Registration Nos. 33-74092
811-8288
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No.
Post-Effective Amendment No. 6 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 6 [X]
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT E
(Exact Name of Registrant)
GREAT AMERICAN RESERVE INSURANCE COMPANY
(Name of Depositor)
11825 N. Pennsylvania Street
Carmel, Indiana 46032-4572
(Address of Depositor's Principal Executive Offices)
(317) 817-3700
(Depositor's Telephone Number, including Area Code)
Michael A. Colliflower
Great American Reserve Insurance Company
11825 N. Pennsylvania Street
Carmel, Indiana 46032-4572
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
[X] immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] on (date) pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a) (1) of Rule 485
[ ] on [date] pursuant to paragraph (a) (1) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
Title of Securities Registered:
Individual and Group Deferred Annuity Contracts and Certificates
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT E
FORM N-4
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
Under The Securities Act of 1933
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Form N-4
Item No. PART A - Prospectus Caption
- - -------- ------------------
<S> <C> <C>
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 Account, and
Depositor and Portfolio Companies 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 Status
13. Legal Proceedings............................ Not Applicable
14. Table of Contents of the Statement........... Table of Contents of the Statement
of Additional Information of Additional Information
</TABLE>
<PAGE>
Form N-4
Item No.
- - --------
<TABLE>
<CAPTION>
PART B - Statement of Additional Information
-----------------------------------
<S> <C> <C>
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
</TABLE>
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.
- --------------------------------------------------------------------------------
Parts A and B were filed in Post-Effective Amendment No. 5 to Registrant's
Form N-4 (File Nos. 33-74092 and 811-08288) and are incorporated herein
by reference.
- --------------------------------------------------------------------------------
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) The financial statements of Great American Reserve Insurance Company
and Great American Reserve Variable Annuity Account E 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.
(2) -Not Applicable.
(3) -Form of Principal Underwriting Agreement by and among
Great American Reserve, Variable Account and GARCO Equity
Sales.
(4)(a) -- Form of Individual Fixed/Variable Annuity
Contract.
(4)(b) -- Form of Group Fixed/Variable Annuity Contract.
(5) -Application for Contracts.
(6) (i)-Articles of Incorporation of Great American
Reserve.**
(6) (ii) -Bylaws of Great American Reserve.**
(7) -Not Applicable.
(8) (i)-Form of Fund Participation Agreement by and among the
Alger American Fund, Great American Reserve Insurance Company
and Fred Alger and Company, Incorporated.*
(8) (ii)-Form of Fund Participation Agreement by and among
Great American Reserve Insurance Company, Berger Institutional
Products Trust and BBOI Worldwide LLC.*
(8) (iii)-Form of Fund Participation by and between Great
American Reserve Insurance Company, Insurance Mangement Series
and Federated Securities Corp.*
(8) (iv)-Form of Fund Participation between Great American
Reserve Insurance Company, Van Eck Worldwide Insurance Trust
and Van Eck Associates Corporation.*
(8) (v)-Form of Fund Participation Agreement by and between
Lord Abbett Series Fund, Inc., Lord, Abbett & Co. and Great
American Reserve Insurance Company.*
(8) (vi)-Form of Fund Participation Agreement between
American Century Investment Services, Inc. and Great American
Reserve Insurance Company.*
(8) (vii)-Form of Fund Participation Agreement between INVESCO
Variable Investment Funds, Inc., INVESCO Funds Group, Inc. and
the Company.**
(9) -- Opinion and Consent of Counsel.***
(10) -- Consent of Independent Accountants.***
(11) -- Not Applicable.
(12) -- None.
(13) -- Schedule for computation of performance quotations.***
(27) -- Not Applicable
*Incorporated by reference to Pre-Effective Amendment No. 1 to Form N-4,
Great American Reserve Variable Annuity Account F, File Nos. 333-40309/811-08483
filed electronically on February 3, 1998.
**Incorporated by reference to Form N-4, Great American Reserve Variable
Annuity Account G, File Nos. 333-00373/811-07501, filed electronically on
January 23, 1996.
***Incorporated by reference to Post-Effective Amendment No. 5 to Form N-4
(File Nos. 33-74092 and 811-08288) filed electronically on April 28, 1998.
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 Position and Offices
Business Address* with Depositor
- ------------------- ---------------------------------------
Ngaire E. Cuneo Director
Stephen C. Hilbert Director and Chairman of the Board
Rollin M. Dick Director, Executive Vice President and
Chief Financial Officer
Thomas J. Kilian Director and President
John J. Sabl Director, Executive Vice President, General
Counsel and Secretary
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
The following information concerns those companies that may be deemed to be
controlled by or under common control with Registrant (all 100% owned unless
indicated otherwise):
CONSECO, INC. (Indiana) - (publicly traded)
CIHC, Incorporated (Delaware)
Bankers National Life Insurance Company (Texas)
National Fidelity Life Insurance Company (Missouri)
Bankers Life Insurance Company of Illinois (Illinois)
Bankers Life & Casualty Company (Illinois)
Certified Life Insurance Company (California)
Jefferson National Life Insurance Company of Texas (Texas)
Beneficial Standard Life Insurance Company (California)
Great American Reserve Insurance Company (Texas)
American Life Holdings, Inc. (Delaware)
American Life Holding Company (Delaware)
American Life and Casualty Insurance Company (Iowa)
Vulcan Life Insurance Company (Alabama) - (98%)
Life Partners Group, Inc. (Delaware)
Wabash Life Insurance Company (Kentucky)
Massachusetts General Life Insurance Company (Massachusetts)
Philadelphia Life Insurance Company (Pennsylvania)
Lamar Life Insurance Company (Mississippi)
American Travellers Life Insurance Company (Pennsylvania)
United General Life Insurance Company (Texas)
American Travellers Insurance Company of New York (New York)
Intermediate Holdings, Inc. (Delaware)
THD, Inc. (Delaware)
TLIC Life Insurance Company (Texas)
Transport Life Insurance Company (Texas)
Continental Life Insurance Company (Texas)
Capitol American Financial Corporation (Ohio)
Capitol Insurance Company of Ohio (Ohio)
Capitol American Life Insurance Company (Arizona)
Frontier National Life Insurance Company (Ohio)
Capitol National Life Insurance Company (Ohio)
Conseco Capital Management, Inc. (Delaware)
Conseco Equity Sales, Inc. (Texas)
Conseco Financial Services, Inc. (Pennsylvania)
Conseco Marketing, LLC (Indiana)
Conseco Services, LLC (Indiana)
Lincoln American Life Insurance Company (Tennessee)
Marketing Distribution Systems, Consulting Group, Inc. (Delaware)
MDS of New Jersey, Inc. (New Jersey)
MDS Securities Incorporated (Delaware)
Bankmark School of Business, Inc. (Delaware)
Conseco Series Trust (Massachusetts)*
Conseco Fund Group (Massachusetts) (publicly held)**
* The shares of Conseco Series 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,
respectively.
** The shares of the Conseco Fund Group are sold to the public; Conseco
affiliates currently hold in excess of 95% of its shares.
ITEM 27. NUMBER OF CONTRACT OWNERS
As of March 31, 1998, there were 7,612 Qualified Contract Owners and 1,513
Non-Qualified 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.
ITEM 29. PRINCIPAL UNDERWRITER
(a) Conseco Equity Sales, Inc. ("Conseco Equity Sales") is the principal
underwriter for the following investment companies (other than Registrant):
Great American Reserve Variable Annuity Account C
Great American Reserve Variable Annuity Account F
Great American Reserve Variable Annuity Account G
Conseco Fund Group.
(b) The following table sets forth certain information regarding the
officers and directors of Conseco Equity Sales. Their address is 11815
N. Pennsylvania Street, Carmel, IN 46032.
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH CONSECO EQUITY SALES, INC.
- - -------------------- --------------------------------
L. Gregory Gloeckner President and Director
Senior Vice President, Treasurer
James S. Adams and Director
Vice President, Senior Counsel,
William P. Latimer Secretary, and Director
William T. Devanney, Jr. Senior Vice President, Corporate Taxes
Christene H. Darnell Vice President, Management Reporting
Lisa M. Zimmerman Assistant Vice President, Corporate
Taxes
Christine E. Monical Second Vice President and Assistant
General Counsel
<TABLE>
<CAPTION>
NET UNDERWRITING
NAME OF DISCOUNTS AND COMPENSATION ON BROKERAGE
PRINCIPAL UNDERWRITER COMMISSIONS REDEMPTION COMMISSIONS COMPENSATION*
- - --------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Conseco Equity None None None None
Sales, Inc.
</TABLE>
*Fees paid by Great American Reserve for serving as underwriter
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 Great American Reserve
Insurance Company, 11825 N. Pennsylvania Street, Carmel, Indiana 46032.
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
Form N-4 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 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.
5. Great American Reserve represents that the fees and charges deducted
under the Contracts, in the aggregate, are reasonable in relation to the
services rendered, the expenses expected to be incurred, and the risks assumed
by Great American Reserve.
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets the requirements of Securities Act
Rule 485(b) for effectiveness of this Registration Statement and has caused this
Registration Statement to be signed on its behalf, in the city of Carmel, State
of Indiana, on this 14th day of May, 1998.
GREAT AMERICAN RESERVE VARIABLE ANNUITY
ACCOUNT E
(Registrant)
By: Great American Reserve Insurance Company
By: /s/THOMAS J. KILIAN
----------------------------------------
GREAT AMERICAN RESERVE INSURANCE COMPANY
(Depositor)
By: /s/THOMAS J. KILIAN
------------------------------------------
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------- ----- ----
<S> <C>
/s/STEPHEN C. HILBERT Director, Chairman of the Board May 14, 1998
- -------------------------- ---------------
Stephen C. Hilbert
/s/THOMAS J. KILIAN Director and President May 14, 1998
- -------------------------- (Principal Executive Officer) ----------------
Thomas J. Kilian
/s/ROLLIN M. DICK Director, Executive Vice President May 14, 1998
- -------------------------- and Chief Financial Officer (Principal ----------------
Rollin M. Dick Financial and Accounting Officer)
/s/NGAIRE E. CUNEO Director May 14, 1998
- -------------------------- ---------------
Ngaire E. Cuneo
/s/JOHN J. SABL Director, Executive Vice President, May 14, 1998
- --------------------------- General Counsel and Secretary ----------------
John J. Sabl
</TABLE>
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- - ------ -------
EX-99.B(1) Resolution of the Board of Directors
EX-99.B(3) Form of Principal Underwriting Agreement.
EX-99.B(4)(a) Form of Individual Fixed/Variable Annuity Contract.
EX-99.B(4)(b) Form of Group Fixed/Variable Annuity Contract.
EX-99.B(5) Application for Contract.
WRITTEN CONSENT TO RESOLUTIONS
OF THE BOARD OF DIRECTORS OF
GREAT AMERICAN RESERVE INSURANCE COMPANY
The undersigned, being all of the members of the Board of Directors of
Great American Reserve Insurance Company (the "Company"), hereby unanimously
consent to the adoption of the following resolutions without a meeting of the
Board of Directors of the Company:
RESOLVED, that the Company develop and implement a program for the offer
and sale of individual and group variable annuity contracts (the "Contracts") to
be issued by the Company; and
RESOLVED, that the Company establish a separate account pursuant to the
Texas Insurance Code, said separate account being designated "Great American
Reserve Variable Account E" (the "Variable Account"); and
RESOLVED, that the filing with the U.S. Securities and Exchange Commission
of a Form N-4 registration statement for the Variable Account and Contracts,
including the filing of any amendments thereto and all matters properly incident
thereto, is hereby authorized and approved; and
RESOLVED, that the filing with the U.S. Securities and Exchange Commission
pursuant to Section 8 of the Investment Company Act of 1940 ("1940 Act"),
registering the Variable Account as a unit investment trust under said Act,
including the filing of any amendments thereto and all matters properly incident
thereto, is hereby authorized and approved; and
RESOLVED, that the filing with the U.S. Securities and Exchange Commission
of applications and amendments thereto for exemptions from Sections 26 and 27 of
the 1940 Act and such other sections of the 1940 Act and rules thereunder as may
be necessary or appropriate, including any exemptive relief that may be
necessary in conjunction with the assessment of mortality and expense risk
charges and deductions, are hereby authorized and approved; and
RESOLVED, that the officers of the Company be, and each of them hereby is,
authorized to take all actions necessary to maintain the registration of the
Variable Account as a unit investment trust under the 1940 Act, and to take such
related actions as they deem necessary or appropriate to carry out the
foregoing, including, without limitation, the following: determining that the
fundamental investment policy of the Variable Account shall be to invest and
reinvest its assets in securities issued by such open-end management investment
companies registered under the 1940 Act as the officers may designate consistent
with provisions of the Contracts issued by the Company; establishing one or more
sub-accounts of the Variable Account to which payments under the Contracts will
be allocated in accordance with that received from Contract Owners or
Participants; reserving to the officers the authority to increase or decrease
the number of sub-accounts in the Variable Account as they deem necessary or
appropriate; and investing each sub-account only in shares of a single
investment company or a single portfolio of an investment
<PAGE>
company organized as a series fund pursuant to the 1940 Act; the aforesaid being
subject to the commencement of the Variable Account's operations as a unit
investment trust which invests in shares of one or more portfolios of the
Conseco Series Trust; and
RESOLVED, that in connection with the Variable Account and the offer and sale of
Contracts, the officers of the Company be, and each of them hereby is,
authorized to execute and file with such authorities of the states of the United
States of America, and to take such related actions as they deem necessary or
appropriate to carry out the foregoing: such applications, notices,
certificates, affidavits, powers of attorney, consents of service of process,
covenants of an issuer, bonds, escrow and impending agreements, and other
writing and instruments as may be necessary or appropriate in order to render
permissible the offering and sale of Contracts in any jurisdiction within the
United States of America; the forms of any resolutions required by any state
authority to be filed in connection with any of the documents or instruments
referred to above be, and the same hereby are, adopted by the Board of Directors
as if such resolutions were fully set forth herein if (i) in the opinion of the
officers of the Company, the adoption of such resolutions is necessary or
advisable, and (ii) the Secretary or any Assistant Secretary of the Company
evidences the adoption of any such resolution by filing a copy of such
resolution with this Written Consent; and
RESOLVED, that the officers of the Company be and hereby are authorized to
take such further action and to execute such additional documents as they deem
necessary or appropriate to effectuate the purposes of the foregoing
resolutions.
The resolutions adopted pursuant to this Written Consent shall be
effective as of November 12, 1993.
- -------------------------------- -------------------------------
Ngaire E. Cuneo Stephen C. Hilbert
- -------------------------------- -------------------------------
Rollin M. Dick Lawrence W. Inlow
- -------------------------------- -------------------------------
Donald F. Gongaware Lynn C. Tyson
PRINCIPAL UNDERWRITING AGREEMENT
This agreement is made among Great American Reserve Insurance Company, a
Texas corporation ("Great American"), Great American Reserve Variable Annuity
Account ("Account "), a separate account established by Great American pursuant
to the Insurance Code of the State of Texas, and GARCO Equity Sales, Inc., a
Texas corporation ("Broker").
WHEREAS, Great American has established Account as a separate account for
use in connection with issuing certain variable annuity contracts ("Contracts");
WHEREAS, pursuant to a separate agreement Great American is responsible
for providing sales and administrative services relative to the variable annuity
contracts for which reserves are maintained in Account ;
WHEREAS, the Broker is registered as a broker-dealer with the Securities
and Exchange Commission (the "Commission") under the Securities Exchange Act of
1934, as amended (the "Act"), and is a member of the National Association of
Securities Dealers, Inc. ("NASD"); and
WHEREAS, Great American and Account desire to have the Contracts sold and
distributed through the Broker and the Broker is willing to sell and distribute
such Contracts under the terms stated herein;
NOW THEREFORE, the parties hereto agree as follows:
(1) Great American and Account hereby designate the Broker as principal
underwriter of the Contracts, and the Broker will use its best efforts to sell
and distribute such Contracts through its registered representatives. Great
American shall have the ultimate right to cease to offer and issue any Contracts
made available to the Broker hereunder.
(2) All premiums and any other monies payable upon the sale, distribution,
renewal or other transaction involving the Contracts will be paid or remitted
directly to Great American which will retain all such premiums and monies for
its own account except to the extent such premiums and monies are allocated to
Account . The Broker, as a broker-dealer registered with the Commission,
acknowledges that all premiums collected by the Broker are held in a fiduciary
capacity on behalf of Great American and are to be paid over to Great American
as soon as possible immediately following receipt and collection. To the extent
permitted by the Contracts and by federal securities law and by insurance laws
of the state of Texas, Great American shall have the ultimate right to decline
to accept any application for issuance of a Contract offered pursuant hereto.
(3) Great American will pay to the Broker or to the registered
representatives of the Broker the salaries or commissions to which
representatives are entitled as a result of the sale, distribution, renewal or
other transaction involving the Contracts. It is the sole prerogative of Great
American to establish commission rates to be paid on Contracts
<PAGE>
offered pursuant hereto, and Great American at all times retains an ultimate
veto as to commission rates to be paid.
(4) Great American, upon receipt of proper evidence of expenditures, will
reimburse the Broker for its expenses incurred in carrying out the terms of this
Agreement.
(5) Great American will at its expense provide the Broker with
prospectuses and such other material as Great American determines to be
desirable for use in connection with the sale of the Contracts. The Broker will
obtain any necessary approvals of such other material in accordance with the
requirements of NASD and appropriate federal and state agencies.
(6) The Broker will be responsible for supervising and controlling the
conduct and activities of its registered representatives with regard to the sale
and distribution of the Contracts.
(7) Great American will supply to the Broker the names of any agents who
indicate a willingness to sell the Contracts.
(8) The Broker will, after careful investigation, select the agents who
are to be trained and qualified to make such sales, will train such agents in
the sale of the Contracts and will use its best efforts to qualify such agents
under federal and state law to engage in the sale of the Contracts. Great
American at all times has the right to refuse to accept the appointment of any
agents selected by the Broker. Agents so trained and qualified ("Agents") will
be "associated persons" of the Broker under Section 15(b) of the Act, and in
addition to all other requirements for such qualification, will be required to
comply with applicable examination requirements before being permitted to engage
in the sale of the Contracts.
(9) Upon qualification of an Agent under applicable federal and state
laws, this fact will be certified in writing to Great American by the Broker.
(10) Prior to permitting any Agent to sell the Contracts, Great American,
the Broker and the Agent will enter into a mutually satisfactory agreement
pursuant to which the Agent will acknowledge that he will be an associated
person of the Broker in connection with his selling activities related to the
Contracts, that such activities will be under the supervision and control of the
Broker and the supervisor designated by the Broker, and that the Agent's right
to continue to sell the Contracts is subject to his continued compliance with
such agreement and rules and procedures established by the Broker.
(11) The Broker will fully comply with the requirements of the Act and
will establish such rules and procedures as may be necessary to supervise
diligently the securities activities of the Agents. Upon request by the Broker,
Great American will furnish or require the Agents to furnish (at Great
American's or the Agent's expense) such appropriate records as may be necessary
to ensure such diligent supervision.
(12) In the event any Agent fails or refuses to submit to supervision of
the Broker in accordance with this Agreement, or otherwise fails to meet the
rules and standards imposed
<PAGE>
by the Broker or its associated persons, the Broker shall certify such fact to
Great American and shall immediately notify such Agent that he is no longer
authorized to sell the Contracts, and the Broker and Great American shall take
whatever additional action may be necessary to terminate the sales activities of
such Agent relating to the Contracts.
(13) The Broker may request that some or all of the books and records
relating to the sales of Contracts required to be maintained by it as a
registered broker-dealer pursuant to Rules 17a-3 and 17a-4 under the Act be
prepared and maintained by Great American. Great American agrees that for
purposes of this Agreement such books and records shall be deemed property of
the Broker and be subject to examination by the Commission in accordance with
Section 17(a) of the Act. The Broker acknowledges, however, that Great American
is the sole owner of all other business records maintained by or on behalf of
Great American, and of all Contracts issued by Great American pursuant hereto.
(14) This Agreement may at any time be terminated by any party hereto on
sixty (60) days' written notice to the other parties and shall automatically
terminate in the event of its assignment.
(15) Any notice under the Agreement shall be in writing, addressed and
delivered or mailed postage prepaid to the other parties at such address as such
other parties may designate for the receipt of such notices. Until further
notice to the other parties, it is agreed that the addresses of Great American,
Account and the Broker for this purpose shall be
(16) This Agreement shall be and is subject to the provisions of the Act
and of the Investment Company Act of 1940, as amended.
(17) This Agreement may not be assigned by the Broker.
Executed this day of ,19 .
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT
By: ____________________________________________________________
GREAT AMERICAN RESERVE INSURANCE COMPANY
By: ____________________________________________________________
GARCO EQUITY SALES, INC.
By: ____________________________________________________________
<PAGE>
AGREEMENT PROVIDING SALES AND ADMINISTRATIVE
SERVICES AND MINIMUM DEALTH BENEFIT PRIOR TO RETIREMENT
Great American Reserve Insurance Company ("Great American") hereby agrees
to provide relative to contracts for which reserves are maintained in Great
American Reserve Variable Annuity Account ("Account ") established by Great
American pursuant to Section 3.75 of the Insurance Code of the State of Texas,
all sales and administrative services required of a life insurance company under
the laws of the State of Texas and the laws of the states to which Great
American may be subject, incident to engaging in the variable annuity business
of Account .
For providing the sales and administrative services (including but not
limited to payment of such expenses as salaries, rent, postage, telephone,
travel, legal, actuarial and auditing fees, costs of office equipment and
stationery) and for providing under certain group variable retirement contracts
a minimum death benefit prior to retirement. Great American shall deduct from
annuity purchase payments or from amounts surrendered, as appropriate, the
percentages as established from time to time for each type of annuity contract
offered; provided, however, that in now event shall deductions exceed 8 1/2% of
the total accumulation of account(s) under any annuity contract.
This Agreement may be terminated at any time by Great American or Account
on sixty (60) days' written notice
Executed this day of , 19 .
GREAT AMERICAN RESERVE VARIABLE ANNUITY ACCOUNT D
By: _________________________________________________________
GREAT AMERICAN RESERVE INSURANCE COMPANY
By: _________________________________________________________
GREAT AMERICAN RESERVE INSURANCE COMPANY
11815 N. Pennsylvania Street, Carmel, Indiana 46032-4572
Telephone: (317) 817-3700
A Stock Company
In consideration of the application and payment of the initial premium, we
issue this flexible premium variable deferred annuity subject to the terms of
this contract. The provisions on the pages which follow are part of the
contract.
Please read this contract. You may return it to us or to the
representative through whom it was purchased within 10 days after receipt for a
full refund of premium. Upon delivery or mailing, the contract will be void from
the contract date, and any premiums paid will be refunded.
READ YOUR CONTRACT CAREFULLY
This contract is a legal contract between you and us.
Signed as of the contract date at our administrative office.
/s/ [Illegible] /s/ [Illegible]
Secretary President
INDIVIDUAL FLEXIBLE PREMIUM VARIABLE DEFERRED ANNUITY
Monthly Income at Maturity
Death Benefit Prior to Maturity Date
Flexible Premium Payment
Non Participating
ANNUITY PAYMENTS AND SURRENDER VALUES PROVIDED BY THE CONTRACT, WHEN BASED ON
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND
ARE NOT GUARANTEED AS TO DOLLAR AMOUNT.
<PAGE>
GREAT AMERICAN RESERVE INSURANCE COMPANY
ADMINISTRATIVE OFFICE
11815 N. Pennsylvania Street, Carmel, Indiana 46032
(317) 817-3700
CONTRACT SPECIFICATIONS
Contract Number: &&&&&&&&&&&&&&&&&&& Contract Date: &&&&&&&&&&&&
Annuitant: &&&&&&&&&&&&&&&&&&&&&&&&& Annuitant Age at Issue: &&&
Owner: &&&&&&&&&&&&&&&&&&&&&&&&&&&&& Premium Payment: &&&&&&&&&& (initial);
&&&&&&&&&& (subsequent)
Allocation of Payments Among Investment Options (as a percentage):
Variable Account- Sub-accounts
Conseco Series Trust:
Common Stock ____%
Asset Allocation ____%
Government Securities ____%
Corporate Bond ____%
Money Market ____%
The Alger American Fund:
Alger American Leveraged
AllCap Portfolio ____%
Alger American Small
Capitalization Portfolio ____%
Dreyfus Stock Index Fund 30%
----
The Dreyfus Socially Responsible
Growth Fund, Inc. ____%
Fixed Account 20%
----
Insurance Management Series:
Corporate Bond Fund 20%
----
International Stock Fund ____%
Utility Fund ____%
Janus Aspen Series:
Aggressive Growth Portfolio 30%
----
Growth Portfolio ____%
Worldwide Growth Portfolio ____%
Van Eck Worldwide Insurance Trust:
Worldwide Bond Fund ____%
Gold and Natural Resources Fund ____%
Worldwide Hard Assets Fund ____%
Withdrawal charge (as a percentage):
Withdrawal 9% 9% 8% 7% 5% 3% 0%
Charge
--------------------------------------------------------------------
Years per 1 2 3 4 5 6 7th and thereafter
payment
For issue up to age 52, there is no withdrawal charge after from the 15th
contract year and later. For issue from age 53 to 56, there is no
withdrawal charge made after you attain age 67 and later. For issue ages
57 and later, any withdrawal charge will be multiplied by the following:
Charge Factor .9 .8 .7 .6 .5 .4 .3 .2 .1 0
-------------------------------------------------------------------------
Contract Year 1 2 3 4 5 6 7 8 9 10th and thereafter
Annual Administrative Fee: $30 per contract year (waived if contract value
greater than $25,000).
Fixed Account minimum interest rate guarantee: 3% per year.
Variable Account: Great American Reserve Variable Annuity Account E consists of
the following trusts and funds: Conseco Series Trust: Common Stock Portfolio,
Asset Allocation Portfolio, Government Securities Portfolio, Corporate Bond
Portfolio, Money Market Portfolio; The Alger American Fund: Alger American
Leveraged AllCap Portfolio, Alger American Small Capitalization Portfolio;
Dreyfus Stock Index Fund; The Dreyfus Socially Responsible Growth Fund, Inc.;
Insurance Management Series: Corporate Bond Fund, International Stock Fund,
Utility Fund; Janus Aspen Series: Aggressive Growth Portfolio, Growth Portfolio,
Worldwide Growth Portfolio; Van Eck Worldwide Insurance Trust: Worldwide Bond
Fund, Gold and Natural Resources Fund, Worldwide Hard Assets Fund.
Variable Account Annual Expenses (as a percentage):
Mortality and Expense Risk: 1.25% per year.
Administrative Charge: 0.15% per year.
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<PAGE>
TABLE OF CONTENTS
Page
----
DEFINITIONS ................................................................. 4
Accumulation Unit: Age: Annuitant: Annuity Unit: Contract
Anniversaries and Years: Contract Date: Contract Value: Fixed
Account Value: Individual Account: Investment Option: Maturity
Date: Owner or Contract Owner(s): Variable Account: Variable
Account Value: We, Us, or Company
INTRODUCTION TO THE INVESTMENT OPTIONS ...................................... 5
VARIABLE ACCOUNT ............................................................ 5
General Description: Allocations to Variable Account: Valuation
Period: Variable Account Value: Transfer Rights
FIXED ACCOUNT ............................................................... 6
General Description: Allocations to Fixed Account: Fixed Account
Value: Interest Credits: Transfers of Fixed Account Value
ACCUMULATION PROVISIONS ..................................................... 7
Payment of Premiums: Contract Value: Withdrawals: Free
Withdrawal Amount: Proceeds Applied to Settlement Option:
Restrictions on Distributions: Death of the Annuitant
SETTLEMENT PROVISIONS ....................................................... 8
Maturity Date: Election of Option: Options: Allocation of
Proceeds: Fixed Annuity: Variable Annuity Contract and Payments;
Monthly Income: Interest and Mortality Table: Required
Commencement of Distributions
CONTRACT CHARGES ............................................................ 10
Withdrawal Charge: Free Withdrawal Amount: Administrative Fees:
Variable Account Annual Expenses: Premium Taxes
OTHER PROVISIONS ............................................................ 11
This Contract: Incontestability; No Dividends: Misstatement of
Age: Delay of Payments: Reports: Ownership of Contract:
Beneficiary: Change of Beneficiary: Nonforfeitable and
Nontransferable
SETTLEMENT OPTION TABLES .................................................... 13
ADDITIONAL BENEFITS ................................................... Attached
APPLICATION ........................................................... Attached
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DEFINITIONS
ACCUMULATION UNIT: An accounting unit used to calculate variable account value.
AGE: Age means age last birthday.
ANNUITANT: A person upon whose life the contract is issued.
ANNUITY UNIT: An accounting unit used to calculate variable annuity payments.
CONTRACT ANNIVERSARIES AND YEARS: Contract anniversaries and contract years are
computed from the contract date. The first contract anniversary date is one year
after the contract date.
CONTRACT DATE: This contract takes effect on the contract date if the initial
premium is received at our administrative office and the annuitant is alive. The
contract date is the later of that shown on the contract cover page or the date
the initial premium is received.
CONTRACT VALUE: The total of your individual account values held under the
contract.
FIXED ACCOUNT: An additional account you may choose to allocate premium payments
and contract values. It provides guaranteed values.
FIXED ACCOUNT VALUE: The value of all fixed account amounts accumulated under
this contract prior to the maturity date.
INDIVIDUAL ACCOUNT: The record established by us which represents a contract
owner's interest in an investment option prior to the maturity date.
INVESTMENT OPTION: The investment choices available to contract owners as shown
on the contract specifications page.
MATURITY DATE: The date on which annuity payments of the contract begin.
OWNER OR CONTRACT OWNER: The person entitled to all of the ownership rights
under the contract. Also referred to as "you" or "your".
VARIABLE ACCOUNT: The segregated asset account has been established by us
pursuant to the provisions of the insurance code of the State of Texas, and
identified as Great American Reserve Variable Annuity Account E. The Variable
Account is segmented into sub-accounts. The sub-accounts serve as investment
options for premium payments made pursuant to the contract. The assets of the
variable account equal to the reserves and other contract liabilities with
respect to the variable account are not chargeable with liabilities rising out
of any other business we may conduct.
VARIABLE ACCOUNT VALUE: The value of all variable account amounts accumulated
under this contract prior to the maturity date.
WE, US, OR COMPANY: Great American Reserve Insurance Company.
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INTRODUCTION TO THE INVESTMENT OPTIONS
This contract allows you to allocate premium payments to the investment options
shown on the contract specifications page which include both the variable
account and the fixed account. The variable account is a separate investment
account maintained by us and its assets are not chargeable with the liabilities
of any other business we conduct. The fixed account is part of our "general
account," which consists of all our assets except the assets of the variable
account and the assets of other separate investment accounts we may maintain.
You may allocate your premium payments to, and receive annuity payments from,
either the variable account or the fixed account, or both. If you allocate
payments to the variable account investment options, your accumulation values
and annuity payments will fluctuate according to the investment performance of
the eligible portfolios you choose. If you allocate payments to the fixed
account, your contract values and annuity payments will have guaranteed
minimums. If you allocate payments to both the variable account investment
options and fixed account, then your contract values and annuity payments will
be variable in part and fixed in part.
VARIABLE ACCOUNT
GENERAL DESCRIPTION. The name of the variable account is shown on the contract
specifications page. The variable account is a separate investment account
maintained by us. The assets of the variable account are our property, but are
not chargeable with the liabilities arising out of any other business we may
conduct. The assets of the variable account will be available to cover the
liabilities of our general account only to the extent that the assets of the
variable account will exceed the liabilities of the variable account arising
under the variable annuity contracts supported by the variable account. The
assets of the variable account are segregated by eligible portfolios, thus
establishing a series of investment options within the variable account. The
eligible portfolios and investment options are listed on the contract
specifications page. We may, from time to time, change the eligible portfolios
and investment options.
Before the maturity date, your interest in any investment option of the variable
account is measured by the number of accumulation units credited to your
individual account for that investment option. When annuity payments begin, the
payee's interest in any investment option of the variable account is measured by
the number of annuity units credited to your individual account for that
investment option.
ALLOCATIONS TO VARIABLE ACCOUNT. Premium payments will be allocated to the
investment option in accordance with the selection made by you in the
application. You may change such selection by written authorization.
Allocations to the variable account result in accumulation units being credited
to your individual account pursuant to this contract. The number of units for
any investment option will equal the amount being allocated to that investment
option divided by the investment option's accumulation unit value at the time of
allocation. You may later transfer your units between the investment options
subject to any charges, terms and conditions we may impose on such transfers.
At any time, your individual account value in each investment option is
determined by multiplying your number of that investment option's accumulation
units by the accumulation unit value for that investment option at that time of
determination.
VALUATION PERIOD. The variable account Investment options are valued each
valuation period using the net asset value of the eligible portfolio shares held
in the variable account. A valuation period is the period commencing at the
close of trading of the New York Stock Exchange on each valuation date and
ending at the close of trading on the next succeeding valuation date. A
valuation date is each business day of ours that is also a day the New York
Stock Exchange is open for trading.
VARIABLE ACCOUNT VALUE. Your individual account value will fluctuate in
accordance with the investment results of the underlying eligible portfolios. In
order to determine how these fluctuations affect your contract value, we utilize
an accumulation unit value. Each investment option 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 we first purchased eligible portfolio shares on behalf of the variable
account, we valued each accumulation unit at $1.00. The unit value for each
investment option at any valuation period thereafter is determined by
multiplying the value
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for the prior period by a net investment factor. This factor may be greater or
less than 1.0; therefore, the accumulation unit value may increase or decrease
from valuation period to valuation period. The net investment factor for each
investment option 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:
(i) the valuation period equivalent of the per year mortality and
expense risk and administrative charges shown on the contract
specifications page; plus
(ii) a charge factor, if any, for any tax provision established by
us as a result of the operations of the investment options.
TRANSFER RIGHTS. You may transfer variable account value among the investment
options and to the fixed account subject to the following:
(a) the transfer must be by written authorization before the maturity
date; and
(b) the number of transfers may not exceed one in any 30 day period.
FIXED ACCOUNT
GENERAL DESCRIPTION. This fixed account consists of all of our assets other than
those assets in the variable account and other separate investment accounts.
Subject to applicable law, we have sale discretion over the investment of the
assets of the fixed account.
Before the maturity date, your interest in the fixed account is measured by your
individual account value. When annuity payments begin, the payee's Interest in
the fixed account is measured by the amount of each periodic annuity payment.
Benefits payable from the fixed account will not be less than the minimum values
required by any law of the jurisdiction where this contract was delivered.
ALLOCATIONS TO THE FIXED ACCOUNT. Premium payments will be allocated to your
individual account in accordance with the selection made by you in the
application. You may change such selection by written authorization.
FIXED ACCOUNT VALUE The fixed account value at any time is equal to.
(a) All premium payments allocated to the fixed account, plus
(b) any variable account value transferred to the fixed account, less
(c) any prior partial withdrawals from the fixed account; less
(d) any fixed account value transferred to the variable accounts; less
(e) any administrative fee and premium taxes; plus
(f) interest earned
INTEREST CREDITS. Interest will be credited to the premium payments allocated to
your individual account at rates declared by us. A minimum guaranteed interest
rate is shown on the contract specifications page.
TRANSFERS OF FIXED ACCOUNT VALUE You may transfer fixed account value to one or
more investment options of the variable account subject to the following.,
(a) the transfer must be by written authorization before the maturity
date, and
(b) the transfer may not exceed 20% of the fixed account value in any
six month period; and
(c) the number of transfers may not exceed one in any 30 day period.
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ACCUMULATION PROVISIONS
PAYMENT OF PREMIUMS. The initial premium must be paid to place this contract in
force. The due date of the first premium is the contract date. After the initial
premium is paid, premiums may be paid at any time while this contract is in
force and the annuitant is living. We reserve the right to refuse any premium
payment. All premiums after the initial premium must be paid at our
administrative office. We will give receipt for a premium payment upon written
request.
CONTRACT VALUE. This is the total of your individual account values held under
the contract in each investment option of the variable account plus the fixed
account value. The value of your individual account will depend on the value of
the accumulation units in each investment option of the variable account plus
the fixed account value.
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 our
administrative office. In the case of a total withdrawal, we will pay the
contract value as of the date of receipt of the request at our administrative
office, less any annual administration fee, or any applicable withdrawal charge,
and the contract will be cancelled. In the case of a partial withdrawal, we will
pay the amount requested and cancel that number of accumulation units credited
to each individual account or reduce the individual account of the fixed account
necessary to equal the amount withdrawn from each individual account plus any
applicable withdrawal charge deducted from such individual account. There is no
withdrawal charge with respect to FREE WITHDRAWAL AMOUNT described below (see
Contract Charges). When making a partial withdrawal, you should specify the
investment options from which the withdrawal is to be made. The withdrawal
should be in an amount of $250 or more. If a partial withdrawal reduces either
the individual account or the contract value to less than $500, we reserve the
right to pay the entire individual account value or contract value. Upon payment
of the entire contract value, we shall have no further liability and the
contract must be returned to us. Partial withdrawals from the fixed account are
limited to one in any six month period.
FREE WITHDRAWAL AMOUNT. After the first contract year, a contract owner may make
a free withdrawal for that year of up to the greater of:
(a) ten percent of the contract value (as determined on the date of the
requested withdrawal), or
(b) the contract value divided by the annuitant's life expectancy based
on IRS annuity regulations, or
(c) the total of any premium payments that have been in the contract
more than six complete contract years.
PROCEEDS APPLIED TO A SETTLEMENT OPTION. All or a part of the contract value may
be applied to a settlement option. The proceeds that will be applied to the
settlement option will be as follows:
(a) the contract value, if the settlement option elected begins at least
four years after the contract date and is paid under any life
annuity option, or any option with payments for a minimum period
five years, with no rights of early withdrawal; or
(b) the death benefit if proceeds are payable under death of annuitant;
or
(c) the contract value less any withdrawal charge and any administrative
fee.
RESTRICTIONS ON DISTRIBUTIONS. Distributions under the contract, including any
withdrawals and payment of contract value, shall not begin prior to the date
you:
(a) attain age 59-1/2; or
(b) separate from service of your employer; or
(c) die or become disabled; or
(d) suffer a financial hardship as defined in the Internal Revenue
Service regulations.
In the event of a distribution based on financial hardship, such distribution
shall consist solely of contributions to the contract pursuant to a salary
reduction agreement between you and your employer. Such distribution shall not
include any income resulting from such contributions.
These restrictions do not apply to any contract value existing under the
contract as of December 31, 1988.
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DEATH OF THE ANNUITANT. If the annuitant dies prior to the maturity date, the
death benefit will be defined as follows:
If the annuitant dies at age 75 or younger, the 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 our
administrative office, or
(b) the sum of all premiums paid, less any partial withdrawals.
During any subsequent seven contract year period, the death benefit will be the
greater of:
(a) the contract value on the date due proof of death is received at our
administrative office, or
(b) the contract value on the last day of the previous seven contract
year period plus any premium payments made and less any partial
withdrawals since then; or
(c) the sum of all premiums paid, less any partial withdrawals.
If the annuitant dies over age 75, the death benefit will be equal to the
contract value.
Generally, payment must be made by December 31 of the year containing the fifth
anniversary of the date of the annuitant's death; or if any portion of the
contract is to be distributed under any of the settlement options to a
beneficiary named in the contract, then distribution must begin by December 31
of the year following the year of the annuitant's death. In such case, the
method of distribution must provide for payment over the life of the beneficiary
or over a period not greater than the life expectancy of the beneficiary.
Any benefit due at the death of the annuitant will be paid to the beneficiary,
unless otherwise provided. If the beneficiary is the spouse of the annuitant and
the annuitant dies prior to the maturity date, the spouse may continue the
contract in force as the owner. 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.
If the annuitant dies on or after the maturity date and payments are being made
under a settlement option, remaining distributions will be made as described in
SETTLEMENT PROVISIONS or over a period at least as rapidly as under the method
of distribution being used as of the date of death.
SETTLEMENT PROVISIONS
MATURITY DATE. Monthly income payments start on the maturity date. The owner may
change the maturity date. The change requires written notice from the owner to
us 30 days before the maturity date. Monthly income payments which begin on the
maturity date will be determined as specified below.
ELECTION OF OPTION The owner may elect an option by a written request in a form
acceptable to us before the proceeds become payable. The beneficiary may elect
an option upon the death of the annuitant. A change shall not take effect until
recorded at our administrative office. When so recorded, the change shall take
effect on the date of receipt of the written request. We are not liable for a
payment made or action taken before the request is recorded. If the payee is not
a natural person, any option elected must be approved by us.
OPTION All or any part of the contract proceeds may be applied under one or a
combination of the following options. The proceeds may also be paid in any other
way agreed to by us, subject to the minimum distribution requirements set forth
by the Internal Revenue Code including the incidental death benefit and minimum
distribution requirements.
Option 1 - Lifetime Only Annuity. We will make monthly payments during the life
of the payee. If this option is elected, it is understood and agreed that
payments shall cease immediately upon the death of the payee and the annuity
will terminate without further value.
Option 2 - Lifetime Annuity with Guaranteed Period. We will make monthly
payments for the guaranteed period selected and thereafter for the life of the
payee. If this option is elected, it is understood and agreed that upon the
death of the payee, any amounts remaining under the guaranteed period selected
will be distributed to the beneficiary at least as rapidly as under the method
of distribution being used as of the date of the payee's death.
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Option 3 - Installment Refund Life Annuity. We will make monthly payments for
the installment refund period (the time required for the sum of the payments to
equal the amount applied), and thereafter for the life of the payee. If this
option is elected, it is understood and agreed that upon the death of the payee,
any amounts remaining under the installment refund period will be distributed to
the beneficiary at least as rapidly as under the method of distribution being
used as of the date of the payee's death.
Option 4 - Fixed Period Annuity. We will make monthly payments for a fixed
period of 3 to 20 years.
Option 5 - Fixed Amount Annuity. We will make monthly payments for a minimum of
3 years and a maximum of 20 years in an amount elected until the amount applied,
together with interest, is exhausted.
The option used will be as elected by the owner. If no option has been elected,
the contract value will be paid under Option 2 as life income with ten years
certain.
ALLOCATION OF PROCEEDS. At the time election of one of the settlement options is
made, the proceeds may be applied to provide: a variable annuity, a fixed
annuity; or a combination of both. If no election is made to the contrary, that
portion of the amount due from the variable account shall be applied to provide
a variable annuity. The portion of the amount due from the fixed account shall
be applied to a fixed annuity.
FIXED ANNUITY. This is an annuity providing for payments, each of which remain
the same throughout the annuity payment period. Fixed annuity payments are
guaranteed by us as to their amount. They are not based upon the investment
experience of the variable account.
VARIABLE ANNUITY. This is an annuity providing for payments which vary in amount
throughout the annuity payment period. The amounts are based on the net
investment experience of the investment options of the variable account. After
the first monthly payment for a variable annuity has been computed, a number of
variable account annuity units is computed by dividing that first monthly
payment by the investment option's annuity unit value at the start date of the
annuity payments. Once variable annuity payments have begun, the number of the
annuity units remains fixed unless the payee makes a written request for a
change of variable annuity investment options complete with all necessary
information to our administrative office. We will transfer the investment option
as of the date of receipt of the request at our administrative office. We are
not liable for a payment made or action taken before the request is recorded.
Any change requested must be at least six months after a prior selection. The
payee's request must specify that percentage of the annuity payment that is to
be based on the investment performance of each investment option of the variable
account. No transfers may be made from a fixed annuity option to a variable
annuity option or from a variable annuity option to a fixed annuity option. We
reserve the right to modify, terminate or defer the transfer privilege at any
time.
The annuity unit value for each investment option of the variable account is
computed by multiplying the value of that investment option annuity unit value
for the preceding period by the net investment factor of that investment option
for the valuation period and then dividing this result by the valuation period
equivalent of the assumed interest rate. The assumed interest rate must be
selected prior to the first annuity payment and can be three percent or five
percent. The annuity unit value is equal to the investment option accumulation
unit value on the date of the first annuity payment.
The dollar amount of variable annuity payments after the first is not fixed and
may change from month to month. The amount of each variable annuity payment
after the first is computed by multiplying the number of investment option
annuity units by the investment option annuity unit value for the valuation
period in which the payment is due.
Any variation in the actual mortality experience of payees from the mortality
assumption used to compute the first monthly payment will not affect the dollar
amount of variable annuity payments.
CONTRACT AND PAYMENTS. Return the contract and a supplemental contract which
states the terms of settlement under the option elected will be issued to the
payee. We will require satisfactory proof of the age of each payee under options
1.2 and 3.
If any payment to a payee is less than $50, we may change the payment to a less
frequent basis. Unless the right is given in the election option. no payee shall
have the right to assign, commit or encumber any of the payments.
We reserve the right:
(1) to make all payments by check which will require the personal
endorsement of the payee; and
(2) to require satisfactory proof of the death or of the continued life
of any person whose death or continued life affects any payment
under this contract.
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MONTHLY INCOME. The amount of monthly income to be paid under this contract will
depend on the contract value on the date, the investment options used, and the
settlement option elected. The amount of monthly income factors are shown on the
Settlement Option Tables. If excess interest is paid or credited by us on fixed
annuity options, these monthly income factors could be greater.
INTEREST AND MORTALITY TABLE. The rate of interest guaranteed under the fixed
annuity settlement options is three percent per year. The settlement option
rates are based on the 1983 Individual Annuity Mortality Table.
COMMENCEMENT OF DISTRIBUTIONS. With respect to all values accruing under this
contract on or after January 1, 1987, distributions must begin no later than
April 1 following the close of the calendar year in which you attain age 70-1/2.
In the event this contract is issued after April 1 following the close of the
calendar year in which you attain age 70-1/2 due to a transfer of your interest
in another Section 403(b)(1) annuity or a Section 403(b)(7) custodial account,
the commencement date must be no later than December 31 of the calendar year in
which the transfer occurs. However, if you attain age 70-1/2 prior to January 1,
1988 or if the contract is a governmental or church plan, the commencement date
may be deferred until no later than April 1 following the calendar year in which
you retire.
An annuitant may satisfy the minimum distribution requirements under Section
403(b)(10) of the Code by receiving distribution from one TSA that is equal to
the amount required to satisfy the minimum distribution requirements for two or
more TSA'S.
CONTRACT CHARGES
WITHDRAWAL CHARGE If a withdrawal is made from the contract before the maturity
date, a withdrawal charge may be assessed against the premium payments that have
been made in the contract less than six contract years. There is never a charge
with respect to free withdrawal amounts described below or premium payments that
have been in the contract more than six contract years. The length of time from
receipt of a premium payment to the time of withdrawal determines the withdrawal
charge. For this purpose, premium payments will be deemed to be withdrawn in the
order in which they are received and all withdrawal amounts will be first from
premium payments and then from other contract values. The withdrawal charge is a
percentage of the withdrawal amount as specified on the contract specifications
page.
FREE WITHDRAWAL AMOUNT After the first contract year, a contract owner may make
a free withdrawal for that year of up to the greater of:
(a) ten percent of the contract value (as determined on the date of the
requested withdrawal) or
(b) the contract value divided by the annuitant's life expectancy based
on IRS annuity regulations, or
(c) the total of any premium payments that have been in the contract
more than six complete contract years.
ADMINISTRATIVE FEES Prior to the maturity date an annual administrative fee as
shown on the contract specifications page may be deducted on each contract
anniversary, on the date this contract is fully surrendered or the date the
contract value is applied to a settlement option. The deduction will be made
from amounts accumulated in the fixed account, if available; otherwise from the
variable account investment options.
A daily charge in the amount equal on an annual basis as shown on the contract
specifications page is also deducted from the variable account investment
options to reimburse us for administrative expenses of the contracts and
operations of the variable account and the company in connection with the
contract. 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 investment option of the variable
account (see Variable Account Annual Expenses). We guarantee that these
administrative fees will not increase.
VARIABLE ACCOUNT ANNUAL EXPENSES. Each valuation period, we deduct from each
investment option of the variable account an amount equal to: (a) multiplied by
(b) where:
(a) is the net asset value of the investment option; and
(b) is equal to the valuation period equivalent of the mortality and
expense risk charge and administration charge shown on the contract
specifications page.
These charges are taken into account in determining the value of your individual
account accumulation units. These asset based variable account annual expenses
will not be deducted from the fixed account. We guarantee that these variable
account annual expenses will not increase.
PREMIUM TAXES Any premium or other taxes levied by any governmental entity with
respect to this contract will be deducted from your premiums or contract value
when incurred, at our option, at a later date.
Page 10
<PAGE>
OTHER PROVISIONS
THIS CONTRACT. The consideration for issuing this contract is the application
and payment of the initial premium. The application, contract and any
endorsement or rider attached are the entire contract. Statements in the
application are considered representations rather than warranties, except in the
case of fraud.
We may change any of the terms of this contract. Any change must be made in
writing and with your consent, unless provided otherwise by this contract. No
such change may affect the amount or terms of any annuity effected prior to the
effective date of such change.
To assure that the contract will maintain its status as a variable annuity, we
reserve the right to change this contract to comply with future changes in any
federal or state statute, rule, or regulation. You will be sent a copy of any
such amendment as well as a copy of the regulatory change requiring the
amendment.
We reserve the right, subject to compliance with the law as currently applicable
or subsequently changed to operate the variable account in any form permitted
under the Investment Company Act of 1940 ("1940 Act" ) or in any other form
permitted by law; to take any action necessary to comply with or obtain and
continue any exemptions from the 1940 Act or to comply with any other applicable
law; to transfer any assets in any sub-account to another sub-account, or to the
fixed account; or to add, combine or remove sub-accounts in the variable
account; and to change the way we assess charges, so long as we do not increase
the aggregate amount beyond that currently charged to the variable account and
the eligible portfolios in connection with this contract. If the shares of any
of the eligible portfolios should become unavailable for investment by the
variable account or if in our judgment further investment in such portfolio
shares should become inappropriate in view of the purpose of the contract, we
may add or substitute shares of another mutual fund for eligible portfolio
shares already purchased under the contract. No substitution of portfolio shares
in any sub-account may take place without prior approval of the Securities and
Exchange Commission and notice to you, to the extent required by the 1940 Act.
We reserve the right to postpone any type of payment from the variable account
for any period when: the New York Stock Exchange is closed other than customary
weekend and holiday closings; trading on that Exchange is restricted; an
emergency exists as a result of which it is not reasonably practicable to
dispose of securities held in the variable account or determine their value; or
the Securities and Exchange Commission shall permit delay for the protection of
security holders. The applicable rules of the Securities and Exchange Commission
shall govern as to whether the above conditions exist. We reserve the right to
postpone withdrawal payments from the fixed account for up to six months.
INCONTESTABILITY. This contract will be incontestable after the contract date.
NO DIVIDENDS. This contract will not pay dividends. It will not share in any
surplus or earnings of the Company.
MISSTATEMENT OF AGE. If the age of the annuitant has been misstated, the amount
of the annuity payable will be corrected to the amount which the premium paid
would have purchased for the correct age.
If the misstatement of age is discovered after the monthly income payments have
started:
(1) any overpayment by us, with compound interest at no more than 6% per
year, shall be deducted from the first income payments due after
correction; and
(2) any under payment by us, with compound interest at 6% per year,
shall be paid by us.
REPORTS. We will send you a report that shows the contract value at least once
in each contract year. We will send any other reports that may be required by
law.
OWNERSHIP OF CONTRACT. The annuitant is the owner of this contract on the
contract date. Such owner may exercise all rights granted by this contract
without the consent of any revocable beneficiary.
BENEFICIARY. The beneficiary will receive any proceeds that are due when the
annuitant dies. The beneficiary is as named in the application unless changed as
provided in the contract. Unless otherwise shown:
(1) all beneficiaries may be changed; and
(2) a primary beneficiary takes all proceeds if living when the
annuitant dies; and
(3) a contingent beneficiary takes all proceeds only if living when the
annuitant dies and if all primary beneficiaries are dead; and
(4) it no beneficiary is living when the annuitant dies, the proceeds
will be paid to the annuitant's estate; and
(5) when more than one beneficiary is to share the funds, proceeds will
be paid in equal shares.
Page 11
<PAGE>
At the time of payment, we may rely on the affidavit of other responsible
persons concerning identity, existence, relationship arid other facts concerning
named beneficiaries. To the extent permitted by law, no payment of proceeds or
interest shall be subject to the claims of creditors of a beneficiary.
CHANGE OF BENEFICIARY. While the annuitant is living, a change of beneficiary
may be made by filing a written request in a form acceptable to us. Any
irrevocable beneficiary must consent in writing to a change. A change shall not
take effect until recorded at our administrative office. When so recorded, the
change shall take effect on the date of receipt of the written request. We are
not liable for a payment made or action taken before the request is recorded.
NONFORFEITABLE AND NONTRANSFERABLE. The annuitant's interest under this contract
may not be sold, assigned, discounted, or pledged as collateral or as security
for the performance of an obligation. This contract is nonforfeitable.
Page 12
<PAGE>
GREAT AMERICAN RESERVE INSURANCE COMPANY
SETTLEMENT OPTION TABLE
Guaranteed Payout for Fixed Option and Payout for Variable Option Using 3%
Assumed Interest Rate
<TABLE>
<CAPTION>
=====================================================================================
OPTION 4 TABLE OPTION 1,2, AND 3 TABLES
- ------------------- --------------------------------------------------- -------------
MALE and FEMALE
---------------------------------------------------
Monthly Installments for Life
With Guaranteed Period
--------------------------------------------------- -------------
Attained Age
of Payee
No. of 10 Years 15 Years 20 Years When First
Years Monthly Lifetime Installment Certain Certain Certain Installment
Payable Payments Only Refund and Life and Life and Life is Payable
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$3.90 3.80 3.89 3.86 3.82 50
3.97 3.86 3.95 3.92 3.88 51
3 28.99 4.03 3.91 4.01 3.98 3.93 52
4 22.06 4.10 3.97 4.08 4.04 3.99 53
5 17.91 4.18 4.03 4.15 4.11 4.04 54
- -------------------------------------------------------------------------------------
6 15.14 4.25 4.10 4.22 4.18 4.11 55
7 13.16 4.34 4.17 4.30 4.25 4.17 56
8 11.68 4.42 4.24 4.38 4.32 4.23 57
9 10.53 4.52 4.31 4.47 4.40 4.30 58
10 9.61 4.61 4.39 4.56 4.48 4.37 59
- -------------------------------------------------------------------------------------
11 8.86 4.72 4.48 4.66 4.57 4.44 60
12 8.24 4.83 4.56 4.76 4.66 4.51 61
13 7.71 4.95 4.66 4.86 4.75 4.58 62
14 7.26 5.07 4.75 4.98 4.85 4.65 63
15 6.87 5.21 4.86 5.10 4.95 4.72 64
- -------------------------------------------------------------------------------------
16 6.53 5.35 4.97 5.22 5.05 4.79 65
17 6.23 5.51 5.08 5.36 5.16 4.86 66
18 5.96 5.67 5.20 5.50 5.26 4.93 67
19 5.73 5.85 5.33 5.65 5.37 5.00 68
20 5.51 6.04 5.47 5.80 5.49 5.06 69
- -------------------------------------------------------------------------------------
6.25 5.61 5.96 5.60 5.12 70
6.47 5.76 6.14 5.71 5.18 71
6.71 5.93 6.31 5.83 5.23 72
6.97 6.10 6.50 5.94 5.28 73
7.26 6.28 6.69 6.04 5.32 74
7.56 6.48 6.89 6.14 5.35 75
=====================================================================================
</TABLE>
All factors are per $1,000 of policy proceeds.
Page 13
<PAGE>
GREAT AMERICAN RESERVE INSURANCE COMPANY
SETTLEMENT OPTION TABLE
Payout for Variable Option Using 5% Assumed Interest Rate
<TABLE>
<CAPTION>
=====================================================================================
OPTION 4 TABLE OPTION 1,2, AND 3 TABLES
- ------------------- --------------------------------------------------- -------------
MALE and FEMALE
---------------------------------------------------
Monthly Installments for Life
With Guaranteed Period
--------------------------------------------------- -------------
Attained Age
of Payee
No. of 10 Years 15 Years 20 Years When First
Years Monthly Lifetime Installment Certain Certain Certain Installment
Payable Payments Only Refund and Life and Life and Life is Payable
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$5.12 5.04 5.09 5.06 5.01 50
5.17 5.09 5.14 5.11 5.05 51
3 29.80 5.23 5.15 5.20 5.16 5.10 52
4 22.89 5.30 5.20 5.26 5.22 5.15 53
5 18.74 5.37 5.26 5.33 5.28 5.20 54
- -------------------------------------------------------------------------------------
6 15.99 5.44 5.33 5.40 5.34 5.26 55
7 14.02 5.52 5.39 5.47 5.40 5.31 56
8 12.56 5.60 5.47 5.54 5.47 5.37 57
9 11.42 5.69 5.54 5.62 5.54 5.43 58
10 10.51 5.79 5.62 5.71 5.62 5.49 59
- -------------------------------------------------------------------------------------
11 9.77 5.89 5.70 5.80 5.69 5.55 60
12 9.16 6.00 5.79 5.90 5.78 5.61 61
13 8.64 6.11 5.89 6.00 5.86 5.67 62
14 8.20 6.23 5.99 6.11 5.95 5.74 63
15 7.82 6.37 6.10 6.22 6.04 5.80 64
- -------------------------------------------------------------------------------------
16 7.49 6.51 6.21 6.34 6.14 5.87 65
17 7.20 6.66 6.33 6.47 6.24 5.93 66
18 6.94 6.82 6.46 6.60 6.34 5.99 67
19 6.71 7.00 6.60 6.74 6.44 6.05 68
20 6.51 7.19 6.74 6.89 6.54 6.11 69
- -------------------------------------------------------------------------------------
7.39 6.90 7.05 6.65 6.16 70
7.62 7.06 7.21 6.75 6.21 71
7.86 7.24 7.38 6.86 6.26 72
8.12 7.42 7.56 6.96 6.30 73
8.41 7.63 7.74 7.06 6.34 74
8.72 7.84 7.93 7.15 6.37 75
=====================================================================================
</TABLE>
All factors are per $1,000 of policy proceeds.
Page 14
GREAT AMERICAN RESERVE INSURANCE COMPANY
11815 N. Pennsylvania Street, Carmel, Indiana 46032-4572
Telephone: (317) 817-3700
A Stock Company
INDEX
DEFINITIONS CONTRACT CHARGES
INTRODUCTION TO THE INVESTMENT OPTIONS OTHER PROVISIONS
THE VARIABLE ACCOUNT SETTLEMENT OPTION TABLES
THE FIXED ACCOUNT ADDITIONAL BENEFITS
ACCUMULATION PROVISIONS APPLICATION attached
SETTLEMENT PROVISIONS
INDIVIDUAL FLEXIBLE PREMIUM VARIABLE DEFERRED ANNUITY
MONTHLY INCOME AT MATURITY
DEATH BENEFIT PRIOR TO MATURITY DATE
FLEXIBLE PREMIUM PAYMENT
NON PARTICIPATING
<PAGE>
GREAT AMERICAN RESERVE INSURANCE COMPANY
11815 N. Pennsylvania Street, Carmel, Indiana 46032-4572
Telephone: (317) 571-3700
A Stock Company
In consideration of the application and payment of the initial premium, we
issue this flexible premium variable deferred annuity subject to the terms of
this contract. The provisions on the pages which follow are part of the
contract.
Please read this contract. You may return it to us or to the
representative through whom it was purchased within 10 days after receipt for a
full refund of premium. Upon delivery or mailing, the contract will be void from
the contract date, and any premiums paid will be refunded.
READ YOUR CONTRACT CAREFULLY
This contract is a legal contract between you and us.
Signed as of the contract date at our administrative office.
PRESIDENT SECRETARY
GROUP FLEXIBLE PREMIUM VARIABLE DEFERRED ANNUITY
Monthly Income at Maturity
Death Benefit Prior to Maturity Date
Flexible Premium Payment
Non Participating
ANNUITY PAYMENTS AND SURRENDER VALUES PROVIDED BY THE CONTRACT, WHEN BASED ON
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED
AS TO DOLLAR AMOUNT.
[Qualified]
<PAGE>
GREAT AMERICAN RESERVE INSURANCE COMPANY
ADMINISTRATIVE OFFICE
11815 N. Pennsylvania Street, Carmel, IN 46032
(317) 571-3100
CONTRACT SPECIFICATIONS
Contract Number: ________ Contract Date: _________
Annuitant: ______________ Annuitant Age at Issue: _________
Owner: __________________ Premium Payment: _____ (initial); _____ (subsequent)
Allocation of Payments Among Investment Options (as a percentage):
Variable Account - Sub-accounts
Common Stock _______
Asset Allocation _______
Government Securities _______
Corporate Bond _______
Money Market _______
Fixed Account _______
Withdrawal charge (as a percentage):
Withdrawal Charge 9% 9% 8% 7% 5% 3% 0%
Years per payment 1 2 3 4 5 6 7th and
thereafter
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 withdrawal charge will be multiplied by
the following:
Charge Factor .9 .8 .7 .6 .5 .4 .3 .2 .1 0
Contract Year 1 2 3 4 5 6 7 8 9 10th and
thereafter
Annual Administrative Fee: $30 per contract year (waived if contract value
greater than $25,000).
Fixed Account minimum interest rate guarantee: 3% per year.
Variable Account: Great American Reserve Variable Annuity Account E. Eligible
Portfolios of the Conseco Series Trust: Common Stock Portfolio; Asset Allocation
Portfolio; Government Securities Portfolio; Corporate Bond Portfolio; and Money
Market Portfolio.
Variable Account Annual Expenses (as a percentage):
Mortality and Expense Risk: 1.25% per year.
Administrative Charge: 0.15% per year.
<PAGE>
Variable Policy
Page 3 of 17
TABLE OF CONTENTS
DEFINITIONS Page
----
Accumulation Unit: Age: Annuitant: Annuity Unit: Contract Anniversaries
and Years: Contract Date: Contract Value: Fixed Account: Fixed Account
Value: Individual Account: Investment Option: Maturity Date: Owner or
Contract Owner: Variable Account: Variable Account Value: We, Us, or
Company
INTRODUCTION TO THE INVESTMENT OPTIONS
VARIABLE ACCOUNT
General Description: Allocations to Variable Account: Valuation Period:
Variable Account Value: Transfer Rights
FIXED ACCOUNT
General Description: Allocations to Fixed Account: Fixed Account Value:
Interest Credits: Transfers of Fixed Account Value
ACCUMULATION PROVISIONS
Payment of Premiums: Contract Value: Withdrawals: Proceeds Applied to
Settlement Option: Restrictions on Distributions: Death of the Annuitant
SETTLEMENT PROVISIONS
Maturity Date: Election of Option: Options: Allocation of Proceeds: Fixed
Annuity: Variable Annuity: Contract and Payments: Monthly Income: Interest
and Mortality Table: Required Commencement of Distributions:
CONTRACT CHARGES
Withdrawal Charge: Administrative Fees: Variable Account Annual Expenses:
Premium Taxes:
OTHER PROVISIONS
This Contract: Incontestability: No Dividends: Misstatement of Age: Delay
of Payments: Reports: Ownership of Contract: Individual Certificates:
Conversion to Individual Contract: Contract Owner Information:
Beneficiary: Change of Beneficiary: Nonforfeitable and Nontransferable
SETTLEMENT OPTION TABLE
ADDITIONAL BENEFITS Attached
APPLICATION
<PAGE>
Variable Policy
Page 4 of 17
DEFINITIONS
ACCUMULATION UNIT: An accounting unit used to calculate variable account value.
AGE: Age means age last birthday.
ANNUITANT: A person upon whose life the contract has been issued.
ANNUITY UNIT: An accounting unit used to calculate variable annuity payments.
CONTRACT ANNIVERSARIES AND YEARS: Contract anniversaries and contract years are
computed from the contract date. The first contract anniversary date is one year
after the contract date.
CONTRACT DATE: This contract takes effect on the contract date if the initial
premium is received at our administrative office and the annuitant is alive. The
contract date is the later of that shown on the contract specifications page or
the date the initial premium is received.
CONTRACT VALUE: The total of each participant's individual account values held
under the contract.
FIXED ACCOUNT: An additional account you may choose to allocate premium payments
and contract values. It provides guaranteed values.
FIXED ACCOUNT VALUE: The value of all fixed account amounts accumulated under
this contract prior to the maturity date.
INDIVIDUAL ACCOUNT: The record established by us which represents a
participant's interest in an investment option prior to the maturity date.
INVESTMENT OPTION: The investment choices available to participants as shown on
the contract specifications page.
MATURITY DATE: The date on which annuity payments of the contract begin.
OWNER OR CONTRACT OWNER: The person or entity entitled to all of the ownership
rights under the contract. Also referred to as "you" or "your."
PARTICIPANT: Any eligible person participating in a plan and for whom an
individual account is established under this contract.
PLAN: The Contract Owner's program which qualifies for special tax treatment. It
is designated for reference purposes only and in the event of any conflict in
provisions of the plan and this contract, for purposes of this contract the
provisions of the contract shall prevail.
VARIABLE ACCOUNT: The segregated asset account has been established by us
pursuant to the provisions of the insurance code of the State of Texas, and
identified as Great American Reserve Variable Annuity Account E. The Variable
Account is segmented into sub-accounts. The sub-accounts serve as investment
options for premium payments made pursuant to the contract. The assets of the
variable account equal to the reserves and other contract liabilities with
respect to the variable account are not chargeable with liabilities rising out
of any other business we may conduct.
VARIABLE ACCOUNT VALUE: The value of all variable account amounts accumulated
under this contract prior to the maturity date.
WE, US, OR COMPANY: Great American Reserve Insurance Company.
<PAGE>
Variable Policy
Page 5 of 17
INTRODUCTION TO THE INVESTMENT OPTIONS
This contract allows you to allocate premium payments to the investment options
shown on the contract specifications page which include both the variable
account and the fixed account as are made pursuant to the plan. The variable
account is a separate investment account maintained by us and its assets are not
chargeable with the liabilities of any other business we conduct. The fixed
account is part of our "general account," which consists of all our assets
except the assets of the variable account and the assets of other separate
investment accounts we may maintain. You may allocate your premium payments to,
and receive annuity payments from, either the variable account or the fixed
account, or both. If you allocate payments to the variable account investment
options, your accumulation values and annuity payments will fluctuate according
to the investment performance of the eligible portfolios you choose. If you
allocate payments to the fixed account, your contract values and annuity
payments will have guaranteed minimums. If you allocate payments to both the
variable account investment options and fixed account, then your contract values
and annuity payments will be variable in part and fixed in part.
VARIABLE ACCOUNT
GENERAL DESCRIPTION. The name of the variable account is shown on the contract
specifications page. The variable account is a separate investment account
maintained by us. The assets of the variable account are our property, but are
not chargeable with the liabilities arising out of any other business we may
conduct. The assets of the variable account will be available to cover the
liabilities of our general account only to the extent that the assets exceed the
liabilities arising under the variable annuity contracts supported by the
variable account. The assets of the variable account are segregated by eligible
portfolios, thus establishing a series of investment options within the variable
account. The eligible portfolios and investment options are listed on the
contract specifications page. We may, from time to time, change the eligible
portfolios and investment options.
Before the maturity date, the participant's interest in any investment option of
the variable account is measured by the number of accumulation units credited to
the participant's individual account for that investment option. When annuity
payments begin, the payee's interest in any investment option of the variable
account is measured by the number of annuity units credited to the individual
account for that investment option.
ALLOCATIONS TO VARIABLE ACCOUNT. As to each participant's individual account,
premium payments will be allocated to the investment option in accordance with
the selection made by you in the application. You may change such selection by
written authorization.
Allocations to the variable account result in accumulation units being credited
to the participant's individual account pursuant to this contract. The number of
units for any investment option will equal the amount being allocated to that
investment option divided by the investment option's accumulation unit value at
the time of allocation. As to each participant's individual account, you may
later transfer your units between the investment option subject to any charges,
terms and conditions we may impose on such transfers.
At any time, the participant's individual account value in each investment
option is determined by multiplying the participant's number of that investment
option's accumulation units by the accumulation unit value for that investment
option at that time of determination.
<PAGE>
Variable Policy
Page 6 of 17
VALUATION PERIOD. The variable account investment options are valued each
valuation period using the net asset value of the eligible portfolio shares held
in the variable account. A valuation period is the period commencing at the
close of trading of the New York Stock Exchange on each valuation date and
ending at the close of trading on the next succeeding valuation date. A
valuation date is each business day of ours that is also a day the New York
Stock Exchange is open for trading.
VARIABLE ACCOUNT VALUE. The participant's individual account value will
fluctuate in accordance with the investment results of the underlying eligible
portfolios. In order to determine how these fluctuations effect the
participant's individual account value, we utilize an accumulation unit value.
Each investment option 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 we first purchased eligible portfolio shares on behalf of the variable
account, we valued each accumulation unit at $1.00. The unit value for each
investment option 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 value
may increase or decrease from valuation period to valuation period. The net
investment factor for each investment option 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:
(i) the valuation period equivalent of the per year mortality and
expense risk charge and administrative charge shown on the
contract specifications page; plus
(ii) a charge factor, if any, for any tax provision established by
us as a result of the operations of the investment options.
TRANSFER RIGHTS. As to each participant's individual account, you may transfer
variable account value among the investment options and to the fixed account
subject to the following:
(a) the transfer must be by written authorization before the maturity
date; and
(b) the number of transfers may not exceed one in any 30 day period.
FIXED ACCOUNT
GENERAL DESCRIPTION. The fixed account consists of all of our assets other than
those assets in the variable account and other separate investment accounts.
Subject to applicable law, we have sole discretion over the investment of the
assets of the fixed account.
Before the maturity date, the participant's interest in the fixed account is
measured by the participant's individual account value. When annuity payments
begin, the payee's interest in the fixed account is measured by the amount
<PAGE>
Variable Policy
Page 7 of 17
of each periodic annuity payment.
Benefits payable from the fixed account will not be less than the minimum values
required by any law of the jurisdiction where this contract was delivered.
ALLOCATIONS TO THE FIXED ACCOUNT. As to each participant's individual account,
premium payments will be allocated to the participant's individual account in
accordance with the selection made by you in the application. You may change
such selection by written request or telephone if properly authorized.
FIXED ACCOUNT VALUE. As to each participant's individual account, the fixed
account value at any time is equal to:
(a) All premium payments allocated to the fixed account; plus
(b) any variable account value transferred to the fixed account; less
(c) any prior partial withdrawals from the fixed account; less
(d) any fixed account value transferred to the variable account; less
(e) any administrative fee and premium taxes; plus
(f) interest earned.
INTEREST CREDITS. Interest will be credited to the premium payments allocated to
the participant's individual account at rates declared by us. A minimum
guaranteed interest rate is shown on the contract specifications page.
TRANSFERS OF FIXED ACCOUNT VALUE. As to each participant's individual account,
you may transfer fixed account value to one or more investment options of the
variable account subject to the following:
(a) the transfer must be by written authorization before the maturity
date; and
(b) the transfer may not exceed 20% of the fixed account value in any six
month period: and
(c) the number of transfers may not exceed one in any 30 day period.
ACCUMULATION PROVISIONS
PAYMENT OF PREMIUMS. As to each participant's individual account, the initial
premium must be paid to place this contract in force and establish a
participant's individual account pursuant to the plan. The due date of the first
premium is the contract date or effective date of establishment of a
participant's individual account. After the initial premium is paid, premiums
may be paid at any time while this contract is in force and the annuitant is
living. We reserve the right to refuse any premium payment. All premiums after
the initial premium must be paid at our administrative office. We will give
receipt for a premium payment upon written request.
CONTRACT VALUE. As to each participant's individual account, this is the total
of the participant's individual account values held under the contract in each
investment option of the variable account plus the fixed account value. The
value of the participant's individual account will depend on the value of the
accumulation units in each investment option of the variable account plus the
fixed account value.
<PAGE>
Variable Policy
Page 8 of 17
WITHDRAWALS: Prior to the earlier of the maturity date or the death of the
annuitant as to each participant's individual account, the contract owner may
withdraw all or a portion of the participant's individual account value upon
written request complete with all necessary information to our administrative
office. In the case of a total withdrawal, we will pay the participant's
individual account value as of the date of receipt of the request at our
administrative office, less any annual administrative fee, or any applicable
withdrawal charge, and the contract will be cancelled. In the case of a partial
withdrawal, we will pay the amount requested and cancel that number of
accumulation units credited to each participant's individual account of the
variable account or reduce the participant's individual account of the fixed
account necessary to equal the amount withdrawn from each participant's
individual account plus any applicable withdrawal charge deducted from such
participant's individual account. There is no withdrawal charge with respect to
FREE WITHDRAWAL AMOUNTS DESCRIBED BELOW (See "Contract Charges"). When making a
partial withdrawal, you should specify the investment options from which the
withdrawal is to be made. The withdrawal should be in an amount of $250 or more.
If a partial withdrawal reduces either the individual participant account or the
contract value to less than $500, we reserve the right to pay the entire
participant's individual account value or contract value. Upon payment of the
entire contract value, we shall have no further liability and the contract must
be returned to us. Partial withdrawals are limited to one in any six month
period.
FREE WITHDRAWAL AMOUNT: After the first contract year, as to each participant's
individual account the contract owner may make a free withdrawal for that year
of up to the greater of:
(a) ten percent of the participant's individual account value (as
determined on the date of the requested withdrawal), or
(b) the participant's individual account value divided by the annuitant's
life expectancy based on IRS annuity regulations, or
(c) the total of any premium payments that have been in the contract more
than six complete contract years.
PROCEEDS APPLIED TO A SETTLEMENT OPTION. All or a part of the participant's
individual account value may be applied to a settlement option. The proceeds
that will be applied to the settlement option will be as follows:
(a) the participant's individual account value, if the settlement option
elected begins at least four years after the effective date of the
establishment of the participant's individual account 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) the participant's individual account value less any withdrawal
charge and any administrative fee.
RESTRICTIONS ON DISTRIBUTIONS. Distributions under the contract including any
withdrawals and payment of contract value, shall not begin prior to the date the
participant:
(a) attains age 59 1/2; or
(b) separates from service of the participant's employer; or
(c) dies or becomes disabled; or
<PAGE>
Variable Policy
Page 9 of 17
(d) suffers a financial hardship as defined in the Internal Revenue
Service regulations.
In the event of a distribution based on financial hardship, such distribution
shall consist solely of contributions to the contract pursuant to a salary
reduction agreement between the participant and you. Such distribution shall not
include any income resulting from such contributions.
These restrictions do not apply to any contract value existing under the
contract as of December 31, 1988.
DEATH OF THE ANNUITANT. As to each participant's individual account, if the
annuitant dies prior to the maturity date, the death benefit will be defined as
follows:
If the annuitant dies at age 75 or younger, the death benefit during the first
seven contract years will be equal to the greater of:
(a) the participant's individual account value on the date due proof of
death is received at our administrative office, or
(b) the sum of all premiums paid, less any partial withdrawals.
During any subsequent seven contract year period, the death benefit will
be the greater of:
(a) the participant's individual account value on the date due proof of
death is received at our administrative office, or
(b) the participant's individual account value on the last day of the
previous seven contract year period plus any premium payments made
and less any partial withdrawals since then, or
(c) the sum of all premiums paid, less any partial withdrawals.
If the annuitant dies after age 75, the death benefit will be equal to the
participant's individual account value.
Generally, payment must be made by December 31 of the year containing the fifth
anniversary of the date of the annuitant's death; or if any portion of the
contract is to be distributed under any of the settlement options to a
beneficiary named in the contract, then distribution must begin by December 31
of the year following the year of the annuitant's death. In such case, the
method of distribution must provide for payment over the life of the beneficiary
or over a period not greater than the life expectancy of the beneficiary.
Any benefit due at the death of the annuitant will be paid to the beneficiary,
unless otherwise provided. If the beneficiary is the spouse of the annuitant and
the annuitant dies prior to the maturity date, the spouse may continue the
contract in force as the owner. 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.
If the annuitant dies on or after the maturity date and payments are being made
under a settlement option, remaining distributions will be made as described in
SETTLEMENT PROVISIONS or over a period at least as rapidly as under the method
of distribution being used as of the date of death.
<PAGE>
Variable Policy
Page 10 of 17
SETTLEMENT PROVISIONS
MATURITY DATE: Monthly income payments start on the maturity date. As to each
participant's individual account, the owner may change the maturity date. The
change requires written notice from the owner to us 30 days before the maturity
date. Monthly income payments which begin on the maturity date will be
determined as specified below.
ELECTION OF OPTION. As to each participant's individual account the owner may
elect an option by a written request in a form acceptable to us before the
proceeds become payable. The beneficiary may elect an option upon the death of
the annuitant. A change shall not take effect until recorded at our
administrative office. When so recorded, the change shall take effect on the
date of receipt of the request. We are not liable for a payment made or action
taken before the request is recorded. If the payee is not a natural person, any
option elected must be approved by us.
OPTIONS. All or any part of the contract proceeds may be applied under one or a
combination of the following options. The proceeds may also be paid in any other
way agreed to by us, subject to the minimum distribution requirements set forth
by the Internal Revenue Code including the incidental death benefit and minimum
distribution incidental benefit requirements.
Option 1 - Lifetime Only Annuity. We will make monthly payments during the life
of the payee. If this option is elected, it is understood and agreed that
payments shall cease immediately upon the death of the payee and the annuity
will terminate without further value.
Option 2 - Lifetime Annuity with Guaranteed Period. We will make monthly
payments for the guaranteed period selected and thereafter for the life of the
payee. If this option is elected, it is understood and agreed that upon the
death of the payee, any amounts remaining under the guaranteed period selected
will be distributed to the beneficiary at least as rapidly as under the method
of distribution being used as of the date of the payee's death.
Option 3 - Installment Refund Life Annuity. We will make monthly payments for
the installment refund period (the time required for the sum of the payments to
equal the amount applied), and thereafter for the life of the payee. If this
option is elected, it is understood and agreed that upon the death of the payee,
any amounts remaining under the installment refund period will be distributed to
the beneficiary at least as rapidly as under the method of distribution being
used as of the date of the payee's death.
Option 4 - Fixed Period Annuity. We will make monthly payments for a fixed
period of three to 20 years.
Option 5 - Fixed Amount Annuity. We will make monthly payments for a minimum of
three years and a maximum of 20 years in an amount elected until the amount
applied, together with interest, is exhausted.
The option used will be as elected by the owner. If no option has been elected,
the contract value will be paid under Option 2 as life income with ten years
certain.
ALLOCATION OF PROCEEDS. At the time election of one of the settlement options is
made, the proceeds may be applied to provide: a variable annuity; a fixed
annuity; or a combination of both. If no election is made to the contrary, that
portion of the amount due from the variable account shall be applied to provide
a variable annuity. The portion of the amount due from the fixed account shall
be applied to a fixed annuity.
<PAGE>
Variable Policy
Page 11 of 17
FIXED ANNUITY. This is an annuity providing for payments, each of which remain
the same throughout the annuity payment period. Fixed annuity payments are
guaranteed by us as to their amount. They are not based upon the investment
experience of the variable account.
VARIABLE ANNUITY. This is an annuity providing for payments which vary in amount
throughout the annuity payment period. The amounts are based on the net
investment experience of the investment options of the variable account. After
the first monthly payment for a variable annuity has been computed, a number of
variable account annuity units is computed by dividing that first monthly
payment by the investment option's annuity unit value at the start date of the
annuity payments. Once variable annuity payments have begun, the number of the
annuity units remains fixed unless the payee makes a written request for a
change of variable annuity investment options complete with all necessary
information to our administrative office. Such a change shall not take effect
until recorded at our administrative office. We will transfer the investment
option as of the date of receipt of the request at our administrative office. We
are not liable for a payment made or action taken before the request is
recorded. Any change requested must be at least six months after a prior
selection. The payee's request must specify that percentage of the annuity
payment that is to be based on the investment performance of each investment
option of the variable account. No transfers may be made from a fixed annuity
option to a variable annuity option or from a variable annuity option to a fixed
annuity option. In addition, we reserve the right to modify, terminate, or defer
the transfer privilege at any time.
The annuity unit value for each investment option of the variable account is
computed by multiplying the value of that investment option annuity unit value
for the preceding period by the net investment factor of that investment option
for the valuation period and then dividing this result by the valuation period
equivalent of the assumed interest rate. The assumed interest rate must be
selected prior to the first annuity payment and can be three percent or five
percent. The annuity unit value is equal to the investment option accumulation
unit value on the date of the first annuity payment.
The dollar amount of variable annuity payments after the first is not fixed and
may change from month to month. The amount of each variable annuity payment
after the first is computed by multiplying the number of investment option
annuity units by the investment option annuity unit value for the valuation
period in which the payment is due.
Any variation in the actual mortality experience of payees from the mortality
assumption used to compute the first monthly payment will not affect the dollar
amount of variable annuity payments.
CONTRACT AND PAYMENTS. Return the contract and a supplemental contract which
states the terms of settlement under the option elected will be issued to the
payee. We will require satisfactory proof of the age of each payee under options
1, 2 and 3.
If any payment to a payee is less than $50, we may change the payment to a less
frequent basis. Unless the right is given in the election option, no payee shall
have the right to assign, commit or encumber any of the payments.
We reserve the right:
(1) to make all payments by check which will require the personal
endorsement of the payee; and
(2) to require satisfactory proof of the death or of the continued life
of any person whose death or continued life affects any payment
under this contract.
<PAGE>
Variable Policy
Page 12 of 17
MONTHLY INCOME. The amount of monthly income to be paid under this contract will
depend on the participant's individual account value on the date, the investment
options used, and the settlement option elected. The amount of monthly income
factors are shown on the Settlement Option Tables. If excess interest is paid or
credited by us on fixed annuity options, these monthly income factors could be
greater.
INTEREST AND MORTALITY TABLE. The rate of interest guaranteed under the fixed
annuity settlement options is three percent per year. The settlement option
rates are based on the 1983 Individual Annuity Mortality Table.
COMMENCEMENT OF DISTRIBUTIONS. As to each participant's individual account with
respect to its values accruing under this contract on or after January 1, 1987,
the distributions must be no later than April 1 following the close of the
calendar year in which the participant attains age 70 1/2. In the event this
contract is issued after April 1 following the close of the calendar year in
which the participant attains age 7O 1/2 due to a transfer of the participant
interest in another ss.403(b)(1) annuity or a ss.403(b)(7) custodial account,
the commencement date must be no later than December 31 of the calendar year in
which the transfer occurs. However, if the participant attains age 70 1/2 prior
to January 1, 1988 or if the contract is a governmental or church plan, the
commencement date may be deferred until no later than April 1 following the
calendar year in which the participant retires.
CONTRACT CHARGES
WITHDRAWAL CHARGE: If a withdrawal is made from the contract before the maturity
date, a withdrawal charge may be assessed against the premium payments that have
been made in the contract less than six contract years. There is never a charge
with respect to free withdrawal amounts described below or premium payments that
have been in the contract more than six contract years. The length of time from
receipt of a premium payment to the time of withdrawal determines the withdrawal
charge. For this purpose, premium payments will be deemed to be withdrawn in the
order in which they are received and all withdrawal amounts will be first from
premium payments and then from other contract values. The withdrawal charge is a
percentage of the withdrawal amount as shown on the contract specifications
page.
FREE WITHDRAWAL AMOUNT: After the first contract year, as to each participant's
individual account the contract owner may make a free withdrawal for that year
of up to the greater of:
(a) ten percent of the participant's individual account value (as
determined on the date of the requested withdrawal), or
(b) the participant's individual account value divided by the annuitant's
life expectancy based on IRS annuity regulations, or
(c) the total of any premium payments that have been in the contract more
than six complete contract years.
ADMINISTRATIVE FEES. Prior to the maturity date, an annual administrative fee as
shown on the contract specifications page may be deducted on each contract
anniversary, on the date this contract is fully surrendered or the date the
participant's individual account value is applied to a settlement option. The
deduction will be made from amounts accumulated in the fixed account, if
available; otherwise from the variable account investment options.
<PAGE>
Variable Policy
Page 13 of 17
A daily charge in the amount equal on an annual basis as shown on the
contract specifications page is also deducted from the variable account
investment options to reimburse us for administrative expenses of the contracts
and operations of the variable account and the company in connection with the
contract. 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 investment option of the variable
account (see "Variable Account Annual Expenses"). We guarantee that these
administrative fees will not increase.
VARIABLE ACCOUNT ANNUAL EXPENSES. Each valuation period, we deduct from each
investment option of the variable account an amount equal to: (a) multiplied by
(b) where:
(a) is the net asset value of the investment option; and
(b) is equal to the valuation period equivalent of the mortality and
expense risk charge and administration charge shown on the contract
specifications page.
These charges are taken into account in determining the value of the
participant's individual account accumulation units. These asset based variable
account annual expenses will not be deducted from the fixed account. We
guarantee that these variable account annual expenses will not increase.
PREMIUM TAXES. Any premium or other taxes levied by any governmental entity with
respect to this contract will be deducted from the participant's premiums or
individual account value when incurred, or at our option, at a later date.
OTHER PROVISIONS
THIS CONTRACT. The consideration for issuing this contract is the application
and payment of the initial premium. The application, contract and any
endorsement or rider attached are the entire contract. Statements in the
application are considered representations rather than warranties, except in the
case of fraud.
We may change any of the terms of this contract. Any change must be made in
writing and with your consent, unless provided otherwise by this contract. No
such change may affect the amount or terms of any annuity effected prior to the
effective date of such change.
To assure that the contract will maintain its status as a variable annuity, we
reserve the right to change this contract to comply with future changes in any
federal or state statute, rule, or regulation. You will be sent a copy of any
such amendment as well as a copy of the regulatory change requiring the
amendment.
We reserve the right, subject to compliance with the law as currently applicable
or subsequently changed to operate the variable account in any form permitted
under the Investment Company Act of 1940 ("1940 Act") or in any other form
permitted by law; to take any action necessary to comply with or obtain and
continue any exemptions from the 1940 Act or to comply with any other applicable
law; to transfer any assets in any sub-account to another sub-account, or to the
fixed account; or to add, combine or remove sub-accounts in the variable
account; and to change the way we assess charges, so long as we do not increase
the aggregate amount beyond that currently charged to the variable account and
the eligible portfolios in connection with this contract. If the shares of any
of the eligible portfolios should become unavailable for investment by the
variable account or if in our judgement further
<PAGE>
Variable Policy
Page 14 of 17
investment in such portfolio shares should become inappropriate in view of the
purpose of the contract, we may add or substitute shares of another mutual fund
for eligible portfolio shares already purchased under the contact. No
substitution of portfolio shares in any sub-account may take place without prior
approval of the Securities and Exchange Commission and notice to you, to the
extent required by the 1940 Act.
We reserve the right to postpone any type of payment from the variable account
for any period when: the New York Stock Exchange is closed other than customary
weekend and holiday closings; trading on that Exchange is restricted; an
emergency exists as a result of which it is not reasonably practicable to
dispose of securities held in the variable account or determine their value; or
the Securities and Exchange Commission shall permit delay for the protection of
security holders. The applicable rules of the Securities and Exchange Commission
shall govern as to whether the above conditions exist. We reserve the right to
postpone withdrawal payments from our fixed account for up to six months.
INCONTESTABILITY. This contract will be incontestable after the contract date.
NO DIVIDENDS. This contract will not pay dividends. It will not share in any
surplus or earnings of the Company.
MISSTATEMENT OF AGE. If the age of the annuitant has been misstated, the amount
of the annuity payable will be corrected to the amount which the premium paid
would have purchased for the correct age.
If the misstatement of age is discovered after the monthly income payments have
started:
(1) any overpayment by us, with compound interest at no more than 6% per
year, shall be deducted from the first income payments due after
correction; and
(2) any underpayment by us, with compound interest at 6% per year, shall
be paid by us.
REPORTS. We will send you a report that shows the contract value at least once
in each contract year. We will send any other reports that may be required by
law.
OWNERSHIP OF CONTRACT. You are the owner of this contract. Such owner may
exercise all rights granted by this contract without the consent of any
revocable beneficiary.
INDIVIDUAL CERTIFICATES. We shall issue a certificate to the contract owner for
delivery to each participant. Each certificate shall set forth in substance the
benefits which the participant is entitled under this contract. Certificates
shall not constitute a part of this contract.
CONVERSION TO INDIVIDUAL CONTRACT. Upon termination of participation in the
plan, the participant who is entitled to a benefit in accordance with the terms
of the plan may elect, if you so request, to convert to an individual annuity
contract. The individual annuity contract will be of the form then currently
issued by us.
CONTRACT OWNER INFORMATION. You shall furnish all information which we may
reasonably require for the administration of this contract. If you cannot
furnish any required item of information, we may request the person concerned
furnish such information. We shall not be liable for any actions taken or
required in any way dependent on such information until we receive such
information.
<PAGE>
Variable Policy
Page 15 of 17
BENEFICIARY. The beneficiary will receive any proceeds that are due when the
annuitant dies. The beneficiary is as named in the application unless changed as
provided in the contract. Unless otherwise shown:
(1) all beneficiaries may be changed; and
(2) a primary beneficiary takes all proceeds if living when the
annuitant dies; and
(3) a contingent beneficiary takes all proceeds only if living when the
annuitant dies and if all primary beneficiaries are dead; and
(4) if no beneficiary is living when the annuitant dies, the proceeds
will be paid to the annuitant's estate; and
(5) when more than one beneficiary is to share the funds, proceeds will
be paid in equal shares.
At the time of payment, we may rely on the affidavit of other responsible
persons concerning identity, existence, relationship and other facts concerning
named beneficiaries.
To the extent permitted by law, no payment of proceeds or interest shall be
subject to the claims of creditors of a beneficiary.
CHANGE OF BENEFICIARY. While the annuitant is living, a change of beneficiary
may be made by filing a written request in a form acceptable to us. Any
irrevocable beneficiary must consent in writing to a change. A change shall not
take effect until recorded at our administrative office. When so recorded, the
change shall take effect on the date of receipt of the written request. We are
not liable for a payment made or action taken before the request is recorded.
An annuitant may satisfy the minimum distribution requirements under Section
403(b)(10) of the Code by receiving distribution from one TSA that is equal to
the amount required to satisfy the minimum distribution requirements for two or
more TSA's.
<PAGE>
Variable Policy
Page 16 of 17
GREAT AMERICAN RESERVE INSURANCE COMPANY
FIXED ANNUITY SETTLEMENT OPTION TABLE
The following tables show the monthly income payable for each $1,000
applied under Option 1, 2, 3, 4, or 5.
[Table to be inserted by Document Services]
<PAGE>
Variable Policy
Page 17 of 17
GREAT AMERICAN RESERVE INSURANCE COMPANY
11815 N. Pennsylvania Street, Carmel, Indiana 46032-4572
Telephone: (317) 571-3700
A Stock Company
INDEX
DEFINITIONS CONTRACT CHARGES
INTRODUCTION TO THE INVESTMENT OPTIONS OTHER PROVISIONS
THE VARIABLE ACCOUNT SETTLEMENT OPTION TABLE
THE FIXED ACCOUNT ADDITIONAL BENEFITS
ACCUMULATION PROVISIONS APPLICATION attached
SETTLEMENT PROVISIONS
GROUP FLEXIBLE PREMIUM VARIABLE DEFERRED ANNUITY
MONTHLY INCOME AT MATURITY
DEATH BENEFIT PRIOR TO MATURITY DATE
FLEXIBLE PREMIUM PAYMENT
NON PARTICIPATING
GREAT AMERICAN RESERVE INSURANCE COMPANY
ADMINISTRATIVE OFFICE: 11815 N. PENNSYLVANIA STREET, P O BOX 1909,
CARMEL, INDIANA 46032-4909
[ ] FOR GROUP APPLICANTS ONLY: APPLICATION IS HEREBY MADE TO THE GARCO GROUP
BENEFITS INSURANCE TRUST.
VARIABLE ANNUITY
APPLICATION
- --------------------------------------------------------------------------------
1. ANNUITANT (OWNER IF NO OTHER SPECIFIED IN SECTION 3)
- --------------------------------------------------------------------------------
Name first mi last DOB [ ] Age [ ]
Street Address Sex [ ] Marital Status [ ]
City State Zip SS# - -
Home Phone # ( ) Work Phone # ( )
- --------------------------------------------------------------------------------
2. EMPLOYMENT GROUP INFORMATION (REQUIRED ONLY FOR GROUP APPLICANTS)
- --------------------------------------------------------------------------------
Specify the nature of the industry in which you are (or were at retirement)
employed:
[ ] A. Education, Government Employees, Service Industry
[ ] B. Wholesale Trade Industry
[ ] C. Retail Trade Industry
[ ] D. Agriculture
[ ] E. Finance, Insurance, Real Estate Industry
[ ] F. Transportation, Communication, Public Utilities
[ ] G. Manufacturing, Contract Construction Industry
- --------------------------------------------------------------------------------
3. CONTRACT/CERTIFICATE OWNER(S) (COMPLETE IF DIFFERENT FROM ANNUITANT IN
SECTION 1 - MUST BE THE SAME FOR 403(B), IRA, IRA/SEP. USE SECTION 8 FOR
ADDITIONAL SPACE. ANY JOINT OWNER MUST BE THE SPOUSE OF THE OTHER OWNER. WE
MUST HAVE THE SOCIAL SECURITY NUMBER AND ALL OTHER INFORMATION FOR EACH
OWNER.)
- --------------------------------------------------------------------------------
Name(s) first mi last DOB [ ] Age [ ]
Street Address Sex [ ] Marital Status [ ]
City State Zip SS# - -
Home Phone # ( ) Work Phone # ( )
- --------------------------------------------------------------------------------
4. BENEFICIARY(UPON DEATH OF A JOINT OWNER, THE SURVIVING JOINT OWNER WILL BE
TREATED AS THE PRIMARY BENEFICIARY.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Primary [ ] Relationship [ ]
Contingent [ ] Relationship [ ]
- --------------------------------------------------------------------------------
5. TYPE OF PLAN (PLEASE CHECK APPROPRIATE BOXES)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
[ ] Nonqualified [ ] Qualified [ ] 403 (B) [ ] IRA/SEP [ ] ORP [ ] 457 [ ] SIMPLE IRA (Attach Form [ ] ROTH IRA
5304)
- --------------------------------------------------------------------------------
6. PRODUCT SELECTION
- --------------------------------------------------------------------------------
[ ] Monument [ ] Achievement [ ] Educator [ ] Maxiflex [ ] Group [ ] Conseco Advantage
Maxiflex
</TABLE>
- --------------------------------------------------------------------------------
7. PORTFOLIO SELECTION
- --------------------------------------------------------------------------------
Portfolio selections are made on the attached "Variable Annuity Application
Supplement For Portfolio Selection" dated:
- --------------------------------------------------------------------------------
8. SPECIAL REQUESTS (INCLUDE ADDITIONAL INFORMATION FOR ANY ANSWERS TO
APPLICATION QUESTIONS.)
- --------------------------------------------------------------------------------
22-8075 Rev. 0598
<PAGE>
- --------------------------------------------------------------------------------
9. TELEPHONE TRANSFER
- --------------------------------------------------------------------------------
I hereby authorize and direct Great American Reserve Insurance Company (GARCO)
to act on telephone instructions, when proper identification is furnished, to
exchange units form any fixed, Market Value Adjustment (MVA) or sub-account to
any other fixed, MVA or other sub-account and/or to change the allocation of
future deposits. The undersigned agrees that GARCO is not liable for any loss
arising from any exchange or change in allocation of future deposits by acting
in accordance with these telephone instructions. GARCO will employ reasonable
procedures to confirm that telephone instructions are genuine. If it does not,
it may be liable for any losses due to unauthorized or fraudulent transfers.
Please refer to the Prospectus for restrictions regarding the MVA accounts.
Initials of contract owner: [ ]
- --------------------------------------------------------------------------------
10. INVESTMENT AMOUNT, REPLACEMENT INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
a. Initial investment: [$ ] b. Periodic investment: [ ] beginning: [ ]
c. Will the proposed contract replace any existing annuity or insurance contract? [ ] Yes [ ] No
If Yes, list company name, plan and year of issue [ ]
d. Is this a transfer or rollover? [ ] No [ ] Yes - Check one: [ ] 90-24 [ ] 102-318
(ADDITIONAL FORMS REQUIRED)
</TABLE>
- --------------------------------------------------------------------------------
11. BILLING INFORMATION (NOT APPLICABLE TO IRA OR IRA/SEP CONTRACTS.)
- --------------------------------------------------------------------------------
a. Bill to the: [ ] Annuitant [ ] Owner [ ] See Section 8 or Section 11b.
b. Billing Address:
c. Billing Frequency: [ ] Annual [ ] Quarterly [ ] Monthly [ ] Semi-Monthly
d. Non-Paying Months (X): [J] [F] [M] [A] [M] [J] [J] [A] [S] [O] [N] [D]
================================================================================
All statements made in this application (including the reverse side) are true to
the best of our knowledge and belief, and we agree to all terms and conditions
as shown on the front and back. We further agree that this application shall be
a part of the annuity contract, and verify our understanding that ALL PAYMENTS
AND VALUES PROVIDED BY THE CONTRACT, WHEN BASED ON INVESTMENT EXPERIENCE OF THE
VARIABLE ACCOUNT, ARE VARIABLE AND NOT GUARANTEED AS TO DOLLAR AMOUNT. We
acknowledge receipt of current prospectuses. The variable annuity applied for is
not unsuitable for my investment objective, financial situation and needs. Under
penalty of perjury, the contract owner(s) certifies that the Social Security (or
Taxpayer Identification) number is correct as it appears in this application.
Signed at ___________________________ this ______________ day of __________ , 19
X
Signature of Owner/Applicant (if other than Annuitant)
Signature of Annuitant
Amounts payable under the contract may be subject to a market value
adjustment if withdrawals or transfers are made prior to a date specified in
the contract.
Signature of Joint Owner/Applicant (if other than Annuitant)
- --------------------------------------------------------------------------------
AGENT'S REPORT
- --------------------------------------------------------------------------------
Will the proposed contract replace any existing annuity or insurance contract?
[ ] No [ ] Yes - replacement
requirements must be completed. Agent's initials certifying any replacement
requirements has been met:
- --------------------------------------------------------------------------------
REGISTERED REPRESENTATIVE CERTIFICATION
- --------------------------------------------------------------------------------
I certify that I have asked all the questions in the application and correctly
recorded the proposed Annuitant's answers. To the best of my knowledge I have
presented to the Company all the pertinent facts, and I know nothing unfavorable
about the proposed Annuitant that is not stated in the application.
I further certify that I am properly licensed to sell variable annuities in the
state in which the proposed Annuitant resides and that no sales material other
than that furnished by the Home Office was used.
Signed at ___________________________ this ______________ day of __________ , 19
[ ] Agent's Number [ ] Trail [ ] Registered Representative
22-8075 Rev. 0598
<PAGE>
