<PAGE> 1
Registration Statement No. 333-71379
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811-8628
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Pre-Effective Amendment No. 1 to
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
And
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
POST-EFFECTIVE AMENDMENT NO. 12
CITICORP LIFE VARIABLE ANNUITY SEPARATE ACCOUNT
-----------------------------------------------------------------------
(Exact name of Registrant)
CITICORP LIFE INSURANCE COMPANY
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(Name of Depositor)
800 SILVER LAKE BOULEVARD, DOVER, DE 19904
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(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including area code: (800) 672-5000
--------------
CATHERINE S. MULHOLLAND
Citicorp Life Insurance Company
800 Silver Lake Blvd.
Dover, DE 19904
---------------------------
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable following
the effectiveness of the
Registration Statement
It is proposed that this filing will become effective (check appropriate box):
N/A immediately upon filing pursuant to paragraph (b) of Rule 485.
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N/A on ___________ pursuant to paragraph (b) of Rule 485.
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N/A 60 days after filing pursuant to paragraph (a)(1) of Rule 485.
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N/A on ___________ pursuant to paragraph (a)(1) of Rule 485.
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If appropriate, check the following box:
_____ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
<PAGE> 2
PART A
Information Required in a Prospectus
<PAGE> 3
CITIELITE ANNUITY PROSPECTUS
CITICORP LIFE VARIABLE ANNUITY
SEPARATE ACCOUNT
This prospectus describes CITIELITE, a flexible premium variable annuity
contract (the "Contract") issued by Citicorp Life Insurance Company (the
"Company," "we" or "our"). The Contract is available in connection with certain
retirement plans that qualify for special federal income tax treatment
("qualified Contracts") as well as those that do not qualify for such treatment
("nonqualified Contracts"). CitiElite may be issued as an individual Contract or
as a group Contract. In states where only group Contracts are available, you
will be issued a certificate summarizing the provisions of the group Contract.
For convenience, this prospectus refers to both Contracts and certificates as
"Contracts."
You can choose to have your purchase payments accumulate on a fixed and/or a
variable basis. Your contract value will vary daily to reflect the investment
experience of the subaccounts ("funding options") you select. The funding
options currently available are:
TRAVELERS HIGH YIELD BOND TRUST
TRAVELERS MONEY MARKET PORTFOLIO
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
Salomon Brothers Variable Capital Fund
Salomon Brothers Variable High Yield Bond Fund
Salomon Brothers Variable Investors Fund
Salomon Brothers Variable Total Return Fund
TEMPLETON VARIABLE PRODUCTS SERIES FUND
Franklin Small Cap Investments Fund Class II
Templeton International Fund Class II
THE TRAVELERS SERIES TRUST
Large Cap Portfolio (Fidelity sub-adviser)
MFS Mid Cap Growth Portfolio
MFS Research Portfolio
Travelers Quality Bond Portfolio
TRAVELERS SERIES FUND, INC.
AIM Capital Appreciation Portfolio
MFS Total Return Portfolio
Putnam Diversified Income Portfolio
VARIABLE ANNUITY PORTFOLIOS
CitiSelect VIP Folio 200
CitiSelect VIP Folio 300
CitiSelect VIP Folio 400
CitiSelect VIP Folio 500
CitiFunds Small Cap Growth VIP Fund
The Fixed Account is described in Appendix A.
The contracts and/or some of the funding options may not be available in all
states. THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT
PROSPECTUSES FOR THE FUNDING OPTIONS. THESE PROSPECTUSES SHOULD BE READ AND
RETAINED FOR FUTURE REFERENCE.
This prospectus provides the information that you should know before investing
in the Contract. You can receive additional information about Citicorp Life
Variable Annuity Separate Account (the "Separate Account") by requesting a copy
of the Statement of Additional Information ("SAI") dated , 1999.
The SAI has been filed with the Securities and Exchange Commission ("SEC") and
is incorporated by reference into this prospectus. To request a copy, write to
our administrative office, Citicorp Life Insurance Company, 800 Silver Lake
Blvd., P.O. Box 7031, Dover, Delaware, 19903, or call (800) 497-4857, or access
the SEC's Web Site (http://www.sec.gov). The Table of Contents of the SAI
appears in Appendix C of this prospectus.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OF ANY BANK, AND ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, OR ANY OTHER GOVERNMENT
AGENCY.
PROSPECTUS DATED , 1999
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<S> <C>
Index of Special Terms................ 2
Summary............................... 3
Fee Table............................. 6
The Annuity Contract.................. 7
Contract Owner Inquiries............ 8
Purchase Payments................... 8
Accumulation Units.................. 8
The Funding Options................. 8
Charges and Deductions................ 10
General............................. 10
Withdrawal Charge................... 11
Free Withdrawal Allowance........... 11
Administrative Charges.............. 12
Mortality and Expense Risk Charge... 12
Funding Option Expenses............. 12
Premium Tax......................... 12
Changes in Taxes Based Upon Premium
or Value......................... 12
Transfers............................. 12
Dollar Cost Averaging............... 13
Access to Your Money.................. 13
Systematic Withdrawals.............. 13
Loans............................... 14
Ownership Provisions.................. 14
Types of Ownership.................. 14
Beneficiary......................... 14
Annuitant........................... 14
Death Benefit......................... 15
Death Proceeds Before the Maturity
Date............................. 15
Payment of Proceeds................. 16
Death Proceeds After the Maturity
Date............................. 16
The Annuity Period.................... 16
Maturity Date....................... 16
Allocation of Annuity............... 17
Variable Annuity.................... 17
Fixed Annuity....................... 18
Payment Options....................... 18
Election of Options................. 18
Annuity Options..................... 18
Income Options...................... 19
Miscellaneous Contract Provisions..... 19
Right to Return..................... 19
Termination......................... 19
Required Reports.................... 20
Suspension of Payments.............. 20
Transfers of Contract Values to
Other Annuities.................. 20
The Separate Account.................. 20
Performance Information............. 20
Federal Tax Considerations............ 21
General Taxation of Annuities....... 21
Types of Contracts: Qualified or
Nonqualified..................... 21
Nonqualified Annuity Contracts...... 22
Qualified Annuity Contracts......... 22
Penalty Tax for Premature
Distributions.................... 22
Diversification Requirements for
Variable Annuities............... 22
Ownership of the Investments........ 23
Mandatory Distributions for
Qualified Plans.................. 23
Other Information..................... 23
The Insurance Company............... 23
Financial Statements................ 23
Year 2000 Compliance................ 23
Distribution of Variable Annuity
Contracts........................ 24
Conformity with State and Federal
Laws............................. 24
Voting Rights....................... 24
Legal Proceedings And Opinions...... 24
Appendix A: The Fixed Account......... A-1
Appendix B: Waiver of Withdrawal
Charge for Nursing Home
Confinement......................... B-1
Appendix C: Table of Contents of the
Statement of Additional
Information......................... C-1
</TABLE>
INDEX OF SPECIAL TERMS
The following terms are italicized throughout the prospectus. Refer to the page
listed for an explanation of each term.
<TABLE>
<S> <C>
Accumulation Unit..................... 8
Annuitant............................. 14
Annuity Payments...................... 16
Annuity Unit.......................... 8
Cash Surrender Value.................. 13
Contract Date......................... 8
Contract Owner (You, Your)............ 8
Contract Value........................ 8
Contract Year......................... 8
Fixed Account......................... A-1
Funding Option(s)..................... 8
Maturity Date......................... 16
Purchase Payment...................... 8
Written Request....................... 8
</TABLE>
2
<PAGE> 5
SUMMARY:
CITIELITE VARIABLE ANNUITY
THIS SUMMARY DETAILS SOME OF THE MORE IMPORTANT POINTS THAT YOU SHOULD KNOW AND
CONSIDER BEFORE PURCHASING THE CONTRACT. PLEASE READ THE ENTIRE PROSPECTUS
CAREFULLY.
CAN YOU GIVE ME A GENERAL DESCRIPTION OF THE VARIABLE ANNUITY CONTRACT? The
Contract offered by Citicorp Life is a variable annuity that is intended for
retirement savings or other long-term investment purposes. The Contract provides
a death benefit as well as guaranteed income options. Under a qualified
Contract, you can make one or more payments, as you choose, on a tax-deferred
basis. Under a nonqualified Contract, you can make one or more payments with
after-tax dollars. You direct your payment(s) to one or more of the variable
funding options, and/or to the Fixed Account. We guarantee money directed to the
Fixed Account as to principal and interest. The variable funding options are
designed to produce a higher rate of return than the Fixed Account; however,
this is not guaranteed. You may also lose money in the variable funding options.
The Contract, like all deferred variable annuity contracts, has two phases: the
accumulation phase and the payout phase. During the accumulation phase
generally, under a qualified contract, your pre-tax contributions accumulate on
a tax-deferred basis and are taxed as income when you make a withdrawal,
presumably when you are in a lower tax bracket. During the accumulation phase,
under a nonqualified contract, earnings on your after-tax contributions
accumulate on a tax-deferred basis and are taxed as income when you make a
withdrawal. The payout phase occurs when you begin receiving payments from your
Contract. The amount of money you accumulate in your Contract determines the
amount of income (annuity payments) you receive during the payout phase.
During the payout phase, you may chose to receive annuity payments from the
Fixed Account or the variable funding options. If you want to receive scheduled
payments from your annuity, you can choose from a number of annuity options or
income options.
Once you make an election of an annuity option and begin to receive payments, it
cannot be changed. During the payout phase, you have the same investment choices
you had during the accumulation phase. If amounts are directed to the variable
funding options, the dollar amount of your payments may increase or decrease.
WHO SHOULD PURCHASE THIS CONTRACT? The Contract is currently available for use
in connection with (1) individual nonqualified purchases; (2) rollovers from
Individual Retirement Annuities (IRAs); and (3) rollovers from other qualified
retirement plans. Qualified contracts include contracts qualifying under Section
401(a), 403(b), or 408(b) of the Internal Revenue Code of 1986, as amended.
You may purchase the Contract with an initial payment of at least $5,000, which
amount may be paid in one or more installments of at least $100 within the first
twelve months after the contract date. You may make additional payments of at
least $100 at any time during the accumulation phase.
IS THERE A RIGHT TO RETURN PERIOD? If you cancel the Contract within twenty
days after you receive it, you will receive a full refund of the Contract Value
(including charges). Where state law requires a longer right to return period,
or the return of purchase payments, the Company will comply. You bear the
investment risk during the right to return period; therefore, the Contract Value
returned may be greater or less than your purchase payment. If the Contract is
purchased as an Individual Retirement Annuity, and is returned within the first
seven days after delivery, your full purchase payment will be refunded; during
the remainder of the right to return period, the Contract Value (including
charges) will be refunded. The Contract Value will be determined at the close of
business on the day we receive a written request for a refund.
3
<PAGE> 6
WHAT TYPES OF INVESTMENT OPTIONS ARE AVAILABLE? You can direct your money into
the Fixed Account or any or all of the variable funding options shown on the
cover page. The funding options are described in the accompanying fund
prospectuses. Depending on market conditions, you may make or lose money in any
of these options.
The value of the Contract will vary depending upon the investment performance of
the funding options you choose. Past performance is not a guarantee of future
results. Performance information that predates the separate account is
considered "nonstandard" by the SEC. Such nonstandard performance is shown in
the Statement of Additional Information that you may request free of charge.
You can transfer between the variable funding options as frequently as you wish
without any current tax implications. Currently there is no charge for
transfers, nor a limit to the number of transfers allowed. The Company may
charge a fee for any transfer requests, or may limit the number of transfers
allowed. The Company, at the minimum, would always allow one transfer every six
months. Please refer to Appendix A for information regarding transfers between
the Fixed Account and variable funding options.
WHAT EXPENSES WILL BE ASSESSED UNDER THE CONTRACT? The Contract has insurance
features and investment features, and there are costs related to each. The
Company deducts an annual administrative charge of $30. The annual insurance
charge is 1.25% of the amounts you direct to the funding options, and the
sub-account administrative charge is .15% annually. Each funding option also
charges for management and other expenses. Please refer to the Fee Table for
more information about the charges.
We may deduct a withdrawal charge equal to a percentage of the purchase payments
withdrawn from the Contract. If you withdraw all amounts under the contract, or
if you begin receiving annuity payments, the Company may be required by your
state to deduct a premium tax.
HOW WILL MY CONTRIBUTIONS AND WITHDRAWALS BE TAXED? Generally, the payments you
make to a qualified Contract during the accumulation phase are made with
before-tax dollars. You will be taxed on your purchase payments and on any
earnings when you make a withdrawal or begin receiving annuity payments. Under a
nonqualified Contract, payments to the Contract are made with after-tax dollars,
and any earnings will accumulate tax-deferred. You will be taxed on these
earnings when they are withdrawn from the Contract.
For owners of qualified Contracts, if you reach a certain age, you may be
required by federal tax laws to begin receiving payments from your annuity or
risk paying a penalty tax. In those cases, we can calculate and pay you the
minimum required distribution amounts. If you are younger than 59 1/2 when you
take money out, you may be charged a 10% federal penalty tax on the amount
withdrawn.
HOW MAY I ACCESS MY MONEY? You can take withdrawals any time during the
accumulation phase. A withdrawal charge may apply. The amount of the charge
depends on a number of factors, including the length of time since the purchase
payment was made (7% maximum, gradually decreasing to 0% for payments held by
the Company for 8 years or more). During the first contract year, you may
withdraw up to 15% of the initial purchase payment without a withdrawal charge.
After the first contract year, you may withdraw up to 15% of the contract value
(as of the end of the previous contract year) without a withdrawal charge. Of
course, you may also have to pay income taxes and a tax penalty on taxable
amounts you withdraw.
WHAT IS THE DEATH BENEFIT UNDER THE CONTRACT? The death benefit applies upon
the first death of the owner, joint owner or annuitant. Assuming you are the
annuitant, if you die before you move to the payout phase, the person you have
chosen as your beneficiary will receive a death benefit. The death benefit paid
depends on your age at the time of your death and your age when the contract was
issued. The death benefit value is calculated at the close of the business day
on which the Company's Administrative Office receives due proof of death and
written distribution instructions. Please refer to the Death Benefit section in
the prospectus for details.
4
<PAGE> 7
ARE THERE ANY ADDITIONAL FEATURES? This Contract has other features you may be
interested in. These include:
DOLLAR COST AVERAGING. This is a program that allows you to invest a fixed
amount of money in funding options each month, theoretically giving you a
lower average cost per unit over time than a single one-time purchase.
Dollar Cost Averaging requires regular investments regardless of
fluctuating price levels and does not guarantee profits or prevent losses
in a declining market. Potential investors should consider their financial
ability to continue purchases through periods of low price levels.
SYSTEMATIC WITHDRAWAL OPTION. Before the maturity date, you can arrange to
have money sent to you at set intervals throughout the year. Of course any
applicable income and penalty taxes will apply on amounts withdrawn.
AUTOMATIC REBALANCING. You may elect to have the Company periodically
reallocate the values in your contract to match your original (or your
latest) funding option allocation request.
5
<PAGE> 8
FEE TABLE
- --------------------------------------------------------------------------------
CONTRACT OWNER TRANSACTION EXPENSES
<TABLE>
<S> <C>
WITHDRAWAL CHARGE (as a percentage of purchase payments
withdrawn):
</TABLE>
<TABLE>
<CAPTION>
LENGTH OF TIME FROM
PURCHASE PAYMENT
(NUMBER OF YEARS) CHARGE
<S> <C>
0-1 7%
1-2 7%
2-3 7%
3-4 6%
4-5 5%
5-6 4%
6-7 3%
7 and over 0%
</TABLE>
<TABLE>
<S> <C>
ANNUAL CONTRACT ADMINISTRATIVE CHARGE: $30
</TABLE>
<TABLE>
<S> <C>
ANNUAL SEPARATE ACCOUNT CHARGES:
(as a percentage of the average daily net assets of the
Separate Account)
Mortality and Expense Risk Charge..................... 1.25%
Administrative Expense Charge......................... .15%
-----
Total Separate Account Charges.................... 1.40%
</TABLE>
FUNDING OPTION EXPENSES:
(as a percentage of average daily net assets of the funding option as of
December 31, 1998, unless otherwise noted.)
<TABLE>
<CAPTION>
TOTAL ANNUAL
OPERATING
OTHER EXPENSES EXPENSES
MANAGEMENT (AFTER (AFTER
PORTFOLIO FEE 12B-1 FEE REIMBURSEMENT) REIMBURSEMENT)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRAVELERS HIGH YIELD BOND TRUST.......................... 0.50% 0.32% 0.82%
TRAVELERS MONEY MARKET PORTFOLIO......................... 0.32% 0.08% 0.40%(1)
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
Salomon Brothers Variable Capital Fund............... 0.85% 0.15% 1.00%(2)
Salomon Brothers Variable High Yield Bond Fund....... 0.75% 0.25% 1.00%(2)
Salomon Brothers Variable Investors Fund............. 0.70% 0.30% 1.00%(2)
Salomon Brothers Variable Total Return Fund.......... 0.80% 0.20% 1.00%(2)
TEMPLETON VARIABLE PRODUCTS SERIES FUND
Franklin Small Cap Investments Fund Class II......... 0.75% 0.25% 0.25% 1.25%(3)
Templeton International Fund Class II................ 0.69% 0.25% 0.17% 1.11%(4)
THE TRAVELERS SERIES TRUST
Large Cap Portfolio (Fidelity sub-adviser)........... 0.75% 0.20% 0.95%(5)
MFS Mid Cap Growth Portfolio......................... 0.80% 0.20% 1.00%(6)
MFS Research Portfolio............................... 0.80% 0.20% 1.00%(6)
Travelers Quality Bond Portfolio..................... 0.32% 0.31% 0.63%
TRAVELERS SERIES FUND, INC.
AIM Capital Appreciation Portfolio................... 0.80% 0.05% 0.85%(7)
MFS Total Return Portfolio........................... 0.80% 0.04% 0.84%(7)
Putnam Diversified Income Portfolio.................. 0.75% 0.12% 0.87%(7)
VARIABLE ANNUITY PORTFOLIOS
CitiSelect VIP Folio 200............................. 0.75% 0.20% 0.95%(8)
CitiSelect VIP Folio 300............................. 0.75% 0.20% 0.95%(8)
CitiSelect VIP Folio 400............................. 0.75% 0.50% 1.25%(8)
CitiSelect VIP Folio 500............................. 0.75% 0.50% 1.25%(8)
CitiFunds Small Cap Growth VIP Fund.................. 0.75% 0.15% 0.90%(8)
</TABLE>
NOTES:
The purpose of the Fee Table is to assist contract owners in understanding the
various costs and expenses that a contract owner will bear, directly or
indirectly. See "Charges and Deductions" in this prospectus for additional
information. Expenses shown do not include premium taxes, which may be
applicable. "Other Expenses" include operating costs of the fund. These expenses
are reflected in each funding option's net asset value and are not deducted from
the account value under the Contract.
6
<PAGE> 9
(1) Other Expenses have been restated to reflect the current expense
reimbursement arrangement with The Travelers Insurance Company. Travelers
has agreed to reimburse the Fund for the amount by which its aggregate
expenses (including the management fee, but excluding brokerage
commissions, interest charges and taxes) exceeds 0.40%. Without such
arrangement, Total Annual Operating Expenses would have been 0.65% for the
TRAVELERS MONEY MARKET PORTFOLIO.
(2) SBAM has waived all of its Management Fees for the following Salomon
Brothers Funds for the period ended December 31, 1998. If such fees were
not waived or expenses reimbursed, the actual annualized Total Annual
Operating Expenses for the INVESTORS FUND, the HIGH YIELD BOND FUND, the
CAPITAL FUND, and the TOTAL RETURN FUND would have been 2.07%, 2.04%,
3.26%, and 2.90%, respectively.
(3) Figures reflect expenses from the Fund's inception on May 1, 1998 and are
annualized. The Investment Manager agreed in advance to limit management
fees and make certain payments to reduce the Fund expenses as necessary so
that the Total Fund Operating Expenses did not exceed 1.25% of the Fund's
Class 2 net assets in 1998. Without such arrangement, the annualized Total
Annual Operating Expenses would have been 2.00%. The Investment Manager has
agreed to continue this arrangement through 1999. Class 2 of the FRANKLIN
SMALL CAP INVESTMENTS FUND has a distribution plan or "Rule 12b-1 plan".
(4) Class 2 of the TEMPLETON INTERNATIONAL FUND has a distribution plan or
"Rule 12b-1 plan".
(5) Other Expenses reflect the current expense reimbursement arrangement with
Travelers where Travelers has agreed to reimburse the Portfolio for the
amount by which their aggregate expenses (including management fees, but
excluding brokerage commissions, interest charges and taxes) exceeds 0.95%.
Without such arrangements, the annualized Total Annual Operating Expenses
for the Portfolio would have been 1.23% for the LARGE CAP PORTFOLIO.
(6) Travelers Insurance has agreed to reimburse the MFS MID CAP GROWTH
PORTFOLIO, and the MFS RESEARCH PORTFOLIOS for expenses for the period
ended December 31, 1998. If such expenses were not reimbursed, the actual
annualized Total Annual Operating Expenses would have been 1.62% and 1.37%
respectively.
(7) Other expenses are as of October 31, 1998 (the Fund's fiscal year end).
There were no fees waived or expenses reimbursed for these funds in 1998.
(8) Citicorp Life Insurance Company has agreed to reimburse CitiSelect VIP 200,
CitiSelect VIP 300, CitiSelect VIP 400, CitiSelect VIP 500, and the
CitiFunds Small Cap Growth VIP Portfolio for expenses for the period ended
December 31, 1998. If such expenses were not reimbursed, the actual
annualized Total Annual Operating Expenses would have been 4.30%, 3.23%,
4.16%, 5.53%, and 5.74% respectively.
EXAMPLE*
Assuming a 5% annual return, a $1,000 investment would be subject to the
following expenses:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
IF CONTRACT IS SURRENDERED AT THE IF CONTRACT IS NOT SURRENDERED OR
END OF PERIOD SHOWN: IS ANNUITIZED AT END OF PERIOD SHOWN:
------------------------------------- -------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
TRAVELERS HIGH YIELD BOND TRUST 94 142 174 266 24 72 124 266
TRAVELERS MONEY MARKET PORTFOLIO 89 130 153 222 19 60 103 222
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
Salomon Brothers Variable Capital Fund 95 148 183 284 25 78 133 284
Salomon Brothers Variable High Yield Bond Fund 95 148 183 284 25 78 133 284
Salomon Brothers Variable Investors Fund 95 148 183 284 25 78 133 284
Salomon Brothers Variable Total Return Fund 95 148 183 284 25 78 133 284
TEMPLETON VARIABLE PRODUCTS SERIES FUND
Franklin Small Cap Investments Fund Class II 98 155 195 308 28 85 145 308
Templeton International Fund Class II 96 151 189 294 26 81 139 294
THE TRAVELERS SERIES TRUST
Large Cap Portfolio (Fidelity sub-adviser) 95 146 181 279 25 76 131 279
MFS Mid Cap Growth Portfolio 95 148 183 284 25 78 133 284
MFS Research Portfolio 95 148 183 284 25 78 133 284
Travelers Quality Bond Portfolio 92 137 164 246 22 67 114 246
TRAVELERS SERIES FUND, INC.
AIM Capital Appreciation Portfolio 94 143 176 269 24 73 126 269
MFS Total Return Portfolio 94 143 175 268 24 73 125 268
Putnam Diversified Income Portfolio 94 144 177 271 24 74 127 271
VARIABLE ANNUITY PORTFOLIOS
CitiSelect VIP Folio 200 95 146 181 279 25 76 131 279
CitiSelect VIP Folio 300 95 146 181 279 25 76 131 279
CitiSelect VIP Folio 400 98 155 195 308 28 85 145 308
CitiSelect VIP Folio 500 98 155 195 308 28 85 145 308
CitiFunds Small Cap Growth VIP Fund 94 145 178 274 24 75 128 274
</TABLE>
* THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THIS
EXAMPLE REFLECTS THE $30 ANNUAL CONTRACT ADMINISTRATIVE CHARGE AS AN ANNUAL
CHARGE OF .030%.
7
<PAGE> 10
THE ANNUITY CONTRACT
- --------------------------------------------------------------------------------
CitiElite is a contract between the contract owner ("you"), and Citicorp Life
Insurance Company (called "us" or the "Company"). Under this contract, you make
purchase payments to us and we credit them to your Contract. The Company
promises to pay you an income, in the form of annuity payments, beginning on a
future date that you choose, the maturity date. The purchase payments accumulate
tax deferred in the funding option(s) of your choice. The contract owner assumes
the risk of gain or loss according to the performance of the funding options.
The contract value is the amount of purchase payments, plus or minus any
investment experience or interest. The contract value also reflects all
surrenders made and charges deducted. There is generally no guarantee that at
the maturity date the contract value will equal or exceed the total purchase
payments made under the Contract. The date the contract and its benefits become
effective is referred to as the contract date. Each 12-month period following
this contract date is called a contract year.
Certain changes and elections must be made in writing to the Company. Where the
term "written request" is used, it means that written information must be sent
to the Company's Administrative Office in a form and content satisfactory to us.
CONTRACT OWNER INQUIRIES
If you have any questions about the Contract, call the Company's Administrative
Office at 1-800-497-4857.
PURCHASE PAYMENTS
The initial purchase payment must be at least $5,000. This amount may be paid in
one or more installments within the first twelve months after the contract date.
Additional payments of at least $100 may be made under the Contract at any time.
We reserve the right to waive the minimum purchase payment requirement. Purchase
payments over $1,000,000 may be made with our prior consent.
We will apply the initial purchase payment within two business days after we
receive it at our Administrative Office in good order. Subsequent purchase
payments received in good order will be credited to a Contract within one
business day. Our business day ends when the New York Stock Exchange closes,
usually 4:00 p.m. Eastern time.
ACCUMULATION UNITS
An accumulation unit is used to calculate the value of a Contract. An
accumulation unit works like a share of a mutual fund. Each funding option has a
corresponding accumulation unit value. The accumulation units are valued each
business day and may increase or decrease from day to day. The number of
accumulation units we will credit to your Contract once we receive a purchase
payment is determined by dividing the amount directed to each funding option by
the value of the accumulation unit. We calculate the value of an accumulation
unit for each funding option each day after the New York Stock Exchange closes.
After the value is calculated, your Contract is credited. During the annuity
period (i.e., after the maturity date), you are credited with annuity units.
THE FUNDING OPTIONS
You choose which of the following funding options to have your purchase payments
allocated to. These funding options are subsections of the Separate Account
which invests in the underlying mutual funds. You are not investing directly in
the mutual funds. You will find detailed information about the options and their
inherent risks in the current prospectuses for the funding options which must
accompany this prospectus. Since each option has varying degrees of risk, please
read the prospectuses carefully before investing. Additional copies of the
prospectuses may be obtained by contacting your registered representative or by
calling 1-800-497-4857.
If any of the funding options become unavailable for allocating purchase
payments, or if we believe that further investment in a funding option is
inappropriate for the purposes of the Contract, we may substitute another
funding option. However, we will not make any substitutions without notifying
you and obtaining any applicable state and SEC approval. From time to time we
may make new funding options available.
8
<PAGE> 11
The current funding options are listed below, along with their investment
advisers and any subadviser:
<TABLE>
<CAPTION>
FUNDING OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
High Yield Bond Trust Generous income. The assets of the High Yield Bond Travelers Asset Management
Trust will be invested in bonds which, as a class, International Corporation
sell at discounts from par value and are typically ("TAMIC")
high risk securities.
Money Market Portfolio Seeks high current income from short-term money TAMIC
market instruments while preserving capital and
maintaining a high degree of liquidity.
SALOMON BROTHERS VARIABLE
SERIES FUND, INC.
Salomon Brothers Variable Seeks capital appreciation, primarily through Salomon Brothers Asset
Capital Fund investments in common stocks which are believed to Management ("SBAM")
have above-average price appreciation potential
and which may involve above-average risk.
Salomon Brothers Variable Seeks to maximize current income, and, SBAM
High Yield Bond Fund secondarily, to seek capital appreciation through
investments in medium or lower rating categories.
Salomon Brothers Variable Long-term growth of capital. Current income is a SBAM
Investors Fund secondary objective.
Salomon Brothers Variable Seeks above average income (compared to a SBAM
Total Return Fund portfolio invested entirely in equity securities).
Secondarily seeks opportunities for growth of
capital and income.
TEMPLETON VARIABLE PRODUCTS
SERIES FUND
Franklin Small Cap Seeks long-term capital growth. The Fund seeks to Franklin Advisers, Inc.
Investments Fund (Class II) accomplish its objective by investing primarily
(normally at least 65% of its assets) in equity
securities of smaller capitalization growth
companies.
Templeton International Seeks long-term capital growth through a flexible Templeton Investment
Fund (Class II) policy of investing in stocks and debt obligations Counsel, Inc.
of companies and governments outside the United
States. Any income realized will be incidental.
THE TRAVELERS SERIES TRUST
Large Cap Portfolio Seeks long-term growth of capital by investing TAMIC
primarily in equity securities of companies with Subadviser: Fidelity Management
large market capitalizations. & Research Company
MFS Mid Cap Growth Seeks to obtain long term growth of capital by TAMIC
Portfolio investing, under normal market conditions, at Subadviser: Massachusetts
least 65% of its total assets in equity securities Financial Services Company
of companies with medium market capitalization ("MFS")
which the investment adviser believes have
above-average growth potential.
MFS Research Portfolio Seeks to provide long-term growth of capital and TAMIC
future income by investing in equity securities of Subadviser: MFS
companies believed to possess better than average
prospects for long-term growth.
Travelers Quality Bond Seeks current income, moderate capital volatility TAMIC
Portfolio and total return.
TRAVELERS SERIES FUND, INC.
AIM Capital Appreciation Seeks capital appreciation by investing Travelers Investment Advisers
Portfolio principally in common stock, with emphasis on ("TIA")
medium-sized and smaller emerging growth Subadviser: AIM Capital
companies. Management, Inc.
MFS Total Return Portfolio Seeks to obtain above-average income (compared to TIA
a portfolio entirely invested in equity Subadviser: MFS
securities) consistent with the prudent employment
of capital. Generally, at least 40% of the
Portfolio's assets will be invested in equity
securities.
Putnam Diversified Income Seeks high current income consistent with TIA
Portfolio of the Travelers preservation of capital by allocating its
Series Fund Inc. investments among the following three sectors of
the fixed-income securities markets: a U.S.
Government Sector, a High Yield Sector, and an
International Sector.
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
FUNDING OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
VARIABLE ANNUITY PORTFOLIOS
CitiSelect VIP Folio 200 This portfolio seeks as high a total return over Citibank, N.A.
time as is consistent with a primary emphasis on a
combination of fixed income and money market
securities and a secondary emphasis on equity
securities. Under normal circumstances, 20%-40% of
the portfolio's assets will be invested in equity
securities and 60%-80% of the portfolio's assets
will be invested in fixed income securities.
CitiSelect VIP Folio 300 This portfolio seeks as high a total return over Citibank, N.A.
time as is consistent with a balanced emphasis
equity and fixed income securities. Under normal
circumstances, 40%-60% of the portfolio's assets
will be invested in equity securities and 40%-60%
of the portfolio's assets will be invested in
fixed income securities.
CitiSelect VIP Folio 400 This portfolio seeks as high a total return over Citibank, N.A.
time as is consistent with a primary emphasis on
equity securities and a secondary emphasis on
fixed income securities. Under normal
circumstances, 60%-80% of the portfolio's assets
will be invested in equity securities and 20%-40%
of the portfolio's assets will be invested in
fixed income securities.
CitiSelect VIP Folio 500 This portfolio seeks as high a total return over Citibank, N.A.
time as is consistent with a dominant emphasis on
equity securities and a small allocation to fixed
income. Under normal circumstances, 75%-100% of
the portfolio's assets will be invested in equity
securities and 0%-25% of the portfolio's assets
will be invested in fixed income securities.
CitiFunds Small Cap Growth This fund seeks long-term capital growth by Citibank, N.A.
VIP Portfolio investing in a diversified portfolio of equity
securities of U.S. companies with market
capitalizations below the top 1,000 stocks of the
equity market. Under normal circumstances, at
least 65% of the fund's total assets will be
invested in such companies. Dividend income, if
any, is incidental to this investment objective.
</TABLE>
CHARGES AND DEDUCTIONS
- --------------------------------------------------------------------------------
GENERAL
We deduct the charges described below. The charges are for the service and
benefits we provide, costs and expenses we incur, and risks we assume under the
Contracts. Services and benefits we provide include:
- the ability for you to make withdrawals and surrenders under the
Contracts;
- the death benefit paid on the death of the contract owner, annuitant, or
first of the joint contract owners,
- the available funding options and related programs (including dollar-cost
averaging, portfolio rebalancing, and systematic withdrawal programs);
- administration of the annuity options available under the Contracts; and
- the distribution of various reports to contract owners.
Costs and expenses we incur include:
- losses associated with various overhead and other expenses associated
with providing the services and benefits provided by the Contracts,
- sales and marketing expenses, and
- other costs of doing business.
Risks we assume include:
- risks that annuitants may live longer than estimated when the annuity
factors under the Contracts were established,
- that the amount of the death benefit will be greater than the contract
value, and
10
<PAGE> 13
- that the costs of providing the services and benefits under the Contracts
will exceed the charges deducted.
We may also deduct a charge for taxes.
Unless otherwise specified, charges are deducted proportionately from all
funding options in which you are invested.
We may reduce or eliminate the withdrawal charge, the administrative charges,
the mortality and expense risk charge, and the distribution charge under the
Contract when certain sales or administration of the Contract result in savings
or reduced expenses and/or risks. For certain trusts, we may change the order in
which purchase payments and earnings are withdrawn in order to determine the
withdrawal charge. In no event will we reduce or eliminate the withdrawal charge
or the administrative charge where such reduction or elimination would be
unfairly discriminatory to any person.
WITHDRAWAL CHARGE
We do not deduct a sales charge from purchase payments when they are applied
under the Contract. However, a withdrawal charge will be deducted if any or all
of the contract value is withdrawn during the first seven years following a
purchase payment. The length of time from when we receive the purchase payment
to the time of withdrawal determines the amount of the charge. We will deduct
the withdrawal charge from the total amount requested unless you instruct us to
deduct it from the remaining contract value.
The withdrawal charge is equal to a percentage of purchase payments withdrawn
from the Contract and is calculated as follows:
<TABLE>
<CAPTION>
LENGTH OF TIME FROM
PURCHASE PAYMENT WITHDRAWAL
(NUMBER OF YEARS) CHARGE
<S> <C>
0-1 7%
1-2 7%
2-3 7%
3-4 6%
4-5 5%
5-6 4%
6-7 3%
7 and over 0%
</TABLE>
For purposes of the withdrawal charge calculation, we will make withdrawals in
the following order:
(a) from any purchase payments to which no withdrawal charge applies;
(b) from any remaining free withdrawal allowance (as described below)
after reduction by the amount of (a);
(c) from any purchase payments to which withdrawal charges apply (on a
first-in, first-out basis); and, finally
(d) from any Contract earnings.
NOTE: Any free withdrawals taken will not reduce purchase payments still
subject to a withdrawal charge.
We will not deduct a withdrawal charge (1) from payments we make due to the
distribution of death proceeds; or (2) upon election of a lifetime annuity
payout taken after the first Contract year or; (3) due to a minimum distribution
under our minimum distribution rules then in effect; or (4) if the annuitant is
confined to an Eligible Nursing Home as described in Appendix B.
FREE WITHDRAWAL ALLOWANCE
You may withdraw up to 15% of the contract value annually, without a withdrawal
charge. (This includes any purchase payments no longer subject to a withdrawal
charge.) For the first contract year, the available amount is 15% of the initial
purchase payment. Beginning in the second contract year, we calculate the
available withdrawal amount as of the end of the previous contract
11
<PAGE> 14
year. The free withdrawal allowance applies to any partial withdrawals and to
full withdrawals, except those transferred directly to annuity contracts issued
by other financial institutions. In Washington state, the free withdrawal
provision applies to all withdrawals.
ADMINISTRATIVE CHARGES
We deduct a Contract administrative charge of $30 annually on the fourth Friday
of each August. This charge compensates us for expenses incurred in establishing
and maintaining the Contract. The charge is deducted from the contract value by
canceling accumulation units from each funding option on a pro rata basis. No
contract administrative charge will be deducted from the Fixed Account. For the
first year, this charge will be prorated (i.e. calculated) from the date of
purchase. A prorated charge will also be made if the Contract is completely
withdrawn or terminated. We will not deduct a contract administrative charge:
(1) from the distribution of death proceeds; or (2) after an annuity payout has
begun.
An administrative expense charge (sometimes called "sub-account administrative
charge") is deducted on each business day from amounts allocated to the variable
funding options. This charge compensates us for certain related administrative
and operating expenses. The charge equals, on an annual basis, 0.15% of the
daily net asset value allocated to each of the variable funding options.
MORTALITY AND EXPENSE RISK CHARGE
Each business day, the Company deducts a mortality and expense risk ("m & e")
charge from amounts held in the variable funding options. The deduction is
reflected in our calculation of accumulation and annuity unit values. This
charge equals, on an annual basis, 1.25% of the amounts held in each funding
option. We reserve the right to lower this charge at any time.
FUNDING OPTION EXPENSES
The charges and expenses of the funding options are summarized in the fee table
and are described in the accompanying prospectuses.
PREMIUM TAX
Certain state and local governments charge premium taxes ranging from 0% to 5%,
depending upon jurisdiction. The Company is responsible for paying these taxes
and will determine the method used to recover premium tax expenses incurred.
Where required, the Company will deduct any applicable premium taxes from the
contract value either upon death, surrender, annuitization, or at the time
purchase payments are made to the Contract, but no earlier than when the Company
has a tax liability under state law.
CHANGES IN TAXES BASED UPON PREMIUM OR VALUE
If there is any change in a law assessing taxes against the Company based upon
premiums, contract gains or value of the contract, we reserve the right to
charge you proportionately for this tax.
TRANSFERS
- --------------------------------------------------------------------------------
Up to 30 days before the maturity date, you may transfer all or part of the
contract value between funding options. There are no charges or restrictions on
the amount or frequency of transfers currently; however, we reserve the right to
charge a fee for any transfer request, and to limit the number of transfers to
one in any six-month period. Since different funding options have different
expenses, a transfer of contract values from one funding option to another could
result in your investment becoming subject to higher or lower expenses. After
the maturity date, you may make transfers between funding options only with our
consent. Please refer to Appendix A for information regarding transfers between
the Fixed Account and the variable funding options.
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<PAGE> 15
DOLLAR COST AVERAGING
Dollar cost averaging (or "automated transfers") allows you to transfer a set
dollar amount to other funding options on a monthly or quarterly basis so that
more accumulation units are purchased in a funding option if the value per unit
is low and less accumulation units are purchased if the value per unit is high.
Therefore, a lower-than-average cost per unit may be achieved over the long run.
You may elect automated transfers through written request or other method
acceptable to the Company. You must have a minimum total contract value of
$5,000 to enroll in the Dollar Cost Averaging program. The minimum amount that
may be transferred through this program is $100.
You may establish automated transfers of contract values from the Fixed Account,
subject to certain restrictions. Automated transfers from the Fixed Account may
not deplete your Fixed Account Value in less than twelve months from your
enrollment in the Dollar Cost Averaging program.
You may start or stop participation in the Dollar Cost Averaging program at any
time, but you must give the Company at least 30 days' notice to change any
automated transfer instructions that are currently in place. All provisions and
terms of the Contract apply to automated transfers, including provisions
relating to the transfer of money between investment options. We reserve the
right to suspend or modify transfer privileges at any time and to assess a
processing fee for this service.
ACCESS TO YOUR MONEY
- --------------------------------------------------------------------------------
Any time before the maturity date, you may redeem all or any portion of the cash
surrender value, that is, the contract value, less any withdrawal charge,
outstanding loans and any premium tax not previously deducted. You must submit a
written request specifying the fixed or variable funding option(s) from which
amounts are to be withdrawn. If no funding options are specified, the withdrawal
will be made on a pro rata basis. The cash surrender value will be determined as
of the close of business after we receive your surrender request at the
Administrative Office. The cash surrender value may be more or less than the
purchase payments made depending on the contract value at the time of surrender.
After the maturity date, we will permit withdrawals only if you have elected an
Income Option with variable payments. In that case, you may elect to receive a
lump sum equal to the commuted balance of the remaining variable payments due,
less any applicable withdrawal charge.
We may defer payment of any cash surrender value for up to seven days after the
written request is received in good order. We cannot process requests for
withdrawal that are not in good order. We will contact you if there is a
deficiency causing a delay and will advise what is needed to act upon the
withdrawal request.
SYSTEMATIC WITHDRAWALS
Beginning in the first contract year, and before the maturity date, you may
choose to withdraw a specified dollar amount (at least $100) on a monthly,
quarterly, semiannual or annual basis. Any applicable withdrawal charges (on
amounts in excess of the free withdrawal allowance) and any applicable premium
taxes will be deducted. To elect systematic withdrawals, you must have a
contract value of at least $15,000 and you must make the election on the form
provided by the Company. We will surrender accumulation units pro rata from all
funding options in which you have an interest, unless you instruct us otherwise.
You may begin or discontinue systematic withdrawals at any time by notifying us
in writing, but at least 30 days' notice must be given to change any systematic
withdrawal instructions that are currently in place.
We reserve the right to discontinue offering systematic withdrawals or to assess
a processing fee for this service upon 30 days' written notice to contract
owners (where allowed by state law).
Each systematic withdrawal is subject to federal income taxes on the taxable
portion. In addition, a 10% federal penalty tax may be assessed on systematic
withdrawals if the contract owner is under
13
<PAGE> 16
age 59 1/2. You should consult with your tax adviser regarding the tax
consequences of systematic withdrawals.
LOANS
Loans may be available under your contract. If available, all loan provisions
are described in your contract or loan agreement.
OWNERSHIP PROVISIONS
- --------------------------------------------------------------------------------
TYPES OF OWNERSHIP
Contract Owner ("you"). The Contract belongs to the contract owner named in the
Contract (on the Specifications page), or to any other person to whom the
contract is subsequently assigned. An assignment of ownership or a collateral
assignment may be made only for nonqualified contracts. You have sole power
during the annuitant's lifetime to exercise any rights and to receive all
benefits given in the contract provided you have not named an irrevocable
beneficiary and provided the Contract is not assigned.
You receive all payments while the annuitant is alive unless you direct them to
an alternate recipient. An alternate recipient does not become the contract
owner.
Joint Owner. For nonqualified contracts only, joint owners (i.e., spouses) may
be named in a written request before the contract is in effect. Joint owners may
independently exercise transfers allowed under the Contract. All other rights of
ownership must be exercised by both owners. Joint owners own equal shares of any
benefits accruing or payments made to them. All rights of a joint owner end at
death if the other joint owner survives. If the first joint owner to die is also
the annuitant, the death benefit will be paid to the beneficiary. If the first
joint owner to die is not the annuitant, the entire interest under the contract
will pass to the surviving joint owner.
BENEFICIARY
You name the beneficiary in a written request. The beneficiary has the right to
receive any remaining contractual benefits upon the death of the annuitant or
the contract owner. If more than one beneficiary survives the annuitant, they
will share equally in benefits unless the Company receives other instructions,
by written request before the death of the annuitant or contract owner.
With nonqualified contracts, as discussed under "Death Benefit," the beneficiary
named in the contract may differ from the designated beneficiary. (For example,
a designated beneficiary may be the joint owner.) In such cases, the designated
beneficiary receives the contract benefits (rather than the beneficiary) upon
your death.
Unless an irrevocable beneficiary has been named, you have the right to change
any beneficiary by written request during the lifetime of the annuitant and
while the Contract continues.
ANNUITANT
The annuitant is designated in the Contract (on the Specifications page), and is
the individual on whose life the maturity date and the amount of the monthly
annuity payments depend. The annuitant may not be changed after the contract is
in effect.
For nonqualified Contracts only, where the owner and annuitant are not the same
person, the contract owner may also name one individual as a contingent
annuitant by written request before the Contract becomes effective. If the
annuitant dies before the maturity date, while the owner is still living and a
contingent annuitant has been named, the contingent annuitant becomes the
annuitant, and the contract continues. However, if the annuitant who is also the
owner dies before the maturity date, the death benefit is paid to the
beneficiary. The contingent annuitant does not become the annuitant and is not
entitled to receive any contract benefits. A contingent annuitant may not be
changed, deleted or added after the Contract becomes effective.
14
<PAGE> 17
DEATH BENEFIT
- --------------------------------------------------------------------------------
Before the maturity date, a death benefit is payable to the beneficiary when
either the annuitant, the contract owner or the first of joint owners dies. The
death benefit is calculated as of the close of the business day on which the
Company's Administrative Office received due proof of death and written payment
instructions (the death report date).
DEATH PROCEEDS BEFORE THE MATURITY DATE
WHERE ANNUITANT WAS YOUNGER THAN AGE 68 ON THE CONTRACT DATE:
The death benefit payable will be the greatest of (1), (2) or (3) below, less
any applicable premium tax and outstanding loans:
(1) the Contract Value;
(2) the total Purchase Payments made under the Contract less any partial
surrenders; or
(3) the Step-Up Value, if any (as described below).
We must be notified no later than six months from the date of death in order for
Us to make payment of proceeds as described above. If we receive the
notification more than six months after the date of death, the Death Benefit
payable will be the Contract Value on the Death Report Date less any applicable
premium tax and outstanding loans.
WHERE ANNUITANT WAS AGE 68 THROUGH 75 ON THE CONTRACT DATE:
The death benefit payable will be the greatest of (1), (2) or (3) below, less
any applicable premium tax, and outstanding loans:
(1) the Contract Value;
(2) the total Purchase Payments made under the Contract less any partial
surrenders; or
(3) the Step-Up Value (as described below) associated with the seventh
Contract Date Anniversary.
We must be notified no later than six months from the date of death in order for
Us to make payment of proceeds as described above. When permitted by state law,
if we receive notification more than six months after the date of death, the
Death Benefit payable will be the Contract Value on the Death Report Date less
any applicable premium tax and outstanding loans.
WHERE ANNUITANT WAS AGE 76 OR OLDER ON THE CONTRACT DATE:
The death benefit payable will be the Contract Value on the Death Report Date,
less any applicable premium tax and any outstanding loans.
STEP-UP VALUE:
A Step-Up Value will be established on the seventh Contract Date anniversary.
The Step-Up Value will equal the Contract Value on that anniversary. For
Contracts where the Annuitant was younger than 68 on the Contract Date, the
Step-Up Value will be recalculated on each anniversary until the Annuitant's
76th birthday. If the Contract Value on the anniversary is greater than the
Step-Up Value, the Step-Up Value will be reset to equal the Contract Value on
that date. If the Step-Up Value is greater than the Contract Value, the Step-Up
Value remains unchanged. For all contracts, each time a Purchase Payment is made
we will increase the Step-Up Value by the amount of the payment and, when a
partial surrender is taken, we will reduce the Step-Up Value by a Partial
Surrender Reduction (as described below).
15
<PAGE> 18
The Partial Surrender Reduction equals:
(1) the Step-Up Value immediately before the reduction for the partial
surrender, multiplied by
(2) the amount of the partial surrender divided by
(3) the Contract Value immediately before the partial surrender.
PAYMENT OF PROCEEDS
The process of paying death benefit proceeds under various situations is
described below. Generally, the person(s) receiving the benefit may request that
the proceeds be paid in a lump sum, or be applied to one of the settlement
options available under the Contract.
DEATH OF ANNUITANT WHO IS THE CONTRACT OWNER. The Company will pay the proceeds
to the beneficiary(ies), or if none, to the contract owner's estate.
Under a nonqualified contract, the death benefit proceeds must be distributed to
the beneficiary within five years of the contract owner's death. Or, the
beneficiary may elect to receive payments from an annuity which begins within
one year of the contract owner's death and is payable over the life of the
beneficiary over a period not exceeding the beneficiary's life expectancy.
Under a nonqualified contract, if the beneficiary is the contract owner's
spouse, he or she may elect to continue the contract as the new contract owner
rather than receiving the distribution. In such case, the distribution rules
applicable when a contract owner dies generally will apply when that spouse, as
contract owner, dies.
DEATH OF ANNUITANT WHO IS NOT THE CONTRACT OWNER (NONQUALIFIED CONTRACTS ONLY).
If there is no contingent annuitant, the Company will pay the death proceeds to
the beneficiary. However, if there is a contingent annuitant, he or she becomes
the annuitant and the Contract continues in effect (generally using the original
maturity date). The proceeds described above will be paid upon the death of the
last surviving contingent annuitant.
DEATH OF CONTRACT OWNER WHO IS NOT THE ANNUITANT (NONQUALIFIED CONTRACTS ONLY).
The Company will pay the proceeds to any surviving joint owner, or if none, to
the beneficiary(ies), or if none, to the contract owner's estate. If the
surviving joint owner (or if none, the beneficiary) is the Contract Owner's
spouse, he or she may elect to continue the contract as the new contract owner
rather than receiving the distribution.
ENTITY AS OWNER. In the case of a nonqualified Contract owned by a nonnatural
person (e.g. a trust or another entity), the death benefit will be paid only
upon the death of the annuitant.
DEATH PROCEEDS AFTER THE MATURITY DATE
If the owner or annuitant dies on or after the maturity date, the Company will
pay the beneficiary a death benefit consisting of any benefit remaining under
the annuity option then in effect.
THE ANNUITY PERIOD
- --------------------------------------------------------------------------------
MATURITY DATE
Under the Contract, you can receive scheduled annuity payments. You can choose
the month and the year in which those payments begin (maturity date). You can
also choose among payout plans (annuity or income options) or elect a lump-sum
distribution. We ask you to choose the maturity date and the annuity option when
you purchase the contract. While the annuitant is alive, you can change your
selection any time up to the maturity date. Annuity payments will begin on the
maturity date stated in the Contract unless the Contract has been fully
surrendered or the proceeds have been paid to the beneficiary before that date.
Annuity payments are a series of periodic payments (a) for life; (b) for life
with either a minimum number of payments or a specific amount assured; or (c)
for the joint lifetime of the annuitant and another person, and thereafter
during the
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<PAGE> 19
lifetime of the survivor. Income options that are not based on any lifetime are
also available. We may require proof that the annuitant is alive before annuity
payments are made.
Unless you elect otherwise, the maturity date will be the annuitant's 90th
birthday or ten years after the effective date of the contract, if later. (For
Contracts issued in Florida, the maturity date elected may not be later than the
annuitant's 90th birthday.)
For nonqualified Contracts, at least 30 days before the original maturity date,
a contract owner may elect to extend the maturity date to any time prior to the
annuitant's 90th birthday or, for qualified Contracts, to a later date with the
Company's consent. Certain annuity options taken at the maturity date may be
used to meet the minimum required distribution requirements of federal tax law,
or a program of partial surrenders may be used instead. These mandatory
distribution requirements take effect generally upon the death of the contract
owner, or with qualified contracts upon either the later of the contract owner's
attainment of age 70 1/2 or year of retirement; or the death of the contract
owner. Independent tax advice should be sought regarding the election of minimum
required distributions.
ALLOCATION OF ANNUITY
When an annuity option is elected, it may be elected as a variable annuity, a
fixed annuity, or a combination of both. (Variable payouts may not be available
in all states. Refer to your contract.) If, at the time annuity payments begin,
no election has been made to the contrary, the cash surrender value will be
applied to provide an annuity funded by the same funding options (contract
value, in Oregon). At least 30 days before the maturity date, you may transfer
the contract value among the funding options in order to change the basis on
which annuity payments will be determined. (See "Transfers.")
VARIABLE ANNUITY
You may choose to receive annuity payments that are based on the performance of
one or more of the variable funding options. This is called a variable payout
because the amount you receive each month will increase or decrease depending on
how the variable funding options perform. When you annuitize, we will credit you
with annuity units. An annuity unit measures the dollar value of an annuity
payment. We determine the number of annuity units to credit you with by dividing
the first monthly annuity payment for each funding option by the accumulation
unit value for that funding option as of 14 days before the annuity payments
begin. The number of annuity units (but not their value) remains fixed during
the annuity period.
HOW WE DETERMINE THE FIRST ANNUITY PAYMENT. The Contract contains tables used
to determine the first monthly annuity payment. If a variable annuity is
elected, the amount applied to it will be the value of the funding options as of
14 days before the annuity payments begin less any premium taxes due.
The first monthly payment amount depends on the annuity option elected and the
annuitant's adjusted age. The Contract contains a formula for determining the
adjusted age. We calculate the first monthly payment by multiplying the benefit
per $1,000 applied, shown in the Contract tables, by the number of thousands of
dollars of Contract value applied to the annuity option. We also factor in an
assumed daily net investment factor of 3%. This assumed daily net investment
factor is used to determine the guaranteed payout rates shown. If net investment
rates are higher at the time annuitization is selected, payout rates will be
higher than those shown. Payout rates will not be lower than those shown. We
reserve the right to require satisfactory proof of an annuitant's age before we
make the first annuity payment.
HOW WE DETERMINE THE PAYMENTS AFTER THE FIRST. The dollar amount of all annuity
payments after the first will change from month to month based on the investment
performance of the applicable funding options. The total amount of each annuity
payment will equal the sum of the basic payments in each funding option. The
actual amounts of these payments are determined by multiplying the number of
annuity units credited to each funding option by the corresponding annuity unit
value as of the date 14 days before the payment is due.
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<PAGE> 20
FIXED ANNUITY
You may choose a fixed annuity that provides payments which do not vary during
the annuity period. We will calculate the dollar amount of the first fixed
annuity payment as described under "Variable Annuity," except that the amount
applied to effect the annuity will be the cash surrender value, determined as of
the date annuity payments begin. If it would produce a larger payment, the first
fixed annuity payment will be determined using the Life Annuity Tables in effect
on the maturity date.
PAYMENT OPTIONS
- --------------------------------------------------------------------------------
ELECTION OF OPTIONS
While the annuitant is alive, you can change your annuity option selection any
time up to the maturity date. Once annuity payments have begun, no further
elections are allowed.
During the annuitant's lifetime, if you do not elect otherwise before the
maturity date, we will pay you (or another designated payee) the first of a
series of monthly annuity payments based on the life of the annuitant, in
accordance with Annuity Option 2 (Life Annuity with 120 monthly payments
assured). For certain qualified contracts, Annuity Option 4 (Joint and Last
Survivor Joint Life Annuity -- Annuity Reduced on Death of Primary Payee) will
be the automatic option as described in the contract.
The minimum amount that can be placed under an annuity option will be $1,000
unless we agree to a lesser amount. If any monthly periodic payment due is less
than $100, the Company reserves the right to make payments at less frequent
intervals, or to pay the contract value in a lump-sum.
On the maturity date, we will pay the amount due under the Contract in one lump
sum (except in states, where this is not permitted), or in accordance with the
payment option that you select. You must elect an option in writing, in a form
satisfactory to the Company. Any election made during the lifetime of the
annuitant must be made by the contract owner.
ANNUITY OPTIONS
Subject to the conditions described in "Election of Options" above, all or any
part of the cash surrender value (or, where required by state law, contract
value) may be paid under one or more of the following annuity options. Payments
under the annuity options may be elected on a monthly, quarterly, semiannual or
annual basis. We may offer additional options.
Option 1 -- Life Annuity -- No Refund. The Company will make annuity payments
during the lifetime of the annuitant ending with the last payment before death.
This option offers the maximum periodic payment, since there is no assurance of
a minimum number of payments or provision for a death benefit for beneficiaries.
Option 2 -- Life Annuity with 120, 180 or 240 Monthly Payments Assured. The
Company will make monthly annuity payments during the lifetime of the annuitant,
with the agreement that if, at the death of that person, payments have been made
for less than 120, 180 or 240 months as elected, we will continue making
payments to the beneficiary during the remainder of the period.
Option 3 -- Joint and Last Survivor Life Annuity -- No Refund. The Company will
make regular annuity payments during the lifetime of the annuitant and a second
person. When either person dies, we will continue making payments to the
survivor. No further payments will be made following the death of the survivor.
Option 4 -- Joint and Last Survivor Life Annuity -- Annuity Reduced on Death of
Primary Payee. The Company will make annuity payments during the lifetimes of
the annuitant and a second person. One will be designated the primary payee, the
other will be designated the secondary payee. On the death of the secondary
payee, the Company will continue to make monthly annuity payments to the primary
payee in the same amount that would have been payable during the joint
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lifetime of the two persons. On the death of the primary payee, the Company will
continue to make annuity payments to the secondary payee in an amount equal to
50% of the payments which would have been made during the lifetime of the
primary payee. No further payments will be made once both payees have died.
Option 5 -- Other Annuity Options. The Company will make any other arrangements
for annuity payments as may be mutually agreed upon.
INCOME OPTIONS
Instead of one of the annuity options described above, and subject to the
conditions described under "Election of Options," all or part of the cash
surrender value (or, where required by state law, contract value) may be paid
under one or more of the following income options, provided that they are
consistent with federal tax law qualification requirements. Payments under the
income options may be elected on a monthly, quarterly, semiannual or annual
basis:
Option 1 -- Payments of a Fixed Amount. The Company will make equal payments of
the amount elected until the cash surrender value applied under this option has
been exhausted. The first payment and all later payments will be paid from
amounts attributable to each investment option in proportion to the cash
surrender value attributable to each. The final payment will include any amount
insufficient to make another full payment.
Option 2 -- Payments for a Fixed Period. The Company will make payments for the
fixed period selected based on the cash surrender value as of the date payments
begin. If, at the death of the annuitant, the total number of fixed payments has
not been made, the payments will be made to the beneficiary.
Option 3 -- Other Income Options. The Company will make any other arrangements
for income payments as may be mutually agreed upon.
MISCELLANEOUS CONTRACT PROVISIONS
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RIGHT TO RETURN
You may return the Contract for a full refund of the contract value (including
charges) within twenty days after you receive it (the "right to return period").
Where state law requires a longer period, or the return of purchase payments,
the Company will comply. You bear the investment risk during the right to return
period; therefore, the contract value returned may be greater or less than your
purchase payment. If the Contract is purchased as an Individual Retirement
Annuity, and is returned within the first seven days after delivery, your
purchase payment will be refunded in full; during the remainder of the right to
return period, the contract value (including charges) will be refunded. The
contract value will be determined following the close of the business day on
which we receive a written request for a refund. Refer to your Contract for any
state-specific information.
TERMINATION
You do not need to make any purchase payments after the first to keep the
Contract in effect. However, we reserve the right to terminate the Contract on
any business day if the contract value as of that date is less than $1,000 and
no purchase payments have been made for at least two years, unless otherwise
specified by state law. Termination will not occur until 31 days after the
Company has mailed notice of termination to the contract owner's last known
address and to any assignee of record. If the Contract is terminated, we will
pay you the cash surrender value (contract value less any applicable premium
tax, in the states that so require), less any applicable charges and any
outstanding loans.
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REQUIRED REPORTS
As often as required by law, but at least once in each contract year before the
due date of the first annuity payment, we will furnish a report showing the
number of accumulation units credited to the Contract and the corresponding
accumulation unit value(s) as of the date of the report for each funding option
to which the contract owner has allocated amounts during the applicable period.
The Company will keep all records required under federal or state laws.
SUSPENSION OF PAYMENTS
The Company reserves the right to suspend or postpone the date of any payment or
determination of values on any business day (1) when the New York Stock Exchange
("the Exchange") is closed; (2) when trading on the Exchange is restricted; (3)
when an emergency exists as determined by the SEC so that the sale of securities
held in the Separate Account may not reasonably occur or so that the Company may
not reasonably determine the value the Separate Account's net assets; or (4)
during any other period when the SEC, by order, so permits for the protection of
security holders.
TRANSFERS OF CONTRACT VALUES TO OTHER ANNUITIES
We may permit contract owners to transfer their contract values into other
annuities offered by us or our affiliated insurance companies under rules then
in effect.
THE SEPARATE ACCOUNT
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The Separate Account was established on July 6, 1994 and is registered with the
SEC as a unit investment trust (separate account) under the Investment Company
Act of 1940, as amended (the "1940 Act"). The assets of the Separate Account
will be invested in the shares of the variable funding options for this contract
and for other annuity contracts offered under the Separate Account.
The assets of the Separate Account are held for the exclusive benefit of the
owners of this separate account, according to the laws of Arizona. Income, gains
and losses, whether or not realized, from assets allocated to the Separate
Account are, in accordance with the Contracts, credited to or charged against
the Separate Account without regard to other income, gains and losses of the
Company. The assets held by the Separate Account are not chargeable with
liabilities arising out of any other business which the Company may conduct.
Obligations under the Contract are obligations of the Company.
All investment income and other distributions of the funding options are payable
to the Separate Account. All such income and/or distributions are reinvested in
shares of the respective funding option at net asset value. Shares of the
funding options are currently sold only to life insurance company separate
accounts to fund variable annuity and variable life insurance contracts.
PERFORMANCE INFORMATION
From time to time, we may advertise several types of historical performance for
the Contract's funding options. We may advertise the "standardized average
annual total returns" of the funding option, calculated in a manner prescribed
by the SEC, and the "non-standardized total return," as described below. Once
available, specific examples of the performance information will appear in the
SAI.
STANDARDIZED METHOD. Quotations of average annual total returns are computed
according to a formula in which a hypothetical initial investment of $1,000 is
applied to the funding option, and then related to ending redeemable values over
one-, five-, and ten-year periods, or for a period covering the time during
which the funding option has been in existence, if less. These quotations
reflect the deduction of all recurring charges during each period (on a pro rata
basis in the case of fractional periods). The deduction for the annual
administrative charge is converted to a percentage of assets based on the actual
fee collected (or anticipated to be collected, if a new
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product), divided by the average net assets for Contracts sold (or anticipated
to be sold). Each quotation assumes a total redemption at the end of each period
with the applicable withdrawal charge deducted at that time.
NONSTANDARDIZED METHOD. Nonstandardized "total returns" will be calculated in a
similar manner based on the performance of the funding options over a period of
time, usually for the calendar year-to-date, and for the past one-, three-,
five- and ten-year periods. Nonstandardized total returns will not reflect the
deduction of any withdrawal charge or the annual contract administrative charge,
which, if reflected, would decrease the level of performance shown. The
withdrawal charge is not reflected because the Contract is designed for
long-term investment.
For funding options that were in existence before they became available under
the Separate Account, the standardized total return quotations may be
accompanied by returns showing the investment performance that such funding
options would have achieved (reduced by the applicable charges) had they been
held under the Contract for the period quoted. The total return quotations are
based upon historical earnings and are not necessarily representative of future
performance.
GENERAL. Within the guidelines prescribed by the SEC and the National
Association of Securities Dealers, Inc. ("NASD"), performance information may be
quoted numerically or may be presented in a table, graph or other illustration.
Advertisements may include data comparing performance to well-known indices of
market performance (including, but not limited to, the Dow Jones Industrial
Average, the Standard & Poor's (S&P) 500 Index and the S&P 400 Index, the Lehman
Brothers Long T-Bond Index, the Russell 1000, 2000 and 3000 Indices, the Value
Line Index, and the Morgan Stanley Capital International's EAFE Index).
Advertisements may also include published editorial comments and performance
rankings compiled by independent organizations (including, but not limited to,
Lipper Analytical Services, Inc. and Morningstar, Inc.) and publications that
monitor the performance of the Separate Account and the variable funding
options.
FEDERAL TAX CONSIDERATIONS
- --------------------------------------------------------------------------------
The following general discussion of the federal income tax consequences under
this Contract is not intended to cover all situations, and is not meant to
provide tax advice. Because of the complexity of the law and the fact that the
tax results will vary depending on many factors, you should consult your tax
adviser regarding your personal situation. For your information, a more detailed
tax discussion is contained in the SAI.
GENERAL TAXATION OF ANNUITIES
Congress has recognized the value of saving for retirement by providing certain
tax benefits, in the form of tax deferral, for money put into an annuity. The
Internal Revenue Code (Code) governs how this money is ultimately taxed,
depending upon the type of contract, qualified or non-qualified, and the manner
in which the money is distributed, as briefly described below.
TYPES OF CONTRACTS: QUALIFIED OR NONQUALIFIED
If you purchase an annuity contract with proceeds of an eligible rollover
distribution from any pension plan, specially sponsored program, or individual
retirement annuity (IRA) with pre-tax dollars, your contract is referred to as a
qualified contract. Some examples of qualified contracts are: regular IRAs,
403(b) annuities, pension and profit-sharing plans (including 401(k) plans),
Keogh Plans, and certain other qualified deferred compensation plans. An
exception to this is a qualified plan called a Roth IRA. Under Roth IRAs,
after-tax contributions accumulate until maturity, when amounts (including
earnings) may be withdrawn tax-free. If you purchase the contract on an
individual basis with after-tax dollars and not under one of the programs
described above, your contract is referred to as nonqualified.
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NONQUALIFIED ANNUITY CONTRACTS
As the owner of a nonqualified annuity, you do not receive any tax benefit
(deduction or deferral of income) on purchase payments, but you will not be
taxed on increases in the value of your contract until a distribution
occurs -- either as a withdrawal (distribution made prior to the maturity date),
or as annuity payments. When a withdrawal is made, you are taxed on the amount
of the withdrawal that is considered earnings. Similarly, when you receive an
annuity payment, part of each payment is considered a return of your purchase
payments and will not be taxed. The remaining portion of the annuity payment
(i.e., any earnings) will be considered ordinary income for tax purposes.
If a nonqualified annuity is owned by other than an individual, however, (e.g.,
by a corporation), increases in the value of the contract attributable to
purchase payments made after February 28, 1986 are includible in income
annually. Furthermore, for contracts issued after April 22, 1987, if you
transfer the contract without adequate consideration all deferred increases in
value will be includible in your income at the time of the transfer.
If you make a partial withdrawal, this money will generally be taxed as first
coming from earnings, (income in the contract), and then from your purchase
payments. These withdrawn earnings are includible in your income. (See "Penalty
Tax for Premature Distributions" below.) There is income in the contract to the
extent the contract value exceeds your investment in the contract. The
investment in the contract equals the total purchase payments you paid less any
amount received previously which was excludible from gross income. Any direct or
indirect borrowing against the value of the contract or pledging of the contract
as security for a loan will be treated as a cash distribution under the tax law.
Federal tax law requires that nonqualified annuity contracts meet minimum
mandatory distribution requirements upon the death of the contract owner,
including the first of joint owners. If these requirements are not met, the
surviving joint owner, or the beneficiary, will have to pay taxes prior to
distribution. The distribution required depends, among other things, upon
whether an annuity option is elected or whether the new contract owner is the
surviving spouse. We will administer Contracts in accordance with these rules
and we will notify you when you should begin receiving payments.
QUALIFIED ANNUITY CONTRACTS
Under a qualified annuity, since amounts paid into the contract have generally
not yet been taxed, the full amount of all distributions, including lump-sum
withdrawals and annuity payments, are taxed at the ordinary income tax rate
unless the distribution is transferred to an eligible rollover account or
contract. The Contract is available as a vehicle for IRA rollovers and for other
qualified contracts. There are special rules which govern the taxation of
qualified contracts, including withdrawal restrictions, requirements for
mandatory distributions, and contribution limits, and also special rules
regarding Roth IRAs. We have provided a more complete discussion in the SAI.
PENALTY TAX FOR PREMATURE DISTRIBUTIONS
Taxable distributions taken before the contract owner has reached the age of
59 1/2 will be subject to a 10% additional tax penalty unless the distribution
is taken in a series of periodic distributions, for life or life expectancy, or
unless the distribution follows the death or disability of the contract owner.
Other exceptions may be available in certain qualified plans.
DIVERSIFICATION REQUIREMENTS FOR VARIABLE ANNUITIES
The Code requires that any nonqualified variable annuity contracts based on a
separate account shall not be treated as an annuity for any period if
investments made in the account are not adequately diversified. Final tax
regulations define how separate accounts must be diversified. The Company
monitors the diversification of investments constantly and believes that its
accounts are adequately diversified. The consequence of any failure to diversify
is essentially the loss to the
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Contract Owner of tax deferred treatment. The Company intends to administer all
contracts subject to this provision of law in a manner that will maintain
adequate diversification.
OWNERSHIP OF THE INVESTMENTS
Assets in the separate account, also referred to as a segregated asset account,
must be owned by the Company and not by the Contract Owner for federal income
tax purposes. Otherwise, the deferral of taxes is lost and income and gains from
the account would be includable annually in the Contract Owner's gross income.
The Internal Revenue Service has stated in published rulings that a variable
contract owner will be considered the owner of the assets of a segregated asset
account if the owner possesses an incident of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department announced, in connection with the issuance of temporary regulations
concerning investment diversification, that those regulations "do not provide
guidance concerning the circumstances in which investor control of the
investments of a segregated asset account may cause the investor, rather than
the insurance company, to be treated as the owner of the assets of the account."
This announcement, dated September 15, 1986, also stated that the guidance would
be issued by way of regulations or rulings on the "extent to which policyholders
may direct their investments to particular subaccounts [of a segregated asset
account] without being treated as owners of the underlying assets." As of the
date of this prospectus, no such guidance has been issued.
The Company does not know if such guidance will be issued, or if it is, what
standards it may set. Furthermore, the Company does not know if such guidance
may be issued with retroactive effect. New regulations are generally issued with
a prospective-only effect as to future sales or as to future voluntary
transactions in existing contracts. The Company therefore reserves the right to
modify the contract as necessary to attempt to prevent Contract Owners from
being considered the owner of the assets of the separate account.
MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS
Federal tax law requires that minimum annual distributions begin by April 1st of
the calendar year following the calendar year in which an IRA owner attains age
70 1/2. Participants in qualified plans and 403(b) annuities may defer minimum
distributions until the later of April 1st of the calendar year following the
calendar year in which they attain age 70 1/2 or the year of retirement.
Distributions must begin or be continued according to required patterns
following the death of the contract owner or annuitant of both qualified and
nonqualified annuities.
OTHER INFORMATION
- --------------------------------------------------------------------------------
THE INSURANCE COMPANY
Citicorp Life Insurance Company is a stock life insurance company organized
under the laws of Arizona in 1971. Citicorp Life Insurance Company is an
indirect, wholly owned subsidiary of Citigroup Inc., one of the world's largest
bank holding companies.
FINANCIAL STATEMENTS
The financial statements for the insurance company are located in the Statement
of Additional Information. The financial statements for the separate account
will be available through annual reports to shareholders. These reports are
accessible through the SEC's website that appears on page 1 of the prospectus.
YEAR 2000 COMPLIANCE
Like all financial services providers, we use computer systems that may be
affected by Year 2000 transition issues, and rely on service providers,
including the funding options, whose systems also
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may be affected. We have developed, and are in the process of implementing, a
Year 2000 transition plan. In addition, we are in the process of confirming that
the funding options and other service providers are also engaged in similar
transition plans. The resources that are being devoted to this effort are
substantial. It is difficult to predict with precision whether the amount of
resources ultimately devoted, or the outcome of these efforts, will have any
negative impact on our operations. However, as of the date of this prospectus,
it is not anticipated that you will experience negative effects on your
investment, or on the services we provide, as a result of Year 2000 transition
implementation. As of January 1, 1999, our systems are Year 2000 compliant, but
there can be no assurance that the interaction with other service providers will
not impair services at that time.
DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS
The Company intends to sell the Contracts in all jurisdictions where it is
licensed to do business and where the Contract is approved. Any sales
representative or employee who sells the Contracts will be qualified to sell
variable annuities under applicable federal and state laws. Each broker-dealer
is registered with the SEC under the Securities Exchange Act of 1934, and all
are members of the NASD. The principal underwriter and distributor of the
Contracts is CFBDS, Inc., 21 Milk St., Boston, MA. CFBDS, Inc. is not affiliated
with the Company or the Separate Account.
Up-front compensation paid to sales representatives will not exceed 7.00 % of
the purchase payments made under the Contracts. If asset-based compensation is
paid, it will not exceed 2% of the average account value annually. From time to
time, the Company may pay or permit other promotional incentives, in cash,
credit or other compensation.
CONFORMITY WITH STATE AND FEDERAL LAWS
The Contract is governed by the laws of the state in which it is delivered. Any
paid-up annuity, cash surrender value or death benefits that are available under
the Contract are not less than the minimum benefits required by the statutes of
the state in which the Contract is delivered. We reserve the right to make any
changes, including retroactive changes, in the Contract to the extent that the
change is required to meet the legal requirements of any governmental agency to
which the Company, the Contract or the contract owner is subject. Where a state
requires contract owner approval, we will comply.
VOTING RIGHTS
The Company is the legal owner of the shares of the funding options. However, we
believe that when a funding option solicits proxies in conjunction with a vote
of shareholders we are required to obtain from you and from other owners
instructions on how to vote those shares. When we receive those instructions, we
will vote all of the shares we own in proportion to those instructions. This
will also include any shares we own on our own behalf. Should we determine that
we are no longer required to comply with the above, we will vote on the shares
in our own right.
LEGAL PROCEEDINGS AND OPINIONS
There are no pending material legal proceedings affecting the separate account
or the Company.
Legal matters in connection with the federal laws and regulations affecting the
issue and sale of the Contract described in this prospectus, as well as the
organization of the Company, its authority to issue variable annuity contracts
under Arizona law and the validity of the forms of the variable annuity
contracts under Arizona law, have been passed on by the General Counsel of the
Company.
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APPENDIX A
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THE FIXED ACCOUNT
The Fixed Account is secured by part of the general assets of the Company. The
general assets of the Company include all assets of the Company other than those
held in the Separate Account or any other separate account sponsored by the
Company or its affiliates.
The staff of the SEC does not generally review the disclosure in the prospectus
relating to the Fixed Account. Disclosure regarding the Fixed Account and the
general account may, however, be subject to certain provisions of the federal
securities laws relating to the accuracy and completeness of statements made in
the prospectus.
Under the Fixed Account, the Company assumes the risk of investment gain or
loss, guarantees a specified interest rate, and guarantees a specified periodic
annuity payment. The investment gain or loss of the funding options does not
affect the Fixed Account portion of the contract owner's contract value, or the
dollar amount of fixed annuity payments made under any payout option.
We guarantee that, at any time, the Fixed Account contract value will not be
less than the amount of the purchase payments allocated to the Fixed Account,
plus interest credited as described below, less any applicable premium taxes or
prior surrenders. If the contract owner effects a surrender, the amount
available from the Fixed Account will be reduced by any applicable withdrawal
charge as described under "Charges and Deductions" in this prospectus.
Purchase payments allocated to the Fixed Account and any transfers made to the
Fixed Account become part of the Company's general account which supports
insurance and annuity obligations. Neither the general account nor any interest
therein is registered under, nor subject to the provisions of, the Securities
Act of 1933 or Investment Company Act of 1940. We will invest the assets of the
Fixed Account at our discretion. Investment income from such Fixed Account
assets will be allocated to us and to the Contracts participating in the Fixed
Account.
Investment income from the Fixed Account allocated to us includes compensation
for mortality and expense risks borne by us in connection with Fixed Account
Contracts. The amount of such investment income allocated to the Contracts will
vary from year to year in our sole discretion at such rate or rates as we
prospectively declare from time to time.
The initial rate for any allocations into the Fixed Account is guaranteed for
one year from the date of such allocation. Subsequent renewal rates will be
guaranteed for the calendar quarter. We also guarantee that for the life of the
Contract we will credit interest at not less than 3% per year. Any interest
credited to amounts allocated to the Fixed Account in excess of 3% per year will
be determined in our sole discretion. You assume the risk that interest credited
to the Fixed Account may not exceed the minimum guarantee of 3% for any given
year.
TRANSFERS
You may make transfers from the Fixed Account to any other available variable
funding option(s) twice a year during the 30 days following the semi-annual
anniversary of the contract effective date. The transfers are limited to an
amount of up to 15% of the Fixed Account Value on the semi-annual contract
effective date anniversary. (This restriction does not apply to transfers from
the Dollar Cost Averaging Program.) Amounts previously transferred from the
Fixed Account to other funding options may not be transferred back to the Fixed
Account for a period of at least six months from the date of transfer. We
reserve the right to waive either of these restrictions.
Automated transfers from the Fixed Account to any of the funding options may
begin at any time. Automated transfers from the Fixed Account may not deplete
your Fixed Account value in a period of less than twelve months from your
enrollment in the Dollar Cost Averaging Program.
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APPENDIX B
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WAIVER OF WITHDRAWAL CHARGE FOR NURSING HOME CONFINEMENT
(THIS WAIVER IS NOT AVAILABLE IF THE ANNUITANT IS AGE 71 OR OLDER ON THE DATE
THE CONTRACT IS ISSUED.)
If, after the first contract year and prior to the maturity date of the
Contract, the annuitant begins confinement in an Eligible Nursing Home, and
remains confined for the qualifying period, you may make a total or partial
withdrawal, subject to the maximum withdrawal amount described below, without
incurring a Withdrawal Charge. In order for the Withdrawal Charge to be waived,
the withdrawal must be made during continued confinement in an Eligible Nursing
Home after the qualifying period has been satisfied, or within sixty (60) days
after such confinement ends. The qualifying period is confinement in an Eligible
Nursing Home for ninety (90) consecutive days. We will require proof of
confinement in a form satisfactory to us, which may include certification by a
licensed physician that such confinement is medically necessary.
An Eligible Nursing Home is defined as an institution or special nursing unit of
a hospital which:
(a) is Medicare approved as a provider of skilled nursing care services; and
(b) is not, other than in name only, an acute care hospital, a home for the
aged, a retirement home, a rest home, a community living center, or a place
mainly for the treatment of alcoholism, mental illness or drug abuse.
OR
Meets all of the following standards:
(a) is licensed as a nursing care facility by the state in which it is licensed;
(b) is either a freestanding facility or a distinct part of another facility
such as a ward, wing, unit or swing-bed of a hospital or other facility;
(c) provides nursing care to individuals who are not able to care for themselves
and who require nursing care;
(d) provides, as a primary function, nursing care and room and board; and
charges for these services;
(e) care is provided under the supervision of a licensed physician, registered
nurse (RN) or licensed practical nurse (LPN);
(f) may provide care by a licensed physical, respiratory, occupational or speech
therapist; and
(g) is not, other than in name only, an acute care hospital, a home for the
aged, a retirement home, a rest home, a community living center, or a place
mainly for the treatment of alcoholism, mental illness or drug abuse.
FILING A CLAIM: You must provide the Company with written notice of a claim
during continued confinement following completion of the qualifying period, or
within sixty days after such confinement ends.
The maximum withdrawal amount available without incurring a Withdrawal Charge is
the contract value on the next valuation date following written proof of claim,
less any purchase payments made within a one year period prior to the date
confinement in an Eligible Nursing Home begins, less any additional purchase
payments made on or after the Annuitant's 71st birthday.
Any withdrawal requested which falls under the scope of this waiver will be paid
as soon as we receive proper written proof of your claim, and will be paid in a
lump sum. You should consult with your personal tax adviser regarding the
taxable nature of any withdrawals taken from your contract.
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APPENDIX C
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TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
The Statement of Additional Information contains more specific information and
financial statements relating to the insurance company. A list of the contents
of the Statement of Additional Information is set forth below:
The Insurance Company
Principal Underwriter
Valuation of Assets
Mixed and Shared Funding
Performance Information
Federal Tax Considerations
Independent Accountants
Financial Statements
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Copies of the Statement of Additional Information dated (Form No.
) are available without charge. To request a copy, please clip this
coupon on the dotted line above, enter your name and address in the spaces
provided below, and mail to:
Name:
Address:
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PART B
Information Required in a Statement of Additional Information
<PAGE> 31
CitiElite
STATEMENT OF ADDITIONAL INFORMATION
dated
________,1999
for
CITICORP LIFE VARIABLE ANNUITY SEPARATE ACCOUNT
FOR VARIABLE ANNUITIES
ISSUED BY
CITICORP LIFE INSURANCE COMPANY
This Statement of Additional Information ("SAI") is not a prospectus but relates
to, and should be read in conjunction with, the Contract Prospectus dated
______, 1999. A copy of the Prospectus may be obtained by writing to Citicorp
Life Insurance Company, 800 Silver Lake Boulevard, P.O. Box 7031 Dover, DE,
19903 or by calling (800) 497-4857.
TABLE OF CONTENTS
<TABLE>
<S> <C>
THE INSURANCE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PRINCIPAL UNDERWRITER . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
VALUATION OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
PERFORMANCE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
FEDERAL TAX CONSIDERATIONS . . . . . . . . . . . .. . . . . . . . . . . . . . 6
INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
</TABLE>
<PAGE> 32
THE INSURANCE COMPANY
Citicorp Life Insurance Company is a stock insurance company organized
under the laws of Arizona in 1971. Citicorp Life Insurance Company is wholly
owned by Citibank Delaware which in turn, is a wholly owned subsidiary of
Citigroup, one of the world's largest bank holding companies.
STATE REGULATION. The Company is subject to the laws of Arizona governing
insurance companies.
The Company is also subject to the insurance laws and regulations of
all other states in which it is licensed to operate. However, the insurance
departments of each of these states generally apply the laws of the home state
(jurisdiction of domicile) in determining the field of permissible investments.
THE SEPARATE ACCOUNT. The Separate Account meets the definition of a separate
account under the federal securities laws, and will comply with the provisions
of the 1940 Act. Additionally, the operations of the Separate Account are
subject to the provisions of Arizona laws.
It is conceivable that in the future it may be disadvantageous for both variable
annuity and variable life insurance separate accounts, or for variable separate
accounts of different insurance companies, to invest simultaneously in the same
portfolios (called "mixed" and "shared" funding). Currently neither the
insurance companies nor the portfolios foresee any such disadvantages to the
companies or to variable contract owners. Each portfolio's board of trustees,
directors or managers intends to monitor events in order to identify any
material conflicts between such policy owners and to determine what action, if
any, should be taken in response thereto.
PRINCIPAL UNDERWRITER
CFBDS, Inc. serves as principal underwriter for the Separate Account
and the Contracts. The offering is continuous. CFBDS, Inc. is not affiliated
with the Company or the Separate Account. Its principal executive offices are
located at 21 Milk Street, Boston, MA.
1
<PAGE> 33
VALUATION OF ASSETS
FUNDING OPTIONS: The value of the assets of each funding option is determined on
each business day as of the close of the New York Stock Exchange. Each security
traded on a national securities exchange is valued at the last reported sale
price on each business day. If there has been no sale on that day, then the
value of the security is taken to be the mean between the reported bid and asked
prices on the business day or on the basis of quotations received from a
reputable broker or any other recognized source.
Any security not traded on a securities exchange but traded in the
over-the-counter-market and for which market quotations are readily available is
valued at the mean between the quoted bid and asked prices on the business day
or on the basis of quotations received from a reputable broker or any other
recognized source.
Securities traded on the over-the-counter-market and listed securities
with no reported sales are valued at the mean between the last reported bid and
asked prices or on the basis of quotations received from a reputable broker or
other recognized source.
Short-term investments for which a quoted market price is available are
valued at market. Short-term investments maturing in more than sixty days for
which there is no reliable quoted market price are valued by "marking to market"
(computing a market value based upon quotations from dealers or issuers for
securities of a similar type, quality and maturity.) "Marking to market" takes
into account unrealized appreciation or depreciation due to changes in interest
rates or other factors which would influence the current fair values of such
securities. Short-term investments maturing in sixty days or less for which
there is no reliable quoted market price are valued at amortized cost which
approximates market.
THE CONTRACT VALUE: The value of an accumulation unit on any business day is
determined by multiplying the value on the preceding business day by the net
investment factor for the valuation period just ended. The net investment factor
is used to measure the investment performance of a funding option from one
valuation period to the next. The net investment factor for a funding option for
any valuation period is equal to the sum of 1.000000 plus the net investment
rate (the gross investment rate less any applicable funding option deductions
during the valuation period relating to the mortality and expense risk charge
and the administrative expense charge). The gross investment rate of a funding
option is equal to (a) minus (b), divided by (c) where:
(a) = investment income plus capital gains and losses (whether realized or
unrealized);
(b) = any deduction for applicable taxes (presently zero); and
(c) = the value of the assets of the funding option at the beginning
of the valuation period.
2
<PAGE> 34
The gross investment rate may be either positive or negative. A funding
option's investment income includes any distribution whose ex-dividend date
occurs during the valuation period.
ACCUMULATION UNIT VALUE. The value of the accumulation unit for each funding
option was initially established at $1.00. The value of an accumulation unit on
any business day is determined by multiplying the value on the preceding
business day by the net investment factor for the valuation period just ended.
The net investment factor is calculated for each funding option and takes into
account the investment performance, expenses and the deduction of certain
expenses.
ANNUITY UNIT VALUE. The initial Annuity Unit Value applicable to each funding
option was established at $1.00. An annuity unit value as of any business day is
equal to (a) the value of the annuity unit on the immediately preceding business
day, multiplied by (b) the corresponding net investment factor for the valuation
period just ended, divided by (c) the assumed net investment factor for the
valuation period. (For example, the assumed net investment factor based on an
annual assumed net investment rate of 3.0% for a Valuation Period of one day is
1.000081 and, for a period of two days, is 1.000081 x 1.000081.)
PERFORMANCE INFORMATION
From time to time, the Company may advertise several types of
historical performance for the Funding Options of the Separate Account. The
Company may advertise the "standardized average annual total returns" of the
Funding Option, calculated in a manner prescribed by the Securities and Exchange
Commission, as well as the "nonstandardized total return," as described below:
STANDARDIZED METHOD. Quotations of average annual total returns are
computed according to a formula in which a hypothetical initial investment of
$1,000 is applied to the Funding Option, and then related to ending redeemable
values over one-, five-, and ten-year periods, or for a period covering the time
during which the Funding Option has been in existence, if less. If a Funding
Option has been in existence for less than one year, the "since inception" total
return performance quotations are year-to-date and are not average annual total
returns. These quotations reflect the deduction of all recurring charges during
each period (on a pro rata basis in the case of fractional periods). The
deduction for the annual administrative charge is converted to a percentage of
assets based on the actual fee collected (or anticipated to be collected, if a
new product), divided by the average net assets for contracts sold (or
anticipated to be sold) under the Prospectus to which this Statement of
Additional Information relates. Each quotation assumes a total redemption at the
end of each period with the assessment of any applicable withdrawal charge at
that time.
NONSTANDARDIZED METHOD. Nonstandardized "total returns" will be
calculated in a similar manner based on the performance of the Funding Options
over a period of time, usually for the calendar year-to-date, and for the past
one-, three-, five- and ten-year periods. Nonstandardized total returns will not
reflect the deduction of any applicable withdrawal charge or the annual contract
administrative charge, which, if reflected, would decrease the level of
performance shown. The withdrawal charge is not reflected because the Contract
is designed for long-term investment.
3
<PAGE> 35
For Funding Options that were in existence before they became available
under the Separate Account, the standardized average annual total return
quotations may be accompanied by returns showing the investment performance that
such Funding Options would have achieved (reduced by the applicable charges) had
they been held under the Contract for the period quoted. The total return
quotations are based upon historical earnings and are not necessarily
representative of future performance. An Owner's Contract Value at redemption
may be more or less than original cost.
GENERAL. Within the guidelines prescribed by the SEC and the National
Association of Securities Dealers, Inc. ("NASD"), performance information may be
quoted numerically or may be presented in a table, graph or other illustration.
Advertisements may include data comparing performance to well-known indices of
market performance (including, but not limited to, the Dow Jones Industrial
Average, the Standard & Poor's (S&P) 500 Index and the S&P 400 Index, the Lehman
Brothers Long T-Bond Index, the Russell 1000, 2000 and 3000 Indices, the Value
Line Index, and the Morgan Stanley Capital International's EAFE Index).
Advertisements may also include published editorial comments and performance
rankings compiled by independent organizations (including, but not limited to,
Lipper Analytical Services, Inc. and Morningstar, Inc.) and publications that
monitor the performance of the Separate Account and the Funding Options.
ACTUAL RETURNS FOR THE SEPARATE ACCOUNT'S FUNDING OPTIONS ARE NOT
AVAILABLE, SINCE THE PRODUCT IS NEW AND THEREFORE HAS NO INVESTMENT HISTORY.
However, average annual total returns have been calculated using each funding
option's investment performance since inception. The returns were computed for
the period ending as if they had been available under the Separate Account
during that time. They are set forth in the following tables.
4
<PAGE> 36
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
----------------------------
(taking into account all charges and fees)
- ------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME 10 YEAR
1 YEAR 5 YEAR OR INCEPTION
==================================================================================================================
<S> <C> <C> <C>
Travelers High Yield Bond Trust -1.98% 8.30% 7.91%
- ------------------------------------------------------------------------------------------------------------------
Travelers Money Market Portfolio -3.47% 2.45% 3.78%
- ------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable Series Funds, Inc.
- ------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable Capital Fund --- --- 9.47% (2/98)
- ------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable High Yield Bond Fund --- --- -7.82% (5/98)
- ------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable Investors Fund --- --- 2.17% (2/98)
- ------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable Total Return Fund --- --- -2.69% (2/98)
- ------------------------------------------------------------------------------------------------------------------
Templeton Variable Products Series Fund
- ------------------------------------------------------------------------------------------------------------------
Franklin Small Cap Investments Fund Class II --- --- -15.10% (5/98)
- ------------------------------------------------------------------------------------------------------------------
Templeton International Fund Class II 0.31% 9.48% 12.36% (5/92)
- ------------------------------------------------------------------------------------------------------------------
The Travelers Series Trust
- ------------------------------------------------------------------------------------------------------------------
Large Cap Portfolio (Fidelity) 26.62% --- 27.77% (8/96)
- ------------------------------------------------------------------------------------------------------------------
MFS Mid Cap Growth Portfolio --- --- -7.54% (3/98)
- ------------------------------------------------------------------------------------------------------------------
MFS Research Portfolio --- --- -1.78% (3/98)
- ------------------------------------------------------------------------------------------------------------------
Travelers Quality Bond Portfolio -0.08% --- 4.30% (8/96)
- ------------------------------------------------------------------------------------------------------------------
Travelers Series Fund, Inc.
- ------------------------------------------------------------------------------------------------------------------
AIM Capital Appreciation Protfolio 8.52% --- 9.12% (10/95)
- ------------------------------------------------------------------------------------------------------------------
Putnam Diversified Income Portfolio -7.74% --- 5.42% (6/94)
- ------------------------------------------------------------------------------------------------------------------
MFS Total Return Portfolio 3.04% --- 13.25% (6/94)
- ------------------------------------------------------------------------------------------------------------------
Variable Annuity Portfolios
- ------------------------------------------------------------------------------------------------------------------
CitiSelect VIP Folio 200 -0.56% 3.01% (2/97)
- ------------------------------------------------------------------------------------------------------------------
CitiSelect VIP Folio 300 -0.76% 3.32% (2/97)
- ------------------------------------------------------------------------------------------------------------------
CitiSelect VIP Folio 400 -4.14% 1.72% (2/97)
- ------------------------------------------------------------------------------------------------------------------
CitiSelect VIP Folio 500 -5.82% 1.51% (2/97)
- ------------------------------------------------------------------------------------------------------------------
CitiFunds Small Cap Growth VIP Fund -10.76% - 0.74% (2/97)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
----------------------------
(taking into account all charges and fees
except deferred sales charges and contract
administrative charge)
- ------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME 10 YEAR
1 YEAR 3 YEAR 5 YEAR OR INCEPTION
==================================================================================================================
<S> <C> <C> <C> <C>
Travelers High Yield Bond Trust 5.08% 11.38% 8.91% 7.92%
- ------------------------------------------------------------------------------------------------------------------
Travelers Money Market Portfolio 3.59% 3.30% 3.20% 3.63%
- ------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable Series Funds, Inc.
- ------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable Capital Fund -- -- -- 16.54% (2/98)
- ------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable High Yield Bond Fund -- -- -- -0.82% (5/98)
- ------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable Investors Fund -- -- -- 9.24% (2/98)
- ------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable Total Return Fund -- -- -- 4.37% (2/98)
- ------------------------------------------------------------------------------------------------------------------
Templeton Variable Products Series Fund
- ------------------------------------------------------------------------------------------------------------------
Franklin Small Cap Investments Fund Class II -- -- -- -8.65% (5/98)
- ------------------------------------------------------------------------------------------------------------------
Templeton International Fund Class II 7.37% 13.71% 10.07% 12.40% (5/92)
- ------------------------------------------------------------------------------------------------------------------
The Travelers Series Trust
- ------------------------------------------------------------------------------------------------------------------
Large Cap Portfolio (Fidelity) 33.69% -- -- 29.67% (8/96)
- ------------------------------------------------------------------------------------------------------------------
MFS Mid Cap Growth Portfolio -- -- -- -0.52% (3/98)
- ------------------------------------------------------------------------------------------------------------------
MFS Research Portfolio -- -- -- 5.28% (3/98)
- ------------------------------------------------------------------------------------------------------------------
Travelers Quality Bond Portfolio 6.98% -- -- 6.75% (8/96)
- ------------------------------------------------------------------------------------------------------------------
Travelers Series Fund, Inc.
- ------------------------------------------------------------------------------------------------------------------
AIM Capital Appreciation Portfolio 15.59% 13.13% -- 10.66% (10/95)
- ------------------------------------------------------------------------------------------------------------------
Putnam Diversified Income Portfolio -0.74% 4.02% -- 6.18% (6/94)
- ------------------------------------------------------------------------------------------------------------------
MFS Total Return Portfolio 10.10% 14.11% -- 13.85% (6/94)
- ------------------------------------------------------------------------------------------------------------------
Variable Annuity Portfolios
- ------------------------------------------------------------------------------------------------------------------
CitiSelect VIP Folio 200 5.83% 6.45% (2/97)
- ------------------------------------------------------------------------------------------------------------------
CitiSelect VIP Folio 300 5.61% 6.77% (2/97)
- ------------------------------------------------------------------------------------------------------------------
CitiSelect VIP Folio 400 1.97% 5.12% (2/97)
- ------------------------------------------------------------------------------------------------------------------
CitiSelect VIP Folio 500 0.17% 4.91% (2/97)
- ------------------------------------------------------------------------------------------------------------------
CitiFunds Small Cap Growth VIP Fund -5.15% 2.60% (2/97)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 37
FEDERAL TAX CONSIDERATIONS
The following description of the federal income tax consequences under
this Contract is not exhaustive and is not intended to cover all situations.
Because of the complexity of the law and the fact that the tax results will vary
according to the factual status of the individual involved, tax advice may be
needed by a person contemplating purchase of an annuity contract and by a
contract owner or beneficiary who may make elections under a contract. For
further information, please consult a qualified tax adviser.
MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS
Federal tax law requires that minimum annual distributions begin by
April 1st of the calendar year following the calendar year in which a
participant under a qualified plan, a Section 403(b) annuity, or an IRA attains
age 70 1/2. Distributions must also begin or be continued according to required
patterns following the death of the contract owner or the annuitant.
NONQUALIFIED ANNUITY CONTRACTS
Individuals may purchase tax-deferred annuities without tax law funding
limits. The purchase payments receive no tax benefit, deduction or deferral, but
increases in the value of the contract are generally deferred from tax until
distribution. If a nonqualified annuity is owned by other than an individual,
however, (e.g., by a corporation), the increases in value attributable to
purchase payments made after February 28, 1986 are includable in income
annually. Furthermore, for contracts issued after April 22, 1987, all deferred
increases in value will be includable in the income of a contract owner when the
contract owner transfers the contract without adequate consideration.
If two or more annuity contracts are purchased from the same insurer
within the same calendar year, distributions from any of them will be taxed
based upon the amount of income in all of the same calendar year series of
annuities. This will generally have the effect of causing taxes to be paid
sooner on the deferred gain in the contracts.
Those receiving partial distributions made before the maturity date
will generally be taxed on an income-first basis to the extent of income in the
contract. If you are exchanging another annuity contract for this annuity,
certain pre-August 14, 1982 deposits into an annuity contract that have been
placed in the contract by means of a tax-deferred exchange under Section 1035 of
the Code may be withdrawn first without income tax liability. This information
on deposits must be provided to the Company by the other insurance company at
the time of the exchange. There is income in the contract generally to the
extent the cash value exceeds the investment in the contract. The investment in
the contract is equal to the amount of premiums paid less any amount received
previously which was excludable from gross income. Any direct or indirect
borrowing against the value of the contract or pledging of the contract as
security for a loan will be treated as a cash distribution under the tax law.
The federal tax law requires that nonqualified annuity contracts meet
minimum mandatory distribution requirements upon the death of the contract
owner, including the first of joint owners. Failure to meet these requirements
will cause the surviving joint owner, or the beneficiary, to lose the tax
benefits associated with annuity contracts, i.e., primarily the tax deferral
prior to distribution. The distribution required depends, among other things,
upon whether an annuity option is elected or whether the new contract owner is
the surviving spouse. Contracts will be administered by the
6
<PAGE> 38
Company in accordance with these rules and the Company will make a notification
when payments should be commenced.
INDIVIDUAL RETIREMENT ANNUITIES
To the extent of earned income for the year and not exceeding $2,000
per individual, an individual may make deductible contributions to an individual
retirement annuity (IRA). There are certain limits on the deductible amount
based on the adjusted gross income of the individual and spouse and based on
their participation in a retirement plan. If an individual is married and the
spouse does not have earned income, the individual may establish IRAs for the
individual and spouse. Purchase payments may then be made annually into IRAs for
both spouses in the maximum amount of 100% of earned income up to a combined
limit of $4,000.
The Code provides for the purchase of a Simplified Employee Pension
(SEP) plan. A SEP is funded through an IRA with an annual employer contribution
limit of 15% of compensation up to $30,000 for each participant.
SIMPLE Plan IRA Form
Effective January 1, 1997, employers may establish a savings incentive
match plan for employees ("SIMPLE plan") under which employees can make elective
salary reduction contributions to an IRA based on a percentage of compensation
of up to $6,000. (Alternatively, the employer can establish a SIMPLE cash or
deferred arrangement under IRS Section 401(k)). Under a SIMPLE plan IRA, the
employer must either make a matching contribution of 100% on the first 3% or 7%
contribution for all eligible employees. Early withdrawals are subject to the
10% early withdrawal penalty generally applicable to IRAs, except that an early
withdrawal by an employee under a SIMPLE plan IRA, within the first two years of
participation, shall be subject to a 25% early withdrawal tax.
ROTH IRAS
Effective January 1, 1998, Section 408A of the Code permits certain
individuals to contribute to a Roth IRA. Eligibility to make contributions is
based upon income, and the applicable limits vary based on marital status and/or
whether the contribution is a rollover contribution from another IRA or an
annual contribution. Contributions to a Roth IRA, which are subject to certain
limitations ($2,000 per year for annual contributions), are not deductible and
must be made in cash or as a rollover or transfer from another Roth IRA or other
IRA. A conversion of a "traditional" IRA to a Roth IRA may be subject to tax and
other special rules apply. You should consult a tax adviser before combining any
converted amounts with other Roth IRA contributions, including any other
conversion amounts from other tax years.
Qualified distributions from a Roth IRA are tax-free. A qualified
distribution requires that the Roth IRA has been held for at least 5 years, and
the distribution is made after age 59 1/2, on death or disability of the owner,
or for a limited amount ($10,000) for a qualified first time home purchase for
the owner or certain relatives. Income tax and a 10% penalty tax may apply to
distributions made (1) before age 59 1/2 (subject to certain exceptions) or (2)
during five taxable years starting with the year in which the first contribution
is made to the Roth IRA.
7
<PAGE> 39
QUALIFIED PENSION AND PROFIT-SHARING PLANS
Under a qualified pension or profit-sharing plan, purchase payments
made by an employer are not currently taxable to the participant and increases
in the value of a contract are not subject to taxation until received by a
participant or beneficiary.
Distributions are taxable to the participant or beneficiary as ordinary
income in the year of receipt. Any distribution that is considered the
participant's "investment in the contract" is treated as a return of capital and
is not taxable. Certain lump-sum distributions may be eligible for special
forward averaging tax treatment for certain classes of individuals.
FEDERAL INCOME TAX WITHHOLDING
The portion of a distribution which is taxable income to the recipient
will be subject to federal income tax withholding as follows:
1. ELIGIBLE ROLLOVER DISTRIBUTION FROM SECTION 403(b) PLANS OR ARRANGEMENTS
OR FROM QUALIFIED PENSION AND PROFIT-SHARING PLANS
There is a mandatory 20% tax withholding for plan distributions that
are eligible for rollover to an IRA or to another retirement plan but that are
not directly rolled over. A distribution made directly to a participant or
beneficiary may avoid this result if:
(a) a periodic settlement distribution is elected based upon a life or
life expectancy calculation, or
(b) a term-for-years settlement distribution is elected for a period of
ten years or more, payable at least annually, or
(c) a minimum required distribution as defined under the tax law is
taken after the attainment of the age of 70 1/2 or as otherwise
required by law.
A distribution including a rollover that is not a direct rollover will
be subject to the 20% withholding, and a 10% additional tax penalty may apply to
any amount not added back in the rollover. The 20% withholding may be recovered
when the participant or beneficiary files a personal income tax return for the
year if a rollover was completed within 60 days of receipt of the funds, except
to the extent that the participant or spousal beneficiary is otherwise
underwithheld or short on estimated taxes for that year.
2. OTHER NON-PERIODIC DISTRIBUTIONS (FULL OR PARTIAL REDEMPTIONS)
To the extent not described as requiring 20% withholding in 1 above,
the portion of a non-periodic distribution which constitutes taxable income will
be subject to federal income tax withholding, if the aggregate distributions
exceed $200 for the year, unless the recipient elects not to have taxes
withheld. If no such election is made, 10% of the taxable distribution will be
withheld as federal income tax. Election forms will be provided at the time
distributions are requested. This form of withholding applies to all annuity
programs.
8
<PAGE> 40
3. PERIODIC DISTRIBUTIONS (DISTRIBUTIONS PAYABLE OVER A PERIOD GREATER THAN ONE
YEAR)
The portion of a periodic distribution which constitutes taxable income
will be subject to federal income tax withholding under the wage withholding
tables as if the recipient were married claiming three exemptions. A recipient
may elect not to have income taxes withheld or have income taxes withheld at a
different rate by providing a completed election form. Election forms will be
provided at the time distributions are requested. This form of withholding
applies to all annuity programs. As of January 1, 1999, a recipient receiving
periodic payments (e.g., monthly or annual payments under an annuity option)
which total $14,700 or less per year, will generally be exempt from periodic
withholding.
Recipients who elect not to have withholding made are liable for
payment of federal income tax on the taxable portion of the distribution. All
recipients may also be subject to penalties under the estimated tax payment
rules if withholding and estimated tax payments are not sufficient to cover tax
liabilities.
Recipients who do not provide a social security number or other
taxpayer identification number will not be permitted to elect out of
withholding. Additionally, U.S citizens residing outside of the country, or U.S.
legal residents temporarily residing outside the country, are not permitted to
elect out of withholding.
INDEPENDENT ACCOUNTANTS
Financial statements as of and for the year ended December 31, 1997
of Citicorp Life Variable Annuity Separate Account, included in the Annual
Report incorporated by reference in this SAI, have been incorporated herein in
reliance on the report of KPMG LLP, independent accountants, given on the
authority of that firm as experts in accounting and auditing.
The financial statements of Citicorp Life Insurance Company as of
December 31, 1997 and 1996, and for each of the years in the three-year period
ended December 31, 1997, are incorporated herein by reference in reliance upon
the report of KPMG LLP, independent certified public accountants, appearing
elsewhere herein, and upon the authority of said firm as experts in accounting
and auditing.
9
<PAGE> 41
CitiElite
STATEMENT OF ADDITIONAL INFORMATION
Individual Variable Annuity Contract
issued by
Citicorp Life Insurance Company
800 Silver Lake Blvd. P.O. Box 7031
Dover,Delaware 19903
L-_______
______, 1999---
10
<PAGE> 42
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
All required financial statements are incorporated by reference to the
registrant's Post-Effective Amendment No. 9 to the registration statement
filed with the Securities and Exchange Commission via Edgarlink on
April 28, 1998 (File 33-81626).
(b) Exhibits
(1) Certified resolution of the board of directors of Citicorp Life
Insurance Company (the "Company") establishing Citicorp Life
Variable Annuity Separate Account (the "Separate Account").*
(2) Not Applicable.
(3) Form of underwriting agreement among the Company, the Separate Account
and CFBDS, Inc.(formerly The Landmark Funds Broker-Dealer Services,
Inc.)*
(4) (a) Contract Form.
(5) Contract Application.
(6) (a) Certificate of Incorporation of the Company.*
(b) By-Laws of the Company.*
(7) None.
(8) (a) Participation Agreement Among MFS Variable Insurance Trust,
Citicorp Life Insurance Company and Massachusetts Financial
Services Company.**
(b) Participation Agreement By and Among AIM Variable Insurance
Funds, Inc. and Citicorp Life Insurance Company, on Behalf of
Itself and Citicorp Life Variable Annuity Separate Account.**
<PAGE> 43
(c) Participation Agreement Among CitiFunds and Citicorp Life
Insurance Company.**
(d) Participation Agreement Between Variable Annuity Portfolios and
Citicorp Life Insurance Company.**
(e) Administrative Services Agreement between Citicorp Insurance
Services, Inc. and Citicorp Life Insurance Company with
Addendums.*
(9) Opinion and Consent of Catherine S. Mulholland, Esq.****
(10) Consent of KPMG LLP.
(11) Not Applicable.
(12) None.
(13) Schedule for Computation of Each Performance Calculation.***
(14) Not Applicable
*Incorporated herein by reference to the registrant's Post-Effective Amendment
No. 2 to the Registration Statement filed with the Securities and Exchange
Commission via EDGARLINK on April 29, 1996(File 33-81626)
**Incorporated herein by reference to the registrant's Post-Effective Amendment
No. 3 to the Registration Statement filed with the Securities and Exchange
Commission via EDGARLINK on November 8, 1996 (File 33-81626).
*** Incorporated herein by referene to the registrant's Post Effective
Amendment No.5 to the registration statement filed with the Securities and
Exchange Commission via EDGARLINK on April 29, 1997 (File 33-81626).
****Incorporated herin by reference to the registrants Post-Effective Amendment
No 10 to the registration statement filed with the Securities and Exchange
Commission via Edgarlink on January 29, 1999. (File 333-71379).
<PAGE> 44
Item 25. DIRECTORS AND OFFICERS OF THE COMPANY.
Alan F. Liebowitz Director*
Daniel F. Forcade Director/President and Chief Operating
Officer*
Marc J. Fink Director/Senior Vice President*
Charles H. Masland, IV Director/Senior Vice President*
Larry D. Williams Director/Senior Vice President
Catherine S. Mulholland Senior Vice President and
General Counsel*
Benjamin G. Spurgeon Senior Vice President and
Chief Actuary/Valuation Actuary
Walter C. Smith, Jr. Vice President/Treasurer
Mark C. Lovejoy Vice President and
Chief Underwriter*
Eric S. Miller Vice President*
Kenneth E. Nelson Vice President*
Richard M. Zuckerman Vice President/Associate General
Counsel and Secretary*
* 800 Silver Lake Boulevard, Dover, DE 19904
<PAGE> 45
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
<TABLE>
<S> <C>
ORGANIZATION CHART
-------------------------
CITIGROUP
(Delaware Corporation)
-------------------------
100%
-------------------------
CITICORP HOLDINGS, INC.
(Delaware Corporation)
-------------------------
100%
-------------------------
CITIBANK DELAWARE
(Delaware Corporation)
-------------------------
100%
----------------------
CITICORP LIFE
INSURANCE COMPANY
(Arizona Corporation)
----------------------
100% 100%
- ------------------------ -----------------------
FIRST CITICORP LIFE CITICORP ASSURANCE
INSURANCE CO
COMPANY (Delaware Corporation)
(New York Corporation) -----------------------
- ------------------------
</TABLE>
<PAGE> 46
ITEM 27. NUMBER OF CONTRACT OWNERS
As of December 31, 1998, there were no contract owners.
ITEM 28. INDEMNIFICATION
The Bylaws of Citicorp Life Insurance Company provide in Article IX as
follows:
(1) The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation)
by reason of the fact he is or was a director or officer of the
Corporation, against expenses (including attorney's fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Corporation, and, with respect
to any criminal action or proceeding, had reasonable cause to believe that
his conduct was unlawful.
(2) The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment
in its favor by reason of the fact that he is or was a director or officer
of the Corporation, against expenses (including attorney's fees) actually
and reasonably incurred by him in connection with the defense or settlement
of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in respect of
any claim, issue or matter as to which such person shall have been adjudged
to be liable for negligence or misconduct in the performance of his duty to
the Corporation unless and only to the extent that the court having
jurisdiction in cases of equity of the State of Arizona or the court in
which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the court having jurisdiction in cases of
equity of the State of Arizona or such other court shall deem proper.
(3) The Corporation may indemnify any person who is or was an employee or agent
of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise to the exent and
under the circumstances provided by paragraphs 1 and 2 of this Article IX
with respect to a person who is or was a director or officer of the
Corporation.
(4) Any indemnification under paragraphs 1, 2 and 3 of this Article IX
(unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification
of the director or officer is proper in the circumstances because he has
met the applicable standard of conduct set forth therein. Such
determination shall be made (a) by the Board of Directors by a majority
vote of a quorum (as defined in the by-laws of the Corporation) consisting
of directors who were not parties to such action, suit or proceeding, or
(b) if such quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so direct, by independent legal counsel in a
written opinion, or (c) by the stockholders.
(5) Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized by the Board
of Directors of the Corporation in the manner provided in the next
preceding paragraph upon receipt of an undertaking by or on behalf of the
director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
Corporation as authorized in this Article IX.
(6) The indemnification provided by this article IX shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any statue, by-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office,
and shall continue as to a person who has ceased to be a director officer,
employee or agent and shall inure to the benefit of the heirs, executors
and administrators of such a person.
(7) By action of its Board of Directors, notwithstanding any interest of
the directors in the action, the Corporation may cause to be purchased and
maintained insurance, in such amounts as the Board of Directors deems
appropriate, on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or of any corporation a majority of
the voting stock of which is owned by the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise, against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not
the Corporation would have the power or would be required to indemnify him
against such liability under the provisions of this Article IX or of the
General Corporation Law of the State of Arizona.
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> 47
ITEM 29. PRINCIPAL UNDERWRITER
(a) CFBDS, Inc., the Registrant's Distributor, is also the distributor for
CitiFunds Cash Reserves, CitiFunds Premium Liquid Reserves, CitiFunds
Tax Free Reserves, CitiFunds New York Tax Free Reserves, CitiFunds
California Tax Free Reserves, CitiFunds Connecticut Tax Free Reserves,
CitiFunds New York Tax Free Income Fund, CitiFunds Balanced Fund,
CitiFunds Equity Fund, CitiFunds Short Term U.S. Government Income
Fund, CitiFunds Intermediate Income Fund, CitiFunds U.S. Treasury
Reserves, CitiFunds Premium U.S. Treasury Reserves, CitiFunds
Institutional Liquid Reserves, CitiFunds Institutional U.S. Treasury
Reserves and CitiFunds Institutitonal Tax Free Reserves. CFBDS, Inc.
is also the placement agent for International Portfolio, Large Cap
Value Portfolio, Intermediate Income Portfolio, Foreign Bond
Portfolio, Short Term Portfolio, Small Cap Value Portfolio, Balanced
Portfolio, Cash Reserves Portfolio, Emerging Asian Markets Equity
Portfolio, U.S. Treasury Reserves Portfolio, Small Cap Growth
Portfolio, Tax Free Reserves Portfolio, International Equity
Portfolio, Large Cap Growth Portfolio, Growth and Income Portfolio and
Government Income Portfolio.
(b) The information required by this item 29 with respect to each director
and officer of CFBDS, Inc. is incorporated by reference to Schedule A
or Form BD filed by CFBDS, Inc pursuant to the Securities and Exchange
Act of 1934 (File No. 8-32417).
(c) Not applicable.
ITEM 30. LOCATION BOOKS AND RECORDS
All of the accounts, books, records or other documents required to be kept by
Section 31(a) of the Investment Company Act of 1940 and rules thereunder, are
maintained by the Company at 800 Silver Lake Blvd Dover Delaware
ITEM 31. MANAGEMENT SERVICES
Not Applicable.
<PAGE> 48
ITEM 32. UNDERTAKINGS AND REPRESENTATIONS
(a) The 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 as long as purchase
payments under the contracts offered herein are being accepted.
(b) The 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
and send to the Company for a statement of additional information.
(c) The registrant undertakes to deliver any statement of additional
information and any financial statements required to be made available
under this Form N-4 promptly upon written or oral request to the
Company at the address or phone number listed in the prospectus.
(d) The Company represents that in connection with its offering of the
contracts as funding vehicles for retirement plans meeting the
requirements of Section 403(b) of the Internal Revenue Code of 1986,
it is relying on a no-action letter dated November 28, 1988, to the
American Council of Life Insurance (Ref. No. IP-6-88) regarding
Sections 22(e), 27(c)(1), and 27(d) of the Investment Company Act of
1940, and that paragraphs numbered (1) through (4) of that letter will
be complied with.
(e) Citicorp Life Insurance Company hereby 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 Citicorp Life Insurance Company.
<PAGE> 49
As required by the Securities Act of 1933 and the Investment
Company Act of 1940, the registrant has caused this Pre-effective amendment to
Registration Statement to be signed on its behalf, in the City of Dover and
the State of Delaware, on this 5th day of April 1999.
CITICORP LIFE VARIABLE ANNUITY
SEPARATE ACCOUNT
(Registrant)
Attest:/s/Catherine S. Mulholland By:/s/Larry D. Williams
-------------------------- ---------------------------------
Senior Vice President of Citicorp
Life Insurance Company
BY: CITICORP LIFE INSURANCE COMPANY
(Depositor)
Attest:/s/Catherine S. Mulholland By:/s/Larry D. Williams
-------------------------- ---------------------------------
Senior Vice President
As required by the Securities Act of 1933, this pre-effective amendment
to the registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/Daniel F. Forcade Director, President April 5, 1999
- ------------------------- ------------------- ----------------
(COO)
/s/Larry D. Williams Director, SVP April 5, 1999
- ------------------------- ------------------ ----------------
/s/Charles H. Masland, IV Director, SVP April 5, 1999
- ------------------------- ------------------ ----------------
/s/Marc J. Fink Director, SVP April 5, 1999
- ------------------------- ------------------- ----------------
/s/Walter C. Smith, Jr. Treasurer, VP April 5, 1999
- ------------------------- ------------------- ----------------
</TABLE>
<PAGE> 50
As required by the Securities Act of 1933 and the Investment
Company Act of 1940, the registrant has caused this pre-effecitve amendment to
the Registration Statement to be signed on its behalf, in the City of Dover,
and the State of Delaware, on this 5th day of April, 1999.
CITICORP LIFE VARIABLE ANNUITY
SEPARATE ACCOUNT
(Registrant)
Attest:/s/Catherine S. Mulholland By:/s/Larry D. Williams
-------------------------- --------------------------------
Senior Vice President of Citicorp
Life Insurance Company
BY: CITICORP LIFE INSURANCE COMPANY
(Depositor)
Attest:/s/Catherine S. Mulholland By:/s/Larry D. Williams
-------------------------- --------------------------------
Senior Vice President
As required by the Securities Act of 1933, this pre-effective amendment
to the registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/Alan F. Liebowitz Director April 5, 1999
- ------------------------ -------------------- -----------------
</TABLE>
<PAGE> 51
EXHIBIT INDEX
4(a). Contract Form
5. Contract Application
9. Consent of KPMG LLP
<PAGE> 1
EXHIBIT 4
CITICORP LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Administrative Offices: 800 Silver Lake Blvd.
P. O. Box 7031
Dover, DE 19903
A STOCK COMPANY
We are pleased to provide You the benefits of this Variable
Annuity Contract. Please read Your Contract and all attached forms
carefully.
RIGHT TO EXAMINE THIS CONTRACT
IF THIS CONTRACT IS ISSUED AS AN INDIVIDUAL RETIREMENT ANNUITY
(IRA), AND THE CONTRACT IS RETURNED TO US AT OUR OFFICE OR TO OUR
AGENT WITHIN 7 DAYS OF ITS DELIVERY TO YOU, WE WILL PAY YOU THE
FULL AMOUNT OF ANY PURCHASE PAYMENT MADE, WITHOUT ADJUSTMENT FOR
ANY PREMIUM TAX OR CONTRACT CHARGES PAID. IF THIS CONTRACT IS
RETURNED WITHIN 8 TO 20 DAYS OF ITS DELIVERY TO YOU, WE WILL PAY
YOU THE CONTRACT VALUE AS STATED BELOW. AFTER THE CONTRACT IS
RETURNED, IT WILL BE CONSIDERED AS NEVER IN EFFECT.
IF THIS CONTRACT IS ISSUED AS A NONQUALIFIED CONTRACT OR A
QUALIFIED CONTRACT (OTHER THAN AN IRA) AND RETURNED TO US AT OUR
OFFICE OR TO OUR AGENT TO BE CANCELED WITHIN 20 DAYS AFTER ITS
DELIVERY TO YOU, WE WILL PAY YOU THE CONTRACT VALUE DETERMINED AS
OF THE NEXT VALUATION DATE AFTER WE RECEIVE THE WRITTEN REQUEST AT
OUR OFFICE, PLUS ANY PREMIUM TAX AND CONTRACT CHARGES PAID. AFTER
THE CONTRACT IS RETURNED, IT WILL BE CONSIDERED AS NEVER IN
EFFECT.
This Contract is issued in consideration of the Purchase Payments.
It is subject to the terms and conditions stated on the attached
pages, all of which are parts of it.
Executed at Dover, Delaware
President
This is a legal Contract between You and Us. READ YOUR CONTRACT CAREFULLY.
FLEXIBLE PREMIUM INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACT
LIFE ANNUITY COMMENCING AT MATURITY DATE
ELECTIVE OPTIONS NON-PARTICIPATING
VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT EXPERIENCE OF
THE SEPARATE ACCOUNT, MAY INCREASE OR DECREASE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
[Right to Examine this Contract Cover Page
Contract Specifications Page 3
Definitions Page 7
Ownership, Beneficiary and Annuitant Provisions Page 9
Purchase Payment and Valuation Provisions Page 11
Death Benefit Provisions Page 14
Settlement Provisions Page 15
General Provisions Page 17
Table of Values Page 19
Annuity Tables Page 20]
</TABLE>
Any Amendments, Riders or Endorsements follow the Annuity Tables.
2
<PAGE> 3
================================================================================
CONTRACT SPECIFICATIONS
================================================================================
CONTRACT NUMBER [SPECIMEN]
OWNER [JOHN DOE]
[JOINT OWNER] [ ]
ANNUITANT [JOHN DOE ]
[CONTINGENT ANNUITANT]
CONTRACT DATE [FEBRUARY 1, 1999]
MATURITY DATE [DECEMBER 31, 2015]
- --------------------------------------------------------------------------------
PURCHASE PAYMENTS:
MINIMUM INITIAL PURCHASE PAYMENT: [$5,000 Aggregate Purchase Payments in
the First Contract Year]
MINIMUM SUBSEQUENT PURCHASE PAYMENT:[$100]
MAXIMUM PURCHASE PAYMENT: $1,000,000 unless We consent to a larger amount
AMOUNTS DEDUCTED ON SURRENDER (FIRST IN, FIRST OUT BASIS):
<TABLE>
<CAPTION>
YEARS SINCE PURCHASE PAYMENT WAS PAID PERCENT OF PURCHASE PAYMENTS
- ------------------------------------- (NOT PREVIOUSLY SURRENDERED)
----------------------------
<S> <C>
1 - 3 7%
4 6%
5 5%
6 4%
7 3%
8+ 0%
</TABLE>
On an annual basis, You may take partial surrenders of up to 15% of Your
Contract Value. The Contract Value is determined as of the first Valuation Date
of that Contract Year without imposition of amounts deducted on surrender. We
reserve the right to not permit a Withdrawal Allowance on a full surrender.
ASSUMED DAILY NET INVESTMENT FACTOR: Upon annuitization, the Assumed Daily Net
Investment Factor is 1.000081 for each Funding Option.
CONTRACT CHARGE: $30.00, annually. This charge will be taken on the[ fourth
Friday of August of each year.] No Contract Charge will be deducted from the
Fixed Account.
TERMINATION: We reserve the right to terminate this Contract when the Contract
Value is less than $1,000 and no Purchase Payments have been made for at least
two years.
TRANSFER CHARGE: We reserve the right to assess a transfer charge of up to
$10.00 on transfers exceeding 12 per year. We will notify You In Writing at your
last know address at least 31 days' prior to the imposition of any such Transfer
Charge.
3
<PAGE> 4
================================================================================
CONTRACT SPECIFICATIONS
================================================================================
INVESTMENT OPTIONS:
FIXED ACCOUNT GUARANTEED INTEREST PERIODS: The initial rate for any Purchase
Payment is guaranteed for one year from the date it is credited to your Annuity
account. Subsequent renewal rates will be guaranteed for the calendar quarter.
You may transfer up to [15%] of the Fixed Account value to any of the Funding
Options twice a year during the 30 days following the semi-annual Contract Date
anniversary.
SEPARATE ACCOUNT:
[CITICORP LIFE VARIABLE ANNUITY SEPARATE ACCOUNT]
FUNDING OPTIONS-
<TABLE>
<S> <C>
[Travelers High Yield Bond Trust The Travelers Series Trust
Travelers Money Market Portfolio Large Cap Portfolio (Fidelity sub-adviser)
Salomon Brothers Variable Series Funds, Inc. MFS Research Portfolio
Salomon Brothers Variable Capital Fund MFS Mid Cap Growth Portfolio
Salomon Brothers Variable High Yield Bond Fund Travelers Quality Bond Portfolio
Salomon Brothers Variable Investors Fund Variable Annuity Portfolios
Salomon Brothers Variable Total Return Fund CitiSelect(R) VIP Folio 200
Travelers Series Fund, Inc. CitiSelect(R) VIP Folio 300
AIM Capital Appreciation Portfolio CitiSelect(R) VIP Folio 400
MFS Total Return Portfolio CitiSelect(R) VIP Folio 500
Putnam Diversified Income Portfolio CitiFunds Small Cap Growth VIP Portfolio]
Templeton Variable Products Series Fund
Franklin Small Cap Investments Fund Class II
Templeton International Fund Class II
</TABLE>
Information about the Separate Account is provided in the prospectus for
[Citicorp Life Variable Annuity Separate Account.]
UNDERLYING FUND DEDUCTIONS:
The Administrative Charge and the Mortality and Expense Risk Charge result in a
daily deduction of .0000384 per Funding Option. When expressed on an annual
basis, assuming a 365-day year, the deduction equals 1.40% per Underlying Fund.
ADMINISTRATIVE CHARGE: .15% on an annual basis
MORTALITY AND EXPENSE RISK CHARGE: 1.25% on an annual basis
4
<PAGE> 5
================================================================================
DEFINITIONS
================================================================================
ACCOUNT(s) - the Sub-Accounts and/or the Fixed Account under this Contract.
ACCUMULATION UNIT - an accounting unit of measure used to calculate the value of
this Contract before Annuity payments begin.
AGE - age last birthday.
ANNUITANT - the person on whose life the Maturity Date and Annuity payments
depend.
ANNUITY UNIT - an accounting unit of measure used to calculate the amount of
Annuity Payments.
CODE - the Internal Revenue Code of 1986, as amended, and all related laws and
regulations, which are in effect during the term of this Contract.
CONTRACT - a Contract that describes the benefits, rights and obligations of the
Owner and Us.
CONTRACT DATE - the date on which the Contract is issued.
CONTRACT YEARS - twelve-month periods beginning with the Contract Date.
DEATH REPORT DATE - the Valuation Date coincident with or next following the day
on which We have received 1) Due Proof of Death and 2) a Written Request for an
election of a single sum payment or an alternate Settlement Option as described
in the Contract.
DUE PROOF OF DEATH - (i) a copy of a certified death certificate; (ii) a copy of
a certified decree of a court of competent jurisdiction as to the finding of
death; (iii) a written statement by a medical doctor who attended the deceased;
or (iv) any other proof satisfactory to Us.
FIXED ACCOUNT - an account that consists of the assets under this Contract other
than those in the Separate Account.
FUNDING OPTION - an open-end diversified management investment company or
portfolio thereof, indicated in the Contract Specifications, which serves as a
variable investment option under the Separate Account.
MATURITY DATE - the date on which the Annuity payments are to begin.
NONQUALIFIED CONTRACT - a Contract other than a Qualified Contract.
OUR OFFICE - the Home Office of Citicorp Life Insurance Company or any other
office which We may designate for the purpose of administering this Contract.
PREMIUM TAX - the amount of tax, if any, charged by a state or municipality. We
will deduct any applicable Premium Tax from the Contract Value either upon
surrender, annuitization, death, or at the time a Purchase Payment is made, but
no earlier than when We have the liability under state law.
PURCHASE PAYMENTS - payments of premium You make to Us under this Contract.
QUALIFIED CONTRACT - a contract used in a retirement plan or program that is
intended to qualify under Sections 401, 403, 408, or 414(d) of the Code.
RECORDED - a Written Request is Recorded when the information is noted in Our
file for this Contract.
SEPARATE ACCOUNTS - the Separate Accounts indicated in the Contract
Specifications which We established for this class of Contracts and certain
other Contracts.
5
<PAGE> 6
SETTLEMENT OPTIONS - an Annuity or Income option elected under this contract.
SUB-ACCOUNT - that portion of the assets of a Separate Account which is
allocated to a particular Funding Option.
TERMINATION - discontinuance of this Contract by Us or by Your Written Request.
VALUATION DATE -a date on which a Sub-Account is valued, which is every day the
New York Stock Exchange is open for trading (except for when trading is
restricted due to an emergency as defined by the Securities and Exchange
Commission.)
VALUATION PERIOD - the period beginning at the close of business of the New York
Stock Exchange on each Valuation Date and ending at the close of business for
the next succeeding Valuation Date. Also referred to as the period between
successive valuations.
WE, US, OUR - Citicorp Life Insurance Company.
WRITTEN REQUEST - written information including requests for Contract changes
sent to Us in a form and content satisfactory to Us and received at Our Office.
YOU, YOUR - the Owner, including a Joint Owner.
6
<PAGE> 7
================================================================================
OWNERSHIP, BENEFICIARY AND ANNUITANT PROVISIONS
================================================================================
OWNERSHIP
This Contract belongs to the Owner shown in the Contract Specifications or to
any person subsequently named in a Written Request of Transfer of Ownership as
provided below. As Owner, You have sole power during the Annuitant's lifetime to
exercise any rights and to receive all benefits given in this Contract provided
You have not named an irrevocable Beneficiary and provided the Contract is not
assigned.
You will be the recipient of all payments while the Annuitant is alive unless
You direct them to an alternate recipient under a Recorded payment direction. An
alternate recipient under a payment direction does not become the Owner. A
payment direction is revocable by You at any time by Written Request giving 30
days advance notice.
JOINT OWNERS
Joint Owners may be named in a Written Request prior to the Contract Date. Joint
Owners may independently exercise transfers between accounts. All other rights
of ownership must be exercised by Joint action. Joint Owners own equal shares of
any benefits accruing or payments made to them. All rights of a Joint Owner end
at death if another Joint Owner survives. The entire interest of the deceased
Joint Owner in this Contract will pass to the surviving Joint Owner.
If a Joint Owner dies before payment of an Annuity or Income Option begins and
is survived by the Annuitant, any surviving Joint Owner is the "designated
beneficiary" referred to in Section 72(s) of the Code, and his or her rights
pre-empt those of the Beneficiary named in a Written Request.
TRANSFER OF OWNERSHIP
You may transfer ownership by Written Request. You may not revoke any transfer
after the effective date of such transfer. Once the Transfer of Ownership is
Recorded by Us, it will take effect as of the date of Your Request, subject to
any payments made or other actions taken by Us before the recording.
Unless provided otherwise, a Transfer of Ownership does not affect the interest
of any Beneficiary designated prior to the effective date of the transfer.
A Transfer of Ownership may have adverse tax consequences to You as the former
Owner; please consult Your tax advisor.
ASSIGNMENT
You may collaterally assign ownership, of all or a portion of this Contract by
Written Request without the approval of any Beneficiary unless irrevocably
named. You may not exercise any rights of ownership while the assignment remains
in effect without the approval of the collateral assignee. We are not
responsible for the validity of any Assignment. Once the collateral Assignment
is Recorded by Us, it will take effect as of the date of Your Written Request,
subject to any payments made or other actions taken by Us before the Request is
received.
If a claim is made based on an Assignment, We may require proof of interest of
the claimant. A Recorded Assignment takes precedence over any rights of a
Beneficiary. Any amounts due under a Recorded assignment will be paid in a
single sum.
An Assignment may have adverse tax consequences to You; please consult Your tax
advisor.
CREDITOR CLAIMS
To the extent permitted by law, no right or benefit of the Owner or Beneficiary
under this Contract shall be subject to the claims of creditors or any legal
process except as may be provided by an assignment.
BENEFICIARY
The Beneficiary is the party named in a Written Request. The Beneficiary has the
right to receive any remaining contractual benefits upon the death of the
Annuitant, or under certain circumstances, upon the death of the Owner. If there
is more than one Beneficiary surviving the Annuitant, the Beneficiaries will
share equally in benefits unless different shares are Recorded with Us by
Written Request prior to the death of the Annuitant.
7
<PAGE> 8
If a Joint Owner dies before payment of an Annuity Option begins and is survived
by the Annuitant, any surviving Joint Owner is the "designated beneficiary"
referred to in Section 72(s) of the Code, and his or her rights pre-empt those
of the Beneficiary named in a Written Request.
Unless an irrevocable Beneficiary has been named, You have the right to change
any Beneficiary by Written Request during the lifetime of the Annuitant and
while the Contract continues.
Once a change in Beneficiary is Recorded by Us, it will take effect as of the
date of the Written Request, subject to any payments made or other actions taken
by Us before the recording.
If no Beneficiary has been named by You, or if no Beneficiary is living when the
Annuitant dies, the interest of any Beneficiary will pass:
(a) if You are living, to You; or
(b) if You have died and there is a surviving Joint Owner, to the Joint
Owner; or
(c) if You have died and there is not a Joint Owner surviving, to Your
estate.
ANNUITANT
The Annuitant is the individual shown in the Contract Specifications on whose
life Annuity payments are based. The Annuitant may not be changed after the
Contract Date.
CONTINGENT ANNUITANT
You may name one individual as a Contingent Annuitant by Written Request prior
to the Contract Date. A Contingent Annuitant may not be changed, deleted or
added to the Contract after the Contract Date. For purposes of this provision
the Owner cannot be the Annuitant.
If the Annuitant dies prior to the Maturity Date while this Contract is
in effect and while the Contingent Annuitant is living:
(a) the death benefit will not be payable upon the Annuitant's death; and
(b) the Contingent Annuitant becomes the Annuitant; and
(c) all other rights and benefits provided by this Contract will continue
in effect.
When a Contingent Annuitant becomes the Annuitant, the Maturity Date remains the
same as previously in effect, unless otherwise provided.
8
<PAGE> 9
================================================================================
PURCHASE PAYMENT AND VALUATION PROVISIONS
================================================================================
PURCHASE PAYMENT
PURCHASE PAYMENT
Purchase Payments are the payments You make for this Contract and the benefits
it provides. [An initial Purchase Payment must be made to the Contract and is
due and payable before the Contract becomes effective.] [The aggregate of all
Purchase Payments made within the first twelve months after the Contract date
must be no less than $5,000.] Each Purchase Payment is payable as shown on the
Contract Specifications to us at Our Office or to one of our authorized
representatives. Once the minimum aggregate Purchase Payments in the first
Contract year have been paid, no additional Purchase Payments are required to
continue this contract in force, except as provided in the "Termination"
provision.
Net Purchase Payments are that part of your Purchase Payments applied to the
Contract Value. A net Purchase Payment is equal to the Purchase Payment less any
applicable premium tax charge.
ALLOCATION OF PURCHASE PAYMENT
We will apply any net Purchase Payment to provide Accumulation Units of selected
Funding Options and/or the Fixed Account of this Contract. The initial Purchase
Payment will be applied within two business days following its receipt at Our
Office. The net Purchase Payment will be allocated to the Funding Options and/or
the Fixed Account in the proportion specified by You for this Contract. The
available Underlying Funds to which Funding Option assets are allocated are
shown in the Contract Specifications; Underlying Funds may be subsequently added
or deleted.
FUNDING OPTION VALUATION
NUMBER OF ACCUMULATION UNITS
The number of Accumulation Units to be credited to each Funding Option once a
Purchase Payment has been received by Us will be determined by dividing the net
Purchase Payment applied to that Funding Option by the then Accumulation Unit
Value of that Funding Option.
ACCUMULATION UNIT VALUE
We determine the value of an Accumulation Unit in each Funding Option on each
Valuation Date by multiplying the value on the preceding Valuation Date by the
net investment factor for that Funding Option for the Valuation Period just
ended.
The value of an Accumulation Unit on any date other than a Valuation Date will
be equal to its value as of the next Valuation Date.
NET INVESTMENT FACTOR
The net investment factor is a factor applied to measure the investment
performance of a Funding Option from one Valuation Period to the next. The net
investment factor for a Funding Option for any Valuation Period is equal to the
sum of 1.0000 plus the net investment rate.
Each Funding Option's net investment rate for a Valuation Period is equal to the
gross investment rate for that Funding Option, less the applicable Funding
Option deduction for the Valuation Period.
All Funding Option deductions are shown in the Contract Specifications.
The gross investment rate of a Funding Option for a Valuation Period is equal to
(1) divided by (2):
where (1) is:
(a) investment income, plus
(b) capital gains and losses, whether realized or unrealized, less
(c) a deduction for any tax levied against the Separate Account and its
Underlying Funds;
and (2) is the amount of the assets at the beginning of the Valuation Period.
The gross investment rate is based on the net asset value of the Underlying Fund
and may be either positive or negative. Investment income includes any
distribution whose ex-dividend date occurs during the Valuation Period.
9
<PAGE> 10
FIXED ACCOUNT VALUATION
NUMBER OF ACCUMULATION UNITS - We will determine the number of Accumulation
Units to be credited to the Fixed Account upon receipt of a Purchase Payment by
dividing the net Purchase Payment applied to the Fixed Account by the then
dollar value of one Accumulation Unit Value of the Fixed Account.
ACCUMULATION UNIT VALUE - We determine the value of an Accumulation Unit in the
Fixed Account on any day by multiplying the value on the immediately preceding
day by the net interest factor for the day on which the value is being
determined.
NET INTEREST FACTOR - The net interest factor for any day is the guaranteed net
interest rate which is equivalent to an effective annual interest rate of 3.00%,
plus 1.0000. The method of crediting additional interest will be at Our
discretion.
Interest is declared in advance. Before Annuity or Income payments begin, We may
credit the Fixed Account with annual interest rates higher than the minimum
guaranteed interest rate of 3.00%. Interest rates may be higher or lower than
the initial interest rates, but not less than the minimum guaranteed interest
rate of 3.00%. Additional amounts may be credited by Us at Our discretion for
the guaranteed interest periods shown in the Contract Specifications.
TRANSFER BETWEEN ACCOUNTS
You may transfer all or any part of the Contract Value from one Funding Option
to any other Funding Option at any time up to 30 days before the due date of the
first Annuity or Income payment. Additionally, You may transfer a part of the
Fixed Account value to any of the Funding Options, twice a year during the 30
days following the semi-annual Contract Date Anniversary in the amount shown in
the Contract Specifications.
Amounts may generally be transferred from the Funding Options to the Fixed
Account at any time, up to 30 days before the due date of the first Annuity
payment. Amounts previously transferred from the Fixed Account to the Funding
Options may not be transferred back to the Fixed Account for a period of at
least 6 months from the date of transfer. We reserve the right to limit the
number of transfers from one Funding Option to any other Funding Option or to
the Fixed Account. We will not limit these transfers to less than one in any
six-month period.
Transfers between Accounts will result in the addition or deletion of
Accumulation Units having a total value equal to the dollar amount being
transferred to or from a particular Account. The number of Accumulation Units
will be determined by using the Accumulation Unit Value of the Accounts involved
as of the next valuation after We receive notification of request for transfer.
Transfers will be subject to any applicable Transfer charge stated in the
Contract Specifications.
CONTRACT VALUES
CONTRACT VALUE
The Contract Value on any date equals the sum of the accumulated values in the
Funding Options. The accumulated value in a Funding Option equals the number of
outstanding Accumulation Units credited to that Funding Option, multiplied by
the then current Accumulation Unit Value for that Funding Option.
The Guaranteed Value of the Fixed Account equals the accumulated value of the
net Purchase Payments applied to the Fixed Account calculated by using the
guaranteed Net Interest Factor. The Guaranteed Values of the Fixed Account are
shown in the Table of Values.
CONTRACT CHARGE
A Contract Charge as shown in the Contract Specifications will be deducted to
reimburse Us for administrative expenses relating to the Contract. The Contract
Charge will be deducted by surrendering on a pro rata basis Accumulation Units
from all Funding Options in which You have an interest.
We will deduct the charge on a pro rata basis if the Contract has been in effect
for less than a full period on the date a Contract Charge is deducted. The
Contract Charge will also be prorated upon full surrender or Termination of the
Contract.
10
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CASH SURRENDER VALUE
The Cash Surrender Value is equal to the Contract Value less any applicable
charges and fees as shown in the Contract Specifications, less any taxes
deducted upon surrender, and any outstanding loan balance.
The Guaranteed Cash Surrender Value of the Fixed Account equals the Guaranteed
Value of the Fixed Account less any applicable charges and fees as shown in the
Contract Specifications, less any taxes deducted upon surrender and less any
outstanding loan balance. For Guaranteed Cash Surrender Values of the Fixed
Account, refer to the Table of Values.
CASH SURRENDER
You may elect by Written Request to receive the Cash Surrender Value before the
due date of the first Annuity or Income payment and without the consent of any
Beneficiary unless irrevocably named. In the case of a full surrender, this
Contract will be canceled. A partial surrender will reduce Your Contract Value.
If You have a balance in more than one Investment Option, Your Contract Value
will be reduced from all Your Investment Options on a pro rata basis, unless You
request otherwise.
The Cash Surrender Value will be determined as of the next Valuation Date
following receipt of Your Written Request. We may delay payment of the Cash
Surrender Value of the Funding Options for a period of not more than five
business days after We receive Your Written Request. We may delay payment of the
Cash Surrender Value of the Fixed Account for a period of not more than
six-months after We receive Your Written Request.
CONTRACT CONTINUATION
Except as provided in the Termination provision, this Contract does not require
continuing Purchase Payments and will automatically continue as a paid-up
Contract during the lifetime of the Annuitant until the Maturity Date, or until
it is surrendered.
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================================================================================
DEATH BENEFIT PROVISIONS
================================================================================
DEATH OF ANNUITANT
A death benefit is payable to the Beneficiary upon the death of the Annuitant
before the Maturity Date, unless there is a Contingent Annuitant surviving. A
death benefit is also payable under those Settlement Options which provide for
death benefits. We will pay the Beneficiary the death benefit in a single sum as
described below upon receiving Due Proof of Death. A Beneficiary may request
that a death benefit payable under this Contract be applied to a Settlement
Option subject to the provisions of this Contract and the current tax laws.
DEATH OF OWNER WITH ANNUITANT SURVIVING
If the Owner is not the Annuitant, and the Owner (including the first of Joint
Owners) dies before the Maturity Date with the Annuitant surviving, We will
recalculate the value of the death benefit under the provisions of Death
Proceeds Prior To The Maturity Date below; by replacing all references to
"Annuitant" with "Owner." The value of the death benefit, as recalculated, will
be paid in a single lump sum or by other election to the party taking proceeds
under the current tax laws. The party must take distributions no later than
under the applicable elections of that provision.
DEATH PROCEEDS PRIOR TO THE MATURITY
If the Annuitant is younger than age 76 on the Contract Date, the death benefit
payable as of the Death Report Date will be the greatest of a), b) or c) below,
less any applicable premium tax and outstanding loans:
a) the Contract Value on the Death Report Date
b) the total Purchase Payments less the total amount of any partial
surrenders made under this Contract; or
c) the Step-Up Value (if any, as described below).
STEP UP VALUE
WHERE ANNUITANT WAS YOUNGER THAN AGE 68 ON THE CONTRACT DATE
A Step-Up Value will be established on the seventh Contract date
anniversary which occurs on or prior to the Death Report Date. The
initial Step-Up Value will equal the Contract Value on that
anniversary. Whenever a Purchase Payment is made, the Step-Up
Value will be increased by the amount of that Purchase Payment.
Whenever a partial surrender is taken, the Step-Up Value will be
reduced by a Partial Surrender Reduction as described below. On
each Contract Date anniversary that occurs before the Annuitant's
76th birthday and before the Annuitant's death, if the Contract
Value is greater than the Step-Up Value, the Step-Up Value will be
reset to equal the Contract Value on that date. If the Step-Up
Value is greater than the Contract Value, the Step-Up Value will
remain unchanged. The Step-Up Value will not be reduced on these
anniversary recalculations (provided no surrenders are made on
that day). The only changes made to the Step-Up Value on or after
the Annuitant's 76th birthday will be those related to additional
Purchase Payments or partial surrenders as described above.
WHERE ANNUITANT WAS AGE 68 THROUGH 75 ON THE CONTRACT DATE
A Step-Up Value will be established on the seventh contract date
anniversary prior to the Death Report Date. The Step-Up Value
will equal the Contract Value on that anniversary. Whenever a
Purchase Payment is made, the Step-Up Value will be increased by
the amount of that Purchase Payment. Whenever a partial surrender
is taken, the Step-Up Value will be reduced by a Partial
Surrender Reduction as described below. The only changes made to
the Step-Up Value on or after the seventh Contract Date
anniversary will be those related to additional Purchase Payments
or partial surrenders as described above.
PARTIAL SURRENDER REDUCTION
The Partial Surrender is equal to 1) the Step-up Value in effect
immediately prior to the reduction for the partial surrender,
multiplied by 2) the amount of the partial surrender divided by 3)
the Contract Value immediately prior to the partial surrender.
If the Annuitant is age 76 or older on the Contract Date, the death benefit
payable as of the Death Report Date will be the Contract Value on the Death
Report Date, less any applicable premium tax and outstanding loans.
We must be notified no later than six months from the date of death in order for
Us to make payment of proceeds as described above. If notification is received
more than six months after the date of death, the death benefit payable will be
the Contract Value on the Death Report Date, less any applicable premium tax and
outstanding loans.
DEATH PROCEEDS AFTER THE MATURITY DATE
If the Annuitant dies on or after the Maturity Date, We will pay the Beneficiary
a death benefit consisting of any benefit remaining under the Annuity or Income
option then in effect.
INTEREST ON DEATH PROCEEDS
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<PAGE> 13
Any interest on death proceeds will be paid in accordance with rules in effect
in Your state at the time of death.
13
<PAGE> 14
================================================================================
SETTLEMENT PROVISIONS
================================================================================
MATURITY DATE
The Maturity Date is shown on the CONTRACT SPECIFICATIONS. This is the date on
which we will begin paying to You the first of a series of Annuity or Income
payments in accordance with the Settlement Option elected by you. Annuity or
Income payments will begin under this contract on the Maturity Date unless the
contract has been fully surrendered or the proceeds have been paid to the
Beneficiary prior to that date. We may require proof that the Annuitant is alive
before Annuity payments are made. If no Maturity Date is specified, the
automatic Maturity Date will be the greater of when the Annuitant reaches age
90, or ten years after the Contract Date.
Additionally, to the extent permitted by law, at least 30 days before the
original Maturity Date, you may change the Maturity Date by Written Request to
anytime prior to the Annuitant's 90th birthday, or to a later date with our
consent.
ELECTION OF SETTLEMENT OPTIONS
On the Maturity Date, or other agreed upon date, We will pay the amount payable
under this Contract to You in one lump sum or in accordance with an Annuity or
Income Option elected by You. While the Annuitant is alive, You may change Your
Settlement Option election by Written Request, but only before the Maturity
Date. We reserve the right to require satisfactory proof of the Age of any
person on whose life Annuity payments are based before making the first payment
under any Annuity Option.
During the Annuitant's lifetime, if no election has been made by the Maturity
Date, We will pay You the first of a series of periodic Annuity payments based
on the life of the Annuitant, in accordance with Annuity Option 2, with 120
monthly payments assured.
Once Annuity payments have commenced, no election changes are allowed.
MINIMUM AMOUNTS
The minimum amount that can be placed under a Settlement Option is $2,000 unless
We consent to a lesser amount. If any periodic payments due are less than $100,
We reserve the right to make payments at less frequent intervals.
ALLOCATION OF ANNUITY
At the time an election of one of the Annuity Options is made, the person
electing the option may elect to have the Cash Surrender Value applied to
provide a Variable Annuity, a Fixed Annuity or a combination of both.
If no election is made to the contrary, the value of a Funding Option will be
applied when Annuity payments start to provide an Annuity which varies with the
investment experience of that same Funding Option and the value of the Fixed
Account will be applied to provide a Fixed Annuity.
You may elect to transfer Contract Value from one Investment Option to another,
as described in the provision Transfer Between Investment Options, in order to
reallocate the basis on which Annuity payments will be determined. Once Annuity
payments start, You may, with Our consent, change the allocation of Your values
in each Funding Option.
VARIABLE ANNUITY
AMOUNT OF BASIC FIRST PAYMENT
The Life Annuity Tables are used to determine the basic first monthly Annuity
payment. They show the dollar amount of the basic first monthly Annuity payment
which can be purchased with each $1,000 applied. The amount applied to a
Variable Annuity will be the Cash Surrender Value as of 14 days before the date
Annuity payments start. We reserve the right to require satisfactory proof of
the age of any person on whose life Annuity Payments are based before making the
first payment under any of these options.
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<PAGE> 15
ANNUITY UNIT VALUE
On any Valuation Date, the Annuity Unit Value for a Funding Option equals the
Funding Option Annuity Unit Value on the preceding Valuation Date, multiplied by
the net investment factor for that Funding Option for the Valuation Period just
ended, divided by the Assumed Daily Net Investment Factor. The Assumed Daily Net
Investment Factor is shown in the Contract Specifications. The Value of an
Annuity Unit on any date other than a Valuation Date will be equal to its value
as of the next Valuation Date.
NUMBER OF ANNUITY UNITS
We determine the number of Annuity Units credited to this Contract in each
Funding Option by dividing the first monthly Annuity payment attributable to
that Funding Option by the Funding Option's Unit Value as of 14 days before the
due date of the first Annuity payment.
AMOUNT OF SECOND AND SUBSEQUENT PAYMENTS
The dollar amount of the second and subsequent payments may change from month to
month. The total amount of each Annuity payment will be equal to the sum of the
basic payments in each Funding Option.
The actual amount of the basic payments in each Funding Option is found by
multiplying the number of Annuity Units credited to the Contact in that Funding
Option by the Annuity Unit Value for that Funding Option as of the date 14 days
prior to the date on which the payment is due.
FIXED ANNUITY
A Fixed Annuity is an Annuity with payments which remain fixed as to dollar
amount throughout the payment period. The dollar amount of the first Fixed
Annuity payment will be calculated as described above in the "Amount of Basic
First Payment" provision. All subsequent payments will be in the same amount and
that amount will be assured throughout the payment period If it would produce a
larger payment, the Fixed Annuity payment will be determined using the Life
Annuity Tables in effect on the Maturity Date.
ANNUITY OPTIONS
Subject to conditions stated in Elections Of Settlement Options and Minimum
Amounts, all or any part of the Cash Surrender Value of this Contract may be
paid under one or more of the Annuity Options below. We may offer additional
options.
OPTION 1. LIFE ANNUITY - NO REFUND
We will make periodic Annuity payments during the lifetime of the person on
whose life the payments are based, ending with the last payment preceding death.
OPTION 2. LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS ASSURED
We will make periodic Annuity payments during the lifetime of the person on
whose life the payments are based. If at the death of that person, payments have
been made for less than 120, 180, or 240 months, as elected, We will continue to
make payments to the designated Beneficiary during the remainder of the period.
OPTION 3. JOINT AND LAST SURVIVOR LIFE ANNUITY
We will make periodic Annuity payments during the Joint lifetime of two persons
on whose lives payments are based and during the lifetime of the survivor. No
more payments will be made after the death of the survivor.
OPTION 4. JOINT AND LAST SURVIVOR LIFE ANNUITY - ANNUITY REDUCED ON DEATH OF
PRIMARY PAYEE
We will make periodic Annuity payments during the Joint lifetime of two persons
on whose lives payments are based. One of the two persons will be designated as
the primary payee. The other will be designated as the secondary payee. On the
death of the secondary payee, if survived by the primary payee, We will continue
to make periodic Annuity payments to the primary payee in the same amount that
would have been payable during the Joint lifetime of the two persons. On the
death of the primary payee, if survived by the secondary payee, We will continue
to make periodic Annuity payments to the secondary payee in an amount equal to
50% of the payments which would have been made during the lifetime of the
primary payee. No further payments will be made following the death of the
survivor.
OPTION 5. OTHER ANNUITY OPTIONS
We will make any other arrangements for Annuity payments as may be mutually
agreed by You and Us.
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<PAGE> 16
INCOME OPTIONS
We will pay all or any part of the Cash Surrender Value to You under one or more
of the Income Options below subject to the conditions stated in Election Of
Settlement Options and Minimum Amounts and the currently effective tax
qualification rider.
The Cash Surrender Value used to determine the amount of any Income payment will
be based on the Accumulation Unit Value as of 14 days before the date an Income
payment is due and will be determined the same way as in the Accumulation
period.
OPTION 1. PAYMENTS OF A FIXED AMOUNT
We will make equal payments each month in the amount elected until the Cash
Surrender Value applied under this option is gone.
The first monthly payment will be paid from each Investment Option in proportion
to its Cash Surrender Values applied.
The second payment and all later payments from each Investment Option will be
the same as the first payment under this option. The final payment will include
any amount that is not enough to make another full payment.
OPTION 2. PAYMENTS FOR A FIXED PERIOD
We will make monthly payments for the period selected. The amount of each
payment will be equal to the then remaining Cash Surrender Value applied under
this option divided by the number of remaining payments.
OPTION 3. OTHER INCOME OPTIONS
We will make any other arrangements for Income payments as may be mutually
agreed upon by You and Us.
16
<PAGE> 17
================================================================================
GENERAL PROVISIONS
================================================================================
CONTRACT
The entire Contract between You and Us consists of the Contract, together with
the application, if a copy of such application is attached to the Contract when
issued and any Amendments, Riders or Endorsements.
CONTRACT CHANGES
The only way this Contract may be changed is by a written Amendment, Rider or
Endorsement signed by one of Our officers.
INCONTESTABILITY
We will not contest this Contract from the Contract Date.
MISSTATEMENT
If this Contract is issued as a Nonqualified Contract, and the Annuitant's (or,
if applicable, the Owner's) sex or date of birth was misstated, all benefits of
the Contract are what the Purchase Payment(s) paid would have purchased at the
correct sex and Age. Proof of the Annuitant's and Owner's Age may be filed at
any time at Our Office.
If this Contract is issued as a Qualified Contract and the Annuitant's date of
birth was misstated, all benefits of the Contract are what the Purchase
Payment(s) paid would have purchased at the correct Age. Proof of the
Annuitant's Age may be filed at any time at Our Office.
SUBSTITUTION OF SEPARATE ACCOUNT OR FUNDING OPTIONS
If it is not possible to continue to offer a Separate Account or Funding Option,
or in Our judgment becomes inappropriate for the purposes of this Contract, We
may substitute another Separate Account or Funding Option without Your consent.
Substitution may be made with respect to both existing investments and
investment of future Purchase Payments. However, no such substitution will be
made without notice to You and without prior approval of the Securities and
Exchange Commission, to the extent required by law.
TERMINATION
We reserve the right to terminate this Contract on any Valuation Date if the
Contract Value as of the date is less than the Termination Amount as stated in
the Contract Specifications and Purchase Payments have not been made to this
Contract for at least two years. Termination will not occur until 31 days after
We have mailed notice of Termination to You at Your last known address. If this
Contract is terminated, We will pay You the Cash Surrender Value, if any.
REQUIRED REPORTS
We will furnish a report to the Owner as often as required by law, but at least
once in each Contract Year before the due date of the first Annuity or Income
payment. The report will show the number of Accumulation Units credited to the
Contract in each Funding Option and the corresponding Accumulation Unit Value as
of the date of the report.
VOTING RIGHTS
If required by federal law, You may have the right to vote at the meetings of
the shareholders of the Underlying Funds. If You have voting rights, We will
send a notice to You telling You the time and place of a meeting. The notice
will also explain matters to be voted upon and how many votes You may exercise.
MORTALITY AND EXPENSES
Our actual mortality and expense experience will not affect the amount of any
Annuity or Income payments or any other values under this Contract.
NON-PARTICIPATING
This Contract does not share in Our surplus earnings, so You will receive no
dividends under it.
TAXES BASED UPON PREMIUM OR VALUE
If there is a law or change in law assessing taxes against Us based upon the
premium or value of this Contract, We reserve the right to charge You
proportionately for that tax. This would include, but is not limited to, a tax
based upon Our realized net capital gains in the Funding Options and on earnings
in the Fixed Account, on which We are not currently taxed.
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<PAGE> 18
CONFORMITY WITH STATE AND FEDERAL LAWS
This Contract is governed by the law of the state in which it is delivered. Any
paid-up Annuity, Cash Surrender Value or death benefits that are available under
this Contract are not less than the minimum benefits required by the statutes of
the state in which this Contract is delivered.
Upon receiving appropriate state approval, We may at any time make any changes,
including retroactive changes, in this Contract to the extent that the change is
required to meet the requirements of any law or regulation issued by a
governmental agency to which We or You are subject.
EMERGENCY PROCEDURE
We reserve the right to suspend or postpone the date of any payment of any
benefit or values for any Valuation Period (1) when the New York Stock Exchange
is closed; (2) when trading on the Exchange is restricted; (3) when an emergency
exists as determined by the Securities and Exchange Commission so that disposal
of the securities held in the Funding Options is not reasonably practicable or
it is not reasonably practicable to determine the value of the Funding Option's
net assets, or (4) during any other period when the Securities and Exchange
Commission, by order, so permits for the protection of security holders. Any
provision of this Contract which specifies a Valuation Date will be superseded
by this Emergency Procedure.
RELATION OF THIS CONTRACT TO THE SEPARATE ACCOUNT AND FUNDING OPTIONS
We will have exclusive and absolute ownership and control of the assets of Our
Separate Account and the Funding Options. That portion of the assets of a
Separate Account or Funding Option equal to the reserves and other Contract
liabilities with respect to such Separate Account or Funding Option shall not be
chargeable with liabilities arising out of any other business We conduct. Our
determination of the value of an Accumulation Unit and an Annuity Unit by the
method described in this Contract will be conclusive.
18
<PAGE> 19
TABLE OF VALUES
GUARANTEED VALUES OF THE FIXED ACCOUNT PER $1,000 OF NET PURCHASE PAYMENT
APPLIED
ASSUMING NO PRIOR PARTIAL SURRENDERS
<TABLE>
<CAPTION>
NO. OF GUARANTEED NO. OF YEARS GUARANTEED
YEARS FROM CASH FROM DATE CASH
DATE PAYMENT GUARANTEED SURRENDER PAYMENT IS GUARANTEED SURRENDER
IS APPLIED VALUE VALUE APPLIED VALUE VALUE
<S> <C> <C> <C> <C> <C>
1 1030 960 36 2898 2898
2 1060 990 37 2985 2985
3 1092 1022 38 3074 3074
4 1125 1065 39 3167 3167
5 1159 1109 40 3262 3262
6 1194 1154 41 3359 3359
7 1229 1199 42 3460 3460
8 1266 1266 43 3564 3564
9 1304 1304 44 3671 3671
10 1343 1343 45 3781 3781
11 1384 1384 46 3895 3895
12 1425 1425 47 4011 4011
13 1468 1468 48 4132 4132
14 1512 1512 49 4256 4256
15 1557 1557 50 4383 4383
16 1604 1604 51 4515 4515
17 1652 1652 52 4650 4650
18 1702 1702 53 4790 4790
19 1753 1753 54 4934 4934
20 1806 1806 55 5082 5082
21 1860 1860 56 5234 5234
22 1916 1916 57 5391 5391
23 1973 1973 58 5553 5553
24 2032 2032 59 5720 5720
25 2093 2093 60 5891 5891
26 2156 2156 61 6068 6068
27 2221 2221 62 6250 6250
28 2287 2287 63 6437 6437
29 2356 2356 64 6631 6631
30 2427 2427 65 6829 6829
31 2500 2500 66 7034 7034
32 2575 2575 67 7245 7245
33 2652 2652 68 7463 7463
34 2731 2731 69 7687 7687
35 2813 2813 70 7917 7917
</TABLE>
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LIFE ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
THIS TABLE WILL BE USED FOR NONQUALIFIED CONTRACTS.
OPTIONS 1 AND 2- SINGLE LIFE ANNUITIES
<TABLE>
<CAPTION>
MALE NUMBER OF MONTHLY PAYMENTS GUARANTEED
ADJUSTED NONE 120 180 240
AGE
<S> <C> <C> <C> <C>
45 3.59 3.57 3.56 3.53
46 3.64 3.62 3.60 3.57
47 3.69 3.67 3.65 3.62
48 3.75 3.73 3.70 3.67
49 3.81 3.78 3.76 3.71
50 3.87 3.84 3.81 3.77
51 3.93 3.90 3.87 3.82
52 4.00 3.97 3.93 3.87
53 4.07 4.04 3.99 3.93
54 4.15 4.11 4.06 3.99
55 4.23 4.19 4.13 4.05
56 4.32 4.27 4.20 4.11
57 4.41 4.35 4.28 4.17
58 4.50 4.44 4.36 4.24
59 4.61 4.53 4.44 4.31
60 4.72 4.63 4.53 4.37
61 4.83 4.74 4.62 4.44
62 4.96 4.85 4.71 4.51
63 5.09 4.97 4.81 4.58
64 5.24 5.09 4.90 4.65
65 5.39 5.22 5.01 4.72
66 5.56 5.36 5.11 4.79
67 5.73 5.50 5.21 4.86
68 5.92 5.64 5.32 4.93
69 6.12 5.80 5.43 4.99
70 6.34 5.96 5.53 5.05
71 6.56 6.12 5.64 5.11
72 6.81 6.29 5.75 5.16
73 7.07 6.46 5.85 5.21
74 7.35 6.64 5.95 5.26
75 7.64 6.82 6.05 5.30
</TABLE>
Dollar amounts of the monthly Annuity payments for the first and second options
are based on the Annuity 2000 Table. The above tables assume a year 2000 issue,
and project mortality improvements into the future using Projection Scale G.
These tables assume a net investment rate of 3% per Annum, assuming a 365-day
year.
Calendar Year in which 1st payment is due:
Adjusted Age is Actual Age:
1998-2000 2001-2005 2006-2010 2011-2015 2016-2020
minus 0 minus 1 minus 2 minus 3 minus 4
2021-2025 2026-2030 2031-2035 2036 AND LATER
minus 5 minus 6 minus 7 minus 8
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<PAGE> 21
LIFE ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
THIS TABLE WILL BE USED FOR NONQUALIFIED CONTRACTS.
OPTIONS 1 AND 2- SINGLE LIFE ANNUITIES
<TABLE>
<CAPTION>
FEMALE NUMBER OF MONTHLY PAYMENTS GUARANTEED
ADJUSTED NONE 120 180 240
AGE
<S> <C> <C> <C> <C>
45 3.39 3.39 3.38 3.37
46 3.43 3.43 3.42 3.40
47 3.48 3.47 3.46 3.44
48 3.52 3.52 3.50 3.48
49 3.57 3.56 3.55 3.53
50 3.62 3.61 3.60 3.57
51 3.68 3.66 3.65 3.62
52 3.74 3.72 3.70 3.67
53 3.80 3.78 3.76 3.72
54 3.86 3.84 3.81 3.78
55 3.93 3.90 3.88 3.83
56 4.00 3.97 3.94 3.89
57 4.07 4.05 4.01 3.95
58 4.15 4.12 4.08 4.01
59 4.24 4.20 4.15 4.08
60 4.33 4.29 4.23 4.15
61 4.43 4.38 4.32 4.22
62 4.53 4.48 4.40 4.29
63 4.64 4.58 4.49 4.36
64 4.76 4.69 4.59 4.44
65 4.89 4.80 4.69 4.52
66 5.02 4.92 4.79 4.59
67 5.17 5.05 4.89 4.67
68 5.32 5.19 5.00 4.75
69 5.49 5.33 5.12 4.82
70 5.68 5.48 5.23 4.90
71 5.87 5.64 5.35 4.97
72 6.09 5.81 5.47 5.04
73 6.32 5.99 5.59 5.10
74 6.57 6.18 5.71 5.16
75 6.84 6.37 5.83 5.22
</TABLE>
Dollar amounts of the monthly Annuity payments for the first and second options
are based on the Annuity 2000 Table. The above tables assume a year 2000 issue,
and project mortality improvements into the future using Projection Scale G.
These tables assume a net investment rate of 3% per Annum, assuming a 365-day
year.
Calendar Year in which 1st payment is due:
Adjusted Age is Actual Age:
1998-2000 2001-2005 2006-2010 2011-2015 2016-2020
minus 0 minus 1 minus 2 minus 3 minus 4
2021-2025 2026-2030 2031-2035 2036 AND LATER
minus 5 minus 6 minus 7 minus 8
21
<PAGE> 22
LIFE ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
THIS TABLE WILL BE USED FOR QUALIFIED CONTRACTS.
OPTIONS 1 AND 2- SINGLE LIFE ANNUITIES
<TABLE>
<CAPTION>
UNISEX NUMBER OF MONTHLY PAYMENTS GUARANTEED
ADJUSTED NONE 120 180 240
AGE
<S> <C> <C> <C> <C>
45 3.49 3.48 3.47 3.45
46 3.54 3.53 3.51 3.49
47 3.59 3.57 3.56 3.53
48 3.64 3.62 3.60 3.58
49 3.69 3.68 3.65 3.62
50 3.75 3.73 3.71 3.67
51 3.81 3.79 3.76 3.72
52 3.87 3.85 3.82 3.77
53 3.94 3.91 3.88 3.83
54 4.01 3.98 3.94 3.88
55 4.08 4.05 4.01 3.94
56 4.16 4.12 4.07 4.00
57 4.24 4.20 4.15 4.07
58 4.33 4.28 4.22 4.13
59 4.42 4.37 4.30 4.20
60 4.52 4.46 4.38 4.27
61 4.63 4.56 4.47 4.34
62 4.75 4.67 4.56 4.41
63 4.87 4.78 4.65 4.48
64 5.00 4.89 4.75 4.55
65 5.14 5.01 4.85 4.62
66 5.29 5.14 4.95 4.70
67 5.45 5.28 5.06 4.77
68 5.62 5.42 5.17 4.84
69 5.81 5.57 5.28 4.91
70 6.00 5.72 5.39 4.98
71 6.22 5.89 5.50 5.04
72 6.44 6.06 5.62 5.10
73 6.69 6.23 5.73 5.16
74 6.95 6.41 5.84 5.21
75 7.24 6.60 5.95 5.26
</TABLE>
Dollar amounts of the monthly Annuity payments for the first and second options
are based on the Annuity 2000 Table (blended 50%/50% female/male). The above
tables assume a year 2000 issue, and project mortality improvements into the
future using Projection Scale G. These tables assume a net investment rate of 3%
per Annum, assuming a 365-day year.
Calendar Year in which 1st payment is due:
Adjusted Age is Actual Age:
1998-2000 2001-2005 2006-2010 2011-2015 2016-2020
minus 0 minus 1 minus 2 minus 3 minus 4
2021-2025 2026-2030 2031-2035 2036 AND LATER
minus 5 minus 6 minus 7 minus 8
22
<PAGE> 23
LIFE ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
THESE TABLES WILL BE USED FOR NONQUALIFIED CONTRACTS.
OPTION 3 - JOINT AND LAST SURVIVOR LIFE ANNUITY
<TABLE>
<CAPTION>
MALE
ADJUSTED FEMALE ADJUSTED AGE
AGE 45 50 55 60 65 70 75
<S> <C> <C> <C> <C> <C> <C> <C>
45 3.18 3.27 3.35 3.42 3.47 3.51 3.54
50 3.24 3.36 3.47 3.58 3.66 3.73 3.78
55 3.29 3.43 3.59 3.74 3.87 3.99 4.08
60 3.32 3.49 3.69 3.89 4.09 4.28 4.43
65 3.35 3.54 3.76 4.02 4.31 4.59 4.84
70 3.36 3.57 3.82 4.13 4.49 4.89 5.29
75 3.37 3.59 3.86 4.21 4.63 5.14 5.71
</TABLE>
OPTION 4 - JOINT AND LAST SURVIVOR LIFE ANNUITY
REDUCED BY 50% ON DEATH OF PRIMARY PAYEE
<TABLE>
<CAPTION>
AGE OF PRIMARY MALE DOLLAR AMOUNT
AND SECONDARY
FEMALE
<S> <C>
45 3.37
50 3.60
55 3.88
60 4.26
65 4.79
70 5.52
75 6.54
</TABLE>
Dollar amounts of the monthly Annuity payments for the third and fourth options
are based on the Annuity 2000 Table. The above tables assume a year 2000 issue,
and project mortality improvements into the future using Projection Scale G.
These tables assume a net investment rate of 3% per Annum, assuming a 365-day
year.
Calendar Year in which 1st payment is due:
Adjusted Age is Actual Age:
1998-2000 2001-2005 2006-2010 2011-2015 2016-2020
minus 0 minus 1 minus 2 minus 3 minus 4
2021-2025 2026-2030 2031-2035 2036 AND LATER
minus 5 minus 6 minus 7 minus 8
23
<PAGE> 24
LIFE ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
THESE TABLES WILL BE USED FOR QUALIFIED CONTRACTS.
OPTION 3 - JOINT AND LAST SURVIVOR LIFE ANNUITY
<TABLE>
<CAPTION>
UNISEX
ADJUSTED UNISEX ADJUSTED AGE
AGE 45 50 55 60 65 70 75
<S> <C> <C> <C> <C> <C> <C> <C>
45 3.19 3.26 3.33 3.38 3.41 3.44 3.46
50 3.26 3.37 3.46 3.54 3.61 3.66 3.69
55 3.33 3.46 3.60 3.72 3.83 3.91 3.98
60 3.38 3.54 3.72 3.90 4.07 4.22 4.33
65 3.41 3.61 3.83 4.07 4.32 4.56 4.75
70 3.44 3.66 3.91 4.22 4.56 4.91 5.23
75 3.46 3.69 3.98 4.33 4.75 5.23 5.74
</TABLE>
OPTION 4 - JOINT AND LAST SURVIVOR LIFE ANNUITY
REDUCED BY 50% ON DEATH OF PRIMARY PAYEE
<TABLE>
<CAPTION>
AGE OF PRIMARY
AND SECONDARY UNISEX DOLLAR AMOUNT
<S> <C>
45 3.34
50 3.55
55 3.82
60 4.19
65 4.70
70 5.40
75 6.40
</TABLE>
Dollar amounts of the monthly Annuity payments for the third and fourth options
are based on the Annuity 2000 Table (blended 50%/50% female/male). The above
tables assume a year 2000 issue, and project mortality improvements into the
future using Projection Scale G. These tables assume a net investment rate of 3%
per Annum, assuming a 365-day year.
Calendar Year in which 1st payment is due:
Adjusted Age is Actual Age:
1998-2000 2001-2005 2006-2010 2011-2015 2016-2020
minus 0 minus 1 minus 2 minus 3 minus 4
2021-2025 2026-2030 2031-2035 2036 AND LATER
minus 5 minus 6 minus 7 minus 8
24
<PAGE> 25
LIFE ANNUITY TABLES
GUARANTEED AMOUNT OF MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
THIS TABLE WILL BE USED FOR NONQUALIFIED AND QUALIFIED CONTRACTS.
OPTION 5 - PAYMENTS FOR A FIXED PERIOD
<TABLE>
<CAPTION>
MONTHLY MONTHLY
NUMBER OF PAYMENT NUMBER OF PAYMENT
YEARS AMOUNT YEARS AMOUNT
<S> <C> <C> <C>
5 17.91 18 5.96
6 15.14 19 5.73
7 13.16 20 5.51
8 11.68 21 5.32
9 10.53 22 5.15
10 9.61 23 4.99
11 8.86 24 4.84
12 8.24 25 4.71
13 7.71 26 4.59
14 7.26 27 4.47
15 6.87 28 4.37
16 6.53 29 4.27
17 6.23 30 4.18
</TABLE>
The dollar amounts of the monthly Annuity payments for the fifth option are
based on a net investment rate of 3% per annum, assuming a 365-day year.
25
<PAGE> 26
THIS PAGE LEFT INTENTIONALLY BLANK.
<PAGE> 27
FLEXIBLE PREMIUM INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACT
LIFE ANNUITY COMMENCING AT MATURITY DATE
ELECTIVE OPTIONS NON-PARTICIPATING
<PAGE> 28
INDIVIDUAL RETIREMENT ANNUITY QUALIFICATION RIDER
As requested by you, this Contract is amended as follows to qualify as an
Individual Retirement Annuity (IRA) under Section 408(b) of the Code of
1986, as amended.
I. EXCLUSIVE BENEFIT
This Contract is established for the exclusive benefit of you or your
Beneficiaries.
II. PROHIBITION OF ASSIGNMENT OR LOAN
This Contract shall not be pledged or otherwise encumbered and it shall
not be sold, assigned or otherwise transferred to any person or entity
other than us. No loans shall be made under this Contract.
III. LIMITATION ON PURCHASE PAYMENTS
Notwithstanding the provisions of the Contract and except in the case of
a rollover contribution (as permitted by Section 402(c), 403(a)(4),
403(b)(8), or 408(d)(3) of the Code) or a contribution made in accordance
with the terms of a Simplified Employee Pension (SEP) program as
described in Section 408(k) of the Code, the total contributions shall
not exceed the lesser of $2,000 or 100% of compensation for any taxable
year. In the case of a spousal IRA, the maximum contribution shall not
exceed the lesser of $2,250 or 100% of compensation, but no more than
$2,000 can be contributed to either spouse's IRA. In the case of a
Simplified Employee Pension Plan qualifying under Section 408(k), the
annual contribution under the Contract may not exceed the lesser of
$30,000 or 15% of compensation. No contributions will be accepted unless
they are in cash.
The amount of purchase payments beyond the minimum purchase payment under
this Contract is not fixed. The minimum purchase payment must be received
as a rollover (see Section X). Payment of purchase payments beyond the
first will not be required to continue this contract.
Purchase payments after the first will not be required to continue this
Contract in force. We reserve the right, however, to terminate this
Contract when no purchase payments have been made for at least two
consecutive years and the Contract Value of the Contract is less than the
termination amount of $1,000 or the paid up Annuity benefit at maturity
would be less than $20 per month. If this Contract is terminated, we will
pay you the Cash Surrender Value, if any.
IV. COMPENSATION
Compensation means wages, salaries, professional fees, or other amounts
derived from or received from personal service actually rendered
(including, but not limited to, commissions) and includes earned income
as defined in Code Section 401(c)(2). Compensation does not include
amounts received as earnings or profits from property or amounts not
includible in gross income. Compensation also does not include any amount
received as a pension or Annuity or as deferred compensation. The term
"compensation" shall include any amount includible in the individual's
gross income under Code Section 71 with respect to a divorce or
separation instrument.
V. DISTRIBUTION OF BENEFITS
Notwithstanding any provision of this contract to the contrary, the
distribution of an individual's interest shall be made in accordance with
the minimum distribution requirements of Section 408(a)(6) or Section
408(b)(3) of the Code and the regulations thereunder, including the
incidental death benefit provisions of Section 1.401(a)(9)-2 of the
proposed regulations, all of which are herein incorporated by reference.
Your entire interest in the account must be distributed, or begin to be
distributed, by your required beginning date, which is the April 1
following the calendar year in which you reach age 70 1/2. For each
succeeding year, a distribution must be made on or before December 31. By
the required beginning date you may elect to have the balance in the
account distributed in one of the following forms:
1. a single sum payment;
2. equal or substantially equal payments over your life;
<PAGE> 29
3. equal or substantially equal payments over the lives of you and
your designated Beneficiary;
4. equal or substantially equal payments over a specified period that
may not be longer than your life expectancy;
5. equal or substantially equal payments over a specified period that
may not be longer than the joint life and last survivor expectancy
of you and your designated Beneficiary.
MINIMUM AMOUNTS TO BE DISTRIBUTED
If your interest is to be distributed in other than a lump sum or
substantially equal amounts as discussed above, then the amount to be
distributed each year, commencing at your required beginning date, must
be at least an amount equal to the quotient obtained by dividing your
entire interest by your life expectancy or the joint and survivor
expectancy of you and your designated Beneficiary.
Life expectancy and joint and last survivor expectancy are computed by
use of the return multiples contained in section 1.72-9 of the Income Tax
Regulations. For purposes of this computation, the owner's life
expectancy may be recalculated no more frequently than annually; however,
the life expectancy of a nonspouse Beneficiary may not be recalculated.
If your designated Beneficiary is not your spouse, then the minimum
amount required to be distributed shall be the greater of the amount
determined above, or the amount determined under the incidental benefit
rules set forth in Treasury Regulation Section 1.401(a)(9)-2.
VI. DEATH
If you die before your entire interest is distributed, the entire
remaining interest will be distributed as follows:
1. If you die on or after distributions have begun under the
DISTRIBUTION OF BENEFITS section, the entire remaining interest
must be distributed at least as rapidly as provided under the
DISTRIBUTION OF BENEFITS section.
2. If you die before distributions have begun under the DISTRIBUTION
OF BENEFITS section, the entire remaining interest must be
distributed as elected by you, or, if you have not so elected, as
elected by the Beneficiary or Beneficiaries, as follows:
a. by December 31st of the year containing the fifth
anniversary of your death; or
b. in equal or substantially equal payments over the life or
life expectancy of the designated Beneficiary or
Beneficiaries starting by December 31st of the year
following the year of your death. If the Beneficiary is
your surviving spouse and he or she elects to treat this
contract as his or her own, this distribution may be
deferred until December 31st of the year you would have
turned age 70 1/2.
If your surviving spouse dies before distributions begin, the
restrictions in paragraphs 2 (a) and (b) above shall apply.
Unless otherwise elected by you prior to the commencement of
distributions under the DISTRIBUTION OF BENEFITS section, or, if
applicable, by the surviving spouse where you die before distributions
have commenced, life expectancies of you or your spousal Beneficiary
shall be recalculated annually for purposes of distributions under the
DISTRIBUTION OF BENEFITS section and the DEATH section. An election not
to recalculate shall be irrevocable and shall apply to all subsequent
years. The life expectancy of a non-spouse Beneficiary shall not be
recalculated.
VII. ALTERNATIVE CALCULATION METHOD
An individual may satisfy the minimum distribution requirements under
section 408(a)(6) and 408(b)(3) of the Code by receiving a distribution
for one IRA that is equal to the amount required to satisfy the minimum
distribution requirements for two or more IRAs. For this purpose, the
owner of two or more IRAs may use the "alternative method" described in
Notice 88-38, 1988-1 C.B. 524, to satisfy the minimum distribution
requirements described above.
VIII. NONFORFEITABILITY
Your entire interest in this Contract is nonforfeitable.
<PAGE> 30
IX. NONTRANSFERABLE
This Contract is not transferable.
X. ROLLOVERS
A. Subject to subparagraphs (B) and (C) hereof, and the limitations
stated in the Contract, you may transfer to this Contract your
interest in any of the following:
1. the entire amount, or any portion thereof, under any other
individual retirement account or individual retirement
Annuity qualified under Section 408 of the Code;
2. the entire amount, or any portion thereof, excluding
nondeductible employee voluntary contributions, under a
trust described in Section 401(a) of the Code which is
exempt from tax under Section 501(a) of the Code or under a
qualified annuity plan described in Section 403(a) of the
Code.
3. the entire amount or any portion thereof, excluding
nondeductible employee voluntary contributions, to which
you are entitled under a tax sheltered annuity described in
Section 403(b) of the Code.
4. distributions you roll over from retirement plans or
arrangements described in A.2. and A.3. above to this
contract must be completed by means of a direct transfer or
rollover in accordance with Code Section 401(a)(31) in
order to avoid mandatory 20% income tax withholding from
the distribution and a possible 10% additional tax penalty
under Code Section 72(t). You may replace amounts withheld
from other sources to complete the full rollover, but the
10% penalty may continue to be due, if you do not specify
that the transfer of the distribution be conducted by
direct transfer or rollover.
B. You shall not make a rollover under subparagraph (A)(1) hereof
during the 12 month period commencing on the date you last made a
rollover contribution of the type described in subparagraph
(A)(1).
C. We must receive any amount which qualifies for a rollover within
60 days after you receive the distribution.
XI. DISTRIBUTIONS PRIOR TO AGE 59 1/2
Except in the event of your death, disability or attainment of age 59
1/2, we shall receive from you a declaration of your intention as to the
disposition of the amounts distributed before making any distribution
from this Contract.
XII. REPORTS
As the issuer of this Contract, we will furnish reports concerning the
status of the Annuity at least annually.
XIII. DISABILITY PAYMENTS
If the Contract contains a Rider for waiver of premium and disability
payment benefits, any disability payments provided for in the CONTRACT
SPECIFICATIONS will be applied as purchase payments under the contract.
XIV. AMENDMENT
This Contract may be amended by us at any time to maintain its qualified
status under Section 408(b) of the Code, following all regulatory
approvals. Any such amendment may be made retroactively effective if
necessary or appropriate to conform to the requirements of the Code (or
any State law granting IRA tax benefits.)
CITICORP LIFE INSURANCE COMPANY
[SIGNATURE]
PRESIDENT
<PAGE> 31
CASH LOAN RIDER
This rider is made a part of the contract to which it is attached. The date of
issue of the rider is the date the rider is attached to the contract.
You may request a loan by Written Request as stated below:
1. the loan must be requested before the Maturity Date; and
2. the loan will be made without the consent of any Beneficiary or
other party unless irrevocably named, or unless such consent is
required by law; and
3. the loan cannot exceed the maximum loan amount as stated below.
We may defer granting a loan for the period permitted by law but not for more
than six months. We will not grant an additional loan until the first loan has
been repaid in full. The minimum and maximum loan amounts are stated below.
A loan may only be taken from the Fixed Account. A transfer of Contract Value
from the Sub-Accounts to the Fixed Account must be made by Written Request prior
to Our granting the loan. The amount transferred to the Fixed Account will be
taken on a pro rata basis from each of the Sub-Accounts which have Contract
Value, unless We are instructed otherwise. An express condition of Us lending
the loan amount is that You will grant Us a security interest in the Contract
Value of the Fixed Account equal to the loan amount.
MINIMUM AND MAXIMUM AMOUNTS
MINIMUM LOAN AMOUNT: [$1,000]
MAXIMUM LOAN AMOUNT: 80% of the Contract Value for contracts with
balances up to $12,500;
$10,000 for contracts with balances between $12,500
and $20,000;
For contracts with balances over $20,000, the lesser
of $50,000 reduced by the highest total amount of
loans outstanding during the prior 12 month period
or 50% of the Contract Value.
LOAN INTEREST RATE: The maximum loan interest rate is 8% per year. Loan
interest is payable to Us in advance on a quarterly
basis, unless We allow otherwise. The loan interest
rate in effect upon loan origination will remain
constant throughout the term of the loan.
================================================================================
EFFECT OF A LOAN ON THE CONTRACT VALUE
================================================================================
While a loan remains outstanding, the Contract Value that is equal to the loan
amount will be credited with interest of not less than 3% per year. We will
notify You of the initial rate that will be credited when the loan is granted.
We reserve the right to change the interest rate in the future, but it will
never be less than 3% per year.
The Contract Value may be reduced as stated in the Loan Principal and Interest
Repayments section of this rider.
================================================================================
EFFECT OF A LOAN ON TRANSFERS FROM THE FIXED ACCOUNT TO THE SUB-ACCOUNTS
================================================================================
While a loan remains outstanding, the Cash Surrender Value of the Fixed Account
is the maximum amount that may be transferred from the Fixed Account to any of
the Sub-Accounts, subject to any transfer restrictions of the contract.
<PAGE> 32
================================================================================
LOAN PRINCIPAL AND INTEREST REPAYMENTS
================================================================================
Loan repayment is set forth in the loan agreement. Once a loan is established,
the repayment period may not be changed. The loan may be repaid in full at any
time without penalty. We may send You periodic payment reminders for the loan
principal and interest amount due.
If the entire payment due is not paid by the due date, one of the following
events will occur:
1. If there is Contract Value that is not restricted and is
sufficient to pay the entire payment due or a portion of the
payment amount due, We will surrender the amount due from the
unrestricted Contract Value. Contract Value that is not restricted
consists of any amount that is:
a) not restricted according to the Internal Revenue
Code; and
b) attributable to Purchase Payments made by You.
When the payment due is surrendered from the Contract Value, the
Contract Value will also be reduced by:
a) any amounts deducted on surrender, if applicable,
which are shown on the Contract Specifications page;
plus
b) any applicable Premium Tax not previously deducted;
plus
c) any applicable Federal or State Income Tax due in
accordance with federal and state tax regulations in
effect on the date of the surrender.
2. When the entire payment due cannot be paid as described in item 1
above, We will send You a notice reminding You that the amount has
not been paid. If that payment due is not paid within 60 days of
the date of Our notice, the outstanding loan plus any accrued
interest will be considered a loan in default. Interest will
continue to be charged and credited to the loan in default while
the loan is outstanding. We will not send you any more periodic
payment reminders. Repayment of the outstanding loan principal
and/or accrued interest will be allowed at any time.
When an event occurs that is recognized under federal tax law or
regulations as one which allows the Contract Value to be
distributed, the Contract Value will be reduced by:
a) the amount of the outstanding loan plus any accrued
interest; plus
b) the amounts deducted on surrender, if applicable,
which are shown on the Contract Specifications page;
plus
c) any applicable Premium Tax not previously deducted;
plus
d) any applicable Federal or State Income Tax due in
accordance with federal and state tax regulations in
effect on the date of the surrender;
and the loan will be considered as no longer outstanding.
CITICORP LIFE INSURANCE COMPANY
[SIGNATURE]
PRESIDENT
<PAGE> 33
NONQUALIFIED ANNUITY RIDER - DISTRIBUTION REQUIREMENTS
This rider is made a part of this contract as its Contract Date in order to
comply with the tax rules under Section 72(s) of the Code for required
distributions upon the death of any contract owner. The following conditions,
restrictions and limitations must apply to maintain the tax-qualified status of
your Annuity.
REQUIRED DISTRIBUTIONS WHERE OWNER AND ANNUITANT DIE SIMULTANEOUSLY
If you are the owner and the Annuitant or you are the owner and you die
simultaneously with the Annuitant before payment of any Annuity or Income Option
begins, an amount equal to the Death Benefit will be distributed within five
years of your death to the contract Beneficiary unless:
a. the Beneficiary elects by Written Request to have the proceeds
distributed over the Beneficiary's life or over a period not
extending beyond life expectancy, and the payments begin within
one year of your death; or
b. the sole Beneficiary is your spouse who elects by Written Request
to continue the contract as the owner and Annuitant.
If you are the owner and the Annuitant or you are the owner and you die
simultaneously with the Annuitant after an Annuity or Income option begins but
before your entire interest has been distributed, the remaining proceeds of the
contract will be distributed at least as rapidly as they were being distributed
under the method of payment in effect at the time of your death.
The death of the first joint owner triggers these distribution requirements.
NON-NATURAL OWNER HOLDING FOR NATURAL PERSONS
The above rules also apply if you are not an individual and the primary
Annuitant dies before payment of an Annuity or Income Option begins. Payments
will be made to the Beneficiary. The primary Annuitant is the first-named
Annuitant and the individual who is of primary importance in affecting the
timing or amount of payments under the contract.
If you are not an individual and the primary annuitant dies after payment of an
Annuity or Income option begins, the remaining proceeds of the contract will be
distributed at least as rapidly as they were being distributed under the method
of payment in effect at the time of the primary Annuitant's death.
REQUIRED DISTRIBUTIONS WHERE OWNER AND ANNUITANT DO NOT DIE SIMULTANEOUSLY
If you are the owner but not the Annuitant, and you die before the Annuitant and
before payment of an Annuity or Income Option begins, an amount equal to the
Death Benefit will be distributed within five years of your death to the joint
owner surviving you. In this circumstance, the joint owner is the "designated
beneficiary" referred to in Section 72(s) of the Code, and his or her rights
preempt those of the Beneficiary named in a Written Request. The distribution
may be made over a period that exceeds five years from your death or postponed
by your spouse if:
a. the joint owner elects by Written Request to have the proceeds
distributed over his or her life or over a period not extending
beyond life expectancy, and the payments begin within one year of
your death; or
b. the sole joint owner is your spouse, who elects by Written Request
to continue the contract as owner.
The joint owner is determined by contract designation. If there is no joint
owner or Beneficiary surviving you, ownership of this contract passes to your
estate. The estate or the individual taking the contract benefits through your
estate must take complete distribution within five years of your death.
If you are the owner but not the Annuitant, and you die before payment of an
Annuity or Income Option begins, the remaining proceeds of the contract will be
distributed at least as rapidly as they were being distributed under the method
of payment in effect at the time of your death.
The death of the first joint owner triggers these distribution requirements.
<PAGE> 34
ADMINISTRATIVE COMPLIANCE
If the Code and related law, regulations and rulings require a distribution
other than described above in order to keep this Annuity contract qualified
under the Code, we will administer the contract in accordance with these laws,
regulations, and rulings. We will provide you with a revised rider describing
any necessary changes, following all regulatory approvals
CITICORP LIFE INSURANCE COMPANY
[SIGNATURE]
PRESIDENT
<PAGE> 35
WAIVER OF WITHDRAWAL CHARGE FOR NURSING HOME CONFINEMENT
THE EFFECTIVE DATE OF THIS RIDER IS ONE YEAR AFTER THE CONTRACT DATE SHOWN IN
THE CONTRACT SPECIFICATIONS PAGE OF THE CONTRACT.
This rider is made available when the Annuitant is age 70 or under on the
Contract Date and is made part of the Contract to which it is attached.
If after the effective date of this rider, and prior to the Maturity Date of the
Contract, the Annuitant begins confinement in an Eligible Nursing Home, and
remains confined for the Qualifying Period, You may make a total or partial
withdrawal, subject to the Maximum Withdrawal Amount, without incurring a
withdrawal charge. We will waive the withdrawal charge only for withdrawals made
during continued confinement in an Eligible Nursing Home after the Qualifying
Period has been satisfied, or within sixty (60) days after such confinement
ends. We will require proof of confinement in a form satisfactory to Us. Part of
the proof may be certification by a licensed physician that such confinement is
medically necessary.
DEFINITIONS:
An ELIGIBLE NURSING HOME is an institution or special nursing unit of a hospital
which:
(a) Is Medicare approved as a provider of skilled nursing care
services; and
(b) Is not, other than in name only, an acute care hospital, a home
for the aged, a retirement home, a rest home, a community living
center, or a place mainly for the treatment of alcoholism.
OR
Meets all of the following standards:
(a) It is licensed as a Nursing Care Facility by the state in which it
is located;
(b) It is either a freestanding facility or a distinct part of another
facility such as a ward, wing, unit or swing-bed of a hospital or
other facility;
(c) It provides nursing care to individuals who are not able to care
for themselves and who require nursing care;
(d) Its primary function is to provide nursing care and room and
board; and the facility charges for these services. The care must
be performed under the direction of a licensed physician, or
registered nurse (RN), or licensed practical nurse (LPN);
(e) It may include care provided by a licensed physical, respiratory,
occupational or speech therapist; and
(f) It is not, other than in name only, an acute care hospital, a home
for the aged, a retirement home, a rest home, a community living
center, or a place mainly for the treatment of alcoholism.
QUALIFYING PERIOD is confinement in an Eligible Nursing Home for 90 consecutive
days.
<PAGE> 36
EXCLUSIONS
We will not waive withdrawal charges if confinement is due to one of more of the
following causes:
(a) Mental, nervous, emotional or personality disorder without
demonstrable organic disease, including, but not limited to,
neurosis, psychoneurosis, psychopathy or psychosis;
(b) the voluntary taking or injection for drugs, unless prescribed or
administered by a licenses physician;
(c) the voluntary taking of any drugs prescribed by a licensed
physician and intentionally not taken as prescribed;
(d) sensitivity to drugs voluntarily taken, unless prescribed by a
physician;
(e) drug addiction, unless addiction results from the voluntary taking
of drugs prescribed by a licensed physician, or the involuntary
taking of drugs.
MAXIMUM WITHDRAWAL AMOUNT
The Maximum Withdrawal Amount available without incurring a withdrawal charge is
the Contract Value on the next Valuation Date following written proof of claim,
less any Purchase Payments made within 12 months prior to the date confinement
in an Eligible Nursing Home begins, less any Purchase Payment Credits applied
within 12 months of the date of the withdrawal, less any additional Purchase
Payments made on or after the Annuitant's 71st birthday.
NOTICE OF CLAIM
Written notice of claim must be given to Us following completion of the
Qualifying Period, and either while the Annuitant continues to be confined or
within 60 days after discharge from an Eligible Nursing Home. If notice cannot
be given to Us within 60 days, it must be given as soon as reasonably possible.
PAYMENT OF CLAIMS
Benefits payable under this rider will be paid as soon as We receive proper
written proof of claim. The portion of the Contract Value that is surrendered
will be paid in a lump sum to You.
DENIAL OF WAIVER BENEFIT
If the waiver benefit is denied, the surrender proceeds will not be disbursed
until You are notified of the denial and provided with the opportunity to
reapply for the surrender proceeds or to reject the surrender proceeds.
TAX IMPLICATIONS
Receipt of any portion of the Contract Value may be taxable to You as the Owner,
please consult Your tax advisor.
CITICORP LIFE INSURANCE COMPANY
[SIGNATURE]
PRESIDENT
<PAGE> 37
PENSION/PROFIT SHARING PLAN QUALIFICATION RIDER
If the owner of this contract requested that it be issued to comply with Section
401(a) of the Code, the following conditions, restrictions and limitations apply
to this contract.
OWNERSHIP - NON-TRANSFERABLE
You may not sell, assign, or discount this contract or pledge this contract as
collateral for a loan as security for the performance of an obligation or for
any other purpose, to any person or organization other than Citicorp Life
Insurance Company; provided, however, the restrictions of this provision will
not apply to the Trustee of any Trust described in Section 401(a) or the
Administrator of any Annuity Plan described in Section 403(a) of the Code. This
provision supersedes any provisions of the contract which may be inconsistent
with it.
MANDATORY DISTRIBUTION RESTRICTIONS
In order to meet the qualification requirements of Code Section 401(a), all
plans must meet the required mandatory distribution rules in Code Section
401(a)(9).
Code Section 401(a)(9) states that a plan will not be qualified unless the
entire interest of each employee is distributed to such employee not later than
the "required beginning date" or over no longer than the life or life expectancy
of such employee or the lives or joint life expectancy of such employee and a
designated Beneficiary. Generally, the "required beginning date" means April 1
of the calendar year following the calendar year in which the employee attains
age 70 1/2.
If the employee dies before his/her entire interest has been distributed, the
remaining interest must be paid out at least as rapidly as under the method of
payment in effect at the time of death. If the employee dies before the
distribution of his/her entire interest has begun, the entire interest must be
distributed within five years after the employee's death or an Annuity payable
over no longer than life or life expectancy must be distributed to an electing
designated Beneficiary starting within one year of the employee's death. A
spousal designated Beneficiary may elect to defer distributions until the
employee would have attained the age of 70 1/2.
ANNUITIES DISTRIBUTED UNDER QUALIFIED PLANS
If the applicant for this contract requested that it be issued to comply with
Section 401(a) of the Code, and this contract has subsequently been transferred
to the Annuitant, the following conditions, restrictions and limitations apply
to this contract in addition to the above.
Spousal Consent
Death Benefit - If the Annuitant dies while the contract continues and the
Annuitant has a spouse at the time of the Annuitant's death, we will pay the
death benefit to a person other than the current spouse of the Annuitant only if
proof of spousal consent, which meets the requirements of Section 417 of the
Code, is furnished to us.
If the Beneficiary is not the current spouse and such spousal consent is not
furnished, we will pay 50% of the death benefit to the current spouse. We will
pay the balance of the death benefit to the Beneficiary.
Cash Surrender - Before the due date of the first Annuity or Income Payment, 1)
if you do not have a spouse and without the consent of any Beneficiary; or, 2)
if you do have a current spouse then only with the written consent of your
spouse, as required by Section 417 of the Code; we will pay to you all or any
portion of the Cash Surrender Value of the contract upon receipt of your Written
Request for it.
Settlement Option - If the Annuitant is living on the Maturity Date, payment
must be made in accordance with Option 4 under ANNUITY OPTIONS unless you elect
another form of Annuity Option and furnish us a qualified election which meets
the requirements of Section 417 of the Code.
CITICORP LIFE INSURANCE COMPANY
[SIGNATURE]
PRESIDENT
<PAGE> 38
ROTH INDIVIDUAL RETIREMENT ANNUITY QUALIFICATION RIDER
As requested by you, this contract is amended as follows to qualify as a Roth
Individual Retirement Annuity (IRA) under Section 408A of the Code of 1986, as
amended. Notwithstanding any other specific provisions in the contract to the
contrary, the contract is amended to restrict the rights of the Owner or
Annuitant and any Beneficiary, and to limit contributions as follows:
EXCLUSIVE BENEFIT
This contract is established for the exclusive benefit of the Owner and the
Owner's Beneficiaries.
TRANSFER OF OWNERSHIP/ASSIGNMENT
This Owner may not transfer ownership of the contract, sell the contract, or
assign or pledge the contract as collateral for a loan or as security for the
performance of an obligation or for any other purpose, to any person other than
the Company or a former spouse of the Owner under a divorce decree or under a
written instrument incident to that divorce.
CREDITOR CLAIMS
To the extent permitted by law, no right or benefit of the owner, Annuitant or
Beneficiary under this contract shall be subject to the claims or creditors or
any legal process.
LIMITATION ON PURCHASE PAYMENTS
The contract will accept contributions only as follows:
Contributions to this contract must be paid in cash and, except in the case of a
trustee-to-trustee transfer from another Roth IRA, or in the case of a qualified
rollover contribution, may not exceed the excess of the Owner's contribution
limit for the taxable year over the aggregate contributions made during the
taxable year to all other Roth IRAs and IRAs held by the Owner. Contributions
may be made without respect to the age of the Owner.
The contribution limit for the taxable year is either (1) the lesser of $2,000
or 100% of compensation of the Owner for the taxable year, or (2) where the
Owner files a joint return and receives less compensation for the taxable year
than the Owner's spouse, the lesser of $2,000 or 100% of the compensation of the
Owner and the Owner's spouse for the taxable year less the spouse's contribution
to a Roth IRA or IRA for the taxable year, if any.
When the Owner's adjusted gross income (AGI) exceeds the applicable dollar limit
(ADL; see description below), the annual contribution limit is reduced by the
following amount -
Annual
Contribution Limit x Owner's AGI-ADL
---------------
$15,000 ($10,000 if the Owner is married)
For purposes of this section, AGI does not include any amount included in gross
income as a result of a rollover of an IRA to a Roth IRA and is reduced by any
deduction under section 219 of the Code.
The ADL is $150,000 for an Owner filing a joint return, $95,000 for an Owner
filing a single return, and $-0- for a married Owner filing a separate return.
ROLLOVER CONTRIBUTION
A qualified rollover contribution described in section 408A(c) can be made only
from (1) another Roth IRA or (2) another IRA, which is not a Roth IRA, and can
be made from an IRA other than a Roth IRA only if the Owner's adjusted gross
income for the taxable year of the rollover does not exceed $100,000.
<PAGE> 39
COMPENSATION
For purposes of this section, compensation means wages, salaries, professional
fees, or other amounts derived from or received for personal service actually
rendered (including, but not limited to commissions paid salespersons,
compensation for services on the basis of a percentage of profits, commissions
on insurance premiums, tips, and bonuses) and includes earned income, as defined
in the section 401(c)(2) (reduced by the deduction the self-employed individual
takes for contributions made to a self-employed retirement plan). For purposes
of this definition, section 401(c)(2) shall be applied as if the term trade or
business for purposes of section 1402 included service described in subsection
(c)(6). Compensation does not include amounts derived from or received as
earnings or profits from property (including but not limited to, interest and
dividends) or amounts not includible in gross income. Compensation also does not
include any amount received as a pension or annuity or as deferred compensation.
The term "compensation" shall include any amount includible in the Owner's gross
income under section 71 with respect to a divorce or separation instrument
described in subparagraph (A) of section 71(b)(2).
DISTRIBUTION REQUIREMENTS
The Owner's entire interest will be distributed in accordance with one of the
following provisions, as elected:
A. (1) The Owner's entire interest will be paid by December 31 following
the fifth anniversary of the Owner's death.
(2) If any portion of the Owner's interest is payable to a designated
Beneficiary and such Beneficiary has not elected (1) above, then the
entire interest which is payable to the Beneficiary will be distributed
in substantially equal installments over a period not exceeding the life
or life expectancy of the designated Beneficiary, commencing by December
31 following the first anniversary of the Owner's death. The designated
beneficiary may elect at any time to receive greater payments if
otherwise permitted under the terms of the contract.
(3) In applying the requirements of A(2) to any portion of the Owner's
interest which is payable to the Owner's surviving spouse, the date on
which the payments must commence is the later of (a) December 31
following the date the deceased Owner would have attained age 70 1/2 or
(b) December 31 following the first anniversary of the Owner's death.
(4) If the designated Beneficiary of the Owner is the Owner's
surviving spouse, the spouse may treat the contract as the spouse's own
Roth IRA. This election will be deemed to have been made if the
surviving spouse makes a rollover or other contribution into this
contract or if the surviving spouse has failed to satisfy one or more
requirements described in (1) or (2). If the Owner's surviving spouse
dies before distributions are required to begin under this section, the
Owner's surviving spouse will be treated as having elected to made the
Roth IRA his or her own Roth IRA.
B. For purposes of this section, life expectancy will be computed by use of
the return of multiples specified in Tables V or VI of Section 1.72-9 of
the Income Tax Regulations based on the attained age of such Beneficiary
during the calendar year in which distributions are required to commence
pursuant to this section. Payments for any subsequent calendar year will
be based on this life expectancy reduced by one for each calendar year
which has elapsed since the calendar year life expectancy was first
calculated. A designated beneficiary of the Owner who is the Owner's
surviving spouse may elect, prior to the time that payments have begun to
him or her, to redetermined life expectancy each year based on the
beneficiary's attained age in each such year.
REPORTS
As the issuer of this contract, we will furnish reports concerning the status of
the Annuity at least annually.
AMENDMENT
This contract may be amended by us at any time to maintain its qualified status
as a Roth IRA. Any such amendment may be made retroactively effective if
necessary or appropriate to conform to the requirements of the Code (or any
State law granting IRA tax benefits).
CITICORP LIFE INSURANCE COMPANY
[SIGNATURE]
PRESIDENT
<PAGE> 40
TAX-SHELTERED ANNUITY QUALIFICATION RIDER
This endorsement is made a part of this contract in order to comply with Section
403(b) of the Code. The following conditions, restrictions and limitations
apply.
OWNERSHIP - NON-TRANSFERABLE
You may not sell, assign, or discount this contract or pledge this contract as
collateral for a loan or as security for the performance of an obligation or for
any other purpose, to any person or organization other than to us. This
provision supersedes any provisions of the contract which may be inconsistent
with it.
ELECTIVE DEFERRAL CONTRIBUTION LIMITS
In order to meet the qualification requirements of Code Section 403(b), elective
deferral contributions may not exceed the limitations in effect under Code
Section 402(g).
This rule is an individual limitation that applies to all elective deferral
plans, contracts or arrangements in the aggregate.
WITHDRAWAL RESTRICTIONS
To qualify as a contract which can defer compensation under a Code Section
403(b) plan or arrangement, the withdrawal restrictions under Code Section
403(b)(11) must be met.
Withdrawals attributable to contributions made pursuant to a salary reduction
agreement may be paid only upon or after attainment of age 59 1/2, separation
from service, death, total or permanent disability (as defined in Code Section
72(m)(7)) or in the case of hardship (as defined in the Treasury Regulations).
The hardship exception applies only to the salary reduction contribution and not
to any income attributable to such contribution.
These withdrawal restrictions apply to years beginning after December 31, 1988
but only with respect to assets other than those assets held as of the close of
the last year beginning before January 1, 1989.
If contributions attributable to a custodial account described in Section
403(b)(7) of the Code are transferred to this contract, the following
conditions, restrictions, and limitations apply.
Withdrawals attributable to these transferred contributions may be paid only
upon or after attainment of age 59 1/2, separation from service, death, or total
and permanent disability (as defined in Code Section 72(m)(7)).
Withdrawals on account of hardship may be made only with respect to assets
attributable to a custodial account as of the close of the last year beginning
before January 1, 1989 and amounts contributed thereafter under a salary
reduction agreement but not to any income attributable to such conditions.
ELIGIBLE ROLLOVERS
To the extent you are otherwise eligible for a distribution under this contract,
and provided the distribution is an eligible rollover distribution, you may
elect to have such distribution or a portion of it paid directly to an eligible
retirement plan. You must specify the eligible retirement plan to which such
distribution is to be paid in a form and at such time acceptable to us. Such
distribution shall be made as of a direct transfer to the eligible retirement
plan so specified. Contract surrender penalties may apply to all rollovers.
Previously taxed amounts in this contract are not eligible for rollover. Amounts
that are rolled over are taxed generally until later distributed. An eligible
rollover distribution includes generally any taxable distribution or portion
thereof from this contract except:
a. any distribution which is one of a series of substantially equal
periodic payments made not less frequently than annually and made
to you for life or life expectancy or to you or your joint life
beneficiary for joint lives or life expectancies, or for a
specified period of 10 years or more, or
b. any distribution which is a required distribution as described
above under "MANDATORY DISTRIBUTION REQUIREMENTS."
<PAGE> 41
An eligible retirement plan includes an individual retirement annuity or account
described in Code Section 408. It also includes a tax sheltered annuity plan or
arrangement under Code Section 403(b), provided it accepts eligible rollovers
and is a defined contribution plan.
If you receive a distribution that is eligible for rollover, but you receive the
check directly, then mandatory income tax withholding will be taken from the
distribution. You may roll over the balance to an individual retirement annuity
or account within 60 days of receipt, and may make up the amount withheld from
other sources in the rollover in order to roll over the maximum without possible
early distribution tax penalty on the amount of the tax withholding.
MANDATORY DISTRIBUTION REQUIREMENTS
In order to meet the qualification requirements of Code Section 403(b), all
plans must meet the required mandatory distribution rules in Code Section
401(a)(9).
Code Section 401(a)(9) states that a plan will not be qualified unless the
entire interest of each employee is distributed to such employee not later than
the "required beginning date" or over the life or life expectancy of such
employee or over the lives or joint life expectancy of such employee and a
designated Beneficiary. Generally, the "required beginning date" means April 1
of the calendar year following the calendar year in which the employee attains
age 70 1/2.
If the employee dies after the distribution has begun but before his/her entire
interest has been distributed, the remaining interest must be paid out at least
as rapidly as it was being paid out under the method of payment in effect at the
time of death. If the employee dies before the distribution of his/her entire
interest has begun, the entire interest must be distributed within five years
after the employee's death or an Annuity payable over no longer than life or
life expectancy must be distributed to an electing designated Beneficiary
starting within one year of the employee's death. A spousal designated
Beneficiary may elect to defer distributions until the employee would have
attained the age of 70 1/2.
ADMINISTRATIVE COMPLIANCE
If changes in the Code and related law, regulations and rulings require a
distribution greater than described above in order to keep this Annuity
qualified under the Code, we will administer the contract in accordance with
these laws, regulations and rulings. We will provide you with a revised rider
describing any necessary changes, following all regulatory approvals.
CITICORP LIFE INSURANCE COMPANY
[SIGNATURE]
PRESIDENT
<PAGE> 1
EXHIBIT 5
VARIABLE ANNUITY APPLICATION CITICORP LIFE INSURANCE COMPANY
Administrative Offices: 800 Silver Lake Blvd
P. O. Box 7031
Dover, DE 19903
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
BHC ACCOUNT #: [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
- -----------------------------------------------------------------------------------------------------------------------------------
1. PRODUCT Product Name/Code: [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]-[ ][ ][ ][ ]
INFORMATION Initial Purchase Amt.: $[ ],[ ][ ][ ],[ ][ ][ ].[ ][ ][ ]
Plan Type (check one): [ ] Nonqualified [ ] TSA Transfer [ ] Qualified Plan Rollover
[ ] IRA Rollover [ ] SEP/IRA [ ] Roth IRA Conversion
[ ] Roth IRA Rollover/Transfer
- -----------------------------------------------------------------------------------------------------------------------------------
2. OWNER Last First MI
INFORMATION Name: [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] Sex: [ ] M [ ] F
Address: [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
City: [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] State: [ ][ ] Zip Code: [ ][ ][ ][ ][ ][ ][ ]
All correspondence and tax Birthdate:[ ][ ]/[ ][ ]/[ ][ ][ ][ ] Daytime Phone #: [ ][ ][ ]-[ ][ ][ ]-[ ][ ][ ][ ]
reporting information will U.S. Citizen: [ ]Y [ ]N
be directed to the Owner E-Mail: [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] SS#: [ ][ ][ ]-[ ][ ]-[ ][ ][ ][ ]
- -----------------------------------------------------------------------------------------------------------------------------------
JOINT OWNER Last First MI
INFORMATION Name: [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] Sex: [ ] M [ ] F
(Nonqualified only) Birthdate:[ ][ ]/[ ][ ]/[ ][ ][ ][ ] SS#: [ ][ ][ ]-[ ][ ]-[ ][ ][ ][ ] Relationship: [ ][ ][ ][ ]
- -----------------------------------------------------------------------------------------------------------------------------------
ANNUITANT Last First MI
Name: [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] Sex: [ ] M [ ] F
Birthdate:[ ][ ]/[ ][ ]/[ ][ ][ ][ ] SS#: [ ][ ][ ]-[ ][ ]-[ ][ ][ ][ ] Sex: [ ]M [ ]F
If Annuitant and Owner are
not the same person; if no CONTINGENT ANNUITANT (nonqualified only):
Annuitant is specified, Last First MI
Owner stated above will be Name: [ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ] Sex: [ ] M [ ] F
the Annuitant Birthdate:[ ][ ]/[ ][ ]/[ ][ ][ ][ ] SS#: [ ][ ][ ]-[ ][ ]-[ ][ ][ ][ ] Relationship: [ ][ ][ ][ ]
- -----------------------------------------------------------------------------------------------------------------------------------
3. BENEFICIARY PRIM. CONT. FULL NAME RELATIONSHIP TO OWNER SS# % TO RECEIVE
INFORMATION [ ] [ ] _____________________ ______________________ [ ][ ][ ]-[ ][ ]-[ ][ ][ ][ ] [ ][ ][ ]%
Prim = Primary [ ] [ ] _____________________ ______________________ %
Cont = Contingent [ ] [ ] _____________________ ______________________ %
- -----------------------------------------------------------------------------------------------------------------------------------
4. FUND SELECTION FUND CODE FUND ALLOCATION FUND CODE FUND ALLOCATION FUND CODE FUND ALLOCATION FUND CODE FUND ALLOCATION
[ ] [ ] [ ][ ][ ]% [ ][ ]% [ ][ ][ ]% [ ][ ]% [ ][ ][ ]% [ ][ ]% [ ][ ][ ]%
Total allocation must equal [ ] [ ] [ ][ ][ ]% [ ][ ]% [ ][ ][ ]% [ ][ ]% [ ][ ][ ]% [ ][ ]% [ ][ ][ ]%
100%; see Product [ ] [ ] [ ][ ][ ]% [ ][ ]% [ ][ ][ ]% [ ][ ]% [ ][ ][ ]% [ ][ ]% [ ][ ][ ]%
Guidelines for Fund Codes [ ] [ ] [ ][ ][ ]% [ ][ ]% [ ][ ][ ]% [ ][ ]% [ ][ ][ ]% [ ][ ]% [ ][ ][ ]%
(attach separate sheet, if
needed)
- -----------------------------------------------------------------------------------------------------------------------------------
5. SPECIAL
REMARKS
- -----------------------------------------------------------------------------------------------------------------------------------
6. CUSTOMER To the best of my knowledge and belief, I certify that all of the answers herein are complete
ACKNOWLEDGMENT/ and true. I UNDERSTAND THAT ANNUITY PAYMENTS, WHEN BASED ON THE INVESTMENT EXPERIENCE OF A
AUTHORIZATION SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO A FIXED DOLLAR AMOUNT. I ACKNOWLEDGE
RECEIPT OF A CURRENT PROSPECTUS.
NOTE: Any person who knowingly and with intent to injure, defraud, or deceive any insurer, or
who files a statement of claim or an application containing any false, incomplete or misleading
information, is guilty of a felony of the third degree.
Will the annuity applied for replace an existing annuity or life insurance contract? [ ]Y [ ]N
SIGNATURES: (If yes, specify Company and contract number: _______________________________________________)
Owner: ______________________________________________________________ Date: _______________________________________________
Joint Owner: ________________________________________________________ Signed at (City, State): ____________________________
- -----------------------------------------------------------------------------------------------------------------------------------
REGISTERED REPRESENTATIVE USE ONLY
To the best of my knowledge and belief, the annuity being applied for replaces another annuity or life insurance
contract. [ ]Y [ ]N
Name: __________________________________________________ Signature: ________________________________ Date: [ ][ ]/[ ][ ]/[ ][ ]
Broker Dealer/Rep. #: __________________________________ License#: __________________________ Branch #:___________________
Phone #:_______________________________________________ Fax #: ________________________
Customer Statement Linking #: ___________________________________________________________
</TABLE>
<PAGE> 1
EXHIBIT 10
Independent Auditors' Consent
The Board of Directors
Citicorp Life Insurance Company;
We consent to the use of our reports included herein and to the reference of
our firm under the headings "Experts" and "Financial Statements" in the
Statement of Additional Information filed as part of Pre Effective Amendment
No. 1 to the registration statement on Form N-4 for Citicorp Life Variable
Annuity Separate Acocunt (File 333-71379)
Our report dated April 17, 1998, covering the financial statements of Citicorp
Life Insurance Company, contains an explanatory paragraph which states that the
financial statements are presented in conformity with accounting practices
prescribed or permitted by the State of Arizona Department of Insurance. These
practices differ in some respects from generally accepted accounting
principles. The financial statements do not include any adjustments that might
result from the differences.
/s/KPMG LLP
Chicago, Illinois
March 31, 1999
