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. 9 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 9 [X]
CONSECO VARIABLE ANNUITY ACCOUNT E
(Exact Name of Registrant)
CONSECO VARIABLE INSURANCE COMPANY
(Name of Depositor)
11815 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
Conseco Variable Insurance Company
11815 N. Pennsylvania Street
Carmel, Indiana 46032-4572
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[X] on May 1, 2000 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
CONSECO 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
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1. Cover Page................................... Cover Page
2. Definitions.................................. Definitions
3. Synopsis or Highlights....................... Summary
4. Condensed Financial Information.............. Appendix A -Condensed Financial Information
5. General Description of Registrant,........... Conseco Variable, The Variable Account, and
Depositor and Portfolio Companies Investment Options; Appendix B
6. Deductions and Expense....................... Charges and Deductions
7. General Description of Variable.............. The Contracts
Annuity Contracts
8. Annuity Period .............................. Annuity Phase
Settlement Provisions
9. Death Benefit................................ Death Benefit on or
After Maturity Date
10. Purchase and Contract Values................. Conseco Variable, The Variable
Account, and Investment Options;
Accumulation Provisions
11. Redemptions.................................. The Contracts
Section B. Settlement Provisions
12. Taxes........................................ Federal Tax Status
13. Legal Proceedings............................ Legal Proceedings
14. Table of Contents of the Statement........... Table of Contents of the Statement
of Additional Information of Additional Information
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Form N-4
Item No.
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PART B - Statement of Additional Information
-----------------------------------
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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............................. Annuity Provisions
23. Financial Statements......................... Financial Statements
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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.
PART A
CONSECO VARIABLE ANNUITY ACCOUNT E
INDIVIDUAL & GROUP VARIABLE DEFERRED ANNUITY CONTRACTS
OFFERED BY
CONSECO VARIABLE INSURANCE COMPANY
ADMINISTRATIVE OFFICE: 11815 N. PENNSYLVANIA STREET o CARMEL, IN 46032
o (317) 817-3700
This prospectus describes the individual and group flexible premium
variable deferred annuity contracts (Contracts) issued by Conseco Variable
Insurance Company (Conseco Variable). The Contracts are designed for use in
retirement planning. The Contracts provide a way for you to invest on a
tax-deferred basis in the subaccounts of the Conseco Variable Annuity Account
E (Separate Account) and the Fixed Account.
You can invest your Premium in one of the Variable Account Investment
Options listed below. Depending on market conditions, you can make or lose
money in any of these Variable Account Investment Options. Currently, you
can allocate Premium Payments to up to 15 Variable Account Investment
Options at any one time. You can also invest in the Fixed Account of Conseco
Variable. Money you direct into the Fixed Account earns interest at a rate
guaranteed by Conseco Variable.
CONSECO SERIES TRUST
* Conseco 20 Focus Portfolio
* Equity Portfolio
* Balanced Portfolio
* High Yield Portfolio
* Fixed Income Portfolio
* Government Securities Portfolio
* Money Market Portfolio
THE ALGER AMERICAN FUND
* Alger American Growth Portfolio
* Alger American Leveraged AllCap Portfolio
* Alger American MidCap Growth Portfolio
* Alger American Small Capitalization Portfolio
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
* VP Income & Growth
* VP International
* VP Value
BERGER INSTITUTIONAL PRODUCTS TRUST
* Berger IPT Growth Fund (formerly, Berger IPT-100 Fund)
* Berger IPT Growth and Income Fund
* Berger IPT Small Company Growth Fund
* Berger IPT New Generation Fund
* Berger/BIAM IPT International Fund
THE DREYFUS SOCIALLY RESPONSIBLE
GROWTH FUND, INC.
DREYFUS STOCK INDEX FUND
DREYFUS VARIABLE INVESTMENT FUND ("Dreyfus VIF")
* Dreyfus VIF Disciplined Stock Portfolio
* Dreyfus VIF International Value Portfolio
FEDERATED INSURANCE SERIES
* Federated High Income Bond Fund II
* Federated International Equity Fund II
* Federated Utility Fund II
INVESCO Variable Investment Funds, Inc. (not available for new sales as of
May 1, 2000)
* INVESCO VIF High Yield Fund
* INVESCO VIF Equity Income Fund
JANUS ASPEN SERIES
* Aggressive Growth Portfolio
* Growth Portfolio
* Worldwide Growth Portfolio
LAZARD RETIREMENT SERIES, INC.
* Lazard Retirement Equity Portfolio
* Lazard Retirement Small Cap Portfolio
LORD ABBETT SERIES FUND, INC.
* Growth & Income Portfolio
MITCHELL HUTCHINS SERIES TRUST
* Growth and Income Portfolio
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
* Limited Maturity Bond Portfolio
* Partners Portfolio
RYDEX VARIABLE TRUST
* OTC Fund
* Nova Fund
SELIGMAN PORTFOLIOS, INC.
* Seligman Communications and Information Portfolio
* Seligman Global Technology Portfolio
STRONG OPPORTUNITY FUND II, INC.
* Opportunity Fund II
STRONG VARIABLE INSURANCE FUNDS, INC.
* Strong Mid Cap Growth Fund II
VAN ECK WORLDWIDE INSURANCE TRUST
* Worldwide Bond Fund
* Worldwide Emerging Markets Fund
* Worldwide Hard Assets Fund
* Worldwide Real Estate Fund
Please read this prospectus carefully before investing and keep it on file
for future reference. It contains important information about the individual and
group fixed and variable annuity contracts issued by Conseco Variable.
To learn more about the Contract, you can obtain a copy of the Statement of
Additional Information (SAI) dated May 1, 2000. The SAI has been filed with the
Securities and Exchange Commission (SEC) and is legally a part of this
Prospectus. The SEC has a Web site (http://www.sec.gov) that contains the SAI,
material incorporated by reference, and other information regarding companies
that file electronically with the SEC. The Table of Contents of the SAI is on
Page of this prospectus. For a free copy of the SAI, call us or write to us at
the address or telephone number given on the first page of this Prospectus.
================================================================================
The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
May 1, 2000
THE CONTRACTS:
o are not bank deposits
o are not federally insured
o are not endorsed by any bank or government agency
o are not guaranteed and may be subject to loss of principal
TABLE OF CONTENTS PAGE
DEFINITIONS.................................................................
SUMMARY.....................................................................
FEE TABLE...................................................................
CONSECO VARIABLE, THE VARIABLE ACCOUNT AND INVESTMENT OPTIONS...............
Conseco Variable..........................................................
The Variable Account......................................................
Investment Options........................................................
Voting Rights.............................................................
Fixed Account.............................................................
THE CONTRACTS...............................................................
Accumulation Provisions...................................................
Purchase Payments.........................................................
Allocation of Purchase Payments...........................................
Accumulation Units........................................................
Transfers.................................................................
Dollar Cost Averaging.....................................................
Rebalancing...............................................................
Sweeps....................................................................
Withdrawals...............................................................
Suspension of Payments....................................................
Restrictions Under Optional Retirement Programs...........................
Restrictions Under Section 403(b).........................................
Systematic Withdrawal Plan................................................
Loans.....................................................................
CHARGES AND DEDUCTIONS......................................................
Withdrawal Charge.........................................................
Administrative Charges....................................................
Mortality and Expense Risk Charge.........................................
Reduction or Elimination of Contract Charges..............................
Premium Taxes.............................................................
Fund Expenses.............................................................
Other Charges.............................................................
DEATH BENEFIT BEFORE MATURITY DATE..........................................
OPTIONS WHEN YOU TERMINATE YOUR PARTICIPATION IN THE PLAN
(FOR GROUP CONTRACTS ONLY)...............................................
THE ANNUITY PHASE - SETTLEMENT PROVISIONS...................................
Annuity Options...........................................................
Transfers After Maturity Date.............................................
Death On or After Maturity Date...........................................
OTHER CONTRACT PROVISIONS...................................................
Ten-Day Right to Review...................................................
Ownership.................................................................
Modification..............................................................
FEDERAL TAX STATUS..........................................................
Annuity Contracts in General..............................................
Qualified and Non-Qualified Contracts.....................................
Withdrawals--Non-Qualified Contracts......................................
Withdrawals--Qualified Contracts..........................................
Withdrawals--Tax-Sheltered Annuities......................................
Diversification...........................................................
Investor Control..........................................................
GENERAL MATTERS.............................................................
Performance Information...................................................
Distribution of Contracts.................................................
Legal Proceedings.........................................................
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION................
APPENDIX A - Condensed Financial Information................................
APPENDIX B - More Information About the Funds...............................
DEFINITIONS
ACCUMULATION UNIT: An accounting unit of measure we use to calculate the
Variable Account value of your Contract before the Maturity Date.
ANNUITANT: The person upon whose life the Contract is issued.
ANNUITY PAYMENTS: A series of income payments under an annuity option.
CONTRACT OWNER: The person(s) (including Co-Owners) or entity entitled to
ownership rights under the Contract. The Contract Owner is also referred to as
"you" in this prospectus.
CONTRACT VALUE: The total value of your Individual Account values held
under the Contract in each Investment Option of the Variable Account plus the
Fixed Account.
CONTRACT YEAR: A period of 12 months beginning with the effective date of
your Contract.
CODE: Internal Revenue Code of 1986, as amended.
FIXED ACCOUNT: The general account of Conseco Variable. You may choose to
allocate Purchase Payments and Contract Value to the Fixed Account. It provides
guaranteed values and periodically adjusted interest rates.
FUND: The underlying mutual funds (or portfolios of a mutual fund) which
the sub-accounts of the Variable Account invest in.
INDIVIDUAL ACCOUNT: The record we establish to represent your interest in
an Investment Option before the Maturity Date.
INVESTMENT OPTIONS: The investment choices available to Contract Owners.
MATURITY DATE: The date on which annuity payments begin.
PURCHASE PAYMENTS OR PREMIUMS: The money you invest in the Contract.
VALUATION PERIOD: The period of time from the end of one business day of
the New York Stock Exchange to the end of the next business day.
VARIABLE ACCOUNT: The separate account we established known as Conseco
Variable Annuity Account E. Prior to May 1, 1999, it was known as Great American
Reserve Variable Annuity Account E. The Variable Account is divided into
sub-accounts.
SUMMARY
THE CONTRACTS: The Contracts described in this prospectus are individual
and group flexible premium variable deferred annuity contracts. The Contracts
provide a way for you to invest on a tax-deferred basis in the sub-accounts
of the Conseco Variable Annuity Account E ("Variable Account") and the Fixed
Account. The Contracts provide for the accumulation of Contract Values and the
payment of annuity benefits on a variable and/or fixed basis. In general, this
Prospectus describes only the variable portion of the Contracts.
RETIREMENT PLANS: The Contracts may be issued pursuant to either
non-qualified retirement plans or plans qualifying for special income tax
treatment under the Code. Examples of the plans qualifying for special tax
treatment are: individual retirement annuities (IRAs), pension and profit
sharing plans, tax-sheltered annuities (TSAs), and state and local government
deferred compensation plans. See "Federal Tax Status."
PURCHASE PAYMENTS: The Contracts permit you to make Purchase Payments on a
flexible basis. This means that you can make payments at any time you like
before the Maturity Date. For TSAs, the minimum initial Purchase Payment and the
amount of each subsequent Purchase Payment is $50 per month. For IRAs, the
minimum initial Purchase Payment is $2,000 and the minimum amount of each
additional Purchase Payment is $50. For non-qualified Contracts, the minimum
initial Purchase Payment is $5,000 and the minimum amount of each additional
Purchase Payment is $2,000 (or $200 each month). If your Purchase Payment is
more than $500,000, it requires our prior approval.
INVESTMENT OPTIONS: You can allocate your Purchase Payment to the Fixed
Account of Conseco Variable or the Variable Account Investment Options.
5
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The portion of your Contract Value allocated to the Variable Account
Investment Options will reflect the investment performance of the Funds you
select.
TRANSFERS: Prior to the Maturity Date, you may make transfers among the
Variable Account Investment Options and from the Variable Account Investment
Options to the Fixed Account without charge. Under certain circumstances, you
may also transfer amounts from the Fixed Account to the Variable Account
Investment Options. You may also make transfers under certain programs we offer
known as the dollar cost averaging program, sweep program, and rebalancing.
After the Maturity Date, you may not make transfers from a variable annuity to a
fixed annuity or from a fixed annuity to a variable annuity.
WITHDRAWALS: You may make withdrawals from your Contract before the earlier
of the Maturity Date or the death of the Annuitant. We may impose a withdrawal
charge and an administrative charge when you make a withdrawal. You may also
make withdrawals pursuant to the systematic withdrawal plan. A withdrawal may be
subject to income taxes and tax penalties. In addition, certain restrictions
apply to withdrawals from TSA Contracts.
LOANS: Under certain circumstances, you may make loans from your Contract.
DEATH BENEFIT: Generally, if the Annuitant or Contract Owner dies before
the Maturity Date, we will pay a death benefit to your beneficiary.
ANNUITY PAYMENTS: We offer a variety of fixed and variable annuity options
which you can select to receive your Annuity Payments. Your Annuity Payments
will begin on the Maturity Date. You can select the Maturity Date, the frequency
of the payments and the annuity option.
TEN-DAY REVIEW: If you cancel the Contract within 10 days after receiving it
(or whatever period is required in your state) we will refund your Purchase
Payment or whatever amount is required in your state.
TAXES: Your earnings are not taxed until you take them out. If you take money
out before the Maturity Date, earnings come out first and are taxed as income.
If you are younger than 59 1/2 when you take money out, you may be charged a 10%
federal tax penalty on the earnings. The Contract provides that if the Annuitant
dies before the Maturity Date, we will pay a death benefit to the beneficiary.
Such payments upon the death of the Annuitant who is not the Contract Owner (as
in the case of certain non-qualified Contracts), do not qualify for the death of
Contract Owner exception to the ten percent distribution penalty unless the
beneficiary is 59 1/2 or one of the other exceptions to the penalty applies.
For TSA Contracts, you can only make withdrawals of amounts attributable to
contributions you made pursuant to a salary reduction agreement (as defined in
the Code) when:
(i) you attain age 59 1/2;
(ii) you separate from service;
(iii) you die;
(iv) if become disabled;
(v) made in the case of hardship; or
(vi) made pursuant to a qualified domestic relations order, if otherwise
permitted.
Withdrawals for hardship are restricted to a portion of the Contract Owner's
Contract Value which represents contributions made by the Contract Owner and
does not include any investment results.
Payments after the Maturity Date are considered partly a return of your
original investment. That part of each payment is not taxable as income. If your
Contract was purchased under a tax-qualified plan, your payments may be fully
taxable.
CHARGES AND DEDUCTIONS:
* Each year Conseco Variable deducts a $30 Annual Administrative Fee from
your Contract (this charge is waived if your Individual Account value is
$25,000 or more).
* Conseco Variable deducts a Mortality and Expense Risk Fee which is equal,
on an annual basis, to 1.25% of the average daily net assets of the
Variable Account. Conseco Variable also deducts an Administrative Charge
which is equal, on an annual basis, to .15% of the average daily net
assets of the Variable Account.
* If you take money out of the Contract, Conseco Variable may assess a
withdrawal charge which ranges from 0% to 9%, depending on how long your
Contract has been outstanding and your age at issue.
* You may be assessed a premium tax charge which generally ranges from
0%-3.5%, depending on the state.
* As with other professionally managed investments, there are also
investment charges which currently range from .26% to 3.23%, on an annual
basis, of the average daily value of the portfolio, depending upon the
Variable Account Investment Option you select.
7
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CONSECO VARIABLE ANNUITY ACCOUNT E FEE TABLE
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CONTRACT OWNER TRANSACTION EXPENSES(a)
Sales Charge Imposed on Purchases..................................... None
Exchange Fee.......................................................... None
Surrender Fee......................................................... None
Withdrawal Charge (as a percentage of purchase payments) (b)
First and Second Year............................................... 9%
Third Year.......................................................... 8%
Fourth Year......................................................... 7%
Fifth Year.......................................................... 5%
Sixth Year.......................................................... 3%
Seventh Year or More................................................ 0%
The above withdrawal charges are reduced by a charge factor for issue ages
above 52.
ANNUAL ADMINISTRATIVE FEE (b) .......................................... $30
VARIABLE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
Mortality and Expense Risk Fees....................................... 1.25%
Administrative Charge................................................. 0.15%
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Total Annual Expenses of the Variable Account (b)....................... 1.40%
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(a) Premium taxes are not shown. We will deduct for any premium tax due when you
make a Purchase Payment or from Individual Account values at the Maturity
Date or at such other time based on our sole discretion. The current range
of premium taxes in jurisdictions in which we make the Contracts available
is from 0% to 3.5%.
(b) Conseco Variable may reduce or eliminate the sales, administrative, or other
expenses with certain Contracts in cases when it expects to incur lower
sales and administrative expenses or perform fewer services (see "Reduction
or Elimination of Contract Charges"). We will waive the Annual
Administrative Fee if your Individual Account value is $25,000 or greater.
8
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ANNUAL FUND EXPENSES
(as a percentage of the average daily net assets of a portfolio)
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TOTAL ANNUAL
OTHER EXPENSES PORTFOLIO
(AFTER EXPENSE EXPENSES
REIMBURSEMENT, (AFTER EXPENSE
IF ANY, REIMBURSEMENT,
MANAGEMENT 12b-1 FOR CERTAIN IF ANY, FOR
FEES FEES PORTFOLIOS) CERTAIN PORTFOLIOS)
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CONSECO SERIES TRUST (1)
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Conseco 20 Focus Portfolio(2)......................... 0.80% - 0.10% 0.90%
Equity Portfolio ..................................... 0.75% -- 0.02% 0.77%
Balanced Portfolio ................................... 0.75% -- 0.00% 0.75%
High Yield Portfolio (2).............................. 0.80% - 0.10% 0.90%
Fixed Income Portfolio................................ 0.60% -- 0.07% 0.67%
Government Securities Portfolio....................... 0.60% -- 0.06% 0.66%
Money Market Portfolio (3)............................ 0.35% -- 0.05% 0.40%
THE ALGER AMERICAN FUND
Alger American Growth Portfolio....................... 0.75% -- 0.04% 0.79%
Alger American Leveraged AllCap Portfolio (4)......... 0.85% -- 0.08% 0.93%
Alger American Mid Cap Growth Portfolio............... 0.80% -- 0.05% 0.85%
Alger American Small Capitalization Portfolio......... 0.85% -- 0.05% 0.90%
AMERICAN CENTURY VARIABLE PORTFOLIOS,
INC.
VP Income & Growth(5)................................. 0.70% -- 0.00% 0.70%
VP International(5)................................... 1.34% -- 0.00% 1.34%
VP Value(5)........................................... 1.00% -- 0.00% 1.00%
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger IPT Growth Fund (6)............................ 0.75% -- 0.25% 1.00%
Berger IPT--Growth and Income Fund (6)................ 0.75% -- 0.25% 1.00%
Berger IPT--Small Company Growth Fund (6)............. 0.85% -- 0.30% 1.15%
Berger IPT -New Generation Fund(6).................... 0.85% - 0.30% 1.15%
Berger/BIAM IPT--International Fund (6)............... 0.90% -- 0.30% 1.20%
THE DREYFUS SOCIALLY RESPONSIBLE 0.75% -- 0.04% 0.79%
GROWTH FUND, INC
DREYFUS STOCK INDEX FUND 0.25% -- 0.01% 0.26%
DREYFUS VARIABLE INVESTMENT FUND
Dreyfus VIF Disciplined Stock Portfolio............... 0.75% -- 0.06% 0.81%
Dreyfus VIF International Value Portfolio............. 1.00% -- 0.35% 1.35%
FEDERATED INSURANCE SERIES
Federated High Income Bond Fund II.................... 0.60% -- 0.19% 0.79%
Federated International Equity Fund II (7)............ 0.54% -- 0.71% 1.25%
Federated Utility Fund II ............................ 0.75% -- 0.19% 0.94%
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF - High Yield Fund (8).................... 0.60% -- 0.47% 1.07%
INVESCO VIF - Equity Income Fund (8)................. 0.75% -- 0.42% 1.17%
JANUS ASPEN SERIES, Institutional Shares
Aggressive Growth Portfolio(9)....................... 0.65% -- 0.02% 0.67%
Growth Portfolio (9)................................. 0.65% -- 0.02% 0.67%
Worldwide Growth Portfolio (9)....................... 0.65% -- 0.05% 0.70%
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Equity Portfolio (10)............... 0.75% 0.25% 0.25% 1.25%
Lazard Retirement Small Cap Portfolio (10)............ 0.75% 0.25% 0.25% 1.25%
LORD ABBETT SERIES FUND, INC.
Growth & Income Portfolio............................ 0.50% -- 0.37% 0.87%
MITCHELL HUTCHINS SERIES TRUST
Growth and Income Portfolio........................... 0.70% -- 0.53% 1.23%
NEUBERGER BERMAN ADVISERS MANAGEMENT
TRUST
Limited Maturity Bond Portfolio....................... 0.65% -- 0.11% 0.76%
Partners Portfolio.................................... 0.80% -- 0.07% 0.87%
RYDEX VARIABLE TRUST
OTC Fund.............................................. 0.75% - 0.80% 1.55%
Nova Fund............................................. 0.75% - 0.80% 1.55%
SELIGMAN PORTFOLIOS, INC.
Seligman Communications and Information
Portfolio (11)...................................... 0.75% 0.25% 0.11% 1.11%
Seligman Global Technology Portfolio (11)............. 1.00% 0.15% 0.40% 1.55%
STRONG OPPORTUNITY FUND II, INC.
Opportunity Fund II................................... 1.00% -- 0.14% 1.14%
STRONG VARIABLE INSURANCE FUNDS, INC
Strong Mid Cap Growth Fund II (12)................... 1.00% -- 0.15% 1.15%
VAN ECK WORLDWIDE INSURANCE TRUST (13)
Worldwide Bond Fund................................... 1.00% -- 0.22% 1.22%
Worldwide Emerging Markets Fund....................... 1.00% -- 0.54% 1.54%
Worldwide Hard Assets Fund............................ 1.00% -- 0.26% 1.26%
Worldwide Real Estate Fund............................ 1.00% -- 2.23% 3.23%
</TABLE>
(1) The Adviser, Conseco Capital Management, Inc., and the Administrator,
Conseco Services, LLC, have contractually agreed to waive a portion
of their fees and/or pay a portion of the Portfolio's expenses through
4/30/01 to ensure that total annual operating expenses do not exceed:
0.90% for Conseco 20 Focus Portfolio; 0.85% for Equity Portfolio; 0.85%
for Balanced Portfolio; 0.90% for High Yield Portfolio; 0.70% for Fixed
Income Portfolio; 0.70% for Government Securities Portfolio and 0.45%
for Money Market Portfolio. The Adviser and Administrator may recover
any money waived under the contract provisions, to the extent that
actual fees and expenses are less than the expense limitation, for a
period of 3 years, after the date of the waiver.
(2) Because these Portfolios have not completed a full fiscal year, other
expenses are estimated.
(3) Conseco Capital Management, Inc., since May 1, 1993, has waived its
management fees in excess of the annual rate set forth above. Absent
such fee waivers, the management fees for the Money Market Portfolio would
be 0.60%.
(4) The Alger American Leveraged AllCap Portfolio's "Other Expenses" includes
.01% of interest expense.
(5) The Fund has a stepped fee schedule. As a result, the fund's management fee
rate generally decreases as the fund's assets increase.
(6) The funds' investment advisers have agreed to waive their advisory fee and
reimburse the funds for additional expenses to the extent that normal
operating expenses in any fiscal year, including the investment advisory
fee but excluding brokerage commissions, interest, taxes and extraordinary
expenses, of each of the Berger IPT-Growth Fund and the Berger IPT-Growth
and Income Fund exceed 1.00%, the normal operating expenses in any fiscal
year of each of the Berger IPT-Small Company Growth Fund and the Berger
IPT-New Generation Fund exceed 1.15%, and the normal operating expenses of
the Berger/BIAM IPT-International Fund exceed 1.20% of the respective
fund's average daily net assets. Absent the waiver and reimbursement, the
other expenses for the Berger IPT-Growth Fund, The Berger IPT-New
Generation Fund Berger IPT-Growth and Income Fund, the Berger IPT-Small
Company Growth Fund and the Berger/BIAM IPT-International Fund would have
been 1.43%, 0.43%, 0.64%, 2.10% and 1.55%, respectively, and their Total
Annual Portfolio Expenses would have been 2.18%, 1.18%, 1.49%, 2.95% and
2.45%, respectively. Expenses shown for the Berger IPT-New Generation Fund
are based on estimates for the Fund's first full year of operations.
(7) Absent a voluntary waiver of the management fee and the voluntary
reimbursement of certain other operating expenses by Federated Global
Investment Management Corp., the Management Fee and Total Annual Portfolio
Expenses for International Equity Fund II would have been 0.75% and 1.46%,
respectively.
(8) The Fund's actual Total Annual Portfolio Expenses were lower than the
figures shown because its custodian fees were reduced under an expense
offset arrangement. The expense information presented in the table has been
restated from the financials to reflect a change in the administrative
services fee.
Certain expenses of the Fund were absorbed voluntarily by INVESCO in order to
ensure that expenses did not exceed 1.05% for the High Yield Fund's average
net assets and 1.15% for the Equity Income Fund's average net assets
pursuant to a commitment between the Fund and INVESCO. This commitment may
be changed at any time following consultation with the board of directors.
Without such absorption, but excluding any expense offset arrangements,
Other Expenses and Total Annual Operating Expenses for the fiscal year
ended December 31, 1999 were 0.48% and 1.08% respectively of the High Yield
Fund's average net assets, and 0.44% and 1.19% respectively of the Equity
Income Fund's average net assets.
(9) Expenses are based upon expenses for the fiscal year ended December 31,
1999, restated to reflect a reduction in the management fee for Growth,
Aggressive Growth and Worldwide Growth Portfolios. All expenses are shown
without the effect of expense offset arrangements.
(10) Effective May 1, 1999, Lazard Asset Management, the Fund's investment
adviser, has voluntarily agreed to reimburse all expenses through December
31, 2000 to the extent total annual portfolio expenses exceed in any fiscal
year 1.25% of the Portfolio's average daily net assets. Absent such an
agreement with the adviser, the total annual portfolio expenses for the
year ended December 31, 1999 would have been 5.63% for the Lazard
Retirement Equity Portfolio and 7.31% for the Lazard Retirement Small Cap
Portfolio.
(11) The amount of the Management Fee and Other Expenses are actual expenses for
the fiscal year ended December 31, 1999. Seligman Communications and
Information Fund and Seligman Global Technology Fund began offering shares
charging 12b-1 fees effective May 1, 2000. J. & W. Seligman & Co.
Incorporated ("Seligman") voluntarily agreed to reimburse expenses of
Seligman Global Technology Portfolio, other than the management fee, which
exceed .40%. Without reimbursement, other expenses and total annual
portfolio expenses would have been .41% and 1.56% respectively, for
Seligman Global Technology Portfolio. There is no assurance that Seligman
will continue this policy in the future.
(12) Strong Capital Management, Inc., the Fund's advisor of the Strong Mid Cap
Growth Fund II is currently absorbing expenses of 0.02%. Without these
absorptions, the expenses would have been 1.17% for the year ended December
31, 1999. The Advisor has no current intention to, but may in the future,
discontinue or modify any waiver of fees or absorption of expenses at its
discretion with appropriate notification to its shareholders.
(13) Van Eck Associates Corporation (the "Adviser") agreed to assume expenses
(excluding interest, foreign taxes and brokerage commissions) exceeding
1.50% of the Worldwide Emerging Markets Fund's average daily net assets for
the period January 1, 1999, to May 12, 1999. For the period May 13, 1999 to
December 31, 1999 the Adviser agreed to assume expenses (excluding
interest, foreign taxes and brokerage commissions) exceeding 1.30% of
average daily net assets. For the Worldwide Real Estate Fund, the Adviser
agreed to assume expenses (excluding interest, foreign taxes and brokerage
commissions) for the period January 2, 1999 to February 28, 1999. The
Adviser also agreed to assume expenses exceeding 1.50% of the Worldwide
Real Estate Fund's average daily net assets for the period March 3, 1999 to
December 31, 1999. The Worldwide Real Estate Fund expenses were also
reduced by a fee arrangement based on cash balances left on deposit with
the custodian and a directed brokerage arrangement where the Fund directs
certain portfolio trades to a broker that, in turn, pays a portion of the
Fund's expenses.
11
<PAGE>
================================================================================
EXAMPLES:
You would pay the following expenses on a $1,000 investment, assuming a
hypothetical 5% annual return on assets, and assuming the entire $1,000 is
invested in the sub-account listed:
EXAMPLE 1 - If you surrender the Contract at the end of the time periods:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONSECO SERIES TRUST
Conseco 20 Focus Portfolio................................................ $110 $147 $174 $276
Equity Portfolio.......................................................... 108 143 167 263
Balanced Portfolio........................................................ 108 143 166 261
High Yield Portfolio...................................................... 110 147 174 276
Fixed Income Portfolio.................................................... 107 140 162 253
Government Securities Portfolio........................................... 107 140 162 252
Money Market Portfolio.................................................... 105 132 148 225
THE ALGER AMERICAN FUND
Alger American Growth Portfolio........................................... 109 144 168 265
Alger American Leveraged AllCap Portfolio................................. 110 148 175 279
Alger American MidCap Growth Portfolio.................................... 109 146 171 271
Alger American Small Capitalization Portfolio............................. 110 147 174 276
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
VP Income and Growth...................................................... 108 141 164 256
VP International.......................................................... 114 160 196 319
VP Value.................................................................. 111 150 179 286
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger IPT Growth Fund.................................................... 111 150 179 286
Berger IPT-Growth and Income Fund......................................... 111 150 179 286
Berger IPT-Small Company Growth Fund...................................... 112 155 186 301
Berger IPT-New Generation Fund............................................ 112 155 186 301
Berger/BIAM IPT International Fund........................................ 113 156 189 306
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC......................... 109 144 168 265
DREYFUS STOCK INDEX FUND.................................................. 103 128 141 210
DREYFUS VARIABLE INVESTMENT FUND, INC.
Dreyfus VIF Disciplined Stock Portfolio................................... 109 144 169 267
Dreyfus VIF International Value Portfolio................................. 114 161 196 320
FEDERATED INSURANCE SERIES
Federated High Income Bond Fund II........................................ 109 144 168 265
Federated International Equity Fund II.................................... 113 158 191 310
Federated Utility Fund II................................................. 110 148 176 280
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF--High Yield Fund............................................... 111 152 182 293
INVESCO VIF--Equity Income Fund............................................ 112 155 187 303
JANUS ASPEN SERIES
Aggressive Growth Portfolio............................................... 107 140 162 253
Growth Portfolio.......................................................... 107 140 162 253
Worldwide Growth Portfolio................................................ 108 141 164 256
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Equity Portfolio........................................ 113 158 191 310
Lazard Retirement Small Cap Portfolio..................................... 113 158 191 310
LORD ABBETT SERIES FUND, INC.
Growth & Income Portfolio ................................................ 109 146 172 273
MITCHELL HUTCHINS SERIES TRUST
Growth and Income Portfolio............................................... 113 157 190 308
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
Limited Maturity Bond Portfolio........................................... 108 143 167 262
Partners Portfolio........................................................ 109 146 172 273
RYDEX VARIABLE TRUST
OTC Fund.................................................................. 116 167 206 339
Nova Fund................................................................. 116 167 206 339
SELIGMAN PORTFOLIOS, INC.
Seligman Communications and Information Portfolio......................... 112 153 184 297
Seligman Global Technology Portfolio...................................... 116 167 206 339
STRONG OPPORTUNITY FUND II, INC.
Opportunity Fund II....................................................... 112 154 186 300
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Mid Cap Growth Fund II ............................................ 112 155 186 301
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Bond Fund....................................................... 113 157 190 307
Worldwide Emerging Markets Fund........................................... 116 166 206 338
Worldwide Hard Assets Fund................................................ 113 158 192 311
Worldwide Real Estate Fund................................................ 133 216 285 484
</TABLE>
12
<PAGE>
CONSECO VARIABLE INSURANCE COMPANY
2000 Account E
INDIVIDUAL AND GROUP ANNUITY
================================================================================
<TABLE>
<CAPTION>
EXAMPLE 2 - If you elect to annuitize your Contract:
================================================================================
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONSECO SERIES TRUST
Conseco 20 Focus Portfolio................................................ $110 $147 $129 $276
Equity Portfolio.......................................................... 108 143 123 263
Balanced Portfolio........................................................ 108 143 122 261
High Yield Portfolio...................................................... 110 147 129 276
Fixed Income Portfolio.................................................... 107 140 118 253
Government Securities Portfolio........................................... 107 140 117 252
Money Market Portfolio.................................................... 105 132 104 225
THE ALGER AMERICAN FUND
Alger American Growth Portfolio........................................... 109 144 124 265
Alger American Leveraged AllCap Portfolio................................. 110 148 131 279
Alger American MidCap Growth Portfolio.................................... 109 146 127 271
Alger American Small Capitalization Portfolio............................. 110 147 129 276
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
VP Income and Growth...................................................... 108 141 119 256
VP International.......................................................... 114 160 151 319
VP Value.................................................................. 111 150 134 286
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger IPT-Growth Fund..................................................... 111 150 134 286
Berger IPT-Growth and Income Fund.......................................... 111 150 134 286
Berger IPT-Small Company Growth Fund....................................... 112 155 142 301
Berger IPT New Generation Fund............................................. 112 155 142 301
Berger/BIAM IPT-International Fund......................................... 113 156 144 306
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC......................... 109 144 124 265
DREYFUS STOCK INDEX FUND.................................................. 103 128 97 210
DREYFUS VARIABLE INVESTMENT FUND, INC.
Dreyfus VIF Disciplined Stock Portfolio................................... 109 144 125 267
Dreyfus VIF International Value Portfolio................................. 114 161 152 320
FEDERATED INSURANCE SERIES
Federated High Income Bond Fund II ....................................... 109 144 124 265
Federated International Equity Fund II.................................... 113 158 147 310
Federated Utility Fund II................................................. 110 148 131 280
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF--High Yield Fund............................................... 111 152 138 293
INVESCO VIF--Equity Income Fund............................................ 112 155 143 303
JANUS ASPEN SERIES
Aggressive Growth Portfolio............................................... 107 140 118 253
Growth Portfolio.......................................................... 107 140 118 253
Worldwide Growth Portfolio................................................ 108 141 119 256
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Equity Portfolio........................................ 113 158 147 310
Lazard Retirement Small Cap Portfolio..................................... 113 158 147 310
LORD ABBETT SERIES FUND, INC.
Growth & Income Portfolio................................................. 109 146 128 273
MITCHELL HUTCHINS SERIES TRUST
Growth and Income Portfolio............................................... 113 157 146 308
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
Limited Maturity Bond Portfolio........................................... 108 143 122 262
Partners Portfolio........................................................ 109 146 128 273
RYDEX VARIABLE TRUST
OTC Fund.................................................................. 116 167 161 339
Nova Fund................................................................. 116 167 161 339
SELIGMAN PORTFOLIOS, INC.
Seligman Communications and Information Portfolio......................... 112 153 140 297
Seligman Global Technology Portfolio...................................... 116 167 161 339
STRONG OPPORTUNITY FUND II, INC.
Opportunity Fund II....................................................... 112 154 141 300
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Mid Cap Growth Fund II............................................. 112 155 142 301
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Bond Fund....................................................... 113 157 145 307
Worldwide Emerging Markets Fund........................................... 116 166 161 338
Worldwide Hard Assets Fund................................................ 113 158 147 311
Worldwide Real Estate Fund................................................ 133 216 241 484
</TABLE>
13
<PAGE>
================================================================================
EXAMPLE 3 - If you do not surrender your Contract at the end of each time
period:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONSECO SERIES TRUST
Conseco 20 Focus Portfolio................................................ $25 $ 76 $129 $276
Equity Portfolio.......................................................... 23 72 123 263
Balanced Portfolio........................................................ 23 71 122 261
High Yield Portfolio...................................................... 25 76 129 276
Fixed Income Portfolio.................................................... 22 69 118 253
Government Securities Portfolio........................................... 22 68 117 252
Money Market Portfolio.................................................... 20 61 104 225
THE ALGER AMERICAN FUND
Alger American Growth Portfolio........................................... 24 72 124 265
Alger American Leveraged AllCap Portfolio................................. 25 77 131 279
Alger American MidCap Growth Portfolio.................................... 24 74 127 271
Alger American Small Capitalization Portfolio............................. 25 76 129 276
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
VP Income and Growth...................................................... 23 70 119 256
VP International.......................................................... 29 89 151 319
VP Value. ................................................................ 26 79 134 286
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger IPT-Growth Fund.................................................... 26 79 134 286
Berger IPT-Growth and Income Fund......................................... 26 79 134 286
Berger IPT-Small Company Growth Fund...................................... 27 83 142 301
Berger IPT-New Generation Fund............................................ 27 83 142 301
Berger/BIAM IPT-International Fund........................................ 28 85 144 306
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC......................... 24 72 124 265
DREYFUS STOCK INDEX FUND.................................................. 18 56 97 210
DREYFUS VARIABLE INVESTMENT FUND, INC.
Dreyfus VIF Disciplined Stock Portfolio................................... 24 73 125 267
Dreyfus VIF International Value Portfolio................................. 29 89 152 320
FEDERATED INSURANCE SERIES
Federated High Income Bond Fund II........................................ 24 72 124 265
Federated International Equity Fund II.................................... 28 86 147 310
Federated Utility Fund II................................................. 25 77 131 280
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF--High Yield Fund............................................... 26 81 138 293
INVESCO VIF--Equity Income Fund............................................ 27 84 143 303
JANUS ASPEN SERIES
Aggressive Growth Portfolio............................................... 22 69 118 253
Growth Portfolio.......................................................... 22 69 118 253
Worldwide Growth Portfolio................................................ 23 70 119 256
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Equity Portfolio........................................ 28 86 147 310
Lazard Retirement Small Cap Portfolio..................................... 28 86 147 310
LORD ABBETT SERIES FUND, INC.
Growth & Income Portfolio................................................. 24 75 128 273
MITCHELL HUTCHINS SERIES TRUST
Growth and Income Portfolio............................................... 28 86 146 308
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
Limited Maturity Bond Portfolio .......................................... 23 71 122 262
Partners Portfolio........................................................ 24 75 128 273
RYDEX VARIABLE TRUST
OTC Fund.................................................................. 31 95 161 339
Nova Fund................................................................. 31 95 161 339
SELIGMAN PORTFOLIOS, INC.
Seligman Communications and Information Portfolio......................... 27 82 140 297
Seligman Global Technology Portfolio...................................... 31 95 161 339
STRONG OPPORTUNITY FUND II, INC.
Opportunity Fund II....................................................... 27 83 141 300
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Mid Cap Growth Fund II............................................. 27 83 142 301
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Bond Fund....................................................... 28 85 145 307
Worldwide Emerging Markets Fund .......................................... 31 95 161 338
Worldwide Hard Assets Fund................................................ 28 86 147 311
Worldwide Real Estate Fund................................................ 48 144 241 484
</TABLE>
14
<PAGE>
CONSECO VARIABLE INSURANCE COMPANY
2000 Account E
INDIVIDUAL AND GROUP ANNUITY
================================================================================
* Please remember that the examples above should not be considered a
representation of past or future expenses. Actual expenses may be greater
an or less than those shown. Similarly, the 5% annual rate of return is
not estimate or a guarantee of future investment performance.
* This Contract is designed for retirement planning. Surrenders prior to the
Maturity Date are not consistent with the long-term purposes of the
Contract and the applicable tax laws.
* The above table reflects estimates of expenses of the Variable Account and
the Funds. The table and examples assume the highest deductions possible
under a Contract, whether or not such deductions actually would be made
under such a Contract.
* Annual maintenance charges have been approximated as a .16% annual asset
charge.
THERE IS AN ACCUMULATION UNIT VALUE HISTORY (CONDENSED FINANCIAL INFORMATION)
CONTAINED IN THE APPENDIX A.
CONSECO VARIABLE, THE VARIABLE ACCOUNT AND INVESTMENT OPTIONS
CONSECO VARIABLE Conseco Variable Insurance Company ("Conseco Variable" or
the "Company") was originally organized in 1937. Prior to October 7, 1998, the
Company was known as Great American Reserve Insurance Company. In certain
states, we may continue to use the name Great American Reserve Insurance Company
until our name change is approved in that state. The Company is principally
engaged in the life insurance business in 49 states and the District of
Columbia. Conseco Variable is a stock company organized under the laws of the
state of Texas and is an indirect wholly-owned subsidiary of Conseco, Inc.
Conseco, Inc. is a publicly held financial services holding company and one of
middle America's leading sources for insurance, investment and lending products.
Through its subsidiaries, Conseco, Inc. is one of the nation's leading providers
of supplemental health insurance, retirement annuities and universal life
insurance.
CONTRACT OWNER INQUIRIES
You should direct any inquiries you have regarding your Individual Account,
the Contracts, or any related matter to the Company's Variable Annuity
Department at the address and telephone number shown under "Administrative
Office" on page 1 of this Prospectus.
FINANCIAL STATEMENTS
The financial statements of Conseco Variable and the Variable Account are
contained in the Statement of Additional Information. You should consider the
financial statements of Conseco Variable only as bearing upon the ability of
Conseco Variable to meet its obligations under the Contracts. Neither the assets
of Conseco Variable nor those of any company in the Conseco group of companies
other than Conseco Variable support these obligations.
THE VARIABLE ACCOUNT
Conseco Variable has established Conseco Variable Annuity Account E (the
Variable Account) to hold the assets that underlie the Contracts. Prior to May
1, 1999, the Variable Account was known as Great American Reserve Variable
Annuity Account E. The Board of Directors of Conseco Variable adopted a
resolution to establish the Variable Account under Texas Insurance law on
November 12, 1993. The Variable Account is registered with the Securities and
Exchange Commission (SEC) as a unit investment trust under the Investment
Company Act of 1940 (the 1940 Act). Registration under the 1940 Act does not
involve the supervision by the SEC of the management or investment policies or
practices of the Variable Account. The Variable Account is regulated by the
Insurance Department of Texas. Regulation by the state, however, does not
involve any supervision of the Variable Account, except to determine compliance
with broad statutory criteria.
The assets of the Variable Account are held in Conseco Variable's name on
behalf of the Variable Account and legally belong to Conseco Variable. However,
those assets that underlie the Contracts, are not available to be used to pay
liabilities arising out of any other business Conseco Variable may conduct. All
the income, gains and losses (realized or unrealized) resulting from these
assets are credited to or charged against the Contracts and not against any
other contracts Conseco Variable may issue.
The Variable Account is divided into sub-accounts. Each sub-account invests
in shares of one of the Funds. We reserve the right to add other sub- accounts,
eliminate existing sub-accounts, combine sub-accounts or transfer assets in one
sub-account to another sub-account established by us or by one of our
affiliates. If the shares of any Fund should become unavailable for investment
by the Variable Account or if in our judgment further investment in a portfolio
should become inappropriate in view of the purpose of the Contract, we may add
or substitute shares of another Fund. We will not eliminate any existing sub-
accounts or combine sub-accounts or substitute Funds without any required prior
approval of the SEC.
INVESTMENT OPTIONS
The Contract offers 47 Variable Account Investment Options which invest in
the Funds listed below. Currently, you can allocate Premium Payments to up to 15
Variable Account Investment Options at any one time. You bear the investment
risk for amounts you allocate to the Variable Account Investment Options. We may
make additional Investment Options available in the future.
YOU SHOULD READ THE PROSPECTUSES FOR THESE FUNDS CAREFULLY. COPIES OF THESE
PROSPECTUSES WILL BE SENT TO YOU WITH YOUR CONTRACT. IF YOU WOULD LIKE A COPY OF
THE FUND PROSPECTUSES, CALL CONSECO VARIABLE AT: (800) 557-7043. SEE APPENDIX B
WHICH CONTAINS A SUMMARY OF INVESTMENT OBJECTIVES AND STRATEGIES FOR EACH
PORTFOLIO. CERTAIN PORTFOLIOS CONTAINED IN THE FUND PROSPECTUSES MAY NOT BE
AVAILABLE WITH YOUR CONTRACT.
The investment objectives and policies of certain of the Funds are similar
to the investment objectives and policies of other mutual funds that certain of
the investment advisers manage. Although the objectives and policies may be
similar, the investment results of the Funds may be higher or lower than the
results of such other mutual funds. The investment advisers cannot guarantee,
and make no representation, that the investment results of similar funds will be
comparable even though the Funds have the same investment advisers.
A Fund's performance may be affected by risks specific to certain types of
investments, such as foreign securities, derivative investments, non-investment
grade debt securities, initial public offerings (IPOs) or companies with
relatively small market capitalizations. IPOs and other investment techniques
may have a magnified performance impact on a Fund with a small asset base. A
Fund may not experience similar performance as its assets grow.
CONSECO SERIES TRUST
Conseco Series Trust is a mutual fund with multiple portfolios. Conseco
Series Trust is managed by Conseco Capital Management, Inc., an affiliate
of Conseco Variable. The following portfolios are available under the
Contract:
Conseco 20 Focus Portfolio
Equity Portfolio
Balanced Portfolio
High Yield Portfolio
Fixed Income Portfolio
Government Securities Portfolio
Money Market Portfolio
THE ALGER AMERICAN FUND
The Alger American Fund is a mutual fund with multiple portfolios. Fred
Alger Management, Inc. serves as the Fund's investment adviser. The following
portfolios are available under the Contract:
Alger American Growth Portfolio
Alger American Leveraged AllCap Portfolio
Alger American MidCap Growth Portfolio
Alger American Small Capitalization Portfolio
AMERICAN CENTURY VARIABLE
PORTFOLIOS, INC.
American Century Variable Portfolios, Inc. is a series of funds managed by
American Century Investment Management, Inc. The following portfolios are
available under the Contract:
VP Income & Growth
VP International
VP Value
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger Institutional Products Trust is a mutual fund with multiple
portfolios. Berger LLC (formerly, Berger Associates, Inc.) is the investment
adviser to all portfolios except the Berger/BIAM IPT International Fund.
BBOI Worldwide LLC, a joint venture between Berger LLC and Bank of Ireland
Asset Management (U.S.) Limited (BIAM), is the adviser to the Berger/BIAM IPT
International Fund. BBOI Worldwide LLC has delegated daily management of the
Fund to BIAM. Berger LLC and BIAM have entered into an agreement to dissolve
BBOI Worldwide LLC. The dissolution of BBOI Worldwide LLC will have no effect
on the investment advisory services provided to the Fund. Contingent upon
shareholder approval, when BBOI Worldwide LLC is dissolved, Berger LLC will
become the Fund's advisor and BIAM will continue to be responsible for day-to-
day management of the Fund's portfolio as sub-advisor. If approved by
shareholders, these advisory changes are expected to take place in the first
half of this year. The following portfolios are available under the Contract:
Berger IPT Growth Fund (formerly, Berger IPT-100 Fund)
Berger IPT Growth and Income Fund
Berger IPT Small Company Growth Fund
Berger IPT New Generation Fund
Berger/BIAM IPT International Fund
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
The Dreyfus Socially Responsible Growth Fund, Inc. is managed by The
Dreyfus Corporation. Dreyfus has hired NCM Capital Management Group, Inc. to
serve as sub-investment adviser and to provide day-to-day management of the
Fund's investments.
DREYFUS STOCK INDEX FUND
The Dreyfus Corporation serves as the Fund's manager. Dreyfus has hired its
affiliate, Mellon Equity Associates, to serve as the Fund's index fund manager
and to provide day-to-day management of the Fund's investments.
DREYFUS VARIABLE INVESTMENT FUND
The Dreyfus Variable Investment Fund is a mutual fund with multiple
portfolios. The Dreyfus Corporation serves as the investment adviser. The
following portfolios are available under the Contract:
Dreyfus VIF Disciplined Stock Portfolio
Dreyfus VIF International Value Portfolio
FEDERATED INSURANCE SERIES
Federated Insurance Series is a mutual fund with multiple portfolios.
Federated Investment Management Company is the investment adviser of the
Federated High Income Bond Fund II and the Federated Utility Fund II.
Federated Global Investment Management Corp. is the adviser of the Federated
International Equity Fund II. The following portfolios are available under the
Contract:
Federated High Income Bond Fund II
Federated International Equity Fund II
Federated Utility Fund II
INVESCO VARIABLE INVESTMENT FUNDS, INC. (not available for new sales as of
May 1, 2000)
INVESCO Variable Investment Funds, Inc. is a mutual fund with multiple
portfolios. INVESCO Funds Group, Inc. is the investment adviser. The following
portfolios are available under the Contract:
INVESCO VIF - High Yield Fund
INVESCO VIF - Equity Income Fund
JANUS ASPEN SERIES
The Janus Aspen Series is a mutual fund with multiple portfolios which are
advised by Janus Capital Corporation. The following portfolios are available
under the Contract:
Aggressive Growth Portfolio
Growth Portfolio
Worldwide Growth Portfolio
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Series, Inc. is a mutual fund with multiple portfolios.
Lazard Asset Management, a division of Lazard Freres & Co. LLC, is the
investment manager for each portfolio. The following portfolios are available
under the Contract:
Lazard Retirement Equity Portfolio
Lazard Retirement Small Cap Portfolio
LORD ABBETT SERIES FUND, INC.
Lord Abbett Series Fund, Inc. is a mutual fund with multiple portfolios
managed by Lord, Abbett & Co. The following portfolio is available under the
Contract:
Growth & Income Portfolio
MITCHELL HUTCHINS SERIES TRUST
Mitchell Hutchins Series Trust is a mutual fund with multiple portfolios.
Mitchell Hutchins Asset Management Inc. provides advisory and administrative
services to the Fund. The following portfolio is available under the Contract:
Growth and Income Portfolio
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
Neuberger Berman Advisers Management Trust is a mutual fund with multiple
portfolios. Neuberger Berman Management Inc. is the investment adviser. The
following portfolios are available under the Contract:
Limited Maturity Bond Portfolio
Partners Portfolio
RYDEX VARIABLE TRUST
Rydex Variable Trust is a mutual fund with multiple portfolios which are
managed by PADCO Advisors II, Inc. The following portfolios are available
under the contract:
OTC Fund
Nova Fund
SELIGMAN PORTFOLIOS, INC.
Seligman Portfolios, Inc. is a mutual fund with multiple portfolios which
are managed by J. & W. Seligman & Co. Incorporated. The following portfolios are
available under the Contract:
Seligman Communications and Information Portfolio
Seligman Global Technology Portfolio
STRONG OPPORTUNITY FUND II, INC.
Strong Opportunity Fund II is a mutual fund and Strong Capital Management,
Inc. serves as the investment advisor. The following portfolio is available
under the Contract:
Opportunity Fund II
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Variable Insurance Funds, Inc. is a mutual fund with multiple series.
Strong Capital Management, Inc. serves as the investment advisor. The following
series is available under the Contract:
Strong Mid Cap Growth Fund II
VAN ECK WORLDWIDE INSURANCE TRUST
Van Eck Worldwide Insurance Trust is a mutual fund with multiple portfolios
which are managed by Van Eck Associates Corporation. The following portfolios
are available under the Contract:
Worldwide Bond Fund
Worldwide Emerging Markets Fund
Worldwide Hard Assets Fund
Worldwide Real Estate Fund
Shares of the Funds are also offered in connection with certain variable
annuity contracts and variable life insurance policies of various life insurance
companies which may or may not be affiliated with Conseco Variable. Certain
Funds are also sold directly to qualified plans. The Funds believe that offering
their shares in this manner will not be disadvantageous to you.
Conseco Variable may enter into certain arrangements under which it is
reimbursed by the Funds' advisers, distributors and/or affiliates for the
administrative services which it provides to the Funds.
VOTING RIGHTS
Conseco Variable is the legal owner of the Fund shares. However, Conseco
Variable believes that when a Fund solicits proxies in conjunction with a vote
of shareholders, it is required to obtain from you and other owners instructions
as to how to vote those shares. When we receive those instructions, we will vote
all of the shares we own in proportion to those instructions. If we determine
that we are no longer required to comply with the above, we will vote the shares
as we choose without obtaining instructions from you. We have provided a further
discussion of voting rights in the Statement of Additional Information.
FIXED ACCOUNT
The Fixed Account is not registered with the SEC because of certain exemptive
and exclusionary provisions. Conseco Variable has been advised that the staff of
the SEC has not reviewed the disclosure in this Prospectus relating to the Fixed
Account. The disclosure may, however, be subject to certain generally applicable
provisions of the federal securities laws relating to the accuracy and
completeness of statements made in prospectuses.
Purchase Payments and transfers to the Fixed Account become part of the
general account of Conseco Variable. You can transfer Contract Values between
the Fixed and Variable Accounts, but the transfers are subject to the following:
1. You may transfer Contract Values from the Variable Account to the Fixed
Account once in any 30-day period;
2. You may transfer Contract Values from the Fixed Account to the Variable
Account once in any six-month period subject to a limit of 20% of the Fixed
Account value;
3. You may not make transfers from the Fixed Account once Annuity Payments
begin.
The Administrative Charge and the Mortality and Expense Risk Charge do not
apply to values allocated to the Fixed Account.
If you buy the Contract as a TSA or under certain other qualified plans,
the Contract may contain a provision that allows you to take a loan against the
Contract Value you have allocated to the Fixed Account. Loan provisions are
described in detail in your Contract.
THE CONTRACTS
The Contract, like all deferred annuity contracts, has two phases: the
accumulation phase and the annuity phase. When you are making Purchase Payments
to the Contract, it is called the accumulation phase. During the accumulation
phase, earnings accumulate on a tax deferred basis and are taxed as income when
you make a withdrawal. On the Maturity Date, you will begin receiving Annuity
Payments from your Contract. When you are receiving Annuity Payments from the
Contract, it is called the annuity phase.
ACCUMULATION PROVISIONS
PURCHASE PAYMENTS
You can make Purchase Payments to Conseco Variable at its Administrative
Office. You can make Purchase Payments at any time before the Maturity Date.
Conseco Variable reserves the right to refuse any Purchase Payment. The Purchase
Payment requirements are as follows:
* For TSAs, the minimum initial and subsequent Purchase Payment is $50 per
month.
* For IRAs the minimum initial investment is $2,000 and the minimum amount of
each additional payment is $50. For non-qualified Contracts, the minimum
initial investment is $5,000 and the minimum amount of each additional lump
sum payment is $2,000 (or $200 per month).
* If your Purchase Payment would exceed $500,000, the Purchase Payment will
only be accepted with our prior approval.
Conseco Variable must approve each application. When Conseco Variable accepts
your application, it will issue you a contract and allocate your purchase
payment as described below.
We may, at our option and with prior notice, cancel certain Contracts in
which no Purchase Payments have been made, or if the Contract Value is less than
$500. When the Contract is canceled, we will pay you the Contract Value
determined as of the Valuation Period during which the Contract was canceled,
less any outstanding loans, any Withdrawal Charge, and the $30 Annual
Administrative Fee. If your Contract is canceled, there may be adverse tax
consequences (see "Federal Tax Status").
ALLOCATION OF PURCHASE PAYMENTS
You may elect to have Purchase Payments accumulate:
(a) on a fully variable basis, which means they are invested in the sub-
accounts of the Variable Account (Variable Account Investment Options);
(b) on a fully fixed basis, which means they are invested in our general
account and receive a periodically adjusted interest rate guaranteed by
Conseco Variable (Fixed Account); or
(c) a combination of both.
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You may request to change your allocation of future Purchase Payments 30 days
after either we establish your Individual Account, or 30 days after you have
made a prior change in allocation.
Once we receive your Purchase Payment and the necessary information, we will
issue your Contract and allocate your first Purchase Payment within 2 business
days. If you do not provide us all of the information needed, we will contact
you. If for some reason we are unable to complete this process within 5 business
days, we will either send back your money or get your permission to keep it
until we get all of the necessary information. If you add more money to your
Contract by making additional Purchase Payments, we will credit these amounts to
your Contract within one business day. Our business day closes when the New York
Stock Exchange closes, usually 4:00 P.M. Eastern time.
ACCUMULATION UNITS
We credit Purchase Payments that you allocate to the sub-accounts with
Accumulation Units. We do this at the end of the Valuation Period when we
receive your Purchase Payment at our Administrative Office. We determine the
number of Accumulation Units credited to your Contract by dividing the Purchase
Payment amount by the value of an Accumulation Unit at the end of that Valuation
Period. We value Accumulation Units for each sub-account separately.
ACCUMULATION UNIT VALUES
Every day we determine the value of an Accumulation Unit for each of the
sub-accounts by multiplying the Accumulation Unit value for the previous
Valuation Period by a factor for the current Valuation Period. The factor is
determined by:
1. dividing the value of a Fund share at the end of the current Valuation
Period (and any charges for taxes) by the value of a Fund share for the previous
Valuation Period; and
2. subtracting the daily amount of the Mortality and Expense Risk Charge and
Administrative Charges.
The value of an Accumulation Unit may go up or down from Valuation Period to
Valuation Period. THERE IS NO GUARANTEE THAT THE VALUE OF YOUR INDIVIDUAL
ACCOUNT WILL EQUAL OR EXCEED THE PURCHASE PAYMENTS YOU HAVE MADE.
We will tell you at least once each year the number of Accumulation Units
which we credited to your Individual Account, the current Accumulation Unit
values and the value of your Individual Account.
TRANSFERS
Before the Maturity Date, you may make transfers from one sub-account to
another sub-account and/or to the Fixed Account. The Contract allows Conseco
Variable to limit the number of transfers that can be made in a specified time
period. You should be aware that transfer limitations may prevent you from
making a transfer on the date you desire, with the result that your future
Contract Value may be lower than it would have been had the transfer been made
on the desired date.
Conseco Variable's interest in applying these limitations is to protect the
interests of both Contract Owners who are not engaging in significant transfer
activity and Contract Owners who are engaging in such activity. Conseco Variable
has determined that the actions of Contract Owners engaging in significant
transfer activity among sub-accounts may cause an adverse effect on the
performance of the underlying Fund for the sub-account involved. The movement of
sub-account values from one sub-account to another may prevent an underlying
Fund from taking advantage of investment opportunities because it must maintain
a liquid position in order to handle withdrawals. Such movement may also cause a
substantial increase in Fund transaction costs which must be indirectly borne by
Contract Owners.
HOW YOU CAN MAKE TRANSFERS
Conseco Variable is not charging a transfer fee. However, we limit transfers
to one every 30 days and to a maximum of 20% of the Fixed Account value per any
six-month period from the Fixed Account. All transfers requested for a Contract
on the same day will be treated as a single transfer in that period.
You can make transfers by written authorization. Written transfer requests
may be made by a person acting for or on your behalf as an attorney-in-fact
under a power-of-attorney if permitted by state law. By authorizing Conseco
Variable to accept telephone and/or internet transfer instructions, you agree to
accept and be bound by the conditions and procedures established by Conseco
Variable from time to time. We have instituted reasonable procedures to confirm
that any instructions communicated by telephone are genuine. We will record all
telephone calls and will ask the caller to produce your personalized data prior
to our initiating any transfer requests by telephone. Personalized data will
also be required for internet transfers. Additionally, as with other
transactions, you will receive a written confirmation of your transfer.
Transfers over the internet may not be available (check with your registered
representative). If you do not want the ability to make transfers by telephone
or through the internet, you should notify us in writing. If reasonable
procedures are employed, neither Conseco Variable nor Conseco Equity Sales, Inc.
will be liable for following instructions which it reasonably believes to be
genuine.
Transfer requests received by Conseco Variable before the close of trading
on the New York Stock Exchange (currently 4:00 p.m. Eastern time) will be
initiated at the close of business that day. If we receive a request later it
will be initiated at the close of the next business day.
DOLLAR COST AVERAGING
Conseco Variable offers a Dollar Cost Averaging (DCA) program which enables
you to transfer values from the Fixed Account or Money Market sub-account to
another Investment Option on a predetermined and systematic basis. The DCA
program allows you to make investments in equal installments over time in an
effort to potentially reduce the risk of market fluctuations. There is no
guarantee that this will happen. The transfers under this program do not count
toward the number of transfers you can make in a year. Currently, there is no
charge for participating in this program.
Dollar cost averaging does not assure a profit and does not protect against loss
in declining markets. Dollar cost averaging involves continues investment in the
selected Variable Account Investment Options regardless of fluctuating price
levels of the Variable Account Investment Option(s). You should consider your
financial ability to continue the dollar cost averaging program through periods
of fluctuating price levels.
REBALANCING
Rebalancing is a program, which if elected, permits you to pre-authorize
periodic automatic transfers prior to the Maturity Date among the sub-accounts
pursuant to your written instructions or over the internet (if available). The
rebalancing program may also be available through the internet (check with
your registered representative regarding availability). Rebalancing over the
internet is subject to our administrative rules and procedures. The transfers
under this program are made to maintain a particular percentage allocation
among the sub-accounts you select. Any amount you have in the Fixed Account
will not be transferred pursuant to the rebalancing program. You must have at
least $5,000 to have transfers made pursuant to this program. Transfers must be
in whole percentages in one (1%) percent allocation increments. The maximum
number of sub-accounts you can use for rebalancing is 15. You can request that
rebalancing occur quarterly, semi-annually or annually on a date you select.
There is no fee for participating in the program. Conseco Variable reserves the
right to terminate, modify or suspend the rebalancing program at any time. The
transfers under this program do not count toward the number of transfers you
can make in a year.
ASSET ALLOCATION PROGRAM
Conseco Variable understands the importance to you of having advice from a
financial adviser regarding your investments in the Contract (asset allocation
program). Certain investment advisers have made arrangements with us to make
their services available to you. Conseco Variable has not made any independent
investigation of these advisers and is not endorsing such programs. You may be
required to enter into an advisory agreement with your investment adviser to
have the fees paid out of your Contract before the Maturity Date.
Conseco Variable will, pursuant to an agreement with you, make a partial
withdrawal from the value of your Contract to pay for the services of the
investment adviser. If the Contract is non-qualified, the withdrawal will
be treated like any other distribution and may be included in gross income
for federal tax purposes. Further, if you are under age 59 1/2, it may be
subject to a tax penalty. If the Contract is qualified, the withdrawal for
the payment of fees may not be treated as a taxable distribution if certain
conditions are met. Additionally, any withdrawals for this purpose may be
subject to a withdrawal charge. You should consult a tax adviser regarding
the tax treatment of the payment of investment adviser fees from your Contract.
SWEEPS
Sweeps is a program which provides for the automatic transfer of the
earnings from the Fixed Account into the sub-accounts on a periodic and
systematic basis. The transfers under this program do not count toward the
number of transfers you can make in a year. Currently, there is no charge for
participating in this program.
WITHDRAWALS
Prior to the earlier of the Maturity Date or the death of the Annuitant, you
may withdraw all or a portion of the Contract Value upon written request. You
must complete all the necessary information and send it to Conseco Variable's
Administrative Office. For certain qualified Contracts, your withdrawal rights
may be restricted and may require the consent of your spouse as required under
the Code.
TOTAL WITHDRAWALS
If you make a total withdrawal, we will pay the Contract Value as of the date
we receive your request at our Administrative Office, less:
* the $30 Annual Administrative Fee,
* any outstanding loans (plus the pro rata interest accrued), and
* any applicable Withdrawal Charge.
If you make a total withdrawal, we will cancel the Contract.
PARTIAL WITHDRAWALS
If you make a partial withdrawal, we will pay the amount requested and cancel
that number of Accumulation Units credited to each Investment Option of the
Individual Account necessary to equal the amount you withdraw from each
Investment Option plus any applicable Withdrawal Charge deducted from such
Investment Option. You can make certain withdrawals free of Withdrawal Charges,
see "Charges and Deductions."
When you make a partial withdrawal, you must specify the Investment Options
from which the withdrawal is to be made. You may not request an amount from an
Investment Option that exceeds the value of that Investment Option less any
applicable Withdrawal Charge. If you do not specify the Investment Options from
which a partial with drawal is to be taken, we will take the partial withdrawal
from the Fixed Account until it is exhausted and then from the sub-accounts. If
the partial withdrawal is less than the total value in the Variable Account
Investment Options, the withdrawal will be taken pro rata from all the Variable
Account Investment Options. Any partial withdrawal must be at least $250 or, if
less, the entire balance in the Investment Option. If a partial withdrawal plus
any applicable Withdrawal Charge would reduce the Contract Value to less than
$500, we reserve the right to treat the partial withdrawal as a total withdrawal
of the Contract Value.
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WITHDRAWALS MAY BE SUBJECT TO INCOME TAXES, PENALTY TAXES AND CERTAIN
RESTRICTIONS.
SUSPENSION OF PAYMENTS
We will pay the amount of any withdrawal from the Variable Account promptly,
and in any event within seven days of receipt of the request. Conseco Variable
reserves the right to defer the right of withdrawal or postpone payments for any
period when:
(1) the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
(2) trading on the New York Stock Exchange is restricted;
(3) an emergency exists as a result of which disposal of securities held in
the Variable Account is not reasonably practicable or it is not
reasonably practical to determine the value of the Variable Account's
net assets; or
(4) the SEC, by order, so permits for the protection of security holders,
provided that applicable rules and regulations of the SEC will govern as
to whether the conditions described in (2) and (3) exist.
RESTRICTIONS UNDER OPTIONAL RETIREMENT PROGRAMS
If you participate in certain Optional Retirement Programs (ORP), you can
withdraw your interest in a Contract only upon:
(1) termination of employment in all public institutions of higher education
as defined by applicable law,
(2) retirement, or
(3) death.
Accordingly, you (as a participant in ORP) may be required to obtain a
certificate of termination from your employer before you can withdraw your
interest. Certain plans may have additional restrictions on distributions.
RESTRICTIONS UNDER SECTION 403(b) PLANS
If you own the Contract under a TSA-403(b) plan, you can only make
withdrawals of amounts attributable to contributions you made pursuant to a
salary reduction agreement (as defined in Section 403(b)(11) of the Code) under
the following circumstances:
(1) when you reach age 59 1/2;
(2) when you leave your job;
(3) when you die;
(4) if you become disabled (as that term is defined in the Code);
(5) made in the case of hardship; or
(6) made pursuant to a qualified domestic relations order, if otherwise
permitted.
Withdrawals for hardship are restricted to the portion of your Contract Value
which represents contributions you made and does not include any investment
results.
The limitations on withdrawals became effective on January 1, 1989, and apply
only to:
o salary reduction contributions made after December 31, 1988;
o income attributable to such contributions; and
o income attributable to amounts held as of December 31, 1988.
The limitations on withdrawals do not affect rollovers or transfers between
certain qualified plans. Tax penalties may also apply.
SYSTEMATIC WITHDRAWAL PLAN
Conseco Variable offers a Systematic Withdrawal Plan (SWP) which enables you
to pre-authorize periodic withdrawals. You can participate in this program by
sending a written request to our Administrative Office. You can instruct Conseco
Variable to withdraw a level dollar amount or percentage from specified
investment options, largest account balance or on a pro-rata basis. If you do a
reallocation and do not specify investment options, all systematic withdrawals
will then default to a pro-rata basis.
SWP WITHDRAWALS MAY BE SUBJECT TO INCOME TAXES, PENALTY TAXES AND CERTAIN
RESTRICTIONS.
LOANS
Your Contract may contain a loan provision issued in connection with certain
qualified plans. If you own a Contract which contains a loan provision, you may
obtain loans using the Contract as the only security for the loan. Loans are
subject to provisions of the Code and to applicable retirement program rules.
You should consult a tax adviser and retirement plan fiduciary before exercising
loan privileges. Loan provisions are described in detail in your Contract.
The amount of any loan will be deducted from the minimum death benefit. In
addition, a loan, whether or not repaid, will have a permanent effect on the
Contract Value because the investment performance of the Variable Account
Investment Options will apply only to the unborrowed portion of the Contract
Value. The longer the loan is outstanding, the greater the effect is likely to
be. The effect could be favorable or unfavorable. If the investment performance
results are greater than the rate being credited on amounts held in the loan
account while the loan is outstanding, the Contract Value will not increase as
rapidly as it would have if no loan were outstanding. If the investment
performance results are below that rate, the Contract Value will be higher than
it would have been if no loan had been outstanding.
CHARGES AND DEDUCTIONS
WITHDRAWAL CHARGE
Conseco Variable does not make a deduction when you make a Purchase Payment
for sales expenses. However, Conseco Variable may assess a Withdrawal Charge
against the Purchase Payments when you withdraw them. The amount of the
Withdrawal Charge, if applicable, will affect the amount we will pay to you.
If you make a withdrawal from the Contract before the Maturity Date, a
Withdrawal Charge (a deferred sales charge) may be assessed against Purchase
Payments that have been in the Contract less than six complete Contract Years.
We never assess a charge for Purchase Payments that have been in the Contract
for more than six complete Contract Years. The length of time from when we
receive your Purchase Payment to the time you make a withdrawal will determine
the Withdrawal Charge. Certain other withdrawals described below under "Free
Withdrawal Amount" are not subject to a withdrawal charge.
The charge is a percentage of the amount you withdraw (not to exceed 8.5% of
the aggregate amount of the Purchase Payments made) and equals:
YEARS SINCE PAYMENT CHARGE PERCENTAGE
- - -----------------------------------------------------
1 ........................................9%
2 ........................................9%
3 ........................................8%
4 ........................................7%
5 ........................................5%
6 ........................................3%
7 and thereafter..........................0%
In addition, the following circumstances further limit or reduce Withdrawal
Charges in some states:
o if you are age 52 or younger when we issue your Contract, we will not
assess a Withdrawal Charge for withdrawals you make after the 15th
Contract Year and later;
o if you are 53 to 56 when we issue your Contract, we will not assess a
Withdrawal Charge for withdrawals you make after you reach age 67 and
later;
o if you are age 57 or older when we issue your Contract, the Withdrawal
Charge we assess for withdrawals you make will be multiplied by a factor
ranging from .9 to 0 for Contract Years 1-10 and later, respectively.
FREE WITHDRAWAL AMOUNT: You may make a withdrawal without the Withdrawal
Charge described above (a "free withdrawal") in an amount up to the greater of:
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(i) 10% of the Contract Value (as determined on the date we receive your
request to make a withdrawal), or
(ii) the Contract Value divided by the Annuitant's life expectancy based
on the Code, or
(iii) the amount of any Purchase Payments that have been in the Contract more
than six complete Contract Years.
If you make additional withdrawals in excess of the free withdrawal amount
in any Contract Year during the period when the Withdrawal Charge applies, the
withdrawals will be subject to the appropriate charge as set forth above. From
time to time, we may permit you to pre-authorize partial withdrawals subject to
certain limitations then in effect.
On or after the Maturity Date, we may assess Withdrawal Charges for
withdrawals made under the Fourth and Fifth Annuity Options. We will not assess
withdrawal charges which would otherwise apply:
(i) if the Annuitant dies,
(ii) if you die, or
(iii)if we make payments under an annuity option that begins at least four
years after the effective date of the Contract and is paid under any
life annuity option, or any option with payments for a minimum period of
five years.
If you make a complete withdrawal of the entire amount in your Individual
Account with a certain dollar amount, we will deduct the Withdrawal Charge from
the portion of your Individual Account you withdraw and pay the balance to you.
EXAMPLE: You request a total withdrawal of $2,000 and the applicable
Withdrawal Charge is 5%. Your Individual Account will be reduced by $2,000 and
you will receive $1,880 (i.e., the $2,000 total withdrawal reduced by the 10%
free withdrawal less the 5% Withdrawal Charge and $30 Annual Administrative
Fee).
If you make a partial withdrawal in which you request to receive a specified
amount, the Withdrawal Charge will be calculated on the total amount that must
be withdrawn from your Individual Account in order to provide you with the
amount you requested.
EXAMPLE: You request to receive $1,000 with a free withdrawal amount of $200
and the applicable Withdrawal Charge is 5%. Your Individual Account will be
reduced by $1,042.11. In order to make a withdrawal of $1,000, the amount you
withdraw must be greater than the amount you request by the amount of the
Withdrawal Charge. The amount you withdraw is calculated by dividing (a) the
amount you requested ($1,000 less the free withdrawal amount of $200) by (b)
1.00, minus the applicable deduction rate of 5% (or .95), which produces
$1,042.11 ($842.11 plus the $200 free withdrawal amount). The value of the
Individual Account will be reduced by this amount.
ADMINISTRATIVE CHARGES
Prior to the Maturity Date, we deduct an Annual Administrative Fee of $30 on
each Contract anniversary from the Individual Account value. We will waive the
Annual Administrative Fee if your Individual Account value is $25,000 or
greater. If you make a complete withdrawal of your Individual Account value
prior to the Maturity Date, Conseco Variable will deduct the Annual
Administrative Fee from the proceeds it pays.
We deduct the Annual Administrative Fee first from amounts accumulated in the
Fixed Account; if no or an insufficient value exists in the Fixed Account, any
balance will then be deducted from the sub-accounts of the Variable Account.
We make a deduction for a daily charge in an amount equal to 0.15%, on an
annual basis, of the value of each sub-account of the Variable Account. This
charge reimburses Conseco Variable for administrative expenses. We will not
deduct this charge from any amount you have allocated to the Fixed Account. The
charge will be deducted pro rata from Contract Value of each sub-account of the
Variable Account.
Conseco Variable has set this administrative fee at a level that will recover
no more than the actual costs it incurs which are associated with administering
the Contracts. Conseco Variable does not expect to recover any amount in excess
of its accumulated administrative expenses from such fees. Even though
administrative expenses may increase, Conseco Variable will not increase the
amount of the administrative fees.
MORTALITY AND EXPENSE RISK CHARGE
Conseco Variable assumes two risks under the Contract: the mortality risk and
the expense risk. Conseco Variable makes daily deductions from the sub-accounts
of the Variable Account equal, on an annual basis, to 1.25% of the value of your
assets of the Variable Account for the mortality and expense risks it assumes.
The mortality risk is Conseco Variable's promise to continue making annuity
payments, determined in accordance with the annuity tables and other provisions
contained in the Contract, regardless of how long the Annuitant lives and
regardless of how long all Annuitants as a group live. This promise assures that
neither the longevity of an Annuitant nor an improvement in life expectancy
generally will have any adverse effect on the monthly Annuity Payments, and that
Annuitants will not outlive the amounts accumulated to provide such payment.
Conseco Variable also assumes the risk that the Withdrawal Charges and the
administrative fees may be insufficient to cover actual sales and administrative
expenses. If so, the shortfall will be made up from Conseco Variable's general
assets, which may include profits from other sub-account deductions. Conversely,
if the sales deductions and administrative fees exceed the actual sales and
administrative expenses, Conseco Variable may realize a gain. We do not assess
the Mortality and Expense Risk Charge against the Fixed Account.
REDUCTION OR ELIMINATION OF CONTRACT CHARGES
In some cases, Conseco Variable may expect to incur lower sales and
administrative expenses or perform fewer services due to the size of the
Contract, the average Purchase Payment and the use of group enrollment
procedures. Then, Conseco Variable may be able to reduce or eliminate the
Contract charges for administrative charges and Withdrawal Charges.
PREMIUM TAXES
We may make a deduction for any premium taxes due from Purchase Payments,
other values on the Maturity Date, or at such other time as we determine. The
current range of premium taxes in jurisdictions where we make the Contracts
available is 0%-3.5%.
FUND EXPENSES
There are deductions from and expenses paid out of the assets of the Funds,
which are described in the Fund prospectuses.
OTHER CHARGES
Currently, Conseco Variable does not make a charge against the Variable
Account for its federal income taxes, or provisions for such taxes, that may be
as a result of the Variable Account. Conseco Variable may charge each
sub-account of the Variable Account for its portion of any income tax charged to
the sub-account or its assets. Under present laws, Conseco Variable may incur
state and local taxes (in addition to premium taxes) in several states. At
present, these taxes are not significant. If they increase, however, Conseco
Variable may decide to make charges for such taxes or provisions for such taxes
against the Variable Account. Any such charges against the Variable Account or
its sub-accounts could have an adverse effect on the investment performance of
the sub-accounts.
DEATH BENEFIT BEFORE MATURITY DATE
If a Contract Owner, Co-Owner or the Annuitant dies prior to the Maturity
Date, Conseco Variable will pay the minimum death benefit to the beneficiary.
Conseco Variable will pay the minimum death benefit either as a lump sum or
under an annuity option as explained below.
Generally, the distribution of the minimum death benefit must be made within
five years after the Contract Owner's or Co-Owner's death. If the beneficiary is
an individual, in lieu of distribution within five years of the Owner's death,
distribution may generally be made as an annuity which begins within one year of
the Owner's death and is payable over the life of the beneficiary or over a
period not in excess of the life expectancy of the beneficiary. If the Owner's
spouse is the beneficiary, that spouse may elect to continue the Contract as the
new Contract Owner in lieu of receiving the distribution. In such a case, the
distribution rules which apply when a Contract Owner dies will apply when that
spouse, as the Contract Owner, dies.
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In the case of a Contract involving more than one Contract Owner, the death
of any Contract Owner shall cause this section to apply and if the Contract is
owned by a non-individual the death of the Annuitant shall be treated as the
death of the Contract Owner. Additional requirements may apply to qualified
Contracts.
The minimum death benefit during the first seven Contract Years will be
equal to the greater of:
(a) the Contract Value on the date Conseco Variable receives at its
Administrative Office due proof of death, or
(b) the sum of all Purchase Payments made, less any partial withdrawals.
During any subsequent seven-Contract-Year period, the minimum death benefit
will be the greater of:
(a) the Contract Value on the date Conseco Variable receives due proof of death
at its Administrative Office; or
(b) the Contract Value on the last day of the previous seven-Contract-Year
period plus any Purchase Payments made and less any subsequent partial
withdrawals; or
(c) the sum of all Purchase Payments paid, less any partial withdrawals. If the
Annuitant or Contract Owner dies after reaching the age of 75, the death
benefit will be the Contract Value on the date Conseco Variable receives
due proof of death at its Administrative Office. The minimum death benefit
will be reduced by any outstanding loans.
Death benefits generally will be paid within seven days of the date Conseco
Variable receives due proof of death at its Administrative Office, subject to
postponement under the same circumstances that payment or withdrawals may be
postponed (see "Withdrawals").
OPTIONS WHEN YOU TERMINATE YOUR PARTICIPATION IN
THE PLAN (FOR GROUP CONTRACTS ONLY)
If you terminate your participation in a Plan before the Maturity Date, you
will have the following options:
(a) leave the Individual Account in force under the Contract, and the
sub-account will continue to participate in the investment results of the
Investment Option(s) you select. On the Maturity Date, you will begin to
receive Annuity Payments. During the interim, you may elect any of the
options described below. This option will automatically apply, unless you
file a written election of another option.
(b) apply the Individual Account to provide Annuity Payments which begin
immediately.
(c) convert the Individual Account to an individual variable annuity contract
of the type we are then offering.
(d) terminate the Individual Account and receive the Contract Value less any
applicable charges and outstanding loans.
THE ANNUITY PHASE-SETTLEMENT PROVISIONS
You select a Maturity Date and an annuity option. You may select the Maturity
Date at any time, subject to state requirements.
The annuity option may be on a fixed basis (which means that payments come
from the Fixed Account) or a variable basis (which means that payments come from
the sub-accounts of the Variable Account), or a combination of both. If you do
not select an Annuity Option, we will make payments under a lifetime annuity
with 120 monthly payments guaranteed. Payments will be made based on the
allocations to the Fixed Account and Variable Account on the Maturity Date.
You may elect to change the annuity option or basis of payment (fixed or
variable) with written notice to Conseco Variable at least 30 days before the
Maturity Date. Once Annuity Payments begin, you may not make any changes (except
you may make transfers under certain circumstances).
You cannot elect an annuity option which would result in the first monthly
Annuity Payment of less than $50 if payments are to be on a fully fixed basis or
variable basis, or less than $50 on each basis if a combination of fixed and
variable Annuity Payments are elected. If, at any time, Annuity Payments are or
become less than $50 per month, Conseco Variable reserves the right to change
the frequency of payments to an interval which will result in Annuity Payments
of at least $50 each (except that we will make payments at least annually).
Prior to the Maturity Date, you may terminate your Individual Account and
receive its value in a lump sum. Once Annuity Payments begin, you and
the Annuitant cannot terminate the annuity benefit and receive a lump sum
settlement instead.
ANNUITY OPTIONS
You may select one of the following annuity options:
FIRST OPTION-LIFE ANNUITY. Under this option, we will make monthly payments
during the lifetime of the payee. The payments will cease with the last
monthly payment due prior to the death of the payee. Of the first two options,
this option offers the maximum level of monthly payments since there is no
minimum number of payments guaranteed (nor a provision for a death benefit
payable to a beneficiary). It would be possible under this option to receive
only one Annuity Payment if the payee died prior to the due date of the
second Annuity Payment.
SECOND OPTION-LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS GUARANTEED.
Under this option, we will make monthly payments during the lifetime of the
payee with the guarantee that if, at the death of the payee, we have made
payments for less than 120, 180 or 240 months, as elected, we will continue
to make Annuity Payments during the remainder of such period to your
beneficiary. If no beneficiary is designated, Conseco Variable will, in
accordance with the Contract provisions, pay the payee's estate a lump sum
equal to the present value, as of the date of death, of the number of guaranteed
annuity payments remaining after that date, computed on the basis of the assumed
net investment rate used in determining the first monthly payment. Because this
option provides a specified minimum number of Annuity Payments, this option
results in somewhat lower payments per month than the First Option.
THIRD OPTION-INSTALLMENT REFUND LIFE ANNUITY. Under this option, we will make
monthly payments for the installment refund period. This is the time required
for the sum of the payments to equal the amount applied, and thereafter for the
life of the payee.
FOURTH OPTION-PAYMENTS FOR A FIXED PERIOD. Under this option, we will make
monthly payments for the number of years selected. The period may be from 3
through 20. If you elect to receive payments under this option on a variable
basis, payments will vary monthly in accordance with the net investment rate of
the sub-accounts of the Variable Account. If the payee dies before we have
made the specified number of monthly payments, the present value of the
remaining payments will be paid to the designated beneficiary in a lump sum
payment.
To the extent that you select this option on a variable basis, at any time
during the payment period you may elect that the remaining value:
(1) be paid in one sum, or
(2) be applied to effect a lifetime annuity under one of the first two
options described above, as long as the distribution will be made at
least as rapidly as during the life of the payee.
Since you may elect a lifetime annuity at any time, the annuity rate and
expense risks continue after the Maturity Date. Accordingly, we will continue to
make deductions for these risks from the Individual Account values.
FIFTH OPTION-PAYMENTS OF A FIXED AMOUNT. Under this option, we will make
payments of a designated dollar amount on a monthly, quarterly, semi-annual, or
annual basis until the Individual Account value you applied under this option,
adjusted each Valuation Period to reflect investment experience, is exhausted
within a minimum of three years and a maximum of 20 years. If the payee dies
before the value is exhausted, we will pay the remaining value to the
beneficiary in a lump sum payment. In lieu of a lump sum payment, the
beneficiary may elect an annuity option for distribution of any amount on
deposit at the date of the payee's death which will result in a rate of
payment at least as rapid as the rate of payment during the life of the
payee.
If you elect the this Option on a variable basis, at any time during the
payment period you may elect the remaining value be applied to provide a
lifetime annuity under one of the first two options described above, as long as
the distribution will be made at least as rapidly as during the life of the
payee. Since you may elect a lifetime annuity at any time, the annuity rate
and expense risks continue during the payment period. Accordingly, we will
continue to make deductions for these risks from the Individual Account values.
PROCEEDS APPLIED TO AN ANNUITY OPTION. You may apply all or part of the
Contract Value to an annuity option. The proceeds that will be applied to the
annuity option will be as follows:
(a) the Contract Value less any outstanding loans, if the annuity option
elected begins at least four years after the effective date of your
Contract and is paid under any life annuity option, or any option with
payments for a minimum period of five years, with no rights of early
withdrawal; or
(b) the death benefit if proceeds are payable under death of Annuitant or an
Owner (as applicable); or
(c) the Contract Value less any outstanding loans, Withdrawal Charge and any
administrative fee.
The SAI contains a further discussion of Annuity Provisions including how
annuity unit values are calculated.
TRANSFERS AFTER MATURITY DATE
On or after the Maturity Date, you may not make transfers from a fixed
annuity option to a variable annuity option or from a variable annuity option
to a fixed annuity option.
Conseco Variable reserves the right to modify, terminate or defer the
transfer privilege at any time that it is unable to purchase or redeem shares of
the Funds. Conseco Variable also reserves the right to modify or terminate the
transfer privilege at any time in accordance with applicable law.
DEATH ON OR AFTER MATURITY DATE
If you selected Annuity Payments based on an annuity option providing
payments for a guaranteed period, and the Annuitant or an Owner dies on or after
the Maturity Date, Conseco Variable will make the remaining guaranteed payments
to the beneficiary. Such payments will be made at least as rapidly as under the
method of distribution being used as of the date of the Annuitant's death. If no
beneficiary is living, Conseco Variable will commute any unpaid guaranteed
payments to a single sum (on the basis of the interest rate used in determining
the payments) and pay that single sum to the Annuitant's estate.
OTHER CONTRACT PROVISIONS
Ten-Day Right To Review. The Contract provides a "10-day free look" (in some
states, the period may be longer). This allows you to revoke the Contract by
returning it to either a Conseco Variable representative or to Conseco
Variable's Administrative Office within 10 days (or the period required in your
state) of delivery of the Contract. Conseco Variable deems this period as ending
15 days after it mails a Contract from its Administrative Office. If you return
the Contract under the terms of the free look provision, Conseco Variable will
refund the Purchase Payments you have made.
OWNERSHIP. You, as the Contract Owner, are the person entitled to exercise
all rights under the Contract. Co-Owners may be named in non-qualified
Contracts. Prior to the Maturity Date, the Contract Owner is the person
designated in the application or as subsequently named. On and after the
Maturity Date, the Annuitant is the Contract Owner and after the death of the
Annuitant, the beneficiary is the Contract Owner.
The Contract is either a group contract or an individual contract, depending
on the state where we issued it. The individual contract is issued directly to
the Contract Owner. A group Contract is identical to the individual Contract
except that it is issued to a contract holder, for the benefit of the
participants in the group. You are a participant in the group and will receive a
certificate evidencing your ownership. You, as the owner of a certificate, are
entitled to all the rights and privileges of ownership. As used in this
Prospectus, the term Contract refers to your certificate.
CHANGE OF OWNERSHIP
NON-QUALIFIED CONTRACTS:
In the case of non-qualified Contracts, you may change ownership of the
Contractor you may collaterally assign it at any time during the lifetime of the
Annuitant prior to the Maturity Date, subject to the rights of any irrevocable
beneficiary. ASSIGNING A CONTRACT, OR CHANGING THE OWNERSHIP OF A CONTRACT MAY
BE A TAXABLE EVENT. Any change of ownership or assignment must be made in
writing. Conseco Variable must approve any change of ownership or assignment.
Any assignment and any change, if approved, will be effective as of the date on
which it is written. Conseco Variable assumes no liability for any payments made
or actions it takes before a change is approved or an assignment is accepted, or
responsibility for the validity of any assignment.
QUALIFIED CONTRACTS:
In the case of qualified Contracts, you generally may not change ownership of
the Contract nor may you transfer it, except by the trustee of an exempt
employee's trust which is part of a retirement plan qualified under Section 401
of the Code. Except as noted, if you own a qualified Contract, you may not sell,
assign, transfer, discount, or pledge (as collateral for a loan or as security
for the performance of an obligation or for any other purpose) the Contract.
MODIFICATION. Conseco Variable may modify the Contract with your approval
unless provided otherwise by the Contract. After the Contract has been in force,
Conseco Variable may modify it except that the Mortality and Expense Risk
Charge, the Withdrawal Charges and the administrative fees cannot be increased.
A group Contract will be suspended automatically on the effective date of any
modification initiated by Conseco Variable if you fail to accept the
modification. Effective with suspension, no new participants may enter the plan
but further Purchase Payments may be made on your behalf and on the behalf of
other participants then covered by the Contract.
No modification may affect Annuitants in any manner unless deemed necessary
to achieve the requirements of federal or state statutes or any rule or
regulation of the United States Treasury Department.
FEDERAL TAX STATUS
NOTE: CONSECO VARIABLE HAS PREPARED THE FOLLOWING INFORMATION ON TAXES AS A
GENERAL DISCUSSION OF THE SUBJECT. IT IS NOT INTENDED AS TAX ADVICE TO ANY
INDIVIDUAL. YOU SHOULD CONSULT YOUR OWN TAX ADVISER ABOUT YOUR OWN
CIRCUMSTANCES. CONSECO VARIABLE HAS INCLUDED AN ADDITIONAL DISCUSSION REGARDING
TAXES IN THE STATEMENT OF ADDITIONAL INFORMATION.
ANNUITY CONTRACTS IN GENERAL
Annuity Contracts are a means of setting aside money for future needs,
usually retirement. Congress recognized how important saving for retirement was
and provided special rules in the Internal Revenue Code (Code) for annuities.
Simply stated, these rules provide that you will not be taxed on the earnings
on the money held in your annuity contract until you take the money out. This is
referred to as tax-deferral. There are different rules as to how you will be
taxed depending on how you take the money out and the type of
Contract--Qualified or Non-Qualified (see following sections).
You, as the Contract Owner, will not be taxed on increases in the value of
your Contract until a distribution occurs -- either as a withdrawal or as
annuity payments. When you make a withdrawal you are taxed on the amount of the
withdrawal that is earnings. For annuity payments, different rules apply. A
portion of each annuity payment is treated as a partial return of your purchase
payments and will not be taxed. The remaining portion of the annuity payment
will be treated as ordinary income. How the annuity payment is divided between
taxable and non-taxable portions depends upon the period over which the annuity
payments are expected to be made. Annuity payments received after you have
received all of your Purchase Payments are fully includible in income.
When a non-qualified Contract is owned by a non-natural person (e.g.,
corporation or certain other entities other than a trust holding the Contract as
an agent for a natural person), the Contract will generally not be treated as an
annuity for tax purposes.
QUALIFIED AND NON-QUALIFIED CONTRACTS
If you purchase the Contract as an individual and not under any pension plan,
specially sponsored program or an individual retirement annuity, your Contract
is referred to as a non-qualified Contract.
If you purchase the Contract under a pension plan, specially sponsored
program or an individual retirement annuity, your Contract is referred to as a
qualified Contract.
A qualified Contract will not provide any necessary or additional tax
deferral if it is used to fund a qualified plan that is tax deferred. However,
the Contract has features and benefits other than tax deferral that may make it
an appropriate investment for a qualified plan. You should consult your tax
adviser regarding these features and benefits prior to purchasing a qualified
Contract.
28
<PAGE>
WITHDRAWALS--NON-QUALIFIED CONTRACTS
If you make a withdrawal from your non-qualified Contract, the Code
generally treats such a withdrawal as first coming from earnings and then
from your Purchase Payments. Such withdrawn earnings are includible in
income.
The Code also provides that any amount received under an annuity contract
which is included in income may be subject to a penalty. The amount of the
penalty is equal to 10% of the amount that is includible in income. Some
withdrawals will be exempt from the penalty. They include any amounts:
(1) paid on or after you reach age 59 1/2;
(2) paid after you die;
(3) paid if you become totally disabled (as that term is defined in the
Code);
(4) paid in a series of substantially equal payments made annually (or more
frequently) for life or a period not exceeding life expectancy;
(5) paid under an immediate annuity; or
(6) which are allocable to purchase payments made prior to August 14, 1982.
The Contract provides that upon the death of the Annuitant prior to the
Maturity Date, Conseco Variable will pay the death proceeds to the beneficiary.
Such payments made when the Annuitant, who is not the Contract Owner, dies do
not qualify for the death of the Contract Owner exception (described in (2)
above) and will be subject to the 10% distribution penalty unless the
beneficiary is 59 1/2 years old or one of the other exceptions to the penalty
applies.
WITHDRAWALS--QUALIFIED CONTRACTS
If you make a withdrawal from your qualified contract, a portion of the
withdrawal is treated as taxable income. This portion depends on the ratio of
the pre-tax purchase payments to the after-tax purchase payments in your
contract. If all of your purchase payments were made with pre-tax money then the
full amount of any withdrawal is includible in taxable income. Special rules may
apply to withdrawals from certain types of qualified contracts.
The Code also provides that any amount received under a qualified Contract
which is included in income may be subject to a penalty. The amount of the
penalty is equal to 10% of the amount that is includible in income. This penalty
will be increased to 25% for withdrawals from simple IRA's within the first two
years of your Contract. Some withdrawals will be exempt from the penalty. They
include any amounts:
(1) paid on or after you reach age 59 1/2;
(2) paid after you die;
(3) paid if you become totally disabled (as that term is defined in Code);
(4) paid to you after leaving your employment in a series of substantially
equal payments made annually (or more frequently) under a lifetime
annuity;
(5) paid to you after you have attained age 55 and left your employment;
(6) paid for certain allowable medical expenses (as defined in the Code);
(7) paid pursuant to a qualified domestic relations order;
(8) paid on account of an IRS levy upon the qualified contract;
(9) paid from an IRA for medical insurance (as defined in the Code);
(10) paid from an IRA for qualified higher education expenses; or
(11) up to $10,000 for qualified first time homebuyer expenses (as defined in
the Code).
The exceptions in (5) and (7) above do not apply to IRAs. The exception in
(4) above applies to IRAs but without the requirement of leaving employment.
We have provided a more complete discussion in the Statement of Additional
Information.
WITHDRAWALS--TAX-SHELTERED ANNUITIES
The Code limits the withdrawal of amounts attributable to purchase payments
made by owners under a salary reduction agreement. Withdrawals can only be made
when a Contract Owner:
(1) reaches age 59 1/2;
(2) separates from service;
(3) dies;
(4) becomes disabled (within the meaning of Section 72(m)(7) of the
Code);
(5) qualifies in case of hardship;
(6) made pursuant to a qualified domestic relations order, if otherwise
permitted.
However, in the case of hardship, the owner can only withdraw the purchase
payments and not any earnings. You should consult your own tax adviser about
your own circumstances.
DIVERSIFICATION
The Code provides that the underlying investments for a variable annuity must
satisfy certain diversification requirements in order to be treated as
an annuity contract. Conseco Variable believes that the Funds are being
managed so as to comply with the requirements.
INVESTOR CONTROL
Neither the Code nor the Internal Revenue Service Regulations issued to date
provide guidance as to the circumstances under which you, because of the degree
of control you exercise over the underlying investments, and not Conseco
Variable would be considered the owner of the shares of the portfolios. If you
are considered the owner of the shares, it will result in the loss of the
favorable tax treatment for the Contract. It is unknown to what extent under
federal tax law owners are permitted to select portfolios, to make transfers
among the portfolios or the number and type of portfolios owners may select from
without being considered the owner of the shares. If any guidance is provided
which is considered a new position, then the guidance would generally be applied
prospectively. However, if such guidance is considered not to be a new position,
it may be applied retroactively. This would mean that you, as the owner of the
Contract, could be treated as the owner of the portfolios.
Due to the uncertainty in this area, Conseco Variable reserves the right to
modify the Contract as reasonably deemed necessary to maintain favorable tax
treatment.
GENERAL MATTERS
PERFORMANCE INFORMATION. Conseco Variable may advertise performance
information for the Variable Account Investment Options (sub-accounts) from time
to time in advertisements or sales literature. Performance information reflects
only the performance of a hypothetical investment in the Variable Account
Investment Options during the particular time period on which the calculations
are based. Performance information may consist of yield, effective yield, and
average annual total return quotations reflecting the deduction of all
applicable charges for recent one-year and, when applicable, five- and 10-year
periods and, where less than 10 years, for the period subsequent to the date
each sub-account first became available for investment. We may show additional
total return quotations that do not reflect a Withdrawal Charge deduction. We
may show performance information by means of schedules, charts or graphs. The
Statement of Additional Information contains a description of the methods we use
to determine yield and total return information for the sub-accounts.
DISTRIBUTION OF CONTRACTS. Conseco Equity Sales, Inc. (Conseco Equity Sales),
11815 N. Pennsylvania Street, Carmel, IN 46032, an affiliate of Conseco
Variable, is the principal underwriter of the Contracts. Conseco Equity Sales is
a broker-dealer registered under the Securities and Exchange Act of 1934 and a
member of the National Association of Securities Dealers, Inc. Sales of the
Contracts will be made by registered representatives of Conseco Equity Sales and
broker-dealers authorized to sell the Contracts. The registered representatives
will also be licensed insurance representatives of Conseco Variable. See the
Statement of Additional Information for more information.
Commissions will be paid to broker-dealers who sell the Contracts.
Broker-dealers may be paid commissions up to 8.50% of Purchase Payments and may
include reimbursement of promotional or distribution expenses associated with
marketing the Contracts. The commission rate paid to the broker-dealer will
depend upon the nature and level of services provided by the broker-dealer.
LEGAL PROCEEDINGS. There are no legal proceedings to which the Variable
Account is a party or to which the assets of the Variable Account are subject.
Neither Conseco Variable nor Conseco Equity Sales is involved in any litigation
that is of material importance in relation to their total assets or that relates
to the Variable Account.
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
____________________________________________________________
General Information and History
Independent Accountants
Distribution
Calculation of Yield Quotations
Calculation of Total Return Quotations
Other Performance Data
Federal Tax Status
Annuity Provisions
Financial Statements
- - ------------------------------------------------------------------------------
(cut along dotted line)
________________________________________________________________________________
If you would like a free copy of the Statement of Additional Information
dated May 1, 2000 for this Prospectus, please complete this form, detach, and
mail to:
Conseco Variable Insurance Company
Administrative Office
11815 N. Pennsylvania Street
Carmel, Indiana 46032
Gentlemen:
Please send me a free copy of the Statement of Additional Information for
Conseco Variable Annuity Account E at the following address:
Name: _________________________________________________________________________
Mailing Address: ______________________________________________________________
-------------------------------------------------------------------------------
Sincerely,
-----------------------------------------------------------
(Signature)
Conseco Variable Insurance Company
________________________________________________________________________________
32
AGE>
<TABLE>
<CAPTION>
APPENDIX A
CONDENSED FINANCIAL INFORMATION
The table below provides per unit information about the financial history of
the sub-accounts for the periods indicated.
<S> <C> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995 1994
- - --------------------------------------------------------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------------------------------------------------------
CONSECO SERIES TRUST
- - --------------------------------------------------------------------------------------------------------------------------------
EQUITY (A)
Accumulation unit value at beginning of period............. $2.76 4 $2.424 $2.071 $1.449 $1.078 $1.000
Accumulation unit value at end of period................... $4.068 $2.764 $2.424 $2.071 $1.449 $1.078
Percentage change in accumulation unit value............... 47.20% 14.01% 17.04% 42.96% 34.42% 7.79%
Number of accumulation units outstanding at end of period.. 10,049,305 11,148,308 7,962,515 3,374,110 1,009,305 41,601
BALANCED (A)
Accumulation unit value at beginning of period............. $2.148 $1.973 $1.698 $1.342 $1.035 $1.000
Accumulation unit value at end of period................... $2.772 $2.148 $1.973 $1.698 $1.342 $1.035
Percentage change in accumulation unit value............... 29.04% 8.84% 16.21% 26.50% 29.67% 3.52%
Number of accumulation units outstanding at end of period.. 7,850,427 10,615,723 5,740,115 2,475,992 461,876 21,037
FIXED INCOME (A)
Accumulation unit value at beginning of period ............ $1.369 $1.308 $1.207 $1.166 $1.000 $1.000
Accumulation unit value at end of period................... $1.345 $1.369 $1.308 $1.207 $1.166 $1.000
Percentage change in accumulation unit value............... -1.77% 4.70% 8.39% 3.50% 16.61% (0.03)%
Number of accumulation units outstanding at end of period.. 5,323,180 4,326,193 4,066,812 1,540,494 350,623 12,553
GOVERNMENT SECURITIES (A)
Accumulation unit value at beginning of period............. $1.318 $1.248 $1.169 $1.154 $0.997 $1.000
Accumulation unit value at end of period................... $1.268 $1.318 $1.248 $1.169 $1.154 $0.997
Percentage change in accumulation unit value............... -3.82% 5.58% 6.76% 1.31% 15.72% (0.26)%
Number of accumulation units outstanding at end of period.. 3,757,732 1,543,011 354,897 135,680 30,614 0
MONEY MARKET (A)
Accumulation unit value at beginning of period............. $1.179 $1.136 $1.095 $1.056 $1.014 $1.000
Accumulation unit value at end of period................... $1.219 $1.179 $1.136 $1.095 $1.056 $1.014
Percentage change in accumulation unit value............... 3.43% 3.76% 3.80% 3.67% $4.14% 1.38%
Number of accumulation units outstanding at end of period.. 12,049,203 5,969,565 3,116,005 1,144,951 641,747 0
- - --------------------------------------------------------------------------------------------------------------------------------
THE ALGER AMERICAN FUND
- - --------------------------------------------------------------------------------------------------------------------------------
ALGER AMERICAN GROWTH (C)
Accumulation unit value at beginning of period............. $1.889 $1.294 $1.044 $1.000 N/A N/A
Accumulation unit value at end of period................... $2.492 $1.889 $1.294 $1.044 N/A N/A
Percentage change in accumulation unit value............... 31.89% 46.02% 24.00% 4.35% N/A N/A
Number of accumulation units outstanding at end of period.. 5,480,301 2,650,328 742,233 73,227 N/A N/A
ALGER AMERICAN LEVERAGED ALLCAP (B)
Accumulation unit value at beginning of period............ $2.857 $1.836 $1.555 $1.408 $1.000 N/A
Accumulation unit value at end of period.................. $5.016 $2.857 $1.836 $1.555 $1.408 N/A
Percentage change in accumulation unit value.............. 75.59% 55.64% 18.02% 10.47% 40.79% N/A
Number of accumulation units outstanding at end of period.. 3,739,665 1,757,689 1,279,296 832,794 207,147 N/A
ALGER AMERICAN MIDCAP GROWTH (C)
Accumulation unit value at beginning of period............. $1.438 $1.119 $0.987 $1.000 N/A N/A
Accumulation unit value at end of period................... $1.869 $1.438 $1.119 $0.987 N/A N/A
Percentage change in accumulation unit value............... 30.02% 28.49% 13.41% (1.33)% N/A N/A
Number of accumulation units outstanding at end of period.. 1,789,442 1,718,378 679,330 42,736 N/A N/A
ALGER AMERICAN SMALL CAPITALIZATION (B)
Accumulation unit value at beginning of period............. $1.567 $1.375 $1.252 $1.219 $1.000 N/A
Accumulation unit value at end of period................... $2.216 $1.567 $1.375 $1.252 $1.219 N/A
Percentage change in accumulation unit value............... 41.43% 13.92% 9.84% 2.72% 21.89% N/A
Number of accumulation units outstanding at end of period.. 5,276,834 3,775,577 3,988,448 1,946,993 517,903 N/A
- - --------------------------------------------------------------------------------------------------------------------------------
BERGER INSTITUTIONAL PRODUCTS TRUST
- - --------------------------------------------------------------------------------------------------------------------------------
BERGER IPT - Growth (C)
Accumulation unit value at beginning of period............. $1.324 $1.155 $1.029 $1.000 N/A N/A
Accumulation unit value at end of period................... $1.947 $1.324 $1.155 $1.029 N/A N/A
Percentage change in accumulation unit value............... 47.06% 14.68% 12.18% 2.93% N/A N/A
Number of accumulation units outstanding at end of period.. 1,462,281 1,458,645 627,056 69,521 N/A N/A
BERGER IPT - GROWTH AND INCOME (C)
Accumulation unit value at beginning of period............. $1.677 $1.360 $1.104 $1.000 N/A N/A
Accumulation unit value at end of period................... $2.630 $1.677 $1.360 $1.104 N/A N/A
Percentage change in accumulation unit value............... 56.84% 23.29% 23.26% 10.36% N/A N/A
Number of accumulation units outstanding at end of period.. 2,890,715 3,900,875 802,420 59,956 N/A N/A
</TABLE>
<TABLE>
<CAPTION>
================================================================================
CONDENSED FINANCIAL INFORMATION (CONTINUED)
1999 1998 1997 1996 1995 1994
- - --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BERGER IPT - SMALL COMPANY GROWTH (C)
Accumulation unit value at beginning of period............. $1.183 $1.178 $0.985 $1.000 N/A N/A
Accumulation unit value at end of period................... $2.234 $1.183 $1.178 $0.985 N/A N/A
Percentage change in accumulation unit value............... 88.79% 0.45% 19.64% (1.53)% N/A N/A
Number of accumulation units outstanding at end of period.. 1,102,900 892,905 187,471 42,982 N/A N/A
BERGER/BIAM IPT - INTERNATIONAL (C)
Accumulation unit value at beginning of period............. $1.111 $0.970 $1.000 N/A N/A N/A
Accumulation unit value at end of period................... $1.439 $1.111 $0.970 N/A N/A N/A
Percentage change in accumulation unit value............... 29.58% 14.52% -3.01% N/A N/A N/A
Number of accumulation units outstanding at end of period.. 2,081,811 2,075,531 2,029,230 N/A N/A N/A
- - ---------------------------------------------------------------------------------------------------------------------------------
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. (B)
- - ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period............. $2.268 $1.778 $1.404 $1.175 $1.000 N/A
Accumulation unit value at end of period................... $2.910 $2.268 $1.778 $1.404 $1.175 N/A
Percentage change in accumulation unit value............... 28.27% 27.58% 26.60% 19.53% 17.49% N/A
Number of accumulation units outstanding at end of period.. 3,333,181 2,868,834 1,195,614 221,018 21,878 N/A
- - ---------------------------------------------------------------------------------------------------------------------------------
DREYFUS STOCK INDEX FUND (B)
- - ---------------------------------------------------------------------------------------------------------------------------------
Accumulation unit value at beginning of period............. $2.318 $1.834 $1.393 $1.158 $1.000 N/A
Accumulation unit value at end of period................... $2.757 $2.318 $1.834 $1.393 $1.158 N/A
Percentage change in accumulation unit value............... 18.93% 26.43% 31.67% 20.31% 15.76% N/A
Number of accumulation units outstanding at end of period.. 17,965,037 13,802,783 8,884,649 1,862,980 91,752 N/A
- - ---------------------------------------------------------------------------------------------------------------------------------
FEDERATED INSURANCE SERIES
- - ---------------------------------------------------------------------------------------------------------------------------------
FEDERATED HIGH INCOME BOND II (B)
Accumulation unit value at beginning of period............. $1.367 $1.349 $1.202 $1.067 $1.000 N/A
Accumulation unit value at end of period................... $1.379 $1.367 $1.349 $1.202 $1.067 N/A
Percentage change in accumulation unit value............... 0.88% 1.27% 12.25% 12.71% 6.66% N/A
Number of accumulation units outstanding at end of period.. 3,165,626 4,956,911 2,184,739 508,205 26,380 N/A
FEDERATED INTERNATIONAL EQUITY II (B)
Accumulation unit value at beginning of period............. $1.472 $1.188 $1.095 $1.025 $1.000 N/A
Accumulation unit value at end of period................... $2.683 $1.472 $1.888 $1.095 $1.025 N/A
Percentage change in accumulation unit value............... 82.32% 23.83% 8.55% 6.80% 2.51% N/A
Number of accumulation units outstanding at end of period.. 645,821 1,216,876 329,971 93,215 36,798 N/A
FEDERATED UTILITY II (B)
Accumulation unit value at beginning of period............. $1.732 $1.541 $1.234 $1.122 $1.000 N/A
Accumulation unit value at end of period................... $1.737 $1.732 $1.541 $1.234 $1.122 N/A
Percentage change in accumulation unit value............... 0.28% 12.37% 24.88% 10.00% 12.21% N/A
Number of accumulation units outstanding at end of period.. 1,632,264 1,955,544 675,836 294,882 11,711 N/A
- - ---------------------------------------------------------------------------------------------------------------------------------
JANUS ASPEN SERIES
- - ---------------------------------------------------------------------------------------------------------------------------------
AGGRESSIVE GROWTH (B)
Accumulation unit value at beginning of period............ $1.983 $1.498 $1.348 $1.266 $1.000 N/A
Accumulation unit value at end of period.................. $4.407 $1.983 $1.498 $1.348 $1.266 N/A
Percentage change in accumulation unit value.............. 122.28% 32.39% 11.10% 6.44% 26.64% N/A
Number of accumulation units outstanding at end of period.. 3,617,753 2,503,351 1,867,131 1,041,050 122,278 N/A
GROWTH (B)
Accumulation unit value at beginning of period............. $2.208 $1.650 $1.364 $1.167 $1.000 N/A
Accumulation unit value at end of period................... $3.135 $2.208 $1.650 $1.364 $1.167 N/A
Percentage change in accumulation unit value............... 41.98% 33.77% 21.00% 16.79% 16.75% N/A
Number of accumulation units outstanding at end of period.. 10,090,318 5,285,448 5,160,718 1,466,042 138,532 N/A
WORLDWIDE GROWTH (B)
Accumulation unit value at beginning of period............. $2.360 $1.856 $1.541 $1.211 $1.000 N/A
Accumulation unit value at end of period................... $3.827 $2.360 $1.856 $1.541 $1.211 N/A
Percentage change in accumulation unit value............... 62.17% 27.13% 20.46% 27.23% 21.12% N/A
Number of accumulation units outstanding at end of period.. 12,380,622 11,703,338 8,234,605 2,173,781 155,653 N/A
- - ---------------------------------------------------------------------------------------------------------------------------------
THE VAN ECK WORLDWIDE INSURANCE TRUST
- - ---------------------------------------------------------------------------------------------------------------------------------
WORLDWIDE BOND (B)
Accumulation unit value at beginning of period............. $1.155 $1.039 $1.029 $1.018 $1.000 N/A
Accumulation unit value at end of period................... $1.050 $1.155 $1.039 $1.029 $1.018 N/A
Percentage change in accumulation unit value............... -9.10% 11.19% 0.96% 1.09% 1.82% N/A
Number of accumulation units outstanding at end of period.. 2,183,729 2,826,107 3,332,067 1,790,259 130,071 N/A
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
CONDENSED FINANCIAL INFORMATION (CONTINUED)
1999 1998 1997 1996 1995 1994
- - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WORLDWIDE EMERGING MARKETS (C)
Accumulation unit value at beginning of period............. $0.643 $0.990 $1.136 $1.000 N/A N/A
Accumulation unit value at end of period................... $1.270 $0.643 $0.990 $1.136 N/A N/A
Percentage change in accumulation unit value............... 97.51% -35.06% -12.83% 13.59% N/A N/A
Number of accumulation units outstanding at end of period.. 1,845,367 1,728,988 1,935,325 132,953 N/A N/A
WORLDWIDE HARD ASSETS (B)
Accumulation unit value at beginning of period............. $0.828 $1.216 $1.254 $1.077 $1.000 N/A
Accumulation unit value at end of period................... $0.988 $0.828 $1.216 $1.254 $1.077 N/A
Percentage change in accumulation unit value............... 19.32% -31.89% -3.05% 16.41% 7.72% N/A
Number of accumulation units outstanding at end of period.. 1,426,278 1,485,880 3,728,758 651,603 68,730 N/A
WORLDWIDE REAL ESTATE (E)
Accumulation unit value at beginning of period............. $0.851 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period................... $0.823 $0.851 N/A N/A N/A N/A
Percentage change in accumulation unit value............... -3.38% -14.90% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period.. 80,035 41,417 N/A N/A N/A N/A
- - ---------------------------------------------------------------------------------------------------------------------------------
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
- - ---------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL (D)
Accumulation unit value at beginning of period............. $1.280 $1.093 $1.000 N/A N/A N/A
Accumulation unit value at end of period................... $2.071 $1.280 $1.093 N/A N/A N/A
Percentage change in accumulation unit value............... 61.77% 17.11% 9.30% N/A N/A N/A
Number of accumulation units outstanding at end of period.. 1,258,066 1,104,956 163,370 N/A N/A N/A
VALUE (D)
Accumulation unit value at beginning of period............. $1.267 $1.226 $1.000 N/A N/A N/A
Accumulation unit value at end of period................... $1.239 $1.267 $1.226 N/A N/A N/A
Percentage change in accumulation unit value............... -2.23% 3.35% 22.60% N/A N/A N/A
Number of accumulation units outstanding at end of period.. 3,004,509 2,689,736 415,891 N/A N/A N/A
INCOME & GROWTH (E)
Accumulation unit value at beginning of period............. $1.082 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period................... $1.259 $1.082 N/A N/A N/A N/A
Percentage change in accumulation unit value............... 16.38% 8.20% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period.. 746,541 214,243 N/A N/A N/A N/A
- - ---------------------------------------------------------------------------------------------------------------------------------
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
- - ---------------------------------------------------------------------------------------------------------------------------------
LIMITED MATURITY BOND (D)
Accumulation unit value at beginning of period............. $1.074 $1.043 $1.000 N/A N/A N/A
Accumulation unit value at end of period................... $1.075 $1.074 $1.043 N/A N/A N/A
Percentage change in accumulation unit value............... 0.07% 2.94% 4.31% N/A N/A N/A
Number of accumulation units outstanding at end of period.. 1,194,491 1,076,377 25,089 N/A N/A N/A
PARTNERS (D)
Accumulation unit value at beginning of period............. $1.274 $1.240 $1.000 N/A N/A N/A
Accumulation unit value at end of period................... $1.349 $1.274 $1.240 N/A N/A N/A
Percentage change in accumulation unit value............... 5.88% 2.76% 23.99% N/A N/A N/A
Number of accumulation units outstanding at end of period.. 3,981,862 6,369,007 1,000,600 N/A N/A N/A
- - ---------------------------------------------------------------------------------------------------------------------------------
STRONG OPPORTUNITY FUND II, INC.
- - ---------------------------------------------------------------------------------------------------------------------------------
OPPORTUNITY FUND II (D)
Accumulation unit value at beginning of period............. $1.377 $1.230 $1.000 N/A N/A N/A
Accumulation unit value at end of period................... $1.832 $1.377 $1.230 N/A N/A N/A
Percentage change in accumulation unit value............... 33.03% 11.96% 22.99% N/A N/A N/A
Number of accumulation units outstanding at end of period.. 984,899 1,264,364 248,615 N/A N/A N/A
- - ---------------------------------------------------------------------------------------------------------------------------------
STRONG VARIABLE INSURANCE FUNDS, INC.
- - ---------------------------------------------------------------------------------------------------------------------------------
STRONG MID CAP GROWTH II (D)
Accumulation unit value at beginning of period ............ $1.612 $1.270 $1.000 N/A N/A N/A
Accumulation unit value at end of period................... $3.018 $1.612 $1.270 N/A N/A N/A
Percentage change in accumulation unit value............... 87.24% 26.89% 27.01% N/A N/A N/A
Number of accumulation units outstanding at end of period.. 1,457,235 559,106 79,815 N/A N/A N/A
- - ---------------------------------------------------------------------------------------------------------------------------------
DREYFUS VARIABLE INVESTMENT FUND
- - ---------------------------------------------------------------------------------------------------------------------------------
DREYFUS VIF DISCIPLINED STOCK (E)
Accumulation unit value at beginning of period............. $1.072 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period................... $1.252 $1.072 N/A N/A N/A N/A
Percentage change in accumulation unit value............... 16.80% 7.19% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period.. 332,231 273,971 N/A N/A N/A N/A
</TABLE>
================================================================================
CONDENSED FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995 1994
- - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
DREYFUS VIF INTERNATIONAL VALUE (E)
Accumulation unit value at beginning of period............. $0.942 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period................... $1.187 $0.942 N/A N/A N/A N/A
Percentage change in accumulation unit value............... 26.04% -5.83% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period.. 85,252 47,625 N/A N/A N/A N/A
- - ---------------------------------------------------------------------------------------------------------------------------------
INVESCO VARIABLE INVESTMENT FUNDS, INC.
- - ---------------------------------------------------------------------------------------------------------------------------------
INVESCO VIF-HIGH YIELD (E)
Accumulation unit value at beginning of period............. $0.951 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period................... $1.024 $0.951 N/A N/A N/A N/A
Percentage change in accumulation unit value............... 7.68% -4.94% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period.. 4,745,256 149,344 N/A N/A N/A N/A
INVESCO VIF-EQUITY INCOME (E)
Accumulation unit value at beginning of period............. $1.029 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period................... $1.166 $1.029 N/A N/A N/A N/A
Percentage change in accumulation unit value............... 13.25% 2.93% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period.. 492,760 141,540 N/A N/A N/A N/A
- - ---------------------------------------------------------------------------------------------------------------------------------
LAZARD RETIREMENT SERIES, INC.
- - ---------------------------------------------------------------------------------------------------------------------------------
LAZARD RETIREMENT EQUITY (E)
Accumulation unit value at beginning of period............. $1.055 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period................... $1.126 $1.055 N/A N/A N/A N/A
Percentage change in accumulation unit value............... 6.66% 5.53% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period.. 899,537 1,126,898 N/A N/A N/A N/A
LAZARD RETIREMENT SMALL CAP (E)
Accumulation unit value at beginning of period............ $0.855 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period.................. $0.887 $0.855 N/A N/A N/A N/A
Percentage change in accumulation unit value............... 3.67% -14.46% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period.. 215,218 174,151 N/A N/A N/A N/A
- - ---------------------------------------------------------------------------------------------------------------------------------
LORD ABBETT SERIES FUND, INC.
- - ---------------------------------------------------------------------------------------------------------------------------------
GROWTH & INCOME (E)
Accumulation unit value at beginning of period............ $1.005 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period.................. $1.156 $1.005 N/A N/A N/A N/A
Percentage change in accumulation unit value.............. 15.12% 0.46% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period.. 793,511 312,997 N/A N/A N/A N/A
- - ---------------------------------------------------------------------------------------------------------------------------------
MITCHELL HUTCHINS SERIES TRUST
- - ---------------------------------------------------------------------------------------------------------------------------------
GROWTH & INCOME (E)
Accumulation unit value at beginning of period............. $0.990 $1.000 N/A N/A N/A N/A
Accumulation unit value at end of period................... $1.077 $0.990 N/A N/A N/A N/A
Percentage change in accumulation unit value............... 8.80% -1.02% N/A N/A N/A N/A
Number of accumulation units outstanding at end of period.. 71,829 197,925 N/A N/A N/A N/A
- - ---------------------------------------------------------------------------------------------------------------------------------
- - ----------
(A) Inception date was July 25, 1994.
(B) Inception date was June 1, 1995.
(C) Inception date was May 1, 1996.
(D) Inception date was May 1, 1997.
(E) Inception date was May 1, 1998.
There are no accumulation unit values shown for the following sub-accounts
because they were not available under your Contract until the date of this
prospectus: Conseco 20 Focus; Conseco High Yield; Berger IPT-New Generation;
Rydex OTC; Rydex Nova; Seligman Communications and Information; and Seligman
Global Technology.
</TABLE>
APPENDIX B
MORE INFORMATION ABOUT THE FUNDS
Below are the investment objectives and strategies of each portfolio available
under the Contract. THERE CAN BE NO ASSURANCE THAT THE INVESTMENT OBJECTIVES
WILL BE ACHIEVED.
The Fund prospectuses contain more complete information including a description
of the investment objectives, policies, restrictions and risks of each
portfolio.
CONSECO SERIES TRUST
Conseco Series Trust is managed by Conseco Capital Management, Inc. (CCM) which
is an affiliate of Conseco Variable. Conseco Series Trust is a mutual fund
with multiple portfolios. The following portfolios are available under the
Contracts:
Conseco 20 Focus Portfolio
The Conseco 20 Focus Portfolio seeks capital appreciation. Normally, the
Portfolio will invest at least 65% of its assets in common stocks of companies
that the Adviser believes have above-average growth prospects. The Portfolio
is non-diversified and will normally concentrate its investments in a core
position of approximately 20 - 30 common stocks.
Equity Portfolio
The Equity Portfolio seeks to provide a high total return consistent with
preservation of capital and a prudent level of risk. The portfolio will invest
primarily in selected equity securities, including common stocks and other
securities having the investment characteristics of common stocks, such as
convertible securities and warrants.
Balanced Portfolio
The Balanced Portfolio seeks a high total investment return, consistent with the
preservation of capital and prudent investment risk. Normally, the portfolio
invests approximately 50-65% of its assets in equity securities, and the
remainder in a combination of fixed income securities, or cash equivalents.
High Yield Portfolio
The High Yield Portfolio seeks to provide a high level of current income with a
secondary objective of capital appreciation. Normally, the adviser invests at
least 65% of the Portfolio's assets in below investment grade securities
(those rated BB+/Ba1 or lower by independent rating agencies).
Fixed Income Portfolio
The Fixed Income Portfolio seeks the highest level of income consistent with
preservation of capital. The portfolio invests primarily in investment grade
debt securities.
Government Securities Portfolio
The Government Securities Portfolio seeks safety of capital, liquidity and
current income. The portfolio will invest primarily in securities issued by the
U.S. government or an agency or instrumentality of the U.S. government.
Money Market Portfolio
The Money Market Portfolio seeks current income consistent with stability of
capital and liquidity. The portfolio may invest in U.S. government securities,
bank obligations, commercial paper obligations, short-term corporate debt
securities, and municipal obligations.
THE ALGER AMERICAN FUND
The Alger American Fund is a mutual fund with multiple portfolios. The
manager of the fund is Fred Alger Management, Inc. The following
portfolios are available under the Contracts:
Alger American Growth Portfolio
The Alger American Growth Portfolio seeks long-term capital appreciation.
It focuses on growing companies that generally have broad product lines,
markets, financial resources and depth of management. Under normal
circumstances, the portfolio invests primarily in the equity securities
of large companies.
Alger American Leveraged AllCap Portfolio
The Alger American Leveraged AllCap Portfolio seeks long-term capital
appreciation. Under normal circumstances, the portfolio invests in the
equity securities of companies of any size which demonstrate promising
growth potential. The portfolio can borrow money in amounts of up to one-
third of its total assets to buy additional securities.
Alger American MidCap Growth Portfolio
The Alger American MidCap Growth Portfolio seeks long-term capital
appreciation. It focuses on midsize companies with promising growth
potential. Under normal circumstances, the portfolio invests primarily in
the equity securities of companies having a market capitalization within
the range of companies in the S&P MidCap 400 Index.
Alger American Small Capitalization Portfolio
The Alger American Small Capitalization Portfolio seeks long-term capital
appreciation. It focuses on small, fast-growing companies that offer
innovative products, services or technologies to a rapidly expanding
marketplace. Under normal circumstances, the portfolio invests primarily
in the equity securities of small capitalization companies.
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
American Century Variable Portfolios, Inc. is a mutual fund with multiple
portfolios. The fund's investment adviser is American Century Investment
Management, Inc. The following portfolios are available under the
Contracts:
VP Income & Growth Fund
The VP Income & Growth Fund seeks dividend growth, current income and
capital appreciation by investing in common stocks. The fund's investment
strategy utilizes quantitative management techniques in a two-step process
that draws heavily on computer technology.
VP International Fund
The VP International Fund seeks capital growth. The fund managers use a
growth investment strategy developed by American Century to invest in
stocks of companies that they believe will increase in value over time.
This strategy looks for companies with earnings and revenue growth.
International investment involves special risk considerations. These
include economic and political conditions, expected inflation rates and
currency fluctuations.
VP Value Fund
The VP Value Fund seeks long-term capital growth. Income is a secondary
objective. In selecting stocks for the VP Value Fund, the fund managers
look for stocks of medium to large companies that they believe are
undervalued at the time of purchase.
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger Institutional Products Trust is a mutual fund with multiple
portfolios. Berger LLC (formerly, Berger Associates, Inc.) is the investment
advisor for the Berger IPT-Growth Fund, the Berger IPT-Growth and Income
Fund, the Berger IPT-Small Company Growth Fund and the Berger IPT-New
Generation Fund. BBOI Worldwide LLC, a joint venture between Berger LLC and
Bank of Ireland Asset Management (U.S.) Limited (BIAM), is the investment
advisor for the Berger/BIAM IPT-International Fund. BBOI Worldwide LLC has
delegated daily management of the Fund to BIAM. Berger LLC and BIAM have
entered into an agreement to dissolve BBOI Worldwide LLC. The dissolution of
BBOI Worldwide LLC will have no effect on the investment advisory services
provided to the Fund. Contingent upon shareholder approval, when BBOI
Worldwide LLC is dissolved, Berger LLC will become the Fund's advisor and
BIAM will continue to be responsible for day-to-day management of the Fund's
portfolio as sub-advisor. If approved by shareholders, these advisory
changes are expected to take place in the first half of this year. The
following portfolios are available under the contract:
Berger IPT-Growth Fund (formerly, Berger IPT -100 Fund)
The Berger IPT-Growth Fund aims for long-term capital appreciation. In
pursuing that goal, the fund primarily invests in the common stocks of
established companies with the potential for strong earnings growth.
Berger IPT-Growth and Income Fund
The Berger IPT-Growth and Income Fund aims for capital appreciation and has a
secondary goal of investing in securities that produce current income for the
portfolio. In pursuing these goals, the fund primarily invests in the
securities of well-established, growing companies.
Berger IPT-Small Company Growth Fund
The Berger IPT-Small Company Growth Fund aims for capital appreciation. In
pursuing that goal, the fund primarily invests in the common stocks of small
companies with the potential for rapid earnings growth.
Berger IPT - New Generation Fund
The Berger IPT - New Generation Fund seeks capital appreciation. In
pursuing that goal, the Fund primarily invests in the common stocks of
companies believed to have the potential to change the direction or dynamics
of the industries in which they operate or significantly influence the way
businesses or consumers conduct their affairs.
Berger/BIAM IPT-International Fund
The Berger/BIAM IPT-International Fund aims for long-term capital
appreciation. In pursuing that goal, the fund primarily invests in a
portfolio consisting of common stocks of well-established foreign
companies.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
The Dreyfus Socially Responsible Growth Fund, Inc. is a mutual fund. The
investment adviser for the fund is The Dreyfus Corporation.
The Dreyfus Socially Responsible Growth Fund, Inc. seeks to provide capital
growth, with current income as a secondary goal. To pursue these goals, the
fund invests primarily in the common stock of companies that, in the opinion
of the fund's management, meet traditional investment standards and conduct
their business in a manner that contributes to the enhancement of the quality
of life in America.
DREYFUS STOCK INDEX FUND
The Dreyfus Stock Index Fund is a mutual fund. The investment adviser for the
fund is The Dreyfus Corporation.
The Dreyfus Stock Index Fund seeks to match the total return of the Standard &
Poor's 500 Composite Stock Price Index. To pursue this goal, the fund generally
invests in all 500 stocks in the S&P 500 in proportion to their weighting in the
index.
DREYFUS VARIABLE INVESTMENT FUND
The Dreyfus Variable Investment Fund ("Dreyfus VIF") is a mutual fund with
multiple portfolios. The investment adviser for the portfolios is The Dreyfus
Corporation. The following portfolios are available under the Contracts:
Dreyfus VIF Disciplined Stock Portfolio
The Dreyfus VIF Disciplined Stock Portfolio seeks investment returns (consisting
of capital appreciation and income) that are greater than the total return
performance of stocks represented by the Standard & Poor's 500 Composite Stock
Price Index. To pursue this goal, the portfolio invests in a blended portfolio
of growth and value stocks chosen through a disciplined investment process.
Dreyfus VIF International Value Portfolio
The Dreyfus VIF International Value Portfolio seeks long-term capital growth. To
pursue this goal, the portfolio ordinarily invests most of its assets in equity
securities of foreign issuers which Dreyfus considers to be "value" companies.
FEDERATED INSURANCE SERIES
Federated Insurance Series is a mutual fund with multiple portfolios. Federated
Investment Management Company is the adviser to the Federated High Income Bond
Fund II and the Federated Utility Fund II. Federated Global Investment
Management Corp. is the adviser to the Federated International Equity Fund II.
The following portfolios are available under the Contracts:
Federated High Income Bond Fund II
The Federated High Income Bond Fund II's investment objective is to seek high
current income by investing primarily in a professionally managed, diversified
portfolio of fixed income securities. The fund pursues its investment objective
by investing in a diversified portfolio of high-yield, lower-rated corporate
bonds.
Federated Utility Fund II
The Federated Utility Fund II's investment objective is to achieve high current
income and moderate capital appreciation. The fund pursues its investment
objective by investing under normal market conditions, at least 65% of its
assets in equity securities (including convertible securities) of companies
that derive at least 50% of their revenues from the provision of electricity,
gas and telecommunications related services.
Federated International Equity Fund II
The Federated International Equity Fund II's investment objective is to obtain a
total return on its assets. The fund's total return will consist of two
components: (1) changes in the market value of its portfolio securities (both
realized and unrealized appreciation); and (2) income received from its
portfolio securities.
INVESCO VARIABLE INVESTMENT FUNDS, INC. (not available for new sales as of
May 1, 2000)
INVESCO Variable Investment Funds, Inc. is a mutual fund with multiple
portfolios. INVESCO Funds Group, Inc. is the investment adviser for the Fund.
The following portfolios are available under the Contracts:
INVESCO VIF - Equity Income Fund
The INVESCO VIF - Equity Income Fund's primary goal is high current income, with
growth of capital as a secondary objective. The fund normally invests at least
65% of its assets in dividend-paying common and preferred stocks, although in
recent years that percentage has been somewhat higher.
INVESCO VIF - High Yield Fund
The INVESCO VIF - High Yield Fund seeks to provide a high level of current
income, with growth of capital as a secondary objective. It invests
substantially all of its assets in lower-rated debt securities, commonly
called "junk bonds" and preferred stock, including securities issued by
foreign companies.
JANUS ASPEN SERIES
Janus Aspen Series is a mutual fund with multiple portfolios. Janus Capital
Corporation is the investment adviser to the fund. The following portfolios
are available under your Contracts:
Aggressive Growth Portfolio
The Aggressive Growth Portfolio seeks long-term growth of capital. It
pursues its objective by investing primarily in common stocks selected for
their growth potential, and normally invests at least 50% of its equity
assets in medium-sized companies.
Growth Portfolio
The Growth Portfolio seeks long-term growth of capital in a manner
consistent with the preservation of capital. It pursues its objective by
investing primarily in common stocks selected for their growth potential.
Although the Portfolio can invest in companies of any size, it generally
invests in larger, more established companies.
Worldwide Growth Portfolio
The Worldwide Growth Portfolio seeks long-term growth of capital in a manner
consistent with the preservation of capital. It pursues its objective by
investing primarily in common stocks of companies of any size throughout the
world. The portfolio normally invests in issuers from at least five different
countries, including the United States. The portfolio may at times invest in
fewer than five countries or even a single country.
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Series, Inc. is a mutual fund with multiple portfolios.
Lazard Asset Management serves as the investment manager of the portfolios.
The investment manager is a division of Lazard Freres, a New York limited
liability company, which is registered as an investment adviser with the SEC.
The following portfolios are available under the Contracts:
Lazard Retirement Equity Portfolio
The Lazard Retirement Equity Portfolio seeks long-term capital
appreciation. The portfolio invests primarily in equity securities,
principally common stocks, of relatively large U.S. companies (those whose
total market value is more than $1 billion) that the investment manager
believes are undervalued based on their earnings, cash flow or asset values.
Lazard Retirement Small Cap Portfolio
The Lazard Retirement Small Cap Portfolio seeks long-term capital
appreciation. The portfolio invests primarily in equity securities,
principally common stocks, of relatively small U.S. companies in the range
of the Russell 2000 Index that the investment manager believes are
undervalued based on their earnings, cash flow or asset values.
LORD ABBETT SERIES FUND, INC.
Lord Abbett Series Fund, Inc. is a mutual fund with multiple portfolios.
The fund's investment adviser is Lord, Abbett & Co. The following portfolio
is available under
the Contracts:
Growth & Income Portfolio
The Growth & Income Portfolio's investment objective is long-term growth of
capital and income without excessive fluctuations in market value.
MITCHELL HUTCHINS SERIES TRUST
Mitchell Hutchins Series Trust is a mutual fund with multiple portfolios.
Mitchell Hutchins Asset Management Inc. is the investment adviser of the
fund. The following portfolio is available under the Contracts:
Growth and Income Portfolio
The Growth and Income Portfolio's investment objective is current income
and capital growth. The portfolio invests primarily in dividend-paying
stocks of companies that its investment adviser believes have potential
for rapid earnings growth.
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
Neuberger Berman Advisers Management Trust is a mutual fund with multiple
portfolios. Neuberger Berman Management Inc. is the investment adviser.
The following portfolios are available under the Contracts:
Limited Maturity Bond Portfolio
The Limited Maturity Bond Portfolio seeks the highest available current
income consistent with liquidity and low risk to principal; total return
is a secondary goal. To pursue these goals, the portfolio invests mainly
in investment-grade bonds and other debt securities from U.S. government
and corporate issuers. These may include mortgage- and asset-backed
securities.
Partners Portfolio
The Partners Portfolio seeks growth of capital. To pursue this goal, the
portfolio invests mainly in common stocks of mid- to large-capitalization
companies. The managers look for well-managed companies whose stock prices
are believed to be undervalued.
RYDEX VARIABLE TRUST
Rydex Variable Trust is a mutual fund with multiple portfolios which are
managed by PADCO Advisors II, Inc. The following portfolios are available under
the contract:
OTC Fund
The OTC Fund seeks to provide investment results that correspond to a
benchmark for over-the-counter securities. The Fund's current benchmark
is the NASDAQ 100 Index . The Fund invests principally in securities
of companies included in the NASDAQ 100 Index. It also may invest in
other instruments whose performance is expected to correspond to that
of the Index, and may engage in futures and options transactions.
Nova Fund
The Nova Fund seeks to provide investment returns that correspond to
150% of the daily performance of the Standard & Poor's 500 Composite
Stock Price Index. Unlike traditional index funds, as its primary
investment strategy, the Fund invests to a significant extent in
futures contracts and options on: securities, futures contracts and
stock indexes. On a day-to-day basis, the Fund holds US government
securities to collateralize these futures and options contracts.
SELIGMAN PORTFOLIOS, INC.
Seligman Portfolios, Inc. is a mutual fund with multiple portfolios which are
managed by J. & W. Seligman & Co. Incorporated. The following portfolios are
available under the Contracts:
Seligman Communications and Information Portfolio
The Seligman Communications and Information Portfolio seeks capital gain.
The Portfolio invests at least 80% of its net assets, exclusive of government
securities, short-term notes, and cash and cash equivalents, in securities of
companies operating in the communications, information and related industries.
The Portfolio generally invests at least 65% of its total assets in securities
of companies engaged in these industries. The Portfolio may invest in
companies of any size.
Seligman Global Technology Portfolio
The Seligman Global Technology Portfolio seeks long-term capital
appreciation. The Portfolio generally invests at least 65% of its assets
in equity securities of US and non-US companies with business operations
in technology and technology-related industries. The Portfolio may invest
in companies of any size.
STRONG OPPORTUNITY FUND II, INC.
Strong Opportunity Fund II, Inc. is a mutual fund. Strong Capital Management,
Inc. is the investment advisor for the fund. The following portfolio is
available under the Contracts:
Opportunity Fund II
The Opportunity Fund II seeks capital growth. The fund invests primarily in
stocks of medium-capitalization companies that the fund's manager believes are
underpriced, yet have attractive growth prospects.
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Variable Insurance Funds, Inc. is a mutual fund. Strong Capital
Management, inc. is the investment advisor for the fund. The following
portfolio is available under the Contracts:
Mid-Cap Growth Fund II
The Mid-Cap Growth Fund II seeks capital appreciation. The fund invests at
least 65% of its assets in stocks of medium-capitalization companies that the
fund's managers believe have favorable prospects for accelerating growth of
earnings, cash flow, or asset value.
VAN ECK WORLDWIDE INSURANCE TRUST
Van Eck Worldwide Insurance Trust is a mutual fund with multiple portfolios.
Van Eck Associates Corporation serves as investment adviser to the funds. The
following portfolios are available under the Contracts:
Worldwide Bond Fund
The Worldwide Bond Fund seeks high total return income plus capital
appreciation by investing globally, primarily in a variety of debt
securities. The fund's long-term assets will consist of debt securities
rated B or better by Standard & Poor's or Moody's Investors' Service.
Worldwide Emerging Markets Fund
The Worldwide Emerging Markets Fund seeks long-term capital appreciation
by investing in equity securities in emerging markets around the world.
The fund emphasizes investment in countries that have relatively low gross
national product per capita, as well as the potential for rapid economic
growth.
Worldwide Hard Assets Fund
The Worldwide Hard Assets Fund seeks long-term capital appreciation by
investing primarily in "hard asset securities." Income is a secondary
consideration.
Worldwide Real Estate Fund
The Worldwide Real Estate Fund seeks a high total return by investing in
equity securities of companies that own significant real estate or that
principally do business in real estate.
PART B
STATEMENT OF ADDITIONAL INFORMATION
INDIVIDUAL & GROUP VARIABLE DEFERRED ANNUITY CONTRACTS
issued by
CONSECO VARIABLE INSURANCE COMPANY
and
CONSECO VARIABLE ANNUITY ACCOUNT E
11815 N. PENNSYLVANIA ST., CARMEL, IN 46032
(317) 817-3700
MAY 1, 2000
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. IT SHOULD BE READ
IN CONJUNCTION WITH THE PROSPECTUS DATED MAY 1, 2000 FOR CONSECO VARIABLE
ANNUITY ACCOUNT E -- INDIVIDUAL AND GROUP VARIABLE DEFERRED ANNUITY CONTRACTS.
YOU CAN OBTAIN A COPY OF THE PROSPECTUS BY CONTACTING CONSECO VARIABLE INSURANCE
COMPANY AT THE ADDRESS TELEPHONE NUMBER GIVEN ABOVE.
TABLE OF CONTENTS
PAGE
GENERAL INFORMATION AND HISTORY......................................
INDEPENDENT ACCOUNTANTS..............................................
DISTRIBUTION..........................................................
VOTING RIGHTS........................................................
CALCULATION OF YIELD QUOTATIONS.......................................
CALCULATION OF TOTAL RETURN QUOTATIONS................................
OTHER PERFORMANCE DATA................................................
FEDERAL TAX STATUS ...................................................
ANNUITY PROVISIONS ...................................................
FINANCIAL STATEMENTS..................................................
GENERAL INFORMATION AND HISTORY
Conseco Variable Insurance Company (the "Company") is an indirect wholly owned
subsidiary of Conseco, Inc. On or about October 7, 1998, the Company changed its
name from Great American Reserve Insurance Company to its present name. In
certain states, the Company may continue to use the name Great American Reserve
Insurance Company until the name change is approved in that state. Conseco, Inc.
is a publicly held financial services holding company and one of middle
America's leading sources for insurance, investment and lending products. The
Company has its principal offices at 11815 N. Pennsylvania Street, Carmel,
Indiana 46032. The Variable Account wasestablished by the Company.
INDEPENDENT ACCOUNTANTS
The financial statements of Conseco Variable Annuity Account E and Conseco
Variable Insurance Company included in the Prospectus and the Statement of
Additional Information have been examined by PricewaterhouseCoopers LLP,
independent accountants, for the periods indicated in their reports as stated in
their opinion and have been so included in reliance upon such opinion given upon
the authority of that firm as experts in accounting and auditing.
DISTRIBUTION
The Company continuously offers the Contracts through associated persons of the
principal underwriter for the Variable Account, Conseco Equity Sales, Inc.
("CES"). CES is a registered broker-dealer and member of the National
Association of Securities Dealers, Inc. CES is located at 11815 N. Pennsylvania
Street, Carmel, Indiana 46032, and is an affiliate of the Company. In addition,
certain Contracts may be sold by life insurance/registered representatives of
other registered broker-dealers.
CES performs the sales functions relating to the Contracts and the Company
provides all administrative services. To cover the sales expenses and
administrative expenses (including such items as salaries, rent, postage,
telephone, travel, legal, actuarial, audit, office equipment and printing), the
Company makes sales and administrative deductions, varying by type of Contract.
See "Charges and Deductions" in the Prospectus.
VOTING RIGHTS
Contract Owners may instruct the Company as to the voting of Fund shares
attributable to their respective interests under the Contracts at meetings of
shareholders of the Funds. Contract Owners entitled to vote will receive proxy
material and a form on which voting instructions may be given. The Company will
vote the shares of each sub-account held by the Variable Account attributable to
the Contracts in accordance with instructions received from Contract Owners.
Shares held in each sub-account for which timely instructions have not been
received from Contract Owners will be voted by the Company for or against any
proposition or the Company will abstain, in the same proportion as shares in
that sub-account for which instructions are received. The Company will vote, or
abstain from voting, any shares that are not attributable to Contract Owners in
the same proportion as all Contract Owners in the Variable Account vote or
abstain. However, if the Company determines that it is permitted to vote such
shares of the Funds in its own right, it may elect to do so, subject to the
then-current interpretation of the 1940 Act and the rules thereunder.
Under certain Contracts, not including contracts issued in connection with
governmental employers' deferred compensation plans described in the Prospectus,
participants and annuitants have the right to instruct the Contract Owner with
respect to the number of votes attributable to their Individual Accounts. Votes
attributable to participants and annuitants who do not instruct the Contract
Owner will be cast by the Contract Owner for or against each proposal to be
voted upon, in the same proportion as votes for which instructions have been
received. Participants and annuitants entitled to instruct the casting of votes
will receive a notice of each meeting of Contract Owners, and proxy solicitation
materials, and a statement of the number of votes attributable to their
participation under the Contract.
The number of shares held in a sub-account deemed attributable to a Contract
Owner's interest under a Contract will be determined on the basis of the value
of the Accumulation Units credited to the Contract Owner's account as of the
record date. On or after the Maturity Date, the number of attributable shares
will be based on the amount of assets held to meet annuity obligations to the
payee under the Contract as of the record date. On or after the Maturity Date,
the number of votes attributable to a Contract will generally decrease since
funds set aside for annuitants will decrease as payments are made.
CALCULATION OF YIELD QUOTATIONS
MONEY MARKET SUB-ACCOUNT
The Money Market Sub-account's standard yield quotations may appear in sales
material and advertising as calculated by the standard method prescribed by
rules of the Securities and Exchange Commission. Under this method, the yield
quotation is based on a seven-day period and computed as follows: The Money
Market Sub-account's daily net investment factor, minus one (1.00) is multiplied
by 365 to produce an annualized yield. The annualized yield of the seven-day
period are then averaged and carried to the nearest one-hundredth of one
percent. This yield reflects investment results less deductions for investment
advisory fees, mortality and expense risk fees and the administrative charge,
but does not include a deduction of any applicable annual administrative fees.
Because of these deductions, the yield for the Money Market Sub-account will be
lower than the yield for the corresponding Fund of the Conseco Series Trust.
The Money Market Sub-account's effective yield may appear in sales material and
advertising for the same seven-day period, determined on a compound basis. The
effective yield is calculated by compounding the unannualized base period return
by adding one to the base period return, raising the sum to a power equal to 365
divided by 7, and subtracting one from the result.
The yield on the Money Market Sub-account will generally fluctuate on a daily
basis. Therefore, the yield for any given past period is not an indication or
representation of future yields or rates of return. The actual yield is affected
by changes in interest rates on money market securities, average Sub-account
maturity, the types and quality of Portfolio securities held by the
corresponding Fund of the Conseco Series Trust and its operating expenses.
OTHER SUB-ACCOUNTS
The Portfolios of the eligible Funds may advertise investment performance
figures, including yield. Each Sub-account's yield will be based upon a stated
30-day period and will be computed by dividing the net investment income per
accumulation unit earned during the period by the maximum offering price per
accumulation unit on the last day of the period, according to the following
formula:
YIELD = 2 ((A - B) + 1)6 - 1)
-----
CD
Where:
A = the net investment income earned during the period by the Portfolio.
B = the expenses accrued for the period (net of reimbursements, if any).
C = the average daily number of accumulation units outstanding during the
period.
D = the maximum offering price per accumulation unit on the last day of the
period.
CALCULATION OF TOTAL RETURN QUOTATIONS
The Company may include certain total return quotations for one or more of the
Portfolios of the eligible Funds in advertising, sales literature or reports to
Contract Owners or prospective purchasers. Such total return quotations will be
expressed as the average annual rate of total return over one-, five-and 10-year
periods ended as of the end of the immediately preceding calendar quarter, and
as the dollar amount of annual total return on a year-to-year, rolling 12-month
basis ended as of the end of the immediately preceding calendar quarter.
Average annual total return quotations are computed according to the following
formula:
n
P (1+T) = ERV
Where:
P = beginning purchase payment of $1,000
T = average annual total return
n = number of years in period
ERV = ending redeemable value of a hypothetical $1,000 purchase payment
made at the beginning of the one-, five-or 10-year period at the end of the
one-, five- or 10-year period (or fractional portion thereof).
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 12/31/99:
Since
Variable Account Sub-Accounts 1 Year 5 Years Inception
- - -------------------------------------- -------- ------- ---------
CONSECO SERIES TRUST
Equity Portfolio..............................34.82% 29.06% 28.66%
Balanced Portfolio............................18.15% 20.47% 19.86%
Fixed Income Portfolio.......................(10.11%) 4.93% 4.88%
Government Securities Portfolio .............(11.99%) 3.74% 3.74%
THE ALGER AMERICAN FUND
Alger American Growth Portfolio ..............20.77% N/A 25.80%
Alger American Leveraged AllCap Portfolio ....60.85% N/A 40.57%
Alger American MidCap Growth Portfolio .......19.05% N/A 16.30%
Alger American Small Capitalization
Portfolio .................................29.51% N/A 17.58%
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
VP International .............................48.17% N/A 27.49%
VP Value ....................................(10.52%) N/A 5.17%
VP Income and Growth ......................... 6.54% N/A 8.90%
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger IPT - Growth Fund .....................34.68% N/A 17.60%
Berger IPT - Growth and Income Fund ..........43.66% N/A 27.67%
Berger IPT - Small Company Growth Fund .......72.96% N/A 22.08%
Berger/BIAM IPT - International Fund .........18.65% N/A 11.22%
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
Limited Maturity Bond Portfolio ..............(8.42%) N/A (0.32%)
Partners Portfolio ...........................(3.09%) N/A 8.58%
STRONG OPPORTUNITY FUND II, INC.
Opportunity Fund II ..........................21.82% N/A 21.78%
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Mid Cap Growth Fund II................ 71.54% N/A 46.85%
THE DREYFUS SOCIALLY RESPONSIBLE
GROWTH FUND, INC ..........................17.45% N/A 24.80%
DREYFUS STOCK INDEX FUND ..................... 8.88% N/A 23.35%
FEDERATED INSURANCE SERIES
Federated High Income Bond Fund II ...........(7.67%) N/A 6.00%
Federated International Equity Fund II .......67.02% N/A 22.57%
Federated Utility Fund II ....................(8.22%) N/A 11.49%
JANUS ASPEN SERIES
Aggressive Growth Portfolio .................103.67% N/A 36.63%
Growth Portfolio .............................30.03% N/A 26.85%
Worldwide Growth Portfolio ...................48.54% N/A 32.50%
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Bond Fund .........................(16.83%) N/A (0.14%)
Worldwide Emerging Markets Fund ..............80.95% N/A 4.61%
Worldwide Hard Assets Fund ................... 9.24% N/A (1.46%)
Worldwide Real Estate Fund ..................(11.58%) N/A (15.66%)
DREYFUS VARIABLE INVESTMENT FUND
Dreyfus VIF Disciplined Stock Portfolio ...... 6.93% N/A 8.53%
Dreyfus VIF International Value Portfolio ....15.41% N/A 5.09%
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF - High Yield Fund.................(1.44%) N/A (3.83%)
INVESCO VIF - Equity Income Fund.............. 3.67% N/A 3.97%
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Equity Portfolio ...........(2.37%) N/A 1.81%
Lazard Retirement Small Cap Portfolio ........(5.12%) N/A (11.78%)
LORD ABBETT SERIES FUND, INC.
Growth & Income Portfolio .................... 5.39% N/A 3.48%
MITCHELL HUTCHINS SERIES TRUST
Growth & Income Portfolio ....................(0.41%) N/A (0.86%)
- - ------------------------------------
(1) Since inception (May 1, 1998).
(2) Since inception (July 25, 1994).
(3) Since inception (June 1, 1995).
(4) Since inception (May 1, 1996).
(5) Since inception (May 1, 1997).
There is no performance shown for the following sub-accounts because they were
not available under the Contract until the date of the prospectus (May 1, 2000):
Conseco 20 Focus; Conseco High Yield; Berger IPT-New Generation; Rydex OTC;
Rydex Nova; Seligman Communications and Information; and Seligman Global
Technology.
OTHER PERFORMANCE DATA
The Company may from time to time also illustrate average annual total returns
in a non-standard format, as appears in the following "Gross Average Annual
Total Returns" table, in conjunction with the standard format described above.
The non-standard format will be identical to the standard format except that the
withdrawal charge percentage will be assumed to be zero.
All non-standard performance data will only be advertised if the standard
performance data for the same period, as well as for the required periods, is
also illustrated.
Performance data for the Variable Account investment options may be compared in
advertisements, sales literature and reports to contract owners, with the
investment returns on various mutual funds, stocks, bonds, certificates of
deposit, tax free bonds, or common stock and bond indices, and other groups of
variable annuity separate accounts or other investment products tracked by
Morningstar, Inc., a widely used independent research firm which ranks mutual
funds and other investment companies by overall performance, investment
objectives, and assets, or tracked by other services, companies, publications,
or persons who rank such investment companies on overall performance or other
criteria.
Reports and promotional literature may also contain other information, including
the effect of tax-deferred compounding on an investment option's performance
returns, or returns in general, which may be illustrated by graphs, charts or
otherwise, and which may include a comparison, at various points in time, of the
return from an investment in a Contract (or returns in general) on a
tax-deferred basis (assuming one or more tax rates) with the return on a taxable
basis.
Reports and promotional literature may also contain the ratings the Company has
received from independent rating agencies. However, the Company does not
guarantee the investment performance of the Variable Account investment options.
GROSS AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 12/31/99:
Since
Variable Account Sub-Accounts 1 Year 5 Years Inception
- - -------------------------------------- ------ ------- ---------
CONSECO SERIES TRUST
Equity Portfolio..............................47.20% 30.43% 29.45%
Balanced Portfolio............................29.04% 21.77% 20.63%
Fixed Income Portfolio........................(1.77%) 6.11% 5.60%
Government Securities Portfolio ..............(3.83%) 4.91% 4.46%
THE ALGER AMERICAN FUND
Alger American Growth Portfolio ..............31.89% N/A 28.24%
Alger American Leveraged AllCap Portfolio ....75.59% N/A 42.14%
Alger American MidCap Growth Portfolio .......30.02% N/A 18.58%
Alger American Small Capitalization
Portfolio .................................41.43% N/A 18.95%
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
VP International .............................61.77% N/A 31.32%
VP Value .....................................(2.23%) N/A 8.35%
VP Income and Growth .........................16.38% N/A 14.79%
BERGER INSTITUTIONAL PRODUCTS TRUST
Berger IPT - Growth Fund .....................47.06% N/A 19.91%
Berger IPT - Growth and Income Fund ..........56.84% N/A 30.14%
Berger IPT - Small Company Growth Fund .......88.79% N/A 24.48%
Berger/BIAM IPT - International Fund .........29.58% N/A 14.61%
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
Limited Maturity Bond Portfolio .............. 0.07% N/A 2.73%
Partners Portfolio ........................... 5.88% N/A 11.86%
STRONG OPPORTUNITY FUND II, INC.
Opportunity Fund II ..........................33.03% N/A 25.44%
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Mid Cap Growth Fund II................ 87.24% N/A 51.21%.
THE DREYFUS SOCIALLY RESPONSIBLE
GROWTH FUND, INC ..........................28.27% N/A 26.22%
DREYFUS STOCK INDEX FUND .....................18.93% N/A 24.75%
FEDERATED INSURANCE SERIES
Federated High Income Bond Fund II ........... 0.88% N/A 7.25%
Federated International Equity Fund II .......82.32% N/A 24.01%
Federated Utility Fund II .................... 0.28% N/A 12.79%
JANUS ASPEN SERIES
Aggressive Growth Portfolio .................122.28% N/A 38.18%
Growth Portfolio .............................41.99% N/A 28.29%
Worldwide Growth Portfolio ...................62.17% N/A 34.00%
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Bond Fund ..........................(9.11%) N/A 1.07%
Worldwide Emerging Markets Fund ..............97.51% N/A 6.73%
Worldwide Hard Assets Fund ...................19.32% N/A (0.26%)
Worldwide Real Estate Fund ...................(3.38%) N/A (11.03%)
DREYFUS VARIABLE INVESTMENT FUND
Dreyfus VIF Disciplined Stock Portfolio ...16.80% N/A 14.40%
Dreyfus VIF International Value Portfolio .26.04% N/A 10.80%
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF - High Yield Fund.............. 7.68% N/A 1.41%
INVESCO VIF - Equity Income Fund...........13.25% N/A 9.61%
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Equity Portfolio ........ 6.66% N/A 7.33%
Lazard Retirement Small Cap Portfolio ..... 3.67% N/A (6.94%)
LORD ABBETT SERIES FUND, INC.
Growth & Income Portfolio .................15.12% N/A 9.09%
MITCHELL HUTCHINS SERIES TRUST
Growth & Income Portfolio ................. 8.80% N/A 4.53%
- - ---------------------------------
(1) Since inception (May 1, 1998).
(2) Since inception (July 25, 1994).
(3) Since inception (June 1, 1995).
(4) Since inception (May 1, 1996).
(5) Since inception (May 1,1997).
There is no performance shown for the following sub-accounts because they were
not available under the Contract until the date of the prospectus (May 1, 2000):
Conseco 20 Focus; Conseco High Yield; Berger IPT-New Generation; Rydex OTC;
Rydex Nova; Seligman Communications and Information; and Seligman Global
Technology.
FEDERAL TAX STATUS
NOTE: THE FOLLOWING DESCRIPTION IS BASED UPON THE COMPANY'S UNDERSTANDING OF
CURRENT FEDERAL INCOME TAX LAW APPLICABLE TO ANNUITIES IN GENERAL. THE COMPANY
CANNOT PREDICT THE PROBABILITY THAT ANY CHANGES IN SUCH LAWS WILL BE MADE.
PURCHASERS ARE CAUTIONED TO SEEK COMPETENT TAX ADVICE REGARDING THE POSSIBILITY
OF SUCH CHANGES. THE COMPANY DOES NOT GUARANTEE THE TAX STATUS OF THE CONTRACTS.
PURCHASERS BEAR THE COMPLETE RISK THAT THE CONTRACTS MAY NOT BE TREATED AS
"ANNUITY CONTRACTS" UNDER FEDERAL INCOME TAX LAWS. IT SHOULD BE FURTHER
UNDERSTOOD THAT THE FOLLOWING DISCUSSION IS NOT EXHAUSTIVE AND THAT SPECIAL
RULES NOT DESCRIBED HEREIN MAY BE APPLICABLE IN CERTAIN SITUATIONS. MOREOVER, NO
ATTEMPT HAS BEEN MADE TO CONSIDER ANY APPLICABLE STATE OR OTHER TAX LAWS.
GENERAL
Section 72 of the Internal Revenue Code of 1986, as amended ("Code") governs
taxation of annuities in general. An Owner is not taxed on increases in the
value of a Contract until distribution occurs, either in the form of a lump sum
payment or as annuity payments under the annuity option selected. For a lump sum
payment received as a total withdrawal (total surrender), the recipient is taxed
on the portion of the payment that exceeds the cost basis of the Contract. For
non-qualified contracts, this cost basis is generally the purchase payments,
while for Qualified Contracts there may be no cost basis. The taxable portion of
the lump sum payment is taxed at ordinary income tax rates.
For annuity payments, a portion of each payment in excess of an exclusion amount
is includible in taxable income. The exclusion amount for payments based on a
fixed annuity option is determined by multiplying the payment by the ratio that
the cost basis of the Contract (adjusted for any period or refund feature) bears
to the expected return under the Contract. The exclusion amount for payments
based on a variable annuity option is determined by dividing the cost basis of
the Contract (adjusted for any period certain or refund guarantee) by the number
of years over which the annuity is expected to be paid. Payments received after
the investment in the Contract has been recovered (i.e. when the total of the
excludable amount equals the investment in the Contract) are fully taxable. The
taxable portion is taxed at ordinary income tax rates. For certain types of
Qualified Plans there may be no cost basis in the Contract within the meaning of
Section 72 of the Code. Owners, annuitants and beneficiaries under the Contracts
should seek competent financial advice about the tax consequences of any
distributions.
The Company is taxed as a life insurance company under the Code. For federal
income tax purposes, the Variable Account is not a separate entity from the
Company, and its operations form a part of the Company.
DIVERSIFICATION
Section 817(h) of the Code imposes certain diversification standards on the
underlying assets of variable annuity contracts. The Code provides that a
variable annuity contract will not be treated as an annuity contract for any
period (and any subsequent period) for which the investments are not, in
accordance with regulations prescribed by the United States Treasury Department
("Treasury Department"), adequately diversified. Disqualification of the
Contract as an annuity contract would result in the imposition of federal income
tax to the Owner with respect to earnings allocable to the Contract prior to the
receipt of payments under the Contract. The Code contains a safe harbor
provision which provides that annuity contracts such as the Contract meet the
diversification requirements if, as of the end of each quarter, the underlying
assets meet the diversification standards for a regulated investment company and
no more than fifty-five percent (55%) of the total assets consist of cash, cash
items, U.S. Government securities and securities of other regulated investment
companies.
Regulations issued by the Treasury Department (the "Regulations") amplify the
diversification requirements for variable contracts set forth in the Code and
provide an alternative to the safe harbor provision described above. Under the
Regulations, an investment portfolio will be deemed adequately diversified if:
(1) no more than 55% of the value of the total assets of the portfolio is
represented by any one investment; (2) no more than 70% of the value of the
total assets of the portfolio is represented by any two investments; (3) no more
than 80% of the value of the total assets of the portfolio is represented by any
three investments; and (4) no more than 90% of the value of the total assets of
the portfolio is represented by any four investments.
The Code provides that, for purposes of determining whether or not the
diversification standards imposed on the underlying assets of variable contracts
by Section 817(h) of the Code have been met, "each United States government
agency or instrumentality shall be treated as a separate issuer."
The Company intends that all variable Investment Options underlying the
Contracts will be managed in such a manner as to comply with these
diversification requirements.
The Treasury Department has indicated that the diversification Regulations do
not provide guidance regarding the circumstances in which Owner control of the
investments of the Variable Account will cause the Owner to be treated as the
owner of the assets of the Variable Account, thereby resulting in the loss of
favorable tax treatment for the Contract. At this time it cannot be determined
whether additional guidance will be provided and what standards may be contained
in such guidance.
The amount of Owner control which may be exercised under the Contract is
different in some respects from the situations addressed in published rulings
issued by the Internal Revenue Service in which it was held that the policy
owner was not the owner of the assets of the separate account. It is unknown
whether these differences, such as the Owner's ability to transfer among
investment choices or the number and type of investment choices available, would
cause the Owner to be considered as the owner of the assets of the Variable
Account resulting in the imposition of federal income tax to the Owner with
respect to earnings allocable to the Contract prior to receipt of payments under
the Contract.
In the event any forthcoming guidance or ruling is considered to set forth a new
position, such guidance or ruling will generally be applied only prospectively.
However, if such ruling or guidance was not considered to set forth a new
position, it may be applied retroactively resulting in the Owners being
retroactively determined to be the owners of the assets of the Variable Account.
Due to the uncertainty in this area, we reserve the right to modify the Contract
in an attempt to maintain favorable tax treatment.
MULTIPLE CONTRACTS
The Code provides that multiple non-qualified annuity contracts which are issued
within a calendar year to the same contract owner by one company or its
affiliates are treated as one annuity contract for purposes of determining the
tax consequences of any distribution. Such treatment may result in adverse tax
consequences including more rapid taxation of the distributed amounts from such
combination of contracts. For purposes of this rule, contracts received in a
Section 1035 exchange will be considered issued in the year of the exchange.
Owners should consult a tax adviser prior to purchasing more than one
non-qualified annuity contract in any calendar year.
PARTIAL 1035 EXCHANGES
Section 1035 of the Code provides that an annuity contract may be exchanged in
a tax-free transaction for another annuity contract. In 1998 in CONWAY VS.
COMMISSIONER, the Tax Court held that the direct transfer of a portion of
an annuity contract into another annuity contract qualified as a non-taxable
exchange. On November 22, 1999, the Internal Revenue Service filed an Action
on Decision which indicated that it acquiesced in the Tax Court decision in
CONWAY. However, in its acquiesence with the decision of the Tax Court, the
Internal Revenue Service stated that it will challenge transactions where
taxpayers enter into a series of partial exchanges and annuitizations as part
of a design to avoid application of the 10% premature distribution penalty or
other limitations imposed on annuity contracts under the Code. In the absence
of further guidance from the Internal Revenue Service it is unclear what
specific types of partial exchange designs and transactions will be challenged
by the Internal Revenue Service. Due to the uncertainty in this area, owners
should consult their own tax advisers prior to entering into a partial exchange
of an annuity contract.
CONTRACTS OWNED BY OTHER THAN NATURAL PERSONS
Under Section 72(u) of the Code, the investment earnings on premiums for the
Contracts will be taxed currently to the Owner if the Owner is a non-natural
person, e.g., a corporation or certain other entities. Such Contracts generally
will not be treated as annuities for federal income tax purposes. However, this
treatment is not applied to a Contract held by a trust or other entity as an
agent for a natural person nor to Contracts held by Qualified Plans. Purchasers
should consult their own tax counsel or other tax adviser before purchasing a
Contract to be owned by a non-natural person.
TAX TREATMENT OF ASSIGNMENTS
An assignment or pledge of a Contract may be a taxable event. Owners should
therefore consult competent tax advisers should they wish to assign or pledge
their Contracts.
If the Contract is issued pursuant to a retirement plan which receives favorable
treatment under the provision of Sections 401, 403(b), 408 or 457 of the Code,
it may not be assigned, pledged or otherwise transferred except as allowed under
applicable law.
DEATH BENEFITS
Any death benefits paid under the contract are taxable to the beneficiary.
The rules governing the taxation of payments from an annuity contract, as
discussed above, generally apply to the payment of death benefits and depend
on whether the death benefits are paid as a lump sum or as annuity payments.
Estate taxes may also apply.
INCOME TAX WITHHOLDING
All distributions or the portion thereof which is includible in the gross income
of the Owner are subject to federal income tax withholding. Generally, amounts
are withheld from periodic payments at the same rate as wages and at the rate of
10% from non-periodic payments. However, the Owner, in many cases, may elect not
to have taxes withheld or to have withholding done at a different rate.
Certain distributions from retirement plans qualified under Section 401 or
Section 403(b) of the Code, which are not directly rolled over to another
eligible retirement plan or individual retirement account or individual
retirement annuity, are subject to a mandatory 20% withholding for federal
income tax. The 20% withholding requirement generally does not apply to: a) a
series of substantially equal payments made at least annually for the life or
life expectancy of the participant or joint and last survivor expectancy of the
participant and a designated beneficiary or for a specified period of 10 years
or more; or b) distributions which are required minimum distributions; or c) the
portion of the distributions not includible in gross income (i.e. returns of
after-tax contributions); or d) hardship withdrawals. Participants should
consult their own tax counsel or other tax adviser regarding withholding
requirements.
TAX TREATMENT OF WITHDRAWALS - NON-QUALIFIED CONTRACTS
Section 72 of the Code governs treatment of distributions from annuity
contracts. It provides that if the Contract Value exceeds the aggregate Purchase
Payments made, any amount withdrawn will be treated as coming first from the
earnings and then, only after the income portion is exhausted, as coming from
the principal. Withdrawn earnings are includible in gross income. It further
provides that a ten percent (10%) penalty will apply to the income portion of
any premature distribution. However, the penalty is not imposed on amounts
received: (a) after you reach age 59 1/2; (b) after your death; (c) if you
become totally disabled (for this purpose disability is as defined in Section
72(m)(7) of the Code); (d) in a series of substantially equal periodic payments
made not less frequently than annually for your life (or life expectancy) or for
the joint lives (or joint life expectancies) of you and your beneficiary;
(e)under an immediate annuity; or (f) which are allocable to Purchase Payments
made prior to August 14, 1982. With respect to (d) above, if the series of
substantially equal periodic payments is modified before the later of your
attaining age 59 1/2 or 5 years from the date of the first periodic payment,
then the tax for the year of the modification is increased by an amount equal to
the tax which would have been imposed (the 10% penalty tax) but for the
exception, plus interest for the tax years in which the exception was used.
The Contract provides that upon the death of the Annuitant prior to the Maturity
Date, the death proceeds will be paid to the beneficiary. Such payments made
upon the death of the Annuitant who is not the Owner of the Contract do not
qualify for the death of Owner exception described above, and will be subject to
the ten (10%) percent distribution penalty unless the beneficiary is 59 1/2
years old or one of the other exceptions to the penalty applies.
The above information does not apply to Qualified Contracts. However, separate
tax withdrawal penalties and restrictions may apply to such Qualified Contracts.
(See "Tax Treatment of Withdrawals - Qualified Contracts" below.)
QUALIFIED PLANS
The Contracts are designed to be suitable for use under various types of
Qualified Plans. Taxation of participants in each Qualified Plan varies with the
type of plan and terms and conditions of each specific plan. Owners, annuitants
and beneficiaries are cautioned that benefits under a Qualified Plan may be
subject to the terms and conditions of the plan regardless of the terms and
conditions of the Contracts issued pursuant to the plan. Some retirement plans
are subject to distribution and other requirements that are not incorporated
into the Company's administrative procedures. The Company is not bound by the
terms and conditions of such plans to the extent such terms conflict with the
terms of a Contract, unless the Company specifically consents to be bound.
Owners, participants and beneficiaries are responsible for determining that
contributions, distributions and other transactions with respect to the
Contracts comply with applicable law.
A qualified contract will not provide any necessary or additional tax deferral
if it is used to fund a qualified plan that is tax deferred. However, the
contract has features and benefits other than tax deferral that may make it an
appropriate investment for a qualified plan. Following are general descriptions
of the types of Qualified Plans with which the Contracts may be used. Such
descriptions are not exhaustive and are for general informational purposes only.
The tax rules regarding Qualified Plans are very complex and will have differing
applications depending on individual facts and circumstances. Each purchaser
should obtain competent tax advice prior to purchasing a Contract issued under a
Qualified Plan.
Contracts issued pursuant to Qualified Plans include special provisions
restricting Contract provisions that may otherwise be available as described
herein. Generally, Contracts issued pursuant to Qualified Plans are not
transferable except upon surrender or annuitization. Various penalty and excise
taxes may apply to contributions or distributions made in violation of
applicable limitations. Furthermore, certain withdrawal penalties and
restrictions may apply to surrenders from Qualified Contracts. (See "Tax
Treatment of Withdrawals - Qualified Contracts" below.)
On July 6, 1983, the Supreme Court decided in ARIZONA GOVERNING COMMITTEE V.
NORRIS that optional annuity benefits provided under an employer's deferred
compensation plan could not, under Title VII of the Civil Rights Act of 1964,
vary between men and women. The Contracts sold by the Company in connection with
Qualified Plans will utilize annuity tables which do not differentiate on the
basis of sex. Such annuity tables will also be available for use in connection
with certain non-qualified deferred compensation plans.
a. TAX-SHELTERED ANNUITIES
Section 403(b) of the Code permits the purchase of "tax-sheltered annuities" by
public schools and certain charitable, educational and scientific organizations
described in Section 501(c)(3) of the Code. These qualifying employers may make
contributions to the Contracts for the benefit of their employees. Such
contributions are not includible in the gross income of the employees until the
employees receive distributions from the Contracts. The amount of contributions
to the tax-sheltered annuity is limited to certain maximums imposed by the Code.
Furthermore, the Code sets forth additional restrictions governing such items as
transferability, distributions, nondiscrimination and withdrawals. (See "Tax
Treatment of Withdrawals Qualified Contracts" and "Tax-Sheltered Annuities -
Withdrawal Limitations" below.) Any employee should obtain competent tax advice
as to the tax treatment and suitability of such an investment.
b. INDIVIDUAL RETIREMENT ANNUITIES
The Contracts offered by the prospectus are designed to be suitable for use as
an Individual Retirement Annuity (IRA). Generally, individuals who purchase IRAs
are not taxed on increases to the value of the contributions until distribution
occurs. Following is a general description of IRAs with which the Contract may
be used. The description is not exhaustive and is for general informational
purposes only.
Section 408(b) of the Code permits eligible individuals to contribute to an
individual retirement program known as an IRA. Under applicable limitations,
certain amounts may be contributed to an IRA which will be deductible from the
individual's taxable income. These IRAs are subject to limitations on
eligibility, contributions, transferability and distributions. (See "Tax
Treatment of Withdrawals - Qualified Contracts" below.) Under certain
conditions, distributions from other IRAs and other Qualified Plans may be
rolled over or transferred on a tax-deferred basis into an IRA. Sales of
Contracts for use with IRAs are subject to special requirements imposed by the
Code, including the requirement that certain informational disclosure be given
to persons desiring to establish an IRA. Purchasers of Contracts to be qualified
as Individual Retirement Annuities should obtain competent tax advice as to the
tax treatment and suitability of such an investment.
SIMPLE IRAs
Section 408(p) of the Code permits certain employers (generally those with less
than 100 employees) to establish a retirement program for employees using
Savings Incentive Match Plan Retirement Annuities ("SIMPLE IRA"). SIMPLE IRA
programs can only be established with the approval of and adoption by the
employer of the Contract Owner of the SIMPLE IRA. Contributions to SIMPLE IRAs
will be made pursuant to a salary reduction agreement in which an Owner would
authorize his/her employer to deduct a certain amount from his/her pay and
contribute it directly to the SIMPLE IRA. The Owner's employer will also make
contributions to the SIMPLE IRA in amounts based upon certain elections of the
employer. The only contributions that can be made to a SIMPLE IRA are salary
reduction contributions and employer contributions as described above, and
rollover contributions from other SIMPLE IRAs. Purchasers of Contracts to be
qualified as SIMPLE IRAs should obtain competent tax advice as to the tax
treatment and suitability of such an investment.
ROTH IRAs
Section 408A of the Code provides that beginning in 1998, individuals may
purchase a new type of non-deductible IRA, known as a Roth IRA. Purchase
payments for a Roth IRA are limited to a maximum of $2,000 per year and are not
deductible from taxable income. Lower maximum limitations apply to individuals
with adjusted gross incomes between $95,000 and $110,000 in the case of single
taxpayers, between $150,000 and $160,000 in the case of married taxpayers filing
joint returns, and between $0 and $10,000 in the case of married taxpayers
filing separately. An overall $2,000 annual limitation continues apply to all of
a taxpayer's IRA contributions, including Roth IRA and non-Roth IRAs.
Qualified distributions from Roth IRAs are free from federal income tax. A
qualified distribution requires that an individual has held a Roth IRA for at
least five taxable years and, in addition, that the distribution is made: (i)
after the individual reaches age 59 1/2, (ii) on the individual's death or
disability, or (iii) as a qualified first-time home purchase (subject to a
$10,000 lifetime maximum) for the individual, a spouse, child, grandchild, or
ancestor. Any distribution which is not a qualified distribution is taxable to
the extent of earnings in the distribution. Distributions are treated as made
from contributions first and therefore no distributions are taxable until
distributions exceed the amount of contributions and conversions to the Roth
IRA. The 10% penalty tax and the regular IRA exceptions to the 10% penalty tax
apply to taxable distributions from a Roth IRA.
Amounts may be rolled over from one Roth IRA to another Roth IRA. Furthermore,
an individual may make a rollover contribution from a non-Roth IRA to a Roth
IRA, ("conversion deposits") unless the individual has adjusted gross income
over $100,000 or the individual is a married taxpayer filing a separate return.
The individual must pay tax on any portion of the IRA being rolled over that
represents income or a previously deductible IRA contribution. However, for
rollovers in 1998, the individual may pay that tax ratably over the four taxable
year period beginning with tax year 1998. In addition, distribution of amounts
attributable to conversion deposits held for less than 5 taxable years will also
be subject to the penalty tax.
Purchasers of Contracts intended to be qualified as a Roth IRA should obtain
competent tax advice as to the tax treatment and suitability of such an
investment.
c. PENSION AND PROFIT-SHARING PLANS
Sections 401(a) and 401(k) of the Code permit employers, including self-employed
individuals, to establish various types of retirement plans for employees. These
retirement plans may permit the purchase of the Contracts to provide benefits
under the Plan. Contributions to the Plan for the benefit of employees will not
be includible in the gross income of the employees until distributed from the
Plan. The tax consequences to participants may vary depending upon the
particular plan design. However, the Code places limitations and restrictions on
all Plans including on such items as: amount of allowable contributions; form,
manner and timing of distributions; transferability of benefits; vesting and
nonforfeitability of interests; nondiscrimination in eligibility and
participation; and the tax treatment of distributions, withdrawals and
surrenders. Special considerations apply to plans covering self-employed
individuals, including limitations on contributions and benefits for key
employees or 5 percent owners. (See "Tax Treatment of Withdrawals - Qualified
Contracts" below.) Purchasers of Contracts for use with Pension or Profit
Sharing Plans should obtain competent tax advice as to the tax treatment and
suitability of such an investment.
d. GOVERNMENT AND TAX-EXEMPT ORGANIZATION'S DEFERRED COMPENSATION PLAN
UNDER SECTION 457
Under Code provisions, employees and independent contractors performing services
for state and local governments and other tax-exempt organizations may
participate in Deferred Compensation Plans under Section 457 of the Code. The
amounts deferred under a Plan which meets the requirements of Section 457 of the
Code are not taxable as income to the participant until paid or otherwise made
available to the participant or beneficiary. As a general rule, the maximum
amount which can be deferred in any one year is the lesser of $8,000 or 33 1/3
percent of the participant's includible compensation. However, in limited
circumstances, the plan may provide for additional catch-up contributions in
each of the last three years before normal retirement age. Furthermore, the Code
provides additional requirements and restrictions regarding eligibility and
distributions.
All of the assets and income of a Plan established by a governmental
employer after August 20, 1996, must be held in trust for the exclusive
benefit of participants and their beneficiaries. For this purpose, custodial
accounts and certain annuity contracts are treated as trusts. Plans that were
in existence on August 20, 1996 may be amended to satisfy the trust and
exclusive benefit requirements any time prior to January 1, 1999, and must be
amended not later than that date to continue to receive favorable tax
treatment. The requirement of a trust does not apply to amounts under a Plan
of a tax exempt (non-governmental) employer. In addition, the requirement of
a trust does not apply to amounts under a Plan of a governmental employer if
the Plan is not an eligible plan within the meaning of section 457(b) of the
Code. In the absence of such a trust, amounts under the plan will be subject
to the claims of the employer's general creditors.
In general, distributions from a Plan are prohibited under section 457 of the
Code unless made after the participating employee:
attains age 70 1/2,
separates from service,
dies, or
suffers an unforeseeable financial emergency as defined in the Code.
Under present federal tax law, amounts accumulated in a Plan under section 457
of the Code cannot be transferred or rolled over on a tax-deferred basis except
for certain transfers to other Plans under section 457.
TAX TREATMENT OF WITHDRAWALS - QUALIFIED CONTRACTS
In the case of a withdrawal under a Qualified Contract, a ratable portion of the
amount received is taxable, generally based on the ratio of the individual's
cost basis to the individual's total accrued benefit under the retirement plan.
Special tax rules may be available for certain distributions from a Qualified
Contract. Section 72(t) of the Code imposes a 10% penalty tax on the taxable
portion of any distribution from qualified retirement plans, including Contracts
issued and qualified under Code Sections 401 (Pension and Profit-Sharing Plans),
403(b) (Tax-Sheltered Annuities) and 408 and 408A (Individual Retirement
Annuities). This penalty is increased to 25% instead of 10% for SIMPLE IRAs if
distribution occurs within the first two years after the Owner first
participated in the SIMPLE IRA. To the extent amounts are not includible in
gross income because they have been rolled over to an IRA or to another eligible
Qualified Plan, no tax penalty will be imposed. The tax penalty will not apply
to the following distributions: (a) made on or after the date on which the Owner
or Annuitant (as applicable) reaches age 59 1/2; (b) following the death or
disability of the Owner or Annuitant (as applicable) (for this purpose
disability is as defined in Section 72(m) (7) of the Code); (c) after separation
from service, distributions that are part of substantially equal periodic
payments made not less frequently than annually for the life (or life
expectancy) of the Owner or Annuitant (as applicable) or the joint lives (or
joint life expectancies) of such Owner or Annuitant (as applicable) and his or
her designated Beneficiary; (d) to an Owner or Annuitant (as applicable) who has
separated from service after he has attained age 55; (e) made to the Owner or
Annuitant (as applicable) to the extent such distributions do not exceed the
amount allowable as a deduction under Code Section 213 to the Owner or Annuitant
(as applicable) for amounts paid during the taxable year for medical care; (f)
made to an alternate payee pursuant to a qualified domestic relations order; (g)
made on account of an IRS levy upon the qualified contract; (h) from an
Individual Retirement Annuity for the purchase of medical insurance (as
described in Section 213(d)(1)(D) of the Code) for the Owner or Annuitant (as
applicable) and his or her spouse and dependents if the Owner or Annuitant (as
applicable) has received unemployment compensation for at least 12 weeks (this
exception will no longer apply after the Owner or Annuitant (as applicable) has
been re-employed for at least 60 days); (i) from an Individual Retirement
Annuity made to the Owner or Annuitant (as applicable) to the extent such
distributions do not exceed the qualified higher education expenses (as defined
in Section 72(t)(7) of the Code) of the Owner or Annuitant (as applicable) for
the taxable year; and (j) distributions up to $10,000 from an Individual
Retirement Annuity made to the Owner or Annuitant (as applicable) which are
qualified first-time home buyer distributions (as defined in Section 72(t)(8) of
the Code). The exceptions stated in (d) and (f) above do not apply in the case
of an Individual Retirement Annuity. The exception stated in (c) above applies
to an Individual Retirement Annuity without the requirement that there be a
separation from service. With respect to (c) above, if the series of
substantially equal periodic payments is modified before the later of your
attaining age 59 1/2 or 5 years from the date of the first periodic payment,
then the tax for the year of the modification is increased by an amount equal to
the tax which would have been imposed (the 10% penalty tax) but for the
exception, plus interest for the tax years in which the exception was used.
TAX-SHELTERED ANNUITIES - WITHDRAWAL LIMITATIONS
The Code limits the withdrawal of amounts attributable to contributions made
pursuant to a salary reduction agreement (as defined in Section 403(b)(11) of
the Code) to circumstances only when the Owner: (1) attains age 59 1/2; (2)
separates from service; (3) dies; (4) becomes disabled (within the meaning of
Section 72(m)(7) of the Code); (5) in the case of hardship; or (6) made pursuant
to a qualified domestic relations order, if otherwise permissible. However,
withdrawals for hardship are restricted to the portion of the Owner's Contract
Value which represents contributions made by the Owner and does not include any
investment results. The limitations on withdrawals became effective on January
1, 1989 and apply only to salary reduction contributions made after December 31,
1988, to income attributable to such contributions and to income attributable to
amounts held as of December 31, 1988. The limitations on withdrawals do not
affect rollovers and transfers between certain Qualified Plans. Owners should
consult their own tax counsel or other tax adviser regarding any distributions.
MANDATORY DISTRIBUTIONS - QUALIFIED PLANS
Generally, distributions from a qualified plan must begin no later than April
1st of the calendar year following the later of (a) the year in which the
employee attains age 70 1/2 or (b) the calendar year in which the employee
retires. The date set forth in (b) does not apply to an Individual Retirement
Annuity. Required distributions must be over a period not exceeding the life
expectancy of the individual or the joint lives or life expectancies of the
individual and his or her designated beneficiary. If the required minimum
distributions are not made, a 50% penalty tax is imposed as to the amount not
distributed.
ANNUITY PROVISIONS
DETERMINATION OF AMOUNT OF THE FIRST MONTHLY VARIABLE ANNUITY PAYMENT. On or
after the Maturity Date when annuity payments commence, we determine the value
of the Individual Account as the total of the product(s) of:
(a) the value of an Accumulation Unit for each Investment Option at the end of
the Valuation Period immediately before the Valuation Period in which the first
annuity payment is due and
(b) the number of Accumulation Units credited to the Individual Account with
respect to each Investment Option as of the date the annuity is to commence. We
will deduct any applicable premium taxes from the Individual Account value.
We then calculate the amount of the first monthly variable annuity payment by
multiplying the Individual Account Value less any outstanding loans and
applicable charges, which is to be applied to provide variable payments, by the
amount of first monthly payment in accordance with annuity tables contained in
the Contract. The amount of the first monthly payment varies according to the
form of annuity you select, the age of the annuitant (for certain options) and
the assumed net investment rate you select. The standard assumed investment rate
(AIR) is 3%. However, you may select a 5% AIR or such other rate as the Company
may offer prior to the Maturity Date.
The AIR built into the annuity tables affect both the amount of the first
monthly variable annuity payment and the amount by which subsequent payments may
increase or decrease. If you select a 5% rate, rather than the standard 3% rate,
it would produce a higher first payment, but subsequent payments would increase
more slowly in periods when Annuity Unit values are rising and decrease more
rapidly in periods when Annuity Unit values are declining. With either assumed
rate, if the actual net investment rate during any two or more successive months
was equal to the assumed rate, the annuity payments would be level during that
period.
If a greater first monthly payment would result, Conseco will compute the first
monthly payment on the same mortality basis as used in determining the first
payment under immediate annuity contracts being issued for a similar class of
annuitants at the date the first monthly payment is due under the Contract.
VALUE OF AN ANNUITY UNIT. On the Maturity Date, a number of Annuity Units is
established for the Contract Owner for each Investment Option on which variable
annuity payments are to be based. For each Sub-account of the Variable Account,
the number of Annuity Units established is calculated by dividing (i) the amount
of the first monthly variable annuity payment on that basis by (ii) the Annuity
Unit value for that basis for the current Valuation Period. That number of
Annuity Units remains constant and is the basis for calculating the amount of
the second and subsequent annuity payments.
The Annuity Unit value is determined for each Valuation Period, for each
Investment Option, and is equal to the Annuity Unit value for the preceding
Valuation Period multiplied by the product of (i) the net investment factor for
the appropriate sub-account for the immediately preceding Valuation Period and
(ii) a factor to neutralize the assumed net investment rate built into the
annuity tables, for it is replaced by the actual net investment rate in step
(i). The daily factor for a 3 percent assumed net investment rate is .99991902;
for a 5 percent rate, the daily factor is .99986634.
AMOUNTS OF SUBSEQUENT MONTHLY VARIABLE ANNUITY PAYMENTS. The amounts of
subsequent monthly variable annuity payments are determined by multiplying (i)
the number of Annuity Units established for the annuitant for the applicable
sub-account by (ii) the Annuity Unit value for the sub-account. If Annuity units
are established for more than one sub-account, the calculation is made
separately and the results combined to determine the total monthly variable
annuity payment.
1. EXAMPLE OF CALCULATION OF MONTHLY VARIABLE ANNUITY PAYMENTS. The
determination of the amount of the variable annuity payments can be illustrated
by the following hypothetical example. The example assumes that the monthly
payments are based on the investment experience of only one Investment Option.
If payments were based on the investment experience of more than one Investment
Option, the same procedure would be followed to determine the portion of the
monthly payment attributed to each Investment Option.
2. FIRST MONTHLY PAYMENT. Assume that at the Maturity Date there are 40,000
Accumulation Units credited under a particular Individual Account and that the
value of an Accumulation Unit for the second Valuation Period prior to the
Maturity Date was $1.40000000; this produces a total value for the Individual
sub-account of $56,000. Assume also that no premium tax is payable and that the
annuity tables in the Contract provide, for the option elected, a first monthly
variable annuity payment of $5.22 per $1,000 of value applied; the first monthly
payment to the annuitant would thus be 56 multiplied by $5.22, or $292.32.
Assume that the Annuity Unit value for the Valuation Period in which the first
monthly payment was due was $1.30000000. This is divided into the amount of the
first monthly payment to establish the number of Annuity Units for the
participant: $292.32 $1.30000000 produces 224.862 Annuity Units. The value of
this number of Annuity Units will be paid in each subsequent month.
3. SECOND MONTHLY PAYMENT. The current Annuity Unit value is first
calculated. Assume a net investment factor of 1.01000000 for the second
Valuation Period preceding the due date of the second monthly payment. This is
multiplied by .99753980 to neutralize the assumed net investment rate of 3
percent per annum built into the number of Annuity Units determined above (if an
assumed net investment rate of 5 percent had been elected, the neutralization
factor would be .99594241), producing a result of 1.00751520. This is then
multiplied by the Annuity Unit value for the Valuation Period preceding the due
date of the second monthly payment (assume this value to be $1.30000000) to
produce the current Annuity Unit value, $1.30976976.
The second monthly payment is then calculated by multiplying the constant number
of Annuity Units by the current Annuity Unit value: 224.862 times $1.30976976
produces a payment of $294.52.
FINANCIAL STATEMENTS
Audited financial statements of Conseco Variable Annuity Account E and Conseco
Variable Insurance Company as of December 31, 1999 are included herein.
CONSECO VARIABLE ANNUITY ACCOUNT E
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
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NET ASSET
SHARES COST VALUE
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<S> <C> <C> <C>
Assets:
Investments in portfolio shares, at net asset value (Note 2):
The Alger American Fund:
Growth Portfolio ................................................................. 212,369.9 $10,954,993 $ 13,672,372
Leveraged AllCap Portfolio ....................................................... 323,992.7 12,113,548 18,781,855
MidCap Growth Portfolio .......................................................... 103,913.7 2,696,745 3,349,138
Small Capitalization Portfolio ................................................... 212,283.9 9,024,458 11,707,458
American Century Variable Portfolios, Inc:
Income and Growth Fund ........................................................... 117,633.5 820,625 941,068
International Fund ............................................................... 208,641.0 1,626,572 2,608,013
Value Fund ....................................................................... 626,328.8 4,078,007 3,726,656
Berger Institutional Products Trust:
100 Fund ......................................................................... 148,333.7 1,893,245 2,850,973
Growth and Income Fund ........................................................... 287,825.4 4,885,343 7,612,981
Small Company Growth Fund ........................................................ 104,936.8 1,635,128 2,467,064
BIAM International Fund .......................................................... 204,789.4 2,063,392 2,996,069
Conseco Series Trust:
Balanced Portfolio ............................................................... 1,486,856.9 20,915,762 21,783,656
Equity Portfolio ................................................................. 1,765,906.2 38,863,968 40,934,975
Fixed Income Portfolio ........................................................... 763,707.6 7,575,032 7,167,777
Government Securities Portfolio .................................................. 435,108.5 4,980,560 4,769,239
Money Market Portfolio ........................................................... 14,709,626.8 14,709,627 14,709,627
Dreyfus Stock Index Fund ........................................................... 1,289,837.9 37,449,042 49,594,269
The Dreyfus Socially Responsible Growth Fund, Inc .................................. 248,528.3 7,649,170 9,710,001
Dreyfus Variable Investment Fund:
Disciplined Stock Portfolio ...................................................... 15,469.5 376,282 416,439
International Value Portfolio .................................................... 6,465.2 94,504 101,309
Federated Insurance Series:
High Income Bond Fund II ......................................................... 427,031.7 4,546,053 4,372,805
International Equity Fund II ..................................................... 62,764.5 1,034,358 1,734,811
Utility Fund II .................................................................. 197,791.4 2,836,065 2,838,306
Invesco Variable Investment Funds, Inc:
Equity Income Fund................................................................ 27,369.7 526,682 575,038
High Yield Fund................................................................... 422,498.5 5,021,340 4,862,957
Janus Aspen Series:
Aggressive Growth Portfolio ...................................................... 267,419.3 8,370,700 15,962,256
Growth Portfolio ................................................................. 941,137.1 22,225,389 31,669,262
Worldwide Growth Portfolio ....................................................... 993,430.2 27,081,865 47,436,293
Lazard Retirement Series, Inc:
Equity Portfolio ................................................................. 87,920.4 927,558 1,013,722
Small Cap Portfolio .............................................................. 19,451.4 188,351 191,013
Lord Abbett Series Fund, Inc
Growth and Income Portfolio ...................................................... 41,458.8 918,907 918,726
Mitchell Hutchins Series Trust:
Growth and Income Portfolio ...................................................... 4,739.2 70,390 77,438
Neuberger Berman Advisers Management Trust:
Limited Maturity Bond Portfolio .................................................. 97,047.3 1,306,863 1,284,906
Partners Portfolio ............................................................... 274,020.8 5,205,965 5,381,769
Strong Variable Insurance Funds, Inc:
Mid Cap Growth Fund II ........................................................... 144,973.8 3,256,292 4,402,854
Strong Opportunity Fund II, Inc .................................................... 69,503.1 1,474,480 1,806,384
Van Eck Worldwide Insurance Trust:
Worldwide Bond Fund .............................................................. 214,785.1 2,375,658 2,296,053
Worldwide Emerging Markets Fund .................................................. 164,529.1 1,540,950 2,346,184
Worldwide Hard Assets Fund (formerly Gold and Natural
Resources Fund) (Note 1) ....................................................... 128,733.9 1,526,857 1,410,924
Worldwide Real Estate Fund ....................................................... 7,204.5 69,783 65,921
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets ................................................................................................. 350,548,561
Liabilities:
Net amounts due to Conseco Variable Insurance Company ............................................................. 408,722
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets (Note 6) ............................................................................................. $350,139,839
===================================================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
2
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT E
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
DECEMBER 31, 1999
<TABLE>
<CAPTION>
===================================================================================================================================
TOTAL VALUE
UNITS UNIT VALUE OF UNITS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net assets attributable to:
Contract owners' deferred annuity reserves:
The Alger American Fund:
Growth Portfolio ......................................................... 5,480,300.6 $ 2.491860 $ 13,656,143
Leveraged AllCap Portfolio ............................................... 3,739,665.2 5.016250 18,759,096
MidCap Growth Portfolio .................................................. 1,789,442.1 1.869335 3,345,066
Small Capitalization Portfolio ........................................... 5,276,834.2 2.215940 11,693,147
American Century Variable Portfolios, Inc.:
Income and Growth Fund ................................................... 746,541.0 1.259139 939,999
International Fund ....................................................... 1,258,065.8 2.070551 2,604,890
Value Fund ............................................................... 3,004,508.6 1.238881 3,722,229
Berger Institutional Products Trust:
100 Fund ................................................................. 1,462,280.5 1.947260 2,847,440
Growth and Income Fund ................................................... 2,890,714.8 2.630360 7,603,620
Small Company Growth Fund ................................................ 1,102,899.8 2.234216 2,464,116
BIAM International Fund .................................................. 2,081,810.5 1.439253 2,996,253
Conseco Series Trust:
Balanced Portfolio ....................................................... 7,850,427.1 2.771503 21,757,485
Equity Portfolio ......................................................... 10,049,304.8 4.068452 40,885,109
Fixed Income Portfolio ................................................... 5,323,180.1 1.344927 7,159,291
Government Securities Portfolio .......................................... 3,757,732.3 1.267688 4,763,633
Money Market Portfolio ................................................... 12,049,203.3 1.219157 14,689,873
Dreyfus Stock Index Fund ................................................... 17,965,037.4 2.757290 49,534,816
The Dreyfus Socially Responsible Growth Fund, Inc. ......................... 3,333,181.2 2.909651 9,698,393
Dreyfus Variable Investment Fund:
Disciplined Stock Portfolio .............................................. 332,230.6 1.252051 415,970
International Value Portfolio ............................................ 85,251.5 1.186966 101,191
Federated Insurance Series:
High Income Bond Fund II ................................................. 3,165,625.8 1.378642 4,364,264
International Equity Fund II ............................................. 645,820.6 2.683147 1,732,831
Utility Fund II .......................................................... 1,632,263.7 1.736793 2,834,904
Invesco Variable Investment Funds, Inc.:
Equity Income Fund ....................................................... 492,759.7 1.165618 574,369
High Yield Fund .......................................................... 4,745,256.4 1.023611 4,857,298
Janus Aspen Series:
Aggressive Growth Portfolio .............................................. 3,617,752.9 4.406952 15,943,265
Growth Portfolio ......................................................... 10,090,318.2 3.134816 31,631,290
Worldwide Growth Portfolio ............................................... 12,380,622.3 3.826970 47,380,277
Lazard Retirement Series, Inc.:
Equity Portfolio ......................................................... 899,537.0 1.125543 1,012,468
Small Cap Portfolio ...................................................... 215,217.6 0.886723 190,838
Lord Abbett Series Fund, Inc.:
Growth and Income Portfolio .............................................. 793,510.8 1.156495 917,691
Mitchell Hutchins Series Trust:
Growth and Income Portfolio .............................................. 71,828.8 1.076908 77,353
Neuberger Berman Advisers Management Trust:
Limited Maturity Bond Portfolio .......................................... 1,194,491.4 1.074523 1,283,509
Partners Portfolio ....................................................... 3,981,862.2 1.348993 5,371,504
Strong Variable Insurance Funds, Inc.:
Mid Cap Growth Fund II ................................................... 1,457,235.0 3.017741 4,397,558
Strong Opportunity Fund II , Inc. .......................................... 984,898.5 1.831885 1,804,221
Van Eck Worldwide Insurance Trust:
Worldwide Bond Fund ...................................................... 2,183,728.7 1.050195 2,293,341
Worldwide Emerging Markets Fund .......................................... 1,845,366.5 1.269899 2,343,429
Worldwide Hard Assets Fund
(formerly Gold and Natural Resources Fund) (Note 1) .................... 1,426,277.7 0.988034 1,409,211
Worldwide Hard Assets Fund (Note 1) ..................................... 65.5 1.378275 91
Worldwide Real Estate Fund ............................................... 80,034.5 0.822657 65,841
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets ............................................................................................. $350,123,313
===================================================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
3
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT E
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
DECEMBER 31, 1999
===============================================================================
REPORTED VALUE
- -------------------------------------------------------------------------------
Net assets attributable to contract owners'
deferred annuity reserves (from page 3) ....................... $350,123,313
- -------------------------------------------------------------------------------
Contract owners' annuity payment reserves:
Conseco Series Trust:
Money Market Portfolio .................................. 5,534
Federated Insurance Series:
High Income Bond Fund II ................................ 5,388
Neuberger Berman Advisers Management Trust:
Partners Portfolio ...................................... 5,604
- -------------------------------------------------------------------------------
Net assets attributable to contract owners'
annuity payment reserves............................. 16,526
- --------------------------------------------------------------------------------
Net assets......................................... $350,139,839
================================================================================
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
================================================================================
THIS PAGE INTENTIONALLY LEFT BLANK.
5
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT E
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
===================================================================================================================================
AMERICAN
CENTURY
VARIABLE
THE ALGER AMERICAN FUNDS PORTFOLIOS
--------------------------------------------------------- ----------
LEVERAGED SMALL INCOME AND
GROWTH ALL CAP MIDCAP CAPITALIZATION GROWTH
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends from investments in portfolio shares......... $ 776,884 $ 522,645 $ 343,247 $ 749,200 $ 96
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk fees........................ 115,958 124,584 30,871 92,307 7,684
Administrative fees.................................... 13,915 14,950 3,704 11,077 922
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses....................................... 129,873 139,534 34,575 103,384 8,606
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss)..................... 647,011 383,111 308,672 645,816 (8,510)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gains (losses) and unrealized
appreciation (depreciation) of investments:
Net realized gains (losses) on sales of
investments in portfolio shares ................... 102,656 872,252 78,297 80,293 18,320
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares ................ 2,011,423 5,347,823 339,394 2,491,281 93,713
- -----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments
in portfolio shares ........................... 2,114,079 6,220,075 417,691 2,571,574 112,033
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations ............................. $ 2,761,090 $ 6,603,186 $ 726,363 $ 3,217,390 $ 103,523
===================================================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1999
===================================================================================================================================
AMERICAN
CENTURY
VARIABLE
THE ALGER AMERICAN FUNDS PORTFOLIOS
--------------------------------------------------------- ----------
LEVERAGED SMALL INCOME AND
GROWTH ALL CAP MIDCAP CAPITALIZATION GROWTH
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Changes from operations:
Net investment income (loss) .......................... $ 647,011 $ 383,111 $ 308,672 $ 645,816 $ (8,510)
Net realized gains (losses) on sales of investments
in portfolio shares ................................. 102,656 872,252 78,297 80,293 18,320
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares .................. 2,011,423 5,347,823 339,394 2,491,281 93,713
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations ................................. 2,761,090 6,603,186 726,363 3,217,390 103,523
- -----------------------------------------------------------------------------------------------------------------------------------
Changes from contract owners' transactions:
Net contract purchase payments ........................ 4,009,371 3,789,407 725,957 860,397 469, 755
Contract redemptions .................................. (385,154) (247,907) (83,518) (457,073) (8,847)
Net transfers ......................................... 2,263,279 3,593,047 (494,377) 2,156,624 143,774
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from contract owners' transactions ............ 5,887,496 7,134,547 148,062 2,559,948 604,682
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets ....... 8,648,586 13,737,733 874,425 5,777,338 708,205
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, beginning of year ............................ 5,007,557 5,021,363 2,470,641 5,915,809 231,794
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (Note 6) ............ $ 13,656,143 $ 18,759,096 $ 3,345,066 $ 11,693,147 $ 939,999
===================================================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
AMERICAN CENTURY
VARIABLE PORTFOLIOS
(CONTINUED) BERGER INSTITUTIONAL PRODUCTS TRUST CONSECO SERIES TRUST PORTFOLIOS
- ---------------------------- -------------------------------------------------------- ------------------------------------------
GROWTH AND SMALL BIAM FIXED
INTERNATIONAL VALUE 100 INCOME COMPANY INTERNATIONAL BALANCED EQUITY INCOME
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ -- $ 380,194 $ 450 $ -- $ -- $ 16,494 $ 3,987,902 $ 11,479,520 $ 411,110
- ------------------------------------------------------------------------------------------------------------------------------------
20,304 47,022 28,774 92,882 17,904 28,170 260,655 396,895 79,131
2,436 5,643 3,453 11,146 2,149 3,380 31,279 47,627 9,496
- ------------------------------------------------------------------------------------------------------------------------------------
22,740 52,665 32,227 104,028 20,053 31,550 291,934 444,522 88,627
- ------------------------------------------------------------------------------------------------------------------------------------
(22,740) 327,529 (31,777) (104,028) (20,053) (15,056) 3,695,968 11,034,998 322,483
- ------------------------------------------------------------------------------------------------------------------------------------
63,104 (77,104) 99,951 1,243,906 192,400 8,942 349,105 324,163 (80,270)
937,729 (302,377) 859,250 1,969,994 866,219 690,015 1,152,263 1,730,768 (347,279)
- ------------------------------------------------------------------------------------------------------------------------------------
1,000,833 (379,481) 959,201 3,213,900 1,058,619 698,957 1,501,368 2,054,931 (427,549)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 978,093 $ (51,952) $ 927,424 $ 3,109,872 $ 1,038,566 $ 683,901 $ 5,197,336 $ 13,089,929 $ (105,066)
====================================================================================================================================
AMERICAN CENTURY
VARIABLE PORTFOLIOS
(CONTINUED) BERGER INSTITUTIONAL PRODUCTS TRUST CONSECO SERIES TRUST PORTFOLIOS
- ---------------------------- -------------------------------------------------------- ------------------------------------------
GROWTH AND SMALL BIAM FIXED
INTERNATIONAL VALUE 100 INCOME COMPANY INTERNATIONAL BALANCED EQUITY INCOME
====================================================================================================================================
$ (22,740) $ 327,529 $ (31,777) $ (104,028) $ (20,053) $ (15,056) $ 3,695,968 $ 11,034,998 $ 322,483
63,104 (77,104) 99,951 1,243,906 192,400 8,942 349,105 324,163 (80,270)
937,729 (302,377) 859,250 1,969,994 866,219 690,015 1,152,263 1,730,768 (347,279)
- ------------------------------------------------------------------------------------------------------------------------------------
978,093 (51,952) 927,424 3,109,872 1,038,566 683,901 5,197,336 13,089,929 (105,066)
- ------------------------------------------------------------------------------------------------------------------------------------
203,602 505,927 352,778 1,430,861 286,430 22,843 2,692,288 4,249,667 906,132
(24,933) (153,412) (112,033) (793,457) (65,927) (1,166) (1,238,845) (1,658,283) (405,393)
33,834 13,458 (252,139) (2,685,701) 148,372 (14,553) (7,694,332) (5,608,028) 840,161
- ------------------------------------------------------------------------------------------------------------------------------------
212,503 365,973 (11,394) (2,048,297) 368,875 7,124 (6,240,889) (3,016,644) 1,340,900
- ------------------------------------------------------------------------------------------------------------------------------------
1,190,596 314,021 916,030 1,061,575 1,407,441 691,025 (1,043,553) 10,073,285 1,235,834
- ------------------------------------------------------------------------------------------------------------------------------------
1,414,294 3,408,208 1,931,410 6,542,045 1,056,675 2,305,228 22,801,038 30,811,824 5,923,457
- ------------------------------------------------------------------------------------------------------------------------------------
$ 2,604,890 $ 3,722,229 $ 2,847,440 $ 7,603,620 $ 2,464,116 $ 2,996,253 $21,757,485 $ 40,885,109 $ 7,159,291
====================================================================================================================================
</TABLE>
7
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT E
STATEMENTS OF OPERATIONS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
====================================================================================================================================
CONSECO SERIES DREYFUS
TRUST PORTFOLIOS VARIABLE
(CONTINUED) INVESTMENT
--------------------------- ----------
DREYFUS
SOCIALLY DREYFUS
GOVERNMENT MONEY RESPONSIBLE STOCK DISCIPLINED
SECURITIES MARKET GROWTH INDEX STOCK
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends from investments in portfolio shares......... $ 208,403 $ 466,644 $ 323,807 $ 848,258 $ 3,882
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk fees........................ 35,599 120,813 100,043 514,342 3,126
Administrative fees.................................... 4,272 14,497 12,005 61,721 375
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses....................................... 39,871 135,310 112,048 576,063 3,501
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ...................... 168,532 331,334 211,759 272,195 381
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gains (losses) and unrealized appreciation
(depreciation) of investments:
Net realized gains (losses) on sales of investments
in portfolio shares .............................. (53,419) -- 569,099 750,331 27,382
Net change in unrealized appreciation
(depreciation) of investments
in portfolio shares ...................... (216,869) -- 1,295,573 6,256,103 1,880
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments
in portfolio shares ................. (270,288) -- 1,864,672 7,006,434 29,262
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets from operations ........ $ (101,756) $ 331,334 $ 2,076,431 $ 7,278,629 $ 29,643
====================================================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1999
====================================================================================================================================
CONSECO SERIES DREYFUS
TRUST PORTFOLIOS VARIABLE
(CONTINUED) INVESTMENT
--------------------------- ----------
DREYFUS
SOCIALLY DREYFUS
GOVERNMENT MONEY RESPONSIBLE STOCK DISCIPLINED
SECURITIES MARKET GROWTH INDEX STOCK
====================================================================================================================================
Changes from operations:
Net investment income (loss)........................... $ 168,532 $ 331,334 $ 211,759 $ 272,195 $ 381
Net realized gains (losses) on sales of investments
in portfolio shares ................................. (53,419) -- 569,099 750,331 27,382
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares .................. (216,869) -- 1,295,573 6,256,103 1,880
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations (101,756) 331,334 2,076,431 7,278,629 29,643
- ------------------------------------------------------------------------------------------------------------------------------------
Changes from contract owners' transactions:
Net contract purchase payments......................... 413,613 5,982,018 2,198,167 9,744,333 243,883
Contract redemptions................................... (152,438) (1,323,488) (331,772) (2,102,160) (1,559)
Net transfers ......................................... 2,570,373 2,668,928 (751,898) 2,613,043 (149,676)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from contract
owners' transactions .............................. 2,831,548 7,327,458 1,114,497 10,255,216 92,648
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets ........... 2,729,792 7,658,792 3,190,928 17,533,845 122,291
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, beginning of year ............................ 2,033,841 7,036,615 6,507,465 32,000,971 293,679
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (Note 6) ................ $ 4,763,633 $ 14,695,407 $ 9,698,393 $ 49,534,816 $ 415,970
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
DREYFUS
VARIABLE
INVESTMENT
(CONTINUED) FEDERATED INSURANCE SERIES FUNDS INVESCO VARIABLE INV. FUNDS JANUS ASPEN SERIES PORTFOLIOS
- ---------- ----------------------------------------- --------------------------- -------------------------------------------
INTERNATIONAL HIGH INCOME INTERNATIONAL EQUITY AGGRESSIVE WORLDWIDE
VALUE BOND II EQUITY II UTILITY II INCOME HIGH YIELD GROWTH GROWTH GROWTH
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 8,041 $ 595,613 $ 53,628 $ 268,51 $ 9,632 $ 325,343 $ 293,381 $ 133,950 $ 63,086
- ------------------------------------------------------------------------------------------------------------------------------------
879 76,596 22,860 41,951 5,554 20,963 106,419 238,216 434,997
105 9,192 2,743 5,034 667 2,515 12,770 28,586 52,200
- ------------------------------------------------------------------------------------------------------------------------------------
984 85,788 25,603 46,985 6,221 23,478 119,189 266,802 487,197
- ------------------------------------------------------------------------------------------------------------------------------------
7,057 509,825 28,025 221,533 3,411 301,865 174,192 (132,852) (424,111)
- ------------------------------------------------------------------------------------------------------------------------------------
91 (249,357) 146,565 102,468 7,321 1,541 1,414,594 334,162 2,571,165
10,335 (209,064) 767,800 (287,128) 43,945 (146,439) 6,256,473 7,430,621 15,961,067
- ------------------------------------------------------------------------------------------------------------------------------------
10,426 (458,421) 914,365 (184,660) 51,266 (144,898) 7,671,067 7,764,783 18,532,232
- ------------------------------------------------------------------------------------------------------------------------------------
$ 17,483 $ 51,404 $ 942,390 $ 36,873 $ 54,677 $ 156,967 $ 7,845,259 $ 7,631,931 $ 18,108,121
====================================================================================================================================
DREYFUS
VARIABLE
INVESTMENT
(CONTINUED) FEDERATED INSURANCE SERIES FUNDS INVESCO VARIABLE INV. FUNDS JANUS ASPEN SERIES PORTFOLIOS
- ---------- -------------------------------------------- ------------------------- ------------------------------------------
INTERNATIONAL HIGH INCOME INTERNATIONAL EQUITY AGGRESSIVE WORLDWIDE
VALUE BOND II EQUITY II UTILITY II INCOME HIGH YIELD GROWTH GROWTH GROWTH
====================================================================================================================================
$ 7,057 $ 509,825 $ 28,025 $ 221,533 $ 3,411 $ 301,865 $ 174,192 $ (132,852) $ (424,111)
91 (249,357) 146,565 102,468 7,321 1,541 1,414,594 334,162 2,571,165
10,335 (209,064) 767,800 (287,128) 43,945 (146,439) 6,256,473 7,430,621 15,961,067
- ------------------------------------------------------------------------------------------------------------------------------------
17,483 51,404 942,390 36,873 54,677 156,967 7,845,259 7,631,931 18,108,121
- ------------------------------------------------------------------------------------------------------------------------------------
29,652 930,590 85,680 937,941 167,974 403,084 2,346,950 5,238,650 7,151,112
(120) (538,823) (188,919) (227,339) (17,639) (122,694) (355,291) (1,184,221) (1,878,924)
9,328 (2,847,499) (897,172) (1,299,462) 223,672 4,277,974 1,143,153 8,275,443 (3,618,581)
- ------------------------------------------------------------------------------------------------------------------------------------
38,860 (2,455,732) (1,000,411) (588,860) 374,007 4,558,364 3,134,812 12,329,872 1,653,607
- ------------------------------------------------------------------------------------------------------------------------------------
56,343 (2,404,328) (58,021) (551,987) 428,684 4,715,331 10,980,071 19,961,803 19,761,728
- ------------------------------------------------------------------------------------------------------------------------------------
44,848 6,773,980 1,790,852 3,386,891 145,685 141,967 4,963,194 11,669,487 27,618,549
- ------------------------------------------------------------------------------------------------------------------------------------
$ 101,191 $ 4,369,652 $ 1,732,831 $ 2,834,904 $ 574,369 $ 4,857,298 $ 15,943,265 $ 31,631,290 $ 47,380,277
====================================================================================================================================
</TABLE>
9
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT E
STATEMENTS OF OPERATIONS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
====================================================================================================================================
NEUBERGER
BERMAN
ADVISERS
MANAGEMENT
LAZARD RETIREMENT TRUST
SERIES PORTFOLIOS PORTFOLIOS
--------------------------- ----------
MITCHELL
LORD ABBETT HUTCHINS
SERIES TRUST SERIES TRUST LIMITED
GROWTH AND GROWTH AND MATURITY
EQUITY SMALL CAP INCOME INCOME BOND
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends from investments in portfolio shares......... $ 36,196 $ 2,590 $ 70,646 $ 1 $ 51,597
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk fees........................ 14,642 1,461 7,538 940 13,084
Administrative fees.................................... 1,757 175 905 113 1,570
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses....................................... 16,399 1,636 8,443 1,053 14,654
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss)..................... 19,797 954 62,203 (1,052) 36,943
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gains (losses) and unrealized appreciation
(depreciation) of investments:
Net realized gains (losses) on sales of investments
in portfolio shares ............................... 61,034 (1,200) 23,084 (136) 3,040
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares ................ 1,467 (2,123) (7,310) (5,478) (38,552)
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments
in portfolio shares .......................... 62,501 (3,323) 15,774 (5,614) (35,512)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations ........................... $ 82,298 $ (2,369) $ 77,977 $ (6,666) $ 1,431
====================================================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1999
====================================================================================================================================
NEUBERGER
BERMAN
ADVISERS
MANAGEMENT
LAZARD RETIREMENT TRUST
SERIES PORTFOLIOS PORTFOLIOS
--------------------------- ----------
MITCHELL
LORD ABBETT HUTCHINS
SERIES TRUST SERIES TRUST LIMITED
GROWTH AND GROWTH AND MATURITY
EQUITY SMALL CAP INCOME INCOME BOND
====================================================================================================================================
Changes from operations:
Net investment income (loss) .......................... $ 19,797 $ 954 $ 62,203 $ (1,052) $ 36,943
Net realized gains (losses) on sales of investments
in portfolio shares ................................. 61,034 (1,200) 23,084 (136) 3,040
Net change in unrealized appreciation
(depreciation) of investments in portfolio shares ... 1,467 (2,123) (7,310) (5,478) (38,552)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations ................................ 82,298 (2,369) 77,977 (6,666) 1,431
- ------------------------------------------------------------------------------------------------------------------------------------
Changes from contract owners' transactions:
Net contract purchase payments ........................ 75,768 94,818 341,535 34,644 228,919
Contract redemptions .................................. (17,879) (2,007) (15,618) (1,378) (23,338)
Net transfers ......................................... (316,901) (48,568) 199,363 (145,156) (79,322)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from contract owners' transactions .............. (259,012) 44,243 525,280 (111,890) 126,259
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets ........ (176,714) 41,874 603,257 (118,556) 127,690
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, beginning of year ............................ 1,189,182 148,964 314,434 195,909 1,155,819
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (Note 6) ............. $ 1,012,468 $ 190,838 $ 917,691 $ 77,353 $ 1,283,509
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
NEUBERGER
BERMAN
ADVISERS
MANAGEMENT STRONG
TRUST VARIABLE
PORTFOLIOS INSURANCE
(CONTINUED) FUNDS VAN ECK WORLDWIDE INSURANCE TRUST FUNDS
- ----------- ----------- ---------------------------------------------------------------------
(NOTE 1)
STRONG OLD
MID CAP OPPORTUNITY EMERGING HARD REAL HARD COMBINED
PARTNERS GROWTH II FUND II BOND MARKETS ASSETS ESTATE ASSETS TOTAL
================================================================================================================ ==============
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 277,185 $ 1,822 $ 220,843 $ 182,453 $ -- $ 18,473 $ 742 $ -- $ 23,132,476
- -------------------------------------------------------------------------------------------------------------- --------------
95,726 27,334 25,173 31,551 18,701 17,441 579 -- 3,319,669
11,487 3,280 3,021 3,786 2,244 2,093 69 -- 398,359
- -------------------------------------------------------------------------------------------------------------- --------------
107,213 30,614 28,194 35,337 20,945 19,534 648 -- 3,718,028
- -------------------------------------------------------------------------------------------------------------- --------------
169,972 (28,792) 192,649 147,116 (20,945) (1,061) 94 -- 19,414,448
- -------------------------------------------------------------------------------------------------------------- --------------
(295,817) 603,446 23,921 46,471 (63,354) (218,833) 1,419 -- 9,081,033
481,873 1,017,981 319,256 (447,508) 1,204,979 447,348 (3,517) -- 57,972,929
- -------------------------------------------------------------------------------------------------------------- --------------
186,056 1,621,427 343,177 (401,037) 1,141,625 228,515 (2,098) -- 67,053,962
- -------------------------------------------------------------------------------------------------------------- --------------
$ 356,028 $ 1,592,635 $ 535,826 $ (253,921) $ 1,120,680 $ 227,454 $ (2,004) $ -- $ 86,468,410
================================================================================================================================
====================================================================================================================================
NEUBERGER
BERMAN
ADVISERS
MANAGEMENT STRONG
TRUST VARIABLE
PORTFOLIOS INSURANCE
(CONTINUED) FUNDS VAN ECK WORLDWIDE INSURANCE TRUST FUNDS
- ----------- ----------- ---------------------------------------------------------------------
(NOTE 1)
STRONG OLD
MID CAP OPPORTUNITY EMERGING HARD REAL HARD COMBINED
PARTNERS GROWTH II FUND II BOND MARKETS ASSETS ESTATE ASSETS TOTAL
================================================================================================================ ==================
$ 169,972 $ (28,792) $ 192,649 $ 147,116 $ (20,945) $ (1,061) $ 94 $ -- $ 19,414,448
(295,817) 603,446 23,921 46,471 (63,354) (218,833) 1,419 -- 9,081,033
481,873 1,017,981 319,256 (447,508) 1,204,979 447,348 (3,517) -- 57,972,929
- -------------------------------------------------------------------------------------------------------------- --------------
356,028 1,592,635 535,826 (253,921) 1,120,680 227,454 (2,004) -- 86,468,410
- -------------------------------------------------------------------------------------------------------------- --------------
1,134,268 655,531 476,339 121,658 282,332 94,334 7,278 (1,329) 59,925,157
(554,425) (67,689) (94,458) (198,760) (39,666) (111,836) (1,082) -- (15,189,471)
(3,673,565) 1,315,983 (854,529) (640,897) (131,603) (31,123) 26,384 -- 281,111
- -------------------------------------------------------------------------------------------------------------- --------------
(3,093,722) 1,903,825 (472,648) (717,999) 111,063 (48,625) 32,580 (1,329) 45,016,797
- -------------------------------------------------------------------------------------------------------------- --------------
(2,737,694) 3,496,460 63,178 (971,920) 1,231,743 178,829 30,576 (1,329) 131,485,207
- -------------------------------------------------------------------------------------------------------------- --------------
8,114,802 901,098 1,741,043 3,265,261 1,111,686 1,230,382 35,265 1,420 218,654,632
- -------------------------------------------------------------------------------------------------------------- --------------
$ 5,377,108 $ 4,397,558 $ 1,804,221 $ 2,293,341 $ 2,343,429 $ 1,409,211 $ 65,841 $ 91 $ 350,139,839
============================================================================================================== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT E
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
===================================================================================================================================
AMERICAN
CENTURY
VARIABLE
THE ALGER AMERICAN FUNDS PORTFOLIOS
--------------------------------------------------------- ----------
LEVERAGED SMALL INCOME AND
GROWTH ALL CAP MIDCAP CAPITALIZATION GROWTH
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends from investments in portfolio shares......... $ 374,254 $ 129,677 $ 129,887 $ 673,096 $ 1,070
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk fees........................ 33,919 40,525 19,951 68,876 922
Administrative fees.................................... 4,070 4,863 2,394 8,265 111
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses....................................... 37,989 45,388 22,345 77,141 1,033
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .................... 336,265 84,289 107,542 595,955 37
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gains (losses) and unrealized appreciation
(depreciation) of investments:
Net realized gains (losses) on sales of investments
in portfolio shares ............................... 8,941 374,595 (10,849) 363,207 (4,106)
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares ................ 676,695 1,030,800 313,657 (112,117) 26,730
- -----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments
in portfolio shares ........................... 685,636 1,405,395 302,808 251,090 22,624
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations ............................. $ 1,021,901 $ 1,489,684 $ 410,350 $ 847,045 $ 22,661
===================================================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
===================================================================================================================================
AMERICAN
CENTURY
VARIABLE
THE ALGER AMERICAN FUNDS PORTFOLIOS
--------------------------------------------------------- ----------
LEVERAGED SMALL INCOME AND
GROWTH ALL CAP MIDCAP CAPITALIZATION GROWTH
===================================================================================================================================
Changes from operations:
Net investment income (loss) .......................... $ 336,265 $ 84,289 $ 107,542 $ 595,955 $ 37
Net realized gains (losses) on sales of investments
in portfolio shares ................................. 8,941 374,595 (10,849) 363,207 (4,106)
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares .................. 676,695 1,030,800 313,657 (112,117) 26,730
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations ................................. 1,021,901 1,489,684 410,350 847,045 22,661
- -----------------------------------------------------------------------------------------------------------------------------------
Changes from contract owners' transactions:
Net contract purchase payments ........................ 2,215,629 1,041,432 1,080,010 1,987,015 201,735
Contract redemptions .................................. (53,824) (105,224) (28,677) (175,370) (1,637)
Net transfers ......................................... 863,424 247,311 248,802 (2,228,408) 9,035
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from contract owners' transactions ................ 3,025,229 1,183,519 1,300,135 (416,763) 209,133
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets ...................... 4,047,130 2,673,203 1,710,485 430,282 231,794
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, beginning of year ............................ 960,427 2,348,160 760,156 5,485,527 --
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year .......................... $ 5,007,557 $ 5,021,363 $ 2,470,641 $ 5,915,809 $ 231,794
===================================================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
AMERICAN CENTURY
VARIABLE PORTFOLIOS
(CONTINUED) BERGER INSTITUTIONAL PRODUCTS TRUST CONSECO SERIES TRUST PORTFOLIOS
- ---------------------------- -------------------------------------------------------- ------------------------------------------
GROWTH AND SMALL BIAM FIXED
INTERNATIONAL VALUE 100 INCOME COMPANY INTERNATIONAL BALANCED EQUITY INCOME
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 27,110 $ 92,413 $ 4,392 $ 43,198 $ 435 $ 32,039 $ 1,230,591 $ 1,912,300 $ 389,710
- -----------------------------------------------------------------------------------------------------------------------------------
11,080 27,348 18,963 54,118 8,690 27,185 226,010 316,150 71,545
1,330 3,282 2,276 6,494 1,043 3,262 27,121 37,938 8,585
- -----------------------------------------------------------------------------------------------------------------------------------
12,410 30,630 21,239 60,612 9,733 30,447 253,131 354,088 80,130
- -----------------------------------------------------------------------------------------------------------------------------------
14,700 61,783 (16,847) (17,414) (9,298) 1,592 977,460 1,558,212 309,580
- -----------------------------------------------------------------------------------------------------------------------------------
14,441 (10,313) 60,729 102,712 (33,023) 2,777 25,118 (42,192) 70,842
42,844 (53,898) 126,081 741,672 (46,639) 284,596 35,650 1,669,037 (125,689)
- -----------------------------------------------------------------------------------------------------------------------------------
57,285 (64,211) 186,810 844,384 (79,662) 287,373 60,768 1,626,845 (54,847)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 71,985 $ (2,428) $ 169,963 $ 826,970 $ (88,960) $ 288,965 $ 1,038,228 $ 3,185,057 $ 254,733
====================================================================================================================================
====================================================================================================================================
AMERICAN CENTURY
VARIABLE PORTFOLIOS
(CONTINUED) BERGER INSTITUTIONAL PRODUCTS TRUST CONSECO SERIES TRUST PORTFOLIOS
- ---------------------------- -------------------------------------------------------- ------------------------------------------
GROWTH AND SMALL BIAM FIXED
INTERNATIONAL VALUE 100 INCOME COMPANY INTERNATIONAL BALANCED EQUITY INCOME
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 14,700 $ 61,783 $ (16,847) $ (17,414) $ (9,298) $ 1,592 $ 977,460 $ 1,558,212 $ 309,580
14,441 (10,313) 60,729 102,712 (33,023) 2,777 25,118 (42,192) 70,842
42,844 (53,898) 126,081 741,672 (46,639) 284,596 35,650 1,669,037 (125,689)
- -----------------------------------------------------------------------------------------------------------------------------------
71,985 (2,428) 169,963 826,970 (88,960) 288,965 1,038,228 3,185,057 254,733
- -----------------------------------------------------------------------------------------------------------------------------------
812,918 1,994,912 909,579 1,791,325 793,463 61,604 7,357,525 10,463,939 3,411,455
(11,147) (31,566) (22,486) (258,723) (12,235) (908) (578,798) (741,888) (324,089)
361,982 937,413 150,316 3,090,981 143,546 (12,544) 3,656,283 (1,397,363) (2,737,088)
- -----------------------------------------------------------------------------------------------------------------------------------
1,163,753 2,900,759 1,037,409 4,623,583 924,774 48,152 10,435,010 8,324,688 350,278
- -----------------------------------------------------------------------------------------------------------------------------------
1,235,738 2,898,331 1,207,372 5,450,553 835,814 337,117 11,473,238 11,509,745 605,011
- -----------------------------------------------------------------------------------------------------------------------------------
178,556 509,877 724,038 1,091,492 220,861 1,968,111 11,327,800 19,302,079 5,318,446
- -----------------------------------------------------------------------------------------------------------------------------------
$ 1,414,294 $ 3,408,208 $ 1,931,410 $ 6,542,045 $1,056,675 $ 2,305,228 $ 22,801,038 $ 30,811,824 $ 5,923,457
====================================================================================================================================
</TABLE>
13
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT E
STATEMENTS OF OPERATIONS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
====================================================================================================================================
CONSECO SERIES DREYFUS
TRUST PORTFOLIOS VARIABLE
(CONTINUED) INVESTMENT
--------------------------- ----------
DREYFUS
SOCIALLY DREYFUS
GOVERNMENT MONEY RESPONSIBLE STOCK DISCIPLINED
SECURITIES MARKET GROWTH INDEX STOCK
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends from investments in portfolio shares......... $ 78,409 $ 269,620 $ 244,730 $ 398,526 $ 2,600
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk fees........................ 16,251 66,728 51,873 306,045 1,229
Administrative fees.................................... 1,950 8,007 6,225 36,725 147
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses....................................... 18,201 74,735 58,098 342,770 1,376
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss)..................... 60,208 194,885 186,632 55,756 1,224
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gains (losses) and unrealized appreciation
(depreciation) of investments:
Net realized gains (losses) on sales of investments
in portfolio shares ................................ 6,375 -- 185,607 962,916 36,116
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares.................. 1,874 -- 633,149 4,438,654 38,277
- -----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments
in portfolio shares ........................... 8,249 -- 818,756 5,401,570 74,393
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations ............................. $ 68,457 $ 194,885 $ 1,005,388 $ 5,457,326 $ 75,617
====================================================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1998
====================================================================================================================================
CONSECO SERIES DREYFUS
TRUST PORTFOLIOS VARIABLE
(CONTINUED) INVESTMENT
--------------------------- ----------
DREYFUS
SOCIALLY DREYFUS
GOVERNMENT MONEY RESPONSIBLE STOCK DISCIPLINED
SECURITIES MARKET GROWTH INDEX STOCK
====================================================================================================================================
Changes from operations:
Net investment income (loss) .......................... $ 60,208 $ 194,885 $ 186,632 $ 55,756 $ 1,224
Net realized gains (losses) on sales of investments
in portfolio shares ................................. 6,375 -- 185,607 962,916 36,116
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares .................. 1,874 -- 633,149 4,438,654 38,277
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations ................................. 68,457 194,885 1,005,388 5,457,326 75,617
- ------------------------------------------------------------------------------------------------------------------------------------
Changes from contract owners' transactions:
Net contract purchase payments ........................ 1,230,619 5,610,327 2,915,040 11,843,387 78,723
Contract redemptions .................................. (20,365) (635,311) (68,419) (690,753) (4,197)
Net transfers ......................................... 312,083 (1,673,324) 529,759 (901,334) 143,536
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from contract owners'
transactions .................................... 1,522,337 3,301,692 3,376,380 10,251,300 218,062
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets .................... 1,590,794 3,496,577 4,381,768 15,708,626 293,679
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, beginning of year ............................ 443,047 3,540,038 2,125,697 16,292,345 --
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year ....................... $ 2,033,841 $ 7,036,615 $ 6,507,465 $ 32,000,971 $ 293,679
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
DREYFUS
VARIABLE
INVESTMENT
(CONTINUED) FEDERATED INSURANCE SERIES FUNDS INVESCO VARIABLE INV. FUNDS JANUS ASPEN SERIES PORTFOLIOS
- ---------- ----------------------------------------- --------------------------- -------------------------------------------
INTERNATIONAL HIGH INCOME INTERNATIONAL EQUITY AGGRESSIVE WORLDWIDE
VALUE BOND II EQUITY II UTILITY II INCOME HIGH YIELD GROWTH GROWTH GROWTH
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 3,163 $ 112,989 $ 570 $ 78,210 $ 7,194 $ 14,716 $ -- $ 590,460 $ 848,719
- -----------------------------------------------------------------------------------------------------------------------------------
140 61,051 18,837 22,948 604 699 43,724 122,807 277,413
17 7,326 2,260 2,754 73 84 5,247 14,737 33,290
- -----------------------------------------------------------------------------------------------------------------------------------
157 68,377 21,097 25,702 677 783 48,971 137,544 310,703
- -----------------------------------------------------------------------------------------------------------------------------------
3,006 44,612 (20,527) 52,508 6,517 13,933 (48,971) 452,916 538,016
- -----------------------------------------------------------------------------------------------------------------------------------
(15) 83,981 66,748 78,346 25 (13,130) 69,888 1,278,856 1,098,639
(3,529) (117,533) (73,328) 125,778 4,411 (11,944) 1,055,063 1,296,335 3,129,436
- -----------------------------------------------------------------------------------------------------------------------------------
(3,544) (33,552) (6,580) 204,124 4,436 (25,074) 1,124,951 2,575,191 4,228,075
- -----------------------------------------------------------------------------------------------------------------------------------
$ (538) $ 11,060 $ (27,107) $ 256,632 $ 10,953 $ (11,141) $ 1,075,980 $ 3,028,107 $ 4,766,091
====================================================================================================================================
====================================================================================================================================
DREYFUS
VARIABLE
INVESTMENT
(CONTINUED) FEDERATED INSURANCE SERIES FUNDS INVESCO VARIABLE INV. FUNDS JANUS ASPEN SERIES PORTFOLIOS
- ---------- ----------------------------------------- --------------------------- -------------------------------------------
INTERNATIONAL HIGH INCOME INTERNATIONAL EQUITY AGGRESSIVE WORLDWIDE
VALUE BOND II EQUITY II UTILITY II INCOME HIGH YIELD GROWTH GROWTH GROWTH
====================================================================================================================================
$ 3,006 $ 44,612 $ (20,527) $ 52,508 $ 6,517 $ 13,933 $ (48,971) $ 452,916 $ 538,016
(15) 83,981 66,748 78,346 25 (13,130) 69,888 1,278,856 1,098,639
(3,529) (117,533) (73,328) 125,778 4,411 (11,944) 1,055,063 1,296,335 3,129,436
- -----------------------------------------------------------------------------------------------------------------------------------
(538) 11,060 (27,107) 256,632 10,953 (11,141) 1,075,980 3,028,107 4,766,091
- -----------------------------------------------------------------------------------------------------------------------------------
45,401 2,790,736 436,482 1,356,794 118,885 214,857 1,160,560 4,424,471 10,235,818
(15) (315,350) (54,450) (41,667) (935) (460) (179,148) (305,746) (602,821)
-- 1,339,407 1,043,767 773,434 16,782 (61,289) 109,728 (3,994,752) (2,066,063)
- -----------------------------------------------------------------------------------------------------------------------------------
45,386 3,814,793 1,425,799 2,088,561 134,732 153,108 1,091,140 123,973 7,566,934
- -----------------------------------------------------------------------------------------------------------------------------------
44,848 3,825,853 1,398,692 2,345,193 145,685 141,967 2,167,120 3,152,080 12,333,025
- -----------------------------------------------------------------------------------------------------------------------------------
-- 2,948,127 392,160 1,041,698 -- -- 2,796,074 8,517,407 15,285,524
- -----------------------------------------------------------------------------------------------------------------------------------
$ 44,848 $ 6,773,980 $ 1,790,852 $ 3,386,891 $ 145,685 $ 141,967 $ 4,963,194 $ 11,669,487 $ 27,618,549
====================================================================================================================================
</TABLE>
15
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT E
STATEMENTS OF OPERATIONS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
====================================================================================================================================
NEUBERGER
BERMAN
ADVISERS
MANAGEMENT
LAZARD RETIREMENT TRUST
SERIES PORTFOLIOS PORTFOLIOS
--------------------------- ----------
MITCHELL
LORD ABBETT HUTCHINS
SERIES TRUST SERIES TRUST LIMITED
GROWTH AND GROWTH AND MATURITY
EQUITY SMALL CAP INCOME INCOME BOND
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends from investments in portfolio shares......... $ 4,020 $ 20 $ 19,184 $ 13,648 $ 2,889
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk fees........................ 2,407 332 1,171 939 6,711
Administrative fees.................................... 289 40 140 113 805
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses....................................... 2,696 372 1,311 1,052 7,516
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .................... 1,324 (352) 17,873 12,596 (4,627)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gains (losses) and unrealized appreciation
(depreciation) of investments:
Net realized gains (losses) on sales of investments
in portfolio shares ................................ 30 (183) (1,465) 26,752 514
Net change in unrealized appreciation (depreciation)
of investments in portfolio shares ................. 84,696 4,785 7,130 12,525 16,409
- -----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments
in portfolio shares ............................ 84,726 4,602 5,665 39,277 16,923
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations ............................ $ 86,050 $ 4,250 $ 23,538 $ 51,873 $ 12,296
====================================================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 1998
====================================================================================================================================
NEUBERGER
BERMAN
ADVISERS
MANAGEMENT
LAZARD RETIREMENT TRUST
SERIES PORTFOLIOS PORTFOLIOS
--------------------------- ----------
MITCHELL
LORD ABBETT HUTCHINS
SERIES TRUST SERIES TRUST LIMITED
GROWTH AND GROWTH AND MATURITY
EQUITY SMALL CAP INCOME INCOME BOND
====================================================================================================================================
Changes from operations:
Net investment income (loss) .......................... $ 1,324 $ (352) $ 17,873 $ 12,596 $ (4,627)
Net realized gains (losses) on sales of investments
in portfolio shares ................................. 30 (183) (1,465) 26,752 514
Net change in unrealized appreciation (depreciation) of
investments in portfolio shares ..................... 84,696 4,785 7,130 12,525 16,409
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations ................................. 86,050 4,250 23,538 51,873 12,296
- -----------------------------------------------------------------------------------------------------------------------------------
Changes from contract owners' transactions:
Net contract purchase payments......................... 34,427 41,117 298,670 34,614 681,124
Contract redemptions................................... (712) (321) (1,230) (3,248) (14,874)
Net transfers.......................................... 1,069,417 103,918 (6,544) 112,670 451,102
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from contract owners' transactions .............. 1,103,132 144,714 290,896 144,036 1,117,352
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets.......... 1,189,182 148,964 314,434 195,909 1,129,648
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, beginning of year............................. -- -- -- -- 26,171
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year........................ $ 1,189,182 $ 148,964 $ 314,434 $ 195,909 $ 1,155,819
====================================================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
NEUBERGER
BERMAN
ADVISERS
MANAGEMENT STRONG
TRUST VARIABLE
PORTFOLIOS INSURANCE
(CONTINUED) FUNDS VAN ECK WORLDWIDE INSURANCE TRUST FUNDS
- ----------- ----------- ---------------------------------------------------------------------
(NOTE 1)
STRONG OLD
MID CAP OPPORTUNITY EMERGING HARD REAL HARD COMBINED
PARTNERS GROWTH II FUND II BOND MARKETS ASSETS ESTATE ASSETS TOTAL
================================================================================================================ ==============
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 227,138 $ 3 $ 61,848 $ 33,029 $ 31,237 $ 666,685 $ -- $ -- $ 8,749,779
- ---------------------------------------------------------------------------------------------------------------- -------------
74,561 6,683 16,228 42,545 17,529 34,829 233 -- 2,119,799
8,947 802 1,947 5,105 2,104 4,180 28 -- 254,376
- ---------------------------------------------------------------------------------------------------------------- -------------
83,508 7,485 18,175 47,650 19,633 39,009 261 -- 2,374,175
- ---------------------------------------------------------------------------------------------------------------- -------------
143,630 (7,482) 43,673 (14,621) 11,604 627,676 (261) -- 6,375,604
- ---------------------------------------------------------------------------------------------------------------- -------------
(245,137) 10,860 (66,197) 61,830 (528,657) (1,068,009) (3,058) -- 2,964,511
(324,545) 130,770 11,247 305,864 40,753 (567,677) (346) 17 14,847,690
- ---------------------------------------------------------------------------------------------------------------- -------------
(569,682) 141,630 (54,950) 367,694 (487,904) (1,635,686) (3,404) 17 17,812,201
- ---------------------------------------------------------------------------------------------------------------- -------------
$ (426,052) $ 134,148 $ (11,277) $ 353,073 $ (476,300) $ (1,008,010) $ (3,665) $ 17 $ 24,187,805
================================================================================================================ =============
====================================================================================================================================
NEUBERGER
BERMAN
ADVISERS
MANAGEMENT STRONG
TRUST VARIABLE
PORTFOLIOS INSURANCE
(CONTINUED) FUNDS VAN ECK WORLDWIDE INSURANCE TRUST FUNDS
- ----------- ----------- ---------------------------------------------------------------------
(NOTE 1)
STRONG OLD
MID CAP OPPORTUNITY EMERGING HARD REAL HARD COMBINED
PARTNERS GROWTH II FUND II BOND MARKETS ASSETS ESTATE ASSETS TOTAL
================================================================================================================ ==============
<C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 143,630 $ (7,482) $ 43,673 $ (14,621) $ 11,604 $ 627,676 $ (261) $ -- $ 6,375,604
(245,137) 10,860 (66,197) 61,830 (528,657) (1,068,009) (3,058) -- 2,964,511
(324,545) 130,770 11,247 305,864 40,753 (567,677) (346) 17 14,847,690
- ---------------------------------------------------------------------------------------------------------------- -------------
(426,052) 134,148 (11,277) 353,073 (476,300) (1,008,010) (3,665) 17 24,187,805
- ---------------------------------------------------------------------------------------------------------------- -------------
4,153,659 712,421 764,227 623,450 866,750 573,578 58,434 (23,550) 85,403,562
(149,179) (6,257) (22,064) (343,267) (62,766) (294,353) -- -- (6,164,480)
3,295,749 (40,591) 704,394 (830,498) (1,132,261) (2,574,019) (19,504) 24,730 63,987
- ---------------------------------------------------------------------------------------------------------------- -------------
7,300,229 665,573 1,446,557 (550,315) (328,277) (2,294,794) 38,930 1,180 79,303,069
- ---------------------------------------------------------------------------------------------------------------- -------------
6,874,177 799,721 1,435,280 (197,242) (804,577) (3,302,804) 35,265 1,197 103,490,874
- ---------------------------------------------------------------------------------------------------------------- -------------
1,240,625 101,377 305,763 3,462,503 1,916,263 4,533,186 -- 223 115,163,758
- ---------------------------------------------------------------------------------------------------------------- -------------
$ 8,114,802 $ 901,098 $ 1,741,043 $3,265,261 $ 1,111,686 $ 1,230,382 $ 35,265 $ 1,420 $ 218,654,632
================================================================================================================ ==============
</TABLE>
17
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT E
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
================================================================================
(1) GENERAL
Conseco Variable Annuity Account E ("Account E") is registered under the
Investment Company Act of 1940, as amended, as a unit investment trust. Account
E was established on November 12, 1993, and commenced operations on July 25,
1994, as a segregated investment account for individual and group variable
annuity contracts which are registered under the Securities Act of 1933. The
operations of Account E are included in the operations of Conseco Variable
Insurance Company (the "Company") pursuant to the provisions of the Texas
Insurance Code. The Company is an indirect wholly owned subsidiary of Conseco,
Inc., a publicly-held specialized financial services holding company listed on
the New York Stock Exchange.
Prior to June 1, 1995, Account E invested solely in shares of the portfolios
of the Conseco Series Trust. Currently, the following investment options are
available (effective date in parenthesis):
THE ALGER AMERICAN FUND
Growth Portfolio (June 1, 1996)
Leveraged AllCap
Portfolio (June 1, 1995)
MidCap Growth Portfolio (June 1, 1996)
Small Capitalization Portfolio (June 1, 1995)
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
Income and Growth Fund (May 1, 1998)
International Fund (May 1, 1997)
Value Fund (May 1, 1997)
BERGER INSTITUTIONAL PRODUCTS TRUST
100 Fund (June 1, 1996)
Growth and Income Fund (June 1, 1996)
Small Company Growth Fund (June 1, 1996)
BIAM International Fund (May 1, 1997)
CONSECO SERIES TRUST
Balanced Portfolio
Equity Portfolio
Fixed Income Portfolio
Government Securities Portfolio
Money Market Portfolio
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. ~ (JUNE 1, 1995)
DREYFUS STOCK INDEX FUND (JUNE 1, 1995)
DREYFUS VARIABLE INVESTMENT FUND (MAY 1, 1998)
International Value Portfolio
Disciplined Stock Portfolio
FEDERATED INSURANCE SERIES (JUNE 1, 1995)
High Income Bond Fund II
International Equity Fund II
Utility Fund II
INVESCO VARIABLE INVESTMENT FUNDS, INC. (MAY 1, 1998)
Equity Income Fund
High Yield Fund
JANUS ASPEN SERIES (JUNE 1, 1995)
Aggressive Growth Portfolio
Growth Portfolio
Worldwide Growth Portfolio
LAZARD RETIREMENT SERIES, INC. (MAY 1, 1998)
Equity Portfolio
Small Cap Portfolio
LORD ABBETT SERIES FUND, INC. (MAY 1, 1998)
Growth and Income Portfolio
MITCHELL HUTCHINS SERIES TRUST (MAY 1, 1998)
Growth and Income Portfolio
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST (MAY 1, 1997)
Limited Maturity Bond Portfolio
Partners Portfolio
STRONG VARIABLE INSURANCE FUNDS, INC.
Mid Cap Growth Fund II (May 1, 1997)
STRONG OPPORTUNITY FUND II (MAY 1, 1997)
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Hard Assets Fund (formerly Gold and Natural
Resources Fund) (June 1,1995)
Worldwide Bond Fund (June 1, 1995)
Worldwide Emerging Markets Fund (June 1, 1996)
Worldwide Real Estate Fund (May 1, 1998)
Van Eck Worldwide Insurance Trust terminated the Worldwide Hard Assets Fund
on May 1, 1997 and the Gold and Natural Resources Fund was renamed the Worldwide
Hard Assets Fund. The remaining units in the terminated fund are owned by a
contract owner who has not transferred the funds.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported increases and decreases in net assets from operations during the
reporting period. Actual results could differ from those estimates.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION, TRANSACTIONS AND INCOME
Investments in portfolio shares are valued using the net asset value of the
respective portfolios at the end of each New York Stock Exchange business day.
Investment share transactions are accounted for on a trade date basis (the date
the order to purchase or redeem shares is executed) and dividend income is
recorded on the ex-dividend date. The cost of investments in portfolio shares
sold is determined on a first-in first-out basis. Account E does not hold any
investments which are restricted as to resale.
Net investment income and net realized gains (losses) and unrealized
appreciation (depreciation) on investments are allocated to the contracts on
each valuation date based on each contract's pro rata share of the assets of
Account E as of the beginning of the valuation date.
FEDERAL INCOME TAXES
No provision for federal income taxes has been made in the accompanying
financial statements because the operations of Account E are included in the
total operations of the Company, which is treated as a life insurance company
for federal income tax purposes under the Internal Revenue Code. Net investment
income and realized gains (losses) are retained in Account E and are not taxable
until received by the contract owner or beneficiary in the form of annuity
payments or other distributions.
18
<PAGE>
CONSECO VARIABLE ANNUITY ACCOUNT E
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1999 AND 1998
================================================================================
ANNUITY RESERVES
Deferred annuity contract reserves are comprised of net contract purchase
payments less redemptions and benefits. These reserves are adjusted daily for
the net investment income and net realized gains (losses) and unrealized
appreciation (depreciation) on investments.
Annuity payment reserves for contracts under which contract owners are
receiving periodic retirement payments are computed according to the 1983 Group
Annuity Mortality Table. The assumed net investment rate is equal to the assumed
rate of accumulation. The annuity unit values for periodic retirement payments
are as follows:.
DECEMBER 31,
1999
- --------------------------------------------------------------------------------
Conseco Series Trust:
Money Market Portfolio................................ 1.000834
Federated Insurance Series:
High Income Bond Fund II.............................. 0.956791
Neuberger Berman Advisers Management Trust:
Partners Portfolio.................................... 1.013185
- --------------------------------------------------------------------------------
(3) PURCHASES AND SALES OF INVESTMENTS IN PORTFOLIO SHARES
The aggregate cost of purchases of investments in portfolio shares was
$139,192,174 and $137,408,045 for the years ended December 31, 1999 and 1998,
respectively. The aggregate proceeds from sales of investments in portfolio
shares were $74,610,705 and $51,611,210 for the years ended December 31, 1999
and 1998, respectively.
(4) DEDUCTIONS AND EXPENSES
Although periodic retirement payments to contract owners vary according to
the investment performance of the portfolios, such payments are not affected by
mortality or expense experience because the Company assumes the mortality and
expense risks under the contracts.
The mortality risk assumed by the Company results from the life annuity
payment option in the contracts in which the Company agrees to make annuity
payments regardless of how long a particular annuitant or other payee lives. The
annuity payments are determined in accordance with annuity purchase rate
provisions established at the time the contracts are issued. Based on the
actuarial determination of expected mortality, the Company is required to fund
any deficiency in the annuity payment reserves from its general account assets.
The expense risk assumed by the Company is the risk that the deductions for
sales and administrative expenses may prove insufficient to cover the actual
sales and administrative expenses. The Company deducts daily from Account E a
fee, which is equal on an annual basis to 1.25 percent of the daily value of the
total investments of Account E, for assuming the mortality and expense risks.
These fees were $3,319,669 and $2,119,799 for the years ended December 31, 1999
and 1998, respectively.
Pursuant to an agreement between Account E and the Company (which may be
terminated by the Company at any time), the Company provides sales and
administrative services to Account E, as well as a minimum death benefit prior
to retirement for the contracts. The Company may deduct a percentage of amounts
surrendered to cover sales expenses. The percentage varies up to 9.00 percent
based upon the number of years the contract has been held. In addition, the
Company deducts units from individual contracts annually and upon full surrender
to cover an administrative fee of $30 unless the value of the contract is
$25,000 or greater. This fee is recorded as a redemption in the accompanying
Statements of Changes in Net Assets. Sales and administrative charges were
$1,055,120 and $489,585 for the years ended December 31, 1999 and 1998,
respectively.
The Company also deducts daily from Account E a fee, which is equal on an
annual basis to 0.15 percent of the daily value of the total investments of
Account E, for administrative expenses. These expenses were $398,359 and
$254,376 for the years ended December 31, 1999 and 1998, respectively.
(5) OTHER TRANSACTIONS WITH AFFILIATES
Conseco Equity Sales, Inc., an affiliate of the Company, is the principal
underwriter and performs all variable annuity sales functions on behalf of the
Company through various retail broker/dealers including Conseco Securities, Inc.
(formerly Conseco Financial Services, Inc. prior to its name change in August
1999), an affiliate of the Company.
(6) NET ASSETS
Net assets consisted of the following at December 31, 1999:
- --------------------------------------------------------------------------------
Proceeds from the sales of units since organization,
less cost of units redeemed ................................ $227,818,892
Undistributed net investment income .......................... 34,190,128
Undistributed net realized gains on sales of investments...... 12,492,767
Net unrealized appreciation of investments ................... 75,638,052
- --------------------------------------------------------------------------------
Net assets ................................................. $350,139,839
================================================================================
19
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
================================================================================
TO THE BOARD OF DIRECTORS OF CONSECO VARIABLE
INSURANCE COMPANY AND CONTRACT OWNERS OF
CONSECO VARIABLE ANNUITY ACCOUNT E
In our opinion, the accompanying statement of assets and liabilities and the
related statements of operations and of changes in net assets present fairly, in
all material respects, the financial position of the Conseco Variable Annuity
Account E (the Account) at December 31, 1999, and the results of its operations
and the changes for the two years in the period then ended, in conformity with
accounting principles generally accepted in the United States. These financial
statements are the responsibility of the Account's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of portfolio shares owned at December 31, 1999 by correspondence with the funds,
provide a reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers
- --------------------------
Indianapolis, Indiana
February 10, 2000
20
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholder and Board of Directors
Conseco Variable Insurance Company
In our opinion, the accompanying balance sheet and the related statements
of operations, shareholder's equity and cash flows present fairly, in all
material respects, the financial position of Conseco Variable Insurance Company
(the "Company") at December 31, 1999 and 1998, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1999, in conformity with accounting principles generally accepted in the United
States. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
--------------------------------
PricewaterhouseCoopers LLP
April 13, 2000
F-1
<PAGE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY
BALANCE SHEET
December 31, 1999 and 1998
(Dollars in millions)
ASSETS
1999 1998
---- ----
<S> <C> <C>
Investments:
Actively managed fixed maturities at fair value (amortized cost:
1999 - $1,491.8; 1998 - $1,520.5)............................................... $1,398.7 $1,524.1
Equity securities at fair value (cost: 1999 - $47.8 million; 1998 - $46.0 million). 49.8 45.7
Mortgage loans..................................................................... 108.0 110.2
Policy loans....................................................................... 75.5 79.6
Other invested assets ............................................................. 50.8 120.3
-------- --------
Total investments............................................................ 1,682.8 1,879.9
Cash and cash equivalents.............................................................. 81.5 48.4
Accrued investment income.............................................................. 35.6 30.5
Cost of policies purchased............................................................. 131.6 98.0
Cost of policies produced.............................................................. 147.6 82.5
Reinsurance receivables................................................................ 26.4 22.2
Goodwill............................................................................... 45.3 46.7
Assets held in separate accounts....................................................... 1,457.0 696.4
Other assets........................................................................... 6.0 7.1
-------- --------
Total assets................................................................. $3,613.8 $2,911.7
======== ========
</TABLE>
(continued on next page)
The accompanying notes are an
integral part of the financial
statements.
F-2
<PAGE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY
BALANCE SHEET (Continued)
December 31, 1999 and 1998
(Dollars in millions, except per share amount)
LIABILITIES AND SHAREHOLDER'S EQUITY
1999 1998
---- ----
<S> <C> <C>
Liabilities:
Insurance liabilities:
Interest-sensitive products..................................................... $1,289.2 $1,365.2
Traditional products............................................................ 242.8 246.2
Claims payable and other policyholder funds..................................... 64.1 62.6
Liabilities related to separate accounts........................................ 1,457.0 696.4
Income tax liabilities............................................................. 33.4 37.5
Investment borrowings.............................................................. 135.1 65.7
Other liabilities.................................................................. 16.5 33.0
-------- --------
Total liabilities.......................................................... 3,238.1 2,506.6
-------- --------
Shareholder's equity:
Common stock and additional paid-in capital (par value $4.80 per share, 1,065,000
shares authorized, 1,043,565 shares issued and outstanding).................... 380.8 380.8
Accumulated other comprehensive loss............................................... (28.4) (.8)
Retained earnings.................................................................. 23.3 25.1
-------- --------
Total shareholder's equity................................................. 375.7 405.1
-------- --------
Total liabilities and shareholder's equity................................. $3,613.8 $2,911.7
======== ========
</TABLE>
The accompanying notes are an
integral part of the financial
statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY
STATEMENT OF OPERATIONS
for the years ended December 31, 1999, 1998 and 1997
(Dollars in millions)
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Revenues:
Insurance policy income.......................................... $ 72.1 $ 73.6 $ 75.7
Net investment income............................................ 297.6 198.0 222.6
Net gains (losses) from sale of investments...................... (10.0) 18.5 13.3
------ ------ ------
Total revenues............................................. 359.7 290.1 311.6
------ ------ ------
Benefits and expenses:
Insurance policy benefits........................................ 266.8 170.6 191.0
Amortization..................................................... 13.8 33.6 27.1
Other operating costs and expenses............................... 40.3 38.7 32.2
------ ------ ------
Total benefits and expenses................................ 320.9 242.9 250.3
------ ------ ------
Income before income taxes................................. 38.8 47.2 61.3
Income tax expense................................................... 13.6 16.6 22.1
------ ------ ------
Net income................................................. $ 25.2 $ 30.6 $ 39.2
====== ====== ======
</TABLE>
The accompanying notes are an
integral part of the financial
statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY
STATEMENT OF SHAREHOLDER'S EQUITY
for the years ended December 31, 1999, 1998 and 1997
(Dollars in millions)
Common stock Accumulated other
and additional comprehensive Retained
Total paid-in capital income (loss) earnings
----- --------------- ------------- --------
<S> <C> <C> <C> <C>
Balance, December 31, 1996................................. $396.9 $380.8 $ (4.6) $ 20.7
Comprehensive income, net of tax:
Net income............................................ 39.2 - - 39.2
Change in unrealized appreciation (depreciation) of
securities (net of applicable income tax expense
of $7.2)........................................... 13.3 - 13.3 -
------
Total comprehensive income........................ 52.5 - - -
Dividends on common stock............................... (32.5) - - (32.5)
------ ------ ------ ------
Balance, December 31, 1997................................. 416.9 380.8 8.7 27.4
Comprehensive income, net of tax:
Net income............................................ 30.6 - - 30.6
Change in unrealized appreciation (depreciation) of
securities (net of applicable income tax benefit
of $5.1)........................................... (9.5) - (9.5) -
------
Total comprehensive income........................ 21.1
Dividends on common stock............................... (32.9) - - (32.9)
------ ------ ------ ------
Balance, December 31, 1998................................. 405.1 380.8 (.8) 25.1
Comprehensive loss, net of tax:
Net income.............................................. 25.2 - - 25.2
Change in unrealized depreciation of securities (net
of applicable income tax benefit of $15.7 million).... (27.6) - (27.6) -
------
Total comprehensive loss.......................... (2.4)
Dividends on common stock............................... (27.0) - - (27.0)
------ ------ ------ ------
Balance, December 31, 1999................................. $375.7 $380.8 $(28.4) $ 23.3
====== ====== ====== ======
</TABLE>
The accompanying notes are an
integral part of the financial
statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY
STATEMENT OF CASH FLOWS
for the years ended December 31, 1999, 1998 and 1997
(Dollars in millions)
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income........................................................ $ 25.2 $ 30.6 $ 39.2
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization................................................ 13.8 43.0 27.1
Income taxes................................................ 11.4 (1.2) 6.7
Insurance liabilities....................................... 162.6 120.0 95.2
Accrual and amortization of investment income............... (11.4) 1.6 .3
Deferral of cost of policies produced....................... (62.7) (35.3) (31.8)
Net (gains) losses from sale of investments................. 10.0 (18.5) (13.3)
Other....................................................... .7 (38.3) (4.6)
--------- --------- -------
Net cash provided by operating activities................... 149.6 101.9 118.8
--------- --------- -------
Cash flows from investing activities:
Sales of investments.............................................. 904.8 1,185.0 755.2
Maturities and redemptions........................................ 109.0 145.5 150.4
Purchases of investments.......................................... (1,502.0) (1,420.7) (923.5)
--------- --------- -------
Net cash used by investing activities....................... (488.2) (90.2) (17.9)
--------- --------- -------
Cash flows from financing activities:
Deposits to insurance liabilities................................. 654.1 400.4 255.9
Investment borrowings............................................. 69.4 4.7 12.6
Withdrawals from insurance liabilities............................ (324.8) (385.0) (302.2)
Dividends paid on common stock.................................... (27.0) (32.9) (32.5)
--------- --------- -------
Net cash provided (used) by financing activities............ 371.7 (12.8) (66.2)
--------- --------- -------
Net increase (decrease) in cash and cash equivalents........ 33.1 (1.1) 34.7
Cash and cash equivalents, beginning of year......................... 48.4 49.5 14.8
--------- --------- -------
Cash and cash equivalents, end of year............................... $ 81.5 $ 48.4 $ 49.5
========= ========= =======
</TABLE>
The accompanying notes are an
integral part of the financial
statements.
F-6
<PAGE>
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Conseco Variable Insurance Company ("we" or the "Company") markets
tax-qualified annuities and certain employee benefit-related insurance products
through professional independent agents. Prior to its name change in October
1998, the Company was named Great American Reserve Insurance Company. Since
August 1995, the Company has been a wholly owned subsidiary of Conseco, Inc.
("Conseco"), a financial services holding company operating throughout the
United States. Conseco's life insurance subsidiaries develop, market and
administer supplemental health insurance, annuity, individual life insurance,
individual and group major medical insurance and other insurance products.
Conseco's finance subsidiaries originate, purchase, sell and service consumer
and commercial finance loans. On March 31, 2000, Conseco announced its plan to
explore the sale of its finance subsidiaries and its hiring of Lehman Brothers
to assist in the planned sale.
The following summary explains the accounting policies we use to arrive at
the more significant numbers in our financial statements. We prepare our
financial statements in accordance with generally accepted accounting principles
("GAAP"). We follow the accounting standards established by the Financial
Accounting Standards Board, the American Institute of Certified Public
Accountants and the Securities and Exchange Commission. We reclassified certain
amounts in our 1998 and 1997 financial statements and notes to conform with the
1999 presentation.
Investments
Fixed maturities are securities that mature more than one year after
issuance and include bonds, notes receivable and redeemable preferred stock.
Fixed maturities that we may sell prior to maturity are classified as actively
managed and are carried at estimated fair value, with any unrealized gain or
loss, net of tax and related adjustments, recorded as a component of
shareholder's equity. Fixed maturity securities that we intend to sell in the
near term are classified as trading and included in other invested assets. We
include any unrealized gain or loss on trading securities in net investment
gains.
Equity securities include investments in common stocks and non-redeemable
preferred stock. We carry these investments at estimated fair value. We record
any unrealized gain or loss, net of tax and related adjustments, as a component
of shareholder's equity.
Mortgage loans held in our investment portfolio are carried at amortized
unpaid balances, net of provisions for estimated losses.
Policy loans are stated at their current unpaid principal balances.
Other invested assets include trading securities and certain
non-traditional investments. Non-traditional investments include investments in
certain limited partnerships, mineral rights and promissory notes; we account
for them using either the cost method, or for investments in partnerships over
whose operations the Company exercises significant influence, the equity method.
We defer any fees received or costs incurred when we originate investments
(primarily mortgage loans). We amortize fees, costs, discounts and premiums as
yield adjustments over the contractual lives of the investments. We consider
anticipated prepayments on mortgage-backed securities in determining estimated
future yields on such securities.
When we sell a security (other than a trading security), we report the
difference between our sale proceeds and its amortized cost (determined based on
specific identification) as an investment gain or loss.
We regularly evaluate all of our investments based on current economic
conditions, credit loss experience and other investee-specific developments. If
there is a decline in a security's net realizable value that is other than
temporary, we treat it as a realized loss and reduce our cost basis of the
security to its estimated fair value.
F-7
<PAGE>
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
Cash and Cash Equivalents
Cash and cash equivalents include commercial paper, invested cash and other
investments purchased with maturities of less than three months. We carry them
at amortized cost, which approximates their estimated fair value.
Separate Accounts
Separate accounts are funds on which investment income and gains or losses
accrue directly to certain policyholders. The assets of these accounts are
legally segregated. They are not subject to the claims that may arise out of any
other business of the Company. We report separate account assets at market
value; the underlying investment risks are assumed by the contract holders. We
record the related liabilities at amounts equal to the market value of the
underlying assets. We record the fees earned for administrative and
contractholder services performed for the separate accounts in insurance policy
income.
Cost of Policies Produced
The costs that vary with, and are primarily related to, producing new
insurance business are referred to as cost of policies produced. We amortize
these costs using the interest rate credited to the underlying policy: (i) in
relation to the estimated gross profits for universal life-type and
investment-type products; or (ii) in relation to future anticipated premium
revenue for other products.
When we realize a gain or loss on investments backing our universal life or
investment-type products, we adjust the amortization to reflect the change in
estimated gross profits from the products due to the current realized gain or
loss and the effect of the event on future investment yields. We also adjust the
cost of policies produced for the change in amortization that would have been
recorded if actively managed fixed maturity securities had been sold at their
stated aggregate fair value and the proceeds reinvested at current yields. We
include the impact of this adjustment in accumulated other comprehensive income
(loss) within shareholder's equity.
Each year, we evaluate the recoverability of the unamortized balance of the
cost of policies produced. We consider estimated future gross profits or future
premiums, expected mortality or morbidity, interest earned and credited rates,
persistency and expenses in determining whether the balance is recoverable.
Cost of Policies Purchased
The cost assigned to the right to receive future cash flows from contracts
existing at the date of an acquisition is referred to as the cost of policies
purchased. The balance of this account is amortized, evaluated for recovery, and
adjusted for the impact of unrealized gains (losses) in the same manner as the
cost of policies produced described above.
The discount rate we use to determine the value of the cost of policies
purchased is the rate of return we need to earn in order to invest in the
business being acquired. In determining this required rate of return, we
consider many factors including: (i) the magnitude of the risks associated with
each of the actuarial assumptions used in determining expected future cash
flows; (ii) the cost of our capital required to fund the acquisition; (iii) the
likelihood of changes in projected future cash flows that might occur if there
are changes in insurance regulations and tax laws; (iv) the acquired company's
compatibility with other Company activities that may favorably affect future
cash flows; (v) the complexity of the acquired company; and (vi) recent prices
(i.e., discount rates used in determining valuations) paid by others to acquire
similar blocks of business.
Goodwill
Goodwill is the excess of the amount paid to acquire the Company over the
fair value of its net assets. Our analysis indicates that the anticipated
ongoing cash flows from the earnings of the Company extends significantly beyond
the maximum 40-year period allowed for goodwill amortization. Accordingly, we
amortize goodwill on the straight-line basis generally over a 40-year period. At
December 31, 1999, the total accumulated amortization of goodwill was $16.1
million. We continually
F-8
<PAGE>
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
monitor the value of our goodwill based on our estimates of future earnings. We
determine whether goodwill is fully recoverable from projected undiscounted net
cash flows from our earnings over the remaining amortization period. If we were
to determine that changes in such projected cash flows no longer support the
recoverability of goodwill over the remaining amortization period, we would
reduce its carrying value with a corresponding charge to expense or shorten the
amortization period (no such changes have occurred).
Recognition of Insurance Policy Income and Related Benefits and Expenses
on Insurance Contracts
Generally, we recognize insurance premiums for traditional life and
accident and health contracts as earned over the premium-paying periods. We
establish reserves for future benefits on a net-level premium method based upon
assumptions as to investment yields, mortality, morbidity, withdrawals and
dividends. We record premiums for universal life-type and investment-type
contracts that do not involve significant mortality or morbidity risk as
deposits to insurance liabilities. Revenues for these contracts consist of
mortality, morbidity, expense and surrender charges. We establish reserves for
the estimated present value of the remaining net costs of all reported and
unreported claims.
Reinsurance
In the normal course of business, we seek to limit our exposure to loss on
any single insured or to certain groups of policies by ceding reinsurance to
other insurance enterprises. We currently retain no more than $.5 million of
mortality risk on any one policy. We diversify the risk of reinsurance loss by
using a number of reinsurers that have strong claims-paying ratings. If any
reinsurer could not meet its obligations, the Company would assume the
liability. The likelihood of a material loss being incurred as the result of the
failure of one of our reinsurers is considered remote. The cost of reinsurance
is recognized over the life of the reinsured policies using assumptions
consistent with those used to account for the underlying policy. The cost of
reinsurance ceded totaled $23.1 million, $21.0 million and $24.2 million in
1999, 1998 and 1997, respectively. A receivable is recorded for the reinsured
portion of insurance policy benefits paid and liabilities for insurance
products. Reinsurance recoveries netted against insurance policy benefits
totaled $20.8 million, $21.8 million and $14.9 million in 1999, 1998 and 1997,
respectively.
Income Taxes
Our income tax expense includes deferred income taxes arising from
temporary differences between the tax and financial reporting bases of assets
and liabilities. In assessing the realization of deferred income tax assets, we
consider whether it is more likely than not that the deferred income tax assets
will be realized. The ultimate realization of deferred income tax assets depends
upon generating future taxable income during the periods in which temporary
differences become deductible. If future income is not generated as expected,
deferred income tax assets may need to be written off (no such write-offs have
occurred).
Investment Borrowings
As part of our investment strategy, we may enter into reverse repurchase
agreements and dollar-roll transactions to increase our investment return or to
improve our liquidity. We account for these transactions as collateral
borrowings, where the amount borrowed is equal to the sales price of the
underlying securities. Reverse repurchase agreements involve a sale of
securities and an agreement to repurchase the same securities at a later date at
an agreed-upon price. Dollar rolls are similar to reverse repurchase agreements
except that, with dollar rolls, the repurchase involves securities that are only
substantially the same as the securities sold. Such borrowings averaged $137.7
million during 1999 and $66.0 million during 1998. These borrowings were
collateralized by investment securities with fair values approximately equal to
the loan value. The weighted average interest rate on short-term collateralized
borrowings was 5.0 percent and 4.4 percent in 1999 and 1998, respectively. The
primary risk associated with short-term collateralized borrowings is that a
counterparty will be unable to perform under the terms of the contract. Our
exposure is limited to the excess of the net replacement cost of the securities
over the value of the short-term investments (such excess was not material at
December 31, 1999). We believe the counterparties to our reverse repurchase and
dollar-roll agreements are financially responsible and that the counterparty
risk is minimal.
F-9
<PAGE>
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
Use of Estimates
When we prepare financial statements in conformity with GAAP, we are
required to make estimates and assumptions that significantly affect various
reported amounts of assets and liabilities, and the disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and
expenses during the reporting periods. For example, we use significant estimates
and assumptions in calculating values for the cost of policies produced, the
cost of policies purchased, goodwill, insurance liabilities, liabilities related
to litigation, guaranty fund assessment accruals and deferred income taxes. If
our future experience differs materially from these estimates and assumptions,
our financial statements could be affected.
Fair Values of Financial Instruments
We use the following methods and assumptions to determine the estimated
fair values of financial instruments:
Investment securities. For fixed maturity securities (including redeemable
preferred stocks) and for equity and trading securities, we use quotes from
independent pricing services, where available. For investment securities
for which such quotes are not available, we use values obtained from
broker-dealer market makers or by discounting expected future cash flows
using a current market rate appropriate for the yield, credit quality, and
(for fixed maturity securities) the maturity of the investment being
priced.
Cash and cash equivalents. The carrying amount for these instruments
approximates their estimated fair value.
Mortgage loans and policy loans. We discount future expected cash flows for
loans included in our investment portfolio based on interest rates
currently being offered for similar loans to borrowers with similar credit
ratings. We aggregate loans with similar characteristics in our
calculations.
Other invested assets. We use quoted market prices, where available. When
quotes are not available, we estimate the fair value based on: (i)
discounted future expected cash flows; or (ii) independent transactions
which establish a value for our investment. When we are unable to estimate
a fair value, we assume a market value equal to carrying value.
Insurance liabilities for interest-sensitive products. We discount future
expected cash flows based on interest rates currently being offered for
similar contracts with similar maturities.
Investment borrowings. Due to the short-term nature of these borrowings
(terms generally less than 30 days), estimated fair values are assumed to
approximate the carrying amount reported in the balance sheet.
Here are the estimated fair values of our financial instruments:
<TABLE>
<CAPTION>
1999 1998
--------------------------- ------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
------ ----- ------ -----
(Dollars in millions)
<S> <C> <C> <C> <C>
Financial assets:
Actively managed fixed maturities............................ $1,398.7 $1,398.7 $1,524.1 $1,524.1
Equity securities ........................................... 49.8 49.8 45.7 45.7
Mortgage loans............................................... 108.0 102.8 110.2 119.0
Policy loans................................................. 75.5 75.5 79.6 79.6
Other invested assets........................................ 50.8 50.8 120.3 120.3
Cash and cash equivalents.................................... 81.5 81.5 48.4 48.4
Financial liabilities:
Insurance liabilities for interest-sensitive products (1).... 1,289.2 1,289.2 1,365.2 1,365.2
Investment borrowings........................................ 135.1 135.1 65.7 65.7
F-10
<PAGE>
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
<FN>
(1) The estimated fair value of the liabilities for interest-sensitive
products was approximately equal to its carrying value at December 31,
1999 and 1998. This was because interest rates credited on the vast
majority of account balances approximate current rates paid on similar
products and because these rates are not generally guaranteed beyond
one year. We are not required to disclose fair values for insurance
liabilities, other than those for interest-sensitive products .
However, we take into consideration the estimated fair values of all
insurance liabilities in our overall management of interest rate risk.
We attempt to minimize exposure to changing interest rates by matching
investment maturities with amounts due under insurance contracts.
</FN>
</TABLE>
Recently Issued Accounting Standards
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS 133"), as amended by
Statement of Financial Accounting Standards No. 137, "Deferral of the Effective
Date of FASB Statement No. 133" requires all derivative instruments to be
recorded on the balance sheet at estimated fair value. Changes in the fair value
of derivative instruments are to be recorded each period either in current
earnings or other comprehensive income, depending on whether a derivative is
designated as part of a hedge transaction and, if it is, on the type of hedge
transaction. SFAS 133 is required to be implemented in year 2001. We are
currently evaluating the impact of SFAS 133; at present, we do not believe it
will have a material effect on our consolidated financial position or results of
operations. Because of ongoing changes to implementation guidance, we do not
plan on adopting the new standard until the first quarter of 2001.
We implemented the Statement of Position 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use" ("SOP 98-1") on
January 1, 1999. SOP 98-1 defines internal use software and when the costs
associated with internal use software should be capitalized. The implementation
of SOP 98-1 did not have a material effect on our consolidated financial
position or results of operations.
2. INVESTMENTS:
At December 31, 1999, the amortized cost and estimated fair value of
actively managed fixed maturities and equity securities were as follows:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized unrealized unrealized fair
cost gains losses value
---- ----- ------ -----
(Dollars in millions)
<S> <C> <C> <C> <C>
Investment grade:
Corporate securities................................................ $ 840.6 $2.2 $59.3 $ 783.5
United States Treasury securities and obligations of
United States government corporations and agencies................ 15.5 .1 .7 14.9
States and political subdivisions................................... 11.7 - 1.1 10.6
Debt securities issued by foreign governments....................... 12.2 - 1.6 10.6
Mortgage-backed securities ......................................... 482.3 .2 22.7 459.8
Below-investment grade (primarily corporate securities)................ 129.5 2.4 12.6 119.3
-------- ---- ----- --------
Total actively managed fixed maturities........................... $1,491.8 $4.9 $98.0 $1,398.7
======== ==== ===== ========
Equity securities...................................................... $47.8 $3.9 $1.9 $49.8
===== ==== ==== =====
</TABLE>
F-11
<PAGE>
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
At December 31, 1998, the amortized cost and estimated fair value of
actively managed fixed maturities and equity securities were as follows:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized unrealized unrealized fair
cost gains losses value
---- ----- ------ -----
(Dollars in millions)
<S> <C> <C> <C> <C>
Investment grade:
Corporate securities................................................ $ 860.4 $20.7 $15.0 $ 866.1
United States Treasury securities and obligations of
United States government corporations and agencies................ 26.9 .8 .2 27.5
States and political subdivisions................................... 17.3 .3 - 17.6
Debt securities issued by foreign governments....................... 11.7 - .8 10.9
Mortgage-backed securities ......................................... 487.4 8.0 1.2 494.2
Below-investment grade (primarily corporate securities)................ 116.8 1.2 10.2 107.8
-------- ----- ----- --------
Total actively managed fixed maturities........................... $1,520.5 $31.0 $27.4 $1,524.1
======== ===== ===== ========
Equity securities...................................................... $ 46.0 $ .8 $ 1.1 $ 45.7
======== ===== ===== ========
</TABLE>
Accumulated other comprehensive loss included in shareholder's equity as of
December 31, 1999 and 1998, is summarized as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
(Dollars in millions)
<S> <C> <C>
Unrealized gains (losses) on investments............................................................. $(90.8) .9
Adjustments to cost of policies purchased and cost of policies produced.............................. 46.3 (2.1)
Deferred income tax benefit.......................................................................... 16.1 .4
------ -----
Accumulated other comprehensive loss.......................................................... $(28.4) $ (.8)
====== =====
</TABLE>
The following table sets forth the amortized cost and estimated fair value
of actively managed fixed maturities at December 31, 1999, by contractual
maturity. Actual maturities will differ from contractual maturities because
borrowers may have the right to call or prepay obligations with or without call
or prepayment penalties. Most of the mortgage-backed securities shown below
provide for periodic payments throughout their lives.
<TABLE>
<CAPTION>
Estimated
Amortized fair
cost value
---- -----
(Dollars in millions)
<S> <C> <C>
Due in one year or less........................................................................ $ 8.2 $ 8.2
Due after one year through five years.......................................................... 90.8 89.5
Due after five years through ten years......................................................... 279.9 259.6
Due after ten years............................................................................ 628.2 579.4
-------- --------
Subtotal.................................................................................. 1,007.1 936.7
Mortgage-backed securities (a)................................................................. 484.7 462.0
-------- --------
Total actively managed fixed maturities ............................................... $1,491.8 $1,398.7
======== ========
<FN>
- --------------------
(a) Includes below-investment grade mortgage-backed securities with an amortized
cost and estimated fair value of $2.4 million and $2.2 million,
respectively.
</FN>
</TABLE>
F-12
<PAGE>
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
Net investment income consisted of the following:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
(Dollars in millions)
<S> <C> <C> <C>
Actively managed fixed maturity securities........................................... $114.8 $118.4 $133.6
Equity securities.................................................................... 12.2 3.2 1.7
Mortgage loans....................................................................... 9.9 12.1 16.4
Policy loans......................................................................... 4.8 5.1 5.4
Other invested assets................................................................ 3.5 13.3 7.7
Cash and cash equivalents............................................................ 2.1 2.9 3.4
Separate accounts.................................................................... 151.8 44.1 55.7
------ ------ ------
Gross investment income.......................................................... 299.1 199.1 223.9
Investment expenses.................................................................. 1.5 1.1 1.3
------ ------ ------
Net investment income......................................................... $297.6 $198.0 $222.6
====== ====== ======
</TABLE>
The Company had no significant fixed maturity investments or mortgage loans
that were not accruing investment income in 1999, 1998 and 1997.
Investment gains (losses), net of investment expenses, were included in
revenue as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
(Dollars in millions)
<S> <C> <C> <C>
Fixed maturities:
Gross gains........................................................................ $ 8.6 $ 34.0 $20.6
Gross losses....................................................................... (14.5) (12.4) (5.1)
Other than temporary decline in fair value......................................... (1.3) - (.3)
------ ------ -----
Net investment gains (losses) from fixed maturities before expenses........... (7.2) 21.6 15.2
Other.................................................................................. .7 .1 2.2
------ ------ -----
Net investment gains (losses) before expenses................................. (6.5) 21.7 17.4
Investment expenses.................................................................... 3.5 3.2 4.1
------ ------ -----
Net investment gains (losses)................................................. $(10.0) $ 18.5 $13.3
====== ====== =====
</TABLE>
At December 31, 1999, the mortgage loan balance was primarily comprised of
commercial loans. Approximately 16 percent, 11 percent, 10 percent, 8 percent, 8
percent and 8 percent of the mortgage loan balance were on properties located in
Michigan, Texas, Florida, California, Georgia and Tennessee, respectively. No
other state comprised greater than 7 percent of the mortgage loan balance.
Noncurrent mortgage loans were insignificant at December 31, 1999. At December
31, 1999, our allowance for loss on mortgage loans was $.3 million.
Life insurance companies are required to maintain certain investments on
deposit with state regulatory authorities. Such assets had an aggregate carrying
value of $11.5 million at December 31, 1999.
The Company had no investments in any single entity in excess of 10 percent
of shareholder's equity at December 31, 1999, other than investments issued or
guaranteed by the United States government or a United States government agency.
F-13
<PAGE>
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
3. INSURANCE LIABILITIES:
These liabilities consisted of the following:
<TABLE>
<CAPTION>
Interest
Withdrawal Mortality rate
assumption assumption assumption 1999 1998
---------- ---------- ---------- ---- ----
(Dollars in millions)
<S> <C> <C> <C> <C> <C>
Future policy benefits:
Interest-sensitive products:
Investment contracts............................ N/A N/A (c) $ 976.7 $1,036.0
Universal life-type contracts................... N/A N/A N/A 312.5 329.2
---------- --------
Total interest-sensitive products............. 1,289.2 1,365.2
--------- --------
Traditional products:
Traditional life insurance contracts............ Company (a) 7.6% 137.0 139.9
experience
Limited-payment contracts....................... Company (b) 7.5% 105.8 106.3
experience, ---------- --------
if applicable
Total traditional products.................... 242.8 246.2
---------- --------
Claims payable and other policyholder funds ........ N/A N/A N/A 64.1 62.6
Liabilities related to separate accounts............ N/A N/A N/A 1,457.0 696.4
--------- --------
Total........................................... $3,053.1 $2,370.4
======== ========
<FN>
- -------------
(a) Principally, modifications of the 1975 - 80 Basic, Select and Ultimate
Tables.
(b) Principally, the 1984 United States Population Table and the NAIC 1983
Individual Annuitant Mortality Table.
(c) At December 31, 1999 and 1998, approximately 97 percent and 95 percent,
respectively, of this liability represented account balances where
future benefits are not guaranteed. The weighted average interest rate
on the remainder of the liabilities representing the present value of
guaranteed future benefits was approximately 6 percent at December 31,
1999.
</FN>
</TABLE>
4. INCOME TAXES:
Income tax liabilities were comprised of the following:
<TABLE>
<CAPTION>
1999 1998
---- ----
(Dollars in millions)
<S> <C> <C>
Deferred income tax liabilities (assets):
Investments (primarily actively managed fixed maturities).................................. $ 3.6 $ 5.4
Cost of policies purchased and cost of policies produced................................... 75.3 56.7
Insurance liabilities...................................................................... (39.2) (28.2)
Unrealized depreciation.................................................................... (16.1) (.4)
Other...................................................................................... 10.2 (2.2)
------ ------
Deferred income tax liabilities....................................................... 33.8 31.3
Current income tax liabilities (assets)........................................................ (.4) 6.2
------ ------
Income tax liabilities................................................................ $ 33.4 $ 37.5
====== ======
</TABLE>
F-14
<PAGE>
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
Income tax expense was as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
(Dollars in millions)
<S> <C> <C> <C>
Current tax provision..................................................................... $ 4.3 $20.8 $16.3
Deferred tax provision (benefit).......................................................... 9.3 (4.2) 5.8
----- ----- -----
Income tax expense............................................................... $13.6 $16.6 $22.1
===== ===== =====
</TABLE>
A reconciliation of the income tax provisions based on the U.S. statutory
corporate tax rate to the provisions reflected in the statement of operations is
as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
(Dollars in millions)
<S> <C> <C> <C>
Tax on income before income taxes at statutory rate....................................... 35.0% 35.0% 35.0%
State taxes............................................................................... 1.5 1.0 .7
Other..................................................................................... (1.4) (.8) .3
---- ---- ----
Income tax expense............................................................... 35.1% 35.2% 36.0%
==== ==== ====
</TABLE>
5. OTHER DISCLOSURES:
Litigation
The Company is involved on an ongoing basis in lawsuits related to its
operations. Although the ultimate outcome of certain of such matters cannot be
predicted, such lawsuits currently pending against the Company are not expected,
individually or in the aggregate, to have a material adverse effect on the
Company's financial condition, cash flows or results of operations.
Guaranty Fund Assessments
The balance sheet at December 31, 1999, includes: (i) accruals of $1.6
million, representing our estimate of all known assessments that will be levied
against the Company by various state guaranty associations based on premiums
written through December 31, 1999; and (ii) receivables of $1.1 million that we
estimate will be recovered through a reduction in future premium taxes as a
result of such assessments. These estimates are subject to change when the
associations determine more precisely the losses that have occurred and how such
losses will be allocated among the insurance companies. We recognized expense
for such assessments of $1.1 million in 1999, $1.1 million in 1998 and $1.2
million in 1997.
Related Party Transactions
The Company operates without direct employees through management and
service agreements with subsidiaries of Conseco. Fees for such services
(including data processing, executive management and investment management
services) are based on Conseco's direct and directly allocable costs plus a 10
percent margin. Total fees incurred by the Company under such agreements were
$43.4 million in 1999, $37.8 million in 1998 and $36.7 million in 1997.
During 1998 and 1997, the Company purchased $13.0 million and $11.2 million
par value, respectively, of senior subordinated notes issued by subsidiaries of
Conseco. The total carrying value of such notes purchased during 1998, 1997 and
prior years was $45.5 million at December 31, 1998. Such notes are classified as
"other invested assets" in the accompanying balance sheet. In 1999, all such
notes were repurchased from the Company by Conseco or its subsidiaries.
F-15
<PAGE>
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
6. OTHER OPERATING STATEMENT DATA:
Insurance policy income consisted of the following:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
(Dollars in millions)
<S> <C> <C> <C>
Traditional products:
Direct premiums collected......................................................... $700.4 $445.8 $309.6
Reinsurance assumed............................................................... 18.7 15.6 14.9
Reinsurance ceded................................................................. (23.1) (21.0) (24.2)
------ ------ ------
Premiums collected, net of reinsurance...................................... 696.0 440.4 300.3
Less premiums on universal life and products
without mortality and morbidity risk which are
recorded as additions to insurance liabilities ................................ 654.1 400.4 255.9
------ ------ ------
Premiums on traditional products with mortality or morbidity risk,
recorded as insurance policy income...................................... 41.9 40.0 44.4
Fees and surrender charges on interest-sensitive products............................. 30.2 33.6 31.3
------ ------ ------
Insurance policy income..................................................... $ 72.1 $ 73.6 $ 75.7
====== ====== ======
</TABLE>
The five states with the largest shares of 1999 collected premiums were
California (14 percent), Texas (14 percent), Florida (13 percent), Michigan (8.8
percent) and Indiana (5.2 percent). No other state accounted for more than 4
percent of total collected premiums.
Changes in the cost of policies purchased were as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
(Dollars in millions)
<S> <C> <C> <C>
Balance, beginning of year............................................................ $ 98.0 $106.4 $143.0
Amortization...................................................................... (4.1) (21.1) (15.4)
Amounts related to fair value adjustment of actively managed fixed maturities 37.7 11.8 (21.2)
Other ............................................................................ - .9 -
------ ------ ------
Balance, end of year.................................................................. $131.6 $ 98.0 $106.4
====== ====== ======
</TABLE>
Based on current conditions and assumptions as to future events on all
policies in force, the Company expects to amortize approximately 9 percent of
the December 31, 1999, balance of cost of policies purchased in 2000, 10 percent
in 2001, 9 percent in 2002, 7 percent in 2003 and 6 percent in 2004. The
discount rates used to determine the amortization of the cost of policies
purchased ranged from 3.6 percent to 8.0 percent and averaged 5.8 percent.
Changes in the cost of policies produced were as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
(Dollars in millions)
<S> <C> <C> <C>
Balance, beginning of year............................................................ $ 82.5 $ 55.9 $38.2
Additions......................................................................... 62.7 35.3 31.8
Amortization...................................................................... (8.3) (11.0) (10.2)
Amounts related to fair value adjustment of actively managed fixed maturities 10.7 2.3 (3.9)
------ ------ -----
Balance, end of year.................................................................. $147.6 $ 82.5 $55.9
====== ====== =====
</TABLE>
F-16
<PAGE>
CONSECO VARIABLE INSURANCE COMPANY
Notes to Financial Statements
------------------------------
7. STATEMENT OF CASH FLOWS:
Income taxes paid during 1999, 1998, and 1997, were $2.1 million, $17.1
million and $14.8 million, respectively.
8. STATUTORY INFORMATION:
Statutory accounting practices prescribed or permitted by regulatory
authorities for insurance companies differ from GAAP. The Company reported the
following amounts to regulatory agencies:
<TABLE>
<CAPTION>
1999 1998
---- ----
(Dollars in millions)
<S> <C> <C>
Statutory capital and surplus.................................................. $112.6 $134.0
Asset valuation reserve........................................................ 41.4 30.9
Interest maintenance reserve................................................... 66.7 73.1
------- ------
Total...................................................................... $220.7 $238.0
====== ======
</TABLE>
Our statutory net income was $14.6 million, $32.7 million and $32.7 million
in 1999, 1998 and 1997, respectively. Statutory net income differs from net
income presented in our financial statements prepared in accordance with GAAP,
primarily because for GAAP reporting we are required to defer and amortize costs
that vary with and are primarily related to the production of new business as
described in note 1.
State insurance laws generally restrict the ability of insurance companies
to pay dividends or make other distributions. We may pay dividends to our parent
in 2000 of $12.8 million without permission from state regulatory authorities.
In 1998, the National Association of Insurance Commissioners adopted
codified statutory accounting principles, which are expected to constitute the
only source of prescribed statutory accounting practices and are effective in
2001. The changes to statutory accounting practices resulting from the
codification are not expected to have a material effect on the statutory capital
and surplus or statutory operating earnings data shown above.
F-17
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) The financial statements of the Separate Account and Conseco Variable
Insurance Company (the "Company") are included in Part B hereof.
(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)-Articles of Amendment to the Articles of Incorporation
of the Company
(6) (iii) - Amended and Restated By-Laws of Conseco Variable
Insurance Company
(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 Management 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.**
(8) (viii)-Form of Fund Participation Agreement between Rydex
Variable Trust 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. 6 to Form N-4
(File Nos. 33-74092 and 811-08288) filed electronically on May 15, 1998.
ITEM 25. DIRECTORS AND OFFICERS OF CONSECO VARIABLE
The following table sets forth certain information regarding the executive
officers of the Company who are engaged directly or indirectly in activities
relating to the Variable Account or the Contracts. Their principal business
address is 11825 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
James S. Adams Senior Vice President, Chief Accounting
Officer and Treasurer
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)
Conseco Life Insurance Company of Texas (Texas)
Conseco Variable Insurance Company (Texas)
Conseco Annuity Assurance Company (Illinois)
Vulcan Life Insurance Company (Indiana) - (98%)
Conseco Direct Life Insurance Company (Pennsylvania)
Wabash Life Insurance Company (Indiana)
Conseco Life Insurance Company (Indiana)
Washington National Insurance Company (Illinois)
Conseco Senior Health Insurance Company (Pennsylvania)
Pioneer Life Insurance Company (Illinois)
Conseco Life Insurance Company of New York (New York)
Conseco Medical Insurance Company (Illinois)
Continental Life Insurance Company (Texas)
United Presidential Life Insurance Company (Indiana)
Conseco Health Insurance Company (Arizona)
Frontier National Life Insurance Company (Ohio)
Conseco Capital Management, Inc. (Delaware)
Conseco Equity Sales, Inc. (Texas)
Conseco Securities, Inc. (Delaware)
Conseco Services, LLC (Indiana)
Marketing Distribution Systems Consulting Group, Inc. (Delaware)
Conseco Finance Corp. (Delaware)
Conseco Finance Servicing Corp. (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, Conseco Variable Annuity Account C, Conseco Variable
Annuity Account E, Conseco Variable Annuity Account F, Conseco Variable
Account G, Conseco Variable Annuity Account H, each being segregated asset
accounts established pursuant to Texas law by Bankers National Life
Insurance Company and Conseco Variable Insurance Company, respectively.
Shares of Conseco Series Trust are also sold to BMA Variable Life Account A
of Business Men's Assurance Company of America.
** 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 April 13, 2000, there were 14,766 Qualified Contract Owners and
1,973 Non-Qualified Contract Owners.
ITEM 28. INDEMNIFICATION
The Corporation shall indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal, administrative, or
investigative, by reason of the fact that he is or was a director or
officer of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
(collectively, "Agent") against expenses (including attorneys' fees),
judgments, fines, penalties, court costs and amounts paid in settlement
actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order,
settlement (whether with or without court approval), conviction or upon
a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Agent did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of
the Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was unlawful. If several claims,
issues or matters are involved, an Agent may be entitled to indemnification as
to some matters even though he is not entitled as to other matters. Any director
or officer of the Corporation serving in any capacity of another corporation, of
which a majority of the shares entitled to vote in the election of its directors
is held, directly or indirectly, by the Corporation, shall be deemed to be doing
so at the request of the Corporation.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to members of the Company'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. The officers,
directors and employees of Conseco Variable as well as those 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):
Conseco Variable Annuity Account C
Conseco Variable Annuity Account F
Conseco Variable Annuity Account G
Conseco Variable Annuity Account H
Conseco Fund Group
Rydex Advisor Variable Annuity Account
BMA Variable Life Account A
(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
James S. Adams Senior Vice President, Chief Accounting
Officer, Treasurer and Director
Vice President, General Counsel,
William P. Kovacs Secretary, and Director
William T. Devanney, Jr. Senior Vice President, Corporate Taxes
Christene H. Darnell Vice President, Management Reporting
Donald B. Johnston Vice President, Director Mutual Fund
Sales & Marketing
<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 the Company 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 Conseco Variable
Insurance Company, 11815 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:
(a) 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;
(b) 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;
(c) 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
(d) 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 (a) - (d) above have been complied with.
5. The Company 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 the
Company.
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, as amended, 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 20th day of April, 2000.
CONSECO VARIABLE ANNUITY
ACCOUNT E
(Registrant)
By: Conseco Variable Insurance Company
By: /s/THOMAS J. KILIAN
----------------------------------------
CONSECO VARIABLE 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/NGAIRE E. CUNEO Director 4/20/00
- -------------------------- ---------------
Ngaire E. Cuneo
/s/THOMAS J. KILIAN 4/20/00
- -------------------------- Director ----------------
Thomas J. Kilian
/s/STEPHEN C. HILBERT Director and Chairman of the Board 4/20/00
- -------------------------- (Principal Executive Officer) ---------------
Stephen C. Hilbert
/s/ROLLIN M. DICK Director, Executive Vice President 4/20/00
- -------------------------- and Chief Financial Officer (Principal ----------------
Rollin M. Dick Financial Officer)
/s/JOHN J. SABL Director 4/20/00
- --------------------------- ----------------
John J. Sabl
/s/JAMES S. ADAMS Senior Vice President and Treasurer 4/20/00
- --------------------------- (Chief Accounting Officer) ----------------
James S. Adams
</TABLE>
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- -------- -------
EX-99.B6 (ii) Articles of Amendment to the Articles of Incorporation of
the Company
EX-99.B6 (iii) Amended and Restated By-Laws of Conseco Variable Insurance
Company
EX-99.B8 (viii) Form of Fund Participation Agreement between Rydex Variable
Trust and
the Company.
EX-99.B9 Opinion and Consent of Counsel
EX-99.B10 Consent of Independent Accountants
EX-99.B13 Schedule for Computation of Performance Quotations
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
GREAT AMERICAN RESERVE INSURANCE COMPANY
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act and Article 3.05 of the Insurance Code of Texas, Great American
Reserve Insurance Company (herein after referred to as the "Company") adopts the
following Articles of Amendment to its Articles of Incorporation:
ARTICLE ONE
The following amendment to the Articles of Incorporation was adopted by the
sole shareholder of the Company pursuant to a Written Consent dated June 3,
1998:
RESOLVED, that Article One of the Articles of Incorporation of the Company
be amended to read as follows:
"ARTICLE ONE
The name of the corporation shall be Conseco Variable Insurance Company."
ARTICLE TWO
The total number of shares of the Company outstanding at the time of such
adoption was one million forty-three thousand five hundred sixty-five
(1,043,565) and the number of shares entitled to vote thereon was one million
forty-three thousand five hundred sixty-five (1,043,565).
ARTICLE THREE
The holder of all of the one million forty-three thousand five hundred
sixty-five (1,043,565) shares outstanding and entitled to vote on said amendment
has signed a consent in writing voting for said amendment. No votes were cast
against said amendment.
IN WITNESS WHEREOF, the undersigned officer executes these Articles of
Amendment to the Articles of Incorporation of Great American Reserve Insurance
Company, this 15th day of June 1998.
GREAT AMERICAN RESERVE INSURANCE
COMPANY
Thomas J. Kilian, President
Attest:
Michael A. Colliflower, Assistant
Secretary
STATE OF INDIANA )
)
COUNTY OF HAMILTON )
Before me, a Notary Public in and for said County and State personally
appeared Thomas J. Kilian, President, and Michael A. Colliflower, Assistant
Secretary, of Great American Reserve Insurance Company who acknowledge the
execution of the foregoing instrument, and who, having been duly sworn, stated
that any representations contained therein are true.
Witness my hand and Notarial Seal this 15th day of June, 1998.
_____________________, Notary Public
Residing in ___________ County, IN
Commission Expires ____________
Amended and Restated
BY-LAWS
OF
CONSECO VARIABLE INSURANCE COMPANY
December 4, 1998
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
ARTICLE I. Indentification
<S> <C> <C>
Section 1. Name................................................................................ 1
Section 2. Registered Office and Registered Agent.............................................. 1
Section 3. Principal Office.................................................................... 1
Section 4. Other Offices....................................................................... 1
Section 5. Seal................................................................................ 1
Section 6. Fiscal Year......................................................................... 1
ARTICLE II. Shareholders.
Section 1. Place of Meeting.................................................................... 2
Section 2. Annual Meetings..................................................................... 2
Section 3. Special Meetings.................................................................... 2
Section 4. Notice of Meeting................................................................... 2
Section 5. Waiver of Notice.................................................................... 2
Section 6. Voting at Meetings.................................................................. 3
(a) Voting Rights.................................................................. 3
(b) Record Date.................................................................... 3
(c) Proxies........................................................................ 3
(d) Quorum......................................................................... 4
(e) Adjournments................................................................... 4
Section 7. List of Shareholders................................................................ 4
Section 8. Action by Written Consent........................................................... 5
Section 9. Meeting by Telephone or Similar
Communications Equipment............................................................ 5
ARTICLE III. Directors.
Section 1. Duties.............................................................................. 6
Section 2. Number of Directors................................................................. 6
Section 3. Election and Term................................................................... 6
Section 4. Resignation......................................................................... 6
Section 5. Vacancies........................................................................... 7
Section 6. Annual Meetings..................................................................... 7
Section 7. Regular Meetings.................................................................... 7
Section 8. Special Meetings.................................................................... 7
Section 9. Notice.............................................................................. 7
Section 10. Waiver of Notice.................................................................... 7
Section 11. Business to be Transacted........................................................... 8
Section 12. Quorum - Adjournment if Quorum is Not
Present............................................................................. 8
(i)
Page
Section 13. Presumption of Assent............................................................... 8
Section 14. Action by Written Consent........................................................... 9
Section 15. Committees.......................................................................... 9
Section 16. Meeting by Telephone or Similar
Communication Equipment.............................................................10
ARTICLE IV. Officers.
Section 1. Principal Officers..................................................................10
Section 2. Election and Terms..................................................................10
Section 3. Resignation and Removal.............................................................10
Section 4. Vacancies...........................................................................11
Section 5. Powers and Duties of Officers.......................................................11
Section 6. Chairman of the Board...............................................................11
Section 7. President...........................................................................11
Section 8. Vice President......................................................................12
Section 9. Secretary...........................................................................12
Section 10. Treasurer...........................................................................12
Section 11. Assistant Secretaries...............................................................13
Section 12. Assistant Treasurers................................................................13
Section 13. Delegation of Authority.............................................................13
Section 14. Securities of Other Corporation.....................................................14
ARTICLE V. Directors' Services, Limitation of
Liability and Reliance on Corporate
Records, and Interest of Directors
in Contracts.
Section 1. Services............................................................................14
Section 2. General Limitation of Liability.....................................................14
Section 3. Reliance on Corporate Records and
Other Information...................................................................15
Section 4. Interest of Directors in Contracts..................................................15
ARTICLE VI. Indemnification.
Section 1. Indemnification against Underlying
Liability...........................................................................16
Section 2. Successful Defense..................................................................17
Section 3. Determination of Conduct............................................................17
Section 4. Payment of Expenses in Advance......................................................18
Section 5. Indemnity Not Exclusive.............................................................18
Section 6. Insurance Indemnification...........................................................18
Section 7. Employee Benefit Plans..............................................................19
Section 8. Application of Indemnification and
Advancement of Expenses.............................................................19
Section 9. Indemnification Payments............................................................19
(ii)
Page
ARTICLE VII. Shares.
Section 1. Share Certificates..................................................................20
Section 2. Transfer of Shares..................................................................20
Section 3. Registered Holders..................................................................20
Section 4. Lost, Destroyed and Mutilated
Certificates........................................................................21
Section 5. Consideration for Shares............................................................21
Section 6. Payment for Shares..................................................................21
Section 7. Distributions to Shareholders.......................................................22
Section 8. Regulations.........................................................................22
ARTICLE VIII. Corporate Books and Reports.
Section 1. Place of Keeping Corporate Books
and Records.........................................................................22
Section 2. Place of Keeping Certain Corporate
Books and Records...................................................................22
Section 3. Permanent Records...................................................................23
Section 4. Shareholder Records.................................................................23
Section 5. Shareholder Rights of Inspection....................................................23
Section 6. Additional Rights of Inspection.....................................................23
ARTICLE IX. Miscellaneous.
Section 1. Notice and Waiver of Notice.........................................................24
Section 2. Depositories........................................................................24
Section 3. Signing of Checks, Notes, etc.......................................................25
Section 4. Gender and Number...................................................................25
Section 5. Laws................................................................................25
Section 6. Headings............................................................................25
ARTICLE X. Amendments..........................................................................25
- --------- ----------
ARTICLE XI. The Texas Business Corporation Act..................................................26
- ---------- ----------------------------------
</TABLE>
(iii)
<PAGE>
BY-LAWS
OF
CONSECO VARIABLE INSURANCE COMPANY
ARTICLE I
Identification
Section 1. Name. The name of the Corporation is Conseco Variable Insurance
Company (hereinafter referred to as the "Corporation").
Section 2. Registered Office and Registered Agent. The
Registered Office and Registered Agent of the Corporation is located in
Amarillo, Texas and may be changed from time to time by the Board of Directors
in the manner provided by law.
Section 3. Principal Office. The address of the Principal
Office of the Corporation is 11815 North Pennsylvania Street, Carmel, Indiana
46032. The Principal Office of the Corporation shall be the principal executive
and administrative offices of the Corporation, and such Principal Office may be
changed from time to time by the Board of Directors in the manner provided by
law and need not be the same as the Registered Office of the Corporation.
Section 4. Other Offices. The Corporation may also have
offices at such other places or locations, within or without the State of Texas,
as the Board of Directors may determine or the business of the Corporation may
require.
Section 5. Seal. The Corporation need not use a seal. If one
is used, it shall be circular in form and mounted upon a metal die suitable for
impressing the same upon paper. About the upper periphery of the seal shall
appear the words "Conseco Variable Insurance Company" and about the lower
periphery thereof the word "Texas". In the center of the seal shall appear the
word "Seal". The seal may be altered by the Board of Directors at its pleasure
and may be used by causing it or a facsimile thereof to be impressed, affixed,
printed or otherwise reproduced.
Section 6. Fiscal Year. The fiscal year of the Corporation shall begin at
the beginning of the first day of January in each year and end at the close of
the last day of December next succeeding.
[PG NUMBER]
ARTICLE II
Shareholders
Section 1. Place of Meeting. All meetings of shareholders of
the Corporation shall be held at such place, within or without the State of
Texas, as may be determined by the President or Board of Directors and specified
in the notices or waivers of notice thereof or proxies to represent shareholders
at such meetings.
Section 2. Annual Meetings. An annual meeting of shareholders
shall be held each year on such date and at such time as may be determined by
the President or Board of Directors. The failure to hold an annual meeting at
the designated time shall not affect the validity of any corporate action. Any
and all business of any nature or character may be transacted, and action may be
taken thereon, at any annual meeting, except as otherwise provided by law or by
these By-laws.
Section 3. Special Meetings. A special meeting of shareholders
shall be held: (a) on call of the Board of Directors or the President; or (b) if
the holders of at least twenty-five percent (25%) of all the votes entitled to
be cast on any issue proposed to be considered at the proposed special meeting
sign, date and deliver to the Secretary one (1) or more written demands for the
meeting describing the purpose or purposes for which it is to be held. At any
special meeting of the shareholders, only business within the purpose or
purposes described in the notice of the meeting may be conducted.
Section 4. Notice of Meeting. Written or printed notice
stating the date, time and place of a meeting and, in case of a special meeting,
the purpose or purposes for which the meeting is called, shall be delivered or
mailed by the Secretary, or by the officers or persons calling the meeting, to
each shareholder of record of the Corporation entitled to vote at the meeting,
at such address as appears upon the records of the Corporation, no fewer than
ten (10) days nor more than sixty (60) days, before the meeting date. If mailed,
such notice shall be effective when mailed if correctly addressed to the
shareholder's address shown in the Corporation's current record of shareholders.
Section 5. Waiver of Notice. A shareholder may waive any
notice required by law, the Articles of Incorporation or these By-laws before or
after the date and time stated in the notice. The waiver by the shareholder
entitled to the notice must be in writing and be delivered to the Corporation
for inclusion in the minutes or filing with the corporate records. A
shareholder's attendance at a meeting, in person or by proxy: (a) waives
objection to lack of notice or defective notice of the meeting, unless the
shareholder at the beginning of the meeting objects to holding the meeting or
transacting business at the meeting; and (b) waives objection to consideration
of a particular matter at the meeting that is not within the purpose or purposes
described in the meeting notice, unless the shareholder objects to considering
the matter when it is presented.
Section 6. Voting at Meetings.
(a) Voting Rights. At each meeting of the
shareholders, each outstanding share, regardless of class, is
entitled to one (1) vote on each matter voted on at such
meeting, except to the extent cumulative voting is allowed by
the Articles of Incorporation. Only shares are entitled to
vote.
(b) Record Date. The record date for purposes of
determining shareholders entitled to vote at any meeting shall
be ten (10) days prior to the date of such meeting or such
different date not more than seventy (70) days prior to such
meeting as may be fixed by the Board of Directors.
(c) Proxies.
(1) A shareholder may vote the shareholder's
shares in person or by proxy.
(2) A shareholder may appoint a proxy to
vote or otherwise act for the shareholder by
executing in writing an appointment form, either
personally or by the shareholder's attorney-in-fact.
For purposes of this Section, a proxy appointed by
telegram, telex, telecopy or other document
transmitted electronically for or by a shareholder
shall be deemed "executed in writing" by the
shareholder.
(3) An appointment of a proxy is effective
when received by the Secretary or other officer or
agent authorized to tabulate votes. An appointment is
valid for eleven (11) months, unless a longer period
is expressly provided in the appointment form.
(4) An appointment of a proxy is revocable
by the shareholder, unless the appointment form
conspicuously states that it is irrevocable and the
appointment is coupled with an interest.
(d) Quorum. At all meetings of shareholders, a
majority of the votes entitled to be cast on a particular
matter constitutes a quorum on that matter. If a quorum
exists, action on a matter (other than the election of
directors) is approved if the votes cast favoring the action
exceed the votes cast opposing the action, unless the Articles
of Incorporation or law require a greater number of
affirmative votes.
(e) Adjournments. Any meeting of shareholders,
including both annual and special meetings and any
adjournments thereof, may be adjourned to a different date,
time or place. Notice need not be given of the new date, time
or place if the new date, time or place is announced at the
meeting before adjournment, even though less than a quorum is
present. At any such adjourned meeting at which a quorum is
present, in person or by proxy, any business may be transacted
which might have been transacted at the meeting as originally
notified or called.
Section 7. List of Shareholders.
(a) After a record date has been fixed for a meeting
of shareholders, the Secretary shall prepare or cause to be
prepared an alphabetical list of the names of the shareholders
of the Corporation who are entitled to vote at such meeting.
The list shall show the address of and number of shares held
by each shareholder.
(b) The shareholders' list must be available for
inspection by any shareholder entitled to vote at the meeting,
beginning five (5) business days before the date of the
meeting for which the list was prepared and continuing through
the meeting, at the Corporation's principal office or at a
place identified in the meeting notice in the city where the
meeting will be held. Subject to the restrictions of
applicable law, a shareholder, or the shareholder's agent or
attorney authorized in writing, is entitled on written demand
to inspect and to copy the list, during regular business hours
and at the shareholder's expense, during the period it is
available for inspection.
(c) The Corporation shall make the shareholders' list
available at the meeting, and any shareholder, or the
shareholder's agent or attorney authorized in writing, is
entitled to inspect the list at any time during the meeting or
any adjournment.
Section 8. Action by Written Consent. Any action required or
permitted to be taken at any meeting of the shareholders may be taken without a
meeting if the action is taken by all the shareholders entitled to vote on the
action. The action must be evidenced by one or more written consents describing
the action taken, signed by all the shareholders entitled to vote on the action,
and delivered to the Corporation for inclusion in the minutes or filing with the
corporate records. Such action is effective when the last shareholder signs the
consent, unless the consent specifies a different prior or subsequent effective
date. Such consent shall have the same force and effect as a unanimous vote at a
meeting of the shareholders, and may be described as such in any document or
instrument.
Section 9. Meeting by Telephone or Similar Communications
Equipment. Any or all shareholders may participate in and hold a meeting of
shareholders by, or through the use of, any means of conference telephone or
other similar communications equipment by which all persons participating in the
meeting may simultaneously hear each other during the meeting. Participation in
a meeting pursuant to this Section shall constitute presence in person at such
meeting, except where a person participates in the meeting for the express
purposes of: (a) objecting to holding the meeting or transacting business at the
meeting on the ground that the meeting is not lawfully called or convened; or
(b) objecting to the consideration of a particular matter that is not within the
purpose or purposes described in the meeting notice.
ARTICLE III
Directors
Section 1. Duties. The business, property and affairs of the
Corporation shall be managed and controlled by the Board of Directors and,
subject to such restrictions, if any, as may be imposed by law, the Articles of
Incorporation or by these By-laws, the Board of Directors may, and are fully
authorized to, do all such lawful acts and things as may be done by the
Corporation which are not directed or required to be exercised or done by the
shareholders. Directors need not be residents of the State of Texas or
shareholders of the Corporation.
Section 2. Number of Directors. The Board of Directors shall
consist of at least five (5) and not more than fifteen (15) directors. A Board
of Directors shall be chosen annually by the shareholders at their annual
meeting, except as hereinafter provided. Subject to Article VI of the Articles
of Incorporation, the number of directors may be increased or decreased from
time to time by amendment to these By-Laws, but no decrease shall have the
effect of shortening the term of any incumbent director. A person need not be a
shareholder of the Corporation to serve as a Director. The Directors' terms of
office shall be for one year, or until their successors are elected and have
qualified.
Section 3. Election and Term. Except as otherwise provided in
Section 5 of this Article, the directors shall be elected each year at the
annual meeting of the shareholders, or at any special meeting of the
shareholders. Each such director shall hold office, unless he is removed in
accordance with the provisions of these By-laws or he resigns or dies or becomes
so incapacitated he can no longer perform any of his duties as a director, for
the term for which he is elected and until his successor shall have been elected
and qualified. Each director shall qualify by accepting his election to office
either expressly or by acting as a director. The shareholders or directors may
remove any director, with or without cause, and elect a successor at a meeting
called expressly for such purpose.
Section 4. Resignation. Any director may resign at any time by
delivering written notice to the Board of Directors, the President, or the
Secretary of the Corporation. A resignation is effective when the notice is
delivered unless the notice specifies a later effective date. The acceptance of
a resignation shall not be necessary to make it effective, unless expressly so
provided in the resignation.
Section 5. Vacancies. Vacancies occurring in the membership of
the Board of Directors caused by resignation, death or other incapacity, or
increase in the number of directors shall be filled by a majority vote of the
remaining members of the Board, and each director so elected shall serve until
the next meeting of the shareholders, or until a successor shall have been duly
elected and qualified.
Section 6. Annual Meetings. The Board of Directors shall meet annually,
without notice, immediately following, and at the same place as, the annual
meeting of the shareholders.
Section 7. Regular Meetings. Regular meetings shall be held at such times
and places, either within or without the State of Texas, as may be determined by
the President or the Board of Directors.
Section 8. Special Meetings. Special meetings of the Board of
Directors may be called by the President or by two (2) or more members of the
Board of Directors, at any place within or without the State of Texas, upon
twenty-four (24) hours' notice, specifying the time, place and general purposes
of the meeting, given to each director personally, by telephone, telegraph,
teletype, or other form of wire or wireless communication; or notice may be
given by mail if mailed at least three (3) days before such meeting.
Section 9. Notice. The Secretary or an Assistant Secretary
shall give notice of each special meeting, and of the date, time and place of
the particular meeting, in person or by mail, or by telephone, telegraph,
teletype, or other form of wire or wireless communication, and in the event of
the absence of the Secretary or an Assistant Secretary or the failure,
inability, refusal or omission on the part of the Secretary or an Assistant
Secretary so to do, any other officer of the Corporation may give said notice.
Section 10. Waiver of Notice. A director may waive any notice
required by law, the Articles of Incorporation, or these By-laws before or after
the date and time stated in the notice. Except as otherwise provided in this
Section, the waiver by the director must be in writing, signed by the director
entitled to the notice, and included in the minutes or filed with the corporate
records. A director's attendance at or participation in a meeting waives any
required notice to the director of the meeting unless the director at the
beginning of the meeting (or promptly upon the director's arrival) objects to
holding the meeting or transacting business at the meeting and does not
thereafter vote for or assent to action taken at the meeting.
Section 11. Business to be Transacted. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
Board of Directors need be specified in the notice or any waiver of notice of
such meeting. Any and all business of any nature or character whatsoever may be
transacted and action may be taken thereon at any meeting, regular or special,
of the Board of Directors.
Section 12. Quorum - Adjournment if Quorum is Not Present. A
majority of the number of directors fixed by, or in the manner provided in, the
Articles of Incorporation or these By-laws shall constitute a quorum for the
transaction of any and all business, unless a greater number is required by law
or Articles of Incorporation or these By-laws. At any meeting, regular or
special, of the Board of Directors, if there be less than a quorum present, a
majority of those present, or if only one director be present, then such
director, may adjourn the meeting from time to time without notice until the
transaction of any and all business submitted or proposed to be submitted to
such meeting or any adjournment thereof shall have been completed. In the event
of such adjournment, written, telegraphic or telephonic announcement of the time
and place at which the meeting will reconvene must be provided to all directors.
The act of the majority of the directors present at any meeting of the Board of
Directors at which a quorum is present shall constitute the act of the Board of
Directors, unless the act of a greater number is required by law or the Articles
of Incorporation or these By-laws.
Section 13. Presumption of Assent. A director of the
Corporation who is present at a meeting of the Board of Directors at which
action on any corporate matter is taken shall be presumed to have assented to
the action taken unless his dissent or abstention shall be entered in the
minutes of the meeting or unless he shall file his written dissent or abstention
to such action with the presiding officer of the meeting before the adjournment
thereof or to the Secretary of the Corporation immediately after the adjournment
of the meeting. Such right to dissent or abstain shall not apply to a director
who voted in favor of such action.
Section 14. Action by Written Consent. Any action required or
permitted to be taken at a meeting of the Board of Directors or any committee
thereof may be taken without a meeting if the action is taken by all the members
of the Board of Directors or committee, as the case may be. The action must be
evidenced by one or more written consents describing the action taken, signed by
each director or committee member, and included in the minutes or filed with the
corporate records reflecting the action taken. Such action is effective when the
last director or committee member signs the consent, unless the consent
specifies a different prior or subsequent effective date. Such consent shall
have the same force and effect as a unanimous vote at a meeting, and may be
described as such in any document or instrument.
Section 15. Committees. The Board of Directors, by resolution
adopted by a majority of the Board of Directors, may designate from among its
members an executive committee and one or more other committees, each of which,
to the extent provided in such resolution or in the Articles of Incorporation or
in these By-laws of the Corporation, shall have and may exercise such authority
of the Board of Directors as shall be expressly delegated by the Board from time
to time; except that no such committee shall have the authority of the Board of
Directors in reference to (a) amending the Articles of Incorporation; (b)
approving a plan of merger even if the plan does not require shareholder
approval; (c) authorizing dividends or distributions, except a committee may
authorize or approve a reacquisition of shares, if done according to a formula
or method prescribed by the Board of Directors; (d) approving or proposing to
shareholders action that requires shareholder approval; (e) amending, altering
or repealing the By-laws of the Corporation or adopting new By-laws for the
Corporation; (f) filling vacancies in the Board of Directors or in any of its
committees; or (g) electing or removing officers or members of any such
committee. A majority of all the members of any such committee may determine its
action and fix the time and place of its meetings, unless the Board of Directors
shall otherwise provide. The Board of Directors shall have power at any time to
change the number and members of any such committee, to fill vacancies and to
discharge any such committee. The designation of such committee and the
delegation thereto of authority shall not alone constitute compliance by the
Board of Directors, or any member thereof, with the standard of conduct imposed
upon it or him by the Texas Business Corporation Act, as the same may, from time
to time, be amended.
Section 16. Meeting by Telephone or Similar Communication
Equipment. Any or all directors may participate in and hold a regular or special
meeting of the Board of Directors or any committee thereof by, or through the
use of, any means of conference telephone or other similar communications
equipment by which all directors participating in the meeting may simultaneously
hear each other during the meeting. Participation in a meeting pursuant to this
Section shall constitute presence in person at such meeting, except where a
director participates in the meeting for the express purpose of objecting to
holding the meeting or transacting business at the meeting on the ground that
the meeting is not lawfully called or convened.
ARTICLE IV
Officers
Section 1. Principal Officers. The officers of the Corporation
shall be chosen by the Board of Directors and shall consist of a Chairman of the
Board, a President, a Treasurer and a Secretary. There may also be one or more
Vice Presidents and such other officers or assistant officers as the Board shall
from time to time create and so elect. Any two (2) or more offices may be held
by the same person.
Section 2. Election and Terms. Each officer shall be elected
by the Board of Directors at the annual meeting thereof and shall hold office
until the next annual meeting of the Board or until his or her successor shall
have been elected and qualified or until his or her death, resignation or
removal. The election of an officer shall not of itself create contract rights.
Section 3. Resignation and Removal. An officer may resign at
any time by delivering notice to the Board of Directors, its President or the
Secretary of the Corporation. A resignation is effective when the notice is
delivered unless the notice specifies a later effective date. If an officer's
resignation is made effective at a later date and the Corporation accepts the
future effective date, the Board of Directors may fill the pending vacancy
before the effective date, if the Board of Directors provides that the successor
does not take office until the effective date. The acceptance of a resignation
shall not be necessary to make it effective, unless expressly provided in the
resignation. An officer's resignation does not affect the Corporation's contract
rights, if any, with the officer. Any officer may be removed at any time, with
or without cause, by vote of a majority of the whole Board. Such removal shall
not affect the contract rights, if any, of the officer so removed.
Section 4. Vacancies. Whenever any vacancy shall occur in any
office by death, resignation, increase in the number of officers of the
Corporation, or otherwise, the same shall be filled by the Board of Directors,
and the officer so elected shall hold office until the next annual meeting of
the Board or until his or her successor shall have been elected and qualified.
Section 5. Powers and Duties of Officers. The officers so
chosen shall perform the duties and exercise the powers expressly conferred or
provided for in these By-laws, as well as the usual duties and powers incident
to such office, respectively, and such other duties and powers as may be
assigned to them by the Board of Directors or by the President.
Section 6. Chairman of the Board. The Chairman of the Board
shall be the Chief Executive Officer of the Corporation and shall have general
charge of, and supervision and authority over, all of the affairs and business
of the Corporation. He shall have general supervision of and direct all
officers, agents and employees of the Corporation; shall see that all orders and
resolutions of the Board are carried into effect; and in general, shall exercise
all powers and perform all duties incident to his office and such other powers
and duties as may from time to time be assigned to him by the Board.
Section 7. President. The President shall have the authority
to sign, with the Secretary or an Assistant Secretary, any and all certificates
for shares of the capital stock of the Corporation, and shall have the authority
to sign singly deeds, bonds, mortgages, contracts, or other instruments to which
the Corporation is a party (except in cases where the signing and execution
thereof shall be expressly delegated by the Board or by these By-laws, or by law
to some other officer or agent of the Corporation); and, in the absence,
disability or refusal to act of the Chairman of the Board, shall preside at
meetings of the shareholders and of the Board of Directors and shall possess all
of the powers and perform all of the duties of the Chairman of the Board. He
shall also serve the Corporation in such other capacities and perform such other
duties and have such additional authority and powers as are incident to his
office or as may be defined in these By-laws or delegated to him from time to
time by the Board of Directors or by the Chairman of the Board.
Section 8. Vice Presidents. The Vice Presidents shall assist
the President and shall perform such duties as may be assigned to them by the
Board of Directors or the President. Unless otherwise provided by the Board, in
the absence or disability of the President, the Vice President (or, if there be
more than one, the Vice President first named as such by the Board of Directors
at its most recent meeting at which Vice Presidents were elected) shall execute
the powers and perform the duties of the President. Any action taken by a Vice
President in the performance of the duties of the President shall be conclusive
evidence of the absence or inability to act of the President at the time such
action was taken.
Section 9. Secretary. The Secretary (a) shall keep the minutes
of all meetings of the Board of Directors and the minutes of all meetings of the
shareholders in books provided for that purpose; (b) shall attend to the giving
and serving of all notices; (c) when required, may sign with the President or a
Vice President in the name of the Corporation, and may attest the signature of
any other officers of the Corporation to all contracts, conveyances, transfers,
assignments, encumbrances, authorizations and all other instruments, documents
and papers, of any and every description whatsoever, of or executed for or on
behalf of the Corporation and affix the seal of the Corporation thereto; (d) may
sign with the President or a Vice President all certificates for shares of the
capital stock of the Corporation and affix the corporate seal of the Corporation
thereto; (e) shall have charge of and maintain and keep or supervise and control
the maintenance and keeping of the stock certificate books, transfer books and
stock ledgers and such other books and papers as the Board of Directors may
authorize, direct or provide for, all of which shall at all reasonable times be
open to the inspection of any director, upon request, at the office of the
Corporation during business hours; (f) shall, in general, perform all the duties
incident to the office of Secretary; and (g) shall have such other powers and
duties as may be conferred upon or assigned to him by the Board of Directors.
Section 10. Treasurer. The Treasurer shall have custody of all
the funds and securities of the Corporation which come into his hands. When
necessary or proper, he may endorse on behalf of the Corporation, for
collection, checks, notes and other obligations, and shall deposit the same to
the credit of the Corporation in such banks or depositories as shall be selected
or designated by or in the manner prescribed by the Board of Directors. He may
sign all receipts and vouchers for payments made to the Corporation, either
alone or jointly with such officer as may be designated by the Board of
Directors. Whenever required by the Board of Directors, he shall render a
statement of his cash account. He shall enter or cause to be entered, punctually
and regularly, on the books of the Corporation, to be kept by him or under his
supervision or direction for that purpose, full and accurate accounts of all
moneys received and paid out by, for or on account of the Corporation. He shall
at all reasonable times exhibit his books and accounts and other financial
records to any director of the Corporation during business hours. He shall have
such other powers and duties as may be conferred upon or assigned to him by the
Board of Directors. The Treasurer shall perform all acts incident to the
position of Treasurer, subject always to the control of the Board of Directors.
He shall, if required by the Board of Directors, give such bond for the faithful
discharge of his duties in such form and amount as the Board of Directors may
require.
Section 11. Assistant Secretaries. The Assistant Secretaries
shall assist the Secretary in the performance of his or her duties. In the
absence of the Secretary, any Assistant Secretary shall exercise the powers and
perform the duties of the Secretary. The Assistant Secretaries shall exercise
such other powers and perform such other duties as may from time to time be
assigned to them by the Board, the President, or the Secretary.
Section 12. Assistant Treasurers. The Assistant Treasurers
shall assist the Treasurer in the performance of his or her duties. Any
Assistant Treasurer shall, in the absence or disability of the Treasurer,
exercise the powers and perform the duties of the Treasurer. The Assistant
Treasurers shall exercise such other duties as may from time to time be assigned
to them by the Board, the President, or the Treasurer.
Section 13. Delegation of Authority. In case of the absence of
any officer of the Corporation, or for any reason that the Board may deem
sufficient, a majority of the entire Board may transfer or delegate the powers
or duties of any officer to any other officer or officers for such length of
time as the Board may determine.
Section 14. Securities of Other Corporations. The President or
any Vice President or Secretary or Treasurer of the Corporation shall have power
and authority to transfer, endorse for transfer, vote, consent or take any other
action with respect to any securities of another issuer which may be held or
owned by the Corporation and to make, execute and deliver any waiver, proxy or
consent with respect to any such securities.
ARTICLE V
Directors' Services, Limitation of Liability
and Reliance on Corporate Records, and
Interest of Directors in Contracts
Section 1. Services. No director of this Corporation who is
not an officer or employee of this Corporation shall be required to devote his
time or any particular portion of his time or render services or any particular
services exclusively to this Corporation. Every director of this Corporation
shall be entirely free to engage, participate and invest in any and all such
businesses, enterprises and activities, either similar or dissimilar to the
business, enterprise and activities of this Corporation, without breach of duty
to this Corporation or to its shareholders and without accountability or
liability to this Corporation or to its shareholders.
Every director of this Corporation shall be entirely free to
act for, serve and represent any other corporation, any entity or any person, in
any capacity, and be or become a director or officer, or both, of any other
corporation or any entity, irrespective of whether or not the business,
purposes, enterprises and activities, or any of them thereof, be similar or
dissimilar to the business, purposes, enterprises and activities, or any of
them, of this Corporation, without breach of duty to this Corporation or to its
shareholders and without accountability or liability of any character or
description to this Corporation or to its shareholders.
Section 2. General Limitation of Liability. A director shall,
based on facts then known to the director, discharge the duties as a director,
including the director's duties as a member of a committee, in good faith, with
the care an ordinarily prudent person in a like position would exercise under
similar circumstances, and in a manner the director reasonably believes to be in
the best interests of the Corporation. A director is not liable to the
Corporation for any action taken as a director, or any failure to take any
action, unless: (a) the director has breached or failed to perform the duties of
the director's office in accordance with the standard of care set forth above;
and (b) the breach or failure to perform constitutes willful misconduct or
recklessness.
Section 3. Reliance on Corporate Records and Other
Information. Any person acting as a director of the Corporation shall be fully
protected, and shall be deemed to have complied with the standard of care set
forth in Section 2 of this Article, in relying in good faith upon any
information, opinions, reports or statements, including financial statements and
other financial data, if prepared or presented by (a) one or more officers or
employees of the Corporation whom such person reasonably believes to be reliable
and competent in the matters presented; (b) legal counsel, public accountants,
or other persons as to matters such person reasonably believes are within the
person's professional or expert competence; or (c) a committee of the Board of
Directors of which such person is not a member, if such person reasonably
believes the committee merits confidence; provided, however, that such person
shall not be considered to be acting in good faith if such person has knowledge
concerning the matter in question that would cause such reliance to be
unwarranted.
Section 4. Interest of Directors in Contracts. Any contract or
other transaction between the Corporation and (a) any director, or (b) any
corporation, unincorporated association, business trust, estate, partnership,
trust, joint venture, individual or other legal entity (1) in which any director
has a material financial interest or is a general partner, or (2) of which any
director is a director, officer, or trustee, shall be valid for all purposes, if
the material facts of the contract or transaction and the director's interest
were disclosed or known to the Board of Directors, a committee of the Board of
Directors with authority to act thereon, or the shareholders entitled to vote
thereon, and the Board of Directors, such committee or such shareholders
authorized, approved or ratified the contract or transaction. Such a contract or
transaction is authorized, approved or ratified: (i) by the Board of Directors
or such committee, if it receives the affirmative vote of a majority of the
directors who have no interest in the contract or transaction, notwithstanding
the fact that such majority may not constitute a quorum or a majority of the
directors present at the meeting, and notwithstanding the presence or vote of
any director who does have such an interest; provided, however, that no such
contract or transaction may be authorized, approved or ratified by a single
director; and (ii) by such shareholders, if it receives the vote of a majority
of the shares entitled to be counted, in which vote shares owned by or voted
under the control of any director who, or of any corporation, unincorporated
association, business trust, estate, partnership, trust, joint venture,
individual or other legal entity that, has an interest in the contract or
transaction may be counted; provided, however, that a majority of such shares,
whether or not present, shall constitute a quorum for the purpose of
authorizing, approving or ratifying such a contract or transaction. This Section
shall not be construed to require authorization, ratification or approval by the
shareholder of any such contract or transaction, or to invalidate any such
contract or transaction that is fair to the Corporation or would otherwise be
valid under the common and statutory law applicable thereto.
ARTICLE VI
Indemnification
Section 1. Indemnification Against Underlying Liability. The
Corporation shall indemnify any person who was or is a party, or is threatened
to be made a party, to any threatened, pending, or completed action, suit or
proceeding, whether civil, criminal, administrative, or investigative, by reason
of the fact that he is or was a director or officer of the Corporation, or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise (collectively, "Agent") against expenses (including attorneys' fees),
judgments, fines, penalties, court costs and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit, or proceeding by
judgment, order, settlement (whether with or without court approval), conviction
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Agent did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of
the Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was unlawful. If several claims,
issues or matters are involved, an Agent may be entitled to indemnification as
to some matters even though he is not entitled as to other matters. Any director
or officer of the Corporation serving in any capacity of another corporation, of
which a majority of the shares entitled to vote in the election of its directors
is held, directly or indirectly, by the Corporation, shall be deemed to be doing
so at the request of the Corporation.
Section 2. Successful Defense. To the extent that an Agent of
the Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Section 1 of this Article, or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
Section 3. Determination of Conduct. Subject to any rights
under any contract between the Corporation and any Agent, any indemnification
against underlying liability provided for in Section 1 of this Article (unless
ordered by a court) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the Agent is proper
in the circumstances because he has met the applicable standard of conduct set
forth in said Section. Such determination shall be made (a) by the Board of
Directors by a majority vote of a quorum consisting of directors not at the time
parties to the proceeding; (b) if such an independent quorum is not obtainable,
by majority vote of a committee duly designated by the full Board of Directors
(in which designation directors who are parties may participate), consisting
solely of one or more directors not at the time parties to the proceeding; (c)
by special legal counsel (1) selected by the independent quorum of the Board of
Directors (or the independent committee thereof if no such quorum can be
obtained), or (2) if no such independent quorum or committee thereof can be
obtained, selected by majority vote of the full Board of Directors (in which
selection directors who are parties may participate); or (d) by the
shareholders, but shares owned by or voted under the control of directors who
are at the time parties to the proceeding may not be voted on the determination.
Notwithstanding the foregoing, an Agent shall be able to contest any
determination that the Agent has not met the applicable standard of conduct by
petitioning a court of appropriate jurisdiction.
Section 4. Payment of Expenses in Advance. Expenses incurred
in defending or settling a civil, criminal, administrative or investigative
action, suit or proceeding by an Agent who may be entitled to indemnification
pursuant to Section 1 of this Article shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of a written affirmation by the Agent of his good faith belief that he has met
the applicable standard of conduct set forth in Section 1 of this Article and a
written undertaking by or on behalf of the Agent to repay such amount if it is
ultimately determined that he is not entitled to be indemnified by the
Corporation as authorized in this Article. Notwithstanding the foregoing, such
expenses shall not be advanced if the Corporation conducts the determination of
conduct procedure referred to in Section 3 of this Article and it is determined
from the facts then known that the Agent will be precluded from indemnification
against underlying liability because he has failed to meet the applicable
standard of conduct set forth in Section 1 of this Article. The full Board of
Directors (including directors who are parties) may authorize the Corporation to
implement the determination of conduct procedure, but such procedure is not
required for the advancement of expenses. The full Board of Directors (including
directors who are parties) may authorize the Corporation to assume the Agent's
defense where appropriate, rather than to advance expenses for such defense.
Section 5. Indemnity Not Exclusive. The indemnification
against underlying liability, and advancement of expenses provided by, or
granted pursuant to, this Article shall not be deemed exclusive of, and shall be
subject to, any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any By-law, agreement, vote of
shareholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
Section 6. Insurance Indemnification. The Corporation shall
have the power to purchase and maintain insurance on behalf of any person who is
or was an Agent of the Corporation, or is or was serving at the request of the
Corporation as an Agent against any liability asserted against him and incurred
by him in any such capacity, or arising out of his status as such, whether or
not the Corporation would have the power to indemnify him against such liability
under the provisions of this Article.
Section 7. Employee Benefit Plans. For purposes of this
Article, references to "other enterprises" shall include employee benefit plans;
references to "fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at the request
of the Corporation" shall include any service as a director, officer, employee
or agent of the Corporation which imposes duties on, or involves services by,
such director, officer, employee or agent with respect to an employee benefit
plan, its participants or beneficiaries. A person who acted in good faith and in
a manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the Corporation" as referred to in
this Article.
Section 8. Application of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article shall, unless otherwise provided when
authorized or ratified, be applicable to claims, actions, suits or proceedings
made or commenced after the adoption thereof, whether arising from acts or
omissions to act during, before or after the adoption hereof, and shall continue
as to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such a
person. The right of any person to indemnification and advancement of expenses
shall vest at the time of occurrence or performance of any event, act or
omission giving rise to any action, suit or proceeding of the nature referred to
in Section 1 of this Article and, once vested, shall not later be impaired as a
result of any amendment, repeal, alteration or other modification of any or all
of these provisions.
Section 9. Indemnification Payments. Any payments made to any
indemnified party under this Article or under any other right to indemnification
shall be deemed to be an ordinary and necessary business expense of the
Corporation, and payment thereof shall not subject any person responsible for
the payment, or the Board of Directors, to any action for corporate waste or to
any similar action. Such payments shall be reported to the shareholders of the
Corporation before or with the notice of the next shareholders' meeting.
ARTICLE VII
Shares
Section 1. Share Certificates. The certificate for shares of
the Corporation shall be in such form as shall be approved by the Board of
Directors. Each share certificate shall state on its face the name and state of
organization of the Corporation, the name of the person to whom the certificate
is issued, and the number and class of shares the certificate represents. Share
certificates shall be consecutively numbered and shall be entered in the books
of the Corporation as they are issued. Every certificate for shares of the
Corporation shall be signed (either manually or in facsimile) by, or in the name
of, the Corporation by the Chairman of the Board, President or a Vice President
and either the Secretary or an Assistant Secretary of the Corporation, with the
seal of the Corporation, if any, or a facsimile thereof impressed or printed
thereon. If the person who signed (either manually or in facsimile) a share
certificate no longer holds office when the certificate is issued, the
certificate is nevertheless valid.
Section 2. Transfer of Shares. Except as otherwise provided by
law, transfers of shares of the capital stock of the Corporation, whether part
paid or fully paid, shall be made only on the books of the Corporation by the
owner thereof in person or by duly authorized attorney, on payment of all taxes
thereon and surrender for cancellation of the certificate or certificates for
such shares (except as hereinafter provided in the case of loss, destruction or
mutilation of certificate) properly endorsed by the holder thereof or
accompanied by the proper evidence of succession, assignment or authority to
transfer, and delivered to the Secretary or an Assistant Secretary.
Section 3. Registered Holders. The Corporation shall be
entitled to treat the person in whose name any share of stock or any warrant,
right or option is registered as the owner thereof for all purposes and shall
not be bound to recognize any equitable or other claim to, or interest in, such
share, warrant, right or option on the part of any other person, whether or not
the Corporation shall have notice thereof, save as may be expressly provided
otherwise by the laws of the State of Texas, the Articles of Incorporation of
the Corporation or these By-laws. In no event shall any transferee of shares of
the Corporation become a shareholder of the Corporation until express notice of
the transfer shall have been received by the Corporation.
Section 4. Lost, Destroyed and Mutilated Certificates. The
holder of any share certificate of the Corporation shall immediately notify the
Corporation of any loss, destruction or mutilation of the certificate, and the
Board may, in its discretion, cause to be issued to such holder of shares a new
certificate or certificates of shares of capital stock, upon the surrender of
the mutilated certificate, or, in case of loss or destruction, upon the
furnishing of an affidavit or satisfactory proof of such loss or destruction.
The Board may, in its discretion, require the owner of the lost or destroyed
certificate or such owner's legal representative to give the Corporation a bond
in such sum and in such form, and with such surety or sureties as it may direct,
to indemnify the Corporation, its transfer agents and registrars, if any,
against any claim that may be made against them or any of them with respect to
the certificate or certificates alleged to have been lost or destroyed, but the
Board may, in its discretion, refuse to issue a new certificate or new
certificates, save upon the order of a court having jurisdiction in such
matters.
Section 5. Consideration for Shares. The Corporation may issue
shares for such consideration received or to be received as the Board of
Directors determines to be adequate. That determination by the Board of
Directors is conclusive insofar as the adequacy of consideration for the
issuance of shares relates to whether the shares are validly issued, fully paid
and nonassessable. When the Corporation receives the consideration for which the
Board of Directors authorized the issuance of shares, the shares issued therefor
are fully paid and nonassessable.
Section 6. Payment for Shares. The Board of Directors may
authorize shares to be issued for consideration consisting of any tangible or
intangible property or benefit to the Corporation, including cash, promissory
notes, services performed, contracts for services to be performed, or other
securities of the Corporation. If shares are authorized to be issued for
promissory notes or for promises to render services in the future, the
Corporation must report in writing to the shareholders the number of shares
authorized to be so issued before or with the notice of the next shareholders'
meeting.
Section 7. Distributions to Shareholders. The Board of
Directors may authorize and the Corporation may make distributions to the
shareholders subject to any restrictions set forth in the Articles of
Incorporation of the Corporation and any limitations in the Texas Business
Corporation Act, as amended.
Section 8. Regulations. The Board of Directors shall have
power and authority to make all such rules and regulations as they may deem
expedient concerning the issue, transfer and registration or the replacement of
certificates for shares of the Corporation.
ARTICLE VIII
Corporate Books and Reports
Section 1. Place of Keeping Corporate Books and Records.
Except as expressly provided otherwise in this Article, the books of account,
records, documents and papers of the Corporation shall be kept at any place or
places, within or without the State of Texas, as directed by the Board of
Directors. In the absence of a direction, the books of account, records,
documents and papers shall be kept at the principal office of the Corporation.
Section 2. Place of Keeping Certain Corporate Books and Records. The
Corporation shall keep a copy of the following records at its principal office:
(1) Its Articles or restated Articles of
Incorporation and all amendments to them currently in effect;
(2) Its By-laws or restated By-laws and all
amendments to them currently in effect;
(3) Resolutions adopted by the Board of Directors
with respect to one or more classes or series of shares and
fixing their relative rights, preferences and limitations, if
shares issued pursuant to those resolutions are outstanding;
(4) The minutes of all shareholders' meetings and
records of all action taken by shareholders without a meeting,
for the past three (3) years;
(5) All written communications to shareholders
generally within the past three (3) years, including financial
statements furnished to shareholders;
(6) A list of the names and business addresses of its
current directors and officers; and
(7) The Corporation's most recent annual report.
Section 3. Permanent Records. The Corporation shall keep as
permanent records minutes of all meetings of its shareholders and Board of
Directors, a record of all actions taken by the shareholders or Board of
Directors without a meeting, and a record of all actions taken by a committee of
the Board of Directors in place of the Board of Directors on behalf of the
Corporation. The Corporation shall also maintain appropriate accounting records.
Section 4. Shareholder Records. The Corporation shall maintain
a record of its shareholders, in a form that permits preparation of a list of
the names and addresses of all shareholders, in alphabetical order by class of
shares showing the number and class of shares held by each.
Section 5. Shareholder Rights of Inspection. The records
designated in Section 2 of this Article may be inspected and copied by
shareholders of record, during regular business hours at the Corporation's
principal office, provided that the shareholder gives the Corporation written
notice of the shareholder's demand at least five (5) business days before the
date on which the shareholder wishes to inspect and copy. A shareholder's agent
or attorney, if authorized in writing, has the same inspection and copying
rights as the shareholder represented. The Corporation may impose a reasonable
charge, covering the costs of labor and material, for copies of any documents
provided to the shareholder.
Section 6. Additional Rights of Inspection. Shareholder rights
enumerated in Section 5 of this Article may also apply to the following
corporate records, provided that the notice requirements of Section 5 are met,
the shareholder's demand is made in good faith and for a proper purpose, the
shareholder describes with reasonable particularity the shareholder's purpose
and the records the shareholder desires to inspect, and the records are directly
connected with the shareholder's purpose: excerpts from minutes of any meeting
of the Board of Directors, records of any action of a committee of the Board of
Directors while acting in place of the Board of Directors on behalf of the
Corporation, minutes of any meeting of the shareholders, and records of action
taken by the shareholders or Board of Directors without a meeting, to the extent
not subject to inspection under Section 5 of this Article, as well as accounting
records of the Corporation and the record of shareholders. Such inspection and
copying is to be done during regular business hours at a reasonable location
specified by the Corporation. The Corporation may impose a reasonable charge,
covering the costs of labor and material, for copies of any documents provided
to the shareholder.
ARTICLE IX
Miscellaneous
Section 1. Notice and Waiver of Notice. Subject to the
specific and express notice requirements set forth in other provisions of these
By-laws, the Articles of Incorporation, and the Texas Business Corporation Act,
as the same may, from time to time, be amended, notice may be communicated to
any shareholder or director in person, by telephone, telegraph, teletype, or
other form of wire or wireless communication, or by mail. If the foregoing forms
of personal notice are deemed to be impracticable, notice may be communicated in
a newspaper of general circulation in the area where published or by radio,
television, or other form of public broadcast communication. Subject to Section
4 of ARTICLE II of these By-laws, written notice is effective at the earliest of
the following: (a) when received; (b) if correctly addressed to the address
listed in the most current records of the Corporation, five days after its
mailing, as evidenced by the postmark or private carrier receipt; or (c) if sent
by registered or certified United States mail, return receipt requested, on the
date shown on the return receipt which is signed by or on behalf of the
addressee. Oral notice is effective when communicated. A written waiver of
notice, signed by the person or persons entitled to such notice, whether before
or after the time stated therein, shall be equivalent to the giving of such
notice.
Section 2. Depositories. Funds of the Corporation not otherwise employed
shall be deposited in such banks or other depositories as the Board of
Directors, the President or the Treasurer may select or approve.
Section 3. Signing of Checks, Notes, etc. In addition to and
cumulative of, but in no way limiting or restricting, any other provision of
these By-laws which confers any authority relative thereto, all checks, drafts
and other orders for the payment of money out of funds of the Corporation and
all notes and other evidence of indebtedness of the Corporation may be signed on
behalf of the Corporation, in such manner, and by such officer or person as
shall be determined or designated by the Board of Directors; provided, however,
that if, when, after and as authorized or provided for by the Board of
Directors, the signature of any such officer or person may be a facsimile or
engraved or printed, and shall have the same force and effect and bind the
Corporation as though such officer or person had signed the same personally;
and, in the event of the death, disability, removal or resignation of any such
officer or person, if the Board of Directors shall so determine or provide, as
though and with the same effect as if such death, disability, removal or
resignation had not occurred.
Section 4. Gender and Number. Wherever used or appearing in
these By-laws, pronouns of the masculine gender shall include the female gender
and the neuter gender, and the singular shall include the plural wherever
appropriate.
Section 5. Laws. Wherever used or appearing in these By-laws,
the words "law" or "laws" shall mean and refer to laws of the State of Texas, to
the extent only that such are expressly applicable, except where otherwise
expressly stated or the context requires that such words not be so limited.
Section 6. Headings. The headings of the Certificate and Sections of these
By-laws are inserted for convenience of reference only and shall not be deemed
to be a part thereof or used in the construction or interpretation thereof.
ARTICLE X
Amendments
These By-laws may, from time to time, be added to, changed,
altered, amended or repealed or new By-laws may be made or adopted by a majority
vote of the whole Board of Directors at any meeting of the Board of Directors,
if the notice or waiver of notice of such meeting shall have stated that the
By-laws are to be amended, altered or repealed at such meeting, or if all
directors at the time are present at such meeting, have waived notice of such
meeting, or have consented to such action in writing.
ARTICLE XI
The Texas Business Corporation Act
The provisions of the Texas Business Corporation Act, as the
same may, from time to time, be amended, applicable to any of the matters not
herein specifically covered by these By-laws, are hereby incorporated by
reference in and made a part of these By-laws.
PARTICIPATION AGREEMENT
AMONG
RYDEX VARIABLE TRUST,
PADCO FINANCIAL SERVICES, INC.
AND
CONSECO VARIABLE INSURANCE COMPANY
DATED AS OF
MARCH 24, 2000
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
ARTICLE I. Purchase of Trust Shares...............................................................2
ARTICLE II. Representations and Warranties.........................................................4
ARTICLE III. Prospectuses, Reports to Shareholders and Proxy Statements; Voting.....................6
ARTICLE IV . Sales Material and Information.........................................................7
ARTICLE V. Fees and Expenses......................................................................9
ARTICLE VI. Diversification........................................................................9
ARTICLE VII. Potential Conflicts...................................................................10
ARTICLE VIII. Indemnification.......................................................................11
ARTICLE IX. Applicable Law........................................................................16
ARTICLE X. Termination...........................................................................16
ARTICLE XI. Notices...............................................................................17
ARTICLE XII. Miscellaneous.........................................................................18
SCHEDULE A Separate Accounts and Associated Contracts............................................21
SCHEDULE B Proxy Voting Procedures...............................................................22
</TABLE>
THIS AGREEMENT, made and entered into as of the 24th day of March, 2000
by and among CONSECO VARIABLE INSURANCE COMPANY (hereinafter the "Company"), a
Texas corporation, on its own behalf and on behalf of each separate account of
the Company set forth on Schedule A hereto as may be amended from time to time
(each such account hereinafter referred to as the "Account"), RYDEX VARIABLE
TRUST (hereinafter the "Trust"), a Delaware business trust, and PADCO FINANCIAL
SERVICES, INC. (hereinafter the "Underwriter"), a Maryland corporation.
WHEREAS, the Trust engages in business as an open-end management
investment company and is available to act as (i) the investment vehicle for
separate accounts established by insurance companies for individual and group
life insurance policies and individual and group annuity contracts with variable
accumulation and/or pay-out provisions (hereinafter referred to individually
and/or collectively as "Variable Insurance Products") and (ii) the investment
vehicle for certain qualified pension and retirement plans (hereinafter
"Qualified Plans"); and
WHEREAS, insurance companies desiring to utilize the Trust as an
investment vehicle under their Variable Insurance Products enter into
participation agreements with the Trust and the Underwriter (the "Participating
Insurance Companies");
WHEREAS, beneficial interests in the Trust are divided into several
series of interests or shares, each representing the interest in a particular
managed portfolio of securities and other assets, any one or more of which may
be made available under this Agreement, as may be amended from time to time by
mutual agreement of the parties hereto (each such series is hereinafter referred
to as a "Fund"); and
WHEREAS, the Trust has obtained an order from the Securities and
Exchange Commission, dated February 25, 1999 (File No. 812-11344), granting
Participating Insurance Companies and Variable Insurance Product separate
accounts exemptions from the provisions of Sections 9(a), 13(a), 15(a), and
15(b) of the Investment Company Act of 1940, as amended (hereinafter the "1940
Act"), and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent
necessary to permit shares of a Fund to be sold to and held by Variable
Insurance Product separate accounts of both affiliated and unaffiliated life
insurance companies and Qualified Plans (hereinafter the "Shared Funding
Exemptive Order"); and
WHEREAS, the Trust is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, the Underwriter is registered as a broker/dealer under the
Securities Exchange Act of 1934, as amended (hereinafter the "1934 Act"), is a
member in good standing of the National Association of Securities Dealers, Inc.
(hereinafter "NASD") and serves as principal underwriter of the shares of the
Trust; and
WHEREAS, the Company has registered or will register certain Variable
Insurance Products under the 1933 Act; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution or under authority of the Board of
Directors of the Company, on the date shown for such Account on Schedule A
hereto, to set aside and invest assets attributable to the aforementioned
Variable Insurance Products; and
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Funds on behalf of
each Account to fund certain of the aforementioned Variable Insurance Products
and the Underwriter is authorized to sell such shares to each such Account at
net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Trust and each Underwriter agree as follows:
ARTICLE I. PURCHASE OF TRUST SHARES
1.1. The Trust agrees to make available for purchase by the Company
shares of the Trust and shall execute orders placed for each Account on a daily
basis at the net asset value next computed after receipt by the Trust or its
designee of such order. For purposes of this Section 1.1, the Company shall be
the designee of the Trust for receipt of such orders from each Account and
receipt by such designee shall constitute receipt by the Trust; provided that
the Trust receives the final order by 9:00 a.m. Eastern time on the next
following business day. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which the Trust calculates its net
asset value pursuant to the rules of the Securities and Exchange Commission.
1.2. The Trust, so long as this Agreement is in effect, agrees to make
its shares available indefinitely for purchase at the applicable net asset value
per share by the Company and its Accounts on those days on which the Trust
calculates its net asset value pursuant to rules of the Securities and Exchange
Commission and the Trust shall use reasonable efforts to calculate such net
asset value on each day which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, the Board of Trustees of the Trust (hereinafter
the "Board") may refuse to permit the Trust to sell shares of any Fund to any
person, or suspend or terminate the offering of shares of any Fund if such
action is required by law or by regulatory authorities having jurisdiction or
is, in the sole discretion of the Board acting in good faith and in light of
their fiduciary duties under federal and any applicable state laws, necessary in
the best interests of the shareholders of such Fund.
1.3. The Trust agrees that shares of the Trust will be sold only to
Participating Insurance Companies and their separate accounts and to certain
Qualified Plans all in accordance with the requirement of Section 817(h)(1) of
the Internal Revenue Code of 1986, as amended ("Code") and Treasury regulation
1.817-5(f). No shares of any Fund will be sold to the general public.
1.4. The Trust will not make its shares available for purchase by any
insurance company or separate account unless an agreement containing provisions
substantially the same as in Section 1.3 of Article I, Section 3.5 of Article
III, Article VI and Article VII of this Agreement is in effect to govern such
sales.
1.5. The Trust agrees to redeem for cash, on the Company's request, any
full or fractional shares of a Trust held by the Company, executing such
requests on a daily basis at the net asset value next computed after receipt by
the Trust or its designee of the request for redemption. Subject to and in
accordance with applicable laws, and subject to written consent of the Company,
the Trust may redeem shares for assets other than cash. For purposes of this
Section 1.5, the Company shall be the designee of the Trust for receipt of
requests for redemption from each Account and receipt by such designee shall
constitute receipt by the Trust; provided that the Trust receives the final
request by 9:00 a.m. Eastern time on the next following Business Day.
1.6. The Company agrees that purchases and redemptions of Fund shares
offered by the then current prospectus of the Trust shall be made in accordance
with the provisions of such prospectus. The Variable Insurance Products issued
by the Company, under which amounts may be invested in the Trust (hereinafter
the "Contracts"), are listed on Schedule A attached hereto and incorporated
herein by reference, as such Schedule A may be amended from time to time by
mutual written agreement of all of the parties hereto.
1.7. The Company shall pay for Trust shares on the next Business Day
after an order to purchase Trust shares is made in accordance with the
provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted
by wire. For purposes of Section 2.9 and 2.10, upon receipt by the Trust of the
federal funds so wired, such funds shall cease to be the responsibility of the
Company and shall become the responsibility of the Trust.
1.8. Issuance and transfer of the Trust's shares will be by book entry
only. Stock certificates will not be issued to the Company or any Account.
Shares ordered from the Trust will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.
1.9. The Trust shall furnish same day notice (by electronic means, wire
or telephone, followed by written confirmation) to the Company of any income,
dividends or capital gain distributions payable on Fund shares. The Company
hereby elects to receive all such income dividends and capital gain
distributions as are payable on the Fund shares in additional shares of that
Fund. The Company reserves the right to revoke this election and to receive all
such income dividends and capital gain distributions in cash. The Trust shall
notify the Company of the number of shares so issued as payment of such
dividends and distributions.
1.10. The Trust shall make the net asset value per share for each Fund
available to the Company on a daily basis as soon as reasonably practical after
the net asset value per share is calculated (normally by 6:30 p.m. Eastern time)
and shall use its best efforts to make such net asset value per share available
by 7:00 p.m. Eastern time. If the Trust provides the Company with materially
incorrect share net asset value information, the Company on behalf of the
Account, shall be entitled to an adjustment to the number of shares purchased or
redeemed to reflect the correct share net asset value. Any material error in the
calculation of the net asset value per share, dividend or capital gain
information shall be reported promptly upon discovery to the Company.
Furthermore, the Underwriter shall be liable for the reasonable administrative
costs incurred by the Company in relation to the correction of any material
error. Administrative costs shall include allocation of staff time, costs of
outside service providers, printing and postage.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that the Contracts are or will
be registered under the 1933 Act; that the Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws
and that the sale of the Contracts shall comply in all material respects with
state insurance suitability requirements. The Company further represents and
warrants that it is an insurance company duly organized and in good standing
under applicable law and that it has legally and validly established each
Account prior to any issuance or sale thereof as a segregated asset account
under Texas state insurance laws and has registered or, prior to any issuance or
sale of the Contracts, will register each Account as a unit investment trust in
accordance with the provisions of the 1940 Act to serve as a segregated
investment account for the Contracts.
2.2. The Trust represents and warrants that Trust shares sold pursuant
to this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the State of Delaware and all
applicable federal and state securities laws and that the Trust is and shall
remain registered under the 1940 Act. The Trust shall amend the registration
statement for its shares under the 1933 Act and the 1940 Act from time to time
as required in order to effect the continuous offering of its shares. The Trust
shall register and qualify the shares for sale in accordance with the laws of
the various states, to the extent required by applicable state law.
2.3. The Trust represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), and that it will maintain such qualification (under
Subchapter M or any successor or similar provision) and that it will notify the
Company immediately upon having a reasonable basis for believing that it has
ceased to so qualify or that it might not so qualify in the future.
2.4. The Company represents and warrants that the Contracts are
currently treated as life insurance policies or annuity contracts, under
applicable provisions of the Code and that it will make every effort to maintain
such treatment and that it will notify the Trust immediately upon having a
reasonable basis for believing that the Contracts have ceased to be so treated
or that they might not be so treated in the future.
2.5. The Trust represents that to the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, it will have a
board of trustees, a majority of whom are not interested persons of the Trust,
formulate and approve any plan under Rule 12b-1 to finance distribution
expenses.
2.6. The Trust represents that the Trust's investment policies, fees
and expenses are and shall at all times remain in compliance with the laws of
the State of Delaware and the Trust represents that their respective operations
are and shall at all times remain in material compliance with the laws of the
State of Delaware to the extent required to perform this Agreement.
2.7. The Trust represents that it is lawfully organized and validly
existing under the laws of the State of Delaware and that it does and will
comply in all material respects with the 1940 Act.
2.8. The Underwriter represents and warrants that it is and shall
remain duly registered in all material respects to the extent under all
applicable federal and state securities laws and that it will perform its
obligations for the Trust in compliance in all material respects with the laws
of its state of domicile and any applicable state and federal securities laws.
2.9. The Trust represents and warrants that its directors, officers,
employees dealing with the money and/or securities of the Trust are and shall
continue to be at all times covered by a blanket fidelity bond or similar
coverage for the benefit of the Trust in an amount not less than the minimum
coverage as required by Rule 17g-(1) under the 1940 Act or related provisions as
may be promulgated from time to time. The aforesaid blanket fidelity bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company.
2.10. The Company represents and warrants that all of its directors,
officers, employees dealing with the money and/or securities of the Trust are
and shall continue to be covered by a blanket fidelity bond or similar coverage
for the benefit of the Company and the Separate Account in an amount not less
than the minimum coverage as required by Rule 17g-1 under the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid
blanket fidelity bond shall include coverage for larceny and embezzlement and
shall be issued by a reputable bonding company.
ARTICLE III. PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS; VOTING
3.1. The Trust or its designee shall provide the Company with as many
printed copies of the Trust's current prospectus and statement of additional
information as the Company may reasonably request. If requested by the Company,
in lieu of providing printed copies the Trust shall provide camera-ready film or
computer diskettes containing the Trust's prospectus and statement of additional
information, and such other assistance as is reasonably necessary in order for
the Company once each year (or more frequently if the prospectus and/or
statement of additional information for the Trust is amended during the year) to
have the prospectus for the Contracts and the Trust's prospectus printed
together in one document, and to have the statement of additional information
for the Trust and the statement of additional information for the Contracts
printed together in one document. Alternatively, the Company may print the
Trust's prospectus and/or its statement of additional information in combination
with other trusts or companies' prospectuses and statements of additional
information, together with the prospectus and/or statement of additional
information for the Contracts.
3.2. Except as provided in this Section 3.2., all expenses of printing
and distributing Trust prospectuses and statements of additional information
shall be the expense of the Company. For prospectuses and statements of
additional information provided by the Company to its existing owners of
Contracts in order to update disclosure as required by the 1933 Act and/or the
1940 Act, the cost of printing shall be borne by the Trust. The Trust will
provide camera-ready film or computer diskettes in lieu of receiving printed
copies of the Trust's prospectus. The Company agrees to provide the Trust or its
designee with such information as may be reasonably requested by the Trust to
assure that the Trust's expenses do not include the cost of printing any
prospectuses or statements of additional information other than those actually
distributed to existing owners of the Contracts. In the event there is a
combined printing of prospectuses, the expenses of such printing will be
apportioned between (a) the Company and (b) the Trust in proportion to the
number of pages of the Contract prospectus, other fund prospectuses and the
Trust prospectus, taking account of other relevant factors affecting the expense
of printing, such as covers, columns, graphs, and charts; the Trust to bear the
costs of printing the Trust prospectus portion of such document for distribution
to owners of existing Contracts funded by the Trust shares and the Company to
bear the expense of printing the portion of such documents relating to the
Account; provided, however, the Company shall bear all printing expenses of such
combined documents where used for distribution to prospective purchasers or to
owners of existing Contracts not funded by Trust shares.
3.3. The Trust's statement of additional information shall be
obtainable from the Trust, the Company or such other person as the Trust may
designate, as agreed upon by the parties.
3.4. The Trust, at its expense, shall provide the Company with copies
of its proxy statements, reports to shareholders, and other communications
(except for prospectuses and statements of additional information, which are
covered in section 3.1) to shareholders in such quantity as the Company shall
reasonably require for distributing to Contract owners.
3.5. If and to the extent required by law the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions
received from Contract owners; and
(iii)vote Fund shares for which no instructions have been
received in the same proportion as Trust shares of such Fund
for which instructions have been received,
so long as and to the extent that the Securities and Exchange Commission
continues to interpret the 1940 Act to require pass-through voting privileges
for variable contract owners. The Company reserves the right to vote Fund shares
held in any Account in its own right, to the extent permitted by law. The Trust
and the Company shall follow the procedures, and shall have the corresponding
responsibilities, for the handling of proxy and voting instruction
solicitations, as set forth in Schedule B attached hereto and incorporated
herein by reference. Participating Insurance Companies shall be responsible for
ensuring that each of their separate accounts participating in a Fund calculates
voting privileges in a manner consistent with the standards set forth on
Schedule B, which standards will also be provided to the other Participating
Insurance Companies.
3.6. The Trust will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Trust will either
provide for annual meetings or comply with Section 16(c) of the 1940 Act
(although the Trust is not one of the trusts described in Section 16(c) of that
Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further,
the Trust will act in accordance with the Securities and Exchange Commission's
interpretation of the requirements of Section 16(a) with respect to periodic
elections of directors and with whatever rules the Commission may promulgate
with respect thereto.
3.7. The Trust shall use reasonable efforts to provide Trust
prospectuses, reports to shareholders, proxy materials and other Trust
communications (or camera-ready equivalents) to the Company sufficiently in
advance of the Company's mailing dates to enable the Company to complete, at
reasonable cost, the printing, assembling and distribution of the communications
in accordance with applicable laws and regulations.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. The Company shall furnish, or shall cause to be furnished, to the
Underwriter, each piece of sales literature or other promotional material in
which the Trust or the Underwriter is named, at least five Business Days prior
to its use. No such material shall be used if the Trust or its designee
reasonably objects to such use within five Business Days after receipt of such
material.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Trust or concerning the Trust in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus for the
Trust, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the Trust,
or in sales literature or other promotional material approved by the Trust or
its designee, except with the permission of the Trust.
4.3. The Trust or its designee shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales literature or
other promotional material in which the Company or its separate account(s) or
Contracts are named at least five Business Days prior to its use. No such
material shall be used if the Company or its designee reasonably objects to such
use within five Business Days after receipt of such material.
4.4. The Trust and the Underwriter shall not give any information or
make any representations on behalf of the Company or concerning the Company,
each Account, or the Contracts, other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in published reports for each Account which are in the public domain
or approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5. The Trust will provide to the Company at least one complete copy
of all registration statements, prospectuses, statements of additional
information, reports, proxy statements, sales literature and other promotional
materials, applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the Trust or its shares,
contemporaneously with the filing of such document with the Securities and
Exchange Commission or other regulatory authorities.
4.6. The Company will provide to the Trust at least one complete copy
of all registration statements, prospectuses, statements of additional
information, reports, solicitations for voting instructions, sales literature
and other promotional materials, applications for exemptions, requests for no
action letters, and all amendments to any of the above, that relate to the
investment in the Trust under the Contracts, contemporaneously with the filing
of such document with the Securities and Exchange Commission or other regulatory
authorities.
4.7. For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, any of the
following that refer to the Trust or any affiliate of the Trust: advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and registration statements,
prospectuses, statements of additional information, shareholder reports, and
proxy materials.
ARTICLE V. FEES AND EXPENSES
5.1. The Trust shall pay no fee or other compensation to the Company
under this Agreement, except that if the Trust or any Fund adopts and implements
a plan pursuant to Rule 12b-1 to finance distribution expenses or a shareholder
servicing plan to finance investor services, then payments may be made to the
Company, or to the underwriter for the Contracts, or to other service providers
if and in amounts agreed upon by the parties.
5.2. All expenses incident to performance by the Trust under this
Agreement shall be paid by the Trust. The Trust shall see to it that all its
shares are registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Trust, in
accordance with applicable state laws prior to their sale. The Trust shall bear
the expenses for the cost of registration and qualification of Fund shares,
preparation and filing of the Trust's prospectus and registration statement,
proxy materials and reports, setting the prospectus in type, setting in type and
printing the proxy materials and reports to shareholders (including the costs of
printing a prospectus that constitutes an annual report), distributing the Trust
proxy materials to owners of Contracts, the preparation of all statements and
notices required by any federal or state law, and all taxes on the issuance or
transfer of Fund shares.
5.3. The Company shall bear the expenses of distributing the Trust's
prospectus, proxy materials and reports to owners of Contracts issued by the
Company, other than the expenses of distributing prospectuses and statements of
additional information to existing contract owners.
ARTICLE VI. DIVERSIFICATION
6.1. The Trust will at all times invest money from the Contracts in
such a manner as to ensure that the Contracts will be treated as variable
contracts under the Code and the regulations issued thereunder. Without limiting
the scope of the foregoing, the Trust will at all times comply with Section
817(h) of the Code and Treasury Regulation 1.817-5, relating to the
diversification requirements for variable annuity, endowment, or life insurance
contracts and any amendments or other modifications to such Section or
Regulations. In the event of a breach of this Article VI by a Fund, the Trust
will take all reasonable steps (a) to notify Company of such breach and (b) to
adequately diversify the Fund so as to achieve compliance within the grace
period afforded by Regulation 1.817-5.
ARTICLE VII. POTENTIAL CONFLICTS
7.1. The Board will monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Trust. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling, private
letter ruling, no-action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Fund are being managed; (e) a difference in voting
instructions given by Variable Insurance Product owners; or (f) a decision by a
Participating Insurance Company to disregard the voting instructions of contract
owners. The Board shall promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of
which it is aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the Shared Funding Exemptive Order, by providing
the Board with all information reasonably necessary for the Board to consider
any issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever contract owner voting instructions are
disregarded.
7.3. If it is determined by a majority of the Board, or a majority of
its disinterested members, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested directors), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts from
the Trust or any Fund and reinvesting such assets in a different investment
medium, including (but not limited to) another Fund of the Trust, or submitting
the question whether such segregation should be implemented to a vote of all
affected Contract owners and, as appropriate, segregating the assets of any
appropriate group (i.e., annuity contract owners, life insurance policy owners,
or variable contract owners of one or more Participating Insurance Companies)
that votes in favor of such segregation, or offering to the affected contract
owners the option of making such a change; and (2) establishing a new registered
management investment company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a decision
by the Company to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Trust's election, to withdraw the affected Account's
investment in the Trust and terminate this Agreement with respect to such
Account (at the Company's expense); provided, however that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the position of the majority of other state regulators, then the Company will
withdraw the affected Account's investment in the Trust and terminate this
Agreement with respect to such Account within six months after the Board informs
the Company in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board. Until the end of the foregoing six month period, the Underwriter
and Trust shall continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Trust.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Trust be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a new
funding medium for the Contracts if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Shared Funding
Exemptive Order, then (a) the Trust and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to comply
with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4,
and 7.5 of this Agreement shall continue in effect only to the extent that terms
and conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
ARTICLE VIII. INDEMNIFICATION
8.1. Indemnification By The Company
8.1(a) The Company agrees to indemnify and hold harmless the Trust and
each member of the Board and each officer and employee of the Trust, the
Underwriter and each director, officer and employee of the Underwriter, and each
person, if any, who controls the Trust, or the Underwriter within the meaning of
Section 15 of the 1933 Act (collectively, an "Indemnified Parties" and
individually, "Indemnified Party," for purposes of this Section 8.1) against any
and all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Company) or litigation (including
legal and other expenses), to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities, or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of Fund shares or
the Contracts and:
(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the registration
statement or prospectus or statement of additional information for the
Contracts or contained in the Contracts or sales literature for the
Contracts (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Company by or on behalf
of the Trust for use in the registration statement or prospectus or
statement of additional information for the Contracts or in the Contracts
or sales literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the Contracts or Trust shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the registration
statement, prospectus, statement of additional information or sales
literature of the Trust not supplied by the Company, or persons under its
control and other than statements or representations authorized by the
Trust or the Underwriter) or unlawful conduct of the Company or persons
under its control, with respect to the sale or distribution of the
Contracts or Trust shares; or
(iii) arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in a registration statement,
prospectus, statement of additional information or sales literature of the
Trust or any amendment thereof or supplement thereto or the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading if such
a statement or omission was made in reliance upon and in conformity with
information furnished to the Trust by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation or warranty made by the Company in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Company, as limited by and in accordance with the provisions of Sections
8.1(b) and 8.1(c) hereof.
8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement.
8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled to participate,
at its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
8.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Trust shares or the Contracts or the operation of
the Trust.
8.2. Indemnification by the Underwriter
8.2(a). The Underwriter agrees to indemnify and hold harmless the
Company and each of its directors, officers and employees and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, an "Indemnified Parties" and individually, "Indemnified Party,"
for purposes of this Section 8.2) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Underwriter) or litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale or
acquisition of shares of a Fund or the Contracts and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration
statement, prospectus, statement of additional information or sales
literature of the Trust (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made in
reliance upon and in conformity with information furnished to the Trust by
or on behalf of the Company for use in the registration statement,
prospectus, statement of additional information for the Trust or in sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the registration
statement, prospectus, statement of additional information or sales
literature for the Contracts not supplied by the Trust or persons under its
control and other than statements or representations authorized by the
Company) or unlawful conduct of the Trust, Underwriter(s) or Underwriter or
persons under their control, with respect to the sale or distribution of
the Contracts or Fund shares; or
(iii) arise out of or as a result of any untrue statement or alleged
untrue statement of a material fact contained in a registration statement,
prospectus, statement of additional information or sales literature
covering the Contracts, or any amendment thereof or supplement thereto, or
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement or statements
therein not misleading, if such statement or omission was made in reliance
upon information furnished to the Company by or on behalf of the Trust; or
(iv) arise as a result of any failure by the Trust to provide the
services and furnish the materials under the terms of this Agreement, or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Trust or Underwriter in this
Agreement or arise out of or result from any other material breach of this
Agreement by the Underwriter; as limited by and in accordance with the
provisions of Sections 8.2(b) and 8.2(c) hereof.
8.2(b). The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities, or
litigation incurred or assessed against an Indemnified Party as such may arise
from such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of obligations and duties under this
Agreement.
8.2(c). The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to such party
of the Underwriter's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and the Underwriter will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.2(d). The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of each Account.
8.3. Indemnification by the Trust
8.3(a). The Trust agrees to indemnify and hold harmless the Company,
and each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (hereinafter
collectively, the "Indemnified Parties" and individually, "Indemnified Party,"
for purposes of this Section 8.3) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Trust) or litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements result from the gross negligence, bad
faith or willful misconduct of the Board or any member thereof, and are related
to the operations of the Trust and:
(i) arise as a result of any failure by the Trust to provide the
services and furnish the materials under the terms of this Agreement; or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Trust;
8.3(b). The Trust shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement.
8.3(c). The Trust shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Trust in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Trust of any
such claim shall not relieve the Trust from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Trust will be entitled to participate, at
its own expense, in the defense thereof. The Trust also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Trust to such party of the Trust's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Trust will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.3(d). The Company agrees promptly to notify the Trust of the
commencement of any litigation or proceedings against it or any of its
respective officers or directors in connection with this Agreement, the issuance
or sale of the Contracts, with respect to the operation of either Account, or
the sale or acquisition of shares of the Trust.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the substantive laws of the State of
Delaware.
9.2. This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
Securities and Exchange Commission may grant (including, but not limited to, the
Shared Funding Exemptive Order) and the terms hereof shall be interpreted and
construed in accordance therewith.
ARTICLE X. TERMINATION
10.1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party for any reason by one hundred and
eighty (180) days advance written notice delivered to the
other parties; or
(b) termination by the Company by written notice to the Trust and
the Underwriter with respect to any Fund based upon the
Company's determination that shares of such Fund are not
reasonably available to meet the requirements of the
Contracts; or
(c) termination by the Company by written notice to the Trust and
the Underwriter with respect to any Fund in the event any of
the Fund's shares are not registered, issued or sold in
accordance with applicable state and/or federal law or such
law precludes the use of such shares as the underlying
investment media of the Contracts issued or to be issued by
the Company; or
(d) termination by the Company by written notice to the Trust and
the Underwriter with respect to any Fund in the event that
such Fund ceases to qualify as a Regulated Investment Company
under Subchapter M of the Code or under any successor or
similar provision, or if the Company reasonably believes that
the Trust may fail to so qualify; or
(e) termination by the Company by written notice to the Trust and
the Underwriter with respect to any Fund in the event that
such Fund falls to meet the diversification requirements
specified in Article VI hereof; or
(f) termination by the Trust by written notice to the Company if
the Trust shall determine, in its sole judgment exercised in
good faith, that the Company and/or its affiliated companies
has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse
publicity, or
(g) termination by the Company by written notice to the Trust and
the Underwriter, if the Company shall determine, in its sole
judgment exercised in good faith, that either the Trust or the
Underwriter has suffered a material adverse change in its
business, operations, financial condition or prospects since
the date of this Agreement or is the subject of material
adverse publicity; or
10.2. Notwithstanding any termination of this Agreement, the Trust
shall, at the option of the Company, continue to make available additional
shares of the Trust pursuant to the terms and conditions of this Agreement, for
all Contracts in effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing, Contracts"). Specifically, without
limitation, the owners of the Existing Contracts shall be permitted to direct
reallocation of investments in the Trust, redemption of investments in the Trust
and investment in the Trust upon the making of additional purchase payments
under the Existing Contracts. The parties agree that this Section 10.2 shall not
apply to any terminations under Article VII and the effect of such Article VII
terminations shall be governed by Article VII of this Agreement.
10.3. The Company shall not redeem Trust shares attributable to the
Contracts (as distinct from Trust shares attributable to the Company's assets
held in the Account) except (i) as necessary to implement Contract Owner
initiated or approved transactions, or (ii) as required by state and/or federal
laws or regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption") or (iii) as
permitted by an order of the Securities and Exchange Commission pursuant to
Section 26(b) of the 1940 Act. Upon request, the Company will promptly furnish
to the Trust the opinion of counsel for the Company (which counsel shall be
reasonably satisfactory to the Trust) to the effect that any redemption pursuant
to clause (ii) above is a Legally Required Redemption. Furthermore, except in
cases where permitted under the terms of the Contracts, the Company shall not
prevent Contract Owners from allocating payments to a Fund that was otherwise
available under the Contracts without first giving the Trust 90 days prior
written notice of its intention to do so.
ARTICLE XI. NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Trust:
Rydex Variable Trust
6116 Executive Boulevard, Suite 400
Rockville, MD 20852
If to Underwriter:
PADCO Financial Services, Inc.
6116 Executive Boulevard, Suite 400
Rockville, MD 20852
If to the Company:
Conseco Variable Insurance Company
11825 North Pennsylvania Street
Carmel, IN 46032
ARTICLE XII. MISCELLANEOUS
12.1. All persons dealing with the Trust must look solely to the
property of the Trust for the enforcement of any claims against the Trust as
neither the Board, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Trust.
12.2. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come into
the public domain without the express written consent of the affected party.
12.3. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
12.6. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the
Securities and Exchange Commission, the National Association of Securities
Dealers and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the California Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the insurance operations
of the Company are being conducted in a manner consistent with the California
Insurance Regulations and any other applicable law or regulations.
12.7. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations at law or in equity, which the parties hereto are entitled to under
state and federal laws.
12.8. This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto; provided, however, that an Underwriter may assign this Agreement or any
rights or obligations hereunder to any affiliate of or company under common
control with the Underwriter, if such assignee is duly licensed and registered
to perform the obligations of the Underwriter under this Agreement.
12.9. The Company shall furnish, or shall cause to be furnished, to the
Trust or its designee copies of the following reports:
(a) the Company's annual statement (prepared under
statutory accounting principles) and annual report
(prepared under generally accepted accounting
principles ("GAAP"), if any), as soon as practical
and in any event within 90 days after the end of each
fiscal year;
(b) the Company's quarterly statements (statutory) (and
GAAP, if any), as soon as practical and in any event
within 45 days after the end of each quarterly
period:
12.10. No provision of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by the
Company, Trust and Underwriter.
12.11. If this Agreement terminates, the parties agree that Article VII
and Sections 12.2 and 12.6 shall remain in effect after termination.
12.12. In the event the Trust intends to terminate the existence of a
Fund(s), the Underwriter shall be liable for the payment of all expenses
incurred in connection with any fund substitution undertaken by Company as a
result of such termination. Such expenses shall include but not be limited to
legal, accounting and brokerage costs.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the date specified above.
CONSECO VARIABLE INSURANCE COMPANY
By: ______________________________
RYDEX VARIABLE TRUST
By: ______________________________
PADCO FINANCIAL SERVICES, INC.
By: ______________________________
CONSECO VARIABLE INSURANCE COMPANY
SCHEDULE A
SEPARATE ACCOUNTS AND ASSOCIATED CONTRACTS
Shares of the Funds of the Trust shall be made available as investments
for the following Separate Accounts:
Conseco Variable Annuity Account C - (5/1/93) Annuity Contract Form No. 22-4025
Conseco Variable Annuity Account E - (11/12/93) Annuity Contract Form No.
22-4047, 22-4048
Conseco Variable Annuity Account F - (9/26/97) Annuity Contract Form No. 22-4061
Conseco Variable Annuity Account G - (1/18/96) Annuity Contract Form No. 22-4056
Conseco Variable Annuity Account H - (11/1/99) Annuity Contract Form No.
CVIC-2000, CVIC-2001
Conseco Variable Life Account A - (tbd) Contract Form No. CVIC-1000
SCHEDULE B
PROXY VOTING PROCEDURES
The following is a list of procedures and corresponding responsibilities for the
handling of proxies and voting instructions relating to the Trust. The defined
terms herein shall have the meanings assigned in the Participation Agreement
except that the term "Company" shall also include the department or third party
assigned by the Company to perform the steps delineated below.
1 The proxy proposals are given to the Company by the Trust as early as
possible before the date set by the Trust for the shareholder meeting to
enable the Company to consider and prepare for the solicitation of voting
instructions from owners of the Contracts and to facilitate the
establishment of tabulation procedures. At this time the Trust will inform
the Company of the Record, Mailing and Meeting dates.
This will be done verbally approximately two months before meeting.
2 Promptly after the Record Date, the Company will perform a "tape run", or
other activity, which will generate the names, addresses and number of
units which are attributed to each contract owner/policyholder (the
"Customer") as of the Record Date. Allowance should be made for account
adjustments made after this date that could affect the status of the
Customers' accounts as of the Record Date.
Note: The number of proxy statements is determined by the activities
described in this Step #2. The Company will use its best efforts to call in
the number of Customers to the Trust , as soon as possible, but no later
than two weeks after the Record Date.
3 The Trust's Annual Report must be sent to each Customer by the Company
either before or together with the Customers' receipt of voting,
instruction solicitation material. The Trust will provide the last Annual
Report to the Company pursuant to the terms of Section 3.3 of the Agreement
to which this Schedule relates.
4 The text and format for the Voting Instruction Cards ("Cards" or "Card") is
provided to the Company by the Trust. The Company, at its expense, shall
produce and personalize the Voting Instruction Cards. The Trust or its
affiliate must approve the Card before it is printed. Allow approximately
2-4 business days for printing information on the Cards. Information
commonly found on the Cards includes:
a name (legal name as found on account registration)
b address
c Trust or account number
d coding to state number of units
e individual Card number for use in tracking and verification of votes
(already on Cards as printed by the Trust).
(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)
5 During this time, the Trust will develop, produce and pay for the Notice of
Proxy and the Proxy Statement (one document). Printed and folded notices
and statements will be sent to Company for insertion into envelopes
(envelopes and return envelopes are provided and paid for by the Company).
Contents of envelope sent to Customers by the Company will include:
a Voting Instruction Card(s)
b one proxy notice and statement (one document)
c return envelope (postage pre-paid by Company) addressed to the Company
or its tabulation agent d "urge buckslip" - optional, but recommended.
(This is a small, single sheet of paper that requests Customers to
vote as quickly as possible and that their vote is important. One copy
will be supplied by the Trust.)
e cover letter - optional, supplied by Company and reviewed and approved
in advance by the Trust
6 The above contents should be received by the Company approximately 3-5
business days before mail date. Individual in charge at Company reviews and
approves the contents of the mailing package to ensure correctness and
completeness. Copy of this approval sent to the Trust.
7 Package mailed by the Company.
* The Trust must allow at least a 15-day solicitation time to the
Company as the shareowner. (A 5-week period is recommended.)
Solicitation time is calculated as calendar days from (but not
including,) the meeting, counting backwards.
8 Collection and tabulation of Cards begins. Tabulation usually takes place
in another department or another vendor depending on process used. An often
used procedure is to sort Cards on arrival by proposal into vote categories
of all yes, no, or mixed replies, and to begin data entry.
Note: Postmarks are not generally needed. A need for postmark information
would be due to an insurance company's internal procedure and has not been
required by the Trust in the past.
9 Signatures on Card checked against legal name on account registration which
was printed on the Card.
Note: For Example, if the account registration is under "John A. Smith,
Trustee," then that is the exact legal name to be printed on the Card and
is the signature needed on the Card.
10 If Cards are mutilated, or for any reason are illegible or are not signed
properly, they are sent back to Customer with an explanatory letter and a
new Card and return envelope. The mutilated or illegible Card is
disregarded and considered to be not received for purposes of vote
tabulation. Any Cards that have been "kicked out" (e.g. mutilated,
illegible) of the procedure are "hand verified," i.e., examined as to why
they did not complete the system. Any questions on those Cards are usually
remedied individually.
11 There are various control procedures used to ensure proper tabulation of
votes and accuracy of that tabulation. The most prevalent is to sort the
Cards as they first arrive into categories depending upon their vote; an
estimate of how the vote is progressing may then be calculated. If the
initial estimates and the actual vote do not coincide, then an internal
audit of that vote should occur. This may entail a recount.
12 The actual tabulation of votes is done in units which is then converted to
shares. (It is very important that the Trust receives the tabulations
stated in terms of a percentage and the number of shares.) The Trust must
review and approve tabulation format.
13 Final tabulation in shares is verbally given by the Company to the Trust on
the morning of the meeting not later than 10:00 a.m. Eastern time. The
Trust may request an earlier deadline if reasonable and if required to
calculate the vote in time for the meeting.
14 A Certification of Mailing and Authorization to Vote Shares will be
required from the Company as well as an original copy of the final vote.
The Trust will provide a standard form for each Certification.
15 The Company will be required to box and archive the Cards received from the
Customers. In the event that any vote is challenged or if otherwise
necessary for legal, regulatory, or accounting purposes, the Trust will be
permitted reasonable access to such Cards.
16 All approvals and "signing-off' may be done orally, but must always be
followed up in writing.
April 26, 2000
Board of Directors
Conseco Variable Insurance Company
Re: Conseco Variable Annuity Account E
Registration Statement on Form N-4
Gentlemen and Madam:
I am Executive Vice President, General Counsel and Secretary of Conseco Variable
Insurance Company (the "Company"). At your request, I have examined or caused to
be examined the Registration Statement on Form N-4 (the "Registration
Statement") of Conseco Variable Annuity Account E (formerly Great American
Reserve Variable Annuity Account E) (the "Registrant" or "Account") with respect
to the securities issued in connection with the Account offering variable
annuity contracts. The Registrant's Form N-4 Registration Statement is filed
pursuant to the Securities Act of 1933 (the "Act") and the Investment Company
Act of 1940 (the "1940 Act"). This opinion is being furnished pursuant to the
Act in connection with the Registration Statement. No fee is payable because the
Registrant files a declaration of indefinite registration pursuant to Rule 24f-2
under the 1940 Act.
In rendering this opinion, I, or attorneys under my supervision (together
referred to herein as "we"), have examined and relied upon a copy of the
Registration Statement. We have also examined originals, or copies of originals
certified to our satisfaction, of such agreements, documents, certificates and
statements of government officials and other instruments, and have examined such
questions of law and have satisfied ourselves as to such matters of fact, as we
have considered relevant and necessary as a basis for this opinion. We have
assumed the authenticity of all documents submitted to us as originals, the
genuineness of all signatures, the legal capacity of all natural persons and the
conformity with the original documents of any copies thereof submitted to us for
examination.
Based on the foregoing, and subject to the qualifications and limitations
hereinafter set forth, I am of the opinion that:
1. The Account has been duly organized and is an existing separate account
pursuant to the applicable laws of the State of Texas;
2. The Account is a unit investment trust registered under the 1940 Act;
and
3. The securities issued in connection with the Account offering variable
annuity contracts, when issued as described in the Registration Statement, will
be duly authorized and upon issuance will be validly issued, fully paid and
non-assessable.
I do not find it necessary for the purposes of this opinion to cover, and
accordingly I express no opinion as to, the application of the securities or
blue sky laws of the various states to the sale of the securities to be
registered pursuant to the Registration Statement. Without limiting the
generality of the foregoing, I express no opinion in connection with the matters
contemplated by the Registration Statement, and no opinion may be implied or
inferred, except as expressly set forth herein.
This opinion is limited to the laws of the State of Indiana and of the United
States of America to the extent applicable. If any of the securities included in
the Registration Statement are governed by the laws of a state other than
Indiana, I have assumed for the purposes of this opinion that the laws of such
other state are the same as those of the State of Indiana.
I hereby consent to the inclusion of the opinion as Exhibit B-9 to the
Registration Statement and to all references to me in the Registration Statement
or the Prospectus included therein.
Very truly yours,
/s/ John J. Sabl
- -------------------------------
John J. Sabl
Executive Vice President,
General Counsel and Secretary
JJS:jjm
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Post-Effective Amendment No. 9 to the
Registration Statement of Conseco Variable Annuity Account E (the "Account")
on Form N-4 (File Nos. 33-74092 and 811-8288) of:
(1) Our report dated February 10, 2000, on our audits of the
financial statements of the Account; and
(2) Our report dated April 13, 2000, on our audits of the
financial statements of Conseco Variable Insurance Company.
We also consent to the reference to our Firm under the caption "Independent
Accountants".
/s/ PricewaterhouseCoopers LLP
-------------------------------
PricewaterhouseCoopers LLP
Indianapolis, Indiana
April 25, 2000
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
CST - BALANCED
INDIVIDUAL AND GROUP - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Aa1299.XLS]A
- ------------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 2.147855 465.581 1998 2.147855 -0.922 464.659 2.771503 1,287.80 90 % X 9% -104.31
1997 1.973445 506.728 1997 1.973445 -1.003 504.803 2.771503 1,399.06 90 % X 9% -113.32
1996 1.698128 588.884 1996 1.698128 -1.166 585.793 2.771503 1,623.53 90 % X 8% -116.89
1995 1.342379 744.946 1995 1.342379 -1.475 740.380 2.771503 2,051.96 90 % X 7% -129.27
1994 1.035219 965.979 1994 1.035219 -1.913 959.500 2.771503 2,659.26 90 % X 5% -119.67
Incept 1.000000 1,000.000 N/A 0.000000 0.000 993.521 2.771503 2,753.55 90 % X 3% -74.35
INITIALS DATE
-------------------------
Prepared By: 18-Apr-00
-------------------------
Approved By: 11:45 AM
-------------------------
- -----------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
For Surr Admin Admin Fee n
Charge Fee (ERV) P(1+T) = ERV
- -----------------------------------------------------
<C> <C> <C> <C>
1,183.49 -1.98 1,181.51 18.15%
1,285.74 -1.98 1,283.76 13.30%
1,506.64 -1.98 1,504.66 14.59%
1,922.69 -1.98 1,920.71 17.72%
2,539.59 -1.98 2,537.61 20.47%
2,679.20 -1.98 2,677.22 19.86%
Incep
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
ALGER AMERICAN LEVERAGED ALLCAP
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/1999
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Alg1299.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 2.856798 350.042 1998 2.856798 -0.693 349.349 5.01625 1,752.42 90 % X 9% -141.95
1997 1.835511 544.807 1997 1.835511 -1.079 543.035 5.01625 2,724.00 90 % X 9% -220.64
1996 1.555302 642.962 1996 1.555302 -1.273 639.917 5.01625 3,209.98 90 % X 8% -231.12
1995 1.407908 710.274 1995 1.407908 -1.406 705.823 5.01625 3,540.58 90 % X 7% -223.06
Incep 1.000000 1,000.000 N/A 0.000000 0.000 995.549 5.01625 4,993.92 90 % X 5% -224.73
--------------------------
Initials Date
--------------------------
Prepared by:
--------------------------
Approved by:
--------------------------
18-Apr-00
11:46:58 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,610.47 -1.98 1,608.49 60.85%
2,503.36 -1.98 2,501.38 58.16%
2,978.86 -1.98 2,976.88 43.85%
3,317.52 -1.98 3,315.54 34.94%
4,769.19 -1.98 4,767.21 40.57%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
ALGER AMERICAN SMALL CAPITALIZATION
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/1999
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Alg1299.XLS]B
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.566862 638.218 1998 1.566862 -1.264 636.954 2.21594 1,411.45 90 % X 9% -114.33
1997 1.375354 727.086 1997 1.375354 -1.440 724.383 2.21594 1,605.19 90 % X 9% -130.02
1996 1.252107 798.654 1996 1.252107 -1.581 794.369 2.21594 1,760.27 90 % X 8% -126.74
1995 1.218931 820.391 1995 1.218931 -1.624 814.482 2.21594 1,804.84 90 % X 7% -113.70
Incep 1.000000 1,000.000 N/A 0.000000 0.000 994.091 2.21594 2,202.85 90 % X 5% -99.13
--------------------------
Initials Date
--------------------------
Prepared by:
--------------------------
Approved by:
--------------------------
18-Apr-00
11:46:58 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,297.12 -1.98 1,295.14 29.51%
1,475.17 -1.98 1,473.19 21.38%
1,633.53 -1.98 1,631.55 17.72%
1,691.14 -1.98 1,689.16 14.00%
2,103.72 -1.98 2,101.74 17.58%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
ALGER AMERICAN GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/1999
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Alg1299.XLS]C
- -------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- -------------------------------------------------------------------------------------------------------------------------------
1998 1.88941 529.266 1998 1.88941 -1.048 528.218 2.491860 1,316.25 90 % X 9% -106.62
1997 1.293971 772.815 1997 1.293971 -1.530 770.237 2.491860 1,919.32 90 % X 9% -155.46
1996 1.043521 958.294 1996 1.043521 -1.897 953.818 2.491860 2,376.78 90 % X 8% -171.13
Incep 1.000000 1,000.000 N/A 0.000000 0.000 995.524 2.491860 2,480.71 90 % X 7% -156.28
--------------------------
Initials Date
--------------------------
Prepared by:
--------------------------
Approved by:
--------------------------
18-Apr-00
11:46:58 AM
- ---------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- ---------------------------------------------------------
1,209.63 -1.98 1,207.65 20.77%
1,763.86 -1.98 1,761.88 32.74%
2,205.65 -1.98 2,203.67 30.13%
2,324.43 -1.98 2,322.45 25.80%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
ALGER AMERICAN MIDCAP GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/1999
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Alg1299.XLS]D
- -------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- -------------------------------------------------------------------------------------------------------------------------------
1998 1.437775 695.519 1998 1.437775 -1.377 694.142 1.869335 1,297.58 90 % X 9% -105.10
1997 1.118979 893.672 1997 1.118979 -1.769 890.525 1.869335 1,664.69 90 % X 9% -134.84
1996 0.986695 1,013.484 1996 0.986695 -2.007 1,008.331 1.869335 1,884.91 90 % X 8% -135.71
Incep 1.000000 1,000.000 N/A 0.000000 0.000 994.847 1.869335 1,859.70 90 % X 7% -117.16
--------------------------
Initials Date
--------------------------
Prepared by:
--------------------------
Approved by:
--------------------------
18-Apr-00
11:46:58 AM
- ---------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- ---------------------------------------------------------
1,192.48 -1.98 1,190.50 19.05%
1,529.85 -1.98 1,527.87 23.61%
1,749.20 -1.98 1,747.22 20.44%
1,742.54 -1.98 1,740.56 16.30%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
AMERICAN CENTURY - INTERNATIONAL FUND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Am1299.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.279955 781.277 1998 1.279955 -1.547 779.730 2.070551 1,614.47 90 % X 9% -130.77
1997 1.092954 914.952 1997 1.092954 -1.812 911.593 2.070551 1,887.50 90 % X 9% -152.89
Incept 1.000000 1,000.000 N/A 0.000000 0.000 996.641 2.070551 2,063.60 90 % X 8% -148.58
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:48:37 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,483.70 -1.98 1,481.72 48.17%
1,734.61 -1.98 1,732.63 31.63%
1,915.02 -1.98 1,913.04 27.49%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
AMERICAN CENTURY - VALUE FUND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Am1299.XLS]B
- -------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- -------------------------------------------------------------------------------------------------------------------------------
1998 1.267116 789.194 1998 1.267116 -1.563 787.631 1.238881 975.78 90 % X 9% -79.04
1997 1.225987 815.669 1997 1.225987 -1.615 812.491 1.238881 1,006.58 90 % X 9% -81.53
Incept 1.000000 1,000.000 N/A 0.000000 0.000 996.822 1.238881 1,234.94 90 % X 8% -88.92
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:48:37 AM
- ---------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- ---------------------------------------------------------
896.74 -1.98 894.76 -10.52%
925.05 -1.98 923.07 -3.92%
1,146.02 -1.98 1,144.04 5.17%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
AMERICAN CENTURY - INCOME AND GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Am1299.XLS]C
- -----------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated Total Accum
Units Year of For Annual Units Deducted Total Total Surrender Value after
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender Deduction fo
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge Surr Charge
- -----------------------------------------------------------------------------------------------------------------------------------
1998 1.081920 924.283 1998 1.081920 -1.830 922.453 1.259139 1,161.50 90 % X 9% -94.08 1,067.42
Incept 1.000000 1,000.000 N/A 0.000000 0.000 998.170 1.259139 1,256.83 90 % X 9% -101.80 1,155.03
--------------------------
Initials Date
--------------------------
Prepared by:
--------------------------
Approved by:
--------------------------
18-Apr-00
11:48:37 AM
- ---------------------------------------
Value after Average Annual
Full Deduction forTotal Return
rSurrender Admin Fee n
Admin Fee (ERV) P(1+T) = ERV
- ---------------------------------------
-1.98 1,065.44 6.54%
-1.98 1,153.05 8.90%
CONSECO VARIABLE INSURANCE - ACCOUNT "E"
CST - FIXED INCOME
INDIVIDUAL AND GROUP - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Bd1299.XLS]A
- ------------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1.369208 730.349 1998 1.369208 -1.446 728.903 1.344927 980.32 90 % X 9% -79.41
1997 1.307768 764.662 1997 1.307768 -1.514 761.702 1.344927 1,024.43 90 % X 9% -82.98
1996 1.206516 828.833 1996 1.206516 -1.641 824.232 1.344927 1,108.53 90 % X 8% -79.81
1995 1.165727 857.834 1995 1.165727 -1.699 851.534 1.344927 1,145.25 90 % X 7% -72.15
1994 0.999698 1,000.302 1994 0.999698 -1.981 992.022 1.344927 1,334.20 90 % X 5% -60.04
Incept 1.000000 1,000.000 N/A 0.000000 0.000 991.720 1.344927 1,333.79 90 % X 3% -36.01
INITIALS DATE
--------------------------------------
Prepared By: 18-Apr-00
--------------------------------------
Approved By: 11:50 AM
------------------------
- -----------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
For Surr Admin Admin Fee n
Charge Fee (ERV) P(1+T) = ERV
- -----------------------------------------------------
900.91 -1.98 898.93 -10.11%
941.45 -1.98 939.47 -3.07%
1,028.72 -1.98 1,026.74 0.88%
1,073.10 -1.98 1,071.12 1.73%
1,274.16 -1.98 1,272.18 4.93%
1,297.78 -1.98 1,295.80 4.88%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
BERGER IPT GROWTH FUND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Ber1299.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.324112 755.223 1998 1.324112 -1.495 753.728 1.947260 1,467.70 90 % X 9% -118.88
1997 1.154662 866.054 1997 1.154662 -1.715 862.844 1.947260 1,680.18 90 % X 9% -136.09
1996 1.029280 971.553 1996 1.029280 -1.924 966.419 1.947260 1,881.87 90 % X 8% -135.49
Incep 1.000000 1,000.000 N/A 0.000000 0.000 994.866 1.947260 1,937.26 90 % X 7% -122.05
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:51:37 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,348.82 -1.98 1,346.84 34.68%
1,544.09 -1.98 1,542.11 24.18%
1,746.38 -1.98 1,744.40 20.38%
1,815.21 -1.98 1,813.23 17.60%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
BERGER IPT GROWTH AND INCOME FUND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Ber1299.XLS]B
- -------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- -------------------------------------------------------------------------------------------------------------------------------
1998 1.677071 596.278 1998 1.677071 -1.181 595.097 2.630360 1,565.32 90 % X 9% -126.79
1997 1.360249 735.160 1997 1.360249 -1.456 732.524 2.630360 1,926.80 90 % X 9% -156.07
1996 1.103582 906.140 1996 1.103582 -1.794 901.710 2.630360 2,371.82 90 % X 8% -170.77
Incep 1.000000 1,000.000 N/A 0.000000 0.000 995.570 2.630360 2,618.71 90 % X 7% -164.98
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:51:37 AM
- ---------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- ---------------------------------------------------------
1,438.53 -1.98 1,436.55 43.66%
1,770.73 -1.98 1,768.75 32.99%
2,201.05 -1.98 2,199.07 30.04%
2,453.73 -1.98 2,451.75 27.67%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
BERGER IPT SMALL COMPANY
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Ber1299.XLS]C
- -------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- -------------------------------------------------------------------------------------------------------------------------------
1998 1.183412 845.014 1998 1.183412 -1.673 843.341 2.234216 1,884.21 90 % X 9% -152.62
1997 1.178105 848.821 1997 1.178105 -1.681 845.467 2.234216 1,888.96 90 % X 9% -153.01
1996 0.984692 1,015.546 1996 0.984692 -2.011 1,010.181 2.234216 2,256.96 90 % X 8% -162.50
Incep 1.000000 1,000.000 N/A 0.000000 0.000 994.635 2.234216 2,222.23 90 % X 7% -140.00
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:51:37 AM
- ---------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- ---------------------------------------------------------
1,731.59 -1.98 1,729.61 72.96%
1,735.95 -1.98 1,733.97 31.68%
2,094.46 -1.98 2,092.48 27.90%
2,082.23 -1.98 2,080.25 22.08%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
BERGER IPT BIAM INTERNATIONAL
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Ber1299.XLS]D
- -------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- -------------------------------------------------------------------------------------------------------------------------------
1998 1.110669 900.358 1998 1.110669 -1.783 898.575 1.439253 1,293.28 90 % X 9% -104.76
1997 0.969881 1,031.054 1997 0.969881 -2.041 1,027.230 1.439253 1,478.44 90 % X 9% -119.75
Incep 1.000000 1,000.000 N/A 0.000000 0.000 996.176 1.439253 1,433.75 90 % X 8% -103.23
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:51:37 AM
- ---------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- ---------------------------------------------------------
1,188.52 -1.98 1,186.54 18.65%
1,358.69 -1.98 1,356.71 16.48%
1,330.52 -1.98 1,328.54 11.22%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
DREYFUS STOCK INDEX
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Dry1299.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 2.318443 431.324 1998 2.318443 -0.854 430.470 2.757290 1,186.93 90 % X 9% -96.14
1997 1.833764 545.326 1997 1.833764 -1.080 543.392 2.757290 1,498.29 90 % X 9% -121.36
1996 1.398634 714.983 1996 1.398634 -1.416 711.634 2.757290 1,962.18 90 % X 8% -141.28
1995 1.157620 863.841 1995 1.157620 -1.710 858.781 2.757290 2,367.91 90 % X 7% -149.18
Incept 1.000000 1,000.000 N/A 0.000000 0.000 994.940 2.757290 2,743.34 90 % X 5% -123.45
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:53:04 AM
- ---------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- ---------------------------------------------------------
1,090.79 -1.98 1,088.81 8.88%
1,376.93 -1.98 1,374.95 17.26%
1,820.90 -1.98 1,818.92 22.07%
2,218.73 -1.98 2,216.75 22.02%
2,619.89 -1.98 2,617.91 23.35%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
DREYFUS SOCIALLY RESPONSIBLE GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Dry1299.XLS]B
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 2.268331 440.853 1998 2.268331 -0.873 439.980 2.909651 1,280.19 90 % X 9% -103.70
1997 1.777912 562.458 1997 1.777912 -1.114 560.471 2.909651 1,630.78 90 % X 9% -132.09
1996 1.404343 712.077 1996 1.404343 -1.410 708.681 2.909651 2,062.01 90 % X 8% -148.46
1995 1.174867 851.160 1995 1.174867 -1.685 846.078 2.909651 2,461.79 90 % X 7% -155.09
Incept 1.000000 1,000.000 N/A 0.000000 0.000 994.918 2.909651 2,894.86 90 % X 5% -130.27
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:53:04 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,176.49 -1.98 1,174.51 17.45%
1,498.69 -1.98 1,496.71 22.34%
1,913.55 -1.98 1,911.57 24.11%
2,306.70 -1.98 2,304.72 23.21%
2,764.59 -1.98 2,762.61 24.80%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
DREYFUS DISCIPLINED STOCK
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Dry1299.XLS]C
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.071933 932.894 1998 1.071933 -1.847 931.047 1.252051 1,165.72 90 % X 9% -94.42
Incept 1.000000 1,000.000 N/A 0.000000 0.000 998.153 1.252051 1,249.74 90 % X 9% -101.23
---------------------------
Initials Date
---------------------------
Prepared by:
---------------------------
Approved by:
---------------------------
18-Apr-00
11:53:04 AM
- ----------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction forTotal Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- ----------------------------------------------------
1,071.30 -1.98 1,069.32 6.93%
1,148.51 -1.98 1,146.53 8.53%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
DREYFUS INTERNATIONAL VALUE
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Dry1299.XLS]D
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 0.941707 1,061.901 1998 0.941707 -2.103 1,059.798 1.186966 1,257.94 90 % X 9% -101.89
Incept 1.000000 1,000.000 N/A 0.000000 0.000 997.897 1.186966 1,184.47 90 % X 9% -95.94
----------------------------
Initials Date
----------------------------
Prepared by:
----------------------------
Approved by:
----------------------------
18-Apr-00
11:53:04 AM
- -------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- -------------------------------------------------------
1,156.05 -1.98 1,154.07 15.41%
1,088.53 -1.98 1,086.55 5.09%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
FEDERATED HIGH INCOME BOND II
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Fed1299.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.366573 731.757 1998 1.366573 -1.449 730.308 1.378642 1,006.83 90 % X 9% -81.55
1997 1.349419 741.060 1997 1.349419 -1.467 738.144 1.378642 1,017.64 90 % X 9% -82.43
1996 1.202161 831.835 1996 1.202161 -1.647 827.272 1.378642 1,140.51 90 % X 8% -82.12
1995 1.066579 937.577 1995 1.066579 -1.856 931.157 1.378642 1,283.73 90 % X 7% -80.87
Incept 1.000000 1,000.000 N/A 0.000000 0.000 993.580 1.378642 1,369.79 90 % X 5% -61.64
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:55:30 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
925.28 -1.98 923.30 -7.67%
935.21 -1.98 933.23 -3.40%
1,058.39 -1.98 1,056.41 1.85%
1,202.86 -1.98 1,200.88 4.68%
1,308.15 -1.98 1,306.17 6.00%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
FEDERATED INTERNATIONAL EQUITY II
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Fed1299.XLS]B
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.471681 679.495 1998 1.471681 -1.345 678.150 2.683147 1,819.58 90 % X 9% -147.39
1997 1.188469 841.419 1997 1.188469 -1.666 838.408 2.683147 2,249.57 90 % X 9% -182.22
1996 1.094819 913.393 1996 1.094819 -1.809 908.573 2.683147 2,437.84 90 % X 8% -175.52
1995 1.025080 975.534 1995 1.025080 -1.932 968.783 2.683147 2,599.39 90 % X 7% -163.76
Incept 1.000000 1,000.000 N/A 0.000000 0.000 993.249 2.683147 2,665.03 90 % X 5% -119.93
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:55:30 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,672.19 -1.98 1,670.21 67.02%
2,067.35 -1.98 2,065.37 43.71%
2,262.32 -1.98 2,260.34 31.24%
2,435.63 -1.98 2,433.65 24.90%
2,545.10 -1.98 2,543.12 22.57%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
FEDERATED UTILITY II
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Fed1299.XLS]C
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.731943 577.386 1998 1.731943 -1.143 576.243 1.736793 1,000.81 90 % X 9% -81.07
1997 1.541347 648.783 1997 1.541347 -1.285 646.355 1.736793 1,122.59 90 % X 9% -90.93
1996 1.234309 810.170 1996 1.234309 -1.604 806.138 1.736793 1,400.09 90 % X 8% -100.81
1995 1.122090 891.194 1995 1.122090 -1.765 885.397 1.736793 1,537.75 90 % X 7% -96.88
Incept 1.000000 1,000.000 N/A 0.000000 0.000 994.203 1.736793 1,726.73 90 % X 5% -77.70
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:55:30 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
919.74 -1.98 917.76 -8.22%
1,031.66 -1.98 1,029.68 1.47%
1,299.28 -1.98 1,297.30 9.06%
1,440.87 -1.98 1,438.89 9.52%
1,649.03 -1.98 1,647.05 11.49%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
CST - GOVERNMENT SECURITIES
INDIVIDUAL AND GROUP - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
- ------------------------------------------------------------------------------------------------------------------------------------
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Gov1299.XLS]A
- ------------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1.318099 758.668 1998 1.318099 -1.502 757.166 1.267688 959.85 90 % X 9% -77.75
1997 1.248382 801.037 1997 1.248382 -1.586 797.949 1.267688 1,011.55 90 % X 9% -81.94
1996 1.169361 855.168 1996 1.169361 -1.693 850.387 1.267688 1,078.02 90 % X 8% -77.62
1995 1.154244 866.368 1995 1.154244 -1.715 859.871 1.267688 1,090.05 90 % X 7% -68.67
1994 0.997441 1,002.566 1994 0.997441 -1.985 994.084 1.267688 1,260.19 90 % X 5% -56.71
Incept 1.000000 1,000.000 N/A 0.000000 0.000 991.518 1.267688 1,256.94 90 % X 3% -33.94
INITIALS DATE
--------------------------
Prepared By: 18-Apr-00
--------------------------
Approved By: 11:57 AM
- -----------------------------------------------------
- -----------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
For Surr Admin Admin Fee n
Charge Fee (ERV) P(1+T) = ERV
- -----------------------------------------------------
882.10 -1.98 880.12 -11.99%
929.61 -1.98 927.63 -3.69%
1,000.40 -1.98 998.42 -0.05%
1,021.38 -1.98 1,019.40 0.48%
1,203.48 -1.98 1,201.50 3.74%
1,223.00 -1.98 1,221.02 3.74%
Incep
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
INVESCO - HIGH YIELD FUND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Inv1299.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 0.950601 1,051.966 1998 0.950601 -2.083 1,049.883 1.023611 1,074.67 90 % X 9% -87.05
Incept 1.000000 1,000.000 N/A 0.000000 0.000 997.917 1.023611 1,021.48 90 % X 9% -82.74
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:58:32 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
987.62 -1.98 985.64 -1.44%
938.74 -1.98 936.76 -3.83%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
INVESCO - EQUITY INCOME
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Inv1299.XLS]B
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.029287 971.546 1998 1.029287 -1.924 969.622 1.165618 1,130.21 90 % X 9% -91.55
Incept 1.000000 1,000.000 N/A 0.000000 0.000 998.076 1.165618 1,163.38 90 % X 9% -94.23
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:58:32 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,038.66 -1.98 1,036.68 3.67%
1,069.15 -1.98 1,067.17 3.97%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
JANUS AGGRESSIVE GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Jan1299.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender D
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.982620 504.383 1998 1.982620 -0.999 503.384 4.406952 2,218.39 90 % X 9% -179.69
1997 1.497524 667.769 1997 1.497524 -1.322 665.448 4.406952 2,932.60 90 % X 9% -237.54
1996 1.347927 741.880 1996 1.347927 -1.469 738.090 4.406952 3,252.73 90 % X 8% -234.20
1995 1.266394 789.644 1995 1.266394 -1.563 784.291 4.406952 3,456.33 90 % X 7% -217.75
Incept 1.000000 1,000.000 N/A 0.000000 0.000 994.647 4.406952 4,383.36 90 % X 5% -197.25
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:59:47 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
eduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
2,038.70 -1.98 2,036.72 103.67%
2,695.06 -1.98 2,693.08 64.11%
3,018.53 -1.98 3,016.55 44.49%
3,238.58 -1.98 3,236.60 34.13%
4,186.11 -1.98 4,184.13 36.63%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
JANUS GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Jan1299.XLS]B
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender D
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 2.207852 452.929 1998 2.207852 -0.897 452.032 3.134816 1,417.04 90 % X 9% -114.78
1997 1.650431 605.902 1997 1.650431 -1.200 603.806 3.134816 1,892.82 90 % X 9% -153.32
1996 1.363534 733.388 1996 1.363534 -1.452 729.839 3.134816 2,287.91 90 % X 8% -164.73
1995 1.167465 856.557 1995 1.167465 -1.696 851.312 3.134816 2,668.71 90 % X 7% -168.13
Incept 1.000000 1,000.000 N/A 0.000000 0.000 994.755 3.134816 3,118.38 90 % X 5% -140.33
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:59:47 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
eduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,302.26 -1.98 1,300.28 30.03%
1,739.50 -1.98 1,737.52 31.82%
2,123.18 -1.98 2,121.20 28.49%
2,500.58 -1.98 2,498.60 25.73%
2,978.05 -1.98 2,976.07 26.85%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
JANUS WORLDWIDE GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Jan1299.XLS]C
- -------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- -------------------------------------------------------------------------------------------------------------------------------
1998 2.359887 423.749 1998 2.359887 -0.839 422.910 3.826970 1,618.46 90 % X 9% -131.10
1997 1.856255 538.719 1997 1.856255 -1.067 536.813 3.826970 2,054.37 90 % X 9% -166.40
1996 1.541029 648.917 1996 1.541029 -1.285 645.726 3.826970 2,471.18 90 % X 8% -177.92
1995 1.211204 825.625 1995 1.211204 -1.635 820.800 3.826970 3,141.18 90 % X 7% -197.89
Incept 1.000000 1,000.000 N/A 0.000000 0.000 995.175 3.826970 3,808.50 90 % X 5% -171.38
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:59:47 AM
- ---------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- ---------------------------------------------------------
1,487.36 -1.98 1,485.38 48.54%
1,887.97 -1.98 1,885.99 37.33%
2,293.26 -1.98 2,291.28 31.83%
2,943.29 -1.98 2,941.31 30.96%
3,637.12 -1.98 3,635.14 32.50%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
LORD ABBETT - GROWTH AND INCOME
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Lab1299.XLS]A
- ------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- ------------------------------------------------------------------------------------------------------------------------------
1998 1.004593 995.428 1998 1.004593 -1.971 993.457 1.156495 1,148.93 90 % X 9% -93.06
Incept 1.000000 1,000.000 N/A 0.000000 0.000 998.029 1.156495 1,154.22 90 % X 9% -93.49
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
12:00:58 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,055.87 -1.98 1,053.89 5.39%
1,060.73 -1.98 1,058.75 3.48%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
LAZARD - EQUITY
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Laz1299.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.055270 947.625 1998 1.055270 -1.876 945.749 1.125543 1,064.48 90 % X 9% -86.22
Incept 1.000000 1,000.000 N/A 0.000000 0.000 998.124 1.125543 1,123.43 90 % X 9% -91.00
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
12:03:24 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
978.26 -1.98 976.28 -2.37%
1,032.43 -1.98 1,030.45 1.81%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
LAZARD - SMALL
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Laz1299.XLS]B
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 0.855373 1,169.081 1998 0.855373 -2.315 1,166.766 0.886723 1,034.60 90 % X 9% -83.80
Incept 1.000000 1,000.000 N/A 0.000000 0.000 997.685 0.886723 884.67 90 % X 9% -71.66
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
12:03:24 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
950.80 -1.98 948.82 -5.12%
813.01 -1.98 811.03 -11.78%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
MITCHELL HUTCHINS - GROWTH AND INCOME
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Mh1299.XLS]A
- ------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- ------------------------------------------------------------------------------------------------------------------------------
1998 0.989814 1,010.291 1998 0.989814 -2.000 1008.29 1.076908 1,085.84 90 % X 9% -87.95
Incept 1.000000 1,000.000 N/A 0.000000 0.000 998.00 1.076908 1,074.75 90 % X 9% -87.05
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
12:04:39 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
997.89 -1.98 995.91 -0.41%
987.70 -1.98 985.72 -0.86%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
NEUBERGER BERMAN - LIMITED MATURITY BOND FUND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Neu1299.XLS]A
- ------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- ------------------------------------------------------------------------------------------------------------------------------
1998 1.073805 931.268 1998 1.073805 -1.844 929.424 1.074523 998.69 90 % X 9% -80.89
1997 1.043140 958.644 1997 1.043140 -1.898 954.902 1.074523 1,026.06 90 % X 9% -83.11
Incept 1.000000 1,000.000 N/A 0.000000 0.000 996.258 1.074523 1,070.50 90 % X 8% -77.08
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
12:06:46 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
917.80 -1.98 915.82 -8.42%
942.95 -1.98 940.97 -3.00%
993.42 -1.98 991.44 -0.32%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
NEUBERGER BERMAN - PARTNERS FUND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Neu1299.XLS]B
- ------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- ------------------------------------------------------------------------------------------------------------------------------
1998 1.274108 784.863 1998 1.274108 -1.554 783.309 1.348993 1,056.68 90 % X 9% -85.59
1997 1.239881 806.529 1997 1.239881 -1.597 803.378 1.348993 1,083.75 90 % X 9% -87.78
Incept 1.000000 1,000.000 N/A 0.000000 0.000 996.849 1.348993 1,344.74 90 % X 8% -96.82
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
12:06:46 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
971.09 -1.98 969.11 -3.09%
995.97 -1.98 993.99 -0.30%
1,247.92 -1.98 1,245.94 8.58%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
CST - EQUITY
INDIVIDUAL AND GROUP - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[St1299.XLS]A
- ----------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- ----------------------------------------------------------------------------------------------------------------------------------
1998 2.763812 361.819 1998 2.763812 -0.716 361.103 4.068452 1,469.13 90 % X 9% -119.00
1997 2.424118 412.521 1997 2.424118 -0.817 410.988 4.068452 1,672.08 90 % X 9% -135.44
1996 2.071274 482.795 1996 2.071274 -0.956 480.306 4.068452 1,954.10 90 % X 8% -140.70
1995 1.448804 690.224 1995 1.448804 -1.367 686.368 4.068452 2,792.46 90 % X 7% -175.92
1994 1.077853 927.770 1994 1.077853 -1.837 922.077 4.068452 3,751.43 90 % X 5% -168.81
Incept 1.000000 1,000.000 N/A 0.000000 0.000 994.307 4.068452 4,045.29 90 % X 3% -109.22
INITIALS DATE
---------------------------
Prepared By: 18-Apr-00
---------------------------
Approved By: 12:07 PM
---------------------------
- -------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
For Surr Admin Admin Fee n
Charge Fee (ERV) P(1+T) = ERV
- -------------------------------------------------------
1,350.13 -1.98 1,348.15 34.82%
1,536.64 -1.98 1,534.66 23.88%
1,813.40 -1.98 1,811.42 21.90%
2,616.54 -1.98 2,614.56 27.16%
3,582.62 -1.98 3,580.64 29.06%
3,936.07 -1.98 3,934.09 28.66%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
STRONG - MID CAP GROWTH FUND II
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Strg1299.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.611675 620.472 1998 1.611675 -1.229 619.243 3.017741 1,868.72 90 % X 9% -151.37
1997 1.270148 787.310 1997 1.270148 -1.559 784.523 3.017741 2,367.49 90 % X 9% -191.77
Incept 1.000000 1,000.000 N/A 0.000000 0.000 997.213 3.017741 3,009.33 90 % X 8% -216.67
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
12:09:23 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,717.35 -1.98 1,715.37 71.54%
2,175.72 -1.98 2,173.74 47.44%
2,792.66 -1.98 2,790.68 46.85%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
STRONG - OPPORTUNITY FUND II
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Strg1299.XLS]B
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.377011 726.211 1998 1.377011 -1.438 724.773 1.831885 1,327.70 90 % X 9% -107.54
1997 1.229863 813.099 1997 1.229863 -1.610 810.051 1.831885 1,483.92 90 % X 9% -120.20
Incept 1.000000 1,000.000 N/A 0.000000 0.000 996.952 1.831885 1,826.30 90 % X 8% -131.49
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
12:09:23 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,220.16 -1.98 1,218.18 21.82%
1,363.72 -1.98 1,361.74 16.69%
1,694.81 -1.98 1,692.83 21.78%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
VAN ECK HARD ASSETS
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/1999
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
C:\ELINK\FILING\[Van1299.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 0.828049 1,207.658 1998 0.828049 -2.391 1,205.267 0.988034 1,190.84 90 % X 9% -96.46
1997 1.215736 822.547 1997 1.215736 -1.629 818.527 0.988034 808.73 90 % X 9% -65.51
1996 1.253925 797.496 1996 1.253925 -1.579 791.897 0.988034 782.42 90 % X 8% -56.33
1995 1.077158 928.369 1995 1.077158 -1.838 920.932 0.988034 909.91 90 % X 7% -57.32
Incept 1.000000 1,000.000 N/A 0.000000 0.000 992.563 0.988034 980.69 90 % X 5% -44.13
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
03:07:59 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,094.38 -1.98 1,092.40 9.24%
743.22 -1.98 741.24 -13.90%
726.09 -1.98 724.11 -10.20%
852.59 -1.98 850.61 -3.96%
936.56 -1.98 934.58 -1.46%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
VAN ECK WORLDWIDE BOND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/1999
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
C:\ELINK\FILING\[Van1299.XLS]B
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.155392 865.507 1998 1.155392 -1.714 863.793 1.050195 907.15 90 % X 9% -73.48
1997 1.039146 962.329 1997 1.039146 -1.905 958.710 1.050195 1,006.83 90 % X 9% -81.55
1996 1.029224 971.606 1996 1.029224 -1.924 966.063 1.050195 1,014.55 90 % X 8% -73.05
1995 1.018153 982.171 1995 1.018153 -1.945 974.683 1.050195 1,023.61 90 % X 7% -64.49
Incept 1.000000 1,000.000 N/A 0.000000 0.000 992.512 1.050195 1,042.33 90 % X 5% -46.90
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
03:07:59 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
833.67 -1.98 831.69 -16.83%
925.28 -1.98 923.30 -3.91%
941.50 -1.98 939.52 -2.06%
959.12 -1.98 957.14 -1.09%
995.43 -1.98 993.45 -0.14%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
VAN ECK WORLDWIDE EMERGING MARKETS
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/1999
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
C:\ELINK\FILING\[Van1299.XLS]C
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 0.642969 1,555.285 1998 0.642969 -3.079 1,552.206 1.269899 1,971.14 90 % X 9% -159.66
1997 0.990151 1,009.947 1997 0.990151 -2.000 1,004.868 1.269899 1,276.08 90 % X 9% -103.36
1996 1.13594 880.328 1996 1.13594 -1.743 873.506 1.269899 1,109.26 90 % X 8% -79.87
Incep 1.000000 1,000.000 N/A 0.000000 0.000 993.178 1.269899 1,261.24 90 % X 7% -79.46
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
03:07:59 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,811.48 -1.98 1,809.50 80.95%
1,172.72 -1.98 1,170.74 8.20%
1,029.39 -1.98 1,027.41 0.91%
1,181.78 -1.98 1,179.80 4.61%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
VAN ECK REAL ESTATE
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/1999
-
-
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
-
C:\ELINK\FILING\[Van1299.XLS]D
-
- -----------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated Total Accuml
Units Year of For Annual Units Deducted Total Total Surrender Value after
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender Deduction f
Qtr Value For $1,000 Fee -$1.98 Admin Fee Units Unit Value Value Calc Charge Surr Charge
- -----------------------------------------------------------------------------------------------------------------------------------
1998 0.851446 1,174.473 1998 0.851446 -2.325 1,172.148 0.822657 964.28 90 % X 9% -78.11 886.17
Incep 1.000000 1,000.000 N/A 0.000000 0.000 997.675 0.822657 820.74 90 % X 9% -66.48 754.26
--------------------------
Initials Date
--------------------------
Prepared by:
--------------------------
Approved by:
--------------------------
18-Apr-00
03:07:59 PM
- ----------------------------------------
Value after Average Annua
Full Deduction forTotal Return
orSurrender Admin Fee n
Admin Fee (ERV) P(1+T) = ERV
- ----------------------------------------
-1.98 884.19 -11.58%
-1.98 752.28 -15.66%
</TABLE>
<TABLE>
<CAPTION>
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
CST - BALANCED
INDIVIDUAL AND GROUP - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Aa1299X.XLS]A
- ------------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee Admin Fee Units Unit Value Value Calc Charge
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 2.147855 465.581 1998 2.147855 0.000 465.581 2.771503 1,290.36 90 % X 9%
1997 1.973445 506.728 1997 1.973445 0.000 506.728 2.771503 1,404.40 90 % X 9%
1996 1.698128 588.884 1996 1.698128 0.000 588.884 2.771503 1,632.09 90 % X 8%
1995 1.342379 744.946 1995 1.342379 0.000 744.946 2.771503 2,064.62 90 % X 7%
1994 1.035219 965.979 1994 1.035219 0.000 965.979 2.771503 2,677.21 90 % X 5%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 2.771503 2,771.50 90 % X 3%
INITIALS DATE
-------------------------
Prepared By: 18-Apr-00
- --------------------------------------
Approved By: 11:44 AM
-------------------------
- -----------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
For Surr Admin Admin Fee n
Charge Fee (ERV) P(1+T) = ERV
- -----------------------------------------------------
<C> <C> <C> <C>
1,290.36 0.00 1,290.36 29.04%
1,404.40 0.00 1,404.40 18.51%
1,632.09 0.00 1,632.09 17.74%
2,064.62 0.00 2,064.62 19.87%
2,677.21 0.00 2,677.21 21.77%
2,771.50 0.00 2,771.50 20.63%
Incep
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
ALGER AMERICAN LEVERAGED ALLCAP
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/1999
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Alg1299X.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 2.856798 350.042 1998 2.856798 0.000 350.042 5.01625 1,755.90 90 % X 9%
1997 1.835511 544.807 1997 1.835511 0.000 544.807 5.01625 2,732.89 90 % X 9%
1996 1.555302 642.962 1996 1.555302 0.000 642.962 5.01625 3,225.26 90 % X 8%
1995 1.407908 710.274 1995 1.407908 0.000 710.274 5.01625 3,562.91 90 % X 7%
Incep 1.000000 1,000.000 N/A 0.000000 1,000.000 5.01625 5,016.25 90 % X 5%
--------------------------
Initials Date
--------------------------
Prepared by:
--------------------------
Approved by:
--------------------------
18-Apr-00
11:46:14 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,755.90 0.00 1,755.90 75.59%
2,732.89 0.00 2,732.89 65.31%
3,225.26 0.00 3,225.26 47.75%
3,562.91 0.00 3,562.91 37.39%
5,016.25 0.00 5,016.25 42.14%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
ALGER AMERICAN SMALL CAPITALIZATION
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/1999
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Alg1299X.XLS]B
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.566862 638.218 1998 1.566862 0.000 638.218 2.21594 1,414.25 90 % X 9%
1997 1.375354 727.086 1997 1.375354 0.000 727.086 2.21594 1,611.18 90 % X 9%
1996 1.252107 798.654 1996 1.252107 0.000 798.654 2.21594 1,769.77 90 % X 8%
1995 1.218931 820.391 1995 1.218931 0.000 820.391 2.21594 1,817.94 90 % X 7%
Incep 1.000000 1,000.000 N/A 0.000000 1,000.000 2.21594 2,215.94 90 % X 5%
--------------------------
Initials Date
--------------------------
Prepared by:
--------------------------
Approved by:
--------------------------
18-Apr-00
11:46:14 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,414.25 0.00 1,414.25 41.43%
1,611.18 0.00 1,611.18 26.93%
1,769.77 0.00 1,769.77 20.96%
1,817.94 0.00 1,817.94 16.12%
2,215.94 0.00 2,215.94 18.95%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
ALGER AMERICAN GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/1999
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Alg1299X.XLS]C
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.88941 529.266 1998 1.88941 0.000 529.266 2.491860 1,318.86 90 % X 9%
1997 1.293971 772.815 1997 1.293971 0.000 772.815 2.491860 1,925.75 90 % X 9%
1996 1.043521 958.294 1996 1.043521 0.000 958.294 2.491860 2,387.93 90 % X 8%
Incep 1.000000 1,000.000 N/A 0.000000 1,000.000 2.491860 2,491.86 90 % X 7%
--------------------------
Initials Date
--------------------------
Prepared by:
--------------------------
Approved by:
--------------------------
18-Apr-00
11:46:14 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,318.86 0.00 1,318.86 31.89%
1,925.75 0.00 1,925.75 38.77%
2,387.93 0.00 2,387.93 33.66%
2,491.86 0.00 2,491.86 28.24%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
ALGER AMERICAN MIDCAP GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/1999
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Alg1299X.XLS]D
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.437775 695.519 1998 1.437775 0.000 695.519 1.869335 1,300.16 90 % X 9%
1997 1.118979 893.672 1997 1.118979 0.000 893.672 1.869335 1,670.57 90 % X 9%
1996 0.986695 1,013.484 1996 0.986695 0.000 1,013.484 1.869335 1,894.54 90 % X 8%
Incep 1.000000 1,000.000 N/A 0.000000 1,000.000 1.869335 1,869.34 90 % X 7%
--------------------------
Initials Date
--------------------------
Prepared by:
--------------------------
Approved by:
--------------------------
18-Apr-00
11:46:14 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,300.16 0.00 1,300.16 30.02%
1,670.57 0.00 1,670.57 29.25%
1,894.54 0.00 1,894.54 23.74%
1,869.34 0.00 1,869.34 18.58%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
AMERICAN CENTURY - INTERNATIONAL FUND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Am1299X.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.279955 781.277 1998 1.279955 0.000 781.277 2.070551 1,617.67 90 % X 9%
1997 1.092954 914.952 1997 1.092954 0.000 914.952 2.070551 1,894.45 90 % X 9%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 2.070551 2,070.55 90 % X 8%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:48:12 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,617.67 0.00 1,617.67 61.77%
1,894.45 0.00 1,894.45 37.64%
2,070.55 0.00 2,070.55 31.32%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
AMERICAN CENTURY - VALUE FUND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Am1299X.XLS]B
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.267116 789.194 1998 1.267116 0.000 789.194 1.238881 977.72 90 % X 9%
1997 1.225987 815.669 1997 1.225987 0.000 815.669 1.238881 1,010.52 90 % X 9%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.238881 1,238.88 90 % X 8%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:48:12 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
977.72 0.00 977.72 -2.23%
1,010.52 0.00 1,010.52 0.52%
1,238.88 0.00 1,238.88 8.35%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
AMERICAN CENTURY - INCOME AND GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Am1299X.XLS]C
- -----------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated Total Accum
Units Year of For Annual Units Deducted Total Total Surrender Value after
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender Deduction fo
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge Surr Charge
- -----------------------------------------------------------------------------------------------------------------------------------
1998 1.081920 924.283 1998 1.081920 0.000 924.283 1.259139 1,163.80 90 % X 9% 1,163.80
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.259139 1,259.14 90 % X 9% 1,259.14
--------------------------
Initials Date
--------------------------
Prepared by:
--------------------------
Approved by:
--------------------------
18-Apr-00
11:48:12 AM
- ---------------------------------------
Value after Average Annual
Full Deduction forTotal Return
rSurrender Admin Fee n
Admin Fee (ERV) P(1+T) = ERV
- ---------------------------------------
0.00 1,163.80 16.38%
0.00 1,259.14 14.79%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
CST - FIXED INCOME
INDIVIDUAL AND GROUP - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Bd1299X.XLS]A
- ------------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1.369208 730.349 1998 1.369208 0.000 730.349 1.344927 982.27 90 % X 9%
1997 1.307768 764.662 1997 1.307768 0.000 764.662 1.344927 1,028.41 90 % X 9%
1996 1.206516 828.833 1996 1.206516 0.000 828.833 1.344927 1,114.72 90 % X 8%
1995 1.165727 857.834 1995 1.165727 0.000 857.834 1.344927 1,153.72 90 % X 7%
1994 0.999698 1,000.302 1994 0.999698 0.000 1,000.302 1.344927 1,345.33 90 % X 5%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.344927 1,344.93 90 % X 3%
INITIALS DATE
--------------------------------------
Prepared By: 18-Apr-00
--------------------------------------
Approved By: 11:49 AM
------------------------
- -----------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
For Surr Admin Admin Fee n
Charge Fee (ERV) P(1+T) = ERV
- -----------------------------------------------------
982.27 0.00 982.27 -1.77%
1,028.41 0.00 1,028.41 1.41%
1,114.72 0.00 1,114.72 3.69%
1,153.72 0.00 1,153.72 3.64%
1,345.33 0.00 1,345.33 6.11%
1,344.93 0.00 1,344.93 5.60%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
BERGER IPT GROWTH FUND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Ber1299X.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.324112 755.223 1998 1.324112 0.000 755.223 1.947260 1,470.62 90 % X 9%
1997 1.154662 866.054 1997 1.154662 0.000 866.054 1.947260 1,686.43 90 % X 9%
1996 1.029280 971.553 1996 1.029280 0.000 971.553 1.947260 1,891.87 90 % X 8%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.947260 1,947.26 90 % X 7%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:51:20 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,470.62 0.00 1,470.62 47.06%
1,686.43 0.00 1,686.43 29.86%
1,891.87 0.00 1,891.87 23.68%
1,947.26 0.00 1,947.26 19.91%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
BERGER IPT GROWTH AND INCOME FUND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Ber1299X.XLS]B
- -------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- -------------------------------------------------------------------------------------------------------------------------------
1998 1.677071 596.278 1998 1.677071 0.000 596.278 2.630360 1,568.43 90 % X 9%
1997 1.360249 735.160 1997 1.360249 0.000 735.160 2.630360 1,933.74 90 % X 9%
1996 1.103582 906.140 1996 1.103582 0.000 906.140 2.630360 2,383.47 90 % X 8%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 2.630360 2,630.36 90 % X 7%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:51:20 AM
- ---------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- ---------------------------------------------------------
1,568.43 0.00 1,568.43 56.84%
1,933.74 0.00 1,933.74 39.06%
2,383.47 0.00 2,383.47 33.58%
2,630.36 0.00 2,630.36 30.14%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
BERGER IPT SMALL COMPANY
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Ber1299X.XLS]C
- -------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- -------------------------------------------------------------------------------------------------------------------------------
1998 1.183412 845.014 1998 1.183412 0.000 845.014 2.234216 1,887.94 90 % X 9%
1997 1.178105 848.821 1997 1.178105 0.000 848.821 2.234216 1,896.45 90 % X 9%
1996 0.984692 1,015.546 1996 0.984692 0.000 1,015.546 2.234216 2,268.95 90 % X 8%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 2.234216 2,234.22 90 % X 7%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:51:20 AM
- ---------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- ---------------------------------------------------------
1,887.94 0.00 1,887.94 88.79%
1,896.45 0.00 1,896.45 37.71%
2,268.95 0.00 2,268.95 31.40%
2,234.22 0.00 2,234.22 24.48%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
BERGER IPT BIAM INTERNATIONAL
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Ber1299X.XLS]D
- ------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- ------------------------------------------------------------------------------------------------------------------------------
1998 1.110669 900.358 1998 1.110669 0.000 900.358 1.439253 1,295.84 90 % X 9%
1997 0.969881 1,031.054 1997 0.969881 0.000 1,031.054 1.439253 1,483.95 90 % X 9%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.439253 1,439.25 90 % X 8%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:51:20 AM
- ----------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- ----------------------------------------------------------
1,295.84 0.00 1,295.84 29.58%
1,483.95 0.00 1,483.95 21.82%
1,439.25 0.00 1,439.25 14.61%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
DREYFUS STOCK INDEX
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Dry1299X.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 2.318443 431.324 1998 2.318443 0.000 431.324 2.757290 1,189.29 90 % X 9%
1997 1.833764 545.326 1997 1.833764 0.000 545.326 2.757290 1,503.62 90 % X 9%
1996 1.398634 714.983 1996 1.398634 0.000 714.983 2.757290 1,971.42 90 % X 8%
1995 1.157620 863.841 1995 1.157620 0.000 863.841 2.757290 2,381.86 90 % X 7%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 2.757290 2,757.29 90 % X 5%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:52:48 AM
- ---------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- ---------------------------------------------------------
1,189.29 0.00 1,189.29 18.93%
1,503.62 0.00 1,503.62 22.62%
1,971.42 0.00 1,971.42 25.39%
2,381.86 0.00 2,381.86 24.23%
2,757.29 0.00 2,757.29 24.75%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
DREYFUS SOCIALLY RESPONSIBLE GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Dry1299X.XLS]B
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 2.268331 440.853 1998 2.268331 0.000 440.853 2.909651 1,282.73 90 % X 9%
1997 1.777912 562.458 1997 1.777912 0.000 562.458 2.909651 1,636.56 90 % X 9%
1996 1.404343 712.077 1996 1.404343 0.000 712.077 2.909651 2,071.90 90 % X 8%
1995 1.174867 851.160 1995 1.174867 0.000 851.160 2.909651 2,476.58 90 % X 7%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 2.909651 2,909.65 90 % X 5%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:52:48 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,282.73 0.00 1,282.73 28.27%
1,636.56 0.00 1,636.56 27.93%
2,071.90 0.00 2,071.90 27.48%
2,476.58 0.00 2,476.58 25.45%
2,909.65 0.00 2,909.65 26.22%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
DREYFUS DISCIPLINED STOCK
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Dry1299X.XLS]C
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.071933 932.894 1998 1.071933 0.000 932.894 1.252051 1,168.03 90 % X 9%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.252051 1,252.05 90 % X 9%
---------------------------
Initials Date
---------------------------
Prepared by:
---------------------------
Approved by:
---------------------------
18-Apr-00
11:52:48 AM
- ----------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction forTotal Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- ----------------------------------------------------
1,168.03 0.00 1,168.03 16.80%
1,252.05 0.00 1,252.05 14.40%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
DREYFUS INTERNATIONAL VALUE
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Dry1299X.XLS]D
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 0.941707 1,061.901 1998 0.941707 0.000 1,061.901 1.186966 1,260.44 90 % X 9%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.186966 1,186.97 90 % X 9%
----------------------------
Initials Date
----------------------------
Prepared by:
----------------------------
Approved by:
----------------------------
18-Apr-00
11:52:48 AM
- -------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- -------------------------------------------------------
1,260.44 0.00 1,260.44 26.04%
1,186.97 0.00 1,186.97 10.80%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
FEDERATED HIGH INCOME BOND II
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Fed1299X.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.366573 731.757 1998 1.366573 0.000 731.757 1.378642 1,008.83 90 % X 9%
1997 1.349419 741.060 1997 1.349419 0.000 741.060 1.378642 1,021.66 90 % X 9%
1996 1.202161 831.835 1996 1.202161 0.000 831.835 1.378642 1,146.80 90 % X 8%
1995 1.066579 937.577 1995 1.066579 0.000 937.577 1.378642 1,292.58 90 % X 7%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.378642 1,378.64 90 % X 5%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:55:15 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,008.83 0.00 1,008.83 0.88%
1,021.66 0.00 1,021.66 1.08%
1,146.80 0.00 1,146.80 4.67%
1,292.58 0.00 1,292.58 6.63%
1,378.64 0.00 1,378.64 7.25%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
FEDERATED INTERNATIONAL EQUITY II
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Fed1299X.XLS]B
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.471681 679.495 1998 1.471681 0.000 679.495 2.683147 1,823.18 90 % X 9%
1997 1.188469 841.419 1997 1.188469 0.000 841.419 2.683147 2,257.65 90 % X 9%
1996 1.094819 913.393 1996 1.094819 0.000 913.393 2.683147 2,450.77 90 % X 8%
1995 1.025080 975.534 1995 1.025080 0.000 975.534 2.683147 2,617.50 90 % X 7%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 2.683147 2,683.15 90 % X 5%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:55:15 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,823.18 0.00 1,823.18 82.32%
2,257.65 0.00 2,257.65 50.25%
2,450.77 0.00 2,450.77 34.82%
2,617.50 0.00 2,617.50 27.20%
2,683.15 0.00 2,683.15 24.01%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
FEDERATED UTILITY II
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Fed1299X.XLS]C
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.731943 577.386 1998 1.731943 0.000 577.386 1.736793 1,002.80 90 % X 9%
1997 1.541347 648.783 1997 1.541347 0.000 648.783 1.736793 1,126.80 90 % X 9%
1996 1.234309 810.170 1996 1.234309 0.000 810.170 1.736793 1,407.10 90 % X 8%
1995 1.122090 891.194 1995 1.122090 0.000 891.194 1.736793 1,547.82 90 % X 7%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.736793 1,736.79 90 % X 5%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:55:15 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,002.80 0.00 1,002.80 0.28%
1,126.80 0.00 1,126.80 6.15%
1,407.10 0.00 1,407.10 12.06%
1,547.82 0.00 1,547.82 11.54%
1,736.79 0.00 1,736.79 12.79%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
CST - GOVERNMENT SECURITIES
INDIVIDUAL AND GROUP - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
- ------------------------------------------------------------------------------------------------------------------------------------
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Gov1299X.XLS]A
- ------------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee Admin Fee Units Unit Value Value Calc Charge
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1.318099 758.668 1998 1.318099 0.000 758.668 1.267688 961.75 90 % X 9%
1997 1.248382 801.037 1997 1.248382 0.000 801.037 1.267688 1,015.46 90 % X 9%
1996 1.169361 855.168 1996 1.169361 0.000 855.168 1.267688 1,084.09 90 % X 8%
1995 1.154244 866.368 1995 1.154244 0.000 866.368 1.267688 1,098.28 90 % X 7%
1994 0.997441 1,002.566 1994 0.997441 0.000 1,002.566 1.267688 1,270.94 90 % X 5%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.267688 1,267.69 90 % X 3%
INITIALS DATE
--------------------------
Prepared By: 18-Apr-00
--------------------------
Approved By: 11:56 AM
- -----------------------------------------------------
- -----------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
For Surr Admin Admin Fee n
Charge Fee (ERV) P(1+T) = ERV
- -----------------------------------------------------
961.75 0.00 961.75 -3.83%
1,015.46 0.00 1,015.46 0.77%
1,084.09 0.00 1,084.09 2.73%
1,098.28 0.00 1,098.28 2.37%
1,270.94 0.00 1,270.94 4.91%
1,267.69 0.00 1,267.69 4.46%
Incep
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
INVESCO - HIGH YIELD FUND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Inv1299X.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 0.950601 1,051.966 1998 0.950601 0.000 1,051.966 1.023611 1,076.80 90 % X 9%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.023611 1,023.61 90 % X 9%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:58:13 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,076.80 0.00 1,076.80 7.68%
1,023.61 0.00 1,023.61 1.41%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
INVESCO - EQUITY INCOME
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Inv1299X.XLS]B
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.029287 971.546 1998 1.029287 0.000 971.546 1.165618 1,132.45 90 % X 9%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.165618 1,165.62 90 % X 9%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:58:13 AM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,132.45 0.00 1,132.45 13.25%
1,165.62 0.00 1,165.62 9.61%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
JANUS AGGRESSIVE GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Jan1299X.XLS]A
- -------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- -------------------------------------------------------------------------------------------------------------------------------
1998 1.982620 504.383 1998 1.982620 0.000 504.383 4.406952 2,222.79 90 % X 9%
1997 1.497524 667.769 1997 1.497524 0.000 667.769 4.406952 2,942.83 90 % X 9%
1996 1.347927 741.880 1996 1.347927 0.000 741.880 4.406952 3,269.43 90 % X 8%
1995 1.266394 789.644 1995 1.266394 0.000 789.644 4.406952 3,479.92 90 % X 7%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 4.406952 4,406.95 90 % X 5%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:59:30 AM
- ---------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- ---------------------------------------------------------
2,222.79 0.00 2,222.79 122.28%
2,942.83 0.00 2,942.83 71.55%
3,269.43 0.00 3,269.43 48.42%
3,479.92 0.00 3,479.92 36.58%
4,406.95 0.00 4,406.95 38.18%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
JANUS GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Jan1299X.XLS]B
- -------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- -------------------------------------------------------------------------------------------------------------------------------
1998 2.207852 452.929 1998 2.207852 0.000 452.929 3.134816 1,419.85 90 % X 9%
1997 1.650431 605.902 1997 1.650431 0.000 605.902 3.134816 1,899.39 90 % X 9%
1996 1.363534 733.388 1996 1.363534 0.000 733.388 3.134816 2,299.04 90 % X 8%
1995 1.167465 856.557 1995 1.167465 0.000 856.557 3.134816 2,685.15 90 % X 7%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 3.134816 3,134.82 90 % X 5%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:59:30 AM
- ---------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- ---------------------------------------------------------
1,419.85 0.00 1,419.85 41.99%
1,899.39 0.00 1,899.39 37.82%
2,299.04 0.00 2,299.04 31.98%
2,685.15 0.00 2,685.15 28.01%
3,134.82 0.00 3,134.82 28.29%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
JANUS WORLDWIDE GROWTH
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Jan1299X.XLS]C
- -------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- -------------------------------------------------------------------------------------------------------------------------------
1998 2.359887 423.749 1998 2.359887 0.000 423.749 3.826970 1,621.67 90 % X 9%
1997 1.856255 538.719 1997 1.856255 0.000 538.719 3.826970 2,061.66 90 % X 9%
1996 1.541029 648.917 1996 1.541029 0.000 648.917 3.826970 2,483.39 90 % X 8%
1995 1.211204 825.625 1995 1.211204 0.000 825.625 3.826970 3,159.64 90 % X 7%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 3.826970 3,826.97 90 % X 5%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
11:59:30 AM
- ---------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- ---------------------------------------------------------
1,621.67 0.00 1,621.67 62.17%
2,061.66 0.00 2,061.66 43.58%
2,483.39 0.00 2,483.39 35.42%
3,159.64 0.00 3,159.64 33.32%
3,826.97 0.00 3,826.97 34.00%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
LORD ABBETT - GROWTH AND INCOME
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Lab1299X.XLS]A
- ------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- ------------------------------------------------------------------------------------------------------------------------------
1998 1.004593 995.428 1998 1.004593 0.000 995.428 1.156495 1,151.21 90 % X 9%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.156495 1,156.50 90 % X 9%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
12:00:43 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,151.21 0.00 1,151.21 15.12%
1,156.50 0.00 1,156.50 9.09%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
LAZARD - EQUITY
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Laz1299X.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.055270 947.625 1998 1.055270 0.000 947.625 1.125543 1,066.59 90 % X 9%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.125543 1,125.54 90 % X 9%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
12:03:04 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,066.59 0.00 1,066.59 6.66%
1,125.54 0.00 1,125.54 7.33%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
LAZARD - SMALL
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Laz1299X.XLS]B
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 0.855373 1,169.081 1998 0.855373 0.000 1,169.081 0.886723 1,036.65 90 % X 9%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 0.886723 886.72 90 % X 9%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
12:03:04 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,036.65 0.00 1,036.65 3.67%
886.72 0.00 886.72 -6.94%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
MITCHELL HUTCHINS - GROWTH AND INCOME
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Mh1299X.XLS]A
- ------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- ------------------------------------------------------------------------------------------------------------------------------
1998 0.989814 1,010.291 1998 0.989814 0.000 1010.29 1.076908 1,087.99 90 % X 9%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1000.00 1.076908 1,076.91 90 % X 9%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
12:04:23 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,087.99 0.00 1,087.99 8.80%
1,076.91 0.00 1,076.91 4.53%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
NEUBERGER BERMAN - LIMITED MATURITY BOND FUND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Neu1299X.XLS]A
- ------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- ------------------------------------------------------------------------------------------------------------------------------
1998 1.073805 931.268 1998 1.073805 0.000 931.268 1.074523 1,000.67 90 % X 9%
1997 1.043140 958.644 1997 1.043140 0.000 958.644 1.074523 1,030.09 90 % X 9%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.074523 1,074.52 90 % X 8%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
12:06:27 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,000.67 0.00 1,000.67 0.07%
1,030.09 0.00 1,030.09 1.49%
1,074.52 0.00 1,074.52 2.73%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
NEUBERGER BERMAN - PARTNERS FUND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[Neu1299X.XLS]B
- ------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- ------------------------------------------------------------------------------------------------------------------------------
1998 1.274108 784.863 1998 1.274108 0.000 784.863 1.348993 1,058.77 90 % X 9%
1997 1.239881 806.529 1997 1.239881 0.000 806.529 1.348993 1,088.00 90 % X 9%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.348993 1,348.99 90 % X 8%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
12:06:27 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,058.77 0.00 1,058.77 5.88%
1,088.00 0.00 1,088.00 4.31%
1,348.99 0.00 1,348.99 11.86%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
CST - EQUITY
INDIVIDUAL AND GROUP - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
G:\accting\SEPARATE\GARCO\SEPACT2\SEC\[St1299X.XLS]A
- ---------------------------------------------------------------------------------------------------------------------------------
Unit Value Accum
Accum For Units
Units Year of Annual (Deducted) Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- ---------------------------------------------------------------------------------------------------------------------------------
1998 2.763812 361.819 1998 2.763812 0.000 361.819 4.068452 1,472.04 90 % X 9%
1997 2.424118 412.521 1997 2.424118 0.000 412.521 4.068452 1,678.32 90 % X 9%
1996 2.071274 482.795 1996 2.071274 0.000 482.795 4.068452 1,964.23 90 % X 8%
1995 1.448804 690.224 1995 1.448804 0.000 690.224 4.068452 2,808.14 90 % X 7%
1994 1.077853 927.770 1994 1.077853 0.000 927.770 4.068452 3,774.59 90 % X 5%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 4.068452 4,068.45 90 % X 3%
INITIALS DATE
---------------------------
Prepared By: 18-Apr-00
---------------------------
Approved By: 12:07 PM
---------------------------
- --------------------------------------------------------
Total Accum Average
Total Accum Value After Annual
Value After Full Deduction Total
Deduction Surrender For Return
For Surr Admin Admin Fee n
Charge Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,472.04 0.00 1,472.04 47.20%
1,678.32 0.00 1,678.32 29.55%
1,964.23 0.00 1,964.23 25.24%
2,808.14 0.00 2,808.14 29.45%
3,774.59 0.00 3,774.59 30.43%
4,068.45 0.00 4,068.45 29.45%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
STRONG - MID CAP GROWTH FUND II
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
C:\ELINK\FILING\[Strg1299X.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.611675 620.472 1998 1.611675 0.000 620.472 3.017741 1,872.42 90 % X 9%
1997 1.270148 787.310 1997 1.270148 0.000 787.310 3.017741 2,375.90 90 % X 9%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 3.017741 3,017.74 90 % X 8%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
03:30:29 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,872.42 0.00 1,872.42 87.24%
2,375.90 0.00 2,375.90 54.14%
3,017.74 0.00 3,017.74 51.21%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
STRONG - OPPORTUNITY FUND II
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/99
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
C:\ELINK\FILING\[Strg1299X.XLS]B
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.377011 726.211 1998 1.377011 0.000 726.211 1.831885 1,330.34 90 % X 9%
1997 1.229863 813.099 1997 1.229863 0.000 813.099 1.831885 1,489.50 90 % X 9%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.831885 1,831.89 90 % X 8%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
03:30:29 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,330.34 0.00 1,330.34 33.03%
1,489.50 0.00 1,489.50 22.05%
1,831.89 0.00 1,831.89 25.44%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
VAN ECK HARD ASSETS
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/1999
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
C:\ELINK\FILING\[Van1299X.XLS]A
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 0.828049 1,207.658 1998 0.828049 0.000 1,207.658 0.988034 1,193.21 90 % X 9%
1997 1.215736 822.547 1997 1.215736 0.000 822.547 0.988034 812.70 90 % X 9%
1996 1.253925 797.496 1996 1.253925 0.000 797.496 0.988034 787.95 90 % X 8%
1995 1.077158 928.369 1995 1.077158 0.000 928.369 0.988034 917.26 90 % X 7%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 0.988034 988.03 90 % X 5%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
03:30:54 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,193.21 0.00 1,193.21 19.32%
812.70 0.00 812.70 -9.85%
787.95 0.00 787.95 -7.64%
917.26 0.00 917.26 -2.14%
988.03 0.00 988.03 -0.26%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
VAN ECK WORLDWIDE BOND
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/1999
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
C:\ELINK\FILING\[Van1299X.XLS]B
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 1.155392 865.507 1998 1.155392 0.000 865.507 1.050195 908.95 90 % X 9%
1997 1.039146 962.329 1997 1.039146 0.000 962.329 1.050195 1,010.63 90 % X 9%
1996 1.029224 971.606 1996 1.029224 0.000 971.606 1.050195 1,020.38 90 % X 8%
1995 1.018153 982.171 1995 1.018153 0.000 982.171 1.050195 1,031.47 90 % X 7%
Incept 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.050195 1,050.20 90 % X 5%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
03:30:54 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
908.95 0.00 908.95 -9.11%
1,010.63 0.00 1,010.63 0.53%
1,020.38 0.00 1,020.38 0.67%
1,031.47 0.00 1,031.47 0.78%
1,050.20 0.00 1,050.20 1.07%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
VAN ECK WORLDWIDE EMERGING MARKETS
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/1999
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
C:\ELINK\FILING\[Van1299X.XLS]C
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated
Units Year of For Annual Units Deducted Total Total Surrender
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge
- --------------------------------------------------------------------------------------------------------------------------------
1998 0.642969 1,555.285 1998 0.642969 0.000 1,555.285 1.269899 1,975.05 90 % X 9%
1997 0.990151 1,009.947 1997 0.990151 0.000 1,009.947 1.269899 1,282.53 90 % X 9%
1996 1.13594 880.328 1996 1.13594 0.000 880.328 1.269899 1,117.93 90 % X 8%
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 1.269899 1,269.90 90 % X 7%
------------------------------
Initials Date
------------------------------
Prepared by:
------------------------------
Approved by:
------------------------------
18-Apr-00
03:30:54 PM
- --------------------------------------------------------
Total Accum Value after Average Annual
Value after Full Deduction for Total Return
Deduction for Surrender Admin Fee n
Surr Charge Admin Fee (ERV) P(1+T) = ERV
- --------------------------------------------------------
1,975.05 0.00 1,975.05 97.51%
1,282.53 0.00 1,282.53 13.25%
1,117.93 0.00 1,117.93 3.79%
1,269.90 0.00 1,269.90 6.73%
CONSECO VARIABLE INSURANCE COMPANY - ACCOUNT "E"
VAN ECK REAL ESTATE
INDIVIDUAL & GROUP PROSPECTUS - FUTURE RESERVE
AVERAGE ANNUAL TOTAL RETURN
12/31/1999
TO MEET COMPLIANCE REQUIREMENTS OF SEC RELEASE IC-16245
C:\ELINK\FILING\[Van1299X.XLS]D
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated Unit Value Accumulated Total Accum
Units Year of For Annual Units Deducted Total Total Surrender Value after
End of Unit Purchased Admin Admin Fee For Annual Accum 31-Dec-99 Accum Charge Surrender Deduction f
Qtr Value For $1,000 Fee $0.00 Admin Fee Units Unit Value Value Calc Charge Surr Charge
- ----------------------------------------------------------------------------------------------------------------------------------
1998 0.851446 1,174.473 1998 0.851446 0.000 1,174.473 0.822657 966.19 90 % X 9% 966.19
Incep 1.000000 1,000.000 N/A 0.000000 0.000 1,000.000 0.822657 822.66 90 % X 9% 822.66
---------------------------
Initials Date
---------------------------
Prepared by:
---------------------------
Approved by:
---------------------------
18-Apr-00
03:30:54 PM
- -----------------------------------------
Value after Average Annual
Full Deduction forTotal Return
orSurrender Admin Fee n
Admin Fee (ERV) P(1+T) = ERV
- -----------------------------------------
0.00 966.19 -3.38%
0.00 822.66 -11.03%
</TABLE>
