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T. ROWE PRICE NO-LOAD VARIABLE ANNUITY
AN INDIVIDUAL FLEXIBLE PREMIUM
DEFERRED VARIABLE ANNUITY CONTRACT
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ISSUED BY:
First Security Benefit Life Insurance
and Annuity Company of New York
70 West Red Oak Lane, 4th Floor
White Plains, New York 10604
1-914-697-4748
SUPPLEMENT DATED JANUARY 20, 1998
TO PROSPECTUS DATED MAY 1, 1997
The following is added to the end of the Section "First Security Benefit Life
Insurance and Annuity Company of New York" found on page 14:
In December 1997, the Board of Directors of Security Benefit Life Insurance
Company ("SBL"), the Company's parent company, approved a Plan of Conversion
("Plan") under which SBL would convert from a mutual life insurance company to a
stock life insurance company ultimately controlled by a newly-formed mutual
holding company to be named Security Benefit Mutual Holding Company. Under the
Plan, membership interests of current SBL Contractowners would become membership
interests in Security Benefit Mutual Holding Company upon conversion. After the
conversion, persons who acquire policies from SBL would automatically be members
in the mutual holding company. The Plan is subject to approval by the Insurance
Commissioner of the State of Kansas and SBL's policyholders, among other
approvals and conditions. If the necessary approvals are obtained and conditions
met, the conversion could occur in the second quarter of 1998.
The Section "Tax Penalties" under "Federal Tax Matters - Qualified Plans" found
on page 40 is deleted in its entirety and replaced with the following:
2. TAX PENALTIES
Premature Distribution Tax. Distributions from a Qualified Plan before the owner
reaches age 59 1/2 are generally subject to an additional tax equal to 10
percent of the taxable portion of the distribution. The 10 percent penalty tax
does not apply to distributions: (i) made on or after the death of the Owner;
(ii) attributable to the Owner's disability; (iii) which are part of a series of
substantially equal periodic payments made (at least annually) for the life (or
life expectancy) of the Owner or the joint lives (or joint life expectancies) of
the Owner and a designated beneficiary; (iv) made to pay for certain medical
expenses; (v) that are exempt withdrawals of an excess contribution; (vi) that
are rolled over or transferred in accordance with Code requirements; or (vii)
which, subject to certain restrictions, do not exceed the health insurance
premiums paid by unemployed individuals in certain cases. Starting January 1,
1998, there are two additional exceptions to the 10 percent penalty tax on
withdrawals from IRAs before age 59 1/2: withdrawals made to pay "qualified
higher education expenses" and certain "qualified first-time homebuyer
distributions."
Minimum Distribution Tax. If the amount distributed from a Qualified Plan is
less than the minimum required distribution for the year, the Owner is subject
to a 50 percent tax on the amount that was not properly distributed.
Excess Distribution/Accumulation Tax. The penalty tax of 15 percent which was
imposed (in addition to any ordinary income tax) on large plan distributions and
the "excess retirement accumulations" of an individual has been repealed,
effective January 1, 1997.
