-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, POA1taijMo+yATcuT+NfH2Ky8nKI2O6aZPM7QSV3FLFP+4Xw/Jkca9EFD67EzEQ3 u++GzzXWD+jJzpdNRxq34Q== 0000949377-97-000005.txt : 19970124 0000949377-97-000005.hdr.sgml : 19970124 ACCESSION NUMBER: 0000949377-97-000005 CONFORMED SUBMISSION TYPE: S-1 PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19970123 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PHL VARIABLE SEPARATE ACCOUNT MVA1 CENTRAL INDEX KEY: 0001031223 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-1 SEC ACT: 1933 Act SEC FILE NUMBER: 333-20277 FILM NUMBER: 97509761 BUSINESS ADDRESS: STREET 1: C/O PHOENIX HOME LIFE MUTUAL INSURANCE C STREET 2: ONE AMERICAN ROW CITY: HARTFORD STATE: CT ZIP: 06116 BUSINESS PHONE: 8604035788 MAIL ADDRESS: STREET 1: ONE AMERICAN ROW STREET 2: C/O PHOENIX HOME LIFE MUTUAL INSURANCE C CITY: HARTFORD STATE: CT ZIP: 06116 S-1 1 MVA REGISTRATION STATEMENT ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 PHL VARIABLE INSURANCE COMPANY ------------------------------ (Exact name of registrant as specified in its charter) Connecticut - ------------------ ---------------------- ------------------- (State or other (Primary Standard (I.R.S. Employer jurisdiction of Industrial Identification incorporation or Classification Number) organization) Code Number) ONE AMERICAN ROW HARTFORD, CT 06102-5056 (800) 447-4312 ----------------------------------------------------------------- (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) DONA D. YOUNG, ESQ. PHL VARIABLE INSURANCE COMPANY ONE AMERICAN ROW HARTFORD, CT 06102-5056 (860) 403-5967 ----------------------------------------------------------------- (Name, address, including zip code, and telephone number, including area code, of agent for service) Approximate date of commencement of proposed sale to the public: ______________ If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of this earlier effective registration statement for the same offering. [ ] __________ If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act Registration statement number of the earlier effective registration statement for the same offering. [ ] __________ If the delivery of the Prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] ================================================================================ CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------ Title of each class Proposed Proposed maximum of securities to be Amount to be maximum offering aggregate offering Amount of registered registered price per unit price registration fee - ------------------------------------------------------------------------------------------------------ Participating * * $50,000,000 $15,151.52 Interests in Market Value Adjustment Account under Variable Annuity Contract
*The maximum aggregate offering price is estimated solely for the purpose of determining the registration fee. The amount to be registered and the proposed maximum offering price per unit are not applicable in that these contracts are not issued in predetermined amounts or units. The Registrant hereby amends this Registration Statement on such date as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. PHL VARIABLE INSURANCE COMPANY CROSS REFERENCE SHEET PURSUANT TO REGULATION S-K, ITEM 501(B)
FORM S-1 ITEM NUMBER CAPTION HEADING IN PROSPECTUS -------------------- ----------------------------- 1. Forepart of the Registration Statement and Outside Front Cover Page of Prospectus............................... Outside Front Cover 2. Inside Front and Outside Back Pages of Prospectus.................... Inside Front Cover 3. Summary Information, Risk Factors and Ratio of Fixed Charges......... Product Description 4. Use of Proceeds...................................................... Investments by PHL Variable 5. Determination of Offering Price...................................... Not Applicable 6. Dilution............................................................. Not Applicable 7. Selling Security Holders............................................. Not Applicable 8. Plan of Distribution................................................. Distribution of Contracts 9. Description of Securities to be Registered........................... Product Description 10. Interests of Named Experts and Counsel............................... Not Applicable 11. Information with Respect to the Registrant........................... Description of the Business of PHL Variable; Directors and Officers of PHL Variable; Experts and Legal Proceedings; Financial Statements 12. Disclosure of Commission Position on Indemnification for Securities Act Liabilities....................................... Not Applicable
PROSPECTUS MARKET VALUE ADJUSTED GUARANTEED INTEREST ACCOUNT Offered through PHL Variable Accumulation Account Annuities issued by PHL VARIABLE INSURANCE COMPANY VARIABLE PRODUCTS OPERATIONS 101 MUNSON STREET GREENFIELD, MASSACHUSETTS 01301 TELEPHONE: (800) 447-4312 ------------------------- mailing address: PHOENIX VARIABLE PRODUCTS MAIL OPERATIONS P.O. BOX 8027 BOSTON, MASSACHUSETTS 02266-8027 This Prospectus describes PHL Variable Insurance Company's ("PHL Variable" or the "Company") Market Value Adjusted Guaranteed Interest Account (MVA). The MVA is available for use under the Company's deferred variable accumulation annuity contract (the "Contract"). The MVA is an account to which Contract Owners may allocate purchase payments or transfer accumulation value to and from, subject to the rules outlined in the Contract prospectus. As this Prospectus focuses on the operations and features of the MVA, an investor should carefully review the Contract prospectus. PHL Variable guarantees specified rates of interest for amounts allocated to the MVA for specified periods (Guarantee Period). The Guaranteed Rate offered will, in no event, be less than 3%. The assets supporting the Company's obligations based on allocations to the MVA are held in PHL Variable Separate Account MVA1 ("Separate Account MVA1"), which is a "non-unitized" separate account. Such obligations are based on the interest rates credited to allocations to the MVA and the terms of the Contract. These obligations do not depend on the investment performance of the assets in Separate Account MVA1. Separate Account MVA1 was established by the Company according to Connecticut law. Any partial or full surrenders or transfers from the MVA, before the end of a Guarantee Period, may be adjusted up or down by the application of the Market Value Adjustment. Any values allocated to the MVA that are applied to determine the annuity benefit before the end of the Guarantee Period also will be subject to the Market Value Adjustment. Accordingly, a Contract Owner may experience a negative investment return. The annuity benefits available under the Contract may be either fixed or variable amounts. The Contract Value before maturity will vary with the investment performance of the Sub-accounts of the PHL Variable Accumulation Account selected and amounts allocated to the Guaranteed Interest Account and the MVA. The amount of any variable annuity payments thereafter will fluctuate with the investment performance of the Sub-accounts of the PHL Variable Accumulation Account selected. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS PROSPECTUS MUST BE ACCOMPANIED BY THE PROSPECTUSES FOR A PHL VARIABLE ACCUMULATION ACCOUNT ANNUITY CONTRACT, THE PHOENIX EDGE SERIES FUND AND WANGER ADVISORS TRUST. THIS PROSPECTUS AND THE PROSPECTUSES FOR THE CONTRACT AND THE FUNDS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE. MAY 1, 1997 1 TABLE OF CONTENTS Heading Page SPECIAL TERMS.................................................................3 PRODUCT DESCRIPTION...........................................................3 The Nature of the Contract and the MVA.....................................3 Availability of the MVA....................................................3 The Market Value Adjusted Guaranteed Interest Account .....................3 Market Value Adjustment....................................................4 Setting the Guaranteed Rate................................................5 Application of the Market Value Adjustment on Withdrawals..................5 INVESTMENTS BY PHL VARIABLE...................................................5 DISTRIBUTION OF CONTRACTS.....................................................6 FEDERAL TAXATION DISCUSSION...................................................6 ACCOUNTING PRACTICES..........................................................6 DESCRIPTION OF THE BUSINESS OF PHL VARIABLE ..................................6 DIRECTORS AND OFFICERS OF PHL VARIABLE........................................6 EXPERTS.......................................................................7 LEGAL PROCEEDINGS.............................................................7 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE Any statement contained in a document incorporated by reference herein shall be deemed modified or superseded hereby to the extent that a statement contained in a later-filed document or herein shall modify or supersede such statement. Any statement so modified or superseded shall be deemed, except as so modified or superseded, to constitute a part of the Prospectus. The Company will furnish, without charge, to each person to whom a copy this Prospectus is delivered, upon the written or oral request of such person, a copy of the document referred to above which has been incorporated by reference in the Prospectus, other than exhibits to such document (unless such exhibits are specifically incorporated by reference in the Prospectus). Requests for such document should be directed to 800-447-4312. 2 SPECIAL TERMS - -------------------------------------------------------------------------------- As used in this Prospectus, the following terms mean: ACCOUNT: PHL Variable Accumulation Account. CONTINGENT DEFERRED SALES CHARGE: Surrender charges. CONTRACT: The deferred variable accumulation annuity contract issued by PHL Variable Insurance Company. CONTRACT VALUE: Prior to its maturity, the sum of the values under a Contract of all accumulation units held in the Sub-accounts of the Account plus the values held in the Guaranteed Interest Account and the Market Value Adjusted Guaranteed Interest Account. CURRENT RATE: The Guaranteed Rate currently in effect for amounts allocated to the Market Value Adjusted Guaranteed Interest Account, established from time to time for various durations. EXPIRATION DATE: The date on which the Guarantee Period ends. GUARANTEE PERIOD: The duration for which interest accrues at the Guaranteed Rate on amounts allocated to the Market Value Adjusted Guaranteed Interest Account. GUARANTEED INTEREST ACCOUNT (GIA): An allocation option under which premium amounts are guaranteed to earn a fixed rate of interest. Excess interest also may be credited, in the sole discretion of PHL Variable Insurance Company. GUARANTEED RATE: The effective annual interest rate PHL Variable uses to accrue interest on amounts allocated to the Market Value Adjusted Guaranteed Interest Account for a Guarantee Period. Guaranteed Rates are fixed at the time an amount is credited to the Market Value Adjusted Guaranteed Interest Account and remain level throughout the Guarantee Period. MARKET VALUE ADJUSTED GUARANTEED INTEREST ACCOUNT (MVA): An account that pays interest at a Guaranteed Rate if held to maturity. If such amounts are withdrawn before the end of the Guarantee Period, a Market Value Adjustment will be made. Assets allocated to the MVA are not part of the assets allocated to the Account or the general account of PHL Variable Insurance Company. MARKET VALUE ADJUSTMENT: An adjustment made to the amount that a Contract Owner will receive if money is withdrawn or transferred from the Market Value Adjusted Guaranteed Interest Account before the Expiration Date of its Guarantee Period. PHL VARIABLE: PHL Variable Insurance Company. WINDOW PERIOD: The 15-day period before and after the Expiration Date during which time any withdrawals or transfers from the MVA will not be subject to a Market Value Adjustment. PRODUCT DESCRIPTION - -------------------------------------------------------------------------------- THE NATURE OF THE CONTRACT AND THE MVA The investment option described in this Prospectus is a Market Value Adjusted Guaranteed Interest Account (MVA) available only under the flexible premium deferred variable annuity contract (the "Contract") offered by PHL Variable Insurance Company ("PHL Variable" or the "Company"). The Contract is described in detail in its prospectus. You should review the Contract prospectus with this Prospectus before deciding to invest in the Contract or allocate purchase payments to the MVA. The MVA currently provides four choices of interest rate Guarantee Periods: 3-year, 5-year, 7-year and 10-year. Purchase payments can be allocated to one or more of the available MVA Guarantee Period options, either at the time the payment is made or by transferring amounts held in the Sub-accounts of the PHL Variable Accumulation Account (the "Account"), the Guaranteed Interest Account or other available MVA options, anytime prior to Contract maturity. Generally, amounts allocated to an MVA option must be for at least $1,000. Amounts may be transferred to or from the MVA according to the Contract transfer rules. (See "The Accumulation Period - Transfers" of the Contract prospectus.) Allocations that remain in the MVA until the applicable Expiration Date will be equal to the amount originally allocated multiplied, on an annually compounded basis, by its Guaranteed Rate. A Market Value Adjustment will be made if amounts are withdrawn or transferred from the MVA before the Expiration Date. (See "The Market Value Adjusted Guaranteed Interest Account.") The Contract provides for the accumulation of values before maturity and for the payment of annuity benefits thereafter. A death benefit also is available under the Contract. Since MVA values are part of the Contract Value, earnings on allocations to the MVA will impact the values available at surrender, maturity or death. AVAILABILITY OF THE MVA The MVA is not available in all states. THE MARKET VALUE ADJUSTED GUARANTEED INTEREST ACCOUNT The MVA is available only during the accumulation phase of the Contract. The MVA option currently offers different Guarantee Periods, which provide the ability to earn interest at different Guaranteed Rates on all or part of the Contract Value. Each allocation has its own Guaranteed Rate and Expiration Date. Because the Company changes Guaranteed Rates periodically, amounts allocated to a Guarantee Period at different times may have varied Guaranteed Rates and Expiration Dates. The applicable Guaranteed Rate does not change during the Guarantee Period. The Guaranteed Rate may never be less than 3%. PHL Variable will notify you of the expiration of the Guarantee Period and of your available options within 30 days of the Expiration Date. You will have 15 days before and 15 days following the Expiration Date ("Window Period") to notify us of your election. During this Window Period, any withdrawals or transfers from the MVA will not be subject to a market value adjustment. Unless you elect to transfer funds to another Guarantee Period, Account, the Guaranteed Interest Account or elect to withdraw funds, we will begin another Guarantee Period of the same duration as the one just ended and credit interest at the then current rate for that new Guarantee Period. If you chose a Guarantee Period that is no longer available or your original Guarantee Period is no longer available, we will use the Guarantee Period with the next longest duration. To the extent permitted by law, we reserve the right, anytime, to offer Guarantee Periods that differ from those available at the time 3 your Contract was issued. Since Guarantee Periods may change, please contact Variable Products Operations to determine the current Guarantee Periods being offered. MARKET VALUE ADJUSTMENT Any withdrawal from your MVA will be subject to a Market Value Adjustment unless the effective date of the withdrawal is within 15 days before and after the end of a Guarantee Period. For this purpose, redemptions, transfers and maturity amounts are treated as withdrawals. The Market Value Adjustment will be applied to the amount being withdrawn after the deduction of any applicable Administrative Charge and before the deduction of any applicable Contingent Deferred Sales Charges (surrender charges). The Market Value Adjustment can be positive or negative. The amount being withdrawn after application of the Market Value Adjustment can be greater than or less than the amount withdrawn before the application of the Market Value Adjustment. A Market Value Adjustment will not be applied upon the payment of the Death Benefit. The Market Value Adjustment will reflect the relationship between the Current Rate (defined below) for the amount being withdrawn and the Guaranteed Rate. It is also reflective of the time remaining in the applicable Guarantee Period. Generally, if the Guaranteed Rate is lower than the applicable Current Rate, then the application of the Market Value Adjustment will result in a lower payment upon withdrawal. Conversely, if the Guaranteed Rate is higher than the applicable Current Rate, the application of the Market Value Adjustment will produce a higher payment upon withdrawal. The Market Value Adjustment which is applied to the amount being withdrawn is determined by using the following formula: Market Value Adjustment 1+i n/12 = Amount x [(----------) -1] 1+j+0.0025 where, Amount, is the amount being withdrawn from a given accumulated amount less any applicable administrative charges. i, is the Guaranteed Rate being credited to the amount subject to the Market Value Adjustment; and j, is the Current Rate for new deposits with a Guarantee Period equal to the number of years remaining in the current Guarantee Period, rounded up to the next higher number of complete years; and n, is the number of months rounded up to the next whole number from the date of the withdrawal or transfer to the end of the Guarantee Period. If the Company does not offer a Guarantee Period equal to the number of years remaining in the Guarantee Period, "j" will be determined by interpolation or extrapolation of the Guaranteed Rate for the Guarantee Periods then available. EXAMPLES The following examples illustrate how the Market Value Adjustment operates: EXAMPLE 1 $10,000 is deposited on January 1, 1997, into an MVA with a 5-year Guarantee Period. The Guaranteed Rate for this deposit amount is 5.50%. If, on January 1, 1999 (2 years after deposit), the full amount is taken from this MVA segment, the following amount is available: 1. The accumulated amount prior to application of Market Value Adjustment is: 2 $10,000 x (1.055) = $11,130.25 2. The Current Rate that would be applied on January 1, 1999 to amounts credited to a 3-year MVA segment is 6.50%. 3. The number of months remaining in the Guarantee Period (rounded up to next whole number) is 36. 4. The Market Value Adjustment equals $-386.43, and is calculated as follows: 1+0.055 36/12 $-386.43 = $11,130.25 x [(--------------) -1] 1+0.065+0.0025 The market value for the purposes of surrender on January 1, 1999 is therefore equal to $10,743.82 ($11,130.25 - $386.43). EXAMPLE 2 $10,000 is deposited on January 1, 1997, into an MVA with a 5-year Guarantee Period. The Guaranteed Rate for this amount is 5.50%. If, on January 1, 1999 (2 years from deposit), the full amount is taken from this MVA segment, the following amount is available: 1. The accumulated amount prior to application of Market Value Adjustment is: 2 $10,000 x (1.055) = $11,130.25 2. The Current Rate being applied on January 1, 1999 to amounts credited to a 3-year MVA segment is 4.50%. 3. The number of months remaining in the Guarantee Period (rounded up to next whole number) is 36. 4. The Market Value Adjustment equals $240.79, and is calculated as follows: 1+0.055 36/12 $+240.79 = $11,130.25 x [(--------------) -1] 1+0.045+0.0025 The market value for the purposes of surrender on January 1, 1999 is therefore equal to $11,371.04 ($11,130.25 + $240.79). THE ABOVE EXAMPLES ARE HYPOTHETICAL AND ARE NOT INDICATIVE OF FUTURE OR PAST PERFORMANCE. 4 SETTING THE GUARANTEED RATE PHL Variable determines Guaranteed Rates for current and future purchase payments, transfers or renewals. Although future Guaranteed Rates cannot be predicted, the Company guarantees that the Guaranteed Rate will never be less than 3% per annum. APPLICATION OF THE MARKET VALUE ADJUSTMENT ON WITHDRAWALS A Market Value Adjustment will apply if a withdrawal is made before the Expiration Date and outside the Window Period as described above. When a withdrawal is made for full or partial surrender, the Contract Value also may be reduced by a Contingent Deferred Sales Charge (surrender charge) according to the following schedule: SURRENDER CHARGE YEAR SINCE PAYMENT ASSESSED ------------------ -------- 1st 7% 2nd 6% 3rd 5% 4th 4% 5th 3% 6th 2% 7th 1% 8th None The company makes this adjustment for surrender charge since we make no deduction for sales charges when a purchase payment is made. The surrender charge is computed based on the date that the particular payment is received into the Contract. Purchase payments that remain on deposit for 7 complete years are not subject to surrender charges. Amounts allocated to the MVA however, continue to be subject to a Market Value Adjustment. For more information regarding the application of surrender charges, please consult the Contract prospectus. Please note that other charges also are imposed against the Contract including mortality and expense risk and administrative charges. For a more detailed explanation of applicable charges, please see the "Deductions and Charges" section of the Contract prospectus. INVESTMENTS BY PHL VARIABLE - -------------------------------------------------------------------------------- Assets of PHL Variable must be invested according to applicable state laws regarding the nature and quality of investments that may be made by life insurance companies and the percentage of their assets that may be committed to any particular type of investment. In general, these laws permit investments within specified limits and subject to certain qualifications, in federal, state and municipal obligations, corporate bonds, stock, real estate mortgages, real estate and other investments. Proceeds from the MVA will be deposited into Separate Account MVA1, which is a non-unitized separate account. Such proceeds are based on the interest rate we credit to MVA allocations and terms of the Contract. These proceeds do not depend on the investment performance of the assets in Separate Account MVA1. Separate Account MVA1 was established under Connecticut law. Under Connecticut law, all income, gains or losses of Separate Account MVA1 whether realized or not, must be credited to or charged against the amounts placed in Separate Account MVA1 without regard to other income, gains and losses of PHL Variable. The assets of the Separate Account may not be charged with liabilities arising out of any other business that the Company may conduct. Obligations under the Contracts are obligations of PHL Variable. There are no discreet units in Separate Account MVA1. No party with rights under any Contract participates in the investment gain or loss from assets belonging to Separate Account. Such gain or loss accrues solely to the Company. Phoenix retains the risk that the value of the assets in Separate Account MVA1 may drop below the reserves and other liabilities the Company must maintain. Should the value of the assets in Separate Account MVA1 drop below the reserve and other liabilities the Company must maintain in relation to the Contracts supported by such assets, the Company will transfer assets from its general account to Separate Account MVA1, conversely, if the amount the Company is maintaining is too much, the Company may transfer the excess to the general account. In establishing Guaranteed Rates, PHL Variable intends to take into account the yields available on the instruments in which it intends to invest the proceeds from the Contracts. The Company's investment strategy with respect to the proceeds attributable to the Contracts generally will be to invest in investment-grade debt instruments having durations tending to match the applicable Guarantee Periods. Investment-grade debt instruments in which the Company intends to invest the proceeds from the Contracts include: Securities issued by the United States Government or its agencies or instrumentalities, which issues may or may not be guaranteed by the United States Government. Debt securities which have an investment grade, at the time of purchase, within the four highest grades assigned by Moody's Investors Services, Inc. (Aaa, Aa, A or Bb), Standard & Poor's Corporation (AAA, AA, A or BBB) or any other nationally recognized rating service. Other debt instruments, including but not limited to, issues of or guaranteed by banks or bank holding companies and corporations, which obligations, although not rated by Moody's or Standard & Poor's are deemed by the Company's management to have an investment quality comparable to securities which may be purchased as stated above. While the foregoing generally describes the Company's investment strategy with respect to the proceeds attributable to the Contracts, the Company is not obligated to invest the proceeds attributable to the Contract according to any particular strategy, except as may be required by Connecticut and other state insurance law. DISTRIBUTION OF CONTRACTS - -------------------------------------------------------------------------------- Phoenix Equity Planning Corporation ("PEPCO") acts as the principal underwriter of the Contracts. Contracts may be purchased through representatives of W.S. Griffith & Company ("W.S. Griffith") licensed to sell PHL Variable Annuity Contracts. PEPCO and W.S. Griffith are registered as broker-dealers under the Securities Exchange Act of 1934 and are members of the National Association of Securities Dealers, Inc. (the "NASD"). PHL Variable, PEPCO and W.S. Griffith are 5 indirect wholly-owned subsidiaries of Phoenix Home Life Mutual Insurance Company. PEPCO enters selling agreements with other broker-dealers or entities registered under or exempt under the Securities Act of 1934 ("selling brokers"). The Contracts are sold through agents who are licensed by state insurance officials to sell the Contracts. These agents also are registered representatives of selling brokers or W.S. Griffith. Contracts with the MVA option are offered in states where PHL Variable has received authority to write modified guarantee annuity business and the MVA and the Contracts have been approved. The maximum dealer concession that a selling broker will receive for selling a Contract is 7.25%. Although the Glass-Steagall Act prohibits banks and bank affiliates from engaging in the business of underwriting securities, banking regulators have not indicated that such institutions are prohibited from purchasing variable annuity contracts upon the order and for the account of their customers. FEDERAL TAXATION DISCUSSION - -------------------------------------------------------------------------------- Please refer to "Federal Income Taxes" of the Contract prospectus for a discussion of the tax status of the Contract. ACCOUNTING PRACTICES - -------------------------------------------------------------------------------- The information presented below should be read with the audited financial statements and other information included elsewhere in this Prospectus. The financial statements and other financial information included in this Prospectus have been prepared in conformity with accounting practices of the National Association of Insurance Commissioners and the accounting practices prescribed or permitted by the Division of Insurance of the State of Connecticut ("statutory accounting practices"), which are currently considered in accordance with generally accepted accounting principles ("GAAP") for stock life insurance subsidiaries of a mutual life insurance company. The Financial Accounting Standards Board, which has no role in establishing regulatory accounting practices issued Interpretation 40, Applicability of Generally Accepted Accounting Principles to Mutual Life Insurance and Other Enterprises, and Statement of Financial Accounting Standards No. 120, Accounting and Reporting by Mutual Life Insurance Enterprises and by Insurance Enterprises for certain Long-Duration Participating Contracts. The American Institute of Certified Public Accountants, which also has no role in establishing regulatory accounting practices, issued Statement of Position 95-1, Accounting for Certain Insurance Activities of Mutual Life Insurance Enterprises. These pronouncements will require mutual life companies and their stock life insurance subsidiaries to modify their financial statements to continue to be in accordance with the GAAP, effective for 1996 financial statements. The manner in which policy reserves, new business acquisition costs, asset valuations and the related tax effects are recorded will change. The impact of these changes has not yet been determined. The financial statements included in this Prospectus have been on the basis as filed with regulatory authorities. DESCRIPTION OF THE BUSINESS OF PHL VARIABLE - -------------------------------------------------------------------------------- PHL Variable is a life insurance company and a wholly-owned subsidiary of Phoenix Home Life Mutual Insurance Company ("Phoenix"). The Company (formerly known as Dreyfuss Consumers Life) was purchased by Phoenix and its name was changed accordingly in 1994. The Company is an issuer of variable annuity contracts. The Company plans to obtain authority to sell variable annuity contracts in all states except New York, and as of December 1, 1996, it had obtained such authority in 42 states and the District of Columbia. The Company's Home Office is located in Hartford, Connecticut. The Company's principal administrative office is located at 101 Munson Street, Greenfield, Massachusetts. Functionally, the Company is part of Phoenix's operations and all administrative and operational services are provided by Phoenix. DIRECTORS AND OFFICERS OF PHL VARIABLE - -------------------------------------------------------------------------------- NAME POSITION WITH REGISTRANT Richard H. Booth Director and Executive Vice President Robert G. Chipkin Director Robert W. Fiondella Director, Chairman and President Joseph E. Kelleher Director and Senior Vice President Philip R. McLoughlin Director and Executive Vice President Charles J. Paydos Director and Executive Vice President David W. Searfoss Director, Executive President, Chief Financial Officer and Treasurer Simon Y. Tan Director and Senior Vice President Dona D. Young Director and Executive Vice President Robert G. Lautensack Senior Vice President Lisa-Lynn Bassi Vice President 5 EXPERTS - -------------------------------------------------------------------------------- The financial statements of PHL Variable Insurance Company as of December 31, 1996 have been examined by Price Waterhouse LLP, independent public accountants, whose reports are set forth herein, and the financial statements have been included upon the authority of said firm as experts in accounting and auditing. Price Waterhouse LLP, whose address is One Financial Plaza, Hartford, Connecticut, also provides other accounting and tax-related services as requested by PHL Variable from time to time. Legal matters involving federal securities laws in connection with the Contracts have been passed upon by Jorden Burt Berenson & Johnson LLP, Washington, D.C. Legal matters relating to the validity of the securities being issued have been passed upon by Richard J. Wirth, Counsel, Phoenix Home Life Mutual Insurance Company, Hartford, Connecticut. LEGAL PROCEEDINGS - -------------------------------------------------------------------------------- PHL Variable, the Account and PEPCO are not parties to any litigation that would have a material adverse effect upon the Account or the Contracts. 6 PHL VARIABLE INSURANCE COMPANY CONSOLIDATED FINANCIAL STATEMENTS [To be filed by Amendment] 7 PHL VARIABLE SEPARATE ACCOUNT MVA1 THE EFFECTIVE DATE OF THE PHL VARIABLE SEPARATE ACCOUNT MVA1 IS THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT, THEREFORE, FINANCIAL DATA IS NOT AVAILABLE. 8 PART II INFORMATION NOT REQUIRED IN A PROSPECTUS ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION Not applicable. ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 5.9 of the Connecticut Corporation Law & Practice, provides that a corporation may indemnify any director or officer of the corporation made, or threatened to be made, a party to an action or proceeding other than one by or in the right of the corporation to procure a judgment in its favor, whether civil or criminal, including an action by or in the right of any other corporation of any type or kind, by reason of the fact that he, his testator or intestate, served such other corporation in any capacity at the request of the indemnifying corporation. Article III Section 14 of the By-Laws of the Company provides: "Each Director, officer or employee of the Company, and his heirs, executors or administrators, shall be indemnified or reimbursed by the Company for all expenses necessarily incurred by him in connection with the defense or reasonable settlement of any action, suit or proceeding in which he is made a party by reason of his being or having been a Director, officer or employee of the Company, or of any other company which he was serving as a Director or officer at the request of the Company, except in relation to matters as to which such Director, officer or employee is finally adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of his duties as such Director, officer or employee. The foregoing right of indemnification or reimbursement shall not be exclusive of any other rights to which he may be entitled under any statute, by-law, agreement, vote of shareholders or otherwise." Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES Not applicable. ITEM 16. EXHIBITS 1 Underwriting Agreement. Incorporated by reference to Exhibit 3 of File No. 33-87376 Pre-Effective Amendment No. 1 to Form N-4 filed on July 20, 1995. 2 Plan of acquisition, reorganization, arrangement, liquidation or succession. Not applicable. 3 (i) Articles of Incorporation. Incorporated by reference to Exhibit 6(a) of File No. 33-87376 Registration Statement on Form N-4 filed on December 14, 1994. 3 (ii) By-Laws. Incorporated by reference to Exhibit 6(b) of File No. 33-87376 Registration Statement on Form N-4 filed on December 14, 1994. 4 Form of Variable Annuity Contract with MVA Rider. Filed herewith. 5 Opinion re legality. To be filed by amendment. 8 Opinion re tax matters. Not applicable. 9 Voting trust agreement. Not applicable. 10 Material contracts. Not applicable. 11 Statement re computation of per share earnings. Not applicable. 12 Statements re computation of ratios. Not applicable. 15 Letter re unaudited interim financial information. Not applicable. 16 Letter re change in certifying accountant. Not applicable. II-1 21 Subsidiaries of the registrant. Not applicable. 23.1 Consent of Price Waterhouse LLP. To be filed by amendment. 23.2 Consent of Counsel. To be filed by amendment. 24 Powers of attorney. Incorporated by reference to Exhibit 15 of File No. 33-87376 Post-Effective Amendment No. 1 to Form N-4 filed via Edgar on April 19, 1996 and Post-Effective Amendment No. 2 to Form N-4 filed via Edgar on September 13, 1996. 25 Statement of eligibility of trustee. Not applicable. 26 Invitation for competitive bids. Not applicable. 27 Financial Data Schedule. To be filed by amendment. ITEM 17. UNDERTAKINGS The undersigned registrant hereby undertakes: (1) To file, during any period in which offers of sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) Not applicable. ITEM 18. FINANCIAL STATEMENTS AND SCHEDULES To be filed by amendment. II-2 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Hartford, State of Connecticut, on this 23rd day of January, 1997. PHL Variable Insurance Company By____________________________________ *Robert W. Fiondella President Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the persons in the capacities indicated with PHL Variable Insurance Company on this 23rd day of January, 1997. Signature Title --------- ----- ________________________ Director *Richard H. Booth ________________________ Director *Robert G. Chipkin ________________________ Chairman of the Board and President *Robert W. Fiondella (Principal Executive Officer) ________________________ Director *Joseph E. Kelleher ________________________ Director *Philip R. McLoughlin ________________________ Director *Charles J. Paydos ________________________ Director, Executive Vice President, *David W. Searfoss Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) ________________________ Director *Simon Y. Tan /s/ Dona D. Young ________________________ Director Dona D. Young By:/s/ DONA D. YOUNG --------------------- Dona D. Young *DONA D. YOUNG, as Attorney-in-Fact pursuant to Powers of Attorney, copies of which are filed herewith. (See Exhibit 24.) EX-16.4 2 FORM OF VARIABLE ANNUITY CONTRACT WITH MVA RIDER EXHIBIT 16.4 Form of Variable Annuity Contract with MVA Rider PHL Variable Insurance Company Primary Annuitant: :Age and Sex Contract Number: :Contract Date Initial Premium: :Maturity Date Dear Contract Owner: Thank you for purchasing this annuity contract from PHL Variable Insurance Company. One of our corporate objectives is to ensure that you receive the benefits to which you are entitled. We agree to pay the benefits of this contract in accordance with its provisions. IT IS IMPORTANT TO US THAT YOU ARE SATISFIED WITH YOUR CONTRACT AND THAT IT MEETS YOUR FINANCIAL GOALS. IF FOR ANY REASON YOU ARE NOT SATISFIED WITH THIS CONTRACT, YOU MAY RETURN IT WITHIN 10 DAYS AFTER WE DELIVER IT TO YOU FOR A REFUND OF THE CONTRACT VALUE PLUS ANY CHARGES MADE UNDER THIS CONTRACT. IT MAY BE RETURNED TO EITHER THE AGENT THROUGH WHOM IT WAS PURCHASED OR TO US AT THE FOLLOWING ADDRESS: PHL Variable Insurance Company Variable Products Operations 101 Munson Street P.O. Box 942 Greenfield, MA 01302-0942 THE CONTRACT VALUE WILL BE DETERMINED AS OF THE NEAREST VALUATION DATE FOLLOWING RECEIPT OF THE RETURNED CONTRACT AT OUR VARIABLE PRODUCTS OPERATIONS. This contract provides for the payment of a 10-year period certain variable monthly life annuity. Other options are available and may be elected prior to the Maturity Date. The Contract Value will depend on the rate of interest credited to the Guaranteed Interest Account and the investment experience of the Sub-accounts. The annuity payments will be based on the Contract Value on the Maturity Date, the annuity purchase rates stated herein, and the investment experience of the Sub-accounts during the annuity payout period. Signed for PHL Variable Insurance Company at its Main Administrative Office: One American Row, Hartford, Connecticut 06115. Sincerely Yours, /s/ Dona D. Young /s/ Robert W. Fiondella Secretary Chief Executive Officer Registrar FLEXIBLE PREMIUM VARIABLE ACCUMULATION DEFERRED ANNUITY ALL VALUES AND BENEFITS BASED ON THE INVESTMENT EXPERIENCE OF THE SUB-ACCOUNTS OF THE SEPARATE ACCOUNT ARE VARIABLE AND NOT GUARANTEED AS TO DOLLAR AMOUNT. SEE PART 7 FOR A DESCRIPTION OF HOW THE CONTRACT VALUES ARE DETERMINED, AND PART 9 FOR A DESCRIPTION OF HOW THE DEATH BENEFITS ARE DETERMINED. D601 Non-Participating SCHEDULE PAGE Primary Annuitant: :Age and Sex Contract Number: :Contract Date Initial Premium: :Maturity Date Contingent Annuitant: Owner: Beneficiaries: As Stated in the Application or as Later Changed. Subsequent Premiums: FLEXIBLE Payment Intervals: FLEXIBLE SUB-ACCOUNT FEES Mortality and Expense Risk Fee on Contract Date: .00342% (BASED ON AN ANNUAL RATE OF 1.25%) Daily Administrative Fee: .00034% (BASED ON AN ANNUAL RATE OF 0.125%) Daily Tax Fee: 0.0000% OR SUCH GREATER AMOUNT AS MAY BE ASSESSED AS A RESULT OF A CHANGE IN TAX LAWS. Premium Tax: 0.000% of Each Premium Paid. Annual Administrative Fee: Up to $35 Transfer Charge: NONE Contingent Deferred Sales Charge: See Part 5 for a Description of How this Charge Is Determined. SUB-ACCOUNT ALLOCATION SCHEDULE D601 SCHEDULE PAGE (CONTINUED) Annuitant: :Contract Number SEPARATE ACCOUNT SUB-ACCOUNTS FUND: THE PHOENIX EDGE SERIES FUND MONEY MARKET The investment objective of the Money Market Sub-Account is to provide maximum current income consistent with Capital preservation and liquidity. GROWTH The investment objective of the Growth Sub-Account is to achieve intermediate and long-term growth of capital, with income as a secondary consideration. MULTI-SECTOR The primary investment objective of the Multi-Sector Sub-Account is to seek high current income. Capital growth as a secondary objective which will also be considered when consistent with the objective of high current income. TOTAL RETURN The investment objective of the Total Return Sub-Account is to realize as high a level of total rate of return over an extended period of time as is considered consistent with prudent investment Risk. INTERNATIONAL The investment objective of the International Sub-Account is to seek a high total return consistent with reasonable risk. The International Sub-account intends to invest primarily in an internationally diversified portfolio of equity securities. The International Portfolio provides a means for investors to invest a portion of their assets outside the United States. BALANCED The investment objective of the Balanced Sub-Account is to seek reasonable income, long-term capital growth and conservation of capital. The Balanced Sub-account intends to invest based on combined considerations of risk, income, capital enhancement and protection of capital value. REAL ESTATE The investment objective of the Real Estate Securities SECURITIES Sub-Account is to seek capital appreciation and income with approximately equal emphasis. It intends under normal circumstances to invest in marketable securities of publicly traded real estate investment trusts (REITs) and companies that operate, develop, manage and/or invest in real estate located primarily in the United States. STRATEGIC THEME The investment objective of the Strategic Theme Sub-Account is to seek long-term appreciation of capital by identifing securities benefiting from long-term trends present in the United States and abroad. The Strategic Theme Sub-Account intends to invest primarily in common stocks believed to have substantial potential for capital growth. FUND: WANGER ADVISORS TRUST WANGER U.S. The investment objective of the Wanger U.S. Small Cap SMALL CAP Sub-Account is to provide long-term growth. The Wanger U.S. Small Cap Sub-Account will invest primarily in a series that invests in securities of U.S. companies with a total common stockmarket cap of less than $1 billion. WANGER The investment objective of the Wanger International Small INTERNATIONAL Cap Sub-Account is to provide long-term growth. The Wanger SMALL CAP International Small Cap Sub-Account will invest primarily in a series that invests in securities of Non-U.S. companies with a total stockmarket cap of less than $1 billion. D601 SCHEDULE PAGE (CONTINUED) Annuitant: :Contract Number GUARANTEED INTEREST ACCOUNTS GUARANTEED The GIA with 1-year guarantee is accounted for as part of INTEREST ACCOUNT our General Account. We will credit interest daily on any WITH 1-YEAR amounts under this account at such rates as we shall GUARANTEE determine, but in event will the effective annual rate of (GIA) interest be less than 4%. At least once each month we will set the interest rate (GIA) that will apply new rates are set for deposits and transfers made to this account. That applicable rate will remain in effect for one year for any such deposits or transfers made to this account during that time. Upon expiry of the 1- year Guarantee Period, the new effective interest rate for the 1-year Guarantee Period will be the same as that which applies for new deposits to this account. This new rate also will remain in effect for a subsequent Guarantee Period of one year. We reserve the right to limit cumulative deposits made to this account during any one week period to no more than $250,000. No market value adjustment is applied to withdrawals from the GIA. MARKET VALUE The MVA provides four choices of interest rate Guarantee ADJUSTED Periods: 3-year, 5-year, 7-year and 10-year. The MVA is GUARANTEED accounted for as part of a non-unitized separate account. INTEREST ACCOUNT We will credit interest daily on any amounts held under (MVA) this account at such rates as we shall determine, but in no event will the effective annual rate of interest be less than 3%. At least once each month we will set interest rates that will apply for each of these Guarantee Periods until new rates are set for deposits and transfers made to each of these accounts. The applicable rate will remain in effect until the end of the Guarantee Period selected by you, the Contract Owner. Upon expiry of the selected Guarantee Period, unless you elect to transfer funds to another Guarantee Period or Sub-account, or elect to withdraw funds, we will begin another Guarantee Period of the same duration as the one that just ended, and will credit interest at the then current rate for that new Guarantee Period. If your original Guarantee Period is no longer available, or if you choose a Guarantee Period that is no longer available, we will use the Guarantee Period with the next longest duration. To the extent permitted by law, we reserve the right to discontinue Guarantee Periods and to offer other Guarantee Periods that differ from those available at the time your contract was issued. Any withdrawals or transfers from the MVA will be subject to a market value adjustment, except that funds may be withdrawn or transferred from this account without a market value adjustment in the 30-day Window Period from 15 days before to 15 days after the Guarantee Period expiry date. We reserve the right to limit cumulative deposits made to any one of these accounts during any 1-week period to not more than $250,000. D601 CONTRACT SUMMARY ABOUT THIS This summary briefly highlights some of the major contract SUMMARY provisions. Since this is only a summary, the detailed provisions of the contract will control. See those provisions for full information and any limits or restrictions that apply. A Table of Contents is provided to help you find specific provisions. Your contract is a legal contract between you and us. You should, therefore, READ YOUR CONTRACT CAREFULLY. Check the Schedule Page of this contract to make sure it reflects the premium payment allocation requested. Please call your agent or us any time you have questions about your contract. THE TYPE OF This contract provides for payment of a 10-year period certain CONTRACT variable monthly life annuity based on the value accumulated prior to the Maturity Date. The amount of each annuity payment will be based on the Contract Value on the Maturity Date, the annuity purchase rates stated herein, and the investment experience of the Sub-accounts during the annuity payout period. Other Annuity Payment Options are available. PREMIUM The values that accumulate under this contract prior to the PAYMENTS Maturity Date are based on the premium payments made, the rates ALLOCATED TO of interest credited on any premium payments allocated to the SUB-ACCOUNTS Guaranteed Interest Account, and the investment experience of the Sub-accounts within the Separate Account on any premium payments allocated to the Sub-accounts. Except for the Guaranteed Interest Account which is part of our General Account, the Sub-accounts are part of PHL Variable Insurance Company's Variable Accumulation Separate Account (VA Account) and have differing investment objectives as shown on the Schedule Page. We have the right to add additional Sub-accounts of the Separate Account subject to approval by the Securities and Exchange Commission and, where required, the insurance supervisory official of the state where this contract is delivered. Subject to the terms of this contract, you may transfer the Contract's Value between and among the various Sub-accounts and Guaranteed Interest Account. The VA Account is a Separate Account established by our company under Connecticut Law and is registered as a unit investment trust under the Investment Company Act of 1940. All income, gains and losses, realized and unrealized, of the VA Account are credited to or charged against the amounts placed in the VA Account without reference to other income, gains and losses of our General Account. The assets of the VA Account are owned solely by us and we are not a trustee with respect to such assets. These assets are not chargeable with liabilities arising out of any other business that we may conduct. We use the assets of the VA Account to buy shares of the Fund(s) identified on the Schedule Page of this contract according to your most recent allocation instruction on file with us at our Variable Products Operations. The Fund(s) are registered under the 1940 Act as an open-end, diversified management investment company. The Fund(s) have separate Series that correspond to the Sub-accounts of the VA Account. Assets of each Sub-account are invested in shares of the corresponding Fund Series. D601 Contract Summary This contract also contains a Guaranteed Interest Account to which premium payments may be allocated. The Guaranteed Interest Account is not part of the Separate Account. It is accounted for as part of our General Account. We will credit interest on the amount in the Guaranteed Interest Account at such rate(s) as provided under the terms of this contract. We reserve the right to add other Guaranteed Interest Accounts subject to approval (as required by some states) by the insurance supervisory official of states where this contract is delivered. WITHDRAWAL Subject to the terms of this contract, the Contract Value, less PRIVILEGE any applicable contingent deferred sales charge, may be withdrawn in whole or in part on or before the Maturity Date. After the Maturity Date, you may only withdraw from the remaining value under Variable Payment Options K or L, less any applicable contingent deferred sales charge. OTHER BENEFITS This contract provides for the payment of death proceeds in the event of the death of either the Owner or the Annuitant prior to the Maturity Date. The amount of the death proceeds will depend upon whether it is the Owner or the Annuitant whose death has occurred. The amount of the death proceeds is determined as described in Part 9 of this Contract. D601 Contract Summary Table of Contents Part Page - -------------------------------------------------------------------------------- 1. DEFINITIONS............................................................ 1 2. ABOUT THE CONTRACT..................................................... 3 Effective Date ........................................................ 3 Contract and Application .............................................. 3 Proof of Age and Survival ............................................. 3 Misstatement of Age or Sex ............................................ 3 Assignments ........................................................... 3 Statement of Account .................................................. 4 3. THE OWNER ............................................................. 4 Who is the Owner ...................................................... 4 What are the Rights of the Owner ...................................... 4 How to Change the Owner ............................................... 5 Designation of Contingent Annuitant ................................... 5 4. PREMIUM PAYMENTS & ALLOCATIONS TO SUB-ACCOUNTS ........................ 5 Premium Payment Amounts ............................................... 5 Premium Payment Allocation ............................................ 5 Accumulation Units .................................................... 5 Additional Sub-Accounts ............................................... 6 Deferred Premium Tax .................................................. 6 5. TRANSFERS, WITHDRAWALS AND LAPSE ...................................... 6 Transfers among Sub-Accounts and the Guaranteed Interest Account ...... 6 Withdrawals and Full Surrender ........................................ 6 Lapse ................................................................. 7 Rules and Limitations ................................................. 7 Deferral of Payment ................................................... 7 6. EXPENSE CHARGES ....................................................... 8 Premium Tax ........................................................... 8 Surrender Charge ...................................................... 8 Transfer Charge ....................................................... 8 Annual Administrative Charge .......................................... 8 Mortality and Expense Risk Fee ........................................ 9 Daily Tax Fee ......................................................... 9 Daily Administrative Fee .............................................. 9 7. DETERMINING THE CONTRACT AND ACCUMULATION UNIT VALUES ................. 9 Crediting of Sub-Account Units and Premiums ........................... 9 Determination of Contract's Value ..................................... 9 Valuation of Sub-Accounts ............................................. 9 D601 Part Page - -------------------------------------------------------------------------------- 8. ANNUITY BENEFITS ...................................................... 9 Maturity Date Guaranteed Rates ........................................ 10 9. DEATH BENEFITS ........................................................ 10 Death Proceeds ........................................................ 10 Death Before Maturity Date ............................................ 11 Distribution at Death Requirements .................................... 12 Death on or After Maturity Date ....................................... 12 The Beneficiary ....................................................... 12 Rights of the Beneficiary ............................................. 13 How to Change the Beneficiary ......................................... 13 10. PAYMENT OPTIONS ....................................................... 13 Calculation of Fixed Annuity Payments ................................. 13 Calculation of Variable Annuity Payments .............................. 14 Option A - Life Annuity with Specified Period Certain ................. 14 Option B - Non-Refund Life Annuity .................................... 14 Option D - Joint and Survivorship Life Annuity ........................ 14 Option E - Installment Refund Life Annuity ............................ 14 Option F - Joint and Survivorship Life Annuity with Specified Period Certain ............................................. 14 Option G - Payments for a Specified Period ............................ 15 Option H - Payments of a Specified Amount ............................. 15 Option I - Variable Life Annuity with 10-Year Period Certain .......... 15 Option J - Joint Survivorship Variable Life Annuity with 10-Year Period Certain ..................................... 15 Option K - Variable Annuity for Specified Period ...................... 15 Option L - Variable Life Expectancy Annuity ........................... 15 Option M - Unit Refund Variable Life Annuity .......................... 15 Option N - Variable Non-Refund Life Annuity ........................... 16 Other Options ......................................................... 16 11. TABLE OF PAYMENT OPTION AMOUNTS ....................................... 16 Options A & E - Life Annuity with Specified Period Certain, Installment Refund Life Annuity ....................... 16 Option B - Non-Refund Life Annuity..................................... 16 Option D - Joint and Survivorship Life Annuity ........................ 17 Option F - Joint and Survivorship Life Annuity with 10-Year Period Certain ............................................. 17 Option G - Payments for a Specified Period ............................ 17 Option I - Variable Payment Life Annuity with 10-Year Period Certain .. 18 Option J - Joint Survivorship Variable Payment Life Annuity with 10-Year Period Certain ..................................... 18 Option K - Variable Payment Annuity for a Specified Period ............ 18 Option M - Variable Payment Life Annuity with Unit Refund ............. 19 Option N - Variable Payment Life Annuity .............................. 19 D601 PART 1: DEFINITIONS YOU (YOUR) The Owner of this contract. WE (OUR, US) PHL Variable Insurance Company ACCUMULATION A standard of measurement as described in Part 4, used to UNIT determine the value of a Contract and its interest in the Sub-accounts prior to the Maturity Date and for amounts held under Payment Option L. ACCUMULATION On the first Valuation Date selected by us, we set all UNIT VALUE Accumulation Unit Values of each Sub-account of the Separate Account at 1.000000. The Accumulation Unit Value on any subsequent Valuation Date is determined by multiplying the Accumulation Unit Value of the Sub-account on the immediately preceding Valuation Date by the Net Investment Factor for that Sub-account for the Valuation Period just ended. ADJUSTED Any premium to the Guaranteed Interest Account, as adjusted to PREMIUM include any interest credited on and any contract charges or withdrawals deducted from such premium payment. ANNUITANT On or prior to the Maturity Date, the term "Annuitant" as used in this contract refers to the Primary Annuitant as shown on the Schedule Page, while such Primary Annuitant is living, and then the Contingent Annuitant, if any, as designated on the written application for this contract or as later changed by you in writing, provided such Contingent Annuitant is living at the death of the Primary Annuitant. After the Maturity Date, the term "Annuitant" shall mean the Annuitant under this contract determined as of the Maturity Date. ANNUITANT'S The beneficiary entitled to receive payment of any amounts BENEFICIARY payable under this contract upon death of the Annuitant. ANNUITY A contract promising a periodic series of payments. ANNUITY UNIT A standard of measurement used to determine the amount of each variable income payment made under the Variable Payment Options I, J, K, M and N. The number of Annuity Units in each Sub-account with assets under the chosen option is equal to the portion of the first payment provided by that Sub-account divided by the Annuity Unit Value for that Sub-account on the first Payment Calculation Date. ANNUITY On the first Valuation Date selected by us, we set all Annuity UNIT VALUE Unit Values in each Sub-account of the Separate Account at $1.000000. The Annuity Unit Value on any subsequent Valuation Date is equal to the Annuity Unit Value of the Sub-account on the immediately preceding Valuation Date multiplied by the Net Investment Factor for that Sub-account for the Valuation Period divided by 1.000000 plus the rate of interest for the number of days in the Valuation Period based on the Assumed Investment Rate. ASSIGNS Any person to whom you assign an interest in this contract if we have notice of the assignment in accordance with the provisions stated in Part 2. ASSUMED The Assumed Investment Rate is 4.5% per year. We use this rate INVESTMENT to determine the first payment under Variable Payment Annuity RATE Options I, J, K, M and N. Future payment amounts under these options will depend on the relationship between the Assumed Investment Rate and the actual investment performance of each Sub-account as reflected in the Sub-account's Annuity Unit Value. D601 1 The Assumed Investment Rate is the annual investment return that will need to be earned by each Sub-account of the Separate Account for there to be no reduction in the amount of the monthly payments under these options. CONTRACT The same date each year as the Contract Date. ANNIVERSARY CONTRACT DATE The Contract Date shown on the Schedule Page. It is the date from which contract years and anniversaries are measured. CONTRACT The sum of the values under a Contract of all Accumulation VALUE Units held in the Sub-accounts of the separate account and the value held in the Guaranteed Interest Account. CONTRACT YEAR The first contract year is the one-year period from the Contract Date. Following Contract Years run from one Contract Anniversary to the next. FIXED PAYMENT An annuity providing payments which do not vary in amount after ANNUITY the first payment is made. MATURITY DATE The Maturity Date shown on the Schedule Page or such changed Maturity Date as may result from death of the Primary Annuitant while a Contingent Annuitant is living or as we may later agree in writing. The Maturity Date may not be earlier than the fifth Contract Anniversary, or later than the Contract Anniversary nearest the Annuitant's 95th birthday unless we agree otherwise. If a Contingent Annuitant becomes the Annuitant as the result of death of the Primary Annuitant prior to the Maturity Date, unless you and we agree otherwise, the Maturity Date will change to the Contract Anniversary nearest the Contingent Annuitant's 95th birthday. NET INVESTMENT The Net Investment Factor for each Sub-account of the Separate FACTOR Account is determined by the investment performance of the assets underlying the sub-account for the Valuation Period just ended. The Net Investment Factor is equal to 1.000000 plus the applicable net investment rate for the Valuation Period. The net investment rate is determined by: a. taking the sum of the accrued net investment income and capital gains and losses, realized or unrealized, of the Sub-account for the Valuation Period; and b. dividing the result of (a) by the Sub-account's share of the Contract Value at the beginning of the Valuation Period; and c. for each calendar day in the Valuation Period subtracting from the result of (a) divided by (b), an amount equal to the mortality and expense risk fee plus the daily administrative fee and any daily tax fee. OWNER/ An individual who is both Owner and Annuitant under the contract. ANNUITANT OWNER'S The beneficiary entitled to receive payment of any amounts BENEFICIARY payable under this contract upon death of the Owner. PAYMENT The date we calculate annuity payments under a Variable Payment CALCULATION Annuity Option. The first Payment Calculation Date is the DATE Valuation Date on or next following the Settlement Date unless we agree otherwise. D601 2 After the first Payment Calculation Date, we will calculate payments on the same date each month. We use the next following Valuation Date if such date is not a Valuation Date. After the first Payment Calculation Date, you may not change the Payment Option you elected. PREMIUM The Valuation Date on which a premium payment is received at our PAYMENT DATE Variable Products Operations unless it is received after the close of the New York Stock Exchange, in which case it will be the next Valuation Date. SETTLEMENT The date contract proceeds are applied under a payment annuity DATE option. Unless we agree otherwise, for death benefits, the Settlement Date is the date that we receive a certified copy of the Annuitant's certificate of death; for proceeds payable on the Maturity Date, it is the Maturity Date; and for proceeds payable upon a surrender, it is the effective date of the surrender. SUB-ACCOUNTS The accounts within our Separate Account to which assets under the contract may be allocated. SURRENDER Contract Value less any applicable contingent deferred sales VALUE charge. VALUATION Every day the New York Stock Exchange is open for trading and DATE PHL Variable Insurance Company is open for business. VALUATION The period in days beginning with the day following the last PERIOD Valuation Date and ending on the next succeeding Valuation Date. VARIABLE An annuity where each payment will vary with the investment PAYMENT experience of the Sub-accounts within the separate account. ANNUITY VPO Our Variable Products Operations division. The address is shown on the cover page of this contract. WRITTEN A request in writing in a form satisfactory to us received by REQUEST (AND us at VPO. WRITTEN NOTICE) PART 2: ABOUT THIS CONTRACT THE EFFECTIVE This contract will begin in effect on the Contract Date provided DATE the initial premium due is paid while the Annuitant is alive. THE CONTRACT This contract and the written application, a copy of which is AND attached to and made a part of this contract is the entire APPLICATION contract between you and us. Any change in terms of this contract, to be in effect, must be signed by one of our executive officers and countersigned by our Registrar or one of our executive officers. This contract is issued at our Main Administrative Office in Hartford, Connecticut. Any benefits payable under this contract are payable at VPO. REQUIRED We may require proof of the Annuitant's age before any annuity PROOF OF AGE payments will begin. We also have the right to require proof of AND SURVIVAL the identity, age and survival of any person entitled to any payment under this contract or upon whose life any payments depend. ADJUSTMENT FOR If the age or sex of the Annuitant has been misstated, any MISSTATEMENT benefits payable will be adjusted to the amount that the OF AGE OR SEX Contract Value would have purchased based on the Annuitant's correct age and sex. Any over payment(s) and under payment(s) D601 3 made by us will be charged or credited against future payments to be made under the contract. ASSIGNMENTS We will not be considered to have notice of any assignment of an interest in this contract until we receive the original or copy of the written assignment at VPO. In no event will we be responsible for its validity. STATEMENT OF We will furnish you, at least annually, a statement of the ACCOUNT Contract Value of this contract in each of the Sub-accounts. We will also provide you with a statement of the investments held by each Sub-account of the Separate Account. After the Maturity Date, we will provide you with an Annual Statement of Account Activity. PART 3: THE OWNER WHO IS THE The Owner is the person named as Owner in the application. The OWNER Owner may be the Annuitant, an employer, a trust or any other individual or entity specified in the application for the Contract. However, under Contracts used with certain tax qualified plans, the Owner must be the Annuitant. A husband and wife may be designated as Joint Owners, and if such a Joint Owner dies, the other Joint Owner becomes the sole Owner of the Contract. If no Owner is named, the Annuitant will be the Owner. WHAT ARE THE You control this contract during the Annuitant's lifetime but not RIGHTS OF THE until the effective date. Unless you and we agree otherwise, you OWNER may exercise all rights provided under this contract without the consent of anyone else. Your rights include the right to: a. Receive any amounts payable under this contract during the Annuitant's lifetime. b. Change the Owner. c. Change the premium payment amount and premium payment intervals. See Part 4. d. Change the allocation schedule for premium payments. See Part 4. e. Transfer Contract Values between and among the various Sub-accounts and the Guaranteed Interest Account. See Part 5. f. Make withdrawals from the various Sub-accounts and the Guaranteed Interest Account or fully surrender the contract for its Surrender Value. See Part 5. g. Select a Payment Option for amounts payable upon a withdrawal or full surrender. h. Select an alternative Payment Option to commence on the Maturity Date. See Part 8. i. Change the Owner's or Annuitant's Beneficiary. j. Assign, subject to the restrictions stated in Part 2, release, or surrender any interest in this contract. See Parts 2 and 5. D601 4 k. Change the Contingent Annuitant any time prior to the death of the Primary Annuitant. You may exercise these rights only while the Annuitant is alive. Your exercise of any rights will, to the extent thereof, assign, release, or surrender the interest of the Annuitant and all beneficiaries and Owners under this contract. HOW TO CHANGE To change the Owner you must submit a written request THE OWNER satisfactory to us. DESIGNATION Prior to the death of the Annuitant, you may designate or change OF CONTINGENT the Contingent Annuitant by notifying VPO in writing with the ANNUITANT name, date of birth, sex, Social Security Number and address of the new Contingent Annuitant. If you are an Owner/Annuitant and your spouse is designated as your beneficiary under this Contract, your surviving spouse will automatically be designated as the Contingent Annuitant. PART 4: PREMIUM PAYMENTS AND ALLOCATIONS TO SUB-ACCOUNTS PREMIUM The initial premium payment is due on the Contract Date. The PAYMENT Annuitant must be alive when the initial premium payment is AMOUNTS made. Thereafter, the premium payment amount and intervals are as shown on the Schedule Page unless later changed as described below. All premium payments are payable at VPO, except that the initial premium payment may be given to an authorized agent for forwarding to VPO. No benefit associated with any such premium payment will be provided until it is actually received by us at VPO. You may vary the amount and premium payment intervals for subsequent premium payments, and additional premium payments may be made within the following limits: a. Each premium payment must at least equal $25. b. No more than $1,000,000 in total premium payments may be paid on this contract, unless we agree otherwise. c. The premium payment intervals may be unscheduled or changed to annual, semi-annual, quarterly, monthly, or any other arrangement agreed to by us. d. Additional premium payments may only be made while an Annuitant is living, prior to the Maturity Date. We reserve the right to waive the limits in a & b above. PREMIUM The premium payment will be applied on its Premium Payment Date PAYMENT to the various Sub-accounts and the Guaranteed Interest Account ALLOCATION shown on the Schedule Page in accordance with your instructions. You may change the allocation schedule with respect to subsequent or additional premium payments by written or telephone request. We reserve the right to waive the requirement of written notice. ACCUMULATION The number of Accumulation Units credited to each Sub-account UNITS of the Separate Account will be determined by dividing the premium payment applied to that Sub-account by the Accumulation Unit Value of that Sub-account on the Premium Payment Date. The amount deposited to the Guaranteed Interest Account will equal the amount of any premium payment applied on the Premium Payment Date. D601 5 ADDITIONAL We have the right to add additional Sub-accounts of the Separate SUB-ACCOUNTS Account subject to approval by the Securities and Exchange Commission and, where required, other regulatory authority. We further reserve the right to add other Guaranteed Interest Accounts. DEFERRED Depending upon state law, a premium tax may be required based on PREMIUM TAX the laws of the state of issue or the state in which the Owner resides when a premium payment is applied. The premium tax rate for the initial premium payment will be shown on the Schedule Page. This rate may change for subsequent premium payments in accordance with State law. We will pay any premium tax due and will only reimburse ourselves upon the earlier of partial withdrawal, surrender of the Contract, payment of death proceeds or the Maturity Date. At the time of reimbursement, we will deduct the tax proportionately from the Sub-accounts and Guaranteed Interest Account based on their proportionate Contract Value. On partial withdrawals, we will deduct a pro-rata amount of the tax based upon the ratio of the amount withdrawn to the Contract Value. PART 5: TRANSFERS, WITHDRAWALS, AND LAPSE TRANSFERS You may transfer all or a portion of the Contract Value of this AMONG contract among one or more of the Sub-accounts and the SUB-ACCOUNTS Guaranteed Interest Account. You can make up to six transfers per AND THE contract year from Sub-accounts of the Separate Account and only GUARANTEED one transfer per contract year from the Guaranteed Interest INTEREST Account unless the Systematic Transfer Program is elected. We ACCOUNT reserve the right to limit the number of transfers you may make. Under that program, funds may be transferred automatically among the Sub-accounts on a monthly, quarterly, semi-annual or annual basis. Unless we agree otherwise, the minimum initial and subsequent transfer amounts are $25 monthly, $75 quarterly, $150 semi-annually or $300 annually. Except as otherwise provided under the Systematic Transfer Program, the amount that may be transferred from the Guaranteed Interest Account at any one-time cannot exceed the higher of $1000 or 25% of the value of the Guaranteed Interest Account. Transfers may be made by written or telephone request. The transfer charge if any, as of the Contract Date, is shown on the Schedule Page. Any such charge will be deducted from the Sub-accounts or Guaranteed Interest Account from which the amounts are to be transferred in the same proportion as the amounts to be transferred to each Sub-account or Guaranteed Interest Account bear to the total amount transferred. The value of each Sub-account will be determined on the Valuation Date that coincides with the date of transfer. Any Accumulation Units held under a Sub-account of the Separate Account or Adjusted Premiums held under the Guaranteed Interest Account as the result of any transfer shall retain its original Premium Payment Date. WITHDRAWALS You may withdraw in cash the Contract Value of this contract, AND FULL less any applicable deferred premium tax and contingent deferred SURRENDER sales charge, in whole or in part any time prior to the Maturity Date or at any time for amounts held under Variable Payment Annuity Options K or L. Such withdrawals must be by written request in a form satisfactory to us and must include such tax withholding information as we may reasonably require. The portion withdrawn from any Sub-account of the Separate Account will be taken by the surrender and release of such number of Accumulation Units in such Sub-account required to make the withdrawal, including any deferred premium tax or contingent deferred sales charge applicable to such withdrawal. Any portion withdrawn D601 6 from the Guaranteed Interest Account will be taken by the release of Adjusted Premiums in the amount needed to make the withdrawal including any deferred premium tax or contingent deferred sales charge applicable to such withdrawal. If as the result of a withdrawal, no Contract Value remains under this contract, the contract will be deemed fully surrendered and of no further value or effect. The Contract Value of each Sub-account will be determined on the Valuation Date that coincides with the date of the withdrawal. After the first Contract Year, and each Contract Year before the Maturity Date, an amount up to 10% of the Contract Value as of the end of the prior contract year may be withdrawn free of any contingent deferred sales charge. Any amount withdrawn during the first contract year or in excess of the 10% in subsequent contract years will be subject to the following contingent deferred sales charge, expressed as a percentage of the amount withdrawn: Age in Complete Years from Payment Date of Unit or Adjusted Premium Contingent Deferred Released to Effectuate Withdrawal Sales Charge ------------------------------------ ------------------- 0 7% 1 6% 2 5% 3 4% 4 3% 5 2% 6 1% 7 and over 0% In no event, however, will the total of all contingent deferred sales charges applied under this contract exceed 9% of the total premium payments paid on this contract. You may elect to apply the amount withdrawn or surrendered to the various Payment Options described in Part 10. LAPSE If on any Valuation Date the Contract Value of this contract becomes zero, the contract will immediately terminate and lapse without value unless any Contract Value has been applied under one of the Variable Payment Options. We will mail to you, at your most recent post office address on file with us at VPO, a written notice of lapse within 30 days after any such Valuation Date. RULES AND The Accumulation Units and Adjusted Premiums released for LIMITATIONS transfer or withdrawal will be determined on a First-In, First-Out (FIFO) basis based on Premium Payment Date. No withdrawals, or full surrender may be made after commencement of an annuity on the Maturity Date except for any Contract Value remaining under Options K or L. Also, you may not transfer any assets under Option M, unless we agree otherwise. DEFERRAL OF With the exception of transfers from the Guaranteed Interest PAYMENT Account, as described above under Transfers Among Sub-Accounts and withdrawals from such Sub-account as described below, transfers, withdrawals, or a request for a full surrender will usually be processed within 7 days after we receive the written request at VPO. However, we may postpone the processing of any such transactions for any of the following reasons (as provided under the Investment Company Act of 1940): D601 7 (a) when the New York Stock Exchange is closed, other than customary weekend and holiday closings; (b) when trading on the exchange is restricted by the Securities and Exchange Commission; (c) when the Securities and Exchange Commission declares that an emergency exists as a result of which disposal of securities in the Fund is not reasonably practicable or it is not reasonably practicable to determine the value of the Units in the Sub-accounts of the Separate Account; or (d) when a governmental body having jurisdiction over the VA Account by order permits such suspension. Rules and regulations of the Securities and Exchange Commission, if any, are applicable and will govern as to whether conditions described in (b) or (c) or (d) exist. For withdrawals from the Guaranteed Interest Account, we may defer payment for six months from the date the request is received by us at VPO. If payment is delayed 30 days or more, we will add interest at an annual rate of 4%. PART 6: EXPENSE CHARGES Charges to cover expenses incurred by us in the distribution and administration of this contract are made in the manner described below. PREMIUM TAX The premium tax, if any, as of the Contract Date, is shown on the Schedule Page. This rate may change for subsequent premium payments in accordance with applicable State law. We will pay any premium tax due and will only reimburse ourselves upon the earlier of partial withdrawal, surrender of the Contract, payment of death proceeds or the Maturity Date. At the time of reimbursement, we will deduct the tax proportionately from the Sub-accounts and Guaranteed Interest Account based on their proportionate Contract Value. On partial withdrawals, we will deduct a pro-rata amount of the tax based upon the ratio of the amount withdrawn to the Contract Value. SURRENDER A charge to cover expenses incurred in the sale and distribution CHARGE of this contract is taken in the form of a contingent deferred sales charge as described in Part 5 which is applied to any withdrawals or full surrender made within the seven-year period following the Premium Payment Date of the Accumulation Units or Adjusted Premiums released to make such withdrawal or surrender. TRANSFER A transfer charge as shown on the Schedule Page is imposed on CHARGE transfers. ANNUAL A portion of the administrative expense incurred by us is ADMINISTRATIVE assessed in the form of an annual charge as shown on the Schedule CHARGE Page. We reserve the right to lower such charge. Such charge will be deducted at the end of each contract year from the total Contract Value with each Sub-account and Guaranteed Interest Account bearing a pro-rata share of such expense based on the proportionate Contract Value of each of the Sub-accounts and Guaranteed Interest Account. By agreement with us, you may, instead, elect to pay this charge in cash. If you elect Payment Options I, J, K, M or N, the Annual Administrative Charge after the Maturity Date will be deducted from each annuity payment in proportionately equal amounts. D601 8 MORTALITY AND The mortality and expense risk fee is taken in the form of a EXPENSE RISK daily fee against each Sub-account of the Separate Account in FEE such amount as shown on the Schedule Page. We reserve the right to lower such fee. DAILY TAX A daily tax fee, if any, is taken by us in the form of a daily FEE fee against each Sub-account of the Separate Account in such amount as shown on the Schedule Page. DAILY A portion of the administrative expense incurred by us is ADMINISTRATIVE assessed in the form of a daily fee against each Sub-account of FEE the Separate Account as shown on the Schedule Page. PART 7: DETERMINING THE CONTRACT AND ACCUMULATION UNIT VALUES CREDITING OF When a premium payment is received by us, we will apply it on the SUB-ACCOUNT Premium Payment Date to credit Accumulation Units to one or more UNITS AND Sub-accounts of the Separate Account or to credit premiums to the PREMIUMS Guaranteed Interest Account in accordance with the most recent allocation schedule on file with us. The number of Accumulation Units credited to each Sub-account will be determined by dividing the premium payment, applied to that Sub-account by the then current Accumulation Unit Value of that Sub-account. The Accumulation Unit Value of each Sub-account on a Valuation Date is determined at the end of that day. DETERMINATION The value of a Sub-account of the Separate Account, at any time OF THE prior to the Maturity Date, is determined by multiplying the CONTRACT total number of Accumulation Units under this contract for that VALUE Sub-account by the current Accumulation Unit Value of that Sub-account. The Contract Value for amounts held under Variable Payment Annuity Option L is determined in the same manner. The value of the Guaranteed Interest Account equals the total value of the Adjusted Premiums. The total Contract Value under this contract equals the sum of the values of each of the Sub-accounts and the Adjusted Premiums. THE VALUATION The values and benefits of the Guaranteed Interest Account are OF not less than those required by the laws of the state in which it SUB-ACCOUNTS is delivered. AND GUARANTEED The values of the assets in each Sub-account will be calculated INTEREST in accordance with applicable law and accepted procedures. ACCOUNT PART 8: ANNUITY BENEFITS Unless you elect an alternative Payment Option as described in Part 10 on or before the Maturity Date, the Contract Value less any premium tax due on the Maturity Date will automatically be applied to provide you a variable monthly life annuity with 10-year period certain based on the Annuitant's age and sex under Payment Option I as described in Part 10. Any annuity payments falling due after the Annuitant's death during the period certain will be paid to the Annuitant's Beneficiary. If the amount to be applied on the Maturity Date is less than $2,000 or would result in monthly payments of less than $20, we shall have the right to pay such amount to you in one lump sum in lieu of providing such annuity. We also have the right to change the annuity payment frequency to annual if the monthly annuity payment would otherwise be less than $20. D601 9 MATURITY DATE The amount of the first monthly annuity payment for each $1,000 GUARANTEED of Contract Value applied on the Maturity Date to purchase a RATES variable life annuity with 10-year period certain on the Annuitant's life under Payment Option I as described in Part 10, will be no less than the rates shown below. However, if our current rates in effect for this contract on the Maturity Date are more favorable, we will use them. OPTION I -- VARIABLE PAYMENT LIFE ANNUITY WITH 10-YEAR PERIOD CERTAIN ------------------------------------------ AGE OF PAYEE MALE FEMALE ------------------------------------------ 40 $4.15 $4.02 45 4.29 4.12 50 4.40 4.27 55 4.73 4.46 60 5.06 4.71 65 5.51 5.05 70 6.08 5.52 75 6.79 6.17 80 7.65 6.99 85 8.57 7.98 ------------------------------------------ PART 9: DEATH BENEFITS DEATH For deaths occurring prior to the Maturity Date, the term death PROCEEDS proceeds is defined as follows: 1. Upon the death of an Owner/Annuitant, (an individual who is both the Owner and the Annuitant under a contract), the death proceeds are equal to the same Death Benefit as described under number 2 below less any deferred premium tax. 2. Upon the death of an Annuitant who is not the Owner, the death proceeds are equal to the Death Benefit as described below less any deferred premium tax. Prior to the Annuitant's Age 85, the Death Benefit is calculated as follows: a. Death occurring in the first 7 Contract Years - The greater of: i. the sum of all premium payments made under the Contract less any prior partial withdrawals (see "Withdrawals and Full Surrenders" in Part 5); or ii. the Contract Value next determined following receipt of a certified copy of the death certificate at VPO. b. Death occurring during the Contract Years 8 through 14 (and each 7 year period thereafter) - the greater of: i. the death benefit that would have been payable at the end of the immediately preceding 7-year period, plus the sum of premium payments less any partial withdrawals made since such date; or D601 10 ii. the Contract Value next determined following receipt of a certified copy of the death certificate at VPO. After the Annuitant's age 85, the Death Benefit equals the Contract Value next determined following receipt of a certified copy of the death certificate at VPO. 3. Upon the death of an Owner who is not the Annuitant, the death proceeds are equal to the cash Surrender Value of the Contract, (Contract Value less any applicable contingent deferred sales charges and any deferred premium tax). 4. In the event of the election by the Owner's or Owner/Annuitant's beneficiary to defer payment of the death proceeds for a period of longer than one Contract Year, the death proceeds payable upon distribution shall be as calculated in accordance with the method defined under Death occurring in the first 7 Contract Years as described above. The death proceeds due may be applied under any of the Payment Options described in Part 10 subject to the following limitations: a. Options D, F and J are not available for death benefits; b. Under Options A, E, G, H and K the period specified must be at least 5 years, but not beyond the life expectancy of such beneficiary. DEATH BEFORE l. Death of an Owner/Annuitant (an individual WHO IS BOTH the MATURITY DATE Owner and the Annuitant under the contract): If an Owner/Annuitant dies before the Maturity Date, upon receipt of due proof of death, the death proceeds will be paid to the Annuitant's Beneficiary except as follows: 0 If the Owner/Annuitant's Beneficiary (i.e., Owner's Beneficiary) is the surviving spouse, within 60 days of our receipt of due proof of death, the surviving spouse may elect to continue the Contract as new Owner/Annuitant as if no death had occurred. 2. Death of an Annuitant WHO IS NOT the Owner: If an Annuitant who is not the Owner dies before the Maturity Date, upon receipt of due proof of death, the death proceeds will be paid to the Annuitant's Beneficiary except as follows: 0 If there is a Contingent Annuitant, the Contract will continue with the Contingent Annuitant becoming the new Annuitant. We shall have the right to first require return of the contract to us so that we may amend it to reflect these changes. 3. Death of an Owner WHO IS NOT the Annuitant: If an Owner who is not the Annuitant dies before the Maturity Date, upon receipt of due proof of death, we will pay the Owner's Beneficiary the death proceeds, except in the following instances: D601 11 a. If the Owner's surviving spouse is a Joint Owner, the Contract will continue with the surviving Joint Owner becoming the sole Owner. b. If the Owner's Beneficiary is the surviving spouse, within 60 days of our receipt of due proof of death the surviving spouse may elect to continue the Contract as the new Owner as if no death had occurred. DISTRIBUTION If the Owner/Annuitant dies before the Maturity date and there is AT DEATH no Contingent Annuitant, then the Annuitant's Beneficiary must REQUIREMENTS elect within 60 days of our receipt of due proof of death to receive the death proceeds in a lump sum or elect to apply the death proceeds due under a Payment Option, provided that the payments begin within one year of the date of death of the Owner/Annuitant. If there is a Contingent Annuitant who is not the Owner/Annuitant's spouse, then the Owner/Annuitant's entire interest in this contract must be distributed within five years of the date of the Owner/Annuitant's death, provided that the Owner's Beneficiary may elect to apply the death proceeds to a Payment Option not extending beyond the life (or life expectancy) of such Owner's Beneficiary and the payments begin within one year after the Owner/Annuitant's death. If the Annuitant who is not the Owner dies before the Maturity Date and there is no Contingent Annuitant, then the Annuitant's Beneficiary must elect within 60 days of our receipt of due proof of death to receive the death proceeds in a lump sum or elect to apply the death proceeds due under a Payment Option, provided that the payments begin within one year of the date of death of the Annuitant. If the Owner who is not the Annuitant dies before the Maturity Date and the Owner's surviving spouse is not the Joint Owner or the Owner's Beneficiary, the Owner's entire interest in this Contract must be distributed within five years of the date of the Owner's death, provided that the Owner's Beneficiary may elect to apply the death proceeds to a Payment Option not extending beyond the life (or life expectancy) of the Owner's Beneficiary and the payments begin within one year after the Owner's death. DEATH ON OR If either the Owner/Annuitant, Annuitant, or Owner dies on or AFTER THE after the Maturity Date, any remaining income payments will be MATURITY DATE continued to the Annuitant's Beneficiary (or Owner's Beneficiary if there is no Annuitant's Beneficiary). Under Payment Option M, the sum of the number of remaining Annuity Units for each Sub-account multiplied by the current Annuity Unit Value for that Sub-account will be paid to the Annuitant's or Owner's Beneficiary in a lump sum, (see "Option M - Unit Refund Variable Life Annuity" in Part 10). THE ANNUITANT'S BENEFICIARY: BENEFICIARY The Annuitant's Beneficiary shall be as stated in the application for this Contract, unless later changed as provided under the terms of this contract. Any death benefit payable to the Annuitant's Beneficiary will be paid to the Owner or the Owner's estate if the Annuitant's Beneficiary is not living when such death benefit becomes payable. D601 12 THE OWNER'S BENEFICIARY: The Owner's Beneficiary shall be as stated in the application for this Contract, unless later changed as provided under this contract. Any death proceeds payable to the Owner's Beneficiary will be paid to the Owner's estate if the Owner's Beneficiary is not living when such death proceeds become payable. In the case of the death of an Owner/Annuitant where conflicting Owner and Annuitant's Beneficiaries have been named, any death proceeds payable will be paid to the Annuitant's Beneficiary. The naming of an Owner's or Annuitant's beneficiary by familial relationship (such as Mother, Father, etc.) shall be understood to be their relationship to the Owner or Annuitant making such designation. WHAT ARE THE 1. Receive the death proceeds payable under this contract; or RIGHTS OF THE BENEFICIARY 2. Select a Payment Option for the death proceeds; or 3. Transfer the amount of any deferred death proceeds between and among the various Sub-accounts. See Part 5. HOW TO CHANGE At any time prior to the death of the last of the Annuitants THE under this contract, you may change the Owner's Beneficiary BENEFICIARY or the Annuitant's Beneficiary. The change must be made by written notice signed by you and filed with us at VPO. When we receive it, the change will be effective as of the date it was signed by you. However, the change will be subject to any payment made or actions taken by us before we received the notice at VPO. PART 10: PAYMENT OPTIONS The election of a payment option must be in a written form satisfactory to us. We reserve the right to require that the election of a payment option be in the form of a supplementary contract distributed by us reflecting the terms of the payment option elected. We have the right to require proof of age and sex of any person on whose life payments depend, as well as proof of the continued survival of any such person. We further have the right to require that the amount applied on the settlement date to any payment option elected at least equal $2,000 and result in a monthly payment of at least $20. As regards the election of a payment option by the beneficiary of any death benefit payable under this contract, limited as described in Part 9, the term "Annuitant" as used below shall refer to such beneficiary. CALCULATION OF The guaranteed annuity payment rates under the following options FIXED ANNUITY will be based on the Annuitant's age and sex, and will be no less PAYMENTS favorable than the following: Under Options A, B, D, E and F rates are based on the a-49 Annuity Table projected to 1985 with Projection Scale B. We use an interest rate of 3-3/8% for 5 and 10 year certain periods under Option A, for the 10 year certain period under Option F, and for Option E; an interest rate 3-1/4% for the 20 year certain period under Options A and F; an interest rate of 3-1/2% under Options B and D. Under Options G and H the guaranteed interest rate is 3%. D601 13 If our rates in effect on the Settlement Date are more favorable, we will use those rates. CALCULATION Under the following options, all payments after the first payment OF VARIABLE will vary with the investment experience of the Sub-accounts. ANNUITY Payments may be either higher or lower than the first payment. PAYMENTS Under Options I, J, K, M and N, we determine the first payment by multiplying the amounts held under the selected option in each Sub-account of the Separate Account by the applicable option rate. The first payment equals the total of such amounts determined for each Sub-account. We determine future payments under these options by multiplying the number of Annuity Units in each Sub-account by the Annuity Unit Value for each Sub-account on the Payment Calculation Date. The payment will equal the sum of the amounts provided by each Sub-account. Under Option L, we determine the amount of the annual distribution by dividing the amount of Contract Value held under this option on December 31 of the previous year by the life expectancy of the Annuitant or the joint life expectancy of the Annuitant and Joint Annuitant at that time. Under Options I, J, M and N, the applicable option rate used to determine the first payment amount will not be less than the rate based on the 1983 Table A (1983 IAM) projected with Projection Scale G to the year 2040, and with continued projection thereafter, and on the Assumed Investment Rate. Under Option K, the rate will be based on the number of payments to be made during the specified period and the Assumed Investment Rate. OPTION A- LIFE A fixed payout annuity payable monthly while the Annuitant is ANNUITY WITH living or, if later, the end of the specified period certain. The SPECIFIED period certain may be specified as 5, 10, or 20 years. The period PERIOD CERTAIN certain must be elected at the time this option is elected. OPTION B - A fixed payout annuity payable monthly while the Annuitant is NON-REFUND living and ending with the last Life payment due preceding the LIFE ANNUITY date of the Annuitant's death. OPTION D - A fixed payout annuity payable monthly while the Annuitant and JOINT AND the designated Joint Annuitant are living, and continuing SURVIVORSHIP thereafter during the lifetime of the survivor. The amount to be LIFE ANNUITY continued to the survivor is 100% of the joint annuity payment, as specified at the time this option is elected. The designated Joint Annuitant must be designated at the time this option is elected and must have an adjusted age of at least 40. The adjusted age is the person's age on his or her birthday nearest the Settlement Date. OPTION E - A fixed payout annuity payable monthly while the Annuitant is INSTALLMENT living or, if later, the date the annuity payments made under REFUND LIFE this option total an amount which refunds the entire amount ANNUITY applied under this option. If the Annuitant is not living when the final payment falls due, that payment will be limited to the amount which needs to be added to the payments already made to equal the entire amount applied under this option. OPTION F - A fixed payout annuity payable monthly while either the Annuitant JOINT AND or designated Joint Annuitant is living, or if later, the end of SURVIVORSHIP 10 years. The designated Joint Annuitant must be designated at LIFE ANNUITY the time this option is elected and must have an adjusted age of WITH 10-YEAR at least 40 years. The adjusted age is the person's age on his PERIOD CERTAIN or her birthday nearest the settlement date. D601 14 OPTION G - Equal income installments for a specified period of years are PAYMENTS FOR paid whether the payee lives or dies. The period certain A SPECIFIED specified must be in whole numbers of years from 5 to 30. PERIOD OPTION H - Equal income installments of a specified amount are paid until PAYMENTS OF the principal sum remaining under this option from the amount A SPECIFIED applied is less than the amount of the installment. When that AMOUNT happens, the principal sum remaining will be paid as a final payment. The amount specified must provide for payments for a period of at least 5 years. OPTION I - This option provides variable monthly payments that will continue VARIABLE LIFE during the lifetime of the Annuitant or for ten years, if longer. ANNUITY WITH If the beneficiary of any death benefits payable under this 10-YEAR PERIOD contract elects this payment option, the term "Annuitant" as used CERTAIN in the preceding paragraph shall refer to such beneficiary and the period certain will equal 10 years, or the life expectancy of such beneficiary, if shorter. OPTION J - This option provides variable monthly payments while the JOINT Annuitant and the designated Joint Annuitant are living. Payments SURVIVORSHIP will continue during the life of the survivor or until the end of VARIABLE LIFE 10 years if later. You must designate the Joint Annuitant at the ANNUITY WITH time you elect this option. The designated Joint Annuitant must 10-YEAR PERIOD be at least age 40 on the birthday nearest the first Payment CERTAIN Calculation Date. This option is not available for the payment of any death benefit under the Contract. OPTION K - This option provides variable monthly payments through the VARIABLE release of a fixed number of Annuity Units over a specified ANNUITY FOR period of time. Payment continues whether the Annuitant lives or SPECIFIED dies. The specified period must be in whole numbers of years from PERIOD 5 to 30. However, the period selected by the beneficiary may not extend beyond the life expectancy of such beneficiary. This option also provides for unscheduled withdrawals. An unscheduled withdrawal will reduce the number of remaining annuity units. Thus, the specified period will be reduced to the period that the remaining annuity units can provide. OPTION L - This option provides a variable income which is payable over the VARIABLE LIFE Annuitant's annually recalculated life expectancy or the annually EXPECTANCY recalculated life expectancy of the Annuitant and Joint ANNUITY Annuitant. This option also provides for unscheduled withdrawals. An unscheduled withdrawal will reduce the Contract Value. This will thus affect the amount of future payments. Upon the death of the Annuitant (and Joint Annuitant, if there is a Joint Annuitant) the remaining Contract Value will be paid in a lump sum to the Annuitant's beneficiary. OPTION M - This option provides variable monthly payments as long as the UNIT REFUND Annuitant lives. In the event of the death of the Annuitant, the VARIABLE LIFE income will stop and the Annuitant's Beneficiary will receive in ANNUITY a lump sum the value of the remaining Annuity Units. This value is equal to the sum of the number of remaining Annuity Units for each Sub-account multiplied by the current Annuity Unit Value for that Sub-account. The number of remaining Annuity Units for each Sub-account of the Separate Account will be calculated as follows: (1) The net amount in the Sub-account applied under this option on the first Payment Calculation Date divided by the corresponding Annuity Unit Value on that date minus D601 15 (2) the sum of the Annuity Units released from the Sub-account to make the payments under this option. OPTION N - This option provides a variable monthly income for the lifetime VARIABLE of the Annuitant. No income is payable after the death of the NON-REFUND Annuitant. LIFE ANNUITY OTHER OPTIONS We may offer other payment options or alternative versions of the options listed above. PART 11: TABLE OF PAYMENT OPTION AMOUNTS The tables that follow show the guaranteed minimum monthly payments for Options A-G, and the minimum initial payment for the Variable Payment Options I, J, K, M and N for each $1,000 applied. If our rates in effect at the Settlement Date are more favorable, we will use those rates. Subsequent monthly payments for the Variable Payment Options will vary and may be higher or lower than the first payment. Amounts for payment frequencies, periods or ages not shown will be furnished upon request. The term "age" as used in the tables refers to the adjusted age. The adjusted age is defined as follows: the age of the annuitant on the annuitant's birthday nearest the effective date of the payment option elected. OPTIONS A & E -- LIFE ANNUITY WITH SPECIFIED PERIOD CERTAIN; INSTALLMENT REFUND LIFE ANNUITY ------------------------------------------------------------------- INSTALLMENT REFUND 10 YEARS CERTAIN 20 YEARS CERTAIN AGE OF ---------------------------------------------------------- PAYEE MALE FEMALE MALE FEMALE MALE FEMALE ------------------------------------------------------------------- 40 $3.80 $3.64 $3.86 $3.60 $3.74 $3.54 45 4.05 3.85 4.14 3.82 3.99 3.74 50 4.36 4.12 4.50 4.10 4.28 3.99 55 4.76 4.47 4.95 4.47 4.61 4.31 60 5.28 4.93 5.54 4.96 4.97 4.67 65 5.97 5.54 6.30 5.63 5.29 5.06 70 6.91 6.39 7.24 6.50 5.43 5.31 75 8.21 7.57 8.26 7.56 5.44 5.40 80 10.04 9.26 9.12 8.60 5.46 5.46 85 12.61 11.68 9.60 9.31 5.46 5.46 ------------------------------------------------------------------- OPTION B -- NON-REFUND LIFE ANNUITY ---------------------------- AGE OF PAYEE MALE FEMALE ---------------------------- 40 $3.95 $3.75 45 4.24 3.98 50 4.62 4.28 55 5.12 4.68 60 5.79 5.24 65 6.75 6.04 70 8.15 7.22 75 10.26 9.03 80 13.54 11.88 85 18.72 16.54 ---------------------------- D601 16 OPTION D -- JOINT AND SURVIVORSHIP LIFE ANNUITY ------------------------------------------------------------------------ FEMALE MALE ---------------------------------------------------------------------- AGE 40 45 50 55 60 65 70 75 ------------------------------------------------------------------------ 40 $3.49 $3.55 $3.59 $3.62 $3.64 $3.65 $3.66 $3.67 45 3.58 3.67 3.74 3.80 3.83 3.86 3.88 3.89 50 3.65 3.79 3.90 4.00 4.07 4.12 4.16 4.18 55 3.72 3.89 4.06 4.22 4.35 4.44 4.51 4.56 60 3.77 3.97 4.20 4.43 4.65 4.83 4.96 5.05 65 3.80 4.04 4.31 4.62 4.94 5.25 5.51 5.71 70 3.83 4.08 4.34 4.77 5.20 5.67 6.13 6.52 75 3.85 4.12 4.46 4.88 5.40 6.04 6.75 7.46 ------------------------------------------------------------------------ OPTION F -- JOINT AND SURVIVORSHIP LIFE ANNUITY WITH 10-YEAR PERIOD CERTAIN ------------------------------------------------------------------------ FEMALE MALE ---------------------------------------------------------------------- AGE 40 45 50 55 60 65 70 75 ------------------------------------------------------------------------ 40 $3.49 $3.55 $3.59 $3.62 $3.64 $3.65 $3.66 $3.67 45 3.58 3.67 3.74 3.80 3.83 3.86 3.88 3.89 50 3.65 3.78 3.90 4.00 4.07 4.12 4.15 4.17 55 3.72 3.89 4.06 4.22 4.34 4.44 4.50 4.54 60 3.77 3.97 4.19 4.43 4.64 4.82 4.95 5.03 65 3.80 4.03 4.31 4.61 4.93 5.23 5.45 5.65 70 3.83 4.08 4.39 4.75 5.18 5.63 6.07 6.41 75 3.85 4.11 4.45 4.86 5.36 5.96 6.62 7.21 ------------------------------------------------------------------------ OPTION G -- PAYMENTS FOR A SPECIFIED PERIOD ------------------------------------------- NUMBER OF ANNUAL MONTHLY YEARS INSTALLMENT INSTALLMENT ------------------------------------------- 5 $211.99 $17.91 6 179.22 15.14 7 155.83 13.16 8 138.31 11.68 9 124.69 10.53 10 113.82 9.61 11 104.93 8.86 12 97.54 8.24 13 91.29 7.71 14 85.95 7.26 15 81.33 6.87 16 77.29 6.53 17 73.74 6.23 18 70.59 5.96 19 67.78 5.73 20 65.26 5.51 25 55.76 4.71 30 49.53 4.18 ------------------------------------------- D601 17 OPTION I -- VARIABLE PAYMENT LIFE ANNUITY WITH 10-YEAR PERIOD CERTAIN ---------------------------- AGE OF PAYEE MALE FEMALE ---------------------------- 40 $4.15 $4.02 45 4.29 4.12 50 4.40 4.27 55 4.73 4.46 60 5.06 4.71 65 5.51 5.05 70 6.08 5.52 75 6.79 6.17 80 7.65 6.99 85 8.57 7.98 ---------------------------- OPTION J -- JOINT SURVIVOR VARIABLE PAYMENT LIFE ANNUITY WITH 10-YEAR PERIOD CERTAIN ------------------------------------------------------------------------ FEMALE MALE ---------------------------------------------------------------------- AGE 40 45 50 55 60 65 70 75 ------------------------------------------------------------------------ 40 $3.92 $3.94 $3.96 $3.98 $3.99 $4.00 $4.00 $4.01 45 3.96 4.00 4.03 4.06 4.08 4.09 4.10 4.11 50 4.00 4.05 4.10 4.15 4.18 4.21 4.23 4.24 55 4.03 4.10 4.18 4.24 4.30 4.35 4.39 4.41 60 4.06 4.15 4.25 4.34 4.43 4.52 4.58 4.63 65 4.09 4.19 4.31 4.44 4.57 4.70 4.81 4.90 70 4.11 4.22 4.36 4.53 4.70 4.89 5.07 5.22 75 4.12 4.75 4.41 4.60 4.82 5.07 5.34 5.59 ------------------------------------------------------------------------ OPTION K -- VARIABLE PAYMENT ANNUITY FOR A SPECIFIED PERIOD ------------------------------------------- NUMBER OF ANNUAL MONTHLY YEARS INSTALLMENT INSTALLMENT ------------------------------------------- 5 $217.98 $18.53 6 185.53 15.77 7 162.39 13.81 8 145.08 12.34 9 131.65 11.19 10 120.94 10.28 11 112.20 9.54 12 104.94 8.92 13 98.83 8.40 14 93.61 7.96 15 89.10 7.58 16 85.18 7.24 17 81.74 6.95 18 78.70 6.69 19 75.99 6.46 20 73.57 6.25 25 64.53 5.49 30 58.75 5.00 ------------------------------------------- D601 18 OPTION M -- VARIABLE PAYMENT LIFE ANNUITY WITH UNIT REFUND ---------------------------- AGE OF PAYEE MALE FEMALE ---------------------------- 40 $4.12 $4.01 45 4.25 4.11 50 4.42 4.24 55 4.64 4.41 60 4.92 4.64 65 5.28 4.94 70 5.74 5.33 75 6.32 5.86 80 7.07 6.55 85 8.01 7.43 ---------------------------- OPTION N -- VARIABLE PAYMENT LIFE ANNUITY ---------------------------- AGE OF PAYEE MALE FEMALE ---------------------------- 40 $4.15 $4.02 45 4.30 4.13 50 4.50 4.27 55 4.76 4.47 60 5.11 4.73 65 5.60 5.09 70 6.29 5.60 75 7.20 6.34 80 8.49 7.41 85 10.30 8.98 ---------------------------- D601 19 FLEXIBLE PREMIUM VARIABLE ACCUMULATION DEFERRED ANNUITY. ALL VALUES AND BENEFITS BASED ON THE INVESTMENT EXPERIENCE OF THE SUB-ACCOUNTS OF THE SEPARATE ACCOUNT ARE VARIABLE AND NOT GUARANTEED AS TO DOLLAR AMOUNT. SEE PART 7 FOR A DESCRIPTION OF HOW THE CONTRACT VALUES ARE DETERMINED, PART 9 FOR A DESCRIPTION OF HOW THE DEATH BENEFITS ARE DETERMINED. D601 Non-Participating POLICY AMENDMENT MARKET VALUE ADJUSTED GUARANTEED INTEREST ACCOUNT (MVA) THIS AMENDMENT IS ISSUED AS PART OF THE CONTRACT TO WHICH IT IS ATTACHED. CONTRACT NUMBER: ANNUITANT: The policy is amended to include a Market Value Adjusted Guaranteed Interest Account (MVA) in addition to the already established Guaranteed Interest Account with 1-Year Guarantee (GIA). The provisions of the Contract applying to the Guaranteed Interest Account apply to both the GIA and the MVA, except as noted below. The Guaranteed Interest Accounts are described on the Schedule Pages of the Contract. DEFINITIONS CONTRACT VALUE: The definition of Contract Value in Part 1 of the Contract is changed to the following: The Contract Value for withdrawals and transfers is equal to the sum of the values under the Contract of all Accumulation Units held in the Sub-accounts of the VA Account and the values held in the GIA and MVA, after any applicable market value adjustment. The Contract Value used to determine the Death Benefit in Part 9 of the Contract is the same as the Contract Value for withdrawals except that there is no market value adjustment. GUARANTEE PERIOD: The period for which interest accrues at the Guaranteed Rate on amounts allocated to the MVA. WINDOW PERIOD: The period during which any withdrawals and transfers from the MVA will not be subject to a market value adjustment. The Window Period is stated in the description of the MVA on the Schedule Pages of the Contract. MVA The MVA provides various choices of interest rate Guarantee Periods. The interest rate Guarantee Periods available are described on the Schedule Pages. Premiums payments may be allocated to the MVA as described in Part 4 of the Contract for the Guaranteed Interest Account. Transfers to and from the MVA may be made as described in Part 5 of the Contract for the Guaranteed Interest Account except that (1) the limitation to one transfer per year from the Guaranteed Interest Account and the limitation on amounts transferred from the Guaranteed Interest Account do not apply to the MVA, and (2) the Systematic Transfer Program is not available for the MVA. You may make up to six transfers per year from the MVA. DR20 Allocations that remain in the MVA until the end of the applicable Guarantee Period will be equal to that amount accumulated at its Guaranteed Rate compounded annually less any applicable Annual Administrative Fees charged to this account including applicable interest thereon. Amounts withdrawn or transferred prior to the end of the Guarantee Period will be subject to a market value adjustment, as described below. However, the market value adjustment will not apply to any amounts withdrawn or transferred during the 30-day Window Period for the MVA. MARKET VALUE ADJUSTMENT Transfers and withdrawals from the MVA prior to the end of the Guarantee Period and outside of its 30-day Window Period are subject to a market value adjustment. The market value adjustment is determined by the following formula: market value adjustment = A x (((1+i)/(1+j+0.0025))N/12 - 1), where, A = the amount withdrawn or transferred, i = the guaranteed interest rate credited to the amount being withdrawn or transferred, j = the current rate for new deposits with a Guarantee Period equal to the number of years remaining in the current Guarantee Period, rounded to the next higher number of complete years, and N = the number of months, rounded up to the next whole number, from the date of withdrawal or transfer to the end of the current Guarantee Period. If we do not offer a Guarantee Period equal to the number of years remaining in the current Guarantee Period, j will be determined by interpolation of the Guaranteed Rate for available Guarantee Periods of the Guaranteed Interest Account. Amounts withdrawn from the MVA will be subject to any applicable Contingent Deferred Sales Charge as described in Part 5 of the Contract after application of the market value adjustment. PHL Variable Insurance Company /s/ Dona D. Young Secretary DR20 -----END PRIVACY-ENHANCED MESSAGE-----