<PAGE>
As filed with the Securities and Exchange Commission on April 30, 1997
Registration No. 33-82890
811-8700
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM N-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. 2
and
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 2
FIRST ING OF NEW YORK SEPARATE ACCOUNT A1
(Exact Name of Registrant)
FIRST ING LIFE INSURANCE COMPANY OF NEW YORK
(Name of Depositor)
225 Broadway, Suite 1901
New York, New York 10007
(Address of Depositor's Principal Executive Offices)
(303) 860-1290
(Depositor's Telephone Number, including Area Code)
Copy to:
JOHN R. BARMEYER DIANE E. AMBLER, ESQ.
First ING Life Insurance Company of New York Mayer, Brown & Platt
1290 Broadway 2000 Pennsylvania Avenue, N.W.
Denver, Colorado 80203-5699 Washington, D.C. 20006-1882
(Name and Address of Agent for Service) (202) 778-0641
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: AS SOON AS PRACTICAL AFTER THE
EFFECTIVE DATE.
----------------
DECLARATION PURSUANT TO RULE 24F-2
An indefinite amount of the Registrant's securities has been registered under
the Securities Act of 1933 pursuant to paragraph (b)(2) of Rule 24F-2 under the
Investment Company Act of 1940. Registrant filed its Form 24F-2 on February 28,
1997 for its most recent fiscal year ending December 31, 1996.
================
<PAGE>
FIRST ING OF NEW YORK SEPARATE ACCOUNT A1 (File No. 33-82890)
Cross-Reference Sheet
Pursuant to Rule 495(a)
Under the Securities Act of 1933
<TABLE>
<CAPTION>
Form N-4 Item No. Caption in Prospectus
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<S> <C> <C>
1. Cover Page Cover Page
2. Definitions Glossary of Terms
3. Synopsis Summary of the Exchequer
Variable Annuity
4. Condensed Financial Information Condensed Financial Information
5. General Description of Registrant, Depositor Facts about First ING Life and the Variable
and Portfolio Companies Account; The Guaranteed Interest Division
6. Deductions and Expenses Fee Table; Summary of the Exchequer Variable
Annuity; Contract Charges and Fees
7. General Description of Variable Annuity Facts about the Contract
Contracts
8. Annuity Period Choosing an Annuity Option
9. Death Benefit Summary of the Exchequer Variable Annuity; Values
under the Contract
10. Purchases and Contract Value Summary of the Exchequer Variable Annuity; Facts
about the Contract; Values under the Contract
11. Redemptions Summary of the Exchequer Variable Annuity;
Contract Charges and Fees; Values under the
Contract; Choosing an Annuity Option
12. Taxes Summary of the Exchequer Variable Annuity;
Contract Charges and Fees; Federal Tax
Considerations
13. Legal Proceedings Regulatory Information
14. Table of Contents of Statement of Table of Contents of Statement of Additional
Additional Information Information
</TABLE>
(ii)
<PAGE>
<TABLE>
<CAPTION>
Caption in Statement of Additional Information (or
-----------------------------------------------------
Form N-4 Item No. Prospectus, Where Indicated)
- ----------------- ----------------------------
<S> <C> <C>
15. Cover Page Cover Page
16. Table of Contents Table of Contents
17. General Information and History First ING Life; Prospectus -- Facts about First ING Life and
the Variable Account
18. Services First ING Life; The Administrator
19. Purchase of Securities Being Offered Prospectus -- Facts About the Contract
20. Underwriters First ING Life
21. Calculation of Performance Data Performance Information; Prospectus - Appendix A,
Performance Information
22. Annuity Payouts Performance Information; Prospectus -- Choosing
an Annuity Option
23. Financial Statements Financial Statements of First ING Life Insurance
Company of New York; Financial Statements of
First ING Separate Account A1 of First ING
Life Insurance Company of New York
</TABLE>
Part C - Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C to this Registration Statement.
(iii)
<PAGE>
THE EXCHEQUER VARIABLE ANNUITY
A FLEXIBLE PREMIUM DEFERRED COMBINATION FIXED AND VARIABLE ANNUITY CONTRACT
issued by
FIRST ING LIFE INSURANCE COMPANY OF NEW YORK
AND
FIRST ING OF NEW YORK SEPARATE ACCOUNT A1
This prospectus describes The Exchequer Variable Annuity, a flexible premium
deferred combination fixed and variable annuity contract (the "Contract")
offered by First ING Life Insurance Company of New York ("First ING Life," "we,"
"our" or "us"). The Contract is designed to aid in long-term financial planning
and generally provides automatic reinvestment and compounding of any investment
earnings on a tax-deferred basis for retirement or other long-term purposes. The
Owner ("you" or "your") purchases the Contract with an initial Purchase Payment
and is permitted to make additional Purchase Payments.
The Contract is funded by First ING of New York Separate Account A1 (the
"Variable Account"). Seventeen Divisions of the Variable Account are currently
available under the Contract. Each of the Divisions of the Variable Account
invests in shares of a corresponding Portfolio of a mutual fund. The Portfolios
available for investment through Divisions of the Variable Account include: (i)
Neuberger & Berman Advisers Management Trust-Limited Maturity Bond Portfolio;
(ii) Neuberger & Berman Advisers Management Trust-Growth Portfolio; (iii)
Neuberger & Berman Advisers Management Trust-Partners Portfolio; (iv) The Alger
American Fund-Alger American Small Capitalization Portfolio; (v) The Alger
American Fund-Alger American MidCap Growth Portfolio; (vi) The Alger American
Fund-Growth Portfolio; (vii) The Alger American Fund-Alger American Leveraged
AllCap Portfolio; (viii) Fidelity Variable Insurance Products Fund-VIP Growth
Portfolio; (ix) Fidelity Variable Insurance Products Fund-VIP Overseas
Portfolio; (x) Fidelity Variable Insurance Products Fund-VIP Money Market
Portfolio; (xi) Fidelity Variable Insurance Products Fund II-Asset Manager
Portfolio; (xii) Fidelity Variable Insurance Products Fund II-VIP II Index 500
Portfolio; (xiii) INVESCO VIF-Total Return Portfolio; (xiv) INVESCO VIF-
Industrial Income Portfolio; (xv) INVESCO VIF-High Yield Portfolio; (xvi)
INVESCO VIF-Utilities Portfolio; and (xvii) Van Eck Worldwide Insurance Trust-
Worldwide Hard Assets Fund. A Guaranteed Interest Division, which guarantees a
minimum fixed rate of interest, is also available. Investors may utilize both
the Variable Account and the Guaranteed Interest Division simultaneously.
You may allocate your Purchase Payments among the Divisions available under the
Contract in any way you choose, subject to certain restrictions. During the
Accumulation Period, you may change the allocation of your Accumulation Value up
to 12 times per Contract Year free of charge.
You may surrender the Contract for its Cash Surrender Value at any time prior to
the Annuity Date. The Cash Surrender Value will vary daily with the investment
results of the Divisions of the Variable Account and any interest credited to
the Guaranteed Interest Division. We do not guarantee any minimum Cash Surrender
Value for amounts allocated to the Divisions of the Variable Account. You may
withdraw some of your Cash Surrender Value by making partial withdrawals,
subject to certain restrictions. Surrenders and withdrawals may be subject to a
surrender charge and a tax penalty.
We will pay a Death Benefit to the Beneficiary if the Owner dies prior to the
Annuity Date.
This prospectus describes the Contract and your principal rights and limitations
and sets forth the information concerning the Variable Account that investors
should know before investing. A prospectus for each Portfolio being considered
must accompany this prospectus and should be read in conjunction with this
prospectus. The prospectuses provide information regarding investment activities
and objectives of the Portfolios. A Statement of Additional Information, dated
__________ ____, 1997, about the Variable Account has been filed with the
Securities and Exchange Commission ("SEC") and is available without charge. To
obtain a copy of this document, call or write our Customer Service Center. The
Table of Contents of the Statement of Additional Information may be found on
page 40 of this prospectus. The Statement of Additional Information is
incorporated herein by reference.
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PLEASE READ THIS PROSPECTUS AND KEEP IT FOR FUTURE REFERENCE.
IT IS NOT VALID UNLESS ACCOMPANIED BY THE CURRENT PROSPECTUS
FOR EACH OF THE PORTFOLIOS BEING CONSIDERED.
ISSUED BY: DISTRIBUTED BY: CUSTOMER SERVICE CENTER:
First ING Life Insurance ING America Equities, Inc. P.O. Box 173778
Company of New York 1290 Broadway, Attn: Denver, CO 80217-3778
1290 Broadway Variable 1-800-249-9099
Denver, CO 80203-5699 Denver, CO 80203
1-800-525-9852
Date of Prospectus: __________ 1997
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
GLOSSARY OF TERMS..........................................................................6
FEE TABLE..................................................................................8
SUMMARY OF THE EXCHEQUER VARIABLE ANNUITY.................................................13
GENERAL DESCRIPTION.......................................................................13
PURCHASE PAYMENTS.........................................................................14
GUARANTEED DEATH BENEFIT..................................................................14
PARTIAL WITHDRAWALS.......................................................................14
SURRENDERING YOUR CONTRACT................................................................14
YOUR RIGHT TO CANCEL THE CONTRACT.........................................................14
CONTRACT CHARGES AND FEES.................................................................14
CONDENSED FINANCIAL INFORMATION...........................................................16
FACTS ABOUT FIRST ING LIFE AND THE VARIABLE ACCOUNT.......................................16
FIRST ING LIFE............................................................................16
CUSTOMER SERVICE CENTER...................................................................17
THE VARIABLE ACCOUNT......................................................................17
THE PORTFOLIOS............................................................................17
CHANGES WITHIN THE VARIABLE ACCOUNT.......................................................21
FACTS ABOUT THE CONTRACT..................................................................21
YOUR RIGHT TO CANCEL THE CONTRACT.........................................................21
PURCHASE PAYMENTS.........................................................................21
Initial Purchase Payment..............................................................21
Additional Purchase Payments..........................................................22
Where to Make Payments................................................................22
Crediting and Allocation of Purchase Payments.........................................22
DOLLAR COST AVERAGING.....................................................................23
AUTOMATIC REBALANCING.....................................................................23
REPORTS TO OWNERS.........................................................................24
GROUP OR SPONSORED ARRANGEMENTS...........................................................24
OFFERING THE CONTRACT.....................................................................24
VALUES UNDER THE CONTRACT.................................................................25
GUARANTEED DEATH BENEFIT..................................................................25
DEATH BENEFIT PROCEEDS....................................................................25
How to Claim Payouts to Beneficiary...................................................25
YOUR ACCUMULATION VALUE...................................................................25
MEASUREMENT OF INVESTMENT EXPERIENCE FOR THE DIVISIONS OF THE VARIABLE ACCOUNT............26
Accumulation Unit Value...............................................................26
How We Determine the Accumulation Experience Factor...................................26
Net Rate of Return for a Division of the Variable Account.............................26
DIVISION ACCUMULATION VALUE OF EACH DIVISION OF THE VARIABLE ACCOUNT......................26
DIVISION ACCUMULATION VALUE OF THE GUARANTEED INTEREST DIVISION...........................27
YOUR RIGHT TO TRANSFER AMONG DIVISIONS....................................................27
PARTIAL WITHDRAWALS.......................................................................28
Demand Withdrawal Option..............................................................28
Systematic Income Program.............................................................29
</TABLE>
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2
FING Exchequer
<PAGE>
<TABLE>
<S> <C>
IRA Income Program -- IRA Contracts Only............................................29
The Amount You May Withdraw Without a Surrender Charge................................30
Tax Consequences of Partial Withdrawals...............................................30
SURRENDERING TO RECEIVE THE CASH SURRENDER VALUE..........................................30
WHEN WE MAKE PAYOUTS......................................................................31
THE GUARANTEED INTEREST DIVISION..........................................................31
OTHER INFORMATION.........................................................................32
THE OWNER.................................................................................32
THE ANNUITANT.............................................................................32
THE BENEFICIARY...........................................................................32
CHANGE OF OWNER, BENEFICIARY OR ANNUITANT.................................................32
OTHER CONTRACT PROVISIONS.................................................................32
In Case of Errors on the Application or Enrollment Form...............................33
Procedures............................................................................33
Telephone Privileges..................................................................33
Assigning the Contract as Collateral..................................................33
Non-Participating.....................................................................33
AUTHORITY TO CHANGE CONTRACT TERMS........................................................33
Contract Changes - Applicable Tax Law.................................................34
CONTRACT CHARGES AND FEES.................................................................34
DEDUCTION OF CHARGES......................................................................34
CHARGES DEDUCTED FROM THE ACCUMULATION VALUE..............................................34
Surrender Charge......................................................................34
Administrative Charge.................................................................34
Excess Transfer Charge................................................................35
Taxes on Purchase Payments............................................................35
CHARGES DEDUCTED FROM THE DIVISIONS.......................................................35
Mortality and Expense Risk Charge.....................................................35
Asset-based Administrative Charge.....................................................35
PORTFOLIO EXPENSES........................................................................36
CHOOSING AN ANNUITY OPTION................................................................36
GENERAL PROVISIONS........................................................................36
Supplementary Contract................................................................36
Election and Changes of Annuity Date..................................................36
Election and Changes of Annuity Option................................................36
PAYOUT OPTIONS............................................................................36
Variable Annuity Payout...............................................................37
Fixed Annuity Payout..................................................................37
Combination Annuity Payout............................................................37
Frequency and Amount of Annuity Payouts...............................................37
PAYOUT PERIOD OPTIONS.....................................................................38
Payouts Other Than Monthly............................................................38
Commuting Provisions..................................................................39
REGULATORY INFORMATION....................................................................39
VOTING PRIVILEGES.........................................................................39
STATE REGULATION..........................................................................40
LEGAL PROCEEDINGS.........................................................................40
LEGAL MATTERS.............................................................................40
EXPERTS...................................................................................40
</TABLE>
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FING Exchequer
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
FEDERAL TAX CONSIDERATIONS...............................................................40
INTRODUCTION.............................................................................40
FIRST ING LIFE TAX STATUS................................................................40
TAXATION OF ANNUITIES....................................................................40
1. Withdrawals Prior to the Annuity Commencement Date................................41
2. Annuity Payouts after the Annuity Date............................................41
3. Penalty Tax on Certain Withdrawals or Distributions...............................41
TAXATION OF INDIVIDUAL RETIREMENT ANNUITIES..............................................42
DISTRIBUTION-AT-DEATH RULES..............................................................42
TAXATION OF DEATH BENEFIT PROCEEDS.......................................................43
CONTRACTS OWNED BY NON-NATURAL PERSONS...................................................43
SECTION 1035 EXCHANGES...................................................................43
ASSIGNMENTS..............................................................................44
MULTIPLE CONTRACTS RULE..................................................................44
DIVERSIFICATION STANDARDS................................................................44
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION.................................44
APPENDIX A...............................................................................46
Example 1: Hypothetical Illustration of Systematic Income Program Withdrawals.......46
Example 2: Hypothetical Illustration of a Series of Demand Withdrawals..............46
Example 3: Hypothetical Illustration of a Full Surrender............................48
APPENDIX B...............................................................................49
PERFORMANCE INFORMATION..................................................................49
PERFORMANCE CHART........................................................................51
APPENDIX C...............................................................................52
</TABLE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS.
- --------------------------------------------------------------------------------
4
FING Exchequer
<PAGE>
GLOSSARY OF TERMS
As used in this prospectus, the following terms have the indicated meanings.
There are other capitalized terms which are explained or defined in other parts
of this prospectus.
Accumulation Experience Factor -- The factor which reflects the investment
experience of the Portfolio in which a Division of the Variable Account
invests as well as the asset-based charges assessed against that Division
for a Valuation Period during the Accumulation Period.
Accumulation Period -- The period of time from the Contract Date to the Annuity
Date.
Accumulation Unit -- A unit of measurement which we use to calculate the
Accumulation Value during the Accumulation Period.
Accumulation Unit Value -- The value of the Accumulation Units of the Divisions
of the Variable Account. The Accumulation Unit Value is determined as of
each Valuation Date.
Accumulation Value -- The amount that your Contract provides which is available
for investment at any time prior to the Annuity Date. Initially, this amount
is equal to the initial Purchase Payment. Thereafter, the Accumulation Value
will reflect additional Purchase Payments made, investment experience of the
Divisions of the Variable Account you select, interest credited to the
Guaranteed Interest Division, charges deducted and partial withdrawals taken.
Age -- The Age on the birthday prior to any date for which Age is to be
determined.
Annuitant -- The person designated by the Owner to receive the Annuity Payouts
and on whose life Annuity Payouts are based.
Annuity Date -- The date as of which Annuity Payouts begin.
Annuity Experience Factor -- The factor which reflects the investment experience
of the Portfolio in which a Division of the Variable Account invests as well
as the asset-based charges assessed against that Division for a Valuation
Period during the Annuity Period.
Annuity Options -- Options the Owner elects consisting of both the Payout Option
and the Payout Period Option that determine the Annuity Payout.
Annuity Payout -- The periodic payouts an Annuitant receives. They may be either
a fixed or a variable amount, or a combination of fixed and variable,
based on the Payout Option elected.
Annuity Period -- The period of time from the Annuity Date until the last
Annuity Payout is made to the Annuitant.
Annuity Unit -- A unit of measurement used to calculate any periodic Annuity
Payouts during the Annuity Period.
Annuity Unit Value -- The value of the Annuity Units of the Divisions of the
Variable Account. The Annuity Unit Value is determined as of each
Valuation Date.
Beneficiary (or Beneficiaries) -- The person (or persons) designated to receive
the Death Benefit in the case of the death of the Owner during the
Accumulation Period.
Benchmark Total Return -- The interest rate assumed for the purposes of
calculating the Annuity Payout upon annuitization.
Business Day -- Any day which is a Valuation Date.
Cash Surrender Value -- The amount the Owner receives upon surrendering the
Contract.
Code -- The Internal Revenue Code of 1986, as amended.
Contingent Annuitant -- The person designated by the Owner who becomes the
Annuitant upon the Annuitant's death.
Contingent Beneficiary (or Beneficiaries) -- The person (or persons) designated
by the Owner who, upon the Beneficiary's death, becomes the Beneficiary.
Contract -- The entire Contract consisting of the basic Contract, any
applications and any Riders or Endorsements.
Contract Anniversary -- The anniversary of the Contract Date.
Contract Date -- The date as of which we have received and accepted the initial
Purchase Payment and as of which we begin determining the Accumulation
Value. The Contract Date is used to determine Contract Processing Dates,
Years and Anniversaries.
Contract Processing Date -- The day the annual administrative charge is deducted
from the
- --------------------------------------------------------------------------------
5
FING Exchequer
<PAGE>
Accumulation Value. The Contract Processing Date is as of each Contract
Anniversary. Any Contract Processing Date that is not a Valuation Date is
deemed to occur as of the next succeeding Valuation Date.
Contract Year -- A period of 12 months commencing with the Contract Date or any
Contract Anniversary.
Customer Service Center -- Where service is provided to Owners. The mailing
address and telephone number of the Customer Service Center are shown on
the cover.
Death Benefit -- The amount actually payable due to the death of the Owner
during the Accumulation Period.
Division -- A sub-account of the Variable Account, the assets of which are
invested in a corresponding Portfolio or the Guaranteed Interest
Division.
Division Accumulation Value -- The value under a Contract in a particular
Division.
Earnings -- For purposes of calculating surrender charges, an amount equal to
the Accumulation Value less Purchase Payments not previously withdrawn.
Endorsements -- An Endorsement changes or adds provisions to the Contract.
Free Look Period -- The period of time within which an Owner may examine the
Contract and return it for a refund.
General Account -- The account which contains all of our assets other than those
held in our separate accounts.
Gross Partial Withdrawal -- A partial withdrawal plus any applicable partial
withdrawal transaction charges plus any applicable surrender charges.
Guaranteed Interest Division -- Part of our General Account to which a portion
of your Accumulation Value may be allocated and which provides guarantees of
principal and interest.
Individual IRA Contract -- An Individual Retirement Annuity, an IRA Rollover or
an IRA Transfer offered to an individual for use in connection with
Sections 408(a) and (b) of the Code.
IRA -- An Individual Retirement Annuity used as an Individual IRA Contract, a
SEP Contract or a SIMPLE Contract
NASD -- The National Association of Securities Dealers, Inc.
Net Purchase Payments -- Total Purchase Payments made less Gross Partial
Withdrawals taken.
Owner -- The person or persons who own the Contract and are entitled to exercise
all rights under the Contract. This person's death during the
Accumulation Period usually initiates payout of the Death Benefit.
Payout Option -- Specifies the type of annuity to be paid and may be either
fixed, variable or a combination of fixed and variable.
Payout Period Option -- Determines how long the annuity will be paid and the
amount of the first payout.
Portfolios -- The investment options available to the Divisions of the Variable
Account. Each Portfolio has a defined investment objective.
Proceeds -- The amount to be paid as of the Annuity Date to provide Annuity
Payouts, upon surrender of the Contract prior to the Annuity Date, or as a
Death Benefit prior to the Annuity Date.
Purchase Payments -- The initial Purchase Payment and any future payments made
with respect to your Contract.
Rider(s) -- A Rider adds benefits to the Contract.
SARSEP Contract -- A contract established as part of a salary reduction
simplified employee pension plan. A SARSEP is a type of SEP.
SEC -- The United States Securities and Exchange Commission.
SEP Contract -- A Contract which is part of a simplified employee pension plan
(SEP) established by an employer for use in connection with Section 408(k)
of the Code. A SEP Contract is a type of IRA.
SIMPLE Contract -- A contract which is part of a savings incentive match plan
for employees (SIMPLE) established by an employer for use in connection
with Section 408(p) of the Code. A SIMPLE Contract is a type of IRA.
Supplementary Contract -- The Election and Supplementary Agreement for a
Settlement Option amends the entire Contract when an Annuity Option
becomes effective. The Supplementary Contract describes the manner of
settlement and the rights of the Annuitant.
Supplementary Contract Effective Date -- The Annuity Date or the date of other
settlement, whenever the Annuity Option becomes effective.
Valuation Date -- Each date as of which the net asset value of the shares of any
of the Portfolios and unit values of the Divisions are determined. Valuation
Dates currently occur on each day on which the New York Stock Exchange and
First ING Life's Customer Service Center are open for business, except for
days on which a Division's corresponding Portfolio does not value its
shares.
Valuation Period -- The period that starts at 4 p.m. Eastern Time on a Valuation
Date and ends at 4 p.m. Eastern Time on the next succeeding Valuation
Date.
Variable Account -- First ING Life Separate Account A1 established by First ING
Life to segregate the assets funding the variable benefits provided by the
Contract from the assets in our General Account.
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FING Exchequer
<PAGE>
FEE TABLE
The purpose of the following tables is to assist you in understanding the
various costs and expenses that you may bear directly or indirectly. The tables
reflect charges under the Contracts, expenses of the Divisions and expenses of
the Portfolios. In addition to the charges and expenses described below, we may
also deduct from the Proceeds taxes incurred but not paid to cover any state or
local tax charge on Purchase Payments. See Taxes on Purchase Payments, page 35.
We may reduce certain charges under group or sponsored arrangements. See Group
or Sponsored Arrangements, page 24.
Transaction Expenses
Sales Load Imposed on Purchase Payments................................ 0%
Surrender Charge/1/
<TABLE>
<CAPTION>
Contract Anniversaries Since Surrender Charge as a Percentage of
Purchase Payment Was Made Purchase Payment Withdrawn
<S> <C>
0...............................................................7%
1...............................................................6%
2...............................................................5%
3...............................................................4%
4...............................................................3%
5...............................................................2%
6+..............................................................0%
<CAPTION>
<S> <C>
Excess Transfer Charge (does not apply to the first 12 transfers in a Contract Year)/2/.......................................$25
Annual Contract Fees
Administrative Charge (does not apply after the Annuity Date)/3/
If Net Purchase Payments made are less than $100,000.................................................................$30
If Net Purchase Payments made are $100,000 or more....................................................................$0
Variable Account Annual Expenses (as a percentage of assets in each Division of the Variable Account)
Mortality and Expense Risk Charge...........................................................................................1.25%
Asset-based Administrative Charge...........................................................................................0.15%
Total Variable Account Annual Expenses......................................................................................1.40%
</TABLE>
- --------------------------
/1/ Up to certain limits, partial withdrawals may be taken without incurring a
current surrender charge. See Charges Deducted from the Accumulation Value,
page 34.
/2/ Any transfer under Dollar Cost Averaging or Automatic Rebalancing is not
considered a transfer for this purpose. See Dollar Cost Averaging, page 23,
Automatic Rebalancing page 23, After the Annuity Date, transfers are limited
to four each Contract Year, and no transfer charge applies. See Excess
Transfer Charge, page 35.
/3/ The administrative charge is deducted as of each Contract Anniversary or
upon surrender. See Administrative Charge, page 34.
- --------------------------------------------------------------------------------
7
FING Exchequer
<PAGE>
Portfolio Annual Expenses (as a percentage of Portfolio average net assets)/4/
After expense reimbursement, where noted/5/
<TABLE>
<CAPTION>
Management Other Total Portfolio
Portfolio Fees Expenses Expenses
--------- ---- -------- --------
<S> <C> <C> <C>
Neuberger & Berman Advisers Management Trust/6/
Limited Maturity Bond Portfolio 0.65% 0.13% 0.78%
Growth Portfolio 0.83% 0.09% 0.92%
Partners Portfolio 0.84% 0.11% 0.95%
The Alger American Fund
Alger American Small Capitalization Portfolio 0.85% 0.03% 0.88%
Alger American MidCap Growth Portfolio 0.80% 0.04% 0.84%
Alger American Growth Portfolio 0.75% 0.04% 0.79%
Alger American Leveraged AllCap Portfolio 0.85% 0.24%/6/ 1.09%/7/
Fidelity Variable Insurance Products Fund
VIP Growth Portfolio 0.61% 0.08% 0.69%/8/
VIP Overseas Portfolio 0.76% 0.17% 0.93%/8/
VIP Money Market Portfolio 0.21% 0.09% 0.30%
- -----------------------------
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fidelity Variable Insurance Products Fund II
VIP II Asset Manager Portfolio 0.64% 0.10% 0.74%/8/
VIP II Index 500 Portfolio 0.13% 0.15% 0.28%/9/
INVESCO Variable Investment Funds, Inc.
INVESCO VIF - Total Return Portfolio 0.75% 0.19% 0.94%/10/ /11/
INVESCO VIF - Industrial Income Portfolio 0.75% 0.20% 0.95%/10/ /12/
INVESCO VIF - High Yield Portfolio 0.60% 0.27% 0.87%/10/ /13/
INVESCO VIF - Utilities Portfolio 0.60% 0.56% 1.16%/10/ /14/
Van Eck Worldwide Insurance Trust
Worldwide Hard Assets Fund 1.00% 0.24% 1.24%
- -----------------------
</TABLE>
/4/ The preceding Portfolio expense information was provided to us by the
Portfolios, and we have not independently verified such information. These
Portfolio expenses are not direct charges against Division assets or
reductions from Contract values; rather these Portfolio expenses are taken
into consideration in computing each underlying Portfolio's net asset value,
which is the share price used to calculate the unit values of the Divisions.
For a more complete description of the Portfolios' costs and expenses, see
the prospectuses for the Portfolios.
/5/ In certain cases, expenses reflected in the table have been reduced by
expense reimbursements. In certain other cases, expense reimubursements are
not reflected in the table, but are instead reflected in the corresponding
footnote.
/6/ After expense reimbursement. Neuberger & Berman Advisers Management Trust
(the "Trust") is divided into portfolios ("Portfolios"), each of which
invests all of its net investable assets in a corresponding series
("Series") of Advisers Managers Trust. Expenses in the table reflect
expenses of the Portfolios and include each Portfolio's pro rata portion of
the operating expenses of each Portfolio's corresponding Series. The
Portfolios pay Neuberger & Berman Management, Inc. ("NBMI"), an
administration fee based on the Portfolios' net asset value. Each
Portfolio's corresponding Series pays NBMI a management fee based on the
Series' average daily net assets. Accordingly, this table combines
management fees at the Series level and administration fees at the Portfolio
level in a unified fee rate. See "Expenses" in the Trust's Prospectus.
Expenses reflect expense reimbursement. NBMI has voluntarily undertaken to
limit the Portfolios' compensation of NBMI and excluding taxes, interest,
extraordinary expense, brokerage commissions and transaction costs, that
exceed 1% of the Portfolios' average daily net asset value. These expense
reimbursement policies are subject to termination upon 60 days written
notice to the Portfolios.
/7/ The Alger American Leverage AllCap Portfolio's "Other Expenses" includes
0.03% of interest expense.
/8/ Before expense reimbursement. A portion of the brokerage commissions the
Portfolio paid was used to reduce its expenses. In addition, certain funds
have entered into arrangements with their custodian and transfer agent
expenses. Including these reductions, the total operating expenses
presented in the table would have been 0.67% for Growth Portfolio, 0.92%
for Overseas Portfolio, and 0.73% for Asset Manager Portfolio.
/9/ After expense reimbursement. FMR agreed to reimburse a portion of Index 500
Portfolio's expenses during the period. Without this reimbursement, the
funds' management fee, other expenses and total expenses would have been
0.28%, 0.15% and 0.43% respectively for Index 500 Portfolio on a annualized
basis.
/10/ After expense reduction and before expense offset. The Portfolios'
custodian fees were reduced under an expense offset arrangement. In
addition, certain expenses of the Portfolio's are being absorbed
voluntarily by INVESCO Funds Group, Inc. ("IFG"). The above ratios reflect
total expenses, less expenses absorbed by IFG, prior to any expense offset.
/11/ After expense reduction and before expense offset. Various expenses of the
Portfolio were voluntarily absorbed by IFG for the years ended December 31,
1996 and 1995 and the period December 31, 1994. If such expenses had not
been voluntarily absorbed, ratio expenses to average net assets would have
been 1.30%, 2.51% and 16.44%, respectively, and ratio of net investment
income to average net assets would have been 3.08%, 2.41% and (11.72%),
respectively.
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<PAGE>
/12/ After expense reduction and before expense offset. Various expenses of the
Portfolio were voluntarily absorbed by IFG for the years ended December 31,
1996 and 1995 and the period ended December 31, 1994. If such expenses had
not been voluntarily absorbed, ratio of expenses to average net assets
would have been 1.19%, 2.31% and 32.55%, respectively, and ratio of net
investment income to average net assets would have been 2.63%, 2.22% and
(30.07%), respectively.
/13/ After expense reduction and before expense offset. Various expenses of the
Portfolio were voluntarily absorbed by IFG for the years ended December 31,
1996 and 1995 and the period ended December 31, 1994. If such expenses had
not been voluntarily absorbed, ratio of expenses to average net assets
would have been 1.32%, 2.71% and 30.38% respectively, and ratio of net
investment income to average net assets would have been 8.74%, 7.05% and
(26.92%), respectively.
/14/ After expense reduction and before expense offset. Various expenses of the
Portfolio were voluntarily absorbed by IFG for the years ended December 31,
1996 and 1995. If such expenses had not been voluntarily absorbed, ratio
expenses to average net assets would have been 5.36%, and 57.13%,
respectively, and ratio of net investment income to average net assets
would have been (1.28%), and (52.86), respectively.
Examples
The following examples depict the dollar amount of expenses that would be
incurred under this Contract assuming a $1,000 initial Purchase Payment and 5%
annual return on assets. The expense amounts presented are derived from a
formula which allows the maximum $30 annual administrative charge to be
expressed as a percentage of the anticipated average Contract account size.
Because the anticipated average Contract account size is greater than $1,000,
the expense effect of the annual administrative charge is reduced accordingly.
Taxes on Purchase Payments may also be applicable but are not reflected in the
expenses below. See Taxes on Purchase Payments, page 31. The Death Benefit Risk
Charge and the annual administrative charge do not apply during the Annuity
Period.
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<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
If you surrender your Contract at the If you do not surrender your Contract
end of the applicable time period. or if you annuitize at the end of the
applicable time period.
--------------------------------------------------------------------------------------------- ---------------------------------
Division Investing In: 1 3 5 10 1 3 5 10
Year Years Years Years Year Years Years Years
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Neuberger & Berman Advisers Management Trust
Limited Maturity Bond Portfolio 93 120 150 256 23 70 120 256
Growth Portfolio 94 124 157 269 24 74 127 269
Partners Portfolio 94 125 158 272 24 75 128 272
The Alger American Fund
Alger American Small Capitalization Portfolio 94 123 155 265 24 73 125 265
Alger American MidCap Growth Portfolio 93 122 153 262 23 72 123 262
Alger American Growth Portfolio 93 120 150 257 23 70 120 257
Alger American Leveraged AllCap Portfolio 96 129 165 285 26 79 135 285
Fidelity Variable Insurance Products Funds
VIP Growth Portfolio 92 117 145 247 22 67 115 247
VIP Overseas Portfolio 94 124 157 270 24 74 127 270
VIP Money Market Portfolio 88 106 126 208 18 56 96 208
Fidelity Variable Insurance Products Funds II
VIP II Asset Manager Portfolio 92 119 148 252 22 69 118 252
VIP II Index 500 Portfolio 88 105 125 206 18 55 95 206
INVESCO Variable Investment Funds, Inc.
INVESCO VIF - Total Return Portfolio 94 125 157 271 24 75 127 271
INVESCO VIF - Industrial Income Portfolio 94 125 158 272 24 75 128 272
INVESCO VIF - High Yield Portfolio 94 123 154 264 24 73 124 264
INVESCO VIF - Utilities Portfolio 96 131 168 292 26 81 138 292
Van Eck Worldwide Insurance Trust
Worldwide Hard Assets Fund 97 133 172 300 27 83 142 300
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST
OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE SHOWN, SUBJECT TO THE GUARANTEES UNDER THE CONTRACT.
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<PAGE>
SUMMARY OF THE
EXCHEQUER VARIABLE
ANNUITY
General Description
This prospectus provides you with the necessary information to make a decision
on purchasing the Exchequer Variable Annuity offered by First ING Life and
funded by the Variable Account as well as by our General Account. The
description of the Contracts in this prospectus is subject to the terms of the
Contract purchased by an Owner and any Endorsement or Rider to it. An applicant
may review a copy of the Contract and any Endorsement or Rider to it on request.
This summary provides a brief overview of the more significant aspects of the
Contract. Further detail is provided in this prospectus, the related Statement
of Additional Information, the Contract, and the prospectuses of the Portfolios
being considered. The description of the Contract in this prospectus, together
with any applications and any Riders or Endorsements, constitute the entire
agreement between you and us and should be retained. For further information
about the Contract, contact the First ING Life Customer Service Center.
We can issue a Contract if the Owner and Annuitant are not older than Age 80,
and we can accept additional Purchase Payments prior to the Annuity Date. For an
IRA Contract, you generally may not make Purchase Payments after March 31 of the
year following the year in which you reach Age 70 1/2.
The Contract may be used as an Individual Retirement Annuity, an IRA Rollover,
an IRA Transfer, a SEP Contract or a SIMPLE Contract ("IRA Contracts"). IRA
Contracts are offered to individuals for use in connection with Sections 408(a)
and (b) of the Code. See your tax adviser concerning these matters.
Purchase Payments or Accumulation Value may be allocated among one or more of
seventeen Divisions of the Variable Account, a separate account of First ING
Life, or to the Guaranteed Interest Division. We do not promise that your
Accumulation Value will increase. Depending on the Contract's investment
experience for funds invested in the Divisions of the Variable Account and
interest credited to the Guaranteed Interest Division, the Accumulation Value,
Cash Surrender Value and Death Benefit may increase or decrease on any day.
Furthermore, any investment earnings under the Contract generally accumulate
free from annual taxation under current tax law until distributed.
Each Division of the Variable Account invests its assets without sales charge in
a corresponding mutual fund Portfolio. The Portfolios have their own distinct
investment objectives and are managed by experienced fund investment advisers.
You bear the investment risk for funds invested in the Divisions of the Variable
Account; you receive the benefits from favorable experience but also bear the
risk of poor investment experience. These Portfolios are available only to serve
as the underlying investment for variable annuity and variable life insurance
contracts issued through separate accounts of First ING Life as well as other
life insurance companies, and to certain qualified pension and retirement plans.
They are not directly available to individual investors. For more information
regarding the Variable Account, the Divisions and the Portfolios, see The
Variable Account, page 17, and The Portfolios, page 17.
The Guaranteed Interest Division is a part of our General Account and guarantees
principal and a minimum interest rate of 3%. This interest will be paid
regardless of the actual investment experience of the General Account; we bear
the full amount of the investment risk for any amounts allocated to the
Guaranteed Interest Division. For more information about The Guaranteed Interest
Division, see THE GUARANTEED INTEREST DIVISION, page 31.
The Contract also offers a choice of Annuity Options to which you may apply the
Accumulation Value less taxes incurred but not deducted as of the Annuity Date.
These Annuity Options are also available to the Beneficiary to apply the Death
Benefit as of the Supplementary Contract Effective Date. You have the option to
change the Annuity Date within certain limits.
The ultimate effect of Federal income taxes on the amounts held under a
Contract, on Annuity Payouts and on the economic benefits to the Owner,
Annuitant or Beneficiary depends on First ING Life's tax status and upon the tax
status of the parties concerned. In general, an Owner is not taxed on increases
in value under an annuity Contract until some form of distribution is made under
it. There may be tax penalties if you make a partial withdrawal or surrender the
Contract before reaching Age
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<PAGE>
59 1/2. See FEDERAL TAX CONSIDERATIONS, page 40.
Purchase Payments
The minimum initial Purchase Payment is $5,000 ($1,000 for an IRA Contract). The
minimum additional Purchase Payment we will accept is $500 ($250 for an IRA
Contract or $90 if you have set up your IRA on a monthly program of Purchase
Payments). We will take under consideration and may refuse to accept a Purchase
Payment if it would cause the sum of all Net Purchase Payments received under
the Contract to exceed $1,500,000.
The initial Purchase Payment is allocated to each Division according to your
most recent allocation instructions unless the Contract is issued in a state
that requires the return of Purchase Payments during the Free Look Period. In
those states, your initial Purchase Payment allocated to the Guaranteed Interest
Division will be allocated to that Division upon receipt; your initial Purchase
Payment allocated to the Divisions of the Variable Account will be allocated to
the Division investing in the Fidelity VIP Money Market Portfolio during the
Free Look Period and then transferred to the Divisions of the Variable Account
according to your most recent allocation instructions. See Your Right to Cancel
the Contract, page 21.
All percentage allocations must be in whole numbers. We allocate any additional
Purchase Payments among the Divisions in accordance with your most recent
allocation instructions, or as otherwise instructed by you. You may designate a
different allocation with respect to any Purchase Payment by sending us a
written notice with the Purchase Payment or by telephone, if the proper
telephone authorization form is on file with us. See Crediting and Allocation of
Purchase Payments, page 22.
You may choose to have a specified dollar amount transferred from the Divisions
investing in the Fidelity VIP Money Market Portfolio or the Neuberger & Berman
AMT Limited Maturity Bond Portfolio to the other Divisions of the Variable
Account on a monthly basis during the Accumulation Period with the objective of
shielding your investment from short-term price fluctuations. See Dollar Cost
Averaging, page 23.
You may transfer or reallocate your Accumulation Value among the Divisions of
the Variable Account any time after the end of the Free Look Period. There is no
charge for the first 12 transfers per Contract Year during the Accumulation
Period. A $25 charge will be assessed for each transfer in excess of 12 during a
Contract Year. During the Annuity Period, you may make up to four transfers per
Contract Year and no transfer charge will be assessed.
Guaranteed Death Benefit
The Contract provides a Guaranteed Death Benefit to the Beneficiary if the Owner
dies prior to the Annuity Date. For more details, see Guaranteed Death Benefit,
page 25, and Death Benefit Proceeds, page 25.
Partial Withdrawals
After the Free Look Period, prior to the Annuity Date and while the Contract is
in effect, you may take partial withdrawals under any of three options: the
Demand Withdrawal Option, the Systematic Income Program or the IRA Income
Program.
A penalty tax may be assessed upon partial withdrawals. See Taxation of
Annuities, page 40.
Surrendering Your Contract
You may surrender the Contract at any time prior to the Annuity Date and receive
its Cash Surrender Value. No Annuity Options are available upon surrender. No
surrender may be made on or after the Annuity Date or with respect to any
amounts applied under an Annuity Option. See Surrendering to Receive the Cash
Surrender Value, page 30.
A penalty tax may be assessed upon surrender. See Taxation of Annuities, page
40.
Your Right to Cancel the Contract
At any time during the Free Look Period, you may cancel your Contract and
receive a refund equal to your Accumulation Value plus charges deducted.
However, if required by state law, we will return the Purchase Payments made.
The Free Look Period is a ten day period of time, or such other period as
required by state law beginning when the Contract is delivered to you. See Your
Right to Cancel the Contract, page 21.
Contract Charges and Fees
We deduct charges for certain transactions and make deductions from the
Divisions of the Variable Account
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13
FING Exchequer
<PAGE>
and the Guaranteed Interest Division in the same proportion that the Division
Accumulation Value of each Division bears to the total Accumulation Value. We
may reduce certain charges for group or sponsored arrangements. See Group or
Sponsored Arrangements, page 24. A description of the charges we deduct follows.
If a Purchase Payment is withdrawn or surrendered within five full Contract
Years since the Contract Anniversary at the end of the Contract Year in which
the Purchase Payment was made, a surrender charge is assessed. If a Purchase
Payment is made as of the first day of a Contract Year, a surrender charge will
apply against this Purchase Payment for six full years. For purposes of
determining the amount of Purchase Payments withdrawn and the surrender charge,
withdrawals will be allocated first to the Earnings, then to Purchase Payments
held for at least five full Contract Years since the Contract Anniversary at the
end of the Contract Year in which the Purchase Payment was made, then to the
amount by which 15% of the Accumulation Value as of the last Contract
Anniversary (less any Gross Partial Withdrawals already made during the Contract
Year which are not considered to be withdrawals of Purchase Payments) exceeds
the Earnings in the Contract, if any, and finally to Purchase Payments to which
the lowest surrender charge applies. The surrender charge is 7% of the Purchase
Payment if withdrawn in the Contract Year during which the Purchase Payment was
made, reduced by 1% each year for the next five Contract Years and is 0% in the
sixth Contract Year following the Contract Year in which the Purchase Payment
was made. See Surrender Charge, page 30.
We charge each Division of the Variable Account with a daily asset-based charge
equivalent to an annual rate of 1.250% for mortality and expense risks. See
Charges Deducted from the Accumulation Value, page 35.
We charge each Division of the Variable Account with a daily asset-based charge
equivalent to an annual rate of 0.15% to cover a portion of Contract
administration costs. See Asset-based Administrative Charge, page 35.
During the Accumulation Period, we deduct an annual administrative charge of $30
per Contract Year if Net Purchase Payments are less than $100,000. If Net
Purchase Payments equal $100,000 or more, the charge is zero. We also deduct
this charge when determining the Cash Surrender Value payable if you surrender
the Contract prior to the end of a Contract Year. See Administrative Charge,
page 34.
A $25 charge will be assessed for each transfer in excess of 12 during a
Contract Year during the Accumulation Period. See Excess Transfer Charge, page
35.
Generally, taxes on Purchase Payments, if any, are incurred as of the Annuity
Date, and a charge for taxes on Purchase Payments is deducted from the
Accumulation Value as of that date. Some jurisdictions impose a tax on Purchase
Payments at the time a Purchase Payment is paid. In these jurisdictions, our
current practice is to pay the tax on Purchase Payments for you and then deduct
the charge for these taxes from the payout of Proceeds. See Taxes on Purchase
Payments, page 35.
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<PAGE>
There are fees and expenses deducted from the Portfolios. The investment
experience of the Portfolios and deductions for fees and expenses from the
Portfolios underlying the Divisions in which you are invested will affect your
Accumulation Value. Please read the prospectus for each of the Portfolios you
are considering for details.
TAX CONSIDERATIONS
Under current Federal income tax law, the increase in value of an annuity
contract owned by an individual is generally not taxed until it is distributed.
Prior to the Annuity Date, partial withdrawals, surrenders or assignments may
result in the recognition of ordinary income for tax purposes and may also
result in tax penalties if the taxpayer is under age 59 1/2. After the Annuity
Date, the taxable portion of each annuity payout will be subject to tax at
ordinary income rates.
Generally, under current Federal income tax law, proceeds of an annuity Contract
must be distributed within five years of the death of the Owner. Death proceeds
may result in the recognition of ordinary income by the recipient.
Section 1035 of the Code generally provides that no gain or loss shall be
recognized on the exchange of an annuity Contract for another. Special rules and
procedures apply to Section 1035 transactions. See FEDERAL TAX CONSIDERATIONS
page 40.
CONDENSED FINANCIAL INFORMATION
The audited financial statements of First ING Life at December 31, and
1995, and for each of the three years in the period ended December 31, 1996, (as
well as the auditor's reports thereon) and the audited financial statements of
the Separate Account as of December 31, 1996, and for the year then ended are in
the Statement of Additional Information. These financial statements have been
prepared according to generally accepted accounting principles.
FACTS ABOUT FIRST ING LIFE AND THE VARIABLE ACCOUNT
FIRST ING LIFE
First ING Life is a stock life insurance company originally organized under the
laws of the State of New York in 1973 as The Urbaine Life Reinsurance Company.
The name of the company was changed in 1994 to First ING Life Insurance Company
of New York. Our headquarters are located at 225 Broadway, Suite 1901, New
York, New York 10007. Our total assets exceeded $33 million, and our
shareholder's equity exceeded $21 million, on a generally accepted accounting
principles basis as of December 31, 1996. We are admitted to do business in
twenty states and the District of Columbia. Our primary current focus is the
marketing of direct life insurance and annuity business.
First ING Life actively manages its General Account investment portfolio to meet
both long-term and short-term contractual obligations. The General Account
portfolio invests primarily in investment-grade bonds and low-risk policy loans.
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<PAGE>
In 1993, the company was purchased and became a wholly owned indirect subsidiary
of ING Groep, N.V. ("ING"), one of the world's three largest diversified
financial services organizations. ING is headquartered in Amsterdam,
Netherlands, and had consolidated assets exceeding $277.9 billion on a Dutch
(modified U.S.) generally accepted accounting principles basis as of December
31, 1996.
The principal underwriter and distributor of the Contracts is ING America
Equities, Inc. ("ING America Equities"), an affiliate of First ING Life. ING
America Equities is registered as a broker-dealer with the SEC and is a member
of the NASD. The current address for ING America Equities is 1290 Broadway,
Attn: Variable, Denver, Colorado 80203-5699.
CUSTOMER SERVICE CENTER
Financial Administrative Services Corporation provides administrative services
for First ING Life at our Customer Service Center at P.O. Box 173778, Denver, CO
80217-3778. The administrative services include processing Purchase Payments,
Annuity Payouts, Death Benefits, surrenders, partial withdrawals and transfers;
preparing confirmation notices and periodic reports; calculating mortality and
expense risk charges; calculating Accumulation and Annuity Unit Values and
distributing voting materials and tax reports.
THE VARIABLE ACCOUNT
All obligations under the Contract are general obligations of First ING Life.
The Variable Account is a separate investment account used to support our
variable annuity contracts and for other purposes as permitted by applicable
laws and regulations. The assets of the Variable Account are our property, but
are kept separate from our General Account and our other variable accounts. We
may offer other variable annuity contracts investing in the Variable Account
which are not discussed in this prospectus. The Variable Account may also invest
in other portfolios which are not available to the Contract described in this
prospectus.
We own all the assets in the Variable Account. Income and realized and
unrealized gains or losses from assets in the Variable Account are credited to
or charged against the Variable Account without regard to other income, gains or
losses in our other investment accounts. That portion of the assets of the
Variable Account which is equal to the reserves and other contract liabilities
with respect to the Variable Account is not chargeable with liabilities arising
out of any other business we may conduct. It may, however, be subject to
liabilities arising from Divisions of the Variable Account whose assets are
attributable to other variable annuity contracts offered by the Variable
Account. If the assets exceed the required reserves and other contract
liabilities, we may transfer the excess to our General Account. The assets in
the Variable Account will at all times equal or exceed the sum of the
accumulation values of all contracts funded by this Variable Account.
The Variable Account was established on March 15, 1994, and it may invest in
mutual funds or other investment portfolios which we determine to be suitable
for the contracts' purposes. The Variable Account is treated as a unit
investment trust under Federal securities laws. It is registered with the SEC
under the Investment Company Act of 1940 (the "1940 Act") as an investment
company. Such registration does not involve any supervision by the SEC of the
management of the Variable Account or First ING Life. The Variable Account is
governed by the laws of New York, our state of domicile, and may also be
governed by laws of other states in which we do business.
Seventeen Divisions of the Variable Account are currently available under the
Contract. Each of the Divisions invests in shares of a corresponding Portfolio
of a mutual fund. Therefore, the investment experience of your Contract depends
on the experience of the Divisions you select. These Portfolios are available
only to serve as the underlying investment for variable annuity and variable
life insurance contracts issued through separate accounts of First ING Life as
well as other life insurance companies, and to certain qualified pension and
retirement plans. They are not available directly to individual investors.
THE PORTFOLIOS
Currently, each Division of the Variable Account offered pursuant to this
prospectus invests in a corresponding Portfolio. See the prospectus for each of
the Portfolios being considered for details.
Shares of these Portfolios are sold to separate accounts of insurance companies,
which may or may not be affiliated with First ING Life or each other, a practice
known as "shared funding." These shares may also be sold to separate accounts
funding both variable annuity contracts and variable life insurance policies, a
practice known as "mixed funding." As a result, there is a possibility that a
material conflict may arise between the interests of Owners of Contracts in
which Division Accumulation Values are allocated to the Variable Account and of
owners of contracts in which accumulation values are
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FING Exchequer
<PAGE>
allocated to one or more other separate accounts investing in any one of the
Portfolios. Shares of these Portfolios may also be sold to certain qualified
pension and retirement plans qualifying under Section 401 of the Code that
include cash or deferred arrangements under Section 401(k) of the Code. As a
result, there is a possibility that a material conflict may arise between the
interests of owners generally or certain classes of owners, and such retirement
plans or participants in such retirement plans. In the event of a material
conflict, First ING Life will consider what action may be appropriate, including
removing the Portfolio from the Variable Account. There are certain risks
associated with mixed and shared funding and with the sale of shares to
qualified pension and retirement plans, as disclosed in each Portfolio's
prospectus.
Each of the Portfolios is part of a separate series of an open-end diversified
management investment company which receives investment advice from a registered
investment adviser. The Neuberger & Berman Advisers Management Trust utilizes a
master feeder structure. See the prospectus for the Neuberger & Berman Advisers
Management Trust for more details.
The Portfolios as well as their investment objectives are described below. There
is no guarantee that any Portfolio will meet its investment objectives. Meeting
objectives depends on various factors, including, in certain cases, how well the
portfolio manager anticipates changing economic and market conditions.
Please refer to the prospectus for each of the Portfolios you are considering
for more information. A description of each Portfolio, its objectives and
investments of each Portfolio follows.
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
The Neuberger & Berman Advisers Management Trust (the "Trust") is a registered,
open-end management investment company organized as a Delaware business trust
pursuant to a Trust Instrument dated May 23, 1994. The Trust is comprised of
separate Portfolios, each of which invests all of its net investable assets in a
corresponding series of Advisers Managers Trust ("Managers Trust"), a
diversified, open-end management investment company organized as of May 24, 1994
as a New York common law trust. This master feeder structure is different from
that of many other investment companies which directly acquire and manage their
own portfolios of securities. Neuberger & Berman Management Incorporated acts as
investment manager to Managers Trust and Neuberger & Berman, L.P. as sub-
adviser.
Limited Maturity Bond Portfolio -- seeks the highest current income consistent
with low risk to principal and liquidity. As a secondary objective, it also
seeks to enhance its total return. The Limited Maturity Bond Portfolio
pursues its investment objectives by investing in a diversified portfolio of
U.S. Government and Agency securities and investment grade debt securities
issued by financial institutions, corporations and others. The Limited
Maturity bond Portfolio may invest up to 10% of its net assets, measured at
the time of investment, in fixed income securities rated below investment
grade or in comparable unrated securities. The Limited Maturity Bond
Portfolio's dollar weighted average portfolio duration may range up to four
years.
Growth Portfolio -- seeks capital appreciation without regard to income and
invests in small-medium and large capitalization securities believed to have
maximum potential for long-term capital appreciation. The portfolio utilizes
a "growth at a reasonable price" strategy in selecting these securities. This
investment program involves greater risks and share price volatility than
programs that invest in more conservative securities.
Partners Portfolio -- seeks capital growth through an investment approach that
is designed to increase capital with reasonable risk. Its investment program
seeks securities believed to be undervalued based on strong fundamentals such
as a low price to earnings ratio, consistent cash flow, and support from
asset values. Up to 15% of the series' net assets, measured at the time of
investment, may be invested in corporate debt securities rated below
investment grade.
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<PAGE>
THE ALGER AMERICAN FUND
The Alger American Fund is a registered investment company organized on April 6,
1988 as a multi-series Massachusetts business trust. The Fund's investment
manager is Fred Alger Management, Inc., which has been in the business of
providing investment advisory services since 1964.
Alger American Small Capitalization Portfolio -- seeks to obtain long term
capital appreciation. Except during temporary defensive periods, the
Portfolio invests at least 65% of its total assets in equity securities of
companies that, at the time of purchase of the securities, have total market
capitalization within the range of companies included in the Russell 2000
Growth Index ("Russell Index") or the S&P SmallCap 600 Index ("S&P Index"),
updated quarterly. Both indexes are broad indexes of small capitalization
stocks. As of March 31, 1997, the range of market capitalization of the
companies in the Russell Index was $10 million to $1.954 billion; the range
of market capitalization of the companies in the S&P Index at that date was
$32 million to $2.579 billion. The combined range was $10 million to $2.579
billion.
Alger American MidCap Growth Portfolio -- seeks long-term capital appreciation.
Except during temporary defensive periods, the Portfolio invests at least 65%
of its total assets in equity securities of companies that, at the time of
purchase of the securities, have total market capitalization within the range
of companies included in the S&P MidCap 400 Index, updated quarterly. The S&P
MidCap 400 Index is designed to track the performance of medium
capitalization companies. As of March 31, 1997, the range of market
capitalization of these companies was $ 120 million to $ 7.193 billion.
Alger American Growth Portfolio -- seeks to obtain long-term capital
appreciation. The Portfolio will invest its assets primarily in companies
whose securities are traded on domestic stock exchanges or in the over-the-
counter market. Except during temporary defensive periods, the Portfolio will
invest at least 65% of its total assets in the securities of companies that,
at the time of purchase of the securities, have a total market capitalization
of $1 billion or greater.
Alger American Leveraged AllCap Portfolio -- seeks long-term capital
appreciation. The Portfolio may purchase put and call options and sell
(write) covered call and put options on securities and securities indexes to
increase gain and to hedge against the risk of unfavorable price movements,
and may enter into futures contracts on securities indexes and purchase and
sell call and put options on these futures contracts. The Portfolio may also
borrow money for the purchase of additional securities. The Portfolio may
borrow only from banks and may not borrow in excess of one third of the
market value of its assets, less liabilities other than such borrowing.
Except during temporary defensive periods, the Portfolio will invest 85% of
its net assets in equity securities of companies of any size.
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<PAGE>
FIDELITY VARIABLE INSURANCE PRODUCTS FUND AND VARIABLE INSURANCE PRODUCTS FUND
II
Fidelity Variable Insurance Products Fund and Variable Insurance Products Fund
II are open-end, diversified, management investment companies organized as
Massachusetts business trusts on November 13, 1981 and March 21, 1988,
respectively. The funds are managed by Fidelity Management & Research Company
("FMR") which handles the Funds' business affairs. FMR is the management arm of
Fidelity Investments, which was established in 1946 and is now America's largest
mutual fund manager.
VIP Growth Portfolio -- seeks capital appreciation by investing in common
stocks, although the Portfolio is not limited to any one type of security.
VIP Overseas Portfolio -- seeks long term growth of capital primarily through
investments in foreign securities. The Overseas Portfolio provides a means
for investors to diversify their own portfolios by participating in companies
and economies outside of the United States.
VIP Money Market Portfolio -- seeks as high a level of current income as is
consistent with preserving capital and providing liquidity. The Portfolio
will invest only in high quality U.S. dollar-denominated money market
securities of domestic and foreign issuers.
VIP II Asset Manager Portfolio -- seeks high total return with reduced risk over
the long-term by allocating its assets among domestic and foreign stocks,
bonds, and short-term fixed-income instruments.
VIP II Index 500 Portfolio -- seeks to provide investment results that
correspond to the total return (i.e., the combination of capital changes and
income) of common stocks publicly traded in the United States. In seeking
this objective, the Portfolio attempts to duplicate the composition and total
return of the Standard & Poor's Composite Index of 500 Stocks while keeping
transaction costs and other expenses low. The Portfolio is designed as a
long-term investment option.
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO Variable Investment Funds, Inc. is a registered, open-end management
investment company that was organized as a Maryland corporation on August 19,
1993, and is currently comprised of four diversified investment Portfolios,
described below. INVESCO Funds Group, Inc., the Fund's investment adviser, is
primarily responsible for providing the Portfolios with various administrative
services and supervising the Fund's daily business affairs. Portfolio management
is provided to each Portfolio by its sub-adviser. INVESCO Trust Company serves
as sub-adviser to the Industrial Income, High Yield and Utilities Portfolios.
INVESCO Capital Management, Inc. serves as sub-adviser to the Total Return
Portfolio.
INVESCO VIF Total Return Portfolio -- seeks a high total return on investment
through capital appreciation and current income. The Total Return Portfolio
seeks to achieve its investment objective by investing in a combination of
equity securities (consisting of common stocks and, to a lesser degree,
securities convertible into common stock) and fixed income securities.
INVESCO VIF Industrial Income Portfolio -- seeks the best possible current
income, while following sound investment practices. Capital growth potential
is an additional consideration in the selection of portfolio securities. The
Portfolio normally invests at least 65% of its total assets in dividend-
paying common stocks. Up to 10% of the Portfolio's total assets may be
invested in equity securities that do not pay regular dividends. The
remaining assets are invested in other income-producing securities, such as
corporate bonds. The Portfolio also has the flexibility to invest in other
types of securities.
INVESCO VIF High Yield Portfolio -- seeks a high level of current income by
investing substantially all of its assets in lower rated bonds and other debt
securities and in preferred stock. Under normal circumstances, at least 65%
of the Portfolio's total assets will be invested in debt securities having
maturities at the time of issuance of at least three years. Potential capital
appreciation is a factor in the selection of investments, but is secondary to
the Portfolio's primary objective. This Portfolio may not be appropriate for
all Owners due to the higher risk of lower rated bonds commonly known as
"junk bonds." See the prospectus for the INVESCO VIF High Yield Portfolio for
more information concerning these risks.
INVESCO VIF Utilities Portfolio -- seeks capital appreciation and income through
investments primarily in equity securities of companies principally engaged
in the public utilities business.
VAN ECK WORLDWIDE INSURANCE TRUST
Van Eck Worldwide Insurance Trust is an open-end management investment company
organized as a "business trust" under the laws of the Commonwealth of
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Massachusetts on January 7, 1987. Van Eck Associates Corporation serves as
investment adviser and manager to the Worldwide Hard Assets Fund and the
Worldwide Balanced Fund, does not currently serve, but it is expected to do so
when the fund's assets reach at which it is appropriate to utilize the sub-
investment adviser's services.
Van Eck Worldwide Hard Assets Fund -- seeks long term capital appreciation by
investing globally, primarily in"hard Assets Securities." Hard assets are
tangible, finite assets, such as real estate, energy, timber and industrial
and precious metals. Income is a secondary consideration.
CHANGES WITHIN THE VARIABLE ACCOUNT
We may from time to time make the following changes to the Variable Account:
1) Make additional Divisions available. These Divisions will invest in
portfolios we find suitable for the Contract.
2) Eliminate Divisions from the Variable Account, combine two or more
Divisions, or substitute a new Portfolio for the Portfolio in which a
Division invests. A substitution may become necessary if, in our
judgment, a Portfolio no longer suits the purposes of the Contract. This
may also happen due to a change in laws or regulations, or a change in a
Portfolio's investment objectives or restrictions, or because the
Portfolio is no longer available for investment, or for some other
reason, such as a declining asset base.
3) Transfer assets of the Variable Account, which we determine to be
associated with the class of contracts to which your Contract belongs, to
another variable account.
4) Withdraw the Variable Account from registration under the 1940 Act.
5) Operate the Variable Account as a management investment company under
the 1940 Act.
6) Cause one or more Divisions to invest in a mutual fund other than or
in addition to the Portfolios.
7) Discontinue the sale of Contracts and certificates.
8) Terminate any employer or plan trustee agreement with us pursuant to
its terms.
9) Restrict or eliminate any voting rights as to the Variable Account.
10) Make any changes required by the 1940 Act or the rules or regulations
thereunder.
No such changes will be made until it becomes effective with the SEC or without
any necessary approval of the applicable state insurance departments. Owners
will be notified of any changes.
FACTS ABOUT THE CONTRACT
YOUR RIGHT TO CANCEL THE CONTRACT
You may cancel the Contract within your Free Look Period, which is ten days
after you receive your Contract. We deem this period to expire 15 days after the
Contract is mailed from our Customer Service Center. Some state laws may require
a longer Free Look Period. If you decide to cancel, you may mail or deliver the
Contract to us at our Customer Service Center. We will refund the Accumulation
Value plus any charges we deducted. If you have purchased a Contract in a state
that requires the return of Purchase Payments during the Free Look Period and
you choose to exercise your Free Look right, we will return the greater of
Purchase Payments or the Accumulation Value plus any charges we deducted.
PURCHASE PAYMENTS
INITIAL PURCHASE PAYMENT
You purchase the Contract with an initial Purchase Payment. The minimum initial
Purchase Payment is $5,000 ($1,000 for an IRA). We may reduce the minimum
initial Purchase Payment requirements for certain group or sponsored
arrangements or with approval
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by us. See Group or Sponsored Arrangements, page 24. We will take under
consideration and may refuse to accept an initial Purchase Payment in excess of
$1,500,000.
ADDITIONAL PURCHASE PAYMENTS
We can accept additional Purchase Payments until the Owner reaches the Age of 86
or the Annuity Date if earlier. The minimum additional Purchase Payment we will
accept is $500 ($250 for an IRA or $90 if you have set up your IRA on a monthly
program of Purchase Payments). We may reduce the minimum additional Purchase
Payment requirements for certain group or sponsored arrangements or with
approval by First ING Life Insurance Company of New York. We may refuse to
accept a Purchase Payment if it would cause the sum of all Net Purchase Payments
to exceed $1,500,000.
For Individual IRA Contracts, the Purchase Payment in any year on behalf of an
individual Contract may not exceed $2,000. Under the Code, contributions to an
Individual IRA Contract may not exceed $2,000 in any year. For married
individuals filing joint returns, each spouse may establish an IRA Contract and
contribute up to $2,000 per year ($4,000 total even if one spouse does not work)
provided that the combined contributions do not exceed the total combined
compensation of both spouses. Employer contributions to a SEP contract cannot
exceed the lesser of $30,000 or 15% of an employee's compensation. Under a
SARSEP established prior to January 1, 1997, salary reduction contributions are
permitted up to a maximum of $7,000, indexed for inflation. A SARSEP may not be
established after January 1, 1997. Under a SIMPLE plan, employees may elect to
make salary reduction contributions up to a maximum of $6,000 per year, indexed
for inflation, and, in addition, the employer must make either dollar-for-dollar
matching contributions up to 3% of each contributing employee's compensation or
2% of compensaion for every employee earning at least $5,000 per year. These
maximums are not applicable to any Purchase Payment which is the result of a
rollover or transfer from another qualified plan.
WHERE TO MAKE PAYMENTS
Send Purchase Payments to our Customer Service Center at the address shown on
the cover. We will send you a confirmation notice upon receipt. Make checks
payable to Exchequer Annuity/First ING Life.
CREDITING AND ALLOCATION OF PURCHASE PAYMENTS
We will credit the initial Purchase Payment within two business days of receipt
at our Customer Service Center of a completed application. We may retain the
initial Purchase Payment for up to five business days while attempting to
complete an incomplete application. If the application cannot be made complete
within five business days, the applicant will be informed of the reasons for the
delay and the initial Purchase Payment will be returned immediately unless the
applicant specifically consents to our retaining the initial Purchase Payment
until the application is made complete. The initial Purchase Payment will then
be credited within two business days of the proper completion of the
application.
We will credit additional Purchase Payments that are accepted by us as of the
Valuation Period of receipt at our Customer Service Center.
The initial Purchase Payment is allocated among the Divisions according to your
most recent allocation instructions, unless the Contract is issued in a state
that requires the return of Purchase Payments during the Free Look Period. See
Your Right to Cancel the Contract, page 1421. In those states, your initial
Purchase Payment allocated to the Guaranteed Interest Division will be allocated
to that Division upon receipt; your initial Purchase Payment allocated to the
Divisions of the Variable Account will be allocated to the Division investing in
the Fidelity VIP Money Market Portfolio during the Free Look Period and then
transferred to the Divisions of the Variable Account according to your most
recent instructions.
You may allocate your Purchase Payments among any or all Divisions available.
All percentage allocations must be in whole numbers. We allocate any additional
Purchase Payments among the Divisions in accordance with your most recent
allocation instructions, or as otherwise instructed by you. You may designate a
different allocation with respect to any Purchase Payment by sending us a
written notice with the Purchase Payment or by telephone, if the proper
telephone authorization form is on file with us.
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<PAGE>
DOLLAR COST AVERAGING
The main objective of Dollar Cost Averaging is to protect your investment from
short-term price fluctuations. Because the same dollar amount is transferred to
a Division each month, more units are purchased in a Division if the value per
unit that month is low, and fewer units are purchased if the value per unit that
month is high. This plan of investing keeps you from investing too much when the
price of shares is high and too little when the price of shares is low.
During the Accumulation Period only, if you have at least $10,000 of Division
Accumulation Value in either the Division investing in the Fidelity VIP Money
Market Portfolio or the Neuberger & Berman AMT Limited Maturity Bond Portfolio,
you may choose to transfer a specified dollar amount each month from one of
these Divisions to other Divisions of the Variable Account. Dollar cost
averaging transfers may not be made to the Guaranteed Interest Division. The
minimum amount that you may elect to transfer each month under this option is
$100. The maximum amount that you may transfer under this option is equal to the
Division Accumulation Value in the Division from which the transfer is taken
when the election is made, divided by 12. Percentage allocations of the transfer
amount must be designated as whole number percentages; no specific dollar
designation may be made to the Divisions of the Variable Account. You may
specify a date for Dollar Cost Averaging to terminate. You may also specify a
dollar amount so that when the Division Accumulation Value in the Division from
which dollar cost averaging transfers are made reaches this dollar amount,
Dollar Cost Averaging will terminate.
The transfer date will be the same calendar day each month as the Contract Date.
If this calendar day is not a Valuation Date, the next Valuation Date will be
used. If, on any transfer date, the value in the chosen Division is equal to or
less than the amount you have elected to transfer, the entire amount will be
transferred, and this option will end.
You may change the transfer amount or the Divisions to which transfers are to be
made once each Contract Year, subject to the above limitations. You may cancel
this election by notifying our Customer Service Center at least seven days
before the next transfer date. Any transfer under this option will not be
included for purposes of the excess transfer charge.
Dollar Cost Averaging will end as of the Valuation Date immediately preceding
the Annuity Date.
If you elect both Dollar Cost Averaging and Automatic Rebalancing, Dollar Cost
Averaging will take place first.
As of the first Valuation Date of the next calendar quarter after Dollar Cost
Averaging has terminated, Automatic Rebalancing will begin. Dollar Cost
Averaging is available without charge.
If you elect telephone privileges in an application or send written notice to
our Customer Service Center requesting this privilege, you may elect or make
changes to your Dollar Cost Averaging options by telephoning our Customer
Service Center. See Telephone Privileges, page 33.
AUTOMATIC REBALANCING
The Automatic Rebalancing feature provides a method for maintaining a balanced
approach to investing your Accumulation Value and simplifying the process of
asset allocation over time. There is no charge for this feature. Any transfers
as a result of the operation of this feature are not counted toward the limit of
12 transfers per Contract Year without an additional transfer charge. If you
wish to transfer among the Divisions during the operation of the Automatic
Rebalancing feature, you must change your Automatic Rebalancing allocation
instructions to achieve the transfer.
When you apply for the Contract, or at any subsequent time during the
Accumulation Period, you may elect Automatic Rebalancing by electing this
feature on the application or notifying us in writing or by telephone, if the
proper telephone authorization form is on file with us. Automatic Rebalancing
allows you to match your Division Accumulation Value allocations over time with
the allocation percentages you have selected. As of the first Valuation Date of
each calendar quarter, we will automatically rebalance the amounts in each of
the Divisions into which you allocate Purchase Payments to match your allocation
percentages. This will rebalance any Division Accumulation Values that may be
out of line with the allocation percentages you initially indicated, which may
result, for example, from Divisions which do not perform as well as the other
Divisions in certain quarterly periods.
If you elect this feature, as of the first Valuation Date of the next calendar
quarter we will transfer amounts among the Divisions so that the ratio of your
Division Accumulation Value in each Division to your total Accumulation Value
matches your selected allocation percentage for that Division.
If you elect Automatic Rebalancing with your application, the first transfer
will occur as of the first Valuation Date of the next calendar quarter following
the end of the Free Look Period. If you elect this feature after the Contract
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Date, the first transfer will be processed as of the first Valuation Date of the
next calendar quarter after we receive the notification at our Customer Service
Center and the Free Look Period has ended.
You may change the allocation percentages for Automatic Rebalancing at any time
and your Accumulation Value will be reallocated as of the Valuation Date that we
receive your allocation instructions at our Customer Service Center. Any
reduction in your allocation to the Guaranteed Interest Division, however, will
be considered a transfer from that Division and, therefore, must comply with the
maximum transfer amount and time limitations on transfers from the Guaranteed
Interest Division, as described in Your Right to Transfer Among Divisions, page
27. We will not process a request which is in conflict with these requirements.
Automatic Rebalancing may be terminated at any time, so long as we receive
notice of the termination at least seven days prior to the first Valuation Date
of the next calendar quarter.
If you elect both Automatic Rebalancing and Dollar Cost Averaging, Dollar Cost
Averaging will take place first. As of the first Valuation Date of the next
calendar quarter after Dollar Cost Averaging has terminated, Automatic
Rebalancing will begin.
If you elect telephone privileges in an application or send written notice to
our Customer Service Center requesting this privilege, you may elect or make
changes to your Automatic Rebalancing options by telephoning our Customer
Service Center. See Telephone Privileges, page 33.
REPORTS TO OWNERS
During the Accumulation Period, we will send you a report within 31 days after
the end of each calendar quarter. This report will show the current Division
Accumulation Value in each Division, the total Accumulation Value, the Cash
Surrender Value and the Death Benefit, as of the end of the calendar quarter, as
well as activity under the Contract since the last report. During the Annuity
Period, we will send you a report within 31 days after the end of each calendar
year showing any information required by law. The reports will include any
information that may be required by the SEC or the insurance supervisory
official of the jurisdiction in which the Contract is delivered.
We will also send you copies of any shareholder reports of the Portfolios in
which the Divisions invest, as well as any other reports, notices or documents
required by law to be furnished to Owners.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce or eliminate the
surrender charge, the length of time a surrender charge applies, the
administrative charge, the minimum initial Purchase Payment and the minimum
additional Purchase Payment requirements, as well as other fees or charges. See
CONTRACT CHARGES AND FEES, page 34. We may also increase the amount of partial
withdrawals which may be withdrawn without surrender charge. For example, group
arrangements include those in which a trustee, an employer or an association
purchase Contracts covering a group of individuals on a group basis or special
exchange programs First ING Life may offer, including programs to officers,
directors and employees (and their families) of First ING Life or its
affiliates. Sponsored arrangements include those in which an employer or
association allows us to offer Contracts to its employees or members on an
individual basis.
Our costs for sales, administration, and mortality generally vary with the size
and stability of the group, among other factors. We take all these factors into
account when reducing charges. To qualify for reduced charges, a group or
sponsored arrangement must meet certain requirements. We will make any
reductions according to our rules in effect when an application form for a
Contract is approved. We may change these rules from time to time. Any variation
in the surrender charge, administrative charge or other charges, fees and
privileges will reflect differences in costs or services and will not be
unfairly discriminatory.
OFFERING THE CONTRACT
ING America Equities is principal underwriter and distributor of the Contract as
well as of other contracts issued through the Variable Account and other
variable accounts of First ING Life and its affiliates. ING America Equities is
a wholly owned subsidiary of First ING Life. It is registered with the SEC as a
broker-dealer and is a member of the NASD. First ING Life pays ING America
Equities for acting as principal underwriter under a distribution agreement. The
offering of the Contract will be continuous.
ING America Equities will enter into sales agreements with broker-dealers to
solicit for the sale of the Contract through registered representatives who are
licensed to sell securities and variable insurance products including
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variable annuities. The broker-dealer involved will generally receive
commissions based on a percent of Purchase Payments made (up to a maximum of
6.0%), a percentage of Accumulation Value (up to a maximum of .20%), or a
combination of these two. Compensation arrangements may vary among broker-
dealers. In addition, we may also pay override payments, expense allowances,
bonuses, wholesaler fees, and training allowances. Certain registered
representatives who meet specified production levels may qualify, under our
sales incentive programs, to receive non-cash compensation such as expense-paid
trips, educational seminars and merchandise. The writing registered
representative will receive a percentage of these commissions from the
respective broker-dealer, depending on the practice of that broker-dealer. These
commissions will be paid to the broker-dealer by ING America Equities and will
not be charged to the Owner.
VALUES UNDER THE CONTRACT
GUARANTEED DEATH BENEFIT
The Death Benefit payable under the Contract provides for a Guaranteed Death
Benefit amount which is greater than the traditional basic death benefit payable
under annuity contracts. The Guaranteed Death Benefit is the greatest of the
following amounts as of the Valuation Date Guaranteed Death Benefit Proceeds are
determined:
1) The Accumulation Value; or
2) The Step-Up Benefit, plus Net Purchase Payments since the last step-up
anniversary. The Step-Up Benefit at issue is the initial Purchase Payment.
As of each step-up anniversary, the current Accumulation Value is compared
to the prior determination of the Step-Up Benefit increased by Net Purchase
Payments since the last step-up anniversary. The greater of these becomes
the new Step-Up Benefit.
The step-up anniversaries are every 6th Contract Anniversary for the
duration of the Contract. (i.e., the 6th, 12th, 18th, etc.)
The Death Benefit payable to the Beneficiary is the Guaranteed Death Benefit as
calculated above minus taxes incurred but not deducted.
DEATH BENEFIT PROCEEDS
Proceeds payable to the Beneficiary upon the death of the Owner before the
Annuity Date will be the Death Benefit and will be paid according to the
provisions in Distribution-at-Death Rules, page 42. If the Owner is not an
individual, Proceeds are payable upon the death of the Annuitant.
The Death Benefit will be determined as of the Valuation Date we receive both
due proof of death and all information needed to process the claim, including
designation of a Beneficiary and the election of a one sum payout or election
under an Annuity Option.
We will pay the Proceeds in one lump sum unless the Beneficiary elects an
Annuity Option within 60 days of our receipt of due proof of death but prior to
the date on which we pay the Proceeds. See CHOOSING AN ANNUITY OPTION, page 36.
If a one sum payout is elected, the Proceeds will be paid within 7 days of
determination of the amount of the Death Benefit described above. Interest will
be paid on the Proceeds from the date of determination of the Death Benefit to
the date of payout. Interest is at the rate we declare, or any higher rate
required by law, but not less than 3% per year. If the Proceeds are paid under
an Annuity Option, the Beneficiary becomes the Annuitant, and the Contingent
Beneficiary becomes the Contingent Annuitant. Contact our Customer Service
Center or your agent for more information.
HOW TO CLAIM PAYOUTS TO BENEFICIARY
Before we will make any payouts to the Beneficiary, we must receive due proof of
the death of the Owner in the form of a certified death certificate and all
information necessary to process the claim including designation of a
Beneficiary and the election of a one sum payout or election under an Annuity
Option. The Beneficiary should contact our Customer Service Center for
instructions. For information on tax matters relating to death benefit Proceeds,
see FEDERAL TAX CONSIDERATIONS, page 40.
YOUR ACCUMULATION VALUE
The Accumulation Value of your Contract is the sum of the Division Accumulation
Values of all the Divisions of the Variable Account in which your Contract is
invested, plus any Division Accumulation Value of the Guaranteed Interest
Division. Your Division Accumulation Value in a Division of the Variable Account
as of any day is determined by multiplying the number of your Accumulation Units
in that Division by the Accumulation
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Unit Value as of that day for that Division. We adjust your Accumulation Value
as of each Valuation Date to reflect Purchase Payments and transfers made,
partial withdrawals taken, deduction of certain charges, earned interest of the
Guaranteed Interest Division, and the investment experience of the Divisions of
the Variable Account. The Accumulation Value, less applicable taxes, is applied
under the elected Annuity Option as of the Annuity Date. See CHOOSING AN ANNUITY
OPTION, page 36.
You may allocate your Accumulation Value among all the Divisions available,
subject to the restrictions on the percentages and amounts allocated from a
Purchase Payment or a transfer to or from any Division.
MEASUREMENT OF INVESTMENT EXPERIENCE FOR THE DIVISIONS OF THE VARIABLE ACCOUNT
ACCUMULATION UNIT VALUE
The investment experience of a Division of the Variable Account is determined as
of each Valuation Date. We use an Accumulation Unit Value to measure the
experience of each of the Variable Account Divisions during a Valuation Period.
The Accumulation Unit Value for a Valuation Period equals the Accumulation Unit
Value for the preceding Valuation Period multiplied by the Accumulation
Experience Factor for the Valuation Period.
We determine the number of Accumulation Units related to a given transaction in
a Division of the Variable Account as of a Valuation Date by dividing the dollar
value of that transaction in that Division by that Division's Accumulation Unit
Value for that date.
For a description of the method of calculating the Accumulation Unit Value, see
the Statement of Additional Information.
HOW WE DETERMINE THE ACCUMULATION EXPERIENCE FACTOR
For each Division of the Variable Account, the Accumulation Experience Factor
reflects the investment experience of the Portfolio in which that Division
invests and the charges assessed against that Division for a Valuation Period.
The Accumulation Experience Factor is calculated as follows:
1) The net asset value of the Portfolio in which that Division invests as of
the end of the current Valuation Period; plus
2) The amount of any dividend or capital gains distribution declared and
reinvested in that Portfolio during the current Valuation Period; minus
3) A charge for taxes, if any.
4) The result of 1), 2), and 3) divided by the net asset value of that
Portfolio as of the end of the preceding Valuation Period; minus
5) The daily mortality and expense risk charge for that Division for each day
in the Valuation Period; minus
6) The daily asset-based administrative charge for that Division for each day
in the Valuation Period.
NET RATE OF RETURN FOR A DIVISION OF THE VARIABLE ACCOUNT
The Net Rate of Return for a Division of the Variable Account during a Valuation
Period is the Accumulation Experience Factor for that Valuation Period minus
one.
DIVISION ACCUMULATION VALUE OF EACH DIVISION OF THE VARIABLE ACCOUNT
The Division Accumulation Value of each Division of the Variable Account as of
the Contract Date is equal to the amount of the initial Purchase Payment
allocated to that Division.
On subsequent Valuation Dates, the amount of Division Accumulation Value of each
Division of the Variable Account is calculated as follows:
1) The number of Accumulation Units in that Division of the Variable Account
as of the end of the preceding Valuation Period multiplied by that
Division's Accumulation Unit Value for the current Valuation Period; plus
2) Any additional Purchase Payments allocated to that Division during the
current Valuation Period; plus
3) Any Division Accumulation Value transferred to such Division during the
current Valuation Period; minus
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4) Any Division Accumulation Value transferred from such Division during the
current Valuation Period; minus
5) Any excess transfer charge allocated to such Division during the current
Valuation Period; minus
6) Any Gross Partial Withdrawals allocated to that Division during the current
Valuation Period; minus
7) The portion of the annual administrative charge applicable to that Division
if a Contract Anniversary occurs during the Valuation Period.
DIVISION ACCUMULATION VALUE OF THE GUARANTEED INTEREST DIVISION
The Division Accumulation Value of the Guaranteed Interest Division as of the
Contract Date is equal to the amount of the initial Purchase Payment allocated
to that Division.
On subsequent Valuation Dates, the Division Accumulation Value of the Guaranteed
Interest Division is calculated as follows:
1) The Division Accumulation Value of the Guaranteed Interest Division as of
the end of the preceding Valuation Period plus earned interest during the
Valuation Period; plus
2) Any additional Purchase Payments allocated to the Guaranteed Interest
Division during the current Valuation Period; plus
3) Any Division Accumulation Value transferred to the Guaranteed Interest
Division during the current Valuation Period; minus
4) Any Division Accumulation Value transferred from the Guaranteed Interest
Division during the current Valuation Period; minus
5) Any excess transfer charge allocated to the Guaranteed Interest Division
during the current Valuation Period; minus;
6) Any Gross Partial Withdrawals allocated to the Guaranteed Interest Division
during the current Valuation Period; minus
7) The portion of the annual administrative charge applicable to the
Guaranteed Interest Division if a Contract Anniversary occurs during the
current Valuation Period.
YOUR RIGHT TO TRANSFER AMONG DIVISIONS
Prior to the Annuity Date, while the Contract is in effect and after the Free
Look Period, you may transfer your Accumulation Value among the Divisions of the
Variable Account and the Guaranteed Interest Division. The minimum amount that
may be transferred from each Division is the lesser of $100 or the balance of a
Division. Percentages must be in whole numbers. Transfers due to the operation
of Dollar Cost Averaging or Automatic Rebalancing are not included in
determining the limit on transfers without a charge. Each request to transfer
for your Contract is considered one transfer regardless of how many Divisions
are affected by the transfer. The table below summarizes the number of transfers
available and any associated charges during any Contract Year:
<TABLE>
<CAPTION>
Accumulation Annuity
Period Period
------ ------
<S> <C> <C>
Free Transfer 12 4
Total Number of
Transfers Permitted Unlimited 4
Excess Transfer Charge $25 for each Not
Transfer in Applicable
excess of 12
</TABLE>
Except for Contracts issued in certain states, we reserve the right to limit the
number of transfers per Contract Year to 12 and to limit excessive trading
activity, which can disrupt Portfolio management strategy and increase Portfolio
expenses. For example, we may refuse to accept or to place certain restrictions
on transfers made by third-party agents acting on behalf of multiple Owners or
made pursuant to market timing services when we determine, at our sole
discretion, that such transfers will be detrimental to the Portfolios and the
Owners as a whole. Such transfers may cause increased trading and transaction
costs, disruption of planned investment strategies, forced and unplanned
portfolio turnover, and lost opportunity costs, and may subject the Portfolios
to large asset swings that diminish the Portfolios' ability to provide maximum
investment return to all Owners.
Once during the first 30 days of each Contract Year, you may transfer amounts
from the Guaranteed Interest Division. Transfer requests received within 30 days
prior to the Contract Anniversary will be deemed to occur as of the Contract
Anniversary. Transfer requests received on the Contract Anniversary or within
the following 30 days will be processed; transfer requests received at any other
time will not be processed. Transfers of your
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26
FING Exchequer
<PAGE>
Accumulation Value to the Guaranteed Interest Division are not limited to this
30-day period.
The maximum transfer amount from the Guaranteed Interest Division to the
Divisions of the Variable Account in any Contract Year is the greatest of:
1) 25% of the balance in the Guaranteed Interest Division immediately prior to
the transfer;
2) $100; or
3) the sum of the amounts that were transferred or withdrawn from the
Guaranteed Interest Division in the prior Contract Year. For purposes of
calculating the maximum transfer amount from the Guaranteed Interest
Division, all partial withdrawals (including Systematic Income Program
partial withdrawals) and transfers from the Guaranteed Interest Division in
a Contract Year are summed.
When a transfer involving the Divisions of the Variable Account is made, we
redeem Accumulation Units in the Divisions you are transferring from, and
purchase Accumulation Units in the Divisions you are transferring to, at their
values next computed after receipt of your request at our Customer Service
Center.
If you elect telephone privileges in an application or send written notice to
our Customer Service Center requesting this privilege, you may make transfers by
telephoning our Customer Service Center. See Telephone Privileges, page 33.
PARTIAL WITHDRAWALS
Prior to the Annuity Date, while the Contract is in effect and after the Free
Look Period, you may withdraw in cash all or a part of the Cash Surrender Value
of your Contract. Partial withdrawals may be subject to a 10% tax penalty. See
Tax Consequences of Partial Withdrawals, page 30.
Partial withdrawals from the Divisions of the Variable Account will be made by
redeeming Accumulation Units in the affected Divisions at their values as next
computed after we receive your request at our Customer Service Center. A partial
withdrawal will result in a decrease in the Accumulation Value of this Contract.
The decrease is equal to the amount of the Gross Partial Withdrawal. A surrender
charge could be incurred for withdrawals in excess of certain amounts. See
Charges Deducted from the Accumulation Value, page 34, and The Amount You May
Withdraw Without a Surrender Charge, page 30.
Certain plans or programs sold on a group or sponsored basis to employee or
professional groups may have different withdrawal privileges. See Group or
Sponsored Arrangements, page 24.
Withholding of Federal income taxes on all distributions may be required unless
you elect not to have any such amounts withheld and properly notify First ING
Life of that election. Even if you elect no withholding, special "back-up
withholding" rules may require First ING Life to disregard your election if you
fail to supply First ING Life with a taxpayer identification number ("TIN") or
social security number for individuals, or if the Internal Revenue Service
notifies First ING Life that the TIN provided by you is incorrect. In addition,
withholding is required for all payees with addresses outside the United States.
Some states also impose withholding requirements.
If you elect telephone privileges in an application or send written notice to
our Customer Service Center requesting this privilege, you may make demand
withdrawals by telephoning our Customer Service Center. Any telephone request
for a demand withdrawal must be for an amount less than $25,000. See Telephone
Privileges, page 33.
There are three options available for selecting partial withdrawals: the Demand
Withdrawal Option, the Systematic Income Program and the IRA Income Program. All
three options are described below.
Partial withdrawals may be subject to a 10% tax penalty. See Tax Consequences
of Partial Withdrawals, page 30.
DEMAND WITHDRAWAL OPTION
The minimum amount you may withdraw under this option is $100, and the maximum
demand withdrawal amount is the Cash Surrender Value minus $500. If the amount
of the demand withdrawal you specify exceeds the maximum level, the amount of
the demand withdrawal will automatically be adjusted to leave $500 remaining as
Cash Surrender Value. See Surrendering to Receive the Cash Surrender Value,
page 30.
Unless you specify otherwise, the amount of the partial withdrawal will be taken
from each Division in the same proportion that the amount of Division
Accumulation Value in that Division bears to the Accumulation Value in all of
the Divisions immediately before the withdrawal.
A surrender charge could be incurred for demand withdrawals in excess of certain
amounts. See Charges Deducted from the Accumulation
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27
<PAGE>
Value, page 34, The Amount You May Withdraw Without a Surrender Charge, page 30,
and APPENDIX A, page 46.
You may not withdraw from the Guaranteed Interest Division an amount that is
greater than the total demand withdrawal multiplied by the ratio of the Division
Accumulation Value in the Guaranteed Interest Division to the total Accumulation
Value immediately before the withdrawal.
SYSTEMATIC INCOME PROGRAM
You may choose to receive Systematic Income Program partial withdrawals on a
monthly or quarterly basis from the Accumulation Value. Withdrawals will be
taken from each Division of the Variable Account and the Guaranteed Interest
Division in the same proportion that the Division Accumulation Value of that
Division bears to the total Accumulation Value. The payouts under this option
may not start sooner than one month after the Contract Date.
You may select the day of the month when the withdrawals will be made. If no day
is selected, the withdrawals will be made on the same calendar day of the month
as the Contract Date. If this calendar day is not a Valuation Date, the next
Valuation Date will be used. You may select a dollar amount or a percentage
amount for your withdrawal subject to the following maximums:
<TABLE>
<CAPTION>
Frequency Maximum Income Payment Percentage
- --------- ---------------------------------
<S> <C>
Monthly 1.25% of Accumulation Value
Quarterly 3.75% of Accumulation Value
</TABLE>
Except as described in the following sections, in no event will a payout be less
than $100.
If a dollar amount is selected and the amount to be systematically withdrawn
would exceed the applicable maximum percentage as of the withdrawal date, the
amount withdrawn will be reduced to equal such percentage. If the amount to be
withdrawn is then less than $100, the withdrawal will be made and the Systematic
Income Program will be canceled. See APPENDIX A, page 46.
If a percentage is selected and the amount to be systematically withdrawn based
on that percentage would be less than $100, the amount withdrawn will be
increased to the lesser of $100 or the maximum percentage. If this amount to be
withdrawn is then less than $100, the withdrawal will be made and the Systematic
Income Program will be canceled.
During any Contract Year, if a demand withdrawal is made while the Systematic
Income Program is in effect, the remaining payouts to be made under the
Systematic Income Program for that Contract Year will be considered demand
withdrawals for purposes of calculating any future partial withdrawal
transaction charges and any applicable surrender charges. If a demand withdrawal
is not made in the same Contract Year, Systematic Income Program partial
withdrawals will not be assessed a surrender charge. IRA Income Program
withdrawals will not be assessed a surrender charge. However, the amount
available for Systematic Income Program partial withdrawals and IRA Income
Program partial withdrawals is never greater than the Cash Surrender Value.
You may change the amount or percentage of your Systematic Income Program
partial withdrawal once each Contract Year. You may cancel your election at any
time by sending notice to our Customer Service Center at least seven days prior
to the next scheduled withdrawal date.
In no event will you be allowed to withdraw more than the Cash Surrender Value.
IRA INCOME PROGRAM -- IRA CONTRACTS ONLY
If you have an IRA Contract, we will provide payout of amounts required to be
distributed by the Internal Revenue Service unless the minimum distributions are
otherwise satisfied. See Taxation of Individual Retirement Annuities, page 42.
Amounts taken pursuant to the IRA Income Program are not subject to a surrender
charge.
You may provide us with the minimum required distribution, or we will determine
the amount that is required to be distributed from your Contract each year based
on the information you give us and various choices you make. For information
regarding the calculation and choices you must make, see the Statement of
Additional Information. The minimum dollar amount of each distribution is $100.
At any time while minimum distributions are being made, if your Cash Surrender
Value falls below $2,000, we will cancel the Contract and send you the amount of
your Cash Surrender Value. See Taxation of Individual Retirement Annuities,
page 42.
In no event will you be allowed to withdraw more than the Cash Surrender Value.
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28
<PAGE>
THE AMOUNT YOU MAY WITHDRAW WITHOUT A SURRENDER CHARGE
Each Contract Year after the first you may withdraw without a surrender charge
the greater of Earnings (as of the date of receipt of the written request) or
15% of the Accumulation Value as of the last Contract Anniversary (less any
Gross Partial Withdrawals already made during the Contract Year which are not
considered to be withdrawals of Purchase Payments) as well as Purchase Payments
held beyond the surrender charge period. Any unused portion of a partial
withdrawal amount not subject to a surrender charge is non-cumulative and does
not apply to a partial withdrawal made in subsequent Contract Years.
Demand withdrawals and any Systematic Income Program partial withdrawals which
occur in the same Contract Year as a demand withdrawal are deemed to be made in
the following order:
1) Any Earnings in the Contract;
2) Purchase Payments held for at least five full Contract Years since the
Contract Anniversary at the end of the Contract Year in which the Purchase
Payment was made;
3) The amount by which 15% of the Accumulation Value as of the last Contract
Anniversary (less any Gross Partial Withdrawals already made during the
Contract Year which are not considered to be withdrawals of Purchase
Payments) exceeds the Earnings in the Contract, if any;
4) Any Purchase Payments remaining on a first-in, first-out basis.
A surrender charge applies only to the withdrawal of Purchase Payments held less
than five full Contract Years since the Contract Anniversary at the end of the
Contract Year in which the Purchase Payment was made. If a Purchase Payment is
made as of the first day of a Contract Year, a surrender charge will apply
against this Purchase Payment for six full years. See Surrender Charge, page 34.
Certain plans or programs sold on a group or sponsored basis to employee or
professional groups may have different withdrawal privileges. See Group or
Sponsored Arrangements, page 24.
For an example illustrating how we would determine the surrender charge (and the
amounts that may be withdrawn without a surrender charge) for a hypothetical
series of demand withdrawals, see APPENDIX A, page 46.
TAX CONSEQUENCES OF PARTIAL WITHDRAWALS
CONSULT YOUR TAX ADVISER REGARDING THE TAX CONSEQUENCES ASSOCIATED WITH TAKING
PARTIAL WITHDRAWALS. A partial withdrawal made before the taxpayer reaches Age
59 1/2 may result in imposition of a tax penalty on the taxable portion
withdrawn. Please refer to FEDERAL TAX CONSIDERATIONS, page 40, for more
details.
SURRENDERING TO RECEIVE THE CASH SURRENDER VALUE
You may surrender the Contract for its Cash Surrender Value at any time prior to
the Annuity Date.
Your Contract's Cash Surrender Value fluctuates daily with the investment
experience of the Divisions of the Variable Account in which you are invested.
We do not guarantee any minimum Cash Surrender Value for amounts invested in the
Divisions of the Variable Account. The amount allocated to the Guaranteed
Interest Division and a minimum interest rate are guaranteed for amounts
allocated to the Guaranteed Interest Division; the amount allocated to the
Guaranteed Interest Division will vary depending on any partial withdrawals,
transfers, surrenders, and charges deducted. As of any Valuation Date while the
Contract is in effect, the Cash Surrender Value is calculated as follows:
<TABLE>
<S> <C>
1) We take the Contract's Accumulation Value as of that date less any
taxes incurred but not deducted (see Taxes on Purchase Payments, page
35);
2) We deduct any surrender charge (see Surrender Charge, page 34);
3) We deduct the $30 annual administrative charge, if any, due at the end
of the Contract Year (see Administrative Charge, page 34).
</TABLE>
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29
<PAGE>
For an example illustrating how we determine Cash Surrender Value in certain
hypothetical situations, see APPENDIX A, page 46.
When a Contract is surrendered, we redeem Accumulation Units in the Divisions of
the Variable Account at their value next computed after we receive at our
Customer Service Center your written request along with the Contract. All
benefits under the Contract are then terminated. We will normally pay the Cash
Surrender Value within seven days but we may delay payout as described in When
We Make Payouts on this page 31.
Withholding of Federal income taxes on all distributions may be required unless
you elect not to have any such amounts withheld and properly notify First ING
Life of that election. Even if you elect no withholding, special "back-up
withholding" rules may require First ING Life to disregard your election if you
fail to supply First ING Life with a taxpayer identification number ("TIN") or
social security number for individuals, or if the Internal Revenue Service
notifies First ING Life that the TIN provided by you is incorrect. In addition,
withholding is required for all payees with addresses outside the United States.
Some states also impose withholding requirements.
If you do not wish to receive your Cash Surrender Value in a one sum payout and
you are also the Annuitant, you may avoid a surrender charge by applying the
Accumulation Value, less any taxes incurred but not deducted, to Payout Period
Options II or III by accelerating the Annuity Date under the Contract. See
CHOOSING AN ANNUITY OPTION, page 36.
WHEN WE MAKE PAYOUTS
Partial withdrawals or payout of Proceeds from the Divisions of the Variable
Account will usually be processed within seven days of receipt of the request in
proper form at our Customer Service Center. However, we may postpone the
processing of any such transactions for any of the following reasons:
1) When the New York Stock Exchange ("NYSE") is closed for trading;
2) When trading on the NYSE is restricted by the SEC;
3) When an emergency exists such that it is not reasonably practical to
dispose of securities in the applicable Division of the Variable
Account or to determine the value of its assets; or
4) When a governmental body having jurisdiction over the Variable Account
permits such suspension by order.
Rules and regulations of the SEC are applicable and will govern as to whether
conditions described in 2), 3), or 4) exist.
We may defer for up to six months the payout of any partial withdrawal or
Proceeds from the Guaranteed Interest Division.
THE GUARANTEED INTEREST DIVISION
You may allocate all or a portion of your Purchase Payments and transfer your
Accumulation Value subject to certain restrictions to or from the Guaranteed
Interest Division, which is part of our General Account and which pays interest
at a declared rate. See Your Right to Transfer Among Divisions, page 27. The
General Account supports our non-variable insurance and annuity obligations.
Because of exemptive and exclusionary provisions, interests in the Guaranteed
Interest Division have not been registered under the Securities Act of 1933, and
neither the Guaranteed Interest Division nor the General Account has been
registered as an investment company under the Investment Company Act of 1940.
Accordingly, neither the General Account, the Guaranteed Interest Division nor
any interest therein are generally subject to regulation under these Acts. As a
result, the staff of the SEC has not reviewed the disclosures which are included
in this prospectus which relate to the General Account and the Guaranteed
Interest Division. These disclosures, however, may be subject to certain
provisions of the Federal securities laws relating to the accuracy and
completeness of statements made in this prospectus. For more details regarding
the General Account, see your Contract.
You may accumulate amounts in the Guaranteed Interest Division by (i) allocating
Purchase Payments, (ii)
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30
<PAGE>
transferring amounts from the Divisions of the Variable Account, and (iii)
earning interest on amounts you already have in the Guaranteed Interest
Division.
The amount you have in the Guaranteed Interest Division at any time is the sum
of all Purchase Payments allocated to this Division, all transfers, and earned
interest. This amount is reduced by amounts transferred out of or withdrawn from
the Guaranteed Interest Division and deductions allocated to the Guaranteed
Interest Division.
We pay a declared interest rate on all amounts that you have in the Guaranteed
Interest Division. These interest rates will never be less than the minimum
guaranteed interest rate of 3%. We may declare rates higher than the guaranteed
minimum that will apply to amounts in the Guaranteed Interest Division. Any
higher rate is guaranteed to be in effect for at least 12 months. Interest is
compounded daily at an effective annual rate that equals this declared rate. The
interest is credited as of each Valuation Date to the amount you have in the
Guaranteed Interest Division. This interest will be paid regardless of the
actual investment experience of the General Account; we bear the full amount of
the investment risk for the amount allocated to the Guaranteed Interest
Division.
OTHER INFORMATION
THE OWNER
You are the Owner. You are also the Annuitant unless another Annuitant is named
in the application. You have the rights and options described in the Contract.
You and your spouse may be joint Owners; no other joint ownership is allowed.
You (and your spouse, in the case of joint ownership) must be younger than Age
81 as of the Contract Date.
Subject to the applicable provisions of Distribution-at-Death Rules, page 42,
if the Owner (or a Deemed Owner as defined in Distribution-at-Death Rules, page
42) dies prior to the Annuity Date, and:
1) If the Owner's spouse is the Joint Owner, then the spouse becomes the
new Owner and no Death Benefit is payable; or
2) If the Owner's spouse is the Beneficiary, then the spouse may elect to
become the Owner (in which case there is no Death Benefit payable) by
so electing within 60 days of the death; if there is no such election,
the Death Benefit is payable to the Beneficiary; or
3) If the Owner's spouse is not the Joint Owner or the Beneficiary, then
the Death Benefit is payable to the Beneficiary.
See Guaranteed Death Benefit, page 25.
THE ANNUITANT
The Annuitant will receive the annuity benefits of the Contract as of the
Annuity Date if the Annuitant is living and the Contract is then in force. If
the Annuitant dies before the Annuity Date and a Contingent Annuitant is named,
the Contingent Annuitant becomes the Annuitant (unless the Owner is not an
individual, in which case the Proceeds become payable). If no Contingent
Annuitant has been named, the Owner must designate a new Annuitant. If no
designation is made within 30 days of the Annuitant's death, the Owner will
become the Annuitant.
Upon the death of the Annuitant after the Annuity Date, any remaining designated
period payouts will be continued to any Contingent Annuitant. Upon the death of
both the Annuitant and all Contingent Annuitants, any remaining designated
period payouts will be paid to the estate of the last to die of the Annuitant
and Contingent Annuitants. Amounts may be released in one sum if the Owner's
election allows. See CHOOSING AN ANNUITY OPTION, page 36.
THE BENEFICIARY
The Beneficiary is the person to whom we pay Proceeds upon the death of the
Owner (or of the Annuitant, if the Owner is not an individual) prior to the
Annuity Date.
The original Beneficiary and any Contingent Beneficiaries are named in the
application. Surviving Contingent Beneficiaries are paid death benefit Proceeds
only if no Beneficiary survives. If more than one Beneficiary in a class
survives, they will share the Proceeds equally, unless the Owner's designation
provides otherwise. If there is no designated Beneficiary or Contingent
Beneficiary surviving, we will pay the Proceeds to the Owner's estate. The
Beneficiary designation will be on file with us. We will pay Proceeds according
to the most recent Beneficiary designation on file.
CHANGE OF OWNER, BENEFICIARY OR ANNUITANT
Prior to the Annuity Date and while the Contract is in effect after the Free
Look Period, you may transfer Ownership of the Contract (unless the Contract is
an IRA
- --------------------------------------------------------------------------------
31
<PAGE>
Contract) subject to our published rules at the time of the change. A new Owner
must be younger than Age 86.
You may name a new Annuitant prior to the Annuity Date. Any Annuitant or
Contingent Annuitant must be younger than Age 86 when named. An Annuitant or
Contingent Annuitant that is not an individual may not be named without our
consent. If the Owner is not an individual, the Annuitant may not be changed
without our consent.
The Owner may name a new Beneficiary unless an irrevocable Beneficiary has been
named. When an irrevocable Beneficiary has been designated, the Owner and the
irrevocable Beneficiary must act together to make any Beneficiary changes. If
the Contract is an IRA Contract and a Beneficiary change is being made, the
Owner's spouse must sign a statement agreeing to this designation.
To make any of these changes, you must send us written notice of the change to
our Customer Service Center. The change will take effect as of the day the
notice is signed and dated provided that the request was received at our
Customer Service Center prior to any payout. The change will not affect any
payout made or action taken by us before recording the change at our Customer
Service Center. There may be tax consequences, see FEDERAL TAX CONSIDERATIONS,
page 40.
OTHER CONTRACT PROVISIONS
IN CASE OF ERRORS ON THE APPLICATION OR ENROLLMENT FORM
If the Age or sex given in the application is misstated, the amounts payable or
benefits provided by the Contract shall be those that the Purchase Payment would
have bought at the correct Age or sex, with interest at 6% per year on any
overpayments or underpayments previously made.
PROCEDURES
We must receive any election, designation, change, assignment, or any other
change request you make in writing, except those you have chosen to request by
telephone. We may require a return of your Contract for any Contract change or
for paying Proceeds. We may require proof of Age, death, or survival of an
Annuitant or Beneficiary when such proof is relevant to the payout of a benefit,
claim, or settlement under the Contract. If your Contract has been lost, we will
require that you complete and return a Contract Replacement Form. The effective
date of any change in provisions of the Contract will be the date the request
was signed. Any change will not affect payouts made or action taken by us before
the change is recorded at our Customer Service Center.
In the event of the Owner's death prior to the Annuity Date, we should be
informed as soon as possible. Claim procedure instructions will be sent to your
Beneficiary immediately. We require a certified copy of the death certificate
and may require proof of the Owner's Age. We may require the Beneficiary and the
Owner's next of kin to sign all authorizations as part of due proof.
TELEPHONE PRIVILEGES
If you have elected this privilege in a form required by us, you may make
transfers, changes in your Dollar Cost Averaging and Automatic Rebalancing
options, or request partial withdrawals by telephoning our Customer Service
Center.
Our Customer Service Center will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. Such procedures may include,
among others, requiring some form of personal identification prior to acting
upon instructions received by telephone, providing written confirmation of such
transactions, and/or tape recording telephone instructions. Your request for
telephone privileges authorizes us to record telephone calls. If reasonable
procedures are not used in confirming instructions, we may be liable for any
losses due to unauthorized or fraudulent instructions. We reserve the right to
discontinue this privilege at any time.
ASSIGNING THE CONTRACT AS COLLATERAL
You may assign this Contract as collateral security upon written notice to us.
Once it is recorded with us, the rights of the Owner and Beneficiary are subject
to the assignment. It is your responsibility to make sure the assignment is
valid. There may be tax consequences for an assignment. IRA Contracts may not
be assigned. See Assignments, page 43.
NON-PARTICIPATING
The Contract does not participate in First ING Life's surplus earnings.
AUTHORITY TO CHANGE CONTRACT TERMS
All agreements made by us must be signed by our president or an officer and by
our secretary or assistant secretary. No other person, including an insurance
agent
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32
FING Exchequer
<PAGE>
or broker, can change any of the Contract's terms or make any agreements binding
on us.
CONTRACT CHANGES - APPLICABLE TAX LAW
This Contract is intended to qualify as an annuity contract under the Code. To
that end, all terms and provisions of the Contract shall be interpreted to
ensure or maintain such qualification, notwithstanding any other provisions to
the contrary. Payouts and distributions under this Contract shall be made in the
time and manner necessary to maintain such qualification under the applicable
provisions of the Code in existence at the time this Contract is issued.
We reserve the right to amend this Contract, to reflect any clarifications or
changes that may be needed or are appropriate, or to conform it to any
applicable changes in the tax requirements to qualify the Contract as an
annuity. Any such changes will apply uniformly to all Contracts that are
affected. We will send you written notice of such changes.
CONTRACT CHARGES AND FEES
DEDUCTION OF CHARGES
We invest the entire amount of the initial and any additional Purchase Payments
in the Divisions of the Variable Account and the Guaranteed Interest Division.
We then periodically deduct certain amounts from your Accumulation Value
invested in the Divisions of the Variable Account and the Guaranteed Interest
Division. We may reduce certain charges under group or sponsored arrangements.
See Group or Sponsored Arrangements, page 24. A description of the charges we
deduct follows.
CHARGES DEDUCTED FROM THE ACCUMULATION VALUE
SURRENDER CHARGE
The withdrawal of Purchase Payments held less than five full Contract Years
since the Contract Anniversary at the end of the Contract Year in which the
Purchase Payment was made, either by surrender or partial withdrawal, is subject
to a surrender charge. The surrender charge will not apply to partial
withdrawals made pursuant to the Systematic Income and IRA Income Programs
unless a demand withdrawal occurs while the Systematic Income Program is in
effect. If a Purchase Payment is made as of the first day of a Contract Year, a
surrender charge will apply against this Purchase Payment for six full years.
The surrender charge that applies is calculated as follows.
<TABLE>
<CAPTION>
Contract
Anniversaries Since Surrender Charge as a
Purchase Payment Percentage of Purchase
was Made Payment Withdrawal
- -------- ------------------
<S> <C>
0 7%
1 6%
2 5%
3 4%
4 3%
5 2%
6+ 0%
</TABLE>
Up to certain limits, partial withdrawals may be taken without a surrender
charge. See The Amount You May Withdraw Without a Surrender Charge, page 30.
Any applicable surrender charges will reduce the Division Accumulation Value of
each Division in the same proportion that the Division Accumulation Value in
each Division bears to the total Accumulation Value immediately after the
withdrawal.
Proceeds from the surrender charge may not cover the expected costs of
distributing the Contracts. Any shortfall will be recovered from First ING
Life's general assets, which may include revenues from the mortality and expense
risk charge deducted from the Variable Account.
- --------------------------------------------------------------------------------
33
FING Exchequer
<PAGE>
ADMINISTRATIVE CHARGE
The administrative charge is deducted each year during the Accumulation Period
as of the Contract Processing Date. We deduct this charge when determining the
Cash Surrender Value payable if you surrender the Contract prior to the end of a
Contract Year. The amount deducted is $30 per Contract Year if Net Purchase
Payments are less than $100,000. If Net Purchase Payments equal $100,000 or
more, the charge is zero. This charge covers a portion of our administrative
expenses. See Asset-based Administrative Charge, page 35.
The administrative charge is allocated to a Division in the same proportion that
the amount of Division Accumulation Value in that Division bears to the total
Accumulation Value immediately after the withdrawal. For Contracts issued in
certain states, the administrative charge is allocated only among the Divisions
of the Variable Account.
EXCESS TRANSFER CHARGE
We allow you 12 free transfers among Divisions per Contract Year during the
Accumulation Period. For each additional transfer, we will charge you $25 at the
time the transfer is processed. The charge will be deducted from each of the
Divisions in which you are invested in the same proportion that the amount of
Division Accumulation Value in that Division bears to the total Accumulation
Value of all the Divisions immediately after the transfer. We do not expect that
the total revenues from the excess transfer charge will be greater than the
total expected cost of administering transfers, on average, over the period that
the Contracts are in force. Any transfer(s) due to the election of Dollar Cost
Averaging, Automatic Rebalancing and/or pursuant to Changes Within The Variable
Account, page 21, will not be included in determining if the excess transfer
charge should apply.
After the Annuity Date, only four transfers each Contract Year are allowed, and
no transfer charge will be deducted.
TAXES ON PURCHASE PAYMENTS
We make a charge for state and local taxes on Purchase Payments in certain
states, which can range from 0% to 3.5% of the Purchase Payment (5% for the
Virgin Islands). The charge depends on the Annuitant's state of residence.
Taxes on Purchase Payments, if any, are generally incurred as of the Annuity
Date, and we deduct the charge for taxes on Purchase Payments from your
Accumulation Value as of the Annuity Date. Some jurisdictions impose a tax on
Purchase Payments at the time the Purchase Payments are paid, regardless of the
Annuity Date. In those states, our current practice is to advance the payment of
your taxes on Purchase Payments and charge it against your Accumulation Value
either upon surrender of the Contract, payout of death benefit Proceeds, or upon
the Annuity Date. We reserve the right to deduct any state and local taxes on
Purchase Payments from your Accumulation Value at the time such tax is due.
CHARGES DEDUCTED FROM THE DIVISIONS
MORTALITY AND EXPENSE RISK CHARGE
We will deduct a daily charge from the assets in the Divisions of the Variable
Account to compensate First ING Life for mortality and expense risks we assume
under the Contract. The daily charge is at the rate of 0.003425% (equivalent to
an annual rate of 1.25%) on the assets in the Divisions of the Variable Account.
This charge is not deducted from the Guaranteed Interest Division. We will
realize a gain from this charge to the extent it is not needed to provide for
benefits and expenses under the Contract.
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35
FING Exchequer
<PAGE>
ASSET-BASED ADMINISTRATIVE CHARGE
We will deduct a daily charge from the assets in each Division of the Variable
Account to compensate First ING Life for a portion of the administrative
expenses under the Contract. The daily charge is at a rate of 0.000411%
(equivalent to an annual rate of 0.15%) on the assets in each Division of the
Variable Account. This charge is not deducted from the Guaranteed Interest
Division.
We do not expect that the total revenues from the administrative charges will be
greater than the total expected cost of administering the Contracts, on average,
excluding costs that are properly categorized as distribution expenses, over the
period that the Contracts are in force.
PORTFOLIO EXPENSES
There are fees and charges deducted from the Portfolios as described in the FEE
TABLE on page 8. Please read the prospectus for the Portfolios you are
considering for complete details.
CHOOSING AN ANNUITY OPTION
GENERAL PROVISIONS
SUPPLEMENTARY CONTRACT
When an Annuity Option becomes effective, your Contract will be amended to
include a Supplementary Contract which will put the Annuity Option elected into
effect. The Supplementary Contract Effective Date will be the date the Annuity
Option becomes effective. The computation of the first payout will be made as of
the Supplementary Contract Effective Date. The first payout will be paid within
10 days of this date.
ELECTION AND CHANGES OF ANNUITY DATE
The Annuity Date is the date as of which Annuity Payouts begin. It may be
elected on your application. Your Annuity Date election must follow the second
Contract Anniversary but may not be later than the Annuitant's 85th birthday.
In certain states, the latest Annuity Date may be limited to an earlier date.
If no Annuity Date is elected in the application, the Annuity Date will be the
first day of the month following the Annuitant's 85th birthday. However, the
Annuity Date limitations may vary according to state regulation. Please refer to
your Contract for a description of these limitations. For an IRA Contract,
distribution must commence no later than April 1st of the calendar year
following the calendar year in which you attain Age 70 1/2 unless the minimum
distributions are otherwise satisfied. Consult your tax adviser. You may change
the Annuity Date by sending a written request to our Customer Service Center at
least 60 days prior to the currently elected Annuity Date of the Contract.
ELECTION AND CHANGES OF ANNUITY OPTION
The Annuity Option is composed of both the Payout Option which specifies the
type of annuity to be paid and the Payout Period Option which determines how
long the annuity will be paid, the frequency, and the amount of the first
payout. The Owner elects the Annuity Option that applies upon annuitization. The
Owner may change that Annuity Option at any time prior to the Annuity Date. The
Beneficiary may select an Annuity Option for any payouts to be made pursuant to
Death Benefit Proceeds. Any Death Benefit Proceeds to be applied under a Payout
Option will be allocated to each of the Divisions of the Variable Account or the
Guaranteed Interest Division as instructed by the Beneficiary. The available
options are described in the Annuity Option provisions of the Contract.
The various methods of settlement are shown below.
PAYOUT OPTIONS
Proceeds applied as of the Annuity Date to provide an annuity under an Annuity
Option will be the Accumulation Value minus taxes incurred but not deducted. The
taxes will be taken from each of the Divisions in the same proportion that the
Division Accumulation Value in each Division bears to the Division Accumulation
Value in all Divisions immediately prior to the Annuity Date.
If no Annuity Option has been chosen upon annuitization, we will apply Proceeds
to Payout Period Option Table I, using a Benchmark Total Return of 3%, with a
designated period of 30 years. The Annuity Option will be allocated among the
Guaranteed Interest Division and the Divisions of the Variable Account in the
same proportion that the Accumulation Value was allocated prior to the
Annuity
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Date. For example, if all of the Accumulation Value is allocated to the
Guaranteed Interest Division, the Annuity Payout will be a Fixed Annuity Payout.
VARIABLE ANNUITY PAYOUT
A Variable Annuity Payout is an annuity with payouts which: 1) are not pre-
determined or guaranteed as to dollar amount; and 2) vary in amount with the
investment experience of the Divisions of the Variable Account in which you
invest.
As of the Annuity Date, any Division Accumulation Value invested in the
Guaranteed Interest Division will be allocated among the Divisions of the
Variable Account in the same proportion that the Division Accumulation Value of
each Division bears to the total Division Accumulation Value of all the
Divisions of the Variable Account.
The first Variable Annuity Payout for each Division of the Variable Account will
be the amount that the Proceeds will provide as of the close of business on the
Valuation Date immediately preceding the Supplementary Contract Effective Date
at the Benchmark Total Return elected. If you have elected to receive payouts
less frequently than monthly, the payout amount is then adjusted according to
the factors in Payouts Other Than Monthly, page 38.
After the first payout, Variable Annuity Payouts vary in amount with the
investment experience of the Divisions of the Variable Account. The dollar
amount of each Variable Annuity Payout after the first payout is calculated by
adding the amount due for each Division of the Variable Account.
The Owner may transfer, up to four times each Contract Year, all or a portion of
the Annuity Units in a Division of the Variable Account to another Division of
the Variable Account.
For a description of the method for determining the amount of Annuity Payouts,
the Annuity Unit Value and transfer provisions during the Annuity Period, see
the Statement of Additional Information.
FIXED ANNUITY PAYOUT
A Fixed Annuity Payout is an annuity with payouts which remain fixed as to
dollar amount throughout the Payout Period. As of the Annuity Date, any Division
Accumulation Value invested in the Divisions of the Variable Account will be
allocated to the Guaranteed Interest Division. The Fixed Annuity Payouts will be
that amount that the Proceeds will provide as of the Supplementary Contract
Effective Date at the Benchmark Total Return of 3%. If the Fixed Annuity Payout
is credited at an interest rate above the guaranteed minimum, the installment
dollar amount will be greater than the determined installment dollar amount for
the time period that the higher rate is declared. If you have elected to receive
payouts less frequently than monthly, the payout amount is adjusted according to
the factors in Payouts Other Than Monthly, page 38.
For Fixed Annuity Payouts, First ING Life guarantees that, after the
Supplementary Contract Effective Date, monies held under an Annuity Option will
be credited with interest at a minimum guaranteed effective rate of 3%. We may
declare that Fixed Annuity Payouts are to be credited at an interest rate above
the guaranteed minimum. We guarantee that any higher rate will be in effect for
at least 12 months.
COMBINATION ANNUITY PAYOUT
A Combination Annuity Payout is an annuity where a portion of the payout is
variable and a portion of the payout is fixed as to dollar amount throughout the
Payout Period. You can split the Proceeds among Fixed and Variable Annuity
Payouts in any proportion you choose, with the exception that a minimum of 25%
must be allocated to either option you elect as of the Supplementary Contract
Effective Date. As of the Supplementary Contract Effective Date, we will
allocate Accumulation Value between the Guaranteed Interest Division and the
Divisions of the Variable Account to meet the proportions selected.
The potential benefit of splitting the Proceeds between a Fixed and a Variable
Annuity Payout is that you will have a portion of your Annuity Payout fixed and
guaranteed and a portion which may increase over time, helping to offset
inflation. Of course, the payouts attributable to the Variable Annuity Payout
could decrease and are not guaranteed, since their value is determined by the
investment experience of the Divisions of the Variable Account you select. Once
you elect your Combination Annuity Payout, you may subsequently increase your
allocation to a Fixed Annuity Payout, but you may not increase your allocation
to the Variable Annuity Payout.
FREQUENCY AND AMOUNT OF ANNUITY PAYOUTS
Annuity Payouts will be made to the Annuitant based on the Annuity Option and
frequency elected. They may be made monthly, quarterly, semiannually or
annually. If we do not receive written notice from you, the Annuity Payouts will
be made monthly. There may be certain restrictions on minimum payouts that we
will allow. We may require that a one sum payout be made if the
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Proceeds to be applied are less than $2,000 or, if the payouts to the Annuitant
are ever less than $20, we may change the frequency of payouts to result in
payouts of at least that amount or require a one sum payout.
PAYOUT PERIOD OPTIONS
Under each Payout Option, the Payout Period is elected from one of the following
options:
OPTION I. Payouts for a Designated Period. Payouts will be made in 1, 2,
4, or 12 installments per year as elected for a designated period, which
may be 5 to 30 years. If a Fixed Annuity Payout is elected, the installment
dollar amounts will be equal except for any excess interest as described in
Fixed Annuity Payout, page 37. If a Variable Annuity Payout is elected,
the number of Annuity Units of each installment will be equal, but the
dollar amounts of each installment will vary based on the Annuity Unit
Values of the Divisions chosen. If the Annuitant dies before the end of the
designated period, payouts will be continued to the Contingent Annuitant,
if one has been named, until the end of the designated period. The amount
of each payout will depend upon the designated period elected and, if a
Variable Annuity Payout is elected, the investment experience of the
Divisions of the Variable Account selected. The amount of the first monthly
payout for each $1,000 of Accumulation Value applied is shown in Payout
Option Table I in the Contract.
OPTION II. Life Income With Payouts for a Designated Period. Payouts will
be made in 1, 2, 4, or 12 installments per year throughout the Annuitant's
lifetime or, if longer, for a period of 5, 10, 15, or 20 years as elected.
If a Fixed Annuity Payout is elected, the installment dollar amounts will
be equal except for any excess interest as described in Fixed Annuity
Payout, page 37. If a Variable Annuity Payout is elected, the number of
Annuity Units of each installment will be equal, but the dollar amounts of
each installment will vary based on the Annuity Unit Values of the
Divisions chosen. If the Annuitant dies before the end of the designated
period, payouts will be continued to the Contingent Annuitant, if one has
been named, until the end of the designated period. The amount of each
payout will depend upon the Annuitant's sex (unless otherwise prohibited by
state law), Age at the time the first payout is due, the designated period
elected and, if a Variable Annuity Payout is elected, the investment
experience of the Divisions of the Variable Account selected. The amount of
the first monthly payout for each $1,000 of Accumulation Value applied is
shown in Payout Option Table II in the Contract. This option is not
available for Ages not shown in these Tables.
OPTION III. Joint and Last Survivor. Payouts will be made in 1, 2, 4, or 12
installments per year while both Annuitants are living. Upon the death of
one Annuitant, the Survivor's Annuity Payout will be paid throughout the
lifetime of the Surviving Annuitant.
If a Fixed Annuity Payout is elected, the installment dollar amount will be
equal while both Annuitants are living and, upon the death of one
Annuitant, will be reduced to 2/3 of the installment dollar amount while
both Annuitants were living, excluding any excess interest as described in
Fixed Annuity Payout, page 37.
If a Variable Annuity Payout is elected, the number of Annuity Units
applied to each installment will be level while both Annuitants are living
and, upon the death of one Annuitant, will be reduced to 2/3 of the number
of Annuity Units applied to each installment while both Annuitants were
living. The dollar amounts of each installment will vary based on the
Annuity Unit Values of the Divisions chosen.
The amount of each payout will depend upon the Age and sex (unless
otherwise prohibited by state law) of each Annuitant at the time the first
payout is due and, if a Variable Annuity Payout is elected, the investment
experience of the Divisions of the Variable Account selected.
A description of how the first monthly installment for Payout Period Option
III is calculated is provided in your Contract.
OPTION IV. Other. Payouts will be made in any other manner as agreed upon
in writing between you or the Beneficiary and us.
PAYOUTS OTHER THAN MONTHLY
The Payout Option Tables in your Contract show the first monthly installments
for Payout Period Options I and II. To arrive at the first annual, semiannual or
quarterly payouts, multiply the appropriate figures by 11.839, 5.963 or 2.993 if
the Benchmark Total Return is 3% and by 11.736, 5.939 or 2.988 if the Benchmark
Total Return is 5%, respectively. Factors for other designated periods or for
other options that may be provided by mutual agreement will be provided upon
reasonable request.
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COMMUTING PROVISIONS
The Annuitant may commute remaining designated period installments under Payout
Period Option I. The Contingent Annuitant may commute remaining designated
period installments after the death of the Annuitant under Payout Period Options
I or II. If no Contingent Annuitant is named, any remaining designated period
installments may be commuted by the estate. Any computation shall be at the
appropriate Benchmark Total Return rate.
REGULATORY INFORMATION
VOTING PRIVILEGES
We invest the assets in the Divisions of the Variable Account in shares of the
corresponding Portfolios. See The Portfolios, page 15. First ING Life is the
legal owner of the shares held in the Variable Account and, as such, has the
right to vote on certain matters. Among other things, we may vote on any matters
described in the Fund's current prospectus or requiring a vote by shareholders
under the 1940 Act.
Even though we own the shares, to the extent required by the interpretations of
the SEC, we give you the opportunity to tell us how to vote the number of shares
that are attributable to your Contract. We will vote those shares at meetings of
Portfolio shareholders according to your instructions. We will also vote any
Portfolio shares that are not attributable to the Contracts and shares for which
instructions from Owners were not received in the same proportion that Owners
vote. If the Federal securities laws or regulations or interpretations of them
change so that we are permitted to vote shares of a Portfolio in our own right
or to restrict Owner voting, we reserve the right to do so.
You may participate in voting only on matters affecting the Portfolios in which
your assets have been invested. We determine the number of Portfolio shares in
each Division that are attributable to your Contract by dividing the amount of
your Division Accumulation Value allocated to that Division by the net asset
value of one share of the corresponding Portfolio. The number of shares as to
which you may give instructions will be determined as of the record date set by
the Portfolio's Board for the Portfolio's shareholders meeting. We count
fractional shares. If you have a voting interest, we will send you proxy
material and a form for giving us voting instructions.
All Portfolio shares are entitled to one vote. The votes of all Portfolios are
cast together on an aggregate basis, except on matters where the interests of
the Portfolios differ. In such cases, voting is on a portfolio-by-portfolio
basis. In these cases, the approval of the shareholders in one Portfolio is not
needed in order to make a decision in another Portfolio. Examples of matters
that would require a portfolio-by-portfolio vote are changes in the fundamental
investment policy of a particular Portfolio or approval of an investment
advisory agreement. Shareholders in a Portfolio not affected by a particular
matter generally would not be entitled to vote on it.
The Boards of the Portfolios and First ING Life and any other insurance
companies participating in the Portfolios are required to monitor events to
identify any material conflicts that may arise from the use of the Portfolios
for variable life and variable annuity separate accounts. Conflict might arise
as a result of changes in state insurance law or Federal income tax law, changes
in investment management of any Portfolio, or differences in voting instructions
given by owners of variable life insurance policies and variable annuity
contracts. Shares of these Portfolios may also be sold to certain pension and
retirement plans qualifying under Section 401 of the Code and plans that include
cash or deferred arrangements under Section 401(k) of the Code. As a result,
there is a possibility that a material conflict may arise between the interests
of owners generally, or certain classes of owners, and such retirement plans or
participants in such retirement plans. If there is a material conflict, First
ING Life will have an obligation to determine what action should be taken,
probably including the removal of the affected Portfolios from eligibility for
investment by the Variable Account. First ING Life will consider taking other
action to protect Owners. However, there could be unavoidable delays or
interruptions of operations of the Variable Account that First ING Life may be
unable to remedy.
In certain cases, when required by state insurance regulatory authorities, we
may disregard instructions relating to changes in the Portfolio's adviser or the
investment policies of the Portfolios. In the event we do disregard voting
instructions, we will include a summary of our actions and give our reasons in
the next semiannual report to Owners.
Under the 1940 Act, certain actions affecting the Variable Account (such as some
of those described under Changes Within The Variable Account, page 21) may
require Owner approval. In that case, you will be entitled to one vote for every
$100 of Division Accumulation Value you have in the Divisions of the Variable
Account. We will cast votes attributable to amounts in the Divisions of the
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Variable Account not attributable to Contracts in the same proportion as votes
cast by Owners.
State Regulation
We are regulated and supervised by the Insurance Department of the State of New
York, which periodically examines our financial condition and operations. We
are also subject to the insurance laws and regulations of all jurisdictions in
which we do business. The Contract has been approved by the Insurance Department
of the State of New York and by the Insurance Departments of other
jurisdictions. We are required to submit annual statements of our operations,
including financial statements, to the Insurance Departments of the various
jurisdictions in which we do business to determine solvency and compliance with
state insurance laws and regulations.
Legal Proceedings
First ING Life, as an insurance company, is ordinarily involved in litigation.
We do not believe that any current litigation is material to First ING Life's
ability to meet its obligations under the Contract or to the Variable Account,
and we do not expect to incur significant losses from such actions. ING America
Equities, the principal underwriter and distributor of the Contract, is not
engaged in any litigation of any material nature.
Legal Matters
The legality of the Contract described in this prospectus has been passed upon
by Gary W. Waggoner, General Counsel and Secretary of First ING Life.
Experts
The financial statements of First ING Life at December 31, 1996 and 1995, and
for each of the three years in the period ended December 31, 1996 and the
financial statements of First ING Separate Account A1 at December 31, 1996 and
for the year then ended, appearing in the Statement of Additional Information
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon appearing elsewhere herein, and are included in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing.
FEDERAL TAX CONSIDERATIONS
Introduction
The ultimate effect of Federal income taxes on the amounts paid for the
Contract, on the investment return on assets held under a Contract, on Annuity
Payouts and on the economic benefits to the Owner, Annuitant or Beneficiary
depends upon the terms of the Contract, upon First ING Life's tax status and
upon the tax status of the parties concerned.
The following discussion is general in nature and is not intended as tax advice.
Each party concerned should consult a competent tax adviser. The discussion
below is based upon First ING Life's understanding of the Federal income tax
laws as they are currently interpreted and does not include state or local tax
issues. No representation is made regarding the likelihood of continuation of
the Federal income tax laws, the Treasury Regulations, or the current
interpretations by the Internal Revenue Service. For a discussion of Federal
income taxes as they relate to the Portfolios, please see the accompanying
prospectuses for the Portfolios that you are considering.
First ING Life Tax Status
First ING Life is taxed as a life insurance company under Part I of Subchapter L
of the Code. Since the Variable Account is not a separate entity from First ING
Life and its operations form a part of First ING Life, it will not be taxed
separately as a "regulated investment company" under Subchapter M of the Code.
Investment income and realized capital gains on the assets of the Variable
Account are reinvested and taken into account in determining the Contract's
Accumulation Value. Under existing Federal income tax laws, the Variable
Account's investment income, including realized net capital gains, is not taxed
to First ING Life. First ING Life reserves the right to make a deduction for
taxes should they be imposed with respect to such items in the future.
Taxation of Annuities
Section 72 of the Code governs taxation of annuities. In general, the Owner
(holder) of an annuity Contract will not be taxed on increases in value under
the Contract until some form of distribution occurs. (For purposes of this rule,
the amount of any indebtedness that is secured by a pledge or assignment of a
Contract is treated as a payout received on account of a partial withdrawal from
the Contract.) Under certain circumstances, however, the
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amount of any increase in the value of a Contract may be subject to current
Federal income tax. See Contracts Owned by Non-Natural Persons, page 43, and
Diversification Standards, page 44.
1. WITHDRAWALS PRIOR TO THE ANNUITY COMMENCEMENT DATE.
Section 72 of the Code provides, in effect, that the Proceeds from a surrender
of the Contract or a partial withdrawal from the Contract prior to the Annuity
Date will be treated as taxable income to the extent that the amount held under
the Contract immediately prior to the distribution exceeds the "investment in
the Contract." The "investment in the Contract" is defined in the Code as that
portion, if any, of Purchase Payments by or on behalf of a taxpayer under the
Contract which was not excluded from the taxpayer's gross income at the time of
such payout less any amounts previously received under the Contract which were
excluded from the taxpayer's gross income at the time of their receipt. For
these purposes, "investment in the Contract" is not affected by the Owner's or
Annuitant's death. That is, the investment in the Contract remains the amount of
any Purchase Payments made which were not excluded from gross income. The
taxable portion of any distribution received prior to the Annuity Date will be
subject to tax at ordinary income tax rates. For purposes of this rule, a pledge
or assignment of a Contract is treated as a payout received on account of a
partial withdrawal of a Contract.
2. ANNUITY PAYOUTS AFTER THE ANNUITY DATE.
Upon receipt of the Proceeds of a surrender of the Contract after the Annuity
Date, the recipient is taxed to the extent the Proceeds exceed the investment in
the Contract. Upon receipt of an Annuity Payout under the Contract, the
recipient will be taxed on a portion of each payout received if the value of the
Contract exceeds the investment in the Contract. The taxable portion of a payout
received after the Annuity Date will be subject to tax at ordinary income tax
rates.
For Fixed Annuity Payouts, the taxable portion of each payout is determined by
using a formula known as the "exclusion ratio," which establishes the ratio that
the investment in the Contract bears to the total expected amount of Annuity
Payouts for the term of the Contract. That ratio is then applied to each payout
to determine the non-taxable portion of the payout. The remaining portion of
each payout is taxed at ordinary income rates. For Variable Annuity Payouts, in
general, the taxable portion is determined by a formula which establishes a
specific dollar amount of each payout that is not taxed. The dollar amount is
determined by dividing the investment in the Contract by the total number of
expected periodic payouts. The remaining portion of each payout is taxed at
ordinary income rates. For Contracts with Annuity Dates after December 31, 1986,
once the excludable portion of Annuity Payouts to date equals the investment in
the Contract, the balance of the Annuity Payouts will be fully taxable.
Withholding of Federal income taxes on all distributions may be required unless
the recipient elects not to have any amounts withheld and properly notifies
First ING Life of that election.
3. PENALTY TAX ON CERTAIN WITHDRAWALS OR DISTRIBUTIONS.
With respect to amounts withdrawn or distributed before the taxpayer reaches Age
59 1/2, a penalty tax is imposed equal to 10% of the taxable portion of amounts
withdrawn or distributed. This penalty tax is 25% of withdrawals from SIMPLE IRA
Contracts within the first two years of participation. However, the penalty tax
will not apply to withdrawals:
1) made on or after the death of the Owner or, where the Owner is not an
individual, the death of the "primary Annuitant." The primary
Annuitant is defined as the individual the events in whose life are of
primary importance in affecting the timing and amount of the payout
under the Contract;
2) attributable to the taxpayer's becoming totally disabled within the
meaning of Code Section 72(m)(7);
3) which are part of a series of substantially equal periodic payouts
made at least annually for the life (or life expectancy) of the
taxpayer, or the joint lives (or joint life expectancies) of the
taxpayer and his Beneficiary;
4) allocable to investment in the Contract prior to August 14, 1982;
5) under a qualified funding asset (as defined in Code Section
130(d));
6) under an immediate annuity Contract, or
7) on contracts which are purchased by an employer on termination of
certain types of qualified plans and which are held by the employer
until the employee separates from service.
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Other tax penalties may apply to certain distributions as well as to certain
contributions and other transactions under a qualified plan.
If the penalty tax does not apply to a withdrawal as a result of the application
of item 3) above, and the series of payouts are subsequently modified (other
than by reason of death or disability), the tax for the year when the
modification occurs will be increased by an amount (as determined by the
regulations) equal to the tax that would have been imposed but for item 3)
above, plus interest for the deferral period, if the modification takes place
(a) before the close of the period which is five years from the date of the
first payout and after the taxpayer attains Age 59 1/2, or (b) before the
taxpayer reaches Age 59 1/2.
TAXATION OF INDIVIDUAL RETIREMENT ANNUITIES
Code Section 408 permits individuals or their employers to contribute to an
individual retirement program known as an IRA. In addition, distributions from
certain other types of qualified plans may be placed into an IRA on a tax
deferred basis. IRAs are subject to limitations on the amount which may be
contributed and the time when distributions may commence. Tax penalties may
apply to contributions in excess of specified limits, loans or assignments,
distributions in excess of a specified amount annually or that do not meet
specified requirements, and in certain other circumstances.
Under the Code, contributions to an Individual IRA Contract may not exceed
$2,000 in any year. For married individuals filing joint returns, each spouse
may establish an IRA Contract and contribute up to $2,000 per year ($4,000 total
even if one spouse does not work) provided that the combined contributions do
not exceed the total combined compensation of both spouses. Employer
contributions to a SEP contract cannot exceed the lesser of $30,000 or 15% of an
employee's compensation. Under a SARSEP established prior to January 1, 1997,
salary reduction contributions are permitted up to a maximum of $7,000, indexed
for inflation. A SARSEP may not be established after January 1, 1997. Under a
SIMPLE plan, employees may elect to make salary reduction contributions up to a
maximum of $6,000 per year, indexed for inflation, and, in addition, the
employer must make either dollar-for-dollar matching contributions up to 3% of
each contributing employee's compensation or 2% of compensation for every
employee earning at least $5,000 per year.
Under the Code, distributions from IRAs generally must begin no later than April
1st of the calendar year following the calendar year in which the Owner attains
Age 70 1/2. If the required minimum distribution is not withdrawn, there may be
a penalty tax in an amount equal to 50% of the difference between the amount
required to be withdrawn and the amount actually withdrawn. See the Statement of
Additional Information for a discussion of the various special rules concerning
the minimum distribution requirements.
Under amendments to the Code which became effective in 1993, distributions from
a qualified plan (other than non-taxable distributions representing a return of
capital, distributions meeting the minimum distribution requirement,
distributions for the life or life expectancy of the recipient(s) or
distributions that are made over a period of more than 10 years) are eligible
for tax-free rollover within 60 days of the date of distribution, but are also
subject to Federal income tax withholding at a 20% rate unless paid directly to
another qualified plan. If the recipient is unable to take full advantage of the
tax-free rollover provisions, there may be taxable income, and the imposition of
a 10% penalty tax (25% in the case of certain distributions from SIMPLE plans)
if the recipient is under Age 59 1/2.
First ING provides the Owner with the IRA Disclosure Statement attached to the
Prospectus as Appendix C. It is important that you consult your tax adviser
before purchasing any type of IRA.
DISTRIBUTION-AT-DEATH RULES
The following required distribution rules shall apply if and to the extent
required under Section 72(s) of the Internal Revenue Code:
1) Subject to the alternative election or spouse beneficiary provisions
in subsection (2) or (3) below,
a) If any Owner dies on or after the annuity starting date and
before the entire interest in this Contract has been distributed,
the remaining portion of such interest shall be distributed at
least as rapidly as under the method of distribution being used
as of the date of such death;
b) If any Owner dies before the annuity starting date, the entire
interest in this Contract will be distributed within 5 years
after such death; and
c) If any Owner is not an individual, then for purposes of this
subsection (1), the primary Annuitant under this Contract shall
be
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treated as the Owner (the "Deemed Owner"), and any change in the
primary Annuitant shall be treated as the death of the Owner. The
primary Annuitant is the individual, the events in the life of
whom are of primary importance in affecting the timing or amount
of the payout under the Contract.
2) If any portion of the interest of an Owner (or a Deemed Owner) in
subsection (1) is payable to or for the benefit of a designated
beneficiary, and such beneficiary elects within 60 days of receipt of
due proof of death to have such portion distributed in an Annuity
Option over a period that: A) does not extend beyond such
beneficiary's life or life expectancy and B) starts within 1 year
after such death (a "Qualifying Distribution Period"); then for
purposes of satisfying the requirements of subsection (1), such
portion shall be treated as distributed entirely on the date such
periodic distributions begin. Such beneficiary may elect any Payout
Period Option for a Qualifying Distribution Period, subject to any
restrictions imposed by any regulations under Section 72(s) of the
Internal Revenue Code.
3) If any portion of the interest of an Owner (or a Deemed Owner)
described in subsection (1) is payable to or for the benefit of such
Owner's spouse, or is co-owned by such spouse, then such spouse shall
be treated as the Owner of such portion for purposes of the
requirements of subsection (1).
Our Contract complies with these rules. See the Required Distribution section of
your Contract.
TAXATION OF DEATH BENEFIT PROCEEDS
Amounts may be distributed from a non-qualified Contract because of the death of
the Owner. Generally, such amounts are includible in the income of the recipient
as follows: (a) if distributed in a lump sum, they are taxed in the same manner
as a full surrender of the Contract, as described above, or (b) if distributed
under an Annuity Option, they are taxed in the same manner as Annuity Payouts,
as described above.
CONTRACTS OWNED BY NON-NATURAL PERSONS
For contributions to Contracts where the Contract is held by a non-natural
person (for example, a corporation) the income on that Contract (generally the
increase in the Cash Surrender Value less the Purchase Payments) is includible
in taxable income each year. The rule does not apply where the non-natural
person is the nominal Owner of a Contract and the Beneficiary is a natural
person. The rule also does not apply where the Contract is acquired by the
estate of a decedent, where the Contract is an IRA Contract, where the Contract
is a qualified funding asset for structured settlements or where the Contract is
purchased on behalf of an employee upon termination of a qualified plan.
If the Contract is held by a trust, contact your tax adviser for the tax
effects.
SECTION 1035 EXCHANGES
Section 1035 of the Code generally provides that no gain or loss shall be
recognized on the exchange of an annuity Contract for another. If the exchanged
contract was issued prior to August 14, 1982, the new Contract retains some of
the exchanged contract's tax attributes. The pre-August 14, 1982, cost recovery
rules will continue to apply to distributions characterized as amounts not
received as an annuity with respect to such distributions allocable to
investments made before August 14, 1982. Under the cost recovery rule, such
amounts are received tax-free until the taxpayer has received amounts equal to
the pre-August 14, 1982 investments. Amounts allocable to post-August 13, 1982,
investments are subject to the interest first rule. In contrast, a new Contract
issued in exchange for a contract issued before January 18, 1985, does not
retain the exchanged contract's grandfathering for purposes of the penalty and
distribution at death rules. Special rules and procedures apply to Section 1035
transactions. Prospective Owners wishing to take advantage of Section 1035
should consult their tax advisers.
ASSIGNMENTS
A transfer of Ownership, a collateral assignment or the designation of an
Annuitant or other Beneficiary who is not also the Owner may result in tax
consequences to the Owner, Annuitant or Beneficiary that are not discussed
herein. An Owner contemplating such a transfer or assignment of a Contract
should contact a competent tax adviser with respect to the potential tax effects
of such a
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<PAGE>
transaction. IRA Contracts may not be transferred or assigned.
MULTIPLE CONTRACTS RULE
The Technical and Miscellaneous Revenue Act of 1988 (the "1988 Act") provides
that, for Contracts entered into on or after October 21, 1988, for purposes of
determining the amount of any distribution under Section 72(e) (amounts not
received as annuities) that is includible in gross income, all non-qualified
deferred annuity contracts issued by the same (or an affiliated) insurer to the
same Owner during any calendar year are to be aggregated and treated as one
contract. Thus, any amount received under any such contract prior to the
contract's annuity starting date, such as a partial withdrawal, dividend, or
loan, will be taxable (and possibly subject to the 10% penalty tax) to the
extent of the combined income in all such contracts. The Treasury Department has
specific authority to issue regulations that prevent the avoidance of Section
72(e) income through the serial purchase of annuity contracts or otherwise. In
addition, there may be other situations in which the Treasury Department may
conclude that it would be appropriate to aggregate two or more contracts
purchased by the same Owner. Accordingly, an Owner should consult a competent
tax adviser before purchasing more than one annuity contract.
DIVERSIFICATION STANDARDS
To comply with the diversification regulations ("Regulations") issued under Code
Section 817(h), the Divisions will be required to diversify their investments.
The Regulations generally require that on the last day of each quarter of a
calendar year:
1) no more than 55% of the value of each Division is represented by any
one investment;
2) no more than 70% is represented by any two investments;
3) no more than 80% is represented by any three investments; and
4) no more than 90% is represented by any four investments.
With respect to each Division, a "look-through" rule applies which suggests that
each Division of the Variable Account will be tested for compliance with the
percentage limitations by looking through to the assets of the Portfolio in
which that Division invests. All securities of the same issuer are treated as
one investment. As a result of the 1988 Act, each government agency or
instrumentality will be treated as a separate issuer for the purposes of these
limitations.
In connection with the issuance of the temporary diversification regulations in
1986, the Treasury Department announced that such regulations did not provide
guidance concerning the extent to which owners may direct their investments to
particular divisions of a separate account without being considered the owners
of the assets of the account. It is possible that regulations or revenue rulings
may be issued in this area at some time in the future. It is not clear at this
time what these regulations or rulings would provide. It is possible that if
such regulations or rulings are issued, the Contract may need to be modified in
order to remain in compliance. For these reasons, First ING Life reserves the
right to modify the Contract, as necessary, to prevent the Owner from being
considered the Owner of the assets of the Variable Account.
The Portfolios in which the Variable Account invests have provided certain
assurances that they will meet the applicable diversification standards.
However, in the case of a master feeder arrangement, we note that the Internal
Revenue Service had not previously ruled that the "look-through" rule referenced
above may be applied to both the feeder fund and the master fund in order to
meet the diversification requirements of Code Section 817(h). Thus, in
connection with the conversion of the Neuberger & Berman Advisers Management
Trust into a master feeder structure effective May 1, 1995 (see "Facts about
First ING Life and the Variable Account -- The Portfolios"), Neuberger & Berman
Management Incorporated advised First ING Life that it applied for a private
letter ruling from the Internal Revenue Service authorizing such a multiple
look-through. On June 29, 1995, the Internal Revenue Service issued a favorable
private letter ruling regarding the applicability of the "look-through"
provisions of Internal Revenue Code Section 817(h) to the master feeder
structure.
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<PAGE>
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
<S> <C>
FIRST ING LIFE 2
THE ADMINISTRATOR 2
PERFORMANCE INFORMATION 2
SEC YIELD FOR THE DIVISION INVESTING IN THE FIDELITY VIP MONEY MARKET PORTFOLIO 2
SEC STANDARD AVERAGE ANNUAL TOTAL RETURN FOR NON-MONEY MARKET DIVISIONS 3
ACCUMULATION UNIT VALUE 3
DETERMINATION OF ANNUITY PAYOUTS 4
IRA INCOME PROGRAM 6
OTHER INFORMATION 6
FINANCIAL STATEMENTS 7
</TABLE>
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<PAGE>
APPENDIX A
EXAMPLE 1: HYPOTHETICAL ILLUSTRATION OF SYSTEMATIC INCOME PROGRAM WITHDRAWALS
The following example illustrates how Systematic Income Program partial
withdrawals would work if you elected a monthly withdrawal program with the
maximum monthly income payment percentage of 1.25% of Accumulation Value, based
on hypothetical Accumulation Values as shown:
<TABLE>
<CAPTION>
Accumulation Value Systematic Income
Month At Time of Withdrawal Program Withdrawal Amount
------- --------------------- -------------------------
<S> <C> <C>
1 $8,500.00 $106.25
2 $8,425.00 $105.31
3 $8,700.00 $108.75
4 $8,150.00 $101.87
5 $7,900.00 $ 98.75
</TABLE>
Because the fifth monthly Systematic Income Program withdrawal amount would be
less than $100 (and is based on the maximum monthly percentage of 1.25%), the
Systematic Income Program would be canceled after this withdrawal, and no
withdrawal would be made for the sixth and subsequent months.
For additional information about the Systematic Income Program, see Systematic
Income Program, page 29.
EXAMPLE 2: HYPOTHETICAL ILLUSTRATION OF A SERIES OF DEMAND WITHDRAWALS
The following example illustrates how we would determine the surrender charge
(and the amounts that could be withdrawn without a surrender charge) and the
partial withdrawal transaction charge for a hypothetical series of three demand
withdrawals made in the third Contract Year.
For example, assume that:
1) An Owner has made an initial Purchase Payment of $30,000 to a
Contract;
2) The Owner has not subsequently made any additional Purchase Payments
to the Contract;
3) The Owner has not taken any partial withdrawals during the first two
Contract Years; and
4) The Accumulation Value of the Contract as of the second Contract
Anniversary is $34,000.
The surrender and partial withdrawal transaction charges associated with each of
the following three hypothetical demand withdrawals would therefore be as
follows:
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<PAGE>
<TABLE>
<CAPTION>
First Gross Second Gross Third Gross
Demand Withdrawal Demand Withdrawal Demand Withdrawal
----------------- ----------------- -----------------
<S> <C> <C> <C>
1) Hypothetical Accumulation Value $34,200 $33,000/1/ $29,400/2/
Before Demand Withdrawal
2) 15% Of The Accumulation Value As Of $ 5,100 $ 3,100/3/ $ 0/4/
The Last Contract Anniversary (Less
Any Gross Partial Withdrawals Already
Made During The Contract Year That Are
Not Considered To Be Withdrawals Of
Purchase Payments)
3) Amount Of Accumulation Value $ 4,200/5/ $ 3,000/6/ $ 400/7/
Attributable To Earnings
4) Gross Demand Withdrawal Requested/8/ $ 2,000 $ 4,000 $ 3,000
5) Amount Withdrawn Attributable To Any $ 2,000 $ 3,000 $ 400
Earnings In The Contract
6) Amount Withdrawn Attributable To $ 0 $ 0 $ 0
Purchase Payments Held For At Least
Five Full Contract Years Since The
Contract Anniversary At The End Of The
Contract Year In Which The Purchase
Payment Was Made
7) Amount Withdrawn Attributable To The $ 0 $ 100 $ 0
Amount By Which 2) Exceeds 3)
8) Amount Withdrawn Attributable To Any $ 0 $ 900 $ 0
Purchase Payments Remaining On A
First-In, First-Out Basis
9) Surrender Charge $ 0 $ 45 $ 130
[8) Multiplied By 5%, The
Applicable Surrender Charge
Percentage For Surrenders Of
Purchase Payments Made During The
Contract Year.]
10)Partial Withdrawal Transaction $ 0 $ 25 $ 25
Charge
11)Amount Of Net Demand Withdrawal [4) $ 2,000 $ 3,930 $ 2,845
Minus 9) Minus 10)]
</TABLE>
For more information, see Demand Withdrawal Option, page 29, and The Amount
You May Withdraw Without a Surrender Charge, page 30.
______________________
/1/ Accumulation Value after the First Net Demand Withdrawal ($32.200) plus any
Earnings since that time, assumed to be $800.
/2/ Accumulation Value after the second Net Demand Withdrawal ($29,000) plus any
Earnings since that time, assumed to be $400.
/3/ $5,100 minus $2,000, the amount of Gross Partial Withdrawals already made
during the Contract Year that are not considered to be withdrawals of
Purchase Payments.
/4/ $5,100 minus $2,000 minus $3,100, the amount of Gross Partial Withdrawals
already made during the Contract Year that are not considered to be
withdrawals of Purchase Payments.
/5/ Current Accumulation Value ($34,200) minus amount of initial Purchase
Payment ($30,000).
/6/ Cumulative Earnings remaining after the first Demand Withdrawal ($2,200)
plus the Earnings since that time, assumed to be $800.
/7/ Cumulative Earnings remaining after the first and second Demand Withdrawals
($0) plus the Earnings since that time, assumed to be $400.
/8/ We would deem the Gross Demand Withdrawal to be made in the following
order --5), 6), 7) and 8) -- for purposes of determining the amount of any
surrender charge. Withdrawals deemed to be taken from 5), 6) or 7) are not
subject to a surrender charge.
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<PAGE>
EXAMPLE 3: HYPOTHETICAL ILLUSTRATION OF A FULL SURRENDER
The following example illustrates how we impose the surrender charge and
administrative charge on full surrenders to arrive at the Cash Surrender Value.
For example, assuming that:
1) An Owner has made an initial Purchase Payment of $30,000 to a
Contract; and
2) The Owner has not made any additional Purchase Payments to the
Contract;
The Owner's Cash Surrender Value would be as follows, based on hypothetical
Accumulation Values, if the Contract were surrendered at the end of the
applicable time periods:
<TABLE>
<CAPTION>
If You
Surrender Your Hypothetical Purchase Surrender Cash
Contract in Accumulation Earnings Payment Charge Surrender Administrative Surrender
Contract Year Value Withdrawal Withdrawn Percentage Charge Charge Value
- ------------- ----- ---------- --------- ---------- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
1 $31,000 $ 1,000 $30,000 7% $2,100 $30 $28,870
3 $40,000 $10,000 $30,000 5% $1,500 $30 $38,470
6 $60,000 $30,000 $30,000 2% $ 600 $30 $59,370
8 $70,000 $40,000 $30,000 0% $ 0 $30 $69,970
</TABLE>
For more information, see Surrender Charge, page 34, and Administrative
Charge, page 34.
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<PAGE>
APPENDIX B
PERFORMANCE INFORMATION
We may advertise certain performance related information for the Divisions of
the Variable Account, including yields and average annual total return. Certain
Portfolios have been in existence prior to the commencement of the offering of
the Contract described in this prospectus. We may advertise the performance of
the Divisions that invest in these Portfolios for these prior periods. The
performance information of any period prior to the commencement of the offering
of the Contract is calculated as if the Contract had been offered during those
periods using current charges and expenses.
Performance information for a Division of the Variable Account may be compared,
in reports and promotional literature, to: (i) the Standard & Poor's 500 Index
("S & P 500"), the Dow Jones Industrial Average ("DJIA"), the Shearson/Lehman
Intermediate Government/Corporate Bond Index, the Shearson/Lehman Long-Term
Government/Corporate Bond Index; the Donoghue Money Fund Average, the U.S.
Treasury Note Index, or other indices measuring performance of a pertinent group
of securities so that investors may compare that Division's results with those
of a group of securities widely regarded by investors as representative of the
securities markets in general; (ii) other variable annuity separate accounts or
other investment products tracked by Lipper Analytical Services, Variable
Annuity Research Data Service ("VARDS") or Morningstar, Inc. -- three widely
used independent research firms which rank mutual funds and other investment
companies by overall performance, investment objectives, and assets -- or
tracked by other ratings services, companies, publications, or persons who rank
separate accounts or other investment products on overall performance or other
criteria; and (iii) the Consumer Price Index (as a measure for inflation) to
assess the real rate of return from an investment in the Contract. Unmanaged
indices may assume the reinvestment of dividends but generally do not reflect
deductions for administrative and management costs and expenses.
Normally these rankings and ratings are published by independent tracking
services and publications of general interest including, but not limited to:
Lipper, VARDS, Morningstar, Donoghue, magazines such as Money, Forbes,
Kiplinger's Personal Finance Magazine, Financial World, Consumer Reports,
Business Week, Time, Newsweek, National Underwriter, U.S. News and World Report,
On Wall Street, Smart Money, Investment Advisor, Securities Industry Management,
Life Insurance Selling, Financial Planning; rating services such as LIMRA,
Value, Best's Agent Guide, Western Annuity Guide, Comparative Annuity Reports,
and other publications such as The Wall Street Journal, Barron's, Investor's
Daily, and Standard & Poor's Outlook.
Performance information for any Division of the Variable Account reflects only
the performance of a hypothetical Contract under which the Division Accumulation
Value is allocated to that Division during the particular time period on which
the calculations are based. The performance information is based on historical
results and is not intended to indicate past or future performance under an
actual Contract.
Below are tables of total return for each Division of the Variable Account for
the most recent one, five and ten years (or since inception of the underlying
Portfolio if less than ten years). Below also are the 7-day yield and effective
yield for the Division investing in the Fidelity VIP Money Market Portfolio.
The yield of the Division investing in the Fidelity VIP Money Market Portfolio
refers to the income generated by an investment in the Division over a 7-day
period (which period will be specified in the advertisement). This income is
then "annualized" by assuming that the income generated in the specific week is
generated over a 52-week period. This annualized yield is shown as a percentage
of the investment. The effective yield calculation is similar, but when
annualized, the income earned by an investment in the Division is assumed to be
reinvested. Thus the effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment. The yield and
effective yield of this Division reflects the deduction of all charges, expenses
and fees applicable to that Division but not the surrender charge, partial
withdrawal transaction charge, excess transfer charge, or taxes on Purchase
Payments. Yield and effective yield are calculated as shown in the Statement of
Additional Information.
Quotations of the average annual total returns are based on the average
percentage change in value of a hypothetical investment in the specific Division
over a given period of one, five or ten years (or, if less, up to the life of
the Portfolio.) They reflect the deduction of the surrender charge that would
apply if an Owner terminated the Contract at the end of the period indicated,
the
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<PAGE>
administrative charge, the mortality and expense risk charge and the asset-based
administrative charge as well as fees and charges of the respective Portfolio.
In addition, average annual total return quotations may also be accompanied by
total return quotations, computed on the same basis as described above, except
deductions will not include the surrender charge. Average annual total return is
calculated as shown in the Statement of Additional Information.
The performance results shown in the following tables are not an estimate or
guarantee of future investment performance, and do not represent the actual
experience of amounts invested by a particular Owner.
Performance information should be considered in light of the investment
objectives, characteristics and quality of the Portfolios in which that Division
invests, and the market conditions during the given time period, and should not
be considered as a representation of what may be achieved in the future. For a
description of the methods used to determine yield and total return for the
Divisions of the Variable Account, see the Statement of Additional Information.
Reports and promotional literature may also contain other information, including
the ranking of any Division derived from rankings of variable annuity separate
accounts or other investment products tracked by Lipper Analytical Services,
Morningstar, Inc., or by ratings services, companies, publications, or other
persons who rank separate accounts or other investment products on overall
performance or other criteria.
The Variable Account may also report other information, including the effect of
tax-deferred compounding on a Division's investment returns, or returns in
general, which may be illustrated by tables, graphs, or charts. All income and
capital gains derived from Division investments are reinvested and can lead to
substantial long-term accumulation of assets, provided that the Division
investment experience exceeds 1.40% on an annual basis over many years.
First ING Life is also ranked and rated by independent financial rating
services, among which may include A. M. Best, Duff & Phelps, Moody's, Standard &
Poor's and Weiss Research, Inc. The purpose of these ratings is to reflect the
financial strength or claims-paying ability of First ING Life. The ratings are
not intended to reflect the investment experience or financial strength of the
Variable Account.
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<PAGE>
PERFORMANCE CHART
The information below shows how the actual charges of a hypothetical contract
held for specified time periods ending December 31, 1996, would affect the
investment experience of the various Divisions available under the Contract.
The rates of return assume a $1,000 single purchase payment allocated to each
individual Division and no taxes deducted from the Purchase Payment. The returns
for a Contract that is not surrendered include all deductions for contract
charges except the surrender charge. The returns for a Contract that is
surrendered reflect all Contract costs -- including the surrender charge -- that
would apply if the Contract were terminated at the end of the period indicated.
(The maximum sales surrender charge on each payment is 7% the first year,
decreasing 1% each year thereafter and equaling 0% after six years.) The maximum
$30 annual administrative charge is reflected using a formula which allows this
charge to be expressed as a percentage of the anticipated average Contract size.
Because the anticipated average Contact account size is greater than $1,000, the
expense effect of the annual administrative charge is reduced accordingly.
<TABLE>
<CAPTION>
Total Average Annual Returns Total Average Annual Returns
Assuming Contract Not Surrendered Assuming Contract Surrendered
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Shorter of Shorter of
--------- 10 Years or 10 Years or
Division Inception 1 Year 5 Years Inception 1 Year 5 Years Inception
- -------- --------- ------ ------- --------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
Limited Maturity Bond Portfolio 09-10-84 2.75% 3.76% 5.12% -4.25% 3.24% 5.12%
Growth Portfolio 09-10-94 7.52% 8.21% 9.82% 0.52% 7.77% 9.82%
Partners Portfolio 03-22-94 27.68% N/A 20.01% 20.68% N/A 18.70%
THE ALGER AMERICAN FUND
Alger American Small
Capitalization Portfolio 09-21-88 2.63% 9.38% 18.50% -4.37% 8.96% 18.49%
Alger American MidCap Growth Portfolio 05-03-93 10.26% N/A 22.32% 3.26% N/A 21.68%
Alger American Growth Portfolio 01-09-89 11.68% 14.94% 17.02% 4.68% 14.59% 17.02%
Alger American Leveraged AllCap Portfolio 01-25-95 10.40% N/A 39.39% 3.40% N/A 37.09%
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
VIP Growth Portfolio 10-09-86 13.01% 13.48% 13.49% 6.01% 13.12% 13.49%
VIP Overseas Portfolio 01-28-87 11.55% 7.53% 6.31% 4.55% 7.08% 6.31%
VIP Money Market Portfolio* 04-01-82 3.84% 2.98% 4.41% -3.16% 2.45% 4.41%
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
VIP II Asset Manager Portfolio 09-06-89 12.91% 9.61% 10.06% 5.91% 9.19% 10.06%
VIP II Index 500 Portfolio 08-27-92 21.02% N/A 15.39% 14.02% N/A 14.96%
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF - Total Return Portfolio 06-02-94 10.52% N/A 12.28% 3.52% N/A 10.65%
INVESCO VIF - Industrial Income Portfolio 08-10-94 20.48% N/A 19.64% 13.48% N/A 18.00%
INVESCO VIF - High Yield Portfolio 05-27-94 14.89% N/A 12.28% 7.89% N/A 10.66%
INVESCO VIF - Utilities Portfolio 01-01-95 11.09% N/A 9.28% 4.09% N/A 6.50%
VAN ECK WORLDWIDE INSURANCE TRUST
Worldwide Hard Assets Fund 09-01-89 16.29% 12.87% 6.66% 9.29% 12.50% 6.66%
</TABLE>
*The YIELD AND EFFECTIVE YIELD FOR THE DIVISION INVESTING IN THE FIDELITY VIP
MONEY MARKET PORTFOLIO WAS 3.77% AND 3.84%, RESPECTIVELY, AS OF DECEMBER 31,
1996.
The above performance figures reflect past performance only. They neither
guarantee nor predict future investment results under a Contract. Actual rates
of return and values will fluctuate, and you may have a gain or loss when money
is withdrawn from the Contract. The Accumulation Values of the Contract will
depend upon a number of factors, including what investment allocations you
choose and the experience of the Divisions in which you invest.
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<PAGE>
APPENDIX C
DISCLOSURE STATEMENT
FIRST ING LIFE INSURANCE COMPANY OF NEW YORK
EXCHEQUER ANNUITY
PROTOTYPE VARIABLE INDIVIDUAL RETIREMENT ANNUITY ACCOUNT
1. What is an IRA?
An IRA is intended to enable you to plan for your retirement by creating a
personal "retirement plan" subject to certain federal income tax
advantages, including, in some cases, a tax deduction for contributions. In
addition, any earnings on your IRA will not be subject to federal income
tax until you actually begin to receive a distribution from your account.
The state income tax treatment of your account may differ, and details
should be available from your state taxing authority or your own tax
adviser. As with most other laws that provide special tax treatment, there
are certain restrictions and limitations involved with respect to your IRA.
2. What if I establish an Individual Retirement Annuity (IRA) Account and then
change my mind?
You may revoke your IRA account at anytime and are entitled to a full
refund of any amount you have contributed to this account if you revoke the
account before the end of the 10th day following the day you execute the
account. The period of time during which you may revoke the account is
called the "Free Look" period. You may revoke the account in writing by
mailing or delivering a written notice of your intent to revoke on or
before the 10th day after the day you execute the account. Your notice must
be postmarked on or before the 10th day after the day you executed the
account. To revoke the account, mail or deliver the revocation to:
First ING Life Insurance Company of New York
Customer Service Center
P.O. Box 173778
Denver, Colorado 80217-3778
1-800-249-9099
3. How may I make contributions to my IRA?
You may make annual contributions to your IRA from your own earnings, or
those of your spouse if you are not employed, or you may make special
rollover contributions of distributions from other qualified retirement
plans, including other IRAs. In addition, your employer may establish for
you an IRA known as a "Simplified Employee Pension" (SEP) plan.
4. How much may I contribute annually?
You may contribute annually up to 100% of your compensation or earnings
from self-employment, up to a maximum of $2,000. If your spouse is not
employed, he or she may open a separate IRA. The combined total that may be
contributed to both IRAs is the lesser of 100% of your compensation or
earnings from self-employment, or $4,000. You may divide your contribution
between the IRAs in any way, provided that no more than $2,000 is
contributed to either IRA for any year. (You and your spouse must file a
joint return in order to establish a spousal IRA.) In the case of a SEP,
your employer may contribute annually up to 15% of your compensation, to a
maximum of $30,000. If you participate in a SEP, you may also establish
your own IRA. Rollover contributions are not subject to the annual limits.
<PAGE>
5. How much of my annual contribution may I deduct?
The amount of your deduction depends on whether you or your spouse are
covered by a retirement plan at work including a SEP, and on your level of
income. Whether you are covered by a retirement plan at work will be
reported on your Form W-2. For any year before you turn 70-1/2, if you are
not covered by a retirement plan at work, you may deduct the entire amount
of your IRA (and spousal IRA) contributions (up to the maximum contribution
limits). However, if you are covered by a retirement plan at work, the
amount of your IRA contribution that you may deduct depends upon your
income for federal tax purposes. If your "modified adjusted gross income"
shown on your tax return exceeds certain levels ($25,000 if single, $40,000
if married filing jointly), your deduction may be limited or eliminated
(above $35,000 if single, $50,000 if married filing jointly). These rules
are quite complicated. Refer to IRS Publication 590, or 560 regarding SEPs,
or consult your tax advisor for further detail. Even if your deduction is
limited, you may still contribute to your IRA, up to your maximum
contribution limit, on a nondeductible basis.
6. When may I contribute?
You may make your regular IRA contribution for any year not later than the
due date for filing your tax return for the year (not including
extensions). However, rollover IRA contributions are subject to special
limitations on timing discussed below.
7. What if I contribute too much?
There is a 6% penalty tax on any amount you contribute to your IRAs in
excess of your annual contribution limit (except in the case of a rollover
contribution). This may happen, for example, if you contribute to more than
one IRA or contribute during or after the year in which you turn 70-1/2.
The 6% penalty for any "excess contribution" applies for each year until
the excess amount is withdrawn or used up. If the excess contribution is
withdrawn before you are required to file your tax return for the year in
which it was made, there will be no penalty, although you will have
additional tax on any earnings on the excess amount. Excess contributions
for one year may be carried forward and deducted in the next year but the
6% penalty will apply.
8. Who may establish a First ING Life Insurance Company of New York (First ING
Life) Individual Retirement Annuity Account?
A First ING Life Individual Retirement Annuity Account may be established
by any individual over age 18.
9. What is a rollover contribution?
A rollover contribution is a special contribution method that allows you to
avoid immediate taxation on a qualifying distribution from a retirement
plan or an IRA. However, the rollover contribution must satisfy the
definition of "Eligible Rollover Distribution." See paragraph 10, below,
for requirements.
Generally, any distribution that you receive from a qualified plan will
qualify as an Eligible Rollover Contribution unless the distribution
represents (1) a required minimum distribution or (2) one of a series of
equal payments to you for life (or over your life expectancy or the
combined life expectancies of you and your beneficiary). You cannot roll
over a distribution of contributions you made to your employer's plan,
except for voluntary deductible contributions or pre-tax contributions made
by you to a 401(k) plan. (Voluntary deductible contributions were special
contributions
<PAGE>
available before 1987.) You may request that your employer transfer all or
any part of your Eligible Rollover Distribution directly to your IRA under
a "Direct Rollover Option."
If you have attained age 70-1/2, you may not roll over a distribution made
if the distribution was required under Code Section 401(a)(9).
If you inherit an individual retirement account, it is not eligible for
rollover into another IRA.
Within 60 days from the date the distribution is received, all or part of
the distribution, except any nondeductible contributions you have made to a
qualified plan, may be put into an IRA.
Assets of one IRA may be rolled over tax free into another IRA. However,
once an IRA has been rolled over, it may not be rolled over again into
another IRA for one year.
10. What is a "Direct Rollover Option"?
If you elect to have your Eligible Rollover Distribution paid directly to
you before you make a rollover contribution to your IRA, your employer will
be required to withhold 20% of the Eligible Rollover Distribution to be
applied as a credit toward your income taxes for the year (you may later be
entitled to a tax refund with respect to some or all of the withheld
amount). Accordingly, the amount available to be rolled over to your IRA
will be reduced by 20%, unless you choose to make it up from other
available funds. If you do not make up the difference, the amount withheld
will be treated as a taxable distribution to you. In order to avoid this
dilemma, you may instead request that your employer transfer all or any
part of your Eligible Rollover Distribution directly to your IRA as a
"Direct Rollover Option." The 20% withholding tax does not apply to any
amount that is transferred to your IRA under the Direct Rollover Option.
Your employer will provide you with information as to how to elect the
Direct Rollover Option, sometimes called a trustee-to-trustee transfer. Any
part of your Eligible Rollover Distribution not transferred by you or your
employer as a rollover must be reported by you as ordinary income in the
taxable year in which it is received. However, certain special tax
treatments like lump sum averaging may apply.
11. How do the rollover rules apply to a spouse in the event of death or
divorce?
If you receive an Eligible Rollover Distribution as a death benefit from a
qualified retirement plan in which your spouse participated, you may make a
rollover contribution of all or any portion of the distribution in the same
manner that your spouse may have elected. However, your IRA may not be
treated as a "conduit IRA" (see below) which you may later roll over into
another qualified plan. If you receive an Eligible Rollover Distribution
from your spouse's qualified retirement plan under a "qualified domestic
relations order" in connection with a divorce, you will be eligible to use
the rollover rules in the same manner as your ex-spouse.
12. What is a "conduit" IRA?
If you receive an Eligible Rollover Distribution from your employer's
qualified retirement plan and want to roll it over into another qualified
retirement plan of your new employer, but are not yet eligible to
participate in the new plan, you may roll over the distribution into an IRA
(subject to all of the rollover rules summarized above) and, when you are
finally eligible to participate in your new employer's plan, you may roll
over the amount from your IRA. In order to qualify your IRA as a conduit
IRA, you may not make regular annual contributions to the IRA or make any
other rollover contribution that will not later be eligible for rollover
into your new employer's plan. Instead, you should establish separate IRAs.
13. What will happen to my contribution?
<PAGE>
Your contribution will be used to purchase a deferred variable annuity
Contract from First ING Life Insurance Company. Your interest in the
Contract is nonforfeitable and nontransferable.
14. What happens if I borrow on the Contract or invest part of my IRA in
collectibles?
If you borrow on the Contract or pledge the Contract or your benefits under
the Contract as security for a loan, your IRA will cease to be qualified
and the value of your Contract will have to be included in your income for
that year for tax purposes. If you are under age 59-1/2, your federal
income tax also will be increased by a penalty equal to 10% of the value of
the Contract that is included in your income. If you invest any part of an
IRA in collectibles, it will be considered a distribution in the amount of
the cost of the collectible.
15. Is there any other way I can endanger the qualification of my IRA?
If you or your beneficiaries commit a prohibited transaction with respect
to your IRA assets under the plan, your IRA will be disqualified with the
same result and penalty described in Question 14. Borrowing money on your
annuities is an example of a prohibited transaction.
16. How are distributions made from an IRA?
Distributions are made in a single lump sum payment, in annuity payments
for your life, in annuity payments for the joint lives of you and your
beneficiary, or in annuity payments for a period certain.
17. When do distributions begin?
Distributions must begin not later than the first day of April following
the calendar year in which you reach age 70-1/2. Distributions should not
begin before you reach age 59-1/2 unless you die, are disabled, or ask
First ING Life for a distribution so you can transfer the value of your
Contracts to another plan.
18. What happens if I take a distribution before I reach age 59-1/2?
Unless you are disabled or die or unless the distribution is an eligible
rollover and is rolled over into another plan within 60 days, the
distribution will be included in your income for the year you received it
and you will be subject to a penalty tax equal to 10% of the value of the
distribution.
19. What constitutes disability under the Contract?
Under the Contract, disability means an inability to engage in any
substantial gainful activity because of a physical or mental impairment
that can be expected to result in death or to be of long and indefinite
duration. Your disability for purposes of the Contract must be determined
by a competent physician and proof must be furnished to First ING Life.
20. Are there any other tax penalties to which my IRA can be subjected?
A penalty tax of 50% is attached if distribution is not commenced by the
required date under the law and under the distribution provisions of the
plan. The recipient of the distribution must pay this penalty tax. A
penalty tax of 50% also is imposed if a certain minimum level of
distributions is not maintained. Once you reach age 70-1/2, the minimum
amount that is required to be distributed each year is equal to the
remaining balance of your account divided by the remaining number of years
of your life expectancy or the life expectancies of you and your
beneficiary. If First ING Life is unable to make distribution because it
cannot locate you or your beneficiary, First ING Life may automatically
treat your IRA as if a distribution had been made and issue a W-2.
<PAGE>
You may also be subject to a penalty tax of 15% if you receive total
distributions in any year from all of your IRAs and all other qualified
retirement plans in which you participate in excess of certain limitations
(currently $150,000 for annual annuity payments, $750,000 for lump sums,
but these amounts may be increased for future inflation).
21. What if I die?
If you die after distribution has begun, the remaining interest, if any,
will be distributed at least as rapidly as the distribution method used
prior to your death.
If you die before distribution begins, your entire interest will be
distributed as follows:
a. Within five years after the date of your death.
b. If payable to your beneficiary and you have not elected payment in a
single lump sum, your interest will be paid over the life of your
beneficiary or a period certain not longer than the life expectancy of
your beneficiary beginning no later than one year after the date of your
death.
c. If your beneficiary is your surviving spouse, your spouse may elect to
receive payments for life or over a period certain not exceeding the
life expectancy of your surviving spouse. The payment may begin on any
date prior to the date you would have reached age 70-1/2. The surviving
spouse may accelerate these payments at any time.
d. If your beneficiary is your surviving spouse, your spouse may treat the
account as his own individual retirement arrangement.
22. What are the federal income tax aspects of my distribution?
Retirement funds accumulated in an IRA are taxable to you when distributed
as described below. The special qualifying lump sum distribution treatment
afforded to distributions from certain types of retirement plans is not
available for an IRA distribution. This rule applies even if the original
contribution to the IRA was a rollover contribution that would have
qualified for special treatment if you had not rolled the lump sum
distribution over into an IRA.
Because nondeductible IRA contributions are made using income that has
already been taxed, the portion of an IRA distribution consisting of
nondeductible contributions will not be taxed again when received by you.
If you make any nondeductible IRA contributions, each distribution from
your IRA will consist of a nontaxable portion (return of nondeductible
contributions) and a taxable portion (return of deductible contributions,
if any, and account earnings).
You must maintain your own records of your nondeductible contributions in
order to avoid double taxation upon distribution.
Thus, you may not take a distribution that is entirely tax-free. The
following formula is used to determine the taxable portion of your
distributions for a taxable year:
Remaining
Nondeductible Total Nontaxable
Contributions X Distributions = Distributions
Year-end Total IRA (for the year) (for the year)
Account Balances
<PAGE>
To figure the year-end total IRA account balance, you treat all of your
IRAs as a single IRA. This includes all regular IRAs, as well as Simplified
Employee Pension (SEP) IRAs, and Rollover IRAs. You also add back the
distributions taken during the year.
Example: An individual makes the following contributions to his or her
IRAs:
<TABLE>
<CAPTION>
Year Deductible Nondeductible
---- ---------- -------------
<S> <C> <C> <C>
1991 $2,000
1992 1,800
1993 1,000 $1,000
1994 600 1,400
---- ---------- -------------
$5,400 $2,400
Deductible Contributions: $5,400
Nondeductible Contributions: $2,400
Earnings on IRAs: $1,200
Total Account Balance of IRAs as of 12/31/94
(including distributions in 1995) $9,000
</TABLE>
In 1995 the individual takes a distribution of $3,000. The total account
balance in the IRAs on 12/31/95 including 1995 distributions is $9,000. The
nontaxable portion of the distributions for 1995 is figured as follows:
Total nondeductible contributions $2,400
Total account balance in the IRAs $9,000 x $3,000 = $800
times distributions
Thus $800 of the $3,000 distribution in 1995 will not be included in the
individual's taxable income. The remaining $2,200 will be taxable for 1995.
23. Can I terminate my IRA?
You may terminate your IRA at any time by notifying First ING Life
Insurance Company of New York in writing that the Contract is to be
terminated.
24. Has the First ING Life Individual Retirement Annuity been approved by the
Internal Revenue Service?
The First ING Life Individual Retirement Annuity has been approved as to
form by the Internal Revenue Service. Approval as to form by the IRS of an
IRA does not represent a determination of the merits of investing in the
IRA.
25. Must I file anything with the IRS?
If you make nondeductible IRA contributions in any year, you must report
the amount of such contributions on Form 8606 filed with your tax return
for the year. In addition, you must file Form 5329 for any year in which
you have made an excess contribution, received a premature distribution
subject to the 10% excise tax, or received an insufficient or excess
distribution.
26. Where can I get additional information?
<PAGE>
Additional information can be obtained from any District Office of the
Internal Revenue Service.
27. If I make contributions to my IRA, how will it be determined how much I
will have accumulated by the time I retire or if I decide to withdraw my
funds during the first five years?
The amount of your Accumulation Value is determined by the contributions
you have made, withdrawals taken, administrative charges, the investment
performance of the Divisions in which your funds are invested, mortality
and expense risk charges, and transaction charges which may be incurred as
a result of a requested transaction. Due to the variable nature of the
Contract, the amount of your Accumulation Value may increase or decrease on
any day, and the growth in value of the account is neither guaranteed nor
projected.
For this variable annuity, assuming you make (1) level annual contributions
in the amount of $1,000 on the first day of each Contract year, (2) a
rollover contribution of $1,000 on the first day of the year and no other
contributions, or (3) a rollover contribution of $1,000 on the first day of
each year, an annual administrative charge in the amount of $30 will be
deducted from your Accumulation Value at the end of each Contract year. The
amount of each annual contribution is added to your Accumulation Value and
invested in the options which you have selected.
Each investment Division of the Variable Account will experience a unique
rate of return based upon the underlying mutual funds in which it is
invested. A daily charge is deducted from the amount of your Accumulation
Value which is invested in the Variable Account to compensate First ING
Life for mortality and expense risks we assume under the Contract as well
as to cover administrative costs associated with this Contract. This daily
charge is at the rate of 0.003836% (equivalent to an annual rate of 1.40%)
on the assets in the Divisions of the Variable Account.
The Cash Surrender Value is the amount of money which is available to you
at any time upon a surrender of the Contract. The amount of your Cash
Surrender Value is your Accumulation Value less surrender charges, taxes
and the administrative charge of $30. An explanation of each of these
charges follows.
Surrender Charge
This charge is calculated as a percentage of the Purchase Payments
withdrawn. The percentage is based on the number of anniversaries since
the Contract year in which each payment was made.
<TABLE>
<CAPTION>
Anniversaries Since Surrender Charge as a
Purchase Payment Percentage of Purchase
Was Made Payment Withdrawn
<S> <C>
0 7%
1 6%
2 5%
3 4%
4 3%
5 2%
6+ 0%
</TABLE>
Taxes on Purchase Payments
<PAGE>
Some states and localities charge a tax on Purchase Payments. This tax can
range from 0% to 3.5% of the Purchase Payment (5% for the Virgin Islands).
The charge depends on the Annuitant's state of residence.
Taxes on Purchase Payments are generally incurred as of the Annuity Date,
and we deduct the charge for taxes on Purchase Payments from your
Accumulation Value as of the Annuity Date. Some jurisdictions impose a tax
on Purchase Payments at the time the Purchase Payments are paid, regardless
of the Annuity Date. In those states, our current practice is to advance
the payment of your taxes on Purchase Payments and charge it against your
Accumulation Value either upon surrender of the Contract, payment of Death
Proceeds, or upon the Annuity Date. We reserve the right to deduct any
state and local taxes on Purchase Payments from your Accumulation Value at
the time such tax is due.
Excess Transfer Charge
We allow you 12 free transfers among Divisions per Contract Year during the
Accumulation Period. For each additional transfer, we will charge you $25
at the time each transfer is processed.
After the Annuity Date, only four transfers each Contract Year are allowed,
and no transfer charge will be deducted.
The above represents a brief summary of the tax consequences of maintaining an
IRA. For more information, consult your personal tax advisor or refer to
Publication 590, or 560 regarding SEPs, which is available on request from the
Internal Revenue Service.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE EXCHEQUER VARIABLE ANNUIT
A FLEXIBLE PREMIUM DEFERRED COMBINATION
FIXED AND VARIABLE ANNUITY CONTRACT
ISSUED BY
FIRST ING LIFE INSURANCE COMPANY OF NEW YORK
AND
FIRST ING LIFE SEPARATE ACCOUNT A1
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. THE INFORMATION
CONTAINED HEREIN SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS FOR THE FIRST
ING LIFE INSURANCE COMPANY OF NEW YORK EXCHEQUER DEFERRED COMBINATION FIXED AND
VARIABLE ANNUITY CONTRACT WHICH IS REFERRED TO HEREIN.
THE PROSPECTUS SETS FORTH INFORMATION THAT A PROSPECTIVE INVESTOR OUGHT TO KNOW
BEFORE INVESTING. FOR A COPY OF THE PROSPECTUS, SEND A WRITTEN REQUEST TO FIRST
ING LIFE INSURANCE COMPANY OF NEW YORK, CUSTOMER SERVICE CENTER, OR TELEPHONE 1-
800-249-9099.
TABLE OF CONTENTS
<TABLE>
<S> <C>
FIRST ING LIFE 2
THE ADMINISTRATOR 2
PERFORMANCE INFORMATION 2
SEC YIELD FOR THE DIVISION INVESTING IN THE FIDELITY VIP MONEY MARKET PORTFOLIO 2
SEC STANDARD AVERAGE ANNUAL TOTAL RETURN FOR NON-MONEY MARKET DIVISIONS 3
ACCUMULATION UNIT VALUE 3
DETERMINATION OF ANNUITY PAYOUTS 4
IRA INCOME PROGRAM 6
OTHER INFORMATION 7
FINANCIAL STATEMENTS 7
</TABLE>
DATE OF PROSPECTUS: __________ ____, 1997
DATE OF STATEMENT OF ADDITIONAL INFORMATION: __________ ____, 1997
<PAGE>
FIRST ING LIFE
First ING Life's parents include ING America Insurance Holdings, Inc., a
Delaware corporation whose principal business is to act as the holding company
for ING Groep, N.V.'s U.S. insurance companies.
First ING Life's indirect intermediate parents, ING Insurance International B.V.
and ING Verzekeringen N.V., are Dutch insurance and financial corporations.
First ING Life's ultimate parent, ING Groep, N.V., is a Dutch insurance and
financial corporation primarily engaged in banking and insurance services which
include life and non-life insurance, life reinsurance, funds transfer services,
savings plans, investments in securities and other capital market instruments,
lending, mortgages, leasing, investment banking, debtor finance, debt conversion
and international project management, property development, finance and
management.
First ING Life acts as its own custodian for the Variable Account, and its
affiliate, ING America Equities, Inc., is the principal underwriter and
distributor of the Contracts in a continuous offering. The aggregate amount of
underwriting commissions paid to the principal underwriter during the fiscal
year ended December 31, 1996 was $50,855.
THE ADMINISTRATOR
Financial Administrative Services Corporation and its affiliate, Great-West Life
& Annuity Insurance Company, have an Administrative Services Agreement with
First ING Life. Financial Administrative Services Corporation or its affiliate,
Great-West Life & Annuity Insurance Company, provide administrative services for
all of First ING Life's variable annuity Contracts, such as Contract
underwriting and issue, Owner service and the administration of the Variable
Account.
PERFORMANCE INFORMATION
Performance information for the Divisions of the Variable Account, including the
total return of the Divisions, may appear in reports or promotional literature
to current or prospective Owners. Negative values are denoted by parentheses.
Performance information for measures other than total return do not reflect
surrender charges, which can have a maximum level of 7% of Purchase Payments,
and any applicable tax on Purchase Payments, currently ranging from 0% to 3.5%
(5% in the Virgin Islands).
See Appendix B, Performance Information, in the Prospectus for a discussion of
the types of performance information that may be published for the Divisions.
SEC YIELD FOR THE DIVISION INVESTING IN THE FIDELITY VIP MONEY MARKET PORTFOLIO
The yield and effective yield figures are calculated by standardized methods
prescribed by rules of the Securities and Exchange Commission. Under those
methods, the yield quotation is computed by determining the net change
(exclusive of capital changes) in the value of a hypothetical pre-existing
account having a balance of one Accumulation Unit of the Division at the
beginning of the period, subtracting a charge reflecting deductions from the
account, and dividing the difference by the value of the account at the
beginning of the same period to obtain the base period return, and then
multiplying the return for a seven-day period by (365/7), with the resulting
yield carried to the nearest hundredth of one percent. Effective yield is
computed by compounding the unannualized base period return by using the
formula:
Effective Yield = [base period return + 1]/(365/7)/- 1
SEC STANDARD AVERAGE ANNUAL TOTAL RETURN FOR NON-MONEY MARKET DIVISIONS
Quotations of average annual total return for the Divisions of the Variable
Account are expressed in terms of the average annual compounded rate of return
of a hypothetical investment in a Contract over a period of 1, 5 and 10 years
(or, if less, up to the life of the Division), calculated pursuant to the
following formula:
________________________________________________________________________________
2
<PAGE>
P(1 + T)/n/ = ERV
Where:
[P] equals a hypothetical initial Purchase Payment of $1,000
[T] equals the average annual total return
[n] equals the number of years
[ERV] equals the ending redeemable value of a hypothetical $1,000 Purchase
Payment made at the beginning of the period (or fractional portion
thereof).
Fees that vary with the size of the account are included assuming an account
size equal to the Division's mean (or median) account size. The SEC requires
that an assumption be made that the Owner surrenders the entire Contract at the
end of the 1, 5 and 10 year periods (or, if less, up to the life of the
Division) for which performance is required to be calculated. This assumption
may not be consistent with the typical Owner's intentions in purchasing a
Contract and may adversely affect advertised or quoted returns.
ACCUMULATION UNIT VALUE
The calculation of the Accumulation Unit Value ("AUV") is discussed in the
Prospectus under Division Accumulation Value of each Division of the Variable
Account. The following illustrations show a calculation of a new AUV and the
purchase of Accumulation Units (using hypothetical examples):
<TABLE>
<CAPTION>
ILLUSTRATION OF CALCULATION OF ACCUMULATION UNIT VALUE
<C> <S> <C>
1) AUV for the Division at the end of the preceding Valuation Period $5.00000000
2) Net asset value per share of the Portfolio at the end of preceding Valuation Period $ 25.00
3) Net asset value per share of the Portfolio at the end of current Valuation Period $ 25.50
4) Dividends and capital gains declared and reinvested in the Portfolio
during the current Valuation Period $ 0.55
5) Charge for taxes per share in the Portfolio during the current Valuation Period $ 0.05
6) Gross investment return factor = [3) plus 4) minus 5)] divided by 2) 1.04000000
7) Less daily mortality and expense risk charge 0.00003425
8) Less daily asset based administrative charge 0.00000411
9) Accumulation Experience Factor for the current Valuation
Period = 6) minus 7) minus 8) 1.03996164
10) AUV for the Division at the end of the current Valuation Period = [1) times 9)] $5.19980822
11) Net Rate of Return for the Division during the current Valuation
Period = [9) minus 1) times 100] 3.996164%
ILLUSTRATION OF PURCHASE OF UNITS (ASSUMING NO STATE TAX ON PURCHASE PAYMENTS)
1) Purchase Payment $ 100.00
2) AUV for the Division on the effective date of purchase (see above example) $5.00000000
3) Number of Accumulation Units purchased = [1) divided by 2)] 20.000000
4) AUV for the Division on the Valuation Date following purchase (see above example) $5.19980822
5) Value of the Accumulation Units in the Division for the Valuation Date
following purchase = [3) times 4)] $ 104.00
</TABLE>
________________________________________________________________________________
3
<PAGE>
DETERMINATION OF ANNUITY PAYOUTS
For Variable Annuity Payouts, you have the option of electing either a 3% or 5%
Benchmark Total Return. The rate is elected at the same time the Variable
Annuity Payout is elected and may not be changed after the Annuity Date.
Compared to a 3% Benchmark Total Return, electing the 5% Benchmark Total Return
would mean a higher initial payment but more slowly rising or more rapidly
falling subsequent payments if actual investment experience varied from 5%. If
the actual investment rate is at the annual rate of 3% or 5%, the Annuity
Payouts will be level if you elected either 3% or 5%, respectively.
As of the Annuity Date, any Division Accumulation Value invested in the
Guaranteed Interest Division will be allocated among the Divisions of the
Variable Account in the same proportion that the Division Accumulation Value of
each Division of the Variable Account bears to the total Division Accumulation
Value of all the Divisions of the Variable Account.
The first Variable Annuity Payout for each Division of the Variable Account will
be the amount that the Proceeds will provide as of the close of business on the
Valuation Date immediately preceding the Supplementary Contract Effective Date
at the Benchmark Total Return chosen. If you have elected to receive payouts
less frequently than monthly, the payout amount is then adjusted according to
the factors in the Payouts Other Than Monthly section in the prospectus.
The initial number of Annuity Units for a Division of the Variable Account is
calculated by dividing the payout amount of that Division by the Annuity Unit
Value of that Division as of the Supplementary Contract Effective Date. The
number of Annuity Units for a Division of the Variable Account does not change
throughout the Annuity Period unless a transfer is made between Divisions of the
Variable Account or, if a Combination Annuity Payout is selected, an increase in
allocation from the Variable Annuity Payout to the Fixed Annuity Payout is made.
The total Variable Annuity Payment is the sum of the Variable Annuity Payouts
from all Divisions of the Variable Account.
Variable Annuity Payouts, after the first payout, vary in amount with the
investment experience of the Divisions of the Variable Account. The dollar
amount of each Variable Annuity Payout after the first payout is calculated by
adding the amount due for each Division of the Variable Account. The amount due
for each Division equals:
1) The number of Annuity Units for that Division; multiplied by
2) The Annuity Unit Value for that Division for the Valuation Period for which
each payout is due.
The dollar amount of each Annuity Payout after the first payout will not be
affected by variations in our expenses or mortality experience.
The Annuitant or Beneficiary may transfer all or a portion of the Annuity Units
in a Division of the Variable Account to another Division of the Variable
Account. After the transfer, the number of Annuity Units in the Division of the
Variable Account from which you are transferring will be reduced by the number
of Annuity Units transferred. The number of Annuity Units in the Division of the
Variable Account to which the transfer is made will be increased by the number
of Annuity Units transferred multiplied by:
1) The value of an Annuity Unit in the Division of the Variable Account from
which the transfer is made; divided by
2) The value of an Annuity Unit in the Division of the Variable Account to
which the transfer is made.
ANNUITY UNIT VALUE
We use an Annuity Unit Value to calculate the Variable Annuity Payouts. The
Annuity Unit Value for any later Valuation Period is:
1) The Annuity Unit Value for each Division as of the last prior Valuation
Period multiplied by the Annuity Experience Factor for that Division for
the Valuation Period for which the Annuity Unit Value is being calculated;
divided by
2) An interest factor based on the Benchmark Total Return selected. (This is
done to neutralize the Benchmark Total Return.)
- --------------------------------------------------------------------------------
4
<PAGE>
ANNUITY EXPERIENCE FACTOR
For each Division of the Variable Account, the Annuity Experience Factor
reflects the investment experience of the Portfolio in which that Division
invests and the charges assessed against that Division for a Valuation Period.
The Annuity Experience Factor is calculated as follows:
1) The net asset value of the Portfolio in which that Division invests as of
the end of the current Valuation Period; plus
2) The amount of any dividend or capital gains distribution declared and
reinvested in that Portfolio during the current Valuation Period; minus
3) A charge for taxes, if any.
4) The result of 1), 2) and 3), divided by the net asset value of that
Portfolio as of the end of the preceding Valuation Period; minus
5) The daily equivalent of the Variable Account Annual Expenses shown in the
Contract Schedule for each day in the current Valuation Period.
HYPOTHETICAL EXAMPLES
The following illustrations show, by use of hypothetical examples, the method of
determining the Annuity Unit Value and the amount of several variable Annuity
Payments based on one Division.
ILLUSTRATION OF CALCULATION OF ANNUITY UNIT VALUE
<TABLE>
<C> <S> <C>
1) Annuity Unit Value for the Division at $10.00000000
the end of the preceding Valuation
Period
2) Net asset value per share of the $ 25.00
Portfolio at the end of preceding
Valuation Period
3) Net asset value per share of the $ 25.50
Portfolio at the end of current
Valuation Period
4) Dividends and capital gains declared $ 0.55
and reinvested in the Portfolio during
the current Valuation Period
5) Charge for taxes per share in the $ 0.05
Portfolio during the current Valuation
Period
6) Gross investment return factor = [3) 1.04000000
plus 4) minus 5)] divided 2)
7) Less daily mortality and expense risk 0.00003425
charge
8) Less daily asset based administrative 0.00000411
charge
9) Annuity Experience Factor for the 1.03996164
current Valuation Period = [6) minus 7)
minus 8)]
10) Daily factor to compensate for 1.00008099
Benchmark Total Return of 3%
11) Adjusted Annuity Experience Factor for 1.03987743
the current Valuation Period = [9)
divided by 10)]
12) Annuity Unit Value at the end of the 10.39877428
current Valuation period = [1) times
11)]
</TABLE>
________________________________________________________________________________
5
<PAGE>
ILLUSTRATION OF VARIABLE ANNUITY PAYMENTS (ASSUMING NO PREMIUM TAX IS
APPLICABLE)
<TABLE>
<C> <S> <C>
1) Number of Accumulation Units at Annuity 1,000.00
Date
2) Accumulation Unit Value 12.55548000
3) Adjusted Contract value = [1) times 2)] $ 12,555.48
4) First monthly annuity payment per $ 9.63
$1,000 of adjusted Contract Value
5) First monthly annuity payment = [3) $ 120.91
times 4) divided by 1,000]
6) Annuity Unit Value 10.39877428
7) Number of Annuity Units = [5) divided 11.62726194
by 6)]
8) Assume Annuity Unit Value for second 10.50000000
month payment equals
9) Second monthly annuity payment = [7) $ 122.09
times 8)]
10) Assume Annuity Unit Value for third 10.60000000
month payment equals
11) Third monthly annuity payment = [7) $ 123.25
times 10)]
</TABLE>
IRA INCOME PROGRAM
If the Owner has an IRA Contract, we will provide payout of amounts required to
be distributed by the Internal Revenue Service unless the minimum distributions
are otherwise satisfied.
You may either provide us with the minimum required distribution, or we will
determine the amount that is required to be distributed from your Contract each
year based on the information you give us and various choices you make. The
minimum dollar amount of each distribution is $100. For purposes of calculating
the minimum distribution amount, all demand withdrawals, Systematic Income
Program partial withdrawals, and Annuity Payouts must be summed between IRA
required distribution payout dates to determine if the minimum distribution
amount has been met through these other distributions. If there have been
sufficient distributions made from the Contract during the calendar year, no
further distributions will be made for that year. If there have not been
sufficient distributions made from the Contract during the calendar year, the
remaining minimum distribution amount will be paid to the Owner. At any time
while minimum distributions are being made, if your Cash Surrender Value falls
below $2,000, we will cancel the Contract and send you the amount of the Cash
Surrender Value.
First ING Life provides the Owner with the IRA Disclosure Statement which is
attached to the Prospectus as Appendix C. The Owner specifies whether the
withdrawal amount will be based on a life expectancy calculated on a single life
basis (Owner's life only) or, if the Owner is married, on a joint life basis
(Owner's and spouse's life combined).
First ING Life calculates a required distribution amount each year based on the
Code's minimum distribution rules. We do this by dividing the Accumulation Value
as of December 31 of the prior year by the life expectancy. The life expectancy
is recalculated each year unless otherwise elected. Special minimum distribution
rules govern payouts if the Beneficiary is other than the Owner's spouse and the
Beneficiary is more than ten years younger than the Owner.
OTHER INFORMATION
Registration statements have been filed with the Securities and Exchange
Commission, with respect to the Contracts discussed in this Statement of
Additional Information. Not all of the information set forth in the registration
statements, amendments and exhibits thereto has been included in this Statement
of Additional Information. Statements contained in this Statement of Additional
Information concerning the content of the Contracts and other legal instruments
are intended to be summaries. For a complete statement of the terms of these
documents, reference should be made to the instruments filed with the Securities
and Exchange Commission.
FINANCIAL STATEMENTS
Ernst & Young LLP, independent auditors, 370 17th Street, Suite 4300, Denver, CO
80202, performs annual audits of the financial statements of First ING Life and
the financial statements of the First ING of New York Separate Account A1. The
financial statements of First ING Life, which are included in this Statement of
Additional Information, should be considered only as bearing on the ability of
First ING Life to meet its obligations under the Contract.
________________________________________________________________________________
6
<PAGE>
Financial Statements
First ING Life Insurance
Company of New York
Years ended December 31, 1996, 1995 and 1994
with Report of Independent Auditors
________________________________________________________________________________
7
<PAGE>
First ING Life Insurance Company of New York
Financial Statements
Years ended December 31, 1996, 1995 and 1994
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Auditors...... 10
Audited Financial Statements
Balance Sheets...................... 11
Statements of Operations............ 13
Statements of Stockholder's Equity.. 14
Statements of Cash Flows............ 15
Notes to Financial Statements....... 16
</TABLE>
________________________________________________________________________________
8
<PAGE>
Report of Independent Auditors
Board of Directors and Stockholder
First ING Life Insurance Company of New York
We have audited the accompanying balance sheets of First ING Life Insurance
Company of New York (a wholly-owned subsidiary of Security Life of Denver
Insurance Company) as of December 31, 1996 and 1995, and the related statements
of operations, stockholder's equity, and cash flows for each of the three years
in the period ended December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of First ING Life Insurance
Company of New York at December 31, 1996 and 1995, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Denver, Colorado
April 11, 1997
________________________________________________________________________________
9
<PAGE>
First ING Life Insurance Company of New York
Balance Sheets
(Dollars In Thousands)
<TABLE>
<CAPTION>
DECEMBER 31
1996 1995
-------------------
<S> <C> <C>
Assets
Investments (Note 2):
Fixed maturity investments, at fair
value (amortized
cost: 1996--$17,161; 1995--$18,698) $17,162 $19,002
Short-term investments 3,997 --
-------------------
Total investments 21,159 19,002
Cash (2,129) 123
Accrued investment income 156 324
Reinsurance recoverable (Note 3):
Paid benefits 2,817 2,569
Unpaid benefits 1,804 1,584
Prepaid reinsurance premiums (Notes 3 8,326 8,838
and 4)
Deferred policy acquisition costs 51 --
Federal income taxes recoverable (Note 12 9
5)
Other assets 5 --
Separate account assets (Note 10) 673 --
Total assets $32,874 $32,449
===================
</TABLE>
See accompanying notes.
- --------------------------------------------------------------------------------
10
<PAGE>
First ING Life Insurance Company of New York
Balance Sheets
(Dollars in Thousands)
<TABLE>
<CAPTION>
DECEMBER 31
-----------
1996 1995
-------------------
<S> <C> <C>
Liabilities and Stockholder's Equity
Liabilities:
Future policy benefits (Note 3):
Life and annuity reserves $ 8,427 $ 8,921
Unpaid claims 1,804 1,583
-------------------
Total future policy benefits 10,231 10,504
Accounts payable and accrued expenses (118) 8
Indebtedness to related parties 500 156
Amounts due to reinsurers (Note 3) (1) 10
Deferred federal income taxes (Note 5) 359 421
Separate account liabilities (Note 10) 673 --
-------------------
Total liabilities 11,644 11,099
Commitments and contingent liabilities
(Notes 3 and 7)
Stockholder's equity (Note 6):
Common stock, $110 par value:
Authorized 10,000 shares
Issued and outstanding 10,000 shares 1,100 1,100
Additional paid-in capital 23,330 23,330
Net unrealized gains on investments 1 198
Retained earnings (deficit) (3,201) (3,278)
-------------------
Total stockholder's equity 21,230 21,350
-------------------
Total liabilities and stockholder's
equity $32,874 $32,449
===================
</TABLE>
See accompanying notes.
________________________________________________________________________________
11
<PAGE>
First ING Life Insurance Company of New York
Statements of Operations
(Dollars in Thousands)
<TABLE>
<CAPTION>
Year ended December 31
1996 1995 1994
-----------------------------
Revenues:
<S> <C> <C> <C>
Reinsurance premiums assumed $ 7,402 $ 7,426 $ 7,696
Investment product charges 5 -- --
-----------------------------
7,407 7,426 7,696
Reinsurance ceded premiums (7,402) (7,426) (7,616)
------------------------------
5 -- 80
Net investment income 1,070 789 567
Net realized gains (losses) on
investments (91) 83 (412)
------------------------------
Total revenues 984 872 235
Benefits and expenses:
Benefits:
Death benefits 11,765 6,765 7,917
Other benefits 316 206 163
Increase in policy reserves and other 2 3 80
funds
Reinsurance recoveries (12,081) (6,970) (8,080)
------------------------------
2 4 80
Expenses:
Commissions (330) (344) (402)
Insurance operating expenses 1,188 714 753
Amortization of deferred policy
acquisition costs 6 -- --
Miscellaneous expenses (2) (2) 2
------------------------------
Total benefits and expenses 864 372 433
------------------------------
Income (loss) before federal income
taxes 120 500 (198)
Federal income tax benefit (expense)
(Note 5) (43) 254 46
------------------------------
Net income (loss) $ 77 $ 754 $ (152)
==============================
</TABLE>
See accompanying notes.
________________________________________________________________________________
12
<PAGE>
First ING Life Insurance Company of New York
Statements of Stockholder's Equity
(Dollars in Thousands)
<TABLE>
<CAPTION>
Year ended December 31
1996 1995 1994
--------------------------------
<S> <C> <C> <C>
Common stock:
Balance at beginning and end of year $ 1,100 $ 1,100 $ 1,100
================================
Additional paid-in capital:
Balance at beginning of year $23,330 $14,330 $14,330
Capital contribution -- 9,000 --
--------------------------------
Balance at end of year $23,330 $23,330 $14,330
================================
Net unrealized gain (loss) on
investments:
Balance at beginning of year $ 198 $ (491) $ --
Adjustment to beginning balance for
change in accounting method used
for investments net of $10 tax
benefit (Note 1) -- -- 18
Net change in unrealized gain (loss) on
investments, net of tax (197) 689 (509)
--------------------------------
Balance at end of year $ 1 $ 198 $ (491)
================================
Retained earnings (deficit):
Balance at beginning of year $(3,278) $(4,032) $(3,880)
Net income (loss) 77 754 (152)
--------------------------------
Balance at end of year $(3,201) $(3,278) $(4,032)
================================
Total stockholder's equity $21,230 $21,350 $10,907
================================
</TABLE>
See accompanying notes.
________________________________________________________________________________
13
<PAGE>
First ING Life Insurance Company of New York
Statements of Cash Flows
(Dollars in Thousands)
<TABLE>
<CAPTION>
Year ended December 31
----------------------
1996 1995 1994
-------------------------------
Operating Activities
<S> <C> <C> <C>
Net income (loss) $ 77 $ 754 $ (152)
Adjustments to reconcile net income
(loss) to net cash provided (used) by
operating activities:
Increase (decrease) in future policy
benefits (895) (513) 423
Net increase (decrease) in federal
income taxes 40 524 (107)
Increase (decrease) in accounts
payable, accrued expenses, and
amounts due to reinsurers (137) (858) 392
Decrease (increase) in accrued
investment income 168 (229) 103
Increase in reinsurance recoverable (468) (2,160) (316)
Decrease in prepaid reinsurance
premiums 512 188 47
Net realized (gain) loss on sale of
investments 91 (83) 412
Policy acquisition costs deferred (57) -- --
Amortization of deferred policy
acquisition costs 6 -- --
Other, net 23 57 97
-------------------------------
Net cash provided (used) by operating
activities (640) (2,320) 899
Investing Activities
Sales of fixed maturity investments,
available-for-sale 15,904 1,075 9,698
Maturities of fixed maturity
investments, available-for-sale 15 750
Purchase of fixed maturity investments,
available-for-sale (14,501) (11,002) (8,277)
Short-term investments, net (3,997) -- --
-------------------------------
Net cash provided (used) by investing
activities (2,579) (9,177) 1,421
Financing Activities
Increase (decrease) in indebtedness to
related parties 344 (142) 256
Capital contribution -- 9,000 --
Receipts from interest sensitive
products credited to
policyholder account balances 648 -- --
Return of policyholder account balances
on interest sensitive policies (25) -- --
-------------------------------
Net cash provided by financing
activities 967 8,858 256
-------------------------------
Net increase (decrease) in cash (2,252) (2,639) 2,576
Cash at beginning of year 123 2,762 186
-------------------------------
Cash at end of year $ (2,129) $ 123 $ 2,762
===============================
</TABLE>
See accompanying notes.
________________________________________________________________________________
14
<PAGE>
First ING Life Insurance Company of New York
Notes to Financial Statements
December 31, 1996
1. Significant Accounting Policies
Nature of Operations
First ING Life Insurance Company of New York (the Company) is a stock life
insurance company originally organized under the laws of the State of New York
in 1973 as the Urbaine Life Reinsurance Company. It changed its name to First
ING Life Insurance Company of New York in 1994. The Company is a wholly-owned
subsidiary of Security Life of Denver Insurance Company (Security Life).
Security Life is a wholly-owned subsidiary of ING America Insurance Holdings,
Inc., an indirectly owned subsidiary of ING Groep, N.V. of the Netherlands. The
Company is licensed to do business in twenty states and in the District of
Columbia. Currently, the Company operates in two product markets:
. The Company assumes closed blocks of business from various insurance
companies, which it then retrocedes to other reinsurers. The Company
receives compensation in the form of an inforce-based fee for administering
these reinsurance contracts. The contracts are primarily comprised of
traditional life policies, with some accident and health business.
. During 1996, the Company entered the direct variable annuity insurance
market in the state of New York. Most of the variable business is
transferred to a Separate Account.
The significant accounting policies followed by the Company that materially
affect the financial statements are summarized below:
Basis of Presentation
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles (GAAP), which differ from statutory
accounting practices prescribed or permitted by state insurance regulatory
authorities.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
________________________________________________________________________________
15
<PAGE>
First ING Life Insurance Company of New York
Notes to Financial Statements (continued)
1. Significant Accounting Policies (Continued)
Accounting Changes
In May 1993, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities. The Company adopted the provisions of the new
standard for investments held as of or acquired after January 1, 1994. The
cumulative effect as of January 1, 1994 of adopting FASB Statement 115 had no
impact on income. The opening balance of stockholder's equity was increased by
$18,000 (net of $10,000 in deferred income taxes) to reflect the net unrealized
holding gains on securities classified as available-for-sale previously carried
at amortized cost.
Investments
Investments are presented on the following bases:
The carrying value of fixed maturities depends on the classification of the
security: securities held-to-maturity, securities available-for-sale, and
trading securities. Management determines the appropriate classification of debt
securities at the time of purchase and reevaluates such designation as of each
balance sheet date.
Debt securities not classified as held-to-maturity or trading are classified as
available-for-sale. Available-for-sale securities are stated at fair value,
with the unrealized gain or loss, net of tax, reported in a separate component
of stockholder's equity.
The Company does not hold debt securities classified as held-to-maturity or
trading.
The amortized cost of debt securities is adjusted for amortization of premiums
and accretion of discounts to maturity, or in the case of mortgage-backed
securities, over the estimated life of the security. Such amortization is
included in interest income from investments. Interest is included in net
investment income as earned.
________________________________________________________________________________
16
<PAGE>
First ING Life Insurance Company of New York
Notes to Financial Statements (continued)
1. Significant Accounting Policies (Continued)
Realized gains and losses, and declines in value judged to be other-than-
temporary are recognized in net income. The cost of securities sold is based on
the specific identification method.
Recognition of Premium Revenues
Premiums for traditional life insurance products, which include those products
with fixed and guaranteed premiums and benefits and consist principally of whole
life insurance policies, are recognized as revenue over the premium-paying
period.
Revenues for investment products consist of policy charges for the cost of
insurance, policy administration charges, and surrender charges assessed against
policyholder account balances during the year.
Future Policy Benefits
The liabilities for traditional life and accident and health benefits and
expenses are developed by actuarial methods and are determined based on
published tables using statutorily specified interest rates and valuation
methods that will provide, in the aggregate, reserves that are greater than or
equal to the minimum or guaranteed policy cash value or the amounts required by
law. Interest rates range from 3% to 6% at both December 31, 1996 and 1995.
The liabilities calculated using this method are not materially different than
liabilities calculated using generally accepted accounting principles.
Benefit reserves for Separate Account annuity contracts (including interest
sensitive products) and investment products are computed under a retrospective
deposit method and represent contract account balances before applicable
surrender charges. Contract benefits and claims that are charged to expense
include benefits and claims incurred during the year in excess of related
contract account balances. Interest crediting rates for amounts invested in the
general account were 4.6% during 1996.
________________________________________________________________________________
17
<PAGE>
First ING Life Insurance Company of New York
Notes to Financial Statements (continued)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
UNPAID CLAIMS
The liabilities for unpaid claims include estimates of amounts due on reported
claims and claims that have been incurred but were not reported as of December
31. Such estimates are based on actuarial projections applied to historical
claim payment data. Such liabilities are reasonable and adequate to discharge
the Company's obligations for claims incurred but unpaid as of December 31.
FEDERAL INCOME TAXES
Deferred federal income taxes have been provided or credited to reflect
significant temporary differences between income reported for tax and financial
reporting purposes.
CASH FLOW INFORMATION
Cash includes cash on hand and demand deposits. No interest was paid in 1996,
1995, and 1994.
In accordance with the Company's cash management policy of maximizing the amount
of funds invested in income-earning assets, the Company routinely anticipates
the timing and amount of future cash flows. This policy frequently results in
the existence of negative cash book balances.
DEFERRED POLICY ACQUISITION COSTS
Commissions and other costs of acquiring investment products that vary with and
are primarily related to the production of new business have been deferred. For
investment products, acquisition costs are being amortized generally in
proportion to the present value (using the assumed crediting rate) of expected
gross margins from surrender charges and investment, mortality, and expense
margins. This amortization is adjusted retrospectively when estimates of
current or future gross profits to be realized from a group of products are
revised.
________________________________________________________________________________
18
<PAGE>
First ING Life Insurance Company of New York
Notes to Financial Statements (continued)
1. Significant Accounting Policies (continued)
Pending Accounting Standard
During 1996, the FASB issued Statement No. 125, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities, which requires
an entity to recognize the financial and servicing assets it controls and the
liabilities it has incurred and to derecognize financial assets when control has
been surrendered in accordance with the criteria provided in the Statement. The
Company will apply the new rules prospectively to transactions beginning in the
first quarter of 1997. Based on current circumstances, the Company believes the
application of the new rules will not have a material impact on the financial
statements.
Reclassifications
Certain amounts in the 1994 and 1995 financial statements have been reclassified
to conform with the 1996 presentation.
2. Investments
The amortized cost and fair value of investments in fixed maturities are as
follows at December 31, 1996 and 1995:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
1996 Available-for-Sale:
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies $ 6,060 $ 71 $ 7 $ 6,124
Corporate securities 9,116 36 97 9,055
Other asset-backed securities 1,985 1 3 1,983
--------------------------------------------
$17,161 $108 $107 $17,162
============================================
</TABLE>
________________________________________________________________________________
19
<PAGE>
First ING Life Insurance Company of New York
Notes to Financial Statements (continued)
2. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
1995 Available-for-Sale:
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies $12,105 $252 $1 $12,356
Corporate securities 3,300 23 6 3,317
Other asset-backed securities 3,293 36 - 3,329
--------------------------------------------
$18,698 $311 $7 $19,002
============================================
</TABLE>
The amortized cost and fair value of investments in fixed maturities at December
31, 1996, by contractual maturity, are shown in the following table. Expected
maturities will differ from contractual maturities because borrowers may have
the right to call or prepay obligations with or without call or prepayment
penalties.
<TABLE>
<CAPTION>
AMORTIZED FAIR
COST VALUE
------------------------
<S> <C> <C>
Available-for-sale:
Due in one year or less $ - $ -
Due after one year through five years 8,194 8,232
Due after five years through ten years 2,995 2,956
Due after ten years 3,987 3,991
---------------------------
15,176 15,179
Other asset-backed securities 1,985 1,983
---------------------------
Total available-for-sale $17,161 $17,162
===========================
</TABLE>
________________________________________________________________________________
20
<PAGE>
First ING Life Insurance Company of New York
Notes to Financial Statements (continued)
2. INVESTMENTS (CONTINUED)
Changes in unrealized gains (losses) on investments in fixed maturities for the
years ended December 31 are summarized as follows:
<TABLE>
<CAPTION>
1996 1995 1994
------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Gross unrealized gains $ 108 $ 311 $ 12
Gross unrealized losses 107 7 769
------------------------------
Net unrealized gains (losses) 1 304 (757)
Deferred income tax (expense) benefit - (106) 266
------------------------------
Net unrealized gains (losses) after taxes 1 198 (491)
Less:
Balance at beginning of year 198 (491) -
Adjustment for change in accounting method - - 18
------------------------------
Change in net unrealized gains (losses)
on fixed maturities $(197) $ 689 $(509)
==============================
</TABLE>
Major categories of investment income for the years ended December 31 are
summarized as follows:
<TABLE>
<CAPTION>
1996 1995 1994
------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Fixed maturities $1,070 $797 $578
Other investments 20 - -
------------------------------
1,090 797 578
Investment expenses (20) (8) (11)
------------------------------
Net investment income $1,070 $789 $567
==============================
</TABLE>
Debt and marketable equity securities available-for-sale with fair values at the
date of sale of $15,904,000, $1,075,000 and $9,698,000 were sold during 1996,
1995 and 1994, respectively. Gross gains of $27,000, $83,000 and $0 and gross
losses of $118,000, $0 and $412,000 were realized on those sales during 1996,
1995 and 1994, respectively.
________________________________________________________________________________
21
<PAGE>
First ING Life Insurance Company of New York
Notes to Financial Statements (continued)
2. INVESTMENTS (CONTINUED)
As part of its overall investment management strategy, the Company had not
entered into any agreements to purchase or sell securities as of December 31,
1996 and 1995.
At December 31, 1996 and 1995, bonds with an amortized cost of $1,695,000 and
$1,679,000, respectively, were on deposit with various state insurance
departments to meet regulatory requirements.
3. REINSURANCE
The Company is involved in both ceded and assumed reinsurance with other
companies for the purpose of diversifying risk and limiting exposure on larger
risks. As of December 31, 1996, the Company's retention limit for acceptance of
risk on assumed life insurance policies had been set at various levels up to
$150,000. Reinsurance premiums, commissions, expense reimbursements, and
reserves related to reinsured business are accounted for on bases consistent
with those used in accounting for the original policies issued and the terms of
the reinsurance contracts.
________________________________________________________________________________
22
<PAGE>
First ING Life Insurance Company of New York
Notes to Financial Statements (continued)
3. REINSURANCE (CONTINUED)
To the extent that the retrocessionaires become unable to meet their obligations
under these treaties, the Company remains contingently liable to its
policyholders for the portion retroceded. Consequently, allowances are
established for amounts deemed uncollectible. To minimize its exposure to
significant losses from retrocessionaire insolvencies, the Company evaluates the
financial condition of its retrocessionaires. A summary of the reinsured
premiums is as follows:
<TABLE>
<CAPTION>
PERCENTAGE
ASSUMED RETROCEDED TO OF AMOUNT
GROSS FROM OTHER OTHER NET ASSUMED TO
AMOUNT COMPANIES COMPANIES AMOUNT NET
---------------------------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
As of December 31, 1996:
Life insurance in force $ - $670,345 $670,245 $ 100 N/A
=========================================================
Premiums:
Life insurance $ - $ 7,403 $ 7,403 $ - N/A
Accident and health insurance - (1) (1) - N/A
---------------------------------------------------------
Total premiums $ - $ 7,402 $ 7,402 $ - N/A
=========================================================
As of December 31, 1995:
Life insurance in force $ - $797,204 $797,106 $ 98 N/A
=========================================================
Premiums:
Life insurance $ - $ 7,426 $ 7,426 $ - N/A
Accident and health insurance - - - - N/A
---------------------------------------------------------
Total premiums $ - $ 7,426 $ 7,426 $ - N/A
=========================================================
As of December 31, 1994:
Life insurance in force $ - $942,819 $942,722 $ 97 N/A
=========================================================
Premiums:
Life insurance $ - $ 7,698 $ 7,618 $ 80 9,623%
Accident and health insurance - (2) (2) N/A
---------------------------------------------------------
Total premiums $ - $ 7,696 $ 7,616 $ 80 9,620%
=========================================================
</TABLE>
________________________________________________________________________________
23
<PAGE>
First ING Life Insurance Company of New York
Notes to Financial Statements (continued)
4. CONCENTRATIONS OF CREDIT RISK
At both December 31, 1996 and 1995, the Company held no less-than-investment-
grade bonds in its portfolio.
At December 31, 1996 and 1995, $8,323,000 and $8,600,000, respectively, of the
Company's prepaid reinsurance premiums were retroceded to one reinsurer. The
amounts represent 97% of the total prepaid reinsurance premiums at both December
31, 1996 and 1995.
5. INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Company's deferred tax assets and liabilities as of December 31 are as
follows:
<TABLE>
<CAPTION>
1996 1995
-----------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Deferred tax liabilities:
Cession adjustment $(1,250) $(1,250)
Other (7) (102)
Total deferred tax liabilities (1,257) (1,352)
-----------------------------
Deferred tax assets:
Tax-basis deferred acquisition costs 357 581
Net operating loss carryforward 541 350
-----------------------------
Total deferred tax assets 898 931
-----------------------------
Net deferred tax liabilities $ (359) $ (421)
=============================
</TABLE>
The Policyholder's Surplus Account is an accumulation of certain special
deductions for income tax purposes and a portion of the "gains from operations"
which were not subject to current taxation under the Life Insurance Tax Act of
1959. At December 31, 1996, the balance in this account for tax return purposes
was approximately $188,000. The Tax Reform Act of 1984 provides that no further
accumulations will be made in this account. If amounts accumulated in the
Policyholder's Surplus Account exceed certain limits or if distributions to the
shareholders exceed
________________________________________________________________________________
24
<PAGE>
First ING Life Insurance Company of New York
Notes to Financial Statements (continued)
5. INCOME TAXES (CONTINUED)
amounts in the Shareholder's Surplus Account, to the extent of such excess
amount or excess distributions as determined for income tax purposes, amounts in
the Policyholder's Surplus Account would become subject to income tax at rates
in effect at that time. Should this occur, the maximum tax which would be paid
at the current tax rate is $65,800. The Company does not anticipate any such
action or foresee any events which would result in such tax.
For financial reporting purposes, federal income tax benefit (expense) consists
of the following:
<TABLE>
<CAPTION>
1996 1995 1994
----------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Current $ - $726 $44
Deferred (43) (910) 2
Current year change in
valuation allowance - 438 -
-----------------------------
Federal income tax benefit (expense) $(43) $254 $46
=============================
</TABLE>
Prior to 1995, a valuation allowance had been established by the Company to
account for the fact that the full benefit of the deferred tax asset for tax-
basis deferred acquisition costs more than likely would not be fully realized.
In 1995, a change in judgment about the realization of the deferred tax asset
occurred and the valuation allowance was removed.
In 1996 and 1994, the Company's effective income tax rate does not vary
significantly from the statutory federal income tax rate. In 1995, the
Company's effective income tax rate varies from the statutory federal income tax
rate due to changes in the valuation allowance.
________________________________________________________________________________
25
<PAGE>
First ING Life Insurance Company of New York
Notes to Financial Statements (continued)
5. INCOME TAXES (CONTINUED)
As of December 31, 1996, the Company had net operating loss (NOL) carryforwards
for tax purposes of $1,547,000 which are available to offset future taxable
income. These NOLs expire as follows (dollars in thousands):
<TABLE>
<S> <C>
2008 $1,001
2011 546
----------
$1,547
==========
</TABLE>
The Company had net income tax payments (receipts) of $3,000, ($778,000), and
$61,000 during 1996, 1995 and 1994, respectively, for current income tax
payments and settlements of prior year returns.
6. STATUTORY ACCOUNTING INFORMATION AND PRACTICES
The Company prepares its statutory-basis financial statements in accordance with
accounting practices prescribed or permitted by its state of domicile.
"Prescribed" statutory accounting practices include state laws, regulations and
general administrative rules, as well as a variety of publications of the
National Association of Insurance Commissioners (NAIC). "Permitted" statutory
accounting practices encompass all accounting practices that are not prescribed;
such practices may differ from state to state, from company to company within
the state, and may change in the future. The NAIC is currently in the process
of codifying statutory accounting practices, the result of which is expected to
constitute the only source of "prescribed" statutory accounting practices.
Accordingly, that project, which is expected to be completed in 1998, will
likely change, to some extent, prescribed statutory accounting practices, and
may result in changes to the accounting practices that insurance companies use
to prepare their statutory-basis financial statements.
The Company is required to identify those significant accounting practices that
are permitted and obtain written approval of the practice from the Insurance
Department of its state of domicile. As of December 31, 1996 and 1995, the
Company had no significant permitted accounting practices.
________________________________________________________________________________
26
<PAGE>
First ING Life Insurance Company of New York
Notes to Financial Statements (continued)
6. Statutory Accounting Information and Practices (Continued)
The NAIC prescribes Risk-Based Capital (RBC) requirements for life/health
insurance companies. At December 31, 1996, the Company exceeded all minimum
RBC requirements.
Stockholder's equity, determined in accordance with statutory accounting
practices (SAP), was $21,427,000 and $21,441,000 at December 31, 1996 and 1995,
respectively. Net income determined in accordance with SAP was $175,000,
$1,154,000, and $126,000 for the years ended December 31, 1996, 1995 and 1994,
respectively.
The Company is required to maintain statutory paid-in capital of at least
$1,000,000 and paid-in surplus of at least 50% of the paid-in capital in its
state of domicile. The Company exceeded its minimum statutory capital and
surplus requirements at December 31, 1996. Additionally, the amount of
dividends which can be paid by the Company to its stockholder is subject to
prior approval by the Insurance Department of its state of domicile based on the
Department's review of the Company's financial condition.
7. Commitments and Contingent Liabilities
The Company is not currently a party to any pending or threatened lawsuits and
is not aware of any material contingent liabilities.
8. Financing Arrangement
The Company is the beneficiary of two separate renewable letters of credit
totaling $12,237,000 that were established in accordance with the terms of
certain reinsurance agreements. These letters of credit expired on December 31,
1996 and were renewed in 1997. The letters of credit were unused during both
1996 and 1995.
9. Related Party Transactions
The Company obtains administrative, investment and other operating services from
its parent. Amounts expensed for these services were $621,000, $41,000, and
$362,000 during 1996, 1995 and 1994, respectively.
________________________________________________________________________________
27
<PAGE>
First ING Life Insurance Company of New York
Notes to Financial Statements (continued)
9. Related Party Transactions (Continued)
In 1994 the Company entered into a reinsurance contract with its parent to
assume the reserves on a block of whole life insurance policies. Reserves were
$85,000 and $83,000 at December 31, 1996 and 1995, respectively.
10. Separate Accounts
Separate account assets and liabilities represent funds segregated by the
Company for the benefit of certain contractholders who bear the investment risk.
The separate account assets and liabilities are carried at fair value. Revenues
and expenses on the separate account assets and related liabilities equal the
benefits paid to the separate account contractholders and are excluded from the
amounts reported in the statements of operations except for fees charged for
administration services and mortality risk.
11. Fair Value of Financial Instruments
In cases where quoted market prices are not available, fair values are based on
estimates using present value or other valuation techniques. Those techniques
are significantly affected by the assumptions used, including the discount rate
and estimates of future cash flows. In that regard, the derived fair value
estimates cannot be substantiated by comparison to independent markets and in
many cases could not be realized in immediate settlement of the instrument.
Accordingly, the aggregate fair value amounts presented do not represent the
underlying value of the Company.
Life insurance liabilities that contain mortality risk and all nonfinancial
instruments are excluded from the disclosure requirements. However, the fair
values of liabilities under all insurance contracts are taken into consideration
in the Company's overall management of interest rate risk, such that the
Company's exposure to changing interest rates is minimized through the matching
of investment maturities with amounts due under insurance contracts.
________________________________________________________________________________
28
<PAGE>
First ING Life Insurance Company of New York
Notes to Financial Statements (continued)
11. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31
1996 1995
--------------------------------------
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
--------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Fixed maturities $17,162 $17,162 $19,002 $19,002
Short-term investments 3,997 3,997 - -
LIABILITIES
Individual annuities 16 15 - -
</TABLE>
The following methods and assumptions were used by the Company in estimating the
"fair value" disclosures for financial instruments:
FIXED MATURITIES: The fair values for fixed maturities are based on quoted
market prices, where available. For fixed maturities not actively traded,
fair values are estimated using values obtained from independent pricing
services or, in the case of collateralized mortgage obligations, are estimated
by discounting expected future cash flows using a current market rate
applicable to the yield, credit quality, and maturity of the investments.
LETTERS OF CREDIT: The Company is the beneficiary of two separate renewable
letters of credit totaling $12,237,000. These letters of credit have a fair
value to the Company of $0 (see Note 8).
INDIVIDUAL ANNUITIES: The fair values of the Company's deferred annuity
contracts are estimated based on the cash surrender value.
The carrying values of all other assets and liabilities approximate their fair
values.
________________________________________________________________________________
29
<PAGE>
First ING Life Insurance Company of New York
Notes to Financial Statements (continued)
12. SUBSEQUENT EVENTS
Certain divisions of the Separate Account invest in corresponding mutual fund
portfolios of The Palladian Trust. On January 24, 1997, the Company received
notification that The Palladian Trust intends to terminate the participation
agreement for the Fulcrum Fund variable annuity product effective July 24,
1997.
________________________________________________________________________________
30
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholder
First ING Life Insurance Company of New York
We have audited the financial statements of First ING Life Insurance Company of
New York (a wholly-owned subsidiary of Security Life of Denver Insurance
Company) as of December 31, 1996 and 1995, and for each of the three years in
the period ended December 31, 1996, and have issued our report thereon dated
April 11, 1997 (included elsewhere in this Registration Statement). Our audits
also included the financial statement schedule listed in Item 23 of this
Registration Statement. This schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our
audits.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
ERNST & YOUNG LLP
Denver, Colorado
April 11, 1997
________________________________________________________________________________
31
<PAGE>
SCHEDULE III
FIRST ING LIFE INSURANCE COMPANY OF NEW YORK
SUPPLEMENTARY INSURANCE INFORMATION
For the Years Ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>
1996
Individual 1996 1995 1994
Description Annuity Life Life Life
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Deferred policy acquisition cost $ 51,000 $ - $ - $ -
Future policy benefits, losses,
claims, and loss expenses 16,000 8,411,000 8,921,000 -
Unearned premiums [1] - - - -
Other policy claims and benefits
payable - 1,804,000 1,583,000 -
Premium revenue 5,000 - - -
Net investment income - - - -
Benefits, claims, losses, and
settlement expenses [3] - - - -
Amortization of deferred policy
acquisition costs 6,000 - - -
Other operating expenses 891,000 297,000 714,000 753,000
Premiums written [2] - - - -
</TABLE>
[1] N/A, as all of FING's A&H premiums are immaterial and are fully retroceded.
[2] Per the S-X instructions, this is N/A for life insurance. This information
is used to measure A&H business.
[3] $25,198 in annuity benefits were collapsed under FAS 97.
________________________________________________________________________________
32
<PAGE>
Report of Independent Auditors
Contractholders
First ING Separate Account A1 of
First ING Life Insurance Company of New York
We have audited the accompanying statement of net assets of First ING Separate
Account A1 (comprising, respectively, the GAMCO Investors, Inc. Value Portfolio
("GAMCO Value"), the GAMCO Investors, Inc. Global Interactive/Telecom Portfolio
("GAMCO Global Interactive"), the Stonehill Capital Management, Inc. Growth
Portfolio ("Stonehill Growth"), the Bee & Associates Incorporated International
Growth Portfolio ("Bee & Associates International Growth"), and the Fischer
Francis Trees & Watts, Inc. Global Strategic Income Portfolio ("Fischer Francis
Global Strategic") Divisions) as of December 31, 1996, and the related
statements of operations and changes in net assets for the year then ended.
These financial statements are the responsibility of the Separate Account's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of December 31, 1996, by
correspondence with the transfer agent. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of First ING Separate Account A1
at December 31, 1996, and the results of its operations and changes in its net
assets for the year then ended, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Denver, Colorado
April 9, 1997
________________________________________________________________________________
33
<PAGE>
First ING Separate Account A1
Statement of Net Assets
December 31, 1996
<TABLE>
<CAPTION>
BEE & FISCHER
TOTAL GAMCO ASSOCIATES FRANCIS
ALL GAMCO GLOBAL STONEHILL INTERNATIONAL GLOBAL
DIVISIONS VALUE INTERACTIVE GROWTH GROWTH STRATEGIC
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in mutual funds at
market value; combined cost
$624,057(See Note C) $ 672,775 $ 313,725 $ 81,800 $ 137,781 $ 87,069 $ 52,400
----------- ----------- ----------- ----------- ----------- -----------
Total assets 672,755 313,725 81,800 137,781 87,069 52,400
----------- ----------- ----------- ----------- ----------- -----------
LIABILITIES
Due to Security Life of Denver 1,037 438 144 218 152 85
Total liabilities 1,037 438 144 218 152 85
----------- ----------- ----------- ----------- ----------- -----------
Net assets $ 671,738 $ 313,287 $ 81,656 $ 137,563 $ 86,917 $ 52,315
=========== =========== =========== =========== =========== ===========
CONTRACT OWNER RESERVES
Reserves for redeemable annuity
contracts (See Note B) $ 671,738 $ 313,287 $ 81,656 $ 137,563 $ 86,917 $ 52,315
----------- ----------- ----------- ----------- ----------- -----------
TOTAL CONTRACT OWNER RESERVES $ 671,738 $ 313,287 $ 81,656 $ 137,563 $ 86,917 $ 52,315
=========== =========== =========== =========== =========== ===========
Number of division units outstanding
(See Note F) 27,860,970 8,279,460 14,334,490 8,357,410 5,205,830
=========== =========== =========== =========== ===========
Value per divisional unit $ 11.24 $ 9.86 $ 9.60 $ 10.40 $ 10.05
=========== =========== =========== =========== ===========
</TABLE>
See accompanying notes.
________________________________________________________________________________
34
<PAGE>
First ING Separate Account A1
Statement of Operations
Year Ended December 31, 1996
<TABLE>
<CAPTION>
BEE & FISCHER
TOTAL GAMCO ASSOCIATES FRANCIS
ALL GAMCO GLOBAL STONEHILL INTERNATIONAL GLOBAL
DIVISIONS VALUE INTERACTIVE GROWTH GROWTH STRATEGIC
----------- ----------- ----------- ----------- ----------- -----------
INVESTMENT INCOME
<S> <C> <C> <C> <C> <C> <C>
Dividends from mutual funds $ 19,501 $ 17,249 $ 397 $ - $ 1,519 $ 336
Less: Valuation period deductions
(See Note B) 4,629 2,272 668 1,033 522 134
----------- ----------- ----------- ----------- ----------- -----------
Net investment income (loss) 14,872 14,977 (271) (1,033) 997 202
----------- ----------- ----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized gains (losses) on
investments (4,999) 100 (328) 211 (2,269) (2,713)
Net unrealized gains on investments 48,718 14,303 1,022 21,024 11,971 398
----------- ----------- ----------- ----------- ----------- -----------
Net realized and unrealized gains
(losses) on investments 43,719 14,403 694 21,235 9,702 (2,315)
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $ 58,591 $ 29,380 $ 423 $ 20,202 $ 10,699 $ (2,113)
=========== =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes.
--------------------------------------------
35
<PAGE>
First ING Separate Account A1
Statement of Changes in Net Assets
Year Ended December 31, 1996
<TABLE>
<CAPTION>
BEE & FISCHER
TOTAL GAMCO ASSOCIATES FRANCIS
ALL GAMCO GLOBAL STONEHILL INTERNATIONAL GLOBAL
DIVISIONS VALUE INTERACTIVE GROWTH GROWTH STRATEGIC
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS
Net investment income (loss) $ 14,872 $ 14,977 $ (271) $ (1,033) $ 997 $ 202
Net realized gains (losses) on
investments (4,999) 100 (328) 211 (2,269) (2,713)
Net unrealized gains on investments 48,718 14,303 1,022 21,024 11,971 398
----------- ----------- ----------- ----------- ----------- -----------
Increase (decrease) in net assets
from operations 58,591 29,380 423 20,202 10,699 (2,113)
----------- ----------- ----------- ----------- ----------- -----------
CHANGES FROM PRINCIPAL
TRANSACTIONS
Contract purchase payments 635,993 280,848 85,200 140,700 77,502 51,743
Surrenders (25,198) (41) (5,139) (14,987) (4,992) (39)
Net transfers among divisions
(including the guaranteed interest
division in the general account) - 3,084 1,226 (8,225) 3,886 29
Other 2,352 16 (54) (127) (178) 2,695
----------- ----------- ----------- ----------- ----------- -----------
Increase from principal
transactions 613,147 283,907 81,233 117,361 76,218 54,428
----------- ----------- ----------- ----------- ----------- -----------
Total increase in net assets 671,738 313,287 81,656 137,563 86,917 52,315
Net assets at beginning of year - - - - - -
----------- ----------- ----------- ----------- ----------- -----------
Net assets at end of year $ 671,738 $ 313,287 $ 81,656 $ 137,563 $ 86,917 $ 52,315
=========== =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes.
- --------------------------------------------------------------------------------
36
<PAGE>
First ING Separate Account A1
Notes to Financial Statements
December 31, 1996
NOTE A. ORGANIZATION
First ING Separate Account A1 (the "Separate Account") was established by
resolution of the Board of Directors of First ING Life Insurance Company of New
York (the "Company") on March 15, 1994. The Separate Account is organized as a
unit investment trust registered with the Securities and Exchange Commission
under the Investment Company Act of 1940.
The Separate Account supports the operations of the Fulcrum Fund variable
annuity ("Fulcrum") contracts offered by the Company. The Separate Account may
be used to support other variable annuity contracts as they are offered by the
Company. The assets of the Separate Account are the property of the Company.
However, the portion of the Separate Account's assets attributable to the
contracts will not be chargeable with liabilities arising out of any other
operations of the Company.
The Separate Account currently consists of five investment divisions available
to the contractholders, each of which invests in an independently managed mutual
fund portfolio of the Palladian Trust ("Fund"). The Funds are as follows:
PORTFOLIO MANAGERS/PORTFOLIOS (FUNDS)
GAMCO Investors, Inc.
Value Portfolio
Global Interactive/Telecom Portfolio
Stonehill Capital Management, Inc.
Growth Portfolio
Bee & Associates Incorporated
International Growth Portfolio
Fischer Francis Trees & Watts, Inc.
Global Strategic Income Portfolio
________________________________________________________________________________
37
<PAGE>
First ING Separate Account A1
Notes to Financial Statements (continued)
NOTE A. ORGANIZATION (CONTINUED)
The Fulcrum contracts allow the contractholders to specify the allocation of
their purchase payments to the various Funds. They can also transfer their
account values among the Funds. The Fulcrum product also provides the
contractholders the option to allocate their purchase payments, or to transfer
their account values, to a Guaranteed Interest Division ("GID") in the Company's
general account. The GID guarantees a rate of interest to the contractholder,
and it is not variable in nature. Therefore, it is not included in the Separate
Account statements.
NOTE B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements of the Separate Account have been prepared
on the basis of generally accepted accounting principles ("GAAP"). The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
The accounting principles followed by the Separate Account and the methods of
applying those principles are presented below or in the footnotes which follow.
INVESTMENT VALUATION--THE INVESTMENTS IN SHARES OF THE FUNDS ARE VALUED AT THE
CLOSING NET ASSET VALUE (MARKET VALUE) PER SHARE AS DETERMINED BY THE FUNDS ON
THE DAY OF MEASUREMENT.
INVESTMENT TRANSACTIONS AND RELATED INVESTMENT INCOME--THE INVESTMENTS IN SHARES
OF THE FUNDS ARE ACCOUNTED FOR ON THE DATE THE ORDER TO BUY OR SELL IS
CONFIRMED. DIVIDEND INCOME AND DISTRIBUTIONS OF CAPITAL GAINS ARE RECORDED ON
THE EX-DIVIDEND DATE. REALIZED GAINS AND LOSSES FROM SECURITY TRANSACTIONS ARE
REPORTED USING THE FIRST-IN-FIRST-OUT ("FIFO") METHOD OF ACCOUNTING FOR COST.
THE DIFFERENCE BETWEEN COST AND CURRENT MARKET VALUE OF INVESTMENTS OWNED ON THE
DAY OF MEASUREMENT IS RECORDED AS UNREALIZED GAIN OR LOSS ON INVESTMENT.
VALUATION PERIOD DEDUCTIONS--CHARGES ARE MADE DIRECTLY AGAINST THE ASSETS OF THE
SEPARATE ACCOUNT DIVISIONS AND ARE REFLECTED DAILY IN THE COMPUTATION OF THE
UNIT VALUES OF THE DIVISIONS.
38
<PAGE>
First ING Separate Account A1
Notes to Financial Statements (continued)
NOTE B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
For Fulcrum contracts, a daily deduction, at an annual rate of 1.25% of the
daily asset value of the Separate Account divisions, is charged to the Separate
Account for mortality and expense risks assumed by the Company. Total mortality
and expense charges for the year ended December 31, 1996 were $4,136.
Fulcrum contracts are subject to a daily deduction, at an annual rate of .15% of
the daily asset value of the Separate Account divisions, for an asset based
administrative charge to compensate the Company for a portion of the
administrative expenses under the contract. Total asset based administrative
charges for the year ended December 31, 1996 were $493.
ANNUITY RESERVES--NONE OF THE FULCRUM CONTRACTS IN THE SEPARATE ACCOUNT HAVE
ANNUITIZED (REACHED THE ANNUITY DATE) AND ARE REDEEMABLE FOR THE NET CASH
SURRENDER VALUE OF THE CONTRACTS. THE ANNUITY RESERVES ARE RECORDED IN THE
SEPARATE ACCOUNT AT THE AGGREGATE ACCOUNT VALUES OF THE CONTRACTHOLDERS INVESTED
IN THE SEPARATE ACCOUNT DIVISIONS.
NOTE C. INVESTMENTS
Fund shares are purchased at net asset value with contract payments and
divisional transfers from other Funds. Fund shares are redeemed at net asset
value for the payment of benefits, for surrenders, for transfers to other
divisions, and for certain administrative charges by the Company, which were $0
for the year ended December 31, 1996. Distributions made by the Funds are
reinvested in the Funds.
________________________________________________________________________________
39
<PAGE>
First ING Separate Account A1
Notes to Financial Statements
NOTE C. INVESTMENTS (CONTINUED)
The following is a summary of fund shares owned as of December 31, 1996:
<TABLE>
<CAPTION>
NUMBER NET VALUE
OF ASSET OF SHARES COST OF
FUND SHARES VALUE AT MARKET SHARES
- -----------------------------------------------------------------------------
GAMCO Investors, Inc.
<S> <C> <C> <C> <C>
Value Portfolio 28,835.02 $10.88 $313,725 $299,422
Global Interactive/Telecom 8,179.98 10.00 81,800 80,778
Stonehill Capital Management, Inc.
The Growth Portfolio 12,710.39 10.84 137,781 116,757
Bee & Associates Incorporated
International Growth 8,428.74 10.33 87,069 75,098
Fischer Francis Trees & Watts, Inc.
Global Strategic Income 5,250.53 9.98 52,400 52,002
-------------------
Total $672,775 $624,057
===================
</TABLE>
For the year ended December 31, 1996, the aggregate cost of purchases (plus
reinvested dividends) and the proceeds from sales of investments were $666,986
and $37,930, respectively.
NOTE D. OTHER CONTRACT DEDUCTIONS
The Fulcrum contracts provide for certain deductions for surrender charges and
taxes from amounts paid to contractholders. Such deductions are taken after the
redemption of divisional units in the Separate Account and are not included in
the Separate Account financial statements.
NOTE E. FEDERAL INCOME TAXES
The Separate Account is not taxed separately because the operations of the
Separate Account are part of the total operations of the Company. The Company
is taxed as a life insurance company under the Internal Revenue Code. The
Separate Account is not taxed as a "Regulated Investment Company" under
subchapter "M" of the Internal Revenue Code.
- --------------------------------------------------------------------------------
40
<PAGE>
First ING Separate Account A1
Notes to Financial Statements (continued)
NOTE F. SUMMARY OF CHANGES IN UNITS
The following schedule summarizes the changes in divisional units for the year
ended December 31, 1996:
<TABLE>
<CAPTION>
INCREASE
OUTSTANDING INCREASE (DECREASE)
AT FOR FOR (DECREASE) OUTSTANDING
BEGINNING PAYMENTS DIVISIONAL FOR AT END
DIVISION OF YEAR RECEIVED TRANSFERS SURRENDERS OF YEAR
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
GAMCO Investors, Inc.
Value Portfolio 0,000 27,564.290 300.280 (3.600) 27,860.970
Global Interactive/Telecom
Portfolio 0,000 8,710.310 124.590 (555.440) 8,279.460
Stonehill Capital Management, Inc.
Growth Portfolio 0,000 16,878.790 (895.900) (1,648.400) 14,334.490
Bee & Associates Incorporated
International Growth Portfolio 0,000 8,721.290 352.490 (716.370) 8,357.410
Fischer Francis Trees & Watts, Inc.
Global Strategic Income
Portfolio 0,000 5,206.860 2.880 (3.910) 5,205.830
______________________________________________________________________________________________________
</TABLE>
41
<PAGE>
First ING Separate Account A1
Notes to Financial Statements (continued)
NOTE G. NET ASSETS
Net assets at December 31, 1996 consisted of the following:
<TABLE>
<CAPTION>
ACCUMULATED NET
ACCUMULATED NET REALIZED UNREALIZED
INVESTMENT GAINS GAINS
PRINCIPAL INCOME (LOSSES) ON ON
DIVISION TRANSACTIONS (LOSS) INVESTMENTS INVESTMENTS NET ASSETS
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
GAMCO Investors, Inc.
Value Portfolio $283,907 $14,977 $ 100 $14,303 $313,287
Global Interactive/Telecom
Portfolio 81,233 (271) (328) 1,022 81,656
Stonehill Capital Management, Inc.
Growth Portfolio 117,361 (1,033) 211 21,024 137,563
Bee & Associates Incorporated
International Growth Portfolio 76,218 997 (2,269) 11,971 86,917
Fischer Francis Trees & Watts, Inc.
Global Strategic Income Portfolio 54,428 202 (2,713) 398 52,315
--------------------------------------------------------------------
Total $613,147 $14,872 $(4,999) $48,718 $671,738
====================================================================
</TABLE>
NOTE H. SUBSEQUENT EVENT
Certain divisions of the Separate Account invest in corresponding mutual fund
portfolios of the Palladian Trust. On January 24, 1997, the Company received
notification that the Palladian Trust intends to terminate the participation
agreement for the Fulcrum Fund variable annuity product effective July 24, 1997.
________________________________________________________________________________
42
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) All required financial statements are included in Parts A or B of this
registration statement.
(b) Exhibits:
The following exhibits are filed herewith:
1. Resolutions of the Executive Committee of the Board of Directors
of First ING Life Insurance Company of New York ("First ING
Life") authorizing the establishment of the Registrant. 1/
2. Not applicable.
3. (a) First ING Life Insurance Company of New York Distribution
Agreement.2/
(b) Specimen Broker-Dealer Supervisory and Selling Agreement for
Variable Contracts.1/
4. Variable Annuity Contract (Form 1192 (VA)-NY)
________________________________________________________________________________
C-1
<PAGE>
5. Variable Annuity Contract Application (Form Q-1170)
6. (a) Articles of Incorporation of First ING Life Insurance
Company of New York 2/
(b) By-Laws of First ING Life Insurance Company of
New York.2/
7. Not Applicable.
8. Participation, Service and Administrative Agreements.3/
(a) The Alger American Fund3/
(b) Fidelity Variable Insurance Products Fund3/
(c) Fidelity Variable Insurance Products Fund II3/
(d) INVESCO Variable Investment Funds, Inc.3/
(e) Van Eck Worldwide Insurance Trust3/
(f) Form of Neuberger & Berman Advisers Management Trust
(g) Administration Services Agreement4/ between First ING
Life Insurance Company of New York and Financial
Administrative Services Corporation. 2/
9. Opinion and Consent of John R. Barmeyer as to the legality of
the securities being registered.
10. Consent of Independent Auditors.
11. None.
12. None.
13. Schedule for Computation of Performance Quotations.
14. Financial Data Schedules.
15. Powers of Attorney.
________________________________________________________________________________
C-2
<PAGE>
16. List of Affiliated Companies of First ING Life Insurance Company
of New York.
1/ Incorporated herein by reference to Pre-Effective Amendment No. 1 to the
Form N-4 Registration Statement of First ING Life Insurance Company of New
York and its First ING Life Separate Account A1, filed with the Securities and
Exchange Commission on July 31, 1995 (File Nos. 33-88794 and 811-8700).
2/ Incorporated herein by reference to Post-Effective Amendment No. 1 to the
Form N-4 Registration Statement of First ING Life Insurance Company of New
York and its First ING Life Separate Account A1, filed with the Securities and
Exchange Commission on April 23, 1996 (File Nos. 33-88794 and 811-8700).
3/ Incorporated herein by reference to Pre-Effective Amendment No. 1 to the Form
N-4 Registration Statement of First ING Life Insurance Company of New York and
First ING Life Separate Account A1 filed with the Securities and Exchange
Commission on August 13, 1996 (File Nos. 33-82890 and 811-8700).
________________________________________________________________________________
C-3
<PAGE>
Item 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
Set forth below is information regarding the directors and officers of
First ING Life Insurance Company of New York. First ING's address, and the
business address of each person named, except as otherwise noted, is Security
Life Center, 1290 Broadway, Denver, Colorado 80203-5699.
<TABLE>
<CAPTION>
Name and Principal Business Address Position and Offices with First ING
- ---------------------------------- -----------------------------------
<S> <C>
R. Glenn Hilliard Chairman of the Board
ING
North America Insurance Corporation
5780 Powers Ferry Road
Atlanta, GA 30327-4390
Stephen M. Christopher Director, President and Chief Executive
Officer, Chief Operating Officer
Stephen J. Yarina Director, Vice President, Treasurer and
Chief Financial Officer, Chief Administrative
Officer
Fred A. Deering Director
Weaver H. Gaines Director
528 Bayberry
Ocean City, NY 11770
Roger D. Roenfeldt Director
100 So. Middle Neck Rd.
Great Neck, NY 11021
Stephen K. West Director
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Thomas F. Conroy Director, President, Reinsurance and
Institutional Markets
Wayne D. Bidelman Director
Evelyn A. Bentz Director
Eugene L. Copeland Director
William S. Lutter Director, Vice President, Administration
First ING Life Insurance Company of
New York
225 Broadway, Suite 1901
New York, NY 10007
Linda B. Emory Executive Vice President and
ING Appointed Acturary
North America Insurance Corporation
5780 Powers Ferry Road
Atlanta, GA 30327-4390
John R. Barmeyer Chief Legal Officer and Corporate
Secretary
Benjamin Currier Senior Vice President, Operations
Michael B. Stevens Chief Investment Officer
ING
North America Insurance Corporation
5780 Powers Ferry Road
Atlanta, GA 30327-4390
James Livingston Senior Vice President, Chief Actuary
Carol D. Hard Senior Vice President, Variable Sales
Richard Lyons Vice President, Sales
Richard D. King Vice President, Medical Director
Amy L. Winsor Tax and Finance Officer
Sandra Forte Assistant Secretary
Shari Enger Assistant Treasurer
Shirley A. Knarr Actuarial Officer
</TABLE>
________________________________________________________________________________
C-4
<PAGE>
Item 26. Persons Controlled by or Under Common Control with First ING Life
Insurance Company of New York or Registrant
First ING Life Insurance Company of New York, the depositor of First
ING of New York Separate Account A1, is an indirect wholly owned subsidiary of
ING Groep, N.W. ("ING"). ING is a holding company made up of two sub-holding
companies, ING Verzekeringen N.V. ("ING Insurance") and ING Bank N.V. ("ING
Bank") The ING address is:
Post Office Box 810
1000 AV Amsterdam
The Netherlands
The voting shares of ING are registered in the name of a Trustee,
which under a trust agreement with ING has issued against these shares
not-voting bearer depository receipts which are listed on the stock exchanges of
Amsterdam, Antwerp, Basel, Brussels, Frankfurt, Geneva, Paris and Zurich. This
kind of trust arrangement is not uncommon among public companies in the
Netherlands and the ING Trustee's principal business is the administration of
such trust arrangements with respect to the shares of ING and the shares of
other Dutch corporations. The bearer depository receipts can be exchanged for
voting shares on an extremely limited basis under which no one share holder may
never hold more than 1% of any class of voting shares.
Although trustees formally have and exercise voting rights, these
rights are limited. For example, trustees do not have the right to elect
directors. Also, it is the general policy of the Netherlands that these
trustees follow the recommendations of the Boards of Directors and the
management of corporations and will not exercise voting rights to influence the
operations of these corporations in the normal course of events.
ING Insurance is one of the largest insurance operations in the world.
More than half of its total consolidated premium income is derived from life
insurance underwriting. ING Insurance also participates in underwriting fire,
marine and aviation, motor vehicle, accident and sickness insurance, and
professional reinsurance. ING Insurance subsidiaries are engaged in the
insurance underwriting business in Europe, North America, Latin America,
Australia, the Caribbean and Asia.
Although First ING Life Insurance Company of New York's ultimate
parent company is ING, one hundred percent of the issued and outstanding stock
is owned directly by Security Life of Denver Insurance Company ("SLD"), an
insurance company incorporated in the state of Colorado. Security Life of
Denver Insurance Company is wholly owned by ING America Insurance Holdings, Inc.
("ING America Holdings"), a holding company incorporated in the state of
Delaware. ING America Holdings is wholly owned by ING Insurance International
B.V., which is in turn wholly owned by ING Insurance. SLD's subsidiary
organizations are composed of the following:
1) Wilderness Associates, a Colorado partnership in which SLD is a
49% partner.
2) First Secured Mortgage Deposit Corp., a wholly owned Colorado
subsidiary corporation.
3) Midwestern United Life Insurance Company, a wholly owned Indiana
subsidiary corporation.
4) ING America Equities, Inc., a wholly owned Colorado subsidiary
corporation
- --------------------------------------------------------------------------------
C-5
<PAGE>
5) First ING Life Insurance Company of New York
Included herein as Exhibit 16 is a list of the U.S. holdings of ING
America Holdings as of December, 1996.
- --------------------------------------------------------------------------------
C-7
<PAGE>
Items 27. Number of Contract Owners
Not Applicable
Item 28. Indemnification
Consistent with applicable law, the corporation's bylaws provide as
follows:
Article V. Indemnification of Directors and Officers
Section 1. Indemnification. The Corporation shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending, or completed action, suit or proceeding, whether civil, criminal,
administrative, or investigative (other than an action by or in the right of
the corporation), by reason of the fact that he is or was a director, an
attorney-in-fact or member of a committee appointed by the Board of
Directors, officer, salaried employee, or fiduciary of the corporation or is
or was serving at the request of the corporation (whether or not as a
representative of the corporation) as a director, officer, employee, (for
example, acting in a fiduciary capacity for welfare benefit plans), or
fiduciary of another corporation, partnership, joint venture, trust, or
other enterprise, against expenses (including attorney fees), judgments,
fines, and amounts paid in settlement actually and reasonably incurred by
him in connection with such action, suit or proceeding to the full extent
that officers and directors are permitted to be indemnified by the laws of
the State of New York.
Section 2. Non-Exclusivity. The indemnification provided by this
Article V shall not be deemed exclusive of any other rights to which any person
indemnified may be entitled under the Articles of Incorporation, any agreement,
insurance policy, vote of the Stockholder or disinterested directors, or
otherwise, and any procedure provided for by any of the foregoing, both as to
action in his official capacity and as to action in another capacity while
holding such office.
Section 3. Exclusions. No indemnification is provided under this
Article V for unsalaried persons under contract with the corporation in sales
capacities such as General Agents, Agents and Brokers. Except as expressly
provided in this Article V, no indemnity is provided for persons performing
services to the corporation as independent contractors.
Item 29. Principal Underwriters
a) None
- --------------------------------------------------------------------------------
C-8
<PAGE>
b) The following table sets forth certain information regarding the
officers and directors of ING America Equities, Inc. The business
address of each person named below is Security Life of Denver,
Security Life Center, 1290 Broadway, Attn: Variable, Denver, Colorado
80203-5699
<TABLE>
<CAPTION>
Name and Principal Position and Offices
Business and Address with Underwriter
- -------------------- ---------------------
<S> <C>
Carol D. Hard Director and President
Edward K. Campbell Director, Vice President and Chief Legal
Officer
Daniel B. Lazarus Director
5780 Powers Ferry Road
Atlanta, Georgia 30327
Melodie A. Maxwell-Jones Director and Chief Compliance Officer
Debra Bell Chief Financial Officer and Financial
Operations Officer
Wesley A. Coleman Vice President
Shari A. Enger Treasurer
Martha K. Evans Vice President
Jerrianne Smith Chief Operating Officer
Gary W. Waggoner Secretary
</TABLE>
- --------------------------------------------------------------------------------
C-9
<PAGE>
c) None
Item 30. Location of Accounts and Records
--------------------------------
The records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 and 31a-3 thereunder are
maintained by First ING Life Insurance Company of New York at Security Life
Center, 1290 Broadway, Denver, Colorado 80203-5699, and at Financial
Administrative Services Corporation, 8515 East Orchard Road, Englewood, Colorado
80111.
Item 31. Management Services
-------------------
Not applicable.
Item 32. Undertakings
------------
(a) First ING Life Insurance Company of New York represents that the
fees and charges deducted under the Contract, in the aggregate, are reasonable
in relation to the services rendered, the expenses expected to be incurred and
the risks assumed by the Company.
(b) Registrant undertakes that it will file a post-effective
amendment to this registration statement as frequently as necessary to ensure
that the audited financial statements in the registration statement are never
more than 16 months old for so long as payments under the variable annuity
contracts may be accepted.
(c) Registrant undertakes that it will include either (1) as part of
any application to purchase a Certificate offered by the Prospectus, a space
that an applicant may check to request a Statement of Additional Information, or
(2) a post card or similar written communication affixed to or included in the
Prospectus that the applicant can remove to send for a Statement of Additional
Information.
(d) Registrant undertakes to deliver any Prospectus and Statement of
Additional Information and any financial statements required to be made
available under this Form promptly upon written or oral request to the Company
at the address or phone number listed in the Prospectus.
- --------------------------------------------------------------------------------
C-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the Investment
Company Act of 1940, First ING Life Insurance Company of New York and has duly
caused this Pre-Effective Amendment No. 2 to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, and its seal
to be hereunto fixed and attested, all in the City and County of Denver and the
State of Colorado on the 29th day of April, 1997.
FIRST ING LIFE INSURANCE COMPANY OF NEW YORK
(Depositor)
By: /s/ Stephen M. Christopher
---------------------------
Stephen M. Christopher
President and Chief Executive Officer
FIRST ING LIFE SEPARATE ACCOUNT A1
(Registrant)
By: FIRST ING LIFE INSURANCE COMPANY OF NEW YORK
(Depositor)
By: /s/ Stephen M. Christopher
---------------------------
Stephen M. Christopher
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Pre-Effective
Amendment No. 2 to the Registration Statement has been signed below by the
following persons in the capacities with First ING Life Insurance Company of New
York and on the date indicated.
PRINCIPAL EXECUTIVE OFFICER:
/s/ Stephen M. Christopher
- ---------------------------
Chief Executive Officer
<PAGE>
PRINCIPAL FINANCIAL OFFICER
/s/ Stephen J. Yarina
- ---------------------
Stephen J. Yarina
Vice President, Treasurer and Chief Financial Officer
PRINCIPAL ACCOUNTING OFFICER
/s/ Stephen J. Yarina
- ---------------------
Stephen J. Yarina
Vice President, Treasurer and Chief Financial Officer
DIRECTORS:
/s/ R. Glenn Hilliard*
- ---------------------
R. Glenn Hilliard
/s/ Stephen M. Christopher*
- ---------------------------
Stephen M. Christopher
/s/ Stephen J. Yarina
- ---------------------
Stephen J. Yarina
/s/ Thomas F. Conroy*
- --------------------
Thomas F. Conroy
/s/ Wayne D. Bidelman*
- ---------------------
Wayne D. Bidelman
/s/ Evelyn A. Bentz*
- -------------------
Evelyn A. Bentz
/s/ Eugene L. Copeland*
- ----------------------
Eugene L. Copeland
/s/ William S. Lutter*
- ---------------------
William S. Lutter
/s/ Fred A. Deering*
- --------------------
Fred A. Deering
/s/ Weaver H. Gaines*
- ---------------------
Weaver H. Gaines
/s/ Roger D. Roenfeldt*
- -----------------------
Roger D. Roenfeldt
/s/ Stephen K. West*
- --------------------
Stephen K. West
* By: /s/Edward K. Campbell
---------------------
Edward K. Campbell
Attorney-in-Fact
April 29, 1997
<PAGE>
EXHIBIT INDEX
-------------
First ING Exchequer
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- ----------- ----------------------
<S> <C>
1. Resolutions of the Executive Committee of the Board of
Directors of the First ING Life Insurance Company of New York
("First ING Life") authorizing the establishment of the
Registrant./1/
2. Not Applicable.
3(a) First ING Life Insurance Company of New York Distribution
Agreement./2/
3(b) Specimen Broker-Dealer Supervisory and Selling Agreement for
Variable Contracts./1/
4 Form of Variable Annuity Contract.
5 Form of Variable Annuity Contract Application.
6(a) Articles of Incorporation of First ING Life Insurance Company
of New York./2/
6(b) By-Laws of First ING Life Insurance Company of New York./2/
7. Not Applicable.
</TABLE>
- --------------------------
/1/ Incorporated herein by reference to Pre-Effective Amendment No. 1 to the
Form N-4 Registration Statement of First ING Life Insurance Company of New
York and its First ING Life Separate Account A1, filed with the Securities
and Exchange Commission on July 31, 1995 (File Nos. 33-88794 and 811-8700).
/2/ Incorporated herein by reference to Post-Effective Amendment No. 1 to the
Form N-4 Registration Statement of First ING Life Insurance Company of New
York and its First ING Life Separate Account A1, filed with the Securities
and Exchange Commission on April 23, 1996 (File Nos. 33-88794 and
811-8700).
<PAGE>
<TABLE>
<S> <C>
8. Participation, Service and Administrative Agreements./3/
8(a) The Alger American Fund./3/
8(b) Fidelity Variable Insurance Products Fund./3/
8(c) Fidelity Variable Insurance Products Fund II./3/
8(d) INVESCO Variable Investment Funds, Inc./3/
8(e) Van Eck World Insurance Trust./3/
8(f) Form of Neuberger & Berman Advisers Management Trust.
8(g) Administration Services Agreement between First ING Life Insurance
Company of New York and Financial Administrative Services
Corporation./2/
9. Opinion and Consent of John R. Barmeyer as to the legality of the
securities being registered.
10. Consent of Independent Auditors.
11. None.
12. None.
13. Schedule for Computation of Performance Quotations./4/
14. Financial Data Schedules (Exhibit 27 for purposes of electronic
filing).
15. Powers of Attorney.
</TABLE>
- --------------------
/3/ Incorporated herein by reference to Pre-Effective Amendment No. 1 to the
Form N-4 Registration Statement of First ING Life Insurance Company of New York
and its First ING Life Separate Account A1, filed with the Securities and
Exchange Commission on August 13, 1996 (File Nos. 33-82890 and 811-8700).
/4/ Incorporated herein by reference to the Post-Effective Amendment No. 1 to
Form N-4 Registration Statement of Security Life of Denver and its Security Life
Separate Account A1, filed with the Securities and Exchange Commission on
February 28, 1995 (File No. 33-78444).
<PAGE>
Exhibit 4
FIRST ING LIFE
NEW YORK, NEW YORK
OWNER: Reggie Jackson
CONTRACT DATE: January 1, 1996
CONTRACT NUMBER: 1000033
WE AGREE TO PAY the annuity benefit to the Annuitant beginning on the Annuity
Date, subject to the provisions of this Contract.
WE ALSO AGREE to provide the other rights and benefits of this Contract. These
agreements are subject to the provisions of this Contract.
10 DAY CONTRACT EXAMINATION PERIOD. You have the right to examine and return
this Contract within 10 days after receipt. It may be returned by delivering or
mailing it to us at our Customer Service Center. Immediately upon return, it
will be deemed void as of the Contract Date. Upon return of the Contract, we
will refund the Accumulation Value, in addition to any charges deducted, as of
the date the returned Contract is delivered to us at our Customer Service
Center, or, if mailed through the United States Postal Service, as of the date
the returned Contract is mailed to us. This 10 day period ends 15 days after
the Contract is mailed from our Customer Service Center.
In this Contract, "you" and "your" refer to the Owner of this Contract. "We",
"us" and "our" refer to First ING Life Insurance Company of New York.
/s/ Eugene L. Copeland /s/ Stephen M. Christopher
Secretary President
THIS CONTRACT IS A FLEXIBLE PREMIUM DEFERRED COMBINATION FIXED AND VARIABLE
ANNUITY CONTRACT.
ANNUITY PAYOUTS AND OTHER VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE. THESE VALUES MAY
INCREASE OR DECREASE BASED ON INVESTMENT EXPERIENCE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. ANNUITY PAYOUTS BEGIN AS OF THE ANNUITY DATE. PURCHASE
PAYMENTS ARE FLEXIBLE AND MAY BE MADE UNTIL THEAaNNUITY DATE. THE GUARANTEED
DEATH BENEFIT WILL BE PAID IF THE OWNER DIES PRIOR TO THE ANNUITY DATE.
FIRST ING LIFE INSURANCE COMPANY OF NEW YORK
A Stock Company
Customer Service Center
P.O. Box 173763, Denver, Colorado 80217-3763
Toll-free Telephone Number: 1(800)933-5858
Form 1192 (VA)-NY
Page A
<PAGE>
TABLE OF CONTENTS
This Contract is a legal Contract between you and us. READ IT CAREFULLY.
GUIDE TO KEY PROVISIONS
<TABLE>
<CAPTION>
<S> <C>
SCHEDULE.................................................... 5
CONTRACT EXPENSE PROVISIONS................................. 7
BENEFIT PROVISIONS.......................................... 8
EFFECTIVE DATE OF COVERAGE.................................. 8
ELECTION AND CHANGES OF ANNUITY DATE........................ 8
ELECTION AND CHANGES OF ANNUITY OPTION...................... 8
PAYOUT OF PROCEEDS.......................................... 8
As of the Annuity Date, to Provide Annuity Payouts......... 9
Upon Surrender of this Contract Prior to the Annuity Date.. 9
As a Death Benefit Prior to the Annuity Date............... 9
OWNERS AND DEATH OF THE OWNERS.............................. 9
REQUIRED DISTRIBUTIONS...................................... 10
GUARANTEED DEATH BENEFIT.................................... 10
ANNUITANTS AND DEATH OF ANNUITANTS.......................... 11
BENEFICIARIES AND DEATH OF BENEFICIARIES.................... 11
PURCHASE PAYMENT PROVISIONS................................. 12
PURCHASE PAYMENTS........................................... 12
PURCHASE PAYMENT ALLOCATION................................. 12
VARIABLE ACCOUNT PROVISIONS................................. 12
THE VARIABLE ACCOUNT........................................ 12
VARIABLE ACCOUNT DIVISIONS.................................. 12
CHANGES WITHIN THE VARIABLE ACCOUNT......................... 13
GENERAL ACCOUNT PROVISIONS.................................. 13
THE GENERAL ACCOUNT......................................... 13
GUARANTEED INTEREST DIVISION................................ 13
</TABLE>
Form 1192(VA) - NY
Page 2
<PAGE>
<TABLE>
<S> <C>
TRANSFER PROVISIONS.......................................... 14
TRANSFERS TO OR FROM THE GUARANTEED INTEREST DIVISION........ 14
EXCESS TRANSFER CHARGE....................................... 14
DOLLAR COST AVERAGING TRANSFER OPTION........................ 14
AUTOMATIC REBALANCING........................................ 15
ACCUMULATION VALUE PROVISIONS................................ 16
VALUATION DATE............................................... 16
VALUATION PERIOD............................................. 16
ACCUMULATION UNIT VALUE...................................... 16
ACCUMULATION EXPERIENCE FACTOR............................... 16
ACCUMULATION VALUE OF THE DIVISIONS OF THE VARIABLE ACCOUNT.. 17
ACCUMULATION VALUE OF THE GUARANTEED INTEREST DIVISION....... 17
PARTIAL WITHDRAWAL PROVISIONS................................ 18
DEMAND WITHDRAWAL OPTION..................................... 18
SYSTEMATIC INCOME PROGRAM.................................... 19
IRA INCOME PROGRAM........................................... 20
SURRENDER PROVISIONS......................................... 20
CASH SURRENDER VALUE......................................... 20
GENERAL CONTRACT PROVISIONS.................................. 20
THE CONTRACT................................................. 20
AGE.......................................................... 20
PROCEDURES................................................... 20
DEFERRAL OF PAYOUT........................................... 21
TAX QUALIFICATION............................................ 21
CONTRACT CHANGES............................................. 21
COLLATERAL ASSIGNMENT........................................ 22
INCONTESTABILITY............................................. 22
MISSTATEMENT OF AGE OR SEX................................... 22
PERIODIC REPORTS............................................. 22
BASIS OF COMPUTATIONS........................................ 22
TAXES........................................................ 22
NON PARTICIPATING............................................ 22
CUSTOMER SERVICE CENTER...................................... 23
</TABLE>
Form 1192(VA) - NY
Page 3
<PAGE>
<TABLE>
<S> <C>
ANNUITY OPTION PROVISIONS.................................... 23
SUPPLEMENTARY CONTRACT....................................... 23
PAYOUT OPTIONS............................................... 23
Variable Annuity Payout..................................... 23
Fixed Annuity Payout........................................ 25
Combination Annuity Payout.................................. 25
PAYOUT PERIOD OPTIONS........................................ 25
COMMUTING.................................................... 26
EXCESS INTEREST.............................................. 27
MINIMUM AMOUNTS.............................................. 27
INCOME PROTECTION............................................ 27
PAYOUTS OTHER THAN MONTHLY................................... 27
PAYOUT PERIOD OPTION TABLES.................................. 28
</TABLE>
Additional benefits or riders, if any, will be shown in the Schedule. The
additional provisions will be inserted in this Contract.
Form 1192(VA) - NY
Page 4
<PAGE>
SCHEDULE
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Owner: Reggie Jackson Age and Sex: 35, Male
Annuitant: Reggie Jackson Age and Sex: 35, Male
Contract Date: January 1, 1996
Contract Number: 001-000028
Annuity Date: February 1, 2046
Initial Purchase Payment: $25,000.00
Minimum for Each Additional Purchase Payment: $500
Maximum Cumulative Net Purchase Payment: $1,500,000
Customer Service Center: P.O. Box 173763,
Denver, Colorado 80217-3763
</TABLE>
Form 1192(VA) - NY
Page 5
<PAGE>
SCHEDULE (CONTINUED)
ALLOCATION OF INITIAL PURCHASE PAYMENTS AS SHOWN ON APPLICATION
<TABLE>
<CAPTION>
<S> <C>
Neuberger & Berman Limited Maturity Bond 0 %
Neuberger & Berman Growth 0 %
Neuberger & Berman Government Income 0 %
Neuberger & Berman Partners 0 %
Alger American Small Capital 0 %
Alger American MidCap Growth 0 %
Alger American Growth Division 0 %
Alger American Leveraged AllCap Division 0 %
Fidelity Asset Manager 0 %
Fidelity Growth 0 %
Fidelity Overseas 0 %
Fidelity Money Market 50 %
Fidelity Index 500 0 %
INVESCO Total Return 0 %
INVESCO Industrial Income 0 %
INVESCO High Yield 0 %
INVESCO Utilities 0 %
Van Eck Worldwide Balanced 0 %
Van Eck Gold & Natural Resources 0 %
Guaranteed Interest Division 0 %
</TABLE>
If you elect to invest in a particular Division, at least 1% of your Purchase
Payment must be allocated to that Division, provided that the allocation to each
Division is at least $100. All percentage allocations must be in whole numbers.
Form 1192(VA) - NY
Page 6
<PAGE>
SCHEDULE (CONTINUED)
CONTRACT EXPENSE PROVISIONS
Owner Transaction Expenses (Deducted from the Accumulation Value)
1. Excess Transfer Charge: Refer to the Transfer Provisions section for
details.
2. Surrender Charge: This charge is deducted upon Surrender or Partial
Withdrawal of Purchase Payments held less than 5 full Contract Years
since the Contract Anniversary at the end of the Contract Year in which
the Purchase Payment was made. It is calculated as a percentage of the
Purchase Payments withdrawn or surrendered. The percentage is based on
the number of Contract Anniversaries since the Contract Year in which
each Purchase Payment was made.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CONTRACT ANNIVERSARIES 0 1 2 3 4 5 6 and more
SINCE PURCHASE PAYMENT
WAS MADE:
- -------------------------------------------------------------------------------
PERCENTAGE: 7% 6% 5% 4% 3% 2% 0%
- -------------------------------------------------------------------------------
</TABLE>
ANNUAL ADMINISTRATIVE CHARGE (Deducted from the Accumulation Value)
This charge is based on Net Purchase Payments. If Net Purchase Payments
received are:
less than $100,000: $ 30.00 per year
$100,000 or more: $ 0 per year
VARIABLE ACCOUNT ANNUAL EXPENSES (Based on the percentage of assets in each
Variable Account Division)
Mortality And Expense Risk Charge: 1.25%
Asset Based Administrative Charge: 0.15%
GUARANTEED INTEREST RATE
The Guaranteed Interest Rate for the Guaranteed Interest Division
is: 3.00%
per year
Form 1192(VA)-NY
Page 7
<PAGE>
BENEFIT PROVISIONS
EFFECTIVE DATE OF COVERAGE
The Contract Date shown in the Schedule is the effective date for all coverage
provided under this Contract. This is subject to our receipt of the initial
Purchase Payment. The Contract Date is the date from which we measure Contract
Anniversaries. A Contract Anniversary occurs each Contract Year on the same
month and day as the Contract Date. If the Contract Date is February 29th, the
Contract Anniversary will be February 28th in Contract Years in which there is
not a February 29th.
ELECTION AND CHANGES OF ANNUITY DATE
The Annuity Date is the date as of which Annuity Payouts begin. It may be
elected on your application, but may not be earlier than the second Contract
Anniversary. If no Annuity Date is elected in the application, the Annuity Date
will be the first day of the month following the Annuitant's 85th birthday. You
may change the Annuity Date at any time prior to 60 days before the Annuity Date
currently elected by sending written notice to our Customer Service Center.
ELECTION AND CHANGES OF ANNUITY OPTION
The Annuity Option is composed of both the Payout Option which specifies the
type of annuity to be paid and the Payout Period Option which determines how
long the annuity will be paid, the frequency and the amount of each payout. The
Owner elects the Annuity Option. The Owner may change the Annuity Option at any
time prior to the Annuity Date. The Beneficiary may select an Annuity Option
for any Payouts to be made pursuant to death Proceeds. Any death benefit
Proceeds to be applied under a Payout Option will be allocated to the Divisions
of the Variable Account or the Guaranteed Interest Division as instructed by the
Beneficiary. The available options are described in the Annuity Option
provisions section. Commutation rights are provided to an Annuitant or
Contingent Annuitant as described in the Commuting section of this Contract.
PAYOUT OF PROCEEDS
Proceeds are paid or applied under the following circumstances:
1. As of the Annuity Date, to provide Annuity Payouts;
2. Upon surrender of this Contract prior to the Annuity Date; or
3. As a death benefit prior to the Annuity Date.
The amount and method of payout under each circumstance is described below. The
payout of Proceeds is subject to the Required Distributions section in this
Contract. We may delay payout of the Proceeds for reasons listed in the
Deferral of Payout section.
Form 1192(VA)-NY
Page 8
<PAGE>
As of the Annuity Date, to Provide Annuity Payouts
Proceeds applied as of the Annuity Date to provide an annuity under an
Annuity Option will be the Accumulation Value minus taxes incurred but not
deducted. This deduction will be allocated to each of the Divisions in the
same proportion that the Accumulation Value in each Division bears to the
Accumulation Value in all Divisions immediately prior to the Annuity Date.
We will provide an annuity under the Annuity Option then in effect. If no
Annuity Option is in effect, the Annuity Option default will be Payout Period
Option II for a Variable Annuity Payout, using a Benchmark Total Return of
3%, with a certain period of 20 years. The available options are described
in the Annuity Option Provisions section. The annuity benefits at the time
of their commencement will not be less than those that would be provided by
the application of the Proceeds to purchase any single premium immediate
annuity contract offered by us at that time to the same class of annuitants.
Contact our Customer Service Center or your agent for more information.
Upon Surrender of this Contract Prior to the Annuity Date
Proceeds payable upon the surrender of this Contract prior to the Annuity
Date will be the Cash Surrender Value. No Annuity Options are available upon
surrender; however, you may accelerate the Annuity Date under the Contract as
described in the Surrender Provisions section of this Contract.
As a Death Benefit Prior to the Annuity Date
Proceeds payable upon the death of the Owner prior to the Annuity Date will
be the Guaranteed Death Benefit and will be paid according to the provisions
in the Owners and Death of Owners and the Required Distributions sections. We
will pay the Proceeds in one lump sum unless the Beneficiary elects an
Annuity Option within 60 days after the determination of the Guaranteed Death
Benefit but prior to the date on which we pay the Proceeds. If a one sum
payout is elected, the Proceeds will usually be paid within 7 days of
determination of the amount of the Guaranteed Death Benefit. Interest will
be paid on the Proceeds from the date of determination of the Guaranteed
Death Benefit to the date of payout, or until an Annuity Option is selected.
Interest is at the rate we declare, or any higher rate required by law, but
not less than 3% per year. If the Proceeds are paid under an Annuity Option,
the Beneficiary becomes the Annuitant and the Contingent Beneficiary becomes
the Contingent Annuitant. The available options are described in the Annuity
Option Provisions section. The annuity benefits at the time of their
commencement will not be less than those that would be provided by the
application of the Proceeds to purchase any single premium immediate annuity
contract offered by us at that time to the same class of annuitants. Contact
our Customer Service Center or your agent for more information.
OWNERS AND DEATH OF THE OWNERS
The original Owner of this Contract is the person named as the Owner in the
application. Consistent with the terms of any Beneficiary designation and any
assignment, the Owner may, prior to the Annuity Date:
1. Assign this Contract or surrender it in whole or in part;
2. Amend or change this Contract with the consent of the Company;
3. Exercise any right and receive any benefit; or
4. Change the ownership.
Form 1192(VA)-NY
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<PAGE>
Subject to the applicable provisions of the Required Distributions section, if
the Owner (or Deemed Owner as defined in the Required Distributions section)
dies prior to the Annuity Date, and:
1. If the Owner's spouse is the Joint Owner, then the spouse becomes the
new Owner and no death benefit is payable; or
2. If the Owner's spouse is the Beneficiary, then the spouse may elect to
become the Owner (in which case there is no death benefit payable) by
so electing within 60 days of the death and prior to the distribution
of Proceeds; if there is no such election, the Guaranteed Death Benefit
is payable to the Beneficiary; or
3. If the Owner's spouse is not the Joint Owner or the Beneficiary, then
the Guaranteed Death Benefit is payable to the Beneficiary.
REQUIRED DISTRIBUTIONS
The following required distribution rules shall apply if and to the extent
required under Section 72(s) of the Internal Revenue Code:
1. Subject to the alternative election or spouse beneficiary provisions in
subsection (2) or (3) below,
a) If any Owner dies on or after the annuity starting date and before
the entire interest in this Contract has been distributed, the
remaining portion of such interest shall be distributed at least as
rapidly as under the method of distribution being used as of the
date of such death;
b) If any Owner dies before the annuity starting date, the entire
interest in this Contract will be distributed within 5 years after
such death; and
c) If any Owner is not an individual, then for purposes of this
subsection (1), the primary Annuitant under this Contract shall be
treated as the Owner (the "Deemed Owner"), and any change in the
primary Annuitant shall be treated as the death of the Owner. The
primary Annuitant is the individual, the events in the life of whom
are of primary importance in affecting the timing or amount of the
payout under the Contract.
2. If any portion of the interest of an Owner (or a Deemed Owner) in
subsection (1) is payable to or for the benefit of a designated
beneficiary, and such beneficiary elects within 60 days after such
death but prior to the distribution of Proceeds to have such portion
distributed in an Annuity Option over a period that: A) does not extend
beyond such beneficiary's life or life expectancy and B) starts within
1 year after such death (a "Qualifying Distribution Period"); then for
purposes of satisfying the requirements of subsection (1), such portion
shall be treated as distributed entirely on the date such periodic
distributions begin. Such beneficiary may elect any Payout Period
Option for a Qualifying Distribution Period, subject to any
restrictions imposed by any regulations under Section 72(s) of the
Internal Revenue Code.
3. If any portion of the interest of an Owner (or a Deemed Owner)
described in subsection (1) is payable to or for the benefit of such
Owner's spouse, or is co-owned by such spouse, then such spouse shall
be treated as the Owner of such portion for purposes of the
requirements of subsection (1).
GUARANTEED DEATH BENEFIT
The Guaranteed Death Benefit is the greater of the following amounts. These
amounts are calculated as of the Valuation Date we receive due proof of death
and all information necessary to process the claim including the election of a
one sum payout or election under a Payout Option:
1. The Accumulation Value; or
Form 1192(VA)-NY
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<PAGE>
2. The Step-Up Benefit, plus Net Purchase Payments since the last Step-Up
Anniversary. Net Purchase Payments are Purchase Payments made minus
Partial Withdrawals taken and associated charges. See detailed
definition in the Purchase Payment provisions section.
The Step-Up Benefit at issue is the initial Purchase Payment. As of each
Step-Up Anniversary, the current Accumulation Value is compared to the
prior Step-Up benefit increased by Net Purchase Payments since the last
Step-Up anniversary. The greater of these becomes the new Step-Up
benefit.
The Step-Up Anniversaries are every 6th Contract Anniversary for the
duration of the Contract (i.e., the 6th, 12th, 18th, etc.).
The Guaranteed Death Benefit payable to the Beneficiary is the Guaranteed Death
Benefit as calculated above minus taxes incurred but not deducted.
ANNUITANTS AND DEATH OF ANNUITANTS
The original Annuitant and any Contingent Annuitant are named in the
application. The Annuitant will receive the annuity benefits of the Contract
if, on the Annuity Date, the Annuitant is living and the Contract is then in
force. You may name a new Annuitant prior to the Annuity Date. Any Annuitant
or Contingent Annuitant must be younger than age 86 when named. Any Annuitant
or Contingent Annuitant that is not an individual may not be named without our
consent. If the Owner is not an individual, the Annuitant may not be changed
without our consent.
If the Annuitant dies before the Annuity Date, and a Contingent Annuitant has
been named, the Contingent Annuitant becomes the Annuitant. If no Contingent
Annuitant has been named, you must designate a new Annuitant. If no designation
is made within 30 days of the Annuitant's death, the Owner will become the
Annuitant.
If any Owner is not an individual, the death of the Annuitant will be treated as
the death of the Owner.
Upon the death of the Annuitant after the Annuity Date, any remaining Designated
Period payouts will be continued to any Contingent Annuitant. Upon the death of
both the Annuitant and all Contingent Annuitants, any remaining Designated
Period payouts will be paid to the estate of the last to die of the Annuitant
and Contingent Annuitants. Amounts may be released in one sum if the Owner's
election allows. See the Annuity Options provisions section.
BENEFICIARIES AND DEATH OF BENEFICIARIES
The original Beneficiary and any Contingent Beneficiaries are named in the
application. Surviving Contingent Beneficiaries are paid death Proceeds only if
no Beneficiary survives. If more than one Beneficiary in a class survives, they
will share the Proceeds equally, unless the Owner's designation provides
otherwise. If there is no designated Beneficiary or Contingent Beneficiary
surviving, we will pay the Proceeds to the Owner's estate. The Beneficiary
designation will be on file with us or at a location designated by us. We will
pay Proceeds to the most recent Beneficiary designation on file. The Owner may
name a new Beneficiary unless an irrevocable Beneficiary has been named. When
an irrevocable Beneficiary has been designated, the Owner and the irrevocable
Beneficiary must act together to make any Beneficiary changes.
Form 1192(VA) - NY
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<PAGE>
PURCHASE PAYMENT PROVISIONS
PURCHASE PAYMENTS
This Contract will not be effective until the initial Purchase Payment is
received by us and accepted at our Customer Service Center. Any subsequent
Purchase Payments may be made at any time prior to the Annuity Date, subject to
the Minimum for Each Additional Purchase Payment amount. No Purchase Payment
will be allocated until it is received by us at our Customer Service Center. We
reserve the right to refuse to accept, without our prior approval, any Purchase
Payment when the sum of Net Purchase Payments to date exceeds the Maximum
Cumulative Net Purchase Payment shown in the Schedule. Net Purchase Payments are
Purchase Payments made minus Gross Partial Withdrawals taken. A Gross Partial
Withdrawal is a Partial Withdrawal plus any applicable Partial Withdrawal
Transaction Charge and any applicable Surrender Charge.
PURCHASE PAYMENT ALLOCATION
The initial Purchase Payment will be allocated to the Guaranteed Interest
Division and the Divisions of the Variable Account as you directed in the
application. Any Purchase Payments thereafter will be allocated to each Division
in the same proportion that the Accumulation Value in each Division bears to the
total Accumulation Value as of the date we receive that additional Purchase
Payment at our Customer Service Center, or as otherwise instructed by you. You
may designate a different allocation with respect to any Purchase Payments by
sending us a written notice with the Purchase Payment.
VARIABLE ACCOUNT PROVISIONS
THE VARIABLE ACCOUNT
The Variable Account is an account established by us, pursuant to the laws of
the State of New York, to separate the assets funding the variable benefits for
the class of policies to which this Contract belongs from the other assets of
First ING Life of New York.
The Variable Account is registered as a unit investment trust under the
Investment Company Act of 1940. All income, gains and losses, whether or not
realized, from assets allocated to the Variable Account are credited to or
charged against the Variable Account without regard to income, gains or losses
of our General Account. The assets of the Variable Account are our property,
but are separate from our General Account and our other Variable Accounts. That
portion of the assets of the Variable Account which is equal to the reserves and
other contract liabilities with respect to the Variable Account is not subject
to creditor claims against us.
VARIABLE ACCOUNT DIVISIONS
The Variable Account is divided into Divisions, each of which invests in a
series fund Portfolio designed to meet the objectives of the Division. The
current eligible Divisions are shown in the Schedule. We may, from time to
time, add additional Divisions. If we do, you may be permitted to select from
these other Divisions subject to the terms and conditions we may impose on those
allocations.
We reserve the right to limit the number of Divisions in which you may invest.
Form 1192(VA) - NY
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<PAGE>
CHANGES WITHIN THE VARIABLE ACCOUNT
When permitted by law, and subject to any required notice to you and approval of
the Securities and Exchange Commission ("SEC"), state regulatory authorities or
Contract Owners, we may from time to time make the following changes to the
Variable Account:
. Make additional Divisions available. These Divisions will invest in
investment Portfolios we find suitable for the Contract.
. Eliminate Divisions from the Variable Account, combine 2 or more Divisions, or
substitute a new Portfolio for the Portfolio in which a Division invests. A
substitution may become necessary if, in our judgment, a Portfolio no longer
suits the purposes of the Contract. This may happen due to a change in laws or
regulations, or a change in a Portfolio's investment objectives or
restrictions. This may also happen if the Portfolio is no longer available for
investment, or for some other reason, such as a declining asset base.
. Transfer assets of the Variable Account, which we determine to be associated
with the class of contracts to which your Contract belongs, to another
Variable Account.
. Withdraw the Variable Account from registration under the Investment Company
Act of 1940.
. Operate the Variable Account as a management investment company under the
Investment Company Act of 1940.
. Cause one or more Divisions to invest in a mutual fund other than or in
addition to the Portfolios.
. Discontinue the sale of Contracts and certificates.
. Terminate any employer or plan trustee agreement with us pursuant to its
terms.
. Restrict or eliminate any voting rights as to the Variable Account.
. Make any changes required by the Investment Company Act of 1940 or the rules
or regulations thereunder.
GENERAL ACCOUNT PROVISIONS
THE GENERAL ACCOUNT
The General Account holds all of our assets other than those held in the
Variable Account or our other separate accounts. The Guaranteed Interest
Division is a part of our General Account.
GUARANTEED INTEREST DIVISION
The Guaranteed Interest Division is another Division to which you may allocate
Purchase Payments or make transfers. The Accumulation Value of the Guaranteed
Interest Division is equal to the Net Purchase Payments allocated to this
Division plus any earned interest minus deductions taken from this Division.
Interest is credited at the guaranteed rate shown in the schedule or may be
credited at a higher rate. Any higher rate is guaranteed to be in effect for at
least 12-months.
Form 1192(VA) - NY
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<PAGE>
TRANSFER PROVISIONS
After the Contract Examination Period, the Accumulation Value in each Division
may be transferred, upon request, to any other Division subject to the
limitations on transfers involving the Guaranteed Interest Division as detailed
in the following section. Any transfers made due to the operation of Dollar
Cost Averaging or Automatic Rebalancing will not count toward the limit on the
number of transfers allowed free of charge. The minimum amount that may be
transferred from each Division is the lesser of $100 or the balance of a
Division.
<TABLE>
<CAPTION>
---------------------------------------------
Accumulation Period Annuity Period
- --------------------------------------------------------------------------------
<S> <C> <C>
Free Transfers 12 4
- --------------------------------------------------------------------------------
Total Number of
Transfers Permitted Unlimited 4
- --------------------------------------------------------------------------------
Excess Transfer Charge $25 for each transfer in Not Applicable
excess of 12 during any
Contract Year
- --------------------------------------------------------------------------------
</TABLE>
We reserve the right to limit the number of transfers per Contract Year to 12
and to limit excessive trading activity.
TRANSFERS TO OR FROM THE GUARANTEED INTEREST DIVISION
Once during the first 30 days of each Contract Year, you may transfer amounts to
or from the Guaranteed Interest Division. Transfer requests received within 30
days prior to the Contract Anniversary will be deemed to occur as of the
Contract Anniversary. Transfer requests received on the Contract Anniversary or
during the next 30 days will be processed. Transfer requests received at any
other time will not be processed.
The maximum transfer amount from the Guaranteed Interest Division in any
Contract Year is the greatest of:
1. 25% of the Accumulation Value in the Guaranteed Interest Division at the
time of the first transfer or withdrawal in a Contract Year;
2. The minimum transfer amount; or
3. The amount transferred and withdrawn from the Guaranteed Interest Division
in the prior Contract Year.
For purposes of calculating the maximum transfer from the Guaranteed
Interest Division, all withdrawals (including Systematic Income Partial
Withdrawals) and transfers from the Guaranteed Interest Division in a
Contract Year are summed.
EXCESS TRANSFER CHARGE
If you exceed the number of free transfers allowed, you will be assessed an
Excess Transfer Charge. This charge will be deducted from each of the Divisions
in which you are invested in the same proportion that the amount of Accumulation
Value in that Division bears to the total Accumulation Value immediately after
the transfer.
DOLLAR COST AVERAGING TRANSFER OPTION
During the Accumulation Period only, if you have at least $10,000 of
Accumulation Value in either the Fidelity Investments Money Market Division or
the Neuberger & Berman Limited Maturity Bond Division, you may choose to
transfer a specified dollar amount each month from one of these
Form 1192(VA) - NY
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<PAGE>
Divisions to other Divisions of the Variable Account. Dollar Cost Averaging
transfers may not be made to the Guaranteed Interest Division. You may elect the
Dollar Cost Averaging transfer option at any time prior to the Annuity Date.
The minimum amount that you may elect to transfer each month is $100. The
maximum amount that you may transfer is equal to the Accumulation Value in the
Division from which the transfer is taken when the election is made, divided by
12.
Dollar Cost Averaging may be elected to end on a specified date or when a
specific balance remains in the Fidelity Investments Money Market Division or
the Neuberger & Berman Limited Maturity Bond Division.
Allocations of the transfer amount must be designated as whole number
percentages; no specific dollar designation may be made to the Divisions of the
Variable Account. If you elect to transfer to a particular Division, the
minimum percentage that may be transferred to that Division is 5% of the total
amount transferred. The transfer date will be the same calendar day each month
as the Contract Date. If this calendar day is not a Valuation Date, the next
Valuation Date will be used. If, on any transfer date, the Accumulation Value
in the selected Division is equal to or less than the amount you have elected to
have transferred, the entire amount will be transferred, and this option will
end. Dollar Cost Averaging will end as of the Valuation Date immediately
preceding the Annuity Date.
You may change the transfer amount or the Divisions to which transfers are to be
made once each Contract Year. You may cancel this election by sending us
written notice at our Customer Service Center at least 7 days before the next
transfer date. Any transfer under this option will not be included for purposes
of the Excess Transfer Charge.
If you elect both Dollar Cost Averaging and Automatic Rebalancing, Dollar Cost
Averaging will occur first. On the first Valuation Date of the next calendar
quarter after Dollar Cost Averaging has terminated, Automatic Rebalancing will
begin.
AUTOMATIC REBALANCING
Automatic Rebalancing allows you to match your Accumulation Value in each
Division to your allocation percentages. Automatic Rebalancing can be elected
in your application or by completing the client service application and
returning it to our Customer Service Center. As of the first Valuation Date of
each calendar quarter thereafter we will reallocate your Accumulation Value so
that the amount in each Division matches your allocation percentages. Automatic
Rebalancing may not begin until the end of the Contract Examination Period.
When you request a change in your allocation percentages, your Accumulation
Value will be reallocated as of the Valuation Date that we receive your written
allocation instructions.
You may not transfer among Divisions while the Automatic Rebalancing feature is
in effect. If you elect both Dollar Cost Averaging and Automatic Rebalancing,
Dollar Cost Averaging will occur first. On the first Valuation Date of the next
calendar quarter after Dollar Cost Averaging has terminated, Automatic
Rebalancing will begin.
Form 1192(VA) - NY
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<PAGE>
ACCUMULATION VALUE PROVISIONS
The Accumulation Value of this Contract is the sum of the Accumulation Values of
all the Divisions of the Variable Account in which your Contract is invested,
plus any Accumulation Value of the Guaranteed Interest Division.
The Accumulation Values are based on the Purchase Payments and transfers made,
Partial Withdrawals, the Contract charges, earned interest of the Guaranteed
Interest Division and the investment experience of the Division(s) of the
Variable Account.
All Contract processing occurs as of a Valuation Date. If a transaction occurs
on a day other than a Valuation Date, the transaction will be processed as of
the next Valuation Date.
VALUATION DATE
A Valuation Date is any day:
1. The New York Stock Exchange ("NYSE") is open for trading and on which
First ING Life's Customer Service Center is open; or
2. As may be required by law.
VALUATION PERIOD
A Valuation Period begins at 4 p.m. Eastern time on a Valuation Date. It ends
at 4 p.m. Eastern time on the next succeeding Valuation Date.
All Contract processing for a Valuation Period takes place as of the end of the
Valuation Period.
ACCUMULATION UNIT VALUE
The investment experience of a Division of the Variable Account is determined as
of each Valuation Date. We use an Accumulation Unit Value to measure the
experience of each of the Variable Account Divisions during a Valuation Period.
The Accumulation Unit Value for a Valuation Period equals the Accumulation Unit
Value for the preceding Valuation Period multiplied by the Accumulation
Experience Factor for the Valuation Period.
The number of units for a given transaction related to a Division of the
Variable Account as of a Valuation Date is determined by dividing the dollar
value of that transaction by that Division's Accumulation Unit Value for that
date.
ACCUMULATION EXPERIENCE FACTOR
For each Division of the Variable Account, the Accumulation Experience Factor
reflects the investment experience of the Portfolio in which that Division
invests and the charges assessed against that Division for a Valuation Period.
The Accumulation Experience Factor is calculated as follows:
1. The net asset value of the Portfolio in which that Division invests as of
the end of the current Valuation Period; plus
2. The amount of any dividend or capital gains distribution declared and
reinvested in the Portfolio during the current Valuation Period; minus
Form 1192(VA) - NY
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<PAGE>
3. A charge for taxes, if any.
4. The result of (1), (2) and (3) divided by the net asset value of the
Portfolio as of the end of the preceding Valuation Period; minus
5. The daily equivalent of the Variable Account Annual Expenses shown in
the Schedule for each day in the current Valuation Period.
ACCUMULATION VALUE OF THE DIVISIONS OF THE VARIABLE ACCOUNT
The Accumulation Value of each Division of the Variable Account as of the
Contract Date is equal to the amount of the initial Purchase Payment allocated
to that Division.
On subsequent Valuation Dates, the Accumulation Value of each Division of the
Variable Account is calculated as follows:
1. The number of Accumulation Units in that Division as of the end of the
preceding Valuation Period multiplied by that Division's Accumulation
Unit Value for the current Valuation Period; plus
2. Any additional Purchase Payments allocated to that Division during the
current Valuation Period; plus
3. Any Accumulation Value transferred to such Division during the current
Valuation Period; minus
4. Any Accumulation Value transferred from such Division during the current
Valuation Period; minus
5. Any Excess Transfer Charge allocated to such Division during the current
Valuation Period; minus
6. Any Gross Partial Withdrawals allocated to that Division during the
current Valuation Period; minus
7. The portion of the Administrative Charge applicable to that Division if
a Contract Anniversary occurs during the Valuation Period.
The Administrative Charge is allocated to each of the Divisions of the Variable
Account and the Guaranteed Interest Division in the same proportion that the
Accumulation Value in that Division bears to the Accumulation Value in all of
the Divisions.
ACCUMULATION VALUE OF THE GUARANTEED INTEREST DIVISION
The Accumulation Value in the Guaranteed Interest Division as of the Contract
Date is equal to the amount of the initial Purchase Payment allocated to that
Division.
On subsequent Valuation Dates, the Accumulation Value of the Guaranteed Interest
Division is calculated as follows:
1. The Accumulation Value of the Guaranteed Interest Division as of the end
of the preceding Valuation Period plus any earned interest during the
Valuation Period; plus
2. Any additional Purchase Payments allocated to the Guaranteed Interest
Division during the current Valuation Period; plus
3. Any Accumulation Value transferred to the Guaranteed Interest Division
during the current Valuation Period; minus
4. Any Accumulation Value transferred from the Guaranteed Interest Division
during the current Valuation Period; minus
5. Any Excess Transfer Charge allocated to the Guaranteed Interest Division
during the current Valuation Period; minus
6. Any Gross Partial Withdrawals allocated to the Guaranteed Interest
Division during the current Valuation Period; minus
7. The portion of the Administrative Charge applicable to the Guaranteed
Interest Division if a Contract Anniversary occurs during the current
Valuation Period.
Form 1192(VA) - NY
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<PAGE>
The Administrative Charge is allocated to each of the Divisions of the Variable
Account and the Guaranteed Interest Division in the same proportion that the
Accumulation Value in that Division bears to the Accumulation Value in all of
the Divisions.
PARTIAL WITHDRAWAL PROVISIONS
After the Contract Examination Period and prior to the Annuity Date, you may
withdraw, in cash, all or part of the Cash Surrender Value of this Contract. A
Partial Withdrawal may incur Surrender Charges. Withdrawals may be subject to a
10% penalty tax. A Gross Partial Withdrawal is a Partial Withdrawal plus any
applicable Surrender Charges.
In no case will you be allowed to withdraw more than your Cash Surrender Value.
A Partial Withdrawal will result in a decrease in the Accumulation Value of this
Contract. The decrease is equal to the amount of the Gross Partial Withdrawal.
Partial Withdrawals from the Divisions of the Variable Account will be made by
redeeming Accumulation Units in the affected Divisions at their value as next
computed after we receive your written request at our Customer Service Center.
Any applicable Surrender Charge will reduce the Accumulation Value of each
Division in the same proportion that the Accumulation Value in each Division
bears to the total Accumulation Value immediately after the withdrawal.
There are 3 Partial Withdrawal options available:
1. Demand Withdrawal Option
2. Systematic Income Program
3. IRA Income Program.
DEMAND WITHDRAWAL OPTION
After the Contract Examination Period and prior to the Annuity Date, you may
make a Demand Withdrawal. The minimum Demand Withdrawal amount is $100. The
maximum Demand Withdrawal amount is the Cash Surrender Value minus $500. If the
amount of Demand Withdrawal you specify exceeds the maximum level, the amount of
the withdrawal will automatically be adjusted.
Demand Withdrawals are deemed to be withdrawn in the following order:
1. Earnings in the Contract;
2. Purchase Payments held more than 5 full Contract Years since the Contract
Anniversary immediately following the end of the Contract Year in which
the Purchase Payment was made;
3. The amount by which 15% of the Accumulation Value as of the last Contract
Anniversary (minus any Gross Partial Withdrawals already made during the
Contract Year which are not considered withdrawals of Purchase Payments)
exceeds earnings, if any;
4. Purchase Payments held less than 5 full Contract Years since the Contract
Anniversary at the end of the Contract Year in which the Purchase Payment
was made, withdrawn on a first-in, first-out basis.
Unless you specify otherwise, the amount of the Partial Withdrawal will be taken
from each Division in the same proportion that the amount of Accumulation Value
in that Division bears to the Accumulation Value in all of the Divisions
immediately prior to the withdrawal. You may not
Form 1192(VA) - NY
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<PAGE>
withdraw from the Guaranteed Interest Division an amount that is greater than
the total withdrawal multiplied by the ratio of the Accumulation Value in the
Guaranteed Interest Division to the total Accumulation Value immediately prior
to the withdrawal.
Earnings in the contract, for the purpose of calculating Surrender Charges,
equal the current Accumulation Value minus any Purchase Payments not previously
withdrawn.
SYSTEMATIC INCOME PROGRAM
You may elect this option at any time prior to the Annuity Date. You may choose
to receive Systematic Income Partial Withdrawals on a monthly or quarterly basis
from the Accumulation Value. Withdrawals will be taken from each Division of
the Variable Account and the Guaranteed Interest Division in the same proportion
that the Accumulation Value of that Division bears to the total Accumulation
Value. The payouts under this option may not start sooner than one month after
the Contract Date. You may select the day of the month when the withdrawals
will be made. If no day is selected, the withdrawals will be made on the same
calendar day of the month as the Contract Date. If this calendar day is not a
Valuation Date, the next Valuation Date will be used. You may select a dollar
amount or a percentage amount for your withdrawal subject to the following
maximums:
MONTHLY: 1.25% of the Accumulation Value
QUARTERLY: 3.75% of the Accumulation Value
Except as described in the following sections, in no event will a payout be less
than $100.
If a dollar amount is selected and the amount to be systematically withdrawn
would exceed the applicable maximum percentage listed above on the withdrawal
date, the amount withdrawn will be reduced to equal such percentage. If the
amount to be withdrawn is then less than $100, the withdrawal will be made and
the Systematic Income Program will be canceled.
If a percentage is selected and the amount to be systematically withdrawn based
on that percentage would be less than $100, the amount will be increased to the
lesser of $100 or the maximum percentage. If the amount to be withdrawn is then
less than $100, the withdrawal will be made and the Systematic Income Program
will be canceled.
If the Systematic Income Program is canceled due to an insufficient Accumulation
Value, any remaining Cash Surrender Value will be paid to you. This will result
in the termination of the Contract.
You may change the amount or percentage of your Systematic Income Partial
Withdrawal once each Contract Year. You may cancel your election at any time by
sending written notice to us at our Customer Service Center at least 7 days
prior to the next scheduled withdrawal date.
During any Contract Year, if a Demand Withdrawal is made while the Systematic
Income Program is in effect, the remaining payouts to be made under the
Systematic Income Program for that Contract Year will be considered Demand
Withdrawals for purposes of calculating Partial Withdrawal Transaction Charges
and any applicable Surrender Charges. If a Demand Withdrawal is not made in the
same Contract Year, Systematic Income Partial Withdrawals will not be assessed a
Surrender Charge. However, the amount available for Systematic Income Partial
Withdrawals is never greater than the Cash Surrender Value.
Form 1192(VA) - NY
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<PAGE>
IRA INCOME PROGRAM
If you have an IRA contract, we will send you Partial Withdrawals to accommodate
IRS required minimum distribution rules. These Partial Withdrawals will begin
automatically if the minimum distributions are not otherwise satisfied.
SURRENDER PROVISIONS
CASH SURRENDER VALUE
The Cash Surrender Value of this Contract is the Accumulation Value minus any
Surrender Charges, taxes incurred but not deducted and the Administrative
Charge, if any, due at the end of the Contract Year. The applicable Surrender
and Administrative Charges are shown in the Schedule.
Surrenders may be subject to a 10% penalty tax.
You may surrender this Contract for its Cash Surrender Value at any time prior
to the Annuity Date. The Surrender Charge shown in the Schedule will be
deducted on surrender. A Surrender Charge is applicable only to the Surrender
or Partial Withdrawal of Purchase Payments held less than 5 full Contract Years
since the Contract Anniversary at the end of the Contract Year in which the
Purchase Payment was made.
If you do not wish to receive your Cash Surrender Value in a one sum payout and
you are also the Annuitant, you may avoid a Surrender Charge by applying the
Proceeds to Payout Period Options II or III by accelerating the Annuity Date
under the Contract, subject to the limitations in the Election and Changes of
Annuity Date section. No surrender may be made on or after the Annuity Date or
with respect to any amounts applied under an Annuity Option.
GENERAL CONTRACT PROVISIONS
THE CONTRACT
This Contract, including any applications, riders and endorsements, makes up the
entire Contract between you and us. A copy of the initial application will be
attached to this Contract at issue. All statements made in an application will
be considered representations and not warranties. No statement will be used to
deny a claim unless it is in an application.
AGE
This Contract is issued at the Owner's Age shown in the Schedule. This is the
Owner's Age as of last birthday on the Contract Date. The Annuitant's attained
age on any date for which age is to be determined is the Annuitant's age as of
last birthday.
PROCEDURES
We must receive any election, designation, assignment or any other change
request you make in writing, except those specified on the application. We may
require a return of this Contract for any Contract change or for paying its Cash
Surrender Value. The effective date of any change in
Form 1192(VA) - NY
Page 20
<PAGE>
provisions of the Contract will be the date the request was signed. Any change
will not affect payouts made or action taken by us before the change is recorded
at our Customer Service Center.
We may require due proof of age, death or survival of an Annuitant or any
Beneficiary when such proof is relevant to the payout of a benefit, claim, or
settlement under the Contract.
In the event of the Owner's death before the Annuity Date, we should be informed
as soon as possible. Claim procedure instructions will be sent to your
Beneficiary immediately. We require a certified copy of the death certificate
and may require proof of the Owner's Age. We may require the Beneficiary and
the Owner's next of kin to sign authorizations as part of due proof.
DEFERRAL OF PAYOUT
Partial Withdrawals or payout of Proceeds from Divisions of the Variable Account
will usually be processed within 7 days of receipt of the request at our
Customer Service Center. However, we may postpone the processing of any such
transactions for any of the following reasons:
1. When the NYSE is closed for trading;
2. When trading on the NYSE is restricted by the SEC;
3. When an emergency exists such that it is not reasonably practical to
dispose of securities in the applicable Division of the Variable Account
or to determine the value of its assets; or
4. When a governmental body having jurisdiction over the Variable Account
permits such suspension by order.
Rules and regulations of the SEC are applicable and will govern as to whether
conditions described in (2), (3), or (4) exist.
We may defer up to 6 months the payout of any Partial Withdrawal or Proceeds
other than death benefits from the Guaranteed Interest Division.
TAX QUALIFICATION
This Contract is intended to qualify as an annuity contract under the Internal
Revenue Code. To that end, all terms and provisions of the Contract shall be
interpreted to ensure or maintain such qualification. Payouts and distributions
under this Contract shall be made in the time and manner necessary to maintain
such qualification under the applicable provisions of the Internal Revenue Code
in existence at the time this Contact is issued. We reserve the right to amend
this Contract, to reflect any clarifications or changes that may be needed or
are appropriate, or to conform it to any applicable changes in the tax
requirements. Such changes will apply uniformly to all Contracts that are
affected. We will send you written notice of any such changes.
CONTRACT CHANGES
All changes made by us must be signed by our president or an officer and by our
secretary or an assistant secretary. No other person can change any of this
Contract's terms and conditions.
Form 1192(VA) - NY
Page 21
<PAGE>
COLLATERAL ASSIGNMENT
The Owner may assign this Contract as collateral security upon written notice to
us. Once it is recorded with us, the rights of the Owner and Beneficiary are
subject to the assignment. It is your responsibility to make sure the
assignment is valid.
INCONTESTABILITY
We will not contest the statements in an application for this Contract after the
Contract Date.
MISSTATEMENT OF AGE OR SEX
If the Age or sex has been misstated in an application, the amounts payable or
benefits provided by this Contract will be those that the Purchase Payouts made
would have purchased at the actual Age or sex, with interest at 6% per year on
any overpayments or underpayments previously made.
PERIODIC REPORTS
During the Accumulation Period, we will send you a report within 90 days after
the end of each calendar quarter. This report will show the current
Accumulation Value, Cash Surrender Value, Guaranteed Death Benefit and activity
under the Contract since the last report. During the Annuity Period, we will
send you a report within 90 days after the end of each calendar year showing any
information required by law. The reports will also include any other
information that may be required by the SEC or the insurance supervisory
official of the jurisdiction in which this Contract is delivered.
BASIS OF COMPUTATIONS
The Cash Surrender Values under this Contract are not less than the minimums
required on the Contract Date by the state in which this Contract was delivered.
A detailed statement of the method of computation of Accumulation Values under
this Contract has been filed with the insurance department of the state in which
this Contract was delivered, if requested by that state.
TAXES
Taxes relating to this Contract paid by us to any governmental entity will be
deducted from the Purchase Payments or Accumulation Value. We will, at our sole
discretion, determine when taxes have resulted from: the investment experience
of the Divisions of the Variable Account; receipt by us of the Purchase
Payments; Surrenders and Partial Withdrawals; or the start of an Annuity Option.
We may, at our sole discretion, pay taxes when incurred and deduct that amount
from the Accumulation Value at a later date. Payment at an earlier date does
not waive any right we may have to deduct amounts at this later date. We will
deduct any withholding taxes required by applicable law.
NON PARTICIPATING
This Contract does not participate in our surplus earnings.
Form 1192(VA) - NY
Page 22
<PAGE>
CUSTOMER SERVICE CENTER
Our Customer Service Center is at the address shown in the Schedule. Unless you
are otherwise notified:
1. All requests and payments should be sent to us at our Customer Service
Center; and
2. All transactions are effective as of the date the required information is
received at our Customer Service Center.
ANNUITY OPTION PROVISIONS
The Annuity Option is composed of both the Payout Option which specifies the
type of annuity to be paid and the Payout Period Option which determines how
long the annuity will be paid, the frequency and the amount of the first payout.
SUPPLEMENTARY CONTRACT
When an Annuity Option becomes effective, this Contract will be amended to
include a Supplementary Contract. The Supplementary Contract will provide for
the manner of settlement and rights of the Annuitant. The Supplementary
Contract Effective Date will be the Annuity Date or the date of other
settlement, whenever the Annuity Option becomes effective. The first payout
will be payable as of the Supplementary Contract Effective Date.
PAYOUT OPTIONS
Annuity Payouts can be made under a Variable Annuity Payout, a Fixed Annuity
Payout, or a Combination Annuity Payout, each under various Payout Period
Options. Each of these options is described below.
VARIABLE ANNUITY PAYOUT
A Variable Annuity is an annuity with payouts which:
1. Are not pre-determined or guaranteed as to dollar amount; and
2. Vary in amount with the investment experience of the Divisions of the
Variable Account in which you invest.
As of the Annuity Date, any Accumulation Value invested in the Guaranteed
Interest Division will be allocated among the Divisions of the Variable Account
in the same proportion that the Accumulation Value of each Division bears to the
total Accumulation Value of all the Divisions of the Variable Account.
The first Variable Annuity Payout for each Division of the Variable Account will
be the amount that the Proceeds will provide as of the close of business on the
Valuation Date immediately preceding the Supplementary Contract Effective Date
at the Benchmark Total Return elected. If you have elected to have payouts made
less frequently than monthly, the payout amount is then adjusted according to
the factors in the Payouts Other Than Monthly section. The initial number of
Annuity Units for a Division of the Variable Account is calculated by dividing
the payout amount of that Division of the Variable Account by the Annuity Unit
Value of that Division as of the Supplementary Contract Date. The total
Variable Annuity Payout is the sum of the Variable Annuity Payouts from all
Divisions of the Variable Account.
Form 1192(VA) - NY
Page 23
<PAGE>
Variable Annuity Payouts, after the first payout, vary in amount with the
investment experience of the Divisions of the Variable Account. The dollar
amount of each Variable Annuity Payout after the first payout is calculated by
adding the amount due for each Division of the Variable Account. The amount due
for each Division equals:
1. The number of Annuity Units for that Division; multiplied by,
2. The Annuity Unit Value for that Division as of the Valuation Date for
which each payout is due.
The dollar amount of each Annuity Payout after the first will not be affected by
variations in our expenses or mortality experience.
Benchmark Total Return
You must elect either a 3% or 5% Benchmark Total Return. Your election may
not be changed after the Annuity Date. Electing the 5% Benchmark Total
Return would mean a higher initial payout but more slowly rising or more
rapidly falling subsequent payouts if actual investment experience varied
from 5%. The 3% Benchmark Total Return assumption would have the opposite
effect. If the actual investment rate is at the annual rate of 3% or 5%, the
Annuity Payouts will be level if you elected either the 3% or 5%
respectively.
Annuity Unit Value
We use an Annuity Unit Value to calculate the value of Variable Annuity
Payouts. The Annuity Unit Value for a Valuation Period is:
a) The Annuity Unit Value for each Division as of the last prior
Valuation Period multiplied by the Annuity Experience Factor for
that Division for the Valuation Period for which the Annuity Unit
Value is being calculated; divided by
b) An interest factor based on the Benchmark Total Return selected.
(This is done to neutralize the Benchmark Total Return.)
Annuity Experience Factor
For each Division of the Variable Account, the Annuity Experience Factor
reflects the investment experience of the Portfolio in which that Division
invests and the charges assessed against that Division for a Valuation
Period. The Annuity Experience Factor is calculated as follows:
a) The net asset value of the Portfolio as of the end of the current
Valuation Period; plus
b) The amount of any dividend or capital gains distribution declared
and reinvested in such Portfolio during the current Valuation
Period; minus
c) A charge for taxes, if any.
d) The result of (a), (b) and (c), divided by the net asset value of
the Portfolio as of the end of the preceding Valuation Period; minus
e) The daily equivalent of the Variable Account Annual Expenses shown
in the Schedule for each day in the current Valuation Period.
Form 1192(VA)-NY
Page 24
<PAGE>
Transfer of Annuity Units
The Annuitant may transfer all or a portion of the Annuity Units in a
Division of the Variable Account to another Division of the Variable
Account. The limit on transfers is shown in the table in the Transfer
provisions section. After the transfer, the number of Annuity Units in the
Division of the Variable Account from which you are transferring will be
reduced by the number of Annuity Units transferred. The number of Annuity
Units in the Division to which the transfer is made will be increased by the
number of Annuity Units transferred multiplied by:
a) The value of an Annuity Unit in the Division of the Variable Account
from which the transfer is made, divided by
b) The value of an Annuity Unit in the Division of the Variable Account
to which the transfer is made.
Fixed Annuity Payout
A Fixed Annuity Payout is an annuity with payouts which remain fixed as to
dollar amount throughout the Payout Period. As of the Supplementary Contract
Effective Date, any Proceeds invested in the Divisions of the Variable Account
will be allocated to the Guaranteed Interest Division. The Fixed Annuity Payout
will be that amount that the Proceeds will provide as of the Supplementary
Contract Effective Date at the guaranteed Benchmark Total Return of 3%. If the
Fixed Annuity Payout is credited at an interest rate above the guaranteed
minimum, the installment dollar amount will be greater than the determined
installment dollar amount for the time period that the higher rate is declared.
If you have elected to have payouts made less frequently than monthly, the
payout amount is adjusted according to the factors in Payouts Other Than Monthly
section.
Combination Annuity Payout
A Combination Annuity Payout is an annuity where a portion of the payout is
variable and a portion of the payout is fixed as to dollar amount throughout the
Payout Period. At least 25% of the Proceeds must be allocated to each selected
option as of the Supplementary Contract Effective Date. As of the Supplementary
Contract Effective Date, we will allocate Accumulation Value between the
Guaranteed Interest Division and the Divisions of the Variable Account to meet
the proportions selected. Any amount of Proceeds to be transferred to or from
the Guaranteed Interest Division will be split among the Divisions of the
Variable Account in the same proportion that the Accumulation Value of each of
the Divisions of the Variable Account bears to the total Accumulation Value of
the Divisions of the Variable Account. Any Death Proceeds to be applied under a
Combination Annuity Payout will be allocated to the Divisions of the Variable
Account as instructed by the Beneficiary. Once a Combination Annuity Payout is
selected, the Annuitant may subsequently increase the allocation to a Fixed
Annuity Payout, but may not increase the allocation to the Variable Annuity
Payout.
PAYOUT PERIOD OPTIONS
Under each Payout Option, the Payout Period is elected from one of the
following:
Form 1192(VA)-NY
Page 25
<PAGE>
OPTION I. Payouts for a Designated period. Payouts will be made in 1, 2, 4,
or 12 installments per year as elected for a designated period, which may be 5
to 30 years. If a Fixed Annuity Payout is elected, the installment dollar
amounts will be equal except for any Excess Interest as described below. If a
Variable Annuity Payout is elected, the number of Annuity Units of each
installment will be equal, but the dollar amount of each installment will vary
based on the Annuity Unit Values of the Divisions elected. If the Annuitant dies
before the end of the designated period, payouts will be continued to the
Contingent Annuitant, if one has been named, until the end of the designated
period. The amount of each payout will depend upon the designated period
elected, and if a Variable Annuity Payout is elected, the investment experience
of the Divisions of the Variable Account selected. The amount of the first
monthly payout for each $1,000 of Accumulation Value applied is shown in Payout
Option Table I.
OPTION II. Life Income With Payouts for a Designated period. Payouts will be
made in 1, 2, 4, or 12 installments per year throughout the Annuitant's
lifetime, or if longer, for a period of 5, 10, 15 or 20 years as elected. If a
Fixed Annuity Payout is elected, the installment dollar amounts will be equal
except for any Excess Interest, as described below. If a Variable Annuity Payout
is elected, the number of Annuity Units of each installment will be equal, but
the dollar amounts of each installment will vary based on the Annuity Unit
Values of the selected Divisions. If the Annuitant dies before the end of the
designated period, payouts will be continued to the Contingent Annuitant, if one
has been named, until the end of the designated period. The amount of each
payout will depend upon the Annuitant's sex, age at the time the first payout is
due, the designated period elected and, if a Variable Annuity Payout is elected,
the investment experience of the Divisions of the Variable Account selected. The
amount of the first monthly payout for each $1,000 of Accumulation Value applied
is shown in Payout Period Option Table II. This option is only available for
ages shown in these Tables.
OPTION III. Joint and Last Survivor. Payouts will be made in 1, 2, 4, or 12
installments per year as elected while both Annuitants are living. Upon the
death of one Annuitant, the Survivor's Annuity Payout will be paid throughout
the lifetime of the Surviving Annuitant.
If a Fixed Annuity Payout is elected, the installment dollar amount will be
level while both Annuitants are living and upon the death of one Annuitant will
be reduced to 2/3rds of the installment dollar amount (excluding any Excess
Interest paid) while both Annuitants were living.
If a Variable Annuity Payout is elected, the number of Annuity Units applied to
each installment will be level while both Annuitants are living and upon the
death of one Annuitant will be reduced to 2/3rds of the number of Annuity Units
applied to each installment while both Annuitants were living. The dollar
amounts of each installment will vary based on the Annuity Unit Values of the
selected Divisions.
The amount of each payout will depend upon the age last birthday and sex of each
Annuitant at the time the first payout is due and, if a Variable Annuity Payout
is elected, the investment experience of the Divisions of the Variable Account
selected.
Payouts for Payout Period Option III will be determined by using the 1983A
Individual Annuity Mortality Table. Contact our Customer Service Center to
determine the amount of the first monthly installment for each $1,000 of
Accumulation Value applied.
OPTION IV. Other. Payouts will be made in any other manner as agreed upon in
writing between you or the Beneficiary and us.
COMMUTING
The Annuitant may commute remaining designated period installments under Payout
Period Option I. The Contingent Annuitant may commute remaining designated
period installments after the death of the Annuitant. If no Contingent Annuitant
is named, any remaining designated period
Form 1192(VA)-NY
Page 26
<PAGE>
installments after the death of the Annuitant may be commuted by the estate. Any
computation shall be at the appropriate Benchmark Total Return rate.
EXCESS INTEREST
We may declare that Fixed Annuity Payouts will be credited at an interest rate
above the guaranteed minimum. We guarantee that any higher rate will not be
reduced more than once during a 12-month period.
MINIMUM AMOUNTS
The minimum amount that may be applied under any Annuity Option is $2,000. If
the Proceeds to be applied are less than $2,000, or if the payouts to the
Annuitant are ever less than $20, we may change the frequency of payouts to
result in payouts of at least that amount or require a one sum payout.
INCOME PROTECTION
Unless otherwise provided in the Annuity Option election, an Annuitant or
Contingent Annuitant has the right to assign, transfer to a third party or
encumber amounts held or installments to become payable pursuant to this
Contract. To the extent provided by law, the Proceeds, amount retained, and
installments are not subject to any Annuitant's debts, contracts, or
engagements.
PAYOUTS OTHER THAN MONTHLY
The following tables show initial monthly installments for Payout Period Options
I and II. To arrive at annual, semiannual, or quarterly payouts, multiply the
appropriate figures by 11.839, 5.963, or 2.993 if the Benchmark Total Return is
3%, and by 11.736, 5.939 or 2.988 if the Benchmark Total Return is 5%,
respectively. Factors for other designated periods or for other options that may
be provided by mutual agreement will be provided upon reasonable request.
Form 1192(VA)-NY
Page 27
<PAGE>
PAYOUT PERIOD OPTION TABLES
PAYOUT PERIOD OPTION TABLE I
(Benchmark Total Return is 3% -- Per $1,000 of Net Proceeds)
<TABLE>
<CAPTION>
No. of Years Monthly No. of Years Monthly
Payable Installments Payable Installments
- ----------------------------------------------------------------------
<S> <C> <C> <C>
5 $17.92 20 $5.53
6 15.16 21 5.34
7 13.18 22 5.17
8 11.70 23 5.01
9 10.55 24 4.86
10 9.63 25 4.73
11 8.88 26 4.61
12 8.26 27 4.50
13 7.73 28 4.39
14 7.28 29 4.30
15 6.89 30 4.21
16 6.55
17 6.25
18 5.98
19 5.75
- ----------------------------------------------------------------------
</TABLE>
Form 1192(VA)-NY
Page 28
<PAGE>
PAYOUT PERIOD OPTION TABLE I -- VARIABLE ANNUITY ONLY
(Benchmark Total Return is 5% -- Per $1,000 of Net Proceeds)
<TABLE>
<CAPTION>
No. of Years Monthly No. of Years Monthly
Payable Installments Payable Installments
- ----------------------------------------------------------------------
<S> <C> <C> <C>
5 $18.79 20 $6.57
6 16.04 21 6.39
7 14.08 22 6.23
8 12.61 23 6.08
9 11.47 24 5.94
10 10.56 25 5.82
11 9.82 26 5.71
12 9.21 27 5.61
13 8.69 28 5.51
14 8.25 29 5.43
15 7.88 30 5.35
16 7.55
17 7.26
18 7.00
19 6.77
- ----------------------------------------------------------------------
</TABLE>
Form 1192(VA)-NY
Page 29
<PAGE>
PAYOUT PERIOD OPTION TABLE II
(Benchmark Total Return is 3% -- Per $1,000 of Net Proceeds)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Age of Annuitant Age of Annuitant
Last Birthday When Last Birthday When
First Installment is First Installment is
Payable Monthly Installment Payable Monthly Installment
- ------------------------------------------------------------------------------------------------------------------------------------
5 Years 10 Years 15 Years 20 Years 5 Years 10 Years 15 Years 20 Years
Male Certain Certain Certain Certain Male Certain Certain Certain Certain
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
15 2.94 2.94 2.94 2.93 40 3.63 3.62 3.61 3.58
16 2.96 2.95 2.95 2.95 41 3.68 3.67 3.65 3.62
17 2.97 2.97 2.97 2.96 42 3.73 3.72 3.70 3.66
18 2.99 2.99 2.99 2.98 43 3.78 3.77 3.74 3.71
19 3.01 3.01 3.00 3.00 44 3.84 3.82 3.79 3.75
20 3.03 3.02 3.02 3.02 45 3.89 3.88 3.84 3.80
21 3.05 3.04 3.04 3.04 46 3.95 3.93 3.90 3.85
22 3.07 3.06 3.06 3.06 47 4.01 3.99 3.95 3.90
23 3.09 3.08 3.08 3.08 48 4.08 4.05 4.01 3.95
24 3.11 3.11 3.10 3.10 49 4.15 4.12 4.07 4.00
25 3.13 3.13 3.13 3.12 50 4.22 4.19 4.13 4.06
26 3.16 3.15 3.15 3.14 51 4.29 4.26 4.20 4.11
27 3.18 3.18 3.17 3.17 52 4.37 4.33 4.27 4.17
28 3.21 3.20 3.20 3.19 53 4.45 4.41 4.34 4.23
29 3.23 3.23 3.23 3.22 54 4.54 4.49 4.41 4.29
30 3.26 3.26 3.25 3.25 55 4.63 4.58 4.49 4.36
31 3.29 3.29 3.28 3.27 56 4.73 4.67 4.57 4.42
32 3.32 3.32 3.31 3.30 57 4.83 4.76 4.65 4.48
33 3.36 3.35 3.34 3.33 58 4.94 4.87 4.74 4.55
34 3.39 3.39 3.38 3.36 59 5.05 4.97 4.82 4.61
35 3.43 3.42 3.41 3.40 60 5.18 5.08 4.92 4.68
36 3.46 3.46 3.45 3.43 61 5.31 5.20 5.01 4.75
37 3.50 3.50 3.48 3.47 62 5.45 5.32 5.11 4.81
38 3.54 3.54 3.52 3.50 63 5.60 5.45 5.21 4.87
39 3.59 3.58 3.56 3.54 64 5.76 5.59 5.31 4.94
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Form 1192(VA)-NY
Page 30
<PAGE>
PAYOUT PERIOD OPTION TABLE II
(Benchmark Total Return is 3% -- Per $1,000 of Net Proceeds)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Age of Annuitant Age of Annuitant
Last Birthday When Last Birthday When
First Installment is First Installment is
Payable Monthly Installment Payable Monthly Installment
- ------------------------------------------------------------------------------------------------------------------------------------
5 Years 10 Years 15 Years 20 Years 5 Years 10 Years 15 Years 20 Years
Male Certain Certain Certain Certain Male Certain Certain Certain Certain
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
65 5.92 5.73 5.41 5.00 75 8.24 7.39 6.34 5.41
66 6.10 5.88 5.51 5.05 76 8.55 7.57 6.42 5.43
67 6.29 6.03 5.61 5.11 77 8.87 7.74 6.48 5.45
68 6.49 6.19 5.71 5.16 78 9.20 7.91 6.54 5.46
69 6.70 6.35 5.81 5.21 79 9.54 8.08 6.59 5.47
70 6.93 6.52 5.91 5.25 80 9.90 8.24 6.64 5.48
71 7.16 6.69 6.01 5.29 81 10.27 8.39 6.68 5.49
72 7.41 6.86 6.10 5.33 82 10.64 8.53 6.72 5.50
73 7.67 7.04 6.19 5.36 83 11.02 8.66 6.75 5.50
74 7.95 7.22 6.27 5.38 84 11.41 8.79 6.77 5.51
85 11.79 8.90 6.80 5.51
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Form 1192(VA)-NY
Page 31
<PAGE>
PAYOUT PERIOD OPTION TABLE II -- VARIABLE ANNUITY ONLY
(Benchmark Total Return is 5% -- Per $1,000 of Net Proceeds)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Age of Annuitant Age of Anuitant
Last Birthday When Last Birthday When
First Installment is First Installment is
Payable Monthly Installment Payable Monthly Installment
- -----------------------------------------------------------------------------------------------------------------------------------
5 Years 10 Years 15 Years 20 Years 5 Years 10 Years 15 Years 20 Years
Male Certain Certain Certain Certain Male Certain Certain Certain Certain
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
15 4.31 4.30 4.30 4.30 40 4.88 4.87 4.84 4.81
16 4.32 4.32 4.31 4.31 41 4.92 4.91 4.88 4.84
17 4.33 4.33 4.32 4.32 42 4.97 4.95 4.92 4.88
18 4.34 4.34 4.34 4.33 43 5.02 5.00 4.96 4.92
19 4.36 4.35 4.35 4.34 44 5.07 5.04 5.01 4.95
20 4.37 4.37 4.36 4.36 45 5.12 5.09 5.05 5.00
21 4.38 4.38 4.38 4.37 46 5.17 5.15 5.10 5.04
22 4.40 4.40 4.39 4.39 47 5.23 5.20 5.15 5.08
23 4.42 4.41 4.41 4.40 48 5.29 5.26 5.20 5.13
24 4.43 4.43 4.42 4.42 49 5.35 5.32 5.25 5.17
25 4.45 4.45 4.44 4.43 50 5.42 5.38 5.31 5.22
26 4.47 4.47 4.46 4.45 51 5.49 5.44 5.37 5.27
27 4.49 4.49 4.48 4.47 52 5.57 5.51 5.43 5.32
28 4.51 4.51 4.50 4.49 53 5.64 5.59 5.49 5.37
29 4.53 4.53 4.52 4.51 54 5.73 5.66 5.56 5.43
30 4.56 4.55 4.54 4.53 55 5.81 5.74 5.63 5.48
31 4.58 4.58 4.57 4.55 56 5.91 5.83 5.71 5.54
32 4.61 4.60 4.59 4.58 57 6.01 5.92 5.78 5.60
33 4.64 4.63 4.62 4.60 58 6.11 6.01 5.86 5.65
34 4.67 4.66 4.65 4.63 59 6.22 6.12 5.94 5.71
35 4.70 4.69 4.68 4.65 60 6.34 6.22 6.03 5.77
36 4.73 4.72 4.71 4.68 61 6.47 6.33 6.11 5.83
37 4.76 4.75 4.74 4.71 62 6.61 6.45 6.20 5.89
38 4.80 4.79 4.77 4.74 63 6.76 6.58 6.29 5.94
39 4.84 4.83 4.81 4.77 64 6.91 6.70 6.38 6.00
- ------------------------------------------------------------------------------------------------------------------------------------
Form 1192(VA)-NY
Page 32
</TABLE>
<PAGE>
PAYOUT PERIOD OPTION TABLE II -- VARIABLE ANNUITY ONLY
(Benchmark Total Return is 5% -- Per $1,000 of Net Proceeds)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Age of Annuitant Age of Anuitant
Last Birthday When Last Birthday When
First Installment is First Installment is
Payable Monthly Installment Payable Monthly Installment
- -----------------------------------------------------------------------------------------------------------------------------------
5 Years 10 Years 15 Years 20 Years 5 Years 10 Years 15 Years 20 Years
Male Certain Certain Certain Certain Male Certain Certain Certain Certain
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
65 7.08 6.84 6.48 6.05 75 9.37 8.42 7.34 6.42
66 7.25 6.98 6.57 6.10 76 9.67 8.59 7.40 6.44
67 7.44 7.13 6.67 6.15 77 9.98 8.75 7.46 6.45
68 7.64 7.28 6.76 6.19 78 10.31 8.91 7.51 6.47
69 7.85 7.43 6.85 6.24 79 10.65 9.06 7.56 6.48
70 8.07 7.59 6.94 6.28 80 11.00 9.21 7.61 6.49
71 8.30 7.75 7.03 6.31 81 11.36 9.35 7.64 6.49
72 8.55 7.92 7.11 6.34 82 11.72 9.49 7.68 6.50
73 8.81 8.08 7.19 6.37 83 12.09 9.61 7.71 6.50
74 9.08 8.25 7.27 6.40 84 12.47 9.73 7.73 6.51
85 12.84 9.83 7.75 6.51
- ------------------------------------------------------------------------------------------------------------------------------------
Form 1192(VA)-NY
Page 33
</TABLE>
<PAGE>
PAYOUT PERIOD OPTION TABLE II
(Benchmark Total Return is 3% -- Per $1,000 of Net Proceeds)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Age of Annuitant Age of Anuitant
Last Birthday When Last Birthday When
First Installment is First Installment is
Payable Monthly Installment Payable Monthly Installment
- ------------------------------------------------------------------------------------------------------------------------------------
5 Years 10 Years 15 Years 20 Years 5 Years 10 Years 15 Years 20 Years
Female Certain Certain Certain Certain Female Certain Certain Certain Certain
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
15 2.85 2.85 2.85 2.85 40 3.41 3.40 3.40 3.38
16 2.87 2.87 2.86 2.86 41 3.44 3.44 3.43 3.42
17 2.88 2.88 2.88 2.88 42 3.48 3.48 3.47 3.45
18 2.89 2.89 2.89 2.89 43 3.52 3.52 3.51 3.49
19 2.91 2.91 2.91 2.91 44 3.57 3.56 3.55 3.53
20 2.92 2.92 2.92 2.92 45 3.61 3.60 3.59 3.57
21 2.94 2.94 2.94 2.94 46 3.66 3.65 3.64 3.61
22 2.96 2.96 2.95 2.95 47 3.71 3.70 3.68 3.66
23 2.97 2.97 2.97 2.97 48 3.76 3.75 3.73 3.70
24 2.99 2.99 2.99 2.99 49 3.81 3.80 3.78 3.75
25 3.01 3.01 3.01 3.00 50 3.87 3.86 3.84 3.80
26 3.03 3.03 3.03 3.02 51 3.93 3.92 3.89 3.85
27 3.05 3.05 3.05 3.04 52 4.00 3.98 3.95 3.90
28 3.07 3.07 3.07 3.06 53 4.06 4.04 4.01 3.96
29 3.09 3.09 3.09 3.08 54 4.13 4.11 4.08 4.02
30 3.12 3.11 3.11 3.11 55 4.21 4.18 4.14 4.08
31 3.14 3.14 3.13 3.13 56 4.29 4.26 4.21 4.14
32 3.16 3.16 3.16 3.15 57 4.37 4.34 4.29 4.20
33 3.19 3.19 3.18 3.18 58 4.46 4.42 4.36 4.27
34 3.22 3.21 3.21 3.20 59 4.55 4.51 4.44 4.33
35 3.24 3.24 3.24 3.23 60 4.65 4.61 4.53 4.40
36 3.27 3.27 3.27 3.26 61 4.76 4.71 4.61 4.47
37 3.30 3.30 3.30 3.29 62 4.87 4.81 4.71 4.54
38 3.34 3.33 3.33 3.32 63 4.99 4.92 4.80 4.62
39 3.37 3.37 3.36 3.35 64 5.11 5.04 4.90 4.69
- ------------------------------------------------------------------------------------------------------------------------------------
Form 1192(VA)-NY
Page 34
</TABLE>
<PAGE>
PAYOUT PERIOD OPTION TABLE II
(Benchmark Total Return is 3% -- Per $1,000 of Net Proceeds)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Age of Annuitant Age of Anuitant
Last Birthday When Last Birthday When
First Installment is First Installment is
Payable Monthly Installment Payable Monthly Installment
- ------------------------------------------------------------------------------------------------------------------------------------
5 Years 10 Years 15 Years 20 Years 5 Years 10 Years 15 Years 20 Years
Female Certain Certain Certain Certain Female Certain Certain Certain Certain
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
65 5.25 5.16 5.00 4.76 75 7.23 6.78 6.09 5.34
66 5.39 5.29 5.10 4.83 76 7.52 6.98 6.19 5.37
67 5.54 5.43 5.21 4.90 77 7.82 7.18 6.29 5.40
68 5.71 5.57 5.32 4.97 78 8.14 7.38 6.37 5.42
69 5.88 5.72 5.43 5.03 79 8.48 7.58 6.45 5.44
70 6.07 5.88 5.55 5.10 80 8.83 7.78 6.52 5.46
71 6.27 6.05 5.66 5.15 81 9.21 7.98 6.58 5.47
72 6.49 6.22 5.77 5.21 82 9.61 8.16 6.63 5.48
73 6.72 6.40 5.88 5.26 83 10.02 8.34 6.68 5.49
74 6.97 6.59 5.99 5.30 84 10.44 8.50 6.72 5.50
85 10.88 8.65 6.75 5.50
- ------------------------------------------------------------------------------------------------------------------------------------
Form 1192(VA)-NY
Page 35
</TABLE>
<PAGE>
PAYOUT PERIOD OPTION TABLE II -- VARIABLE ANNUITY ONLY
(Benchmark Total Return is 5% -- Per $1,000 of Net Proceeds)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Age of Annuitant Age of Anuitant
Last Birthday When Last Birthday When
First Installment is First Installment is
Payable Monthly Installment Payable Monthly Installment
- -----------------------------------------------------------------------------------------------------------------------------------
5 Years 10 Years 15 Years 20 Years 5 Years 10 Years 15 Years 20 Years
Female Certain Certain Certain Certain Female Certain Certain Certain Certain
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
15 4.24 4.24 4.24 4.24 40 4.67 4.66 4.65 4.64
16 4.25 4.25 4.25 4.24 41 4.70 4.69 4.68 4.66
17 4.26 4.26 4.26 4.25 42 4.73 4.73 4.71 4.69
18 4.27 4.27 4.26 4.26 43 4.77 4.76 4.75 4.73
19 4.28 4.28 4.27 4.27 44 4.81 4.80 4.78 4.76
20 4.29 4.29 4.28 4.28 45 4.85 4.84 4.82 4.79
21 4.30 4.30 4.30 4.29 46 4.89 4.88 4.86 4.83
22 4.31 4.31 4.31 4.30 47 4.93 4.92 4.90 4.87
23 4.32 4.32 4.32 4.32 48 4.98 4.97 4.94 4.90
24 4.34 4.34 4.33 4.33 49 5.03 5.01 4.99 4.95
25 4.35 4.35 4.35 4.34 50 5.08 5.06 5.03 4.99
26 4.37 4.36 4.36 4.35 51 5.14 5.12 5.08 5.03
27 4.38 4.38 4.37 4.37 52 5.20 5.17 5.13 5.08
28 4.40 4.39 4.39 4.38 53 5.26 5.23 5.19 5.13
29 4.41 4.41 4.41 4.40 54 5.32 5.30 5.25 5.18
30 4.43 4.43 4.42 4.42 55 5.39 5.36 5.31 5.23
31 4.45 4.45 4.44 4.43 56 5.47 5.43 5.37 5.28
32 4.47 4.46 4.46 4.45 57 5.55 5.51 5.44 5.34
33 4.49 4.49 4.48 4.47 58 5.63 5.58 5.51 5.40
34 4.51 4.51 4.50 4.49 59 5.72 5.67 5.58 5.46
35 4.53 4.53 4.52 4.51 60 5.81 5.76 5.66 5.52
36 4.56 4.55 4.55 4.54 61 5.92 5.85 5.74 5.58
37 4.58 4.58 4.57 4.56 62 6.02 5.95 5.82 5.64
38 4.61 4.60 4.60 4.58 63 6.14 6.05 5.91 5.71
39 4.64 4.63 4.62 4.61 64 6.26 6.16 6.00 5.77
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PAYOUT PERIOD OPTION TABLE II -- VARIABLE ANNUITY ONLY
(Benchmark Total Return is 5% -- Per $1,000 of Net Proceeds)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Age of Annuitant Age of Anuitant
Last Birthday When Last Birthday When
First Installment is First Installment is
Payable Monthly Installment Payable Monthly Installment
- ------------------------------------------------------------------------------------------------------------------------------------
5 Years 10 Years 15 Years 20 Years 5 Years 10 Years 15 Years 20 Years
Female Certain Certain Certain Certain Female Certain Certain Certain Certain
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
65 6.39 6.28 6.09 5.84 75 8.35 7.83 7.10 6.35
66 6.53 6.40 6.19 5.90 76 8.63 8.02 7.19 6.38
67 6.68 6.53 6.29 5.96 77 8.92 8.21 7.28 6.41
68 6.84 6.67 6.39 6.02 78 9.24 8.40 7.36 6.43
69 7.01 6.81 6.49 6.08 79 9.58 8.59 7.43 6.45
70 7.20 6.97 6.60 6.14 80 9.93 8.78 7.49 6.46
71 7.40 7.13 6.70 6.19 81 10.30 8.96 7.55 6.48
72 7.61 7.29 6.81 6.24 82 10.69 9.14 7.60 6.49
73 7.84 7.47 6.91 6.28 83 11.10 9.31 7.64 6.49
74 8.08 7.65 7.01 6.32 84 11.52 9.46 7.68 6.50
85 11.95 9.60 7.71 6.50
- ------------------------------------------------------------------------------------------------------------------------------------
Form 1192(VA)-NY
Page 37
</TABLE>
<PAGE>
PAYOUT PERIOD OPTION TABLE II
(Benchmark Total Return is 3% -- Per $1,000 of Net Proceeds)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Age of Annuitant Age of Anuitant
Last Birthday When Last Birthday When
First Installment is First Installment is
Payable Monthly Installment Payable Monthly Installment
- ------------------------------------------------------------------------------------------------------------------------------------
5 Years 10 Years 15 Years 20 Years 5 Years 10 Years 15 Years 20 Years
Unisex Certain Certain Certain Certain Unisex Certain Certain Certain Certain
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
20 2.98 2.98 2.97 2.97 45 3.75 3.74 3.72 3.69
21 2.99 2.99 2.99 2.99 46 3.81 3.79 3.77 3.73
22 3.01 3.01 3.01 3.01 47 3.86 3.85 3.82 3.78
23 3.03 3.03 3.03 3.02 48 3.92 3.91 3.88 3.83
24 3.05 3.05 3.05 3.04 49 3.98 3.96 3.93 3.88
25 3.07 3.07 3.07 3.06 50 4.05 4.03 3.99 3.93
26 3.09 3.09 3.09 3.09 51 4.11 4.09 4.05 3.99
27 3.12 3.12 3.11 3.11 52 4.19 4.16 4.11 4.04
28 3.14 3.14 3.14 3.13 53 4.26 4.23 4.18 4.10
29 3.17 3.16 3.16 3.15 54 4.34 4.31 4.25 4.16
30 3.19 3.19 3.18 3.18 55 4.42 4.39 4.32 4.22
31 3.22 3.22 3.21 3.20 56 4.51 4.47 4.40 4.29
32 3.25 3.24 3.24 3.23 57 4.60 4.56 4.47 4.35
33 3.27 3.27 3.27 3.26 58 4.70 4.65 4.56 4.42
34 3.31 3.30 3.30 3.29 59 4.81 4.75 4.64 4.48
35 3.34 3.33 3.33 3.32 60 4.92 4.85 4.73 4.55
36 3.37 3.37 3.36 3.35 61 5.04 4.96 4.82 4.62
37 3.41 3.40 1.39 3.38 62 5.16 5.07 4.91 4.69
38 3.44 3.44 3.43 3.41 63 5.30 5.19 5.01 4.75
39 3.48 3.48 3.47 3.45 64 5.44 5.32 5.11 4.82
40 3.52 3.52 3.50 3.49 65 5.59 5.45 5.21 4.89
41 3.56 3.56 3.54 3.52 66 5.75 5.59 5.32 4.95
42 3.61 3.60 3.59 3.56 67 5.92 5.73 5.42 5.01
43 3.66 3.65 3.63 3 60 68 6.10 5.89 5.53 5.07
44 3.70 3.69 3.67 3.65 69 6.29 6.04 5.63 5.13
- ------------------------------------------------------------------------------------------------------------------------------------
Form 1192(VA)-NY
Page 38
</TABLE>
<PAGE>
PAYOUT PERIOD OPTION TABLE II
(Benchmark Total Return is 3% -- Per $1,000 of Net Proceeds)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Age of Annuitant Age of Anuitant
Last Birthday When Last Birthday When
First Installment is First Installment is
Payable Monthly Installment Payable Monthly Installment
- -----------------------------------------------------------------------------------------------------------------------------------
5 Years 10 Years 15 Years 20 Years 5 Years 10 Years 15 Years 20 Years
Unisex Certain Certain Certain Certain Unisex Certain Certain Certain Certain
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
70 6.50 6.21 5.74 5.18 80 9.37 8.02 6.59 5.47
71 6.72 6.38 5.84 5.23 81 9.74 8.19 6.64 5.48
72 6.95 6.55 5.95 5.27 82 10.12 8.35 6.68 5.49
73 7.20 6.73 6.04 5.31 83 10.52 8.51 6.72 5.50
74 7.46 6.91 6.14 5.35 84 10.92 8.65 6.75 5.50
75 7.74 7.10 6.23 5.38 85 11.33 8.78 6.78 5.51
76 8.03 7.29 6.31 5.40
77 8.34 7.47 6.39 5.43
78 8.67 7.66 6.46 5.45
79 9.01 7.84 6.53 5.46
- ------------------------------------------------------------------------------------------------------------------------------------
Form 1192(VA)-NY
Page 39
</TABLE>
<PAGE>
PAYOUT PERIOD OPTION TABLE II -- VARIABLE ANNUITY ONLY
(Benchmark Total Return is 5% -- Per $1,000 of Net Proceeds)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Age of Annuitant Age of Anuitant
Last Birthday When Last Birthday When
First Installment is First Installment is
Payable Monthly Installment Payable Monthly Installment
- -----------------------------------------------------------------------------------------------------------------------------------
5 Years 10 Years 15 Years 20 Years 5 Years 10 Years 15 Years 20 Years
Unisex Certain Certain Certain Certain Unisex Certain Certain Certain Certain
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
20 4.33 4.33 4.32 4.32 45 4.98 4.97 4.93 4.89
21 4.34 4.34 4.34 4.33 46 5.03 5.01 4.98 4.93
22 4.36 4.35 4.35 4.34 47 5.08 5.06 5.02 4.97
23 4.37 4.37 4.36 4.36 48 5.14 5.11 5.07 5.02
24 4.39 4.38 4.38 4.37 49 5.19 5.16 5.12 5.06
25 4.40 4.40 4.39 4.39 50 5.25 5.22 5.17 5.10
26 4.42 4.41 4.41 4.40 51 5.31 5.28 5.23 5.15
27 4.44 4.43 4.43 4.42 52 5.38 5.34 5.28 5.20
28 4.45 4.45 4.44 4.44 53 5.45 5.41 5.34 5.25
29 4.47 4.47 4.46 4.46 54 5.52 5.48 5.40 5.30
30 4.49 4.49 4.48 4.47 55 5.60 5.55 5.47 5.36
31 4.52 4.51 4.50 4.49 56 5.69 5.63 5.54 5.41
32 4.54 4.53 4.53 4.52 57 5.78 5.71 5.61 5.47
33 4.56 4.56 4.55 4.54 58 5.87 5.80 5.68 5.53
34 4.59 4.58 4.57 4.56 59 5.97 5.89 5.76 5.58
35 4.61 4.61 4.60 4.58 60 6.08 5.99 5.84 5.64
36 4.64 4.64 4.63 4.61 61 6.19 6.09 5.92 5.70
37 4.67 4.67 4.65 4.64 62 6.32 6.20 6.01 5.77
38 4.71 4.70 4.68 4.66 63 6.45 6.31 6.10 5.83
39 4.74 4.73 4.71 4.69 64 6.59 6.43 6.19 5.89
40 4.77 4.76 4.75 4.72 65 6.73 6.56 6.28 5.94
41 4.81 4.80 4.78 4.75 66 6.89 6.69 6.38 6.00
42 4.85 4.84 4.82 4.79 67 7.06 6.83 6.48 6.06
43 4.89 4.88 4.85 4.82 68 7.24 6.97 6.57 6.11
44 4.94 4.92 4.89 4.86 69 7.43 7.12 6.67 6.16
- ------------------------------------------------------------------------------------------------------------------------------------
Form 1192(VA)-NY
Page 40
</TABLE>
<PAGE>
PAYOUT PERIOD OPTION TABLE II -- VARIABLE ANNUITY ONLY
(Benchmark Total Return is 5% -- Per $1,000 of Net Proceeds)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Age of Annuitant Age of Anuitant
Last Birthday When Last Birthday When
First Installment is First Installment is
Payable Monthly Installment Payable Monthly Installment
- ------------------------------------------------------------------------------------------------------------------------------------
5 Years 10 Years 15 Years 20 Years 5 Years 10 Years 15 Years 20 Years
Unisex Certain Certain Certain Certain Unisex Certain Certain Certain Certain
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
70 7.63 7.28 6.77 6.21 80 10.47 9.00 7.55 6.47
71 7.85 7.44 6.86 6.25 81 10.83 9.16 7.60 6.48
72 8.08 7.60 6.96 6.29 82 11.21 9.31 7.64 6.49
73 8.32 7.78 7.05 6.33 83 11.60 9.46 7.67 6.50
74 8.58 7.95 7.14 6.36 84 11.99 9.59 7.70 6.50
75 8.86 8.13 7.22 6.39 85 12.39 9.72 7.73 6.51
76 9.15 8.30 7.30 6.41
77 9.45 8.48 7.37 6.43
78 9.78 8.66 7.44 6.45
79 10.11 8.83 7.50 6.46
- ------------------------------------------------------------------------------------------------------------------------------------
Form 1192(VA)-NY
Page 41
</TABLE>
<PAGE>
This Contract is a FLEXIBLE PREMIUM DEFERRED COMBINATION FIXED AND VARIABLE
ANNUITY CONTRACT.
Annuity Payouts and other values provided by this Contract, when based on the
Investment experience of a separate account, are variable. These values may
increase or decrease based on investment experience and are not guaranteed as to
fixed dollar amount. Annuity Payouts begin as of the Annuity Date. Purchase
Payments are flexible and may be made until the Annuity Date. The Guaranteed
Death Benefit will be paid if the Owner dies prior to the Annuity Date.
FIRST ING LIFE INSURANCE COMPANY OF NEW YORK
A Stock Company
Customer Service Center
P.O. Box 173763, Denver, Colorado 80217
Toll-free Telephone Number: 1 (800) 933-5858
Form 1192(VUL) - NY
<PAGE>
EXHIBIT 5
THE
EXCHEQUER
ANNUITY
APPLICATION
-----------------
-----------------
-----------------
-----------------
-----------------
-----------------
-----------------
-----------------
-----------------
-----------------
-----------------
-----------------
-----------------
FIRST ING LIFE OF NEW YORK
[LOGO OF THE ING GROUP APPEARS HERE]
<PAGE>
The Exchequer Annuity Application Instructions
If you need assistance completing this application, a First ING Life Customer
Service Representative will be happy to help you. Please call us toll-free at
1-800-249-9099.
Initial Purchase Payment
Please indicate the amount of money you are initially investing in The Exchequer
Annuity. The minimum initial amount is $5,000 ($1,000 for IRAs).
Annuity Date
On the Annuity Date you select, The Exchequer Annuity will begin to make Annuity
Payments to the Annuitant. You can elect any Annuity Date up through the
Annuitant's 85th birthday (but no earlier than the second Contract Anniversary).
If this is a Qualified Contract, distributions generally must begin no later
than the first day of April following the calendar year in which you reach age
70 1/2 as determined by the Internal Revenue Code.
Dollar Cost Averaging
You must have at least $10,000 of Accumulation Value in the Fidelity Investments
Money Market Division or the [Neuberger & Berman Limited Maturity Bond Division]
to exercise this option. The minimum transfer amount each month is $100. The
maximum transfer amount is equal to the Accumulation Value in the Division from
which the transfer originates when the election is made, divided by 12. You may
specify a date for Dollar Cost Averaging to terminate. You may also specify a
dollar amount so that when the Accumulation Value reaches this dollar amount,
Dollar Cost Averaging will terminate.
Automatic Rebalancing
If you elect this feature, each quarter we will transfer amounts among the
Variable Account Divisions so that the percentages of your Accumulation Value
match your requested percentage allocations. Unless you specify otherwise, these
percentage allocations will match your initial Purchase Payment allocations.
Systematic Income Program
The Exchequer Annuity allows for income to be withdrawn prior to the Annuity
Date. If you select a monthly withdrawal, the maximum amount is 1.25% of your
Accumulation Value. The maximum amount for quarterly withdrawals is 3.75% of
your Accumulation Value. The minimum withdrawal amount is $100. The Systematic
Income Program will not be processed unless Section 10 of this application is
completed in its entirety.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
What is the primary purpose of the annuity?
<S> <C> <C> <C>
[ ] Retirement Funding [ ] Income Distribution-Life Proceeds [ ] Structured Settlement [ ] Creditor Proof
[ ] Business/Qualified [ ] Savings [ ] Safety/Guarantees [ ] Other____________
[ ] Business/Non-Qualified [ ] Tax Deferral [ ] Relief From Management of Funds _________________
[ ] Personal [ ] Competitive rates [ ] Avoid Probate _________________
Who was the Primary Decision-Maker(s)
[ ] Annuitant [ ] Trustee [ ] Child/Children [ ] Other_____________
[ ] Annuitant and Spouse [ ] Accountant/Attorney [ ] Parent __________________
Occupation of Annuitant
[ ] Professional [ ] Manager/Administrator [ ] Retired
[ ] Business Owner [ ] Technical [ ] Other________________________________
Marital Status
[ ] Single [ ] Married [ ] Divorced [ ] Separated [ ] Widowed
Who Is:
Annuitant Spouse Business Other (Specify)
Owner [ ] [ ] [ ] ______________________________
Beneficiary [ ] [ ] [ ] ______________________________
Premium Payor [ ] [ ] [ ] ______________________________
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
[LETTERHEAD APPEARS HERE] First ING Life Insurance Company of New York Application
P. O. Box 173778, Denver, CO 80217-3778 The Exchequer Annuity
1-800-249-9099 Deferred Combination Fixed and Variable Annuity
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Contract Name_________________________________________ [_] Joint Owner
Owner(s) Address______________________________________ Name________________________________________________________
_____________________________________________ Address_____________________________________________________
Telephone____________________________________ ____________________________________________________________
Social Security Number_______________________ Social Security Number______________________________________
Date of Birth ____/____/____ Sex [_] Male Date of Birth ____/____/____ Sex [_] Male
[_] Female [_] Female
- -----------------------------------------------------------------------------------------------------------------------------------
2 Annuitant Name_________________________________________ [_] Joint or [_] Contingent Annuitant
(If other Address______________________________________ Name________________________________________________________
than Owner) _____________________________________________ Address_____________________________________________________
Telephone____________________________________ ____________________________________________________________
Social Security Number_______________________ Social Security Number______________________________________
Date of Birth ____/____/____ Sex [_] Male Date of Birth ____/____/____ Sex [_] Male
[_] Female [_] Female
- -----------------------------------------------------------------------------------------------------------------------------------
3 Beneficiary PRIMARY BENEFICIARY(ies) CONTINGENT BENEFICIARY(ies)
(ies) Print Full Name % Relationship Print Full Name % Relationship
_____________________________________________ ____________________________________________________________
_____________________________________________ ____________________________________________________________
_____________________________________________ ____________________________________________________________
_____________________________________________ ____________________________________________________________
- -----------------------------------------------------------------------------------------------------------------------------------
4 Initial Initial Purchase Payment $___________________ Annuity Date _______________________________________________
Purchase (see instructions) (see instructions)
Payment/
Annuity Date
- -----------------------------------------------------------------------------------------------------------------------------------
5 Initial Allocate your Initial Purchase Payment among the Divisions listed below. Please
Purchase use whole percentages. If you elect to invest in a particular Division, at least
Payment 1% of your Purchase Payment must be allocated to that Division, provided that
Allocation the allocation to each Division is at least $100. The total must equal 100%.
[Neuberger & Berman] [Fidelity Investments] [INVESCO]
_________% [Limited Maturity Bond] _________% [Asset Manager] _________% [Industrial Income]
_________% [Growth Portfolio] _________% [Growth Portfolio] _________% [High Yield]
_________% [Partners Portfolio] _________% [Overseas] _________% [Utilities]
[Alger American] _________% [Money Market] _________% [Total Return]
_________% [Small Capitalization] _________% [Index 500]
_________% [MidCap Growth] [Van Eck]
_________% [Growth] _________% [Worldwide Hard
_________% [Leveraged AllCap] Assets] _________% Guaranteed Interest
- -----------------------------------------------------------------------------------------------------------------------------------
6 Dollar Cost Please transfer $_____________ from my (check one only) [_] Fidelity Investments Money Market Division
Averaging [_] Neuberger & Berman Limited Maturity Bond Division into the Division(s) selected below (whole numbers only,
[see minimum 1%, provided that the allocation to each Division is at least $100):
instructions]
[Neuberger & Berman] [Fidelity Investments] [INVESCO]
[_] Check if _________% [Limited Maturity Bond] _________% [Asset Manager] _________% [Industrial Income]
you wish to _________% [Growth Portfolio] _________% [Growth Portfolio] _________% [High Yield]
select this _________% [Partners Portfolio] _________% [Overseas] _________% [Utilities]
option. _________% [Money Market] _________% [Total Return]
[Alger American] _________% [Index 500]
_________% [Small Capitalization]
_________% [MidCap Growth] [Van Eck]
_________% [Growth] _________% [Worldwide Hard
_________% [Leveraged AllCap] Assets]
- ----------------------------------------------------------------------------------------------------------------------------------
7 Automatic [_] Check if you wish to select this option
Rebalancing (see instructions)
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
8 Type of Plan
Please indicate type of plan (If no plan is selected, the type of plan will be
issued as Non-Qualified): [ ] Non-Qualified
[ ] Qualified If you are funding a qualified plan, please specify what type:
[ ] IRA: (Tax year ________)
[ ] IRA Rollover [ ] Other___________________________________________________
- --------------------------------------------------------------------------------
9 Replacement
Will the Contract applied for replace any existing annuity or life insurance?
Yes[ ] No[ ]
If yes, please indicate the Company name, amount, type of policy and termination
date:
- --------------------------------------------------------------------------------
10 Systematic Income Program
(see instructions)
Frequency (select one)
[ ] Monthly [ ] Quarterly
Payments to commence on _____ of _______________
Day Month
Income Desired (select one)
[ ] _____% of Accumulation Value; or [ ] $___________________
[ ] I do not want to have Federal income tax withheld.
- --------------------------------------------------------------------------------
11 Agreements and Signatures
Read the following statements carefully and sign below:
By signing below, I/we acknowledge receipt of the Prospectus for the Exchequer
Annuity dated ____________________. I/We also acknowledge receipt of the
Prospectuses for the Variable Account Divisions of the Exchequer Annuity. I/We
understand that this Contract's cash surrender value may increase or decrease on
any day depending on the investment results. No minimum cash surrender value is
guaranteed. This Contract is in accord with my/our anticipated financial needs.
I/We understand that, to the best of my/our knowledge and belief, all statements
and answers in the application form are complete and true and may be relied upon
in determining whether to issue the Contract. My/Our answers will form a part of
any Contract to be issued, and only the Owner(s) and First ING Life have the
authority to modify this application.
If First ING Life amends the application as indicated in the Amendment Section
below, I/we will approve of the change by accepting the Contract where permitted
by state regulation. I/We understand that any change in plan, benefits applied
for, or age at issue must be agreed to in writing.
Under penalties of perjury, I/we certify (check all that apply): 1) [ ] that the
Social Security/Tax Identification Number(s) shown in this application is/are
correct; and 2) [ ] I/we are not subject to backup withholding.
X
________________________________________________________________________________
Signature of Owner
________________________________________________________________________________
Signed at (City, State) Date
________________________________________________________________________________
Signature of Joint Owner/Spouse (if applicable) By signing above as a spouse, I
acknowledge that if this Contract is a Qualified Contract and a Beneficiary
other than myself has been selected, I agree to this designation.
X
________________________________________________________________________________
Signature of Annuitant (if other than Owner)
Please make your check(s) payable to: The Exchequer Annuity/First
ING Life Insurance Company of New York.
- --------------------------------------------------------------------------------
12 Statement of Additional Information
[ ] I hereby request a Statement of Additional Information for the Exchequer
Annuity.
- --------------------------------------------------------------------------------
Representative's Report
Do you have reason to believe that the Contract applied for will replace any
existing annuity or life insurance?
[ ] Yes [ ] No
X_______________________________________________________________________________
Representative's Signature Printed Name & Number of Representative
________________________________________________________________________________
Name of Broker/Dealer/Branch Address of Broker/Dealer/Branch
____________________________________
Agent Number
- --------------------------------------------------------------------------------
FOR OFFICE USE ONLY
Amendments to the Application
- --------------------------------------------------------------------------------
Remarks
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 8(f)
FUND PARTICIPATION AGREEMENT
LAST UPDATED 4/25/97
THIS AGREEMENT made as of the ___ day of _________________, ______ by and
between NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST ("TRUST"), a Delaware
business trust, ADVISERS MANAGERS TRUST ("MANAGERS TRUST"), a New York common
law trust, NEUBERGER&BERMAN MANAGEMENT INCORPORATED ("N&B MANAGEMENT"), a New
York corporation, and _____________________ ("LIFE COMPANY"), a life insurance
company organized under the laws of the State of _______________________.
WHEREAS, TRUST and MANAGERS TRUST are registered with the Securities and
Exchange Commission ("SEC") under the Investment Company Act of 1940, as amended
("40 ACT") as open-end, diversified management investment companies; and
WHEREAS, TRUST is organized as a series fund comprised of several
portfolios ("Portfolios"), the currently available of which are listed on
Appendix A hereto; and
WHEREAS, MANAGERS TRUST is organized as a series fund, comprised of several
portfolios ("Series"), the currently operational of which are listed on Appendix
A hereto; and
WHEREAS, each Portfolio of TRUST will invest all of its net investable
assets in a corresponding Series of MANAGERS TRUST; and
WHEREAS, TRUST was organized to act as the funding vehicle for certain
variable life insurance and/or variable annuity contracts ("Variable Contracts")
offered by life insurance companies through separate accounts of such life
insurance companies ("Participating Insurance Companies") and also offers its
shares to certain qualified pension and retirement plans; and
WHEREAS, TRUST has received an order from the SEC, dated May 5, 1995 (File
No. 812-9164), granting Participating Insurance Companies and their separate
accounts exemptions from the provisions of Sections 9 (a), 13 (a), 15 (a) and 15
(b) of the '40Act, and Rules 6e-2(b) (15) and 6e-3(T) (b) (15) thereunder, to
the extent necessary to permit shares of the Portfolios of the TRUST to be sold
to and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies and certain qualified
pension and retirement plans (the "Order"); and
WHEREAS, LIFE COMPANY has established or will establish one or more
separate accounts ("Separate Accounts") to offer Variable Contracts and is
desirous of having TRUST as one of the underlying funding vehicles for such
Variable Contracts; and
WHEREAS, N&B MANAGEMENT is registered with the SEC as an investment adviser
under the Investment Advisers Act of 1940 and as a broker-dealer under the
Securities Exchange Act of 1934, as amended; and
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WHEREAS, N&B MANAGEMENT is the administrator and distributor of the shares
of each Portfolio of TRUST and investment manager of the corresponding Series of
MANAGERS TRUST; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, LIFE COMPANY intends to purchase shares of TRUST to fund the
aforementioned Variable Contracts and TRUST is authorized to sell such shares to
LIFE COMPANY at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, LIFE COMPANY,
TRUST, MANAGERS TRUST and N&B MANAGEMENT agree as follows:
Article I. SALE OF TRUST SHARES
--------------------
1.1 TRUST agrees to make available to the Separate Accounts of LIFE
COMPANY shares of the selected Portfolios as listed in Appendix B for investment
of proceeds from Variable Contracts allocated to the designated Separate
Accounts, such shares to be offered as provided in TRUST's Prospectus.
1.2 TRUST agrees to sell to LIFE COMPANY those shares of the selected
Portfolios of TRUST which LIFE COMPANY orders, executing such orders on a daily
basis at the net asset value next computed after receipt by TRUST or its
designee of the order for the shares of TRUST. For purposes of this Section 1.3,
LIFE COMPANY shall be the designee of TRUST for receipt of such orders from LIFE
COMPANY and receipt by such designee shall constitute receipt by TRUST; provided
that TRUST receives notice of such order by 8:30 a.m. New York time on the next
following Business Day. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which TRUST calculates its net asset
value pursuant to the rules of the SEC.
1.3 TRUST agrees to redeem for cash, on LIFE COMPANY's request, any full
or fractional shares of trust held by LIFE COMPANY, executing such requests on a
daily basis at the net asset value next computed after receipt by trust or its
designee of the request for redemption. For purposes of this Section 1.2, LIFE
COMPANY shall be the designee of TRUST for receipt of requests for redemption
from LIFE COMPANY and receipt by such designee shall constitute receipt by
TRUST; provided that TRUST receives notice of such request for redemption by
8:30 a.m. New York time on the next following Business Day.
1.4 TRUST shall furnish, on or before the ex-dividend date, notice to LIFE
COMPANY of any income dividends or capital gain distributions payable on the
shares of any Portfolio of TRUST. LIFE COMPANY hereby elects to receive all
such income dividends and capital gain distributions as are payable on a
Portfolio's shares in additional shares of the Portfolio. TRUST shall notify
LIFE COMPANY of the number of shares so issued as payment of such dividends and
distributions.
1.5 TRUST shall make the net asset value per share for the selected
Portfolio(s) available to LIFE COMPANY on a daily basis as soon as reasonably
practicable after the net asset value per share is calculated but shall use its
best efforts to make such net asset value
2
<PAGE>
available by 6:30 p.m. New York time. If TRUST provides LIFE COMPANY with
materially incorrect share net asset value information through no fault of LIFE
COMPANY, LIFE COMPANY on behalf of the Separate Accounts, shall be entitled to
an adjustment to the number of shares purchased or redeemed to reflect the
correct share net asset value. Any material error in the calculation of net
asset value per share, dividend or capital gain information shall be reported
promptly upon discovery to LIFE COMPANY.
1.6 At the end of each Business Day, LIFE COMPANY shall use the
information described in Section 1.5 to calculate Separate Account unit values
for the day. Using these unit values, LIFE COMPANY shall process each such
Business Day's Separate Account transactions based on requests and premiums
received by it by the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m. New York time) to determine the net dollar amount
of TRUST shares which shall be purchased or redeemed at that day's closing net
asset value per share. The net purchase or redemption orders so determined
shall be transmitted to TRUST by LIFE COMPANY by 8:30 a.m. New York Time on the
Business Day next following LIFE COMPANY's receipt of such requests and premiums
in accordance with the terms of Sections 1.2 and 1.3 hereof.
1.7 If LIFE COMPANY's order requests the purchase of TRUST shares, LIFE
COMPANY shall pay for such purchase by wiring federal funds to TRUST or its
designated custodial account on the day the order is transmitted by LIFE
COMPANY. If LIFE COMPANY's order requests a net redemption resulting in a
payment of redemption proceeds to LIFE COMPANY, TRUST shall wire the redemption
proceeds to LIFE COMPANY by the next Business Day, unless doing so would require
TRUST to dispose or portfolio securities or otherwise incur additional costs,
but in such event, proceeds shall be wired to LIFE COMPANY within seven days and
TRUST shall notify the person designated in writing by LIFE COMPANY as the
recipient for such notice of such delay by 3:00 p.m. New York Time the same
Business Day that LIFE COMPANY transmits the redemption order to TRUST. If LIFE
COMPANY's order requests the application of redemption proceeds from the
redemption of shares to the purchase of shares of another fund administered or
distributed by N&B MANAGEMENT, TRUST shall so apply such proceeds the same
Business Day that LIFE COMPANY transmits such order to TRUST.
1.8 Notwithstanding Section 1.7, TRUST reserves the right to suspend the
right of redemption or postpone the date of payment or satisfaction upon
redemption consistent with Section 22(e) of the 40 Act and any rules thereunder.
1.9 TRUST agrees that all shares of the Portfolios of TRUST will be sold
only to Participating Insurance Companies which have agreed to participate in
TRUST to fund their Separate Accounts and/or to certain qualified pension and
other retirement plans, all in accordance with the requirements of Section
817(h) of the Internal Revenue Code of 1986, as amended ("Code") and Treasury
Regulation 1.817-5. Shares of the Portfolios of TRUST will not be sold directly
to the general public.
1.10 TRUST may refuse to sell shares of any Portfolio to any person, or
suspend or terminate the offering of the shares of any Portfolio if such action
is required by law or by
3
<PAGE>
regulatory authorities having jurisdiction or is, in the sole discretion of the
Board of Trustees of TRUST, acting in good faith and in light of its fiduciary
duties under federal and any applicable state laws, deemed necessary and in the
best interests of the shareholders of such Portfolios.
Article II. REPRESENTATIONS AND WARRANTIES
------------------------------
2.1 LIFE COMPANY represents and warrants that it is an insurance company
duly organized and in good standing under the laws of ___________________ and
that it has legally and validly established each Separate Account as a
segregated asset account under such laws, and that _____________________, the
principal underwriter for the Variable Contracts, is registered as a broker-
dealer under the Securities Exchange Act of 1934.
2.2 LIFE COMPANY represents and warrants that it has registered or, prior
to any issuance or sale of the Variable Contracts, will register each Separate
Account as a unit investment trust ("UIT") in accordance with the provisions of
the '40 Act and cause each Separate Account to remain so registered to serve as
a segregated asset account for the Variable Contracts, unless an exemption from
registration is available.
2.3 LIFE COMPANY represents and warrants that the Variable Contracts will
be registered under the Securities Act of 1933 (the "'33 Act") unless an
exemption from registration is available prior to any issuance or sale of the
Variable Contracts and that the Variable Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws
and further that the sale of the Variable Contracts shall comply in all material
respects with state insurance law suitability requirements.
2.4 LIFE COMPANY represents and warrants that the Variable Contracts are
currently and at the time of issuance will be treated as life insurance,
endowment or annuity contracts under applicable provisions of the Code, that it
will maintain such treatment and that it will notify TRUST immediately upon
having a reasonable basis for believing that the Variable Contracts have ceased
to be so treated or that they might not be so treated in the future.
2.5 LIFE COMPANY represents and warrants that it shall deliver such
prospectuses, statements of additional information, proxy statements and
periodic reports of the Trust as required to be delivered under applicable
federal or state law and interpretations of federal and state securities
regulators thereunder in connection with the offer, sale or acquisition of the
Variable Contracts.
2.6 TRUST represents and warrants that the Portfolio shares offered and
sold pursuant to this Agreement will be registered under the '33 Act and sold in
accordance with all applicable federal and state laws, and TRUST shall be
registered under the '40 Act prior to and at the time of any issuance or sale of
such shares. TRUST shall amend its registration statement under the '33 Act and
the '40 Act from time to time as required in order to effect the continuous
offering of its shares. TRUST shall register and qualify its shares for sale in
accordance with the laws of the various states only if and to the extent deemed
advisable by TRUST.
4
<PAGE>
2.7 TRUST represents and warrants that each Portfolio will comply with the
diversification requirements set forth in Section 817(h) of the Code, and the
rules and regulations thereunder, including without limitation Treasury
Regulation 1.817-5, and will notify LIFE COMPANY immediately upon having a
reasonable basis for believing any Portfolio has ceased to comply or might not
so comply and will immediately take all reasonable steps to adequately diversify
the Portfolio to achieve compliance within the grace period afforded by
Regulation 1.817-5.
2.8 TRUST represents and warrants that each Portfolio invested in by the
Separate Account is currently qualified as a "regulated investment company"
under Subchapter M of the Code, that it will make every effort to maintain such
qualification and will notify LIFE COMPANY immediately upon having a reasonable
basis for believing it has ceased to so qualify or might not so qualify in the
future.
Article III. PROSPECTUS AND PROXY STATEMENTS
-------------------------------
3.1 TRUST shall prepare and be responsible for filing with the SEC and any
state regulators requiring such filing all shareholder reports, notices, proxy
materials (or similar materials such as voting instruction solicitation
materials), prospectuses and statements of additional information of TRUST.
TRUST shall bear the costs of registration and qualification of shares of the
Portfolios, preparation and filing of the documents listed in this Section 3.1
and all taxes to which an issuer is subject on the issuance and transfer of its
shares.
3.2 TRUST will bear the printing costs (or duplicating costs with respect
to the statement of additional information) and mailing costs associated with
the delivery of the following TRUST (or individual Portfolio) documents, and any
supplements thereto, to existing Variable Contract owners of LIFE COMPANY:
(i) prospectuses and statements of additional information;
(ii) annual and semi-annual reports; and
(iii) proxy materials.
LIFE COMPANY will submit any bills for printing, duplicating and/or
mailing costs, relating to the TRUST documents described above, to TRUST for
reimbursement by TRUST. LIFE COMPANY shall monitor such costs and shall use its
best efforts to control these costs. LIFE COMPANY will provide TRUST on a semi-
annual basis, or more frequently as reasonably requested by TRUST, with a
current tabulation of the number of existing Variable Contract owners of LIFE
COMPANY whose Variable Contract values are invested in TRUST. This tabulation
will be sent to TRUST in the form of a letter signed by a duly authorized
officer of LIFE COMPANY attesting to the accuracy of the information contained
in the letter. If requested by LIFE COMPANY, the TRUST shall provide such
documentation (including a final copy of the TRUST's prospectus as set in type
or in camera-ready copy) and other assistance as is reasonably necessary in
order for LIFE COMPANY to print together in one document the current prospectus
for the Variable Contracts issued by LIFE COMPANY and the current
5
<PAGE>
prospectus for the TRUST. Should LIFE COMPANY wish to print any of these
documents in a format different from that provided by TRUST, LIFE COMPANY shall
provide Trust with sixty (60) days' prior written notice and LIFE COMPANY shall
bear the cost associated with any format change.
3.3 TRUST will provide, at its expense, LIFE COMPANY with the following
TRUST (or individual Portfolio) documents, and any supplements thereto, with
respect to prospective Variable Contract owners of LIFE COMPANY:
(i) camera-ready copy of the current prospectus for printing by the
LIFE COMPANY;
(ii) a copy of the statement of additional information suitable for
duplication;
(iii) camera-ready copy of proxy material suitable for printing; and
(iv) camera-ready copy of the annual and semi-annual reports for
printing by the LIFE COMPANY.
3.4 TRUST will provide LIFE COMPANY with at least one complete copy of all
prospectuses, statements of additional information, annual and semi-annual
reports, proxy statements, exemptive applications and all amendments or
supplements to any of the above that relate to the Portfolios promptly after the
filing of each such document with the SEC or other regulatory authority. LIFE
COMPANY will provide TRUST with at least one complete copy of all prospectuses,
statements of additional information, annual and semi-annual reports, proxy
statements, exemptive applications and all amendments or supplements to any of
the above that relate to a Separate Account promptly after the filing of each
such document with the SEC or other regulatory authority.
Article IV. SALES MATERIALS
---------------
4.1 LIFE COMPANY will furnish, or will cause to be furnished, to TRUST and
N&B MANAGEMENT, each piece of sales literature or other promotional material in
which TRUST, MANGERS TRUST or N&B MANAGEMENT is named, at least fifteen (15)
Business Days prior to its intended use. No such material will be used if TRUST,
MANAGERS TRUST or N&B MANAGEMENT objects to its use in writing within ten (10)
Business Days after receipt of such material.
4.2 TRUST and N&B MANAGEMENT will furnish, or will cause to be furnished,
to LIFE COMPANY, each piece of sales literature or other promotional material in
which LIFE COMPANY or its Separate Accounts are named, at least fifteen (15)
Business Days prior to its intended use. No such material will be used if LIFE
COMPANY objects to its use in writing within ten (10) Business Days after
receipt of such material.
4.3 TRUST and its affiliates and agents shall not give any information or
make any representations on behalf of LIFE COMPANY or concerning LIFE COMPANY,
the Separate
6
<PAGE>
Accounts, or the Variable Contracts issued by LIFE COMPANY, other
than the information or representations contained in a registration statement or
prospectus for such Variable Contracts, as such registration statement and
prospectus may be amended or supplemented from time to time, or in reports of
the Separate Accounts or reports prepared for distribution to owners of such
Variable Contracts, or in sales literature or other promotional material
approved by LIFE COMPANY or its designee, except with the written permission of
LIFE COMPANY.
4.4 LIFE COMPANY and its affiliates and agents shall not give any
information or make any representations on behalf of TRUST or concerning TRUST
other than the information or representations contained in a registration
statement or prospectus for TRUST, as such registration statement and prospectus
may be amended or supplemented from time to time, or in sales literature or
other promotional material approved by TRUST or its designee, except with the
written permission of TRUST.
4.5 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without limitation,
advertisements (such as material published, or designed for use, in a newspaper,
magazine or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures or other public media),
sales literature (such as any written communication distributed or made
generally available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts, or reprints or
excerpts or any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made
generally available to some or all agents or employees, registration statements,
prospectuses, statements of additional information, shareholder reports and
proxy materials, and any other material constituting sales literature or
advertising under National Association of Securities Dealers, Inc. rules, the
'40 Act or the '33 Act.
Article V. POTENTIAL CONFLICTS
-------------------
5.1 The Board of Trustees of TRUST and MANAGER TRUST (the "Boards") will
monitor TRUST and MANAGERS TRUST, respectively, (collectively the "Funds"), for
the existence of any material irreconcilable conflict between the interests of
the Variable Contract owners of Participating Insurance Company Separate
Accounts investing in the Funds. A material irreconcilable conflict may arise
for a variety of reasons, including: (a) state insurance regulatory authority
action; (b) a change in applicable federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter ruling, or
any similar action by insurance, tax, or securities regulatory authorities; (c)
an administrative or judicial decision in any relevant proceeding; (d) the
manner in which the investments of the Funds are being managed; (e) a difference
in voting instructions given by variable annuity and variable life insurance
contract owners or by contract owners of different Participating Insurance
Companies; or (f) a decision by a Participating Insurance Company to disregard
voting instructions of Variable Contract owners.
5.2 LIFE COMPANY will report any potential or existing conflicts to the
Boards. LIFE COMPANY will be responsible for assisting each appropriate Board in
carrying out its responsibilities under the Conditions set forth in the notice
issued by the SEC for the Funds on April 12, 1995 (the "Notice") (Investment
Company Act Release No. 21003), which LIFE
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<PAGE>
COMPANY has reviewed, by providing each appropriate Board with all information
reasonably necessary for it to consider any issues raised. This responsibility
includes, but is not limited to, an obligation by LIFE COMPANY to inform each
appropriate Board whenever Variable Contract owner voting instructions are
disregarded by LIFE COMPANY. These responsibilities will be carried out with a
view only to the interests of the Variable Contract owners.
5.3 If a majority of the Board of a Fund or a majority of its
disinterested trustees or directors, determines that a material irreconcilable
conflict exists, affecting the LIFE COMPANY, LIFE COMPANY, at its expense and to
the extent reasonably practicable (as determined by a majority of disinterested
trustees or directors), will take any steps necessary to remedy or eliminate the
irreconcilable material conflict, including: (a) withdrawing the assets
allocable to some or all of the Separate Accounts from the Funds or any series
thereof and reinvesting those assets in a different investment medium, which may
include another series of TRUST or MANAGERS TRUST, or another investment company
or submitting the questions as to whether such segregation should be implemented
to a vote of all affected Variable Contract owners and, as appropriate,
segregating the assets of any appropriate group (i.e., Variable Contract owners
of one or more Participating Insurance Companies) that votes in favor of such
segregation, or offering to the affected Variable Contract owners the option of
making such a change; and (b) establishing a new registered management
investment company or managed separate account. If a material irreconcilable
conflict arises because of LIFE COMPANY's decision to disregard Variable
Contract owner voting instructions, and that decision represents a minority
position or would preclude a majority vote, LIFE COMPANY may be required, at the
election of the relevant Fund, to withdraw its Separate Account's investment in
such Fund, and no charge or penalty will be imposed as a result of such
withdrawal. The responsibility to take such remedial action shall be carried out
with a view only to the interests of the Variable Contract owners.
For the purposes of this Section 5.3, a majority of the disinterested
members of the applicable Board shall determine whether or not any proposed
action adequately remedies any irreconcilable material conflict, but in no event
will the relevant Fund or N&B MANAGEMENT (or any other investment adviser of the
Funds) be required to establish a new funding medium for any Variable Contract.
Further, LIFE COMPANY shall not be required by this Section 5.3 to establish a
new funding medium for any Variable Contract if any offer to do so has been
declined by a vote of a majority of Variable Contract owners materially affected
by the irreconcilable material conflict.
5.4 Any Board's determination of the existence of an irreconcilable
material conflict and its implications shall be made known promptly and in
writing to LIFE COMPANY.
5.5 No less than annually, LIFE COMPANY shall submit to the Boards such
reports, materials or data as such Boards may reasonably request so that the
Boards may fully carry out the obligations imposed upon them by these
Conditions. Such reports, materials, and data shall be submitted more frequently
if deemed appropriate by the applicable Boards.
Article VI. VOTING
------
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<PAGE>
6.1 LIFE COMPANY will provide pass-through voting privileges to all
Variable Contract owners so long as the SEC continues to interpret the '40 Act
as requiring pass-through voting privileges for Variable Contract owners. This
condition will apply to UIT-Separate Accounts investing in TRUST and to managed
separate accounts investing in MANAGERS TRUST to the extent a vote is required
with respect to matters relating to MANAGERS TRUST. Accordingly, LIFE COMPANY,
where applicable, will vote shares of a Fund held in its Separate Accounts in a
manner consistent with voting instructions timely received from its Variable
Contract owners. LIFE COMPANY will be responsible for assuring that each of its
Separate Accounts that participates in any Fund calculates voting privileges in
a manner consistent with other participants as defined in the Conditions set
forth in the Notice ("Participants"). The obligation to calculate voting
privileges in a manner consistent with all other Separate Accounts investing in
a Fund will be a contractual obligation of all Participants under the agreements
governing participation in the Funds. Each Participant will vote shares for
which it has not received timely voting instructions, as well as shares it owns,
in the same proportion as its votes those shares for which it has received
voting instructions.
6.2 If and to the extent Rule 6e-2 and Rule 6e-3 (T) are amended, or Rule
6e-3 is adopted, to provide exemptive relief from any provision of the '40 Act
or the rules thereunder with respect to mixed and shared funding on terms and
conditions materially different from any exemptions granted in the Order, then
TRUST, MANAGERS TRUST and/or the Participants, as appropriate, shall take such
steps as may be necessary to comply with Rule 6e-2 and Rule 6e-3 (T), as
amended, and Rule 6e-3, as adopted, to the extent such Rules are applicable.
Article VII. INDEMNIFICATION
---------------
7.1 Indemnification by LIFE COMPANY. LIFE COMPANY agrees to indemnify and
-------------------------------
hold harmless TRUST, MANAGERS TRUST, N&B MANAGEMENT and each of their Trustees,
directors, officers, employees and agents and each person, if any, who controls
TRUST or MANAGERS TRUST or N&B MANAGEMENT within the meaning of Section 15 or
the '33 Act (collectively, the "Indemnified Parties" for purposes of this
Article VII) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of LIFE COMPANY, which
consent shall not be unreasonably withheld) or litigation (including legal and
other expenses), to which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
are related to the offer, sale or acquisition of TRUST's shares or the Variable
Contracts and:
(a) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the
Registration Statement or prospectus for the Variable Contracts or
contained in the Variable Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party
if such statement or omission or such alleged statement or
omission was made in reliance upon
9
<PAGE>
and in conformity with information furnished to LIFE COMPANY by or
on behalf of TRUST for use in the registration statement or
prospectus for the Variable Contracts or in the Variable Contracts
or sales literature (or any amendment or supplement) or otherwise
for use in connection with the sale of the Variable Contracts or
TRUST shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature of TRUST
not supplied by LIFE COMPANY, or persons under its control) or
wrongful conduct of LIFE COMPANY or persons under its control,
with respect to the sale or distribution of the Variable Contracts
or TRUST shares; or
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus,
or sales literature of TRUST or any amendment thereof or
supplement thereto or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading if such statement or
omission or such alleged statement or omission was made in
reliance upon and in conformity with information furnished to
TRUST by or on behalf of LIFE COMPANY; or
(d) arise as a result of any failure by LIFE COMPANY to substantially
provide the services and furnish the materials under the terms of
this Agreement; or
(e) arise out of our result from any material breach of any
representation and/or warranty made by LIFE COMPANY in this
Agreement or arise out of or result from any other material breach
of this Agreement by LIFE COMPANY.
7.2 LIFE COMPANY shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such performance of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations or duties under this
Agreement or to TRUST, whichever is applicable.
7.3 LIFE COMPANY shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified LIFE COMPANY in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify LIFE COMPANY of any
such claim shall not relieve LIFE COMPANY from any liability which it may have
to the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any
10
<PAGE>
such action is brought against an Indemnified Party, LIFE COMPANY shall be
entitled to participate at its own expense in the defense of such action. LIFE
COMPANY also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from LIFE COMPANY to
such party of LIFE COMPANY's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and LIFE COMPANY will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
7.4 Indemnification by N&B MANAGEMENT. N&B MANAGEMENT agrees to indemnify
---------------------------------
and hold harmless LIFE COMPANY and each of its directors, officers, employees,
and agents and each person, if any, who controls LIFE COMPANY within the meaning
of Section 15 of the '33 Act (collectively, the "Indemnified Parties" for the
purposes of this Article VII) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
N&B MANAGEMENT which consent shall not be unreasonably withheld) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute, or regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the offer, sale or acquisition of TRUST's
shares or the Variable Contracts and:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of TRUST
(or any amendment or supplement to any of the foregoing), or arise
out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided
that this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity
with information furnished to N&B MANAGEMENT or TRUST by or on
behalf of LIFE COMPANY for use in the registration statement or
prospectus for TRUST or in sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale of
the Variable Contracts or TRUST shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature for the
Variable Contracts not supplied by N&B MANAGEMENT or persons under
its control) or wrongful conduct of TRUST or N&B MANAGEMENT or
persons under their control, with respect to the sale or
distribution of the Variable Contracts or TRUST shares; or
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus,
or sales literature covering the Variable Contracts, or any
amendment thereof or supplement
11
<PAGE>
thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, if such statement or
omission or such alleged statement or omission was made in
reliance upon and in conformity with information furnished to LIFE
COMPANY for inclusion therein by or on behalf of TRUST; or
(d) arise as a result of (i) a failure by TRUST to substantially
provide the services and furnish the materials under the terms of
this Agreement; or (ii) a failure by a Portfolio(s) invested in by
the Separate Account to comply with the diversification
requirements of Section 817(h) of the Code; or (iii) a failure by
a Portfolio(s) invested in by the Separate Account to qualify as a
"regulated investment company" under Subchapter M of the Code; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by N&B MANAGEMENT in this
Agreement or arise out of or result from any other material breach
of this Agreement by N&B MANAGEMENT.
7.5 N&B MANAGEMENT shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation to which
an Indemnified Party would otherwise be subject by reason of such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement or to LIFE
COMPANY.
7.6 N&B MANAGEMENT shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified N&B MANAGEMENT in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify N&B MANAGEMENT of
any such claim shall not relieve N&B MANAGEMENT from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, N&B MANAGEMENT shall be entitled to participate
at its own expense in the defense thereof. N&B MANAGEMENT also shall be entitled
to assume the defense thereof, with counsel satisfactory to the party named in
the action. After notice from N&B MANAGEMENT to such party of N&B MANAGEMENT's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and N&B MANAGEMENT
will not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
Article VIII. TERM: TERMINATION
------------------
12
<PAGE>
8.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions herein.
8.2 This Agreement shall terminate in accordance with the following
provisions:
(a) At the option of LIFE COMPANY or TRUST at any time from the date
hereof upon 180 days' notice, unless a shorter time is agreed to
by the parties;
(b) At the option of LIFE COMPANY, if TRUST shares are not reasonably
available to meet the requirements of the Variable Contracts as
determined by LIFE COMPANY. Prompt notice of election to terminate
shall be furnished by LIFE COMPANY, said termination to be
effective ten days after receipt of notice unless TRUST makes
available a sufficient number of shares to reasonably meet the
requirements of the Variable Contracts within said ten-day period;
(c) At the option of LIFE COMPANY, upon the institution of formal
proceedings against TRUST by the SEC, or any other regulatory
body, the expected or anticipated ruling, judgment or outcome of
which would, in LIFE COMPANY's reasonable judgment, materially
impair TRUST's ability to meet and perform TRUST's obligations and
duties hereunder. Prompt notice of election to terminate shall be
furnished by LIFE COMPANY with said termination to be effective
upon receipt of notice;
(d) At the option of TRUST, upon the institution of formal proceedings
against LIFE COMPANY by the SEC,. The National Association of
Securities Dealers, Inc., or any other regulatory body, the
expected or anticipated ruling, judgment or outcome of which
would, in TRUST's reasonable judgment, materially impair LIFE
COMPANY's ability to meet and perform its obligations and duties
hereunder. Prompt notice of election to terminate shall be
furnished by TRUST with said termination to be effective upon
receipt of notice;
(e) In the event TRUST's shares are not registered, issued or sold in
accordance with applicable state or federal law, or such law
precludes the use of such shares as the underlying investment
medium of Variable Contracts issued or to be issued by LIFE
COMPANY. Termination shall be effective upon such occurrence
without notice;
(f) At the option of TRUST if the Variable Contracts cease to qualify
as annuity contracts or life insurance contracts, as applicable,
under the Code, or if TRUST reasonably believes that the Variable
Contracts may fail to so qualify. Termination shall be effective
upon receipt of notice by LIFE COMPANY;
13
<PAGE>
(g) At the option of LIFE COMPANY, upon TRUST's breach of any material
provision of this Agreement, which breach has not been cured to
the satisfaction of LIFE COMPANY within ten days after written
notice of such breach is delivered to TRUST:
(h) At the option of TRUST, upon LIFE COMPANY's breach of any material
provision of this Agreement, which breach has not been cured to
the satisfaction of TRUST within ten days after written notice of
such breach is delivered to LIFE COMPANY;
(i) At the option of TRUST, if the Variable Contracts are not
registered, issued or sold in accordance with applicable federal
and/or state law. Termination shall be effective immediately upon
such occurrence without notice.
(j) In the event this Agreement is assigned without the prior written
consent of LIFE COMPANY, TRUST, MANAGERS TRUST AND N&B MANAGEMENT,
termination shall be effective immediately upon such occurrence
without notice.
8.3 Notwithstanding any termination of this Agreement pursuant to Section
8.2 hereof, TRUST at its option may elect to continue to make available
additional TRUST shares, as provided below, for so long as TRUST desires
pursuant to the terms and conditions of this Agreement, for all Variable
Contracts in effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"). Specifically, without
limitation, if TRUST so elects to make additional TRUST shares available, the
owners of the Existing Contracts or LIFE COMPANY, whichever shall have legal
authority to do so, shall be permitted to reallocate investments in TRUST,
redeem investment in TRUST and/or invest in TRUST upon the payment of additional
premiums under the Existing Contracts. In the event of a termination of this
Agreement pursuant to Section 8.2 hereof, TRUST and N&B MANAGEMENT, as promptly
as is practicable under the circumstances, shall notify LIFE COMPANY whether
TRUST elects to continue to make TRUST shares available after such termination.
If TRUST shares continue to be made available after such termination, the
provisions of this Agreement shall remain in effect and thereafter either TRUST
or LIFE COMPANY may terminate the Agreement, as so continued pursuant to this
Section 8.3, upon sixty (60) days prior written notice to the other party.
8.4 Except as necessary to implement Variable Contract owner initiated
transactions, or as required by state insurance laws or regulations, LIFE
COMPANY shall not redeem the shares attributable to the Variable Contracts (as
opposed to the shares attributable to LIFE COMPANY's assets held in the Separate
Accounts), and LIFE COMPANY shall not prevent Variable Contract owners from
allocating payments to a Portfolio that was otherwise available under the
Variable Contracts, until thirty (30) days after the LIFE COMPANY shall have
notified TRUST of its intention to do so.
14
<PAGE>
Article IX. Notices
-------
Any notice hereunder shall be given by registered or certified mail return
receipt requested to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.
If to TRUST, MANAGERS TRUST or N&B MANAGEMENT:
Neuberger&Berman Management Incorporated
605 Third Avenue
New York, NY 10158-0006
Attention: Ellen Metzger, General Counsel
If to LIFE COMPANY:
Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.
Article X. MISCELLANEOUS
-------------
10.1 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
10.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
10.3 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
10.4 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York. It
shall also be subject to the provisions of the federal securities laws and the
rules and regulations thereunder and to any orders of the SEC granting exemptive
relief therefrom and the conditions of such orders.
10.5 The parties agree that the assets and liabilities of each Series are
separate and distinct from the assets and liabilities of each other Series. No
Series shall be liable or shall be charged for any debt, obligation or liability
of any other Series. No Trustee, officer or agent shall be personally liable
for such debt, obligation or liability of any Series or Portfolio and no
Portfolio or other investor, other than the Portfolio or other investors
investing in the Series which incurs a debt, obligation or liability, shall be
liable therefor.
15
<PAGE>
10.6 Each party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the SEC, the National
Association of Securities Dealers, Inc. and state insurance regulators) and
shall permit such authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby.
10.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
10.8 No provision of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by TRUST,
MANAGERS TRUST, N&B MANAGEMENT and the LIFE COMPANY.
16
<PAGE>
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Fund Participation Agreement as of the date and year first above
written.
NEUBERGER&BERMAN
ADVISERS MANAGEMENT TRUST
By: ___________________________________
Name:
Title:
ADVISERS MANAGERS TRUST
By: ___________________________________
Name:
Title:
NEUBERGER&BERMAN
MANAGEMENT INCORPORATED
By: ___________________________________
Name:
Title:
[LIFE COMPANY]
By: ___________________________________
Name:
Title:
17
<PAGE>
Appendix A
<TABLE>
<CAPTION>
Neuberger&Berman Advisers Corresponding Series of
Management Trust and its Series (Portfolios) Advisers Managers Trust (Series)
- -------------------------------------------- --------------------------------
<S> <C>
Balanced Portfolio AMT Balanced Investments
Government Income Portfolio AMT Government Income Investments
Growth Portfolio AMT Growth Investments
Limited Maturity Bond Portfolio AMT Limited Maturity Bond
Investments
Liquid Asset Portfolio AMT Liquid Asset Investments
Partners Portfolio AMT Partners Investments
International Portfolio AMT International Investments
</TABLE>
18
<PAGE>
Appendix B
Separate Accounts Selected Portfolios
- ----------------- -------------------
19
<PAGE>
EXHIBIT 9
[LETTERHEAD OF FIRST ING LIFE OF NEW YORK APPEARS HERE]
April 16, 1997
First ING Life Insurance Company of New York
Security Life Center
1290 Broadway
Denver, Colorado 80203-5699
Dear Sirs:
This opinion is furnished in connection with the Form N-4 Registration Statement
being filed by First ING Life Insurance Company of New York ("First ING") under
the Securities Act of 1933, as amended (the "Act"), for the offering of units of
interest ("Units") in Separate Account A1 under the Exchequer Variable Annuity
individual deferred variable annuity contract ("Contract") to be issued by First
ING. The securities being registered under the Act are to be offered in the
manner described in the Registration Statement.
I have supervised the examination of all such corporate records of First ING and
such other documents and such laws as I consider appropriate as a basis for the
opinion hereinafter expressed. On the basis of such examination, it is my
opinion that
1. First ING is a corporation duly organized and validly existing under the
laws of the State of New York.
2. First ING, formerly The Urbaine Life Reinsurance Company, underwent a name
change which was filed on June 2, 1994, pursuant to the Laws of its
domiciliary State of New York.
3. Separate Account A1 was duly created as a separate investment account of
First ING pursuant to the laws of the State of New York.
4. The assets of Separate Account A1 will be owned by First ING. Under New
York law and the provisions of the Contract, the income, gains and losses,
whether or not realized, from assets allocated to Separate Account A1 must
be credited to or charged against such Account, without regard to the other
income, gains or losses of First ING.
5. The Contract provides that the assets of Separate Account A1 may not be
charged with liabilities arising out of any other business First ING may
conduct.
<PAGE>
First ING Life Insurance Company of New York
April 16, 1997
Page 2
6. The Contract and the Units in Separate Account A1 to be issued under the
Contract have been duly authorized by the corporation; and the Contract,
including the Units thereunder, when issued and delivered, will constitute
validly issued and binding obligations of First ING in accordance with
their terms.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of my name under the caption "Legal Matters" in the
Prospectus contained in the Registration Statement.
Very truly yours,
/s/: JOHN R. BARMEYER
John R. Barmeyer
Chief Legal Officer and
Corporate Secretary
First ING Life Insurance Company
<PAGE>
Exhibit 10
Consent of Independent Auditors
We consent to the reference to our firm under the captions "Experts" and
"Financial Statements" and to the use of our reports dated April 9, 1997 (with
respect to the financial statements of First ING of New York Separate Account
A1), April 11, 1997 (with respect to the financial statements of First ING Life
Insurance Company of New York), and April 11, 1997 (with respect to the
financial statement schedule of First ING Life Insurance Company of New York)
included in Pre-Effective Amendment No. 2 to the Registration Statement (Form
N-4 No. 33-82890 and 811-8700) and related Prospectus of First ING of New York
Separate Account A1 dated May 1, 1997.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Denver, Colorado
April 28, 1997
<PAGE>
EXHIBIT 13
Average Annual Total Return for Non-Money Market Subaccounts
P(1+T)/n/ = ERV
Where:
[P] equals a hypothetical initial purchase payment of $1,000
[T] equals the average annual total return (or fractional period thereof)
[n] equals the number of years
[ERV] equals the ending redeemable value of a hypothetical $1,000 Purchase
Payment made at the beginning of the period
<PAGE>
VIP MONEY MARKET
7-DAY YIELD AND EFFECTIVE YIELD
7-day period ended 12/31/96
YIELD
- -----
(Base Period Return) x (365/7)
= 0.000722518 x (365/7)
= 3.77%
EFFECTIVE YIELD
- ---------------
(1 + Base Period Return) 365/7 - 1
= (1 + 0.000722518) 365/7 - 1
= 3.84%
WHERE:
UV = Unit Value
NCS = UV 12/31/96 - UV 12/24/96
= 10.87167486 - 10.86361734
= 0.0080575200
ES = Annual Contract Charge per Week, based on Average Account Size
= (30/(365/7)) / Average Account Size of $30,000
= 0.00001918
Base Period Return = (NCS / UVBeginning of Period) - ES
= (0.0080575200/10.86361734) - 0.00001918
= 0.000722518
<PAGE>
ALGER AMERICAN LEVERAGED ALLCAP
ASSUMING CONTRACT SURRENDERED
<TABLE>
<CAPTION>
PERIOD: 1
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
12/29/95 1000.00 14.72069337 16.26601000 1104.98
- ---------------------------------------------------------
6/30/96 -70.00 16.26601000 16.26601000 -70.00
- ---------------------------------------------------------
6/30/96 -1.00 16.26601000 16.26601000 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 3.40% TOTAL: 1033.98
<CAPTION>
PERIOD: INCEPTION
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
1/25/95 1000.00 8.55548803 16.26601000 1901.24
- ---------------------------------------------------------
1/25/96 -1.00 14.74753406 16.26601000 -1.10
- ---------------------------------------------------------
6/30/96 -60.00 16.26601000 16.26601000 -60.00
- ---------------------------------------------------------
6/30/96 -1.00 16.26601000 16.26601000 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 37.09% TOTAL: 1839.13
1.931507 DAYS = 340
YEARS= 1
</TABLE>
<PAGE>
ALGER AMERICAN LEVERAGED ALLCAP
ASSUMING CONTRACT NOT SURRENDERED
<TABLE>
<CAPTION>
PERIOD : 1
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
<S> <C> <C> <C> <C>
- ---------------------------------------------------------
12/29/95 1000.00 14.72069337 16.26601000 1104.98
- ---------------------------------------------------------
12/31/96 0.00 16.26601000 16.26601000 0.00
- ---------------------------------------------------------
12/31/96 -1.00 16.26601000 16.26601000 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 10.40% TOTAL: 1103.98
<CAPTION>
PERIOD : INCEPTION
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
1/25/95 1000.00 8.55548803 16.26601000 1901.24
- ---------------------------------------------------------
1/25/96 -1.00 14.74753406 16.26601000 -1.10
- ---------------------------------------------------------
12/31/96 0.00 16.26601000 16.26601000 0.00
- ---------------------------------------------------------
12/31/96 -1.00 16.26601000 16.26601000 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 39.39% TOTAL: 1899.13
1.931507 DAYS = 340
YEARS= 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALGER AMERICAN GROWTH
ASSUMING CONTRACT SURRENDERED
PERIOD : 1
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
12/29/95 1000.00 11.96502871 13.37411100 1117.77
- ---------------------------------------------------------
12/31/96 -70.00 13.37411100 13.37411100 -70.00
- ---------------------------------------------------------
12/31/96 -1.00 13.37411100 13.37411100 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 4.68% TOTAL: 1046.77
<CAPTION>
PERIOD : 5
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
12/31/91 1000.00 6.64486427 13.37411100 2012.70
- ---------------------------------------------------------
12/31/92 -1.00 7.36336733 13.37411100 -1.82
- ---------------------------------------------------------
12/31/93 -1.00 8.89233881 13.37411100 -1.50
- ---------------------------------------------------------
12/30/94 -1.00 8.89590410 13.37411100 -1.50
- ---------------------------------------------------------
12/29/95 -1.00 11.96502871 13.37411100 -1.12
- ---------------------------------------------------------
12/31/96 -30.00 13.37411100 13.37411100 -30.00
- ---------------------------------------------------------
12/31/96 -1.00 13.37411100 13.37411100 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 14.59% TOTAL: 1975.76
<CAPTION>
PERIOD : INCEPTION
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
1/9/89 1000.00 3.80298495 13.37411100 3516.74
- ---------------------------------------------------------
1/9/90 -1.00 4.66885953 13.37411100 -2.86
- ---------------------------------------------------------
1/9/91 -1.00 4.54454513 13.37411100 -2.94
- ---------------------------------------------------------
1/9/92 -1.00 6.92302277 13.37411100 -1.93
- ---------------------------------------------------------
1/9/93 -1.00 7.35715207 13.37411100 -1.82
- ---------------------------------------------------------
1/9/94 -1.00 9.07661774 13.37411100 -1.47
- ---------------------------------------------------------
1/9/95 -1.00 8.88573659 13.37411100 -1.51
- ---------------------------------------------------------
1/9/96 -1.00 11.12695835 13.37411100 -1.20
- ---------------------------------------------------------
12/31/96 -1.00 13.37411100 13.37411100 -1.00
- ---------------------------------------------------------
12/31/96 0.00 13.37411100 13.37411100 0.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 17.02% TOTAL: 3502.00
7.975342 DAYS = 356
YEARS= 7
</TABLE>
<PAGE>
ALGER AMERICAN GROWTH
ASSUMING CONTRACT NOT SURRENDERED
<TABLE>
<CAPTION>
PERIOD : 1
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
12/29/95 1000.00 11.96502871 13.37411100 1117.77
- ---------------------------------------------------------
12/31/96 0.00 13.37411100 13.37411100 0.00
- ---------------------------------------------------------
12/31/96 -1.00 13.37411100 13.37411100 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 11.68% TOTAL: 1116.77
<CAPTION>
PERIOD: 5
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
12/31/91 1000.00 6.64486427 13.37411100 2012.70
- ---------------------------------------------------------
12/31/92 -1.00 7.36336733 13.37411100 -1.82
- ---------------------------------------------------------
12/31/93 -1.00 8.89233881 13.37411100 -1.50
- ---------------------------------------------------------
12/30/94 -1.00 8.89590410 13.37411100 -1.50
- ---------------------------------------------------------
12/29/95 -1.00 11.96502871 13.37411100 -1.12
- ---------------------------------------------------------
12/31/96 0.00 13.37411100 13.37411100 0.00
- ---------------------------------------------------------
12/31/96 -1.00 13.37411100 13.37411100 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 14.94% TOTAL: 2005.76
<CAPTION>
PERIOD: INCEPTION
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
1/9/89 1000.00 3.80298495 13.37411100 3516.74
- ---------------------------------------------------------
1/9/90 -1.00 4.66885953 13.37411100 -2.86
- ---------------------------------------------------------
1/9/91 -1.00 4.54454513 13.37411100 -2.94
- ---------------------------------------------------------
1/9/92 -1.00 6.92302277 13.37411100 -1.93
- ---------------------------------------------------------
1/9/93 -1.00 7.35715207 13.37411100 -1.82
- ---------------------------------------------------------
1/9/94 -1.00 9.07661774 13.37411100 -1.47
- ---------------------------------------------------------
1/9/95 -1.00 8.88573659 13.37411100 -1.51
- ---------------------------------------------------------
1/9/96 -1.00 11.12695835 13.37411100 -1.20
- ---------------------------------------------------------
12/31/96 0.00 13.37411100 13.37411100 0.00
- ---------------------------------------------------------
12/31/96 -1.00 13.37411100 13.37411100 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 17.02% TOTAL: 3502.00
7.975342 DAYS = 356
YEARS= 7
</TABLE>
<PAGE>
ALGER AMERICAN MIDCAP GROWTH
ASSUMING CONTRACT SURRENDERED
<TABLE>
<CAPTION>
PERIOD: 1
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
12/29/95 1000.00 14.44245531 15.93806800 1103.56
- ---------------------------------------------------------
12/31/96 -70.00 15.93806800 15.93806800 -70.00
- ---------------------------------------------------------
12/31/96 -1.00 15.93806800 15.93806800 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 3.26% TOTAL: 1032.56
<CAPTION>
PERIOD: INCEPTION
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
5/3/93 1000.00 7.60053225 15.93806800 2096.97
- ---------------------------------------------------------
5/3/94 -1.00 9.87047665 15.93806800 -1.61
- ---------------------------------------------------------
5/3/95 -1.00 11.35020239 15.93806800 -1.40
- ---------------------------------------------------------
5/3/96 -1.00 15.94377678 15.93806800 -1.00
- ---------------------------------------------------------
12/31/96 -40.00 15.93806800 15.93806800 -40.00
- ---------------------------------------------------------
12/31/96 -1.00 15.93806800 15.93806800 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 21.68% TOTAL: 2051.95
3.663014 DAYS = 242
YEARS= 3
</TABLE>
<PAGE>
ALGER AMERICAN MIDCAP GROWTH
ASSUMING CONTRACT NOT SURRENDERED
<TABLE>
<CAPTION>
PERIOD: 1
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
12/29/95 1000.00 14.44245531 15.93806800 1103.56
- ---------------------------------------------------------
12/31/96 0.00 15.93806800 15.93806800 0.00
- ---------------------------------------------------------
12/31/96 -1.00 15.93806800 15.93806800 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 10.26% TOTAL: 1102.56
<CAPTION>
PERIOD: INCEPTION
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
5/3/93 1000.00 7.60053225 15.93806800 2096.97
- ---------------------------------------------------------
5/3/94 -1.00 9.87047665 15.93806800 -1.61
- ---------------------------------------------------------
5/3/95 -1.00 11.35020239 15.93806800 -1.40
- ---------------------------------------------------------
5/3/96 -1.00 15.94377678 15.93806800 -1.00
- ---------------------------------------------------------
12/31/96 0.00 15.93806800 15.93806800 0.00
- ---------------------------------------------------------
12/31/96 -1.00 15.93806800 15.93806800 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 22.32% TOTAL: 2091.95
3.663014 DAYS = 242
YEARS= 3
</TABLE>
<PAGE>
ALGER AMERICAN SMALL CAPITALIZATION
ASSUMING CONTRACT SURRENDERED
<TABLE>
<CAPTION>
PERIOD: 1
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
12/29/95 1000.00 14.51509769 14.91208000 1027.35
- ---------------------------------------------------------
12/31/96 -70.00 14.91208000 14.91208000 -70.00
- ---------------------------------------------------------
12/31/96 -1.00 14.91208000 14.91208000 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: -4.37% TOTAL: 956.35
<CAPTION>
PERIOD: 5
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
12/31/91 1000.00 9.48656461 14.91208000 1571.92
- ---------------------------------------------------------
12/31/92 -1.00 9.68314590 14.91208000 -1.54
- ---------------------------------------------------------
12/31/93 -1.00 10.81658053 14.91208000 -1.38
- ---------------------------------------------------------
12/30/94 -1.00 10.19979681 14.91208000 -1.46
- ---------------------------------------------------------
12/29/95 -1.00 14.51509769 14.91208000 -1.03
- ---------------------------------------------------------
12/31/96 -30.00 14.91208000 14.91208000 -30.00
- ---------------------------------------------------------
12/31/96 -1.00 14.91208000 14.91208000 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 8.96% TOTAL: 1535.51
<CAPTION>
PERIOD : INCEPTION
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
9/21/88 1000.00 3.64762467 14.91208000 4088.16
- ---------------------------------------------------------
9/21/89 -1.00 5.57322977 14.91208000 -2.68
- ---------------------------------------------------------
9/21/90 -1.00 5.37358761 14.91208000 -2.78
- ---------------------------------------------------------
9/21/91 -1.00 8.05163557 14.91208000 -1.85
- ---------------------------------------------------------
9/21/92 -1.00 8.36919364 14.91208000 -1.78
- ---------------------------------------------------------
9/21/93 -1.00 10.04625132 14.91208000 -1.48
- ---------------------------------------------------------
9/21/94 -1.00 9.86779178 14.91208000 -1.51
- ---------------------------------------------------------
9/21/95 -1.00 16.27480028 14.91208000 -0.92
- ---------------------------------------------------------
9/23/96 -1.00 16.07473444 14.91208000 -0.93
- ---------------------------------------------------------
12/31/96 0.00 14.91208000 14.91208000 0.00
- ---------------------------------------------------------
12/31/96 -1.00 14.91208000 14.91208000 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 18.49% TOTAL: 4073.24
8.279452 DAYS = 102
YEARS= 8
</TABLE>
<PAGE>
ALGER AMERICAN SMALL CAPITALIZATION
ASSUMING CONTRACT NOT SURRENDERED
<TABLE>
<CAPTION>
PERIOD: 1
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
12/29/95 1000.00 14.51509769 14.91208000 1027.35
- ---------------------------------------------------------
12/31/96 0.00 14.91208000 14.91208000 0.00
- ---------------------------------------------------------
12/31/96 -1.00 14.91208000 14.91208000 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 2.63% TOTAL: 1026.35
<CAPTION>
PERIOD: 5
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
12/31/91 1000.00 9.48656461 14.91208000 1571.92
- ---------------------------------------------------------
12/31/92 -1.00 9.68314590 14.91208000 -1.54
- ---------------------------------------------------------
12/31/93 -1.00 10.81658053 14.91208000 -1.38
- ---------------------------------------------------------
12/30/94 -1.00 10.19979681 14.91208000 -1.46
- ---------------------------------------------------------
12/29/95 -1.00 14.51509769 14.91208000 -1.03
- ---------------------------------------------------------
12/31/96 0.00 14.91208000 14.91208000 0.00
- ---------------------------------------------------------
12/31/96 -1.00 14.91208000 14.91208000 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 9.38% TOTAL: 1565.51
<CAPTION>
PERIOD: INCEPTION
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
9/21/88 1000.00 3.64762467 14.91208000 4088.16
- ---------------------------------------------------------
9/21/89 -1.00 5.57322977 14.91208000 -2.68
- ---------------------------------------------------------
9/21/90 -1.00 5.37358761 14.91208000 -2.78
- ---------------------------------------------------------
9/21/91 -1.00 8.05163557 14.91208000 -1.85
- ---------------------------------------------------------
9/21/92 -1.00 8.36919364 14.91208000 -1.78
- ---------------------------------------------------------
9/21/93 -1.00 10.04625132 14.91208000 -1.48
- ---------------------------------------------------------
9/21/94 -1.00 9.86779178 14.91208000 -1.51
- ---------------------------------------------------------
9/21/95 -1.00 16.27480028 14.91208000 0.00
- ---------------------------------------------------------
9/23/96 -1.00 16.07473444 14.91208000 1.00
- ---------------------------------------------------------
12/31/96 0.00 14.91208000 14.91208000 0.00
- ---------------------------------------------------------
12/31/96 -1.00 14.91208000 14.91208000 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 18.50% TOTAL: 4076.08
8.279452 DAYS = 102
YEARS= 8
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY VIP OVERSEAS
ASSUMING CONTRACT SURRENDERED
<S> <C> <C> <C> <C>
PERIOD : 1
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
12/29/95 1000.00 10.32556960 11.52815600 1116.47
- ---------------------------------------------------------
12/31/96 -70.00 11.52815600 11.52815600 -70.00
- ---------------------------------------------------------
12/31/96 -1.00 11.52815600 11.52815600 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 4.55% TOTAL: 1045.47
PERIOD : 5
--------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
12/31/91 1000.00 7.98138238 11.52815600 1444.38
- ---------------------------------------------------------
12/31/92 -1.00 7.02627226 11.52815600 -1.64
- ---------------------------------------------------------
12/31/93 -1.00 6.52748093 11.52815600 -1.77
- ---------------------------------------------------------
12/30/94 -1.00 9.54666837 11.52815600 -1.21
- ---------------------------------------------------------
12/29/95 -1.00 10.32556960 11.52815600 -1.12
- ---------------------------------------------------------
12/31/96 -30.00 11.52815600 11.52815600 -30.00
- ---------------------------------------------------------
12/31/96 -1.00 11.52815600 11.52815600 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 7.08% TOTAL: 1407.65
PERIOD : INCEPTION
--------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
1/28/87 1000.00 6.23224899 11.52815600 1849.76
- ---------------------------------------------------------
1/28/88 -1.00 5.63461149 11.52815600 -2.05
- ---------------------------------------------------------
1/28/89 -1.00 6.46316419 11.52815600 -1.78
- ---------------------------------------------------------
1/28/90 -1.00 7.62278027 11.52815600 -1.51
- ---------------------------------------------------------
1/28/91 -1.00 7.44425003 11.52815600 -1.55
- ---------------------------------------------------------
1/28/92 -1.00 8.07025889 11.52815600 -1.43
- ---------------------------------------------------------
1/28/93 -1.00 7.27439661 11.52815600 -1.58
- ---------------------------------------------------------
1/28/94 -1.00 9.83808112 11.52815600 -1.17
- ---------------------------------------------------------
1/28/95 -1.00 9.20658362 11.52815600 -1.25
- ---------------------------------------------------------
1/28/96 -1.00 10.38579410 11.52815600 -1.11
- ---------------------------------------------------------
12/31/96 -1.00 11.52815600 11.52815600 -1.00
- ---------------------------------------------------------
12/31/96 0.00 11.52815600 11.52815600 0.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 6.31% TOTAL: 1835.32
9.926027 DAYS = 338
YEARS= 9
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY VIP OVERSEAS
ASSUMING CONTRACT NOT SURRENDERED
<S> <C> <C> <C> <C>
PERIOD : 1
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
12/29/95 1000.00 10.32556960 11.52815600 1116.47
- ---------------------------------------------------------
12/31/96 0.00 11.52815600 11.52815600 0.00
- ---------------------------------------------------------
12/31/96 -1.00 11.52815600 11.52815600 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 11.55% TOTAL: 1115.47
PERIOD : 5
--------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
12/31/91 1000.00 7.98138238 11.52815600 1444.38
- ---------------------------------------------------------
12/31/92 -1.00 7.02627226 11.52815600 -1.64
- ---------------------------------------------------------
12/31/93 -1.00 6.52748093 11.52815600 -1.77
- ---------------------------------------------------------
12/30/94 -1.00 9.54666837 11.52815600 -1.21
- ---------------------------------------------------------
12/29/95 -1.00 10.32556960 11.52815600 -1.12
- ---------------------------------------------------------
12/31/96 0.00 11.52815600 11.52815600 0.00
- ---------------------------------------------------------
12/31/96 -1.00 11.52815600 11.52815600 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 7.53% TOTAL: 1437.65
PERIOD : INCEPTION
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
1/28/87 1000.00 6.23224899 11.52815600 1849.76
- ---------------------------------------------------------
1/28/88 -1.00 5.63461149 11.52815600 -2.05
- ---------------------------------------------------------
1/28/89 -1.00 6.46316419 11.52815600 -1.78
- ---------------------------------------------------------
1/28/90 -1.00 7.62278027 11.52815600 -1.51
- ---------------------------------------------------------
1/28/91 -1.00 7.44425003 11.52815600 -1.55
- ---------------------------------------------------------
1/28/92 -1.00 8.07025889 11.52815600 -1.43
- ---------------------------------------------------------
1/28/93 -1.00 7.27439661 11.52815600 -1.58
- ---------------------------------------------------------
1/28/94 -1.00 9.83808112 11.52815600 -1.17
- ---------------------------------------------------------
1/28/95 -1.00 9.20658362 11.52815600 -1.25
- ---------------------------------------------------------
1/28/96 -1.00 10.38579410 11.52815600 -1.11
- ---------------------------------------------------------
12/31/96 0.00 11.52815600 11.52815600 0.00
- ---------------------------------------------------------
12/31/96 -1.00 11.52815600 11.52815600 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 6.31% TOTAL: 1835.32
9.926027 DAYS = 338
YEARS= 9
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY VIP GROWTH
ASSUMING CONTRACT SURRENDERED
<S> <C> <C> <C> <C>
PERIOD : 1
- --------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- --------------------------------------------------------
12/29/95 1000.00 13.48187348 15.24926200 1131.09
- --------------------------------------------------------
12/31/96 -70.00 15.24926200 15.24926200 -70.00
- --------------------------------------------------------
12/31/96 -1.00 15.24926200 15.24926200 -1.00
- --------------------------------------------------------
AVG ANNUAL RETURN: 6.01% TOTAL: 1060.09
PERIOD : 5
- --------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- --------------------------------------------------------
12/31/91 1000.00 8.07280745 15.24926200 1888.97
- --------------------------------------------------------
12/31/92 -1.00 8.70218117 15.24926200 -1.75
- --------------------------------------------------------
12/31/93 -1.00 10.24345748 15.24926200 -1.49
- --------------------------------------------------------
12/30/94 -1.00 10.09952470 15.24926200 -1.51
- --------------------------------------------------------
12/29/95 -1.00 13.48187348 15.24926200 -1.13
- --------------------------------------------------------
12/31/96 -30.00 15.24926200 15.24926200 -30.00
- --------------------------------------------------------
12/31/96 -1.00 15.24926200 15.24926200 -1.00
- --------------------------------------------------------
AVG ANNUAL RETURN: 13.12% TOTAL: 1852.08
PERIOD : 10
- --------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- --------------------------------------------------------
12/31/86 1000.00 4.27812228 15.24926200 3564.48
- --------------------------------------------------------
12/31/87 -1.00 4.37312140 15.24926200 -3.49
- --------------------------------------------------------
12/30/88 -1.00 4.98432845 15.24926200 -3.06
- --------------------------------------------------------
12/29/89 -1.00 6.46425089 15.24926200 -2.36
- --------------------------------------------------------
12/31/90 -1.00 5.62590978 15.24926200 -2.71
- --------------------------------------------------------
12/31/91 -1.00 8.07280745 15.24926200 -1.89
- --------------------------------------------------------
12/31/92 -1.00 8.70218117 15.24926200 -1.75
- --------------------------------------------------------
12/31/93 -1.00 10.24345748 15.24926200 -1.49
- --------------------------------------------------------
12/30/94 -1.00 10.09952470 15.24926200 -1.51
- --------------------------------------------------------
12/29/95 -1.00 13.48187348 15.24926200 -1.13
- --------------------------------------------------------
12/31/96 -1.00 15.24926200 15.24926200 -1.00
- --------------------------------------------------------
12/31/96 0.00 15.24926200 15.24926200 0.00
- --------------------------------------------------------
AVG ANNUAL RETURN: 13.49% TOTAL: 3544.09
10 DAYS = 0
YEARS= 10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY VIP GROWTH
ASSUMING CONTRACT NOT SURRENDERED
<S> <C> <C> <C> <C>
PERIOD : 1
- --------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- --------------------------------------------------------
12/29/95 1000.00 13.48187348 15.24926200 1131.09
- --------------------------------------------------------
12/31/96 0.00 15.24926200 15.24926200 0.00
- --------------------------------------------------------
12/31/96 -1.00 15.24926200 15.24926200 -1.00
- --------------------------------------------------------
AVG ANNUAL RETURN: 13.01% TOTAL: 1130.09
PERIOD : 5
- --------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- --------------------------------------------------------
12/31/91 1000.00 8.07280745 15.24926200 1888.97
- --------------------------------------------------------
12/31/92 -1.00 8.70218117 15.24926200 -1.75
- --------------------------------------------------------
12/31/93 -1.00 10.24345748 15.24926200 -1.49
- --------------------------------------------------------
12/30/94 -1.00 10.09952470 15.24926200 -1.51
- --------------------------------------------------------
12/29/95 -1.00 13.48187348 15.24926200 -1.13
- --------------------------------------------------------
12/31/96 0.00 15.24926200 15.24926200 0.00
- --------------------------------------------------------
12/31/96 -1.00 15.24926200 15.24926200 -1.00
- --------------------------------------------------------
AVG ANNUAL RETURN: 13.48% TOTAL: 1882.08
PERIOD : 10
- --------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- --------------------------------------------------------
12/31/86 1000.00 4.27812228 15.24926200 3564.48
- --------------------------------------------------------
12/31/87 -1.00 4.37312140 15.24926200 -3.49
- --------------------------------------------------------
12/30/88 -1.00 4.98432845 15.24926200 -3.06
- --------------------------------------------------------
12/29/89 -1.00 6.46425089 15.24926200 -2.36
- --------------------------------------------------------
12/31/90 -1.00 5.62590978 15.24926200 -2.71
- --------------------------------------------------------
12/31/91 -1.00 8.07280745 15.24926200 -1.89
- --------------------------------------------------------
12/31/92 -1.00 8.70218117 15.24926200 -1.75
- --------------------------------------------------------
12/31/93 -1.00 10.24345748 15.24926200 -1.49
- --------------------------------------------------------
12/30/94 -1.00 10.09952470 15.24926200 -1.51
- --------------------------------------------------------
12/29/95 -1.00 13.48187348 15.24926200 -1.13
- --------------------------------------------------------
12/31/96 -1.00 15.24926200 15.24926200 -1.00
- --------------------------------------------------------
12/31/96 -1.00 15.24926200 15.24926200 0.00
- --------------------------------------------------------
AVG ANNUAL RETURN: 13.49% TOTAL: 3544.09
10 DAYS = 0
YEARS= 10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY VIP II ASSET MANAGER
ASSUMING CONTRACT SURRENDERED
<S> <C> <C> <C> <C>
PERIOD : 1
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
12/29/95 1000.00 10.88891782 12.30600500 1130.14
- ---------------------------------------------------------
12/31/96 -70.00 12.30600500 12.30600500 -70.00
- ---------------------------------------------------------
12/31/96 -1.00 12.30600500 12.30600500 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 5.91% TOTAL: 1059.14
PERIOD : 5
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
12/31/91 1000.00 7.74690264 12.30600500 1588.51
- ---------------------------------------------------------
12/31/92 -1.00 8.53363832 12.30600500 -1.44
- ---------------------------------------------------------
12/31/93 -1.00 10.20181652 12.30600500 -1.21
- ---------------------------------------------------------
12/30/94 -1.00 9.44107342 12.30600500 -1.30
- ---------------------------------------------------------
12/29/95 -1.00 10.88891782 12.30600500 -1.13
- ---------------------------------------------------------
12/31/96 -30.00 12.30600500 12.30600500 -30.00
- ---------------------------------------------------------
12/31/96 -1.00 12.30600500 12.30600500 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 9.19% TOTAL: 1552.42
PERIOD : INCEPTION
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
9/6/89 1000.00 6.06901350 12.30600500 2027.68
- ---------------------------------------------------------
9/6/90 -1.00 6.05733255 12.30600500 -2.03
- ---------------------------------------------------------
9/6/91 -1.00 7.46519909 12.30600500 -1.65
- ---------------------------------------------------------
9/6/92 -1.00 8.24956460 12.30600500 -1.49
- ---------------------------------------------------------
9/6/93 -1.00 9.55614538 12.30600500 -1.29
- ---------------------------------------------------------
9/6/94 -1.00 9.86788224 12.30600500 -1.25
- ---------------------------------------------------------
9/6/95 -1.00 10.50019064 12.30600500 -1.17
- ---------------------------------------------------------
12/31/96 -1.00 12.30600500 12.30600500 -1.00
- ---------------------------------------------------------
12/31/96 0.00 12.30600500 12.30600500 0.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 10.06% TOTAL: 2017.80
7.320548 DAYS = 117
YEARS= 7
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY VIP II ASSET MANAGER
ASSUMING CONTRACT NOT SURRENDERED
<S> <C> <C> <C> <C>
PERIOD : 1
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
12/29/95 1000.00 10.88891782 12.30600500 1130.14
- ---------------------------------------------------------
12/31/96 0.00 12.30600500 12.30600500 0.00
- ---------------------------------------------------------
12/31/96 -1.00 12.30600500 12.30600500 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 12.91% TOTAL: 1129.14
PERIOD : 5
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
12/31/91 1000.00 7.74690264 12.30600500 1588.51
- ---------------------------------------------------------
12/31/92 -1.00 8.53363832 12.30600500 -1.44
- ---------------------------------------------------------
12/31/93 -1.00 10.20181652 12.30600500 -1.21
- ---------------------------------------------------------
12/30/94 -1.00 9.44107342 12.30600500 -1.30
- ---------------------------------------------------------
12/29/95 -1.00 10.88891782 12.30600500 -1.13
- ---------------------------------------------------------
12/31/96 0.00 12.30600500 12.30600500 0.00
- ---------------------------------------------------------
12/31/96 -1.00 12.30600500 12.30600500 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 9.61% TOTAL: 1582.42
PERIOD : INCEPTION
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
9/6/89 1000.00 6.06901350 12.30600500 2027.68
- ---------------------------------------------------------
9/6/90 -1.00 6.05733255 12.30600500 -2.03
- ---------------------------------------------------------
9/6/91 -1.00 7.46519909 12.30600500 -1.65
- ---------------------------------------------------------
9/6/92 -1.00 8.24956460 12.30600500 -1.49
- ---------------------------------------------------------
9/6/93 -1.00 9.55614538 12.30600500 -1.29
- ---------------------------------------------------------
9/6/94 -1.00 9.86788224 12.30600500 -1.25
- ---------------------------------------------------------
9/6/95 -1.00 10.50019064 12.30600500 -1.17
- ---------------------------------------------------------
12/31/96 0.00 12.30600500 12.30600500 0.00
- ---------------------------------------------------------
12/31/96 -1.00 12.30600500 12.30600500 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 10.06% TOTAL: 2017.80
7.320548 DAYS = 117
YEARS= 7
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY VIP II INDEX 500
ASSUMING CONTRACT SURRENDERED
<S> <C> <C> <C> <C>
PERIOD : 1
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
12/29/95 1000.00 13.08997583 15.85502400 1211.23
- ---------------------------------------------------------
12/31/96 -70.00 15.85502400 15.85502400 -70.00
- ---------------------------------------------------------
12/31/96 -1.00 15.85502400 15.85502400 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 14.02% TOTAL: 1140.23
PERIOD : INCEPTION
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
8/27/92 1000.00 8.48061743 15.85502400 1869.56
- ---------------------------------------------------------
8/27/93 -1.00 9.55214451 15.85502400 -1.66
- ---------------------------------------------------------
8/27/94 -1.00 9.95022305 15.85502400 -1.59
- ---------------------------------------------------------
8/27/95 -1.00 11.85232330 15.85502400 -1.34
- ---------------------------------------------------------
8/27/96 -1.00 14.23474712 15.85502400 -1.11
- ---------------------------------------------------------
12/31/96 -1.00 15.85502400 15.85502400 -1.00
- ---------------------------------------------------------
12/31/96 -30.00 15.85502400 15.85502400 -30.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 14.96% TOTAL: 1832.86
4.345205 DAYS = 126
YEARS= 4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY VIP II INDEX 500
ASSUMING CONTRACT NOT SURRENDERED
<S> <C> <C> <C> <C>
PERIOD : 1
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
12/29/95 1000.00 13.08997583 15.85502400 1211.23
- ---------------------------------------------------------
12/31/96 0.00 15.85502400 15.85502400 0.00
- ---------------------------------------------------------
12/31/96 -1.00 15.85502400 15.85502400 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 21.02% TOTAL: 1210.23
PERIOD : INCEPTION
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
8/27/92 1000.00 8.48061743 15.85502400 1869.56
- ---------------------------------------------------------
8/27/93 -1.00 9.55214451 15.85502400 -1.66
- ---------------------------------------------------------
8/27/94 -1.00 9.95022305 15.85502400 -1.59
- ---------------------------------------------------------
8/27/95 -1.00 11.85232330 15.85502400 -1.34
- ---------------------------------------------------------
8/27/96 -1.00 14.23474712 15.85502400 -1.11
- ---------------------------------------------------------
12/31/96 0.00 15.85502400 15.85502400 0.00
- ---------------------------------------------------------
12/31/96 -1.00 15.85502400 15.85502400 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 15.39% TOTAL: 1862.86
4.345205 DAYS = 126
YEARS= 4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY VIP MONEY MARKET
ASSUMING CONTRACT SURRENDERED
<S> <C> <C> <C> <C>
PERIOD : 1
- --------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- --------------------------------------------------------
12/29/95 1000.00 10.46004172 10.87167500 1039.35
- --------------------------------------------------------
12/31/96 -70.00 10.87167500 10.87167500 -70.00
- --------------------------------------------------------
12/31/96 -1.00 10.87167500 10.87167500 -1.00
- --------------------------------------------------------
AVG ANNUAL RETURN: -3.16% TOTAL: 968.35
PERIOD : 5
- --------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- --------------------------------------------------------
12/31/91 1000.00 9.34156074 10.87167500 1163.80
- --------------------------------------------------------
12/31/92 -1.00 9.57094896 10.87167500 -1.14
- --------------------------------------------------------
12/31/93 -1.00 9.74296359 10.87167500 -1.12
- --------------------------------------------------------
12/30/94 -1.00 10.01584278 10.87167500 -1.09
- --------------------------------------------------------
12/29/95 -1.00 10.46004172 10.87167500 -1.04
- --------------------------------------------------------
12/31/96 -30.00 10.87167500 10.87167500 -30.00
- --------------------------------------------------------
12/31/96 -1.00 10.87167500 10.87167500 -1.00
- --------------------------------------------------------
AVG ANNUAL RETURN: 2.45% TOTAL: 1128.42
PERIOD : 10
- --------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- --------------------------------------------------------
12/31/86 1000.00 7.00842734 10.87167500 1551.23
- --------------------------------------------------------
12/31/87 -1.00 7.35619000 10.87167500 -1.48
- --------------------------------------------------------
12/30/88 -1.00 7.78945761 10.87167500 -1.40
- --------------------------------------------------------
12/29/89 -1.00 8.38162394 10.87167500 -1.30
- --------------------------------------------------------
12/31/90 -1.00 8.92944272 10.87167500 -1.22
- --------------------------------------------------------
12/31/91 -1.00 9.34156074 10.87167500 -1.16
- --------------------------------------------------------
12/31/92 -1.00 9.57094896 10.87167500 -1.14
- --------------------------------------------------------
12/31/93 -1.00 9.74296359 10.87167500 -1.12
- --------------------------------------------------------
12/30/94 -1.00 10.01584278 10.87167500 -1.09
- --------------------------------------------------------
12/29/95 -1.00 10.46004172 10.87167500 -1.04
- --------------------------------------------------------
12/31/96 0.00 10.87167500 10.87167500 0.00
- --------------------------------------------------------
12/31/96 -1.00 10.87167500 10.87167500 -1.00
- --------------------------------------------------------
AVG ANNUAL RETURN: 4.41% TOTAL: 1539.30
Days= 0
10 Years= 10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY VIP MONEY MARKET
ASSUMING CONTRACT NOT SURRENDERED
<S> <C> <C> <C> <C>
PERIOD : 1
- --------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- --------------------------------------------------------
12/29/95 1000.00 10.46004172 10.87167500 1039.35
- --------------------------------------------------------
12/31/96 0.00 10.87167500 10.87167500 0.00
- --------------------------------------------------------
12/31/96 -1.00 10.87167500 10.87167500 -1.00
- --------------------------------------------------------
AVG ANNUAL RETURN: 3.84% TOTAL: 1038.35
PERIOD : 5
- --------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- --------------------------------------------------------
12/31/91 1000.00 9.34156074 10.87167500 1163.80
- --------------------------------------------------------
12/31/92 -1.00 9.57094896 10.87167500 -1.14
- --------------------------------------------------------
12/31/93 -1.00 9.74296359 10.87167500 -1.12
- --------------------------------------------------------
12/30/94 -1.00 10.01584278 10.87167500 -1.09
- --------------------------------------------------------
12/29/95 -1.00 10.46004172 10.87167500 -1.04
- --------------------------------------------------------
12/31/96 0.00 10.87167500 10.87167500 0.00
- --------------------------------------------------------
12/31/96 -1.00 10.87167500 10.87167500 -1.00
- --------------------------------------------------------
AVG ANNUAL RETURN: 2.98% TOTAL: 1158.42
PERIOD : 10
- --------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- --------------------------------------------------------
12/31/86 1000.00 7.00842734 10.87167500 1551.23
- --------------------------------------------------------
12/31/87 -1.00 7.35619000 10.87167500 -1.48
- --------------------------------------------------------
12/30/88 -1.00 7.78945761 10.87167500 -1.40
- --------------------------------------------------------
12/29/89 -1.00 8.38162394 10.87167500 -1.30
- --------------------------------------------------------
12/31/90 -1.00 8.92944272 10.87167500 -1.22
- --------------------------------------------------------
12/31/91 -1.00 9.34156074 10.87167500 -1.16
- --------------------------------------------------------
12/31/92 -1.00 9.57094896 10.87167500 -1.14
- --------------------------------------------------------
12/31/93 -1.00 9.74296359 10.87167500 -1.12
- --------------------------------------------------------
12/30/94 -1.00 10.01584278 10.87167500 -1.09
- --------------------------------------------------------
12/29/95 -1.00 10.46004172 10.87167500 -1.04
- --------------------------------------------------------
12/31/96 0.00 10.87167500 10.87167500 0.00
- --------------------------------------------------------
12/31/96 -1.00 10.87167500 10.87167500 -1.00
- --------------------------------------------------------
AVG ANNUAL RETURN: 4.41% TOTAL: 1539.30
Days= 0
10 Years= 10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESCO INDUSTRIAL INCOME
ASSUMING CONTRACT SURRENDERED
<S> <C> <C> <C> <C>
PERIOD: 1
DATE PAYMENT AUV BEG AUV END VALUE
- ----------------------------------------------------------
12/29/95 1000.00 12.94592651 15.61038900 1205.81
- ----------------------------------------------------------
12/31/96 -70.00 15.61038900 15.61038900 -70.00
- ----------------------------------------------------------
12/31/96 -1.00 15.61038900 15.61038900 -1.00
- ----------------------------------------------------------
AVG ANNUAL RETURN: 13.48% TOTAL: 1134.81
PERIOD: INCEPTION
DATE PAYMENT AUV BEG AUV END VALUE
- ----------------------------------------------------------
8/10/94 1000.00 10.13887960 15.61038900 1539.66
- ----------------------------------------------------------
8/10/95 -1.00 11.56941710 15.61038900 -1.35
- ----------------------------------------------------------
8/12/96 -1.00 14.30711814 15.61038900 -1.09
- ----------------------------------------------------------
12/31/96 -1.00 15.61038900 15.61038900 -1.00
- ----------------------------------------------------------
12/31/96 -50.00 15.61038900 15.61038900 -50.00
- ----------------------------------------------------------
AVG ANNUAL RETURN: 18.00% TOTAL: 1486.22
2.394521 DAYS = 144
YEARS= 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESCO INDUSTRIAL INCOME
ASSUMING CONTRACT NOT SURRENDERED
<S> <C> <C> <C> <C>
PERIOD : 1
DATE PAYMENT AUV BEG AUV END VALUE
- -----------------------------------------------------------
12/29/95 1000.00 12.94592651 15.61038900 1205.81
- -----------------------------------------------------------
12/31/96 0.00 15.61038900 15.61038900 0.00
- -----------------------------------------------------------
12/31/96 -1.00 15.61038900 15.61038900 -1.00
- -----------------------------------------------------------
AVG ANNUAL RETURN: 20.48% TOTAL: 1204.81
PERIOD : INCEPTION
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
8/10/94 1000.00 10.13887960 15.61038900 1539.66
- ---------------------------------------------------------
8/10/95 -1.00 11.56941710 15.61038900 -1.35
- ---------------------------------------------------------
8/12/96 -1.00 14.30711814 15.61038900 -1.09
- ---------------------------------------------------------
12/31/96 0.00 15.61038900 15.61038900 0.00
- ---------------------------------------------------------
12/31/96 -1.00 15.61038900 15.61038900 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 19.64% TOTAL: 1536.22
2.394521 DAYS = 144
YEARS= 2
</TABLE>
<PAGE>
INVESCO UTILITIES
ASSUMING CONTRACT SURRENDERED
<TABLE>
<CAPTION>
PERIOD : 1
- -----------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- -----------------------------------------------------------
<S> <C> <C> <C> <C>
12/29/95 1000.00 10.81110464 12.02129300 1111.94
- -----------------------------------------------------------
12/31/96 -70.00 12.02129300 12.02129300 -70.00
- -----------------------------------------------------------
12/31/96 -1.00 12.02129300 12.02129300 -1.00
- -----------------------------------------------------------
AVG ANNUAL RETURN: 4.09% TOTAL: 1040.94
PERIOD : INCEPTION
<CAPTION>
- -----------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- -----------------------------------------------------------
<S> <C> <C> <C> <C>
1/1/95 1000.00 10.04816334 12.02129300 1196.37
- -----------------------------------------------------------
1/1/96 -1.00 10.81928180 12.02129300 -1.11
- -----------------------------------------------------------
12/31/96 -1.00 12.02129300 12.02129300 -1.00
- -----------------------------------------------------------
12/31/96 -60.00 12.02129300 12.02129300 -60.00
- -----------------------------------------------------------
AVG ANNUAL RETURN: 6.50% TOTAL: 1134.26
2 DAYS = 365
YEARS= 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESCO UTILITIES
ASSUMING CONTRACT NOT SURRENDERED
PERIOD : 1
DATE PAYMENT AUV BEG AUV END VALUE
- -----------------------------------------------------------
<S> <C> <C> <C> <C>
12/29/95 1000.00 10.81110464 12.02129300 1111.94
- -----------------------------------------------------------
12/31/96 0.00 12.02129300 12.02129300 0.00
- -----------------------------------------------------------
12/31/96 -1.00 12.02129300 12.02129300 -1.00
- -----------------------------------------------------------
AVG ANNUAL RETURN: 11.09% TOTAL: 1110.94
</TABLE>
<TABLE>
<CAPTION>
PERIOD : INCEPTION
DATE PAYMENT AUV BEG AUV END VALUE
- -----------------------------------------------------------
<S> <C> <C> <C> <C>
1/1/95 1000.00 10.04816334 12.02129300 1196.37
- -----------------------------------------------------------
1/1/96 -1.00 10.81928180 12.02129300 -1.11
- -----------------------------------------------------------
12/31/96 0.00 12.02129300 12.02129300 0.00
- -----------------------------------------------------------
12/31/96 -1.00 12.02129300 12.02129300 -1.00
- -----------------------------------------------------------
AVG ANNUAL RETURN: 9.28% TOTAL: 1194.26
2 DAYS = 365
YEARS= 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESCO HIGH YIELD
ASSUMING CONTRACT SURRENDERED
<S> <C> <C> <C> <C>
PERIOD : 1
DATE PAYMENT AUV BEG AUV END VALUE
- ----------------------------------------------------------
12/29/95 1000.00 11.88477315 13.66577300 1149.86
- ----------------------------------------------------------
12/31/96 -70.00 13.66577300 13.66577300 -70.00
- ----------------------------------------------------------
12/31/96 -1.00 13.66577300 13.66577300 -1.00
- ----------------------------------------------------------
AVG ANNUAL RETURN: 7.89% TOTAL: 1078.86
PERIOD : INCEPTION
DATE PAYMENT AUV BEG AUV END VALUE
- -----------------------------------------------------------
5/27/94 1000.00 10.08714043 13.66577300 1354.77
- -----------------------------------------------------------
5/27/95 -1.00 10.91451600 13.66577300 -1.25
- -----------------------------------------------------------
5/27/96 -1.00 12.40629300 13.66577300 -1.10
- -----------------------------------------------------------
12/31/96 -1.00 13.66577300 13.66577300 -1.00
- -----------------------------------------------------------
12/31/96 -50.00 13.66577300 13.66577300 -50.00
- -----------------------------------------------------------
AVG ANNUAL RETURN: 10.66% TOTAL: 1301.42
2.6 DAYS = 219
YEARS= 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESCO HIGH YIELD
ASSUMING CONTRACT NOT SURRENDERED
<S> <C> <C> <C> <C>
PERIOD : 1
DATE PAYMENT AUV BEG AUV END VALUE
- ----------------------------------------------------------
12/29/95 1000.00 11.88477315 13.66577300 1149.86
- ----------------------------------------------------------
12/31/96 0.00 13.66577300 13.66577300 0.00
- ----------------------------------------------------------
12/31/96 -1.00 13.66577300 13.66577300 -1.00
- ----------------------------------------------------------
AVG ANNUAL RETURN: 14.89% TOTAL: 1148.86
PERIOD : INCEPTION
DATE PAYMENT AUV BEG AUV END VALUE
- ----------------------------------------------------------
5/27/94 1000.00 10.08714043 13.66577300 1354.77
- ----------------------------------------------------------
5/27/95 -1.00 10.91451600 13.66577300 -1.25
- ----------------------------------------------------------
5/27/96 -1.00 12.40629300 13.66577300 -1.10
- ----------------------------------------------------------
12/31/96 0.00 13.66577300 13.66577300 0.00
- ----------------------------------------------------------
12/31/96 -1.00 13.66577300 13.66577300 -1.00
- ----------------------------------------------------------
AVG ANNUAL RETURN: 12.28% TOTAL: 1351.42
2.6 DAYS = 219
YEARS= 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESCO TOTAL RETURN
ASSUMING CONTRACT SURRENDERED
<S> <C> <C> <C> <C>
PERIOD : 1
DATE PAYMENT AUV BEG AUV END VALUE
- ----------------------------------------------------------
12/29/95 1000.00 12.12279392 13.41079600 1106.25
- ----------------------------------------------------------
12/31/96 -70.00 13.41079600 13.41079600 -70.00
- ----------------------------------------------------------
12/31/96 -1.00 13.41079600 13.41079600 -1.00
- ----------------------------------------------------------
AVG ANNUAL RETURN: 3.52% TOTAL: 1035.25
PERIOD : INCEPTION
DATE PAYMENT AUV BEG AUV END VALUE
- ----------------------------------------------------------
6/2/94 1000.00 9.91915322 13.41079600 1352.01
- ----------------------------------------------------------
6/2/95 -1.00 11.11594664 13.41079600 -1.21
- ----------------------------------------------------------
6/2/96 -1.00 12.55699191 13.41079600 -1.07
- ----------------------------------------------------------
12/31/96 -1.00 13.41079600 13.41079600 -1.00
- ----------------------------------------------------------
12/31/96 -50.00 13.41079600 13.41079600 -50.00
- ----------------------------------------------------------
AVG ANNUAL RETURN: 10.65% TOTAL: 1298.74
2.583562 DAYS = 213
YEARS= 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESCO TOTAL RETURN
ASSUMING CONTRACT NOT SURRENDERED
<S> <C> <C> <C> <C>
PERIOD : 1
DATE PAYMENT AUV BEG AUV END VALUE
- ----------------------------------------------------------
12/29/95 1000.00 12.12279392 13.41079600 1106.25
- ----------------------------------------------------------
12/31/96 0.00 13.41079600 13.41079600 0.00
- ----------------------------------------------------------
12/31/96 -1.00 13.41079600 13.41079600 -1.00
- ----------------------------------------------------------
AVG ANNUAL RETURN: 10.52% TOTAL: 1105.25
PERIOD : INCEPTION
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
6/2/94 1000.00 9.91915322 13.41079600 1352.01
- ---------------------------------------------------------
6/2/95 -1.00 11.11594664 13.41079600 -1.21
- ---------------------------------------------------------
6/2/96 -1.00 12.55699191 13.41079600 -1.07
- ---------------------------------------------------------
12/31/96 0.00 13.41079600 13.41079600 0.00
- ---------------------------------------------------------
12/31/96 -1.00 13.41079600 13.41079600 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 12.28% TOTAL: 1348.74
2.583562 DAYS = 213
YEARS= 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEUBERGER & BERMAN GROWTH
ASSUMING CONTRACT SURRENDERED
<S> <C> <C> <C> <C>
PERIOD : 1
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
12/31/96 1000.00 12.35831808 13.30062900 1076.25
- ---------------------------------------------------------
12/31/96 -70.00 13.30062900 13.30062900 -70.00
- ---------------------------------------------------------
12/31/96 -1.00 13.30062900 13.30062900 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 0.52% TOTAL: 1005.25
PERIOD : 5
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
12/31/91 1000.00 8.92608121 13.30062900 1490.09
- ---------------------------------------------------------
12/31/92 -1.00 9.64130665 13.30062900 -1.38
- ---------------------------------------------------------
12/31/93 -1.00 10.15292758 13.30062900 -1.31
- ---------------------------------------------------------
12/30/94 -1.00 9.51310260 13.30062900 -1.40
- ---------------------------------------------------------
12/29/95 -1.00 12.35831808 13.30062900 -1.08
- ---------------------------------------------------------
12/31/96 -30.00 13.30062900 13.30062900 -30.00
- ---------------------------------------------------------
12/31/96 -1.00 13.30062900 13.30062900 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 7.77% TOTAL: 1453.92
PERIOD : 10
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
12/31/86 1000.00 5.18159345 13.30062900 2566.90
- ---------------------------------------------------------
12/31/87 -1.00 4.85943980 13.30062900 -2.74
- ---------------------------------------------------------
12/30/88 -1.00 6.03655673 13.30062900 -2.20
- ---------------------------------------------------------
12/29/89 -1.00 7.70760725 13.30062900 -1.73
- ---------------------------------------------------------
12/31/90 -1.00 6.97734366 13.30062900 -1.91
- ---------------------------------------------------------
12/31/91 -1.00 8.92608121 13.30062900 -1.49
- ---------------------------------------------------------
12/31/92 -1.00 9.64130665 13.30062900 -1.38
- ---------------------------------------------------------
12/31/93 -1.00 10.15292758 13.30062900 -1.31
- ---------------------------------------------------------
12/30/94 -1.00 9.51310260 13.30062900 -1.40
- ---------------------------------------------------------
12/29/95 -1.00 12.35831808 13.30062900 -1.08
- ---------------------------------------------------------
12/31/96 0.00 13.30062900 13.30062900 0.00
- ---------------------------------------------------------
12/31/96 -1.00 13.30062900 13.30062900 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 9.82% TOTAL: 2550.67
Days= 0
10 Years= 10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEUBERGER & BERMAN GROWTH
ASSUMING CONTRACT NOT SURRENDERED
<S> <C> <C> <C> <C>
PERIOD : 1
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
12/31/96 1000.00 12.35831808 13.30062900 1076.25
- ---------------------------------------------------------
12/31/96 0.00 13.30062900 13.30062900 0.00
- ---------------------------------------------------------
12/31/96 -1.00 13.30062900 13.30062900 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 7.52% TOTAL: 1075.25
PERIOD : 5
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
12/31/91 1000.00 8.92608121 13.30062900 1490.09
- ---------------------------------------------------------
12/31/92 -1.00 9.64130665 13.30062900 -1.38
- ---------------------------------------------------------
12/31/93 -1.00 10.15292758 13.30062900 -1.31
- ---------------------------------------------------------
12/30/94 -1.00 9.51310260 13.30062900 -1.40
- ---------------------------------------------------------
12/29/95 -1.00 12.35831808 13.30062900 -1.08
- ---------------------------------------------------------
12/31/96 0.00 13.30062900 13.30062900 0.00
- ---------------------------------------------------------
12/31/96 -1.00 13.30062900 13.30062900 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 8.21% TOTAL: 1483.92
PERIOD : 10
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
12/31/86 1000.00 5.18159345 13.30062900 2566.90
- ---------------------------------------------------------
12/31/87 -1.00 4.85943980 13.30062900 -2.74
- ---------------------------------------------------------
12/30/88 -1.00 6.03655673 13.30062900 -2.20
- ---------------------------------------------------------
12/29/89 -1.00 7.70760725 13.30062900 -1.73
- ---------------------------------------------------------
12/31/90 -1.00 6.97734366 13.30062900 -1.91
- ---------------------------------------------------------
12/31/91 -1.00 8.92608121 13.30062900 -1.49
- ---------------------------------------------------------
12/31/92 -1.00 9.64130665 13.30062900 -1.38
- ---------------------------------------------------------
12/31/93 -1.00 10.15292758 13.30062900 -1.31
- ---------------------------------------------------------
12/30/94 -1.00 9.51310260 13.30062900 -1.40
- ---------------------------------------------------------
12/29/95 -1.00 12.35831808 13.30062900 -1.08
- ---------------------------------------------------------
12/31/96 0.00 13.30062900 13.30062900 0.00
- ---------------------------------------------------------
12/31/96 -1.00 13.30062900 13.30062900 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 9.82% TOTAL: 2550.67
Days= 0
10 Years= 10
</TABLE>
<PAGE>
NEUBERGER & BERMAN PARTNERS
ASSUMING CONTRACT SURRENDERED
<TABLE>
<CAPTION>
PERIOD: 1
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
12/29/95 1000.00 13.15514294 16.81018500 1277.84
- ---------------------------------------------------------
12/31/96 -70.00 16.81018500 16.81018500 -70.00
- ---------------------------------------------------------
12/31/96 -1.00 16.81018500 16.81018500 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 20.68% TOTAL: 1206.84
<CAPTION>
PERIOD: INCEPTION
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
3/22/94 1000.00 10.11339496 16.81018500 1662.17
- ---------------------------------------------------------
3/22/95 -1.00 10.41277903 16.81018500 -1.61
- ---------------------------------------------------------
3/22/96 -1.00 14.23914448 16.81018500 -1.18
- ---------------------------------------------------------
12/31/96 -1.00 16.81018500 16.81018500 -1.00
- ---------------------------------------------------------
12/31/96 -50.00 16.81018500 16.81018500 -50.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 18.70% TOTAL: 1608.38
2.772603 DAYS = 282
YEARS= 2
</TABLE>
<PAGE>
NEUBERGER & BERMAN PARTNERS
ASSUMING CONTRACT NOT SURRENDERED
<TABLE>
<CAPTION>
PERIOD : 1
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
12/29/95 1000.00 13.15514294 16.81018500 1277.84
- ---------------------------------------------------------
12/31/96 0.00 16.81018500 16.81018500 0.00
- ---------------------------------------------------------
12/31/96 -1.00 16.81018500 16.81018500 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 27.68% TOTAL: 1276.84
<CAPTION>
PERIOD: INCEPTION
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
3/22/94 1000.00 10.11339496 16.81018500 1662.17
- ---------------------------------------------------------
3/22/95 -1.00 10.41277903 16.81018500 -1.61
- ---------------------------------------------------------
3/22/96 -1.00 14.23914448 16.81018500 -1.18
- ---------------------------------------------------------
12/31/96 0.00 16.81018500 16.81018500 0.00
- ---------------------------------------------------------
12/31/96 -1.00 16.81018500 16.81018500 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 20.01% TOTAL: 1658.38
2.772603 DAYS = 282
YEARS= 2
</TABLE>
<PAGE>
NEUBERGER & BERMAN LIMITED MATURITY BOND
ASSUMING CONTRACT SURRENDERED
<TABLE>
<CAPTION>
PERIOD: 1
- --------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- --------------------------------------------------------
<S> <C> <C> <C> <C>
12/29/95 1000.00 10.34205602 10.63698000 1028.52
- --------------------------------------------------------
12/31/96 -70.00 10.63698000 10.63698000 -70.00
- --------------------------------------------------------
12/31/96 -1.00 10.63698000 10.63698000 -1.00
- --------------------------------------------------------
AVG ANNUAL RETURN: -4.25% TOTAL: 957.52
<CAPTION>
PERIOD: 5
- --------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- --------------------------------------------------------
<S> <C> <C> <C> <C>
12/31/91 1000.00 8.80444098 10.63698000 1208.14
- --------------------------------------------------------
12/31/92 -1.00 9.13115264 10.63698000 -1.16
- --------------------------------------------------------
12/31/93 -1.00 9.60093553 10.63698000 -1.11
- --------------------------------------------------------
12/30/94 -1.00 9.45362070 10.63698000 -1.13
- --------------------------------------------------------
12/29/95 -1.00 10.34205602 10.63698000 -1.03
- --------------------------------------------------------
12/31/96 -30.00 10.63698000 10.63698000 -30.00
- --------------------------------------------------------
12/31/96 -1.00 10.63698000 10.63698000 -1.00
- --------------------------------------------------------
AVG ANNUAL RETURN: 3.24% TOTAL: 1172.71
<CAPTION>
PERIOD: 10
- --------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- --------------------------------------------------------
<S> <C> <C> <C> <C>
12/31/86 1000.00 6.40985110 10.63698000 1659.47
- --------------------------------------------------------
12/31/87 -1.00 6.50351787 10.63698000 -1.64
- --------------------------------------------------------
12/30/88 -1.00 6.87272102 10.63698000 -1.55
- --------------------------------------------------------
12/29/89 -1.00 7.50763482 10.63698000 -1.42
- --------------------------------------------------------
12/31/90 -1.00 8.01890693 10.63698000 -1.33
- --------------------------------------------------------
12/31/91 -1.00 8.80444098 10.63698000 -1.21
- --------------------------------------------------------
12/31/92 -1.00 9.13115264 10.63698000 -1.16
- --------------------------------------------------------
12/31/93 -1.00 9.60093553 10.63698000 -1.11
- --------------------------------------------------------
12/30/94 -1.00 9.45362070 10.63698000 -1.13
- --------------------------------------------------------
12/29/95 -1.00 10.34205602 10.63698000 -1.03
- --------------------------------------------------------
12/31/96 0.00 10.63698000 10.63698000 0.00
- --------------------------------------------------------
12/31/96 -1.00 10.63698000 10.63698000 -1.00
- --------------------------------------------------------
AVG ANNUAL RETURN: 5.12% TOTAL: 1646.91
Days= 0
10 Years= 10
</TABLE>
<PAGE>
NEUBERGER & BERMAN LIMITED MATURITY BOND
ASSUMING CONTRACT NOT SURRENDERED
<TABLE>
<CAPTION>
PERIOD: 1
- --------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- --------------------------------------------------------
<S> <C> <C> <C> <C>
12/29/95 1000.00 10.34205602 10.63698000 1028.52
- --------------------------------------------------------
12/31/96 0.00 10.63698000 10.63698000 0.00
- --------------------------------------------------------
12/31/96 -1.00 10.63698000 10.63698000 -1.00
- --------------------------------------------------------
AVG ANNUAL RETURN: 2.75% TOTAL: 1027.52
<CAPTION>
PERIOD: 5
- --------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- --------------------------------------------------------
<S> <C> <C> <C> <C>
12/31/91 1000.00 8.80444098 10.63698000 1208.14
- --------------------------------------------------------
12/31/92 -1.00 9.13115264 10.63698000 -1.16
- --------------------------------------------------------
12/31/93 -1.00 9.60093553 10.63698000 -1.11
- --------------------------------------------------------
12/30/94 -1.00 9.45362070 10.63698000 -1.13
- --------------------------------------------------------
12/29/95 -1.00 10.34205602 10.63698000 -1.03
- --------------------------------------------------------
12/31/96 0.00 10.63698000 10.63698000 0.00
- --------------------------------------------------------
12/31/96 -1.00 10.63698000 10.63698000 -1.00
- --------------------------------------------------------
AVG ANNUAL RETURN: 3.76% TOTAL: 1202.71
<CAPTION>
PERIOD: 10
- --------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- --------------------------------------------------------
<S> <C> <C> <C> <C>
12/31/86 1000.00 6.40985110 10.63698000 1659.47
- --------------------------------------------------------
12/31/87 -1.00 6.50351787 10.63698000 -1.64
- --------------------------------------------------------
12/30/88 -1.00 6.87272102 10.63698000 -1.55
- --------------------------------------------------------
12/29/89 -1.00 7.50763482 10.63698000 -1.42
- --------------------------------------------------------
12/31/90 -1.00 8.01890693 10.63698000 -1.33
- --------------------------------------------------------
12/31/91 -1.00 8.80444098 10.63698000 -1.21
- --------------------------------------------------------
12/31/92 -1.00 9.13115264 10.63698000 -1.16
- --------------------------------------------------------
12/31/93 -1.00 9.60093553 10.63698000 -1.11
- --------------------------------------------------------
12/30/94 -1.00 9.45362070 10.63698000 -1.13
- --------------------------------------------------------
12/29/95 -1.00 10.34205602 10.63698000 -1.03
- --------------------------------------------------------
12/31/96 0.00 10.63698000 10.63698000 0.00
- --------------------------------------------------------
12/31/96 -1.00 10.63698000 10.63698000 -1.00
- --------------------------------------------------------
AVG ANNUAL RETURN: 5.12% TOTAL: 1646.91
Days= 0
10 Years= 10
</TABLE>
<PAGE>
VAN ECK GOLD & NATURAL RESOURCES
ASSUMING CONTRACT SURRENDERED
<TABLE>
<CAPTION>
PERIOD: 1
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
12/29/95 1000.00 10.04398298 11.69025400 1163.91
- ---------------------------------------------------------
12/31/96 -70.00 11.69025400 11.69025400 -70.00
- ---------------------------------------------------------
12/31/96 -1.00 11.69025400 11.69025400 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 9.29% TOTAL: 1092.91
<CAPTION>
PERIOD: 5
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
12/31/91 1000.00 6.35789967 11.69025400 1838.70
- ---------------------------------------------------------
12/31/92 -1.00 6.01260627 11.69025400 -1.94
- ---------------------------------------------------------
12/31/93 -1.00 9.77320079 11.69025400 -1.20
- ---------------------------------------------------------
12/30/94 -1.00 9.17585479 11.69025400 -1.27
- ---------------------------------------------------------
12/29/95 -1.00 10.04398298 11.69025400 -1.16
- ---------------------------------------------------------
12/31/96 -30.00 11.69025400 11.69025400 -30.00
- ---------------------------------------------------------
12/31/96 -1.00 11.69025400 11.69025400 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 12.50% TOTAL: 1802.12
<CAPTION>
PERIOD: INCEPTION
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
9/1/89 1000.00 7.24458540 11.69025400 1613.65
- ---------------------------------------------------------
9/1/90 -1.00 7.25069762 11.69025400 -1.61
- ---------------------------------------------------------
9/1/91 -1.00 6.43033344 11.69025400 -1.82
- ---------------------------------------------------------
9/1/92 -1.00 6.55655548 11.69025400 -1.78
- ---------------------------------------------------------
9/1/93 -1.00 8.86848344 11.69025400 -1.32
- ---------------------------------------------------------
9/1/94 -1.00 10.23713360 11.69025400 -1.14
- ---------------------------------------------------------
9/1/95 -1.00 9.91051860 11.69025400 -1.18
- ---------------------------------------------------------
12/31/96 -1.00 11.69025400 11.69025400 -1.00
- ---------------------------------------------------------
12/31/96 0.00 11.69025400 11.69025400 0.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 6.66% TOTAL: 1603.80
7.331507 DAYS = 121
YEARS= 7
</TABLE>
<PAGE>
VAN ECK GOLD & NATURAL RESOURCES
ASSUMING CONTRACT NOT SURRENDERED
<TABLE>
<CAPTION>
PERIOD: 1
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
12/29/95 1000.00 10.04398298 11.69025400 1163.91
- ---------------------------------------------------------
12/31/96 0.00 11.69025400 11.69025400 0.00
- ---------------------------------------------------------
12/31/96 -1.00 11.69025400 11.69025400 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 16.29% TOTAL: 1162.91
<CAPTION>
PERIOD: 5
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
12/31/91 1000.00 6.35789967 11.69025400 1838.70
- ---------------------------------------------------------
12/31/92 -1.00 6.01260627 11.69025400 -1.94
- ---------------------------------------------------------
12/31/93 -1.00 9.77320079 11.69025400 -1.20
- ---------------------------------------------------------
12/30/94 -1.00 9.17585479 11.69025400 -1.27
- ---------------------------------------------------------
12/29/95 -1.00 10.04398298 11.69025400 -1.16
- ---------------------------------------------------------
12/31/96 0.00 11.69025400 11.69025400 0.00
- ---------------------------------------------------------
12/31/96 -1.00 11.69025400 11.69025400 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 12.87% TOTAL: 1832.12
<CAPTION>
PERIOD: INCEPTION
- ---------------------------------------------------------
DATE PAYMENT AUV BEG AUV END VALUE
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
9/1/89 1000.00 7.24458540 11.69025400 1613.65
- ---------------------------------------------------------
9/1/90 -1.00 7.25069762 11.69025400 -1.61
- ---------------------------------------------------------
9/1/91 -1.00 6.43033344 11.69025400 -1.82
- ---------------------------------------------------------
9/1/92 -1.00 6.55655548 11.69025400 -1.78
- ---------------------------------------------------------
9/1/93 -1.00 8.86848344 11.69025400 -1.32
- ---------------------------------------------------------
9/1/94 -1.00 10.23713360 11.69025400 -1.14
- ---------------------------------------------------------
9/1/95 -1.00 9.91051860 11.69025400 -1.18
- ---------------------------------------------------------
12/31/96 0.00 11.69025400 11.69025400 0.00
- ---------------------------------------------------------
12/31/96 -1.00 11.69025400 11.69025400 -1.00
- ---------------------------------------------------------
AVG ANNUAL RETURN: 6.66% TOTAL: 1603.80
7.331507 DAYS = 121
YEARS= 7
</TABLE>
<PAGE>
Exhibit 15
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer and/or
director of First ING Life Insurance Company of New York, a life insurance
corporation organized and existing under the laws of New York, does hereby
constitute and appoint John R. Barmeyer, Edward K. Campbell, Carol D. Hard,
Shirley A. Knarr, and each of them, with full power of substitution as his true
and lawful attorney and agent, to do any and all acts and things and to execute
any and all instruments which said attorney and agent may deem necessary or
advisable;
(i) to enable the said cororation to comply with the Securities Act
of 1933, as amended, the Investment Company Act of 1940, as
amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect hereof, in
connection with the registration under the said Securities Act
and the Investment Company Act of variable life insurance
contracts and variable annuity contracts of the said corporation
(hereinafter collectively called "First ING Securities"),
including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf
of the undersigned the name of the undersigned as officer and/or
director of the said corporation to a registration statement or
to any amendment thereto filed with the Securities and Exchange
Commission in respect to said First ING Securities and to any
instrument or document filed as part of, as an exhibit to or in
connection with, said registration statement or amendment, and
(ii) to register or qualify said First ING Securities for sale and to
register or license said corporation or any subsidiary thereof as
a broker or dealer in said First ING Securities under the
securities or Blue Sky Laws of all such states as may be
necessary or appropriate to permit therein the offering and sale
of said First ING Securities as contemplated by said registration
statement, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as
an officer and/or director of said corporation to any
application, statement, petition, prospectus, notice or other
instrument or document, or to any amendment thereto, or to any
exhibit filed as a part thereto or in connection therewith, which
is required to be signed by the undersigned and to be filed with
the public authority or authorities administering said securities
or blue sky laws for the purpose of so registering or licensing
said corporation;
and the undersigned does hereby ratify and confirm as his own act and deed all
that said attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 15th day
of April, 1997.
/s/ Evelyn A. Bentz
- ---------------------------------------
Evelyn A. Bentz
/s/ Connie L. Martin
- ---------------------------------------
In the Presence of: Connie L. Martin
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer and/or
director of First ING Life Insurance Company of New York, a life insurance
corporation organized and existing under the laws of New York, does hereby
constitute and appoint John R. Barmeyer, Edward K. Campbell, Carol D. Hard,
Shirley A. Knarr, and each of them, with full power of substitution as his true
and lawful attorney and agent, to do any and all acts and things and to execute
any and all instruments which said attorney and agent may deem necessary or
advisable;
(i) to enable the said cororation to comply with the Securities Act
of 1933, as amended, the Investment Company Act of 1940, as
amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect hereof, in
connection with the registration under the said Securities Act
and the Investment Company Act of variable life insurance
contracts and variable annuity contracts of the said corporation
(hereinafter collectively called "First ING Securities"),
including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf
of the undersigned the name of the undersigned as officer and/or
director of the said corporation to a registration statement or
to any amendment thereto filed with the Securities and Exchange
Commission in respect to said First ING Securities and to any
instrument or document filed as part of, as an exhibit to or in
connection with, said registration statement or amendment, and
(ii) to register or qualify said First ING Securities for sale and to
register or license said corporation or any subsidiary thereof as
a broker or dealer in said First ING Securities under the
securities or Blue Sky Laws of all such states as may be
necessary or appropriate to permit therein the offering and sale
of said First ING Securities as contemplated by said registration
statement, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as
an officer and/or director of said corporation to any
application, statement, petition, prospectus, notice or other
instrument or document, or to any amendment thereto, or to any
exhibit filed as a part thereto or in connection therewith, which
is required to be signed by the undersigned and to be filed with
the public authority or authorities administering said securities
or blue sky laws for the purpose of so registering or licensing
said corporation;
and the undersigned does hereby ratify and confirm as his own act and deed all
that said attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 8th day
of April, 1997.
/s/ Wayne D. Bidelman
- ---------------------------------------
Wayne D. Bidelman
/s/ Shirley A. Knarr
- ---------------------------------------
In the Presence of: Shirley A. Knarr
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer and/or
director of First ING Life Insurance Company of New York, a life insurance
corporation organized and existing under the laws of New York, does hereby
constitute and appoint John R. Barmeyer, Edward K. Campbell, Carol D. Hard,
Shirley A. Knarr, and each of them, with full power of substitution as his true
and lawful attorney and agent, to do any and all acts and things and to execute
any and all instruments which said attorney and agent may deem necessary or
advisable;
(i) to enable the said cororation to comply with the Securities Act
of 1933, as amended, the Investment Company Act of 1940, as
amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect hereof, in
connection with the registration under the said Securities Act
and the Investment Company Act of variable life insurance
contracts and variable annuity contracts of the said corporation
(hereinafter collectively called "First ING Securities"),
including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf
of the undersigned the name of the undersigned as officer and/or
director of the said corporation to a registration statement or
to any amendment thereto filed with the Securities and Exchange
Commission in respect to said First ING Securities and to any
instrument or document filed as part of, as an exhibit to or in
connection with, said registration statement or amendment, and
(ii) to register or qualify said First ING Securities for sale and to
register or license said corporation or any subsidiary thereof as
a broker or dealer in said First ING Securities under the
securities or Blue Sky Laws of all such states as may be
necessary or appropriate to permit therein the offering and sale
of said First ING Securities as contemplated by said registration
statement, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as
an officer and/or director of said corporation to any
application, statement, petition, prospectus, notice or other
instrument or document, or to any amendment thereto, or to any
exhibit filed as a part thereto or in connection therewith, which
is required to be signed by the undersigned and to be filed with
the public authority or authorities administering said securities
or blue sky laws for the purpose of so registering or licensing
said corporation;
and the undersigned does hereby ratify and confirm as his own act and deed all
that said attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 28th day
of March, 1997.
/s/ Stephen M. Christopher
- ---------------------------------------
Stephen M. Christopher
/s/ Shirley A. Knarr
- ---------------------------------------
In the Presence of: Shirley A. Knarr
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer and/or
director of First ING Life Insurance Company of New York, a life insurance
corporation organized and existing under the laws of New York, does hereby
constitute and appoint John R. Barmeyer, Edward K. Campbell, Carol D. Hard,
Shirley A. Knarr, and each of them, with full power of substitution as his true
and lawful attorney and agent, to do any and all acts and things and to execute
any and all instruments which said attorney and agent may deem necessary or
advisable;
(i) to enable the said cororation to comply with the Securities Act
of 1933, as amended, the Investment Company Act of 1940, as
amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect hereof, in
connection with the registration under the said Securities Act
and the Investment Company Act of variable life insurance
contracts and variable annuity contracts of the said corporation
(hereinafter collectively called "First ING Securities"),
including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf
of the undersigned the name of the undersigned as officer and/or
director of the said corporation to a registration statement or
to any amendment thereto filed with the Securities and Exchange
Commission in respect to said First ING Securities and to any
instrument or document filed as part of, as an exhibit to or in
connection with, said registration statement or amendment, and
(ii) to register or qualify said First ING Securities for sale and to
register or license said corporation or any subsidiary thereof as
a broker or dealer in said First ING Securities under the
securities or Blue Sky Laws of all such states as may be
necessary or appropriate to permit therein the offering and sale
of said First ING Securities as contemplated by said registration
statement, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as
an officer and/or director of said corporation to any
application, statement, petition, prospectus, notice or other
instrument or document, or to any amendment thereto, or to any
exhibit filed as a part thereto or in connection therewith, which
is required to be signed by the undersigned and to be filed with
the public authority or authorities administering said securities
or blue sky laws for the purpose of so registering or licensing
said corporation;
and the undersigned does hereby ratify and confirm as his own act and deed all
that said attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 8th day
of April, 1997.
/s/ Thomas F. Conroy
- ---------------------------------------
Thomas F. Conroy
/s/ Sherill K. LaSalle
- ---------------------------------------
In the Presence of: Sherill K. LaSalle
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer and/or
director of First ING Life Insurance Company of New York, a life insurance
corporation organized and existing under the laws of New York, does hereby
constitute and appoint John R. Barmeyer, Edward K. Campbell, Carol D. Hard,
Shirley A. Knarr, and each of them, with full power of substitution as his true
and lawful attorney and agent, to do any and all acts and things and to execute
any and all instruments which said attorney and agent may deem necessary or
advisable;
(i) to enable the said cororation to comply with the Securities Act
of 1933, as amended, the Investment Company Act of 1940, as
amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect hereof, in
connection with the registration under the said Securities Act
and the Investment Company Act of variable life insurance
contracts and variable annuity contracts of the said corporation
(hereinafter collectively called "First ING Securities"),
including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf
of the undersigned the name of the undersigned as officer and/or
director of the said corporation to a registration statement or
to any amendment thereto filed with the Securities and Exchange
Commission in respect to said First ING Securities and to any
instrument or document filed as part of, as an exhibit to or in
connection with, said registration statement or amendment, and
(ii) to register or qualify said First ING Securities for sale and to
register or license said corporation or any subsidiary thereof as
a broker or dealer in said First ING Securities under the
securities or Blue Sky Laws of all such states as may be
necessary or appropriate to permit therein the offering and sale
of said First ING Securities as contemplated by said registration
statement, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as
an officer and/or director of said corporation to any
application, statement, petition, prospectus, notice or other
instrument or document, or to any amendment thereto, or to any
exhibit filed as a part thereto or in connection therewith, which
is required to be signed by the undersigned and to be filed with
the public authority or authorities administering said securities
or blue sky laws for the purpose of so registering or licensing
said corporation;
and the undersigned does hereby ratify and confirm as his own act and deed all
that said attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 7th day
of April, 1997.
/s/ Eugene C. Copeland
- ---------------------------------------
Eugene C. Copeland
/s/ Shirley A. Knarr
- ---------------------------------------
In the Presence of: Shirley A. Knarr
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer and/or
director of First ING Life Insurance Company of New York, a life insurance
corporation organized and existing under the laws of New York, does hereby
constitute and appoint John R. Barmeyer, Edward K. Campbell, Carol D. Hard,
Shirley A. Knarr, and each of them, with full power of substitution as his true
and lawful attorney and agent, to do any and all acts and things and to execute
any and all instruments which said attorney and agent may deem necessary or
advisable;
(i) to enable the said cororation to comply with the Securities Act
of 1933, as amended, the Investment Company Act of 1940, as
amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect hereof, in
connection with the registration under the said Securities Act
and the Investment Company Act of variable life insurance
contracts and variable annuity contracts of the said corporation
(hereinafter collectively called "First ING Securities"),
including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf
of the undersigned the name of the undersigned as officer and/or
director of the said corporation to a registration statement or
to any amendment thereto filed with the Securities and Exchange
Commission in respect to said First ING Securities and to any
instrument or document filed as part of, as an exhibit to or in
connection with, said registration statement or amendment, and
(ii) to register or qualify said First ING Securities for sale and to
register or license said corporation or any subsidiary thereof as
a broker or dealer in said First ING Securities under the
securities or Blue Sky Laws of all such states as may be
necessary or appropriate to permit therein the offering and sale
of said First ING Securities as contemplated by said registration
statement, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as
an officer and/or director of said corporation to any
application, statement, petition, prospectus, notice or other
instrument or document, or to any amendment thereto, or to any
exhibit filed as a part thereto or in connection therewith, which
is required to be signed by the undersigned and to be filed with
the public authority or authorities administering said securities
or blue sky laws for the purpose of so registering or licensing
said corporation;
and the undersigned does hereby ratify and confirm as his own act and deed all
that said attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 24th day
of July, 1997.
/s/ Fred A. Deering
- ---------------------------------------
Fred A. Deering
/s/ Sherrill K. LaSalle
- ---------------------------------------
In the Presence of: Sherrill K. LaSalle
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer and/or
director of First ING Life Insurance Company of New York, a life insurance
corporation organized and existing under the laws of New York, does hereby
constitute and appoint John R. Barmeyer, Edward K. Campbell, Carol D. Hard,
Shirley A. Knarr, and each of them, with full power of substitution as his true
and lawful attorney and agent, to do any and all acts and things and to execute
any and all instruments which said attorney and agent may deem necessary or
advisable;
(i) to enable the said cororation to comply with the Securities Act
of 1933, as amended, the Investment Company Act of 1940, as
amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect hereof, in
connection with the registration under the said Securities Act
and the Investment Company Act of variable life insurance
contracts and variable annuity contracts of the said corporation
(hereinafter collectively called "First ING Securities"),
including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf
of the undersigned the name of the undersigned as officer and/or
director of the said corporation to a registration statement or
to any amendment thereto filed with the Securities and Exchange
Commission in respect to said First ING Securities and to any
instrument or document filed as part of, as an exhibit to or in
connection with, said registration statement or amendment, and
(ii) to register or qualify said First ING Securities for sale and to
register or license said corporation or any subsidiary thereof as
a broker or dealer in said First ING Securities under the
securities or Blue Sky Laws of all such states as may be
necessary or appropriate to permit therein the offering and sale
of said First ING Securities as contemplated by said registration
statement, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as
an officer and/or director of said corporation to any
application, statement, petition, prospectus, notice or other
instrument or document, or to any amendment thereto, or to any
exhibit filed as a part thereto or in connection therewith, which
is required to be signed by the undersigned and to be filed with
the public authority or authorities administering said securities
or blue sky laws for the purpose of so registering or licensing
said corporation;
and the undersigned does hereby ratify and confirm as his own act and deed all
that said attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 14th day
of April, 1997.
/s/ Weaver H. Gaines
- ---------------------------------------
Weaver H. Gaines
/s/ Gwenyth E. Thompson
- ---------------------------------------
In the Presence of: Gwenyth E. Thompson
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer and/or
director of First ING Life Insurance Company of New York, a life insurance
corporation organized and existing under the laws of New York, does hereby
constitute and appoint John R. Barmeyer, Edward K. Campbell, Carol D. Hard,
Shirley A. Knarr, and each of them, with full power of substitution as his true
and lawful attorney and agent, to do any and all acts and things and to execute
any and all instruments which said attorney and agent may deem necessary or
advisable;
(i) to enable the said cororation to comply with the Securities Act
of 1933, as amended, the Investment Company Act of 1940, as
amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect hereof, in
connection with the registration under the said Securities Act
and the Investment Company Act of variable life insurance
contracts and variable annuity contracts of the said corporation
(hereinafter collectively called "First ING Securities"),
including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf
of the undersigned the name of the undersigned as officer and/or
director of the said corporation to a registration statement or
to any amendment thereto filed with the Securities and Exchange
Commission in respect to said First ING Securities and to any
instrument or document filed as part of, as an exhibit to or in
connection with, said registration statement or amendment, and
(ii) to register or qualify said First ING Securities for sale and to
register or license said corporation or any subsidiary thereof as
a broker or dealer in said First ING Securities under the
securities or Blue Sky Laws of all such states as may be
necessary or appropriate to permit therein the offering and sale
of said First ING Securities as contemplated by said registration
statement, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as
an officer and/or director of said corporation to any
application, statement, petition, prospectus, notice or other
instrument or document, or to any amendment thereto, or to any
exhibit filed as a part thereto or in connection therewith, which
is required to be signed by the undersigned and to be filed with
the public authority or authorities administering said securities
or blue sky laws for the purpose of so registering or licensing
said corporation;
and the undersigned does hereby ratify and confirm as his own act and deed all
that said attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 10th day
of April, 1997.
/s/ R. Glenn Hilliard
- ---------------------------------------
R. Glenn Hilliard
/s/ Judy R. Martin
- ---------------------------------------
In the Presence of: Judy R. Martin
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer and/or
director of First ING Life Insurance Company of New York, a life insurance
corporation organized and existing under the laws of New York, does hereby
constitute and appoint John R. Barmeyer, Edward K. Campbell, Carol D. Hard,
Shirley A. Knarr, and each of them, with full power of substitution as his true
and lawful attorney and agent, to do any and all acts and things and to execute
any and all instruments which said attorney and agent may deem necessary or
advisable;
(i) to enable the said cororation to comply with the Securities Act
of 1933, as amended, the Investment Company Act of 1940, as
amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect hereof, in
connection with the registration under the said Securities Act
and the Investment Company Act of variable life insurance
contracts and variable annuity contracts of the said corporation
(hereinafter collectively called "First ING Securities"),
including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf
of the undersigned the name of the undersigned as officer and/or
director of the said corporation to a registration statement or
to any amendment thereto filed with the Securities and Exchange
Commission in respect to said First ING Securities and to any
instrument or document filed as part of, as an exhibit to or in
connection with, said registration statement or amendment, and
(ii) to register or qualify said First ING Securities for sale and to
register or license said corporation or any subsidiary thereof as
a broker or dealer in said First ING Securities under the
securities or Blue Sky Laws of all such states as may be
necessary or appropriate to permit therein the offering and sale
of said First ING Securities as contemplated by said registration
statement, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as
an officer and/or director of said corporation to any
application, statement, petition, prospectus, notice or other
instrument or document, or to any amendment thereto, or to any
exhibit filed as a part thereto or in connection therewith, which
is required to be signed by the undersigned and to be filed with
the public authority or authorities administering said securities
or blue sky laws for the purpose of so registering or licensing
said corporation;
and the undersigned does hereby ratify and confirm as his own act and deed all
that said attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 31st day
of March, 1997.
/s/ William H. Lutter
- ---------------------------------------
William H. Lutter
/s/ Maeisu Quesnz
- ---------------------------------------
In the Presence of: Maeisu Quesnz
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer and/or
director of First ING Life Insurance Company of New York, a life insurance
corporation organized and existing under the laws of New York, does hereby
constitute and appoint John R. Barmeyer, Edward K. Campbell, Carol D. Hard,
Shirley A. Knarr, and each of them, with full power of substitution as his true
and lawful attorney and agent, to do any and all acts and things and to execute
any and all instruments which said attorney and agent may deem necessary or
advisable;
(i) to enable the said cororation to comply with the Securities Act
of 1933, as amended, the Investment Company Act of 1940, as
amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect hereof, in
connection with the registration under the said Securities Act
and the Investment Company Act of variable life insurance
contracts and variable annuity contracts of the said corporation
(hereinafter collectively called "First ING Securities"),
including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf
of the undersigned the name of the undersigned as officer and/or
director of the said corporation to a registration statement or
to any amendment thereto filed with the Securities and Exchange
Commission in respect to said First ING Securities and to any
instrument or document filed as part of, as an exhibit to or in
connection with, said registration statement or amendment, and
(ii) to register or qualify said First ING Securities for sale and to
register or license said corporation or any subsidiary thereof as
a broker or dealer in said First ING Securities under the
securities or Blue Sky Laws of all such states as may be
necessary or appropriate to permit therein the offering and sale
of said First ING Securities as contemplated by said registration
statement, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as
an officer and/or director of said corporation to any
application, statement, petition, prospectus, notice or other
instrument or document, or to any amendment thereto, or to any
exhibit filed as a part thereto or in connection therewith, which
is required to be signed by the undersigned and to be filed with
the public authority or authorities administering said securities
or blue sky laws for the purpose of so registering or licensing
said corporation;
and the undersigned does hereby ratify and confirm as his own act and deed all
that said attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 14th day
of April, 1997.
/s/ Roger D. Roenfeldt
- ---------------------------------------
Roger D. Roenfeldt
/s/ Patricia A. Wainken
- ---------------------------------------
In the Presence of: Patricia A. Wainken
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer and/or
director of First ING Life Insurance Company of New York, a life insurance
corporation organized and existing under the laws of New York, does hereby
constitute and appoint John R. Barmeyer, Edward K. Campbell, Carol D. Hard,
Shirley A. Knarr, and each of them, with full power of substitution as his true
and lawful attorney and agent, to do any and all acts and things and to execute
any and all instruments which said attorney and agent may deem necessary or
advisable;
(i) to enable the said cororation to comply with the Securities Act
of 1933, as amended, the Investment Company Act of 1940, as
amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect hereof, in
connection with the registration under the said Securities Act
and the Investment Company Act of variable life insurance
contracts and variable annuity contracts of the said corporation
(hereinafter collectively called "First ING Securities"),
including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf
of the undersigned the name of the undersigned as officer and/or
director of the said corporation to a registration statement or
to any amendment thereto filed with the Securities and Exchange
Commission in respect to said First ING Securities and to any
instrument or document filed as part of, as an exhibit to or in
connection with, said registration statement or amendment, and
(ii) to register or qualify said First ING Securities for sale and to
register or license said corporation or any subsidiary thereof as
a broker or dealer in said First ING Securities under the
securities or Blue Sky Laws of all such states as may be
necessary or appropriate to permit therein the offering and sale
of said First ING Securities as contemplated by said registration
statement, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as
an officer and/or director of said corporation to any
application, statement, petition, prospectus, notice or other
instrument or document, or to any amendment thereto, or to any
exhibit filed as a part thereto or in connection therewith, which
is required to be signed by the undersigned and to be filed with
the public authority or authorities administering said securities
or blue sky laws for the purpose of so registering or licensing
said corporation;
and the undersigned does hereby ratify and confirm as his own act and deed all
that said attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 11th day
of April, 1997.
/s/ Stephen K. West
- ---------------------------------------
Stephen K. West
/s/ Lillian Villanive
- ---------------------------------------
In the Presence of: Lillian Villanive
<PAGE>
EXHIBIT 16
ING GROUP - U.S.A. Holding Company System
As of December 31, 1995
ING Group N.V. (The Netherlands) - No FEIN(non-insurer)
ING Bank N.V. (The Netherlands) - No FEIN(non-insurer)
ING Verzekeringen N.V. (The Netherlands) - No Fein (non-insurer)
ING Insurance International B.V. (The Netherlands) - No FEIN(non-insurer)
Nederlands Reassurantie Groep Holding N.V. (The Netherlands) (non-insurer)
NRG America Holding Company (Pennsylvania) (non-insurer) (23-2074221)
NRG America Syndicate (New York) (non-insurer) (22-2281839)
NRG America Management Corporation (Pennsylvania) (23-1667532)
Philadelphia Reinsurance Corporation (Pennsylvania) (23-1620930)
Nationale-Nederlanden Intertrust B.V. (The Netherlands) (non-insurer)
NNUS Realty Corporation (Delaware) (non-insurer) (13-3062172)
ING America Insurance Holdings, Inc. (Delaware) (non-insurer) (02-0333654)
ING North America Insurance Corporation (Delaware) (non-insurer) (52-
1317217)
Internationale-Nederlanden U.S. P&C Corporation, Inc. (Delaware) (non-
insurance) (51-0290450)
Excelsior Insurance Company (New Hampshire) (15-0302550)
Peerless Insurance Company (New Hampshire) (02-0177030)
America First Insurance Company (Florida) (58-0953149)
Alabama First Insurance Company (Alabama) (63-0830057)
Fidelity Southern Insurance Company (Texas) (74-1276503)
Diversified Settlements, Inc. (New Hampshire) (non-insurer) (02-
0424648)
The Netherlands Insurance Company (New Hampshire) (02-0342937)
Indiana Insurance Company (Indiana) (35-0410010)
Consolidated Insurance Company (Indiana) (35-6018568)
Cooling Grumme Mumford Company, Inc. (Indiana) (non-insurance) (35-
6018566)
Internationale Nederlanden America Life Corporation (Georgia) (non-
insurer) (58-1360182)
Southland Life Insurance Company (Texas) (75-0572420)
GAC Capital, Inc. (Delaware) (non-insurer) (51-0266924)
Life Insurance Company of Georgia (Georgia) (58-0298930)
Springstreet Associates, Inc. (Georgia) (non-insurer) (58-1822054)
Security Life of Denver Insurance Company (Colorado) (84-0499703)
ING America Equities, Inc. (Colorado) (non-insurer) (84-0499703)
Midwestern United Life Insurance Company (Indiana) (35-0838945)
First Secured Mortgage Deposit Corporation (Colorado) (non-insurance)
(84-1086427)
First ING of New York (New York) (13-2740556)
Wilderness Associate (Colorado) (non-insurer)
Columbine Life Insurance Company (Colorado) (52-1222820)
Security Life of Denver International, LTD (non-insurer)
SLR Management, LTD (Bermuda) (non-insurer)
Lion Custom Investments (Delaware) (non-insurer)
Orange Investment Enterprises, Inc. (Delaware) (non-insurer)
ING Segures Sociedad Anonima de Capital Variable (Mexico) Insurer
ING Investment Management Inc. (Delaware) (58-1515059)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 624,057
<INVESTMENTS-AT-VALUE> 672,775
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 672,775
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,037
<TOTAL-LIABILITIES> 1,037
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 671,738
<DIVIDEND-INCOME> 19,501
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 4,629
<NET-INVESTMENT-INCOME> 14,872
<REALIZED-GAINS-CURRENT> (4,999)
<APPREC-INCREASE-CURRENT> 48,718
<NET-CHANGE-FROM-OPS> 58,591
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 67,861,780
<NUMBER-OF-SHARES-REDEEMED> 3,823,620
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 671,738
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 5,869
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
