate account under the Code.
Accordingly, the Variable Account is not separately taxed as a trust or
corporation and has not elected to be treated as a "regulated investment
company"under Subchapter M of the Code. Investment income and realized capital
gains on the assets of the Variable Account are reinvested and taken into
account in determining the Accumulation and Annuity Unit values and are
automatically applied to increase reserves under the Contracts. Under existing
federal income tax law, separate account investment income and capital gains are
not taxed. Therefore, the Variable Account does not make provisions for any such
taxes. If changes in the federal tax laws or interpretations thereof were to
result in Great American Reserve being taxed on income or gains attributable to
any of the Variable Account or any Sub-account thereof or certain types of
Contracts, then Great American Reserve has reserved the right to impose a charge
against the Variable Account and its constituent Sub-accounts (with respect to
some or all Contracts) in order to reimburse itself for payment of such taxes.
B. Status of Contracts
Section 72 of the Code governs taxation of annuities in general. However,
Section 817(h) of the Code provides that variable annuity contracts such as the
Contracts will not be treated as annuities unless the underlying investments are
"adequately diversified" in accordance with regulations prescribed by the
Secretary of the Treasury. Under the final regulations adopted by the Treasury
with respect to these diversification requirements, there are limitations as to
the percentage of assets in the Sub-account which may be made up of one or more
investments. Generally, a Sub-account will be adequately diversified if (A) no
more than 55 percent of the value of the total assets of the Sub-account is
represented by any one investment; (B) no more than 70 percent of the value of
the total assets of the Sub-account is represented by any two investments; (C)
no more than 80 percent of the value of the total assets of the Sub-account is
represented by any three investments; and (D) no more than 90 percent of the
value of the total assets of the Sub-account is represented by any four
investments. For purposes of this test, all securities of the same issuer are
counted as one investment. Great American Reserve believes that the investment
policies of the Variable Account and each Sub-account are more stringent than
the diversification rules and therefore that the Variable Account and each Sub-
account do and will continue to satisfy the diversification requirement of
Section 817(h).
In addition, pursuant to Section 72(s) of the Code, a Contract will not be
treated as an annuity contract for purposes of Section 72 unless the Contract
provides that (A) if the Contract Owner dies on or after the annuity starting
date but prior to the time the entire interest in the Contract has been
distributed, the remaining portion of such interest must be distributed at least
as rapidly as under the method of distribution in effect at the time of the
Contract Owner's death; and (B) if the Contract Owner dies prior to the annuity
starting date, the entire interest generally must be (1) distributed within five
years after the death of the Contract Owner or (2) distributed as annuity
payments over the life of a designated beneficiary (or over a period that does
not extend beyond the life expectancy of a designated beneficiary) and that such
distributions begin within one year of the Contract Owner's death. Section 72(s)
also provides, however, that the Contract may be continued in the name of the
spouse as the Contract Owner. Comparable rules concerning required distributions
plus additional rules also apply to qualified Plans and to IRAs. Great American
Reserve believes that the Contracts described in this Prospectus meet these
requirements. <PAGE>
Non-Qualified Contracts. Non-qualified Contracts are those Contracts which
are held by individual purchasers and which are not held as part of the assets
of a qualified pension, profit sharing, annuity purchase or other qualified Plan
as described below. Under present law, so long as the Contract meets the
requirements of the Code for treatment as an annuity, a Contract Owner is not
taxed on increases in the value of a Contract until distributions occur. For
this purpose, distributions include not only a partial withdrawal, a complete
surrender of the Contract or annuity payments under an annuity option elected,
but also the receipt of proceeds from loans and the absolute assignment or
pledge of any portion of the value of a Contract. The income portion of a
distribution is taxed as ordinary income. With respect to contributions to
annuity contracts after February 28, 1986, Section 72(u) provides that an
annuity contract owned by other than a natural person will generally be treated
as not being an annuity and, as a result, the income from the Contract will be
currently taxable to the owner of the Contract. This rule does not apply,
however, to annuities held for qualified Plans or to immediate annuities. In
Revenue Ruling 92-95, the Internal Revenue Service indicated that where an
annuity contract was acquired before February 28, 1986, the exchange of that
annuity contract for a new annuity contract in a non-taxable exchange under
Section 1035 did not cause the new annuity contract to be treated as acquired
after February 28, 1986.
Generally, amounts received in the case of a partial withdrawal under a
Contract are treated as taxable income to the extent of the excess of the cash
value of the Contract immediately before the withdrawal over the "investment in
the Contract."Any additional amount withdrawn at that time is not taxable. This
general rule does not apply, however, in the case of a partial withdrawal under
a Contract issued before August 14, 1982, where the partial withdrawal is
allocable first to the "investment in the Contract" made before that date. Any
amounts received are treated as taxable income only to the extent that such
amounts exceed the "investment in the Contract." In the case of a complete
surrender of any Contract (whether issued before or after August 14, 1982), the
amounts received are treated as taxable income only to the extent such amounts
exceed the "investment in the Contract." With respect to a Contract, the
"investment in the Contract" generally equals the portion of any premium paid by
or on behalf of an individual which was not excluded from the individual's gross
income, reduced by the amount of prior distributions that were not included in
the individual's gross income. For purposes of determining the amount of taxable
income that must be reported by a Contract Owner who has received a partial
distribution, all Contracts issued to the Contract Owner during a calendar year
must be treated as one Contract.
If distributions are made in the form of annuity payments, the Contract
Owner's "investment in the Contract" (adjusted for certain provisions) divided
by his or her life expectancy (or other period for which annuity payments are
expected to be made) constitutes a tax-free return of investment each year. The
dollar amount of annuity payments in any year in excess of such return is
taxable as ordinary income. For individuals whose annuity starting dates are
after December 31, 1986, the amount excluded from income may not exceed the
amount of contributions to the annuity less amounts previously received and
excluded from income if the annuity was payable for the life of the Annuitant
who outlives his or her life expectancy as determined as of the annuity starting
date.
Section 72(q) imposes a penalty tax on partial withdrawals and complete
surrenders equal to 10 percent of the amount treated as taxable income. In
general, the penalty tax does not apply to withdrawals or surrenders (1) that
are made on or after age 59 1/2, (2) that are made as a result of death or
disability, (3) that are received in substantially equal installments as a life
annuity, (4) that are allocable to the "investment in the Contract" before
August 14, 1982, or (5) that are received under an immediate annuity.
Revenue Ruling 92-95 indicates that eligibility for the August 14, 1982,
exception referred to in Item (4) above, will not be lost if a pre-existing
contract is exchanged for a new annuity contract on or after that date in an
exchange which is nontaxable under Section 1035 of the Code.
<PAGE>
Annuity distributions are generally subject to withholding for the
recipient's income tax liability. The withholding rates vary according to the
type of distribution. Recipients, however, are generally provided the
opportunity to elect not to have tax withheld from distributions.
Qualified Contracts. Qualified Contracts are those contracts which are held
as part of the assets of qualified pension, profit sharing, annuity purchase or
other qualified Plan as described below. Generally, increases in the value of an
individual's account under a Contract purchased in connection with a qualified
Plan are not taxable until benefits are received. The rules governing the tax
treatment of contributions and distributions under such Plans, as set forth in
the Code and applicable rulings and regulations, are complex and subject to
change. These rules also vary according to the type of Plan and the terms and
conditions of the Plan itself. Therefore, no attempt is made herein to provide
more than general information about the use of Contracts with the various types
of Plans, based on Great American Reserve's understanding of the current federal
tax laws as interpreted by the Internal Revenue Service. Purchasers of Contracts
for use with such a Plan and Plan Participants and their beneficiaries should
consult legal counsel and other competent advisers as to the suitability of the
Plan and the Contract to their specific needs, and as to applicable Code
limitations and tax consequences. Owners under such Plans, as well as Annuitants
and beneficiaries, should also be aware that the rights of any person with any
benefits under such Plans may be subject to the terms and conditions of the
Plans themselves regardless of the terms and conditions of the Contract. The
Code imposes a number of rules for all qualified Plans, including among other
things, nondiscrimination rules, maximum and minimum contributions, distribution
dates, nonforfeitability of interests, and penalties for noncompliance. There
are additional restrictions for so-called "top-heavy plans." Competent advisers
should be consulted with respect to the impact of the Code on the qualification
of the Plan and the taxation of the employee participating therein.
Following are brief descriptions of the various types of Plans and of the
use of Contracts in connection therewith.
1. Government and Tax-Exempt Organizations' Deferred Compensation Plans. Under
Code provisions, employees and independent contractors performing services
for state and local governments and other tax-exempt organizations may
participate in Deferred Compensation Plans. While participants in such
Plans may be permitted to specify the form of investment in which their
Plan accounts will participate, all such investments are owned by the
sponsoring employer and are subject to the claims of its creditors. The
amounts deferred under a Plan which meets the requirements of Section 457
of the Code are not taxable as income to the participant until paid or
otherwise made available to the participant or beneficiary. As a general
rule, the maximum amount which can be deferred in any one year is the
lesser of $7,500 or 33 1/3 percent of the participant's includable
compensation. However, in limited circumstances, up to $15,000 may be
deferred in each of the last three years before normal retirement age.
2. Public School Systems and Certain Tax-Exempt Organizations. Payments made
to purchase annuity contracts by public school systems or certain tax-
exempt organizations for their employees are excludable from the gross
income of the employee to the extent that aggregate payments for the
employee do not exceed the "exclusion allowance" provided by Section
403(b) of the Code, the limits on salary deferrals under Section 402 (g),
or the overall limits for excludable contributions of Section 415 of the
Code. Furthermore, the investment results credited to the Sub-account are
not taxable until benefits are received either in the form of annuity
payments or in a single sum.
If an employee's Individual Account is surrendered, usually the full
amount received would be includable in income for that year and taxed at
ordinary rates.
<PAGE>
3. Qualified Employees' Pension and Profit-Sharing Trust and Qualified
Annuity Plans.
Contributions made to purchase Contracts by an employer and the earnings on
such contributions for Plans that are qualified under Sections 401(a) or
403(a) of the Code are not taxable as income to the employee until
distributed to him or her. However, the employee may be required to include
these amounts in gross income prior to distribution if the qualified Plan
loses its qualification. Plans qualified under Section 401(a) or 403(a) of
the Code are subject to extensive rules, including limitations on maximum
contributions or benefits.
Distributions of amounts not attributable to nondeductible employee
contributions are generally taxable as ordinary income unless the
distribution qualifies for "lump-sum" treatment.
Under the Code special considerations apply to Plans covering self-employed
individuals. Such Plans are subject to extensive rules, including
limitations on maximum contributions or benefits involving "key
employees"or 5-percent owners, as well as to special rules pertaining to
"top heavy" Plans. Purchasers of the Contracts for use with these Plans
should seek competent advice as to the suitability of certain types of
Plans and the funding contracts to be purchased.
4. Individual Retirement Annuities. Under Section 408 of the Code, an
individual who receives compensation for personal services and who either
(A) does not participate in an employer-sponsored pension plan and, if
married, whose spouse does not participate in an employer-sponsored pension
plan or (B) does participate in such a plan, or whose spouse does, but does
not have adjusted gross income in excess of $40,000 for married individuals
or $25,000 for a single taxpayer, may participate in a retirement program
known as an Individual Retirement Annuity or an Individual Retirement
Account (each of which is an "IRA"). The individual is entitled to an
income tax deduction for a contribution to an IRA of up to the lesser of
$2,000 (or $2,250 if the IRA is maintained for both the individual and his
or her non-working spouse) or 100 percent of compensation. In addition,
distributions from IRA Plans, qualified Plans or Section 403(b) annuities
may, in whole or in part, qualify to be treated as a "rollover" on a tax-
deferred basis into an IRA rollover. Distributions from IRAs are subject to
certain restrictions. All distributions will be taxed to the individual as
ordinary income at the time of distribution. Any distribution to the
individual before the individual attains age 59 1/2 (except in the event of
death or disability) or the failure to satisfy certain other Code
requirements may result in adverse tax consequences to the individual.
Individuals who do participate in an employer- sponsored pension plan
or whose spouse participates in an employer-sponsored pension plan and who
have adjusted gross income in excess of the above-mentioned amounts may
generally participate in an IRA program; however, such contributions may
not be eligible for an income tax deduction.
5. Simplified Employee Pension Plans. An employer may make contributions on
behalf of employees to a simplified employee pension Plan as provided by
Section 408(k) of the Code. The amount of contributions and distribution
dates are limited by the Code provisions. All distributions from the Plan
will be taxed as ordinary income. Any distribution before the employee
attains age 59 1/2 (except in the event of death or disability) or the
failure to satisfy certain other Code requirements may result in adverse
tax consequences.
C. Taxation of Distributions
The following rules generally apply to distributions from Contracts
purchased in connection with the qualified Contracts discussed above, other than
IRA or governmental deferred compensation plans.
The portion, if any, of any contribution under a Contract made by or on
behalf of an individual which is not excluded from the employee's gross income
(generally, <PAGE>
the employee's own non-deductible contributions) constitutes his or her
"investment in the Contract." If a distribution is made in the form of annuity
payments, the employee's "investment in the Contract" (adjusted for certain
refund provisions) divided by his or her life expectancy (or other period for
which annuity payments are expected to be made) constitutes tax-free return of
investment each year not to exceed the total contribution to the Plan less any
amounts previously received which are excluded from income. The dollar amount of
annuity payments received in any year in excess of such return is taxable as
ordinary income. In certain circumstances, tax may be deferred by rolling over
the proceeds to an IRA or another qualified Plan. If a surrender or withdrawal
from the Contract is effected and a distribution is made in a single payment,
the proceeds may qualify for special "lump sum distribution" treatment under
certain qualified Plans as discussed below.
If an employee or beneficiary receives a "lump sum distribution"; that is,
in general if the employee or beneficiary receives in a single tax year the
total amounts payable with respect to that employee from a Plan and all similar
plans and the benefits are paid as a result of the employee's death, disability
or separation from service or after the employee attains age 591/2, the
distribution may be eligible for the special "five-year averaging" (or "10- year
averaging"under transitioned years) treatment of the entire taxable portion of
the distribution.
The taxation of benefits payable upon an employee's death to his
beneficiary generally follows these same principles, subject to a variety of
special rules.
Annuity distributions are generally subject to withholding for the
recipient's income tax liability. For distributions beginning in 1993, the
provisions contained in the Unemployment Compensation Amendments of 1992 and
related regulations generally apply. The new law generally mandates federal
withholding equal to 20 percent of any distribution from tax qualified Plans and
Section 403(b) annuities that is not a "direct rollover" to a new trustee, or
custodian in the case of an IRA. The new law does not apply to IRAs or Section
457 plans. Under prior law, recipients were provided the opportunity to elect
not to have tax withheld from distributions; to the extent the new mandatory 20
percent withholding provisions do not apply, this election generally remains.
Withholding on individual retirement annuities (IRA), simplified employee
pension plans (SEP) and deferred compensation plans varies according to the type
of distribution and the recipient's tax status. IRA recipients, however, are
generally provided the opportunity to elect not to have tax withheld from
distributions while deferred compensation distributions are generally treated as
wages.
There also may be imposed a penalty tax on partial withdrawals and complete
surrenders equal to 10 percent of the amount treated as taxable income. In
general, there is no penalty tax on the following withdrawals or surrenders: (1)
a distribution that is part of a scheduled series of substantially equal
periodic payments for the life of the participant, or the joint lives of the
participant and beneficiary (commencing after separation from service in the
case of a qualified Plan); (2) made on or after age 591/2; (3) a distribution to
a terminated employee, age 55 or older, with the exception of distributions from
an IRA; (4) a hardship distribution used to pay certain medical expenses with
the exception of distributions from an IRA; (5) a distribution made to, or on
behalf of, an alternate payee pursuant to a qualified domestic relations order;
(6) a distribution after death or disability of the employee; and (7) a
distribution from a governmental deferred compensation plan. Additionally, the
tax does not apply to cashouts of less than $3,500 which do not require the
participant's consent. The exceptions apply to 5-percent owners to the same
extent they apply to employees.
D. Other Considerations
It should be understood that the foregoing comments about the federal tax
consequences under these Contracts are not exhaustive and that special rules are
provided with respect to other tax situations not discussed <PAGE> herein.
Further, the federal income tax consequences discussed herein reflect current
law which is subject to change at any time. The foregoing discussion also does
not address any applicable state, local or foreign tax laws. Before an
investment is made in any of the above Plans, a tax adviser should be consulted.
GENERAL MATTERS
Performance Information. Performance information for the Variable Account
investment options may appear from time to time in advertisements or sales
literature. Performance information reflects only the performance of a
hypothetical investment in the Variable Account investment options during the
particular time period on which the calculations are based. Performance
information may consist of yield, effective yield, and average annual total
return quotations reflecting the deduction of all applicable charges for recent
one-year and, when applicable, five- and 10-year periods and, where less than 10
years, for the period subsequent to the date each Sub-account first became
available for investment. Additional total return quotations may be made that do
not reflect a surrender charge deduction (assuming no surrender at the end of
the illustrated period). Performance information may be shown by means of
schedules, charts or graphs. See the Statement of Additional Information for a
description of the methods used to determine yield and total return information
for the Sub-accounts.
Distribution of Contracts. GARCO Equity Sales, Inc. ("GARCO Equity Sales"),
11815 N. Pennsylvania Street, Carmel, IN 46032, an affiliate of Great American
Reserve, is the principal underwriter of the Contracts. GARCO Equity Sales is a
broker-dealer registered under the Securities and Exchange Act of 1934 and a
member of the National Association of Securities Dealers, Inc. Sales of the
Contracts will be made by registered representatives of GARCO Equity Sales and
broker-dealers authorized to sell the Contracts. Such registered representatives
will also be licensed insurance representatives of Great American Reserve. See
the Statement of Additional Information for more information.
Contract Owner Inquiries. All Contract Owner inquiries should be directed
to Great American Reserve's Administrative Office address or telephone number
appearing on page 1 of this Prospectus.
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 Great American Reserve nor GARCO Equity Sales 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. This Prospectus contains information concerning the
Variable Account, Great American Reserve, and the Contracts, but does not
contain all of the information set forth in the Registration Statement and all
exhibits and schedules relating thereto, which Great American Reserve has filed
with the Securities and Exchange Commission, Washington, D.C.
Additional information may be obtained from Great American Reserve by
requesting from Great American Reserve's Administrative Office, 11815 N.
Pennsylvania Street, Carmel, Indiana 46032, a Statement of Additional
Information. For convenience, the Table of Contents of the Statement of
Additional Information is provided below:
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
Page
General Information and History............................................B-1
Independent Accountants....................................................B-1
Distribution...............................................................B-1
Calculation of Yield Quotations............................................B-1
Calculation of Total Return Quotations.....................................B-2
Other Performance Data.....................................................B-3
Financial Statements ......................................................F-1
<PAGE>
If you would like a free copy of the Statement of Additional Information
for this Prospectus, please complete this form, detach, and mail to:
Great American Reserve Insurance Company
Administrative Office
11815 N. Pennsylvania Street
Carmel, Indiana 46032
Gentlemen:
Please send me a free copy of the Statement of Additional Information for
Great American Reserve Variable Annuity Account E at the following address:
Name:
-------------------------------------------------------------
Mailing Address:
==================================================
--------------------------------------------------
Sincerely,
(Signature)
<PAGE>
APPENDIX A
Conseco Series Trust
Conseco Series Trust is an open-end management investment company organized
as a business trust under the laws of the Commonwealth of Massachusetts on
November 15, 1982. Trust shares are offered only to separate accounts of various
insurance companies to fund benefits of variable life and variable annuity
contracts. Conseco Capital Management serves as the investment adviser.
The Alger American Fund
The Alger American Fund is an open-end management investment company
organized as a business trust under the laws of the Commonwealth of
Massachusetts on April 6, 1988. Trust shares are offered only to separate
accounts of various insurance companies to fund benefits of variable life and
variable annuity contracts. Fred Alger Management, Inc. serves as the investment
adviser.
Berger Institutional Products Trust
Berger Insitutional Products Trust is an open-end management investment
company organized as a business trust under the laws of the State of Delaware on
October 17, 1995. Trust shares are offered only to separate accounts of various
insurance companies in connection with investment in and payments under variable
annuity contracts and variable life insurance contracts, as well as to certain
qualified retirement plans. The investment adviser is Berger Associates, Inc.
The Dreyfus Socially Responsible Growth Fund, Inc.
The Dreyfus Socially Responsible Growth Fund, Inc. is an open-end
diversified, management investment company. It was incorporated under Maryland
law on July 20, 1992, and commenced operations on October 7, 1993. The Dreyfus
Corporation serves as the Fund's investment adviser. NCM Capital Management
Group, Inc. serves as the Fund's sub-investment adviser and provides day-to-day
management of the Fund's portfolio.
Dreyfus Stock Index Fund
Dreyfus Stock Index Fund is an open-end, non-diversified, management
investment company. It was incorporated in the name Dreyfus Life and Annuity
Index Fund, Inc. under Maryland law on January 24, 1989, and commenced
operations on September 29, 1989. On May 1, 1994, the Fund began operating under
the name Dreyfus Stock Index Fund. The Dreyfus Corporation serves as the Fund's
manager and Mellon Equity Associates serves as the Fund's index manager.
Federated Insurance Series
Federated Insurance Series is an open-end management investment company
organized as a business trust under the laws of the Commonwealth of
Massachusetts on September 15, 1993. Trust shares are offered only to separate
accounts of various insurance companies to serve as the investment medium of
variable life insurance policies and variable annuity contracts issued by the
insurance companies. Federated Advisers serves as the investment adviser.
Janus Aspen Series
Janus Aspen Series is an open-end management investment company organized
as a business trust under the laws of the State of Delaware on May 20, 1993.
Trust shares are offered only to separate accounts of various insurance
companies to fund the benefits of variable life and variable annuity contracts,
and to qualified retirement plans. The investment adviser and manager is Janus
Capital Corporation.
Van Eck Worldwide Insurance Trust
Van Eck Worldwide Insurance Trust is an open-end management investment
company organized as a business trust under the laws of the Commonwealth of
Massachusetts on January 7, 1987. Trust shares are offered only to separate
accounts of various insurance companies to fund the benefits of variable life
and variable annuity contracts. The investment adviser and manager is Van Eck
Associates Corporation.
A full description of the Conseco Series Trust, The Alger American Fund,
the Berger Institutional Products Trust, The Dreyfus Socially Responsible Growth
Fund, Inc., the Dreyfus Stock Index Fund, the Federated Insurance Series, the
Janus Aspen Series, and the Van Eck Worldwide Insurance Trust, including the
investment objectives, policies and restrictions of each of the eligible Funds,
is contained in the prospectuses of the Funds which accompany this Prospectus
and should be read carefully by a prospective purchaser before investing.
<PAGE>
GREAT AMERICAN RESERVE
INSURANCE COMPANY
11815 N. Pennsylvania St.
Carmel, IN 46032
05-7820 (5/96) May 1, 1996
<PAGE>
PART B
<PAGE>
GREAT AMERICAN RESERVE
INSURANCE COMPANY
Variable Annuity Account E
Individual & Group Variable Deferred Annuity Contracts
Statement of Additional Information
Dated May 1, 1996
Offered by Great American Reserve Insurance Company
11825 N. Pennsylvania St., Carmel, IN 46032
This Statement of Additional Information is not a prospectus. It should be
read in conjunction with the Prospectus for Great American Reserve Variable
Annuity Account E ("Variable Account")-Individual Variable Deferred Annuity
Contracts or Group Variable Deferred Annuity Contracts, dated May 1, 1996. You
can obtain a copy of the Prospectus by contacting Great American Reserve
Insurance Company ("Great American Reserve") at the address or telephone number
given above.
TABLE OF CONTENTS Page
General Information and History...........................................B-1
Independent Accountants...................................................B-1
Distribution..............................................................B-1
Calculation of Yield Quotations...........................................B-1
Calculation of Total Return Quotations....................................B-2
Other Performance Data....................................................B-3
Financial Statements......................................................F-1
<PAGE>
GENERAL INFORMATION AND HISTORY
Great American Reserve is an indirect wholly owned subsidiary of Conseco,
Inc. ("Conseco"). The operations of Great American Reserve are handled by
Conseco. Conseco is a publicly owned financial services holding company, the
principal operations of which are in the development, marketing and
administration of specialized annuity and life insurance products. Conseco has
its principal offices at 11825 N. Pennsylvania Street, Carmel, Indiana 46032.
The Variable Account was established by Great American Reserve.
INDEPENDENT ACCOUNTANTS
The financial statements of Great American Reserve Variable Annuity Account
E and Great American Reserve included in the Prospectus and the Statement of
Additional Information have been examined by Coopers & Lybrand L.L.P.,
Indianapolis, Indiana, independent accountants, for the periods indicated in
their reports as stated in their opinion and have been so included in reliance
upon such opinion given upon the authority of that firm as experts in accounting
and auditing.
DISTRIBUTION
Great American Reserve continuously offers the Contracts through associated
persons of the principal underwriter for Variable Account, GARCO Equity Sales,
Inc. ("GARCO Equity Sales"), a registered broker-dealer and member of the
National Association of Securities Dealers, Inc. GARCO Equity Sales is located
at 11815 N. Pennsylvania Street, Carmel, Indiana 46032, and is an affiliate of
Great American Reserve. For the year ended December 31, 1995, and from
commencement of operations on July 25, 1994, until December 31, 1994, Great
American Reserve paid GARCO Equity Sales total underwriting commissions of
$684,533 and $20,522. In addition, certain Contracts may be sold by life
insurance/registered representatives of other registered broker-dealers.
GARCO Equity Sales performs the sales functions relating to the Contracts and
Great American Reserve provides all administrative services. To cover the sales
expenses and administrative expenses (including such items as salaries, rent,
postage, telephone, travel, legal, actuarial, audit, office equipment and
printing), Great American Reserve makes sales and administrative deductions,
varying by type of Contract. See "Contract Charges" in the Prospectus.
CALCULATION OF YIELD QUOTATIONS
The Money Market Sub-account's standard yield quotations may appear in
sales material and advertising as calculated by the standard method prescribed
by rules of the Securities and Exchange Commission. Under this method, the yield
quotation is based on a seven-day period and computed as follows: The Money
Market Sub-account's daily net investment factor, minus one (1.00) is multiplied
by 365 to produce an annualized yield. The annualized yields of the seven-day
period are then averaged and carried to the nearest one-hundredth of one
percent. This yield reflects investment results less deductions for investment
advisory fees, mortality and expense risk fees and the administrative charge,
but does not include a deduction of any applicable annual administrative fees.
Because of these deductions, the yield for the Money Market Sub-account will be
lower than the yield for the corresponding Fund of the Conseco Series Trust.
The Money Market Sub-account's effective yield may appear in sales material
and advertising for the same seven-day period, determined on a compound basis.
The effective yield is calculated by compounding the unannualized base period
return by adding one to the base period return, raising the sum to a power equal
to 365 divided by 7, and subtracting one from the result.
The yield on the Money Market Sub-account will generally fluctuate on a
daily basis. Therefore, the yield for any given past period is not an indication
or representation of future yields or rates of return. The actual <PAGE> yield
is affected by changes in interest rates on money market securities, average
Sub-account maturity, the types and quality of Portfolio securities held by the
corresponding Fund of the Conseco Series Trust and its operating expenses.
The Conseco Series Trust Asset Allocation, Common Stock, Corporate Bond,
and Government Securities Portfolios; The Alger American Fund Growth, Leveraged
AllCap, MidCap Growth, and Small Capitalization Portfolios; the Berger IPT -
100, Berger IPT - Growth and Income, and Berger IPT - Small Company Growth
Funds; the Dreyfus Socially Responsible Growth Fund, Inc.; the Dreyfus Stock
Index Fund; the Federated Insurance Series High Income Bond, International
Equity, and Utility Funds; the Janus Aspen Series Aggressive Growth, Growth, and
Worldwide Growth Portfolios; and the Van Eck Worldwide Insurance Trust Gold and
Natural Resources, Worldwide Bond, Worldwide Emerging Markets, and Worldwide
Hard Assets Funds may advertise investment performance figures, including yield.
Each Sub-account's yield will be based upon a stated 30-day period and will be
computed by dividing the net investment income per accumulation unit earned
during the period by the maximum offering price per accumulation unit on the
last day of the period, according to the following formula:
YIELD = 2 ((A-B/CD) + 1)^6 -1 Where:
A = the dividends and interest earned during the period.
B = the expenses accrued for the period (net of reimbursements,
if any).
C = the average daily number of accumulation units outstanding
during the period that were entitled to receive dividends.
D = the maximum offering price per accumulation unit on the
last day of the period.
CALCULATION OF TOTAL RETURN QUOTATIONS
Great American Reserve may include certain total return quotations for one
or more of the Conseco Series Trust Asset Allocation, Common Stock, Corporate
Bond, and Government Securities Portfolios; The Alger American Fund Growth,
Leveraged AllCap, MidCap Growth, and Small Capitalization Portfolios; the Berger
IPT - 100, Berger IPT - Growth and Income, and Berger IPT - Small Company Growth
Funds; the Dreyfus Socially Responsible Growth Fund, Inc.; the Dreyfus Stock
Index Fund; the Federated Insurance Series High Income Bond, International
Equity, and Utility Funds; the Janus Aspen Series Aggressive Growth, Growth, and
Worldwide Growth Portfolios; and the Van Eck Worldwide Insurance Trust Gold and
Natural Resources, Worldwide Bond, Worldwide Emerging Markets, and Worldwide
Hard Assets Funds in advertising, sales literature or reports to Contract Owners
or prospective purchasers. Such total return quotations will be expressed as the
average annual rate of total return over one-, five- and 10-year periods ended
as of the end of the immediately preceding calendar quarter, and as the dollar
amount of annual total return on a year-to-year, rolling 12-month basis ended as
of the end of the immediately preceding calendar quarter.
Average annual total return quotations are computed according to the
following formula:
P (1+T)^n = ERV Where:
P = beginning purchase payment of $1,000
T = average annual total return
n = number of years in period
ERV = ending redeemable value of a hypothetical $1,000 purchase
payment made at the beginning of the one-, five- or 10-year
period at the end of the one-, five- or 10-year period (or
fractional portion thereof).
<PAGE>
<TABLE>
INDIVIDUAL AND GROUP FLEXIBLE PREMIUM PAYMENT VARIABLE ANNUITY
<CAPTION>
Average Annual Total Returns
1 Year 5 Years
Variable Account Sub-accounts (1) 1/1/95-12/31/95 1/1/91-12/31/95
<S> <C> <C>
Conseco Series Trust
Asset Allocation Portfolio.............................. 18.00% 15.02%(2)
Common Stock Portfolio.................................. 22.32% 21.33%(2)
Corporate Bond Portfolio................................ 6.11% 4.21%(2)
Government Securities Portfolio......................... 5.31% 3.50%(2)
The Alger American Fund
Alger American Leveraged AllCap Portfolio............... 52.63%(3) N/A
Alger American Small Capitalization Portfolio........... 19.35%(3) N/A
The Dreyfus Socially Responsible Growth Fund, Inc........... 12.08%(3) N/A
Dreyfus Stock Index Fund.................................... 9.29%(3) N/A
Federated Insurance Series
Federated High Income Bond Fund II...................... (4.97)%(3) N/A
Federated International Equity Fund II.................. (11.19)%(3) N/A
Federated Utility Fund II............................... 3.63%(3) N/A
Janus Aspen Series
Aggressive Growth Portfolio............................. 27.39%(3) N/A
Growth Portfolio........................................ 10.88%(3) N/A
Worldwide Growth Portfolio.............................. 18.06%(3) N/A
Van Eck Worldwide Insurance Trust
Gold and Natural Resources Fund......................... (3.35)%(3) N/A
Worldwide Bond Fund..................................... (12.21)%(3) N/A
Worldwide Hard Assets Fund.............................. (7.56)%(3) N/A
<FN>
(1) No information is provided with respect to the Sub-accounts investing in
The Alger American Fund Growth and Midcap Growth Portfolios; the Berger IPT
- 100, Berger IPT - Growth and Income, and Berger IPT - Small Company
Growth Funds; or the Van Eck Worldwide Insurance Trust Worldwide Emerging
Markets Fund because such Portfolios and Funds were not available as of
December 31, 1995.
(2) Since inception (July 25, 1994).
(3) Since inception (June 1, 1995).
</TABLE>
OTHER PERFORMANCE DATA
Great American Reserve may from time to time also illustrate average annual
total returns in a non-standard format in conjunction with the standard format
described above. The non-standard format will be identical to the standard
format except that the withdrawal charge percentage will be assumed to be zero.
All non-standard performance data will only be advertised if the standard
performance data for the same period, as well as for the required periods, is
also illustrated.
Performance data for the Variable Account investment options may be
compared in advertisements, sales literature and reports to contract owners,
with the investment returns on various mutual funds, stocks, bonds, certificates
of deposit, tax free bonds, or common stock and bond indices, and other groups
of variable annuity separate accounts or other investment products tracked by
Morningstar, Inc., a widely used independent research firm which ranks mutual
funds and other investment companies by overall performance, investment
objectives, and assets, or tracked by other services, <PAGE> companies,
publications, or persons who rank such investment companies on overall
performance or other criteria.
Reports and promotional literature may also contain other information,
including the effect of tax-deferred compounding on an investment option's
performance returns, or returns in general, which may be illustrated by graphs,
charts or otherwise, and which may include a comparison, at various points in
time, of the return from an investment in a Contract (or returns in general) on
a tax-deferred basis (assuming one or more tax rates) with the return on a
taxable basis.
Reports and promotional literature may also contain the ratings Great
American Reserve has received from independent rating agencies. However, Great
American Reserve does not guarantee the investment performance of the Variable
Account investment options. <TABLE> INDIVIDUAL AND GROUP FLEXIBLE PREMIUM
PAYMENT VARIABLE ANNUITY <CAPTION>
Gross Average Annual Total Returns
1 Year 5 Years
Variable Account Sub-accounts (1) 1/1/95-12/31/95 1/1/91-12/31/95
<S> <C> <C>
Conseco Series Trust
Asset Allocation Portfolio.............................. 29.67% 22.86%(2)
Common Stock Portfolio.................................. 34.42% 29.60%(2)
Corporate Bond Portfolio................................ 16.61% 11.32%(2)
Government Securities Portfolio......................... 15.72% 10.55%(2)
The Alger American Fund
Alger American Leveraged AllCap Portfolio............... 79.28%(3) N/A
Alger American Small Capitalization Portfolio........... 40.19%(3) N/A
The Dreyfus Socially Responsible Growth Fund, Inc........... 31.65%(3) N/A
Dreyfus Stock Index Fund.................................... 28.37%(3) N/A
Federated Insurance Series
Federated High Income Bond Fund II...................... 11.63%(3) N/A
Federated International Equity Fund II.................. 4.32%(3) N/A
Federated Utility Fund II............................... 21.72%(3) N/A
Janus Aspen Series
Aggressive Growth Portfolio............................. 49.63%(3) N/A
Growth Portfolio........................................ 30.24%(3) N/A
Worldwide Growth Portfolio.............................. 38.68%(3) N/A
Van Eck Worldwide Insurance Trust
Gold and Natural Resources Fund......................... 13.52%(3) N/A
Worldwide Bond Fund..................................... 3.12%(3) N/A
Worldwide Hard Assets Fund.............................. 8.58%(3) N/A
<FN>
(1) No information is provided with respect to the Sub-accounts investing in
The Alger American Fund Growth and Midcap Growth Portfolios; the Berger IPT
- 100, Berger IPT - Growth and Income, and Berger IPT - Small Company
Growth Funds; or the Van Eck Worldwide Insurance Trust Worldwide Emerging
Markets Fund because such Portfolios and Funds were not available as of
December 31, 1995.
(2) Since inception (July 25, 1994).
(3) Since inception (June 1, 1995).
</TABLE>
<PAGE>
FINANCIAL STATEMENTS
Audited Financial Statements of Great American Reserve Variable Annuity and
Great American Reserve Insurance Company as of December 31, 1995, are included
herein.
INDEX TO FINANCIAL STATEMENTS
Page
Great American Reserve Variable Annuity
Account E
Report of Independent Accountants......................................F-1
Statement of Assets and Liabilities
as of December 31, 1995...........................................F-2
Statements of Operations for the Year Ended
December 31, 1995 and the Period
From July 25, 1994 to December 31, 1994............................F-4
Statements of Changes in Net Assets for the
Year Ended December 31, 1995 and
the Period From July 25, 1994 to
December 31, 1994..................................................F-5
Notes to Financial Statements..........................................F-6
Great American Reserve Insurance Company
Report of Independent Accountants......................................F-8
Balance Sheet-Statutory Basis
as of December 31, 1995 and 1994...................................F-9
Statement of Operations and Changes in
Capital and Surplus-Statutory Basis
for the Years Ended December 31, 1995
and 1994..........................................................F-10
Statement of Cash Flows-Statutory Basis
for the Years Ended December 31, 1995
and 1994..........................................................F-11
Notes to Statutory Basis Financial Statements.........................F-12
Report of Independent Accountants
TO THE BOARD OF DIRECTORS OF GREAT AMERICAN RESERVE INSURANCE COMPANY AND
CONTRACT OWNERS OF GREAT AMERICAN RESERVE VARIABLE ACCOUNT E
We have audited the accompanying statement of assets and liabilities of
Great American Reserve Variable Annuity Account E (the "Account") as of December
31, 1995, and the related statements of operations and changes in net assets for
the year ended December 31, 1995 and for the period from July 25, 1994 to
December 31, 1994. These financial statements are the responsibility of the
Account's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of portfolio shares owned at December 31, 1995 by correspondence
with custodians. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Great American Reserve
Variable Annuity Account E as of December 31, 1995, and the results of its
operations and the changes in its net assets for the year ended December 31,
1995 and for the period from July 25, 1994 to December 31, 1994, in conformity
with generally accepted accounting principles.
/S/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Indianapolis, Indiana
February 16, 1996
<PAGE>
<TABLE>
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT E
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
<S><C>
Assets:
Investments in portfolio shares, at net asset value (Note 2):
The Alger American Fund:
Leveraged AllCap Portfolio, 16,745.6 shares, (cost - $287,613).......................... $ 291,875
Small Capitalization Portfolio, 16,030.1 shares, (cost - $647,732)...................... 631,746
Conseco Series Trust:
Asset Allocation Portfolio, 50,090.7 shares, (cost - $636,902) ......................... 620,654
Common Stock Portfolio, 77,678.5 shares, (cost - $1,532,335)............................ 1,463,785
Corporate Bond Portfolio, 40,319.3 shares, (cost - $404,056)............................ 409,154
Government Securities Portfolio, 2,858.1 shares, (cost - $35,030)....................... 35,375
Money Market Portfolio, 677,989.7 shares, (cost - $677,990)............................. 677,990
Dreyfus Stock Index Fund, 12,918.7 shares, (cost - $213,893)................................ 222,202
The Dreyfus Socially Responsible Growth Fund, Inc., 1,486.3 shares, (cost - $25,711)........ 25,729
Federated Investors Insurance Management Series:
Corporate Bond Fund, 2,877.2 shares, (cost - $28,022)................................... 28,168
International Stock Fund, 3,648.8 shares, (cost - $36,871).............................. 37,765
Utility Fund, 1,192.7 shares, (cost - $12,534).......................................... 13,155
The Janus Aspen Series:
Aggressive Growth Portfolio, 9,075.7 shares, (cost - $146,652).......................... 155,013
Growth Portfolio, 12,035.3 shares, (cost - $159,509).................................... 161,875
Worldwide Growth Portfolio, 12,326.8 shares, (cost - $180,179).......................... 188,724
The Van Eck Worldwide Insurance Trust:
Gold and Natural Resources Fund, 5,139.8 shares, (cost - $70,723)....................... 74,114
Worldwide Bond Fund, 11,901.2 shares, (cost - $131,934)................................. 132,579
Worldwide Hard Assets Fund, 14,625.2 shares, (cost - $142,947).......................... 154,734
Total assets....................................................................... 5,324,637
Liabilities:........................................................................................
Amounts due to Great American Reserve Insurance Company ........................................ 4,979
-------------
Net assets (Note 6) .................................................................... $ 5,319,658
=============
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT E
STATEMENT OF ASSETS AND LIABILITIES-CONT.
December 31, 1995
<CAPTION>
Units Unit Value
<S> <C> <C> <C>
Net assets attributable to:
Contract owners' deferred annuity reserves:
The Alger American Fund:
Leveraged AllCap Portfolio................................ 207,147.1 $1.407908 $ 291,644
Small Capitalization Portfolio............................ 517,902.5 1.218931 631,287
Conseco Series Trust:
Asset Allocation Portfolio................................ 461,875.8 1.342379 620,012
Common Stock Portfolio.................................... 1,009,305.4 1.448804 1,462,286
Corporate Bond Portfolio.................................. 350,622.6 1.165727 408,730
Government Securities Portfolio........................... 30,613.7 1.154244 35,335
Money Market Portfolio.................................... 641,747.3 1.055784 677,546
Dreyfus Stock Index Fund...................................... 191,751.9 1.157620 221,976
The Dreyfus Socially Responsible Growth Fund, Inc............. 21,878.1 1.174867 25,704
Federated Investors Insurance Management Series:
Corporate Bond Fund....................................... 26,380.0 1.066579 28,136
International Stock Fund.................................. 36,797.6 1.025080 37,721
Utility Fund.............................................. 11,710.8 1.122090 13,141
The Janus Aspen Series:
Aggressive Growth Portfolio............................... 122,277.5 1.266394 154,851
Growth Portfolio.......................................... 138,532.2 1.167465 161,732
Worldwide Growth Portfolio................................ 155,653.1 1.211204 188,527
The Van Eck Worldwide Insurance Trust:
Gold and Natural Resources Fund........................... 68,730.0 1.077158 74,034
Worldwide Bond Fund....................................... 130,071.0 1.018153 132,432
Worldwide Hard Assets Fund................................ 147,283.0 1.049435 154,564
--------------
Net assets ................................................................................... $ 5,319,658
==============
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT E
STATEMENTS OF OPERATIONS
For the Year Ended December 31, 1995 and the Period From July 25, 1994 to
December 31, 1994 <CAPTION>
Year Ended July 25, 1994 to
December 31, December 31,
1995 1994
<S> <C> <C>
Investment income:
Dividends from investments in portfolio shares........................................ $ 268,996 $ 467
Expenses:
Mortality and expense risk fees....................................................... 17,815 127
Administrative fees................................................................... 2,137 15
Total expenses.................................................................... 19,952 142
Net investment income......................................................... 249,044 325
------------ ------------
Net realized gain (loss) and unrealized appreciation (depreciation) on
investments:
Net realized gain on sale of investments in portfolio shares.......................... 72,012 -0-
Net change in unrealized appreciation (depreciation) of investments in
portfolio shares.................................................................. (46,944) 948
------------ ------------
Net gain on investments in portfolio shares................................... 25,068 948
------------ ------------
Net increase in net assets from operations................................ $ 274,112 $ 1,273
<FN> ============ ============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT E
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Year Ended December 31, 1995 and the Period From July 25, 1994 to
December 31, 1994
Year Ended July 25, 1994 to
December 31, December 31,
1995 1994
<S> <C> <C>
Changes from operations:
Net investment income................................................................. $ 249,044 $ 325
Net realized gain on sale of investments.............................................. 72,012 -0-
Net change in unrealized appreciation (depreciation) of investments................... (46,944) 948
-------------- ------------
Net increase in net assets from operations........................................ 274,112 1,273
Changes from principal transactions:
Net contract purchase payments........................................................ 4,933,143 77,432
Contract redemptions.................................................................. (9,667) -0-
Net transfers from fixed account...................................................... 42,904 461
-------------- ------------
Net increase in net assets from principal transactions............................ 4,966,380 77,893
-------------- ------------
Net increase in net assets.................................................... 5,240,492 79,166
Net assets, beginning of period........................................................... 79,166 -0-
-------------- ------------
Net assets, end of period (Note 6)........................................................ $ 5,319,658 $ 79,166
============== ============
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Great American Reserve Variable Annuity Account E
Notes to Financial Statements
(1) GENERAL
Great American Reserve Variable Annuity Account E ("Account E") is
registered under the Investment Company Act of 1940, as amended, as a unit
investment trust. Account E was established on November 12, 1993 and commenced
operations on July 25, 1994 as a segregated investment account for individual
and group variable annuity contracts which are registered under the Securities
Act of 1933. The operations of Account E are included in the operations of Great
American Reserve Insurance Company (the "Company") pursuant to the provisions of
the Texas Insurance Code. The Company is an indirect wholly owned subsidiary of
Conseco, Inc., a publicly-held specialized financial services holding company
listed on the New York Stock Exchange.
On June 1, 1995, the following investment options were available:
THE ALGER AMERICAN FUND
Leveraged AllCap Portfolio
Small Capitalization Portfolio
THE CONSECO SERIES TRUST
Asset Allocation Portfolio
Common Stock Portfolio
Corporate Bond Portfolio
Government Securities Portfolio
Money Market Portfolio
DREYFUS STOCK INDEX FUND
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
FEDERATED INVESTORS INSURANCE MANAGEMENT SERIES
Corporate Bond Fund (High Yield)
International Stock Fund
Utility Fund
THE JANUS ASPEN SERIES
Aggressive Growth Portfolio
Growth Portfolio
Worldwide Growth Portfolio
THE VAN ECK WORLDWIDE INSURANCE TRUST
Gold and Natural Resources Fund
Worldwide Bond Fund
Worldwide Hard Assets Fund
Prior to June 1, 1995, Account E invested solely in shares of the
portfolios of the Conseco Series Trust.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investment Valuation, Transactions and Income
Investments in portfolio shares are valued using the net asset value of the
respective portfolios at the end of each New York Stock Exchange business day,
with the exception of regional business holidays. Investment share transactions
are accounted for on a trade date basis (the date the order to purchase or
redeem shares is executed) and dividend income is recorded on the ex-dividend
date. The cost of investments in portfolio shares sold is determined on a
first-in first-out basis. Account E does not hold any investments which are
restricted as to resale.
Net investment income and net realized gain (loss) and unrealized
appreciation (depreciation) on investments are allocated to the contracts on
each valuation date based on each contract's pro rata share of the assets of
Account E as of the beginning of the valuation date.
Federal Income Taxes
No provision for federal income taxes has been made in the accompanying
financial statements because the operations of Account E are included in the
total operations of the Company, which is treated as a life insurance company
for federal income tax purposes under the Internal Revenue Code. Net investment
income and realized gains (losses) are retained in Account E and are not taxable
until received by the contract owner or beneficiary in the form of annuity
payments or other distributions.
Annuity Reserves
Deferred annuity contract reserves are comprised of net contract purchase
payments less redemptions and benefits. These reserves are adjusted daily for
the net investment income and net realized gain (loss) and unrealized
appreciation (depreciation) on investments.
<PAGE>
Great American Reserve Insurance Company Account E
Notes to Financial Statements - Cont.
(3) PURCHASES AND SALES OF INVESTMENTS IN PORTFOLIO SHARES
The aggregate cost of purchases and proceeds from sales of investments in
portfolio shares for the year ended December 31, 1995 were $6,575,469 and
$1,353,396, respectively.
(4) DEDUCTIONS AND EXPENSES
Although periodic retirement payments to contract owners vary according to
the investment performance of the portfolios, such payments are not affected by
mortality or expense experience because the Company assumes the mortality and
expense risks under the contracts.
The mortality risk assumed by the Company results from the life annuity
payment option in the contracts in which the Company agrees to make annuity
payments regardless of how long a particular annuitant or other payee lives. The
annuity payments are determined in accordance with annuity purchase rate
provisions established at the time the contracts are issued. Based on the
actuarial determination of expected mortality, the Company is required to fund
any deficiency in the annuity payment reserves from its general account assets.
The expense risk assumed by the Company is the risk that the deductions for
sales and administrative expenses may prove insufficient to cover the actual
sales and administrative expenses.
The Company deducts daily from Account E a fee, which is equal on an annual
basis to 1.25 percent of the daily value of the total investments of Account E,
for assuming the mortality and expense risks. These fees were $17,815 and $127
for the year ended December 31, 1995 and the period from July 25, 1994 to
December 31, 1994, respectively.
Pursuant to an agreement between Account E and the Company (which may be
terminated by the Company), the Company provides sales and administrative
services to Account E, as well as a minimum death benefit prior to retirement.
The Company may deduct a percentage of amounts surrendered to cover sales
expenses. The percentage varies up to 9.00 percent based upon the number of
years the contract has been held. In addition, the Company deducts units from
individual contracts annually and upon full surrender to cover an administrative
fee of $30. The Company also deducts daily from Account E a fee, which is equal
on an annual basis to 0.15 percent of the daily value of the total investments
of Account E, for administrative expenses. These expenses were $2,137 and $15
for the year ended December 31, 1995 and the period from July 25, 1994 to
December 31, 1994, respectively.
(5) OTHER TRANSACTIONS WITH AFFILIATES
GARCO Equity Sales, Inc., an affiliate of the Company, is the principal
underwriter and performs all variable annuity sales functions on behalf of the
Company.
(6) NET ASSETS
Net assets consisted of the following at December 31, 1995:
Proceeds from the sales of units
since organization, less cost
of units redeemed............................. $ 5,044,273
Undistributed net investment income............... 249,369
Undistributed net realized gains
on sales of investments....................... 72,012
Net unrealized depreciation
of investments................................ (45,996)
-----------------
Net assets................................ $ 5,319,658
=================
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Great American Reserve Insurance Company
Carmel, Indiana
We have audited the accompanying statutory basis balance sheet of Great
American Reserve Insurance Company (a wholly-owned subsidiary of Jefferson
National Life Insurance Company of Texas, which is an indirect wholly-owned
subsidiary of Conseco, Inc.) as of December 31, 1995 and 1994, and the related
statutory basis statements of operations and changes in capital and surplus and
cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As described in Note 1, these financial statements have been prepared in
conformity with accounting practices prescribed or permitted by the National
Association of Insurance Commissioners and the Texas Department of Insurance,
which is a comprehensive basis of accounting other than generally accepted
accounting principles.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the admitted assets, liabilities, and capital and
surplus of Great American Reserve Insurance Company as of December 31, 1995 and
1994, and the results of its operations and its cash flows for the years then
ended in conformity with accounting practices prescribed or permitted by the
National Association of Insurance Commissioners and the Texas Department of
Insurance.
/S/ COOPERS & LYBRAND L.L.P.
Coopers & Lybrand L.L.P.
Indianapolis, Indiana
March 20, 1996
<PAGE>
<TABLE>
GREAT AMERICAN RESERVE INSURANCE COMPANY
Balance Sheet-Statutory Basis
December 31, 1995 and 1994 (Amounts in
thousands, except share data)
<CAPTION>
1995 1994
---- ----
ADMITTED ASSETS
<S> <C> <C>
Cash and investments:
Bonds $2,060,828 $2,052,243
Preferred stocks 13,879 10,432
Common stocks 256 426
Mortgage loans on real estate 111,541 113,990
Real estate 125 125
Policy loans 84,664 81,549
Cash and short-term investments 19,006 13,531
Other invested assets 12,758 22,753
--------- ----------
Total cash and investments 2,303,057 2,295,049
Insurance premiums deferred and uncollected 10,181 11,910
Accrued investment income 33,973 34,665
Other assets 6,833 5,114
Assets held in separate accounts 137,475 91,375
--------- ---------
Total admitted assets $2,491,519 $2,438,113
========== ==========
LIABILITIES, CAPITAL AND SURPLUS
Liabilities:
Policy and contract liabilities $1,999,662 $2,103,497
Interest maintenance reserve 64,654 49,660
Federal income taxes 7,851 (3,267)
Asset valuation reserve 26,229 23,173
Investment borrowings and interest thereon 82,365 -0-
Other liabilities 17,127 17,017
Liabilities related to separate accounts 137,475 91,375
--------- ---------
Total liabilities 2,335,363 2,281,455
--------- ---------
Capital and surplus:
Common stock, $4.80 par value, 1,065,000 shares
authorized, 1,043,565 shares issued and outstanding 5,009 5,009
Preferred stock, $100 par value, 40,000 shares
authorized, 2,538 shares issued 254 254
Paid in surplus 59,562 59,562
Unassigned surplus 112,142 112,644
Treasury stock at cost, 2,538 preferred shares (20,811) (20,811)
--------- ---------
Total capital and surplus 156,156 156,658
--------- ---------
Total liabilities, capital and surplus $2,491,519 $2,438,113
========== ==========
<FN>
The accompanying notes are an integral part of the statutory basis financial statements.
</TABLE>
<PAGE>
<TABLE>
GREAT AMERICAN RESERVE INSURANCE COMPANY
Statement of Operations and Changes in Capital and Surplus-Statutory Basis
For the Years Ended December 31, 1995 and 1994
(Amounts in thousands)
<CAPTION>
1995 1994
<S> <C> <C>
Income:
Premiums and annuity considerations $184,407 $186,627
Considerations for supplementary contracts without life
contingencies and dividend accumulations 26,573 19,342
Net investment income 186,307 181,002
Commissions and expense allowances on reinsurance ceded 7,033 9,191
Other income 2,417 1,308
--------- --------
Total income 406,737 397,470
--------- --------
Benefits and expenses:
Policy benefits 307,885 245,147
Increase (decrease) in future policy benefit reserves (99,062) 27,681
Net transfer of annuity reserves under terminated
coinsurance agreement 71,123 -0-
Commissions 17,163 18,144
Other operating costs and expenses 35,335 33,935
Net transfers to separate accounts 14,874 10,675
Dividends to policyholders 1,944 1,872
------- -------
Total benefits and expenses 349,262 337,454
------- -------
Income from operations before federal income taxes 57,475 60,016
Federal income taxes (17,992) (18,821)
Net realized capital losses, net of tax and transfer to IMR (1,047) (3,489)
--------- ---------
Net income $ 38,436 $ 37,706
========= =========
Capital and surplus, beginning of year $156,658 $153,830
Net income 38,436 37,706
Net unrealized capital gains 1,737 1,426
Decrease in non-admitted assets 256 48
Decrease in liability for reinsurance in unauthorized companies -0- 797
Decrease in reserves on account of change in valuation basis 3,320 -0-
Increase in asset valuation reserve (3,056) (3,124)
Dividends to shareholder (41,195) (34,025)
--------- ---------
Capital and surplus, end of year $156,156 $156,658
========= ========
<FN>
The accompanying notes are an integral part of the statutory basis financial statements.
</TABLE>
<PAGE>
<TABLE>
GREAT AMERICAN RESERVE INSURANCE COMPANY
Statement of Cash Flows-Statutory Basis
For the Years Ended December 31, 1995 and 1994
(Amounts in thousands)
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operations:
Premiums and annuity considerations $ 186,285 $ 186,245
Net investment income 184,295 179,205
Other income 35,929 30,053
Life and accident and health claims (56,848) (57,127)
Surrender benefits and other withdrawals (198,328) (140,878)
Other benefits to policyholders (53,870) (43,321)
Commissions and other expenses (50,899) (52,922)
Net transfers to separate accounts (15,349) (10,490)
Dividends to policyholders (1,704) (1,548)
Federal income taxes (6,874) (19,166)
Net increase in policy loans (3,115) (1,916)
----------- -----------
Net cash provided from operations 19,522 68,135
Proceeds from investments sold, matured or repaid, net of tax 2,257,672 1,422,990
Investment borrowings, net 82,245 (58,085)
Other 2,035 9,014
----------- ----------
Total cash provided 2,361,474 1,442,054
----------- ----------
Application of cash:
Purchase of investments 2,238,161 1,496,908
Dividends to shareholder 41,195 34,024
Net transfer of annuity reserves under terminated
coinsurance agreement 71,123 -0-
Other 5,520 4,117
---------- ----------
Total cash applied 2,355,999 1,535,049
---------- ----------
Net increase (decrease) in cash and short-term investments 5,475 (92,995)
Cash and short-term investments, beginning of year 13,531 106,526
---------- ----------
Cash and short-term investments, end of year $ 19,006 $ 13,531
============= =============
<FN>
The accompanying notes are an integral part of the statutory basis financial statements.
</TABLE>
<PAGE>
GREAT AMERICAN RESERVE INSURANCE COMPANY
NOTES TO STATUTORY BASIS FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
Basis of Presentation
Great American Reserve Insurance Company (the "Company"), a life insurance
company domiciled in the State of Texas, is a wholly-owned subsidiary of
Jefferson National Life Insurance Company of Texas ("Jefferson National of
Texas"), a life insurance company domiciled in the State of Texas and an
indirect wholly-owned subsidiary of Conseco, Inc., a publicly held specialized
financial services holding company.
On August 31, 1995, Conseco purchased all of the shares of common stock that
it did not previously own (50.5%) of CCP Insurance, Inc., the Company's indirect
parent, and effected a merger, with Conseco as the surviving company.
The accompanying financial statements have been prepared in conformity with
accounting practices prescribed or permitted by the National Association of
Insurance Commissioners and the State of Texas Department of Insurance. These
practices differ in certain respects from generally accepted accounting
principles ("GAAP"). The significant differences which impact net income or
surplus are:
a. Policy acquisition costs are charged to operations as incurred rather than
deferred and amortized over the lives of the policies.
b. Future policy benefit liabilities are based on statutory mortality and
interest requirements and may differ from liabilities based on reasonably
conservative estimates of expected mortality, interest and withdrawals for
traditional life insurance products and the fund balances of universal life
insurance products.
c. Deferred income taxes are not provided for temporary differences in
reporting of income and expenses for financial reporting and tax purposes.
d. The asset valuation reserve ("AVR"), which includes unrealized capital
gains and losses and credit-related realized capital gains and losses, net
of tax, on all invested assets excluding cash, policy loans and premium
notes, is reported as a liability with changes reported in unassigned
surplus.
The interest maintenance reserve ("IMR"), which consists of
interest-related realized capital gains and losses, net of tax, to be
amortized into income over the approximate remaining lives of the fixed
income securities sold, is reported as a liability.
e. Certain assets designated as "non-admitted" assets are reported as a
reduction of unassigned surplus.
f. Fixed maturities designated as available for sale are valued at amortized
cost rather than market value.
g. Premiums on interest sensitive and annuity policies are recognized as
income rather than policy liabilities.
The preparation of statutory basis financial statements requires management
to make estimates and assumptions that affect the reported assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the periods presented. Significant estimates and assumptions are utilized in the
calculation of insurance liabilities. Actual experience could differ from the
estimates and assumptions utilized which could have a material impact on the
financial statements. <PAGE> Recognition of Premiums
Premiums on traditional life, interest sensitive and annuity policies are
recognized as income on the policy anniversary dates or when received; group
life and individual and group health premiums are earned pro-rata over the terms
of the policies.
Insurance Liabilities
The liabilities for traditional life and interest sensitive policies, all
developed by actuarial methods, are established and maintained on the basis of
published tables using assumed interest rates and valuation methods that will
provide, in the aggregate, reserves that are greater than or equal to the
minimum valuation required by law or the guaranteed policy cash values.
Investments
Investments are valued on the following bases:
Bonds not backed by other loans-at amortized cost using the interest
method.
Loan-backed bonds and structured securities-at amortized cost using the
interest method including anticipated prepayments at the date of purchase;
significant changes in estimated cash flows from the original purchase
assumptions are accounted for using the specific identification method.
Preferred stocks-at cost.
Common stocks-at market.
Property acquired in satisfaction of debt-at depreciated cost, less
encumbrances.
Mortgage loans on real estate-at the aggregate unpaid balance.
Policy loans-at the aggregate unpaid balance.
Other invested assets-at the aggregate unpaid balance or at equity.
Prepayment assumptions for loan-backed bonds and structured securities were
obtained from the broker at the date of purchase. These assumptions are
generally consistent with the current interest rate and economic environment.
The prospective adjustment method is used to value these securities.
Realized gains or losses from the sale of investments are recognized on the
specific identification basis. Changes in the market value of common stocks are
reported as unrealized capital gains or losses and, accordingly, have no effect
on net income.
The Company uses the grouped method of amortization for interest related
gains and losses arising from the sale of fixed income investments.
<PAGE>
Fair Values of Financial Instruments
The following methods and assumptions were used by the Company in determining
the estimated fair values of investments:
Investment securities-for bonds, preferred stocks and common stocks, the
estimated fair values were determined using quoted market prices and
independent pricing services, where available. For investment securities
for which such quotes are not available, the estimated fair vales were
determined by discounting expected future cash flows using a current market
rate appropriate for the yield, credit quality and, for bonds, the
maturity.
Mortgage loans-Estimated fair values were determined by discounting
expected cash flows based on interest rates currently being offered for
similar loans to borrowers with similar credit ratings. Loans with similar
characteristics were aggregated in the calculations.
Real estate, policy loans, short-term investments and other invested
assets-The statutory carrying values of these assets approximated their
fair values as of December 31, 1995 and 1994.
<TABLE>
The carrying and estimated fair values of investments were as follows (amounts in thousands):
<CAPTION>
December 31, 1995 December 31, 1994
------------------------- ------------------------
Estimated Estimated
Carrying Fair Carrying Fair
Value Value Value Value
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Bonds $2,060,828 $2,110,649 $2,052,243 $1,881,555
Preferred stocks 13,879 13,596 10,432 10,044
Common stocks 256 256 426 426
Mortgage loans on real estate 111,541 117,362 113,990 112,152
Real estate 125 125 125 125
Policy loans 84,664 84,664 81,549 81,549
Short-term investments 30,806 30,806 24,187 24,187
Other invested assets 12,758 12,758 22,753 22,753
---------- ---------- ---------- ----------
Total investments $2,314,857 $2,370,216 $2,305,705 $2,132,791
========== ========== ========== ==========
</TABLE>
- --------
The statutory values of the liabilities for investment contracts of
$1,324,691,278 and $1,418,383,202 as of December 31, 1995 and 1994,
respectively, approximated their fair values because interest rates credited on
the vast majority of account balances approximate current rates paid on
investment contracts and are not generally guaranteed beyond one year.
Investments in Affiliates
On January 2, 1995, the Company sold 100% of the common stock of GARCO
Equity Sales, Inc., to an affiliate.
Separate Accounts
Separate accounts represent funds for which investment income and gains
and losses accrue directly to the policyholders. The assets of each account
are legally segregated and are not subject to claims which may arise out of
other business of the Company.
<PAGE>
<TABLE>
2. INVESTMENTS
The carrying and estimated fair values of bonds were as follows (amounts in thousands):
<CAPTION>
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
--------- --------- ---------- ---------
<S> <C> <C> <C> <C>
December 31, 1995
Governments (a) $ 136,962 $ 4,419 $ 319 $ 141,062
States, Territories and Possessions (b) 10,448 337 -0- 10,785
Political Subdivisions of States,
Territories and Possessions (b) 6,909 316 -0- 7,225
Special Revenue and Special
Assessment Obligations 556,152 8,631 2,570 562,213
Public Utilities (c) 350,410 12,887 2,357 360,940
Industrial and Miscellaneous (c) 999,948 40,865 12,389 1,028,424
------- ------ ------ ---------
Totals $2,060,828 $67,456 $ 17,635 $2,110,649
========== ======= ========= ==========
December 31, 1994
Governments (a) $ 95,030 $ 740 $ 7,098 $ 88,672
States, Territories and Possessions (b) 15,428 -0- 957 14,471
Political Subdivisions of States,
Territories and Possessions (b) 5,121 4 129 4,996
Special Revenue and Special
Assessment Obligations 610,661 2,989 54,070 559,580
Public Utilities (c) 416,092 3,025 38,821 380,296
Industrial and Miscellaneous (c) 909,911 2,992 79,363 833,540
------- ----- ------ -------
Totals $2,052,243 $ 9,750 $180,438 $1,881,555
========== ======== ======== ==========
<FN>
(a) Including all obligations guaranteed by governments
(b) Direct and guaranteed
(c) Unaffiliated
</TABLE>
The carrying and estimated fair values of bonds at December 31, 1995 by
contractual maturity are shown below. Actual maturities may differ from
contractual maturities because the borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties and because most
mortgage-backed securities provide for periodic payments throughout their lives.
(Amounts in thousands)
Estimated
Carrying Fair
Value Value
-------- --------
Due in one year or less $ 3,050 $ 3,123
Due after one year through five years 109,972 113,769
Due after five years through ten years 409,723 420,531
Due after ten years 872,082 898,286
---------- ----------
Subtotal 1,394,827 1,435,709
Mortgage-backed securities 666,001 674,940
---------- ----------
Total bonds $2,060,828 $2,110,649
========== ==========
<PAGE>
The Company's investment in its unconsolidated subsidiary was equal to the
subsidiary's equity and amounted to $76,192 at December 31, 1994. The cost of
all other common stocks held by the Company at December 31, 1995 and 1994 was
$20,482 and $498,144, respectively.
At December 31, 1995, the mortgage loan balance was primarily comprised of
commercial loans. Approximately 30 percent, 22 percent and 14 percent of the
mortgage loan balance were on properties located in California, Indiana and
Texas, respectively. No other state comprised greater than 6 percent of the
mortgage loan balance.
The Company had assets with statement values of $16,274,109 and $16,577,123
at December 31, 1995 and 1994, respectively, on deposit with state regulatory
authorities to fulfill statutory requirements. <TABLE> Net investment income
consisted of the following (amounts in thousands): <CAPTION>
1995 1994
---- ----
<S> <C> <C>
Bonds $166,279 $159,569
Preferred stocks 1,651 439
Mortgage loans on real estate 11,520 11,982
Policy loans 5,417 5,228
Collateral loans -0- 160
Cash and short-term investments 2,651 3,765
Other invested assets 368 1,128
Miscellaneous 404 183
-------- --------
Gross investment income 188,290 182,454
Less investment expenses 6,618 4,633
-------- --------
Net investment income before amortization of IMR 181,672 177,821
Amortization of IMR 4,635 3,181
-------- --------
Net investment income $186,307 $181,002
======== ========
</TABLE>
<TABLE>
Net realized capital gains (losses) consisted of the following (amounts in thousands):
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Bonds $28,110 $ 4,935
Preferred stocks -0- (727)
Common stocks (21) 594
Mortgage loans on real estate 125 53
Real estate -0- (123)
Other invested assets 2,742 (2,970)
Federal income tax expense (12,375) (1,138)
---------- ---------
Net realized capital gains, net of tax 18,581 624
Transfer to IMR, net of tax (19,628) (4,113)
---------- ---------
Net realized capital losses, net of tax and transfer to IMR $ (1,047) $ (3,489)
========== =========
</TABLE>
In 1995, net realized capital gains on bonds consisted of $34,142,497 gross
realized gains and $6,032,521 gross realized losses. In 1994, net realized
capital gains on bonds consisted of $16,406,657 gross realized gains and
$11,472,023 gross realized losses.
At December 31, 1995, the Company had an outstanding liability for borrowed
money of $31,500,838 relating to reverse repurchase agreements with brokers to
sell and subsequently repurchase certain securities. These securities were sold
for cash with a specific date to repurchase securities of the same issuer with
an equivalent coupon rate, principal value, and maturity date. The securities
were repurchased in January 1996 with an average finance rate of 6.25%.
In addition, the Company had an outstanding liability for borrowed money of
$50,743,711 relating to dollar repurchase agreements with brokers to sell and
subsequently repurchase mortgage-backed securities. These securities were sold
for cash with a specific date to repurchase similar securities. Securities were
repurchased in January, 1996 with an average finance rate of 5.75%.
3. REINSURANCE
The Company reinsures certain of its risks with other companies which are
accounted for as transfers of risk. The Company retains a maximum of $500,000 of
coverage per individual life. The Company is contingently liable for any
reinsured claims for which the assuming company is unable to pay.
A block of single premium deferred annuities assumed by the Company in 1991
under a coinsurance agreement was recaptured effective September 30, 1995. The
Company transferred $71,122,854 in cash in exchange for the reserves released,
net of a recapture premium of $728,220. During 1995, the Company did not write
off any reinsurance balances due and did not report any income or expense as a
result of commutation of reinsurance. Amounts in the financial statements have
been reduced for reinsurance ceded on life and accident and health policies as
follows (amounts in thousands):
1995 1994
---- ----
Premiums $29,075 $35,397
Policy benefits 19,842 27,528
Policy and contract liabilities 31,715 36,738
4. FEDERAL INCOME TAXES
The Company's federal income tax return is consolidated with the following
entities: Jefferson National of Texas and Beneficial Standard Life Insurance
Company. The method of allocation between the companies is subject to a written
agreement approved by the Board of Directors. Allocation is based upon separate
return calculations with current credit for net losses and other tax attributes.
Intercompany tax balances are settled quarterly. The federal income tax
liability as of December 31, 1995 of $7,851,288 was payable to Jefferson
National of Texas. <PAGE>
A reconciliation of expected federal income tax expense to federal income tax
expense as shown in the statement of operations is as follows (amounts in
thousands):
1995 1994
---- ----
Computed "expected" federal income tax expense $20,116 $21,005
Tax adjustments:
Difference in statutory and tax basis of
reserves (1,041) (595)
Difference in statutory and tax basis of
deferred acquisition costs (330) 317
Taxes related to prior year 793 (554)
Difference in statutory and tax basis of
investment income (2,065) (2,050)
Other 519 698
-------- -------
Reported federal income tax expense $17,992 $18,821
======== =======
The Internal Revenue Service is currently examining the Company's 1993 and
1994 federal income tax returns. During 1995, the Company remitted $253,236 to
its parent for the Company's portion of the federal income tax assessment
arising from the 1991 and 1992 tax periods.
5. BENEFIT PLANS
The Company has no employee retirement plan or deferred compensation plan.
However, the Company's employees are eligible to participate in Conseco's 401(k)
savings plan. Company contributions, which match certain voluntary employee
contributions to the plan, totaled $537,707 and $139,861 for the year ended
December 31, 1995 and 1994, respectively. In addition, certain officers and
employees of the Company are included in Conseco's deferred compensation and
incentive stock option plans.
The Company provides certain health care and life insurance benefits
("postretirement benefits") for currently retired employees only. Health care
benefits for retirees under age 65 are generally the same as indemnity benefits
offered to active employees; health care benefits coordinate with Medicare
benefits for retirees 65 and older. These benefits are generally set at fixed
amounts.
Net postretirement benefit costs for the year ended December 31, 1995 and
1994 were $63,992 and $27,200, respectively, and included interest cost and
gains and losses arising from differences between actuarial assumptions and
actual experience. In 1994, an actuarial gain of $33,800 resulted from the
reduction of the initial health care cost trend rate from 17% to 12%, which was
recognized in net postretirement benefit expense. The Company made contributions
to the plan of $19,992 and $26,100 in 1995 and 1994, respectively, as claims
were incurred.
At December 31, 1995 and 1994, the unfunded postretirement benefit obligation
for retirees was $525,800 and $481,800, respectively, and was included in other
liabilities. The discount rate used in determining the accumulated
postretirement benefit obligation was 8.0% and the health care cost trend rate
was 12% graded to 5% over 12 years.
6. COMMITMENTS AND CONTINGENT LIABILITIES
The Company has given Crescent Realty Partners, a limited partnership created
to organize a number of limited partnerships to make equity investments in real
estate, a standby equity commitment of $5,000,000 until September 1997. The
Company had funded $4,848,837 of the commitment at December 31, 1995.
<PAGE>
The Company has given Hicks, Muse, Tate & Furst Equity Fund II, a limited
partnership created to make equity investments in a variety of corporations, a
standby equity commitment of $10,000,000 until January 1999. As of December 31,
1995, the Company had funded $7,218,686 of the commitment.
The Company has given Mountain Star Limited Liability Company, a limited
liability company created for land development, a construction loan commitment
of $11,000,000. Mountain Star had drawn and repaid $10,691,653 as of December
31, 1995.
The Company has committed no reserves to cover any contingent liabilities.
Various lawsuits against the Company may arise in the ordinary course of the
Company's business. Contingent liabilities arising from litigation, income taxes
and other matters are not considered material in relation to the financial
position of the Company.
7. RELATED PARTY TRANSACTIONS
During 1995 and 1994, the Company did not own any shares of an upstream
intermediate or ultimate parent, either directly or indirectly via a downstream
subsidiary, controlled or affiliated company.
The Company has not made any guarantees or undertakings for the benefit of an
affiliate which would result in a material contingent exposure of the Company's
or any affiliated insurer's assets to loss.
Under an investment advisory services agreement, an affiliate of the Company
manages the Company's investments, for which expenses totalled $3,947,284 and
$3,990,479 in 1995 and 1994, respectively. In addition, an affiliate of the
Company provides executive management services, for which expenses totalled
$450,000 in both 1995 and 1994. Also, another affiliate provides origination and
servicing for the Company's mortgage loans, for which expenses totalled $368,460
and $331,720 in 1995 and 1994, respectively. The Company also has a service
agreement in which another affiliate provides certain accounting, tax,
marketing, actuarial, legal, data processing and other functional support
services. Expenses under this agreement totalled $20,378,895 and $20,155,406 in
1995 and 1994, respectively.
8. CAPITAL AND SURPLUS
The maximum amount of dividends which can be paid by State of Texas life
insurance companies to shareholders without prior approval of the Insurance
Commissioner is the greater of statutory net gain from operations before
realized capital gains or losses for the preceding year or 10% of statutory
surplus as regards policyholders at the end of the preceding year. Statutory net
gain from operations before realized capital gains or losses for 1995 was
$39,483,045. Statutory surplus as regards policyholders as of December 31, 1995
was $156,155,029. The maximum dividend payout which may be made without prior
approval in 1995 is $39,483,045. However, due to the restrictions on dividends
within a twelve month period, the maximum dividend payout may not be made
without prior approval until June 26, 1996. <PAGE> <TABLE> 9. WITHDRAWAL
CHARACTERISTICS OF ANNUITY RESERVES AND DEPOSIT LIABILITIES
The withdrawal characteristics of annuity reserves and deposit fund liabilities were as follows:
<CAPTION>
December 31, 1995 December 31, 1994
----------------- -----------------
% of % of
Amount Total Amount Total
------------- ----- -------------- -----
<S> <C> <C> <C> <C>
Subject to discretionary withdrawal:
With market value adjustment $ -0- 0.0% $ -0- 0.0%
At book value less current surrender charge
of 5% or more 224,595,192 14.8% 348,180,613 22.2%
At market value 137,413,163 9.0% 91,788,309 5.9%
------------- ------ ------------- -----
Total with adjustment or at market value 362,008,355 23.8% 439,968,922 28.1%
At book value without adjustment
(surrender charge of less than 5%) 1,083,942,513 71.3% 1,054,201,281 67.4%
Not subject to discretionary withdrawal 74,637,004 4.9% 70,094,003 4.5%
-------------- ------ -------------- ------
Total (gross) 1,520,587,872 100.0% 1,564,264,206 100.0%
-------------- ====== -------------- ======
Reinsurance ceded -0- -0-
-------------- --------------
Total (net) $1,520,587,872 $1,504,264,206
============== ==============
</TABLE>
<PAGE>
PART C
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) The financial statements of Great American Reserve are contained in Part
B of this Registration Statement.
(b) Exhibits
(1) -- Resolution of the Board of Directors of Great American
Reserve authorizing the establishment of Variable Account
dated November 12, 1993, incorporated herein by reference to
Exhibit 1 to the Registration Statement on Form N-4 (File
No. 33-74092) filed on January 13, 1994.
(2) -- Not Applicable.
(3) -- Form of Principal Underwriting Agreement by and among Great
American Reserve, Variable Account and GARCO Equity Sales,
incorporated herein by reference to Exhibit 3 to the
Registration Statement on Form N-4 (File No. 33-74092) filed
on January 13, 1994.
(4)(a) -- Form of Individual Fixed/Variable Annuity Contract,
incorporated herein by reference to Exhibit 4(a) to the
Registration Statement on Form N-4 (File No. 33-74092) filed
on January 13, 1994.
(4)(b) -- Form of Group Fixed/Variable Annuity Contract, incorporated
herein by reference to Exhibit 4(b) to the Registration
Statement on Form N-4 (File No. 33-74092) filed on January
13, 1994.
(5) -- Application for Contracts, incorporated herein by reference
to Exhibit 5 to the Registration Statement on Form N-4 (File
No. 33-74092) filed on January 13, 1994.
(6) -- Articles of Incorporation and By-Laws of Great American
Reserve, incorporated herein by reference to Exhibit 6 to
the Registration Statement on Form N-4 (File No. 33-74092)
filed on January 13, 1994.
<PAGE>
(7) -- Not Applicable.
(8) -- Not Applicable.
(9) -- Opinion and Consent of Counsel filed herewith.
(10) -- Consent of Independent Accountants filed herewith.
(11) -- Not Applicable.
(12) -- None.
(13) -- Schedule for computation of performance quotations filed
herewith.
(14) -- Financial Data Schedule
(99) -- List of Funds Underlying Variable Account E
ITEM 25. DIRECTORS AND OFFICERS OF GREAT AMERICAN RESERVE
The following table sets forth certain information regarding the
executive officers of Great American Reserve who are engaged directly or
indirectly in activities relating to the Variable Account or the Contracts.
Their principal business address is 11815 N. Pennsylvania Street, Carmel, IN
46032.
Name and Principal Positions and Offices
Business Address with Great American Reserve
- ----------------- ----------------------------
Stephen C. Hilbert Chairman of the Board and
Chief Executive Officer
Lynn C. Tyson President and Chief Marketing
Officer
Donald F. Gongaware Executive Vice President and
Chief Operations Officer
Rollin M. Dick Executive Vice President and
Chief Financial Officer
Lawrence W. Inlow Executive Vice President,
Secretary and General Counsel
<PAGE>
ITEM 26. PERSONS CONTROLLED OR UNDER COMMON CONTROL WITH GREAT AMERICAN
RESERVE OR VARIABLE ACCOUNT
The following information concerns those companies that may be deemed to be
controlled by or under common control with Registrant:
CONSECO, INC. (Indiana) (publicly traded)
Bankers National Life Insurance Company (Texas) (100%)
Lincoln American Life Insurance Company (Tennessee) (100%)
National Fidelity Life Insurance Company (Missouri) (100%)
Conseco Investment Holding Company (Delaware) (100%)
Conseco Capital Management, Inc. (Delaware) (100%)
Bankers Life Holding Corporation (Delaware) (publicly traded) *
Bankers Life Insurance Company of Illinois (Illinois) (100%)
Bankers Life & Casualty Company (Illinois) (100%)
Certified Life Insurance Company (California) (100%)
Marketing Distribution Systems, Consulting Group, Inc. (Delaware) (95%)
MDS of New Jersey, Inc. (New Jersey) (100%)
MDS Securities Incorporated (Delaware) (100%)
Bankmark School of Business, Inc. (Delaware) (100%)
Jefferson National Life Insurance Company of Texas (100%)
Beneficial Standard Life Insurance Company (California) (100%)
Great American Reserve Insurance Company (Texas) (100%)
American Life Group, Inc. (Delaware) (80%)***
American Life Holding Company (Delaware) (100%)
American Life and Casualty Insurance Company (Iowa) (100%)
Vulcan Life Insurance Company (Alabama) (98%)
Conseco Series Trust (Massachusetts) (Trust)****
* Conseco owns approximately 88% of the outstanding stock of Bankers Life
Holding Corporation.
<PAGE>
*** In 1994 Conseco formed Conseco Capital Partners II, L.P. to invest in
acquisitions of life insurance companies and related businesses. A
wholly-owned subsidiary of Conseco is the sole general partner of
Conseco Capital Partners II, L.P. American Life Group, Inc. (formerly
The Stateman Group, Inc.) was acquired in September 1994 and Conseco
holds a 25% ownership interest through its direct investment and through
its equity interests in other controlled companies.
**** The shares of the Trust currently are sold to Bankers National Variable
Account B, Great American Reserve Variable Annuity Account C, and Great
American Reserve Variable Annuity Account E, each being segregated asset
accounts established pursuant to Texas law by Bankers National Life
Insurance Company and Great American Reserve Insurance Company.
<PAGE>
ITEM 27. NUMBER OF CONTRACT OWNERS
As of March 31, 1996, Registrant has 1,613 contract owners.
ITEM 28. INDEMNIFICATION
The Board of Directors of Great American Reserve is indemnified by Great
American Reserve against claims and liabilities to which such person may become
subject by reason of having been a member of such Board or by reason of any
action alleged to have been taken or omitted by him as such member, and the
member shall be indemnified for all legal and other expenses reasonably incurred
by him in connection with any such claim or liability; however, no
indemnification shall be made in connection with any claim or liability unless
such person (i) conducted himself in good faith, (ii) in the case of conduct in
his official capacity as a member of the Board of Directors, reasonably believed
that his conduct was in the best interests of Variable Account, and, in all
other cases reasonably believed that his conduct was at least not opposed to the
best interests of Variable Account, and (iii) in the case of any criminal
proceeding, had no reasonable cause to believe that his conduct was unlawful.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to members of Great American Reserve's Board of
Directors, officers and controlling persons of the Registrant pursuant to the
provisions described under "Indemnification" 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 that a claim for indemnification against
such liabilities (other than payment by the Registrant of expenses incurred or
paid by a member of the Board of Directors, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such member of the Board of Directors, 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.
The Variable Account has no officers or employees. Employees of an
affiliated company who perform administrative services for the Variable Account
are covered by an officers and directors liability policy.
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITER
GARCO Equity Sales acts as principal underwriter for Variable Account,
also acts as principal underwriter for Great American Reserve Variable Annuity
Account C. The following table sets forth certain information regarding such
underwriter's officers and directors. Their address is 11815 N. Pennsylvania
Street, Carmel, IN 46032.
Name and Principal Positions and Offices
Business Address with GARCO Equity Sales, Inc.
- ---------------- ------------------------------
Lynn C. Tyson President, and Director
James S. Adams Senior Vice President and
Treasurer
William P. Latimer Vice President, Senior Counsel and
Secretary, Chief Compliance Officer
<TABLE>
<CAPTION>
Net Underwriting Compensation on
Name of Discounts and Redemption or Brokerage
Principal Underwriter Commissions Annuitization Commissions Compensation*
- --------------------- ---------------- --------------- ----------- ------------
<S> <C> <C> <C> <C>
GARCO Equity None None None None
Sales, Inc.
<FN>
*Fees paid by Great American Reserve for serving as underwriter
</TABLE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The accounts, books, or other documents required to be maintained by the
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
the rules promulgated thereunder are in the possession of the Adviser or the
Custodian as follows:
(a) the records required to be maintained by paragraphs 4, 5, 6 and 11 of
Rule 31a-1(b) will be maintained by the Adviser.
(b) the records required to be maintained by paragraphs 1, 2, 3, 7 and 8 of
Rule 31a-1(b) will be maintained by the Custodian.
<PAGE>
ITEM 31. MANAGEMENT SERVICES
Not Applicable.
ITEM 32. UNDERTAKINGS
1. The Registrant hereby undertakes to file a post-effective amendment to this
registration statement as frequently as is necessary to ensure that the audited
financial statements in the registration statement are never more than 16 months
old for so long as payments under the variable annuity contracts may be
accepted.
2. The Registrant hereby undertakes to include either (1) as part of any
application to purchase a contract offered by the prospectus, a space that an
applicant can check to request a Statement of Additional Information, or (2) a
postcard or similar written communication affixed to or included in the
prospectus that the applicant can remove to send for a Statement of Additional
Information.
3. The Registrant hereby undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available under
this Form promptly upon written or oral request.
4. The Securities and Exchange Commission (the "SEC") issued the American
Counsel of Life Insurance an industry wide no-action letter dated November 28,
1988, stating that the SEC would not recommend any enforcement action if
registered separate accounts funding tax-sheltered annuity contracts restrict
distributions to plan participants in accordance with the requirements of
Section 403(b)(11), provided certain conditions and requirements were met. Among
these conditions and requirements, any registered separate account relying on
the no-action position of the SEC must:
(1) Include appropriate disclosure regarding the redemption restrictions
imposed by Section 403(b)(11) in each registration statement, including the
prospectus, used in connection with the offer of the contract;
(2) Include appropriate disclosure regarding the redemption restrictions
imposed by Section 403 (b)(11) in any sales literature used in connection
with the offer in the contract;
(3) Instruct sales representatives who solicit participants to purchase
the contract specifically to bring the redemption restrictions imposed by
Section 403(b)(11) to the attention of the potential participants; and
(4) Obtain from each plan participant who purchases a Section 403(b)
annuity contract, prior to or at the time of such purchase, a signed
statement acknowledging the participant's understanding of (i) the
restrictions on
<PAGE>
redemption imposed by Section 403(b)(11), and (ii) the investment
alternatives available under the employer's Section 403(b) arrangement, to
which the participant may elect to transfer his contract value.
The Registrant is relying on the no-action letter. Accordingly, the provisions
of paragraphs (1) - (4) above have been complied with.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets the requirements for effectiveness
of this Registration Statement pursuant to Rule 485(b) under the Securities Act
of 1933 and has duly caused this Registration Statement to be signed on its
behalf, in the city of Carmel, of the State of Indiana, on the 26th day of
April, 1996.
GREAT AMERICAN RESERVE VARIABLE ANNUITY
ACCOUNT E
(Registrant)
By: Great American Reserve Insurance Company
(Depositor)
By: /S/ STEPHEN C. HILBERT
---------------------------------
Stephen C. Hilbert
Chairman of the Board
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Depositor certifies that it meets the requirements for effectiveness
of this Registration Statement pursuant to Rule 485(b) under the Securities Act
of 1933 and has duly caused this Registration Statement to be signed on its
behalf, in the City of Carmel, State of Indiana, on the 26th day of April, 1996.
Great American Reserve Insurance Company
(Depositor)
By: /S/ STEPHEN C. HILBERT
------------------------------
Stephen C. Hilbert
Chairman of the Board
As required by the Securities Act of 1933, this Registration Statement has
been signed below by the following persons in the capacities and on the dates
indicated.
Signature Title Date
- --------- ----- ----
/S/ STEPHEN C. HILBERT* Director, Chairman of the Board April 26, 1996
- ------------------------- (Principal Executive Officer)
Stephen C. Hilbert
/S/ LYNN C. TYSON* Director April 26, 1996
- -------------------------
Lynn C. Tyson
/S/ DONALD F. GONGAWARE* Director April 26, 1996
- -------------------------
Donald F. Gongaware
/S/ ROLLIN M. DICK* Director, Executive Vice President April 26, 1996
- ------------------------- (Principal Financial and Accounting
Rollin M. Dick Officer)
/S/ LAWRENCE W. INLOW* Director April 26, 1996
- -------------------------
Lawrence W. Inlow
/S/ NGAIRE E. CUNEO* Director April 26, 1996
- -------------------------
Ngaire E. Cuneo
* /S/ WILLIAM P. LATIMER
- -------------------------
William P. Latimer
Attorney-in-fact
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Karl W. Kindig and William P. Latimer, jointly
and severally, as his or her true and lawful attorney-in-fact and agent, each
with full power of substitution and resubstitution for him or her and in his or
her name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to the Registration Statement
on Form N-4 of Great American Reserve Variable Annuity Account E, and to file
the same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming all
that each said attorney-in-fact or agent or substitute lawfully does or causes
to be done by virtue hereof.
Signature Title Date
- --------- ----- ----
/S/ STEPHEN C. HILBERT Director, Chairman of the Board April 26, 1996
- ------------------------ (Principal Executive Officer)
Stephen C. Hilbert
/S/ LYNN C. TYSON Director April 26, 1996
- ------------------------
Lynn C. Tyson
/S/ DONALD F. GONGAWARE Director April 26, 1996
- ------------------------
Donald F. Gongaware
/S/ ROLLIN M. DICK Director, Executive Vice President April 26, 1996
- ------------------------ (Principal Financial and Accounting
Rollin M. Dick Officer)
/S/ LAWRENCE W. INLOW Director April 26, 1996
- ------------------------
Lawrence W. Inlow
/S/ NGAIRE E. CUNEO Director April 26, 1996
- ------------------------
Ngaire E. Cuneo
Exhibit Sequentially
Number Exhibit Numbered Page
------- ------- -------------
(9) Opinion and Consent of Counsel. C-13
(10) Consent of Independent Accountants. C-14
(13) Performance Quotations C-15
(14) Financial Data Schedule C-16
Exhibit (9)
-----------
Opinion and Consent of Counsel
<PAGE>
April 26, 1996
Board of Directors
Great American Reserve Insurance Company
Re: Great American Reserve Variable Annuity Account E
Registration Statement on Form N-4
Gentlemen and Madam:
I am Senior Vice President, Legal of Great American Reserve Insurance
Company (the "Company"), and in such capacity I have acted as counsel to Great
American Reserve Variable Annuity Account E (the "Registrant" or "Account") in
connection with the Registrant's Form N-4 Registration Statement filing pursuant
to the Securities Act of 1933 (the "Act") and the Investment Company Act of 1940
("1940 Act"). This opinion is being furnished pursuant to the Act in connection
with the Registrant's Form N-4 Registration Statement relating to the securities
issued in connection with the Account offering variable annuity contracts (the
"Registration Statement"). No fee is payable because the Registrant files a
declaration of indefinite registration pursuant to Rule 24f-2 under the 1940
Act.
I have examined copies of the Registration Statement and such other
documents as I have deemed necessary or appropriate for the giving of this
opinion. In my examination, I have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to any facts material
to the opinions expressed herein which were not independently established or
verified, I have relied upon oral or written statements and representations of
officers and other representatives of the Company.
Based on the foregoing, I am of the opinion that:
1. The Account has been duly organized and is an existing separate
account pursuant to the applicable laws of the State of Texas;
2. The Account is a unit investment trust registered under the 1940 Act;
3. The securities issued in connection with the Account offering variable
annuity contracts, when issued as described in the Registration
Statement will be duly authorized and upon issuance will be validly
issued, fully paid and non-assessable.
4. The portion of assets to be held in the Account equal to the reserves
and other liabilities under the individual variable annuity contracts
Board of Directors
Great American Reserve Insurance Company
April 26, 1996
Page 2 of 2
hereafter to be funded by the Account are not chargeable with
liabilities arising out of any other business that the Company may
conduct.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/S/ KARL W. KINDIG
Karl W. Kindig
Exhibit (10)
------------
Consent of Independent Accountants
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Great American Reserve Insurance Company
We consent to the inclusion in this registration statement on Form N-4 (File No.
33-74092) of our reports date February 16, 1996 and March 20, 1996, on our
audits of the financial statements of Great American Reserve Variable Annuity
Account E and Great American Reserve Insurance Company, respectively. We also
consent to the reference to our firm under the heading "Independent
Accountants."
/S/ COOPERS & LYBRAND L.L.P.
Coopers & Lybrand L.L.P.
Indianapolis, Indiana
April 26, 1996
Exhibit (13)
------------
Performance Quotations
<PAGE>
<TABLE>
GREAT AMERICAN RESERVE ASSET ALLOCATION - FUTURE RESERVE
INDIVIDUAL AND GROUP
AVERAGE ANNUAL TOTAL RETURN (Includes fee deductions)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total 1.342379
End of Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Qtr Value For $1,000 Fee 0.00 Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
1994 1.035219 965.979 1995 1.196932 0.000 965.979 1.342379
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.342379
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE ASSET ALLOCATION - FUTURE RESERVE
INDIVIDUAL AND GROUP
AVERAGE ANNUAL TOTAL RETURN (Includes fee deductions)
12/31/95
(continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Total Surrender Deduction Surrender For Return
End of Accum Charge Surrender For Surr Admin Admin Fee n
Qtr Value Calc Charge Charge Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
1994 1,296.71 9% (116.70) 1,180.01 0.00 1,180.01 18.00%
Incept 1,342.38 9% (120.81) 1,221.57 0.00 1,221.57 15.02%
Incep
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE ASSET ALLOCATION - FUTURE RESERVE
INDIVIDUAL AND GROUP
AVERAGE ANNUAL TOTAL RETURN (WITHOUT fee deductions)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total 1.342379
End of Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Qtr Value For $1,000 Fee 0.00 Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
1994 1.035219 965.979 1995 1.196932 0.000 965.979 1.342379
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.342379
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE ASSET ALLOCATION - FUTURE RESERVE
INDIVIDUAL AND GROUP
AVERAGE ANNUAL TOTAL RETURN (WITHOUT fee deductions)
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Total Surrender Deduction Surrender For Return
End of Accum Charge Surrender For Surr Admin Admin Fee n
Qtr Value Calc Charge Charge Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C>
1994 1,296.71 1,296.71 1,296.71 29.67%
Incept 1,342.38 1,342.38 1,342.38 22.86%
Incep
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE COMMON STOCK - FUTURE RESERVE
INDIVIDUAL AND GROUP
AVERAGE ANNUAL TOTAL RETURN (WITHOUT fee deductions)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total 1.448804
End of Unit Purchased Admin Admin Fee For Annual Accum 12/29/95
Qtr Value For $1,000 Fee 0.00 Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
1994 1.077853 927.770 1995 1.253068 0.000 927.770 1.448804
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.448804
1.448804
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE COMMON STOCK - FUTURE RESERVE
INDIVIDUAL AND GROUP
AVERAGE ANNUAL TOTAL RETURN (WITHOUT fee deductions)
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Total Surrender Deduction Surrender For Return
End of Accum Charge Surrender For Surr Admin Admin Fee n
Qtr Value Calc Charge Charge Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C>
1994 1,344.16 1,344.16 1,344.16 34.42%
Incept 1,448.80 1,448.80 1,448.80 29.60%
Incep
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE COMMON STOCK - FUTURE RESERVE
INDIVIDUAL AND GROUP
AVERAGE ANNUAL TOTAL RETURN
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total 1.448804
End of Unit Purchased Admin Admin Fee For Annual Accum 12/29/95
Qtr Value For $1,000 Fee 0.00 Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
1994 1.077853 927.770 1995 1.253068 0.000 927.770 1.448804
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.448804
1.448804
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE COMMON STOCK - FUTURE RESERVE
INDIVIDUAL AND GROUP
AVERAGE ANNUAL TOTAL RETURN
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Total Surrender Deduction Surrender For Return
End of Accum Charge Surrender For Surr Admin Admin Fee n
Qtr Value Calc Charge Charge Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
1994 1,344.16 9% (120.97) 1,223.19 0.00 1,223.19 22.32%
Incept 1,448.80 9% (130.39) 1,318.41 1,318.41 21.33%
Incep
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE CORPORATE BOND - FUTURE RESERVE
INDIVIDUAL AND GROUP
AVERAGE ANNUAL TOTAL RETURN (Includes fee deductions)
12/29/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total 1.165727
End of Unit Purchased Admin Admin Fee For Annual Accum 12/29/95
Qtr Value For $1,000 Fee 0.00 Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
1994 0.999698 1,000.302 N/A 0.000000 0.000 1,000.302 1.165727
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.165727
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE CORPORATE BOND - FUTURE RESERVE
INDIVIDUAL AND GROUP
AVERAGE ANNUAL TOTAL RETURN (Includes fee deductions)
12/29/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Total Surrender Deduction Surrender For Return
End of Accum Charge Surrender For Surr Admin Admin Fee n
Qtr Value Calc Charge Charge Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
1994 1,166.08 9% (104.95) 1,061.13 0.00 1,061.13 6.11%
Incep 1,165.73 9% (104.92) 1,060.81 0.00 1,060.81 4.21%
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE CORPORATE BOND - FUTURE RESERVE
INDIVIDUAL AND GROUP
AVERAGE ANNUAL TOTAL RETURN (WITHOUT fee deductions)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total 1.165727
End of Unit Purchased Admin Admin Fee For Annual Accum 12/29/95
Qtr Value For $1,000 Fee 0.00 Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
1994 0.999698 1,000.302 N/A 0.000000 0.000 1,000.302 1.165727
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.165727
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE CORPORATE BOND - FUTURE RESERVE
INDIVIDUAL AND GROUP
AVERAGE ANNUAL TOTAL RETURN (WITHOUT fee deductions)
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Total Surrender Deduction Surrender For Return
End of Accum Charge Surrender For Surr Admin Admin Fee n
Qtr Value Calc Charge Charge Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C>
1994 1,166.08 1,166.08 1,166.08 16.61%
Incep 1,165.73 1,165.73 1,165.73 11.32%
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE GOVERNMENT SECURITIES - FUTURE RESERVE
INDIVIDUAL AND GROUP
AVERAGE ANNUAL TOTAL RETURN (Includes fee deductions)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total 1.154244
End of Unit Purchased Admin Admin Fee For Annual Accum 12/29/95
Qtr Value For $1,000 Fee 0.00 Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
1994 0.997441 1,002.566 1995 1.102656 0.000 1,002.566 1.154244
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.154244
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE GOVERNMENT SECURITIES - FUTURE RESERVE
INDIVIDUAL AND GROUP
AVERAGE ANNUAL TOTAL RETURN (Includes fee deductions)
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Total Surrender Deduction Surrender For Return
End of Accum Charge Surrender For Surr Admin Admin Fee n
Qtr Value Calc Charge Charge Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
1994 1,157.21 9% (104.15) 1,053.06 0.00 1,053.06 5.31%
Incept 1,154.24 9% (103.88) 1,050.36 0.00 1,050.36 3.50%
Incep
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE GOVERNMENT SECURITIES - FUTURE RESERVE
INDIVIDUAL AND GROUP
AVERAGE ANNUAL TOTAL RETURN (WITHOUT fee deductions)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total 1.154244
End of Unit Purchased Admin Admin Fee For Annual Accum 12/29/95
Qtr Value For $1,000 Fee 0.00 Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
1994 0.997441 1,002.566 1995 1.102656 0.000 1,002.566 1.154244
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.154244
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE GOVERNMENT SECURITIES - FUTURE RESERVE
INDIVIDUAL AND GROUP
AVERAGE ANNUAL TOTAL RETURN (WITHOUT fee deductions)
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Total Surrender Deduction Surrender For Return
End of Accum Charge Surrender For Surr Admin Admin Fee n
Qtr Value Calc Charge Charge Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C>
1994 1,157.21 1,157.21 1,157.21 15.72%
Incept 1,154.24 1,154.24 1,154.24 10.55%
Incep
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
ALGER AMERICAN LEVERAGE ALLCAP
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.407908
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
ALGER AMERICAN LEVERAGE ALLCAP
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,407.91 9% (126.71) 1,281.20 0.00 1,281.20 52.63%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
ALGER AMERICAN SMALL CAPITALIZATION
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.218931
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
ALGER AMERICAN SMALL CAPITALIZATION
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,218.93 9% (109.70) 1,109.23 0.00 1,109.23 19.35%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
DREYFUS STOCK INDEX
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.157620
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
DREYFUS STOCK INDEX
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,157.62 9% (104.19) 1,053.43 0.00 1,053.43 9.29%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
DREYFUS SOCIALLY RESPONSIBLE GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.174867
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
DREYFUS SOCIALLY RESPONSIBLE GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,174.87 9% (105.74) 1,069.13 0.00 1,069.13 12.08%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
FEDERATED CORPORATE BOND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 1994 0.000000 0.000 1,000.000 1.066579
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
FEDERATED CORPORATE BOND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,066.58 9% (95.99) 970.59 0.00 970.59 -4.97%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
FEDERATED INTERNATIONAL STOCK
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.025080
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
FEDERATED INTERNATIONAL STOCK
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,025.08 9% (92.26) 932.82 0.00 932.82 -11.19%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
FEDERATED UTILITY
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.122090
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
FEDERATED UTILITY
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,122.09 9% (100.99) 1,021.10 0.00 1,021.10 3.63%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
JANUS AGGRESSIVE GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.266394
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
JANUS AGGRESSIVE GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,266.39 9% (113.98) 1,152.41 0.00 1,152.41 27.39%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
JANUS GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.167465
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
JANUS GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
(continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,167.47 9% (105.07) 1,062.40 0.00 1,062.40 10.88%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
JANUS WORLDWIDE GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.211204
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
JANUS WORLDWIDE GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,211.20 9% (109.01) 1,102.19 0.00 1,102.19 18.06%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
VAN ECK GOLD AND NATURAL RESOURCES
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.077158
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
VAN ECK GOLD AND NATURAL RESOURCES
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,077.16 9% (96.94) 980.22 0.00 980.22 -3.35%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
VAN ECK WORLDWIDE BOND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.018153
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
VAN ECK WORLDWIDE BOND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
(continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,018.15 9% (91.63) 926.52 0.00 926.52 -12.21%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
VAN ECK WORLDWIDE HARD ASSETS
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.049435
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
VAN ECK WORLDWIDE HARD ASSETS
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,049.44 9% (94.45) 954.99 0.00 954.99 -7.56%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
ALGER AMERICAN LEVERAGE ALLCAP
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.407908
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
ALGER AMERICAN LEVERAGE ALLCAP
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,407.91 0% 0.00 1,407.91 0.00 1,407.91 79.28%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
ALGER AMERICAN SMALL CAPITALIZATION
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.218931
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
ALGER AMERICAN SMALL CAPITALIZATION
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,218.93 0% 0.00 1,218.93 0.00 1,218.93 40.19%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
DREYFUS STOCK INDEX
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.157620
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
DREYFUS STOCK INDEX
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
(continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,157.62 0% 0.00 1,157.62 0.00 1,157.62 28.37%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
DREYFUS SOCIALLY RESPONSIBLE GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.174867
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
DREYFUS SOCIALLY RESPONSIBLE GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,174.87 0% 0.00 1,174.87 0.00 1,174.87 31.65%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
FEDERATED CORPORATE BOND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 1994 0.000000 0.000 1,000.000 1.066579
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
FEDERATED CORPORATE BOND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,066.58 0% 0.00 1,066.58 0.00 1,066.58 11.63%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
FEDERATED INTERNATIONAL STOCK
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.025080
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
FEDERATED INTERNATIONAL STOCK
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,025.08 0% 0.00 1,025.08 0.00 1,025.08 4.32%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
FEDERATED UTILITY
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.122090
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
FEDERATED UTILITY
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,122.09 0% 0.00 1,122.09 0.00 1,122.09 21.72%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
JANUS AGGRESSIVE GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.266394
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
JANUS AGGRESSIVE GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,266.39 0% 0.00 1,266.39 0.00 1,266.39 49.63%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
JANUS GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.167465
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
JANUS GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,167.47 0% 0.00 1,167.47 0.00 1,167.47 30.24%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
JANUS WORLDWIDE GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.211204
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
JANUS WORLDWIDE GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,211.20 0% 0.00 1,211.20 0.00 1,211.20 38.68%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
VAN ECK GOLD AND NATURAL RESOURCES
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.077158
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
VAN ECK GOLD AND NATURAL RESOURCES
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,077.16 0% 0.00 1,077.16 0.00 1,077.16 13.52%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
VAN ECK WORLDWIDE BOND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.018153
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
VAN ECK WORLDWIDE BOND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,018.15 0% 0.00 1,018.15 0.00 1,018.15 3.12%
6/01/95 TO 12/31/95
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
VAN ECK WORLDWIDE HARD ASSETS
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total
Unit Purchased Admin Admin Fee For Annual Accum 12/31/95
Year Value For $1,000 Fee ($.0) Admin Fee Units Unit Value
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.049435
</TABLE>
<TABLE>
GREAT AMERICAN RESERVE - ACCOUNT "E"
VAN ECK WORLDWIDE HARD ASSETS
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN (w/o fees)
12/31/95
(Continued)
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
<CAPTION>
Total Accum Value after Average Annual
Total Surrender Value after Full Deduction for Total Return
Accum Charge Surrender Deduction for Surrender Admin Fee n
Year Value Calc Charge Surr Charge Admin Fee (ERV) P(1+T) = ERV
<S> <C> <C> <C> <C> <C> <C> <C>
Incep 1,049.44 0% 0.00 1,049.44 0.00 1,049.44 8.58%
6/01/95 TO 12/31/95
</TABLE>
<PAGE>
Exhibit (14)
------------
Financial Data Schedule
<PAGE>
[ARTICLE] 6
[MULTIPLIER] 1
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] DEC-31-1995
[PERIOD-END] DEC-31-1995
[INVESTMENTS-AT-COST] 5,370,633
[INVESTMENTS-AT-VALUE] 5,324,637
[RECEIVABLES] 0
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 5,324,637
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 4,979
[TOTAL-LIABILITIES] 4,979
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 0
[SHARES-COMMON-STOCK] 0
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 5,319,658
[DIVIDEND-INCOME] 268,996
[INTEREST-INCOME] 0
[OTHER-INCOME] 0
[EXPENSES-NET] (19,952)
[NET-INVESTMENT-INCOME] 249,044
[REALIZED-GAINS-CURRENT] 72,012
[APPREC-INCREASE-CURRENT] (46,944)
[NET-CHANGE-FROM-OPS] 274,112
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 0
[NUMBER-OF-SHARES-REDEEMED] 0
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] 0
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 0
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 0
[AVERAGE-NET-ASSETS] 0
[PER-SHARE-NAV-BEGIN] 0
[PER-SHARE-NII] .0
[PER-SHARE-GAIN-APPREC] .0
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 0
[EXPENSE-RATIO] 0
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0.00
</TABLE>
Exhibit 99
---------
<TABLE>
<CAPTION>
List of Funds Underlying Variable Annuity Account E
---------------------------------------------------
Name CIK No. Accession No. File No. Date Filed
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Conseco Series Trust 0709558 0000948572-96-000031 002-80455 5/01/96
Asset Allocation Portfolio
Common Stock Portfolio
Corporate Bond Portfolio
Government Securities Portfolio
Money Market Portfolio
Alger American Fund 0832566 0000930413-96-000121 33-21722 5/01/96
Leveraged All Cap Portfolio
Small Capitalization Portfolio
Growth Portfolio
MidCap Growth Portfolio
Berger Institutional Products Trust 1002109 0000932384-96-000076 33-63493 5/01/96
100 Fund
Growth and Income Fund
Small Company Growth Fund
The Dreyfus Socially Responsible
Growth Fund, Inc. 0890064 0000890064-96-000006 33-49014 5/01/96
Dreyfus Stock Index Fund 0846800 0000846800-96-000003 33-31809 3/01/96
Federated Insurance Series 0912577 0000912577-96-000008 33-69268 4/22/96
High Income Bond Fund II
International Equity Fund II
Utility Fund II
Janus Aspen Series 0906185 0000906185-96-000024 33-63212 5/01/96
Aggressive Growth Portfolio
Growth Portfolio
Worldwide Growth Portfolio
Van Eck Worldwide Insurance Trust 0811976 0000950130-96-000735 33-13019 3/05/96
Gold and Natural Resources Fund
Worldwide Bond Fund
Worldwide Hard Assets Fund
Worldwide Emerging Markets Fund
</TABLE>
