<PAGE>
As filed with the Securities and Exchange File No.
Commission, May 31, 1995 File No. 811-8582
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
________________________________________________________________________________
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
and
________________________________________________________________________________
Amendment To
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
________________________________________________________________________________
Variable Annuity Account I of Aetna Insurance Company of America
(Exact Name of Registrant)
Aetna Insurance Company of America
(Name of Depositor)
151 Farmington Avenue, RE4C, Hartford, Connecticut 06156
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (203) 273-7834
Susan E. Bryant, Counsel
Aetna Insurance Company of America
151 Farmington Avenue, RE4C, Hartford, Connecticut 06156
(Name and Address of Agent for Service)
________________________________________________________________________________
Approximate date of Proposed Public Offering: As soon as practicable after the
effectiveness of this Registration Statement.
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant has
registered an indefinite number of securities under the Securities Act of 1933.
Registrant did not file a Rule 24f-2 Notice for the fiscal year ended December
31, 1994 because no securities were sold pursuant to such registration during
the fiscal year.
The Registrant hereby amends this Registration Statement on such dates as may be
necessary to delay its effective date until the Registrant shall file a further
amendment which specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until the Registration Statement shall become effective on such
date as the Commission, acting pursuant to said Section 8(a), may determine.
<PAGE>
VARIABLE ANNUITY ACCOUNT I
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Form N-4
- --------
Item No. Part A (Prospectus) Location
- -------- ------------------- --------
<S> <C> <C>
1 Cover Page................................ Cover Page
2 Definitions............................... Definitions
3 Synopsis or Highlights.................... Prospectus Summary; Fee Table
4 Condensed Financial Information........... Condensed Financial Information
5 General Description of
Registrant, Depositor, and
Portfolio Companies....................... The Company; Variable Annuity Account I;
the Funds
6 Deductions................................ Charges and Deductions
7 General Description of
Variable Annuity Contracts................ Contract Rights; Miscellaneous
8 Annuity Period............................ Annuity Period
9 Death Benefit............................. Death Benefit
10 Purchases and Contract Value.............. Purchase;
Determining Contract Value
11 Redemptions............................... Contract Rights - Withdrawals; Right to
Cancel
12 Taxes..................................... Tax Status
13 Legal Proceedings......................... Miscellaneous - Legal Proceedings
14 Table of Contents of the
Statement of Additional
Information............................... Statement of Additional Information -
Table of Contents
</TABLE>
<TABLE>
<CAPTION>
Form N-4
- --------
Item No. Part B (Statement of Additional Location
- -------- ------------------------------- --------
Information)
-----------
<S> <C> <C>
15 Cover Page............................ Cover page
16 Table of Contents..................... Table of Contents
17 General Information and History....... General Information and History
18 Services.............................. General Information and History;
Independent Auditors
19 Purchase of Securities Being Offered.. Offering and Purchase of Contracts
20 Underwriters.......................... Offering and Purchase of Contracts
21 Calculation of Performance Data....... Performance Data; Average Annual Total
Return Quotations
22 Annuity Payments...................... Annuity Payments
23 Financial Statements.................. Financial Statements
</TABLE>
Part C (Other Information)
--------------------------
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C to this Registration Statement.
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
Service Unit, 151 Farmington Avenue, Hartford, Connecticut 06156 Telephone:
1-800-531-4547
VARIABLE ANNUITY ACCOUNT I
Prospectus Dated: , 1995
MARATHON PLUS/(SM)/
This Prospectus describes the Marathon Plus variable deferred annuity contract
("Contracts") issued by Aetna Insurance Company of America (the "Company"). The
Contracts allow individuals to accumulate values and elect payment of annuity
benefits on a fixed or a variable basis. Group Contracts are offered to certain
broker-dealers which have agreed to act as Distributors of the Contracts. (See
"Contract Purchase -- Distribution.") Individuals who have established accounts
with those broker-dealers are eligible to participate in the Contract.
Individual Contracts are offered only in those states where the group Contracts
are not authorized for sale.
The Contracts described in this Prospectus are (a) nonqualified deferred
annuity contracts, and (b) contracts which may be available for use under
Section 408(b) of the Internal Revenue Code of 1986, as amended (the "Code") as
Individual Retirement Annuities. See "Contract Purchase -- Purchase" and "Tax
Status."
The securities offered in this Prospectus are distributed through Aetna Life
Insurance and Annuity Company, an affiliate of the Company, as the Underwriter,
and by registered broker-dealers selected by it as Distributors. See "Contract
Purchase -- Distribution."
Purchase Payments received under the Contracts on behalf of persons
participating under group Contracts or individual Contract owners
(collectively, "Certificate Holders") will be allocated at the Certificate
Holder's direction to variable funding options or to a credited interest option
for accumulation of values for the Certificate Holder's Account. Amounts
allocated to the variable funding options will be deposited in Variable Annuity
Account I (the "Separate Account"), a separate account of the Company, for
investment in the variable funding options. The value of the Certificate
Holder's Account will vary to reflect the performance of the variable funding
options selected, and may be more or less than Purchase Payments made under the
Contract.
This Prospectus is intended to describe the Contract provisions relating to the
variable funding options (the "Funds") and the fees and expenses that may be
charged in connection with investment in the Separate Account. Information with
respect to the credited interest option, the Guaranteed Account, is included in
the Appendix to this Prospectus and in the prospectus for the Guaranteed
Account which should accompany this Prospectus. The Guaranteed Account is
offered only in those jurisdictions where it has been qualified for sale.
The Funds currently available through the Separate Account under the Contract
described in this Prospectus are as follows:
<TABLE>
<S> <C>
. Aetna Variable Fund . Fidelity Index 500 Portfolio
. Aetna Income Shares . Fidelity Growth Portfolio
. Aetna Variable Encore Fund . Fidelity Overseas Portfolio
. Aetna Investment Advisers Fund, Inc. . IMS -- Equity Growth and Income Fund
. Aetna Ascent Variable Portfolio . IMS -- Utility Fund
. Aetna Crossroads Variable Portfolio . IMS -- U.S. Government Bond Fund
. Aetna Legacy Variable Portfolio . IMS -- Corporate Bond Fund
. Alger American Balanced Portfolio . Janus Aspen Aggressive Growth Portfolio
. Alger American Income and Growth Portfolio . Janus Aspen Balanced Portfolio
. Alger American Growth Portfolio . Janus Aspen Flexible Income Portfolio
. Alger American MidCap Growth Portfolio . Janus Aspen Growth Portfolio
. Alger American Leveraged AllCap Portfolio . Janus Aspen Short-Term Bond Portfolio
. Alger American Small Capitalization Portfolio . Janus Aspen Worldwide Growth Portfolio
. Fidelity Asset Manager Portfolio . Lexington Emerging Markets Fund
. Fidelity Equity-Income Portfolio . Lexington Natural Resources Trust
. Fidelity Contrafund Portfolio . TCI International
. Fidelity High Income Portfolio . TCI Growth
. Fidelity Investment Grade Bond Portfolio . TCI Balanced
</TABLE>
The availability of the above Funds is subject to applicable regulatory
authorization. Not all Funds are available in all jurisdictions or under all
Contracts.
This Prospectus sets forth concisely the information about the Contracts and
the Separate Account that a prospective investor should know before investing.
Additional information about the Separate Account is contained in a Statement
of Additional Information ("SAI") dated , 1995, as supplemented from
time to time, which has been filed with the Securities and Exchange Commission
and is incorporated herein by reference. The Table of Contents for the SAI is
contained in this Prospectus. An SAI may be obtained without charge by calling
1-800-531-4547.
THIS PROSPECTUS MUST BE ACCOMPANIED BY THE CURRENT PROSPECTUSES FOR THE FUNDS
AND THE GUARANTEED ACCOUNT. ALL PROSPECTUSES SHOULD BE READ AND RETAINED FOR
FUTURE REFERENCE.
<PAGE>
THE SECURITIES OFFERED BY THIS PROSPECTUS HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE PROSPECTUSES. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON IS AUTHORIZED BY THE COMPANY TO GIVE INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THE PROSPECTUSES, IN CONNECTION
WITH THE OFFERS OF THE SECURITIES DESCRIBED IN THIS PROSPECTUS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY
NOT LAWFULLY BE MADE.
The Company has filed a registration statement (the "Registration Statement")
with the SEC under the Securities Act of 1933 relating to the Contracts offered
by this Prospectus. This Prospectus has been filed as a part of the
Registration Statement and does not contain all of the information set forth in
the Registration Statement and its exhibits. Reference is hereby made to such
Registration Statement, including exhibits, for further information relating to
the Company and the Contracts. The Registration Statement and its exhibits may
be inspected and copied at the public reference facilities of the SEC at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
GLOSSARY OF SPECIAL TERMS.................................................. 4
PROSPECTUS SUMMARY......................................................... 6
FEE TABLE.................................................................. 8
PERFORMANCE DATA........................................................... 12
THE COMPANY................................................................ 13
VARIABLE ANNUITY ACCOUNT I................................................. 13
THE FUNDS.................................................................. 13
Fund Investment Advisers.................................................. 17
Mixed and Shared Funding.................................................. 18
Fund Additions and Limitations............................................ 18
CONTRACT PURCHASE
Purchase.................................................................. 18
Purchase Payments......................................................... 18
Designations of Beneficiary and Annuitant................................. 19
Distribution.............................................................. 19
CERTIFICATE HOLDER'S ACCOUNT VALUES
Accumulation Units........................................................ 20
Net Investment Factor..................................................... 20
CONTRACT RIGHTS
Right to Cancel........................................................... 21
Rights Under the Contract and Account..................................... 21
Transfers Among Investment Options........................................ 21
Dollar Cost Averaging Program............................................. 22
Account Rebalancing Program............................................... 22
Withdrawals............................................................... 22
Reinstatement Privilege Following Withdrawal.............................. 23
CHARGES AND DEDUCTIONS
General................................................................... 24
Maintenance Fee........................................................... 24
Mortality and Expense Risk Charges........................................ 24
Administrative Expense Charge............................................. 24
Transfer Fees............................................................. 24
Deferred Sales Charge..................................................... 25
</TABLE>
<TABLE>
<CAPTION>
Page
<S> <C>
Fund Expenses............................................................. 26
Premium Tax............................................................... 26
Commissions and Distribution Expenses..................................... 26
ADDITIONAL WITHDRAWAL OPTIONS
General................................................................... 27
Estate Conservation Option................................................ 27
Systematic Withdrawal Option.............................................. 28
ANNUITY PERIOD
Annuity Period Elections.................................................. 28
Annuity Options........................................................... 29
DEATH BENEFIT
General................................................................... 31
Death Benefit Amount...................................................... 31
Nonqualified Flexible Premium Contract.................................... 32
IRA Rollover Contract..................................................... 34
TAX STATUS
Introduction.............................................................. 35
Taxation of the Company................................................... 35
Tax Status of the Contract................................................ 36
Taxation of Annuities..................................................... 37
IRA Rollover Contracts.................................................... 38
Withholding............................................................... 39
Possible Changes in Taxation.............................................. 39
Other Tax Consequences.................................................... 39
MISCELLANEOUS
Voting Rights............................................................. 39
Modification of the Contract.............................................. 40
Inquiries................................................................. 40
Telephone Transfers....................................................... 40
Transfer of Ownership; Assignment......................................... 41
Legal Proceedings......................................................... 41
Legal Matters............................................................. 41
STATEMENT OF ADDITIONAL INFORMATION -- TABLE OF CONTENTS................... 42
APPENDIX -- Guaranteed Account............................................. 43
</TABLE>
3
<PAGE>
GLOSSARY OF SPECIAL TERMS
As used in this Prospectus, the following terms have the meanings shown:
ACCUMULATION PERIOD: The period during which one or more Net Purchase Payments
applied to a Certificate Holder's Account are invested to fund future annuity
payments.
ACCUMULATION UNIT: A measure of the net investment results for each variable
investment option during the Accumulation Period. The Accumulation Units for
the applicable Funds are used to calculate the portion of the Certificate
Holder's Account attributable to the Separate Account during the Accumulation
Period.
ADJUSTED ACCOUNT VALUE: For any Valuation Period, the Certificate Holder's
Account Value plus or minus the Certificate Holder's aggregate Guaranteed
Account market value adjustment, if applied during that period.
ANNUITANT: The natural person on whose life the Annuity benefit under a
Contract is based.
ANNUITY: A series of payments for life, for a definite period or a combination
of the two.
ANNUITY DATE: The date on which Annuity payments commence under an Annuity
Option.
ANNUITY OPTIONS: Annuity payment methods available during the Annuity Period.
ANNUITY PERIOD: The period of time during which Annuity payments are made.
ANNUITY UNIT: A measure of the net investment results for each variable
investment option selected during the Annuity Period. Annuity Units are used to
calculate the amount of each variable Annuity payment.
BENEFICIARY: The person entitled to receive any death benefit under a Contract.
CERTIFICATE: The document issued to a Certificate Holder for a Certificate
Holder's Account established under a group Contract.
CERTIFICATE HOLDER (YOU, YOUR): A person who purchases or acquires an interest
under a group Contract or who purchases an individual Contract. A Certificate
Holder's spouse may have an interest in the same Certificate Holder's Account
as a Joint Certificate Holder. References to "Certificate Holders" in this
Prospectus mean both of the Certificate Holders on Joint Accounts. Aetna
reserves the right to limit ownership to natural persons.
CERTIFICATE HOLDER'S ACCOUNT: A record established for each Certificate Holder
to maintain values under a Contract.
CERTIFICATE HOLDER'S ACCOUNT VALUE: As of any Valuation Period, the dollar
value of all amounts accumulated in a Certificate Holder's Account, including
the value of the Accumulation Units, Guaranteed Account and amounts deposited
pursuant to the guaranteed death benefit.
CODE: Internal Revenue Code of 1986, as amended.
COMPANY: Aetna Insurance Company of America.
CONTRACTS: Group variable deferred annuity contracts offered as Nonqualified
Flexible Premium Contracts and Individual Retirement Annuity (IRA) Rollover
Contracts. Individual variable deferred annuity contracts are offered in
certain states.
DISTRIBUTOR(S): The registered broker-dealer(s) which have entered into selling
agreements with the Underwriter to distribute interests in the Contracts. The
Underwriter may also serve as a Distributor.
4
<PAGE>
EFFECTIVE DATE: The date on which a Contract or Certificate is issued to a
Certificate Holder.
FUNDS: The open-end management investment companies offered as variable funding
options for the investment of assets of the Separate Account under the
Contracts.
GENERAL ACCOUNT: The account into which all Company assets not held in a
separate account are deposited. The General Account is subject to all
liabilities of the Company.
GROUP CONTRACT HOLDER: The entity to which a group Contract is issued.
HOME OFFICE: The principal executive offices of the Company, located at 151
Farmington Avenue, Hartford, Connecticut 06156.
INDIVIDUAL CONTRACT HOLDER: A person who has purchased an individual variable
annuity Contract (also referred to as "Certificate Holder"). A Contract
Holder's spouse may have an interest in the same Contract Holder's Account as a
Joint Contract Holder. Aetna reserves the right to limit ownership to natural
persons.
INDIVIDUAL RETIREMENT ANNUITY (IRA) ROLLOVER CONTRACT: An individual or group
variable deferred annuity Contract established to accept Purchase Payments
consisting of rollover amounts previously accumulated under an Individual
Retirement Account or Annuity or a plan qualified under Code Section 401 or
403. These Contracts are intended to qualify under Code Section 408(b).
MARKET VALUE ADJUSTMENT: An amount deducted or added to amounts withdrawn early
from the Guaranteed Account to reflect changes in the market value of the
investment since the date of deposit. See the Appendix and the prospectus for
the Guaranteed Account for a discussion of how the market value adjustment is
actually calculated.
NET PURCHASE PAYMENT: The Purchase Payment less premium taxes, if applicable.
NONQUALIFIED FLEXIBLE PREMIUM CONTRACT: An individual or group variable
deferred annuity Contract established to accept one or more Purchase Payments
to supplement an individual's retirement income, or to provide an alternative
investment option under an Individual Retirement Account qualified under Code
Section 408(a).
PURCHASE PAYMENT: The gross payment made to a Certificate Holder's Account
pursuant to the terms of a Contract. The Company reserves the right to refuse
to accept any Purchase Payment at any time for any reason.
SEC: Securities and Exchange Commission.
SEPARATE ACCOUNT: Variable Annuity Account I, an account whose assets are
segregated from other assets of the Company. The Separate Account holds shares
of the Funds acquired as variable funding options under the Contracts. The
Company holds title to the assets held in the Separate Account.
SURRENDER VALUE: The amount payable upon the withdrawal of all or any portion
of a Certificate Holder's Account Value.
UNDERWRITER: The registered broker-dealer which contracts with other registered
broker-dealers on behalf of the Separate Account to offer and sell the
Contracts. Aetna Life Insurance and Annuity Company will serve as Underwriter
for the Contracts.
VALUATION PERIOD: The period of time for which a Fund determines its net asset
value, usually from 4:15 p.m. Eastern time each day the New York Exchange is
open for trading until 4:15 p.m. the next such business day.
VALUATION RESERVE: A reserve established pursuant to the insurance laws of the
State of Connecticut to measure voting rights during the Annuity Period. It
also measures the value of a commutation right under the "Payments of a Stated
Period of Time" nonlifetime Annuity option when elected on a variable basis.
VARIABLE ANNUITY CONTRACT: An annuity contract providing for the accumulation
of values and for Annuity payment, which vary in amount based on investment
results.
5
<PAGE>
PROSPECTUS SUMMARY
CONTRACTS OFFERED
The Contracts described in this Prospectus are group variable deferred annuity
Contracts and, where required by state law, individual variable deferred
annuity Contracts. The Nonqualified Flexible Premium Contract is designed to
accept one or more Purchase Payments. The Individual Retirement Annuity
Rollover Contract is designed to accept rollovers from Individual Retirement
Accounts or Annuities or plans qualified under Code Sections 401 or 403. For
the Nonqualified Flexible Premium Contract, the minimum initial Purchase
Payment amount is $5,000. Additional Purchase Payments of at least $2,500 may
be made to a Nonqualified Flexible Premium Contract. The minimum initial
Purchase Payment amount for the Individual Retirement Annuity Rollover
Contract is $10,000. Subsequent Purchase Payments will be accepted if they are
rollovers of amounts previously accumulated under an Individual Retirement
Annuity or Account or a plan qualified under Code Section 401 or 403. (See
"Contract Purchase -- Purchase.")
Under the group Contract, individuals may be enrolled as Certificate Holders
and the Company will maintain a Certificate Holder's Account for each
Certificate Holder. Under an individual Contract, the owner will be an
individual. (In either case, the individual is referred to as "Certificate
Holder" or "you.") Under the Contract, Certificate Holders have certain
rights. (See "Contract Rights.")
Joint Certificate Holders are allowed, except for Contracts acquired by
individuals for purposes of establishing an Individual Retirement Annuity
under Sections 408(a) or 408(b) of the Code. A Joint Certificate Holder must
be the spouse of the other Joint Certificate Holder.
We offer the following Contracts as described below:
1. Nonqualified Flexible Premium Contracts and IRA Rollover Contracts to
NASD Firms.
2. IRA Rollover Contracts to employers who sponsor Individual Retirement
Annuity Plans for their employees.
3. Nonqualified Flexible Premium Contracts to custodians or trustees of
Code Section 408(a) Individual Retirement Accounts, to employers who
offer deferred annuities to their employees and to entities which make
contributions to annuities for their customers.
4. Nonqualified Flexible Premium Contracts and IRA Rollover Contracts to
individuals when required in certain states.
A group Contract is issued to the Group Contract Holder once we receive a
completed master application form. A Certificate Holder establishes an account
under a group Contract by completing an enrollment form and any other required
forms. Certificate Holder enrollment form(s), along with the Purchase Payment,
are submitted to the Company by the Distributor. Upon acceptance, a
Certificate is issued for each Certificate Holder under the group Contract. In
those states where an individual Contract is offered, an individual applies
for a Contract by completing an individual Contract application and submitting
it with the Purchase Payment to the Distributor. "Contract Purchase" in this
Prospectus describes the process of establishing a Certificate Holder's
Account.
WITHDRAWAL
You may redeem all or a portion of your Certificate Holder's Account Value
during the Accumulation Period by completing the Company's withdrawal request
form. Amounts withdrawn may be subject to a deferred sales charge or
maintenance fee. (See "Charges and Deductions.") The maximum deferred sales
charge that could be assessed on a full or partial withdrawal is 7% of each
Net Purchase Payment withdrawn. Amounts withdrawn from the Guaranteed Account
may be subject to a Market Value Adjustment. (See the Appendix.) A 10% federal
penalty tax may also be imposed on the taxable portion paid to you upon
withdrawal and certain amounts may be withheld for tax purposes. (See "Tax
Status -- Taxation of Annuities.")
6
<PAGE>
GUARANTEED DEATH BENEFIT
These Contracts contain a guaranteed death benefit feature. Upon the death of
the Annuitant, under certain circumstances, the Certificate Holder's Account
Value may be adjusted upward. (See "Death Benefit.")
CONTRACT CHARGES
Certain charges are associated with these Contracts; for example, mortality
and expense risk charges, administrative expense charges, transfer fees, fund
expenses, maintenance fees and premium taxes. See "Charges and Deductions" for
a complete explanation of these charges.
SEPARATE ACCOUNT
Variable Annuity Account I (the "Separate Account") is a separate account
established by the Company and is registered as a unit investment trust under
the Investment Company Act of 1940 ("1940 Act"). Assets of the Separate
Account attributable to the Contract are invested in shares of one or more of
the Funds. (See "Variable Annuity Account I" and "The Funds" in this
Prospectus.)
During each calendar year, you may change the allocation of future Net
Purchase Payments and/or transfer account values among the funding options
available under the Contract. However, you may not make allocations or
transfers to new funding options if the total number of funding options you
have selected would exceed 18 since the time that you acquired an interest in
the Contract. Each variable funding option and each guaranteed term of the
Guaranteed Account selected counts as one option, even if you no longer have
amounts allocated to that option. See "Transfers Among Investment Options."
FREE LOOK PROVISION
The Certificate Holder may cancel the Certificate Holder's Account no later
than ten days after receiving the Contract or Certificate, whichever is
applicable, (or as otherwise allowed by state law) by returning it to us or to
the Distributor from whom it was purchased along with a written notice of
cancellation. Unless applicable state law requires otherwise, the amount the
Certificate Holder of a Nonqualified Flexible Premium Contract will receive
upon cancellation under this provision may reflect the investment performance
of the Purchase Payments deposited in the Separate Account while invested. In
certain cases, this may be less than the amount of the Purchase Payments. For
IRA Rollover Contracts, we will refund the Purchase Payment. (See "Contract
Rights -- Right to Cancel.")
7
<PAGE>
FEE TABLE
(Based on year ended December 31, 1994)
THE PURPOSE OF THE FEE TABLE IS TO ASSIST CONTRACT HOLDERS IN UNDERSTANDING
THE VARIOUS COSTS AND EXPENSES THAT WILL BE BORNE, DIRECTLY OR INDIRECTLY,
UNDER THE CONTRACT. THE INFORMATION LISTED REFLECTS THE CHARGES DEDUCTED UNDER
THE CONTRACT, AS WELL AS THE FEES AND EXPENSES DEDUCTED FROM THE FUNDS.
ADDITIONAL INFORMATION REGARDING THE CHARGES AND DEDUCTIONS ASSESSED UNDER THE
CONTRACT CAN BE FOUND UNDER "CHARGES AND DEDUCTIONS" IN THIS PROSPECTUS.
CHARGES AND EXPENSES SHOWN DO NOT TAKE INTO ACCOUNT PREMIUM TAXES THAT MAY BE
APPLICABLE.
TRANSACTION EXPENSES
DEFERRED SALES CHARGE (as a percentage of each Net Purchase Payment
deposited)/(1)/
<TABLE>
<CAPTION>
LENGTH OF TIME SINCE NET PURCHASE PAYMENT MADE DEDUCTION
---------------------------------------------- ---------
<S> <C>
Less than 2 years 7%
2 years or more but less than 4 years 6%
4 years or more but less than 5 years 5%
5 years or more but less than 6 years 4%
6 years or more but less than 7 years 3%
7 years or more 0%
Annual Maintenance Fee/(2)/ $30.00
Transfers/(3)/ $ 0.00
</TABLE>
SEPARATE ACCOUNT ANNUAL EXPENSES
Daily deductions are made from the Current Value of an Account or individual
Contract held in the variable options. The deduction is the daily equivalent
of the annual effective percentage shown in the following chart:
<TABLE>
<S> <C>
During the Accumulation Period:
Mortality and Expense Risk Fees 1.25%
Administrative Expense Charge 0.15%
-----
Total Separate Account Annual Expenses 1.40%
=====
During the Annuity Period:
Mortality and Expense Risk Fees 1.25%
Administrative Expense Charge(/4/) 0.00%
-----
Total Separate Account Annual Expenses 1.25%
=====
</TABLE>
/(1)/Referred to in the Contracts as a "surrender fee." See "Deferred Sales
Charge" for a description of the deferred sales charge and instances in
which this charge may be waived.
/(2)/The maintenance fee is waived when the Current Value of the Account or
individual Contract is $50,000 or more on the date the maintenance fee is
due. See "Maintenance Fee" in this prospectus.
/(3)/The Company currently allows an unlimited number of transfers without
charge. However, we reserve the right to impose a fee of $10 for each
transfer in excess of 12 per year. See "Transfers Among Investment
Options" in this Prospectus.
/(4)/The Company does not currently impose an Administrative Expense Charge
during the Annuity Period. We do, however, reserve the right to deduct a
daily charge of not more than 0.25% per year from amounts held under the
variable Annuity options.
8
<PAGE>
MUTUAL FUND ANNUAL EXPENSES
(As a percentage of average net assets, except where otherwise noted, based on
figures for the year ended December 31, 1994.)
<TABLE>
<CAPTION>
INVESTMENT OTHER
ADVISORY FEES/(1)/ EXPENSES/(2)/
(AFTER EXPENSE (AFTER EXPENSE TOTAL FUND
REIMBURSEMENT) REIMBURSEMENT) ANNUAL EXPENSES
------------------ -------------- ---------------
<S> <C> <C> <C>
Aetna Variable Fund 0.25% 0.05% 0.30%
Aetna Income Shares 0.25% 0.08% 0.33%
Aetna Variable Encore Fund 0.25% 0.07% 0.32%
Aetna Investment Advisers
Fund, Inc. 0.25% 0.07% 0.32%
Aetna Ascent Variable Port-
folio/(3)/ 0.50% 0.20% 0.70%
Aetna Crossroads Variable
Portfolio/(3)/ 0.50% 0.20% 0.70%
Aetna Legacy Variable Port-
folio/(3)/ 0.50% 0.20% 0.70%
Alger Balanced Portfolio 0.75% 0.33% 1.08%
Alger American Income and
Growth Portfolio 0.63% 0.12% 0.75%
Alger American MidCap Growth
Portfolio 0.80% 0.17% 0.97%
Alger American Leveraged
AllCap Portfolio/(3)//(4)/ 0.85% 0.94% 1.79%
Alger American Small Cap
Portfolio 0.85% 0.11% 0.96%
Alger American Growth Port-
folio 0.75% 0.11% 0.86%
Fidelity High Income Portfo-
lio 0.61% 0.10% 0.71%
Fidelity Equity-Income Port-
folio 0.52% 0.06% 0.58%
Fidelity Growth Portfolio 0.62% 0.07% 0.69%
Fidelity Overseas Portfolio 0.77% 0.14% 0.91%
Fidelity Investment Grade
Bond Portfolio 0.46% 0.21% 0.67%
Fidelity Asset Manager Port-
folio 0.72% 0.08% 0.80%
Fidelity Index 500 Portfolio 0.28% 0.00% 0.28%
Fidelity Contrafund Portfo-
lio/(3)/ 0.62% 0.27% 0.89%
IMS Equity Growth and Income
Fund/(5)/ 0.00% 0.85% 0.85%
IMS Utility Fund/(5)/ 0.00% 0.85% 0.85%
IMS U.S. Government Bond
Fund/(5)/ 0.00% 0.80% 0.80%
IMS Corporate Bond Fund/(5)/ 0.00% 0.80% 0.80%
Janus Aggressive Growth
Portfolio/(6)/ 0.77% 0.28% 1.05%
Janus Balanced Portfo-
lio/(6)/ 0.83% 0.74% 1.57%
Janus Flexible Income Port-
folio/(6)/ 0.30% 0.70% 1.00%
Janus Growth Portfolio/(6)/ 0.66% 0.22% 0.88%
Janus Short-Term Bond Port-
folio/(6)/ 0.00% 0.65% 0.65%
Janus Worldwide Growth Port-
folio/(6)/ 0.69% 0.49% 1.18%
Lexington Emerging Markets
Fund/(7)/ 0.85% 0.45% 1.30%
Lexington Natural Resources
Trust 1.00% 0.55% 1.55%
TCI Growth/(8)/ 1.00% 0.00% 1.00%
TCI Balanced Portfolio/(8)/ 1.00% 0.00% 1.00%
TCI International Portfo-
lio/(8)/ 1.50% 0.00% 1.50%
</TABLE>
- --------
/(1)/Certain of the unaffiliated Fund managers or their affiliates reimburse
the Company for administrative costs incurred in connection with
administering the Funds as variable funding options. These reimbursements
are generally based on a percentage of assets under management and may be
paid out of the managers' advisory fees. These amounts are not charged to
the Funds or Contract Holders, but are paid from other assets of the Fund
Managers or their affiliates.
/(2)/A mutual fund's "Other Expenses" are operating costs of the Fund. The
expenses are factored into the Fund's net asset value and are not deducted
from the Contract Value.
9
<PAGE>
/(3)/These funds have only limited operating history and therefore the expenses
are estimated for the current fiscal year.
/(4)/This figure does not include 0.75% that is attributable to Interest
Expense.
/(5)/The Adviser to these Funds has agreed to waive all or a portion of its
advisory fee for the Funds so that total annual expenses for the IMS
Equity Growth and Income Fund and the IMS Utility Fund would not exceed
0.85% of average net assets, and so that total annual expenses for the IMS
U.S. Government Bond Fund and the IMS Corporate Bond Fund would not exceed
0.80% of average net assets. Without this reimbursement, the maximum
advisory fees and the maximum total annual expenses for the Funds,
respectively, are estimated to be 0.75% and 1.23% for the IMS Equity
Growth and Income Fund, 0.75% and 1.20% for the IMS Utility Fund, 0.60%
and 1.11% for the IMS U.S. Government Fund and 0.60% and 1.11% for the IMS
Corporate Bond Fund. The Adviser can terminate this voluntary
reimbursement of expenses at any time at its sole discretion.
/(6)/The expense figures shown are net of certain expense waivers from Janus
Capital Corporation. Without such waivers, the Investment Advisory Fees,
Other Expenses and Total Mutual Fund Annual Expenses for the Portfolios
for the fiscal year ended December 31, 1994 would have been: 1.00%, 0.28%
and 1.28%, respectively, for Janus Aspen Aggressive Growth Portfolio;
1.00%, 0.74% and 1.74%, respectively, for Janus Aspen Balanced Portfolio;
0.65%, 0.70% and 1.35%, respectively, for Janus Aspen Flexible Income
Portfolio; 1.00%, 0.22% and 1.22%, respectively, for Janus Aspen Growth
Portfolio; 0.65%, 0.75% and 1.40%, respectively, for Janus Aspen Short-
Term Bond Portfolio; and 1.00%, 0.49% and 1.49%, respectively, for Janus
Aspen Worldwide Growth Portfolio.
/(7)/The Fund's investment adviser has agreed to reimburse the Fund so that the
total expenses of the Fund (excluding taxes, brokerage, and extraordinary
expenses) will not exceed an annual rate of 1.30% of the Fund's average
net assets. Without this agreement, it is estimated that the Fund's
Investment Advisory Fee, Total Other Expenses and Total Mutual Fund Annual
Expenses would have been 0.85%, 2.52% and 3.37%, respectively.
/(8)/The Portfolios' investment adviser pays all expenses of the Portfolios
except brokerage commissions, taxes, interest fees and expenses of the
non-interested directors (including counsel fees) and extraordinary
expenses.
10
<PAGE>
HYPOTHETICAL ILLUSTRATION (EXAMPLE)
THIS EXAMPLE IS PURELY HYPOTHETICAL. IT SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES OR EXPECTED RETURN. ACTUAL EXPENSES
AND/OR RETURN MAY BE MORE OR LESS THAN THOSE SHOWN BELOW.
Assuming a 5% annual return on assets, you would have paid the following
expenses on a $1,000 investment:(/1/)
<TABLE>
<CAPTION>
If no
withdrawal is
For a complete made, or if
withdrawal at the
the end of the Certificate
applicable Holder
time period: annuitizes*:
1 year 3 years 1 year 3 years
------ ------- ------ -------
<S> <C> <C> <C> <C>
Aetna Variable Fund $81 $110 $18 $56
Aetna Income Shares $81 $111 $18 $57
Aetna Variable Encore Fund $81 $110 $18 $57
Aetna Investment Advisers Fund, Inc. $81 $110 $18 $57
Aetna Ascent Variable Portfolio $85 $122 $22 $69
Aetna Crossroads Variable Portfolio $85 $122 $22 $69
Aetna Legacy Variable Portfolio $85 $122 $22 $69
Alger American Balanced Portfolio $89 $133 $26 $80
Alger American Income and Growth Portfolio $86 $124 $23 $70
Alger American MidCap Growth Portfolio $88 $130 $25 $77
Alger American Leveraged AllCap Portfolio $96 $155 $33 $101
Alger American Small Cap Portfolio $88 $130 $25 $76
Alger American Growth Portfolio $87 $127 $24 $73
Fidelity Equity-Income Portfolio $84 $118 $21 $65
Fidelity Growth Portfolio $85 $122 $22 $68
Fidelity Overseas Portfolio $87 $128 $24 $75
Fidelity Asset Manager Portfolio $86 $125 $23 $72
Fidelity High Income Portfolio $85 $122 $22 $69
Fidelity Investment Grade Bond Portfolio $85 $121 $22 $68
Fidelity Index 500 Portfolio $81 $109 $18 $56
Fidelity Contrafund Portfolio $87 $128 $24 $74
IMS Equity Growth and Income Fund $87 $127 $24 $73
IMS Utility Fund $87 $127 $24 $73
IMS U.S. Government Bond Fund $86 $125 $23 $72
IMS Corporate Bond Fund $86 $125 $23 $72
Janus Aspen Aggressive Growth Portfolio $89 $133 $26 $79
Janus Aspen Balanced Portfolio $94 $148 $31 $95
Janus Aspen Flexible Income Portfolio $88 $131 $25 $78
Janus Aspen Growth Portfolio $87 $127 $24 $74
Janus Aspen Short-Term Bond Portfolio $85 $120 $22 $67
Janus Aspen Worldwide Growth Portfolio $90 $137 $27 $83
Lexington Emerging Markets Fund $91 $140 $28 $87
Lexington Natural Resources Trust $94 $148 $31 $94
TCI Growth $88 $131 $25 $78
TCI Balanced $88 $131 $25 $78
TCI International $93 $146 $30 $92
</TABLE>
/(1)/The illustration reflects the $30.00 maintenance fee as an annual charge
of 0.090% of assets.
* If a nonlifetime variable annuity option is selected, and a lump sum
settlement is requested within three years after annuity payments start,
the lump sum payment will be treated as a withdrawal during the
Accumulation Period and will be subject to any deferred sales charge that
would then apply.
11
<PAGE>
PERFORMANCE DATA
From time to time, the Company may advertise different types of historical
performance for the variable funding options of the Separate Account available
under the Contracts described in this Prospectus. The Company may advertise the
"standardized average annual total returns" of the variable funding options,
calculated in a manner prescribed by the SEC, as well as the "non-standardized
return," as described below.
"Standardized average annual total returns" are computed according to a formula
in which a hypothetical investment of $1,000 is applied to the variable funding
options under the Contract and then related to the ending redeemable values
over the most recent one, five and ten-year periods (or since inception if less
than 10 years). Standardized return will be determined by dividing the increase
or decrease in the value of an Accumulation Unit by the Accumulation Unit Value
at the beginning of the period. Standardized returns will reflect the deduction
of all recurring charges during each period (e.g., mortality and expense risk
charges, the annual maintenance fee, the administrative expense charge and any
applicable deferred sales charge). These charges will be deducted on a pro rata
basis in the case of fractional periods. The maintenance fee will be converted
to a percentage of assets based on the estimated average account size under the
Contract.
"Non-standardized return" will be calculated in a similar manner, except that
non-standardized figures will not reflect the deduction of any applicable
deferred sales charge (which would decrease the level of performance shown if
reflected in these calculations). The non-standardized figures may also include
a three-year period.
For Funds that were in existence prior to the date that the Fund became
available under the Contract, the performance data will show the investment
performance that such Fund would have achieved (reduced by the applicable
charges) had it been available under the Contract for the period quoted.
The Company may distribute sales literature that compares the percentage change
in Accumulation Unit values for any of the Funds to established market indexes
such as the Standard & Poor's 500 Stock Index and the Dow Jones Industrial
Averages or to the change in values of other management investment companies
that have investment objectives similar to the Fund being compared.
The Company may publish in advertisements and reports to Certificate Holders
the ratings and other information assigned to us by one or more independent
rating organizations such as A.M. Best Company, Duff & Phelps, Standard &
Poor's Corporation and Moody's Investors Service, Inc. The purpose of the
ratings is to reflect the Company's financial strength and/or claims-paying
ability. We may also quote ranking services, such as Morningstar's Variable
Annuity/Life Performance Report, and Lipper's Variable Insurance Products
Performance Analysis Service (VIPPAS), which rank variable annuity or life
subaccounts or their underlying funds by performance and/or investment
objective. From time to time, we will quote articles from newspapers and
magazines or other publications or reports including, but not limited to, The
Wall Street Journal, Money magazine, USA Today and The VARDS Report.
12
<PAGE>
THE COMPANY
Aetna Insurance Company of America, the depositor for Variable Annuity Account
I, is a stock life insurance company organized in 1990 under the insurance laws
of the State of Connecticut and is a wholly owned subsidiary of Aetna Life
Insurance and Annuity Company ("ALIAC"). ALIAC is a wholly owned subsidiary of
Aetna Life and Casualty Company and was organized in 1976 under the insurance
laws of the State of Connecticut. Between 1990 and December 31, 1994, all of
the Company's income and expense was related to investment activity on its own
behalf. Together, the Aetna companies constitute one of the nation's largest
diversified financial services organizations. The Company's Home Office is
located at 151 Farmington Avenue, Hartford, Connecticut 06156.
VARIABLE ANNUITY ACCOUNT I
Variable Annuity Account I is a separate account established by the Company in
1994 under the insurance laws of the State of Connecticut. The Separate Account
was formed for the purpose of segregating assets attributable to the variable
portions of variable annuity contracts, including the Contracts, from our other
assets. The Separate Account is registered as a unit investment trust under the
1940 Act, and meets the definition of "separate account" under the federal
securities laws.
Although the Company holds title to the assets of the Separate Account, such
assets are not chargeable with liabilities arising out of any other business
which the Company may conduct. Income, gains or losses of the Separate Account,
realized or unrealized, are credited to or charged against the assets of the
Separate Account without regard to other income, gains or losses of the
Company. All obligations of the Company arising under the Contracts are general
corporate obligations of the Company.
THE FUNDS
Assets of the Separate Account attributable to the Contracts may be invested in
shares of one or more of the following management investment companies you
select. Except as noted below, all of the Funds are diversified as defined in
the Investment Company Act of 1940. The availability of the Funds listed below
is subject to applicable regulatory authorization. Not all Funds are available
in all jurisdictions or under all Contracts.
. AETNA VARIABLE FUND seeks to maximize total return through investments
in a diversified portfolio of common stocks and securities convertible
into common stocks.
. AETNA INCOME SHARES seeks to maximize total return, consistent with
reasonable risk, through investments in a diversified portfolio
consisting primarily of debt securities.
. AETNA VARIABLE ENCORE FUND seeks to provide high current return,
consistent with preservation of capital and liquidity, through
investment in high-quality money market instruments. An investment in
the Fund is neither insured nor guaranteed by the U.S. Government.
. AETNA INVESTMENT ADVISERS FUND, INC. seeks to maximize investment return
consistent with reasonable safety of principal by investing in one or
more of the following asset classes: stocks, bonds and cash equivalents
based on the Company's judgment of which of those sectors or mix thereof
offers the best investment prospects.
. AETNA GENERATION PORTFOLIOS, INC. -- AETNA ASCENT VARIABLE PORTFOLIO
seeks to provide capital appreciation by allocating its investments
among equities and fixed income securities. Aetna Ascent is managed for
investors who generally have an investment horizon exceeding 15 years,
and who have a high level of risk tolerance. See the Fund's prospectus
for a discussion of the risks involved.
13
<PAGE>
. AETNA GENERATION PORTFOLIOS, INC. -- AETNA CROSSROADS VARIABLE PORTFOLIO
seeks to provide total return (i.e., income and capital appreciation,
both realized and unrealized) by allocating its investments among
equities and fixed income securities. Aetna Crossroads is managed for
investors who generally have an investment horizon exceeding 10 years
and who have a moderate level of risk tolerance.
. AETNA GENERATION PORTFOLIOS, INC. -- AETNA LEGACY VARIABLE PORTFOLIO
seeks to provide total return consistent with preservation of capital by
allocating its investments among equities and fixed income securities.
Aetna Legacy is managed for investors who generally have an investment
horizon exceeding five years and who have a low level of risk tolerance.
. ALGER AMERICAN BALANCED PORTFOLIO seeks current income and long-term
capital appreciation by investing in common stocks and fixed income
securities, with emphasis on income-producing securities which appear to
have some potential for capital appreciation.
. ALGER AMERICAN INCOME AND GROWTH PORTFOLIO seeks a high level of
dividend income to the extent consistent with prudent investment
management by investing primarily in dividend paying equity securities.
Capital appreciation is a secondary objective of the Portfolio.
. ALGER AMERICAN GROWTH PORTFOLIO seeks long-term capital appreciation by
investing in a diversified, actively managed portfolio of equity
securities, primarily of companies with total market capitalization --
present market value per share multiplied by the total number of shares
outstanding -- of $1 billion or greater. Income is a consideration in the
selection of investments but is not an investment objective.
. ALGER AMERICAN MIDCAP GROWTH PORTFOLIO seeks long-term capital
appreciation by investing in a diversified, actively managed portfolio of
equity securities, primarily of companies with total market
capitalization between $750 million and $3.5 billion. Income is a
consideration in the selection of investments but is not an investment
objective of the Portfolio.
. ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO seeks long-term capital
appreciation by investing in a diversified, actively managed portfolio of
equity securities. Income is a consideration in the selection of
investments but is not an investment objective of the Portfolio. The
Portfolio may engage in leveraging (up to 33 1/3% of its assets) and
options and futures transactions, which are deemed to be speculative and
which may cause the Portfolio's net asset value to fluctuate.
. ALGER AMERICAN SMALL CAP PORTFOLIO seeks long-term capital appreciation
by investing in a diversified, actively managed portfolio of equity
securities, primarily of companies with total market capitalization of
less than $1 billion. Small capitalization stocks offer great potential
for growth but there are additional market and business risks associated
with them. (See the Portfolio's prospectus for a discussion of these
risks.)
. FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND -- EQUITY-INCOME
PORTFOLIO seeks reasonable income by investing primarily in income-
producing equity securities. In choosing these securities, the Fund will
also consider the potential for capital appreciation.
. FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND -- GROWTH
PORTFOLIO seeks to achieve capital appreciation by investing primarily in
common stock, although the Fund is not limited to any one type of
security.
. FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND -- HIGH INCOME
PORTFOLIO seeks to obtain a high level of current income by investing
primarily in high-yielding, lower-rated, fixed income securities, while
also considering growth of capital. Lower-rated corporate debt
obligations are commonly known as "junk bonds" or "high yield, high risk
bonds" and involve significant degree of risk (see the Fund's prospectus
for a discussion of the risk factors involved in investing in lower-rate
corporate debt obligations).
. FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND -- OVERSEAS
PORTFOLIO seeks long-term growth of capital primarily through investments
in foreign securities (at least 65% from at
14
<PAGE>
least three countries outside of North America). International investments
such as these involve greater risks than U.S. investments.
. FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND II -- ASSET
MANAGER PORTFOLIO seeks high total return with reduced risk over the
long-term by allocating its assets among stocks, bonds and short-term
fixed-income instruments.
. FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND II -- CONTRAFUND
PORTFOLIO seeks maximum total return over the long term by investing its
assets mainly in equity securities of companies that are under valued or
out-of-favor.
. FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND II -- INDEX 500
PORTFOLIO seeks to provide investment results that correspond to the
total return of common stocks publicly traded in the United States by
duplicating the composition and total return of the Standard & Poor's 500
Composite Stock Price Index.
. FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND II -- INVESTMENT
GRADE BOND PORTFOLIO seeks as high a level of current income as is
consistent with the preservation of capital by investing in a broad range
of investment-grade fixed-income securities.
. INSURANCE MANAGEMENT SERIES -- EQUITY GROWTH AND INCOME FUND seeks to
achieve long-term growth of capital and to provide income. The IMS Equity
Growth and Income Fund pursues its investment objectives by investing,
under normal circumstances, at least 65% of its total assets in common
stock of "blue-chip" companies. "Blue-chip" companies generally are top-
quality, established growth companies which, in the opinion of the
Adviser, Federated Advisers, meet certain criteria.
. INSURANCE MANAGEMENT SERIES -- UTILITY FUND seeks to achieve high current
income and moderate capital appreciation by investing primarily in a
professionally managed and diversified portfolio of equity and debt
securities of utility companies. Under normal market conditions, the IMS
Utility Fund will invest at least 65% of its total assets in securities
of utility companies.
. INSURANCE MANAGEMENT SERIES -- U.S. GOVERNMENT BOND FUND seeks to provide
current income. The IMS U.S. Government Bond Fund pursues its investment
objective by investing at least 65% of the value of its total assets in
securities issued or guaranteed as to payment of principal and interest
by the U.S. government, its agencies or instrumentalities.
. INSURANCE MANAGEMENT SERIES -- CORPORATE BOND FUND seeks high current
income by investing primarily in a diversified portfolio of
professionally managed fixed income securities. The fixed-income
securities in which the Fund intends to invest are lower-rated corporate
debt obligations. Lower-rated corporate debt obligations are commonly
known as "junk bonds" or "High Yield, High Risk Bonds" and involve
significant degree of risk (see the funds' prospectus for a discussion of
the risk factors involved in investing in lower-rated corporate debt
obligations). Some of the fixed income securities may involve equity
features. Capital growth will be considered, but only when consistent
with the investment objective of high current income.
. JANUS ASPEN SERIES -- AGGRESSIVE GROWTH PORTFOLIO is a non-diversified
portfolio that seeks long-term growth of capital by emphasizing
investments in common stock of companies with a market capitalization
between $1 billion and $5 billion.
. JANUS ASPEN SERIES -- BALANCED PORTFOLIO seeks both long-term growth of
capital and current income. The Portfolio is designed for investors who
want to participate in the equity markets through a more moderate
investment than a pure growth fund. Investments in income-producing
securities are intended to result in a portfolio that provides a more
consistent total return than may be attainable through investing solely
in growth stocks. The Portfolio is not designed for investors who desire
a consistent level of income.
. JANUS ASPEN SERIES -- FLEXIBLE INCOME PORTFOLIO seeks to maximize total
return, consistent with preservation of capital, from a combination of
current income and capital appreciation.
15
<PAGE>
Flexible Income Portfolio invests in all types of income-producing
securities and may have substantial holdings of debt securities rated
below investment grade ("high yield/high risk securities"), also commonly
known as junk bonds. These securities involve certain risks, and investors
should read carefully the risk disclosure in the portfolio's prospectus.
. JANUS ASPEN SERIES -- GROWTH PORTFOLIO seeks long-term growth of capital
by investing primarily in a diversified portfolio of common stocks of a
large number of issuers of any size. The Portfolio generally emphasizes
issuers with large market capitalizations.
. JANUS ASPEN SERIES -- SHORT-TERM BOND PORTFOLIO seeks as high a level of
current income as is consistent with preservation of capital by investing
primarily in short- and intermediate-term fixed income securities. The
Portfolio will normally maintain a dollar-weighted average portfolio
maturity of less than three years, but not to exceed five years depending
upon its portfolio manager's opinion of prevailing market, financial and
economic conditions.
. JANUS ASPEN SERIES -- WORLDWIDE GROWTH PORTFOLIO seeks long-term growth
of capital by investing primarily in common stocks of companies of
foreign and domestic issuers of any size. The portfolio normally invests
in issuers from at least five different countries including the United
States. International investments involve risks not present in U.S.
Securities.
. LEXINGTON EMERGING MARKETS FUND seeks long-term growth of capital
primarily through investment in equity securities of companies domiciled
in, or doing business in emerging countries and emerging markets.
. LEXINGTON NATURAL RESOURCES TRUST is a non-diversified portfolio that
seeks long-term growth of capital through investment primarily in common
stocks of companies which own or develop natural resources and other
basic commodities or that supply goods and services to such companies.
The Fund may invest up to 25% of its total assets in foreign securities.
Foreign investing involves risks that differ from those involved in
domestic investing. See the Fund's prospectus for a discussion of these
risks.
. TCI PORTFOLIOS, INC. -- TCI GROWTH seeks capital growth by investing in
common stocks (including securities convertible into common stocks) and
other securities that meet certain fundamental and technical standards of
selection and, in the opinion of TCI Growth's management, have better
than average potential for appreciation. TCI Growth tries to stay fully
invested in such securities, regardless of the movement of prices
generally. The Portfolio may invest in foreign securities. Foreign
investing involves risks that differ from those involved in domestic
investing. See the Portfolio's prospectus for a discussion of these
risks.
. TCI PORTFOLIOS, INC. -- TCI BALANCED seeks capital growth and current
income. It seeks capital growth by investing in 60% common stocks
(including securities convertible into common stocks) and other
securities that meet certain fundamental and technical standards of
selection and, in the opinion of TCI Balanced's management, have better-
than-average potential for appreciation. Management intends to maintain
approximately 40% of the Portfolio's assets in fixed income securities.
. TCI PORTFOLIOS, INC. -- TCI INTERNATIONAL seeks capital growth by
investing primarily in an internationally diversified portfolio of common
stocks that are considered by management to have prospects for
appreciation. The Fund will invest primarily in securities of issuers
located in countries with developed economies.
There is no assurance that the Funds will achieve their investment objectives.
Certificate Holders and Contract Holders bear the full investment risk of
investments in the Funds selected.
Some of the above funds may use instruments known as derivatives as part of
their investment strategies as described in their respective prospectuses. The
use of certain derivatives such as inverse floaters and principal only debt
instruments may involve higher risk of volatility to a Fund. The use of
leverage in connection with derivatives can also increase risk of losses. See
the prospectus for the Funds for a discussion of the risks associated with an
investment in those funds.
16
<PAGE>
More comprehensive information, including a discussion of potential risks, is
found in the current prospectus for each Fund which is distributed with and
must accompany this Prospectus. Contract Holders and Certificate Holders should
read the accompanying prospectuses carefully before investing. Additional
prospectuses and the Statements of Additional Information for this Prospectus
and each of the Funds can be obtained from the Company's Home Office at the
address and telephone number listed on the cover of this Prospectus.
FUND INVESTMENT ADVISERS
The following identifies the investment adviser and the subadviser, if any, for
each Fund.
<TABLE>
<CAPTION>
FUND INVESTMENT ADVISER
---- ------------------
<S> <C>
Aetna Variable Fund Aetna Life Insurance and
Annuity Company (ALIAC)
Aetna Income Shares ALIAC
Aetna Variable Encore Fund ALIAC
Aetna Investment Advisers Fund, Inc. ALIAC
Aetna Ascent Variable Portfolio ALIAC
Aetna Crossroads Variable Portfolio ALIAC
Aetna Legacy Variable Portfolio ALIAC
Alger Balanced Portfolio Fred Alger Management, Inc.
Alger Income and Growth Portfolio Fred Alger Management, Inc.
Alger MidCap Growth Portfolio Fred Alger Management, Inc.
Alger Leveraged AllCap Portfolio Fred Alger Management, Inc.
Alger Small Cap Portfolio Fred Alger Management, Inc.
Alger Growth Portfolio Fred Alger Management, Inc.
Fidelity High Income Portfolio Fidelity Management & Research Company
Fidelity Equity-Income Portfolio Fidelity Management & Research Company
Fidelity Growth Portfolio Fidelity Management & Research Company
Fidelity Overseas Portfolio Fidelity Management & Research Company
Fidelity Investment Grade Bond Portfolio Fidelity Management & Research Company
Fidelity Asset Manager Portfolio Fidelity Management & Research Company
Fidelity Index 500 Portfolio Fidelity Management & Research Company
Fidelity Contrafund Portfolio Fidelity Management & Research Company
IMS Equity Growth and Income Fund Federated Advisers
IMS Utility Fund Federated Advisers
IMS U.S. Government Bond Fund Federated Advisers
IMS Corporate Bond Fund Federated Advisers
Janus Aggressive Growth Portfolio Janus Capital Corporation
Janus Balanced Portfolio Janus Capital Corporation
Janus Flexible Income Portfolio Janus Capital Corporation
Janus Growth Portfolio Janus Capital Corporation
Janus Short-Term Bond Portfolio Janus Capital Corporation
Janus Worldwide Growth Portfolio Janus Capital Corporation
Lexington Emerging Markets Fund Lexington Management Corporation
Lexington Natural Resources Trust Lexington Management Corporation*
TCI Growth Investors Research Corporation
TCI Balanced Investors Research Corporation
TCI International Investors Research Corporation
</TABLE>
* Market Systems Research Advisors, Inc. serves as the sub-adviser for the
Lexington Natural Resources Trust.
17
<PAGE>
MIXED AND SHARED FUNDING
Shares of the Funds are sold to us for funding variable annuities. The Funds
may be sold to other companies for the same purpose. This is referred to as
"shared funding." Shares of the Funds may also be used for funding variable
life insurance policies through variable life separate accounts sponsored by us
or by third parties. This is referred to as "mixed funding."
It is conceivable that, in the future, it may be disadvantageous for variable
annuity separate accounts and variable life separate accounts of the same or of
an unaffiliated insurance company to invest in these Funds simultaneously,
since the interests of the contract holders or policy owners or insurance
companies may differ. Each Fund's Board of Trustees or Directors has agreed to
monitor events in order to identify any material irreconcilable conflicts which
may possibly arise and to determine what action, if any, should be taken in
response thereto. If such a conflict were to occur, one of the separate
accounts might withdraw its investment in a Fund. This might force that Fund to
sell portfolio securities at disadvantageous prices.
FUND ADDITIONS AND LIMITATIONS
We may, from time to time, add additional mutual funds as eligible variable
funding options under the Contracts. No more than 18 different investment
choices may be made over the life of the Certificate. See "Transfers Among
Investment Options."
The Company's current policy is to allow only the Aetna Variable Fund, Aetna
Income Shares and Aetna Investment Advisers Fund, Inc. to be used as variable
investment options during the Annuity Period. See "Annuity Period Elections."
CONTRACT PURCHASE
PURCHASE
The Contract application must be completed by the prospective Group Contract
Holder and sent, together with the Purchase Payment, if any, to the Distributor
or directly to the Company at its Home Office. A Certificate Holder establishes
an Account under a group contract by completing an enrollment form and any
other required forms. The Distributor will deliver any application or
enrollment form to the Company for review, acceptance or rejection.
Contracts may be purchased by spouses as Joint Certificate Holders. Tax law
prohibits the purchase of Individual Retirement Annuities by Joint Certificate
Holders. (See "Contract Rights.")
The Company must accept or reject an application or enrollment form within two
business days of its receipt. If the application or enrollment form is
incomplete, the Company may hold it and any accompanying Purchase Payment for
five days. Purchase Payments may be held for longer periods only with the
consent of the Certificate Holder, pending acceptance of the application or
enrollment form. If the application or enrollment form is accepted, a Contract
will be issued to the Certificate Holder or the Purchase Payment will be
accepted. Any Purchase Payment accompanying the application or enrollment form,
or received prior to acceptance of the application or enrollment form, will be
invested as of the date of acceptance. If the application or enrollment form is
rejected, the application or enrollment form and any Purchase Payments will be
returned to the Certificate Holder.
You may cancel the Contract within 10 days of receiving it. See "Contract
Rights -- Right to Cancel" for more information.
PURCHASE PAYMENTS
Each Purchase Payment accepted by us that is to be invested in the variable
funding options will be deposited in the Separate Account as set forth under
"Certificate Holder's Account Values."
18
<PAGE>
You may elect to have each Net Purchase Payment accumulate (a) on a variable
basis invested in shares of one or more of the Funds; (b) under the credited
interest option; or (c) in a combination of any of the available investment
options. Net Purchase Payments must be allocated in terms of whole percentages,
and may not be invested in more than 18 investment options over the life of the
Certificate. See "Transfers Among Investment Options." For subsequent Purchase
Payments, if no allocation instructions are received with the Purchase Payment,
the allocation will be the same as that indicated on the original enrollment
form or application. If the same term is not available under the credited
interest option, the next shortest will be used. If no shorter term is
available, the next longer Guaranteed Term will be used.
For the Nonqualified Flexible Premium Contract the minimum initial Purchase
Payment is $5,000. Additional Purchase Payments to a Nonqualified Flexible
Premium Contract must be at least $2,500. Subsequent payments may be sent
through the Group Contract Holder, the Distributor or may be sent to the
Marathon Service Unit at the Company's Home Office. Subsequent payments will be
credited as of the end of the Valuation Period during which it is received at
the Company's Home Office. The minimum initial Purchase Payment for the
Individual Retirement Annuity Rollover Contract (IRA) is $10,000. Subsequent
Purchase Payments will be accepted if they are rollovers of amounts previously
accumulated under an Individual Retirement Annuity or Account or a plan
qualified under Code Section 401 or 403. A Purchase Payment of more than
$500,000 is allowed only with our consent. The maximum issue age for the
Annuitant is 90.
Additional Purchase Payments are subject to the terms and conditions published
by us at the time of the subsequent payment. We reserve the right to limit the
total dollar amount accepted from a Certificate Holder. We also reserve the
right to reject any Purchase Payment to a prospective or existing Certificate
Holder's Account without advance notice.
Each Nonqualified Flexible Premium Contract must be aggregated with other
annuity contracts and/or accounts under a Contract purchased by you from us
(and our affiliates) in any calendar year on or after October 21, 1988 for
purposes of determining the taxable portion of payments. (See "Tax Status --
Tax Status of Distributions.")
DESIGNATIONS OF BENEFICIARY AND ANNUITANT
For both Nonqualified Flexible Premium Contracts and IRA Rollover Contracts,
you designate the Beneficiary on the enrollment form or application for an
individual Contract.
The Beneficiary may be entitled to exercise certain rights and receive certain
payments under the Contract in the event of the Certificate Holder's death. You
may change the Beneficiary at any time by submitting a written notice to the
Company's Home Office. The change will not be effective until accepted by the
Company. For an IRA Rollover Contract, you must be the Annuitant. For
Nonqualified Flexible Premium Contracts, you may (but need not) select a
different person as the Annuitant. See "Contract Rights -- Rights Under the
Contract and Account" if you are not the Annuitant.
DISTRIBUTION
Aetna Life Insurance and Annuity Company ("ALIAC") will serve as Underwriter
for the securities sold by this Prospectus. ALIAC is registered as a broker-
dealer with the SEC and is a member of the National Association of Securities
Dealers, Inc. (NASD). As Underwriter, ALIAC will contract with one or more
registered broker-dealers ("Distributors") to offer and sell the Contracts.
ALIAC and one or more of its affiliates may also sell the Contracts directly.
All registered representatives of the Distributors must also be licensed as
insurance agents to sell Variable Annuity Contracts.
ALIAC may also contract with independent third party broker-dealers who will
act as wholesalers by assisting ALIAC in finding broker-dealers interested in
acting as Distributors for the Contracts. These
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wholesalers may also provide training, marketing and other sales related
functions for ALIAC and other Distributors and may provide certain
administrative services to ALIAC in connection with the Contracts. ALIAC may
pay such wholesalers compensation based on Purchase Payments for the Contracts
purchased through Distributors selected by the wholesaler.
ALIAC may also designate third parties to provide services in connection with
the Contracts such as reviewing applications for completeness and compliance
with insurance requirements and providing the Distributors with approved
marketing material, prospectuses or other supplies. These parties will also
receive payments based on Purchase Payments for their services, to the extent
such payments are allowed by applicable securities laws. All costs and expenses
related to these services will be paid by ALIAC.
CERTIFICATE HOLDER'S ACCOUNT VALUES
ACCUMULATION UNITS
A Purchase Payment that is directed to one or more of the Funds is deposited in
the Separate Account and credited to the Certificate Holder's Account in the
form of Accumulation Units for each Fund selected. The number of Accumulation
Units credited is determined by dividing the applicable portion of the Purchase
Payment by that Contract's Accumulation Unit value of the appropriate Fund. The
Accumulation Unit value used is that next-computed following the date on which
a Purchase Payment is received at the Company's Home Office, unless the
application or enrollment form has not been accepted. In that event, Purchase
Payments will be credited at the Accumulation Unit Value next determined after
acceptance of the application or enrollment form. The value of Accumulation
Units attributable to the Funds will be affected by the investment performance,
expenses and charges of those Funds. Generally, if the net asset value of the
fund increases, so does the Accumulation Unit value; however, performance of
the Separate Account is reduced by charges and deductions under the Contract.
Accumulation Units are valued separately for each Fund. Therefore, if you elect
to have a Net Purchase Payment invested in a combination of Funds, you will
have Accumulation Units credited from more than one Fund. The value of the
Certificate Holder's Account as of the most recent Valuation Period, is
determined by adding the value of any Accumulation Units attributed to the
Fund(s) you have selected to the value of any amounts invested in the
Guaranteed Account.
NET INVESTMENT FACTOR
The value of a Fund's Accumulation Unit for any Valuation Period is calculated
by multiplying the Fund's Accumulation Unit value for the immediately preceding
Valuation Period by the net investment factor of the appropriate investment
option for the current period.
The net investment factor is calculated separately for each Fund in which
assets of the Separate Account are invested. It is determined by adding
1.0000000 to the net investment rate.
The net investment rate equals (a) the value of Fund shares held by the
Separate Account at the end of a Valuation Period, minus (b) the value of Fund
shares held by the Separate Account at the beginning of a Valuation Period,
plus or minus (c) taxes or provision for taxes, if any, attributable to the
operation of the Separate Account, divided by (d) the value of the Accumulation
and Annuity Units for the Fund at the beginning of the Valuation Period, minus
(e) a daily charge at the annual effective rate of 1.25% for mortality and
expense risks, and a daily administrative expense charge at the annual
effective rate of 0.15% during the Accumulation Period and up to 0.25% during
the Annuity Period. The net investment rate may be more or less than zero.
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CONTRACT RIGHTS
RIGHT TO CANCEL
The Group or Individual Contract Holder may cancel the Contract no later than
ten days after receiving it (or as otherwise allowed by state law) by returning
it to us or to the Distributor from whom it was purchased along with a written
notice of cancellation. A Certificate Holder may cancel his or her Certificate
Holder's Account under a group Contract no later than ten days after receiving
the Certificate (or as otherwise allowed by state law) by returning it to us or
to the Distributor from whom it was purchased along with a written notice of
cancellation. We will send a refund not later than seven calendar days after we
receive the Contract or Certificate and the written notice at our Home Office.
Unless the applicable state law requires a refund of the Purchase Payments, for
Nonqualified Flexible Premium Contracts, we will refund the Purchase Payments
plus any increase or minus any decrease in the value attributable to the
Purchase Payments allocated to the variable option(s). For IRA Rollover
Contracts, we will refund the Purchase Payment.
RIGHTS UNDER THE CONTRACT AND ACCOUNT
The Group Contract Holder has title to the Contract and only the right to
accept or reject any modifications to the Contract. You have all other rights
to your Certificate Holder's Account under the Contract. However, under a
Nonqualified Flexible Premium Contract, if you and the Annuitant are not the
same, and the Annuitant dies first, a different provision applies. In this
case, your rights are automatically transferred to the Beneficiary. (See "Death
Benefit.")
Two individuals may have an interest in the same Certificate Holder's Account
as Joint Certificate Holders. See "Contract Purchase." Joint Certificate
Holders have equal rights under the Contract and with respect to their
Certificate Holder's Account. On the death of a Joint Certificate Holder prior
to the Annuity Date, the surviving Certificate Holder may retain all ownership
rights under the Contract or elect to have the proceeds distributed. See "Death
Benefits." All rights under the Contract must be exercised by both Joint
Certificate Holders with the exception of transfers among investment options;
at the Company's discretion, one Joint Certificate Holder can select additional
investment options after the Account has been established.
Loans are not allowed under this Contract.
TRANSFERS AMONG INVESTMENT OPTIONS
We currently allow unlimited transfers of accumulated amounts to available
investment options during the Accumulation Period without charge; however, we
reserve the right to charge $10 for each transfer after the first 12 in any
calendar year. During each calendar year, you may change the allocation of
future Net Purchase Payments and/or transfer account values among the funding
options available under the Contract. However, you may not make allocations or
transfers to new funding options if the total number of funding options you
have selected would exceed 18 since the time that you acquired an interest in
the Contract. Each variable funding option and each guaranteed term of the
Guaranteed Account selected counts as one option, even if you no longer have
amounts allocated to that option. Amounts transferred must be at least $500. If
the transfer is from the Guaranteed Account before a maturity date, the amount
transferred will be subject to a Market Value Adjustment (except, where state
regulatory approval has been received, for transfers made from the one-year
Guaranteed Term in connection with the Dollar Cost Averaging program). Any
transfer to or from the Funds will be based on the Accumulation Unit value next
determined after we receive a valid request at our Home Office. During the
Annuity Period, transfers are not available.
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DOLLAR COST AVERAGING PROGRAM
Dollar Cost Averaging is a system for investing a fixed amount of money at
regular intervals over a period of time. It is based on the economic fact that
buying a variably priced item with a constant sum of money at fixed intervals
affords the buyer the opportunity to automatically buy more of that item when
prices are low and less of it when prices are high, thus reducing the average
cost per item. Dollar Cost Averaging does not ensure a profit nor guarantee
against loss in a declining market. Certificate Holders should consider their
financial ability to continue purchases through periods of low price levels.
The Dollar Cost Averaging Program permits Certificate Holders to systematically
transfer amounts from any of the variable funding options and the one-year
Guaranteed Account Term to any of the variable funding options. Where state
regulatory approval has been received, a Market Value Adjustment will not be
applied to dollar cost averaging transfers from the one-year Guaranteed Term.
Consult your representative to determine whether the waiver is approved in your
state. (See the Appendix for a discussion of the restrictions related to Dollar
Cost Averaging from the Guaranteed Account.)
You must have an Account Value of at least $5,000 to participate in the Dollar
Cost Averaging Program. The minimum amount that may be transferred into a
particular variable funding option is $50. DCA can be elected at any time
during the Accumulation Period by completing the DCA section of the application
or by completing a DCA Election Form available from the Company at its Home
Office. All DCA transfers will be made on the 15th of each month (or the next
Valuation Period, if applicable). Any transfer made under the DCA program will
not be counted for purposes of any transfer limitations imposed under the
Contract. A Certificate Holder may terminate the DCA program at any time. The
Company reserves the right to modify or terminate the DCA program at any time.
Dollar Cost Averaging is not available to individuals who have elected the
Systematic Withdrawal Option or the Account Rebalancing Program (described
below).
ACCOUNT REBALANCING PROGRAM
The Account Rebalancing Program allows Certificate Holders to have portions of
their Account Value automatically reallocated on the Anniversary of the
Effective Date to a specified percentage. Only Account Values accumulating in
the variable funding options can be rebalanced. Certificate Holders may
participate in this program by completing the Account Rebalancing Section of
the Contract Application, or by requesting the service in writing from the
Company's Home Office. Reallocations under the Account Rebalancing Program will
not be counted for purposes of any transfer limitations imposed under the
Contract.
Account Rebalancing is not available to Certificate Holders who have elected
the Dollar Cost Averaging Program.
Account Rebalancing does not ensure a profit nor guarantee against loss in a
declining market.
WITHDRAWALS
You may withdraw all or a portion of the Certificate Holder's Account Value
during the Accumulation Period by properly completing a disbursement form
provided by us and sending it to our Home Office. Withdrawal request forms are
available from us and from the Distributors. The following types of withdrawal
may be requested:
. Full Withdrawal: The Adjusted Account Value minus any applicable deferred
sales charge and maintenance fee due.
. Partial Withdrawal (Percentage): The percentage of the Adjusted Account
Value requested minus any applicable deferred sales charge.
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. Partial Withdrawal (Specific Dollar Amount): The dollar amount requested.
The amount actually withdrawn from the Certificate Holder's Account may
be greater or less than the dollar amount requested to allow for payment
of any applicable deferred sales charge and any applicable Market Value
Adjustment.
We will pay all amounts based on the Certificate Holder's Account Value next
computed after the request is received in the Home Office or a later date, if
specified. For any partial withdrawal, amounts are withdrawn on a pro rata
basis from all variable funding options. (For treatment of amounts withdrawn
from the Guaranteed Account, see the Appendix.)
Taxes or tax penalties may be due on the amount withdrawn. (See "Tax Status --
Taxation of Annuities.")
We reserve the right to close out, upon 90 days written notice, any Certificate
Holder's Account with a value of $2,500 or less immediately following a partial
withdrawal. A deferred sales charge will not be deducted in this event. The
Company does not intend to exercise this right in cases where the Certificate
Holder's Account Value is reduced to $2,500 or less solely due to investment
performance.
Payments for withdrawal requests will be made in accordance with SEC
requirements, but normally not later than seven calendar days after we receive
a properly completed withdrawal form in our Home Office or within seven
calendar days of the date the withdrawal form may specify. Payments may be
delayed for: (a) any period in which the New York Stock Exchange ("Exchange")
is closed (other than customary weekend and holiday closings) or in which
trading on the Exchange is restricted; (b) any period in which an emergency
exists where disposal of securities held by the Funds is not reasonably
practicable or it is not reasonably practicable for the value of the assets of
the Funds to be fairly determined; or (c) such other periods as the SEC may by
order permit for the protection of Certificate Holders. The conditions under
which restricted trading or an emergency exists will be determined by the rules
and regulations of the SEC.
The tax treatment of withdrawals from each Nonqualified Flexible Premium
Contract may be affected if you own other annuity contracts or accounts issued
by us (or our affiliates) that were purchased on or after October 21, 1988.
(See "Tax Status -- Tax Status of Distributions.")
REINSTATEMENT PRIVILEGE FOLLOWING WITHDRAWAL
You may elect to reinstate all or a portion of the proceeds received from the
full withdrawal of the Certificate Holder's Account within 30 days after the
withdrawal. Accumulation Units will be credited to the Certificate Holder's
Account for the amount reinstated, as well as for any maintenance fee charged
and any portion of any deferred sales charge imposed at the time of withdrawal.
However, any aggregate negative Market Value Adjustment made to the Guaranteed
Account will not be credited. Reinstated amounts will be reallocated to the
applicable investment options in the same proportion as they were allocated at
the time of withdrawal.
The number of Accumulation Units credited will be based upon the Accumulation
Unit value(s) next computed following receipt at our Home Office of the
reinstatement request along with the amount to be reinstated. Any maintenance
fee which falls due after the withdrawal and before the reinstatement will be
deducted from the amount reinstated. The reinstatement privilege may be used
only once and does not apply to Certificate Holder's Accounts that we close
out. If you are contemplating reinstatement, you should seek competent advice
regarding the tax consequences associated with this type of a transaction.
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CHARGES AND DEDUCTIONS
GENERAL
This section describes the maximum charges that we may deduct for maintenance
fees, administrative expenses, sales-related expenses and transfer fees. A
description of mortality and expense risk charges and Fund expenses is also
included.
MAINTENANCE FEE
We will deduct an annual maintenance fee of $30 from the Certificate Holder's
Account Value during the Accumulation Period. This fee is to reimburse us for
some administrative expenses relating to the establishment and maintenance of
the Certificate Holder's Account. We will deduct the fee on the anniversary of
the Certificate Holder's Account's Effective Date (or, if this is not a
business day that the New York Stock Exchange is open, on the next business
day). The fee is also deducted upon withdrawal of the entire Certificate
Holder's Account. The fee is deducted proportionately from each investment
option selected under the Contract by liquidating a portion of amounts held in
those options.
We will not deduct a maintenance fee (either annually or upon withdrawal) if
the Certificate Holder's Account Value is $50,000 or more on the day the
maintenance fee is due.
MORTALITY AND EXPENSE RISK CHARGES
We make a daily deduction from the Separate Account variable portion of the
Certificate Holder's Account Value for mortality and expense risks (insurance
charges). The deduction, equal to the annual effective rate of 1.25% per year,
is made as part of the calculation of Accumulation Unit and Annuity Unit
value(s).
The mortality risk charge is to compensate us for the risks we assume (a) for
the guaranteed death benefit and (b) for our promise to make lifetime payments
according to Annuity rates specified in the Contract. The expense risk charge
is to compensate us for the risk that actual expenses for costs incurred under
the Contract will exceed the maximum costs that can be charged under the
Contract. We hope to profit from the daily deduction for mortality and expense
risks. Any such profit, as well as any other profit realized by us, would be
available for any proper corporate purpose, including, but not limited to,
payment of sales and distribution expenses.
ADMINISTRATIVE EXPENSE CHARGE
During the Accumulation Period, we deduct a daily charge of 0.15% per year
from the Separate Account portion of the Certificate Holder's Account Value.
The deduction is made as part of the calculation of Accumulation Unit Values.
This charge is to reimburse us for expenses we incur for administering the
Contract. We do not intend to profit from this charge. The administrative
expense charge is a percentage of the variable portion of the Certificate
Holder's Account Value; therefore, there may be no relationship between the
amount so deducted and the amount of expenses attributable to the Certificate
Holder's Account.
An administrative expense charge may be established upon the start of a
variable Annuity Option. This charge will not exceed 0.25% per year, deducted
on a daily basis from any variable portion of the Annuity Option. The
deduction is made as part of the calculation of Annuity Unit Values. Through
April 30, 1996, this charge is guaranteed to be 0%. Once an Annuity Option is
elected, and an administrative expense charge has been established, we will
not change the charge.
TRANSFER FEES
For each Certificate Holder's Account unlimited transfers are currently
allowed without charge during the Accumulation Period. We reserve the right to
charge $10 for each transfer in excess of 12 during a
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calendar year. If we do assess the fee, it will be deducted from the
Certificate Holder's Account Value. Transfers are not allowed during the
Annuity Period.
DEFERRED SALES CHARGE
You may withdraw the Adjusted Account Value of your Certificate Holder's
Account at any time during the Accumulation Period; however, a deferred sales
charge (referred to in the Contract as a surrender fee) may be deducted so that
we may recover some of our sales expenses.
The charge only applies to the Net Purchase Payment (not to any associated
changes in value), and gradually decreases generally by 1% so that seven years
after the date the Net Purchase Payment was made, the charge associated with
that payment is 0%. To satisfy a partial withdrawal, the deferred sales charge
is calculated as if Net Purchase Payments are withdrawn in the same order they
were applied to the Certificate Holder's Account (i.e., the oldest Net Purchase
Payment will be exhausted, then the next oldest and so on if a partial
withdrawal is requested). Partial withdrawals from the Guaranteed Account will
be treated as described in the Appendix and in its prospectus. Withdrawals are
charged first against Net Purchase Payments, then against any increases in
value. The deferred sales charge for each Net Purchase Payment is determined by
multiplying the Net Purchase Payment withdrawn by the appropriate percentage,
depending on the number of years completed since the Net Purchase Payment was
made, as shown in the table below. The total charge will be the sum of the
charges applicable for all of the Net Purchase Payments withdrawn.
<TABLE>
<CAPTION>
LENGTH OF TIME SINCE
NET PURCHASE PAYMENT MADE DEDUCTION
------------------------- ---------
<S> <C>
Less than 2 years 7%
2 years or more but less than 4 years 6%
4 years or more but less than 5 years 5%
5 years or more but less than 6 years 4%
6 years or more but less than 7 years 3%
7 years or more 0%
</TABLE>
We will not deduct a deferred sales charge from any Net Purchase Payment
withdrawn that is:
(a) Applied to provide Annuity benefits;
(b) Paid to a Beneficiary due to the Annuitant's death before Annuity
payments start, up to a maximum of the Net Purchase Payment(s) in the
Certificate Holder's Account on the Annuitant's date of death;
(c) Withdrawn under the Systematic Withdrawal Option (SWO) or the Estate
Conservation Option (ECO);
(d) Withdrawn after the Annuitant has spent at least 45 consecutive days in
a licensed nursing care facility, but within three years of admission
to a licensed nursing care facility (in New Hampshire only, the
facility does not have to be licensed). This waiver does not apply if
you or the Annuitant are in a nursing care facility at the time the
Certificate Holder's Account is established or is admitted to a
licensed nursing care facility within one year of that time. It will
also not apply if prohibited by state law; or
(e) Paid due to the full withdrawal of the Certificate Holder's Account for
which the value is $2,500 or less and no withdrawals have been made in
the prior 12 months; or
(f) Paid, at least 12 months after the date of the first Purchase Payment
to the Certificate Holder's Account in an amount of 10% or less of the
Certificate Holder's Account Value. This applies to the first partial
or full withdrawal made each calendar year. The 10% amount will be
calculated using the Certificate Holder's Account Value on the date the
request is received in
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good order at the Home Office. If a withdrawal is made that exceeds 10%,
the applicable deferred sales charge on the amount over 10% and any
applicable Market Value Adjustment will be deducted from the Certificate
Holder's Account Value. This provision may not be exercised if SWO is
elected; or
(g) Paid if we close out the Certificate Holder's Account. (See "Contract
Rights -- Withdrawals.")
In the instances cited in the above paragraphs, no deferred sales charge is
deducted. However, the amount withdrawn may be subject to the 10% federal
penalty tax. (See "Tax Status -- Tax Status of Distributions.") A Market Value
Adjustment may also apply to amounts withdrawn from the Guaranteed Account.
Based on our actuarial determination, we do not anticipate that the deferred
sales charge will cover all sales and administrative expenses that we will
incur in connection with the Contract.
FUND EXPENSES
Each Fund has an investment adviser which charges a management or investment
advisory fee for its services. These fees are based on each Fund's average net
assets, and are deducted from the assets of each Fund and paid to the
investment adviser. The Fee Table sets forth the management fee and other
expenses of each Fund for 1994. (See "The Funds -- Fund Investment Advisers"
for a list of the Funds' investment advisers.)
Most expenses incurred in the operations of each Fund are borne by that Fund.
Fund advisers may reimburse the Funds that they advise for some or all of these
expenses. For further details on each Fund's expenses, you should read the
accompanying prospectus for each Fund and the Fee Table in this Prospectus.
PREMIUM TAX
Several states and municipalities impose a premium tax on Purchase Payments
either when made or when an Annuity option is elected. Currently such taxes
range up to 4%. Ordinarily, any state premium tax will be deducted from the
Certificate Holder's Account Value when it is applied to an Annuity option.
However, we reserve the right to deduct state premium tax at any time from the
Purchase Payment(s) or from the Certificate Holder's Account Value at any time,
but no earlier than when we have a tax liability under state law.
Any municipal premium tax assessed at a rate in excess of 1% will be deducted
from the Purchase Payment(s) or from the amount applied to an Annuity option
based on our determination of when such tax is due. We will absorb any
municipal premium tax which is assessed at 1% or less. We reserve the right,
however, to reflect this added expense in our Annuity purchase rates for
residents of such municipalities.
COMMISSIONS AND DISTRIBUTION EXPENSES
Commissions will be paid to broker-dealers who sell the Contracts. Broker-
dealers will be paid commissions up to an amount currently equal to 6.5% of
Purchase Payments. Pursuant to agreements between the Underwriter (ALIAC) and
the broker-dealer, commissions may be paid as a combination of a certain
percentage amount at the time of sale and a trail commission of up to 0.40% of
assets due to Purchase Payments (which, when combined, could exceed 6.5% of
Purchase Payments).
Other than the mortality and expense risk charge and the administrative charge,
all expenses incurred in the operations of the Separate Account are borne by
the Company.
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ADDITIONAL WITHDRAWAL OPTIONS
GENERAL
We offer two withdrawal options that are not considered Annuity options: the
Estate Conservation Option ("ECO") and the Systematic Withdrawal Option
("SWO"). These options are available if your Account Value is at least $25,000
at the time of election and you are at least age 70 1/2 for ECO or 59 1/2 for
SWO. ECO is available only for amounts in an IRA Rollover Contract, and not for
amounts under a Nonqualified Flexible Premium Contract. Under SWO, you receive
a series of partial withdrawals from your Account based on the payment method
you select. It is designed for those who want a periodic income while retaining
investment flexibility for amounts accumulating under the Contract. ECO offers
the same investment flexibility as SWO, but is designed for those who want to
receive only the minimum distribution that the Code requires each year. Under
ECO, the Company calculates the minimum distribution amount required by law and
pays you that amount once a year.
Amounts withdrawn for ECO and SWO will be deducted from the Contract in the
same manner as for any other withdrawals during the Accumulation Period except
that no deferred sales charge will be applied. Additionally, where state
regulatory approval has been received, no market value adjustment will be
applied to amounts distributed under an ECO or SWO election. (See your
representative to determine whether the waiver is approved in your state.) (See
"Contract Rights -- Withdrawals During Accumulation Period" and "Charges and
Deductions -- Deferred Sales Charge.")
Since ECO and SWO are not Annuity options, the Certificate Holder's Account
retains all the rights and obligations available during the Accumulation
Period, as described in this Prospectus, and is subject to all Accumulation
Period Contract charges. We reserve the right to discontinue the availability
of these withdrawal options and to change the terms for future elections.
Once elected, you or your spousal beneficiary may revoke the applicable
option(s) at any time, by submitting a written request to our Home Office. Any
revocation will apply only to the amounts not yet paid. Once ECO or SWO is
revoked, it may not be elected again.
SWO is different from ECO in the following ways: (1) SWO payments are made for
a fixed dollar amount, fixed time period or fixed percentage whereas ECO
payments vary in dollar amount and can continue indefinitely during your
lifetime; (2) generally, SWO payments will be higher than expected ECO
payments; and (3) ECO is available only for amounts in an Individual Retirement
Annuity Contract, whereas SWO is available under both Individual Retirement
Annuity Contracts and Nonqualified Flexible Premium Contracts. You should
carefully assess your future income needs when considering the election of
these withdrawal options.
You should consult your tax adviser prior to electing one of these options due
to the potential for adverse tax consequences. The Company will not be
responsible for adverse tax consequences incurred by a Certificate Holder due
to their receipt of SWO payments.
For a discussion of the consequences if you or your Beneficiary dies after SWO
or ECO has been elected, see "Death Benefit."
ESTATE CONSERVATION OPTION
The first distribution may not be made before the calendar year in which the
Certificate Holder attains age 70 1/2. ECO is available only for amounts in an
Individual Retirement Annuity Contract.
We will calculate and distribute an annual amount using the recalculation
method contained in the Code's minimum distribution regulations. You specify
the month you want to receive the distributions and they will be mailed for
receipt by the 15th of that month each year. The annual distribution is
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determined each year by dividing the Certificate Holder's Account Value by a
life expectancy factor from tables designated by the Internal Revenue Service
("IRS"). The factor will be based on either your life expectancy or the joint
life expectancy of you and your Beneficiary and will be redetermined for each
calendar year's distribution. The Certificate Holder's Account Value to be used
in this calculation is the Certificate Holder's Value on the December 31st of
the year prior to the year in which the ECO payment is being made. This
calculation will be changed, if necessary, to conform to changes in the Code or
applicable regulations.
SYSTEMATIC WITHDRAWAL OPTION
SWO payments are available on a monthly, quarterly, semiannual or annual basis
and are mailed for receipt by the 15th of the month. Under the Specified
Percentage method, payments will be made until you reach age 70 1/2, or if
elected by your spouse as a Beneficiary, until you would have reached age 70
1/2. You may not make any election that would result in a payment of less than
$500.
You may elect one of the following methods of distribution:
(a) Specified Payment -- payments of a designated dollar amount. The dollar
amount chosen cannot be greater than 10% of the Certificate Holder's
Account Value. The Company may require a minimum payment amount.
(b) Specified Period -- payments for a designated time period. Each annual
distribution is determined by dividing the Certificate Holder's Account
Value by the number of years remaining in the elected period. The
Certificate Holder's Account Value used in this calculation is the
Certificate Holder's Account Value on the December 31st of the year
prior to the year for which the payment is being made. For payments
made more often than annually, the annual payment result (calculated
above) is divided by the number of payments due each year. The
specified period must be at least 10 years but, for IRA Rollover
Contracts, not greater than your life expectancy factor.
(c) Specified Percentage -- payments of a designated percentage. The
specified percentage chosen cannot be greater than 10% of the
Certificate Holder's Account Value. The percentage elected may be
changed every six months. Each annual distribution is determined by
multiplying the Certificate Holder's Account Value by the percentage
chosen. The value used in this calculation is the value on the December
31st of the year prior to the year for which the payment is being made.
For payments made more often than annually, the annual payment result
(calculated above) is divided by the number of the payments due each
year.
Note: For an IRA Rollover Contract, the annual minimum SWO distribution, or
maximum SWO time period, as you direct, will be determined by a life expectancy
factor from tables designated by the IRS. Under both the Specified Payment and
Specified Period payment methods, a higher amount will be paid in any year, if
required under the Code's minimum distribution rules. For the initial
distribution year, we will calculate the amount paid based on your single life
expectancy determined from Table V of Section 1.72-9 of the Income Tax
Regulations. For each year thereafter, we will use the life expectancy for the
previous year reduced by one.
ANNUITY PERIOD
ANNUITY PERIOD ELECTIONS
You must notify us in writing of the Annuity Date and Annuity option elected.
The Certificate Holder's Account will continue in the Accumulation Period until
the Annuity Date. Once Annuity Payments start, the Annuity Date and Annuity
Option cannot be changed. Payments may not begin earlier than one year after
purchase, or later than the later of: (a) the first day of the month following
the Annuitant's 85th birthday, or (b) the tenth anniversary of the last
Purchase Payment. As required by the Code,
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distributions from an IRA Rollover Contract must begin no later than April 1 of
the calendar year after the calendar year in which you attain age 70 1/2. (This
distribution requirement can be satisfied with annuity payments or ECO.)
At least 30 days before the Annuity Date, you must notify us in writing to
elect or change (a) the date on which Annuity payments are to begin, (b) the
Annuity option, (c) whether the payments are to be made monthly, quarterly,
semiannually or annually, and (d) the investment option(s) to be used to
provide Annuity payments (i.e., a fixed annuity using the general account,
Aetna Variable Fund, Aetna Income Shares, Aetna Investment Advisers Fund, Inc.,
or any combination thereof). No other Funds may currently be used as investment
options during the Annuity Period. Once Annuity Payments begin, the Annuity
Option may not be changed, nor may transfers be made among funding options.
Annuity payments are based on the Annuitant's adjusted age (and joint
Annuitant's if elected), the payment rate for the Selected Annuity option, and
the amount applied to the Annuity Option. The Annuitant's adjusted age is his
or her age as of the birthday closest to the date of the first Annuity payment,
reduced by one year for Annuity start dates occurring during the period from
July 1, 1993 through December 31, 1999. The Annuitant's age (and joint
Annuitant's, if applicable) will be reduced by two years for Annuity start
dates occurring during the period from January 1, 2000 through December 31,
2009. The Annuitant's adjusted age (and joint Annuitant's, if applicable) will
be reduced by one additional year for Annuity start dates in each succeeding
decade.
If Annuity payments are elected on a variable basis, the first and subsequent
Annuity payments will also depend on the assumed net investment rate (3 1/2%
annually, unless a 5% annual rate is elected). Use of the 3 1/2% assumed rate
causes a lower first payment, but subsequent payments would increase more
rapidly or decline more slowly as changes occur in the net investment rate. A
5% rate causes a higher first payment, but Annuity payments will increase
thereafter only to the extent that the net investment rate exceeds 5% annually.
Annuity payments would decline if the rate were below 5%. The first Annuity
payment determines the number of Annuity Units into which Accumulation Units
are converted on the Annuity Date. Annuity Unit Values are calculated like
Accumulation Unit Values except that they also take into account a factor
reflecting the assumed net investment rate. The dollar value of Annuity Unit
Values and Annuity Payments may go up or down due to investment performance.
No election may be made that would result in a first Annuity payment of less
than $50 or total yearly Annuity payments of less than $250 (less if required
by state law). If the Certificate Holder's Account Value on the Annuity start
date is insufficient to elect an option for the minimum amount specified, a
lump-sum payment must be elected. We reserve the right to increase the minimum
first Annuity payment amount and the minimum annual Annuity payment amount
based on increases reflected in the Consumer Price Index-Urban (CPI-U), since
July 1, 1993.
For IRA Rollover Contracts, in determining the amount of Annuity payments, we
must satisfy the minimum distribution incidental death benefit rule described
in IRS regulations. This rule assures that any death benefits payable are
incidental to the primary purpose of the Contract, which is to provide you with
retirement benefits. The amount to be distributed under this rule is determined
based on your age and tables contained in the IRS regulations.
When payments start, the age of the Annuitant plus the number of years for
which payments are guaranteed must not exceed 95.
ANNUITY OPTIONS
LIFETIME:
(a) Life Annuity -- an Annuity with payments guaranteed to the date of the
Annuitant's death. This option may be elected with payments guaranteed
for a minimum of 5, 10, 15 or 20 years.
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Because it provides a specified minimum number of Annuity payments, the
election of a guaranteed payment period results in somewhat lower
payment than if a Life Annuity with no specified number of guaranteed
payments had been elected.
(b) Life Income Based Upon the Lives of Two Payees -- An Annuity will be
paid during the lives of the Annuitant and a second Annuitant. Payments
will continue until both Annuitants have died. When this option is
chosen, a choice must be made of:
(i) 100% of the payment to continue after the first death;
(ii) 66 2/3% of the payment to continue after the first death;
(iii) 50% of the payment to continue after the first death;
(iv) Payments for a minimum of 120 months, with 100% of the payment to
continue after the first death; or
(v) 100% of the payment to continue at the death of the second Annuitant
and 50% of the payment to continue at the death of the Annuitant.
Because (iv) provides a specified minimum number of Annuity payments,
the election of the guaranteed payment period results in somewhat lower
payments.
Payments under any lifetime Annuity option will be determined without regard to
the sex of the Annuitant(s). Such Annuity payments will be based solely on the
age of the Annuitant(s).
If a lifetime option is elected without a guaranteed minimum payment period, it
is possible that only one Annuity payment will be made if the Annuitant under
(a), or the surviving Annuitant under (b), (i), (ii), (iii) or (v), should die
prior to the due date of the second Annuity payment.
Once lifetime Annuity payments begin, you cannot elect to receive a lump-sum
settlement or change elections.
NONLIFETIME:
(a) Payments for a Stated Period of Time -- an Annuity with payments to be
made for five to 30 years, as selected. If this option is elected on a
variable basis, you may request at any time during the payment period
that the present value of all or any portion of the remaining variable
payments be paid in one sum. If elected on a fixed basis, you cannot
elect to receive a lump-sum settlement. However, any lump sum elected
before three years of payments have been completed will be treated as a
withdrawal during the Accumulation Period and any applicable deferred
sales charge will be assessed. (See "Charges and Deductions -- Deferred
Sales Charge.") Once an Annuity option is elected on either a variable
or fixed basis, you cannot change elections.
(b) Payment of Interest -- interest payments will be made to your
Beneficiary on all or a portion of the amount payable upon your death
prior to your electing an Annuity Option and allocated to this option.
Amounts under this option are held in our general account. Your
Beneficiary may withdraw any amount held under this option or direct
that any or all of the amount be applied to an Annuity Option.
We make a daily deduction for mortality and expense risks from any amounts held
on a variable basis. (See "Charges and Deductions -- Mortality and Expense Risk
Charges.") Therefore, electing the nonlifetime option on a variable basis will
result in a deduction being made even though we assume no mortality risk.
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We may also deduct a daily administrative charge from amounts held under the
variable options. The charge, established when a variable Annuity Option is
elected, will not exceed 0.25% per year of amounts held on a variable basis.
Once established the charge will be effective during the entire Annuity
Period.
In addition to the Annuity Options described, we may offer you and other
payees optional methods of payment.
DEATH BENEFIT
GENERAL
The following section provides information about determining the death benefit
amount, should you or the Annuitant die during the Accumulation Period.
Additional information is given for IRA Rollover Contracts and Nonqualified
Flexible Premium Contracts regarding the rights available and who receives
them in case of the death of you or the Annuitant. In many cases, the rights
available will depend on whether the Beneficiary is your spouse.
In many of the scenarios described below, a deadline is given for receiving
distributions equal to the Certificate Holder's Account Value. According to
the Code, the required amount must be distributed by the deadline given. If
not, the IRS will deem the Beneficiary to be in "constructive receipt" of the
amount, and the Beneficiary may be subject to a penalty tax in addition to any
other income tax due on the amount.
Upon the death of a Joint Certificate Holder prior to the Annuity Date, the
surviving Certificate Holder, if any, will be the designated beneficiary. Any
other beneficiary designation on record with the Company at the time of death
will be treated as a contingent beneficiary, and payments will be made to such
beneficiary only upon the death of the surviving Certificate Holder. Upon the
death of an Annuitant who is not a Certificate Holder, the Death Benefit
Amount will be paid to the beneficiary designated.
Note: We will not allow Annuity payments to a Beneficiary to extend beyond the
Beneficiary's life or any period certain greater than the Beneficiary's life
expectancy.
DEATH BENEFIT AMOUNT
If the Annuitant (or for the Nonqualified Flexible Premium Contract, you or
the Annuitant) dies before Annuity payments start, the Beneficiary is entitled
to a death benefit. The excess, if any, of the amount of the guaranteed death
benefit over the Certificate Holder's Account Value is determined as of the
date of death. Any excess amount will be deposited to the Certificate Holder's
Account and allocated to Aetna Variable Encore Fund as of the claim date. The
Certificate Holder's Account Value on the claim date plus any excess amount
deposited, becomes the Certificate Holder's Account Value. The claim date is
the date when we receive valid proof of death and the Beneficiary's claim at
our Home Office.
For Nonqualified Flexible Premium Contracts, the death benefit value is
determined as described in items (a), (b), (c) and (d) below. For IRA Rollover
Contracts, the death benefit value is determined as described in items (a),
(b) and (d) below.
(a) Death of Certificate Holder/Annuitant (for IRA Rollover Contracts) or
death of Annuitant (for Nonqualified Flexible Premium Contracts) less
than 75 years of age: The guaranteed death benefit value is the
greatest of:
(1) The Net Purchase Payment(s) made to the Certificate Holder's
Account minus the sum of all amounts withdrawn, applied to an
Annuity, or deducted from the Certificate Holder's Account;
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(2)(i)In jurisdictions where regulatory approval has been received, the
highest step-up value as of the date of death. A step-up value
is determined on each anniversary of the Effective Date. Each
step-up value is calculated as the Certificate Holder's Account
Value on the Effective Date anniversary, increased by the amount
of any Purchase Payment(s) made, and decreased by the amount of
any partial withdrawals and/or amounts applied to an Annuity
Option since the Effective Date anniversary;
(ii) In jurisdictions where regulatory approval for (a)(2)(i) above
has NOT been received, the value will be the step-up value as
of the date of death, minus the total of all partial
withdrawals, amounts applied to an Annuity and deductions made
from the Certificate Holder's Account since determination of
the step-up value. The step-up value is the Certificate
Holder's Account Value on the most recent seventh year
anniversary of the date the Net Purchase Payment was applied.
(3) The Certificate Holder's Account Value as of the date of death.
The excess, if any, of the guaranteed death benefit value over the
Certificate Holder's Account Value is determined as of the date of
death. Any excess amount will be deposited and allocated to Aetna
Variable Encore Fund as of the claim date. The Certificate Holder's
Account Value on the claim date plus any excess amount deposited
becomes the Certificate Holder's Account Value.
(b)Death of Certificate Holder/Annuitant (for IRA Rollover Contracts) or
death of Annuitant (for Nonqualified Flexible Premium Contracts) age 75 or
greater: The death benefit is the greatest of:
(1) The Net Purchase Payments made to the Certificate Holder's Account
minus the sum of all amounts withdrawn, applied to an Annuity, or
deducted from the Certificate Holder's Account;
(2) The highest step-up value as of the Participant's 75th birthday.
The step-up value is calculated as described in (a)(2)(i) above. In
jurisdictions where regulatory approval for (a)(2)(i) has not been
received, the value will be the step-up value as of the
Participant's 75th birthday, determined as described in (a)(2)(ii)
above;
(3) The Certificate Holder's Account Value as of the date of death.
(c) Death of the Certificate Holder if the Certificate Holder is not the
Annuitant (Nonqualified Flexible Premium Contracts only): The death
benefit amount is the Adjusted Account Value on the Claim Date. A
deferred sales charge may apply to any full or partial withdrawal. (See
"Charges and Deductions -- Deferred Sales Charge.")
(d) Death of a Spousal Beneficiary: In the case of a spousal beneficiary
who continued the Account in his or her own name, the death benefit
shall be equal to the Certificate Holder's Account Value, less any
applicable deferred sales charge on any Purchase Payment(s) made after
we receive proof of death.
For amounts held in the Guaranteed Account: The death benefit, if paid within
six months of the date of the Annuitant's death, is the greater of the
Certificate Holder's Account Value or the aggregate market value adjusted (MVA)
amount. If paid after the six-month period, the death benefit will be the
aggregate Market Value Adjustment amount. The aggregate Market Value Adjustment
amount may be more or less than the Certificate Holder's Account Value.
DEATH BENEFIT OPTIONS AVAILABLE TO BENEFICIARY UNDER A NONQUALIFIED FLEXIBLE
PREMIUM CONTRACT
Under a Nonqualified Flexible Premium Contract, prior to any election, the
Certificate Holder's Account Value will remain in the Certificate Holder's
Account and the Certificate Holder's Account Value will
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continue to be affected by the investment performance of the investment
option(s) selected. The Beneficiary has the right to allocate or transfer any
amount to any available investment options (subject to a Market Value
Adjustment, as applicable). The Code requires that distributions begin within a
certain time period as described below; failure to commence distribution within
those time periods can result in tax penalties. The following options are
available to the Beneficiary:
(a) When you are the Annuitant and you die:
(1) If the Beneficiary is the surviving spouse, the Beneficiary will
become the successor Certificate Holder. The successor Certificate
Holder may exercise all Certificate Holder rights under the
Contract and continue in the Accumulation Period, or may elect (i),
(ii), or (iii) below. Under the Code, distributions are not
required until the successor Certificate Holder's death. The
Beneficiary may:
(i) Apply some or all of the Adjusted Account Value to any of the
Annuity options. The amount of payout will depend on the annuity
option elected and the investment option(s) used to provide such
payments. The proceeds are taxed in the same manner as annuity
payments. See "Tax Status."
(ii) Elect to have some or all of the Adjusted Account Value
deposited in the Company's general account, earning the then-
current interest rate which may be changed from time to time.
The Beneficiary may elect to receive monthly, quarterly,
semiannual or annual interest payments. The balance on deposit
can be withdrawn at any time or applied to any Annuity option.
The principal amount is guaranteed, but interest payments may
vary; or
(iii) Request, at any time, a lump-sum payment equal to all or a
portion of the Adjusted Account Value.
Under (ii) and (iii) above, payments are taxed as surrenders as they
are received.
(2) If the Beneficiary is not your surviving spouse, he or she may
exercise all Contract or Certificate Holder rights and continue in
the Accumulation Period or may elect option (i), (ii), or (iii)
under (1) above. According to the Code, any portion of the Adjusted
Account Value not applied to an Annuity option (other than the
Nonlifetime Payment of Interest) within one year of your death,
must be paid within five years after your death.
(3) If no Beneficiary exists, a lump-sum payment equal to the Adjusted
Account Value will be made to your estate.
Note: If SWO has been elected, SWO payments to the Beneficiary may be
continued, unless the Beneficiary elects otherwise. Any payments elected must
be made at least as frequently as those made prior to your death.
(b) When you are not the Annuitant and you die:
(1) If the Beneficiary is your surviving spouse, he or she will become
the successor Certificate Holder. The successor Certificate Holder
may exercise all your rights under the Contract and continue in the
Accumulation Period, or may elect (i), (ii), or (iii) below. Under
the Code, distributions are not required until the successor
Certificate Holder's death. The Beneficiary may elect to:
(i) Apply some or all of the Adjusted Account Value to any of the
Annuity options. The amount of payout will depend on the annuity
option elected and the investment option(s) used to provide such
payments. The proceeds are taxed in the same manner as annuity
payments;
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(ii) Elect to have some or all of the Surrender Value deposited in
the Company's general account, earning the then-current
interest rate which may be changed from time to time. The
Beneficiary may elect to receive monthly, quarterly, semiannual
or annual interest payments. The balance on deposit can be
withdrawn at any time or applied to any Annuity option. The
principal amount is guaranteed, but interest payments may vary;
or
(iii) Request, at any time, a lump-sum payment equal to all or a
portion of the Surrender Value.
Under (ii) and (iii) above, payments are taxed as surrenders as they
are received.
(2) If the Beneficiary is not your surviving spouse, he or she may
elect option (i), (ii), or (iii) under (1) above. According to the
Code, any portion of the Adjusted Account Value not applied to one
of the Annuity options (other than the Nonlifetime Payment of
Interest) within one year of your death and must be paid within
five years after your death. This amount will be subject to a
deferred sales charge, if applicable.
(3) If no Beneficiary exists, a lump-sum payment equal to the Surrender
Value will be made to your estate.
Note: If SWO has been elected, the payments to the Beneficiary may be
continued, unless the Beneficiary elects otherwise. Any payments elected must
be made at least as frequently as those made prior to your death.
(c) When you are not the Annuitant and the Annuitant dies: the Beneficiary
must elect an Annuity option (see "Annuity Options") other than the
Nonlifetime Payment of Interest within 60 days of the date of death.
DEATH BENEFIT OPTIONS AVAILABLE TO BENEFICIARY UNDER AN IRA ROLLOVER CONTRACT
Under an IRA Rollover Contract, prior to any election, the Certificate
Holder's Account Value will be retained in the Certificate Holder's Account
and the Certificate Holder's Account Value will continue to be affected by the
investment performance of the investment option(s) selected. Under the Code,
distributions must begin within a certain time period. If no elections are
made, no distributions will be made. Failure to commence distributions within
the time periods stated below can result in tax penalties. The following
options are available to the Beneficiary:
(a) If the Beneficiary is your surviving spouse, he or she may exercise all
rights under the Contract and continue in the Accumulation Period, or
may elect (1), (2), or (3) below. Under the Code, distributions are not
required until December 31st of the year in which you would have
attained age 70 1/2. The Beneficiary may elect to:
(1) Apply some or all of the Adjusted Account Value to the Annuity
options. The amount of payout will depend on the annuity option
elected and the investment option(s) used to provide such payments;
(2) Elect to have some or all of the Adjusted Account Value deposited
in the Company's general account, earning the then-current interest
rate which may be changed from time to time. The Beneficiary may
elect to receive monthly, quarterly, semiannual or annual interest
payments. The balance on deposit can be withdrawn at any time, or
applied to any Annuity option. The principal amount is guaranteed,
but interest amounts may vary; or
(3) Receive, at any time, a lump-sum payment equal to all or any
portion of the Adjusted Account Value.
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In general, regardless of the method of payment, payments received by
your Beneficiaries after your death are taxed in the same manner as if
you had received those payments. See "Tax Status."
Note: If ECO is in effect when you die, your surviving spouse can elect to
continue receiving ECO payments if a joint life expectancy was chosen.
Otherwise, your surviving spouse must receive a lump-sum payment of the
Adjusted Account Value. If SWO is in effect and you die before your required
beginning date for minimum distributions the SWO payments will stop and your
surviving spouse may elect (1), (2) or (3) above. If SWO is in effect and you
die after your required beginning date for minimum distributions, your
surviving spouse can elect to continue SWO payments. Otherwise, your spouse
must elect to receive a lump sum payment equal to the Adjusted Account Value.
(b) If the Beneficiary is other than your surviving spouse, and ECO is not
in effect when you die, he or she may exercise all rights under the
Certificate Holder's Account and continue in the Accumulation Period or
may elect option (1), (2), or (3) under (a) above. Any portion of the
Adjusted Account Value that is not applied to an Annuity Option (other
than the Nonlifetime Payment of Interest) by December 31st of the year
following the year of your death must be distributed by December 31st
of the year containing the fifth anniversary of your date of death.
Note: If ECO or SWO is in effect when you die, the Beneficiary must receive an
automatic and immediate lump-sum payment of the Adjusted Account Value.
(c) If no Beneficiary exists, a lump-sum payment equal to the Adjusted
Account Value will be made to your estate.
TAX STATUS
INTRODUCTION
The following discussion is a general discussion of federal income tax
considerations relating to the Contract and is not intended as tax advice. This
discussion is not intended to address the tax consequences resulting from all
of the situations in which a person may be entitled to or may receive a
distribution under the Contract. Any person concerned about these tax
implications should consult a competent tax adviser before initiating any
transaction. This discussion is based upon the Company's understanding of the
present federal income tax laws as they are currently interpreted by the
Internal Revenue Service ("IRS"). No representation is made as to the
likelihood of the continuation of the present federal income tax laws or of the
current interpretation by the IRS. Moreover, no attempt has been made to
consider any applicable state or other tax laws.
The Nonqualified Flexible Premium Contract is purchased on a non-tax qualified
basis. The IRA Rollover Contract is purchased and used in connection with
certain arrangements entitled to special income tax treatment under section 408
of the Code. The ultimate effect of federal income taxes on the amounts held
under a Contract, on Annuity Payments, and on the economic benefit to the
Certificate Holder, the Annuitant, or the Beneficiary may depend on the tax
status of the individual concerned.
TAXATION OF THE COMPANY
The Company is taxed as a life insurance company under the Code. Since the
Separate Account is not an entity separate from the Company, and its operation
forms a part of the Company, it will not be taxed
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separately as a "regulated investment company" under Subchapter M of the Code
or as any other Separate entity. Investment income and capital gains are
automatically applied to increase reserves under the Contracts. Under existing
federal income tax law, the Company believes that the Separate Account
investment income and net capital gains will not be taxed to the extent that
such income and gains are applied to increase the reserves under the
Contracts.
Accordingly, the Company does not anticipate that it will incur any federal
income tax liability attributable to the Separate Account and, therefore, the
Company does not intend to make provisions for any such taxes. However, if
changes in the federal tax laws or interpretations thereof result in the
Company being taxed on income or gains attributable to the Separate Account,
then the Company may impose a charge against the Separate Account (with
respect to some or all Contracts) in order to set aside provisions to pay such
taxes.
TAX STATUS OF THE CONTRACT
DIVERSIFICATION: Section 817(h) of the Code requires that with respect to
Nonqualified Flexible Premium Contracts, the investments of the Funds be
"adequately diversified" in accordance with Treasury Regulations in order for
the Contracts to qualify as annuity contracts under federal tax law. The
Separate Account, through the Funds, intends to comply with the
diversification requirements prescribed by the Treasury in Reg. Sec. 1.817-5,
which affects how the Funds' assets may be invested.
In certain circumstances, owners of variable annuity contracts may be
considered the owners, for federal income tax purposes, of the assets of the
separate accounts used to support their contracts. In these circumstances,
income and gains from the separate account assets would be includible in the
variable contract owner's gross income. The IRS has stated in published
rulings that a variable contract owner will be considered the owner of
separate account assets if the contract owner possesses incidents of
investment control over the assets. The ownership rights under the contract
are similar to, but different in certain respects from those described by the
IRS in rulings in which it was determined that contract owners were not owners
of separate account assets. For example, a Certificate Holder has additional
flexibility in allocating premium payments and account values. In addition,
the number of funds provided under the Contract is significantly greater than
the number of funds offered in contracts on which rulings have been issued.
These differences could result in a Certificate Holder being treated as the
owner of a pro rata portion of the assets of the Separate Account. The Company
reserves the right to modify the Contract as necessary to attempt to prevent a
Certificate Holder from being considered the owner of a pro rata share of the
assets of the Separate Account.
REQUIRED DISTRIBUTION: In order to be treated as an annuity contract for
federal income tax purposes, section 72(s) of the Code requires nonqualified
contracts to provide that (a) if any Certificate Holder dies on or after the
annuity date but prior to the time the entire interest in the Contract has
been distributed, the remaining portion of such interest will be distributed
at least as rapidly as under the method of distribution being used as of the
date of such owner's death; and (b) if any Certificate Holder dies prior to
the annuity date, the entire interest in the Contract will be distributed
within five years after the date of such Certificate Holder's death. These
requirements will be considered satisfied as to any portion of a Certificate
Holder's interest which is payable to or for the benefit of a "designated
beneficiary" and which is distributed over the life of such "designated
beneficiary" or over a period not extending beyond the life expectancy of that
beneficiary, provided that such distributions begin within one year of the
Certificate Holder's death. The "designated beneficiary" refers to a natural
person designated by the Certificate Holder as a Beneficiary and to whom
ownership of the contract passes by reason of death. However, if the
"designated beneficiary" is the surviving spouse of the deceased Certificate
Holder, the contract may be continued with the surviving spouse as the new
Certificate Holder.
The Nonqualified Flexible Premium Contracts contain provisions which are
intended to comply with the requirements of section 72(s) of the Code,
although no regulations interpreting these requirements have
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yet been issued. The Company intends to review such provisions and modify them
if necessary to assure that they comply with the requirements of Code section
72(s) when clarified by regulation or otherwise. Other rules may apply to IRA
Rollover Contracts.
The following discussion is based on the assumption that the Contract qualifies
as an annuity contract for federal income tax purposes.
TAXATION OF ANNUITIES
IN GENERAL: Section 72 of the Code governs taxation of annuities in general.
The Company believes that a Certificate Holder who is a natural person
generally is not taxed on increases in the Contract Value until distribution
occurs by withdrawing all or part of such Contract Value (e.g., withdrawals or
Annuity payments under the Annuity Option elected). The assignment, pledge, or
agreement to assign or pledge any portion of the Value generally will be
treated as a distribution. The taxable portion of a distribution (in the form
of a single sum payment or an annuity) is taxable as ordinary income.
The following discussion generally applies to a Contract owned by a natural
person.
WITHDRAWALS: In the case of a withdrawal under an IRA Rollover Contract,
including withdrawals under SWO or ECO, the amount taxable is generally based
on the ratio of the "investment in the contract" to Contract Value. The
"investment in the contract" generally equals the amount of any nondeductible
Purchase Payments paid by or on behalf of any individual less any amount
received previously which was excludable from gross income. For an IRA Rollover
Contract, the "investment in the contract" can be zero. Special tax rules may
be available for certain distributions from an IRA Rollover Contract.
With respect to Nonqualified Flexible Premium Contracts, partial withdrawals,
including withdrawals under SWO, are generally treated as taxable income to the
extent that the Contract Value immediately before the withdrawal exceeds the
"investment in the contract" at that time. The Contract Value immediately
before a withdrawal may have to be increased by any positive market value
adjustment (MVA) that results from such a withdrawal. There is, however, no
definitive guidance on the proper tax treatment of MVAs in these circumstances,
and a Certificate Holder should contact a competent tax advisor with respect to
the potential tax consequences of any MVA that arises as a result of a partial
withdrawal.
Full withdrawals of a Nonqualified Flexible Premium Contract are treated as
taxable income to the extent that the amount received exceeds the "investment
in the contract."
ANNUITY PAYMENTS: Although the tax consequences may vary depending on the
Annuity payment elected under the Contract, in general, only the portion of the
Annuity payment that represents the amount by which the Contract Value exceeds
the "investment in the contract" will be taxed; after the "investment in the
contract" is recovered, the full amount of any additional Annuity payments is
taxable. For Variable Annuity payments, the taxable portion is generally
determined by an equation that establishes a specific dollar amount of each
payment that is not taxed. The dollar amount is determined by dividing the
"investment in the contract" by the total number of expected periodic payments.
However, the entire distribution will be taxable once the recipient has
recovered the dollar amount of his or her "investment in the contract." For
Fixed Annuity payments, in general there is no tax on the portion of each
payment which represents the same ratio that the "investment in the contract"
bears to the total expected value of the Annuity payments for the term of the
payments; however, the remainder of each Annuity payment is taxable. Once the
"investment in the contract" has been fully recovered, the full amount of any
additional Annuity payments is taxable. If Annuity payments cease as a result
of an Annuitant's death before full recovery of the "investment in the
contract," consult a competent tax advisor regarding deductibility of the
unrecovered amount.
37
<PAGE>
PENALTY TAX: In the case of a distribution pursuant to a Nonqualified Flexible
Premium Contract, there may be imposed a federal income tax penalty equal to
10% of the amount treated as taxable income. In general, however, there is no
penalty tax on distributions: (1) made on or after the date on which the
taxpayer attains age 59 1/2; (2) made as a result of death or disability of a
Certificate Holder; (3) received in substantially equal periodic payments as a
life annuity or a joint and survivor annuity for the lives or life expectancies
of the Certificate Holder and a "designated beneficiary." Other tax penalties
may apply to certain distributions pursuant to an IRA Rollover Contract.
TAXATION OF DEATH BENEFIT PROCEEDS: Amounts may be distributed from the
Contract because of the death of a Certificate Holder or the Annuitant.
Generally, such amounts are includible in the income of the recipient as
follows: (1) if distributed in a lump sum, they are taxed in the same manner as
a full surrender as described above, or (2) if distributed under an Annuity
Option, they are taxed in the same manner as Annuity payments, as described
above.
TRANSFERS, ASSIGNMENTS, OR EXCHANGES OF THE CONTRACT: A transfer of ownership
of a Contract, the designation of an Annuitant, Payee or other Beneficiary who
is not also a Certificate Holder, the selection of certain Annuity Dates, or
the exchange of a Contract may result in certain tax consequences that are not
discussed herein. Anyone contemplating any such designation, transfer,
assignment, selection, or exchange should contact a competent tax adviser with
respect to the potential tax effects of such a transaction. An IRA Rollover
Contract may not be assigned.
MULTIPLE CONTRACTS: All deferred nonqualified annuity contracts that are issued
by the Company (or its affiliates) to the same owner during any calendar year
are treated as one annuity contract for purposes of determining the amount
includible in gross income under section 72(e) of the Code. In addition, the
Treasury Department has specific authority to issue regulations that prevent
the avoidance of section 72(e) through the serial purchase of annuity contracts
or otherwise. Congress has also indicated that the Treasury Department may have
authority to treat the combination purchase of an immediate annuity contract
and separate deferred annuity contracts as a single annuity contract under its
general authority to prescribe rules as may be necessary to enforce the income
tax laws.
IRA ROLLOVER CONTRACTS
IN GENERAL: The qualified contract is designed for use as an Individual
Retirement Annuity. The tax rules applicable to participants and beneficiaries
in Individual Retirement Annuities are complex. Special favorable tax treatment
may be available for certain types of contributions and distributions. Adverse
tax consequences may result from contributions in excess of specified limits;
distributions prior to age 59 1/2 (subject to certain exceptions);
distributions that do not conform to specified commencement and minimum
distribution rules; aggregate distributions in excess of a specified annual
amount; and in other specified circumstances.
INDIVIDUAL RETIREMENT ANNUITIES: Section 408 of the Code permits eligible
individuals to contribute to an individual retirement program known as an
Individual Retirement Annuity or Individual Retirement Account, each
hereinafter referred to as an "IRA." Also, distributions from certain other
types of qualified plans may be "rolled over" on a tax-deferred basis into an
IRA. The sale of a contract for use with an IRA may be subject to special
disclosure requirements of the Internal Revenue Service. Purchasers of a
Contract for use with IRAs will be provided with supplemental information
required by the Internal Revenue Service or other appropriate agency. Such
purchasers will have the right to revoke their purchase within 7 days of the
earlier of the establishment of the IRA or their purchase. A Contract issued in
connection with an IRA will be amended as necessary to conform to the
requirements of the Code. Purchasers should seek competent advice as to the
suitability of the Contract for use with IRAs.
38
<PAGE>
WITHHOLDING
Pension and annuity distributions generally are subject to withholding for the
recipient's federal income tax liability at rates that vary according to the
type of distribution and the recipient's tax status. Recipients, however,
generally are provided the opportunity to elect not to have tax withheld from
distributions.
POSSIBLE CHANGES IN TAXATION
In past years, legislation has been proposed that would have adversely modified
the federal taxation of certain annuities. For example, one such proposal would
have changed the tax treatment of nonqualified annuities that did not have
"substantial life contingencies" by taxing income as it is credited to the
annuity. Although as of the date of this prospectus Congress is not actively
considering any legislation regarding the taxation of annuities, there is
always the possibility that the tax treatment of annuities could change by
legislation or other means (such as IRS regulations, revenue rulings, judicial
decisions, etc.). Moreover, it is also possible that any change could be
retroactive (that is, effective prior to the date of the change).
OTHER TAX CONSEQUENCES
As noted, above, the foregoing discussion of the federal income tax
consequences is not exhaustive and special rules are provided with respect to
other tax situations not discussed in this Prospectus. Further, the federal
income tax consequences discussed herein reflect the Company's understanding of
the current law and the law may change. Federal estate and gift tax
consequences of ownership or receipt of distributions under the Contract depend
on the individual circumstances of each Certificate Holder or recipient of a
distribution. A competent tax adviser should be consulted for further
information.
MISCELLANEOUS
VOTING RIGHTS
Each Contract Holder may direct us in the voting of shares at shareholders'
meetings of the appropriate Fund(s). The number of votes to which each Contract
Holder may give direction will be determined as of the record date. The number
of votes each Contract Holder is entitled to direct with respect to a
particular Fund during the Accumulation Period equals the portion of the
Certificate Holder's Account Value(s) of the Contract attributable to that
Fund, divided by the net asset value of one share of that Fund. During the
Annuity Period, the number of votes is equal to the Valuation Reserve for the
portion of the Contract attributable to that Fund, divided by the net asset
value of one share of that Fund. In determining the number of votes, fractional
votes will be recognized. Where the value of the Contract or Valuation Reserve
relates to more than one Fund, the calculation of votes will be performed
separately for each Fund.
If you are a Certificate Holder under a group Contract, you have a fully vested
(100%) interest in the benefits provided to you under your Certificate Holder's
Account. Therefore, you may instruct the group Contract Holder how to direct
the Company to cast the votes for the portion of the value or Valuation Reserve
attributable to your Certificate Holder's Account. Votes attributable to those
Certificate Holders who do not instruct the group Contract Holder will be cast
by the Company in the same proportion as votes for which instructions have been
received by the group Contract Holder. Votes attributable to individual or
group Contract Holders who do not direct us will be cast by us in the same
proportion as votes for which directions we have received.
You will receive a notice of each meeting of shareholders, together with any
proxy solicitation materials, and a statement of the number of votes
attributable to your Certificate Holder's Account.
39
<PAGE>
MODIFICATION OF THE CONTRACT
The Company may modify the Contract when it deems an amendment appropriate,
subject to the limitations described below, by notifying the Contract Holder in
writing 30 days before the effective date of the change. The following Contract
provisions are considered material by the Company and cannot be changed without
the approval of appropriate state or federal regulatory authorities:
(a) transfers among investment options;
(b) notification to the Contract Holder;
(c) conditions governing payments of surrender values;
(d) terms of Annuity Options;
(e) death benefit payments; and
(f) contract charges
In addition, changes to the items listed below will apply only to new
Certificate Holders Accounts established under a group Contract, or individual
Contracts issued after the effective date of the change:
(a) the Annuity Options;
(b) the contractual promise that no deduction will be made from the
Purchase Payment for sales or administrative expenses;
(c) increasing the deferred sales charges;
(d) increasing the mortality and expense risk charges;
(e) increasing the administrative charge;
(f) the right to make transfers; and
(g) the Guaranteed Account Guaranteed Rate.
Modification of items (b) through (e) above specifically require authorization
by the SEC to the extent that the proposed charges are not currently authorized
by existing orders issued to us by the SEC.
If the group Contract Holder has not accepted the proposed change at the time
the amendment becomes effective, no new Certificate Holder's Accounts may be
opened under the group Contract.
No modification may affect any Annuity beginning before the effective date of
the change unless deemed necessary for the Contract to comply with the
requirements of the Code or other laws and regulations affecting the Contract.
INQUIRIES
You may direct inquiries by writing directly to us at the address shown on the
cover page of this prospectus or by calling 1-800-531-4547.
TELEPHONE TRANSFERS
You automatically have the right to make transfers among Funds by telephone.
The Company has enacted procedures to prevent abuses of Certificate Holder's
Account transactions by telephone. The procedures include requiring the use of
a personal identification number (PIN) in order to execute transactions. You
are responsible for safeguarding your PIN, and for keeping your Account
information confidential. If the Company fails to follow these procedures it
would be liable for any losses to your Certificate Holder's Account resulting
from the failure. To ensure authenticity, the Company records all calls on the
800 line.
40
<PAGE>
TRANSFER OF OWNERSHIP; ASSIGNMENT
Assignments or transfers of ownership of an IRA Rollover Contract are not
allowed except as permitted under Code Section 408(d)(6), coincident to a
divorce. We will accept assignments or transfers of ownership of a Nonqualified
Flexible Premium Contract, with proper notification. The date of any such
transfer will be the date we receive the notification at our Home Office. Refer
to "Tax Status of Distributions" for general tax information. If you are
contemplating a transfer of ownership or assignment you should consult a tax
adviser due to the potential for tax liability.
LEGAL PROCEEDINGS
We know of no material legal proceedings pending to which the Separate Account
is a party or which would materially affect the Separate Account.
LEGAL MATTERS
The validity of the securities offered by this Prospectus has been passed upon
by Susan E. Bryant, Esq., Counsel to the Company.
41
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION -- TABLE OF CONTENTS
The following items are the contents of the Statement of Additional
Information:
<TABLE>
<S> <C>
General Information and History............................................. 2
Variable Annuity Account I.................................................. 2
Offering and Purchase of Contracts.......................................... 3
Performance Data............................................................ 3
General................................................................... 3
Average Annual Total Return Quotations.................................... 4
Annuity Payments............................................................ 5
Dollar-Cost Averaging....................................................... 7
Sales Material.............................................................. 7
Independent Auditors........................................................ 7
Financial Statements of the Company......................................... F-1
</TABLE>
42
<PAGE>
APPENDIX
GUARANTEED ACCOUNT
THE GUARANTEED ACCOUNT IS A GUARANTEED INTEREST OPTION AVAILABLE DURING THE
ACCUMULATION PERIOD UNDER THE CONTRACTS DESCRIBED IN THIS PROSPECTUS. SINCE THE
GUARANTEED ACCOUNT IS A FUNDING OPTION UNDER THE CONTRACT, YOU SHOULD READ THE
ACCOMPANYING GUARANTEED ACCOUNT PROSPECTUS CAREFULLY BEFORE INVESTING. THIS
APPENDIX IS INTENDED AS A SUMMARY DESCRIPTION OF THE GUARANTEED ACCOUNT AND IS
NOT INTENDED AS A REPLACEMENT FOR THE GUARANTEED ACCOUNT PROSPECTUS.
The Guaranteed Account is a guaranteed interest option for which we guarantee
stipulated rates of interest for stated periods of time on amounts applied to
the Guaranteed Account. For guaranteed terms of one year or less, a guaranteed
rate is credited for the full term. For guaranteed rates of greater than one
year, the initial guaranteed rate is credited from the date of deposit to the
end of a specified period within the guaranteed term. The interest rate
stipulated is an annual effective yield; that is, it reflects a full year's
interest. Interest is credited daily at a rate that will provide the guaranteed
annual effective yield over the period of one year. Guaranteed interest rates
will never be less than an annual effective rate of 3%.
During the deposit period, amounts may be applied to any of the available
guaranteed terms. Purchase Payments received after the initial payment will be
allocated in the same proportions as the last allocation, if no new allocation
instructions are received with the Purchase Payment. For amounts allocated to
the Guaranteed Account, if the same guaranteed term(s) are not available, the
next shortest term will be used. If no shorter guaranteed term is available,
the next longer guaranteed term will be used.
WITHDRAWALS
Except for withdrawals taken from the one-year Guaranteed Term in connection
with the Dollar Cost Averaging Program and withdrawals taken in connection with
an Estate Conservation or Systematic Withdrawal distribution option (where
state regulatory approval has been received), withdrawals or transfers from a
guaranteed term before the guaranteed term matures may be subject to a market
value adjustment ("MVA"). An MVA reflects the change in the value of the
investment due to changes in interest rates since the date of deposit. When
interest rates increase after the date of deposit, the value of the investment
decreases, and the MVA is negative. Conversely, when interest rates decrease
after the date of deposit, the value of the investment increases, and the MVA
is positive. It is possible that a negative MVA could result in you receiving
an amount that is less than the amount you allocated to the Guaranteed Account.
For partial withdrawals during the Accumulation Period, amounts to be withdrawn
from the Guaranteed Account will be withdrawn on a pro rata basis from each
group of deposits having the same length of time until the Maturity Date
("Guaranteed Term Group"). Within a Guaranteed Term Group, the amount will be
withdrawn first from the oldest Deposit Period, then from the next oldest, and
so on until the amount requested is satisfied.
MATURITY OF A GUARANTEED TERM
As a guaranteed term matures, assets accumulating under the Guaranteed Account
may be (a) transferred to a new guaranteed term, (b) transferred to any other
available investment options, or (c) withdrawn. Amounts withdrawn may be
subject to a deferred sales charge. If no direction is received by the Company
at its Home Office by the maturity date of a guaranteed term, the amount from
the maturing guaranteed term will be transferred to the current deposit period
for a similar length guaranteed term. If the same guaranteed term is no longer
available the next shortest guaranteed term
43
<PAGE>
available in the current deposit period will be used. If no shorter guaranteed
term is available, the next longer guaranteed term will be used.
If you do not provide instruction concerning the maturity value of a maturing
guaranteed term, the maturity value transfer provision applies. This provision
allows you to transfer without an MVA to available guaranteed terms of the
current deposit period or to other available investment options, or surrender
without an MVA (if applicable, a deferred sales charge is assessed on the
surrendered amount). The provision is available only during the calendar month
immediately following a guaranteed term maturity date and only applies to the
first transaction regardless of the amount involved in the transaction.
MORTALITY AND EXPENSE RISK CHARGES
We make no deductions from the credited interest rate for mortality and expense
risks; these risks are considered in determining the credited rate.
TRANSFERS
Amounts applied to a guaranteed term during a deposit period may not be
transferred to any other funding option or to another guaranteed term during
that deposit period or for 90 days after the close of that deposit period. This
does not apply to (1) amounts transferred on the Maturity Date or under the
maturity value transfer provision; (2) amounts transferred from the Guaranteed
Account before the Maturity Date due to the election of an Annuity option; (3)
amounts transferred from the one-year Guaranteed Term in connection with the
Dollar Cost Averaging Program; and (4) amounts distributed under the Estate
Conservation or Systematic Withdrawal distribution. Transfers after the 90-day
period are permitted from guaranteed term(s) to other guaranteed term(s)
available during a deposit period or to other available investment options.
Except for transactions described in items (1), (3) and (4) above, amounts
withdrawn or transferred from the Guaranteed Account prior to the maturity date
will be subject to a Market Value Adjustment. These waivers are subject to
regulatory approval and may not be available in all states. See your
representative to determine whether the waiver is approved in your state.
Transfers of Guaranteed Account values on or within one calendar month of a
term's maturity date are not counted as one of the 12 free transfers of
accumulated values in the Certificate Holder's Account.
The Certificate Holder may select a maximum of 18 different investment options
over the lifetime of the Contract. Under the Guaranteed Account, each
guaranteed term is counted as one investment option. If a guaranteed term
matures, and is renewed for the same term, it will not count as an additional
investment option.
DEATH BENEFIT
Full and partial withdrawals and transfers made from the Guaranteed Account
within six months after the date of the Annuitant's death will be the greater
of:
(a) The aggregate MVA amount (i.e., the sum of all market value adjusted
amounts calculated due to a withdrawal of amounts). This total may be
greater or less than the Certificate Holder's Account Value of those
amounts; or
(b) The applicable portion of the Certificate Holder's Account Value
attributable to the Guaranteed Account.
After the six-month period, the surrender or transfer amount will be
adjusted for the aggregate MVA amount, which may be greater or less than
the Certificate Holder's Account Value of those amounts.
44
<PAGE>
By notifying us at our Home Office at least 30 days before the Annuity Date,
you may elect to have amounts which have been accumulating under the Guaranteed
Account transferred to Aetna Variable Fund, Aetna Income Shares, Aetna
Investment Advisers Fund, Inc., or any combination thereof, to provide variable
Annuity payments. (The Guaranteed Account cannot be used as an investment
option during the Annuity Period.) Transfers made due to the election of a
lifetime Annuity Option will be subject to only a positive aggregate MVA.
REINSTATEMENT PRIVILEGE
Any amounts reinstated to the Guaranteed Account will be applied to the
available guaranteed terms of the current deposit period in the same proportion
as they were at the time of surrender. If a guaranteed term of the same time to
maturity is not available in the current deposit period, the funds will be
reinvested in a guaranteed term having the next shortest time to maturity. Any
negative MVA amount applied to a surrender is not included in the
reinstatement.
45
<PAGE>
- --------------------------------------------------------------------------------
VARIABLE ANNUITY ACCOUNT I
OF
AETNA INSURANCE COMPANY OF AMERICA
- --------------------------------------------------------------------------------
Statement of Additional Information dated , 1995
This Statement of Additional Information is not a prospectus and should be read
in conjunction with the current prospectus for Marathon Plus dated __________,
1995.
A free prospectus is available upon request from the local Aetna Insurance
Company of America office or by writing to or calling:
Aetna Insurance Company of America
Marathon Service Unit
151 Farmington Avenue
Hartford, Connecticut 06156
1-800-531-4547
Read the prospectus before you invest. Terms used in this Statement of
Additional Information shall have the same meaning as in the prospectus.
TABLE OF CONTENTS
Page
General Information and History........................................... 2
Variable Annuity Account I................................................ 2
Offering and Purchase of Contracts........................................ 3
Performance Data.......................................................... 3
General................................................................. 3
Average Annual Total Return Quotations.................................. 4
Annuity Payments.......................................................... 5
Dollar-Cost Averaging..................................................... 7
Sales Material............................................................ 7
Independent Auditors...................................................... 7
Financial Statements of Aetna Insurance Company of America................ F-1
1
<PAGE>
GENERAL INFORMATION AND HISTORY
Aetna Insurance Company of America (the "Company" or "AICA") is a stock life
insurance company which was organized in 1990 under the insurance laws of the
State of Connecticut. The Company is a wholly owned subsidiary of Aetna Life
Insurance and Annuity Company ("ALIAC"). ALIAC, in turn, is a wholly owned
subsidiary of Aetna Life and Casualty Company which, with its subsidiaries,
constitutes one of the nation's largest diversified financial services
organizations. The Company's Home Office is located at 151 Farmington Avenue,
Hartford, Connecticut 06156.
ALIAC, a registered broker-dealer under the Securities Exchange Act of 1934,
serves as the principal underwriter for Account I. ALIAC is also a registered
investment adviser under the Investment Advisers Act of 1940, and provides
investment advice to several of the registered management investment companies
offered as variable investment options under the Contracts funded by Account I
(see "Variable Annuity Account I" below).
Other than the mortality and expense risk charges and administrative expense
charge described in the prospectus, all expenses incurred in the operations of
the Separate Account are borne by the Company. See "Charges and Deductions" in
the prospectus. The Company receives reimbursement for certain administrative
costs from the Funds' investment adviser used as funding options under the
Contract.
The assets of the Separate Account are held by the Company. The Separate Account
has no custodian. However, the Funds in whose shares the assets of the Separate
Account are invested each have custodians, as discussed in their respective
prospectuses.
VARIABLE ANNUITY ACCOUNT I
Variable Annuity Account I (the "Separate Account") is a separate account
established by the Company for the purpose of funding variable annuity contracts
issued by the Company. The Separate Account is registered with the Securities
and Exchange Commission as a unit investment trust under the Investment Company
Act of 1940, as amended. The assets of the Separate Account will be invested
exclusively in shares of the mutual funds described in the Prospectus. Purchase
Payments made under the Contract may be allocated to one or more of the variable
investment options. The Company may make additions to or deletions from
available investment options as permitted by law. The availability of the Funds
is subject to applicable regulatory authorization. Not all Funds are available
in all jurisdictions or under all Contracts. The Funds currently available
under the Contract are as follows:
2
<PAGE>
Aetna Variable Fund Fidelity High Income Portfolio
Aetna Income Shares Fidelity Investment Grade Bond Portfolio
Aetna Variable Encore Fund Fidelity Index 500 Portfolio
Aetna Investment Advisers Fund, Inc. IMS-Equity Growth and Income Fund
Aetna Ascent Variable Portfolio IMS-Utility Fund
Aetna Crossroads Variable Portfolio IMS-U.S. Government Bond Fund
Aetna Legacy Variable Portfolio IMS-Corporate Bond Fund
Alger American Balanced Portfolio Janus Aspen Aggressive Growth Portfolio
Alger American Income and Growth Janus Aspen Balanced Portfolio
Portfolio
Alger American Growth Portfolio Janus Aspen Flexible Income Portfolio
Alger American MidCap Growth Portfolio Janus Aspen Growth Portfolio
Alger American Leveraged AllCap Janus Aspen Short-Term Bond Portfolio
Portfolio
Alger American Small Cap Portfolio Janus Aspen Worldwide Growth Portfolio
Fidelity Contrafund Portfolio Lexington Emerging Markets Fund
Fidelity Equity-Income Portfolio Lexington Natural Resources Trust
Fidelity Growth Portfolio TCI International
Fidelity Overseas Portfolio TCI Growth
Fidelity Asset Manager Portfolio TCI Balanced
Complete descriptions of each of the Funds, including their investment
objectives, policies, risks and fees and expenses, are contained in the
prospectuses and statements of additional information for each of the Funds.
OFFERING AND PURCHASE OF CONTRACTS
As principal underwriter, ALIAC offers the Contracts through life insurance
agents licensed to sell variable annuities who are registered representatives of
ALIAC or of other registered broker-dealers who have sales agreements with
ALIAC. The offering of the Contracts is continuous. A description of the
manner in which Contracts are purchased may be found in the prospectus under the
sections titled "Contract Purchase" and "Certificate Holder's Account Value."
PERFORMANCE DATA
GENERAL
From time to time, the Company may advertise different types of historical
performance for the variable options of the Separate Account available under the
Contracts issued by the Company which are described in the Prospectus. The
Company may advertise the "standardized average annual total returns,"
calculated in a manner prescribed by the Securities and Exchange Commission (the
"standardized return"), as well as the "non-standardized total return," both of
which are described below.
The standardized and non-standardized total return figures are computed
according to a formula in which a hypothetical initial Purchase Payment of
$1,000 is applied to the variable options under the Contract, and then related
to the ending redeemable values over one, three, five and ten year periods (or
3
<PAGE>
each period (e.g., mortality and expense risk charges, maintenance fees,
administrative charges, and deferred sales charges). These charges will be
deducted on a pro rata basis in the case of fractional periods. The maintenance
fee is converted to a percentage of assets based on the estimated average
account size under the Contracts.
The non-standardized figures will be calculated in a similar manner, except that
non-standardized figures will not reflect the deduction of any applicable
deferred sales charge (which would decrease the level of performance shown if
reflected in these calculations). The non-standardized figures may also include
a three year period.
For Funds that were in existence prior to the date the Fund became available
under the Contract, or the date on which the Separate Account commenced
operations, the standardized and non-standardized total returns may include
periods prior to the date on which such Fund became available under the
Contract. These figures are calculated by adjusting the actual returns of the
Fund to reflect the charges that would have been assessed under the Contract had
that Fund been available under the Contract during that period.
The total return quotations are based upon historical earnings and are not
necessarily representative of future performance. Investment results of the
Funds will fluctuate over time, and any presentation of the Funds' total return
quotations for any prior period should not be considered as a representation of
how the variable options will perform in any future period. Additionally, your
Contract Value upon redemption may be more or less than your original cost.
AVERAGE ANNUAL TOTAL RETURN QUOTATIONS - Standardized and Non-Standardized
The table shown below reflects the average annual standardized and non-
standardized total return quotation figures for the periods ended December 31,
1994 for the variable options available under the Contract.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
Fund
STANDARDIZED NON-STANDARDIZED Inception Date
---------------------------------------------------------------------------------------
1 Year 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Variable Fund (8.78)% 5.90% 12.48% (2.46)% 2.54% 6.44% 12.48% 04/30/75
- -------------------------------------------------------------------------------------------------------------------------------
Aetna Income Shares (11.56)% 5.98% 8.58% (5.23)% 2.73% 6.52% 8.58% 06/01/78
- -------------------------------------------------------------------------------------------------------------------------------
Aetna Variable Encore Fund (3.74)% 2.99% 4.92% 2.55% 2.11% 3.61% 4.92% 09/01/75
- -------------------------------------------------------------------------------------------------------------------------------
* *
Aetna Investment Advisers Fund, Inc. (8.16)% 5.68% 5.92% (1.85)% 3.66% 6.23% 6.39% 06/23/89
- -------------------------------------------------------------------------------------------------------------------------------
* *
Alger American Balanced Portfolio (12.03)% 2.55% 2.83% (5.69)% 2.60% 3.18% 3.40% 09/05/89
- -------------------------------------------------------------------------------------------------------------------------------
* *
Alger American Income and Growth (16.02)% 5.30% 5.54% (9.66)% 3.40% 5.85% N/A 11/14/88
Portfolio
- -------------------------------------------------------------------------------------------------------------------------------
* *
Alger American Growth Portfolio (6.36)% 13.24% 14.84% (0.06)% 10.11% 13.63% 15.10% 01/08/89
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
Fund
STANDARDIZED NON-STANDARDIZED Inception Date
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
* *
Alger American MidCap Growth Portfolio (9.33)% 15.45% N/A (3.01)% 18.71% N/A N/A 04/30/93
- -------------------------------------------------------------------------------------------------------------------------------
* *
Alger American Small Cap Portfolio (12.15)% 11.84% 17.55% (5.81)% 2.36% 12.26% 17.69% 09/20/88
- -------------------------------------------------------------------------------------------------------------------------------
* *
Fidelity Asset Manager Portfolio (13.82)% 8.60% 8.14% (7.47)% 6.76% 9.08% 8.59% 09/06/89
- -------------------------------------------------------------------------------------------------------------------------------
* *
Fidelity Equity-Income Portfolio (0.79)% 8.39% 9.36% 5.47% 12.29% 8.87% 9.36% 10/22/86
- -------------------------------------------------------------------------------------------------------------------------------
* *
Fidelity Growth Portfolio (7.80)% 8.76% 11.03% (1.49)% 7.65% 9.23% 11.03% 11/07/86
- -------------------------------------------------------------------------------------------------------------------------------
* *
Fidelity Overseas Portfolio (6.08)% 3.62% 5.48% 0.22% 6.06% 4.22% 5.48% 02/13/87
- -------------------------------------------------------------------------------------------------------------------------------
* *
Fidelity High Income Portfolio (9.39)% 11.92% 9.31% (3.07)% 11.75% 12.34% 9.31% 10/11/85
- -------------------------------------------------------------------------------------------------------------------------------
* *
Fidelity Investment Grade Bond Portfolio (11.53)% 4.93% 5.79% (5.20)% 2.89% 5.49% 6.11% 12/05/88
- -------------------------------------------------------------------------------------------------------------------------------
* *
Fidelity Index 500 Portfolio (6.77)% 3.54% N/A (0.46)% 5.67% N/A N/A 08/27/92
- -------------------------------------------------------------------------------------------------------------------------------
* *
IMS-Equity Growth and Income Fund (8.31)% N/A N/A (1.99)% N/A N/A N/A 02/10/94
- -------------------------------------------------------------------------------------------------------------------------------
* *
IMS-Utility Fund (11.48)% N/A N/A (5.14)% N/A N/A N/A 02/10/94
- -------------------------------------------------------------------------------------------------------------------------------
* *
IMS-U.S. Government Bond Fund (4.91)% N/A N/A 1.38% N/A N/A N/A 03/28/94
- -------------------------------------------------------------------------------------------------------------------------------
* *
IMS-Corporate Bond Fund (11.02)% N/A N/A (4.69)% N/A N/A N/A 03/01/94
- -------------------------------------------------------------------------------------------------------------------------------
* *
Janus Aspen Aggressive Growth Portfolio 8.71% 21.74% N/A 14.90% 26.11% N/A N/A 09/13/93
- -------------------------------------------------------------------------------------------------------------------------------
* *
Janus Aspen Balanced Portfolio (6.97)% (0.19)% N/A (0.67)% 4.60% N/A N/A 09/13/93
- -------------------------------------------------------------------------------------------------------------------------------
* *
Janus Aspen Flexible Income Portfolio (8.50)% (6.41)% N/A (2.19)% (1.50)% N/A N/A 09/13/93
- -------------------------------------------------------------------------------------------------------------------------------
* *
Janus Aspen Growth Portfolio (4.93)% (1.40)% N/A 1.36% 3.41% N/A N/A 09/13/93
- -------------------------------------------------------------------------------------------------------------------------------
* *
Janus Aspen Short-Term Bond Portfolio (6.88)% (5.46)% N/A (0.58)% (0.56)% N/A N/A 09/13/93
- -------------------------------------------------------------------------------------------------------------------------------
* *
Janus Aspen Worldwide Growth Portfolio (6.28)% 9.44% N/A 0.02% 14.04% N/A N/A 09/13/93
- -------------------------------------------------------------------------------------------------------------------------------
* *
Lexington Emerging Markets Fund (7.76)% N/A N/A (1.45)% N/A N/A N/A 03/31/94
- -------------------------------------------------------------------------------------------------------------------------------
* *
Lexington Natural Resources Trust (13.14)% (5.03)% (2.09)% (6.79)% 1.06% (4.15)% (1.39)% 05/31/89
- -------------------------------------------------------------------------------------------------------------------------------
* *
TCI International (11.53)% N/A N/A (5.19)% N/A N/A N/A 05/31/94
- -------------------------------------------------------------------------------------------------------------------------------
* *
TCI Growth (9.04)% 6.62% 9.07% (2.72)% 1.08% 7.14% 9.07% 11/20/87
- -------------------------------------------------------------------------------------------------------------------------------
* *
TCI Balanced (7.08)% 4.10% N/A (0.77)% (0.88)% 5.37% N/A 05/31/94
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Although results are not available for the full calendar period indicated, the
percentage shown is an average annual return since inception.
ANNUITY PAYMENTS
When Annuity payments are to begin, the value of the Contract or Account is
determined using Accumulation Unit values as of the tenth Valuation Period
before the first Annuity payment is due. Such value (less any applicable premium
tax) is applied to provide an Annuity in accordance with the Annuity and
investment options elected.
5
<PAGE>
The Annuity option tables found in the Contract show, for each form of Annuity,
the amount of the first Annuity payment for each $1,000 of value applied.
Thereafter, variable Annuity payments fluctuate as the Annuity Unit value(s)
fluctuates with the investment experience of the selected investment option(s).
The first payment and subsequent payments also vary depending on the assumed net
investment rate selected (3.5% or 5% per annum). Selection of a 5% rate causes a
higher first payment, but Annuity payments will increase thereafter only to the
extent that the net investment rate increases by more than 5% on an annual
basis. Annuity payments would decline if the rate failed to increase by 5%. Use
of the 3.5% assumed rate causes a lower first payment, but subsequent payments
would increase more rapidly or decline more slowly as changes occur in the net
investment rate.
When the Annuity Period begins, the Annuitant is credited with a fixed number of
Annuity Units (which does not change thereafter) in each of the designated
investment options. This number is calculated by dividing (a) by (b) where (a)
is the amount of the first Annuity payment based on a particular investment
option and (b) is the then current Annuity Unit value for that investment
option. As noted, Annuity Unit values fluctuate from one Valuation Period to the
next; such fluctuations reflect changes in the net investment factor for the
appropriate Fund(s) (with a ten Valuation Period lag which gives the Company
time to process Annuity payments) and a mathematical adjustment which offsets
the assumed net investment rate of 3.5% or 5% per annum.
The operation of all these factors can be illustrated by the following
hypothetical example. These procedures will be performed separately for the
investment options selected during the Annuity Period.
EXAMPLE:
Assume that, at the date Annuity payments are to begin, there are 3,000
Accumulation Units credited under a particular Contract or Account and that the
value of an Accumulation Unit for the tenth Valuation Period prior to retirement
was $13.650000. This produces a total value of $40,950.
Assume also that no premium tax is payable and that the Annuity table in the
Contract provides, for the option elected, a first monthly variable Annuity
payment of $6.68 per $1000 of value applied; the Annuitant's first monthly
payment would thus be 40.950 multiplied by $6.68, or $273.55.
Assume then that the value of an Annuity Unit for the Valuation Period in which
the first payment was due was $13.400000. When this value is divided into the
first monthly payment, the number of Annuity Units is determined to be 20.414.
The value of this number of Annuity Units will be paid in each subsequent month.
If the net investment factor with respect to the appropriate Fund is 1.0015000
as of the tenth Valuation Period preceding the due date of the second monthly
payment, multiplying this factor by .9999058* (to neutralize the assumed net
investment rate of 3.5% per annum built into the number of Annuity Units
determined above) produces a result of 1.0014057. This is then multiplied by the
Annuity Unit value for the prior Valuation Period (assume such value to be
$13.504376) to produce an Annuity Unit value of $13.523359 for the Valuation
Period in which the second payment is due.
6
<PAGE>
The second monthly payment is then determined by multiplying the number of
Annuity Units by the current Annuity Unit value, or 20.414 times $13.523359,
which produces a payment of $276.07.
*If an assumed net investment rate of 5% is elected, the appropriate factor to
neutralize such assumed rate would be .9998663.
DOLLAR-COST AVERAGING
The term "dollar-cost averaging" describes a system of investing a uniform sum
of money at regular intervals over an extended period of time. It is based on
the economic fact that buying a variably priced item with a constant sum of
money at fixed intervals results in acquiring more of the item when prices are
low and less of it when prices are high. In order to maximize the effectiveness
of dollar-cost averaging, it is important that investors consider their
financial ability to continue purchasing the securities through periods of high
and low price levels. Investors should also note that no system can protect
against reduced values in a declining market.
SALES MATERIAL
The Company may include hypothetical illustrations in its sales literature that
explain the mathematical principles of dollar cost averaging, compounded
interest, tax deferred accumulation, and the mechanics of variable annuity
contracts. The Company may also discuss the difference between variable annuity
contracts and other types of savings or investment products, including, but not
limited to, personal savings accounts and Certificates of Deposit.
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP, CityPlace II, Hartford, Connecticut 06103-4103, are the
independent auditors for the Separate Account and for the Company. The services
provided to the Separate Account include primarily the examination of the
Separate Account's financial statements and the review of filings made with the
SEC.
7
<PAGE>
FINANCIAL STATEMENTS
AETNA INSURANCE COMPANY OF AMERICA
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report.............................................. 2
Financial Statements:
Statements of Income for the Years Ended December 31, 1994, 1993 and 1992. 3
Balance Sheets as of December 31, 1994 and 1993........................... 4
Statements of Changes in Shareholder's Equity for the Years Ended December
31, 1994, 1993 and 1992.................................................. 5
Statements of Cash Flows for the Years Ended December 31, 1994, 1993 and
1992..................................................................... 6
Notes to Financial Statements December 31, 1994, 1993 and 1992............ 7
</TABLE>
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholder and Board of Directors
Aetna Insurance Company of America:
We have audited the accompanying balance sheets of Aetna Insurance Company of
America as of December 31, 1994 and 1993, and the related statements of income,
changes in shareholder's equity, and cash flows for each of the years in the
three-year period ended December 31, 1994. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Aetna Insurance Company of
America at December 31, 1994 and 1993, and the results of its operations and
its cash flows for each of the years in the three-year period ended December
31, 1994, in conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, in 1993 the Company changed
its methods of accounting for certain investments in debt and equity
securities.
/s/ KPMG Peat Marwick LLP
Hartford, Connecticut
March 17, 1995
F-2
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
STATEMENTS OF INCOME
(THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Revenue:
Net investment income............................. $ 619.3 $ 560.0 $ 645.0
-------- -------- --------
Total revenue................................... 619.3 560.0 645.0
-------- -------- --------
Expenses:
Operating expenses................................ 83.0 79.5 135.6
-------- -------- --------
Total expenses.................................. 83.0 79.5 135.6
-------- -------- --------
Income before federal income taxes.................. 536.3 480.5 509.4
Federal income taxes.............................. 187.7 168.2 173.2
-------- -------- --------
Net income.......................................... $ 348.6 $ 312.3 $ 336.2
======== ======== ========
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
BALANCE SHEETS
(THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1994 1993
--------- ---------
<S> <C> <C>
ASSETS
Investments:
Debt securities, available for sale: (amortized cost
$7,043.9 and $7,132.0) $ 6,906.5 $ 7,316.7
--------- ---------
Total investments..................................... 6,906.5 7,316.7
Cash and cash equivalents................................. 4,732.7 4,512.9
Accrued investment income................................. 91.5 91.5
Deferred tax asset........................................ 0.4 --
Other assets.............................................. 5.1 0.2
--------- ---------
Total assets.......................................... $11,736.2 $11,921.3
========= =========
LIABILITIES AND SHAREHOLDER'S EQUITY
Liabilities:
Due to parent and affiliates............................. 10.5 89.7
Other liabilities........................................ 21.0 14.9
Federal income taxes payable.............................
Current................................................... 29.4 167.9
Deferred.................................................. -- 64.6
--------- ---------
Total liabilities..................................... 60.9 337.1
--------- ---------
Shareholder's equity:
Common capital stock, par value $2,000 (1,275 shares
authorized, issued and outstanding)..................... 2,550.0 2,550.0
Paid-in capital.......................................... 7,550.0 7,550.0
Net unrealized capital gains (losses).................... (137.4) 120.1
Retained earnings........................................ 1,712.7 1,364.1
--------- ---------
Total shareholder's equity............................ 11,675.3 11,584.2
--------- ---------
Total liabilities and shareholder's equity............ $11,736.2 $11,921.3
========= =========
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Shareholder's equity, beginning of year....... $11,584.2 $11,151.8 $10,815.6
Net change in unrealized capital gains (loss-
es) ......................................... (257.5) 120.1 0.0
Net income.................................... 348.6 312.3 336.2
--------- --------- ---------
Shareholder's equity, end of year............. $11,675.3 $11,584.2 $11,151.8
========= ========= =========
</TABLE>
See Notes to Financial Statements.
F-5
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
STATEMENTS OF CASH FLOWS
(THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income..................................... $ 348.6 $ 312.3 $ 336.2
Decrease in accrued investment income.......... -- 46.3 51.4
Increase (decrease) in amounts due to/from par-
ent and affiliates............................ (79.2) 184.9 (44.9)
Decrease (increase) in other assets and liabil-
ities......................................... 1.2 (76.0) 71.1
Increase (decrease) in federal income taxes
payable....................................... (138.9) 50.2 (2.8)
Net amortization of premium on debt securities. 88.1 78.4 38.3
-------- -------- --------
Net cash provided by operating activities.... 219.8 596.1 449.3
-------- -------- --------
Cash Flows from Investing Activities:
Proceeds from maturities and repayments of debt
securities.................................... -- 2,290.0 1,485.0
Cost of investments purchased.................. -- (2,452.8) (1,532.4)
-------- -------- --------
Net cash used for investing activities....... -- (162.8) (47.4)
-------- -------- --------
Net increase in cash and cash equivalents........ 219.8 433.3 401.9
Cash and cash equivalents, beginning of year..... 4,512.9 4,079.6 3,677.7
-------- -------- --------
Cash and cash equivalents, end of year........... $4,732.7 $4,512.9 $4,079.6
======== ======== ========
Supplemental cash flow information:
Income taxes paid, net......................... $ 326.6 $ 118.0 $ 176.0
======== ======== ========
</TABLE>
See Notes to Financial Statements.
F-6
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994, 1993 AND 1992
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Aetna Insurance Company of America (the "Company") is a stock life insurance
company organized in 1990 under the insurance laws of Connecticut. The Company
is a wholly owned subsidiary of Aetna Life Insurance and Annuity Company
("ALIAC"). ALIAC is a wholly owned subsidiary of Aetna Life and Casualty
Company ("Aetna"). The Company is expected to begin marketing and servicing
individual and group annuity contracts in 1995. These financial statements
have been prepared in conformity with generally accepted accounting
principles.
Accounting changes
Accounting for Certain Investments in Debt and Equity Securities
On December 31, 1993, the Company adopted Financial Accounting Standard
("FAS") No. 115, Accounting for Certain Investments in Debt and Equity
Securities, which requires the classification of debt securities into three
categories: "held to maturity", which are carried at amortized cost;
"available for sale", which are carried at fair value with changes in fair
value recognized as a component of shareholder's equity; and "trading", which
are carried at fair value with immediate recognition in income of changes in
fair value.
Initial adoption of this standard in 1993 resulted in a net increase of $120.1
thousand, net of taxes of $64.6 thousand, to net unrealized gains in
shareholder's equity.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, money market instruments and
other debt issues with a maturity of ninety days or less when purchased.
Investments
At December 31, 1993 and 1994, all of the Company's debt securities are
classified as available for sale and carried at fair value. These securities
are written down (as realized losses) for other than temporary decline in
value. Unrealized gains and losses are reflected in shareholder's equity. Fair
values for debt securities are based on quoted market prices or dealer
quotations. Purchases and sales of debt securities are recorded on the trade
date.
Federal Income Taxes
The Company is included in the consolidated federal income tax return of
Aetna. The Company is taxed at regular corporate rates after adjusting income
reported for financial statement purposes for certain items. Deferred income
tax benefits result from changes during the year in cumulative temporary
differences between the tax basis and book basis of assets and liabilities.
F-7
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
2. INVESTMENTS
Investments in debt securities available for sale were as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------- ---------- ---------- --------
(Thousands)
<S> <C> <C> <C> <C>
1994
U.S. Treasury securities............ $7,043.9 4.2 141.6 $6,906.5
======== ===== ===== ========
1993
U.S. Treasury securities............ $7,132.0 184.7 -- $7,316.7
======== ===== ===== ========
</TABLE>
The amortized cost and fair value of debt securities for the year ended
December 31, 1994 are shown below by contractual maturity. Actual maturities
may differ from contractual maturities because securities may be restructured,
called or prepaid.
<TABLE>
<CAPTION>
AMORTIZED FAIR
COST VALUE
--------- --------
(Thousands)
<S> <C> <C> <C> <C>
Due to mature:
One year or less.............................. $3,016.0 $3,019.7
After one year through five years............. 4,027.9 3,886.8
-------- --------
Total....................................... $7,043.9 $6,906.5
======== ========
</TABLE>
At December 31, 1994 and 1993, debt securities with an amortized cost of $3.9
million were on deposit as required by various state regulatory agencies.
3. CAPITAL GAINS AND LOSSES ON INVESTMENTS
Realized capital gains or losses are the difference between proceeds received
from investments sold or prepaid and amortized cost. For the three years ended
December 31, 1994, there were no realized capital gains or losses.
Unrealized gains and losses on investments carried at fair value, net of
related taxes, reflected in shareholder's equity, were as follows for December
31,
<TABLE>
<CAPTION>
1994 1993
------- ------
(Thousands)
<S> <C> <C> <C> <C>
Debt securities
Gross unrealized gains................................ $ 4.2 $184.7
Gross unrealized losses............................... (141.6) --
------- ------
(137.4) 184.7
Deferred federal income taxes (See Note 6).............. -- 64.6
------- ------
Net unrealized capital gains (losses)................. $(137.4) $120.1
======= ======
</TABLE>
F-8
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
4. NET INVESTMENT INCOME
Sources of net investment income were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
------ ------ ------
(Thousands)
<S> <C> <C> <C>
Debt securities.................................. $414.1 $425.7 $492.7
Cash equivalents................................. 205.2 135.3 152.3
------ ------ ------
Gross investment income.......................... 619.3 561.0 645.0
Less investment expenses......................... -- 1.0 --
------ ------ ------
Net investment income............................ $619.3 $560.0 $645.0
====== ====== ======
</TABLE>
5. DIVIDEND RESTRICTIONS AND SHAREHOLDER'S EQUITY
The amount of dividends that may be paid to the shareholder in 1995 without
prior approval by the Insurance Commissioner of the State of Connecticut is
$922.8 thousand.
The Insurance Department of the State of Connecticut (the "Department")
recognizes as net income and shareholder's equity those amounts determined in
conformity with statutory accounting practices prescribed or permitted by the
Department, which differ in certain respects from generally accepted accounting
principles ("GAAP"). Statutory net income was $348.1 thousand, $312.3 thousand
and $336.2 thousand for the years ended December 31, 1994, 1993 and 1992,
respectively. Statutory shareholder's equity was $11.8 million and $11.4
million as of December 31, 1994 and 1993, respectively.
As of December 31, 1994, the Company does not utilize any statutory accounting
practices which are not prescribed by insurance regulators that, individually
or in the aggregate, materially affect statutory shareholder's equity.
6. FEDERAL INCOME TAXES
The Company is included in the consolidated federal income tax return of Aetna.
Aetna allocates to each member an amount approximating the tax it would have
incurred were it not a member of the consolidated group, and credits the member
for the use of its tax saving attributes in the consolidated return.
In August 1993, the Omnibus Budget Reconciliation Act of 1993 (OBRA) was
enacted which resulted in an increase in the federal corporate tax rate from
34% to 35% retroactive to January 1, 1993. The enactment of OBRA resulted in an
increase in current taxes of $4.8 thousand which is included in the 1993
current tax expense.
F-9
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Components of income tax expense (benefits) were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
------ ------ ------
(thousands)
<S> <C> <C> <C>
Current tax expense:
Income from operations............................... $188.1 $168.2 $173.2
Deferred tax benefit:
Income from operations............................... (.4) -- --
------ ------ ------
Total................................................ $187.7 $168.2 $173.2
====== ====== ======
</TABLE>
Income tax expense was equal to the federal income tax rate applied to income
before federal income taxes as shown below:
<TABLE>
<CAPTION>
1994 1993 1992
------ ------ ------
(thousands)
<S> <C> <C> <C>
Income before federal income taxes................... $536.3 $480.5 $509.4
Tax rate............................................. 35% 35% 34%
------ ------ ------
Income tax expense................................. $187.7 $168.2 $173.2
====== ====== ======
</TABLE>
The tax effects of temporary differences that give rise to deferred tax assets
and deferred tax liabilities under FAS No. 109 at December 31, 1994 and 1993
are presented below:
<TABLE>
<CAPTION>
1994 1993
----- -----
(thousands)
<S> <C> <C>
Deferred tax assets:
Net unrealized capital losses.............................. $48.1 $ --
Other, net................................................. .4 --
----- -----
Total gross assets........................................... 48.5 --
Less valuation allowance..................................... 48.1 --
----- -----
Assets net of valuation.................................... .4 --
----- -----
Deferred tax liabilities:
Net unrealized capital gains............................... -- 64.6
----- -----
Total gross liabilities...................................... -- 64.6
----- -----
Net deferred tax liability (asset)......................... $ (.4) $64.6
===== =====
</TABLE>
Net unrealized capital gains and losses are presented in shareholder's equity
net of deferred taxes. At December 31, 1994, $137.4 thousand of net unrealized
capital losses were reflected in shareholder's equity without deferred tax
benefits. For federal income tax purposes, capital losses are deductible only
against capital gains in the year of sale or during the carryback and
carryforward periods (three and five years, respectively). Due to the expected
full utilization of capital gains in the carryback period and the uncertainty
of future capital gains, a valuation
F-10
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
allowance of $48.1 thousand related to the net unrealized capital losses has
been reflected in shareholder's equity. Any reversals of the valuation
allowance are contingent upon the recognition of future capital gains in
Aetna's federal income tax return or a change in circumstances which causes the
recognition of the benefits to become more likely than not. Non-recognition of
the deferred tax benefits on net unrealized losses described above had no
impact on net income for 1994, but has the potential to adversely affect future
results if such losses are realized.
The Internal Revenue Service ("Service") has completed examinations of the
consolidated federal income tax returns of Aetna through 1986. Discussions are
being held with the Service with respect to proposed adjustments. However,
management believes there are adequate defenses against, or sufficient reserves
to provide for, such adjustments. The Service has commenced its examinations
for the years 1987 through 1990.
7. BENEFIT PLANS
The Company has no employees, when it does, the employees of the Company will
be eligible for the same benefit plans as the employees of ALIAC. The following
is a discussion of benefit plans as they apply to ALIAC. Charges were allocated
to the Company based on appropriate measures. There were no charges to
operations during 1994 and 1993 for the benefit plans described below. Charges
to operations during 1992 were $2.8 thousand.
Employee Pension Plans -- ALIAC, in conjunction with Aetna, has non-
contributory defined benefit pension plans covering substantially all
employees. The plans provide pension benefits based on years of service and
average annual compensation (measured over sixty consecutive months of highest
earnings in a 120 month period). Contributions are determined using the Entry
Age Normal Cost Method and, for qualified plans subject to ERISA requirements,
are limited to the amounts that are currently deductible for tax reporting
purposes. The accumulated plan assets exceed accumulated plan benefits.
Agent Pension Plans -- ALIAC, in conjunction with Aetna, has a non-qualified
pension plan covering certain agents. The plan provides pension benefits based
on annual commission earnings. The accumulated plan assets exceed accumulated
plan benefits. There has been no funding to the plan for the years 1992 through
1994.
Employee Postretirement Benefits -- In addition to providing pension benefits,
Aetna also provides certain postretirement health care and life insurance
benefits, subject to certain caps, for retired employees. Medical and dental
benefits are offered to all full-time employees retiring at age 50 with at
least 15 years of service or at age 65 with at least 10 years of service.
Retirees are required to contribute to the plans based on their years of
service with Aetna.
Aetna implemented FAS No. 106, Employers' Accounting for Postretirement
Benefits Other Than Pensions on the immediate recognition basis in 1992. The
cumulative effect charge for all Aetna employees was reflected in Aetna's 1992
Statement of Income. Prior to the adoption of FAS No. 106, cost of
postretirement benefits was charged to operations as payments were made.
Agent Postretirement Benefits -- ALIAC, in conjunction with Aetna, also
provides certain postemployment health care and life insurance benefits for
certain agents.
F-11
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Incentive Savings Plan -- Substantially all employees are eligible to
participate in a savings plan under which designated contributions, which may
be invested in common stock of Aetna or certain other investments, are matched,
up to 5% of compensation, by Aetna.
Stock Plans -- Aetna has a stock incentive plan that provides for stock options
and deferred contingent common stock or cash awards to certain key employees.
Aetna also has a stock option plan under which executive and middle management
employees of Aetna may be granted options to purchase common stock of Aetna at
the market price on the date of grant or, in connection with certain business
combinations, may be granted options to purchase common stock on different
terms.
8. RELATED PARTY TRANSACTIONS
Substantially all of the administrative and support functions of the Company
are provided by Aetna and its affiliates. The financial statements reflect
allocated charges for these services based upon measures appropriate for the
type and nature of service provided. Total charges allocated to the Company,
including rent, salaries and other administrative expenses, were $1.0 thousand
in 1993. There were no charges allocated to the Company for these services in
1994 and 1992.
9. ESTIMATED FAIR VALUE
The carrying values and estimated fair values of the Company's financial
instruments at December 31, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
1994 1993
----------------- -----------------
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
-------- -------- -------- --------
(Thousands)
<S> <C> <C> <C> <C>
Assets:
Cash and cash equivalents................ $4,732.7 $4,732.7 $4,512.9 $4,512.9
Debt securities.......................... 6,906.5 6,906.5 7,316.7 7,316.7
</TABLE>
Fair value estimates are made at a specific point in time, based on available
market information and judgments about the financial instrument, such as
estimates of timing and amount of expected future cash flows. Such estimates do
not reflect any premium or discount that could result from offering for sale at
one time the Company's entire holdings of a particular financial instrument,
nor do they consider the tax impact of the realization of unrealized gains or
losses. In evaluating the Company's management of interest rate and liquidity
risk, the fair values of all assets and liabilities should be taken into
consideration, not only those above.
F-12
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
VARIABLE ANNUITY ACCOUNT I
VARIABLE ANNUITY CONTRACTS
issued by
AETNA INSURANCE COMPANY OF AMERICA
Form No.____ (S) AICA Ed. _______/95
<PAGE>
VARIABLE ANNUITY ACCOUNT I
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
- -------------------------------------------
(a) Financial Statements:
(1) Included in Part A:
Not Applicable
(2) Included in Part B:
Financial Statements of the Depositor:
- Independent Auditors' Report
- Statements of Income for the years ended December 31, 1994,
1993 and 1992
- Balance Sheets as of December 31, 1994 and 1993
- Statements of Changes in Shareholder's Equity for the years
ended December 31, 1994, 1993 and 1992
- Statements of Cash Flows for the years ended December 31, 1994,
1993 and 1992
- Notes to Financial Statements
(b) Exhibits
(1) Resolution of the Board of Directors of Aetna Insurance
Company of America establishing Variable Annuity Account I
(2) Not Applicable
(3.1) Form of Selling Agreement
(3.2) Form of Principal Underwriting Agreement
(4.1) Form of Variable Annuity Contract (G2-CDA-94(IR))
(4.2) Form of Variable Annuity Contract (G2-CDA-94(NQ))
(5) Form of Variable Annuity Contract Application
(6) Certificate of Incorporation and By-Laws of Depositor
(7) Not Applicable
(8.1) Fund Participation Agreement between Aetna Insurance
Company of America, Alger American Fund and Fred Alger
Management, Inc./*/
(8.2) Fund Participation Agreements between Aetna Insurance
Company of America and Fidelity Distributors Corporation
(Variable Insurance Products Fund)/*/
(8.3) Fund Participation Agreement between Aetna Insurance
Company of America and Fidelity Distributors Corporation
(Variable Insurance Products Fund II)/*/
(8.4) Fund Participation Agreement between Aetna Insurance
Company of America and Janus Aspen Series/*/
(8.5) Fund Participation Agreement between Aetna Insurance
Company of America and Lexington Management Corporation
regarding Natural Resources Trust/*/
(8.6) Fund Participation Agreement between Aetna Insurance
Company of America, Lexington Emerging Markets Fund, Inc.
and Lexington Management Corporation (its investment
adviser)/*/
<PAGE>
(8.7) Fund Participation Agreement between Aetna Insurance
Company of America, Investors Research Corporation and TCI
Portfolios, Inc./*/
(8.8) Form of Administrative Service Agreement between Aetna
Insurance Company of America and Agency, Inc./*/
(9) Consent and Opinion of Counsel
(10) Consent of Independent Auditors
(11) Not applicable
(12) Not applicable
(13) Computation of Performance Data
(14) Not applicable
(15.1) Power of Attorney/1/
(15.2) Certificate Resolution Authorizing Signatures
1. Included in the signature page of this Registration Statement.
* To be filed by Amendment.
<PAGE>
Item 25. Directors and Officers of the Depositor
- -------------------------------------------------
Name and Principal
Business Address* Positions and Offices with Depositor
- ------------------ ------------------------------------
Daniel P. Kearney Director and President
James C. Hamilton Director, Vice President and Treasurer
Richard C. Murphy Director and Vice President
Scott A. Striegel Director and Senior Vice President
Maria F. McKeon Corporate Secretary
* The principal business address of all directors and officers listed
is 151 Farmington Avenue, Hartford, Connecticut 06156.
Item 26. Persons Controlled by or Under Common Control with the
- ----------------------------------------------------------------
Depositor or Registrant
- -----------------------
Incorporated herein by reference to Exhibit 24(c) to Registration Statement
on Form N-4 (File No. 33-88720) filed by Variable Annuity Account C of Aetna
Life Insurance and Annuity Company on January 20, 1995.
Item 27. Number of Contract Owners
- -----------------------------------
As of March 31, 1995, there were no contract owners of variable annuity
contracts funded through Account I.
Item 28. Indemnification
- -------------------------
Reference is hereby made to Section 33-320a of the Connecticut General
Statutes ("C.G.S.") regarding indemnification of directors and officers of
Connecticut corporations. The statute provides in general that Connecticut
corporations shall indemnify their officers, directors, employees, agents, and
certain other defined individuals against judgments, fines, penalties, amounts
paid in settlement and reasonable expenses actually incurred in connection with
proceedings against the corporation. The corporation's obligation to provide
such indemnification does not apply unless (1) the individual is successful on
the merits in the defense of any such proceeding; or (2) a determination is made
(by a majority of the board of directors not a party to the proceeding by
written consent; by independent legal counsel selected by a majority of the
directors not involved in the proceeding; or by a majority of the shareholders
not involved in the proceeding) that the individual acted in good faith and in
the best interests of the corporation; or (3) the court, upon application by the
individual, determines in view of all the circumstances that such person is
reasonably entitled to be indemnified.
<PAGE>
C.G.S. Section 33-320a provides an exclusive remedy: a Connecticut
corporation cannot indemnify a director or officer to an extent either greater
or less than that authorized by the statute, e.g., pursuant to its certificate
of incorporation, bylaws, or any separate contractual arrangement. However, the
statute does specifically authorize a corporation to procure indemnification
insurance to provide greater indemnification rights. The premiums for such
insurance may be shared with the insured individuals on an agreed basis.
Consistent with the statute, Aetna Life and Casualty Company has procured
insurance from Lloyd's of London and several major United States excess insurers
for its directors and officers and the directors and officers of its
subsidiaries, including the Depositor, which supplements the indemnification
rights provided by C.G.S. Section 33-320a to the extent such coverage does not
violate public policy.
Item 29. Principal Underwriters
- --------------------------------
(a) In addition to serving as the principal underwriter for the Registrant,
Aetna Life Insurance and Annuity Company (ALIAC) also acts as the
principal underwriter for Variable Life Account B and Variable Annuity
Accounts B and C (separate accounts of ALIAC registered as unit
investment trusts). Additionally, ALIAC is the investment adviser for
Aetna Variable Fund, Aetna Income Shares, Aetna Variable Encore Fund,
Aetna Investment Advisers Fund, Inc., Series B of Aetna GET Fund, Aetna
Series Fund, Inc. and Aetna Generation Portfolios, Inc. ALIAC is also the
depositor of Variable Life Account B and Variable Annuity Accounts B and
C.
(b) Directors and Officers of the Underwriter
Name and Principal
Business Address* Positions and Offices with Depositor
- ----------------- ------------------------------------
Daniel P. Kearney Director and President
Gary G. Benanav Director
Christopher J. Burns Director and Senior Vice President, Life
Laura R. Estes Director and Senior Vice President,
ALIAC Pensions
Shaun P. Mathews Director and Senior Vice President,
Mutual Funds
Scott A. Striegel Director and Senior Vice President,
Annuity
James C. Hamilton Director, Vice President and Treasurer
<PAGE>
Dominick J. Agostino Director, Senior Vice President and
Chief Financial Officer
John Y. Kim Director and Senior Vice President,
ALIAC Investments
Robert E. Broatch Senior Vice President and Corporate
Controller
Zoe Baird Senior Vice President and General
Counsel
Fred J. Franklin Vice President and Chief Compliance
Officer
Susan E. Schechter Corporate Secretary and Counsel
* The principal business address of all directors and officers listed is 151
Farmington Avenue, Hartford, Connecticut, 06156.
(c) Not applicable.
Item 30. Location of Accounts and Records
- ------------------------------------------
All records concerning contract owners of Variable Annuity Account I are
located at the home office of the Registrant as follows:
Aetna Insurance Company of America
151 Farmington Avenue
Hartford, Connecticut 06156
Item 31. Management Services
- -----------------------------
Not applicable
Item 32. Undertakings
- ----------------------
Registrant hereby undertakes:
(a) to file a post-effective amendment to this registration statement on Form
N-4 as frequently as is necessary to ensure that the audited financial
statements in the registration statement are never more than sixteen
months old for as long as payments under the variable annuity contracts
may be accepted;
(b) to include as part of any application to purchase a contract offered by a
prospectus which is part of this registration statement on Form N-4, a
space that an applicant can check to request a Statement of Additional
Information; and
<PAGE>
(c) to deliver any Statement of Additional Information and any financial
statements required to be made available under this Form N-4 promptly
upon written or oral request.
(d) Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, 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 the
payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, 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 of 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.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, as amended, and the Investment
Company Act of 1940, the Registrant, Variable Annuity Account I of Aetna
Insurance Company of America, has caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Hartford, State of Connecticut, on the 30th day of May, 1995.
VARIABLE ANNUITY ACCOUNT I OF AETNA INSURANCE
COMPANY OF AMERICA
(Registrant)
AETNA INSURANCE COMPANY OF AMERICA
(Depositor)
By: /s/Daniel P. Kearney
--------------------
Daniel P. Kearney
Principal Executive Officer
As required by the Securities Act of 1933, as amended, this Registration
Statement on Form N-4 has been signed by the following persons in the capacities
and on the dates indicated; each person whose signature appears below hereby
constitutes Susan E. Bryant, Julie E. Rockmore, Steven J. Lauwers, and Maria F.
McKeon, and each of them individually, such person's true and lawful attorney,
with full power to them and each of them to sign for such person and in such
person's name and capacity indicated below, any and all amendments to this
Registration Statement, including pre-effective and post-effective amendments,
hereby ratifying and confirming such person's signature as it may be signed by
said attorney to any and all such amendments.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/Daniel P. Kearney Director and President May 30, 1995
- ----------------------------
Daniel P. Kearney (Principal Executive Officer)
/s/James C. Hamilton Director, Vice President and May 30, 1995
- ----------------------------
James C. Hamilton Treasurer (Principal Accounting and
Financial Officer)
/s/Richard C. Murphy Director and Senior Vice President May 30, 1995
- ----------------------------
Richard C. Murphy
/s/Scott A. Striegel Director and Senior Vice President May 30, 1995
- ----------------------------
Scott A. Striegel
</TABLE>
<PAGE>
VARIABLE ANNUITY ACCOUNT I
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Exhibit Page
- ----------- ------- ----
<S> <C> <C>
24(b)(1) Resolution of the Board of Directors of
Aetna Insurance Company of America
establishing Variable Annuity Account I ____________
24(b)(3.1) Form of Selling Agreement ____________
24(b)(3.2) Form of Principal Underwriting Agreement ____________
24(b)(4.1) Form of Variable Annuity Contract ____________
(G2-CDA-94(IR))
24(b)(4.2) Form of Variable Annuity Contract ____________
(G2-CDA-94(NQ))
24(b)(5) Form of Variable Annuity Contract Application ____________
24(b)(6) Certificate of Incorporation and By-Laws of ____________
Depositor
24(b)(8.1) Fund Participation Agreement between Aetna *
Insurance Company of American, Alger
American Fund and Fred Alger Management, Inc.
24(b)(8.2) Fund Participation Agreements between Aetna *
Insurance Company of America and Fidelity
Distributors Corporation (Variable Insurance
Products Fund)
24(b)(8.3) Fund Participation Agreement between Aetna *
Insurance Company of America and Fidelity
Distributors Corporation (Variable Insurance
Products Fund II)
24(b)(8.4) Fund Participation Agreement between Aetna *
Insurance Company of America and Janus Aspen
Series
24(b)(8.5) Fund Participation Agreement between Aetna *
Insurance Company of America and Lexington
Management Corporation regarding Natural
Resources Trust
</TABLE>
*To be filed by Amendment
<TABLE>
<CAPTION>
Exhibit No. Exhibit Page
- ----------- ------- ----
<S> <C> <C>
24(b)(8.6) Fund Participation Agreement between Aetna *
Insurance Company of America, Lexington
Emerging Markets Fund, Inc. and Lexington
Management Corporation (its investment
adviser)
24(b)(8.7) Fund Participation Agreement between Aetna *
Insurance Company of America, Investors
Research Corporation and TCI Portfolios, Inc.
24(b)(8.8) Form of Administrative Service Agreement *
between Aetna Insurance Company of America
and Agency, Inc.
24(b)(9) Consent and Opinion of Counsel
____________
24(b)(10) Consent of Independent Auditors
____________
24(b)(13) Computation of Performance Data
____________
24(b)(15.2) Certificate Resolution Authorizing Signatures
</TABLE>
*To be filed by Amendment
<PAGE>
Exhibit 24(b)(1)
I, Maria F. McKeon, Corporate Secretary for Aetna Insurance Company of
America (the "Company"), hereby certify that the following resolution was duly
adopted by the Board of Directors of the Company by Unanimous Written Consent in
accordance with applicable Connecticut law on May 31, 1994, that such resolution
has not been rescinded and is still in full force and effect:
RESOLVED, that the officers of this Company are hereby severally
authorized to take such action as they may severally deem necessary or
appropriate to create new separate accounts, to be called
Variable Annuity Account I
Variable Annuity Account II
Variable Life Account I
Variable Life Account II
for the purpose of funding variable annuity contracts and variable life
policies, respectively.
Date May 25, 1995
/s/Maria F. McKeon
------------------
Maria F. McKeon
Corporate Secretary
<PAGE>
Exhibit 24(b)(3.1)
AICA/ALIAC BROKER-DEALER AGREEMENT
----------------------------------
THIS AGREEMENT ("Agreement") is effective as of this _____________ day of
___________________, 1995, by and between Aetna Life Insurance and Annuity
Company ("Company"), Hartford, Connecticut 06156, incorporated under the laws of
the State of Connecticut, and___________________________________________________
("Broker-Dealer"), incorporated under the laws of the State of_________________.
In consideration of the mutual promises contained herein, the parties hereto
agree as follows:
1. AGREEMENTS OF THE COMPANY
-------------------------
A. The Company hereby authorizes the Broker-Dealer during the term of this
Agreement to solicit, offer and sell variable annuity contracts ("Contracts")
described in Schedule A attached hereto and issued and distributed by the
Company to suitable customers, provided that the Contracts are qualified for
sale under all applicable federal and state securities and insurance laws of the
jurisdiction in which the solicitations, offers or sales will be made.
B. The Company, during the term of this Agreement, will notify Broker-Dealer of
the issuance by the SEC or any state or jurisdiction of any stop order with
respect to the registration statement or any amendments thereto or the
initiation of any proceedings for that purpose or for any other purpose relating
to the registration and/or offering of the Contracts and of any other action or
circumstance that may prevent the lawful sale of any Contract in any state or
jurisdiction.
C. During the term of this Agreement, the Company shall advise the Broker-
Dealer of any amendment to any registration statement and/or any amendment,
sticker or supplement to any Prospectus.
2. AGREEMENTS OF BROKER-DEALER
---------------------------
A. REGISTRATION AND LICENSES. The Broker-Dealer represents that it is a
-------------------------
registered Broker-Dealer with the Securities and Exchange Commission ("SEC") and
a member in good standing of the National Association of Securities Dealers,
Inc. ("NASD"). The Broker-Dealer represents that it is or will become
registered, licensed and appointed to sell the Contracts, as required, in those
states and jurisdictions where its agents or registered representatives will
solicit, offer and sell the Contracts. The Broker-Dealer represents that each
registered representative who solicits, offers and sells the Contracts will be a
duly registered representative of Broker-Dealer. The Broker-Dealer represents
that each registered representative will hold all registrations and licenses
required by the NASD and any state or jurisdiction to sell the Contracts.
1
<PAGE>
B. SALES PRACTICES AND SUPERVISION. The Broker-Dealer agrees to use its best
-------------------------------
efforts to lawfully solicit, offer and sell the Contracts and further agrees to
the following:
(i) The Broker-Dealer shall only use advertising material and sales
literature, including prospectuses, which have been first approved by the
Company and, if required, filed with the NASD and any state or jurisdiction. The
Broker-Dealer agrees to discard immediately any out dated sales and advertising
material and prospectuses.
(ii) The Broker-Dealer shall establish and implement compliance and
supervisory procedures for the supervision of the sales practices and conduct of
its agents and representatives. The Broker-Dealer shall submit to the Company,
as reasonably requested, periodic reports concerning the compliance by the
Broker-Dealer and its registered representatives with its procedures and
applicable laws and regulations, as they may pertain to the Company's contracts.
The Broker-Dealer agrees to permit the Company to periodically audit its records
with respect to compliance upon reasonable notice.
(iii) The Broker-Dealer agrees that its registered representatives will not
make recommendations to a customer to invest in a Contract in the absence of
reasonable grounds to believe that the Contract is suitable for the customer.
While not limited to the following, a determination of suitability by the
Broker-Dealer shall be based on information obtained from the customer by the
registered representative after reasonable inquiry concerning the customer's
investment objectives, other investment holdings, financial and tax status and
needs.
C. HANDLING OF CUSTOMER PAYMENTS. All payments for Contracts collected by the
-----------------------------
Broker-Dealer shall be remitted promptly together with such applications, forms
and other required documentation to the Company. Payments from customers shall
be in accordance with the procedures established by the Company from time to
time. No payment is deemed received by Aetna Insurance Company of America
until actually received by Aetna Insurance Company of America. The Broker-
Dealer acknowledges that Aetna Insurance Company of America retains the
unconditional right to reject, in whole or part, any application for a Contract.
Upon Aetna Insurance Company of America's acceptance of a Contract application
submitted by the Broker-Dealer, Aetna Insurance Company of America shall mail
the appropriate documentation representing the Contract to the Broker-Dealer,
which shall make prompt delivery to the customer. Notwithstanding this
obligation of the Broker-Dealer, Aetna Insurance Company of America reserves the
right to transmit such documentation directly to the customer.
D. INDEPENDENT CONTRACTOR. The Broker-Dealer agrees it is and shall act as an
----------------------
independent contractor. Nothing in this Agreement shall make the Broker-Dealer,
or its employees, agents or registered representatives, an employee of the
Company. Neither the Broker-Dealer, nor its employees, agents, or registered
representatives shall hold themselves out to be employees, agents or registered
representatives of the Company in any dealings with the public.
2
<PAGE>
The Broker-Dealer warrants and represents that it has the authority to act
on behalf of any and all subsidiaries, and is hereby exercising such authority
on behalf of such subsidiaries with respect to the obligations set forth in this
Agreement as well as the transfer of customer payments and forms, and the
acceptance of any compensation paid under this Agreement.
E. TRAINING. The Broker-Dealer shall be responsible for training its
--------
registered representatives with regard to the Contracts as well as the Company
procedures before they are permitted to sell any Contract. The Company will, at
the request of the Broker-Dealer, provide training to Broker-Dealer personnel.
The Broker-Dealer shall be responsible to pay all costs of training for its
registered representatives.
F. USE OF SALES AND TRAINING MATERIALS. The Broker-Dealer agrees that any
-----------------------------------
material that it develops, approves or uses for sales, advertising, training,
explanatory or other purposes in connection with the Contracts, and that
references the Aetna, Aetna Insurance Company of America or Company name or
Aetna Insurance Company of America's Contract will not be used without the prior
written consent of the Company.
G. COMPLIANCE WITH LAWS AND REGULATIONS. The solicitation, offer and sale of
------------------------------------
the Contracts by the Broker-Dealer and its registered representatives shall be
undertaken only in accordance with applicable laws and regulations. No
registered representative of the Broker-Dealer shall solicit, offer or sell the
Contracts until duly registered, licensed, or appointed, as required by the NASD
and any state or jurisdiction. The Broker-Dealer understands and acknowledges
that neither the Broker-Dealer nor its registered representatives are authorized
by the Company to give any information or make any representation in connection
with the solicitation, offer or sale of the Contracts other than as contained in
the prospectus or sales or advertising material authorized in writing by the
Company.
H. MAINTAINING RECORDS. The Broker-Dealer shall have the responsibility for
-------------------
maintaining the records of those registered representatives of the Broker-Dealer
registered, licensed and appointed and otherwise qualified to sell the
Contracts. The Broker-Dealer shall maintain such records as required by
applicable laws and regulations. The books, accounts and records maintained by
the Broker-Dealer under the terms of this Agreement that relate to the sale of
the Contracts, the Company, and/or the Broker-Dealer shall be maintained so as
to clearly and accurately disclose the nature and details of the transactions
covered by the Agreement.
I. PROPRIETARY INFORMATION. Any and all account records developed by the
-----------------------
Company or provided to the Company by the Broker-Dealer, including customers
files, customer names, addresses, telephone numbers and related paperwork,
literature, authorizations, manuals and supplies of every kind and nature
relating to the Contracts and the servicing of the Contracts are and shall
remain the property of the Company. Any and all materials developed and
provided by the Company shall be returned to the Company upon termination of
this Agreement. Any materials developed by the Broker-Dealer in support of the
marketing, sales, advertising or training related to the Company or its
Contracts
3
<PAGE>
shall be destroyed upon the termination of the Agreement. The Broker-Dealer
shall keep confidential any information that is covered by this Agreement, and
shall only disclose such information if authorized in writing by the Company or
expressly required by the laws or regulations of any jurisdiction or the NASD or
court order.
J. MARKETING CHANGES. With respect to the Contracts covered by this Agreement,
-----------------
as amended from time to time, the Broker-Dealer shall notify the Company of any
material change or intention to materially change its marketing operations.
Such notice shall be given in the manner specified in Section 14 of this
Agreement. All Broker-Dealer marketing plans and methods for offering Contracts
are subject to periodic review by the Company, but not less frequently than
annually.
3. COMPENSATION
------------
A. PAYMENT SCHEDULE. The Company agrees to pay compensation to Broker-Dealer
----------------
for the sale of each Contract lawfully sold by a registered representative of
the Broker-Dealer. The amount of compensation shall be in accordance with the
Compensation Schedule attached hereto as Schedule B. Notwithstanding the
foregoing, no compensation shall be payable for any transaction not in
compliance with all applicable insurance and securities laws, rules and
regulations at the time of the solicitation, offer and sale of a Contract and
thereafter. Notwithstanding any provision in Schedule B concerning chargebacks,
if any Contract is tendered for redemption or not taken in accordance with
applicable regulatory requirements, no compensation shall be paid. Payment of
compensation as described in Schedule B is due the Broker-Dealer when an
application for a Contract is tendered to the Company. The Broker-Dealer may
retain any compensation due it from amounts otherwise lawfully due the Company
by the Broker-Dealer; provided, however, that the Broker-Dealer agrees to refund
immediately any compensation so retained with regard to a particular Contract if
the Company does not accept an application for such Contract or the Contract is
otherwise redeemed or not taken as hereinbefore described.
B. DESIGNATION OF NOMINEE. With respect to all compensation to be paid to the
----------------------
Broker-Dealer, as described in this Section 3, such payments shall be made to
______________ as the Broker-Dealer's nominee. Payments by the Company to
______________ shall constitute full payment for all compensation to be paid to
the Broker-Dealer in connection with the sale of the Contracts. The Broker-
Dealer shall be solely responsible for the payment of any compensation of any
kind to its registered representatives.
C. DEDUCTIONS BY THE COMPANY. The Company reserves the right to deduct any
-------------------------
amount it determines is owed by the Broker-Dealer to the Company or its
affiliates, from any compensation due the Broker-Dealer from the Company. This
right shall apply, but is not limited to the following: (i) advances to the
Broker-Dealer; (ii) compensation paid to the Broker-Dealer for payments by a
customer received by the Company and later returned or credited to such customer
for any reason; and (iii) any overpayment of compensation to the Broker-Dealer.
Any balance due the Company after such deduction
4
<PAGE>
shall be a debt of the Broker-Dealer and will accrue interest at eight percent
(8%) per annum. The Company shall have all rights of a creditor to collect
amounts owed it by the Broker-Dealer.
D. PAYMENT UPON TERMINATION. Upon the termination of this Agreement, the
------------------------
Company will pay commissions to the Broker-Dealer in accordance with the
Company's established procedures on business placed with the Company prior to
the termination date of this Agreement unless payment or receipt of renewal
commissions would violate any laws, rules or regulations of any jurisdiction or
the NASD.
4. COMPLAINTS AND INVESTIGATIONS
-----------------------------
A. COOPERATION. The Company and Broker-Dealer agree to cooperate fully in any
-----------
investigation or proceeding, the subject of which is the Broker-Dealer, to the
extent that such investigation or proceeding concerns any matters related to
this Agreement. Without limiting the foregoing:
(i) The Company shall promptly notify the Broker-Dealer of receipt of any
customer complaint or notice of any inquiry, investigation or proceeding
concerning any matter related to this Agreement.
(ii) The Broker-Dealer shall promptly notify the Company of receipt of any
customer complaint or notice of any inquiry, investigation or proceeding
concerning any of the Company's Contracts. The Broker-Dealer shall promptly
notify the Company of any NASD, federal or state inquiry, investigation or
proceeding, or litigation that has been initiated against the Broker-Dealer
regarding the Company or its Contracts.
B. SETTLEMENT BY THE COMPANY. The Company reserves the right to settle any
-------------------------
claim or complaint made by a customer concerning any conduct, act or omission by
the Broker-Dealer or its registered representatives. Provided there is
agreement between the Company and the Broker-Dealer regarding such settlement,
the Broker-Dealer shall reimburse the Company for the amount of any such
settlement. Any settlement payments agreed to by the Broker-Dealer shall be
reimbursed by the Broker-Dealer and will be a debt of the Broker-Dealer as
described in Section 3.D.
5. INDEMNIFICATION
---------------
A. BY THE COMPANY. The Company agrees to hold harmless and indemnify the
--------------
Broker-Dealer and its affiliates against any and all claims, liabilities and
expenses which any such party may incur from liabilities (including reasonable
attorney fees and related expenses) arising from the actions or omission of the
Company and its employees and other associated persons.
5
<PAGE>
B. BY THE BROKER-DEALER. The Broker-Dealer agrees to hold harmless and
--------------------
indemnify Company and its affiliates against any and all claims, liabilities and
expenses which any such party may incur from liabilities (including reasonable
attorney fees and related expense) arising from the actions or omissions of the
Broker-Dealer, its registered representatives and other associated persons.
C. NOTICE OF ACTION. After receipt by an indemnified party of notice of the
----------------
commencement of any action with respect to which a claim will be made against an
indemnifying party, such indemnified party shall notify the indemnifying party
promptly in writing of the commencement of the action. The failure to so notify
the indemnifying party shall not relieve the indemnifying party from any
liability which it may otherwise have to any indemnified party except and to the
extent the indemnifying party is prejudiced thereby. In any such action where
the indemnified party has given the notice described in this Section 5, the
indemnifying party shall be entitled to participate in and, to the extent that
it shall wish, jointly with any other indemnifying party similarly notified, to
assume defense of the action. After notice to such indemnified party that the
indemnifying party has elected to assume defense of the action, the indemnifying
party shall not be liable to such indemnified party for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense other than reasonable costs of investigation.
6. ASSIGNABILITY
-------------
This Agreement shall not be assigned by either party without the written
consent of the other party.
7. GOVERNING LAW
-------------
This Agreement shall be governed by and construed in accordance with the
laws of the State of Connecticut.
8. REVOCATION OF PRIOR AGREEMENTS
------------------------------
This Agreement and any subsequent written amendments constitute the entire
agreement between the Company and the Broker-Dealer. This Agreement terminates
and supersedes all previous contracts, agreements or arrangements made between
the parties in connection with the Contracts described in this Agreement.
9. SEVERABILITY
------------
The provisions of this Agreement are severable, and if any provision of this
Agreement or any amendment to it is found to be invalid, such provision shall
not affect any other provision of the Agreement that can be given effect without
the invalid provision.
6
<PAGE>
10. WAIVER
------
Failure of either party to require performance of any provision of this
Agreement shall not constitute a waiver of that party's right to enforce such
provision at a later time. Waiver of any breach of any provision shall not
constitute a waiver of any succeeding breach.
11. TERMINATION
-----------
A. This Agreement shall terminate:
(i) If the Broker-Dealer is dissolved, liquidated, or otherwise ceases
business operations;
(ii) If the Broker-Dealer fails, in the Company's sole judgment, to
comply with any of its obligations under this Agreement;
(iii) If the Company fails, in the Broker-Dealer's sole judgment, to
comply with any of its obligations under this Agreement;
(iv) If the Broker-Dealer's annuity license or appointment to represent
the Company is terminated;
(v) If the Broker-Dealer's SEC, state or NASD registration or membership
is suspended, terminated or otherwise restricted so as to render the Broker-
Dealer, in the Company's opinion, unable to perform its obligations pursuant to
this Agreement.
(vi) At the end of any calendar year, beginning with __________________,
19___, during which the Broker fails to maintain a minimum production level of
$_________________ of annualized paid deposits through the sale of the Contracts
under this Agreement.
B. The termination date of this Agreement for any of these reasons shall be
the date of occurrence.
C. Notwithstanding the provisions of Section 11.A., the Company and the
Broker-Dealer shall have the right to terminate this Agreement for any reason.
Termination in accordance with this Section 11.C. shall be effective thirty (30)
days from the date notice is given by the terminating party.
D. Upon termination of this Agreement, all authorizations, rights and
obligations shall cease except the provisions set forth in Sections 3.D. and
E., 4, and 5.
7
<PAGE>
12. NOTICE
------
Any notice required by the terms of this Agreement or any attachment
hereto, shall be valid if in writing and hand delivered, or sent by United
States mail postage prepaid, overnight delivery service or facsimile
transmission to the other party at the address provided below such party's
signature hereto.
13. FORCE MAJEURE
-------------
No party to this Agreement shall be responsible to the other for delays or
errors in its performance or other breach under this Agreement occurring solely
by reason of circumstances beyond its control, including acts of civil or
military authority, national emergencies, fire, major mechanical breakdown,
labor disputes, flood or catastrophe, acts of God, insurrection, war, riots,
delays of supplier, or failure of transportation, communication or power supply.
14. HEADINGS
--------
The headings in this Agreement are for reference purposes only and shall
not be deemed part of this Agreement or affect its meaning or interpretation.
15. COUNTERPARTS
------------
This Agreement may be executed in any number of counterparts, all of which,
taken together, shall constitute one agreement, and any party hereto may execute
this Agreement by signing any such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By:__________________________________ Date:___________________
Name:________________________________
Title:
Address: 151 Farmington Avenue
----------------------------
Hartford, CT 06156
- -------------------------------------
By:__________________________________ Date:___________________
Name:________________________________
Title:_______________________________
Address: ___________________________
8
<PAGE>
Exhibit 24(b)(3.2)
PRINCIPAL UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT ("Agreement ") is effective as of the _____ day of
__________, 19___, by and between Aetna Insurance Company of America ("AICA"),
on its own behalf and on behalf of Variable Annuity Account I and Variable
Annuity Account II (each, the "Account"), separate accounts of AICA, and Aetna
Life Insurance and Annuity Company, (the "Underwriter").
WHEREAS, the Account was established pursuant to authority granted by a
resolution of AICA's Board of Directors dated May 31, 1994;
WHEREAS, the Account will maintain the net proceeds of and reserves for
certain variable annuity contracts issued by AICA (the "Contracts");
WHEREAS, AICA will register the Account as a unit investment trust under the
Investment Company Act of 1940 and will register the Contracts for sale under
the Securities Act of 1933; and
WHEREAS, AICA and the Account desire to have the Contracts sold and
distributed through the Underwriter, and the Underwriter is willing to sell and
distribute such Contracts under the terms stated herein;
1
<PAGE>
NOW THEREFORE, in consideration of their mutual promises the parties hereto
agree as follows:
1. Principal Underwriter
---------------------
AICA grants to the Underwriter the exclusive right to be, and the Underwriter
agrees to serve as, distributor and principal underwriter of the Contracts
during the term of this Agreement. The Underwriter agrees to use its best
efforts to solicit applications for the Contracts, and to undertake, at its own
expense, to provide all sales services relative to the Contracts and to perform
otherwise all duties and functions that are necessary and proper for the
distribution of the Contracts.
2. Offer by Prospectus
-------------------
The Underwriter agrees to offer the Contracts for sale in accordance with the
prospectus therefore then in effect. The underwriter is not authorized to give
any information or to make any representations concerning the Contracts other
than those contained in the current prospectus therefore filed with the
Securities and Exchange Commission ("SEC") or in such sales literature as may be
authorized by AICA.
3. Sales Agreements
----------------
The Underwriter is hereby authorized to enter into written sales agreements
for the sale of the Contracts on terms and conditions not inconsistent with and
subject to this Agreement with other broker-dealers that agree to participate in
the distribution of the Contracts on a best efforts basis.
2
<PAGE>
4. Registration and Responsibility of Underwriter
----------------------------------------------
The Underwriter represents that it is registered as a broker-dealer with the
SEC under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. ("NASD") and shall be registered if
necessary or otherwise appropriately qualified under the securities laws of any
state or other jurisdiction. The Underwriter shall be responsible for carrying
out its sales and underwriting obligations hereunder in compliance with the NASD
Rules of Fair Practice and federal and state securities laws and regulations.
In this connection, the Underwriter agrees that it shall be responsible for:
(a) ensuring that no person shall offer or sell the Contracts on its behalf
until such person is duly registered as a representative of the Underwriter,
duly licensed and appointed by AICA, and that any organizations, their agents or
representatives, and any brokers or other persons offering or selling the
Contracts are similarly duly and appropriately licensed, registered, appointed
and otherwise qualified to offer and sell the Contracts under the federal
securities laws and any applicable securities and insurance laws of each state
or other jurisdiction in which the Contracts may be lawfully sold and in which
AICA is licensed to sell the Contracts; and
(b) the training, supervision and control of the Underwriter's registered
representatives for purposes of complying with the NASD Rules of Fair Practice
and federal and state securities law requirements applicable in connection with
the offering and sale of the Contracts. In this connection, the Underwriter
shall:
3
<PAGE>
(i) Conduct or oversee such training, including the preparation and
utilization of training materials, as in the opinion of the Underwriter is
necessary to accomplish the purposes of this Agreement;
(ii) Establish and implement reasonable written procedures for
supervision of sales practices of its registered representatives selling the
Contracts;
(iii) Take reasonable steps to ensure that its registered
representatives shall not make recommendations to an applicant to purchase a
Contract and shall not issue a Contract in the absence of reasonable grounds to
believe that the purchase of the Contract is suitable for such applicant; and
(iv) Design, prepare, print and mail all sales and promotional materials
in a manner that is consistent with the requirements of Section 2 hereof,
updating the same as may be appropriate from time to time.
5. Insurance Licenses
------------------
AICA shall apply for the proper insurance licenses in the appropriate states
or jurisdictions for the designated registered representatives of the
Underwriter or other broker-dealers that have entered agreements with the
Underwriter for the sale of the Contracts; provided, however, that AICA reserves
the right to refuse to appoint any person or organization as an agent or broker
and to terminate an agent or broker once appointed. The Underwriter shall
ensure that no person shall offer or sell the Contracts until duly licensed and
appointed by AICA in the appropriate states or other jurisdiction.
4
<PAGE>
6. Administrative Services, Books, Records and Reports
---------------------------------------------------
The Underwriter shall cause to be maintained and preserved for the periods
prescribed such accounts, books and other documents as are required of it by the
Investment Company Act of 1940 and any other applicable laws and regulations.
The books, accounts and records of AICA, the Account and the Underwriter as to
all transactions effected in accordance with this Agreement shall be maintained
so as to clearly and accurately disclose the nature and details of such
transactions, including the sale of Contracts and payment of commissions and
service fees by AICA. The Underwriter shall furnish AICA with such reports as
it may reasonably request for the purpose of meeting its reporting and record
keeping requirements in accordance with applicable laws and regulations.
7. Compensation to Underwriter
---------------------------
AICA will pay the Underwriter for services rendered hereunder as billed by the
Underwriter and agreed to by AICA.
8. Non Exclusivity
---------------
The services of the Underwriter to the Account hereunder are not to be deemed
exclusive and the Underwriter shall be free to render similar services to others
as long as its services provided hereunder are not impaired or interfered with
thereby.
5
<PAGE>
9. Non Assignability
-----------------
This Agreement shall be nonassignable by the parties hereto.
10. Amendment
---------
This Agreement shall be amended only by written agreement of the parties
hereto.
11. Termination
-----------
(a) This Agreement may be terminated by either party hereto upon 60 days'
written notice to the other party.
(b) This Agreement may be terminated upon written notice of one party to
the other party hereto in the event of bankruptcy or insolvency of such party to
which notice is given.
(c) This Agreement may be terminated at any time upon the mutual written
consent of the parties hereto.
(d) Upon termination of this Agreement, all authorizations, rights and
obligations shall cease except the obligations to settle accounts hereunder,
including payment of contributions subsequently received for Contracts in effect
at the time of termination or issued pursuant to applications received by AICA
prior to termination.
12. Applicable Law
--------------
This Agreement shall be construed and enforced in accordance with and governed
by the laws of the State of Connecticut.
13. Severability
------------
If any provision of this Agreement shall be held or made invalid by a court,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby.
6
<PAGE>
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be signed
by their respective officials thereunder duly authorized and seals to be affixed
as of the day and year first above written.
AETNA INSURANCE COMPANY OF AMERICA
By _______________________________________
Its ______________________________________
AETNA INSURANCE COMPANY OF AMERICA,
ON BEHALF OF ITS VARIABLE ANNUITY
ACCOUNTS I AND II
By _______________________________________
Its ______________________________________
AETNA LIFE INSURANCE AND
ANNUITY COMPANY
By _______________________________________
Its ______________________________________
7
<PAGE>
Exhibit 24(b)(4.1)
---------------------------------------------------------
[LOGO OF AETNA Aetna Insurance Company of America
INSURANCE COMPANY Home Office: 151 Farmington Avenue
OF AMERICA Hartford, Connecticut 06156
APPEARS HERE] (800) 531-4547
You may call the toll-free number shown above to get
answers to your questions or help to resolve a complaint.
Aetna Insurance Company of America, herein called Aetna,
agrees to pay the benefits stated in this Contract.
Specifications
- --------------------------------------------------------------------------------
Plan
MARATHON PLUS
- --------------------------------------------------------------------------------
Type of Plan
INDIVIDUAL RETIREMENT ANNUITY ROLLOVER ACCOUNT
- --------------------------------------------------------------------------------
Contract Holder
E.G. ANYBROKER
- --------------------------------------------------------------------------------
Contract No.
SPECIMEN
- --------------------------------------------------------------------------------
Effective Date
SEPTEMBER 1, 1993
- --------------------------------------------------------------------------------
This Contract is Delivered in YOUR STATE and is Subject to the
Laws of that Jurisdiction
THE VARIABLE FEATURES OF THE GROUP CONTRACT ARE DESCRIBED IN PARTS III and V.
Right to Cancel
- --------------------------------------------------------------------------------
The Contract Holder may cancel this Contract within 10 days of receiving it, by
sending a written notice to Aetna at the above address or to the agent from whom
it was purchased. Aetna will return all payments made for this Contract within
7 days after it receives the notice of cancellation and this Contract at its
Home Office.
This page, the following pages, and the application make up the entire Contract.
Signed at the Home Office on the Effective Date.
/s/ Signature Appears Here /s/ Signature Appears Here
President Secretary
Group Variable, Fixed, or Combination Annuity Contract
Nonparticipating
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA.
APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR
DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT
APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY.
<PAGE>
Specifications
- --------------------------------------------------------------------------------
Guaranteed There is a guaranteed interest rate for Purchase Payment(s)
Interest Rate held in the MG Account. (See Contract Schedule I).
- --------------------------------------------------------------------------------
Deductions from There will be deductions for mortality and expense risks and
the Separate administrative fees. (See Contract Schedule I and II).
Account
- --------------------------------------------------------------------------------
Deduction from Purchase Payment(s) are subject to a deduction for premium
Purchase taxes, if any. (See 3.01.)
Payment(s)
- --------------------------------------------------------------------------------
Surrender There will be a charge deducted upon surrender. (See Contract
Fee Schedule I).
This Contract is a legal contract and constitutes the entire legal relationship
between Aetna and the Contract Holder.
READ THIS CONTRACT CAREFULLY. This Contract sets forth, in detail, all of the
rights and obligations of both you and Aetna. IT IS THEREFORE IMPORTANT THAT YOU
READ THIS CONTRACT CAREFULLY.
2
<PAGE>
Contract Schedule I
Accumulation Period
Separate Account
- -------------------------------------------------------------------------------
Separate Account: Variable Annuity Account I
Charges to Separate A daily charge is deducted from any portion of
Account: the Current Value allocated to the Separate
Account. The deduction is the daily equivalent
of the annual effective percentage shown in the
following chart:
Administrative Charge 0.15%
Mortality Risk Charge 0.35%
Expense Risk Charge 0.90%
-----
Total Separate Account
Charges 1.40%
Marathon Guaranteed Account (MG Account)
- -------------------------------------------------------------------------------
Minimum Guaranteed Interest Rate (effective
annual rate of return): 3.0%.
Separate Account and MG Account
- -------------------------------------------------------------------------------
Transfers: An unlimited number of Transfers may be made
during the Accumulation Period. Aetna allows 12
free Transfers in any calendar year.
Thereafter, Aetna reserves the right to charge
$10 for each subsequent Transfer.
Maintenance Fee: The annual Maintenance Fee is $30. If the
Account's Current Value is $50,000 or more on
the date the Maintenance Fee is to be deducted,
the Maintenance Fee is $0.
3
<PAGE>
Contract Schedule I (Continued)
Accumulation Period
Separate Account and MG Account (Cont'd)
- --------------------------------------------------------------------------------
Surrender Fee: For each surrender, the Surrender Fee will be determined
as follows:
Surrender Fee
Length of Time from Deposit of Net (as percentage of
Purchase Payment (Years) Net Purchase Payment)
Less than 2 years 7%
2 or more but less than 4 years 6%
4 or more but less than 5 years 5%
5 or more but less than 6 years 4%
6 or more but less than 7 years 3%
7 years or more 0%
Systematic Withdrawal The specified payment or specified percentage may not be
Option (SWO): greater than 10% of the Account's Current Value at time
of election.
See 1. GENERAL DEFINITIONS for explanations.
4
<PAGE>
Contract Schedule II
Annuity Period
Separate Account
- --------------------------------------------------------------------------------
Charges to Separate A daily charge at an annual effective rate of
Account: 1.25% for Annuity mortality and expensive
risks. The administrative charge is established
upon election of an Annuity option. This charge
will not exceed 0.25%.
Variable Annuity Assumed If a Variable Annuity is chosen, an assumed
Annual Net Return Rate: annual net return rate of 5.0% may be elected.
If 5.0% is not elected, Aetna will use an
assumed annual net return rate of 3.5%.
The assumed annual net return rate factor for
3.5% per year is 0.9999058.
The assumed annual net return rate factor for
5.0% per year is 0.9998663.
If the portion of a Variable Annuity payment
for any Fund is not to decrease, the Annuity
return factor under the Separate Account for
that Fund must be:
(a) 4.75% on an annual basis plus an annual
return of up to 0.25% to offset the
administrative charge set at the time
Annuity payments commence if an assumed
annual net return rate of 3.5% is chosen;
or
(b) 6.25% on an annual basis plus an annual
return of up to 0.25% to offset the
administrative charge set at the time
Annuity payments commence, if an assumed
annual net return rate of 5% is chosen.
Fixed Annuity
- --------------------------------------------------------------------------------
Minimum Guaranteed Interest Rate (effective
annual rate of return): 3.0%
See 1. GENERAL DEFINITIONS for explanations.
5
<PAGE>
TABLE OF CONTENTS
I. GENERAL DEFINITIONS
- ---------------------------------------------------------------------------
Page
1.01 Account............................................................. 9
1.02 Accumulation Period................................................. 9
1.03 Adjusted Current Value.............................................. 9
1.04 Annuitant........................................................... 9
1.05 Annuity............................................................. 9
1.06 *Beneficiary......................................................... 9
1.07 Certificate Holder.................................................. 9
1.08 Code................................................................ 9
1.09 Contract............................................................ 9
1.10 Contract Holder..................................................... 9
1.11 Current Value....................................................... 10
1.12 Deposit Period...................................................... 10
1.13 Fixed Annuity....................................................... 10
1.14 Fund(s)............................................................. 10
1.15 General Account..................................................... 10
1.16 Guaranteed Rates - MG Account....................................... 10
1.17 Guaranteed Term..................................................... 10
1.18 Guaranteed Term(s) Groups........................................... 10
1.19 Maintenance Fee..................................................... 11
1.20 Marathon Guaranteed Account (MG Account)............................ 11
1.21 Market Value Adjustment (MVA)....................................... 11
1.22 Matured Term Value.................................................. 11
1.23 Matured Term Value Transfer......................................... 11
1.24 Maturity Date....................................................... 11
1.25 Net Purchase Payment................................................ 11
1.26 Nonunitized Separate Account........................................ 11
1.27 Purchase Payment.................................................... 11
1.28 Reinvestment........................................................ 12
1.29 Separate Account.................................................... 12
<PAGE>
Page
1.30 Surrender Value.................................................... 12
1.31 Transfers.......................................................... 12
1.32 Valuation Period (Period).......................................... 12
1.33 Variable Annuity................................................... 12
II. GENERAL PROVISIONS
- --------------------------------------------------------------------------
2.01 Change of Contract................................................. 12
2.02 Change of Fund(s).................................................. 13
2.03 Nonparticipating Contract.......................................... 14
2.04 Payments and Elections............................................. 14
2.05 State Laws......................................................... 14
2.06 Control of Contract................................................ 14
2.07 Designation of Beneficiary......................................... 14
2.08 Misstatements and Adjustments...................................... 15
2.09 Incontestability................................................... 15
2.10 Grace Period....................................................... 15
2.11 Individual Certificates............................................ 15
III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS
- --------------------------------------------------------------------------
3.01 Net Purchase Payment............................................... 15
3.02 Certificate Holder's Account....................................... 15
3.03 Fund(s) Record Units - Separate Account............................ 15
3.04 Net Return Factor(s) - Separate Account............................ 15
3.05 Fund Record Unit Value - Separate Account.......................... 16
3.06 Market Value Adjustment............................................ 16
3.07 Transfer of Current Value from the Funds or MG Account............. 17
3.08 Reports............................................................ 18
3.09 Notice to the Certificate Holder................................... 18
3.10 Loans.............................................................. 18
3.11 Distribution Options............................................... 18
3.12 Death Benefit Amount............................................... 22
7
<PAGE>
Page
3.13 Death Benefit Options Available to Beneficiary..................... 22
3.14 Required Distribution to Certificate Holder/Beneficiary............ 23
3.15 Liquidation of Surrender Value..................................... 24
3.16 Surrender Fee...................................................... 24
3.17 Payment of Surrender Value......................................... 25
3.18 Reinstatement...................................................... 25
3.19 Payment of Adjusted Current Value.................................. 26
IV. ANNUITY PROVISIONS
- --------------------------------------------------------------------------
4.01 Choices to be Made................................................. 26
4.02 Annuity Payments to Certificate Holder............................. 26
4.03 Annuity Payments to Beneficiary.................................... 27
4.04 Terms of Annuity Options........................................... 27
4.05 Death of Annuitant/Beneficiary..................................... 28
4.06 Fund(s) Annuity Units - Separate Account........................... 28
4.07 Fund(s) Annuity Unit Value - Separate Account...................... 29
4.08 Annuity Net Return Factor(s) - Separate Account.................... 29
4.09 Annuity Options.................................................... 29
8
<PAGE>
I. GENERAL DEFINITIONS
- -------------------------------------------------------------------------------
1.01 Account: A record established for each Certificate
Holder to maintain the value of the Net
Purchase Payment held on his/her behalf
during the Accumulation Period.
1.02 Accumulation Period: The period during which the Net Purchase
Payment is applied to an Account to provide
future Annuity payment(s).
1.03 Adjusted Current Value: The Current Value of an Account plus or
minus any aggregate MG Account MVA, if
applicable. (See 1.21)
1.04 Annuitant: The person whose life if measured for
purposes of the guaranteed death benefit and
the duration of Annuity payments under an
Account. The Certificate Holder and
Annuitant must be the same person under an
Account.
1.05 Annuity: Payment of an income:
(a) For the life of one or two persons;
(b) For a stated period; or
(c) For some combination of (a) and (b).
1.06 Beneficiary: The individual or estate entitled to receive
any payment from an Account upon the death
of the Annuitant.
1.07 Certificate Holder: A person who purchases an interest in this
Contract as evidenced by a certificate.
1.08 Code: The Internal Revenue Code of 1986, as it
may be amended from time to time.
1.09 Contract: This agreement between Aetna and the
Contract Holder to provide annuities which
qualify as Individual Retirement Annuities
under Code Section 408(b) for the exclusive
benefit of the Certificate Holder(s) or
their Beneficiaries.
1.10 Contract Holder: The entity to which the Contract is issued.
The Contract is offered to:
(a) National Association of Securities
Dealers, Inc. ("NASD") member broker-
dealers selected by Aetna, who have a
minimum net capital of $250,000 or
more, including broker-dealer
subsidiaries of banks and savings and
loan associations, to provide
Individual Retirement Annuities under
Code Section 408 to their customers;
and
(b) Employers who sponsor Individual
Retirement Annuity plans under Code
Section 408 for their employees.
9
<PAGE>
1.11 Current Value: As of the most recent Valuation Period, the
Net Purchase Payment and any additional
amount deposited pursuant to 3.12 plus any
interest added to the portion allocated to
the MG Account; and plus or minus the
investment experience of the portion
allocated to the Funds since deposit; less
all Maintenance Fees deducted, any amounts
surrendered and any amounts applied to an
Annuity.
1.12 Deposit Period: A calendar week, a calendar month, a
calendar quarter, or any other period of
time specified by Aetna during which the
Net Purchase Payment, Transfers and
Reinvestments are accepted into the MG
Account for one or more Guaranteed Terms.
Aetna reserves the right to extend the
Deposit Period.
1.13 Fixed Annuity: An Annuity with payments that do not vary
in amount.
1.14 Fund(s): The open-end management investment
companies (mutual funds) in which the
Separate Account invests.
1.15 General Account: The account holding the assets of Aetna,
other than those assets held in Aetna's
separate accounts.
1.16 Guaranteed Rates - Aetna will declare the interest rate(s)
MG Account: applicable to a specific Guaranteed Term at
the start of the Deposit Period for that
Guaranteed Term. The rate(s) are guaranteed
by Aetna for that Deposit Period and the
ensuing Guaranteed Term. The Guaranteed
Rates are annual effective yields. That is,
interest is credited daily at a rate that
will produce the Guaranteed Rate over the
period of a year. No Guaranteed Rate will
ever be less than the Minimum Guaranteed
Rate shown on Contract Schedule I.
For Guaranteed Terms of one year or less,
one Guaranteed Rate is credited for the
full Guaranteed Term. For longer Guaranteed
Terms, an initial Guaranteed Rate is
credited from the date of deposit to the
end of a specified period within the
Guaranteed Term. There may be different
Guaranteed Rate(s) declared for subsequent
specified time intervals throughout the
Guaranteed Term.
1.17 Guaranteed Term: The period of time for which MG Account
Guaranteed Rates are guaranteed on Net
Purchase Payments, Transfers and
Reinvestments made into a current Deposit
Period for the MG Account. Such period
begins on the day following the close of
the Deposit Period and ends on the
designated Maturity Date. Guaranteed Terms
are offered at Aetna'a discretion for
various lengths of time ranging up to and
including ten years.
During a Deposit Period, Aetna may make
available any number of Guaranteed Terms.
The Certificate Holder may allocate the Net
Purchase Payment and Transfers into any or
all of the available Guaranteed Terms.
1.18 Guaranteed Term(s) All MG Account Guaranteed Term(s) with the
Groups: same length of time from the close of the
Deposit Period until the designated
Maturity Date.
10
<PAGE>
1.19 Maintenance Fee: The Maintenance Fee (see Contract Schedule
I) will be deducted during the Accumulation
Period from the Current Value on each
anniversary of the date the Account is
established and upon surrender of the entire
Account.
1.20 Marathon Guaranteed An accumulation option where Aetna guarantees
Account (MG Account): stipulated rate(s) of interest for specified
periods of time. All assets of Aetna,
including amounts in the Nonunitized
Separate Account, are available to meet the
guarantees under the MG Account.
1.21 Market Value Adjustment An adjustment to the amount withdrawn or
(MVA): transferred from an MG Account Guaranteed
Term prior to the end of that Guaranteed
Term. The adjustment reflects the change in
the value of the investment due to changes
in interest rates since the date of deposit
and is computed using the formula given in
3.06. The adjustment is expressed as a
percentage of each dollar being withdrawn.
1.22 Matured Term Value: The amount payable on an MG Account
Guaranteed Term's Maturity Date.
1.23 Matured Term Value During the calendar month following an MG
Transfer: Account Maturity Date, the Certificate
Holder may notify Aetna's Home Office in
writing to Transfer or surrender all or part
of the Matured Term Value, plus interest at
the new Guaranteed Rate accrued thereon,
from the MG Account without an MVA. This
provision only applies to the first such
written request received from the
Certificate Holder during this period for
any Matured Term Value.
1.24 Maturity Date: The last date of an MG Account Guaranteed
Term.
1.25 Net Purchase Payment: The Purchase Payment less premium taxes, as
applicable.
1.26 Nonunitized Separate A separate account set up by Aetna under
Account: Title 38, Section 38a-433, of the
Connecticut General Statutes, that holds
assets for MG Account Terms. There are no
discrete units for this Account. The
Certificate Holder does not participate in
the investment gain or loss from the assets
held in the Nonunitized Separate Account.
Such gain or loss is borne entirely by
Aetna. These assets may be chargeable with
liabilities arising out of any other
business of Aetna.
1.27 Purchase Payment: The cash payment accepted by Aetna at its
Home Office which is a rollover amount under
Code Section 402(c), 403(a)(4), 403(b)(8),
or 408(d)(3). Aetna may require verification
that a rollover amount qualifies as such
under the Code. Payments to Simplified
Employee Pension plans and annual deductible
and nondeductible contributions to
Individual Retirement Annuities are not
accepted under this Contract.
Aetna reserves the right to refuse to accept
any Purchase Payment at any time for any
reason. No advance notice will be given to
the Contract Holder or Certificate Holder.
11
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1.28 Reinvestment: Aetna will mail a notice to the Certificate
Holder at least 18 calendar days before a
Guaranteed Term's Maturity Date. This notice
will contain the Terms available during current
Deposit Periods with their Guaranteed Rate(s)
and projected Matured Term Value. If no
specific direction is given by the Certificate
Holder prior to the Maturity Date, each Matured
Term Value will be reinvested in the current
Deposit Period for a Guaranteed Term of the
same duration. If a Guaranteed Term of the same
duration is unavailable, each Matured Term
Value will automatically be reinvested in the
current Deposit Period for the next shortest
Guaranteed Term available. If no shorter
Guaranteed Term is available, the next longer
Guaranteed Term will be used. Aetna will mail a
confirmation statement to the Certificate
Holder the next business day after the Maturity
Date. This notice will state the Guaranteed
Term and Guaranteed Rate(s) which will apply to
the reinvested Matured Term Value.
1.29 Separate Account: A separate account that buys and holds shares
of the Fund(s). Income, gains or losses,
realized or unrealized, are credited or charged
to the Separate Account without regard to other
income, gains or losses of Aetna. Aetna owns
the assets held in the Separate Account and is
not a trustee as to such amounts. This Separate
Account generally is not guaranteed and is held
at market value. The assets of the Separate
Account, to the extent of reserves and other
contract liabilities of the Account, shall not
be charged with Aetna liabilities.
1.30 Surrender Value: The amount payable by Aetna upon the surrender
of any portion of any Account.
1.31 Transfers: The movement of invested amounts among the
available Fund(s) and the MG Account under this
Contract during the Accumulation Period.
1.32 Valuation Period (Period): The period of time of which a Fund determines
its net asset value, usually 4:15 p.m. Eastern
time each day the New York Stock Exchange is
open until 4:15 p.m. the next such day, or such
other day that one or more of the Funds
determines its net asset value.
1.33 Variable Annuity: An annuity with payments that vary with net
investment results of one or more Funds under
the Separate Account.
II. GENERAL PROVISIONS
- --------------------------------------------------------------------------------
2.01 Change of Contract: Only an authorized officer of Aetna may change
the terms of this Contract. Aetna will notify
the Contract Holder in writing at least 30
days before the effective date of any change.
Any change will not affect the amount or terms
of any Annuity which begins before the change.
Aetna reserves the right to refuse to accept
any Purchase Payment at any time for any
reason. No advance notice will be given to the
Contract Holder or Certificate Holder.
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2.01 Change of Contract Aetna may make any change that affects the MG
(Cont'd): Account Market Value Adjustment (3.06) with at
least 30 days' advance written notice to the
Contract Holder and the Certificate Holder. Any
such change shall become effective for any new
Term and will apply to all present and future
Accounts.
Aetna reserves the right to change the terms of
the distribution options (3.11) for future
elections and discontinue the availability of
these options after proper notification.
Any change that affects any of the following
under this Contract will not apply to Accounts in
existence before the effective date of the
change:
(a) Net Purchase Payment (1.25)
(b) MG Account Guaranteed Rate (1.16)
(c) Net Return Factor(s)-Separate Account (3.04)
(d) Current Value (1.11)
(e) Surrender Value (1.30)
(f) Fund(s) Annuity Unit Value-Separate Account
(4.05)
(g) Annuity options (4.09)
(h) Fixed Annuity Interest Rates (4.01)
(i) Transfers (1.31).
Any change that affects the Annuity options and
the tables for the options may be made:
(a) No earlier than 12 months after the effective
date of this Contract; and
(b) No earlier than 12 months after the effective
date of any prior change.
Any Account established on or after the effective
date of any change will be subject to the change.
If the Contract Holder does not agree to any
change under this provision, no new Accounts may
be established under this Contract. This Contract
may also be changed as deemed necessary by Aetna
to comply with federal or state law.
2.02 Change of Fund(s): Aetna, or the Separate Account, may:
(a) Change the Fund(s) which may be invested in
by the Separate Account; and
(b) Replace the shares of any Fund(s) held in the
Separate Account with shares of any other
Fund(s).
Changes must be:
(a) Approved by a majority vote in the Separate
Account with respect to the Fund(s) whose
shares are to be replaced; or
(b) Deemed necessary by Aetna under the
Investment Company Act of 1940; or
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2.02 Change of Fund(s) (c) Deemed necessary by Aetna to accomplish
(Cont'd): the purpose of the Separate Account.
Aetna will notify the Contract Holder and the
Certificate Holder of any change.
2.03 Nonparticipating Contract: The Contract Holder, Certificate Holders, or
Beneficiaries will not have a right to share
in the earnings of Aetna.
2.04 Payments and Elections: While the Certificate Holder is living, Aetna
will pay the Certificate Holder any Annuity
payments as and when due. After the
Certificate Holder's death, any Annuity
payments required to be made will be paid in
accordance with 4.05 Aetna will determine
other payments and/or elections as of the end
of the Valuation Period in which the request
is received at its Home Office. Such payments
will be made within 7 calendar days of
receipt at its Home Office of a written claim
for payment which is in good order, except as
provided in 3.17.
2.05 State Laws: The Contract and the Certificates comply with
the laws of the state in which they are
delivered. Any surrender, death, or Annuity
payments are equal to or greater than the
minimum required by such laws. Annuity tables
for legal reserve valuation shall be as
required by state law. Such tables may be
different from Annuity tables used to
determine Annuity payments.
2.06 Control of Contract: This is a Contract between the Contract
Holder and Aetna. The Contract Holder has
title to the Contract. Contract Holder rights
are limited to accepting or rejecting
Contract modifications.
Each Certificate Holder has a nonforfeitable
right to all amounts held in his or her
Account. Each Certificate Holder may make any
choices allowed by this Contract for his or
her Account. Choices made under this Contract
must be in writing. Until receipt of such
choices at Aetna'a Home Office, Aetna may
rely on any previous choices made.
The Contract is not subject to the claims of
any creditors of the Contract Holder or the
Certificate Holder except to the extent
permitted by law.
The Account may not be attached, alienated,
or subject to the claims of any creditors of
the Certificate Holder except to the extent
permitted by law. The Account is
nontransferable by the Certificate Holder.
The Certificate Holder may not assign,
transfer, pledge or use as collateral his or
her rights under the Contract.
2.07 Designation of Each Certificate Holder shall name his or her
Beneficiary: Beneficiary. The Beneficiary may be changed
at any time. Changes to a Beneficiary must be
submitted to Aetna's Home Office in writing
and will not be effective until accepted by
Aetna.
14
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2.08 Misstatements and If Aetna finds the age of any Annuitant to
Adjustments: be misstated, the correct facts will be
used to adjust payments.
2.09 Incontestability: Aetna cannot cancel this Contract because
of any error of fact on the application.
Aetna cannot cancel an Account because of
any error of fact on the enrollment form.
2.10 Grace Period: This Contract will remain in effect except
as provided in the Payment of Adjusted
Current Value provision (see 3.19).
2.11 Individual Certificates: Aetna shall issue a certificate to each
Certificate Holder. The certificate will
summarize certain provisions of the
Contract. Certificates are for information
only and are not a part of the Contract.
III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS
- --------------------------------------------------------------------------------
3.01 Net Purchase Payment: This amount is the actual Purchase Payment
less any premium tax. Aetna will generally
deduct the premium tax when Annuity
benefits are elected (see Part IV). If
Aetna determines that under applicable
state law, it must pay a premium tax when
the Purchase Payment is received or
at any other time, it will deduct the tax
at that time.
The Net Purchase Payment will be credited
among:
(a) The current Deposit Period(s) for
Guaranteed Terms under the MG Account; and
(b) The Fund(s) in which the Separate
Account invests.
The Certificate Holder shall tell Aetna
the allocation percentage to be applied to
the current Deposit Period for each of the
available Guaranteed Terms in the MG
Account and/or each Fund.
3.02 Certificate Holder's Aetna will maintain an Account for each
Account: Certificate Holder.
Aetna will declare from time to time the
acceptability and the minimum amount for a
Purchase Payment.
3.03 Fund(s) Record Units- The portion of the Net Purchase Payment
Separate Account: applied to each Fund under the Separate
Account will determine the number of Fund
record units for that Fund. This number is
equal to the portion of the Net Purchase
Payment applied to each Fund divided by
the Fund record unit value (see 3.05) for
the Valuation Period in which the Purchase
Payment is received in good order at
Aetna's Home Office.
3.04 Net Return Factor(s)- The net return factor(s) are used to
Separate Account: compute all Separate Account record units
for any Fund.
The net return factor(s) for each Fund is
equal to 1.0000000 plus the net return
rate.
15
<PAGE>
3.04 Net Return Factor(s)-- The net return rate is equal to:
Separate Account (Cont'd):
(a) The value of the shares of the Fund
held by the Separate Account at the
end of the Valuation Period; minus
(b) The value of the shares of the Fund
held by the Separate Account at the
start of the Valuation Period; plus
or minus
(c) Taxes (or reserves for taxes) on the
Separate Account (if any); divided by
(d) The total value of the Fund(s) record
units and Fund(s) Annuity units of
the Separate Account at the start of
the Valuation Period; minus
(e) A daily Separate Account charge at an
annual rate as shown on Contract
Schedule I for mortality and expense
risks, which may include profit; and
a daily administrative charge.
A net return rate may be more or less
than 0%. The value of a share of the Fund
is equal to the net assets of the Fund
divided by the number of shares outstanding.
3.05 Fund Record Unit A Fund recorded unit value is computed by
Value -- Separate Account: multiplying the net return factors for
the current Valuation Period by the Fund
record unit value for the previous
Period. The dollar value of a Fund record
units, Separate Account assets, and
Variable Annuity payments may go up or
down due to investment gain or loss.
3.06 Market Value Adjustment: There will be an MVA for a withdrawal from the
MG Account before the end of a Guaranteed Term
when the withdrawal is due to:
(a) A Transfer; except as specified in MG
Account Matured Term Value Transfer;
(b) A full or partial surrender, including a
10% free withdrawal under 3.16; or
(c) An election of Annuity option 2 (see
4.09).
Full and partial surrenders and Transfers made
within six months after the date of the
Annuitant's death will be the greater of:
(a) The aggregate MVA amount which is the sum
of all market value adjusted amounts
calculated due to a withdrawal of amounts.
This total may be greater or less than the
Current Value of those amounts; or
(b) The applicable portion of the Current
Value in the MG Account.
After the six-month period, the surrender or
Transfer will be the aggregate MVA amount,
which may be greater or less than the Current
Value of those amounts.
The greater of the aggregate MVA amount or the
applicable portion of the Current Value applies
to amounts withdrawn from the MG Account on
account of an election of Annuity options 3 or
4 (see 4.09).
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<PAGE>
3.06 Market Value Adjustment Market value adjusted amounts will be equal
(Cont'd): to the amount withdrawn multiplied by the
following ratio:
x
---
365
(1 + i)
-----------------
x
---
365
(1 + j)
Where:
i is the Deposit Period Yield
j is the Current Yield
x is the number of days remaining,
(computed from Wednesday of the
week of withdrawal) in the
Guaranteed Term.
The Deposit Period Yield will be determined
as follows:
(a) At the close of the last business day of
each week of the Deposit Period, a yield
will be computed as the average of the
yields on that day of U.S. Treasury Notes
which mature in the last three months of
the Guaranteed Term.
(b) The Deposit Period Yield is the average
of those yields for the Deposit Period.
If withdrawal is made before the close of
the Deposit Period, it is the average of
those yields on each week preceding
withdrawal.
The Current Yield is the average of the
yields on the last business day of the week
preceding withdrawal on the same U.S.
Treasury Notes included in the Deposit
Period Yield.
In the event that no U.S. Treasury Notes
which mature in the last three months of the
Guaranteed Term exist, Aetna reserves the
right to use the U.S. Treasury Notes that
mature in the following quarter.
3.07 Transfer of Current Value Before an Annuity option is elected, all or
from the Funds or MG any portion of the Adjusted Current Value of
Account: the Certificate Holder's Account may be
transferred from any Fund or Guaranteed Term
of the MG Account:
(a) To any other Fund; or
(b) To any Guaranteed Term of the MG Account
available in the current Deposit Period.
Transfer requests can be submitted as a
percentage or as a dollar amount. Aetna may
establish a minimum transfer amount. Within
a Guaranteed Term Group, the amount to be
surrendered or transferred will be withdrawn
first from the oldest Deposit Period, then
from the next oldest, and so on until the
amount requested is satisfied.
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<PAGE>
3.07 Transfer of Current Value The Certificate Holder may make an unlimited
from the Funds or MG number of Transfers during the Accumulation
Account (Cont'd): Period. The number of free Transfers allowed
by Aetna is shown on Contract Schedule I.
Additional Transfers may be subject to a
Transfer fee as shown on Contract Schedule
I. Transfers from the MG Account of a
Matured Term Value on or within one calendar
month after a Term's Maturity Date do not
count against the annual Transfer limit.
Amounts applied to Guaranteed Terms of the
MG Account may not be transferred to the
Funds or to another Guaranteed Term during
the Deposit Period or for 90 days after the
close of the Deposit Period except for
Matured Term Value(s) during the calendar
month following the Term's Maturity Date.
Transfers from Guaranteed Terms of the MG
Account are subject to the MVA provisions
of 3.06.
3.08 Reports: Aetna, as issuer of the Contract, will make
any reports required of it by federal law.
Aetna will furnish annual calendar year
reports concerning the status of the
annuity.
3.09 Notice to the Certificate The Certificate Holder will receive
Holder: quarterly statements from Aetna of:
(a) The value of any amounts held in:
(1) The MG Account; and
(2) The Fund(s) under the Separate
Account.
(b) The number or any Fund(s) record units;
and
(c) The Fund(s) record unit value.
Such number or values will be as of a
specific date no more than 60 days before
the date of the notice.
3.10 Loans: Loans are not available under this Contract.
3.11 Distribution Options: The following distribution options may be
elected by the Certificate Holder during the
Accumulation Period.
(a) Estate Conservation Option (ECO) - A
distribution option under which a
portion of the Account's Current Value
will automatically be surrendered and
distributed each year. ECO payments will
be calculated based on the Account's
full Current Value. The distributed
amount will be withdrawn pro rata from
each investment option used under the
Account. A Surrender Fee will not be
deducted from any portion of the
Adjusted Current Value which is paid as
a distribution under ECO. Certificate
Holders should consult their tax adviser
prior to requesting this distribution
option. Aetna will not be responsible
for any adverse tax consequences due to
receiving ECO payments.
(1) Amount of Distribution: Each year
that ECO is in effect, Aetna will
calculate and distribute an amount
equal to the minimum required
distribution under the Code. The
<PAGE>
3.11 Distribution Options annual distribution will be determined by
(Cont'd): dividing the Current Value as of December
31 of the year prior to the payment year,
by a life expectancy factor.
The Certificate Holder, or spouse
Beneficiary if ECO is elected after the
Certificate Holder's death, shall elect
either single life expectancy or joint
life expectancy. Life expectancy is
computed by use of the expected return
multiples in Tables V and VI of section
1.72-9 of the Income Tax Regulations.
Joint life expectancy can only be elected
based on the joint life expectancy of the
Certificate Holder and his or her
Beneficiary. If the Certificate Holder
makes any changes in the Beneficiary
designation under the Certificate, ECO
distributions after the change will be
recalculated as required by IRS
regulations.
Life expectancies shall be recalculated
annually. If the joint life expectancy is
elected with a non-spouse Beneficiary, the
life expectancy of the non-spouse
Beneficiary may not be recalculated.
Instead, the life expectancy will be
calculated using the attained age of the
Beneficiary during the calendar year in
which the Certificate Holder attains age
70 1/2, and payments for subsequent years
shall be recalculated based on such life
expectancy reduced by one for each
calendar year which has elapsed since the
calendar year life expectancy was first
calculated.
If joint life expectancy is elected with a
spouse Beneficiary, at the death of
either, the payments can continue and will
be calculated based solely on the
survivor's life expectancy. If joint life
expectancy is elected with a non-spouse
Beneficiary and the non-spouse Beneficiary
dies first, payments will continue based
on the joint life expectancy.
If a single life expectancy is elected and
the Certificate Holder dies, or if a joint
life expectancy is elected and the
survivor dies, the death benefits
determined under Section 3.12 will be paid
to the Beneficiary in a lump sum not later
than December 31 following the year of
death.
(2) Minimum Initial Current Value: At its
discretion, Aetna may require a minimum
initial Account Current Value for election
of this option. If after election of this
option, the Current Value is insufficient
to make a scheduled ECO payment, Aetna
will distribute the entire Account
balance.
(3) Date of Distribution: Distribution will be
made annually on the 15th of any month or
such other date Aetna may designate or
allow. The Certificate Holder shall
specify an initial distribution month, not
earlier than the
19
<PAGE>
3.11 Distribution Options calendar year in which the Certificate
(Cont'd): Holder attains age 70 1/2, or such later
time when distributions must commence as
specified under the Code, whichever is
appropriate. For a spouse Beneficiary, the
earliest date is the date of the
Certificate Holder's death.
(4) Election and Revocation: ECO may be
elected by the Certificate Holder by
submitting a written request to Aetna at
his Home Office.
Once elected, this option may be revoked
by the Certificate Holder, or spouse
Beneficiary if elected after the
Certificate Holder's death, by submitting
a written request to Aetna at its Home
Office. Any revocation will apply only to
amounts not yet paid. The Certificate
Holder assumes responsibility for
compliance with minimum distribution rules
under the Code. ECO may be elected only
once by the Certificate Holder or by a
spouse Beneficiary.
(b) Systematic Withdrawal Option (SWO): A
distribution option under which a portion of
the Account's Current Value will automatically
be surrendered and distributed each year. SWO
payments will be calculated based on the
Account's Current Value. The distributed amount
will be withdrawn pro rata from each investment
option used under the Account. A Surrender Fee
will not be deducted from any portion of the
Adjusted Current Value which is paid as a
distribution under SWO. Certificate Holders
should consult their tax adviser prior to
requesting this distribution option. Aetna will
not be responsible for any adverse tax
consequences due to receiving SWO payments.
(1) Amount of Distribution: The Certificate
Holder may elect one of the three payment
methods described below.
(i) Specified Payment: Payments of a
designated dollar amount. The annual
amount may not be greater than the
percentage of the Current Value at
time of election as shown on Contract
Schedule I. This annual dollar amount
will remain constant. At its
discretion, Aetna may require a
minimum initial payment amount; or
(ii) Specified Period: Payments made over
a period of time of at least 10
years. The maximum specified period
shall be determined under the Code
minimum distribution rules. The
annual amount paid each year is
calculated by dividing the Account's
Current Value as of December 31 of
the prior year by the number of
payment years remaining; or
(iii) Specified Percentage: Payment of a
designated percentage which cannot be
greater than the
20
<PAGE>
3.11 Distribution Options percentage of the Current Value at
(Cont'd): the time of election as shown on
Contract Schedule I. The percentage
may be changed by written request.
Aetna reserves the right to limit the
number of times the percentage may be
changed. The annual amount is
calculated by multiplying the Current
Value as of December 31 of the year
prior to the payment year by the
designated percentage.
Payments will be made until the year
the Certificate Holder attains age 70
1/2 or, if elected by the spouse
Beneficiary, the year the Certificate
Holder would have attained age 70
1/2.
Under both the Specified Payment and
Specified Period payment methods, a higher
amount shall be paid in any year if
required under the Code minimum
distribution rules. For purposes of this
determination, life expectancy for the
initial distribution year shall be
calculated based on single life expectancy
Table V of Section 1.72-9 of the Income
Tax Regulations. With each subsequent
year, the life expectancy will be the life
expectancy for the previous year reduced
by one.
Payments upon the Certificate Holder's
death will be made to the Beneficiary in
the manner described in 3.13.
(2) Minimum Initial Current Value: At its
discretion, Aetna may require a minimum
initial Current Value for election of this
option. If after election of this option
the Current Value is insufficient to make
a scheduled SWO payment, Aetna will
distribute the entire Account balance.
(3) Date of Distribution: The Certificate
Holder shall specify the initial
distribution date. The earliest date for
distribution is the first date on which
the Certificate Holder attains age 59 1/2.
As elected by the Certificate Holder, SWO
payments will be made on a monthly,
quarterly, semi-annual or annual basis. If
SWO payments are made more frequently than
annually, the designated annual amount is
divided by the number of payments due each
year. Subsequent distributions will be
made on the 15th of any month or such
other date Aetna may designate or allow.
(4) Election and Revocation: SWO may be
elected by the Certificate Holder, or
spouse Beneficiary if elected after the
Certificate Holder's death, by submitting
a completed and signed election form to
Aetna's Home Office.
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<PAGE>
3.11 Distribution Options Once elected, this option may be
(Cont'd): revoked by the Certificate Holder, or
spouse Beneficiary if elected after
the Certificate Holder's death, by
submitting a written request to Aetna
at its Home Office. Any revocation
will apply only to amounts not yet
paid. SWO may be elected only once by
the Certificate Holder or by the
spouse Beneficiary.
3.12 Death Benefit Amount: If the Certificate Holder/Annuitant dies before
Annuity payments start, the Beneficiary is
entitled to a death benefit under the Account.
The claim date is the date when proof of death
and the Beneficiary's claim are received in good
order at Aetna's Home Office. The amount of the
death benefit is determined as follows:
(a) Death of Certificate Holder/Annuitant less
than 75 years of age: The guaranteed death
benefit is the greatest of:
(1) The Net Purchase Payment made to the
Account minus the sum of all amounts
surrendered, applied to an Annuity, or
deducted from the Account;
(2) The step up value as of the date of
death minus the total of all partial
surrenders, amounts applied to an
Annuity and deductions made from
the Account since determination of the
step up value. The step up value is
the Current Value on the most recent
seventh year anniversary of the date
the Net Purchase Payment is applied to
the Account;
(3) The Account's Current Value as of the
date of death.
The excess, if any, of the guaranteed death
benefit value over the Account's Current
Value is determined as of the date of
death. Any excess amount will be deposited
to the Account and allocated to Aetna
Variable Encore Fund as of the claim date.
The Current Value on the claim date plus
any excess amount deposited becomes the
Account's Current Value.
(b) Death of Certificate Holder/Annuitant age
75 or greater: The death benefit amount is
the Account Current Value on the claim
date.
3.13 Death Benefit Options Prior to any election, or until amounts must be
available to otherwise distributed under this section, the
Beneficiary: Current Value of the Account will be retained in
the Account. The Beneficiary has the right under
the Account to allocate or reallocate any amount
to any of the available investment options
(subject to an MVA, as applicable). The
following options are available to the
Beneficiary:
(a) If the Beneficiary is the Certificate
Holder's surviving spouse, the surviving
spouse may exercise all rights under the
Contract and continue in the Accumulation
Period, or may elect (1), (2), or (3)
below. Under the Code, distributions from
the Account are
22
<PAGE>
3.13 Death Benefit Options not required until December 31st of the year
available to Beneficiary in which the original Certificate Holder would
(Cont'd): have attained age 70 1/2. The Beneficiary may
elect to:
(1) Apply some or all of the Adjusted Current
Value of the Account to Annuity option 2,
3, or 4 (see 4.09);
(2) Apply some or all of the Adjusted Current
Value of the Account to Annuity option 1
(see 4.09); or
(3) Receive, at any time, a lump sum payment
equal to the Adjusted Current Value of
the Account.
If ECO is in effect on the Certificate
Holder's date of death, the surviving spouse
can elect to continue receiving ECO payments
if a joint life expectancy was chosen.
Otherwise, the surviving spouse must receive a
lump sum payment equal to the Adjusted Current
Value.
If SWO is in effect and the Certificate Holder
dies before the required beginning date for
minimum distributions (see 3.14), SWO payments
will cease and the surviving spouse may claim
the death benefit in accordance with the terms
of this section.
If SWO is in effect and the Certificate Holder
dies after the required beginning date for
minimum distributions, the surviving spouse
may elect to continue receiving the SWO
payments. Otherwise, the surviving spouse must
elect to receive a lump sum payment equal to
the Adjusted Current Value.
(b) If the Beneficiary is other than the
Certificate Holder's surviving spouse, then
options (1), (2), or (3) under (a) above
apply. Any portion of the Adjusted Current
Value of the Account that is not applied to
Annuity option 2, 3 or 4 by December 31st of
the year following the year of the Certificate
Holder's death must be distributed by December
31st of the year containing the fifth
anniversary of the Certificate Holder's date
of death.
If ECO or SWO is in effect on the Certificate
Holder's date of death, the Beneficiary must
receive an automatic and immediate lump sum
payment equal to the Adjusted Current Value.
(c) If no Beneficiary exists, a lump sum payment
equal to the Adjusted Current Value will be
made to the Certificate Holder's estate.
3.14 Required Distribution (a) Certificate Holder: The entire interest of the
to Certificate Holder/ Certificate Holder will be distributed or
Beneficiary: begin to be distributed no later than April 1
following the calendar year in which the
Certificate Holder attains age 70 1/2
(required beginning date), over (a) the life
of the Certificate Holder, or the lives of the
Certificate Holder and his or her designated
Beneficiary, or (b) a period certain not
extending beyond the life expectancy of the
Certificate Holder, or the joint and last
survivor expectancy of the Certificate Holder
and his or her designated Beneficiary.
Payments must be made in periodic payments at
intervals no longer than one year. In
addition, payments must be either
nonincreasing or they may
23
<PAGE>
3.14 Required Distribution to increase only as provided in Q&A F-3 of
Certificate Holder/ section 1.401(a)(9)-1 of the Proposed
Beneficiary (Cont'd): Income Tax Regulations.
All distributions made hereunder shall be
made in accordance with the requirements
of section 401(a)(9) of the Code, and the
regulations thereunder, including the
minimum distribution incidental benefit
requirement of section 1.401(a)(9)-2 of
the Proposed Income Tax Regulations.
Distribution may be an Annuity as set
forth in Sections 4.01 through 4.04,
payments under ECO or SWO as defined in
Section 3.11, or a lump sum payment.
(b) Beneficiary: If the Certificate Holder
dies after distribution of his or her
interest has begun, the remaining portion
of such interest will continue to be
distributed at least as rapidly as under
the method of distribution being used
prior to the Certificate Holder's death.
Distributions are considered to have begun
if distributions are made on account of
the Certificate Holder's reaching his or
her required beginning date or if prior to
the required beginning date distributions
irrevocably commence to the Certificate
Holder over a period permitted and in an
Annuity form acceptable under section
1.401(a)(9) of the Income Tax Regulations.
3.15 Liquidation of All or any portion of the Account's Adjusted
Surrender Value: Current Value may be surrendered at any time.
Surrender requests can be submitted as a
percentage of the Account value or as a
specific dollar amount. The Net Purchase
Payment amount is withdrawn first, and then the
excess value, if any. Amounts are withdrawn on
a pro rata basis from the Fund(s) and/or the
Guaranteed Term(s) Groups of the MG Account in
which the Current Value is invested. Within a
Guaranteed Term Group, the amount to be
surrendered or transferred will be withdrawn
first from the oldest Deposit Period, then from
the next oldest, and so on until the amount
requested is satisfied.
After deduction of the Maintenance Fee, if
applicable, the surrendered amount shall be
reduced by a Surrender Fee, if applicable.
3.16 Surrender Fee: The Surrender Fee only applies to the Net
Purchase Payment portion surrendered and varies
according to the elapsed time since deposit
(see Contract Schedule I).
No Surrender Fee is deducted from any portion
of the Current Value which is paid:
(a) To a Beneficiary due to the Certificate
Holder's death before Annuity payments
start;
(b) As a premium for an Annuity option 2, 3 or
4 under this Contract (see 4.09);
24
<PAGE>
3.16 Surrender Fee (Cont'd): (c) As a distribution under the ECO or SWO
provision (see 3.11);
(d) At least 12 months after the date of the
Purchase Payment to the Account, in an
amount equal to or less than 10% of the
Current Value. This applies to the first
surrender request, partial or full, in a
calendar year. The Current Value is
calculated as of the date the surrender
request is received in good order at
Aetna's Home Office. This waiver is not
available to the Certificate Holder while
SWO is in effect;
(e) For a full surrender of the Account where
the Current Value of the Account is $2,500
or less and no surrenders have been taken
from the Account within the prior 12
months;
(f) By Aetna under 3.19; or
(g) If the Certificate Holder has spent at
least 45 consecutive days in a licensed
nursing care facility and each of the
following conditions are met:
(1) more than one calendar year has elapsed
since the date the certificate was
issued; and
(2) the surrender is requested within 3
years of admission to a licensed
nursing care facility.
This waiver does not apply if the
Certificate Holder was in a nursing care
facility at the time the certificate was
issued.
3.17 Payment of Under certain emergency conditions, Aetna may
Surrender VAlue: defer payment:
(a) For a period of up to 6 months (unless not
allowed by state law); or
(b) As provided by federal law.
3.18 Reinstatement: All or a portion of the proceeds of a full
surrender of an Account may be reinvested
within 30 days after the surrender. Any
Maintenance Fee and surrender Fee charged at
the time of surrender on the amount reinvested
will be included in the reinstatement. Any
Market Value Adjustment(s) deducted from
surrenders will not be included in the
reinstatement.
Amounts will be reinstated among the MG Account
and the Funds in the Separate Account in the
same proportion as they were at the time of
surrender. Any amounts reinstated to the MG
Account will be credited to the available
Guaranteed Terms of the current Deposit Period
in the same proportion as they were at the time
of surrender. In the event that a Guaranteed
Term of the same duration is unavailable,
amounts will be reinvested in the next shortest
Guaranteed Term available in the current
Deposit Period. If no shorter Guaranteed Term
is available, the next longer Guaranteed Term
will be used. The number of Fund(s) record
units reinstated will be based on the record
unit value(s) next computed after receipt at
Aetna's
25
<PAGE>
3.18 Reinstatement (Cont'd): Home Office of the reinstatement request and
the amount to be reinstated. Any Maintenance
Fee which falls due after the surrender and
before the reinstatement will be deducted from
the amount reinstated.
Any Account(s) surrendered because the Current
Value was less than $2,500 immediately
following any partial surrender may not be
reinstated (see 3.19).
Reinstatement of an Account is permitted only
once.
3.19 Payment of Adjusted Upon 90 days' written notice to the Certificate
Current Value: Holder, Aetna will terminate any Account if the
Current Value becomes less than $2,500
immediately following any partial surrender.
Aetna does not intend to exercise this right in
cases where an Account Current Value is reduced
to $2,500 or less solely due to investment
performance. A Surrender Fee will not be
deducted from the Adjusted Current Value. This
terminated Adjusted Current Value of an Account
may not be reinstated.
IV. ANNUITY PROVISIONS
- --------------------------------------------------------------------------------
4.01 Choices to be Made: The Certificate Holder may tell Aetna to apply
any portion of the Adjusted Current Value
(minus any premium tax) for an Annuity under
option 2, 3, or 4 (see 4.09). The first Annuity
payment may not be earlier than one calendar
year after the Purchase Payment nor later than
the later of:
(a) The first day of the month following the
Annuitant's 85th birthday; or
(b) The tenth anniversary of the last Purchase
Payment. In lieu of the election of an
Annuity, the Certificate Holder may tell
Aetna to make a lump sum payment.
When an Annuity option is chosen, Aetna must
also be told if payments are to be made other
than monthly and whether to pay:
(a) A Fixed Annuity using the General Account;
(b) A Variable Annuity using any of the Fund(s)
available under this Contract for Annuity
purposes; or
(c) A combination of (a) and (b).
If a Fixed Annuity is chosen, the Annuity
purchase rate for the option chosen reflects
the Minimum Guaranteed Interest Rate (see
Contract Schedule II), but may reflect higher
interest rates. If a Variable Annuity is
chosen, the initial Annuity payment for the
option chosen reflects the assumed annual
return rate elected. (see Contract Schedule
II).
4.02 Annuity Payments to In no event may any payments under an Annuity
Certificate Holder: option extend beyond:
(a) The life of the Certificate Holder;
26
<PAGE>
4.02 Annuity Payments to (b) The lives of the Certificate Holder and
Certificate Holder Beneficiary;
(Cont'd): (c) Any certain period greater than the
Certificate Holder's life expectancy
according to regulations under Code
Section 401(a)(9), determined as of the
date payments are to begin; or
(d) A period greater than the joint and
last survivor life expectancies of the
Certificate Holder and the Certificate
Holder's Beneficiary according to
regulations under Code Section
401(a)(9), determined as of the date
payments are to begin.
4.03 Annuity Payments to In no event may payments to the Beneficiary
Beneficiary: under an Annuity option extend beyond:
(a) The life of the Beneficiary; or
(b) Any certain period greater than the
Beneficiary's life expectancy as
determined by regulations under Code
Section 401(a)(9).
4.04 Terms of Annuity (a) When payments start, the age of the
Options: Annuitant plus the number of years
for which payments are guaranteed must
not exceed 95.
(b) An Annuity option may not be elected if
the first payment would be less than
$50 or if the total payments in a year
would be less than $250 (less if
required by state law). Aetna reserves
the right to increase the minimum first
Annuity payment amount and the annual
minimum Annuity payment amount based
upon increases reflected in the
Consumer Price Index-Urban, (CPI-U)
since July 1, 1993.
(c) If a Fixed Annuity under option 2, 3 or
4 is chosen and a larger payment would
result from applying the Surrender
Value to a current Aetna single premium
immediate Annuity, Aetna will make the
larger payment.
(d) For purposes of calculating the
guaranteed first payment of a Variable
Annuity or the payments for a Fixed
Annuity, the Annuitant's and second
Annuitant's adjusted age will be used.
The Annuitant's and second Annuitant's
adjusted age is his or her age as of
the birthday closest to the Annuity
commencement date reduced by one year
for Annuity commencement dates
occurring during the period of time
from July 1, 1993 through December 31,
1999. The Annuitant's and second
Annuitant's age will be reduced by two
years for Annuity commencement dates
occurring during the period of time
from January 1, 2000 through December
31, 2009. The Annuitant's and second
Annuitant's age will be reduced by one
additional year for Annuity
commencement dates occurring in each
succeeding decade.
The Annuity rates for options 3 and 4
are based on mortality from 1983 Table
a.
(e) Assumed Annual Net Return Rate is the
interest rate used to determine the
amount of the first Annuity payment
under a Variable Annuity as shown on
Contract Schedule II. The Separate
Account must earn this rate plus enough
to cover the
27
<PAGE>
4.04 Terms of Annuity mortality and expense risks charges (which
Options (Cont'd): may include profit) and administrative
charges if future Variable Annuity
Payments are to remain level, (see Annuity
return factor under Variable Annuity
Assumed Annual Net Return Rate on Contract
Schedule II).
(f) Once elected, Annuity payments cannot be
commuted to a lump sum except for Variable
Annuity payments under option 2 (see
4.09). The life expectancy of the
Certificate Holder or Certificate Holder
and second Annuitant shall be irrevocable
upon the election of an Annuity option.
4.05 Death of Annuitant/ (a) When the Annuitant dies under option 2 or
Beneficiary: 3, or both the Annuitant and second
Annuitant die under option 4(d), the
present value of any remaining guaranteed
payments will be paid in one sum to the
Beneficiary, or upon election by the
Beneficiary, any remaining payments will
continue to the Beneficiary. If option 4
has been elected and the Annuitant dies,
the remaining payments will continue to
the second Annuitant as successor payee.
(b) If there is no Beneficiary under option 2,
3 or 4, the present value of any remaining
payments will be paid in one sum to the
Certificate Holder's estate.
(c) If the Beneficiary designated under option
1 dies, the amount held plus accrued
interest will be paid in one sum to a
successor Beneficiary, if any, named by
the designated Beneficiary. If there is no
successor Beneficiary, the lump sum will
be paid to the designated Beneficiary's
estate.
(d) If the Beneficiary dies while receiving
Annuity payments, the present value of any
remaining guaranteed payments will be paid
in one sum to the successor Beneficiary,
or upon election by the successor
Beneficiary, any remaining payments will
continue to the successor Beneficiary. If
no successor Beneficiary has been
designated, the present value of any
remaining guaranteed payments will be paid
in one sum to the Beneficiary's estate.
(e) The present value will be determined as of
the Valuation Period in which proof of
death acceptable to Aetna and a request
for payment is received at Aetna's Home
Office. The interest rate used to
determine the first payment will be used
to calculate the present value.
4.06 Fund(s) Annuity Units-- The number of each Fund's Annuity units is
Separate Account: based on the amount of the first Variable
Annuity payment which is equal to:
(a) The portion of the Current Value applied
to pay a Variable Annuity (minus any
premium tax); divided by
(b) 1,000; multiplied by
(c) The payment rate for the option chosen.
28
<PAGE>
4.06 Fund(s) Annuity Units -- Such amount, or portion, of the variable
Separate Account payment will be divided by the appropriate
(Cont'd): Fund Annuity unit value (see 4.07) on the
tenth Valuation Period before the due date of
the first payment to determine the number of
each Fund Annuity units. The number of each
Fund Annuity units remains fixed. Each future
payment is equal to the sum of the products of
each Fund Annuity unit value multiplied by the
appropriate number of units. The Fund Annuity
unit value on the tenth Valuation Period prior
to the due date of the payment is used.
4.07 Fund(s) Annuity Unit For any Valuation Period, a Fund Annuity unit
Value -- Separate value is equal to:
Account: (a) The value for the previous Period;
multiplied by
(b) The Annuity net return factor(s) (see
4.08 below) for the Period; multiplied by
(c) A factor to reflect the assumed annual
net return rate (see Contract Schedule
II).
The dollar value of a Fund(s) Annuity unit
values and Annuity payments may go up or down
due to investment gain or loss.
4.08 Annuity Net Return The Annuity net return factor(s) are used to
Factor(s) -- Separate compute all Separate Account Annuity Payments
Account: for any Fund.
The Annuity net return factor(s) for each Fund
is equal to 1.0000000 plus the net return
rate.
The net return rate is equal to:
(a) The value of the shares of the Fund held
by the Separate Account at the end of a
Valuation Period; minus
(b) The value of the shares of the Fund held
by the Separate Account at the start of
the Valuation Period; plus or minus
(c) Taxes (or reserves for taxes) on the
Separate Account (if any); divided by
(d) The total value of the Fund(s) Record
Units and Fund(s) Annuity Units of the
Separate Account at the start of the
Valuation Period; minus
(e) A daily charge for Annuity mortality and
expense risks, which may include profit,
and a daily administrative charge (at the
annual rate as shown on Contract Schedule
II).
A net return rate may be more or less than 0%.
The value of a share of the Fund is equal to
the net assets of the Fund divided by the
number of shares outstanding.
Payments shall not be changed due to changes
in the mortality or expense results or
administrative charges.
4.09 Annuity Options: Option 1--Payment of Interest on Sum Left with
Aetna -- This option may be used only by the
beneficiary when the Certificate Holder dies
before Aetna has started paying an Annuity. A
portion or all of the sum paid upon death may
be held under this option and will be held in
the General Account of Aetna at interest (see
4.01). The Beneficiary may later tell Aetna
to:
29
<PAGE>
4.09 Annuity Options (Cont'd): (a) Pay a portion or all of the sum held by
Aetna; or
(b) Apply a portion or all of the sum held by
Aetna to any Annuity option below.
If a nonspouse Beneficiary elects that some or
all of the Account is to be held under this
option, the Beneficiary must tell Aetna to pay
the full sum held under this option by December
31st of the year containing the fifth
anniversary of the Certificate Holder's date of
death.
Option 2 -- Payments for a Stated Period of
Time -- An Annuity will be paid for the number
of years chosen. The number of years must be at
least 5 and not more than 30.
If payments for this option are made under a
Variable Annuity, the present value of any
remaining payments may be withdrawn at any
time. If a withdrawal is requested within 3
years after the start of payments, it will be
treated as a surrender and any applicable
Surrender Fee will be applied (see 3.16).
Option 3 -- Life Income -- An Annuity will be
paid for the life of the Annuitant. If also
chosen, Aetna will guarantee payments for 60,
120, 180, or 240 months.
Option 4 -- Life Income Based upon the Lives of
Two Annuitants -- An Annuity will be paid
during the lives of the Annuitant and a second
Annuitant. Payments will continue until both
Annuitants have died. When this option is
chosen, a choice must be made of:
(a) 100% of the payment to continue after the
first death;
(b) 66 2/3% of the payment to continue after
the first death;
(c) 50% of the payment to continue after the
first death;
(d) Payments for a minimum of 120 months with
100% of the payment to continue after the
first death; or
(e) 100% of the payment to continue at the
death of the second Annuitant and 50% of
the payment to continue at the death of the
Annuitant.
Other Options -- Aetna may make other options
available as allowed by the laws of the state
in which this Contract and the certificate is
delivered.
30
<PAGE>
OPTION 2
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Guaranteed Monthly Quarterly Semi-Annual Annual
Years Rate Payment Payment Payment Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3 3.00% $ 28.99 $ 86.76 $ 172.88 $ 343.23
4 3.00% 22.06 66.02 131.56 261.19
5 3.00% 17.91 53.59 106.78 211.99
6 3.00% 15.14 45.30 90.27 179.22
7 3.00% 13.16 39.39 78.49 155.83
8 3.00% 11.68 34.96 69.66 138.31
9 3.00% 10.53 31.52 62.81 124.69
10 3.00% 9.61 28.77 57.33 113.82
11 3.00% 8.86 26.52 52.85 104.93
12 3.00% 8.24 24.65 49.13 97.54
13 3.00% 7.71 23.08 45.98 91.29
14 3.00% 7.26 21.73 43.29 85.95
15 3.00% 6.87 20.56 40.96 81.33
16 3.00% 6.53 19.54 38.93 77.29
17 3.00% 6.23 18.64 37.14 73.74
18 3.00% 5.96 17.84 35.56 70.59
19 3.00% 5.73 17.13 34.14 67.78
20 3.00% 5.51 16.50 32.87 65.26
21 3.00% 5.32 15.92 31.72 62.98
22 3.00% 5.15 15.40 30.68 60.92
23 3.00% 4.99 14.92 29.74 59.04
24 3.00% 4.84 14.49 28.88 57.33
25 3.00% 4.71 14.09 28.08 55.76
26 3.00% 4.59 13.73 27.36 54.31
27 3.00% 4.47 13.39 26.68 52.97
28 3.00% 4.37 13.08 26.06 51.74
29 3.00% 4.27 12.79 25.49 50.60
30 3.00% 4.18 12.52 24.95 49.53
- --------------------------------------------------------------------------------
</TABLE>
31
<PAGE>
OPTION 3
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
Payments Guaranteed for a Stated Period of Months
-------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Adjusted
Age of None 60 120 180 240
Annuitant
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
50 $ 4.05 $ 4.05 $ 4.03 $ 3.99 $ 3.93
51 4.12 4.11 4.09 4.05 3.99
52 4.19 4.19 4.16 4.11 4.04
53 4.27 4.26 4.23 4.18 4.10
54 4.35 4.34 4.31 4.25 4.16
55 4.44 4.42 4.39 4.32 4.22
56 4.53 4.51 4.47 4.40 4.29
57 4.62 4.61 4.56 4.48 4.35
58 4.72 4.71 4.65 4.56 4.42
59 4.83 4.81 4.75 4.64 4.49
60 4.95 4.93 4.86 4.73 4.55
61 5.07 5.05 4.97 4.83 4.62
62 5.20 5.17 5.08 4.92 4.69
63 5.34 5.31 5.20 5.02 4.76
64 5.49 5.45 5.33 5.12 4.83
65 5.65 5.61 5.47 5.22 4.89
66 5.82 5.77 5.61 5.33 4.96
67 6.01 5.94 5.75 5.44 5.02
68 6.20 6.13 5.91 5.54 5.08
69 6.41 6.33 6.07 5.65 5.14
70 6.64 6.54 6.23 5.76 5.19
71 6.88 6.76 6.41 5.86 5.24
72 7.14 7.00 6.59 5.97 5.28
73 7.43 7.26 6.77 6.06 5.32
74 7.73 7.53 6.96 6.16 5.35
75 8.06 7.82 7.14 6.25 5.38
- --------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
32
<PAGE>
OPTION 4
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
<TABLE>
<CAPTION>
Adjusted Ages
- -----------------------
Second
Annuitant Annuitant Option 4a Option 4b Option 4c Option 4d Option 4e
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.03
55 55 3.88 4.25 4.47 3.87 4.14
55 60 3.99 4.44 4.71 3.98 4.42
60 55 3.99 4.44 4.71 3.98 4.42
60 60 4.24 4.71 4.99 4.23 4.57
60 65 4.38 4.97 5.32 4.38 4.93
65 60 4.38 4.97 5.32 4.38 4.93
65 65 4.72 5.33 5.70 4.71 5.14
65 70 4.93 5.68 6.15 4.91 5.66
70 65 4.93 5.68 6.15 4.91 5.66
70 70 5.40 6.21 6.70 5.36 5.96
70 75 5.69 6.68 7.32 5.62 6.67
75 70 5.69 6.68 7.32 5.62 6.67
75 75 6.37 7.45 8.15 6.23 7.12
75 80 6.78 8.11 8.99 6.54 8.13
- --------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
33
<PAGE>
OPTION 2
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
<TABLE>
<CAPTION>
Monthly Quarterly Semi-Annual Annual
Years Payment Payment Payment Payment
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
3 $ 29.19 $ 87.33 $ 173.91 $ 344.86
4 22.27 66.61 132.65 263.04
5 18.12 54.19 107.92 213.99
6 15.35 45.92 91.44 181.32
7 13.38 40.01 79.69 158.01
8 11.90 35.59 70.88 140.56
9 10.75 32.16 64.05 127.00
10 9.83 29.42 58.59 116.18
11 9.09 27.18 54.13 107.34
12 8.46 25.32 50.42 99.98
13 7.94 23.75 47.29 93.78
14 7.49 22.40 44.62 88.47
15 7.10 21.24 42.31 83.89
16 6.76 20.23 40.29 79.89
17 6.47 19.34 38.51 76.37
18 6.20 18.55 36.94 73.25
19 5.97 17.85 35.54 70.47
20 5.75 17.22 34.28 67.98
21 5.56 16.65 33.15 65.74
22 5.39 16.13 32.13 63.70
23 5.24 15.66 31.19 61.85
24 5.09 15.24 30.34 60.17
25 4.96 14.85 29.56 58.62
26 4.84 14.49 28.85 57.20
27 4.73 14.15 28.19 55.90
28 4.63 13.85 27.58 54.69
29 4.53 13.57 27.02 53.57
30 4.45 13.30 26.49 52.53
- ------------------------------------------------------------------
</TABLE>
34
<PAGE>
OPTION 2
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Monthly Quarterly Semi-Annual Annual
Years Payment Payment Payment Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
3 $ 29.80 $ 89.04 $ 176.99 $ 349.72
4 22.89 68.38 135.93 268.58
5 18.74 56.00 111.33 219.98
6 15.99 47.77 94.96 187.64
7 14.02 41.90 83.30 164.59
8 12.56 37.52 74.58 147.35
9 11.42 34.11 67.81 133.99
10 10.51 31.40 62.42 123.34
11 9.77 29.19 58.03 114.66
12 9.16 27.36 54.38 107.45
13 8.64 25.81 51.31 101.39
14 8.20 24.50 48.69 96.21
15 7.82 23.36 46.44 91.75
16 7.49 22.37 44.47 87.88
17 7.20 21.51 42.75 84.48
18 6.94 20.74 41.23 81.47
19 6.71 20.06 39.88 78.80
20 6.51 19.46 38.68 76.42
21 6.33 18.91 37.59 74.28
22 6.17 18.42 36.62 72.35
23 6.02 17.98 35.73 70.61
24 5.88 17.57 34.93 69.02
25 5.76 17.20 34.20 67.57
26 5.65 16.87 33.53 66.25
27 5.54 16.56 32.92 65.04
28 5.45 16.28 32.35 63.93
29 5.36 16.01 31.83 62.90
30 5.28 15.77 31.35 61.95
- --------------------------------------------------------------------------------
</TABLE>
35
<PAGE>
OPTION 3
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Payments Guaranteed for a Stated Period of Months
-------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Adjusted
Age of None 60 120 180 240
Annuitant
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
50 $ 4.34 $ 4.34 $ 4.31 $ 4.27 $ 4.22
51 4.41 4.40 4.38 4.33 4.27
52 4.48 4.47 4.45 4.40 4.32
53 4.56 4.55 4.52 4.46 4.38
54 4.64 4.63 4.59 4.53 4.44
55 4.72 4.71 4.67 4.60 4.50
56 4.81 4.80 4.75 4.67 4.56
57 4.91 4.89 4.84 4.75 4.62
58 5.01 4.99 4.93 4.83 4.69
59 5.12 5.10 5.03 4.92 4.75
60 5.23 5.21 5.13 5.00 4.82
61 5.36 5.33 5.24 5.09 4.88
62 5.49 5.45 5.35 5.19 4.95
63 5.63 5.59 5.47 5.28 5.02
64 5.78 5.73 5.60 5.38 5.08
65 5.94 5.89 5.73 5.48 5.15
66 6.11 6.05 5.87 5.58 5.21
67 6.29 6.22 6.02 5.69 5.27
68 6.49 6.41 6.17 5.79 5.33
69 6.70 6.60 6.33 5.90 5.38
70 6.92 6.81 6.49 6.00 5.43
71 7.17 7.04 6.66 6.10 5.48
72 7.43 7.27 6.84 6.20 5.52
73 7.71 7.53 7.02 6.30 5.55
74 8.02 7.80 7.20 6.39 5.59
75 8.35 8.08 7.38 6.48 5.62
- --------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
36
<PAGE>
OPTION 3
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
Payments Guaranteed for a Stated Period of Months
-------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Adjusted
Age of None 60 120 180 240
Annuitant
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
50 $ 5.26 $ 5.25 $ 5.22 $ 5.17 $ 5.11
51 5.33 5.32 5.28 5.23 5.15
52 5.40 5.38 5.34 5.29 5.20
53 5.47 5.45 5.41 5.35 5.26
54 5.54 5.53 5.48 5.41 5.31
55 5.63 5.61 5.56 5.47 5.36
56 5.71 5.69 5.63 5.54 5.42
57 5.80 5.78 5.72 5.61 5.47
58 5.90 5.88 5.81 5.69 5.53
59 6.01 5.98 5.90 5.77 5.59
60 6.12 6.09 6.00 5.85 5.65
61 6.24 6.21 6.10 6.93 5.71
62 6.37 6.33 6.21 6.02 5.77
63 6.51 6.46 6.33 6.11 5.83
64 6.66 6.60 6.45 6.20 5.89
65 6.82 6.75 6.57 6.30 5.95
66 6.99 6.91 6.71 6.39 6.01
67 7.17 7.08 6.85 6.49 6.06
68 7.36 7.27 6.99 6.59 6.12
69 7.57 7.46 7.15 6.69 6.17
70 7.80 7.67 7.30 6.78 6.21
71 8.05 7.89 7.47 6.88 6.25
72 8.31 8.13 7.64 6.97 6.29
73 8.59 8.38 7.81 7.06 6.33
74 8.90 8.64 7.99 7.15 6.36
75 9.23 8.93 8.16 7.23 6.38
- --------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
37
<PAGE>
OPTION 4
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Adjusted Ages
- --------------------
Second
Annuitant Annuitant Option 4a Option 4b Option 4c Option 4d Option 4e
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.31
55 55 4.16 4.54 4.76 4.15 4.42
55 60 4.27 4.73 5.00 4.26 4.48
60 55 4.27 4.73 5.00 4.26 4.70
60 60 4.51 4.99 5.27 4.50 4.84
60 65 4.66 5.25 5.61 4.65 4.93
65 60 4.66 5.25 5.61 4.65 5.22
65 65 4.99 5.61 5.99 4.98 5.42
65 70 5.19 5.97 6.44 5.17 5.54
70 65 5.19 5.97 6.44 5.17 5.93
70 70 5.67 6.49 6.99 5.62 6.23
70 75 5.95 6.96 7.61 5.87 6.40
75 70 5.95 6.96 7.61 5.87 6.95
75 75 6.64 7.73 8.43 6.48 7.40
75 80 7.04 8.39 9.29 6.79 7.64
- --------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
38
<PAGE>
OPTION 4
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Adjusted Ages
- --------------------
Second
Annuitant Annuitant Option 4a Option 4b Option 4c Option 4d Option 4e
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 4.88 $ 5.26 $ 5.48 $ 4.88 $ 5.23
55 55 5.04 5.44 5.66 5.04 5.32
55 60 5.15 5.63 5.91 5.14 5.38
60 55 5.15 5.63 5.91 5.14 5.59
60 60 5.37 5.87 6.16 5.37 5.72
60 65 5.52 6.14 6.51 5.51 5.80
65 60 5.52 6.14 6.51 5.51 6.10
65 65 5.83 6.49 6.87 5.82 6.29
65 70 6.04 6.84 7.34 6.00 6.41
70 65 6.04 6.84 7.34 6.00 6.81
70 70 6.49 7.35 7.87 6.44 7.08
70 75 6.77 7.84 8.51 6.68 7.25
75 70 6.77 7.84 8.51 6.68 7.81
75 75 7.45 8.60 9.33 7.27 8.25
75 80 7.86 9.28 10.20 7.57 8.49
- --------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
39
<PAGE>
- --------------------------------------------------------------------------------
[LOGO OF AETNA INSURANCE COMPANY OF AMERICA APPEARS HERE]
Aetna Insurance Company of America
Home Office; 151 Farmington Avenue
Hartford, Connecticut 06156
(800) 531-4547
Group Variable, Fixed, or Combination Annuity Contract
Nonparticipating
- --------------------------------------------------------------------------------
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA.
APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR
DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT
APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY.
<PAGE>
Aetna Insurance Company of America
Endorsement
This Contract is endorsed as follows.
Add the following to Section I General Definitions:
Dollar Cost Averaging - A program that permits the Certificate Holder to
systematically transfer amounts from any of the Funds and the one-year MG
Account Guaranteed Term to any of the Funds by completing the appropriate
section of the enrollment form or a Dollar Cost Averaging election form.
Delete Section 1.21, Market Value Adjustment, and replace it with the following.
1.21 Market Value Adjustment - An adjustment that may apply to an amount
withdrawn or transferred from an MG Account Guaranteed Term prior to
the end of that Guaranteed Term. The adjustment reflects the change in
the value of the investment due to changes in interest rates since the
date of deposit and is computed using the formula given in 3.06. The
adjustment is expressed as a percentage of each dollar withdrawn or
transferred.
Delete the first two paragraphs of Section 3.06, Market Value Adjustment, and
replace it with the following:
3.06 Market Value Adjustment - Except as noted below, there will be an MVA
for a withdrawal from the MG Account before the end of a Guaranteed
Term when the withdrawal is due to:
(a) A Transfer, except for Transfers from the one-year MG Account
Guaranteed Term under the Dollar Cost Averaging program or, as
specified in MG Account Matured Term Value Transfer;
(b) A full or partial surrender (including a 10% free withdrawal under
3.16), except for a partial withdrawal under the Systematic
Withdrawal Option (see 3.10); or
(c) An election of Annuity option 2 (see 4.09).
Full and partial surrenders and Transfers made within six months after
the date of the Annuitant's death will be the greater of:
(a) The aggregate MVA amount which is the sum of all market value
adjusted amounts calculated due to a withdrawal of amounts. This
total may be greater or less than the Current Value of those
amounts; or
<PAGE>
(b) The applicable portion of the Current Value in the MG Account.
Delete Section 3.07, Transfer of Current Value from the Funds or MG Account, and
replace it with the following:
3.07 Transfer of Current Value from the Funds or MG Account - Before an
Annuity option is elected, all or any portion of the Adjusted Current
Value of the Certificate Holder's Account may be transferred from any
Fund or Guaranteed Term of the MG Account:
(a) To any other Fund; or
(b) To any Guaranteed Term of the MG Account available in the current
Deposit Period.
Transfer requests can be submitted as a percentage or as a dollar
amount. Aetna may establish a minimum transfer amount. Within a
Guaranteed Term Group, the amount to be surrendered to transferred
will be withdrawn first from the oldest Deposit Period, then from the
next oldest, and so on until the amount requested is satisfied.
The Certificate Holder may make an unlimited number of Transfers
during the Accumulation Period. The number of free Transfers allowed
by Aetna is shown on Contract Schedule I. Additional Transfers may be
subject to a Transfer fee as shown on Contract Schedule I.
Amounts transferred from the MG Account under the Dollar Cost
Averaging program, or amounts transferred as a Matured Term Value on
or within one calendar month of the Term's Maturity Date, do not count
against the annual Transfer limit.
Amounts applied to Guaranteed Terms of the MG Account may not be
transferred to the Funds or to another Guaranteed Term during the
Deposit Period or for 90 days after the close of the Deposit Period
except for (1) a Matured Term Value(s) during the calendar month
following the Term's Maturity Date and (2) amounts transferred from
the one-year MG Account Guaranteed Term under the Dollar Cost
Averaging program.
2
<PAGE>
Delete the first paragraph in Subsection 3.11(a), Estate Conservation Option
(ECO), and replace it with the following:
(a) Estate Conservation Option (ECO) - A distribution option under which
a portion of the Account's Current Value will be surrendered
automatically and distributed each year. ECO payments will be calculated
based on the Account's full Current Value. The distributed amount will
be withdrawn pro rata from each investment option used under the
Account. A Surrender Fee will not be deducted from any portion of the
Current Value which is paid as a distribution under ECO. Certificate
Holders should consult their tax advisor prior to requesting this
distribution option. Aetna will not be responsible for any adverse tax
consequences due to receiving ECO payments.
Delete the first paragraph 3.11(b), Systematic Withdrawal Option (SWO), and
replace it with the following:
(b) Systematic Withdrawal Option (SWO) - A distribution option under which
a portion of the Account's Current Value will be surrendered
automatically and distributed each year. SWO payments will be calculated
based on the Account's full Current Value. The distributed amount will
be withdrawn pro rata from each investment option used under the
Account. A Surrender Fee will not be deducted from any portion of the
Current Value which is paid as a distribution under SWO. Certificate
Holders should consult their tax advisor prior to requesting this
distribution option. Aetna will not be responsible for any adverse tax
consequences due to receiving SWO payments.
Delete Section 3.12, Death Benefit Amount, and replace it with the following:
3.12 Death Benefit Amount - If the Certificate Holder or Annuitant dies
before Annuity payments start, the Beneficiary is entitled to a death
benefit under the Account. The claim date is the date when proof of
death and the Beneficiary's claim are received in good order at
Aetna's Home Office. The amount of the death benefit is determined as
follows:
(a) Death of Certificate Holder/Annuitant less than 75 years of age:
The guaranteed death benefit is the greatest of:
(1) The sum of all Net Purchase Payment(s) made to the Account
(as of the date of death) minus the sum of all amounts
surrendered, applied to an Annuity, or deducted from the
Account;
3
<PAGE>
(2) The highest step-up value as of the date of death. A step-up
value is determined on each anniversary of the Effective Date.
Each step-up value is calculated as the Account's Current
Value on the Effective Date anniversary, increased by the
amount of any Purchase Payment(s) made, and decreased by the
sum of all amounts surrendered, deducted, and/or applied to an
Annuity option since the Effective Date anniversary.
(3) The Account's Current Value as of the date of death.
The excess, if any, of the guaranteed death benefit value over the
Account's Current Value is determined as of the date of death. Any
excess amount will be deposited in the Account and allocated to
the Aetna Variable Encore Fund as of the claim date. The Current
Value on the claim date, plus any excess amount deposited, becomes
the Account's Current Value.
(b) Death of Certificate Holder/Annuitant age 75 or greater: The death
benefit amount is the greatest of:
(1) The sum of all Net Purchase Payment(s) made to the Account (as
of the date of death) minus the sum of all amounts
surrendered, applied to an Annuity, or deducted from the
Account;
(2) The highest step-up value prior to the Certificate Holder's
75th birthday. A step-up value is determined on each
anniversary of the Effective Date. Each step-up value is
calculated as the Account's Current Value on the Effective
Date anniversary, increased by the amount of any Purchase
Payment(s) made, and decreased by the sum of all amounts
surrendered, deducted, and/or applied to an Annuity option
since the Effective Date anniversary.
(3) The Account's Current Value as of the date of death.
The excess, if any, of the guaranteed death benefit value over the
Account's Current Value is determined as of the date of death. Any
excess amount will be deposited in the Account and allocated to
the Aetna Variable Encore Fund as of the claim date. The Current
Value on the claim date, plus any excess amount deposited, becomes
the Account's Current Value.
(c) At the death of a surviving spouse Beneficiary who continued the
Account in his or her own name, the death benefit amount is equal
to the Account's Current Value less any applicable Surrender Fee
on the amount of any Purchase Payment(s) made since the death of
the Certificate Holder.
4
<PAGE>
Delete Section 3.15, Liquidation of Surrender Value, and replace it with the
following:
3.15 Liquidation of Surrender Value - All or any portion of the Account's
Current Value may be surrendered at any time. Surrender requests can
be submitted as a percentage of the Account's Current Value or as a
specific dollar amount. Net Purchase Payment amounts are withdrawn
first, and then the excess value, if any. For any partial surrender,
amounts are withdrawn on a pro rata basis from the Fund(s) and/or the
Guaranteed Term(s) Groups of the MG Account in which the Current
Value is invested. Within a Guaranteed Term Group, the amount to be
surrendered or transferred will be withdrawn first from the oldest
Deposit Period, then from the next oldest, and so on until the amount
requested is satisfied.
After deduction the Maintenance Fee, if applicable, the surrendered
amount shall be reduced by a Surrender Fee, if applicable. An MVA may
apply to amounts surrendered from the MG Account.
Endorsed and made part of this Contract on the Effective Date of the Contract.
/s/ SIGNATURE APPEARS HERE
President
Aetna Insurance Company of America
5
<PAGE>
Exhibit 24(b)(4.2)
Aetna Insurance Company of America
[LOGO OF Home Office: 151 Farmington Avenue
AETNA Hartford, Connecticut 06156
APPEARS (800) 531-4547
HERE]
You may call the toll-free number shown above to get answers to
your questions or help to resolve a complaint.
Aetna Insurance Company of America, herein called Aetna, agrees
to pay the benefits stated in this Contract.
Specifications
- --------------------------------------------------------------------------------
Plan
MARATHON PLUS
- --------------------------------------------------------------------------------
Type of Plan
FLEXIBLE PREMIUM ACCOUNT
- --------------------------------------------------------------------------------
Contract Holder
E.G. ANYBROKER
- --------------------------------------------------------------------------------
Contract No.
SPECIMEN
- --------------------------------------------------------------------------------
Effective Date
SEPTEMBER 1, 1993
- --------------------------------------------------------------------------------
This Contract is Delivered in YOUR STATE and is Subject to the
Laws of that Jurisdiction
THE VARIABLE FEATURES OF THE GROUP CONTRACT ARE DESCRIBED IN PARTS III AND V.
Right to Cancel
- --------------------------------------------------------------------------------
The contract Holder may cancel this Contract within 10 days of receiving it by
returning this Contract along with a written notice to Aetna at the above
address or to the agent from whom it was purchased. Within 7 days after it
receives the notice of cancellation and this Contract at its Home Office, Aetna
will return the entire consideration paid plus any increase or minus any
decrease in the current value of any funds allocated to the Separate Account.
This page, the following pages, and the application make up the entire Contract.
Signed at the Home Office on the Effective Date.
/s/SIGNATURE APPEARS HERE /s/SIGNATURE APPEARS HERE
President Secretary
Group Variable, Fixed, or Combination Annuity Contract
Nonparticipating
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA.
APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR
DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT
APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY.
<PAGE>
Specifications
- --------------------------------------------------------------------------------
Guaranteed There is a guaranteed interest rate for Purchase
Interest Rate Payment(s) held in the MG Account. (See Contract
Schedule I).
- --------------------------------------------------------------------------------
Deductions from There will be deductions for mortality and expense risks
the Separate and administrative fees. (See Contract Schedule I and
Account II).
- --------------------------------------------------------------------------------
Deduction from Purchase Payment(s) are subject to a deduction for
Purchase Payment(s) premium taxes, if any. (See 3.01).
- --------------------------------------------------------------------------------
Surrender Fee There will be a charge deducted upon surrender. (See
Contract Schedule I).
This Contract is a legal contract and constitutes the entire legal relationship
between Aetna and the Contract Holder.
READ THIS CONTRACT CAREFULLY. This Contract sets forth, in detail, all of the
rights and obligations of both you and Aetna. IT IS THEREFORE IMPORTANT THAT YOU
READ THIS CONTRACT CAREFULLY.
2
<PAGE>
Contract Schedule I
Accumulation Period
Separate Account
- --------------------------------------------------------------------------------
Separate Account: Variable Annuity Account I
Charges to Separate A daily charge is deducted from any portion of
Account: the Current Value allocated to the Separate
Account. The deduction is the daily equivalent
of the annual effective percentage shown in the
following chart:
Administrative Charge 0.15%
Mortality Risk Charge 0.35%
Expense Risk Charge 0.90%
-----
Total Separate Account Charges 1.40%
Marathon Guaranteed Account (MG Account)
- --------------------------------------------------------------------------------
Minimum Guaranteed Interest Rate (effective
annual rate of return): 3.0%.
Separate Account and MG Account
- --------------------------------------------------------------------------------
Transfers: An unlimited number of Transfers may be made
during the Accumulation Period. Aetna allows
12 free Transfers in any calendar year.
Thereafter, Aetna reserves the right to charge
$10 for each subsequent Transfer.
Maintenance Fee: The annual Maintenance Fee is $30. If the
Account's Current Value is $50,000 or more on
the date the Maintenance Fee is to be deducted,
the Maintenance Fee is $0.
3
<PAGE>
Contract Schedule I (Continued)
Accumulation Period
Separate Account and MG Account (Cont'd)
- --------------------------------------------------------------------------------
Surrender Fee: For each surrender, the Surrender Fee for each
Net Purchase Payment will be determined as
follows:
<TABLE>
<CAPTION>
Surrender Fee
Length of Time from Deposit of Net (as percentage of
Purchase Payment (Years) Net Purchase Payment)
<S> <C>
Less than 2 years 7%
2 or more but less than 4 years 6%
4 or more but less than 5 years 5%
5 or more but less than 6 years 4%
6 or more but less than 7 years 3%
7 years or more 0%
</TABLE>
Systematic The specified payment or specified percentage
Withdrawal Option may not be greater than 10% of the Account's
(SWO): Current Value at time of election.
See 1. GENERAL DEFINITIONS for explanations.
4
<PAGE>
Contract Schedule II
Annuity Period
Separate Account
- -------------------------------------------------------------------------------
Charges to Separate A daily charge at an annual effective rate of
Account: 1.25% for Annuity mortality and expense risks.
The administrative charge is established upon
election of an Annuity option. This charge will
not exceed 0.25%.
Variable Annuity Assumed If a Variable Annuity is chosen, an assumed
Annual Net Return Rate: annual net return rate of 5.0% may be elected. If
5.0% is not elected, Aetna will use an assumed
annual net return rate of 3.5%.
The assumed annual net return rate factor for
3.5% per year is 0.9999058.
The assumed annual net return rate factor for
5.0% per year is 0.9998663.
If the portion of a Variable Annuity payment for
any Fund is not to decrease, the Annuity return
factor under the Separate Account for that Fund
must be:
(a) 4.75% on an annual basis plus an annual
return of up to 0.25% to offset the
administrative charge set at the time Annuity
payments commence if an assumed annual net
return rate of 3.5% is chosen; or
(b) 6.25% on an annual basis plus an annual return
of up to 0.25% to offset the administrative
charge set at the time Annuity payments
commence, if an assumed annual net return rate
of 5% is chosen.
Fixed Annuity
- --------------------------------------------------------------------------------
Minimum Guaranteed Interest Rate (effective annual
rate of return): 3.0%
See 1. GENERAL DEFINITIONS for explanations.
5
<PAGE>
TABLE OF CONTENTS
I. GENERAL DEFINITIONS
- ---------------------------------------------------------------
Page
1.01 Account...................................................... 9
1.02 Accumulation Period.......................................... 9
1.03 Adjusted Current Value....................................... 9
1.04 Annuitant.................................................... 9
1.05 Annuity...................................................... 9
1.06 Beneficiary.................................................. 9
1.07 Certificate Holder........................................... 9
1.08 Code......................................................... 9
1.09 Contract..................................................... 9
1.10 Contract Holder.............................................. 9
1.11 Current Value................................................ 10
1.12 Deposit Period............................................... 10
1.13 Fixed Annuity................................................ 10
1.14 Fund(s)...................................................... 10
1.15 General Account.............................................. 10
1.16 Guaranteed Rates - MG Account............................... 10
1.17 Guaranteed Term.............................................. 10
1.18 Guaranteed Term(s) Groups.................................... 10
1.19 Maintenance Fee.............................................. 11
1.20 Marathon Guaranteed Account (MG Account)..................... 11
1.21 Market Value Adjustment (MVA)................................ 11
1.22 Matured Term Value........................................... 11
1.23 Matured Term Value Transfer.................................. 11
1.24 Maturity Date................................................ 11
1.25 Net Purchase Payment(s)...................................... 11
1.26 Nonunitized Separate Account................................. 11
1.27 Purchase Payment(s).......................................... 11
1.28 Reinvestment................................................. 11
1.29 Separate Account............................................. 12
6
<PAGE>
Page
1.30 Surrender Value............................................ 12
1.31 Transfers.................................................. 12
1.32 Valuation Period (Period).................................. 12
1.33 Variable Annuity........................................... 12
II. GENERAL PROVISIONS
- -----------------------------------------------------------------
2.01 Change of Contract......................................... 12
2.02 Change of Fund(s) ........................................ 13
2.03 Nonparticipating Contract.................................. 14
2.04 Payments and Elections..................................... 14
2.05 State Laws................................................. 14
2.06 Control of Contract........................................ 14
2.07 Designation of Beneficiary................................. 14
2.08 Misstatements and Adjustments.............................. 15
2.09 Incontestability........................................... 15
2.10 Grace Period............................................... 15
2.11 Individual Certificates.................................... 15
III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS
- -----------------------------------------------------------------
3.01 Net Purchase Payment....................................... 15
3.02 Certificate Holder's Account............................... 15
3.03 Fund(s) Record Units -- Separate Account................... 16
3.04 Net Return Factor(s) -- Separate Account .................. 16
3.05 Fund Record Unit Value -- Separate Account................. 16
3.06 Market Value Adjustment.................................... 16
3.07 Transfer of Current Value from the Funds or MG Account..... 18
3.08 Notice to the Certificate Holder........................... 18
3.09 Loans...................................................... 18
3.10 Systematic Withdrawal Option (SWO)......................... 18
3.11 Death Benefit Amount....................................... 20
3.12 Death Benefit Options available to Beneficiary............. 20
7
<PAGE>
Page
3.13 Liquidation of Surrender Value............................. 22
3.14 Surrender Fee.............................................. 22
3.15 Payment of Surrender Value................................. 23
3.16 Reinstatement.............................................. 23
3.17 Payment of Adjusted Current Value.......................... 24
IV. ANNUITY PROVISIONS
- ----------------------------------------------------------------
4.01 Choices to be Made......................................... 24
4.02 Terms of Annuity Options................................... 24
4.03 Death of Annuitant/Beneficiary............................. 25
4.04 Fund(s) Annuity Units -- Separate Account.................. 26
4.05 Fund(s) Annuity Unit Value -- Separate Account............. 27
4.06 Annuity Net Return Factor(s) -- Separate Account........... 27
4.07 Annuity Options............................................ 27
8
<PAGE>
I. GENERAL DEFINITIONS
- --------------------------------------------------------------------------------
1.01 Account: A record established for each Certificate
Holder to maintain the value of all Net
Purchase Payments held on his/her behalf during
the Accumulation Period.
1.02 Accumulation Period: The period during which the Net Purchase
Payment(s) are applied to an Account to provide
future Annuity payment(s).
1.03 Adjusted Current Value: The Current Value of an Account plus or minus
any aggregate MG Account MVA, if applicable.
(See 1.21)
1.04 Annuitant: The person whose life is measured for purposes
of the guaranteed death benefit and the
duration of Annuity payments under this
Contract.
1.05 Annuity: Payment of an income:
(a) For the life of one or two persons;
(b) For a stated period; or
(c) For some combination of (a) and (b).
1.06 Beneficiary: The individual or estate entitled to receive
any payment from the Account upon the death of
the Annuitant.
1.07 Certificate Holder: A person who purchases an interest in this
Contract as evidenced by a certificate. A
Certificate Holder cannot be a nonnatural
person (i.e. a trustee for a trust, an executor
or administrator for an estate, or an
incorporated or unincorporated business).
1.08 Code: The Internal Revenue Code of 1986, as it may be
amended from time to time.
1.09 Contract This agreement between Aetna and the Contract
Holder.
1.10 Contract Holder: The entity to which the Contract is issued. The
Contract is offered to:
(a) National Association of Securities Dealers,
Inc. (``NASD'') member broker-dealers
selected by Aetna, who have a minimum net
capital of $250,000 or more, including
broker-dealer subsidiaries of banks and
savings and loan associations;
(b) Employers who sponsor nonqualified benefit
plans for their employees (exempt from
ERISA Title I);
(c) Entities that contribute to annuities on
behalf of their customers; and
(d) Custodians of custodial accounts and
trustees of trusts that have been
established for Individual Retirement
Accounts under Code Section 408.
9
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1.11 Current Value: As of the most recent Valuation Period, the Net
Purchase Payment and any additional amount
deposited pursuant to 3.11 plus any interest
added to the portion allocated to the MG
Account; and plus or minus the investment
experience of the portion allocated to the
Funds since deposit; less all Maintenance Fees
deducted, any amounts surrendered and any
amounts applied to an Annuity.
1.12 Deposit Period: A calendar week, a calendar month, a calendar
quarter, or any other period of time specified
by Aetna during which Net Purchase Payment(s),
Transfers and Reinvestments are accepted into
the MG Account for one or more Guaranteed
Terms. Aetna reserves the right to extend the
Deposit Period.
1.13 Fixed Annuity: An Annuity with payments that do not vary in
amount.
1.14 Fund(s): The open-end management investment companies
(mutual funds) in which the Separate Account
invests.
1.15 General Account: The Account holding the assets of Aetna, other
than those assets held in Aetna's separate
accounts.
1.16 Guaranteed Rates-- Aetna will declare the interest rate(s)
MG Account: applicable to a specific Guaranteed Term at the
start of the Deposit Period for that Guaranteed
Term. The rate(s) are guaranteed by Aetna for
the Deposit Period and the ensuing Guaranteed
Term. The Guaranteed Rates are annual effective
yields. That is, interest is credited daily at
a rate that will produce the Guaranteed Rate
over the period of a year. No Guaranteed Rate
will ever be less than the Minimum Guaranteed
Rate shown on Contract Schedule I.
For Guaranteed Terms of one year or less, one
Guaranteed Rate is credited for the full
Guaranteed Term. For longer Guaranteed Terms,
an initial Guaranteed Rate is credited from the
date of deposit to the end of a specified
period within the Guaranteed Term. There may be
different Guaranteed Rate(s) declared for
subsequent specified time intervals throughout
the Guaranteed Term.
1.17 Guaranteed Term: The period of time for which MG Account
Guaranteed Rates are guaranteed on Net Purchase
Payments, Transfers and Reinvestments made into
a current Deposit Period for the MG Account.
Such period begins on the day following the
close of the Deposit Period and ends on the
designated Maturity Date. Guaranteed Terms are
offered at Aetna's discretion for various
lengths of time ranging up to and including ten
years.
During a Deposit Period, Aetna may make
available any number of Guaranteed Terms. The
Certificate Holder may allocate Net Purchase
Payments and Transfers into any or all of the
available Guaranteed Terms.
1.18 Guaranteed Term(s) All MG Account Guaranteed Term(s) with the same
Groups: length of time from the close of the Deposit
Period until the designated Maturity Date.
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1.19 Maintenance Fee The Maintenance Fee (see Contract Schedule I)
will be deducted during the Accumulation Period
from the Current Value on each anniversary of
the date the Account is established and upon
surrender of the entire Account.
1.20 Marathon Guaranteed An accumulation option where Aetna guarantees
Account (MG Account): stipulated rate(s) of interest for specified
periods of time. All assets of Aetna, including
amounts in the Nonunitized Separate Account,
are available to meet the guarantees under the
MG Account.
1.21 Market Value Adjustment An adjustment to the amount withdrawn or
(MVA): transferred from an MG Account Guaranteed Term
prior to the end of that Guaranteed Term. The
adjustment reflects the change in the value of
the investment due to changes in interest rates
since the date of deposit and is computed using
the formula given in 3.06. The adjustment is
expressed as a percentage of each dollar being
withdrawn.
1.22 Matured Term Value: The amount payable on an MG Account Guaranteed
Term's Maturity Date.
1.23 Matured Term Value During the calendar month following an MG
Transfer: Account Maturity Date, the Certificate Holder
may notify Aetna's Home Office in writing to
Transfer or surrender all or part of the
Matured Term Value, plus interest at the new
Guaranteed Rate accrued thereon, from the MG
Account without an MVA. This provision only
applies to the first such written request
received from the Certificate Holder during
this period for any Matured Term Value.
1.24 Maturity Date: The last day of an MG Account Guaranteed Term.
1.25 Net Purchase Payment(s): The Purchase Payment less premium taxes, as
applicable.
1.26 Nonunitized Separate A separate account set up by Aetna under Title
Account: 38, Section 38a-433, of the Connecticut General
Statutes, that holds assets for MG Account
Terms. There are no discrete units for this
Account. The Certificate Holder does not
participate in the investment gain or loss from
the assets held in the Nonunitized Separate
Account. Such gain or loss is borne entirely by
Aetna. These assets may be chargeable with
liabilities arising out of any other business
of Aetna.
1.27 Purchase Payment(s): Payment(s) accepted by Aetna at its Home
Office. Aetna reserves the right to refuse to
accept any Purchase Payment at any time for any
reason. No advance notice will be given to the
Contract Holder or Certificate Holder.
1.28 Reinvestment: Aetna will mail a notice to the Certificate
Holder at least 18 calendar days before a
Guaranteed Term's Maturity Date. This notice
will contain the Terms available during the
current Deposit Periods with their Guaranteed
Rate(s) and projected Matured Term Value. If no
specific direction is given by the Certificate
Holder prior to the Maturity Date, each Matured
Term Value will be reinvested in the current
Deposit Period for a Guaranteed Term of the
same duration. If a Guaranteed Term of
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1.28 Reinvestment (Cont'd): the same duration is unavailable, each Matured
Term Value will automatically be reinvested in
the current Deposit Period for the next
shortest Guaranteed Term available. If no
shorter Guaranteed Term is available, the next
longer Guaranteed Term will be used. Aetna will
mail a confirmation statement to the
Certificate Holder the next business day after
the Maturity Date. This notice will state the
Guaranteed Term and Guaranteed Rate(s) which
will apply to the reinvested Matured Term
Value.
1.29 Separate Account: A separate account that buys and holds shares
of the Fund(s), income, gains or losses,
realized or unrealized, are credited or charged
to the Separate Account without regard to other
income, gains or losses of Aetna. Aetna owns
the assets held in the Separate Account and
is not a trustee as to such amounts. This
Separate Account generally is not guaranteed
and is held at market value. The assets of the
Separate Account, to the extent of reserves and
other contract liabilities of the Account,
shall not be charged with other Aetna
liabilities.
1.30 Surrender Value: The amount payable by Aetna upon the surrender
of any portion of an Account.
1.31 Transfers: The movement of invested amounts among the
available Fund(s) and the MG Account under
this Contract during the Accumulation Period.
1.32 Valuation Period (Period): The period of time for which a Fund determines
its net asset value, usually from 4:15 p.m.
Eastern time each day the New York Stock
Exchange is open until 4:15 p.m. the next such
day, or such other day that one or more of the
Funds determines its net value.
1.33 Variable Annuity: An Annuity with payments that vary with the net
investment results of one or more Funds under
the Separate Account.
II. GENERAL PROVISIONS
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2.01 Change or Contract: Only an authorized officer of Aetna may change
the terms of this Contract. Aetna will notify
the Contract Holder in writing at least 30 days
before the effective date of any change. Any
change will not affect the amount or terms of
any Annuity which begins before the change.
Aetna reserves the right to refuse to accept
any Purchase Payment at any time for any
reason. This applies to an initial Purchase
Payment to establish a new Account or to
subsequent Purchase Payments to existing
Accounts under the Contract. No advance notice
will be given to the Contract Holder or
Certificate Holder.
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2.01 Change of Contract Aetna may make any change that affects the MG
(Cont'd): Account Market Value Adjustment (3.06) with at
least 30 days' advance written notice to the
Contract Holder and the Certificate Holder. Any
such change shall become effective for any new
Term and will apply to all present and future
Accounts.
Aetna reserves the right to change the terms of
the Systematic Withdrawal option (3.10) for
future elections and discontinue the
availability of this option after proper
notification.
Any change that affects any of the following
under this Contract will not apply to Accounts
in existence before the effective date of the
change:
(a) Net Purchase Payment (1.25)
(b) MG Account Guaranteed Rate (1.16)
(c) Net Return Factor(s) -- Separate Account
(3.04)
(d) Current Value (1.11)
(e) Surrender Value (1.30)
(f) Funds(s) Annuity Unit Value -- Separate
Account (4.05)
(g) Annuity options (4.07)
(h) Fixed Annuity interest Rates (4.01)
(i) Transfers (1.31).
Any change that affects the Annuity options and
the tables for the options may be made:
(a) No earlier than 12 months after the
effective date of this Contract; and
(b) No earlier than 12 months after the
effective date of any prior change
Any Account established on or after the
effective date or any change will be subject to
the change. If the Contract Holder does not
agree to any change under this provision, no
new Accounts may be established under this
Contract. This Contract may also be changed as
deemed necessary by Aetna to comply with
federal or state law.
2.02 Change of Fund(s): Aetna, or the Separate Account, may:
(a) Change the Fund(s) which may be invested in
by the Separate Account; and
(b) Replace the shares of any Fund(s) held in
the Separate Account with shares of any
other Fund(s).
Changes must be:
(a) Approved by a majority vote in the Separate
Account with respect to the Fund(s) whose
shares are to be replaced; or
(b) Deemed necessary by Aetna under the
Investment Company Act of 1940; or
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2.02 Change of Fund(s) (c) Deemed necessary by Aetna to accomplish the
(Cont'd): purpose of the Separate Account.
Aetna will notify the Contract Holder and the
Certificate Holder of any change.
2.03 Nonparticipating Contract: The Contract Holder, Certificate Holders or
Beneficiaries will not have a right to share
in the earnings of Aetna.
2.04 Payments and Elections: While the Certificate Holder is living, Aetna
will pay the Certificate Holder any Annuity
payments as and when due. After the Certificate
Holder's death, any Annuity payments required
to be made will be paid in accordance with
4.03. Aetna will determine other payments
and/or elections as of the end of the Valuation
Period in which the request is received at its
Home Office. Such payments will be made within
7 calendar days of receipt at its Home Office
of a written claim for payment which is in good
order, except as provided in 3.15.
2.05 State Laws: The Contract and the Certificates comply with
the laws of the state in which they are
delivered. Any surrender, death, or Annuity
payments are equal to or greater than the
minimum required by such laws. Annuity tables
for legal reserve valuation shall be as
required by state law. Such tables may be
different from Annuity tables used to determine
Annuity payments.
2.06 Control of Contract: This is a Contract between the Contract Holder
and Aetna. The Contract Holder has title to the
Contract. Contract Holder rights are limited to
accepting or rejecting Contract modifications.
The Certificate Holder has all other rights to
amounts held in his or her Account.
Each Certificate Holder shall own all amounts
held in his or her Account. Each Certificate
Holder may make any choices allowed by this
Contract for his or her Account. Choices made
under this Contract must be in writing. Until
receipt of such choices at Aetna's Home Office,
Aetna may rely on any previous choices made.
The Contract is not subject to the claims of any
creditors of the Contract Holder or the
Certificate Holder, except to the extent
permitted by law.
The Certificate Holder may assign or transfer
his or her rights under the Contract to one or
more natural persons. Any assignment or transfer
made must be submitted to Aetna's Home Office in
writing and will not be effective until accepted
by Aetna.
2.07 Designation of Each Certificate Holder shall name his or her
Beneficiary: Beneficiary. The Beneficiary may be changed at
any time. Changes to Beneficiary must be
submitted to Aetna's Home Office in writing and
will not be effective until accepted by Aetna.
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2.08 Misstatements and If Aetna finds the age of any Annuitant to be
Adjustments: misstated, the correct facts will be used to
adjust payments.
2.09 Incontestability: Aetna cannot cancel this Contract because of
any error of fact on the application. Aetna
cannot cancel an Account because of any error
of fact on the enrollment form.
2.10 Grace Period: This Contract will remain in effect even if
Purchase Payments are not continued except as
provided in the Payment of Adjusted Current
Value provision (see 3.17).
2.11 Individual Certificates: Aetna shall issue a certificate to each
Certificate Holder. The certificate will
summarize certain provisions of the Contract.
Certificates are for information only and are
not a part of the Contract.
III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS
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3.01 Net Purchase Payment: This amount is the actual Purchase Payment less
any premium tax. Aetna will generally deduct
the premium tax when Annuity benefits are
elected (see Part IV). If Aetna determines that
under applicable state law, it must pay a
premium tax when the Purchase Payment is
received or at any other time, it will deduct
the tax at that time.
The Net Purchase Payment will be credited
among:
(a) The current Deposit Period(s) for
Guaranteed Terms under the MG Account; and
(b) The Fund(s) in which the Separate Account
invests.
For each Net Purchase Payment, the Certificate
Holder shall tell Aetna the allocation
percentage to be applied to the current Deposit
Period for each of the available Guaranteed
Terms in the MG Account and/or each Fund. If
allocation instructions are not received along
with any subsequent Net Purchase Payment, the
allocation will be the same as that indicated
on the original enrollment form. If the same
Guaranteed Term is no longer available, the Net
Purchase Payment will be allocated to the next
shortest Guaranteed Term available in the
current Deposit Period. If no shorter
Guaranteed Term is available, the next longer
Guaranteed Term will be used.
3.02 Certificate Holder's Aetna will maintain an Account for each
Account: Certificate Holder.
Aetna will declare from time to time the
acceptability and the minimum amount for
additional Purchase Payments. Each Account will
be subject to the Terms and Conditions of the
Contract in effect at the time the first
Purchase Payment for such Account is applied to
the Contract except for changes made to comply
with federal or state law.
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3.03 Fund(s) Record Units -- The portion of the Net Purchase Payment(s)
Separate Account: applied to each Fund under the Separate Account
will determine the number of Fund record units
for that Fund. This number is equal to the
portion of the Net Purchase Payment(s) applied
to each Fund divided by the Fund record unit
value (see 3.05) for the Valuation Period in
which the Purchase Payment is received in good
order at Aetna's Home Office.
3.04 Net Return Factor(s) -- The net return factor(s) are used to compute
Separate Account: all Separate Account record units for any Fund.
The net return factor(s) for each Fund is equal
to 1.0000000 plus the net return rate.
The net return rate is equal to:
(a) The value of the shares of the Fund held by
the Separate Account at the end of the
Valuation Period; minus
(b) The value of the shares of the Fund held by
the Separate Account at the start of the
Valuation Period; plus or minus
(c) Taxes (or reserves for taxes) on the
Separate Account (if any); divided by
(d) The total value of the Fund(s) record units
and Fund(s) annuity units of the Separate
Account at the start of the Valuation
Period; minus
(e) A daily Separate Account charge at an
annual rate as shown on Contract Schedule I
for mortality and expense risks, which may
include profit; and a daily
administrative charge.
A net return rate may be more or less than 0%.
The value of a share of the Fund is equal to
the net assets of the Fund divided by the
number of shares outstanding.
3.05 Fund Record Unit A Fund record unit value is computed by
Value -- Separate Account: multiplying the net return factors for the
current Valuation Period by the Fund record
unit value for the previous Period. The dollar
value of Fund record units, Separate Account
assets, and Variable Annuity payments may go up
or down due to investment gain or loss.
3.06 Market Value There will be an MVA for a withdrawal from the
Adjustment: MG Account before the end of a Guaranteed Term
when the withdrawal is due to:
(a) A Transfer; except as specified in MG
Account Matured Term Value Transfer;
(b) A full or partial surrender, including a
10% free withdrawal under 3.14; or
(c) An election of Annuity option 2 (see 4.07).
Full and partial surrenders and Transfers made
within six months after the date of the
Annuitant's death will be the greater of:
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3.06 Market Value (a) The aggregate MVA amount which is the sum
Adjustment (Cont'd): of all market value adjusted amounts
calculated due to a withdrawal of amounts.
This total may be greater or less than the
Current Value of those amounts; or
(b) The applicable portion of the Current
Value in the MG Account.
After the six-month period, the surrender or
Transfer will be the aggregate MVA amount,
which may be greater or less than the Current
Value of those amounts.
The greater of the aggregate MVA amount or the
applicable portion of the Current Value applies
amounts withdrawn from the MG Account on
account of an election of Annuity options 3 or
4 (see 4.07).
Market value adjusted amounts will be equal to
the amount withdrawn multiplied by the
following ratio:
x
---
365
(1 + i)
------------------
x
---
365
(1 + j)
Where:
i is the Deposit Period Yield
j is the Current Yield
x is the number of days remaining,
(computed from Wednesday of the
week of withdrawal) in the
Guaranteed Term.
The Deposit Period Yield will be determined as
follows:
(a) At the close of the last business day of
each week of the Deposit Period, a yield
will be computed as the average of the
yields on that day of U.S. Treasury Notes
which mature in the last three months of
the Guaranteed Term.
(b) The Deposit Period Yield is the average of
yields for the Deposit Period. If
withdrawal is made before the close of
the Deposit Period, it is the average of
those yields on each week preceding
withdrawal.
The Current Yield is the average of the yields
on the last business day of the week preceding
withdrawal on the same U.S. Treasury Notes
included in the Deposit Period Yield.
In the event that no U.S. Treasury Notes which
mature in the last three months of the
Guaranteed Term exist, Aetna reserves the
right to use the U.S. Treasury Notes that
mature in the following quarter.
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3.07 Transfer of Current Value Before an Annuity option is elected, all or
from the Funds or MG any portion of the Adjusted Current Value of
Account: the Certificate Holder's Account may be
transferred from any Fund or Guaranteed Term
of the MG Account:
(a) To any other Fund; or
(b) To any Guaranteed Term of the MG Account
available in the current Deposit Period.
Transfer requests can be submitted as a
percentage or as a dollar amount, Aetna may
establish a minimum transfer amount. Within
a Guaranteed Term Group, the amount to be
surrendered or transferred will be withdrawn
first from the oldest Deposit Period, then
from the next oldest, and so on until the
amount requested is satisfied.
The Certificate Holder may make an unlimited
number of Transfers during the Accumulation
Period. The number of free Transfers allowed by
Aetna is shown on Contract Schedule I.
Additional Transfers may be subject to a
Transfer fee as shown on Contract Schedule I.
Transfers from the MG Account of a Matured Term
Value on or within one calendar month of a
Term's Maturity Date do not count against the
annual Transfer limit.
Amounts applied to Guaranteed Terms of the MG
Account may not be transferred to the Funds or
to another Guaranteed Term during the Deposit
Period or for 90 days after the close of the
Deposit Period except for Matured Term
Value (s) during the calendar month following
the Term's Maturity Date.
Transfers from Guaranteed Terms of the MG
Account are subject to the MVA provisions of
3.06.
3.08 Notice to the Certificate The Certificate Holder will receive quarterly
Holder: statements from Aetna of:
(a) The value of any amounts held in:
(1) The MG Account; and
(2) The Fund(s) under the Separate
Account.
(b) The number of any Fund(s) record units;
and
(c) The Fund(s) record unit value.
Such number or values will be as of a specific
date no more than 60 days before the date of
the notice.
3.09 Loans: Loans are not available under this Contract.
3.10 Systematic Withdrawal A distribution option under which a portion of
Option (SWO): the Account's Current Value will automatically
be surrendered and distributed each year. SWO
payments will be calculated on the Account's
full Current Value. The distributed amount is
withdrawn pro rata from each investment option
under the Account. A Surrender Fee will not be
deducted from any portion of the Adjusted
Current Value which is paid as a distribution
under SWO.
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3.10 Systematic Withdrawal Certificate Holders should consult their tax
Option (SWO)(Cont'd): adviser prior to requesting this distribution
option. Aetna will not be responsible for any
adverse tax consequences due to receiving SWO
payments.
(a) Amount of Distribution: The Certificate
Holder may elect one of the three payment
methods described below.
(1) Specified Payment: Payments of a
designated dollar amount. The annual
amount may not be greater than the
percentage of the Current Value at time
of election as shown on Contract
Schedule I. This annual dollar amount
will remain constant. At its
discretion, Aetna may require a minimum
initial payment amount;
(2) Specified Period: Payments which are
made over a period of time which must
be at least 10 years. The annual amount
paid each year is calculated by
dividing the Current Value as of
December 31 of the prior year by the
number of payment years remaining; or
(3) Specified Percentage: Payment of a
designated percentage which cannot be
greater than the percentage of the
Current Value at the time of election
as shown on Contract Schedule I. The
percentage may be changed by written
request. Aetna reserves the right to
limit the number of times the
percentage may be changed. The annual
amount is calculated by multiplying
the Current Value as of December 31 of
the year prior to the payment by the
designated percentage.
Payments upon the Certificate Holder's or
Annuitant's death will be made to the
Beneficiary in the manner described in
3.12.
(b) Minimum Initial Current Value: At its
discretion, Aetna may require a minimum
initial Current Value for election of this
option. If after election of this option
the Current Value is insufficient to make a
scheduled SWO payment, Aetna will
distribute the entire Account balance.
(c) Date of Distribution: The Certificate
Holder shall specify the initial
distribution date. The earliest date for
distribution is the date on which the
Certificate Holder attains age 59 1/2. As
elected by the Certificate Holder, SWO
payments will be made on a monthly,
quarterly, semi-annual or annual basis. If
SWO payments are made more frequently than
annually, the designated annual amount is
divided by the number of payments due each
calendar year. Subsequent distributions
will be made on the 15th of any month or
such other date Aetna may designate or
allow.
(d) Election and Revocation: SWO may be elected
by submitting a completed and signed
election form to Aetna's Home Office. Once
elected, this option may be revoked by the
Certificate Holder or spousal Beneficiary,
if elected after the Certificate
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3.10 Systematic Withdrawal Holder's death, by submitting a written
Option (SWO)(Cont'd): request to Aetna at its Home Office. Any
revocation will apply only to amounts not
yet paid. SWO may be elected only once by
the Certificate holder or by the spousal
Beneficiary.
3.11 Death Benefit Amount: If the Certificate Holder or Annuitant dies
before Annuity payments start, the Beneficiary
is entitled to a death benefit under the
Account. The claim date is the date when proof
of death and the Beneficiary's claim are
received in good order at Aetna's Home Office.
The amount of the death benefit is determined
as follows:
(a) Death or Annuitant less than 75 years of
age: The guaranteed death benefit is the
greatest of:
(1) The gross sum of all Purchase
Payment(s) made to the Account (as of
the date of death) minus the sum of all
amounts surrendered, applied to an
Annuity, of deducted from the Account;
(2) The step up value as of the date of
death plus all Net Purchase Payments
made to the Account, minus the total of
all partial surrenders, amounts applied
to an Annuity and deductions made from
the Account since determination of the
step up value. The step up value is the
Current Value on the most recent
seventh year anniversary of the date
the first Net Purchase Payment is
applied to the Account;
(3) The Account's Current Value as of the
date of death.
The excess, if any, of the guaranteed death
benefit value over the Account's Current
Value is determined as of the date of
death. Any excess amount will be deposited
to the Account and allocated to Aetna
Variable Encore Fund as of the claim date.
The Current Value on the claim date plus
any excess amount deposited becomes the
Account's Current Value.
(b) Death or Annuitant age 75 or greater: The
Death benefit amount is the Account Current
Value on the claim date.
(c) Death of the Certificate Holder if the
Certificate Holder is not the Annuitant:
The death benefit amount is the Account's
Adjusted Current Value on the claim date. A
Surrender Fee may apply to any full or
partial surrender (see 3.14 and Contract
Schedule I).
3.12 Death Benefit Options Prior to any election, or until amounts must be
available to Beneficiary: otherwise distributed under this section, the
Current Value of the Account will be retained
in the Account. The Beneficiary has the right
under the Account to allocate or reallocate any
amount to any of the available investment
options (subject to an MVA, as applicable). The
following options are available to the
Beneficiary:
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3.12 Death Benefit Options (a) When the Certificate Holder is the
available to Beneficiary Annuitant: If the Certificate Holder/
(Cont'd): Annuitant dies, and:
(1) If the Beneficiary is the Certificate
Holder's surviving spouse, the
Beneficiary will be the successor
Certificate Holder of the Account on
Aetna's records. Such successor
Certificate Holder may exercise all
Certificate Holder rights under the
Contract and continue in the
Accumulation Period, or may elect (i),
(ii), or (iii) below. Under the Code,
distributions from the Account are not
required until the successor
Certificate Holder's death. The
Beneficiary may elect to:
(i) Apply some or all of the Adjusted
Current Value of the Account to
Annuity option 2, 3 or 4 (see
4.07);
(ii) Apply some or all of the
Adjusted Current Value of the
Account to Annuity option 1
(see 4.07); or
(iii) Receive, at any time, a lump sum
payment equal to the Adjusted
Current Value of the Account.
(2) If the Beneficiary is other than the
Certificate Holder's surviving
spouse, the options (i), (ii), or
(iii) under (1) above apply. Any
portion of the Adjusted Current
Value of the Account not applied
to Annuity option 2, 3 or 4 within
one year of the Certificate Holder's
death, must be distributed within
five years of the date of death.
(3) If no Beneficiary exists, a lump sum
payment equal to the Adjusted
Current Value will be made to the
Certificate Holder's estate.
(b) When the Certificate Holder is not the
Annuitant and the Certificate Holder dies,
and:
(1) If the Beneficiary is the Certificate
Holder's surviving spouse, the
Beneficiary will be the successor
Certificate Holder of the Account on
Aetna's records. Such successor
Certificate Holder may exercise all
Certificate Holder rights under the
Contract and continue in the
Accumulation Period, or may elect
(i), (ii), or (iii) below. Under the
Code, distributions from the Account
are not required until the successor
Certificate Holder's death. The
Beneficiary may elect to:
(i) Apply some or all of the
Adjusted Current Value of the
Account to Annuity option 2, 3
or 4 (see 4.07);
(ii) Apply some or all of the
Surrender Value of the Account
to Annuity option 1 (see 4.07);
or
21
<PAGE>
3.12 Death Benefit Options (iii) Receive, at any time, a lump
available to Beneficiary sum payment equal to the
(Cont'd): Surrender Value of the
Account.
(2) If the Beneficiary is other than the
Certificate Holder's surviving
spouse, then options (i), (ii), or
(iii) under (1) above apply. Any
portion of the Adjusted Current
Value of the Account not applied to
Annuity option 2, 3 or 4 within one
year of the Certificate Holder's
death will be subject to a Surrender
Fee, if applicable, and must be
distributed within five years of the
date of death.
(3) If no Beneficiary exists, a lump sum
payment equal to the Surrender Value
will be made to the Certificate
Holder's estate.
(c) When the Certificate Holder is not the
Annuitant and the Annuitant dies: The
Beneficiary must elect Annuity option 2, 3
or 4 within 60 days of the date of death
or the gain, if any, will be includable in
the Beneficiary's income in the tax year
in which the Annuitant dies.
3.13 Liquidation of All or any portion of the Account's Adjusted
Surrender Value: Current Value may be surrendered at any time.
Surrender requests can be submitted as a
percentage of the Account value or as a
specific dollar amount. Net Purchase Payment
amounts are withdrawn first, and then the
excess value, if any. For any partial
surrender, amounts are withdrawn on a pro rata
basis from the Fund(s) and/or the Guaranteed
Term(s) Groups of the MG Account in which the
Current Value is invested. Within a Guaranteed
Term Group, the amount to be surrendered or
transferred will be withdrawn first from the
oldest Deposit Period, then from the next
oldest, and so on until the amount requested
is satisfied.
After deduction of the Maintenance Fee, if
applicable, the surrendered amount shall be
reduced by a Surrender Fee, if applicable.
3.14 Surrender Fee: The Surrender Fee only applies to the Net
Purchase Payment(s) portion surrendered and
varies according to the elapsed time since
deposit (see Contract Schedule I). Net
Purchase Payment amounts are withdrawn in
the same order they were applied.
No Surrender Fee is deducted from any portion
of the Current Value which is paid:
(a) To a Beneficiary due to the Annuitant's
death before Annuity payments start, up to
a maximum of the aggregate Net Purchase
Payment(s) minus the total of all partial
surrenders, amounts applied to an Annuity
and deductions made prior to the
Annuitant's date of death;
(b) As a premium for an Annuity option 2, 3 or
4 under this Contract (see 4.07);
(c) As a distribution under the SWO provision
(see 3.10);
22
<PAGE>
3.14 Surrender Fee (Cont'd): (d) At least 12 months after the date of the
first Purchase Payment to the Account, in
an amount equal to or less than 10% of the
Current Value. This applies to the first
surrender request, partial or full, in a
calendar year. The Current Value is
calculated as of the date the surrender
request is received in good order at
Aetna's Home Office. This waiver is not
available to the Certificate Holder while
SWO is in effect;
(e) For a full surrender of the Account where
the Current Value of the Account is $2,500
or less and no surrenders have been taken
from the Account within the prior 12
months;
(f) By Aetna under 3.17; or
(g) If the Annuitant has spent at least 45
consecutive days in a licensed nursing care
facility and each of the following
conditions are met;
(1) more than one calendar year has elapsed
since the date the certificate was
issued; and
(2) the surrender is requested within 3
years of admission to a licensed
nursing care facility.
This waiver does not apply if the Annuitant
was in a nursing care facility at the time
the certificate was issued.
3.15 Payment of Surrender Value: Under certain emergency conditions, Aetna may
defer payment:
(a) For a period of up to 6 months (unless not
allowed by state law);
or
(b) As provided by federal law.
3.16 Reinstatement: All or a portion of the proceeds of a full
surrender of an Account may be reinvested
within 30 days after the surrender. Any
Maintenance Fee and Surrender Fee charged at
the time of surrender on the amount being
reinvested will be included in the
reinstatement. Any Market Value Adjustment(s)
deducted from surrenders will not be included
in the reinstatement.
Amounts will be reinstated among the MG Account
and the Funds in the Separated Account in the
same proportion as they were at the time of
surrender. Any amounts reinstated to the MG
Account will be credited to the Guaranteed
Terms available during the current Deposit
Period in the same proportion as they were at
the time of surrender. In the event that a
Guaranteed Term of the same duration is
unavailable, amounts will be reinvested in the
next shortest Guaranteed Term available in the
current Deposit Period. If no shorter
Guaranteed Term is available, the next longer
Guaranteed Term will be used. The number of
Fund(s) Record Units reinstated will be based
on the Record Unit Value(s) next computed after
receipt at Aetna's Home Office of the
reinstatement request and the amount to be
reinstated.
23
<PAGE>
3.16 Reinstatement (Cont'd): Any Maintenance Fee which falls due after the
surrender and before the reinstatement will be
deducted from the amount reinstated.
Any Account(s) surrendered because the Current
Value was less than $2,500 immediately
following any partial surrender may not be
reinstated (see 3.17).
Reinstatement of an Account is permitted only
once.
3.17 Payment of Adjusted Upon 90 days' written notice to the Certificate
Current Value: Holder, Aetna will terminate any Account if the
Current Value becomes less than $2,500
immediately following any partial surrender.
Aetna does not intend to exercise this right in
cases where an Account Current Value is reduced
to $2,500 of less solely due to investment
performance. A Surrender Fee will not be
deducted from the Adjusted Current Value. This
terminated Adjusted Current Value of an Account
may not be reinstated.
IV. ANNUITY PROVISIONS
- --------------------------------------------------------------------------------
4.01 Choices to be Made: The Certificate Holder may tell Aetna to apply
any portion of the Adjusted Current Value
(minus any premium tax) for an Annuity under
option 2, 3, or 4 (see 4.07). The first Annuity
payment may not be earlier than one calendar
year after the initial Purchase Payment nor
later than the later of:
(a) The first day of the month following the
Annuitant's 85th birthday; of
(b) The tenth anniversary of the last Purchase
Payment. In lieu of the election of an
Annuity, the Certificate Holder may tell
Aetna to make a lump sum payment.
When an Annuity Option is chosen, Aetna must
also be told if payments are to be made other
than monthly and whether to pay:
(a) A Fixed Annuity using the General Account;
(b) A Variable Annuity using any of the Fund(s)
available under this Contract for Annuity
purposes; or
(c) A combination of (a) and (b).
If a Fixed Annuity is chosen, the Annuity
purchase rate for the option chosen reflects
the Minimum Guaranteed Interest Rate (see
Contract Schedule II), but may reflect higher
interest rates. If a Variable Annuity is
chosen, the initial Annuity payment for
the option chosen reflects the assumed annual
return rate elected. (see Contract
Schedule II).
4.02 Terms of Annuity (a) When payments start, the age of the
Options: Annuitant plus the number of years for
which payments are guaranteed must not
exceed 95.
24
<PAGE>
4.02 Terms of Annuity (b) An Annuity option may not be elected if the
Options (Cont'd): first payment would be less than $50 or if
the total payments in a year would be less
than $250 (less if required by state law).
Aetna reserves the right to increase the
minimum first Annuity payment amount and
the annual minimum Annuity payment amount
based upon increases reflected in the
Consumer Price Index-Urban, (CPI-U) since
July 1, 1993.
(c) If a Fixed Annuity under option 2,3 or 4 is
chosen and a larger payment would result
from applying the Surrender Value to a
current Aetna single premium immediate
Annuity, Aetna will make the larger
payment.
(d) For purposes of calculating the guaranteed
first payment of a Variable Annuity or the
payments for a Fixed Annuity, the
Annuitant's and second Annuitant's adjusted
age will be used. The Annuitant's and
second Annuitant's adjusted age is his or
her age as of the birthday closest to the
Annuity commencement date reduced by one
year for Annuity commencement dates
occurring during the period of time from
July 1, 1993 through December 31, 1999. The
Annuitant's and second Annuitant's age will
be reduced by two years for Annuity
commencement dates occurring during the
period of time from January 1, 2000 through
December 31, 2009. The Annuitant's and
second Annuitant's age will be reduced by
one additional year for Annuity
commencement dates occurring in each
succeeding decade.
The Annuity purchase rates for options 3
and 4 based on mortality from 1983
Table a.
(e) Assumed Annual Net Return Rate is the
interest rate used to determine the amount
of the first Annuity payment under a
Variable Annuity as shown on Contract
Schedule II. The Separate Account must earn
this rate plus enough to cover the
mortality and expense risks charges (which
may include profit) and administrative
charges if future Variable Annuity Payments
are to remain level, (see Annuity return
factor under Variable Annuity Assumed
Annual Net Return Rate on Contract Schedule
II).
(f) Once elected, Annuity payments cannot be
commuted to a lump sum except for Variable
Annuity payments under option 2 (see 4.07).
The life expectancy of the Annuitant or the
Annuitant and second Annuitant shall be
irrevocable upon the election of an Annuity
option.
4.03 Death of Annuitant/ (a) Certificate Holder is Annuitant: When the
Beneficiary: Certificate Holder is the Annuitant and the
Annuitant dies under option 2 or 3, or both
the Annuitant and the second Annuitant
die under option 4(d), the present value of
any remaining guaranteed payments will be
paid in one sum to the Beneficiary, or upon
election by the Beneficiary, any remaining
payments will continue to the Beneficiary.
If option 4 has been elected and the
Certificate Holder dies, the remaining
payments will continue to the successor
payee. If no successor payee has been
designated,the Beneficiary will be treated
as the successor payee.
25
<PAGE>
4.03 Death of Annuitant/ (b) Certificate Holder is Not Annuitant: When
Beneficiary (Cont'd): the Certificate Holder is not the Annuitant
and the Certificate Holder dies, the
remaining payments under options 2, 3 or 4
will continue to the successor payee. If
no successor payee has been designated, the
Beneficiary will be treated as the
successor payee.
If the Annuitant dies under option 2 or 3,
or if both the Annuitant and the second
Annuitant die under option 4(d), the
present value of any remaining guaranteed
payments will be paid in one sum to the
Beneficiary, or upon the election by the
Beneficiary, any remaining payments will
continue to the Beneficiary. If option 4
has been elected, and the Annuitant dies,
the remaining payments will continue to the
Certificate Holder.
(c) No Beneficiary Named/Surviving: If there is
no Beneficiary under option 2, 3, or 4, the
present value of any remaining payments
will be paid in one sum to the Certificate
Holder, or if the Certificate Holder is not
living, then to the Certificate Holder's
estate.
(d) If the Beneficiary designated under option
1 dies, the amount held plus accrued
interest will be paid in one sum to a
successor Beneficiary, if any, named by the
designated Beneficiary. If there is no
successor Beneficiary, the lump sum will
be paid to the designated Beneficiary's
estate.
(e) If the Beneficiary or the successor payee
dies while receiving Annuity payments, the
present value of any remaining guaranteed
payments will be paid in one sum to the
successor Beneficiary/payee, or upon
election by the successor
Beneficiary/payee, any remaining payments
will continue to the successor
Beneficiary/payee. If no successor
Beneficiary/payee has been designated, the
present value of any remaining guaranteed
payments will be paid in one sum to the
Beneficiary's/payee's estate.
(f) The present value will be determined as of
the Valuation Period in which proof of
death acceptable to Aetna and a request for
payment is received at Aetna's Home Office.
The interest rate used to determine the
first payment will be used to calculate the
present value.
4.04 Fund(s) Annuity Units -- The number of each Fund's Annuity Units is
Separate Account: based on the amount of the first Variable
Annuity payment which is equal to:
(a) The portion of the Current Value applied to
pay a Variable Annuity (minus any premium
tax); divided by
(b) 1,000; multiplied by
(c) The payment rate for the option chosen.
Such amount, or portion, of the variable
payment will be divided by the appropriate Fund
Annuity unit value (see 4.05) on the tenth
Valuation Period before the due date of the
first payment to determine the number of each
Fund Annuity units. The
26
<PAGE>
4.04 Fund(s) Annuity Units-- number of each Fund Annuity units remains fixed.
Separate Account Each future payment is equal to the sum of the
(Cont'd): products of each Fund Annuity unit value
multiplied by the appropriate number of units.
The Fund Annuity unit value of the tenth
Valuation Period prior to the date of the
payment is used.
4.05 Fund(s) Annuity Unit For any Valuation Period, a Fund Annuity unit
Value--Separate is equal to:
Account:
(a) The value for the previous Period;
multiplied by
(b) The Annuity net return factor(s) (see 4.06
below) for the Period; multiplied by
(c) A factor to reflect the assumed annual net
return rate (see Contract Schedule II).
The dollar value of a Fund Annuity unit values
and Annuity payments may go up or down due to
investment gain or loss.
4.06 Annuity Net Return The Annuity net return factor(s) are used to
Factor(s)--Separate compute all Separate Account Annuity Payments
Account: for any Fund.
The Annuity net return factor(s) for each Fund
is equal to 1.0000000 plus the net return rate.
The net return rate is equal to:
(a) The value of the shares of the Fund held
by the Separate Account at the end of a
Valuation Period; minus
(b) The value of the shares of the Fund held
by the Separate Account at the start of
the Valuation Period; plus or minus
(c) Taxes (or reserves for taxes) on the
Separate Account (if any); divided by
(d) The total value of the Fund(s) record
units and Fund(s) Annuity units of the
Separate Account at the start of the
Valuation Period; minus
(e) A daily charge for Annuity mortality and
expense risks, which may include profit,
and a daily administrative charge (at the
annual rate as shown on Contract Schedule
II).
A net return rate may be more or less than 0%.
The value of a share of the Fund is equal to
the net assets of the Fund divided by the
number of shares outstanding.
Payments shall not be changed due to changes in
the mortality or expense results or
administrative charges.
4.07 Annuity Options: Option 1 -- Payment of Interest on Sum Left
with Aetna -- This option may be used only by
the Beneficiary when the Certificate Holder
dies before Aetna has started paying an
Annuity. A portion or all of the sum paid upon
death may be held under this option and will
be held in the General Account of Aetna at
interest (see 4.01). The Beneficiary may later
tell Aetna to:
(a) Pay a portion or all of the sum held by
Aetna; or
(b) Apply a portion or all of the sum held by
Aetna to any Annuity option below.
27
<PAGE>
4.07 Annuity Options If a nonspouse Beneficiary elects that some or
(Cont'd): all of the Current Value is to be held under
this option, the Beneficiary must tell Aetna to
pay the full sum held under this option within
5 years of the date of death.
Option 2--Payments for a Stated Period of
Time--An Annuity will be paid for the number of
years chosen. The number of years must be at
least 5 and not more than 30.
If payments for this option are made under a
Variable Annuity the present value of any
remaining payments may be withdrawn at any
time. If a withdrawal is requested within 3
years after the start of payments, it will be
treated as a surrender and any applicable
Surrender Fee will be applied (see 3.14).
If a nonspouse Beneficiary elects this option
at the death of the Certificate Holder, the
period selected may not extend beyond the
Beneficiary's life expectancy.
Option 3--Life Income--An Annuity will be paid
for the life of the Annuitant. If also chosen,
Aetna will guarantee payments for 60, 120, 180,
or 240 months.
Option 4--Life Income Based upon the Lives of
Two Annuitants--An Annuity will be paid during
the lives of the Annuitant and a second
Annuitant. Payments will continue until both
Annuitants have died. When this option is
chosen, a choice must be made of:
(a) 100% of the payment to continue after the
first death;
(b) 66 2/3% of the payment to continue after
the first death;
(c) 50% of the payment to
continue after the first death;
(d) Payments for a minimum of 120 months with
100% of the payment to continue after the
first death; or
(e) 100% of the payment to continue at the
death of the second Annuitant and 50% of the
payment to continue at the death of the
Annuitant.
Other Options--Aetna may take other
options available as allowed by the laws of the
state in which this Contract and the
Certificate is delivered.
28
<PAGE>
OPTION 2
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Guaranteed Monthly Quarterly Semi-Annual Annual
Years Rate Payment Payment Payment Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3 3.00% $ 28.99 $ 86.76 $ 172.88 $ 343.23
4 3.00% 22.06 66.02 131.56 261.19
5 3.00% 17.91 53.59 106.78 211.99
6 3.00% 15.14 45.30 90.27 179.22
7 3.00% 13.16 39.39 78.49 155.83
8 3.00% 11.68 34.96 69.66 138.31
9 3.00% 10.53 31.52 62.81 124.69
10 3.00% 9.61 28.77 57.33 113.82
11 3.00% 8.86 26.52 52.85 104.93
12 3.00% 8.24 24.65 49.13 97.54
13 3.00% 7.71 23.08 45.98 91.29
14 3.00% 7.26 21.73 43.29 85.95
15 3.00% 6.87 20.56 40.96 81.33
16 3.00% 6.53 19.54 38.93 77.29
17 3.00% 6.23 18.64 37.14 73.74
18 3.00% 5.96 17.84 35.56 70.59
19 3.00% 5.73 17.13 34.14 67.78
20 3.00% 5.51 16.50 32.87 65.26
21 3.00% 5.32 15.92 31.72 62.98
22 3.00% 5.15 15.40 30.68 60.92
23 3.00% 4.99 14.92 29.74 59.04
24 3.00% 4.84 14.49 28.88 57.33
25 3.00% 4.71 14.09 28.08 55.76
26 3.00% 4.59 13.73 27.36 54.31
27 3.00% 4.47 13.39 26.68 52.97
28 3.00% 4.37 13.08 26.06 51.74
29 3.00% 4.27 12.79 25.49 50.60
30 3.00% 4.18 12.52 24.95 49.53
- --------------------------------------------------------------------------------
</TABLE>
29
<PAGE>
OPTION 3
Life income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
<TABLE>
<CAPTION>
Payments Guaranteed for a Stated Period of Months
-------------------------------------------------
- --------------------------------------------------------------------------------
Adjusted None 60 120 180 240
Age of
Annuitant
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
50 $ 4.05 $ 4.05 $ 4.03 $ 3.99 $ 3.93
51 4.12 4.11 4.09 4.05 3.99
52 4.19 4.19 4.16 4.11 4.04
53 4.27 4.26 4.23 4.18 4.10
54 4.35 4.34 4.31 4.25 4.16
55 4.44 4.42 4.39 4.32 4.22
56 4.53 4.51 4.47 4.40 4.29
57 4.62 4.61 4.56 4.48 4.35
58 4.72 4.71 4.65 4.56 4.42
59 4.83 4.81 4.75 4.64 4.49
60 4.95 4.93 4.86 4.73 4.55
61 5.07 5.05 4.97 4.83 4.62
62 5.20 5.17 5.08 4.92 4.69
63 5.34 5.31 5.20 5.02 4.76
64 5.49 5.45 5.33 5.12 4.83
65 5.65 5.61 5.47 5.22 4.89
66 5.82 5.77 5.61 5.33 4.96
67 6.01 5.94 5.75 5.44 5.02
68 6.20 6.13 5.91 5.54 5.08
69 6.41 6.33 6.07 5.65 5.14
70 6.64 6.54 6.23 5.76 5.19
71 6.88 6.76 6.41 5.86 5.24
72 7.14 7.00 6.59 5.97 5.28
73 7.43 7.26 6.77 6.06 5.32
74 7.73 7.53 6.96 6.16 5.35
75 8.06 7.82 7.14 6.25 5.38
- --------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ
by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
30
<PAGE>
OPTION 4
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed interest Rate of 3.0%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Adjusted Ages
- ----------------------
Second
Annuitant Annuitant Option 4a Option 4b Option 4c Option 4d Option 4e
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.03
55 55 3.88 4.25 4.47 3.87 4.14
55 60 3.99 4.44 4.71 3.98 4.42
60 55 3.99 4.44 4.71 3.98 4.42
60 60 4.24 4.71 4.99 4.23 4.57
60 65 4.38 4.97 5.32 4.38 4.93
65 60 4.38 4.97 5.32 4.38 4.93
65 65 4.72 5.33 5.70 4.71 5.14
65 70 4.93 5.68 6.15 4.91 5.66
70 65 4.93 5.68 6.15 4.91 5.66
70 70 5.40 6.21 6.70 5.36 5.96
70 75 5.69 6.68 7.32 5.62 6.67
75 70 5.69 6.68 7.32 5.62 6.67
75 75 6.37 7.45 8.15 6.23 7.12
75 80 6.78 8.11 8.99 6.54 8.13
- --------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
31
<PAGE>
OPTION 2
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
<TABLE>
<CAPTION>
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- --------------------------------------------------------------------------------
Monthly Quarterly Semi-Annual Annual
Years Payment Payment Payment Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
3 $ 29.19 $ 87.33 $ 173.91 $ 344.86
4 22.27 66.61 132.65 263.04
5 18.12 54.19 107.92 213.99
6 15.35 45.92 91.44 181.32
7 13.38 40.01 79.69 158.01
8 11.90 35.59 70.88 140.56
9 10.75 32.16 64.05 127.00
10 9.83 29.42 58.59 116.18
11 9.09 27.18 54.18 107.34
12 8.46 25.32 50.42 99.98
13 7.94 23.75 47.29 93.78
14 7.49 22.40 44.62 88.47
15 7.10 21.24 42.31 83.89
16 6.76 20.23 40.29 79.89
17 6.47 19.34 38.51 76.37
18 6.20 18.55 36.94 73.25
19 5.97 17.85 35.54 70.47
20 5.75 17.22 34.28 67.98
21 5.56 16.65 33.15 65.74
22 5.39 16.13 32.13 63.70
23 5.24 15.66 31.19 61.85
24 5.09 15.24 30.34 60.17
25 4.96 14.85 29.56 58.62
26 4.84 14.49 28.85 57.20
27 4.73 14.15 28.19 55.90
28 4.63 13.85 27.58 54.69
29 4.53 13.57 27.02 53.57
30 4.45 13.30 26.49 52.53
- --------------------------------------------------------------------------------
</TABLE>
32
<PAGE>
OPTION 2
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
<TABLE>
<CAPTION>
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- --------------------------------------------------------------------------------
Monthly Quarterly Semi-Annual Annual
Years Payment Payment Payment Payment
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
3 $ 29.80 $ 89.04 $ 176.99 $ 349.72
4 22.89 68.38 135.93 268.58
5 18.74 56.00 111.33 219.98
6 15.99 47.77 94.96 187.64
7 14.02 41.90 83.30 164.59
8 12.56 37.52 74.58 147.35
9 11.42 34.11 67.81 133.99
10 10.51 31.40 62.42 123.34
11 9.77 29.19 58.03 114.66
12 9.16 27.36 54.38 107.45
13 8.64 25.81 51.31 101.39
14 8.20 24.50 48.69 96.21
15 7.82 23.36 46.44 91.75
16 7.49 22.37 44.47 87.88
17 7.20 21.51 42.75 84.48
18 6.94 20.74 41.23 81.47
19 6.71 20.06 39.88 78.80
20 6.51 19.46 38.68 76.42
21 6.33 18.91 37.59 74.28
22 6.17 18.42 36.62 72.35
23 6.02 17.98 35.73 70.61
24 5.88 17.57 34.93 69.02
25 5.76 17.20 34.20 67.57
26 5.65 16.87 33.53 66.25
27 5.54 16.56 32.92 65.04
28 5.45 16.28 32.35 63.93
29 5.36 16.01 31.83 62.90
30 5.28 15.77 31.35 61.95
- --------------------------------------------------------------------------------
</TABLE>
33
<PAGE>
OPTION 3
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Payments Guaranteed for a Stated Period of Months
-------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Adjusted
Age of None 60 120 180 240
Annuitant
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
50 $ 4.34 $ 4.34 $ 4.31 $ 4.27 $ 4.22
51 4.41 4.40 4.38 4.33 4.27
52 4.48 4.47 4.45 4.40 4.32
53 4.56 4.55 4.52 4.46 4.38
54 4.64 4.63 4.59 4.53 4.44
55 4.72 4.71 4.67 4.60 4.50
56 4.81 4.80 4.75 4.67 4.56
57 4.91 4.89 4.84 4.75 4.62
58 5.01 4.99 4.93 4.83 4.69
59 5.12 5.10 5.03 4.92 4.75
60 5.23 5.21 5.13 5.00 4.82
61 5.36 5.33 5.24 5.09 4.88
62 5.49 5.45 5.35 5.19 4.95
63 5.63 5.59 5.47 5.28 5.02
64 5.78 5.73 5.60 5.38 5.08
65 5.94 5.89 5.73 5.48 5.15
66 6.11 6.05 5.87 5.58 5.21
67 6.29 6.22 6.02 5.69 5.27
68 6.49 6.41 6.17 5.79 5.33
69 6.70 6.60 6.33 5.90 5.38
70 6.92 6.81 6.49 6.00 5.43
71 7.17 7.04 6.66 6.10 5.48
72 7.43 7.27 6.84 6.20 5.52
73 7.71 7.53 7.02 6.30 5.55
74 8.02 7.80 7.20 6.39 5.59
75 8.35 8.08 7.38 6.48 5.62
- --------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
34
<PAGE>
OPTION 3
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
Payments Guaranteed for a Stated Period of Months
-------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Adjusted
Age of None 60 120 180 240
Annuitant
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
50 $ 5.26 $ 5.25 $ 5.22 $ 5.17 $ 5.11
51 5.33 5.32 5.28 5.23 5.15
52 5.40 5.38 5.34 5.29 5.20
53 5.47 5.45 5.41 5.35 5.26
54 5.54 5.53 5.48 5.41 5.31
55 5.63 5.61 5.56 5.47 5.36
56 5.71 5.69 5.63 5.54 5.42
57 5.80 5.78 5.72 5.61 5.47
58 5.90 5.88 5.81 5.69 5.53
59 6.01 5.98 5.90 5.77 5.59
60 6.12 6.09 6.00 5.85 5.65
61 6.24 6.21 6.10 6.93 5.71
62 6.37 6.33 6.21 6.02 5.77
63 6.51 6.46 6.33 6.11 5.83
64 6.66 6.60 6.45 6.20 5.89
65 6.82 6.75 6.57 6.30 5.95
66 6.99 6.91 6.71 6.39 6.01
67 7.17 7.08 6.85 6.49 6.06
68 7.36 7.27 6.99 6.59 6.12
69 7.57 7.46 7.15 6.69 6.17
70 7.80 7.67 7.30 6.78 6.21
71 8.05 7.89 7.47 6.88 6.25
72 8.31 8.13 7.64 6.97 6.29
73 8.59 8.38 7.81 7.06 6.33
74 8.90 8.64 7.99 7.15 6.36
75 9.23 8.93 8.16 7.23 6.38
- --------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
35
<PAGE>
OPTION 4
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Adjusted Ages
- -----------------------
Second
Annuitant Annuitant Option 4a Option 4b Option 4c Option 4d Option 4e
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.31
55 55 4.16 4.54 4.76 4.15 4.42
55 60 4.27 4.73 5.00 4.26 4.48
60 55 4.27 4.73 5.00 4.26 4.70
60 60 4.51 4.99 5.27 4.50 4.84
60 65 4.66 5.25 5.61 4.65 4.93
65 60 4.66 5.25 5.61 4.65 5.22
65 65 4.99 5.61 5.99 4.98 5.42
65 70 5.19 5.97 6.44 5.17 5.54
70 65 5.19 5.97 6.44 5.17 5.93
70 70 5.67 6.49 6.99 5.62 6.23
70 75 5.95 6.96 7.61 5.87 6.40
75 70 5.95 6.96 7.61 5.87 6.95
75 75 6.64 7.73 8.43 6.48 7.40
75 80 7.04 8.39 9.29 6.79 7.64
- --------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
36
<PAGE>
OPTION 4
LIFE INCOME FOR TWO PAYEES
AMOUNT OF FIRST MONTHLY PAYMENT FOR EACH $1,000
AFTER DEDUCTION OF ANY CHARGE FOR PREMIUM TAXES
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ADJUSTED AGES
- --------------------
SECOND
ANNUITANT ANNUITANT OPTION 4a OPTION 4b OPTION 4c OPTION 4d OPTION 4e
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 4.88 $ 5.26 $ 5.48 $ 4.88 $ 5.23
55 55 5.04 5.44 5.66 5.04 5.32
55 60 5.15 5.63 5.91 5.14 5.38
60 55 5.15 5.63 5.91 5.14 5.59
60 60 5.37 5.87 6.16 5.37 5.72
60 65 5.52 6.14 6.51 5.51 5.80
65 60 5.52 6.14 6.51 5.51 6.10
65 65 5.83 6.49 6.87 5.82 6.29
65 70 6.04 6.84 7.34 6.00 6.41
70 65 6.04 6.84 7.34 6.00 6.81
70 70 6.49 7.35 7.87 6.44 7.08
70 75 6.77 7.84 8.51 6.68 7.25
75 70 6.77 7.84 8.51 6.68 7.81
75 75 7.45 8.60 9.33 7.27 8.25
75 80 7.86 9.28 10.20 7.57 8.49
- --------------------------------------------------------------------------------
</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
37
<PAGE>
- -------------------------------------------------------------------------------
[LOGO OF AETNA INSURANCE COMPANY OF AMERICA APPEARS HERE]
Aetna Insurance Company of America
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
(800) 531-4547
Group Variable, Fixed, or Combination Annuity Contract
Nonparticipating
- -------------------------------------------------------------------------------
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA.
APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR
DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT
APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY.
<PAGE>
Aetna Insurance Company of America
Endorsement
This Contract is endorsed as follows.
Add the following to Section I, General Definitions:
Dollar Cost Averaging - A program that permits the Certificate Holder to
systematically transfer amounts from any of the Funds and the one-year MG
Account Guaranteed Term to any of the Funds by completing the appropriate
section of the enrollment form or a Dollar Cost Averaging election form.
Delete Section 1.06, Beneficiary, and replace it with the following:
1.06 Beneficiary - The individual or estate entitled to receive any payment
from the Account upon the death of the Annuitant, or if the Certificate
Holder is different from the Annuitant, upon the death of the
Certificate Holder. If the Account is held by joint Certificate
Holders, the survivor will be deemed the designated Beneficiary and any
other Beneficiary on record will be treated as the contingent
Beneficiary.
Delete Section 1.07, Certificate Holder, and replace it with the following:
1.07 Certificate Holder - A person who purchases an interest in this
Contract as evidenced by a certificate. Aetna reserves the right to
limit ownership to natural persons. If more than one Certificate Holder
owns an Account, each Certificate Holder will be a joint Certificate
Holder. Any joint Certificate Holder must be the spouse of the other
joint Certificate. Joint Certificate Holders have joint ownership
rights and both must authorize exercising any ownership rights unless
Aetna allows otherwise. If the Account is owned by a nonnatural person,
the death benefit will be paid at the death of the Annuitant.
Delete Section 1.21, Market Value Adjustment, and replace it with the following.
1.21 Market Value Adjustment - An adjustment that may apply to an amount
withdrawn or transferred from an MG Account Guaranteed Term prior to
the end of that Guaranteed Term. The adjustment reflects the change in
the value of the investment due to changes in interest rates since the
date of deposit and is computed using the formula given in 3.06. The
adjustment is expressed as a percentage of each dollar withdrawn or
transferred.
1
<PAGE>
Delete Section 2.04, Payments and Elections, and replace it with the following:
2.04 Payments and Elections - While the Certificate Holder is living, Aetna
will pay the Certificate Holder any Annuity payments as and when due.
After the Certificate Holder's death, or at the death of the first
Certificate Holder if the Account is owned jointly, any Annuity
payments remaining to be made will be paid in accordance with 4.03.
Aetna will determine other payments and/or elections as of the end of
the Valuation Period in which the request is received at its Home
Office. Such payments will be made within seven calendar days of
receipt at its Home Office of a written claim for payment which is in
good order, except as provided in 3.15.
Delete Section 2.06, Control of Contract, and replace it with the following:
2.06 Control of Contract - This is a Contract between the Contract Holder
and Aetna. The Contract Holder has title to the Contract. Contract
Holder rights are limited to accepting or rejecting Contract
modifications. The Certificate Holder has all other rights to amounts
held in his or her Account.
Each Certificate Holder shall own all amounts held in his or her
Account. Each Certificate Holder may make any Certificate Holder
choices allowed under this Contract. Certificate Holder choices made
under this Contract must be in writing. If the Account is owned jointly
both joint Certificate Holders must authorize any Certificate Holder
change in writing. Until receipt of such choices at Aetna's Home
Office, Aetna may rely on any previous choices made.
The Contract is not subject to the claims of any creditors of the
Contract Holder or Certificate Holder, except to the extent permitted
by law.
The Certificate Holder may assign or transfer his or her rights under
the Contract. Aetna reserves the right not to accept assignment or
transfer to a nonnatural person. Any assignment or transfer made must
be submitted to Aetna's Home Office in writing and will not be
effective until accepted by Aetna.
Delete Section 2.07, Designation of Beneficiary, and replace it with the
following:
2.07 Designation of Beneficiary - Each Certificate Holder shall name his or
her Beneficiary. If the Account is owned jointly, both joint
Certificate Holders must agree in writing to the Beneficiary
designated. The Beneficiary may be changed at any time. Changes to a
Beneficiary must be submitted to Aetna's Home Office in writing and
will not be effective until accepted by Aetna.
2
<PAGE>
Delete the first two paragraphs of Section 3.06, Market Value Adjustment, and
replace them with the following:
3.06 Market Value Adjustment - Except as noted below, an MVA will apply to a
withdrawal from the MG Account before the end of a Guaranteed Term when
the withdrawal is:
(a) A Transfer, except for Transfers from the one-year MG Account
Guaranteed Term under the Dollar Cost Averaging program or, as
specified in 1.23, MG Account Matured Term Value Transfer;
(b) A full or partial surrender (including a 10% free withdrawal under
3.14), except for a partial withdrawal under the Systematic
Withdrawal Option (see 3.10); or
(c) An election of Annuity option 2 (see 4.07).
Full and partial surrenders and Transfers made within six months after
the date of the Annuitant's death will be the greater of:
(a) The aggregate MVA amount which is the sum of all market value
adjusted amounts calculated due to a withdrawal of amounts. This
total may be greater or less than the Current Value of those
amounts; or
(b) The applicable portion of the Current Value in the MG Account.
Delete Section 3.07, Transfer of Current Value from the Funds or MG Account, and
replace them with the following:
3.07 Transfer of Current Value from the Funds or MG Account - Before an
Annuity option is elected, all or any portion of the Adjusted Current
Value of the Certificate Holder's Account may be transferred from any
Fund or Guaranteed Term of the MG Account:
(a) To any other Fund; or
(b) To an Guaranteed Term of the MG Account available in the current
Deposit Period.
Transfer requests can be submitted as a percentage or as a dollar
amount. Aetna may establish a minimum transfer amount. Within a
Guaranteed Term Group, the amount to be surrendered to transferred will
be withdrawn first from the oldest Deposit Period, then from the next
oldest, and so on until the amount requested is satisfied.
3
<PAGE>
The Certificate Holder may make an unlimited number of Transfers
during the Accumulation Period. The number of free Transfers allowed
by Aetna is shown on Contract Schedule I. Additional Transfers may be
subject to a Transfer fee as shown on Contract Schedule I.
Amounts transferred from the MG Account under the Dollar Cost
Averaging program, or amounts transferred as a Matured Term Value on
or within one calendar month of the Term's Maturity Date, do not count
against the annual Transfer limit.
Amounts applied to Guaranteed Terms of the MG Account may not be
transferred to the Funds or to another Guaranteed Term during the
Deposit Period or for 90 days after the close of the Deposit Period
except for (1) a Matured Term Value(s) during the calendar month
following the Term's Maturity Date and (2) amounts transferred from
the one-year MG Account Guaranteed Term under the Dollar Cost
Averaging program.
Delete the first paragraph in Section 3.10, Systematic Withdrawal Option (SWO),
and replace it with the following:
3.10 Systematic Withdrawal Option (SWO) - A distribution option under which
a portion of the Account's Current Value will be automatically
surrendered and distributed each year. SWO payments will be calculated
on the Account's full Current Value. The distributed amount is
withdrawn pro rata from each investment option under the Account. A
Surrender Fee will not be deducted from any portion of the Current
Value which is paid as a distribution under SWO. Certificate Holders
should consult their tax advisor prior to requesting this distribution
option. Aetna will not be responsible for any adverse tax consequences
due to receiving SWO payments.
Delete Section 3.11, Death Benefit Amount, and replace it with the following:
3.11 Death Benefit Amount - If the Certificate Holder or Annuitant dies
before Annuity payments start, the Beneficiary is entitled to a death
benefit under the Account. If the Account is owned jointly, the death
benefit is paid at the death of the first joint Certificate Holder to
die. The claim date is the date when proof of death and the
Beneficiary's claim are received in good order at Aetna's Home Office.
The amount of the death benefit is determined as follows:
(a) Death of Annuitant less than 75 years of age: The guaranteed death
benefit is the greatest of:
4
<PAGE>
(1) The sum of all Net Purchase Payment(s) made to the Account (as
of the date of death) minus the sum of all amounts surrendered,
applied to an Annuity, or deducted from the Account;
(2) The highest step-up value as of the date of death. A step-up
value is determined on each anniversary of the Effective Date.
Each step-up value is calculated as the Account's Current Value
on the Effective Date anniversary, increased by the amount of
any Purchase Payment(s) made, and decreased by the sum of all
amounts surrendered, deducted, and/or applied to an Annuity
option since the Effective Date anniversary.
(3) The Account's Current Value as of the date of death.
The excess, if any, of the guaranteed death benefit value over the
Account's Current Value is determined as of the date of death. Any
excess amount will be deposited in the Account and allocated to the
Aetna Variable Encore Fund as of the claim date. The Current Value
on the claim date, plus any excess amount deposited, becomes the
Account's Current Value.
(b) Death of Annuitant age 75 or greater: The death benefit amount is
the greatest of:
(1) The sum of all Net Purchase Payment(s) made to the Account (as
of the date of death) minus the sum of all amounts surrendered,
applied to an Annuity, or deducted from the Account;
(2) The highest step-up value prior to the Certificate Holder's
75th birthday. A step-up value is determined on each
anniversary of the Effective Date. Each step-up value is
calculated as the Account's Current Value on the Effective Date
anniversary, increased by the amount of any Purchase Payment(s)
made, and decreased by the sum of all amounts surrendered,
deducted, and/or applied to an Annuity option since the
Effective Date anniversary.
(3) The Account's Current Value as of the date of death.
The excess, if any, of the guaranteed death benefit value over the
Account's Current Value is determined as of the date of death. Any
excess amount will be deposited in the Account and allocated to the
Aetna Variable Encore Fund as of the claim date. The Current Value
on the claim date, plus any excess amount deposited, becomes the
Account's Current Value.
(c) Death of Certificate Holder if the Certificate Holder is not the
Annuitant: The death benefit amount is the Account's Adjusted
Current Value on the claim
5
<PAGE>
date. A Surrender Fee may apply to any full or partial surrender
(see 3.14 and Contract Schedule I).
(d) At the death of a surviving spouse Beneficiary who continued the
Account in his or her own name, the death benefit amount is equal
to the Account's Current Value less any applicable Surrender Fee
on the amount of any Purchase Payment(s) made since the death of
the Certificate Holder.
Delete Section 3.12, Death Benefit Options available to Beneficiary, and
replace it with the following:
3.12 Death Benefit Options available to Beneficiary - Prior to any election,
or until amounts must be otherwise distributed under this section, the
Account's Current Value will be retained in the Account. The
Beneficiary has the right to allocate or reallocate any amount to any
available investment option (subject to an MVA if applicable). The
following options are available to the Beneficiary:
(a) When the Certificate Holder is the Annuitant: If the Certificate
Holder/Annuitant dies, and:
(1) If the Beneficiary is the Certificate Holder's surviving
spouse, the Beneficiary may exercise all Certificate Holder
rights under the Contract and continue in the Accumulation
Period, or may elect (i), (ii), or (iii) below. Under the Code,
distributions from the Account are not required until the
spousal Beneficiary's death. The spousal Beneficiary may elect
to:
(i) Apply some or all of the Adjusted Current Value to
Annuity option 2, 3 or 4 (see 4.07);
(ii) Apply some or all of the Adjusted Current Value to
Annuity option 1 (see 4.07); or
(iii) Receive, at any time, a lump sum payment equal to the
Account's Adjusted Current Value.
(2) If the Beneficiary is other than the Certificate Holder's
surviving spouse, then options (i), (ii), or (iii) under (1)
above apply. Any portion of the Adjusted Current Value not
applied to Annuity option 2, 3 or 4 within one year of the
Certificate Holder's death, must be distributed within five
years of the date of death.
(3) If no Beneficiary exists, a lump sum payment equal to the
Adjusted Current Value will be made to the Certificate Holder's
estate.
6
<PAGE>
(b) When the Certificate Holder is not the Annuitant and the
Certificate Holder dies, and:
(1) If the Beneficiary is the Certificate Holder's surviving
spouse, the Beneficiary may exercise all Certificate Holder
rights under the Contract and continue in the Accumulation
Period, or may elect (i), (ii), or (iii) below. Under the
Code, distributions from the Account are not required until
the spousal Beneficiary's death. The spousal Beneficiary may
elect to:
(i) Apply some or all of the Adjusted Current Value to
Annuity option 2, 3 or 4 (see 4.07);
(ii) Apply some or all of the Surrender Value to Annuity
option 1 (see 4.07); or
(iii) Receive, at any time, a lump sum payment equal to the
Account's Surrender Value.
(2) If the Beneficiary is other than the Certificate Holder's
surviving spouse, then options (i), (ii), or (iii) under (1)
above apply. Any portion of the Adjusted Current Value not
applied to Annuity Option 2, 3, or 4 within one year of the
Certificate Holder's death, must be distributed within five
years of the date of death.
(3) If no Beneficiary exists, a lump sum payment equal to the
Surrender Value will be made to the Certificate Holder's
estate.
(c) When the Certificate Holder is not the Annuitant and the Annuitant
dies: The Beneficiary must elect Annuity option 2, 3, or 4 within
60 days of the date of death or the gain, if any, will be
includable in the Beneficiary's income in the tax year in which
the Annuitant dies.
Delete Section 3.13, Liquidation of Surrender Value, and replace it with the
following:
3.13 Liquidation of Surrender Value - All or any portion of the Account's
Current Value may be surrendered at any time. Surrender requests can
be submitted as a percentage of the Account's Current Value or as a
specific dollar amount. Net Purchase Payment amounts are withdrawn
first, and then the excess value, if any. For any partial surrender,
amounts are withdrawn on a pro rata basis from the Fund(s) and/or the
Guaranteed Term(s) Groups of the MG Account in which the Current Value
is invested. Within a Guaranteed Term Group, the amount to be
surrendered or transferred will be withdrawn first from the oldest
Deposit Period, then from the next oldest, and so on until the amount
requested is satisfied.
7
<PAGE>
After deduction of the Maintenance Fee, if applicable, the
surrendered amount shall be reduced by a Surrender Fee, if
applicable. An MVA may apply to amounts surrendered from the MG
Account.
Delete subsection (a) of Section 4.03, Death of Annuitant/Beneficiary, and
replace it with the following:
4.03 Death of Annuitant/Beneficiary; (a) Certificate Holder is Annuitant:
When the Certificate Holder is the Annuitant and the Annuitant dies
under option 2 or 3, or both the Annuitant and the second Annuitant die
under option 4(d), the present value of any remaining guaranteed
payments will be paid in one sum to the Beneficiary, or upon election
by the Beneficiary, any payments remaining will continue to the
Beneficiary. If option 4 has been elected and the Certificate Holder
dies, the remaining payments will continue to the successor payee. If
no successor payee has been designated, the Beneficiary will be treated
as the successor payee. If the Account has joint Certificate Holders,
the surviving joint Certificate Holder will be deemed the successor
payee.
Delete the first paragraph of subsection (b) of Section 4.03, Death of
Annuitant/Beneficiary, and replace it with the following:
(b) Certificate Holder is Not Annuitant: When the Certificate Holder is not
the Annuitant and the Certificate Holder dies, the remaining payments
under options 2, 3 or 4 will continue to the successor payee. If no
successor payee has been designated, the Beneficiary will be treated as
the successor payee. If the Account has joint Certificate Holders, the
surviving joint Certificate Holder will be deemed the successor payee.
Endorsed and made part of the Certificate on the Effective Date of the Contract.
/s/ SIGNATURE APPEARS HERE
President
Aetna Insurance Company of America
<PAGE>
Exhibit 24(b)(5)
[LOGO OF AETNA
INSURANCE COMPANY
OF AMERICA
APPEARS HERE]
AETNA MARATHON APPLICATION FORM Aetna Insurance Company of America
GROUP VARIABLE Home Office: 151 Farmington Avenue
ANNUITY CONTRACT Hartford, Connecticut 06156-8022
- --------------------------------------------------------------------------------
CONTRACT 1. Name of Contract Holder
HOLDER E. G. Anybroker
INFORMATION --------------------------------------------------------------------
2. Address
123 Sunset Street
--------------------------------------------------------------------
City State ZIP Code
Your City Your State 06000
--------------------------------------------------------------------
3. Tax Identification No.
--------------------------------------------------------------------
4. Contract effective date
February 1, 1995
--------------------------------------------------------------------
5. Type of Contract [X]Flexible Premium (Non-Qualified)
[_]IRA Rollover (Section 408)
--------------------------------------------------------------------
6. Will this contract change or replace any existing life
insurance or annuity contract: [_] Yes [X] No
--------------------------------------------------------------------
If yes, please provide carrier name, account number, and date to be
cancelled.
--------------------------------------------------------------------
7. Special Requests
--------------------------------------------------------------------
I understand that amounts withdrawn from a Marathon Account
Guaranteed Term may be subject to a market value adjustment prior to
the maturity date of that Term as specified in the contract. I
further understand that Annuity payments and account values (if
any), when based on the investment experience of a separate account,
are variable and not guaranteed as to fixed dollar amount.
I acknowledge receipt of the current prospectus for the Aetna
Marathon Variable Annuity Contract dated. February 1, 1995 and all
current prospectuses pertaining to all of the investment options
under the contract. ([_] Check here to receive a Statement of
Additional Information for the Aetna Marathon Variable Annuity
Contract.)
Dated at Your City, Your State this 1st day of February 1995.
---------------------- -------- -------- --
City and State
R. C. Agent E. G. Anybroker
----------------------------- --------------------------
Witness Contract Holder
------------------------------------------------------------------
Corrections and amendments (Home Office Use Only). Errors and
omissions may be corrected by the Company but no change in plan,
classification, amount, or extra benefits shall be made without
written consent of the Contract Holder. (N/A in W. Va.)
------------------------------------------------------------------
AGENT'S Do you have any reason to believe any existing life insurance or
NOTE annuity contracts will be modified or replaced if this contract is
issued? [_] Yes [X] No
R. C. Agent
-------------------------------
Signature of Agent
Home Office Use: Accepted
-------------------
<PAGE>
Exhibit 24(b)(6)
CERTIFICATE OF INCORPORATION
_____ CORPORATION
------------------------------
For office use only
ACCOUNT NO.
INITIALS
------------------------------
STATE OF CONNECTICUT
SECRETARY OF THE STATE
The undersigned incorporation(s) hereby form(s) a corporation under the Stock
Corporation Act of the State of Connecticut.
The name of the corporation is Aetna Insurance Company of America
-------------------------------------------------
The nature of the business to be transacted, or the purposes to be promoted or
carried out by the corporation, are as follows:
The corporation shall have the power to make insurance upon lives; to grant and
issue annuities, either in connection with or separate from contracts of
insurance predicated upon life risks; to issue policies stipulated to be with or
without participation in profits; to issue policies or certificates of insurance
against loss of life or personal injury resulting from any cause, and against
loss resulting from disease or accident, and against any other loss or risk
which may be the subject of life, accident or health insurance; and to cede
reinsurance of any such risks or hazards. The corporation shall also have the
power generally to do a life, accident and health insurance business and to
insure against any and all hazards or risks against which life, accident or
health insurance companies are now, or may hereafter at any time be authorized
to insure by the laws of this State, or of any other state or territory of the
United States or foreign countries in which the company may be licensed to carry
on business; and to engage in any lawful act or activity for which corporations
may be formed under the Stock Corporation Act of the State of Connecticut.
<PAGE>
(Continued)
3. The designation of each class of shares, the authorized number of shares of
each such class, and the par value (if any) of share thereof, are as follows
There shall be one class of shares, denominated common stock, with a par
value of two thousand dollars ($2,000) per share. The authorized number of
common shares is one thousand (1,000).
4. The terms, limitations and relative rights and preferences of each class of
shares and series thereof (if any), or an express grant authority to the
board of directors pursuant to Section 33-341. 1959 Supp Conn G.S., are as
follows
Each share of common stock shall have one vote on all matters on which
shareholders are entitled to vote by this Certificate, the by-laws of the
corporation or the statutes of Connecticut. Each share of common stock shall
participate equally in any dividend distribution and upon liquidation or
dissolution.
5. The minimum amount of stated capital with which the corporation shall
commence business is two million dollars ($2,000,000) and the minimum amount
of capital surplus with which the corporation shall commence business is two
million one hundred thousand dollars ($2,100,000). (Not less than one
thousand dollars).
6. Other provisions
See Attachment A hereto
Dated at Hartford, Connecticut this 3rd day of January, 1990
------------------------- --- ------- --
We hereby declare, under the penalties of false statement, that the statements
made in the foregoing certificate are true.
This certificate of incorporation must be signed by one or more incorporators
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NAME OF INCORPORATOR (Print or Type) NAME OF INCORPORATOR (Print or Type) NAME OF INCORPORATOR (Print or Type)
Aetna Life and Casualty Company Aetna Life and Casualty Company
By: Lucille M. Nickerson,Secretary By: Stephen B. Middlebrook, Senior VP
- ------------------------------------------------------------------------------------------------------------------------------------
SIGNED (Incorporator) SIGNED (Incorporator) SIGNED (Incorporator)
/s/Lucille M. Nickerson /s/Stephen B.Middlebrook
- ------------------------------------------------------------------------------------------------------------------------------------
NAME OF INCORPORATOR (Print or Type) NAME OF INCORPORATOR (Print or Type) NAME OF INCORPORATOR (Print or Type)
- ------------------------------------------------------------------------------------------------------------------------------------
SIGNED (Incorporator) SIGNED (Incorporator) SIGNED (Incorporator)
- ------------------------------------------------------------------------------------------------------------------------------------
FRANCHISE FEE FILING FEE CERTIFICATION FEE TOTAL FEES
$150.00 $45.00 $99.00 $294.00
--------------------------------------------------------------------------
FILED SIGNED (For Secretary of the State)
STATE OF CONNECTICUT 74 O/A
--------------------------------------------------------------------------
JAN 3 3 oo PM '90 CERTIFIED COPY SENT ON (Date) INITIALS
--------------------------------------------------------------------------
SECRETARY OF THE STATE TO N. Galvin, Aetna Life and Casualty Company, 151 Farmington
Avenue, Hartford, Connecticut 06156
--------------------------------------------------------------------------
By____________________ CARD LIST PROOF
====================================================================================================================================
</TABLE>
<PAGE>
ATTACHMENT A
6.(7) Other provisions:
(a) The principal office of the corporation shall be in the City of
Hartford or in some other city or town in Connecticut, and the
corporation may establish and maintain other offices and agencies
in Connecticut and elsewhere.
(b) To organize the corporation, the Incorporator shall open books of
subscriptions and shall receive subscriptions to the capital stock
of the corporation, receive the first installments on such
subscriptions, and close the subscription books when the capital
stock has been subscribed to the full amount with which the
Incorporator shall have determined to commence business. When the
capital stock has been so subscribed, the Incorporator shall call
the first meeting of the subscribers and, when the by-laws have
been adopted and the directors chosen, the Incorporator shall pay
to the corporation all monies received by it upon subscription to
the capital stock, and the corporation shall thereupon be fully
organized.
(c) The personal liability of any director of the corporation to the
corporation or its shareholders for monetary damages for breach of
duty as a director shall be limited to an amount that is equal to
the compensation received by the director for serving the
corporation during the year of the violation if such breach did not
(i) involve a knowing and culpable violation of law by the
director; (ii) enable the director or an associate, as defined in
subdivision (3) of Section 33-374d of the Connecticut General
Statutes, to receive an improper personal gain; (iii) show a lack
of good faith and a conscious disregard for the duty of the
director to the corporation under circumstances in which the
director was aware that his conduct or omission created an
unjustifiable risk of serious injury to the corporation; (iv)
constitute a sustained and unexcused pattern of inattention that
amounted to an abdication of the director's duty to the
corporation; or (v) create liability under Section 33-321 of the
Connecticut General Statutes. Any repeal or modification of this
Section shall not adversely affect any right or protection of a
director of the corporation existing hereunder with respect to any
act or omission occurring prior to such repeal or modification.
<PAGE>
APPROVED
INSURANCE DEPARTMENT
STATE OF CONNECTICUT
6-8-90
J. Kelly
Certificate of Amendment of the Certificate
of Incorporation of Aetna Insurance Company of America
------------------------------------------------------
1. The name of the company is Aetna Insurance Company of America.
2. The Certificate of Incorporation of the Company is amended only by the
following resolution which was adopted by the Board of Directors of the
Company and by the sole holder of all the outstanding shares entitled to
vote thereon, in accordance with Section 33-360(b)(3) of the Connecticut
Stock Corporation Act.
RESOLVED: That the Certificate of Incorporation of the Company, dated
January 3, 1990, shall be amended by increasing the
authorized number of shares of common stock to 10,000.
3. The above resolution was adopted by the Board of Directors and by the Sole
Shareholder.
4. The vote of the Sole Shareholder pursuant to written consent was as follows:
<TABLE>
<CAPTION>
Number of Shares Total Voting Vote Required Voted for
Entitled to Vote Power of Shares for Adoption Adoption
- ---------------- --------------- ------------- ---------
<S> <C> <C> <C>
1,000 1,000 667 1,000
</TABLE>
Dated at Hartford, Connecticut, this 7th day of June, 1990.
---
We hereby declare, under the penalties of false statement, that the
statements made in the foregoing certificate are true.
/s/John J. Martin
--------------------------
John J. Martin
President
[Corporate Seal]
/s/Steven J. Lauwers
--------------------------
Steven J. Lauwers
Secretary
FILED
State of Connecticut
June 8 2:00 PM '90
Secretary of the State
By JRB
-----------
<PAGE>
BY-LAWS
OF
AETNA INSURANCE COMPANY OF AMERICA
ARTICLE I
SHAREHOLDERS' MEETINGS
Section 1. The Annual Meeting of the Shareholders of the Company shall be
----------
held at the home office of the Company in the City of Hartford in each year on
such day in March or April and at such hour as the Board of Directors may
prescribe.
Section 2. Special meetings of the shareholders may be called by the Board
----------
or the President. Each such meeting shall be held on the date and at the hour
specified in the call for the meeting and, unless another place within or
without the State of Connecticut has been specified in any such call by the
Board or the President, at the home office of the Company in the City of
Hartford.
Section 3. The quorum for each meeting of shareholders shall consist of a
----------
majority of the voting power of shares entitled to vote at such meeting.
ARTICLE II
DIRECTORS
Section 1. The Board of Directors shall consist of not less than three and
----------
not more than twenty-one Directors, and the number of directorships at any time
within such minimum and maximum range shall be the number fixed by vote of the
Shareholders or Directors or, in the absence thereof, shall be the number of
Directors elected at the preceding Annual Meeting of Shareholders. If a vacancy
in the Board of Directors is created by an increase in the number of
directorships, it may be filled for the unexpired term by action of the
Shareholders or by the concurring vote of Directors holding a majority of the
directorships, which number of directorships shall be the number prior to the
vote on the increase. All other vacancies in the Board shall be filled in the
manner provided by law.
Section 2. The Board of Directors may, by resolution or resolutions passed
----------
by a majority of the whole Board, designate one or more committees, each
committee to consist of two or more of the Directors of the Company. The Board
may designate one or more Directors as alternate member(s) of any committee, who
may replace any absent or disqualified member(s) at any meeting of the
committee. In the absence or disqualification of any member of such committee or
committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board to act at the meeting in the
place of any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the Board,
shall have and may exercise all the powers and authority of the Board in the
management of the business and affairs of the Company.
<PAGE>
Section 3. Regular meetings of the Board shall be held at such place and on
----------
such day and hour at such periodic intervals as the Board may from time to time
designate. Notice of such regular meetings need not be given, but the Secretary
shall notify each Director by mail of the action of the Board designating or
changing the place, period, day, or hour of such regular meetings.
Section 4. Special meetings of the Board shall be held at the call of the
----------
President or not less than one-third of the Directors then in office.
Section 5. A Quorum shall consist of a majority of the Directors at the
----------
time in office, but not less than two Directors nor less than one-third of the
number of Directors provided for by Article II, Section 1.
Section 6. The Board shall fix the compensation of each Director and of
----------
each member of a committee appointed by the Board pursuant to Article II,
Section 2.
ARTICLE III
OFFICERS
Section 1. The officers of the Company shall be a President, a Secretary
----------
and a Treasurer. Such officers shall be appointed by the Board. The Board may
also appoint, or authorize the President to appoint, one or more Senior Vice
Presidents, Executive Vice Presidents, Vice Presidents, Assistant Vice
Presidents, Assistant Secretaries, Assistant Treasurers, and such other officers
or agents as the Board, or President if so authorized, may deem advisable. The
Board shall fix the salary or compensation of any officer appointed by the
President.
Section 2. The President shall be the chief executive and operating officer
----------
of the Company, subject to the direction of the Board. The President shall be
responsible for the general operations of the Company and shall have such
authority and responsibility and perform such duties as are specifically
prescribed for such office.
Section 3. The Secretary shall keep accurate minutes of all meetings of
----------
shareholders, directors and committees, and shall perform all duties commonly
incident to such office and as provided by law and shall perform such other
duties and have such other powers as the Board may from time to time designate.
In the Secretary's absence or disability, an Assistant Secretary or such other
person as may be designated by the Board or the chairman of the meeting shall
perform the Secretary's duties.
Section 4. The Treasurer shall be the principal financial officer of the
----------
Company, and shall perform all duties commonly incident to such office and as
provided by law, and shall have such other authority and responsibility and
perform such other duties as the Board may from time to time designate. In the
Treasurer's absence or disability, an Assistant Treasurer or such other person
as may be designated by the Board shall perform the Treasurer's duties.
<PAGE>
ARTICLE IV
CORPORATE SEAL
Section 1. The corporate seal of the Company consists of the corporate name
----------
"Aetna Insurance Company of America" in a circle, and the words "Incorporated
Connecticut" within the circle.
Section 2. The corporate seal shall be in the custody of the Secretary and
----------
shall be affixed by the Secretary, or with the approval of the President, by the
Secretary's delegate to documents required to be executed under the seal of the
Company. Duplicate seals may be in the possession of such other officers of the
Company, and affixed to such documents, as the Board of Directors, or officers
acting under its authorization, may from time to time determine necessary or
desirable.
ARTICLE V
AMENDMENT OF BY-LAWS
These By-Laws may be rescinded or amended
(a) by an affirmative vote of the holders of a majority of the voting power
of shares entitled to vote thereon at a meeting of the shareholders in
the call for which written notice of such proposed action shall have been
given, or,
(b) by vote of a majority of the number of Directors provided for by Article
II, Section 1, at any meeting of the Board upon written notice to each
Director of the action proposed to be taken.
<PAGE>
Exhibit 24(b)(9)
151 Farmington Avenue SUSAN E. BRYANT
Hartford, CT 06156 Counsel
Law and Regulatory
Affairs, RE4C
(203) 273-7834
Fax: (203) 273-8340
May 25, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Aetna Insurance Company of America and its
Variable Annuity Account I
Registration Statement on Form N-4
Prospectus Title: Marathon Plus
Dear Sirs:
As Counsel of Aetna Insurance Company of America (the "Company"), I have
represented the Company in connection with Marathon Plus, a group and individual
variable annuity contract (the "Contract"), to be funded by the Company's
Variable Annuity Account I, and the Registration Statement on Form N-4 under the
Securities Act of 1933 and the Investment Company Act of 1940 relating to the
Contract.
In connection with such representation, I have reviewed the Registration
Statement for the Contract, including the prospectus, and relevant proceedings
of the Board of Directors of the Company.
Based upon this review, and assuming the securities represented by the Contract
is issued in accordance with the provisions of the prospectus, I am of the
opinion that the securities, when issued, will have been validly issued, and
will constitute a legal and binding obligation of the Company.
I further consent to the use of this opinion as an exhibit to the Registration
Statement and to my being named under the caption "Legal Matters" therein.
Very truly yours,
/s//Susan E. Bryant
- -------------------
Susan E. Bryant
Counsel
Aetna Insurance Company of America
<PAGE>
Exhibit 24(b)(10)
Consent of Independent Auditors
The Board of Directors of Aetna Insurance Company of America
and Contract Owners of Variable Annuity Account I:
We consent to the use of our report dated March 17, 1995 included herein and to
the reference to our Firm under the caption "INDEPENDENT AUDITORS" in the
Statement of Additional Information.
Our report dated March 17, 1995 refers to a change in 1993 in the Company's
methods of accounting for certain investments in debt and equity securities.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Hartford, Connecticut
May 30, 1995
<PAGE>
Exhibit 24(b)(13)
VARIABLE ANNUITY ACCOUNT I
SCHEDULE FOR COMPUTATION OF TOTAL RETURN CALCULATIONS
-----------------------------------------------------
Total Return Calculation (Standardized)
- ---------------------------------------
The standardized rate represents fund performance for the most recent 1-year,
5-year and 10-year periods. The "1-year rate" represents fund performance for
the period January 1, 1994 through December 31, 1994. The "5-year rate" is for
the period January 1, 1990 through December 31, 1994. The "10-year rate" is for
the period January 1, 1985 through December 31, 1994.
The formula used in the computation of the total return calculations is as
follows:
1/n
T=(ERV/P) where:
T = average annual total return
P = a hypothetical initial payment of $1,000
n = 1 for the "1-year rate," 5 for the "5-year rate," and 10 for the
"10-year rate"
ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of each of the periods
The unit values used in the calculation reflect the deduction of all recurring
charges during each period (e.g., the mortality and expense risk charges,
maintenance fees, administrative charge (if applicable) and deferred sales
charges). For calculating the redeemable value, the maintenance fee was
expressed as a percentage of assets based on the estimated average account size
under the Contracts.
Total Return Calculation (Non-Standardized)
- -------------------------------------------
The non-standardized rate represents fund performance for the most recent
1-year, 3-year, 5-year and 10-year periods. The 1-year rate is for the period
January 1, 1994 through December 31, 1994; and 3-year rate is for period
January 1, 1992 through December 31, 1994; the 5-year rate is for the period
January 1, 1990 through December 31, 1994; and the 10-year rate is for the
period January 1, 1985 through December 31, 1994.
The non-standardized figures will be calculated in a manner similar to the one
discussed above for the standardized figures, except that non-standardized
figures will not reflect the deduction of any applicable deferred sales charge
(which would decrease the level of performance shown if reflected in these
calculations).
<PAGE>
<TABLE>
<CAPTION>
Aetna Variable Fund (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
VARMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 976.32 -2.37% -2.46%
3 0.0% 1081.06 2.63% 2.54%
5 0.0% 1371.96 6.53% 6.44%
10 0.0% 3267.34 12.57% 12.48%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
VARMTH
VARMTH.UV
<S> <C>
12-99-84 3.286219
12-99-89 7.826182
12-99-91 9.932096
12-99-93 10.997616
12-99-94 10.737184
</TABLE>
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Aetna Income Shares (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
AISMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 948.65 -5.14% -5.23%
3 0.0% 1086.99 2.82% 2.73%
5 0.0% 1377.16 6.61% 6.52%
10 0.0% 2296.69 8.67% 8.58%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
AISMTH
AISMTH.UV
<S> <C>
12-99-84 4.495147
12-99-89 7.496521
12-99-91 9.497741
12-99-93 10.882773
12-99-94 10.323944
</TABLE>
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Aetna Encore Fund (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-----------------------------------------------------------------------------------
ENCMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 1026.35 2.64% 2.55%
3 0.0% 1067.55 2.20% 2.11%
5 0.0% 1198.96 3.70% 3.61%
10 0.0% 1631.13 5.01% 4.92%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
ENCMTH
ENCMTH.UV
<S> <C>
12-99-84 6.430484
12-99-89 8.748390
12-99-91 9.825225
12-99-93 10.219646
12-99-94 10.488958
</TABLE>
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
AIAF (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
AIAMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 982.39 -1.76% -1.85%
3 0.0% 1116.79 3.75% 3.66%
5 0.0% 1358.32 6.32% 6.23%
From 06-23-89 0.0% 1414.54 6.48% 6.39%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
AIAMTH
AIAMTH.UV
<S> <C>
06-23-89 7.664971 i
12-99-89 7.982223
12-99-91 9.708561
12-99-93 11.036731
12-99-94 10.842404 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Alger Balanced (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
ALGBLMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 943.99 -5.60% -5.69%
3 0.0% 1082.96 2.69% 2.60%
5 0.0% 1174.68 3.27% 3.18%
From 09-05-89 0.0% 1200.40 3.49% 3.40%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
ALGBLMTH
ALGBLMTH.UV
<S> <C>
09-05-89 8.268394 i
12-99-89 8.449437
12-99-91 9.165009
12-99-93 10.514274
12-99-94 9.925345 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Alger Income and Growth (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
ALIGTEMP
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 904.34 -9.57% -9.66%
3 0.0% 1108.38 3.49% 3.40%
5 0.0% 1334.66 5.94% 5.85%
From 11-14-88 0.0% 1424.22 5.94% 5.85%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
ALIGTEMP
ALIGTEMP.UV
<S> <C>
11-14-88 7.021367 i
12-99-89 7.492527
12-99-91 9.022198
12-99-93 11.057748
12-99-94 10.000000 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Alger Growth (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
ALGGMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 1000.26 0.03% -0.06%
3 0.0% 1338.36 10.20% 10.11%
5 0.0% 1902.23 13.72% 13.63%
From 01-08-89 0.0% 2328.37 15.19% 15.10%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
ALGGMTH
ALGGMTH.UV
<S> <C>
01-08-89 4.173216 i
12-99-89 5.108121
12-99-91 7.260203
12-99-93 9.714274
12-99-94 9.716797 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Alger MidCap (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
ALGMCMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 970.80 -2.92% -3.01%
From 04-99-93 0.0% 1333.65 18.80% 18.71%
From 04-99-93 0.0% 1333.65 18.80% 18.71%
From 04-99-93 0.0% 1333.65 18.80% 18.71%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
ALGMCMTH
ALGMCMTH.UV
<S> <C>
04-99-93 7.356424 i
12-99-93 10.106022
12-99-94 9.810919 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Alger Small Cap (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
ALSCTEMP
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 942.79 -5.72% -5.81%
3 0.0% 1075.17 2.45% 2.36%
5 0.0% 1789.90 12.35% 12.26%
From 09-20-88 0.0% 2794.57 17.78% 17.69%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
ALSCTEMP
ALSCTEMP.UV
<S> <C>
09-20-88 3.578368 i
12-99-89 5.586900
12-99-91 9.300822
12-99-93 10.606810
12-99-94 10.000000 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Fidelity Asset Manager (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FIDAMMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 926.24 -7.38% -7.47%
3 0.0% 1219.79 6.85% 6.76%
5 0.0% 1550.89 9.17% 9.08%
From 09-06-89 0.0% 1556.49 8.68% 8.59%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FIDAMMTH
FIDAMMTH.UV
<S> <C>
09-06-89 6.498087 i
12-99-89 6.521551
12-99-91 8.291758
12-99-93 10.919704
12-99-94 10.114227 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Fidelity Equity-Income (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FIDEIMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 1055.64 5.56% 5.47%
3 0.0% 1419.14 12.38% 12.29%
5 0.0% 1536.05 8.96% 8.87%
From 10-22-86 0.0% 2095.67 9.45% 9.36%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FIDEIMTH
FIDEIMTH.UV
<S> <C>
10-22-86 4.772831 i
12-99-89 6.511688
12-99-91 7.048113
12-99-93 9.475057
12-99-94 10.002271 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Fidelity Growth (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FIDEGMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 986.01 -1.40% -1.49%
3 0.0% 1250.50 7.74% 7.65%
5 0.0% 1561.62 9.32% 9.23%
From 11-07-86 0.0% 2361.38 11.12% 11.03%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FIDEGMTH
FIDEGMTH.UV
<S> <C>
11-07-86 4.414141 i
12-99-89 6.674788
12-99-91 8.335422
12-99-93 10.571333
12-99-94 10.423485 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Fidelity High Income (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FDHIMTHT
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 970.24 -2.98% -3.07%
3 0.0% 1398.96 11.84% 11.75%
5 0.0% 1796.16 12.43% 12.34%
From 10-11-85 0.0% 2289.11 9.40% 9.31%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FDHIMTHT
FDHIMTHT.UV
<S> <C>
10-11-85 4.368516 i
12-99-89 5.567431
12-99-91 7.148149
12-99-93 10.306690
12-99-94 10.000000 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Fidelity Index 500 (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FD500MTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 996.26 -0.37% -0.46%
From 08-27-92 0.0% 1140.41 5.76% 5.67%
From 08-27-92 0.0% 1140.41 5.76% 5.67%
From 08-27-92 0.0% 1140.41 5.76% 5.67%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FD500MTH
FD500MTH.UV
<S> <C>
08-27-92 8.768770 i
12-99-93 10.037523
12-99-94 10.000000 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Fidelity Investment Grade Bond (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FDIGMTHT
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 948.93 -5.11% -5.20%
3 0.0% 1092.03 2.98% 2.89%
5 0.0% 1312.11 5.58% 5.49%
From 12-05-88 0.0% 1440.50 6.20% 6.11%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FDIGMTHT
FDIGMTHT.UV
<S> <C>
12-05-88 6.942036 i
12-99-89 7.621332
12-99-91 9.157290
12-99-93 10.538141
12-99-94 10.000000 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Fidelity Overseas (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FIDOSMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 1003.11 0.31% 0.22%
3 0.0% 1195.96 6.15% 6.06%
5 0.0% 1235.06 4.31% 4.22%
From 02-13-87 0.0% 1532.57 5.57% 5.48%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FIDOSMTH
FIDOSMTH.UV
<S> <C>
02-13-87 6.722974 i
12-99-89 8.342462
12-99-91 8.615182
12-99-93 10.271516
12-99-94 10.303449 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
IMS Corporate Bond (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FEDCBMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
From 03-01-94 0.0% 954.05 -4.60% -4.69%
From 03-01-94 0.0% 954.05 -4.60% -4.69%
From 03-01-94 0.0% 954.05 -4.60% -4.69%
From 03-01-94 0.0% 954.05 -4.60% -4.69%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FEDCBMTH
FEDCBMTH.UV
<S> <C>
03-01-94 10.286665 i
12-99-94 9.814011 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
IMS Equity Growth & Income (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FEDGIMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
From 02-10-94 0.0% 980.98 -1.90% -1.99%
From 02-10-94 0.0% 980.98 -1.90% -1.99%
From 02-10-94 0.0% 980.98 -1.90% -1.99%
From 02-10-94 0.0% 980.98 -1.90% -1.99%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FEDGIMTH
FEDGIMTH.UV
<S> <C>
02-10-94 10.028900 i
12-99-94 9.838122 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
IMS U.S. Government Bond (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FEDGBMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
From 03-28-94 0.0% 1014.72 1.47% 1.38%
From 03-28-94 0.0% 1014.72 1.47% 1.38%
From 03-28-94 0.0% 1014.72 1.47% 1.38%
From 03-28-94 0.0% 1014.72 1.47% 1.38%
Accumulation Unit Values
------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FEDGBMTH
FEDGBMTH.UV
<S> <C>
03-28-94 9.927313 i
12-99-94 10.073476 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
IMS Utlity (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FEDUMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
From 02-10-94 0.0% 949.46 -5.05% -5.14%
From 02-10-94 0.0% 949.46 -5.05% -5.14%
From 02-10-94 0.0% 949.46 -5.05% -5.14%
From 02-10-94 0.0% 949.46 -5.05% -5.14%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FEDUMTH
FEDUMTH.UV
<S> <C>
02-10-94 10.407302 i
12-99-94 9.881346 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Janus Aspen Aggressive Growth (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
JAGMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 1149.91 14.99% 14.90%
From 09-13-93 0.0% 1352.78 26.20% 26.11%
From 09-13-93 0.0% 1352.78 26.20% 26.11%
From 09-13-93 0.0% 1352.78 26.20% 26.11%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
JAGMTH
JAGMTH.UV
<S> <C>
09-13-93 7.668394 i
12-99-93 9.021260
12-99-94 10.373656 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Janus Aspen Balanced (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
JBALMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 994.23 -0.58% -0.67%
From 09-13-93 0.0% 1061.28 4.69% 4.60%
From 09-13-93 0.0% 1061.28 4.69% 4.60%
From 09-13-93 0.0% 1061.28 4.69% 4.60%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
JBALMTH
JBALMTH.UV
<S> <C>
09-13-93 9.267979 i
12-99-93 9.892989
12-99-94 9.835912 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Janus Aspen Flexible Income (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
JFIMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 979.02 -2.10% -2.19%
From 09-13-93 0.0% 981.79 -1.41% -1.50%
From 09-13-93 0.0% 981.79 -1.41% -1.50%
From 09-13-93 0.0% 981.79 -1.41% -1.50%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
JFIMTH
JFIMTH.UV
<S> <C>
09-13-93 10.066883 i
12-99-93 10.095320
12-99-94 9.883519 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Janus Aspen Growth (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
JGMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 1014.54 1.45% 1.36%
From 09-13-93 0.0% 1045.65 3.50% 3.41%
From 09-13-93 0.0% 1045.65 3.50% 3.41%
From 09-13-93 0.0% 1045.65 3.50% 3.41%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
JGMTH
JGMTH.UV
<S> <C>
09-13-93 9.667554 i
12-99-93 9.964019
12-99-94 10.108882 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Janus Aspen Short-Term Bond (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
JSTBMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 995.13 -0.49% -0.58%
From 09-13-93 0.0% 993.92 -0.47% -0.56%
From 09-13-93 0.0% 993.92 -0.47% -0.56%
From 09-13-93 0.0% 993.92 -0.47% -0.56%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
JSTBMTH
JSTBMTH.UV
<S> <C>
09-13-93 10.027677 i
12-99-93 10.015473
12-99-94 9.966712 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Janus Aspen Worldwide (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
JWWORPT
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 1001.05 0.11% 0.02%
From 09-13-93 0.0% 1187.20 14.13% 14.04%
From 09-13-93 0.0% 1187.20 14.13% 14.04%
From 09-13-93 0.0% 1187.20 14.13% 14.04%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
JWWORPT
JWWORPT.UV
<S> <C>
09-13-93 8.423162 i
12-99-93 9.989537
12-99-94 10.000000 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Lexington Emerging Markets (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
LEXEMMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
From 03-99-94 0.0% 986.40 -1.36% -1.45%
From 03-99-94 0.0% 986.40 -1.36% -1.45%
From 03-99-94 0.0% 986.40 -1.36% -1.45%
From 03-99-94 0.0% 986.40 -1.36% -1.45%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
LEXEMMTH
LEXEMMTH.UV
<S> <C>
03-99-94 9.929607 i
12-99-94 9.794605 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Lexington Natural Resources (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
LEXNMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 932.99 -6.70% -6.79%
3 0.0% 1034.79 1.15% 1.06%
5 0.0% 813.03 -4.06% -4.15%
From 05-31-89 0.0% 929.34 -1.30% -1.39%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
LEXNMTH
LEXNMTH.UV
<S> <C>
05-31-89 9.744811 i
12-99-89 11.138797
12-99-91 8.751727
12-99-93 9.706659
12-99-94 9.056214 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
TCI Balanced (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
TCIBMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 993.17 -0.68% -0.77%
3 0.0% 976.43 -0.79% -0.88%
From 05-00-91 0.0% 1215.20 5.46% 5.37%
From 05-00-91 0.0% 1215.20 5.46% 5.37%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
TCIBMTH
TCIBMTH.UV
<S> <C>
05-00-91 8.354158 i
12-99-91 10.397068
12-99-93 10.221738
12-99-94 10.151972 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
TCI Growth (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
TCIGMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 0.0% 973.70 -2.63% -2.72%
3 0.0% 1035.64 1.17% 1.08%
5 0.0% 1417.76 7.23% 7.14%
From 11-20-87 0.0% 1864.91 9.16% 9.07%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
TCIGMTH
TCIGMTH.UV
<S> <C>
11-20-87 5.816299 i
12-99-89 7.650708
12-99-91 10.473611
12-99-93 11.139901
12-99-94 10.846873 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
TCI International (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
TCIIMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
From 05-00-94 0.0% 948.96 -5.10% -5.19%
From 05-00-94 0.0% 948.96 -5.10% -5.19%
From 05-00-94 0.0% 948.96 -5.10% -5.19%
From 05-00-94 0.0% 948.96 -5.10% -5.19%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
TCIIMTH
TCIIMTH.UV
<S> <C>
05-00-94 9.948573 i
12-99-94 9.440766 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Aetna Variable Fund (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
VARMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 913.15 -8.69% -8.78%
3 6.0% 1027.55 0.91% 0.82%
5 4.0% 1337.45 5.99% 5.90%
10 0.0% 3267.34 12.57% 12.48%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
VARMTH
VARMTH.UV
<S> <C>
12-99-84 3.286219
12-99-89 7.826182
12-99-91 9.932096
12-99-93 10.997616
12-99-94 10.737184
</TABLE>
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Aetna Income Shares (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
AISMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 885.29 -11.47% -11.56%
3 6.0% 1033.51 1.10% 1.01%
5 4.0% 1342.67 6.07% 5.98%
10 0.0% 2296.69 8.67% 8.58%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
AISMTH
AISMTH.UV
<S> <C>
12-99-84 4.495147
12-99-89 7.496521
12-99-91 9.497741
12-99-93 10.882773
12-99-94 10.323944
</TABLE>
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Aetna Encore Fund (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
ENCMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 963.53 -3.65% -3.74%
3 6.0% 1013.96 0.46% 0.37%
5 4.0% 1163.76 3.08% 2.99%
10 0.0% 1631.13 5.01% 4.92%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
ENCMTH
ENCMTH.UV
<S> <C>
12-99-84 6.430484
12-99-89 8.748390
12-99-91 9.825225
12-99-93 10.219646
12-99-94 10.488958
</TABLE>
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
AIAF (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
AIAMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 919.27 -8.07% -8.16%
3 6.0% 1063.49 2.07% 1.98%
5 4.0% 1323.75 5.77% 5.68%
From 06-23-89 4.0% 1380.20 6.01% 5.92%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
AIAMTH
AIAMTH.UV
<S> <C>
06-23-89 7.664971 i
12-99-89 7.982223
12-99-91 9.708561
12-99-93 11.036731
12-99-94 10.842404 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Alger Balanced (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
ALGBLMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 880.60 -11.94% -12.03%
3 6.0% 1029.46 0.97% 0.88%
5 4.0% 1139.38 2.64% 2.55%
From 09-05-89 4.0% 1165.20 2.92% 2.83%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
ALGBLMTH
ALGBLMTH.UV
<S> <C>
09-05-89 8.268394 i
12-99-89 8.449437
12-99-91 9.165009
12-99-93 10.514274
12-99-94 9.925345 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Alger Income and Growth (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
ALIGTEMP
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 840.67 -15.93% -16.02%
3 6.0% 1055.03 1.80% 1.71%
5 4.0% 1300.00 5.39% 5.30%
From 11-14-88 3.0% 1398.49 5.63% 5.54%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
ALIGTEMP
ALIGTEMP.UV
<S> <C>
11-14-88 7.021367 i
12-99-89 7.492527
12-99-91 9.022198
12-99-93 11.057748
12-99-94 10.000000 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Alger Growth (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
ALGGMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 937.26 -6.27% -6.36%
3 6.0% 1286.39 8.76% 8.67%
5 4.0% 1869.84 13.33% 13.24%
From 01-08-89 4.0% 2297.68 14.93% 14.84%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
ALGGMTH
ALGGMTH.UV
<S> <C>
01-08-89 4.173216 i
12-99-89 5.108121
12-99-91 7.260203
12-99-93 9.714274
12-99-94 9.716797 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Alger MidCap (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
ALGMCMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 907.60 -9.24% -9.33%
From 04-99-93 7.0% 1272.99 15.54% 15.45%
From 04-99-93 7.0% 1272.99 15.54% 15.45%
From 04-99-93 7.0% 1272.99 15.54% 15.45%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
ALGMCMTH
ALGMCMTH.UV
<S> <C>
04-99-93 7.356424 i
12-99-93 10.106022
12-99-94 9.810919 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Alger Small Cap (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
ALSCTEMP
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 879.39 -12.06% -12.15%
3 6.0% 1021.62 0.72% 0.63%
5 4.0% 1757.06 11.93% 11.84%
From 09-20-88 3.0% 2772.95 17.64% 17.55%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
ALSCTEMP
ALSCTEMP.UV
<S> <C>
09-20-88 3.578368 i
12-99-89 5.586900
12-99-91 9.300822
12-99-93 10.606810
12-99-94 10.000000 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Fidelity Asset Manager (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FIDAMMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 862.72 -13.73% -13.82%
3 6.0% 1167.11 5.29% 5.20%
5 4.0% 1517.09 8.69% 8.60%
From 09-06-89 4.0% 1522.72 8.23% 8.14%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FIDAMMTH
FIDAMMTH.UV
<S> <C>
09-06-89 6.498087 i
12-99-89 6.521551
12-99-91 8.291758
12-99-93 10.919704
12-99-94 10.114227 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Fidelity Equity-Income (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FIDEIMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 993.03 -0.70% -0.79%
3 6.0% 1367.65 11.00% 10.91%
5 4.0% 1502.19 8.48% 8.39%
From 10-22-86 0.0% 2095.67 9.45% 9.36%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FIDEIMTH
FIDEIMTH.UV
<S> <C>
10-22-86 4.772831 i
12-99-89 6.511688
12-99-91 7.048113
12-99-93 9.475057
12-99-94 10.002271 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Fidelity Growth (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FIDEGMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 922.91 -7.71% -7.80%
3 6.0% 1198.00 6.21% 6.12%
5 4.0% 1527.87 8.85% 8.76%
From 11-07-86 0.0% 2361.38 11.12% 11.03%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FIDEGMTH
FIDEGMTH.UV
<S> <C>
11-07-86 4.414141 i
12-99-89 6.674788
12-99-91 8.335422
12-99-93 10.571333
12-99-94 10.423485 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Fidelity High Income (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FDHIMTHT
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 907.03 -9.30% -9.39%
3 6.0% 1347.35 10.45% 10.36%
5 4.0% 1763.34 12.01% 11.92%
From 10-11-85 0.0% 2289.11 9.40% 9.31%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FDHIMTHT
FDHIMTHT.UV
<S> <C>
10-11-85 4.368516 i
12-99-89 5.567431
12-99-91 7.148149
12-99-93 10.306690
12-99-94 10.000000 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Fidelity Index 500 (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FD500MTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 933.23 -6.68% -6.77%
From 08-27-92 6.0% 1087.25 3.63% 3.54%
From 08-27-92 6.0% 1087.25 3.63% 3.54%
From 08-27-92 6.0% 1087.25 3.63% 3.54%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FD500MTH
FD500MTH.UV
<S> <C>
08-27-92 8.768770 i
12-99-93 10.037523
12-99-94 10.000000 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Fidelity Investment Grade Bond (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FDIGMTHT
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 885.57 -11.44% -11.53%
3 6.0% 1038.58 1.27% 1.18%
5 4.0% 1277.36 5.02% 4.93%
From 12-05-88 3.0% 1414.82 5.88% 5.79%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FDIGMTHT
FDIGMTHT.UV
<S> <C>
12-05-88 6.942036 i
12-99-89 7.621332
12-99-91 9.157290
12-99-93 10.538141
12-99-94 10.000000 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Fidelity Overseas (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FIDOSMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 940.13 -5.99% -6.08%
3 6.0% 1143.14 4.56% 4.47%
5 4.0% 1200.00 3.71% 3.62%
From 02-13-87 0.0% 1532.57 5.57% 5.48%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FIDOSMTH
FIDOSMTH.UV
<S> <C>
02-13-87 6.722974 i
12-99-89 8.342462
12-99-91 8.615182
12-99-93 10.271516
12-99-94 10.303449 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
IMS Corporate Bond (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FEDCBMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
From 03-01-94 7.0% 890.73 -10.93% -11.02%
From 03-01-94 7.0% 890.73 -10.93% -11.02%
From 03-01-94 7.0% 890.73 -10.93% -11.02%
From 03-01-94 7.0% 890.73 -10.93% -11.02%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FEDCBMTH
FEDCBMTH.UV
<S> <C>
03-01-94 10.286665 i
12-99-94 9.814011 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
IMS Equity Growth & Income (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FEDGIMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
From 02-10-94 7.0% 917.85 -8.22% -8.31%
From 02-10-94 7.0% 917.85 -8.22% -8.31%
From 02-10-94 7.0% 917.85 -8.22% -8.31%
From 02-10-94 7.0% 917.85 -8.22% -8.31%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FEDGIMTH
FEDGIMTH.UV
<S> <C>
02-10-94 10.028900 i
12-99-94 9.838122 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
IMS U.S. Government Bond (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FEDGBMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
From 03-28-94 7.0% 951.82 -4.82% -4.91%
From 03-28-94 7.0% 951.82 -4.82% -4.91%
From 03-28-94 7.0% 951.82 -4.82% -4.91%
From 03-28-94 7.0% 951.82 -4.82% -4.91%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FEDGBMTH
FEDGBMTH.UV
<S> <C>
03-28-94 9.927313 i
12-99-94 10.073476 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
IMS Utlity (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
FEDUMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
From 02-10-94 7.0% 886.11 -11.39% -11.48%
From 02-10-94 7.0% 886.11 -11.39% -11.48%
From 02-10-94 7.0% 886.11 -11.39% -11.48%
From 02-10-94 7.0% 886.11 -11.39% -11.48%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
FEDUMTH
FEDUMTH.UV
<S> <C>
02-10-94 10.407302 i
12-99-94 9.881346 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Janus Aspen Aggressive Growth (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
JAGMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 1087.96 8.80% 8.71%
From 09-13-93 7.0% 1292.25 21.83% 21.74%
From 09-13-93 7.0% 1292.25 21.83% 21.74%
From 09-13-93 7.0% 1292.25 21.83% 21.74%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
JAGMTH
JAGMTH.UV
<S> <C>
09-13-93 7.668394 i
12-99-93 9.021260
12-99-94 10.373656 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Janus Aspen Balanced (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
JBALMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 931.19 -6.88% -6.97%
From 09-13-93 7.0% 998.71 -0.10% -0.19%
From 09-13-93 7.0% 998.71 -0.10% -0.19%
From 09-13-93 7.0% 998.71 -0.10% -0.19%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
JBALMTH
JBALMTH.UV
<S> <C>
09-13-93 9.267979 i
12-99-93 9.892989
12-99-94 9.835912 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Janus Aspen Flexible Income (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
JFIMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 915.87 -8.41% -8.50%
From 09-13-93 7.0% 918.66 -6.32% -6.41%
From 09-13-93 7.0% 918.66 -6.32% -6.41%
From 09-13-93 7.0% 918.66 -6.32% -6.41%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
JFIMTH
JFIMTH.UV
<S> <C>
09-13-93 10.066883 i
12-99-93 10.095320
12-99-94 9.883519 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Janus Aspen Growth (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
JGMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 951.64 -4.84% -4.93%
From 09-13-93 7.0% 982.97 -1.31% -1.40%
From 09-13-93 7.0% 982.97 -1.31% -1.40%
From 09-13-93 7.0% 982.97 -1.31% -1.40%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
JGMTH
JGMTH.UV
<S> <C>
09-13-93 9.667554 i
12-99-93 9.964019
12-99-94 10.108882 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Janus Aspen Short-Term Bond (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
JSTBMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 932.10 -6.79% -6.88%
From 09-13-93 7.0% 930.88 -5.37% -5.46%
From 09-13-93 7.0% 930.88 -5.37% -5.46%
From 09-13-93 7.0% 930.88 -5.37% -5.46%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
JSTBMTH
JSTBMTH.UV
<S> <C>
09-13-93 10.027677 i
12-99-93 10.015473
12-99-94 9.966712 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Janus Aspen Worldwide (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
JWWORPT
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 938.06 -6.19% -6.28%
From 09-13-93 7.0% 1125.51 9.53% 9.44%
From 09-13-93 7.0% 1125.51 9.53% 9.44%
From 09-13-93 7.0% 1125.51 9.53% 9.44%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
JWWORPT
JWWORPT.UV
<S> <C>
09-13-93 8.423162 i
12-99-93 9.989537
12-99-94 10.000000 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Lexington Emerging Markets (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
LEXEMMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
From 03-99-94 7.0% 923.30 -7.67% -7.76%
From 03-99-94 7.0% 923.30 -7.67% -7.76%
From 03-99-94 7.0% 923.30 -7.67% -7.76%
From 03-99-94 7.0% 923.30 -7.67% -7.76%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
LEXEMMTH
LEXEMMTH.UV
<S> <C>
03-99-94 9.929607 i
12-99-94 9.794605 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
Lexington Natural Resources (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
LEXNMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 869.52 -13.05% -13.14%
3 6.0% 981.00 -0.64% -0.73%
5 4.0% 776.28 -4.94% -5.03%
From 05-31-89 4.0% 893.06 -2.00% -2.09%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
LEXNMTH
LEXNMTH.UV
<S> <C>
05-31-89 9.744811 i
12-99-89 11.138797
12-99-91 8.751727
12-99-93 9.706659
12-99-94 9.056214 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
TCI Balanced (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
TCIBMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 930.12 -6.99% -7.08%
3 6.0% 922.29 -2.66% -2.75%
From 05-00-91 6.0% 1162.49 4.19% 4.10%
From 05-00-91 6.0% 1162.49 4.19% 4.10%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
TCIBMTH
TCIBMTH.UV
<S> <C>
05-00-91 8.354158 i
12-99-91 10.397068
12-99-93 10.221738
12-99-94 10.151972 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
TCI Growth (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
TCIGMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
1 7.0% 910.52 -8.95% -9.04%
3 6.0% 981.85 -0.61% -0.70%
5 4.0% 1383.43 6.71% 6.62%
From 11-20-87 0.0% 1864.91 9.16% 9.07%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
TCIGMTH
TCIGMTH.UV
<S> <C>
11-20-87 5.816299 i
12-99-89 7.650708
12-99-91 10.473611
12-99-93 11.139901
12-99-94 10.846873 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
<TABLE>
<CAPTION>
TCI International (Marathon) mthaica.wwo
- ------------------------------------------------------------------------------
<S> <C>
Gross Deposit: 1000.00
Net Deposit: 1000.00
</TABLE>
<TABLE>
<CAPTION>
Redeemable Value
-------------------------------------------------------------------------------------
TCIIMTH
Nom. 30.00 M.F. (0.090%)
# of Years ---------------------------
Ending 12-94 DSC Value IRR MF IRR
- ------------ ---- --------- ------ ------
<S> <C> <C> <C> <C>
From 05-00-94 7.0% 885.60 -11.44% -11.53%
From 05-00-94 7.0% 885.60 -11.44% -11.53%
From 05-00-94 7.0% 885.60 -11.44% -11.53%
From 05-00-94 7.0% 885.60 -11.44% -11.53%
</TABLE>
<TABLE>
<CAPTION>
Accumulation Unit Values
------------------------------------------------------------
TCIIMTH
TCIIMTH.UV
<S> <C>
05-00-94 9.948573 i
12-99-94 9.440766 i
</TABLE>
(Unit values marked 'i' are used for from-inception calculations.)
(Day = 99 means end-of-month.)
<PAGE>
Exhibit 24(b)(15.2)
SECRETARY'S CERTIFICATE
AETNA INSURANCE COMPANY OF AMERICA
I, Maria F. McKeon, Corporate Secretary of Aetna Insurance Company of America
(the "Company") hereby certify that in accordance with Section 33-316(d) of the
Connecticut General; Statutes, the following resolutions were duly adopted by
the Board of Directors of the Company by Unanimous Written Consent dated October
20, 1994 and that such resolutions are still in full force and effect and have
not been rescinded or modified:
RESOLVED, that the Company and each of its officers and directors,
jointly and severally, are hereby authorized and directed to take such
actions as are necessary or advisable to offer for sale and sell to the
public variable annuity contracts and variable life insurance policies,
as such officers deem appropriate from time to time; and
FURTHER RESOLVED, that in connection with such offering, the officers
and directors are hereby severally authorized and directed to take such
actions as are necessary to qualify the variable annuity contracts and
variable life insurance policies for sale under applicable securities
laws, including, without limitation, the preparations, execution and
filing with the Securities and Exchange Commission (the "Commission"),
and any state securities commission, under the Securities Act of 1933
(the "1933 Act"), and any applicable state securities act, such
applications for registration, registration statements (and any pre-
effective or post-effective amendments thereto), applications for
exemptive orders (and any amendments thereto), reports forms or other
documents, and
FURTHER RESOLVED, that the officers and directors are hereby severally
authorized and directed to take such actions as are necessary to
register the Company's separate accounts as investment companies under
the Investment Company Act of 1940 (the "1940 Act"), and the interests
in the separate accounts under the 1933 and/or the 1940 Acts on such
forms as may be prescribed by the Commission; and
FURTHER RESOLVED, that the officers and directors of the Company are
hereby severally authorized to designate any Company officer under their
direction, or any attorney at law representing the Company, to sign in
their names and on their behalf, or in the name of the Company, any such
applications for registration, registration statements (and any pre-
effective and post-effective amendments thereto), applications for
exemptive orders (and any amendments thereto), reports, forms, or other
documents; and
<PAGE>
FURTHER RESOLVED, that any officer of the Company is hereby authorized
to provide any certification or notice to any third party concerning the
substance of the foregoing resolutions, and if any such party requires a
prescribed form of resolution or vote by the Board concerning these
matters, such resolution or vote shall be deemed to have been adopted
pursuant to this resolution; and
FURTHER RESOLVED, that the Corporate Secretary or any Assistant
Corporate Secretary of the Company are hereby severally authorized to
certify the adoption of all such resolutions or votes as though such
resolutions or votes were presented and adopted pursuant to these
resolutions.
IN WITNESS WHEREOF I have hereunto set my hand this 26th day of May, 1995.
/s/ Maria F. McKeon
-------------------------------
Maria F. McKeon
Corporate Secretary
