As filed with the Securities and Exchange File No. 33-59749
Commission on November 26, 1997 File No. 811-8582
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
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POST-EFFECTIVE AMENDMENT NO. 6 TO
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
and Amendment to
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
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Variable Annuity Account I of Aetna Insurance Company of America
Aetna Insurance Company of America
151 Farmington Avenue, RE4A, Hartford, Connecticut 06156
Depositor's Telephone Number, including Area Code (860) 273-4686
Julie E. Rockmore, Counsel
Aetna Insurance Company of America
151 Farmington Avenue, RE4A, Hartford, Connecticut 06156
(Name and Address of Agent for Service)
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It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[X] on November 28, 1997, pursuant to paragraph (b) of Rule 485
<PAGE>
VARIABLE ANNUITY ACCOUNT I
CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
FORM N-4
ITEM NO. PART A (PROSPECTUS) LOCATION - PROSPECTUS
1 Cover Page............................... Cover Page
2 Definitions.............................. Definitions
3 Synopsis................................. 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 and Expenses.................. 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
<PAGE>
FORM N-4 PART B (STATEMENT OF LOCATION - STATEMENT OF
ITEM NO. ADDITIONAL INFORMATION) ADDITIONAL INFORMATION
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, and as
amended Average Annual
Total Return Quotations
22 Annuity Payments.................... Annuity Payments
23 Financial Statements................ Financial Statements
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>
PARTS A AND B
The Prospectus is included in Part A of this Post-Effective Amendment No. 6. The
Statement of Additional Information is incorporated into Part B of the
Post-Effective Amendment No. 6, by reference to Post-Effective Amendment 4 to
the Registration Statement on Form N-4 (File Number 33-59749), as filed
electronically on April 16, 1997 (Accession No. 0000950146-97-000620) and by
reference to a supplement dated November 28, 1997, as filed herein.
<PAGE>
PROSPECTUS
================================================================================
The Contracts offered in connection with this Prospectus are the "Aetna
Marathon Plus" group and individual deferred variable annuity contracts
("Contracts") issued by Aetna Insurance Company of America (the "Company"). The
Contracts are available as (1) nonqualified deferred annuity contracts; (2)
Individual Retirement Annuities ("IRA") under Section 408(b) of the Internal
Revenue Code (may be subject to approval by state regulatory agencies); or (3)
qualified contracts issued in connection with certain employer sponsored
retirement plans (may be subject to approval by the Company and state
regulatory agencies). Currently, the IRA is not available as a "SIMPLE IRA" as
defined in Section 408(p) of the Internal Revenue Code. In most states, group
Contracts are offered to certain broker-dealers or banks which have agreed to
act as Distributors of the Contracts. Individuals who have established accounts
with those broker-dealers or banks are eligible to participate in the Contract.
Individual Contracts are offered only in those states where the group Contracts
are not authorized for sale (See "Purchase.")
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 or banks selected by it as Distributors. (See
"Purchase.")
The Contracts provide that Purchase Payments may be allocated to the AICA
Guaranteed Account (the "Guaranteed Account"), a credited interest option, or
to one or more of the Subaccounts of Variable Annuity Account I, a separate
account of the Company. The Subaccounts invest directly in shares of the
following Funds:
<TABLE>
<S> <C>
[bullet] Aetna Variable Fund [bullet] Fidelity VIP II Index 500 Portfolio
[bullet] Aetna Income Shares [bullet] Janus Aspen Aggressive Growth Portfolio
[bullet] Aetna Variable Encore Fund [bullet] Janus Aspen Balanced Portfolio
[bullet] Aetna Investment Advisers Fund, Inc. [bullet] Janus Aspen Flexible Income Portfolio
[bullet] Aetna Ascent Variable Portfolio [bullet] Janus Aspen Growth Portfolio
[bullet] Aetna Crossroads Variable Portfolio [bullet] Janus Aspen Worldwide Growth Portfolio
[bullet] Aetna Legacy Variable Portfolio [bullet] MFS Total Return Series
[bullet] Aetna Variable Capital Appreciation Portfolio [bullet] MFS World Governments Series
[bullet] Aetna Variable Growth Portfolio [bullet] Oppenheimer Capital Appreciation Fund
[bullet] Aetna Variable Index Plus Portfolio [bullet] Oppenheimer Global Securities Fund
[bullet] Aetna Variable Small Company Portfolio [bullet] Oppenheimer Growth & Income Fund
[bullet] Calvert Responsibly Invested Balanced Portfolio [bullet] Oppenheimer Strategic Bond Fund
[bullet] Fidelity VIP Equity-Income Portfolio [bullet] Portfolio Partners MFS Emerging Equities Portfolio
[bullet] Fidelity VIP Growth Portfolio [bullet] Portfolio Partners MFS Research Growth Portfolio
[bullet] Fidelity VIP High Income Portfolio [bullet] Portfolio Partners MFS Value Equity Portfolio
[bullet] Fidelity VIP Overseas Portfolio [bullet] Portfolio Partners Scudder International Growth Portfolio
[bullet] Fidelity VIP II Asset Manager Portfolio [bullet] Portfolio Partners T. Rowe Price Growth Equity Portfolio
[bullet] Fidelity VIP II Contrafund Portfolio
</TABLE>
Except as specifically mentioned, this Prospectus describes only investments
through the Separate Account. The Guaranteed Account is described in the
Appendix to this Prospectus, as well as in the Guaranteed Account's prospectus.
The availability of the Funds and the Guaranteed Account is subject to
applicable regulatory authorization; not all options may be available in all
jurisdictions or under all Contracts. (See "Investment Options.")
This Prospectus provides investors with the information about the Separate
Account that they should know before investing in the Contracts. Additional
information about the Separate Account is contained in a Statement of
Additional Information ("SAI") which is available at no charge. The SAI has
been filed with the Securities and Exchange Commission and is incorporated
herein by reference. The Table of Contents for the SAI is printed on page 24 of
this Prospectus. An SAI for this Prospectus and for any Fund Prospectus may be
obtained by indicating the request on your Application or by calling the number
listed under the "Inquiries" section of the Prospectus Summary.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUSES OF
THE FUNDS AND THE AICA GUARANTEED ACCOUNT. ALL PROSPECTUSES SHOULD BE READ AND
RETAINED FOR FUTURE REFERENCE.
THE CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED BY ANY BANK, NOR
ARE THEY INSURED BY THE FDIC; THEY ARE SUBJECT TO INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
THIS PROSPECTUS, THE STATEMENT OF ADDITIONAL INFORMATION AND OTHER INFORMATION
ABOUT THE SEPARATE ACCOUNT REQUIRED TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION CAN BE FOUND IN THE SEC'S WEB SITE AT http://www.sec.gov.
<PAGE>
THESE SECURITIES 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 THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION ARE DATED
NOVEMBER 28, 1997.
<PAGE>
TABLE OF CONTENTS
================================================================================
<TABLE>
<S> <C>
DEFINITIONS ................................ DEFINITIONS - 1
PROSPECTUS SUMMARY .............................. SUMMARY - 1
FEE TABLE ..................................... FEE TABLE - 1
CONDENSED FINANCIAL INFORMATION ........... AUV HISTORY - 1
THE COMPANY ............................................. 1
VARIABLE ANNUITY ACCOUNT I .............................. 1
INVESTMENT OPTIONS .................................... 1
The Funds ............................................. 1
Credited Interest Option .............................. 5
PURCHASE ................................................ 5
Contract Availability ................................. 5
Purchasing Interests in the Contract .................. 5
Purchase Payments .................................... 5
Contract Rights ....................................... 6
Designations of Beneficiary and Annuitant ............ 6
Right to Cancel ....................................... 6
CHARGES AND DEDUCTIONS ................................. 7
Daily Deductions from the Separate Account ............ 7
Mortality and Expense Risk Charge .................. 7
Administrative Charge .............................. 7
Maintenance Fee ....................................... 7
Deferred Sales Charge ................................. 7
Fund Expenses ....................................... 8
Premium and Other Taxes .............................. 8
CONTRACT VALUATION .................................... 9
Account Value ....................................... 9
Accumulation Units .................................... 9
Net Investment Factor ................................. 9
TRANSFERS ............................................. 9
Dollar Cost Averaging Program ........................ 10
Account Rebalancing Program ........................... 10
WITHDRAWALS ............................................. 10
SYSTEMATIC DISTRIBUTION OPTIONS ........................ 11
DEATH BENEFIT DURING ACCUMULATION PERIOD ............... 12
Death Benefit Amount ................................. 12
Death Benefit Payment Options ........................ 13
ANNUITY PERIOD .......................................... 14
Annuity Period Elections .............................. 14
Partial Annuitization ................................. 15
Annuity Options ....................................... 15
Annuity Payments .................................... 15
Charges Deducted During the Annuity Period ............ 16
Death Benefit Payable During the Annuity Period ...... 16
</TABLE>
<PAGE>
<TABLE>
<S> <C>
TAX STATUS ................................................ 17
Introduction .......................................... 17
Taxation of the Company ................................. 17
Tax Status of the Contract .............................. 17
Taxation of Annuity Contracts ........................... 19
Contracts Used with Certain Retirement Plans ............ 21
MISCELLANEOUS ............................................. 23
Distribution .......................................... 23
Delay or Suspension of Payments ........................ 23
Performance Reporting ................................. 23
Voting Rights .......................................... 24
Modification of the Contract ........................... 24
Transfers of Ownership; Assignment ..................... 24
Involuntary Terminations .............................. 25
Legal Matters and Proceedings ........................... 25
CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION ...... 26
APPENDIX--AICA GUARANTEED ACCOUNT ........................ 27
</TABLE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. THE COMPANY DOES NOT AUTHORIZE ANY
PERSON TO GIVE INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH
THE OFFERING CONTAINED IN THIS PROSPECTUS EXCEPT AS OTHERWISE CONTAINED HEREIN.
<PAGE>
DEFINITIONS
================================================================================
The following terms are defined as they are used in this Prospectus:
Account: A record that identifies contract values accumulated on each
Certificate Holder's behalf during the Accumulation Period.
Account Value: The total dollar value of amounts held in an Account as of each
Valuation Date during the Accumulation Period.
Account Year: A period of twelve months measured from the date on which an
Account is established (the effective date) or from an anniversary of such
effective date.
Accumulation Period: The period during which Purchase Payment(s) credited to an
Account are invested to fund future annuity payments.
Accumulation Unit: A measure of the value of each Subaccount before annuity
payments begin.
Adjusted Account Value: The Account Value, plus or minus the aggregate market
value adjustment for amounts allocated to the Guaranteed Account.
Annuitant: The person on whose life or life expectancy the annuity payments are
based.
Annuity: A series of payments for life, a definite period or a combination of
the two.
Annuity Date: The date on which annuity payments begin.
Annuity Period: The period during which annuity payments are made.
Annuity Unit: A measure of the value of each Subaccount selected during the
Annuity Period.
Application: The form or collection of information required by the Company to
purchase an interest in a group contract or an individual contract.
Beneficiary(ies): The person or persons who are entitled to receive any death
benefit proceeds. Under Nonqualified Contracts, Individual Retirement Annuities
and Section 403(b) Contracts, Beneficiary refers to the beneficiary named under
the Contract. Under Qualified Contracts sold in conjunction with 401(a) or 457
Plans, Beneficiary refers to the beneficiary under the plan.
Certificate: The document issued to a Certificate Holder for an Account
established under a group contract.
Certificate Holder (You): A person or entity who purchases an individual
Contract or acquires an interest under a group Contract.
Claim Date: The date when proof of death and the Beneficiary's claim are
received in good order at the Company's Home Office.
Company (We, Us): Aetna Insurance Company of America.
Contract: The group and individual deferred, variable annuity contracts offered
by this Prospectus.
Distributor(s): The registered broker-dealer(s), or banks that may be acting as
broker-dealers without separate registration under the Securities Exchange Act
of 1934, which have entered into selling agreements with the Company to offer
and sell the Contracts. The Company may also serve as a Distributor.
Fund(s): An open-end registered management investment company whose shares are
purchased by the Separate Account to fund the benefits provided by the
Contract.
Group Contract Holder: The entity to which a group Contract is issued.
- --------------------------------------------------------------------------------
DEFINITIONS - 1
<PAGE>
Home Office: The Company's principal executive offices located at 151
Farmington Avenue, Hartford, Connecticut 06156.
Individual Contract Holder: A person or entity who has purchased an individual
variable annuity contract (also referred to as a "Certificate Holder").
Individual Retirement Annuity: An individual or group variable deferred annuity
intended to qualify under Code Section 408(b).
Nonqualified Contract: A contract established 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(s): The gross payment(s) made to the Company under an Account.
Qualified Contracts: Contracts available for use with plans entitled to special
federal income tax treatment under Code Sections 401(a), 403(b), 408(b) or 457.
Registered Representative: The individual who is registered with a
broker-dealer acting as Distributor to offer and sell securities, or who is an
employee of a bank acting as Distributor that is exempt from broker-dealer
registration under the Securities Exchange Act of 1934. Registered
Representatives must also be licensed as insurance agents to sell variable
annuity contracts.
Separate Account: Variable Annuity Account I, a separate account established
for the purpose of funding variable annuity contracts issued by the Company.
Subaccount(s): The portion of the assets of the Separate Account that is
allocated to a particular Fund. Each Subaccount invests in the shares of only
one corresponding Fund.
Surrender Value: The amount payable upon the withdrawal of all or any portion
of an Account Value.
Underwriter: The registered broker-dealer which contracts with other registered
broker-dealers, or with banks exempt from broker-dealer registration, to offer
and sell the Contracts. Aetna Life Insurance and Annuity Company will serve as
Underwriter.
Valuation Date: The date and time at which the Accumulation Unit Value and
Annuity Unit Value of a Subaccount is calculated. Currently, this calculation
occurs after the close of business of the New York Stock Exchange on any normal
business day, Monday through Friday, that the New York Stock Exchange is open.
- --------------------------------------------------------------------------------
DEFINITIONS - 2
<PAGE>
PROSPECTUS SUMMARY
================================================================================
CONTRACTS OFFERED
The Contracts offered in connection with this Prospectus are group and
individual deferred variable annuity contracts issued by Aetna Insurance
Company of America (the "Company"). The purpose of the Contract is to
accumulate values and to provide benefits upon retirement. The Contracts are
currently available for (1) individual nonqualified purchases (we reserve the
right to limit the ownership of nonqualified contracts to natural persons); (2)
Individual Retirement Annuities ("IRAs"), other than "SIMPLE IRAs" as defined
in Section 408(p) of the Internal Revenue Code ("Code") (may be subject to
approval by state regulatory agencies); and (3) purchases made in conjunction
with employer sponsored retirement plans under Sections 401(a), 403(b) or 457
of the Code (may be subject to approval by the Company and by state regulatory
agencies).
In most states, group Contracts are offered to certain broker-dealers or
banks which have agreed to act as Distributors of the Contracts. Individuals
who have established accounts with those broker-dealers or banks are eligible
to participate in the Contract. Individual Contracts are offered in those
states where the group Contracts are not authorized for sale. Joint Certificate
Holders are allowed only on Nonqualified Contracts. A joint Certificate Holder
must be the spouse of the other joint Certificate Holder. In Pennsylvania, the
joint Certificate Holders do not need to be spouses. References to "Certificate
Holders" in this Prospectus mean both of the Certificate Holders on joint
Accounts.
CONTRACT PURCHASE
You may purchase an interest in the Contract by completing an Application
and submitting it to the Company. Purchase Payments can be applied to the
Contract either through a lump-sum payment or through ongoing contributions.
(See "Purchase.")
FREE LOOK PERIOD
You may cancel the Contract or Certificate within 10 days after you
receive it (or longer if required by state law) by returning it to the Company
along with a written notice of cancellation. Unless state law requires
otherwise, the amount you will receive upon cancellation will reflect the
investment performance of the Subaccounts into which your Purchase Payments
were deposited. In some cases this may be more or less than the amount of your
Purchase Payments. Under a Contract issued as an Individual Retirement Annuity,
you will receive a refund of your Purchase Payment. (See "Purchase--Right to
Cancel.")
INVESTMENT OPTIONS
The Company has established Variable Annuity Account I, a registered unit
investment trust, for the purpose of funding the variable portion of the
Contracts. The Separate Account is divided into Subaccounts which invest
directly in shares of the Funds described herein. The Contract allows
investment in the Subaccounts, as well as in the Guaranteed Account described
below subject to the limitations described in "Investment Options," see page 1.
For a complete list of the Funds available under the Contracts, and a
description of the investment objectives of each of the Funds and their
investment advisers, see "Investment Options--The Funds" in this Prospectus, as
well as the prospectuses for each of the Funds.
The Guaranteed Account is the credited interest option available under the
Contract which allows you to earn a fixed rate of interest, if held for the
guaranteed term. (See the Appendix to this Prospectus and the prospectus for
the Guaranteed Account.)
CHARGES AND DEDUCTIONS
Certain charges are associated with these Contracts. These charges include
daily deductions from the Separate Account (the mortality and expense risk
charge and an administrative charge), as well as any applicable maintenance
fee, transfer fees and premium and other taxes. The Funds also incur certain
fees and expenses which are deducted directly from the Funds. A deferred sales
charge may apply upon a full or partial withdrawal of the Account Value. (See
the Fee Table and "Charges and Deductions.")
- --------------------------------------------------------------------------------
SUMMARY - 1
<PAGE>
TRANSFERS
Prior to the Annuity Date, and subject to certain limitations, you can
transfer Account Values among the Subaccounts and the Guaranteed Account. If
approved by your state, during the Annuity Period, if you have elected variable
payments you can make transfers among the Subaccounts available during the
Annuity Period. Currently, during the Accumulation Period, transfers are
without charge. However, the Company reserves the right to charge up to $10 for
each additional transfer if more than 12 transfers are made in a calendar year.
Any transfer charge will be applied so that the amount being transferred will
be reduced. Transfers can be requested in writing or by telephone in accordance
with the Company's transfer procedures. If approved by your state, during the
Annuity Period, you can currently make up to four transfers each calendar year.
There is no charge for these transfers. (Transfers from the Guaranteed Account
may be restricted and subject to a market value adjustment. See the Appendix.)
The Company also offers a Dollar Cost Averaging Program and an Account
Rebalancing Program. The Dollar Cost Averaging Program permits the automatic
transfer of amounts from any of the Subaccounts and an available Guaranteed
Account term to any of the other Subaccounts on a monthly or quarterly basis.
The Account Rebalancing Program allows you to request that each year, or at
other more frequent intervals as We allow, We automatically reallocate your
Account value to specified percentages among the Subaccounts in which you
invest. (See "Transfers.")
WITHDRAWALS
All or a part of the Account Value may be withdrawn prior to the Annuity
Date by properly completing a disbursement form and sending it to the Company.
Certain charges may be assessed upon withdrawal. Amounts withdrawn from the
Guaranteed Account may be subject to a market value adjustment. (See the
Appendix.) The taxable portion of the withdrawal may also be subject to income
tax and a federal tax penalty. (See "Withdrawals.")
The Contract also offers certain Systematic Distribution Options during
the Accumulation Period subject to certain criteria. Some Systematic
Distribution Options are not available in all states and may not be suitable in
every situation. (See "Systematic Distribution Options.")
GUARANTEED DEATH BENEFIT
These Contracts contain a guaranteed death benefit feature. Upon the death
of the Annuitant, the Account Value may be increased under certain
circumstances. (See "Death Benefit During Accumulation Period.")
After Annuity Payments have commenced, a death benefit may be payable to
the Beneficiary depending upon the terms of the Contract and the Annuity Option
selected. (See "Death Benefit Payable During the Annuity Period.")
THE ANNUITY PERIOD
On the Annuity Date, you may elect to begin receiving Annuity Payments.
Annuity Payments can be made on either a fixed, variable or combination fixed
and variable basis. If a variable payout is selected, the payments will
continue to vary with the investment performance of the Subaccount(s) selected.
The Company reserves the right to limit the number of Subaccounts that may be
available during the Annuity Period. (See "Annuity Period.")
TAXES
Earnings are not generally taxed until you or your Beneficiary(ies)
actually receive a distribution from the Contract. A 10% federal tax penalty
may be imposed on certain withdrawals. (See "Tax Status.")
INQUIRIES
Questions, inquiries or requests for additional information can be
directed to your agent or local representative, or you may contact the Company
as follows:
[bullet] Write to: Aetna Insurance Company of America
151 Farmington Avenue
Hartford, Connecticut 06156-5996
Attention: Customer Service
[bullet] Call Customer Service: 1-800-531-4547 (for automated transfers
or changes in the allocation of Account
Values, call: 1-800-262-3862)
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SUMMARY - 2
<PAGE>
FEE TABLE
================================================================================
This Fee Table describes the various charges and expenses associated with the
Contract. No sales charge is paid upon purchase of the Contract. All costs that
are borne directly or indirectly under the Subaccounts and Funds are shown
below. Some expenses may vary as explained under "Charges and Deductions." The
charges and expenses shown below do not include premium taxes that may be
applicable. For more information regarding expenses paid out of assets of a
particular Fund, see the Fund's prospectus.
CONTRACT HOLDER TRANSACTION EXPENSES
Deferred Sales Charge for withdrawals under each Contract (as a percentage
of each Purchase Payment withdrawn):
<TABLE>
<CAPTION>
----------------------------------------------------
Years from Receipt of Deferred Sales
Purchase Payment Charge Deduction
--------------------- -----------------
<S> <C>
Less than 2 7%
2 or more but less than 4 6%
4 or more but less than 5 5%
5 or more but less than 6 4%
6 or more but less than 7 3%
7 or more 0%
----------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Annual Maintenance Fee (1) ................................. $ 30.00
Transfer Charge (2) .......................................... $ 0.00
SEPARATE ACCOUNT ANNUAL EXPENSES
(Daily deductions, equal to the percentage shown on an annual basis, made from
amounts allocated to the variable options under each Contract)
DURING THE ACCUMULATION PERIOD:
Mortality and Expense Risk Charge ........................... 1.25%(3)
Administrative Charge ....................................... 0.15%
--------
Total Subaccount Annual Expenses ........................... 1.40%
========
DURING THE ANNUITY PERIOD:
Mortality and Expense Risk Charge ........................... 1.25%
Administrative Charge ....................................... 0.00%(4)
------
Total Subaccount Annual Expenses ........................ 1.25%
=======
</TABLE>
(1) The maintenance fee, if applicable, will generally be deducted from each
Account annually and if the full Account Value is withdrawn. The
maintenance fee is waived when the Account Value is $50,000 or more on
the date the maintenance fee is due. The amount shown is the maximum
maintenance fee that can be deducted under the Contract.
(2) During the Accumulation Period We currently allow 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.
(3) Under certain Contracts the mortality and expense risk charge during the
Accumulation Period may be reduced. See "Charges and Deductions."
(4) We currently do not impose an Administrative Charge during the Annuity
Period. However, we reserve the right to deduct a daily charge of not
more than 0.25% per year from the Subaccounts.
- --------------------------------------------------------------------------------
FEE TABLE - 1
<PAGE>
ANNUAL EXPENSES OF THE FUNDS
The following table illustrates the advisory fees and other expenses applicable
to the Funds. Except as noted, the following figures are a percentage of
average net assets and, except where otherwise indicated, are based on figures
for the year ended December 31, 1996. A Fund's "Other Expenses" include
operating costs of the Fund. These expenses are reflected in the Fund's net
asset value and are not deducted from the Account Value.
<TABLE>
<CAPTION>
Investment
Advisory Fees(1) Other Expenses
(after expense (after expense Total Annual
reimbursement) reimbursement) Fund Expenses
---------------- -------------- -------------
<S> <C> <C> <C>
Aetna Variable Fund(2) 0.50% 0.06% 0.56%
Aetna Income Shares(2) 0.40% 0.08% 0.48%
Aetna Variable Encore Fund(2) 0.25% 0.10% 0.35%
Aetna Investment Advisers Fund, Inc.(2) 0.50% 0.08% 0.58%
Aetna Ascent Variable Portfolio(2) 0.60% 0.15% 0.75%
Aetna Crossroads Variable Portfolio(2) 0.60% 0.15% 0.75%
Aetna Legacy Variable Portfolio(2) 0.60% 0.15% 0.75%
Aetna Variable Capital Appreciation Portfolio(2) 0.60% 0.15% 0.75%
Aetna Variable Growth Portfolio(2) 0.60% 0.15% 0.75%
Aetna Variable Index Plus Portfolio(2) 0.35% 0.15% 0.50%
Aetna Variable Small Company Portfolio(2) 0.75% 0.15% 0.90%
Calvert Responsibly Invested Balanced Portfolio(3) 0.71% 0.13% 0.84%
Fidelity VIP Equity-Income Portfolio(4) 0.51% 0.07% 0.58%
Fidelity VIP Growth Portfolio(4) 0.61% 0.08% 0.69%
Fidelity VIP High Income Portfolio 0.59% 0.12% 0.71%
Fidelity VIP Overseas Portfolio(4) 0.76% 0.17% 0.93%
Fidelity VIP II Asset Manager Portfolio(4) 0.64% 0.10% 0.74%
Fidelity VIP II Contrafund Portfolio(4) 0.61% 0.13% 0.74%
Fidelity VIP II Index 500 Portfolio(5) 0.13% 0.15% 0.28%
Janus Aspen Aggressive Growth Portfolio(6) 0.72% 0.04% 0.76%
Janus Aspen Balanced Portfolio(6) 0.79% 0.15% 0.94%
Janus Aspen Flexible Income Portfolio(6) 0.65% 0.19% 0.84%
Janus Aspen Growth Portfolio(6) 0.65% 0.04% 0.69%
Janus Aspen Worldwide Growth Portfolio(6) 0.66% 0.14% 0.80%
MFS Total Return Series(7) 0.75% 0.25% 1.00%
MFS World Governments Series(7) 0.75% 0.25% 1.00%
Oppenheimer Capital Appreciation Fund 0.72% 0.03% 0.75%
Oppenheimer Global Securities Fund 0.73% 0.08% 0.81%
Oppenheimer Growth & Income Fund 0.75% 0.25% 1.00%
Oppenheimer Strategic Bond Fund 0.75% 0.10% 0.85%
Portfolio Partners MFS Emerging Equities Portfolio 0.70%(8) 0.13% 0.83%(9)
Portfolio Partners MFS Research Growth Portfolio 0.70%(8) 0.15% 0.85%(9)
Portfolio Partners MFS Value Equity Portfolio 0.65% 0.25% 0.90%(9)
Portfolio Partners Scudder International Growth Portfolio 0.80% 0.20% 1.00%(9)
Portfolio Partners T. Rowe Price Growth Equity Portfolio 0.60% 0.15% 0.75%(9)
</TABLE>
- -----------------
(1) Certain of the unaffiliated Fund advisers reimburse the Company for
administrative costs incurred in connection with administering the Funds as
variable funding options under the Contract. These reimbursements are paid
out of the investment advisory fees and are not charged to investors.
(2) The Company provides administrative services to the Fund and assumes the
Fund's ordinary recurring direct costs under an Administrative Services
Agreement. The new Administrative Services Agreement became effective on May
1, 1996 for Aetna Variable Fund, Aetna Income Shares, Aetna Variable Encore
Fund, Aetna Investment Advisers Fund, Inc., Aetna Ascent Variable Portfolio,
Aetna Crossroads Variable Portfolio, and Aetna Legacy Variable Portfolio.
Therefore, for these Funds the "Other Expenses" shown are not based on
actual figures for the year ended December 31, 1996, but reflect the fee
payable under that Agreement. The Administrative Services Agreement was in
effect for Aetna Variable Capital Appreciation Portfolio, Aetna Variable
Growth Portfolio, Aetna Variable Index Plus Portfolio and Aetna Variable
Small Company Portfolio since their inception.
Effective August 1, 1996, Investment Advisory Fees were increased for Aetna
Variable Fund, Aetna Income Shares, Aetna Investment Advisers Fund, Inc.,
Aetna Ascent Variable Portfolio, Aetna Crossroads Variable Portfolio, and
Aetna Legacy
- --------------------------------------------------------------------------------
FEE TABLE - 2
<PAGE>
Variable Portfolio. The Advisory Fees shown above are not based on actual
figures for the year ended December 31, 1996, but reflect the increased
Investment Advisory Fees.
(3) The figures above are based on expenses for fiscal year 1996, and have been
restated to reflect an increase in transfer agency expenses of 0.03%
expected to be incurred in 1997. "Investment Advisory Fees" include a
performance adjustment, which could cause the fee to be as high as 0.85% or
as low as 0.55%, depending on performance. "Other Expenses" reflect an
indirect fee of 0.03% (relating to an expense offset arrangement with the
Portfolio's custodian). Net fund operating expenses after reductions for
fees paid indirectly (again, restated) would be 0.81%.
(4) A portion of the brokerage commissions that certain funds pay was used to
reduce expenses. In addition, certain funds have entered into arrangements
with their custodian and transfer agent whereby interest earned on
uninvested cash balances was used to reduce custodian and transfer agent
expenses. Including these reductions, the total operating expenses would
have been 0.56% for Equity-Income Portfolio, 0.67% for Growth Portfolio,
0.92% for Overseas Portfolio, 0.73% for Asset Manager Portfolio; and 0.71%
for Contrafund Portfolio.
(5) The Fund's investment adviser agreed to reimburse a portion of Index 500
Portfolio's expenses during the period. Without this reimbursement, the
fund's management fee, other expenses and total expenses would have been
0.28%, 0.15% and 0.43%, respectively, for Index 500 Portfolio.
(6) The fees and expenses shown above are based on gross expenses of the Shares
before expense offset arrangements for the fiscal year ended December 31,
1996. The information for each Portfolio other than the Flexible Income
Portfolio is net of fee waivers or reductions from Janus Capital. Fee
reductions for the Aggressive Growth, Balanced, Growth, and Worldwide Growth
Portfolios reduce the management fee to the level of the corresponding Janus
retail fund. Other waivers, if applicable, are first applied against the
management fee and then against other expenses. Without such waivers or
reductions, the Management Fee, Other Expenses and Total Fund Annual
Expenses would have been 0.79%, 0.04% and 0.83% for Aggressive Growth
Portfolio; 0.92%, 0.15% and 1.07% for Balanced Portfolio; 0.79%, 0.04% and
0.83% for Growth Portfolio; and 0.77%, 0.14% and 0.91% for Worldwide Growth
Portfolio, respectively. Janus Capital may modify or terminate the waivers
or reductions at any time upon at least 90 days' notice to the Portfolio's
Board of Trustees.
(7) The adviser has agreed to bear expenses for each Series, subject to
reimbursement by each Series, such that each Series' "Other Expenses" shall
not exceed 0.25% of the average daily net assets of the Series during the
current fiscal year. Otherwise, "Other Expenses" for the MFS Total Return
Series and MFS World Governments Series would be 1.35% and 1.28%,
respectively, and "Total Fund Annual Expenses" would be 2.10% and 2.03%,
respectively, for these Series. Each Series has an expense offset
arrangement which reduces the Series' custodian fee based upon the amount of
cash maintained by the Series with its custodian and dividend disbursing
agent, and may enter into other such arrangements and directed brokerage
arrangements (which would also have the effect of reducing the Series'
expenses). Any such fee reductions are not reflected under "Other Expenses."
(8) The advisory fee is .70% of the first $500 million in assets and .65% on the
excess.
(9) Each Portfolio's aggregate expenses are limited to the advisory and
administrative fees disclosed above through April 30, 1999.
- --------------------------------------------------------------------------------
FEE TABLE - 3
<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.
The following Examples illustrate the expenses that would have been paid
assuming a $1,000 investment in the Contract and a 5% return on assets. For the
purposes of these Examples, the maximum maintenance fee of $30.00 that can be
deducted under the Contract has been converted to a percentage of assets equal
to 0.00%.
<TABLE>
<CAPTION>
EXAMPLE A EXAMPLE B
--------------------------------------- --------------------------------------
If you withdraw the entire Account If you do not withdraw the Account
Value at the end of the periods Value, or if you annuitize at the end
shown, you would pay the following of the periods shown, you would pay
expenses, including any applicable the following expenses (no deferred
deferred sales charge: sales charge is reflected):*
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
-------- --------- --------- ---------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Variable Fund $92 $115 $141 $229 $20 $62 $106 $229
Aetna Income Shares $91 $113 $137 $220 $19 $59 $102 $220
Aetna Variable Encore Fund $90 $108 $130 $206 $18 $55 $ 95 $206
Aetna Investment Advisers Fund Inc. $92 $116 $142 $231 $20 $62 $107 $231
Aetna Ascent Variable Portfolio $94 $121 $151 $248 $22 $67 $115 $248
Aetna Crossroads Variable Portfolio $94 $121 $151 $248 $22 $67 $115 $248
Aetna Legacy Variable Portfolio $94 $121 $151 $248 $22 $67 $115 $248
Aetna Variable Capital Appreciation Portfolio $94 $121 $151 $248 $22 $67 $115 $248
Aetna Variable Growth Portfolio $94 $121 $151 $248 $22 $67 $115 $248
Aetna Variable Index Plus Portfolio $91 $113 $138 $222 $19 $60 $103 $222
Aetna Variable Small Company Portfolio $94 $125 $158 $264 $23 $72 $123 $264
Calvert Responsibly Invested Balanced Portfolio $95 $124 $155 $257 $23 $70 $120 $257
Fidelity VIP Equity-Income Portfolio $92 $116 $142 $231 $20 $62 $107 $231
Fidelity VIP Growth Portfolio $93 $119 $148 $242 $21 $65 $112 $242
Fidelity VIP High Income Portfolio $93 $120 $149 $244 $21 $66 $113 $244
Fidelity VIP Overseas Portfolio $95 $126 $160 $267 $24 $73 $125 $267
Fidelity VIP II Asset Manager Portfolio $94 $120 $150 $247 $22 $67 $115 $247
Fidelity VIP II Contrafund Portfolio $94 $120 $150 $247 $22 $67 $115 $247
Fidelity VIP II Index 500 Portfolio $89 $106 $127 $199 $17 $53 $ 91 $199
Janus Aspen Aggressive Growth Portfolio $94 $121 $151 $249 $22 $68 $116 $249
Janus Aspen Balanced Portfolio $96 $127 $160 $268 $24 $73 $125 $268
Janus Aspen Flexible Income Portfolio $95 $124 $155 $257 $23 $70 $120 $257
Janus Aspen Growth Portfolio $93 $119 $148 $242 $21 $65 $112 $242
Janus Aspen Short-Term Bond Portfolio $93 $118 $146 $239 $21 $65 $111 $239
Janus Aspen Worldwide Growth Portfolio $94 $122 $153 $253 $22 $69 $118 $253
MFS Total Return Series $96 $129 $164 $276 $25 $75 $129 $276
MFS World Governments Series $96 $129 $164 $276 $25 $75 $129 $276
Oppenheimer Capital Appreciation Fund $94 $121 $151 $248 $22 $67 $115 $248
Oppenheimer Global Securities Fund $94 $123 $154 $254 $22 $69 $118 $254
Oppenheimer Growth & Income Fund $96 $128 $163 $274 $24 $75 $128 $274
Oppenheimer Strategic Bond Fund $95 $124 $156 $258 $23 $70 $120 $258
Portfolio Partners MFS Emerging Equities
Portfolio $95 $123 $155 $256 $23 $70 $119 $256
Portfolio Partners MFS Research Growth Portfolio $95 $124 $156 $258 $23 $70 $120 $258
Portfolio Partners MFS Value Equity Portfolio $95 $125 $158 $264 $23 $72 $123 $264
Portfolio Partners Scudder International Growth
Portfolio $96 $128 $163 $274 $24 $75 $128 $274
Portfolio Partners T. Rowe Price Growth Equity
Portfolio $94 $121 $151 $248 $22 $67 $115 $248
</TABLE>
- ------------------
* This Example would not apply if a nonlifetime variable annuity option is
selected, and a lump sum settlement is requested within three years after
annuity payments start, since 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. (Refer to Example A.)
- --------------------------------------------------------------------------------
FEE TABLE - 4
<PAGE>
CONDENSED FINANCIAL INFORMATION
(Selected data for accumulation units outstanding throughout each period)
================================================================================
The condensed financial information presented below for the two years ended
December 31, 1996 is derived from the financial statements of the Separate
Account, which financial statements have been audited by KPMG Peat Marwick LLP,
independent auditors. It reflects investment options available under the
Contracts as of December 31, 1996; not all investment options shown here are
currently available. The financial statements as of and for the year ended
December 31, 1996 and the independent auditors' report thereon, are included in
the Statement of Additional Information.
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
AETNA VARIABLE FUND
Value at beginning of period $ 10.101
Value at end of period $ 12.769
Increase (decrease) in value of accumulation unit(1) 26.41%(2)
Number of accumulation units outstanding at end of period 299,882
AETNA INCOME SHARES
Value at beginning of period $ 10.260
Value at end of period $ 10.489
Increase (decrease) in value of accumulation unit(1) 2.23%(2)
Number of accumulation units outstanding at end of period 95,644
AETNA VARIABLE ENCORE FUND
Value at beginning of period $ 10.151
Value at end of period $ 10.481
Increase (decrease) in value of accumulation unit(1) 3.25%(3)
Number of accumulation units outstanding at end of period 799,456
AETNA INVESTMENT ADVISERS FUND, INC.
Value at beginning of period $ 10.582
Value at end of period $ 11.781
Increase (decrease) in value of accumulation unit(1) 11.33%(3)
Number of accumulation units outstanding at end of period 59,639
AETNA ASCENT VARIABLE PORTFOLIO
Value at beginning of period $ 11.003
Value at end of period $ 12.674
Increase (decrease) in value of accumulation unit(1) 15.19%(4)
Number of accumulation units outstanding at end of period 91,927
AETNA CROSSROADS VARIABLE PORTFOLIO
Value at beginning of period $ 10.932
Value at end of period $ 12.123
Increase (decrease) in value of accumulation unit(1) 10.89%(4)
Number of accumulation units outstanding at end of period 6,330
AETNA LEGACY VARIABLE PORTFOLIO
Value at beginning of period $ 10.601
Value at end of period $ 11.613
Increase (decrease) in value of accumulation unit(1) 9.55%(5)
Number of accumulation units outstanding at end of period 8,642
AETNA VARIABLE INDEX PLUS PORTFOLIO
Value at beginning of period $ 10.000(6)
Value at end of period $ 10.919
Increase (decrease) in value of accumulation units(1) 9.19%(6)
Number of accumulation units outstanding at end of period 2,960
ALGER AMERICAN BALANCED PORTFOLIO
Value at beginning of period $ 10.393
Value at end of period $ 10.713
Increase (decrease) in value of accumulation unit(1) 3.08%(7)
Number of accumulation units outstanding at end of period 47,401
ALGER AMERICAN GROWTH PORTFOLIO
Value at beginning of period $ 9.790 $ 10.000(2)
Value at end of period $ 10.940 $ 9.790
Increase (decrease) in value of accumulation unit(1) 11.75% (2.10)%
Number of accumulation units outstanding at end of period 590,911 3,750
ALGER AMERICAN INCOME AND GROWTH PORTFOLIO
Value at beginning of period $ 10.048
Value at end of period $ 11.333
Increase (decrease) in value of accumulation unit(1) 12.79%(8)
Number of accumulation units outstanding at end of period 57,114
</TABLE>
- --------------------------------------------------------------------------------
AUV HISTORY - 1
<PAGE>
CONDENSED FINANCIAL INFORMATION (continued)
================================================================================
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO
Value at beginning of period $ 10.349
Value at end of period $ 11.188
Increase (decrease) in value of accumulation unit(1) 8.11%(7)
Number of accumulation units outstanding at end of period 179,879
ALGER AMERICAN MIDCAP GROWTH PORTFOLIO
Value at beginning of period $ 10.283
Value at end of period $ 10.667
Increase (decrease) in value of accumulation unit(1) 3.73%(8)
Number of accumulation units outstanding at end of period 384,586
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
Value at beginning of period $ 9.541 $ 10.000(2)
Value at end of period $ 9.800 $ 9.541
Increase (decrease) in value of accumulation unit(1) 2.72% ( 4.59)%
Number of accumulation units outstanding at end of period 714,816 3,750
AMERICAN CENTURY VP BALANCED (FORMERLY "TCI BALANCED")
Value at beginning of period $ 10.239
Value at end of period $ 11.284
Increase (decrease) in value of accumulation unit(1) 10.21%(5)
Number of accumulation units outstanding at end of period 33,096
AMERICAN CENTURY VP CAPITAL APPRECIATION (FORMERLY "TCI GROWTH")
Value at beginning of period $ 9.592
Value at end of period $ 9.183
Increase (decrease) in value of accumulation unit(1) (4.26)%(8)
Number of accumulation units outstanding at end of period 50,110
AMERICAN CENTURY VP INTERNATIONAL (FORMERLY "TCI INTERNATIONAL")
Value at beginning of period $ 10.399
Value at end of period $ 11.574
Increase (decrease) in value of accumulation unit(1) 11.30%(8)
Number of accumulation units outstanding at end of period 71,305
FEDERATED AMERICAN LEADERS FUND II
Value at beginning of period $ 11.378 $ 10.000(2)
Value at end of period $ 13.639 $ 11.378
Increase (decrease) in value of accumulation unit(1) 19.87% 13.78%
Number of accumulation units outstanding at end of period 4,255,333 1,444,344
FEDERATED FUND FOR U.S. GOVERNMENT SECURITIES II
Value at beginning of period $ 10.521 $ 10.000(4)
Value at end of period $ 10.809 $ 10.521
Increase (decrease) in value of accumulation unit(1) 2.74% 5.21%
Number of accumulation units outstanding at end of period 227,252 150,860
FEDERATED HIGH INCOME BOND FUND II
Value at beginning of period $ 10.576 $ 10.000(4)
Value at end of period $ 11.920 $ 10.576
Increase (decrease) in value of accumulation unit(1) 12.71% 5.76%
Number of accumulation units outstanding at end of period 972,454 302,293
FEDERATED UTILITY FUND II
Value at beginning of period $ 11.238 $ 10.000(5)
Value at end of period $ 12.361 $ 11.238
Increase (decrease) in value of accumulation unit(1) 9.99% 12.38%
Number of accumulation units outstanding at end of period 1,078,803 451,294
FIDELITY VIP EQUITY-INCOME PORTFOLIO
Value at beginning of period $ 10.301
Value at end of period $ 11.855
Increase (decrease) in value of accumulation unit(1) 15.09%(2)
Number of accumulation units outstanding at end of period 1,000,050
FIDELITY VIP GROWTH PORTFOLIO
Value at beginning of period $ 9.005
Value at end of period $ 10.940
Increase (decrease) in value of accumulation unit(1) 20.82%(2)
Number of accumulation units outstanding at end of period 870,922
</TABLE>
- --------------------------------------------------------------------------------
AUV HISTORY - 2
<PAGE>
CONDENSED FINANCIAL INFORMATION (continued)
================================================================================
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
FIDELITY VIP HIGH INCOME PORTFOLIO
Value at beginning of period $ 10.493
Value at end of period $ 11.410
Increase (decrease) in value of accumulation unit(1) 8.74%(8)
Number of accumulation units outstanding at end of period 239,917
FIDELITY VIP OVERSEAS PORTFOLIO
Value at beginning of period $ 10.304
Value at end of period $ 11.447
Increase (decrease) in value of accumulation unit(1) 11.09%(8)
Number of accumulation units outstanding at end of period 115,487
FIDELITY VIP II ASSET MANAGER PORTFOLIO
Value at beginning of period $ 10.539
Value at end of period $ 11.674
Increase (decrease) in value of accumulation unit(1) 10.77%(7)
Number of accumulation units outstanding at end of period 104,229
FIDELITY VIP II CONTRAFUND PORTFOLIO
Value at beginning of period $ 10.273
Value at end of period $ 12.093
Increase (decrease) in value of accumulation unit(1) 17.72%(8)
Number of accumulation units outstanding at end of period 540,936
FIDELITY VIP II INDEX 500 PORTFOLIO
Value at beginning of period $ 10.828
Value at end of period $ 12.722
Increase (decrease) in value of accumulation unit(1) 17.49%(8)
Number of accumulation units outstanding at end of period 384,282
FIDELITY VIP II INVESTMENT GRADE BOND PORTFOLIO
Value at beginning of period $ 10.021
Value at end of period 10.455
Increase (decrease) in value of accumulation unit(1) 4.33%(8)
Number of accumulation units outstanding at end of period 42,912
JANUS ASPEN AGGRESSIVE GROWTH
Value at beginning of period $ 10.988
Value at end of period $ 11.376
Increase (decrease) in value of accumulation unit(1) 3.53%(8)
Number of accumulation units outstanding at end of period 242,113
JANUS ASPEN BALANCED PORTFOLIO
Value at beginning of period $ 10.836
Value at end of period $ 12.038
Increase (decrease) in value of accumulation unit(1) 11.09%(8)
Number of accumulation units outstanding at end of period 165,079
JANUS ASPEN FLEXIBLE INCOME PORTFOLIO
Value at beginning of period $ 10.173
Value at end of period $ 11.136
Increase (decrease) in value of accumulation unit(1) 9.47%(7)
Number of accumulation units outstanding at end of period 35,326
JANUS ASPEN GROWTH PORTFOLIO
Value at beginning of period $ 11.002
Value at end of period $ 12.171
Increase (decrease) in value of accumulation unit(1) 10.63%(8)
Number of accumulation units outstanding at end of period 255,831
JANUS ASPEN SHORT-TERM BOND PORTFOLIO
Value at beginning of period $ 10.096
Value at end of period $ 10.417
Increase (decrease) in value of accumulation unit(1) 3.18%(8)
Number of accumulation units outstanding at end of period 30,148
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO
Value at beginning of period $ 10.536
Value at end of period $ 13.393
Increase (decrease) in value of accumulation unit(1) 27.12%(2)
Number of accumulation units outstanding at end of period 1,030,570
</TABLE>
- --------------------------------------------------------------------------------
AUV HISTORY - 3
<PAGE>
CONDENSED FINANCIAL INFORMATION (continued)
================================================================================
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
LEXINGTON EMERGING MARKETS FUND, INC.
Value at beginning of period $ 9.748 $ 10.000(2)
Value at end of period $ 10.328 $ 9.748
Increase (decrease) in value of accumulation unit(1) 5.95% (2.52)%
Number of accumulation units outstanding at end of period 74,157 2,550
LEXINGTON NATURAL RESOURCES TRUST
Value at beginning of period $ 11.444
Value at end of period $ 13.194
Increase (decrease) in value of accumulation unit(1) 15.29(7)
Number of accumulation units outstanding at end of period 100,792
MFS EMERGING GROWTH SERIES
Value at beginning of period $ 10.000(9)
Value at end of period $ 10.074
Increase (decrease) in value of accumulation units(1) 0.74(9)
Number of accumulation units outstanding at end of period 418,523
MFS RESEARCH SERIES
Value at beginning of period $ 10.000(9)
Value at end of period $ 10.970
Increase (decrease) in value of accumulation units(1) 9.70(9)
Number of accumulation units outstanding at end of period 226,923
MFS TOTAL RETURN SERIES
Value at beginning of period $ 10.000(9)
Value at end of period $ 10.894
Increase (decrease) in value of accumulation units(1) 8.94(9)
Number of accumulation units outstanding at end of period 108,482
MFS VALUE SERIES
Value at beginning of period $ 10.000(10)
Value at end of period $ 10.334
Increase (decrease) in value of accumulation units(1) 3.34(10)
Number of accumulation units outstanding at end of period 4,341
MFS WORLD GOVERNMENT SERIES
Value at beginning of period $ 10.000(9)
Value at end of period $ 10.471
Increase (decrease) in value of accumulation units(1) 4.71%(9)
Number of accumulation units outstanding at end of period 20,479
</TABLE>
- ------------------
(1) The above figures are calculated by subtracting the beginning Accumulation
Unit value from the ending Accumulation Unit value during a calendar year,
and dividing the result by the beginning Accumulation Unit value. These
figures do not reflect the deferred sales charge or the fixed dollar annual
maintenance fee, if any. Inclusion of these charges would reduce the
investment results shown.
(2) Reflects less than a full year of performance activity. Funds were first
received in this option during January 1996.
(3) Reflects less than a full year of performance activity. Funds were first
received in this option during February 1996.
(4) Reflects less than a full year of performance activity. Funds were first
received in this option during July 1996.
(5) Reflects less than a full year of performance activity. Funds were first
received in this option during May 1996.
(6) Reflects less than a full year of performance activity. The initial
Accumulation Unit value was established at $10.000 during September 1996
when the portfolio became available under the option.
(7) Reflects less than a full year of performance activity. Funds were first
received in this option during April 1996.
(8) Reflects less than a full year of performance activity. Funds were first
received in this option during March 1996.
(9) Reflects less than a full year of performance activity. The initial
Accumulation Unit value was established at $10.000 during May 1996 when the
fund became available under the option.
(10) Reflects less than a full year of performance activity. The initial
Accumulation Unit value was established at $10.000 during October 1996 when
the fund became available under the option.
- --------------------------------------------------------------------------------
AUV HISTORY - 4
<PAGE>
THE COMPANY
================================================================================
Aetna Insurance Company of America (the "Company"), the depositor of
Variable Annuity Account I, is the issuer of the Contract, and as such, it is
responsible for providing the insurance and annuity benefits under the
Contract. The Company is a wholly owned subsidiary of Aetna Life Insurance and
Annuity Company ("ALIAC"). ALIAC is a wholly owned subsidiary of Aetna
Retirement Holdings, Inc., which is in turn a wholly owned subsidiary of Aetna
Retirement Services, Inc. and an indirect wholly owned subsidiary of Aetna Inc.
The Company's principal executive offices are located at 151 Farmington Avenue,
Hartford, Connecticut 06156.
VARIABLE ANNUITY ACCOUNT I
================================================================================
The Company established Variable Annuity Account I (the "Separate
Account") in 1994 as a segregated asset account for the purpose of funding its
variable annuity contracts. The Separate Account is registered as a unit
investment trust under the Investment Company Act of 1940 (the "1940 Act"), and
meets the definition of "separate account" under federal securities laws. The
Separate Account is divided into "subaccounts" which do not invest directly in
stocks, bonds or other investments. Instead, each Subaccount buys and sells
shares of a corresponding Fund.
Although the Company holds title to the assets of the Separate Account,
such assets are not chargeable with liabilities of any other business conducted
by the Company. Income, gains or losses of the Separate Account 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 arising under the
Contracts are general corporate obligations of the Company.
INVESTMENT OPTIONS
================================================================================
THE FUNDS
Purchase Payments may be allocated to one or more of the Subaccounts as
designated on the Application. In turn, the Subaccounts invest in the
corresponding Funds at net asset value. The Company reserves the right to limit
the number of investment options selected during the Accumulation Period. At
this time there is no limit on the number of investment options selected during
the Accumulation Period, but the number of investment options that may be
selected at any one time by a Certificate Holder is limited to 18. Each
Subaccount and each Guaranteed Term of the same duration count as an option
once you have made an allocation to it, even if you no longer have amounts
allocated to that option.
The availability of Funds may be subject to regulatory authorization. In
addition, the Company may add or withdraw Funds, as permitted by applicable
law. Not all Funds may be available in all jurisdictions or under all
Contracts.
Subject to state regulatory approval, if the shares of any Fund should no
longer be available for investment by the Separate Account or if in the
judgment of the Company, further investment in such shares should become
inappropriate in view of the purpose of the Contract, we may cease to make such
Fund shares available for investment under the Contract prospectively. The
Company may, alternatively, substitute shares of another Fund for shares
already acquired. The Company reserves the right to substitute shares of
another Fund for shares already acquired without a proxy vote. Any elimination,
substitution or addition of Funds will be done in accordance with applicable
state and federal securities laws.
The investment results of the Funds described below are likely to differ
significantly and there is no assurance that any of the Funds will achieve
their respective investment objectives. Except where otherwise noted, all of
the Funds are diversified, as defined in the 1940 Act.
[bullet] Aetna Variable Fund seeks to maximize total return through investments
in a diversified portfolio of common stocks and securities convertible
into common stock.(1)
[bullet] Aetna Income Shares seeks to maximize total return, consistent with
reasonable risk, through investments
- --------------------------------------------------------------------------------
1
<PAGE>
in a diversified portfolio consisting primarily of debt securities.(1)
[bullet] 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.(1)
[bullet] Aetna Investment Advisers Fund, Inc. is a managed fund which 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.(1)
[bullet] Aetna Generation Portfolios, Inc.--Aetna Ascent Variable Portfolio
seeks to provide capital appreciation by allocating its investments
among equities and fixed income securities. The Portfolio is managed
for investors who generally have an investment horizon exceeding 15
years, and who have a high level of risk tolerance.(1)
[bullet] 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. The Portfolio is managed for
investors who generally have an investment horizon exceeding 10 years
and who have a moderate level of risk tolerance.(1)
[bullet] 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. The Portfolio is managed for investors who generally have
an investment horizon exceeding five years and who have a low level of
risk tolerance.(1)
[bullet] Aetna Variable Portfolios, Inc.--Aetna Variable Capital Appreciation
Portfolio seeks growth of capital primarily through investment in a
diversified portfolio of common stocks and securities convertible into
common stock. The Portfolio will use a value-oriented approach in an
attempt to outperform the total return performance of publicly traded
common stocks represented by the S & P 500 Composite Stock Price Index
("S & P 500"), a broad based stock market index composed of 500 common
stocks selected by the Standard & Poor's Corporation. The Portfolio
uses the S & P 500 as a comparative benchmark because it represents
approximately two-thirds of the total market value of all U.S. common
stocks, and is well known to investors.(1)
[bullet] Aetna Variable Portfolios, Inc.--Aetna Variable Growth Portfolio seeks
growth of capital through investment in a diversified portfolio of
common stocks and securities convertible into common stocks believed
to offer growth potential.(1)
[bullet] Aetna Variable Portfolios, Inc.--Aetna Variable Index Plus Portfolio
seeks to outperform the total return performance of publicly traded
common stocks represented by the S & P 500.(1)
[bullet] Aetna Variable Portfolios, Inc.--Aetna Variable Small Company
Portfolio seeks growth of capital primarily through investment in a
diversified portfolio of common stocks and securities convertible into
common stocks of companies with smaller market capitalizations.
Companies with smaller market capitalizations generally will have
market capitalization at the time of purchase of $1 billion or
less.(1)
[bullet] Calvert Responsibly Invested Balanced Portfolio is a nondiversified
portfolio that seeks to achieve a total return above the rate of
inflation through an actively managed, nondiversified portfolio of
common and preferred stocks, bonds and money market instruments which
offer income and capital growth opportunity and which satisfy the
social criteria established for the Portfolio.(2)
[bullet] Fidelity Investments Variable Insurance Products Fund--Equity-Income
Portfolio seeks reasonable income by investing primarily in
income-producing equity securities. In selecting investments, the Fund
also considers the potential for capital appreciation.(3)
[bullet] Fidelity Investments Variable Insurance Products Fund--Growth
Portfolio seeks capital appreciation by investing mainly in common
stocks, although its investments are not restricted to any one type of
security.(3)
[bullet] 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
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2
<PAGE>
"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-rated corporate debt
obligations).(3)
[bullet] Fidelity Investments Variable Insurance Products Fund--Overseas
Portfolio seeks long-term growth by investing mainly in foreign
securities (at least 65% of the Fund's total assets in securities of
issuers from at least three countries outside of North America).
Foreign investments involve greater risks than U.S. investments,
including political and economic risks and the risk of currency
fluctuation.(3)
[bullet] 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 domestic and foreign stocks,
bonds and short-term fixed-income instruments.(3)
[bullet] Fidelity Investments Variable Insurance Products Fund II--Contrafund
Portfolio seeks maximum total return over the long term by investing
mainly in equity securities of companies that are undervalued or out-
of-favor.(3)
[bullet] 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
Composite Index of 500 Stocks.(3)
[bullet] Janus Aspen Series--Aggressive Growth Portfolio is a nondiversified
portfolio that seeks long-term growth of capital. The Portfolio
pursues its investment objective by normally investing at least 50% of
its equity assets in securities issued by medium-sized companies.
Medium-sized companies are those whose market capitalizations fall
within the range of companies in the S&P MidCap 400 Index, which as of
December 30, 1996 included companies with capitalizations between
approximately $192 million and $6.5 billion, but which is expected to
change on a regular basis.(4)
[bullet] Janus Aspen Series--Balanced Portfolio seeks long-term capital growth,
consistent with preservation of capital and balanced by current income.
The Portfolio pursues its investment objective by, under normal
circumstances, investing 40%-60% of its assets in securities selected
primarily for their growth potential and 40%-60% of its assets in
securities selected primarily for their income potential.(4)
[bullet] Janus Aspen Series--Flexible Income Portfolio seeks to obtain maximum
total return, consistent with preservation of capital. Total return is
expected to result from a combination of current income and capital
appreciation. The Portfolio invests in all types of income producing
securities and may have substantial holdings of debt securities rated
below investment grade (e.g., junk bonds).(4)
[bullet] Janus Aspen Series--Growth Portfolio seeks long-term growth of capital
in a manner consistent with the preservation of capital. The Portfolio
pursues its investment objective by investing in common stocks of
companies of any size.(4)
[bullet] Janus Aspen Series--Worldwide Growth Portfolio seeks long-term growth
of capital in a manner consistent with preservation of capital. The
Portfolio pursues its investment objective primarily through
investments in common stocks of foreign and domestic issuers.(4)
[bullet] MFS Total Return Series seeks to provide above-average income (compared
to a portfolio invested entirely in equity securities) consistent with
the prudent employment of capital. Its secondary objective is to
provide reasonable opportunity for growth of capital and income. Under
normal market conditions, at least 25% of the Total Return Series'
assets will be invested in fixed income securities, and at least 40%
and no more than 75% of the Series' assets will be invested in equity
securities.(5)
[bullet] MFS World Government Series seeks not only preservation, but also
growth of capital, together with moderate current income. The Series
seeks to achieve its objective through a professionally managed,
internationally diversified portfolio consisting primarily of debt
securities and to a lesser extent equity securities. Consistent with
its investment objective and policies, the Series may invest up to 100%
(and generally expects to invest not more than 80%) of its net assets
in foreign securities which are not traded on a U.S. exchange.(5)
[bullet] Oppenheimer Capital Appreciation Fund seeks to achieve capital
appreciation by investing in "growth-type" companies.(6)
[bullet] Oppenheimer Global Securities Fund seeks long-term capital appreciation
by investing a substantial portion of its assets in securities of
foreign issuers, "growth-type" companies, cyclical industries and
special
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3
<PAGE>
situations which are considered to have appreciation possibilities.
Current income is not an objective. These securities may be considered
to be speculative.(6)
[bullet] Oppenheimer Growth & Income Fund seeks a high total return (which
includes growth in the value of its shares as well as current income)
from equity and debt securities. From time to time this Fund may focus
on small to medium capitalization common stocks, bonds and convertible
securities.(6)
[bullet] Oppenheimer Strategic Bond Fund seeks a high level of current income
principally derived from interest on debt securities and seeks to
enhance such income by writing covered call options on debt securities.
The Fund intends to invest principally in: (i) foreign government and
corporate debt securities, (ii) U.S. Government securities, and (iii)
lower-rated high yield domestic debt securities, commonly known as
"junk bonds", which are subject to a greater risk of loss of principal
and nonpayment of interest than higher-rated securities. These
securities may be considered to be speculative.(6)
[bullet] Portfolio Partners MFS Emerging Equities Portfolio seeks long term
growth of capital by investing primarily in common stocks issued by
companies that its subadviser believes are early in their life cycle
but which have the potential to become major enterprises (emerging
growth companies).(7)(a)
[bullet] Portfolio Partners MFS Research Growth Portfolio seeks long term growth
of capital and future income by investing primarily in common stocks or
securities convertible into common stocks issued by companies that the
subadviser believes to possess better-than-average prospects for
long-term growth, and, to a lesser extent, in income-producing
securities including bonds and preferred stock.(7)(a)
[bullet] Portfolio Partners MFS Value Equity Portfolio seeks capital
appreciation by investing primarily in common stocks.(7)(a)
[bullet] Portfolio Partners Scudder International Growth Portfolio seeks long
term growth of capital primarily through a diversified portfolio of
marketable foreign equity securities.(7)(b)
[bullet] Portfolio Partners T. Rowe Price Growth Equity Portfolio seeks long
term growth of capital and, secondarily, seeks to increase dividend
income by investing primarily in common stocks issued by a diversified
group of well-established growth companies.(7)(c)
Investment Advisers for each of the Funds:
(1) Aetna Life Insurance and Annuity Company (adviser);
Aeltus Investment Management, Inc. (sub-adviser)
(2) Calvert Asset Management Company, Inc.
(3) Fidelity Management & Research Company
(4) Janus Capital Corporation
(5) Massachusetts Financial Services Company ("MFS")
(6) OppenheimerFunds, Inc.
(7) Aetna Life Insurance and Annuity Company (adviser);
(a) Massachusetts Financial Services Company (sub-adviser)
(b) Scudder, Stevens & Clark, Inc. (sub-adviser)
(c) T. Rowe Price Associates, Inc. (sub-adviser)
Risks Associated with Investment in the Funds. Some of the Funds may use
instruments known as derivatives as part of their investment strategies. The
use of certain derivatives may involve high risk of volatility to a Fund, and
the use of leverage in connection with such derivatives can also increase risk
of losses. Some of the Funds may also invest in foreign or international
securities which involve greater risks than U.S. investments.
More comprehensive information, including a discussion of potential
risks, is found in the current prospectus for each Fund which is distributed
with and accompanies this Prospectus. You should read the Fund prospectuses and
consider carefully, and on a continuing basis, which Fund or combination of
Funds is best suited to your long-term investment objectives. Additional
prospectuses and Statements of Additional Information for this Prospectus and
for each of the Funds can be obtained from the Company's Home Office at the
address and telephone number listed under the "Inquiries" section of the
Prospectus Summary.
Conflicts of Interest (Mixed and Shared Funding). Shares of the Funds are
sold to each of the Subaccounts for funding the variable annuity contracts
issued by the Company. Shares of the Funds may also be sold to other insurance
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 contracts
issued by the Company or by third parties. This is referred to as "mixed
funding."
Because the Funds available under the Contract are sold to fund variable
annuity contracts and variable life insurance policies issued by us or by other
companies,
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4
<PAGE>
certain conflicts of interest could arise. If a conflict of interest were to
occur, one of the separate accounts might withdraw its investment in a Fund,
which might force that Fund to sell portfolio securities at disadvantageous
prices, causing its per share value to decrease. Each Fund's Board of Directors
or Trustees has agreed to monitor events in order to identify any material
irreconcilable conflicts which might arise and to determine what action, if
any, should be taken to address such conflict.
CREDITED INTEREST OPTION
Purchase Payments may be allocated to the AICA Guaranteed Account (the
"Guaranteed Account"). Through the Guaranteed Account, we guarantee stipulated
rates of interest for stated periods of time. Amounts must remain in the
Guaranteed Account for specified periods to receive the quoted interest rates,
or a market value adjustment (which may be positive or negative) will be
applied. (See the Appendix.)
PURCHASE
================================================================================
CONTRACT AVAILABILITY
The Contracts are offered as (1) nonqualified deferred annuity contracts
(we reserve the right to limit ownership of nonqualified Contracts to natural
persons); (2) Individual Retirement Annuities other than "SIMPLE IRAs" as
defined in Section 408(p) of the Internal Revenue Code; or (3) Qualified
Contracts used in conjunction with certain employer sponsored retirement plans.
Individual Retirement Annuities are currently available as rollovers, and may
permit ongoing contributions, subject to state regulatory approval.
Additionally, availability of the Qualified Contracts described under item (3)
is subject to approval by the Company and state regulatory agencies.
Eligible persons seeking to invest and accumulate money for retirement
can purchase individual interests in group Contracts, or, where required by
state law, they may purchase individual Contracts. In most states, group
Contracts are offered to certain broker-dealers which have agreed to act as
distributors of the Contracts, and individual accounts are established by the
Company for each Certificate Holder. In some states, an individual Contract
will be owned by the Certificate Holder. In both cases, a Certificate Holder's
interest in the Contract is known as his or her "Account."
The maximum issue age for the Annuitant is 90 (age 85 for those Contracts
issued in the state of Pennsylvania).
Joint Certificate Holders. Nonqualified Contracts may be purchased by
spouses as joint Certificate Holders. In Pennsylvania, the joint Certificate
Holders do not need to be spouses. References to "Certificate Holders" in this
Prospectus mean both of the Certificate Holders on joint Accounts. Tax law
prohibits the purchase of Qualified Contracts by joint Certificate Holders.
PURCHASING INTERESTS IN THE CONTRACT
Group Contracts. Groups will generally consist of those eligible
individuals who have established an account with a broker-dealer or bank which
has agreed to act as a Distributor for the Contracts. A group Contract is
issued to the group Contract Holder. Certificate Holders may purchase interests
in a group Contract by submitting an Application. Once the Application is
accepted a Certificate will be issued.
Individual Contracts. Certain states will not allow a group Contract due
to provisions in their insurance laws. In those states, an eligible individual
will submit an Application and will be issued a Contract rather than a
Certificate.
Regardless of whether you have purchased an interest in a group or an
individual Contract, the Company must accept or reject the Application within
two business days of receipt. If the Application is incomplete, the Company may
hold any forms and accompanying Purchase Payments for five days. Purchase
Payments may be held for longer periods only with the consent of the
Certificate Holder, pending acceptance of the Application. If the Application
is rejected, the Application and any Purchase Payments will be returned to the
Certificate Holder.
PURCHASE PAYMENTS
You may make Purchase Payments under the Contract in one lump sum,
through periodic payments or as a transfer from a pre-existing plan.
The minimum initial Purchase Payment amount is $5,000 for Nonqualified
Contracts and $1,500 for Qualified Contracts. In some states, a Contract issued
as an Individual Retirement Annuity can accept only a lump sum, rollover
Purchase Payment. Additional Purchase Payments made to an existing Contract
must
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5
<PAGE>
be at least $1,000, or at least $50 per month by electronic funds transfer, and
are subject to the terms and conditions published by us at the time of the
subsequent payment. A Purchase Payment of more than $1,000,000 will be allowed
only with the Company's consent. We also reserve the right to reject any
Purchase Payment to a prospective or existing Account without advance notice
(unless not allowed by state law).
For Qualified Contracts the Code imposes a maximum limit on annual
Purchase Payments which may be excluded from a participant's gross income. (See
"Tax Status.")
Allocation of Purchase Payments. Purchase Payments will initially be
allocated to the Subaccounts or the Guaranteed Account as specified on the
Application. Changes in such allocation may be made in writing or by telephone
transfer. Allocations must be in whole percentages, and there may be
limitations on the number of investment options that can be selected. (See
"Investment Options.")
CONTRACT RIGHTS
Under individual Contracts, Certificate Holders have all Contract rights.
Under group Contracts, the group Contract Holder has title to the
Contract and generally only the right to accept or reject any modifications to
the Contract. You have all other rights to your Account under the Contract.
However, under a Nonqualified Contract, if you and the Annuitant are not the
same, and the Annuitant dies first, your rights are automatically transferred
to the Beneficiary. (See "Death Benefit.")
Joint Certificate Holders have equal rights under the Contract and with
respect to their Account. All rights under the Contract must be exercised by
both joint Certificate Holders with the exception of transfers among investment
options, which can be exercised by one joint Certificate Holder after the
Account has been established. See "Death Benefit" regarding the rights of the
surviving joint Certificate Holder upon the death of a joint Certificate Holder
prior to the Annuity Date.
DESIGNATIONS OF BENEFICIARY AND ANNUITANT
You generally designate the Beneficiary under the Contract on the
Application. You may also elect to specify the form of payment to be made to
the Beneficiary. For Qualified Contracts issued in conjunction with a Code
Section 401(a) qualified pension or profit sharing plan or a Code Section 457
deferred compensation plan, the employer or trustee must be both the
Certificate Holder and the Beneficiary under the Contract, and the participant
on whose behalf the Account was established must be the Annuitant. Under such
plans the participant is generally allowed to designate a beneficiary under the
plan, and the Certificate Holder may direct that we pay any death proceeds to
the plan beneficiary. "Beneficiary" as used in this Prospectus refers to the
person who is ultimately entitled to receive such proceeds.
For Qualified Contracts issued in conjunction with a Code Section 403(b)
tax deferred annuity program subject to the Employee Retirement Income Security
Act (ERISA), the spouse of a married participant must be the Beneficiary of at
least 50% of the Account Value. If the married participant is age 35 or older,
the participant may name an alternate Beneficiary provided the participant
furnishes a waiver and spousal consent which meets the requirements of ERISA
Section 205. The participant on whose behalf the Account was established must
be the Annuitant.
For Qualified Contracts issued as an Individual Retirement Annuity, the
Certificate Holder must be the Annuitant. For Nonqualified Contracts, the
Certificate Holder and the Annuitant may, but need not, be the same person.
(See "Purchase-Contract Availability.")
RIGHT TO CANCEL
You may cancel the Contract or Certificate without penalty by returning
it to the Company with a written notice of your intent to cancel. In most
states, you have ten days to exercise this "free look" right; some states allow
you longer. Unless state law requires otherwise, the amount you will receive
upon cancellation will reflect the investment performance of the Subaccounts
into which your Purchase Payments were deposited. In some cases this may be
more or less than the amount of your Purchase Payments; therefore, you bear the
entire investment risk for amounts allocated among the Subaccounts during the
free look period. Under Contracts issued as Individual Retirement Annuities,
you will receive a refund of your Purchase Payment. Account Values will be
determined as of the Valuation Date on which we receive your request for
cancellation at our Home Office.
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<PAGE>
CHARGES AND DEDUCTIONS
================================================================================
DAILY DEDUCTIONS FROM THE SEPARATE ACCOUNT
Mortality and Expense Risk Charge. The Company makes a daily deduction
from each of the Subaccounts for the mortality and expense risk charge. The
charge is equal, on an annual basis, to 1.25% of the daily net assets of the
Subaccounts and compensates the Company for the assumption of the mortality and
expense risks under the Contract. The mortality risks are those assumed for our
promise to make lifetime payments according to annuity rates specified in the
Contract. The expense risk is the risk that the actual expenses for costs
incurred under the Contract will exceed the maximum costs that can be charged
under the Contract.
In certain circumstances, the risk of adverse expense experience
associated with this Contract may be reduced. In such event, the mortality and
expense risk charge applicable to that Contract may likewise be reduced.
Whether such a reduction is available will be determined by the Company based
upon consideration of one of the following factors:
(1) the size and composition of the prospective group such as a group made up
of active employees of the Company or its affiliates;
(2) the type and frequency of administrative and sales services provided; and
(3) the level of maintenance fee and deferred sales charges.
Any reduction of the mortality and expense risk charge will not be
unfairly discriminatory against any person. We will make any reduction in the
mortality and expense risk charge according to our own rules in effect at the
time the Contract is issued. We reserve the right to change these rules from
time to time.
If the amount deducted for mortality and expense risks is not sufficient
to cover the mortality costs and expense shortfalls, the loss is borne by the
Company. If the deduction is more than sufficient, the excess may be used to
recover distribution expenses relating to the Contracts and as a source of
profit to the Company. The Company expects to make a profit from the mortality
and expense risk charge.
Administrative Charge. During the Accumulation Period, the Company makes
a daily deduction from each of the Subaccounts for an administrative charge.
The charge is equal, on an annual basis, to 0.15% of the daily net assets of
the Subaccounts and compensates the Company for administrative expenses that
exceed revenues from the maintenance fee described below. The charge is set at
a level which does not exceed the average expected cost of the administrative
services to be provided while the Contract is in force. The Company does not
expect to make a profit from this charge.
During the Annuity Period, the Company reserves the right to make a
deduction for the administrative charge of an amount equal, on an annual basis,
to a maximum of 0.25% of the daily net assets of the Subaccounts. There is
currently no administrative charge during the Annuity Period. Once an Annuity
Option is elected, the charge will be established and will be effective during
the entire Annuity Period.
MAINTENANCE FEE
During the Accumulation Period, the Company will deduct an annual
maintenance fee from the Account Value. The maintenance fee is to reimburse the
Company for some of its administrative expenses relating to the establishment
and maintenance of the Accounts.
The maximum maintenance fee deducted under the Contract is $30. The
maintenance fee will be deducted annually on the anniversary of the Contract
effective date. It is deducted on a pro rata basis from each investment option
in which you have an interest. If your entire Account Value is withdrawn, the
full maintenance fee, if applicable, will be deducted at the time of
withdrawal. The maintenance fee will not be deducted (either annually or upon
withdrawal) if your Account Value is $50,000 or more on the day the maintenance
fee is due.
DEFERRED SALES CHARGE
Withdrawals of all or a portion of the Account Value may be subject to a
deferred sales charge. The deferred sales charge is a percentage of Purchase
Payments withdrawn from the Subaccounts and the Guaranteed Account and is based
on the number of years which have elapsed since the Purchase Payment was made.
The deferred sales charge for each Purchase Payment is determined by
multiplying the Purchase
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<PAGE>
Payment withdrawn by the appropriate percentage, in accordance with the
schedule set forth in the tables below.
Withdrawals are taken first against Purchase Payments, then against any
increase in value. However, the deferred sales charge only applies to the
Purchase Payment (not to any associated changes in value). To satisfy a partial
withdrawal, the deferred sales charge is calculated as if the Purchase Payments
are withdrawn from the Subaccounts in the same order they were applied to the
Account. Partial withdrawals from the Guaranteed Account will be treated as
described in the Appendix and the prospectus for the Guaranteed Account. The
total charge will be the sum of the charges applicable for all of the Purchase
Payments withdrawn.
<TABLE>
<CAPTION>
- -------------------------------------------------
Years since receipt of Deferred Sales
Purchase Payment Charge Deduction
- ---------------------- ----------------
<S> <C>
Less than 2 7%
2 or more but less than 4 6%
4 or more but less than 5 5%
5 or more but less than 6 4%
6 or more but less than 7 3%
7 or more 0%
- -------------------------------------------------
</TABLE>
A deferred sales charge will not be deducted from any portion of a
Purchase Payment withdrawn if the withdrawal is:
[bullet] applied to provide Annuity benefits;
[bullet] paid to a Beneficiary due to the Annuitant's death before Annuity
payments start, up to a maximum of the Purchase Payment(s) in the
Account on the Annuitant's date of death;
[bullet] made due to the election of a Systematic Distribution Option (see
"Systematic Distribution Options");
[bullet] if approved by your state, under a Qualified Contract when the amount
withdrawn is equal to the minimum distribution required by the Code
for this Contract calculated using a method permitted under the Code
and agreed to by the Company;
[bullet] paid upon a full withdrawal where the Account Value is $2,500 or less
and no amount has been withdrawn during the prior 12 months; or
[bullet] paid if we close out your Account when the value is less than $2,500
(or other amount required by state law).
After the first Account Year, you may withdraw all or a portion of your
Purchase Payments without a deferred sales charge, provided that (1) such
withdrawal occurs within three years of the Annuitant's admission to a licensed
nursing care facility (including non-licensed facilities in New Hampshire) and
(2) the Annuitant has spent at least 45 consecutive days in such facility. This
waiver of deferred sales charge does not apply if the Annuitant is in a nursing
care facility at the time the Account is established. It will also not apply if
otherwise prohibited by state law.
The Company does not anticipate that the deferred sales charge will cover
all sales and administrative expenses which it incurs in connection with the
Contract. The difference will be covered by the general assets of the Company
which are attributable, in part, to mortality and expense risk charges under
the Contract described above.
Free Withdrawals. Subject to the restrictions described below, you may
withdraw up to the greater of 10% of your current Account Value or the minimum
distribution amount required by law during each calendar year without
imposition of a deferred sales charge. The free withdrawal amount will be based
on the Account Value calculated on the Valuation Date next following our
receipt of your request for withdrawal and will be adjusted for amounts
requested for distribution under a Systematic Distribution Option, during the
calendar year. If your withdrawal exceeds the applicable free withdrawal
allowance, we will deduct a deferred sales charge on the excess amount. (See
the Appendix for a discussion of withdrawals from the Guaranteed Account.)
FUND EXPENSES
Each Fund incurs certain expenses which are paid out of its net assets.
These expenses include, among other things, the investment advisory or
"management" fee. The expenses of the Funds are set forth in the Fee Table in
this Prospectus and described more fully in the accompanying Fund prospectuses.
PREMIUM AND OTHER TAXES
Several states and municipalities currently impose a premium tax on
Annuities. These taxes currently range from 0% to 4%. Ordinarily, any
applicable state premium tax will be deducted from the Account Value when it is
applied to an Annuity Option. However, we reserve the right to deduct state
premium tax from the Purchase Payment(s) or from the Account Values at any
time, but no earlier than when we have a tax liability under state law.
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8
<PAGE>
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.
CONTRACT VALUATION
================================================================================
ACCOUNT VALUE
Until the Annuity Date, the Account Value is the total dollar value of
amounts held in the Account as of any Valuation Date. The Account Value at any
given time is based on the value of the units held in each Subaccount, plus the
value of amounts held in the Guaranteed Account.
ACCUMULATION UNITS
The value of your interests in a Subaccount is expressed as the number of
"Accumulation Units" that you hold multiplied by an "Accumulation Unit Value"
(or "AUV") for each unit. The AUV on any Valuation Date is determined by
multiplying the value on the immediately preceding Valuation Date by the net
investment factor of that Subaccount for the period between the immediately
preceding Valuation Date and the current Valuation Date. (See "Net Investment
Factor" below.) The Accumulation Unit Value will be affected by the investment
performance, expenses and charges of the applicable Fund and is reduced each
day by a percentage that accounts for the daily assessment of mortality and
expense risk charges and the administrative charge.
Initial Purchase Payments will be credited to your Account at the AUV
next computed following our acceptance of the Application as described under
"Purchasing Interests in the Contract." Each subsequent Purchase Payment (or
amount transferred) received by the Company by the close of business of the New
York Stock Exchange will be credited to your Account at the AUV next computed
following our receipt of your payment or transfer request. The value of an
Accumulation Unit may increase or decrease.
NET INVESTMENT FACTOR
The net investment factor is used to measure the investment performance
of a Subaccount from one Valuation Date to the next. The net investment factor
for a Subaccount for any valuation period is equal to the sum of 1.0000 plus
the net investment rate. The net investment rate equals:
(a) the net assets of the Fund held by the Subaccount on the current
Valuation Date, minus
(b) the net assets of the Fund held by the Subaccount on the preceding
Valuation Date, plus or minus
(c) taxes or provisions for taxes, if any, attributable to the operation
of the Subaccount;
(d) divided by the total value of the Subaccount's Accumulation and
Annuity Units on the preceding Valuation Date;
(e) minus a daily charge at the annual effective rate of a maximum of
1.25% for mortality and expense risks, and an administrative charge of
0.15% during the Accumulation Period and up to 0.25% during the
Annuity Period (currently 0% during the Annuity Period).
The net investment rate may be either positive or negative.
TRANSFERS
================================================================================
At any time prior to the Annuity Date, you can transfer amounts held
under your Account among the investment options available subject to certain
limitations. (See "Investment Options.") Transfers from the Guaranteed Account
may be subject to certain restrictions and to a market value adjustment. (See
the Appendix.) If approved by your state, during the Annuity Period, if you
have elected a variable Annuity, you can make transfers only among the
Subaccounts available during the Annuity Period. (See "Annuity Options.") A
request for transfer can be made either in writing or by telephone. The
telephone transfer privilege is available automatically; no special election is
necessary. All transfers must be in accordance with the terms of the Contract.
Any transfer
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will be based on the Accumulation Unit Value next determined after the Company
receives a valid transfer request at its Home Office.
During the Accumulation Period, twelve free transfers are allowed per
calendar year. Thereafter, the Company reserves the right to charge up to $10
for each additional transfer. This charge will be deducted from the gross
amount of the transfer. The Company currently does not impose this charge.
Currently, during the Annuity Period, four transfers are allowed each calendar
year.
DOLLAR COST AVERAGING PROGRAM
You may establish automated transfers of Account Values on a monthly or
quarterly basis through the Company's 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. The Dollar Cost Averaging Program permits the
transfer of amounts from any of the variable funding options and an available
Guaranteed Term subject to the Company's terms and conditions to any of the
Subaccounts. A market value adjustment will not be applied to dollar cost
averaging transfers from any such Guaranteed Term during participation in the
Dollar Cost Averaging Program. If dollar cost averaging from a Guaranteed Term
is discontinued, the Company will automatically transfer the balance remaining
in the Guaranteed Term from which dollar cost averaging is withdrawn to a
Guaranteed Term of the same duration unless the Certificate Holder initiates a
transfer to another investment option. In either case, a market value
adjustment will apply. There is no additional charge for the Dollar Cost
Averaging Program. (See the Appendix for a discussion of the restrictions and
features attributable to the Guaranteed Account.)
Dollar cost averaging does not ensure a profit nor guarantee against loss
in a declining market. You should consider your financial ability to continue
purchases through periods of low price levels. For additional information,
please refer to the "Inquiries" section of the Prospectus Summary, which
describes how you can obtain further information.
The Dollar Cost Averaging Program is not available to individuals who
have elected the Account Rebalancing Program.
ACCOUNT REBALANCING PROGRAM
The Account Rebalancing Program allows you to have portions of your
Account Value automatically reallocated annually to a specified percentage or
at other more frequent intervals as allowed by the Company under the program.
Only Account Values accumulating in the Subaccounts can be rebalanced. You may
participate in this program by completing the Account Rebalancing section of
the Application, or by sending a written request to the Company at its Home
Office. The Account Rebalancing Program does not ensure a profit nor guarantee
against loss in a declining market.
The Account Rebalancing Program is not available to Certificate Holders
who have elected the Dollar Cost Averaging Program.
WITHDRAWALS
================================================================================
All or a portion of your Account Value may be withdrawn at any time
during the Accumulation Period. Withdrawal restrictions applicable under
Section 403(b) Contracts are described below. To request a withdrawal, you must
properly complete a disbursement form and send it to our Home Office. Payments
for withdrawal requests will be made in accordance with Securities and Exchange
Commission requirements, but normally not later than seven calendar days
following our receipt of a disbursement form. Withdrawals may be subject to a
deferred sales charge (see "Charges and Deductions") and to taxes and to tax
penalties (see "Tax Status").
Withdrawals may be requested in one of the following forms:
[bullet] Full Withdrawal of an Account: The amount paid for a full withdrawal
will be the Adjusted Account Value minus any applicable deferred sales
charge and maintenance fee due.
[bullet] Partial Withdrawals: (Percentage): The amount paid will be the
percentage of the Adjusted Account Value requested minus any
applicable deferred sales charge.
[bullet] Partial Withdrawals: (Specified Dollar Amount): The amount paid will
be the dollar amount requested. However, the amount withdrawn from
your Account will equal the amount you request plus any applicable
deferred sales charge and plus or minus any applicable market value
adjustment.
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For any partial withdrawal, the value of the Accumulation Units canceled
will be withdrawn proportionately from the Guaranteed Account or each
Subaccount in which your Account is invested, unless you request otherwise in
writing. All amounts paid will be based on your Account Value as of the next
Valuation Date after we receive a request for withdrawal at our Home Office, or
on such later date as the disbursement form may specify.
The tax treatment of withdrawals from each Nonqualified Contract may be
affected if you own other annuity contracts issued by us (or our affiliates)
that were purchased on or after October 21, 1988. (See "Tax Status.")
Withdrawal Restrictions from 403(b) Plans. Under Section 403(b)
Contracts, the withdrawal of salary reduction contributions and earnings on
such contributions is generally prohibited prior to the participant's death,
disability, attainment of age 59-1/2, separation from service or financial
hardship. (See "Tax Status.")
Reinstatement Privilege Following Withdrawal. You may elect to reinstate
all or a portion of the proceeds received from the full withdrawal of your
Account within 30 days after the withdrawal. Accumulation Units will be
credited to your 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 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 as described in Section entitled "Involuntary
Terminations." If you are contemplating reinstatement, you should seek
competent advice regarding the tax consequences associated with this type of a
transaction.
SYSTEMATIC DISTRIBUTION OPTIONS
================================================================================
The Company offers certain withdrawal options under the Contract that are
not considered Annuity Options ("Systematic Distribution Options"). To exercise
these options, your Account Value must meet the minimum dollar amount and age
criteria applicable to that option.
The Systematic Distribution Options currently available under the
Contract include the following:
[bullet] SWO--Systematic Withdrawal Option. SWO is a series of partial
withdrawals from your Account based on a payment method you select. It
is designed for those who want a periodic income while retaining
investment flexibility for amounts accumulated under a Contract.
[bullet] ECO--Estate Conservation Option. 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. ECO is
available only under Qualified Contracts. Under ECO, the Company
calculates the minimum distribution amount required by law, and pays
you that amount once a year. (See "Tax Status.")
Other Systematic Distribution Options may be added from time to time.
Additional information relating to any of the Systematic Distribution Options
may be obtained from your local representative or from the Company at its Home
Office.
If you select one of the Systematic Distribution Options, you will retain
all of the rights and flexibility permitted under the Contract during the
Accumulation Period. Your Account Value will continue to be subject to the
charges and deductions described in this Prospectus. Taking a withdrawal under
one of these Systematic Distribution Options may have tax consequences. Any
person concerned about tax implications should consult a competent tax advisor
prior to electing an option.
Once you elect a Systematic Distribution Option, you may revoke it any
time by submitting a written request to our Home Office. Once an option is
revoked, it may not be elected again for three years, nor may any
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other Systematic Distribution Option be elected unless permitted by the Code.
The Company reserves the right to discontinue the availability of one or all of
these Systematic Distribution Options for new elections at any time, and/or to
change the terms of future elections.
DEATH BENEFIT DURING ACCUMULATION PERIOD
================================================================================
A death benefit will be payable to the Beneficiary(ies) if the
Certificate Holder or the Annuitant dies before Annuity payments have
commenced. Upon the death of a joint Certificate Holder prior to the Annuity
Date, the surviving Certificate Holder, if any, will become the designated
Beneficiary. Any other Beneficiary designation on record with the Company at
the time of death will be treated as a contingent Beneficiary.
DEATH BENEFIT AMOUNT
If approved by your state, upon the death of the Annuitant, the death
benefit proceeds will be the greater of:
(1) The minimum guaranteed death benefit (described below) as of the date of
death, plus any Purchase Payments made, and less any amount(s) surrendered,
applied to an Annuity option or deducted from the Account, since the minimum
guaranteed death benefit was determined, or
(2) The Account Value on the Claim Date.
The minimum guaranteed death benefit is determined as follows: On the
effective date of the Contract ("Effective Date"), the minimum guaranteed death
benefit equals the amount of the initial Purchase Payment. On each Effective
Date anniversary before the Annuitant reaches age 85, the minimum guaranteed
death benefit is the greater of:
(1) The prior minimum guaranteed death benefit, plus any Purchase Payments made,
and less any amount(s) surrendered, applied to an Annuity option or deducted
from the Account, since the minimum guaranteed death benefit was previously
determined, or
(2) The Account Value on the Effective Date anniversary.
After the Annuitant reaches age 85 the minimum guaranteed death benefit
is equal to the minimum guaranteed death benefit determined on the Effective
Date anniversary immediately preceding the date the Annuitant attained age 85
plus any Purchase Payments made, and less any amounts surrendered, applied to
an Annuity option or deducted from the Account.
On the Claim Date, if the minimum guaranteed death benefit is greater
than the Account Value, the amount by which the minimum guaranteed death
benefit exceeds the Account Value is allocated to the money market subaccount
available under the Contract. The Beneficiary may elect a death benefit option
as permitted unless the Certificate Holder has specified the form of payment to
the Beneficiary.
Under Nonqualified Contracts only, if the Certificate Holder is not the
Annuitant and dies, the minimum guaranteed death benefit will not apply. The
amount paid on account of the death benefit of the Certificate Holder will be
equal to the Adjusted Account Value on the Claim Date. Full or partial
withdrawals may be subject to a deferred sales charge. The Beneficiary may
elect a death benefit option available under the Contract unless the
Certificate Holder has specified the form of payment to the Beneficiary.
If a spousal Beneficiary continued the Account at the death of the
Certificate Holder who was also the Annuitant, the spousal Beneficiary will
become the Annuitant and the minimum guaranteed death benefit will also apply
at the death of the spousal Beneficiary. The initial minimum guaranteed death
benefit equals the Account Value as adjusted for any minimum guaranteed death
benefit payable at the death of the original Certificate Holder/Annuitant.
Thereafter, the minimum guaranteed death benefit is determined as above.
If the spousal Beneficiary continued the Account at the death of the
Certificate Holder who was not also the Annuitant, the Annuitant will not
change and the amount of death benefit proceeds payable upon the spousal
Beneficiary's death will be equal to the Adjusted Account Value on the Claim
Date, less any deferred sales charge.
If the death benefit described above has not been approved by your state,
the following death benefit shall apply:
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Upon the death of the Annuitant, the guaranteed death benefit proceeds
will be the greatest of:
(1) the total Purchase Payment(s) applied to the Account, minus the sum of all
amounts withdrawn, annuitized or deducted from such Account;
(2) the highest step-up value as of the date of death. The step-up value is
determined on each anniversary of the Effective Date, up to the Annuitant's
75th birthday. Each step-up value is calculated as the Account Value on the
Effective Date anniversary, increased by Purchase Payments applied, and
decreased by partial withdrawals, annuitizations and deductions taken from
the Account since the Effective Date anniversary; or
(3) the Account Value as of the date of death.
The excess, if any, of the guaranteed death benefit value over the
Account Value is determined as of the date of death. Any excess amount will be
deposited and allocated to the Aetna Variable Encore Fund Subaccount under the
Contract. The Account Value on the claim date plus any excess amount deposited
into the Account becomes the Certificate Holder's Account Value. The death
benefit paid will equal the Account Value when request for payment is made and
no deferred sales charge applies.
Under Nonqualified Contracts only, if the Certificate Holder is not the
Annuitant and dies, the guaranteed death benefit will not apply. The amount of
death benefit proceeds, will be equal to the Adjusted Account Value on the
Claim Date. Full or partial withdrawals may be subject to a deferred sales
charge.
If the spousal Beneficiary continued the Account after the death of the
Certificate Holder who was the Annuitant, the amount of the death benefit
proceeds payable upon the spousal Beneficiary's death will be equal to the
Adjusted Account Value on the Claim Date, less any deferred sales charge
applicable to any Purchase Payments made since the death of the Certificate
Holder/Annuitant.
If the spousal Beneficiary continued the Account after the death of the
Certificate Holder who was not the Annuitant, the amount of the death benefit
proceeds payable upon the spousal Beneficiary's death will be equal to the
Adjusted Account Value on the Claim Date. Full or partial withdrawals may be
subject to a deferred sales charge in accordance with the usual rules regarding
the deferred sales charge. (See "Deferred Sales Charge.") If this provision was
not approved in your state, the deferred sales charge will apply only to
Purchase Payments made since the death of the Certificate Holder.
For amounts held in the Guaranteed Account, see the Appendix for a
discussion of the calculation of death benefit proceeds.
DEATH BENEFIT PAYMENT OPTIONS
Death benefit proceeds may be paid to the Beneficiary as described below.
If you die and no Beneficiary exists, the death benefit will be paid in a lump
sum to your estate. Prior to any election by the Beneficiary, the Account Value
will remain in the Account and the Account Value will 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 option (subject to a market value adjustment, as applicable). The
Code requires that distributions begin within a certain time period, as
described below. If no elections are made, no distributions will be made.
Failure to commence distributions within those time periods can result in tax
penalties.
Nonqualified Contracts. Under a Nonqualified Contract, if you die, and
the Beneficiary is your surviving spouse, or if you are a nonnatural person and
the Annuitant dies, and the Beneficiary is the Annuitant's surviving spouse, he
or she automatically becomes the successor Certificate Holder. The successor
Certificate Holder may exercise all rights under the Account and (1) continue
in the Accumulation Period; (2) elect to apply some or all of the Adjusted
Account Value to any of the Annuity Options; or (3) receive at any time a lump
sum payment equal to all or a portion of the Adjusted Account Value. If you die
and you are not the Annuitant, any applicable deferred sales charge will be
applied if a lump sum is elected. Under the Code, distributions are not
required until the successor Certificate Holder's death.
If you die and the Beneficiary is not your surviving spouse, he or she
may elect option (2) or (3) above. According to the Code, any portion of the
Adjusted Account Value not distributed in installments over the life or life
expectancy beginning within one year of your death, must be paid within five
years of your death. (See "Tax Status of the Contract.")
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If you are a natural person but not the Annuitant and the Annuitant dies,
the Beneficiary may elect to apply the Adjusted Account Value to an Annuity
Option within 60 days or to receive a lump sum payment equal to the Adjusted
Account Value, subject to state regulatory approval. If the Beneficiary does
not elect an Annuity Option within 60 days of the date of death, the gain, if
any, will be includable in the Beneficiary's income in the year the Annuitant
dies.
If SWO is in effect, payments will cease at the Certificate Holder's or
Annuitant's death. A Beneficiary, however, may elect to continue SWO.
Qualified Contracts. Under a Qualified Contract, the death benefit is
paid at the death of the participant, who is the Annuitant under the Contract.
The Beneficiary has the following options: (1) apply some or all of the
Adjusted Account Value to any of the Annuity Options, subject to the
distribution rules in Code Section 401(a)(9), or (2) receive at any time a lump
sum payment equal to all or a portion of the Adjusted Account Value. If the
Account was established in conjunction with a Section 401(a) qualified pension
or profit sharing plan or a Section 457 deferred compensation plan, payment
will be made, as directed by the Certificate Holder, to either the Certificate
Holder or to the plan Beneficiary.
If ECO or SWO is in effect and the participant dies before the required
beginning date for minimum distributions, payments will cease. A Beneficiary,
or the Certificate Holder on behalf of a plan Beneficiary, may elect ECO or SWO
provided the election would satisfy the Code minimum distribution rules.
If ECO or SWO is in effect and the participant dies after the required
beginning date for minimum distributions, payments will continue as permitted
under the Code minimum distribution rules, unless the option is revoked.
Death benefit payments must satisfy the distribution rules in Code
Section 401(a)(9). (See "Tax Status of the Contract.")
ANNUITY PERIOD
================================================================================
ANNUITY PERIOD ELECTIONS
You must notify us in writing of the date you want Annuity Payments to
start (the "Annuity Date") and the Annuity Option elected. Payments may not
begin earlier than one year after purchase, or, unless we consent, 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 (fifth
anniversary for Contracts issued in Pennsylvania).
Annuity Payments will not begin until you have selected an Annuity Date
and an Annuity Option. Until a date and option are elected, the Account will
continue in the Accumulation Period.
As of January 1, 1997, the Code generally requires that for Qualified
Contracts, other than for IRAs and for five-percent owners in other Qualified
Contracts, minimum annual distributions of the Account Value begin by April 1st
of the calendar year following the calendar year in which a participant attains
age 701/2 or retires, whichever occurs later. For IRA depositors and for
five-percent owners, minimum distributions must begin by April 1 of the
calendar year following the calendar year in which the participant attains age
701/2. In addition, distributions must be in a form and amount sufficient to
satisfy the Code requirements. These requirements may be satisfied by the
election of certain Annuity Options or Systematic Distribution Options. (See
"Tax Status.") For Nonqualified Contracts, failure to select an Annuity Option
and an Annuity Date, or postponement of the Annuity Date past the Annuitant's
85th birthday or tenth anniversary of your last Purchase Payment may have
adverse tax consequences. You should consult with a qualified tax adviser if
you are considering such a course of action.
At least 30 days prior to the Annuity Date, you must notify us in writing
of the following:
[bullet] the date on which you would like Annuity Payments to begin;
[bullet] the Annuity Option under which you want payments to be calculated and
paid;
[bullet] whether the payments are to be made monthly, quarterly, semi-annually
or annually; and
[bullet] the investment option(s) used to provide Annuity Payments (i.e., a
fixed Annuity using the general account or a variable Annuity using
any of the Subaccounts available at the time of annuitization or a
combination of the two). ("See Annuity Options.")
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Once Annuity Payments begin, the Annuity Option may not be changed.
PARTIAL ANNUITIZATION
You may elect an Annuity Option with respect to a portion of your Account
Value, while leaving the remaining portion of your Account Value invested in
the Accumulation Period. The Code and the regulations do not specifically
address the tax treatment applicable to payments provided in this way. Whether
such payments are taxable as annuity payments or as withdrawals is currently
unclear; therefore, you should consult with a qualified tax adviser if you are
considering a partial annuitization of your Account.
ANNUITY OPTIONS
The Certificate Holder may choose one of the following Annuity Options:
Lifetime Annuity Options:
[bullet] Option 1--Life Annuity--An annuity with payments ending on the
Annuitant's death.
[bullet] Option 2--Life Annuity with Guaranteed Payments--
An annuity with payments guaranteed for 5-30 years.
*[bullet] Option 3--Life Annuity with Cash Refund Feature-- An annuity with a
cash refund feature. Payments are guaranteed for the amount applied to
the Annuity Option. If the Annuitant dies before the amount applied to
the Annuity Option (less any applicable premium tax) has been paid,
any remaining balance will be paid in one sum to the Beneficiary. This
option is available only when all payments are as a fixed Annuity.
[bullet] Option 4--Life Annuity Based Upon the Lives of Two Annuitants--An
annuity paid during the lives of the Annuitant and a second Annuitant.
The Certificate Holder selects an Annuity with 100%, 66-2/3% or 50% of
the payment to continue after the first death, or an Annuity with 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.
[bullet] Option 5--Life Annuity Based Upon the Lives of Two Annuitants with
Guaranteed Payments--An Annuity with Payments for a minimum of 5-30
years, with 100% of the payment to continue after the first death.
*[bullet] Option 6--Life Annuity Based Upon the Lives of Two Annuitants with a
Cash Refund Feature--An Annuity with 100% of the payment to continue
after the first death with a cash refund feature. Payments are
guaranteed for the amount applied to the Annuity Option. If both
Annuitants die prior to the total payment of the amount applied to
the Annuity Option (less any premium tax), any remaining balance will
be paid in one sum to the Beneficiary. This option is available only
when all payments are as a Fixed Annuity.
*(If approved by your state)
If Option 1 or 4 is elected, it is possible that only one Annuity Payment
will be made if the Annuitant under Option 1, or the surviving Annuitant under
Option 4, should die prior to the due date of the second Annuity Payment. Once
lifetime Annuity payments begin, the Certificate Holder cannot elect to receive
a lump-sum settlement.
Nonlifetime Annuity Option:
Under the nonlifetime option, payments may be made for generally 5-30
years, as selected by the Certificate Holder. If this option is elected as a
variable Annuity, the Certificate Holder may request that the present value of
all or any portion of the remaining variable payments be paid in one sum.
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.") If the nonlifetime option is elected on a
fixed basis, you cannot elect to receive a lump-sum settlement.
We may also offer additional Annuity Options under your Contract from
time to time. You can call the number listed in the "Inquiries" section of the
Prospectus Summary, to determine which options are available and the terms of
such options. Additional or enhanced options may not be made available to those
already receiving Annuity payments.
ANNUITY PAYMENTS
Date Payments Start. When payments start, the age of the Annuitant plus
the number of years for which payments are guaranteed must not exceed 95. For
Qualified Contracts only, Annuity Payments may not extend beyond (a) the life
of the Annuitant, (b) the joint lives of the Annuitant and Beneficiary, (c) a
period certain greater than the Annuitant's life expectancy, or (d) a period
certain greater than the joint life expectancies of the Annuitant and
Beneficiary.
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Amount of Each Annuity Payment. The amount of each payment depends on how
you allocate your Account Value between fixed and variable payouts (some
options require that all payments be made on a fixed basis). No election may be
made that would result in the first Annuity Payment of less than $50, or total
yearly Annuity Payments of less than $250 (less if required by state law). If
the Account Value on the Annuity 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.
If Annuity Payments are to be made on a variable basis, the first and
subsequent payments will vary depending on the assumed net investment rate
selected (3-1/2% 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 exceeds 5% on an annualized basis. Annuity Payments
would decline if the rate were below 5%. Use of the 31/2% 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. (See the
Statement of Additional Information for further discussion on the impact of
selecting an assumed net investment rate.)
CHARGES DEDUCTED DURING THE ANNUITY PERIOD
We make a daily deduction for mortality and expense risks from any
amounts held on a variable basis. Therefore, electing the nonlifetime option on
a variable basis will result in a deduction being made even though we assume no
mortality risk. We may also deduct a daily administrative charge from amounts
held under the variable options. This 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. (See "Charges and Deductions.")
DEATH BENEFIT PAYABLE DURING THE
ANNUITY PERIOD
The death benefit, if any, due when the Annuitant dies after Annuity
Payments have begun, will depend on the terms of the Contract and the Annuity
Option selected. If Option 1 or Option 4 was elected, Annuity Payments will
cease on the death of the Annuitant under Option 1 or the death of the
surviving Annuitant under Option 4.
If Lifetime Option 2 or Option 5 was elected and the death of the
Annuitant under Option 2, or the surviving Annuitant under Option 5, occurs
prior to the end of the guaranteed minimum payment period, we will continue
payments to the Beneficiary unless the Beneficiary elects a lump sum, provided
the Certificate Holder has not prohibited such an election in the Beneficiary
designation.
If the nonlifetime option was elected, and the Annuitant dies before all
payments are made, the value of any remaining payments will be paid to the
Beneficiary unless the Beneficiary elects a lump sum, provided the Certificate
Holder has not prohibited such an election in the Beneficiary designation.
When the Annuitant dies after Annuity Payments have begun and if there is
a death benefit payable under the Annuity option elected, the remaining value
must be distributed to the Beneficiary at least as rapidly as under the
original method of distribution.
Any lump-sum payment paid under the applicable lifetime or nonlifetime
Annuity options will be made within seven calendar days after acceptable proof
of death, and a request for payment are received at our Home Office. The value
of any death benefit proceeds will be determined as of the next Valuation Date
after we receive acceptable proof of death and a request for payment. Under
Options 2 and 5, such value will be reduced by any payments made after the date
of death.
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TAX STATUS
================================================================================
INTRODUCTION
The following provides a general discussion and is not intended as tax
advice. This discussion reflects the Company's understanding of current federal
income tax law. Such laws may change in the future, and it is possible that any
change could be retroactive (i.e., effective prior to the date of the change).
In addition, this discussion does not cover the potential application of
federal estate and gift tax laws, or state, local or any other tax law. The
Company makes no guarantee regarding the tax treatment of any contract or
transaction involving a Contract.
The Contract may be purchased on a non-tax qualified basis ("Nonqualified
Contract") or purchased and used in connection with certain retirement
arrangements entitled to special income tax treatment under Section 401(a),
403(b), 408(b) or 457 of the Code ("Qualified Contracts"). The ultimate effect
of federal income taxes on the amounts held under a Contract, on Annuity
payments, and on the economic benefit to the Contract Holder, Certificate
Holder or Beneficiary may depend upon the tax status of the individual
concerned. Any person concerned about these tax implications should consult a
competent tax adviser before initiating any transaction.
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, it will not be
taxed separately as a "regulated investment company" under the Code. Investment
income and realized 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 realized 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 interpretation 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 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 addition, 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 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 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 Distributions--Nonqualified Contracts: 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
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of distribution in effect at the time of the Certificate Holder'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 Account may be
continued with the surviving spouse as the new Certificate Holder. If the
Certificate Holder is a non-natural person, the surviving spouse who is the
"designated beneficiary" of the deceased Annuitant may continue the Account.
The Nonqualifed 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 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.
The discussion under "Taxation of Annuities" below is based on the
assumption that the Contract qualifies as an annuity contract for federal
income tax purposes.
Required Distributions--Qualified Contracts: The Code has required
distribution rules for Section 401(a), 403(b) and 457 Plans and Individual
Retirement Annuities. Other than for IRAs and for five-percent owners in other
Qualified Contracts distributions must generally begin by April 1 of the
calendar year following the calendar year in which the participant attains age
70-1/2 or retires, whichever occurs later. For IRA depositors and for
five-percent owners, minimum distributions must begin by April 1 of the
calendar year following the calendar year in which the participant attains age
70-1/2. Under 403(b) plans, if the Company maintains separate records,
distribution of amounts held as of December 31, 1986 must generally begin by
the end of the calendar year in which the participant attains age 75 (or
retires, whichever occurs later). However, special rules require that some or
all of the balance be distributed earlier if any distributions are taken in
excess of the minimum required amount.
To comply with these provisions, distributions must be in a form and
amount sufficient to satisfy the minimum distribution and minimum distribution
incidental death benefit rules specified in Section 401(a) (9) of the Code. In
general, annuity payments must be distributed over the participant's life or
the joint lives of the participant and beneficiary, or over a period not
greater than the participant's life expectancy or the joint life expectancies
of the participant and beneficiary. Also, any distribution under a Section 457
Plan payable over a period of more than one year must be made in substantially
nonincreasing amounts.
If the participant dies on or after the required beginning date for
minimum distributions, distributions to the beneficiary must be made at least
as rapidly as the method of distribution in effect at the time of the
participant's death. However, if the required minimum distribution is
calculated each year based on the participant's single life expectancy or the
joint life expectancies of the participant and beneficiary, the regulations for
Code Section 401(a)(9) provide specific rules for calculating the required
minimum distributions at the participant's death. For example, if ECO was
elected with the calculation based on the participant's single life expectancy,
and the life expectancy is recalculated each year, the recalculated life
expectancy becomes zero in the calendar year following the participant's death
and the entire remaining interest must be distributed to the beneficiary by
December 31 of the year following the participant's death. However, a spousal
beneficiary, other than under a Section 457 Plan, has certain rollover rights
which can only be exercised in the year of the participant's death. The rules
are complex and the participant should consult a tax adviser before electing
the method of calculation to satisfy the minimum distribution requirements.
If the participant dies before the required beginning date for minimum
distributions, the entire interest must be distributed by December 31 of the
calendar year containing the fifth anniversary of the date of the participant's
death. Alternatively, payments may be made over the life of the beneficiary or
over a period not extending beyond the life expectancy of the beneficiary, not
to exceed 15 years for a non-spousal
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beneficiary under a Section 457 Plan, provided the distribution begins to a
non-spouse beneficiary by December 31 of the calendar year following the
calendar year of the participant's death. If payments are made to a spousal
beneficiary, distributions must begin by the later of December 31 of the
calendar year following the calendar year of the death or December 31 of the
calendar year in which the participant would have attained age 70-1/2.
An exception applies for a spousal beneficiary under an Individual
Retirement Annuity. In lieu of taking a distribution under these rules, a
spousal Beneficiary may elect to treat the Account as his or her own IRA and
defer taking a distribution until his or her age 70-1/2. The surviving spouse is
deemed to have made such an election if the surviving spouse makes a rollover to
or from the Account or fails to take a distribution within the required time
period.
If the participant or beneficiary fails to take the required minimum
distribution for any tax year, a 50% excise tax is imposed on the required
amount that was not distributed.
TAXATION OF ANNUITY CONTRACTS
In General: Section 72 of the Code governs taxation of annuities in
general. The Company believes that a Certificate Holder under a Nonqualified
Contract who is a natural person generally is not taxed on increases in the
Account Value until distribution occurs by withdrawing all or part of such
Account Value (e.g., withdrawals or Annuity Payments under the Annuity Option
elected). The taxable portion of a distribution (in the form of a single sum
payment or an Annuity) is taxable as ordinary income.
Non-Natural Holders of a Nonqualified Contract: If the Certificate Holder
is not a natural person, a Nonqualified Contract is not treated as an annuity
for income tax purposes and the "income on the contract" for the taxable year
is currently taxable as ordinary income. "Income on the contract" is any
increase over the year in the Surrender Value, adjusted for Purchase Payments
made during the year, amounts previously distributed and amounts previously
included in income. There are some exceptions to the rule and a non-natural
person should consult with its tax adviser prior to purchasing this Contract. A
non-natural person exempt from federal income taxes should consult with its tax
adviser regarding treatment of "income on the contract" for purposes of the
unrelated business income tax. When the Certificate Holder is not a natural
person, the Annuitant is considered the Certificate Holder for the purpose of
meeting the required distribution-at-death rules. In addition, when the
Certificate Holder is not a natural person, a change in Annuitant is treated as
the death of the Certificate Holder.
The following discussion generally applies to Qualified Contracts or
Nonqualified Contracts owned by a natural person.
Withdrawals: In the case of a withdrawal under a Qualified Contract,
including withdrawals under SWO or ECO, the amount taxable is generally based
on the ratio of the "investment in the contract" to Account 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 a Qualified
Contract, the "investment in the contract" can be zero. Special tax rules may
be available for certain distributions from a Qualified Contract.
With respect to Nonqualified Contracts, partial withdrawals, including
withdrawals under SWO, are generally treated as taxable income to the extent
that the Account Value immediately before the withdrawal exceeds the
"investment in the contract" at that time. The Account 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 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 Account 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
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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.
Penalty Tax: In the case of a distribution pursuant to a Nonqualified
Contract, or a Qualified Contract other than a Qualified Contract sold in
conjunction with a Code Section 457 Plan, there may be imposed a federal income
tax penalty equal to 10% of the amount treated as taxable income.
In general, there is no penalty tax on distributions from a Nonqualified
Contract: (1) made on or after the date on which the taxpayer attains age
59-1/2; (2) made as a result of the death of the Certificate Holder; (3)
attributable to the taxpayer's total and permanent disability; (4) received in
substantially equal periodic payments (at least annually) over the life or life
expectancy of the taxpayer or the joint lives or joint life expectancies of the
taxpayer and a "designated beneficiary"; or (5) allocable to "investment in the
contract" before August 14, 1982.
If a distribution is made from a Qualified Contract sold in conjunction
with a Section 401(a) Plan or Section 403(b) Plan, the penalty tax will not
apply on distribution made when the participant (a) attains age 59-1/2, (b)
becomes permanently and totally disabled, (c) dies, (d) separates from service
with the plan sponsor at or after age 55, (e) rolls over the distribution
amount to another plan of the same type in accordance with the terms of the
Code, or (f) takes the distributions in substantially equal periodic payments
(at least annually) over his or her life or life expectancy or the joint lives
or joint life expectancies of the participant and plan beneficiary, provided
the participant has separated from service with the plan sponsor. In addition,
the penalty tax does not apply for the amount of a distribution equal to
unreimbursed medical expenses incurred by the participant that qualify for
deduction as specified in the Code. The Code may impose other penalty taxes in
other circumstances.
In general, the same exceptions described in the preceding paragraph will
apply to distributions made from an Individual Retirement Annuity. Beginning
January 1, 1997, the penalty tax is also waived and distributions made from an
IRA to pay for health insurance premiums for certain unemployed individuals.
Beginning January 1, 1998, the penalty tax is waived if the amounts withdrawn
are used for a qualified first-time home purchase or for higher education
expenses.
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. The assignment, pledge, or agreement to assign or pledge any
portion of the Account Value generally will be treated as a distribution. The
assignment or transfer of ownership of a Qualified Contract generally is not
allowed. 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.
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
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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.
CONTRACTS USED WITH CERTAIN RETIREMENT PLANS
Qualified Contracts in General. The Qualified Contract is designed for
use as an Individual Retirement Annuity or as a Contract used in connection
with certain employer sponsored retirement plans. The tax rules applicable to
participants and beneficiaries in Qualified Contracts 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.
The Company makes no attempt to provide more than general information
about use of the Contracts with the various types of retirement plans.
Participants and beneficiaries under Qualified Contracts may be subject to the
terms and conditions of the retirement plans themselves, in addition to the
terms and conditions of the Contract issued in connection with such plans. Some
retirement plans are subject to distribution and other requirements that are
not incorporated in the provisions of the Contracts. Purchasers are responsible
for determining that contributions, distributions and other transactions with
respect to the Contracts satisfy applicable laws, and should consult their
legal counsel and tax adviser regarding the suitability of the Contract.
Section 457 Plans. Code Section 457 provides for certain deferred
compensation plans. These plans may be offered with respect to service for
state governments, local governments, political subdivisions, agencies,
instrumentalities and certain affiliates of such entities, and tax exempt
organizations. These plans are subject to various restrictions on contributions
and distributions. The plans may permit participants to specify the form of
investment for their deferred compensation account. Prior to the August 20,
1996 enactment of the Small Business Job Protection Act of 1996 (the "Small
Business Act") compensation deferred under the plans, all property and rights
purchased with such amounts, and all income attributable to such amounts,
property or rights remained solely the property and rights of the employer
(without being restricted to the provision of benefits) subject only to the
claims of the employer's general creditors. For that reason, depending on the
terms of the particular plan, the employer may have been entitled to draw on
deferred amounts for purposes unrelated to its Section 457 plan obligations.
Under the Small Business Act, plans maintained by State or local
governments, their political subdivisions, agencies, instrumentalities and
certain affiliates will be required to hold all assets and income of the Plan
in trust for the exclusive benefit of plan participants and their
beneficiaries. For purposes of meeting the new requirement, custodial accounts
and annuity contracts are treated as trusts. State and local government plans
that were in existence on August 20, 1996 are allowed a transition period that
ends January 1, 1999 to comply with the new requirement.
In general, all amounts received under a Section 457 plan are taxable and
reportable to the IRS as taxable income. Also, all amounts except death benefit
proceeds are subject to federal income tax withholding as wages. If we make
payments directly to a participant on behalf of the employer as owner, we will
withhold federal taxes (and state taxes, if applicable).
The Code imposes a maximum limit on annual Purchase Payments which may be
excluded from the participant's gross income. Such limit is generally the
lesser of $7,500 (as adjusted to reflect changes in the cost of living) or
33-1/3% of the participant's includible compensation (25% of gross
compensation).
Section 401(a) Plans. Section 401(a) permits corporate employers to
establish various types of retirement plans for employees, and permits self-
employed individuals to establish various types of retirement plans for
themselves and for their employees. These retirement plans may permit the
purchase of the Contract to accumulate retirement savings under the plans.
Adverse tax consequences to the plan, to the participant or to both may result
if this Contract is assigned or transferred to an individual except to a
participant as a means to provide benefit payments.
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The Code imposes a maximum limit on annual Purchase Payments that may be
excluded from a participant's gross income. Such limit must be calculated under
the Plan by the employer in accordance with Section 415 of the Code. This limit
is generally the lesser of 25% of the participant's compensation or $30,000. In
addition, Purchase Payments will be excluded from a participant's gross income
only if the Section 401(a) Plan meets certain nondiscrimination requirements.
All distributions will be taxed as they are received unless the
distribution is rolled over to another plan of the same type or to an individual
retirement annuity/ account ("IRA") in accordance with the Code, or unless the
participant has made after-tax contributions to the plan, which are not taxed
upon distribution. The Code has specific rules that apply, depending on the type
of distribution received, if after-tax contributions were made.
In general, payments received by a beneficiary after the participant's
death are taxed in the same manner as if the participant had received those
payments, except that a limited death benefit exclusion may apply for payments
due to deaths that occurred on or before August 20, 1996. This exclusion no
longer applies to payments due to deaths occurring after August 20, 1996.
Section 403(b) Plans. Under Section 403(b), contributions made by public
school systems or nonprofit healthcare organizations and other Section
501(c)(3) tax exempt organizations to purchase annuity contracts for their
employees are generally excludable from the gross income of the employee.
In order to be excludable from taxable income, total annual contributions
made by the participant and his or her employer cannot exceed either of two
limits set by the Code. The first limit, under Section 415, is generally the
lesser of 25% of includible compensation or $30,000. The second limit, which is
the exclusion allowance under Section 403(b), is usually calculated according
to a formula that takes into account the participant's length of employment and
any pretax contributions to certain other retirement plans. These two limits
apply to the participant's contributions as well as to any contributions made
by the employer on behalf of the participant. There is an additional limit that
specifically limits salary reduction contributions to generally no more than
$9,500 annually (subject to indexing); a participant's own limit may be higher
or lower, depending on certain conditions. In addition, Purchase Payments will
be excluded from a participant's gross income only if the Plan meets certain
nondiscrimination requirements.
Section 403(b)(11) restricts the distribution under Section 403(b)
contracts of: (1) salary reduction contributions made after December 31, 1988;
(2) earnings on those contributions; and (3) earnings during such period on
amounts held as of December 31, 1988. Distribution of those amounts may only
occur upon death of the participant, attainment of age 59-1/2, separation from
service, total and permanent disability, or financial hardship. In addition,
income attributable to salary reduction contributions may not be distributed in
the case of hardship.
Individual Retirement Annuities and Simplified Employee Pension Plans.
Section 408 of the Code permits eligible individuals to contribute to an
individual retirement program known as an Individual Retirement Annuity,
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. Employers may establish Simplified Employee Pension (SEP) Plans and
contribute to an IRA owned by the employee. Purchasers of a Qualified Contract
for use with IRAs will be provided with supplemental information required by
the Internal Revenue Service. Purchasers should seek competent advice as to the
suitability of the Contract for use with IRAs.
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 may be provided the opportunity to elect not to have tax withheld
from distributions; however, certain distributions from Section 401(a) Plans
and Section 403(b) tax-deferred annuities are subject to mandatory 20% federal
income tax withholding. We will report to the IRS the taxable portion of all
distributions.
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MISCELLANEOUS
================================================================================
DISTRIBUTION
Aetna Life Insurance and Annuity Company ("ALIAC") will serve as the
principal underwriter for the securities sold by this Prospectus. ALIAC is
registered as a broker-dealer with the Securities and Exchange Commission
("SEC") and is a member of the National Association of Securities Dealers, Inc.
("NASD"). As principal underwriter, ALIAC will contract with one or more
registered broker-dealers, or with banks that may be acting as broker-dealers
without separate registration under the Securities Exchange Act of 1934
pursuant to legal and regulatory exceptions ("Distributors") to offer and sell
the Contracts. ALIAC and one or more of its affiliates may also sell the
Contracts directly. All individuals offering and selling the Contracts must
either be registered representatives of a broker-dealer, or employees of a bank
exempt from registration under the Securities Exchange Act of 1934, and must
also be licensed as insurance agents to sell variable annuity contracts.
From time to time, ALIAC may offer customers of certain broker-dealers
special guaranteed rates in connection with the Guaranteed Account offered
through the Contracts, and may negotiate different commissions for these
broker-dealers.
ALIAC may also contract with independent third party broker-dealers who
will act as wholesalers by assisting ALIAC in finding broker-dealers or banks
interested in acting as Distributors for the Contracts. These 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.
Payment of Commissions. Commissions will be paid to Distributors who sell
the Contracts. Distributors will be paid commissions up to an amount currently
equal to 6.5% of Purchase Payments. Pursuant to agreements between the
Underwriter and the Distributor, 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). At times the Company may offer certain Distributors
an enhanced commission for a limited period of time. In addition, some sales
personnel may receive various types of non-cash compensation such as special
sales incentives, including trips and educational and/or business seminars.
Supervisory and other management personnel of the Company may receive
compensation that will vary based on the relative profitability to the Company
of the funding options you select. Funding options that invest in Funds advised
by the Company or its affiliates are generally more profitable to the Company.
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.
DELAY OR SUSPENSION OF PAYMENTS
The Company reserves the right to suspend or postpone the date of payment
for any benefit or values (a) on any Valuation Date on which the New York Stock
Exchange ("Exchange") is closed (other than customary weekend and holiday
closings) or when trading on the Exchange is restricted; (b) when an emergency
exists, as determined by the SEC, so that disposal of securities held in the
Subaccounts is not reasonably practicable or it is not reasonably practicable
for the Company fairly to determine the value of the Subaccount's assets; or
(c) during such other periods as the SEC may by order permit for the protection
of investors. The conditions under which restricted trading or an emergency
exists shall be determined by the rules and regulations of the SEC.
PERFORMANCE REPORTING
From time to time, the Company may advertise different types of
historical performance for the Subaccounts of the Separate Account. The Company
may advertise the "standardized average annual total returns" of the
Subaccounts, calculated in a manner
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prescribed by the SEC, as well as the "non-standardized returns." "Standardized
average annual total returns" are computed according to a formula in which a
hypothetical investment of $1,000 is applied to the Subaccount and then related
to the ending redeemable values over the most recent one, five and ten-year
periods (or since inception, if less than ten years). Standardized returns will
reflect the reduction of all recurring charges during each period (e.g.,
mortality and expense risk charges, annual maintenance fees, administrative
charge and any applicable deferred sales charge). "Non-standardized returns"
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 monthly,
quarterly, year-to-date and three-year periods.
The Company may also advertise certain ratings, rankings or other
information related to the Company, the Subaccounts or the Funds. Further
details regarding performance reporting and advertising are described in the
Statement of Additional Information.
VOTING RIGHTS
Each Contract Holder may direct us in the voting of shares at
shareholders' meetings of the appropriate Funds(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 Account Values(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 Account.
Therefore, you may instruct the group Contract Holder how to direct the Company
to cast the votes for the portion or the value of valuation reserve
attributable to your 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 Account.
MODIFICATION OF THE CONTRACT
The Company may change the Contract as required by federal or state law.
In addition, the Company may, upon 30 days written notice to the Contract
Holder, make other changes to group Contracts that would apply only to
individuals who become Certificate Holders under that Contract after the
effective date of such changes. If the Contract Holder does not agree to a
change, the Company reserves the right to refuse to establish new Accounts
under the Contract. Certain changes will require the approval of appropriate
state or federal regulatory authorities.
TRANSFERS OF OWNERSHIP; ASSIGNMENT
Assignments or transfers of ownership of a Qualified Contract generally
are not allowed except as permitted under the Code, incident to a divorce. The
prohibition does not apply to a Qualified Contract sold in conjunction with (1)
a Section 457 deferred compensation plan, or (2) a Section 401(a) plan where
the Contract is owned by a trustee. We will accept assignments or transfers of
ownership of a Nonqualified Contract or a Qualified Contract where assignments
or transfers of ownership are not prohibited, 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" 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.
No assignment of a Contract will be binding on us unless made in writing
and sent to us at our Home Office. The Company will use reasonable procedures
to confirm that the assignment is authentic, including verification of
signature. If the Company fails to follow its procedures, it would be liable
for any losses to you directly resulting from the failure. Otherwise, we are
not
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responsible for the validity of any assignment. The rights of the Certificate
Holder and the interest of the Annuitant and any Beneficiary will be subject to
the rights of any assignee of record.
INVOLUNTARY TERMINATIONS
We reserve the right to terminate any Account with a value of $2,500 or
less immediately following a partial withdrawal (unless otherwise required by
State law). However, an Individual Retirement Annuity may only be closed out
when Purchase Payments have not been received for a 24-month period and the
paid-up annuity benefit at maturity would be less than $20 per month. If such
right is exercised, you will be given 90 days advance written notice. No
deferred sales charge will be deducted for involuntary terminations. The
Company does not intend to exercise this right in cases where the Account Value
is reduced to $2,500 or less solely due to investment performance.
LEGAL MATTERS AND PROCEEDINGS
The Company knows of no material legal proceedings pending to which the
Separate Account or the Company is a party or which would materially affect the
Separate Account. The validity of the securities offered by this Prospectus has
been passed upon by Counsel to the Company.
- --------------------------------------------------------------------------------
25
<PAGE>
CONTENTS OF THE
STATEMENT OF ADDITIONAL INFORMATION
================================================================================
The Statement of Additional Information contains more specific information
on the Separate Account and the Contract, as well as the financial statements
of the Separate Account and the Company. A list of the contents of the SAI is
set forth below:
General Information and History
Variable Annuity Account I
Offering and Purchase of Contracts
Performance Data
General
Average Annual Total Return Quotations
Annuity Payments
Sales Material and Advertising
Independent Auditors
Financial Statements of the Separate Account
Financial Statements of the Company
- --------------------------------------------------------------------------------
26
<PAGE>
APPENDIX
AICA GUARANTEED ACCOUNT
================================================================================
The AICA Guaranteed Account (the "Guaranteed Account") is a credited
interest option available during the Accumulation Period under the Contracts.
This Appendix is a summary of the Guaranteed Account and is not intended to
replace the Guaranteed Account prospectus. You should read the accompanying
Guaranteed Account prospectus carefully before investing.
The Guaranteed Account is a credited interest option in which we guarantee
stipulated rates of interest for stated periods of time on amounts directed to
the Guaranteed Account. A guaranteed rate is credited for the full 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 for one year. Guaranteed interest rates
will never be less than an annual effective rate of 3%.
During a deposit period, amounts may be applied to any of the available
guaranteed terms. A Guaranteed Term is the period of time specified by the
Company for which a specific Guaranteed Rate or Rates are offered on amounts
invested during a specific Deposit Period. Guaranteed Terms are made available
by the Company subject to the Company's terms and conditions. The Company may
offer more than one Guaranteed Term of the same duration and credit one with a
higher rate contingent upon use only with the Dollar Cost Averaging Program. If
amounts are applied to a Guaranteed Term which is credited with a higher rate
using dollar cost averaging and the dollar cost averaging is discontinued, the
amounts will be transferred to another Guaranteed Term of the same duration and
a market value adjustment ("MVA") will apply. The Company also reserves the
right to limit the number of Guaranteed Terms or the availability of certain
Guaranteed Terms. See the prospectus for the Guaranteed Account for further
details regarding Guaranteed Term. 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. 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.
Except for transfers from an available Guaranteed Term subject to the
Company's terms and conditions in connection with the Dollar Cost Averaging
Program, withdrawals taken in connection with an Estate Conservation or
Systematic Withdrawal distribution option, and, if approved by your state,
withdrawals for minimum distributions required by the Code for which the
deferred sales charge is waived, withdrawals or transfers from a guaranteed
term before the guaranteed term matures may be subject to an 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 the Certificate Holder receiving an amount which
is less than the amount paid into 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.
As a Guaranteed Term matures, assets accumulating under the Guaranteed
Account may be (a) transferred to a new Guaranteed Term, (b) transferred to
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 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 instructions 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
- --------------------------------------------------------------------------------
27
<PAGE>
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 distributed under the Estate Conservation or Systematic Withdrawal
Options; and (4) amounts transferred from an available Guaranteed Term in
connection with the Dollar Cost Averaging Program. However, if the Certificate
Holder discontinues the Dollar Cost Averaging Program and the amounts in it are
transferred in accordance with the Company's terms and conditions governing
Guaranteed Terms, an MVA will apply. 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 an MVA. However, only a positive aggregate MVA will be applied to
transfers made due to annuitization under one of the lifetime Annuity Options
described in item (2) above.
The Company reserves the right to limit the number of investment options
selected during the Accumulation Period. At this time there is no limit on the
number of options selected during the Accumulation Period, but the number of
investment options that may be selected at any one time by a Certificate Holder
presently is limited to 18. Under the Guaranteed Account, each guaranteed term
is counted as one funding option. If a guaranteed term matures, and is renewed
for the same term, it will not count as an additional investment option.
Transfers of the 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 Account.
By notifying us at least 30 days prior to the Annuity Date, you may elect
a variable annuity and have amounts that have been accumulating under the
Guaranteed Account transferred to one or more of the Subaccounts available
during the Annuity Period. 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.
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:
(1) the aggregate MVA amount (i.e., the sum of all market value adjusted amounts
calculated due to a withdrawal of amounts) which may be greater or less than
the Account Value of those amounts; or
(2) the applicable portion of the 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
Account Value of those amounts.
DISTRIBUTION
Aetna Life Insurance and Annuity Company ("ALIAC") is the principal under
writer of the Contract. ALIAC is registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 as a broker- dealer, and is
a member of the National Association of Securities Dealers, Inc.
From time to time, ALIAC may offer customers of certain broker-dealers
special guaranteed rates in connection with the Guaranteed Account offered
through the Contracts, and may negotiate different commissions for these
broker-dealers.
- --------------------------------------------------------------------------------
28
<PAGE>
Variable Annuity Account I
of
Aetna Insurance Company of America
Supplement for AICA Marathon Plus dated November 28, 1997 to
Statement of Additional Information dated May 1, 1997
The information in this supplement updates and amends the information
contained in the Statement of Additional Information dated May 1, 1997
for AICA Marathon Plus (the "Statement") and should be read with that
Statement. Capitalized terms are defined in the Statement or the
Prospectus.
[bullet] The following replaces the funds listed on page 3 of the
Statement:
Aetna Variable Fund
Aetna Income Shares
Aetna Variable Encore Fund
Aetna Investment Advisers Fund, Inc.
Aetna Ascent Variable Portfolio
Aetna Crossroads Variable Portfolio
Aetna Legacy Variable Portfolio
Aetna Variable Capital Appreciation Portfolio
Aetna Variable Growth Portfolio
Aetna Variable Index Plus Portfolio
Aetna Variable Small Company Portfolio
Calvert Responsibly Invested Balanced Portfolio
Fidelity VIP Equity-Income Portfolio
Fidelity VIP Growth Portfolio
Fidelity VIP High Income Portfolio
Fidelity VIP Overseas Portfolio
Fidelity VIP II Asset Manager Portfolio
Fidelity VIP II Contrafund Portfolio
Fidelity VIP II Index 500 Portfolio
Janus Aspen Aggressive Growth Portfolio
Janus Aspen Balanced Portfolio
Janus Aspen Flexible Income Portfolio
Janus Aspen Growth Portfolio
Janus Aspen Worldwide Growth Portfolio
MFS Total Return Series
MFS World Governments Series
Oppenheimer Capital Appreciation Fund
Oppenheimer Global Securities Fund
Oppenheimer Growth & Income Fund
Oppenheimer Strategic Bond Fund
Portfolio Partners MFS Emerging Equities Portfolio
Portfolio Partners MFS Research Growth Portfolio
Portfolio Partners MFS Value Equity Portfolio
Portfolio Partners Scudder International Growth
Portfolio
Portfolio Partners T. Rowe Price Growth Equity
Portfolio
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.
[bullet] The following is in addition to the chart found on page 5 of the
statement:
The table shown below reflects the average annual non-standardized total return
quotation figures for the periods ended December 31, 1996 for the Calvert
Responsibly Invested Balanced Fund Subaccount. The returns are based on the
maximum Subaccount and Contract charges as shown in the "Fee Table" of the
prospectus.
Standardized total returns are measured from the date the Fund was first made
available under the Separate Account. As of December 31, 1996 Calvert
Responsibly Invested Balanced Fund was not available under Variable Annuity
Account I; therefore, no standardized total returns are included herein.
<TABLE>
<CAPTION>
-----------------------------------------------------
Fund
Inception
($30 annual maintenance fee) NON-STANDARDIZED Date
- -------------------------------------------------------------------------------------
SUBACCOUNT 1 Year 3 Years 5 Years 10 Years
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Calvert Responsibly Invested 11.03% 10.67% 8.90% 9.55% 09/02/86
Balanced Fund
- -------------------------------------------------------------------------------------
</TABLE>
XSAI.59749-97
<PAGE>
VARIABLE ANNUITY ACCOUNT I
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
(1) Included in Part A:
Condensed Financial Information
(2) Included in Part B:*
Financial Statements of Variable Annuity Account I:
- Statement of Assets and Liabilities as of December 31,
1996
- Statements of Operations and Changes in Net Assets for the
years ended December 31, 1996 and December 31, 1995
- Notes to Financial Statements
- Independent Auditors' Report
Financial Statements of Depositor:
- Independent Auditors' Report
- Statements of Income for the years ended December 31,
1996, 1995 and 1994
- Balance Sheets for the years ended December 31, 1996 and
1995
- Statements of Changes in Shareholder's Equity for the
years ended December 31, 1996, 1995 and 1994
- Statements of Cash Flows for the years ended December 31,
1996, 1995 and 1994
- Notes to Financial Statements
* Incorporated by reference
(b) Exhibits
(1) Resolution of the Board of Directors of Aetna Insurance
Company of America establishing Variable Annuity Account I(1)
(2) Not Applicable
(3.1) Selling Agreement(1)
(3.2) Principal Underwriting Agreement(2)
(3.3) First Amendment dated April 22, 1996 to Principal Underwriting
Agreement(2)
(4.1) Variable Annuity Contract G-MP2(5/97)
(4.2) Variable Annuity Contract Certificate MP2CERT(5/97)
(4.3) Variable Annuity Contract IMP2(5/97)
(4.4) Variable Annuity Contract (G2-CDA-94(IR))(1)
(4.5) Variable Annuity Contract (G2-CDA-94(NQ))(1)
(4.6) Variable Annuity Contract (G-MP2(5/96))(3)
(4.7) Certificate of Group Annuity Coverage (MP2CERT(5/96))(3)
(4.8) Endorsements (MP2END(5/97)) and (I-MP2END(5/97)) to Contract
G-MP2(5/96) and Certificate MP2CERT(5/96)(3)
<PAGE>
(4.9) Endorsement (MP2END(9/97)) to Contract G-MP2(5/96) and
Certificate MP2CERT(5/96)
(4.10) Endorsement (IMP2END(9/97)) to Contract G-MP2 (5/96) and
Certificate MP2CERT(5/96)
(5) Variable Annuity Contract Application(1)
(6) Certificate of Incorporation of Aetna Insurance Company of
America(1)
(7) Not Applicable
(8.1) Fund Participation Agreement among Aetna Insurance Company of
America, Alger American Fund and Fred Alger Management, Inc.
dated August 30, 1995(4)
(8.2) Form of Fund Participation Agreement among Calvert Responsibly
Invested Balanced Portfolio, Calvert Asset Management Company,
Inc. and Aetna Insurance Company of America dated November,
1997
(8.3) Form of Service Agreement with Calvert Asset Management
Company, Inc. dated as of November, 1997
(8.4) Fund Participation Agreement by and among Insurance Management
Series, Federated Advisers and Aetna Insurance Company of
America dated July 1, 1994(5)
(8.5) Fund Participation Agreements among Aetna Insurance Company of
America, Variable Insurance Products Fund and Fidelity
Distributors Corporation dated October 20, 1995(4)
(8.6) Fund Participation Agreement among Aetna Insurance Company of
America, Variable Insurance Products Fund II and Fidelity
Distributors Corporation dated October 20, 1995(4)
(8.7) Fund Participation Agreement between Aetna Insurance Company
of America and Janus Aspen Series dated October 3, 1995(4)
(8.8) Fund Participation Agreement among MFS Variable Insurance
Trust, Aetna Insurance Company of America and Massachusetts
Financial Services Company dated April 30, 1996(4)
(8.9) First Amendment dated September 3, 1996 to Fund Participation
Agreement among MFS Variable Insurance Trust, Aetna Insurance
Company of America and Massachusetts Financial Services
Company dated April 30, 1996(6)
(8.10) Fund Participation Agreement between Aetna Insurance Company
of America, Oppenheimer Variable Account Funds and Oppenheimer
Fund, Inc. dated April 1, 1997(3)
(8.11) Service Agreement between Aetna Insurance Company of America
and Oppenheimer Funds, Inc. dated April 1, 1997(3)
(8.12) Administrative Service Agreement between Aetna Insurance
Company of America and Agency, Inc.(4)
(9) Opinion and Consent of Counsel
(10) Consent of Independent Auditors
(11) Not applicable
(12) Not applicable
(13) Schedule for Computation of Performance Data(1)
(14) Not applicable
(15.1) Power of Attorney(7)
(15.2) Certificate of Resolution Authorizing Signatures(1)
(27) Financial Data Schedule
<PAGE>
1. Incorporated by reference to Registration Statement on Form N-4 (File No.
33-59749), as filed electronically on June 1, 1995 (Accession No.
0000950109-95-002138).
2. Incorporated by reference to Registration Statement on Form S-2 (File No.
333-22723), as filed electronically on March 4, 1997 (Accession No.
0000950146-97-000292).
3. Incorporated by reference to Post-Effective Amendment No. 4 to Registration
Statement on Form N-4 (File No. 33-59749), as filed electronically on April
16, 1997 (Accession No. 0000950416-97-000620).
4. Incorporated by reference to Post-Effective Amendment No. 1 to Registration
Statement on Form N-4 (File No. 33-59749), as filed electronically on April
22, 1996 (Accession No. 0000912057-96-006719).
5. Incorporated by reference to Post-Effective Amendment No. 5 to Registration
Statement on Form N-4 (File No. 33-59749), as filed electronically on July
29, 1997 (Accession No. 0000950146-97-001105).
6. Incorporated by reference to Post-Effective Amendment No. 3 to Registration
Statement on Form N-4 (File No. 33-59749), as filed electronically on
September 16, 1996 (Accession No. 0000912057-96-020392).
7. The power of attorney for Thomas J. McInerney is incorporated by reference
to Post-Effective Amendment No. 2 to Registration Statement on Form S-2
(File No. 333-22723), as filed electronically on November 18, 1997
(Accession No. 0000950146-97-0O1763). The power of attorney for all other
signatories is incorporated by reference to Post-Effective Amendment No. 5
to Registration Statement on Form N-4 (File No. 33-59749), as filed
electronically on July 29, 1997 (Accession No. 0000950146-97-001105).
<PAGE>
Item 25. Directors and Officers of the Depositor
Name and Principal
Business Address* Positions and Offices with Depositor
- ------------------- -------------------------------------
Thomas J. McInerney Director and President
Deborah Koltenuk Director, Vice President and Treasurer, Corporate
Controller
Christine C. Marcks Director and Vice President
Shaun P. Mathews Director and Senior Vice President
Maria F. McKeon Corporate Secretary and Counsel
Alastair G. Longley-Cook Vice President and Corporate Actuary
*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 Item 26 of Post-Effective Amendment
No. 31 to the Registration Statement on Form N-4 (File No. 33-34370), as filed
electronically on November 26, 1997 (Accession No. 0000950146-97-001802).
Item 27. Number of Contract Owners
As of October 31, 1997, there were 12,638 individuals holding interests
in variable annuity contracts funded through Variable Annuity Account I.
Item 28. Indemnification
Reference is hereby made to Section 33-771(f) of the Connecticut General
Statutes ("C.G.S.") regarding indemnification of directors and Section 33-776(4)
regarding indemnification of officers, employees and agents of Connecticut
corporations. These statutes provide in general that Connecticut corporations
incorporated prior to January 1, 1997 shall indemnify their officers, directors,
employees and agents against "liability" (defined as the obligation to pay a
judgment, settlement, penalty, fine, excise tax in the case of an employee
benefit plan or reasonable expenses incurred with respect to a proceeding). In
the case of a proceeding by or in the right of the corporation, indemnification
is limited to reasonable expenses incurred in connection with the proceeding
against the corporation to which the individual was named a party. The
corporation's obligation to provide such indemnification does not apply unless
(1) the individual has met the standard of conduct set forth in Section 33-771;
and (2) a determination is made (by
<PAGE>
majority vote of a quorum of the board of directors who were not parties to the
proceeding, or if a quorum cannot be obtained, by a committee of the board
selected as described in Section 33-775(b)(2); by special legal counsel selected
by the board of directors or members thereof as described in Section
33-775(b)(3); by shareholders) that the individual met the standard set forth in
Section 33-771; 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. Also, unless limited by its Certificate of Incorporation, a
corporation must indemnify an individual who was wholly successful on the merits
or otherwise against reasonable expenses incurred by him in connection with a
proceeding to which he was a party because of his relationship as director,
officer, employee or agent of the corporation.
The statute does specifically authorize a corporation to procure indemnification
insurance on behalf of an individual who is or was a director, officer, employer
or agent of the corporation. Consistent with the statute, Aetna Inc. 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.
Item 29. Principal Underwriters
(a) In addition to serving as the principal underwriter for the Registrant,
Aetna Life Insurance and Annuity Company (Aetna) also acts as the
investment adviser, only, for Aetna Series Fund, Inc. and the principal
underwriter and investment adviser for Portfolio Partners, Inc., Aetna
Variable Encore Fund, Aetna Variable Fund, Aetna Generation Portfolios,
Inc., Aetna Income Shares, Aetna Investment Advisers Fund, Inc., Aetna
GET Fund and Aetna Variable Portfolios, Inc. (all management investment
companies registered under the Investment Company Act of 1940 (1940
Act)). Additionally, Aetna also acts as the principal underwriter and
depositor for Variable Life Account B of Aetna, Variable Annuity
Account B of Aetna, Variable Annuity Account C of Aetna and Variable
Annuity Account G of Aetna (separate accounts of Aetna registered as
unit investment trusts under the 1940 Act).
(b) Directors and Officers of the Underwriter
Name and Principal
Business Address* Positions and Offices with Underwriter
- ------------------- ---------------------------------------
Thomas J. McInerney Director and President
Timothy A. Holt Director, Senior Vice President and Chief Financial
Officer
Christopher J. Burns Director and Senior Vice President
J. Scott Fox Director and Senior Vice President
John Y. Kim Director and Senior Vice President
<PAGE>
Name and Principal
Business Address* Positions and Offices with Underwriter
- ------------------- ---------------------------------------
Shaun P. Mathews Director and Senior Vice President
Deborah Koltenuk Vice President and Treasurer, Corporate Controller
Frederick D. Kelsven Vice President and Chief Compliance Officer
Kirk P. Wickman Vice President, General Counsel and Corporate Secretary
* 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 accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the rules under it relating to the securities
described in and issued under this Registration Statement are located at the
home office of the Depositor 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) The Company hereby represents that it is relying upon and complies with
the provisions of Paragraphs (1) through (4) of the SEC Staff's
No-Action Letter dated November 22, 1988 with respect to language
covering withdrawal restrictions applicable to plans established
pursuant to Section 403(b) of the Internal Revenue Code, See American
Counsel of Life Insurance; SEC No-Action Letter, [1989 Transfer Binder]
Fed. SEC. L.Rep. (CCH) 78,904 at 78,523 (November 22, 1988).
(e) 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.
(f) Aetna Insurance Company of America represents that the fees and charges
deducted under the contracts covered by this registration statement, in
the aggregate, are reasonable in relation to the services rendered, the
expenses expected to be incurred, and the risks assumed by the
insurance company.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant, Variable Annuity Account I of Aetna Insurance Company
of America, certifies that it meets the requirements of Securities Act Rule
485(b) for effectiveness of this Post-Effective Amendment to its Registration
Statement on Form N-4 (File No. 33-59749 ) and has duly caused this
Post-Effective Amendment to be signed on its behalf in the City of Hartford, and
State of Connecticut, on the 26th day of November, 1997.
VARIABLE ANNUITY ACCOUNT I OF
AETNA INSURANCE COMPANY OF AMERICA
(Registrant)
By: AETNA INSURANCE COMPANY OF AMERICA
(Depositor)
By /s/ Thomas J. McInerney*
------------------------------------
Thomas J. McInerney
President
As required by the Securities Act of 1933, this Post-Effective Amendment
No. 6 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
Signature Title Date
- ---------- ------- ------
/s/ Thomas J. McInerney* Director and President )
- ----------------------------------- (principal executive officer) )
Thomas J. McInerney )
)
)
/s/ Deborah Koltenuk* Director, Vice President )
- ----------------------------------- and Treasurer, Corporate )
Deborah Koltenuk Controller (principal )
accounting and )
financial officer) ) November
) 26, 1997
)
)
/s/ Christine C. Marcks* Director )
- ----------------------------------- )
Christine C. Marcks )
)
)
/s/ Shaun P. Mathews* Director )
- ----------------------------------- )
Shaun P. Mathews )
/s/ Julie E. Rochmore
By: -----------------------------
Julie E. Rockmore
*Attorney-in-Fact
<PAGE>
VARIABLE ANNUITY ACCOUNT I
EXHIBIT INDEX
Exhibit No. Exhibit Page
99-B.1 Resolution of the Board of Directors of Aetna Insurance *
Company of America establishing Variable Annuity Account I
99-B.3.1 Selling Agreement *
99-B.3.2 Principal Underwriting Agreement *
99-B.3.3 First Amendment dated April 22, 1996 to Principal *
Underwriting Agreement
99-B.4.1 Variable Annuity Contract G-MP2(5/97) ______
99-B.4.2 Variable Annuity Contract Certificate MP2CERT(5/97) ______
99-B.4.3 Variable Annuity Contract IMP2(5/97) ______
99-B.4.4 Variable Annuity Contract (G2-CDA-94(IR)) *
99-B.4.5 Variable Annuity Contract (G2-CDA-94(NQ)) *
99-B.4.6 Variable Annuity Contract (G-MP2(5/96)) *
99-B.4.7 Certificate of Group Annuity Coverage (MP2CERT(5/96)) *
99-B.4.8 Endorsements (MP2END(5/97)) and (I-MP2END(5/97)) to *
Contract G-MP2(5/96) and Certificate MP2CERT(5/96)
99-B.4.9 Endorsement (MP2END(9/97)) to ______
Contract G-MP2(5/96) and Certificate MP2CERT(5/96)
99-B.4.10 Endorsement (IMP2END(9/97)) to ______
Contract G-MP2(5/96) and Certificate MP2CERT(5/96)
99-B.5 Variable Annuity Contract Application *
99-B.6 Certificate of Incorporation and By-laws of Aetna *
Insurance Company of America
99-B.8.1 Fund Participation Agreement among Aetna Insurance Company *
of America, Alger American Fund and Fred Alger Management,
Inc. dated August 30, 1995
*Incorporated by reference
<PAGE>
Exhibit No. Exhibit Page
99-B.8.2 Form of Fund Participation Agreement among Calvert
Responsibly Invested Balanced Portfolio, Calvert Asset
Management Company, Inc. and Aetna Insurance Company of
America dated November, 1997 ______
99-B.8.3 Form of Service Agreement with Calvert Asset Management
Company, Inc. dated as of November, 1997 ______
99-B.8.4 Fund Participation Agreement by and among Insurance *
Management Series, Federated Advisers and Aetna Insurance
Company of America dated July 1, 1994
99-B.8.5 Fund Participation Agreements among Aetna Insurance *
Company of America, Variable Insurance Products Fund and
Fidelity Distributors Corporation dated October 20, 1995
99-B.8.6 Fund Participation Agreement among Aetna Insurance Company *
of America, Variable Insurance Products Fund II and
Fidelity Distributors Corporation dated October 20, 1995
99-B.8.7 Fund Participation Agreement between Aetna Insurance *
Company of America and Janus Aspen Series dated October 3,
1995
99-B.8.8 Fund Participation Agreement among MFS Variable Insurance *
Trust, Aetna Insurance Company of America and
Massachusetts Financial Services Company dated April 30,
1996
99-B.8.9 First Amendment dated September 3, 1996 to Fund *
Participation Agreement among MFS Variable Insurance
Trust, Aetna Insurance Company of America and
Massachusetts Financial Services Company dated April 30,
1996
99-B.8.10 Fund Participation Agreement between Aetna Insurance *
Company of America, Oppenheimer Variable Account Funds and
Oppenheimer Fund, Inc. dated April 1, 1997
99-B.8.11 Service Agreement between Aetna Insurance Company of *
America and Oppenheimer Funds, Inc. dated April 1, 1997
99-B.8.12 Administrative Service Agreement between Aetna Insurance *
Company of America and Agency, Inc.
99-B.9 Opinion and Consent of Counsel ______
99-B.10 Consent of Independent Auditors ______
*Incorporated by reference
<PAGE>
Exhibit No. Exhibit Page
99-B.13 Schedule for Computation of Performance Data *
99-B.15.1 Power of Attorney *
99-B.15.2 Certificate of Resolution Authorizing Signatures *
27 Financial Data Schedule ______
*Incorporated by reference
-------------------------------------------------
Aetna Insurance Company of America
Home Office: 151 Farmington Avenue
P.O. Box 30670
Hartford, Connecticut 06150-0670
(800) 531-4547
You may call the toll-free number shown above for
answers to questions or to resolve a complaint.
Aetna Insurance Company of America, a stock
company, herein called Aetna, agrees to pay the
benefits stated in this Contract.
<TABLE>
<CAPTION>
Specifications
- ----------------------------------------------------------------------------------------------
<S> <C>
Plan
SPECIMEN
- ----------------------------------------------------------------------------------------------
Type of Plan
SPECIMEN
- ----------------------------------------------------------------------------------------------
Contract Holder
SPECIMEN
- ----------------------------------------------------------------------------------------------
Contract Number
SPECIMEN
- ----------------------------------------------------------------------------------------------
Effective Date
SPECIMEN
- ----------------------------------------------------------------------------------------------
This Contract is delivered in SPECIMEN and is subject to the laws of that jurisdiction
</TABLE>
The variable features of the Group Contract are described in parts III and IV.
Right to Cancel
- --------------------------------------------------------------------------------
The Group Contract Holder may cancel this Contract within 10 days by returning
it to the agent from whom it was purchased, or to Aetna at the address shown
above. Within seven days of receiving the Contract at its home office, Aetna
will return the amount of Certificate Holder Purchase Payment(s) received, plus
any increase, or minus any decrease, on the amount, if any, allocated to the
Separate Account fund(s).
This page and the pages that follow constitute the entire Contract.
Signed at the home office on the Effective Date.
/s/ Dan Kearney /s/ Maria F. McKeon
President Secretary
Group Variable, Fixed, or Combination Annuity Contract
Nonparticipating
G-MP2(5/97)
<PAGE>
ALL PAYMENTS AND VALUES PROVIDED BY THE 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.
G-MP2(5/97)
2
<PAGE>
Specifications
- --------------------------- ---------------------------------------------------
Guaranteed There is a guaranteed interest rate for Purchase
Interest Rate Payment(s) held in the AG Account. (See Contract
Schedule I).
- --------------------------- ---------------------------------------------------
Deductions from There will be deductions for mortality and expense
the Separate risks and administrative fees. (See Contract
Account Schedule I and II).
- --------------------------- ---------------------------------------------------
Deduction from Purchase Purchase Payment(s) are subject to a deduction for
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. THEREFORE, IT IS IMPORTANT THAT
YOU READ THIS CONTRACT CAREFULLY.
G-MP2(5/97)
3
<PAGE>
Contract Schedule I
Accumulation Period
<TABLE>
<CAPTION>
Separate Account
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Separate Account: Variable Annuity Account I
Charges to Separate Account: A daily charge is deducted from any portion of 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% |
|_ _|
AICA Guaranteed Account (AG Account)
- ------------------------------------------------------------------------------------------------------------------------------------
Minimum Guaranteed Interest Rate: [3.0%] (effective annual rate of return)
Separate Account and AG Account
- ------------------------------------------------------------------------------------------------------------------------------------
Transfers: An unlimited number of Transfers are allowed 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].
Annual Waiver of Surrender Fee: As provided in 3.14 (d), the amount that may be withdrawn without a surrender fee cannot
exceed [10%] of the Current Value calculated on the date Aetna receives a surrender
request in good order at its Home Office.
Surrender Fee: For each surrender, the Surrender Fee will be determined as follows:
Surrender Fee
Length of Time from Deposit of (as percentage of
Net 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% |
|_ _|
G-MP2(5/97)-1
4
<PAGE>
Contract Schedule I (Continued)
Accumulation Period
Separate Account and AG Account (Cont'd)
- ------------------------------------------------------------------------------------------------------------------------------------
Systematic Withdrawal Option (SWO): The specified payment or specified percentage may not be greater than [10%] of the
Account's Current Value at time of election.
</TABLE>
See 1. GENERAL DEFINITIONS for explanations.
G-MP2(5/97)-1
5
<PAGE>
Contract Schedule II
Accumulation Period
<TABLE>
<CAPTION>
Separate Account
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Charges to Separate Account: A daily charge at an annual effective rate of [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 Annual Net If a Variable Annuity is chosen, an assumed annual net return rate of [5.0%] may be
Return Rate: 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: [3.0%] (effective annual rate of return)
</TABLE>
See 1. GENERAL DEFINITIONS for explanations.
G-MP2(5/97)-1
6
<PAGE>
Contract Schedule I
Accumulation Period
<TABLE>
<CAPTION>
Separate Account
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Separate Account: Variable Annuity Account I
Charges to Separate Account: A daily charge is deducted from any portion of 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% |
|_ _|
AICA Guaranteed Account (AG Account)
- ------------------------------------------------------------------------------------------------------------------------------------
Minimum Guaranteed Interest Rate: [3.0%] (effective annual rate of return)
Separate Account and AG Account
- ------------------------------------------------------------------------------------------------------------------------------------
Transfers: An unlimited number of Transfers are allowed 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].
Annual Waiver of Surrender Fee: As provided in 3.14 (d), the amount that may be withdrawn without a surrender fee cannot
exceed [10%] of the Current Value calculated on the date Aetna receives a surrender
request in good order at its Home Office.
Surrender Fee: For each surrender, the Surrender Fee will be determined as follows:
Surrender Fee
Length of Time from Deposit of (as percentage of
Net Purchase Payment (Years) Net Purchase Payment)
__ _
| Less than 1 year 3% |
| More than 1 but less than 2 years 2% |
| More than 2 but less than 3 years 1% |
| More than 3 years 0% |
|_ _|
G-MP2(5/97)-2
4
<PAGE>
Contract Schedule I (Continued)
Accumulation Period
Separate Account and AG Account (Cont'd)
- ------------------------------------------------------------------------------------------------------------------------------------
Systematic Withdrawal Option (SWO): The specified payment or specified percentage may not be greater than [10%] of the
Account's Current Value at time of election.
</TABLE>
See 1. GENERAL DEFINITIONS for explanations.
G-MP2(5/97)-2
5
<PAGE>
Contract Schedule II
Annuity Period
<TABLE>
<CAPTION>
Separate Account
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Charges to Separate Account: A daily charge at an annual effective rate of [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 Annual Net If a Variable Annuity is chosen, an assumed annual net return rate of [5.0%] may be
Return Rate: 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: [3.0%] (effective annual rate of return)
</TABLE>
See 1. GENERAL DEFINITIONS for explanations.
G-MP2(5/97)-2
6
<PAGE>
Contract Schedule I
Accumulation Period
<TABLE>
<CAPTION>
Separate Account
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Separate Account: Variable Annuity Account I
Charges to Separate Account: A daily charge is deducted from any portion of the Current Value allocated to the
Separate Account. The deduction is the daily equivalent of the annual effective
percentage shown in the following chart:
__ _
Mortality Risk Charge | 0.35% |
Expense Risk Charge | 0.90% |
-----
Total Separate Account | |
Charges | 1.25% |
|_ _|
AICA Guaranteed Account (AG Account)
- ------------------------------------------------------------------------------------------------------------------------------------
Minimum Guaranteed Interest Rate: [3.0%] (effective annual rate of return)
Separate Account and AG Account
- ------------------------------------------------------------------------------------------------------------------------------------
Transfers: An unlimited number of Transfers are allowed 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 $5,000 or more
on the date the Maintenance Fee is to be deducted, the Maintenance Fee is [$0].
Annual Waiver of Surrender Fee: As provided in 3.14 (d), the amount that may be withdrawn without a surrender fee cannot
exceed [10%] of the Current Value calculated on the date Aetna receives a surrender
request in good order at its Home Office.
Surrender Fee: The Surrender Fee does not apply to this Contract.
Systematic Withdrawal Option (SWO): The specified payment or specified percentage may not be greater than [10%] of the
Account's Current Value at time of election.
</TABLE>
See 1. GENERAL DEFINITIONS for explanations.
G-MP2(5/97)-3 4
<PAGE>
Contract Schedule II
Annuity Period
<TABLE>
<CAPTION>
Separate Account
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Charges to Separate Account: A daily charge at an annual effective rate of [l.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 Annual Net If a Variable Annuity is chosen, an assumed annual net return rate of [5.0%] may be
Return Rate: 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: [3.0%] (effective annual rate of return)
</TABLE>
See 1. GENERAL DEFINITIONS for explanations.
G-MP2(5/97)-3
5
<PAGE>
TABLE OF CONTENTS
Page
I. GENERAL DEFINITIONS
- -------------------------------------------------------------------------------
1.01 Account.............................................................8
1.02 Accumulation Period.................................................8
1.03 Adjusted Current Value..............................................8
1.04 AICA Guaranteed Account (AG Account)................................8
1.05 Annuitant...........................................................8
1.06 Annuity.............................................................8
1.07 Beneficiary.........................................................8
1.08 Certificate Holder..................................................8
1.09 Code................................................................8
1.10 Contract............................................................8
1.11 Contract Holder.....................................................8
1.12 Current Value.......................................................9
1.13 Deposit Period......................................................9
1.14 Dollar Cost Averaging...............................................9
1.15 Fixed Annuity.......................................................9
1.16 Fund(s).............................................................9
1.17 General Account.....................................................9
1.18 Guaranteed Rates -- AG Account......................................9
1.19 Guaranteed Term....................................................10
1.20 Guaranteed Term(s) Groups..........................................10
1.21 Maintenance Fee....................................................10
1.22 Market Value Adjustment (MVA)......................................10
1.23 Matured Term Value.................................................10
1.24 Matured Term Value Transfer........................................10
1.25 Maturity Date......................................................10
1.26 Net Purchase Payment(s)............................................10
1.27 Nonunitized Separate Account.......................................10
1.28 Purchase Payment(s)................................................11
1.29 Reinvestment.......................................................11
1.30 Separate Account...................................................11
1.31 Surrender Value....................................................11
1.32 Transfers..........................................................11
1.33 Valuation Period (Period)..........................................11
1.34 Variable Annuity...................................................11
II. GENERAL PROVISIONS
- -------------------------------------------------------------------------------
2.01 Change of Contract.................................................12
2.02 Change of Fund(s)..................................................13
2.03 Nonparticipating Contract..........................................13
2.04 Payments and Elections.............................................13
2.05 State Laws.........................................................13
2.06 Control of Contract................................................13
2.07 Designation of Beneficiary.........................................14
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<PAGE>
Page
2.08 Misstatements and Adjustments......................................14
2.09 Incontestability...................................................14
2.10 Grace Period.......................................................14
2.11 Individual Certificates............................................14
III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS
- ------------------------------------------------------------------------------
3.01 Net Purchase Payment...............................................14
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 AG Account
During the Accumulation Period....................................17
3.08 Notice to the Contract Holder......................................18
3.09 Loans..............................................................18
3.10 Systematic Distribution Options....................................18
3.11 Death Benefit Amount...............................................19
3.12 Death Benefit Options Available to Beneficiary.....................20
3.13 Liquidation of Surrender Value.....................................22
3.14 Surrender Fee......................................................22
3.15 Payment of Surrender Value.........................................23
3.16 Payment of Adjusted Current Value..................................23
IV. ANNUITY PROVISIONS
- --------------------------------------------------------------------------------
4.01 Choices.............................................................24
4.02 Terms of Annuity Options............................................24
4.03 Death of Annuitant/Beneficiary......................................26
4.04 Fund(s) Annuity Units -- Separate Account...........................27
4.05 Fund(s) Annuity Unit Value -- Separate Account......................27
4.06 Annuity Net Return Factor(s) -- Separate Account....................27
4.07 Annuity Options.....................................................28
G-MP2(5/97)
7
<PAGE>
<TABLE>
<CAPTION>
I. GENERAL DEFINITIONS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
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 AG Account MVA, if applicable. (See
1.22)
1.04 AICA Guaranteed Account An accumulation option where Aetna guarantees stipulated rate(s) of interest for specified periods
(AG Account): of time. All assets of Aetna, including amounts in the Nonunitized Separate Account, are available
to meet the guarantees under the AG Account.
1.05 Annuitant: The person whose life is measured for purposes of the guaranteed death benefit and the duration of
Annuity payments under this Contract.
1.06 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).
1.07 Beneficiary: The individual or estate entitled to receive any death benefit under the Contract. If the Contract
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.
1.08 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 Holder. Joint Certificate Holders have joint
ownership rights and both must authorize exercising any ownership rights unless Aetna allows
otherwise.
1.09 Code: The Internal Revenue Code of 1986, as it may be amended from time to time.
1.10 Contract: This agreement between Aetna and the Contract Holder.
1.11 Contract Holder: The entity to which the Contract is issued.
G-MP2(5/97)
8
<PAGE>
1.12 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 AG 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.
1.13 Deposit Period: A day, 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/or Reinvestments may be
allocated to one or more AG Account Guaranteed Terms. Aetna reserves the right to shorten or to
extend the Deposit Period.
During a Deposit Period, Aetna may offer any number of Guaranteed Terms and more than one
Guaranteed Term of the same duration may be offered.
1.14 Dollar Cost Averaging: A program that permits the Contract Holder to systematically transfer amounts from any of the
Funds or an available AG Account Guaranteed Term to any of the Funds. Aetna reserves the right to
establish terms and conditions governing Dollar Cost Averaging. Dollar Cost Averaging is not
available when a SDO is in effect.
1.15 Fixed Annuity: An Annuity with payments that do not vary in amount.
1.16 Fund(s): The open-end management investment companies (mutual funds) in which the Separate Account invests.
1.17 General Account: The Account holding the assets of Aetna, other than those assets held in Aetna's separate
accounts.
1.18 Guaranteed Rates -- AG Aetna will declare the interest rate(s) applicable to a specific Guaranteed Term at the start of
Account: the Deposit Period for that Guaranteed Term. The rate(s) are guaranteed by Aetna for the period
beginning with the first day of the Deposit Period and ending on the Maturity Date. Guaranteed
Rates are credited beginning with the date of allocation. 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.
G-MP2(5/97)
9
<PAGE>
1.19 Guaranteed Term: The period of time specified by Aetna for which a specific Guaranteed Rate(s) is offered on
amounts invested during a specific Deposit Period. Guaranteed Terms are made available subject to
Aetna's terms and conditions, including, but not limited to, Aetna's right to restrict allocations
to new Net Purchase Payments (such as by prohibiting Transfers into a particular Guaranteed Term
from any other Guaranteed Term or from any of the Funds, or by prohibiting Reinvestment of a
Matured Term Value to a particular Guaranteed Term. More than one Guaranteed Term of the same
duration may be offered during a Deposit Period.
1.20 Guaranteed Term(s) All AG Account Guaranteed Term(s) of the same duration (from the close of the Deposit Period until
Groups: the designated Maturity Date).
1.21 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.
1.22 Market Value Adjustment An adjustment that may apply to an amount withdrawn or transferred from an AG Account Guaranteed
(MVA): 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.
1.23 Matured Term Value: The amount payable on an AG Account Guaranteed Term's Maturity Date.
1.24 Matured Term Value During the calendar month following an AG Account Maturity Date, the Certificate Holder may notify
Transfer: 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 AG 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.
1.25 Maturity Date: The last day of an AG Account Guaranteed Term.
1.26 Net Purchase Payment(s): The Purchase Payment less premium taxes, as applicable.
1.27 Nonunitized Separate A separate account set up by Aetna under Title 38, Section 38a-433, of the Connecticut General
Account: Statutes, that holds assets for AG 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.
G-MP2(5/97)
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<PAGE>
1.28 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.
1.29 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 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.
1.30 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.
1.31 Surrender Value: The amount payable by Aetna upon the surrender of any portion of an Account.
1.32 Transfers: The movement of invested amounts among the available Fund(s) and/or any AG Account Guaranteed Term
made available subject to terms and conditions established by Aetna during the Accumulation Period
or, during the Annuity Period, among the available Funds under a Variable Annuity.
1.33 Valuation Period The period of time for which a Fund determines its net asset value, usually from 4:15 p.m. Eastern
(Period): 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.
1.34 Variable Annuity: An Annuity with payments that vary with the net investment results of one or more Funds held under
the Separate Account.
G-MP2(5/97)
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<PAGE>
II. GENERAL PROVISIONS
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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. This
applies to an initial Purchase Payment to establish a new Account or to subsequent Purchase
Payments in existing Accounts under the Contract. No advance notice will be given to the Contract
Holder or Certificate Holder.
Aetna may make any change that affects the AG 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.
Any change that effects 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 (1.26)
(b) AG Account Guaranteed Rate (1.18)
(c) Net Return Factor(s) -- Separate Account (3.04)
(d) Current Value (1.12)
(e) Surrender Value (1.31)
(f) Fund(s) Annuity Unit Value -- Separate Account (4.05)
(g) Annuity options (4.07)
(h) Fixed Annuity Interest Rates (4.01)
(i) Transfers (1.32).
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.
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2.02 Change of Fund(s): The assets of the Separate Account are segregated by Fund. If the shares of any Fund are no longer
available for investment by the Separate Account or if in our judgment, further investment in such
shares should become inappropriate in view of the purpose of the Contract, Aetna may cease to make
such Fund shares available for investment under the Contract prospectively, or Aetna may
substitute shares of another Fund for shares already acquired. Aetna may also, from time to time,
add additional Funds. Any elimination, substitution or addition of Funds will be done in
accordance with applicable state and federal securities laws. Aetna reserves the right to
substitute shares of another Fund for shares already acquired without a proxy vote.
2.03 Nonparticipating The Contract Holder, Certificate Holders or Beneficiaries will not have a right to share in the
Contract: 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, or at the death of the first Certificate
Holder if the Account is owned jointly, 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 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.
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. If the Account is owned jointly, both 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.
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2.06 Control of Contract The Contract is not subject to the claims of any creditors of the Contract Holder or the
(Cont'd): 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.
2.07 Designation of Each Certificate Holder shall name his or her Beneficiary. If the Account is owned jointly, both
Beneficiary: 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. If the Account is owned jointly, at the
death of one joint Certificate Holder, the survivor will be deemed the Beneficiary; any other
Beneficiary on record will be deemed a contingent Beneficiary.
2.08 Misstatements and If Aetna finds the age of any Annuitant to be misstated, the correct facts will be used to adjust
Adjustments: payments.
2.09 Incontestability: Aetna cannot cancel this Contract because of any error of fact.
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 3.16).
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 reserves the right to pay
premium taxes when due and deduct the amount from the Current Value when we pay the tax or at a
later date.
Each Net Purchase Payment will be allocated, as directed by the Certificate Holder among:
(a) AG Account Guaranteed Terms made available subject to terms and conditions established by
Aetna; and
(b) The Fund(s) in which the Separate Account invests.
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3.01 Net Purchase Payment For each Net Purchase Payment, the Certificate Holder shall tell Aetna the percentage of each
(Cont'd): Purchase Payment to allocate to any available AG Account Guaranteed Terms and/or each Fund. Unless
different allocation instructions are received for any subsequent Net Purchase Payment, the
allocation will be the same as for the initial Net Purchase Payment. 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 Certificate Holder.
Account:
Aetna will declare from time to time the acceptability and the minimum amount for additional
Purchase Payments.
3.03 Fund(s) Record Units -- The portion of the Net Purchase Payment(s) applied to each Fund under the Separate Account will
Separate Account: 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 all Separate Account record units for any Fund.
Separate Account:
The net return factors 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.
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3.05 Fund Record Unit Value A Fund record unit value is computed by multiplying the net return factors for the current
-- Separate Account: 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 Adjustment: An MVA will apply to any withdrawal from the AG Account before the end of a Guaranteed Term when
the withdrawal is:
(a) A Transfer; except for Transfers under the Dollar Cost Averaging program or, as specified in
1.24 Matured Term Value Transfer;
(b) A full or partial surrender (including a free withdrawal under 3.14), except for a payment
made (1) under an SDO (see 3.10), or (2) under a qualified Contract, when the amount withdrawn
is equal to the required minimum distribution for the Account calculated using a method
permitted under the Code and agreed to by Aetna; or
(c) Due to election of an Annuity option (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 AG 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 AG Account on account of an election of Annuity options 2 or 3 (see
4.07).
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3.06 Market Value Adjustment Market value adjusted amounts will be equal to the amount withdrawn multiplied by
(Cont'd): 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 Before an Annuity option is elected, all or any portion of the Adjusted Current Value of the
Value from the Funds or Certificate Holder's Account may be transferred from any Fund or Guaranteed Term of the AG
AG Account During the Account:
Accumulation Period:
(a) To any other Fund; or
(b) To any Guaranteed Term of the AG Account made available subject to terms and conditions
specified by Aetna in the current Deposit Period.
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3.07 Transfer of Current Transfer requests can be submitted as a percentage or as a dollar amount. Aetna may establish a
Value from the Funds or minimum transfer amount. Within a Guaranteed Term Group, the amount to be surrendered or
AG Account During the transferred will be withdrawn first from the oldest Deposit Period, then from the next oldest, and
Accumulation Period: so on until the amount requested is satisfied.
(Cont'd):
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 AG Account under the Dollar Cost Averaging program, or amounts
transferred as 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 allocated to AG Account Guaranteed Terms may not be transferred to the Funds or to another
Guaranteed Term during a Deposit Period or for 90 days after the close of a Deposit Period except
for (1) Matured Term Value(s) during the calendar month following the Term's Maturity Date; (2)
amounts used as a premium for an Annuity option; (3) amounts transferred under the Dollar Cost
Averaging program; and (4) amounts distributed under the Systematic Distribution Option.
3.08 Notice to the Contract The Certificate Holder will receive quarterly statements from Aetna of:
Holder:
(a) The value of any amounts held in:
(1) The AG 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 Distribution Aetna may, from time to time, make one or more systematic distribution options (SDOs) available
Options: during the Accumulation Period. When an SDO is elected, Aetna will make automatic payments from
the Certificate Holder's Account. No Surrender Fee or MVA will apply to the automatic payments
made under an SDO.
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3.10 Systematic Distribution Any SDO will be subject to the following criteria:
Options (Cont'd):
(a) Any SDO will be available to similarly situated contracts uniformly, and on the basis of
objective criteria consistently applied;
(b) The availability of any SDO may be limited by terms and conditions applicable to the election
of such SDO; and
(c) Aetna may discontinue the availability of an SDO at any time. Except to the extent required to
comply with applicable law, discontinuance of an SDO will apply only to future elections and
will not affect SDOs in effect at the time an option is discontinued.
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: The guaranteed death benefit is the greatest of:
(1) The 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, or deducted from the Account;
(2) The highest step up value, as of the date of death, prior to the Annuitant'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 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.
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3.11 Death Benefit Amount (b) Death of the Certificate Holder if the Certificate Holder is not the Annuitant: The death
(Cont'd): 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).
(c) Death of spousal Beneficiary who continued the Account: The death benefit amount equals the
Account's Adjusted Current Value on the claim date, less any applicable Surrender Fee (see
3.14 and Contract Schedule I) on Purchase Payments made since the death of the Annuitant.
(d) Death of the spousal beneficiary of a Certificate Holder who was not the Annuitant and who
continued the Account: The death benefit amount equals 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 otherwise distributed under this section, the
Available to Current Value will be retained in the Account. The Beneficiary has the right to allocate or
Beneficiary: reallocate any amount to any of the available investment options (subject to an MVA if
applicable). The following options are available to the Beneficiary:
(a) When the Certificate Holder is the Annuitant if the Annuitant dies (or when the Certificate
Holder is a nonnatural person if the Annuitant dies):
(1) If the Beneficiary is the surviving spouse, the spousal Beneficiary will be the successor
Certificate Holder and may exercise all Certificate Holder rights under the Contract and
continue in the Accumulation Period, or may elect (i) or (ii) 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 an Annuity option (see 4.07);
(ii)Receive, at any time, a lump sum payment equal to the Adjusted Current Value of the
Account.
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3.12 Death Benefit Options (2) If the Beneficiary is other than the surviving spouse, options (i) or (ii) above apply.
Available to Beneficiary Any portion of the Adjusted Current Value not applied to an Annuity option within one year
(Cont'd): of the 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 must be
made to the Annuitant's estate within five years of the date of death.
(4) If the Beneficiary is an entity, a lump sum payment equal to the Adjusted Current Value
must be made within five years of the date of death.
(b) When the Certificate Holder is not the Annuitant when the Certificate Holder dies:
(1) If the Beneficiary is the Certificate Holder's surviving spouse, the spousal Beneficiary
will be the successor Certificate Holder and may exercise all Certificate Holder rights
under the Contract and continue in the Accumulation Period, or may elect (i) or (ii),
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 or 3 (see 4.07);
(ii) Receive, at any time, a lump sum payment equal to the Surrender Value.
(2) If the Beneficiary is other than the Certificate Holder's surviving spouse, options (i) or
(ii) under (1) above apply. Any portion of the death benefit not applied to an Annuity
option 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 must be made to
the Certificate Holder's estate within five years of the date of death.
(4) If the Beneficiary is an entity, a lump sum payment equal to the Surrender Value must be
made within five years of the date of death.
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3.12 Death Benefit Options (c) When the Certificate Holder is a natural person and not the Annuitant, when the Annuitant
Available to Beneficiary dies, the Beneficiary (or the Certificate Holder if no Beneficiary exists) may elect to:
(Cont'd):
(i) Apply all or some of the Adjusted Current Value to an Annuity option within 60 days of
the date of death; or
(ii) Receive a lump sum payment equal to the Adjusted Current Value.
3.13 Liquidation of Surrender All or any portion of the Account's Current Value may be surrendered at any time. Surrender
Value: 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 AG 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. An MVA may apply to amounts surrendered from the AG Account.
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 (see 4.07);
(c) As a distribution under an systematic distribution option (see 3.10);
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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
not to exceed the amount shown on Contract Schedule I under Annual Waiver of Surrender Fee.
This waiver of the Surrender Fee applies to the first full or partial surrender in the
calendar year. This waiver is not available if a systematic distribution option has been in
effect at any time during the calendar year;
(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 3.16; 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.
(h) Under a qualified Contract when the amount withdrawn is equal to the minimum distribution
required by the Code for the Account calculated using a method permitted under the Code and
agreed to by Aetna.
3.15 Payment of Surrender Under certain emergency conditions, Aetna may defer payment:
Value:
(a) For a period of up to 6 months (unless not allowed by state law); or
(b) As provided by federal law.
3.16 Payment of Adjusted Current Upon 90 days' written notice to the Certificate Holder, Aetna will terminate any
Value: Certificate 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 the
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.
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IV. ANNUITY PROVISIONS
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4.01 Choices: The Certificate Holder may tell Aetna to apply any portion of the Adjusted Current Value (minus
any premium tax, if applicable,) to any Annuity option (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; 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).
During the Annuity Period when a Variable Annuity has been elected, at the request of the
Certificate Holder, all or any portion of the amount allocated to a Fund may be transferred to any
other Fund available during the Annuity Period. Four transfers, without charge, are allowed each
calendar year. Aetna reserves the right to change the number of transfers allowed.
Transfer requests must be expressed as a percentage of the allocation among the Funds of the
amount upon which the Variable Annuity will be based. Aetna reserves the right to establish a
minimum transfer amount. Transfers will be effective as of the Valuation Period in which Aetna
receives a transfer request in good order at its Home Office.
4.02 Terms of Annuity (a) When payments start, the age of the Annuitant plus the number of years for which payments are
Options: guaranteed must not exceed 95.
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4.02 Terms of Annuity Options (b) An Annuity option may not be elected if the first payment would be less than $50 or if the
(Cont'd): 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 is chosen Aetna will use the applicable current settlement rate if it will
provide higher Fixed Annuity payments.
(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 2 and 3 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 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 1 (see 4.07). The life expectancy of the Annuitant and the Annuitant and
second Annuitant shall be irrevocable upon the election of an Annuity option.
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4.03 Death of (a) Certificate Holder is Annuitant: When the Certificate Holder is the Annuitant and the
Annuitant/Beneficiary: Annuitant dies under option 1 or 2, or if both the Annuitant and the second Annuitant die
under option 3(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 3 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.
(b) Certificate Holder is Not Annuitant: When the Certificate Holder is not the Annuitant 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.
If the Annuitant dies under option 1 or 2, or both the Annuitant and the second Annuitant die
under option 3(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 3 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, 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 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.
G-MP2(5/97)
26
<PAGE>
4.03 Death of (e) The present value will be determined as of the Valuation Period in which proof of death
Annuitant/Beneficiary acceptable to Aetna and a request for payment is received at Aetna's home office. The interest
(Cont'd): 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 based on the amount of the first Variable Annuity
Separate Account: 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 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.
4.05 Fund(s) Annuity Unit For any Valuation Period, a Fund Annuity unit value is equal to:
Value -- Separate
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 compute all Separate Account Annuity Payments for any
Factor(s) -- Separate Fund.
Account:
The Annuity net return factor 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
G-MP2(5/97)
27
<PAGE>
4.06 Annuity Net Return (d) The total value of the Fund(s) record units and Fund(s) Annuity units of the Separate Account
Factor(s) -- Separate at the start of the Valuation Period; minus
Account (Cont'd):
(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 -- Payments for a Specified Period: Payments are made for the number of years specified
by the Certificate Holder. The number of years must be at least five and not more than 30.
Option 2 -- Life income based on the life of one Annuitant: Payments are made until the death of
the Annuitant. When this option is elected, the Certificate Holder must also choose one of the
following:
(a) payments cease at the death of the Annuitant;
(b) payments are guaranteed for a specified period from five to 30 years;
(c) cash refund: when the Annuitant dies, the Beneficiary will receive a lump sum payment equal to
the amount applied to the Annuity option (less any premium tax, if applicable) less the total
amount of Annuity payments made prior to such death. This cash refund feature is only
available if the total amount applied to the Annuity option is allocated to a Fixed Annuity.
Option 3 -- Life income based on the lives of two Annuitants: Payments are made for the lives of
two Annuitants, one of whom is designated the second Annuitant, and cease only when both
Annuitants have died. When this option is elected, the Certificate Holder must also choose one of
the following:
(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) 100% of the payment to continue after the first death and payments are guaranteed for a period
of five to 30 years;
(e) 100% of the payment to continue at the death of the designated second Annuitant and 50% of the
payment to continue at the death of the Annuitant; or
G-MP2(5/97)
28
<PAGE>
4.07 Annuity Options (f) 100% of the payment continues after the first death with a cash refund feature. When the
(Cont'd): Annuitant and designated second Annuitant die, the Beneficiary will receive a lump sum payment
equal to the amount applied to the Annuity option (less any premium tax) less the total amount
of Annuity payments paid prior to such death. This cash refund feature is only available if
the total amount applied to the Annuity option is allocated to a Fixed Annuity.
If a Fixed Annuity is chosen under Option 1, Option 2 (a) or (b), or Option 3 (a) or (d), the
Certificate Holder may elect, at the time the Annuity option is selected, an annual increase of
one, two or three percent compounded annually.
As allowed under applicable state law, Aetna reserves the right to offer additional Annuity
options.
</TABLE>
G-MP2(5/97)
29
<PAGE>
OPTION 1: Payments for a Specified Period
- --------------------------------------------------------------------------------
Monthly Amount for Each $1,000*
Rates for a Fixed Annuity with a 3% Guaranteed Interest Rate
- --------------------------------------------------------------------------------
Years Payment Years Payment
- ---------------------- --------------------- --------------------- -------------
5 17.91 18 5.96
6 15.14 19 5.73
7 13.16 20 5.51
8 11.68 21 5.32
9 10.53 22 5.15
10 9.61 23 4.99
11 8.86 24 4.84
12 8.24 25 4.71
13 7.71 26 4.59
14 7.26 27 4.47
15 6.87 28 4.37
16 6.53 29 4.27
17 6.23 30 4.18
- --------------------------------------------------------------------------------
First Month Amount for Each $1,000*
Rates for a Variable Annuity with a 3.5% Assumed Interest Rate
- --------------------------------------------------------------------------------
Years Payment Years Payment
- ---------------------- --------------------- --------------------- -------------
5 18.12 18 6.20
6 15.35 19 5.97
7 13.38 20 5.75
8 11.90 21 5.56
9 10.75 22 5.39
10 9.83 23 5.24
11 9.09 24 5.09
12 8.46 25 4.96
13 7.94 26 4.84
14 7.49 27 4.73
15 7.10 28 4.63
16 6.76 29 4.53
17 6.47 30 4.45
- --------------------------------------------------------------------------------
First Month Amount for Each $1,000*
Rates for a Variable Annuity with a 5% Assumed Interest Rate
- --------------------------------------------------------------------------------
Years Payment Years Payment
- ---------------------- --------------------- --------------------- -------------
5 18.74 18 6.94
6 15.99 19 6.71
7 14.02 20 6.51
8 12.56 21 6.33
9 11.42 22 6.17
10 10.51 23 6.02
11 9.77 24 5.88
12 9.16 25 5.76
13 8.64 26 5.65
14 8.20 27 5.54
15 7.82 28 5.45
16 7.49 29 5.36
17 7.20 30 5.28
- --------------------------------------------------------------------------------
* Net of any applicable premium tax deduction
G-MP2(5/97)
30
<PAGE>
Option 2: Life Income Based on the Life of One Annuitant
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity with 3% Guaranteed Interest Rate
- -----------------------------------------------------------------------------------------------------------------------
Option 2(b): Option 2(b): Option 2(b): Option 2(b):
Option 2(a): payments payments payments payments Option 2(c):
payments for guaranteed guaranteed guaranteed guaranteed Cash
Adjusted life 5 years 10 years 15 years 20 years Refund
Age of ----------------- ----------------- ------------------ ----------------- ------------------ ------------------
Annuitant Male Female Male Female Male Female Male Female Male Female Male Female
- -------- ------- --------- ------- --------- ------- ---------- ------- --------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $ 4.27 $ 3.90 $ 4.26 $ 3.90 $ 4.22 $ 3.89 $ 4.17 $ 3.86 $ 4.08 $ 3.82 $ 4.04 $ 3.78
51 4.34 3.97 4.33 3.96 4.30 3.95 4.23 3.92 4.14 3.88 4.10 3.84
52 4.43 4.03 4.41 4.03 4.37 4.01 4.30 3.98 4.20 3.93 4.16 3.89
53 4.51 4.10 4.50 4.10 4.45 4.08 4.37 4.04 4.26 3.99 4.23 3.95
54 4.60 4.18 4.59 4.17 4.54 4.15 4.45 4.11 4.32 4.04 4.29 4.01
55 4.70 4.25 4.68 4.25 4.62 4.22 4.53 4.18 4.39 4.11 4.37 4.07
56 4.80 4.34 4.78 4.33 4.72 4.30 4.61 4.25 4.45 4.17 4.44 4.13
57 4.91 4.42 4.89 4.41 4.82 4.38 4.69 4.32 4.51 4.23 4.52 4.20
58 5.03 4.52 5.00 4.51 4.92 4.47 4.78 4.40 4.58 4.30 4.61 4.28
59 5.15 4.61 5.12 4.60 5.03 4.56 4.87 4.48 4.65 4.37 4.69 4.35
60 5.28 4.72 5.25 4.70 5.14 4.66 4.96 4.57 4.71 4.44 4.78 4.43
61 5.43 4.83 5.39 4.81 5.27 4.76 5.06 4.66 4.78 4.51 4.88 4.52
62 5.58 4.95 5.53 4.93 5.39 4.87 5.16 4.75 4.84 4.58 4.98 4.60
63 5.74 5.08 5.69 5.05 5.53 4.98 5.26 4.85 4.90 4.65 5.09 4.70
64 5.91 5.21 5.85 5.18 5.66 5.10 5.36 4.95 4.96 4.72 5.20 4.80
65 6.10 5.36 6.03 5.32 5.81 5.22 5.46 5.05 5.02 4.79 5.31 4.90
66 6.30 5.51 6.21 5.47 5.96 5.36 5.56 5.16 5.08 4.86 5.44 5.01
67 6.51 5.67 6.41 5.63 6.12 5.50 5.66 5.26 5.13 4.93 5.56 5.12
68 6.73 5.85 6.62 5.80 6.28 5.65 5.77 5.37 5.18 5.00 5.70 5.24
69 6.97 6.04 6.84 5.98 6.44 5.80 5.86 5.49 5.23 5.06 5.84 5.37
70 7.23 6.25 7.07 6.18 6.61 5.97 5.96 5.60 5.27 5.12 5.98 5.51
71 7.51 6.47 7.32 6.39 6.79 6.14 6.05 5.71 5.31 5.18 6.14 5.65
72 7.80 6.71 7.58 6.62 6.96 6.32 6.14 5.83 5.34 5.23 6.30 5.80
73 8.12 6.98 7.85 6.86 7.14 6.50 6.23 5.94 5.37 5.28 6.47 5.96
74 8.46 7.26 8.14 7.12 7.32 6.69 6.31 6.04 5.40 5.32 6.65 6.13
75 8.82 7.57 8.45 7.40 7.50 6.89 6.38 6.14 5.42 5.35 6.83 6.31
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
G-MP2(5/97)
31
<PAGE>
Option 2: Life Income Based on the Life of One Annuitant
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
First Month Payment Amount for Each $1,000*
Rates for a Variable Annuity with 3.5% Assumed Interest Rate
- ----------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b):
payments for life payments payments payments payments
guaranteed guaranteed guaranteed guaranteed
Adjusted 5 years 10 years 15 years 20 years
Age of ------------------- -------------------- -------------------- -------------------- --------------------
Annuitant Male Female Male Female Male Female Male Female Male Female
- -------- --------- --------- ---------- --------- ---------- --------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $ 4.56 $ 4.20 $ 4.55 $ 4.19 $ 4.51 $ 4.18 $ 4.45 $ 4.15 $ 4.36 $ 4.11
51 4.64 4.26 4.62 4.25 4.58 4.24 4.51 4.21 4.42 4.16
52 4.72 4.32 4.70 4.32 4.66 4.30 4.58 4.26 4.48 4.21
53 4.80 4.39 4.79 4.38 4.74 4.36 4.65 4.32 4.53 4.27
54 4.89 4.46 4.87 4.46 4.82 4.43 4.73 4.39 4.59 4.32
55 4.99 4.54 4.97 4.53 4.91 4.50 4.80 4.46 4.65 4.38
56 5.09 4.62 5.07 4.61 5.00 4.58 4.88 4.53 4.72 4.44
57 5.20 4.71 5.17 4.70 5.10 4.66 4.96 4.60 4.78 4.50
58 5.32 4.80 5.29 4.79 5.20 4.75 5.05 4.68 4.84 4.57
59 5.44 4.90 5.41 4.88 5.31 4.84 5.14 4.76 4.91 4.63
60 5.57 5.00 5.53 4.99 5.42 4.93 5.23 4.84 4.97 4.70
61 5.71 5.11 5.67 5.09 5.54 5.03 5.32 4.93 5.03 4.77
62 5.86 5.23 5.81 5.21 5.66 5.14 5.42 5.02 5.09 4.84
63 6.02 5.36 5.97 5.33 5.79 5.25 5.51 5.11 5.16 4.91
64 6.20 5.49 6.13 5.46 5.93 5.37 5.61 5.21 5.21 4.98
65 6.38 5.64 6.31 5.60 6.07 5.49 5.71 5.31 5.27 5.05
66 6.58 5.79 6.49 5.75 6.22 5.63 5.81 5.41 5.32 5.12
67 6.79 5.95 6.69 5.91 6.38 5.76 5.91 5.52 5.38 5.18
68 7.02 6.13 6.89 6.08 6.53 5.91 6.01 5.63 5.42 5.25
69 7.26 6.32 7.11 6.26 6.70 6.06 6.11 5.74 5.47 5.31
70 7.52 6.53 7.35 6.45 6.86 6.23 6.20 5.85 5.51 5.37
71 7.80 6.75 7.59 6.66 7.03 6.39 6.29 5.96 5.54 5.42
72 8.09 6.99 7.85 6.89 7.21 6.57 6.38 6.07 5.57 5.47
73 8.41 7.26 8.12 7.13 7.38 6.75 6.46 6.17 5.60 5.51
74 8.75 7.54 8.41 7.39 7.55 6.94 6.53 6.28 5.63 5.55
75 9.12 7.85 8.71 7.66 7.73 7.13 6.61 6.38 5.65 5.59
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
G-MP2(5/97)
32
<PAGE>
Option 2: Life Income Based on the Life of One Annuitant
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
First Month Payment Amount for Each $1,000*
Rates for a Variable Annuity with 5% Assumed Interest Rate
- ----------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b):
payments for life payments payments payments payments
guaranteed guaranteed guaranteed guaranteed
Adjusted 5 years 10 years 15 years 20 years
Age of ------------------- -------------------- -------------------- -------------------- --------------------
Annuitant Male Female Male Female Male Female Male Female Male Female
- -------- --------- --------- ---------- --------- ---------- --------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $ 5.48 $ 5.12 $ 5.46 $ 5.11 $ 5.41 $ 5.09 $ 5.34 $ 5.06 5.24 $ 5.01
51 5.55 5.17 5.53 5.17 5.48 5.14 5.40 5.11 5.29 5.05
52 5.63 5.23 5.61 5.23 5.55 5.20 5.46 5.16 5.34 5.10
53 5.71 5.30 5.69 5.29 5.62 5.26 5.53 5.22 5.40 5.15
54 5.80 5.37 5.77 5.36 5.70 5.33 5.60 5.27 5.45 5.20
55 5.89 5.44 5.86 5.43 5.79 5.39 5.67 5.34 5.51 5.25
56 5.99 5.52 5.96 5.51 5.87 5.47 5.74 5.40 5.56 5.31
57 6.10 5.60 6.06 5.59 5.97 5.54 5.82 5.47 5.62 5.37
58 6.21 5.69 6.17 5.67 6.06 5.62 5.90 5.54 5.68 5.42
59 6.33 5.79 6.29 5.77 6.17 5.71 5.98 5.61 5.74 5.48
60 6.46 5.89 6.41 5.87 6.28 5.80 6.06 5.69 5.79 5.55
61 6.60 6.00 6.55 5.97 6.39 5.90 6.15 5.77 5.85 5.61
62 6.75 6.11 6.69 6.08 6.51 6.00 6.24 5.86 5.91 5.67
63 6.91 6.23 6.84 6.20 6.64 6.10 6.33 5.95 5.96 5.73
64 7.09 6.37 7.00 6.33 6.77 6.22 6.42 6.04 6.02 5.80
65 7.27 6.51 7.18 6.46 6.91 6.34 6.52 6.13 6.07 5.86
66 7.47 6.66 7.36 6.61 7.05 6.46 6.61 6.23 6.12 5.92
67 7.68 6.82 7.55 6.76 7.20 6.60 6.70 6.33 6.16 5.99
68 7.91 7.00 7.76 6.93 7.35 6.74 6.80 6.43 6.21 6.04
69 8.15 7.19 7.98 7.11 7.51 6.89 6.89 6.54 6.25 6.10
70 8.41 7.39 8.21 7.30 7.67 7.04 6.97 6.64 6.28 6.15
71 8.69 7.62 8.45 7.51 7.83 7.21 7.06 6.74 6.32 6.20
72 8.99 7.86 8.70 7.73 8.00 7.38 7.14 6.85 6.35 6.25
73 9.31 8.12 8.97 7.97 8.16 7.55 7.21 6.95 6.37 6.29
74 9.65 8.41 9.26 8.23 8.33 7.73 7.29 7.04 6.39 6.33
75 10.02 8.72 9.55 8.50 8.50 7.92 7.35 7.14 6.41 6.36
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
G-MP2(5/97)
33
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity with 3% Guaranteed Interest Rate
Annuitant is Female and Second Annuitant is Male
- --------------------------------------------------------------------------------------------------------------------
Adjusted Ages
- ---------------------------
Second
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) Option 3(f)
- ------------- ------------- -------------- --------------- -------------- -------------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
55 50 $ 3.75 $ 4.07 $ 4.26 $ 3.75 $ 3.98 $ 3.72
55 55 3.88 4.25 4.47 3.87 4.06 3.85
55 60 3.99 4.44 4.71 3.98 4.12 3.94
60 55 4.06 4.47 4.71 4.06 4.37 4.02
60 60 4.24 4.71 4.99 4.23 4.47 4.17
60 65 4.38 4.97 5.32 4.38 4.54 4.29
65 60 4.49 5.01 5.32 4.48 4.89 4.39
65 65 4.72 5.33 5.70 4.71 5.02 4.59
65 70 4.93 5.68 6.15 4.91 5.14 4.74
70 65 5.07 5.75 6.17 5.05 5.60 4.87
70 70 5.40 6.21 6.70 5.36 5.79 5.13
70 75 5.69 6.68 7.32 5.62 5.96 5.29
75 70 5.89 6.82 7.40 5.81 6.63 5.48
75 75 6.37 7.45 8.15 6.23 6.92 5.78
75 80 6.78 8.11 8.99 6.54 7.15 5.93
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
G-MP2(5/97)
34
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
First Month Payment Amount for Each $1,000*
Rates for a Variable Annuity with 3.5% Assumed Interest Rate
Annuitant is Female and Second Annuitant is Male
- --------------------------------------------------------------------------------------------------------
Adjusted Ages
- ---------------------------
Second
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
- ------------- ------------- -------------- --------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 4.03 $ 4.36 $ 4.55 $ 4.03 $ 4.27
55 55 4.16 4.54 4.76 4.15 4.34
55 60 4.27 4.73 5.00 4.26 4.40
60 55 4.34 4.76 5.00 4.34 4.65
60 60 4.51 4.99 5.27 4.50 4.74
60 65 4.66 5.25 5.61 4.65 4.82
65 60 4.76 5.29 5.60 4.75 5.16
65 65 4.99 5.61 5.99 4.98 5.30
65 70 5.19 5.97 6.44 5.17 5.41
70 65 5.34 6.03 6.46 5.31 5.88
70 70 5.67 6.49 6.99 5.62 6.07
70 75 5.95 6.96 7.61 5.87 6.23
75 70 6.16 7.10 7.68 6.07 6.90
75 75 6.64 7.73 8.43 6.48 7.19
75 80 7.04 8.39 9.29 6.79 7.42
- --------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
G-MP2(5/97)
35
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
First Month Payment Amount for Each $1,000*
Rates for a Variable Annuity with 5% Assumed Interest Rate
Annuitant is Female and Second Annuitant is Male
- ---------------------------------------------------------------------------------------------------------------
Adjusted Ages
- --------------------------------
Second
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
- ---------------- --------------- --------------- -------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 4.93 $ 5.27 $ 5.46 $ 4.93 $ 5.17
55 55 5.04 5.44 5.66 5.04 5.23
55 60 5.15 5.63 5.91 5.14 5.29
60 55 5.21 5.65 5.89 5.21 5.53
60 60 5.37 5.87 6.16 5.37 5.62
60 65 5.52 6.14 6.51 5.51 5.70
65 60 5.61 6.16 6.49 5.60 6.03
65 65 5.83 6.49 6.87 5.82 6.15
65 70 6.04 6.84 7.34 6.00 6.27
70 65 6.17 6.90 7.33 6.13 6.73
70 70 6.49 7.35 7.87 6.44 6.91
70 75 6.77 7.84 8.51 6.68 7.07
75 70 6.97 7.96 8.56 6.87 7.75
75 75 7.45 8.60 9.33 7.27 8.04
75 80 7.86 9.28 10.20 7.57 8.27
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
G-MP2(5/97)
36
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity with 3% Guaranteed Interest Rate
Annuitant is Male and Second Annuitant is Female
- ------------------------------------------------------------------------------------------------------------------------------
Adjusted Ages
- -------------------------------
Second
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) Option 3(f)
- --------------- ------------ --------------- ------------- -------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.13 $ 3.67
55 55 3.88 4.25 4.47 3.87 4.25 3.85
55 60 4.06 4.47 4.71 4.06 4.36 4.02
60 55 3.99 4.44 4.71 3.98 4.55 3.94
60 60 4.24 4.71 4.99 4.23 4.70 4.17
60 65 4.49 5.01 5.32 4.48 4.85 4.39
65 60 4.38 4.97 5.32 4.38 5.10 4.29
65 65 4.72 5.33 5.70 4.71 5.32 4.59
65 70 5.07 5.75 6.17 5.05 5.54 4.87
70 65 4.93 5.68 6.15 4.91 5.86 4.74
70 70 5.40 6.21 6.70 5.36 6.18 5.13
70 75 5.89 6.82 7.40 5.81 6.49 5.48
75 70 5.69 6.68 7.32 5.62 6.92 5.29
75 75 6.37 7.45 8.15 6.23 7.40 5.78
75 80 7.07 8.34 9.16 6.78 7.85 6.17
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
G-MP2(5/97)
37
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
First Month Payment Amount for Each $1,000*
Rates for a Variable Annuity with 3.5% Assumed Interest Rate
Annuitant is Male and Second Annuitant is Female
- ---------------------------------------------------------------------------------------------------------------
Adjusted Ages
- --------------------------------
Second
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
- --------------- ------------ --------------- ------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.42
55 55 4.16 4.54 4.76 4.15 4.54
55 60 4.34 4.76 5.00 4.34 4.64
60 55 4.27 4.73 5.00 4.26 4.83
60 60 4.51 4.99 5.27 4.50 4.98
60 65 4.76 5.29 5.60 4.75 5.13
65 60 4.66 5.25 5.61 4.65 5.39
65 65 4.99 5.61 5.99 4.98 5.60
65 70 5.34 6.03 6.46 5.31 5.81
70 65 5.19 5.97 6.44 5.17 6.14
70 70 5.67 6.49 6.99 5.62 6.47
70 75 6.16 7.10 7.68 6.07 6.77
75 70 5.95 6.96 7.61 5.87 7.20
75 75 6.64 7.73 8.43 6.48 7.68
75 80 7.33 8.62 9.45 7.02 8.13
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
G-MP2(5/97)
38
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
First Month Payment Amount for Each $1,000*
Rates for a Variable Annuity with 5% Assumed Interest Rate
Annuitant is Male and Second Annuitant is Female
- ---------------------------------------------------------------------------------------------------------------------------
Adjusted Ages
- -----------------------------------
Second
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
- ------------------ ---------------- ----------------- ---------------- ----------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 4.88 $ 5.26 $ 5.48 $ 4.88 $ 5.34
55 55 5.04 5.44 5.66 5.04 5.43
55 60 5.21 5.65 5.89 5.21 5.53
60 55 5.15 5.63 5.91 5.14 5.73
60 60 5.37 5.87 6.16 5.37 5.86
60 65 5.61 6.16 6.49 5.60 6.01
65 60 5.52 6.14 6.51 5.51 6.28
65 65 5.83 6.49 6.87 5.82 6.47
65 70 6.17 6.90 7.33 6.13 6.67
70 65 6.04 6.84 7.34 6.00 7.03
70 70 6.49 7.35 7.87 6.44 7.33
70 75 6.97 7.96 8.56 6.87 7.62
75 70 6.77 7.84 8.51 6.68 8.08
75 75 7.45 8.60 9.33 7.27 8.55
75 80 8.14 9.49 10.35 7.80 8.98
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
G-MP2(5/97)
39
<PAGE>
- --------------------------------------------------------------------------------
Aetna Insurance Company of America
Home Office: 151 Farmington Avenue
P.O. Box 30670
Hartford, Connecticut 06150-0670
(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.
G-MP2(5/97)
-------------------------------------------------
Aetna Insurance Company of America
Home Office: 151 Farmington Avenue
P.O. Box 30670
Hartford, Connecticut 06150-0670
(800) 531-4547
You may call the toll-free number shown above for
answers to questions or to resolve a complaint.
Aetna Insurance Company of America, a stock
company, herein called Aetna, agrees to pay the
benefits stated in this Contract.
- --------------------------------------------------------------------------------
Certificate of Group Annuity To the Certificate Holder:
Coverage
Aetna certifies that coverage is in force for you
under the stated Group Annuity Contract and
Certificate numbers. All data shown here is taken
from Aetna records and is based upon information
furnished by you.
This Certificate is a summary of the Group
Annuity Contract provisions. It replaces any and
all prior certificates or endorsements issued to
you under the stated Contract and Certificate
numbers. This Certificate is for information only
and is not a part of the Contract.
The variable features of the Group Contract are
described in parts III and IV.
- --------------------------------------------------------------------------------
Right to Cancel You may cancel your Account within 10
days by returning it to the agent from whom it
was purchased, or to Aetna at the address shown
above. Within seven days of receiving this
Certificate at its home office, Aetna will return
the amount of Purchase Payment(s) received, plus
any increase, or minus any decrease, on the
amount, if any, of Purchase Payment(s) allocated
to the Separate Account fund(s).
/s/ Dan Kearney /s/ Maria F. McKeon
President Secretary
- --------------------------------------------------------------------------------
Contract Holder Group Annuity Contract No.
SPECIMEN SPECIMEN
- --------------------------------------------------------------------------------
Certificate Holder Certificate No.
SPECIMEN
SPECIMEN SPECIMEN
- --------------------------------------------------------------------------------
Annuitant Name Type of Plan
SPECIMEN SPECIMEN
- --------------------------------------------------------------------------------
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 CERTIFICATE 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.
MP2CERT (5/97)
<PAGE>
Specifications
- ------------------------------- ------------------------------------------------
Guaranteed Interest Rate There are guaranteed interest
rates for amounts held in the AG Account (See
Certificate Schedule I).
- ------------------------------- ------------------------------------------------
Deductions from the There will be deductions for mortality and expense
Separate Account risks and administrative fees. (See Certificate
Schedule I and II).
- ------------------------------- ------------------------------------------------
Deduction from The Purchase Payment is 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 Certificate Schedule I).
MP2CERT(5/97)
2
<PAGE>
Contract Schedule I
Accumulation Period
<TABLE>
<CAPTION>
Separate Account
- -------------------------- ----------------------------------------------------------------------------------------------------
<S> <C>
Separate Account: Variable Annuity Account I
Charges to Separate A daily charge is deducted from any portion of the Current Value allocated to the Separate
Account: 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% |
|_ _|
AICA Guaranteed Account (AG Account)
- -------------------------------------------------------------------------------------------------------------------------------
Minimum Guaranteed [3.0%] (effective annual rate of return)
Interest Rate:
Separate Account and AG Account
- -------------------------------------------------------------------------------------------------------------------------------
Transfers: An unlimited number of Transfers are allowed 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].
Annual Waiver of As provided in 3.14 (d), the amount that may be withdrawn without a surrender fee cannot exceed
Surrender Fee: [10%] of the Current Value calculated on the date Aetna receives a surrender request in good order
at its Home Office.
MP2CERT(5/97)-1
3
<PAGE>
Contract Schedule I (Continued)
Accumulation Period
Separate Account and AG Account (Cont'd)
- -----------------------------------------------------------------------------------------------------------------------------
Surrender Fee: For each surrender, the Surrender Fee will be determined as follows:
Surrender Fee
Length of Time from Deposit of (as percentage of
Net 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 The specified payment or specified percentage may not be greater than [10%] of the Account's
Withdrawal Current Value at time of election.
Option (SWO):
</TABLE>
See 1. GENERAL DEFINITIONS for explanations.
MP2CERT(5/97)-1
4
<PAGE>
Contract Schedule II
Annuity Period
<TABLE>
<CAPTION>
Separate Account
- -------------------------- ----------------------------------------------------------------------------------------------------
<S> <C>
Charges to Separate A daily charge at an annual effective rate of [1.25%] for Annuity mortality and expense risks.
Account: 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 of [5.0%] may be elected. If
Annual Net Return Rate: [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 [3.0%] (effective annual rate of return)
Interest Rate:
</TABLE>
See 1. GENERAL DEFINITIONS for explanations.
MP2CERT(5/97)-1
5
<PAGE>
Contract Schedule I
Accumulation Period
<TABLE>
<CAPTION>
Separate Account
- -------------------------- ----------------------------------------------------------------------------------------------------
<S> <C>
Separate Account: Variable Annuity Account I
Charges to Separate A daily charge is deducted from any portion of the Current Value allocated to the Separate
Account: 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% |
|_ _|
AICA Guaranteed Account (AG Account)
- -------------------------------------------------------------------------------------------------------------------------------
Minimum Guaranteed [3.0%] (effective annual rate of return)
Interest Rate:
Separate Account and AG Account
- -------------------------------------------------------------------------------------------------------------------------------
Transfers: An unlimited number of Transfers are allowed 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].
Annual Waiver of As provided in 3.14 (d), the amount that may be withdrawn without a surrender fee cannot exceed [10%] of
Surrender Fee: the Current Value calculated on the date Aetna receives a surrender request in good order at its Home
Office.
MP2CERT(5/97)-2
3
<PAGE>
Contract Schedule I (Continued)
Accumulation Period
Separate Account and AG Account (Cont'd)
- -------------------------------------------------------------------------------------------------------------------------------
Surrender Fee: For each surrender, the Surrender Fee will be determined as follows:
Surrender Fee
Length of Time from Deposit of (as percentage of
Net Purchase Payment (Years) Net Purchase Payment)
__ __
| Less than 1 year 3% |
| More than 1 but less than 2 years 2% |
| More than 2 but less than 3 years 1% |
| More than 3 years 0% |
|_ _|
Systematic The specified payment or specified percentage may not be greater than [10%] of the Account's Current
Withdrawal Value at time of election.
Option (SWO):
</TABLE>
See 1. GENERAL DEFINITIONS for explanations.
MP2CERT(5/97)-2
4
<PAGE>
Contract Schedule II
Annuity Period
<TABLE>
<CAPTION>
Separate Account
- ------------------------------- -----------------------------------------------------------------------------------------------
<S> <C>
Charges to Separate Account: A daily charge at an annual effective rate of [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 of [5.0%] may be elected.
Annual Net Return Rate: 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 [3.0%] (effective annual rate of return)
Rate:
</TABLE>
See 1. GENERAL DEFINITIONS for explanations.
MP2CERT(5/97)-2
5
<PAGE>
Contract Schedule I
Accumulation Period
<TABLE>
<CAPTION>
Separate Account
- -------------------------------- ----------------------------------------------------------------------------------------------
<S> <C>
Separate Account: Variable Annuity Account I
Charges to Separate Account: A daily charge is deducted from any portion of the Current Value allocated to the Separate Account.
The deduction is the daily equivalent of the annual effective percentage shown in the following
chart:
__ __
Mortality Risk Charge | 0.35% |
Expense Risk Charge | 0.90% |
Total Separate Account | ----- |
Charges | 1.25% |
|_ _|
AICA Guaranteed Account (AG Account)
- -------------------------------------------------------------------------------------------------------------------------------
Minimum Guaranteed Interest [3.0%] (effective annual rate of return)
Rate:
Separate Account and AG Account
- -------------------------------------------------------------------------------------------------------------------------------
Transfers: An unlimited number of Transfers are allowed 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].
Annual Waiver of Surrender Fee: As provided in 3.14 (d), the amount that may be withdrawn without a surrender fee cannot exceed
[10%] of the Current Value calculated on the date Aetna receives a surrender request in good order
at its Home Office.
MP2CERT(5/97)-3
3
<PAGE>
Contract Schedule I (Continued)
Accumulation Period
Separate Account and AG Account (Cont'd)
- -------------------------------------------------------------------------------------------------------------------------------
Surrender Fee: The Surrender Fee does not apply to this Contract.
Systematic Withdrawal The specified payment or specified percentage may not be greater than [10%] of the Account's
Option (SWO): Current Value at time of election.
</TABLE>
See 1. GENERAL DEFINITIONS for explanations.
MP2CERT(5/97)-3
4
<PAGE>
Contract Schedule II
Annuity Period
<TABLE>
<CAPTION>
Separate Account
- ------------------------------ ------------------------------------------------------------------------------------------------
<S> <C>
Charges to Separate Account: A daily charge at an annual effective rate of [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 of [5.0%] may be elected.
Annual Net Return Rate: 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
- ------------------------------ ------------------------------------------------------------------------------------------------
</TABLE>
Minimum Guaranteed Interest [3.0%] (effective annual rate of return)
Rate:
See 1. GENERAL DEFINITIONS for explanations.
MP2CERT(5/97)-3
5
<PAGE>
TABLE OF CONTENTS
I. GENERAL DEFINITIONS
- ---------------------------------------------------------------------------
Page
1.01 Account............................................................8
1.02 Accumulation Period................................................8
1.03 Adjusted Current Value.............................................8
1.04 AICA Guaranteed Account (AG Account)...............................8
1.05 Annuitant..........................................................8
1.06 Annuity............................................................8
1.07 Beneficiary........................................................8
1.08 Certificate Holder.................................................8
1.09 Code ............................................................8
1.10 Contract...........................................................8
1.11 Contract Holder....................................................9
1.12 Current Value......................................................9
1.13 Deposit Period.....................................................9
1.14 Dollar Cost Averaging..............................................9
1.15 Fixed Annuity......................................................9
1.16 Fund(s)............................................................9
1.17 General Account....................................................9
1.18 Guaranteed Rates -- AG Account.....................................9
1.19 Guaranteed Term...................................................10
1.20 Guaranteed Term(s) Groups.........................................10
1.21 Maintenance Fee...................................................10
1.22 Market Value Adjustment (MVA).....................................10
1.23 Matured Term Value................................................10
1.24 Matured Term Value Transfer.......................................10
1.25 Maturity Date.....................................................10
1.26 Net Purchase Payment(s)...........................................11
1.27 Nonunitized Separate Account......................................11
1.28 Purchase Payment(s)...............................................11
1.29 Reinvestment......................................................11
1.30 Separate Account..................................................11
1.31 Surrender Value...................................................11
1.32 Transfers.........................................................12
1.33 Valuation Period (Period).........................................12
1.34 Variable Annuity..................................................12
II. GENERAL PROVISIONS
- ---------------------------------------------------------------------------
2.01 Change of Contract................................................12
2.02 Change of Fund(s).................................................13
2.03 Nonparticipating Contract.........................................13
MP2CERT(5/97)
6
<PAGE>
Page
2.04 Payments and Elections............................................13
2.05 State Laws........................................................14
2.06 Control of Contract...............................................14
2.07 Designation of Beneficiary........................................14
2.08 Misstatements and Adjustments.....................................14
2.09 Incontestability..................................................14
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..........................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 AG Account
During the Accumulation Period....................................18
3.08 Notice to the Certificate Holder..................................19
3.09 Loans.............................................................19
3.10 Systematic Distribution Options...................................19
3.11 Death Benefit Amount..............................................19
3.12 Death Benefit Options Available to Beneficiary....................21
3.13 Liquidation of Surrender Value....................................23
3.14 Surrender Fee.....................................................23
3.15 Payment of Surrender Value........................................24
3.16 Payment of Adjusted Current Value.................................24
IV. ANNUITY PROVISIONS
- ---------------------------------------------------------------------------
4.01 Choices...........................................................24
4.02 Terms of Annuity Options..........................................25
4.03 Death of Annuitant/Beneficiary....................................26
4.04 Fund(s) Annuity Units -- Separate Account.........................27
4.05 Fund(s) Annuity Unit Value -- Separate Account....................28
4.06 Annuity Net Return Factor(s) -- Separate Account..................28
4.07 Annuity Options...................................................29
MP2CERT(5/97)
7
<PAGE>
<TABLE>
I. GENERAL DEFINITIONS
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
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 AG Account MVA, if
applicable. (See 1.22)
1.04 AICA Guaranteed Account (AG An accumulation option where Aetna guarantees stipulated rate(s) of interest
Account): for specified periods of time. All assets of Aetna, including amounts in the
Nonunitized Separate Account, are available to meet the guarantees under the AG
Account.
1.05 Annuitant: The person whose life is measured for purposes of the guaranteed death benefit
and the duration of Annuity payments under this Contract.
1.06 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).
1.07 Beneficiary: The individual or estate entitled to receive any death benefit due under the
Contract. 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.
1.08 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 Holder. Joint Certificate Holders have
joint ownership rights and both must authorize exercising any ownership rights
unless Aetna allows otherwise.
1.09 Code: The Internal Revenue Code of 1986, as it may be amended from time to time.
1.10 Contract: This agreement between Aetna and the Contract Holder.
MP2CERT(5/97)
8
<PAGE>
1.11 Contract Holder: The entity to which the Contract is issued.
1.12 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 AG 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.
1.13 Deposit Period: A day, 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 may be allocated to one or more AG Account
Guaranteed Terms. Aetna reserves the right to shorten or to extend the Deposit
Period.
During a Deposit Period, Aetna may offer any number of Guaranteed Terms and more than
one Guaranteed Term of the same duration may be offered.
1.14 Dollar Cost Averaging: A program that permits the Certificate Holder to systematically transfer
amounts from any of the Funds or an available AG Account Guaranteed Term to any
of the Funds. Aetna reserves the right to establish terms and conditions
governing Dollar Cost Averaging. Dollar Cost Averaging is not available when
an SDO is in effect.
1.15 Fixed Annuity: An Annuity with payments that do not vary in amount.
1.16 Fund(s): The open-end management investment companies (mutual funds) in which the
Separate Account invests.
1.17 General Account: The Account holding the assets of Aetna, other than those assets held in
Aetna's separate accounts.
1.18 Guaranteed Rates -- AG Account: Aetna will declare the interest rate(s) 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 period beginning with the first day of the
Deposit Period and ending on the Maturity Date. Guaranteed Rates are credited
beginning with the date of allocation. 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.
MP2CERT(5/97)
9
<PAGE>
1.18 Guaranteed Rates -- AG Account For Guaranteed Terms of one year or less, one Guaranteed Rate is credited for the full
(Cont'd): 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.
1.19 Guaranteed Term: The period of time specified by Aetna for which a specific Guaranteed Rate(s)
is offered on amounts invested during a specific Deposit Period. Guaranteed
Terms are made available subject to Aetna's terms and conditions, including,
but not limited to, Aetna's right to restrict allocations to new Net Purchase
Payments (such as by prohibiting Transfers into a particular Guaranteed Term
from any other Guaranteed Term or from any of the Funds, or by prohibiting
Reinvestment of a Matured Term Value to a particular Guaranteed Term. More
than one Guaranteed Term of the same duration may be offered during a Deposit
Period.
1.20 Guaranteed Term(s) Groups: All AG Account Guaranteed Term(s) of the same duration (from the close of the
Deposit Period until the designated Maturity Date).
1.21 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.
1.22 Market Value Adjustment (MVA): An adjustment that may apply to an amount withdrawn or transferred from an AG
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.
1.23 Matured Term Value: The amount payable on an AG Account Guaranteed Term's Maturity Date.
1.24 Matured Term Value Transfer: During the calendar month following an AG 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 AG 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.
1.25 Maturity Date: The last day of an AG Account Guaranteed Term.
MP2CERT(5/97)
10
<PAGE>
1.26 Net Purchase Payment(s): The Purchase Payment less premium taxes, as applicable.
1.27 Nonunitized Separate Account: A separate account set up by Aetna under Title 38, Section 38a-433, of the
Connecticut General Statutes, that holds assets for AG 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.
1.28 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.
1.29 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 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.
1.30 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.
1.31 Surrender Value: The amount payable by Aetna upon the surrender of any portion of an Account.
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1.32 Transfers: The movement of invested amounts among the available Fund(s) and/or any AG
Account Guaranteed Term made available subject to terms and conditions
established by Aetna during the Accumulation Period or, during the Annuity
Period, among the available Funds under a Variable Annuity.
1.33 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 asset value.
1.34 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
- -------------------------------------------------------------------------------------------------------------------------------
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. 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.
Aetna may make any change that affects the AG 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.
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 (1.26)
(b) AG Account Guaranteed Rate (1.18)
(c) Net Return Factor(s) -- Separate Account (3.04)
(d) Current Value (1.12)
(e) Surrender Value (1.31)
(f) Fund(s) Annuity Unit Value -- Separate Account (4.05)
(g) Annuity options (4.07)
(h) Fixed Annuity Interest Rates (4.01)
(i) Transfers (1.32).
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2.01 Change of Contract (Cont'd): 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): The assets of the Separate Account are segregated by Fund. If the shares of
any Fund are no longer available for investment by the Separate Account or if
in our judgment, further investment in such shares should become inappropriate
in view of the purpose of the Contract, Aetna may cease to make such Fund
shares available for investment under the Contract prospectively, or Aetna may
substitute shares of another Fund for shares already acquired. Aetna may also,
from time to time, add additional Funds. Any elimination, substitution or
addition of Funds will be done in accordance with applicable state and federal
securities laws. Aetna reserves the right to substitute shares of another Fund
for shares already acquired without a proxy vote.
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, or
at the death of the first Certificate Holder if the Account is owned jointly,
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 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.
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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. If the Account is owned
jointly, both 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
the 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.
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. If the Account is owned jointly, at
the death of one joint Certificate Holder, the survivor will be deemed the
Beneficiary; any other Beneficiary on record will be deemed a contingent
Beneficiary.
2.08 Misstatements and Adjustments: If Aetna finds the age of any Annuitant to 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.
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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
- -------------------------------------------------------------------------------------------------------------------------------
3.01 Net Purchase Payment: This amount is the actual Purchase Payment less any premium tax. Aetna
reserves the right to pay premium taxes when due and deduct the amount from the
Current Value when we pay the tax or at a later date.
Each Net Purchase payment will be allocated, as directed by the Certificate Holder
among:
(a) AG Account Guaranteed Terms made available subject to terms and
conditions established by Aetna; and
(b) The Fund(s) in which the Separate Account invests.
For each Net Purchase Payment, the Certificate Holder shall tell Aetna the percentage
of each Purchase Payment to allocate to any available AG Account Guaranteed Terms
and/or each Fund. Unless different allocation instructions are received for any
subsequent Net Purchase Payment, the allocation will be the same as for the initial
Net Purchase Payment. 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 Account: Aetna will maintain an Account for each Certificate Holder.
Aetna will declare from time to time the acceptability and the minimum amount
for additional Purchase Payments.
3.03 Fund(s) Record Units -- Separate The portion of the Net Purchase Payment(s) applied to each Fund under the Separate
Account: 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.
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3.04 Net Return Factor(s) -- Separate The net return factor(s) are used to compute all Separate Account record units
Account: 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 Value -- Separate A Fund record unit value is computed by multiplying the net return factors for
Account: 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 Adjustment: An MVA will apply to any withdrawal from the AG Account before the end of a
Guaranteed Term when the withdrawal is:
(a) A Transfer; except for Transfers under the Dollar Cost Averaging
program or, as specified in 1.24 Matured Term Value Transfer;
(b) A full or partial surrender (including a free withdrawal under 3.14); except
for a payment made (1) under an SDO (see 3.10), or (2) under a qualified
Contract, when the amount withdrawn is equal to the required minimum
distribution for the Account calculated using a method permitted under the
Code and agreed to by Aetna; or
(c) Due to election of an Annuity (see 4.07).
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3.06 Market Value Adjustment (Cont'd): 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 AG 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 AG Account on account of an election of Annuity
options 2 or 3 (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.
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3.07 Transfer of Current Value from the (b) The Deposit Period Yield is the average of those yields for the
Funds or AG Account During the Deposit Period. If withdrawal is made before the close of the Deposit
Accumulation Period: 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.
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 AG Account:
(a) To any other Fund; or
(b) To any Guaranteed Term of the AG Account made available subject to terms and
conditions specified by Aetna 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.
Amounts transferred from the AG Account under the Dollar Cost Averaging program, or
amounts transferred as 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 allocated to AG Account Guaranteed Terms may not be transferred to the Funds
or to another Guaranteed Term during a Deposit Period or for 90 days after the close
of a Deposit Period except for (1) Matured Term Value(s) during the calendar month
following the Term's Maturity Date; (2) amounts used as a premium for an Annuity
option; (3) amounts transferred under the Dollar Cost Averaging program; and (4)
amounts distributed under the Systematic Withdrawal Option.
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3.08 Notice to the Certificate Holder: The Certificate Holder will receive quarterly statements from Aetna of:
(a) The value of any amounts held in:
(1) The AG 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 Distribution Options: Aetna may, from time to time, make one or more systematic distribution options (SDOs)
available during the Accumulation Period. When an SDO is elected, Aetna will make
automatic payments from the Certificate Holder's Account. No Surrender Fee or MVA will
apply to the automatic payments made under an SDO.
Any SDO will be subject to the following criteria:
(a) Any SDO will be available to similarly situated contracts uniformly,
and on the basis of objective criteria consistently applied;
(b) The availability of any SDO may be limited by terms and conditions
applicable to the election of such SDO; and
(c) Aetna may discontinue the availability of an SDO at any time. Except to the
extent required to comply with applicable law, discontinuance of an SDO will
apply only to future elections and will not affect SDOs in effect at the time
an option is discontinued.
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: The guaranteed death benefit is the greatest of:
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3.11 Death Benefit Amount (Cont'd): (1) The 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, or deducted from the Account;
(2) The highest step up value, as of the date of death, prior to the
Annuitant'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 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 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).
(c) Death of spousal Beneficiary who continued the Account: The death benefit
amount equals the Account's Adjusted Current Value on the claim date, less
any applicable Surrender Fee (see 3.14 and Contract Schedule I) on Purchase
Payments made since the death of the Annuitant.
(d) Death of the spousal beneficiary of a Certificate Holder who was not the
Annuitant and who continued the Account: The death benefit amount equals 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).
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3.12 Death Benefit Options Available to Prior to any election, or until amounts must be otherwise distributed under this
Beneficiary: section, the Current Value will be retained in the Account. The Beneficiary has the
right to allocate or reallocate any amount to any of the available investment options
(subject to an MVA if applicable). The following options are available to the
Beneficiary:
(a) When the Certificate Holder is the Annuitant if the Annuitant dies (or when
the Certificate Holder is a nonnatural person if the Annuitant dies):
(1) If the Beneficiary is the surviving spouse, the spousal Beneficiary
will be the successor Certificate Holder and may exercise all
Certificate Holder rights under the Contract and continue in the
Accumulation Period, or may elect (i) or (ii) 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 an Annuity
option (see 4.07);
(ii) 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 surviving spouse, options (i) or
(ii) above apply. Any portion of the Adjusted Current Value not
applied to an Annuity option within one year of the 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 must be made to the Annuitant's estate within five years
of the date of death.
(4) If the Beneficiary is an entity, a lump sum payment equal to the
Adjusted Current Value must be made within five years of the date of
death.
(b) When the Certificate Holder is not the Annuitant when the Certificate
Holder dies:
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3.12 Death Benefit Options Available to (1) If the Beneficiary is the Certificate Holder's surviving spouse, the
Beneficiary (Cont'd): spousal Beneficiary will be the successor Certificate Holder and may
exercise all Certificate Holder rights under the Contract and continue
in the Accumulation Period, or may elect (i) or (ii), 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 or 3 (see 4.07);
(ii) Receive, at any time, a lump sum payment equal to the
Surrender Value.
(2) If the Beneficiary is other than the Certificate Holder's surviving
spouse, options (i) or (ii) under (1) above apply. Any portion of the
death benefit not applied to an Annuity option 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 must be made to the Certificate Holder's estate within five
years of the date of death.
(4) If the Beneficiary is an entity, a lump sum payment equal to the
Surrender Value must be made within five years of the date of death.
(c) When the Certificate Holder is a natural person and not the Annuitant, when
the Annuitant dies, the Beneficiary (or the Certificate Holder if no
Beneficiary exists) may elect to:
(i) Apply all or some of the Adjusted Current Value to an Annuity
option within 60 days of the date of death; or
(ii) Receive a lump sum payment equal to the Adjusted Current Value.
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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 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 AG 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. An MVA may apply to amounts surrendered
from the AG Account.
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 (see 4.07);
(c) As a distribution under a systematic distribution option (see 3.10);
(d) At least 12 months after the date of the first Purchase Payment to the
Account, in an amount not to exceed the amount shown on Contract Schedule I
under Annual Waiver of Surrender Fee. This waiver of the Surrender Fee
applies to the first full or partial surrender in the calendar year. This
waiver is not available if a systematic distribution option has been in
effect at any time during the calendar year.
(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;
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3.14 Surrender Fee (Cont'd): (f) By Aetna under 3.16; 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.
(h) Under a qualified Contract when the amount withdrawn is equal to the minimum
distribution required by the Code for the Account calculated using a method
permitted under the Code and agreed to by Aetna.
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 Payment of Adjusted Current Value: Upon 90 days' written notice to the Certificate 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.
IV. ANNUITY PROVISIONS
- -------------------------------------------------------------------------------------------------------------------------------
4.01 Choices: The Certificate Holder may tell Aetna to apply any portion of the Adjusted
Current Value (minus any premium tax, if applicable,) to any Annuity option
(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; 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.
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4.01 Choices (Cont'd): 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).
During the Annuity Period when a Variable Annuity has been elected, at the request of
the Certificate Holder, all or any portion of the amount allocated to a Fund may be
transferred to any other Fund available during the Annuity Period. Four transfers,
without charge, are allowed each calendar year. Aetna reserves the right to change the
number of transfers allowed.
Transfer requests must be expressed as a percentage of the allocation among the Funds
of the amount upon which the Variable Annuity will be based. Aetna reserves the right
to establish a minimum transfer amount. Transfers will be effective as of the
Valuation Period in which Aetna receives a transfer request in good order at its Home
Office.
4.02 Terms of Annuity Options (a) When payments start, the age of the 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 is chosen Aetna will use the applicable current settlement
rate if it will provide higher Fixed Annuity payments.
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4.02 Terms of Annuity Options (d) For purposes of calculating the guaranteed first payment of a Variable
(Cont'd): 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 2 and 3 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 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 1 (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/Beneficiary: (a) Certificate Holder is Annuitant: When the Certificate Holder is the
Annuitant and the Annuitant dies under option 1 or 2, or both the
Annuitant and the second Annuitant die under option 3(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 3 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 Holder's, the surviving joint
Certificate Holder will be deemed the successor payee.
MP2CERT(5/97)
26
<PAGE>
4.03 Death of Annuitant/Beneficiary (b) Certificate Holder is Not Annuitant: When the Certificate Holder is not the
(Cont'd): Annuitant 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 Holder's, the surviving joint Certificate Holder will be
deemed the successor payee.
If the Annuitant dies under option 1 or 2, or both the Annuitant and the
second Annuitant die under option 3(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 3 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, 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 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.
(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.
4.04 Fund(s) Annuity Units -- Separate The number of each Fund's Annuity Units is based on the amount of the first
Account: 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.
MP2CERT(5/97)
27
<PAGE>
4.04 Fund(s) Annuity Units -- Such amount, or portion, of the variable payment will be divided by the appropriate
Separate Account Cont'd): 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 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.
4.05 Fund(s) Annuity Unit Value -- For any Valuation Period, a Fund Annuity unit value is equal to:
Separate 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 Factor(s) -- The Annuity net return factor(s) are used to compute all Separate Account
Separate Account: Annuity Payments 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.
MP2CERT(5/97)
28
<PAGE>
4.06 Annuity Net Return Factor(s) -- Payments shall not be changed due to changes due to changes in the mortality or
Separate Account (Cont'd): expense results or administrative charges.
4.07 Annuity Options: Option 1 -- Payments for a Stated Period of Time: Payments are made for the
number of years specified by the Certificate Holder. The number of years must
be at least five and not more than 30.
Option 2 - Life Income based on the life of one Annuitant: Payments are made until the
death of the Annuitant. When this option is elected, the Certificate Holder must also
choose one of the following:
(a) payments cease at the death of the Annuitant;
(b) payments are guaranteed for a specified period from five to 30 years;
(c) cash refund: when the Annuitant dies, the Beneficiary will receive a lump sum
payment equal to the amount applied to the Annuity option (less any premium
tax, if applicable) less the total amount of Annuity payments made prior to
such death. This cash refund feature is only available if the total amount
applied to the Annuity option is allocated to a Fixed Annuity.
Option 3 -- Life Income Based on the lives of two Annuitants: Payments are made for
the lives of two Annuitants, one of whom is designated the second Annuitant, and cease
only when both Annuitants have died. When this option is elected, the Certificate
Holder must also choose one of the following:
(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) 100% of the payment to continue after the first death and payments are
guaranteed for a period of five to 30 years;
(e) 100% of the payment to continue at the death of the designated second
Annuitant and 50% of the payment to continue at the death of the
Annuitant; or
(f) 100% of the payment continues after the first death with a cash refund
feature. When the Annuitant and designated second Annuitant die, the
Beneficiary will receive a lump sum payment equal to the amount applied to
the Annuity option (less any premium tax) less the total amount of Annuity
payments paid prior to such death. This cash refund feature is only available
if the total amount applied to the Annuity option is allocated to a Fixed
Annuity.
MP2CERT(5/97)
29
<PAGE>
4.07 Annuity Options (Cont'd): If a Fixed Annuity is chosen under Option 1, Option 2 (a) or (b), or Option 3
(a) or (d), the Certificate Holder may elect, at the time the Annuity option is
selected, an annual increase of one, two or three percent compounded annually.
As allowed under applicable state law, Aetna reserves the right to offer additional
Annuity options.
</TABLE>
MP2CERT(5/97)
30
<PAGE>
OPTION 1: Payments for a Specified Period
- --------------------------------------------------------------------------------
Monthly Amount for Each $1,000*
Rates for a Fixed Annuity with a 3% Guaranteed Interest Rate
- --------------------------------------------------------------------------------
Years Payment Years Payment
- ---------------------- --------------------- --------------------- -------------
5 17.91 18 5.96
6 15.14 19 5.73
7 13.16 20 5.51
8 11.68 21 5.32
9 10.53 22 5.15
10 9.61 23 4.99
11 8.86 24 4.84
12 8.24 25 4.71
13 7.71 26 4.59
14 7.26 27 4.47
15 6.87 28 4.37
16 6.53 29 4.27
17 6.23 30 4.18
- --------------------------------------------------------------------------------
First Month Amount for Each $1,000*
Rates for a Variable Annuity with a 3.5% Assumed Interest Rate
- --------------------------------------------------------------------------------
Years Payment Years Payment
- ---------------------- --------------------- --------------------- -------------
5 18.12 18 6.20
6 15.35 19 5.97
7 13.38 20 5.75
8 11.90 21 5.56
9 10.75 22 5.39
10 9.83 23 5.24
11 9.09 24 5.09
12 8.46 25 4.96
13 7.94 26 4.84
14 7.49 27 4.73
15 7.10 28 4.63
16 6.76 29 4.53
17 6.47 30 4.45
- --------------------------------------------------------------------------------
First Month Amount for Each $1,000*
Rates for a Variable Annuity with a 5% Assumed Interest Rate
- --------------------------------------------------------------------------------
Years Payment Years Payment
- ---------------------- --------------------- --------------------- -------------
5 18.74 18 6.94
6 15.99 19 6.71
7 14.02 20 6.51
8 12.56 21 6.33
9 11.42 22 6.17
10 10.51 23 6.02
11 9.77 24 5.88
12 9.16 25 5.76
13 8.64 26 5.65
14 8.20 27 5.54
15 7.82 28 5.45
16 7.49 29 5.36
17 7.20 30 5.28
- --------------------------------------------------------------------------------
* Net of any applicable premium tax deduction
MP2CERT(5/97)
31
<PAGE>
Option 2: Life Income Based on the Life of One Annuitant
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity with 3% Guaranteed Interest Rate
- -----------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b): Option 2(c):
payments for payments payments payments payments Cash Refund
life guaranteed 5 guaranteed 10 guaranteed 15 guaranteed 20
Adjusted years years years years
Age of ------------------ ----------------- ------------------ ----------------- ------------------ ------------------
Annuitant Male Female Male Female Male Female Male Female Male Female Male Female
- -------- ------- --------- ------- --------- ------- ---------- ------- --------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $ 4.27 $ 3.90 $ 4.26 $ 3.90 $ 4.22 $ 3.89 $ 4.17 $ 3.86 $ 4.08 $ 3.82 $ 4.04 $ 3.78
51 4.34 3.97 4.33 3.96 4.30 3.95 4.23 3.92 4.14 3.88 4.10 3.84
52 4.43 4.03 4.41 4.03 4.37 4.01 4.30 3.98 4.20 3.93 4.16 3.89
53 4.51 4.10 4.50 4.10 4.45 4.08 4.37 4.04 4.26 3.99 4.23 3.95
54 4.60 4.18 4.59 4.17 4.54 4.15 4.45 4.11 4.32 4.04 4.29 4.01
55 4.70 4.25 4.68 4.25 4.62 4.22 4.53 4.18 4.39 4.11 4.37 4.07
56 4.80 4.34 4.78 4.33 4.72 4.30 4.61 4.25 4.45 4.17 4.44 4.13
57 4.91 4.42 4.89 4.41 4.82 4.38 4.69 4.32 4.51 4.23 4.52 4.20
58 5.03 4.52 5.00 4.51 4.92 4.47 4.78 4.40 4.58 4.30 4.61 4.28
59 5.15 4.61 5.12 4.60 5.03 4.56 4.87 4.48 4.65 4.37 4.69 4.35
60 5.28 4.72 5.25 4.70 5.14 4.66 4.96 4.57 4.71 4.44 4.78 4.43
61 5.43 4.83 5.39 4.81 5.27 4.76 5.06 4.66 4.78 4.51 4.88 4.52
62 5.58 4.95 5.53 4.93 5.39 4.87 5.16 4.75 4.84 4.58 4.98 4.60
63 5.74 5.08 5.69 5.05 5.53 4.98 5.26 4.85 4.90 4.65 5.09 4.70
64 5.91 5.21 5.85 5.18 5.66 5.10 5.36 4.95 4.96 4.72 5.20 4.80
65 6.10 5.36 6.03 5.32 5.81 5.22 5.46 5.05 5.02 4.79 5.31 4.90
66 6.30 5.51 6.21 5.47 5.96 5.36 5.56 5.16 5.08 4.86 5.44 5.01
67 6.51 5.67 6.41 5.63 6.12 5.50 5.66 5.26 5.13 4.93 5.56 5.12
68 6.73 5.85 6.62 5.80 6.28 5.65 5.77 5.37 5.18 5.00 5.70 5.24
69 6.97 6.04 6.84 5.98 6.44 5.80 5.86 5.49 5.23 5.06 5.84 5.37
70 7.23 6.25 7.07 6.18 6.61 5.97 5.96 5.60 5.27 5.12 5.98 5.51
71 7.51 6.47 7.32 6.39 6.79 6.14 6.05 5.71 5.31 5.18 6.14 5.65
72 7.80 6.71 7.58 6.62 6.96 6.32 6.14 5.83 5.34 5.23 6.30 5.80
73 8.12 6.98 7.85 6.86 7.14 6.50 6.23 5.94 5.37 5.28 6.47 5.96
74 8.46 7.26 8.14 7.12 7.32 6.69 6.31 6.04 5.40 5.32 6.65 6.13
75 8.82 7.57 8.45 7.40 7.50 6.89 6.38 6.14 5.42 5.35 6.83 6.31
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
MP2CERT(5/97)
32
<PAGE>
Option 2: Life Income Based on the Life of One Annuitant
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
First Month Payment Amount for Each $1,000*
Rates for a Variable Annuity with 3.5% Assumed Interest Rate
- ----------------------------------------------------------------------------------------------------------------
Option 2(b): Option 2(b): Option 2(b): Option 2(b):
Option 2(a): payments payments payments payments
Adjusted payments for life guaranteed 5 years guaranteed 10 years guaranteed 15 years guaranteed 20 years
Age of ------------------- -------------------- -------------------- -------------------- --------------------
Annuitant Male Female Male Female Male Female Male Female Male Female
- -------- --------- --------- ---------- --------- ---------- --------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $ 4.56 $ 4.20 $ 4.55 $ 4.19 $ 4.51 $ 4.18 $ 4.45 $ 4.15 $ 4.36 $ 4.11
51 4.64 4.26 4.62 4.25 4.58 4.24 4.51 4.21 4.42 4.16
52 4.72 4.32 4.70 4.32 4.66 4.30 4.58 4.26 4.48 4.21
53 4.80 4.39 4.79 4.38 4.74 4.36 4.65 4.32 4.53 4.27
54 4.89 4.46 4.87 4.46 4.82 4.43 4.73 4.39 4.59 4.32
55 4.99 4.54 4.97 4.53 4.91 4.50 4.80 4.46 4.65 4.38
56 5.09 4.62 5.07 4.61 5.00 4.58 4.88 4.53 4.72 4.44
57 5.20 4.71 5.17 4.70 5.10 4.66 4.96 4.60 4.78 4.50
58 5.32 4.80 5.29 4.79 5.20 4.75 5.05 4.68 4.84 4.57
59 5.44 4.90 5.41 4.88 5.31 4.84 5.14 4.76 4.91 4.63
60 5.57 5.00 5.53 4.99 5.42 4.93 5.23 4.84 4.97 4.70
61 5.71 5.11 5.67 5.09 5.54 5.03 5.32 4.93 5.03 4.77
62 5.86 5.23 5.81 5.21 5.66 5.14 5.42 5.02 5.09 4.84
63 6.02 5.36 5.97 5.33 5.79 5.25 5.51 5.11 5.16 4.91
64 6.20 5.49 6.13 5.46 5.93 5.37 5.61 5.21 5.21 4.98
65 6.38 5.64 6.31 5.60 6.07 5.49 5.71 5.31 5.27 5.05
66 6.58 5.79 6.49 5.75 6.22 5.63 5.81 5.41 5.32 5.12
67 6.79 5.95 6.69 5.91 6.38 5.76 5.91 5.52 5.38 5.18
68 7.02 6.13 6.89 6.08 6.53 5.91 6.01 5.63 5.42 5.25
69 7.26 6.32 7.11 6.26 6.70 6.06 6.11 5.74 5.47 5.31
70 7.52 6.53 7.35 6.45 6.86 6.23 6.20 5.85 5.51 5.37
71 7.80 6.75 7.59 6.66 7.03 6.39 6.29 5.96 5.54 5.42
72 8.09 6.99 7.85 6.89 7.21 6.57 6.38 6.07 5.57 5.47
73 8.41 7.26 8.12 7.13 7.38 6.75 6.46 6.17 5.60 5.51
74 8.75 7.54 8.41 7.39 7.55 6.94 6.53 6.28 5.63 5.55
75 9.12 7.85 8.71 7.66 7.73 7.13 6.61 6.38 5.65 5.59
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
MP2CERT(5/97)
33
<PAGE>
Option 2: Life Income Based on the Life of One Annuitant
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
First Month Payment Amount for Each $1,000*
Rates for a Variable Annuity with 5% Assumed Interest Rate
- ----------------------------------------------------------------------------------------------------------------
Option 2(b): Option 2(b): Option 2(b): Option 2(b):
Option 2(a): payments payments payments payments
Adjusted payments for life guaranteed 5 years guaranteed 10 years guaranteed 15 years guaranteed 20 years
Age of ------------------- -------------------- -------------------- -------------------- --------------------
Annuitant Male Female Male Female Male Female Male Female Male Female
- -------- --------- --------- ---------- --------- ---------- --------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $ 5.48 $ 5.12 $ 5.46 $ 5.11 $ 5.41 $ 5.09 $ 5.34 $ 5.06 $5.24 $ 5.01
51 5.55 5.17 5.53 5.17 5.48 5.14 5.40 5.11 5.29 5.05
52 5.63 5.23 5.61 5.23 5.55 5.20 5.46 5.16 5.34 5.10
53 5.71 5.30 5.69 5.29 5.62 5.26 5.53 5.22 5.40 5.15
54 5.80 5.37 5.77 5.36 5.70 5.33 5.60 5.27 5.45 5.20
55 5.89 5.44 5.86 5.43 5.79 5.39 5.67 5.34 5.51 5.25
56 5.99 5.52 5.96 5.51 5.87 5.47 5.74 5.40 5.56 5.31
57 6.10 5.60 6.06 5.59 5.97 5.54 5.82 5.47 5.62 5.37
58 6.21 5.69 6.17 5.67 6.06 5.62 5.90 5.54 5.68 5.42
59 6.33 5.79 6.29 5.77 6.17 5.71 5.98 5.61 5.74 5.48
60 6.46 5.89 6.41 5.87 6.28 5.80 6.06 5.69 5.79 5.55
61 6.60 6.00 6.55 5.97 6.39 5.90 6.15 5.77 5.85 5.61
62 6.75 6.11 6.69 6.08 6.51 6.00 6.24 5.86 5.91 5.67
63 6.91 6.23 6.84 6.20 6.64 6.10 6.33 5.95 5.96 5.73
64 7.09 6.37 7.00 6.33 6.77 6.22 6.42 6.04 6.02 5.80
65 7.27 6.51 7.18 6.46 6.91 6.34 6.52 6.13 6.07 5.86
66 7.47 6.66 7.36 6.61 7.05 6.46 6.61 6.23 6.12 5.92
67 7.68 6.82 7.55 6.76 7.20 6.60 6.70 6.33 6.16 5.99
68 7.91 7.00 7.76 6.93 7.35 6.74 6.80 6.43 6.21 6.04
69 8.15 7.19 7.98 7.11 7.51 6.89 6.89 6.54 6.25 6.10
70 8.41 7.39 8.21 7.30 7.67 7.04 6.97 6.64 6.28 6.15
71 8.69 7.62 8.45 7.51 7.83 7.21 7.06 6.74 6.32 6.20
72 8.99 7.86 8.70 7.73 8.00 7.38 7.14 6.85 6.35 6.25
73 9.31 8.12 8.97 7.97 8.16 7.55 7.21 6.95 6.37 6.29
74 9.65 8.41 9.26 8.23 8.33 7.73 7.29 7.04 6.39 6.33
75 10.02 8.72 9.55 8.50 8.50 7.92 7.35 7.14 6.41 6.36
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
MP2CERT(5/97)
34
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity with 3% Guaranteed Interest Rate
Annuitant is Female and Second Annuitant is Male
- ----------------------------------------------------------------------------------------------------------------------
Adjusted Ages
- ---------------------------
Second
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) Option 3(f)
- ------------- ------------- -------------- --------------- -------------- -------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
55 50 $ 3.75 $ 4.07 $ 4.26 $ 3.75 $ 3.98 $ 3.72
55 55 3.88 4.25 4.47 3.87 4.06 3.85
55 60 3.99 4.44 4.71 3.98 4.12 3.94
60 55 4.06 4.47 4.71 4.06 4.37 4.02
60 60 4.24 4.71 4.99 4.23 4.47 4.17
60 65 4.38 4.97 5.32 4.38 4.54 4.29
65 60 4.49 5.01 5.32 4.48 4.89 4.39
65 65 4.72 5.33 5.70 4.71 5.02 4.59
65 70 4.93 5.68 6.15 4.91 5.14 4.74
70 65 5.07 5.75 6.17 5.05 5.60 4.87
70 70 5.40 6.21 6.70 5.36 5.79 5.13
70 75 5.69 6.68 7.32 5.62 5.96 5.29
75 70 5.89 6.82 7.40 5.81 6.63 5.48
75 75 6.37 7.45 8.15 6.23 6.92 5.78
75 80 6.78 8.11 8.99 6.54 7.15 5.93
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
MP2CERT(5/97)
35
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
First Month Payment Amount for Each $1,000*
Rates for a Variable Annuity with 3.5% Assumed Interest Rate
Annuitant is Female and Second Annuitant is Male
- --------------------------------------------------------------------------------------------------------
Adjusted Ages
- ---------------------------
Second
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
- ------------- ------------- -------------- --------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 4.03 $ 4.36 $ 4.55 $ 4.03 $ 4.27
55 55 4.16 4.54 4.76 4.15 4.34
55 60 4.27 4.73 5.00 4.26 4.40
60 55 4.34 4.76 5.00 4.34 4.65
60 60 4.51 4.99 5.27 4.50 4.74
60 65 4.66 5.25 5.61 4.65 4.82
65 60 4.76 5.29 5.60 4.75 5.16
65 65 4.99 5.61 5.99 4.98 5.30
65 70 5.19 5.97 6.44 5.17 5.41
70 65 5.34 6.03 6.46 5.31 5.88
70 70 5.67 6.49 6.99 5.62 6.07
70 75 5.95 6.96 7.61 5.87 6.23
75 70 6.16 7.10 7.68 6.07 6.90
75 75 6.64 7.73 8.43 6.48 7.19
75 80 7.04 8.39 9.29 6.79 7.42
- --------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
MP2CERT(5/97)
36
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
First Month Payment Amount for Each $1,000*
Rates for a Variable Annuity with 5% Assumed Interest Rate
Annuitant is Female and Second Annuitant is Male
- ---------------------------------------------------------------------------------------------------------------
Adjusted Ages
- --------------------------------
Second
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
- ---------------- --------------- --------------- -------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 4.93 $ 5.27 $ 5.46 $ 4.93 $ 5.17
55 55 5.04 5.44 5.66 5.04 5.23
55 60 5.15 5.63 5.91 5.14 5.29
60 55 5.21 5.65 5.89 5.21 5.53
60 60 5.37 5.87 6.16 5.37 5.62
60 65 5.52 6.14 6.51 5.51 5.70
65 60 5.61 6.16 6.49 5.60 6.03
65 65 5.83 6.49 6.87 5.82 6.15
65 70 6.04 6.84 7.34 6.00 6.27
70 65 6.17 6.90 7.33 6.13 6.73
70 70 6.49 7.35 7.87 6.44 6.91
70 75 6.77 7.84 8.51 6.68 7.07
75 70 6.97 7.96 8.56 6.87 7.75
75 75 7.45 8.60 9.33 7.27 8.04
75 80 7.86 9.28 10.20 7.57 8.27
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
MP2CERT(5/97)
37
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity with 3% Guaranteed Interest Rate
Annuitant is Male and Second Annuitant is Female
- ------------------------------------------------------------------------------------------------------------------------------
Adjusted Ages
- -------------------------------
Second
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) Option 3(f)
- --------------- --------------- --------------- -------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.13 $ 3.67
55 55 3.88 4.25 4.47 3.87 4.25 3.85
55 60 4.06 4.47 4.71 4.06 4.36 4.02
60 55 3.99 4.44 4.71 3.98 4.55 3.94
60 60 4.24 4.71 4.99 4.23 4.70 4.17
60 65 4.49 5.01 5.32 4.48 4.85 4.39
65 60 4.38 4.97 5.32 4.38 5.10 4.29
65 65 4.72 5.33 5.70 4.71 5.32 4.59
65 70 5.07 5.75 6.17 5.05 5.54 4.87
70 65 4.93 5.68 6.15 4.91 5.86 4.74
70 70 5.40 6.21 6.70 5.36 6.18 5.13
70 75 5.89 6.82 7.40 5.81 6.49 5.48
75 70 5.69 6.68 7.32 5.62 6.92 5.29
75 75 6.37 7.45 8.15 6.23 7.40 5.78
75 80 7.07 8.34 9.16 6.78 7.85 6.17
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
MP2CERT(5/97)
38
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
First Month Payment Amount for Each $1,000*
Rates for a Variable Annuity with 3.5% Assumed Interest Rate
Annuitant is Male and Second Annuitant is Female
- ---------------------------------------------------------------------------------------------------------------
Adjusted Ages
- --------------------------------
Second
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
- ---------------- --------------- --------------- -------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.42
55 55 4.16 4.54 4.76 4.15 4.54
55 60 4.34 4.76 5.00 4.34 4.64
60 55 4.27 4.73 5.00 4.26 4.83
60 60 4.51 4.99 5.27 4.50 4.98
60 65 4.76 5.29 5.60 4.75 5.13
65 60 4.66 5.25 5.61 4.65 5.39
65 65 4.99 5.61 5.99 4.98 5.60
65 70 5.34 6.03 6.46 5.31 5.81
70 65 5.19 5.97 6.44 5.17 6.14
70 70 5.67 6.49 6.99 5.62 6.47
70 75 6.16 7.10 7.68 6.07 6.77
75 70 5.95 6.96 7.61 5.87 7.20
75 75 6.64 7.73 8.43 6.48 7.68
75 80 7.33 8.62 9.45 7.02 8.13
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
MP2CERT(5/97)
39
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
First Month Payment Amount for Each $1,000*
Rates for a Variable Annuity with 5% Assumed Interest Rate
Annuitant is Male and Second Annuitant is Female
- ---------------------------------------------------------------------------------------------------------------------------
Adjusted Ages
- -----------------------------------
Second
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
- ------------------ ---------------- ----------------- ---------------- ----------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 4.88 $ 5.26 $ 5.48 4.88 $ 5.34
55 55 5.04 5.44 5.66 5.04 5.43
55 60 5.21 5.65 5.89 5.21 5.53
60 55 5.15 5.63 5.91 5.14 5.73
60 60 5.37 5.87 6.16 5.37 5.86
60 65 5.61 6.16 6.49 5.60 6.01
65 60 5.52 6.14 6.51 5.51 6.28
65 65 5.83 6.49 6.87 5.82 6.47
65 70 6.17 6.90 7.33 6.13 6.67
70 65 6.04 6.84 7.34 6.00 7.03
70 70 6.49 7.35 7.87 6.44 7.33
70 75 6.97 7.96 8.56 6.87 7.62
75 70 6.77 7.84 8.51 6.68 8.08
75 75 7.45 8.60 9.33 7.27 8.55
75 80 8.14 9.49 10.35 7.80 8.98
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
MP2CERT(5/97)
40
<PAGE>
- -------------------------------------------------------------------------------
Aetna Insurance Company of America
Home Office: 151 Farmington Avenue
P.O. Box 30670
Hartford, Connecticut 06150-0670
(800) 531-4547
Certificate of Group Annuity Coverage
- -------------------------------------------------------------------------------
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 CERTIFICATE 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.
MP2CERT(5/97)
-------------------------------------------------
Aetna Insurance Company of America
Home Office: 151 Farmington Avenue
P.O. Box 30670
Hartford, Connecticut 06150-0670
(800) 531-4547
You may call the toll-free number shown above for
answers to questions or to resolve a complaint.
Aetna Insurance Company of America, a stock
company, herein called Aetna, agrees to pay the
benefits stated in this Contract.
<TABLE>
<S> <C>
Specifications
|------------------------------------------------------------------------------------------------
| Plan
| SPECIMEN
|------------------------------------------------------------------------------------------------
| Type of Plan
| SPECIMEN
|------------------------------------------------------------------------------------------------
| Contract Holder
| SPECIMEN
| SPECIMEN
|------------------------------------------------------------------------------------------------
| Annuitant
| SPECIMEN
|------------------------------------------------------------------------------------------------
| Contract No.
| SPECIMEN
|------------------------------------------------------------------------------------------------
| Effective Date
| SPECIMEN
|------------------------------------------------------------------------------------------------
This Contract is delivered in YOUR STATE and is subject to the laws of that jurisdiction
</TABLE>
The variable features of the Contract are described in parts III and IV.
Right to Cancel
- --------------------------------------------------------------------------------
The Contract Holder may cancel this Contract within 10 days by returning it to
the agent from whom it was purchased, or to Aetna at the address shown above.
Within seven days of receiving the Contract at its home office, Aetna will
return the amount of Purchase Payment(s) received, plus any increase, or minus
any decrease, on the amount, if any, allocated to the Separate Account fund(s).
This page and the pages that follow constitute the entire Contract.
Signed at the home office on the Effective Date.
/s/ Dan Kearney /s/ Maria F. McKeon
President Secretary
Individual Variable, Fixed, or Combination Annuity Contract
Nonparticipating
ALL PAYMENTS AND VALUES PROVIDED BY THE 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.
I-MP2(5/97)
<PAGE>
<TABLE>
Specifications
- --------------------------- --------------------------------------------------------------------------------------------------------
<S> <C>
Guaranteed There is a guaranteed interest rate for Purchase Payment(s) held in the AG Account. (See Contract
Interest Rate Schedule I).
- --------------------------- --------------------------------------------------------------------------------------------------------
Deductions from the There will be deductions for mortality and expense risks and administrative fees. (See Contract
Separate Account Schedule I and II).
- --------------------------- --------------------------------------------------------------------------------------------------------
Deduction from Purchase Purchase Payment(s) are subject to a deduction for premium taxes, if any. (See 3.01.)
Payment(s)
- --------------------------- --------------------------------------------------------------------------------------------------------
Surrender Fee There will be a charge deducted upon surrender. (See Contract Schedule I).
</TABLE>
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. THEREFORE, IT IS IMPORTANT THAT
YOU READ THIS CONTRACT CAREFULLY.
I-MP2(5/97)
<PAGE>
Contract Schedule I
Accumulation Period
<TABLE>
Separate Account
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Separate Account: Variable Annuity Account I
Charges to Separate Account: A daily charge is deducted from any portion of 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% |
|_ _|
AICA Guaranteed Account (AG Account)
- -----------------------------------------------------------------------------------------------------------------------------------
Minimum Guaranteed Interest Rate: [3.0%] (effective annual rate of return)
Separate Account and AG Account
- -----------------------------------------------------------------------------------------------------------------------------------
Transfers: An unlimited number of Transfers are allowed 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].
Annual Waiver of Surrender Fee: As provided in 3.13 (d), the amount that may be withdrawn
without a surrender fee cannot exceed [10%] of the Current Value calculated on the date
Aetna receives a surrender request in good order at its Home Office.
Surrender Fee: For each surrender, the Surrender Fee will be determined as follows:
Surrender Fee
Length of Time from Deposit of (as percentage of
Net 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% _|
I-MP2(5/97)-1
3
<PAGE>
Separate Account and AG Account (Cont'd)
- ------------------------------------------------------------------------------------------------------------------------------------
Systematic Withdrawal Option (SWO): The specified payment or specified percentage may not be greater than [10%] of the
Account's Current Value at time of election.
</TABLE>
See 1. GENERAL DEFINITIONS for explanations.
I-MP2(5/97)-1
4
<PAGE>
Contract Schedule II
Annuity Period
<TABLE>
Separate Account
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Charges to Separate Account: A daily charge at an annual effective rate of [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 Annual Net If a Variable Annuity is chosen, an assumed annual net return rate of [5.0%] may be
Return Rate: 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: [3.0%] (effective annual rate of return)
</TABLE>
See 1. GENERAL DEFINITIONS for explanations.
I-MP2(5/97)-1
5
<PAGE>
TABLE OF CONTENTS
Page
I. GENERAL DEFINITIONS
- -----------------------------------------------------------------------------
1.01 Accumulation Period............................................8
1.02 Adjusted Current Value.........................................8
1.03 AICA Guaranteed Account (AG Account)...........................8
1.04 Annuitant......................................................8
1.05 Annuity........................................................8
1.06 Beneficiary....................................................8
1.07 Code...........................................................8
1.08 Contract.......................................................8
1.09 Contract Holder................................................8
1.10 Current Value..................................................9
1.11 Deposit Period.................................................9
1.12 Dollar Cost Averaging..........................................9
1.13 Fixed Annuity..................................................9
1.14 Fund(s)........................................................9
1.15 General Account................................................9
1.16 Guaranteed Rates -- AG Account.................................9
1.17 Guaranteed Term...............................................10
1.18 Guaranteed Term(s) Groups.....................................10
1.19 Maintenance Fee...............................................10
1.20 Market Value Adjustment (MVA).................................10
1.21 Matured Term Value............................................10
1.22 Matured Term Value Transfer...................................10
1.23 Maturity Date.................................................10
1.24 Net Purchase Payment(s).......................................10
1.25 Nonunitized Separate Account..................................10
1.26 Purchase Payment(s)...........................................11
1.27 Reinvestment..................................................11
1.28 Separate Account..............................................11
1.29 Surrender Value...............................................11
1.30 Transfers.....................................................11
1.31 Valuation Period (Period).....................................11
1.32 Variable Annuity..............................................11
II. GENERAL PROVISIONS
- -----------------------------------------------------------------------------
2.01 Change of Contract............................................12
2.02 Change of Fund(s).............................................13
2.03 Nonparticipating Contract.....................................13
2.04 Payments and Elections........................................13
2.05 State Laws....................................................13
2.06 Control of Contract...........................................13
2.07 Designation of Beneficiary....................................14
2.08 Misstatements and Adjustments.................................14
2.09 Incontestability..............................................14
2.10 Grace Period..................................................14
III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS
- -----------------------------------------------------------------------------
I-MP2(5/97)-1
6
<PAGE>
3.01 Net Purchase Payment..........................................14
3.02 Fund(s) Record Units -- Separate Account......................15
3.03 Net Return Factor(s) -- Separate Account......................15
3.04 Fund Record Unit Value -- Separate Account....................15
3.05 Market Value Adjustment.......................................15
3.06 Transfer of Current Value from the Funds or AG Account
During the Accumulation Period..............................17
3.07 Notice to the Contract Holder.................................18
3.08 Loans.........................................................18
3.09 Systematic Distribution Options...............................18
3.10 Death Benefit Amount..........................................19
3.11 Death Benefit Options available to Beneficiary................20
3.12 Liquidation of Surrender Value................................22
3.13 Surrender Fee.................................................22
3.14 Payment of Surrender Value....................................23
3.15 Payment of Adjusted Current Value.............................23
IV. ANNUITY PROVISIONS
- -----------------------------------------------------------------------------
4.01 Choices.......................................................23
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...............................................28
I-MP2(5/97)
7
<PAGE>
<TABLE>
<CAPTION>
I. GENERAL DEFINITIONS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1.01 Accumulation Period: The period during which the Net Purchase Payment(s) are applied to a Contract to
provide future Annuity payment(s).
1.02 Adjusted Current Value: The Current Value of a Contract plus or minus any aggregate AG Account MVA, if
applicable. (See 1.20)
1.03 AICA Guaranteed Account An accumulation option where Aetna guarantees stipulated rate(s) of interest for
(AG Account): specified periods of time. All assets of Aetna, including amounts in the
Nonunitized Separate Account, are available to meet the guarantees under the AG
Account.
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 death benefit under the Contract.
If the Contract is held by joint Contract Holders, the survivor will be deemed the
designated Beneficiary and any other Beneficiary on record will be treated as the
contingent Beneficiary.
1.07 Code The Internal Revenue Code of 1986, as it may be amended from time to time.
1.08 Contract This agreement between Aetna and the Contract Holder.
1.09 Contract Holder A person who purchases this Contract. Aetna reserves the right to limit ownership
to natural persons. The Contract Holder has all right, title and interest under the
Contract. If more than one Contract Holder owns the Contract, each Contract Holder
will be a joint Contract Holder. Any joint Contract Holder must be the spouse of
the other joint Contract Holder. Joint Contract Holders have joint ownership rights
and both must authorize exercising any ownership rights unless Aetna allows
otherwise.
I-MP2(5/97)
8
<PAGE>
1.10 Current Value: As of the most recent Valuation Period, the Net Purchase Payment and any additional
amount deposited pursuant to 3.10 plus any interest added to the portion allocated
to the AG 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.
1.11 Deposit Period: A day, 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/or
Reinvestments may be allocated to one or more AG Account Guaranteed Terms. Aetna
reserves the right to shorten or to extend the Deposit Period.
During a Deposit Period, Aetna may offer any number of Guaranteed Terms and more than
one Guaranteed Term of the same duration may be offered.
1.12 Dollar Cost Averaging: A program that permits the Contract Holder to systematically transfer amounts from
any of the Funds or an available AG Account Guaranteed Term to any of the Funds.
Aetna reserves the right to establish terms and conditions governing Dollar Cost
Averaging. Dollar Cost Averaging is not available when an SDO is in effect.
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 -- AG Account: Aetna will declare the interest rate(s) 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 period beginning with the first day of the Deposit
Period and ending on the Maturity Date. Guaranteed Rates are credited beginning
with the date of allocation. 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.
I-MP2(5/97)
9
<PAGE>
1.17 Guaranteed Term: The period of time specified by Aetna for which a specific Guaranteed Rate(s) is
offered on amounts invested during a specific Deposit Period. Guaranteed Terms are
made available subject to Aetna's terms and conditions, including, but not limited
to, Aetna's right to restrict allocations to new Net Purchase Payments (such as by
prohibiting Transfers into a particular Guaranteed Term from any other Guaranteed
Term or from any of the Funds, or by prohibiting Reinvestment of a Matured Term
Value to a particular Guaranteed Term). More than one Guaranteed Term of the same
duration may be offered during a Deposit Period.
1.18 Guaranteed Term(s) Groups: All AG Account Guaranteed Term(s) of the same duration (from the close of the
Deposit Period until the designated Maturity Date).
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
Contract is established and upon surrender of the entire Contract.
1.20 Market Value Adjustment (MVA): An adjustment that may apply to an amount withdrawn or
transferred from an AG 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 3.05. The adjustment is expressed as a percentage of each dollar withdrawn
or transferred.
1.21 Matured Term Value: The amount due on an AG Account Guaranteed Term's Maturity Date.
1.22 Matured Term Value Transfer: During the calendar month following an AG Account Maturity Date, the Contract 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 AG Account without an MVA. This provision only applies to the first such
written request received from the Contract Holder during this period for any Matured
Term Value.
1.23 Maturity Date: The last day of an AG Account Guaranteed Term.
1.24 Net Purchase Payment(s): The Purchase Payment less premium taxes, if applicable.
1.25 Nonunitized Separate Account: A separate account set up by Aetna under Title 38, Section 38a-433, of the
Connecticut General Statutes, that holds assets for AG Account Terms. There are no
discrete units for this Account. The Contract 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.
I-MP2(5/97)
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<PAGE>
1.26 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.
1.27 Reinvestment: Aetna will mail a notice to the Contract 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 Contract 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 Contract 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.
1.28 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.
1.29 Surrender Value: The amount payable by Aetna upon the surrender of any portion of the Contract.
1.30 Transfers: The movement of invested amounts among the available Fund(s) and/or any AG Account
Guaranteed Term made available subject to terms and conditions established by Aetna
during the Accumulation Period or, during the Annuity Period, among the available
Funds under a Variable Annuity.
1.31 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 asset value.
1.32 Variable Annuity: An Annuity with payments that vary with the net investment results of one or more
Funds held under the Separate Account.
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<PAGE>
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. This applies to subsequent Purchase Payments under the Contract. No advance
notice will be given to the Contract Holder.
Aetna may make any change that affects the AG Account Market Value Adjustment (3.05)
with at least 30 days' advance written notice to the Contract Holder. Any such change
shall become effective for any new Term.
The following will not be changed:
(a) Net Purchase Payment (1.24)
(b) AG Account Guaranteed Rate (1.16)
(c) Net Return Factor(s) -- Separate Account (3.03)
(d) Current Value (1.10)
(e) Surrender Value (1.29)
(f) Fund(s) Annuity Unit Value -- Separate Account (4.05)
(g) Annuity options (4.07)
(h) Fixed Annuity Interest Rates (4.01)
(i) Transfers (1.30).
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.
This Contract may be changed as deemed necessary by Aetna to comply with federal or
state law.
I-MP2(5/97)
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<PAGE>
2.02 Change of Fund(s): The assets of the Separate Account are segregated by Fund. If the shares of any
Fund are no longer available for investment by the Separate Account or if in our
judgment, further investment in such shares should become inappropriate in view of
the purpose of the Contract, Aetna may cease to make such Fund shares available for
investment under the Contract prospectively, or Aetna may substitute shares of
another Fund for shares already acquired. Aetna may also, from time to time, add
additional Funds. Any elimination, substitution or addition of Funds will be done
in accordance with applicable state and federal securities laws. Aetna reserves the
right to substitute shares of another Fund for shares already acquired without a
proxy vote.
2.03 Nonparticipating Contract: The Contract Holder or Beneficiaries will not have a right to share in the earnings
of Aetna.
2.04 Payments and Elections: While the Contract Holder is living, Aetna will pay the Contract Holder any Annuity
payments as and when due. After the Contract Holder's death, or at the death of the
first Contract Holder if the Contract is owned jointly, 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 3.14.
2.05 State Laws: The Contract complies with the laws of the state in which it is 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
all rights, title and interest for amounts held in the Contract. Choices made under
this Contract must be in writing. If the Contract is owned jointly, both joint
Contract Holders must authorize any Contract 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,
except to the extent permitted by law. The Contract 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 under the
Contract must be submitted to Aetna's home office in writing and will not be
effective until accepted by Aetna.
I-MP2(5/97)
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<PAGE>
2.07 Designation of Beneficiary: Each Contract Holder shall name his or her Beneficiary. If the Contract is owned
jointly, both Contract 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. If the Contract is owned jointly, at the death of one Certificate Holder,
the survivor will be deemed the Beneficiary; any other Beneficiary on record will be
deemed a contingent Beneficiary.
2.08 Misstatements and Adjustments: If Aetna finds the age of any Annuitant to 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.
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 3.16).
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 reserves the
right to pay premium taxes when due and deduct the amount from the current value
when we pay the tax or at a later date.
Each Net Purchase Payment will be allocated, as directed by the Contract Holder
among:
(a) AG Account Guaranteed Terms made available subject to terms and conditions
established by Aetna; and
(b) The Fund(s) in which the Separate Account invests.
For each Net Purchase Payment, the Contract Holder shall tell Aetna the percentage to
allocate to any available AG Account Guaranteed Terms and/or each Fund. Unless
different allocation instructions are not received for any subsequent Net Purchase
Payment, the allocation will be the same as for the Initial Purchase Payment. 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.
Aetna will declare from time to time the acceptability and the minimum amount for
additional Purchase Payments.
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3.02 Fund(s) Record Units -- The portion of the Net Purchase Payment(s) applied to each Fund under the Separate
Separate Account: 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 3.04) for the Valuation Period in which the
Purchase Payment is received in good order at Aetna's home office.
3.03 Net Return Factor(s) -- The net return factor(s) are used to compute all Separate Account record units for
Separate Account: any Fund.
The net return factor 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 record units and Fund 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.
3.04 Fund Record Unit Value A Fund record unit value is computed by multiplying the net return factors for the
-- Separate Account: 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.
3.05 Market Value Adjustment: An MVA will apply to any withdrawal from the AG Account before the end of a
Guaranteed Term when the withdrawal is due to:
(a) A Transfer; except for Transfers under the Dollar Cost Averaging program or, as
specified in 1.22 Matured Term Value Transfer;
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3.05 Market Value Adjustment (b) A full or partial surrender (including a free withdrawal under 3.13), except
(Cont'd): for a payment made (1) under an SDO (see 3.09), or (2) under a qualified
Contract, when the amount withdrawn is equal to the required minimum
distribution for the Account calculated using a method permitted under the Code
and agreed to by Aetna; or
(c) An election of an Annuity option (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 AG 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 AG Account on account of an election of
Annuity options 2 or 3 (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:
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3.05 Market Value Adjustment (a) At the close of the last business day of each week of the Deposit Period, a
(Cont'd): 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.
3.06 Transfer of Current Value from Before an Annuity option is elected, all or any portion of the Adjusted Current
the Funds or AG Account During Value of the Contract Holder's Account may be transferred from any Fund or
the Accumulation Period: Guaranteed Term of the AG Account:
(a) To any other Fund; or
(b) To any Guaranteed Term of the AG Account made available subject to terms and
conditions specified by Aetna 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 Contract 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 AG Account Guaranteed Term under the Dollar Cost Averaging
program, or amounts transferred as a Matured Term Value on or within one calendar
month after a Term's Maturity Date do not count against the annual Transfer limit.
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3.06 Transfer of Current Value from Amounts allocated to AG Account Guaranteed Terms may not be transferred to the Funds
the Funds or AG Account During or to another Guaranteed Term during a Deposit Period or for 90 days after the close
the Accumulation Period of a Deposit Period except for (1) Matured Term Value(s) during the calendar month
(Cont'd): following the Term's Maturity Date; (2) amounts used as a premium for an Annuity
option; (3) amounts transferred under the Dollar Cost Averaging Program; and (4)
amounts distributed under the Systematic Withdrawal Option.
3.07 Notice to the Contract Holder: The Contract Holder will receive quarterly statements from Aetna of:
(a) The value of any amounts held in:
(1) The AG 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.
3.08 Loans: Loans are not available under this Contract.
3.09 Systematic Distribution Options Aetna may, from time to time, make one or more systematic distribution options (SDOs)
(SDOs): available during the Accumulation Period. When an SDO is elected, Aetna will make
automatic payments from the Certificate Holder's Account. No Surrender Fee or MVA
will apply to the automatic payments made under an SDO.
Any SDO will be subject to the following criteria:
(a) Any SDO will be available to similarly situated contracts uniformly, and on
the basis of objective criteria consistently applied;
(b) The availability of any SDO may be limited by terms and conditions applicable
to the election of such SDO; and
(c) Aetna may discontinue the availability of an SDO at any time. Except to the
extent required to comply with applicable law, discontinuance of an SDO will
apply only to future elections and will not affect SDOs in effect at the time
an option is discontinued.
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3.10 Death Benefit Amount: If the Contract Holder or Annuitant dies before Annuity payments start, the
Beneficiary is entitled to a death benefit under the Contract. If the Contract is
owned jointly, the death benefit is paid at the death of the first joint Contract
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: The guaranteed death benefit is the greatest of:
(1) The sum of all Net Purchase Payment(s) made to the Contract (as of the
date of death) minus the sum of all amounts surrendered, applied to an
Annuity, or deducted from the Contract;
(2) The highest step-up value, as of the date of death, prior to the
Annuitant's 75th birthday. A step-up value is determined on each
anniversary of the Effective Date. Each step-up value is calculated as
the Contract'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 Contract's Current Value as of the date of death.
The excess, if any, of the guaranteed death benefit value over the Contract's Current
Value is determined as of the date of death. Any excess amount will be deposited to
the Contract 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
Contract's Current Value.
(b) Death of the Contract Holder if the Contract Holder is not the Annuitant: The
death benefit amount is the Adjusted Current Value on the claim date. A
Surrender Fee may apply to any full or partial surrender (see 3.13 and Contract
Schedule I).
(c) At the death of a spousal Beneficiary who continued the Contract in his or her
own name, the death benefit amount is equal to the Adjusted Current Value less
any applicable Surrender Fee (see 3.13 and Contract Schedule I) on the amount
of any Purchase Payment(s) made since the death of the Annuitant.
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3.10 Death Benefit Amount (Cont'd): (d) Death of the spousal beneficiary of a Contract Holder who was not the
Annuitant and who continued the Contract: The death benefit amount equals the
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).
3.11 Death Benefit Options available Prior to any election, or until amounts must be otherwise distributed under this
to Beneficiary: section, the Current Value will be retained in the Contract. The Beneficiary has
the right to allocate or reallocate any amount to any of the available investment
options (subject to an MVA, if applicable). The following options are available to
the Beneficiary:
(a) When the Contract Holder is the Annuitant: If the Annuitant dies, (or when the
Contract Holder is a nonnatural person):
(1) If the Beneficiary is the surviving spouse, the spousal Beneficiary will
be the successor Contract Holder and may exercise all Contract Holder
rights under the Contract and continue in the Accumulation Period, or may
elect (i) or (ii) below. Under the Code, distributions from the Contract
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 an Annuity option
(see 4.07); or
(ii) Receive, at any time, a lump sum payment equal to the Adjusted
Current Value.
(2) If the Beneficiary is other than the surviving spouse, then options (i)
or (ii) above apply. Any portion of the death benefit not applied to an
Annuity option within one year of the Contract 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 must be made to the Contract Holder's estate within five
years of the date of death. If the Contract Holder is a nonnatural
person, the death benefit is paid in one lump sum to the Contract Holder.
(4) If the Beneficiary is an entity, a lump sum payment equal to the Adjusted
Current Value must be made within five years of the date of death.
(b) When the Contract Holder is not the Annuitant when the Contract Holder dies:
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3.11 Death Benefit Options available (1) If the Beneficiary is the Contract Holder's surviving spouse, the spousal
to Beneficiary (Cont'd): Beneficiary will be the successor Contract Holder and may exercise all
Contract Holder rights under the Contract and continue in the
Accumulation Period, or may elect (i) or (ii) below. Under the Code,
distributions from the Contract 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 an Annuity
option (see 4.07); or
(ii) Receive, at any time, a lump sum payment equal to the Surrender
Value.
(2) If the Beneficiary is other than the Contract Holder's surviving spouse,
then options (i) or (ii) under (1) above apply. Any portion of the death
benefit not applied to an Annuity option within one year of the Contract
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
must be made to the Contract Holder's estate within five years of the
date of death.
(4) If the Beneficiary is an entity, a lump sum payment equal to the
Surrender Value must be made within five years of the date of death.
(c) When the Contract Holder is a natural person and not the Annuitant, when the
Annuitant dies, the Beneficiary (or the Contract Holder if no Beneficiary
exists) may elect to:
(i) Apply all or some of the Adjusted Current Value to an Annuity option
within 60 days of the date of death; or
(ii) Receive a lump sum payment equal to the Adjusted Current Value.
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3.12 Liquidation of Surrender Value: All or any portion of the Current Value may be surrendered at any time. Surrender
requests can be submitted as a percentage of the 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 AG 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. An MVA may apply to amounts surrendered
from the AG Account.
3.13 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 Net Purchase Payment 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 (see 4.07);
(c) As a distribution under an SDO (see 3.09);
(d) At least 12 months after the date of the first Purchase Payment to the
Contract, in an amount not to exceed the amount shown on Contract Schedule I
under Annual Waiver of Surrender Fee. This waiver of the Surrender Fee applies
to the first full or partial surrender in the calendar year. This waiver is not
available if a systematic distribution option has been in effect at any time
during the calendar year;
(e) For a full surrender where the Contract's Current Value is $2,500 or less and
no surrenders have been taken from the Contract within the prior 12 months;
(f) By Aetna under 3.15; or
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3.13 Surrender Fee (Cont'd): (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 Contract 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 Contract was issued.
(h) Under a qualified Contract when the amount withdrawn is equal to the minimum
distribution required by the Code for the Contract calculated using a method
permitted under the Code and agreed to by Aetna.
3.14 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.
3.15 Payment of Adjusted Current Upon 90 days' written notice to the Contract Holder, Aetna will terminate any
Value: Contract 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 the
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.
IV. ANNUITY PROVISIONS
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4.01 Choices: The Contract Holder may tell Aetna to apply any portion of the Adjusted Current
Value (minus any premium tax, if applicable,) to any Annuity under option (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; or
(b) The tenth anniversary of the last Purchase Payment. In lieu of the election of
an Annuity, the Contract Holder may tell Aetna to make a lump sum payment.
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4.01 Choices (Cont'd): 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 at least the Minimum Guaranteed Interest Rate (see Contract Schedule II),
but may reflect a higher interest rate. 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).
During the Annuity Period when a Variable Annuity has been elected, at the request of
the Contract Holder, all or any portion of the amount allocated to a Fund may be
transferred to any other Fund available during the Annuity Period. Four transfers,
without charge, are allowed each calendar year. Aetna reserves the right to change
the number of transfers allowed.
Transfer requests must be expressed as a percentage of the allocation among the Funds
of the amount upon which the Variable Annuity will be based. Aetna reserves the right
to establish a minimum transfer amount. Transfers will be effective as of the
Valuation Period in which Aetna receives a transfer request in good order at its Home
Office.
4.02 Terms of Annuity Options: (a) When payments start, the age of the 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 minimum annual Annuity payment amount based upon
increases reflected in the Consumer Price Index-Urban, (CPI-U) since July 1,
1993.
(c) If a Fixed Annuity is chosen Aetna will use the applicable current settlement
rate if it will provide higher Fixed Annuity payments.
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4.02 Terms of Annuity Options (d) For purposes of calculating the guaranteed first payment of a Variable Annuity
(Cont'd): 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 2 and 3 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 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 1 (see 4.07). The life expectancy of the
Annuitant and the Annuitant and second Annuitant shall be irrevocable upon the
election of an Annuity option.
4.03 Death of Annuitant/Beneficiary: (a) Contract Holder is Annuitant: When the Contract Holder is the Annuitant and
the Annuitant dies under option 1 or 2, or if both the Annuitant and the
second Annuitant die under option 3(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 3 has been elected and the Contract 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 Contract has joint Contract Holders, the surviving joint
Contract Holder will be deemed the successor payee.
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4.03 Death of Annuitant/Beneficiary (b) Contract Holder is Not Annuitant: When the Contract Holder is not the
(Cont'd): Annuitant and the Contract 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 Contract has joint
Contract Holders, the surviving joint Contract Holder will be deemed the
successor payee.
If the Annuitant dies under option 1 or 2, or if both the Annuitant and the
second Annuitant die under option 3(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 3 has been elected, and the Annuitant dies, the
remaining payments will continue to the Contract Holder.
(c) No Beneficiary Named/Surviving: If there is no Beneficiary, the present value
of any remaining payments will be paid in one sum to the Contract Holder, or if
the Contract Holder is not living, then to the Contract Holder's estate.
(d) 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.
(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.
4.04 Fund(s) Annuity Units - The number of each Fund's Annuity units is based on the amount of the first Variable
Separate Account: 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.
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4.04 Fund(s) Annuity Units -- Such amount, or portion, of the variable payment will be divided by the appropriate
Separate Account (Cont'd): 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 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.
4.05 Fund(s) Annuity Unit Value -- For any Valuation Period, a Fund Annuity unit value is equal to:
Separate 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 Factor(s) -- The Annuity net return factor(s) are used to compute Annuity payments for any Fund.
Separate Account:
The Annuity net return factor 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 hold 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 record units and Fund 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.
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4.07 Annuity Options: Option 1 -- Payments for a Specified Period: Payments are made for the number of
years specified by the Contract Holder. The number of years must be at least five
and not more than 30.
Option 2 -- Life income based on the life of one Annuitant: Payments are made until
the death of the Annuitant. When this option is elected, the Contract Holder must
also choose one of the following:
(a) payments cease at the death of the Annuitant;
(b) payments are guaranteed for a specified period from five to 30 years;
(c) cash refund: when the Annuitant dies, the Beneficiary will receive a lump sum
payment equal to the amount applied to the Annuity option (less any premium
tax, if applicable) less the total amount of Annuity payments made prior to
such death. This cash refund feature is only available if the total amount
applied to the Annuity option is allocated to a Fixed Annuity.
Option 3 -- Life income based on the lives of two Annuitants: Payments are made for
the lives of two Annuitants, one of whom is designated the second Annuitant, and
cease only when both Annuitants have died. When this option is elected, the Contract
Holder must also choose one of the following:
(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) 100% of the payment to continue after the first death and payments are
guaranteed for a period of five to 30 years;
(e) 100% of the payment to continue at the death of the designated second Annuitant
and 50% of the payment to continue at the death of the Annuitant; or
(f) 100% of the payment continues after the first death with a cash refund feature.
When the Annuitant and designated second Annuitant die, the Beneficiary will
receive a lump sum payment equal to the amount applied to the Annuity option
(less any premium tax) less the total amount of Annuity payments paid prior to
such death. This cash refund feature is only available if the total amount
applied to the Annuity option is allocated to a Fixed Annuity.
If a Fixed Annuity is chosen under Option 1, Option 2 (a) or (b), or Option 3 (a) or
(d), the Contract Holder may elect, at the time the Annuity option is selected, an
annual increase of one, two or three percent compounded annually.
As allowed under applicable state law, Aetna reserves the right to offer additional
Annuity options.
</TABLE>
I-MP2(5/97)
28
<PAGE>
OPTION 1: Payments for a Specified Period
- --------------------------------------------------------------------------------
Monthly Amount for Each $1,000*
Rates for a Fixed Annuity with a 3% Guaranteed Interest Rate
- --------------------------------------------------------------------------------
Years Payment Years Payment
- ---------------------- --------------------- --------------------- -------------
5 17.91 18 5.96
6 15.14 19 5.73
7 13.16 20 5.51
8 11.68 21 5.32
9 10.53 22 5.15
10 9.61 23 4.99
11 8.86 24 4.84
12 8.24 25 4.71
13 7.71 26 4.59
14 7.26 27 4.47
15 6.87 28 4.37
16 6.53 29 4.27
17 6.23 30 4.18
- --------------------------------------------------------------------------------
First Month Amount for Each $1,000*
Rates for a Variable Annuity with a 3.5% Assumed Interest Rate
- --------------------------------------------------------------------------------
Years Payment Years Payment
- ---------------------- --------------------- --------------------- -------------
5 18.12 18 6.20
6 15.35 19 5.97
7 13.38 20 5.75
8 11.90 21 5.56
9 10.75 22 5.39
10 9.83 23 5.24
11 9.09 24 5.09
12 8.46 25 4.96
13 7.94 26 4.84
14 7.49 27 4.73
15 7.10 28 4.63
16 6.76 29 4.53
17 6.47 30 4.45
- --------------------------------------------------------------------------------
First Month Amount for Each $1,000*
Rates for a Variable Annuity with a 5% Assumed Interest Rate
- --------------------------------------------------------------------------------
Years Payment Years Payment
- ---------------------- --------------------- --------------------- -------------
5 18.74 18 6.94
6 15.99 19 6.71
7 14.02 20 6.51
8 12.56 21 6.33
9 11.42 22 6.17
10 10.51 23 6.02
11 9.77 24 5.88
12 9.16 25 5.76
13 8.64 26 5.65
14 8.20 27 5.54
15 7.82 28 5.45
16 7.49 29 5.36
17 7.20 30 5.28
- --------------------------------------------------------------------------------
* Net of any applicable premium tax deduction
I-MP2(5/97)
29
<PAGE>
Option 2: Life Income Based on the Life of One Annuitant
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity with 3% Guaranteed Interest Rate
- -----------------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b): Option 2(c):
payments for payments payments payments payments Cash Refund
life guaranteed 5 guaranteed 10 guaranteed 15 guaranteed 20
Adjusted years years years years
Age of ----------------- ----------------- ------------------ ----------------- ------------------ ------------------
Annuitant Male Female Male Female Male Female Male Female Male Female Male Female
- -------- ------- --------- ------- --------- ------- ---------- ------- --------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $ 4.27 $ 3.90 $ 4.26 $ 3.90 $ 4.22 $ 3.89 $ 4.17 $ 3.86 $ 4.08 $ 3.82 $ 4.04 $ 3.78
51 4.34 3.97 4.33 3.96 4.30 3.95 4.23 3.92 4.14 3.88 4.10 3.84
52 4.43 4.03 4.41 4.03 4.37 4.01 4.30 3.98 4.20 3.93 4.16 3.89
53 4.51 4.10 4.50 4.10 4.45 4.08 4.37 4.04 4.26 3.99 4.23 3.95
54 4.60 4.18 4.59 4.17 4.54 4.15 4.45 4.11 4.32 4.04 4.29 4.01
55 4.70 4.25 4.68 4.25 4.62 4.22 4.53 4.18 4.39 4.11 4.37 4.07
56 4.80 4.34 4.78 4.33 4.72 4.30 4.61 4.25 4.45 4.17 4.44 4.13
57 4.91 4.42 4.89 4.41 4.82 4.38 4.69 4.32 4.51 4.23 4.52 4.20
58 5.03 4.52 5.00 4.51 4.92 4.47 4.78 4.40 4.58 4.30 4.61 4.28
59 5.15 4.61 5.12 4.60 5.03 4.56 4.87 4.48 4.65 4.37 4.69 4.35
60 5.28 4.72 5.25 4.70 5.14 4.66 4.96 4.57 4.71 4.44 4.78 4.43
61 5.43 4.83 5.39 4.81 5.27 4.76 5.06 4.66 4.78 4.51 4.88 4.52
62 5.58 4.95 5.53 4.93 5.39 4.87 5.16 4.75 4.84 4.58 4.98 4.60
63 5.74 5.08 5.69 5.05 5.53 4.98 5.26 4.85 4.90 4.65 5.09 4.70
64 5.91 5.21 5.85 5.18 5.66 5.10 5.36 4.95 4.96 4.72 5.20 4.80
65 6.10 5.36 6.03 5.32 5.81 5.22 5.46 5.05 5.02 4.79 5.31 4.90
66 6.30 5.51 6.21 5.47 5.96 5.36 5.56 5.16 5.08 4.86 5.44 5.01
67 6.51 5.67 6.41 5.63 6.12 5.50 5.66 5.26 5.13 4.93 5.56 5.12
68 6.73 5.85 6.62 5.80 6.28 5.65 5.77 5.37 5.18 5.00 5.70 5.24
69 6.97 6.04 6.84 5.98 6.44 5.80 5.86 5.49 5.23 5.06 5.84 5.37
70 7.23 6.25 7.07 6.18 6.61 5.97 5.96 5.60 5.27 5.12 5.98 5.51
71 7.51 6.47 7.32 6.39 6.79 6.14 6.05 5.71 5.31 5.18 6.14 5.65
72 7.80 6.71 7.58 6.62 6.96 6.32 6.14 5.83 5.34 5.23 6.30 5.80
73 8.12 6.98 7.85 6.86 7.14 6.50 6.23 5.94 5.37 5.28 6.47 5.96
74 8.46 7.26 8.14 7.12 7.32 6.69 6.31 6.04 5.40 5.32 6.65 6.13
75 8.82 7.57 8.45 7.40 7.50 6.89 6.38 6.14 5.42 5.35 6.83 6.31
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
I-MP2(5/97)
30
<PAGE>
Option 2 Life Income Based on the Life of One Annuitant
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
First Month Payment Amount for Each $1,000*
Rates for a Variable Annuity with 3.5% Assumed Interest Rate
- ----------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b):
payments for life payments payments payments payments
Adjusted guaranteed 5 years guaranteed 10 years guaranteed 15 years guaranteed 20 years
Age of ------------------- -------------------- -------------------- -------------------- --------------------
Annuitant Male Female Male Female Male Female Male Female Male Female
- -------- --------- --------- ---------- --------- ---------- --------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $ 4.56 $ 4.20 $ 4.55 $ 4.19 $ 4.51 $ 4.18 $ 4.45 $ 4.15 $ 4.36 $ 4.11
51 4.64 4.26 4.62 4.25 4.58 4.24 4.51 4.21 4.42 4.16
52 4.72 4.32 4.70 4.32 4.66 4.30 4.58 4.26 4.48 4.21
53 4.80 4.39 4.79 4.38 4.74 4.36 4.65 4.32 4.53 4.27
54 4.89 4.46 4.87 4.46 4.82 4.43 4.73 4.39 4.59 4.32
55 4.99 4.54 4.97 4.53 4.91 4.50 4.80 4.46 4.65 4.38
56 5.09 4.62 5.07 4.61 5.00 4.58 4.88 4.53 4.72 4.44
57 5.20 4.71 5.17 4.70 5.10 4.66 4.96 4.60 4.78 4.50
58 5.32 4.80 5.29 4.79 5.20 4.75 5.05 4.68 4.84 4.57
59 5.44 4.90 5.41 4.88 5.31 4.84 5.14 4.76 4.91 4.63
60 5.57 5.00 5.53 4.99 5.42 4.93 5.23 4.84 4.97 4.70
61 5.71 5.11 5.67 5.09 5.54 5.03 5.32 4.93 5.03 4.77
62 5.86 5.23 5.81 5.21 5.66 5.14 5.42 5.02 5.09 4.84
63 6.02 5.36 5.97 5.33 5.79 5.25 5.51 5.11 5.16 4.91
64 6.20 5.49 6.13 5.46 5.93 5.37 5.61 5.21 5.21 4.98
65 6.38 5.64 6.31 5.60 6.07 5.49 5.71 5.31 5.27 5.05
66 6.58 5.79 6.49 5.75 6.22 5.63 5.81 5.41 5.32 5.12
67 6.79 5.95 6.69 5.91 6.38 5.76 5.91 5.52 5.38 5.18
68 7.02 6.13 6.89 6.08 6.53 5.91 6.01 5.63 5.42 5.25
69 7.26 6.32 7.11 6.26 6.70 6.06 6.11 5.74 5.47 5.31
70 7.52 6.53 7.35 6.45 6.86 6.23 6.20 5.85 5.51 5.37
71 7.80 6.75 7.59 6.66 7.03 6.39 6.29 5.96 5.54 5.42
72 8.09 6.99 7.85 6.89 7.21 6.57 6.38 6.07 5.57 5.47
73 8.41 7.26 8.12 7.13 7.38 6.75 6.46 6.17 5.60 5.51
74 8.75 7.54 8.41 7.39 7.55 6.94 6.53 6.28 5.63 5.55
75 9.12 7.85 8.71 7.66 7.73 7.13 6.61 6.38 5.65 5.59
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
I-MP2(5/97)
31
<PAGE>
Option 2 Life Income Based on the Life of One Annuitant
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
First Month Payment Amount for Each $1,000*
Rates for a Variable Annuity with 5% Assumed Interest Rate
- ----------------------------------------------------------------------------------------------------------------
Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b):
payments for life payments payments payments payments
Adjusted guaranteed 5 years guaranteed 10 years guaranteed 15 years guaranteed 20 years
Age of ------------------- -------------------- -------------------- -------------------- --------------------
Annuitant Male Female Male Female Male Female Male Female Male Female
- -------- --------- --------- ---------- --------- ---------- --------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $ 5.48 $ 5.12 $ 5.46 $ 5.11 $ 5.41 $ 5.09 $ 5.34 $ 5.06 5.24 $ 5.01
51 5.55 5.17 5.53 5.17 5.48 5.14 5.40 5.11 5.29 5.05
52 5.63 5.23 5.61 5.23 5.55 5.20 5.46 5.16 5.34 5.10
53 5.71 5.30 5.69 5.29 5.62 5.26 5.53 5.22 5.40 5.15
54 5.80 5.37 5.77 5.36 5.70 5.33 5.60 5.27 5.45 5.20
55 5.89 5.44 5.86 5.43 5.79 5.39 5.67 5.34 5.51 5.25
56 5.99 5.52 5.96 5.51 5.87 5.47 5.74 5.40 5.56 5.31
57 6.10 5.60 6.06 5.59 5.97 5.54 5.82 5.47 5.62 5.37
58 6.21 5.69 6.17 5.67 6.06 5.62 5.90 5.54 5.68 5.42
59 6.33 5.79 6.29 5.77 6.17 5.71 5.98 5.61 5.74 5.48
60 6.46 5.89 6.41 5.87 6.28 5.80 6.06 5.69 5.79 5.55
61 6.60 6.00 6.55 5.97 6.39 5.90 6.15 5.77 5.85 5.61
62 6.75 6.11 6.69 6.08 6.51 6.00 6.24 5.86 5.91 5.67
63 6.91 6.23 6.84 6.20 6.64 6.10 6.33 5.95 5.96 5.73
64 7.09 6.37 7.00 6.33 6.77 6.22 6.42 6.04 6.02 5.80
65 7.27 6.51 7.18 6.46 6.91 6.34 6.52 6.13 6.07 5.86
66 7.47 6.66 7.36 6.61 7.05 6.46 6.61 6.23 6.12 5.92
67 7.68 6.82 7.55 6.76 7.20 6.60 6.70 6.33 6.16 5.99
68 7.91 7.00 7.76 6.93 7.35 6.74 6.80 6.43 6.21 6.04
69 8.15 7.19 7.98 7.11 7.51 6.89 6.89 6.54 6.25 6.10
70 8.41 7.39 8.21 7.30 7.67 7.04 6.97 6.64 6.28 6.15
71 8.69 7.62 8.45 7.51 7.83 7.21 7.06 6.74 6.32 6.20
72 8.99 7.86 8.70 7.73 8.00 7.38 7.14 6.85 6.35 6.25
73 9.31 8.12 8.97 7.97 8.16 7.55 7.21 6.95 6.37 6.29
74 9.65 8.41 9.26 8.23 8.33 7.73 7.29 7.04 6.39 6.3
75 10.02 8.72 9.55 8.50 8.50 7.92 7.35 7.14 6.41 6.36
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
I-MP2(5/97)
32
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity with 3% Guaranteed Interest Rate
Annuitant is Female and Second Annuitant is Male
- ----------------------------------------------------------------------------------------------------------------------
Adjusted Ages
- ---------------------------
Second
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) Option 3(f)
- ------------- ------------- -------------- --------------- -------------- -------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
55 50 $ 3.75 $ 4.07 $ 4.26 $ 3.75 $ 3.98 $ 3.72
55 55 3.88 4.25 4.47 3.87 4.06 3.85
55 60 3.99 4.44 4.71 3.98 4.12 3.94
60 55 4.06 4.47 4.71 4.06 4.37 4.02
60 60 4.24 4.71 4.99 4.23 4.47 4.17
60 65 4.38 4.97 5.32 4.38 4.54 4.29
65 60 4.49 5.01 5.32 4.48 4.89 4.39
65 65 4.72 5.33 5.70 4.71 5.02 4.59
65 70 4.93 5.68 6.15 4.91 5.14 4.74
70 65 5.07 5.75 6.17 5.05 5.60 4.87
70 70 5.40 6.21 6.70 5.36 5.79 5.13
70 75 5.69 6.68 7.32 5.62 5.96 5.29
75 70 5.89 6.82 7.40 5.81 6.63 5.48
75 75 6.37 7.45 8.15 6.23 6.92 5.78
75 80 6.78 8.11 8.99 6.54 7.15 5.93
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
I-MP2(5/97)
33
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
First Month Payment Amount for Each $1,000*
Rates for a Variable Annuity with 3.5% Assumed Interest Rate
Annuitant is Female and Second Annuitant is Male
- --------------------------------------------------------------------------------------------------------
Adjusted Ages
- ---------------------------
Second
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
- ------------- ------------- -------------- --------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 4.03 $ 4.36 $ 4.55 $ 4.03 $ 4.27
55 55 4.16 4.54 4.76 4.15 4.34
55 60 4.27 4.73 5.00 4.26 4.40
60 55 4.34 4.76 5.00 4.34 4.65
60 60 4.51 4.99 5.27 4.50 4.74
60 65 4.66 5.25 5.61 4.65 4.82
65 60 4.76 5.29 5.60 4.75 5.16
65 65 4.99 5.61 5.99 4.98 5.30
65 70 5.19 5.97 6.44 5.17 5.41
70 65 5.34 6.03 6.46 5.31 5.88
70 70 5.67 6.49 6.99 5.62 6.07
70 75 5.95 6.96 7.61 5.87 6.23
75 70 6.16 7.10 7.68 6.07 6.90
75 75 6.64 7.73 8.43 6.48 7.19
75 80 7.04 8.39 9.29 6.79 7.42
- --------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
I-MP2(5/97)
34
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
First Month Payment Amount for Each $1,000*
Rates for a Variable Annuity with 5% Assumed Interest Rate
Annuitant is Female and Second Annuitant is Male
- ---------------------------------------------------------------------------------------------------------------
Adjusted Ages
- --------------------------------
Second
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
- ---------------- --------------- --------------- -------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 4.93 $ 5.27 $ 5.46 $ 4.93 $ 5.17
55 55 5.04 5.44 5.66 5.04 5.23
55 60 5.15 5.63 5.91 5.14 5.29
60 55 5.21 5.65 5.89 5.21 5.53
60 60 5.37 5.87 6.16 5.37 5.62
60 65 5.52 6.14 6.51 5.51 5.70
65 60 5.61 6.16 6.49 5.60 6.03
65 65 5.83 6.49 6.87 5.82 6.15
65 70 6.04 6.84 7.34 6.00 6.27
70 65 6.17 6.90 7.33 6.13 6.73
70 70 6.49 7.35 7.87 6.44 6.91
70 75 6.77 7.84 8.51 6.68 7.07
75 70 6.97 7.96 8.56 6.87 7.75
75 75 7.45 8.60 9.33 7.27 8.04
75 80 7.86 9.28 10.20 7.57 8.27
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
I-MP2(5/97)
35
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Monthly Payment Amount for Each $1,000*
Rates for a Fixed Annuity with 3% Guaranteed Interest Rate
Annuitant is Male and Second Annuitant is Female
- ------------------------------------------------------------------------------------------------------------------------------
Adjusted Ages
- -------------------------------
Second
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) Option 3(f)
- --------------- --------------- --------------- -------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.13 $ 3.67
55 55 3.88 4.25 4.47 3.87 4.25 3.85
55 60 4.06 4.47 4.71 4.06 4.36 4.02
60 55 3.99 4.44 4.71 3.98 4.55 3.94
60 60 4.24 4.71 4.99 4.23 4.70 4.17
60 65 4.49 5.01 5.32 4.48 4.85 4.39
65 60 4.38 4.97 5.32 4.38 5.10 4.29
65 65 4.72 5.33 5.70 4.71 5.32 4.59
65 70 5.07 5.75 6.17 5.05 5.54 4.87
70 65 4.93 5.68 6.15 4.91 5.86 4.74
70 70 5.40 6.21 6.70 5.36 6.18 5.13
70 75 5.89 6.82 7.40 5.81 6.49 5.48
75 70 5.69 6.68 7.32 5.62 6.92 5.29
75 75 6.37 7.45 8.15 6.23 7.40 5.78
75 80 7.07 8.34 9.16 6.78 7.85 6.17
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
I-MP2(5/97)
36
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
First Month Payment Amount for Each $1,000*
Rates for a Variable Annuity with 3.5% Assumed Interest Rate
Annuitant is Male and Second Annuitant is Female
- ---------------------------------------------------------------------------------------------------------------
Adjusted Ages
- --------------------------------
Second
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
- ---------------- --------------- --------------- -------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.42
55 55 4.16 4.54 4.76 4.15 4.54
55 60 4.34 4.76 5.00 4.34 4.64
60 55 4.27 4.73 5.00 4.26 4.83
60 60 4.51 4.99 5.27 4.50 4.98
60 65 4.76 5.29 5.60 4.75 5.13
65 60 4.66 5.25 5.61 4.65 5.39
65 65 4.99 5.61 5.99 4.98 5.60
65 70 5.34 6.03 6.46 5.31 5.81
70 65 5.19 5.97 6.44 5.17 6.14
70 70 5.67 6.49 6.99 5.62 6.47
70 75 6.16 7.10 7.68 6.07 6.77
75 70 5.95 6.96 7.61 5.87 7.20
75 75 6.64 7.73 8.43 6.48 7.68
75 80 7.33 8.62 9.45 7.02 8.13
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
I-MP2(5/97)
37
<PAGE>
Option 3: Life Income Based on the Lives of Two Annuitants
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
First Month Payment Amount for Each $1,000*
Rates for a Variable Annuity with 5% Assumed Interest Rate
Annuitant is Male and Second Annuitant is Female
- ---------------------------------------------------------------------------------------------------------------------------
Adjusted Ages
- -----------------------------------
Second
Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e)
- ------------------ ---------------- ----------------- ---------------- ----------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 4.88 $ 5.26 $ 5.48 $ 4.88 $ 5.34
55 55 5.04 5.44 5.66 5.04 5.43
55 60 5.21 5.65 5.89 5.21 5.53
60 55 5.15 5.63 5.91 5.14 5.73
60 60 5.37 5.87 6.16 5.37 5.86
60 65 5.61 6.16 6.49 5.60 6.01
65 60 5.52 6.14 6.51 5.51 6.28
65 65 5.83 6.49 6.87 5.82 6.47
65 70 6.17 6.90 7.33 6.13 6.67
70 65 6.04 6.84 7.34 6.00 7.03
70 70 6.49 7.35 7.87 6.44 7.33
70 75 6.97 7.96 8.56 6.87 7.62
75 70 6.77 7.84 8.51 6.68 8.08
75 75 7.45 8.60 9.33 7.27 8.55
75 80 8.14 9.49 10.35 7.80 8.98
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Net of any applicable premium tax deduction
I-MP2(5/97)
38
<PAGE>
- --------------------------------------------------------------------------------
Aetna Insurance Company of America
Home Office: 151 Farmington Avenue
P.O. Box 30670
Hartford, Connecticut 06150-0670
(800) 531-4547
Individual Variable, Fixed, or Combination Annuity Contract
Nonparticipating
- --------------------------------------------------------------------------------
ALL PAYMENTS AND VALUES PROVIDED BY THE 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.
- --------
I-MP2(5/97)
Aetna Insurance Company of America
Endorsement
The Contract and Certificate are endorsed as follows.
1. On Contract Schedule I, delete Annual Waiver of Surrender Fee, and
replace it with the following.
Annual Waiver of Surrender Fee
As provided in 3.14(d), the total amount that may be withdrawn each
calendar year without a Surrender Fee cannot exceed [10%] of the Current
Value less any amounts distributed, and/or requested for distribution
under an SDO, during the calendar year. The amount available is based on
the Account's Current Value [as of the date the surrender request is
processed].
2. On Contract Schedule I, add the following.
Maximum Age for the Minimum Guaranteed Death Benefit: [85] years
3. On Contract Schedule I, add the following.
Fund for Allocation of Excess [Aetna Variable Encore Fund
Guaranteed Death Benefit (the money market fund)]
Amount
4. On Contract Schedule I, delete Systematic Withdrawal Option (SWO).
5. Add the following to Contract Schedule II under Separate Account.
Transfers
When a Variable Annuity has been elected, [four] free transfers are
allowed each calendar year among the Funds available during the Annuity
Period. Aetna reserves the right to allow additional transfers.
6. Delete Section 1.12, Current Value, and replace it with the following.
As of the most recent Valuation Period, the Current Value is equal to the
total of the Net Purchase Payment(s) made to the Account;
(a) Plus or minus the investment experience for the amount, if any,
allocated to one or more of the Funds;
(b) Plus interest added to the amount, if any, allocated to the AG
Account,
(c) Plus any additional amount deposited to the Account pursuant to
Section 3.11;
(d) Less the amount of any Maintenance Fees deducted;
(e) Less any additional fee(s) deducted;
(f) Less any amount(s) surrendered; and
(g) Less any amount(s) applied to an Annuity option.
MP2END(9/97)
1
<PAGE>
7. Delete Section 1.14, Dollar Cost Averaging, and replace it with the
following.
A program that permits the Certificate Holder to systematically transfer
amounts from one of the available Funds, or an available AG Account
Guaranteed Term, to one or more of the Funds. If the Certificate Holder
elects an AG Account Guaranteed Term available for Dollar Cost Averaging,
no MVA applies to amounts transferred under Dollar Cost Averaging. If
Dollar Cost Averaging from an AG Account Guaranteed Term is discontinued
before the end of the Dollar Cost Averaging period elected, Aetna will
automatically transfer the balance to a Guaranteed Term of the same
duration and an MVA will apply. The Certificate Holder may initiate a
transfer to another investment option and an MVA will apply. If a
Guaranteed Term of the same duration is not available, Aetna will
transfer the amount to the Guaranteed Term with the next shortest
duration. Aetna reserves the right to establish and change terms and
conditions governing Dollar Cost Averaging.
8. Add the following to Section 1.16, Fund(s).
The Funds, and the number of Funds, available during the Accumulation
Period may be different from those available during the Annuity Period.
Aetna reserves the right to limit the number of Funds available at any
one time and to limit the number of Funds the Certificate Holder may
select during the Accumulation Period and/or during the Annuity Period.
9. Add the following to Section 1.18, Guaranteed Rate -- AG Account.
Aetna may offer more than one Guaranteed Term of the same duration and
credit one with a higher rate contingent upon use only with Dollar Cost
Averaging (see 1.14).
10. Delete Section 1.33, Valuation Period (Period), and replace it with the
following.
1.33 Valuation Period (Period):
The date and time for which a Fund calculates its net asset value,
usually from 4:00 p.m. Eastern time each day the New York Stock Exchange
is open, to 4:00 p.m. the next such business day.
11. Add the following to I. General Definitions
Claim Date
The date when proof of death and the Beneficiary's claim for the death
benefit are received in good order at Aetna's home office.
Surrender Fee
A fee assessed to recover sales and administrative expenses incurred in
connection with the Account. Also called the deferred sales charge.
12. Delete the first sentence in Section 2.07, Designation of Beneficiary and
replace it with the following.
Each Certificate Holder shall name his or her Beneficiary and when
designating the Beneficiary may elect to specify in writing the form of
payment to the Beneficiary.
MP2END(9/97)
2
<PAGE>
13. Delete subsection (a) in Section 3.06, Market Value Adjustment, and
replace it with the following.
(a) A Transfer (including a Transfer from an AG Account Guaranteed Term
if Dollar Cost Averaging is discontinued); except for Transfers under
Dollar Cost Averaging, or as specified in 1.24, Matured Term Value
Transfer;
14. Delete the last paragraph in Section 3.07, Transfer of Current Value from
the Funds or AG Account During the Accumulation Period, and replace it
with the following.
Amounts allocated to AG Account Guaranteed Terms may not be transferred
to the Funds or to another Guaranteed Term during a Deposit Period or for
90 days after the close of a Deposit Period except for:
(a) Matured Term Value(s) during the calendar month following the Term's
Maturity Date;
(b) Amounts applied to an Annuity option;
(c) Amounts transferred under the Dollar Cost Averaging program;
(d) Amounts distributed under a Systematic Distribution Option; and
(e) Amounts transferred by Aetna if Dollar Cost Averaging is
discontinued.
15. Delete Section 3.11, Death Benefit Amount, and replace it with the
following.
3.11 Death Benefit During the Accumulation Period
If the Certificate Holder or Annuitant die before Annuity payments start,
the Beneficiary is entitled to a death benefit. If the Account is owned
jointly, the death benefit applies at the death of the first joint
Certificate Holder to die. The amount of the death benefit is determined
as follows.
(a) At the death of the Annuitant: the death benefit is the greater of:
(1) The minimum guaranteed death benefit (described below) as of the
date of death, plus any Purchase Payments made, and less any
amount(s) surrendered, applied to an Annuity option or deducted
from the Account, since the minimum guaranteed death benefit was
determined, or
(2) The Current Value on the Claim Date.
The minimum guaranteed death benefit is determined as follows: On the
Effective Date, the minimum guaranteed death benefit equals the
amount of the initial Purchase Payment. On each Effective Date
anniversary before the Annuitant reaches the maximum age shown on
Contract Schedule I, the minimum guaranteed death benefit is the
greater of:
(1) The prior minimum guaranteed death benefit, plus any Purchase
Payments made, and less any amount(s) surrendered, applied to an
Annuity option or deducted from the Account, since the minimum
guaranteed death benefit was previously determined, or
(2) The Current Value on the Effective Date anniversary.
MP2END(9/97)
3
<PAGE>
After the Annuitant reaches the maximum age shown on Contract
Schedule I, the minimum guaranteed death benefit is equal to the
minimum guaranteed death benefit determined on the Effective Date
anniversary immediately preceding the date the Annuitant attained the
maximum age shown on Contract Schedule I, plus any Purchase Payments
made, and less any amounts surrendered, applied to an Annuity option
or deducted from the Account.
On the Claim Date, if the minimum guaranteed death benefit is greater
than the Account's Current Value, the amount by which the minimum
guaranteed death benefit exceeds the Current Value is allocated to
the Fund shown on Contract Schedule I. The Beneficiary may elect a
death benefit option as permitted in Section 3.12.
(b) At the 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). The
Beneficiary may elect a death benefit option as permitted in Section
3.12.
(c) For a spousal Beneficiary of the original Certificate
Holder/Annuitant who becomes the successor Certificate Holder/
Annuitant: the initial minimum guaranteed death benefit equals the
Current Value on the Claim Date for the death benefit of the original
Certificate Holder/Annuitant. Thereafter, the guaranteed minimum
death benefit is determined as in (a) above.
16. Delete the last sentence of the first paragraph in Section 3.12, Death
Benefit Options Available to the Beneficiary, and replace it with the
following:
If the Certificate Holder has specified the form of payment to the
Beneficiary, the death benefit will be paid as elected by the Certificate
Holder in the Beneficiary designation. If the Certificate Holder has not
specified a form of payment, the Beneficiary may elect one of the
following options.
17. Delete subsection (d) in Section 3.14, Surrender Fee, and replace it with
the following.
(d) Each calendar year, an amount not to exceed the amount shown on
Contract Schedule I under Annual Waiver of Surrender Fee, or if
larger, the amount taken to meet the minimum distribution required by
the Code for the Account.
18. Add the following as Section 3.17.
3.17 Reinstatement
If allowed by state law, the Certificate Holder may reinstate the
proceeds of a full surrender, subject to terms and conditions established
by Aetna.
19. Delete the last sentence in the third paragraph in Section 4.01, Choices,
and replace it with the following.
If a Variable Annuity is chosen, the initial Annuity payment for the
option elected reflects the assumed annual return rate elected (see
Contract Schedule II). The Certificate Holder must allocate specified
amounts among the Funds available during the Annuity Period. Aetna
reserves
MP2END(9/97)
4
<PAGE>
the right to limit the number of Funds available at one time and
to limit the number of Funds the Certificate Holder may select during the
Accumulation Period and/or the Annuity Period. Subject to terms and
conditions established by Aetna, the Certificate Holder may transfer all
or any portion of the amount allocated to a Fund to another Fund. The
number of Transfers allowed without charge each year is shown on Contract
Schedule II.
20. Delete subsections (a) and (b) in Section 4.03, Death of
Annuitant/Beneficiary, and replace them with the following.
(a) Certificate Holder is the Annuitant: When the Certificate Holder is
the Annuitant and the Annuitant dies under option 1 or 2(b), or both
the Annuitant and the second Annuitant die under option 3(d), any
remaining payments will continue to the Beneficiary, or if elected by
the Beneficiary and not prohibited by the Certificate Holder in the
Beneficiary designation, the present value of any remaining payments
will be paid in one sum to the Beneficiary. If option 3 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.
(b) Certificate Holder is not the Annuitant: When the Certificate Holder
is not the Annuitant and the Certificate Holder dies, any 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.
If the Annuitant dies under option 1 or 2(b), or both the Annuitant
and second Annuitant die under option 3(d), any remaining payments
will continue to the Beneficiary, or if elected by the Beneficiary
and not prohibited by the Certificate Holder in the Beneficiary
designation, the present value of any remaining payments will be paid
in one sum to the Beneficiary. If option 3 has been elected and the
Annuitant dies, the remaining payments will continue to the
Certificate Holder.
Endorsed and made part of the Contract or the Certificate on the Effective Date
of the Contract or when approved, whichever is later.
/s/ Dan Kearney
President
Aetna Insurance Company of America
5
MP2END(9/97)
Aetna Insurance Company of America
Endorsement
The Contract is endorsed as follows.
1. On Contract Schedule I, delete Annual Waiver of Surrender Fee, and replace
it with the following.
Annual Waiver of Surrender Fee
As provided in 3.14(d), the total amount that may be withdrawn each calendar
year without a Surrender Fee cannot exceed [10%] of the Current Value less
any amounts distributed, and/or requested for distribution under an SDO,
during the calendar year. The amount available is based on the Contract's
Current Value [as of the date the surrender request is processed].
2. On Contract Schedule I, add the following.
Maximum Age for the Minimum Guaranteed Death Benefit: [85] years
3. On Contract Schedule I, add the following.
Fund for Allocation of Excess [Aetna Variable Encore Fund (the money market
fund)] Guaranteed Death Benefit Amount
4. On Contract Schedule I, delete Systematic Withdrawal Option (SWO).
5. Add the following to Contract Schedule II under Separate Account.
Transfers
When a Variable Annuity has been elected, [four] free transfers are allowed
each calendar year among the Funds available during the Annuity Period.
Aetna reserves the right to allow additional transfers.
6. Delete Section 1.12, Current Value, and replace it with the following.
As of the most recent Valuation Period, the Current Value is equal to the
total of the Net Purchase Payment(s) made to the Contract;
(a) Plus or minus the investment experience for the amount, if any,
allocated to one or more of the Funds;
(b) Plus interest added to the amount, if any, allocated to the AG Account,
(c) Plus any additional amount deposited to the Contract pursuant to Section
3.11;
(d) Less the amount of any Maintenance Fees deducted;
(e) Less any additional fee(s) deducted;
(f) Less any amount(s) surrendered; and
(g) Less any amount(s) applied to an Annuity option.
IMP2END(9/97)
1
<PAGE>
7. Delete Section 1.14, Dollar Cost Averaging, and replace it with the
following.
A program that permits the Contract Holder to systematically transfer
amounts from one of the available Funds, or an available AG Account
Guaranteed Term, to one or more of the Funds. If the Contract Holder elects
an AG Account Guaranteed Term available for Dollar Cost Averaging, no MVA
applies to amounts transferred under Dollar Cost Averaging. If Dollar Cost
Averaging from an AG Account Guaranteed Term is discontinued before the end
of the Dollar Cost Averaging period elected, Aetna will automatically
transfer the balance to a Guaranteed Term of the same duration and an MVA
will apply. The Contract Holder may initiate a transfer to another
investment option and an MVA will apply. If a Guaranteed Term of the same
duration is not available, Aetna will transfer the amount to the Guaranteed
Term with the next shortest duration. Aetna reserves the right to establish
and change terms and conditions governing Dollar Cost Averaging.
8. Add the following to Section 1.16, Fund(s).
The Funds, and the number of Funds, available during the Accumulation Period
may be different from those available during the Annuity Period. Aetna
reserves the right to limit the number of Funds available at any one time
and to limit the number of Funds the Contract Holder may select during the
Accumulation Period and/or during the Annuity Period.
9. Add the following to Section 1.18, Guaranteed Rate -- AG Account.
Aetna may offer more than one Guaranteed Term of the same duration and
credit one with a higher rate contingent upon use only with Dollar Cost
Averaging (see 1.14).
10. Delete Section 1.33, Valuation Period (Period), and replace it with the
following.
1.33 Valuation Period (Period):
The date and time for which a Fund calculates its net asset value, usually
from 4:00 p.m. Eastern time each day the New York Stock Exchange is open, to
4:00 p.m. the next such business day.
11. Add the following to I. General Definitions
Claim Date
The date when proof of death and the Beneficiary's claim for the death
benefit are received in good order at Aetna's home office.
Surrender Fee
A fee assessed to recover sales and administrative expenses incurred in
connection with the Contract. Also called the deferred sales charge.
12. Delete the first sentence in Section 2.07, Designation of Beneficiary and
replace it with the following.
Each Contract Holder shall name his or her Beneficiary and when designating
the Beneficiary may elect to specify in writing the form of payment to the
Beneficiary.
2
<PAGE>
13. Delete subsection (a) in Section 3.06, Market Value Adjustment, and replace
it with the following.
(a) A Transfer (including a Transfer from an AG Account Guaranteed Term if
Dollar Cost Averaging is discontinued); except for Transfers under
Dollar Cost Averaging, or as specified in 1.24, Matured Term Value
Transfer;
14. Delete the last paragraph in Section 3.07, Transfer of Current Value from
the Funds or AG Account During the Accumulation Period, and replace it with
the following.
Amounts allocated to AG Account Guaranteed Terms may not be transferred to
the Funds or to another Guaranteed Term during a Deposit Period or for 90
days after the close of a Deposit Period except for:
(a) Matured Term Value(s) during the calendar month following the Term's
Maturity Date;
(b) Amounts applied to an Annuity option;
(c) Amounts transferred under the Dollar Cost Averaging program;
(d) Amounts distributed under a Systematic Distribution Option; and
(e) Amounts transferred by Aetna if Dollar Cost Averaging is discontinued.
15. Delete Section 3.11, Death Benefit Amount, and replace it with the
following.
3.11 Death Benefit During the Accumulation Period
If the Contract Holder or Annuitant die before Annuity payments start, the
Beneficiary is entitled to a death benefit. If the Contract is owned
jointly, the death benefit applies at the death of the first joint Contract
Holder to die. The amount of the death benefit is determined as follows.
(a) At the death of the Annuitant: the death benefit is the greater of:
(1) The minimum guaranteed death benefit (described below) as of the
date of death, plus any Purchase Payments made, and less any
amount(s) surrendered, applied to an Annuity option or deducted from
the Contract, since the minimum guaranteed death benefit was
determined, or
(2) The Current Value on the Claim Date.
The minimum guaranteed death benefit is determined as follows: On
the Effective Date, the minimum guaranteed death benefit equals the
amount of the initial Purchase Payment. On each Effective Date
anniversary before the Annuitant reaches the maximum age shown on
Contract Schedule I, the minimum guaranteed death benefit is the
greater of:
(1) The prior minimum guaranteed death benefit, plus any Purchase
Payments made, and less any amount(s) surrendered, applied to an
Annuity option or deducted from the Contract, since the minimum
guaranteed death benefit was previously determined, or
(2) The Current Value on the Effective Date anniversary.
3
<PAGE>
After the Annuitant reaches the maximum age shown on Contract
Schedule I, the minimum guaranteed death benefit is equal to the
minimum guaranteed death benefit determined on the Effective
Date anniversary immediately preceding the date the Annuitant
attained the maximum age shown on Contract Schedule I, plus any
Purchase Payments made, and less any amounts surrendered,
applied to an Annuity option or deducted from the Contract.
On the Claim Date, if the minimum guaranteed death benefit is
greater than the Contract's Current Value, the amount by which
the minimum guaranteed death benefit exceeds the Current Value
is allocated to the Fund shown on Contract Schedule I. The
Beneficiary may elect a death benefit option as permitted in
Section 3.12.
(b) At the death of the Contract Holder if the Contract Holder is not the
Annuitant: the death benefit amount is the Contract'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). The Beneficiary
may elect a death benefit option as permitted in Section 3.12.
(c) For a spousal Beneficiary of the original Contract Holder/Annuitant who
becomes the successor Contract Holder/ Annuitant: the initial minimum
guaranteed death benefit equals the Current Value on the Claim Date for
the death benefit of the original Contract Holder/Annuitant. Thereafter,
the guaranteed minimum death benefit is determined as in (a) above.
16. Delete the last sentence of the first paragraph in Section 3.12, Death
Benefit Options Available to the Beneficiary, and replace it with the
following:
If the Contract Holder has specified the form of payment to the Beneficiary,
the death benefit will be paid as elected by the Contract Holder in the
Beneficiary designation. If the Contract Holder has not specified a form of
payment, the Beneficiary may elect one of the following options.
17. Delete subsection (d) in Section 3.14, Surrender Fee, and replace it with
the following.
(d) Each calendar year, an amount not to exceed the amount shown on Contract
Schedule I under Annual Waiver of Surrender Fee, or if larger, the
amount taken to meet the minimum distribution required by the Code for
the Contract.
18. Add the following as Section 3.17.
3.17 Reinstatement
If allowed by state law, the Contract Holder may reinstate the proceeds of a
full surrender, subject to terms and conditions established by Aetna.
19. Delete the last sentence in the third paragraph in Section 4.01, Choices,
and replace it with the following.
If a Variable Annuity is chosen, the initial Annuity payment for the option
elected reflects the assumed annual return rate elected (see Contract
Schedule II). The Contract Holder must allocate specified amounts among the
Funds available during the Annuity Period. Aetna reserves the right to limit
the number of Funds available at one time and to limit the number of Funds
the Contract
4
<PAGE>
Holder may select during the Accumulation Period and/or the Annuity Period.
Subject to terms and conditions established by Aetna, the Contract Holder
may transfer all or any portion of the amount allocated to a Fund to another
Fund. The number of Transfers allowed without charge each year is shown on
Contract Schedule II.
20. Delete subsections (a) and (b) in Section 4.03, Death of
Annuitant/Beneficiary, and replace them with the following.
(a) Contract Holder is the Annuitant: When the Contract Holder is the
Annuitant and the Annuitant dies under option 1 or 2(b), or both the
Annuitant and the second Annuitant die under option 3(d), any remaining
payments will continue to the Beneficiary, or if elected by the
Beneficiary and not prohibited by the Contract Holder in the Beneficiary
designation, the present value of any remaining payments will be paid in
one sum to the Beneficiary. If option 3 has been elected and the
Contract 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 Contract has
joint Contract Holders, the surviving joint Contract Holder will be
deemed the successor payee.
(b) Contract Holder is not the Annuitant: When the Contract Holder is not
the Annuitant and the Contract Holder dies, any 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 Contract has joint Contract Holders, the surviving joint Contract
Holder will be deemed the successor payee.
If the Annuitant dies under option 1 or 2(b), or both the Annuitant and
second Annuitant die under option 3(d), any remaining payments will
continue to the Beneficiary, or if elected by the Beneficiary and not
prohibited by the Contract Holder in the Beneficiary designation, the
present value of any remaining payments will be paid in one sum to the
Beneficiary. If option 3 has been elected and the Annuitant dies, the
remaining payments will continue to the Contract Holder.
Endorsed and made part of the Contract on the Effective Date of the Contract or
when approved, whichever is later.
[Signature of Dan Kearney]
President
Aetna Insurance Company of America
FORM OF
FUND PARTICIPATION AGREEMENT
among
CALVERT RESPONSIBLY INVESTED BALANCED PORTFOLIO
and
CALVERT ASSET MANAGEMENT COMPANY, INC.
and
AETNA INSURANCE COMPANY OF AMERICA
Aetna Insurance Company of America (the "Company"), CALVERT RESPONSIBLY
INVESTED BALANCED PORTFOLIO (the "Fund") and CALVERT ASSET MANAGEMENT COMPANY,
INC. (the "Adviser") hereby agree to an arrangement whereby the Fund shall be
made available to serve as underlying investment media for Variable Annuity or
Variable Life Contracts ("Contracts") to be issued by the Company.
1. Establishment of Accounts; Availability of Fund.
(a) The Company represents that it has established Variable Annuity
Account I and II and may establish such other accounts as may be
set forth in Schedule A attached hereto and as may be amended from
time to time with the mutual consent of the parties hereto (the
"Accounts"), each of which is a separate account under Connecticut
Insurance law, and has registered or will register each of the
Accounts (except for such Accounts for which no such registration
is required) as a unit investment trust under the Investment
Company Act of 1940 (the "1940 Act"), to serve as an investment
vehicle for the Contracts. Each Contract provides for the
allocation of net amounts received by the Company to an Account
for investment in the shares of one or more specified open-end
management investment companies available through that Account as
underlying investment media. Selection of a particular investment
management company and changes therein from time to time are made
by the participant, beneficiary or Contract owner, as applicable
under a particular Contract.
(b) The Adviser represents and warrants that the investments of the
series of the Fund (each designated a "Portfolio") specified in
Schedule B attached hereto (as may be amended from time to time
with the mutual consent of the parties hereto) will at all times
be adequately diversified within the meaning of Section 817(h) of
the Internal Revenue Code of 1986, as amended (the "Code"), and
the Regulations thereunder, and that at all times while this
Agreement is in effect, all beneficial interests will be owned by
one or more insurance companies or by any other party permitted
under Section 1.817-5(f)(3) of the Regulations promulgated under
the Code or by the successor
<PAGE>
thereto, or by any other party permitted under a Revenue Ruling or
private letter ruling granted by the Internal Revenue Service.
2. Pricing Information; Orders; Settlement.
(a) The Fund will make Fund shares available to be purchased by the
Company, and will accept redemption orders from the Company, on
behalf of each Account at the net asset value applicable to each
order on those days on which the Fund calculates its net asset
value (a "Business Day"). Fund shares shall be purchased and
redeemed in such quantity and at such time determined by the
Company to be necessary to meet the requirements of those
Contracts for which the Fund serves as underlying investment
media, provided, however, that the Board of Directors of the Fund
(hereinafter the "Directors") may upon reasonable notice to the
Company, refuse to sell shares of any Portfolio to any person, or
suspend or terminate the offering of shares of any Portfolio if
such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Directors,
acting in good faith and in the best interests of the shareholders
of any Portfolio and is acting in compliance with their fiduciary
obligations under federal and/or any applicable state laws.
(b) The Fund will provide to the Company closing net asset value,
dividend and capital gain information at the close of trading each
day that the New York Stock Exchange (the "Exchange") is open
(each such day a "Business Day"), and in no event later than 7:00
p.m. Eastern Standard Time on such Business Day. The Company will
send via facsimile or electronic transmission to the Fund or its
specified agent orders to purchase and/or redeem Fund shares by
10:00 a.m. Eastern Standard Time the following business day.
Payment for net purchases will be wired by the Company to an
account designated by the Fund to coincide with the order for
shares of the Fund.
(c) The Fund hereby appoints the Company as its agent for the limited
purpose of accepting purchase and redemption orders for Fund
shares relating to the Contracts from Contract owners or
participants. Orders from Contract owners, participants or
beneficiaries received from any distributor of the Contracts
(including affiliates of the Company) by the Company, acting as
agent for the Fund, prior to the close of the Exchange on any
given business day will be executed by the Fund at the net asset
value determined as of the close of the Exchange on such Business
Day, provided that the Fund receives written (or facsimile) notice
of such order by 10 a.m. Eastern Standard Time on the next
following Business Day. Any orders received by the Company acting
as agent on such day but after the close of the Exchange will be
executed by the Fund at the net asset value determined as of the
close of the Exchange on the next business day following the day
of receipt of such order, provided that the Fund receives written
(or facsimile) notice of such order by
2
<PAGE>
10 a.m. Eastern Standard Time within two days following the day of
receipt of such order.
(d) Payments for net redemptions of shares of the Fund will be wired
by the Fund to an account designated by the Company. Payments for
net purchases of the Fund will be wired by the Company to an
account designated by the Fund on the same Business Day the
Company places an order to purchase Fund shares. Payments shall be
in federal funds transmitted by wire.
(e) Each party has the right to rely on information or confirmations
provided by the other party (or by any affiliate of the other
party), and shall not be liable in the event that an error is a
result of any misinformation supplied by the other party.
(f) The Company agrees to purchase and redeem the shares of the
Portfolios named in Schedule B offered by the then current
prospectus and statement of additional information of the Fund in
accordance with the provisions of such prospectus and statement of
additional information. The Company shall not permit any person
other than a Contract owner, participant or beneficiary to give
instructions to the Company which would require the Company to
redeem or exchange shares of the Fund. This provision shall not be
construed to prohibit the Company from substituting shares of
another fund, as permitted by law.
3. Expenses.
(a) Except as otherwise provided in this Agreement, all expenses
incident to the performance by the Fund under this Agreement shall
be paid by the Fund or the Adviser, including the cost of
registration of Fund shares with the Securities and Exchange
Commission (the "SEC") and in states where required. The Fund and
Adviser shall pay no fee or other compensation to the Company
under this Agreement, and the Company shall pay no fee or other
compensation to the Fund or Adviser, except as provided herein and
in Schedule C attached hereto and made a part of this Agreement as
may be amended from time to time with the mutual consent of the
parties hereto. All expenses incident to performance by each party
of its respective duties under this Agreement shall be paid by
that party, unless otherwise specified in this Agreement.
(b) The Fund or the Adviser shall provide to the Company Post Script
files of periodic fund reports to shareholders and other materials
that are required by law to be sent to Contract owners. In
addition, the Fund or the Adviser shall provide the Company with a
sufficient quantity of its prospectuses, statements of additional
information and any supplements to any of these materials, to be
used in connection with the offerings and transactions
contemplated by this
3
<PAGE>
Agreement. In addition, the Fund shall provide the Company with a
sufficient quantity of its proxy material that is required to be
sent to Contract owners. The Adviser shall be permitted to review
and approve the typeset form of such material prior to such
printing provided such material has been provided by the Adviser
to the Company within a reasonable period of time prior to
typesetting.
(c) In lieu of the Fund's or Adviser's providing printed copies of
prospectuses, statements of additional information and any
supplements to any of these materials, the Company shall have the
right to request that the Fund transmit a copy of such materials
in an electronic format (Post Script files), which the Company may
use to have such materials printed together with similar materials
of other Account funding media that the Company or any distributor
will distribute to existing or prospective Contract owners,
participants or beneficiaries.
4. Representations.
The Company agrees that it and its agents shall not, without the written
consent of the Fund or the Adviser, make representations concerning the Fund, or
its shares except those contained in the then current prospectuses and in
current printed sales literature approved by or deemed approved by the Fund or
the Adviser.
5. Termination.
This Agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of either the Company, the Adviser or the Fund, upon
sixty days advance written notice to the other parties;
(b) at the option of the Company, upon one week advance written notice
to the Adviser and the Fund, if Fund shares are not available for
any reason to meet the requirement of Contracts as determined by
the Company. Reasonable advance notice of election to terminate
shall be furnished by Company;
(c) at the option of either the Company, the Adviser or the Fund,
immediately upon institution of formal proceedings against the
broker-dealer or broker-dealers marketing the Contracts, the
Account, the Company, the Fund or the Adviser by the National
Association of Securities Dealers, Inc. (the "NASD"), the SEC or
any other regulatory body;
(d) upon the determination of the Accounts to substitute for the
Fund's shares the shares of another investment company in
accordance with the terms of the applicable Contracts. The Company
will give 60 days written notice to the Fund and the Adviser of
any decision to replace the Fund's' shares;
4
<PAGE>
(e) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
(f) if Fund shares are not registered, issued or sold in conformance
with Federal law or such law precludes the use of Fund shares as
an underlying investment medium for Contracts issued or to be
issued by the Company. Prompt notice shall be given by the
appropriate party should such situation occur.
6. Continuation of Agreement.
Termination as the result of any cause listed in Section 5 shall not
affect the Fund's obligation to furnish its shares to Contracts then in force
for which its shares serve or may serve as the underlying medium unless such
further sale of Fund shares is prohibited by law or the SEC or other regulatory
body, or is determined by the Directors to be necessary to remedy or eliminate
an irreconcilable conflict pursuant to Section 10 hereof.
7. Advertising Materials; Filed Documents.
(a) Advertising and sales literature with respect to the Fund prepared
by the Company or its agents for use in marketing its Contracts
will be submitted to the Fund or its designee for review before
such material is submitted to any regulatory body for review. No
such material shall be used if the Fund or its designee reasonably
object to such use in writing, transmitted by facsimile within two
business days after receipt of such material.
(b) At the Company's request, the Fund will provide additional copies
of its financials as soon as available to the Company and at least
one complete copy of all registration statements, prospectuses,
statements of additional information, annual and semi-annual
reports, proxy statements and/or all amendments or supplements to
any of the above that relate to the Fund promptly after the filing
of such document with the SEC or other regulatory authorities. At
the Adviser's request, the Company will provide to the Adviser at
least one complete copy of all registration statements,
prospectuses, statements of additional information, annual and
semi-annual reports, proxy statements, and all amendments or
supplements to any of the above that relate to the Account
promptly after the filing of such document with the SEC or other
regulatory authority.
(c) The Fund or the Adviser will provide via Excel spreadsheet
diskette format or in electronic transmission to the Company at
least quarterly portfolio information necessary to update Fund
profiles within seven business days following the end of each
quarter.
5
<PAGE>
(d) The Fund will reimburse the Company for any incorrect information
provided to the Company under this Section as provided for in
Schedule C.
8. Proxy Voting.
(a) The Company shall provide pass-through voting privileges on Fund
shares held by registered separate accounts to all Contract owners
and participants to the extent the SEC continues to interpret the
1940 Act as requiring such privileges. The Company shall provide
pass-through voting privileges on Fund shares held by unregistered
separate accounts to all Contract owners.
(b) The Company will distribute to Contract owners, participants and
beneficiaries, as appropriate, all proxy material furnished by the
Fund and will vote Fund shares in accordance with instructions
received from such Contract owners, participants and
beneficiaries. If and to the extent required by law, the Company,
with respect to each group Contract and in each Account, shall
vote Fund shares for which no instructions have been received in
the same proportion as shares for which such instructions have
been received. The Company and its agents shall not oppose or
interfere with the solicitation of proxies for Fund shares held
for such Contract owners, participants and beneficiaries.
9. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Fund and the
Adviser, and its directors, officers, employees, agents and each
person, if any, who controls the Fund or its Adviser within the
meaning of the Securities Act of 1933 (the "1933 Act") against any
losses, claims, damages or liabilities to which the Fund or any
such director, officer, employee, agent, or controlling person may
become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, prospectus or sales literature of the
Company or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or arise out of or as a result of conduct, statements
or representations (other than statements or representations
contained in the prospectuses or sales literature of the Fund) of
the Company or its agents, with respect to the sale and
distribution of Contracts for which Fund shares are the underlying
investment. The Company will reimburse any legal or other expenses
reasonably incurred by the Fund or any such director, officer,
employee, agent, investment adviser, or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company
will not be liable in any such case to the extent that any such
loss, claim, damage or
6
<PAGE>
liability arises out of or is based upon (i) an untrue statement
or omission or alleged omission made in such Registration
Statement or prospectus in conformity with written materials
furnished to the Company by the Fund specifically for use therein
or (ii) the willful misfeasance, bad faith, or gross negligence by
the Fund or Adviser in the performance of its duties or the Fund's
or Adviser's reckless disregard of obligations or duties under
this Agreement or to the Company, whichever is applicable. This
indemnity agreement will be in addition to any liability which
Company may otherwise have.
(b) The Fund and the Adviser agree to indemnify and hold harmless the
Company and its directors, officers, employees, agents and each
person, if any, who controls the Company within the meaning of the
1933 Act against any losses, claims, damages or liabilities to
which the Company or any such director, officer, employee, agent
or controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, prospectuses or sales
literature of the Fund or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or material fact required to be
stated therein or necessary to make the statements therein not
misleading. The Adviser will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer,
employee, agent, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability
or action; provided, however, that the Adviser will not be liable
in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or
omission or alleged omission made in such Registration Statement
or prospectuses which are in conformity with written materials
furnished to the Adviser by the Company specifically for use
therein.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying
party hereunder, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 9. In case any
such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to
the extent that it may wish to, assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party under this Section 9
for any legal or other
7
<PAGE>
expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
10. Potential Conflicts.
(a) The Company has received a copy of an application for exemptive
relief, as amended, filed by the Fund on and with the SEC and the
order issued by the SEC dated ________ (File No. _______) in
response thereto (the "Shared Funding Exemptive Order"). The
Company has reviewed the conditions to the requested relief set
forth in such application for exemptive relief. As set forth in
such application, the Directors will monitor the Fund for the
existence of any material irreconcilable conflict between the
interests of the contractholders of all separate accounts
("Participating Companies") investing in the Fund. An
irreconcilable material conflict may arise for a variety of
reasons, including: (i) an action by any state insurance
regulatory authority; (ii) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public
ruling, private letter ruling, no-action or interpretative letter,
or any similar actions by insurance, tax or securities regulatory
authorities; (iii) an administrative or judicial decision in any
relevant proceeding; (iv) the manner in which the investments of
any portfolio are being managed; (v) a difference in voting
instructions given by variable annuity contractholders and
variable life insurance contractholders; or (vi) a decision by an
insurer to disregard the voting instructions of contractholders.
The Board shall promptly inform the Company if it determines that
an irreconcilable material conflict exists and the implications
thereof.
(b) The Company will report any potential or existing conflicts of
which it is aware to the Directors. The Company will assist the
Directors in carrying out its responsibilities under the Shared
Funding Exemptive Order by providing the Directors with all
information reasonably necessary for the Directors to consider any
issues raised. This includes, but is not limited to, an obligation
by the Company to inform the Directors whenever contractholder
voting instructions are disregarded.
(c) If a majority of the Directors, or a majority of its disinterested
Directors, determines that a material irreconcilable conflict
exists with regard to contractholder investments in a Fund, the
Directors shall give prompt notice to all Participating Companies.
If the Directors determine that the Company is responsible for
causing or creating said conflict, the Company shall at its sole
cost and expense, and to the extent reasonably practicable (as
determined by a majority of the disinterested Directors), take
such action as is necessary to remedy or eliminate the
irreconcilable material conflict. Such necessary action may
include but shall not be limited to:
8
<PAGE>
(i) withdrawing the assets allocable to the Account from the
Fund and reinvesting such assets in a different investment
medium or submitting the question of whether such
segregation should be implemented to a vote of all affected
contractholders and as appropriate, segregating the assets
of any appropriate group (i.e., annuity contract owners,
life insurance contract owners, or variable contract owners
of one or more Participating Companies) that votes in favor
of such segregation, or offering to the affected
contractholders the option of making such a change; and/or
(ii) establishing a new registered management investment company
or managed separate account.
(d) If a material irreconcilable conflict arises as a result of a
decision by the Company to disregard its contractholder voting
instructions and said decision represents a minority position or
would preclude a majority vote by all of its contractholders
having an interest in the Fund, the Company at its sole cost, may
be required, at the Directors' election, to withdraw an Account's
investment in the Fund and terminate this Agreement; provided,
however, that such withdrawal and termination shall be limited to
the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested
Directors.
(e) For the purpose of this Section 10, a majority of the
disinterested Directors shall determine whether or not any
proposed action adequately remedies any irreconcilable material
conflict, but in no event will the Fund be required to establish a
new funding medium for any Contract. The Company shall not be
required by this Section 10 to establish a new funding medium for
any Contract if an offer to do so has been declined by vote of a
majority of the Contract owners, participants or beneficiaries
materially adversely affected by the irreconcilable material
conflict.
11. Miscellaneous.
(a) Amendment and Waiver. Neither this Agreement, nor any provision
hereof, may be amended, waived, discharged or terminated orally,
but only by an instrument in writing signed by all parties hereto.
(b) Notices. All notices and other communications hereunder shall be
given or made in writing and shall be delivered personally, or
sent by telex, telecopier or registered or certified mail, postage
prepaid, return receipt requested, to the party or parties to whom
they are directed at the following addresses, or at such other
addresses as may be designated by notice from such party to all
other parties.
9
<PAGE>
To the Company:
Aetna Insurance Company of America
151 Farmington Avenue
Hartford, Connecticut 06156
Attention: Julie E. Rockmore, Counsel
To the Fund:
Calvert Group, Ltd.
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
Attn: Legal Department
Any notice, demand or other communication given in a manner prescribed in
this subsection (b) shall be deemed to have been delivered on receipt.
(c) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
permitted successors and assigns.
(d) 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.
(e) Severability. In case any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be
affected or impaired thereby.
(f) Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the parties hereto and supersedes all
prior agreement and understandings relating to the subject matter
hereof.
(g) Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Connecticut.
(h) It is understood by the parties that this Agreement is not an
exclusive arrangement in any respect.
10
<PAGE>
(i) The terms of this Agreement and the Schedules thereto will be held
confidential by each party except to the extent that either party
or its counsel may deem it necessary to disclose such terms.
12. Limitation on Liability of Trustees, etc.
This Agreement has been executed on behalf of the Fund by the undersigned
officer of the Fund in his or her capacity as an officer of the Fund and on
behalf of the Advisor by an undersigned officer of the Advisor in his or her
capacity as an officer of the Advisor. Any obligations imposed on the Fund by
this Agreement shall be binding upon the assets and property of the Fund only
and shall not be binding on any Director, officer or shareholder of the Fund
individually.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers effective as of the 1st day of December, 1997.
AETNA INSURANCE COMPANY OF AMERICA
By: ______________________________________
Name:
Title:
Date:
------------------------------------------
CALVERT RESPONSIBLY INVESTED
BALANCED PORTFOLIO
By: ______________________________________
Name:
Title:
Date:
------------------------------------------
CALVERT ASSET MANAGEMENT
COMPANY, INC.
By: ______________________________________
Name:
Title:
Date:
11
<PAGE>
Schedule A
12
<PAGE>
Schedule B
Calvert Responsibly Invested Balanced Portfolio
13
<PAGE>
Schedule C
The following costs, expenses and reimbursements will be paid by the
party indicated:
1. For purposes of Sections 2 and 7, the Fund or the Adviser shall be
liable to the Company for systems and out of pocket costs incurred by
the Company in making a Contract owner's, a participant's or
beneficiary's account whole, if such costs or expenses are a result of
the Fund's failure to provide timely or correct net asset values,
dividend and capital gains or financial information, and if such
information is not corrected by 4pm EST of the next business day after
releasing such incorrect information provided the incorrect NAV as well
as the correct NAV for each day that the error occurred is provided. If
a mistake is caused in supplying such information or confirmations,
which results in a reconciliation with incorrect information, the
amount required to make a Contract owner's, a participant's or a
beneficiary's account whole shall be borne by the party providing the
incorrect information, regardless of when the error is corrected.
2. For purposes of Section 3, the Fund or the Adviser shall pay for the
cost of typesetting and printing periodic fund reports to shareholders,
prospectuses, prospectus supplements, statements of additional
information and other materials that are required by law to be sent to
Contract owners, participants or beneficiaries as well as the cost of
distributing such materials. The Company shall pay for the cost of
prospectuses and statements of additional information and the
distribution thereof for prospective Contract owners, participants or
beneficiaries. Each party shall be provided with such supporting data
as may reasonably be requested for determining expenses under Section
3.
3. The Fund shall pay all expenses in connection with the provision to the
Company of a sufficient quantity of its proxy material under Section 3.
The cost associated with proxy preparation, group authorization
letters, programming for tabulation and necessary materials (including
postage) will be paid by the Fund.
AETNA INSURANCE COMPANY OF AMERICA
By: __________________________________
Name:
Title:
Date:
- -------------------------------------- ----------------------------------
CALVERT RESPONSIBILITY INVESTED CALVERT ASSET MANAGEMENT
BALANCED PORTFOLIO COMPANY, INC.
By: __________________________________ By:_______________________________
Name: Name:
Title: Title:
Date: Date:
FORM OF
SERVICE AGREEMENT
WITH
CALVERT ASSET MANAGEMENT COMPANY, INC.
AGREEMENT, effective as of _____________ 1997, between Calvert Asset
Management Company, Inc. (the "Adviser"), a Maryland corporation, and Aetna
Insurance Company of America (the "Company"), a Connecticut corporation, for the
provision of described administrative services by the Company in connection with
the sale of shares of the CALVERT RESPONSIBLY INVESTED BALANCED PORTFOLIO (the
"Fund") as described in the Fund Participation Agreement dated __________, 1997
between the Company, the Fund and the Adviser (the "Fund Participation
Agreement").
In consideration of their mutual promises, the Adviser and the Company
agree as follows:
1. The Company agrees to provide the following services to the Adviser:
a. responding to inquiries from owners of the Company variable
annuity contracts using the Funds as an investment vehicle
("Contractholders") regarding the services performed by the
Company that relate to the Funds;
b. providing information to Adviser and Contractholders with respect
to Fund shares attributable to Contractholder accounts;
c. communicating directly with Contractholders concerning the Funds'
operations;
d. providing such other similar services as Adviser may reasonably
request pursuant to Adviser's agreement with the Funds to the
extent permitted under applicable federal and state requirements.
2. (a) Administrative services to Contractholders, owners and
participants shall be the responsibility of the Company and shall
not be the responsibility of the Fund or the Adviser. The Adviser
recognizes the Company as the sole shareholder of Fund shares
issued under the Fund Participation Agreement, and that
substantial savings will be derived in administrative expenses,
such as significant reductions in postage expense and shareholder
communications, by virtue of having a sole shareholder for each of
the Accounts rather than multiple shareholders. In consideration
of the savings resulting from such arrangement, and to compensate
the Company for its costs, the Adviser agrees to pay to the
Company and the Company agrees to accept as full compensation for
all services rendered hereunder an amount described in Schedule A
attached hereto and made a part of this Agreement as may be
amended from time to time with the mutual consent of the parties
hereto.
<PAGE>
(b) The parties agree that the Adviser's payments to the Company are
for administrative services only and do not constitute payment in
any manner for investment advisory services or for costs of
distribution.
(c) For the purposes of computing the administrative fee reimbursement
contemplated by this Section 2, the average aggregate amount
invested by the Company over a one month period shall be computed
by totaling the Company's aggregate investment (share net asset
value multiplied by total number of shares held by the Company) on
each business day during the month and dividing by the total
number of business days during each month.
(d) The Fund will calculate the reimbursement of administrative
expenses at the end of each month and will make such reimbursement
to the Company within 30 days thereafter. The reimbursement
payment will be accompanied by a statement showing the calculation
of the monthly amounts payable by the Adviser and such other
supporting data as may be reasonably requested by the Company.
Payment will be wired by the Adviser to an account designated by
the Company.
3. The Company agrees to indemnify and hold harmless the Adviser and its
directors, officers, and employees from any and all loss, liability and
expense resulting from any gross negligence or willful wrongful act of
the Company under this Agreement or a breach of a material provision of
this Agreement, except to the extent such loss, liability or expense is
the result of the Adviser's misfeasance, bad faith or gross negligence in
the performance of its duties.
4. The Adviser agrees to indemnify and hold harmless the Company and its
directors, officers, and employees from any and all loss, liability and
expense resulting from any gross negligence or willful wrongful act of
the Adviser under this Agreement or a breach of a material provision
under this Agreement, except to the extent such loss, liability or
expense is the result of the Company's own willful misfeasance, bad faith
or gross negligence in the performance of its duties.
5. Either party may terminate this Agreement, without penalty, (i) on sixty
(60) days written notice to the other party, for any cause or without
cause, or (ii) on reasonable notice to the other party, if it is not
permissible to continue the arrangement described herein under laws,
rules or regulations applicable to either party or the Fund, or if the
Participation Agreement is terminated.
6. The terms of this arrangement will be held confidential by each party
except to the extent that either party or its counsel may deem it
necessary to disclose this arrangement.
2
<PAGE>
7. This Agreement represents the entire Agreement of the parties on the
subject matter hereof and it cannot be amended or modified except in
writing, signed by the parties. This Agreement may be executed in one or
more separate counterparts, all of which, when taken together, shall
constitute one and the same Agreement.
8. All notices and other communications hereunder shall be given or made in
writing and shall be delivered personally, or sent by telex, telecopier
or registered or certified mail, postage prepaid, return receipt
requested, to the party to whom they are directed at the following
addresses, or at such other addresses as may be designated by notice from
such party to the other party.
To Aetna:
Aetna Insurance Company of America
151 Farmington Avenue
Hartford, Connecticut 06156
Attention: Julie E. Rockmore, Counsel
To Calvert Asset Management Company, Inc.
Calvert Asset Management Company, Inc.
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland, 2014
Attention: Legal Department
3
<PAGE>
Any notice, demand or other communication given in a manner prescribed
in this Section 8 shall be deemed to have been delivered on receipt.
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed by their authorized officers as of the day
and year first above written.
CALVERT ASSET MANAGEMENT COMPANY, INC.
By:___________________________________
Name:
Title:
Date:
AETNA INSURANCE COMPANY OF AMERICA
By:___________________________________
Name:
Title:
Date:
4
[Aetna logo]
{Aetna letterhead]
151 Farmington Avenue
Hartford, CT 06156-3124
Julie E. Rockmore
Counsel
Law Division, RE4A
November 26, 1997 Investments & Financial Services
(860) 273-4686
Fax: (860) 273-8340
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: Aetna Insurance Company of America and its Variable Annuity Account I
Post-Effective Amendment No. 6 to Registration Statement on Form N-4
Prospectus Title: Aetna Marathon Plus - Group and Individual Deferred
Variable Annuity Contracts
File Nos. 33-59749 and 811-8582
Dear Sir or Madam:
The undersigned has acted as counsel to Aetna Insurance Company of
America, a Connecticut life insurance company (the "Company"). It is
my understanding that the Company, as depositor, has registered an
indefinite amount of securities (the "Securities") under the
Securities Act of 1933 (the "Securities Act") as provided in Rule
24f-2 under the Investment Company Act of 1940 (the "Investment
Company Act").
In connection with this opinion, I have reviewed the N-4 Registration
Statement as amended to the date hereof and this Post-Effective
Amendment No. 6. I have also examined originals or copies, certified
or otherwise identified to my satisfaction, of such documents, trust
records and other instruments I have deemed necessary or appropriate
for the purpose of rendering this opinion. For purposes of such
examination, I have assumed the genuineness of all signatures on
original documents and the conformity to the original of all copies.
I am admitted to practice law in Connecticut, and do not purport to be
an expert on the laws of any other state. My opinion herein as to any
other law is based upon a limited inquiry thereof which I have deemed
appropriate under the circumstances.
Sincerely,
/s/ Julie E. Rockmore
Julie E. Rockmore
Counsel
Aetna Insurance Company of America
Consent of Independent Auditors
The Board of Directors of Aetna Insurance Company of America
and Contractholders of Variable Annuity Account I:
We consent to the use of our reports dated March 20, 1997 and February 14,
1997 incorporated by reference in registration statement (No. 33-59749) on
Form N-4 and to the reference to our firm under the caption "CONDENSED
FINANCIAL INFORMATION" in the Prospectus.
/s/ KPMG Peat Marwick LLP
Hartford, Connecticut
November 26, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000925981
<NAME> Aetna Variable Annuity Account I
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 205,026,902
<INVESTMENTS-AT-VALUE> 218,897,920
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 218,897,920
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 218,897,920
<DIVIDEND-INCOME> 3,142,826
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,469,442
<NET-INVESTMENT-INCOME> 1,673,384
<REALIZED-GAINS-CURRENT> 326,627
<APPREC-INCREASE-CURRENT> 12,505,010
<NET-CHANGE-FROM-OPS> 14,505,021
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
