<PAGE>
As filed with the Securities and Exchange Commission on December 27, 1995
File No. ____
File No. ____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ( X )
Pre-effective Amendment No. _____ ( )
Post-effective Amendment No. _____ ( )
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 ( X )
Pre-effective Amendment No. _____ ( )
Post-effective Amendment No. _____ ( )
(Check appropriate box or boxes)
----------------------------------
ANNUITY INVESTORS(SERVICEMARK) VARIABLE ACCOUNT A
(Exact Name of Registrant)
ANNUITY INVESTORS(SERVICEMARK) LIFE INSURANCE COMPANY
(Name of Depositor)
P.O. Box 5423
Cincinnati, Ohio 45201-5423
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code:
(800) 789-6771
--------------------------------------------------
Mark F. Muething, Esq.
Senior Vice President, Secretary and General Counsel
Annuity Investors(SERVICEMARK) Life Insurance Company
P.O. Box 5423
Cincinnati, Ohio 45201-5423
(Name and Address of Agent for Service)
Copy to:
Catherine S. Bardsley, Esq.
Kirkpatrick & Lockhart LLP
1800 M Street, N.W.
South Lobby - Suite 900
Washington, D.C. 20036
----------------------------------------------------------
Approximate Date of Proposed Public Offering: As soon as practicable
after the effective date of the Registration Statement.
DECLARATION REQUIRED BY RULE 24f-2 (a) (1)
Pursuant to Rule 24f-2 under the Investment Company Act of 1940,
the Registrant declares that an indefinite number of its securities is
being registered under the Securities Act of 1933. Fee $500.00
The registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, action pursuant to said Section 8(a), may determine.
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Rule 495
Showing Location in Part A (Prospectus),
Part B (Statement of Additional Information) and Part C
of Registration Statement Information Required by Form N-4
PART A
------
<TABLE>
<CAPTION>
Item of Form N-4 Prospectus Caption
---------------- ------------------
<S> <C> <C>
1. Cover Page . . . . . . . . . . . . . . . . . . . . . . Cover Page
2. Definitions . . . . . . . . . . . . . . . . . . . . . . Definitions
3. Synopsis . . . . . . . . . . . . . . . . . . . . . . . Highlights
4. Condensed Financial Information
(a) Accumulation Unit Values . . . . . . . . . . . Not Applicable
(b) Performance Data . . . . . . . . . . . . . . . Not Applicable
(c) Financial Statements . . . . . . . . . . . . . Financial Statements for the Company
5. General Description of Registrant, Depositor and
Portfolio Companies
(a) Depositor . . . . . . . . . . . . . . . . . . Annuity Investors(SERVICEMARK) Life Insurance
Company
(b) Registrant . . . . . . . . . . . . . . . . . . The Separate Account
(c) Portfolio Company . . . . . . . . . . . . . . The Funds
(d) Fund Prospectus . . . . . . . . . . . . . . . The Funds
(e) Voting Rights . . . . . . . . . . . . . . . . Voting Rights
6. Deductions and Expenses
(a) General . . . . . . . . . . . . . . . . . . . Charges and Deductions
(b) Sales Load % . . . . . . . . . . . . . . . . . Contingent Deferred Sales Charge
(c) Special Purchase Plan . . . . . . . . . . . . Contingent Deferred Sales Charge
<PAGE>
(d) Commissions . . . . . . . . . . . . . . . . . Distribution of the Contract
(e) Fund Expenses . . . . . . . . . . . . . . . . The Funds
(f) Operating Expenses . . . . . . . . . . . . . . Summary of Expenses
7. Contracts
(a) Persons with Rights . . . . . . . . . . . . . The Contract; Surrenders; Contract Loans; Death
Benefit; Voting Rights
(b) (i) Allocation of Premium Payments . . . . . . . Purchase Payments
(ii) Transfers . . . . . . . . . . . . . . Transfers
(iii) Exchanges . . . . . . . . . . . . . . Additions, Deletions or Substitutions
(c) Changes . . . . . . . . . . . . . . . . . . . Not Applicable
(d) Inquiries . . . . . . . . . . . . . . . . . . Contacting the Company
8. Annuity Period . . . . . . . . . . . . . . . . . . . . Settlement Options
9. Death Benefit . . . . . . . . . . . . . . . . . . . . . Death Benefit
10. Purchases and Contract Values
(a) Purchases . . . . . . . . . . . . . . . . . . Purchase Payments
(b) Valuation . . . . . . . . . . . . . . . . . . Fixed Account Value; Variable Account Value
(c) Daily Calculation . . . . . . . . . . . . . . Accumulation Unit Value; Net Investment Factor
(d) Underwriter . . . . . . . . . . . . . . . . . Distribution of the Contract
11. Redemptions
(a) By Owner . . . . . . . . . . . . . . . . . . . Surrender Value; Systematic Withdrawal Option
By Annuitant . . . . . . . . . . . . . . . . . Not Applicable
(b) Texas ORP . . . . . . . . . . . . . . . . . . Texas Optional Retirement Program
(c) Check Delay . . . . . . . . . . . . . . . . . Suspension or Delay in Payment of Surrender
Value
(d) Free Look . . . . . . . . . . . . . . . . . . Right to Cancel
12. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . Federal Tax Matters
13. Legal Proceedings . . . . . . . . . . . . . . . . . . . Legal Proceedings
<PAGE>
14. Table of Contents for the Statement of Additional
Information . . . . . . . . . . . . . . . . . . . . . . Statement of Additional Information
PART B
------
Statement of Additional
Item of Form N-4 Information Caption
---------------- -----------------------
15. Cover Page . . . . . . . . . . . . . . . . . . . . . . Cover Page
16. Table of Contents . . . . . . . . . . . . . . . . . . . Table of Contents
17. General Information and History . . . . . . . . . . . . General Information and History
18. Services
(a) Fees and Expenses of Registrant . . . . . . . (Prospectus) Summary of Expenses
(b) Management Contracts . . . . . . . . . . . . . Not Applicable
(c) Custodian . . . . . . . . . . . . . . . . . . Not Applicable
Independent Auditors . . . . . . . . . . . . . Experts
(d) Assets of Registrant . . . . . . . . . . . . . Not Applicable
(e) Affiliated Person . . . . . . . . . . . . . . Not Applicable
(f) Principal Underwriter . . . . . . . . . . . . Not Applicable
19. Purchase of Securities Being Offered . . . . . . . . . (Prospectus) Distribution of the Contract
Offering Sales Load . . . . . . . . . . . . . . . . . . (Prospectus) Contingent Deferred Sales Charge
20. Underwriters . . . . . . . . . . . . . . . . . . . . . Distribution of the Contract
21. Calculation of Performance Data
(a) Money Market Funded Sub Accounts . . . . . . . Money Market Sub-Account Standardized Yield
Calculation
(b) Other Sub-Accounts . . . . . . . . . . . . . . Other Sub-Account Standardized Yield
Calculations
22. Annuity Payments . . . . . . . . . . . . . . . . . . . (Prospectus) Fixed Dollar Annuity Benefit;
Variable Dollar Annuity Benefit
23. Financial Statements . . . . . . . . . . . . . . . . . Financial Statements
<PAGE>
PART C - Other Information
--------------------------
Item of Form N-4 Part C Caption
---------------- --------------
24. Financial Statements and Exhibits . . . . . . . . . . . Financial Statements and Exhibits
(a) Financial Statements . . . . . . . . . . . . . Financial Statements
(b) Exhibits . . . . . . . . . . . . . . . . . . . Exhibits
25. Directors and Officers of the Depositor . . . . . . . . Directors and Officers of Annuity
Investors(SERVICEMARK) Life Insurance Company
26. Persons Controlled By or Under Common Control With the Persons Controlled By Or Under Common Control
Registrant . . . . . . . . . . . . . . . . . . . . . . With the Depositor or Registrant
27. Number of Owners . . . . . . . . . . . . . . . . . . . Number of Owners
28. Indemnification . . . . . . . . . . . . . . . . . . . . Indemnification
29. Principal Underwriters . . . . . . . . . . . . . . . . Principal Underwriter
30. Location of Accounts and Records . . . . . . . . . . . Location of Accounts and Records
31. Management Services . . . . . . . . . . . . . . . . . . Management Services
32. Undertakings . . . . . . . . . . . . . . . . . . . . . Undertakings
Signature Page . . . . . . . . . . . . . . . . . . . . Signature Page
</TABLE>
<PAGE>
Subject to Completion: Dated _____________, 1995
ANNUITY INVESTORS(SERVICEMARK) VARIABLE ACCOUNT A
of
ANNUITY INVESTORS(SERVICEMARK) LIFE INSURANCE COMPANY
PROSPECTUS
for the
Commodore Mariner(SERVICEMARK) and Commodore Galleon(SERVICEMARK)
Individual Flexible Premium Deferred Annuities
Issued by
ANNUITY INVESTORS(SERVICEMARK) LIFE INSURANCE COMPANY
P.O. Box 5423, Cincinnati, Ohio 45201-5423, (800) 789-6771
This Prospectus describes the Commodore Mariner(SERVICEMARK) and Commodore
Galleon(SERVICEMARK), Individual Flexible Premium Deferred Annuity
Contracts (each, the "Contract") issued by Annuity Investors(SERVICEMARK)
Life Insurance Company (the "Company"). The Commodore
Mariner(SERVICEMARK) is available for non-tax-qualified annuity purchases.
The Commodore Galleon(SERVICEMARK) is available in connection with
arrangements that qualify for favorable tax treatment under sections 401,
403, 408 or 457 of the Internal Revenue Code of 1986, as amended.
The Contract provides for the accumulation of an Account Value on a fixed
or variable basis, or a combination of both. The Contract also provides
for the payment of periodic annuity payments on a fixed or variable basis,
or a combination of both. If the variable basis is chosen, Annuity values
will be held in Annuity Investors(SERVICEMARK) Variable Account A (the
"Separate Account") and will vary according to the investment performance
of the mutual funds in which the Sub-Accounts of the Separate Account
invest. If the fixed basis is chosen, periodic annuity payments from the
Company's general account will be fixed and will not vary.
The Separate Account is divided into Sub-Accounts. Each Sub-Account uses
its assets to purchase, at their net asset value, shares of a designated
registered investment company or portfolio thereof (each, a "Fund"). The
Funds available for investment in the Separate Account under the Contract
are as follows: from Janus Aspen Series, (1) the Aggressive Growth
Portfolio, (2) the Worldwide Growth Portfolio, (3) the Balanced Portfolio,
and (4) the Short-Term Bond Portfolio; (5) Dreyfus Variable Investment
Fund's Capital Appreciation Portfolio; (6) Dreyfus Socially Responsible
Growth Fund; (7) Dreyfus Stock Index Fund; and from Merrill Lynch Variable
Series Funds, Inc., (8) the Basic Value Focus Fund, (9) the Global
Strategy Focus Fund, (10) the High Current Income Fund and (11) the
Domestic Money Market Fund.
This Prospectus sets forth the basic information that a prospective
investor should know before investing. A "Statement of Additional
Information" containing more detailed information about the Contract is
available free of charge by writing to the Company's Administrative Office
at P.O. Box 5423, Cincinnati, Ohio 45201-5423. The Statement of
Additional Information, which has the same date as this Prospectus, as it
may be supplemented from time to time, has been filed with the Securities
and Exchange Commission and is incorporated herein by reference. The
table of contents of the Statement of Additional Information is included
at the end of this Prospectus.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with
the Securities and Exchange Commission but has not yet become effective.
These securities may not be sold nor may offers to buy be accepted prior
to the time the registration statement becomes effective. This prospectus
shall not constitute an offer to sell or the solicitation of an offer to
buy nor shall there be any sale of these securities in any State in which
such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such State.
* * *
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES REGULATORY AUTHORITIES
NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Please Read this Prospectus Carefully and
Retain It for Future Reference.
The Date of this Prospectus is _______________, 1996.
---------------------------------------------------------------------
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN
WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESMAN, OR
OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
---------------------------------------------------------------------
VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED
OR GUARANTEED BY, ANY FINANCIAL INSTITUTION, NOR ARE THEY FEDERALLY
INSURED OR OTHERWISE PROTECTED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY; THEY ARE
SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL
INVESTMENT.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUS
FOR EACH UNDERLYING FUND. BOTH THIS PROSPECTUS AND THE UNDERLYING FUND
PROSPECTUSES SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
<PAGE>
TABLE OF CONTENTS
Page
----
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 3
HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . 6
The Contract . . . . . . . . . . . . . . . . . . . . . . 6
The Separate Account . . . . . . . . . . . . . . . . . . 6
The Fixed Account . . . . . . . . . . . . . . . . . . . . 6
Transfers Before the Annuity Commencement Date . . . . . 7
Surrenders . . . . . . . . . . . . . . . . . . . . . . . 7
Contingent Deferred Sales Charge ("CDSC") . . . . . . . . 7
Other Charges and Deductions . . . . . . . . . . . . . . 7
Annuity Benefits . . . . . . . . . . . . . . . . . . . . 8
Death Benefit . . . . . . . . . . . . . . . . . . . . . . 8
Federal Income Tax Consequences . . . . . . . . . . . . . 8
Right to Cancel . . . . . . . . . . . . . . . . . . . . . 8
Contacting the Company . . . . . . . . . . . . . . . . . 8
SUMMARY OF EXPENSES . . . . . . . . . . . . . . . . . . . 9
Owner Transaction Expenses . . . . . . . . . . . . . . . 9
Examples . . . . . . . . . . . . . . . . . . . . . . . . 12
FINANCIAL STATEMENTS FOR THE COMPANY . . . . . . . . . . 13
THE FUNDS . . . . . . . . . . . . . . . . . . . . . . . . 13
Janus Aspen Series . . . . . . . . . . . . . . . . . . . 14
Aggressive Growth Portfolio . . . . . . . . . . . . . . . 14
Worldwide Growth Portfolio . . . . . . . . . . . . . . . 14
Balanced Portfolio . . . . . . . . . . . . . . . . . . . 14
Short-Term Bond Portfolio . . . . . . . . . . . . . . . . 14
Dreyfus Funds . . . . . . . . . . . . . . . . . . . . . . 14
Capital Appreciation Portfolio . . . . . . . . . . . . . 14
Socially Responsible Growth Fund . . . . . . . . . . . . 14
Stock Index Fund . . . . . . . . . . . . . . . . . . . . 14
Merrill Lynch Variable Series Funds, Inc. . . . . . . . . 15
Basic Value Focus Fund . . . . . . . . . . . . . . . . . 15
Global Strategy Focus Fund . . . . . . . . . . . . . . . 15
High Current Income Fund . . . . . . . . . . . . . . . . 15
Domestic Money Market Fund. . . . . . . . . . . . . . . . 15
Additions, Deletions, or Substitutions . . . . . . . . . 16
PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . 16
Yield Data . . . . . . . . . . . . . . . . . . . . . . . 16
Total Return Data . . . . . . . . . . . . . . . . . . . . 17
_________________________________________________________________________
Page i
<PAGE>
Page
----
ANNUITY INVESTORS(SERVICEMARK) LIFE INSURANCE
COMPANY AND THE SEPARATE ACCOUNT . . . . . . . . . . . . 17
Annuity Investors(SERVICEMARK) Life Insurance
Company . . . . . . . . . . . . . . . . . . . . . . . . . 17
Published Ratings . . . . . . . . . . . . . . . . . . . . 18
The Separate Account . . . . . . . . . . . . . . . . . . 18
THE FIXED ACCOUNT . . . . . . . . . . . . . . . . . . . . 18
Fixed Account Options . . . . . . . . . . . . . . . . . . 19
Renewal of Fixed Account Options . . . . . . . . . . . . 19
THE CONTRACT . . . . . . . . . . . . . . . . . . . . . . 20
Right to Cancel . . . . . . . . . . . . . . . . . . . . . 20
PURCHASE PAYMENTS . . . . . . . . . . . . . . . . . . . . 20
Purchase Payments . . . . . . . . . . . . . . . . . . . . 20
Allocation of Purchase Payments . . . . . . . . . . . . . 21
ACCOUNT VALUE . . . . . . . . . . . . . . . . . . . . . . 21
Fixed Account Value . . . . . . . . . . . . . . . . . . . 21
Variable Account Value . . . . . . . . . . . . . . . . . 21
Accumulation Unit Value . . . . . . . . . . . . . . . . . 22
Net Investment Factor . . . . . . . . . . . . . . . . . . 22
TRANSFERS . . . . . . . . . . . . . . . . . . . . . . . . 22
Telephone Transfers . . . . . . . . . . . . . . . . . . . 23
Dollar Cost Averaging . . . . . . . . . . . . . . . . . . 23
Portfolio Rebalancing . . . . . . . . . . . . . . . . . . 24
Interest Sweep . . . . . . . . . . . . . . . . . . . . . 24
Changes By the Company . . . . . . . . . . . . . . . . . 25
SURRENDERS . . . . . . . . . . . . . . . . . . . . . . . 25
Surrender Value . . . . . . . . . . . . . . . . . . . . . 25
Suspension or Delay in Payment of Surrender Value . . . . 26
Free Withdrawal Privilege . . . . . . . . . . . . . . . . 26
Systematic Withdrawal Option . . . . . . . . . . . . . . 26
CONTRACT LOANS . . . . . . . . . . . . . . . . . . . . . 27
DEATH BENEFIT . . . . . . . . . . . . . . . . . . . . . . 27
When A Death Benefit Will Be Paid . . . . . . . . . . . . 27
Death Benefit Values . . . . . . . . . . . . . . . . . . 27
Beneficiary . . . . . . . . . . . . . . . . . . . . . . . 28
_________________________________________________________________________
Page ii
<PAGE>
Page
----
CHARGES AND DEDUCTIONS . . . . . . . . . . . . . . . . . 28
Contingent Deferred Sales Charge ("CDSC") . . . . . . . . 29
Maintenance and Administrative Charges . . . . . . . . . 30
Mortality and Expense Risk Charge . . . . . . . . . . . . 30
Premium Taxes . . . . . . . . . . . . . . . . . . . . . . 31
Transfer Fee . . . . . . . . . . . . . . . . . . . . . . 31
Fund Expenses . . . . . . . . . . . . . . . . . . . . . . 31
SETTLEMENT OPTIONS . . . . . . . . . . . . . . . . . . . 32
Annuity Commencement Date . . . . . . . . . . . . . . . . 32
Election of Settlement Option . . . . . . . . . . . . . . 32
Benefit Payments . . . . . . . . . . . . . . . . . . . . 32
Fixed Dollar Benefit . . . . . . . . . . . . . . . . . . 32
Variable Dollar Benefit . . . . . . . . . . . . . . . . . 33
Settlement Options . . . . . . . . . . . . . . . . . . . 33
Minimum Amounts . . . . . . . . . . . . . . . . . . . . . 34
Settlement Option Tables . . . . . . . . . . . . . . . . 34
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . 34
Non-participating . . . . . . . . . . . . . . . . . . . . 34
Misstatement of Age . . . . . . . . . . . . . . . . . . . 34
Proof of Existence and Age . . . . . . . . . . . . . . . 35
Facility of Payment . . . . . . . . . . . . . . . . . . . 35
Transfer of Ownership . . . . . . . . . . . . . . . . . . 35
Non-Tax-Qualified Contract . . . . . . . . . . . . . . . 35
Tax-Qualified Contract . . . . . . . . . . . . . . . . . 35
Assignment . . . . . . . . . . . . . . . . . . . . . . . 35
Non-Tax-Qualified Contract . . . . . . . . . . . . . . . 35
Tax-Qualified Contract . . . . . . . . . . . . . . . . . 35
Annuity Data . . . . . . . . . . . . . . . . . . . . . . 35
Annual Report . . . . . . . . . . . . . . . . . . . . . . 36
Incontestability . . . . . . . . . . . . . . . . . . . . 36
Entire Contract . . . . . . . . . . . . . . . . . . . . . 36
Changes in the Contract . . . . . . . . . . . . . . . . . 36
Waiver of the Contract Maintenance Fee . . . . . . . . . 36
Notices and Directions . . . . . . . . . . . . . . . . . 36
FEDERAL TAX MATTERS . . . . . . . . . . . . . . . . . . . 37
Introduction . . . . . . . . . . . . . . . . . . . . . . 37
Taxation of Annuities In General . . . . . . . . . . . . 37
Surrenders . . . . . . . . . . . . . . . . . . . . . . . 37
Qualified Contracts . . . . . . . . . . . . . . . . . . . 37
Non-Qualified Contracts . . . . . . . . . . . . . . . . . 38
Annuity Benefit Payments . . . . . . . . . . . . . . . . 38
Penalty Tax . . . . . . . . . . . . . . . . . . . . . . . 38
Taxation of Death Benefit Proceeds . . . . . . . . . . . 38
_________________________________________________________________________
Page iii
<PAGE>
Page
----
Transfers, Assignments, or Exchanges of the
Contract . . . . . . . . . . . . . . . . . . . . . . . . 38
Qualified Contracts - General . . . . . . . . . . . . . . 39
Texas Optional Retirement Program . . . . . . . . . . . . 39
Individual Retirement Annuities . . . . . . . . . . . . . 39
Tax-Sheltered Annuities . . . . . . . . . . . . . . . . . 39
Corporate Pension and Profit Sharing Plans and H.R.
10 Plans . . . . . . . . . . . . . . . . . . . . . . . . 39
Certain Deferred Compensation Plans . . . . . . . . . . . 39
Withholding . . . . . . . . . . . . . . . . . . . . . . . 40
Possible Changes in Taxation . . . . . . . . . . . . . . 40
Other Tax Consequences . . . . . . . . . . . . . . . . . 40
General . . . . . . . . . . . . . . . . . . . . . . . . . 40
DISTRIBUTION OF THE CONTRACT . . . . . . . . . . . . . . 40
LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . 41
VOTING RIGHTS . . . . . . . . . . . . . . . . . . . . . . 41
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . 42
STATEMENT OF ADDITIONAL INFORMATION . . . . . . . . . . . 42
_________________________________________________________________________
Page iv
<PAGE>
DEFINITIONS
Account(s): The account representing the Owner's interest in the
Sub-Account(s) and/or the Fixed Account options.
Account Value: The aggregate value of the Owner's Account as of the end
of any Valuation Period.
Accumulation Period: The period prior to the applicable Commencement
Date.
Accumulation Unit: The unit of measure used to calculate the value of the
Sub-Account(s) prior to the applicable Commencement Date.
Administrative Office: The home office of the Company or any other office
the Company may designate for administration.
Age: Age as of most recent birthday.
Annuity Benefit: Periodic payments under a Settlement Option, which
commence on or after the Annuity Commencement Date.
Annuity Commencement Date: The first day of the first period for which an
Annuity Benefit payment is to be made under a Settlement Option.
Benefit Payment: The Annuity Benefit or Death Benefit payable under a
Settlement Option.
Benefit Payment Period: The period commencing with the Commencement Date
during which Benefit Payments are to be made under the Contract.
Benefit Unit: The unit of measure used to determine the dollar value of
any Variable Dollar Benefit payments after the first Benefit Payment is
made by the Company.
Commencement Date: The Annuity Commencement Date if an Annuity Benefit is
payable under the Contract, or the Death Benefit Commencement Date if a
Death Benefit is payable under the Contract.
Contract Anniversary: An annual anniversary of the Contract Effective
Date.
Contract Effective Date: The date shown on the Contract Specifications
page.
Contract Year: Any period of twelve months commencing on the Contract
Effective Date and on each Contract Anniversary thereafter.
Code: The Internal Revenue Code of 1986, as amended, and the rules and
regulations issued thereunder.
_________________________________________________________________________
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<PAGE>
Death Benefit: Periodic payments made under a Settlement Option, which
commence on or after the Death Benefit Commencement Date, or a lump sum or
other payments made instead of such periodic payments.
Death Benefit Commencement Date: The first day of the first period for
which a Death Benefit payment is to be made under a Settlement Option.
Death Benefit Valuation Date: The date that Due Proof of Death has been
received by the Company and the earlier to occur of:
(1) a Written Request with instructions as to the form of
Death Benefit has been received by the Company; or
(2) the Death Benefit Commencement Date has occurred.
Due Proof of Death: Any of the following: (1) a certified copy of a
death certificate; (2) a certified copy of a decree of a court of
competent jurisdiction as to the finding of death; (3) any other proof
satisfactory to the Company.
Fixed Account: An account which is part of the Company's general account,
the values of which are not dependent upon the investment performance of
the Sub-Accounts.
Fixed Account Value: The value of an owner's interest in all Fixed
Account options.
Fund: A management investment company or a portfolio thereof, registered
under the Investment Company Act of 1940, in which a Sub-Account of the
Separate Account invests.
Net Asset Value: The amount computed by an investment company, no less
frequently than each Valuation Period, as the price at which its shares or
units, as the case may be, are redeemed in accordance with the rules of
the Securities and Exchange Commission.
Owner: The person or persons identified as such on the Contract
Specifications page.
Person Controlling Payments: The "Person Controlling Payments" means the
following:
(1) for tax-qualified Contracts:
(a) with respect to Annuity Benefit payments, the Owner;
(b) with respect to Death Benefit payments, (i) the
Beneficiary, or (ii) if the Beneficiary is deceased,
the payee.
_________________________________________________________________________
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<PAGE>
(2) for non-tax-qualified Contracts:
(a) with respect to Annuity Benefit payments, (i) the
Owner, if the Owner has the right to change the
payee, or (ii) in all other cases the payee;
(b) with respect to Death Benefit payments, (i) the
Beneficiary, or (ii) if the Beneficiary is deceased,
the payee.
Purchase Payment: A contribution after the deduction of premium tax, if
any, made to the Company in consideration for the Contract.
Separate Account: An account which may be an investment company, which is
established and maintained by the Company pursuant to the laws of the
State of Ohio. Annuity Investors(SERVICEMARK) Variable Account A (also
referred to as the "Variable Account") is the current Separate Account
under the Contract.
Settlement Option: The option elected by the Owner for the payment of
Benefit Payments.
Sub-Account: The Separate Account is divided into Sub-Accounts, each of
which invests in the shares of a designated Fund.
Surrender Value: The amount payable under a Contract if the Contract is
surrendered.
Valuation Period: The period commencing at the close of regular trading
on the New York Stock Exchange on any Valuation Date and ending at the
close of trading on the next succeeding Valuation Date. "Valuation Date"
means each day on which the New York Stock Exchange is open for business.
Variable Account Value: The value of an Owner's interest in all
Sub-Accounts.
Written Request: Information provided, or a request made, that is
complete and satisfactory to the Company, that is sent to the Company on
the Company's form or in a form satisfactory to the Company, and that is
received by the Company at the Administrative Office. A Written Request
is subject to any payment made or any action the Company takes before the
Written Request is acknowledged by the Company. An Owner may be required
to return his or her Contract to the Company in connection with a Written
Request.
_________________________________________________________________________
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<PAGE>
HIGHLIGHTS
THE CONTRACT
The Commodore Mariner(SERVICEMARK) contract described in this Prospectus
is designed for use in connection with certain individual non-tax-
qualified annuity purchases. The Commodore Galleon(SERVICEMARK) is
available for arrangements that qualify for favorable tax treatment under
Sections 401, 403, 408 or 457 of the Code.
The Owner is the person or persons designated as such shown on the
Contract Specifications page. Subject to the terms of the Contract and
unless the Owner dies before the Annuity Commencement Date, the Account
Value, after certain adjustments, will be applied to the payment of an
Annuity Benefit under the Settlement Option elected by the Owner.
The Account Value will depend on the investment experience of the amounts
allocated to each Sub-Account of the Separate Account elected by the Owner
and/or interest credited on amounts allocated to the Fixed Account
option(s) elected. All Annuity Benefits and other values provided under
the Contract when based on the investment experience of the Separate
Account are variable and are not guaranteed as to dollar amount.
Therefore, the Owner bears the entire investment risk with respect to
amounts allocated to the Separate Account under the Contract.
THERE IS NO GUARANTEED OR MINIMUM SURRENDER VALUE WITH RESPECT TO AMOUNTS
ALLOCATED TO THE SEPARATE ACCOUNT, SO THE PROCEEDS OF A SURRENDER COULD BE
LESS THAN THE TOTAL PURCHASE PAYMENTS.
THE SEPARATE ACCOUNT
Annuity Investors(SERVICEMARK) Variable Account A is a Separate Account of
the Company that is divided into Sub-Accounts (See "The Separate Account,"
page __.) Each Sub-Account uses its assets to purchase, at their Net Asset
Value, shares of a Fund. The Funds available for investment in the
Separate Account under the Contract are as follows: from Janus Aspen
Series, (1) the Aggressive Growth Portfolio, (2) the Worldwide Growth
Portfolio, (3) the Balanced Portfolio, and (4) the Short-Term Bond
Portfolio; (5) Dreyfus Variable Investment Fund's Capital Appreciation
Portfolio; (6) Dreyfus Socially Responsible Growth Fund; (7) Dreyfus Stock
Index Fund; and from Merrill Lynch Variable Series Funds Inc., (8) the
Basic Value Focus Fund, (9) the Global Strategy Focus Fund, (10) the High
Current Income Fund and (11) the Domestic Money Market Fund. Each Fund
has distinct investment objectives and policies which are described in the
accompanying prospectus for the Fund.
Each Fund pays its investment adviser and other service providers certain
fees charged against the assets of the Fund. The Account Value of a
Contract and the amount of any Annuity Benefits will vary to reflect the
investment performance of all the Sub-Accounts elected by the Owner and
_________________________________________________________________________
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<PAGE>
the deduction of the charges described under "Charges and Deductions,"
page __. For more information about the Funds, see "The Funds," page __,
and the accompanying Funds' prospectuses.
THE FIXED ACCOUNT
The Fixed Account is an account within the Company's general account.
There are currently four Fixed Account options available under the Fixed
Account: a Fixed Accumulation Account option and three fixed term options.
Purchase Payments allocated or amounts transferred to the Fixed Account
options are credited with interest at a rate declared by the Company's
Board of Directors, but in any event at a minimum guaranteed annual rate
of 3.0% corresponding to a daily rate of 0.0081%. (See "The Fixed
Account," page __.)
TRANSFERS BEFORE THE ANNUITY COMMENCEMENT DATE
Prior to the Annuity Commencement Date, the Owner may transfer values
between the Separate Account and the Fixed Account, within the Fixed
Account and between the Sub-Accounts, by Written Request to the Company or
by telephone in accordance with the Company's telephone transfer rules.
(See "Transfers," page __.)
The Company currently charges a fee of $25 for each transfer ("Transfer
Fee") in excess of twelve made during the same Contract Year. (See
"Transfers," page __.)
For transfers after the Annuity Commencement Date, see "Transfers After
the Annuity Commencement Date," page__.
SURRENDERS
All or part of the Surrender Value of a Contract may be surrendered by the
Owner on or before the Annuity Commencement Date by Written Request to the
Company. Amounts surrendered may be subject to a Contingent Deferred
Sales Charge ("CDSC") depending upon how long the Purchase Payments to be
withdrawn have been held under the Contract. Amounts withdrawn also may
be subject to a premium tax or similar tax, depending upon the
jurisdiction in which the Owner lives. Surrenders may be subject to a 10%
premature distribution penalty tax if made before the Owner reaches age 59
1/2. Surrenders may further be subject to federal, state or local income
taxes or significant tax law restrictions. (See "Federal Tax Matters,"
page __.)
CONTINGENT DEFERRED SALES CHARGE ("CDSC")
A CDSC may be imposed on amounts surrendered. The maximum CDSC is 7% for
each Purchase Payment. That percentage decreases by 1% annually to 0%
after year seven.
_________________________________________________________________________
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<PAGE>
The CDSC may be waived under certain circumstances. (See "Charges and
Deductions," page __.)
OTHER CHARGES AND DEDUCTIONS
The Company deducts a daily charge ("Mortality and Expense Risk Charge")
at an effective annual rate of 1.25% of the daily Net Asset Value of each
Sub-Account.
The Company also deducts a Contract maintenance charge each year
("Contract Maintenance Fee"). This Fee is currently $25 and is deducted
from an Owner's Variable Account Value on each Contract Anniversary. The
Company will waive the Contract Maintenance Fee if the Account Value is
equal to or greater than $30,000 on the date of the assessment of the
charge.
The Company does not currently intend to deduct a charge to help cover the
costs of administering the Contract and the Separate Account
("Administration Charge"); however, the Company reserves the right to
impose an Administration Charge at a future date. Any such Administration
Charge is guaranteed not to exceed a maximum effective annual rate of
0.20% of the daily Net Asset Value of each Sub-Account.
Charges for premium taxes may be imposed in some jurisdictions. Depending
on the applicability of such taxes, the charges may be deducted from
Purchase Payments, from surrenders, and from other payments made under the
Contract. (See "Charges and Deductions," page __.)
ANNUITY BENEFITS
Annuity Benefits are paid on a fixed or variable basis, or a combination
of both. (See "Annuity Benefits," page __.)
DEATH BENEFIT
The Contract provides for the payment of a Death Benefit if the Owner dies
prior to the Annuity Commencement Date. The Death Benefit may be paid as
a lump sum, pursuant to one of the Settlement Options offered under the
Contract, or in any other manner acceptable to the Company. (See "Death
Benefit," page __)
FEDERAL INCOME TAX CONSEQUENCES
An Owner generally should not be taxed on increases in the Account Value
until a distribution under the Contract occurs (e. g., a surrender or
Annuity Benefit) or is deemed to occur (e.g., a loan). Generally, a
portion (up to 100%) of any distribution or deemed distribution is taxable
as ordinary income. The taxable portion of distributions is generally
subject to income tax withholding unless the recipient elects otherwise.
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<PAGE>
In addition, a 10% federal penalty tax may apply to certain distributions.
(See "Federal Tax Matters," page __.)
RIGHT TO CANCEL
An Owner may cancel the Contract by giving the Company written notice of
cancellation and returning the Contract before midnight of the twentieth
day (or longer if required by state law) after receipt. (See "Right to
Cancel," page __.)
CONTACTING THE COMPANY
All Written Requests and any questions or inquiries should be directed to
the Company's Administrative Office, P.O. Box 5423, Cincinnati, Ohio
45201-5423, (800) 789-6771. All inquiries should include the Contract
Number and the Owner's name.
NOTE: THE FOREGOING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED
INFORMATION IN THE REMAINDER OF THIS PROSPECTUS AND IN THE ACCOMPANYING
PROSPECTUSES FOR THE FUNDS WHICH SHOULD BE REFERRED TO FOR MORE DETAILED
INFORMATION. THE REQUIREMENTS OF AN ENDORSEMENT TO THE CONTRACT OR
LIMITATIONS OR PENALTIES IMPOSED BY THE CODE MAY IMPOSE ADDITIONAL LIMITS
OR RESTRICTIONS ON PURCHASE PAYMENTS, SURRENDERS, DISTRIBUTIONS, BENEFITS,
OR OTHER PROVISIONS OF THE CONTRACT. THIS PROSPECTUS DOES NOT DESCRIBE
SUCH LIMITATIONS OR RESTRICTIONS. (SEE "FEDERAL TAX MATTERS," PAGE __.)
_________________________________________________________________________
Page 9
<PAGE>
SUMMARY OF EXPENSES
OWNER TRANSACTION EXPENSES
Sales Load Imposed on Purchase Payments None
Contingent Deferred Sales Charge (as a percentage of Purchase Payments
surrendered)
Contract Years elapsed since receipt of
Purchase Payment
less than 1 year 7%
1 year but less than 2 years 6%
2 years but less than 3 years 5%
3 years but less than 4 years 4%
4 years but less than 5 years 3%
5 years but less than 6 years 2%
6 years but less than 7 years 1%
7 years or more 0%
Surrender Fees None
Transfer Fee1/ $25
Annual Contract Maintenance Fee $25
1/ The first twelve transfers in a Contract Year are free. Thereafter, a
$25 fee will be charged on each subsequent transfer.
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<PAGE>
<TABLE>
<CAPTION>
Dreyfus
Separate Account Annual Expenses2/ Janus A.S. Janus A.S. V.I.F.
(as a percentage of average Separate Janus A.S. Worldwide Janus A.S. Short-Term Capital
Account assets) Aggressive Growth Growth Balanced Bond Appreciation
-------------------------------- -------------- ------------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Mortality and Expense Risk Charge 1.25% 1.25% 1.25% 1.25% 1.25%
Administration Charge 0.00% 0.00% 0.00% 0.00% 0.00%
Other Fees and Expenses of the
Separate Account 0.00% 0.00% 0.00% 0.00% 0.00%
Total Separate Account Annual
Expenses 1.25% 1.25% 1.25% 1.25% 1.25%
Fund Annual Expenses3/ (as a percentage of Fund average net assets after waiver and/or expense reimbursement)
Management Fees 0.77% 0.69% 0.83% 0.00% 0.75%
Other Expenses 0.28% 0.49% 0.74% 0.65% 0.36%
Total Fund Annual Expenses 1.05% 1.18% 1.57% 0.65% 1.11%
2/ Annual expenses are anticipated to be the same for each Sub-Account.
These expenses are based on estimated amounts for the current fiscal
year.
3/ Information regarding each underlying Fund has been provided to the
Company by each Fund, and the Company has not independently verified
such information. Data for each Fund is for its fiscal year ended
December 31, 1994. Actual expenses in future years may be higher or
lower.
Fund expenses are net of management fees and other expenses waived
and/or reimbursed (except those shown for the Dreyfus V.I.F. Capital
Appreciation Portfolio and the Dreyfus Socially Responsible Growth Fund
as noted below). In the absence of such fee waivers and/or expense
reimbursements, Management Fees, Other Expenses and Total Fund Annual
Expenses would have been as follows for the fiscal year ended December
31, 1994: 1.00%, 0.28% and 1.28%, respectively, for the Janus A.S.
Aggressive Growth Portfolio; 1.00%, 0.49% and 1.49%, respectively, for
the Janus A.S. Worldwide Growth Portfolio; 1.00%, 0.74 and 1.74%
respectively, for the Janus A.S. Balanced Portfolio; and 0.65%, 0.75%
and 1.40%, respectively, for the Janus A.S. Short-Term Bond Portfolio;
0.15%, 0.41% and 0.56%, respectively, for the Dreyfus Stock Index Fund;
and 0.50%, 0.07% and 0.57%, respectively, for the Merrill Lynch V.S.F.
Domestic Money Market Fund. Fees and expenses for the Dreyfus V.I.F.
Capital Appreciation Portfolio and the Dreyfus Socially Responsible
Growth Fund are based on 1994 fees and expenses but do not take into
account management fee waivers and expense reimbursements that were in
effect during that year because they are no longer in effect.
_________________________________________________________________________
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<PAGE>
Separate Account Annual Dreyfus Merrill Merrill
Expenses (as a percentage Socially Merrill Lynch Merrill Lynch Lynch V.S.F. Lynch V.S.F.
of average Separate Responsible Dreyfus V.S.F. Basic V.S.F. Global High Current Domestic
Account assets) Growth Stock Index Value Focus Strategy Focus Income Money Market
----------------------- ---------- ---------- ------------ -------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Mortality and Expense
Risk Charge 1.25% 1.25% 1.25% 1.25% 1.25% 1.25%
Administration Charge 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Other Fees and Expenses
of the Separate Account 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Total Separate Account
Annual Expenses 1.25% 1.25% 1.25% 1.25% 1.25% 1.25%
Fund Annual Expenses (as a percentage of Fund average net assets after fee waiver and/or expense reimbursement)
Management Fees 0.75% 0.14% 0.60% 0.65% 0.52% 0.50%
Other Expenses 2.10% 0.26% 0.12% 0.12% 0.09% 0.00%
Total Fund Annual
Expenses 2.85% 0.40% 0.72% 0.77% 0.61% 0.50%
</TABLE>
The purpose of this table is to assist Owners in understanding the various
costs and expenses that the Owner will bear, directly and indirectly, with
respect to investment in the Separate Account. The table reflects
expenses of each Sub-Account as well as of the Fund in which the
Sub-Account invests. See "Charges and Deductions" on page __ of this
Prospectus and the accompanying prospectus for the applicable Fund for a
more complete description of the various costs and expenses. In addition
to the expenses listed above, premium taxes may be applicable. The dollar
figures should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown. The
$25 Contract Maintenance Charge is included in the Examples as $1.
Examples4/
If the Owner surrenders his or her Contract at the end of the applicable
time period, the following expenses will be charged on a $1,000
investment, assuming a 5% annual return on assets:
4/ The examples assume the reinvestment of all dividends and
distributions, no transfers among Sub-Accounts or between Accounts,
and an assumed annual rate of return of 5% as mandated by Securities
and Exchange Commission regulations. Annual Contract Maintenance Fees
are based on an estimated amount for the Separate Account's current
fiscal year.
_________________________________________________________________________
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<PAGE>
Sub-Account 1 Year 3 Years
----------- ------ -------
Janus A.S. Aggressive Growth $95 $128
Janus A.S. Worldwide Growth $96 $132
Janus A.S. Balanced $100 $144
Janus A.S. Short-Term Bond $91 $115
Dreyfus V.I.F. Capital Appreciation $95 $130
Dreyfus Socially Responsible Growth $113 $184
Dreyfus Stock Index $88 $107
Merrill Lynch V.S.F. Basic Value Focus $91 $117
Merrill Lynch V.S.F. Global Strategy Focus $92 $119
Merrill Lynch V.S.F. High Current Income $90 $114
Merrill Lynch V.S.F. Money Market $89 $110
If the Owner does not surrender his or her Contract, or it is annuitized,
the following expenses would be charged on a $1,000 investment at the end
of the applicable time period, assuming a 5% annual return on assets:
Sub-Account 1 Year 3 Years
------------ ------ -------
Janus A.S. Aggressive Growth $25 $78
Janus A.S. Worldwide Growth $26 $82
Janus A.S. Balanced $30 $94
Janus A.S. Short-Term Bond $21 $67
Dreyfus V.I.F. Capital Appreciation $25 $80
Dreyfus Socially Responsible Growth $43 $134
Dreyfus Stock Index $18 $57
Merrill Lynch V.S.F. Basic Value Focus $21 $65
Merrill Lynch V.S.F. Global Strategy Focus $22 $69
Merrill Lynch V.S.F. High Current Income $20 $64
Merrill Lynch V.S.F. Money Market $19 $60
The examples should not be considered a representation of past or future
expenses or annual rates of return of any Fund. Actual expenses and
annual rates of return may be more or less than those assumed for the
purpose of the examples.
The fee table and examples do not include charges to Owners for premium
taxes.
FINANCIAL STATEMENTS FOR THE COMPANY
The financial statements and report of independent public accountants for
the Company are contained in the Statement of Additional Information.
Because the Contracts registered by this Prospectus had not yet been
issued as of the date of this prospectus, no financial information for the
Separate Account is provided.
_________________________________________________________________________
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<PAGE>
THE FUNDS
The Separate Account currently has eleven Funds that are available for
investment under the Contract. Each Fund has separate investment
objectives and policies. As a result, each Fund operates as a separate
investment portfolio and the investment performance of one Fund has no
effect on the investment performance of any other Fund. There is no
assurance that any of these Funds will achieve their stated objectives.
The Securities and Exchange Commission does not supervise the management
or the investment practices and/or policies of any of the Funds.
The Separate Account invests exclusively in shares of the Funds listed
below (followed by a brief overview of each Fund's investment objective(s)
and policies):
JANUS ASPEN SERIES:
Aggressive Growth Portfolio. A nondiversified portfolio that seeks
long-term growth of capital by investing primarily in common stocks. The
common stocks held by this Fund will normally have an average market
capitalization between $1 billion and $5 billion. The Portfolio may
invest in debt securities, including junk bonds
Worldwide Growth Portfolio. A diversified portfolio that seeks long-term
growth of capital by investing primarily in common stocks of foreign and
domestic companies. The Portfolio may invest in debt securities,
including junk bonds.
Balanced Portfolio. A diversified portfolio that seeks long-term growth
of capital balanced by current income. The Fund normally invests 40-60%
of its assets in equity securities selected for their growth potential and
40-60% in fixed-income securities. The Portfolio may invest in debt
securities, including junk bonds.
Short-Term Bond Portfolio. A diversified portfolio that seeks a high
level of current income while minimizing interest rate risk by investing
in shorter term fixed-income securities. Its average-weighted maturity is
normally less than three years. The Portfolio may invest in junk bonds.
Janus Capital Corporation serves as the investment adviser to each of
these Funds.
DREYFUS FUNDS:
Capital Appreciation Portfolio (Dreyfus Variable Investment Fund). The
Capital Appreciation Portfolio's primary investment objective is to
provide long-term capital growth consistent with the preservation of
capital. Current income is a secondary goal. It seeks to achieve its
goals by investing in common stocks of domestic and foreign issuers.
_________________________________________________________________________
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<PAGE>
The Dreyfus Corporation serves as the investment adviser and Fayez Sarofim
& Company serves as the investment sub-adviser to this Fund.
Socially Responsible Growth Fund. The Socially Responsible Growth Fund's
primary goal is to provide capital growth. It seeks to achieve this goal
by investing principally in common stocks, or securities convertible into
common stock, of companies which, in the opinion of the Fund's management,
not only meet traditional investments standards, but also show evidence
that they conduct their business in a manner that contributes to the
enhancement of the quality of life in America. Current income is a
secondary goal.
The Dreyfus Corporation serves as the investment adviser and NCM Capital
Management Group, Inc. serves as the investment sub-adviser to this Fund.
Stock Index Fund. The Stock Index Fund's investment objective is to
provide investment results that correspond to the price and yield
performance of publicly traded common stocks in the aggregate, as
represented by the Standard & Poor's 500 Composite Stock Price Index. The
Stock Index Fund is neither sponsored by nor affiliated with Standard &
Poor's Corporation.
Mellon Equity Associates serves as this Fund's investment adviser.
MERRILL LYNCH VARIABLE SERIES FUNDS, INC.:
Basic Value Focus Fund. The investment objective of the Fund is to seek
capital appreciation and, secondarily, income by investing in securities,
primarily equities, that management of the Fund believes are undervalued.
The Fund seeks special opportunities in securities that are selling at a
discount, either from book value or historical price-earnings ratios, or
seem capable of recovering from temporarily out-of-favor considerations.
Particular emphasis is placed on securities that provide an above-average
dividend return and sell at a below-average price-earnings ratio.
Global Strategy Focus Fund. The investment objective of the Fund is to
seek high total investment return by investing primarily in a portfolio of
equity and fixed income securities, including convertible securities, of
U.S. and foreign issuers. The Fund seeks to achieve its objective by
investing primarily in securities of issuers located in the U.S., Canada,
Western Europe and the Far East. The Fund may allocate investments
without prescribed limits among capital markets and types and maturities
of securities on the basis of various considerations which may affect
total anticipated return from investments.
High Current Income Fund. The investment objective of the Fund is to
obtain as high a level of current income as is consistent with prudent
investment management, and capital appreciation to the extent consistent
with the foregoing objective, by investing principally in fixed-income
securities that are rated in the lower rating categories of the
_________________________________________________________________________
Page 15
<PAGE>
established rating services or in unrated securities of comparable
quality, including junk bonds.
Domestic Money Market Fund. The investment objectives of the Fund are to
seek preservation of capital, maintain liquidity and achieve the highest
possible current income consistent with the foregoing objectives by
investing in short-term money market securities.
Merrill Lynch Asset Management, L.P. serves as the investment adviser to
these Funds.
Meeting Fund objectives depends on various factors, including, but not
limited to, how well the portfolio managers anticipate changing economic
and market conditions.
THERE IS NO ASSURANCE THAT ANY OF THESE FUNDS WILL ACHIEVE THEIR STATED
OBJECTIVES.
INVESTMENTS IN THESE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT OR ANY OTHER ENTITY OR PERSON.
Since each of the Funds is available to separate accounts of other
insurance companies offering variable annuity and variable life products,
and certain Funds may be available to qualified pension and retirement
plans, there is a possibility that a material conflict may arise between
the interests of the Separate Account and one or more other separate
accounts or plans investing in the Fund. In the event of a material
conflict, the affected insurance companies and plans will take any
necessary steps to resolve the matter, including stopping their separate
accounts from investing in the particular Fund. See the Funds'
prospectuses for greater detail.
Additional information concerning the investment objectives and policies
of each Fund, the investment advisory services and administrative services
of each Fund and charges of each Fund can be found in the current
prospectus for each Fund which accompany this Prospectus. The appropriate
Funds' prospectuses should be read carefully before any decision is made
concerning the allocation of Purchase Payments to, or transfers among, the
Sub-Accounts.
ADDITIONS, DELETIONS, OR SUBSTITUTIONS
The Company does not control the Funds and cannot guarantee that any of
the Sub-Accounts or any of the Funds will always be available for
allocation of Purchase Payments or transfers. The Company retains the
right to make changes in the Separate Account and its investments.
The Company reserves the right to eliminate the shares of any Fund held by
a Sub-Account and to substitute shares of another investment company for
the shares of any Fund, if the shares of that Fund are no longer available
_________________________________________________________________________
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<PAGE>
for investment or if, in the Company's judgment, investment in any Fund
would be inappropriate in view of the purposes of the Separate Account.
To the extent required by the Investment Company Act of 1940, as amended
("1940 Act"), or other applicable law, a substitution of shares
attributable to the Owner's interest in a Sub-Account will not be made
without prior notice to the Owner and the prior approval of the Securities
and Exchange Commission. Nothing contained herein shall prevent the
Separate Account from purchasing other securities for other series or
classes of variable annuity policies, or from effecting an exchange
between series or classes of variable policies on the basis of requests
made by Owners.
New Sub-Accounts may be established when, in the sole discretion of the
Company, marketing, tax, investment or other conditions so warrant. Any
new Sub-Accounts will be made available to existing Owners on a basis to
be determined by the Company. Each additional Sub-Account will purchase
shares in a Fund or in another mutual fund or investment vehicle. The
Company may also eliminate one or more Sub-Accounts, if in its sole
discretion, marketing, tax, investment or other conditions so warrant. In
the event any Sub-Account is eliminated, the Company will notify Owners
and request a re-allocation of the amounts invested in the eliminated
Sub-Account.
In the event of any substitution or change, the Company may make such
changes in the Contract as may be necessary or appropriate to reflect such
substitution or change. Furthermore, if deemed to be in the best
interests of persons having voting rights under the Contracts, the
Separate Account may be operated as a management company under the 1940
Act or any other form permitted by law, may be de-registered under such
Act in the event such registration is no longer required, or may be
combined with one or more separate accounts.
PERFORMANCE INFORMATION
From time to time, the Company may advertise yields and/or total returns
for the Sub-Accounts. THESE FIGURES ARE BASED ON HISTORICAL INFORMATION
AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE. For a description of
the methods used to determine yield and total return, see the Statement of
Additional Information.
YIELD DATA
The yield of the Money Market Sub-Account refers to the annualized income
generated by an investment in that Sub-Account over a specified seven-day
period. The Company may also advertise the effective yield of the Money
Market Sub-Account which is calculated similarly but, when annualized, the
income earned by an investment in that Sub-Account is assumed to be
reinvested. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment.
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The yield of a Sub-Account other than the Money Market Sub-Account refers
to the annualized income generated by an investment in the Sub-Account
over a specified 30-day period.
The yield calculations do not reflect the effect of any CDSC or premium
taxes that may be applicable to a particular Contract which would reduce
the yield of that Contract.
TOTAL RETURN DATA
The average annual total return of a Sub-Account refers to return
quotations assuming an investment has been held in the Sub-Account for
various periods of time including, but not limited to, a period measured
from the date the Sub-Account commenced operations. When a Sub-Account
has been in operation for one, five and ten years, respectively, the
average annual total return presented will be presented for these periods,
although other periods may also be provided. The average annual total
return quotations reflect the deduction of all applicable charges except
for premium taxes. In addition to average annual total return for a
Sub-Account, the Company may provide cumulative total return and/or other
non-standardized total return for the Sub-Account.
Reports and promotional literature may contain the ranking of any
Sub-Account derived from rankings of variable annuity separate accounts or
their investment products tracked by Lipper Analytical Services, Inc.,
VARDS, IBC/Donoghue's Money Fund Report, Financial Planning Magazine,
Money Magazine, Bank Rate Monitor, Standard & Poor's Indices, Dow Jones
Industrial Average, and other rating services, companies, publications, or
other persons who rank separate accounts or other investment products on
overall performance or other criteria. The Company may compare the
performance of a Sub-Account with applicable indices and/or industry
averages. Performance information may present the effects of tax-deferred
compounding on Sub-Account investment returns, or returns in general,
which may be illustrated by graphs, charts, or otherwise, and which may
include comparisons of investment return on a tax-deferred basis with
currently taxable investment return.
The Company may also advertise performance figures for the Sub-Accounts
based on the performance of a Fund prior to the time the Separate Account
commenced operations.
ANNUITY INVESTORS(SERVICEMARK) LIFE INSURANCE COMPANY AND THE SEPARATE
ACCOUNT
ANNUITY INVESTORS(SERVICEMARK) LIFE INSURANCE COMPANY
Annuity Investors(SERVICEMARK) Life Insurance Company (the "Company"),
formerly known as Carillon Life Insurance Company, is a stock life
insurance company. It was incorporated under the laws of the State of
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Ohio in 1981. The Company is principally engaged in the sale of fixed and
variable annuity policies.
The Company is a wholly-owned subsidiary of Great American Life Insurance
Company which is a wholly-owned subsidiary of American Annuity Group,
Inc., a publicly traded insurance holding company. That company is in
turn indirectly controlled by American Financial Group, Inc., a publicly
traded holding company.
The home office of the Company is located at 250 East Fifth Street,
Cincinnati, Ohio 45202.
PUBLISHED RATINGS
The Company may from time to time publish in advertisements, sales
literature and reports to Owners, the ratings and other information
assigned to it by one or more independent rating organizations such as
A.M. Best Company, Standard & Poor's, and Duff & Phelps. The purpose of
the ratings is to reflect the financial strength and/or claims-paying
ability of the Company and should not be considered as reflecting on the
investment performance of assets held in the Separate Account. Each year
the A.M. Best Company reviews the financial status of thousands of
insurers, culminating in the assignment of Best's Ratings. These ratings
reflect their current opinion of the relative financial strength and
operating performance of an insurance company in comparison to the norms
of the life/health insurance industry. In addition, the claims-paying
ability of the Company as measured by Standard & Poor's or Duff & Phelps
may be referred to in advertisements or sales literature or in reports to
Owners. These ratings are opinions of those agencies as to an operating
insurance company's financial capacity to meet the obligations of its
insurance and annuity policies in accordance with their terms. Such
ratings do not reflect the investment performance of the Separate Account
or the degree of risk associated with an investment in the Separate
Account.
THE SEPARATE ACCOUNT
Annuity Investors(SERVICEMARK) Variable Account A was established by the
Company as an insurance company separate account under the laws of the
State of Ohio on May 26, 1995, pursuant to resolutions of the Company's
Board of Directors. The Separate Account is registered with the
Securities and Exchange Commission under the 1940 Act as a unit investment
trust. However, the Securities and Exchange Commission does not supervise
the management or the investment practices or policies of the Separate
Account.
The assets of the Separate Account are owned by the Company but they are
held separately from the other assets of the Company. The Ohio Revised
Code provides that the assets of a separate account are not chargeable
with liabilities incurred in any other business operation of the Company.
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Income, gains and losses incurred on the assets in the Separate Account,
whether or not realized, are credited to or charged against the Separate
Account, without regard to other income, gains or losses of the Company.
Therefore, the investment performance of the Separate Account is entirely
independent of the investment performance of the Company's general account
assets or any other separate account maintained by the Company.
Under Ohio law, the assets of the Separate Account will be held for the
exclusive benefit of Owners of, and the persons entitled to payment under,
the Contracts offered by this Prospectus and under all other contracts
which provide for accumulated values or dollar amount payments to reflect
investment results of the Separate Account. The obligations arising under
the Contracts are obligations of the Company.
The Separate Account is divided into Sub-Accounts, each of which invests
solely in a specific corresponding Fund. (See "The Funds," page __.)
Changes to the Sub-Accounts may be made at the discretion of the Company.
(See "Additions, Deletions, or Substitutions," page __.)
THE FIXED ACCOUNT
The Fixed Account is a part of the Company's general account. Because of
exemptive and exclusionary provisions, interests in the general account
have not been registered under the Securities Act of 1933, nor is the
general account registered as an investment company under the 1940 Act.
Accordingly, neither the general account nor any interest therein is
generally subject to the provisions of these Acts, and the staff of the
Securities and Exchange Commission does not generally review the
disclosures in the prospectus relating to the Fixed Account. Disclosures
regarding the Fixed Account and the general account may, however, be
subject to certain generally applicable provisions of the federal
securities laws relating to the accuracy and completeness of statements
made in the prospectus.
The Company has sole discretion to invest the assets of the Fixed Account,
subject to applicable law. The Company delegates the investment of the
assets of the Fixed Account to American Money Management Corporation.
Allocation of any amounts to the Fixed Account does not entitle Owners to
share directly in the investment experience of these assets. The Company
assumes the risk of investment gain or loss on the portion of the Account
Value allocated to the Fixed Account. All assets held in the general
account are subject to the Company's general liabilities from business
operations.
FIXED ACCOUNT OPTIONS
There are currently four options under the Fixed Account: the Fixed
Accumulation Account option; and the guarantee period options referred to
in the Contract as the Fixed Account options One-Year, Three-Year and
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Five-Year Fixed, respectively. Additional Fixed Account options may be
offered by the Company at any time. Purchase Payments allocated and
amounts transferred to the Fixed Account options accumulate interest at
the applicable current interest rate declared by the Company's Board of
Directors, and if applicable, for the duration of the guarantee period
selected.
The Company guarantees a minimum rate of interest for the Fixed Account
options. The guaranteed rate is 3% per year.
RENEWAL OF FIXED ACCOUNT OPTIONS
The following provisions apply to all Fixed Account options except the
Fixed Accumulation Account option.
At the end of a guarantee period, and for the thirty days immediately
preceding the end of such guarantee period, the Owner may elect a new
option to replace the Fixed Account option that is then expiring. The
entire amount maturing may be reallocated to any of the then current
options under the Contract (including the various Sub-Accounts within the
Separate Account), except that a Fixed Account option with a guarantee
period that would extend past such Commencement Date may not be selected.
In particular, in the case of renewals occurring within one year of such
Commencement Date, the only Fixed Account option available is the Fixed
Accumulation Account.
If the Owner does not specify a new option in accordance with the
preceding paragraph, the Owner will be deemed to have elected the same
Fixed Account option, so long as the guarantee period of such option does
not extend beyond the Annuity Commencement Date. In the event that such a
period would extend beyond the Annuity Commencement Date, the Owner will
be deemed to have selected the Fixed Account option with the longest
available guarantee period that expires prior to the Annuity Commencement
Date.
THE CONTRACT
The Contract is an individual flexible premium deferred annuity. The
rights and benefits are described below and in the Contract. The Company
reserves the right to make any modification to conform the Contracts
thereunder to, or give the Owner the benefit of, any applicable law. The
obligations under the Contracts are obligations of the Company.
For each Contract, a different Account will be established and Fixed
Account Values, Variable Account Values, and benefits and charges will be
calculated separately. The various administrative rules described below
will apply separately to each Contract, unless otherwise noted. The
Company reserves the right to terminate any Contract for which the Account
Value is less than $500.
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RIGHT TO CANCEL
The Owner may cancel the Contract by giving the Company written notice of
cancellation and returning the Contract before midnight of the twentieth
day (or longer if required by state law) following the date the Owner
receives the Contract. The Contract must be returned to the Company, and
the required notice must be given in person, or to the agent who sold it
to the Owner, or by mail. If by mail, the return of the Contract or the
notice is effective on being postmarked, with the proper address and with
postage paid. If the Owner cancels the Contract as set forth above, the
Contract will be void and the Company will refund the Purchase Payment(s)
as provided plus or minus any investment gains or losses under the
Contract as of the date the returned Contract is received by the Company,
unless otherwise required by law.
PURCHASE PAYMENTS
PURCHASE PAYMENTS
All Purchase Payments must be received at the Administrative Office.
Each Purchase Payment will be applied by the Company to the credit of the
Owner's Account. If the application form is in good order, the Company
will apply the initial Purchase Payment to an account for the Owner within
two business days of receipt of the Purchase Payment at the Administrative
Office. If the application form is not in good order, the Company will
attempt to get the application form in good order within five business
days. If the application form is not in good order at the end of this
period, the Company will inform the Owner of the reason for the delay and
that the Purchase Payment will be returned immediately unless he or she
specifically consents to the Company keeping the Purchase Payment until
the application form is in good order. Once the application form is in
good order, the Purchase Payment will be applied to the Owner's Account
within two business days.
Additional Purchase Payments may be made at any time prior to the Annuity
Commencement Date. Each additional Purchase Payment is credited to a
Contract as of the next Valuation Date following the receipt of such
additional Purchase Payment.
No Purchase Payment for any Contract may exceed $500,000 without prior
approval of the Company.
ALLOCATION OF PURCHASE PAYMENTS
Purchase Payments will be allocated to the Fixed Account and/or to the
Sub-Accounts according to the instructions in the Owner's application form
or subsequent Written Request, or by another method acceptable to the
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Company. Allocations are made in percentages, and whole percentages must
be used.
ACCOUNT VALUE
Before the Annuity Commencement Date, the Account Value is equal to the
Fixed Account Value plus the Variable Account Value.
FIXED ACCOUNT VALUE
The Fixed Account Value at any time is equal to: (a) the Purchase
Payment(s) allocated to the Fixed Account; plus (b) amounts transferred to
the Fixed Account; plus (c) interest credited to the Fixed Account; less
(d) any charges, surrenders, deductions, amounts transferred from the
Fixed Account or other adjustments made in accordance with the provisions
of the Contract.
VARIABLE ACCOUNT VALUE
The Variable Account Value for the Contract at any time is the sum of the
value of each Sub-Account ("Sub-Account Value") selected by the Owner for
the Contract on the Valuation Date most recently completed.
Purchase Payments may be allocated among, and Account Values may be
transferred to, the various Sub-Accounts within the Separate Account,
subject to the provisions of the Contract governing transfers. For each
Sub-Account, the Purchase Payment(s) or amounts transferred are converted
into Accumulation Units. The number of Accumulation Units credited is
determined by dividing the dollar amount directed to each Sub-Account by
the Accumulation Unit Value for that Sub-Account at the end of the
Valuation Period on which the Purchase Payment(s) or transferred amount is
received.
The following events will result in the cancellation of an appropriate
number of Accumulation Units of a Sub-Account:
(1) transfer from a Sub-Account;
(2) full or partial surrender of the Variable Account Value;
(3) payment of a Death Benefit;
(4) application of the Variable Account Value to a Settlement Option;
(5) deduction of the Contract Maintenance Fee; or
(6) deduction of a Transfer Fee.
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Accumulation Units will be canceled, as the case may be: (i) as of the
end of the Valuation Period during which the Company received a Written
Request regarding the event giving rise to such cancellation;
(ii) the applicable Commencement Date; or (iii) the end of the Valuation
Period on which the Contract Maintenance Fee or a Transfer Fee is due.
The Variable Account Value for a Contract at any time is equal to the sum
of the number of Accumulation Units attributable to that Contract for each
Sub-Account multiplied by the Accumulation Unit value ("Accumulation Unit
Value") for each Sub-Account at the end of the Valuation Period.
ACCUMULATION UNIT VALUE
The initial Accumulation Unit Value for each Sub-Account, with the
exception of the Money Market Sub-Account, was set at $10. The initial
Accumulation Unit Value for the Money Market Sub-Account was set at $1.00.
Thereafter, the Accumulation Unit Value at the end of each Valuation
Period is the Accumulation Unit Value at the end of the previous Valuation
Period multiplied by the Net Investment Factor, as described below.
NET INVESTMENT FACTOR
The Accumulation Unit Value for each Sub-Account for any Valuation Period
is determined by the Net Investment Factor. The Net Investment Factor is
a factor applied to measure the investment performance of a Sub-Account
from one Valuation Period to the next. Each Sub-Account has a Net
Investment Factor for each Valuation Period which may be greater or less
than one. Therefore, the value of an Accumulation Unit may increase or
decrease. The Net Investment Factor for any Sub-Account for any Valuation
Period is determined by dividing (1) by (2) and subtracting (3) from the
result, where:
(1) is equal to:
a. the Net Asset Value per share of the Fund held in the
Sub-Account, determined at the end of the applicable Valuation
Period; plus
b. the per share amount of any dividend or net capital gain
distributions made by the Fund held in the Sub-Account, if the
"ex-dividend" date occurs during the applicable Valuation
Period; plus or minus
c. a per share charge or credit for any taxes reserved for,
which is determined by the Company to have resulted from the
investment operations of the Sub-Account;
(2) is the Net Asset Value per share of the Fund held in the Sub-Account,
determined at the end of the immediately preceding Valuation Period; and
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(3) is the factor representing the Mortality and Expense Risk Charge and
the Administration Charge deducted from the Sub-Account for the number of
days in the Valuation Period.
TRANSFERS
Prior to the applicable Commencement Date, the Owner may transfer amounts
in a Sub-Account to a different Sub-Account and/or one or more of the
Fixed Account options. The minimum transfer amount is $500. If the
Sub-Account balance is less than $1,000 at the time of the transfer, the
entire amount of the Sub-Account balance must be transferred. The Owner
may also transfer amounts from any Fixed Account option to any other Fixed
Account option and/or one or more of the Sub-Accounts. If a transfer is
being made from a Fixed Account option pursuant to the "Renewal" provision
of the "FIXED ACCOUNT" section of this Prospectus, then the entire amount
of that Fixed Account option subject to renewal at that time may be
transferred to any one or more of the Sub-Accounts. In any other case,
transfers from any Fixed Account option are subject to a cumulative limit
during each Contract Year of 20% of the Fixed Account option's value as of
the most recent Contract anniversary. Fixed Account transfers are not
permitted during the first Contract Year. The minimum transfer amount
from any Fixed Account Option is $500. The Company may from time to time
change the amount available for transfer from the Fixed Accumulation
Account. Amounts previously transferred from Fixed Account options to the
Sub-Accounts may not be transferred back to the Fixed Account options for
a period of six months from the date of transfer.
The Company charges a Transfer Fee of $25 for each transfer in excess of
twelve during the same Contract Year.
The Company reserves the right, in the Company's sole discretion and at
any time without prior notice, to terminate, suspend or modify the
transfer privileges described above.
TELEPHONE TRANSFERS
An Owner may place a request for all or part of the Account Value to be
transferred by telephone. All transfers must be in accordance with the
terms of the Contract. Transfer instructions are currently accepted on
each Valuation Date between 9:00 a.m. and 6:00 p.m. Eastern Time at (800)
789-6771. Once instructions have been accepted, they may not be
rescinded; however, new telephone instructions may be given the following
day.
The Company will not be liable for complying with telephone instructions
which the Company reasonably believes to be genuine, or for any loss,
damage, cost or expense in acting on such telephone instructions. The
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Person Controlling Payments will bear the risk of such loss. The Company
will employ reasonable procedures to determine that telephone instructions
are genuine. If the Company does not employ such procedures, the Company
may be liable for losses due to unauthorized or fraudulent instructions.
These procedures may include, among others, tape recording telephone
instructions.
DOLLAR COST AVERAGING
Prior to the applicable Commencement Date, the Owner may establish
automatic transfers from the Money Market Sub-Account to any of the other
Sub-Accounts, on a monthly or quarterly basis, by submitting to the
Administrative Office a Dollar Cost Averaging application form. No Dollar
Cost Averaging transfers may be made to any of the Fixed Account options.
The transfers will begin within 30 days of the receipt of such application
form. The Company may, in its sole discretion, set the monthly or
quarterly Dollar Cost Averaging transfer date for an Owner's election.
In order to be eligible for Dollar Cost Averaging the value of the Money
Market Sub-Account must be at least $10,000, and the minimum amount that
can be transferred is $500 per month.
Dollar Cost Averaging will automatically terminate if any Dollar Cost
Averaging transfer would cause the balance of the Money Market Sub-Account
to fall below $500. At that time, the Company will then transfer the
balance of the Money Market Sub-Account to the other Sub-Accounts in the
same percentage distribution as directed in the Dollar Cost Averaging
Application form.
Dollar Cost Averaging transfers will not count toward the twelve transfers
permitted under the Contract without a Transfer Fee charge.
Before electing Dollar Cost Averaging, an Owner should consider the risks
involved in switching between investments available under the Contract.
Dollar Cost Averaging requires regular investments regardless of
fluctuating price levels and does not guarantee profits or prevent losses
in a declining market. An Owner should consider his or her financial
ability to continue Dollar Cost Averaging transfers through periods of
changing price levels.
The Owner may terminate Dollar Cost Averaging services at any time, but
must give the Company at least 30 days' notice to change any automatic
transfer instructions that are currently in place. In addition, the
Company reserves the right to terminate, modify or suspend the Dollar Cost
Averaging option at any time. Currently, the Company does not charge a
fee for Dollar Cost Averaging services. However, the Company reserves the
right to impose an annual fee not to exceed $25 for each Dollar Cost
Averaging service performed by the Company.
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PORTFOLIO REBALANCING
In connection with the allocation of Purchase Payments to the Sub-Accounts
and/or the Fixed Accumulation Account, the Owner may elect to have the
Company perform Portfolio Rebalancing services. The election of Portfolio
Rebalancing instructs the Company to automatically transfer amounts
between the Sub-Accounts and the Fixed Accumulation Account to maintain
the percentage allocations selected by the Owner.
The Owner may elect Portfolio Rebalancing on the application form or by
subsequent Written Request. In order to elect Portfolio Rebalancing after
the Contract has been issued, the Owner must submit a Written Request for
Portfolio Rebalancing to the Company and the Owner must have a minimum
Account Value of $10,000. Portfolio Rebalancing will be performed on a
quarterly basis.
Portfolio Rebalancing transfers will not count toward the twelve transfers
permitted under the Contract without a Transfer Fee charge. The Company
may, in its sole discretion, set the Portfolio Rebalancing date.
The Owner may terminate Portfolio Rebalancing services, at any time, by
Written Request to the Company. In addition, the Company reserves the
right to terminate, modify or suspend the Portfolio Rebalancing option at
any time. Currently, the Company does not charge a fee for Portfolio
Rebalancing services. However, the Company reserves the right to impose
an annual fee not to exceed $25 for each Portfolio Rebalancing service
performed by the Company.
INTEREST SWEEP
Prior to the applicable Commencement Date, the Owner may establish
automatic transfers of the income from each Fixed Account option selected
on the Interest Sweep Application form to the Sub-Accounts, on a quarterly
basis. Transfers will begin on the next quarterly Interest Sweep date
that is at least 30 days after receipt of such Application form at the
Administrative Office. The Company may, at its sole discretion, set the
quarterly Interest Sweep date.
In order to be eligible for the Interest Sweep option the value of each
Fixed Account option selected on the Interest Sweep Application form must
be at least $5,000 and the maximum amount that can be transferred from
each Fixed Account option so selected is 20% of such Fixed Account
option's value per year.
Interest Sweep transfers will not count toward the twelve transfers
permitted under the Contract without a Transfer Fee charge.
The Owner may terminate participation in the Interest Sweep option, at any
time, by Written Request to the Company. In addition, the Company
reserves the right to terminate, modify or suspend the Interest Sweep
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option at any time. Currently, the Company does not charge a fee for
Interest Sweep services. However, the Company reserves the right to
impose an annual fee not to exceed $25 for each Interest Sweep service
performed by the Company.
CHANGES BY THE COMPANY
The Company reserves the right, at any time, to terminate, suspend or
modify the transfer privileges described above without prior notice to
Owners, as permitted by applicable law.
SURRENDERS
SURRENDER VALUE
The Owner may surrender all or part of the Surrender Value of a Contract.
Full or partial surrenders of the Surrender Value may be made by Written
Request at any time prior to the Annuity Commencement Date. The Surrender
Value will be the Surrender Value at the end of the Valuation Period in
which the Written Request is received. The Surrender Value at any time is
equal to the Account Value as of that Valuation Period less any applicable
Contingent Deferred Sales Charge ("CDSC"), less any outstanding loans and
less any applicable premium tax not previously deducted. On full
surrender, a full Contract Maintenance Fee also will be deducted as part
of the calculation of the Surrender Value. A full or partial surrender
may be subject to a CDSC as set forth in this prospectus, except that such
charge will not apply to: (1) any amounts available for withdrawal under
the Free Withdrawal Privilege; (2) any portion of the Account Value in
excess of total Purchase Payments; (3) any portion of the Account Value
attributable to Purchase Payment(s) that are no longer subject to the
charge; or (4) payment of the Death Benefit.
The CDSC is calculated separately for each Purchase Payment. Surrenders
will be deemed to be withdrawn first from the portion of the Account Value
in excess of total Purchase Payments and then from Purchase Payments. For
this purpose, Purchase Payment(s) are deemed to be withdrawn on a
"first-in, first-out" (FIFO) basis. Surrenders will result in the
cancellation of Accumulation Units from each applicable Sub-Account(s)
and/or a reduction of the Owner's Fixed Account Value. In the case of a
full surrender, the Owner's participation interest under the Contract will
be canceled. The CDSC may be waived in whole or in part under certain
circumstances. (See "Contingent Deferred Sales Charge ("CDSC")," page __.)
The Company reserves the right to terminate a Contract if a partial
surrender would reduce an Owner's Account Value to less than the $500
minimum balance.
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The Contract Maintenance Fee, unless waived, will be deducted from a full
surrender before the application of any CDSC. (See "Charges and
Deductions," page __.)
Surrenders may be subject to a 10% premature distribution penalty tax if
made before the Owner reaches age 59 1/2, and may further be subject to
federal, state or local income tax, as well as significant tax law
restrictions in the case of tax-qualified Contracts. (See "Federal Tax
Matters," page __.)
SUSPENSION OR DELAY IN PAYMENT OF SURRENDER VALUE
The Company may suspend or delay the date of payment of a partial or full
surrender of the Variable Account Value for any period if:
(1) the New York Stock Exchange ("NYSE") is closed or trading on the
NYSE is restricted;
(2) an emergency exists (as determined by the Securities and Exchange
Commission) as a result of which (a) the disposal of securities in
the Separate Account is not reasonably practicable or (b) it is
not reasonably practicable to determine fairly the value of the
net assets in the Separate Account; or
(3) the Securities and Exchange Commission so permits for the
protection of security holders.
The Company further reserves the right to delay payment of any partial or
full surrender of the Fixed Account Value for up to six months.
A surrender request will be effective when all appropriate surrender
request forms are received. Payments of any amounts derived from a
Purchase Payment paid by check may be delayed until the check has cleared.
SINCE THE OWNER ASSUMES THE INVESTMENT RISK AND BECAUSE CERTAIN SURRENDERS
ARE SUBJECT TO A CDSC, THE TOTAL AMOUNT PAID UPON SURRENDER OF THE
CONTRACT (TAKING INTO ACCOUNT ANY PRIOR SURRENDERS) MAY BE MORE OR LESS
THAN THE TOTAL PURCHASE PAYMENTS.
Since the tax-qualified Contracts offered by this Prospectus will be
issued in connection with retirement plans which meet the requirements of
Sections 401, 403, 408 or 457 of the Code, as applicable, reference should
be made to the terms of the particular plans for any additional
limitations or restrictions on surrenders.
FREE WITHDRAWAL PRIVILEGE
After the first Contract Year and subject to the provisions of the
Contract, the Owner may take partial surrenders annually of up to 10% of
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the Account Value as of the first Valuation Date of any given Contract
Year without imposition of a CDSC.
SYSTEMATIC WITHDRAWAL OPTION
Prior to the applicable Commencement Date, the Owner, by Written Request
to the Administrative Office, may elect to automatically withdraw money
from the Fixed Account and/or the Sub-Accounts. To be eligible for the
Systematic Withdrawal Option, the Account Value must be at least $10,000
at the time of election. The minimum monthly amount that can be withdrawn
is $100. Systematic withdrawals will be subject to the CDSC to the extent
the amount withdrawn exceeds the Free Withdrawal Privilege (See "Charges
and Deductions," page __.) The Company reserves the right to discontinue
offering systematic withdrawals or to assess a processing fee not to
exceed $25 per service performed. The Owner may begin or discontinue
systematic withdrawals at any time by Written Request to the Company, but
at least 30 days' notice must be given to change any systematic withdrawal
instructions that are currently in place.
Systematic withdrawals may have tax consequences or may be limited by tax
law restrictions. (See "Federal Tax Matters," page __.)
CONTRACT LOANS
If permitted under the Contract, an Owner may obtain a loan using his or
her interest under such Contract as the only security for the loan. Loans
are subject to provisions of the Code. A tax adviser should be consulted
prior to exercising loan privileges. Loan provisions are described in the
loan endorsement.
The amount of any loan will be deducted from any Death Benefit or full
surrender. In addition, a loan, whether or not repaid, will have a
permanent effect on the Account Value because the investment results of
the investment options will only apply to the unborrowed portion of the
Account Value. The longer the loan is outstanding, the greater the effect
is likely to be. The effect could be favorable or unfavorable. If the
investment results are greater than the rate being credited on amounts
held in the loan account while the loan is outstanding, the Account Value
will not increase as rapidly as it would if no loan were outstanding. If
investment results are below that rate, the Account Value will be higher
than it would have been if no loan had been outstanding.
DEATH BENEFIT
WHEN A DEATH BENEFIT WILL BE PAID
A Death Benefit will be paid under the Contract if:
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(1) the Owner or the joint owner, if any, dies before the Annuity
Commencement Date and before the Contract is fully surrendered;
(2) the Death Benefit Valuation Date has occurred; and
(3) a spouse does not become the Successor Owner.
If a Death Benefit becomes payable:
(1) it will be in lieu of all other benefits under the Contract; and
(2) all other rights under the Contract will be terminated except for
rights related to the Death Benefit.
The payee of any Death Benefit shall be the Beneficiary.
Only one Death Benefit will be paid under the Contract.
DEATH BENEFIT VALUES
If the Owner dies before attaining Age 75 and before the Annuity
Commencement Date, the Death Benefit is an amount equal to the greatest
of:
(1) the Account Value on the Death Benefit Valuation Date, less any
applicable premium tax not previously deducted, and less any
outstanding loans;
(2) the total Purchase Payment(s), less any applicable premium tax not
previously deducted, less any partial surrenders, and less any
outstanding loans; or
(3) the largest Death Benefit amount on any Contract Anniversary prior
to death that is an exact multiple of five and occurs prior to the
Death Benefit Valuation Date, less any applicable premium tax not
previously deducted, less any partial surrenders after such Death
Benefit was determined, and less any outstanding loans.
If the Owner dies after attaining Age 75 and before the Annuity
Commencement Date, the Death Benefit is an amount equal to the greatest
of:
(1) the Account Value on the Death Benefit Valuation Date, less any
applicable premium tax not previously deducted, and less any
outstanding loans;
(2) the total Purchase Payment(s), less any applicable premium tax not
previously deducted, less any partial surrenders, and less any
outstanding loans; or
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(3) the largest Death Benefit amount on any Contract Anniversary prior
to death that is both an exact multiple of five and occurs prior
to the date on which you attained Age 75, less any applicable
premium tax not previously deducted, less any partial surrenders
after such Death Benefit was determined, and less any outstanding
loans.
If the Contract is issued after the Owner's age 75, and the Owner dies
before the Annuity Commencement Date, the amount of the Death Benefit will
be the greater of:
(1) the Account Value on the Death Benefit Valuation Date, less any
applicable premium tax not previously deducted, and less any
outstanding loans; or
(2) the total Purchase Payment(s), less any applicable premium tax not
previously deducted, less any partial surrenders, and less any
outstanding loans.
After the Owner's death and prior to the Death Benefit Commencement Date,
the Beneficiary may elect to have the Death Benefit paid in one lump sum,
pursuant to any available Settlement Option under the Contract or in any
other manner acceptable to the Company.
BENEFICIARY
Non-tax-qualified Contracts may be jointly owned by two people. If there
is a joint owner and that joint owner survives the Owner, the joint owner
is the Beneficiary, regardless of any designation made by the Owner. If
there is no surviving joint owner, the Beneficiary is the person or
persons so designated in the application, if any, or under the Change of
Beneficiary provision of the Contract. If the Owner has not designated a
Beneficiary, or if no Beneficiary designated by the Owner survives the
Owner, then the Beneficiary will be the Owner's estate.
CHARGES AND DEDUCTIONS
There are two types of charges and deductions. First, there are charges
assessed under the Contract. These charges include the CDSC, the
Administration Charge, the Mortality and Expense Risk Charge, Premium
Taxes and Transfer Fees. All of these charges are described below and
some may not be applicable to every Contract. Second, there are Fund
expenses for fund management fees and administration expenses. These fees
are described in the prospectus and statement of additional information
for each Fund.
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CONTINGENT DEFERRED SALES CHARGE ("CDSC")
No deduction for front-end sales charges is made from Purchase Payments.
However, the Company may deduct a CDSC of up to 7% of Purchase Payments on
certain surrenders to partially cover certain expenses incurred by the
Company relating to the sale of the Contract, including commissions paid,
the costs of preparation of sales literature and other promotional costs
and acquisition expenses.
The CDSC percentage varies according to the number of full years elapsed
between the date of receipt of a Purchase Payment and the date a Written
Request for surrender is made. The amount of the CDSC is determined by
multiplying the amount withdrawn subject to the CDSC by the CDSC
percentage in accordance with the following table. Surrenders will be
applied first to accumulated earnings (which may be surrendered without
charge) and then to Purchase Payments on a first-in, first-out basis;
surrenders will be made from the oldest Purchase Payment first.
Number of Full Years Elapsed Between Contingent Deferred Sales
Date of Receipt of Purchase Payment Charge as a Percentage of
and Date Written Request for Associated Purchase Payment
Surrender Received Surrendered
0 7%
1 6%
2 5%
3 4%
4 3%
5 2%
6 1%
7 or more 0%
In no event shall the CDSC assessed against the Contract exceed 7% of the
aggregate Purchase Payment(s).
Any Purchase Payments that have been held by the Company for at least
seven years may be surrendered free of any CDSC. In addition, during any
Contract Year after the first Contract Year, the CDSC will not be imposed
on the surrender of up to 10% of the Account Value as of the last day of
the previous Contract Year ("Free Withdrawal Privilege"). If the Free
Withdrawal Privilege is not exercised during a Contract Year, it does not
carry over to the next Contract Year.
No CDSC is assessed upon payment of the Death Benefit. Any applicable
CDSC will be deducted from the amount requested for partial and full
surrenders.
The CDSC arising from a surrender of the Contract will be waived in all
cases if: (i) all or part of the Account Value is applied to the purchase
of an annuity from the Company for life or for a noncommutable period of
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five years or more; or (ii) the Owner is "disabled" as that term is
defined in the Social Security Act of 1935, as amended.
The CDSC also will be waived in all cases where the Contract is modified
by the Long-Term Care Waiver Rider. In that case, the CDSC will be waived
if the Owner is confined in a licensed Hospital or Long-Term Care
Facility, as those terms are defined in the Rider, for at least 90 days
beginning on or after the first Contract Anniversary. This Rider may not
be available in all jurisdictions.
The Company reserves the right to terminate, suspend or modify waivers of
the CDSC, without prior notice to Owners, as permitted by applicable law.
MAINTENANCE AND ADMINISTRATIVE CHARGES
On each Contract Anniversary, the Company deducts an annual Contract
Maintenance Fee as partial compensation for expenses relating to the issue
and maintenance of the Contract, and the Separate Account. The annual
Contract Maintenance Fee is $25. The Company reserves the right to
increase the Contract Maintenance Fee and guarantees that the Contract
Maintenance Fee will not exceed $40. Any increase in the Contract
Maintenance Fee will apply only to deductions after the effective date of
the change. If the Contract is surrendered on any day other than on the
Contract Anniversary, the Contract Maintenance Fee will be deducted in
full at the time of such surrender. If a Variable Annuity Benefit is
elected, the Contract Maintenance Fee will be deducted on a pro-rata basis
from each Sub-Account in which the Owner's Account is invested.
The Company will waive the Contract Maintenance Fee if the Account Value
is equal to or greater than $30,000 on the date of the assessment of the
Charge.
Currently, the Company imposes no Administration Charge to reimburse the
Company for those administrative expenses attributable to the Contract and
the Separate Account which exceed the revenues received from the Contract
Maintenance Fee and any Transfer Fee. However, the Company reserves the
right to impose an Administration Charge to be deducted at the end of each
Valuation Period (both before and after the Annuity Commencement Date)
from the Net Asset Value of each Sub-Account of the Separate Account at an
effective annual rate guaranteed not to exceed 0.20%. There will be no
Administration Charge imposed unless administrative expenses exceed
revenues received from the Contract Maintenance Fee and any Transfer Fees.
The Company will provide 30 days, written notice in advance of any change
in fees. The Company has not imposed an Administration Charge and has set
the Contract Maintenance Fee at a level such that the Company will recover
no more than the anticipated and estimated costs associated with
administering the Contract and Separate Account. The Company does not
expect to make a profit from the administrative charges of a particular
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Contract. The Company does not expect to make a profit from the Contract
Maintenance Fee.
MORTALITY AND EXPENSE RISK CHARGE
The Company imposes a Mortality and Expense Risk Charge as compensation
for bearing certain mortality and expense risks under the Contract. For
assuming these risks, the Company makes a daily charge equal to .003403%
corresponding to an effective annual rate of 1.25% of the daily Net Asset
Value of each Sub-Account in the Separate Account. The approximate
portion of this charge estimated to be attributable to mortality risks is
0.75%; the approximate portion of this charge attributable to expense
risks is 0.50%. This charge is imposed before the Annuity Commencement
Date and after the Annuity Commencement Date if a Variable Annuity Benefit
is selected. The Company guarantees that the Mortality and Expense Risk
Charge will never increase for a Contract. The Mortality and Expense Risk
Charge is reflected in the Accumulation Unit values for each Sub-Account.
The mortality risks assumed by the Company arise from its contractual
obligations to make annuity payments (determined in accordance with the
annuity tables and other provisions contained in the Contract) and to pay
Death Benefits prior to the Annuity Commencement Date.
The Company also bears substantial risk in connection with the Death
Benefit before the Annuity Commencement Date, since in certain
circumstances the Company may be obligated to pay a larger Death Benefit
amount than the then-existing Account Value of the Contract.
The expense risk assumed by the Company is the risk that the Company's
actual expenses in administering the Contracts and the Separate Account
will exceed the amount recovered through the Contract Maintenance Fees and
Transfer Fees.
If the Mortality and Expense Risk Charge is insufficient to cover actual
costs and risks assumed, the loss will fall on the Company. Conversely,
if this charge is more than sufficient, any excess will be profit to the
Company. Currently, the Company expects a profit from this charge.
The Company recognizes that the CDSC may not generate sufficient funds to
pay the cost of distributing the Contracts thereunder. To the extent that
the CDSC is insufficient to cover the actual cost of Contract
distribution, the deficiency will be met from the Company's general
corporate assets which may include amounts, if any, derived from the
Mortality and Expense Risk Charge.
PREMIUM TAXES
Certain state and local governments impose premium taxes. These taxes
currently range up to 5.0% depending upon the jurisdiction. The Company,
in its sole discretion and in compliance with any applicable state law,
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will determine the method used to recover premium tax expenses incurred.
The Company will deduct any applicable premium taxes from the Account
Value either upon death, surrender, annuitization, or at the time Purchase
Payments are made to the Contract, but no earlier than when the Company
has a tax liability under state law.
TRANSFER FEE
The Company currently imposes a $25 fee for each transfer in excess of
twelve in a single Contract Year. The Company will deduct the charge from
the amount transferred.
FUND EXPENSES
The value of the assets in the Separate Account reflects the value of Fund
shares and therefore the fees and expenses paid by each Fund. A complete
description of the fees, expenses, and deductions from the Funds are found
in the respective prospectuses for the Funds. (See "The Funds" page __)
SETTLEMENT OPTIONS
ANNUITY COMMENCEMENT DATE
Unless otherwise requested by the Owner, the Annuity Commencement Date
will be the date specified on the Contract Specifications page. The
Annuity Commencement Date may be changed by the Owner by Written Request
at least 30 days prior to the then-current Annuity Commencement Date. The
Annuity Commencement Date may be changed to any date not later than such
date as may be required or permitted by law.
ELECTION OF SETTLEMENT OPTION
If the Owner is alive on the Annuity Commencement Date and unless
otherwise directed, the Company will apply the Account Value, less premium
taxes, if any, according to the Settlement Option elected.
If no election has been made on the Annuity Commencement Date, the Company
will begin payments based on Settlement Option 1 (Life Annuity with
Payments for at Least a Fixed Period), described below, with a fixed
period of 120 monthly payments assured.
BENEFIT PAYMENTS
Benefit Payments may be calculated and paid: (1) as a Fixed Dollar Annuity
Benefit; (2) as a Variable Dollar Annuity Benefit; or (3) as a combination
of both.
If only a Fixed Dollar Benefit is to be paid, the Company will transfer
all of the Account Value to the Company's general account on the
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applicable Commencement Date, or on the Death Benefit Valuation Date (if
applicable). Similarly, if only a Variable Dollar Benefit is elected, the
Company will transfer all of the Account Value to the Sub-Accounts as of
the end of the Valuation Period immediately prior to the applicable
Commencement Date; the Company will allocate the amount transferred among
the Sub-Accounts in accordance with a Written Request. No transfers
between the Fixed Dollar Benefit and the Variable Dollar Benefit will be
allowed after the Commencement Date. However, after the Variable Dollar
Benefit has been paid for at least twelve months, the Person Controlling
Payments may, no more than once each twelve months thereafter, transfer
all or part of the Benefit Units upon which the Variable Dollar Benefit is
based from the Sub-Account(s) then held, to Benefit Units in different
Sub-Account(s).
If a Variable Dollar Benefit is elected, the amount to be applied under
that benefit is the Variable Account Value as of the end of the Valuation
Period immediately preceding the applicable Commencement Date. If a Fixed
Dollar Benefit is to be paid, the amount to be applied under that benefit
is the Fixed Account Value as of the applicable Commencement Date, or as
of the Death Benefit Valuation Date (if applicable).
FIXED DOLLAR BENEFIT
Fixed Dollar Benefit payments are determined by multiplying the Fixed
Account Value (expressed in thousands of dollars and after deduction of
any fees and charges, loans, or applicable premium tax not previously
deducted) by the amount of the monthly payment per $1,000 of value
obtained from the Settlement Option Table for the settlement option
elected. Fixed Dollar Benefit payments will remain level for the duration
of the payment period.
VARIABLE DOLLAR BENEFIT
The first monthly Variable Dollar Benefit payment is equal to the Owner's
Variable Account Value (expressed in thousands of dollars and after
deduction of any fees and charges, loans, or applicable premium tax not
previously deducted) as of the end of the Valuation Period immediately
preceding the applicable Commencement Date multiplied by the amount of the
monthly payment per $1,000 of value obtained from the Settlement Option
Table for the Benefit Payment option elected less the pro-rata portion of
the Contract Maintenance Fee. The dollar amount of the first monthly
Variable Dollar Benefit payment from each Sub-Account is determined in the
same manner.
The dollar amount of the second and subsequent monthly Variable Dollar
Benefit payment is equal to the sum of the number of Benefit Units for
each Sub-Account in which amounts are held by the Owner, multiplied by the
value of a Benefit Unit ("Benefit Unit Value") for that Sub-Account as of
the fifth Valuation Date preceding the due date of the payment. A pro-
rata portion of the Contract Maintenance Fee is deducted from the total to
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arrive at the actual payment. Such payments will reflect the investment
performance of the Sub-Accounts selected and the amount of each payment
will vary accordingly.
The number of Benefit Units in each Sub-Account held by the Owner is
determined by dividing the dollar amount of the first monthly Variable
Dollar Benefit payment from each Sub-Account by the Benefit Unit Value for
that Sub-Account as of the applicable Commencement Date. The number of
Benefit Units remains fixed during the payment period, except as a result
of any transfers among Sub-Accounts after the applicable Commencement
Date.
The Benefit Unit Value for each Sub-Account is originally established in
the same manner as Accumulation Unit values. Thereafter, the Benefit Unit
Value for a Sub-Account is determined by multiplying the Benefit Unit
Value as of the end of the preceding Valuation Period by the Net
Investment Factor, determined as set forth above under "Accumulation Unit
Value", for the Valuation Period just ended. The product is then
multiplied by the assumed daily investment factor (0.99991781), for the
number of days in the Valuation Period. The factor is based on the
assumed net investment rate of three percent (3%) that is reflected in the
Settlement Option Tables.
SETTLEMENT OPTIONS
Option 1: Life Annuity with Payments for at Least a Fixed Period. The
Company will make a monthly payment for at least a fixed
period. If the person on whose life payments are based lives
longer than the fixed period, then the Company will make
payments until his or her death. The fixed periods available
are reflected in the Option 1 Table.
Option 2: Life Annuity. The Company will make annuity payments until
the death of the person on whose life payments are based. The
Option 2 Table applies to this Option.
Option 3: Joint and One-Half Survivor Annuity. The Company will make a
monthly payment until the death of the primary person on whose
life payments are based; thereafter, one-half of the monthly
payment will continue to a designated survivor, if living,
until his or her death. The Company will require Due Proof of
Death of the primary person on whose life payments are based.
The Option 3 Table applies to this Option.
Option 4: Income for a Fixed Period. The Company will make payments for
a fixed period. Payment intervals and amounts are shown in
the Option 4 Table and are based on a three percent (3%)
guaranteed interest rate.
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If, at the death of the Annuitant, payments have been made for
less than the fixed period elected, the Company will continue
to make payments: (i) to the contingent payee designated on
the Settlement Option election form; and (ii) during the
remainder of the fixed period.
Option 5: Any Other Form. The Company will make payments in any other
form of annuity which is acceptable to the Company.
MINIMUM AMOUNTS
If the Owner's Account Value is less than $5,000 on the applicable
Commencement Date, the Company reserves the right to pay that amount in
one lump sum. If monthly payments under a Settlement Option would be less
than $100, the Company may make payments quarterly, semi- annually or
annually at its discretion.
All elected Settlement Options must comply with current applicable laws,
regulations and rulings issued by any governmental agency. If at the time
a Fixed Dollar Annuity Benefit is elected, the Company has available
options or rates on a more favorable basis than those guaranteed, the
higher benefits shall be applied and guaranteed for as long as that
election remains in force.
To the extent applicable, all factors, values, benefits and reserves will
not be less than those required by the law of the state in which the
Contract is delivered.
SETTLEMENT OPTION TABLES
The Settlement Option Tables in Appendix A reflect the dollar amount of
the monthly payments for each $1,000 applied.
Rates for monthly payments for ages or fixed periods not shown in the
Settlement Option Tables will be calculated on the same basis as those
shown and may be obtained from the Company. Fixed periods shorter than
five years are not available, except as a Death Benefit Settlement Option.
GENERAL PROVISIONS
NON-PARTICIPATING
The Contract is non-participating and therefore is not eligible to share
in the profits or surplus earnings of the Company's general account and
will not receive dividends from the general account.
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MISSTATEMENT OF AGE
If the age and/or sex of a person on whose life an Annuity Benefit or
Death Benefit is based is misstated, the payments under the Contract shall
be adjusted to the amount which would have been payable based on the
correct age and/or sex. If the Company has made underpayments based on
any misstatement, the Company shall promptly pay the amount of any
underpayment, with interest, in one sum. Any overpayments made shall be
charged, with interest, against the next or succeeding payment(s) due
under the Contract. The interest rate used will not be less than three
percent (3%) per year.
PROOF OF EXISTENCE AND AGE
The Company may require proof of age and/or sex of any person on whose
life an Annuity Benefit or Death Benefit is based.
FACILITY OF PAYMENT
If any person receiving payments under a Contract is incapable of giving a
valid receipt, the Company may make such payment to the person who has
legally assumed his or her care and principal support. Any such payment
shall fully discharge the Company to the extent of that payment.
TRANSFER OF OWNERSHIP
Non-Tax-Qualified Contract
The Owner may transfer ownership of his or her non-tax-qualified
Contract at any time during the Owner's lifetime. Any such
transfer must be made by Written Request and unless otherwise
elected or required by law, will not cancel a designation of an
Annuitant or Beneficiary.
Tax-Qualified Contract
The Owner of a tax-qualified Contract may not transfer ownership.
ASSIGNMENT
Non-Tax-Qualified Contract
The Owner may assign all or any part of his or her rights under a
non-tax qualified Contract. The person to whom assignment is made
is called an assignee. The Owner cannot exercise any ownership
rights without the consent of the assignee.
The Company is not responsible for the validity or any assignment.
An assignment must be in writing and must be received at the
Administrative Office of the Company. The Company will not be
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bound by an assignment until the Company acknowledges it. An
assignment is subject to any payment made or any action taken
before the Company acknowledges the assignment. An assignment may
be ended only by the assignee or as provided by law.
Tax-Qualified Contract
The Owner of a tax-qualified Contract may not assign or in any way
alienate his or her interest under the Contract.
ANNUITY DATA
The Company will not be liable for obligations which depend on the
Company's receiving information from an Owner until such information is
received by the Company in a satisfactory form.
ANNUAL REPORT
At least once each Contract Year prior to the Annuity Commencement Date,
the Owner will be provided with a report of the current Account Value
allocated to each Sub-Account, and each Fixed Account option. This report
will also include any other information required by law or regulation,
including all transactions which have occurred during the accounting
period shown in the report.
INCONTESTABILITY
No Contract shall be contestable by the Company.
ENTIRE CONTRACT
The Company issues the Contract in consideration and acceptance of the
payment of the initial Purchase Payment. In those states that require a
written application, a copy of the application will be attached to and
become part of the Contract. Only statements in the application, if any,
or made elsewhere by the Owner in consideration for the Contract will be
used to void the Owner's interest under the Contract, or to defend a claim
based on it. Such statements are representations and not warranties.
CHANGES IN THE CONTRACT
Only the Company's President, Vice President and Secretary have the
authority to bind the Company or to make any change in the Contract, and
then only in writing. The Company will not be bound by any promise or
representation made by any other person.
The Company may not change or amend the Contract except as expressly
provided, without the Owner's consent. However, the Company may change or
amend the Contract if such change or amendment is necessary for the
Contract to comply with any state or federal law, rule or regulation.
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WAIVER OF THE CONTRACT MAINTENANCE FEE
The Company will waive the Contract Maintenance Fee if the Account Value
is equal to or greater than $30,000 on the date of the assessment of the
charge.
NOTICES AND DIRECTIONS
The Company will not be bound by any authorization, election or notice
which is not in writing and received at the Company's Administrative
Office.
Any written notice requirement by the Company to the Owner will be
satisfied by the mailing of any such required written notice, by
first-class mail, to the Owner's last known address as shown on the
Company's records.
FEDERAL TAX MATTERS
INTRODUCTION
The following discussion is a general description of federal tax
considerations relating to the Contract and is not intended as tax advice.
This discussion is not intended to address the tax consequences resulting
from all of the situations in which a person may be entitled to or may
receive a distribution under the Contract. Any person concerned about tax
implications should consult a competent tax advisor before initiating any
transaction. This discussion is based upon the Company's understanding of
the present federal income tax laws as they are currently interpreted by
the Internal Revenue Service. No representation is made as to the
likelihood of the continuation of the present federal income tax laws or
of the current interpretation by the Internal Revenue Service. Moreover,
no attempt has been made to consider any applicable state or other tax
laws.
The Contract may be purchased on a non-tax-qualified basis ("Non-Qualified
Contract") or purchased and used in connection with plans qualifying for
favorable tax treatment ("Qualified Contract"). Qualified Contracts are
designed for use in connection with plans entitled to special income tax
treatment under Section 401, 403, 408 or 457 of the Code. The ultimate
effect of federal income taxes on the amounts held under a Contract, on
Benefit Payments, and on the economic benefit to the Owner or the
Beneficiary may depend on the type of Contract and the tax status of the
individual concerned. Certain requirements must be satisfied in
purchasing a Qualified Contract and receiving distributions from such a
Contract in order to continue to receive favorable tax treatment. The
Company makes no attempt to provide more than general information about
use of Contracts with the various types of qualified arrangements. Owners
and Beneficiaries are cautioned that the rights of any person to any
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benefits may be subject to the terms and conditions of the tax-qualified
arrangement, regardless of the terms and conditions of the Contract. Some
tax-qualified arrangements are subject to distribution and other
requirements that are not incorporated in the administration of the
Contract. Owners are responsible for determining that contributions,
distributions and other transactions with respect to Qualified Contracts
satisfy applicable law. Therefore, purchasers of Qualified Contracts
should seek competent legal and tax advice regarding the suitability of
the Contract for their situation, the applicable requirements, and the tax
treatment of the rights and benefits of the Contract. The Statement of
Additional Information discusses the requirements for qualifying as an
annuity.
TAXATION OF ANNUITIES IN GENERAL
Section 72 of the Code governs taxation of annuities in general. The
Company believes that the Owner who is a natural person generally is not
taxed on increases in the value of an Account until distribution occurs by
withdrawing all or part of the Account Value (e.g., surrenders or annuity
payments under the Settlement Option elected.) The taxable portion of a
distribution (in the form of a single sum payment or an annuity) is
generally taxable as ordinary income.
The following discussion generally applies to a Contract owned by a
natural person.
SURRENDERS
Qualified Contracts
In the case of a surrender under a Contract, including withdrawals
under the Systematic Withdrawal Option, a pro-rata portion of the
amount received is taxable, generally based on the ratio of the
"investment in the contract" to the individual's total accrued
benefit under the annuity. The "investment in the contract"
generally equals the amount of any non-deductible Purchase
Payments paid by or on behalf of any individual. Special tax
rules may be available for certain distributions from a Qualified
Contract.
Non-Qualified Contracts
In the case of a surrender under a Non-Qualified Contract, the
amount recovered is taxable to the extent that the Account Value
immediately before the surrender, reduced by any applicable
charges, exceeds the "investment in the contract" at such time.
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ANNUITY BENEFIT PAYMENTS
Although the tax consequences may vary depending on the Settlement Option
elected under the Contract, in general, only the portion of an Annuity
Benefit payment that represents the amount by which the Account Value
exceeds the "investment in the contract" will be taxed; after the
"investment in the contract" is recovered, the full amount of any
additional Annuity Benefit payments is taxable. For Variable Dollar
Annuity Benefit payments, the taxable portion is generally determined by
an equation that establishes a specific dollar amount of each payment that
is not taxed. The dollar amount is determined by dividing the "investment
in the contract" by the total number of expected periodic payments.
However, the entire distribution will be taxable once the recipient has
recovered the dollar amount of his or her "investment in the contract."
For Fixed Dollar Annuity Benefit payments, in general there is no tax on
the portion of each payment which represents the same ratio that the
"investment in the contract" bears to the total expected value of the
Annuity Benefit payments for the term of the payments; however, the
remainder of each Annuity Benefit payment is taxable. Once the
"investment in the contract" has been fully recovered, the full amount of
any additional Annuity Benefit payments is taxable. If Annuity Benefit
payments cease as a result of an Owner's death before full recovery of the
"investment in the contract," consult a competent tax adviser regarding
deductibility of the unrecovered amount.
PENALTY TAX
In general, a 10% premature distribution penalty tax applies to the
taxable portion of a distribution from a Contract prior to age 59 1/2.
Exceptions to this penalty tax are available to distributions made on
account of disability, death, and certain payments for life and life
expectancy. Certain other exceptions may apply depending on the tax-
qualification of the Contract involved.
TAXATION OF DEATH BENEFIT PROCEEDS
Amounts may be distributed under a Contract because of the death of an
Owner. Generally such amounts are includable in the income of the
recipient as follows: (1) if distributed in a lump sum, they are taxed in
the same manner as a full surrender as described above, or (2) if
distributed under a Settlement Option, they are taxed in the same manner
as Annuity Payments, as described above.
TRANSFERS, ASSIGNMENTS, OR EXCHANGES OF THE CONTRACT
A transfer of ownership or an assignment of a Contract, the designation of
a Beneficiary who is not also the Owner, or the exchange of a Contract may
result in certain tax consequences to the Owner that are not discussed
herein.
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QUALIFIED CONTRACTS - GENERAL
The Qualified Contract is designed for use with several types of
retirement plans. The tax rules applicable to Owner and Beneficiaries in
retirement plans vary according to the type of plan and the terms and
conditions of the plan.
TEXAS OPTIONAL RETIREMENT PROGRAM
Section 36.105 of the Texas Educational Code permits participants in the
Texas Optional Retirement Program ("ORP') to withdraw their interests in a
variable annuity policy issued under the ORP only upon: (1) termination
of employment in the Texas public institutions of higher education; (2)
retirement; or (3) death. Accordingly, a participant in the ORP (or the
participant's estate if the participant has died) will be required to
obtain a certificate of termination from the employer or a certificate of
death before all or part of the Account Value can be withdrawn.
INDIVIDUAL RETIREMENT ANNUITIES
Code sections 219 and 408 permit individuals or their employers to
contribute to an individual retirement program known as an "Individual
Retirement Annuity" or "IRA". Under applicable limitations, certain
amounts may be contributed to an IRA that are deductible from an
individual's gross income. Employers also may establish Simplified
Employee Pension (SEP) Plans to provide IRA contributions on behalf of
their employees.
TAX-SHELTERED ANNUITIES
Section 403(b) of the Code permits the purchase of "tax-sheltered
annuities" by public schools and certain charitable, educational and
scientific organizations described in Section 501(c)(3) of the Code.
These qualifying employers may make contributions to the Contracts for the
benefit of their employees. Such contributions are not includable in the
gross income of the employee until the employee receives distributions
under the Contract.
CORPORATE PENSION AND PROFIT SHARING PLANS AND H.R. 10 PLANS
Code section 401 permits employers to establish various types of
retirement plans for employees, and permits self-employed individuals to
establish retirement plans for themselves and their employees. These
retirement plans may permit the purchase of the Contracts to accumulate
retirement savings under the plans.
CERTAIN DEFERRED COMPENSATION PLANS
Under Section 457 of the Code, governmental and certain other tax-exempt
employers may invest in annuity contracts in connection with deferred
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<PAGE>
compensation plans established for the benefit of their employees. Other
employers may invest in annuity contracts in connection with non-qualified
deferred compensation plans established for the benefit of their
employees. Under these plans, contributions made for the benefit of the
employees will not be includable in the employees' gross income until
distributed from the plan.
WITHHOLDING
Pension and annuity distributions generally are subject to withholding for
the recipient's federal income tax liability at rates that vary according
to the type of distribution and the recipient's tax status. Federal
withholding at a flat 20% of the taxable part of the distribution is
required if the distribution is eligible for rollover and the distribution
is not paid as a direct rollover. In other cases, recipients generally
are provided the opportunity to elect not to have tax withheld from
distributions
POSSIBLE CHANGES IN TAXATION
There is always the possibility that the tax treatment of annuities could
change by legislation or other means (such as IRS regulations, revenue
rulings, judicial decisions, etc.). Moreover, it is also possible that
any change could be retroactive (that is, effective prior to the date of
the change).
OTHER TAX CONSEQUENCES
As noted above, the foregoing discussion of the federal income tax
consequences is not exhaustive and special rules are provided with respect
to other tax situations not discussed in this Prospectus. Further, the
federal income tax consequences discussed herein reflect the Company's
understanding of current law and the law may change. Federal estate tax
consequences and state and local estate, inheritance, and other tax
consequences of ownership or receipt of distributions under the Contract
depend on the circumstances of each Owner or recipient of the
distribution. A competent tax adviser should be consulted for further
information.
GENERAL
At the time the initial Purchase Payment is paid, a prospective purchaser
must specify whether the purchase is a Qualified Contract or a Non-
Qualified Contract. If the initial Purchase Payment is derived from an
exchange or surrender of another annuity contract, the Company may require
that the prospective purchaser provide information with regard to the
federal income tax status of the previous annuity contract. The Company
will require that persons purchase separate Contracts if they desire to
invest monies qualifying for different annuity tax treatment under the
Code. Each such separate Contract will require the minimum initial
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<PAGE>
Purchase Payment stated above. Additional Purchase Payments under a
Contract must qualify for the same federal income tax treatment as the
initial Purchase Payment under the Contract; the Company will not accept
an additional Purchase Payment under a Contract if the federal income tax
treatment of such Purchase Payment would be different from that of the
initial Purchase Payment.
DISTRIBUTION OF THE CONTRACT
AAG Securities, Inc. ("AAG Securities") is the principal underwriter and
distributor of the Contracts. AAG Securities may also serve as an
underwriter and distributor of other contracts issued through the Separate
Account and certain other Separate Accounts of the Company and any
affiliates of the Company. AAG Securities is a wholly-owned subsidiary of
American Annuity Group, Inc., a publicly traded company which is an
indirect subsidiary of American Financial Group, Inc. AAG Securities is
registered with the Securities and Exchange Commission as a broker-dealer
and is a member of the National Association of Securities Dealers, Inc.
("NASD"). Its principal offices are located at 250 East Fifth Street,
Cincinnati, Ohio 45202. The Company pays AAG Securities for acting as
underwriter under a distribution agreement.
AAG Securities will sell Contracts through its registered representatives.
In addition, AAG Securities may enter into sales agreements with other
broker-dealers to solicit applications for the Contracts through
registered representatives who are licensed to sell securities and
variable insurance products. These agreements provide that applications
for the Contracts may be solicited by registered representatives of the
broker-dealers appointed by the Company to sell its variable life
insurance and variable annuities. These broker-dealers are registered
with the Securities and Exchange Commission and are members of the NASD.
The registered representatives are authorized under applicable state
regulations to sell variable annuities.
AAG Securities will pay commissions of up to 8% of any Purchase Payments.
From time to time the Company may pay or permit other promotional
incentives, in cash or credit or other compensation.
LEGAL PROCEEDINGS
There are no pending legal proceedings affecting the Separate Account or
AAG Securities. The Company is involved in various kinds of routine
litigation which, in management's judgment, are not of material importance
to the Company's assets or the Separate Account.
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<PAGE>
VOTING RIGHTS
To the extent required by applicable law, all Fund shares held in the
Separate Account will be voted by the Company at regular and special
shareholder meetings of the respective Funds in accordance with
instructions received from persons having voting interests in the
corresponding Sub-Account. If, however, the 1940 Act or any regulation
thereunder should be amended, or if the present interpretation thereof
should change, or if the Company determines that it is allowed to vote all
shares in its own right, the Company may elect to do so.
The person with the voting interest is the Owner, or the person
controlling Benefit Payments, if different from the Owner. The number of
votes which are available will be calculated separately for each
Sub-Account. Before the Annuity Commencement Date, that number will be
determined by applying the Owner's percentage interest, if any, in a
particular Sub-Account to the total number of votes attributable to that
Sub-Account. The Owner, or the person controlling Benefit Payments, if
different from the Owner, holds a voting interest in each Sub-Account to
which the Account Value is allocated. After the Annuity Commencement
Date, the number of votes decreases as Annuity Payments are made and as
the number of Accumulation Units for a Contract decreases.
The number of votes of a Fund will be determined as of the date coincident
with the date established by that Fund for shareholders eligible to vote
at the meeting of the Fund. Voting instructions will be solicited by
written communication prior to such meeting in accordance with procedures
established by the respective Funds.
Shares as to which no timely instructions are received and shares held by
the Company as to which Owners have no beneficial interest will be voted
in proportion to the voting instructions which are received with respect
to all Contracts participating in the Sub-Account. Voting instructions to
abstain on any item will be applied on a pro rata basis to reduce the
votes eligible to be cast.
Each person or entity having a voting interest in a Sub-Account will
receive proxy material, reports and other material relating to the
appropriate Fund.
It should be noted that the Funds are not required to hold annual or other
regular meetings of shareholders.
AVAILABLE INFORMATION
The Company has filed a registration statement (the 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 a part of the Registration
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<PAGE>
Statement and does not contain all of the information set forth in the
Registration Statement and exhibits thereto, and reference is hereby made
to such Registration Statement and exhibits for further information
relating to the Company or 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 filed as exhibits to the
Registration Statement. The Registration Statement and the exhibits
thereto may be inspected and copied at the office of the Commission,
located at 450 Fifth Street, N.W., Washington, D.C.
STATEMENT OF ADDITIONAL INFORMATION
A Statement of Additional Information is available which contains more
details concerning the subjects discussed in this Prospectus. The
following is the Table of Contents for that Statement:
TABLE OF CONTENTS
------------------------------------------------------------------------
Page
----
ANNUITY INVESTORS(SERVICEMARK) LIFE INSURANCE COMPANY . . . . . . . . 1
General Information and History . . . . . . . . . . . . . . . 1
State Regulation . . . . . . . . . . . . . . . . . . . . . . 1
SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Safekeeping of Separate Account Assets . . . . . . . . . . . 1
Records and Reports . . . . . . . . . . . . . . . . . . . . . 2
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
DISTRIBUTION OF THE CONTRACTS . . . . . . . . . . . . . . . . . . . . 2
CALCULATION OF PERFORMANCE INFORMATION . . . . . . . . . . . . . . . 2
Money Market Sub-Account Standardized Yield Calculation . . . 2
Other Sub-Account Standardized Yield Calculations . . . . . . 3
Standardized Total Return Calculation . . . . . . . . . . . . 4
Hypothetical Performance Data . . . . . . . . . . . . . . . . 4
Other Performance Data . . . . . . . . . . . . . . . . . . . 5
FEDERAL TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . 7
Taxation of the Company . . . . . . . . . . . . . . . . . . . 7
Tax Status of the Contract . . . . . . . . . . . . . . . . . 7
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . 8
_________________________________________________________________________
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<PAGE>
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Copies of the Statement of Additional Information dated
_____________ _, 1996 are available without charge. To request a
copy, please clip this coupon on the dotted line above, enter your
name and address in the spaces provided below, and mail to:
Annuity Investors(SERVICEMARK) Life Insurance Company, P.O. Box
5423, Cincinnati, Ohio 45201-5423.
Name: ____________________________________________
Address: __________________________________________
City: ____________________________________________
State: ____________________________________________
Zip: ____________________________________________
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<PAGE>
APPENDIX A
[TO BE SUPPLIED]
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This page left blank intentionally
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Subject to Completion: Dated _______, 1995
ANNUITY INVESTORS(SERVICEMARK) VARIABLE ACCOUNT A
of
ANNUITY INVESTORS(SERVICEMARK) LIFE INSURANCE COMPANY
STATEMENT OF ADDITIONAL INFORMATION
for the
Commodore Mariner(SERVICEMARK) and Commodore Galleon(SERVICEMARK)
Individual Flexible Premium Deferred Annuities Issued by
ANNUITY INVESTORS(SERVICEMARK) LIFE INSURANCE COMPANY
P.O. Box 5423, Cincinnati, Ohio 45201-5423, (800) 789-6771
The Statement of Additional Information expands upon subjects discussed in
the current Prospectus for the Commodore Mariner(SERVICEMARK) and
Commodore Galleon(SERVICEMARK), Individual Flexible Premium Deferred
Annuity Contracts (each, the "Contract") offered by Annuity
Investors(SERVICEMARK) Life Insurance Company. A copy of the Prospectus
dated ______________, 1996, supplemented from time to time, may be
obtained free of charge by writing to Annuity Investors(SERVICEMARK) Life
Insurance Company, Administrative Office, P.O. Box 5423, Cincinnati, Ohio
45201-5423. Terms used in the current Prospectus for the Contract are
incorporated in this Statement of Additional Information.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE
READ ONLY IN CONJUNCTION WITH THE PROSPECTUS FOR THE CONTRACT.
Dated _____________, 1996
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION BUT HAS NOT YET BECOME
EFFECTIVE. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE
ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH
OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
TABLE OF CONTENTS
__________________________________________________________________________
Page
ANNUITY INVESTORS(SERVICEMARK) LIFE INSURANCE COMPANY . . . . . . . . 1
General Information and History . . . . . . . . . . . . . . . 1
State Regulation . . . . . . . . . . . . . . . . . . . . . . 1
SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Safekeeping of Separate Account Assets . . . . . . . . . . . . . . . 1
Records and Reports . . . . . . . . . . . . . . . . . . . . . 2
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
DISTRIBUTION OF THE CONTRACTS . . . . . . . . . . . . . . . . . . . . 2
CALCULATION OF PERFORMANCE INFORMATION . . . . . . . . . . . . . . . 2
Money Market Sub-Account Standardized Yield Calculation . . . 2
Other Sub-Account Standardized Yield Calculations . . . . . . 3
Standardized Total Return Calculation . . . . . . . . . . . . 4
Hypothetical Performance Data . . . . . . . . . . . . . . . . 4
Other Performance Data . . . . . . . . . . . . . . . . . . . 5
FEDERAL TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . 7
Taxation of the Company . . . . . . . . . . . . . . . . . . . 7
Tax Status of the Contract . . . . . . . . . . . . . . . . . 7
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 8
- i -
<PAGE>
The following information supplements the information in the Prospectus
about the Contracts. Terms used in this Statement of Additional
Information have the same meaning as in the Prospectus.
ANNUITY INVESTORS(SERVICEMARK) LIFE INSURANCE COMPANY
GENERAL INFORMATION AND HISTORY
Annuity Investors(SERVICEMARK) Life Insurance Company (the "Company"),
formerly known as Carillon Life Insurance Company, is a stock life
insurance company incorporated under the laws of the State of Ohio in
1981. The name change occurred in the state of domicile on April 12,
1995. The Company is principally engaged in the sale of fixed and
variable annuity policies.
The Company was acquired in November, 1994, by American Annuity Group,
Inc. ("AAG") a Delaware corporation that is a publicly traded insurance
holding company. Great American Insurance Company ("GAIC"), an Ohio
corporation, owns 80% of the common stock of AAG. GAIC is a multi-line
insurance carrier and a wholly-owned subsidiary of Great American Holding
Company ("GAHC"), an Ohio corporation. GAHC is a wholly-owned subsidiary
of American Financial Corporation ("AFC"), an Ohio corporation. AFC is a
wholly-owned subsidiary of American Financial Group, Inc. ("AFG"), an Ohio
corporation. AFG is a publicly traded holding company which is engaged,
through its subsidiaries, in financial businesses that include annuities,
insurance and portfolio investing, and non-financial businesses that
include food products and television and radio operations.
STATE REGULATION
The Company is subject to the insurance laws and regulations of all the
jurisdictions where it is licensed to operate. The availability of certain
Contract rights and provisions depends on state approval and/or filing and
review processes in each such jurisdiction. Where required by law or
regulation, the Contract will be modified accordingly.
SERVICES
SAFEKEEPING OF SEPARATE ACCOUNT ASSETS
Title to assets of the Separate Account is held by the Company. The
Separate Account assets are kept separate and apart from the Company's
general account assets. Records are maintained of all purchases and
redemptions of Fund shares held by each of the Sub-Accounts.
Title to assets of the Fixed Account is held by the Company together with
the Company's general account assets.
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<PAGE>
RECORDS AND REPORTS
All records and accounts relating to the Fixed Account and the Separate
Account will be maintained by the Company. As presently required by the
provisions of the Investment Company Act of 1940, as amended ("1940 Act"),
and rules and regulations promulgated thereunder which pertain to the
Separate Account, reports containing such information as may be required
under the 1940 Act or by other applicable law or regulation will be sent
to each Owner semi-annually at the Owner's last known address.
EXPERTS
The statutory-basis financial statements of the Company included in this
Statement of Additional Information have been audited by Ernst & Young
LLP, independent auditors, to the extent indicated in their reports
thereon also appearing elsewhere herein. Such statutory-basis financial
statements have been included herein in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
DISTRIBUTION OF THE CONTRACTS
The offering of the Contracts is expected to be continuous, and the
Company does not anticipate discontinuing the offering of the Contracts.
However, the Company reserves the right to discontinue the offering of the
Contracts.
CALCULATION OF PERFORMANCE INFORMATION
MONEY MARKET SUB-ACCOUNT STANDARDIZED YIELD CALCULATION
In accordance with rules and regulations adopted by the Securities and
Exchange Commission, the Company computes the Money Market Sub-Account's
current annualized yield for a seven-day period in a manner which does not
take into consideration any realized or unrealized gains or losses on
shares of the Money Market Fund or on its portfolio securities. This
current annualized yield is computed by determining the net change
(exclusive of realized gains and losses on the sale of securities and
unrealized appreciation and depreciation) in the value of a hypothetical
account having a balance of one unit of the Money Market Sub-Account at
the beginning of such seven-day period, dividing such net change in the
value of the hypothetical account by the value of the hypothetical account
at the beginning of the period to determine the base period return and
annualizing this quotient on a 365-day basis. The net change in the value
of the hypothetical account reflects the deductions for the Mortality and
Expense Risk and Administration Charges and income and expenses accrued
during the period. Because of these deductions, the yield for the Money
Market Sub-Account of the Separate Account will be lower than the yield
for the Money Market Fund or any comparable substitute funding vehicle.
__________________________________________________________________________
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<PAGE>
The Securities and Exchange Commission also permits the Company to
disclose the effective yield of the Money Market Sub-Account for the same
seven-day period, determined on a compounded basis. The effective yield
is calculated according to the
following formula:
365/7
EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1) ] - 1
The yield on amounts held in the Money Market Sub-Account normally will
fluctuate on a daily basis. Therefore, the disclosed yield for any given
past period is not an indication or representation of future yields. The
Money Market Sub-Account's actual yield is affected by changes in interest
rates on money market securities, average portfolio maturity of the Money
Market Fund or substitute funding vehicle, the types and quality of
portfolio securities held by the Money Market Fund or substitute funding
vehicle, and operating expenses. IN ADDITION, THE YIELD FIGURES DO NOT
REFLECT THE EFFECT OF ANY CONTINGENT DEFERRED SALES CHARGE ("CDSC") (OF UP
TO 7% OF PURCHASE PAYMENTS) THAT MAY BE APPLICABLE ON SURRENDER.
OTHER SUB-ACCOUNT STANDARDIZED YIELD CALCULATIONS
The Company may from time to time disclose the current annualized yield of
one or more of the Sub-Accounts (other than the Money Market Sub-Account)
for 30-day periods. The annualized yield of a Sub-Account refers to the
income generated by the Sub-Account over a specified 30-day period.
Because this yield is annualized, the yield generated by a Sub-Account
during the 30-day period is assumed to be generated each 30-day period.
The yield is computed by dividing the net investment income per
Accumulation Unit earned during the period by the price per unit on the
last day of the period, according to the following formula:
a-b 6
YIELD=2 [(---- +1) -1]
cd
Where:
a = net investment income earned during the period by the
Portfolio attributable to the shares owned by the
Sub-Account.
b = expenses for the Sub-Account accrued for the period (net
of reimbursements).
c = the average daily number of Accumulation Units
outstanding during the period.
d = the maximum offering price per Accumulation Unit on the
last day of the period.
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- 3 -
<PAGE>
Net investment income will be determined in accordance with rules and
regulations established by the Securities and Exchange Commission.
Accrued expenses will include all recurring fees that are charged to all
Contracts. The yield calculations do not reflect the effect of any CDSC
that may be applicable to a particular Contract. CDSCs range from 7% to
0% of the Purchase Payments withdrawn depending on the elapsed time since
the receipt of such Purchase Payments.
Because of the charges and deductions imposed by the Separate Account, the
yield for a Sub-Account will be lower than the yield for the corresponding
Fund. The yield on amounts held in a Sub-Account normally will fluctuate
over time. Therefore, the disclosed yield for any given period is not an
indication or representation of future yields or rates of return. The
Sub-Account's actual yield will be affected by the types and quality of
portfolio securities held by the Fund and its operating expenses.
STANDARDIZED TOTAL RETURN CALCULATION
The Company may from time to time also disclose average annual total
returns for one or more of the Sub-Accounts for various periods of time.
Average annual total return quotations are computed by finding the average
annual compounded rates of return over one, five and ten year periods that
would equal the initial amount invested to the ending redeemable value,
according to the following formula:
n
P(1 + T) = 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 one, five or
ten- year period at the end of the one, five, or
ten-year period (or fractional portion thereof).
All recurring fees that are charged to all Contracts are recognized in the
ending redeemable value. The average annual total return calculations will
reflect the effect of any CDSCs that may be applicable to a particular
period.
HYPOTHETICAL PERFORMANCE DATA
The Company may also disclose "hypothetical" performance data for a
Sub-Account, for periods before the Sub-Account commenced operations.
Such performance information for the Sub-Account will be calculated based
__________________________________________________________________________
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<PAGE>
on the performance of the corresponding Fund and the assumption that the
Sub-Account was in existence for the same periods as those indicated for
the Fund, with a level of Contract charges currently in effect. The Fund
used for these calculations will be the actual Fund in which the Sub-
Account invests.
This type of hypothetical performance data may be disclosed on both an
average annual total return and a cumulative total return basis.
Moreover, it may be disclosed assuming that the Contract is not
surrendered (i.e., with no deduction for a CDSC) or assuming that the
Contract is surrendered at the end of the applicable period (i.e.,
reflecting a deduction for any applicable CDSC).
OTHER PERFORMANCE DATA
The Company may from time to time disclose other non-standardized total
return in conjunction with the standardized performance data described
above. Non-standardized data may reflect no CDSC or present performance
data for a period other than that required by the standardized format.
The Company may from time to time also disclose cumulative total return
calculated using the following formula assuming that the CDSC percentage
is 0%:
CTR = (ERV/P) - 1
Where:
CTR = the cumulative total return net of Sub-Account
recurring charges for the period.
ERV = ending redeemable value of a hypothetical $1,000
payment at the beginning of the one, five or
ten-year period at the end of the one, five or
ten-year period (or fractional portion thereof).
P = a hypothetical initial payment of $1,000.
All non-standardized performance data will be advertised only if the
requisite standardized performance data is also disclosed.
The Contracts may be compared in advertising materials to Certificates of
Deposit ("CDs") or other investments issued by banks or other depository
institutions. Variable annuities differ from bank investments in several
respects. For example, variable annuities may offer higher potential
returns than CDs. However, unless you have elected to invest in only the
Fixed Account Options, the Company does not guarantee your return. Also,
none of your investments under the Contract, whether allocated to the
Fixed Account or a Sub-Account, are FDIC-insured.
__________________________________________________________________________
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<PAGE>
Advertising materials for the Contracts may, from time to time, address
retirement needs and investing for retirement, the usefulness of a tax-
qualified retirement plan, saving for college, or other investment goals.
Advertising materials for the Contracts may discuss, generally, the
advantages of investing in a variable annuity and the Contract's
particular features and their desirability and may compare Contract
features with those of other variable annuities and investment products of
other issuers. Advertising materials may also include a discussion of the
balancing of risk and return in connection with the selection of
investment options under the Contract and investment alternatives
generally, as well as a discussion of the risks and attributes associated
with the investment options under the Contract. A description of the tax
advantages associated with the Contract, including the effects of tax-
deferral under a variable annuity or retirement plan generally, may be
included as well. Advertising materials for the Contracts may quote or
reprint financial or business publications and periodicals, including
model portfolios or allocations, as they relate to current economic and
political conditions, management and composition of the underlying Funds,
investment philosophy, investment techniques, the desirability of owning
the Contract and other products and services offered by the Company or AAG
Securities, Inc. ("AAG Securities").
The Company or AAG Securities may provide information designed to help
individuals understand their investment goals and explore various
financial strategies. Such information may include: information about
current economic, market and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance and goal setting; questionnaires designed
to help create a personal financial profile; worksheets used to project
savings needs based on assumed rates of inflation and hypothetical rates
of return; and alternative investment strategies and plans.
Ibbotson Associates of Chicago, Illinois ("Ibbotson") provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the Consumer Price Index), and
combinations of various capital markets. The performance of these capital
markets is based on the returns of different indices.
Advertising materials for the Contracts may use the performance of these
capital markets in order to demonstrate general risk-versus-reward
investment scenarios. Performance comparisons may also include the value
of a hypothetical investment in any of these capital markets. The risk
associated with the security types in any capital market may or may not
correspond directly to those of the Sub-Accounts and the Funds.
Advertising materials may also compare performance to that of other
compilations or indices that may be developed and made available in the
future.
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<PAGE>
In addition, advertising materials may quote various measures of
volatility and benchmark correlations for the Sub-Accounts and the
respective Funds and compare these volatility measures and correlations
with those of other separate accounts and their underlying funds.
Measures of volatility seek to compare a sub-account's, or its underlying
fund's, historical share price fluctuations or total returns to those of
a benchmark. Measures of benchmark correlation indicate how valid a
comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data.
FEDERAL TAX MATTERS
The Contract is designed for use by individuals as a non-tax-qualified
retirement plan and with arrangements which qualify for special tax
treatment under Sections 401, 403, 408 or 457 of the Internal Revenue Code
of 1986, as amended (the "Code"). The ultimate effect of federal taxes on
the Account Value, on Annuity Benefits, and on the economic benefit to the
Owner and/or the Beneficiary may depend on the type of retirement plan for
which the Contract is purchased, on the tax and employment status of the
individual concerned and on the Company's tax status. THE FOLLOWING
DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. Any person
concerned about tax implications should consult a competent tax adviser.
This discussion is based upon the Company's understanding of the present
federal income tax laws as they are currently interpreted by the Internal
Revenue Service. No representation is made as to the likelihood of
continuation of present federal income tax laws or of the current
interpretations by the Internal Revenue Service. Moreover, no attempt has
been made to consider any applicable state or other tax laws.
TAXATION OF THE COMPANY
The Company is taxed as a life insurance company under Part I of
Subchapter L of the Code. Since the Separate Account is not an entity
separate from the Company, and its operations form a part of the Company,
it will not be taxed separately as a "regulated investment company" under
Subchapter M of the Code. Investment income and realized capital gains are
automatically applied to increase reserves under the Contracts. Under
existing federal income tax law, the Company believes that the Separate
Account investment income and realized net capital gains will not be taxed
to the extent that such income and gains are applied to increase the
reserves under the Contracts.
Accordingly, the Company does not anticipate that it will incur any
federal income tax liability attributable to the Separate Account and,
therefore, the Company does not intend to make provisions for any such
taxes. However, if changes in the federal tax laws or interpretations
thereof result in the Company being taxed on income or gains attributable
to the Separate Account, then the Company may impose a charge against the
__________________________________________________________________________
- 7 -
<PAGE>
Separate Account (with respect to some or all Contracts) in order to set
aside provisions to pay such taxes.
TAX STATUS OF THE CONTRACT
Section 817(h) of the Code requires that with respect to Non-Qualified
Contracts, the investments of the Funds be "adequately diversified" in
accordance with Treasury regulations in order for the Contracts to qualify
as annuity contracts under federal tax law. The Separate Account, through
the Funds, intends to comply with the diversification requirements
prescribed by the Treasury in Reg. Sec. 1.817-5, which affect how the
Funds' assets may be invested.
In certain circumstances, Owners of individual variable annuity contracts
may be considered the owners, for federal income tax purposes, of the
assets of the separate accounts used to support their contracts. In those
circumstances, income and gains from the separate account assets would be
includible in the variable contract owner's gross income. The Internal
Revenue Service has stated in published rulings that a variable contract
owner will be considered the owner of separate account assets if the
contract owner possesses incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department has also announced, in connection with the issuance of
regulations concerning diversification, that those regulations "do not
provide guidance concerning the circumstances in which investor control of
the investments of a segregated asset account may cause the investor
(i.e., the participant), rather than the insurance company, to be treated
as the owner of the assets in the account." This announcement also stated
that guidance would be issued by way of regulations or rulings on the
"extent to which policyholders may direct their investments to particular
subaccounts without being treated as owners of the underlying assets." As
of the date of this Statement of Additional Information, no guidance has
been issued.
The ownership rights under the Contract are similar to, but different in
certain respects from, those described by the Internal Revenue Service in
rulings in which it was determined that contract owners were not owners of
separate account assets. For example, the Owner has additional flexibility
in allocating Purchase Payments and Account Value. These differences
could result in an Owner being treated as the owner of a pro rata
portion(s) of the assets of the Separate Account and/or Fixed Account. In
addition, the Company does not know what standards will be set forth, if
any, in the regulations or rulings which the Treasury Department has
stated it expects to issue. The Company therefore reserves the right to
modify the Contract as necessary to attempt to prevent an Owner from being
considered the owner of a pro rata share of the assets of the Separate
Account.
__________________________________________________________________________
- 8 -
<PAGE>
FINANCIAL STATEMENTS
The Company's financial statements as of December 31, 1994 and December
31, 1995 are included herein. [To Be Supplied]
The financial statements of the Company included in this Statement of
Additional Information should be considered only as bearing on the ability
of the Company to meet its obligations under the Contract. They should not
be considered as bearing on the investment performance of the assets held
in the Separate Account.
__________________________________________________________________________
- 9 -
<PAGE>
PART C
Other Information
Item 24. Financial Statements and Exhibits
(a) Financial Statements
All required financial statements are included in Parts A or B of
this Registration Statement.
(b) Exhibits
(1) Resolution of the Board of Directors of Annuity
Investors(SERVICEMARK) Life Insurance Company authorizing
establishment of Annuity Investors(SERVICEMARK) Variable
Account A.
(2) Not Applicable.
(3) (a) Distribution Agreement between Annuity
Investors(SERVICEMARK) Life Insurance Company
and AAG Securities, Inc. [To Be Supplied]
(b) Form of Selling Agreement between Annuity
Investors(SERVICEMARK) Life Insurance Company,
AAG Securities, Inc. and another Broker-Dealer.
[To Be Supplied]
(4) Contract Forms and Endorsements.
(a) Qualified Contract Form and Endorsements.
(i) Form of Qualified Individual Flexible
Premium Deferred Annuity Contract. [To
Be Supplied]
(ii) Form of Loan Endorsement to Qualified
Individual Contract. [To Be Supplied]
(iii) Form of Tax Sheltered Annuity
Endorsement to Qualified Individual
Contract. [To Be Supplied]
(iv) Form of Qualified Pension, Profit
Sharing and Annuity Plan Endorsement to
Qualified Individual Contract. [To Be
Supplied]
__________________________________________________________________________
- 10 -
<PAGE>
(v) Form of Long-Term Care Waiver Rider to
Qualified Individual Contract. [To Be
Supplied]
(b) Non-Qualified Individual Contract Form and
Endorsements.
(i) Form of Non-Qualified Individual
Contract. [To Be Supplied]
(ii) Form of Loan Endorsement to Non-
Qualified Individual Contract. [To Be
Supplied]
(iii) Form of Tax Sheltered Annuity
Endorsement to Non-Qualified Individual
Contract. [To Be Supplied]
(iv) Form of Qualified Pension, Profit
Sharing and Annuity Plan Endorsement to
Non-Qualified Individual Contract. [To
Be Supplied]
(v) Form of Long-Term Care Waiver Rider to
Non-Qualified Individual Contract. [To
Be Supplied]
(5) (a) Form of Application for Qualified Individual
Flexible Premium Deferred Annuity Contract. [To
Be Supplied]
(b) Form of Application for Non-Qualified Individual
Flexible Premium Deferred Annuity Contract. [To
Be Supplied]
(6) (a) Articles of Incorporation of Annuity
Investors(SERVICEMARK) Life Insurance Company.
(b) Code of Regulations of Annuity
Investors(SERVICEMARK) Life Insurance Company.
(7) Not Applicable.
(8) (a) Participation Agreement between Annuity
Investors(SERVICEMARK) Life Insurance Company
and Dreyfus Variable Investment Fund.
(b) Participation Agreement between Annuity
Investors(SERVICEMARK) Life Insurance Company
and Dreyfus Stock Index Fund.
__________________________________________________________________________
- 11 -
<PAGE>
(c) Participation Agreement between Annuity
Investors(SERVICEMARK) Life Insurance Company
and Dreyfus Socially Responsible Fund.
(d) Participation Agreement between Annuity
Investors(SERVICEMARK) Life Insurance Company
and Janus Aspen Series. [To Be Supplied]
(e) Participation Agreement between Annuity
Investors(SERVICEMARK) Life Insurance Company
and Merrill Lynch Variable Series Funds, Inc.
[To Be Supplied]
(f) Service Agreement between Annuity
Investors(SERVICEMARK) Life Insurance Company
and American Annuity Group, Inc.
(g) Agreement between AAG Securities, Inc. and AAG
Insurance Agency, Inc.
(h) Investment Service Agreement between Annuity
Investors(SERVICEMARK) Life Insurance Company
and American Annuity Group, Inc.
(9) Opinion and Consent of Counsel.
(10) (a) Report of Independent Auditors. [To Be
Supplied]
(b) Consent of Independent Auditors. [To Be
Supplied]
(11) No financial statements are omitted from Item 23.
(12) Not Applicable.
(13) Not Applicable.
(14) Not Applicable.
__________________________________________________________________________
- 12 -
<PAGE>
Item 25. Directors and Officers of Annuity Investors(SERVICEMARK)
Life Insurance Company
<TABLE>
<CAPTION>
Principal Positions and Offices
Name Business Address With the Company
<S> <C> <C>
Robert Allen Adams (1) President, Director
Stephen Craig Lindner (1) Director
William Jack Maney, II (1) Assistant Treasurer and
Director
James Michael Mortensen (1) Executive Vice President,
Assistant Secretary and
Director
Mark Francis Muething (1) Senior Vice President,
Secretary, General Counsel
and Director
Jeffrey Scott Tate (1) Director
Thomas Kevin Liguzinski (1) Senior Vice President
Charles Kent McManus (1) Senior Vice President
Robert Eugene Allen (1) Vice President and Treasurer
Arthur Ronald Greene, III (1) Vice President
Betty Marie Kasprowicz (1) Vice President and Assistant
Secretary
Michael Joseph O'Connor (1) Vice President and Chief
Actuary
Lynn Edward Laswell (1) Assistant Vice President and
Assistant Treasurer
</TABLE>
________________________________
(1) P.O. Box 5423, Cincinnati, Ohio 45201-5423.
__________________________________________________________________________
- 13 -
<PAGE>
Item 26. Persons Controlled by or Under Common Control With the
Depositor or Registrant.
The Depositor, Annuity Investors(SERVICEMARK) Life Insurance
Company, is wholly owned by American Annuity Group, Inc. The Registrant,
Annuity Investors(SERVICEMARK) Separate Account A, is a segregated asset
account of Annuity Investors(SERVICEMARK) Life Insurance Company.
The following chart indicates the persons controlled by or under common
control with the Company.
<TABLE>
<CAPTION>
% OF STOCK OWNED (1)
STATE OF DATE OF BY IMMEDIATE
AMERICAN FINANCIAL GROUP, INC. DOMICILE INCORP. PARENT COMPANY NATURE OF BUSINESS
---------- -------- -------------------- --------------------
<S> <C> <C> <C> <C>
American Financial Corporation Ohio 11/15/55 100 Holding Company
American Barge & Towing Company Ohio 03/25/82 100 Inactive
Spartan Transportation Ohio 07/19/83 100 Mgmt-River Transportation Equipment
Corporation
American Financial Corporation Ohio 08/27/63 100 Inactive
American Money Management Ohio 03/01/73 100 Investment Management
Corporation
American Money Management Netherland 05/10/85 100 Securities Management
International, N.V. Antilles
Chiquita Brands International, New Jersey 03/30/99 44.86(2) Production/Processing/Distribution of
Inc. (and subsidiaries) Food Products
Citicasters Inc. Florida 06/18/80 37.47(2) Holding Company
FMI Pennsylvania, Inc. Pennsylvania 11/19/75 100 Holding Company
GACC-340, Inc. Delaware 06/09/88 100 Co-Owner Corporate Aircraft
GACC-N26LB, Inc. Delaware 02/02/88 100 Co-Owner Corporate Aircraft
Citicasters Corp. Delaware 12/18/90 100 Holding Company
Citicasters Co. Ohio 12/22/83 100 Operation of Television/Radio Stations
Taft-TCI Satellite Colorado 12/17/81 100 Satellite Communications
Services, Inc.
__________________________________________________________________________
- 14 -
<PAGE>
% OF STOCK OWNED (1)
STATE OF DATE OF BY IMMEDIATE
AMERICAN FINANCIAL GROUP, INC. DOMICILE INCORP. PARENT COMPANY NATURE OF BUSINESS
---------- -------- -------------------- --------------------
Great American TelevisionCalifornia 03/19/81 100 Television Program Development
Productions, Inc.
Cine Films, Inc. California 05/15/75 100 Prod./Motion Picture/Television Films
Cine Guarantors, Inc. California 01/06/71 100 Financial Bonding
Cine Guarantors II, Inc. California 09/04/75 100 Inactive
Great American New York 09/04/81 100 Inactive
Merchandising Group, Inc.
Location Productions, California 08/07/68 100 Prod./Motion Picture/Television Films
Inc.
Location Productions II, California 05/15/75 100 Prod./Motion Picture/Television Films
Inc.
The Sy Fisher Company California 07/31/72 100 Inactive
Agency, Inc.
VTTV Productions California 01/30/78 100 Inactive
Dixie Terminal Corporation Ohio 04/23/70 100 Commercial Leasing
Fairmont Holdings, Inc. Ohio 12/15/83 100 Holding Company
Fairmont Pa. Holdings, Inc. Pennsylvania 08/18/83 100 Holding Company
FWC Corporation Ohio 03/16/83 100 Financial Services
Great American Holding Ohio 11/30/77 100 Holding Company
Corporation
Great American Insurance Ohio 3/7/1872 100 Property/Casualty Insurance
Company
A B I Group, Inc. Minnesota 07/27/78 100 Inactive
American Business Risk Minnesota 04/19/78 100 Inactive
Services, Inc.
American Insurance Minnesota 11/16/82 100 Inactive
Management Agency, Inc.
Consolidated Texas 10/14/80 100 Inactive
Underwriters, Inc.
__________________________________________________________________________
- 15 -
<PAGE>
% OF STOCK OWNED (1)
STATE OF DATE OF BY IMMEDIATE
AMERICAN FINANCIAL GROUP, INC. DOMICILE INCORP. PARENT COMPANY NATURE OF BUSINESS
---------- -------- -------------------- --------------------
Agricultural Excess and Delaware 02/28/79 100 Excess & Surplus Lines Insurance
Surplus Insurance Company
Agricultural Insurance Ohio 03/23/05 100 Property/Casualty Insurance
Company
American Alliance Insurance Arizona 09/11/45 100 Property/Casualty Insurance
Company
American Annuity Group, Delaware 05/15/87 81.43(2) Holding Company
Inc.
AAG Insurance Agency, Kentucky 12/06/94 100 Life Insurance Agency
Inc.
AAG Securities, Inc. Ohio 12/10/93 100 Broker-Dealer
Annuity Ohio 11/31/81 100 Life Insurance Company
Investors(SERVICEMARK)
Life Insurance Company
GALIC Disbursing Company Ohio 05/31/94 100 Payroll Servicer
Great American Life Ohio 12/15/59 100 Life Insurance
Insurance Company
CHATBAR, Inc. Massachusetts 11/02/93 100 Hotel Operator
GALIC Brothers, Inc. Ohio 11/12/93 80 Real Estate Management
Western Pacific Life California 08/10/67 100 Life Insurance Company
Insurance Company
Lifestyle Financial Ohio 12/29/93 100 Marketing Services
Investments, Inc.
Lifestyle Financial Ohio 03/07/94 beneficial interest Life Insurance Agency
Investments Agency of
Ohio, Inc.
Lifestyle Financial Indiana 02/24/94 100 Life Insurance Agency
Investments of
Indiana, Inc.
Lifestyle Financial Kentucky 10/03/94 100 Insurance Agency
Investments of
Kentucky, Inc.
__________________________________________________________________________
- 16 -
<PAGE>
% OF STOCK OWNED (1)
STATE OF DATE OF BY IMMEDIATE
AMERICAN FINANCIAL GROUP, INC. DOMICILE INCORP. PARENT COMPANY NATURE OF BUSINESS
---------- -------- -------------------- --------------------
Lifestyle Financial Minnesota 06/10/85 100 Insurance Agency
Investments of the
Northwest, Inc.
Lifestyle Financial North Carolina 07/13/94 100 Insurance Agency
Investments of the
Southeast, Inc.
Retirement Resources Indiana 02/07/95 100 Insurance Agency
Group, Inc.
SPELCO (UK) Ltd. United Kingdom 00/00/00 99 Inactive
SWTC, Inc. Delaware 00/00/00 100 Inactive
Electromag N.V. Belgium 00/00/00 100 Manf. & Sells Electronic Components
SWTC Hong Kong Ltd. Hong Kong 00/00/00 100 Inactive
Technomil Ltd. Delaware 00/00/00 100 Inactive
American Custom Insurance Ohio 07/27/83 100 Management Holding Company
Services Holding Company
American Custom InsuranceCalifornia 05/18/92 100 Insurance Agency & Brokerage
Services California, Inc.
Eden Park Insurance California 02/13/90 100 Wholesale Brokerage for Surplus Lines
Brokers, Inc.
Professional Risk Illinois 03/01/90 100 Insurance Agency
Brokers, Inc.
Professional Risk BrokersMassachusetts 04/19/94 100 Surplus Lines Brokerage
insurance, Inc.
Professional Risk BrokersConnecticut 07/09/92 100 Insurance Agency & Brokerage
of Connecticut, Inc.
Utility Insurance Texas 04/06/95 100 (2) Texas Local Recording Agency
Services, Inc.
Utility Management Texas 09/07/65 100 Texas Managing General Agency
Services, Inc.
American Custom Insurance Illinois 07/08/92 100 Underwriting Office
Services Illinois, Inc.
__________________________________________________________________________
- 17 -
<PAGE>
% OF STOCK OWNED (1)
STATE OF DATE OF BY IMMEDIATE
AMERICAN FINANCIAL GROUP, INC. DOMICILE INCORP. PARENT COMPANY NATURE OF BUSINESS
---------- -------- -------------------- --------------------
American Empire Surplus Delaware 07/15/77 100 Excess & Surplus Lines Insurance
Lines Insurance Company
American Empire InsuranceOhio 11/26/79 100 Property/Casualty Insurance
Company
Stonewall Texas 05/19/75 100 Insurance Agency
Underwriters, Inc.
Fidelity Environmental New Jersey 06/30/87 100 Property/Casualty Insurance
Insurance Company
American Financial Connecticut 1871 82.62(2) Closed End Investment Company
Enterprises, Inc.
American Insurance Agency, Kentucky 07/27/67 100 Insurance Agency
Inc.
American National Fire New York 08/22/47 100 Property/Casualty Insurance
Insurance Company
American Special Risk, Inc. Illinois 12/29/81 100 Insurance Broker/Managing General
Agency
ABI Special Risk of Arizona 02/06/90 100 Inactive
Arizona, Inc.
American Spirit Insurance Indiana 04/05/88 100 Property/Casualty Insurance
Company
OBGC Corporation Florida 11/23/77 80 Real Estate Development
Brothers Property Ohio 09/08/87 80 Real Estate Investment
Corporation
Brothers Barrington Oklahoma 03/18/94 100 Real Estate Holding Corporation
Corporation
Brothers Cincinnatian Ohio 01/25/94 100 Hotel Manager
Corporation
Brothers Columbine Oklahoma 03/18/94 100 Real Estate Holding Corporation
Corporation
Brothers Landing Louisiana 02/24/94 100 Real Estate Holding Corporation
Corporation
__________________________________________________________________________
- 18 -
<PAGE>
% OF STOCK OWNED (1)
STATE OF DATE OF BY IMMEDIATE
AMERICAN FINANCIAL GROUP, INC. DOMICILE INCORP. PARENT COMPANY NATURE OF BUSINESS
---------- -------- -------------------- --------------------
Brothers Pennsylvanian Pennsylvania 12/23/94 100 Real Estate Holding Corporation
Corporation
Brothers Port Richey Florida 12/06/93 100 Apartment Manager
Corporation
Brothers Property Ohio 09/25/87 100 Real Estate Management
Management Corporation
Brothers Railyard Texas 12/14/93 100 Apartment Manager
Corporation
Crop Managers Insurance Kansas 08/09/89 100 Insurance Agency
Agency, Inc.
Dempsey & Siders Agency, Ohio 05/09/56 100 Insurance Agency
Inc.
Eagle American Insurance Ohio 07/01/87 100 Property/Casualty Insurance
Company
Eden Park Insurance Company Indiana 01/08/90 100 Special Risk Surplus Lines
FCIA Management Company, New York 09/17/91 79 Servicing Agent
Inc.
GAI-340, Inc. Delaware 06/09/88 100 Co-Owner Corporate Aircraft
GAI-N26LB, Inc. Delaware 02/02/88 100 Co-Owner Corporate Aircraft
The Gains Group, Inc. Ohio 01/26/82 100 Marketing of Advertising
Great American Lloyd's, Texas 08/02/83 100 Attorney-in-Fact--Texas Lloyd's
Inc. Company
Great American Lloyd's Texas 10/09/79 beneficial interest Lloyd's Plan Insurer
Insurance Company
Great American Management Ohio 12/05/74 100 Data Processing and Equipment Leasing
Services, Inc.
American Payroll Ohio 02/20/87 100 Payroll Services
Services, Inc.
Great American Re Inc. Delaware 05/14/71 100 Reinsurance Intermediary
Great American Risk Ohio 04/21/80 100 Insurance Risk Management
Management, Inc.
__________________________________________________________________________
- 19 -
<PAGE>
% OF STOCK OWNED (1)
STATE OF DATE OF BY IMMEDIATE
AMERICAN FINANCIAL GROUP, INC. DOMICILE INCORP. PARENT COMPANY NATURE OF BUSINESS
---------- -------- -------------------- --------------------
Great American--Midwest, Ohio 12/17/86 100 Management Holding Company
Inc.
Great Texas County Mutual Texas 04/29/54 beneficial interest Property/Casualty Insurance
Insurance Company
Grizzly Golf Center, Inc. Ohio 11/08/93 100 Operate Golf Courses
Homestead Snacks Inc. California 03/02/79 100 (2) Meat Snack Distribution
Giant Snacks, Inc. Delaware 07/06/89 100 Meat Snack Distribution
Key Largo Group, Inc. Florida 07/28/81 100 Land Developer & Resort Operator
The Real Estate, Ltd. Florida 08/20/85 100 Property Sales
Company at Ocean Reef
Key Largo Group Solid Florida 12/01/86 100 Trash Removal
Waste, Inc.
Key Largo Group Utility Florida 11/26/84 100 Water & Sewer Utility
Company
Mid-Continent Casualty Oklahoma 02/26/47 100 Property/Casualty Insurance
Company
Mid-Continent Insurance Oklahoma 08/13/92 100 Property/Casualty Insurance
Company
Oklahoma Surety Company Oklahoma 08/05/68 100 Property/Casualty Insurance
National Interstate Ohio 01/26/89 51 Holding Company
Corporation
American Highways California 05/05/94 100 Insurance Agency
Insurance Agency
National Interstate Texas 06/07/89 beneficial interest Insurance Agency
Insurance Agency of
Texas, Inc.
National Interstate Ohio 02/13/89 100 Insurance Agency
Insurance Agency, Inc.
National Interstate Ohio 02/10/89 100 Property/Casualty Insurance
Insurance Company
__________________________________________________________________________
- 20 -
<PAGE>
% OF STOCK OWNED (1)
STATE OF DATE OF BY IMMEDIATE
AMERICAN FINANCIAL GROUP, INC. DOMICILE INCORP. PARENT COMPANY NATURE OF BUSINESS
---------- -------- -------------------- --------------------
North America Livestock, Florida 12/03/82 100 Managing General Agency
Inc.
Penn Central Reinsurance Ohio 12/22/88 100 Property/Casualty Reinsurance
Company
Pointe Apartments, Inc. Minnesota 06/24/93 100 Real Estate Holding Corporation
Seven Hills Insurance New York 06/30/32 100 Property/Casualty Reinsurance
Company
Stonewall Insurance Company Alabama 02/18/66 100 Property/Casualty Insurance
Stonewall Surplus Lines Delaware 01/12/82 100 Excess & Surplus Lines Insurance
Insurance Company
Tamarack American, Inc. Delaware 06/10/86 100 Management Holding Company
Transport Insurance Company Ohio 05/25/76 100 Property/Casualty Insurance
American Commonwealth Texas 07/23/63 100 Real Estate Development
Development Company
ACDC Holdings Texas 05/04/81 100 Real Estate Development
Corporation
Spring Park Texas 03/31/71 50 Real Estate Holding Co. (Jt. Venture)
Development Company
Instech Corporation Texas 09/02/75 100 Claim & Claim Adjustment Services
TICO Insurance Company Ohio 06/03/80 100 Property/Casualty Insurance
Transport Managing Texas 05/19/89 100 Managing General Agency
General Agency, Inc.
Transport Insurance Texas 08/21/89 beneficial interest Insurance Agency
Agency, Inc.
Transport Underwriters California 05/11/45 100 Holding Company/Agency
Association
One East Fourth, Inc. Ohio 02/03/64 100 Commercial Leasing
Pioneer Carpet Mills, Inc. Ohio 04/29/76 100 Carpet Manufacturing
Provident Travel Corporation Ohio 07/09/84 100 Travel Agency
__________________________________________________________________________
- 21 -
<PAGE>
% OF STOCK OWNED (1)
STATE OF DATE OF BY IMMEDIATE
AMERICAN FINANCIAL GROUP, INC. DOMICILE INCORP. PARENT COMPANY NATURE OF BUSINESS
---------- -------- -------------------- --------------------
TEJ Holdings, Inc. Ohio 12/04/84 100 Real Estate Holdings
TEJ II, Inc. Delaware 10/28/94 100 General Partner
American Financial Warrant Delaware 10/28/94 partnership interest Securities Holder
Holding Limited Partnership
Three East Fourth, Inc. Ohio 08/10/66 100 Commercial Leasing
American Premier Underwriters, Pennsylvania 1846 100 Diversified
Inc.
Pennsylvania Company Delaware 12/05/58 100 Holding Company
Atlanta Casualty Company Illinois 06/13/72 100 (2) Property/Casualty Insurance
American Premier Insurance Indiana 11/30/89 100 Property/Casualty Insurance
Company
Atlanta Specialty Insurance Iowa 02/06/74 100 Property/Casualty Insurance
Company
Mr. Agency of Georgia, Inc. Georgia 04/01/77 100 Insurance Agency
Atlanta Casualty General Texas 03/15/61 100 Managing General Agency
Agency, Inc.
Atlanta Insurance Georgia 02/06/71 100 Insurance Agency
Brokers, Inc.
Treaty House, Ltd. (d/b/aNevada 11/02/71 100 Insurance Premium Finance
Mr. Budget)
Buckeye Management Company Delaware 09/18/86 100 General Partner/Manager of Pipeline
l.p.
Buckeye Pipe Line Company Delaware 09/19/86 100 Pipeline Manager
Great Southwest Corporation Delaware 10/25/78 100 Real Estate Developer
World Houston, Inc. Delaware 08/17/77 100 Real Estate Developer
Infinity Insurance Company Florida 07/09/55 100 Property/Casualty Insurance
Infinity Agency of Texas, Texas 07/15/92 100 Managing General Agency
Inc.
The Infinity Group, Inc. Indiana 07/22/92 100 Insurance Holding Company
__________________________________________________________________________
- 22 -
<PAGE>
% OF STOCK OWNED (1)
STATE OF DATE OF BY IMMEDIATE
AMERICAN FINANCIAL GROUP, INC. DOMICILE INCORP. PARENT COMPANY NATURE OF BUSINESS
---------- -------- -------------------- --------------------
Infinity Select Insurance Indiana 06/11/91 100 Property/Casualty Insurance
Company
Infinity Southern Insurance Alabama 08/05/92 100 Property/Casualty Insurance
Corporation
Leader National Insurance Ohio 03/20/63 100 Property/Casualty Insurance
Company
Budget Insurance Ohio 02/14/64 100 Premium Finance Company
Premiums, Inc.
Leader National Agency, Ohio 04/05/63 100 Brokering Agent
Inc.
Leader National Agency ofTexas 01/25/94 100 Managing General Agency
Texas, Inc.
Leader National InsuranceArizona 12/05/73 100 Brokering Agent
Agency of Arizona
Leader Preferred Ohio 11/07/94 100 Property/Casualty Insurance
Insurance Company
Leader Specialty Indiana 03/10/94 100 Property/Casualty Insurance
Insurance Company
PCC Hotel, Inc. Delaware 07/22/83 100 Inactive
PCC-N26LB, Inc. Delaware 02/02/88 100 Co-Owner Corporate Aircraft
PCC Technical Industries, Inc.California 03/07/55 100 Holding Company
ESC, Inc. California 11/02/62 100 Connector Accessories
Marathon Manufacturing Delaware 11/18/83 100 Holding Company
Companies, Inc.
Marathon Battery Company Delaware 08/18/69 100 Inactive
Marathon Manufacturing Delaware 12/07/79 100 Inactive
Company
Marathon Flite-TronicsDelaware 06/01/81 100 Inactive
Company
Old MPT Company Delaware 11/18/83 100 Inactive
__________________________________________________________________________
- 23 -
<PAGE>
% OF STOCK OWNED (1)
STATE OF DATE OF BY IMMEDIATE
AMERICAN FINANCIAL GROUP, INC. DOMICILE INCORP. PARENT COMPANY NATURE OF BUSINESS
---------- -------- -------------------- --------------------
PCC Maryland Realty Corp. Maryland 08/18/93 100 Real Estate Holding Company
Penn Camarillo Realty Corp. California 11/24/92 100 Real Estate Holding Company
PCC-340, Inc. Delaware 06/09/88 100 Co-Owner Corporate Aircraft
Penn Central UK Limited United Kingdom 10/28/92 100 Insurance Holding Company
Insurance (GB) Limited United Kingdom 05/13/92 100 Property/Casualty Insurance
Putnam Holdings, Inc. Delaware 06/06/84 100 Inactive
Putnam Sub, Inc. Delaware 01/03/72 100 Inactive
Republic Indemnity Company of California 12/05/72 100 Workers' Compensation Insurance
America
Republic Indemnity Company California 10/13/82 100 Workers' Compensation Insurance
of California
Risico Management Corporation Delaware 01/10/89 100 Risk Management
Telsta Network Services, Inc. Delaware 10/12/84 100 Inactive
Windsor Insurance Company Indiana 11/05/87 100 (2) Property/Casualty Insurance
American Deposit Insurance Oklahoma 12/28/66 100 Property/Casualty Insurance
Company
Granite Finance Co., Inc.Texas 11/09/65 100 Premium Financing
Coventry Insurance Company Ohio 09/05/89 100 Property/Casualty Insurance
El Aguila Compania de Mexico 11/24/94 100 (2) Property/Casualty Insurance
Seguros, S.A. de C.V.
Moore Group Inc. Georgia 12/19/62 100 Insurance Holding Company/Agency
Casualty Underwriters, Georgia 10/01/54 51 Insurance Agency
Inc.
Dudley L. Moore Louisiana 03/30/78 beneficial interest Insurance Agency
Insurance, Inc.
Hallmark General Oklahoma 06/16/72 beneficial interest Insurance Agency
Insurance Agency, Inc.
__________________________________________________________________________
- 24 -
<PAGE>
% OF STOCK OWNED (1)
STATE OF DATE OF BY IMMEDIATE
AMERICAN FINANCIAL GROUP, INC. DOMICILE INCORP. PARENT COMPANY NATURE OF BUSINESS
---------- -------- -------------------- --------------------
Middle Tennessee Tennessee 11/14/69 100 Insurance Agency
Underwriters, Inc.
Insurance Finance Tennessee 01/03/62 100 Premium Financing
Company
Windsor Group, Inc. Georgia 05/23/91 100 Insurance Holding Company
Regal Insurance Company Indiana 11/05/87 100 Property/Casualty Insurance
Texas Windsor Group, Inc. Texas 06/23/88 100 Insurance Agency
PCC Real Estate, Inc. New York 12/15/86 100 Holding Company
PCC Billboard Realty Corp. New York 12/15/86 100 Real Estate Developer
PCC Chicago Realty Corp. New York 12/23/86 100 Real Estate Developer
PCC Fordham Realty Corp. New York 10/16/86 100 Real Estate Developer
PCC Gun Hill Realty Corp. New York 12/18/85 100 Real Estate Developer
PCC Irvington Realty Corp. New York 10/15/85 100 Real Estate Developer
PCC Michigan Realty, Inc. Michigan 11/09/87 100 Real Estate Developer
PCC Scarsdale Realty Corp. New York 06/01/86 100 Real Estate Developer
Scarsdale Depot Associates, Delaware 05/05/89 80 Real Estate Developer
L.P.
PCC Tuckahoe Realty Corp. New York 02/24/86 100 Real Estate Developer
Penn Central Energy Management Delaware 05/11/87 100 Energy Operations Manager
Company
The Ann Arbor Railroad Company Michigan 1895 99 Inactive
The Associates of the Jersey New Jersey 1804 100 Inactive
Company
Delbay Corporation Delaware 12/27/62 100 Inactive
The Indianapolis Union Railway Indiana 1872 100 Inactive
Company
Lehigh Valley Railroad Company Pennsylvania 1846 100 Inactive
__________________________________________________________________________
- 25 -
<PAGE>
% OF STOCK OWNED (1)
STATE OF DATE OF BY IMMEDIATE
AMERICAN FINANCIAL GROUP, INC. DOMICILE INCORP. PARENT COMPANY NATURE OF BUSINESS
---------- -------- -------------------- --------------------
The New York and Harlem Railroad New York 1831 97 Inactive
Company
The Owasco River Railway, Inc. New York 1881 100 Inactive
Penn Central Properties, Inc. Pennsylvania 12/27/82 100 Pennsylvania Real Estate
Penn Towers, Inc. Pennsylvania 04/27/59 100 Inactive
Terminal Realty Penn Co. District of 09/23/68 100 Inactive
Timberglen Limited United Kingdom 10/28/92 100 Investments
United Railroad Corp. Delaware 11/25/81 100 Inactive
Waynesburg Southern Railroad Pennsylvania 09/01/66 100 Inactive
Company
The Michigan Central Railroad Michigan 12/30/01 100 Inactive
Company
Detroit Manufacturers RailroadMichigan 01/30/02 82 Inactive
Company
Pennsylvania-Reading Seashore New Jersey 06/14/01 66.67 Inactive
Line
Pittsburgh and Cross Creek Pennsylvania 08/14/70 83 Inactive
Railroad Company
(1) Except Director's Qualifying Shares.
(2) Total percentage owned by parent shown and by
other affiliated company(ies).
</TABLE>
Item 27. Number of Contract Owners
Not Applicable.
Item 28. Indemnification
__________________________________________________________________________
- 26 -
<PAGE>
(a) The Code of Regulations of Annuity Investors(SERVICEMARK) Life
Insurance Company provide in Article V follows:
The Corporations shall, to the full extent permitted by the
General Corporation Law of Ohio, indemnify any person who is
or was a director or officer of the Corporation and whom it
may indemnify pursuant thereto. The Corporation may, within
the sole discretion of the Board of Directors, indemnify in
whole or in part any other persons whom it may indemnify
pursuant thereto.
Insofar as indemnification for liability arising under the Securities Act
of 1933 ("1933 Act") may be permitted to directors, officers and
controlling person of the Depositor pursuant to the foregoing provisions,
or otherwise, the Depositor has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the 1933 Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the Depositor of expenses incurred or paid by the
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Depositor will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it
is against public policy as expressed in the 1933 Act and will be governed
by the final adjudication of such issue.
(b) The directors and officers of Annuity Investors(SERVICEMARK) Life
Insurance Company are covered under a Directors and Officers Reimbursement
Policy. Under the Reimbursement Policy, directors and officers are
indemnified for loss arising from any covered claim by reason of any
Wrongful Act in their capacities as directors or officers, except to the
extent the Company has indemnified them. In general, the term "loss"
means any amount which the directors or officers are legally obligated to
pay for a claim for Wrongful Acts. In general, the term "Wrongful Acts"
means any breach of duty, neglect, error, misstatement, misleading
statement, omission or act by a director or officer while acting
individually or collectively in their capacity as such claimed against
them solely by reason of their being directors and officers. The limit of
liability under the program is $20,000,000 for the policy year ending
September 1, 1995. The primary policy under the program is with National
Union Fire Insurance Company of Pittsburgh, PA. in the name of American
Premier Underwriters, Inc.
Item 29. Principal Underwriter
AAG Securities, Inc. is the underwriter and distributor of the Contracts
as defined in the Investment Company Act of 1940 ("1940 Act").
(a) AAG Securities, Inc. does not act as a principal underwriter,
depositor, sponsor or investment adviser for any investment company other
than Annuity Investors(SERVICEMARK) Variable Account A.
__________________________________________________________________________
- 27 -
<PAGE>
(b) Directors and Officers of AAG Securities, Inc.
Name and Principal Position with AAG
Business Address Securities, Inc.
Thomas Kevin Liguzinski (1) Chief Executive Officer
and Director
Mark Francis Muething (1) Vice President, Secretary
and Director
William Jack Maney, II (1) Director
Jeffrey Scott Tate (1) Director
James Medford Tarkington (1) President
Andrew Conrad Bambeck, III (1) Vice President
William Claire Bair, Jr. (1) Treasurer
_________________________
(1) 250 East Fifth Street, Cincinnati, Ohio 45202
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts and records required to be maintained by Section 31(a) of the
1940 Act and the rules under it are maintained by Lynn E. Laswell,
Assistant Vice President, of the Company at the Administrative Office.
Item 31. Management Services
Not applicable.
Items 32. Undertakings
(a) Registrant undertakes that it will file a post-effective amendment
to this registration statement as frequently as necessary to ensure
that the audited financial statements in the registration statement
are never more than 16 months old for so long as payments under the
variable annuity contracts may be accepted.
(b) Registrant undertakes that it will include either (1) as part of any
application to purchase a Contract offered by the Prospectus, a
space that an applicant can check to request a Statement of
Additional Information, or (2) a post card or similar written
communication affixed to or included in the Prospectus that the
applicant can remove to send for a Statement of Additional
Information.
__________________________________________________________________________
- 28 -
<PAGE>
(c) Registrant undertakes to deliver any Prospectus and Statement of
Additional Information and any financial statements required to be
made available under this Form promptly upon written or oral request
to the Company at the address or phone number listed in the
Prospectus.
__________________________________________________________________________
- 29 -
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant certifies that it has caused this Registration
Statement to be signed on its behalf by the undersigned in the City of
Cincinnati, State of Ohio on the 27th day of December, 1995.
ANNUITY INVESTORS(SERVICEMARK)
VARIABLE ACCOUNT A (REGISTRANT)
By:/s/ Robert Allen Adams
-----------------------
Robert Allen Adams
Chairman of the Board, President
and Director, Annuity Investors(SERVICEMARK)
Life Insurance Company
ANNUITY INVESTORS(SERVICEMARK)
LIFE INSURANCE COMPANY (DEPOSITOR)
By:/s/ Robert Allen Adams
-----------------------
Robert Allen Adams
Chairman of the Board, President
and Director
As required by the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Robert Allen Adams __________________________ December 27, 1995
------------------------- Principal Executive
Robert Allen Adams Officer, Director
/s/ Robert Eugene Allen __________________________ December 27, 1995
-------------------------- Principal Financial
Robert Eugene Allen Officer
__________________________________________________________________________
- 30 -
<PAGE>
/s/ Lynn Edward Laswell __________________________ December 27, 1995
-------------------------- Principal Accounting
Lynn Edward Laswell Officer
/s/ Stephen Craig Lindner __________________________ December 27, 1995
--------------------------- Director
Stephen Craig Lindner
/s/ William Jack Maney,II __________________________ December 27, 1995
--------------------------- Director
William Jack Maney, II Officer
/s/ James Michael Mortenson __________________________ December 27, 1995
--------------------------- Director
James Michael Mortenson
/s/ Mark Francis Muething __________________________ December 27, 1995
--------------------------- Director
Mark Francis Muething
/s/ Jeffrey Scott Tate __________________________ December 27, 1995
--------------------------- Director
Jeffrey Scott Tate
</TABLE>
__________________________________________________________________________
- 31 -
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
(1) Resolution of the Board of Directors of
Annuity Investors(SERVICEMARK) Life
Insurance Company authorizing establishment
of Annuity Investors(SERVICEMARK) Variable
Account A
(6)(a) Articles of Incorporation of Annuity
Investors(SERVICEMARK) Life Insurance
Company
(6)(b) Code of Regulations of Annuity
Investors(SERVICEMARK) Life Insurance
Company
(8)(a) Participation Agreement between Annuity
Investors(SERVICEMARK) Life Insurance
Company and Dreyfus Variable Investment Fund
(8)(b) Participation Agreement between Annuity
Investors(SERVICEMARK) Life Insurance
Company and Dreyfus Stock Index Fund
(8)(c) Participation Agreement between Annuity
Investors(SERVICEMARK) Life Insurance
Company and Dreyfus Socially Responsible
Fund
(8)(f) Service Agreement between Annuity
Investors(SERVICEMARK) Life Insurance
Company and American Annuity Group, Inc.
(8)(g) Agreement between AAG Securities Inc. and
AAG Insurance Agency, Inc.
(8)(h) Investment Service Agreement between Annuity
Investors(SERVICEMARK) Life Insurance
Company and American Annuity Group, Inc.
(9) Opinion and Consent of Counsel
- i -
<PAGE>
<PAGE>
EXHIBIT (1)
ACTION TAKEN IN WRITING BY ALL MEMBERS OF THE
BOARD OF DIRECTORS OF
ANNUITY INVESTORS LIFE INSURANCE COMPANY
PURSUANT TO SECTION 1701.54 OF THE OHIO REVISED CODE
----------------------------------------------------
The undersigned, being all of the Directors of Annuity Investors
Life Insurance Company, an Ohio corporation (the "Corporation"), do hereby
adopt the following resolutions by unanimous written consent pursuant to
Section 1701.54 of the Ohio Revised Code on May 26, 1995.
WHEREAS, Section 3907.15 of the Ohio Revised Code permits the
establishment of one or more separate accounts;
WHEREAS, It is desired that the Corporation have a funding
vehicle for its variable annuity contracts;
NOW, THEREFORE BE IT
RESOLVED, That pursuant to Section 3907.15 of the Ohio Revised
Code, a separate account referred to herein as "Annuity Investors Variable
Account A" ("Variable Account A") is hereby established and empowered to:
a. to the extent required by the Investment Company Act of
1940, register under such Act and make applications for
such exemptions or orders under such provisions thereof
as may appear to be necessary or desirable;
b. to the extent required by the Securities Act of 1933,
effect one or more registrations thereunder and, in
connection with such registrations, file one or more
registration statements thereunder, or amendments
thereto, including any documents or exhibits required as
a part thereof;
c. provide for the sale of contracts issued by the Corpora-
tion as the officers of the Corporation may deem neces-
sary and appropriate, to the extent such contracts
provide for allocation of amounts to Variable Account A;
d. provide for custodial or depository arrangements for
assets allocated to Variable Account A as the officers of
the Corporation may deem necessary and appropriate
including self-custodianship and safekeeping arrangements
by the Corporation;
e. select an independent public accountant to audit the
books and records of Variable Account A;
<PAGE>
- 2 -
f. invest or reinvest the assets of Variable Account A in
securities issued by one or more investment companies
registered under the Investment Company Act of 1940 or
other appropriate securities, as the officers of the
Corporation may designate;
g. divide Variable Account A into divisions and subdivisions
with each division or subdivision investing in shares of
designated investment companies or portfolios or classes
thereof or other appropriate securities; and
h. perform such additional functions and take such addi-
tional action as may be necessary or desirable to carry
out the foregoing and the intent and purpose thereof;
FURTHER RESOLVED, That the assets of Variable Account A shall be
derived solely from (a) sale of variable annuity products; (b) funds
corresponding to dividend accumulation with respect to investment of such
assets, and (c) advances made by the Corporation in connection with the
operation of Variable Account A;
FURTHER RESOLVED, That pursuant to Section 3907.15 of the Ohio
Revised Code the assets of Variable Account A shall be legally segregated
and that part of the assets of Variable Account A with a value equal to
the reserves and other variable annuity contract liabilities shall not be
chargeable with the liabilities arising out of any other business of the
Corporation;
FURTHER RESOLVED, That this Corporation shall maintain in
Variable Account A assets with a fair market value at least equal to the
statutory valuation reserves for the variable annuity contracts;
FURTHER RESOLVED, That the officers of the Corporation be, and
each of them hereby is, authorized in their discretion as they may deem
appropriate from time to time in accordance with applicable laws and
regulations (a) to modify or eliminate any such divisions or subdivisions,
(b) to change the designation of Variable Account A to another
designation, and (c) to designate further any division or subdivision
thereof, and (d) to deregister Variable Account A under the Investment
Company Act of 1940 and to deregister the contracts or units of interest
thereunder under the Securities Act of 1933;
FURTHER RESOLVED, That the officers of the Corporation be, and
each of them hereby is, authorized to invest cash from the Corporation's
general account in Variable Account A or in any division thereof as may be
deemed necessary or appropriate to facilitate the commencement of Variable
Account A's operations or to meet any minimum capital requirements under
the Investment Company Act of 1940, and to transfer cash or securities
from time to time between the Corporation's general account and Variable
Account A as deemed necessary or appropriate so long as such transfers are
not prohibited by law and are consistent with the terms of the variable
<PAGE>
- 3 -
annuity contracts issued by the Corporation providing for allocations to
Variable Account A;
FURTHER RESOLVED, That the income, gains, and losses (whether or
not realized) from assets allocated to Variable Account A shall, in
accordance with any variable annuity contracts issued by the Corporation
providing for allocations to Variable Account A, be credited to or charged
against such Separate Account without regard to the other income, gains,
or losses of the Corporation;
FURTHER RESOLVED, That authority is hereby delegated to the Chief
Executive Officer or the President of the Corporation to adopt procedures
providing for, among other things, criteria by which the Corporation shall
institute procedures to provide for a pass-through of voting rights to the
owners of variable annuity contracts issued by the Corporation providing
for allocation to Variable Account A with respect to the shares of any
investment companies which are held in Variable Account A;
FURTHER RESOLVED, That the officers of the Corporation are
authorized and directed, with the assistance of accountants, legal
counsel, and other consultants, to prepare and execute any necessary
agreements to enable Variable Account A to invest or reinvest the assets
of Variable Account A in securities issued by any investment companies
registered under the Investment Company Act of 1940, or other appropriate
securities as the officers of the Corporation may designate pursuant to
the provisions of the variable annuity contracts issued by the Corporation
providing for allocations to Variable Account A.
FURTHER RESOLVED, The fiscal year of Variable Account A shall end
on the 31st day of December each year;
FURTHER RESOLVED, That the officers of the Corporation, with the
assistance of accountants, legal counsel, and other consultants, are
authorized to prepare, execute, and file all periodic reports required
under the Investment Company Act of 1940 and the Securities Exchange Act
of 1934;
FURTHER RESOLVED, That the Corporation may register under the
Securities Act of 1933 variable annuity contracts, or units of interest
thereunder, under which amounts will be allocated by the Corporation to
Variable Account A to support reserves for such contracts and, in
connection therewith, that the officers of the Corporation be, and each of
them hereby is, authorized, with the assistance of accountants, legal
counsel, and other consultants, to prepare, execute, and file with the
Securities and Exchange Commission, in the name and on behalf of the
Corporation, registration statements under the Securities Act of 1933,
including prospectuses, supplements, exhibits, and other documents
relating thereto, and amendments to the foregoing, in such form as the
officer executing the same may deem necessary or appropriate;
<PAGE>
- 4 -
FURTHER RESOLVED, That the officers of the Corporation be, and
each of them hereby is, authorized, with the assistance of accountants,
legal counsel, and other consultants, to take all actions necessary to
register Variable Account A as a unit investment trust under the
Investment Company Act of 1940 and to take such related actions as they
deem necessary and appropriate to carry out the foregoing;
FURTHER RESOLVED, That the officers of the Corporation be, and
each of them hereby is, authorized to prepare, execute, and file, with the
assistance of accountants, legal counsel, and other consultants, with the
Securities and Exchange Commission applications and amendments thereto for
such exemptions from or orders under the Investment Company Act of 1940,
and to request from the Securities and Exchange Commission no action and
interpretative letters as they may from time to time deem necessary or
desirable;
FURTHER RESOLVED, That the General Counsel of the Corporation is
hereby appointed as agent for service under any such registration
statement and is duly authorized to receive communications and notices
from the Securities and Exchange Commission with respect thereto and to
exercise powers given to such agent by the Securities Act of 1933 and the
rules thereunder, and any other necessary acts;
FURTHER RESOLVED, That the officers of the Corporation be, and
each of them hereby is, authorized, with the assistance of accountants,
legal counsel, and other consultants, to effect in the name of and on
behalf of the Corporation all such registrations, filings, and
qualifications under blue sky or other applicable securities laws and
regulations and under insurance securities laws and insurance laws and
regulations of such states and other jurisdictions, as they may deem
necessary or appropriate with respect to the Corporation and with respect
to any variable annuity contracts under which amounts will be allocated by
the Corporation to Variable Account A to support reserves for such
contracts; such authorization shall include registration, filing, and
qualification of the Corporation and of said contracts, as well as
registration, filing, and qualification of officers, employees, and agents
of the Corporation as brokers, dealers, agents, salesmen, or otherwise;
and such authorization shall also include, in connection therewith,
authority to prepare, execute, acknowledge, and file all such
applications, applications for exemptions, certificates, affidavits,
covenants, consents to service of process, and other instruments and to
take all such action as the officer executing the same or taking such
action may deem necessary or desirable;
FURTHER RESOLVED, That the officers of the Corporation be, and
each of them hereby is, authorized to execute and deliver all such
documents and papers and to do or cause to be done all such acts and
things as they may deem necessary or desirable to carry out the foregoing
resolutions and the intent and purpose thereof.
<PAGE>
- 5 -
Signed at Cincinnati, Ohio this 26th day of May, 1995.
/s/ Robert A. Adams
-------------------------------
/s/ S. Craig Lindner
-------------------------------
/s/ William J. Maney
-------------------------------
/s/ James M. Mortensen
-------------------------------
/s/ Mark F. Muething
-------------------------------
/s/ Jeffrey S. Tate
-------------------------------
<PAGE>
EXHIBIT (6)(a)
CERTIFICATION
******
As DIRECTOR OF INSURANCE OF THE STATE OF OHIO, I do hereby certify that
that I have the annexed copy of the:
Articles of Incorporation and all amendments of the ANNUITY
INVESTORS LIFE INSURANCE COMPANY, Cincinnati, Ohio.
with the original on file in this Department.
May 8, 1995
IN WITNESS WHERE OF, I have hereunto
subscribed my name and caused my seal to
be affixed at Columbus, Ohio, this day
and date
Director of Insurance of Ohio
<PAGE>
APPROVED
BY ----------------------
DATE 11/13/81
--------------------
AMOUNT $650.00
------------------
ARTICLES OF INCORPORATION
OF
UCL LIFE ASSURANCE CORPORATION
The undersigned, desiring to form a stock life insurance
corporation under the laws of the State of Ohio, do hereby certify:
FIRST: The name of the corporation shall be UCL LIFE ASSURANCE
CORPORATION.
SECOND: The place of business and the location of the principal
office of the Corporation shall be Hamilton County, Ohio, but it may
establish other offices or places of business in the State of Ohio and
elsewhere.
THIRD: The business to be undertaken by and the objects and
purposes of the Corporation shall be to insure the lives of persons in and
out of the State of Ohio under policies and contracts providing for fixed
or variable benefits or both; to insure against accidents to persons,
sickness, or temporary or permanent physical disability; to take all risks
in connection with or pertaining to such insurances; to grant, purchase
and dispose of annuities providing for fixed or variable benefits or both;
to set up and operate separate accounts; to carry on all of said business
under either the participating or non-participating plan or both; to
accept reinsurance; and to do any and all other acts either permitted or
not prohibited under the laws of the State of Ohio for a stock life
insurance corporation.
FOURTH: The number of shares which the Corporation is authorized
to have outstanding is Fifteen Thousand (15,000), all of which shall be
Common Shares, par value One Hundred Dollars ($100).
FIFTH: The corporate powers of the Corporation shall be
exercised by and its business and affairs shall be under the control of a
Board of Directors, a majority of whom shall be citizens of the State of
Ohio and all of whom shall be shareholders of the Corporation. The Board
of Directors shall be composed of seven (7) Directors unless and until
such number is changed by the affirmative vote of the holders of a
majority of the shares which are represented at the meeting of the
shareholders called for the purpose of electing directors at which a
quorum is present and which are entitled to vote on such proposal. In no
event, however, shall the number of directors be less than five (5) nor
more than twenty-one (21). The directors shall be elected by the written
ballot of a majority of shareholders entitled to vote thereon at an annual
meeting of shareholders to be held at the principal office of the
<PAGE>
Corporation on the third Friday in February at such hour as the Board of
Directors may fix (provided, however, that in the event such day is a
legal holiday, the annual meeting shall be held the next February at such
hour as the Board of Directors may fix (provided, however, that in the
event such day is a legal holiday, the annual meeting shall be held the
next succeeding day not a Saturday, Sunday or legal holiday), or at a
special meeting of shareholders called for the purpose of electing
directors. Vacancies in the Board of Directors shall be filled for the
unexpired term by the vote of a majority of the remaining directors.
SIXTH: The officers of the Corporation shall be a President, one
or more Vice Presidents, a Secretary, a Treasurer and such other officers
and assistant officers as the Board of Directors may from time to time
deem necessary. Such officers shall be elected by the Board of Directors
at its first meeting held each year following the annual meeting of
shareholders, and shall hold their respective offices for one year and
until their successors are duly elected and qualified. Any officer may be
removed or suspended at any time with or without cause by the Board of
Directors. Any two offices except the offices of President and Vice
President may be held by the same person. Vacancies among the officers
may be filled for the unexpired term by the Board of Directors.
SEVENTH: The amount of capital to be employed in the business of
the Corporation will be paid-in-capital of not less than One Million Five
Hundred Thousand Dollars ($1,500,000). In addition to such paid-in-
capital, there shall be initial contributed surplus of not less than One
Million Five Hundred Thousand Dollars ($1,500,000). Additional
contributions to surplus may be made at any time and from time to time.
EIGHTH: The Corporation, by action of the Board and without
action by the shareholders, may purchase its shares of any class, whether
such shares or such class be now or hereafter authorized, for the purposes
and to the extent permitted by law.
NINTH: No holder of shares of the Corporation shall have any
preemptive right to subscribe for or to purchase any shares of the
Corporation of any class, whether such shares or such class be now or
hereafter authorized.
TENTH: Notwithstanding any provision of the General Corporation
Law or the Insurance Laws of Ohio now or hereafter in force, requiring for
any purpose the vote or consent of the holders of shares entitling them to
exercise two-thirds of the voting power of the Corporation or of any class
or classes of shares thereof, such action, unless otherwise expressly
required by statute, may be taken by the vote or consent of the holders of
shares entitling them to exercise a majority of the voting power of the
corporation or of such class or classes of shares thereof.
- 2 -
<PAGE>
IN WITNESS WHEREOF the undersigned have hereunto set their hands
this /s/ 2nd day of /s/ October , 1981.
----- ---------
/s/ Harry Rossi /s/ Kenneth J. Longerman
----------------------------- ------------------------------
Harry Rossi Kenneth J. Longerman
/s/ Charles C. Hinckley /s/ John C. Powers
----------------------------- ------------------------------
Charles C. Hinckley John C. Powers
/s/ Daniel J. Fischer /s/ Charles R. Scheper
----------------------------- ------------------------------
Daniel J. Fischer Charles R. Scheper
/s/ James P. Shanahan /s/ David F. Westerbeck
----------------------------- ------------------------------
James P. Shanahan David F. Westerbeck
/s/ Judith A. Kleemann /s/ Dennis L. Trammell
----------------------------- ------------------------------
Judith A. Kleemann Dennis L. Trammell
/s/ Charles W. McMahon /s/ Stephen R. Hatcher
----------------------------- ------------------------------
Charles W. McMahon Stephen R. Hatcher
/s/ Thomas J. Hummel
-----------------------------
Thomas J. Hummel
- 3 -
<PAGE>
ORIGINAL APPOINTMENT OF AGENT
------------------------------
The Undersigned, being at least a majority of the incor-
porators of UCL Life Assurance Corporation hereby appoint David F.
Westerbeck, a natural person resident in the county in which the
corporation has its principal office upon whom any process, notice or
demand required or permitted by statute to be served upon the corporation
may be served. His complete address is Post Office Box 179, Cincinnati,
Hamilton County, Ohio, 45201.
/s/ Daniel J. Fischer
_______________________________
Daniel J. Fischer
/s/ Dennis L. Trammell
_______________________________
Dennis L. Trammell
/s/ Charles W. McMahon
_______________________________
Charles W. McMahon
/s/ Thomas J. Hummel
_______________________________
Thomas J. Hummel
/s/ Kenneth J. Longerm
_______________________________
Kenneth J. Longerman
/s/ James P. Shanahan
_______________________________
James P. Shanahan
/s/ Judith A. Kleeman
_______________________________
Judith A. Kleemann
Cincinnati, Ohio, October 2, 1981.
<PAGE>
UCL LIFE ASSURANCE CORPORATION
Gentlemen: I hereby accept appointment as agent for your
corporation upon whom process, tax notices or demands may be served.
/s/ David F. Westerbeck
-------------------------------
David F. Westerbeck
<PAGE>
November 13, 1981
Honorable Anthony J. Celebrezze, Jr.
Secretary of State
14th Floor
30 East Broad Street
Columbus, Ohio 43215
Attention: Corporation Division
Re: UCL Life Assurance Corporation
Dear Sirs:
The Ohio Department of Insurance has reviewed the attached
Articles of Incorporation of UCL Life Assurance Corporation. Our Legal
and Examination divisions have reviewed these Articles and find them
acceptable.
Very truly yours,
/s/ Robert H. Katz
ROBERT H. KATZ
Deputy Director
RHK:eag
cc: Steven L. Petty
Assistant Attorney General
<PAGE>
November 13, 1981
Honorable Anthony J. Celebrezze, Jr.
Secretary of State
14th Floor
30 East Broad Street
Columbus, Ohio 43215
Attention: Corporation Division
Re: UCL Life Assurance Corporation
Dear Sirs:
Enclosed please find the original Articles of Incorporation of
UCL Life Assurance Corporation.
Based upon the language of the Articles, the approval of the Ohio
Department of Insurance, and my review of the relevant statutes I find
these Articles to be in accordance with those sections of law and not
inconsistent with the Constitution and laws of the United States and this
State.
Very truly yours,
WILLIAM J. BROWN
Attorney General
/s/ Steven L. Petty
STEVEN L. PETTY
Assistant Attorney
General
SLP:mfg
cc: Robert H. Katz
Deputy Director
Charles Hertlein
Dinsmore, Shohl, Coates & Deupree
<PAGE>
DATE: October 20, 1981
TO: Office of Secretary of State
30 East Broad Street, 14th Floor
Attn: Corporations Department
FROM: Robert H. Katz
Deputy Director
SUBJ: UCL Life Assurance Corporation
Enclosed are the original Articles of Incorporation, Code of Regulations,
and Emergency Bylaws of UCL Life Assurance Corporation. Also please find
a check for $650.00
Please hold these for filing until you receive approval letters, as
necessary, from either this office or the Office of the Attorney General.
Please call me if you have any questions.
RHK:bjl
xc :Steve Petty
Attorney General's Office
<PAGE>
APPROVED
BY ----------------------
DATE 10/18/83
---------------------
AMOUNT $235.00
------------------
CERTIFICATE
We, the undersigned, Charles C. Hinckley and David F. Westerbeck,
respectively the President and Secretary of UCL Life Assurance
Corporation, a stock life insurance company, do hereby certify that at a
special meeting of the stockholders of said Corporaration duly called and
held in the City of Cincinnati, on the 25th day of July, 1983, at which
meeting 14,997 out of a total 15,000 shares of the capital stock of said
Corporation issued and outstanding, were represented in person,
resolutions as hereinafter set forth were adopted by a unanimous vote of
said issued and outstanding stock represented;
RESOLVED, that the fourth article of the Articles of
Incorporation of UCL Life Assurance Corporation is hereby amended to read
as follows:
"Fourth: The number of shares which the
Corporation is authorized to have
outstanding is Twenty-Five Thousand
(25,000), all of which shall be Common
Shares, par value One Hundred Dollars
($100).
RESOLVED, FURTHER, that the President and Secretary of this
Corporation be and they are authorized and directed to make, execute, and
acknowledge a certificate, under the corporate seal of this company,
embracing the foregoing resolutions, and cause such certificate to be
filed, recorded or published as may be required by law.
IN WITNESS WHEREOF, we have set our hands on this 25th day of
July, 1983.
/s/ Charles C. Hinkley
-----------------------------------------
President
Attest /s/ David F. Westerbeck
---------------------------------------
Secretary
<PAGE>
September 15, 1983
Secretary of State's Office
State Office Tower
30 East Broad Street, 14th Floor
Columbus, Ohio 43215
Attn: Corporations Division, W. Curtis Stitt
Re: UCL Life Assurance Corporation
Dear Sir:
Please find enclosed the copy of the certificate of amendment to the
articles of UCL Life Assurance Company which you recently forwarded to
this office. Pending further approval from the Attorney General's Office,
the Department approves the amendment in the articles.
If you have any questions regarding this matter, please contact me.
Very truly yours,
/s/ Andromeda Monroe
ANDROMEDA MONROE
Deputy Director
AM/KW/slp
Enclosure
cc: Pat Devine, Esq. (Attorney General's Office)
<PAGE>
October 18, 1983
Honorable Sherrod Brown
Secretary of State
State Office Tower
14th Floor
Columbus, Ohio 43215
ATTN: W. Curtis Stitt
Assistant Corporate Counsel
Re: UCL Life Assurance Corporation
Charter No. 584965
Dear Sir:
I have reviewed the certificate of amendment to the articles of
incorporation of UCL Life Assurance Corporation. I have also discussed
the same with the Ohio Department of Insurance which has approved the
amendment in question.
Based upon my examination of the certificate of amendment and my
review of the relevant statutes, I find the certificate of amendment to be
in accordance with the constitution and laws of the State of Ohio and of
the United States.
Very truly yours,
ANTHONY J. CELEBREZZE, JR.
Attorney General
/s/ Patrick A. Devine
PATRICK A. DEVINE
Assistant Attorney General
1680 State Office Tower
30 East Broad Street
Columbus, Ohio, 43215
(614) 466-8614
PAD:mfm
cc: Kurt Weiland
<PAGE>
INTER-OFFICE COMMUNICATION
To: W. Curtis Stitt, Secretary of State Date: October 11, 1983
----------------------------------- ----------------
From: Kurt Weiland, Attorney, Department of Insurance
-----------------------------------------------
Subject: UCL Life Amendment
------------------
-----------------------------------------------------------------------
I spoke with David Westerbrook (513-595-2325) regarding the UCL Life
Amendment to articles. Enclosed is a copy of the Department's approval
letter regarding that amendment. I've spoken to Assistant Attorney
General Devine, who has indicated that he thinks he can complete this
review by Monday, October 17.
Westerbrook also indicated that he has requested twenty-five (25)
certified copies of the approved articles from your office and was curious
whether there would be any delay in receiving them.
KW/slp
cc: - Pat Devine
David Westerbrook
<PAGE>
Charter # 584965
--------------------
Approved By: D. Burns
----------------
Date: 10-17-85
-----------------------
Fee: $35.00
-----------------------
CERTIFICATE OF AMENDMENT
By Shareholders
to the Articles of Incorporation of
UCL LIFE ASSURANCE CORPORATION
--------------------------------------------------------------------------
(Name of Corporation)
Charles C. Hinckley , who is / / Chairman of the Board /x/ President
---------------------- --- ---
/ / Vice President (Check One)
---
and David F. Westerbeck , who is /xx/ Secretary
---------------------------------- ----
/ / Assistant Secretary (Check One)
---
of the above named Ohio corporation for profit with its principal location
at Mill and Waycross Roads, Cincinnati, Ohio do hereby certify that (check
-----------------------------------
the appropriate box and complete the appropriate statements)
/x/ a meeting of the shareholders was duly called for the purpose of
---
adopting this amendment and held on September 23, 1985, at which
-------------------
meeting a quorum of the shareholders was present in person or by
proxy, and by the affirmative vote of the holders of shares
entitling them to exercise 99 % of the voting power of the
---------
corporation.
/ / in a writing signed by all of the shareholders who would be
---
entitled to notice of a meeting held for that purpose,
the following resolution to amend the articles was adopted:
<PAGE>
RESOLVED, by the Shareholders of UCL Life Assurance Corporation
that the first article of the Articles of Incorporation of UCL Life
Assurance Corporation is hereby amended to read as follows:
"FIRST: The name of the Corporation shall be Carillon Life
Insurance Company"
RESOLVED FURTHER, that the President and Secretary of this
Corporation be and they are authorized and directed to make, execute and
acknowledge all documents on behalf of the Corporation necessary to
effectuate the foregoing resolution as may be required by law.
IN WITNESS WHEREOF, the above named officers, acting for and on
the behalf of the corporation, have hereto subscribed their names this
_______ day of October, 1985.
BY /s/ Charles C. Hinckley
----------------------------------------
(Chairman, President or Vice President)
BY /s/ David F. Westerbeck
-----------------------------------------
(Secretary or Assistant Secretary)
NOTE: Ohio law does not permit one officer to sign in two capacities.
Two separate signatures required, even if this necessitates the election
of a second officer before the filing can be made.
<PAGE>
October 8, 1985
Honorable Sherrod Brown
Secretary of State
State Office Tower
14th Floor
Columbus, Ohio 43215
Attn: Bradley Hoffman
Assistant Corporate Counsel
Re: UCL Life Assurance Corporation
Dear Sir:
I have reviewed the amendment to the articles of incorporation of
the UCL Life Assurance Corporation adopted September 23, 1985. I have
also discussed the same with the Ohio Department of Insurance which has
expressed its approval of the amendments in question.
Based upon my examination of the amendments of the articles of
incorporation and my review of the relevant statutes, I find the amendment
to be in accordance with the constitution and laws of the State of Ohio
and of the United States.
Very truly yours,
/s/ Kenneth L. McLaughlin
Kenneth L. McLaughlin
Assistant Attorney General
State Departments
16th Floor
Columbus, Ohio 43215
(614) 466-8614
KLM:jdc
Enclosures
cc: Kurt Weiland
David F. Westerbeck
<PAGE>
Charter No. 584965
--------------
Approved: RB
----------------
Date: 4/12/95
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Fee: $35.00
---------------------
95041233101
CERTIFICATE OF AMENDMENT
BY SHAREHOLDERS TO THE ARTICLES OF INCORPORATION OF
Carillon Life Insurance Company
--------------------------------------------------------------------------
(Name of Corporation)
Betty M. Kasprowicz , who is:
-------------------------------------------------------
/ / Chairman of the Board / / President
--- ---
/xx/ Vice President (Please check one.)
----
and James M. Mortensen , who is:
-------------------------------------------------
/ / Secretary /xx/ Assistant Secretary (Please check one.)
--- ----
of the above named Ohio corporation organized for profit does hereby
certify that: (Please check the appropriate box and complete the
appropriate statements.)
/ / a meeting of the shareholders was duly called for the purpose of
---
adopting this amendment and held on --------------------------,
19--- at which meeting a quorum of the shareholders was present
in person or by proxy, and by the affirmative vote of the holders
of shares entitling them to exercise -----------------% of the
voting power of the corporation.
/xx/ in a writing signed by all of the shareholders who would be
----
entitled to notice of a meeting held for that purpose, the
following resolution to amend the articles was adopted:
<PAGE>
RESOLVED, by the Sole Shareholder of Carillon Life
Insurance Company that the first article of the Articles of
Incorporation of Carillon Life Insurance Company is hereby
amended to read as follows:
"FIRST: The name of the Corporation shall be Annuity
Investors Life Insurance Company."
RESOLVED FURTHER, that the Vice President and Assistant
Secretary of this Corporation be and they are authorized and
directed to make, execute and acknowledge all documents on behalf
of the Corporation necessary to effectuate the foregoing
resolution as may be required by law.
IN WITNESS WHEREOF, the above named officers, acting for and on the behalf
of the corporation, have hereto subscribed their names this 30th day
---------
of March , 1995.
------------- ----
By /s/ Betty Kasprowicz By /s/ James M. Mortense
-------------------------- -----------------------------
Betty Kasprowicz James M. Mortensen
(Chairman, President, Vice President) (Secretary, Assistant Secretary)
NOTE: OHIO LAW DOES NOT PERMIT ONE OFFICER TO SIGN IN TWO CAPACITIES.
TWO SEPARATE SIGNATURES ARE REQUIRED, EVEN IF THIS NECESSITATES THE
ELECTION OF A SECOND OFFICER BEFORE THE FILING CAN BE MADE.
- 2 -
<PAGE>
April 7, 1995
Honorable Robert Taft
Secretary of State
30 East Broad Street
14th Floor
Columbus, Ohio 43215
ATTN: KATHIE MCCLURG
OFFICE MANAGER
Re: Carillon Life Insurance Company
Dear Sir:
I have reviewed the Certificate of Amendment to the Articles of
Incorporation for the Carillon Life Insurance Company which was adopted on
March 30, 1995. I have also discussed the same with the Ohio Department
of Insurance which has expressed its approval of the articles in question.
Based upon my examination of these articles and my review of the
relevant statutes, I find the articles to be in accordance with the
constitution and laws of the State of Ohio and of the United States.
Very truly yours,
ATTORNEY GENERAL
BETTY D. MONTGOMERY
/s/ Julia M Graver
JULIA M. GRAVER
Assistant Attorney General
Health and Human Services Section
30 East Broad Street, 26th Floor
Columbus, Ohio 43215-3428
(614) 466-8600
JMG/mdg
Enclosures
cc: Stephen J. Vamos
<PAGE>
April 6, 1995
Julia M. Graver
Office of The Attorney General
Health & Human Services Section
30 E Broad St 26th Fl
Columbus OH 43215
Dear Ms. Graver:
Enclosed please find an originally executed Certificate of Amendment by
the Shareholders to the Articles of Incorporation of Carillon Life
Insurance Company.
Based upon my review, the Department extends its preclearance to the
amended Articles which amend Article First changing the name of the
corporation from Carillon Life Insurance Company to Annuity Investors Life
Insurance Company.
Please call should you have any questions.
Sincerely,
/s/ Stephen J. Vamos
Stephen J. Vamos
Staff Counsel
Office of Legal Services
SJV/baw
Enclosure
<PAGE>
Exhibit 6(b)
CODE OF REGULATIONS
OF
ANNUITY INVESTORS LIFE INSURANCE COMPANY
ARTICLE I
---------
SHAREHOLDERS
------------
1. The annual meeting of the shareholders shall be held at the
time provided in the corporation's Articles of Incorporation.
2. All meetings of shareholders shall be held at the principal
office of the corporation, or (except in the case of the annual meeting
which shall be held at the place fixed in the corporation's Articles of
Incorporation) at such other place within or without the State of Ohio as
may be designated in the notice of such meeting.
3. A meeting of the shareholders which is called by shareholders
may be called only by persons who hold at least twenty-five percent of all
shares issued and outstanding and entitled to vote at such meeting.
4. A majority of the shares issued and outstanding and entitled
to vote, represented by the holders of record thereof, in person or by
proxy shall constitute a quorum at all meetings of shareholders.
ARTICLE II
-----------
BOARD OF DIRECTORS
------------------
1. The Board of Directors shall hold regular meetings on the
third Friday of each February, May, August, and November, and such other
regular meetings as it shall determine from time to time. The President
may convene special meetings of the Board at any time and shall be
required so to do at the request of the Executive Committee or of any four
members of the Board. An organizational meeting of the Board of Directors
may be held without notice immediately after each annual meeting of share-
holders for the purpose of electing officers and attending to such other
business as may properly come before the meeting.
2. The Board of Directors shall adopt such plans of insurance
and annuities, rates of premiums, and regulations on the subject of
insurance and annuities as it may deem proper.
3. The Board of Directors from the funds of the Corporation
shall:
FIRST -
Pay the necessary expenses of conducting the business of the
Corporation, and all approved policy claims. The compensation of
<PAGE>
each officer shall be fixed by the Board. The compensation of
each non-officer employee shall be fixed by the President
SECOND -
Establish and maintain the reserve funds required by law.
THIRD -
Establish and maintain surplus funds in such amounts as, in the
judgment of the Board, may be necessary for the security of the
Corporation.
FOURTH -
Declare annually a dividend to participating policyholders, if
any, according to the kind and class of each policy, that shall
be applied according to the terms and conditions of each policy.
4. After provision has been made in accordance with Section 4 of
this Article for expenses, policy claims, reserve funds, surplus funds and
dividends to participating policyholders, if any, the Board may from time
to time declare and cause to be paid dividends to shareholders according
to the terms of each class of shares then outstanding and as provided by
law.
5. The Board of Directors may create an Executive Committee or
any other committee of the directors, each such committee to consist of
not less than three directors, and may delegate to any such committee any
of the authority of the directors, however conferred, other than that of
filling vacancies among the directors or in any committee of the
directors. Any director may, however, be designated by the Chief
Executive Officer or by the members present at any meeting of a committee
to serve on the committee at that meeting in place of an absent committee
member.
ARTICLE III
-----------
DUTIES OF THE OFFICERS
----------------------
1. PRESIDENT: The Board of Directors shall elect a President
who shall be the chief executive officer of the Corporation. The
President shall have general supervision and control of the business of
the Corporation, shall preside at meetings of the Board of Directors and
of the shareholders, and shall perform such other duties as may be
assigned to him by the Board of Directors. All other officers and
employees shall act under the direction of the President and shall perform
such duties as he may assign to them.
2. VICE PRESIDENTS: The Vice Presidents, under the direction of
the President, shall assist in the management of the Corporation and shall
perform such other duties as may be assigned to them. The President shall
- 2 -
<PAGE>
designate a Vice President to act for him in his absence; otherwise, the
Vice Presidents in the order in which they were listed for election at the
most recent election of officers of the Corporation shall act in his place
and perform the duties of his office.
3. SECRETARY: The Secretary shall keep the minutes of meetings
of shareholders, of the Board of Directors and of committees of the Board
of Directors and shall record them in books kept for that purpose, shall
keep all corporate records and archives and shall perform such other
duties as may be assigned to him. In addition, in the absence of the
President and all Vice Presidents, the Secretary shall act in the place of
the President and shall perform all the duties of his office.
ARTICLE IV
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EXECUTION OF INSTRUMENTS
------------------------
The President, a Vice President, the Secretary, an Assistant
Secretary, the Treasurer or an Assistant Treasurer, and each of them,
shall have authority to execute in the name of and on behalf of the
Corporation all deeds, mortgages, powers of attorney, waivers of service,
leases, contract, bonds, full or partial assignments and releases of
mortgages, deeds of trust, vendors' liens, judgments, tax certificates,
certificates of purchase or other securities, and any and all other
instruments that are necessary or proper to be executed in the transaction
of the Corporation's business, and to affix the corporate seal thereto
when necessary. The Board of Directors may from time to time authorize
other officers and non-officer employees to execute instruments and to
affix the corporate seal thereto.
ARTICLE V
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INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
The Corporation shall, to the full extent permitted by the
General Corporation Law of Ohio, indemnify any person who is or was a
director or officer of the Corporation and whom it may indemnify pursuant
thereto. The Corporation may, within the sole discretion of the Board of
Directors, indemnify in whole or in part any other persons whom it may
indemnify pursuant thereto.
ARTICLE VI
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CERTIFICATES FOR SHARES
-----------------------
If any certificate for shares is lost, stolen or destroyed, a new
certificate may be issued upon such terms or under such rules as the Board
of Directors may from time to time determine.
- 3 -
<PAGE>
ARTICLE VII
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SEAL
----
The seal of the Corporation shall be in such form as the Board of
Directors may from time to time determine.
ARTICLE VIII
------------
FISCAL YEAR
-----------
The fiscal year of the Corporation shall end on December 31 of
each year, or on such date as the Board of Directors may from time to time
determine.
- 4 -
<PAGE>
Exhibit (8)(a)
FUND PARTICIPATION AGREEMENT
This Agreement is entered into as of the 21st day of November, 1995,
between Annuity Investors Life Insurance Company ("Insurance Company"), a
life insurance company organized under the laws of the State of Ohio, and
DREYFUS VARIABLE INVESTMENT FUND ("Fund"), an unincorporated business
trust organized under the laws of the Commonwealth of Massachusetts.
ARTICLE I
DEFINITIONS
1.1 "Act" shall mean the Investment Company Act of 1940, as amended.
1.2 "Board" shall mean the Board of Trustees of the Fund having the
responsibility for management and control of the Fund.
1.3 "Business Day" shall mean any day for which the Fund calculates net
asset value per share as described in the Fund's Prospectus.
1.4 "Commission" shall mean the Securities and Exchange Commission.
1.5 "Contract" shall mean a variable annuity contract that uses the
Fund as an underlying investment medium. Individuals who
participate under a group Contract are "Participants".
1.6 "Contractholder" shall mean any entity that is a party to a
Contract with a Participating Company.
1.7 "Disinterested Board Members" shall mean those members of the Board
that are not deemed to be "interested persons" of the Fund, as
defined by the Act.
1.8 "Dreyfus" shall mean The Dreyfus Corporation and its affiliates,
including Dreyfus Service Corporation.
1.9 "Participating Companies" shall mean any insurance company
(including Insurance Company), which offers variable annuity and/or
variable life insurance contracts to the public and which has
entered into an agreement with the Fund for the purpose of making
Fund shares available to serve as an underlying investment medium
for the aforesaid Contracts.
1.10 "Prospectus" shall mean the Fund's current prospectus and statement
of additional information, as most recently filed with the
Commission.
1.11 "Separate Account" shall mean Annuity Investors Variable Account A,
a separate account established by Insurance Company in accordance
with the laws of the State of Ohio.
<PAGE>
1.12 "Software Program" shall mean the software program used by the Fund
for providing Fund and account balance information including net
asset value per share. Such Program may include the Lion System.
In situations where the Lion System or any other Software Program
used by the Fund is not available, such information may be provided
by telephone and confirmed by facsimiles. The Lion System shall be
provided to Insurance Company at no charge.
ARTICLE II
REPRESENTATIONS
2.1 Insurance Company represents and warrants that (a) it is an
insurance company duly organized and in good standing under
applicable law; (b) it has legally and validly established the
Separate Account pursuant to the laws of the State of Ohio for the
purpose of offering to the public certain individual and group
variable annuity contracts; (c) it has registered or will register
the Separate Account as a unit investment trust under the Act to
serve as the segregated investment account for the Contracts; and
(d) each Separate Account is eligible to invest in shares of the
Fund without such investment disqualifying the Fund as an
investment medium for insurance company separate accounts
supporting variable annuity contracts or variable life insurance
contracts.
2.2 Insurance Company represents and warrants that (a) the Contracts
will be described in a registration statement filed under the
Securities Act of 1933, as amended ("1933 Act"); (b) the Contracts
will be issued and sold in compliance in all material respects with
all applicable federal and state laws; and (c) the sale of the
Contracts shall comply in all material respects with state
insurance law requirements. Insurance Company agrees to inform the
Fund promptly of any investment restrictions imposed by state
insurance law and applicable to the Fund.
2.3 Insurance Company represents and warrants that the income, gains
and losses, whether or not realized, from assets allocated to the
Separate Account are, in accordance with the applicable Contracts,
to be credited to or charged against such Separate Account without
regard to other income, gains or losses from assets allocated to
any other accounts of Insurance Company. Insurance Company
represents and warrants that the assets of the Separate Account are
and will be kept separate from Insurance Company's General Account
and any other separate accounts Insurance Company may have, and
will not be charged with liabilities from any business that
Insurance Company may conduct or the liabilities of any companies
affiliated with Insurance Company.
2.4 Fund represents that the Fund is registered with the Commission
under the Act as an open-end, diversified management investment
company and possesses, and shall maintain, all legal and regulatory
- 2 -
<PAGE>
licenses, approvals, consents and/or exemptions required for Fund
to operate and offer its shares as an underlying investment medium
for Participating Companies. The Fund has established eight series
of shares (each, a "Series") and may in the future establish other
series of shares.
2.5 Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"), and that it will make every
effort to maintain such qualification (under Subchapter M or any
successor or similar provision) and that it will notify Insurance
Company immediately upon having a reasonable basis for believing
that it has ceased to so qualify or that it might not so qualify in
the future.
2.6 Insurance Company represents and agrees that the Contracts are
currently, and at the time of issuance will be, treated as life
insurance policies or annuity contracts, whichever is appropriate,
under applicable provisions of the Code, and that it will make
every effort to maintain such treatment and that it will notify the
Fund and Dreyfus immediately upon having a reasonable basis for
believing that the Contracts have ceased to be so treated or that
they might not be so treated in the future. Insurance Company
agrees that any prospectus offering a Contract that is a "modified
endowment contract," as that term is defined in Section 7702A of
the Code, will identify such Contract as a modified endowment
contract (or policy).
2.7 Fund agrees that the Fund's assets shall be managed and invested in
a manner that complies with the requirements of Section 817(h) of
the Code.
2.8 Insurance Company agrees that the Fund shall be permitted (subject
to the other terms of this Agreement) to make Series' shares
available to other Participating Companies and contractholders.
2.9 Fund represents and warrants that any of its trustees, officers,
employees, investment advisers, and other individuals/entities who
deal with the money and/or securities of the Fund are and shall
continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less
than that required by Rule 17g-1 under the Act. The aforesaid Bond
shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
2.10 Insurance Company represents and warrants that all of its employees
and agents who deal with the money and/or securities of the Fund
are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage in an amount not less than the
coverage required to be maintained by the Fund. The aforesaid Bond
shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
- 3 -
<PAGE>
2.11 Insurance Company agrees that Dreyfus shall be deemed a third party
beneficiary under this Agreement and may enforce any and all rights
conferred by virtue of this Agreement.
ARTICLE III
FUND SHARES
3.1 The Contracts funded through the Separate Account will provide for
the investment of certain amounts in the Series' shares.
3.2 Fund agrees to make the shares of its Series available for purchase
at the then applicable net asset value per share by the Separate
Account on each Business Day pursuant to rules of the Commission.
Notwithstanding the foregoing, the Fund may refuse to sell the
shares of any Series to any person, or suspend or terminate the
offering of the shares of any Series if such action is required by
law or by regulatory authorities having jurisdiction or is, in the
sole discretion of the Board, acting in good faith and in light of
its fiduciary duties under federal and any applicable state laws,
necessary and in the best interests of the shareholders of such
Series.
3.3 Fund agrees that shares of the Fund will be sold only to
Participating Companies and their separate accounts and to the
general accounts of those Participating Companies and their
affiliates. No shares of any Series will be sold to the general
public.
3.4 Fund shall use its best efforts to provide closing net asset value,
dividend and capital gain (loss) information for each Series
available on a per-share and Series basis to Insurance Company by
6:00 p.m. Eastern Time on each Business Day. Any material errors
in the calculation of net asset value, dividend and capital gain
(loss) information shall be reported immediately upon discovery to
Insurance Company. Non-material errors will be corrected in the
next Business Day's net asset value per share for the Series in
question.
3.5 At the end of each Business Day, Insurance Company will use the
information described in Sections 3.2 and 3.4 to calculate the
Separate Account unit values for the day. Using this unit value,
Insurance Company will process the day's Separate Account
transactions received by it by the close of trading on the floor of
the New York Stock Exchange (currently 4:00 p.m. Eastern time) to
determine the net dollar amount of Series shares which will be
purchased or redeemed at that day's closing net asset value per
share for such Series. The net purchase or redemption orders will
be transmitted to the Fund by Insurance Company by 11:00 a.m.
Eastern Time on the Business Day next following Insurance Company's
receipt of that information.
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<PAGE>
3.6 Fund appoints Insurance Company as its agent for the limited
purpose of accepting orders for the purchase and redemption of
shares of each Series for the Separate Account. Fund will execute
orders for any Series at the applicable net asset value per share
determined as of the close of trading on the day of receipt of such
orders by Insurance Company acting as agent ("effective trade
date"), provided that the Fund receives notice of such orders by
11:00 a.m. Eastern Time on the next following Business Day and, if
such orders request the purchase of Series shares, the conditions
specified in Section 3.8, as applicable, are satisfied. A
redemption or purchase request for any Series that does not satisfy
the conditions specified in this Section and in Section 3.8, as
applicable, will be effected at the net asset value computed for
such Series on the Business Day immediately preceding the Business
Day upon which such conditions have been satisfied in accordance
with the requirements of this Section and Section 3.8.
3.7 Insurance Company will use its best efforts to notify Fund in
advance of any unusually large purchase or redemption orders.
3.8 If Insurance Company's order requests the purchase of Series
shares, Insurance Company will pay for such purchases by wiring
Federal Funds to Fund or its designated custodial account on the
day the order is transmitted. Insurance Company shall make all
reasonable efforts to transmit to the Fund payment in Federal Funds
by 12:00 noon Eastern Time on the Business Day the Fund receives
the notice of the order pursuant to Section 3.5. Fund will execute
such orders at the applicable net asset value per share determined
as of the close of trading on the effective trade date if Fund
receives payment in Federal Funds by 12:00 midnight Eastern Time on
the Business Day the Fund receives the notice of the order pursuant
to Section 3.5. If payment in Federal Funds for any purchase is
not received or is received by the Fund after 12:00 noon Eastern
Time on such Business Day, Insurance Company shall promptly upon
the Fund's request, reimburse the Fund for any charges, costs,
fees, interest or other expenses incurred by the Fund in connection
with any advances to, or borrowings or overdrafts by, the Fund, or
any similar expenses incurred by the Fund, as a result of portfolio
transactions effected by the Fund based upon such purchase request.
Payment for Series shares redeemed by the Separate Account or the
Insurance Company shall be made in Federal Funds transmitted by
wire to the Insurance Company or any other designated person on the
next Business Day after the Fund is properly notified of the
redemption order of Series shares (unless redemption proceeds are
to be applied to the purchase of Fund shares of other Series),
except that the Fund reserves the right to delay payment of
redemption proceeds to the extent permitted under Section 22(e) of
the 1940 Act. The Fund shall not bear any responsibility
whatsoever for the proper disbursement or crediting of redemption
proceeds by the Insurance Company; the Insurance Company alone
shall be responsible for such action.
- 5 -
<PAGE>
3.9 Fund has the obligation to ensure that Series shares are registered
with applicable federal agencies at all times.
3.10 Fund will confirm each purchase or redemption order made by
Insurance Company. Transfer of Series shares will be by book entry
only. No share certificates will be issued to Insurance Company.
Insurance Company will record shares ordered from Fund in an
appropriate title for the corresponding account.
3.11 Fund shall credit Insurance Company with the appropriate number of
shares.
3.12 On each ex-dividend date of the Fund or, if not a Business Day, on
the first Business Day thereafter, Fund shall communicate to
Insurance Company the amount of dividend and capital gain, if any,
per share of each Series. All dividends and capital gains of any
Series shall be automatically reinvested in additional shares of
the relevant Series at the applicable net asset value per share of
such Series on the payable date. Fund shall, on the day after the
payable date or, if not a Business Day, on the first Business Day
thereafter, notify Insurance Company of the number of shares so
issued.
3.13 This Agreement does not cover the sale of any Fund shares to the
Insurance Company general account.
- 6 -
<PAGE>
ARTICLE IV
STATEMENTS AND REPORTS
4.1 Fund shall provide monthly statements of account as of the end of
each month for all of Insurance Company's accounts by the fifteenth
(15th) Business Day of the following month.
4.2 Fund shall distribute to Insurance Company copies of the Fund's
Prospectuses, proxy materials, notices, periodic reports and other
printed materials (which the Fund customarily provides to its
shareholders) in quantities as Insurance Company may reasonably
request for distribution to each Contractholder and Participant.
4.3 Fund will provide to Insurance Company at least one complete copy
of all registration statements, Prospectuses, reports, proxy
statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and
all amendments to any of the above, that relate to the Fund or its
shares, contemporaneously with the filing of such document with the
Commission or other regulatory authorities.
4.4 Insurance Company will provide to the Fund at least one copy of all
registration statements, Prospectuses, reports, proxy statements,
sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to
any of the above, that relate to the Contracts or the Separate
Account, contemporaneously with the filing of such document with
the Commission.
ARTICLE V
EXPENSES
5.1 The charge to the Fund for all expenses and costs of the Series,
including but not limited to management fees, administrative
expenses and legal and regulatory costs, will be made in the
determination of the relevant Series' daily net asset value per
share so as to accumulate to an annual charge at the rate set forth
in the Fund's Prospectus. Excluded from the expense limitation
described herein shall be brokerage commissions and transaction
fees and extraordinary expenses.
5.2 Except as provided in this Article V and, in particular in the next
sentence, Insurance Company shall not be required to pay directly
any expenses of the Fund or expenses relating to the distribution
of its shares. Insurance Company shall pay the following expenses
or costs:
a. Such amount of the production expenses of any Fund materials,
including the cost of printing the Fund's Prospectus, or
marketing materials for prospective Insurance Company
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Contractholders and Participants as Dreyfus and Insurance
Company shall agree from time to time.
b. Distribution expenses of any Fund materials or marketing
materials for prospective Insurance Company Contractholders
and Participants.
c. Distribution expenses of Fund materials or marketing
materials for Insurance Company Contractholders and
Participants.
Except as provided herein, all other Fund expenses shall not be
borne by Insurance Company.
ARTICLE VI
EXEMPTIVE RELIEF
6.1 Insurance Company has reviewed a copy of the order dated December
23, 1987 of the Securities and Exchange Commission under Section
6(c) of the Act and, in particular, has reviewed the conditions to
the relief set forth in the related Notice. As set forth therein,
Insurance Company agrees to report any potential or existing
conflicts promptly to the Board, and in particular whenever
contract voting instructions are disregarded, and recognizes that
it will be responsible for assisting the Board in carrying out its
responsibilities under such application. Insurance Company agrees
to carry out such responsibilities with a view to the interests of
existing Contractholders.
6.2 If a majority of the Board, or a majority of Disinterested Board
Members, determines that a material irreconcilable conflict exists
with regard to Contractholder investments in the Fund, the Board
shall give prompt notice to all Participating Companies. If the
Board determines that Insurance Company is responsible for causing
or creating said conflict, Insurance Company shall at its sole cost
and expense, and to the extent reasonably practicable (as
determined by a majority of the Disinterested Board Members), take
such action as is necessary to remedy or eliminate the
irreconcilable material conflict. Such necessary action may
include, but shall not be limited to:
a. Withdrawing the assets allocable to the Separate Account from
the Series and reinvesting such assets in a different
investment medium, or submitting the question of whether such
segregation should be implemented to a vote or all affected
Contractholders; and/or
b. Establishing a new registered management investment company.
6.3 If a material irreconcilable conflict arises as a result of a
decision by Insurance Company to disregard Contractholder voting
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instructions and said decision represents a minority position or
would preclude a majority vote by all Contractholders having an
interest in the Fund, Insurance Company may be required, at the
Board's election, to withdraw the Separate Account's investment in
the Fund.
6.4 For the purpose of this Article, a majority of the Disinterested
Board Members shall determine whether or not any proposed action
adequately remedies any irreconcilable material conflict, but in no
event will the Fund be required to bear the expense of establishing
a new funding medium for any Contract. Insurance Company shall not
be required by this Article to establish a new funding medium for
any Contract if an offer to do so has been declined by vote of a
majority of the Contractholders materially adversely affected by
the irreconcilable material conflict.
6.5 No action by Insurance Company taken or omitted, and no action by
the Separate Account or the Fund taken or omitted as a result of
any act or failure to act by Insurance Company pursuant to this
Article VI shall relieve Insurance Company of its obligations
under, or otherwise affect the operation of, Article V.
ARTICLE VII
VOTING OF FUND SHARES
7.1 Fund shall provide Insurance Company with copies at no cost to
Insurance Company, of the Fund's proxy material, annual and semi-
annual reports to shareholders and other communications to
shareholders in such quantity as Insurance Company shall reasonably
require for distributing to Contractholders or Participants.
Insurance Company shall:
a. solicit voting instructions from Contractholders or
Participants on a timely basis and in accordance with
applicable law;
b. vote the Series shares in accordance with instructions
received from Contractholders or Participants; and
c. vote Series shares for which no instructions have been
received in the same proportion as Series shares for which
instructions have been received.
Insurance Company agrees to be responsible for assuring that voting
Fund shares for the Separate Account is conducted in a manner
consistent with other Participating Companies.
7.2 Insurance Company agrees that it shall not, without the prior
written consent of the Fund and Dreyfus, solicit, induce or
encourage Contractholders to (a) change or supplement the Fund's
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current investment adviser or (b) change, modify, substitute, add
to or delete the Fund from the current investment media for the
Contracts.
ARTICLE VIII
MARKETING AND REPRESENTATIONS
8.1 The Fund or its underwriter shall periodically furnish Insurance
Company with the following documents, in quantities as Insurance
Company may reasonably request:
a. Current Prospectus and any supplements thereto;
b. other marketing materials.
Expenses for the production of such documents shall be borne by
Insurance Company in accordance with Section 5.2 of this Agreement.
8.2 Insurance Company shall designate certain persons or entities which
shall have the requisite licenses to solicit applications for the
sale of Contracts. No representation is made as to the number or
amount of Contracts that are to be sold by Insurance Company.
Insurance Company shall make reasonable efforts to market the
Contracts and shall comply with all applicable federal and state
laws in connection therewith.
8.3 Insurance Company shall furnish, or shall cause to be furnished, to
the Fund, each piece of sales literature or other promotional
material in which the Fund, its investment adviser or the
administrator is named, at least fifteen Business Days prior to its
use. No such material shall be used unless the Fund approves such
material. Such approval (if given) must be in writing and shall be
presumed not given if not received within ten Business Days after
receipt of such material. The Fund shall use all reasonable
efforts to respond within ten days of receipt.
8.4 Insurance Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning
the Fund or any Series in connection with the sale of the Contracts
other than the information or representations contained in the
registration statement or Prospectus, as may be amended or
supplemented from time to time, or in reports or proxy statements
for the Fund, or in sales literature or other promotional material
approved by the Fund.
8.5 Fund shall furnish, or shall cause to be furnished, to Insurance
Company, each piece of the Fund's sales literature or other
promotional material in which Insurance Company or the Separate
Account is named, at least fifteen Business Days prior to its use.
No such material shall be used unless Insurance Company approves
such material. Such approval (if given) must be in writing and
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<PAGE>
shall be presumed not given if not received within ten Business
Days after receipt of such material. Insurance Company shall use
all reasonable efforts to respond within ten days of receipt.
8.6 Fund shall not, in connection with the sale of Series shares, give
any information or make any representations on behalf of Insurance
Company or concerning Insurance Company, the Separate Account, or
the Contracts other than the information or representations
contained in a registration statement or prospectus for the
Contracts, as may be amended or supplemented from time to time, or
in published reports for the Separate Account which are in the
public domain or approved by Insurance Company for distribution to
Contractholders or Participants, or in sales literature or other
promotional material approved by Insurance Company.
8.7 For purposes of this Agreement, the phrase "sales literature or
other promotional material" or words of similar import include,
without limitation, advertisements (such as material published, or
designed for use, in a newspaper, magazine or other periodical,
radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures or other public media), sales
literature (such as any written communication distributed or made
generally available to customers or the public, including
brochures, circulars, research reports, market letters, form
letters, seminar texts, or reprints or excerpts of any other
advertisement, sales literature, or published article), educational
or training materials or other communications distributed or made
generally available to some or all agents or employees,
registration statements, prospectuses, statements of additional
information, shareholder reports and proxy materials, and any other
material constituting sales literature or advertising under
National Association of Securities Dealers, Inc. rules, the Act or
the 1933 Act.
ARTICLE IX
INDEMNIFICATION
9.1 Insurance Company agrees to indemnify and hold harmless the Fund,
Dreyfus, any sub-investment adviser of a Series, and their
affiliates, and each of their directors, trustees, officers,
employees, agents and each person, if any, who controls or is
associated with any of the foregoing entities or persons within the
meaning of the 1933 Act (collectively, the "Indemnified Parties"
for purposes of Section 9.1), against any and all losses, claims,
damages or liabilities joint or several (including any
investigative, legal and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of, any action,
suit or proceeding or any claim asserted) for which the Indemnified
Parties may become subject, under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions
in respect to thereof) (i) arise out of or are based upon any
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<PAGE>
untrue statement or alleged untrue statement of any material fact
contained in information furnished by Insurance Company for use in
the registration statement or Prospectus or sales literature or
advertisements of the Fund or with respect to the Separate Account
or Contracts, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; (ii) arise out of or as a result of conduct, statements
or representations (other than statements or representations
contained in the Prospectus and sales literature or advertisements
of the Fund) of Insurance Company or its agents, with respect to
the sale and distribution of Contracts for which Series' shares are
an underlying investment; (iii) arise out of the wrongful conduct
of Insurance Company or persons under its control with respect to
the sale or distribution of the Contracts or Series' shares; (iv)
arise out of Insurance Company's incorrect calculation and/or
untimely reporting of net purchase or redemption orders; or (v)
arise out of any breach by Insurance Company of a material term of
this Agreement or as a result of any failure by Insurance Company
to provide the services and furnish the materials or to make any
payments provided for in this Agreement. Insurance Company will
reimburse any Indemnified Party in connection with investigating or
defending any such loss, claim, damage, liability or action;
provided, however, that with respect to clauses (i) and (ii) above
Insurance Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is
based upon any untrue statement or omission or alleged omission
made in such registration statement, prospectus, sales literature,
or advertisement in conformity with written information furnished
to Insurance Company by the Fund specifically for use therein.
This indemnity agreement will be in addition to any liability which
Insurance Company may otherwise have.
9.2 The Fund agrees to indemnify and hold harmless Insurance Company
and each of its directors, officers, employees, agents and each
person, if any, who controls Insurance Company within the meaning
of the 1933 Act against any losses, claims, damages or liabilities
to which Insurance Company or any such director, officer, employee,
agent or controlling person may become subject, under the 1933 Act
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) (1) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement or Prospectus
or sales literature or advertisements of the Fund; (2) arise out of
or are based upon the omission to state in the registration
statement or Prospectus or sales literature or advertisements of
the Fund any material fact required to be stated therein or
necessary to make the statements therein not misleading; or (3)
arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration
statement or Prospectus or sales literature or advertisements with
respect to the Separate Account or the Contracts and such
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<PAGE>
statements were based on information provided to Insurance Company
by the Fund; and the Fund will reimburse any legal or other
expenses reasonably incurred by Insurance Company or any such
director, officer, employee, agent or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Fund will
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or omission or alleged omission made in such Registration
Statement, Prospectus, sales literature or advertisements in
conformity with written information furnished to the Fund by
Insurance Company specifically for use therein. This indemnity
agreement will be in addition to any liability which the Fund may
otherwise have.
9.3 The Fund shall indemnify and hold Insurance Company harmless
against any and all liability, loss, damages, costs or expenses
which Insurance Company may incur, suffer or be required to pay due
to the Fund's (1) incorrect calculation of the daily net asset
value, dividend rate or capital gain (loss) distribution rate of a
Series; (2) incorrect reporting of the daily net asset value,
dividend rate or capital gain (loss) distribution rate; and (3)
untimely reporting of the net asset value, dividend rate or capital
gain (loss) distribution rate; provided that the Fund shall have no
obligation to indemnify and hold harmless Insurance Company if the
incorrect calculation or incorrect or untimely reporting was the
result of incorrect information furnished by Insurance Company or
information furnished untimely by Insurance Company or otherwise as
a result of or relating to a breach of this Agreement by Insurance
Company.
9.4 Promptly after receipt by an indemnified party under this Article
of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the
indemnifying party under this Article, notify the indemnifying
party of the commencement thereof. The omission to so notify the
indemnifying party will not relieve the indemnifying party from any
liability under this Article IX, except to the extent that the
omission results in a failure of actual notice to the indemnifying
party and such indemnifying party is damaged solely as a result of
the failure to give such notice. In case any such action is
brought against any indemnified party, and it notified the
indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent
that it may wish, assume the defense thereof, with counsel
satisfactory to such indemnified party, and to the extent that the
indemnifying party has given notice to such effect to the
indemnified party and is performing its obligations under this
Article, the indemnifying party shall not be liable for any legal
or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof, other than reasonable costs
of investigation. Notwithstanding the foregoing, in any such
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<PAGE>
proceeding, any indemnified party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties
to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests
between them. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent.
A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this
Article IX.
9.5 Insurance Company shall indemnify and hold the Fund, Dreyfus and
any sub-investment adviser of a Series harmless against any tax
liability incurred by the Fund under Section 851 of the Code
arising from purchases or redemptions by Insurance Company's
General Accounts or the account of its affiliates.
ARTICLE X
COMMENCEMENT AND TERMINATION
10.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the
provisions herein.
10.2 This Agreement shall terminate without penalty as to one or more
Series at the option of the terminating party:
a. At the option of Insurance Company or the Fund at any time
from the date hereof upon 180 days' notice, unless a shorter
time is agreed to by the parties;
b. At the option of Insurance Company, if shares of any Series
are not reasonably available to meet the requirements of the
Contracts as determined by Insurance Company. Prompt notice
of election to terminate shall be furnished by Insurance
Company, said termination to be effective ten days after
receipt of notice unless the Fund makes available a
sufficient number of shares to meet the requirements of the
Contracts within said ten-day period;
c. At the option of Insurance Company, upon the institution of
formal proceedings against the Fund by the Commission,
National Association of Securities Dealers or any other
regulatory body, the expected or anticipated ruling, judgment
or outcome of which would, in Insurance Company's reasonable
judgment, materially impair the Fund's ability to meet and
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<PAGE>
perform the Fund's obligations and duties hereunder. Prompt
notice of election to terminate shall be furnished by
Insurance Company with said termination to be effective upon
receipt of notice;
d. At the option of the Fund, upon the institution of formal
proceedings against Insurance Company by the Commission,
National Association of Securities Dealers or any other
regulatory body, the expected or anticipated ruling, judgment
or outcome of which would, in the Fund's reasonable judgment,
materially impair Insurance Company's ability to meet and
perform Insurance Company's obligations and duties hereunder.
Prompt notice of election to terminate shall be furnished by
the Fund with said termination to be effective upon receipt
of notice;
e. At the option of the Fund, if the Fund shall determine, in
its sole judgment reasonably exercised in good faith, that
Insurance Company has suffered a material adverse change in
its business or financial condition or is the subject of
material adverse publicity and such material adverse change
or material adverse publicity is likely to have a material
adverse impact upon the business and operation of the Fund or
Dreyfus, the Fund shall notify Insurance Company in writing
of such determination and its intent to terminate this
Agreement, and after considering the actions taken by
Insurance Company and any other changes in circumstances
since the giving of such notice, such determination of the
Fund shall continue to apply on the sixtieth (60th) day
following the giving of such notice, which sixtieth day shall
be the effective date of termination;
f. Upon termination of the Investment Advisory Agreement between
the Fund and Dreyfus or its successors unless Insurance
Company specifically approves the selection of a new Fund
investment adviser. The Fund shall promptly furnish notice
of such termination to Insurance Company;
g. In the event the Fund's shares are not registered, issued or
sold in accordance with applicable federal law, or such law
precludes the use of such shares as the underlying investment
medium of Contracts issued or to be issued by Insurance
Company. Termination shall be effective immediately upon
such occurrence without notice;
h. At the option of the Fund upon a determination by the Board
in good faith that it is no longer advisable and in the best
interests of shareholders for the Fund to continue to operate
pursuant to this Agreement. Termination pursuant to this
Subsection (h) shall be effective upon notice by the Fund to
Insurance Company of such termination;
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<PAGE>
i. At the option of the Fund if the Contracts cease to qualify
as annuity contracts or life insurance policies, as
applicable, under the Code, or if the Fund reasonably
believes that the Contracts may fail to so qualify;
j. At the option of either party to this Agreement, upon the
breach by a party of any material provision of this
Agreement, which breach has not been cured to the reasonable
satisfaction of the other party within 10 days after written
notice of such breach is delivered to such other party;
k. At the option of the Fund, if the Contracts are not
registered, issued or sold in accordance with applicable
federal and/or state law; or
l. Upon assignment of this Agreement, unless made with the
written consent of the non-assigning party.
Any such termination pursuant to Section 10.2a, 10.2d, 10.2e, 10.2f
or 10.2k herein shall not affect the operation of Article V of this
Agreement. Any termination of this Agreement shall not affect the
operation of Article IX of this Agreement.
10.3 Notwithstanding any termination of this Agreement pursuant to
Section 10.2 hereof, the Fund and Dreyfus may, at the option of the
Fund, continue to make available additional Series shares for so
long as the Fund desires pursuant to the terms and conditions of
this Agreement as provided below, for all Contracts in effect on
the effective date of termination of this Agreement (hereinafter
referred to as "Existing Contracts"). Specifically, without
limitation, if the Fund or Dreyfus so elects to make additional
Series shares available, the owners of the Existing Contracts or
Insurance Company, whichever shall have legal authority to do so,
shall be permitted to reallocate investments in the Series, redeem
investments in the Fund and/or invest in the Fund upon the making
of additional purchase payments under the Existing Contracts, if
permitted by the terms of the Existing Contracts. In the event of
a termination of this Agreement pursuant to Section 10.2 hereof,
the Fund and Dreyfus, as promptly as is practicable under the
circumstances, shall notify Insurance Company whether Dreyfus and
the Fund will continue to make Series shares available after such
termination. If Series shares continue to be made available after
such termination, the provisions of this Agreement shall remain in
effect and thereafter either the Fund or Insurance Company may
terminate the Agreement, as so continued pursuant to this Section
10.3, upon prior written notice to the other party, such notice to
be for a period that is reasonable under the circumstances but, if
given by the Fund, need not be for more than six months.
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<PAGE>
ARTICLE XI
AMENDMENTS
11.1 Any other changes in the terms of this Agreement shall be made by
agreement in writing between Insurance Company and Fund.
ARTICLE XII
NOTICE
12.1 Each notice required by this Agreement shall be given by certified
mail, return receipt requested, to the appropriate parties at the
following addresses:
Insurance Company: Annuity Investors Life Insurance
Company
10th Floor, Chiquita Center
250 East Fifth Street
Cincinnati, Ohio 45202
Attn: Mark F. Muething
Fund: Dreyfus Variable Investment Fund
200 Park Avenue
New York, New York 10166
Attn: Daniel C. Maclean
with copies to: Stroock & Stroock & Lavan
7 Hanover Square
New York, New York 10004-2696
Attn: Lewis G. Cole, Esq.
Stuart H. Coleman, Esq.
Notice shall be deemed to be given on the date of receipt by the
addresses as evidenced by the return receipt.
ARTICLE XIII
MISCELLANEOUS
13.1 This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his capacity as an officer of
the Fund. The obligations of this Agreement shall only be binding
upon the assets and property of the Fund and shall not be binding
upon any Trustee, officer or shareholder of the Fund individually.
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<PAGE>
ARTICLE XIV
LAW
14.1 This Agreement shall be construed in accordance with the internal
laws of the State of New York, without giving effect to principles
of conflict of laws.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
to be duly executed and attested as of the date first above
written.
ANNUITY INVESTORS LIFE INSURANCE
COMPANY
/s/ Mark F. Muething
By: ______________________________
Its: Senior Vice President
-----------------------------
Attest: Charles K. McManus
---------------------
Senior Vice President
DREYFUS VARIABLE INVESTMENT FUND
By: /s/ [Illegible]
-----------------------------
Its: Assistant Treasurer
-----------------------------
Attest: /s/[Illegible]
--------------
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<PAGE>
Exhibit (8)(b)
FUND PARTICIPATION AGREEMENT
This Agreement is entered into as of the 21st day of November, 1995,
between Annuity Investors Life Insurance Company ("Insurance Company"), a
life insurance company organized under the laws of the State of Ohio, and
DREYFUS LIFE AND ANNUITY INDEX FUND, INC. (d/b/a DREYFUS STOCK INDEX
FUND), a corporation organized under the laws of the State of Maryland
(the "Fund").
ARTICLE I
DEFINITIONS
1.1 "Act" shall mean the Investment Company Act of 1940, as amended.
1.2 "Board" shall mean the Board of Directors of the Fund having the
responsibility for management and control of the Fund.
1.3 "Business Day" shall mean any day for which the Fund calculates net
asset value per share as described in the Fund's Prospectus.
1.4 "Commission" shall mean the Securities and Exchange Commission.
1.5 "Contract" shall mean a variable annuity contract that uses the
Fund as an underlying investment medium. Individuals who
participate under a group Contract are "Participants".
1.6 "Contractholder" shall mean any entity that is a party to a
Contract with a Participating Company.
1.7 "Disinterested Board Members" shall mean those members of the Board
that are not deemed to be "interested persons" of the Fund, as
defined by the Act.
1.8 "Dreyfus" shall mean The Dreyfus Corporation and its affiliates,
including Dreyfus Service Corporation.
1.9 "Participating Companies" shall mean any insurance company
(including Insurance Company), which offers variable annuity and/or
variable life insurance contracts to the public and which has
entered into an agreement with the Fund for the purpose of making
Fund shares available to serve as an underlying investment medium
for the aforesaid Contracts.
1.10 "Prospectus" shall mean the Fund's current prospectus and statement
of additional information, as most recently filed with the
Commission.
1.11 "Separate Account" shall mean Annuity Investors Variable Account A,
a separate account established by Insurance Company in accordance
with the laws of the State of Ohio.
<PAGE>
1.12 "Software Program" shall mean the software program used by the Fund
for providing Fund and account balance information including net
asset value per share. Such Program may include the Lion System.
In situations where the Lion System or any other Software Program
used by the Fund is not available, such information may be provided
by telephone and confirmed by facsimiles. The Lion System shall be
provided to Insurance Company at no charge.
ARTICLE II
REPRESENTATIONS
2.1 Insurance Company represents and warrants that (a) it is an
insurance company duly organized and in good standing under
applicable law; (b) it has legally and validly established the
Separate Account pursuant to the laws of the State of Ohio for the
purpose of offering to the public certain individual and group
variable annuity contracts; (c) it has registered or will register
the Separate Account as a unit investment trust under the Act to
serve as the segregated investment account for the Contracts; and
(d) each Separate Account is eligible to invest in shares of the
Fund without such investment disqualifying the Fund as an
investment medium for insurance company separate accounts
supporting variable annuity contracts or variable life insurance
contracts.
2.2 Insurance Company represents and warrants that (a) the Contracts
will be described in a registration statement filed under the
Securities Act of 1933, as amended ("1933 Act"); (b) the Contracts
will be issued and sold in compliance in all material respects with
all applicable federal and state laws; and (c) the sale of the
Contracts shall comply in all material respects with state
insurance law requirements. Insurance Company agrees to inform the
Fund promptly of any investment restrictions imposed by state
insurance law and applicable to the Fund.
2.3 Insurance Company represents and warrants that the income, gains
and losses, whether or not realized, from assets allocated to the
Separate Account are, in accordance with the applicable Contracts,
to be credited to or charged against such Separate Account without
regard to other income, gains or losses from assets allocated to
any other accounts of Insurance Company. Insurance Company
represents and warrants that the assets of the Separate Account are
and will be kept separate from Insurance Company's General Account
and any other separate accounts Insurance Company may have, and
will not be charged with liabilities from any business that
Insurance Company may conduct or the liabilities of any companies
affiliated with Insurance Company.
2.4 Fund represents that it is registered with the Commission under the
Act as an open-end, non-diversified management investment company
and possesses, and shall maintain, all legal and regulatory
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<PAGE>
licenses, approvals, consents and/or exemptions required for Fund
to operate and offer its shares as an underlying investment medium
for Participating Companies.
2.5 Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"), and that it will make every
effort to maintain such qualification (under Subchapter M or any
successor or similar provision) and that it will notify Insurance
Company immediately upon having a reasonable basis for believing
that it has ceased to so qualify or that it might not so qualify in
the future.
2.6 Insurance Company represents and agrees that the Contracts are
currently, and at the time of issuance will be, treated as life
insurance policies or annuity contracts, whichever is appropriate,
under applicable provisions of the Code, and that it will make
every effort to maintain such treatment and that it will notify the
Fund and Dreyfus immediately upon having a reasonable basis for
believing that the Contracts have ceased to be so treated or that
they might not be so treated in the future. Insurance Company
agrees that any prospectus offering a Contract that is a "modified
endowment contract," as that term is defined in Section 7702A of
the Code, will identify such Contract as a modified endowment
contract (or policy).
2.7 Fund agrees that the Fund's assets shall be managed and invested in
a manner that complies with the requirements of Section 817(h) of
the Code.
2.8 Insurance Company agrees that the Fund shall be permitted (subject
to the other terms of this Agreement) to make Fund shares available
to other Participating Companies and contractholders.
2.9 Fund represents and warrants that any of its directors, officers,
employees, investment advisers, and other individuals/entities who
deal with the money and/or securities of the Fund are and shall
continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less
than that required by Rule 17g-1 under the Act. The aforesaid Bond
shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
2.10 Insurance Company represents and warrants that all of its employees
and agents who deal with the money and/or securities of the Fund
are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage in an amount not less than the
coverage required to be maintained by the Fund. The aforesaid Bond
shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
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<PAGE>
2.11 Insurance Company agrees that Dreyfus shall be deemed a third party
beneficiary under this Agreement and may enforce any and all rights
conferred by virtue of this Agreement.
ARTICLE III
FUND SHARES
3.1 The Contracts funded through the Separate Account will provide for
the investment of certain amounts in shares of the Fund.
3.2 Fund agrees to make its shares available for purchase at the then
applicable net asset value per share by the Separate Account on
each Business Day pursuant to rules of the Commission.
Notwithstanding the foregoing, the Fund may refuse to sell its
shares to any person, or suspend or terminate the offering of its
shares if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of
the Board, acting in good faith and in light of its fiduciary
duties under federal and any applicable state laws, necessary and
in the best interests of the Fund's shareholders.
3.3 Fund agrees that shares of the Fund will be sold only to
Participating Companies and their separate accounts and to the
general accounts of those Participating Companies and their
affiliates. No shares will be sold to the general public.
3.4 Fund shall use its best efforts to provide closing net asset value,
dividend and capital gain (loss) information on a per-share and
Fund basis to Insurance Company by 6:00 p.m. Eastern Time on each
Business Day. Any material errors in the calculation of net asset
value, dividend and capital gain (loss) information shall be
reported immediately upon discovery to Insurance Company. Non-
material errors will be corrected in the next Business Day's net
asset value per share.
3.5 At the end of each Business Day, Insurance Company will use the
information described in Sections 3.2 and 3.4 to calculate the
Separate Account unit values for the day. Using this unit value,
Insurance Company will process the day's Separate Account
transactions received by it by the close of trading on the floor of
the New York Stock Exchange (currently 4:00 p.m. Eastern time) to
determine the net dollar amount of Fund shares which will be
purchased or redeemed at that day's closing net asset value per
share. The net purchase or redemption orders will be transmitted
to the Fund by Insurance Company by 11:00 a.m. Eastern Time on the
Business Day next following Insurance Company's receipt of that
information.
3.6 Fund appoints Insurance Company as its agent for the limited
purpose of accepting orders for the purchase and redemption of Fund
shares for the Separate Account. Fund will execute orders at the
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applicable net asset value per share determined as of the close of
trading on the day of receipt of such orders by Insurance Company
acting as agent ("effective trade date"), provided that the Fund
receives notice of such orders by 11:00 a.m. Eastern Time on the
next following Business Day and, if such orders request the
purchase of Fund shares, the conditions specified in Section 3.8,
as applicable, are satisfied. A redemption or purchase request
that does not satisfy the conditions specified in this Section and
in Section 3.8, as applicable, will be effected at the net asset
value per share computed on the Business Day immediately preceding
the Business Day upon which such conditions have been satisfied in
accordance with the requirements of this Section and Section 3.8.
3.7 Insurance Company will use its best efforts to notify Fund in
advance of any unusually large purchase or redemption orders.
3.8 If Insurance Company's order requests the purchase of Fund shares,
Insurance Company will pay for such purchases by wiring Federal
Funds to Fund or its designated custodial account on the day the
order is transmitted. Insurance Company shall make all reasonable
efforts to transmit to the Fund payment in Federal Funds by 12:00
noon Eastern Time on the Business Day the Fund receives the notice
of the order pursuant to Section 3.5. Fund will execute such
orders at the applicable net asset value per share determined as of
the close of trading on the effective trade date if Fund receives
payment in Federal Funds by 12:00 midnight Eastern Time on the
Business Day the Fund receives the notice of the order pursuant to
Section 3.5. If payment in Federal Funds for any purchase is not
received or is received by the Fund after 12:00 noon Eastern Time
on such Business Day, Insurance Company shall promptly upon the
Fund's request, reimburse the Fund for any charges, costs, fees,
interest or other expenses incurred by the Fund in connection with
any advances to, or borrowings or overdrafts by, the Fund, or any
similar expenses incurred by the Fund, as a result of portfolio
transactions effected by the Fund based upon such purchase request.
Payment for shares redeemed by the Separate Account or the
Insurance Company shall be made in Federal Funds transmitted by
wire to the Insurance Company or any other designated person on the
next Business Day after the Fund is properly notified of the
redemption order of shares, except that the Fund reserves the right
to delay payment of redemption proceeds to the extent permitted
under Section 22(e) of the 1940 Act. The Fund shall not bear any
responsibility whatsoever for the proper disbursement or crediting
of redemption proceeds by the Insurance Company; the Insurance
Company alone shall be responsible for such action.
3.9 Fund has the obligation to ensure that Fund shares are registered
with applicable federal agencies at all times.
3.10 Fund will confirm each purchase or redemption order made by
Insurance Company. Transfer of Fund shares will be by book entry
only. No share certificates will be issued to Insurance Company.
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<PAGE>
Insurance Company will record shares ordered from Fund in an
appropriate title for the corresponding account.
3.11 Fund shall credit Insurance Company with the appropriate number of
shares.
3.12 On each ex-dividend date of the Fund or, if not a Business Day, on
the first Business Day thereafter, Fund shall communicate to
Insurance Company the amount of dividend and capital gain, if any,
per share. All dividends and capital gains shall be automatically
reinvested in additional shares of the Fund at the net asset value
per share on the ex-dividend date. Fund shall, on the day after
the ex-dividend date or, if not a Business Day, on the first
Business Day thereafter, notify Insurance Company of the number of
shares so issued.
3.13 This Agreement does not cover the sale of any Fund shares to the
Insurance Company general account.
ARTICLE IV
STATEMENTS AND REPORTS
4.1 Fund shall provide monthly statements of account as of the end of
each month for all of Insurance Company's accounts by the fifteenth
(15th) Business Day of the following month.
4.2 Fund shall distribute to Insurance Company copies of the Fund's
Prospectuses, proxy materials, notices, periodic reports and other
printed materials (which the Fund customarily provides to its
shareholders) in quantities as Insurance Company may reasonably
request for distribution to each Contractholder and Participant.
4.3 Fund will provide to Insurance Company at least one complete copy
of all registration statements, Prospectuses, reports, proxy
statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and
all amendments to any of the above, that relate to the Fund or its
shares, contemporaneously with the filing of such document with the
Commission or other regulatory authorities.
4.4 Insurance Company will provide to the Fund at least one copy of all
registration statements, Prospectuses, reports, proxy statements,
sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to
any of the above, that relate to the Contracts or the Separate
Account, contemporaneously with the filing of such document with
the Commission.
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ARTICLE V
EXPENSES
5.1 The charge to the Fund for all expenses and costs of the Fund,
including but not limited to management fees, administrative
expenses and legal and regulatory costs, will be made in the
determination of the Fund's daily net asset value per share so as
to accumulate to an annual charge at the rate set forth in the
Fund's Prospectus. Excluded from the expense limitation described
herein shall be brokerage commissions and transaction fees and
extraordinary expenses.
5.2 Except as provided in this Article V and, in particular in the next
sentence, Insurance Company shall not be required to pay directly
any expenses of the Fund or expenses relating to the distribution
of its shares. Insurance Company shall pay the following expenses
or costs:
a. Such amount of the production expenses of any Fund materials,
including the cost of printing the Fund's Prospectus, or
marketing materials for prospective Insurance Company
Contractholders and Participants as Dreyfus and Insurance
Company shall agree from time to time.
b. Distribution expenses of any Fund materials or marketing
materials for prospective Insurance Company Contractholders
and Participants.
c. Distribution expenses of Fund materials or marketing
materials for Insurance Company Contractholders and
Participants.
Except as provided herein, all other Fund expenses shall not be
borne by Insurance Company.
ARTICLE VI
EXEMPTIVE RELIEF
6.1 Insurance Company has reviewed a copy of the order dated December
23, 1987 of the Securities and Exchange Commission under Section
6(c) of the Act and, in particular, has reviewed the conditions to
the relief set forth in the related Notice. As set forth therein,
Insurance Company agrees to report any potential or existing
conflicts promptly to the Board, and in particular whenever
contract voting instructions are disregarded, and recognizes that
it will be responsible for assisting the Board in carrying out its
responsibilities under such application. Insurance Company agrees
to carry out such responsibilities with a view to the interests of
existing Contractholders.
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<PAGE>
6.2 If a majority of the Board, or a majority of Disinterested Board
Members, determines that a material irreconcilable conflict exists
with regard to Contractholder investments in the Fund, the Board
shall give prompt notice to all Participating Companies. If the
Board determines that Insurance Company is responsible for causing
or creating said conflict, Insurance Company shall at its sole cost
and expense, and to the extent reasonably practicable (as
determined by a majority of the Disinterested Board Members), take
such action as is necessary to remedy or eliminate the
irreconcilable material conflict. Such necessary action may
include, but shall not be limited to:
a. Withdrawing the assets allocable to the Separate Account from
the Fund and reinvesting such assets in a different
investment medium, or submitting the question of whether such
segregation should be implemented to a vote or all affected
Contractholders; and/or
b. Establishing a new registered management investment company.
6.3 If a material irreconcilable conflict arises as a result of a
decision by Insurance Company to disregard Contractholder voting
instructions and said decision represents a minority position or
would preclude a majority vote by all Contractholders having an
interest in the Fund, Insurance Company may be required, at the
Board's election, to withdraw the Separate Account's investment in
the Fund.
6.4 For the purpose of this Article, a majority of the Disinterested
Board Members shall determine whether or not any proposed action
adequately remedies any irreconcilable material conflict, but in no
event will the Fund be required to bear the expense of establishing
a new funding medium for any Contract. Insurance Company shall not
be required by this Article to establish a new funding medium for
any Contract if an offer to do so has been declined by vote of a
majority of the Contractholders materially adversely affected by
the irreconcilable material conflict.
6.5 No action by Insurance Company taken or omitted, and no action by
the Separate Account or the Fund taken or omitted as a result of
any act or failure to act by Insurance Company pursuant to this
Article VI shall relieve Insurance Company of its obligations
under, or otherwise affect the operation of, Article V.
ARTICLE VII
VOTING OF FUND SHARES
7.1 Fund shall provide Insurance Company with copies at no cost to
Insurance Company, of the Fund's proxy material, annual and semi-
annual reports to shareholders and other communications to
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<PAGE>
shareholders in such quantity as Insurance Company shall reasonably
require for distributing to Contractholders or Participants.
Insurance Company shall:
a. solicit voting instructions from Contractholders or
Participants on a timely basis and in accordance with
applicable law;
b. vote Fund shares in accordance with instructions received
from Contractholders or Participants; and
c. vote Fund shares for which no instructions have been received
in the same proportion as Fund shares for which instructions
have been received.
Insurance Company agrees to be responsible for assuring that voting
Fund shares for the Separate Account is conducted in a manner
consistent with other Participating Companies.
7.2 Insurance Company agrees that it shall not, without the prior
written consent of the Fund and Dreyfus, solicit, induce or
encourage Contractholders to (a) change or supplement the Fund's
current investment adviser or (b) change, modify, substitute, add
to or delete the Fund from the current investment media for the
Contracts.
ARTICLE VIII
MARKETING AND REPRESENTATIONS
8.1 The Fund or its underwriter shall periodically furnish Insurance
Company with the following documents, in quantities as Insurance
Company may reasonably request:
a. Current Prospectus and any supplements thereto; and
b. other marketing materials.
Expenses for the production of such documents shall be borne by
Insurance Company in accordance with Section 5.2 of this Agreement.
8.2 Insurance Company shall designate certain persons or entities which
shall have the requisite licenses to solicit applications for the
sale of Contracts. No representation is made as to the number or
amount of Contracts that are to be sold by Insurance Company.
Insurance Company shall make reasonable efforts to market the
Contracts and shall comply with all applicable federal and state
laws in connection therewith.
8.3 Insurance Company shall furnish, or shall cause to be furnished, to
the Fund, each piece of sales literature or other promotional
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<PAGE>
material in which the Fund, its investment adviser or the
administrator is named, at least fifteen Business Days prior to its
use. No such material shall be used unless the Fund approves such
material. Such approval (if given) must be in writing and shall be
presumed not given if not received within ten Business Days after
receipt of such material. The Fund shall use all reasonable
efforts to respond within ten days of receipt.
8.4 Insurance Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning
the Fund in connection with the sale of the Contracts other than
the information or representations contained in the registration
statement or Prospectus, as may be amended or supplemented from
time to time, or in reports or proxy statements for the Fund, or in
sales literature or other promotional material approved by the
Fund.
8.5 Fund shall furnish, or shall cause to be furnished, to Insurance
Company, each piece of the Fund's sales literature or other
promotional material in which Insurance Company or the Separate
Account is named, at least fifteen Business Days prior to its use.
No such material shall be used unless Insurance Company approves
such material. Such approval (if given) must be in writing and
shall be presumed not given if not received within ten Business
Days after receipt of such material. Insurance Company shall use
all reasonable efforts to respond within ten days of receipt.
8.6 Fund shall not, in connection with the sale of Fund shares, give
any information or make any representations on behalf of Insurance
Company or concerning Insurance Company, the Separate Account, or
the Contracts other than the information or representations
contained in a registration statement or prospectus for the
Contracts, as may be amended or supplemented from time to time, or
in published reports for the Separate Account which are in the
public domain or approved by Insurance Company for distribution to
Contractholders or Participants, or in sales literature or other
promotional material approved by Insurance Company.
8.7 For purposes of this Agreement, the phrase "sales literature or
other promotional material" or words of similar import include,
without limitation, advertisements (such as material published, or
designed for use, in a newspaper, magazine or other periodical,
radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures or other public media), sales
literature (such as any written communication distributed or made
generally available to customers or the public, including
brochures, circulars, research reports, market letters, form
letters, seminar texts, or reprints or excerpts of any other
advertisement, sales literature, or published article), educational
or training materials or other communications distributed or made
generally available to some or all agents or employees,
registration statements, prospectuses, statements of additional
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<PAGE>
information, shareholder reports and proxy materials, and any other
material constituting sales literature or advertising under
National Association of Securities Dealers, Inc. rules, the Act or
the 1933 Act.
ARTICLE IX
INDEMNIFICATION
9.1 Insurance Company agrees to indemnify and hold harmless the Fund,
Dreyfus, the sub-investment adviser of the Fund, and their
affiliates, and each of their directors, trustees, officers,
employees, agents and each person, if any, who controls or is
associated with any of the foregoing entities or persons within the
meaning of the 1933 Act (collectively, the "Indemnified Parties"
for purposes of Section 9.1), against any and all losses, claims,
damages or liabilities joint or several (including any
investigative, legal and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of, any action,
suit or proceeding or any claim asserted) for which the Indemnified
Parties may become subject, under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions
in respect to thereof) (i) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in information furnished by Insurance Company for use in
the registration statement or Prospectus or sales literature or
advertisements of the Fund or with respect to the Separate Account
or Contracts, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; (ii) arise out of or as a result of conduct, statements
or representations (other than statements or representations
contained in the Prospectus and sales literature or advertisements
of the Fund) of Insurance Company or its agents, with respect to
the sale and distribution of Contracts for which Fund shares are an
underlying investment; (iii) arise out of the wrongful conduct of
Insurance Company or persons under its control with respect to the
sale or distribution of the Contracts or Fund shares; (iv) arise
out of Insurance Company's incorrect calculation and/or untimely
reporting of net purchase or redemption orders; or (v) arise out of
any breach by Insurance Company of a material term of this
Agreement or as a result of any failure by Insurance Company to
provide the services and furnish the materials or to make any
payments provided for in this Agreement. Insurance Company will
reimburse any Indemnified Party in connection with investigating or
defending any such loss, claim, damage, liability or action;
provided, however, that with respect to clauses (i) and (ii) above
Insurance Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is
based upon any untrue statement or omission or alleged omission
made in such registration statement, prospectus, sales literature,
or advertisement in conformity with written information furnished
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<PAGE>
to Insurance Company by the Fund specifically for use therein.
This indemnity agreement will be in addition to any liability which
Insurance Company may otherwise have.
9.2 The Fund agrees to indemnify and hold harmless Insurance Company
and each of its directors, officers, employees, agents and each
person, if any, who controls Insurance Company within the meaning
of the 1933 Act against any losses, claims, damages or liabilities
to which Insurance Company or any such director, officer, employee,
agent or controlling person may become subject, under the 1933 Act
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) (1) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement or Prospectus
or sales literature or advertisements of the Fund; (2) arise out of
or are based upon the omission to state in the registration
statement or Prospectus or sales literature or advertisements of
the Fund any material fact required to be stated therein or
necessary to make the statements therein not misleading; or (3)
arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration
statement or Prospectus or sales literature or advertisements with
respect to the Separate Account or the Contracts and such
statements were based on information provided to Insurance Company
by the Fund; and the Fund will reimburse any legal or other
expenses reasonably incurred by Insurance Company or any such
director, officer, employee, agent or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Fund will
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or omission or alleged omission made in such Registration
Statement, Prospectus, sales literature or advertisements in
conformity with written information furnished to the Fund by
Insurance Company specifically for use therein. This indemnity
agreement will be in addition to any liability which the Fund may
otherwise have.
9.3 The Fund shall indemnify and hold Insurance Company harmless
against any and all liability, loss, damages, costs or expenses
which Insurance Company may incur, suffer or be required to pay due
to the Fund's (1) incorrect calculation of the daily net asset
value, dividend rate or capital gain (loss) distribution rate; (2)
incorrect reporting of the daily net asset value, dividend rate or
capital gain (loss) distribution rate; and (3) untimely reporting
of the net asset value, dividend rate or capital gain (loss)
distribution rate; provided that the Fund shall have no obligation
to indemnify and hold harmless Insurance Company if the incorrect
calculation or incorrect or untimely reporting was the result of
incorrect information furnished by Insurance Company or information
furnished untimely by Insurance Company or otherwise as a result of
or relating to a breach of this Agreement by Insurance Company.
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<PAGE>
9.4 Promptly after receipt by an indemnified party under this Article
of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the
indemnifying party under this Article, notify the indemnifying
party of the commencement thereof. The omission to so notify the
indemnifying party will not relieve the indemnifying party from any
liability under this Article IX, except to the extent that the
omission results in a failure of actual notice to the indemnifying
party and such indemnifying party is damaged solely as a result of
the failure to give such notice. In case any such action is
brought against any indemnified party, and it notified the
indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent
that it may wish, assume the defense thereof, with counsel
satisfactory to such indemnified party, and to the extent that the
indemnifying party has given notice to such effect to the
indemnified party and is performing its obligations under this
Article, the indemnifying party shall not be liable for any legal
or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof, other than reasonable costs
of investigation. Notwithstanding the foregoing, in any such
proceeding, any indemnified party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties
to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests
between them. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent.
A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this
Article IX. The provisions of this Article IX shall survive
termination of this Agreement.
9.5 Insurance Company shall indemnify and hold the Fund, Dreyfus and
any sub-investment adviser harmless against any tax liability
incurred by the Fund under Section 851 of the Code arising from
purchases or redemptions by Insurance Company's General Accounts or
the account of its affiliates.
ARTICLE X
COMMENCEMENT AND TERMINATION
10.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the
provisions herein.
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<PAGE>
10.2 This Agreement shall terminate without penalty:
a. At the option of Insurance Company or the Fund at any time
from the date hereof upon 180 days' notice, unless a shorter
time is agreed to by the parties;
b. At the option of Insurance Company, if shares of the Fund are
not reasonably available to meet the requirements of the
Contracts as determined by Insurance Company. Prompt notice
of election to terminate shall be furnished by Insurance
Company, said termination to be effective ten days after
receipt of notice unless the Fund makes available a
sufficient number of shares to meet the requirements of the
Contracts within said ten-day period;
c. At the option of Insurance Company, upon the institution of
formal proceedings against the Fund by the Commission,
National Association of Securities Dealers or any other
regulatory body, the expected or anticipated ruling, judgment
or outcome of which would, in Insurance Company's reasonable
judgment, materially impair the Fund's ability to meet and
perform the Fund's obligations and duties hereunder. Prompt
notice of election to terminate shall be furnished by
Insurance Company with said termination to be effective upon
receipt of notice;
d. At the option of the Fund, upon the institution of formal
proceedings against Insurance Company by the Commission,
National Association of Securities Dealers or any other
regulatory body, the expected or anticipated ruling, judgment
or outcome of which would, in the Fund's reasonable judgment,
materially impair Insurance Company's ability to meet and
perform Insurance Company's obligations and duties hereunder.
Prompt notice of election to terminate shall be furnished by
the Fund with said termination to be effective upon receipt
of notice;
e. At the option of the Fund, if the Fund shall determine, in
its sole judgment reasonably exercised in good faith, that
Insurance Company has suffered a material adverse change in
its business or financial condition or is the subject of
material adverse publicity and such material adverse change
or material adverse publicity is likely to have a material
adverse impact upon the business and operation of the Fund or
Dreyfus, the Fund shall notify Insurance Company in writing
of such determination and its intent to terminate this
Agreement, and after considering the actions taken by
Insurance Company and any other changes in circumstances
since the giving of such notice, such determination of the
Fund shall continue to apply on the sixtieth (60th) day
following the giving of such notice, which sixtieth day shall
be the effective date of termination;
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<PAGE>
f. Upon termination of the Investment Advisory Agreement between
the Fund and Dreyfus or its successors unless Insurance
Company specifically approves the selection of a new Fund
investment adviser. The Fund shall promptly furnish notice
of such termination to Insurance Company;
g. In the event the Fund's shares are not registered, issued or
sold in accordance with applicable federal law, or such law
precludes the use of such shares as the underlying investment
medium of Contracts issued or to be issued by Insurance
Company. Termination shall be effective immediately upon
such occurrence without notice;
h. At the option of the Fund upon a determination by the Board
in good faith that it is no longer advisable and in the best
interests of shareholders for the Fund to continue to operate
pursuant to this Agreement. Termination pursuant to this
Subsection (h) shall be effective upon notice by the Fund to
Insurance Company of such termination;
i. At the option of the Fund if the Contracts cease to qualify
as annuity contracts or life insurance policies, as
applicable, under the Code, or if the Fund reasonably
believes that the Contracts may fail to so qualify;
j. At the option of either party to this Agreement, upon the
breach by a party of any material provision of this
Agreement, which breach has not been cured to the reasonable
satisfaction of the other party within 10 days after written
notice of such breach is delivered to such other party;
k. At the option of the Fund, if the Contracts are not
registered, issued or sold in accordance with applicable
federal and/or state law; or
l. Upon assignment of this Agreement, unless made with the
written consent of the non-assigning party.
Any such termination pursuant to Section 10.2a, 10.2d, 10.2e, 10.2f
or 10.2k herein shall not affect the operation of Article V of this
Agreement. Any termination of this Agreement shall not affect the
operation of Article IX of this Agreement.
10.3 Notwithstanding any termination of this Agreement pursuant to
Section 10.2 hereof, the Fund and Dreyfus may, at the option of the
Fund, continue to make available additional Series shares for so
long as the Fund desires pursuant to the terms and conditions of
this Agreement as provided below, for all Contracts in effect on
the effective date of termination of this Agreement (hereinafter
referred to as "Existing Contracts"). Specifically, without
limitation, if the Fund or Dreyfus so elects to make additional
Series shares available, the owners of the Existing Contracts or
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<PAGE>
Insurance Company, whichever shall have legal authority to do so,
shall be permitted to reallocate investments in the Series, redeem
investments in the Fund and/or invest in the Fund upon the making
of additional purchase payments under the Existing Contracts, if
permitted by the terms of the Existing Contracts. In the event of
a termination of this Agreement pursuant to Section 10.2 hereof,
the Fund and Dreyfus, as promptly as is practicable under the
circumstances, shall notify Insurance Company whether Dreyfus and
the Fund will continue to make Series shares available after such
termination. If Series shares continue to be made available after
such termination, the provisions of this Agreement shall remain in
effect and thereafter either the Fund or Insurance Company may
terminate the Agreement, as so continued pursuant to this Section
10.3, upon prior written notice to the other party, such notice to
be for a period that is reasonable under the circumstances but, if
given by the Fund, need not be for more than six months.
ARTICLE XI
AMENDMENTS
11.1 Any other changes in the terms of this Agreement shall be made by
agreement in writing between Insurance Company and Fund.
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<PAGE>
ARTICLE XII
NOTICE
12.1 Each notice required by this Agreement shall be given by certified
mail, return receipt requested, to the appropriate parties at the
following addresses:
Insurance Company: Annuity Investors Life Insurance Company
10th Floor, Chiquita Center
250 East Fifth Street
Cincinnati, OH 45202
Attn: Mark F. Muething
Fund: Dreyfus Stock Index Fund
200 Park Avenue
New York, New York 10166
Attn: Daniel C. Maclean
with copies to: Stroock & Stroock & Lavan
7 Hanover Square
New York, New York 10004-2696
Attn: Lewis G. Cole, Esq.
Stuart H. Coleman, Esq.
Notice shall be deemed to be given on the date of receipt by the addresses
as evidenced by the return receipt.
ARTICLE XIII
MISCELLANEOUS
13.1 This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his capacity as an officer of
the Fund. The obligations of this Agreement shall only be binding
upon the assets and property of the Fund and shall not be binding
upon any director, officer or shareholder of the Fund individually.
ARTICLE IV
LAW
14.1 This Agreement shall be construed in accordance with the internal
laws of the State of New York, without giving effect to principles
of conflict of laws.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
duly executed and attested as of the date first above written.
ANNUITY INVESTORS LIFE INSURANCE COMPANY
By: /s/ Mark F. Muething
------------------------------------
Its: Senior Vice President
-----------------------------------
Attest: /s/ Charles K. McManue
----------------------
Senior Vice President
DREYFUS LIFE AND ANNUITY INDEX FUND, INC.
(d/b/a DREYFUS STOCK INDEX FUND)
By: /s/ [Illegible]
-------------------------------------
Its: Vice President
------------------------------------
Attest: /s/ [Illegible]
----------------
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<PAGE>
EXHIBIT (8)(c)
FUND PARTICIPATION AGREEMENT
This Agreement is entered into as of the 21st day of November, 1995,
between Annuity Investors Life Insurance Company ("Insurance Company"), a
life insurance company organized under the laws of the State of Ohio, and
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC., a corporation
organized under the laws of the State of Maryland (the "Fund").
ARTICLE I
DEFINITIONS
1.1 "Act" shall mean the Investment Company Act of 1940, as amended.
1.2 "Board" shall mean the Board of Directors of the Fund having the
responsibility for management and control of the Fund.
1.3 "Business Day" shall mean any day for which the Fund calculates
net asset value per share as described in the Fund's Prospectus.
1.4 "Commission" shall mean the Securities and Exchange Commission.
1.5 "Contract" shall mean a variable annuity contract that uses the
Fund as an underlying investment medium. Individuals who
participate under a group Contract are "Participants".
1.6 "Contractholder" shall mean any entity that is a party to a
Contract with a Participating Company.
1.7 "Disinterested Board Members" shall mean those members of the
Board that are not deemed to be "interested persons" of the Fund,
as defined by the Act.
1.8 "Dreyfus" shall mean The Dreyfus Corporation and its affiliates,
including Dreyfus Service Corporation.
1.9 "Participating Companies" shall mean any insurance company
(including Insurance Company), which offers variable annuity
and/or variable life insurance contracts to the public and which
has entered into an agreement with the Fund for the purpose of
making Fund shares available to serve as an underlying investment
medium for the aforesaid Contracts.
1.10 "Prospectus" shall mean the Fund's current prospectus and
statement of additional information, as most recently filed with
the Commission.
1.11 "Separate Account" shall mean Annuity Investors Variable Account
A, a separate account established by Insurance Company in
accordance with the laws of the State of Ohio.
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1.12 "Software Program" shall mean the software program used by the
Fund for providing Fund and account balance information including
net asset value per share. Such Program may include the Lion
System. In situations where the Lion System or any other
Software Program used by the Fund is not available, such
information may be provided by telephone and confirmed by
facsimiles. The Lion System shall be provided to Insurance
Company at no charge.
ARTICLE II
REPRESENTATIONS
2.1 Insurance Company represents and warrants that (a) it is an
insurance company duly organized and in good standing under
applicable law; (b) it has legally and validly established the
Separate Account pursuant to the laws of the State of Ohio for
the purpose of offering to the public certain individual and
group variable annuity contracts; (c) it has registered or will
register the Separate Account as a unit investment trust under
the Act to serve as the segregated investment account for the
Contracts; and (d) each Separate Account is eligible to invest in
shares of the Fund without such investment disqualifying the Fund
as an investment medium for insurance company separate accounts
supporting variable annuity contracts or variable life insurance
contracts.
2.2 Insurance Company represents and warrants that (a) the Contracts
will be described in a registration statement filed under the
Securities Act of 1933, as amended ("1933 Act"); (b) the
Contracts will be issued and sold in compliance in all material
respects with all applicable federal and state laws; and (c) the
sale of the Contracts shall comply in all material respects with
state insurance law requirements. Insurance Company agrees to
inform the Fund promptly of any investment restrictions imposed
by state insurance law and applicable to the Fund.
2.3 Insurance Company represents and warrants that the income, gains
and losses, whether or not realized, from assets allocated to the
Separate Account are, in accordance with the applicable
Contracts, to be credited to or charged against such Separate
Account without regard to other income, gains or losses from
assets allocated to any other accounts of Insurance Company.
Insurance Company represents and warrants that the assets of the
Separate Account are and will be kept separate from Insurance
Company's General Account and any other separate accounts
Insurance Company may have, and will not be charged with
liabilities from any business that Insurance Company may conduct
or the liabilities of any companies affiliated with Insurance
Company.
2.4 Fund represents that it is registered with the Commission under
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the Act as an open-end, diversified management investment company
and possesses, and shall maintain, all legal and regulatory
licenses, approvals, consents and/or exemptions required for Fund
to operate and offer its shares as an underlying investment
medium for Participating Companies.
2.5 Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"), and that it will make
every effort to maintain such qualification (under Subchapter M
or any successor or similar provision) and that it will notify
Insurance Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not
so qualify in the future.
2.6 Insurance Company represents and agrees that the Contracts are
currently, and at the time of issuance will be, treated as life
insurance policies or annuity contracts, whichever is
appropriate, under applicable provisions of the Code, and that it
will make every effort to maintain such treatment and that it
will notify the Fund and Dreyfus immediately upon having a
reasonable basis for believing that the Contracts have ceased to
be so treated or that they might not be so treated in the future.
Insurance Company agrees that any prospectus offering a Contract
that is a "modified endowment contract," as that term is defined
in Section 7702A of the Code, will identify such Contract as a
modified endowment contract (or policy).
2.7 Fund agrees that the Fund's assets shall be managed and invested
in a manner that complies with the requirements of Section 817(h)
of the Code.
2.8 Insurance Company agrees that the Fund shall be permitted
(subject to the other terms of this Agreement) to make Fund
shares available to other Participating Companies and
contractholders.
2.9 Fund represents and warrants that any of its directors, officers,
employees, investment advisers, and other individuals/entities
who deal with the money and/or securities of the Fund are and
shall continue to be at all times covered by a blanket fidelity
bond or similar coverage for the benefit of the Fund in an amount
not less than that required by Rule 17g-1 under the Act. The
aforesaid Bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.
2.10 Insurance Company represents and warrants that all of its
employees and agents who deal with the money and/or securities of
the Fund are and shall continue to be at all times covered by a
blanket fidelity bond or similar coverage in an amount not less
than the coverage required to be maintained by the Fund. The
aforesaid Bond shall include coverage for larceny and
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embezzlement and shall be issued by a reputable bonding company.
2.11 Insurance Company agrees that Dreyfus shall be deemed a third
party beneficiary under this Agreement and may enforce any and
all rights conferred by virtue of this Agreement.
ARTICLE III
FUND SHARES
3.1 The Contracts funded through the Separate Account will provide
for the investment of certain amounts in shares of the Fund.
3.2 Fund agrees to make its shares available for purchase at the then
applicable net asset value per share by the Separate Account on
each Business Day pursuant to rules of the Commission.
Notwithstanding the foregoing, the Fund may refuse to sell its
shares to any person, or suspend or terminate the offering of its
shares if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of
the Board, acting in good faith and in light of its fiduciary
duties under federal and any applicable state laws, necessary and
in the best interests of the Fund's shareholders.
3.3 Fund agrees that shares of the Fund will be sold only to
Participating Companies and their separate accounts and to the
general accounts of those Participating Companies and their
affiliates. No shares will be sold to the general public.
3.4 Fund shall use its best efforts to provide closing net asset
value, dividend and capital gain (loss) information on a per-
share and Fund basis to Insurance Company by 6:00 p.m. Eastern
Time on each Business Day. Any material errors in the
calculation of net asset value, dividend and capital gain (loss)
information shall be reported immediately upon discovery to
Insurance Company. Non-material errors will be corrected in the
next Business Day's net asset value per share.
3.5 At the end of each Business Day, Insurance Company will use the
information described in Sections 3.2 and 3.4 to calculate the
Separate Account unit values for the day. Using this unit value,
Insurance Company will process the day's Separate Account
transactions received by it by the close of trading on the floor
of the New York Stock Exchange (currently 4:00 p.m. Eastern time)
to determine the net dollar amount of Fund shares which will be
purchased or redeemed at that day's closing net asset value per
share. The net purchase or redemption orders will be transmitted
to the Fund by Insurance Company by 11:00 a.m. Eastern Time on
the Business Day next following Insurance Company's receipt of
that information.
3.6 Fund appoints Insurance Company as its agent for the limited
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purpose of accepting orders for the purchase and redemption of
Fund shares for the Separate Account. Fund will execute orders
at the applicable net asset value per share determined as of the
close of trading on the day of receipt of such orders by
Insurance Company acting as agent ("effective trade date"),
provided that the Fund receives notice of such orders by 11:00
a.m. Eastern Time on the next following Business Day and, if such
orders request the purchase of Fund shares, the conditions
specified in Section 3.8, as applicable, are satisfied. A
redemption or purchase request that does not satisfy the
conditions specified in this Section and in Section 3.8, as
applicable, will be effected at the net asset value per share
computed on the Business Day immediately preceding the Business
Day upon which such conditions have been satisfied in accordance
with the requirements of this Section and Section 3.8.
3.7 Insurance Company will use its best efforts to notify Fund in
advance of any unusually large purchase or redemption orders.
3.8 If Insurance Company's order requests the purchase of Fund
shares, Insurance Company will pay for such purchases by wiring
Federal Funds to Fund or its designated custodial account on the
day the order is transmitted. Insurance Company shall make all
reasonable efforts to transmit to the Fund payment in Federal
Funds by 12:00 noon Eastern Time on the Business Day the Fund
receives the notice of the order pursuant to Section 3.5. Fund
will execute such orders at the applicable net asset value per
share determined as of the close of trading on the effective
trade date if Fund receives payment in Federal Funds by 12:00
midnight Eastern Time on the Business Day the Fund receives the
notice of the order pursuant to Section 3.5. If payment in
Federal Funds for any purchase is not received or is received by
the Fund after 12:00 noon Eastern Time on such Business Day,
Insurance Company shall promptly upon the Fund's request,
reimburse the Fund for any charges, costs, fees, interest or
other expenses incurred by the Fund in connection with any
advances to, or borrowings or overdrafts by, the Fund, or any
similar expenses incurred by the Fund, as a result of portfolio
transactions effected by the Fund based upon such purchase
request. Payment for shares redeemed by the Separate Account or
the Insurance Company shall be made in Federal Funds transmitted
by wire to the Insurance Company or any other designated person
on the next Business Day after the Fund is properly notified of
the redemption order of shares, except that the Fund reserves the
right to delay payment of redemption proceeds to the extent
permitted under Section 22(e) of the 1940 Act. The Fund shall
not bear any responsibility whatsoever for the proper
disbursement or crediting of redemption proceeds by the Insurance
Company; the Insurance Company alone shall be responsible for
such action.
3.9 Fund has the obligation to ensure that Fund shares are registered
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with applicable federal agencies at all times.
3.10 Fund will confirm each purchase or redemption order made by
Insurance Company. Transfer of Fund shares will be by book entry
only. No share certificates will be issued to Insurance Company.
Insurance Company will record shares ordered from Fund in an
appropriate title for the corresponding account.
3.11 Fund shall credit Insurance Company with the appropriate number
of shares.
3.12 On each ex-dividend date of the Fund or, if not a Business Day,
on the first Business Day thereafter, Fund shall communicate to
Insurance Company the amount of dividend and capital gain, if
any, per share. All dividends and capital gains shall be
automatically reinvested in additional shares of the Fund at the
net asset value per share on the ex-dividend date. Fund shall,
on the day after the ex-dividend date or, if not a Business Day,
on the first Business Day thereafter, notify Insurance Company of
the number of shares so issued.
3.13 This Agreement does not cover the sale of any Fund shares to the
Insurance Company general account.
ARTICLE IV
STATEMENTS AND REPORTS
4.1 Fund shall provide monthly statements of account as of the end of
each month for all of Insurance Company's accounts by the
fifteenth (15th) Business Day of the following month.
4.2 Fund shall distribute to Insurance Company copies of the Fund's
Prospectuses, proxy materials, notices, periodic reports and
other printed materials (which the Fund customarily provides to
its shareholders) in quantities as Insurance Company may
reasonably request for distribution to each Contractholder and
Participant.
4.3 Fund will provide to Insurance Company at least one complete copy
of all registration statements, Prospectuses, reports, proxy
statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and
all amendments to any of the above, that relate to the Fund or
its shares, contemporaneously with the filing of such document
with the Commission or other regulatory authorities.
4.4 Insurance Company will provide to the Fund at least one copy of
all registration statements, Prospectuses, reports, proxy
statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and
all amendments to any of the above, that relate to the Contracts
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or the Separate Account, contemporaneously with the filing of
such document with the Commission.
ARTICLE V
EXPENSES
5.1 The charge to the Fund for all expenses and costs of the Fund,
including but not limited to management fees, administrative
expenses and legal and regulatory costs, will be made in the
determination of the Fund's daily net asset value per share so as
to accumulate to an annual charge at the rate set forth in the
Fund's Prospectus. Excluded from the expense limitation
described herein shall be brokerage commissions and transaction
fees and extraordinary expenses.
5.2 Except as provided in this Article V and, in particular in the
next sentence, Insurance Company shall not be required to pay
directly any expenses of the Fund or expenses relating to the
distribution of its shares. Insurance Company shall pay the
following expenses or costs:
a. Such amount of the production expenses of any Fund
materials including the cost of printing the Fund's
Prospectus, or marketing materials for prospective
Insurance Company Contractholders and Participants as
Dreyfus and Insurance Company shall agree from time to
time.
b. Distribution expenses of any Fund materials or marketing
materials for prospective Insurance Company
Contractholders and Participants.
c. Distribution expenses of Fund materials or marketing
materials for Insurance Company Contractholders and
Participants.
Except as provided herein, all other Fund expenses shall not be
borne by Insurance Company.
ARTICLE VI
EXEMPTIVE RELIEF
6.1 The Fund shall furnish Insurance Company with a copy of its
application for an order of the Securities and Exchange
Commission under Section 6(c) of the Act for mixed and shared
funding relief, and the notice of filing of such application and
order when issued by the SEC. Insurance Company agrees to comply
with the conditions on which such order is issued, including
reporting any potential or existing conflicts promptly to the
Board, and in particular whenever Contractholder voting
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instructions are disregarded, to the extent that such conditions
are not materially different from the conditions of the mixed and
shared funding relief obtained by Dreyfus Variable Investment
Fund and Dreyfus Life and Annuity Index Fund, Inc., respectively;
and recognizes that it shall be responsible for assisting the
Board in carrying out its responsibilities in connection with
such order. Insurance Company agrees to carry out such
responsibilities with a view to the interests of existing
Contractholders.
6.2 If a majority of the Board, or a majority of Disinterested Board
Members, determines that a material irreconcilable conflict
exists with regard to Contractholder investments in the Fund, the
Board shall give prompt notice to all Participating Companies.
If the Board determines that Insurance Company is responsible for
causing or creating said conflict, Insurance Company shall at no
cost and expense to the Fund, and to the extent reasonably
practicable (as determined by a majority of the Disinterested
Board Members), take such action as is necessary to remedy or
eliminate the irreconcilable material conflict. Such necessary
action may include, but shall not be limited to:
a. Withdrawing the assets allocable to the Separate Account
from the Fund and reinvesting such assets in a different
investment medium, or submitting the question of whether
such segregation should be implemented to a vote or all
affected Contractholders; and/or
b. Establishing a new registered management investment
company.
6.3 If a material irreconcilable conflict arises as a result of a
decision by Insurance Company to disregard Contractholder voting
instructions and said decision represents a minority position or
would preclude a majority vote by all Contractholders having an
interest in the Fund, Insurance Company may be required, at the
Board's election, to withdraw the Separate Account's investment
in the Fund.
6.4 For the purpose of this Article, a majority of the Disinterested
Board Members shall determine whether or not any proposed action
adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to bear the expense of
establishing a new funding medium for any Contract. Insurance
Company shall not be required by this Article to establish a new
funding medium for any Contract if an offer to do so has been
declined by vote of a majority of the Contractholders materially
adversely affected by the irreconcilable material conflict.
6.5 No action by Insurance Company taken or omitted, and no action by
the Separate Account or the Fund taken or omitted as a result of
any act or failure to act by Insurance Company pursuant to this
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Article VI shall relieve Insurance Company of its obligations
under, or otherwise affect the operation of, Article V.
ARTICLE VII
VOTING OF FUND SHARES
7.1 Fund shall provide Insurance Company with copies at no cost to
Insurance Company, of the Fund's proxy material, annual and semi-
annual reports to shareholders and other communications to
shareholders in such quantity as Insurance Company shall
reasonably require for distributing to Contractholders or
Participants.
Insurance Company shall:
a. solicit voting instructions from Contractholders or
Participants on a timely basis and in accordance with
applicable law;
b. vote Fund shares in accordance with instructions received
from Contractholders or Participants; and
c. vote Fund shares for which no instructions have been
received in the same proportion as Fund shares for which
instructions have been received.
Insurance Company agrees to be responsible for assuring that
voting Fund shares for the Separate Account is conducted in a
manner consistent with other Participating Companies.
7.2 Insurance Company agrees that it shall not, without the prior
written consent of the Fund and Dreyfus, solicit, induce or
encourage Contractholders to (a) change or supplement the Fund's
current investment adviser or (b) change, modify, substitute, add
to or delete the Fund from the current investment media for the
Contracts.
ARTICLE VIII
MARKETING AND REPRESENTATIONS
8.1 The Fund or its underwriter shall periodically furnish Insurance
Company with the following documents, in quantities as Insurance
Company may reasonably request:
a. Current Prospectus and any supplements thereto; and
b. other marketing materials.
Expenses for the production of such documents shall be borne by
Insurance Company in accordance with Section 5.2 of this
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Agreement.
8.2 Insurance Company shall designate certain persons or entities
which shall have the requisite licenses to solicit applications
for the sale of Contracts. No representation is made as to the
number or amount of Contracts that are to be sold by Insurance
Company. Insurance Company shall make reasonable efforts to
market the Contracts and shall comply with all applicable federal
and state laws in connection therewith.
8.3 Insurance Company shall furnish, or shall cause to be furnished,
to the Fund each piece of sales literature or other promotional
material in which the Fund, its investment adviser or the
administrator is named, at least fifteen Business Days prior to
its use. No such material shall be used unless the Fund approves
such material. Such approval (if given) must be in writing and
shall be presumed not given if not received within ten Business
Days after receipt of such material. The Fund shall use all
reasonable efforts to respond within ten days of receipt.
8.4 Insurance Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning
the Fund in connection with the sale of the Contracts other than
the information or representations contained in the registration
statement or Prospectus, as may be amended or supplemented from
time to time, or in reports or proxy statements for the Fund, or
in sales literature or other promotional material approved by the
Fund.
8.5 Fund shall furnish, or shall cause to be furnished, to Insurance
Company, each piece of the Fund's sales literature or other
promotional material in which Insurance Company or the Separate
Account is named, at least fifteen Business Days prior to its
use. No such material shall be used unless Insurance Company
approves such material. Such approval (if given) must be in
writing and shall be presumed not given if not received within
ten Business Days after receipt of such material. Insurance
Company shall use all reasonable efforts to respond within ten
days of receipt.
8.6 Fund shall not, in connection with the sale of Fund shares, give
any information or make any representations on behalf of
Insurance Company or concerning Insurance Company, the Separate
Account, or the Contracts other than the information or
representations contained in a registration statement or
prospectus for the Contracts, as may be amended or supplemented
from time to time, or in published reports for the Separate
Account which are in the public domain or approved by Insurance
Company for distribution to Contractholders or Participants, or
in sales literature or other promotional material approved by
Insurance Company.
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8.7 For purposes of this Agreement, the phrase "sales literature or
other promotional material" or words of similar import include,
without limitation, advertisements (such as material published,
or designed for use, in a newspaper, magazine or other
periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures or other
public media), sales literature (such as any written
communication distributed or made generally available to
customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, or reprints
or excerpts of any other advertisement, sales literature, or
published article), educational or training materials or other
communications distributed or made generally available to some or
all agents or employees, registration statements, prospectuses,
statements of additional information, shareholder reports and
proxy materials, and any other material constituting sales
literature or advertising under National Association of
Securities Dealers, Inc. rules, the Act or the 1933 Act.
ARTICLE IX
INDEMNIFICATION
9.1 Insurance Company agrees to indemnify and hold harmless the Fund,
Dreyfus, the sub-investment adviser of the Fund, and their
respective affiliates, and each of their directors, trustees,
officers, employees, agents and each person, if any, who controls
or is associated with any of the foregoing entities or persons
within the meaning of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of Section 9.1), against any
and all losses, claims, damages or liabilities joint or several
(including any investigative, legal and other expenses reasonably
incurred in connection with, and any amounts paid in settlement
of, any action, suit or proceeding or any claim asserted) for
which the Indemnified Parties may become subject, under the 1933
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect to thereof) (i) arise out of
or are based upon any untrue statement or alleged untrue
statement of any material fact contained in information furnished
by Insurance Company for use in the registration statement or
Prospectus or sales literature or advertisements of the Fund or
with respect to the Separate Account or Contracts, or arise out
of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(ii) arise out of or as a result of conduct, statements or
representations (other than statements or representations
contained in the Prospectus and sales literature or
advertisements of the Fund) of Insurance Company or its agents,
with respect to the sale and distribution of Contracts for which
Fund shares are an underlying investment; (iii) arise out of the
wrongful conduct of Insurance Company or persons under its
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control with respect to the sale or distribution of the Contracts
or Fund shares; (iv) arise out of Insurance Company's incorrect
calculation and/or untimely reporting of net purchase or
redemption orders; or (v) arise out of any breach by Insurance
Company of a material term of this Agreement or as a result of
any failure by Insurance Company to provide the services and
furnish the materials or to make any payments provided for in
this Agreement. Insurance Company will reimburse any Indemnified
Party in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that
with respect to clauses (i) and (ii) above Insurance Company will
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any
untrue statement or omission or alleged omission made in such
registration statement, prospectus, sales literature, or
advertisement in conformity with written information furnished to
Insurance Company by the Fund specifically for use therein. This
indemnity agreement will be in addition to any liability which
Insurance Company may otherwise have.
9.2 The Fund agrees to indemnify and hold harmless Insurance Company
and each of its directors, officers, employees, agents and each
person, if any, who controls Insurance Company within the meaning
of the 1933 Act against any losses, claims, damages or
liabilities to which Insurance Company or any such director,
officer, employee, agent or controlling person may become
subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
(1) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or Prospectus or sales literature or
advertisements of the Fund; (2) arise out of or are based upon
the omission to state in the registration statement or Prospectus
or sales literature or advertisements of the Fund any material
fact required to be stated therein or necessary to make the
statements therein not misleading; or (3) arise out of or are
based upon any untrue statement or alleged untrue statement of
any material fact contained in the registration statement or
Prospectus or sales literature or advertisements with respect to
the Separate Account or the Contracts and such statements were
based on information provided to Insurance Company by the Fund;
and the Fund will reimburse any legal or other expenses
reasonably incurred by Insurance Company or any such director,
officer, employee, agent or controlling person in connection with
investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Fund will not be
liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or omission or alleged omission made in such
Registration Statement, Prospectus, sales literature or
advertisements in conformity with written information furnished
to the Fund by Insurance Company specifically for use therein.
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This indemnity agreement will be in addition to any liability
which the Fund may otherwise have.
9.3 The Fund shall indemnify and hold Insurance Company harmless
against any and all liability, loss, damages, costs or expenses
which Insurance Company may incur, suffer or be required to pay
due to the Fund's (1) incorrect calculation of the daily net
asset value, dividend rate or capital gain (loss) distribution
rate; (2) incorrect reporting of the daily net asset value,
dividend rate or capital gain (loss) distribution rate; and (3)
untimely reporting of the net asset value, dividend rate or
capital gain (loss) distribution rate; provided that the Fund
shall have no obligation to indemnify and hold harmless Insurance
Company if the incorrect calculation or incorrect or untimely
reporting was the result of incorrect information furnished by
Insurance Company or information furnished untimely by Insurance
Company or otherwise as a result of or relating to a breach of
this Agreement by Insurance Company.
9.4 Promptly after receipt by an indemnified party under this Article
of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against
the indemnifying party under this Article, notify the
indemnifying party of the commencement thereof. The omission to
so notify the indemnifying party will not relieve the
indemnifying party from any liability under this Article IX,
except to the extent that the omission results in a failure of
actual notice to the indemnifying party and such indemnifying
party is damaged solely as a result of the failure to give such
notice. In case any such action is brought against any
indemnified party, and it notified the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, assume
the defense thereof, with counsel satisfactory to such
indemnified party, and to the extent that the indemnifying party
has given notice to such effect to the indemnified party and is
performing its obligations under this Article, the indemnifying
party shall not be liable for any legal or other expenses
subsequently incurred by such indemnified party in connection
with the defense thereof, other than reasonable costs of
investigation. Notwithstanding the foregoing, in any such
proceeding, any indemnified party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties
to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests
between them. The indemnifying party shall not be liable for any
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settlement of any proceeding effected without its written
consent.
A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this
Article IX. The provisions of this Article IX shall survive
termination of this Agreement.
9.5 Insurance Company shall indemnify and hold the Fund, Dreyfus and
sub-investment adviser harmless against any tax liability
incurred by the Fund under Section 851 of the Code arising from
purchases or redemptions by Insurance Company's General Accounts
or the account of its affiliates.
ARTICLE X
COMMENCEMENT AND TERMINATION
10.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the
provisions herein.
10.2 This Agreement shall terminate without penalty:
a. At the option of Insurance Company or the Fund at any
time from the date hereof upon 180 days' notice, unless a
shorter time is agreed to by the parties;
b. At the option of Insurance Company, if shares of the Fund
are not reasonably available to meet the requirements of
the Contracts as determined by Insurance Company. Prompt
notice of election to terminate shall be furnished by
Insurance Company, said termination to be effective ten
days after receipt of notice unless the Fund makes
available a sufficient number of shares to meet the
requirements of the Contracts within said ten-day period;
c. At the option of Insurance Company, upon the institution
of formal proceedings against the Fund by the Commission,
National Association of Securities Dealers or any other
regulatory body, the expected or anticipated ruling,
judgment or outcome of which would, in Insurance
Company's reasonable judgment, materially impair the
Fund's ability to meet and perform the Fund's obligations
and duties hereunder. Prompt notice of election to
terminate shall be furnished by Insurance Company with
said termination to be effective upon receipt of notice;
d. At the option of the Fund, upon the institution of formal
proceedings against Insurance Company by the Commission,
National Association of Securities Dealers or any other
regulatory body, the expected or anticipated ruling,
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<PAGE>
judgment or outcome of which would, in the Fund's
reasonable judgment, materially impair Insurance
Company's ability to meet and perform Insurance Company's
obligations and duties hereunder. Prompt notice of
election to terminate shall be furnished by the Fund with
said termination to be effective upon receipt of notice;
e. At the option of the Fund, if the Fund shall determine,
in its sole judgment reasonably exercised in good faith,
that Insurance Company has suffered a material adverse
change in its business or financial condition or is the
subject of material adverse publicity and such material
adverse change or material adverse publicity is likely to
have a material adverse impact upon the business and
operation of the Fund or Dreyfus, the Fund shall notify
Insurance Company in writing of such determination and
its intent to terminate this Agreement, and after
considering the actions taken by Insurance Company and
any other changes in circumstances since the giving of
such notice, such determination of the Fund shall
continue to apply on the sixtieth (60th) day following
the giving of such notice, which sixtieth day shall be
the effective date of termination;
f. Upon termination of the Investment Advisory Agreement
between the Fund and Dreyfus or its successors unless
Insurance Company specifically approves the selection of
a new Fund investment adviser. The Fund shall promptly
furnish notice of such termination to Insurance Company;
g. In the event the Fund's shares are not registered, issued
or sold in accordance with applicable federal law, or
such law precludes the use of such shares as the
underlying investment medium of Contracts issued or to be
issued by Insurance Company. Termination shall be
effective immediately upon such occurrence without
notice;
h. At the option of the Fund upon a determination by the
Board in good faith that it is no longer advisable and in
the best interests of shareholders for the Fund to
continue to operate pursuant to this Agreement.
Termination pursuant to this Subsection (h) shall be
effective upon notice by the Fund to Insurance Company of
such termination;
i. At the option of the Fund if the Contracts cease to
qualify as annuity contracts or life insurance policies,
as applicable, under the Code, or if the Fund reasonably
believes that the Contracts may fail to so qualify;
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<PAGE>
j. At the option of either party to this Agreement, upon the
breach by a party of any material provision of this
Agreement, which breach has not been cured to the
reasonable satisfaction of the other party within 10 days
after written notice of such breach is delivered to such
other party;
k. At the option of the Fund, if the Contracts are not
registered, issued or sold in accordance with applicable
federal and/or state law; or
l. Upon assignment of this Agreement, unless made with the
written consent of the non-assigning party.
Any such termination pursuant to Section 10.2a, 10.2d, 10.2e,
10.2f or 10.2k herein shall not affect the operation of Article V
of this Agreement. Any termination of this Agreement shall not
affect the operation of Article IX of this Agreement.
10.3 Notwithstanding any termination of this Agreement pursuant to
Section 10.2 hereof, the Fund and Dreyfus may, at the option of
the Fund, continue to make available additional Fund shares for
so long as the Fund desires pursuant to the terms and conditions
of this Agreement as provided below, for all Contracts in effect
on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"). Specifically,
without limitation, if the Fund or Dreyfus so elects to make
additional Fund shares available, the owners of the Existing
Contracts or Insurance Company, whichever shall have legal
authority to do so, shall be permitted to reallocate investments
in the Fund, redeem investments in the Fund and/or invest in the
Fund upon the making of additional purchase payments under the
Existing Contracts, if permitted by the terms of the Existing
Contracts. In the event of a termination of this Agreement
pursuant to Section 10.2 hereof, the Fund and Dreyfus, as
promptly as is practicable under the circumstances, shall notify
Insurance Company whether Dreyfus and the Fund will continue to
make Fund shares available after such termination. If Fund
shares continue to be made available after such termination, the
provisions of this Agreement shall remain in effect and
thereafter either the Fund or Insurance Company may terminate the
Agreement, as so continued pursuant to this Section 10.3, upon
prior written notice to the other party, such notice to be for a
period that is reasonable under the circumstances but, if given
by the Fund, need not be for more than six months.
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<PAGE>
ARTICLE XI
AMENDMENTS
11.1 Any other changes in the terms of this Agreement shall be made by
agreement in writing between Insurance Company and Fund.
ARTICLE XII
NOTICE
12.1 Each notice required by this Agreement shall be given by
certified mail, return receipt requested, to the appropriate
parties at the following addresses:
Insurance Company: Annuity Investors Life Insurance Company
10th Floor, Chiquita Center
250 East Fifth Street
Cincinnati, OH 45201
Attn: Mark F. Muething
Fund: The Dreyfus Socially Responsible
Growth Fund, Inc.
c/o Premier Mutual Fund Services, Inc.
200 Park Avenue, 6th Floor West
New York, New York 10166
Attn: Eric B. Fischman, Esq.
with copies to: The Dreyfus Socially Responsible
Growth Fund, Inc.
c/o The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Attn: Daniel C. Maclean, Esq.
Lawrence B. Stoller, Esq.
Stroock & Stroock & Lavan
7 Hanover Square
New York, New York 10004-2696
Attn: Lewis G. Cole, Esq.
Stuart H. Coleman, Esq.
Notice shall be deemed to be given on the date of receipt by the
addresses as evidenced by the return receipt.
ARTICLE XIII
MISCELLANEOUS
13.1 This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his capacity as an officer of
the Fund. The obligations of this Agreement shall only be
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<PAGE>
binding upon the assets and property of the Fund and shall not be
binding upon any director, officer or shareholder of the Fund
individually.
ARTICLE XIV
LAW
14.1 This Agreement shall be construed in accordance with the internal
laws of the State of New York, without giving effect to
principles of conflict of laws.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
duly executed and attested as of the date first above written.
ANNUITY INVESTORS LIFE INSURANCE COMPANY
By: /s/ Mark F. Muething
Its: Senior Vice President
Attest: /s/ Charles K. McManus
Senior Vice President
THE DREYFUS SOCIALLY RESPONSIBLE
GROWTH FUND, INC.
By: /s/ Eric Fischman
Its: Vice President
Attest: /s/ [Illegible]
- 18 -
<PAGE>
EXHIBIT (8)(f)
SERVICE AGREEMENT
THIS SERVICE AGREEMENT (hereinafter called "Agreement") dated
December 1, 1995, by and between AMERICAN ANNUITY GROUP, INC.(hereinafter
called "AAG") and ANNUITY INVESTORS LIFE INSURANCE COMPANY (hereinafter
called "AILIC").
WHEREAS, AAG has extensive experience in the administration of
annuity business; and
WHEREAS, AILIC is a subsidiary of AAG, and desires that AAG
perform certain administrative, accounting and other services (hereinafter
called "Services") for AILIC in its business operations and desires
further to make use in its day-to-day operations of certain property,
equipment, and facilities (hereinafter called "Facilities") of AAG and its
subsidiaries as AILIC may request; and
WHEREAS, AAG and AILIC contemplate that such an arrangement will
achieve certain operating economies and improve Services to the benefit of
AAG, AILIC and AILIC's policyholders; and
WHEREAS, AAG and AILIC wish to assure that all charges for
Services and the use of Facilities incurred hereunder are reasonable and
in accordance with the requirements of applicable law and regulations and
to the extent practicable reflect actual costs and are arrived at in a
fair and equitable manner, and that estimated costs, whenever used, are
adjusted periodically, to bring them into alignment with actual costs; and
WHEREAS, AAG and AILIC wish to identify the Services to be
rendered to AILIC and AAG and its subsidiaries and the Facilities to be
used by AILIC and to provide a method for determining the charges to be
made to AILIC.
NOW, THEREFORE, in consideration of the premises and of the
promises set forth herein, and intending to be legally bound hereby, AAG
and AILIC agree as follows:
1. PERFORMANCE OF SERVICES AND USE OF FACILITIES. AAG agrees to the
extent requested by AILIC to perform such Services for AILIC as AILIC
determines to be reasonably necessary in the conduct of its business and
operations.
AAG agrees to the extent requested by AILIC to make available its
personnel and Facilities to AILIC as AILIC may determine to be reasonably
necessary in the conduct of its business and operations, including but not
limited to the following functions: policy administration; accounting and
auditing services; actuarial; marketing; legal; administrative and other
regulatory matters; general corporate matters; contract matters; use of
data processing and computer equipment; use of business property, whether
owned or leased; and use of communications equipment. It is the intent of
the parties that AAG will perform all services which AILIC requires in
connection with its business of marketing, issuing and servicing fixed and
<PAGE>
variable annuities and provide all Facilities needed in connection with
such business. Notwithstanding the foregoing, this Agreement is not
intended to cover investment services or policy distribution which may be
the subject of separate agreements.
AAG agrees at all times to use its best efforts to maintain
sufficient personnel and Facilities of the kind necessary to perform the
Services sent forth in this Agreement. AAG shall have the right upon
thirty (30) days prior written notice to and non-disapproval by the Ohio
Department of Insurance to subcontract with those subsidiaries, affiliates
or unrelated third parties (hereinafter "Subcontractors") accepted in
writing by AILIC to perform any Services and provide any personnel and
Facilities which AAG is obligated to provide to AILIC pursuant to this
Agreement and in strict accordance with the terms, conditions and
limitations contained in this Agreement; provided, however, AAG shall not
be relieved of its obligations, or of any liability hereunder to AILIC
arising as a result of any failures of SUBCONTRACTORS to perform. Until
changed in accordance with the foregoing, Services shall be provided by
AAG.
(a) CAPACITY OF PERSONNEL; STATUS OF FACILITIES, Whenever
AAG utilizes its personnel to perform Services for AILIC pursuant to this
Agreement, such personnel shall at all times remain employees of AAG
subject solely to its direction and control and AAG shall alone retain
full liability to such employees for their welfare, salaries, fringe
benefits, legally required employer contributions and tax obligations.
No facility of AAG used in performing Services for or subject to
use by AILIC shall be deemed to be transferred, assigned, conveyed or
leased by performance or use pursuant to this Agreement.
(b) EXERCISE OF JUDGMENT IN RENDERING SERVICES. In providing
any Services hereunder which require the exercise of judgment by AAG, AAG
shall perform any such Services in accordance with any standards and
guidelines AILIC develops and communicates to AAG. In performing any
Services hereunder, AAG shall at all times act in a manner reasonably
calculated to be in, or not opposed to, the best interests of AILIC. AAG
shall have no liability for any action taken or omitted by it in
furnishing Services and Facilities under this Agreement, in good faith and
without gross negligence or willful misconduct.
(c) CONTROL. The performance of Services by AAG for AILIC
pursuant to this Agreement shall in no way impair the absolute control of
the business and operations of AAG or AILIC by their respective Boards of
Directors. AAG shall act hereunder so as to assure the separate operating
identity of AILIC as required pursuant to the laws of the State of Ohio.
2. SERVICES. The performance of services by AAG under this
Agreement with respect to the business and operations of AILIC shall at
all times be subject to the direction and control of the Board of
Directors of AILIC.
- 2 -
<PAGE>
Subject to the foregoing and to the terms and conditions of this
Agreement, AAG shall provide to AILIC the Services set forth below.
(a) POLICY ADMINISTRATION. Under the general supervision of
the Board of Directors of AILIC, AAG shall provide all services in
connection with policy administration and policyholder services including:
policy issuance, premium processing, loan processing, surrender and
annuity processing and policyholder services.
(b) ACCOUNTING AND AUDITING. Under the general supervision
of the Board of Directors of AILIC, AAG shall provide the following
accounting services: preparation and maintenance of the financial
statements and reports including annual and quarterly statements on both
statutory and GAAP bases and tax returns, and processing of the related
financial records and transactions of AILIC. AAG shall also provide such
assistance as may be required with respect to tax and auditing services.
(c) ACTUARIAL. Under the general supervision of the Board of
Directors of AILIC, AAG shall provide all actuarial services needed in
connection with AILIC's business including policy design and development
and reserve valuation.
(d) MARKETING. Under the general supervision of the Board of
Directors of AILIC, AAG shall provide all marketing services needed in
connection with AILIC's business including market research, development of
marketing materials and campaigns and recruitment of agents.
(e) LEGAL. Under the general supervision of the Board of
Directors of AILIC, AAG shall provide all legal services and compliance
services needed in connection with AILIC's business including company
licensing, product approval and other regulatory matters.
(f) ADMINISTRATIVE AND OTHER REGULATORY MATTERS. Under the
general supervision of the Board of Directors of AILIC, AAG shall provide
all administrative and regulatory services needed in connection with
AILIC's business.
(g) CORPORATE MATTERS. Under the general supervision of the
Board of Directors of AILIC, AAG shall provide services with respect to
general corporate matters involving AILIC.
(h) POLICY MATTERS. Under the general supervision of the
Board of Directors of AILIC, AAG shall provide all services in connection
with the development of policies and products to be marketed by AILIC.
(i) DATA PROCESSING AND COMPUTER EQUIPMENT. Under the general
supervision of the Board of Directors of AILIC, AAG shall provide
telecommunications services and electronic data processing services,
Facilities and integration, including software programming and
documentation and hardware utilization.
- 3 -
<PAGE>
3. CHARGES. AILIC shall not be charged by AAG for the Services and
Facilities provided by AAG until such time as AILIC becomes an operating
entity issuing annuity contracts. All expenses incurred prior to such time
in the development of the annuity contracts shall be borne by AAG under
the general supervision of the Board of Directors of AILIC.
After such time, the charge to AILIC for such Services and
Facilities shall be at a rate as mutually agreed upon plus a reasonable
charge for direct overhead, the amount of such charge for overhead to be
agreed upon by the parties from time to time and reported annually.
The bases for determining such charges for Services and
Facilities to AILIC shall be those used by AAG for internal cost
distribution including, where appropriate, Activity Based Costing records.
Such bases shall be modified and adjusted by mutual agreement where
necessary or appropriate to reflect fairly and equitably the actual
incidence of cost incurred by AAG and/or SUBCONTRACTORS on behalf of
AILIC.
4. PAYMENT. AAG and/or SUBCONTRACTORS shall submit to AILIC within
thirty (30) days of the end of each calendar month a written statement of
the amount estimated to be owed by AILIC for Services and the use of
personnel or Facilities pursuant to this Agreement in that calendar month
and AILIC shall pay to the party rendering the statement within thirty
(30) days following receipt of such written statement the amount set forth
in the statement.
Within thirty (30) days after the end of each calendar quarter,
AAG and/or SUBCONTRACTORS will submit to AILIC a detailed written
statement of the charges due from AILIC to AAG and/or SUBCONTRACTORS in
the preceding calendar quarter, including charges not included in any
previous statements, and any balance payable as shown in such statement
shall be paid within fifteen (15) days following receipt of such written
statement by AILIC.
5. ACCOUNTING RECORDS AND DOCUMENTS. AAG and/or SUBCONTRACTORS
shall be responsible for maintaining full and accurate accounting records
of all Services rendered and Facilities used pursuant to this Agreement
and such additional information as AILIC may reasonably request for
purposes of its internal bookkeeping and accounting operations. The
accounting records to be maintained by AAG shall include any records
required to be maintained by AILIC under applicable laws. AAG and/or
SUBCONTRACTORS shall keep such accounting records insofar as they pertain
to the computation of charges hereunder available at its principal offices
for audit, inspection and copying by AILIC or any governmental agency
having jurisdiction over AILIC during all reasonable business hours. With
respect to accounting and statistical records prepared by AAG by reason of
its performance under this Agreement, summaries of such records shall be
delivered to AILIC within thirty (30) days from the end of the month to
which the records pertain.
- 4 -
<PAGE>
6. OTHER RECORDS AND DOCUMENTS. All books, records, and files
established and maintained by AAG and/or SUBCONTRACTORS by reason of its
performance under this Agreement which, absent this Agreement, would have
been held by AILIC shall be deemed the property of AILIC, and shall be
subject to examination by AILIC and persons authorized by it at all times,
and shall be delivered to AILIC at least quarterly. With respect to
original documents other than those provided for in Section 5 hereof which
would otherwise be held by AILIC and which may be obtained by AAG in
performing under this Agreement, AAG shall deliver such documents to AILIC
within thirty (30) days of their receipt by AAG except where continued
custody of such original documents is necessary to perform hereunder
7. LICENSING. AAG shall be responsible for obtaining any licenses
or permits needed to provide the services described herein and shall be
responsible for providing personnel who have any required license or
permit.
8. RIGHT TO CONTRACT WITH THIRD PARTIES. Nothing herein shall be
deemed to grant AAG an exclusive right to provide Services to AILIC, and
AILIC retains the right to contract with any third party, affiliated or
unaffiliated, for the performance of Services or for the use of Facilities
as are available to or have been requested by AILIC pursuant to this
Agreement. Similarly, AAG retains the right to contract with any third
party, affiliated or unaffiliated, to perform services or to provide
facilities, identical or similar to those being performed or provided
herein.
9. TERMINATION AND MODIFICATION. This Agreement shall remain in
effect until terminated by either AAG or AILIC upon giving thirty (30)
days or more advance written notice, provided that AILIC shall have the
right to elect to continue to receive data processing Services and/or to
continue to utilize data processing Facilities and related software for up
to one year from the date of such notice. Upon termination, AAG shall
promptly deliver to AILIC all books and records that are, or are deemed by
this Agreement to be, the property of AILIC.
10. SETTLEMENT ON TERMINATION. No later than ninety (90) days after
the effective date of termination of this Agreement, AAG shall deliver to
AILIC a detailed written statement for all charges incurred and not
included in any previous statement to the effective date of termination.
The amount owned hereunder shall be due and payable within thirty(30) days
of receipt of such statement.
11. EFFECTIVE DATE. This Agreement shall become effective upon the
later of (i) the date hereof, or (ii) the receipt of any required approval
of the Ohio Department of Insurance or the expiration of any waiting
period provided for by the laws or regulations of the State of Ohio.
12. ASSIGNMENT. This Agreement and any rights pursuant hereto shall
not be assignable by either party hereto, except as set forth herein or by
operation of law. Except as and to the extent specifically provided in
this Agreement, nothing in this Agreement, expressed or implied, is
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<PAGE>
intended to confer on any person other than the parties hereto, or their
respective legal successors, any rights, remedies, obligations or
liabilities, or to relieve any person other than the parties hereto, or
their respective legal successors, from any obligations or liabilities
that would otherwise be applicable. The covenants and agreements
contained in this Agreement shall be binding upon, extend to and inure to
the benefit of the parties hereto, their, and each of their, successors
and assigns respectively.
13. GOVERNING LAW. This Agreement is made pursuant to and shall be
governed by, interpreted under, and the rights of the parties determined
in accordance with, the laws of the State of Ohio.
14. ARBITRATION. Any unresolved difference of opinion between the
parties arising out of or relating to this Agreement, or the breach
thereof, except as provided in Section 3, shall be settled by arbitration
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association and the Expedited Procedures thereof, and judgment
upon the award rendered by the Arbitrator may be entered in any Court
having jurisdiction thereof. The arbitration shall take place in
Cincinnati, Ohio.
15. NOTICE. All notices, statements or requests provided for
hereunder shall be deemed to have been duly given when delivered by hand
to an officer of the other party, or when deposited with the U.S. Postal
Service, as certified or registered mail, postage prepaid, addressed or to
such other person or place as each party may from time to time designate
by written notice sent as aforesaid.
If to AAG:
AMERICAN ANNUITY GROUP, INC.
250 East Fifth Street, 10th Floor
Cincinnati, OH 45202
Attention: General Counsel
Phone Number (513) 333-5515
Fax Number (513) 357-3397
If to AILIC:
ANNUITY INVESTORS LIFE INSURANCE COMPANY
250 East Fifth Street, 10th Floor
Cincinnati, OH 45202
Attention: General Counsel
Phone Number (513) 333-5515
Fax Number (513) 357-3397
16. ENTIRE AGREEMENT. This Agreement, together with such Amendments
as may from time to time be executed in writing by the parties,
constitutes the entire Agreement between the parties with respect to the
subject matter hereof.
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<PAGE>
In witness whereof, the parties hereunto set their hands as of
the date first above written.
AMERICAN ANNUITY GROUP, INC.
By: /s/ Mark F. Muething
_____________________________
Its: Senior Vice President
ANNUITY INVESTORS LIFE INSURANCE
COMPANY, INC.
By: /s/ Mark F. Muething
_____________________________
Its: Senior Vice President
- 7 -
<PAGE>
EXHIBIT (8)(g)
AGREEMENT
THIS AGREEMENT made this 2nd day of February, 1995 by and among
AAG SECURITIES, INC. ("AAG Securities"), AAG INSURANCE AGENCY, INC. ("AAG
Agency") and such other subsidiaries and affiliates of AAG Agency which
may from time-to-time become a party to this Agreement.
WHEREAS, AAG Securities is a member of the National Association
of Securities Dealers, Inc. ("NASD") and registered as a broker-dealer in
various jurisdictions;
WHEREAS, AAG Securities has registered representatives who have
the requisite licenses to sell both securities and insurance products;
WHEREAS, AAG Agency and certain subsidiaries are licensed as life
insurance agencies in various jurisdictions;
WHEREAS, AAG Securities and AAG Agency are both wholly-owned
subsidiaries of American Annuity Group, Inc.; and
WHEREAS, AAG Securities and AAG Agency desire to cooperate in
connection with the marketing and sale of variable annuities.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants contained herein, the parties agree as follows:
1. Parties to Agreements. AAG Securities and AAG Agency may
from time-to-time mutually decide that it is in their mutual best
interests to enter into agreements with issuers of variable annuity
products to become agents for such issuers. Any selling agreement or
general agent agreement to be entered into with any such issuer shall be
executed by AAG Securities and AAG Agency or one of its subsidiaries which
is properly licensed as a life insurance agency in the appropriate
jurisdiction.
2. Agents. Only those individuals who are licensed with
both AAG Securities and AAG Agency or one of its subsidiaries will be
permitted to market, sell or service variable annuities through AAG
Securities or AAG Agency or one of its subsidiaries. Individuals who are
licensed with the appropriate entities may market, sell and service only
those variable annuities which are subject to a selling agreement or
general agent agreement as to which AAG Securities and AAG Agency or one
of its subsidiaries are parties.
3. Licensing Files. AAG Securities shall be responsible for
maintaining licensing files for all individuals who are licensed with AAG
Securities and AAG Agency or one of its subsidiaries to permit the
marketing, sale and servicing of variable annuities.
4. Supervision. In each jurisdiction in which the parties
hereto intend to market variable annuities, AAG Securities and AAG Agency
or one of its subsidiaries shall designate a person to be responsible for
supervision of all variable annuity marketing. Such individual must be
<PAGE>
(i) an NASD registered principal of AAG Securities, and ii) licensed with
AAG Agency or one of its subsidiaries to sell variable annuities.
5. Additional Duties. AAG Securities shall also perform the
duties set forth on Exhibit "A" attached hereto.
6. Commissions. All net dealer commissions earned on the
sale of variable annuity contracts shall be the property of AAG Agency or
one of its subsidiaries. For purposes of the foregoing, "net dealer
commissions" shall mean all commissions paid by the issuer of the contract
that remain after all commissions have been paid to properly licensed
agents pursuant to agreements among that agent, AAG Securities and AAG
Agency or one of its subsidiaries.
7. Payment of Commissions. AAG Securities shall serve as
the agent for the payment of all commissions on variable annuities sold
pursuant to this Agreement. AAG Securities shall disburse such amounts
and invoice AAG Agency or one of its subsidiaries for the amounts paid.
AAG Agency or one of its subsidiaries agrees to promptly reimburse AAG
Securities for the commissions disbursed.
8. Accounting. All accounting for the commissions earned on
variable annuities sold pursuant to this Agreement shall be done in
accordance with all applicable state and federal laws and regulations and
the rules of the NASD.
9. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio.
10. Additional Parties. From time-to-time, subsidiaries of
AAG Agency may become parties to this Agreement by executing an Addendum
agreeing to be bound by the provisions hereof.
IN WITNESS WHEREOF, the parties have hereunto set their hands as
of the date first above written.
AAG SECURITIES, INC.
BY: /s/ Mark F. Muething
ITS: Senior Vice President
AAG INSURANCE AGENCY, INC.
BY: /s/ Mark F. Muething
ITS: Senior Vice President
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<PAGE>
EXHIBIT A
. AAG Securities will operate and be responsible for all securities
services provided in connection with the sale of insurance
products.
. AAG Securities will be responsible for the control and
supervision of all agents selling insurance securities under this
arrangement.
. AAG Securities will be responsible for training, controlling,
supervising and shall assume responsibility for all securities
activities of agents selling insurance securities under this
arrangement.
. AAG Securities will conduct periodic audits of agents selling
securities under this arrangement to ensure that they are in
compliance with AAG Securities' operating procedures and the
federal securities law.
. AAG Securities will approve and assume responsibility for any
advertising or promotional materials pertaining to insurance
securities prior to distribution to ensure that these materials
are in compliance with federal securities laws and the rules of
the NASD.
. AAG Securities will comply with all statutory and regulatory
requirements of the federal securities laws and the rules of the
NASD in connection with the sale of insurance securities.
. AAG Securities will ensure that all its registered
representatives comply with all statutory and regulatory
requirements of the federal securities laws and the rules of the
NASD that are applicable to registered representatives.
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<PAGE>
EXHIBIT (8)(h)
INVESTMENT SERVICES AGREEMENT
-----------------------------
THIS INVESTMENT SERVICES AGREEMENT ("Agreement"), dated and
effective as of November 28, 1995 between ANNUITY INVESTORS LIFE INSURANCE
COMPANY, an Ohio corporation ("Company"), and AMERICAN ANNUITY GROUP,
INC., a Delaware corporation ("American").
WHEREAS, Company seeks to obtain information and advice with
respect to the investment of its assets; and
WHEREAS, American, utilizing its own employees along with
services provided by its affiliate, American Money Management ("AMM"), is
willing and able to supply such investment services pursuant to the terms
and conditions set forth below;
NOW, THEREFORE, for the consideration herein stated, the parties
agree as follows:
1. INVESTMENT SERVICES.
1 American shall furnish investment services to Company,
which services shall include the following:
.1 to counsel and advise Company in connection with
the formulation of investment programs and strategies designed to
accomplish Company's investment objectives; and
.2 to manage the investment of Company's portfolios
of Invested Assets (as later defined) in accordance with investment
policies, objectives, directions and guidelines established by Company, as
set forth in Section 1.3 below, and, in connection therewith, to have full
discretion and authority, without prior consultation or prior approval, to
buy, sell and otherwise trade in stocks, bonds and other securities or
assets and take such other actions which American shall deem requisite,
appropriate or advisable.
2 Custody and control of the securities and all other
assets comprising Company's investment portfolio shall at all times be
subject to the direction and control of Company, acting through its Board
of Directors or an appropriate committee thereof. All purchases and sales
of securities shall be in the name of Company, and all certificates or
other instruments representing its investments shall be held by Company or
in accounts at depository institutions designated by Company or in book
form where appropriate. Such securities will be held in accounts
segregated from those of American or its affiliates.
3 American agrees that the investment services it furnishes
will be in accordance with the general, investment policies, objectives
and guidelines (collectively, "Guidelines") submitted by American to
<PAGE>
Company and approved by the Board of Directors of Company or an
appropriate committee of the Board of Directors of Company.
4 The Company shall at all times keep American fully
informed as to the funds available, or to become available, for
investment, and generally as to its financial condition. The Company
shall furnish American with copies of financial statements and with other
information with regard to its affairs, as American may from time to time
request.
5 Notwithstanding Section .1 above, American shall not
(i) invest any of the Invested Assets in securities of American or any of
its affiliates or any entity controlled by any of them, (ii) cause Company
to purchase any securities from, or sell any securities to, American or
any of its affiliates or any entity controlled by any of them or (iii)
invest any of such Invested Assets in any investment opportunity which was
previously made available to and declined by American, in each case
without first obtaining the approval of the Board of Directors of the
Company or a appropriate Committee thereof.
6 For purposes of this Agreement, "Invested Assets" shall
mean bonds, stocks (common and preferred), short term investments and
similar invested assets carried on the Company's statutory convention
statements on Schedules BA, DA and D as admitted assets as permitted by
applicable law.
2. PURCHASE AND SALE OF SECURITIES.
American shall place all orders for the purchase and sale of
portfolio securities for Company accounts with brokers or dealers selected
by American and shall seek to execute portfolio transactions on terms
which are advantageous to Company in selecting brokers or dealers to
execute transactions. American shall not be obligated to solicit
competitive bids or seek the lowest available commission cost.
3. OTHER SERVICES; REPORTS AND RECORDS.
1 American shall maintain adequate records relating to the
furnishing of investment services under this Agreement, including those
with respect to the acquisition and disposition of securities, and shall
provide Company with all reports and documentation necessary for proper
accounting and regulatory reporting. American shall provide to Company
such oral or written reports as to its services provided under this
Agreement as Company shall reasonably require.
2 All records maintained pursuant to this Agreement shall
be deemed the property of Company and shall be subject to examination by
Company and by persons authorized by it, or by governmental authorities,
at all times upon reasonable notice. Except as expressly authorized in
this Agreement or directed by Company in writing, American shall keep
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confidential such records and other information obtained by reason of this
Agreement. Upon termination of this Agreement, American shall promptly
return all such records to Company.
4. INVESTMENT FEES; EXPENSES.
1 In full compensation and consideration for the
performance of its obligations hereunder, Company shall pay to American an
annual fee equal to .15% of the statutory carrying value of Invested
Assets. The fee paid by the Company shall not in any case exceed the
actual cost of the services provided by American. In addition, American
shall be entitled to reimbursement for the reasonable fees and expenses of
its outside legal counsel for necessary legal services rendered to
American in connection with the performance of its obligations hereunder.
All such fees and expenses shall be paid by Company. Payments due
hereunder shall be computed by American and paid by Company on a quarterly
basis measured as of the end of the preceding calendar quarter based on
the statutory carrying value of Invested Assets at such date. The
quarterly portion of the fee shall be billed within 30 days after the end
of each calendar quarter or portion thereof in which services are rendered
under this Agreement and paid within 10 days after receipt of the bill.
2 American shall furnish at its own expense necessary
executive and other personnel for providing investment services to Company
hereunder, including personnel to perform clerical, bookkeeping,
accounting and other office functions. Company shall be responsible for
the expenses of (a) brokerage commissions, issue and transfer taxes and
other costs in connection with securities transactions to which Company is
a party, including any portion of such commissions attributable to
research and brokerage services, (b) taxes payable by Company to federal,
state and other governmental agencies, and (c) custodial fees and
expenses.
5. NON-EXCLUSIVITY OF SERVICES.
The services of American to be provided hereunder are not to be
deemed exclusive and American shall be free to provide similar services
for its own account and the accounts of other affiliates, provided that
such services do not materially interfere with services to be rendered
hereunder.
6. SUBCONTRACTING.
Company acknowledges that American intends to subcontract with
American Money Management Corporation to provide a portion of the services
to be rendered hereunder. The arrangement with American Money Management
Corporation to provide those services shall not relieve American of any
liability or responsibility hereunder and any cost or expense of obtaining
such services shall be the sole responsibility of American.
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<PAGE>
7. LIABILITY; INDEMNIFICATION.
1 Neither American nor any of its directors, officers or
employees or other persons affiliated with American shall have any
liability hereunder for any act, omission, misstatement or error in
judgment in the course of, or in connection with, providing investment
advisory services under this Agreement, or for any losses that may be
sustained from such investment advisory services. Company shall indemnify
and hold harmless American and its directors, officers, employees and
other affiliated persons from and against any and all liability, claims
and damages arising from or in connection with providing services
hereunder; provided, however, that the foregoing shall not relieve
American from liability for negligence, gross negligence or willful
misfeasance in providing services under this Agreement.
2 As to all other services provided by American hereunder,
neither American nor any of its directors, officers or employees or other
persons affiliated with American shall have any liability hereunder for
any act, omission, misstatement or error in judgment in the course of, or
in connection with, providing such other services, or for any losses that
may be sustained from such other services, and Company shall indemnify and
hold harmless American and its directors, officers, employees and other
affiliated persons from and against any and all liability, claims and
damages arising from or in connection with providing such other services
hereunder; provided, however, that the foregoing shall not relieve
American from liability for negligence, gross negligence or willful
misfeasance in providing such other services.
8. TERMINATION; RENEGOTIATION.
1 This Agreement shall remain in effect until terminated by
any party thereto at any time upon ninety (90) days written notice to the
other party's normal business address. Upon termination of this
Agreement, Company shall pay pro rata any investment fees due for any
portion of a calendar quarter within ten (10) days following the date of
termination.
2 This Agreement shall be subject to renegotiations upon
the request of either party at the end of each three (3) year period
during which this Agreement continues in effect. The party requesting
renegotiation shall provide written notice thereof to the other party's
normal business address during the thirty (30) day period preceding the
end of any three (3) year period. If such renegotiations result in an
Agreement which is unsatisfactory to Company, it shall be entitled to
terminate this Agreement in accordance with the terms hereof.
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<PAGE>
9. NOTICES.
Notices or other writings given or sent under or pursuant to this
Agreement shall be in writing and be deemed to have been given or sent if
delivered to the party at its address listed below in person or by telex
or telecopy or within two (2) days of mailing if mailed postage prepaid to
such address. The addresses of the parties are:
Annuity Investors Life Insurance Company
250 East Fifth Street
Cincinnati, Ohio 45202
Attn: General Counsel
with a copy to:
American Annuity Group, Inc.
250 East Fifth Street
Cincinnati, Ohio 45202
Attn: General Counsel
Each party may change its address by giving notice as herein
required.
10. SOLE INSTRUMENT.
This instrument constitutes the sole and only agreement of the
parties hereto relating to the subject matter hereof and correctly sets
forth the rights, duties, and obligations of each party to the other as of
its date.
11. WAIVER OR MODIFICATION.
No waiver or modification of this Agreement shall be effective
unless reduced to a written document signed by the party to be charged.
12. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio.
13. ASSIGNMENT.
No party to this Agreement shall have the right to sell,
transfer, delegate, or assign this Agreement or any of its rights or
duties hereunder to any person, firm or corporation at any time during the
term hereof, and any proposed assignee shall acquire no rights nor be able
to assume any obligations unless the written consent of the other party to
this Agreement is given before such assignment or delegation takes place.
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<PAGE>
However, subject to this paragraph, this Agreement binds and inures to the
benefit of the parties, their successors and assigns.
14. COMPLIANCE WITH APPLICABLE LAW. This Agreement shall be
performed in accordance with the requirements of the Securities Act of
1933, Securities Exchange Act of 1934, Investment Company Act of 1940,
Investment Advisors Act of 1940 and the applicable rules and regulations
of the Securities and Exchange Commission promulgated thereunder, to the
extent that any of the foregoing are applicable to the subject matter of
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of November 28, 1995, effective for all purposes as of such date for
services rendered subsequent to November 28, 1995.
ANNUITY INVESTORS LIFE INSURANCE
COMPANY
BY: /s/ Mark F. Muething
____________________________
Title: Senior Vice President
AMERICAN ANNUITY GROUP, INC.
BY: /s/ Mark F. Muething
____________________________
Title: Senior Vice President
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EXHIBIT (9)
AAG Securities, Inc.
A Subsidiary of American Annuity Group, Inc.
December 15, 1995
Annuity Investors Life Insurance Company
250 East Fifth Street
Cincinnati, Ohio 45202
Gentlemen:
This opinion is provided in connection with the Registration Statement on
Form N-4 for the Annuity Investors Variable Account A of which Annuity
Investors Life Insurance Company ("AILIC") is the Depositor. The
Registration Statement has been filed with the Securities and Exchange
Commission for the purpose of registering variable annuity contracts
issued by AILIC and interests in the Annuity Investors Variable Account A
under such variable annuity contracts.
I have examined the Articles of Incorporation and bylaws of AILIC, minutes
of meeting of its Board of Directors and other records, and pertinent
provisions of the Ohio insurance laws, together with such other documents
as I have deemed appropriate. Based on the foregoing it is my opinion
that:
1. AILIC is duly organized and validly existing as an
insurance company under the laws of the State of Ohio.
2. Annuity Investors Variable Account A has been validly
created as Separate Account in accordance with the laws
of the State of Ohio.
3. AILIC has the legal power and authority to create and
issue the variable annuity contracts which are
administered within and by means of the Annuity Investors
Variable Account A.
4. The variable annuity contracts to be sold pursuant to the
Registration Statement, when issued, will represent
binding obligations of AILIC in accordance with their
terms, provided such contracts are issued for the
consideration set forth therein and evidenced by
appropriate policies and certificates.
<PAGE>
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Mark F. Muething
--------------------
Mark F. Muething
250 East Fifth Street, Cincinnati, Ohio 45202
Mailing Address: P.O. Box 357, Cincinnati, Ohio 45201-0357
(800) 438-3398 or (513) 333-6030
Fax: (513) 333-6050
Member NASD
