RETIREMENT PLAN SERIES ACCOUNT
of
Great-West Life & Annuity Insurance Company
INDIVIDUAL FLEXIBLE PREMIUM VARIABLE ANNUITY CONTRACTS
Distributed by
One Orchard Equities, Inc.
Issued by
Great-West Life & Annuity Insurance Company
8525 East Orchard Road, Englewood, Colorado 80111
(800) 338-4015
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Overview
This Prospectus describes individual flexible premium variable annuity contracts
(the "Contracts") designed for Individual Retirement Annuity programs ("IRA
Programs"). The Contracts provide an annuity insurance contract whose value is
based on the investment performance of Investment Divisions that you select. The
Contracts can be purchased only in connection with IRA Programs; depending on
your state of residence, there are generally three ways you can purchase a
Contract:
o with rollover proceeds from qualified plans, such as 401(k) plans, o with
rollover proceeds from other eligible rollover sources, or o with earned income.
If you purchase a Contract, your spouse may also purchase a Contract for his or
her IRA Program.
Who Should Invest
You should consider purchasing the Contract if you are seeking an investment for
your IRA Program that offers a wide range of investment and payment options
enabling you to design a retirement plan that meets your objectives and needs.
Allocating Your Investment
You can allocate your Contributions among 14 Investment Divisions of Retirement
Plan Series Account (the "Series Account"). Each Investment Division invests in
one of 14 corresponding portfolios ("Eligible Funds") of the Maxim Series Fund,
Inc. (the "Fund"). You can also allocate your money to certain options where you
can earn a fixed rate of return. Your interest in a fixed option is not
considered a security and is not subject to registration with or review by the
Securities and Exchange Commission.
Annuity Payment Options
The Contract offers you a variety of annuity payment options. You can select
from options that provide for fixed or variable payments or a combination of
both. Under a variable annuity payment option, your annuity payments will
continue to reflect the investment experience of the Investment Divisions you
select. Annuity payments can be guaranteed for your lifetime and/or your
spouse's lifetime or for a specified period of time, depending on your needs and
circumstances.
This Prospectus is accompanied by a current Prospectus for the Fund. This
Prospectus presents important information you should read before purchasing a
Contract. Please read it carefully and retain it for future reference. You can
find more detailed information pertaining to the Contract in the Statement of
Additional Information dated May 1, 2000, which has been filed with the
Securities and Exchange Commission. The Statement of Additional Information is
incorporated by reference into this Prospectus, which means that it is legally a
part of this Prospectus. It may be obtained without charge by contacting
Great-West Life & Annuity Insurance Company ("we," "GWL&A" or "Great-West") at
the address or telephone number set forth above. Or, you can obtain it by
visiting the Securities and Exchange Commission's web site at www.sec.gov.
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy or adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.
The date of this Prospectus is May 1, 2000.
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<S> <C> <C> <C> <C> <C> <C>
Table of Contents
Definitions 4
Key Features 6
Fee Table 8
Eligible Fund Annual Expenses 9
Examples 10
Condensed Financial Information 13
Great-West Life & Annuity Insurance Company 14
The Series Account 14
Eligible Funds 14
Advisers 16
Reinvestment and Redemption 16
Investments of the Series Account 16
The Contracts 17
Charges and Deductions 19
Death Benefit 21
Annuity Options 22
Periodic Payment Options 24
Federal Tax Consequences 25
Performance Related Information 28
Voting Rights 30
Distribution of the Contracts 31
Amendment of Contracts 31
Ownership 31
State Regulation 31
Reports 31
Rights Reserved by Great-West 31
Adding and Discontinuing Investment Options 31
Substitution of Investments 32
Legal Matters 32
Registration Statement 32
Statement of Additional Information 32
</TABLE>
Definitions
Accumulation Period
The period between the effective date of your Contract and the Annuity
Commencement Date. During this period, you are making Contributions to the
Contract.
Accumulation Unit
An accounting measure we use to determine your Variable Account Value during the
Accumulation Period.
Administrative Offices
The Administrative Offices of GWL&A are located at 8525 East Orchard Road,
Englewood, Colorado 80111.
Annuitant
The person upon whose life the payment of an annuity is based and who will
receive annuity payments. The Annuitant must be the Contract Owner.
Annuity Account
An account established by us in your name that reflects all of your activity
under a Contract.
Annuity Commencement Date
The date annuity payments begin under an Annuity Option.
Annuity Period
The period following the Accumulation Period that begins on the Annuity
Commencement Date.
Annuity Unit
An accounting measure we use to determine the dollar value of each variable
annuity payment after the first payment.
Contribution(s)
Amounts you allocate to a Guaranteed or Variable Sub-Account prior to any
Premium Tax, if applicable, or other deductions.
Contract
An agreement between GWL&A and the Contract Owner (which includes the purchase
application) providing the terms of the variable annuity offered by this
Prospectus.
Contract Owner
The person to whom a Contract is issued; sometimes referred to as "you" or
"your" in this Prospectus.
Contract Value
The sum of your Variable Account Value and your Guaranteed Account Value, less
any withdrawals, deductions for charges, and any applicable Premium Tax.
Eligible Fund
A mutual fund in which an Investment Division invests all of its assets. Each
Eligible Fund is a portfolio of the Fund.
Fixed Annuity
An annuity with payments which remain fixed throughout the Annuity Period and
which do not reflect the investment experience of the Series Account.
Fixed Option
An option that pays a fixed rate of return to which you can allocate
Contributions or Transfers. Your interest in a fixed option is not a security
and is not subject to supervision by the Securities and Exchange Commission.
Guaranteed Account Value
The sum of the values of your Guaranteed Sub-Accounts.
Guaranteed Interest Rate
A minimum interest rate applicable to a Fixed Option. It is presently equal to
an annual effective rate of 3.00%.
Guaranteed Sub-Account
An account we maintain that reflects the values credited to you from a specific
Fixed Option.
Investment Division
The Series Account is divided into Investment Divisions, one for each Eligible
Fund. Each Investment Division invests all of its assets in one Eligible Fund.
You select one or more Investment Divisions to which you allocate Contract
Value. Contract Value you allocate to an Investment Division will reflect the
investment performance of the corresponding Eligible Fund.
Premium Tax
The amount of tax, if any, charged by a state or other governmental authority.
Request
Any request, either written, by telephone or computerized, which is in a form
satisfactory to GWL&A and received by GWL&A at its Administrative Offices.
Series Account
The segregated investment account established by GWL&A to provide funding
options for the Contract. It is registered as a unit investment trust under the
Investment Company Act of 1940.
Transfer
When you move your Contract Value between and among the Investment Divisions
and/or the Fixed Options.
Valuation Date
A date on which we calculate the value of the Investment Divisions. This
calculation is made as the close of business of the New York Stock Exchange
(generally 4:00 p.m. ET) on each day that the New York Stock Exchange is open
for trading. Contributions and Requests received after 4:00 p.m. ET will be
considered to have been received on the next business day. On the day after
Thanksgiving, however, you can only submit transactions by automated voice
response unit or fully automated computer link. The day after Thanksgiving is a
Valuation Date.
Valuation Period
The period between the end of two successive Valuation Dates.
Variable Annuity
An annuity providing for payments, the amount of which will vary with the
performance of the Investment Divisions that you select.
Variable Account Value
The total value of your Variable Sub-Account(s).
Variable Sub-Account
An account we maintain that reflects the value credited to you from a specific
Investment Division.
Key Features
Following are some of the key features of the Contract. These topics are
discussed in more detail throughout this Prospectus so please be sure to read
through it carefully.
Purpose of the Contracts
The Contracts are designed to be an investment for IRA Programs. Depending on
your state of residence, there are generally three ways you can purchase a
Contract:
o.......with rollover proceeds from qualified plans, such as 401(k) plans, o
with rollover proceeds from other eligible rollover sources, or o with earned
income.
The Contracts may also be purchased for IRA Programs for spouses of Contract
Owners.
Minimum Contribution The minimum initial investment is:
o.......Nothing if it is made with eligible rollover proceeds
o $250 if it is made from earned income derived from non-retirement plan sources
The minimum ongoing contribution is:
o Nothing if it is made with eligible rollover proceeds
o $250 if it is made from earned income derived from non-retirement plan sources
Allocation of Contributions
You may allocate your Contributions to the Investment Divisions of the Series
Account or to a Fixed Option, or a combination of both. The value of your
Contract that is allocated to the Investment Divisions will depend upon the
investment performance of those divisions. Each Investment Division invests in a
corresponding Eligible Fund. You can change your allocation instructions at any
time by Request.
Surrendering Your Contract or Making Partial Withdrawals
You can surrender your entire Contract or make a partial withdrawal at any time
before the Annuity Commencement Date. If you request a partial withdrawal less
than 30 days before the Annuity Commencement Date, we may delay the Annuity
Commencement Date for up to 30 days. Upon a surrender or partial withdrawal, a
penalty tax may be assessed. Please see "Federal Tax Consequences."
Transfers
You may Transfer your Contract Value among the Investment Divisions and/or the
Fixed Options at any time before the Annuity Commencement Date.
Annuity Options
The Contracts provide several annuity payment options. You can select from
options that provide for fixed or variable payments or a combination of both.
Under a variable payment option your annuity payments will reflect the
performance of the Investment Divisions that you select. You must elect an
annuity option(s) at least 30 days before your Annuity Commencement Date. If you
do not make an election within this time frame, annuity payments will begin
automatically on the Annuity Commencement Date under an option providing for a
life annuity with 120 monthly payments certain.
Free Look Period
During the free look period, you may cancel your Contract within 20 days (or
longer where required by law) of receiving it. You may cancel it for any reason
by delivering or mailing it along with a Request to cancel to our Administrative
Offices and we will refund to you the sum of the Contributions you have made
less withdrawals.
A Wide Range of Investment Choices
You may allocate some or all of your Contributions to 14 Investment Divisions of
the Series Account. Each Investment Division invests in shares of one Eligible
Fund. Each Eligible Fund is a separate mutual fund that has distinct investment
objectives and policies. You can obtain a more complete description of the
Eligible Funds in the accompanying Prospectus for the Fund, which you should
read carefully before allocating to an Investment Division. We reserve the right
to add or delete Investment Divisions at our discretion.
Charges and Deductions under the Contract
You will pay certain charges under the Contract. These charges may include:
o.......An annual Contract Maintenance Charge
o An administrative fee if you surrender your Contract or make a partial
withdrawal within the first twelve months after it was issued to you
o A mortality and expense risk charge
o A Premium Tax
In addition, you indirectly pay the management fees and other expenses of an
Eligible Fund when you allocate your money to the corresponding Investment
Division.
Fee Table
The purpose of this table and the examples that follow is to assist you in
understanding the various costs and expenses that you will bear directly or
indirectly when investing in the Contract. The table and examples reflect
expenses related to the Contracts and the Eligible Funds.
Contract Owner Transaction Expenses
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Sales load imposed on purchases None
Deferred sales load None
Distribution fees None
Exchange fee None
Administrative fee if your Contract is surrendered during first 12 months $50
Administrative fee if your make a partial withdrawal during first 12 months $25
Contract Maintenance Charge $30*
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* You will be charged a Contract Maintenance Charge of $30 if your Contract
Value is less than $5,000 on December 31. We will assess this fee only if your
Contract was issued on or after July 8, 1998, and the assessment of the fee has
been approved by the insurance regulatory authorities of your state.
Annual Expenses of the Investment Divisions (as a percentage of average Variable
Account Value) The only expense of the Investment Divisions of the Series
Account is our deduction of a Mortality and Expense Risk Charge. The amount of
this charge that applies to your Contract will be based on the following
schedule:
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Mortality & Expense Risk Contract Value
Charge
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0.75% $0 - $9,999.99
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0.50% $10,000 - $24,999.99
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0.25% $25,000 - $49,999.99
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0.00% $50,000 and greater
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The mortality and expense risk charge for the first calendar year of your
Contract will be based on your initial Contribution. Thereafter, the amount of
the charge will be based on your Contract Value on December 31 of each year. You
may wish to monitor your Contract Value closely to ensure that you take
advantage of the lowest possible charge.
Eligible Fund Annual Expenses
<TABLE>
(as a percentage of average daily net assets, for the period ended December 31, 1999)
Portfolio Management Fee Other Expenses Total Maxim Series
Fund Annual Expenses
<S> <C> <C>
Maxim Money Market 0.46% None 0.46%
Portfolio
Maxim Bond Index
Portfolio (formerly the 0.50% None 0.50%
Maxim Investment Grade
Corporate Bond
Portfolio)
Maxim Stock Index 0.60% None 0.60%
Portfolio
Maxim U.S. Government
Mortgage Securities
Portfolio 0.60% None 0.60%
Maxim Index 600 0.60% None 0.60%
Portfolio
Maxim Growth Index 0.60% None 0.60%
Portfolio
Maxim Short-Term
Maturity Bond Portfolio 0.60% None 0.60%
Maxim Founders Growth & 1.00% 0.11% 1.11%
Income Portfolio
(formerly the Maxim
Founders Blue Chip
Portfolio)
Maxim Value Index 0.60% None 0.60%
Portfolio
Maxim Ariel Small-Cap 1.00% 0.23% 1.23%
Value Portfolio
Maxim INVESCO ADR 1.00% 0.14% 1.14%
Portfolio
Maxim Loomis Sayles
Small-Cap Value 1.00% 0.14% 1.14%
Portfolio
Maxim Loomis Sayles 0.90% None 0.90%
Corporate Bond Portfolio
Maxim T. Rowe Price 1.00% 0.05% 1.05%
MidCap Growth Portfolio
Examples
If you surrender your Contract at the end of the applicable time period, you
would pay the following expenses on a $1,000 investment, assuming a 5% annual
return:
Investment Division 1 Year 3 Year 5 Year 10 Year
Maxim Money Market $63 $40 $69 $152
Investment Division
Maxim Bond Index $63 $41 $71 $156
Investment Division
Maxim Stock Index $64 $44 $77 $168
Investment Division
Maxim U.S. $64 $44 $77 $168
Government Mortgage
Securities
Investment Division
Maxim Index 600 $64 $44 $77 $168
Investment Division
Maxim Growth Index $64 $44 $77 $168
Investment Division
Maxim Short-Term $64 $44 $77 $168
Maturity Bond
Investment Division
Maxim Founders $70 $61 $104 $225
Growth &
IncomeInvestment
Division
Maxim Value Index $64 $44 $77 $168
Investment Division
Maxim Ariel $71 $65 $111 $239
Small-Cap Value
Investment Division
Maxim INVESCO ADR $70 $62 $106 $229
Investment Division
Maxim Loomis Sayles $70 $62 $106 $229
Small-Cap Value
Investment Division
Maxim Loomis Sayles $67 $54 $93 $202
Corporate Bond
Investment Division
Maxim T. Rowe Price $69 $59 $101 $219
MidCap Growth
Investment Division
Examples (Cont.)
If you do not surrender your Contract, or if you annuitize at the end of the
applicable time period, you would pay the following expenses on a $1,000
investment, assuming a 5% annual return:
Investment Division 1 Year 3 Year 5 Year 10 Year
Maxim Money Market $13 $40 $69 $152
Investment Division
Maxim Bond Index $13 $41 $71 $156
Investment Division
Maxim Stock Index $14 $44 $77 $168
Investment Division
Maxim U.S. $14 $44 $77 $168
Government Mortgage
Securities
Investment Division
Maxim Index 600 $14 $44 $77 $168
Investment Division
Maxim Growth Index $14 $44 $77 $168
Investment Division
Maxim Short-Term $14 $44 $77 $168
Maturity Bond
Investment Division
Maxim Founders $20 $61 $104 $225
Growth & Income
Investment Division
Maxim Value Index $14 $44 $77 $168
Investment Division
Maxim Ariel $21 $65 $111 $239
Small-Cap Value
Investment Division
Maxim INVESCO ADR $20 $62 $106 $229
Investment Division
Maxim Loomis Sayles $20 $62 $106 $229
Small-Cap Value
Investment Division
Maxim Loomis Sayles $17 $54 $93 $202
Corporate Bond
Investment Division
Maxim T. Rowe Price $19 $59 $101 $219
MidCap Growth
Investment Division
These examples, including the assumed rate of return, should not be considered a
representation of past or future expenses or performance. They show the highest
level of mortality and expense risk charges that you might pay. Actual expenses
and performance achieved may be more or less than those shown.
</TABLE>
Condensed Financial Information
Attached as Appendix A is a table showing selected information concerning
Accumulation Units for each Investment Division. An Accumulation Unit is the
unit of measure that we use to calculate the value of your interest in an
Investment Division. The Accumulation Unit values do not reflect the deduction
of certain charges that are subtracted from your Annuity Account Value, such as
the Contract Maintenance Charge. The information in the table is included in the
Series Account's financial statements, which have been audited by Deloitte &
Touche LLP, independent auditors. To obtain a fuller picture of each Investment
Division's finances and performance, you should also review the Series Account's
financial statements, which are contained in the Statement of Additional
Information.
Great-West Life & Annuity Insurance Company
GWL&A is a stock life insurance company originally organized under the laws of
the state of Kansas as the National Interment Association. Its name was changed
to Ranger National Life Insurance Company in 1963 and to Insuramerica
Corporation prior to changing to its current name in 1982. In September of 1990,
GWL&A redomesticated and is now organized under the laws of the state of
Colorado.
GWL&A is authorized to engage in the sale of life insurance, accident and health
insurance and annuities. It is qualified to do business in the District of
Columbia, Puerto Rico, the U.S. Virgin Islands, Guam and 49 states in the United
States.
GWL&A is an indirect, wholly-owned subsidiary of The Great-West Life Assurance
Company ("Great-West Life"). Great-West Life is a subsidiary of Great-West
Lifeco Inc., a holding company. Great-West Lifeco Inc. is in turn a subsidiary
of Power Financial Corporation, a financial services company. Power Corporation
of Canada, a holding and management company, has voting control of Power
Financial Corporation. Mr. Paul Desmarais, through a group of private holding
companies, which he controls, has voting control of Power Corporation of Canada.
GWL&A is the issuer of the Contracts and it has primary responsibility for their
administration.
The Series Account
We organized the Series Account under Colorado law on January 25, 1994. The
Series Account is registered with the Securities and Exchange Commission as a
unit investment trust under the Investment Company Act of 1940. However, this
registration does not involve supervision of the management or investment
practices or polices of the Series Account or GWL&A by the Securities and
Exchange Commission.
We own the assets of the Series Account. The income, gains or losses, realized
or unrealized, from assets allocated to an Investment Division are credited to
or charged against that Investment Division without regard to the other income
gains or losses of any other Investment Division and without regard to any other
business GWL&A may conduct.
We will at all time maintain assets in the Series Account with a total market
value at least equal to the reserves and other liabilities relating to the
variable benefits under all Contracts participating in the Series Account. Those
assets may not be charged with our liabilities from our other business. Our
obligations under those Contracts are, however, our general corporate
obligations.
The Series Account is divided into 14 Investment Divisions. Each Investment
Division invests exclusively in shares of a corresponding Eligible Fund. We may
in the future add new Investment Divisions or delete existing ones. The income,
gains or losses, realized or unrealized, from assets allocated to each
Sub-Account are credited to or charged against that Sub-Account without regard
to the other income, gains or losses of the other Sub-Accounts. If we decide to
make additional Investment Divisions available in the future, we may or may not
make them available to existing Contract Owners, based on our assessment of
marketing needs and conditions.
We hold the assets of the Series Account. We keep those assets physically
segregated and held separate and apart from our general account assets. We
maintain records of all purchases and redemptions of shares of the portfolios.
We do not guarantee the investment performance of the Investment Divisions. Your
Variable Account Value and the amount of variable annuity payments depend on the
investment performance of the Eligible Funds. Therefore, Contract Owners bear
the full investment risk for all Contributions allocated to the Investment
Divisions.
Eligible Funds
The Contract offers a number of investment options, corresponding to the
Investment Divisions. Each Investment Division invests in a single Eligible
Fund. Each Eligible Fund is a separate mutual fund having its own objectives and
investment policies. Each Eligible Fund is a separate mutual fund that is
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940. This registration does not involve supervision of the
Eligible Funds by the Securities and Exchange Commission. More comprehensive
information, including a discussion of potential risks, is found in the current
Prospectuses for the Eligible Funds. The Prospectuses should be read carefully
in connection with this Prospectus before you invest. You may obtain a copy of
the Eligible Fund Prospectuses without charge by Request.
Some of the Eligible Funds have been established by investment advisers which
manage publicly available mutual funds having similar names and investment
objectives. While some of the Eligible Funds may be similar to, and may in fact
be modeled after publicly available mutual funds, you should understand that the
Eligible Funds are not otherwise directly related to any publicly available
mutual fund. Consequently, the investment performance of publicly available
mutual funds and any corresponding Eligible Funds may differ substantially.
The income, gains and losses of one Eligible Fund generally have no effect on
the investment performance of any other Eligible Fund.
The Eligible Funds include the following:
o.......The Maxim Money Market Portfolio seeks as high a level of current income
as is consistent with the preservation of capital and liquidity. Investment
in the Money Market Portfolio is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the
portfolio seeks to preserve the value of your investment at $1.00 per share,
it is possible to lose money by investing in this portfolio.
o.......The Maxim Bond Index Portfolio (formerly the Maxim Investment Grade
Corporate Bond Portfolio) seeks to provide investment results, before fees,
that track the total return of the debt securities that comprise the Lehman
Aggregate Bond Index.
o.......The Maxim Stock Index Portfolio seeks investment results that track the
total return of the common stocks that comprise Standard & Poor's (S&P) 500
Composite Stock Price Index and the S&P Mid-Cap Index, weighted according to
their respective pro-rata shares of the market.
o.......The Maxim U.S. Government Mortgage Securities Portfolio seeks the
highest level of return consistent with preservation of capital and
substantial credit protection by investing primarily in mortgage-related
securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities.
o.......The Maxim Index 600 Portfolio seeks investment results that track the
total return of the common stocks that comprise the S&P Small-Cap 600 Stock
Index.
o.......The Maxim Value Index Portfolio seeks to provide investment results,
before fees, that track the total return of the common stocks that comprise
the S&P/BARRA Value Index.
o.......The Maxim Growth Index Portfolio seeks to provide investment results,
before fees, that track the total return of the common stocks that comprise
the S&P/BARRA Growth Index.
o.......The Maxim Ariel Small-Cap Value Portfolio seeks long term capital
appreciation, by investing primarily in small-cap common stocks. This
portfolio will emphasize small companies that are believed to be
undervalued.
o.......The Maxim INVESCO ADR Portfolio seeks high total return through capital
appreciation and current income, while reducing risk through
diversification. This portfolio invests primarily in foreign securities that
are issued in the form of American Depository Receipts ("ADRs") or foreign
stocks that are registered with the SEC and traded in the U.S.
o The Maxim Loomis Sayles Small-Cap Value Portfolio seeks long-term capital
growth. This portfolio seeks to build a core small-cap portfolio of solid
growth companies' stock with a small emphasis on companies that have
experienced significant business problems but which are believed to have
favorable prospects for recovery.
o.......The Maxim Loomis Sayles Corporate Bond Portfolio seeks high total
investment return through a combination of current income and capital
appreciation. This portfolio will invest primarily in corporate debt
securities of any maturity. It may also invest up to 20% of its total assets
in preferred stocks or foreign securities and up to 35% in below investment
grade quality securities.
o.......The Maxim Short-Term Maturity Bond Portfolio seeks maximum total return
that is consistent with preservation of capital and liquidity through
investment primarily in short-term investment grade bonds.
o.......The Maxim Founders Growth & Income Portfolio (formerly the Maxim
Founders Blue Chip Portfolio) seeks long-term growth of capital and income.
This portfolio invests primarily in common stocks of large, well
established, stable and mature companies, commonly known as "Blue Chip"
companies.
o.......The Maxim T. Rowe Price MidCap Growth Portfolio seeks long-term
appreciation. This portfolio will invest primarily in a diversified
portfolio of mid-cap companies emphasizing companies whose earnings are
expected to grow at a faster rate than the average mid-cap company.
Where to Find More Information about the Eligible Funds
Additional information about the Eligible Funds can be found in the current
Prospectus for the Fund, which can be obtained from us.
Advisers
Investment Adviser
GW Capital Management, LLC ("GW Capital"), 8515 East Orchard Road, Englewood,
Colorado 80111, is the investment adviser for the Fund. GW Capital is an
affiliate of GWL&A.
Sub-Advisers
Ariel Capital Management Inc., located at 307 N. Michigan Avenue, Chicago,
Illinois 60601, is responsible for the day-to-day management of the Maxim Ariel
Small-Cap Value Portfolio and for making decisions to buy, sell or hold any
particular security.
INVESCO Capital Management, Inc., located at 1315 Peachtree Street, N.E.,
Atlanta, Georgia 30309, is responsible for the day-to-day management of the
Maxim INVESCO ADR Portfolio and for making decisions to buy, sell or hold any
particular security.
Loomis, Sayles & Company, Inc., located at One Financial Center, Boston,
Massachusetts 02111, is responsible for the day-to-day management of the Maxim
Loomis Sayles Small-Cap Value and Maxim Loomis Sayles Corporate Bond Portfolios.
Founders Asset Management, LLC, located at 2930 East Third Avenue, Denver,
Colorado, 80206, is responsible for the day-to-day management of the Maxim
FoundersGrowth & Income Portfolio.
T. Rowe Price Associates, Inc., located at 100 East Pratt Street, Baltimore,
Maryland, 21202, is responsible for the day-to-day management of the Maxim T.
Rowe Price MidCap Growth Portfolio.
Reinvestment and Redemption
All dividend and capital gains distributions made by an Eligible Fund will be
automatically reinvested in shares of that portfolio. We will redeem portfolio
shares at their net asset values to the extent necessary to make annuity or
other payments under the variable portion of your Contract.
Investments of the Series Account Shares of the Fund are also sold to the
following:
o.......the FutureFunds Series Account and Maxim Series Account, which are
separate accounts established by GWL&A to receive and invest premiums paid
under variable annuity contracts issued by GWL&A,
o the TNE Series (k) Account of Metropolitan Life Insurance Company to fund
benefits under variable annuity contracts,
o the Pinnacle Series Account of GWL&A to fund variable life insurance policies,
o other separate accounts of GWL&A, its affiliates and other insurance
companies, and o certain qualified retirement plans.
It is possible that, in the future, it may be disadvantageous for variable life
insurance separate accounts and variable annuity separate accounts to invest in
the Fund at the same time. Although disadvantages are not currently foreseen,
the Board of Directors of the Fund intends to monitor events in order to
identify any material conflicts between variable life insurance policyowners and
variable annuity contract owners and to determine what action, if any, should be
taken in response thereto. Such action could include the sale of the Fund's
shares by one or more of GWL&A's separate accounts which could have adverse
consequences. For example, material conflicts could result from changes in state
insurance laws, changes in Federal income tax laws, changes in the investment
management of any portfolio of the Fund, or differences in voting instructions
between those given by policyowners and those given by contract owners.
Meeting investment objectives depends on various factors, including, but not
limited to, how well the portfolio managers anticipate changing economic and
market conditions. There is no guarantee that any of the Eligible Funds will
achieve their stated objectives.
The Contracts
Application and Initial Contribution
The first step to purchasing a Contract is to fill out your application and
forward it to our Administrative Offices along with your initial Contribution.
Depending on your state of residence, there are generally three ways you can
purchase a Contract:
o.......with rollover proceeds from qualified plans, such as 401(k) plans, o
with rollover proceeds from other eligible rollover sources, or o with earned
income.
The Contract may also be purchased for an IRA Program for your spouse.
There is no minimum initial Contribution if you purchase the Contract with
eligible rollover proceeds. Otherwise, the minimum initial amount needed to
purchase the Contract is $250.
If your application is complete, your Contract will be issued and your initial
Contribution will be credited within two business days of receipt at our
Administrative Offices. Acceptance is subject to sufficient information in a
form acceptable to us. We reserve the right to reject any application or
Contribution.
If your application is incomplete, we will contact you by telephone to obtain
the required information. If we are able to complete your application within
five business days of our receipt of your incomplete application, we will credit
your initial Contribution within two business days of the application's
completion. If we cannot complete your application within five business days
after we receive it, we will immediately return your application and initial
Contribution. If you provide consent, we will retain your initial Contribution
and credit it as soon as we have completed your application.
Free Look Period
During the free look period, you may cancel your Contract within twenty days (or
longer where required by law) after you receive it. During the free look period,
all Contributions you have instructed us to allocate to the Investment Divisions
will be allocated pursuant to your instructions.
During the free look period, you may change the Investment Divisions in which
you would like to invest as well as your allocation percentages. Any changes you
make during the free look period will take effect after the free look period has
expired.
Any returned Contracts will be void from the date we issued the Contract to you.
The sum of any Contributions you have made, less withdrawals, will be refunded
to you. Any investment gains or losses arising during this period shall accrue
to or be borne by us.
If you exercise the free look privilege, you must return the Contract to us at
our Administrative Offices. To cancel a Contract we must receive it personally
or postmarked by the expiration of the free look period.
Subsequent Contributions
Once your application is complete and we have received your initial
Contribution, you can make subsequent Contributions at any time prior to the
Annuity Commencement Date or the date you begin receiving payments under a
periodic payment option. There is no minimum Contribution amount if
Contributions are being made with eligible rollover proceeds. Otherwise, the
minimum ongoing Contribution amount is $250.
Contract Value
Before the Annuity Commencement Date, your Contract Value is the sum of your
Variable and Guaranteed Sub-Accounts.
Before your Annuity Commencement Date, your Variable Account Value is the total
dollar amount of all Accumulation Units credited to you from each Investment
Division in which you have invested money. When you allocate Contributions or
make Transfers to an Investment Division, we credit you with Accumulation Units
of that Division. We determine the number of Accumulation Units credited to you
by dividing the amount of your Contribution or Transfer by the Investment
Division's Accumulation Unit value on the Valuation Date your Contribution is
received or Transfer is processed.
We determine each Investment Division's Accumulation Unit value on each
Valuation Date as of the close of the New York Stock Exchange (generally 4:00
p.m. ET). We multiply the Division's Accumulation Unit value on the immediately
preceding Valuation Date by the Division's Net Investment Factor to arrive at
the current Valuation Date's Accumulation Unit value. Each Investment Division's
Accumulation Unit value is expected to change on a daily basis due to, among
other things, the investment experience of the Eligible Fund in which the
Division invests and the deduction of the Mortality and Expense Risk Charge. We
use the Net Investment Factor to determine the amount of this change, if any.
The formula we use to calculate the Net Investment Factor is described in
Appendix B. On any given Valuation Date, an Investment Division's Net Investment
Factor may be greater than one, less than one or zero. This means that an
Investment Division's Accumulation Unit value on that Valuation Date may
increase, decrease or remain unchanged.
Transfers
At any time before the Annuity Commencement Date, you can transfer all or a
portion of your Contract Value among and between the Investment Divisions and/or
the Fixed Option by Request. Transfer Requests can only be made by the Contract
Owner. A Transfer generally will be effective on the date the Request is
received if received before 4:00 p.m. ET, unless your Request designates some
later date. A Transfer Request we receive after 4:00 p.m. ET will be considered
received on the next following Valuation Date. If we receive a Transfer Request
within 30 days of the Annuity Commencement Date, we may delay the Annuity
Commencement Date by not more than 30 days. Additional Transfer conditions apply
to Transfers involving the Fixed Options, as more fully described in your
Contract.
You can make Transfer Requests by telephone if you have completed and sent to us
a Telephone Request Form. The Form may be obtained by contacting our
Administrative Offices. Telephone Transfers completed before 4:00 p.m. ET will
be made on that day at that day's unit values. Calls completed after 4:00 p.m.
ET will be made on the next Valuation Date, at that day's unit values. We will
use reasonable procedures to confirm that instructions communicated by telephone
are genuine such as:
o requiring some form of personal identification prior to acting on
instructions, o providing written confirmation of the transaction, and/or o tape
recording the instructions given by telephone.
If we follow these procedures, we will not be liable for any loses due to
unauthorized or fraudulent telephone instructions. We reserve the right to
suspend telephone privileges at anytime, for some or all Contracts, and for any
reason.
Cash Withdrawals
You may withdraw all or part of your Contract Value at any time before the date
annuity payments begin by submitting a written withdrawal Request to our
Administrative Offices. The amount payable to you if you surrender your Contract
is your Contract Value as determined on the Valuation Date we receive your
Request. If you surrender your Contract, that is, make a withdrawal of your
entire Contract Value, all rights under the Contract will terminate. You should
know that you can apply amounts payable upon surrender to an annuity payment
option instead of taking a lump sum.
If you request a partial withdrawal, your Contract Value will be reduced by the
dollar amount withdrawn. Partial withdrawals are unlimited. You must specify the
Investment Divisions or Fixed Options from which the withdrawal is to be made.
If we receive your request for a partial withdrawal less then 30 days before
your Annuity Commencement Date, we may, at our option, delay the Annuity
Commencement Date for up to 30 days. You should know that you may have to pay
Premium Tax upon making a surrender or partial withdrawal.
Amounts payable to you upon a surrender or partial withdrawal attributable to
your Variable Account will be paid within seven days of our receipt of your
Request. However, we may postpone payment of these amounts for any longer period
as permitted by the Securities and Exchange Commission.
If you surrender your Contract during the first twelve months after you
purchased it, we will assess a $50.00 administrative fee. Similarly, if you make
a partial withdrawal during that first twelve months, we will assess a $25.00
administrative fee. In addition, you may be required to pay taxes on amounts you
receive from a surrender or partial withdrawal, including a 10% penalty tax.
Please refer to your Contract for additional restrictions that may apply to
withdrawals involving your Guaranteed Account.
Charges and Deductions
Contract Maintenance Charge
We deduct $30 from your Contract Value if your Contract Value is less than
$5,000 on December 31 of any year. We will assess this fee only if your Contract
was issued on or after July 8, 1998, and the assessment of the fee has been
approved by the insurance regulatory authorities of your state of residence. We
assess this charge during the second quarter after December 31 on which your
Contract Value was less than $5,000.
Sales Charge
We do not impose any sales charges.
Administrative Fee
We impose a $50 charge if you surrender your Contract during the first 12 months
after it was issued to you. We do not assess this charge, however, if you cancel
your Contract during the free look period. We impose a $25 charge if you make a
partial withdrawal during the first 12 months after the Contract was issued to
you.
Premium Taxes
The applicable Premium Tax rates that states and other governmental entities
impose currently range from 0% to 3.5% and are subject to change. These Premium
Taxes will depend, among other things, on the state of residence of the Contract
Owner and the insurance tax laws and status of GWL&A in these states when the
Premium Taxes are incurred.
We presently make no deduction from Contributions for Premium Taxes; however, we
reserve the right to make such deductions from Contributions, the Contract Value
upon the annuity date, and surrender or partial withdrawal amounts or periodic
payment amounts.
Mortality and Expense Risk Charge
We deduct from each Investment Division's Accumulation Unit value an amount,
computed daily, a mortality and expense risk charge which is equal to an annual
rate as described below. This charge is intended to compensate us for the
mortality and expense risks we assume under the Contracts.
The level of the mortality and expense risk charge applicable to your Contract
during the first calendar year will be based upon your initial Contribution, in
accordance with the schedule set forth below. The amount of this charge in
subsequent calendar years will be based upon your Contract Value as of December
31 of the previous calendar year, in accordance with the schedule.
-------------------------- --------------------------
M & E Risk Charge Contract Value
-------------------------- --------------------------
-------------------------- --------------------------
0.75% From $0 - 9,999.99
-------------------------- --------------------------
-------------------------- --------------------------
0.50% From $10,000 - 24,999.99
-------------------------- --------------------------
-------------------------- --------------------------
0.25% From $25,000 - 49,999.99
-------------------------- --------------------------
-------------------------- --------------------------
0.00% From $50,000 and greater
-------------------------- --------------------------
Since we determine the level of the mortality and expense risk charge based on
your December 31 Contract Value, you should monitor your Contract Value closely
to ensure that, to the extent possible, you are taking advantage of the lowest
possible level of the charge. Each level of this charge is guaranteed and will
not be increased.
Eligible Fund Expenses
Your Variable Account Value reflects the value of Eligible Fund shares and,
therefore, the fees and expenses paid by the Eligible Fund. A complete
description of the fees, expenses and deductions from the Eligible Funds is
found in the accompanying Prospectus for the Fund.
Death Benefit
We will pay a death benefit to your beneficiary upon our receipt of proof of
your death if your death occurs before the Annuity Commencement Date. The death
benefit, if any, will be your Contract Value as of the date of your death.
If you die after the Annuity Commencement Date, the remaining portion of your
interest will continue to be distributed at least as quickly as under the method
of distribution being used before your death.
If you die before the Annuity Commencement Date, we will complete distribution
of your entire interest within five years of your date of death, except to the
extent that you make an election to receive distributions in accordance with one
of the following:
o If your interest is payable to a designated beneficiary, then your whole
interest may be distributed over the life or life expectancy of that
beneficiary or over a period not extending beyond the life expectancy of the
beneficiary beginning not later than one year after your date of death.
o If the only designated beneficiary is your surviving spouse, the date
distributions are required to begin under the above cannot be earlier than
the later of (1) December 31 of the year right after the year in which you
died or (2) December 31 of the year in which you would have reached age 70
1/2.
If the designated beneficiary is your surviving spouse, your spouse may treat
the Contract as his or her own IRA. This election will be considered to have
been made if your surviving spouse makes a regular IRA contribution to the
Contract, makes a rollover to or from such Contract, or fails to choose any of
the above provisions.
We compute life expectancy by using the expected return multiples in Tables V
and VI of section 1.72-9 of the Income Tax Regulations. For purposes of
distributions that begin after your death, life expectancies will be
recalculated annually, unless your surviving spouse elects otherwise by the time
distributions are required to begin. Such an election will be irrevocable by
your surviving spouse and will apply to all subsequent years. In the case of any
other designated beneficiary, life expectancies will be calculated using the
attained age of that beneficiary in the year in which distributions are required
to begin under this section. In that case, payments for any subsequent calendar
year will be calculated based on such life expectancy decreased by one for each
year which has passed since the year life expectancy was first calculated.
Distributions under this section are considered to have begun if they are made
on account of you reaching your required beginning date or if, before your
required beginning date, distributions irrevocably begin to you over a period
allowed and in an annuity form acceptable under section 1.401(a)(9) of the
Income Tax Regulations.
You may designate or change a beneficiary by filing a Request with GWL&A at its
Administrative Offices. Each change of beneficiary that you make revokes any
previous designation. Unless otherwise provided in the beneficiary designation,
one of the following procedures will take place on the death of a beneficiary:
o if there is more than one primary surviving beneficiary, your Contract
Value will be shared equally among them,
o if any primary beneficiary dies before you, that beneficiary's interest will
pass to any other named surviving primary beneficiary or beneficiaries, to
be shared equally,
o if there is no surviving primary beneficiary, your Contract Value will pass
to any surviving contingent beneficiary, and if more than one contingent
beneficiary, will be shared equally among them,
o if no beneficiary survives you, your Contract Value will pass to your
estate, or
o if the designation of the beneficiary was not adequately made, your
Contract Value will pass to your estate.
Annuity Options
You can choose an Annuity Commencement Date and the form of annuity payments
("Annuity Options") at any time during the Accumulation Period. The Annuity
Commencement Date you elect generally must, to avoid the imposition of an excise
tax, not be later than April 1 of the year right after the year in which you
attain age 70 1/2 without regard to your actual retirement date or termination
of employment date. It is your responsibility to file the necessary Request with
GWL&A.
You may postpone or accelerate your Annuity Commencement Date, or change any of
your Annuity Option elections, by sending a Request to our Administrative
Offices up to 30 days before the existing Annuity Commencement Date. If any
Annuity Commencement Date you have elected would be less than 30 days from the
date your Request is received, we may delay the date you have elected, but not
by more than 30 days.
The Contract provides for the Annuity Options described below, as well as other
Annuity Options that we may choose to make available in the future. Except as
otherwise noted, the Annuity Options provide for payments on a variable, fixed
or combination basis. You may elect more than one Annuity Option. If you do not
elect an Annuity Option, your Contract automatically provides for a variable
life annuity (with respect to the variable portion of your Contract) and/or a
fixed life annuity (with respect to the fixed portion of your Contract) with 120
monthly payments guaranteed.
The level of annuity payments under the following options is based on the option
selected and, depending on the option chosen, such factors as the age at which
payments begin and the frequency and duration of payments.
o Option No. 1: Fixed Life Annuity
This option provides an annuity payable monthly during the lifetime of the
Annuitant. It would be possible under this option for the Annuitant to receive
no annuity payment if he/she died before the date of the first annuity payment,
one annuity payment if the Annuitant died before the second annuity payment,
etc.
o Option No. 2: Fixed Life Annuity with Payments Guaranteed for Designated
Periods
This option provides monthly payments during a guaranteed period or for the
lifetime of the Annuitant, whichever is longer. Under this option, there is a
guarantee that if, at the death of the Annuitant, payments have been made for
less than the designated period, the beneficiary will receive payments for the
rest of the period. The designated period may be 5, 10, 15, or 20 years.
o Option No. 3: Joint and One-Half Survivor (available only as fixed dollar
payments)
This option provides an annuity payable during the joint lifetime of the
Annuitant and a designated second person, and thereafter during the remaining
lifetime of the survivor. After the death of the annuitant, and while only the
designated second person is alive, the amount payable will be one-half of the
amount paid while both were living. It would be possible under this option for
the annuitant and the beneficiary to receive no annuity payment if both persons
died prior to the date of the first annuity payment, one annuity payment if both
persons died before the second annuity payment, etc.
o Option No. 4: Income of Specified Amount (available only as fixed dollar
payments)
Under this option, the amount of the periodic benefit may be paid in equal
annual, semiannual, quarterly, or monthly installments in the dollar amount
elected, provided that the annuity payment period is not less than 36 months nor
more than 240 months.
o Option No. 5: Income for Specified Period (available only as fixed dollar
payments)
Under this option, payments are paid annually, semi-annually, quarterly or
monthly, as elected, for a selected period of not less than 36 months nor more
than 240 months.
o Option No. 6: Fixed Life Annuity with Installment Refund Period
Under this payment option, monthly payments will be paid for the life of the
Annuitant or until the sum of the payments made equals the amount applied,
whichever is greater. This option may not be available in all states or under
your Contract.
Variable Annuity Payments
Variable annuity payments will be determined on the basis of:
o the Variable Account Value prior to the Annuity Commencement Date;
o the annuity tables contained in the Contract which reflect your age;
o the type of annuity option(s) selected; and
o the investment performance of the Eligible Funds after the Annuity
Commencement Date.
You receive the value of a fixed number of Annuity Units each month.
On the Annuity Commencement Date, we determine the number of Annuity Units for
each Variable Sub-Account on which variable annuity payments are based. We
calculate the number of Annuity Units for each Variable Sub-Account by dividing
the amount of the first monthly payment by the value of an Annuity Unit on the
fifth Valuation Period before the Annuity Commencement Date in each Variable
Sub-Account selected. Although the number of Annuity Units is fixed by this
process, the value of the units will vary with the performance of the Eligible
Fund.
The dollar amount of the first monthly variable annuity payment is determined by
applying the total value of the Accumulation Units credited to the Contract
Value on the fifth Valuation Period before the Annuity Commencement Date to the
annuity tables contained in the Contract. Amounts shown in the tables are based
on the 1983 Table (a) for Individual Annuity Valuation with an assumed
investment return at the rate of 3.0% per annum. The first annuity payment is
determined by multiplying the benefit per $1,000 of value shown in the Contract
tables by the number of thousands of dollars of value accumulated under the
Variable Account Value. These annuity tables vary according to the form of
annuity selected and according to your age at the Annuity Commencement Date.
The 3.0% interest rate stated above is the measuring point for subsequent
annuity payments. If the actual Net Investment Factor (annualized) exceeds 3.0%,
the payment will increase at a rate equal to the amount of this excess. However,
if the actual rate is less than 3.0%, annuity payments will decrease. If the
assumed rate of interest were to be increased, annuity payments would start at a
higher level but would increase more slowly or decrease more rapidly.
The amount of subsequent payments is determined by multiplying the number of
Annuity Units to be paid by the appropriate Annuity Unit value on the fifth
Valuation Period before the date the payment is due. The Annuity Unit value at
the end of any Valuation Period is determined by multiplying the Annuity Unit
value for the immediately preceding Valuation Period by the product of:
o the Net Investment Factor of the Variable Sub-Account for the Valuation Period
for which the Annuity Unit is being determined, and
o a factor of .999932 to neutralize the assumed investment return of 3.0% per
year used in the annuity table.
The value of the Annuity Units is determined as of a Valuation Period five days
before the payment in order to allow the calculation of the amount of annuity
payments and the mailing of checks before their due date.
Fixed Annuity Payments
The guaranteed level of fixed annuity payments will be determined on the basis
of:
o the Guaranteed Account Value before the Annuity Commencement Date,
o the annuity tables contained in the Contract which reflect your age, and
o the type of annuity option(s) elected.
The payment amount may be greater, however, if we are using a more favorable
table on your Annuity Commencement Date.
Combination Variable and Fixed Annuity Payments
If an election is made to receive annuity payments on a combination variable and
fixed basis, the Variable Account Value will be applied to the variable annuity
option elected and the Guaranteed Account Value will be applied to the fixed
annuity option.
Proof of Age and Survival
We may require proof of age and survival from any payee if payments depend on
that payee's age or survival.
Frequency and Amount of Annuity Payments
Variable annuity payments will be paid as monthly installments. Fixed annuity
payments will be paid annually, semiannually, quarterly or monthly, as
requested. However, if any payment to be made under any annuity option will be
less than $100 we may make the payments in the most frequent interval which
produces a payment of at least $100. If the net amount available to apply under
any Annuity Option is less than $2,000, we may pay it in one lump sum. The
maximum amount that may be applied under an Annuity Option without the prior
written consent of GWL&A is $1,000,000.
Periodic Payment Options
We offer two distribution options that are not considered Annuity options: The
Estate Maximizer Option ("EMO") and the Flexible Payment Option ("FPO"). These
options are available to any Contract Owner, but with respect to the EMO, you
must be at least age 70 1/2.
Since EMO and FPO are not Annuity options, your Contract remains in the
Accumulation Period and retains all rights and flexibility described in this
Prospectus. When we make payments to you under these options, the value of
Accumulation Units canceled will be withdrawn in the same order that the
Contributions were applied to your Contract and on a pro rata basis; that is,
proportioned across the Investment Divisions to which you have allocated your
Contributions.
Distributions from a periodic payment option before age 59 1/2 may be subject to
an early withdrawal penalty under the Internal Revenue Code. Distributions after
age 59 1/2 will not be subject to penalties as long as payments are
substantially level and are paid over a period of not less than five years.
All payments made to you when you reach age 70 1/2 from any periodic payment
option must comply with the Internal Revenue Code's minimum distribution
regulations.
We reserve the right to discontinue the availability of these distribution
options and to change the terms for future elections.
Once you elect an option, you may revoke it at any time by submitting a Request
to our Administrative Offices. Any revocation you make will apply only to the
amounts that have not yet been paid. Once you revoke an EMO or FPO, you may not
elect it again.
If any periodic payment will be less than $100, we may make the payments in the
most frequent interval which produces a payment of at least $100.
FPO is different from EMO in the following ways:
o FPO payments are made for a fixed dollar amount or a fixed time period
whereas EMO payments vary in dollar amount and can continue indefinitely
during your lifetime, and
o generally, FPO payments will be higher than expected EMO payments.
You should carefully assess your future income needs when considering the
election of these distribution options.
Estate Maximizer Option ("EMO")
We will calculate and distribute an annual amount using the method contained in
the Internal Revenue Code's minimum distribution regulations. You specify the
initial distribution date. Subsequent distributions will be made on the 15th of
any month (or the next Valuation Date if the 15th is not a Valuation Date) or
another date we may designate or allow. The annual distribution is determined by
dividing your Contract Value by a life expectancy factor from tables designated
by the Internal Revenue Service. The factor will be based on either your life
expectancy or the joint life expectancy of you and your spouse and will be
redetermined for each year's distribution. The Contract Value to be used in this
calculation is your Contract Value on the December 31 before the year in which
the EMO payment is being made. This calculation will be changed, if necessary,
to conform to changes in the Internal Revenue Code or applicable regulations.
Flexible Payment Option ("FPO")
FPO payments are available on a monthly, quarterly, semiannual or annual basis.
You specify the initial distribution date. Subsequent distributions will be made
on the 15th of any month (or the next Valuation Date if the 15th is not a
Valuation Date) or another date we may designate or allow.
You may elect one of two methods of distribution for payments from Variable
Sub-Accounts:
o Specified Payment - payments of a designated dollar amount. The
dollar amount chosen must be greater than or equal to the minimum
distribution amount allowed by the Internal Revenue Code and
applicable regulations. Your Contract Value on December 31 before the
year for which the payment is being made will be used in this
calculation. Payments will stop on the earlier of:
o the date the amount you elected to be paid has been reduced to zero, or
o your Contract Value is zero.
o Specified Period - payments for a designated time period. The annual
distribution amount must be greater than or equal to the minimum
distribution amount required by the Internal Revenue Code and applicable
regulations. Each annual distribution is determined by dividing your
Contract Value by the number of years remaining in the elected period. Your
Contract Value on December 31 before the year for which the payment is
being made will be used in this calculation. For payments made more often
than annually, the annual payment result (calculated above) is divided by
the number of payments due each year. The specified period must be at least
three years, but not greater than the Annuitant's life expectancy factor.
Payments will stop on the earlier of:
o the date the amount you elected to be paid has been reduced to zero, or
o your Contract Value is zero.
For purposes of determining the amount to be distributed under each of these
distribution methods, life expectancy will be recalculated annually based on
Section 401(a)(9) of the Internal Revenue Code or applicable regulations.
Federal Tax Consequences
The ultimate effect of federal income taxes on your Contract Value, on annuity
payments and on the economic benefit to you, the beneficiary or other payee
depends on GWL&A's tax status, and upon the tax and employment status of the
individual concerned. The discussion which follows is general in nature and is
not intended as tax advice. No representation is made regarding the likelihood
of the continuation of present federal income tax law or of the current
interpretations of the Internal Revenue Service. No discussion of state or other
tax laws is provided. FOR FURTHER INFORMATION, CONSULT A QUALIFIED TAX ADVISER.
Taxation of GWL&A
GWL&A is taxed on its insurance business in the United States as a life
insurance company in accordance with Part I of Subchapter L of the Internal
Revenue Code. The Series Account is taxed as a part of GWLA; not as a
"regulated investment company" under Part I of Subchapter M of the Code.
Investment income and realized capital gains on the assets of the Series Account
are reinvested and are taken into account in determining the Contract Value.
Under existing federal income tax law, such amounts do not generally result in
any tax to GWL&A which will be chargeable to the Contract Owner or the Series
Account. GWL&A reserves the right to make a deduction from your account balance
for taxes, if any, imposed with respect to such items in the future.
Individual Retirement Annuities (IRAs)
In general, set forth below are some comments concerning the federal income
taxation of IRAs under Sections 72 and 408 of the Internal Revenue Code. It
should be understood that the following discussion is not exhaustive, and that
special rules may apply to certain situations not discussed here. You and your
beneficiaries are responsible for determining that Contributions, distributions
and other transactions with respect to the Contract comply with applicable laws.
To qualify as an IRA under Section 408 of the Internal Revenue Code, the
Annuitant must at all times be the owner of the Contract. Your entire interest
is nonforfeitable and nontransferable. Contributions may not exceed the
limitations allowable under the Internal Revenue Code. You may not borrow from
the Contract or pledge the annuity or any portion of it as security for a loan.
If you borrow money under the Contract, including a policy loan, the Contract
ceases to qualify as an IRA as of the first day of the year, and the fair market
value of the Contract is includable in your gross income for the year. If you
pledge any portion of the Contract as security for a loan, that portion is
deemed distributed on the first day of the year in which the pledge was made and
is includible in your gross income.
Generally, a Contract Owner who is a natural person is not taxed on increases
(if any) in the value of the Contract until a distribution. Internal Revenue
Code Section 408(d)(1) provides that distributions from IRAs, including total or
partial withdrawals and annuity payments, are generally taxed for federal income
tax purposes under Code Section 72. Under these rules, a portion of the
distribution may be excludable from income if any nondeductible contributions
were made. However, if the initial Contribution to this IRA was entirely from
pre-tax contributions to a qualified plan, the entire amount distributed
generally will be taxable to the Contract Owner as ordinary income in the year
distributed. There is no special averaging treatment for lump sum distributions.
Rollovers
Generally, you may receive a distribution of any amount from an IRA and within
60 days roll that amount, or any part of it, over into any other IRA. Amounts
properly rolled over will not be included in gross income until a distribution
is taken from the new IRA. Only one rollover from a particular IRA to any other
IRA may be made in any one-year period. Certain other restrictions apply.
You may receive a distribution from an IRA and within 60 days roll it over into
a qualified plan, only if all the funds in the IRA are attributable to a
previous rollover distribution from a qualified plan. Similarly, you may receive
a distribution from an IRA and within 60 days roll it over into a plan described
under Section 403(b) of the Internal Revenue Code, only if all the funds in the
IRA are attributable to a previous rollover distribution from such a plan. If
you mix a rollover contribution from a qualified plan with other contributions
or funds from other sources, the right to roll it back into a qualified plan is
forfeited.
Required Beginning Date/Minimum Distribution Requirements
Your entire interest in the Contract typically must be distributed, or begin to
be distributed, by April 1 following the year in which you reach age 70 1/2.
Required distributions must be made over a period not exceeding your life
expectancy or the joint lives of you and your designated beneficiary. If the
amount distributed does not meet the minimum distribution and incidental death
benefit requirements of Internal Revenue Code Section 401(a)(9) and the
regulations thereunder, a 50% penalty tax on the amount which was required to
be, but was not, distributed may be imposed on you.
Premature Withdrawals
Distributions made before you reach age 59 1/2 are premature distributions and
ordinarily are subject to an additional tax equal to 10% of the amount of the
distributions which is includable in gross income in the tax year. However, the
penalty tax will not apply to distributions that are:
o made to a beneficiary or your estate on or after your death,
o attributable to you being disabled within the meaning of code Section
72(m)(7), or
o made as a part of a series of substantially equal periodic payments (at
least annually) for your life or life expectancy or the joint lives or life
expectancies of you and your designated beneficiary.
If the last exemption above applies at the time of the distribution but the
series of payments is later modified or discontinued (other than because of
death or disability), before you reach age 59 1/2 or, within five years of the
date of the first payment, whichever is later, you are liable for the 10%
penalty plus interest on all payments received before age 59 1/2. This penalty
is imposed in the year the modification or discontinuance occurs.
Other exemptions may apply. For more details, consult a qualified tax adviser.
Distributions on Death of Contract Owner
If you die on or after the date annuity payments start, and before the entire
interest in the Contract has been distributed, the remainder of your interest
will be distributed on the same or on a more rapid schedule than that provided
for in the method in effect on the date of death.
If you die before the date annuity payments start, your entire interest must
generally be distributed within five years after the date of your death. If
payable to a designated beneficiary, the distributions may be paid over the life
of that designated beneficiary or over a period not extending beyond the life
expectancy of that beneficiary, so long as payments start within one year of
your death. If the sole designated beneficiary is your spouse, the Contract may
be continued in the name of the spouse as Contract Owner.
A surviving spouse, who is your beneficiary, may elect to treat the entire
annuity as his or her own IRA regardless of whether distributions had begun to
you or have begun to the surviving spouse. As the new Contract Owner, the
surviving spouse may make contributions to the IRA and make rollovers from it.
Such an election is deemed made if any amounts required to be distributed on
your death under these rules have not been distributed or any additional amounts
are contributed to the annuity.
Federal Income Tax Withholding on Distributions
Taxable distributions from an IRA are generally subject to income tax
withholding in the following manner:
o If the distribution is in the form of an annuity or similar periodic
payments, amounts are withheld as though each distribution were a payment of
wages.
o In the case of any other kind of distribution, a flat 10% will be withheld,
unless the recipient elects not to have the tax withheld.
Performance Related Information
From time to time, the Series Account may advertise certain performance related
information concerning its Investment Divisions. Performance information about
an Investment Division is based on the Investment Division's historical
performance only and is not intended to indicate future performance. Below are
tables of performance related information for the highest level of the Mortality
and Expense Risk Charge that may be assessed under the Contracts (presently
0.75%). For the "Inception Date" of a particular Investment Division see the
"Total Return" tables below.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------- ------------------------------- -------------------------------
Investment Division Yield Effective Yield
- --------------------------------- ------------------------------- -------------------------------
- --------------------------------- ------------------------------- -------------------------------
Maxim Money Market 5.12% 5.25%
- --------------------------------- ------------------------------- -------------------------------
- --------------------------------- ------------------------------- -------------------------------
- --------------------------------- ------------------------------- -------------------------------
- --------------------------------- ------------------------------- -------------------------------
- --------------------------------- ------------------------------- -------------------------------
- --------------------------------- ------------------------------- -------------------------------
- --------------------------------- ------------------------------- -------------------------------
Yield and effective Yield for the Money Market Investment Division is for the
7-day period ended December 31, 1999. Yield calculations take into account
recurring charges against the Series Account and the Money Market Portfolio. All
yield and effective yield information is annualized.
The following table illustrates standardized average annual total return for the
periods ended December 31, 1999 and cumulative total return since inception.
Total Return
- ---------------------------- ------------------ ------------------- ------------------- -------------------
Investment Divisions Date of Inception 1 Year Average Average Annual Cumulative Total
Annual Total Total Return Return Since
Return Since Inception Inception
- ---------------------------- ------------------ ------------------- ------------------- -------------------
- ---------------------------- ------------------ ------------------- ------------------- -------------------
Maxim INVESCO ADR* June 1, 1995 29.54% 7.95% 42.00%
- ---------------------------- ------------------ ------------------- ------------------- -------------------
- ---------------------------- ------------------ ------------------- ------------------- -------------------
Maxim Index 600 June 1, 1995 10.90% 12.56% 72.06%
- ---------------------------- ------------------ ------------------- ------------------- -------------------
- ---------------------------- ------------------ ------------------- ------------------- -------------------
Maxim Growth Index July 24, 1995 25.80% 29.05% 210.38%
- ---------------------------- ------------------ ------------------- ------------------- -------------------
- ---------------------------- ------------------ ------------------- ------------------- -------------------
Maxim Loomis Sayles August 3, 1995 -1.28% 14.47% 81.55%
Small-Cap Value
- ---------------------------- ------------------ ------------------- ------------------- -------------------
- ---------------------------- ------------------ ------------------- ------------------- -------------------
Maxim Stock Index June 1, 1995 18.72% 24.59% 174.07%
- ---------------------------- ------------------ ------------------- ------------------- -------------------
- ---------------------------- ------------------ ------------------- ------------------- -------------------
Maxim Ariel Small-Cap Value July 12, 1995 -6.61% 11.65% 63.72%
- ---------------------------- ------------------ ------------------- ------------------- -------------------
- ---------------------------- ------------------ ------------------- ------------------- -------------------
Maxim Founders Growth & July 24, 1995 14.04% 16.52% 97.18%
Income+
- ---------------------------- ------------------ ------------------- ------------------- -------------------
- ---------------------------- ------------------ ------------------- ------------------- -------------------
Maxim Value Index July 12, 1995 10.44% 20.46% 130.01%
- ---------------------------- ------------------ ------------------- ------------------- -------------------
- ---------------------------- ------------------ ------------------- ------------------- -------------------
Maxim U.S. Government -0.34% 4.76% 23.14%
Mortgage Securities July 12, 1995
- ---------------------------- ------------------ ------------------- ------------------- -------------------
- ---------------------------- ------------------ ------------------- ------------------- -------------------
Maxim Bond Index+ July 24, 1995 -1.16% 4.00% 19.03%
- ---------------------------- ------------------ ------------------- ------------------- -------------------
- ---------------------------- ------------------ ------------------- ------------------- -------------------
Maxim Loomis Sayles July 24, 1995 3.98% 8.33% 42.68%
Corporate Bond
- ---------------------------- ------------------ ------------------- ------------------- -------------------
- ---------------------------- ------------------ ------------------- ------------------- -------------------
Maxim Short-Term Maturity March 13, 1996 2.49% 4.33% 17.47%
Bond
- ---------------------------- ------------------ ------------------- ------------------- -------------------
- ---------------------------- ------------------ ------------------- ------------------- -------------------
Maxim Money Market July 5, 1995 3.93% 4.22% 20.41%
- ---------------------------- ------------------ ------------------- ------------------- -------------------
- ---------------------------- ------------------ ------------------- ------------------- -------------------
Maxim T. Rowe Price MidCap June 30, 1997 23.54% 22.21% 65.25%
Growth
- ---------------------------- ------------------ ------------------- ------------------- -------------------
- -----------
</TABLE>
* On February 11, 2000, the underlying Eligible Fund for this Investment
Division was changed from the Maxim Foreign Equity Portfolio to the Maxim
INVESCO ADR Portfolio. Consequently, the performance shown in the table reflects
the performance of the Investment Division when it invested in the Maxim Foreign
Equity Portfolio. + On June 30, 1997, the Eligible Fund was changed from the
Total Return Portfolio to the Maxim Founders Growth & Income Portfolio.
+ Formerly the Maxim
Investment Grade Corporate
Bond Investment Division.
The Series Account may include performance information about the Investment
Divisions in advertisements or other sales material.
When we advertise the total return of one of these Investment Divisions, it will
be shown as average annual total return for one year, five years, and ten years
or since its inception if the Investment Division has not been in existence for
at least ten years. Average annual total return is measured by comparing the
value of an investment in the Investment Division at the beginning of the
relevant period to the value of the investment at the end of the period
(assuming immediate reinvestment of any dividends or capital gains
distributions). In calculating average annual total return, it is assumed that
the entire value of the Investment Division will be distributed on the last day
of the period. In addition to average annual total return, we may also advertise
cumulative total return, year-by-year total return or total return of the
Eligible Funds prior to their availability in the Series Account.
For the Money Market Investment Division, "yield" means the income generated by
an investment in the Money Market Investment Division over a certain seven-day
period. This income is then "annualized." That is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 52-week period and is shown as a percentage of the investment. The
"effective yield" of the Money Market Investment Division is calculated
similarly but, when annualized, the income earned by an investment in the Money
Market Investment Division is assumed to be reinvested. The "effective yield"
will be slightly higher than the "yield" because of the compounding effect of
this assumed reinvestment.
The yield and effective yield calculations for the Money Market Investment
Division include all recurring charges under the Contract, and is lower than
yield and effective yield of the corresponding Money Market Portfolio, which
does not have comparable Contract charges. Total return for the Investment
Divisions include all charges under your Contract, and likewise, is lower than
total return of the corresponding Eligible Funds which have no comparable
Contract charges.
For more complete information on the method used to calculate yield, effective
yields, and total return of the respective Investment Divisions, see the
"Statement of Additional Information."
Voting Rights To the extent required by applicable law, GWL&A will vote the
shares of the Eligible Funds held by the Investment Divisions of the Series
Account at regular and special meetings of shareholders of the Fund in
accordance with instructions received from Contract Owners. If, however, the
Investment Company Act of 1940 or any regulation should be amended, or if the
present interpretation of that Act should change, or if we determine that we are
allowed to vote all Eligible Fund shares in our own right, we may elect to do
so.
Before the Annuity Commencement Date, you have the voting interest relating to
the Eligible Fund shares attributable to your Variable Sub-Account. After
annuity payments begin under a variable annuity option, the payee will have the
voting interest.
The number of votes which you have the right to cast will be determined by
applying your percentage interest in an Investment Division to the total number
of votes attributable to that Investment Division. In determining the number of
votes, fractional shares will be recognized. During the annuity payment period,
the number of votes attributable to your Contract will decrease as the assets
held to fund the annuity payments decrease.
Shares for which we do not receive timely instructions and shares held by us as
to which Contract Owners have no beneficial interest will be voted in the same
proportion as the voting instructions which have been received. Voting
instructions to abstain on any item to be voted upon will be applied on a pro
rata basis to reduce the votes eligible to be cast.
Each person having a voting interest will receive proxy materials, reports and
other materials relating to the applicable underlying portfolio of the Fund.
Distribution of the Contracts One Orchard Equities, Inc. ("One Orchard"), 8515
East Orchard Road, Englewood, Colorado 80111, is the principal underwriter and
the distributor of the Contracts. One Orchard is registered with the Securities
and Exchange Commission under the Securities and Exchange Act of 1934 as a
broker-dealer and is a member of the National Association of Securities Dealers,
Inc.
Applications for the Contracts will be solicited by duly licensed insurance
agents of GWL&A who are registered with One Orchard. One Orchard is an affiliate
of Great-West.
No commissions will be paid to any person for the sale of Contracts.
Amendment of Contracts We reserve the right to amend the Contract without the
consent of any person in order to meet the requirements of the Investment
Company Act of 1940 or other applicable federal or state laws or regulations, or
to modify the annuity rates for future Contributions. We will notify you of any
such changes.
Ownership The Contract Owner has all rights under the Contract. By law, the
assets of the Series Account are held for the exclusive benefit of the Contract
Owners and their designated beneficiaries. These assets cannot be charged with
liabilities that arise out of any other business we may conduct.
State Regulation As a life insurance company organized and operated under
Colorado law, we are subject to
provisions governing such
companies and to
regulation by the Colorado
Commissioner of Insurance.
Our books and accounts are subject to review and examination by the Colorado
Division of Insurance at all times and a full examination of our operations is
conducted by the National Association of Insurance Commissioners at least once
every three years.
Reports We will furnish to you semi-annual and annual reports concerning the
operations of the Investment Divisions. In addition, you will be furnished not
less frequently than annually a statement of your Contract Value.
Rights Reserved by
Great-West
We reserve the right to
make certain changes we
feel would best serve the interests of Contract Owners and Annuitants or would
be appropriate in carrying out the purposes of the Contracts. Any changes will
be made only to the extent and in the manner permitted by applicable laws. Also,
when required by law, we will obtain your approval of the changes and approval
from any appropriate regulatory authority. Approval may not be required in all
cases, however. Examples of the changes we may make include:
o To operate the Series Account in any form permitted under the Investment
Company Act of 1940 or in any other form permitted by law.
o To transfer any assets in any Investment Division to another Investment
Division, or to one or more separate accounts; or to add, combine or remove
Investment Divisions of the Series Account.
o To substitute, for the Eligible Fund shares in any Investment Division, the
shares of another Eligible Fund or shares of another investment company or
any other investment permitted by law.
o To make any changes required by the Internal Revenue Code or by any other
applicable law in order to continue treatment of the Contract as an
annuity.
o To change the time or time of day at which a Valuation Date is deemed to
have ended.
o To make any other necessary technical changes in the Contract in order to
conform with any action the above provisions permit us to take, including
changing the way we assess charges, without increasing them for any
outstanding Contract beyond the aggregate amount guaranteed.
Adding and Discontinuing Investment Options We may, upon 30 days written notice
to you, direct that you may not make any future Contributions or Transfers to a
particular Investment Division.
When we inform you that we are discontinuing an Investment Division to which you
are allocating money, we will ask that you promptly submit alternative
allocation instructions. If we do not receive your changed allocation
instructions, we may return all affected Contributions or allocate those
Contributions as indicated in the written notice provided to you. Contributions
and Transfers you make to a discontinued Investment Division before the
effective date of the notice may be kept in those Investment Divisions, unless
we receive an order from the Securities and Exchange Commission permitting us to
substitute shares of a mutual fund for shares of the corresponding Eligible
Fund.
If we decide to make new investment options available under the Contracts, in
our sole discretion, we may or may not make those options available to you.
Substitution of Investments Where we determine to discontinue an Investment
Division, in our sole discretion, we may substitute shares of another mutual
fund for the shares of the discontinued Eligible Fund. No substitution may take
place without prior approval of the Securities and Exchange Commission, and
prior notice to you.
Legal Matters Certain legal matters relating to the federal securities laws have
been passed upon for GWL&A by Jorden Burt Boros Cicchetti Berenson & Johnson
LLP.
Registration Statement We have filed a registration statement ("Registration
Statement") with the Securities and Exchange Commission under the Securities Act
of 1933 relating to the Contracts offered by this Prospectus. This Prospectus
has been filed as part of the Registration Statement and does not contain all of
the information set forth in the Registration Statement and exhibits thereto.
Reference is made to the Registration Statement and exhibits for further
information relating to us and the Contracts. Statements contained in this
Prospectus, as to the content of the Contracts and other legal instruments, are
summaries. For a complete statement of the terms thereof, reference is made to
the instruments as filed as exhibits to the Registration Statement. The
Registration Statement and its exhibits may be inspected and copied at the
offices of the Securities and Exchange Commission located at 450 Fifth Street,
N.W., Washington, D.C.
Statement of Additional Information The Statement of Additional Information
contains more specific information and financial statements relating to the
Series Account and GWL&A. The Table of Contents of the Statement of Additional
Information is set forth below:
1. Custodian and Independent Auditors
2. Underwriter
3. Calculation of Performance Data
4. Financial Statements
Inquiries and requests for a Statement of Additional Information should be
directed to GWL&A in writing at 8525 E. Orchard Road, Englewood, Colorado 80111,
or by telephoning GWL&A at (800) 338-4015.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------- ------------------ ------------------- ------------------- -------------------
1999 By Category 1998 By Category
Appendix A
APPENDIX A
Condensed Financial
Information
Selected Data for
Accumulation Units
Outstanding Throughout
Each Period
For the Years Ended
December 31
MAXIM MONEY MARKET
INVESTMENT DIVISION
- ---------------------------------- ---------------------- ------------------------ ----------------------- -----------------------
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
Value at beginning of $11.63 $11.46 $11.61 $11.95 $11.14 $10.93 $11.06 $11.36
period
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
Value at end of period $12.10 $11.95 $12.14 $12.52 $11.63 $11.46 $11.61 $11.95
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
Increase (decrease) in .47 .49 .53 .57 .49 .53 .55 .59
value of Accumulation Units
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
Number of Accumulation 19,672.11 54,003.74 108,972.59 375,328.42 20,837.46 41,474.94 75,566.21 226,071.77
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1997 By Category 1996 By Category
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
Value at beginning of $10.66 $10.47 $10.54 $10.79 $10.23 $10.02 $10.05 $10.27
period
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
Value at end of period $11.14 $10.93 $11.06 $11.36 $10.66 $10.47 $10.54 $10.79
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
Increase (decrease) in .48 .46 .52 .57 .43 .45 .49 .52
value of Accumulation Units
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
Number of Accumulation 12,004.78 26,660.24 32,201.63 80,773.05 9,449.98 12,173.70 15,907.37 59,518.32
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1995 By Category*(1)
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
A O U Z
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
Value at beginning of $10.00 $10.00 $10.00 $10.00
period
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
Value at end of period $10.23 $10.02 $10.05 $10.27
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
Increase (decrease) in .23 .02 .05 .27
value of Accumulation Units
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
Number of Accumulation 2,395.98 926.69 1,445.29 44,935.09
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ---------- ------------ ------------ ----------- ----------- -------------
MAXIM BOND INDEX INVESTMENT DIVISION++
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1999 By Category 1998 By Category
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of $12.09 $12.26 $12.24 $12.48 $11.37 $11.51 $11.46 $11.66
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $11.96 $12.16 $12.18 $12.45 $12.09 $12.26 $12.24 $12.48
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in (.13) (.10) (.06) (.03) .72 .75 .78 .82
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation 7,068.27 18,853.07 19,881.96 68,065.18 8,742.38 10,556.44 19,279.56 60,223.73
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1997 By Category 1996 By Category
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of $10.72 $10.82 $10.75 $10.91 $10.48 $10.55 $10.45 $10.58
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $11.37 $11.51 $11.46 $11.66 $10.72 $10.82 $10.75 $10.91
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in .65 .69 .71 .75 .24 .27 .30 .32
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation 6,517.10 8,451.89 8,892.12 18,942.32 4,019.39 5,887.41 2,497.98 14,123.28
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1995 By Category*(2)
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of $10.00 $10.00 $10.00 $10.00
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $10.48 $10.55 $10.45 $10.58
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in .48 .55 .45 .58
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation 756.56 1,298.14 2,523.64 7,411.72
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
MAXIM STOCK INDEX INVESTMENT DIVISION
- ---------------------------- ---------------------------------------------------- --------------------------------------------------
1999 By Category 1998 By Category
- ---------------------------- ---------------------------------------------------- --------------------------------------------------
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
A O U Z A O U Z
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
Value at beginning of $23.18 $23.27 $23.48 $23.69 $18.42 $18.45 $18.56 $18.68
period
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
Value at end of period $27.54 $27.72 $28.04 $28.36 $23.18 $23.27 $23.48 $23.69
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
Increase (decrease) in 4.36 4.45 4.56 4.67 4.76 4.82 4.92 5.01
value of Accumulation Units
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
Number of Accumulation 56,641.17 134,110.58 148,486.44 462,932.29 57,660.73 123,326.43 138,697.83 360,224.24
Units outstanding at end
of period
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
- ---------------------------- ---------------------------------------------------- --------------------------------------------------
1997 By Category 1996 By Category
- ---------------------------- ---------------------------------------------------- --------------------------------------------------
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
A O U Z A O U Z
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
Value at beginning of $14.01 $14.00 $14.06 $14.11 $11.59 $11.55 $11.57 $11.58
period
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
Value at end of period $18.42 $18.45 $18.56 $18.68 $14.01 $14.00 $14.06 $14.11
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
Increase (decrease) in 4.41 4.45 4.50 4.57 2.42 2.45 2.49 2.53
value of Accumulation Units
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
Number of Accumulation 53,406.89 93,690.46 101,305.87 216,413.98 30,565.13 48,278.77 50.780.90 119,929.73
Units outstanding at end
of period
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
- ---------------------------- ---------------------------------------------------- --------------------------------------------------
1995 By Category*(3)
- ---------------------------- ---------------------------------------------------- --------------------------------------------------
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
A O U Z
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
Value at beginning of $10.00 $10.00 $10.00 $10.00
period
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
Value at end of period $11.59 $11.55 $11.57 $11.58
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
Increase (decrease) in 1.59 1.55 1.57 1.58
value of Accumulation Units
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
Number of Accumulation 4,042.63 11,673.47 18,708.73 55,122.00
Units outstanding at end
of period
- ---------------------------- ------------ ------------ ------------ ------------- ---------- ------------- ------------ ------------
MAXIM U.S. GOVERNMENT MORTGAGE SECURITIES INVESTMENT DIVISION
- ---------------------------- ------------------------------------------------ -------------------------------------------------
1999 By Category 1998 By Category
- ---------------------------- ------------------------------------------------ -------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
Value at beginning of $12.40 $12.58 $12.69 $12.81 $11.67 $11.80 $11.88 $11.95
period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
Value at end of period $12.37 $12.58 $12.73 $12.87 $12.40 $12.58 $12.69 $12.81
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
Increase (decrease) in (.03) .00 .04 .06 .73 .78 .81 .86
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
Number of Accumulation 15,855.63 27,784.66 28,714.60 114,042.30 14,629.83 20,647.77 33,304.47 108,890.83
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
- ---------------------------- ------------------------------------------------ -------------------------------------------------
1997 By Category 1996 By Category
- ---------------------------- ------------------------------------------------ -------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
Value at beginning of $10.82 $10.92 $10.96 $11.00 $10.45 $10.52 $10.54 $10.55
period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
Value at end of period $11.67 $11.80 $11.88 $11.95 $10.82 $10.92 $10.96 $11.00
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
Increase (decrease) in .85 .88 .92 .95 .37 .40 .42 .45
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
Number of Accumulation 8,773.99 15,501.18 17,934.40 37,775.13 5,272.40 8,847.40 7,526.42 18,157.75
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
- ---------------------------- ------------------------------------------------ -------------------------------------------------
1995 By Category*(4)
- ---------------------------- ------------------------------------------------ -------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
A O U Z
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
Value at beginning of $10.00 $10.00 $10.00 $10.00
period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
Value at end of period $10.45 $10.52 $10.54 $10.55
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
Increase (decrease) in .45 .52 .54 .55
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
Number of Accumulation 731.02 5,864.01 1,624.61 7,344.94
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ ------------
MAXIM INDEX 600 INVESTMENT DIVISION
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1999 By Category 1998 By Category
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of $15.58 $15.71 $15.85 $15.99 $15.95 $16.04 $16.15 $16.25
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $17.29 $17.48 $17.68 $17.89 $15.58 $15.71 $15.85 $15.99
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in 1.71 1.77 1.83 1.90 (.37) (.33) (.30) (.26)
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation 22,442.06 24,822.00 26,469.79 65,423.32 23,227.78 28,845.27 31,905.16 61,018.77
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1997 By Category 1996 By Category
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of $13.28 $13.33 $13.38 $13.43 $11.60 $11.62 $11.63 $11.65
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $15.95 $16.04 $16.15 $16.25 $13.28 $13.33 $13.38 $13.43
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in 2.67 2.71 2.77 2.82 1.68 1.71 1.75 1.78
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation 21,596.15 22,264.86 29,959.15 49,337.14 13,245.31 17,113.51 20,809.07 28,991.22
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1995 By Category*(5)
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of 10.00 10.00 10.00 10.00
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $11.60 $11.62 $11.63 $11.65
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in 1.60 1.62 1.63 1.65
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation 2,240.54 5,959.11 3,318.14 14,397.06
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
MAXIM GROWTH INDEX INVESTMENT DIVISION
- ---------------------------- -------------------------------------------------- -------------------------------------------------
1999 By Category 1998 By Category
- ---------------------------- -------------------------------------------------- -------------------------------------------------
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
A O U Z A O U Z
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
Value at beginning of $24.77 $24.99 $25.21 $25.44 $18.18 $18.29 $18.41 $18.53
period
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
Value at end of period $31.19 $31.55 $31.91 $32.27 $24.77 $24.99 $25.21 $25.44
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
Increase (decrease) in 6.42 6.56 6.70 6.83 6.59 6.70 6.80 6.91
value of Accumulation Units
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
Number of Accumulation 75,452.51 131,008.46 147,867.87 400,784.24 64,431.56 109,295.25 114,929.12 246,772.24
Units outstanding at end
of period
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
- ---------------------------- -------------------------------------------------- -------------------------------------------------
1997 By Category 1996 By Category
- ---------------------------- -------------------------------------------------- -------------------------------------------------
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
A O U Z A O U Z
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
Value at beginning of $14.17 $14.22 $14.28 $14.34 $11.69 $11.71 $11.72 $11.74
period
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
Value at end of period $18.18 $18.29 $18.41 $18.53 $14.17 $14.22 $14.28 $14.34
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
Increase (decrease) in 4.01 4.07 8.20 4.19 2.48 2.51 2.56 2.60
value of Accumulation Units
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
Number of Accumulation 43,323.40 65,415.29 68,910.66 113,708.46 23,490.03 35,100.60 38,890.98 64,886.39
Units outstanding at end
of period
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
- ---------------------------- -------------------------------------------------- -------------------------------------------------
1995 By Category*(6)
- ---------------------------- -------------------------------------------------- -------------------------------------------------
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
A O U Z
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
Value at beginning of $10.00 $10.00 $10.00 $10.00
period
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
Value at end of period $11.69 $11.71 $11.72 $11.74
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
Increase (decrease) in 1.69 1.71 1.72 1.74
value of Accumulation Units
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
Number of Accumulation 3,339.10 10,056.69 9,367.33 19,673.41
Units outstanding at end
of period
- ---------------------------- ----------- ------------ ------------ ------------ ----------- ------------ ----------- ------------
MAXIM VALUE INDEX INVESTMENT DIVISION
- ---------------------------- ------------------------------------------------ -------------------------------------------------
1999 By Category 1998 By Category
- ---------------------------- ------------------------------------------------ -------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Value at beginning of $20.90 $21.09 $21.28 $21.47 $18.40 $18.52 $18.64 $18.76
period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Value at end of period $23.11 $23.38 $23.65 $23.92 $20.90 $21.09 $21.28 $21.47
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Increase (decrease) in 2.21 2.29 2.37 2.45 2.50 2.57 2.64 2.71
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Number of Accumulation 43,966.79 84,831.08 100,429.74 272,374.15 41,606.69 81,338.97 94,959.15 183,410.06
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ------------------------------------------------ -------------------------------------------------
1997 By Category 1996 By Category
- ---------------------------- ------------------------------------------------ -------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Value at beginning of $13.82 $13.88 $13.93 $13.99 $11.55 $11.56 $11.58 $11.60
period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Value at end of period $18.40 $18.52 $18.64 $18.76 $13.82 $13.88 $13.93 $13.99
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Increase (decrease) in 4.58 4.64 4.71 4.77 2.27 2.32 2.35 2.39
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Number of Accumulation 34,549.99 61,417.45 65,117.93 113,775.97 16,778.01 32,274.09 32,323.22 46,735.19
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ------------------------------------------------ -------------------------------------------------
1995 By Category*(7)
- ---------------------------- ------------------------------------------------ -------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
A O U Z
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Value at beginning of $10.00 $10.00 $10.00 $10.00
period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Value at end of period $11.55 $11.56 $11.58 $11.60
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Increase (decrease) in 1.55 1.56 1.58 1.60
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Number of Accumulation 1,666.79 7,395.18 12,134.89 18,036.45
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
MAXIM ARIEL SMALL-CAP VALUE INVESTMENT DIVISION
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1999 By Category 1998 By Category
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of $17.60 $17.76 $17.92 $18.08 $16.37 $16.48 $16.59 $16.69
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $16.45 $16.64 $16.83 $17.03 $17.60 $17.76 $17.92 $18.08
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in (1.15) (1.12) (1.09) (1.05) 1.23 1.28 1.33 1.39
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation 14,905.91 24,057.44 35,698.19 66,232.53 15,277.80 25,248.80 36.738.60 56.570.22
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1997 By Category 1996 By Category
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of $12.90 $12.95 $13.00 $13.06 $11.02 $11.04 $11.05 $11.07
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $16.37 $16.48 $16.59 $16.69 $12.90 $12.95 $13.00 $13.06
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in 3.47 3.53 3.59 3.63 1.88 1.91 1.95 1.99
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation 12,300.05 17,280.05 29,579.62 30,895.89 5,037.63 7,695.51 12,528.51 8,094.84
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1995 By Category*(8)
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of $10.00 $10.00 $10.00 $10.00
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $11.02 $11.04 $11.05 $11.07
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in 1.02 1.04 1.05 1.07
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation 773.21 1,371.51 5,416.35 2,801.92
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
MAXIM INVESCO ADR INVESTMENT DIVISION+
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1999 By Category 1998 By Category
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of $11.01 $11.05 $11.13 $11.23 $10.30 $10.31 $10.36 $10.43
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $14.27 $14.36 $14.50 $14.67 $11.01 $11.05 $11.13 $11.23
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in 3.26 3.31 3.37 3.44 .71 .74 .77 .80
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation 16,549.53 27,587.74 28,715.74 69,616.01 14,150.08 17,599.47 22,714.22 29,845.49
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1997 By Category 1996 By Category
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of $11.00 $10.99 $11.01 $11.06 $10.30 $10.27 $10.26 $10.28
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $10.30 $10.31 $10.36 $10.43 $11.00 $10.99 $11.01 $11.06
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in (.70) (.68) (.65) (.63) .70 .72 .75 .78
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation 13,468.10 18,078.02 19,626.37 25,784.14 9,442.18 12,679.40 10,789.35 9,174.83
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1995 By Category*(9)
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of $10.00 $10.00 $10.00 $10.00
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $10.30 $10.27 $10.26 $10.28
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in .30 .27 .26 .28
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation 2,788.66 1,670.77 2,190.94 1,192.47
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
MAXIM LOOMIS SAYLES SMALL-CAP VALUE INVESTMENT DIVISION
- ---------------------------- ------------------------------------------------ -------------------------------------------------
1999 By Category 1998 By Category
- ---------------------------- ------------------------------------------------ -------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Value at beginning of $18.46 $18.63 $18.79 $18.96 $19.03 $19.16 $19.27 $19.40
period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Value at end of period $18.24 $18.45 $18.66 $18.88 $18.46 $18.63 $18.79 $18.96
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Increase (decrease) in (.22) (.18) (.13) (.08) (.57) (.53) (.48) (.44)
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Number of Accumulation 38,362.52 54,436.95 58,322.93 129,541.79 42,420.28 65,931.45 77,252.32 124,677.56
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ------------------------------------------------ -------------------------------------------------
1997 By Category 1996 By Category
- ---------------------------- ------------------------------------------------ -------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Value at beginning of $15.40 $15.46 $15.52 $15.59 $11.93 $11.95 $11.96 $11.98
period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Value at end of period $19.03 $19.16 $19.27 $19.40 $15.40 $15.46 $15.52 $15.59
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Increase (decrease) in 3.63 3.70 3.75 3.81 3.47 3.51 3.56 3.61
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Number of Accumulation 37,737.28 64,185.86 59,544.98 69,924.71 19,250.73 30,001.51 23,175.18 24,716.11
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ------------------------------------------------ -------------------------------------------------
1995 By Category*(10)
- ---------------------------- ------------------------------------------------ -------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
A O U Z
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Value at beginning of $10.00 $10.00 $10.00 $10.00
period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Value at end of period $11.93 $11.95 $11.96 $11.98
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Increase (decrease) in 1.93 1.95 1.96 1.98
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Number of Accumulation 1,064.47 5,718.10 1,398.81 4,726.93
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
MAXIM LOOMIS SAYLES CORPORATE BOND INVESTMENT DIVISION
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1999 By Category 1998 By Category
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of $13.77 $13.98 $13.93 $14.23 $13,42 $13.58 $13.50 $13.76
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $14.34 $14.59 $14.58 $14.92 $13.77 $13.98 $13.93 $14.23
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in .57 .61 .65 .69 .35 .40 .43 .47
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation 14,381.58 27,293.97 42,009.67 60,790.49 12,931.10 33,672.28 38,152.86 60,299.36
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1997 By Category 1996 By Category
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of $11.99 $12.11 $12.01 $12.21 $10.95 $11.03 $10.91 $11.06
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $13.42 $13.58 $13.50 $13.76 $11.99 $12.11 $12.01 $12.21
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in 1.43 1.47 1.49 1.55 1.04 1.08 1.10 1.15
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation 11,596.69 24,206.54 22,675.77 33,423.75 5,084.50 10,767.39 7,111.83 17,630.19
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1995 By Category*(11)
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U* Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of $10.00 $10.00 $10.00 $10.00
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $10.95 $11.03 $10.91 $11.06
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in .95 1.03 .91 1.06
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation 821.90 2,425.21 1,650.00 22,880.14
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
MAXIM SHORT-TERM MATURITY BOND INVESTMENT DIVISION
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1999 By Category 1998 By Category
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of $11.50 $11.64 $11.74 $11.66 $10.89 $11.00 $11.06 $10.96
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $11.80 $11.97 $12.10 $12.05 $11.50 $11.64 $11.74 $11.66
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in .30 .33 .36 .39 .61 .64 .68 .70
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation 2,377.67 8,044.57 7,558.87 12,713.36 2,375.51 5,795.00 3,416.04 4,002.64
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1997 By Category 1996 By Category
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of $10.34 $10.41 $10.45 $10.33 $10.06 $10.07 $10.08 $10.09
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $10.89 $11.00 $11.06 $10.96 $10.34 $10.41 $10.45 $10.33
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in .55 .59 .61 .63 .28 .34 .37 .24
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation 1,209.69 2,989.60 2,031.38 12,503.20 244.56 1,038.88 1,603.91 219.54
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1995 By Category*(12)
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of $10.00 $10.00 $10.00 $10.00
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $10.06 $10.07 $10.08 $10.09
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in .06 .07 .08 .09
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation - - - -
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
MAXIM FOUNDERS GROWTH & INCOME INVESTMENT DIVISION*
- ---------------------------- ------------------------------------------------ -------------------------------------------------
1999 By Category 1998 By Category
- ---------------------------- ------------------------------------------------ -------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Value at beginning of $17.35 $17.51 $17.67 $17.83 $14.84 $14.93 $15.03 $15.13
period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Value at end of period $19.81 $20.04 $20.27 $20.50 $17.35 $17.51 $17.67 $17.83
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Increase (decrease) in 2.46 2.53 2.60 2.67 2.51 2.58 2.64 2.70
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Number of Accumulation 33,099.91 44,398.09 67,291.64 159,256.08 26,408.73 35,164.52 60,073.36 107,167.86
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ------------------------------------------------ -------------------------------------------------
1997 By Category*(13) 1996 By Category
- ---------------------------- ------------------------------------------------ -------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Value at beginning of $12.08 $12.12 $12.17 $12.22 $10.89 $10.90 $10.92 $10.93
period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Value at end of period $14.84 $14.93 $15.03 $15.13 $12.08 $12.12 $12.17 $12.22
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Increase (decrease) in 2.76 2.81 2.86 2.91 1.19 1.22 1.25 1.29
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Number of Accumulation 18,873.51 25,096.49 33,623.10 50,196.47 10,571.44 15,356.64 12,390.53 26,371.06
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ------------------------------------------------ -------------------------------------------------
1995 By Category
- ---------------------------- ------------------------------------------------ -------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
A O U Z
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Value at beginning of $10.00 $10.00 $10.00 $10.00
period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Value at end of period $10.89 $10.90 $10.92 $10.93
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Increase (decrease) in .89 .90 .92 .93
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
Number of Accumulation 1,177.80 5,184.26 2,940.80 4,666.32
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ------------ ----------- ---------- ------------ -------------
MAXIM T. ROWE PRICE MIDCAP GROWTH INVESTMENT DIVISION
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1999 By Category 1998 By Category
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of $13.40 $13.45 $13.50 $13.55 $11.04 $11.06 $11.07 $11.09
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $16.57 $16.67 $16.78 $16.88 $13.40 $13.45 $13.50 $13.55
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in 3.17 3.22 3.28 3.33 2.36 2.39 2.43 2.46
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation 32,392.52 45,863.53 54,321.27 162,732.57 15,971.70 28,827.46 23,055.16 79,644.98
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------------------------------------------- --------------------------------------------------
1997 By Category*(14)
- ---------------------------- ----------------------------------------------- --------------------------------------------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
A O U Z
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at beginning of 10.00 $10.00 $10.00 $10.00
period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Value at end of period $11.04 $11.06 $11.07 $11.09
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Increase (decrease) in 1.04 1.06 1.07 1.09
value of Accumulation Units
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Number of Accumulation - - - 1,485.90
Units outstanding at end
of period
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ -------------
Current Accumulation Unit Values can be obtained by calling GWL&A toll free at
1-800-338-4015.
- ----------------------------------------------------------------------------
Mortality & Expense Charge Contract Value
-------------------------- --------------
A = .75% $0 - $9,999.99
O = .50% $10,000 - $24,999.99
U = .25% $25,000 - $49,999.99
Z = .00% $50,000 and greater
(1) The inception date for the Maxim Money Market Investment Division was July 5, 1995.
(2) The inception date for the Maxim Bond Index Investment Division was July 24, 1995.
(3) The inception date for the Maxim Stock Index Investment Division was June 1, 1995.
(4) The inception date for the Maxim U.S. Government Mortgage Securities Investment
Division was July 12, 1995.
(5) The inception date for the Maxim Index 600 Investment Division was June 1, 1995.
(6) The inception date for the Maxim Growth Index Investment Division was July 24, 1995.
(7) The inception date for the Maxim Value Index Investment Division was July 12, 1995.
(8) The inception date for the Maxim Ariel Small-Cap Value Investment Division was July
12, 1995.
(9) The inception date for the Maxim INVESCO ADR Investment Division was June 1, 1995.
(10) The inception date for the Maxim Loomis Sayles Small-Cap Value Investment Division
was August 3, 1995.
(11) The inception date for the Maxim Loomis Sayles Corporate Bond Investment Division was
July 24, 1995.
(12) The inception date for the Maxim Short-Term Maturity Bond Investment
Division was March 13, 1996.
(13) The inception date for the Maxim Founders Growth & Income Investment
Division was July 24, 1995.
(14) The inception date for the Maxim T. Rowe Price MidCap Growth Investment Division was
June 30, 1997.
</TABLE>
+ On February 11, 2000, the underlying Eligible Fund for this Investment
Division was changed from the Maxim Foreign Equity Portfolio to the Maxim
INVESCO ADR Portfolio. Consequently, the Condensed Financial Information
reflects that of the Investment Division when it invested in the Maxim Foreign
Equity Portfolio.
++ Formerly the Maxim Investment Grade Corporate Bond
Investment Division.
* On June 30, 1997, the Eligible Fund was changed from the Total Return
Portfolio to the Maxim Founders Growth & Income Portfolio.
Appendix B
Appendix B
Net Investment Factor
The following formula is what we use to calculate the value of an Accumulation
Unit. The Net Investment Factor is determined by dividing (a) by (b), and
subtracting (c) from the result where:
(a) is the net result of:
(i) the net asset value per share of the Eligible Fund shares determined
as of the end of the current Valuation Period, plus
(ii)the per share amount of any dividend (or, if applicable, capital gain
distributions) made by the Eligible Fund on shares if the "ex-dividend"
date occurs during the current Valuation Period, minus or plus
(iii) a per unit charge or credit for any taxes incurred by or provided for
in the Variable Sub-Account, which is determined by GWL&A to have
resulted from the investment operations of the Variable Sub-Account; and
(b) is the net asset value per share of the Eligible Fund shares determined as
of the end of the immediately preceding Valuation Period; and
(c) is an amount representing the Mortality and Expense Risk Charge deducted
from each Variable Sub-Account on a daily basis.
The Net Investment Factor may be greater than, less than, or equal to one.
Therefore, the Accumulation Unit Value may increase, decrease or remain
unchanged.
The net asset value per share referred to in paragraphs (a) (i) and (b) above,
reflect the investment performance of the Eligible Fund as well as the payment
of portfolio expenses.
Part B
RETIREMENT PLAN SERIES ACCOUNT
Individual Flexible Premium Variable Annuity Contracts
issued by
Great-West Life & Annuity Insurance Company
8525 E. Orchard Road
Englewood, Colorado 80111
Telephone: (800) 495-4952
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information is not a Prospectus and should
be read in conjunction with the Prospectus, dated May 1, 2000, which is
available without charge by contacting Great-West Life & Annuity Insurance
Company at the above address or at the above telephone number.
May 1, 2000
TABLE OF CONTENTS
Page
CUSTODIAN AND INDEPENDENT AUDITORS................................B-III
UNDERWRITER.......................................................B-III
CALCULATION OF PERFORMANCE DATA...................................B-IV
FINANCIAL STATEMENTS..............................................B-V
Part B
V
CUSTODIAN AND INDEPENDENT AUDITORS
........A. Custodian
........ The assets of Retirement Plan Series Account (the "Series Account") are
held by Great-West Life & Annuity Insurance Company ("GWL&A"). The assets of the
Series Account are kept physically segregated and held separate and apart from
the general account of GWL&A. GWL&A maintains records of all purchases and
redemptions of shares of Maxim Series Fund, Inc. Additional protection for the
assets of the Series Account is afforded by blanket fidelity bonds issued to The
Great-West Life Assurance Company ("Great-West") in the amount of $50 million
(Canadian), which cover all officers and employees of GWL&A.
........B. Independent Auditors
........ The accounting firm of Deloitte & Touche LLP performs certain
accounting and auditing services for GWL&A and the Series Account. The principal
business address of Deloitte & Touche LLP is 555 Seventeenth Street, Suite 3600,
Denver, Colorado 80202-3942.
........ The consolidated financial statements of GWL&A as of December 31, 1999
and 1998 and each of the three years in the period ended December 31, 1999, as
well as the financial statements of the Series Account for the years ended
December 31, 1999 and 1998, which are included in this Statement of Additional
Information have been audited by Deloitte & Touche LLP, independent auditors, as
set forth in their reports appearing herein and are included in reliance upon
such reports given upon the authority of such firm as experts in accounting and
auditing.
UNDERWRITER
........The offering of the Contracts is made on a continuous basis by One
Orchard Equities, Inc., a wholly owned subsidiary of GWL&A. Previously the
Contracts were offered through Great-West, an affiliate of GWL&A. No payments
were made to Great-West for the years 1994 through 1997 and no payment was made
to One Orchard Equities, Inc. in 1998 or 1999.
CALCULATION OF PERFORMANCE DATA
A.......
Yield and Effective Yield Quotations for the Money Market Investment Division
- ----------------------------------------------------------------------------
........The yield quotation for the Money Market Investment Division set forth
in the Prospectus is for the seven-day period ended December 31, 1999 and 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 in the Money Market Investment Division at the beginning of
the period, subtracting a hypothetical charge reflecting deductions from
Participant accounts, and dividing the difference by the value of the account at
the beginning of the base period to obtain the base period return, and then
multiplying the base period return by (365/7) with the resulting yield figure
carried to the nearest hundredth of one percent.
........The effective yield quotation for the Money Market Investment Division
set forth in the Prospectus is for the seven-day period ended December 31, 1999
and is carried to the nearest hundredth of one percent, 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 in the Money
Market Investment Division at the beginning of the period, subtracting a
hypothetical charge reflecting deductions from Participant accounts, and
dividing the difference by the value of the account at the beginning of the base
period to obtain the base period return, and then compounding the base period
return by adding 1, raising the sum to a power equal to 365 divided by 7, and
subtracting 1 from the result, according to the following formula:
........EFFECTIVE YIELD = [(BASE PERIOD RETURN +1) 365/7]-1.
........For purposes of the yield and effective yield computations, the
hypothetical charge reflects all deductions that are charged to all Participant
accounts in proportion to the length of the base period, and for any fees that
vary with the size of the account, the account size is assumed to be the Money
Market Investment Division's mean account size. The specific percentage
applicable to a particular withdrawal would depend on a number of factors
including the length of time the Contract Owner has participated under the
Contracts. No deductions or sales loads are assessed upon annuitization under
the Contracts. Realized gains and losses from the sale of securities and
unrealized appreciation and depreciation of the Money Market Investment Division
and the Fund are excluded from the calculation of yield.
B.......Total Return Quotations for All Investment Divisions
........The total return quotations for all Investment Divisions, other than the
Money Market, set forth in the Prospectus are average annual total return
quotations for the one-year period ended December 31, 1999. The quotations are
computed by finding the average annual compounded rates of return over the
relevant periods that would equate the initial amount invested to the ending
redeemable value, according to the following formula:
........P(1+T)N = ERV
........Where: P = a hypothetical initial payment of $1,000
........ T = average annual total return
........ N = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made
at the beginning of the particular period at the end of the
particular period
For purposes of the total return quotations for these Investment
Divisions, the calculations take into effect all fees that are charged to the
Contract Value, and for any fees that vary with the size of the account, the
account size is assumed to be the respective Investment Divisions' mean account
size. The calculations also assume a complete redemption as of the end of the
particular period.
FINANCIAL STATEMENTS
The financial statements of GWL&A as contained herein should be
considered only as bearing upon GWL&A's ability to meet its obligations under
the Contracts, and they should not be considered as bearing on the investment
performance of the Series Account. The variable interest of Contract Owners
under the Contract is affected solely by the investment results of the Series
Account.
PART B
FINANCIAL STATEMENTS
RETIREMENT PLAN SERIES ACCOUNT
- -----------------------------------------------------------------------------
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
AND INDEPENDENT AUDITORS' REPORT
INDEPENDENT
AUDITORS' REPORT
To the Board of
Directors and
Contract Owners of
Retirement Plan Series Account of
Great-West Life& Annuity Insurance Company
We have audited the accompanying statement of assets and liabilities of
Retirement Plan Series Account of Great-West Life & Annuity Insurance Company
(the "Series Account") as of December 31, 1999, and the related statements of
operations for the year then ended, by investment division, and the statements
of changes in net assets for each of the two years in the period then ended, by
investment division. These financial statements are the responsibility of the
Series Account'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. Our procedures included
confirmation of securities owned as of December 31, 1999, by correspondence with
the custodian. 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 Retirement Plan Series Account
of Great-West Life & Annuity Insurance Company as of December 31, 1999, the
results of its operations for the year then ended, by investment division, and
the changes in its net assets for each of the two years in the period then
ended, by investment division, in conformity with generally accepted accounting
principles.
/s/Deloitte & Touche LLP
February 22, 2000
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- ---------------------------------------------------------
RETIREMENT PLAN SERIES ACCOUNT OF
- ---------------------------------------------------------
GREAT - WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
- -------------------------------------------------------------------------------
<TABLE>
ASSETS
Shares Cost Value
<S> <C> <C> <C> <C> <C> <C>
Investments in underlying affiliated funds:
Maxim Series Fund, Ariel Small-Cap Value 3,000,149 $ $
Inc. 2,646,391 2,352,148
Maxim Series Fund, Bond Index Portfolio 1,142,989
Inc. 1,471,421 1,403,132
Maxim Series Fund, Foreign Equity Portfolio 1,578,607
Inc. 1,717,708 2,001,077
Maxim Series Fund, Founders Growth & Income 4,974,889
Inc. Portfolio 5,599,817 6,176,690
Maxim Series Fund, Growth Index Portfolio
Inc. 8,447,230 20,741,404 24,187,786
Maxim Series Fund, Index 600 Portfolio 3,077,154
Inc. 2,530,826 2,461,339
Maxim Series Fund, Loomis Sayles Corporate Bond 1,995,861
Inc. Portfolio 2,253,814 2,124,108
Maxim Series Fund, Loomis Sayles Small-Cap Value 3,923,757
Inc. Portfolio 5,618,313 5,237,766
Maxim Series Fund, Money Market Portfolio 6,870,287
Inc. 6,873,777 6,873,777
Maxim Series Fund, Short-Term Maturity Portfolio 368,319
Inc. 373,411 369,078
Maxim Series Fund, Stock Index Portfolio 5,573,322
Inc. 19,927,694 22,540,820
Maxim Series Fund, T. Rowe Price MidCap Growth 3,113,098
Inc. Portfolio 4,285,934 4,928,444
Maxim Series Fund, U.S. Government Mortgage 2,086,238
Inc. Securities Portfolio 2,449,854 2,347,024
Maxim Series Fund, Value Index Portfolio 6,589,730
Inc. 12,710,992 11,889,397
----------- ----------
Total Investments $
==
89,201,356 94,892,586
===========
Other assets and liabilities:
Net Premiums (Redemptions) Due and Accrued
175,662
Investment Income Due and Accrued
873
Due to Great-West Life & Annuity Insurance Company
(10,410)
NET ASSETS APPLICABLE TO OUTSTANDING UNITS OF CAPITAL (Note 5) $ 95,058,711
============
</TABLE>
RETIREMENT PLAN SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------
Maxim
Founders Maxim
Maxim Maxim Growth & Maxim Loomis
Ariel Maxim Foreign Income Growth Maxim Sayles
Small-Cap Bond Equity Portfolio Index Index 600 Corporate
Value Index Portfolio Portfolio Portfolio Bond
Portfolio Portfolio Portfolio
Investment Investment Investment Investment Investment Investment Investment
Division Division Division Division Division Division Division
--------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME $ $ $ $ 282,960 $ $ 221,304 $
287,357 72,560 4,368 1,572,920 194,005
EXPENSES - mortality and expense risks
5,439 2,082 3,229 10,389 41,211 5,795 5,275
------ ------ ------ ------- ------- ------ -----
NET INVESTMENT INCOME (LOSS) 272,571 215,509
------ ----- ------ ----------- --- ----------
281,918 70,478 1,139 1,531,709 188,730
-------- ------- ------ ---------- -------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on
investments (134,464) (15,160) 50,333 144,510 1,889,732 (779,241) (116,077)
Net change in unrealized appreciation
(depreciation)
on investments 371,937 811,184
---- ---- --- ----------- --- ----------
(298,982) (60,841) 314,649 1,261,413 16,980
--------- -------- -------- ---------- ------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS: 516,447
---- ---- --- ----------
(433,446) (76,001) 364,982 3,151,145 31,943 (99,097)
--------- -------- -------- ---------- ------- --------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ $ $ $ 789,018 $ $ 247,452 $
==== ===== === =========== === =========== ==
(151,528) (5,523) 366,121 4,682,854 89,633
========= ======= ======== ========== ======
See notes to financial statements.
(Continued)
RETIREMENT PLAN SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
- ------------------------------------------------------------------------------------------------------------------------
Maxim Maxim
Loomis Maxim T. U.S.
Sayles Maxim Maxim Maxim Rowe Price Government
Small-Cap Money Short-Term Stock MidCap Mortgage Maxim
Value Market Maturity Index Growth Securities Value Index
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
Investment
InvestmentInvestment Investment Investment Investment Investment Division
Division Division Division Division Division Division
----------------------------------------------------------------------------------
INVESTMENT INCOME $ $ 259,057 $ 15,308 $ $ 253,033 $ 144,361 $
381,911 1,220,316 1,672,165
EXPENSES - mortality and expense
risks 13,716 6,445 632 36,572 6,750 4,123 22,221
------- ------ ---- ------- ------ ------ ------
NET INVESTMENT INCOME (LOSS) 252,612 14,676 246,283 140,238
--- ----------- ---------- -- ----------- ----------
368,195 1,183,744 1,649,944
-------- ---------- ---------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on
investments (385,487) (347) (3,020) 1,458,243 231,214 (42,224) 355,613
Net change in unrealized
appreciation (depreciation)
on investments (2,762) 390,009 (90,531)
---- --------- ---------- ---- ----------- -----------
(54,316) 347 803,822 (963,720)
-------- ---- -------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS: (5,782) 621,223 (132,755)
-- ----------------------- -- ----------- -----------
(439,803) - 2,262,065 (608,107)
--------- -- ---------- ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ $ 252,612 $ 8,894 $ $ 867,506 $ 7,483 $
== ========== ========= == =========== =========== ==
(71,608) 3,445,809 1,041,837
======== ========== =========
See notes to financial statements.
(Continued)
RETIREMENT PLAN SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
- --------------------------------------------------
Total
Retirement
Plan
Series
Account
------------
INVESTMENT INCOME $
6,581,625
EXPENSES - mortality and expense risks
163,879
NET INVESTMENT INCOME (LOSS)
6,417,746
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on
investments 2,653,625
Net change in unrealized
appreciation (depreciation)
on investments
2,499,189
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
5,152,814
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $
=
11,570,560
See notes to financial statements.
(Concluded)
RETIREMENT PLAN SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 1999 and 1998
- ------------------------------------------------------------------------------------------------------------------------
Maxim Ariel Maxim Foreign Maxim Founders
Small-Cap Value Maxim Bond Index Equity Portfolio Growth & Income
Portfolio Portfolio Portfolio
Investment Division Investment Division Investment Division Investment Division
------------------- ------------------- ------------------- -------------------
1999 1998 1999 1998 1999 1998 1999 1998
---- ---- ---- ---- ---- ---- ---- ----
FROM OPERATIONS:
Net investment income (loss) $ $ $ $ $ $ $
281,918 76,764 70,478 45,529 $ 19,237 272,571 180,830
1,139
Net realized gain (loss) on (333,530) (15,160) (35,017)
investments (134,464) 6,904 50,333 144,510 72,703
Net change in unrealized
appreciation (depreciation) in
investments (298,982) 412,656 (60,841) (5,012) 314,649 63,279 371,937 197,782
--------- -------- -------- ------- -------- ------- -------- -------
Increase (decrease) in net assets
resulting from operations
(151,528) 155,890 (5,523) 47,421 366,121 47,499 789,018 451,315
--------- -------- ------- ------- -------- ------- -------- -------
FROM UNIT TRANSACTIONS (by
category):
Purchase payments: 427,878
930,196 1,250,733 408,542 745,015 530,314 2,762,423 1,889,058
Redemptions: (272,975) (143,952) (87,114) (323,351) (870,145) (329,501)
(388,021) (256,537)
Net transfers:
(414,262) (228,275) (79,003) 23,495 558,997 (78,216) (552,121) 115,625
--------- --------- -------- ------- -------- -------- --------- -------
Increase (decrease) in net assets
resulting from unit transactions
127,913 749,483 185,587 681,396 765,960 93,125 1,340,157 1,675,182
-------- -------- -------- -------- -------- ------- -------------------
INCREASE (DECREASE) IN NET ASSETS (23,615) 140,624
905,373 180,064 728,817 1,132,081 2,129,175 2,126,497
NET ASSETS:
Beginning of period
2,397,939 1,492,566 1,222,931 494,114 938,052 797,428 4,045,795 1,919,298
-------------------- ---------- -------- -------- -------- -------------------
End of period $ $ $ $ $ $ $ $
== == == == == == == =
2,374,324 2,397,939 1,402,995 1,222,931 2,070,133 938,052 6,174,970 4,045,795
==================== ========== ==================== ======== ===================
See notes to financial statements.
(Continued)
RETIREMENT PLAN SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 1999 and 1998
- --------------------------------------------------------------------------------------------------------------------------
Maxim Growth Index Maxim Loomis Sayles Maxim Loomis Sayles
Portfolio Maxim Index 600 Corporate Bond Small-Cap Value
Portfolio Portfolio Portfolio
Investment Division Investment Division Investment Division Investment Division
------------------- ------------------- ------------------- -------------------
1999 1998 1999 1998 1999 1998 1999 1998
---- ---- ---- ---- ---- ---- ---- ----
FROM OPERATIONS:
Net investment income (loss) $ $ $ $ $ $ $ $
1,531,709 536,948 215,509 779,343 188,730 203,147 368,195 162,388
Net realized gain (loss) on (779,241)
investments 1,889,732 814,681 (53,917) (116,077) (41,090) (385,487) 27,148
Net change in unrealized
appreciation (depreciation) in
investments 1,261,413 1,594,098 811,184 (783,109) 16,980 (112,781) (54,316) (313,210)
---------- ---------- -------- --------- ------- --------- --------- ---------
Increase (decrease) in net assets
resulting from operations
4,682,854 2,945,727 247,452 (57,683) 89,633 49,276 (71,608) (123,674)
---------- ---------- -------- --------- ------- ------- --------- ---------
FROM UNIT TRANSACTIONS (by
category):
Purchase payments:
8,718,513 6,366,726 700,347 999,814 832,812 1,284,493 1,336,049 3,016,962
Redemptions: (420,525) (214,254)(1,115,402)(1,037,336)
(3,484,854)(1,520,505) (577,496) (331,498)
Net transfers:
720,899 349,937 (206,362) (212,203) (505,574) (331,474) (737,030) (481,780)
-------- -------- --------- --------- --------- --------- --------- ---------
Increase (decrease) in net assets
resulting from unit transactions
5,954,558 5,196,158 (83,511) 367,086 (4,260) 738,765 (516,383) 1,497,846
---------- ---------- -------- -------- ------- -------- --------- ---------
INCREASE (DECREASE) IN NET ASSETS 309,403 788,041 1,374,172
10,637,412 8,141,885 163,941 85,373 (587,991)
NET ASSETS:
Beginning of period
13,501,750 5,359,865 2,296,572 1,987,169 2,038,446 1,250,405 5,826,312 4,452,140
----------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
End of period $ $ $ $ $ $ $ $
== == == == == == == =
24,139,162 13,501,750 2,460,513 2,296,572 2,123,819 2,038,446 5,238,321 5,826,312
====================== ========== ========== ========== ========== ========== =========
See notes to financial statements.
(Continued)
RETIREMENT PLAN SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 1999 and 1998
- ------------------------------------------------------------------------------------------------------------------------
Maxim Money Market Maxim Short-Term Maxim T. Rowe Price
Portfolio Maturity Bond Maxim Stock Index MidCap Growth
Portfolio Portfolio Portfolio
Investment Division Investment Division Investment Division Investment Division
------------------- ------------------- ------------------- -------------------
1999 1998 1999 1998 1999 1998 1999 1998
---- ---- ---- ---- ---- ---- ---- ----
FROM OPERATIONS:
Net investment income (loss) $ $ $ $ $ $ $ $
252,612 107,442 14,676 6,139 1,183,744 586,811 246,283 (1,140)
Net realized gain (loss) on (88) (3,020) (32,258)
investments (347) 1,118 1,458,243 450,967 231,214
Net change in unrealized
appreciation (depreciation) in
investments 347 (347) (2,762) (651) 803,822 1,877,061 390,009 252,339
---- ----- ------- ----- -------- ---------- -------- -------
Increase (decrease) in net assets
resulting from operations
252,612 107,007 8,894 6,606 3,445,809 2,914,839 867,506 218,941
-------- -------- ------ ------ ---------- ---------- -------- -------
FROM UNIT TRANSACTIONS (by
category):
Purchase payments:
2,751,097 2,142,045 177,012 141,892 6,637,472 6,517,884 2,735,591 1,785,975
Redemptions:
(3,069,935) (831,283) (50,284) (186,650)(2,741,304)(1,648,751) (728,256) (180,139)
Net transfers:
2,677,108 1,178,878 51,896 14,092 (765,138) (423,894) 92,061 150,881
-------------------- ------- ------- --------- --------- ------- -------
Increase (decrease) in net assets
resulting from unit transactions 2,358,270 2,489,640 178,624 (30,666) 3,131,030 4,445,239 2,099,396 1,756,717
-------------------- -------- -------- ---------- -----------------------------
INCREASE (DECREASE) IN NET ASSETS
2,610,882 2,596,647 187,518 (24,060) 6,576,839 7,360,078 2,966,902 1,975,658
NET ASSETS:
Beginning of period
4,295,650 1,699,003 181,514 205,574 15,995,861 8,635,783 1,992,131 16,473
-------------------- -------- --------- ---------- -------------------- ------
End of period $ 6,906,532 $ $ 369,032 $ 181,514 $ 4,959,033 $ 1,992,131
=============== ========= ========== ============ ===========
4,295,650 22,572,700 15,995,861
========== =========== ==========
See notes to financial statements.
(Continued)
RETIREMENT PLAN SERIES ACCOUNT
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 1999 and 1998
- ---------------------------------------------------------------------------------------------------
Maxim U.S.
Government Mortgage Maxim Value Index Total Retirement
Securities Portfolio Portfolio Plan Series Account
Investment Division Investment Division
------------------- -------------------
1999 1998 1999 1998 1999 1998
---- ---- ---- ---- ---- ----
FROM OPERATIONS:
Net investment income (loss) $ $ $ $ $ $
140,238 95,293 1,649,944 703,356 6,417,746 3,502,087
Net realized gain (loss) on (42,224)
investments 15,254 355,613 612,006 2,653,625 1,504,881
Net change in unrealized (
-----
appreciation (depreciation) in 12,062) (
------ -----------
investments (90,531) 963,720) (385,651) 2,499,189 2,784,392
-------- -------- --------- ---------- ---------
Increase (decrease) in net assets
resulting from operations 98,485
--------- ------
7,483 1,041,837 929,711 11,570,560 7,791,360
------ ---------- ------------------- ---------
FROM UNIT TRANSACTIONS (by
category):
Purchase payments:
1,072,805 1,213,921 4,946,974 3,855,784 34,540,147 31,638,180
Redemptions: (696,835) (185,833)(1,894,277)(1,123,222(16,415,610(8,294,625)
Net transfers:
(262,718) 181,859 (750,304) (238,716) (171,551) 20,209
--------- -------- --------- --------- --------- ------
Increase (decrease) in net assets
resulting from unit transactions 1,209,947
----- ---------
113,252 2,302,393 2,493,846 17,952,986 23,363,764
-------- ---------- -------------------------------
INCREASE (DECREASE) IN NET ASSETS 3,344,230
120,735 1,308,432 3,423,557 29,523,546 31,155,124
NET ASSETS:
Beginning of period
2,258,330 949,898 8,543,882 5,120,325 65,535,165 34,380,041
---------- ------------------ -------------------------------
End of period $ $ $ $ $ $
=== === === === === ==
2,379,065 2,258,330 11,888,112 8,543,882 95,058,711 65,535,165
==============================================================
See notes to financial statements.
</TABLE>
(Concluded)
RETIREMENT PLAN SERIES ACCOUNT OF
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
- ---------------------------------------------------------------------------
1. HISTORY OF THE SERIES ACCOUNT
The Retirement Plan Series Account of Great-West Life & Annuity Insurance
Company (the Series Account) is a separate account of Great-West Life &
Annuity Insurance Company (the Company) established under Colorado law. The
Series Account commenced operations on June 1, 1995. The Series Account is
registered with the Securities and Exchange Commission as a unit investment
trust under the provisions of the Investment Company Act of 1940, as
amended.
2. Significant Accounting Policies
The following is a summary of significant accounting policies of the Series
Account, which are in accordance with the accounting principles generally
accepted in the investment company industry.
Security Transactions - Security transactions are recorded on the trade
date. Cost of investments sold is determined on the basis of identified
cost.
Dividend income is accrued as of the ex-dividend date and expenses are
accrued on a daily basis.
Security Valuation - The investments in shares of the underlying funds are
valued at the closing net asset value per share as determined by the
appropriate fund/portfolio at the end of each day.
The cost of investments represents shares of the underlying funds that were
purchased by the Series Account. Purchases are made at the net asset value
from net purchase payments or through reinvestment of all distributions from
the underlying fund.
Federal Income Taxes - The Series Account income is automatically applied to
increase contract reserves. Under the existing federal income tax law, this
income is not taxed to the extent that it is applied to increase reserves
under a contract. The Company reserves the right to charge the Series
Account for federal income taxes attributable to the Series Account if such
taxes are imposed in the future.
Net Transfers - Net transfers include transfers between investment divisions
of the Series Account as well as transfers between other investment options
of the Company.
3. CHARGES UNDER THE CONTRACT
Charges Incurred for Total or Partial Surrenders - The administrative
surrender fee is $50 if the contract is surrendered in whole during the
first 12 months and $25 if the contract is surrendered in part during the
first 12 months.
Deductions for Variable Asset Charge - The Company deducts an amount,
computed daily, from the net asset value of the Series Account investments,
equal to an annual rate of .75% (category A), .50% (category O), .25%
(category U), or .00% (category Z) depending on the size of the contract.
This charge is designed to compensate the Company for its assumption of
certain mortality, death benefit and expense risks.
Premium Taxes - The Company presently intends to pay any premium tax levied
by any governmental entity as a result of the existence of the participant
accounts or the Series Account.
If the above charges prove insufficient to cover actual costs and assumed
risks, the loss will be borne by the Company; conversely, if the amounts
deducted prove more than sufficient, the excess will be a profit to the
Company.
4. RELATED PARTY SERVICES
A wholly owned subsidiary of the Company, GW Capital Management, Inc.,
serves as investment advisor to Maxim Series Fund, Inc. Fees are assessed
against the average daily net asset value of the affiliated funds to
compensate GW Capital Management, Inc. for investment advisory services.
5. SELECTED DATA
====
The following is a summary of selected data for a
unit of capital and net assets of the Series Account.
====
<TABLE>
------------------------------------------------------------------------------------------------
Maxim Ariel Small-Cap Value Portfolio Maxim Bond Index Portfolio
==== ------------------------------------------------------------------------------------------------
A O U Z A O U Z
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Date Commenced 07/12/95 07/12/95 07/12/95 07/12/95 07/24/95 07/24/95 07/24/95 07/24/95
Operations
1999
Beginning Unit Value
$ $ $ $ $ $ $ $
17.60 17.76 17.92 18.08 12.09 12.26 12.24 12.48
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
16.45 16.64 16.83 17.03 11.96 12.16 12.18 12.45
================================================================================================
Number of Units
Outstanding 14,905.91 24,057.44 35,698.19 66,232.53 7,068.27 18,853.07 19,881.96 68,065.18
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
245 400 601 1,128 85 229 242 847
================================================================================================
1998
Beginning Unit Value
$ $ $ $ $ $ $ $
16.37 16.48 16.59 16.69 11.37 11.51 11.46 11.66
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
17.60 17.76 17.92 18.08 12.09 12.26 12.24 12.48
================================================================================================
Number of Units
Outstanding 15,277.80 25,248.80 36,738.60 56,570.22 8,742.38 10,556.44 19,279.56 60,223.73
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
269 448 658 1,023 106 129 236 752
================================================================================================
1997
Beginning Unit Value
$ $ $ $ $ $ $ $
12.90 12.95 13.00 13.06 10.72 10.82 10.75 10.91
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
16.37 16.48 16.59 16.69 11.37 11.51 11.46 11.66
================================================================================================
Number of Units
Outstanding 12,300.05 17,280.05 29,579.62 30,895.89 6,517.10 8,451.89 8,892.12 18,942.32
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
201 285 491 516 74 97 102 221
================================================================================================
1996
Beginning Unit Value
$ $ $ $ $ $ $ $
11.02 11.04 11.05 11.07 10.48 10.55 10.45 10.58
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
12.90 12.95 13.00 13.06 10.72 10.82 10.75 10.91
================================================================================================
Number of Units
Outstanding 5,037.63 7,695.51 12,528.51 8,094.84 4,019.39 5,887.41 2,497.98 14,123.28
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
65 100 163 106 43 64 27 154
================================================================================================
1995
Beginning Unit Value
$ $ $ $ $ $ $ $
10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
11.02 11.04 11.05 11.07 10.48 10.55 10.45 10.58
================================================================================================
Number of Units
Outstanding 773.21 1,371.51 5,416.35 2,801.92 756.56 1,298.14 2,523.64 7,411.72
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
9 15 60 31 8 14 26 78
================================================================================================
See notes to financial statements.
(Continued)
5. SELECTED DATA
------------------------------------------------------------------------------------------------
Maxim Foreign Equity Portfolio Maxim Founders Growth & Income Portfolio
------------------------------------------------------------------------------------------------
A O U Z A O U Z
Date Commenced 06/01/95 06/01/95 06/01/95 06/01/95 07/24/95 07/24/95 07/24/95 07/24/95
Operations
1999
Beginning Unit Value
$ $ $ $ $ $ $ $
11.01 11.05 11.13 11.23 17.35 17.51 17.67 17.83
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
14.27 14.36 14.50 14.67 19.81 20.04 20.27 20.50
================================================================================================
Number of Units
Outstanding 16,549.53 27,587.74 28,715.74 69,616.01 33,099.91 44,398.09 67,291.64 159,256.08
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
236 396 416 1,021 656 890 1,364 3,265
================================================================================================
1998
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
10.30 10.31 10.36 10.43 14.84 14.93 15.03 15.13
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
11.01 11.05 11.13 11.23 17.35 17.51 17.67 17.83
================================================================================================
Number of Units
Outstanding 14,150.08 17,599.47 22,714.22 29,845.49 26,408.73 35,164.52 60,073.36 107,167.86
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
156 194 253 335 458 616 1,061 1,910
================================================================================================
1997
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
11.00 10.99 11.01 11.06 12.08 12.12 12.17 12.22
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
10.30 10.31 10.36 10.43 14.84 14.93 15.03 15.13
================================================================================================
Number of Units
Outstanding 13,468.10 18,078.02 19,626.37 25,784.14 18,873.51 25,096.49 33,623.10 50,196.47
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
139 186 203 269 280 375 505 759
================================================================================================
1996
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
10.30 10.27 10.26 10.28 10.89 10.90 10.92 10.93
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
11.00 10.99 11.01 11.06 12.08 12.12 12.17 12.22
================================================================================================
Number of Units
Outstanding 9,442.18 12,679.40 10,789.35 9,174.83 10,571.44 15,356.64 12,390.53 26,371.06
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
104 139 119 101 128 186 151 322
================================================================================================
1995
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
10.30 10.27 10.26 10.28 10.89 10.90 10.92 10.93
================================================================================================
Number of Units
Outstanding 2,788.66 1,670.77 2,190.94 1,192.47 1,177.80 5,184.26 2,940.80 4,666.32
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
29 17 22 12 13 57 32 51
================================================================================================
See notes to financial statements.
(Continued)
5. SELECTED DATA
------------------------------------------------------------------------------------------------
Maxim Growth Index Portfolio Maxim Index 600 Portfolio
------------------------------------------------------------------------------------------------
A O U Z A O U Z
====
Date Commenced 07/24/95 07/24/95 07/24/95 07/24/95 06/01/95 06/01/95 06/01/95 06/01/95
Operations
1999
Beginning Unit Value
$ $ $ $ $ $ $ $
24.77 24.99 25.21 25.44 15.58 15.71 15.85 15.99
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
31.19 31.55 31.91 32.27 17.29 17.48 17.68 17.89
================================================================================================
Number of Units
Outstanding 75,452.51 131,008.46 147,867.87 400,784.24 22,442.06 24,822.00 26,469.79 65,423.32
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
2,353 4,133 4,718 12,935 388 434 468 1,170
================================================================================================
1998
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
18.18 18.29 18.41 18.53 15.95 16.04 16.15 16.25
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
24.77 24.99 25.21 25.44 15.58 15.71 15.85 15.99
================================================================================================
Number of Units
Outstanding 64,431.56 109,295.25 114,929.12 246,772.24 23,227.78 28,845.27 31,905.16 61,018.77
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
1,596 2,731 2,898 6,277 362 453 506 976
================================================================================================
1997
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
14.17 14.22 14.28 14.34 13.28 13.33 13.38 13.43
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
18.18 18.29 18.41 18.53 15.95 16.04 16.15 16.25
================================================================================================
Number of Units
Outstanding 43,323.40 65,415.29 68,910.66 113,708.46 21,596.15 22,264.86 29,959.15 49,337.14
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
787 1,197 1,269 2,107 344 357 484 802
================================================================================================
1996
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
11.69 11.71 11.72 11.74 11.60 11.62 11.63 11.65
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
14.17 14.22 14.28 14.34 13.28 13.33 13.38 13.43
================================================================================================
Number of Units
Outstanding 23,490.03 35,100.60 38,890.98 64,886.39 13,245.31 17,113.51 20,809.07 28,991.22
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
333 499 555 930 176 228 278 389
================================================================================================
1995
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
11.69 11.71 11.72 11.74 11.60 11.62 11.63 11.65
================================================================================================
Number of Units
Outstanding 3,339.10 10,056.69 9,367.33 19,673.41 2,240.54 5,959.11 3,318.14 14,397.06
==================================== ====================================
========================
Net Assets (000's)
$ $ $ $ $ $ $ $
39 118 110 231 26 69 39 168
================================================================================================
See notes to financial statements.
(Continued)
5. SELECTED DATA
------------------------------------------------------------------------------------------------
Maxim Loomis Sayles Corporate Bond Portfolio Maxim Loomis Sayles Small-Cap Value Portfolio
------------------------------------------------------------------------------------------------
A O U Z A O U Z
Date Commenced 07/24/95 07/24/95 07/24/95 07/24/95 08/03/95 08/03/95 08/03/95 08/03/95
Operations
1999
Beginning Unit Value
$ $ $ $ $ $ $ $
13.77 13.98 13.93 14.23 18.46 18.63 18.79 18.96
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
14.34 14.59 14.58 14.92 18.24 18.45 18.66 18.88
================================================================================================
Number of Units
Outstanding 14,381.58 27,293.97 42,009.67 60,790.49 38,362.52 54,436.95 58,322.93 129,541.79
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
206 398 612 907 700 1,005 1,088 2,446
================================================================================================
1998
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
13.42 13.58 13.50 13.76 19.03 19.16 19.27 19.40
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
13.77 13.98 13.93 14.23 18.46 18.63 18.79 18.96
================================================================================================
Number of Units
Outstanding 12,931.10 33,672.28 38,152.86 60,299.36 42,420.28 65,931.45 77,252.32 124,677.56
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
178 471 532 858 783 1,228 1,451 2,364
================================================================================================
1997
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
11.99 12.11 12.01 12.21 15.40 15.46 15.52 15.59
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
13.42 13.58 13.50 13.76 19.03 19.16 19.27 19.40
================================================================================================
Number of Units
Outstanding 11,596.69 24,206.54 22,675.77 33,423.75 37,737.28 64,185.86 59,544.98 69,924.71
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
156 329 306 460 718 1,230 1,148 1,357
================================================================================================
1996
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
10.95 11.03 10.91 11.06 11.93 11.95 11.96 11.98
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
11.99 12.11 12.01 12.21 15.40 15.46 15.52 15.59
================================================================================================
Number of Units
Outstanding 5,084.50 10,767.39 7,111.83 17,630.19 19,250.73 30,001.51 23,175.18 24,716.11
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
61 130 85 215 296 464 360 385
================================================================================================
1995
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
10.95 11.03 10.91 11.06 11.93 11.95 11.96 11.98
================================================================================================
Number of Units
Outstanding 821.90 2,425.21 1,650.00 22,880.14 1,064.47 5,718.10 1,398.81 4,726.93
==================================== ====================================
========================
Net Assets (000's)
$ $ $ $ $ $ $ $
9 27 18 253 13 68 17 57
================================================================================================
See notes to financial statements.
(Continued)
5. SELECTED DATA
------------------------------------------------------------------------------------------------
Maxim Money Market Portfolio Maxim Short-Term Maturity Bond Portfolio
------------------------------------------------------------------------------------------------
A O U Z A O U Z
Date Commenced 07/05/95 07/05/95 07/05/95 07/05/95 03/13/96 03/13/96 03/13/96 03/13/96
Operations
1999
Beginning Unit Value
$ $ $ $ $ $ $ $
11.63 11.46 11.61 11.95 11.50 11.64 11.74 11.66
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
12.10 11.95 12.14 12.52 11.80 11.97 12.10 12.05
================================================================================================
Number of Units
Outstanding 19,672.11 54,003.74 108,972.59 375,328.42 2,377.67 8,044.57 7,558.87 12,713.36
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
238 645 1,322 4,701 28 96 91 153
================================================================================================
1998
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
11.14 10.93 11.06 11.36 10.89 11.00 11.06 10.96
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
11.63 11.46 11.61 11.95 11.50 11.64 11.74 11.66
================================================================================================
Number of Units
Outstanding 20,837.46 41,474.94 75,566.21 226,071.77 2,375.51 5,795.00 3,416.04 4,002.64
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
242 475 877 2,701 27 67 40 47
================================================================================================
1997
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
10.66 10.47 10.54 10.79 10.34 10.41 10.45 10.33
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
11.14 10.93 11.06 11.36 10.89 11.00 11.06 10.96
================================================================================================
Number of Units
Outstanding 12,004.78 26,660.24 32,201.63 80,773.05 1,209.69 2,989.60 2,031.38 12,503.20
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
134 291 356 918 13 33 22 137
================================================================================================
1996
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
10.23 10.02 10.05 10.27 10.06 10.07 10.08 10.09
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
10.66 10.47 10.54 10.79 10.34 10.41 10.45 10.33
================================================================================================
Number of Units
Outstanding 9,449.98 12,173.70 15,907.37 59,518.32 244.56 1,038.88 1,603.91 219.54
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
101 127 168 642 3 11 17 2
================================================================================================
1995
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
10.23 10.02 10.05 10.27 10.06 10.07 10.08 10.09
================================================================================================
Number of Units
Outstanding 2,395.98 926.69 1,445.29 44,935.09 - - - -
==================================== ====================================
========================
Net Assets (000's)
$ $ $ $ $ $ $ $
25 9 15 461 - - - -
================================================================================================
See notes to financial statements.
(Continued)
5. SELECTED DATA
------------------------------------------------------------------------------------------------
Maxim Stock Index Portfolio Maxim T Rowe Price MidCap Portfolio
------------------------------------------------------------------------------------------------
A O U Z A O U Z
Date Commenced 06/01/95 06/01/95 06/01/95 06/01/95 06/30/97 06/30/97 06/30/97 06/30/97
Operations
1999
Beginning Unit Value
$ $ $ $ $ $ $ $
23.18 23.27 23.48 23.69 13.40 13.45 13.50 13.55
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
27.54 27.72 28.04 28.36 16.57 16.67 16.78 16.88
================================================================================================
Number of Units
Outstanding 56,641.17 134,110.58 148,486.44 462,932.29 32,392.52 45,863.53 54,321.27 162,732.50
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
1,560 3,718 4,164 13,131 537 765 911 2,748
================================================================================================
1998
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
18.42 18.45 18.56 18.68 11.04 11.06 11.07 11.09
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
23.18 23.27 23.48 23.69 13.40 13.45 13.50 13.55
================================================================================================
Number of Units
Outstanding 57,660.73 123,326.43 138,697.83 360,224.24 15,971.70 28,827.46 23,055.16 79,644.98
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
1,336 2,870 3,256 8,533 214 388 311 1,079
================================================================================================
1997
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
14.01 14.00 14.06 14.11 10.00 10.00 10.00 10.00
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
18.42 18.45 18.56 18.68 11.04 11.06 11.07 11.09
================================================================================================
Number of Units
Outstanding 53,406.89 93,690.46 101,305.87 216,413.98 - - - 1,485.90
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
984 1,728 1,881 4,043 - - - 16
==================================== ================================================
============
1996
================================================
Beginning Unit Value
$ $ $ $
11.59 11.55 11.57 11.58
================================================
Ending Unit Value
$ $ $ $
14.01 14.00 14.06 14.11
================================================
Number of Units
Outstanding 30,565.13 48,278.77 50,780.90 119,929.73
================================================
Net Assets (000's)
$ $ $ $
428 676 714 1,692
================================================
1995
================================================
Beginning Unit Value
$ $ $ $
10.00 10.00 10.00 10.00
================================================
Ending Unit Value
$ $ $ $
11.59 11.55 11.57 11.58
================================================
Number of Units
Outstanding 4,042.63 11,673.47 18,708.73 55,122.00
================================================
Net Assets (000's)
$ $ $ $
47 135 216 639
================================================
5. SELECTED DATA
------------------------------------------------------------------------------------------------
Maxim U.S. Government Mortgage Securities Maxim Value Index Portfolio
Portfolio
------------------------------------------------------------------------------------------------
A O U Z A O U Z
Date Commenced 07/12/95 07/12/95 07/12/95 07/12/95 07/12/95 07/12/95 07/12/95 07/12/95
Operations
1999
Beginning Unit Value
$ $ $ $ $ $ $ $
12.40 12.58 12.69 12.81 20.90 21.09 21.28 21.47
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
12.37 12.58 12.73 12.87 23.11 23.38 23.65 23.92
================================================================================================
Number of Units
Outstanding 15,855.63 27,784.66 28,714.60 114,042.30 43,966.79 84,831.08 100,429.74 272,374.15
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
196 350 365 1,468 1,016 1,983 2,375 6,514
================================================================================================
1998
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
11.67 11.80 11.88 11.95 18.40 18.52 18.64 18.76
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
12.40 12.58 12.69 12.81 20.90 21.09 21.28 21.47
================================================================================================
Number of Units
Outstanding 14,629.83 20,647.77 33,304.47 108,890.83 41,606.69 81,338.97 94,959.15 183,410.06
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
181 260 423 1,394 870 1,715 2,021 3,938
================================================================================================
1997
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
10.82 10.92 10.96 11.00 13.82 13.88 13.93 13.99
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
11.67 11.80 11.88 11.95 18.40 18.52 18.64 18.76
================================================================================================
Number of Units
Outstanding 8,773.99 15,501.18 17,934.40 37,775.13 34,549.99 61,417.45 65,117.93 113,775.97
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
102 183 213 452 636 1,137 1,214 2,134
================================================================================================
1996
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
10.45 10.52 10.54 10.55 11.55 11.56 11.58 11.60
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
10.82 10.92 10.96 11.00 13.82 13.88 13.93 13.99
================================================================================================
Number of Units
Outstanding 5,272.40 8,847.40 7,526.42 18,157.75 16,778.01 32,274.09 32,323.22 46,735.19
================================================================================================
Net Assets (000's)
$ $ $ $ $ $ $ $
57 97 82 200 232 448 450 654
================================================================================================
1995
================================================================================================
Beginning Unit Value
$ $ $ $ $ $ $ $
10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00
================================================================================================
Ending Unit Value
$ $ $ $ $ $ $ $
10.45 10.52 10.54 10.55 11.55 11.56 11.58 11.60
================================================================================================
Number of Units
Outstanding 731.02 5,864.01 1,624.61 7,344.94 1,666.79 7,395.18 12,134.89 18,036.45
==================================== ====================================
========================
Net Assets (000's)
$ $ $ $ $ $ $ $
8 62 17 77 19 86 141 209
================================================================================================
See notes to financial statements.
</TABLE>
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
- -----------------------------------------------------------------------------
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
(An indirect wholly-owned subsidiary of
The Great-West Life Assurance Company)
Consolidated Financial Statements for the Years Ended
December 31, 1999, 1998, and 1997 and
Independent Auditors' Report
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholder of
Great-West Life & Annuity Insurance Company:
We have audited the accompanying consolidated balance sheets of Great-West
Life & Annuity Insurance Company (an indirect wholly-owned subsidiary of
The Great-West Life Assurance Company) and subsidiaries as of December 31,
1999 and 1998, and the related consolidated statements of income,
stockholder's equity, and cash flows for each of the three years in the
period ended December 31, 1999. 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, such consolidated financial statements present fairly, in
all material respects, the financial position of Great-West Life & Annuity
Insurance Company and subsidiaries as of December 31, 1999 and 1998, and
the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1999 in conformity with generally
accepted accounting principles.
As discussed in Note 1 to the consolidated financial statements, effective
January 1, 1999, the Company adopted Statement of Position No. 98-1,
"Accounting for the Cost of Computer Software Developed or Obtained for
Internal Use" and, accordingly, changed its method of accounting for
software development costs.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Denver, Colorado
January 31, 2000
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
(Dollars in Thousands)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
===================================================================================================================================
1999 1998
---------------------- -----------------------
ASSETS
INVESTMENTS:
Fixed Maturities:
Held-to-maturity, at amortized cost (fair value
$2,238,581 and $2,298,936) $ 2,260,581 $ 2,199,818
Available-for-sale, at fair value (amortized cost
$6,953,383 and $6,752,532) 6,727,922 6,936,726
Common stock, at fair value (cost $43,978 and 69,240 48,640
$41,932)
Mortgage loans on real estate, net 974,645 1,133,468
Real estate, net 103,731 73,042
Policy loans 2,681,132 2,858,673
Short-term investments, available-for-sale (cost
approximates fair value) 240,804 420,169
---------------------- -----------------------
Total Investments 13,058,055 13,670,536
Cash 257,840 176,119
Reinsurance receivable
Related party 5,015 5,006
Other 168,307 187,952
Deferred policy acquisition costs 282,295 238,901
Investment income due and accrued 137,810 157,587
Other assets 308,419 311,078
Premiums in course of collection 142,199 84,940
Deferred income taxes 253,323 191,483
Separate account assets 12,780,016 10,099,543
---------------------- -----------------------
TOTAL ASSETS $ 27,393,279 $ 25,123,145
====================== =======================
</TABLE>
See notes to consolidated financial statements.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
1999 1998
----------------- -----------------
LIABILITIES AND STOCKHOLDER'S EQUITY
POLICY BENEFIT LIABILITIES:
Policy reserves
Related party $ 555,783 $ 555,300
Other 11,181,900 11,347,548
Policy and contract claims 391,968 428,798
Policyholders' funds 185,623 181,779
Provision for policyholders' dividends 70,726 69,530
GENERAL LIABILITIES:
Due to Parent Corporation 35,979 52,877
Due to GWL&A Financial 175,035
Repurchase agreements 80,579 244,258
Commercial paper 39,731
Other liabilities 638,469 761,505
Undistributed earnings on participating business 130,638 143,717
Separate account liabilities 12,780,016 10,099,543
----------------- -----------------
Total Liabilities 26,226,716 23,924,586
----------------- -----------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY:
Preferred stock, $1 par value, 50,000,000 shares authorized,
0 shares issued and outstanding
Common stock, $1 par value; 50,000,000 shares
authorized; 7,032,000 shares issued and outstanding 7,032 7,032
Additional paid-in capital 700,316 699,556
Accumulated other comprehensive income (loss) (84,861) 61,560
Retained earnings 544,076 430,411
----------------- -----------------
Total Stockholder's Equity 1,166,563 1,198,559
----------------- -----------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 27,393,279 $ 25,123,145
================= =================
</TABLE>
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
(Dollars in Thousands)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
===================================================================================================================================
1999 1998 1997
---------------- ---------------- ----------------
REVENUES:
Premiums
Related party (including premiums
recaptured totaling $0,
$0, and $155,798) $ $ 46,191 $ 155,798
Other (net of premiums ceded totaling
$85,803, $86,511 and $61,194) 1,163,183 948,672 677,381
Fee income 635,147 516,052 420,730
Net investment income
Related party (10,923) (9,416) (8,957)
Other 886,869 906,776 890,630
Net realized gains on investments 1,084 38,173 9,800
---------------- ---------------- ----------------
2,675,360 2,446,448 2,145,382
---------------- ---------------- ----------------
BENEFITS AND EXPENSES:
Life and other policy benefits (net of
reinsurance recoveries totaling $80,681,
$81,205, and $44,871) 970,250 768,474 543,903
Increase in reserves
Related party 46,191 155,798
Other 33,631 78,851 90,013
Interest paid or credited to contractholders 494,081 491,616 527,784
Provision for policyholders' share of earnings
on participating business 13,716 5,908 3,753
Dividends to policyholders 70,161 71,429 63,799
---------------- ---------------- ----------------
1,581,839 1,462,469 1,385,050
Commissions 173,405 144,246 102,150
Operating expenses (income):
Related party (768) (5,094) (6,292)
Other 593,575 518,228 431,714
Premium taxes 38,329 30,848 24,153
---------------- ---------------- ----------------
2,386,380 2,150,697 1,936,775
INCOME BEFORE INCOME TAXES 288,980 295,751 208,607
---------------- ---------------- ----------------
PROVISION FOR INCOME TAXES:
Current 72,039 81,770 61,644
Deferred 11,223 17,066 (11,797)
---------------- ---------------- ----------------
83,262 98,836 49,847
---------------- ---------------- ----------------
NET INCOME $ 205,718 $ 196,915 $ 158,760
================ ================ ================
</TABLE>
See notes to consolidated financial statements.
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
(Dollars in Thousands)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
Accumulated
Additional Other
Preferred Stock Common Stock Paid-in Comprehensive Retained
------------------------ --------------------
Shares Amount Shares Amount Capital Income (Loss) Earnings Total
------------------------ -------------------- --------- ------------------------ ------------
BALANCE, JANUARY 1, 1997 2,000,800 121,800 7,032,000 7,032 $ 664,265 14,951 226,166 $ 1,034,214
Net income 158,760 158,760
Other comprehensive income 37,856 37,856
------------
Total comprehensive income 196,616
------------
Capital contributions 26,483 26,483
Dividends (71,394) (71,394)
------------------------ -------------------- --------- ------------------------ ------------
BALANCE, DECEMBER 31, 1997 2,000,800 121,800 7,032,000 7,032 690,748 52,807 313,532 1,185,919
Net income 196,915 196,915
Other comprehensive income 8,753 8,753
------------
Total comprehensive income 205,668
------------
Capital contributions 8,808 8,808
Dividends (80,036) (80,036)
Purchase of preferred shares (2,000,800) (121,800) (121,800)
------------------------ -------------------- --------- ------------------------ ------------
BALANCE, DECEMBER 31, 1998 0 0 7,032,000 7,032 $ 699,556 61,560 430,411 $ 1,198,559
Net income 205,718 205,718
Other comprehensive loss (146,421) (146,421)
------------
Total comprehensive loss 59,297
------------
Capital contributions
Dividends (92,053) (92,053)
Income tax benefit on stock
Compensation 760 760
------------------------ -------------------- --------- ------------------------ ------------
BALANCE, DECEMBER 31, 1999 0 0 7,032,000 7,032 $ 700,316 (84,861) 544,076 $ 1,166,563
======================== ==================== ========= ======================== ============
</TABLE>
See notes to consolidated financial statements.
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
(Dollars in Thousands)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
===================================================================================================================================
1999 1998 1997
---------------- ---------------- ----------------
OPERATING ACTIVITIES:
Net income $ 205,718 $ 196,915 $ 158,760
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain allocated to participating
policyholders 13,716 5,908 3,753
Amortization of investments (22,514) (15,068) 409
Net realized gains on investments (1,084) (38,173) (9,800)
Depreciation and amortization 47,339 55,550 46,929
Deferred income taxes 11,223 17,066 (11,824)
Changes in assets and liabilities:
Policy benefit liabilities 650,959 938,444 498,114
Reinsurance receivable 19,636 (43,643) 112,594
Accrued interest and other receivables (37,482) 28,467 30,299
Other, net (146,150) (184,536) 64,465
---------------- ---------------- ----------------
Net cash provided by operating activities 741,361 960,930 893,699
---------------- ---------------- ----------------
INVESTING ACTIVITIES:
Proceeds from sales, maturities, and
redemptions of investments:
Fixed maturities
Held-to maturity
Sales 9,920
Maturities and redemptions 520,511 471,432 359,021
Available-for-sale
Sales 3,176,802 6,169,678 3,174,246
Maturities and redemptions 822,606 1,268,323 771,737
Mortgage loans 165,104 211,026 248,170
Real estate 5,098 16,456 36,624
Common stock 18,116 3,814 17,211
Purchases of investments:
Fixed maturities
Held-to-maturity (563,285) (584,092) (439,269)
Available-for-sale (4,019,465) (7,410,485) (4,314,722)
Mortgage loans (2,720) (100,240) (2,532)
Real estate (41,482) (4,581) (64,205)
Common stock (19,698) (10,020) (29,608)
---------------- ---------------- ----------------
Net cash provided by (used in)
investing activities $ 61,587 $ 41,231 $ (243,327)
================ ================ ================
</TABLE>
(Continued)
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
(Dollars in Thousands)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
==================================================================================================================================
1999 1998 1997
---------------- ---------------- ----------------
FINANCING ACTIVITIES:
Contract withdrawals, net of deposits $ (583,900) $ (507,237) $ (577,538)
Due to Parent Corporation (16,898) (73,779) (19,522)
Due to GWL&A Financial 175,035
Dividends paid (92,053) (80,036) (71,394)
Net commercial paper repayments (39,731) (14,327) (30,624)
Net repurchase agreements (repayments)
borrowings (163,680) (81,280) 38,802
Capital contributions 8,808 11,000
Purchase of preferred shares (121,800)
Acquisition of subsidiary (82,669)
---------------- ---------------- ----------------
---------------- ---------------- ----------------
Net cash used in financing activities (721,227) (952,320) (649,276)
---------------- ---------------- ----------------
NET INCREASE IN CASH 81,721 49,841 1,096
CASH, BEGINNING OF YEAR 176,119 126,278 125,182
---------------- ---------------- ----------------
CASH, END OF YEAR $ 257,840 $ 176,119 $ 126,278
================ ================ ================
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Cash paid during the year for:
Income taxes $ 76,150 $ 111,493 $ 86,829
Interest 14,125 13,849 15,124
</TABLE>
See notes to consolidated financial statements. (Concluded)
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
(Amounts in Thousands, except Share Amounts)
===============================================================================
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization - Great-West Life & Annuity Insurance Company (the Company) is
a wholly-owned subsidiary of GWL&A Financial Inc., a holding company formed
in 1998 (GWL&A Financial) and an indirect wholly-owned subsidiary of The
Great-West Life Assurance Company (the Parent Corporation). The Company is
an insurance company domiciled in the State of Colorado. The Company offers
a wide range of life insurance, health insurance, and retirement and
investment products to individuals, businesses, and other private and
public organizations throughout the United States.
Basis of Presentation - 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 consolidated financial
statements include the accounts of the Company and its subsidiaries. All
material inter-company transactions and balances have been eliminated in
consolidation.
Certain reclassifications have been made to the 1998 and 1997 financial
statements to conform to the 1999 presentation.
Investments - Investments are reported as follows:
1. Management determines the classification of fixed maturities at the time
of purchase. Fixed maturities are classified as held-to-maturity when the
Company has the positive intent and ability to hold the securities to
maturity. Held-to-maturity securities are stated at amortized cost unless
fair value is less than cost and the decline is deemed to be other than
temporary, in which case they are written down to fair value and a new cost
basis is established.
Fixed maturities not classified as held-to-maturity are classified as
available-for-sale. Available-for-sale securities are carried at fair
value, with the net unrealized gains and losses reported as accumulated
other comprehensive income (loss) in stockholder's equity. The net
unrealized gains and losses on derivative financial instruments used to
hedge available-for-sale securities are also included in other
comprehensive income (loss).
The amortized cost of fixed maturities classified as held-to-maturity or
available-for-sale is adjusted for amortization of premiums and accretion
of discounts using the effective interest method over the estimated life of
the related bonds. Such amortization is included in net investment income.
Realized gains and losses, and declines in value judged to be
other-than-temporary are included in net realized gains (losses) on
investments.
2. Mortgage loans on real estate are carried at their unpaid balances
adjusted for any unamortized premiums or discounts and any valuation
reserves. Interest income is accrued on the unpaid principal balance.
Discounts and premiums are amortized to net investment income using the
effective interest method. Accrual of interest is discontinued on any
impaired loans where collection of interest is doubtful.
The Company maintains an allowance for credit losses at a level that, in
management's opinion, is sufficient to absorb credit losses on its impaired
loans. Management's judgement is based on past loss experience, current and
projected economic conditions, and extensive situational analysis of each
individual loan. The measurement of impaired loans is based on the fair
value of the collateral.
3. Real estate is carried at cost. The carrying value of real estate is
subject to periodic evaluation of recoverability.
4. Investments in common stock are carried at fair value.
5. Policy loans are carried at their unpaid balances.
6. Short-term investments include securities purchased with initial
maturities of one year or less and are carried at amortized cost. The
Company considers short-term investments to be available-for-sale and
amortized cost approximates fair value.
7. Gains and losses realized on disposal of investments are determined on a
specific identification basis.
Cash - Cash includes only amounts in demand deposit accounts.
Internal Use Software - Effective January 1, 1999, the Company adopted
Statement of Position (SOP) No. 98-1, "Accounting for the Cost of Computer
Software Developed or Obtained for Internal Use". SOP 98-1 provides
guidance on accounting for costs associated with computer software
developed or obtained for internal use. As a result of the adoption of SOP
98-1, the Company capitalized $18,373 in internal use software development
costs for the year ended December 31, 1999.
Deferred Policy Acquisition Costs - Policy acquisition costs, which
primarily consist of sales commissions related to the production of new and
renewal business, have been deferred to the extent recoverable. Other costs
capitalized include expenses associated with the Company's group sales
representatives. These costs are variable in nature and are dependent upon
sales volume. Deferred costs associated with the annuity products are being
amortized over the life of the contracts in proportion to the emergence of
gross profits. Retrospective adjustments of these amounts are made when the
Company revises its estimates of current or future gross profits. Deferred
costs associated with traditional life insurance are amortized over the
premium paying period of the related policies in proportion to premium
revenues recognized. Amortization of deferred policy acquisition costs
totaled $43,512, $51,724, and $44,298 in 1999, 1998, and 1997,
respectively.
Separate Accounts - Separate account assets and related liabilities are
carried at fair value. The Company's separate accounts invest in shares of
Maxim Series Fund, Inc. and Orchard Series Fund, Inc., both diversified,
open-end management investment companies which are affiliates of the
Company, shares of other external mutual funds, or government or corporate
bonds. Investment income and realized capital gains and losses of the
separate accounts accrue directly to the contractholders and, therefore,
are not included in the Company's statements of income. Revenues to the
Company from the separate accounts consist of contract maintenance fees,
administrative fees, and mortality and expense risk charges.
Life Insurance and Annuity Reserves - Life insurance and annuity policy
reserves with life contingencies of $7,169,885 and $6,866,478 at December
31, 1999 and 1998, respectively, are computed on the basis of estimated
mortality, investment yield, withdrawals, future maintenance and settlement
expenses, and retrospective experience rating premium refunds. Annuity
contract reserves without life contingencies of $4,468,685 and $4,908,964
at December 31, 1999 and 1998, respectively, are established at the
contractholder's account value.
Reinsurance - Policy reserves ceded to other insurance companies are
carried as a reinsurance receivable on the balance sheet (see Note 3). The
cost of reinsurance related to long-duration contracts is accounted for
over the life of the underlying reinsured policies using assumptions
consistent with those used to account for the underlying policies.
Policy and Contract Claims - Policy and contract claims include provisions
for reported life and health claims in process of settlement, valued in
accordance with the terms of the related policies and contracts, as well as
provisions for claims incurred and unreported based primarily on prior
experience of the Company.
Participating Fund Account - Participating life and annuity policy reserves
are $4,297,823 and $4,108,314 at December 31, 1999 and 1998, respectively.
Participating business approximates 31.0%, 32.7%, and 50.5% of the
Company's ordinary life insurance in force and 94.0%, 71.9% and 91.1% of
ordinary life insurance premium income for the years ended December 31,
1999, 1998 and 1997, respectively.
The amount of dividends to be paid from undistributed earnings on
participating business is determined annually by the Board of Directors.
Amounts allocable to participating policyholders are consistent with
established Company practice.
The Company has established a Participating Policyholder Experience Account
(PPEA) for the benefit of all participating policyholders which is included
in the accompanying consolidated balance sheet. Earnings associated with
the operation of the PPEA are credited to the benefit of all participating
policyholders. In the event that the assets of the PPEA are insufficient to
provide contractually guaranteed benefits, the Company must provide such
benefits from its general assets.
The Company has also established a Participation Fund Account (PFA) for the
benefit of the participating policyholders previously transferred to the
Company from the Parent under an assumption reinsurance transaction. The
PFA is part of the PPEA. Earnings derived from the operation of the PFA net
of a management fee paid to the Company accrue solely for the benefit of
the participating policyholders.
Recognition of Premium and Fee Income and Benefits and Expenses - Life
insurance premiums are recognized when due. Annuity premiums with life
contingencies are recognized as received. Accident and health premiums are
earned on a monthly pro rata basis. Revenues for annuity and other
contracts without significant life contingencies consist of contract
charges for the cost of insurance, contract administration, and surrender
fees that have been assessed against the contract account balance during
the period. Fee income is derived primarily from contracts for claim
processing or other administrative services and from assets under
management. Fees from contracts for claim processing or other
administrative services are recorded as the services are provided. Fees
from assets under management, which consist of contract maintenance fees,
administration fees and mortality and expense risk charges, are recognized
when due. Benefits and expenses on policies with life contingencies impact
income by means of the provision for future policy benefit reserves,
resulting in recognition of profits over the life of the contracts. The
average crediting rate on annuity products was approximately 6.2%, 6.3%,
and 6.6% in 1999, 1998, and 1997.
Income Taxes - Income taxes are recorded using the asset and liability
approach, which requires, among other provisions, the recognition of
deferred tax assets and liabilities for expected future tax consequences of
events that have been recognized in the Company's financial statements or
tax returns. In estimating future tax consequences, all expected future
events (other than the enactments or changes in the tax laws or rules) are
considered. Although realization is not assured, management believes it is
more likely than not that the deferred tax asset, net of a valuation
allowance, will be realized.
Repurchase Agreements and Securities Lending - The Company enters into
repurchase agreements with third-party broker/dealers in which the Company
sells securities and agrees to repurchase substantially similar securities
at a specified date and price. Such agreements are accounted for as
collateralized borrowings. Interest expense on repurchase agreements is
recorded at the coupon interest rate on the underlying securities. The
repurchase fee received or paid is amortized over the term of the related
agreement and recognized as an adjustment to investment income.
The Company requires collateral in an amount greater than or equal to 102%
of the borrowing for all securities lending transactions.
Derivatives - The Company makes limited use of derivative financial
instruments to manage interest rate, market, and foreign exchange risk.
Such hedging activity consists primarily of interest rate swap agreements,
interest rate floors and caps, foreign currency exchange contracts, options
and equity swaps. The differential paid or received under the terms of
these contracts is recognized as an adjustment to net investment income on
the accrual method. Gains and losses on foreign exchange contracts are
deferred and recognized in net investment income when the hedged
transactions are realized.
Interest rate swap agreements are used to convert the interest rate on
certain fixed maturities from a floating rate to a fixed rate. Interest
rate swap transactions generally involve the exchange of fixed and floating
rate interest payment obligations without the exchange of the underlying
principal amount. Interest rate floors and caps are interest rate
protection instruments that require the payment by a counter-party to the
Company of an interest rate differential. The differential represents the
difference between current interest rates and an agreed-upon rate, the
strike rate, applied to a notional principal amount. Foreign currency
exchange contracts are used to hedge the foreign exchange rate risk
associated with bonds denominated in other than U.S. dollars. Written call
options are stock conversion protection agreements that require the
counter-party to automatically call the bond for cash when the issuer
elects to convert the bond to common stock. Equity swap transactions
generally involve the exchange of variable market performance of a basket
of securities for a fixed interest rate.
Although derivative financial instruments taken alone may expose the
Company to varying degrees of market and credit risk when used solely for
hedging purposes, these instruments typically reduce overall market and
interest rate risk. The Company controls the credit risk of its financial
contracts through credit approvals, limits, and monitoring procedures. As
the Company generally enters into transactions only with high quality
institutions, no losses associated with non-performance on derivative
financial instruments have occurred or are expected to occur.
The Financial Accounting Standards Board has issued Statement No. 133,
"Accounting for Derivative Instruments and for Hedging Activities", which,
as amended, is required to be adopted in years beginning after June 15,
2000. This Statement provides a comprehensive and consistent standard for
the recognition and measurement of derivatives and hedging activities.
Although management has not completed its analysis of the impact of this
Statement, management does not anticipate that the adoption of the new
Statement will have a significant effect on earnings or the financial
position of the Company because of the Company's minimal use of
derivatives.
Stock Options - The Company applies the intrinsic value measurement
approach under APB Opinion No. 25 to stock-based compensation awards to
employees.
2. ACQUISITION
On July 8, 1998, the Company paid $82,669 in cash to acquire all of the
outstanding shares of Alta Health & Life Insurance Company (Alta), formerly
known as Anthem Health & Life Insurance Company. The purchase price was
based on Alta's adjusted book value, and was subject to further minor
adjustments. The results of Alta's operations, which had an insignificant
effect on net income in 1998, have been combined with those of the Company
since the date of acquisition.
The acquisition was accounted for using the purchase method of accounting
and, accordingly, the purchase price was allocated to the net assets
acquired based on their estimated fair values. The fair value of tangible
assets acquired and liabilities assumed was $379,934 and $317,440,
respectively. The goodwill representing the purchase price in excess of
fair value of net assets acquired is included in other assets and is being
amortized over 30 years on a straight-line basis.
3. RELATED-PARTY TRANSACTIONS
On December 31, 1998, the Company and the Parent Corporation entered into
an Indemnity Reinsurance Agreement pursuant to which the Company reinsured
by coinsurance certain Parent Corporation individual non-participating life
insurance policies. The Company recorded $859 in premium income and
increase in reserves, associated with certain policies, as a result of this
transaction. Of the $137,638 in reserves that was recorded as a result of
this transaction, $136,779 was recorded under SFAS No. 97, "Accounting and
Reporting by Insurance Enterprises for Certain Long-Duration Contracts and
for Realized Gains and Losses from the Sale of Investments" ("SFAS No.
97"), accounting principles. The Company recorded, at the Parent
Corporation's carrying amount, which approximates estimated fair value, the
following at December 31, 1998 as a result of this transaction:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Assets Liabilities and Stockholder's Equity
Cash $ 24,600 Policy reserves $ 137,638
Deferred income taxes 3,816
Policy loans 82,649
Due from Parent Corporation 19,753
Other 6,820
------------ ------------
$ 137,638 $ 137,638
============ ============
</TABLE>
===========================================================================
In connection with this transaction, the Parent Corporation made a capital
contribution of $5,608 to the Company.
On September 30, 1998, the Company and the Parent Corporation entered into
an Indemnity Reinsurance Agreement pursuant to which the Company reinsured
by coinsurance certain Parent Corporation individual non-participating life
insurance policies. The Company recorded $45,332 in premium income and
increase in reserves as a result of this transaction. Of the $428,152 in
reserves that was recorded as a result of this transaction, $382,820 was
recorded under SFAS No. 97 accounting principles. The Company recorded, at
the Parent Corporation's carrying amount, which approximates estimated fair
value, the following at September 30, 1998 as a result of this transaction:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Assets Liabilities and Stockholder's Equity
===========================================
===========================================
Bonds $ 147,475 Policy reserves $ 428,152
===========================================
Mortgages 82,637 Due to Parent Corporation 20,820
===========================================
Cash 134,900
===========================================
Deferred policy acquisition costs 9,724
===========================================
Deferred income taxes 15,762
===========================================
Policy loans 56,209
===========================================
Other 2,265
===========================================
------------ ------------
$ 448,972 $ 448,972
=========================================== ============ ============
</TABLE>
In connection with this transaction, the Parent Corporation made a capital
contribution of $3,200 to the Company.
On September 30, 1998, the Company purchased furniture, fixtures and
equipment from the Parent Corporation for $25,184. In February 1997, the
Company purchased its corporate headquarters properties from the Parent
Corporation for $63,700.
On June 30, 1997, the Company recaptured all remaining pieces of an
individual participating insurance block of business previously reinsured
to the Parent Corporation on December 31, 1992. The Company recorded
$155,798 in premium income and increase in reserves as a result of this
transaction. The Company recorded, at the Parent Corporation's carrying
amount, which approximates estimated fair value, the following at June 30,
1997 as a result of this transaction:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Assets Liabilities and Stockholder's Equity
====================================
====================================
Cash $ 160,000 Policy reserves $ 155,798
====================================
Bonds 17,975 Due to Parent Corporation 20,373
====================================
Other 60 Deferred income taxes 2,719
====================================
Undistributed earnings on
====================================
participating business (855)
====================================
---------------- ----------------
$ 178,035 $ 178,035
==================================== ================ ================
</TABLE>
In connection with this transaction, the Parent Corporation made a capital
contribution of $11,000 to the Company.
Effective January 1, 1997, all employees of the U.S. operations of the
Parent Corporation and the related benefit plans were transferred to the
Company. All related employee benefit plan assets and liabilities were also
transferred to the Company (see Note 9). The transfer did not have a
material effect on the Company's operating expenses as the actual costs
associated with the employees and the benefit plans were charged previously
to the Company under administrative service agreements between the Company
and the Parent Corporation.
The Company performs administrative services for the U.S. operations of the
Parent Corporation. The following represents revenue from the Parent
Corporation for services provided pursuant to these service agreements. The
amounts recorded are based upon management's best estimate of actual costs
incurred and resources expended based upon number of policies and/or
certificates in force.
<TABLE>
<S> <C>
Years Ended December 31,
---------------------------------------------------
1999 1998 1997
--------------- --------------- ---------------
Investment management revenue $ 130 $ 475 $ 801
Administrative and underwriting revenue 768 5,094 6,292
</TABLE>
At December 31, 1999 and 1998, due to Parent Corporation includes $10,641
and $17,930 due on demand and $25,338 and $34,947 of notes payable which
bear interest and mature on October 1, 2006. These notes may be prepaid in
whole or in part at any time without penalty; the issuer may not demand
payment before the maturity date. The amounts due on demand to the Parent
Corporation bear interest at the public bond rate (6.7% and 6.1% at
December 31, 1999 and 1998, respectively) while the note payable bears
interest at 5.4%.
On May 4, 1999, the Company issued a $175,000 subordinated note to GWL&A
Financial, the proceeds of which were used for general corporate purposes.
The subordinated note bears interest at 7.25% and is due June 30, 2048.
Payments of principal and interest under this subordinated note shall be
made only with prior written approval of the Commissioner of Insurance of
the State of Colorado. Payments of principal and interest on this
subordinated note are payable only out of surplus funds of the Company and
only at such time as the financial condition of the Company is such that at
the time of payment of principal or interest, its surplus after the making
of any such payment would exceed the greater of $1,500 or 1.25 times the
company action level amount as required by the most recent risk based
capital calculations.
Interest expense attributable to these related party obligations was
$11,053, $9,891, and $9,758 for the years ended December 31, 1999, 1998 and
1997, respectively.
4. REINSURANCE
In the normal course of business, the Company seeks to limit its exposure
to loss on any single insured and to recover a portion of benefits paid by
ceding risks to other insurance enterprises under excess coverage and
co-insurance contracts. The Company retains a maximum of $1.5 million of
coverage per individual life.
Reinsurance contracts do not relieve the Company from its obligations to
policyholders. Failure of reinsurers to honor their obligations could
result in losses to the Company. The Company evaluates the financial
condition of its reinsurers and monitors concentrations of credit risk
arising from similar geographic regions, activities, or economic
characteristics of the reinsurers to minimize its exposure to significant
losses from reinsurer insolvencies. At December 31, 1999 and 1998, the
reinsurance receivable had a carrying value of $173,322 and $192,958,
respectively.
The following schedule details life insurance in force and life and
accident/health premiums:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Ceded Assumed Percentage
Primarily to Primarily of Amount
Gross the Parent from Other Net Assumed
Amount Corporation Companies Amount to Net
--------------- ---------------- ---------------- --------------- -------------
December 31, 1999:
Life insurance in force:
Individual $ 35,362,934 $ 5,195,961 $ 8,467,877 $ 38,634,850 21.9%
Group 80,717,198 2,212,741 82,929,939 2.7%
--------------- ---------------- ---------------- ----------------
Total $ 116,080,132 $ 5,195,961 $ 10,680,618 $ 121,564,789
=============== ================ ================ ================
Premium Income:
Life insurance $ 306,101 $ 27,399 $ 46,715 $ 325,417 14.4%
Accident/health 801,755 58,247 79,753 823,261 9.7%
--------------- ---------------- ---------------- ----------------
Total $ 1,107,856 $ 85,646 $ 126,468 $ 1,148,678
=============== ================ ================ ================
December 31, 1998:
Life insurance in force:
Individual $ 34,017,379 $ 4,785,079 $ 8,948,442 $ 38,180,742 23.4%
Group 81,907,539 2,213,372 84,120,911 2.6%
--------------- ---------------- ---------------- ----------------
Total $ 115,924,918 $ 4,785,079 $ 11,161,814 $ 122,301,653
=============== ================ ================ ================
Premium Income:
Life insurance $ 352,710 $ 24,720 $ 65,452 $ 393,442 16.6%
Accident/health 571,992 61,689 74,284 584,587 12.7%
--------------- ---------------- ---------------- ----------------
Total $ 924,702 $ 86,409 $ 139,736 $ 978,029
=============== ================ ================ ================
December 31, 1997:
Life insurance in force:
Individual $ 24,598,679 $ 4,040,398 $ 3,667,235 $ 24,225,516 15.1%
Group 51,179,343 2,031,477 53,210,820 3.8%
--------------- ---------------- ---------------- ----------------
Total $ 75,778,022 $ 4,040,398 $ 5,698,712 $ 77,436,336
=============== ================ ================ ================
Premium Income:
Life insurance $ 320,456 $ (127,388) $ 19,923 $ 467,767 4.3%
Accident/health 341,837 32,645 34,994 344,186 10.2%
--------------- ---------------- ---------------- ----------------
Total $ 662,293 $ (94,743) $ 54,917 $ 811,953
=============== ================ ================ ================
</TABLE>
5. NET INVESTMENT INCOME AND NET REALIZED GAINS (LOSSES) ON INVESTMENTS
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Net investment income is summarized as follows:
Years Ended December 31,
---------------------------------------------------
1999 1998 1997
--------------- --------------- ---------------
Investment income:
Fixed maturities and short-term investments $ 636,946 $ 638,079 $ 633,975
Mortgage loans on real estate 88,033 110,170 118,274
Real estate 19,618 20,019 20,990
Policy loans 167,109 180,933 194,826
Other 138 285 18
--------------- --------------- ---------------
911,844 949,486 968,083
Investment expenses, including interest on
amounts charged by the related parties
of $11,053, $9,891, and $9,758 35,898 52,126 86,410
--------------- --------------- ---------------
Net investment income $ 875,946 $ 897,360 $ 881,673
=============== =============== ===============
Net realized gains (losses) on investments are as follows:
Years Ended December 31,
---------------------------------------------------
1999 1998 1997
--------------- --------------- ---------------
Realized gains (losses):
Fixed maturities $ (7,858) $ 38,391 $ 15,966
Mortgage loans on real estate 1,429 424 1,081
Real estate 513 363
Provisions 7,000 (642) (7,610)
--------------- --------------- ---------------
Net realized gains on investments $ 1,084 $ 38,173 $ 9,800
=============== =============== ===============
6. SUMMARY OF INVESTMENTS
Fixed maturities owned at December 31, 1999 are summarized as follows:
Gross Gross Estimated
Amortized Unrealized Unrealized Fair Carrying
Cost Gains Losses Value Value
------------ -------------- ------------- ------------ ------------
Held-to-Maturity:
U.S. Treasury Securities
and obligations of U.S.
Government Agencies $ 63,444 $ 448 $ 687 $ 63,205 $ 63,444
Collateralized mortgage
obligations 115,357 9,360 105,997 115,357
Public utilities 223,705 2,773 3,011 223,467 223,705
Corporate bonds 1,724,915 19,179 30,753 1,713,341 1,724,915
Foreign governments 10,000 213 10,213 10,000
State and municipalities 123,160 738 1,540 122,358 123,160
------------ -------------- ------------- ------------ ------------
$ 2,260,581 $ 23,351 $ 45,351 $ 2,238,581 $ 2,260,581
============ ============== ============= ============ ============
Gross Gross Estimated
Amortized Unrealized Unrealized Fair Carrying
Cost Gains Losses Value Value
------------ -------------- ------------- ------------ ------------
Available-for-Sale:
U.S. Treasury Securities
and obligations of U.S.
Government Agencies:
Collateralized mortgage
obligations $ 752,130 $ 2,342 $ 21,459 $ 733,013 $ 733,013
Direct mortgage pass-
through certificates 304,099 1,419 11,704 293,814 293,814
Other 178,142 77 1,431 176,788 176,788
Collateralized mortgage
obligations 909,105 1,183 39,980 870,308 870,308
Public utilities 468,087 1,106 14,242 454,951 454,951
Corporate bonds 3,929,160 24,287 148,923 3,804,524 3,804,524
Foreign governments 41,224 654 1,256 40,622 40,622
State and municipalities 371,436 108 17,642 353,902 353,902
------------ -------------- ------------- ------------ ------------
$ 6,953,383 $ 31,176 $ 256,637 $ 6,727,922 $ 6,727,922
============ ============== ============= ============ ============
Fixed maturities owned at December 31, 1998 are summarized as follows:
Gross Gross Estimated
Amortized Unrealized Unrealized Fair Carrying
Cost Gains Losses Value Value
------------ -------------- ------------- ------------ ------------
Held-to-Maturity:
U.S. Treasury Securities
and obligations of U.S.
Government Agencies $ 34,374 $ 1,822 $ $ 36,196 $ 34,374
Collateralized mortgage
obligations 10,135 194 9,941 10,135
Public utilities 213,256 12,999 460 225,795 213,256
Corporate bonds 1,809,957 78,854 3,983 1,884,828 1,809,957
Foreign governments 10,133 782 10,915 10,133
State and municipalities 121,963 9,298 131,261 121,963
------------ -------------- ------------- ------------ ------------
$ 2,199,818 $ 103,755 $ 4,637 $ 2,298,936 $ 2,199,818
============ ============== ============= ============ ============
Gross Gross Estimated
Amortized Unrealized Unrealized Fair Carrying
Cost Gains Losses Value Value
------------ -------------- ------------- ------------ ------------
Available-for-Sale:
U.S. Treasury Securities
and obligations of U.S.
Government Agencies:
Collateralized mortgage
obligations $ 863,479 $ 39,855 $ 1,704 $ 901,630 $ 901,630
Direct mortgage pass-
through certificates 467,100 4,344 692 470,752 470,752
Other 191,138 1,765 788 192,115 192,115
Collateralized mortgage
obligations 926,797 16,260 1,949 941,108 941,108
Public utilities 464,096 14,929 36 478,989 478,989
Corporate bonds 3,557,209 123,318 17,420 3,663,107 3,663,107
Foreign governments 56,505 2,732 59,237 59,237
State and municipalities 226,208 4,588 1,008 229,788 229,788
------------ -------------- ------------- ------------ ------------
$ 6,752,532 $ 207,791 $ 23,597 $ 6,936,726 $ 6,936,726
============ ============== ============= ============ ============
</TABLE>
The collateralized mortgage obligations consist primarily of sequential and
planned amortization classes with final stated maturities of two to thirty
years and average lives of less than one to fifteen years. Prepayments on
all mortgage-backed securities are monitored monthly and amortization of
the premium and/or the accretion of the discount associated with the
purchase of such securities is adjusted by such prepayments.
See Note 8 for additional information on policies regarding estimated fair
value of fixed maturities.
The amortized cost and estimated fair value of fixed maturity investments
at December 31, 1999, by projected maturity, are shown below. Actual
maturities will likely differ from these projections because borrowers may
have the right to call or prepay obligations with or without call or
prepayment penalties.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Held-to-Maturity Available-for-Sale
------------------------------------- ------------------------------------
Amortized Estimated Amortized Estimated
Cost Fair Value Cost Fair Value
----------------- ----------------- ----------------- ----------------
Due in one year or less $ 221,172 $ 220,644 $ 323,466 $ 334,701
Due after one year
through five years 945,199 941,685 1,286,402 1,251,690
Due after five years
through ten years 684,729 677,531 716,353 684,513
Due after ten years 118,170 121,921 690,073 650,432
Mortgage-backed
securities 115,357 105,997 1,965,334 1,897,135
Asset-backed securities 175,954 170,803 1,971,755 1,909,451
----------------- ----------------- ----------------- ----------------
$ 2,260,581 $ 2,238,581 $ 6,953,383 $ 6,727,922
================= ================= ================= ================
</TABLE>
Proceeds from sales of securities available-for-sale were $3,176,802,
$6,169,678, and $3,174,246 during 1999, 1998, and 1997, respectively. The
realized gains on such sales totaled $10,080, $41,136, and $20,543 for
1999, 1998, and 1997, respectively. The realized losses totaled $19,720,
$8,643, and $10,643 for 1999, 1998, and 1997, respectively. During the
years 1999, 1998, and 1997, held-to-maturity securities with and amortized
cost of $0, $9,920 and $0 were sold due to deterioration with insignificant
gains and losses.
At December 31, 1999 and 1998, pursuant to fully collateralized securities
lending arrangements, the Company had loaned $0 and $115,168 of fixed
maturities, respectively.
The Company engages in hedging activities to manage interest rate, market
and foreign exchange risk. The following table summarizes the 1999
financial hedge instruments:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Notional Strike/Swap
December 31, 1999 Amount Rate Maturity
----------------------------- --------------- ------------------------------ -------------------------
Interest Rate Caps $ 1,362,000 7.64% - 11.82% (CMT) 6/00 - 12/04
Interest Rate Swaps 217,528 4.94%-6.8% 02/00 - 12/06
Foreign Currency
Exchange Contracts 19,478 N/A 03/00 - 07/06
Equity Swap 104,152 5.15% - 5.93% 01/01
Options 54,100 Various 01/02 - 12/02
The following table summarizes the 1998 financial hedge instruments:
Notional Strike/Swap
December 31, 1998 Amount Rate Maturity
----------------------------- ---------------- ------------------------------ -------------------------
Interest Rate Floor $ 100,000 4.50% (LIBOR) 11/99
Interest Rate Caps 1,070,000 6.75% - 11.82% (CMT) 12/99 - 10/03
Interest Rate Swaps 242,451 4.95% - 9.35% 08/99 - 02/03
Foreign Currency
Exchange Contracts 34,123 N/A 05/99 - 07/06
Equity Swap 95,652 4.00% 12/99
LIBOR - London Interbank Offered Rate
CMT - Constant Maturity Treasury Rate
</TABLE>
The Company has established specific investment guidelines designed to
emphasize a diversified and geographically dispersed portfolio of mortgages
collateralized by commercial and industrial properties located in the
United States. The Company's policy is to obtain collateral sufficient to
provide loan-to-value ratios of not greater than 75% at the inception of
the mortgages. At December 31, 1999, approximately 34% of the Company's
mortgage loans were collateralized by real estate located in California.
The following represents impairments and other information with respect to
impaired mortgage loans:
<TABLE>
<S> <C> <C>
1999 1998
====================================================================== ---------------- ----------------
======================================================================
Loans with related allowance for credit losses of
======================================================================
$14,727 and $2,492 $ 25,877 $ 13,192
======================================================================
Loans with no related allowance for credit losses 17,880 10,420
======================================================================
Average balance of impaired loans during the year 43,866 31,193
======================================================================
Interest income recognized (while impaired) 1,877 2,308
======================================================================
Interest income received and recorded (while impaired)
======================================================================
using the cash basis method of recognition 1,911 2,309
======================================================================
</TABLE>
As part of an active loan management policy and in the interest of
maximizing the future return of each individual loan, the Company may from
time to time modify the original terms of certain loans. These restructured
loans, all performing in accordance with their modified terms, aggregated
$75,691 and $52,913 at December 31, 1999 and 1998, respectively.
The following table presents changes in allowance for credit losses:
<TABLE>
<S> <C> <C> <C>
1999 1998 1997
--------------- --------------- ---------------
Balance, beginning of year $ 67,242 $ 67,242 $ 65,242
Provision for loan losses (7,000) 642 4,521
Chargeoffs - (787) (2,521)
Recoveries 1,000 145
--------------- --------------- ---------------
Balance, end of year $ 61,242 $ 67,242 $ 67,242
=============== =============== ===============
</TABLE>
7. COMMERCIAL PAPER
The Company has a commercial paper program that is partially supported by a
$50,000 standby letter-of-credit. At December 31, 1999, no commercial paper
was outstanding. At December 31, 1998, commercial paper outstanding had
maturities ranging from 69 to 118 days and interest rates ranging from
5.10% to 5.22%.
8. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
<TABLE>
<S> <C>
December 31,
---------------------------------------------------------------------
1999 1998
--------------------------------- --------------------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
--------------- -------------- -------------- --------------
ASSETS:
Fixed maturities and
short-term investments $ 9,229,307 $ 9,207,307 $ 9,556,713 $ 9,655,831
Mortgage loans on real
Estate 974,645 968,964 1,133,468 1,160,568
Policy loans 2,681,132 2,681,132 2,858,673 2,858,673
Common stock 69,240 69,240 48,640 48,640
LIABILITIES:
Annuity contract reserves
without life contingencies 4,468,685 4,451,465 4,908,964 4,928,800
Policyholders' funds 185,623 185,623 181,779 181,779
Due to Parent Corporation 35,979 33,590 52,877 52,877
Due to GWL&A Financial 175,035 137,445 - - - -
Repurchase agreements 80,579 80,579 244,258 244,258
Commercial paper - - - - 39,731 39,731
</TABLE>
<TABLE>
<S> <C>
December 31,
---------------------------------------------------------------------
1999 1998
--------------------------------- --------------------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
--------------- -------------- -------------- --------------
HEDGE CONTRACTS:
Interest rate floor - - - - 17 17
Interest rate caps 4,140 4,140 971 971
Interest rate swaps (1,494) (1,494) 6,125 6,125
Foreign currency exchange
contracts (10) (10) 689 689
Equity swap (7,686) (7,686) (8,150) (8,150)
Options (6,220) (6,220) - - - -
</TABLE>
The estimated fair values of financial instruments have been determined
using available information and appropriate valuation methodologies.
However, considerable judgement is required to interpret market data to
develop estimates of fair value. Accordingly, the estimates presented are
not necessarily indicative of the amounts the Company could realize in a
current market exchange. The use of different market assumptions and/or
estimation methodologies may have a material effect on the estimated fair
value amounts.
The estimated fair value of fixed maturities that are publicly traded are
obtained from an independent pricing service. To determine fair value for
fixed maturities not actively traded, the Company utilized discounted cash
flows calculated at current market rates on investments of similar quality
and term.
Mortgage loans fair value estimates generally are based on discounted cash
flows. A discount rate "matrix" is incorporated whereby the discount rate
used in valuing a specific mortgage generally corresponds to that
mortgage's remaining term. The rates selected for inclusion in the discount
rate "matrix" reflect rates that the Company would quote if placing loans
representative in size and quality to those currently in the portfolio.
Policy loans accrue interest generally at variable rates with no fixed
maturity dates and, therefore, estimated fair value approximates carrying
value.
The fair value of annuity contract reserves without life contingencies is
estimated by discounting the cash flows to maturity of the contracts,
utilizing current crediting rates for similar products.
The estimated fair value of policyholders' funds is the same as the
carrying amount as the Company can change the crediting rates with 30 days
notice.
The estimated fair value of due to Parent Corporation is based on
discounted cash flows at current market rates on high quality investments.
The fair value of due to GWL&A Financial reflects the price determined in
the public market at December 31, 1999.
The carrying value of repurchase agreements and commercial paper is a
reasonable estimate of fair value due to the short-term nature of the
liabilities.
The estimated fair value of financial hedge instruments, all of which are
held for other than trading purposes, is the estimated amount the Company
would receive or pay to terminate the agreement at each year-end, taking
into consideration current interest rates and other relevant factors.
Included in the net loss position for interest rates swaps are $772 and $0
of unrealized losses in 1999 and 1998, respectively. Included in the net
gain position for foreign currency exchange contracts are $518 and $932 of
loss exposures in 1999 and 1998, respectively.
The carrying amounts for receivables and liabilities reported in the
balance sheet approximate fair value due to their short term nature.
9. EMPLOYEE BENEFIT PLANS
Effective January 1, 1997, all employees of the U.S. operations of the
Parent Corporation and the related benefit plans were transferred to the
Company. See Note 3 for further discussion.
The Company's Parent had previously accounted for the pension plan under
the Canadian Institute of Chartered Accountants (CICA) guidelines and had
recorded a prepaid pension asset of $19,091. As U.S. generally accepted
accounting principles do not materially differ from these CICA guidelines
and the transfer was between related parties, the prepaid pension asset was
transferred at carrying value. As a result, the Company recorded the
following effective January 1, 1997:
<TABLE>
<S> <C> <C>
Prepaid pension cost $ 19,091 Undistributed earnings on $ 3,608
====================================
Participating business
====================================
Stockholder's equity 15,483
====================================
---------------- ----------------
$ 19,091 $ 19,091
==================================== ================ ================
</TABLE>
The following table summarizes changes for the three years December 31,
1999, in the benefit obligations and in plan assets for the Company's
defined benefit pension plan and post-retirement medical plan. There is no
additional minimum pension liability required to be recognized. There were
no amendments to the plans due to the acquisition of Alta.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Post-Retirement
Pension Benefits Medical Plan
-------------------------------------- --------------------------------------
1999 1998 1997 1999 1998 1997
----------- ---------- ----------- ----------- ---------- ----------
Change in benefit obligation
Benefit obligation at beginning
of year $ 131,305 $ 115,057 $ 96,417 $ 19,944 $ 19,454 $ 16,160
Service cost 7,853 6,834 5,491 2,186 1,365 1,158
Interest cost 8,359 7,927 7,103 1,652 1,341 1,191
Addition of former Alta employees 4,155
Actuarial (gain) loss (22,363) 5,117 9,470 3,616 (1,613) 1,500
Prior service for former Alta
employees 2,471
Benefits paid (3,179) (3,630) (3,424) (641) (603) (555)
----------- ---------- ----------- ----------- ---------- ----------
Benefit obligation at end of year 126,130 131,305 115,057 29,228 19,944 19,454
----------- ---------- ----------- ----------- ---------- ----------
Change in plan assets
Fair value of plan assets at
beginning of year $ 183,136 $ 162,879 $ 138,221 $ $ $
Actual return on plan assets 12,055 23,887 28,082
Addition of former Alta employees
and other adjustments 81
Benefits paid (3,179) (3,630) (3,424)
----------- ---------- ----------- ----------- ---------- ----------
Fair value of plan assets at
end of year 192,093 183,136 162,879
----------- ---------- ----------- ----------- ---------- ----------
Funded status 65,963 51,831 47,822 (29,228) (19,944) (19,454)
Unrecognized net actuarial
(gain) loss (30,161) (11,405) (6,326) 3,464 (113) 1,500
Unrecognized prior service cost 3,614 2,310
Unrecognized net obligation or
(asset) at transition (18,170) (19,684) (21,198) 13,736 14,544 15,352
----------- ---------- ----------- ----------- ---------- ----------
Prepaid (accrued) benefit cost $ 21,246 $ 20,742 $ 20,298 $ (9,718) $ (5,513) $ (2,602)
=========== ========== =========== =========== ========== ==========
Weighted-average
assumptions as of
December 31
Discount rate 7.50% 6.50% 7.00% 7.50% 6.50% 7.00%
Expected return on plan assets 8.50% 8.50% 8.50% 8.50% 8.50% 8.50%
Rate of compensation increase 5.00% 4.00% 4.50% 5.00% 4.00% 4.50%
Components of net
periodic benefit
Cost
Service cost $ 7,853 $ 6,834 $ 5,491 $ 2,186 $ 1,365 $ 1,158
Interest cost 8,360 7,927 7,103 1,652 1,341 1,191
Expected return on plan assets (15,664) (13,691) (12,286)
Amortization of transition (1,514) (1,514) (1,514) 808 808 808
obligation
Amortization of unrecognized prior
service cost 541 162
Amortization of gain from earlier
periods (80) 38
----------- ---------- ----------- ---------- ----------
----------- ---------- ----------- ----------- ---------- ----------
Net periodic (benefit) cost $ (504) $ (444) $ (1,206) $ 4,846 $ 3,514 $ 3,157
=========== ========== =========== =========== ========== ==========
</TABLE>
The Company-sponsored post-retirement medical plan (medical plan) provides
health benefits to retired employees. The medical plan is contributory and
contains other cost sharing features, which may be adjusted annually for
the expected general inflation rate. The Company's policy will be to fund
the cost of the medical plan benefits in amounts determined at the
discretion of management. The Company made no contributions to this plan in
1999, 1998, or 1997.
Assumed health care cost trend rates have a significant effect on the
amounts reported for the medical plan. For measurement purposes, a 7.5%
annual rate of increase in the per capita cost of covered health care
benefits was assumed. A one-percentage-point change in assumed health care
cost trend rates would have the following effects:
<TABLE>
<S> <C> <C>
1-Percentage 1-Percentage
Point Point
Increase Decrease
-------------------- --------------------
Increase (decrease) on total of service and interest cost
on components $ 1,678 $ (1,285)
Increase (decrease) on post-retirement benefit obligation 7,897 (6,186)
</TABLE>
The Company sponsors a defined contribution 401(k) retirement plan which
provides eligible participants with the opportunity to defer up to 15% of
base compensation. The Company matches 50% of the first 5% of participant
pre-tax contributions. For employees hired after January 1, 1999, the
Company matches 50% of the first 8% of participant pre-tax contributions.
Company contributions for the years ended December 31, 1999, 1998, and 1997
totaled $5,504, $3,915, and $3,475, respectively.
The Company has a deferred compensation plan providing key executives with
the opportunity to participate in an unfunded, deferred compensation
program. Under the program, participants may defer base compensation and
bonuses, and earn interest on their deferred amounts. The program is not
qualified under Section 401 of the Internal Revenue Code. The total of
participant deferrals, which is reflected in other liabilities, was
$17,367, $16,102, and $13,952 for years ending December 31, 1999, 1998, and
1997, respectively. The participant deferrals earn interest at a rate based
on the average ten-year composite government securities rate plus 1.5%. The
interest expense related to the plan for the years ending December 31,
1999, 1998, and 1997 were $1,231, $1,185, and $1,019, respectively.
The Company also provides a supplemental executive retirement plan (SERP)
to certain key executives. This plan provides key executives with certain
benefits upon retirement, disability, or death based upon total
compensation. The Company has purchased individual life insurance policies
with respect to each employee covered by this plan. The Company is the
owner and beneficiary of the insurance contracts. The incremental expense
for this plan for 1999, 1998, and 1997 was $3,002, $2,840, and $2,531,
respectively. The total liability of $14,608, $11,323, and $8,828 as of
December 31, 1999, 1998, and 1997 is included in other liabilities.
10. FEDERAL INCOME TAXES
The following is a reconciliation between the federal income tax rate and
the Company's effective rate:
<TABLE>
<S> <C> <C> <C>
1999 1998 1997
------------ ------------- ------------
Federal tax rate 35.0 % 35.0 % 35.0 %
Change in tax rate resulting from:
Settlement of Parent tax exposures (5.9) (20.2)
Provision for contingencies (0.5) 7.7
Policyholder share of earnings 1.7 0.7 0.6
Other, net (1.5) (2.3) 0.8
------------ ------------- ------------
Total 28.8 % 33.4 % 23.9 %
============ ============= ============
</TABLE>
The Company's income tax provision was favorably impacted in 1999 and 1997
by releases of contingent liabilities relating to taxes of the Parent
Corporation's U.S. branch associated with blocks of business that were
transferred from the Parent Corporation's U.S. branch to the Company from
1989 to 1993; the Company had agreed to the transfer of these tax
liabilities as part of the transfer of this business. The release recorded
in 1999 reflected the resolution of certain tax issues with the Internal
Revenue Service (IRS) relating to the 1992 - 1993 audit years. The release
recorded in 1997 reflected the resolution of certain tax issues with the
IRS relating to the 1990-1991 audit years. The release totaled $17,150 for
1999 and $42,150 for 1997; however, $8,900 of the 1999 release and $15,100
of the 1997 release was attributable to participating policyholders and
therefore had no effect on the net income of the Company since that amount
was credited to the provision for policyholders' share of earnings
(losses).
In addition to this release of contingent tax liabilities, the Company's
income tax provision for 1997 also reflects increases for other contingent
items relating to open tax years where the Company determined it was
probable that additional taxes could be owed based on changes in facts and
circumstances. The increase in 1997 was $16,000, of which $10,100 was
attributable to participating policyholders and therefore had no effect on
the net income of the Company. This increase in contingent tax liabilities
has been reflected as a component of the deferred income tax provisions as
the Company does not expect near term resolution of these contingencies.
Excluding the effect of the 1999 and 1997 tax items discussed above, the
effective tax rate for 1999 and 1997 was 35.2% and 36.4%.
Temporary differences which give rise to the deferred tax assets and
liabilities as of December 31, 1999 and 1998 are as follows:
<TABLE>
<S> <C> <C>
1999 1998
--------------------------------- ------------------------------
Deferred Deferred Deferred Deferred
Tax Tax Tax Tax
Asset Liability Asset Liability
--------------- --------------- -------------- -------------
Policyholder reserves $ 131,587 $ $ 143,244 $
Deferred policy acquisition costs 49,455 39,933
Deferred acquisition cost proxy
tax 103,529 100,387
Investment assets 69,561 19,870
Net operating loss carryforwards 444 2,867
Other 582 6,566
--------------- --------------- -------------- -------------
Subtotal 305,121 50,037 253,064 59,803
Valuation allowance (1,761) (1,778)
--------------- --------------- -------------- -------------
Total Deferred Taxes $ 303,360 $ 50,037 $ 251,286 $ 59,803
=============== =============== ============== =============
</TABLE>
Amounts included in investment assets above include $58,711 and $(34,556)
related to the unrealized gains/(losses) on the Company's fixed maturities
available-for-sale at December 31, 1999 and 1998, respectively.
The Company will file a consolidated tax return for 1999. Losses incurred
by subsidiaries in prior years cannot be offset against operating income of
the Company. At December 31, 1999, the Company's subsidiaries had
approximately $1,271 of net operating loss carryforwards, expiring through
the year 2014. The tax benefit of subsidiaries' net operating loss
carryforwards are included in the deferred tax assets at December 31, 1999
and 1998, respectively.
The Company's valuation allowance was increased (decreased) in 1999, 1998,
and 1997 by $(17), $(1,792), and $34, respectively, as a result of the
re-evaluation by management of future estimated taxable income in its
subsidiaries.
Under pre-1984 life insurance company income tax laws, a portion of life
insurance company gain from operations was not subject to current income
taxation but was accumulated, for tax purposes, in a memorandum account
designated as "policyholders' surplus account." The aggregate accumulation
in the account is $7,742 and the Company does not anticipate any
transactions which would cause any part of the amount to become taxable.
Accordingly, no provision has been made for possible future federal income
taxes on this accumulation.
11. COMPREHENSIVE INCOME
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 130 "Reporting Comprehensive Income". This
Statement established new rules for reporting and display of comprehensive
income and its components; however, the adoption of this Statement had no
impact on the Company's net income or stockholder's equity. This Statement
requires unrealized gains or losses on the Company's available-for-sale
securities and related offsets for reserves and deferred policy acquisition
costs, which prior to adoption were reported separately in stockholder's
equity, to be included in other comprehensive income. The 1997 financial
statements have been reclassified to conform to the requirements of
Statement No. 130.
Other comprehensive loss at December 31, 1999 is summarized as follows:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Before-Tax Tax (Expense) Net-of-Tax
==================================================
Amount or Benefit Amount
================================================== ---------------- ---------------- -----------------
Unrealized gains on available-for-sale
==================================================
securities:
==================================================
Unrealized holding gains (losses) arising
==================================================
during the period $ (303,033) $ 106,061 $ (196,972)
==================================================
Less: reclassification adjustment for
==================================================
(gains) losses realized in net income (9,958) 3,485 (6,473)
==================================================
---------------- ---------------- -----------------
Net unrealized gains (losses) (312,991) 109,546 (203,445)
==================================================
==================================================
Reserve and DAC adjustment 87,729 (30,705) 57,024
---------------- ---------------- -----------------
---------------- ---------------- -----------------
Other comprehensive loss $ (225,262) $ 78,841 $ (146,421)
================================================== ================ ================ =================
</TABLE>
<TABLE>
<S> <C> <C>
Other comprehensive income at December 31, 1998 is summarized as follows:
Before-Tax Tax (Expense) Net-of-Tax
Amount or Benefit Amount
---------------- ---------------- -- -----------------
Unrealized gains on available-for-sale
securities:
Unrealized holding gains (losses) arising
during the period $ 39,430 $ (13,800) $ 25,630
Less: reclassification adjustment for
(gains) losses realized in net income (14,350) 5,022 (9,328)
---------------- ---------------- -----------------
Net unrealized gains 25,080 (8,778) 16,302
Reserve and DAC adjustment (11,614) 4,065 (7,549)
---------------- ---------------- -----------------
---------------- ---------------- -----------------
Other comprehensive income $ 13,466 $ (4,713) $ 8,753
================ ================ =================
Other comprehensive income at December 31, 1997 is summarized as follows:
Before-Tax Tax (Expense) Net-of-Tax
==================================================
Amount or Benefit Amount
================================================== ---------------- ---------------- -----------------
Unrealized gains on available-for-sale
==================================================
securities:
==================================================
Unrealized holding gains (losses) arising
==================================================
during the period $ 80,821 $ (28,313) $ 52,508
==================================================
Less: reclassification adjustment for
==================================================
(gains) losses realized in net income 2,012 (704) 1,308
==================================================
---------------- ---------------- -----------------
Net unrealized gains 82,833 (29,017) 53,816
==================================================
==================================================
Reserve and DAC adjustment (24,554) 8,594 (15,960)
---------------- ---------------- -----------------
---------------- ---------------- -----------------
Other comprehensive income $ 58,279 $ (20,423) $ 37,856
================================================== ================ ================ =================
</TABLE>
12. STOCKHOLDER'S EQUITY, DIVIDEND RESTRICTIONS, AND OTHER MATTERS
Effective September 30, 1998, the Company purchased all of its outstanding
series of preferred stock, which were owned by the Parent Corporation, for
$121,800. At December 31, 1999 and 1998, the Company has 1,500 authorized
shares each of Series A, Series B, Series C and Series D cumulative
preferred stock; and 2,000,000 authorized shares of non-cumulative
preferred stock.
The Company's net income and capital and surplus, as determined in
accordance with statutory accounting principles and practices for December
31 are as follows:
1999 1998 1997
-------------- --------------- ---------------
(Unaudited)
Net income 253,123 $ 225,863 $ 181,312
Capital and surplus 1,007,245 727,124 759,429
The maximum amount of dividends which can be paid to stockholders by
insurance companies domiciled in the State of Colorado are subject to
restrictions relating to statutory surplus and statutory net gain from
operations. Statutory surplus and net gains from operations at December 31,
1999 were $1,007,245 and $245,148 (unaudited), respectively. The Company
should be able to pay up to $245,148 (unaudited) of dividends in 2000.
Dividends of $0, $6,692, and $8,854 were paid on preferred stock in 1999,
1998, and 1997, respectively. In addition, dividends of $92,053, $73,344,
and $62,540 were paid on common stock in 1999, 1998, and 1997,
respectively. Dividends are paid as determined by the Board of Directors.
13. STOCK OPTIONS
Great-West Lifeco Inc. (Lifeco) is the parent of the Parent Corporation.
Lifeco has a stock option plan (the Lifeco plan) that provides for the
granting of options for common shares of Lifeco to certain officers and
employees of Lifeco and its subsidiaries, including the Company. Options
may be awarded at no less than the market price on the date of the grant.
Termination of employment prior to vesting results in forfeiture of the
options, unless otherwise determined by a committee that administers the
Lifeco plan. As of December 31, 1999, 1998, and 1997, stock available for
award to Company employees under the Lifeco plan aggregated 885,150,
1,424,400, and 3,440,000 shares.
The plan provides for the granting of options with varying terms and
vesting requirements. The basic options under the plan become exercisable
twenty percent per year commencing on the first anniversary of the grant
and expire ten years from the date of grant. Options granted in 1998 and
1997 to Company employees totaling 278,000 and 1,832,000, respectively,
become exercisable if certain long-term cumulative financial targets are
attained. If exercisable, the exercise period runs from April 1, 2002 to
June 26, 2007. Additional options granted in 1998 totaling 380,000 become
exercisable if certain sales or financial targets are attained. During 1999
and 1998, 11,250 and 30,000 of these options vested and accordingly, the
Company recognized compensation expense of $23 and $116, respectively. If
exercisable, the exercise period runs from the date that the particular
options become exercisable until January 27, 2008.
The following table summarizes the status of, and changes in, Lifeco
options granted to Company employees which are outstanding and the
weighted-average exercise price (WAEP) for the years ended December 31. As
the options granted relate to Canadian stock, the values, which are
presented in U.S. dollars, will fluctuate as a result of exchange rate
fluctuations:
<TABLE>
<S> <C> <C> <C>
1999 1998 1997
-------------------------- -------------------------- -------------------------
Options WAEP Options WAEP Options WAEP
------------- ---------- ------------- ---------- ------------- ---------
Outstanding, Jan. 1, 6,544,824 $ 8.07 5,736,000 $ 7.71 4,104,000 $ 6.22
Granted 575,500 16.48 988,000 13.90 1,932,000 11.56
Exercised 234,476 5.69 99,176 5.93 16,000 5.95
Expired or canceled 318,750 13.81 80,000 13.05 284,000 6.17
------------- ---------- ------------- ---------- ------------- ---------
Outstanding, Dec. 31, 6,567,098 9.04 6,544,824 8.07 5,736,000 7.71
============= ========== ============= ========== ============= =========
Options exercisable
at year-end 2,215,998 $ 6.31 1,652,424 $ 5.72 760,800 $ 5.96
============= ========== ============= ========== ============= =========
Weighted average fair
value of options
granted during year $ 5.23 $ 4.46 $ 2.83
============= ============= =============
The following table summarizes the range of exercise prices for outstanding
Lifeco common stock options granted to Company employees at December 31,
1999:
Outstanding Exercisable
======================== ------------------------------------------------ ---------------------------------
Average Average
========================
Exercise Average Exercise Exercise
========================
Price Range Options Life Price Options Price
------------------------ ---------------- ------------ ------------- ---------------- --------------
$ 5.87 - 7.80 3,554,348 6.63 $ 5.95 2,108,748 $ 5.92
========================
$11.25 - 15.81 2,842,000 7.86 $ 12.37 107,250 $ 14.03
========================
$16.53 - 18.65 170,500 9.18 17.93 - -
========================
</TABLE>
Of the exercisable Lifeco options, 2,174,748 relate to basic option grants
and 41,250 relate to variable grants.
Power Financial Corporation (PFC), which is the parent corporation of
Lifeco, has a stock option plan (the PFC plan) that provides for the
granting of options for common shares of PFC to key employees of PFC and
its affiliates. Prior to the creation of the Lifeco plan in April 1996,
certain officers of the Company participated in the PFC plan in Canada.
Under the PFC plan, options may be awarded at no less than the market price
on the date of the grant. Termination of employment prior to vesting
results in forfeiture of the options, unless otherwise determined by a
committee that administers the PFC plan. As of December 31, 1999, 1998 and
1997, stock available for award under the PFC plan aggregated 4,340,800,
4,400,800, and 4,400,800 shares.
Options granted to officers of the Company under the PFC plan became
exercisable twenty percent per year commencing on the date of the grant and
expire ten years from the date of grant.
The following table summarizes the status of, and changes in, PFC options
granted to Company officers which remain outstanding and the
weighted-average exercise price (WAEP) for the years ended December 31. As
the options granted relate to Canadian stock, the values, which are
presented in U.S. dollars, will fluctuate as a result of exchange rate
fluctuations:
<TABLE>
<S> <C> <C> <C>
1999 1998 1997
-------------------------- -------------------------- -------------------------
Options WAEP Options WAEP Options WAEP
------------- ---------- ------------- ---------- ------------- ---------
Outstanding, Jan. 1, 355,054 $ 2.89 1,076,000 $ 3.05 1,329,200 $ 3.14
Exercised 70,000 2.28 720,946 2.98 253,200 2.93
------------- ---------- ------------- ---------- ------------- ---------
Outstanding, Dec. 31, 285,054 3.23 355,054 2.89 1,076,000 3.05
============= ========== ============= ========== ============= =========
Options exercisable
at year-end 285,054 $ 3.23 355,054 $ 2.89 1,076,000 $ 3.05
============= ========== ============= ========== ============= =========
</TABLE>
As of December 31, 1999, the PFC options outstanding have exercise prices
between $2.38 and $3.65 and a weighted-average remaining contractual life
of 1.7 years.
The Company accounts for stock-based compensation using the intrinsic value
method prescribed by APB No. 25, "Accounting for Stock Issued to
Employees", under which compensation expenses for stock options are
generally not recognized for stock option awards granted at or above fair
market value. Had compensation expense for the Company's stock option plan
been determined based upon fair values at the grant dates for awards under
the plan in accordance with SFAS No. 123, "Accounting for Stock-Based
Compensation", the Company's net income would have been reduced by $1,039,
$727, and $608, in 1999, 1998, and 1997, respectively. The fair value of
each option grant was estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions used for those options granted in 1999, 1998, and 1997,
respectively: dividend yields of 3.63%, 3.0% and 3.0%, expected volatility
of 32.4%, 34.05%, and 24.04%, risk-free interest rates of 6.65%, 4.79%, and
4.72%, and expected lives of 7.5 years.
14. SEGMENT INFORMATION
The Company has two reportable segments: Employee Benefits and Financial
Services. The Employee Benefits segment markets group life and health and
401(k) products to small and mid-sized corporate employers. The Financial
Services segment markets and administers savings products to public and
not-for-profit employers and individuals and offers life insurance products
to individuals and businesses.
The accounting policies of the segments are the same as those described in
Note 1. The Company evaluates performance based on profit or loss from
operations after income taxes.
The Company's reportable segments are strategic business units that offer
different products and services. They are managed separately as each
segment has unique distribution channels.
The Company's operations are not materially dependent on one or a few
customers, brokers or agents.
Summarized segment financial information for the year ended and as of
December 31 was as follows:
<TABLE>
Year ended December 31, 1999
Operations:
<S> <C> <C> <C> <C> <C> <C>
Employee Financial Total
================================================
Benefits Services U.S.
================================================ ----------------- ----------------- -----------------
Revenue:
================================================
Premium income $ 990,449 $ 172,734 $ 1,163,183
================================================
Fee income 548,580 86,567 635,147
================================================
Net investment income 80,039 795,907 875,946
================================================
Realized investment gains (losses) (1,224) 2,308 1,084
================================================ ----------------- ----------------- -----------------
Total revenue 1,617,844 1,057,516 2,675,360
================================================
Benefits and Expenses:
================================================
Benefits 789,084 792,755 1,581,839
================================================
Operating expenses 661,119 143,422 804,541
================================================ ----------------- ----------------- -----------------
Total benefits and expenses 1,450,203 936,177 2,386,380
================================================ ----------------- ----------------- -----------------
----------------- ----------------- -----------------
================================================
================================================
Net operating income before income 167,641 121,339 288,980
taxes
================================================
Income taxes 51,003 32,259 83,262
----------------- ----------------- -----------------
Net income $ 116,638 $ 89,080 $ 205,718
================================================ ================= ================= =================
Assets:
Employee Financial Total
================================================
Benefits Services U.S.
================================================ ----------------- ----------------- -----------------
Investment assets $ 1,467,464 $ 11,590,591 $ 13,058,055
================================================
Other assets 646,036 909,172 1,555,208
================================================
Separate account assets 7,244,145 5,535,871 12,780,016
================================================ ----------------- ----------------- -----------------
Total assets $ 9,357,645 $ 18,035,634 $ 27,393,279
================================================ ================= ================= =================
Year ended December 31, 1998
Operations:
Employee Financial Total
================================================
Benefits Services U.S.
================================================ ----------------- ----------------- -----------------
Revenue:
================================================
Premium income $ 746,898 $ 247,965 $ 994,863
================================================
Fee income 444,649 71,403 516,052
================================================
Net investment income 95,118 802,242 897,360
================================================
Realized investment gains (losses) 8,145 30,028 38,173
================================================ ----------------- ----------------- -----------------
Total revenue 1,294,810 1,151,638 2,446,448
================================================
Benefits and Expenses:
================================================
Benefits 590,058 872,411 1,462,469
================================================
Operating expenses 546,959 141,269 688,228
================================================ ----------------- ----------------- -----------------
Total benefits and expenses 1,137,017 1,013,680 2,150,697
================================================ ----------------- ----------------- -----------------
----------------- ----------------- -----------------
================================================
================================================
Net operating income before income 157,793 137,958 295,751
taxes
================================================
Income taxes 50,678 48,158 98,836
----------------- ----------------- -----------------
Net income $ 107,115 $ 89,800 $ 196,915
================================================ ================= ================= =================
Assets:
Employee Financial Total
================================================
Benefits Services U.S.
================================================ ----------------- ----------------- -----------------
Investment assets $ 1,434,691 $ 12,235,845 $ 13,670,536
================================================
Other assets 567,126 785,940 1,353,066
================================================
Separate account assets 5,704,313 4,395,230 10,099,543
================================================ ----------------- ----------------- -----------------
Total assets $ 7,706,130 $ 17,417,015 $ 25,123,145
================================================ ================= ================= =================
Year ended December 31, 1997
Operations:
Employee Financial Total
================================================
Benefits Services U.S.
================================================ ----------------- ----------------- -----------------
Revenue:
================================================
Premium income $ 465,143 $ 368,036 $ 833,179
================================================
Fee income 358,005 62,725 420,730
================================================
Net investment income 100,067 781,606 881,673
================================================
Realized investment gains (losses) 3,059 6,741 9,800
================================================ ----------------- ----------------- -----------------
Total revenue 926,274 1,219,108 2,145,382
================================================
Benefits and Expenses:
================================================
Benefits 371,333 1,013,717 1,385,050
================================================
Operating expenses 427,969 123,756 551,725
================================================ ----------------- ----------------- -----------------
Total benefits and expenses 799,302 1,137,473 1,936,775
================================================ ----------------- ----------------- -----------------
----------------- ----------------- -----------------
================================================
================================================
Net operating income before income 126,972 81,635 208,607
taxes
================================================
Income taxes 28,726 21,121 49,847
----------------- ----------------- -----------------
Net income $ 98,246 $ 60,514 $ 158,760
================================================ ================= ================= =================
The following table, which summarizes premium and fee income by segment, represents supplemental information.
1999 1998 1997
====================================== ---------------- ---------------- -----------------
----------------
Premium Income:
======================================
======================================
Employee Benefits
======================================
Group Life & Health $ 990,449 $ 746,898 $ 465,143
====================================== ---------------- ---------------- -----------------
Total Employee Benefits 990,449 746,898 465,143
---------------- ---------------- -----------------
---------------- ---------------- -----------------
Financial Services
======================================
======================================
Savings 14,344 16,765 22,634
======================================
Individual Insurance 158,390 231,200 345,402
---------------- ---------------- -----------------
---------------- ---------------- -----------------
Total Financial Services 172,734 247,965 368,036
====================================== ---------------- ---------------- -----------------
Total premium income $ 1,163,183 $ 994,863 $ 833,179
====================================== ================ ================ =================
----------------
Fee Income:
======================================
======================================
Employee Benefits
======================================
Group Life & Health $ 454,071 $ 366,805 $ 305,302
======================================
(uninsured plans)
======================================
401(k) 94,509 77,844 52,703
---------------- ---------------- -----------------
---------------- ---------------- -----------------
Total Employee Benefits 548,580 444,649 358,005
====================================== ---------------- ---------------- -----------------
---------------- ---------------- -----------------
Financial Services
======================================
======================================
Savings 81,331 71,403 62,725
======================================
Individual Insurance 5,236
---------------- ---------------- -----------------
---------------- ---------------- -----------------
Total Financial Services 86,567 71,403 62,725
====================================== ---------------- ---------------- -----------------
Total fee income $ 635,147 $ 516,052 $ 420,730
====================================== ================ ================ =================
</TABLE>
15. COMMITMENTS AND CONTINGENCIES
On October 6, 1999, the Company entered into a purchase and sale agreement
(the Agreement) with Allmerica Financial Corporation (Allmerica) to acquire
Allmerica's group life and health insurance business on March 1, 2000. This
business primarily consists of administrative services only and stop loss
policies. The in-force business is expected to be underwritten and retained
by the Company upon each policy renewal date. The purchase price, as
defined in the Agreement, will be based on a percentage of the amount
in-force at March 1, 2000 contingent on the persistency of the block of
business through March 2001. Management does not expect the purchase price
to have a material impact on the Company's consolidated financial
statements.
The Company is involved in various legal proceedings, which arise in the
ordinary course of its business. In the opinion of management, after
consultation with counsel, the resolution of these proceedings should not
have a material adverse effect on its financial position or results of
operations.
16. SUBSEQUENT EVENTS
Effective January 1, 2000, the Company coinsured the majority of General
American Life Insurance Company's (General American) group life and health
insurance business which primarily consists of administrative services only
and stop loss policies. The agreement is expected to convert to an
assumption reinsurance agreement by January 1, 2001, pending regulatory
approval. The Company assumed approximately $150,000 of policy reserves and
miscellaneous liabilities in exchange for an equal amount of cash and
miscellaneous assets from General American.
