<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
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Post-Effective Amendment No. 1 File No. 333-74865 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 3 (File No. 811-7195) [X]
---------
(Check appropriate box or boxes)
AMERICAN ENTERPRISE VARIABLE ANNUITY ACCOUNT
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(Exact Name of Registrant)
American Enterprise Life Insurance Company
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(Name of Depositor)
80 South 8th Street, P.O. Box 534, Minneapolis, MN 55440-0534
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(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (612) 671-3678
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Mary Ellyn Minenko, IDS Tower 10, Minneapolis, MN 55440-0010
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a) (1)
[X] on May 1, 2000, pursuant to paragraph (a)(1) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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Prospectus
May 1, 2000
American Express Signature Variable Annuity
Individual flexible premium deferred combination fixed/variable annuity
American Enterprise Variable Annuity Account
Issued by: American Enterprise Life Insurance Company (American Enterprise Life)
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-0534
Telephone: 800-333-3437
This prospectus contains information that you should know before investing. You
also will receive the prospectuses for:
<TABLE>
<CAPTION>
<S><C> <C> <C>
o American Express(R)Variable Portfolio Funds o J. P. Morgan Series Trust II
o AIM Variable Insurance Funds, Inc. o Lazard Retirement Series, Inc.
o Alliance Variable Products Series Fund o MFS(R)Variable Insurance TrustSM
o Baron Capital Funds o Putnam Variable Trust
o Fidelity Variable Insurance Products Service Class o Royce Capital Fund
o Franklin Templeton Variable Insurance Products Trust o Third Avenue Variable Series Trust
o Goldman Sachs Variable Insurance Trust (VIT) o Wanger Advisors Trust
o Janus Aspen Series: Service Shares o Warburg Pincus Trust
</TABLE>
Please read the prospectuses carefully and keep them for future reference. This
contract is available for nonqualified annuities, IRAs (including Roth IRAs),
Simplified Employee Pension (SEP) plans and Tax-Sheltered Annuity (TSA)
rollovers.
The Securities and Exchange Commission (SEC) has not approved or disapproved
these securities or passed upon the accuracy or adeqacy of this prospectus. Any
representation to the contrary is a criminal offense.
An investment in this contract is not a deposit of a bank or financial
institution and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency. An investment in this contract
involves investment risk including the possible loss of principal.
A Statement of Additional Information (SAI), dated the same date as this
prospectus, is incorporated by reference into this prospectus. It is filed with
the SEC and is available without charge by contacting American Enterprise Life
at the telephone number above or by completing and sending the order form on the
last page of this prospectus. The table of contents of the SAI is on the last
page of this prospectus.
<PAGE>
Table of Contents
Key Terms.......................................................................
The Contract in Brief...........................................................
Expense Summary.................................................................
Condensed Financial Information (Unaudited).....................................
Financial Statements............................................................
Performance Information.........................................................
The Variable Account and the Funds..............................................
The Fixed Accounts..............................................................
Buying Your Contract............................................................
Charges.........................................................................
Valuing Your Investment.........................................................
Making the Most of Your Contract................................................
Withdrawals.....................................................................
TSA - Special Withdrawal Provisions.............................................
Changing Ownership..............................................................
Benefits in Case of Death.......................................................
The Annuity Payout Period.......................................................
Taxes...........................................................................
Voting Rights...................................................................
Substitution of Investments.....................................................
About the Service Providers.....................................................
Additional Information About American Enterprise Life...........................
Directors and Executive Officers................................................
Experts.........................................................................
American Enterprise Life Financial Information..................................
Table of Contents of the Statement of Additional Information....................
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Key Terms
These terms can help you understand details about your contract.
Accumulation unit -- A measure of the value of each subaccount before annuity
payouts begin.
Annuitant -- The person on whose life or life expectancy the annuity payouts are
based.
Annuity payouts -- An amount paid at regular intervals under one of several
plans.
Beneficiary -- The person you designate to receive benefits in case of the
owner's or annuitant's death while the contract is in force and before annuity
payouts begin.
Close of business -- When the New York Stock Exchange (NYSE) closes, normally 4
p.m. Eastern time.
Contract -- a deferred annuity contract, or a certificate showing your interest
under a group annuity contract, that permits you to accumulate money for
retirement by making one or more purchase payments. It provides for lifetime or
other forms of payout beginning at a specified time in the future.
Contract value -- The total value of your contract before we deduct any
applicable charges.
Contract year -- A period of 12 months, starting on the effective date of your
contract and on each anniversary of the effective date.
Fixed accounts -- The one-year fixed account is an account to which you may
allocate purchase payments. Amounts you allocate to this account earn interest
at rates that we declare periodically. Guarantee Period Accounts are fixed
accounts to which you may also allocate purchase payments. These accounts have
guaranteed interest rates declared for periods ranging from two to ten years.
Withdrawals from these accounts prior to the end of the term specified will
receive a Market Value Adjustment, which may result in a gain or loss of
principal.
Funds -- Investment options under your contract. You may allocate your purchase
payments into subaccounts investing in shares of any or all of these funds.
Guarantee Period -- The number of years that a guaranteed interest rate is
credited.
Market Value Adjustment (MVA) -- A positive or negative adjustment assessed if
any portion of a Guarantee Period Account is withdrawn or transferred prior to
the end of its Guarantee Period.
Owner (you, your) -- The person who controls the contract (decides on investment
allocations, transfers, payout options, etc.). Usually, but not always, the
owner is also the annuitant. The owner is responsible for taxes, regardless of
whether he or she receives the contract's benefits.
Qualified annuity -- A contract that you purchase to fund one of the following
tax-deferred retirement plans that is subject to applicable federal law and any
rules of the plan itself:
o Individual Retirement Annuities (IRAs) under Section 408(b) of the Internal
Revenue Code of 1986, as amended (the Code)
o Roth IRAs under Section 408A of the Code
o Simplified Employee Pension (SEP) plans under Section 408(k) of the Code
o Tax Sheltered Annuity (TSA) rollovers under Section 403(b) of the Code
A qualified annuity will not provide any necessary or additional tax-deferral if
it is used to fund a retirement plan that is already tax-deferred.
All other contracts are considered nonqualified annuities.
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Retirement date -- The date when annuity payouts are scheduled to begin.
Valuation date -- Any normal business day, Monday through Friday, that the NYSE
is open. Each valuation date ends at the close of business. We calculate the
value of each subaccount at the close of business on each valuation date.
Variable account -- Consists of separate subaccounts to which you may allocate
purchase payments; each invests in shares of one fund. The value of your
investment in each subaccount changes with the performance of the particular
fund.
Withdrawal value -- The amount you are entitled to receive if you make a full
withdrawal from your contract. It is the contract value minus any applicable
charges.
The Contract in Brief
Purpose: The purpose of the contract is to allow you to accumulate money for
retirement. You do this by making one or more purchase payments; you may
allocate your purchase payments to the fixed accounts and/or subaccounts under
the contract. These accounts, in turn, may earn returns that increase the value
of the contract. Beginning at a specified time in the future called the
retirement date, the contract provides lifetime or other forms of payouts of
your contract value (less any applicable premium tax). As in the case of other
annuities, it may not be advantageous for you to purchase this contract as a
replacement for, or in addition to, an existing annuity.
A qualified annuity will not provide any necessary or additional tax-deferral if
it is used to fund a retirement plan that is tax-deferred. However, the contract
has features other than tax-deferral that may make it an appropriate investment
for your retirement plan. You should compare these features and their costs with
other investment options before deciding to purchase this contract.
Free look period: You may return your contract to your sales representative or
to our office within the time stated on the first page of your contract and
receive a full refund of the contract value. We will not deduct any charges.
However, you bear the investment risk from the time of purchase until you return
the contract; the refund amount may be more or less than the payment you made.
(Exception: If the law requires, we will refund all of your purchase payments.)
Accounts: Currently, you may allocate your purchase payments among any or all
of:
o the subaccounts, each of which invests in a fund with a particular
investment objective. The value of each subaccount varies with the
performance of the particular fund in which it invests. We cannot guarantee
that the value at the retirement date will equal or exceed the total
purchase payments you allocate to the subaccounts. (p. __)
o the fixed accounts, which earn interest at rates that we adjust
periodically. (p. __)
Buying your contract: Your sales representative will help you complete and
submit an application. Applications are subject to acceptance at our office. You
may buy a nonqualified annuity or a qualified annuity. After your initial
purchase payment, you have the option of making additional purchase payments in
the future. Some states have time limitations for making additional payments.
(p. __ )
o Minimum initial purchase payment -
$5,000 in Texas, Washington, Pennsylvania and South Carolina;
$2,000 in all other states
o Minimum additional purchase payment - $100 ($50 for Systematic Investment
Plans)
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o Maximum total purchase payments (without prior approval)-
$1,000,000 (for issue ages up to 85)
$100,000 (for issue ages 86 to 90)
Transfers: Subject to certain restrictions you currently may redistribute your
money among the accounts without charge at any time until annuity payouts begin,
and once per contract year among the subaccounts after annuity payouts begin.
Transfers out of the Guarantee Period Accounts before the end of the Guarantee
Period will be subject to a MVA. You may establish automated transfers among the
accounts. Fixed account transfers are subject to special restrictions. (p. )
Withdrawals: You may withdraw all or part of your contract value at any time
before the retirement date. You also may establish automated partial
withdrawals. Withdrawals may be subject to charges and tax penalties (including
a 10% IRS penalty if you make withdrawals prior to your reaching age 59 1/2 )
and may have other tax consequences; also, certain restrictions apply. (p. )
Changing ownership: You may change ownership of a nonqualified annuity by
written instruction, but this may have federal income tax consequences.
Restrictions apply to changing ownership of a qualified annuity. (p. )
Benefits in case of death: If you or the annuitant die before annuity payouts
begin, we will pay thebeneficiary an amount at least equal to the contract
value. (p. )
Annuity payouts: You can apply your contract value to an annuity payout plan
that begins on the retirement date. You may choose from a variety of plans to
make sure that payouts continue as long as you like. If you purchased a
qualified annuity, the payout schedule must meet the requirements of the
qualified plan. We can make payouts on a fixed or variable basis, or both. Total
monthly payouts may include amounts from each subaccount and the one-year fixed
account. During the annuity payout period, your choices for subaccounts may be
limited. The Guarantee Period Accounts are not available during the payout
period. (p. )
Taxes: Generally, your contract grows tax-deferred until you make withdrawals
from it or begin to receive payouts. (Under certain circumstances, IRS penalty
taxes may apply.) Even if you direct payouts to someone else, you will be taxed
on the income if you are the owner. However, Roth IRAs may grow and be
distributed tax free if you meet certain distribution requirements. (p. )
Charges:
We assess certain charges in connection with your contract:
o $30 annual contract administrative charge;
o 0.15% variable account administrative charge;
o 1.25% mortality and expense risk fee (if you allocate money to one or more
subaccounts);
o if you select the Guaranteed Minimum Income Benefit Rider (6% Accumulation
Benefit Base), an annual fee based on an adjusted contract value (currently
0.35%);
o if you select the 8% Performance Credit Rider, an annual fee of 0.25% of
the contract anniversary contract value;
o withdrawal charge;
o any premium taxes that may be imposed on us by state or local governments
(currently, we deduct any applicable premium tax when annuity payouts
begin, but we reserve the right to deduct this tax at other times such as
when you make purchase payments or when you make a total withdrawal); and
o the operating expenses of the funds in which the subaccounts invest (if you
allocate money to one or more subaccounts)
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Expense Summary
The purpose of the following information is to help you understand the various
costs and expenses associated with your contract.
You pay no sales charge when you purchase your contract. We show all costs that
we deduct directly from your contract or indirectly from the subaccounts and
funds below. Some expenses may vary as we explain under "Charges." Please see
the funds' prospectuses for more information on the operating expenses for each
fund.
Contract owner expenses:
Withdrawal charge (contingent deferred sales charge as a percentage of purchase
payment withdrawn).........
Years from purchase Withdrawal charge
payment receipt percentage
1 7%
2 7
3 6
4 6
5 5
6 4
7 2
Thereafter 0
Withdrawal charge under Annuity Payout Plan E - Payouts for a specified period:
The amount equal to the difference in the present value of remaining payments
using the assumed investment rate and such present value using the investment
rate plus 1.77%. In no event would your withdrawal charge exceed 9% of the
amount available for payouts under the plan.
Annual contract administrative charge $30*
*We will waive this charge when your contract value, or total purchase payments
less any payments withdrawn, is $50,000 or more on the current contract
anniversary.
Guaranteed Minimum Income Benefit Rider (6% Accumulation Benefit Base) fee:** as
a percentage of an adjusted contract value
charged annually. This is an optional expense. 0.35%
8% Performance Credit Rider fee:**
as a percentage of the contract value at contract
anniversary charged annually. This is an optional expense. 0.25%
**You may select either the Guaranteed Minimum Income Benefit Rider (6%
Accumulation benefit Base) or the 8% Performance Credit Rider, but not both.
Annual variable account expenses (as a percentage of average subaccount value):
Variable account administrative charge 0.15%
Mortality and expense risk fee*** 1.25%
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Total annual variable account expenses 1.40%
***Includes a death benefit choice of either the Option A - Return of purchase
payment death benefit, Option B - Maximum anniversary value death benefit or the
5% Accumulation death benefit.
<PAGE>
[Annual operating expenses of the fund and expense examples to be inserted upon
amendment]
Condensed Financial Information (Unaudited)
The following tables give per-unit information about the financial history of
each subaccount.
[To be inserted upon amendment]
Financial Statements
You can find our audited financial statements and the audited financial
statements of the subaccounts in the SAI.
Performance Information
Performance information for the subaccounts may appear from time to time in
advertisements or sales literature. This information reflects the performance of
a hypothetical investment in a particular subaccount during a specified time
period. We show actual performance from the date the subaccounts began investing
in funds. For some subaccounts, we do not provide any performance information
because they are new and have not had any activity to date. We also show
performance from the commencement date of the funds as if the contract existed
at that time, which it did not. Although we base performance figures on
historical earnings, past performance does not guarantee future results.
We include non-recurring charges (such as withdrawal charges) in total return
figures, but not in yield quotations. Excluding non-recurring charges in yield
calculations increases the reported value.
Total return figures reflect deduction of all applicable charges, including the:
o contract administrative charge,
o variable account administrative charge,
o the Guaranteed Minimum Income Benefit Rider (6% Accumulation Benefit Base)
fee,
o the 8% Performance credit Rider fee,
o mortality and expense risk fee, and
o withdrawal charge (assuming a full withdrawal at the end of the illustrated
period).
We also show optional total return quotations that do not reflect a withdrawal
charge deduction (assuming no withdrawal), the Guaranteed Minimum Income Benefit
Rider (6% Accumulation Benefit Base) fee and the 8% Performance Credit Rider
fee. We may show total return quotations by means of schedules, charts or
graphs.
Average annual total return is the average annual compounded rate of return of
the investment over a period of one, five and ten years (or up to the life of
the subaccount if it is less than ten years old).
Cumulative total return is the cumulative change in the value of an investment
over a specified time period. We assume that income earned by the investment is
reinvested. Cumulative total return generally will be higher than average annual
total return.
Annualized simple yield (for subaccounts investing in money market funds)
"annualizes" the income generated by the investment over a given seven-day
period. That is, we assume the amount of income generated by the investment
during the period will be generated each seven-day period for a year. We show
this as a percentage of the investment.
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Annualized compound yield (for subaccounts investing in money market funds) is
calculated like simple yield except that we assume the income is reinvested when
we annualize it. Compound yield will be higher than the simple yield because of
the compounding effect of the assumed reinvestment.
Annualized yield (for subaccounts investing in income funds) divides the net
investment income (income less expenses) for each accumulation unit during a
given 30-day period by the value of the unit on the last day of the period. We
then convert the result to an annual percentage.
You should consider performance information in light of the investment
objectives, policies, characteristics and quality of the fund in which the
subaccount invests and the market conditions during the specified time period.
Advertised yields and total return figures include charges that reduce
advertised performance. Therefore, you should not compare subaccount performance
to that of mutual funds that sell their shares directly to the public. (See the
SAI for a further description of methods used to determine total return and
yield.)
If you would like additional information about actual performance, please
contact us at the address or telephone number on the first page of this
prospectus.
The Variable Account and the Funds
You may allocate payments to any or all of the subaccounts of the variable
account that invest in shares of the following funds:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Investment Advisor or
Subaccount Investing In Investment Objectives and Policies: Manager
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AXPSM Variable Portfolio - Objective: long-term total return exceeding that IDS Life, investment
Blue Chip Advantage Fund of the U.S. stock market. Invests primarily in manager; American
common stocks of companies included in the Express Financial
unmanaged S&P 500 Index. Corporation (AEFC)
investment advisor.
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ESI AXPSM Variable Portfolio - Objective: high level of current income while IDS Life, investment
Bond Fund conserving the value of the investment for the manager; AEFC,
longest time period. Invests primarily in investment advisor.
investment-grade bonds.
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ECR AXPSM Variable Portfolio - Objective: capital appreciation. Invests primarily IDS Life, investment
Capital Resource Fund in U.S. common stocks. manager; AEFC
investment advisor.
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EMS AXPSM Variable Portfolio - Objective: maximum current income consistent with IDS Life, investment
Cash Management Fund liquidity and conservation of capital. Invests in manager; AEFC
money market securities. investment advisor.
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AXPSM Variable Portfolio - Objective: a high level of current income and, as IDS Life, investment
Diversified Equity Income a secondary goal, steady growth of capital. manager; AEFC
Fund Invests primarily in dividend-paying common and investment advisor.
preferred stocks.
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EIA AXPSM Variable Portfolio - Objective: high current income, with capital IDS Life, investment
Extra Income Fund growth as a secondary objective. Invests primarily manager; AEFC
in long-term, high-yielding, high-risk debt investment advisor.
securities below investment grade issued by U.S.
and foreign corporations.
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AXPSM Variable Portfolio - Objective: a high level of current income and IDS Life, investment
Federal Income Fund safety of principal consistent with an investment manager; AEFC
in U.S. government and government agency investment advisor.
securities. Invests primarily in debt obligations
issued or guaranteed as to principal and interest
by the U.S. government, its agencies or
instrumentalities.
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AXPSM Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, investment
Growth Fund primarily in common stocks and securities manager; AEFC
convertible into common stocks that appear to investment advisor.
offer growth opportunities.
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EMG AXPSM Variable Portfolio - Objective: maximum total investment return through IDS Life, investment
Managed Fund a combination of capital growth and current manager; AEFC
income. Invests primarily in stocks, convertible investment advisor.
securities, bonds and money market instruments.
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EGD AXPSM Variable Portfolio - Objective: long-term growth of capital. Invests IDS Life, investment
New Dimensions Fund primarily in common stocks of U.S. and foreign manager; AEFC
companies showing potential for significant growth. investment advisor.
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AXPSM Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, investment
Small Cap Advantage Fund primarily in equity stocks of small companies that manager; AEFC
are often included in the S&P SmallCap 600 Index investment advisor.
or the Russell 2000 Index.
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ECA AIM V.I. Capital Objective: growth of capital. Invests primarily A I M Advisors, Inc.
Appreciation Fund in common stocks, with emphasis on medium- or
small-sized growth companies.
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ECD AIM V.I. Capital Objective: long term growth of capital. Invests A I M Advisors, Inc.
Development Fund primarily in securities (including common stocks,
convertible securities and bonds) of small- and
medium-sized companies.
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EVA AIM V.I. Value Fund Objective: long-term growth of capital with income A I M Advisors, Inc.
as a secondary objective. Invests primarily in
equity securities judged to be undervalued
relative to the investment advisor's appraisal of
the current or projected earnings of the companies
issuing the securities, or relative to current
market values of assets owned by the companies
issuing the securities, or relative to the equity
market generally.
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EPP Alliance VP Premier Growth Objective: long-term growth of capital. Invests Alliance Capital
Portfolio (Class B) primarily in equity securities of a limited number Management, L.P.
of large, carefully selected, high-quality U.S.
companies that are judged likely to achieve
superior earnings growth.
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ETC Alliance VP Technology Objective: growth of capital. Invests primarily in Alliance Capital
Portfolio (Class B) securities of companies expected to benefit from Management, L.P.
technological advances and improvements.
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EHG Alliance VP U.S. Objective: high level of current income consistent Alliance Capital
Government/High Grade with preservation of capital. Invest primarily in Management, L.P.
Securities Portfolio (1) U.S. Government securities and (2) other
(Class B) high-grade debt securities or, if unrated, of
equivalent quality.
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EAS Baron Capital Asset Fund Objective: capital appreciation. Invests primarily BAMCO, Inc.
in securities of small and medium sized companies
with undervalued assets or favorable growth
prospects.
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EFG Fidelity VIP III Growth & Objective: high total return through a combination Fidelity Management &
Income Portfolio (Service of current income and capital appreciation. Research Company
Class) Invests primarily in common stocks with a focus on (FMR), investment
those that pay current dividends and show manager; FMR U.K. and
potential for capital appreciation. FMR Far East,
sub-investment
advisors.
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<PAGE>
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EFM Fidelity VIP III Mid Cap Objective: long-term growth of capital. Invests FMR, investment
Portfolio (Service Class) primarily in medium market capitalization common manager; FMR U.K. and
stocks. FMR Far East,
sub-investment
advisors.
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EFO Fidelity VIP Overseas Objective: long-term growth of capital. Invests FMR, investment
Portfolio (Service Class) primarily in common stocks of foreign securities. manager; FMR U.K.,
FMR
Far
East,
Fidelity
International
Investment
Advisors
(FIIA)
and
FIIA
U.K.,
sub-investment
advisors.
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ERE FT VIP Franklin Real Objective: capital appreciation with a secondary Franklin Advisers,
Estate Securities Fund - goal to earn current income. Invests primarily in Inc.
Class 2 securities of companies operating in the real
estate industry, primarily equity real estate
investment trusts (REITS).
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EMU FT VIP Mutual Shares Objective: capital appreciation with income as a Franklin Mutual
Securities Fund - Class 2 secondary goal. Invests primarily in equity Advisers, LLC
securities of companies that the manager believes
are available at market prices less than their
actual value based on certain recognized or
objective criteria
(intrinsic value).
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EIS FT VIP Templeton Objective: long-term capital appreciation. Invests Templeton Investment
International Smaller primarily in equity securities of smaller Counsel, Inc.
Companies Fund - Class 2 companies located outside the U.S., including in
emerging markets.
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JCG Goldman Sachs VIT Capital Objective: long-term growth of capital. Invest Goldman Sachs Asset
Growth Fund primarily in equity securities considered by the Management
Investment Advisor to have long-term
capital appreciation potential.
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JUS Goldman Sachs VIT CORESM Objective: long-term growth of capital and Goldman Sachs Asset
U.S. Equity Fund dividend income. Invests primarily in a broadly Management
diversified portfolio of large-cap and blue chip
equity securities representing all major sectors
of the U.S. economy.
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JGL Goldman Sachs VIT Global Objective: high total return, emphasizing current Goldman Sachs Asset
Income Fund income, and, to a lesser extent, providing Management
opportunities for capital appreciation. Invests International
primarily in a portfolio of high quality
fixed-income securities of U.S. and foreign
issuers and enters into transactions in foreign
currencies.
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JIF Goldman Sachs VIT Objective: long-term capital appreciation. Invests Goldman Sachs Asset
International Equity Fund primarily in equity securities of companies that Management
are organized outside the U.S., or whose International
securities are principally traded outside the U.S.
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Goldman Sachs VIT Internet Objective:
Tollkeeper Fund
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<PAGE>
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Janus Aspen Aggressive Objective: long-term growth of capital. Invests Janus Capital
Growth Portfolio: Service primarily in common stocks selected for their
Shares growth potential and normally invests at least 50%
of its equity assets in medium-sized companies.
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Janus Aspen Growth Objective: long-term growth of capital in a manner Janus Capital
Portfolio: Service Shares consistent with the preservation of capital.
Invests primarily in common stocks
selected for their growth potential.
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Janus Aspen International Objective: long-term growth of capital. Invests at Janus Capital
Growth Portfolio: Service least 65% of its total assets in securities of
Shares issuers from at least five different countries,
excluding the U.S. It may at times invest all of
its assets in fewer than five countries or even a
single country.
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EDE J.P. Morgan U.S. Objective: outperform U.S. stock markets over the J.P. Morgan
Disciplined Equity long term through a disciplined management
Portfolio approach. Invests primarily in large- and
medium-capitalization U.S. companies.
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ERQ Lazard Retirement Equity Objective: long-term capital appreciation. Invests Lazard Asset
Portfolio primarily in equity securities, principally common Management
stocks of relatively large U.S. companies (those
whose total market value is more than $1 billion)
that the Investment Manager believes are
undervalued based on their earnings, cash flow or
asset values.
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ERI Lazard Retirement Objective: long-term capital appreciation. Invests Lazard Asset
International Equity primarily in equity securities, principally common Management
Portfolio stocks of relatively large non-U.S. companies
(those whose total market value is more than $1
billion) that the Investment Manager believes are
undervalued based on their earnings, cash flow or
asset values.
- - - -----------------------------------------------------------------------------------------------------------------------
- - - -----------------------------------------------------------------------------------------------------------------------
END MFS(R) VIT New Discovery Objective: capital appreciation. Invests primarily MFS Investment
Series in equity securities of emerging growth companies. Management(R)
- - - -----------------------------------------------------------------------------------------------------------------------
- - - -----------------------------------------------------------------------------------------------------------------------
ERS MFS(R) VIT Research Series Objective: long-term growth of capital and future MFS Investment
income. Invests primarily in common stocks and Management(R)
related securities that have favorable prospects
for long-term growth, attractive valuations based
on current and expected earnings or cash flow,
dominant or growing market share, and superior
management.
- - - -----------------------------------------------------------------------------------------------------------------------
- - - -----------------------------------------------------------------------------------------------------------------------
EUT MFS(R) VIT Utilities Series Objective: capital growth and current income. MFS Investment
Invests primarily in equity and debt securities of Management(R)
domestic and foreign companies in the utilities
industry.
- - - -----------------------------------------------------------------------------------------------------------------------
- - - -----------------------------------------------------------------------------------------------------------------------
EPG Putnam VT Growth and Objective: capital growth and current income. Putnam Investment
Income Fund - Class IB Invests primarily in common stocks that offer Management, Inc.
Shares potential of capital growth, current income or
both.
- - - -----------------------------------------------------------------------------------------------------------------------
- - - -----------------------------------------------------------------------------------------------------------------------
EPL Putnam VT International Objective: capital appreciation. Invests primarily Putnam Investment
Growth Fund - Class IB in growth stocks outside the U.S. Management, Inc.
Shares
- - - -----------------------------------------------------------------------------------------------------------------------
<PAGE>
- - - -----------------------------------------------------------------------------------------------------------------------
EPN Putnam VT International Objective: long-term capital appreciation by Putnam Investment
New Opportunities Fund - investing in companies that have above-average Management, Inc.
Class IB Shares growth prospects due to the fundamental growth of
their market sector. Invests primarily in growth
stocks outside the U.S.
- - - -----------------------------------------------------------------------------------------------------------------------
- - - -----------------------------------------------------------------------------------------------------------------------
EMC Royce Micro-Cap Portfolio Objective: long-term growth of capital. Invests Royce & Associates,
primarily in a broadly diversified portfolio of Inc.
equity securities issued by micro-cap companies
(companies with stock market capitalizations below
$300 million).
- - - -----------------------------------------------------------------------------------------------------------------------
- - - -----------------------------------------------------------------------------------------------------------------------
EPR Royce Premier Portfolio Objective: long-term growth of capital with Royce & Associates,
current income as a secondary objective. Invests Inc.
primarily in a limited number of equity securities
issued by small companies with stock market
capitalization between $300 million and $1.5
billion.
- - - -----------------------------------------------------------------------------------------------------------------------
- - - -----------------------------------------------------------------------------------------------------------------------
Third Avenue Value Objective: long-term capital appreciation. Invests The Investment
Portfolio primarily in common stocks of well-finance Adviser EQSF
companies at a substantial discount to what the Advisers, Inc.
Advisor believes is their true value.
- - - -----------------------------------------------------------------------------------------------------------------------
- - - -----------------------------------------------------------------------------------------------------------------------
EIC Wanger International Small Objective: long-term growth of capital. Invests Wanger Asset
Cap primarily in stocks of small- and medium-size Management, L.P.
non-U.S. companies.
- - - -----------------------------------------------------------------------------------------------------------------------
- - - -----------------------------------------------------------------------------------------------------------------------
EUC Wanger U.S. Small Cap Objective: long-term growth of capital. Invests Wanger Asset
primarily in stocks of small- and medium-size U.S. Management, L.P.
companies.
- - - -----------------------------------------------------------------------------------------------------------------------
- - - -----------------------------------------------------------------------------------------------------------------------
EEG Warburg Pincus Trust - Objective: maximum capital appreciation. Invests Warburg Pincus Asset
Emerging Growth Portfolio primarily in equity securities of small- to medium Management, Inc.
sized U.S. emerging-growth companies.
- - - -----------------------------------------------------------------------------------------------------------------------
</TABLE>
[To be updated on amendment]
The investment objectives and policies of some of the funds are similar to the
investment objectives and policies of other mutual funds that an investment
advisor or its affiliates manage. Although the objectives and policies may be
similar, each fund will have its own portfolio holdings and its own fees and
expenses. Accordingly, each fund will have its own investment results, and those
results may differ significantly from other funds with similar investment
objectives and policies.
The investment managers and advisors cannot guarantee that the funds will meet
their investment objectives. Please read the funds' prospectuses for facts you
should know before investing. These prospectuses are also available by
contacting us at the address or telephone number on the first page of this
prospectus.
All funds are available to serve as the underlying investments for variable
annuities. Some funds also are available to serve as investment options for
variable life insurance policies and tax-deferred retirement plans. It is
possible that in the future, it may be disadvantageous for variable annuity
accounts and variable life insurance accounts and/or tax-deferred retirement
plans to invest in the available funds simultaneously.
Although the insurance company and the funds do not currently foresee any such
disadvantages, the boards of directors or trustees of the appropriate funds will
monitor events in order to identify any material conflicts between annuity
owners, policy owners and tax-deferred retirement plans and to determine what
action, if any, should be taken in response to a conflict. If a board were to
conclude that it should establish separate funds for the variable annuity,
variable life insurance and tax-deferred retirement plan accounts, you would not
bear any expenses associated with establishing separate funds. Please refer to
the funds' prospectuses for risk disclosure regarding simultaneous investments
by variable annuity, variable life insurance and tax-deferred retirement plan
accounts.
<PAGE>
The IRS issued final regulations relating to the diversification requirements
under Section 817(h) of the Code. Each fund intends to comply with these
requirements.
The variable account was established under Indiana law on July 15, 1987, and the
subaccounts are registered together as a single unit investment trust under the
Investment Company Act of 1940 (the 1940 Act). This registration does not
involve any supervision of our management or investment practices and policies
by the SEC. All obligations arising under the contracts are general obligations
of American Enterprise Life.
The variable account meets the definition of a separate account under federal
securities laws. We credit or charge income, capital gains and capital losses of
each subaccount only to that subaccount. State insurance law prohibits us from
charging a subaccount with liabilities of any other subaccount or of our general
business. The variable account includes other subaccounts that are available
under contracts that are not described in this prospectus.
The U.S. Treasury and the Internal Revenue Service (IRS) indicated that they may
provide additional guidance on investment control. This concerns how many
variable subaccounts an insurance company may offer and how many exchanges among
subaccounts it may allow before the contract owner would be currently taxed on
income earned within subaccount assets. At this time, we do not know what the
additional guidance will be or when action will be taken. We reserve the right
to modify the contract, as necessary, so that the owner will not be subject to
current taxation as the owner of the subaccount assets.
We intend to comply with all federal tax laws so that the contract continues to
qualify as an annuity for federal income tax purposes. We reserve the right to
modify the contract as necessary to comply with any new tax laws.
The Fixed Accounts
Guarantee Period Accounts
You may allocate purchase payments to one or more of the Guarantee Period
Accounts with Guarantee Periods ranging from two to ten years. Each Guarantee
Period Account pays an interest rate that is declared when you allocate money to
that account. That interest rate is then fixed for the Guarantee Period that you
chose. We will periodically change the declared interest rate for any future
allocations to these accounts, but we will not change the rate paid on money
currently in a Guarantee Period Account.
We have no specific formula for determining the rate of interest that we declare
as future interest rates on the Guarantee Period Accounts. We will declare the
interest rates from time to time based on our analysis of current market
conditions. In addition, we also may consider various other factors in
determining the interest rates for a given Guarantee Period including regulatory
and tax requirements; sales commissions and administrative expenses we bear;
general economic trends; and competitive factors.
You may transfer money out of the Guarantee Period Accounts within 30 days
before the end of the Guarantee Period without receiving a MVA (see "Market
Value Adjustment (MVA)" below.) At that time you may choose to start a new
Guarantee Period of the same length, transfer the money to another Guarantee
Period Account, transfer the money to any of the subaccounts, or withdraw the
money from the contract (subject to applicable withdrawal provisions). If we do
not receive any instructions at the end of your Guarantee Period, we will
automatically transfer the money into the one-year fixed account. These accounts
are not available in all states and are not offered after annuity payouts begin.
We hold amounts you allocate to the Guarantee Period Accounts in a "nonunitized"
separate account we have established under the Indiana Insurance Code. This
separate account provides an additional measure of assurance that we will make
full payment of amounts due under the Guarantee Period Accounts. State insurance
law prohibits us from charging this separate account with liabilities of any
other separate account or of our general business. We own the assets of this
separate account as well as any favorable investment performance of those
assets. You do not participate in the performance of the assets held in this
separate account. We guarantee all benefits relating to your value in the
Guarantee Period Accounts.
<PAGE>
We intend to construct and manage the investment portfolio relating to the
separate account using a strategy known as "immunization." Immunization seeks to
lock in a defined return on the pool of assets versus the pool of liabilities
over a specified time horizon. Since the return on the assets versus the
liabilities is locked in, it is "immune" to any potential fluctuations in
interest rates during the given time. We achieve immunization by constructing a
portfolio of assets with a price sensitivity to interest rate changes (i.e.,
price duration) that is essentially equal to the price duration of the
corresponding portfolio of liabilities. Portfolio immunization provides us with
flexibility and efficiency in creating and managing the asset portfolio, while
still assuring safety and soundness for funding liability obligations.
We must invest this portfolio of assets in accordance with requirements
established by applicable state laws regarding the nature and quality of
investments that life insurance companies may make and the percentage of their
assets that they may commit to any particular type of investment. Our investment
strategy will incorporate the use of a variety of debt instruments having price
durations tending to match the applicable Guarantee Periods. These instruments
include, but are not necessarily limited to, the following:
o Securities issued by the U.S. government or its agencies or
instrumentalities, which issues may or may not be guaranteed by the U.S.
government;
o Debt securities that have an investment grade, at the time of purchase,
within the four highest grades assigned by any of three nationally
recognized rating agencies - Standard & Poor's, Moody's Investors Service
or Duff and Phelp's - or are rated in the two highest grades by the
National Association of Insurance Commissioners;
o Other debt instruments which are unrated or rated below investment grade,
limited to 10% of assets at the time of purchase; and
o Real estate mortgages, limited to 45% of portfolio assets at the time of
acquisition.
In addition, options and futures contracts on fixed income securities will be
used from time to time to achieve and maintain appropriate investment and
liquidity characteristics on the overall asset portfolio.
While this information generally describes our investment strategy, we are not
obligated to follow any particular strategy except as may be required by federal
law and Indiana and other state insurance laws.
Market Value Adjustment (MVA)
You may choose to transfer or withdraw money out of the Guarantee Period
Accounts prior to the end of the Guarantee Period. The amount transferred or
withdrawn will receive a MVA which will increase or decrease the actual amount
transferred or withdrawn. We calculate the MVA using the formula shown below and
we base it on the current level of interest rates compared to the rate of your
Guarantee Period Account.
Amount transferred x ( l + i ) n/12
--------------------
( l + j + .001 )
Where: i = rate earned in the account from which funds are being transferred
j = current rate for a new Guarantee Period equal to the remaining term
in the current Guarantee Period
n = number of months remaining in the current Guarantee Period (rounded
up)
We will not make MVAs for amounts withdrawn for withdrawal charges, the annual
contract administrative charge or paid out as a death claim. We also will not
make MVAs on automatic transfers from the two-year Guarantee Period Account. We
determine any applicable withdrawal charges based on the market value adjusted
withdrawals. In some states the MVA is limited.
<PAGE>
The one-year fixed account
You may also allocate purchase payments to the one-year fixed account. We back
the principal and interest guarantees relating to the one-year fixed account.
The value of the one-year fixed account increases as we credit interest to the
account. Purchase payments and transfers to the one-year fixed account become
part of our general account. We credit interest daily and compound it annually.
We will change the interest rates from time to time at our discretion. Interest
rates will be based on various factors including, but not limited to, returns
earned on investments backing these contracts, interest rates on similar new
annuities, interest rates credited to existing annuities we offer and our
profit.
Interest in the one-year fixed account is not required to be registered with the
SEC. However, the Market Value Adjustment interests under the contracts are
registered with the SEC. The SEC staff does not review the disclosures in this
prospectus on the one-year fixed account (but the SEC does review the
disclosures in this prospectus on the Market Value Adjustment interests).
Disclosures regarding the one-year fixed account, however, may be subject to
certain generally applicable provisions of the federal securities laws relating
to the accuracy and completeness of statements made in prospectuses. (See
"Making the Most of Your Contract -- Transfer policies" for restrictions on
transfers involving the one-year fixed account.)
Buying Your Contract
You can fill out an application and send it along with your initial purchase
payment to our office. As the owner, you have all rights and may receive all
benefits under the contract. You can own a nonqualified annuity in joint tenancy
with rights of survivorship only in spousal situations. You cannot own a
qualified annuity in joint tenancy. You can buy a contract or become an
annuitant if you are 90 or younger.
When you apply, you may select:
o one of three death benefit options: Option A - Return of purchase payments
death benefit, Option B - Maximum anniversary value death benefit or 5%
Accumulation death benefit*;
o the optional Guaranteed Minimum Income Benefit Rider (6% Accumulation
Benefit Base)**;
o the optional 8% Performance Credit Rider**;
o the one-year fixed account, Guarantee Period Accounts and/or subaccounts in
which you want to invest;
o how you want to make purchase payments;
o the date you want to start receiving annuity payouts (the retirement date);
and
o a beneficiary.
*May not be available in all states.
**You may select either the Guaranteed Minimum Income Benefit Rider (6%
Accumulation Benefit Base) or the 8% Performance Credit Rider, but not both.
The contract provides for allocation of purchase payments to the subaccounts of
the variable account and/or to the fixed accounts in even 1% increments.
If your application is complete, we will process it and apply your purchase
payment to the fixed accounts and subaccounts you selected within two business
days after we receive it at our office. If we accept your application, we will
send you a contract. If we cannot accept your application within five business
days, we will decline it and return your payment. We will credit additional
purchase payments you make to your accounts on the valuation date we receive
them. We will value the additional payments at the next accumulation unit value
calculated after we receive your payments at our office.
You may make monthly payments to your contract under a Systematic Investment
Plan (SIP). You must make an initial purchase payment of at least $5,000 in
Texas, Washington, Pennsylvania or South Carolina or $2,000 in all other states.
Then, to begin the SIP, you will complete and send a form and your first SIP
payment along with your application. There is no charge for SIP. You can stop
your SIP payments at any time.
<PAGE>
In most states, you may make additional purchase payments to nonqualified and
qualified annuities until the retirement date.
The retirement date
Annuity payouts are to begin on the retirement date. You can align this date
with your actual retirement from a job, or it can be a different future date,
depending on your needs and goals and on certain restrictions. You also can
change the date, provided you send us written instructions at least 30 days
before annuity payouts begin.
For nonqualified annuities and Roth IRAs, the retirement date must be:
o no earlier than the 60th day after the contract's effective date; and
o no later than the annuitant's 85th birthday (or the tenth contract
anniversary, if later).
For qualified annuities (except Roth IRAs), to avoid IRS penalty taxes, the
retirement date generally must be:
o on or after the date the annuitant reaches age 59 1/2; and
o for IRAs and SEPs, by April 1 of the year following the calendar year when
the annuitant reaches age 70 1/2; or
o for TSAs, by April 1 of the year following the calendar year when the
annuitant reaches age 70 1/2 or, if later, retires (except that 5% business
owners may not select a retirement date that is later than April 1 of the
year following the calendar year when they reach age 70 1/2).
If you are taking the minimum IRA or TSA distributions as required by the Code
from another tax-qualified investment, or in the form of partial withdrawals
from this contract, annuity payouts can start as late as the annuitant's 85th
birthday or the tenth contract anniversary, if later.
Beneficiary
If death benefits become payable before the retirement date (while the contract
is in force and before annuity payouts begin), we will pay your named
beneficiary all or part of the contract value. If there is no named beneficiary,
then you or your estate will be the beneficiary. (See "Benefits in Case of
Death" for more about beneficiaries.)
Purchase payments
Minimum initial purchase payment (includes SIPs):
$5,000 in Texas, Washington, Pennsylvania and South Carolina
$2,000 in all other states
Minimum additional purchase payments:
$ 50 for SIPs
$100 for regular payments
Maximum total purchase payments*:
$1,000,000 for ages up to 85 (without prior approval)
$ 100,000 for ages 86 to 90 (without prior approval)
*These limits apply in total to all American Enterprise Life annuities you
own. We reserve the right to increase maximum limits. For qualified
annuities the tax-deferred retirement plan's limits on annual
contributions also apply.
<PAGE>
How to make purchase payments
1 By letter:
Send your check along with your name and contract number to:
Regular mail:
American Enterprise Life Insurance Company
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-0534
Express mail:
American Enterprise Life Insurance Company
Attention: Unit 829
733 Marquette Avenue
Minneapolis, MN 55402
2 By SIP:
Contact your sales representative to complete the necessary SIP paperwork.
Charges
Contract administrative charge
We charge this fee for establishing and maintaining your records. We deduct $30
from the contract value on your contract anniversary at the end of each contract
year. We prorate this charge among the subaccounts and the fixed accounts in the
same proportion your interest in each account bears to your total contract
value. Some states restrict the amount that you can allocate to the fixed
accounts.
We will waive this charge when your contract value, or total purchase payments
less any payments withdrawn, is $50,000 or more on the current contract
anniversary.
If you take a full withdrawal from your contract, we will deduct this charge at
the time of withdrawal regardless of the contract value or purchase payments
made. We cannot increase the annual contract administrative charge and it does
not apply after annuity payouts begin or when we pay death benefits.
Variable account administrative charge
We apply this charge daily to the subaccounts. It is reflected in the unit
values of your subaccounts and it totals 0.15% of their average daily net assets
on an annual basis. It covers certain administrative and operating expenses of
the subaccounts such as accounting, legal and data processing fees and expenses
involved in the preparation and distribution of reports and prospectuses. We
cannot increase the variable account administrative charge.
Mortality and expense risk fee
We charge this fee daily to the subaccounts. The unit values of your subaccounts
reflect this fee and it totals 1.25% of their average daily net assets on an
annual basis. This fee includes coverage under any of the three death benefit
options. This fee covers the mortality and expense risk that we assume.
Approximately two-thirds of this amount is for our assumption of mortality risk,
and one-third is for our assumption of expense risk. This fee does not apply to
the fixed accounts.
Mortality risk arises because of our guarantee to pay a death benefit and our
guarantee to make annuity payouts according to the terms of the contract, no
matter how long a specific annuitant lives and no matter how long our entire
group of annuitants live. If, as a group, annuitants outlive the life expectancy
we assumed in our actuarial tables, then we must take money from our general
assets to meet our obligations. If, as a group, annuitants do not live as long
as expected, we could profit from the mortality risk fee.
<PAGE>
Expense risk arises because we cannot increase the contract administrative
charge or variable account administrative charge and these charges may not cover
our expenses. We would have to make up any deficit from our general assets.
The subaccounts pay us the mortality and expense risk fee they accrued as
follows:
o first, to the extent possible, the subaccounts pay this fee from any
dividends distributed from the funds in which they invest;
o then, if necessary, the funds redeem shares to cover any remaining fees
payable.
We may use any profits we realize from the subaccounts' payment to us of the
mortality and expense risk fee for any proper corporate purpose, including,
among others, payment of distribution (selling) expenses. We do not expect that
the withdrawal charge, discussed in the following paragraphs, will cover sales
and distribution expenses.
Guaranteed Minimum Income Benefit Rider (6% Accumulation Benefit Base) fee
We charge a fee based on the Guaranteed Income Benefit Base for this optional
feature only if you choose this option.* If selected, we deduct the fee
(currently 0.35%) from the contract value on your contract anniversary at the
end of each contract year. We prorate this fee among the subaccounts and fixed
accounts in the same proportion your interest in each account bears to your
total contract value.
We apply the fee on an adjusted contract value calculated as the contract value
plus the lesser of zero or (a)-(b), where:
(a) is the transfers from the subaccounts to the fixed accounts in the last six
months, and
(b) is the total contract value in the fixed accounts.
This adjustment to the contract value allows us to base the charge largely on
the subaccounts, and not on the fixed accounts. We will deduct the fee, adjusted
for the number of calendar days coverage was in place, if the contract is
terminated for any reason or when annuity payouts begin. We cannot increase this
fee after the rider effective date and it does not apply after annuity payouts
begin. We can increase this fee on new contracts up to a maximum of 0.75%.
8% Performance Credit Rider fee
We charge a fee for this optional feature only if you choose this option.* If
selected, we deduct the fee of 0.25% of your contract value on your contract
anniversary date at the end of each contract year. We prorate this fee among the
subaccounts and fixed accounts in the same proportion as your interest in each
account bears to your total contract value.
We will deduct this fee, adjusted for the number of calendar days coverage was
in place, if the contract is terminated for any reason or when annuity payouts
begin. We cannot increase the 8% Performance Credit Rider fee.
*You may select either the Guaranteed Minimum Income Benefit Rider (6%
Accumulation Benefit Base) or the 8% Performance Credit Rider, but not both.
Withdrawal charge
If you withdraw all or part of your contract, you may be subject to a withdrawal
charge. A withdrawal charge applies if all or part of the withdrawal amount is
from purchase payments we received within seven years before withdrawal. The
withdrawal charge percentages that apply to you are shown in your contract. In
addition, amounts withdrawn from a Guarantee Period Account prior to the end of
the applicable Guarantee Period will be subject to a MVA. (See "The Fixed
Accounts - Market Value Adjustments (MVA).")
<PAGE>
For purposes of calculating any withdrawal charge, we treat amounts withdrawn
from your contract in the following order:
o First, in each contract year, we withdraw amounts totaling up to 10% of
your prior anniversary contract value. (We consider your initial purchase
payment to be the prior anniversary contract value during the first
contract year.) We do not assess a withdrawal charge on this amount.
o Next, we withdraw contract earnings, if any, that are greater than the
annual 10% free withdrawal amount described above. Contract earnings equal
contract value less purchase payments received and not previously
withdrawn. We do not assess a withdrawal charge on contract earnings.
NOTE: We determine contract earnings by looking at the entire contract
value, not the earnings of any particular subaccount or the fixed
account.
o Next, we withdraw purchase payments we received prior to the withdrawal
charge period shown in your contract. We do not assess a withdrawal charge
on these purchase payments.
o Finally, if necessary, we withdraw purchase payments that are all within
the withdrawal charge period shown in your contract. We withdraw these
payments on a "first-in, first-out" (FIFO) basis. We do assess a withdrawal
charge on these payments.
We determine your withdrawal charge by multiplying each of these payments by the
applicable withdrawal charge percentage, and then totaling the withdrawal
charges.
The withdrawal charge percentage depends on the number of years since you made
the payments that are withdrawn.
Years from purchase Withdrawal charge
payment receipt percentage
1 7%
2 7
3 6
4 6
5 5
6 4
7 2
Thereafter 0
For a partial withdrawal that is subject to a withdrawal charge, the amount we
actually withdraw from your contract will be the amount you request plus any
applicable withdrawal charge. We apply the withdrawal charge to this total
amount. We pay you the amount you requested. If you make a full withdrawal of
your contract, we also will deduct the applicable contract administrative
charge.
Withdrawal charge under Annuity Payout Plan E: Payouts for a specified period.
Under this payout plan, you can choose to take a withdrawal. The amount that you
can withdraw is the present value of any remaining variable payouts. The
discount rate we use in the calculation will be 5.27% if the assumed investment
rate is 3.5% and 6.77% if the assumed investment rate is 5%. The withdrawal
charge is equal to the difference in discount values using the above discount
rates and the assumed investment rate. In no event would your withdrawal charge
exceed 9% of the amount available for payouts under the plan.
<PAGE>
Withdrawal charge calculation example
The following is an example of the calculation we would make to determine the
withdrawal charge on a contract with this history:
o The contract date is July 1, 2000 with a contract year of July 1 through
June 30 and with an anniversary date of July 1 each year; and
o We received these payments:
- $10,000 July 1, 2000;
- $8,000 Dec. 31, 2005;
- $6,000 Feb. 20, 2008; and
o The owner withdraws the contract for its total withdrawal value of $38,101
on Aug. 5, 2010 and had not made any other withdrawals during that contract
year; and
o The prior anniversary July 1, 2010 contract value was $38,488.
Withdrawal charge Explanation
$0 $3,848.80 is 10% of the prior anniversary contract value
withdrawn without withdrawal charge; and
$0 $10,252.20 is contract earnings in excess of the 10% free
withdrawal amount withdrawn without withdrawal charge; and
$0 $10,000 July 1, 2000 payment was received eight or more
years before withdrawal and is withdrawn without withdrawal
charge; and
$360 $8,000 Dec. 31, 2005 payment is in its fifth year from
receipt, withdrawn with a 5% withdrawal charge; and
$420 $6,000 Feb. 20, 2008 payment is in its third year from
receipt, withdrawn with a 6% withdrawal charge.
- - - -------------------------------------
$760
Waiver of withdrawal charge We do not assess a withdrawal charge for:
o withdrawals of any contract earnings;
o withdrawals of amounts totaling up to 10% of your prior contract
anniversary contract value to the extent they exceed contract earnings;
o required minimum distributions from a qualified annuity (for those amounts
required to be distributed from the contract described in this prospectus);
o contracts settled using an annuity payout plan;
o death benefits;
o withdrawals you make under your contract's "Waiver of Withdrawal Charges"
provision. To the extent permitted by state law, your contract will include
this provision when the owner and annuitant are under age 76 on the date we
issue the contract. We will waive withdrawal charges that we normally
assess upon full or partial withdrawal if you provide proof satisfactory to
us that, as of the date you request the withdrawal, you or the annuitant
are confined to a hospital or nursing home and have been for the prior 60
days. (See your contract for additional conditions and restrictions on this
waiver); and
o to the extent permitted by state law, withdrawals you make if you or the
annuitant are diagnosed in the second or later contract years as disabled
with a medical condition that with reasonable medical certainty will result
in death within 12 months or less from the date of the licensed physician's
statement. You must provide us with a licensed physician's statement
containing the terminal illness diagnosis and the date the terminal illness
was initially diagnosed.
<PAGE>
Possible group reductions: In some cases we may incur lower sales and
administrative expenses due to the size of the group, the average contribution
and the use of group enrollment procedures. In such cases, we may be able to
reduce or eliminate the contract administrative and withdrawal charges. However,
we expect this to occur infrequently.
Premium taxes
Certain state and local governments impose premium taxes (up to 3.5%). These
taxes depend upon your state of residence or the state in which the contract was
sold. Currently, we deduct any applicable premium tax when annuity payouts
begin, but we reserve the right to deduct this tax at other times such as when
you make purchase payments or when you make a full withdrawal from your
contract.
Valuing Your Investment
We value your accounts as follows:
Fixed accounts
We value the amounts you allocated to the fixed accounts directly in dollars.
The value of a fixed account equals:
o the sum of your purchase payments and transfer amounts allocated to the
one-year fixed account and the Guarantee Period Accounts;
o plus any contract value credits allocated to the fixed accounts;
o plus interest credited;
o minus the sum of amounts withdrawn after any applicable MVA (including any
applicable withdrawal charges) and amounts transferred out;
o minus any prorated contract administrative charge;
o minus any prorated portion of the Guaranteed Minimum Income Benefit Rider
(6% Accumulation Benefit Base) fee (if applicable); and
o minus any prorated portion of the 8% Performance Credit Rider fee (if
applicable).
Subaccounts
We convert amounts you allocated to the subaccounts into accumulation units.
Each time you make a purchase payment or transfer amounts into one of the
subaccounts or we apply any contract value credits, we credit a certain number
of accumulation units to your contract for that subaccount. Conversely, each
time you take a partial withdrawal, transfer amounts out of a subaccount, or we
assess a contract administrative charge, or the 8% Performance Credit Rider fee,
or the Guaranteed Minimum Income Benefit Rider (6% Accumulation Benefit Base)
fee, we subtract a certain number of accumulation units from your contract.
The accumulation units are the true measure of investment value in each
subaccount during the accumulation period. They are related to, but not the same
as, the net asset value of the fund in which the subaccount invests. The dollar
value of each accumulation unit can rise or fall daily depending on the variable
account expenses, performance of the fund and on certain fund expenses.
Here is how we calculate accumulation unit values:
Number of units: to calculate the number of accumulation units for a particular
subaccount we divide your investment by the current accumulation unit value.
Accumulation unit value: the current accumulation unit value for each subaccount
equals the last value times the subaccount's current net investment factor.
<PAGE>
We determine the net investment factor by:
o adding the fund's current net asset value per share, plus the per share
amount of any accrued income or capital gain dividends to obtain a current
adjusted net asset value per share; then
o dividing that sum by the previous adjusted net asset value per share; and
o subtracting the percentage factor representing the mortality and expense
risk fee and the variable account administrative charge from the result.
Because the net asset value of the fund may fluctuate, the accumulation unit
value may increase or decrease. You bear all the investment risk in a
subaccount.
Factors that affect subaccount accumulation units: accumulation units may change
in two ways - in number and in value.
The number of accumulation units you own may fluctuate due to:
o additional purchase payments you allocate to the subaccounts;
o any contract value credits allocated to the subaccounts;
o transfers into or out of the subaccounts;
o partial withdrawals;
o withdrawal charges;
o prorated portions of the contract administrative charge;
o prorated portions of the Guaranteed Minimum Income Benefit Rider (6%
Accumulation Benefit Base) fee (if selected); and/or
o prorated portions of the 8% Performance Credit Rider fee (if selected).
Accumulation unit values will fluctuate due to:
o changes in funds' net asset value;
o dividends distributed to the subaccounts;
o capital gains or losses of funds;
o fund operating expenses; and/or
o mortality and expense risk fee and the variable account administrative
charge.
Contract value credits
Before annuity payouts begin, and starting in the eighth contract year while
this contract is in force, we periodically will apply a "contract value credit"
to your contract value if:
o you chose death benefit Option A - Return of purchase payment death
benefit, at the time of application (see "Benefits in Case of Death"); and
o there are "eligible purchase payments" at the time we calculate the credit.
"Eligible purchase payments" means payments you made to the contract that you
have not withdrawn and that are no longer subject to a withdrawal charge.
On an annual basis, the contract value credit is 0.50% of an amount we calculate
by multiplying (a) times (b) where:
(a) is the contract value at the time we make the calculation; and
(b) is the ratio of "eligible purchase payments" to total purchase
payments.
We reserve the right to calculate and apply the contract value credit on a
quarterly or monthly basis. If we calculate the credit on a quarterly basis, the
<PAGE>
percentage will be 0.125% instead of 0.50%. If we calculate the credit on a
monthly basis, the percentage will be 0.04167% instead of 0.50%.
We will apply the contract value credit to your contract value according to your
fixed accounts and subaccount allocation instructions that are in effect at the
time. We will continue to apply the contract value credit, if applicable, for
the life of your contract until full withdrawal or until annuity payouts begin.
The contract value credit will be taxable when we distribute it to you.
Making the Most of Your Contract
Automated dollar-cost averaging
Currently, you can use automated transfers to take advantage of dollar-cost
averaging (investing a fixed amount at regular intervals). For example, you
might transfer a set amount monthly from a relatively conservative subaccount to
a more aggressive one, or to several others, or from the one-year fixed account
or the two-year Guarantee Period Accounts to one or more subaccounts. The three
to ten year Guarantee Period Accounts are not available for automated transfers.
You can also obtain the benefits of dollar-cost averaging by setting up regular
automatic SIP payments. There is no charge for dollar-cost averaging.
This systematic approach can help you benefit from fluctuations in accumulation
unit values caused by fluctuations in the market values of the funds. Since you
invest the same amount each period, you automatically acquire more units when
the market value falls and fewer units when it rises. The potential effect is to
lower your average cost per unit.
How dollar-cost averaging works
By investing an Amount Accumulation unit Number of units
equal number of Month invested value purchased
dollars each month... Jan $100 $20 5.00
Feb 100 18 5.56
you automatically buy Mar 100 17 5.88
more units when the Apr 100 15 6.67
per unit market price May 100 16 6.25
is low... Jun 100 18 5.56
Jul 100 17 5.88
and fewer units when Aug 100 19 5.26
the per unit market Sept 100 21 4.76
price is high. Oct 100 20 5.00
You paid an average price of only $17.91 per unit over the 10 months, while the
average market price actually was $18.10.
Dollar-cost averaging does not guarantee that any subaccount will gain in value
nor will it protect against a decline in value if market prices fall. Because
dollar-cost averaging involves continuous investing, your success will depend
upon your willingness to continue to invest regularly through periods of low
price levels. Dollar-cost averaging can be an effective way to help meet your
long-term goals. For specific features contact your sales representative.
Asset Rebalancing
You can ask us in writing to automatically rebalance the subaccount portion of
your contract value either quarterly, semi-annually or annually. The period you
select will start to run on the date we record your request. On the first
valuation date of each of these periods, we automatically will rebalance your
contract value so that the value in each subaccount matches your current
subaccount percentage allocations. These percentage allocations must be in whole
numbers. Asset rebalancing does not apply to the fixed accounts. There is no
charge for asset rebalancing. The contract value must be at least $2,000.
<PAGE>
You can change your percentage allocations or your rebalancing period at any
time by contacting us in writing. We will restart the rebalancing period you
selected as of the date we record your change. You also can ask us in writing to
stop rebalancing your contract value. You must allow 30 days for us to change
any instructions that currently are in place. For more information on asset
rebalancing, contact your sales representative.
Transferring money between accounts
You may transfer money from any one subaccount, or the fixed accounts, to
another subaccount before annuity payouts begin. (Certain restrictions apply to
transfers involving the fixed accounts.) We will process your transfer on the
valuation date we receive your request. We will value your transfer at the next
accumulation unit value calculated after we receive your request. There is no
charge for transfers. Before making a transfer, you should consider the risks
involved in switching investments. Transfers out of the Guarantee Period
Accounts will be subject to a MVA if done more than 30 days before the end of
the Guarantee Period.
We may suspend or modify transfer privileges at any time. Excessive trading
activity can disrupt fund management strategy and increase expenses, which are
borne by all contract owners who allocated purchase payments to the fund
regardless of their transfer activity. We may apply modifications or
restrictions in any reasonable manner to prevent transfers we believe will
disadvantage other contract owners.
These modifications could include, but not be limited to:
o requiring a minimum time period between each transfer;
o not accepting transfer requests of an agent acting under power of attorney
on behalf of more than one contract owner; or
o limiting the dollar amount that a contract owner may transfer at any one
time.
For information on transfers after annuity payouts begin, see "Transfer
policies" below.
Transfer policies
o Before annuity payouts begin, you may transfer contract values between the
subaccounts, or from the subaccounts to the fixed accounts at any time.
However, if you made a transfer from the one-year fixed account to the
subaccounts, you may not make a transfer from any subaccount back to the
one-year fixed account for six months following that transfer.
o You may transfer contract values from the one-year fixed account to the
subaccounts or the Guarantee Period Accounts once a year on or within 30
days before or after the contract anniversary (except for automated
transfers, which can be set up at any time for certain transfer periods
subject to certain minimums). Transfers from the one-year fixed account are
not subject to a MVA.
o You may transfer contract values from a Guarantee Period Account any time
after 60 days of transfer or payment allocation to the account. Transfers
made before the end of the Guarantee Period will receive a MVA, which may
result in a gain or loss of contract value.
o If we receive your request on or within 30 days before or after the
contract anniversary date, the transfer from the one-year fixed account to
the subaccounts or the Guarantee Period Accounts will be effective on the
valuation date we receive it.
o We will not accept requests for transfers from the one-year fixed account
at any other time.
o Once annuity payouts begin, you may not make transfers to or from the
one-year fixed account, but you may make transfers once per contract year
among the subaccounts. During the annuity payout period, we reserve the
right to limit the number of subaccounts in which you may invest.
o Once annuity payouts begin, you may not make any transfers to the Guarantee
Period Accounts.
How to request a transfer or withdrawal
1 Send your name, contract number, Social Security Number
By letter: or Taxpayer Identification Number and signed request
for a transfer or withdrawal to:
Regular mail:
American Enterprise Life Insurance Company
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-0534
Express mail:
American Enterprise Life Insurance Company
Attention: Unit 829
733 Marquette Avenue
Minneapolis, MN 55402
Minimum amount
Transfers or
withdrawals: $500 or entire account balance
Maximum amount
Transfers or
withdrawals: Contract value or entire account balance
2 Your sales representative can help you set up automated
By automated transfers or partial withdrawals among your subaccounts or
transfers and fixed accounts.
automated
partial You can start or stop this service by written request or
withdrawals: other method acceptable to us.
You must allow 30 days for us to change any instructions
that are currently in place.
o Automated transfers from the one-year fixed account to any one of the
subaccounts may not exceed an amount that, if continued, would deplete the
one-year fixed account within 12 months.
o Automated withdrawals may be restricted by applicable law under some
contracts.
o You may not make additional purchase payments if automated partial
withdrawals are in effect.
o Automated partial withdrawals may result in IRS taxes and penalties on all
or part of the amount withdrawn.
Minimum amount
Transfers or
withdrawals: $100 monthly
$250 quarterly, semi-annually or nnually
Maximum amount
Transfers or
withdrawals: Contract value (except for automated transfers
from the one-year fixed account)
<PAGE>
3 Call between 8 a.m. and 6 p.m. Central time:
By phone:
800-333-3437 or
(612) 671-7700 (Minneapolis/St. Paul area)
Minimum amount
Transfers or
withdrawals: $500 or entire account balance
Maximum amount
Transfers: Contract value or entire account balance
Withdrawals: $25,000
We answer telephone requests promptly, but you may experience delays when the
call volume is unusually high. If you are unable to get through, use the mail
procedure as an alternative.
We will honor any telephone transfer or withdrawal requests that we believe are
authentic and we will use reasonable procedures to confirm that they are. This
includes asking identifying questions and tape recording calls. We will not
allow a telephone withdrawal within 30 days of a phoned-in address change. As
long as we follow the procedures, we (and our affiliates) will not be liable for
any loss resulting from fraudulent requests.
Telephone transfers and withdrawals are automatically available. You may request
that telephone transfers and withdrawals not be authorized from your account by
writing to us.
Guaranteed Minimum Income Benefit Rider (6% Accumulation Benefit Base)
This optional Guaranteed Minimum Income Benefit Rider may be available in many
jurisdictions for a separate annual charge (see "Charges - Guaranteed Minimum
Income Rider (6% Accumulation Benefit Base) fee"). You cannot select this rider
if you select the 8% Performance Credit Rider. The rider guarantees a minimum
amount of fixed annuity lifetime income during the annuity payout period if your
contract has been in force for at least seven years, subject to the conditions
described below. The rider also provides you the option of variable annuity
payouts, with a guaranteed minimum initial payment. This rider is only available
at the time you purchase your contract.
In some instances, we may allow you to add this rider if it was not available
when you initially purchased your contract. In these instances we would add this
rider at the next contract anniversary with the contract value at that
anniversary reflected as the premium. All conditions of the rider would use this
date as the effective date.
This rider does not create contract value or guarantee the performance of any
investment option. Fixed annuity payouts under the terms of this rider will
occur at the guaranteed annuity purchase rates based on the guaranteed annuitant
mortality table in your contract and a 2.5% interest rate. We base first year
payments from the variable annuity payout option offered under this rider on the
same factors as the fixed annuity payout option. We base subsequent payments on
the initial payment and an assumed annual return of 5%. Because this rider is
based on guaranteed actuarial factors for the fixed option, the level of fixed
lifetime income it guarantees may be less than the level that would be provided
by applying the then current annuity factors. Likewise, for the variable annuity
payout option, we base the rider on more conservative factors resulting in a
lower initial payment and lower lifetime payments than those provided otherwise
if the same benefit base were used. However, the Guaranteed Income Benefit Base
described below establishes a floor, which when higher than the contract value,
can result in a higher annuity payout level. Thus, the rider is a guarantee of a
minimum amount of annuity income.
<PAGE>
The Guaranteed Income Benefit Base uses the same calculation as the Variable
account 5% floor but uses a 6% accumulation rate.
The Guaranteed Income Benefit Base, less any applicable premium tax, is the
value that will be used to determine minimum annuity payouts if the rider is
exercised.
We reserve the right to exclude subsequent payments paid in the last five years
before exercise of the benefit in the calculation of the Guaranteed Income
Benefit Base. We would do so only if such payments total $50,000 or more or if
they are 25% or more of total payments paid into the contract.
If we exclude such payments, the Guaranteed Income Benefit Base would be
calculated as the greatest of:
(a) contract value less "market value adjusted prior five years of payments"
(b) total payments less prior five years of payments and adjusted partial
withdrawals
(c) the Variable account 6% floor, less the "6% adjusted prior five years of
payments"
"Market value adjusted prior five years of payments" are calculated as the sum
of each such payment, multiplied by the ratio of the current contract value over
the estimated contract value on the anniversary prior to such payment. We
calculate the estimated contract value at such anniversary by assuming that
payments and partial withdrawals occurring in a contract year take place at the
beginning of the year for that anniversary and every year after that to the
current contract year.
"6% Adjusted prior 5 years of payments" are calculated as the sum of each
payment accumulated at 6% for the number of full contract years they have been
in the contract.
Conditions on election of the rider: The following conditions apply to the
election of the rider:
o you must elect the rider at the time you purchase your contract,
o you must elect either the Maximum anniversary value death benefit or the 5%
Accumulation death benefit and
o the annuitant must be age 75 or younger on the contract date.
Fund selection to continue the rider: You may allocate your purchase payments to
any of the subaccounts or the fixed accounts. However, we reserve the right to
limit the amount in the AXPSM Variable Portfolio - Cash Management Fund to 10%
of the total amount in the subaccounts. If we are required to activate this
restriction, and you have more than 10% of your subaccount value in this fund,
we will send you notice and ask that you reallocate your contract value so that
the limitation is satisfied within 60 days. If after 60 days the limitation is
not satisfied, we will terminate the rider.
Exercising the rider:
o you may only exercise the rider within 30 days after any contract
anniversary following the o expiration of a seven-year waiting period from
the effective date of the rider, and
o the annuitant on the retirement date must be between 50 and 86 years old,
and
o you can only take an annuity payout in one of the following annuity payout
plans: - Plan A -- Life Annuity - no refund - Plan B -- Life Annuity with
ten years certain - Plan D -- Joint and last survivor life annuity - no
refund
<PAGE>
Terminating the rider:
o You may terminate the rider within 30 days after the first anniversary of
the latest of the effective date of the rider.
o You may terminate the rider any time after the seventh anniversary of the
effective date of the rider.
o The rider will terminate on the date you make a full withdrawal from the
contract, or annuity payouts begin, or on the date that a death benefit is
payable.
o The rider will terminate on the contract anniversary after the annuitant's
86th birthday.
Example:
o You purchase the contract with a payment of $104,000 on Jan. 1, 2000.
o There are no additional purchase payments and no partial withdrawals.
o The money is fully allocated to the subaccounts.
o The annuitant is male and age 55 on the contract date. For the joint and
last survivor option (annuity payout Plan D), the joint annuitant is female
and age 55 on the contract date.
o The contract is within 30 days after contract anniversary.
If the Guaranteed Minimum Income Benefit Rider (6% Accumulation Benefit Base) is
exercised, the minimum fixed annuity monthly payout or the first year variable
annuity monthly payout would be:
Fixed Annuity Payout Options
Minimum Guaranteed Annual Income
<TABLE>
<S> <C> <C> <C> <C>
Contract Anniversary Guaranteed Income Benefit Base Plan A -- Plan B -- Plan D --
At Exercise Life Annuity Life Annuity Joint and last
- no refund with ten years certain annuity - no refund
10 $186,248 $970.35 $944.28 $772.93
15 $249,242 $1,485.48 $1,415.69 $1,149.00
</TABLE>
After the first year payments, lifetime income payments on a variable annuity
payout option will depend on the investment performance of the subaccounts you
select. The payments will be higher if investment performance is greater than a
5% annual return and lower if investment performance is less than a 5% annual
return.
8% Performance Credit Rider
If this rider is available in your state, you may choose to add this benefit to
your contract at issue. You cannot select this rider if you select the
Guaranteed Minimum Income Benefit Rider (6% Accumulation Benefit Base). This
feature provides certain benefits if your contract value has not reached or
exceeded a target value (as defined below) on the seventh and tenth rider
anniversaries.
Your benefits under this rider are as follows:
(a) if on the seventh rider anniversary, your contract value has not met
or exceeded the target value, we will make a credit to your contract
equal to 3% of your purchase payments less adjusted partial
withdrawals and purchase payments made in the prior five years; and
(b) if on the tenth rider anniversary, your contract value has not met or
exceeded the target value, we will make an additional credit to your
contract equal to 5% of your purchase payments less adjusted partial
withdrawals and purchase payments made in the prior five years.
On the tenth rider anniversary and every ten years thereafter while you have the
contract, the ten year calculation period restarts. We use the contract value
(after any credits) on that contract anniversary as the initial purchase payment
for the calculation of the target value and any credit. Additional credits may
then be made at the end of each ten year period as described above.
<PAGE>
In some instances, we may allow you to add this rider if it was not available
when you initially purchased your contract. In these instances we would add this
rider at the next contract anniversary with the contract value at that
anniversary reflected as the initial purchase payment for the calculation of the
target value and any credit.
Target value: The target value accumulates purchase payments at an annual
interest rate of 8% until the tenth rider anniversary less adjusted partial
withdrawals also accumulated at 8% until the tenth rider anniversary.
Adjusted partial withdrawals: We calculate the adjusted partial withdrawals for
the 8% Performance Credit Rider for each partial withdrawal as the product of
(a) times (b) where:
(a) is the ratio of the amount of partial withdrawal (including any applicable
withdrawal charge) to the contract value on the date of (but prior to) the
partial withdrawal, and
(b) is the Target Value on the date of (but prior to) the partial withdrawal.
Reset option: You can elect to lock in the growth in your contract by restarting
the ten-year period on any contract anniversary. If you elect to restart the
calculation period, the contract value on the restart date is used as the
initial purchase payment for the calculation of the target value and any credit.
The next ten year calculation period will then restart at the end of the new ten
year period from the most recent restart date. We must receive your request to
restart the calculation period within 30 days after a contract anniversary.
Fund selection to continue the rider: You may allocate your purchase payments to
any of the subaccounts or the fixed accounts. However, we reserve the right to
limit the amount in the fixed accounts and the AXPSM Variable Portfolio - Cash
Management Fund to 10% of the contract value. If we are required to activate
this restriction and you have more than 10% of your contract value in these
accounts, we will send you notice and ask you that you reallocate your contract
value so that the limitation is satisfied in 60 days. If after 60 days the
limitation is not satisfied, we will terminate the rider.
Terminating the rider:
o You may terminate the rider within 30 days following the first anniversary
after the effective date of the rider.
o You may terminate the rider within 30 days following the tenth anniversary
of the latest of the effective date of the rider or the last reset date.
o The rider will terminate on the date you make a full withdrawal from the
contract, or annuity payouts begin, or on the date that a death benefit is
payable.
Example:
o You purchase the contract with a payment of $104,000 on January 1, 2000.
o There are no additional purchase payments and no partial withdrawals.
o On January 1, 2007, the contract value is $150,000.
o The credit on January 1, 2007 is determined as:
Target Value on January 1, 2007 =
104,000 x (1.08)^7 = 104,000 x 1.71382 = $178,237.72
As the target value of $178,237.72 is greater than the contract value of
$150,000, a credit is made to the contract equal to $3,120 (or 3% of the
purchase payment of $104,000). Your total contract value on that date is
$153,120.
<PAGE>
o On January 1, 2010, the contract value is $220,000.
o The credit on January 1, 2010 is determined as:
Target Value on January 1, 2010 =
$104,000 x (1.08)^10 = $104,000 x 2.158924 = $224,528.20
As the target value of $224,528.20 is greater than the contract value of
$220,000, a credit is made to the contract equal to $5,200 (or 5% of the
purchase payment of $104,000). Your total contract value on that date is
$225,200.
o The benefit automatically restarts on January 1, 2010 with the "initial
payment" equal to $225,200 and the credit determination made on January 1,
2017 and January 1, 2020.
Withdrawals
You may withdraw all or part of your contract at any time before annuity payouts
begin by sending us a written request or calling us. We will process your
withdrawal request on the valuation date we receive it. For total withdrawals,
we will compute the value of your contract at the next accumulation unit value
calculated after we receive your request. We may ask you to return the contract.
You may have to pay charges (see "Charges - Withdrawal charge") and IRS taxes
and penalties (see "Taxes"). You cannot make withdrawals after annuity payouts
begin except under Plan E (see "The Annuity Payout Period Annuity payout
plans").
Withdrawal policies
If you have a balance in more than one account and you request a partial
withdrawal, we will withdraw money from all your subaccounts and/or the fixed
accounts in the same proportion as your value in each account correlates to your
total contract value, unless you request otherwise.
Receiving payment
By regular or express mail:
o payable to owner;
o mailed to address of record.
NOTE: We will charge you a fee if you request express mail delivery.
Normally, we will send the payment within seven days after receiving your
request. However, we may postpone the payment if:
- - - -- the withdrawal amount includes a purchase payment check that has not
cleared;
- - - -- the NYSE is closed, except for normal holiday and weekend closings; --
trading on the NYSE is restricted, according to SEC rules; -- an emergency,
as defined by SEC rules, makes it impractical to sell securities or value
the net assets of the accounts; or
- - - -- the SEC permits us to delay payment for the protection of security holders.
<PAGE>
TSA Special Withdrawal Provisions
Participants in Tax-Sheltered Annuities
The Code imposes certain restrictions on your right to receive early
distributions from a TSA:
o Distributions attributable to salary reduction contributions (plus
earnings) made after Dec. 31, 1988, or to transfers or rollovers from other
contracts, may be made from the TSA only if:
- you are at least age 59 1/2;
- you are disabled as defined in the Code;
- you separated from the service of the employer who purchased the
contract; or
- the distribution is because of your death.
o If you encounter a financial hardship (as defined by the Code), you may
receive a distribution of all contract values attributable to salary
reduction contributions made after Dec. 31, 1988, but not the earnings on
them.
o Even though a distribution may be permitted under the above rules, it may
be subject to IRS taxes and penalties (see "Taxes").
o The above restrictions on distributions do not affect the availability of
the amount credited to the contract as of Dec. 31, 1988. The restrictions
also do not apply to transfers or exchanges of contract value within the
contract, or to another registered variable annuity contract or investment
vehicle available through the employer.
Changing Ownership
You may change ownership of your nonqualified annuity at any time by completing
a change of ownership form we approve and sending it to our office. The change
will become binding upon us when we receive and record it. We will honor any
change of ownership request that we believe is authentic and we will use
reasonable procedures to confirm authenticity. If we follow these procedures, we
will not take any responsibility for the validity of the change.
If you have a nonqualified annuity, you may incur income tax liability by
transferring, assigning or pledging any part of it. (See "Taxes.")
If you have a qualified annuity, you may not sell, assign, transfer, discount or
pledge your contract as collateral for a loan, or as security for the
performance of an obligation or for any other purpose except as required or
permitted by the Code. However, if the owner is a trust or custodian, or an
employer acting in similar capacity, ownership of the contract may be
transferred to the annuitant.
Benefits in Case of Death
There are two standard death benefit options under this contract or you may
choose to select the 5% Accumulation death benefit rider. If either you or the
annuitant are age 79 or older (in most states) on the contract date, Option A
will apply. If both you and the annuitant are under age 79 (in most states) on
the contract date, you can elect either Option B or the 5% Accumulation death
benefit rider on your application. Once you elect an option, you cannot change
it. We show the option that applies in your contract.
Under either option, we will pay the death benefit to your beneficiary upon the
earlier of your death or the annuitant's death. If a contract has more than one
person as the owner, we will pay benefits upon the first to die of any owner or
the annuitant. Other rules apply to qualified annuities. (See "Taxes").
<PAGE>
Option A - Return of purchase payment death benefit We will pay the beneficiary
the greater of:
o the contract value; or
o the total purchase payments paid minus "adjusted partial withdrawals."
Contract value credits may apply if you choose Option A at the time of
application (see "Valuing your Investment - Contract value credits").
Option B - Maximum anniversary value death benefit We will pay the beneficiary
the greatest of:
o the contract value; or
o the total purchase payments paid minus any "adjusted partial withdrawals";
or
o the "maximum anniversary value" immediately preceding the date of death
plus the dollar amount of any payments since that anniversary and minus any
"adjusted partial withdrawals" since that anniversary.
Maximum anniversary value: Each contract anniversary prior to the earlier of
your or the annuitant's 81st birthday, we calculate the anniversary value which
is the greater of:
(a) the contract value on that anniversary; or
(b) total payments made to the contract minus "adjusted partial
withdrawals."
The "maximum anniversary value" is equal to the greatest of these anniversary
values.
After your or the annuitant's 81st birthday, the death benefit continues to be
the death benefit value as of that date, plus any subsequent payments and minus
any "adjusted partial withdrawals."
Adjusted partial withdrawals: Under either Option A or Option B, we calculate
"adjusted partial withdrawals" for each partial withdrawal as the product of (a)
times (b) where:
(a) is the ratio of the amount of the partial withdrawal (including
any applicable withdrawal charge) to the contract value on the
date of (but prior to) the partial withdrawal; and
(b) is the death benefit on the date of (but prior to) the partial
withdrawal.
Example: Option A - Return of purchase payment death benefit
o You purchase the contract with a payment of $20,000 on Jan. 1, 2000.
o On Jan. 1, 2001 you make an additional purchase payment of $5,000.
o On March 1, 2001 the contract value falls to $22,000 and you take a $1,500
partial withdrawal.
o On March 1, 2002 the contract value falls to $23,000.
We calculate the death benefit on March 1, 2002 as follows:
Total purchase payments paid: $25,000.00
minus any "adjusted partial withdrawals"
calculated as: 1,500 x 25,000 = - 1,704.54
----- ----------
22,000
for a death benefit of: $23,295.45
<PAGE>
Example: Option B - Maximum anniversary value death benefit
o You purchase the contract with a payment of $20,000 on Jan. 1, 2000.
o On Jan. 1, 2001 (the first contract anniversary) the contract value grows
to $29,000.
o On March 1, 2001 the contract value falls to $22,000, at which point you
take a $1,500 partial withdrawal, leaving a contract value of $20,500.
We calculate the death benefit on March 1, 2001 as follows:
The highest contract value on any prior contract anniversary: $29,000.00
plus any purchase payments paid since that anniversary: + 0.00
minus any "adjusted partial withdrawal" taken since that anniversary,
calculated as: 1,500 x 29,000 = - 1,977.27
-------------- ----------
22,000
for a death benefit of: $27,022.72
5% Accumulation death benefit rider
If this rider is available in your state and both you and the annuitant are age
79 or younger on the contract date, you may choose to add this benefit to your
contract. This rider provides that if you or the annuitant die before annuity
payouts begin while this contract is in force, we will pay the beneficiary the
greatest of the following amounts:
o the contract value; or
o the total purchase payments paid less any "adjusted partial withdrawals";
or
o the Variable account 5% floor
We calculate the "adjusted partial withdrawals" as described above except that
only the benefit in number two is taken into account.
The Variable account 5% floor
The Variable account 5% floor is the sum of the value in the fixed accounts plus
the variable account floor. On each contract anniversary prior to the earlier of
your or the annuitant's 81st birthday, we increase the variable account floor by
accumulating the prior anniversary's floor at 5%. On the first contract
anniversary, the floor is increased by 5% of the accumulated initial purchase
payments allocated to the subaccounts. On any day that you allocate additional
amounts to, or withdraw or transfer from the subaccounts, we adjust the floor by
adding the additional amounts and subtracting the "adjusted partial withdrawals"
or "adjusted transfers."
After the contract anniversary immediately following either your or the
annuitant's 81st birthday, the Variable account 5% floor is the floor on that
anniversary increased by additional amounts allocated to the subaccounts since
that anniversary plus purchase payment credits and reduced by any "adjusted
partial withdrawals" since that anniversary.
For the Variable account 5% floor, we calculate the "adjusted partial
withdrawals" or "adjusted transfers" as the result of (a) times (b) where:
(a) is the ratio of the amount of withdrawal (including any withdrawal charges)
or transfer from the subaccounts to the total value in the subaccounts on
the date of (but prior to) the withdrawal or transfer.
(b) is the variable account floor on the date of (but prior to) the withdrawal
or transfer.
<PAGE>
Example:
o You purchase the contract with a payment of $25,000 on Jan. 1, 2000 with
$5,000 allocated to the one-year fixed account and $20,000 allocated to the
subaccounts.
o On Jan. 1, 2001 (the first contract anniversary), the one-year fixed
account value is $5,200 and the subaccount value is $17,000. Total contract
value is $23, 200.
o On March 1, 2001, the one-year fixed account value is $5,300 and the
subaccount value is $19,000. Total contract value is $24,300. You take a
$1,500 partial withdrawal all from the subaccounts, leaving the contract
value at $22,800.
We calculate the death benefit on March 1, 2001 as follows:
The variable account floor on Jan. 1, 2001,
calculated as: 1.05 x 20,000 = $ 21,000
plus any purchase payments paid since that anniversary: + 0.00
minus any "adjusted partial withdrawals" from the subaccounts,
calculated as: 1,500 x 21,000 =
19,000 -$ 1,657.89
-----------
Variable account floor benefit $ 19,342.10
plus the one-year fixed account value + 5,300.00
----------
for a death benefit of:
$ 24,642.10
If your spouse is sole beneficiary under a nonqualified annuity and you die
before the retirement date, your spouse may keep the contract as owner with the
contract value equal to the death benefit that would have otherwise been paid.
To do this your spouse must, within 60 days after we receive proof of death,
give us written instructions to keep the contract in force. There will be no
withdrawal charges on the contract from that point forward unless additional
purchase payments are made. The Guaranteed Minimum Income Benefit Rider (6%
Accumulation Benefit Base), if selected, is then terminated.
Under a qualified annuity, if the annuitant dies before the Code requires
distributions to begin, and the spouse is the only beneficiary, the spouse may
keep the contract as owner until the date on which the annuitant would have
reached age 70 1/2 or any other date permitted by the Code. To do this, the
spouse must give us written instructions within 60 days after we receive proof
of death. The contract value is equal to the death benefit that would otherwise
have been paid. There will be no withdrawal charges on the contract from that
point forward unless additional purchase payments are made. The Guaranteed
Minimum Income Benefit Rider (6% Accumulation Benefit Base), if selected, is
then terminated.
Payments: Under a nonqualified annuity, we will pay the beneficiary in a single
sum unless you give us other written instructions. We must fully distribute the
death benefit within five years of your death. However, the beneficiary may
receive payouts under any annuity payout plan available under this contract if:
o the beneficiary asks us in writing within 60 days after we receive proof of
death; and
o payouts begin no later than one year after your death, or other date as
permitted by the Code; and
o the payout period does not extend beyond the beneficiary's life or life
expectancy.
<PAGE>
When paying the beneficiary, we will process the death claim on the valuation
date our death claim requirements are fulfilled. We will determine the
contract's value at the next accumulation unit value calculated after our death
claim requirements are fulfilled. We pay interest, if any, from the date of
death at a rate no less than required by law. We will mail payment to the
beneficiary within seven days after our death claim requirements are fulfilled.
Other rules may apply to qualified annuities. (See "Taxes.")
The Annuity Payout Period
As owner of the contract, you have the right to decide how and to whom annuity
payouts will be made starting at the retirement date. You may select one of the
annuity payout plans outlined below, or we may mutually agree on other payout
arrangements. We do not deduct any withdrawal charges under the payout plans
listed below.
You also decide whether we will make annuity payouts on a fixed or variable
basis, or a combination of fixed and variable. The amounts available to purchase
payouts under the plan you select is the contract value on your retirement date
(less any applicable premium tax). You may reallocate this contract value to the
one-year fixed account to provide fixed dollar payouts and/or among the
subaccounts to provide variable annuity payouts. During the annuity payout
period, we reserve the right to limit the number of subaccounts in which you may
invest. The Guarantee Period Accounts are not available during this payout
period.
Amounts of fixed and variable payouts depend on:
o the annuity payout plan you select;
o the annuitant's age and, in most cases, sex;
o the annuity table in the contract; and
o the amounts you allocated to the accounts at settlement.
In addition, for variable payouts only, amounts depend on the investment
performance of the subaccounts you select. These payouts will vary from month to
month because the performance of the funds will fluctuate. (In the case of fixed
annuities, payouts remain the same from month to month.)
For information with respect to transfers between accounts after annuity payouts
begin, see "Making the Most of Your Contract -- Transfer policies."
Annuity table
The annuity table in your contract shows the amount of the first monthly payment
for each $1,000 of contract value according to the age and, when applicable, the
sex of the annuitant. (Where required by law, we will use a unisex table of
settlement rates.) The table assumes that the contract value is invested at the
beginning of the annuity payout period and earns a 5% rate of return, which is
reinvested and helps to support future payouts.
Substitution of 3.5% table
If you ask us at least 30 days before the retirement date, we will substitute an
annuity table based on an assumed 3.5% investment rate for the 5% table in the
contract. The assumed investment rate affects both the amount of the first
payout and the extent to which subsequent payouts increase or decrease. Using
the 5% table results in a higher initial payment, but later payouts will
increase more slowly when annuity unit values rise and decrease more rapidly
when they decline.
<PAGE>
Annuity payout plans
You may choose any one of these annuity payout plans by giving us written
instructions at least 30 days before contract values are used to purchase the
payout plan:
o Plan A - Life annuity - no refund: We make monthly payouts until the
annuitant's death. Payouts end with the last payout before the annuitant's
death. We will not make any further payouts. This means that if the
annuitant dies after we made only one monthly payout, we will not make any
more payouts.
o Plan B - Life annuity with five, ten or 15 years certain: We make monthly
payouts for a guaranteed payout period of five, ten or 15 years that you
elect. This election will determine the length of the payout period to the
beneficiary if the annuitant should die before the elected period expires.
We calculate the guaranteed payout period from the retirement date. If the
annuitant outlives the elected guaranteed payout period, we will continue
to make payouts until the annuitant's death.
o Plan C - Life annuity - installment refund: We make monthly payouts until
the annuitant's death, with our guarantee that payouts will continue for
some period of time. We will make payouts for at least the number of months
determined by dividing the amount applied under this option by the first
monthly payout, whether or not the annuitant is living.
o Plan D - Joint and last survivor life annuity - no refund: We make monthly
payouts while both the annuitant and a joint annuitant are living. If
either annuitant dies, we will continue to make monthly payouts at the full
amount until the death of the surviving annuitant. Payouts end with the
death of the second annuitant.
o Plan E - Payouts for a specified period: We make monthly payouts for a
specific payout period of ten to 30 years that you elect. We will make
payouts only for the number of years specified whether the annuitant is
living or not. Depending on the selected time period, it is foreseeable
that an annuitant can outlive the payout period selected. During the payout
period, you can elect to have us determine the present value of any
remaining variable payouts and pay it to you in a lump sum. We determine
the present value of the remaining annuity payouts which are assumed to
remain level at the initial payment. The discount rate we use in the
calculation will vary between 5.27% and 6.77% depending on the applicable
assumed investment rate. (See "Charges - Withdrawal charge under Annuity
Payout Plan E.") You can also take a portion of the discounted value once a
year. If you do so, your monthly payouts will be reduced by the proportion
of your withdrawal to the full discounted value. A 10% IRS penalty tax
could apply if you take a withdrawal. (See "Taxes.")
Restrictions for some tax-deferred retirement plans: If you purchased a
qualified annuity, you may be required to select a payout plan that provides for
payouts:
o over the life of the annuitant;
o over the joint lives of the annuitant and a designated beneficiary;
o for a period not exceeding the life expectancy of the annuitant; or
o for a period not exceeding the joint life expectancies of the
annuitant and a designated beneficiary.
You have the responsibility for electing a payout plan that complies with your
contract and with applicable law.
If we do not receive instructions: You must give us written instructions for the
annuity payouts at least 30 days before the annuitant's retirement date. If you
do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed.
Contract values that you allocated to the fixed accounts will provide fixed
dollar payouts and contract values that you allocated among the subaccounts will
provide variable annuity payouts.
<PAGE>
If monthly payouts would be less than $20: We will calculate the amount of
monthly payouts at the time the contract value is used to purchase a payout
plan. If the calculations show that monthly payouts would be less than $20, we
have the right to pay the contract value to the owner in a lump sum or to change
the frequency of the payouts.
Death after annuity payouts begin
If you or the annuitant die after annuity payouts begin, we will pay any amount
payable to the beneficiary as provided in the annuity payout plan in effect.
Taxes
Generally, under current law, your contract has a tax-deferral feature. That is
any increase in the value of the fixed accounts and/or subaccounts in which you
invest is taxable to you only when you receive a payout or withdrawal (see
detailed discussion below). Any portion of the annuity payouts and any
withdrawals you request that represent ordinary income normally are taxable. We
will send you a tax information reporting form for any year in which we made a
taxable distribution according to our records. Roth IRAs may grow and be
distributed tax free if you meet certain distribution requirements.
Annuity payouts under nonqualified annuities: A portion of each payout will be
ordinary income and subject to tax, and a portion of each payout will be
considered a return of part of your investment and will not be taxed. All
amounts you receive after your investment in the contract is fully recovered
will be subject to tax.
Tax law requires that all nonqualified deferred annuity contracts issued by the
same company (and possibly its affiliates) to the same owner during a calendar
year be taxed as a single, unified contract when you take distributions from any
one of those contracts.
Qualified annuities: Your contract may be used to fund a tax-deferred retirement
plan that is already tax-deferred under the Code. The contract will not provide
any necessary or additional tax-deferral if it is used to fund a retirement plan
that is tax-deferred. Special rules apply to these retirement plans. Your rights
to benefits may be subject to the terms and conditions of these retirement plans
regardless of the terms of the contract.
Adverse tax consequences may result if you do not ensure that contributions,
distributions and other transactions under the contract comply with the law.
Qualified annuities have minimum distribution rules that govern the timing and
amount of distributions during your life (except for Roth IRAs) and after your
death. You should refer to your retirement plan or adoption agreement, or
consult a tax advisor for more information about these distribution rules.
Annuity payouts under qualified annuities (except Roth IRAs): Under a qualified
annuity, the entire payout generally is includable as ordinary income and is
subject to tax except to the extent that contributions were made with after-tax
dollars. If you or your employer invested in your contract with deductible or
pre-tax dollars as part of a tax-deferred retirement plan, such amounts are not
considered to be part of your investment in the contract and will be taxed when
paid to you.
Withdrawals: If you withdraw part or all of your contract before your annuity
payouts begin, your withdrawal payment will be taxed to the extent that the
value of your contract immediately before the withdrawal exceeds your
investment. You also may have to pay a 10% IRS penalty for withdrawals you make
before reaching age 59 1/2 unless certain exceptions apply. For qualified
annuities, other penalties may apply if you make withdrawals from your contract
before your plan specifies that you can receive payouts.
<PAGE>
Death benefits to beneficiaries: The death benefit under a contract (except a
Roth IRA) is not tax exempt. Any amount your beneficiary receives that
represents previously deferred earnings within the contract is taxable as
ordinary income to the beneficiary in the years he or she receives the payments.
The death benefit under a Roth IRA generally is not taxable as ordinary income
to the beneficiary if certain distribution requirements are met.
Annuities owned by corporations, partnerships or trusts: For nonqualified
annuities any annual increase in the value of annuities held by such entities
generally will be treated as ordinary income received during that year. This
provision is effective for purchase payments made after Feb. 28, 1986. However,
if the trust was set up for the benefit of a natural person only, the income
will remain tax deferred.
Penalties: If you receive amounts from your contract before reaching age 59 1/2,
you may have to pay a 10% IRS penalty on the amount includable in your ordinary
income. However, this penalty will not apply to any amount received by you or
your beneficiary:
o because of your death;
o because you become disabled (as defined in the Code);
o if the distribution is part of a series of substantially equal periodic
payments, made at least annually, over your life or life expectancy (or
joint lives or life expectancies of you and your beneficiary); or
o if it is allocable to an investment before Aug. 14, 1982 (except for
qualified annuities).
For a qualified annuity, other penalties or exceptions may apply if you make
withdrawals from your contract before your plan specifies that payouts can be
made.
Withholding, generally: If you receive all or part of the contract value, we may
deduct withholding against the taxable income portion of the payment. Any
withholding represents a prepayment of your tax due for the year. You take
credit for these amounts on your annual tax return.
If the payment is part of an annuity payout plan, we generally compute the
amount of withholding using payroll tables. You may provide us with a statement
of how many exemptions to use in calculating the withholding. As long as you've
provided us with a valid Social Security Number or Taxpayer Identification
Number, you can elect not to have any withholding occur.
If the distribution is any other type of payment (such as a partial or full
withdrawal) we compute withholding using 10% of the taxable portion. Similar to
above, as long as you have provided us with a valid Social Security Number or
Taxpayer Identification Number, you can elect not to have this withholding
occur.
Some states also may impose withholding requirements similar to the federal
withholding described above. If this should be the case, we may deduct state
withholding from any payment from which we deduct federal withholding. The
withholding requirements may differ if we are making payment to a non-U.S.
citizen or if we deliver the payment outside the United States.
Withholding from TSAs: If you receive directly all or part of the contract value
from your TSA, mandatory 20% Federal income tax withholding (and possibly state
income tax withholding) generally will be imposed at the time we make the
payout. This mandatory withholding is in place of the elective withholding
discussed above. This mandatory withholding will not be imposed if:
o instead of receiving the distribution check, you elect to have the
distribution rolled over directly to an IRA or another eligible plan;
o the payout is one in a series of substantially equal periodic payouts, made
at least annually, over your life or the life expectancy (or the joint
lives or life expectancies of you and your designated beneficiary) or over
a specified period of ten years or more; or
o the payout is a minimum distribution required under the Code.
<PAGE>
Payments we make to a surviving spouse instead of being directly rolled over to
an IRA also may be subject to a mandatory 20% income tax withholding.
State withholding also may be imposed on taxable distributions.
Transfer of ownership of a nonqualified annuity: If you transfer a nonqualified
annuity without receiving adequate consideration, the transfer is a gift and
also may be a withdrawal for federal income tax purposes. If the gift is a
currently taxable event for income tax purposes, the original owner will be
taxed on the amount of deferred earnings at the time of the transfer and also
may be subject to the 10% IRS penalty discussed earlier. In this case, the new
owner's investment in the contract will be the value of the contract at the time
of the transfer.
Collateral assignment of a nonqualified annuity: If you collaterally assign or
pledge your contract, earnings on purchase payments you made after Aug. 13, 1982
will be taxed to you like a withdrawal.
Important: Our discussion of federal tax laws is based upon our understanding of
current interpretations of these laws. Federal tax laws or current
interpretations of them may change. For this reason and because tax consequences
are complex and highly individual and cannot always be anticipated, you should
consult a tax advisor if you have any questions about taxation of your contract.
Tax qualification: We intend that the contract qualify as an annuity for federal
income tax purposes. To that end, the provisions of the contract are to be
interpreted to ensure or maintain such tax qualification, in spite of any other
provisions of the contract. We reserve the right to amend the contract to
reflect any clarifications that may be needed or are appropriate to maintain
such qualification or to conform the contract to any applicable changes in the
tax qualification requirements. We will send you a copy of any amendments.
Voting Rights
As a contract owner with investments in the subaccounts, you may vote on
important fund policies until annuity payouts begin. Once they begin, the person
receiving them has voting rights. We will vote fund shares according to the
instructions of the person with voting rights.
Before annuity payouts begin, the number of votes you have is determined by
applying your percentage interest in each subaccount to the total number of
votes allowed to the subaccount.
After annuity payouts begin, the number of votes you have is equal to:
o the reserve held in each subaccount for your contract; o divided by the net
asset value of one share of the applicable fund.
As we make annuity payouts, the reserve for the contract decreases; therefore,
the number of votes also will decrease.
We calculate votes separately for each subaccount. We will send notice of
shareholders' meetings, proxy materials and a statement of the number of votes
to which the voter is entitled. We will vote shares for which we have not
received instructions in the same proportion as the votes for which we received
instructions. We also will vote the shares for which we have voting rights in
the same proportion as the votes for which we received instructions.
<PAGE>
Substitution of Investments
We may substitute the funds in which the subaccounts invest if:
o laws or regulations change;
o the existing funds become unavailable; or
o in our judgment, the funds no longer are suitable for the
subaccounts.
If any of these situations occur, and if we believe it is in the best interest
of persons having voting rights under the contract, we have the right to
substitute the funds currently listed in this prospectus for other funds.
We may also:
o add new subaccounts;
o combine any two or more subaccounts;
o make additional subaccounts investing in additional funds; o
transfer assets to and from the subaccounts or the variable
account; and o eliminate or close any subaccounts.
In the event of substitution or any of these changes, we may amend the contract
and take whatever action is necessary and appropriate without your consent or
approval. However, we will not make any substitution or change without the
necessary approval of the SEC and state insurance departments. We will notify
you of any substitution or change.
About the Service Providers
Principal underwriter
American Express Financial Advisors Inc. (AEFA) serves as the principal
underwriter for the contract. Its offices are located at 200 AXP Financial
Center, Minneapolis, MN 55474. AEFA is a wholly-owned subsidiary of American
Express Financial Corporation (AEFC) which is a wholly-owned subsidiary of
American Express Company.
The contracts will be distributed by broker-dealers which have entered into
distribution agreements with AEFA and American Enterprise Life.
We will pay commissions for sales of the contracts of up to 7% of purchase
payments to insurance agencies or broker-dealers that are also insurance
agencies. Sometimes we pay the commissions as a combination of a certain amount
of the commission at the time of sale and a trail commission (which, when
totaled, could exceed 7% of purchase payments). In addition, we may pay certain
sellers additional compensation for selling and distribution activities under
certain circumstances. From time to time, we will pay or permit other
promotional incentives, in cash or credit or other compensation.
Issuer
American Enterprise Life issues the annuities. American Enterprise Life is a
wholly-owned subsidiary of IDS Life, which is a wholly-owned subsidiary of AEFC.
AEFC is a wholly-owned subsidiary of American Express Company. American Express
Company is a financial services company principally engaged through subsidiaries
(in addition to AEFC) in travel related services, investment services and
international banking services.
American Enterprise Life is a stock life insurance company organized in 1981
under the laws of the state of Indiana. Our administrative offices are located
at 80 South Eighth Street, Minneapolis, MN 55402. Its statutory address is 100
Capitol Center South, 201 North Illinois Street, Indianapolis, IN 46204.
American Enterprise Life conducts a conventional life insurance business.
<PAGE>
Legal proceedings
A number of lawsuits have been filed against life and health insurers in
jurisdictions in which American Enterprise Life and its affiliates do business
involving insurers' sales practices, alleged agent misconduct, failure to
properly supervise agents and other matters. IDS Life is a defendant in three
class action lawsuits of this nature. American Enterprise Life is a named
defendant in one of these suits, Richard W. and Elizabeth J. Thoresen vs.
American Express Financial Corporation, American Centurion Life Assurance
Company, American Enterprise Life Insurance Company, American Partners Life
Insurance Company, IDS Life Insurance Company and IDS Life Insurance Company of
New York which was commenced in Minnesota State Court in October 1998. The
action was brought by individuals who purchased an annuity in a qualified plan.
The plaintiffs allege that the sale of annuities in tax-deferred contributory
retirement investment plans (e.g., IRAs) is never appropriate. The plaintiffs
purport to represent a class consisting of all persons who made similar
purchases. The plaintiffs seek damages in an unspecified amount.
American Enterprise Life is included as a party to preliminary settlement of all
three class action lawsuits. We believe this approach will put these cases
behind us and provide a fair outcome for our clients. Our decision to settle
does not include any admission of wrongdoing. We do not anticipate that this
proposed settlement, or any other lawsuits in which American Enterprise Life is
a defendant, will have a material adverse effect on our financial condition.
Additional Information About American Enterprise Life
Selected financial data
The following selected financial data for American Enterprise Life should be
read in conjunction with the financial statements and notes.
<TABLE>
<CAPTION>
Years ended Dec. 31, (thousands)
<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995
Net investment income $ ______ $ 340,219 $ 332,268 $ 271,719 $ 223,706
Net loss on investments (____) (4,788) (509) (5,258) (1,154)
Other ________ 6,329 5,753 4,214
--------- -------------- -------------- --------------
7,662
Total revenues $_______ $ 343,093 $ 338,088 $ 272,214 $ 226,766
======== =========== =========== =========== ===========
Income before income taxes $_______ $ 36,421 $ 44,958 $ 35,735 $ 33,440
======== ============ ============ ============ ============
Net income $_______ $ 22,026 $ 28,313 $ 22,823 $ 21,748
======== ============ ============ ============ ============
Total assets $_______ $4,885,621 $4,973,413 $4,425,837 $3,570,960
======== ========== ========== ========== ==========
</TABLE>
[To be updated upon amendment]
Management's discussion and analysis of financial condition and results of
operations
1999 Compared to 1998:
[To be updated upon amendment]
1998 Compared to 1997:
[To be updated upon amendment]
<PAGE>
Risk Management
[To be updated upon amendment]
Liquidity and Capital Resources
[To be updated upon amendment]
Year 2000 Issue
The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of American Enterprise Life
and the variable account. All of the major systems used by American Enterprise
Life and the variable account are maintained by AEFC and are utilized by
multiple subsidiaries and affiliates of AEFC. American Enterprise Life's and the
variable account's businesses are heavily dependent upon AEFC's computer systems
and have significant interaction with systems of third parties.
A comprehensive review of AEFC's computer systems and business processes,
including those specific to American Enterprise Life and the variable account,
was conducted to identify the major systems that could be affected by the Year
2000 issue. Steps were taken to resolve potential problems including
modification to existing software and the purchase of new software. As of Dec.
31, 1999, AEFC had completed its program of corrective measures on its internal
systems and applications, including Year 2000 compliance testing. As of Dec. 31,
1999, AEFC had also completed an evaluation of the Year 2000 readiness of other
third parties whose system failures could have an impact on American Enterprise
Life's and the variable account's operations.
AEFC's Year 2000 project also included establishing Year 2000 contingency plans
for all key business units. Business continuation plans, which address business
continuation in the event of a system disruption, are in place for all key
business units. At Dec. 31, 1999, these plans had been amended to include
specific Year 2000 considerations.
In assessing its Year 2000 initiatives and the results of actual production
since Jan. 1, 2000, management believes no material adverse consequences were
experienced, and there was no material effect on American Enterprise Life's and
the variable account's business, results of operations, or financial condition
as a result of the Year 2000 issue.
Reserves
In accordance with the insurance laws and regulations under which we operate, we
are obligated to carry on our books, as liabilities, actuarially determined
reserves to meet our obligations on our outstanding annuity contracts. We base
our reserves for deferred annuity contracts on accumulation value and for fixed
annuity contracts in a benefit status on established industry mortality tables.
These reserves are computed amounts that will be sufficient to meet our policy
obligations at their maturities.
Investments
Of our total investments of [_____] at Dec. 31, [___], [__]% was invested in
mortgage-backed securities, [__]% in corporate and other bonds, [__]% in primary
mortgage loans on real estate and the remaining [__]% in other investments.
[To be updated upon amendment]
Competition
We are engaged in a business that is highly competitive due to the large number
of stock and mutual life insurance companies and other entities marketing
insurance products. There are over [____] stock, mutual and other types of
insurers in the life insurance business. Best's Insurance Reports, Life-Health
edition 1998, assigned us one of its highest classifications, A+ (Superior).
<PAGE>
[To be updated upon amendment]
Employees
As of Dec. 31, 1999, we had no employees.
Properties
We occupy office space in Minneapolis, MN, which is rented by AEFC. We reimburse
AEFC for rent based on direct and indirect allocation methods. Facilities
occupied by us are believed to be adequate for the purposes for which they are
used and well maintained.
State Regulation
American Enterprise Life is subject to the laws of the State of Indiana
governing insurance companies and to the regulations of the Indiana Department
of Insurance. An annual statement in the prescribed form is filed with the
Indiana Department of Insurance each year covering our operation for the
preceding year and its financial condition at the end of such year. Regulation
by the Indiana Department of Insurance includes periodic examination to
determine American Enterprise's contract liabilities and reserves so that the
Indiana Department of Insurance may certify that these items are correct. The
Company's books and accounts are subject to review by the Indiana Department of
Insurance at all times. Such regulation does not, however, involve any
supervision of the account's management or the company's investment practices or
policies. In addition, American Enterprise Life is subject to regulation under
the insurance laws of other jurisdictions in which it operates. A full
examination of American Enterprise Life's operations is conducted periodically
by the National Association of Insurance Commissioners.
Under insurance guaranty fund laws, in most states, insurers doing business
therein can be assessed up to prescribed limits for policyholder losses incurred
by insolvent companies. Most of these laws do provide however, that an
assessment may be excused or deferred if it would threaten an insurer's own
financial strength.
Directors and Executive Officers*
The directors and principal executive officers of American Enterprise Life and
the principal occupation of each during the last five years is as follows:
Directors
James E. Choat
Born in 1947
Director, president and chief executive officer since 1996; Senior vice
president - Institutional Products Group, AEFA, 1994 to 1997.
Richard W. Kling
Born 1940
Director and chairman of the board since March 1989.
Paul S. Mannweiler**
Born in 1949
Director since 1986; Partner at Locke Reynolds Boyd & Weisell since 1980.
Paula R. Meyer
Born in 1954
Director and executive vice president, assured assets since 1998; vice
president, AEFC since 1998; Piper Capital Management (PCM) President from Oct.
1997 to May 1998; PCM Director of Marketing from June 1995 to Oct. 1997; PCM
Director of Retail Marketing from Dec. 1993 to June 1995.
<PAGE>
William A. Stoltzmann
Born in 1948
Director since Sept. 1989; vice president, general counsel and secretary since
1985.
Officers other than directors
Jeffrey S. Horton
Born 1961
Vice president and treasurer since Dec. 1997; vice president and corporate
treasurer, AEFC, since Dec. 1997; controller, American Express Technologies -
Financial Services, AEFC, from July 1997 to Dec. 1997; controller, Risk
Management Products, AEFC, from May 1994 to July 1997; director of finance and
analysis, Corporate Treasury, AEFC, from June 1990 to May 1994.
Philip C. Wentzel
Born in 1961
Vice president and controller since 1998; vice president - Finance, Risk
Management Products, AEFC since 1997; and director of financial reporting and
analysis from 1992 to 1997.
*The address for all of the directors and principal officers is: 200 AXP
Financial Center, Minneapolis, MN 55474 except for Mr. Mannweiler who is an
independent director.
**Mr. Mannweiler's address is: 201 No. Illinois Street, Indianapolis, IN 46204
Executive compensation
Our executive officers also may serve one or more affiliated companies. The
following table reflects cash compensation paid to the five most highly
compensated executive officers as a group for services rendered in the most
recent year to us and our affiliates. The table also shows the total cash
compensation paid to all our executive officers, as a group, who were executive
officers at any time during the most recent year.
Name of individual or
Number in group Position held Cash compensation
Five most highly compensated executive [________] officers as a group:
[To be updated by life external reports]
All executive officers as a group (___) [________]
[To be updated upon amendment]
Security ownership of management
Our directors and officers do not beneficially own any outstanding shares of
stock of the company. All of our outstanding shares of stock are beneficially
owned by IDS Life. The percentage of shares of IDS Life owned by any director,
and by all our directors and officers as a group, does not exceed 1% of the
class outstanding.
<PAGE>
Experts
Ernst & Young LLP, independent auditors, have audited the financial statements
of American Enterprise Life Insurance Company at Dec. 31, 1999 and 1998, and for
each of the three years in the period ended Dec. 31, 1999, as set forth in their
report. We've included our financial statements in the prospectus and elsewhere
in the registration statement in reliance on Ernst & Young LLP's report, given
on their authority as experts in accounting and auditing.
[AMERICAN ENTERPRISE LIFE FINANCIAL INFORMATION TO BE INSERTED UPON AMENDMENT]
<PAGE>
Table of Contents of the Statement of Additional Information
Performance Information.......................................
Calculating Annuity Payouts...................................
Rating Agencies...............................................
Principal Underwriter.........................................
Independent Auditors..........................................
Financial Statements..........................................
<PAGE>
Please check the appropriate box to receive a copy of the Statement of
Additional Information for:
[ ] American Express Signature Variable AnnuitySM
[ ] American Express Variable Portfolio Funds
[ ] AIM Variable Insurance Funds, Inc.
[ ] Alliance Variable Products Series Fund
[ ] Baron Capital Funds
[ ] Fidelity Variable Insurance Products Funds - Service Class
[ ] Franklin Templeton Variable Insurance Products Trust
[ ] Goldman Sachs Variable Insurance Trust (VIT)
[ ] Janus Aspen Series: Service Shares
[ ] J. P. Morgan Series Trust II
[ ] Lazard Retirement Series, Inc.
[ ] MFS(R)Variable Insurance Trust SM
[ ] Putnam Variable Trust
[ ] Royce Capital Fund
[ ] Third Avenue Variable Series Trust
[ ] Wanger Advisors Trust
[ ] Warburg Pincus Trust
Mail your request to:
American Enterprise Life Insurance Company
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-0534
We will mail your request to:
Your name______________________________________________________________________
Address_________________________________________________________________________
City___________________________________________ State_______________ Zip________
<PAGE>
American Express Signature Variable Annuity
American Enterprise Variable Annuity Account
STATEMENT OF ADDITIONAL INFORMATION
for
AMERICAN EXPRESS SIGNATURE VARIABLE ANNUITYSM
AMERICAN ENTERPRISE VARIABLE ANNUITY ACCOUNT
May 1, 2000
American Enterprise Variable Annuity Account is a separate account established
and maintained by American Enterprise Life Insurance Company (American
Enterprise Life).
This Statement of Additional Information (SAI) is not a prospectus. It should be
read together with the prospectus dated the same date as this SAI which you can
obtain from your sales representative or by writing or calling us at the address
or telephone number below. The prospectus is incorporated into this SAI by
reference.
American Enterprise Life Insurance Company
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-0534
800-333-3437
<PAGE>
TABLE OF CONTENTS
Performance Information.........................................................
Calculating Annuity Payouts.....................................................
Rating Agencies.................................................................
Principal Underwriter...........................................................
Independent Auditors............................................................
Financial Statements............................................................
<PAGE>
PERFORMANCE INFORMATION
The subaccounts may quote various performance figures to illustrate past
performance. We base total return and current yield quotations (if applicable)
on standardized methods of computing performance as required by the Securities
and Exchange Commission (SEC). An explanation of the methods used to compute
performance follows below.
Average Annual Total Return
We will express quotations of average annual total return for the subaccounts in
terms of the average annual compounded rate of return of a hypothetical
investment in the contract over a period of one, five and ten years (or, if
less, up to the life of the subaccounts), calculated according to the following
formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
EVR = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the period, at the
end of the period (or fractional portion thereof)
We calculated the following performance figures on the basis of historical
performance of each fund. We show actual performance from the date the
subaccounts began investing in the funds. For some subaccounts, we do not
provide any performance information because they are new and have not had any
activity to date. We also show performance from the commencement date of the
funds as if the contract existed at that time, which it did not. Past
performance does not guarantee future results.
<PAGE>
Average Annual Total Return For Annuities Without Withdrawal For Periods Ending
Dec. 31. 1999
<TABLE>
<CAPTION>
Performance Since
Commencement of the Performance Since
Subaccount** Commencement of the Fund**
<S> <C> <C> <C> <C> <C> <C> <C>
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
- - - ---------- ------------- ------ ------------ ------ ------- -------- ------------
AXPSM VARIABLE PORTFOLIO
Blue Chip Advantage Fund (_/_;_/_)* --% --% --% --% --% --%
ESI Bond Fund (2/95;10/81) -- -- -- -- -- --
ECR Capital Resource Fund (2/95;10/81) -- -- -- -- -- --
EMS Cash Management Fund (2/95;10/81) -- -- -- -- -- --
Diversified Equity Income Fund (_/_;_/_) -- -- -- -- -- --
EIA Extra Income Fund (7/99;5/96) -- -- -- -- -- --
Federal Income Fund (_/_;_/_) -- -- -- -- -- --
Growth Fund (_/_;_/_) -- -- -- -- -- --
EMG Managed Fund (2/95;4/86) -- -- -- -- -- --
EGD New Dimensions Fund (10/97, 5/96) -- -- -- -- -- --
Small Cap Advantage Fund (_/_;_/_) -- -- -- -- -- --
AIM V.I.
ECA Capital Appreciation Fund (7/99;5/93) -- -- -- -- -- --
ECD Capital Development Fund (8/99;5/98) -- -- -- -- -- --
EVA Value Fund (10/97;5/93) -- -- -- -- -- --
ALLIANCE VP
EPP Premier Growth Portfolio (Class B) -- -- -- -- -- --
(8/99;6/99)
ETC Technology Portfolio (Class B) (8/99,6/99) -- -- -- -- -- --
EHG U.S. Government/High Grade Securities -- -- -- -- -- --
Portfolio (Class B) (8/99;6/99)
BARON
EAS Capital Asset Fund (8/99;10/98) -- -- -- -- -- --
FIDELITY VIP
EFG III Growth & Income Portfolio (Service Class) -- -- -- -- -- --
(8/99;12/96)
EFM III Mid Cap Portfolio (Service Class) -- -- -- -- -- --
(7/99;12/98)
EFO Overseas Portfolio (Service Class) -- -- -- -- -- --
(7/99;12/87)
FRANKLIN TEMPLETON VIP TRUST
ERE Franklin Real Estate Securities Fund - -- -- -- -- -- --
Class 2 (8/99;1/99)
WMU Mutual Shares Securities Fund - Class 2 -- -- -- -- -- --
(8/99;1/99)
EIS Templeton International Smaller Companies -- -- -- -- -- --
Fund - Class 2 (8/99;1/99)
GOLDMAN SACHS VARIABLE INSURANCE TRUST (VIT)
JCG Capital Growth Fund (5/99;4/98) -- -- -- -- -- --
JUS COREsm U.S. Equity Fund (5/99;2/98) -- -- -- -- -- --
JGL Global Income Fund (5/99;1/98) -- -- -- -- -- --
JIF International Equity Fund (5/99;1/98) -- -- -- -- -- --
Internet Tollkeeper Fund (_/_;_/_)+ -- -- -- -- -- --
Janus Aspen Series
Aggressive Growth Portfolio: Service -- -- -- -- -- --
Shares (_/_;_/_)/
Growth Portfolio: Service Shares (_/_;_/_) -- -- -- -- -- --
International Growth Portfolio (_/_;_/_) -- -- -- -- -- --
</TABLE>
*(Commencement date of the subaccount; Commencement date of the fund)
**Current applicable charges deducted from fund performance include a $30
annual contract administrative charge, a 1.25% mortality and expense risk
fee, a 0.15% variable account administrative charge and applicable
withdrawal charge. Premium taxes are not reflected in these total
returns.
+Fund had not commenced operations as of Dec. 31, 1999.
[To be updated upon amendment.]
<PAGE>
Average Annual Total Return For Annuities Without Withdrawal For Periods Ending
Dec. 31. 1999 (continued)
<TABLE>
<CAPTION>
Performance Since
Commencement of the Performance Since
Subaccount** Commencement of the Fund**
<S> <C> <C> <C> <C> <C> <C> <C>
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
- - - ---------- ------------- ------ ------------ ------ ------- -------- ------------
J.P. MORGAN SERIES TRUST II
EDE U.S. Disciplined Equity Portfolio --% --% --% --% --% --%
(8/99;12/94)*
LAZARD RETIREMENT SERIES INC.
ERQ Equity Portfolio (8/99;3/98) -- -- -- -- -- --
ERI International Equity Portfolio (8/99;9/98) -- -- -- -- -- --
MFS (R) VARIABLE INSURANCE TRUSTSM (VIT)
END New Discovery Series (7/99;5/98) -- -- -- -- -- --
ERS Research Series (7/99;7/95) -- -- -- -- -- --
RUT Utilities Series (7/99;1/95) -- -- -- -- -- --
PUTNAM VARIABLE TRUST
EPG Putnam VT Growth and Income Fund - Class -- -- -- -- -- --
IB*** (10/98;2/88)
EPL Putnam VT International Growth Fund - -- -- -- -- -- --
Class IB*** (8/99;1/97)
EPN Putnam VT International New Opportunities -- -- -- -- -- --
Fund - Class IB*** (8/99;1/97)
ROYCE
EMC Micro-Cap Portfolio (8/99;12/96) -- -- -- -- -- --
EPR Premier Portfolio (8/99;12/96) -- -- -- -- -- --
THIRD AVENUE
Value Portfolio (_/_;_/_) -- -- -- -- -- --
WANGER
EIC International Small Cap (8/99;5/95) -- -- -- -- -- --
EUC U.S. Small Cap (8/99;5/95) -- -- -- -- -- --
WARBURG PINCUS TRUST
EEG Emerging Growth Portfolio (8/99;7/99) -- -- -- -- -- --
</TABLE>
*(Commencement date of the subaccount; Commencement date of the fund)
**Current applicable charges deducted from fund performance include a $30
annual contract administrative charge, a 1.25% mortality and expense
risk fee, a 0.15% variable account administrative charge and applicable
withdrawal charge. Premium taxes are not reflected in these total
returns.
***Performance information for Class IB shares are based on Class IA shares
adjusted to reflect payments made under the Class IB distribution Plan.
[To be updated upon amendment.]
<PAGE>
Average Annual Total Return For Annuities With Withdrawal For Periods Ending
Dec. 31. 1999
<TABLE>
<CAPTION>
Performance Since
Commencement of the Performance Since
Subaccount** Commencement of the Fund**
<S> <C> <C> <C> <C> <C> <C> <C>
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
- - - ---------- ------------- ------ ------------ ------ ------- -------- ------------
AXPSM VARIABLE PORTFOLIO
Blue Chip Advantage Fund (_/_;_/_)* --% --% --% --% --% --%
ESI Bond Fund (2/95;10/81) -- -- -- -- -- --
ECR Capital Resource Fund (2/95;10/81) -- -- -- -- -- --
EMS Cash Management Fund (2/95;10/81) -- -- -- -- -- --
Diversified Equity Income Fund (_/_;_/_) -- -- -- -- -- --
EIA Extra Income Fund (7/99;5/96) -- -- -- -- -- --
Federal Income Fund (_/_;_/_) -- -- -- -- -- --
Growth Fund (_/_;_/_) -- -- -- -- -- --
EMG Managed Fund (2/95;4/86) -- -- -- -- -- --
EGD New Dimensions Fund (10/97, 5/96) -- -- -- -- -- --
Small Cap Advantage Fund (_/_;_/_) -- -- -- -- -- --
AIM V.I.
ECA Capital Appreciation Fund (7/99;5/93) -- -- -- -- -- --
ECD Capital Development Fund (8/99;5/98) -- -- -- -- -- --
EVA Value Fund (10/97;5/93) -- -- -- -- -- --
ALLIANCE VP
EPP Premier Growth Portfolio (Class B) -- -- -- -- -- --
(8/99;6/99)
ETC Technology Portfolio (Class B) (8/99,6/99) -- -- -- -- -- --
EHG U.S. Government/High Grade Securities -- -- -- -- -- --
Portfolio (Class B) (8/99;6/99)
BARON
EAS Capital Asset Fund (8/99;10/98) -- -- -- -- -- --
FIDELITY VIP
EFG III Growth & Income Portfolio (Service Class) -- -- -- -- -- --
(8/99;12/96)
EFM III Mid Cap Portfolio (Service Class) -- -- -- -- -- --
(7/99;12/98)
EFO Overseas Portfolio (Service Class) -- -- -- -- -- --
(7/99;12/87)
FRANKLIN TEMPLETON VIP TRUST
ERE Franklin Real Estate Securities Fund - -- -- -- -- -- --
Class 2 (8/99;1/99)
WMU Mutual Shares Securities Fund - Class 2 -- -- -- -- -- --
(8/99;1/99)
EIS Templeton International Smaller Companies -- -- -- -- -- --
Fund - Class 2 (8/99;1/99)
GOLDMAN SACHS VARIABLE INSURANCE TRUST (VIT)
JCG Capital Growth Fund (5/99;4/98) -- -- -- -- -- --
JUS COREsm U.S. Equity Fund (5/99;2/98) -- -- -- -- -- --
JGL Global Income Fund (5/99;1/98) -- -- -- -- -- --
JIF International Equity Fund (5/99;1/98) -- -- -- -- -- --
Internet Tollkeeper Fund (_/_;_/_)+ -- -- -- -- -- --
Janus Aspen Series
Aggressive Growth Portfolio: Service -- -- -- -- -- --
Shares (_/_;_/_)/
Growth Portfolio: Service Shares (_/_;_/_) -- -- -- -- -- --
International Growth Portfolio (_/_;_/_) -- -- -- -- -- --
</TABLE>
*(Commencement date of the subaccount; Commencement date of the fund)
**Current applicable charges deducted from fund performance include a $30
annual contract administrative charge, a 1.25% mortality and expense risk
fee, a 0.15% variable account administrative charge and applicable
withdrawal charge. Premium taxes are not reflected in these total
returns.
+Fund had not commenced operations as of Dec. 31, 1999.
[To be updated upon amendment.].
<PAGE>
Average Annual Total Return For Annuities With Withdrawal For Periods Ending
Dec. 31. 1999 (continued)
<TABLE>
<CAPTION>
Performance Since
Commencement of the Performance Since
Subaccount** Commencement of the Fund**
<S> <C> <C> <C> <C> <C> <C> <C>
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
- - - ---------- ------------- ------ ------------ ------ ------- -------- ------------
J.P. MORGAN SERIES TRUST II
EDE U.S. Disciplined Equity Portfolio --% --% --% --% --% --%
(8/99;12/94)*
LAZARD RETIREMENT SERIES INC.
ERQ Equity Portfolio (8/99;3/98) -- -- -- -- -- --
ERI International Equity Portfolio (8/99;9/98) -- -- -- -- -- --
MFS (R) VARIABLE INSURANCE TRUSTSM (VIT)
END New Discovery Series (7/99;5/98) -- -- -- -- -- --
ERS Research Series (7/99;7/95) -- -- -- -- -- --
RUT Utilities Series (7/99;1/95) -- -- -- -- -- --
PUTNAM VARIABLE TRUST
EPG Putnam VT Growth and Income Fund - Class -- -- -- -- -- --
IB*** (10/98;2/88)
EPL Putnam VT International Growth Fund - -- -- -- -- -- --
Class IB*** (8/99;1/97)
EPN Putnam VT International New Opportunities -- -- -- -- -- --
Fund - Class IB*** (8/99;1/97)
ROYCE
EMC Micro-Cap Portfolio (8/99;12/96) -- -- -- -- -- --
EPR Premier Portfolio (8/99;12/96) -- -- -- -- -- --
THIRD AVENUE
Value Portfolio (_/_;_/_) -- -- -- -- -- --
WANGER
EIC International Small Cap (8/99;5/95) -- -- -- -- -- --
EUC U.S. Small Cap (8/99;5/95) -- -- -- -- -- --
WARBURG PINCUS TRUST
EEG Emerging Growth Portfolio (8/99;7/99) -- -- -- -- -- --
</TABLE>
*(Commencement date of the subaccount; Commencement date of the fund)
**Current applicable charges deducted from fund performance include a $30
annual contract administrative charge, a 1.25% mortality and expense
risk fee, a 0.15% variable account administrative charge and applicable
withdrawal charge. Premium taxes are not reflected in these total
returns.
***Performance information for Class IB shares are based on Class IA shares
adjusted to reflect payments made under the Class IB distribution Plan.
[To be updated upon amendment.]
<PAGE>
Average Annual Total Return For Annuities Without Withdrawal and Selection of
the Guaranteed Minumum Income Benefit Rider (6% Accumulation Benefit Base) For
Periods Ending Dec. 31. 1999
<TABLE>
<CAPTION>
Performance Since
Commencement of the Performance Since
Subaccount** Commencement of the Fund**
<S> <C> <C> <C> <C> <C> <C> <C>
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
- - - ---------- ------------- ------ ------------ ------ ------- -------- ------------
AXPSM VARIABLE PORTFOLIO
Blue Chip Advantage Fund (_/_;_/_)* --% --% --% --% --% --%
Bond Fund (2/95;10/81) -- -- -- -- -- --
Capital Resource Fund (2/95;10/81) -- -- -- -- -- --
Cash Management Fund (2/95;10/81) -- -- -- -- -- --
Diversified Equity Income Fund (_/_;_/_) -- -- -- -- -- --
Extra Income Fund (7/99;5/96) -- -- -- -- -- --
Federal Income Fund (_/_;_/_) -- -- -- -- -- --
Growth Fund (_/_;_/_) -- -- -- -- -- --
Managed Fund (2/95;4/86) -- -- -- -- -- --
New Dimensions Fund (10/97, 5/96) -- -- -- -- -- --
Small Cap Advantage Fund (_/_;_/_) -- -- -- -- -- --
AIM V.I.
Capital Appreciation Fund (7/99;5/93) -- -- -- -- -- --
Capital Development Fund (8/99;5/98) -- -- -- -- -- --
Value Fund (10/97;5/93) -- -- -- -- -- --
ALLIANCE VP
Premier Growth Portfolio (Class B) -- -- -- -- -- --
(8/99;6/99)
Technology Portfolio (Class B) (8/99,6/99) -- -- -- -- -- --
U.S. Government/High Grade Securities -- -- -- -- -- --
Portfolio (Class B) (8/99;6/99)
BARON
Capital Asset Fund (8/99;10/98) -- -- -- -- -- --
FIDELITY VIP
III Growth & Income Portfolio (Service Class) -- -- -- -- -- --
(8/99;12/96)
III Mid Cap Portfolio (Service Class) -- -- -- -- -- --
(7/99;12/98)
Overseas Portfolio (Service Class) -- -- -- -- -- --
(7/99;12/87)
FRANKLIN TEMPLETON VIP TRUST
Franklin Real Estate Securities Fund - -- -- -- -- -- --
Class 2 (8/99;1/99)
Mutual Shares Securities Fund - Class 2 -- -- -- -- -- --
(8/99;1/99)
Templeton International Smaller Companies -- -- -- -- -- --
Fund - Class 2 (8/99;1/99)
GOLDMAN SACHS VARIABLE INSURANCE TRUST (VIT)
Capital Growth Fund (5/99;4/98) -- -- -- -- -- --
COREsm U.S. Equity Fund (5/99;2/98) -- -- -- -- -- --
Global Income Fund (5/99;1/98) -- -- -- -- -- --
International Equity Fund (5/99;1/98) -- -- -- -- -- --
Internet Tollkeeper Fund (_/_;_/_)+ -- -- -- -- -- --
Janus Aspen Series
Aggressive Growth Portfolio: Service -- -- -- -- -- --
Shares (_/_;_/_)/
Growth Portfolio: Service Shares (_/_;_/_) -- -- -- -- -- --
International Growth Portfolio (_/_;_/_) -- -- -- -- -- --
</TABLE>
* (Commencement date of the subaccount; Commencement date of the fund)
** Current applicable charges deducted from fund performance include a $30
annual contract administrative charge, a 1.25% mortality and expense risk
fee, 0.15% variable account administrative charge and a 0.35% Guaranteed
Minimum Income Benefit Rider (6% Accumulation Benefit Base) fee.
Premium taxes are not reflected in these total returns.
+ Fund had not commenced operations as of Dec. 31, 1999.
[To be updated upon amendment.].
<PAGE>
Average Annual Total Return for Annuities Without Withdrawal and Selection of
the Guaranteed Minumum Income Benefit Rider (6% Accumulation Benefit Base) For
Periods Ending Dec. 31. 1999
<TABLE>
<CAPTION>
Performance Since
Commencement of the Performance Since
Subaccount** Commencement of the Fund**
<S> <C> <C> <C> <C> <C> <C> <C>
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
- - - ---------- ------------- ------ ------------ ------ ------- -------- ------------
J.P. MORGAN SERIES TRUST II
U.S. Disciplined Equity Portfolio --% --% --% --% --% --%
(8/99;12/94)*
LAZARD RETIREMENT SERIES INC.
Equity Portfolio (8/99;3/98) -- -- -- -- -- --
International Equity Portfolio (8/99;9/98) -- -- -- -- -- --
MFS (R) VARIABLE INSURANCE TRUSTSM (VIT)
New Discovery Series (7/99;5/98) -- -- -- -- -- --
Research Series (7/99;7/95) -- -- -- -- -- --
Utilities Series (7/99;1/95) -- -- -- -- -- --
PUTNAM VARIABLE TRUST
Putnam VT Growth and Income Fund - Class -- -- -- -- -- --
IB*** (10/98;2/88)
Putnam VT International Growth Fund - -- -- -- -- -- --
Class IB*** (8/99;1/97)
Putnam VT International New Opportunities -- -- -- -- -- --
Fund - Class IB*** (8/99;1/97)
ROYCE
Micro-Cap Portfolio (8/99;12/96) -- -- -- -- -- --
Premier Portfolio (8/99;12/96) -- -- -- -- -- --
THIRD AVENUE
Value Portfolio (_/_;_/_) -- -- -- -- -- --
WANGER
International Small Cap (8/99;5/95) -- -- -- -- -- --
U.S. Small Cap (8/99;5/95) -- -- -- -- -- --
WARBURG PINCUS TRUST
Emerging Growth Portfolio (8/99;7/99) -- -- -- -- -- --
</TABLE>
*(Commencement date of the subaccount; Commencement date of the fund)
**Current applicable charges deducted from fund performance include a $30
annual contract administrative charge, a 1.25% mortality and expense risk
fee, a 0.15% variable account administrative charge, a 0.35 % Guaranteed
Minimum Income Benefit Rider (6% Accumulation Benefit Base) fee and
applicable withdrawal charge. Premium taxes are not reflected in these total
returns.
***Performance information for Class IB shares are based on Class IA shares
adjusted to reflect payments made under the Class IB distribution Plan.
[To be updated upon amendment.]
<PAGE>
Average Annual Total Return For Annuities With Withdrawal and Selection of the
Guaranteed Minumum Income Benefit Rider (6% Accumulation Benefit Base) For
Periods Ending Dec. 31. 1999
<TABLE>
<CAPTION>
Performance Since
Commencement of the Performance Since
Subaccount** Commencement of the Fund**
<S> <C> <C> <C> <C> <C> <C> <C>
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
- - - ---------- ------------- ------ ------------ ------ ------- -------- ------------
AXPSM VARIABLE PORTFOLIO
Blue Chip Advantage Fund (_/_;_/_)* --% --% --% --% --% --%
Bond Fund (2/95;10/81) -- -- -- -- -- --
Capital Resource Fund (2/95;10/81) -- -- -- -- -- --
Cash Management Fund (2/95;10/81) -- -- -- -- -- --
Diversified Equity Income Fund (_/_;_/_) -- -- -- -- -- --
Extra Income Fund (7/99;5/96) -- -- -- -- -- --
Federal Income Fund (_/_;_/_) -- -- -- -- -- --
Growth Fund (_/_;_/_) -- -- -- -- -- --
Managed Fund (2/95;4/86) -- -- -- -- -- --
New Dimensions Fund (10/97, 5/96) -- -- -- -- -- --
Small Cap Advantage Fund (_/_;_/_) -- -- -- -- -- --
AIM V.I.
Capital Appreciation Fund (7/99;5/93) -- -- -- -- -- --
Capital Development Fund (8/99;5/98) -- -- -- -- -- --
Value Fund (10/97;5/93) -- -- -- -- -- --
ALLIANCE VP
Premier Growth Portfolio (Class B) -- -- -- -- -- --
(8/99;6/99)
Technology Portfolio (Class B) (8/99,6/99) -- -- -- -- -- --
U.S. Government/High Grade Securities -- -- -- -- -- --
Portfolio (Class B) (8/99;6/99)
BARON
Capital Asset Fund (8/99;10/98) -- -- -- -- -- --
FIDELITY VIP
III Growth & Income Portfolio (Service Class) -- -- -- -- -- --
(8/99;12/96)
III Mid Cap Portfolio (Service Class) -- -- -- -- -- --
(7/99;12/98)
Overseas Portfolio (Service Class) -- -- -- -- -- --
(7/99;12/87)
FRANKLIN TEMPLETON VIP TRUST
Franklin Real Estate Securities Fund - -- -- -- -- -- --
Class 2 (8/99;1/99)
Mutual Shares Securities Fund - Class 2 -- -- -- -- -- --
(8/99;1/99)
Templeton International Smaller Companies -- -- -- -- -- --
Fund - Class 2 (8/99;1/99)
GOLDMAN SACHS VARIABLE INSURANCE TRUST (VIT)
Capital Growth Fund (5/99;4/98) -- -- -- -- -- --
COREsm U.S. Equity Fund (5/99;2/98) -- -- -- -- -- --
Global Income Fund (5/99;1/98) -- -- -- -- -- --
International Equity Fund (5/99;1/98) -- -- -- -- -- --
Internet Tollkeeper Fund (_/_;_/_)+ -- -- -- -- -- --
Janus Aspen Series
Aggressive Growth Portfolio: Service -- -- -- -- -- --
Shares (_/_;_/_)/
Growth Portfolio: Service Shares (_/_;_/_) -- -- -- -- -- --
International Growth Portfolio (_/_;_/_) -- -- -- -- -- --
</TABLE>
*(Commencement date of the subaccount; Commencement date of the fund)
**Current applicable charges deducted from fund performance include a $30
annual contract administrative charge, a 1.25% mortality and expense risk
fee, 0.15% variable account administrative charge, a 0.35% Guaranteed Minimum
Income Benefit Rider (6% Accumulation Benefit Base) fee and applicable
withdrawal charge. Premium taxes are not reflected in these total returns.
+Fund had not commenced operations as of Dec. 31, 1999.
[To be updated upon amendment.].
<PAGE>
Average Annual Total Return For Annuities With Withdrawal and Selection of the
Guaranteed Minumum Income Benefit Rider (6% Accumulation Benefit Base) For
Periods Ending Dec. 31. 1999 (continued)
<TABLE>
<CAPTION>
Performance Since
Commencement of the Performance Since
Subaccount** Commencement of the Fund**
<S> <C> <C> <C> <C> <C> <C> <C>
Since Since
Subaccount Investing In: 1 Year Commencement 1 Year 5 Years 10 Years Commencement
- - - ---------- ------------- ------ ------------ ------ ------- -------- ------------
J.P. MORGAN SERIES TRUST II
U.S. Disciplined Equity Portfolio --% --% --% --% --% --%
(8/99;12/94)*
LAZARD RETIREMENT SERIES INC.
Equity Portfolio (8/99;3/98) -- -- -- -- -- --
International Equity Portfolio (8/99;9/98) -- -- -- -- -- --
MFS (R) VARIABLE INSURANCE TRUSTSM (VIT)
New Discovery Series (7/99;5/98) -- -- -- -- -- --
Research Series (7/99;7/95) -- -- -- -- -- --
Utilities Series (7/99;1/95) -- -- -- -- -- --
PUTNAM VARIABLE TRUST
Putnam VT Growth and Income Fund - Class -- -- -- -- -- --
IB*** (10/98;2/88)
Putnam VT International Growth Fund - -- -- -- -- -- --
Class IB*** (8/99;1/97)
Putnam VT International New Opportunities -- -- -- -- -- --
Fund - Class IB*** (8/99;1/97)
ROYCE
Micro-Cap Portfolio (8/99;12/96) -- -- -- -- -- --
Premier Portfolio (8/99;12/96) -- -- -- -- -- --
THIRD AVENUE
Value Portfolio (_/_;_/_) -- -- -- -- -- --
WANGER
International Small Cap (8/99;5/95) -- -- -- -- -- --
U.S. Small Cap (8/99;5/95) -- -- -- -- -- --
WARBURG PINCUS TRUST
Emerging Growth Portfolio (8/99;7/99) -- -- -- -- -- --
</TABLE>
*(Commencement date of the subaccount; Commencement date of the fund)
**Current applicable charges deducted from fund performance include a $30
annual contract administrative charge, a 1.25% mortality and expense risk
fee, a 0.15% variable account administrative charge, a 0.35 % Guaranteed
Minimum Income Benefit Rider (6% Accumulation Benefit Base) fee and
applicable withdrawal charge. Premium taxes are not reflected in these total
returns.
***Performance information for Class IB shares are based on Class IA shares
adjusted to reflect payments made under the Class IB distribution Plan.
[To be updated upon amendment.]
<PAGE>
Cumulative Total Return
Cumulative total return represents the cumulative change in value of an
investment for a given period (reflecting change in a subaccount's accumulation
unit value). We compute cumulative total return using the following formula:
ERV - P
-----------------
P
where: P = a hypothetical initial payment of $1,000
ERV = Ending Redeemable Value of a hypothetical $1,000 payment
made at the beginning of the period, at the end of the period
(or fractional portion thereof)
Total return figures reflect the deduction of the withdrawal charge which
assumes you withdraw the entire contract value at the end of the one-, five- and
ten- year periods (or, if less, up to the life of the subaccount). We may also
show performance figures without the deduction of a withdrawal charge. In
addition, total return figures reflect the deduction of all other applicable
charges including the annual contract administrative charge, the variable
account administrative charge, the Guaranteed Minimum Income Benefit Rider (6%
Accumulation Benefit Base) fee, the 8% Performance Credit Rider fee and the
mortality and expense risk fee.
Calculation of Yield for Subaccounts Investing in Money Market Funds
Annualized Simple Yield
For the subaccounts investing in money market funds, we base quotations of
simple yield on:
(a) the change in the value of a hypothetical subaccount
(exclusive of capital changes and income other than investment
income) at the beginning of a particular seven-day period:
(b) less, a pro rata share of the subaccount expenses accrued over
the period;
(c) dividing this difference by the value of the subaccount at the
beginning of the period to obtain the base period return; and
(d) multiplying the base period return by 365/7.
The subaccount's value includes:
o any declared dividends;
o the value of any shares purchased with dividends paid during the period;
and o any dividends declared for such shares.
It does not include:
o the effect of any applicable withdrawal charge; or
o any realized or unrealized gains or losses.
<PAGE>
Annualized Compound Yield
We calculate compound yield using the base period return described above, which
we then compound according to the following formula:
Compound Yield = [(Base Period Return + 1)365/7] - 1
Annualized Yields Based on the Seven-Day Period Ending Dec. 31, 1998
Subaccount Investing In Simple Yield Compound Yield
EMS AXPSM VP - Cash Management Fund --% --%
[To be updated upon amendment]
You must consider (when comparing an investment in subaccounts investing in
money market funds with fixed annuities) that fixed annuities often provide an
agreed-to or guaranteed yield for a stated period of time, whereas the
subaccount's yield fluctuates. In comparing the yield of the subaccount to a
money market fund, you should consider the different services that the contract
provides.
Annualized Yield for Subaccounts Investing in Income Funds
For the subaccounts investing in income funds, we base quotations of yield on
all investment income earned during a particular 30-day period, less expenses
accrued during the period (net investment income) and compute it by dividing net
investment income per accumulation unit by the value of an accumulation unit on
the last day of the period according to the following formula:
YIELD = 2[a-b + 1)6 - 1]
cd
where: a = dividends and investment income earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of accumulation units outstanding during
the period that were entitled to receive dividends
d = the maximum offering price per accumulation unit on the last day of
the period
The subaccount earns yield from the increase in the net asset value of shares of
the fund in which it invests and from dividends declared and paid by the fund,
which are automatically invested in shares of the fund.
Annualized Yield Based on 30-Day Period Ended Dec. 31, 1998
Subaccount Investing In Yield
ESI AXPSM Variable Portfolio - Bond Fund --%
[To be updated upon amendment]
The yield on the subaccount's accumulation unit may fluctuate daily and does not
provide a basis for determining future yields.
<PAGE>
Independent rating or statistical services or publishers or publications such as
those listed below may quote subaccount performance, compare it to rankings,
yields or returns, or use it in variable annuity accumulation or settlement
illustrations they publish or prepare:
The Bank Rate Monitor National Index, Barron's, Business Week, CDA
Technologies, Donoghue's Money Market Fund Report, Financial Services
Week, Financial Times, Financial World, Forbes, Fortune, Global
Investor, Institutional Investor, Investor's Daily, Kiplinger's
Personal Finance, Lipper Analytical Services, Money, Morningstar,
Mutual Fund Forecaster, Newsweek, The New York Times, Personal
Investor, Stanger Report, Sylvia Porter's Personal Finance, USA Today,
U.S. News & World Report, The Wall Street Journal and Wiesenberger
Investment Companies Service.
CALCULATING ANNUITY PAYOUTS
The Variable Account
We do the following calculations separately for each of the subaccounts of the
variable account. The separate monthly payouts, added together, make up your
total variable annuity payout.
Initial Payout: To compute your first monthly payment, we:
o determine the dollar value of your contract as of the valuation date that
falls on (or the closest valuation date that falls before) the seventh
calendar day before the retirement date and then deduct any applicable
premium tax; then
o apply the result to the annuity table contained in the contract or another
table at least as favorable.
The annuity table shows the amount of the first monthly payment for each $1,000
of value which depends on factors built into the table, as described below.
Annuity Units: We then convert the value of your subaccount to annuity units. To
compute the number of units credited to you, we divide the first monthly payment
by the annuity unit value (see below) on the valuation date that falls on (or
closest to the valuation date that falls before) the seventh calendar before the
retirement date. The number of units in your subaccount is fixed.
The value of the units fluctuates with the performance of the underlying fund.
Subsequent Payouts: To compute later payouts, we multiply:
o the annuity unit value on the valuation date that falls on (or closest to
the valuation date that falls before) the seventh calendar day before the
payout is due; by
o the fixed number of annuity units credited to you.
Annuity Unit Values: We originally set this value at $1 for each subaccount. To
calculate later value we multiply the last annuity value by the product of:
o the net investment factor; and
o the neutralizing factor.
The purpose of the neutralizing factor is to offset the effect of the assumed
investment rate built into the annuity table. With an assumed investment rate of
5%, the neutralizing factor is 0.999866 for a one day valuation period.
Net Investment Factor
We determine the net investment factor by:
o adding the fund's current net asset value per share plus the per-share
amount of any accrued income or capital gain dividends to obtain a current
adjusted net asset value per share; then
o dividing that sum by the previous adjusted net asset value per share; and
o subtracting the percentage factor representing the mortality and expense
risk fee and the variable account administrative charge from the result.
Because the net asset value of the fund may fluctuate, the net investment factor
may be greater or less than one, and the annuity unit value may increase or
decrease. You bear this investment risk in a variable subaccount.
The One-Year Fixed Account
We guarantee your fixed annuity payout amounts. Once calculated, your payout
will remain the same and never change. To calculate your annuity payouts we:
o take the value of your one-year fixed account at the retirement date or the
date you have selected to begin receiving your annuity payouts; then
o using an annuity table, we apply the value according to the annuity payout
plan you select.
The annuity payout table we use will be the one in effect at the time you choose
to begin your annuity payouts. The values in the table will be equal to or
greater than the table in your contract.
RATING AGENCIES
The following chart reflects the ratings given to us by independent rating
agencies. These agencies evaluate the financial soundness and claims-paying
ability of insurance companies based on a number of different factors. This
information does not relate to the management or performance of the subaccounts
of the contract. This information relates only to the fixed account and reflects
our ability to make annuity payouts and to pay death benefits and other
distributions from the annuities.
Rating agency Rating
A.M. Best A+
(Superior)
Duff & Phelps AAA
Moody's Aa2
PRINCIPAL UNDERWRITER
The principal underwriter for the contract is American Express Financial
Advisors Inc. which offers the contract on a continuous basis.
The contract is new and, therefore, we have not received any withdrawal charges
or paid any commissions.
INDEPENDENT AUDITORS
The financial statements appearing in this SAI have been audited by Ernst &
Young LLP (1400 Pillsbury Center, 200 South Sixth Street, Minneapolis, MN 55402)
independent auditors, as stated in their report appearing herein.
FINANCIAL STATEMENTS
[To be updated upon amendment]
<PAGE>
PART C.
Item 24. Financial Statements and Exhibits
(a) Financial Statements included in Part B of this Registration Statement to
be added upon amendment:
(b) Exhibits:
1.1 Resolution of the Executive Committee of the Board of Directors of American
Enterprise Life establishing the American Enterprise Variable Annuity
Account dated July 15, 1987, filed electronically as Exhibit 1 to the
Initial Registration Statement No. 33-54471, filed on or about July 5,
1994, is incorporated by reference.
1.2 Resolution of the Board of Directors of American Enterprise Life
establishing 37 additional subaccounts within the separate account dated
June 29, 1999, filed electronically as Exhibit 1.2 to Pre-Effective
Amendment No. 1 to American Enterprise Variable Annuity Account
Registration Statement No. 333-67595, filed on or about July 8, 1999, is
incorporated by reference.
2. Not applicable.
3. Form of Master General Agent Agreement for American Enterprise Life
Insurance Company Variable Annuities (form 9802B) filed electronically as
Exhibit 3 to Pre-Effective Amendment No. 1 to Registration Statement No.
333-74865 filed on or about Aug. 4, 1999, is incorporated by reference.
4.1 Form of Deferred Annuity Contract (form 43431) filed electronically as
Exhibit 4.1 to Pre-Effective Amendment No. 1 to Registration Statement No.
333-74865 filed on or about Aug. 4, 1999, is incorporated by reference.
4.2 Form of Roth IRA Endorsement (form 43094) filed electronically as
Exhibit 4.2 to Pre-Effective Amendment No. 1 to Registration Statement No.
333-74865 filed on or about Aug. 4, 1999, is incorporated by reference.
4.3 Form of SEP-IRA Endorsement (form 43433) filed electronically as Exhibit
4.3 to Pre-Effective Amendment No. 1 to Registration Statement No.
333-74865 filed on or about Aug. 4, 1999, is incorporated by reference.
4.4 Form of TSA Endorsement (form 43413) filed electronically as Exhibit 4.4 to
Pre-Effective Amendment No. 1 to American Enterprise Variable Annuity
Account Registration Statement No. 333-67595, filed on or about July 8,
1999, is incorporated by reference.
5. Form of Variable Annuity Application (form 43432) filed electronically as
Exhibit 5 to Pre-Effective Amendment No. 1 to Registration Statement No.
333-74865 filed on or about Aug. 4, 1999, is incorporated by reference.
<PAGE>
6.1 Amendment and Restatement of Articles of Incorporation of American
Enterprise Life dated July 29, 1986, filed electronically as Exhibit 6.1 to
the Initial Registration Statement No. 33-54471, filed on or about July 5,
1994, is incorporated by reference.
6.2 Amended By-Laws of American Enterprise Life, filed electronically as
Exhibit 6.2 to the Initial Registration Statement No. 33-54471, filed on or
about July 5, 1994, is incorporated by reference.
7. Not applicable.
8.1 Form of Participation Agreement among Royce Capital Fund, Royce &
Associates, Inc. and American Enterprise Life Insurance Company filed
electronically as Exhibit 8.1 to Pre-Effective Amendment No. 1 to
Registration Statement No. 333-74865 filed on or about Aug. 4, 1999, is
incorporated by reference.
8.2(a) Copy of Participation Agreement among Putnam Capital Manager Trust,
Putnam Mutual Funds Corp. and American Enterprise Life Insurance Company,
dated January 16, 1995, filed electronically as Exhibit 8.2 to
Post-Effective Amendment No. 2 to Registration Statement No. 33-54471, is
incorporated by reference.
8.2(b) Form of Amendment No. 4 to Participation Agreement among Putnam Capital
Manager Trust, Putnam Mutual Funds Corp. and American Enterprise Life
Insurance Company dated June 15, 1999 filed electronically as Exhibit
8.2(b) to Pre-Effective Amendment No. 1 to Registration Statement No.
333-74865 filed on or about Aug. 4, 1999, is incorporated by reference.
8.3 Form of Participation Agreement among Templeton Variable Products Series
Fund, Franklin Templeton Variable Insurance Products Trust, Franklin
Templeton Distributors, Inc. and American Enterprise Life Insurance Company
filed electronically as Exhibit 8.3 to Pre-Effective Amendment No. 1 to
Registration Statement No. 333-74865 filed on or about Aug. 4, 1999, is
incorporated by reference.
8.4(a) Copy of Participation Agreement among Goldman Sachs Variable Insurance
Trust, Goldman Sachs & Co. and American Enterprise Life Insurance Company,
dated April 1, 1999, filed electronically as Exhibit 8.4(a) to
Pre-Effective Amendment No. 1 to Registration Statement No. 333-74865 filed
on or about Aug. 4, 1999, is incorporated by reference.
8.4(b) Form of Amendment 1 to Schedule 2 to Participation Agreement among
Goldman Sachs Variable Insurance Trust, Goldman Sachs & Co. and American
Enterprise Life Insurance Company filed electronically as Exhibit 8.4(b) to
Pre-Effective Amendment No. 1 to Registration Statement No. 333-74865 filed
on or about Aug. 4, 1999, is incorporated by reference.
8.4(c) Form of Amendment 1 to Schedule 3 to Participation Agreement among
Goldman Sachs Variable Insurance Trust, Goldman Sachs & Co. and American
Enterprise Life Insurance Company filed electronically as Exhibit 8.4(c) to
Pre-Effective Amendment No. 1 to Registration Statement No. 333-74865 filed
on or about Aug. 4, 1999, is incorporated by reference.
9. Opinion of counsel and consent to its use as to the legality of the
securities being registered to be filed upon amendment.
10. Consent of Independent Auditors to be filed upon amendment.
11. None.
12. Not applicable.
13. Copy of schedule for computation of each performance quotation provided in
the Registration Statement in response to Item 21 to be filed upon
amendment.
14. Power of Attorney to sign this Post-Effective Amendment, dated July 29,
1999, filed electronically as Exhibit 15.3 to Initial Registration
Statement No. 333-85567, filed on or about Aug. 19, 1999 is incorporated by
reference.
<PAGE>
Item 25. Directors and Officers of the Depositor (American Enterprise Life
Insurance Company)
<TABLE>
<CAPTION>
<S> <C> <C>
Name Principal Business Address Positions and Offices with Depositor
- - - ------------------------------------- -------------------------------------- --------------------------------------
James E. Choat IDS Tower 10 Director, President and Chief
Minneapolis, MN 55440 Executive Officer
Lorraine R. Hart IDS Tower 10 Vice President, Investments
Minneapolis, MN 55440
Jeffrey S. Horton IDS Tower 10 Vice President and Treasurer
Minneapolis, MN 55440
Richard W. Kling IDS Tower 10 Director and Chairman of the Board
Minneapolis, MN 55440
Bruce A. Kohn IDS Tower 10 Vice President, Group Counsel and
Minneapolis, MN 55440 Assistant Secretary
Paul S. Mannweiler Indianapolis Power and Light Director
One Monument Circle
P.O. Box 1595
Indianapolis, IN 46206-1595
Paula R. Meyer IDS Tower 10 Director and Executive Vice
Minneapolis, MN 55440 President, Assured Assets
Mary Ellyn Minenko IDS Tower 10 Vice President, Group Counsel and
Minneapolis, MN 55440 Assistant Secretary
Stuart A. Sedlacek IDS Tower 10 Executive Vice President
Minneapolis, MN 55440
William A. Stoltzmann IDS Tower 10 Director, Vice President, General
Minneapolis, MN 55440 Counsel and Secretary
Philip C. Wentzel IDS Tower 10 Vice President and Controller
Minneapolis, MN 55440
</TABLE>
<PAGE>
Item 26. Persons Controlled by or Under Common Control with the Depositor or
Registrant
American Enterprise Life Insurance Company is a wholly-owned
subsidiary of IDS Life Insurance Company which is a
wholly-owned subsidiary of American Express Financial
Corporation. American Express Financial Corporation is a
wholly-owned subsidiary of American Express Company (American
Express).
The following list includes the names of major subsidiaries of
American Express.
<TABLE>
<CAPTION>
<S> <C>
Jurisdiction of
Name of Subsidiary Incorporation
I. Travel Related Services
American Express Travel Related Services Company, Inc. New York
II. International Banking Services
American Express Bank Ltd. Connecticut
III. Companies engaged in Financial Services
Advisory Capital Strategies Group Inc. Minnesota
American Centurion Life Assurance Company New York
American Enterprise Investment Services Inc. Minnesota
American Enterprise Life Insurance Company Indiana
American Express Asset Management Group Inc. Minnesota
American Express Asset Management International Inc. Delaware
American Express Asset Management International (Japan) Ltd. Japan
American Express Asset Management Ltd. England
American Express Client Service Corporation Minnesota
American Express Corporation Delaware
American Express Financial Advisors Inc. Delaware
American Express Financial Corporation Delaware
American Express Insurance Agency of Arizona Inc. Arizona
American Express Insurance Agency of Idaho Inc. Idaho
American Express Insurance Agency of Nevada Inc. Nevada
American Express Insurance Agency of Oregon Inc. Oregon
American Express Minnesota Foundation Minnesota
American Express Property Casualty Insurance Agency of Kentucky Inc. Kentucky
American Express Property Casualty Insurance Agency of Maryland Inc. Maryland
American Express Property Casualty Insurance Agency of Pennsylvania Inc. Pennsylvania
American Express Trust Company Minnesota
American Partners Life Insurance Company Arizona
IDS Cable Corporation Minnesota
IDS Cable II Corporation Minnesota
IDS Capital Holdings Inc. Minnesota
IDS Certificate Company Delaware
IDS Futures Corporation Minnesota
IDS Insurance Agency of Alabama Inc. Alabama
IDS Insurance Agency of Arkansas Inc. Arkansas
IDS Insurance Agency of Massachusetts Inc. Massachusetts
IDS Insurance Agency of New Mexico Inc. New Mexico
<PAGE>
IDS Insurance Agency of North Carolina Inc. North Carolina
IDS Insurance Agency of Utah Inc. Utah
IDS Insurance Agency of Wyoming Inc. Wyoming
IDS Life Insurance Company Minnesota
IDS Life Insurance Company of New York New York
IDS Management Corporation Minnesota
IDS Partnership Services Corporation Minnesota
IDS Plan Services of California, Inc. Minnesota
IDS Property Casualty Insurance Company Wisconsin
IDS Real Estate Services, Inc. Delaware
IDS Realty Corporation Minnesota
IDS Sales Support Inc. Minnesota
IDS Securities Corporation Delaware
Investors Syndicate Development Corp. Nevada
Public Employee Payment Company Minnesota
</TABLE>
Item 27. Number of Contract owners
Not applicable.
Item 28. Indemnification
The By-Laws of the depositor provide that the Corporation
shall have the power to indemnify a director, officer, agent
or employee of the Corporation pursuant to the provisions of
applicable statues or pursuant to contract.
The Corporation may purchase and maintain insurance on behalf
of any director, officer, agent or employee of the Corporation
against any liability asserted against or incurred by the
director, officer, agent or employee in such capacity or
arising out of the director's, officer's, agent's or
employee's status as such, whether or not the Corporation
would have the power to indemnify the director, officer, agent
or employee against such liability under the provisions of
applicable law.
The By-Laws of the depositor provide that it shall indemnify a
director, officer, agent or employee of the depositor pursuant
to the provisions of applicable statutes or pursuant to
contract.
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 whether such indemnification by it
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
<PAGE>
Item 29 Principal Underwriters
(
(a) American Express Financial Advisors acts as principal underwriter for
the following investment companies:
AXP Bond Fund, Inc.; AXP California Tax-Exempt Trust; AXP Discovery
Fund, Inc.; AXP Equity Select Fund, Inc.; AXP Extra Income Fund, Inc.;
AXP Federal Income Fund, Inc.; AXP Global Series, Inc.; AXP Growth
Series, Inc.; AXP High Yield Tax-Exempt Fund, Inc.; AXP International
Fund, Inc.; AXP Investment Series, Inc.; AXP Managed Series, Inc.; AXP
Market Advantage Series, Inc.; AXP Money Market Series, Inc.; AXP New
Dimensions Fund, Inc.; AXP Precious Metals Fund, Inc.; AXP Progressive
Fund, Inc.; AXP Selective Fund, Inc.; AXP Special Tax-Exempt Series
Trust; AXP Stock Fund, Inc.; AXP Strategy Series, Inc.; AXP Tax-Exempt
Series, Inc.; AXP Tax-Free Money Fund, Inc.; AXP Utilities Income Fund,
Inc., Growth Trust; Growth and Income Trust; Income Trust; Tax-Free
Income Trust; World Trust; IDS Certificate Company; Strategist Income
Fund, Inc.; Strategist Growth Fund, Inc.; Strategist Growth and Income
Fund, Inc.; Strategist World Fund, Inc. and Strategist Tax-Free Income
Fund, Inc.
(b) As to each director, officer or partner of the principal underwriter:
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Principal Business Address Position and Offices with Offices with Registrant
Underwriter
- - - -------------------------------------- ----------------------------------- -----------------------------------
Ronald G. Abrahamson Vice President-Service Quality None
IDS Tower 10 and Reengineering
Minneapolis, MN 55440
Douglas A. Alger Senior Vice President-Human None
IDS Tower 10 Resources
Minneapolis, MN 55440
Peter J. Anderson Senior Vice President-Investment Vice President-Investments
IDS Tower 10 Operations
Minneapolis, MN 55440
Ward D. Armstrong Vice President-American Express None
IDS Tower 10 Retirement Services
Minneapolis, MN 55440
John M. Baker Vice President-Plan Sponsor None
IDS Tower 10 Services
Minneapolis, MN 55440
Joseph M. Barsky III Vice President - Mutual Fund None
IDS Tower 10 Equities
Minneapolis, MN 55440
Timothy V. Bechtold Vice President-Risk Management None
IDS Tower 10 Products
Minneapolis, MN 55440
John D. Begley Group Vice President-Ohio/Indiana None
Suite 100
7760 Olentangy River Rd.
Columbus, OH 43235
Brent L. Bisson Group Vice President-Los Angeles None
Suite 900, E. Westside Twr Metro
11835 West Olympic Blvd.
Los Angeles, CA 90064
John C. Boeder Vice President-Nonproprietary None
IDS Tower 10 Products
Minneapolis, MN 55440
Walter K. Booker Group Vice President-New Jersey None
Suite 200, 3500 Market Street
Camp Hill, NJ 17011
Bruce J. Bordelon Group Vice President - San None
1333 N. California Blvd., Suite 200 Francisco Area
Walnut Creek, CA 94596
Charles R. Branch Group Vice President-Northwest None
Suite 200
West 111 North River Dr.
Spokane, WA 99201
Douglas W. Brewers Vice President-Sales Support None
IDS Tower 10
Minneapolis, MN 55440
Karl J. Breyer Corporate Senior Vice President None
IDS Tower 10
Minneapolis, MN 55440
Cynthia M. Carlson Vice President-American Express None
IDS Tower 10 Securities Services
Minneapolis, MN 55440
Mark W. Carter Senior Vice President and Chief None
IDS Tower 10 Marketing Officer
Minneapolis, MN 55440
James E. Choat Senior Vice President - Third None
IDS Tower 10 Party Distribution
Minneapolis, MN 55440
Kenneth J. Ciak Vice President and General None
IDS Property Casualty Manager-IDS Property Casualty
1400 Lombardi Avenue
Green Bay, WI 54304
Paul A. Connolly Vice President-Retail - Retail None
IDS Tower 10 Distribution Services
Minneapolis, MN 55440
Henry J. Cormier Group Vice President-Connecticut None
Commerce Center One
333 East River Drive
East Hartford, CT 06108
John M. Crawford Group Vice President-Arkansas/ None
Suite 200 Springfield/Memphis
10800 Financial Ctr Pkwy
Little Rock, AR 72211
Kevin F. Crowe Group Vice None
Suite 312 President-Carolinas/Eastern
7300 Carmel Executive Pk Georgia
Charlotte, NC 28226
Colleen Curran Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
Luz Maria Davis Vice President-Communications None
IDS Tower 10
Minneapolis, MN 55440
Arthur E. Delorenzo Group Vice President - Upstate None
4 Atrium Drive, #100 New York
Albany, NY 12205
Scott M. DiGiammarino Group Vice None
Suite 500, 8045 Leesburg Pike President-Washington/Baltimore
Vienna, VA 22182
Bradford L. Drew Group Vice President-Eastern None
Two Datran Center Florida
Penthouse One B
9130 S. Dadeland Blvd.
Miami, FL 33156
Douglas K. Dunning Vice President-Assured Assets None
IDS Tower 10 Product Development and Management
Minneapolis, MN 55440
James P. Egge Group Vice President-Western None
4305 South Louise, Suite 202 Iowa, Nebraska, Dakotas
Sioux Falls, SD 57103
Gordon L. Eid Senior Vice President, General None
IDS Tower 10 Counsel and Chief Compliance
Minneapolis, MN 55440 Officer
Robert M. Elconin Vice President-Government None
IDS Tower 10 Relations
Minneapolis, MN 55440
Phillip W. Evans Group Vice President-Rocky None
Suite 600 Mountain
6985 Union Park Center
Midvale, UT 84047-4177
Gordon M. Fines Vice President-Mutual Fund Equity None
IDS Tower 10 Investments
Minneapolis, MN 55440
Douglas L. Forsberg Vice President - International None
IDS Tower 10
Minneapolis, MN 55440
Jeffrey P. Fox Vice President and Corporate None
IDS Tower 10 Controller
Minneapolis, MN 55440
William P. Fritz Group Vice President-Gateway None
Suite 160
12855 Flushing Meadows Dr
St. Louis, MO 63131
Carl W. Gans Group Vice President-Twin City None
8500 Tower Suite 1770 Metro
8500 Normandale Lake Blvd.
Bloomington, MN 55437
Peter A. Gallus Vice President-Investment None
IDS Tower 10 Administration
Minneapolis, MN 55440
David A. Hammer Vice President and Marketing None
IDS Tower 10 Controller
Minneapolis, MN 55440
Teresa A. Hanratty Senior Vice President-Field None
Suites 6&7 Management
169 South River Road
Bedford, NH 03110
Robert L. Harden Group Vice President-Boston Metro None
Two Constitution Plaza
Boston, MA 02129
Lorraine R. Hart Vice President-Insurance None
IDS Tower 10 Investments
Minneapolis, MN 55440
Scott A. Hawkinson Vice President and None
IDS Tower 10 Controller-Private Client Group
Minneapolis, MN 55440
Brian M. Heath Senior Vice President and General None
Suite 150 Sales Manager
801 E. Campbell Road
Richardson, TX 75081
Janis K. Heaney Vice President-Incentive None
IDS Tower 10 Management
Minneapolis, MN 55440
Jon E. Hjelm Group Vice President-Rhode None
319 Southbridge Street Island/Central-Western
Auburn, MA 01501 Massachusetts
David J. Hockenberry Group Vice President-Tennessee None
30 Burton Hills Blvd. Valley
Suite 175
Nashville, TN 37215
Jeffrey S. Horton Vice President and Treasurer None
IDS Tower 10
Minneapolis, MN 55440
David R. Hubers Chairman, President and Chief Board member
IDS Tower 10 Executive Officer
Minneapolis, MN 55440
Debra A. Hutchinson Vice President - Relationship None
IDS Tower 10 Leader
Minneapolis, MN 55440
James M. Jensen Vice President and None
IDS Tower 10 Controller-Advice and Retail
Minneapolis, MN 55440 Distribution Group
Marietta L. Johns Senior Vice President-Field None
IDS Tower 10 Management
Minneapolis, MN 55440
Nancy E. Jones Vice President-Business None
IDS Tower 10 Development
Minneapolis, MN 55440
Ora J. Kaine Vice President-Financial Advisory None
IDS Tower 10 Services
Minneapolis, MN 55440
Linda B. Keene Vice President-Market Development None
IDS Tower 10
Minneapolis, MN 55440
Raymond G. Kelly Group Vice President-North Texas None
Suite 250
801 East Campbell Road
Richardson, TX 75081
Richard W. Kling Senior Vice President-Insurance None
IDS Tower 10 Products
Minneapolis, MN 55440
John M. Knight Vice President-Investment Treasurer
IDS Tower 10 Accounting
Minneapolis, MN 55440
Paul F. Kolkman Vice President-Actuarial Finance None
IDS Tower 10
Minneapolis, MN 55440
Claire Kolmodin Vice President-Service Quality None
IDS Tower 10
Minneapolis, MN 55440
David S. Kreager Group Vice President-Greater None
Suite 108 Michigan
Trestle Bridge V
5136 Lovers Lane
Kalamazoo, MI 49002
Steven C. Kumagai Director and Senior Vice None
IDS Tower 10 President-Direct and Interactive
Minneapolis, MN 55440 Group
Mitre Kutanovski Group Vice President-Chicago Metro None
Suite 680
8585 Broadway
Merrillville, IN 48410
Kurt A. Larson Vice President-Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Lori J. Larson Vice President-Brokerage and None
IDS Tower 10 Direct Services
Minneapolis, MN 55440
Daniel E. Laufenberg Vice President and Chief U.S. None
IDS Tower 10 Economist
Minneapolis, MN 55440
Peter A. Lefferts Senior Vice President-Corporate None
IDS Tower 10 Strategy and Development
Minneapolis, MN 55440
Douglas A. Lennick Director and Executive Vice None
IDS Tower 10 President-Private Client Group
Minneapolis, MN 55440
Mary J. Malevich Vice President-Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
<PAGE>
Fred A. Mandell Vice President-Distribution None
IDS Tower 10 Channel Marketing
Minneapolis, MN 55440
Daniel E. Martin Group Vice President-Pittsburgh None
Suite 650 Metro
5700 Corporate Drive
Pittsburgh, PA 15237
Timothy J. Masek Vice President and Director of None
IDS Tower 10 Global Research
Minnapolis, MN 55440
Sarah A. Mealey Vice President-Mutual Funds None
IDS Tower 10
Minneapolis, MN 55440
Paula R. Meyer Vice President-Assured Assets None
IDS Tower 10
Minneapolis, MN 55440
Shashank B. Modak Vice President - Technology Leader None
IDS Tower 10
Minneapolis, MN 55440
Pamela J. Moret Senior Vice President-Investment None
IDS Tower 10 Products and Vice
Minneapolis, MN 55440 President-Variable Assets
Barry J. Murphy Senior Vice President-Client None
IDS Tower 10 Service
Minneapolis, MN 55440
Mary Owens Neal Vice President-Consumer Marketing None
IDS Tower 10
Minneapolis, MN 55440
Thomas V. Nicolosi Group Vice President-New York None
Suite 220 Metro Area
500 Mamaroneck Avenue
Harrison, NY 10528
Michael J. O'Keefe Vice President-Advisory Business None
IDS Tower 10 Systems
Minneapolis, MN 55440
James R. Palmer Vice President-Taxes None
IDS Tower 10
Minneapolis, MN 55440
Marc A. Parker Group Vice None
10200 SW Greenburg Road President-Portland/Eugene
Suite 110
Portland, OR 97223
Carla P. Pavone Vice President-Compensation None
IDS Tower 10 Services and ARD Product
Minneapolis, MN 55440 Distribution
Thomas P. Perrine Senior Vice President-Group None
IDS Tower 10 Relationship Leader/American
Minneapolis, MN 55440 Express Technologies Financial
Services
Susan B. Plimpton Vice President-Marketing Services None
IDS Tower 10
Minneapolis, MN 55440
Larry M. Post Group Vice President-Philadelphia None
One Tower Bridge Metro
100 Front Street 8th Fl
West Conshohocken, PA 19428
Ronald W. Powell Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
Diana R. Prost Group Vice None
3030 N.W. Expressway President-Kansas/Oklahoma
Suite 900
Oklahoma City, OK 73112
James M. Punch Vice President Branded Platform None
IDS Tower 10 Project
Minneapolis, MN 55440
Frederick C. Quirsfeld Senior Vice President-Fixed Income Vice President - Fixed Income
IDS Tower 10 Investments
Minneapolis, MN 55440
Rollyn C. Renstrom Vice President-Corporate Planning None
IDS Tower 10 and Analysis
Minneapolis, MN 55440
R. Daniel Richardson III Group Vice President-Southern None
Suite 800 Texas
Arboretum Plaza One
9442 Capital of Texas Hwy N.
Austin, TX 78759
ReBecca K. Roloff Senior Vice President-Field None
IDS Tower 10 Management and Financial Advisory
Minneapolis, MN 55440 Service
Stephen W. Roszell Senior Vice None
IDS Tower 10 President-Institutional
Minneapolis, MN 55440
Max G. Roth Group Vice None
Suite 201 S IDS Ctr President-Wisconsin/Upper Michigan
1400 Lombardi Avenue
Green Bay, WI 54304
Diane M. Ruebling Group Vice President-Central None
2200 Douglas Blvd. California/Western Nevada
Suite 200, Bldg. B
Roseville, CA 95661
Erven A. Samsel Senior Vice President-Field None
45 Braintree Hill Park Management
Suite 402
Braintree, MA 02184
Theresa M. Sapp Vice President - Relationship None
IDS Tower 10 Leader
Minneapolis, MN 55440
Russell L. Scalfano Group Vice None
Suite 201 President-Illinois/Indiana/Kentucky
101 Plaza East Blvd.
Evansville, IN 47715
William G. Scholz Group Vice President-Arizona/Las None
Suite 205 Vegas
7333 E Doubletree Ranch Rd
Scottsdale, AZ 85258
Stuart A. Sedlacek Senior Vice President and Chief None
IDS Tower 10 Financial Officer
Minneapolis, MN 55440
Donald K. Shanks Vice President-Property Casualty None
IDS Tower 10
Minneapolis, MN 55440
F. Dale Simmons Vice President-Senior Portfolio None
IDS Tower 10 Manager, Insurance Investments
Minneapolis, MN 55440
Judy P. Skoglund Vice President-Quality and None
IDS Tower 10 Service Support
Minneapolis, MN 55440
James B. Solberg Group Vice President-Eastern Iowa None
466 Westdale Mall Area
Cedar RapIDS, IA 52404
Bridget Sperl Vice President-Geographic Service None
IDS Tower 10 Teams
Minneapolis, MN 55440
Paul J. Stanislaw Group Vice President-Southern None
Suite 1100 California
Two Park Plaza
Irvine, CA 92714
Lisa A. Steffes Vice President - Marketing Offer None
IDS Tower 10 Development
Minneapolis, MN 55440
Lois A. Stilwell Group Vice President-Outstate None
Suite 433 Minnesota Area/ North
9900 East Bren Road Dakota/Western Wisconsin
Minnetonka, MN 55343
William A. Stoltzmann Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
James J. Strauss Vice President and General Auditor None
IDS Tower 10
Minneapolis, MN 55440
Jeffrey J. Stremcha Vice President-Information None
IDS Tower 10 Resource Management/ISD
Minneapolis, MN 55440
Barbara Stroup Stewart Vice President-Channel Development None
IDS Tower 10
Minneapolis, MN 55440
Craig P. Taucher Group Vice None
Suite 150 President-Orlando/Jacksonville
4190 Belfort Road
Jacksonville, FL 32216
Neil G. Taylor Group Vice None
Suite 425 President-Seattle/Tacoma/Hawaii
101 Elliott Avenue West
Seattle, WA 98119
John R. Thomas Senior Vice President Board Member
IDS Tower 10
Minneapolis, MN 55440
Keith N. Tufte Vice President and Director of None
IDS Tower 10 Equity Research
Minneapolis, MN 55440
Peter S. Velardi Group Vice None
Suite 180 President-Atlanta/Birmingham
1200 Ashwood Parkway
Atlanta, GA 30338
Charles F. Wachendorfer Group Vice President-Detroit Metro None
8115 East Jefferson Avenue
Detroit, MI 48214
Donald F. Weaver Group Vice President-Greater None
3500 Market Street, Suite 200 Pennsylvania
Camp Hill, PA 17011
Norman Weaver Jr. Senior Vice President - Alliance None
1010 Main St. Suite 2B Group
Huntington Beach, CA 92648
Michael L. Weiner Vice President-Tax Research and None
IDS Tower 10 Audit
Minneapolis, MN 55440
Jeffry M. Welter Vice President-Equity and Fixed None
IDS Tower 10 Income Trading
Minneapolis, MN 55440
Thomas L. White Group Vice President-Cleveland None
Suite 200 Metro
28601 Chagrin Blvd.
Woodmere, OH 44122
Eric S. Williams Group Vice President-Virginia None
Suite 250
3951 Westerre Parkway
Richmond, VA 23233
William J. Williams Group Vice President-Western None
Two North Tamiami Trail Florida
Suite 702
Sarasota, FL 34236
Edwin M. Wistrand Vice President and Assistant None
IDS Tower 10 General Counsel
Minneapolis, MN 55440
Michael D. Wolf Vice President-Senior Portfolio None
IDS Tower 10 Manager
Minneapolis, MN 55440
Michael R. Woodward Senior Vice President-Field None
32 Ellicott St Management
Suite 100
Batavia, NY 14020
Rande L. Zellers Group Vice President-Gulf States None
1 Galleria Blvd., Suite 1900
Metairie, LA 70001
Item 29(c)
Net Underwriting
Name of Principal Discounts and Compensation on Brokerage
Underwriter Commissions Redemption Commissions Compensation
American Express $[_________] $[___________] None None
Financial Advisors
Inc.
To be updated upon amendment
</TABLE>
<PAGE>
Item 30. Location of Accounts and Records
American Enterprise Life Insurance Company
IDS Tower 10
Minneapolis, MN 55402
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Registrant undertakes that it will file a post-effective
amendment to this registration statement as frequently as is
necessary to ensure that the audited financial statements in
the registration statement are never more than 16 months old
for so long as payments under the variable annuity contracts
may be accepted.
(b) Registrant undertakes that it will include either (1) as part
of any application to purchase a contract offered by the
prospectus, a space that an applicant can check to request a
Statement of Additional Information, or (2) a post card or
similar written communication affixed to or included in the
prospectus that the applicant can remove to send for a
Statement of Additional Information.
(c) Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made
available under this Form promptly upon written or oral
request to American Enterprise Life Contract Owner Service at
the address or phone number listed in the prospectus.
(d) Registrant represents that it is relying upon the no-action
assurance given to the American Council of Life Insurance
(pub. avail. Nov. 28, 1998). Further, Registrant represents
that it has complied with the provisions of paragraphs (1)-(4)
of that no-action letter.
(e) The sponsoring insurance company represents that the fees and
charges deducted under the contract, 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, American Enterprise Life Insurance Company, on behalf of the Registrant,
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Minneapolis, and State of
Minnesota, on the 28th day of February, 2000.
AMERICAN ENTERPRISE VARIABLE ANNUITY ACCOUNT
(Registrant)
By American Enterprise Life Insurance Company
(Sponsor)
By /s/James E. Choat*
James E. Choat
President and Chief Executive Officer
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities indicated on the 28th day of
February, 2000.
Signature Title
/s/ James E. Choat* Director, President and
James E. Choat Chief Executive Officer
/s/ Jeffrey S. Horton * Vice President and Treasurer
Jeffrey S. Horton
/s/ Richard W. Kling* Director and Chairman of the Board
Richard W. Kling
/s/ Paul S. Mannweiler* Director
Paul S. Mannweiler
/s/ Paula R. Meyer* Director and Executive Vice President -
Paula R. Meyer Assured Assets
/s/ William A. Stoltzmann* Director, Vice President, General
William A. Stoltzmann Counsel and Secretary
/s/ Philip C. Wentzel* Vice President and Controller
Philip C. Wentzel
<PAGE>
*Signed pursuant to Power of Attorney, dated July 29, 1999, filed electronically
as Exhibit 15 to Initial Registration Statement No. 333-85567, filed on or
about Aug. 19, 1999, is incorporated by reference.
By: /s/ Mary Ellyn Minenko
Mary Ellyn Minenko
<PAGE>
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT
This Post-Effective Amendment is comprised of the following papers and
documents:
The Cover Page.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Part C.
Other Information.
The signatures.
