0001193125-19-113526.txt : 20190422 0001193125-19-113526.hdr.sgml : 20190422 20190422165930 ACCESSION NUMBER: 0001193125-19-113526 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 72 FILED AS OF DATE: 20190422 DATE AS OF CHANGE: 20190422 EFFECTIVENESS DATE: 20190501 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLI VUL 2 SERIES ACCOUNT CENTRAL INDEX KEY: 0001075796 IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 333-70963 FILM NUMBER: 19759939 BUSINESS ADDRESS: STREET 1: 8515 EAST ORCHARD RD CITY: GREENWOOD VILLAGE STATE: CO ZIP: 80111 BUSINESS PHONE: 303-737-3000 MAIL ADDRESS: STREET 1: 8515 EAST ORCHARD RD CITY: GREENWOOD VILLAGE STATE: CO ZIP: 80111 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLI VUL 2 SERIES ACCOUNT CENTRAL INDEX KEY: 0001075796 IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-09201 FILM NUMBER: 19759938 BUSINESS ADDRESS: STREET 1: 8515 EAST ORCHARD RD CITY: GREENWOOD VILLAGE STATE: CO ZIP: 80111 BUSINESS PHONE: 303-737-3000 MAIL ADDRESS: STREET 1: 8515 EAST ORCHARD RD CITY: GREENWOOD VILLAGE STATE: CO ZIP: 80111 0001075796 S000011535 COLI VUL 2 SERIES ACCOUNT C000031797 COLI VUL 2 SERIES ACCOUNT 485BPOS 1 d694125d485bpos.htm COLI VUL-2 OF GWLA 485BPOS COLI VUL-2 of GWLA 485BPOS
Table of Contents
As filed with the Securities and Exchange Commission on April 22, 2019
Registration Nos. 333-70963; 811-09201
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-6
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933  
Pre-Effective Amendment No. ( )
Post-Effective Amendment No. 36 (X)
and/or  
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940  
Amendment No. 29 (X)
COLI VUL-2 SERIES ACCOUNT
(Exact Name of Registrant)
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
(Name of Depositor)
8515 E. Orchard Road
Greenwood Village, Colorado 80111
(Address of Depositor’s Principal Executive Office)
(303) 737-3000
(Depositor’s Telephone Number)
Edmund F. Murphy III
President & Chief Executive Officer
Great-West Life & Annuity Insurance Company
8515 E. Orchard Road
Greenwood Village, Colorado 80111
(Name and Address of Agent for Service)
Copy to:
Ann B. Furman, Esq.
Carlton Fields, P.A.
1025 Thomas Jefferson Street, N.W., Suite 400 West
Washington, D.C. 20007-5208
Approximate date of proposed public offering: Continuous
It is proposed that this filing will become effective (check appropriate box)
  immediately upon filing pursuant to paragraph (b) of Rule 485
x on May 1, 2019, pursuant to paragraph (b) of Rule 485
  60 days after filing, pursuant to paragraph (a)(1) of Rule 485
  on (date), pursuant to paragraph (a)(1) of Rule 485
If appropriate, check the following box:
  this post-effective amendment designates a new effective date for a previously filed post-effective amendment.
Title of Securities Being Registered: flexible premium variable universal life insurance policies.

Table of Contents
Great-West Life & Annuity Insurance Company
A Stock Company
8515 East Orchard Road
Greenwood Village, Colorado 80111
(303) 737-3000
Executive Benefit VUL II  —  Prospectus
A Flexible Premium Variable Universal Life Insurance Policy
offered by Great-West Life & Annuity Insurance Company in
connection with its COLI VUL-2 Series Account
Internet Availability of Portfolio Reports: Beginning on January 1, 2021, as permitted by regulations adopted by the SEC, paper copies of the shareholder reports for the Portfolios available under your Contract will no longer be sent by mail, unless you specifically request paper copies of the reports from us. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from us electronically by contacting the Retirement Resource Operations Center at (800) 838-0650.
You may elect to receive all future reports in paper free of charge. You can inform us that you wish to continue receiving paper copies of your shareholder reports by contacting the Retirement Resource Operations Center at the toll-free number referenced immediately above. Your election to receive reports in paper will apply to all Portfolios available under your Contract.
This prospectus describes Executive Benefit VUL II, a flexible premium variable universal life insurance policy (the “Policy”) offered by Great-West Life & Annuity Insurance Company (“Great-West,” “Company,” “we,” “our” or “us”).
The Policy is designed for use by corporations and employers to provide life insurance coverage in connection with, among other things, deferred compensation plans and employer-financed insurance purchase arrangements. The Policy is designed to meet the definition of a “life insurance contract” for federal income tax purposes.
The Policy allows “you,” the Owner, within certain limits to:
• choose the type and amount of insurance coverage you need and increase or decrease that coverage as your insurance needs change;
• choose the amount and timing of Premium payments, within certain limits;
• allocate Premium payments among the available investment options and Transfer Account Value among available investment options as your investment objectives change; and
• access your Account Value through loans and partial withdrawals or total surrenders.
This prospectus contains important information you should understand before purchasing a Policy, including a description of the material rights and obligations under the Policy. We use certain special terms that are defined in Appendix A. Your Policy and any endorsements are the formal contractual agreement between you and the Company. It is important that you read the Policy and endorsements which reflect other variations. You should keep this prospectus on file for future reference.
The Policy that we are currently issuing became available on May 1, 2011. Policies issued before May 1, 2011 are described in a separate prospectus.
The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is May 1, 2019
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Summary of the Policy and its Benefits
This is a summary of some of the most important features of your Policy. The Policy is more fully described in the remainder of this prospectus. Please read this prospectus carefully. Unless otherwise indicated, the description of the Policy in this prospectus assumes that the Policy is in force, there is no Policy Debt and current federal tax laws apply.
1. Corporate-Owned Variable Life Insurance. We will issue Policies to corporations and employers and to certain individuals to provide life insurance coverage in connection with, among other things, deferred compensation plans and employer-financed insurance purchase arrangements. We will issue Policies on the lives of prospective Insureds who meet our underwriting standards.
2. The Series Account. We have established a separate account to fund the variable benefits under the Policy. The assets of the Series Account are insulated from the claims of our general creditors.
3. Premium Payments. You must pay us an Initial Premium to put your Policy in force. The minimum Initial Premium will vary based on various factors, including the age of the Insured and the death benefits option you select, but may not be less than $100.00. Thereafter, you choose the amount and timing of Premium payments, within certain limits.
4. Fixed Account. You may allocate some or all of your net payments and/or make Transfers from the Sub-Accounts to the Fixed Account. The Fixed Account is part of our General Account. We own the assets in the General Account, and we use these assets to support our insurance and annuity obligations other than those funded by our separate accounts. These Fixed Account assets are subject to our general liabilities from business operations. Subject to applicable law, we have sole discretion over investment of the Fixed Account assets. We bear the full investment risk for all amounts allocated or transferred to the Fixed Account. The Policy gives the Company the right to impose limits on the amount each Owner can invest in the Fixed Account and such limits are subject to change at the sole discretion of the Company.
We guarantee that the amounts allocated to the Fixed Account will be credited interest at a net effective annual interest rate of at least the minimum interest rate indicated in your Policy. At our discretion, we will review the interest rate at least once a year. We may reset the interest rate monthly. The Fixed Account is not affected by the investment performance of the Sub-Accounts. Policy value in the Fixed Account will be reduced by the Policy fees and charges we deduct and the effects of any Policy transactions (loans, withdrawals, and Transfers) on your Policy value in the Fixed Account.
5. Free Look Period. You may return your Policy to us for any reason within ten days of receiving it, or such longer period as required by applicable state law (30 days for replacement policies), and depending on state law, receive (i) your Policy Value (less surrenders, withdrawals and distributions), or (ii) the greater of your Premiums, less any withdrawals, or your Policy Value. The money you contribute to the Policy will be invested at your direction, except that in some states during your free look period your Premiums will be allocated to the Great-West Government Money Market Division.
6. Investment Options and Funds. You may allocate your net Premium payments among the available investment divisions (“Divisions”) or the Fixed Account.
Each Division invests exclusively in shares of a single Fund. Each Fund has its own distinct investment objective and policies, which are described in the accompanying prospectuses for the Funds.
You may Transfer amounts from one Division to another or the Fixed Account, subject to the restrictions described herein.
7. Death Benefit. You may choose from among two death benefit options –
1. a fixed benefit equal to the Total Face Amount of your Policy; or
2. a variable benefit equal to the sum of the Total Face Amount and your Account Value.
For each option, the death benefit may be greater if necessary to satisfy federal tax law requirements.
We will deduct any outstanding Policy Debt and unpaid Policy charges before we pay a death benefit. In addition, prior partial withdrawals may reduce the Death Benefit Proceeds under the first option.
At any time, you may increase or decrease the Total Face Amount, subject to our approval and other requirements set forth in the Policy.
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After the first Policy Year, you may change your death benefit option once each Policy Year.
8. Account Value. Your Account Value will reflect -
1. the Premiums you pay;
2. the investment performance of the Divisions you select;
3. the value of the Fixed Account;
4. any Policy loans or partial withdrawals;
5. your Loan Account balance; and
6. the charges we deduct under the Policy.
9. Accessing Your Account Value. You may borrow from us using your Account Value as collateral. Loans may be treated as taxable income if your Policy is a “modified endowment contract” (“MEC”) for federal income tax purposes and you have had positive net investment performance.
There are no surrender charges associated with your Policy. You may surrender your Policy for its Cash Surrender Value plus return of expense charge, if applicable. The return of expense charge is a percentage of your Account Value and is described in greater detail in “Charges and Deductions” below.
You may withdraw a portion of your Account Value at any time while your Policy is in force.
A withdrawal may reduce your death benefit.
We will charge an administrative fee not greater than $25 per withdrawal on partial withdrawals after the first in a Policy Year.
10. Supplemental Benefits. The following optional riders are available –
1. term life insurance; and
2. change of Insured (not available to individual Owners).
We will deduct the cost, if any, of the rider(s) from your Account Value on a monthly basis.
11. Paid-Up Life Insurance. If the Insured reaches Attained Age 121 and your Policy is in force, the Account Value, less Policy Debt, will be applied as a single Premium to purchase “paid-up” insurance. “Paid-up” insurance is a policy where all premiums have been paid and there are no additional premiums due. Your Account Value will remain in the Series Account allocated to the Divisions or the Fixed Account in accordance with your instructions. The death benefit under this paid-up insurance will be fixed by the Internal Revenue Code of 1986, as amended (“Code”) for Insureds age 99. As your Account Value changes based on the investment experience of the Divisions, the death benefit will increase or decrease accordingly.
12. Reinstatement. If your Policy terminates due to insufficient value, we will reinstate it within three years at your Request, subject to certain conditions.
13. Surrenders. You may surrender your Policy for its Cash Surrender Value at any time while the Insured is living. If you do, the insurance coverage and all other benefits under the Policy will terminate.
If you withdraw part of the Cash Surrender Value, your Policy’s death benefit may be reduced and you may incur taxes and tax penalties.
14. Partial Withdrawal. You may Request a partial withdrawal of Account Value at any time while the Policy is in force. The amount of any partial withdrawal must be at least $500 and may not exceed 90% of your Account Value less the value of the Loan Account.
The Death Benefit Proceeds and your Account Value will be reduced by the amount of any partial withdrawals.
15. Policy Loans. You may borrow from us using your Account Value as collateral. You may Request a Policy loan of up to 90% of your Account Value, decreased by the amount of any outstanding Policy Debt on the date the Policy loan is made.
The minimum Policy loan amount is $500.
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16. Changes in Total Face Amount. You may increase or decrease the Total Face Amount of your Policy at any time. Each increase or decrease in the Total Face Amount must be at least $25,000. Minimum face amount is $100,000.
17. Target Premium. Your target Premium is actuarially determined and will depend on the initial Total Face Amount of your Policy, your Issue Age, your sex (except in unisex states), and rating class (if any) and equals the maximum Premium payable such that the Policy remains compliant with the Code. The target Premium is used to determine your expense charged applied to the Premium and the sales compensation we pay. Payment of the target premium does not guarantee that your Policy will not lapse, and you may need to pay additional Premiums to keep your Policy in force. Each increase to the Total Face Amount is considered to be a new segment to the Policy. Each segment will have a separate target Premium associated with it.
18. State Variations. Policies issued in your state may provide different features and benefits from, and impose different costs than, those described in this prospectus because of state law variations. These differences include, among other things, free look rights, issue age limitations, and the general availability of riders. This prospectus describes the material rights and obligations of an Owner, and the maximum fees and charges for all Policy features and benefits are set forth in the fee table of this prospectus. See your Policy for specific variations because any such state variations will be included in your Policy or in riders or endorsements attached to your Policy. See your agent or contact us for specific information that is applicable to your state.
Policy Risks
1. Account Value Not Guaranteed. Your Account Value is not guaranteed. Your Account Value fluctuates based on the performance of the investment options you select. The investment options you select may not perform to your expectations. Your Account Value may also be affected by charges under your Policy.
2. Not Suitable as Short-Term Savings Vehicle. The Policy is designed for long-term financial planning. Accordingly, you should not purchase the Policy if you need access to the Account Value within a short time. Before purchasing a Policy, consider whether the long-term nature of the Policy is consistent with the purposes for which it is being considered.
3. Risk of Policy Lapse. Your Policy may terminate if your Account Value at the beginning of any Policy Month is insufficient to pay the Policy’s monthly charges.
If your Policy would terminate due to insufficient value, we will send you notice and allow you a 61-day grace period.
If, within the grace period, you do not make a Premium payment sufficient to cover all accrued and unpaid charges and deductions, your Policy will terminate at the end of the grace period without further notice.
4. Limitations on Withdrawals. Partial withdrawals of Account Value are permitted at any time the Policy is in force. As noted above, the amount of any partial withdrawal must be at least $500 and may not exceed 90% of your Account Value less the value of the Loan Account. A maximum administrative fee of $25 will be deducted from your Account Value for all partial withdrawals after the first made in the same Policy Year. Please note that withdrawals reduce your Account Value and your Death Benefit Proceeds. In addition, withdrawals may have tax consequences.
5. Limitations on Transfers. Subject to our rules as they may exist from time to time, you may at any time Transfer to another Division all or a portion of the Account Value allocated to a Division. In addition, we do not intend to enforce the restrictions on Transfers set forth in your Policy except in cases of identified market timing unless the Sub-Account has additional restrictions that are noted in the respective Fund’s prospectus. See “Market Timing & Excessive Trading” below. Certain limitations apply to Transfers into and out of the Fixed Account. See “Fixed Account Transfers” below.
6. Limitations or Charges on Surrender of Policy. You may surrender your Policy for its Cash Surrender Value at any time while the Insured is living. Upon surrender of your Policy, the insurance coverage and all other benefits under the Policy will terminate.
There are no surrender charges associated with your Policy. However, the surrender of your Policy may have tax consequences.
7. Risks of Taking a Policy Loan. As noted above, you may Request a Policy loan of up to 90% of your Account Value, decreased by the amount of any outstanding Policy Debt on the date the Policy loan is made. The minimum Policy loan amount is $500.
Taking a Policy loan may increase the risk that your Policy will lapse, will reduce your Account Value, and may reduce the death benefit. In addition, if your Policy is a MEC for tax purposes, taking a Policy loan may have tax consequences.
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8. Adverse Tax Consequences. Your Policy is structured to meet the definition of a life insurance contract under the Code. Current federal tax law generally excludes all death benefits from the gross income of the Beneficiary of a life insurance policy. Generally, you are not taxed on any increase in the Account Value until it is withdrawn, but are taxed on surrender proceeds and the proceeds of any partial withdrawals if those amounts, when added to all previous non-taxable distributions, exceed the total Premium paid. Amounts received upon surrender or withdrawals in excess of Premiums are treated as ordinary income.
Under certain circumstances, a Policy may become a MEC for federal tax purposes. This may occur if you reduce the Total Face Amount of your Policy or pay excessive Premiums. We will monitor your Premium payments and other Policy transactions and notify you if a payment or other transaction might cause your Policy to become a MEC without your written permission. We will not invest any Premium or portion of a Premium that would cause your Policy to become a MEC, but instead will promptly refund the money to you. If you elect to have a MEC contract, you can return the money to us with a signed form of acceptance.
Under current tax law, Death Benefit Proceeds under MECs generally are excluded from the gross income of the Beneficiary. Withdrawals and Policy loans, however, are treated first as income, to the extent of any gain, and then as a return of Premium. The income portion of the distribution is includable in your taxable income and taxed at ordinary income tax rates. A 10% penalty tax is also generally imposed on the taxable portion of any amount received before age 59 1⁄2.
9. General Account Risk. Great-West’s general obligations and any guaranteed benefits under the Policy are supported by our General Account (and not by the Series Account) and are subject to Great-West’s claims-paying ability. An Owner should look to the financial strength of Great-West for its claims-paying ability. Assets in the General Account are not segregated for the exclusive benefit of any particular Policy or obligation. General Account assets are also available to Great-West’s general creditors and the conduct of our routine business activities, such as the payment of salaries, rent and other ordinary business expenses. For more information about Great-West’s financial strength, you may review our financial statements and/or check our current rating with one or more of the independent sources that rate insurance companies for their financial strength and stability. Such ratings are subject to change and have no bearing on the performance of the Funds.
Fund Risks
The Policy currently offers several variable investment options, each of which is a Division of the Series Account. Each Division uses its assets to purchase, at their net asset value, shares of a Fund. The Divisions are referred to as “variable” because their investment experience depends upon the investment experience of the Funds in which they invest.
We do not guarantee that the Funds will meet their investment objectives. Your Account Value may increase or decrease in value depending on the investment performance of the Funds. You bear the risk that those Funds may not meet their investment objectives. A comprehensive discussion of the risks of each Fund may be found in each Fund’s prospectus, including detailed information concerning investment objectives, strategies, and their investment risk. You may obtain a copy of the Fund prospectuses without charge by contacting us at 888-353-2654. If you received a summary prospectus for a Fund, please follow the directions on the first page of the summary prospectus to obtain a copy of the Fund’s prospectus.
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Fee Tables
The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering the Policy. The first table describes the fees and expenses that you will pay at the time that you buy the Policy, surrender the Policy, or Transfer cash value between investment options.
Transaction Fees
Charge When Charge is Deducted Amount Deducted
Maximum Expense Charge Imposed on Premium* Upon each Premium payment Maximum: 10% of Premium
 
Current: 6.0%
Sales Load** Upon each Premium Payment Maximum: 6.5% of Premium
 
Current: 2.5% of Premium up to target and 1.0% of Premium in excess of target
Premium Tax** Upon each Premium payment Maximum: 3.5% of Premium
Partial Withdrawal Fee Upon partial withdrawal Maximum: $25 deducted from Account Value for all partial withdrawals after the first made in the same Policy Year.
Change of Death Benefit Option Fee Upon change of option Maximum: $100 deducted from Account Value for each change of death benefit option.
Transfer Fee At time of Transfer for all Transfers in excess of 12 made in the same Policy Year Maximum: $10/Transfer
Loan Interest Upon issuance of Policy loan Maximum: the Moody’s Corporate Bond Yield Average – Monthly Average Corporates
* The Expense Charge consists of the Sales Load plus the Premium Tax.
** The Sales Load and Premium Tax comprise (and are not in addition to) the Expense Charge.
The next table describes the fees and expenses that you will pay periodically during the time that you own the Policy, not including Fund fees and expenses.
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Periodic Charges Other Than Fund Operating Expenses
Charge When Charge is Deducted Amount Deducted
Cost of Insurance (per $1000 Net Amount at Risk)1    
Minimum & Maximum Cost of Insurance Charge Monthly Guaranteed:
Minimum: $0.02 per $1000
Maximum: $83.33 per $1000
Cost of Insurance Charge for a 46- year old Male Non-Smoker, $550,000 Face Amount, Option 1 (Level Death) Monthly Guaranteed:
$0.21 per $1000
Mortality and Expense Risk Charge2 Monthly Guaranteed: 0.90% (of average daily net assets) annually
Current: 0.28% for Policy Years 1-20, and 0.10% thereafter
Service Charge Monthly Maximum: $10/month
Current: $7.50/month
1 The Cost of Insurance Charge will vary based on individual characteristics. The cost of insurance shown in the table is a sample illustration only and may not be representative of the charge that a particular Owner will pay. Owners may obtain more information about their particular cost of insurance charge by contacting our Service Center at 888-353-2654.
2 The mortality and expense risk charge is accrued daily and deducted on the first day of each Policy month by cancelling accumulation units pro-rata against Sub-Accounts.
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Supplemental Benefit Charges
Currently, we are offering the following supplemental optional riders. The charges for the rider you select are deducted monthly from your Account Value as part of the Monthly Deduction described in “Charges and Deductions” below. The benefits provided under each rider are summarized in “Other Provisions and Benefits” below.
Change of Insured Rider3* Upon change of Insured Minimum: $100 per change
Maximum: $400 per change
Change of Insured Rider for a 46-year old Male Non-Smoker, $550,000 Face Amount, Option 1 (Level Death)*   $400 per change
Term Life Insurance Rider Monthly Guaranteed:
Minimum COI: $0.02 per $1000
Maximum COI: $83.33 per $1000
Term Life Insurance Rider for a 46-year old Male Non-Smoker, $550,000 Face Amount, Option 1 (Level Death) Monthly Guaranteed:
$0.21 per $1000
* Not available for individual Owners.
The next table shows the minimum and maximum total operating expenses charged by the Funds that you may pay periodically during the time that you own the Policy. More detail concerning each Fund’s fee and expenses is contained in the prospectus for each Fund.
Total Annual Fund Operating Expenses4
(Expenses that are deducted from Fund assets, including management fees,
distribution and/or service (12b-1) fees, and other expenses)
  Minimum Maximum
Total Annual Fund Operating 0.27% 2.61%
THE ABOVE EXPENSES FOR THE FUNDS WERE PROVIDED BY THE FUNDS. WE HAVE NOT INDEPENDENTLY VERIFIED THE ACCURACY OF THE INFORMATION.
3. The Change of Insured Rider will vary based on individual characteristics. The charge shown in the table is a sample illustration only and may not be representative of the charge that a particular Owner will pay. Owners may obtain more information about their particular cost of insurance by contacting our Service Center at 888-353-2654.
4. Expenses are shown as a percentage of a Fund’s average net assets as of December 31, 2018. The expenses above include fees and expenses incurred indirectly by the Great-West Profile Funds and the Great-West Lifetime Funds as a result of investing in shares of acquired funds, if any. The range of expenses above does not show the effect of any fee waiver or expense reimbursement arrangements. The advisers and/or other service providers of certain Funds have agreed to waive their fees and/or reimburse the Funds’ expenses in order to keep the expenses below specified limits. In some cases, these expense limitations may be contractual. In other cases, these expense limitations are voluntary and may be terminated at any time. Please see the prospectus for each Fund for information regarding the expenses for each Fund, including fee reduction and/or expense reimbursement arrangements, if applicable. The management fees and other expenses of the Funds are more fully described in the Fund prospectuses.
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Description of Depositor, Registrant, and Funds
Great-West Life & Annuity Insurance Company
Great-West is a stock life insurance company organized under the laws of the state of Colorado. Our offices are located at 8515 East Orchard Road, Greenwood Village, Colorado 80111.
We are authorized to do business in 49 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands and Guam. We issue individual and group life insurance policies and annuity contracts and accident and health insurance policies.
Great-West is a wholly owned subsidiary of GWL&A Financial, Inc., a Delaware holding company. GWL&A Financial, Inc. is an indirect wholly-owned subsidiary of Great-West Lifeco Inc., a Canadian holding company. Great-West Lifeco Inc. is a subsidiary of Power Financial Corporation, a Canadian holding company with substantial interests in the financial services industry. Power Financial Corporation is a subsidiary of Power Corporation of Canada, a Canadian holding and management company. Through a group of private holding companies, The Desmarais Family Residuary Trust, which was created on October 8, 2013 under the Last Will and Testament of Paul G. Desmarais, has voting control of Power Corporation of Canada.
On January 24, 2019, Great-West announced that it had entered into an agreement with Protective Life Insurance Company (“Protective”) to sell, via indemnity reinsurance, substantially all of its non-participating individual life insurance and annuity business and group life and health business, including this Policy. Subject to the provision of certain services by Great-West or its affiliates for a transitional period following the closing, Protective will agree to provide administration for the Policy in accordance with their terms and conditions. The transaction is expected to close in the first half of 2019, subject to regulatory approvals and customary closing conditions.
The Series Account
The Series Account is a segregated asset account of Great-West. We use the Series Account to fund benefits payable under the Policy. The Series Account may also be used to fund benefits payable under other life insurance policies issued by us.
We own the assets of the Series Account, which we hold separate and apart from our General Account assets. The income, gains or losses, realized or unrealized, from assets allocated to the Series Account are credited to or charged against the Series Account without regard to our other income, gains or losses. The income, gains, and losses credited to, or charged against, the Series Account reflect the Series Account’s own investment experience and not the investment experience of Great-West’s other assets. The assets of the Series Account may not be used to pay any liabilities of Great-West other than those arising from the Policies (and any other life insurance policies issued by us and funded by the Series Account).
In calculating our corporate income tax liability, we derive certain corporate income tax benefits associated with the investment of company assets, including Series Account assets that are treated as company assets under applicable income tax law. These benefits, which reduce our overall corporate income tax liability may include dividends received deductions and foreign tax credits which can be material. We do not pass these benefits through to the Series Account or our other separate accounts, principally because: (i) the great bulk of the benefits results from the dividends received deduction, which involves no reduction in the dollar amount of dividends that the Series Account receives; and (ii) under applicable income tax law, Owners are not the owners of the assets generating the benefits.
Great-West is obligated to pay all amounts promised to Owners under the Policies (and any other life insurance policies issued by us and funded by the Series Account).
We will at all times maintain assets in the Series Account with a total market value at least equal to the reserves and other liabilities relating to the variable benefits under all policies participating in the Series Account.
The Series Account is divided into Divisions. Each Division invests exclusively in shares of a corresponding Fund. We may in the future add new or delete existing Divisions. The income, gains or losses, realized or unrealized, from assets allocated to each Division are credited to or charged against that Division without regard to the other income, gains or losses of the other Divisions.
All amounts allocated to a Division will be used to purchase shares of the corresponding Fund. The Divisions will at all times be fully invested in Fund shares. We maintain records of all purchases and redemptions of shares of the Funds.
The Investment Options and Funds
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The Policy offers a number of Divisions or Sub-Accounts. Each Division invests in a single Fund. Each Fund is a mutual fund registered under the Investment Company Act of 1940, as amended (the “1940 Act”), or a separate series of shares of such a mutual fund. More comprehensive information, including a discussion of potential risks, is found in the current prospectuses for the Funds. The fund prospectuses should be read in connection with this prospectus. YOU MAY OBTAIN A PROSPECTUS AND, IF AVAILABLE, A FUND SUMMARY, CONTAINING COMPLETE INFORMATION ON EACH FUND, WITHOUT CHARGE, UPON REQUEST BY CONTACTING US AT 888-353-2654. If you received a summary prospectus for a Fund, please follow the directions on the first page of the summary prospectus to obtain a copy of the Fund’s prospectus.
Each Fund holds its assets separate from the assets of the other Funds, and each Fund has its own distinct investment objective and policies. Each Fund operates as a separate investment fund, and the income, gains and losses of one Fund generally have no effect on the investment performance of any other Fund.
The Funds are NOT available to the general public directly. The Funds are available as investment options in variable life insurance policies or variable annuity contracts issued by life insurance companies or, in some cases, through participation in certain qualified pension or retirement plans.
Some of the Funds have been established by investment advisers that manage publicly available mutual funds having similar names and investment objectives. While some of the Funds may be similar to, and may in fact be modeled after publicly available mutual funds, the Funds are not otherwise directly related to any publicly available mutual fund. Consequently, the investment performance of publicly available mutual funds and any similarly named Fund may differ substantially.
Payments We Receive. Some of the Funds’ investment advisers or affiliates may compensate us for providing the administrative, recordkeeping and reporting services they would normally be required to provide for individual shareholders or cost savings experienced by the investment advisers or affiliates of the Funds. Such compensation is typically a percentage of Series Account assets invested in the relevant Fund and generally may range up to 0.35% of net assets. GWFS Equities, Inc. (“GWFS”), a broker-dealer and subsidiary of Great-West and the principal underwriter and distributor of the Policy, may also receive Rule 12b-1 fees (ranging up to 0.25%) directly from certain Funds for providing distribution related services related to shares of Funds offered in connection with a Rule 12b-1 plan. If GWFS receives 12b-1 fees, combined compensation for administrative and distribution related services generally ranges up to 0.60% annually of Series Account assets invested in a Fund.
Such payments and fees create an incentive for us to offer portfolios (or classes of shares of portfolios) for which such payments and fees are available to us. We consider such payments and fees, among other things, when deciding to include a portfolio (or class or share of a portfolio) as an investment option under the Policy. Other available investment portfolios (or other available classes of shares of the portfolios) may have lower fees and better overall investment performance than the portfolios (or classes of shares of the portfolios) offered under the Policy.
If you purchased the Policy through a broker-dealer or other financial intermediary (such as a bank), the Funds and their related companies may pay the intermediary for services provided with regard to the sale of Fund shares to the Divisions under the Policy. The amount and/or structure of the compensation can possibly create a conflict of interest as it may influence the broker-dealer or other intermediary and your salesperson to present this Policy (and certain Divisions under the Policy) over other investment alternatives. The variations in compensation, however, may also reflect differences in sales effort or ongoing customer services expected of the broker-dealer or other intermediary or your salesperson. You may ask your salesperson about variations and how he or she and his or her broker-dealer are compensated for selling the Policy or visit your financial intermediary’s Web site for more information.
Payments We Make. In addition to the direct cash compensation described above for sales of the Policies, Great-West and/or its affiliates may also pay GWFS agents additional cash and non-cash incentives to promote the sale of the Policies and other products distributed by GWFS, including Funds of Great-West Funds, Inc., which are available Funds under the Policies. Great-West and/or its affiliates may sponsor various contests and promotions subject to applicable FINRA regulations in which GWFS agents may receive prizes such as travel awards, merchandise and cash. Subject to applicable FINRA regulations, Great-West and/or its affiliates may also pay for travel expenses, meals, lodging and entertainment of salespersons in connection with educational and sales promotional programs and sponsor speakers, educational seminars and charitable events.
Cash incentive payments may vary depending on the arrangement in place at any particular time. Cash incentives payable to GWFS agents may be based on certain performance measurements, including a percentage of the net amount invested in certain Funds available under the Policy. These additional payments could be viewed as creating conflicts of interest. In some cases, the payment of incentive-based compensation may create a financial incentive for a GWFS agent to recommend or sell the Policy instead of other products or recommend certain Funds under the Policy over other Funds, which may not necessarily be to your benefit.
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Closed Divisions. Effective May 1, 2013, the Division investing in the Invesco V.I. Health Care Fund (Series I Shares) was closed to new Owners, however, Owners with amounts transferred in to aforementioned Division as of May 1, 2013, may continue to allocate Premium payments and Transfer amounts into and out of such Division.
Effective May 1, 2014, the Division investing in the Columbia Variable Portfolio – Small Cap Value Fund (Class 1 Shares) was closed to new Owners, however, Owners with amounts transferred in to aforementioned Division as of May 1, 2014, may continue to allocate Premium payments and Transfer amounts into and out of such Division.
Effective May 1, 2015, the Division investing in the VanEck VIP Emerging Markets Fund (Initial Class Shares) was closed to new Owners, however, Owners with amounts transferred in to aforementioned Division as of May 1, 2015, may continue to allocate Premium payments and Transfer amounts into and out of such Division.
Effective May 1, 2016, the Divisions investing in the following Funds were closed to new Owners: Alger Small Cap Growth Portfolio (Class I-2 Shares); Davis Value Portfolio; Invesco V.I. Mid Cap Core Equity Fund (Series I Shares); Janus Henderson Overseas Portfolio (Institutional Shares); and Royce Capital Fund Small-Cap Portfolio (Service Class Shares). Owners with amounts invested in these Funds as of May 1, 2016 may continue to allocate Premium payments and Transfer amounts into and out of these Divisions.
Effective May 1, 2017, the Divisions investing in the following Funds were closed to new Owners: DWS Small Mid Cap Value VIP (formerly Deutsche Small Mid Cap Value VIP) (Class A Shares); Goldman Sachs VIT Mid Cap Value Fund (Institutional Shares); and Lord Abbett Series Fund Developing Growth Portfolio (Class VC Shares). Owners with amounts invested in these Funds as of May 1, 2017 may continue to allocate Premium payments and Transfer amounts into and out of these Divisions.
Effective May 1, 2019, the Divisions investing in the following Funds were closed to new Owners: Fidelity® Variable Insurance Products ContrafundSM Portfolio (Service Class 2 Shares); Goldman Sachs Multi-Strategy Alternatives Portfolio (Service Shares) and Putnam VT International Growth Fund (Class IA Shares). Owners with amounts invested in these Funds as of May 1, 2017 may continue to allocate Premium payments and Transfer amounts into and out of these Divisions.
Fund Investment Objectives. The investment objectives of the Funds are briefly described below:
AIM Variable Insurance Funds (Invesco Variable Insurance Funds) - advised by Invesco Advisers, Inc.
Invesco V.I. Global Real Estate Fund (Series I Shares) - seeks total return through growth of capital and current income. Invesco Asset Management Ltd is the sub-adviser to this Fund.
Invesco V.I. Health Care Fund (Series I Shares)* - seeks long-term growth of capital.
Invesco V.I. International Growth Fund (Series I Shares) - seeks long-term growth of capital.
Invesco V.I. Mid Cap Core Equity Fund (Series I Shares)* - seeks long-term growth of capital.
Alger Portfolios – advised by Fred Alger Management, Inc.
Alger Small Cap Growth Portfolio (Class I-2 Shares)* - seeks long-term capital appreciation.
American Century Variable Portfolios, Inc. – advised by American Century Investment Management, Inc.
American Century Investments® VP Capital Appreciation Fund (Class I Shares) - seeks capital growth.
American Century Investments® VP Mid Cap Value Fund (Class I Shares) - seeks long-term capital growth; income is a secondary consideration.
American Century Investments® VP Ultra Fund (Class I Shares) - seeks long-term capital growth.
American Century Investments® VP Value Fund (Class I Shares) - seeks long-term capital growth; income is a secondary consideration.
American Century Variable Portfolios II, Inc. – advised by American Century Investment Management, Inc.
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American Century Investments® VP Inflation Protection Fund (Class II Shares) - seeks long-term total return using a strategy that seeks to protect against U.S. inflation.
American Funds Insurance Series® - advised by Capital Research and Management Company
American Funds Insurance Series® Global Small Capitalization Fund (Class 2 Shares) - seeks long-term growth of capital.
American Funds Insurance Series® Growth Fund (Class 2 Shares) - seeks growth of capital.
American Funds Insurance Series® Growth-Income Fund (Class 2 Shares) - seeks to achieve long-term growth of capital and income.
American Funds Insurance Series® International Fund (Class 2 Shares) - seeks to provide investors with long-term growth of capital.
American Funds Insurance Series® New World Fund® (Class 2 Shares) - seeks long-term capital appreciation.
Blackrock Variable Series Funds, Inc. - advised by BlackRock Advisors, LLC
BlackRock Global Allocation V.I. Fund (Class I Shares) - seeks high total investment return.
BlackRock High Yield V.I. Fund (Class I Shares) - seeks to maximize total return, consistent with income generation and prudent investment management.
BlackRock iShares® Dynamic Allocation V.I. Fund (Class I Shares) - seeks to track the investment results of an index composed of global equities in the technology sector.
Columbia Funds Variable Insurance Trust - advised by Columbia Management Investment Advisers, LLC
Columbia Variable Portfolio - Small Cap Value (Class 1 Shares)* - seeks long-term capital appreciation.
Davis Variable Account Fund, Inc. - advised by Davis Selected Advisors, L.P.
Davis Financial Portfolio - seeks long-term growth of capital. Davis Selected Advisers-NY, Inc. is the sub-adviser to this Fund.
Davis Value Portfolio* - seeks long-term growth of capital. Davis Selected Advisers-NY, Inc. is the sub-adviser to this Fund.
Delaware VIP® Trust – advised by Delaware Management Company
Delaware VIP® International Value Equity Series (Standard Class Shares) - seeks long-term growth without undue risk to principal.
Delaware VIP® Small Cap Value Series (Service Class Shares) - seeks capital appreciation.
Deutsche DWS Investments VIT Funds – advised by DWS Investment Management Americas, Inc.
DWS Small Cap Index VIP (formerly Deutsche Small Cap Index VIP) (Class A Shares) - seeks to replicate, as closely as possible, before the deduction of expenses, the performance of the Russell 2000® Index, which emphasizes stocks of small U.S. companies. Northern Trust Investments, Inc. is the sub-adviser to this Fund.
Deutsche DWS Variable Series I – advised by DWS Investment Management Americas, Inc.
DWS Core Equity VIP (formerly Deutsche Core Equity VIP) (Class A Shares) - seeks long-term growth of capital, current income and growth of income.
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Deutsche DWS Variable Series II – advised by DWS Investment Management Americas, Inc.
DWS High Income VIP (formerly Deutsche High Income VIP) (Class A Shares) - seeks a high level of current income.
DWS Small Mid Cap Value VIP (formerly Deutsche Small Mid Cap Value VIP) (Class A Shares)* - seeks long-term capital appreciation.
Dreyfus Stock Index Fund, Inc. - advised by The Dreyfus Corporation (effective on or about June 3, 2019, the Fund will be renamed the BNY Mellon Stock Index Fund, Inc. and the Adviser will be renamed BNY Mellon Investment Adviser, Inc.)
Dreyfus Stock Index Fund (Initial Shares) (effective on or about June 3, 2019, this Fund will be renamed the BNY Mellon Stock Index Fund) - seeks to match the total return of the Standard & Poor's® 500 Composite Stock Price Index (S&P 500® Index). Mellon Investments Corporation is the sub-adviser to this Fund.
Dreyfus Variable Investment Fund – advised by The Dreyfus Corporation (effective on or about June 3, 2019, the Fund will be renamed the BNY Mellon Variable Investment Fund and the Adviser will be renamed BNY Mellon Investment Adviser, Inc.)
Dreyfus VIF International Equity Portfolio (Initial Shares) (effective on or about June 3, 2019, this Portfolio will be renamed the BNY Mellon Variable Investment Fund International Equity Portfolio) - seeks capital growth. Newton Investment Management (North America) Limited is the sub-adviser to this Fund.
Eaton Vance Variable Trust – advised by Eaton Vance Management
Eaton Vance VT Floating-Rate Income Fund (Initial Class Shares) - seeks to provide a high level of current income.
Federated Insurance Series – advised by Federated Investment Management Company
Federated High Income Bond Fund II (Primary Class Shares) - seeks high current income.
Fidelity Variable Insurance Products Fund II – advised by Fidelity Management & Research Company
Fidelity® Variable Insurance Products ContrafundSM Portfolio (Service Class 2 Shares)* - seeks long-term capital appreciation. FMR Co., Inc. (FMRC) is the sub-adviser to this Fund.
Fidelity® Variable Insurance Products Emerging Markets Portfolio (Service Class 2 Shares) - seeks capital appreciation. FMR Co., Inc. (FMRC) is the sub-adviser to this Fund.
Fidelity Variable Insurance Products Fund III – advised by Fidelity Management & Research Company
Fidelity® Variable Insurance Products Mid Cap Portfolio (Service Class 2 Shares) - seeks long-term growth of capital. FMR Co., Inc. (FMRC) is the sub-adviser to this Fund.
Goldman Sachs Variable Insurance Trust – advised by Goldman Sachs Asset Management, L.P.
Goldman Sachs VIT Mid Cap Value Fund (Institutional Shares)* - seeks long-term capital appreciation.
Goldman Sachs VIT Multi-Strategy Alternatives Portfolio (Service Shares)* - seeks long-term growth of capital.
Great-West Funds, Inc. – advised by Great-West Capital Management, LLC
Great-West Ariel Mid Cap Value Fund (Investor Class Shares) - seeks long-term capital appreciation. Ariel Investments, LLC is the sub-adviser to this Fund.
Great-West Bond Index Fund (Investor Class Shares) - seeks investment results that track the total return of the debt securities that comprise the Bloomberg Barclays U.S. Aggregate Bond Index.
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Great-West Core Bond Fund (Investor Class Shares) - seeks to provide total return, consisting of two components: (1) changes in the market value of its portfolio holdings (both realized and unrealized appreciation); and (2) income received from its portfolio holdings. Federated Investment Management Company and Wellington Management Company LLP are the sub-advisers to this Fund.
Great-West Emerging Markets Equity Fund (Investor Class Shares) - seeks long-term capital appreciation. Lazard Asset Management LLC and UBS Asset Management (Americas) Inc. are the sub-advisers to this Fund.
Great-West Global Bond Fund (formerly Great-West Templeton Global Bond Fund) (Investor Class Shares) - seeks current income with capital appreciation and growth of income. Franklin Advisers, Inc. and Mellon Investments Corporation are the sub-advisers to the Fund.
Great-West Government Money Market Fund (Investor Class Shares) - seeks as high a level of current income as is consistent with the preservation of capital and liquidity. Investment in the Great-West Government Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in this Fund.
Great-West Inflation-Protected Securities Fund (Investor Class Shares) - seeks real return consistent with the preservation of capital. Goldman Sachs Asset Management, L.P. is the sub-adviser to this Fund.
Great-West International Index Fund (Investor Class Shares) - seeks investment results, before fees and expenses that track the total return of the common stocks that comprise the MSCI EAFE (Europe, Australasia, Far East) Index. Irish Life Investment Managers Ltd. is the sub-adviser to this Fund.
Great-West International Value Fund (Investor Class Shares) - seeks long-term capital growth. LSV Asset Management and Massachusetts Financial Services Company are the sub-advisers to this Fund.
Great-West Invesco Small Cap Value Fund (Investor Class Shares) - seeks long-term growth of capital. Invesco Advisers, Inc. is the sub-adviser to this Fund.
Great-West Large Cap Growth Fund (Investor Class Shares) - seeks long-term growth of capital. Amundi Pioneer Asset Management, Inc. and J.P. Morgan Investment Management Inc. are the sub-advisers to this Fund.
Great-West Loomis Sayles Small Cap Value Fund (Investor Class Shares) - seeks long-term capital growth. Loomis, Sayles & Company, L.P. is the sub-adviser to this Fund. Loomis, Sayles & Company, L.P. is the sub-adviser to this Fund.
Great-West Mid Cap Value Fund (Investor Class Shares) - seeks long-term growth of capital. Goldman Sachs Asset Management, L.P. is the sub-adviser to this Fund.
Great-West Multi-Sector Bond Fund (formerly Great-West Loomis Sayles Bond Fund) (Investor Class Shares) - seeks high total investment return through a combination of current income and capital appreciation. Loomis, Sayles & Company, L.P. and Newfleet Asset Management, LLC are the sub-advisers to this Fund.
Great-West Putnam Equity Income Fund (Investor Class Shares) - seeks capital growth and current income. Putnam Investment Management, LLC is the sub-adviser to this Fund.
Great-West Real Estate Index Fund (Investor Class Shares) - seeks investment results, before fees and expenses, that track the total return of a benchmark index that measures the performance of publicly traded equity real estate investment trusts (“REITs”). Irish Life Investment Managers Ltd. is the sub-adviser to this Fund.
Great-West S&P Mid Cap 400® Index Fund (Investor Class Shares) - seeks investment results, before fees and expenses, which track the total return of the common stocks that comprise the Standard & Poor's (“S&P”) MidCap 400® Index. Irish Life Investment Managers Ltd. is the sub-adviser to this Fund.
Great-West S&P Small Cap 600® Index Fund (Investor Class Shares) - seeks investment results that track the total return of the common stocks that comprise the Standard & Poor's (“S&P”) SmallCap 600® Index. ) Irish Life Investment Managers Ltd. is the sub-adviser to this Fund.
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Great-West Short Duration Bond Fund (Investor Class Shares) - seeks maximum total return that is consistent with preservation of capital and liquidity.
Great-West Small Cap Growth Fund (Investor Class Shares) - seeks long-term capital appreciation. Lord, Abbett & Co. LLC and Peregrine Capital Management, LLC are the sub-advisers to the Fund.
Great-West T. Rowe Price Equity Income Fund (Investor Class Shares) - seeks substantial dividend income and also long-term capital appreciation. T. Rowe Price Associates, Inc. is the sub-adviser to this Fund.
Great-West T. Rowe Price Mid Cap Growth Fund (Investor Class Shares) - seeks long-term capital appreciation. T. Rowe Price Associates, Inc. is the sub-adviser to this Fund.
Great-West U.S. Government Securities Fund (Investor Class Shares) - seeks the highest level of return consistent with preservation of capital and substantial credit protection.
Great-West Lifetime Funds
Great-West Lifetime 2015 Fund (Investor Class Shares) - seeks income and secondarily, capital growth.
Great-West Lifetime 2020 Fund (Investor Class Shares) - seeks capital appreciation and income consistent with its current asset allocation; after 2020, it seeks income and secondarily capital growth.
Great-West Lifetime 2025 Fund (Investor Class Shares) - seeks capital appreciation and income consistent with its current asset allocation; after 2025, it seeks income and secondarily capital growth.
Great-West Lifetime 2030 Fund (Investor Class Shares) - seeks capital appreciation and income consistent with its current asset allocation; after 2030, it seeks income and secondarily capital growth.
Great-West Lifetime 2035 Fund (Investor Class Shares) - seeks capital appreciation and income consistent with its current asset allocation; after 2035, it seeks income and secondarily capital growth.
Great-West Lifetime 2040 Fund (Investor Class Shares) - seeks capital appreciation and income consistent with its current asset allocation; after 2040, it seeks income and secondarily capital growth.
Great-West Lifetime 2045 Fund (Investor Class Shares) - seeks capital appreciation and income consistent with its current asset allocation; after 2045, it seeks income and secondarily capital growth.
Great-West Lifetime 2050 Fund (Investor Class Shares) - seeks capital appreciation and income consistent with its current asset allocation; after 2050, it seeks income and secondarily capital growth.
Great-West Lifetime 2055 Fund (Investor Class Shares) - seeks capital appreciation and income consistent with its current asset allocation; after 2055, it seeks income and secondarily capital growth.
Great-West Lifetime 2060 Fund (Investor Class Shares) - seeks capital appreciation and income consistent with its current asset allocation; after 2060, it seeks income and secondarily capital growth.
Great-West Profile Funds
Each of the following Profile Funds seeks to provide an asset allocation program designed to meet certain investment goals based on an investor’s risk tolerance, investment horizon and personal objectives.
Great-West Aggressive Profile Fund (Investor Class Shares) - seeks long-term capital appreciation primarily through investments in underlying funds that emphasize equity investments.
Great-West Conservative Profile Fund (Investor Class Shares) - seeks capital preservation primarily through investments in underlying funds that emphasize fixed income investments.
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Great-West Moderate Profile Fund (Investor Class Shares) - seeks long-term capital appreciation primarily through investments in underlying funds with a relatively equal emphasis on equity and fixed income investments.
Great-West Moderately Aggressive Profile Fund (Investor Class Shares) - seeks long-term capital appreciation primarily through investments in underlying funds that emphasize equity investments and, to a lesser degree, in underlying funds that emphasize fixed income investments.
Great-West Moderately Conservative Profile Fund (Investor Class Shares) - seeks income and capital appreciation primarily through investments in underlying funds that emphasize fixed income investments and, to a lesser degree, in underlying funds that emphasize equity investments.
Janus Aspen Series – advised by Janus Capital Management LLC
Janus Henderson VIT Balanced Portfolio (Institutional Shares) - seeks long-term capital growth, consistent with preservation of capital and balanced by current income.
Janus Henderson VIT Enterprise Portfolio (Institutional Shares) - seeks long-term growth of capital.
Janus Henderson VIT Flexible Bond Portfolio (Institutional Shares) - seeks to obtain maximum total return, consistent with preservation of capital.
Janus Henderson VIT Forty Portfolio (Institutional Shares) - seeks long-term growth of capital.
Janus Henderson VIT Global Technology Portfolio (Institutional Shares) - seeks long-term growth of capital.
Janus Henderson VIT Overseas Portfolio (Institutional Shares)* - seeks long-term growth of capital.
JPMorgan Insurance Trust – advised by J.P. Morgan Investment Management Inc.
JPMorgan Insurance Trust Small Cap Core Portfolio (Class 1 Shares) - seeks capital growth over the long term.
JPMorgan Insurance Trust U.S. Equity Portfolio (Class 1 Shares) - seeks high total return.
Legg Mason Partners Variable Equity Trust – advised by Legg Mason Partners Fund Advisor, LLC
ClearBridge Variable Mid Cap Portfolio (Class I Shares) - seeks long-term growth of capital. ClearBridge Investments, LLC is the sub-adviser to this Fund.
ClearBridge Variable Small Cap Growth Portfolio (Class I Shares) - seeks long-term growth of capital. ClearBridge Investments, LLC is the sub-adviser to this Fund.
Lord Abbett Series Fund, Inc. – advised by Lord, Abbett & Co. LLC
Lord Abbett Series Fund Developing Growth Portfolio (Class VC Shares)* - seeks long-term growth of capital.
Lord Abbett Series Fund Total Return Portfolio (Class VC Shares) - seeks income and capital appreciation to produce a high total return.
MFS® Variable Insurance Trust – advised by Massachusetts Financial Services Company
MFS® Growth Series (Initial Class Shares) - seeks capital appreciation.
MFS® VIT Mid Cap Growth Series (Initial Class Shares) - seeks capital appreciation.
MFS® VIT Research Series (Initial Class Shares) - seeks capital appreciation.
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MFS® VIT Total Return Bond Series (Initial Class Shares) - seeks total return with an emphasis on current income, but also considering capital appreciation.
MFS® VIT Value Series (Initial Class Shares) - seeks capital appreciation.
MFS® Variable Insurance Trust II – advised by Massachusetts Financial Services Company
MFS® VIT II International Growth Portfolio (Initial Class Shares) - seeks capital appreciation.
MFS® Variable Insurance Trust III – advised by Massachusetts Financial Services Company
MFS® VIT III Blended Research® Small Cap Equity Portfolio (Initial Class Shares) - seeks capital appreciation.
MFS® VIT III Global Real Estate Portfolio (Initial Class Shares) - seeks total return.
MFS® VIT III Mid Cap Value Portfolio (Initial Class Shares) - seeks capital appreciation.
Neuberger Berman Advisers Management Trust – advised by Neuberger Berman Investment Advisers LLC
Neuberger Berman AMT Mid Cap Intrinsic Value Portfolio (Class I Shares) - seeks growth of capital.
Neuberger Berman AMT Sustainable Equity Portfolio (Class I Shares) - seeks long-term growth of capital by investing primarily in securities of companies that meet the Fund’s environmental, social and governance (ESG) criteria.
Oppenheimer Variable Account Funds – advised by OFI Global Asset Management, Inc.
Oppenheimer Main Street Small Cap Fund/VA® (Non-Service Shares) - seeks capital appreciation. OppenheimerFunds, Inc. is the sub-adviser to this Fund.
PIMCO Variable Insurance Trust – advised by Pacific Investment Management Company, LLC
PIMCO VIT CommodityRealReturn® Strategy Portfolio (Administrative Class Shares) - seeks maximum real return, consistent with prudent investment management.
PIMCO VIT Global Bond Opportunities Portfolio (Unhedged) (formerly PIMCO VIT Global Bond Portfolio (Unhedged)) (Administrative Class Shares) - seeks maximum total return, consistent with preservation of capital and prudent investment management.
PIMCO VIT High Yield Portfolio (Administrative Class Shares) - seeks maximum total return, consistent with preservation of capital and prudent investment management.
PIMCO VIT Low Duration Portfolio (Administrative Class Shares) - seeks maximum total return, consistent with preservation of capital and prudent investment management.
PIMCO VIT Real Return Portfolio (Administrative Class Shares) - seeks maximum real return, consistent with preservation of real capital and prudent investment management.
PIMCO VIT Total Return Portfolio (Administrative Class Shares) - seeks maximum total return, consistent with preservation of capital and prudent investment management.
Pioneer Variable Contracts Trust – advised by Amundi Pioneer Asset Management, Inc.
Pioneer Real Estate Shares VCT Portfolio (Class I Shares) - seeks long-term growth of capital; current income is a secondary objective.
Putnam Variable Trust – advised by Putnam Investment Management, LLC
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Putnam VT Equity Income Fund (Class IA Shares) - seeks capital growth and current income. Putnam Investments Limited is the sub-adviser to this Fund.
Putnam VT Global Asset Allocation Fund (Class IA Shares) - seeks long-term return consistent with preservation of capital. The Putnam Advisory Company, LLC and Putnam Investments Limited are the sub-advisers to this Fund.
Putnam VT Global Equity Fund (Class IA Shares) - seeks capital appreciation. The Putnam Advisory Company, LLC and Putnam Investments Limited are the sub-advisers to this Fund.
Putnam VT Growth Opportunities Fund (Class IA Shares) - seeks capital appreciation. Putnam Investments Limited is the sub-adviser to this Fund.
Putnam VT High Yield Fund (Class IA Shares) - seeks high current income. Putnam Investments Limited is the sub-adviser to this Fund.
Putnam VT Income Fund (Class IB Shares) - seeks high current income consistent with what the manager believes to be prudent risk. Putnam Investments Limited is the sub-adviser to this Fund.
Putnam VT International Growth Fund Class (Class IA Shares)* - seeks long-term capital appreciation. The Putnam Advisory Company, LLC and Putnam Investments Limited are the sub-advisers to this Fund.
Putnam VT International Value Fund (Class IA Shares) - seeks capital growth; current income is a secondary objective. The Putnam Advisory Company, LLC and Putnam Investments Limited are the sub-advisers to this Fund.
Putnam VT Research Fund (Class IA Shares) - seeks capital appreciation. The Putnam Advisory Company, LLC and Putnam Investments Limited are the sub-advisers to this Fund.
Putnam VT Small Cap Value Fund (Class IA Shares) - seeks capital appreciation. Putnam Investments Limited is the sub-adviser to this Fund.
Putnam VT Sustainable Future Fund (Class IA Shares) - seeks capital appreciation and, as a secondary objective, current income. Putnam Investments Limited is the sub-adviser to this Fund.
Royce Capital Fund – advised by Royce & Associates, LP
Royce Small-Cap Portfolio (Service Class Shares)* - seeks long-term growth of capital.
T. Rowe Price Equity Series, Inc. – advised by T. Rowe Price Associates, Inc.
T. Rowe Price Blue Chip Growth Portfolio (Portfolio-II Class Shares) - seeks to provide long-term capital growth; income is a secondary objective.
VanEck VIP Trust – advised by Van Eck Associates Corporation
VanEck VIP Emerging Markets Fund (Initial Class Shares)* - seeks long-term capital appreciation by investing primarily in equity securities in emerging markets around the world.
VanEck VIP Global Hard Assets Fund (Initial Class Shares) - seeks long-term capital appreciation by investing primarily in hard asset securities; income is a secondary consideration.
Victory Variable Insurance Funds – advised by Victory Capital Management, Inc.
Victory RS Small Cap Growth Equity VIP Series (Class I Shares) - seeks long-term capital growth.
* The Sub-Account investing in this Portfolio is closed to new Owners.
You should contact your representative for further information on the availability of the Divisions.
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Each Fund is subject to certain investment restrictions and policies that may not be changed without the approval of a majority of the shareholders of the Fund. See the Fund prospectuses for further information.
We automatically reinvest all dividends and capital gain distributions from the Funds in shares of the distributing Fund at their net asset value. The income and realized and unrealized gains or losses on the assets of each Division are separate and are credited to, or charged against, the particular Division without regard to income, gains or losses from any other Division or from any other part of our business. We will use amounts you allocate to a Division to purchase shares in the corresponding Fund and will redeem shares in the Funds to meet Policy obligations or make adjustments in reserves. The Funds are required to redeem their shares at net asset value and to make payment within seven days.
The Funds may also be available to separate accounts offering variable annuity, variable life products and qualified plans of other affiliated and unaffiliated insurance companies, as well as our other separate accounts. Although we do not anticipate any disadvantages to this, there is a possibility that a material conflict may arise between the interests of the Series Account and one or more of the other separate accounts participating in the Funds. A conflict may occur due to a change in law affecting the operations of variable life and variable annuity separate accounts, differences in the voting instructions of Owners and those of other companies, or some other reason. In the event of conflict, we will take any steps necessary to protect Owners, including withdrawal of the Series Account from participation in the Funds that are involved in the conflict or substitution of shares of other Funds.
Voting. We are the legal owner of all shares of the Funds held in the Divisions of the Series Account. In general, you do not have a direct right to vote the Fund shares held in the Divisions of the Series Account. However, under current law, you are entitled to give us instructions on how to vote the shares held in the Divisions. At regular and special shareholder meetings, we will vote the shares held in the Divisions in accordance with those instructions received from Owners who have an interest in the respective Divisions.
We will vote shares held in each Division for which no timely instructions from Owners are received, together with shares not attributable to a Policy, in the same proportion as those shares in that Division for which instructions are received.
The number of shares in each Division for which instructions may be given by an Owner is determined by dividing the portion of the Account Value derived from participation in that Division, if any, by the value of one share of the corresponding Fund. We will determine the number as of the record date chosen by the Fund. Fractional votes are counted. Voting instructions will be solicited in writing at least 14 days prior to the shareholders’ meeting.
We may, if required by state insurance regulators, disregard voting instructions if those instructions would require shares to be voted so as to cause a change in the sub-classification or investment policies of one or more of the Funds, or to approve or disapprove an investment management contract. In addition, we may disregard voting instructions that would require changes in the investment policies or investment adviser, provided that we reasonably disapprove of those changes in accordance with applicable federal regulations. If we disregard voting instructions, we will advise you of that action and our reasons for it in our next communication to Owners.
This description reflects our current view of applicable federal securities law. Should the applicable federal securities laws change so as to permit us to vote shares held in the Series Account in our own right, we may elect to do so.
Fixed Account
The Fixed Account is part of our General Account. We have absolute ownership of the assets in the Fixed Account. Except as limited by law, we have sole control over the investment of the General Account assets. You do not share in the investment experience of the General Account, but are allowed to allocate and transfer Account Value into the Fixed Account. We assume the risk of investment gain or loss on this amount. All assets in the General Account are subject to our general liabilities from business operations. The Fixed Account does not participate in the investment performance of the Sub-Accounts. The Policy gives the Company the right to impose limits on the amount each Owner can invest in the Fixed Account and such limits are subject to change at the sole discretion of the Company.
The Fixed Account is not registered with the SEC under the Securities Act of 1933. Neither the Fixed Account nor the General Account have been registered as an investment company under the 1940 Act. As a result, neither the Fixed Account nor the General Account are generally subject to regulation under either Act. However, certain disclosures may be subject to generally applicable provisions of the federal securities laws regarding the accuracy of statements made in registration statements.
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The Fixed Account offers a guarantee of principal, after deductions for fees and expenses. We also guarantee that amounts you allocated to the Fixed Account will earn interest at a rate of at least the minimum guaranteed interest rate indicated in your Policy. We do not rely on predetermined formulas to set Fixed Account interest rates. We will review the interest rate at least once a year, but at the Company’s discretion we may reset the interest rate monthly.
The Fixed Account may not be available in all states.
Employer-Financed Insurance Purchase Arrangements--Tax and Other Legal Issues
In addition to corporations and other employers, the Policy is also available for purchase by individuals whose employers will pay some or all of the Premiums due under the Policy pursuant to an employer-financed insurance purchase arrangement. In such cases, references in this prospectus to the “Owner” of the Policy will refer to the individual and, depending on the context, references to the “payment of premiums” will refer to payments to Great-West under the Policy by the employer and/or by the employee.
Employers and employees contemplating the purchase of a Policy as a part of an employer-financed insurance purchase arrangement should consult qualified legal and tax counsel with regard to the issues presented by such a transaction. For this purpose, an employer-financed insurance purchase arrangement is a plan or arrangement which contemplates that an employer will pay one or more Premiums for the purchase of a Policy that will be owned, subject to certain restrictions, by an employee or by a person or entity designated by the employee.
The general considerations applicable to such a purchase include the following:
1. Payments by the employer under an employer-financed insurance purchase arrangement will only be deductible for income tax purposes when the payments are taxable to the employee with respect to whom they are made.
2. Imposition of certain types of restrictions, specifically a substantial risk of forfeiture, on the purchased Policy may defer both the deductibility of the payments to the employer and their taxability to the employee.
3. The payment of some or all of the Premiums by the employer may create an ERISA welfare benefit plan which is subject to the reporting, disclosure, fiduciary and enforcement provisions of ERISA.
4. The payment of some or all of the Premiums by the employer will not prevent the Owner from being treated as the owner of the Policy for federal income tax purposes.
5. Under some circumstances, the failure of the employer to make one or more of the planned Premiums under the Policy may cause a lapse of the Policy.
6. An employee considering whether to participate in an employer-financed insurance purchase arrangement should consider whether the financial and tax benefits of the ownership of the Policy outweigh the costs, such as sales loads and cost of insurance charges that will be incurred as a result of the purchase and ownership of the Policy.
7. An employee considering whether to participate in an employer-financed insurance purchase arrangement should consider whether the designation of another person or entity as the owner of the Policy will have adverse consequences under applicable gift, estate, or inheritance tax laws.
8. An employee considering whether to participate in an employer-financed insurance purchase arrangement should consider whether the financial performance of the Policy will support any planned withdrawals or borrowings under the Policy.
9. In an employer-financed insurance purchase arrangement, the procedures described below in “Market Timing and Excessive Trading”, which are designed to prevent or minimize market timing and excessive trading by Owners may, in certain circumstances, require us to perform standardized trade monitoring; in other circumstances such monitoring will be performed by the Fund. Certain Funds require us to provide reports of the Owner’s trading activity, if prohibited trading, as defined by the Fund, is suspected. The determination of whether there is prohibited trading based on the Funds’ definition of prohibited trading may be made by us or by the Fund. The Fund determines the restrictions imposed, which could be one of the four restrictions described in this prospectus or by restricting the Owner from making Transfers into the identified Fund for the period of time specified by the Fund.
Charges and Deductions
The Policy has insurance features and investment features, and there are costs related to each. This section describes the fees and charges that we may make under the Policy to compensate for: (1) the services and benefits we provide; (2) the costs and expenses we incur; and (3) the risks we assume. The fees and charges we deduct under this Policy may result in a profit to us.
Expense Charge Applied to Premium. We will deduct a maximum charge of 10% from each Premium payment, which is broken down as follows. A maximum of 6.5% will be deducted as sales load to compensate us in part for sales and promotional expenses in connection with selling the Policies, such as commissions, the cost of preparing sales literature, other promotional activities and other direct and indirect expenses. A maximum of 3.5% of Premium will be used to cover Premium taxes and certain federal income tax
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obligations resulting from the receipt of Premiums. All states and some cities and municipalities impose taxes on Premiums paid for life insurance, which generally range from 2% to 4% of Premium but may exceed 4% in some states. The amount of your state’s Premium tax may be higher or lower than the amount attributable to Premium taxes that we deduct from your Premium payments.
The current expense charge applied to Premium for sales load is 2.5% of Premium up to target and 1.0% of Premium in excess of target for Policy Years 1 through 10. Your target Premium will depend on the initial Total Face Amount of your Policy, your Issue Age, your sex (except in unisex states), and rating class (if any) which equals the maximum Premium payable under the seven-pay test such that the Policy remains compliant with 7702A of the Code. Thereafter, there is no charge for sales load. The current expense charge applied to Premium to cover our Premium taxes and the federal tax obligation described above is 3.5% in all Policy Years.
Where permitted by applicable state insurance law, if your Policy is surrendered for the Surrender Benefit (Account Value less any outstanding Policy loans and less accrued loan interest) within the first seven Policy Years, we will return a percentage of the expense charge. The return of expense charge will be a percentage of your Account Value on the date the Request for surrender was received by us at our Corporate Headquarters. This amount will be in addition to the Surrender Benefit.
The return of expense charge is based on the following:
Policy Year Percentage of Account Value
Returned
Year 1 7%
Year 2 6%
Year 3 5%
Year 4 4%
Year 5 3%
Year 6 2%
Year 7 1%
Year 8 0%
As described under the heading “Term Life Insurance Rider” below, we may offer a term life insurance rider that may have the effect of reducing the sales charge and the return of expense charge you pay on purchasing an equivalent amount of insurance. We offer this rider in circumstances that result in the savings of sales and distribution expenses and administrative costs. To qualify, a corporation, employer, or other purchaser must satisfy certain criteria such as, for example, the number of Policies it expects to purchase and the expected Total Face Amount under all such Policies. Generally, the sales contacts and effort and administrative costs per Policy depend on factors such as the number of Policies purchased by a single Owner, the purpose for which the Policies are purchased, and the characteristics of the proposed Insureds. The amount of reduction and the criteria for qualification are related to the sales effort and administrative costs resulting from sales to a qualifying Owner. Great-West from time to time may modify on a uniform basis both the amounts of reductions and the criteria for qualification. Reductions in these charges will not be unfairly discriminatory against any person, including the affected Owners funded by the Series Account.
Mortality and Expense Risk Charge. This charge is for the mortality and expense risks we assume with respect to the Policy. It is based on an annual rate that we accrue against each Division of the Series Account on a daily basis and deduct on the first day of each Policy month by cancelling accumulation units on a pro-rata basis across all Sub-Accounts. We convert the mortality and expense risk charge into a daily rate by dividing the annual rate by 365. The mortality and expense risk charge will be determined by us from time to time based on our expectations of future interest, mortality experience, persistency, expenses and taxes, but will not exceed 0.90% annually. Currently, the charge is 0.28% for Policy Years 1 through 20 and 0.10% thereafter. On surrender and payment of the death benefit, we will deduct the pro-rata portion of the mortality and expense risk charge that has accrued.
Because the value of your Sub-Accounts can vary from month-to-month, the monthly deduction for the mortality and expense risk charge will also vary. If the amount the mortality and expense risk charge is insufficient to cover the costs resulting from the mortality and expense risks that we assume, we will bear the loss. If the amount we charge is more than sufficient to cover such costs, we will make a profit on the charge. To the extent that we do make a profit from this charge, we may use this profit for any corporate purpose, including the payment of administrative, marketing, distribution, and other expenses in connection with the Policies.
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The mortality risk we assume is that the group of lives insured under the Policies may, on average, live for shorter periods of time than we estimated. The expense risk we assume is that the costs of issuing and administering Policies may be more than we estimated.
Monthly Deduction. We make a monthly deduction from your Account Value on the Policy Date and the first day of each Policy Month. This monthly deduction will be charged proportionally to the amounts in the Divisions.
The monthly deduction equals the sum of 1, 2, 3, 4 and 5 where:
1. is the cost of insurance charge (the monthly risk charge) equal to the current monthly risk rate (described below) multiplied by the net amount at risk divided by 1,000;
2. is the service charge;
3. is the monthly cost of any additional benefits provided by riders which are a part of your Policy;
4. is any extra risk charge if the Insured is in a rated class as specified in your Policy; and
5. is the accrued mortality and expense risk charge.
The net amount at risk equals:
• the death benefit divided by 1.00327374; less
• your Account Value on the first day of a Policy Month prior to assessing the monthly deduction.
If there are increases in the Total Face Amount other than increases caused by changes in the death benefit option, the monthly deduction described above is determined separately for the initial Total Face Amount and each increase in the Total Face Amount. In calculating the net amount at risk, your Account Value will first be allocated to the most recent increase in the death benefit and then to each increase in the Total Face Amount in the reverse order in which the increases were made.
Monthly Risk Rates. The monthly risk rate is used to determine the cost of insurance charge (monthly risk charge) for providing insurance coverage under the Policy. The monthly risk rate is applied to the amount at risk. The monthly risk rates (except for any such rate applicable to an increase in the Total Face Amount) are based on the length of time your Policy has been in force and the Insured’s sex (in the case of non-unisex Policies) and Issue Age. If the Insured is in a rated class as specified in your Policy, we will deduct an extra risk charge that reflects that class rating. The monthly risk rates applicable to each increase in the Total Face Amount are based on the length of time the increase has been in force and the Insured’s sex (in the case of non-unisex Policies), Issue Age, and class rating, if any. The monthly risk rates will be determined by us from time to time based on our expectations of future experience with respect to mortality, investment earnings, persistency, capital and reserve requirements, interest rates and expenses (including taxes), but will not exceed the guaranteed maximum monthly risk rates based on the 2001 Commissioner’s Standard Ordinary, Age Nearest Birthday, Male/Female, Smoker/Non-Smoker Ultimate Mortality Table (“2001 CSO”). Currently, the guaranteed minimum monthly risk charge is $0.02 per $1000 and the guaranteed maximum is $83.33 per $1000. If your Policy is issued in Montana, unisex rates are charged and these rates will never exceed the male Smoker Ultimate Mortality Table.
The guaranteed maximum monthly risk rates reflect any class rating applicable to the Policy. We have filed a detailed statement of our methods for computing Account Values with the insurance department in each jurisdiction where the Policy was delivered. These values are equal to or exceed the minimum required by law.
The monthly risk rate is greater on policies that require less underwriting to be performed regardless of the health of the individual. Monthly risk rate charges will be greatest on guaranteed issue policies, followed by simplified issue policies, then fully underwritten policies.
Service Charge. We will deduct a maximum of $10 from your Account Value on the first day of each Policy Month to cover our administrative costs, such as salaries, postage, telephone, office equipment and periodic reports. This charge may be increased or decreased by us from time to time based on our expectations of future expenses, but will never exceed $10-5 per Policy Month. The service charge will be deducted proportionally from the Divisions. The current service charge is $7.50 per Policy Month.
Transfer Fee. A maximum administrative charge of $10 per Transfer of Account Value from one Division to other Divisions will be deducted from your Account Value for all Transfers in excess of 12 made in the same Policy Year. The allocation of your Initial Premium from the Great-West Government Money Market Division to your selected Divisions will not count toward the 12 free Transfers. Similarly, Transfers made under dollar cost averaging and periodic rebalancing under the rebalancer option are not subject to the fee and do not count as Transfers for this purpose (except a one-time rebalancing under the rebalancer option will count as one Transfer). All Transfers Requested on the same Business Day will be aggregated and counted as one Transfer. The current charge is $10 per Transfer.
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Partial Withdrawal Fee. A maximum administrative fee of $25 will be deducted from your Account Value for all partial withdrawals after the first made in the same Policy Year. The partial withdrawal fee will be deducted proportionally from all Divisions.
Surrender Charges. Your Policy has no surrender charges.
Change of Death Benefit Option Fee. A maximum administrative fee of $100 will be deducted from your Account Value each time you change your death benefit option. The change of death benefit fee will be deducted proportionally from all Divisions.
Fund Expenses. You indirectly bear the charges and expenses of the Funds whose shares are held by the Divisions to which you allocate your Account Value. The Series Account purchases shares of the Funds at net asset value. Each Fund’s net asset value reflects investment advisory fees and administrative expenses already deducted from the Fund’s assets. For more information concerning the investment advisory fees and other charges against the Funds, see the Fund prospectuses and the statements of additional information for the Funds, which are available upon Request.
We may receive compensation from the investment advisers or administrators of the Funds. Such compensation will be consistent with the services we provide or the cost savings resulting from the arrangement and, therefore, may differ between Funds. See “Payments We Receive” above.
General Description of Policy
Unless otherwise indicated, the description of the Policy in this prospectus assumes that the Policy is in force, there is no Policy Debt and current federal tax laws apply. The Policy described in this prospectus is offered to corporations and other employers to provide life insurance coverage in connection with, among other things, deferred compensation plans and employer-financed insurance purchase arrangements. We issue Policies on the lives of prospective Insureds who meet our underwriting standards.
Policy Rights
Owner. While the Insured is alive, unless you have assigned any of these rights, you may:
• transfer ownership to a new Owner;
• name a contingent owner who will automatically become the Owner of the Policy if you die before the Insured;
• change or revoke a contingent owner;
• change or revoke a Beneficiary (unless a previous Beneficiary designation was irrevocable);
• exercise all other rights in the Policy;
• increase or decrease the Total Face Amount, subject to the other provisions of the Policy; and
• change the death benefit option, subject to the other provisions of the Policy.
When you transfer your rights to a new Owner, you automatically revoke any prior contingent owner designation. When you want to change or revoke a prior Beneficiary designation, you have to specify that action. You do not affect a prior Beneficiary when you merely transfer ownership, or change or revoke a contingent owner designation.
You do not need the consent of a Beneficiary or a contingent owner in order to exercise any of your rights. However, you must give us written notice satisfactory to us of the Requested action. Your Request will then, except as otherwise specified herein, be effective as of the date you signed the form, subject to any action taken before it was received by us.
Beneficiary. The Beneficiary has no rights in the Policy until the death of the Insured, except an irrevocable Beneficiary cannot be changed without the consent of that Beneficiary. If a Beneficiary is alive at that time, the Beneficiary will be entitled to payment of the Death Benefit Proceeds as they become due.
Policy Limitations
Allocation of Net Premiums. Except as otherwise described herein, your net Premium will be allocated in accordance with the allocation percentages you select. Percentages must total 100% and can be up to two decimal places.
We will credit Premium payments received prior to the end of the free look period as described in the “Free Look Period” section of this prospectus below.
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You may change your allocation percentages at any time by Request.
Transfers Among Divisions. Subject to our rules as they may exist from time to time, you may at any time after the Free-Look Period Transfer to another Division all or a portion of the Account Value allocated to a Division. We will make Transfers pursuant to a Request.
Transfers may be Requested by indicating the Transfer of either a specified dollar amount or a specified percentage of the Division’s value from which the Transfer will be made.
Transfer privileges are subject to our consent. We reserve the right to impose limitations on Transfers, including, but not limited to: (1) the minimum amount that may be Transferred; and (2) the minimum amount that may remain in a Division following a Transfer from that Division. In addition, we do not intend to enforce the restriction on Transfers set forth in your Policy except in cases of identified market timing unless the Sub-Account has additional restrictions that are noted in the respective Fund’s prospectus. See “Market Timing & Excessive Trading” below.
A fee of $10 per Transfer will apply for all Transfers in excess of 12 made in a Policy Year. We may increase or decrease the Transfer charge; however, it is guaranteed to never exceed $10 per Transfer. All Transfers Requested on the same Business Day will count as only one Transfer toward the 12 free Transfers. The Transfer of your Initial Premium from the Great-West Government Money Market Division to your selected Divisions does not count toward the 12 free Transfers. Likewise, any Transfers under dollar cost averaging or periodic rebalancing of your Account Value under the rebalancer option do not count toward the 12 free Transfers (a one-time rebalancing, however, will be counted as one Transfer).
Fixed Account Transfers. Transfers into the Fixed Account are limited to once every 60 days. If the Company has imposed a limit on the amount that can be allocated to the Fixed Account, then your Transfer will be rejected if it would cause the value of the Fixed Account to exceed such limit. Transfers from the Fixed Account may only be made once per year. The maximum to be transferred out will be the greater of 25% of your balance in the Fixed Account or the amount of the Transfer in the previous 365 day period.
Market Timing & Excessive Trading. The Policies are intended for long-term investment and not for the purpose of market timing or excessive trading activity. Market timing activity may dilute the interests of Owners in the Funds. Market timing generally involves frequent or unusually large transfers that are intended to take advantage of short-term fluctuations in the value of a Fund’s portfolio securities and the reflection of that change in the Fund’s share price. In addition, frequent or unusually large transfers may harm performance by increasing Fund expenses and disrupting Fund management strategies. For example, excessive trading may result in forced liquidations of portfolio securities or cause the Fund to keep a relatively higher cash position, resulting in increased brokerage costs and lost investment opportunities.
We maintain procedures designed to discourage market timing and excessive trading by Owners. As part of those procedures, we will rely on the Funds to monitor for such activity. If a Fund believes such activity has occurred, we will scrutinize the Owner’s activity and request a determination from the Fund as to whether such activity constitutes market timing or excessive trading. If the Fund determines that the activity constitutes market timing or excessive trading, we will contact the Owner in writing to request that market timing and/or excessive trading stop immediately. We will then provide a subsequent report of the Owner’s trading activity to the Fund. If the Fund determines that the Owner has not ceased improper trading, and upon request of the Fund, we will inform the Owner in writing that a trading restriction is being implemented. The four possible trading restrictions are:
• Restrict the Owner to inquiry-only access for the web and voice response unit so that the Owner will only be permitted to make Transfer Requests by written Request mailed to us through U.S. mail (“U.S. Mail Restriction”); the Owner will not be permitted to make Transfer Requests via overnight mail, fax, the web, or the call center. Once the U.S. Mail Restriction has been in place for 180 days, the restricted Owner may Request that we lift the U.S. Mail Restriction by signing, dating and returning a form to us whereby the Owner acknowledges the potentially harmful effects of market timing and/or excessive trading on Funds and other investors, represents that no further market timing or excessive trading will occur, and acknowledges that we may implement further restrictions, if necessary, to stop improper trading by the Owner;
• Close the applicable Fund to all new monies, including contributions and Transfers in;
• Restrict all Owners to one purchase in the applicable Fund per 90 day period; or
• Remove the Fund as an investment option and convert all allocations in that Fund to a different investment option.
The discretionary nature of our procedures creates a risk that we may treat some Owners differently than others.
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Our market timing and excessive trading procedures are such that we do not impose trading restrictions unless or until a Fund first detects and notifies us of potential market timing or excessive trading activity. Accordingly, we cannot prevent all market timing or excessive trading transfer activity before it occurs, as it may not be possible to identify it unless and until a trading pattern is established. To the extent the Funds do not detect and notify us of market timing and/or excessive trading or the trading restrictions we impose fail to curtail it, it is possible that a market timer or excessive trader may be able to make market timing and/or excessive trading transactions with the result that the management of the Funds may be disrupted and the Owners may suffer detrimental effects such as increased costs, reduced performance, and dilution of their interests in the affected Funds.
We endeavor to ensure that our procedures are uniformly and consistently applied to all Owners, and we do not exempt any Owners from these procedures. In addition, we do not enter into agreements with Owners whereby we permit market timing or excessive trading. Subject to applicable state law and the terms of each Policy, we reserve the right without prior notice to modify, restrict, suspend or eliminate the Transfer privileges (including telephone Transfers) at any time, to require that all Transfer Requests be made by you and not by your designee, and to require that each Transfer Request be made by a separate communication to us. We also reserve the right to require that each Transfer Request be submitted in writing and be signed by you.
The Funds may have adopted their own policies and procedures with respect to frequent purchases and redemptions of their respective shares. The prospectuses for the Funds should describe any such policies and procedures. The frequent trading policies and procedures of a Fund may be different, and more or less restrictive, than the frequent trading policies and procedures of other Funds and the policies and procedures we have adopted to discourage market timing and excessive trading. For example, a Fund may impose a redemption fee. Owners should also be aware that we may not have the contractual obligation or the operational capacity to apply the frequent trading policies and procedures of the respective Funds that would be affected by the Transfers.
We may revise our market timing and excessive trading policy and related procedures at our sole discretion, at any time and without prior notice, as we deem necessary or appropriate to comply with state or federal regulatory requirements or to impose additional or alternative restrictions on Owners engaging in market timing or excessive trading. In addition, our orders to purchase shares of the Funds are generally subject to acceptance by the Fund, and in some cases a Fund may reject or reverse our purchase order. Therefore, we reserve the right to reject any Owner’s Transfer Request if our order to purchase shares of the Fund is not accepted by, or is reversed by, an applicable Fund.
You should note that other insurance companies and retirement plans may invest in the Funds and that those companies or plans may or may not have their own policies and procedures on frequent transfers.
You should also know that the purchase and redemption orders received by the Funds generally are “omnibus” orders from intermediaries such as retirement plans or separate accounts funding variable insurance contracts. Omnibus orders reflect the aggregation and netting of multiple orders from individual retirement plan participants and/or individual owners of variable insurance contracts. The nature of such orders may limit the Funds’ ability to apply their respective frequent trading policies and procedures. As a result, there is a risk that the Funds may not be able to detect potential market timing and/or excessive trading activities in the omnibus orders they receive. We cannot guarantee that the Funds will not be harmed by transfer activity relating to the retirement plans and/or other insurance companies that invest in the Funds. If the policies and procedures of other insurance companies or retirement plans fail to successfully discourage frequent transfer activity, it may affect the value of your investments in the Funds. In addition, if a Fund believes that an omnibus order we submit may reflect one or more Transfer Requests from an Owner engaged in frequent transfer activity, the Fund may reject the entire omnibus order and thereby interfere with our ability to satisfy your Request even if you have not made frequent Transfers. For Transfers into more than one investment option, we may reject or reverse the entire Transfer Request if any part of it is not accepted by or is reversed by a Fund.
Exchange of Policy. You may exchange your Policy for a new policy issued by Great-West that does not provide for variable benefits. The new policy will have the same Policy Date, Issue Age, and Insured as your Policy on the date of the exchange. The exchange must be made within 24 Policy Months after the Issue Date of your Policy and all Policy Debt must be repaid.
The cash value of your current Policy will be applied to the new policy as the Initial Premium.
Age Requirements. An Insured’s Issue Age must be between 20 and 85 for Policies issued on a fully underwritten basis and between 20 and 70 for Policies issued on a guaranteed underwriting or a simplified underwriting basis.
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Policy or Registrant Changes
Addition, Deletion or Substitution of Investment Options. Great-West selects the investment options offered though the Contract based on several criteria, including but not limited to asset class coverage, brand recognition, the reputation and tenure of the adviser or sub-adviser, expenses, performance, marketing, availability, investment conditions, and the qualifications of each investment company. Another factor we consider is whether the investment option or an affiliate of the investment option will compensate Great-West for providing certain administrative, marketing, or support services that would otherwise be provided by the investment option, its investment adviser, or its distributor. For more information on such compensation, see “Charges and Deductions” in this prospectus. When we develop and offer a variable annuity product in cooperation with a fund family or a distributor, Great-West will generally include investment options based on recommendations made by the fund family or the distributor, whose selection criteria may differ from our own. We have selected investment options of the Great-West Funds at least in part because they are managed by our directly owned subsidiary.
Great-West does not control the investment options and cannot guarantee that any of the investment options will always be available for allocation of Contributions or Transfers. We retain the right to make changes in the Series Account and in its investments, including the right to establish new sub-accounts or to eliminate existing sub-accounts. Great-West periodically reviews each investment option and reserves the right to discontinue the offering of any investment option if we determine the investment option no longer meets one or more of the criteria, or if the investment option has not attracted significant allocations. If an investment option is discontinued, we may substitute shares of another investment option or shares of another investment company for the discontinued investment option’s shares. Any share substitution will comply with the requirements of the 1940 Act. If you are contributing to a sub-account corresponding to an investment option that is being discontinued, you will be given notice prior to the investment option’s elimination. Before a sub-account is eliminated, we will notify you and request that you reallocate the amounts invested in the sub-account to be eliminated.
The Series Account. We reserve the right to operate the Series Account in any form permitted by law, to take any action necessary to comply with applicable law or obtain and continue any exemption from applicable laws, to assess a charge for taxes attributable to the operation of the Series Account or for other taxes, as described in “Charges and Deductions” section of this prospectus, and to change the way in which we assess other charges, as long as the total other charges do not exceed the maximum guaranteed charges under the Policies.
Entire Contract. Your entire contract with us consists of the Policy, including the attached copy of your application and any attached copies of supplemental applications for increases in the Total Face Amount, any endorsements and any riders. Any illustrations prepared in connection with the Policy do not form a part of our contract with you and are intended solely to provide information about how values under the Policy, such as Cash Surrender Value, death benefit and Account Value, will change with the investment experience of the Divisions, and such information is based solely upon data available at the time such illustrations are prepared.
Alteration. Sales representatives do not have any authority to either alter or modify your Policy or to waive any of its provisions. The only persons with this authority are our president, secretary, or one of our vice presidents.
Modification. Upon notice to you, we may modify the Policy if such a modification –
• is necessary to make the Policy or the Series Account comply with any law or regulation issued by a governmental agency to which we are, or the Series Account is, subject;
• is necessary to assure continued qualification of the Policy under the Code or other federal or state laws as a life insurance policy;
• is necessary to reflect a change in the operation of the Series Account or the Divisions; or
• adds, deletes or otherwise changes Division options.
We also reserve the right to modify certain provisions of the Policy as stated in those provisions. In the event of any such modification, we may make appropriate amendment to the Policy to reflect such modification.
Assignments. During the lifetime of the Insured, you may assign all or some of your rights under the Policy. All assignments must be filed at our Corporate Headquarters and must be in written form satisfactory to us. The assignment will then be effective as of the date you signed the form, subject to any action taken before we received it. We are not responsible for the validity or legal effect of any assignment.
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Notice and Elections. To be effective, all notices and elections under the Policy must be in writing, signed by you, and received by us at our Corporate Headquarters. Certain exceptions may apply. Unless otherwise provided in the Policy, all notices, Requests and elections will be effective when received at our Corporate Headquarters complete with all necessary information.
Account Value
Your Account Value is the sum of your interests in each Division you have chosen, plus your interests in the Fixed Account, plus the amount in your Loan Account. The Account Value varies depending upon the Premiums paid, expense charges applied to Premium, mortality and expense risk charge, service charges, monthly risk charges, partial withdrawals, fees, Policy loans and the net investment factor (described below) for the Divisions to which your Account Value is allocated and the interest credited to the Fixed Account.
We measure the amounts in the Divisions in terms of Units and Unit Values. On any given date, your interest in a Division is equal to the Unit Value multiplied by the number of Units credited to you in that Division. Amounts allocated to a Division will be used to purchase Units of that Division. Units are redeemed when you make partial withdrawals, undertake Policy loans or Transfer amounts from a Division, and for the payment of service charges, monthly mortality and expense charges, monthly risk charges and other fees. The number of Units of each Division purchased or redeemed is determined by dividing the dollar amount of the transaction by the Unit Value for the Division. The Unit Value for each Division was established at $10 for the first Valuation Date of the Division. The Unit Value for any subsequent Valuation Date is equal to the Unit Value for the preceding Valuation Date multiplied by the net investment factor (determined as provided below). The Unit Value of a Division for any Valuation Date is determined as of the close of the Valuation Period ending on that Valuation Date.
Transactions are processed on the date we receive a Premium at our Corporate Headquarters or upon approval of a Request. If your Premium or Request is received on a date that is not a Valuation Date, or after the close of the NYSE on a Valuation Date, the transaction will be processed on the next Valuation Date.
The Account Value on the Policy Date equals:
• that portion of net Premium received and allocated to the Division, plus
• that portion of net Premium received and allocated to the Fixed Account, less
• the service charges due on the Policy Date, less
• the monthly risk charge due on the Policy Date, less
• the monthly mortality and expense risk charge due on the Policy Date, less
• the monthly risk charge for any riders due on the Policy Date.
We apply your Initial Premium on the Policy Date, which will be the Issue Date (if we have already received your Initial Premium) or the Business Day we receive a Premium equal to, or in excess of, the Initial Premium after we have approved your application.
The Account Value attributable to each Division of the Series Account on the subsequent Valuation Dates is equal to:
• the Account Value attributable to the Division on the preceding Valuation Date multiplied by that Division’s net investment factor, plus
• that portion of net Premium received and allocated to the Division during the current Valuation Period, plus
• that portion of the value of the Loan Account Transferred to the Division upon repayment of a Policy loan during the current Valuation Period, plus
• any amounts Transferred by you to the Division from another Division during the current Valuation Period, less
• any amounts Transferred by you from the Division to another Division during the current Valuation Period, less
• that portion of any partial withdrawals deducted from the Division during the current Valuation Period, less
• that portion of any Account Value Transferred from the Division to the Loan Account during the current Valuation Period, less
• that portion of fees due in connection with a partial withdrawal charged to the Division, less
• the pro-rata portion of the mortality and expense risk charge accrued and charged to the Division, less
• if the first day of a Policy Month occurs during the current Valuation Period, that portion of the service charge for the Policy Month just beginning charged to the Division, less
• if the first day of a Policy Month occurs during the current Valuation Period, that portion of the monthly risk charge for the Policy Month just beginning charged to the Division, less
• if the first day of a Policy Month occurs during the current Valuation Period, that portion of the mortality and expense risk charge for the Policy Month just ending charged to the Division, less
• if the first day of a Policy Month occurs during the current Valuation Period, that Division’s portion of the cost for any riders and any extra risk charge if the Insured is in a rated class as specified in your Policy, for the Policy Month just beginning.
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Net Investment Factor. The net investment factor for each Division for any Valuation Period is determined by dividing (1) by (2) where:
1. is the net result of:
• the net asset value of a Fund share held in the Division determined as of the end of the current Valuation Period, plus
• the per share amount of any dividend or other distribution declared on Fund shares held in the Division if the “ex-dividend” date occurs during the current Valuation Period, plus or minus
• a per share credit or charge with respect to any taxes incurred by or reserved for, or paid by us if not previously reserved for, during the current Valuation Period which are determined by us to be attributable to the operation of the Division; and
2. is the net result of:
• the net asset value of a Fund share held in the Division determined as of the end of the preceding Valuation Period, plus or minus
• a per share credit or charge with respect to any taxes incurred by or reserved for, or paid by us if not previously reserved for, during the preceding Valuation Period which are determined by us to be attributable to the operation of the Division.
The net investment factor may be greater or less than or equal to one. Therefore, the Unit Value may increase, decrease or remain unchanged.
The net asset value reflects the investment advisory fees and other expenses that are deducted from the assets of each Fund. These fees and expenses are not fixed or specified under the terms of the Policy, may differ between Funds, and may vary from year to year. Fund fees and expenses are described in each Fund prospectus.
The Fixed Account Value is:
• Premiums, less Expense Charges, allocated to the Fixed Account; plus •Sub-Account Value transferred to the Fixed Account; plus
• Interest credited to the Fixed Account; minus
• Partial withdrawals from the Fixed Account including any applicable partial withdrawal charges; minus
• The portion of any accrued policy fees and charges allocated to the Fixed Account; minus
• Loans from the Fixed Account; minus
• Transfers from the Fixed Account, including any applicable transfer charges.
During any Policy Month the Fixed Account Value will be calculated on a consistent basis. For purposes of crediting interest, Policy value deducted, transferred or withdrawn from the Fixed Account is accounted for on a first in first out basis.
The mortality and expense risk charge for the Valuation Period is the annual mortality and expense risk charge divided by 365 multiplied by the number of days in the Valuation Period.
Splitting Units. We reserve the right to split or combine the value of Units. In effecting any such change, strict equity will be preserved and no such change will have a material effect on the benefits or other provisions of your Policy.
Other Provisions and Benefits
Misstatement of Age or Sex (Non-Unisex Policy). If the age or (in the case of a non-unisex Policy) sex of the Insured is stated incorrectly in your Policy application or rider application, we will adjust the amount payable appropriately as described in the Policy.
If we determine that the Insured was not eligible for coverage under the Policy after we discover a misstatement of the Insured’s age, our liability will be limited to a return of Premiums paid, less any partial withdrawals, any Policy Debt, and the cost for riders.
Suicide. If the Insured, whether sane or insane, commits suicide within two years after your Policy’s Issue Date (one year if your Policy is issued in North Dakota) or two years within the date of reinstatement (one year if your Policy is issued in North Dakota), we will not pay any part of the Death Benefit Proceeds. We will pay the Beneficiary the Premiums paid, less the amount of any Policy Debt, any partial withdrawals and the cost for riders.
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If the Insured, whether sane or insane, commits suicide within two years after the effective date of an increase in the Total Face Amount (one year if your Policy is issued in North Dakota), then our liability as to that increase will be the cost of insurance for that increase and that portion of the Account Value attributable to that increase. The Total Face Amount of the Policy will be reduced to the Total Face Amount that was in effect prior to the increase.
Incontestability. All statements made in the application or in a supplemental application are representations and not warranties. We relied and will continue to rely on those statements when approving the issuance, increase in face amount, increase in death benefit over Premium paid, or change in death benefit option of the Policy. In the absence of fraud, we can use no statement in defense of a claim or to cancel the Policy for misrepresentation unless the statement was made in the application or in a supplemental application. In the absence of fraud, after the Policy has been in force during the lifetime of the Insured for a period of two years from its Issue Date, we cannot contest it except for non-payment of Premiums. However, any increase in the Total Face Amount which is effective after the Issue Date will be incontestable only after such increase has been in force during the lifetime of the Insured for two years from the effective date of coverage of such increase.
Paid-Up Life Insurance. When the Insured reaches Attained Age 121 (if your Policy is in force at that time), the entire Account Value of your Policy (less outstanding Policy Debt) will be applied as a single Premium to purchase “paid-up” insurance which means all premiums have been paid and there are no additional premiums due. Outstanding Policy Debt will be repaid at this time. This repayment may be treated as a taxable distribution to you if your Policy is not a MEC. The net single Premium for this insurance will be based on the 2001 Commissioner’s Standard Ordinary, Sex Distinct, Non-Smoker Mortality Table and 4% interest. The cash value of your paid-up insurance, which initially is equal to the net single Premium, will remain in the Divisions of the Series Account in accordance with your then current allocation. While the paid-up life insurance is in effect your assets will remain in the Series Account. You may change your Division allocation instructions and you may Transfer your cash value among the Divisions. All charges under your Policy, to the extent applicable, will continue to be assessed, except we will no longer make a deduction each Policy Month for the monthly risk charge. Your death benefit will be fixed by the Code for Insured age 99. As your cash value changes based on the investment experience of the Divisions, the death benefit will increase or decrease accordingly. You may surrender the paid-up insurance Policy at any time and, if surrendered within 30 days of a Policy Anniversary, its cash value will not be less than it was on that Policy Anniversary. Please see “Federal Income Tax Considerations - Treatment When Insured Reaches Attained Age 121” below.
Supplemental Benefits. The following supplemental benefit riders are available, subject to certain limitations. An additional monthly risk charge will be assessed for each rider that is in force as part of the monthly deduction from your Account Value. If a supplemental benefit rider is terminated, the monthly risk charge for such rider will end immediately. See fee tables above.
Term Life Insurance Rider. This rider provides term life insurance on the Insured. Coverage is renewable annually until the Insured’s Attained Age 121. The amount of coverage provided under this rider varies from month to month as described below. We will pay the rider’s death benefit to the Beneficiary when we receive Due Proof of death of the Insured while this rider is in force.
This rider provides the same three death benefit options as your Policy. The option you choose under the rider must at all times be the same as the option you have chosen for your Policy. The rider’s death benefit will be determined at the beginning of each Policy Month in accordance with one of those options. For each of the options, any outstanding Policy Debt will reduce your death benefit.
If you purchase this rider, the Total Face Amount shown on your Policy’s specifications page will be equal to the minimum amount of coverage provided by this rider plus the base face amount (which is the minimum death benefit under your Policy without the rider’s death benefit). The minimum allocation of Total Face Amount between your Policy and the rider is 10% and 90% at inception, respectively. The total Death Benefit Payable under the rider and the Policy will be determined as described in “Death Benefit” below, using the Total Face Amount shown on your Policy’s specifications page.
Coverage under this rider will take effect on the latter of:
• the Policy Date of the Policy to which this rider is attached; or
• the date this rider is delivered and the first rider premium is paid to the Company.
The monthly risk rate for this rider will be the same as that used for the Policy and the monthly risk charge for the rider will be determined by multiplying the monthly risk rate by the rider’s death benefit. This charge will be calculated on the first day of each Policy Month and added to the Policy’s monthly risk charge.
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If you purchase this rider, the sales load and return of expense charge will be proportionately lower as a result of a reduction in commission payments. Commissions payable to sales representatives for the sale of the Policy are calculated based on the total Premium payments. As a result, this rider generally is not offered in connection with any Policy with annual Premium payments of less than $100,000, except for policies issued on a guaranteed issue basis. In our discretion, we may decline to offer this rider or refuse to consent to a proposed allocation of coverage between a Policy and term rider.
If this rider is offered, the commissions will vary depending on the allocation of your coverage between the Policy and the term rider. The same initial Death Benefit will result in the highest commission when there is no term rider, with the commission declining as the portion of the Death Benefit coverage allocated to the term rider increases. Thus, the lowest commission amount is payable, and the lowest amount of sales load deducted from your Premiums will occur, when the maximum term rider is purchased.
You may terminate this rider by Request. This rider also will terminate on the earliest of the following dates:
• the date the Policy is surrendered or terminated;
• the expiration of the grace period of the Policy; or
• the death of the Insured.
Change of Insured Rider (Not available to individual Owners). This rider permits you to change the Insured under your Policy or any Insured that has been named by virtue of this rider. Before we change the Insured you must provide us with (1) a Request for the change signed by you and approved by us; (2) Evidence of Insurability for the new Insured; (3) evidence that there is an insurable interest between you and the new Insured; (4) evidence that the new Insured’s age, at the nearest birthday, is under 70 years; and (5) evidence that the new Insured was born prior to the Policy Date. We may charge a fee for administrative expenses when you change the Insured. The minimum charge is $100 per change and the maximum charge is $400 per change. When a change of Insured takes effect, Premiums will be based on the new Insured’s age, sex, mortality class and the Premium rate in effect on the Policy Date.
Report to Owner. We will maintain all records relating to the Series Account and the Divisions and the Fixed Account. We will send you a report at least once each Policy Year within 30 days after a Policy Anniversary. The report will show current Account Value, current allocation in each Division, death benefit, Premiums paid, investment experience since your last report, deductions made since the last report, and any further information that may be required by laws of the state in which your Policy was issued. It will also show the balance of any outstanding Policy loans and accrued interest on such loans. There is no charge for this report.
In addition, we will send you the financial statements of the Funds and other reports as specified in the 1940 Act. We also will mail you confirmation notices or other appropriate notices of Policy transactions quarterly or more frequently within the time periods specified by law. Please give us prompt written notice of any address change. Please read your statements and confirmations carefully and verify their accuracy and contact us promptly with any questions.
Dollar Cost Averaging. By Request, you may elect dollar cost averaging in order to purchase Units of the Divisions over a period of time. There is no charge for this service.
Dollar cost averaging permits you to automatically Transfer a predetermined dollar amount, subject to our minimum, at regular intervals from any one or more designated Divisions to one or more of the remaining, then available Divisions. The Unit Value will be determined on the dates of the Transfers. You must specify the percentage to be Transferred into each designated Division. Transfers may be set up on any one of the following frequency periods: monthly, quarterly, semiannually, or annually. The Transfer will be initiated one frequency period following the date of your Request. We will provide a list of Divisions eligible for dollar cost averaging that may be modified from time to time. Amounts Transferred through dollar cost averaging are not counted against the 12 free Transfers allowed in a Policy Year. You may not participate in dollar cost averaging and the rebalancer option (described below) at the same time. Participation in dollar cost averaging does not assure a greater profit, or any profit, nor will it prevent or necessarily alleviate losses in a declining market. We reserve the right to modify, suspend, or terminate dollar cost averaging at any time.
Rebalancer Option. By Request, you may elect the rebalancer option in order to automatically Transfer Account Value among the Divisions on a periodic basis. There is no charge for this service. This type of transfer program automatically reallocates your Account Value so as to maintain a particular percentage allocation among Divisions chosen by you. The amount allocated to each Division will grow or decline at different rates depending on the investment experience of the Divisions. Rebalancing does not change your Premium allocation unless that option is checked on the rebalancer Request. Your Premium allocation can also be changed by written Request at the address on the first page of this prospectus.
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You may Request that rebalancing occur one time only, in which case the Transfer will take place on the date of the Request. This Transfer will count as one Transfer towards the 12 free Transfers allowed in a Policy Year.
You may also choose to rebalance your Account Value on a quarterly, semiannual, or annual basis, in which case the first Transfer will be initiated one frequency period following the date of your Request. On that date, your Account Value will be automatically reallocated to the selected Divisions. Thereafter, your Account Value will be rebalanced once each frequency period. In order to participate in the rebalancer option, your entire Account Value must be included. Transfers made with these frequencies will not count against the 12 free Transfers allowed in a Policy Year.
You must specify the percentage of Account Value to be allocated to each Division and the frequency of rebalancing. You may terminate the rebalancer option at any time by Request.
You may not participate in the rebalancer option and dollar cost averaging at the same time. Participation in the rebalancer option does not assure a greater profit, or any profit, nor will it prevent or necessarily alleviate losses in a declining market. The Company reserves the right to modify, suspend, or terminate the rebalancer option at any time.
Non-Participating. The Policy does not pay dividends.
Premiums
Policy Application, Issuance and Initial Premium. To purchase a Policy, you must submit an application to our Corporate Headquarters. We will then follow our underwriting procedures designed to determine the insurability of the applicant. We may require full underwriting, which includes a medical examination and further information, before your application may be approved. We also may offer the Policy on a simplified underwriting or guaranteed issue basis. Applicants must be acceptable risks based on our applicable underwriting limits and standards. We will not issue a Policy until the underwriting process has been completed to our satisfaction. We reserve the right to reject an application for any lawful reason or to “rate” an Insured as a substandard risk, which will result in increased monthly risk rates. The monthly risk rate also may vary depending on the type of underwriting we use.
You must specify certain information in the application, including the Total Face Amount, the death benefit option and supplemental benefits, if any. The Total Face Amount generally may not be decreased below $100,000.
Upon approval of the application, we will issue to you a Policy on the life of the Insured. A specified Initial Premium must be paid before we issue the Policy. The effective date of coverage for your Policy (which we call the “Policy Date”) will be the date we receive a Premium equal to or in excess of the specified Initial Premium after we have approved your application. If your Premium payment is received on the 29th, 30th or 31st of a month, the Policy will be dated the 28th of that month.
We generally do not accept Premium payments before approval of an application; however, at our discretion, we may elect to do so. While your application is in underwriting, if we accept your Premium payment before approval of your application, we will provide you with temporary insurance coverage in accordance with the terms of our temporary insurance agreement. In our discretion, we may limit the amount of Premium we accept and the amount of temporary coverage we provide. If we approve your application, we will allocate your Premium payment to the Series Account or Fixed Account on the Policy Date, as described below. Otherwise, we will promptly return your payment to you. We will not credit interest to your Premium payment for the period while your application is in underwriting.
We reserve the right to change the terms or conditions of your Policy to comply with differences in applicable state law. Variations from the information appearing in this prospectus due to individual state requirements are described in supplements that are attached to this prospectus or in endorsements to the Policy, as appropriate.
Free Look Period. During the free look period (ten days or the period required by your state), you may cancel your Policy. If you purchased your Policy as a replacement of an existing policy, the free look period is extended to 30 days from the date you received it. If you decide to cancel your Policy within the free look period, you must return the Policy to our Corporate Headquarters or an agent of Great-West. Policies returned during the free look period will be void from the start.
In states that require us to return Account Value if you cancel your Policy, net Premium will be allocated to the Divisions you select on your application. In those states, we will refund your Policy Value (less surrenders, withdrawals and distributions) as of the date we received your cancellation request. This amount may be higher or lower than your Premium payments depending on the investment performance, which means you bear the investment risk until we receive your Policy and notice of cancellation.
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In states that require us to return Premium if you cancel your Policy, net Premium will first be allocated to the Great-West Government Money Market Division and remain there until the next Valuation Date following the end of the free look period. In those states, we will return the greater of Account Value (less any surrenders, withdrawals and distributions already received) or the amount of Premium received as of the date we received your cancellation request.
At the end of the free look period, the Sub-Account value held in the Great-West Government Money Market Division will be allocated to the Division(s) you selected. If your Premium payments are received after 4:00 PM EST/EDT, such payments will be credited on the next Valuation Date. Regardless of when the payment is credited, you will receive the values from the date we received your payment.
During the free look period, you may change your Division allocations and your allocation percentages, however, depending on whether your state permits the immediate investment of your Premium, changes made during the free look period may not take effect until after the free look period has expired.
In your Policy, the free look period is also referred to as the right to examine.
Premium. All Premium payments must be made payable to “Great-West Life & Annuity Insurance Company” and mailed to our Corporate Headquarters. The Initial Premium will be due and payable on or before your Policy’s Issue Date. The minimum Initial Premium will vary based on various factors, including the age of the Insured and the death benefits option you select, but may not be less than $100. You may pay additional Premium payments to us in the amounts and at the times you choose, subject to the limitations described below. To find out whether your Premium payment has been received, contact us at the address or telephone number shown on the first page of this prospectus.
We reserve the right to limit the number of Premium payments we accept on an annual basis. No Premium payment may be less than $100 per Policy without our consent, although we will accept a smaller Premium payment if necessary to keep your Policy in force. We reserve the right to restrict or refuse any Premium payments that exceed the Initial Premium amount shown on your Policy. We also reserve the right not to accept a Premium payment that causes the death benefit to increase by an amount that exceeds the Premium received. Evidence of insurability satisfactory to us may be required before we accept any such Premium.
We will not accept Premium payments that would, in our opinion, cause your Policy to fail to qualify as life insurance under applicable federal tax law. If a Premium payment is made in excess of these limits, we will accept only that portion of the Premium within those limits, and will refund the remainder to you.
Net Premiums. The net Premium is the amount you pay as the Premium less any expense charges applied to Premiums. See “Charges and Deductions - Expense Charge Applied to Premium,” above.
Planned Periodic Premiums. While you are not required to make additional Premium payments according to a fixed schedule, you may select a planned periodic Premium schedule and corresponding billing period, subject to our limits. We will send you reminder notices for the planned periodic Premium, unless you Request to have reminder notices suspended. You are not required, however, to pay the planned periodic Premium; you may increase or decrease the planned periodic Premium subject to our limits, and you may skip a planned payment or make unscheduled payments. Depending on the investment performance of the Divisions you select, the planned periodic Premium may not be sufficient to keep your Policy in force, and you may need to change your planned payment schedule or make additional payments in order to prevent termination of your Policy.
Death Benefits
Death Benefit. If your Policy is in force at the time of the Insured’s death, we will pay the Beneficiary an amount based on the death benefit option you select once we have received Due Proof of the Insured’s death. The amount payable will be:
• the amount of the selected death benefit option, less
• the value of any Policy Debt on the date of the Insured’s death, less
• any accrued and unpaid Policy charges.
The Death Benefit payable on the Insured’s death will be paid in a lump sum unless the Owner elects to receive all or a portion of the Death Benefit Proceeds under a settlement option that the Company is then offering.
  
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The Company will pay interest on the Death Benefit Proceeds from the date of death. The Company will pay interest on the Death Benefit Proceeds at a rate established by the Company for funds left on deposit. Additional interest shall accrue at a rate of 10% annually beginning with the date that is 31 calendar days from the latest of (i), (ii), and (iii) to the date the claim is paid, where:
(i) The date that due proof of death is received by the Company;
(ii) The date the Company receives sufficient information to determine our liability, the extent of the liability, and the appropriate payee legally entitled to the Proceeds; and
(iii) The date that legal impediments to the payment of Death Benefit Proceeds that depend on the action of parties other than the Company are resolved and sufficient evidence of the same is provided to the Company.
 
Legal impediments to payment include, but are not limited to (a) the establishment of guardianships and conservatorships; (b) the appointment and qualification of trustees, executors and administrators; and (c) the submission of information required to satisfy state and federal reporting requirements.
In order to meet the definition of life insurance under the Code, section 7702 of the Code defines alternative testing procedures for the minimum death benefit under a Policy. See “Federal Income Tax Considerations - Tax Status of the Policy,” below. Your Policy must qualify under the cash value accumulation test (“CVAT”).
Under the CVAT testing procedures, there is a minimum death benefit required at all times equal to your Account Value multiplied by a pre-determined factor. The factors used to determine the minimum death benefit vary by age. The factors (expressed as percentages) used for the CVAT are set forth in your Policy.
The Policy has two death benefit options.
Option 1. The “Level Death” Option. Under this option, the death benefit is –
• the Policy’s Total Face Amount on the date of the Insured’s death less any partial withdrawals; or, if greater,
• the Account Value on the date of death multiplied by the applicable factor shown in the table set forth in your Policy.
This death benefit option should be selected if you want to minimize your cost of insurance (monthly risk charge).
Option 2. The “Coverage Plus” Option. Under this option, the death benefit is –
• the sum of the Total Face Amount and Account Value of the Policy on the date of the Insured’s death less any partial withdrawals; or, if greater,
• the Account Value on the date of death multiplied by the applicable factor shown in the table set forth in your Policy.
This death benefit option should be selected if you want to maximize your death benefit.
Your Account Value and death benefit fluctuate based on the performance of the investment options you select and the expenses and deductions charged to your account. See the “Account Value” and “Charges and Deductions” sections of this prospectus.
There is no minimum death benefit guarantee associated with this Policy.
Changes in Death Benefit Option. After the first Policy Year, but not more than once each Policy Year, you may change the death benefit option by Request. Any change will be effective on the first day of the Policy Month following the date we approve your Request. A maximum administrative fee of $100 will be deducted from your Account Value each time you change your death benefit option.
A change in the death benefit option will not change the amount payable upon the death of the Insured on the date of change. Any change is subject to the following conditions:
• If the change is from option 1 to option 2, the new Total Face Amount, at the time of the change, will equal the prior Total Face Amount less the Account Value. Evidence of insurability may be required.
• If the change is from option 2 to option 1, the new Total Face Amount, at the time of the change, will equal the prior Total Face Amount plus the Account Value.
Changes in Total Face Amount. You may increase or decrease the Total Face Amount of your Policy at any time within certain limits.
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Minimum Changes. Each increase or decrease in the Total Face Amount must be at least $25,000. We reserve the right to change the minimum amount by which you may change the Total Face Amount.
Increases in Total Face Amount. To Request an increase in Total Face Amount, you must provide satisfactory evidence of the Insured’s insurability. Once approved by us, an increase will become effective on the Policy Anniversary following our approval of your Request, subject to the deduction of the first Policy Month’s monthly risk charge, service charge, any extra risk charge if the Insured is in a rated class and the cost of any riders.
Each increase to the Total Face Amount is considered to be a new segment to the Policy. When an increase is approved, Premium is allocated against the original Policy segment up to the seven-pay Premium limit established on the Issue Date. Any excess Premium is then allocated toward the new segment. Each segment will have a separate target Premium associated with it. The expense charge applied to Premium is higher up to target and lower for Premium in excess of the target as described in detail in the “Charges and Deductions” section of this prospectus. The expense charge formula will apply to each segment based on the target Premium for that segment. In addition, each segment will have a new incontestability period and suicide exclusion period as described in the “Other Provisions and Benefits” section of this prospectus.
Decreases in Total Face Amount. A decrease in Total Face Amount will become effective at the beginning of the next Policy Month following our approval of your Request. The Total Face Amount after the decrease must be at least $100,000.
For purposes of the incontestability provision of your Policy, any decrease in Total Face Amount will be applied in the following order:
• first, to the most recent increase;
• second, to the next most recent increases, in reverse chronological order; and
• finally, to the initial Total Face Amount.
Surrenders and Withdrawals
Surrenders. You may surrender your Policy for its Cash Surrender Value at any time while the Insured is living. If you do, the insurance coverage and all other benefits under the Policy will terminate. To surrender your Policy, contact us at the address or telephone number shown on the first page of this prospectus. We will send you the paperwork necessary for you to Request the surrender of your Policy. The proceeds of a surrender will be payable within seven days of our receipt of the completed Request.
We will determine your Cash Surrender Value (minus any charges not previously deducted) as of the end of the first Valuation Date after we receive your Request for surrender.
If you withdraw part of the Cash Surrender Value, your Policy’s death benefit will be reduced and you may incur taxes and tax penalties.
You may borrow from us using your Account Value as collateral.
A surrender may have tax consequences, including tax penalties. See “Federal Income Tax Considerations – Tax Treatment of Policy Benefits,” below.
Partial Withdrawal. You may Request a partial withdrawal of Account Value at any time while the Policy is in force. The amount of any partial withdrawal must be at least $500 and may not exceed 90% of your Account Value less the value of the Loan Account. A partial withdrawal fee will be deducted from your Account Value for all partial withdrawals after the first made during the same Policy Year. This administrative fee is guaranteed to be no greater than $25. To Request a partial withdrawal, contact us at the address or telephone number shown on the first page of this prospectus. We will send you the paperwork necessary for you to request a withdrawal from your Policy. The proceeds of any such partial withdrawal will be payable within seven days of our receipt of the completed Request.
The Death Benefit Proceeds will be reduced by the amount of any partial withdrawals.
Your Account Value will be reduced by the amount of a partial withdrawal. The amount of a partial withdrawal will be withdrawn from the Divisions and the Fixed Account in proportion to the amounts in the Divisions and the Fixed Account bearing on your Account Value. You cannot repay amounts taken as a partial withdrawal. Any subsequent payments received by us will be treated as additional Premium payments and will be subject to our limitations on Premiums.
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A partial withdrawal may have tax consequences. See “Federal Income Tax Considerations – Tax Treatment of Policy Benefits,” below.
Loans
Policy Loans. You may Request a Policy loan of up to 90% of your Account Value, decreased by the amount of any outstanding Policy Debt on the date the Policy loan is made less any accrued loan interest and less the current monthly deductions remaining for the balance of the Policy Year. When a Policy loan is made, a portion of your Account Value equal to the amount of the Policy loan will be allocated to the Loan Account as collateral for the loan. This amount will not be affected by the investment experience of the Series Account while the loan is outstanding and will be subtracted from the Divisions in proportion to the amounts in the Divisions bearing on your Account Value. The minimum Policy loan amount is $500.
The interest rate on the Policy loan will be determined annually, using a simple interest formula, at the beginning of each Policy Year. Specific loan interest rate information can be obtained by calling 888-353-2654. That interest rate will be guaranteed for that Policy Year and will apply to all Policy loans outstanding during that Policy Year. Interest is due and payable on each Policy Anniversary. Interest not paid when due will be added to the principal amount of the loan and will bear interest at the loan interest rate.
Presently, the maximum interest rate for Policy loans is the Moody’s Corporate Bond Yield Average - Monthly Average Corporates, which is published by Moody’s Investor Service, Inc. If the Moody’s Corporate Bond Yield Average ceases to be published, the maximum interest rate for Policy loans will be derived from a substantially similar average adopted by your state’s Insurance Commissioner.
We must reduce our Policy loan interest rate if the maximum loan interest rate is lower than the loan interest rate for the previous Policy Year by one-half of one percent or more.
We may increase the Policy loan interest rate but such increase must be at least one-half of one percent. No increase may be made if the Policy loan interest rate would exceed the maximum loan interest rate.
We will send you advance notice of any increase in the Policy loan rate.
Interest will be credited to amounts held in the Loan Account using a compound interest formula. The rate will be no less than the Policy loan interest rate then in effect less a maximum of 0.9%.
All payments we receive from you will be treated as Premium payments unless we have received notice, in form satisfactory to us, that the funds are for loan repayment. If you have a Policy loan, it is generally advantageous to repay the loan rather than make a Premium payment because Premium payments incur expense charges whereas loan repayments do not. Loan repayments will first reduce the outstanding balance of the Policy loan and then accrued but unpaid interest on such loans. We will accept repayment of any Policy loan at any time while the Policy is in force. Amounts paid to repay a Policy loan will be allocated to the Divisions in accordance with your allocation instructions then in effect at the time of repayment. Any amount in the Loan Account used to secure the repaid loan will be allocated back to the Sub-Accounts.
A Policy loan, whether or not repaid, will affect the Death Benefit Proceeds, payable upon the Insured’s death, and the Account Value because the investment results of the Divisions do not apply to amounts held in the Loan Account. The longer a loan is outstanding, the greater the effect is likely to be, depending on the investment results of the Divisions while the loan is outstanding. The effect could be favorable or unfavorable.
Lapse and Reinstatement
Lapse and Continuation of Coverage. If you cease making Premium payments, coverage under your Policy and any riders to the Policy will continue until your Account Value, less any Policy Debt, is insufficient to cover the monthly deduction. When that occurs, the grace period will go into effect.
Grace Period. If the first day of a Policy Month occurs during the Valuation Period and your Account Value, less any Policy Debt, is not sufficient to cover the monthly deduction for that Policy Month, then your Policy will enter the grace period described below. If you do not pay sufficient additional Premiums during the grace period, your Policy will terminate without value.
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The grace period will allow 61 days for the payment of Premium sufficient to keep the Policy in force. Any such Premium must be in an amount sufficient to cover deductions for the monthly risk charge, the service charge, the cost for any riders and any extra risk charge if the Insured is in a rated class for the next two Policy Months. Notice of Premium due will be mailed to your last known address or the last known address of any assignee of record at least 31 days before the date coverage under your Policy will cease. If the Premium due is not paid within the grace period, then the Policy and all rights to benefits will terminate without value at the end of the 61-day period. The Policy will continue to remain in force during this grace period. If the Death Benefit Proceeds become payable by us during the grace period, then any due and unpaid Policy charges will be deducted from the amount payable by us.
Termination of Policy. Your Policy will terminate on the earliest of the date we receive your Request to surrender, the expiration date of the grace period due to insufficient value or the date of death of the Insured. Upon lapse or termination, the Policy no longer provides insurance benefits.
Reinstatement. Before the Insured’s death, we will reinstate your Policy, provided that the Policy has not been surrendered, and provided further that:
• you make your reinstatement Request within three years from the date of termination;
• you submit satisfactory Evidence of Insurability to us;
• you pay an amount equal to the Policy charges which were due and unpaid at the end of the grace period;
• you pay a Premium equal to four times the monthly deduction applicable on the date of reinstatement; and
• you repay or reinstate any Policy loan that was outstanding on the date coverage ceased, including interest at 6.00% per year compounded annually from the date coverage ceased to the date of reinstatement of your Policy.
A reinstated Policy’s Total Face Amount may not exceed the Total Face Amount at the time of termination. Your Account Value on the reinstatement date will reflect:
• the Account Value at the time of termination; plus
• net Premiums attributable to Premiums paid to reinstate the Policy; less
• the monthly expense charge; less
• the monthly cost of insurance charge applicable on the date of reinstatement; less
• the expense charge applied to Premium.
The effective date of reinstatement will be the date the application for reinstatement is approved by us.
Deferral of Payment. We will usually pay any amount due from the Series Account within seven days after the Valuation Date following your Request giving rise to such payment or, in the case of death of the Insured, Due Proof of such death. Payment of any amount payable from the Series Account on death, surrender, partial withdrawal, or Policy loan may be postponed whenever:
• the NYSE is closed other than customary weekend and holiday closing, or trading on the NYSE is otherwise restricted;
• the SEC, by order, permits postponement for the protection of Owners; or
• an emergency exists as determined by the SEC, as a result of which disposal of securities is not reasonably practicable, or it is not reasonably practicable to determine the value of the assets of the Series Account.
Federal Income Tax Considerations
The following summary provides a general description of the federal income tax considerations associated with the Policy and does not purport to be complete or to cover all situations. This discussion is not intended as tax advice. You should consult counsel or other competent tax advisers for more complete information. This discussion is based upon our understanding of the Internal Revenue Service’s (the “IRS”) current interpretation of current federal income tax laws. We make no representation as to the likelihood of continuation of the current federal income tax laws or of the current interpretations by the IRS. We do not make any guarantee regarding the tax status of any Policy or any transaction regarding the Policy.
The Policy may be used in various arrangements, including non-qualified deferred compensation or salary continuance plans, split dollar insurance plans, executive bonus plans, retiree medical benefit plans and others. The tax consequences of such plans may vary depending on the particular facts and circumstances of each individual arrangement. Therefore, if the use of the Policy in any such arrangement is contemplated, you should consult a qualified tax adviser for advice on the tax attributes and consequences of the particular arrangement.
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Tax Status of the Policy
A Policy has certain tax advantages when treated as a life insurance contract within the meaning of section 7702 of the Code. We believe that the Policy meets the section 7702 definition of a life insurance contract and will take whatever steps are appropriate and reasonable to attempt to cause the Policy to comply with section 7702. We reserve the right to amend the Policy to comply with any future changes in the Code, any regulations or rulings under the Code and any other requirements imposed by the IRS.
Diversification of Investments. Section 817(h) of the Code requires that the investments of each Division of the Series Account be “adequately diversified” in accordance with certain Treasury Department regulations. Disqualification of the Policy as a life insurance contract for failure to comply with the diversification requirements would result in the imposition on you of federal income tax at ordinary income tax rates with respect to the earnings allocable to the Policy in the year of the failure and all prior years prior to the receipt of payments under the Policy. We believe that the Divisions will be adequately diversified.
Policy Owner Control. In connection with its issuance of temporary and proposed regulations under Section 817(h) in 1986, the Treasury Department announced that those regulations did not “provide guidance concerning the circumstances in which investor control of the investments of a segregated asset account may cause the investor (i.e., the Owner), rather than the insurance company to be treated as the owner of the assets in the account” (which would result in the current taxation of the income on those assets to the Owner). In Revenue Ruling 2003-91, the IRS provided such guidance by describing the circumstances under which the owner of a variable contract will not possess sufficient control over the assets underlying the contract to be treated as the owner of those assets for federal income tax purposes. Rev. Rul. 2003-91 states that the determination of whether the owner of a variable contract is to be treated as the owner of the assets held by the insurance company under the contract will depend on all of the facts and circumstances. We do not believe that your ownership rights under the Policy would result in your being treated as the Owner of the assets of the Policy under Rev. Rul. 2003-91. However, we do not know whether additional guidance will be provided by the IRS on this issue and what standards may be contained in such guidance. Therefore, we reserve the right to modify the Policy as necessary to attempt to prevent an Owner from being considered the owner of a pro rata share of the assets of the Policy.
The following discussion assumes that your Policy will qualify as a life insurance contract for federal income tax purposes.
Tax Treatment of Policy Benefits
Life Insurance Death Benefit Proceeds. In general, the amount of the Death Benefit Payable under your Policy is excludible from your Beneficiary’s gross income under the Code.
If the death benefit is not received in a lump sum and is, instead, applied under a proceeds option agreed to by us and the Beneficiary, payments generally will be prorated between amounts attributable to the death benefit, which will be excludible from the Beneficiary’s income, and amounts attributable to interest (occurring after the Insured’s death), which will be includable in the Beneficiary’s income.
Tax Deferred Accumulation. Any increase in your Account Value is generally not taxable to you. If you receive or are deemed to receive amounts from the Policy before the Insured dies, see the following section entitled “Distributions” for a more detailed discussion of the taxability of such payments.
Depending on the circumstances, any of the following transactions may have federal income tax consequences:
• the exchange of a Policy for a life insurance, endowment or annuity contract;
• a change in the death benefit option;
• a Policy loan;
• a partial surrender;
• a complete surrender;
• a change in the ownership of a Policy;
• a change of the named Insured; or
• an assignment of a Policy.
In addition, federal, state and local transfer and other tax consequences of ownership or receipt of Death Benefit Proceeds will depend on your circumstances and those of the named Beneficiary. Whether partial withdrawals (or other amounts deemed to be distributed) constitute income subject to federal income tax depends, in part, upon whether your Policy is considered a MEC.
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Surrenders. If you surrender your Policy, you will recognize ordinary income to the extent the Account Value exceeds the “investment in the contract,” which is generally the total of Premiums and other consideration paid for the Policy, less all amounts previously received under the Policy to the extent those amounts were excludible from gross income.
Exchanges. Section 1035 of the Code provides that no gain or loss will be recognized on the exchange of one life insurance contract for another. Generally, a life insurance contract issued in an exchange for another life insurance contract is treated for purposes of qualification under section 7702 of the Code as a new issue as of the date of the exchange. A contract’s status as a MEC cannot be changed as a result of an exchange. A MEC includes any life insurance contract that is received in exchange for a MEC.
Modified Endowment Contracts. Section 7702A of the Code treats certain life insurance contracts as MECs. In general, a Policy will be treated as a MEC if total Premiums paid at any time during the first seven Policy Years exceed the sum of the net level Premiums which would have been paid on or before that time if the Policy provided for paid-up future benefits after the payment of seven level annual Premiums (“seven-pay test”). In addition, a Policy may be treated as a MEC if there is a “material change” to the Policy.
We will monitor your Premium payments and other Policy transactions and notify you if a payment or other transaction might cause your Policy to become a MEC. We will not invest any Premium or portion of a Premium that would cause your Policy to become a MEC without instruction to do so from you. We will promptly notify you or your agent of the excess cash received. We will not process the Premium payment unless we receive a MEC acceptance form or Policy change form within 48 hours of receipt of the excess funds. If paperwork is received that allows us to process the excess cash, the effective date will be the date of the new paperwork.
Further, if a transaction occurs which decreases the Total Face Amount of your Policy during the first seven years, we will retest your Policy, as of the date of its purchase, based on the lower Total Face Amount to determine compliance with the seven-pay test. Also, if a decrease in Total Face Amount occurs within seven years of a “material change,” we will retest your Policy for compliance as of the date of the “material change.” Failure to comply in either case would result in the Policy’s classification as a MEC regardless of our efforts to provide a payment schedule that would not otherwise violate the seven-pay test.
The rules relating to whether a Policy will be treated as a MEC are complex and cannot be fully described in the limited confines of this summary. Therefore, you should consult with a competent tax adviser to determine whether a particular transaction will cause your Policy to be treated as a MEC.
Distributions
Distributions Under a Policy That Is Not a MEC. If your Policy is not a MEC, a distribution is generally treated first as a tax-free recovery of the “investment in the contract,” and then as a distribution of taxable income to the extent the distribution exceeds the “investment in the contract.” An exception is made for cash distributions that occur in the first 15 Policy Years as a result of a decrease in the death benefit or other change that reduces benefits under the Policy that are made for purposes of maintaining compliance with section 7702. Such distributions are taxed in whole or part as ordinary income (to the extent of any gain in the Policy) under rules prescribed in section 7702.
If your Policy is not a MEC, Policy loans and loans secured by the Policy are generally not treated as distributions. Such loans are instead generally treated as your indebtedness.
Finally, if your Policy is not a MEC, distributions (including distributions upon surrender), Policy loans and loans secured by the Policy are not subject to the ten percent additional tax applicable to distributions from a MEC.
Distributions Under Modified Endowment Contracts. If treated as a MEC, your Policy will be subject to the following tax rules:
• First, partial withdrawals are treated as ordinary income subject to ordinary income tax up to the amount equal to the excess (if any) of your Account Value immediately before the distribution over the “investment in the contract” at the time of the distribution.
• Second, Policy loans and loans secured by a Policy are treated as partial withdrawals and taxed accordingly. Any past-due loan interest that is added to the amount of the loan is treated as a loan.
• Third, a ten percent additional penalty tax is imposed on that portion of any distribution (including distributions upon surrender), Policy loans, or loans secured by a Policy, that is included in income, except where the distribution or loan is made to a taxpayer that is a natural person, and:
1. is made when the taxpayer is age 59 1⁄2 or older;
2. is attributable to the taxpayer becoming disabled; or
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3. is part of a series of substantially equal periodic payments (not less frequently than annually) for the duration of the taxpayer’s life (or life expectancy) or for the duration of the longer of the taxpayer’s or the Beneficiary’s life (or life expectancies).
Multiple Policies. All MECs issued by us (or our affiliates) to you during any calendar year will be treated as a single MEC for purposes of determining the amount of a Policy distribution that is taxable to you.
Treatment When Insured Reaches Attained Age 121. As described above, when the Insured reaches Attained Age 121, we will issue you a “paid-up” life insurance Policy. We believe that the paid-up life insurance Policy will continue to qualify as a “life insurance contract” under the Code. However, there is some uncertainty regarding this treatment. It is possible, therefore, that you would be viewed as constructively receiving the Cash Surrender Value in the year in which the Insured attains age 121 and would realize taxable income at that time, even if the Death Benefit Proceeds were not distributed at that time. In addition, any outstanding Policy Debt will be repaid at that time. This repayment may be treated as a taxable distribution to you, if your contract is not a MEC.
The IRS has issued Revenue Procedure 2010-28 providing a safe harbor concerning the application of Sections 7702 and 7702A to life insurance contracts that have mortality guarantees based on the 2001 CSO Table and which may continue in force after an insured attains age 100. If a contract satisfies all the requirements of Sections 7702 and 7702A using all of the Age 100 Safe Harbor Testing Method requirements set forth in Rev. Proc. 2010-28, the IRS will not challenge the qualification of that contract under Sections 7702 and 7702A. Rev. Proc. 2010-28 also states that “No adverse inference should be drawn with respect to the qualification of a contract as a life insurance contract under §7702, or its status as not a MEC under §7702A, merely by reason of a failure to satisfy all of the requirements of the Age 100 Safe Harbor.”
Federal Income Tax Withholding. We are required to withhold 10% on that portion of a Policy distribution that is taxable, unless you direct us in writing not to do so at or before the time of the Policy distribution. As the Owner you are responsible for the payment of any taxes and early distribution penalties that may be due on Policy distributions. We may be required to withhold at a rate of 30% under the Foreign Account Tax Compliance Act (“FATCA”) on certain distributions to foreign financial institutions and non-financial foreign entities holding accounts on behalf of and/or the assets of U.S. persons unless the foreign entities provide us with certain certifications regarding their status under FATCA on the applicable IRS forms. Prospective purchasers with accounts in foreign financial institutions or non-financial foreign entities are advised to consult with a competent tax advisor regarding the application of FATCA to their purchase situation.
Actions to Ensure Compliance with the Tax Law. We believe that the maximum amount of Premiums we intend to permit for the Policies will comply with the Code definition of a “life insurance contract.” We will monitor the amount of your Premiums, and, if you pay a Premium during a Policy Year that exceeds those permitted by the Code, we will promptly refund the Premium or a portion of the Premium before any allocation to the Funds. We reserve the right to increase the death benefit (which may result in larger charges under a Policy) or to take any other action deemed necessary to ensure the compliance of the Policy with the federal tax definition of a life insurance contract.
Trade or Business Entity Owns or Is Directly or Indirectly a Beneficiary of the Policy. Where a Policy is owned by other than a natural person, the Owner’s ability to deduct interest on business borrowing unrelated to the Policy can be impacted as a result of its ownership of cash value life insurance. No deduction will be allowed for a portion of a taxpayer’s otherwise deductible interest expense unless the Policy covers only one individual, and such individual is, at the time first covered by the Policy, a 20 percent owner of the trade or business entity that owns the Policy, or an officer, director, or employee of such trade or business.
Although this limitation generally does not apply to Policies held by natural persons, if a trade or business (other than one carried on as a sole proprietorship) is directly or indirectly the Beneficiary under a Policy (e.g., pursuant to a split-dollar agreement), the Policy will be treated as held by such trade or business. The effect will be that a portion of the trade or business entity’s deduction for its interest expenses will be disallowed unless the above exception for a 20 percent owner, employee, officer or director applies.
The portion of the entity’s interest deduction that is disallowed will generally be a pro rata amount which bears the same ratio to such interest expense as the taxpayer’s average unborrowed cash value bears to the sum of the taxpayer’s average unborrowed cash value and average adjusted bases of all other assets. Any corporate or business use of the life insurance should be carefully reviewed by your tax adviser with attention to these rules as well as any other rules and possible tax law changes that could occur with respect to corporate-owned life insurance.
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In Revenue Ruling 2011-9, the IRS held that the status of an insured as an employee “at the time first covered” for purposes of Section 264(f) does not carry over from a contract given up in a Section 1035 tax-free exchange to a contract received in such an exchange. Therefore, the pro rata interest expense disallowance exception of Section 264(f)(4) does not apply to new Policies received in Section 1035 tax-free exchanges unless such Policies also qualify for the exception provided by Section 264(f)(4) of the Code.
Employer-Owned Life Insurance. The Pension Protection Act of 2006 added a new section to the Code that denies the tax-free treatment of death benefits payable under an employer-owned life insurance contract unless certain notice and consent requirements are met and either (1) certain rules relating to the insured employee’s status are satisfied or (2) certain rules relating to the payment of the “amount received under the contract” to, or for the benefit of, certain beneficiaries or successors of the insured employee are satisfied. The new rules apply to life insurance contracts owned by corporations (including S corporations), individual sole proprietors, estates and trusts and partnerships that are engaged in a trade or business. Any business contemplating the purchase of a Policy on the life of an employee should consult with its legal and tax advisers regarding the applicability of the new legislation to the proposed purchase.
Split Dollar Life Insurance. A tax adviser should also be consulted with respect to the 2003 split dollar regulations if you have purchased or are considering the purchase of a Policy for a split dollar insurance plan. Any business contemplating the purchase of a new life insurance contract or a change in an existing contract should consult a tax adviser.
Other Employee Benefit Programs. Complex rules may apply when a Policy is held by an employer or a trust, or acquired by an employee, in connection with the provision of employee benefits. These Policy owners also must consider whether the Policy was applied for by, or issued to, a person having an insurable interest under applicable state law, as the lack of insurable interest may, among other things, affect the qualification of the Policy as life insurance for federal income tax purposes and the right of the Beneficiary to death benefits. Employers and employer-created trusts may be subject to reporting, disclosure and fiduciary obligations under the Employee Retirement Income Security Act of 1974, as amended. You should consult your legal advisor.
Policy Loan Interest. Generally, no tax deduction is allowed for interest paid or accrued on any indebtedness under a Policy.
Change of Insured Rider. The Company makes no representations concerning the tax effects of the change of insured rider. Owners are responsible for seeking tax counsel regarding the tax effects of the Rider. The Company reserves the right to refund cash value exceeding allowable limits for tax exempt purposes, or that would be charged as current interest income to Owners.
Investment Income Surtax. In taxable years beginning in 2013, taxable distributions from life insurance policies are considered “investment income” for purposes of the newly enacted Medicare tax on investment income. Thus, in certain circumstances, a 3.8% tax may be applied to some or all of the taxable portion of distributions (e.g., earnings) to individuals, trusts, and estates whose income exceeds certain threshold amounts as follows: an amount equal to the lesser of (a) “net investment income”; or (b) the excess of a taxpayer’s modified adjusted gross income over a specified income threshold ($250,000 for married couples filing jointly, $125,000 for married couples filing separately, and $200,000 for everyone else). The IRS has issued regulations that treat taxable distributions from life insurance policies as “Net investment income.” Please discuss the impact of the Investment Income Surtax on you with a competent tax advisor.
Our Taxes. We are taxed as a life insurance company under part I of subchapter L of the Code. The operations of the Series Account are taxed as part of our operations. Investment income and realized capital gains are not taxed to the extent that they are applied under the Policies. As a result of the Tax Cuts and Jobs Act of 2017, we are generally required to capitalize and amortize certain Policy acquisition expenses over a fifteen year period rather than currently deducting such expenses. This so-called “deferred acquisition cost” tax (“DAC tax”) applies to the deferred acquisition expenses of a Policy and results in a significantly higher corporate income tax liability for Great-West. We reserve the right to adjust the amount of a charge to Premium to compensate us for these anticipated higher corporate income taxes.
A portion of the expense charges applied to Premium is used to offset the federal, state or local taxes that we incur which are attributable to the Series Account or the Policy. We reserve the right to adjust the amount of this charge.
Summary
• We do not make any guarantees about the Policy’s tax status.
• We believe the Policy will be treated as a life insurance contract under federal tax laws.
• Death benefits generally are not subject to federal income tax.
• Investment gains are normally not taxed unless distributed to you before the Insured dies.
• If you pay more Premiums than permitted under the seven-pay test, your Policy will be a MEC.
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• If your Policy becomes a MEC, partial withdrawals, Policy loans and surrenders may incur taxes and tax penalties.
Corporate Tax Shelter Requirements
The Company does not believe that any purchase of a Policy by an Owner pursuant to this offering will be subject to the tax shelter registration, customer list or reporting requirements under the Code and implementing regulations. All Owners that are corporations are advised to consult with their own tax and/or legal counsel and advisers, to make their own determination as to the applicability of the disclosure requirements of IRC § 6011 and Treas. Reg. Section 1.6011-4 to their federal income tax returns.
Legal Proceedings
There are no pending legal proceedings that would have an adverse material effect on the Series Account or on GWFS. Great-West is engaged in various kinds of routine litigation that, in our judgment, is not material to its total assets or material with respect to the Series Account.
Legal Matters
Pursuant to Commodity Futures Trading Commission Rule 4.5, Great-West has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act. Therefore, it is not subject to registration or regulation as a commodity pool operator under the Commodity Exchange Act.
The law firm of Carlton Fields, P.A., 1025 Thomas Jefferson St., N.W., Suite 400 West, Washington, D.C. 20007-5208, serves as special counsel to Great-West with regard to the federal securities laws.
Cyber Security Risks
Because our variable life insurance contract business is highly dependent upon the effective operation of our computer systems and those of our business partners, our business is vulnerable to disruptions from utility outages and susceptible to operational and information security risks resulting from information system failures (e.g., hardware and software malfunctions) and cyber-attacks. These risks include, among other things, the theft, misuse, corruption, and destruction of data maintained online or digitally, denial of service on our website and other operational disruption, and unauthorized release of confidential Owner information. Such system failures and cyber-attacks affecting us, the Funds, intermediaries and other affiliated or third-party service providers may adversely affect us and your Policy value. For instance, system failures and cyber-attacks may interfere with our processing of Policy transactions, including the processing of Transfer Requests from our website or with the portfolios, impact our ability to calculate Unit Values, cause the release and possible destruction of confidential owner or business information, impede order processing, subject us and/or our service providers and intermediaries to regulatory fines, litigation, and financial losses and/or cause reputational damage. Cyber security risks may also impact the issuers of securities in which the Funds invest, which may cause the Funds underlying your Policy to lose value. There can be no assurance that we or the Funds or our service providers will avoid losses affecting your Policy due to cyber-attacks or information security breaches in the future.
Abandoned Property Requirements
Every state has unclaimed property laws that generally provide for escheatment to the state of unclaimed property (including proceeds of life insurance policies) under various circumstances. This “escheatment” is revocable, however, and the state is obligated to pay the applicable proceeds if the property owner steps forward to claim it with the proper documentation. To help prevent such escheatment, it is important that you keep your policy and other information on file with us up to date, including the names, contact information, and identifying information for owners, beneficiaries, and other payees. Such updates should be communicated by writing to the Company at 8515 E. Orchard Road, 9T2, Greenwood Village, CO 80111, by calling 888-353-2654, by sending an email to gwexecbenefits@greatwest.com or via the web at www.greatwest.com/executivebenefits.
Financial Statements
Great-West’s financial statements, which are included in the Statement of Additional Information (“SAI”), should be considered only as bearing on our ability to meet our obligations with respect to the death benefit and our assumption of the mortality and expense risks. They should not be considered as bearing on the investment performance of the Fund shares held in the Series Account.
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Independent Registered Public Accounting Firm
The financial statements and financial highlights of each of the investment divisions of the COLI VUL-2 Series Account of Great-West Life & Annuity Insurance Company included in the Statement of Additional Information have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing in the Registration Statement. Such financial statements have so been included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. The statutory financial statements of Great-West Life & Annuity Insurance Company included in the Statement of Additional Information included in the Registration Statement have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing in the Registration Statement. Such statutory financial statements have so been included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.
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Appendix A – Glossary of Terms
Unless otherwise defined in this prospectus, capitalized terms shall have the meaning set forth below.
Account Value – The sum of the value of your interests in the Divisions, the Fixed Account and the Loan Account. This amount reflects: (1) the Premiums you pay; (2) the investment performance of the Divisions you select; (3) any Policy loans or partial withdrawals; (4) your Loan Account balance; and (5) the charges we deduct under the Policy.
Attained Age – The age of the Insured, nearest birthday, as of the Policy Date and each Policy Anniversary thereafter.
Beneficiary – The person(s) named by the Owner to receive the Death Benefit Proceeds upon the death of the Insured.
Business Day – Any day that we are open for business. We are open for business every day that the NYSE is open for trading.
Cash Surrender Value – is equal to:
(a) Account Value on the effective date of the surrender; less
(b) outstanding Policy loans and accrued loan interest, if any; less
(c) any monthly cost of insurance charges.
Corporate Headquarters – Great-West Life & Annuity Insurance Company, 8515 East Orchard Road, Greenwood Village, Colorado 80111, or such other address as we may hereafter specify to you by written notice.
Death Benefit Proceeds – The amount determined in accordance with the terms of the Policy which is payable at the death of the Insured. This amount is the death benefit, decreased by the amount of any outstanding Policy Debt, and increased by the amounts payable under any supplemental benefits.
Divisions – Divisions into which the assets of the Series Account are divided, each of which corresponds to and contains shares of a Fund. Divisions may also be referred to as “investment divisions” or “sub-accounts” in the prospectus, SAI or Series Account financial statements.
Due Proof – Such evidence as we may reasonably require in order to establish that Death Benefit Proceeds are due and payable.
Effective Date – The date on which the first Premium payment is credited to the Policy.
Evidence of Insurability – Information about an Insured that is used to approve or reinstate this Policy or any additional benefit.
Fixed Account – A division of our General Account that provides a fixed interest rate. This account is not part of and does not depend on the investment performance of the Sub-Accounts.
Fund – An underlying mutual fund in which a Division invests. Each Fund is an investment company registered with the SEC or a separate investment series of a registered investment company.
General Account – All of our assets other than those held in a separate investment account.
Initial Premium – The initial Premium amount specified in a Policy.
Insured – The person whose life is insured under the Policy.
Issue Age – The Insured’s age as of the Insured’s birthday nearest the Policy Date.
Issue Date – The date on which we issue a Policy.
Loan Account – All outstanding loans plus credited loan interest held in the General Account of the Company. The Loan Account is not part of the Series Account.
Loan Account Value – The sum of all outstanding loans plus credited loan interest for this Policy.
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MEC – Modified Endowment Contract. For more information regarding MECs, see “Modified Endowment Contracts” above.
NYSE – New York Stock Exchange.
Owner – The person(s) named in the application who is entitled to exercise all rights and privileges under the Policy, while the Insured is living. The purchaser of the Policy will be the Owner unless otherwise indicated in the application.
Policy Anniversary – The same day in each succeeding year as the day of the year corresponding to the Policy Date.
Policy Date – The effective date of coverage under this Policy. The Policy Months, Policy Years and Policy Anniversaries are measured from the Policy Date.
Policy Debt – The principal amount of any outstanding loan against the Policy plus accrued but unpaid interest on such loan.
Policy Month – The one-month period commencing on the same day of the month as the Policy Date.
Policy Year – The one-year period commencing on the Policy Date or any Policy Anniversary and ending on the next Policy Anniversary.
Premiums – Amounts received and allocated to the Sub-Account(s) and the Fixed Account prior to any deductions.
Request – Any instruction in a form, written, telephoned or computerized, satisfactory to the Company and received in good order at the Corporate Headquarters from the Owner or the Owner’s assignee (as specified in a form acceptable to the Company) or the Beneficiary, (as applicable) as required by any provision of this Policy or as required by the Company. The Request is subject to any action taken or payment made by the Company before it was processed.
SEC – The United States Securities and Exchange Commission.
Series Account – The segregated investment account established by the Company as a separate account under Colorado law named the COLI VUL-2 Series Account. It is registered as a unit investment trust under the 1940 Act.
Sub-Account – Sub-division(s) of the Owner’s Account Value containing the value credited to the Owner from the Series Account. Sub-Accounts may also be referred to as “investment divisions” or “Divisions” in the prospectus, SAI or Series Account financial statements.
Surrender Benefit – Account Value less any outstanding Policy loans and less accrued loan interest.
Total Face Amount – The amount of life insurance coverage you request as specified in your Policy.
Transaction Date – The date on which any Premium payment or Request from the Owner will be processed by the Company. Premium payments and Requests received after 4:00 p.m. EST/EDT will be deemed to have been received on the next Business Day. Requests will be processed and the Sub-Account value will be valued on the day that the Premium payments or Request is received and the NYSE is open for trading.
Transfer – The moving of money from one or more Division(s) or the Fixed Account to one or more Division(s) or the Fixed Account.
Unit – An accounting unit of measurement that we use to calculate the value of each Division.
Unit Value – The value of each Unit in a Division.
Valuation Date – The date on which the net asset value of each Fund is determined. A Valuation Date is each day that the NYSE is open for regular business. The value of a Division’s assets is determined at the end of each Valuation Date (generally 4:00 p.m. EST/EDT). To determine the value of an asset on a day that is not a Valuation Date, the value of that asset as of the end of the previous Valuation Date will be used.
Valuation Period – The period of time from one determination of Unit Values to the next following determination of Unit Values. We will determine Unit Value for each Valuation Date as of the close of the NYSE (generally 4:00 p.m. EST/EDT) on that Valuation Date.
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The SAI is a document that includes additional information about the Series Account, including the financial statements of both Great-West and of each of the Divisions of the Series Account. The SAI is incorporated by reference as a matter of law into the prospectus, which means that it is legally part of the prospectus. The SAI is available upon request, without charge. To request the SAI or other information about the Policy, or to make any inquiries about the Policy, contact Great-West toll-free at 888-353-2654 or via email at www.greatwest.com/executivebenefits.
  
Reports and other information about the Series Account are available on the SEC’s website at http://www.sec.gov.
Investment Company Act File No. 811-09201
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Table of Contents
Great-West Life & Annuity Insurance Company
A Stock Company
8515 East Orchard Road
Greenwood Village, Colorado 80111
(303) 737-3000
Executive Benefit VUL  — Prospectus
A Flexible Premium Variable Universal Life Insurance Policy
offered by Great-West Life & Annuity Insurance Company in
connection with its COLI VUL-2 Series Account
Internet Availability of Portfolio Reports: Beginning on January 1, 2021, as permitted by regulations adopted by the SEC, paper copies of the shareholder reports for the Portfolios available under your Contract will no longer be sent by mail, unless you specifically request paper copies of the reports from us. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from us electronically by contacting the Retirement Resource Operations Center at (800) 838-0650.
You may elect to receive all future reports in paper free of charge. You can inform us that you wish to continue receiving paper copies of your shareholder reports by contacting the Retirement Resource Operations Center at the toll-free number referenced immediately above. Your election to receive reports in paper will apply to all Portfolios available under your Contract.
This prospectus describes a flexible premium variable universal life insurance policy (the “Policy”) offered by Great-West Life & Annuity Insurance Company (“Great-West,” “Company,” “we,” “our” or “us”). The Policy offered under this prospectus is no longer issued to new purchasers. The Policy offered under this prospectus has not been offered for sale since April 30, 2011; however, you may make additional Premium payments as permitted under your Policy.
The Policy is designed for use by corporations and employers to provide life insurance coverage in connection with, among other things, deferred compensation plans and employer-financed insurance purchase arrangements. The Policy is designed to meet the definition of a “life insurance contract” for federal income tax purposes.
The Policy allows “you,” the Owner, within certain limits to:
• choose the type and amount of insurance coverage you need and increase or decrease that coverage as your insurance needs change;
• choose the amount and timing of Premium payments, within certain limits;
• allocate Premium payments among the available investment options and Transfer Account Value among available investment options as your investment objectives change; and
• access your Account Value through loans and partial withdrawals or total surrenders.
This prospectus contains important information you should understand before purchasing a Policy, including a description of the material rights and obligations under the Policy. We use certain special terms that are defined in Appendix A. Your Policy and any endorsements are the formal contractual agreement between you and the Company. It is important that you read the Policy and endorsements which reflect other variations. You should keep this prospectus on file for future reference. The Policy that we are currently issuing, Executive Benefit VUL II, is offered under a separate prospectus.
The Policy and Fixed Account endorsement (and optional Term Life Insurance Rider) that we issued until April 30, 2011 became available on January 1, 2009. The Policy and optional Term Life Insurance Rider described in this prospectus are based on state- required 2001 CSO mortality tables, as defined below. Before January 1, 2009, we issued an earlier version of the Policy (“Pre-2009 Policy”) and optional Rider, which were based on 1980 CSO mortality tables. Many of the Pre-2009 Policies and optional Riders still remain outstanding. The Pre-2009 Policy differs somewhat from the Policy that we issued until April 30, 2011, and certain of the
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information in this prospectus, therefore, does not apply to those Pre-2009 Policies. Appendix B to this prospectus explains the information that applies instead to the Pre-2009 Policy and Pre-2009 optional Rider. Therefore, if you own a Pre-2009 Policy (issued prior to January 1, 2009), you should also refer to Appendix B at the end of this prospectus for information about how your Pre-2009 Policy and optional Rider differs from the Policy that we issued until April 30, 2011.
The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is May 1, 2019
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Summary of the Policy and its Benefits
This is a summary of some of the most important features of your Policy. The Policy is more fully described in the remainder of this prospectus. Please read this prospectus carefully. Unless otherwise indicated, the description of the Policy in this prospectus assumes that the Policy is in force, there is no Policy Debt and current federal tax laws apply.
1. Corporate-Owned Variable Life Insurance. We will issue Policies to corporations and employers and to certain individuals to provide life insurance coverage in connection with, among other things, deferred compensation plans and employer-financed insurance purchase arrangements. We will issue Policies on the lives of prospective Insureds who meet our underwriting standards.
2. The Series Account. We have established a separate account to fund the variable benefits under the Policy. The assets of the Series Account are insulated from the claims of our general creditors.
3. Premium Payments. You must pay us an Initial Premium to put your Policy in force. The minimum Initial Premium will vary based on various factors, including the age of the Insured and the death benefits option you select, but may not be less than $100.00. Thereafter, you choose the amount and timing of Premium payments, within certain limits.
4. Fixed Account. You may allocate some or all of your net payments and/or make Transfers from the Sub-Accounts to the Fixed Account. The Fixed Account is part of our General Account. We own the assets in the General Account, and we use these assets to support our insurance and annuity obligations other than those funded by our separate accounts. These Fixed Account assets are subject to our general liabilities from business operations. Subject to applicable law, we have sole discretion over investment of the Fixed Account assets. We bear the full investment risk for all amounts allocated or transferred to the Fixed Account. The Policy gives the Company the right to impose limits on the amount each Owner can invest in the Fixed Account and such limits are subject to change at the sole discretion of the Company.
We guarantee that the amounts allocated to the Fixed Account will be credited interest at a net effective annual interest rate of at least 3.00%, the minimum interest rate provided in your Policy. At our discretion, we will review the interest rate at least once a year. We may reset the interest rate monthly. The Fixed Account is not affected by the investment performance of the Sub-Accounts. Policy value in the Fixed Account will be reduced by the Policy fees and charges we deduct and the effects of any Policy transactions (loans, withdrawals, and Transfers) on your Policy value in the Fixed Account.
5. Free Look Period. You may return your Policy to us for any reason within ten days of receiving it, or such longer period as required by applicable state law (in some states, up to 30 days for replacement policies), and depending on state law, receive (i) the greater of your Premiums, less any withdrawals, or your Account Value, or (ii) your Account Value plus the return of any expense charges deducted. The money you contribute to the Policy will be invested at your direction, except that in some states during your free look period your Premiums will be allocated to the Great-West Government Money Market Division.
6. Investment Options and Funds. You may allocate your net Premium payments among the available investment divisions (“Divisions”) or the Fixed Account.
Each Division invests exclusively in shares of a single Fund. Each Fund has its own distinct investment objective and policies, which are described in the accompanying prospectuses for the Funds.
You may Transfer amounts from one Division to another or the Fixed Account, subject to the restrictions described herein.
7. Death Benefit. You may choose from among two death benefit options –
1. a fixed benefit equal to the Total Face Amount of your Policy; or
2. a variable benefit equal to the sum of the Total Face Amount and your Account Value.
For each option, the death benefit may be greater if necessary to satisfy federal tax law requirements.
We will deduct any outstanding Policy Debt and unpaid Policy charges before we pay a death benefit. In addition, prior partial withdrawals may reduce the Death Benefit Proceeds under the first option.
At any time, you may increase or decrease the Total Face Amount, subject to our approval and other requirements set forth in the Policy.
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After the first Policy Year, you may change your death benefit option once each Policy Year.
8. Account Value. Your Account Value will reflect -
1. the Premiums you pay;
2. the investment performance of the Divisions you select;
3. the value of the Fixed Account;
4. any Policy loans or partial withdrawals;
5. your Loan Account balance; and
6. the charges we deduct under the Policy.
9. Accessing Your Account Value. You may borrow from us using your Account Value as collateral. Loans may be treated as taxable income if your Policy is a “modified endowment contract” (“MEC”) for federal income tax purposes and you have had positive net investment performance.
There are no surrender charges associated with your Policy. You may surrender your Policy for its Cash Surrender Value plus return of expense charge, if applicable. The return of expense charge is a percentage of your Account Value and is described in greater detail in “Charges and Deductions” below.
You may withdraw a portion of your Account Value at any time while your Policy is in force.
A withdrawal may reduce your death benefit.
We will charge an administrative fee not greater than $25 per withdrawal on partial withdrawals after the first in a Policy Year.
10. Supplemental Benefits. The following optional riders are available –
1. term life insurance; and
2. change of Insured (not available to individual Owners).
We will deduct the cost, if any, of the rider(s) from your Account Value on a monthly basis.
11. Paid-Up Life Insurance. If the Insured reaches Attained Age 121 and your Policy is in force, the Account Value, less Policy Debt, will be applied as a single Premium to purchase “paid-up” insurance. “Paid-up” insurance is a policy where all premiums have been paid and there are no additional premiums due. Your Account Value will remain in the Series Account allocated to the Divisions or the Fixed Account in accordance with your instructions. The death benefit under this paid-up insurance will be fixed by the Internal Revenue Code of 1986, as amended (“Code”) for Insureds age 99. As your Account Value changes based on the investment experience of the Divisions, the death benefit will increase or decrease accordingly.
12. Reinstatement. If your Policy terminates due to insufficient value, we will reinstate it within three years at your Request, subject to certain conditions.
13. Surrenders. You may surrender your Policy for its Cash Surrender Value at any time while the Insured is living. If you do, the insurance coverage and all other benefits under the Policy will terminate.
If you withdraw part of the Cash Surrender Value, your Policy’s death benefit may be reduced and you may incur taxes and tax penalties.
14. Partial Withdrawal. You may Request a partial withdrawal of Account Value at any time while the Policy is in force. The amount of any partial withdrawal must be at least $500 and may not exceed 90% of your Account Value less the value of the Loan Account.
The Death Benefit Proceeds and your Account Value will be reduced by the amount of any partial withdrawals.
15. Policy Loans. You may borrow from us using your Account Value as collateral. You may Request a Policy loan of up to 90% of your Account Value, decreased by the amount of any outstanding Policy Debt on the date the Policy loan is made.
The minimum Policy loan amount is $500.
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16. Changes in Total Face Amount. You may increase or decrease the Total Face Amount of your Policy at any time. Each increase or decrease in the Total Face Amount must be at least $25,000. Minimum face amount is $100,000.
17. Target Premium. Your target Premium is actuarially determined and will depend on the initial Total Face Amount of your Policy, your Issue Age, your sex (except in unisex states), and rating class (if any) and equals the maximum Premium payable such that the Policy remains compliant with the Code. The target Premium is used to determine your expense charged applied to the Premium and the sales compensation we pay. Payment of the target premium does not guarantee that your Policy will not lapse, and you may need to pay additional Premiums to keep your Policy in force. Each increase to the Total Face Amount is considered to be a new segment to the Policy. Each segment will have a separate target Premium associated with it.
18. State Variations. Policies issued in your state may provide different features and benefits from, and impose different costs than, those described in this prospectus because of state law variations. These differences include, among other things, free look rights, issue age limitations, and the general availability of riders. This prospectus describes the material rights and obligations of an Owner, and the maximum fees and charges for all Policy features and benefits are set forth in the fee table of this prospectus. See your Policy for specific variations because any such state variations will be included in your Policy or in riders or endorsements attached to your Policy. See your agent or contact us for specific information that is applicable to your state.
Policy Risks
1. Account Value Not Guaranteed. Your Account Value is not guaranteed. Your Account Value fluctuates based on the performance of the investment options you select. The investment options you select may not perform to your expectations. Your Account Value may also be affected by charges under your Policy.
2. Not Suitable as Short-Term Savings Vehicle. The Policy is designed for long-term financial planning. Accordingly, you should not purchase the Policy if you need access to the Account Value within a short time. Before purchasing a Policy, consider whether the long-term nature of the Policy is consistent with the purposes for which it is being considered.
3. Risk of Policy Lapse. Your Policy may terminate if your Account Value at the beginning of any Policy Month is insufficient to pay the Policy’s monthly charges.
If your Policy would terminate due to insufficient value, we will send you notice and allow you a 61-day grace period.
If, within the grace period, you do not make a Premium payment sufficient to cover all accrued and unpaid charges and deductions, your Policy will terminate at the end of the grace period without further notice.
4. Limitations on Withdrawals. Partial withdrawals of Account Value are permitted at any time the Policy is in force. As noted above, the amount of any partial withdrawal must be at least $500 and may not exceed 90% of your Account Value less the value of the Loan Account. A maximum administrative fee of $25 will be deducted from your Account Value for all partial withdrawals after the first made in the same Policy Year. Please note that withdrawals reduce your Account Value and your Death Benefit Proceeds. In addition, withdrawals may have tax consequences.
5. Limitations on Transfers. Subject to our rules as they may exist from time to time, you may at any time Transfer to another Division all or a portion of the Account Value allocated to a Division. Certain limitations apply to Transfers into and out of the Fixed Account. See “Fixed Account Transfers” below.
6. Limitations or Charges on Surrender of Policy. You may surrender your Policy for its Cash Surrender Value at any time while the Insured is living. Upon surrender of your Policy, the insurance coverage and all other benefits under the Policy will terminate.
There are no surrender charges associated with your Policy. However, the surrender of your Policy may have tax consequences.
7. Risks of Taking a Policy Loan. As noted above, you may Request a Policy loan of up to 90% of your Account Value, decreased by the amount of any outstanding Policy Debt on the date the Policy loan is made. The minimum Policy loan amount is $500.
Taking a Policy loan may increase the risk that your Policy will lapse, will reduce your Account Value, and may reduce the death benefit. In addition, if your Policy is a MEC for tax purposes, taking a Policy loan may have tax consequences.
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8. Adverse Tax Consequences. Your Policy is structured to meet the definition of a life insurance contract under the Code. Current federal tax law generally excludes all death benefits from the gross income of the Beneficiary of a life insurance policy. Generally, you are not taxed on any increase in the Account Value until it is withdrawn, but are taxed on surrender proceeds and the proceeds of any partial withdrawals if those amounts, when added to all previous non-taxable distributions, exceed the total Premium paid. Amounts received upon surrender or withdrawals in excess of Premiums are treated as ordinary income.
Under certain circumstances, a Policy may become a MEC for federal tax purposes. This may occur if you reduce the Total Face Amount of your Policy or pay excessive Premiums. We will monitor your Premium payments and other Policy transactions and notify you if a payment or other transaction might cause your Policy to become a MEC without your written permission. We will not invest any Premium or portion of a Premium that would cause your Policy to become a MEC, but instead will promptly refund the money to you. If you elect to have a MEC contract, you can return the money to us with a signed form of acceptance.
Under current tax law, Death Benefit Proceeds under MECs generally are excluded from the gross income of the Beneficiary. Withdrawals and Policy loans, however, are treated first as income, to the extent of any gain, and then as a return of Premium. The income portion of the distribution is includable in your taxable income and taxed at ordinary income tax rates. A 10% penalty tax is also generally imposed on the taxable portion of any amount received before age 59 1⁄2.
9. General Account Risk. Great-West’s general obligations and any guaranteed benefits under the Policy are supported by our General Account (and not by the Series Account) and are subject to Great-West’s claims-paying ability. An Owner should look to the financial strength of Great-West for its claims-paying ability. Assets in the General Account are not segregated for the exclusive benefit of any particular Policy or obligation. General Account assets are also available to Great-West’s general creditors and the conduct of our routine business activities, such as the payment of salaries, rent and other ordinary business expenses. For more information about Great-West’s financial strength, you may review our financial statements and/or check our current rating with one or more of the independent sources that rate insurance companies for their financial strength and stability. Such ratings are subject to change and have no bearing on the performance of the Funds.
Fund Risks
The Policy currently offers several variable investment options, each of which is a Division of the Series Account. Each Division uses its assets to purchase, at their net asset value, shares of a Fund. The Divisions are referred to as “variable” because their investment experience depends upon the investment experience of the Funds in which they invest.
We do not guarantee that the Funds will meet their investment objectives. Your Account Value may increase or decrease in value depending on the investment performance of the Funds. You bear the risk that those Funds may not meet their investment objectives. A comprehensive discussion of the risks of each Fund may be found in each Fund’s prospectus, including detailed information concerning investment objectives, strategies, and their investment risk. You may obtain a copy of the Fund prospectuses without charge by contacting us at 888-353-2654. If you received a summary prospectus for a Fund, please follow the directions on the first page of the summary prospectus to obtain a copy of the Fund’s prospectus.
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Fee Tables
The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering the Policy. The first table describes the fees and expenses that you will pay at the time that you buy the Policy, surrender the Policy, or Transfer cash value between investment options.
Transaction Fees
Charge When Charge is Deducted Amount Deducted
Maximum Expense Charge Imposed on Premium* Upon each Premium payment Maximum: 10% of Premium
 
Current: 9.0% of Premium up to target and 6.5% of Premium in excess of target
Sales Load** Upon each Premium Payment Maximum: 6.5% of Premium
 
Current: 5.5% of Premium up to target and 3.0% of Premium in excess of target
Premium Tax** Upon each Premium payment Maximum: 3.5% of Premium
Partial Withdrawal Fee Upon partial withdrawal Maximum: $25 deducted from Account Value for all partial withdrawals after the first made in the same Policy Year.
Change of Death Benefit Option Fee Upon change of option Maximum: $100 deducted from Account Value for each change of death benefit option.
Transfer Fee At time of Transfer for all Transfers in excess of 12 made in the same Policy Year Maximum: $10/Transfer
Loan Interest Upon issuance of Policy loan Maximum: the Moody’s Corporate Bond Yield Average – Monthly Average Corporates
* The Expense Charge consists of the Sales Load plus the Premium Tax.
** The Sales Load and Premium Tax comprise (and are not in addition to) the Expense Charge.
The next table describes the fees and expenses that you will pay periodically during the time that you own the Policy, not including Fund fees and expenses.
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Periodic Charges Other Than Fund Operating Expenses
Charge When Charge is Deducted Amount Deducted
Cost of Insurance (per $1000 Net Amount at Risk)1    
Minimum & Maximum Cost of Insurance Charge Monthly Guaranteed:
Minimum: $0.02 per $1000
Maximum: $83.33 per $1000
Cost of Insurance Charge for a 46- year old Male Non-Smoker, $550,000 Face Amount, Option 1 (Level Death) Monthly Guaranteed:
$0.21 per $1000
Mortality and Expense Risk Charge2 Monthly Guaranteed: 0.90% (of average daily net assets) annually
Current: 0.40% for Policy Years 1-5, 0.25% for Policy Years 6-20, and 0.10% thereafter
Service Charge Monthly Maximum: $15/month
Current: $10.00/month, Policy Years 1-3 and $7.50/month, Policy Years 4+
1 The Cost of Insurance Charge will vary based on individual characteristics. The cost of insurance shown in the table is a sample illustration only and may not be representative of the charge that a particular Owner will pay. Owners may obtain more information about their particular cost of insurance charge by contacting our Service Center at 888-353-2654.
2 The mortality and expense risk charge is accrued daily and deducted on the first day of each Policy month by cancelling accumulation units pro-rata against Sub-Accounts.
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Supplemental Benefit Charges
Currently, we are offering the following supplemental optional riders. The charges for the rider you select are deducted monthly from your Account Value as part of the Monthly Deduction described in “Charges and Deductions” below. The benefits provided under each rider are summarized in “Other Provisions and Benefits” below.
Change of Insured Rider3* Upon change of Insured Minimum: $100 per change
Maximum: $400 per change
Change of Insured Rider for a 46-year old Male Non-Smoker, $550,000 Face Amount, Option 1 (Level Death)*   $400 per change
Term Life Insurance Rider Monthly Guaranteed:
Minimum COI: $0.02 per $1000
Maximum COI: $83.33 per $1000
Term Life Insurance Rider for a 46-year old Male Non-Smoker, $550,000 Face Amount, Option 1 (Level Death) Monthly Guaranteed:
$0.21 per $1000
* Not available to individual Owners.
The next table shows the minimum and maximum total operating expenses charged by the Funds that you may pay periodically during the time that you own the Policy. More detail concerning each Fund’s fee and expenses is contained in the prospectus for each Fund.
Total Annual Fund Operating Expenses4
(Expenses that are deducted from Fund assets, including management fees,
distribution and/or service (12b-1) fees, and other expenses)
  Minimum Maximum
Total Annual Fund Operating 0.27% 2.61%
THE ABOVE EXPENSES FOR THE FUNDS WERE PROVIDED BY THE FUNDS. WE HAVE NOT INDEPENDENTLY VERIFIED THE ACCURACY OF THE INFORMATION.
3. The Change of Insured Rider will vary based on individual characteristics. The charge shown in the table is a sample illustration only and may not be representative of the charge that a particular Owner will pay. Owners may obtain more information about their particular cost of insurance by contacting our Service Center at 888-353-2654.
4 Expenses are shown as a percentage of a Fund’s average net assets as of December 31, 2018. The expenses above include fees and expenses incurred indirectly by the Great-West Profile Funds and the Great-West Lifetime Funds as a result of investing in shares of acquired funds, if any. The range of expenses above does not show the effect of any fee waiver or expense reimbursement arrangements. The advisers and/or other service providers of certain Funds have agreed to waive their fees and/or reimburse the Funds’ expenses in order to keep the expenses below specified limits. In some cases, these expense limitations may be contractual. In other cases, these expense limitations are voluntary and may be terminated at any time. Please see the prospectus for each Fund for information regarding the expenses for each Fund, including fee reduction and/or expense reimbursement arrangements, if applicable. The management fees and other expenses of the Funds are more fully described in the Fund prospectuses.
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Description of Depositor, Registrant, and Funds
Great-West Life & Annuity Insurance Company
Great-West is a stock life insurance company organized under the laws of the state of Colorado. Our offices are located at 8515 East Orchard Road, Greenwood Village, Colorado 80111.
We are authorized to do business in 49 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands and Guam. We issue individual and group life insurance policies and annuity contracts and accident and health insurance policies.
Great-West is a wholly owned subsidiary of GWL&A Financial, Inc., a Delaware holding company. GWL&A Financial, Inc. is an indirect wholly-owned subsidiary of Great-West Lifeco Inc., a Canadian holding company. Great-West Lifeco Inc. is a subsidiary of Power Financial Corporation, a Canadian holding company with substantial interests in the financial services industry. Power Financial Corporation is a subsidiary of Power Corporation of Canada, a Canadian holding and management company. Through a group of private holding companies, The Desmarais Family Residuary Trust, which was created on October 8, 2013 under the Last Will and Testament of Paul G. Desmarais, has voting control of Power Corporation of Canada.
On January 24, 2019, Great-West announced that it had entered into an agreement with Protective Life Insurance Company (“Protective”) to sell, via indemnity reinsurance, substantially all of its non-participating individual life insurance and annuity business and group life and health business, including this Policy. Subject to the provision of certain services by Great-West or its affiliates for a transitional period following the closing, Protective will agree to provide administration for the Policy in accordance with their terms and conditions. The transaction is expected to close in the first half of 2019, subject to regulatory approvals and customary closing conditions.
The Series Account
The Series Account is a segregated asset account of Great-West. We use the Series Account to fund benefits payable under the Policy. The Series Account may also be used to fund benefits payable under other life insurance policies issued by us.
We own the assets of the Series Account, which we hold separate and apart from our General Account assets. The income, gains or losses, realized or unrealized, from assets allocated to the Series Account are credited to or charged against the Series Account without regard to our other income, gains or losses. The income, gains, and losses credited to, or charged against, the Series Account reflect the Series Account’s own investment experience and not the investment experience of Great-West’s other assets. The assets of the Series Account may not be used to pay any liabilities of Great-West other than those arising from the Policies (and any other life insurance policies issued by us and funded by the Series Account).
In calculating our corporate income tax liability, we derive certain corporate income tax benefits associated with the investment of company assets, including Series Account assets that are treated as company assets under applicable income tax law. These benefits, which reduce our overall corporate income tax liability may include dividends received deductions and foreign tax credits which can be material. We do not pass these benefits through to the Series Account or our other separate accounts, principally because: (i) the great bulk of the benefits results from the dividends received deduction, which involves no reduction in the dollar amount of dividends that the Series Account receives; and (ii) under applicable income tax law, Owners are not the owners of the assets generating the benefits.
Great-West is obligated to pay all amounts promised to Owners under the Policies (and any other life insurance policies issued by us and funded by the Series Account).
We will at all times maintain assets in the Series Account with a total market value at least equal to the reserves and other liabilities relating to the variable benefits under all policies participating in the Series Account.
The Series Account is divided into Divisions. Each Division invests exclusively in shares of a corresponding Fund. We may in the future add new or delete existing Divisions. The income, gains or losses, realized or unrealized, from assets allocated to each Division are credited to or charged against that Division without regard to the other income, gains or losses of the other Divisions.
All amounts allocated to a Division will be used to purchase shares of the corresponding Fund. The Divisions will at all times be fully invested in Fund shares. We maintain records of all purchases and redemptions of shares of the Funds.
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The Investment Options and Funds
The Policy offers a number of Divisions or Sub-Accounts. Each Division invests in a single Fund. Each Fund is a mutual fund registered under the Investment Company Act of 1940, as amended (the “1940 Act”), or a separate series of shares of such a mutual fund. More comprehensive information, including a discussion of potential risks, is found in the current prospectuses for the Funds. The fund prospectuses should be read in connection with this prospectus. YOU MAY OBTAIN A PROSPECTUS AND, IF AVAILABLE, A FUND SUMMARY, CONTAINING COMPLETE INFORMATION ON EACH FUND, WITHOUT CHARGE, UPON REQUEST BY CONTACTING US AT 888-353-2654. If you received a summary prospectus for a Fund, please follow the directions on the first page of the summary prospectus to obtain a copy of the Fund’s prospectus.
Each Fund holds its assets separate from the assets of the other Funds, and each Fund has its own distinct investment objective and policies. Each Fund operates as a separate investment fund, and the income, gains and losses of one Fund generally have no effect on the investment performance of any other Fund.
The Funds are NOT available to the general public directly. The Funds are available as investment options in variable life insurance policies or variable annuity contracts issued by life insurance companies or, in some cases, through participation in certain qualified pension or retirement plans.
Some of the Funds have been established by investment advisers that manage publicly available mutual funds having similar names and investment objectives. While some of the Funds may be similar to, and may in fact be modeled after publicly available mutual funds, the Funds are not otherwise directly related to any publicly available mutual fund. Consequently, the investment performance of publicly available mutual funds and any similarly named Fund may differ substantially.
Payments We Receive. Some of the Funds’ investment advisers or affiliates may compensate us for providing the administrative, recordkeeping and reporting services they would normally be required to provide for individual shareholders or cost savings experienced by the investment advisers or affiliates of the Funds. Such compensation is typically a percentage of Series Account assets invested in the relevant Fund and generally may range up to 0.35% of net assets. GWFS Equities, Inc. (“GWFS”), a broker-dealer and subsidiary of Great-West and the principal underwriter and distributor of the Policy, may also receive Rule 12b-1 fees (ranging up to 0.25%) directly from certain Funds for providing distribution related services related to shares of Funds offered in connection with a Rule 12b-1 plan. If GWFS receives 12b-1 fees, combined compensation for administrative and distribution related services generally ranges up to 0.60% annually of Series Account assets invested in a Fund.
Such payments and fees create an incentive for us to offer portfolios (or classes of shares of portfolios) for which such payments and fees are available to us. We consider such payments and fees, among other things, when deciding to include a portfolio (or class or share of a portfolio) as an investment option under the Policy. Other available investment portfolios (or other available classes of shares of the portfolios) may have lower fees and better overall investment performance than the portfolios (or classes of shares of the portfolios) offered under the Policy.
If you purchased the Policy through a broker-dealer or other financial intermediary (such as a bank), the Funds and their related companies may pay the intermediary for services provided with regard to the sale of Fund shares to the Divisions under the Policy. The amount and/or structure of the compensation can possibly create a conflict of interest as it may influence the broker-dealer or other intermediary and your salesperson to present this Policy (and certain Divisions under the Policy) over other investment alternatives. The variations in compensation, however, may also reflect differences in sales effort or ongoing customer services expected of the broker-dealer or other intermediary or your salesperson. You may ask your salesperson about variations and how he or she and his or her broker-dealer are compensated for selling the Policy or visit your financial intermediary’s Web site for more information.
Payments We Make. In addition to the direct cash compensation described above for sales of the Policies, Great-West and/or its affiliates may also pay GWFS agents additional cash and non-cash incentives to promote the sale of the Policies and other products distributed by GWFS, including Funds of Great-West Funds, Inc., which are available Funds under the Policies. Great-West and/or its affiliates may sponsor various contests and promotions subject to applicable FINRA regulations in which GWFS agents may receive prizes such as travel awards, merchandise and cash. Subject to applicable FINRA regulations, Great-West and/or its affiliates may also pay for travel expenses, meals, lodging and entertainment of salespersons in connection with educational and sales promotional programs and sponsor speakers, educational seminars and charitable events.
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Cash incentive payments may vary depending on the arrangement in place at any particular time. Cash incentives payable to GWFS agents may be based on certain performance measurements, including a percentage of the net amount invested in certain Funds available under the Policy. These additional payments could be viewed as creating conflicts of interest. In some cases, the payment of incentive-based compensation may create a financial incentive for a GWFS agent to recommend or sell the Policy instead of other products or recommend certain Funds under the Policy over other Funds, which may not necessarily be to your benefit.
Closed Divisions. Effective April 1, 2004, the Divisions investing in the following Funds were closed to new Owners: American Century VP International Fund (Class I Shares); and Invesco V.I. Core Equity Fund (Series I Shares). However, Owners with amounts invested in the aforementioned Divisions as of April 1, 2004, may continue to allocate Premium payments and Transfer amounts into and out of such Divisions.
Effective May 1, 2005, the Divisions investing in the following Funds were closed to new Owners: Invesco V.I. Technology Fund (Series I Shares); Fidelity Variable Insurance Products Growth Portfolio (Service Class 2 Shares); Janus Henderson Global Research Portfolio (Institutional Shares); Great-West S&P Small Cap 600® Index Fund (Investor Class Shares); and Neuberger Berman AMT Mid Cap Growth Portfolio (Class I Shares). However, Owners with amounts invested in the aforementioned Divisions as of May 1, 2005, may continue to allocate Premium payments and Transfer amounts into and out of such Divisions.
Effective May 1, 2007, the Division investing in the Invesco V.I. Health Care Fund (Series I Shares) was closed to new Owners. However, Owners with amounts transferred in the aforementioned Divisions as of May 1, 2007, may continue to allocate Premium payments and Transfer amounts into and out of such Divisions.
Effective May 1, 2008, the Divisions investing in the Federated High Income Bond Fund II (Primary Class Shares) was closed to new Owners. However, Owners with amounts transferred in the aforementioned Division as of May 1, 2008, may continue to allocate Premium payments and Transfer amounts into and out of such Divisions.
Effective May 1, 2009, the Divisions investing in the following Funds were closed to new Owners: DWS CROCI® U.S. VIP (formerly Deutsche CROCI® U.S. VIP) (Class A Shares); Fidelity Variable Investment Portfolio Investment Grade Bond Portfolio (Service Class 2 Shares); and VanEck VIP Emerging Markets Fund (Initial Class Shares). However, Owners with amounts transferred in the aforementioned Division as of May 1, 2009, may continue to allocate Premium payments and Transfer amounts into and out of such Divisions.
Effective April 30, 2010, the Division investing in the Federated Kaufmann Fund II (Primary Class Shares) is closed to new Owners, however, Owners with amounts transferred in to aforementioned Division as of April 30, 2010, may continue to allocate Premium payments and Transfer amounts into and out of such Division.
Effective May 1, 2014, the Division investing in the Columbia Variable Portfolio – Small Cap Value Fund (Class 1 Shares) was closed to new Owners, however, Owners with amounts transferred in to aforementioned Division as of May 1, 2014, may continue to allocate Premium payments and Transfer amounts into and out of such Division.
Effective May 1, 2016, the Divisions investing in the following Funds were closed to new Owners: Alger Small Cap Growth Portfolio (Class I-2 Shares); Davis Value Portfolio; Invesco V.I. Mid Cap Core Equity Fund (Series I Shares); Janus Henderson Overseas Portfolio (Institutional Shares); and Royce Capital Fund Small-Cap Portfolio (Service Class Shares). Owners with amounts invested in these Funds as of May 1, 2016 may continue to allocate Premium payments and Transfer amounts into and out of these Divisions.
Effective May 1, 2017, the Divisions investing in the following Funds were closed to new Owners: DWS Small Mid Cap Value VIP (formerly Deutsche Small Mid Cap Value VIP) (Class A Shares); Goldman Sachs VIT Mid Cap Value Fund (Institutional Shares); and Lord Abbett Series Fund Developing Growth Portfolio (Class VC Shares). Owners with amounts invested in these Funds as of May 1, 2017 may continue to allocate Premium payments and Transfer amounts into and out of these Divisions.
Effective May 1, 2019, the Divisions investing in the Fidelity® Variable Insurance Products ContrafundSM Portfolio (Service Class 2 Shares), Goldman Sachs Multi-Strategy Alternatives Portfolio (Service Shares) and Putnam VT International Growth Fund (Class IA Shares) was closed to new owners. Owners with amounts invested in these Funds as of May 1, 2019 may continue to allocate Premium payments and Transfer amounts into and out of these Divisions.
Fund Investment Objectives. The investment objectives of the Funds are briefly described below:
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AIM Variable Insurance Funds (Invesco Variable Insurance Funds) - advised by Invesco Advisers, Inc.
Invesco V.I. Core Equity Fund (Series I Shares)* - seeks long-term growth of capital.
Invesco V.I. Global Real Estate Fund (Series I Shares) - seeks total return through growth of capital and current income. Invesco Asset Management Ltd is the sub-adviser to this Fund.
Invesco V.I. Health Care Fund (Series I Shares)* - seeks long-term growth of capital.
Invesco V.I. International Growth Fund (Series I Shares) - seeks long-term growth of capital.
Invesco V.I. Mid Cap Core Equity Fund (Series I Shares)* - seeks long-term growth of capital.
Invesco V.I. Technology Fund (Series I Shares)* - seeks long-term growth of capital.
Alger Portfolios – advised by Fred Alger Management, Inc.
Alger Small Cap Growth Portfolio (Class I-2 Shares)* - seeks long-term capital appreciation.
American Century Variable Portfolios, Inc. – advised by American Century Investment Management, Inc.
American Century Investments® VP Capital Appreciation Fund (Class I Shares) - seeks capital growth.
American Century Investments® VP International Fund (Class I Shares)* - seeks capital growth.
American Century Investments® VP Mid Cap Value Fund (Class I Shares) - seeks long-term capital growth; income is a secondary consideration.
American Century Investments® VP Ultra Fund (Class I Shares) - seeks long-term capital growth.
American Century Investments® VP Value Fund (Class I Shares) - seeks long-term capital growth; income is a secondary consideration.
American Century Variable Portfolios II, Inc. – advised by American Century Investment Management, Inc.
American Century Investments® VP Inflation Protection Fund (Class II Shares) - seeks long-term total return using a strategy that seeks to protect against U.S. inflation.
American Funds Insurance Series® - advised by Capital Research and Management Company
American Funds Insurance Series® Global Small Capitalization Fund (Class 2 Shares) - seeks long-term growth of capital.
American Funds Insurance Series® Growth Fund (Class 2 Shares) - seeks growth of capital.
American Funds Insurance Series® Growth-Income Fund (Class 2 Shares) - seeks to achieve long-term growth of capital and income.
American Funds Insurance Series® International Fund (Class 2 Shares) - seeks to provide investors with long-term growth of capital.
American Funds Insurance Series® New World Fund® (Class 2 Shares) - seeks long-term capital appreciation.
Blackrock Variable Series Funds, Inc. - advised by BlackRock Advisors, LLC
BlackRock Global Allocation V.I. Fund (Class I Shares) - seeks high total investment return.
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BlackRock High Yield V.I. Fund (Class I Shares) - seeks to maximize total return, consistent with income generation and prudent investment management.
BlackRock iShares® Dynamic Allocation V.I. Fund (Class I Shares) - seeks to track the investment results of an index composed of global equities in the technology sector.
Columbia Funds Variable Insurance Trust - advised by Columbia Management Investment Advisers, LLC
Columbia Variable Portfolio - Small Cap Value (Class 1 Shares)* - seeks long-term capital appreciation.
Davis Variable Account Fund, Inc. - advised by Davis Selected Advisors, L.P.
Davis Financial Portfolio - seeks long-term growth of capital. Davis Selected Advisers-NY, Inc. is the sub-adviser to this Fund.
Davis Value Portfolio* - seeks long-term growth of capital. Davis Selected Advisers-NY, Inc. is the sub-adviser to this Fund.
Delaware VIP® Trust – advised by Delaware Management Company
Delaware VIP® International Value Equity Series (Standard Class Shares) - seeks long-term growth without undue risk to principal.
Delaware VIP® Small Cap Value Series (Service Class Shares) - seeks capital appreciation.
Deutsche DWS Investments VIT Funds – advised by DWS Investment Management Americas, Inc.
DWS Small Cap Index VIP (formerly Deutsche Small Cap Index VIP) (Class A Shares) - seeks to replicate, as closely as possible, before the deduction of expenses, the performance of the Russell 2000® Index, which emphasizes stocks of small U.S. companies. Northern Trust Investments, Inc. is the sub-adviser to this Fund.
Deutsche DWS Variable Series I – advised by DWS Investment Management Americas, Inc.
DWS Core Equity VIP (formerly Deutsche Core Equity VIP) (Class A Shares) - seeks long-term growth of capital, current income and growth of income.
Deutsche DWS Variable Series II – advised by DWS Investment Management Americas, Inc.
DWS CROCI® U.S. VIP (formerly Deutsche CROCI® U.S. VIP) (Class A Shares)* - seeks a high rate of total return.
DWS High Income VIP (formerly Deutsche High Income VIP) (Class A Shares) - seeks a high level of current income.
DWS Small Mid Cap Value VIP (formerly Deutsche Small Mid Cap Value VIP) (Class A Shares)* - seeks long-term capital appreciation.
Dreyfus Stock Index Fund, Inc. - advised by The Dreyfus Corporation (effective on or about June 3, 2019, the Fund will be renamed the BNY Mellon Stock Index Fund, Inc. and the Adviser will be renamed BNY Mellon Investment Adviser, Inc.)
Dreyfus Stock Index Fund (Initial Shares) (effective on or about June 3, 2019, this Fund will be renamed the BNY Mellon Stock Index Fund) - seeks to match the total return of the Standard & Poor's® 500 Composite Stock Price Index (S&P 500® Index). Mellon Investments Corporation is the sub-adviser to this Fund.
Dreyfus Variable Investment Fund – advised by The Dreyfus Corporation (effective on or about June 3, 2019, the Fund will be renamed the BNY Mellon Variable Investment Fund and the Adviser will be renamed BNY Mellon Investment Adviser, Inc.)
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Dreyfus VIF International Equity Portfolio (Initial Shares) (effective on or about June 3, 2019, this Portfolio will be renamed the BNY Mellon Variable Investment Fund International Equity Portfolio) - seeks capital growth. Newton Investment Management (North America) Limited is the sub-adviser to this Fund.
Eaton Vance Variable Trust – advised by Eaton Vance Management
Eaton Vance VT Floating-Rate Income Fund (Initial Class Shares) - seeks to provide a high level of current income.
Federated Insurance Series – advised by Federated Investment Management Company
Federated High Income Bond Fund II (Primary Class Shares)* - seeks high current income.
Federated Kaufmann Fund II (Primary Class Shares)* - seeks capital appreciation. Federated Global Investment Management Corp. is the sub-adviser to this Fund.
Fidelity Variable Insurance Products Fund – advised by Fidelity Management & Research Company
Fidelity® Variable Insurance Products Growth Portfolio (Service Class 2 Shares)* - seeks to achieve capital appreciation. FMR Co., Inc. (FMRC) is the sub-adviser to this Fund.
Fidelity Variable Insurance Products Fund II – advised by Fidelity Management & Research Company
Fidelity® Variable Insurance Products ContrafundSM Portfolio (Service Class 2 Shares)* - seeks long-term capital appreciation. FMR Co., Inc. (FMRC) is the sub-adviser to this Fund.
Fidelity® Variable Insurance Products Emerging Markets Portfolio (Service Class 2 Shares) - seeks capital appreciation. FMR Co., Inc. (FMRC) is the sub-adviser to this Fund.
Fidelity® Variable Insurance Products Investment Grade Bond Portfolio (Service Class 2 Shares)* - seeks as high a level of current income as is consistent with the preservation of capital. Fidelity Investments Money Management, Inc. (FIMM) is the sub-adviser to this Fund.
Fidelity Variable Insurance Products Fund III – advised by Fidelity Management & Research Company
Fidelity® Variable Insurance Products Mid Cap Portfolio (Service Class 2 Shares) - seeks long-term growth of capital. FMR Co., Inc. (FMRC) is the sub-adviser to this Fund.
Goldman Sachs Variable Insurance Trust – advised by Goldman Sachs Asset Management, L.P.
Goldman Sachs VIT Mid Cap Value Fund (Institutional Shares)* - seeks long-term capital appreciation.
Goldman Sachs VIT Multi-Strategy Alternatives Portfolio (Service Shares)* - seeks long-term growth of capital.
Great-West Funds, Inc. – advised by Great-West Capital Management, LLC
Great-West Ariel Mid Cap Value Fund (Investor Class Shares) - seeks long-term capital appreciation. Ariel Investments, LLC is the sub-adviser to this Fund.
Great-West Bond Index Fund (Investor Class Shares) - seeks investment results that track the total return of the debt securities that comprise the Bloomberg Barclays U.S. Aggregate Bond Index.
Great-West Core Bond Fund (Investor Class Shares) - seeks to provide total return, consisting of two components: (1) changes in the market value of its portfolio holdings (both realized and unrealized appreciation); and (2) income received from its portfolio holdings. Federated Investment Management Company and Wellington Management Company LLP are the sub-advisers to this Fund.
Great-West Emerging Markets Equity Fund (Investor Class Shares) - seeks long-term capital appreciation. Lazard Asset Management LLC and UBS Asset Management (Americas) Inc. are the sub-advisers to this Fund.
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Great-West Global Bond Fund (formerly Great-West Templeton Global Bond Fund) (Investor Class Shares) - seeks current income with capital appreciation and growth of income. Franklin Advisers, Inc. and Mellon Investments Corporation are the sub-advisers to the Fund.
Great-West Government Money Market Fund (Investor Class Shares) - seeks as high a level of current income as is consistent with the preservation of capital and liquidity. Investment in the Great-West Government Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in this Fund.
Great-West Inflation-Protected Securities Fund (Investor Class Shares) - seeks real return consistent with the preservation of capital. Goldman Sachs Asset Management, L.P. is the sub-adviser to this Fund.
Great-West International Index Fund (Investor Class Shares) - seeks investment results, before fees and expenses that track the total return of the common stocks that comprise the MSCI EAFE (Europe, Australasia, Far East) Index. Irish Life Investment Managers Ltd. is the sub-adviser to this Fund.
Great-West International Value Fund (Investor Class Shares) - seeks long-term capital growth. LSV Asset Management and Massachusetts Financial Services Company are the sub-advisers to this Fund.
Great-West Invesco Small Cap Value Fund (Investor Class Shares) - seeks long-term growth of capital. Invesco Advisers, Inc. is the sub-adviser to this Fund.
Great-West Large Cap Growth Fund (Investor Class Shares) - seeks long-term growth of capital. Amundi Pioneer Asset Management, Inc. and J.P. Morgan Investment Management Inc. are the sub-advisers to this Fund.
Great-West Loomis Sayles Small Cap Value Fund (Investor Class Shares) - seeks long-term capital growth. Loomis, Sayles & Company, L.P. is the sub-adviser to this Fund. Loomis, Sayles & Company, L.P. is the sub-adviser to this Fund.
Great-West Mid Cap Value Fund (Investor Class Shares) - seeks long-term growth of capital. Goldman Sachs Asset Management, L.P. is the sub-adviser to this Fund.
Great-West Multi-Sector Bond Fund (formerly Great-West Loomis Sayles Bond Fund) (Investor Class Shares) - seeks high total investment return through a combination of current income and capital appreciation. Loomis, Sayles & Company, L.P. and Newfleet Asset Management, LLC are the sub-advisers to this Fund.
Great-West Putnam Equity Income Fund (Investor Class Shares) - seeks capital growth and current income. Putnam Investment Management, LLC is the sub-adviser to this Fund.
Great-West Real Estate Index Fund (Investor Class Shares) - seeks investment results, before fees and expenses, that track the total return of a benchmark index that measures the performance of publicly traded equity real estate investment trusts (“REITs”). Irish Life Investment Managers Ltd. is the sub-adviser to this Fund.
Great-West S&P Mid Cap 400® Index Fund (Investor Class Shares) - seeks investment results, before fees and expenses, which track the total return of the common stocks that comprise the Standard & Poor's (“S&P”) MidCap 400® Index. Irish Life Investment Managers Ltd. is the sub-adviser to this Fund.
Great-West S&P Small Cap 600® Index Fund (Investor Class Shares)* - seeks investment results that track the total return of the common stocks that comprise the Standard & Poor's (“S&P”) SmallCap 600® Index. ) Irish Life Investment Managers Ltd. is the sub-adviser to this Fund.
Great-West Short Duration Bond Fund (Investor Class Shares) - seeks maximum total return that is consistent with preservation of capital and liquidity.
Great-West Small Cap Growth Fund (Investor Class Shares) - seeks long-term capital appreciation. Lord, Abbett & Co. LLC and Peregrine Capital Management, LLC are the sub-advisers to the Fund.
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Great-West T. Rowe Price Equity Income Fund (Investor Class Shares) - seeks substantial dividend income and also long-term capital appreciation. T. Rowe Price Associates, Inc. is the sub-adviser to this Fund.
Great-West T. Rowe Price Mid Cap Growth Fund (Investor Class Shares) - seeks long-term capital appreciation. T. Rowe Price Associates, Inc. is the sub-adviser to this Fund.
Great-West U.S. Government Securities Fund (Investor Class Shares) - seeks the highest level of return consistent with preservation of capital and substantial credit protection.
Great-West Lifetime Funds
Great-West Lifetime 2015 Fund (Investor Class Shares) - seeks income and secondarily, capital growth.
Great-West Lifetime 2020 Fund (Investor Class Shares) - seeks capital appreciation and income consistent with its current asset allocation; after 2020, it seeks income and secondarily capital growth.
Great-West Lifetime 2025 Fund (Investor Class Shares) - seeks capital appreciation and income consistent with its current asset allocation; after 2025, it seeks income and secondarily capital growth.
Great-West Lifetime 2030 Fund (Investor Class Shares) - seeks capital appreciation and income consistent with its current asset allocation; after 2030, it seeks income and secondarily capital growth.
Great-West Lifetime 2035 Fund (Investor Class Shares) - seeks capital appreciation and income consistent with its current asset allocation; after 2035, it seeks income and secondarily capital growth.
Great-West Lifetime 2040 Fund (Investor Class Shares) - seeks capital appreciation and income consistent with its current asset allocation; after 2040, it seeks income and secondarily capital growth.
Great-West Lifetime 2045 Fund (Investor Class Shares) - seeks capital appreciation and income consistent with its current asset allocation; after 2045, it seeks income and secondarily capital growth.
Great-West Lifetime 2050 Fund (Investor Class Shares) - seeks capital appreciation and income consistent with its current asset allocation; after 2050, it seeks income and secondarily capital growth.
Great-West Lifetime 2055 Fund (Investor Class Shares) - seeks capital appreciation and income consistent with its current asset allocation; after 2055, it seeks income and secondarily capital growth.
Great-West Lifetime 2060 Fund (Investor Class Shares) - seeks capital appreciation and income consistent with its current asset allocation; after 2060, it seeks income and secondarily capital growth.
Great-West Profile Funds
Each of the following Profile Funds seeks to provide an asset allocation program designed to meet certain investment goals based on an investor’s risk tolerance, investment horizon and personal objectives.
Great-West Aggressive Profile Fund (Investor Class Shares) - seeks long-term capital appreciation primarily through investments in underlying funds that emphasize equity investments.
Great-West Conservative Profile Fund (Investor Class Shares) - seeks capital preservation primarily through investments in underlying funds that emphasize fixed income investments.
Great-West Moderate Profile Fund (Investor Class Shares) - seeks long-term capital appreciation primarily through investments in underlying funds with a relatively equal emphasis on equity and fixed income investments.
Great-West Moderately Aggressive Profile Fund (Investor Class Shares) - seeks long-term capital appreciation primarily through investments in underlying funds that emphasize equity investments and, to a lesser degree, in underlying funds that emphasize fixed income investments.
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Great-West Moderately Conservative Profile Fund (Investor Class Shares) - seeks income and capital appreciation primarily through investments in underlying funds that emphasize fixed income investments and, to a lesser degree, in underlying funds that emphasize equity investments.
Janus Aspen Series – advised by Janus Capital Management LLC
Janus Henderson VIT Balanced Portfolio (Institutional Shares) - seeks long-term capital growth, consistent with preservation of capital and balanced by current income.
Janus Henderson VIT Enterprise Portfolio (Institutional Shares) - seeks long-term growth of capital.
Janus Henderson VIT Flexible Bond Portfolio (Institutional Shares) - seeks to obtain maximum total return, consistent with preservation of capital.
Janus Henderson VIT Forty Portfolio (Institutional Shares) - seeks long-term growth of capital.
Janus Henderson VIT Global Research Portfolio (Institutional Shares)* - seeks long-term growth of capital.
Janus Henderson VIT Global Technology Portfolio (Institutional Shares) - seeks long-term growth of capital.
Janus Henderson VIT Overseas Portfolio (Institutional Shares)* - seeks long-term growth of capital.
JPMorgan Insurance Trust – advised by J.P. Morgan Investment Management Inc.
JPMorgan Insurance Trust Small Cap Core Portfolio (Class 1 Shares) - seeks capital growth over the long term.
JPMorgan Insurance Trust U.S. Equity Portfolio (Class 1 Shares) - seeks high total return.
Legg Mason Partners Variable Equity Trust – advised by Legg Mason Partners Fund Advisor, LLC
ClearBridge Variable Mid Cap Portfolio (Class I Shares) - seeks long-term growth of capital. ClearBridge Investments, LLC is the sub-adviser to this Fund.
ClearBridge Variable Small Cap Growth Portfolio (Class I Shares) - seeks long-term growth of capital. ClearBridge Investments, LLC is the sub-adviser to this Fund.
Lord Abbett Series Fund, Inc. – advised by Lord, Abbett & Co. LLC
Lord Abbett Series Fund Developing Growth Portfolio (Class VC Shares)* - seeks long-term growth of capital.
Lord Abbett Series Fund Total Return Portfolio (Class VC Shares) - seeks income and capital appreciation to produce a high total return.
MFS® Variable Insurance Trust – advised by Massachusetts Financial Services Company
MFS® Growth Series (Initial Class Shares) - seeks capital appreciation.
MFS® VIT Mid Cap Growth Series (Initial Class Shares) - seeks capital appreciation.
MFS® VIT Research Series (Initial Class Shares) - seeks capital appreciation.
MFS® VIT Total Return Bond Series (Initial Class Shares) - seeks total return with an emphasis on current income, but also considering capital appreciation.
MFS® VIT Value Series (Initial Class Shares) - seeks capital appreciation.
MFS® Variable Insurance Trust II – advised by Massachusetts Financial Services Company
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MFS® VIT II International Growth Portfolio (Initial Class Shares) - seeks capital appreciation.
MFS® Variable Insurance Trust III – advised by Massachusetts Financial Services Company
MFS® VIT III Blended Research® Small Cap Equity Portfolio (Initial Class Shares) - seeks capital appreciation.
MFS® VIT III Global Real Estate Portfolio (Initial Class Shares) - seeks total return.
MFS® VIT III Mid Cap Value Portfolio (Initial Class Shares) - seeks capital appreciation.
Neuberger Berman Advisers Management Trust – advised by Neuberger Berman Investment Advisers LLC
Neuberger Berman AMT Mid Cap Growth Portfolio (Class I Shares)* - seeks growth of capital.
Neuberger Berman AMT Mid Cap Intrinsic Value Portfolio (Class I Shares) - seeks growth of capital.
Neuberger Berman AMT Sustainable Equity Portfolio (Class I Shares) - seeks long-term growth of capital by investing primarily in securities of companies that meet the Fund’s environmental, social and governance (ESG) criteria.
Oppenheimer Variable Account Funds – advised by OFI Global Asset Management, Inc.
Oppenheimer Main Street Small Cap Fund/VA® (Non-Service Shares) - seeks capital appreciation. OppenheimerFunds, Inc. is the sub-adviser to this Fund.
PIMCO Variable Insurance Trust – advised by Pacific Investment Management Company, LLC
PIMCO VIT CommodityRealReturn® Strategy Portfolio (Administrative Class Shares) - seeks maximum real return, consistent with prudent investment management.
PIMCO VIT Global Bond Opportunities Portfolio (Unhedged) (formerly PIMCO VIT Global Bond Portfolio (Unhedged)) (Administrative Class Shares) - seeks maximum total return, consistent with preservation of capital and prudent investment management.
PIMCO VIT High Yield Portfolio (Administrative Class Shares) - seeks maximum total return, consistent with preservation of capital and prudent investment management.
PIMCO VIT Low Duration Portfolio (Administrative Class Shares) - seeks maximum total return, consistent with preservation of capital and prudent investment management.
PIMCO VIT Real Return Portfolio (Administrative Class Shares) - seeks maximum real return, consistent with preservation of real capital and prudent investment management.
PIMCO VIT Total Return Portfolio (Administrative Class Shares) - seeks maximum total return, consistent with preservation of capital and prudent investment management.
Pioneer Variable Contracts Trust – advised by Amundi Pioneer Asset Management, Inc.
Pioneer Real Estate Shares VCT Portfolio (Class I Shares) - seeks long-term growth of capital; current income is a secondary objective.
Putnam Variable Trust – advised by Putnam Investment Management, LLC
Putnam VT Equity Income Fund (Class IA Shares) - seeks capital growth and current income. Putnam Investments Limited is the sub-adviser to this Fund.
Putnam VT Global Asset Allocation Fund (Class IA Shares) - seeks long-term return consistent with preservation of capital. The Putnam Advisory Company, LLC and Putnam Investments Limited are the sub-advisers to this Fund.
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Putnam VT Global Equity Fund (Class IA Shares) - seeks capital appreciation. The Putnam Advisory Company, LLC and Putnam Investments Limited are the sub-advisers to this Fund.
Putnam VT Growth Opportunities Fund (Class IA Shares) - seeks capital appreciation. Putnam Investments Limited is the sub-adviser to this Fund.
Putnam VT High Yield Fund (Class IA Shares) - seeks high current income. Putnam Investments Limited is the sub-adviser to this Fund.
Putnam VT Income Fund (Class IB Shares) - seeks high current income consistent with what the manager believes to be prudent risk. Putnam Investments Limited is the sub-adviser to this Fund.
Putnam VT International Growth Fund Class (Class IA Shares)* - seeks long-term capital appreciation. The Putnam Advisory Company, LLC and Putnam Investments Limited are the sub-advisers to this Fund.
Putnam VT International Value Fund (Class IA Shares) - seeks capital growth; current income is a secondary objective. The Putnam Advisory Company, LLC and Putnam Investments Limited are the sub-advisers to this Fund.
Putnam VT Research Fund (Class IA Shares) - seeks capital appreciation. The Putnam Advisory Company, LLC and Putnam Investments Limited are the sub-advisers to this Fund.
Putnam VT Sustainable Future Fund (Class IA Shares) - seeks capital appreciation and, as a secondary objective, current income. Putnam Investments Limited is the sub-adviser to this Fund.
Royce Capital Fund – advised by Royce & Associates, LP
Royce Small-Cap Portfolio (Service Class Shares)* - seeks long-term growth of capital.
T. Rowe Price Equity Series, Inc. – advised by T. Rowe Price Associates, Inc.
T. Rowe Price Blue Chip Growth Portfolio (Portfolio-II Class Shares) - seeks to provide long-term capital growth; income is a secondary objective.
VanEck VIP Trust – advised by Van Eck Associates Corporation
VanEck VIP Emerging Markets Fund (Initial Class Shares)* - seeks long-term capital appreciation by investing primarily in equity securities in emerging markets around the world.
VanEck VIP Global Hard Assets Fund (Initial Class Shares) - seeks long-term capital appreciation by investing primarily in hard asset securities; income is a secondary consideration.
Victory Portfolios – advised by Victory Capital Management, Inc.
Victory RS Small Cap Growth Equity VIP Series (Class I Shares) - seeks long-term capital growth.
* The Sub-Account investing in this Portfolio is closed to new Owners.
You should contact your representative for further information on the availability of the Divisions.
Each Fund is subject to certain investment restrictions and policies that may not be changed without the approval of a majority of the shareholders of the Fund. See the Fund prospectuses for further information.
We automatically reinvest all dividends and capital gain distributions from the Funds in shares of the distributing Fund at their net asset value. The income and realized and unrealized gains or losses on the assets of each Division are separate and are credited to, or charged against, the particular Division without regard to income, gains or losses from any other Division or from any other part of our business. We will use amounts you allocate to a Division to purchase shares in the corresponding Fund and will redeem shares in the Funds to meet Policy obligations or make adjustments in reserves. The Funds are required to redeem their shares at net asset value and to make payment within seven days.
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The Funds may also be available to separate accounts offering variable annuity, variable life products and qualified plans of other affiliated and unaffiliated insurance companies, as well as our other separate accounts. Although we do not anticipate any disadvantages to this, there is a possibility that a material conflict may arise between the interests of the Series Account and one or more of the other separate accounts participating in the Funds. A conflict may occur due to a change in law affecting the operations of variable life and variable annuity separate accounts, differences in the voting instructions of Owners and those of other companies, or some other reason. In the event of conflict, we will take any steps necessary to protect Owners, including withdrawal of the Series Account from participation in the Funds that are involved in the conflict or substitution of shares of other Funds.
Voting. We are the legal owner of all shares of the Funds held in the Divisions of the Series Account. In general, you do not have a direct right to vote the Fund shares held in the Divisions of the Series Account. However, under current law, you are entitled to give us instructions on how to vote the shares held in the Divisions. At regular and special shareholder meetings, we will vote the shares held in the Divisions in accordance with those instructions received from Owners who have an interest in the respective Divisions.
We will vote shares held in each Division for which no timely instructions from Owners are received, together with shares not attributable to a Policy, in the same proportion as those shares in that Division for which instructions are received.
The number of shares in each Division for which instructions may be given by an Owner is determined by dividing the portion of the Account Value derived from participation in that Division, if any, by the value of one share of the corresponding Fund. We will determine the number as of the record date chosen by the Fund. Fractional votes are counted. Voting instructions will be solicited in writing at least 14 days prior to the shareholders’ meeting.
We may, if required by state insurance regulators, disregard voting instructions if those instructions would require shares to be voted so as to cause a change in the sub-classification or investment policies of one or more of the Funds, or to approve or disapprove an investment management contract. In addition, we may disregard voting instructions that would require changes in the investment policies or investment adviser, provided that we reasonably disapprove of those changes in accordance with applicable federal regulations. If we disregard voting instructions, we will advise you of that action and our reasons for it in our next communication to Owners.
This description reflects our current view of applicable federal securities law. Should the applicable federal securities laws change so as to permit us to vote shares held in the Series Account in our own right, we may elect to do so.
Fixed Account
The Fixed Account is part of our General Account. We have absolute ownership of the assets in the Fixed Account. Except as limited by law, we have sole control over the investment of the General Account assets. You do not share in the investment experience of the General Account, but are allowed to allocate and transfer Account Value into the Fixed Account. We assume the risk of investment gain or loss on this amount. All assets in the General Account are subject to our general liabilities from business operations. The Fixed Account does not participate in the investment performance of the Sub-Accounts. The Policy gives the Company the right to impose limits on the amount each Owner can invest in the Fixed Account and such limits are subject to change at the sole discretion of the Company.
The Fixed Account is not registered with the SEC under the Securities Act of 1933. Neither the Fixed Account nor the General Account have been registered as an investment company under the 1940 Act. As a result, neither the Fixed Account nor the General Account are generally subject to regulation under either Act. However, certain disclosures may be subject to generally applicable provisions of the federal securities laws regarding the accuracy of statements made in registration statements.
The Fixed Account offers a guarantee of principal, after deductions for fees and expenses. We also guarantee that the amounts you allocate to the Fixed Account will earn interest at a rate of at least the minimum guaranteed interest rate indicated in your Policy. We do not rely on predetermined formulas to set Fixed Account interest rates. We will review the interest rate at least once a year, but at the Company’s discretion we may reset the interest rate monthly.
The Fixed Account may not be available in all states.
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Employer-Financed Insurance Purchase Arrangements--Tax and Other Legal Issues
In addition to corporations and other employers, the Policy is also available for purchase by individuals whose employers will pay some or all of the Premiums due under the Policy pursuant to an employer-financed insurance purchase arrangement. In such cases, references in this prospectus to the “Owner” of the Policy will refer to the individual and, depending on the context, references to the “payment of premiums” will refer to payments to Great-West under the Policy by the employer and/or by the employee.
Employers and employees contemplating the purchase of a Policy as a part of an employer-financed insurance purchase arrangement should consult qualified legal and tax counsel with regard to the issues presented by such a transaction. For this purpose, an employer-financed insurance purchase arrangement is a plan or arrangement which contemplates that an employer will pay one or more Premiums for the purchase of a Policy that will be owned, subject to certain restrictions, by an employee or by a person or entity designated by the employee.
The general considerations applicable to such a purchase include the following:
1. Payments by the employer under an employer-financed insurance purchase arrangement will only be deductible for income tax purposes when the payments are taxable to the employee with respect to whom they are made.
2. Imposition of certain types of restrictions, specifically a substantial risk of forfeiture, on the purchased Policy may defer both the deductibility of the payments to the employer and their taxability to the employee.
3. The payment of some or all of the Premiums by the employer may create an ERISA welfare benefit plan which is subject to the reporting, disclosure, fiduciary and enforcement provisions of ERISA.
4. The payment of some or all of the Premiums by the employer will not prevent the Owner from being treated as the owner of the Policy for federal income tax purposes.
5. Under some circumstances, the failure of the employer to make one or more of the planned Premiums under the Policy may cause a lapse of the Policy.
6. An employee considering whether to participate in an employer-financed insurance purchase arrangement should consider whether the financial and tax benefits of the ownership of the Policy outweigh the costs, such as sales loads and cost of insurance charges that will be incurred as a result of the purchase and ownership of the Policy.
7. An employee considering whether to participate in an employer-financed insurance purchase arrangement should consider whether the designation of another person or entity as the owner of the Policy will have adverse consequences under applicable gift, estate, or inheritance tax laws.
8. An employee considering whether to participate in an employer-financed insurance purchase arrangement should consider whether the financial performance of the Policy will support any planned withdrawals or borrowings under the Policy.
9. In an employer-financed insurance purchase arrangement, the procedures described in the “Market Timing & Excessive Trading” section below, which are designed to prevent or minimize market timing and excessive trading by Owners may, in certain circumstances, require us to perform standardized trade monitoring; in other circumstances such monitoring will be performed by the Fund. Certain Funds require us to provide reports of the Owner’s trading activity, if prohibited trading, as defined by the Fund, is suspected. The determination of whether there is prohibited trading based on the Funds’ definition of prohibited trading may be made by us or by the Fund. The Fund determines the restrictions imposed, which could be one of the four restrictions described below or by restricting the Owner from making Transfers into the identified Fund for the period of time specified by the Fund.
Charges and Deductions
The Policy has insurance features and investment features, and there are costs related to each. This section describes the fees and charges that we may make under the Policy to compensate for: (1) the services and benefits we provide; (2) the costs and expenses we incur; and (3) the risks we assume. The fees and charges we deduct under this Policy may result in a profit to us.
Expense Charge Applied to Premium. We will deduct a maximum charge of 10% from each Premium payment, which is broken down as follows. A maximum of 6.5% will be deducted as sales load to compensate us in part for sales and promotional expenses in connection with selling the Policies, such as commissions, the cost of preparing sales literature, other promotional activities and other direct and indirect expenses. A maximum of 3.5% of Premium will be used to cover Premium taxes and certain federal income tax obligations resulting from the receipt of Premiums. All states and some cities and municipalities impose taxes on Premiums paid for life insurance, which generally range from 2% to 4% of Premium but may exceed 4% in some states. The amount of your state’s Premium tax may be higher or lower than the amount attributable to Premium taxes that we deduct from your Premium payments.
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The current expense charge applied to Premium for sales load is 5.5% of Premium up to target and 3.0% of Premium in excess of target for Policy Years 1 through 10. Your target Premium will depend on the initial Total Face Amount of your Policy, your Issue Age, your sex (except in unisex states), and rating class (if any) which equals the maximum Premium payable under the seven-pay test such that the Policy remains compliant with section 7702A of the Code. Thereafter, there is no charge for sales load. The current expense charge applied to Premium to cover our Premium taxes and the federal tax obligation described above is 3.5% in all Policy Years.
Where permitted by applicable state insurance law and for corporate owned policies only, if your Policy is surrendered for the Surrender Benefit (Account Value less any outstanding Policy loans and less accrued loan interest) within the first seven Policy Years, we will return a percentage of the expense charge. The return of expense charge will be a percentage of your Account Value on the date the Request for surrender was received by us at our Corporate Headquarters. This amount will be in addition to the Surrender Benefit.
The return of expense charge is based on the following:
Policy Year Percentage of Account Value Returned
Year 1 6%
Year 2 5%
Year 3 4%
Year 4 3%
Year 5 2%
Year 6 1%
Year 7+ 0%
As described under the heading “Term Life Insurance Rider” below, we may offer a term life insurance rider that may have the effect of reducing the sales charge you pay on purchasing an equivalent amount of insurance. We offer this rider in circumstances that result in the savings of sales and distribution expenses and administrative costs. To qualify, a corporation, employer, or other purchaser must satisfy certain criteria such as, for example, the number of Policies it expects to purchase and the expected Total Face Amount under all such Policies. Generally, the sales contacts and effort and administrative costs per Policy depend on factors such as the number of Policies purchased by a single Owner, the purpose for which the Policies are purchased, and the characteristics of the proposed Insureds. The amount of reduction and the criteria for qualification are related to the sales effort and administrative costs resulting from sales to a qualifying Owner. Great-West from time to time may modify on a uniform basis both the amounts of reductions and the criteria for qualification. Reductions in these charges will not be unfairly discriminatory against any person, including the affected Owners funded by the Series Account.
Mortality and Expense Risk Charge. This charge is for the mortality and expense risks we assume with respect to the Policy. It is based on an annual rate that we accrue against each Division of the Series Account on a daily basis and deduct on the first day of each Policy month by cancelling accumulation units on a pro-rata basis across all Sub-Accounts. We convert the mortality and expense risk charge into a daily rate by dividing the annual rate by 365. The mortality and expense risk charge will be determined by us from time to time based on our expectations of future interest, mortality experience, persistency, expenses and taxes, but will not exceed 0.90% annually. Currently, the charge is 0.40% for Policy Years 1 through 5, 0.25% for Policy Years 6 through 20 and 0.10% thereafter. On surrender and payment of the death benefit, we will deduct the pro-rata portion of the mortality and expense risk charge that has accrued.
Because the value of your Sub-Accounts can vary from month-to-month, the monthly deduction for the mortality and expense risk charge will also vary. If the amount the mortality and expense risk charge is insufficient to cover the costs resulting from the mortality and expense risks that we assume, we will bear the loss. If the amount we charge is more than sufficient to cover such costs, we will make a profit on the charge. To the extent that we do make a profit from this charge, we may use this profit for any corporate purpose, including the payment of administrative, marketing, distribution, and other expenses in connection with the Policies.
The mortality risk we assume is that the group of lives insured under the Policies may, on average, live for shorter periods of time than we estimated. The expense risk we assume is that the costs of issuing and administering Policies may be more than we estimated.
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Monthly Deduction. We make a monthly deduction from your Account Value on the Policy Date and the first day of each Policy Month. This monthly deduction will be charged proportionally to the amounts in the Divisions.
The monthly deduction equals the sum of 1, 2, 3, 4 and 5 where:
1. is the cost of insurance charge (the monthly risk charge) equal to the current monthly risk rate (described below) multiplied by the net amount at risk divided by 1,000;
2. is the service charge;
3. is the monthly cost of any additional benefits provided by riders which are a part of your Policy;
4. is any extra risk charge if the Insured is in a rated class as specified in your Policy; and
5. is the accrued mortality and expense risk charge.
The net amount at risk equals:
• the death benefit divided by 1.00327374; less
• your Account Value on the first day of a Policy Month prior to assessing the monthly deduction.
If there are increases in the Total Face Amount other than increases caused by changes in the death benefit option, the monthly deduction described above is determined separately for the initial Total Face Amount and each increase in the Total Face Amount. In calculating the net amount at risk, your Account Value will first be allocated to the most recent increase in the death benefit and then to each increase in the Total Face Amount in the reverse order in which the increases were made.
Monthly Risk Rates. The monthly risk rate is used to determine the cost of insurance charge (monthly risk charge) for providing insurance coverage under the Policy. The monthly risk rate is applied to the amount at risk. The monthly risk rates (except for any such rate applicable to an increase in the Total Face Amount) are based on the length of time your Policy has been in force and the Insured’s sex (in the case of non-unisex Policies) and Issue Age. If the Insured is in a rated class as specified in your Policy, we will deduct an extra risk charge that reflects that class rating. The monthly risk rates applicable to each increase in the Total Face Amount are based on the length of time the increase has been in force and the Insured’s sex (in the case of non-unisex Policies), Issue Age, and class rating, if any. The monthly risk rates will be determined by us from time to time based on our expectations of future experience with respect to mortality, persistency, interest rates, expenses and taxes, but will not exceed the guaranteed maximum monthly risk rates based on the 2001 Commissioner’s Standard Ordinary, Age Nearest Birthday, Male/Female, Smoker/Non-Smoker Ultimate Mortality Table (“2001 CSO”). Currently, the guaranteed minimum monthly risk charge is $0.02 per $1000 and the guaranteed maximum is $83.33 per $1000. If your Policy is issued in Montana, unisex rates are charged and these rates will never exceed the male Smoker Ultimate Mortality Table.
The guaranteed maximum monthly risk rates reflect any class rating applicable to the Policy. We have filed a detailed statement of our methods for computing Account Values with the insurance department in each jurisdiction where the Policy was delivered. These values are equal to or exceed the minimum required by law.
The monthly risk rate is greater on policies that require less underwriting to be performed regardless of the health of the individual. Monthly risk rate charges will be greatest on guaranteed issue policies, followed by simplified issue policies, then fully underwritten policies.
Service Charge. We will deduct a maximum of $15 from your Account Value on the first day of each Policy Month to cover our administrative costs, such as salaries, postage, telephone, office equipment and periodic reports. This charge may be increased or decreased by us from time to time based on our expectations of future expenses, but will never exceed $15 per Policy Month. The service charge will be deducted proportionally from the Divisions. The current service charge is $10 per Policy Month for Policy Years 1 through 3 and $7.50 per Policy Month thereafter.
Transfer Fee. A maximum administrative charge of $10 per Transfer of Account Value from one Division to other Divisions will be deducted from your Account Value for all Transfers in excess of 12 made in the same Policy Year. The allocation of your Initial Premium from the Great-West Government Money Market Division to your selected Divisions will not count toward the 12 free Transfers. Similarly, Transfers made under dollar cost averaging and periodic rebalancing under the rebalancer option are not subject to the fee and do not count as Transfers for this purpose (except a one-time rebalancing under the rebalancer option will count as one Transfer). All Transfers Requested on the same Business Day will be aggregated and counted as one Transfer. The current charge is $10 per Transfer.
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Partial Withdrawal Fee. A maximum administrative fee of $25 will be deducted from your Account Value for all partial withdrawals after the first made in the same Policy Year. The partial withdrawal fee will be deducted proportionally from all Divisions.
Surrender Charges. Your Policy has no surrender charges.
Change of Death Benefit Option Fee. A maximum administrative fee of $100 will be deducted from your Account Value each time you change your death benefit option. The change of death benefit fee will be deducted proportionally from all Divisions.
Fund Expenses. You indirectly bear the charges and expenses of the Funds whose shares are held by the Divisions to which you allocate your Account Value. The Series Account purchases shares of the Funds at net asset value. Each Fund’s net asset value reflects investment advisory fees and administrative expenses already deducted from the Fund’s assets. For more information concerning the investment advisory fees and other charges against the Funds, see the Fund prospectuses and the statements of additional information for the Funds, which are available upon Request.
We may receive compensation from the investment advisers or administrators of the Funds. Such compensation will be consistent with the services we provide or the cost savings resulting from the arrangement and, therefore, may differ between Funds. See “Payments We Receive” above.
General Description of Policy
Unless otherwise indicated, the description of the Policy in this prospectus assumes that the Policy is in force, there is no Policy Debt and current federal tax laws apply. The Policy described in this prospectus is offered to corporations and other employers to provide life insurance coverage in connection with, among other things, deferred compensation plans and employer-financed insurance purchase arrangements. We issue Policies on the lives of prospective Insureds who meet our underwriting standards.
Policy Rights
Owner. While the Insured is alive, unless you have assigned any of these rights, you may:
• transfer ownership to a new Owner;
• name a contingent owner who will automatically become the Owner of the Policy if you die before the Insured;
• change or revoke a contingent owner;
• change or revoke a Beneficiary (unless a previous Beneficiary designation was irrevocable);
• exercise all other rights in the Policy;
• increase or decrease the Total Face Amount, subject to the other provisions of the Policy; and
• change the death benefit option, subject to the other provisions of the Policy.
When you transfer your rights to a new Owner, you automatically revoke any prior contingent owner designation. When you want to change or revoke a prior Beneficiary designation, you have to specify that action. You do not affect a prior Beneficiary when you merely transfer ownership, or change or revoke a contingent owner designation.
You do not need the consent of a Beneficiary or a contingent owner in order to exercise any of your rights. However, you must give us written notice satisfactory to us of the Requested action. Your Request will then, except as otherwise specified herein, be effective as of the date you signed the form, subject to any action taken before it was received by us.
Beneficiary. The Beneficiary has no rights in the Policy until the death of the Insured, except an irrevocable Beneficiary cannot be changed without the consent of that Beneficiary. If a Beneficiary is alive at that time, the Beneficiary will be entitled to payment of the Death Benefit Proceeds as they become due.
Policy Limitations
Allocation of Net Premiums. Except as otherwise described herein, your net Premium will be allocated in accordance with the allocation percentages you select. Percentages must total 100% and can be up to two decimal places.
We will credit Premium payments received prior to the end of the free look period as described in the “Free Look Period” section of this prospectus.
You may change your allocation percentages at any time by Request.
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Transfers Among Divisions. Subject to our rules as they may exist from time to time, you may at any time after the Free-Look Period Transfer to another Division all or a portion of the Account Value allocated to a Division. We will make Transfers pursuant to a Request.
Transfers may be Requested by indicating the Transfer of either a specified dollar amount or a specified percentage of the Division’s value from which the Transfer will be made.
Transfer privileges are subject to our consent. We reserve the right to impose limitations on Transfers, including, but not limited to: (1) the minimum amount that may be Transferred; and (2) the minimum amount that may remain in a Division following a Transfer from that Division.
A fee of $10 per Transfer will apply for all Transfers in excess of 12 made in a Policy Year. We may increase or decrease the Transfer charge; however, it is guaranteed to never exceed $10 per Transfer. All Transfers Requested on the same Business Day will count as only one Transfer toward the 12 free Transfers. The Transfer of your Initial Premium from the Great-West Government Money Market Division to your selected Divisions does not count toward the 12 free Transfers. Likewise, any Transfers under dollar cost averaging or periodic rebalancing of your Account Value under the rebalancer option do not count toward the 12 free Transfers (a one-time rebalancing, however, will be counted as one Transfer).
Fixed Account Transfers. Transfers into the Fixed Account are limited to once every 60 days. If the Company has imposed a limit on the amount that can be allocated to the Fixed Account, then your Transfer will be rejected if it would cause the value of the Fixed Account to exceed such limit. Transfers from the Fixed Account may only be made once per year. The maximum to be transferred out will be the greater of 25% of your balance in the Fixed Account or the amount of the Transfer in the previous 365 day period.
Market Timing & Excessive Trading. The Policies are intended for long-term investment and not for the purpose of market timing or excessive trading activity. Market timing activity may dilute the interests of Owners in the Funds. Market timing generally involves frequent or unusually large transfers that are intended to take advantage of short-term fluctuations in the value of a Fund’s portfolio securities and the reflection of that change in the Fund’s share price. In addition, frequent or unusually large transfers may harm performance by increasing Fund expenses and disrupting Fund management strategies. For example, excessive trading may result in forced liquidations of portfolio securities or cause the Fund to keep a relatively higher cash position, resulting in increased brokerage costs and lost investment opportunities.
We maintain procedures designed to discourage market timing and excessive trading by Owners. As part of those procedures, we will rely on the Funds to monitor for such activity. If a Fund believes such activity has occurred, we will scrutinize the Owner’s activity and request a determination from the Fund as to whether such activity constitutes market timing or excessive trading. If the Fund determines that the activity constitutes market timing or excessive trading, we will contact the Owner in writing to request that market timing and/or excessive trading stop immediately. We will then provide a subsequent report of the Owner’s trading activity to the Fund. If the Fund determines that the Owner has not ceased improper trading, and upon request of the Fund, we will inform the Owner in writing that a trading restriction is being implemented. The four possible trading restrictions are:
• Restrict the Owner to inquiry-only access for the web and voice response unit so that the Owner will only be permitted to make Transfer Requests by written Request mailed to us through U.S. mail (“U.S. Mail Restriction”); the Owner will not be permitted to make Transfer Requests via overnight mail, fax, the web, or the call center. Once the U.S. Mail Restriction has been in place for 180 days, the restricted Owner may Request that we lift the U.S. Mail Restriction by signing, dating and returning a form to us whereby the Owner acknowledges the potentially harmful effects of market timing and/or excessive trading on Funds and other investors, represents that no further market timing or excessive trading will occur, and acknowledges that we may implement further restrictions, if necessary, to stop improper trading by the Owner;
• Close the applicable Fund to all new monies, including contributions and Transfers in;
• Restrict all Owners to one purchase in the applicable Fund per 90 day period; or
• Remove the Fund as an investment option and convert all allocations in that Fund to a different investment option.
The discretionary nature of our procedures creates a risk that we may treat some Owners differently than others.
Our market timing and excessive trading procedures are such that we do not impose trading restrictions unless or until a Fund first detects and notifies us of potential market timing or excessive trading activity. Accordingly, we cannot prevent all market timing or excessive trading transfer activity before it occurs, as it may not be possible to identify it unless and until a trading pattern is established. To the extent the Funds do not detect and notify us of market timing and/or excessive trading or the trading
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restrictions we impose fail to curtail it, it is possible that a market timer or excessive trader may be able to make market timing and/or excessive trading transactions with the result that the management of the Funds may be disrupted and the Owners may suffer detrimental effects such as increased costs, reduced performance, and dilution of their interests in the affected Funds.
We endeavor to ensure that our procedures are uniformly and consistently applied to all Owners, and we do not exempt any Owners from these procedures. In addition, we do not enter into agreements with Owners whereby we permit market timing or excessive trading. Subject to applicable state law and the terms of each Policy, we reserve the right without prior notice to modify, restrict, suspend or eliminate the Transfer privileges (including telephone Transfers) at any time, to require that all Transfer Requests be made by you and not by your designee, and to require that each Transfer Request be made by a separate communication to us. We also reserve the right to require that each Transfer Request be submitted in writing and be signed by you.
The Funds may have adopted their own policies and procedures with respect to frequent purchases and redemptions of their respective shares. The prospectuses for the Funds should describe any such policies and procedures. The frequent trading policies and procedures of a Fund may be different, and more or less restrictive, than the frequent trading policies and procedures of other Funds and the policies and procedures we have adopted to discourage market timing and excessive trading. For example, a Fund may impose a redemption fee. Owners should also be aware that we may not have the contractual obligation or the operational capacity to apply the frequent trading policies and procedures of the respective Funds that would be affected by the Transfers.
We may revise our market timing and excessive trading policy and related procedures at our sole discretion, at any time and without prior notice, as we deem necessary or appropriate to comply with state or federal regulatory requirements or to impose additional or alternative restrictions on Owners engaging in market timing or excessive trading. In addition, our orders to purchase shares of the Funds are generally subject to acceptance by the Fund, and in some cases a Fund may reject or reverse our purchase order. Therefore, we reserve the right to reject any Owner’s Transfer Request if our order to purchase shares of the Fund is not accepted by, or is reversed by, an applicable Fund.
You should note that other insurance companies and retirement plans may invest in the Funds and that those companies or plans may or may not have their own policies and procedures on frequent transfers.
You should also know that the purchase and redemption orders received by the Funds generally are “omnibus” orders from intermediaries such as retirement plans or separate accounts funding variable insurance contracts. Omnibus orders reflect the aggregation and netting of multiple orders from individual retirement plan participants and/or individual owners of variable insurance contracts. The nature of such orders may limit the Funds’ ability to apply their respective frequent trading policies and procedures. As a result, there is a risk that the Funds may not be able to detect potential market timing and/or excessive trading activities in the omnibus orders they receive. We cannot guarantee that the Funds will not be harmed by transfer activity relating to the retirement plans and/or other insurance companies that invest in the Funds. If the policies and procedures of other insurance companies or retirement plans fail to successfully discourage frequent transfer activity, it may affect the value of your investments in the Funds. In addition, if a Fund believes that an omnibus order we submit may reflect one or more Transfer Requests from an Owner engaged in frequent transfer activity, the Fund may reject the entire omnibus order and thereby interfere with our ability to satisfy your Request even if you have not made frequent Transfers. For Transfers into more than one investment option, we may reject or reverse the entire Transfer Request if any part of it is not accepted by or is reversed by a Fund.
Exchange of Policy. You may exchange your Policy for a new policy issued by Great-West that does not provide for variable benefits. The new policy will have the same Policy Date, Issue Age, and Insured as your Policy on the date of the exchange. The exchange must be made within 24 Policy Months after the Issue Date of your Policy and all Policy Debt must be repaid.
The cash value of your current Policy will be applied to the new policy as the Initial Premium.
Age Requirements. An Insured’s Issue Age must be between 20 and 85 for Policies issued on a fully underwritten basis and between 20 and 70 for Policies issued on a guaranteed underwriting or a simplified underwriting basis.
Policy or Registrant Changes
Addition, Deletion or Substitution of Investment Options. Great-West selects the investment options offered though the Contract based on several criteria, including but not limited to asset class coverage, brand recognition, the reputation and tenure of the adviser or sub-adviser, expenses, performance, marketing, availability, investment conditions, and the qualifications of each investment company. Another factor we consider is whether the investment option or an affiliate of the investment option
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will compensate Great-West for providing certain administrative, marketing, or support services that would otherwise be provided by the investment option, its investment adviser, or its distributor. For more information on such compensation, see “Charges and Deductions” in this prospectus. When we develop and offer a variable annuity product in cooperation with a fund family or a distributor, Great-West will generally include investment options based on recommendations made by the fund family or the distributor, whose selection criteria may differ from our own. We have selected investment options of the Great-West Funds at least in part because they are managed by our directly owned subsidiary.
Great-West does not control the investment options and cannot guarantee that any of the investment options will always be available for allocation of Contributions or Transfers. We retain the right to make changes in the Series Account and in its investments, including the right to establish new sub-accounts or to eliminate existing sub-accounts. Great-West periodically reviews each investment option and reserves the right to discontinue the offering of any investment option if we determine the investment option no longer meets one or more of the criteria, or if the investment option has not attracted significant allocations. If an investment option is discontinued, we may substitute shares of another investment option or shares of another investment company for the discontinued investment option’s shares. Any share substitution will comply with the requirements of the 1940 Act. If you are contributing to a sub-account corresponding to an investment option that is being discontinued, you will be given notice prior to the investment option’s elimination. Before a sub-account is eliminated, we will notify you and request that you reallocate the amounts invested in the sub-account to be eliminated.
Entire Contract. Your entire contract with us consists of the Policy, including the attached copy of your application and any attached copies of supplemental applications for increases in the Total Face Amount, any endorsements and any riders. Any illustrations prepared in connection with the Policy do not form a part of our contract with you and are intended solely to provide information about how values under the Policy, such as Cash Surrender Value, death benefit and Account Value, will change with the investment experience of the Divisions, and such information is based solely upon data available at the time such illustrations are prepared.
Alteration. Sales representatives do not have any authority to either alter or modify your Policy or to waive any of its provisions. The only persons with this authority are our president, secretary, or one of our vice presidents.
Modification. Upon notice to you, we may modify the Policy if such a modification –
• is necessary to make the Policy or the Series Account comply with any law or regulation issued by a governmental agency to which we are, or the Series Account is, subject;
• is necessary to assure continued qualification of the Policy under the Code or other federal or state laws as a life insurance policy;
• is necessary to reflect a change in the operation of the Series Account or the Divisions; or
• adds, deletes or otherwise changes Division options.
We also reserve the right to modify certain provisions of the Policy as stated in those provisions. In the event of any such modification, we may make appropriate amendment to the Policy to reflect such modification.
Assignments. During the lifetime of the Insured, you may assign all or some of your rights under the Policy. All assignments must be filed at our Corporate Headquarters and must be in written form satisfactory to us. The assignment will then be effective as of the date you signed the form, subject to any action taken before we received it. We are not responsible for the validity or legal effect of any assignment.
Notice and Elections. To be effective, all notices and elections under the Policy must be in writing, signed by you, and received by us at our Corporate Headquarters. Certain exceptions may apply. Unless otherwise provided in the Policy, all notices, Requests and elections will be effective when received at our Corporate Headquarters complete with all necessary information.
Account Value
Your Account Value is the sum of your interests in each Division you have chosen, plus your interests in the Fixed Account, plus the amount in your Loan Account. The Account Value varies depending upon the Premiums paid, expense charges applied to Premium, mortality and expense risk charge, service charges, monthly risk charges, partial withdrawals, fees, Policy loans and the net investment factor (described below) for the Divisions to which your Account Value is allocated and the interest credited to the Fixed Account.
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We measure the amounts in the Divisions in terms of Units and Unit Values. On any given date, your interest in a Division is equal to the Unit Value multiplied by the number of Units credited to you in that Division. Amounts allocated to a Division will be used to purchase Units of that Division. Units are redeemed when you make partial withdrawals, undertake Policy loans or Transfer amounts from a Division, and for the payment of service charges, monthly mortality and expense charges, monthly risk charges and other fees. The number of Units of each Division purchased or redeemed is determined by dividing the dollar amount of the transaction by the Unit Value for the Division. The Unit Value for each Division was established at $10 for the first Valuation Date of the Division. The Unit Value for any subsequent Valuation Date is equal to the Unit Value for the preceding Valuation Date multiplied by the net investment factor (determined as provided below). The Unit Value of a Division for any Valuation Date is determined as of the close of the Valuation Period ending on that Valuation Date.
Transactions are processed on the date we receive a Premium at our Corporate Headquarters or upon approval of a Request. If your Premium or Request is received on a date that is not a Valuation Date, or after the close of the NYSE on a Valuation Date, the transaction will be processed on the next Valuation Date.
The Account Value on the Policy Date equals:
• that portion of net Premium received and allocated to the Division, plus
• that portion of net Premium received and allocated to the Fixed Account, less
• the service charges due on the Policy Date, less
• the monthly risk charge due on the Policy Date, less
• the monthly risk charge for any riders due on the Policy Date.
We apply your Initial Premium on the Policy Date, which will be the Issue Date (if we have already received your Initial Premium) or the Business Day we receive a Premium equal to, or in excess of, the Initial Premium after we have approved your application.
The Account Value attributable to each Division of the Series Account on the subsequent Valuation Dates is equal to:
• the Account Value attributable to the Division on the preceding Valuation Date multiplied by that Division’s net investment factor, plus
• that portion of net Premium received and allocated to the Division during the current Valuation Period, plus
• that portion of the value of the Loan Account Transferred to the Division upon repayment of a Policy loan during the current Valuation Period, plus
• any amounts Transferred by you to the Division from another Division during the current Valuation Period, less
• any amounts Transferred by you from the Division to another Division during the current Valuation Period, less
• that portion of any partial withdrawals deducted from the Division during the current Valuation Period, less
• that portion of any Account Value Transferred from the Division to the Loan Account during the current Valuation Period, less
• that portion of fees due in connection with a partial withdrawal charged to the Division, less
• the mortality and expense risk charge for each day in the Valuation Period, less
• if the first day of a Policy Month occurs during the current Valuation Period, that portion of the service charge for the Policy Month just beginning charged to the Division, less
• if the first day of a Policy Month occurs during the current Valuation Period, that portion of the monthly risk charge for the Policy Month just beginning charged to the Division, less
• if the first day of a Policy Month occurs during the current Valuation Period, that portion of the mortality and expense risk charge for the Policy Month just ending charged to the Division, less
• if the first day of a Policy Month occurs during the current Valuation Period, that Division’s portion of the cost for any riders and any extra risk charge if the Insured is in a rated class as specified in your Policy, for the Policy Month just beginning.
Net Investment Factor. The net investment factor for each Division for any Valuation Period is determined by dividing (1) by (2) where:
1. is the net result of:
• the net asset value of a Fund share held in the Division determined as of the end of the current Valuation Period, plus
• the per share amount of any dividend or other distribution declared on Fund shares held in the Division if the “ex-dividend” date occurs during the current Valuation Period, plus or minus
• a per share credit or charge with respect to any taxes incurred by or reserved for, or paid by us if not previously reserved for, during the current Valuation Period which are determined by us to be attributable to the operation of the Division; and
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2. is the net result of:
• the net asset value of a Fund share held in the Division determined as of the end of the preceding Valuation Period, plus or minus
• a per share credit or charge with respect to any taxes incurred by or reserved for, or paid by us if not previously reserved for, during the preceding Valuation Period which are determined by us to be attributable to the operation of the Division.
The net investment factor may be greater or less than or equal to one. Therefore, the Unit Value may increase, decrease or remain unchanged.
The net asset value reflects the investment advisory fees and other expenses that are deducted from the assets of each Fund. These fees and expenses are not fixed or specified under the terms of the Policy, may differ between Funds, and may vary from year to year. Fund fees and expenses are described in each Fund prospectus.
The Fixed Account Value is:
• Premiums, less expense charges, allocated to the Fixed Account; plus
• Sub-Account Value transferred to the Fixed Account; plus
• Interest credited to the Fixed Account; minus
• Partial withdrawals from the Fixed Account including any applicable partial withdrawal charges; minus
• The portion of any accrued policy fees and charges allocated to the Fixed Account; minus
• Loans from the Fixed Account; minus
• Transfers from the Fixed Account, including any applicable transfer charges.
During any Policy Month the Fixed Account Value will be calculated on a consistent basis. For purposes of crediting interest, Policy value deducted, transferred or withdrawn from the Fixed Account is accounted for on a first in first out basis.
The mortality and expense risk charge for the Valuation Period is the annual mortality and expense risk charge divided by 365 multiplied by the number of days in the Valuation Period.
Splitting Units. We reserve the right to split or combine the value of Units. In effecting any such change, strict equity will be preserved and no such change will have a material effect on the benefits or other provisions of your Policy.
Other Provisions and Benefits
Misstatement of Age or Sex (Non-Unisex Policy). If the age or (in the case of a non-unisex Policy) sex of the Insured is stated incorrectly in your Policy application or rider application, we will adjust the amount payable appropriately as described in the Policy.
If we determine that the Insured was not eligible for coverage under the Policy after we discover a misstatement of the Insured’s age, our liability will be limited to a return of Premiums paid, less any partial withdrawals, any Policy Debt, and the cost for riders.
Suicide. If the Insured, whether sane or insane, commits suicide within two years after your Policy’s Issue Date (one year if your Policy is issued in Colorado or North Dakota), we will not pay any part of the Death Benefit Proceeds. We will pay the Beneficiary the Premiums paid, less the amount of any Policy Debt, any partial withdrawals and the cost for riders.
If the Insured, whether sane or insane, commits suicide within two years after the effective date of an increase in the Total Face Amount (one year if your Policy is issued in Colorado or North Dakota), then our liability as to that increase will be the cost of insurance for that increase and that portion of the Account Value attributable to that increase. The Total Face Amount of the Policy will be reduced to the Total Face Amount that was in effect prior to the increase.
Incontestability. All statements made in the application or in a supplemental application are representations and not warranties. We relied and will continue to rely on those statements when approving the issuance, increase in face amount, increase in death benefit over Premium paid, or change in death benefit option of the Policy. In the absence of fraud, we can use no statement in defense of a claim or to cancel the Policy for misrepresentation unless the statement was made in the application or in a supplemental application. In the absence of fraud, after the Policy has been in force during the lifetime of the Insured for a period
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of two years from its Issue Date, we cannot contest it except for non-payment of Premiums. However, any increase in the Total Face Amount which is effective after the Issue Date will be incontestable only after such increase has been in force during the lifetime of the Insured for two years from the effective date of coverage of such increase.
Paid-Up Life Insurance. When the Insured reaches Attained Age 121 (if your Policy is in force at that time), the entire Account Value of your Policy (less outstanding Policy Debt) will be applied as a single Premium to purchase “paid-up” insurance which means all premiums have been paid and there are no additional premiums due. Outstanding Policy Debt will be repaid at this time. This repayment may be treated as a taxable distribution to you if your Policy is not a MEC. The net single Premium for this insurance will be based on the 2001 Commissioner’s Standard Ordinary, Sex Distinct, Non-Smoker Mortality Table and 4% interest. The cash value of your paid-up insurance, which initially is equal to the net single Premium, will remain in the Divisions of the Series Account in accordance with your then current allocation. While the paid-up life insurance is in effect your assets will remain in the Series Account. You may change your Division allocation instructions and you may Transfer your cash value among the Divisions. All charges under your Policy, to the extent applicable, will continue to be assessed, except we will no longer make a deduction each Policy Month for the monthly risk charge. Your death benefit will be fixed by the Code for Insured age 99. As your cash value changes based on the investment experience of the Divisions, the death benefit will increase or decrease accordingly. You may surrender the paid-up insurance Policy at any time and, if surrendered within 30 days of a Policy Anniversary, its cash value will not be less than it was on that Policy Anniversary. Please see “Federal Income Tax Considerations - Treatment When Insured Reaches Attained Age 121” below.
Supplemental Benefits. The following supplemental benefit riders are available, subject to certain limitations. An additional monthly risk charge will be assessed for each rider that is in force as part of the monthly deduction from your Account Value. If a supplemental benefit rider is terminated, the monthly risk charge for such rider will end immediately. See fee tables above.
Term Life Insurance Rider. This rider provides term life insurance on the Insured. Coverage is renewable annually until the Insured’s Attained Age 121. The amount of coverage provided under this rider varies from month to month as described below. We will pay the rider’s death benefit to the Beneficiary when we receive Due Proof of death of the Insured while this rider is in force.
This rider provides the same three death benefit options as your Policy. The option you choose under the rider must at all times be the same as the option you have chosen for your Policy. The rider’s death benefit will be determined at the beginning of each Policy Month in accordance with one of those options. For each of the options, any outstanding Policy Debt will reduce your death benefit.
If you purchase this rider, the Total Face Amount shown on your Policy’s specifications page will be equal to the minimum amount of coverage provided by this rider plus the base face amount (which is the minimum death benefit under your Policy without the rider’s death benefit). The minimum allocation of Total Face Amount between your Policy and the rider is 10% and 90% at inception, respectively. The total Death Benefit Payable under the rider and the Policy will be determined as described in “Death Benefit” below, using the Total Face Amount shown on your Policy’s specifications page.
Coverage under this rider will take effect on the latter of:
• the Policy Date of the Policy to which this rider is attached; or
• the date this rider is delivered and the first rider premium is paid to the Company.
The monthly risk rate for this rider will be the same as that used for the Policy and the monthly risk charge for the rider will be determined by multiplying the monthly risk rate by the rider’s death benefit. This charge will be calculated on the first day of each Policy Month and added to the Policy’s monthly risk charge.
If you purchase this rider, the sales load and return of expense charge will be proportionately lower as a result of a reduction in commission payments. Commissions payable to sales representatives for the sale of the Policy are calculated based on the total Premium payments. As a result, this rider generally is not offered in connection with any Policy with annual Premium payments of less than $100,000, except for policies issued on a guaranteed issue basis. In our discretion, we may decline to offer this rider or refuse to consent to a proposed allocation of coverage between a Policy and term rider.
If this rider is offered, the commissions will vary depending on the allocation of your coverage between the Policy and the term rider. The same initial Death Benefit will result in the highest commission when there is no term rider, with the commission declining as the portion of the Death Benefit coverage allocated to the term rider increases. Thus, the lowest commission amount is payable, and the lowest amount of sales load deducted from your Premiums will occur, when the maximum term rider is purchased.
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You may terminate this rider by Request. This rider also will terminate on the earliest of the following dates:
• the date the Policy is surrendered or terminated;
• the expiration of the grace period of the Policy; or
• the death of the Insured.
Change of Insured Rider (Not available to individual purchasers). This rider permits you to change the Insured under your Policy or any Insured that has been named by virtue of this rider. Before we change the Insured you must provide us with (1) a Request for the change signed by you and approved by us; (2) Evidence of Insurability for the new Insured; (3) evidence that there is an insurable interest between you and the new Insured; (4) evidence that the new Insured’s age, at the nearest birthday, is under 70 years; and (5) evidence that the new Insured was born prior to the Policy Date. We may charge a fee for administrative expenses when you change the Insured. The minimum charge is $100 per change and the maximum charge is $400 per change. When a change of Insured takes effect, Premiums will be based on the new Insured’s age, sex, mortality class and the Premium rate in effect on the Policy Date.
Report to Owner. We will maintain all records relating to the Series Account and the Divisions and the Fixed Account. We will send you a report at least once each Policy Year within 30 days after a Policy Anniversary. The report will show current Account Value, current allocation in each Division, death benefit, Premiums paid, investment experience since your last report, deductions made since the last report, and any further information that may be required by laws of the state in which your Policy was issued. It will also show the balance of any outstanding Policy loans and accrued interest on such loans. There is no charge for this report.
In addition, we will send you the financial statements of the Funds and other reports as specified in the 1940 Act. We also will mail you confirmation notices or other appropriate notices of Policy transactions quarterly or more frequently within the time periods specified by law. Please give us prompt written notice of any address change. Please read your statements and confirmations carefully and verify their accuracy and contact us promptly with any questions.
Dollar Cost Averaging. By Request, you may elect dollar cost averaging in order to purchase Units of the Divisions over a period of time. There is no charge for this service.
Dollar cost averaging permits you to automatically Transfer a predetermined dollar amount, subject to our minimum, at regular intervals from any one or more designated Divisions to one or more of the remaining, then available Divisions. The Unit Value will be determined on the dates of the Transfers. You must specify the percentage to be Transferred into each designated Division. Transfers may be set up on any one of the following frequency periods: monthly, quarterly, semiannually, or annually. The Transfer will be initiated one frequency period following the date of your Request. We will provide a list of Divisions eligible for dollar cost averaging that may be modified from time to time. Amounts Transferred through dollar cost averaging are not counted against the 12 free Transfers allowed in a Policy Year. You may not participate in dollar cost averaging and the rebalancer option (described below) at the same time. Participation in dollar cost averaging does not assure a greater profit, or any profit, nor will it prevent or necessarily alleviate losses in a declining market. We reserve the right to modify, suspend, or terminate dollar cost averaging at any time.
Rebalancer Option. By Request, you may elect the rebalancer option in order to automatically Transfer Account Value among the Divisions on a periodic basis. There is no charge for this service. This type of transfer program automatically reallocates your Account Value so as to maintain a particular percentage allocation among Divisions chosen by you. The amount allocated to each Division will grow or decline at different rates depending on the investment experience of the Divisions. Rebalancing does not change your Premium allocation unless that option is checked on the rebalancer Request. Your Premium allocation can also be changed by written Request at the address on the first page of this prospectus.
You may Request that rebalancing occur one time only, in which case the Transfer will take place on the date of the Request. This Transfer will count as one Transfer towards the 12 free Transfers allowed in a Policy Year.
You may also choose to rebalance your Account Value on a quarterly, semiannual, or annual basis, in which case the first Transfer will be initiated one frequency period following the date of your Request. On that date, your Account Value will be automatically reallocated to the selected Divisions. Thereafter, your Account Value will be rebalanced once each frequency period. In order to participate in the rebalancer option, your entire Account Value must be included. Transfers made with these frequencies will not count against the 12 free Transfers allowed in a Policy Year.
You must specify the percentage of Account Value to be allocated to each Division and the frequency of rebalancing. You may terminate the rebalancer option at any time by Request.
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You may not participate in the rebalancer option and dollar cost averaging at the same time. Participation in the rebalancer option does not assure a greater profit, or any profit, nor will it prevent or necessarily alleviate losses in a declining market. The Company reserves the right to modify, suspend, or terminate the rebalancer option at any time.
Non-Participating. The Policy does not pay dividends.
Premiums
Policy Application, Issuance and Initial Premium. To purchase a Policy, you must submit an application to our Corporate Headquarters. We will then follow our underwriting procedures designed to determine the insurability of the applicant. We may require full underwriting, which includes a medical examination and further information, before your application may be approved. We also may offer the Policy on a simplified underwriting or guaranteed issue basis. Applicants must be acceptable risks based on our applicable underwriting limits and standards. We will not issue a Policy until the underwriting process has been completed to our satisfaction. We reserve the right to reject an application for any lawful reason or to “rate” an Insured as a substandard risk, which will result in increased monthly risk rates. The monthly risk rate also may vary depending on the type of underwriting we use.
You must specify certain information in the application, including the Total Face Amount, the death benefit option and supplemental benefits, if any. The Total Face Amount generally may not be decreased below $100,000.
Upon approval of the application, we will issue to you a Policy on the life of the Insured. A specified Initial Premium must be paid before we issue the Policy. The effective date of coverage for your Policy (which we call the “Policy Date”) will be the date we receive a Premium equal to or in excess of the specified Initial Premium after we have approved your application. If your Premium payment is received on the 29th, 30th or 31st of a month, the Policy will be dated the 28th of that month.
We generally do not accept Premium payments before approval of an application; however, at our discretion, we may elect to do so. While your application is in underwriting, if we accept your Premium payment before approval of your application, we will provide you with temporary insurance coverage in accordance with the terms of our temporary insurance agreement. In our discretion, we may limit the amount of Premium we accept and the amount of temporary coverage we provide. If we approve your application, we will allocate your Premium payment to the Series Account or Fixed Account on the Policy Date, as described below. Otherwise, we will promptly return your payment to you. We will not credit interest to your Premium payment for the period while your application is in underwriting.
We reserve the right to change the terms or conditions of your Policy to comply with differences in applicable state law. Variations from the information appearing in this prospectus due to individual state requirements are described in supplements that are attached to this prospectus or in endorsements to the Policy, as appropriate.
Free Look Period. During the free look period (ten days or longer where required by state law), you may cancel your Policy. If you exercise the free look privilege, you must return the Policy to our Corporate Headquarters or to the representative from whom you purchased the Policy.
Generally, net Premium will be allocated to the Divisions you selected on the application. However, under certain circumstances described below, the net Premium will first be allocated to the Great-West Government Money Market Division and remain there until the next Valuation Date following the end of the free look period. On that date, the Sub-Account value held in the Great-West Government Money Market Division will be allocated to the Division(s) selected by you. If your Premium payments are received after 4:00 PM EST/EDT, such payments will be credited on the next Valuation Date. Regardless of when the payment is credited, you will receive the utilized values from the date we received your payment.
During the free look period, you may change your Division allocations and your allocation percentages, however depending on whether your state permits the immediate investment of your Premium, changes made during the free look period may not take effect until after the free look period has expired.
Policies returned during the free look period will be void from the Issue Date. In some states, we will refund your current Account Value plus the return of any expense charges deducted. In those states, this amount may be higher or lower than your Premium payments, which means you bear the investment risk during the free look period.
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Certain states require that we return the greater of your Account Value (less any surrenders, withdrawals and distributions already received) or the amount of the Premiums received. In those states, we will allocate your net Premium payments to the Great-West Government Money Market Division. We will Transfer the Account Value in that Division to the other Divisions of the Series Account in accordance with your most recent allocation instructions on file at the end of the free look period.
Premium. All Premium payments must be made payable to “Great-West Life & Annuity Insurance Company” and mailed to our Corporate Headquarters. The Initial Premium will be due and payable on or before your Policy’s Issue Date. The minimum Initial Premium will vary based on various factors, including the age of the Insured and the death benefits option you select, but may not be less than $100. You may pay additional Premium payments to us in the amounts and at the times you choose, subject to the limitations described below. To find out whether your Premium payment has been received, contact us at the address or telephone number shown on the first page of this prospectus.
We reserve the right to limit the number of Premium payments we accept on an annual basis. No Premium payment may be less than $100 per Policy without our consent, although we will accept a smaller Premium payment if necessary to keep your Policy in force. We reserve the right to restrict or refuse any Premium payments that exceed the Initial Premium amount shown on your Policy. We also reserve the right not to accept a Premium payment that causes the death benefit to increase by an amount that exceeds the Premium received. Evidence of insurability satisfactory to us may be required before we accept any such Premium.
We will not accept Premium payments that would, in our opinion, cause your Policy to fail to qualify as life insurance under applicable federal tax law. If a Premium payment is made in excess of these limits, we will accept only that portion of the Premium within those limits, and will refund the remainder to you.
Net Premiums. The net Premium is the amount you pay as the Premium less any expense charges applied to Premiums. See “Charges and Deductions - Expense Charge Applied to Premium,” above.
Planned Periodic Premiums. While you are not required to make additional Premium payments according to a fixed schedule, you may select a planned periodic Premium schedule and corresponding billing period, subject to our limits. We will send you reminder notices for the planned periodic Premium, unless you Request to have reminder notices suspended. You are not required, however, to pay the planned periodic Premium; you may increase or decrease the planned periodic Premium subject to our limits, and you may skip a planned payment or make unscheduled payments. Depending on the investment performance of the Divisions you select, the planned periodic Premium may not be sufficient to keep your Policy in force, and you may need to change your planned payment schedule or make additional payments in order to prevent termination of your Policy.
Death Benefits
Death Benefit. If your Policy is in force at the time of the Insured’s death, we will pay the Beneficiary an amount based on the death benefit option you select once we have received Due Proof of the Insured’s death. The amount payable will be:
• the amount of the selected death benefit option, less
• the value of any Policy Debt on the date of the Insured’s death, less
• any accrued and unpaid Policy charges.
We will pay this amount to the Beneficiary in one lump sum, unless the Beneficiary and we agree on another form of settlement. We will pay interest, at a rate not less than that required by law, on the amount of Death Benefit Proceeds, if payable in one lump sum, from the date of the Insured’s death to the date of payment.
In order to meet the definition of life insurance under the Code, section 7702 of the Code defines alternative testing procedures for the minimum death benefit under a Policy. See “Federal Income Tax Considerations - Tax Status of the Policy,” below. Your Policy must qualify under the cash value accumulation test (“CVAT”).
Under the CVAT testing procedures, there is a minimum death benefit required at all times equal to your Account Value multiplied by a pre-determined factor. The factors used to determine the minimum death benefit vary by age. The factors (expressed as percentages) used for the CVAT are set forth in your Policy.
The Policy has two death benefit options.
Option 1. The “Level Death” Option. Under this option, the death benefit is –
• the Policy’s Total Face Amount on the date of the Insured’s death less any partial withdrawals; or, if greater,
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• the Account Value on the date of death multiplied by the applicable factor shown in the table set forth in your Policy.
This death benefit option should be selected if you want to minimize your cost of insurance (monthly risk charge).
Option 2. The “Coverage Plus” Option. Under this option, the death benefit is –
• the sum of the Total Face Amount and Account Value of the Policy on the date of the Insured’s death less any partial withdrawals; or, if greater,
• the Account Value on the date of death multiplied by the applicable factor shown in the table set forth in your Policy.
This death benefit option should be selected if you want to maximize your death benefit.
Your Account Value and death benefit fluctuate based on the performance of the investment options you select and the expenses and deductions charged to your account. See the “Account Value” and “Charges and Deductions” sections of this prospectus.
There is no minimum death benefit guarantee associated with this Policy.
Changes in Death Benefit Option. After the first Policy Year, but not more than once each Policy Year, you may change the death benefit option by Request. Any change will be effective on the first day of the Policy Month following the date we approve your Request. A maximum administrative fee of $100 will be deducted from your Account Value each time you change your death benefit option.
A change in the death benefit option will not change the amount payable upon the death of the Insured on the date of change. Any change is subject to the following conditions:
• If the change is from option 1 to option 2, the new Total Face Amount, at the time of the change, will equal the prior Total Face Amount less the Account Value. Evidence of insurability may be required.
• If the change is from option 2 to option 1, the new Total Face Amount, at the time of the change, will equal the prior Total Face Amount plus the Account Value.
Changes in Total Face Amount. You may increase or decrease the Total Face Amount of your Policy at any time within certain limits.
Minimum Changes. Each increase or decrease in the Total Face Amount must be at least $25,000. We reserve the right to change the minimum amount by which you may change the Total Face Amount.
Increases in Total Face Amount. To Request an increase in Total Face Amount, you must provide satisfactory evidence of the Insured’s insurability. Once approved by us, an increase will become effective on the Policy Anniversary following our approval of your Request, subject to the deduction of the first Policy Month’s monthly risk charge, service charge, any extra risk charge if the Insured is in a rated class and the cost of any riders.
Each increase to the Total Face Amount is considered to be a new segment to the Policy. When an increase is approved, Premium is allocated against the original Policy segment up to the seven-pay Premium limit established on the Issue Date. Any excess Premium is then allocated toward the new segment. Each segment will have a separate target Premium associated with it. The expense charge applied to Premium is higher up to target and lower for Premium in excess of the target as described in detail in the “Charges and Deductions” section of this prospectus. The expense charge formula will apply to each segment based on the target Premium for that segment. In addition, each segment will have a new incontestability period and suicide exclusion period as described in the “Other Provisions and Benefits” section of this prospectus.
Decreases in Total Face Amount. A decrease in Total Face Amount will become effective at the beginning of the next Policy Month following our approval of your Request. The Total Face Amount after the decrease must be at least $100,000.
For purposes of the incontestability provision of your Policy, any decrease in Total Face Amount will be applied in the following order:
• first, to the most recent increase;
• second, to the next most recent increases, in reverse chronological order; and
• finally, to the initial Total Face Amount.
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Surrenders and Withdrawals
Surrenders. You may surrender your Policy for its Cash Surrender Value at any time while the Insured is living. If you do, the insurance coverage and all other benefits under the Policy will terminate. To surrender your Policy, contact us at the address or telephone number shown on the first page of this prospectus. We will send you the paperwork necessary for you to Request the surrender of your Policy. The proceeds of a surrender will be payable within seven days of our receipt of the completed Request.
We will determine your Cash Surrender Value (minus any charges not previously deducted) as of the end of the first Valuation Date after we receive your Request for surrender.
If you withdraw part of the Cash Surrender Value, your Policy’s death benefit will be reduced and you may incur taxes and tax penalties.
You may borrow from us using your Account Value as collateral.
A surrender may have tax consequences, including tax penalties. See “Federal Income Tax Considerations – Tax Treatment of Policy Benefits,” below.
Partial Withdrawal. You may Request a partial withdrawal of Account Value at any time while the Policy is in force. The amount of any partial withdrawal must be at least $500 and may not exceed 90% of your Account Value less the value of the Loan Account. A partial withdrawal fee will be deducted from your Account Value for all partial withdrawals after the first made during the same Policy Year. This administrative fee is guaranteed to be no greater than $25. To Request a partial withdrawal, contact us at the address or telephone number shown on the first page of this prospectus. We will send you the paperwork necessary for you to request a withdrawal from your Policy. The proceeds of any such partial withdrawal will be payable within seven days of our receipt of the completed Request.
The Death Benefit Proceeds will be reduced by the amount of any partial withdrawals.
Your Account Value will be reduced by the amount of a partial withdrawal. The amount of a partial withdrawal will be withdrawn from the Divisions in proportion to the amounts in the Divisions bearing on your Account Value. You cannot repay amounts taken as a partial withdrawal. Any subsequent payments received by us will be treated as additional Premium payments and will be subject to our limitations on Premiums.
A partial withdrawal may have tax consequences. See “Federal Income Tax Considerations – Tax Treatment of Policy Benefits,” below.
Loans
Policy Loans. You may Request a Policy loan of up to 90% of your Account Value, decreased by the amount of any outstanding Policy Debt on the date the Policy loan is made less any accrued loan interest and less the current monthly deductions remaining for the balance of the Policy Year. When a Policy loan is made, a portion of your Account Value equal to the amount of the Policy loan will be allocated to the Loan Account as collateral for the loan. This amount will not be affected by the investment experience of the Series Account while the loan is outstanding and will be subtracted from the Divisions in proportion to the amounts in the Divisions bearing on your Account Value. The minimum Policy loan amount is $500.
The interest rate on the Policy loan will be determined annually, using a simple interest formula, at the beginning of each Policy Year. Specific loan interest rate information can be obtained by calling 888-353-2654. That interest rate will be guaranteed for that Policy Year and will apply to all Policy loans outstanding during that Policy Year. Interest is due and payable on each Policy Anniversary. Interest not paid when due will be added to the principal amount of the loan and will bear interest at the loan interest rate.
Presently, the maximum interest rate for Policy loans is the Moody’s Corporate Bond Yield Average - Monthly Average Corporates, which is published by Moody’s Investor Service, Inc. If the Moody’s Corporate Bond Yield Average ceases to be published, the maximum interest rate for Policy loans will be derived from a substantially similar average adopted by your state’s Insurance Commissioner.
We must reduce our Policy loan interest rate if the maximum loan interest rate is lower than the loan interest rate for the previous Policy Year by one-half of one percent or more.
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We may increase the Policy loan interest rate but such increase must be at least one-half of one percent. No increase may be made if the Policy loan interest rate would exceed the maximum loan interest rate.
We will send you advance notice of any increase in the Policy loan rate.
Interest will be credited to amounts held in the Loan Account using a compound interest formula. The rate will be no less than the Policy loan interest rate then in effect less a maximum of 0.9%.
All payments we receive from you will be treated as Premium payments unless we have received notice, in form satisfactory to us, that the funds are for loan repayment. If you have a Policy loan, it is generally advantageous to repay the loan rather than make a Premium payment because Premium payments incur expense charges whereas loan repayments do not. Loan repayments will first reduce the outstanding balance of the Policy loan and then accrued but unpaid interest on such loans. We will accept repayment of any Policy loan at any time while the Policy is in force. Amounts paid to repay a Policy loan will be allocated to the Divisions in accordance with your allocation instructions then in effect at the time of repayment. Any amount in the Loan Account used to secure the repaid loan will be allocated back to the Sub-Accounts.
A Policy loan, whether or not repaid, will affect the Death Benefit Proceeds, payable upon the Insured’s death, and the Account Value because the investment results of the Divisions do not apply to amounts held in the Loan Account. The longer a loan is outstanding, the greater the effect is likely to be, depending on the investment results of the Divisions while the loan is outstanding. The effect could be favorable or unfavorable.
Lapse and Reinstatement
Lapse and Continuation of Coverage. If you cease making Premium payments, coverage under your Policy and any riders to the Policy will continue until your Account Value, less any Policy Debt, is insufficient to cover the monthly deduction. When that occurs, the grace period will go into effect.
Grace Period. If the first day of a Policy Month occurs during the Valuation Period and your Account Value, less any Policy Debt, is not sufficient to cover the monthly deduction for that Policy Month, then your Policy will enter the grace period described below. If you do not pay sufficient additional Premiums during the grace period, your Policy will terminate without value.
The grace period will allow 61 days for the payment of Premium sufficient to keep the Policy in force. Any such Premium must be in an amount sufficient to cover deductions for the monthly risk charge, the service charge, the cost for any riders and any extra risk charge if the Insured is in a rated class for the next two Policy Months. Notice of Premium due will be mailed to your last known address or the last known address of any assignee of record at least 31 days before the date coverage under your Policy will cease. If the Premium due is not paid within the grace period, then the Policy and all rights to benefits will terminate without value at the end of the 61-day period. The Policy will continue to remain in force during this grace period. If the Death Benefit Proceeds become payable by us during the grace period, then any due and unpaid Policy charges will be deducted from the amount payable by us.
Termination of Policy. Your Policy will terminate on the earliest of the date we receive your Request to surrender, the expiration date of the grace period due to insufficient value or the date of death of the Insured. Upon lapse or termination, the Policy no longer provides insurance benefits.
Reinstatement. Before the Insured’s death, we will reinstate your Policy, provided that the Policy has not been surrendered, and provided further that:
• you make your reinstatement Request within three years from the date of termination;
• you submit satisfactory Evidence of Insurability to us;
• you pay an amount equal to the Policy charges which were due and unpaid at the end of the grace period;
• you pay a Premium equal to four times the monthly deduction applicable on the date of reinstatement; and
• you repay or reinstate any Policy loan that was outstanding on the date coverage ceased, including interest at 6.00% per year compounded annually from the date coverage ceased to the date of reinstatement of your Policy.
A reinstated Policy’s Total Face Amount may not exceed the Total Face Amount at the time of termination. Your Account Value on the reinstatement date will reflect:
• the Account Value at the time of termination; plus
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• net Premiums attributable to Premiums paid to reinstate the Policy; less
• the monthly expense charge; less
• the monthly cost of insurance charge applicable on the date of reinstatement; less
• the expense charge applied to Premium.
The effective date of reinstatement will be the date the application for reinstatement is approved by us.
Deferral of Payment. We will usually pay any amount due from the Series Account within seven days after the Valuation Date following your Request giving rise to such payment or, in the case of death of the Insured, Due Proof of such death. Payment of any amount payable from the Series Account on death, surrender, partial withdrawal, or Policy loan may be postponed whenever:
• the NYSE is closed other than customary weekend and holiday closing, or trading on the NYSE is otherwise restricted;
• the SEC, by order, permits postponement for the protection of Owners; or
• an emergency exists as determined by the SEC, as a result of which disposal of securities is not reasonably practicable, or it is not reasonably practicable to determine the value of the assets of the Series Account.
Federal Income Tax Considerations
The following summary provides a general description of the federal income tax considerations associated with the Policy and does not purport to be complete or to cover all situations. This discussion is not intended as tax advice. You should consult counsel or other competent tax advisers for more complete information. This discussion is based upon our understanding of the Internal Revenue Service’s (the “IRS”) current interpretation of current federal income tax laws. We make no representation as to the likelihood of continuation of the current federal income tax laws or of the current interpretations by the IRS. We do not make any guarantee regarding the tax status of any Policy or any transaction regarding the Policy.
The Policy may be used in various arrangements, including non-qualified deferred compensation or salary continuance plans, split dollar insurance plans, executive bonus plans, retiree medical benefit plans and others. The tax consequences of such plans may vary depending on the particular facts and circumstances of each individual arrangement. Therefore, if the use of the Policy in any such arrangement is contemplated, you should consult a qualified tax adviser for advice on the tax attributes and consequences of the particular arrangement.
Tax Status of the Policy
A Policy has certain tax advantages when treated as a life insurance contract within the meaning of section 7702 of the Code. We believe that the Policy meets the section 7702 definition of a life insurance contract and will take whatever steps are appropriate and reasonable to attempt to cause the Policy to comply with section 7702. We reserve the right to amend the Policy to comply with any future changes in the Code, any regulations or rulings under the Code and any other requirements imposed by the IRS.
Diversification of Investments. Section 817(h) of the Code requires that the investments of each Division of the Series Account be “adequately diversified” in accordance with certain Treasury Department regulations. Disqualification of the Policy as a life insurance contract for failure to comply with the diversification requirements would result in the imposition on you of federal income tax at ordinary income tax rates with respect to the earnings allocable to the Policy in the year of the failure and all prior years prior to the receipt of payments under the Policy. We believe that the Divisions will be adequately diversified.
Policy Owner Control. In connection with its issuance of temporary and proposed regulations under Section 817(h) in 1986, the Treasury Department announced that those regulations did not “provide guidance concerning the circumstances in which investor control of the investments of a segregated asset account may cause the investor (i.e., the Owner), rather than the insurance company to be treated as the owner of the assets in the account” (which would result in the current taxation of the income on those assets to the Owner). In Revenue Ruling 2003-91, the IRS provided such guidance by describing the circumstances under which the owner of a variable contract will not possess sufficient control over the assets underlying the contract to be treated as the owner of those assets for federal income tax purposes. Rev. Rul. 2003-91 states that the determination of whether the owner of a variable contract is to be treated as the owner of the assets held by the insurance company under the contract will depend on all of the facts and circumstances. We do not believe that your ownership rights under the Policy would result in your being treated as the Owner of the assets of the Policy under Rev. Rul. 2003-91. However, we do not know whether additional guidance will be provided by the IRS on this issue and what standards may be contained in such guidance. Therefore, we reserve the right to modify the Policy as necessary to attempt to prevent an Owner from being considered the owner of a pro rata share of the assets of the Policy.
The following discussion assumes that your Policy will qualify as a life insurance contract for federal income tax purposes.
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Tax Treatment of Policy Benefits
Life Insurance Death Benefit Proceeds. In general, the amount of the Death Benefit Payable under your Policy is excludible from your Beneficiary’s gross income under the Code.
If the death benefit is not received in a lump sum and is, instead, applied under a proceeds option agreed to by us and the Beneficiary, payments generally will be prorated between amounts attributable to the death benefit, which will be excludible from the Beneficiary’s income, and amounts attributable to interest (occurring after the Insured’s death), which will be includable in the Beneficiary’s income.
Tax Deferred Accumulation. Any increase in your Account Value is generally not taxable to you. If you receive or are deemed to receive amounts from the Policy before the Insured dies, see the following section entitled “Distributions” for a more detailed discussion of the taxability of such payments.
Depending on the circumstances, any of the following transactions may have federal income tax consequences:
• the exchange of a Policy for a life insurance, endowment or annuity contract;
• a change in the death benefit option;
• a Policy loan;
• a partial surrender;
• a complete surrender;
• a change in the ownership of a Policy;
• a change of the named Insured; or
• an assignment of a Policy.
In addition, federal, state and local transfer and other tax consequences of ownership or receipt of Death Benefit Proceeds will depend on your circumstances and those of the named Beneficiary. Whether partial withdrawals (or other amounts deemed to be distributed) constitute income subject to federal income tax depends, in part, upon whether your Policy is considered a MEC.
Surrenders. If you surrender your Policy, you will recognize ordinary income to the extent the Account Value exceeds the “investment in the contract,” which is generally the total of Premiums and other consideration paid for the Policy, less all amounts previously received under the Policy to the extent those amounts were excludible from gross income.
Modified Endowment Contracts. Section 7702A of the Code treats certain life insurance contracts as MECs. In general, a Policy will be treated as a MEC if total Premiums paid at any time during the first seven Policy Years exceed the sum of the net level Premiums which would have been paid on or before that time if the Policy provided for paid-up future benefits after the payment of seven level annual Premiums (“seven-pay test”). In addition, a Policy may be treated as a MEC if there is a “material change” to the Policy.
We will monitor your Premium payments and other Policy transactions and notify you if a payment or other transaction might cause your Policy to become a MEC. We will not invest any Premium or portion of a Premium that would cause your Policy to become a MEC without instruction to do so from you. We will promptly notify you or your agent of the excess cash received. We will not process the Premium payment unless we receive a MEC acceptance form or Policy change form within 48 hours of receipt of the excess funds. If paperwork is received that allows us to process the excess cash, the effective date will be the date of the new paperwork.
Further, if a transaction occurs which decreases the Total Face Amount of your Policy during the first seven years, we will retest your Policy, as of the date of its purchase, based on the lower Total Face Amount to determine compliance with the seven-pay test. Also, if a decrease in Total Face Amount occurs within seven years of a “material change,” we will retest your Policy for compliance as of the date of the “material change.” Failure to comply in either case would result in the Policy’s classification as a MEC regardless of our efforts to provide a payment schedule that would not otherwise violate the seven-pay test.
The rules relating to whether a Policy will be treated as a MEC are complex and cannot be fully described in the limited confines of this summary. Therefore, you should consult with a competent tax adviser to determine whether a particular transaction will cause your Policy to be treated as a MEC.
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Distributions
Distributions Under a Policy That Is Not a MEC. If your Policy is not a MEC, a distribution is generally treated first as a tax-free recovery of the “investment in the contract,” and then as a distribution of taxable income to the extent the distribution exceeds the “investment in the contract.” An exception is made for cash distributions that occur in the first 15 Policy Years as a result of a decrease in the death benefit or other change that reduces benefits under the Policy that are made for purposes of maintaining compliance with section 7702. Such distributions are taxed in whole or part as ordinary income (to the extent of any gain in the Policy) under rules prescribed in section 7702.
If your Policy is not a MEC, Policy loans and loans secured by the Policy are generally not treated as distributions. Such loans are instead generally treated as your indebtedness.
Finally, if your Policy is not a MEC, distributions (including distributions upon surrender), Policy loans and loans secured by the Policy are not subject to the ten percent additional tax applicable to distributions from a MEC.
Distributions Under Modified Endowment Contracts. If treated as a MEC, your Policy will be subject to the following tax rules:
• First, partial withdrawals are treated as ordinary income subject to ordinary income tax up to the amount equal to the excess (if any) of your Account Value immediately before the distribution over the “investment in the contract” at the time of the distribution.
• Second, Policy loans and loans secured by a Policy are treated as partial withdrawals and taxed accordingly. Any past-due loan interest that is added to the amount of the loan is treated as a loan.
• Third, a ten percent additional penalty tax is imposed on that portion of any distribution (including distributions upon surrender), Policy loans, or loans secured by a Policy, that is included in income, except where the distribution or loan is made to a taxpayer that is a natural person, and:
1. is made when the taxpayer is age 59 1⁄2 or older;
2. is attributable to the taxpayer becoming disabled; or
3. is part of a series of substantially equal periodic payments (not less frequently than annually) for the duration of the taxpayer’s life (or life expectancy) or for the duration of the longer of the taxpayer’s or the Beneficiary’s life (or life expectancies).
Multiple Policies. All MECs issued by us (or our affiliates) to you during any calendar year will be treated as a single MEC for purposes of determining the amount of a Policy distribution that is taxable to you.
Treatment When Insured Reaches Attained Age 121. As described above, when the Insured reaches Attained Age 121, we will issue you a “paid-up” life insurance Policy. We believe that the paid-up life insurance Policy will continue to qualify as a “life insurance contract” under the Code. However, there is some uncertainty regarding this treatment. It is possible, therefore, that you would be viewed as constructively receiving the Cash Surrender Value in the year in which the Insured attains age 121 and would realize taxable income at that time, even if the Death Benefit Proceeds were not distributed at that time. In addition, any outstanding Policy Debt will be repaid at that time. This repayment may be treated as a taxable distribution to you, if your contract is not a MEC.
The IRS has issued Revenue Procedure 2010-28 providing a safe harbor concerning the application of Sections 7702 and 7702A to life insurance contracts that have mortality guarantees based on the 2001 CSO Table and which may continue in force after an insured attains age 100. If a contract satisfies all the requirements of Sections 7702 and 7702A using all of the Age 100 Safe Harbor Testing Method requirements set forth in Rev. Proc. 2010-28, the IRS will not challenge the qualification of that contract under Sections 7702 and 7702A. Rev. Proc. 2010-28 also states that “No adverse inference should be drawn with respect to the qualification of a contract as a life insurance contract under §7702, or its status as not a MEC under §7702A, merely by reason of a failure to satisfy all of the requirements of the Age 100 Safe Harbor.”
Federal Income Tax Withholding. We are required to withhold 10% on that portion of a Policy distribution that is taxable, unless you direct us in writing not to do so at or before the time of the Policy distribution. As the Owner you are responsible for the payment of any taxes and early distribution penalties that may be due on Policy distributions. We may be required to withhold at a rate of 30% under the Foreign Account Tax Compliance Act (“FATCA”) on certain distributions to foreign financial institutions and non-financial foreign entities holding accounts on behalf of and/or the assets of U.S. persons unless the foreign entities provide us with certain certifications regarding their status under FATCA on the applicable IRS forms. Prospective purchasers with accounts in foreign financial institutions or non-financial foreign entities are advised to consult with a competent tax advisor regarding the application of FATCA to their purchase situation.
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Actions to Ensure Compliance with the Tax Law. We believe that the maximum amount of Premiums we intend to permit for the Policies will comply with the Code definition of a “life insurance contract.” We will monitor the amount of your Premiums, and, if you pay a Premium during a Policy Year that exceeds those permitted by the Code, we will promptly refund the Premium or a portion of the Premium before any allocation to the Funds. We reserve the right to increase the death benefit (which may result in larger charges under a Policy) or to take any other action deemed necessary to ensure the compliance of the Policy with the federal tax definition of a life insurance contract.
Trade or Business Entity Owns or Is Directly or Indirectly a Beneficiary of the Policy. Where a Policy is owned by other than a natural person, the Owner’s ability to deduct interest on business borrowing unrelated to the Policy can be impacted as a result of its ownership of cash value life insurance. No deduction will be allowed for a portion of a taxpayer’s otherwise deductible interest expense unless the Policy covers only one individual, and such individual is, at the time first covered by the Policy, a 20 percent owner of the trade or business entity that owns the Policy, or an officer, director, or employee of such trade or business.
Although this limitation generally does not apply to Policies held by natural persons, if a trade or business (other than one carried on as a sole proprietorship) is directly or indirectly the Beneficiary under a Policy (e.g., pursuant to a split-dollar agreement), the Policy will be treated as held by such trade or business. The effect will be that a portion of the trade or business entity’s deduction for its interest expenses will be disallowed unless the above exception for a 20 percent owner, employee, officer or director applies.
The portion of the entity’s interest deduction that is disallowed will generally be a pro rata amount which bears the same ratio to such interest expense as the taxpayer’s average unborrowed cash value bears to the sum of the taxpayer’s average unborrowed cash value and average adjusted bases of all other assets. Any corporate or business use of the life insurance should be carefully reviewed by your tax adviser with attention to these rules as well as any other rules and possible tax law changes that could occur with respect to corporate-owned life insurance.
In Revenue Ruling 2011-9, the IRS held that the status of an insured as an employee “at the time first covered” for purposes of Section 264(f) does not carry over from a contract given up in a Section 1035 tax-free exchange to a contract received in such an exchange. Therefore, the pro rata interest expense disallowance exception of Section 264(f)(4) does not apply to new Policies received in Section 1035 tax-free exchanges unless such Policies also qualify for the exception provided by Section 264(f)(4) of the Code.
Employer-Owned Life Insurance. The Pension Protection Act of 2006 added a new section to the Code that denies the tax-free treatment of death benefits payable under an employer-owned life insurance contract unless certain notice and consent requirements are met and either (1) certain rules relating to the insured employee’s status are satisfied or (2) certain rules relating to the payment of the “amount received under the contract” to, or for the benefit of, certain beneficiaries or successors of the insured employee are satisfied. The new rules apply to life insurance contracts owned by corporations (including S corporations), individual sole proprietors, estates and trusts and partnerships that are engaged in a trade or business. Any business contemplating the purchase of a Policy on the life of an employee should consult with its legal and tax advisers regarding the applicability of the new legislation to the proposed purchase.
Split Dollar Life Insurance. A tax adviser should also be consulted with respect to the 2003 split dollar regulations if you have purchased or are considering the purchase of a Policy for a split dollar insurance plan. Any business contemplating the purchase of a new life insurance contract or a change in an existing contract should consult a tax adviser.
Other Employee Benefit Programs. Complex rules may apply when a Policy is held by an employer or a trust, or acquired by an employee, in connection with the provision of employee benefits. These Policy owners also must consider whether the Policy was applied for by, or issued to, a person having an insurable interest under applicable state law, as the lack of insurable interest may, among other things, affect the qualification of the Policy as life insurance for federal income tax purposes and the right of the Beneficiary to death benefits. Employers and employer-created trusts may be subject to reporting, disclosure and fiduciary obligations under the Employee Retirement Income Security Act of 1974, as amended. You should consult your legal adviser.
Policy Loan Interest. Generally, no tax deduction is allowed for interest paid or accrued on any indebtedness under a Policy.
Change of Insured Rider. The Company makes no representations concerning the tax effects of the change of insured rider. Owners are responsible for seeking tax counsel regarding the tax effects of the Rider. The Company reserves the right to refund cash value exceeding allowable limits for tax exempt purposes, or that would be charged as current interest income to Owners.
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Investment Income Surtax. In taxable years beginning in 2013, taxable distributions from life insurance policies are considered “investment income” for purposes of the newly enacted Medicare tax on investment income. Thus, in certain circumstances, a 3.8% tax may be applied to some or all of the taxable portion of distributions (e.g., earnings) to individuals, trusts, and estates whose income exceeds certain threshold amounts as follows: an amount equal to the lesser of (a) “net investment income”; or (b) the excess of a taxpayer’s modified adjusted gross income over a specified income threshold ($250,000 for married couples filing jointly, $125,000 for married couples filing separately, and $200,000 for everyone else). The IRS has issued regulations that treat taxable distributions from life insurance policies as “Net investment income.” Please discuss the impact of the Investment Income Surtax on you with a competent tax advisor.
Our Taxes. We are taxed as a life insurance company under part I of subchapter L of the Code. The operations of the Series Account are taxed as part of our operations. Investment income and realized capital gains are not taxed to the extent that they are applied under the Policies. As a result of the Tax Cuts and Jobs Act of 2017, we are generally required to capitalize and amortize certain Policy acquisition expenses over a fifteen year period rather than currently deducting such expenses. This so-called “deferred acquisition cost” tax (“DAC tax”) applies to the deferred acquisition expenses of a Policy and results in a significantly higher corporate income tax liability for Great-West. We reserve the right to adjust the amount of a charge to Premium to compensate us for these anticipated higher corporate income taxes.
A portion of the expense charges applied to Premium is used to offset the federal, state or local taxes that we incur which are attributable to the Series Account or the Policy. We reserve the right to adjust the amount of this charge.
Summary
• We do not make any guarantees about the Policy’s tax status.
• We believe the Policy will be treated as a life insurance contract under federal tax laws.
• Death benefits generally are not subject to federal income tax.
• Investment gains are normally not taxed unless distributed to you before the Insured dies.
• If you pay more Premiums than permitted under the seven-pay test, your Policy will be a MEC.
• If your Policy becomes a MEC, partial withdrawals, Policy loans and surrenders may incur taxes and tax penalties.
Corporate Tax Shelter Requirements
The Company does not believe that any purchase of a Policy by an Owner pursuant to this offering will be subject to the tax shelter registration, customer list or reporting requirements under the Code and implementing regulations. All Owners that are corporations are advised to consult with their own tax and/or legal counsel and advisers, to make their own determination as to the applicability of the disclosure requirements of IRC § 6011 and Treas. Reg. Section 1.6011-4 to their federal income tax returns.
Legal Proceedings
There are no pending legal proceedings that would have an adverse material effect on the Series Account or on GWFS. Great-West is engaged in various kinds of routine litigation that, in our judgment, is not material to its total assets or material with respect to the Series Account.
Legal Matters
Pursuant to Commodity Futures Trading Commission Rule 4.5, Great-West has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act. Therefore, it is not subject to registration or regulation as a commodity pool operator under the Commodity Exchange Act.
The law firm of Carlton Fields, P.A., 1025 Thomas Jefferson St., N.W., Suite 400 West, Washington, D.C. 20007-5208, serves as special counsel to Great-West with regard to the federal securities laws.
Cyber Security Risks
Because our variable life insurance contract business is highly dependent upon the effective operation of our computer systems and those of our business partners, our business is vulnerable to disruptions from utility outages and susceptible to operational and information security risks resulting from information system failures (e.g., hardware and software malfunctions) and cyber-attacks. These risks include, among other things, the theft, misuse, corruption, and destruction of data maintained online or
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digitally, denial of service on our website and other operational disruption, and unauthorized release of confidential Owner information. Such system failures and cyber-attacks affecting us, the Funds, intermediaries and other affiliated or third-party service providers may adversely affect us and your Policy value. For instance, system failures and cyber-attacks may interfere with our processing of Policy transactions, including the processing of Transfer Requests from our website or with the Funds, impact our ability to calculate Unit Values, cause the release and possible destruction of confidential owner or business information, impede order processing, subject us and/or our service providers and intermediaries to regulatory fines, litigation, and financial losses and/or cause reputational damage. Cyber security risks may also impact the issuers of securities in which the Funds invest, which may cause the Funds underlying your Policy to lose value. There can be no assurance that we or the Funds or our service providers will avoid losses affecting your Policy due to cyber-attacks or information security breaches in the future.
Abandoned Property Requirements
Every state has unclaimed property laws that generally provide for escheatment to the state of unclaimed property (including proceeds of life insurance policies) under various circumstances. This “escheatment” is revocable, however, and the state is obligated to pay the applicable proceeds if the property owner steps forward to claim it with the proper documentation. To help prevent such escheatment, it is important that you keep your policy and other information on file with us up to date, including the names, contact information, and identifying information for owners, beneficiaries, and other payees. Such updates should be communicated by writing to the Company at 8515 E. Orchard Road, 9T2, Greenwood Village, CO 80111, by calling 888-353-2654, by sending an email to gwexecbenefits@greatwest.com or via the web at www.greatwest.com/executivebenefits.
Financial Statements
Great-West’s financial statements, which are included in the Statement of Additional Information (“SAI”), should be considered only as bearing on our ability to meet our obligations with respect to the death benefit and our assumption of the mortality and expense risks. They should not be considered as bearing on the investment performance of the Fund shares held in the Series Account.
Independent Registered Public Accounting Firm
The financial statements and financial highlights of each of the investment divisions of the COLI VUL-2 Series Account of Great-West Life & Annuity Insurance Company included in the Statement of Additional Information have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing in the Registration Statement. Such financial statements have so been included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. The statutory financial statements of Great-West Life & Annuity Insurance Company included in the Statement of Additional Information included in the Registration Statement have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing in the Registration Statement. Such statutory financial statements have so been included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.
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Appendix A – Glossary of Terms
Unless otherwise defined in this prospectus, capitalized terms shall have the meaning set forth below.
Account Value – The sum of the value of your interests in the Divisions, the Fixed Account and the Loan Account. This amount reflects: (1) the Premiums you pay; (2) the investment performance of the Divisions you select; (3) any Policy loans or partial withdrawals; (4) your Loan Account balance; and (5) the charges we deduct under the Policy.
Attained Age – The age of the Insured, nearest birthday, as of the Policy Date and each Policy Anniversary thereafter.
Beneficiary – The person(s) named by the Owner to receive the Death Benefit Proceeds upon the death of the Insured.
Business Day – Any day that we are open for business. We are open for business every day that the NYSE is open for trading.
Cash Surrender Value – is equal to:
(a) Account Value on the effective date of the surrender; less
(b) outstanding Policy loans and accrued loan interest, if any; less
(c) any monthly cost of insurance charges.
Corporate Headquarters – Great-West Life & Annuity Insurance Company, 8515 East Orchard Road, Greenwood Village, Colorado 80111, or such other address as we may hereafter specify to you by written notice.
Death Benefit Proceeds – The amount determined in accordance with the terms of the Policy which is payable at the death of the Insured. This amount is the death benefit, decreased by the amount of any outstanding Policy Debt, and increased by the amounts payable under any supplemental benefits.
Divisions – Divisions into which the assets of the Series Account are divided, each of which corresponds to and contains shares of a Fund. Divisions may also be referred to as “investment divisions” or “sub-accounts” in the prospectus, SAI or Series Account financial statements.
Due Proof – Such evidence as we may reasonably require in order to establish that Death Benefit Proceeds are due and payable.
Effective Date – The date on which the first Premium payment is credited to the Policy.
Evidence of Insurability – Information about an Insured that is used to approve or reinstate this Policy or any additional benefit.
Fixed Account – A division of our General Account that provides a fixed interest rate. This account is not part of and does not depend on the investment performance of the Sub-Accounts. The Fixed Account is not an available option for Pre-2009 Policies.
Fund – An underlying mutual fund in which a Division invests. Each Fund is an investment company registered with the SEC or a separate investment series of a registered investment company.
General Account – All of our assets other than those held in a separate investment account.
Initial Premium – The initial Premium amount specified in a Policy.
Insured – The person whose life is insured under the Policy.
Issue Age – The Insured’s age as of the Insured’s birthday nearest the Policy Date.
Issue Date – The date on which we issue a Policy.
Loan Account – All outstanding loans plus credited loan interest held in the General Account of the Company. The Loan Account is not part of the Series Account.
Loan Account Value – The sum of all outstanding loans plus credited loan interest for this Policy.
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MEC – Modified Endowment Contract. For more information regarding MECs, see “Modified Endowment Contracts” above.
NYSE – New York Stock Exchange.
Owner – The person(s) named in the application who is entitled to exercise all rights and privileges under the Policy, while the Insured is living. The purchaser of the Policy will be the Owner unless otherwise indicated in the application.
Policy Anniversary – The same day in each succeeding year as the day of the year corresponding to the Policy Date.
Policy Date – The effective date of coverage under this Policy. The Policy Months, Policy Years and Policy Anniversaries are measured from the Policy Date.
Policy Debt – The principal amount of any outstanding loan against the Policy plus accrued but unpaid interest on such loan.
Policy Month – The one-month period commencing on the same day of the month as the Policy Date.
Policy Year – The one-year period commencing on the Policy Date or any Policy Anniversary and ending on the next Policy Anniversary.
Pre-2009 Policy – A Policy issued before January 1, 2009. Owners of a Pre-2009 Policy may continue to make additional premium payments. For information about how the Pre-2009 Policy differs from the Policy that we offer until April 30, 2011, please see Appendix B.
Premiums – Amounts received and allocated to the Sub-Account(s) prior to any deductions.
Request – Any instruction in a form, written, telephoned or computerized, satisfactory to the Company and received in good order at the Corporate Headquarters from the Owner or the Owner’s assignee (as specified in a form acceptable to the Company) or the Beneficiary, (as applicable) as required by any provision of this Policy or as required by the Company. The Request is subject to any action taken or payment made by the Company before it was processed.
SEC – The United States Securities and Exchange Commission.
Series Account – The segregated investment account established by the Company as a separate account under Colorado law named the COLI VUL-2 Series Account. It is registered as a unit investment trust under the 1940 Act.
Sub-Account – Sub-division(s) of the Owner’s Account Value containing the value credited to the Owner from the Series Account. Sub-Accounts may also be referred to as “investment divisions” or “Divisions” in the prospectus, SAI or Series Account financial statements.
Surrender Benefit – Account Value less any outstanding Policy loans and less accrued loan interest.
Total Face Amount – The amount of life insurance coverage you request as specified in your Policy.
Transaction Date – The date on which any Premium payment or Request from the Owner will be processed by the Company. Premium payments and Requests received after 4:00 p.m. EST/EDT will be deemed to have been received on the next Business Day. Requests will be processed and the Sub-Account value will be valued on the day that the Premium payments or Request is received and the NYSE is open for trading.
Transfer – The moving of money from one or more Division(s) or the Fixed Account to one or more Division(s) or the Fixed Account.
Unit – An accounting unit of measurement that we use to calculate the value of each Division.
Unit Value – The value of each Unit in a Division.
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Valuation Date – The date on which the net asset value of each Fund is determined. A Valuation Date is each day that the NYSE is open for regular business. The value of a Division’s assets is determined at the end of each Valuation Date (generally 4:00 p.m. EST/EDT). To determine the value of an asset on a day that is not a Valuation Date, the value of that asset as of the end of the previous Valuation Date will be used.
Valuation Period – The period of time from one determination of Unit Values to the next following determination of Unit Values. We will determine Unit Value for each Valuation Date as of the close of the NYSE (generally 4:00 p.m. EST/EDT) on that Valuation Date.
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Appendix B
Information About How a Pre-2009 Policy and Optional Term Insurance Rider (Issued Prior to January 1, 2009) Differs from the Policy and Optional Rider that We Issued until April 30, 2011
Prior to January 1, 2009, we issued and earlier version of this Policy (the “Pre-2009 Policy”). The Pre-2009 Policy is no longer offered for sale. However, many Pre-2009 Policies remain outstanding and most of the information in the prospectus is applicable. However, this Appendix B explains the differences between the Pre-2009 Policy from the description in the rest of the prospectus, which describes Policies we issued until April 30, 2011. If you own a Pre-2009 (issued prior to January 1, 2009), you should read this Appendix B for information as to your Pre-2009 Policy differs from the Policy described in the rest of the prospectus.
1. Different Cost of Insurance Charge Amounts
Certain information as to how we calculate the cost of insurance changes for the Policy we issued until April 30, 2011 is set forth under “Monthly Risk Rates” in this prospectus. That discussion applies to the Pre-2009 policy with one exception. References to the 2001 Commissioner’s Standard Ordinary, Age Nearest Birthday, Male/Female, Smoker/Non-Smoker Ultimate Mortality Table do not apply to the Pre-2009 Policy. Instead, these statements would refer to the 1980 Commissioner’s Standard Ordinary, Age Nearest Birthday, Male/Female, Smoker/Non-Smoker Ultimate Mortality Table.
The cost of insurance charges under the Pre-2009 Policy differ from those charged under the Policy issued on or after January 1, 2009 as provided in the tables below. Specifically, under the Pre-2009 Policy the minimum cost of insurance charge is $.08 per $1000 and under a Policy issued on or after January 1, 2009, the minimum cost of insurance charge is $.02 per $1000.
2. Fee Tables
The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering the Pre-2009 Policy. The first table describes the fees and expenses that you will pay at the time that you buy the Pre-2009 Policy, surrender the Pre-2009 Policy, or Transfer cash value between investment options.
Transaction Fees
Charge When Charge is Deducted Amount Deducted
Cost of Insurance (per $1000 Net Amount at Risk)1    
Minimum & Maximum Cost of Insurance Charge Monthly Guaranteed:
Minimum: $0.08 per $1000
Maximum: $83.33 per $1000
Cost of Insurance Charge for a 46- year old Male Non-Smoker, $550,000 Face Amount, Option 1 (Level Death) Monthly Guaranteed:
 
$0.41 per $1000
Mortality and Expense Risk Charge2 Monthly Guaranteed: 0.90% annually
 
Current: 0.40% for Policy
Years 1-5, 0.25% for Policy
Years 6-20, and 0.10%
thereafter
Service Charge Monthly Maximum: $15/month
Current: $10.00/month
Policy Years 1-3 and
$7.50/month,
Policy Years 4+
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Supplemental Benefit Charges
Currently, we are offering the following supplemental optional riders. The charges for the rider you select are deducted monthly from your Account Value as part of the Monthly Deduction described in “Charges and Deductions” below. The benefits provided under each rider are summarized in “Other Provisions and Benefits” below.
Change of Insured Rider* Upon change of Insured Minimum: $100 per change
Maximum: $400 per change
Change of Insured Rider for a 46-year old Male Non-Smoker, $550,000 Face Amount, Option 1 (Level Death)*   $400 per change
Term Life Insurance Rider Monthly Guaranteed:
Minimum COI: $0.08 per $1000
Maximum COI: $83.33 per $1000
Term Life Insurance Rider for a 46-year old Male Non-Smoker, $550,000 Face Amount, Option 1 (Level Death) Monthly Guaranteed:
$0.41 per $1000
* Not available to individual Owners.
3. Paid-Up Life Insurance
For the Pre-2009 Policy, if the Insured reached Attained Age 100 and the Policy is in force, the Account Value, less Policy Debt, will be applied as a single Premium to purchase “paid-up” insurance. This is different from the age disclosed in this prospectus.
4. Term Life Insurance Rider
For the Pre-2009 Policy, the rider is renewable annually until the Insured’s Attained Age 100. This is different from the age disclosed in the “Term Life Insurance Rider” section of this prospectus for the Policy that we issued until April 30, 2011. In addition, the cost of insurance charges under the Pre-2009 Policy Term Life Insurance Rider differ from those charged under the Term Life Insurance Rider issued on or after January 1, 2009 as provided in the table above. Specifically, under the Pre-2009 Policy Term Life Insurance Rider, the minimum cost of insurance charge is $.08 per $1000 and under a Term Life Insurance Rider issued on or after January 1, 2009, the minimum cost of insurance charge is $.02 per $1000.
5. Fixed Account
For the Pre-2009 Policy, the Fixed Account is not an available investment option.
6. Definition of Account Value
Because the Fixed Account is not an option for Pre-2009 Policies, the term of Account Value is defined as “the sum of the value of your interests in the Divisions and the Loan Account. This amount reflects: (1) the Premiums you pay; (2) the investment performance of the Divisions you select; (3) any Policy loans or partial withdrawals; (4) your Loan Account balance; and (5) the charges we deduct under the Policy.”
B-2

 

The SAI is a document that includes additional information about the Series Account, including the financial statements of both Great-West and of each of the Divisions of the Series Account. The SAI is incorporated by reference as a matter of law into the prospectus, which means that it is legally part of the prospectus. The SAI is available upon request, without charge. To request the SAI or other information about the Policy, or to make any inquiries about the Policy, contact Great-West toll-free at 888-353-2654 or via email at www.greatwest.com/executivebenefits. Reports and other information about the Series Account are available on the SEC’s website at www.sec.gov.
Investment Company Act File No. 811-09201
B-3

Table of Contents
COLI VUL-2 SERIES ACCOUNT
Flexible Premium Variable
Universal Life Insurance Policies
Issued by:
Great-West Life & Annuity Insurance Company
8515 East Orchard Road
Greenwood Village, Colorado 80111
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information is not a prospectus. It contains information in addition to the information in the prospectus for the Policy. The prospectus for the Policy, which we may amend from time to time, contains the basic information you should know before purchasing a Policy. This Statement of Additional Information should be read in conjunction with the prospectus, dated May 1, 2019, which is available without charge by contacting Great-West Life & Annuity Insurance Company at (888) 353-2654 or via e-mail at www.greatwest.com/executivebenefits.
May 1, 2019
i

 

 

General Information and History of Great-West and the Series Account
Great-West Life & Annuity Insurance Company (“Great-West,” the “Company,” “we” or “us”) is a stock life insurance company that was originally organized under the laws of the state of Kansas as the National Interment Association. Our name was changed to Ranger National Life Insurance Company in 1963 and to Insuramerica Corporation in 1980 prior to changing to our current name in February 1982. In September 1990, we redomesticated under the laws of Colorado.
We are authorized to do business in forty-nine states, the District of Columbia, Puerto Rico, U.S. Virgin Islands and Guam. We issue individual and group life insurance policies and annuity contracts and accident and health insurance policies.
Great-West is a wholly owned subsidiary of GWL&A Financial, Inc., a Delaware holding company. GWL&A Financial, Inc. is an indirect wholly-owned subsidiary of Great-West Lifeco Inc., a Canadian holding company. Great-West Lifeco Inc. is a subsidiary of Power Financial Corporation, a Canadian holding company with substantial interests in the financial services industry. Power Financial Corporation is a subsidiary of Power Corporation of Canada, a Canadian holding and management company. Through a group of private holding companies, The Desmarais Family Residuary Trust, which was created on October 8, 2013 under the Last Will and Testament of Paul G. Desmarais, has voting control of Power Corporation of Canada.
On January 24, 2019, Great-West announced that it had entered into an agreement with Protective Life Insurance Company (“Protective”) to sell, via indemnity reinsurance, substantially all of its non-participating individual life insurance and annuity business and group life and health business, including this Policy. Subject to the provision of certain services by Great-West or its affiliates for a transitional period following the closing, Protective will agree to provide administration for the Policy in accordance with their terms and conditions. The transaction is expected to close in the first half of 2019, subject to regulatory approvals and customary closing conditions.
We established the COLI VUL-2 Series Account of Great-West Life & Annuity Insurance Company (the “Series Account”) in accordance with Colorado law on November 25, 1997. The Series Account is registered with the SEC as a unit investment trust under the Investment Company Act of 1940.
State Regulation
We are subject to the laws of Colorado governing life insurance companies and to regulation by Colorado’s Commissioner of Insurance, whose agents periodically conduct an examination of our financial condition and business operations. We are also subject to the insurance laws and regulations of all the jurisdictions in which we are authorized to do business.
We are required to file an annual statement with the insurance regulatory authority of those jurisdictions where we are authorized to do business relating to our business operations and financial condition as of December 31st of the preceding year.
Independent Registered Public Accounting Firm
Deloitte & Touche LLP, 1601 Wewatta Street, Suite 400, Denver, Colorado 80202, serves as the Company’s and the Series Account’s independent registered public accounting firm.
The financial statements and financial highlights of each of the investment divisions of the COLI VUL-2 Series Account of Great-West Life & Annuity Insurance Company included in this Statement of Additional Information have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing in the Registration Statement. The statutory financial statements of Great-West Life & Annuity Insurance Company included in this Statement of Additional Information included in the Registration Statement have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing in the Registration Statement. Such statutory financial statements have so been included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.
Underwriters
The offering of the Policy is made on a continuous basis by GWFS Equities, Inc. (“GWFS Equities”), an indirect wholly owned subsidiary of Great-West, whose principal business address is 8515 East Orchard Road, Greenwood Village, Colorado 80111. GWFS Equities is registered with the SEC under the Securities Exchange Act of 1934 (“Exchange Act”) as a broker-dealer and is a member of the Financial Industry Regulatory Authority (“FINRA”).
GWFS Equities has received no underwriting commissions in connection with this offeringin each of the last three fiscal years.
Licensed insurance agents will sell the Policy in those states where the Policy may be lawfully sold. Such agents will be registered representatives of broker-dealers registered under the Exchange Act, which are members of FINRA and which have entered into selling agreements with GWFS Equities. GWFS Equities also acts as the general distributor of certain annuity
1

 

contracts issued by us. The maximum sales commission payable to our agents, independent registered insurance agents and other registered broker-dealers is 25% of Premium. In addition, asset-based trail commissions may be paid. A sales representative may be required to return all or a portion of the commissions paid if: (i) a Policy terminates prior to the second Policy Anniversary; or (ii) a Policy is surrendered for the Surrender Benefit within the first six Policy Years and applicable state insurance law permits a return of expense charge.
Underwriting Procedures
We will issue on a fully underwritten basis applicants up to 300% of our standard current mortality assumptions. We will issue on a simplified basis based on case characteristics, such as required Policy size, average age of group and the industry of the group using our standard mortality assumptions. We will issue on a guaranteed basis for larger groups based on case characteristics such as the size of the group, Policy size, average age of group, industry, and group location.
Illustrations
Upon Request, we will provide you an illustration of Cash Surrender Value, Account Value and death benefits. The first illustration you Request during a Policy Year will be provided to you free of charge. Thereafter, each additional illustration Requested during the same Policy Year will be provided to you for a nominal fee not to exceed $50.
Financial Statements
The financial statements of Great-West as contained herein should be considered only as bearing upon Great-West’s ability to meet its obligations under the Policies, and they should not be considered as bearing on the investment performance of the Series Account. The variable interest of Owners under the Policies are affected solely by the investment results of the Series Account. The financial statements of the Series Account are also included herein.
2

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AUDITED FINANCIAL REPORT

 

 

LOGO

 

Great-West Life & Annuity Insurance Company

 

 

(A wholly-owned subsidiary of GWL&A Financial Inc.)

Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus as of December 31, 2018 and 2017 and

Related Statutory Statements of Operations,

Changes in Capital and Surplus and Cash Flows for Each of the Three Years in the Period Ended December 31, 2018 and Report of Independent Registered Public Accounting Firm

Table of Contents

Index to Financial Statements, Notes, and Schedules

 

     Page
  Number  

Independent Auditors’ Report

   3

Statutory Financial Statements at December 31, 2018, and 2017 and for the Years Ended December 31, 2018, 2017, and 2016

   

Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus

    5

Statutory Statements of Operations

    7

Statutory Statements of Changes in Capital and Surplus

   8

Statutory Statements of Cash Flows

    9

Notes to the Statutory Financial Statements

    11

Note 1 - Organization and Significant Accounting Policies

   11

Note 2 - Accounting Changes

    20

Note 3 - Related Party Transactions

    21

Note 4 - Summary of Invested Assets

    23

Note 5 - Fair Value Measurements

    32

Note 6 - Non-Admitted Assets

    36

Note 7 - Premiums Deferred and Uncollected

    36

Note 8 - Business Combination and Goodwill

    36

Note 9 - Reinsurance

    37

Note 10 - Aggregate Reserves

    37

Note 11 - Liability for Unpaid Claims and Claim Adjustment Expenses

    39

Note 12 - Commercial Paper

    40

Note 13 - Separate Accounts

    40

Note 14 - Capital and Surplus, Dividend Restrictions, and Other Matters

    43

Note 15 - Federal Income Taxes

    44

Note 16 - Employee Benefit Plans

    50

Note 17 - Share-based Compensation

    54

Note 18 - Participating Insurance

    58

Note 19 - Concentrations

    58

Note 20 - Commitments and Contingencies

    58

Note 21 - Subsequent Events

    59

 

2

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LOGO   

Deloitte & Touche LLP

1601 Wewatta Street

Suite 400

Denver, CO 80202-3942

USA

 

Tel: 1 303 292 5400

Fax: 1 303 312 4000

www.deloitte.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of

Great-West Life & Annuity Insurance Company

Greenwood Village, Colorado

Opinion on the Statutory Financial Statements

We have audited the accompanying statutory statements of admitted assets, liabilities, and capital and surplus of Great-West Life & Annuity Insurance Company (the "Company") (a wholly-owned subsidiary of GWL&A Financial Inc.), as of December 31, 2018 and 2017, the related statutory statements of operations, changes in capital and surplus, and cash flows for the years then ended, and the related notes (collectively referred to as the "statutory financial statements"). In our opinion, because of the effects of the matters discussed in the following paragraph, the statutory financial statements do not present fairly, in conformity with accounting principles generally accepted in the United States of America, the financial position of the Company as of December 31, 2018 and 2017, or the results of its operations or its cash flows for the years then ended.

As described in Note 1 to the statutory financial statements, the statutory financial statements are prepared by the Company using the accounting practices prescribed or permitted by the Colorado Division of Insurance, which is a basis of accounting other than accounting principles generally accepted in the United States of America, to meet the requirements of the Colorado Division of Insurance. The effects on the statutory financial statements of the variances between the statutory-basis of accounting described in Note 1 to the statutory financial statements and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.

In our opinion, the statutory financial statements present fairly, in all material respects, the admitted assets, liabilities, and capital and surplus of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for the years then ended in conformity with accounting practices prescribed or permitted by the Colorado Division of Insurance, as described in Note 1 to the statutory financial statements.

Basis for Opinion

These statutory financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's statutory financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statutory financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing

 

3

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an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the statutory financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the statutory financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the statutory financial statements. We believe that our audits provide a reasonable basis for our opinion.

Emphasis of Matter

As discussed in Note 1 to the statutory financial statements, the accompanying statutory financial statements have been prepared from separate records maintained by the Company and may not necessarily be indicative of conditions that would have existed or the results of operations if the Company had been operated as an unaffiliated company, as portions of certain expenses represent allocations made from affiliates.

 

LOGO

Denver, Colorado

March 19, 2019

We have served as the Company’s auditor since 1981

 

4

Table of Contents

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus

December 31, 2018 and 2017

(In Thousands, Except Share Amounts)

 

     December 31,
               2018                        2017          

Admitted assets:

      

Cash and invested assets:

      

Bonds

    $ 20,654,118      $ 19,944,862  

Common stock

      131,883        107,977  

Mortgage loans (net of allowances of $746 and $746)

      4,206,865        3,871,338  

Real estate occupied by the company

      37,555        36,302  

Real estate held for the production of income

      1,407        1,466  

Contract loans

      4,122,637        4,078,669  

Cash, cash equivalents and short-term investments

      229,003        242,084  

Securities lending collateral assets

      45,102        —  

Other invested assets

      606,787        566,187  
  

 

 

 

   

 

 

 

Total cash and invested assets

      30,035,357        28,848,885  
  

 

 

 

   

 

 

 

Investment income due and accrued

      284,303        279,822  

Premiums deferred and uncollected

      25,795        15,919  

Reinsurance recoverable

      8,090        7,090  

Current federal income taxes recoverable

      71,875        16,535  

Deferred income taxes

      150,497        149,315  

Due from parent, subsidiaries and affiliates

      50,107        67,355  

Cash value of company owned life insurance

      272,606        264,798  

Other assets

      231,965        163,388  

Assets from separate accounts

      24,654,916        28,197,122  
  

 

 

 

   

 

 

 

Total admitted assets

    $ 55,785,511      $ 58,010,229  
  

 

 

 

   

 

 

 

 

See notes to statutory financial statements.    Continued

 

5

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus

December 31, 2018 and 2017

(In Thousands, Except Share Amounts)

 

     December 31,
               2018                        2017          

Liabilities, capital and surplus:

      

Liabilities:

      

Aggregate reserves for life policies and contracts

    $ 27,501,121      $ 26,587,834  

Aggregate reserves for accident and health policies

      276,762        272,539  

Liability for deposit-type contracts

      189,895        206,134  

Life and accident and health policy and contract claims

      123,705        120,537  

Provision for policyholders’ dividends

      31,184        38,872  

Liability for premiums received in advance

      13,926        12,768  

Liability for contract deposit funds

      150,981        174,296  

Unearned investment income

      622        4,483  

Asset valuation reserve

      204,393        203,546  

Interest maintenance reserve

      50,674        82,238  

Due to parent, subsidiaries and affiliates

      41,735        52,081  

Commercial paper

      98,859        99,886  

Payable under securities lending agreements

      45,102        —  

Repurchase agreements

      664,650        —  

Other liabilities

      410,076        828,393  

Liabilities from separate accounts

      24,654,907        28,197,113  
  

 

 

 

   

 

 

 

Total liabilities

      54,458,592        56,880,720  
  

 

 

 

   

 

 

 

Commitments and contingencies (see Note 20)

      

Capital and surplus:

      

Preferred stock, $1 par value, 50,000,000 shares authorized; none  issued and outstanding

     —        —  

Common stock, $1 par value; 50,000,000 shares authorized; 7,320,176  shares issued and outstanding

      7,320        7,320  

Surplus notes

      591,699        539,930  

Gross paid in and contributed surplus

      710,271        706,178  

Unassigned funds

      17,629        (123,919 ) 
  

 

 

 

   

 

 

 

Total capital and surplus

      1,326,919        1,129,509  
  

 

 

 

   

 

 

 

Total liabilities, capital and surplus

    $ 55,785,511      $ 58,010,229  
  

 

 

 

   

 

 

 

 

See notes to statutory financial statements.    Concluded

 

6

Table of Contents

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Statutory Statements of Operations

Years Ended December 31, 2018, 2017 and 2016

(In Thousands)

 

     Year Ended December 31,  
               2018                         2017                       2016          
  

 

 

    

 

 

 

Income:

       

Premium income and annuity consideration

    $ 7,592,609     $ 5,270,518     $ (397,783 ) 

Net investment income

      1,307,387       1,266,963       1,235,841  

Amortization of interest maintenance reserve

      24,863       22,045       23,253  

Commission and expense allowances on reinsurance ceded

      5,211       31,582       5,785  

Fee income from separate accounts

      160,573       160,280       151,744  

Reserve adjustment on reinsurance ceded

      (1,975,763 )      (490,424 )      5,627,638  

Miscellaneous income

      250,272       220,204       154,696  
  

 

 

    

 

 

 

Total income

      7,365,152       6,481,168       6,801,174  
  

 

 

    

 

 

 

Expenses:

       

Death benefits

      380,057       276,519       341,292  

Annuity benefits

      228,530       203,679       202,093  

Disability benefits and benefits under accident and health policies

      41,719       44,208       41,580  

Surrender benefits

      5,895,938       4,992,338       4,330,313  

Increase in aggregate reserves for life and accident and health policies and contracts

      917,510       915,763       1,139,669  

Other benefits

      10,528       12,032       11,991  
  

 

 

    

 

 

 

Total benefits

      7,474,282       6,444,539       6,066,938  
  

 

 

    

 

 

 

Commissions

      196,489       199,814       181,567  

Other insurance expenses

      488,250       522,610       544,488  

Net transfers from separate accounts

      (1,112,465 )      (944,644 )      (101,482 ) 
  

 

 

    

 

 

 

Total benefit and expenses

      7,046,556       6,222,319       6,691,511  
  

 

 

    

 

 

 

Net gain from operations before dividends to policyholders, federal income taxes and realized capital gains (losses)

      318,596       258,849       109,663  

Dividends to policyholders

      31,276       38,782       45,842  
  

 

 

    

 

 

 

Net gain from operations after dividends to policyholders and before federal income taxes and net realized capital gains (losses)

      287,320       220,067       63,821  

Federal income tax (benefit) expense

      (17,604 )      50,584       (37,932 ) 
  

 

 

    

 

 

 

Net gain from operations before net realized capital gains (losses)

      304,924       169,483       101,753  

Net realized capital gains (losses) less capital gains tax and transfers to interest maintenance reserve

      10,576       535       (1,096 ) 
  

 

 

    

 

 

 

Statutory net income

    $ 315,500     $ 170,018     $ 100,657  
  

 

 

    

 

 

 

See notes to statutory financial statements.

 

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Table of Contents

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Statutory Statements of Changes in Capital and Surplus

Years Ended December 31, 2018, 2017 and 2016

(In Thousands)

 

     Year Ended December 31,
               2018                       2017                       2016        

 

Capital and surplus, beginning of year

    $ 1,129,509     $ 1,053,333     $ 1,114,764  
  

 

 

 

  

 

 

 

  

 

 

 

Statutory net income

      315,500       170,018       100,657  

Dividends to stockholder

      (152,295 )      (145,301 )      (125,691 ) 

Change in net unrealized capital (losses) gains, net of income taxes

      (11,491 )      (17,021 )      (32,223 ) 

Change in minimum pension liability, net of income taxes

      3,824       2,459       (1,863 ) 

Change in asset valuation reserve

      (846 )      (18,503 )      6,171  

Change in non-admitted assets

      28,921       96,814       (47,306 ) 

Change in net deferred income taxes

      (40,732 )      (110,528 )      16,605  

Change in liability for reinsurance in unauthorized companies

      —       2       —  

Capital paid-in

      —       27       60  

Surplus paid-in

      4,093       86,480       22,359  

Change in capital and surplus as a result of separate accounts

      (208 )      (211 )      (150 ) 

Change in unrealized foreign exchange capital (losses) gains

      (1,125 )      (88 )      (78 ) 

Change in surplus note

      51,769       12,028       28  
  

 

 

 

  

 

 

 

  

 

 

 

Net change in capital and surplus for the year

      197,410       76,176       (61,431 ) 
  

 

 

 

  

 

 

 

  

 

 

 

Capital and surplus, end of year

    $ 1,326,919     $ 1,129,509     $ 1,053,333  
  

 

 

 

  

 

 

 

  

 

 

 

See notes to statutory financial statements.

 

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Table of Contents

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Statutory Statements of Cash Flows

Years Ended December 31, 2018, 2017 and 2016

(In Thousands)

 

     Year Ended December 31,
     2018    2017   2016
  

 

 

 

   

 

 

 

Operating activities:

        

Premium income, net of reinsurance

    $ 5,352,630      $ 5,208,527     $ 5,910,875  

Investment income received, net of investment expenses paid

      1,136,338        1,111,282       1,080,450  

Other miscellaneous expense received (paid)

      160,008        (77,825 )      (23,874 ) 

Benefit and loss related payments, net of reinsurance

      (6,417,233 )       (5,393,966 )      (4,671,246 ) 

Net transfers to separate accounts

      1,097,423        909,388       99,783  

Commissions, other expenses and taxes paid

      (644,838 )       (669,995 )      (687,938 ) 

Dividends paid to policyholders

      (38,959 )       (46,583 )      (51,521 ) 

Federal income taxes (paid) received, net

      (38,241 )       (15,138 )      15,711  
  

 

 

 

   

 

 

 

Net cash provided by operating activities

      607,128        1,025,690       1,672,240  
  

 

 

 

   

 

 

 

Investing activities:

        

Proceeds from investments sold, matured or repaid:

        

Bonds

      3,351,579        5,719,282       7,202,702  

Stocks

      3,704        14,597       1,539  

Mortgage loans

      357,545        399,982       365,790  

Real estate

      —        —       1,457  

Other invested assets

      25,233        14,614       9,883  

Net gains on cash, cash equivalents and short-term investments

      —        (1 )      13  

Miscellaneous proceeds

      22,212        —       40,414  

Cost of investments acquired:

        

Bonds

      (3,398,701 )       (6,023,940 )      (8,434,227 ) 

Stocks

      (38,742 )       (99 )      (19 ) 

Mortgage loans

      (697,245 )       (844,304 )      (688,991 ) 

Real estate

      (4,319 )       (2,980 )      (2,006 ) 

Other invested assets

      (36,870 )       (31,194 )      (3,985 ) 

Miscellaneous applications

      (39,654 )       (67,286 )      (4,708 ) 

Net change in contract loans and premium notes

      (1,355 )       (12,161 )      6,809  
  

 

 

 

   

 

 

 

Net cash used in investing activities

      (456,613 )       (833,490 )      (1,505,329 ) 
  

 

 

 

   

 

 

 

Financing and miscellaneous activities:

        

Surplus notes

      51,410        12,000       —  

Capital and paid in surplus

      3,325        84,944       20,306  

Deposit-type contract withdrawals, net of deposits

      (18,908 )       (21,673 )      (22,342 ) 

Dividends to stockholder

      (152,295 )       (145,301 )      (125,691 ) 

Funds (repaid) borrowed, net

      (1,027 )       2,348       4,167  

Change in due to/from parent, subsidiaries and affiliates

      6,013        1,485       5,987  

Employee taxes paid for withheld shares

      (78 )       (818 )      (517 ) 

Other

      (51,605 )       (70,011 )      (38,528 ) 
  

 

 

 

   

 

 

 

Net cash used in financing and miscellaneous activities

      (163,165 )       (137,026 )      (156,618 ) 
  

 

 

 

   

 

 

 

Net (decrease) increase in cash, cash equivalents and short-term investments and restricted cash

      (12,650 )       55,174       10,293  

Cash, cash equivalents and short-term investments and restricted cash:

        

Beginning of year

      242,084        186,910       176,617  
  

 

 

 

   

 

 

 

End of year

    $ 229,434      $ 242,084     $ 186,910  
  

 

 

 

   

 

 

 

The cash, cash equivalents and short-term investments and restricted cash balance at December 31, 2018 includes $431 of restricted cash which is non-admitted and not included in the Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus.

 

See notes to statutory financial statements.    Continued

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Statutory Statements of Cash Flows

Years Ended December 31, 2018, 2017 and 2016

(In Thousands)

 

     Year Ended December 31,
               2018                        2017                        2016          
  

 

 

 

   

 

 

 

Non-cash investing and financing transactions during the year:

         

Share-based compensation expense

    $ 768      $ 1,563      $ (2,113 ) 

Assets received from limited partnership investment distributions

      —        —        (10 ) 

Fair value of assets acquired in settlement of bonds

      28,815        9,659        —  

 

See notes to statutory financial statements.    Concluded

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

1. Organization and Significant Accounting Policies

Great-West Life & Annuity Insurance Company (the “Company” or “GWL&A”) is a direct wholly-owned subsidiary of GWL&A Financial Inc. (“GWL&A Financial”), a holding company. GWL&A Financial is a direct wholly-owned subsidiary of Great-West Lifeco U.S. LLC (“Lifeco U.S.”) and an indirect wholly-owned subsidiary of Great-West Lifeco Inc. (“Lifeco”), a Canadian holding company. The Company offers a wide range of life insurance, retirement and investment products to individuals, businesses and other private and public organizations throughout the United States. The Company is an insurance company domiciled in the State of Colorado, and is subject to regulation by the Colorado Division of Insurance (“Division”).

The Company is authorized to engage in the sale of life insurance, accident and health insurance and annuities. It is qualified to do business in all states in the United States, except New York, and in the District of Columbia, Puerto Rico, Guam and the U.S. Virgin Islands. The Company is also a licensed reinsurer in New York.

The statutory financial statements have been prepared from the separate records maintained by the Company and may not necessarily be indicative of the conditions that would have existed or the results of operations if the Company had been operated as an unaffiliated company.

Accounting policies and use of estimates

The Company prepares its statutory financial statements in conformity with accounting practices prescribed or permitted by the Division. The Division requires that insurance companies domiciled in the State of Colorado prepare their statutory financial statements in accordance with the National Association of Insurance Commissioners Accounting Practices and Procedures Manual (“NAIC SAP”), subject to any deviations prescribed or permitted by the State of Colorado Insurance Commissioner.

The only prescribed deviation that impacts the Company allows the Company to account for certain separate account products at book value instead of fair value. The Division has not permitted the Company to adopt any accounting practices that have an impact on the Company’s statutory financial statements as compared to NAIC SAP or the Division’s prescribed accounting practices. There is no impact to either capital and surplus or net income as a result of the prescribed accounting practice.

Statutory accounting principles vary in some respects from accounting principles generally accepted in the United States of America (“GAAP”). The more significant of these differences are as follows:

 

•  

Bonds, including loan-backed and structured securities (collectively referred to as “bonds”), are carried at statutory adjusted carrying value in accordance with the National Association of Insurance Commissioners (“NAIC”) designation of the security. Carrying value is amortized cost, unless the bond is either (a) designated as a six, in which case it is the lower of amortized cost or fair value or (b) required to be carried at fair value due to the structured securities ratings methodology. Under GAAP, bonds are carried at amortized cost for securities classified as held-to-maturity and fair value for securities classified as available-for-sale and held-for-trading.

 

•  

Short-term investments include all investments whose remaining maturities, at the time of acquisition, are three months to one year. Under GAAP, short-term investments include securities purchased with investment intent and with initial remaining maturities of one year or less.

 

•  

As prescribed by the NAIC, the asset valuation reserve (“AVR”) is computed in accordance with a prescribed formula and represents a provision for possible non-interest related fluctuations in the value of bonds equity securities, mortgage loans, real estate and other invested assets. Changes to the AVR are charged or credited directly to unassigned surplus. This type of reserve is not necessary or required under GAAP.

 

•  

As prescribed by the NAIC, the interest maintenance reserve (“IMR”) consists of net accumulated unamortized realized capital gains and losses, net of income taxes, on sales or interest related impairments of bonds and derivative investments attributable to changes in the general level of interest rates. Such gains or losses are initially deferred and then amortized into income over the remaining period to maturity, based on groupings of individual securities sold in five-year bands. An IMR asset is designated as a non-admitted asset and is recorded as a reduction to capital and surplus. Under GAAP, realized gains and losses are recognized in income in the period in which a security is sold.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

•  

As prescribed by the NAIC, an other-than-temporary impairment (“OTTI”) is recorded (a) if it is probable that the Company will be unable to collect all amounts due according to the contractual terms in effect at the date of acquisition, (b) if the Company has the intent to sell the investment or (c) for non-interest related declines in value and where the Company does not have the intent and ability at the reporting date, to hold the bond until its recovery. Under GAAP, if either (a) management has the intent to sell a bond investment or (b) it is more likely than not the Company will be required to sell a bond investment before its anticipated recovery, a charge is recorded in net realized investment losses equal to the difference between the fair value and cost or amortized cost basis of the security. If management does not intend to sell the security and it is not more likely than not the Company will be required to sell the bond investment before recovery of its amortized cost basis, but the present value of the cash flows expected to be collected (discounted at the effective interest rate implicit in the bond investment prior to impairment) is less than the amortized cost basis of the bond investment (referred to as the credit loss portion), an OTTI is considered to have occurred.

Under GAAP, total OTTI is bifurcated into two components: the amount related to the credit loss, which is recognized in current period earnings through realized capital losses; and the amount attributed to other factors (referred to as the non-credit portion), which is recognized as a separate component in accumulated other comprehensive income (loss). As prescribed by the NAIC, non-interest related OTTI is only bifurcated on loan-backed and structured securities. Factors related to interest and other components do not have a financial statement impact and are disclosed in “Unrealized losses and OTTI” in the notes to the statutory financial statements.

 

•  

Derivatives that qualify for hedge accounting are carried at the same valuation method as the underlying hedged asset, while derivatives that do not qualify for hedge accounting are carried at fair value. Under GAAP, all derivatives, regardless of hedge accounting treatment, are recorded on the balance sheet in other assets or other liabilities at fair value. As prescribed by the NAIC, for those derivatives which qualify for hedge accounting, the change in the carrying value or cash flow of the derivative is recorded consistently with how the changes in the carrying value or cash flow of the hedged asset, liability, firm commitment or forecasted transaction are recorded. Under GAAP, if the derivative is designated as a cash flow hedge, the effective portions of the changes in the fair value of the derivative are recorded in accumulated other comprehensive income and are recognized in the income statements when the hedged item affects earnings. Changes in fair value resulting from foreign currency translations are recorded in either AOCI or net investment income, consistent with where they are recorded on the underlying hedged asset or liability. Changes in the fair value, including changes resulting from foreign currency translations, of derivatives not eligible for hedge accounting or where hedge accounting is not elected and the over effective portion of cash flow hedges are recognized in investment gains (losses) as a component of net income in the period of the change. Realized foreign currency transactional gains and losses on derivatives subject to hedge accounting are recorded in net investment income, whereas those on derivatives not subject to hedge accounting are recorded in investment gains (losses). As prescribed by the NAIC, upon termination of a derivative that qualifies for hedge accounting, the gain or loss is recognized in income in a manner that is consistent with the hedged item. Alternatively, if the item being hedged is subject to IMR, the gain or loss on the hedging derivative is realized and is subject to IMR upon termination. Under GAAP, gains or losses on terminated contracts that are effective hedges are recorded in earnings in net investment income or other comprehensive income. The gains or losses on terminated contracts where hedge accounting is not elected, or contracts that are not eligible for hedge accounting, are recorded in investment gains (losses).

 

•  

The Company enters into dollar repurchase agreements with third party broker-dealers. The Company does not enter into these types of transactions for liquidity purposes, but rather for yield enhancement on its investment portfolio. The dollar repurchase trading strategy involves the sale of securities, with a simultaneous agreement to repurchase similar securities at a future date at an agreed-upon price. Assets to be repurchased are the same, or substantially the same, as the assets transferred, and are accounted for as secured borrowings. Under GAAP, these transactions are recorded as forward settling to be announced (“TBA”) securities that are accounted for as derivative instruments, but hedge accounting is not elected as the Company does not regularly accept delivery of such securities when issued.

 

•  

Acquisition costs, such as commissions and other costs incurred in connection with acquiring new business, are charged to operations as incurred, rather than deferred and amortized over the lives of the related contracts as under GAAP.

 

•  

Deferred income taxes are recorded using the asset and liability method in which deferred tax assets and liabilities are recorded for expected future tax consequences of events that have been recognized in either the Company’s statutory financial statements or tax returns. Deferred income tax assets are subject to limitations prescribed by statutory accounting

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

 

principles. The change in deferred income taxes is treated as a component of the change in unassigned funds, whereas under GAAP deferred taxes are included in the determination of net income.

 

•  

Certain assets, including various receivables, furniture and equipment and prepaid assets, are designated as non-admitted assets and are recorded as a reduction to capital and surplus, whereas they are recorded as assets under GAAP.

 

•  

The excess of the cost of acquiring an entity over the Company’s share of the book value of the acquired entity is recorded as goodwill which is admissible subject to limitations and is amortized over the period in which the Company benefits economically, not to exceed ten years. Under GAAP, the excess of the cost of acquiring an entity over the acquisition-date fair value of identifiable assets acquired and liabilities assumed is allocated between goodwill, indefinite-lived intangible assets and definite-lived intangible assets. Goodwill and indefinite-lived intangible assets are not amortized and definite-lived intangible assets are amortized over their estimated useful lives under GAAP.

 

•  

Aggregate reserves for life policies and contracts are based on statutory mortality and interest requirements and without consideration of withdrawals, which differ from reserves established under GAAP that are based on assumptions using Company experience for mortality, interest, and withdrawals.

 

•  

As prescribed by the NAIC, ceded reserves are limited to the amount of direct reserves. Ceded aggregate reserves and policy and contract claim liabilities are netted against aggregate reserves for life policies and contracts for statutory accounting purposes. Under GAAP, these items are reported as reinsurance recoverable.

 

•  

Surplus notes are reflected as a component of capital and surplus, whereas under GAAP they are reflected as a liability.

 

•  

The policyholder’s share of net income on participating policies that has not been distributed to participating policyholders is included in capital and surplus in the statutory financial statements. For GAAP, these amounts are reported as a liability with a charge to net income.

 

•  

Changes in separate account values from cash transactions are recorded as premium income and benefit expenses whereas they do not impact the statement of operations under GAAP and are presented only as increases or decreases to account balances.

 

•  

Benefit payments and the related decrease in policy reserves are recorded as expenses for all contracts subjecting the Company to any mortality risk. Under GAAP, such benefit payments for life and annuity contracts without significant mortality risks are recorded as direct reductions to the policy reserve liability.

 

•  

Premium receipts and the related increase in policy reserves are recorded as revenues and expenses, respectively, for all contracts subjecting the Company to any mortality risk. Under GAAP, such premium receipts for life and annuity contracts without significant mortality risks are recorded as direct credits to the policy reserve liability.

 

•  

Comprehensive income and its components are not presented in the statutory financial statements.

 

•  

The Statutory Statement of Cash Flows is presented based on a prescribed format for statutory reporting. For purposes of presenting statutory cash flows, cash includes short-term investments. Under GAAP, the statement of cash flows is typically presented based on the indirect method and cash excludes short-term investments.

The preparation of financial statements in conformity with statutory accounting principles requires the Company’s management to make a variety of estimates and assumptions. These estimates and assumptions affect, among other things, the reported amounts of admitted assets and liabilities, the disclosure of contingent liabilities and the reported amounts of revenues and expenses. Significant estimates are required to account for items and matters such as, but not limited to, the valuation of investments in the absence of quoted market values, impairment of investments, valuation of policy benefit liabilities and the valuation of deferred tax assets. Actual results could differ from those estimates.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

Significant statutory accounting policies

Investments

Investments are reported as follows:

 

•  

In accordance with the NAIC SAP, the adjusted carrying value amounts of certain assets are gross of non-admitted assets.

Bonds are carried at statutory adjusted carrying value in accordance with the NAIC designation of the security. Carrying value is amortized cost, unless the bond is either (a) designated as a six, in which case it is the lower of amortized cost or fair value or (b) required to be carried at fair value due to the structured securities ratings methodology. The Company recognizes the acquisition of its public bonds on a trade date basis and its private placement investments on a funding date basis. Bonds containing call provisions are amortized to the call or maturity value/date which produces the lowest asset value.

Premiums and discounts are recognized as a component of net investment income using the effective interest method. Realized gains and losses not subject to IMR, including those from foreign currency translations, are included in net realized capital gains (losses).

The recognition of income on certain investments (e.g. loan-backed securities, including mortgage-backed and asset-backed securities) is dependent upon market conditions, which may result in prepayments and changes in amounts to be earned. Prepayments on all mortgage-backed and asset-backed securities are monitored monthly, and amortization of the premium and/or the accretion of the discount associated with the purchase of such securities are adjusted by such prepayments. Prepayment assumptions are based on the average of recent historical prepayments and are obtained from broker/dealer survey values or internal estimates. These assumptions are consistent with the current interest rate and economic environment. Significant changes in estimated cash flows from the original purchase assumptions are accounted for using the retrospective method.

 

•  

Mortgage loans consist primarily of domestic commercial collateralized loans and are carried at their unpaid principal balances adjusted for any unamortized premiums or discounts, allowances for credit losses, and foreign currency translations. Interest income is accrued on the unpaid principal balance for all loans, except for loans on non-accrual status. Premiums and discounts are amortized to net investment income using the effective interest method. Prepayment penalty and origination fees are recognized in net investment income upon receipt.

The Company actively manages its mortgage loan portfolio by completing ongoing comprehensive analysis of factors such as debt service coverage ratios, loan-to-value ratios, payment status, default or legal status, annual collateral property evaluations and general market conditions. On a quarterly basis, the Company reviews the above primary credit quality indicators in its internal risk assessment of loan impairment and credit loss. Management’s risk assessment process is subjective and includes the categorization of all loans, based on the above mentioned credit quality indicators, into one of the following categories:

 

  •  

Performing - generally indicates the loan has standard market risk and is within its original underwriting guidelines.

  •  

Non-performing - generally indicates there is a potential for loss due to the deterioration of financial/monetary default indicators or potential foreclosure. Due to the potential for loss, these loans are evaluated for impairment.

The adequacy of the Company’s allowance for credit loss is reviewed quarterly. The determination of the calculation and the adequacy of the mortgage allowance for credit loss and mortgage impairments involve judgments that incorporate qualitative and quantitative Company and industry mortgage performance data. Management’s periodic evaluation and assessment of the adequacy of the mortgage allowance for credit loss and the need for mortgage impairments is based on known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the fair value of the underlying collateral, composition of the loan portfolio, current economic conditions, loss experience and other relevant factors. Loans included in the non-performing category and other loans with certain substandard credit quality indicators are individually reviewed to determine if a specific impairment is required. Risk is mitigated primarily through first position collateralization, guarantees, loan covenants and borrower reporting requirements. Since the Company does not originate or hold uncollateralized mortgages, loans are generally not deemed fully uncollectable. Generally, unrecoverable amounts are written off during the final stage of the foreclosure process.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

Loan balances are considered past due when payment has not been received based on contractually agreed upon terms. The accrual of interest is discontinued when concerns exist regarding the realization of loan principal or interest. The Company resumes interest accrual on loans when a loan returns to current status or under new terms when loans are restructured or modified.

On a quarterly basis, any loans with terms that were modified during that period are reviewed to determine if the loan modifications constitute a troubled debt restructuring (“TDR”). In evaluating whether a loan modification constitutes a TDR, it must be determined that the modification is a significant concession and the debtor is experiencing financial difficulties.

 

•  

Real estate properties held for the production of income are valued at depreciated cost less encumbrances. Properties held for sale are carried at the lower of depreciated cost or fair value less encumbrances and estimated costs to sell the property. Real estate is depreciated on a straight-line basis over the estimated life of the building or term of the lease for tenant improvements.

 

•  

Real estate properties occupied by the Company are carried at depreciated cost unless the carrying amount of the asset is deemed to be unrecoverable. The Company includes in both net investment income and other operating expenses an amount for rent relating to real estate properties occupied by the Company. Rent is derived from consideration of the repairs, expenses, taxes, interest and depreciation incurred. The reasonableness of the amount of rent recorded is verified by comparison to rent received from other like properties in the same area.

 

•  

Limited partnership interests are included in other invested assets and are accounted for using either net asset value per share (“NAV”) as a practical expedient to fair value or the equity method of accounting with changes in these values recognized in unassigned surplus in the period of change. The Company uses NAV as a practical expedient on partnership interests in investment companies where it has a minor equity interest and no significant influence over the entity’s operations. The Company uses the equity method when it has a partnership interest that is considered more than minor, although the Company has no significant influence over the entity’s operations.

 

•  

Common stocks, other than stocks of subsidiaries, are recorded at fair value based on the most recent closing price of the common stock as quoted on its exchange. Related party mutual funds, which are carried at fair value, are also included in common stocks. The net unrealized gain or loss on common stocks is reported as a component of surplus.

 

•  

Contract loans are carried at their unpaid balance. Contract loans are fully collateralized by the cash surrender value of the associated insurance policy.

 

•  

Short-term investments include all investments whose remaining maturities, at the time of acquisition, are three months to one year. Cash equivalent investments include all investments whose remaining maturities, at the time of acquisition, are three months or less. Both short-term and cash equivalent investments, excluding money market mutual funds, are stated at amortized cost, which approximates fair value. Cash equivalent investments also include highly liquid money market securities that are traded in an active market, and are carried at fair value.

 

•  

The Company enters into reverse repurchase agreements with third party broker-dealers for the purpose of enhancing the total return on its investment portfolio. The repurchase trading strategy involves the purchase of securities, with a simultaneous agreement to resell similar securities at a future date at an agreed-upon price. Securities purchased under these agreements are accounted for as secured borrowings, and are reported at amortized cost in cash, cash equivalents and short-term investments. Under these tri-party repurchase agreements, the designated custodian takes possession of the underlying collateral on the Company’s behalf, which is required to be cash or government securities. The fair value of the securities is monitored and additional collateral is obtained, where appropriate, to protect against credit exposure. The collateral cannot be sold or re-pledged and has not been recorded on the Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus.

The Company enters into dollar repurchase agreements with third party broker-dealers. The Company does not enter into these types of transactions for liquidity purposes, but rather for yield enhancement on its investment portfolio. The dollar repurchase trading strategy involves the sale of securities, with a simultaneous agreement to repurchase similar securities at a future date at an agreed-upon price. Assets to be repurchased are the same, or substantially the same, as the assets transferred, and are accounted for as secured borrowings. Proceeds of the sale are reinvested in other securities and may

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

enhance the current yield and total return. The difference between the sales price and the future repurchase price is recorded as an adjustment to net investment income. During the period between the sale and repurchase, the Company will not be entitled to receive interest and principal payments on the securities sold. Losses may arise from changes in the value of the securities or if the counterparty enters bankruptcy proceedings or becomes insolvent. In such cases, the Company’s right to repurchase the security may be restricted. Amounts owed to brokers under these arrangements are included as a liability in repurchase agreements.

The Company participates in a securities lending program in which the Company lends securities that are held as part of its general account investment portfolio to third parties. The Company does not enter into these types of transactions for liquidity purposes, but rather for yield enhancement on its investment portfolio. The borrower can return and the Company can request the loaned securities be returned at any time. The Company maintains ownership of the securities at all times and is entitled to receive from the borrower any payments for interest received on such securities during the loan term. Securities lending transactions are accounted for as secured borrowings. The securities on loan are included within bonds and short-term investments in the accompanying Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus. The securities lending agent indemnifies the Company against borrower risk, meaning that the lending agent agrees contractually to replace securities not returned due to a borrower default. The Company generally requires initial cash collateral in an amount greater than or equal to 102% of the fair value of domestic securities loaned and 105% of foreign securities loaned. Such collateral is used to replace the securities loaned in event of default by the borrower. Some cash collateral is reinvested in short-term repurchase agreements which are also collateralized by U.S. Government or U.S. Government Agency securities. Reinvested cash collateral is reported in securities lending reinvested collateral assets, with a corresponding liability in payable for securities lending. Collateral that cannot be sold or repledged is excluded from the Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus.

 

•  

The Company’s OTTI accounting policy requires that a decline in the value of a bond below its cost or amortized cost basis be assessed to determine if the decline is other-than-temporary. An OTTI is recorded (a) if it is probable that the Company will be unable to collect all amounts due according to the contractual terms in effect at the date of acquisition, (b) if the Company has the intent to sell the investment or (c) for non-interest related declines in value and where the Company does not have the intent and ability at the reporting date, to hold the bond until its recovery. Management considers a wide range of factors, as described below, regarding the bond issuer and uses its best judgment in evaluating the cause of the decline in its estimated fair value and in assessing the prospects for near-term recovery. Inherent in management’s evaluation of the bond are assumptions and estimates about the operations and ability to generate future cash flows. While all available information is taken into account, it is difficult to predict the ultimate recoverable amount from a distressed or impaired bond.

Considerations used by the Company in the impairment evaluation process include, but are not limited to, the following:

 

  •  

The extent to which estimated fair value is below cost;

  •  

Whether the decline in fair value is attributable to specific adverse conditions affecting a particular instrument, its issuer, an industry or geographic area;

  •  

The length of time for which the estimated fair value has been below cost;

  •  

Downgrade of a bond investment by a credit rating agency;

  •  

Deterioration of the financial condition of the issuer;

  •  

The payment structure of the bond investment and the likelihood of the issuer being able to make payments in the future; and

  •  

Whether dividends have been reduced or eliminated or scheduled interest payments have not been made.

For loan-backed and structured securities, if management does not intend to sell the bond and has the intent and ability to hold the bond until recovery of its amortized cost basis, but the present value of the cash flows expected to be collected (discounted at the effective interest rate implicit in the bond prior to impairment) is less than the amortized cost basis of the bond (referred to as the non-interest loss portion), an OTTI is considered to have occurred. In this instance, total OTTI is bifurcated into two components: the amount related to the non-interest loss is recognized in current period earnings through realized capital gains (losses); and the amount attributed to other factors does not have any financial impact and is disclosed only in the notes to the statutory financial statements. The calculation of expected cash flows utilized during the impairment evaluation process are determined using judgment and the best information available to the Company including default rates, credit ratings, collateral characteristics and current levels of subordination.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

For bonds not backed by other loans or assets, if management does not intend to sell the bond and has the intent and ability to hold, but does not expect to recover the entire cost basis, an OTTI is considered to have occurred. A charge is recorded in net realized capital gains (losses) equal to the difference between the fair value and cost or amortized cost basis of the bond. After the recognition of an OTTI, the bond is accounted for as if it had been purchased on the measurement date of the OTTI, with an amortized cost basis equal to the previous amortized cost basis less the OTTI recognized in net income. The difference between the new amortized cost basis and the expected future cash flows is accreted into net investment income. The Company continues to estimate the present value of cash flows expected to be collected over the life of the bond.

Fair value

Certain assets and liabilities are recorded at fair value on the Company’s Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus. The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company categorizes its assets and liabilities measured at fair value into a three-level hierarchy, based on the priority of the inputs to the respective valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The Company’s assets and liabilities have been categorized based upon the following fair value hierarchy:

 

  •  

Level 1 inputs which are utilized for separate account assets and liabilities, utilize observable, quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Financial assets utilizing Level 1 inputs include certain mutual funds.

 

  •  

Level 2 inputs utilize other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs, which are utilized for general and separate account assets and liabilities, include quoted prices for similar assets and liabilities in active markets and inputs, other than quoted prices, that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. The fair values for some Level 2 securities are obtained from pricing services. The inputs used by the pricing services are reviewed at least quarterly or when the pricing vendor issues updates to its pricing methodology. For bond and separate account assets and liabilities, inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, evaluated bids, offers and reference data including market research publications. Additional inputs utilized for assets and liabilities classified as Level 2 are:

 

  ○   

Derivative instruments - trading activity, swap curves, credit spreads, currency volatility, net present value of cash flows and news sources.

 

  ○   

Separate account assets and liabilities - various index data and news sources, amortized cost (which approximates fair value), trading activity, swap curves, credit spreads, recovery rates, restructuring, net present value of cash flows and quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

 

  •  

Level 3 inputs are unobservable and include situations where there is little, if any, market activity for the asset or liability. In general, the prices of Level 3 securities are obtained from single broker quotes and internal pricing models. If the broker’s inputs are largely unobservable, the valuation is classified as a Level 3. Broker quotes are validated through an internal analyst review process, which includes validation through known market conditions and other relevant data, as noted below. Internal models are usually cash flow based utilizing characteristics of the underlying collateral of the security such as default rate and other relevant data. Inputs utilized for securities classified as Level 3 are as follows:

 

  ○   

Corporate debt securities - unadjusted single broker quotes which may be in an illiquid market or otherwise deemed unobservable.

The fair value of certain investments in the separate accounts and limited partnerships are estimated using net asset value per share as a practical expedient, and are excluded from the fair value hierarchy levels in Note 5. These net asset values are based on the fair value of the underlying investments, less liabilities.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability

Overall, transfers between levels are attributable to a change in the observability of inputs. Assets are transferred to a lower level in the hierarchy when a significant input cannot be corroborated with market observable data. This may occur when market activity decreases and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets are transferred to a higher level in the hierarchy when circumstances change such that a significant input can be corroborated with market observable data. This may be due to a significant increase in market activity including recent trades, a specific event, or one or more significant input(s) becoming observable. All transfers between levels are recognized at the beginning of the reporting period in which the transfer occurred. There were no transfers during the year.

The policies and procedures utilized to review, account for, and report on the value and level of the Company’s securities were determined and implemented by the Finance division. The Investments division is responsible for the processes related to security purchases and sales and provides valuation and leveling input to the Finance division when necessary. Both divisions within the Company have worked in conjunction to establish thorough pricing, review, approval, accounting, and reporting policies and procedures around the securities valuation process.

In some instances, securities are priced using external broker quotes. In most cases, when broker quotes are used as pricing inputs, more than one broker quote is obtained. External broker quotes are reviewed internally by comparing the quotes to similar securities in the public market and/or to vendor pricing, if available. Additionally, external broker quotes are compared to market reported trade activity to ascertain whether the price is reasonable, reflective of the current market prices, and takes into account the characteristics of the Company’s securities.

Derivative financial instruments

The Company enters into derivative transactions which include the use of interest rate swaps, interest rate swaptions, cross-currency swaps, foreign currency forwards, U.S. government treasury futures contracts, Eurodollar futures contracts, futures on equity indices and interest rate swap futures. The Company uses these derivative instruments to manage various risks, including interest rate and foreign currency exchange rate risk associated with its invested assets and liabilities. Derivative instruments are not used for speculative reasons. Certain of the Company’s over-the-counter (“OTC”) derivatives are cleared and settled through a central clearing counterparty while others are bilateral contracts between the Company and a counterparty.

Derivatives are reported as other invested assets or other liabilities. Although some derivatives are executed under a master netting arrangement, the Company does not offset in the Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus the carrying value of those derivative instruments and the related cash collateral or net derivative receivables and payables executed with the same counterparty under the same master netting arrangement. Derivatives that qualify for hedge accounting treatment are valued using the valuation method (either amortized cost or fair value) consistent with the underlying hedged asset or liability. At inception of a derivative transaction, the hedge relationship and risk management objective is documented and the designation of the derivative is determined based on specific criteria of the transaction. Derivatives where hedge accounting is either not elected, or that are not eligible for hedge accounting, are stated at fair value with changes in fair value recognized in unassigned surplus in the period of change. Investment gains and losses generally result from the termination of derivative contracts prior to expiration and are generally recognized in net income and may be subject to IMR.

The Company uses derivative financial instruments for risk management purposes associated with certain invested assets and policy liabilities. Derivatives are used to (a) hedge the economic effects of interest rate and stock market movements on the Company’s guaranteed lifetime withdrawal benefit (“GLWB”) liability, (b) hedge the economic effect of a large increase in interest rates on the Company’s general account life insurance, group pension liabilities and certain separate account life insurance liabilities, (c) hedge the economic risks of other transactions such as future asset acquisitions or dispositions, the timing of liability pricing, currency risks on non-U.S. dollar denominated assets, and (d) convert floating rate assets or debt obligations to fixed rate assets or debt obligations for asset/liability management purposes.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

The Company controls the credit risk of its derivative contracts through credit approvals, limits, monitoring procedures and in many cases, requiring collateral. The Company’s exposure is limited to the portion of the fair value of derivative instruments that exceeds the value of the collateral held and not to the notional or contractual amounts of the derivatives.

Derivatives in a net asset position may have cash or securities pledged as collateral to the Company in accordance with the collateral support agreements with the counterparty. This collateral is held in a custodial account for the benefit of the Company. Unrestricted cash collateral is included in other assets and the obligation to return it is included in other liabilities. The cash collateral is reinvested in a government money market fund. Cash collateral pledged by the Company is included in other assets.

The Company may purchase a financial instrument that contains a derivative embedded in the financial instrument. Contracts that do not in their entirety meet the definition of a derivative instrument, may contain “embedded” derivative instruments implicit or explicit terms that affect some or all of the cash flows or the value of other exchanges required by the contract in a manner similar to a derivative instrument. An embedded derivative instrument shall not be separated from the host contract and accounted for separately as a derivative instrument.

Goodwill

Goodwill, resulting from acquisitions of subsidiaries that are reported in common stock and other invested assets, is amortized to unrealized capital gains/(losses) over the period in which the Company benefits economically, not to exceed ten years. Goodwill resulting from assumption reinsurance is reported in goodwill and is amortized to other insurance expenses over the period in which the Company benefits economically, not to exceed ten years. Admissible goodwill is limited in the aggregate to 10% of the Company’s adjusted capital and surplus. The Company tests goodwill for impairment annually or more frequently if events or circumstances indicate that there may be justification for conducting an interim test. If the carrying value of goodwill exceeds its fair value, the excess is recognized as impairment and recorded as a realized loss in the period in which the impairment is identified. There were no impairments of goodwill recognized during the years ended December 31, 2018 and 2017.

Cash value of company owned life insurance

The Company is the owner and beneficiary of life insurance policies which are included in Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus at their cash surrender values. At December 31, 2018, the investments underlying variable life insurance policies utilize various fund structures, with underlying investment characteristics of 8% equity and 92% fixed income.

Net investment income

Interest income from bonds is recognized when earned. Interest income on contract loans is recognized in net investment income at the contract interest rate when earned. All investment income due and accrued with amounts that are deemed uncollectible or that are over 90 days past due, including mortgage loans in default (“in process of foreclosure”), is not included in investment income. Amounts over 90 days past due are non-admitted assets and are recorded as a reduction to unassigned surplus. Real estate due and accrued income is excluded from net investment income if its collection is uncertain.

Net realized capital gains (losses)

Realized capital gains and losses are reported as a component of net income and are determined on a specific identification basis. Interest-related gains and losses are primarily subject to IMR, while non-interest related gains and losses are primarily subject to AVR. Realized capital gains and losses also result from the termination of derivative contracts prior to expiration and may be subject to IMR.

Policy reserves

Life insurance and annuity policy reserves with life contingencies are computed on the basis of statutory mortality and interest requirements and without consideration for withdrawals. Annuity contract reserves without life contingencies are computed on the basis of statutory interest requirements.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

Policy reserves for life insurance are valued in accordance with the provision of applicable statutory regulations. Life insurance reserves are determined principally using the Commissioner’s Reserve Valuation Method, using the statutory mortality and interest requirements, without consideration for withdrawals. Some policies contain a surrender value in excess of the reserve as legally computed. This excess is calculated and recorded on a policy-by-policy basis.

Premium stabilization reserves are calculated for certain policies to reflect the Company’s estimate of experience refunds and interest accumulations on these policies. The reserves are invested by the Company. The income earned on these investments is accumulated in this reserve and is used to mitigate future premium rate increases for such policies.

Policy reserves ceded to other insurance companies are recorded as a reduction of the reserve liabilities.    The cost of reinsurance related to long-duration contracts is accounted for over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies.

Policy and contract claims include provisions for reported life and health claims in process of settlement, valued in accordance with the terms of the related policies and contracts, as well as provisions for claims incurred but not reported based primarily on prior experience of the Company. As such, amounts are estimates, and the ultimate liability may differ from the amount recorded. Any changes in estimates will be reflected in the results of operations when additional information becomes known.

The liabilities for health claim reserves are determined using historical run-out rates, expected loss ratios and statistical analysis. The Company provides for significant claim volatility in areas where experience has fluctuated. The liabilities represent estimates of the ultimate net cost of all reported and unreported claims which are unpaid at year-end. Those estimates are subject to considerable variability in claim severity and frequency. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes known; such adjustments are included in current operations.

Premium, fee income and expenses

Life insurance premiums are recognized when due. Annuity considerations are recognized as revenue when received. Accident and health premiums are earned ratably over the terms of the related insurance and reinsurance contracts or policies. Life and accident and health insurance premiums received in advance are recorded as a liability and recognized as income when the premiums become earned. Fees from assets under management, assets under administration, shareholder servicing, mortality and expense risk charges, administration and record-keeping services and investment advisory services are recognized when earned in fee income or other income. Expenses incurred in connection with acquiring new insurance business, including acquisition costs such as sales commissions, are charged to operations as incurred.

Income taxes

The Company is included in the consolidated federal income tax return of Lifeco U.S. The federal income tax expense reported in the Statutory Statements of Operations represent income taxes provided on income that is currently taxable, excluding tax on net realized capital gains and losses. A net deferred tax asset is included in the Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus which is recorded using the asset and liability method in which deferred tax assets and liabilities are recorded for expected future tax consequences of events that have been recognized in either the Company’s statutory financial statements or tax returns. Deferred income tax assets are subject to limitations prescribed by statutory accounting principles. The change in deferred income taxes is treated as a component of the change in unassigned funds.

2. Accounting Changes

Changes in Accounting Principles

In 2009, the NAIC introduced Principle-Based Reserving (“PBR”) as a new method for calculating life insurance policy reserves. In cases where the PBR reserve is higher, it will replace the historic formulaic measure with one that more accurately reflects the risks of highly complex products. PBR is effective for 2017; however, companies are permitted to delay implementation until January 1, 2020. The Company will defer implementation for life and fixed annuity contracts until January 1, 2020 and is currently evaluating impact of adoption of PBR on its statutory financial statements.

In 2018, the Statutory Accounting Principles Working Group adopted, as final, a new SSAP No. 108, Derivatives Hedging Variable Annuity Guarantees, and a corresponding Issue Paper No. 159, Special Accounting for Limited Derivatives. The new

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

SSAP, which prescribes guidance for derivatives that hedge interest rate risk of variable annuity guarantees, was adopted with an effective date of January 1, 2020, with early adoption permitted as of January 1, 2019. The Company is currently evaluating impact of adoption of this elective guidance on its statutory financial statements.

3. Related Party Transactions

In the normal course of business the Company enters into agreements with related parties whereby it provides and/or receives record-keeping services, investment advisory services, and tax-related services, as well as corporate support services which include general and administrative services, information technology services, sales and service support and marketing services. The following table presents revenue earned, expenses incurred and expense reimbursement from insurance and non-insurance related parties for services provided and/or received pursuant to the service agreements. These amounts, in accordance with the terms of the contracts, are based upon market price, estimated costs incurred or resources expended as determined by number of policies, certificates in-force, administered assets or other similar drivers.

 

           Year Ended December 31,     Financial  
Description   Related party          2018                 2017                 2016          

statement

line

  
           
Provides corporate support service   Insurance affiliates:
Great-West Life & Annuity Insurance Company of New York (“GWL&A NY”)(1), Great-West Life & Annuity Insurance Company of South Carolina (“GWSC”)(1),The Canada Life Assurance Company (“CLAC”)(2) and Great-West Life Assurance Company (“Great-West Life”)(2)		    $ (15,522 )    $ (14,610 )    $ (14,895 )     



 Other
insurance
benefits
and
expenses		  
 
 
 
 
    Non-insurance affiliates:
FASCore, LLC (“FASCore”)(1), Advised Assets Group, LLC (“AAG”)(1), Great-West Capital Management, LLC (“GWCM”)(1), Great-West Trust Company, LLC (“GWTC”)(1), GWFS Equities, Inc. (“GWFS”)(1), Great-West Financial Retirement Plan Services (“Great-West RPS”)(1), Emjay, Inc.(1), MAM Holding Inc.(2) and Putnam(3)		      (142,424 )      (113,504 )      (102,698 )     
    Total       (157,946 )      (128,114 )      (117,593 )         
           
Receives corporate support services   Insurance affiliates:
CLAC( 1) and Great-West Life(1)		      1,711       1,966       1,999      
 Other
insurance		  
 
    Non-insurance affiliates:
Putnam(2) and Great West Global(2)		      3,381       3,128       5,922      

 benefits
and
expenses		  
 
 
           
    Total       5,092       5,094       7,921          
           
Provides marketing, distribution and administrative services to certain underlying funds and/or mutual funds   Non-insurance affiliate:
GWFS(1)		      198,976       202,880       203,288      
 Other
income		  
 
           
Provides record-keeping services   Non-insurance affiliates:
GWTC(1)		      38,200       30,517       21,110      
 Other
income		  
 
           
    Non-insurance related party:
Great-West Funds(4)		      65,281       65,743       57,867      
           
    Total       103,481       96,260       78,977          
Receives record-keeping services   Insurance affiliate:
GWL&A NY(1)		      (2,551 )      (2,423 )      (2,096 )     
 Other
income		  
 
    Non-insurance affiliates:
FASCore(1)and GWTC(1)		      (342,803 )      (316,923 )      (291,945 )         
    Total       (345,354 )      (319,346 )      (294,041 )         
           
Receives custodial services   Non-insurance affiliate:
GWTC(1)		      (12,410 )      (11,854 )      (11,125 )     
 Other
income		  
 
           
Receives reimbursement from tax sharing indemnification related to state and local tax liabilities   Non-insurance affiliate:
Putnam(3)
     9,140       9,611       12,261      
 Other
income		  
 

(1) A wholly-owned subsidiary of GWL&A

(2) An indirect wholly-owned subsidiary of Lifeco

(3) A wholly-owned subsidiary of Lifeco U.S.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

(4) An open-end management investment company, a related party of GWL&A

The Company’s separate accounts invest in shares of Great-West Funds, Inc. and Putnam Funds, which are affiliates of the Company and shares of other non-affiliated mutual funds and government and corporate bonds. The Company’s separate accounts include mutual funds or other investment options that purchase guaranteed interest annuity contracts issued by the Company. During the years ended December 31, 2018, 2017 and 2016, these purchases totaled $169,857, $292,774 and $183,365 respectively. As the general account investment contracts are also included in the separate account balances in the accompanying statutory statements of admitted assets, liabilities, capital and surplus, the Company has included the separate account assets and liabilities of $284,278 and $335,311 at December 31, 2018 and 2017, respectively, which is also included in the assets and liabilities of the general account at those dates.

The following table summarizes amounts due from parent and affiliates:

 

                 December 31,
Related party    Indebtedness      Due date    2018   2017

GWFS(1)

    On account      On demand    $ 34,394     $ 37,770  

CLAC(2)

    On account      On demand      —       20,063  

GWTC(1)

    On account      On demand      5,489       4,008  

GWCM(1)

    On account      On demand      1,367       2,179  

AAG(1)

    On account      On demand      3,088       994  

GWSC(1)

    On account      On demand      1,418       878  

Putnam(3)

    On account      On demand      4,027       —  

Great-West RPS(1)

    On account      On demand      324        595   

Other related party receivables

    On account      On demand      —       868  
          

 

 

 

  

 

 

 

Total

            $          50,107     $          67,355  
          

 

 

 

  

 

 

 

(1) A wholly-owned subsidiary of GWL&A

(2) An indirect wholly-owned subsidiary of Lifeco

(3) A wholly-owned subsidiary of Lifeco U.S.

 

The following table summarizes amounts due to parent and affiliates:

     
                 December 31,
Related party    Indebtedness      Due date    2018   2017

FASCore(1)

    On account      On demand    $ 35,385     $ 46,371  

Putnam(3)

    On account      On demand      770       3,432  

CLAC(2)

    On account      On demand      4,032       —  

Other related party payables

    On account      On demand      1,548       2,278  
          

 

 

 

  

 

 

 

Total

            $          41,735     $          52,081  
          

 

 

 

  

 

 

 

(1) A wholly-owned subsidiary of GWL&A

(2) An indirect wholly-owned subsidiary of Lifeco

(3) A wholly-owned subsidiary of Lifeco U.S.

Included in current federal income taxes recoverable at December 31, 2018 and 2017 is $72,188 and $17,456, respectively, of income tax receivable from Lifeco U.S. related to the consolidated income tax return filed by Lifeco U.S.

The Company (paid) received cash payments of $(42,577) and $171 from its subsidiary, GWSC, in 2018 and 2017, respectively, for the utilization of GWSC’s operating loss carryforward amounts under the terms of its tax sharing agreement. Additionally, during the years ended December 31, 2018, 2017 and 2016, the Company received interest income of $2,527, $3,044 and $2,733, respectively, from GWSC relating to the tax sharing agreement.

During the year ended December 31, 2018, the Company received dividends and return of capital of $106,000 and $680, respectively, from its subsidiaries, the largest being $42,000 from AAG. During the year ended December 31, 2017, the Company received dividends and return of capital of $82,500 and $1,150, respectively, from its subsidiaries, the largest being $35,000 from FASCore.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

During the years ended December 31, 2018 and 2017, the Company paid cash dividends to GWL&A Financial in the amounts of $152,295 and $145,301, respectively.

The Company and GWL&A NY have an agreement whereby the Company has committed to provide GWL&A NY financial support related to the maintenance of adequate regulatory surplus and liquidity.

4. Summary of Invested Assets

Investments in bonds consist of the following:

 

     December 31, 2018
       Book/adjusted  
  carrying value  		   Gross unrealized
gains		   Gross unrealized
losses		   Fair value

U.S. government

    $ 6,306     $ 926     $ 22     $ 7,210  

U.S. states, territories and possessions

      1,025,470       91,508       672       1,116,306  

Political subdivisions of states and territories

      842,211       63,945       2,034       904,122  

Special revenue and special assessments

      687       4       —       691  

Industrial and miscellaneous

      12,849,382       237,900       321,254       12,766,028  

Parent, subsidiaries and affiliates

      15,102       —       —       15,102   

Hybrid securities

      234,411       77       31,209        203,279  

Loan-backed and structured securities

      5,680,549        91,517        96,761       5,675,305  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total bonds

    $     20,654,118     $ 485,877     $ 451,952     $         20,688,043  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

     December 31, 2017
     Book/adjusted
carrying value		   Gross unrealized
gains		   Gross unrealized
losses		   Fair value

U.S. government

    $ 11,547     $ 1,603     $ 12     $ 13,138  

U.S. states, territories and possessions

      1,054,936       130,027       123       1,184,840  

Political subdivisions of states and territories

      949,988       89,898       1,486       1,038,400  

Special revenue and special assessments

      1,993       62       —       2,055  

Industrial and miscellaneous

      12,536,852       537,262       60,617       13,013,497  

Parent, subsidiaries and affiliates

      19,912       —       —       19,912  

Hybrid securities

      236,060       6,354       8,213       234,201  

Loan-backed and structured securities

      5,133,574       168,214       30,288       5,271,500  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total bonds

    $ 19,944,862     $ 933,420     $ 100,739     $ 20,777,543  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

The book/adjusted carrying value and estimated fair value of bonds and assets receiving bond treatment, based on estimated cash flows, are shown in the table below. Actual maturities will likely differ from these projections because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

     December 31, 2018
       Book/adjusted  
  carrying value  		   Fair value

Due in one year or less

    $ 767,254     $ 777,131  

Due after one year through five years

      3,834,629       3,863,897  

Due after five years through ten years

      6,883,504       6,803,249  

Due after ten years

      3,527,628       3,607,680  

Loan-backed and structured securities

      5,670,623       5,665,599   
  

 

 

 

  

 

 

 

Total bonds

    $         20,683,638      $          20,717,556  
  

 

 

 

  

 

 

 

Loan-backed and structured securities include those issued by U.S. government and U.S. agencies.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

The following table summarizes information regarding the sales of securities:

 

     Years ended December 31,  
     2018      2017                        2016  

Proceeds from sales

    $       12,788,008      $       17,492,392      $       23,931,241  

Gross realized gains from sales

      32,672        34,506        80,975  

Gross realized losses from sales

      30,960        56,354        34,646  

Unrealized losses on bonds

The following tables summarize gross unrealized investment losses including the non-credit-related portion of OTTI losses, by class of investment:

 

     December 31, 2018
     Less than twelve months    Twelve months or longer    Total
Bonds:    Fair value    Unrealized
loss and
OTTI		    Fair value    Unrealized
loss and
OTTI		    Fair value    Unrealized
loss and
OTTI
U.S. government    $ 116      $ 4      $ 818      $ 19      $ 934      $ 23  
U.S. states, territories and possessions      42,429        360        11,365        312        53,794        672  
Political subdivisions of states and territories      103,774        1,115        28,604        919        132,378        2,034  
Industrial and miscellaneous      6,334,837        235,993        2,763,614        201,312        9,098,451        437,305  
Hybrid securities      104,167        13,710        88,517        17,498        192,684        31,208  
Loan-backed and structured securities      2,462,938        46,794        1,568,844        53,417        4,031,782        100,211  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Total bonds

    $ 9,048,261      $ 297,976      $ 4,461,762      $ 273,477      $ 13,510,023      $ 571,453  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Total number of securities in an unrealized loss position         815           475           1,290  
     

 

 

 

      

 

 

 

      

 

 

 

     December 31, 2017
     Less than twelve months    Twelve months or longer    Total
Bonds:    Fair value    Unrealized
loss and
OTTI		    Fair value    Unrealized
loss and
OTTI		    Fair value    Unrealized
loss and
OTTI
U.S. government    $ 860      $ 12      $ —      $ —      $ 860      $ 12  
U.S. states, territories and possessions      11,794        125        —        —        11,794        125  
Political subdivisions of states and territories      13,114        56        43,949        1,430        57,063        1,486  
Industrial and miscellaneous      1,911,630        17,016        1,708,202        74,659        3,619,832        91,675  
Hybrid securities      —        —        106,351        8,214        106,351        8,214  
Loan-backed and structured securities      1,530,747        12,379        694,016        19,586        2,224,763        31,965  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Total bonds

    $     3,468,145      $ 29,588      $ 2,552,518      $ 103,889      $ 6,020,663      $     133,477  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Total number of securities in an unrealized loss position         328           257           585  
     

 

 

 

      

 

 

 

      

 

 

 

Bonds - Total unrealized losses and OTTI increased by $437,983, or 328%, from December 31, 2017 to December 31, 2018. The increase in unrealized losses was across all asset classes and reflects higher interest rates at December 31, 2018 compared to December 31, 2017, resulting in lower valuations of these bonds.

Total unrealized losses greater than twelve months increased by $169,588 from December 31, 2017 to December 31, 2018. Industrial and miscellaneous account for 74%, or $201,312, of the unrealized losses and OTTI greater than twelve months at December 31, 2018. The majority of these bonds continue to be designated as investment grade. Management does not have the intent to sell these assets; therefore, an OTTI was not recognized in net income.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

Loan-backed and structured securities account for 20%, or $53,417, of the unrealized losses and OTTI greater than twelve months at December 31, 2018. Of the $53,417 of unrealized losses and OTTI over twelve months on loan-backed and structured securities, 99% or $52,708 are on securities which continue to be designated as investment grade. The present value of cash flows expected to be collected is not less than amortized cost and management does not have the intent to sell these assets; therefore, an OTTI was not recognized in net income.

Loan-backed and structured securities

The Company had a concentration in loan-backed and structured securities of 19% and 18% of total invested assets at December 31, 2018 and 2017, respectively.

Derivative financial instruments

Derivative transactions are generally entered into pursuant to International Swaps and Derivatives Association (“ISDA”) Master Agreements with approved counterparties that provide for a single net payment to be made by one party to the other on a daily basis, periodic payment dates, or at the due date, expiration, or termination of the agreement.

The ISDA Master Agreements contain provisions that would allow the counterparties to require immediate settlement of all derivative instruments in a net liability position if the Company were to default on any debt obligations over a certain threshold. The aggregate fair value, inclusive of accrued income and expense, of derivative instruments with credit-risk-related contingent features that were in a net liability position was $36,177 and $106,038 as of December 31, 2018 and 2017, respectively. The Company had pledged collateral related to these derivatives of $0 and $42,750 as of December 31, 2018 and 2017, respectively, in the normal course of business. If the credit-risk-related contingent features were triggered on December 31, 2018 the fair value of assets that could be required to settle the derivatives in a net liability position was $36,177.

At December 31, 2018 and 2017, the Company had pledged $30,220 and $42,750, respectively, of unrestricted cash collateral to counterparties in the normal course of business, while other counterparties had pledged $71,280 and $14,332 of unrestricted cash collateral to the Company to satisfy collateral netting arrangements, respectively.

At December 31, 2018 and 2017, the Company had pledged U.S. Treasury bills in the amount of $8,197 and $3,215, respectively, with a broker as collateral for futures contracts.

Types of derivative instruments and derivative strategies

Interest rate contracts

Cash flow hedges

Interest rate swap agreements are used to convert the interest rate on certain debt securities and debt obligations from a floating rate to a fixed rate.

Not designated as hedging instruments

The Company enters into certain transactions in which derivatives are hedging an economic risk but hedge accounting is either not elected or the transactions are not eligible for hedge accounting. These derivative instruments include: exchange-traded interest rate swap futures, OTC interest rate swaptions, OTC interest rate swaps, exchange-traded Eurodollar interest rate futures and treasury interest rate futures. Certain of the Company’s OTC derivatives are cleared and settled through a central clearing counterparty while others are bilateral contracts between the Company and a counterparty.

The derivative instruments mentioned above are economic hedges and used to manage risk. These transactions are used to offset changes in liabilities including those in variable annuity products, hedge the economic effect of a large increase in interest rates, manage the potential variability in future interest payments due to a change in credited interest rates and the related change in cash flows due to increased surrenders, and manage interest rate risks of forecasted acquisitions of bonds and forecasted liability pricing.

 

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Table of Contents

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

Foreign currency contracts

Cross-currency swaps and foreign currency forwards are used to manage the foreign currency exchange rate risk associated with investments denominated in other than U.S. dollars. The Company uses cross-currency swaps to convert interest and principal payments on foreign denominated debt instruments into U.S. dollars. Cross-currency swaps may be designated as cash flow hedges; however, some are not eligible for hedge accounting. The Company uses foreign currency forwards to reduce the risk of foreign currency exchange rate changes on proceeds received on sales of foreign denominated debt instruments; however, hedge accounting is not elected.

Equity contracts

The Company uses futures on equity indices to offset changes in GLWB liabilities; however, they are not eligible for hedge accounting.

The following tables summarize derivative financial instruments:

 

     December 31, 2018
     Notional
amount		    Net
book/adjusted
carrying value (1)		   Fair value (2)
Hedge designation/derivative type:        

Derivatives designated as hedges:

        

Cash flow hedges:

        

Interest rate swaps

    $ 22,300      $ —     $ 6,248  

Cross-currency swaps

      886,018        55,808       39,109  
  

 

 

 

   

 

 

 

  

 

 

 

Total derivatives designated as hedges      908,318        55,808       45,357  
  

 

 

 

   

 

 

 

  

 

 

 

Derivatives not designated as hedges:        

Interest rate swaps

      636,500        (13,645 )      (12,775 ) 

Futures on equity indices

      137,829        5,920       (786 ) 

Interest rate futures

      53,000        2,276       37  

Interest rate swaptions

      194,330        173       173  

Cross-currency swaps

      573,703        26,208       24,945  
  

 

 

 

   

 

 

 

  

 

 

 

Total derivatives not designated as hedges      1,595,362        20,932       11,594  
  

 

 

 

   

 

 

 

  

 

 

 

Total cash flow hedges, and derivatives not designated as hedges    $         2,503,680      $ 76,740     $         56,951  
  

 

 

 

   

 

 

 

  

 

 

 

(1) The book/adjusted carrying value excludes accrued income and expense. The book/adjusted carrying value of all derivatives in an asset position is reported within other invested assets and the book/adjusted carrying value of all derivatives in a liability position is reported within other liabilities in the Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus.

(2) The fair value includes accrued income and expense.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

     December 31, 2017
     Notional
amount		    Net
book/adjusted
carrying value		    Fair value
Hedge designation/derivative type:         

Derivatives designated as hedges:

         

Cash flow hedges:

         

Interest rate swaps

    $ 388,800      $ —       $ 28,725   

Cross-currency swaps

      800,060        4,710         (31,358)  
  

 

 

 

   

 

 

 

   

 

 

 

Total cash flow hedges

      1,188,860        4,710         (2,633)  
  

 

 

 

   

 

 

 

   

 

 

 

Derivatives not designated as hedges:         

Interest rate swaps

      519,100        (3,911)        (3,911)  

Futures on equity indices

      22,074        857         77   

Interest rate futures

      60,700        2,358         (5)  

Interest rate swaptions

      164,522        75         75   

Cross-currency swaps

      612,733        (21,279)        (21,279)  
  

 

 

 

   

 

 

 

   

 

 

 

Total derivatives not designated as hedges      1,379,129        (21,900)        (25,043)  
  

 

 

 

   

 

 

 

   

 

 

 

Total cash flow hedges and derivatives not designated as hedges    $         2,567,989      $         (17,190)      $         (27,676)  
  

 

 

 

   

 

 

 

   

 

 

 

The following table presents net unrealized gains/(losses) on derivatives not designated as hedging instruments as reported in the Statutory Statements of Changes in Capital and Surplus:

 

     Net unrealized gain (loss) on derivatives
recognized in surplus		  
     Year Ended December 31,  
     2018      2017      2016
Derivatives not designated as hedging instruments:         

Interest rate swaps

    $ (8,039)      $ 130       $ (4,901)  

Interest rate swaptions

      198         (54)        196   

Futures on equity indices

      297         (363)        531   

Interest rate futures

      159         48         (37)  

Cross-currency swaps

      32,525         (39,021)        44,541   
  

 

 

     

 

 

     

 

 

 

Total    $           25,140       $           (39,260)      $           40,330   
  

 

 

     

 

 

     

 

 

 

Securities Lending

Securities classified as industrial and miscellaneous with a cost or amortized cost of $47,218 and estimated fair values of $43,425 were on loan under the program at December 31, 2018. There were no securities on loan at December 31, 2017. The Company received cash of $45,102 as collateral at December 31, 2018.

The Company’s securities lending agreements are open agreements meaning the borrower can return and the Company can recall the loaned securities at any time.

The cash collateral received of $45,102 was reinvested into short-term repurchase agreements which are collateralized by U.S. government or U.S. government agency securities and mature in under 30 days.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

Dollar Repurchase Agreements

Dollar repurchase agreements with a book/adjusted carrying value of $688,765 at December 31, 2018, was included with bonds in the Statutory Statement of Admitted Assets, Liabilities, Capital and Surplus. At December 31, 2018, the obligation of $664,650 to repurchase the agreements at a later date was recorded in repurchase agreements liabilities. The following table summarizes the securities underlying the dollar repurchase agreements at December 31, 2018:

 

     December 31, 2018

Issuer

    Book/adjusted
carrying value		   Fair value   Maturity        

FHLMC

    $ 66,283     $ 64,754       1/1/2034  

FHLMC

      482,628       471,162       1/1/2049  

FNMA

      35,506       34,925       1/1/2034  

FNMA

      104,348        101,971        1/1/2049  
  

 

 

 

  

 

 

 

  

Total

    $                 688,765     $             672,812    
  

 

 

 

  

 

 

 

  

There were no dollar repurchase agreements open at December 31, 2017.

The cash collateral of $664,791 related to the dollar repurchase agreement program at December 31, 2018 was primarily reinvested into investment grade corporate securities with a book/adjusted carrying value of $664,791 and fair value of $657,553, with maturities greater than 3 years.

Reverse Repurchase Agreements

The Company had short-term reverse repurchase agreements with book/adjusted carrying values of $11,200 and $23,200 at December 31, 2018 and December 31, 2017, respectively, with maturities of 2 days to 1 week. The fair value of securities acquired under the tri-party agreement and held on the Company’s behalf was $11,424 and $23,664 at December 31, 2018 and December 31, 2017, respectively.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

Restricted Assets

The following tables summarize collateral pledged by the Company and investments on deposit or in trust accounts controlled by various state insurance departments in accordance with statutory requirements:

 

     December 31, 2018
     Gross (Admitted & Non-admitted) Restricted               Percentage
     Total
General
Account
(G/A)		    G/A
Supporting
S/A
Activity		    Total
Separate
Account
(S/A)
Restricted
Assets		    S/A Assets
Supporting
G/A
Activity		    Total    Total
From
Prior
Year		    Increase/
(Decrease)		   Total
Non-
admitted
Restricted		    Total
Admitted
Restricted		      Gross
(Admitted &
Non-
admitted)
Restricted  to
Total Assets		    Admitted
Restricted
to Total
Admitted
Assets

Restricted Asset

Category:

Collateral held under security lending arrangements    $ 45,102      $ —      $ —      $ —      $ 45,102      $ —      $ 45,102     $ —      $ 45,102        0.08%        0.08%  
Subject to repurchase agreements      —        —        —        —        —        —        —       —        —        0.00%        0.00%  
Subject to reverse repurchase agreements      11,200        —        —        —        11,200        23,200        (12,000 )      —        11,200        0.02%        0.02%  
Subject to dollar repurchase agreements
     688,765        —        —        —        688,765        —        688,765       —        688,765        1.23%        1.23%  
On deposit with states      4,443        —        —        —        4,443        4,351        92       —        4,443        0.01%        0.01%  
On deposit with other regulatory bodies      603        —        —        —        603        627        (24 )      —        603        0.00%        0.00%  
Pledged as collateral not captured in other categories:                                

Futures margin deposits

      8,197        —        —        —        8,197        3,388        4,809       —        8,197        0.02%        0.02%  

Other collateral

      5,320        —        —        —        5,320        —        5,320       —        5,320        0.01%        0.01%  

Derivative cash collateral

      30,220        —        —        —        30,220        42,751        (12,531 )      —        30,220        0.05%        0.05%  
Other restricted assets      1,259        —        —        —        1,259        228        1,031       —        1,259        0.00%        0.00%  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

  

 

 

 

   

 

 

     

 

 

 

   

 

 

 

Total Restricted Assets    $ 795,109      $         —      $         —      $         —      $ 795,109      $ 74,545      $ 720,564     $         —      $ 795,109        1.42%        1.43%  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

  

 

 

 

   

 

 

     

 

 

 

   

 

 

 

     December 31, 2017
     Gross (Admitted & Non-admitted) Restricted               Percentage
     Total
General
Account
(G/A)		    G/A
Supporting
S/A
Activity		    Total
Separate
Account
(S/A)
Restricted
Assets		    S/A Assets
Supporting
G/A
Activity		    Total    Total
From
Prior
Year		    Increase/
(Decrease)		   Total Non-
admitted
Restricted		    Total
Admitted
Restricted		      Gross
(Admitted &
Non-
admitted)
Restricted  to
Total Assets		    Admitted
Restricted
to Total
Admitted
Assets

Restricted Asset

Category:

Subject to reverse repurchase agreements    $ 23,200      $ —      $ —      $ —      $ 23,200      $ —      $ 23,200     $ —      $ 23,200        0.000%        0.000%  
On deposit with states      4,351        —        —        —        4,351        4,350        1       —        4,351        0.000%        0.000%  
On deposit with other regulatory bodies      627        —        —        —        627        513        114       —        627        0.000%        0.000%  
Other restricted assets      228        —        —        —        228        581        (353 )      —        228        0.000%        0.000%  
Pledged as collateral not captured in other categories:                                

Futures margin deposits

      3,215        —        173        —        3,388        3,570        (182 )      —        3,388        0.000%        0.000%  

Derivative cash collateral

      42,750        —        1        —        42,751        —        42,751       —        42,751        0.000%        0.000%  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

  

 

 

 

   

 

 

     

 

 

 

   

 

 

 

Total Restricted Assets    $ 74,371      $ —      $ 174      $ —      $ 74,545      $ 9,014      $ 65,531     $ —      $ 74,545        0.000%        0.000%  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

  

 

 

 

   

 

 

     

 

 

 

   

 

 

 

 

29

Table of Contents

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

Net Investment Income

The following table summarizes net investment income:

 

     Years Ended December 31,
     2018       2017                         2016
Bonds    $ 822,645     $ 817,282     $ 787,272  
Common stock      221       425       633  
Mortgage loans      169,415       164,055       151,505  
Real estate      26,557       25,979       25,401  
Contract loans      199,507       198,672       198,846  
Cash, cash equivalents and short-term investments      4,749       6,556       7,030  
Derivative instruments      16,308       16,216       10,029  
Other invested assets      125,821       100,134       116,701  
Miscellaneous      1,896       4,552       1,761  
  

 

 

 

  

 

 

 

  

 

 

 

Gross investment income

      1,367,119       1,333,871       1,299,178  
Expenses      (59,732 )      (66,908 )      (63,337 ) 
  

 

 

 

  

 

 

 

  

 

 

 

Net investment income    $         1,307,387     $         1,266,963     $         1,235,841  
  

 

 

 

  

 

 

 

  

 

 

 

The amount of interest incurred and charged to investment expense during the years ended December 31, 2018, 2017 and 2016 was $22,070, $29,278 and $31,042, respectively.

The following table summarizes net realized capital gains (losses) on investments net of federal income tax and interest maintenance reserve transfer:

 

     Year Ended December 31,
     2018    2017    2016
Net realized capital gains (losses), before federal income tax    $ 4,905      $ (19,270)      $             46,048  

Less: Federal income tax

      1,030        (6,745)        16,117  
  

 

 

 

   

 

 

 

   

 

 

 

Net realized capital gains (losses), before IMR transfer      3,875        (12,525)        29,931  

Net realized capital gains (losses) transferred to IMR, net of federal income tax of ($1,781), ($7,032) and $16,707, respectively

      (6,701)        (13,060)        31,027  
  

 

 

 

   

 

 

 

   

 

 

 

Net realized capital gains (losses), net of federal income tax expense (benefit) of $2,811, $287 and ($590), respectively, and IMR transfer    $             10,576      $             535      $ (1,096)  
  

 

 

 

   

 

 

 

   

 

 

 

Concentrations

The Company had the following bond concentrations based on total invested assets:

 

     Concentration by type
     December 31,
     2018   2017
Industrial and miscellaneous    56%   56%
     Concentration by industry
     December 31,
     2018   2017
Financial services    14%   13%
Utilities    8%   10%

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

Mortgage Loans

The recorded investment of the commercial mortgage loan portfolio categorized as performing was $4,207,611 and $3,872,084 as of December 31, 2018 and 2017, respectively. These mortgages were current as of December 31, 2018 and 2017.

The maximum lending rates for commercial mortgage loans originated during the years ended December 31, 2018 and 2017 were 4.61% and 4.23%, respectively. The minimum lending rates for commercial mortgage loans originated during the years ended December 31, 2018 and 2017 were 3.51% and 3.17%, respectively.

During 2018 and 2017, the maximum percentage of any one loan to the value of security at the time of the loan, exclusive of insured or guaranteed or purchase money mortgages, was 69% and 69%, respectively.

The following table summarizes activity in the commercial mortgage provision allowance for the years ended December 31, 2018 and 2017:

 

     Year ended December 31,
     2018    2017

Beginning balance

    $ 745      $ 2,713  

Additions charged to operations

      —        157  

Direct write-downs charged against the allowances

      —        (600 ) 

Recoveries of amounts previously charged off

      —        (1,525 ) 
  

 

 

 

   

 

 

 

Ending balance

    $                                   745      $                                   745  
  

 

 

 

   

 

 

 

The following tables present concentrations of the total commercial mortgage portfolio:

 

     Concentration by type
     December 31,
     2018   2017

Multi-family

    37%   39%

Industrial

    29%   25%

Office

    17%   17%

Retail

    10%   11%

Other

    7%   8%
  

 

  

 

   100%   100%
  

 

  

 

   Concentration by geographic area
   December 31,
                 2018                                2017               

Pacific

    35%   36%

East North Central

    18%   16%

South Atlantic

    14%   13%

Middle Atlantic

    10%   11%

Mountain

    9%   10%

Other

    8%   8%

West South Central

    6%   6%
  

 

  

 

   100%   100%
  

 

  

 

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

Troubled Debt Restructuring

After being impaired in 2016, a security classified as industrial and miscellaneous was subject to a troubled debt restructuring in August 2017, under which the original security with a recorded investment, after impairments, of $11,710 was extinguished in exchange for new assets. Cash, equities, receivable and debt in the amounts of $1,887, $6,591, $164 and $3,068, respectively, were acquired in full satisfaction of the original debt. The new debt has extended the maturity date from December 30, 2017 to August 1, 2022 and the interest rate increased from 7% to 8%. Upon consummation of the troubled debt restructuring, a total realized capital loss of $7,789 was recorded in the “Net realized capital gains (losses) less capital gains tax and transfers to interest maintenance reserve” line on the Statutory Statements of Operations. There were no payment defaults recognized on previously restructured investments.

5. Fair Value Measurements

The following tables summarize the fair value hierarchy for all financial instruments and invested assets:

 

               Fair Value Measurements at Reporting Date
 Type of financial instrument              December 31, 2018

 Assets:

    Aggregate
    fair value    		    Admitted
assets and
    liabilities    		        (Level 1)            (Level 2)            (Level 3)        Net Asset
  Value (NAV)  		      Total  
(All Levels)

Bonds

    $ 20,688,043      $ 20,654,118      $ —      $ 20,666,851      $ 21,192      $ —      $ 20,688,043  

Common stock

      35,635        35,635        35,635        —        —        —        35,635  

Mortgage loans

      4,176,880        4,206,865        —        4,176,880        —        —        4,176,880  

Real estate

      137,700        38,962        —        —        137,700        —        137,700  

Cash, cash equivalents and short-term investments

      228,997        229,003        188,283        40,714        —        —        228,997  

Contract loans

      4,122,637        4,122,637        —        4,122,637        —        —        4,122,637  

Other long-term invested assets

      392,232        338,837        —        319,299        31        72,902        392,232  

Securities lending collateral assets

      45,102        45,102        —        45,102        —        —        45,102  

Collateral under derivative counterparty collateral agreements

      101,561        101,561        101,561        —        —        —        101,561  

Other collateral

      9,315        9,315        9,315        —        —        —        9,315  

Receivable for securities

      9,654        9,654        —        9,654        —        —        9,654  

Derivative instruments

      114,612        115,922        66        114,546        —        —        114,612  

Separate account assets

      24,639,265        24,654,916        13,236,266        10,975,973        —        427,026        24,639,265  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Total assets

    $ 54,701,633      $ 54,562,527      $ 13,571,126      $ 40,471,656      $ 158,923      $ 499,928      $ 54,701,633  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

 Liabilities:

                                   

Deposit-type contracts

    $ 196,778      $ 189,895      $ —      $ 196,778      $ —      $ —      $ 196,778  

Commercial paper

      98,859        98,859        —        98,859        —        —        98,859  

Payable under securities lending agreements

      45,102        45,102        —        45,102        —        —        45,102  

Collateral under derivative counterparty collateral agreements

      71,280        71,280        71,280        —        —        —        71,280  

Other collateral

      3,995        3,995        3,995        —        —        —        3,995  

Payable for securities

      11,096        11,096        —        11,096        —        —        11,096  

Derivative instruments

      57,660        47,378        814        56,846        —        —        57,660  

Dollar repurchase agreements

      664,650        664,650        —        664,650        —        —        664,650  

Separate account liabilities

      251,806        251,806        44        251,762        —        —        251,806  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Total liabilities

    $ 1,401,226      $ 1,384,061      $ 76,133      $ 1,325,093      $ —      $ —      $ 1,401,226  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

               Fair Value Measurements at Reporting Date
 Type of financial instrument              December 31, 2017

 Assets:

    Aggregate
fair value		    Admitted
assets and
liabilities		    (Level 1)    (Level 2)    (Level 3)    Total
(All Levels)

Bonds

    $ 20,777,543      $ 19,944,862      $ —      $ 20,750,605      $ 26,938      $ 20,777,543  

Mortgage loans

      3,858,883        3,871,338        —        3,858,883        —        3,858,883  

Real estate

      137,526        37,768        —        —        137,526        137,526  

Cash, cash equivalents and short-term investments

      242,084        242,084        198,869        43,215        —        242,084  

Contract loans

      4,078,669        4,078,669        —        4,078,669        —        4,078,669  

Other long-term invested assets

      412,019        325,181        —        363,198        48,821        412,019  

Collateral under derivative counterparty collateral agreements

      57,420        57,420        57,420        —        —        57,420  

Receivable for securities

      23,760        23,135        —        23,760        —        23,760  

Derivative instruments

      78,431        68,439        98        78,333        —        78,431  

Separate account assets

      28,222,102        28,197,126        16,058,519        12,163,583        —        28,222,102  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Total assets

    $ 57,888,437      $ 56,846,022      $ 16,314,906      $ 41,360,246      $ 213,285      $ 57,888,437  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

 Liabilities:

                              

Deposit-type contracts

    $ 219,909      $ 206,134      $ —      $ 219,909      $ —      $ 219,909  

Commercial paper

      99,886        99,886        —        99,886        —        99,886  

Collateral under derivative counterparty collateral agreements

      14,332        14,332        14,332        —        —        14,332  

Payable for securities

      2,364        2,364        —        2,364        —        2,364  

Derivative instruments

      106,106        88,843        26        106,080        —        106,106  

Separate account liabilities

      409,275        409,275        9        409,266        —        409,275  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Total liabilities

    $ 851,872      $ 820,834      $ 14,367      $ 837,505      $ —      $ 851,872  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Bonds and common stock

The fair values for bonds and common stock are generally based upon evaluated prices from independent pricing services. In cases where these prices are not readily available, fair values are estimated by the Company. To determine estimated fair value for these instruments, the Company generally utilizes discounted cash flow models with market observable pricing inputs such as spreads, average life, and credit quality. Fair value estimates are made at a specific point in time, based on available market information and judgments about financial instruments, including estimates of the timing and amounts of expected future cash flows and the credit standing of the issuer or counterparty.

Mortgage loans

Mortgage loan fair value estimates are generally based on discounted cash flows. A discount rate matrix is used where the discount rate valuing a specific mortgage generally corresponds to that mortgage’s remaining term and credit quality. Management believes the discount rate used is comparable to the credit, interest rate, term, servicing costs, and risks of loans similar to the portfolio loans that the Company would make today given its internal pricing strategy.

Real estate

The estimated fair value for real estate is based on the unadjusted appraised value which includes factors such as comparable property sales, property income analysis, and capitalization rates.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

Cash, cash equivalents, short-term investments, collateral receivable and payable under securities lending agreements, receivable and payable for securities, dollar repurchase agreements and commercial paper

The amortized cost of cash, cash equivalents, short-term investments, collateral receivable and payable under securities lending agreements, receivable and payable for securities, dollar repurchase agreements and commercial paper is a reasonable estimate of fair value due to their short-term nature and the high credit quality of the issuers, counterparties and obligor. Cash equivalent investments also include money market funds that are valued using unadjusted quoted prices in active markets.

Contract loans

The Company believes the fair value of contract loans approximates book value. Contract loans are funds provided to contract holders in return for a claim on the contract. The funds provided are limited to the cash surrender value of the underlying contract. The nature of contract loans is to have a negligible default risk as the loans are fully collateralized by the value of the contract. Contract loans do not have a stated maturity and the balances and accrued interest are repaid either by the contractholder or with proceeds from the contract. Due to the collateralized nature of contract loans and unpredictable timing of repayments, the Company believes the fair value of contract loans approximates carrying value.

Other long-term invested assets

The fair values of other long-term invested assets are based on the specific asset type. Other invested assets that are held as bonds, such as surplus notes, are primarily valued the same as bonds. For low-income housing tax credits, amortized cost approximates fair value.

Limited partnership interests represent the Company’s minority ownership interests in pooled investment funds. These funds employ varying investment strategies that primarily make private equity investments across diverse industries and geographical focuses. The net asset value, determined using the partnership financial statement reported capital account adjusted for other relevant information, which may impact the exit value of the investments, is used as a practical expedient to estimate fair value. Distributions by these investments are generated from investment gains, from operating income generated by the underlying investments of the funds and from liquidation of the underlying assets of the funds, which are estimated to be liquidated over the next one to 10 years. In the absence of permitted sales of its ownership interest, the Company will be redeemed out of the partnership interests through distributions.

Collateral under derivative counterparty collateral agreements and other collateral

Included in other assets is cash collateral received from or pledged to counterparties and included in other liabilities is the obligation to return the cash collateral to the counterparties. The carrying value of the collateral is a reasonable estimate of fair value.

Derivative instruments

The estimated fair values of OTC derivatives, primarily consisting of cross-currency swaps, interest rate swaps and interest rate swaptions, are the estimated amount the Company would receive or pay to terminate the agreements at the end of each reporting period, taking into consideration current interest rates and other relevant factors.

Separate account assets

Separate account assets and liabilities primarily include investments in mutual funds, unregistered funds, most of which are not subject to redemption restrictions, bonds, and short-term securities. Mutual funds and unregistered funds are recorded at net asset value, which approximates fair value, on a daily basis. The bond and short-term investments are valued in the same manner, and using the same pricing sources and inputs as the bond and short-term investments of the Company.

Deposit-type contracts

Fair values for liabilities under deposit-type insurance contracts are estimated using discounted liability calculations, adjusted to approximate the effect of current market interest rates for the assets supporting the liabilities.

 

34

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

Fair value hierarchy

The following tables present information about the Company’s financial assets and liabilities carried at fair value and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value:

 

     Fair Value Measurements at Reporting Date
     December 31, 2018
                      Net Asset Value      Total

 Assets:

          (Level 1)                (Level 2)                (Level 3)        (NAV)        (All Levels)    

Bonds

               

Industrial and miscellaneous

    $ —      $ —      $ 1,275      $ —      $ 1,275  

Common stock

               

Mutual funds

      30,969        —        —        —        30,969  

Industrial and miscellaneous

      4,666        —        —        —        4,666  

Other invested assets

               

Limited partnerships

      —        —        —        72,902        72,902  

Derivatives

               

Interest rate swaps

      —        8,964        —        —        8,964  

Cross-currency swaps

      —        39,705        —        —        39,705  

Interest rate swaptions

      —        173        —        —        173  

Separate account assets (1)

      13,212,700        9,887,836        —        427,026        23,527,562  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Total assets

    $ 13,248,335      $ 9,936,678      $ 1,275      $ 499,928      $ 23,686,216  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

 Liabilities:

                         

Derivatives

               

Interest rate swaps

    $ —        21,740      $ —      $ —      $ 21,740  

Cross-currency swaps

      —        14,760        —        —        14,760  

Separate account liabilities (1)

      44        251,762        —        —        251,806  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Total liabilities

    $ 44      $ 288,262      $ —      $ —      $ 288,306  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

(1) Includes only separate account investments which are carried at the fair value of the underlying invested assets or liabilities owned by the separate accounts.

 

     Fair Value Measurements at Reporting Date
     December 31, 2017
                    Total

 Assets:

          (Level 1)                (Level 2)                (Level 3)              (All Levels)    

Bonds

            

Industrial and miscellaneous

    $ —      $ —      $ 1,297      $ 1,297  

States

      —        228        —        228  

Derivatives

            

Interest rate swaps

      —        9,732        —        9,732  

Cross-currency swaps

      —        20,320        —        20,320  

Interest rate swaptions

      —        75        —        75  

Separate account assets (1)

      16,057,788        11,172,811        —        27,230,599  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Total assets

    $ 16,057,788      $ 11,203,166      $ 1,297      $ 27,262,251  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

 Liabilities:

            

Derivatives

            

Interest rate swaps

    $ —      $ 13,643      $ —      $ 13,643  

Cross-currency swaps

      —        41,599        —        41,599  

Separate account liabilities (1)

      9        409,266        —        409,275  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Total liabilities

    $ 9      $ 464,508      $ —      $ 464,517  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

(1) Include only separate account investments which are carried at the fair value of the underlying invested assets or liabilities owned by the separate accounts.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

6.   Non-Admitted Assets

The following table summarizes the Company’s non-admitted assets:

 

     December 31, 2018    December 31, 2017

Type

    Asset    Non-
admitted
asset		    Admitted
asset		    Asset    Non-
admitted
asset		    Admitted
asset

Common stock

    $ 131,883      $ —      $ 131,883      $ 109,948      $ 1,971      $ 107,977  

Cash, cash equivalents and short-term investments

      229,434        431        229,003        242,084        —        242,084  

Other invested assets

      607,793        1,006        606,787        569,702        3,515        566,187  

Premiums deferred and uncollected

      25,904        109        25,795        16,232        313        15,919  

Deferred income taxes

      340,645        190,148        150,497        382,188        232,873        149,315  

Due from parent, subsidiaries and affiliate

      94,542        44,435        50,107        110,901        43,546        67,355  

Other prepaid assets

      28,150        28,150        —        16,478        16,478        —  

Capitalized internal use software

      58,658        58,658        —        55,279        55,279        —  

Furniture, fixtures and equipment

      4,949        4,949        —        16,182        5,196        10,986  

Reinsurance recoverable

      8,468        378        8,090        7,090        —        7,090  

Other assets

      234,504        2,539        231,965        152,955        553        152,402  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Total

    $   1,764,930      $     330,803      $   1,434,127      $   1,679,039      $     359,724      $   1,319,315  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

The following table summarizes the Company’s aggregate Statement of Admitted Assets, Liabilities, Capital and Surplus values of all subsidiary, controlled and affiliated entities (“SCA”), except insurance SCA entities as follows:

 

     December 31, 2018    December 31, 2017

Type

    Asset    Non-
admitted
asset		    Admitted
asset		    Asset    Non-
admitted
asset		    Admitted
asset

Common stock

    $ 13,544      $ —      $ 13,544      $ 15,636      $ 1,971      $ 13,665  

Other invested assets

      143,533        975        142,558        151,318        1,610        149,708  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Total

    $         157,077      $                 975      $         156,102      $         166,954      $             3,581      $         163,373  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

7.   Premiums Deferred and Uncollected

The following table summarizes the Company’s ordinary and group life insurance premiums and annuity considerations deferred and uncollected, both gross and net of loading:

 

     December 31, 2018    December 31, 2017

Type

    Gross    Net of
loading		    Gross   Net of
loading

Ordinary new business

    $ 427      $ 221      $ 226     $ 64  

Ordinary renewal business

      31,069        25,544        20,681       16,095  

Group life

      32        30        (260 )      (240 ) 
  

 

 

 

   

 

 

 

   

 

 

 

  

 

 

 

Total

    $             31,528      $             25,795      $             20,647     $             15,919  
  

 

 

 

   

 

 

 

   

 

 

 

  

 

 

 

8.   Business Combination and Goodwill

The Company’s goodwill is the result of two types of transactions.

Goodwill that arises as a result of the acquisition of subsidiary limited liability companies is included in other invested assets in the accompanying Statutory Statement of Admitted Assets, Liabilities and Capital. On August 29, 2014, the Company completed the acquisition of all of the voting equity interests in the J.P. Morgan Retirement Plan Services (“RPS”) large-market

 

36

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

recordkeeping business. This transaction was accounted for as a statutory purchase. Goodwill of $51,098 was recorded in other invested assets, which will be amortized over 10 years. At December 31, 2018 and 2017, the Company has $28,955 and $34,065, respectively, of admitted goodwill related to this acquisition. Goodwill amortization of $5,110 was recorded for the years ended December 31, 2018, 2017 and 2016.

 

Acquisition date   

Cost of acquired

entity

      Original amount of
admitted goodwill		      Admitted goodwill
as of December 31,
2018		      Amount of goodwill
amortized for the
year ended
December 31, 2018		     

Admitted goodwill as a
% of SCA

book/adjusted carrying
value, gross of admitted
goodwill

  

August 29, 2014

    $                     64,169      $                     51,098      $                     28,955      $                     5,110        104.4%  

In addition, goodwill that arises as a result of the acquisition of various assumption reinsurance agreements is included in goodwill in the accompanying Statutory Statement of Admitted Assets, Liabilities and Capital. At December 31, 2018 and 2017, this goodwill was fully amortized. During each of the years ended December 31, 2018, 2017 and 2016, the Company recorded $0, $977 and $12,929, respectively, of goodwill amortization related to these acquisitions.

9. Reinsurance

In the normal course of its business, the Company seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding risks to other insurance enterprises under excess coverage and coinsurance contracts. The Company retains an initial maximum of $3,500 of coverage per individual life. This initial retention limit of $3,500 may increase due to automatic policy increases in coverage at a maximum rate of $175 per annum, with an overall maximum increase in coverage of $1,000.

Ceded reinsurance contracts do not relieve the Company from its obligations to policyholders. The failure of reinsurers to honor their obligations could result in losses to the Company. The Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities or economic characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies.

The Company assumes risk from approximately 40 insurers and reinsurers by participating in yearly renewable term and coinsurance pool agreements. When assuming risk, the Company seeks to generate revenue while maintaining reciprocal working relationships with these partners as they also seek to limit their exposure to loss on any single life.

Maximum capacity to be retained by the Company is dictated at the treaty level and is monitored annually to ensure the total risk retained on any one life is limited to a maximum retention of $4,500.

The Company did not have any write-offs for uncollectible reinsurance receivables during the years ended December 31, 2018 and 2017 for losses incurred, loss adjustment expenses incurred or premiums earned.

The Company does not have any uncollectible reinsurance, commutation of ceded reinsurance, or certified reinsurer downgraded of status subject to revocation.

10. Aggregate Reserves

Aggregate reserves are computed in accordance with the Commissioner’s Annuity Reserve Valuation Method (“CARVM”) and the Commissioner’s Reserve Valuation Method (“CRVM”), the standard statutory reserving methodologies.

The significant assumptions used to determine the liability for future life insurance benefits are as follows:

 

37

Table of Contents

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

Interest

    - Life Insurance    2.25% to 6.00%
   - Annuity Funds    3.00% to 11.25%
   - Disability    2.50% to 6.00%

Mortality

    - Life Insurance    Various valuation tables, primarily including 1941, 1958, 1980 and 2001 Commissioners Standard Ordinary (“CSO”) tables, and American Experience
   - Annuity Funds    Various annuity valuation tables, primarily including the GA 1951, 71, 83a and 2012 Individual Annuitant Mortality (“IAM”), Group Annuity Reserve (“GAR”) 94, 1971 and 1983 Group Annuity Mortality (“GAM”), and Annuity 2000

Morbidity

    - Disability    1970 Intercompany DISA Group Disability Tables

The Company waives deduction of deferred fractional premiums upon the death of the insured. When surrender values exceed aggregate reserves, excess cash value reserves are held.

Policies issued at premium corresponding to ages higher than the true ages are valued at the rated-up ages. Policies providing for payment at death during certain periods of an amount less than the full amount of insurance, being policies subject to liens, are valued as if the full amount is payable without any deduction.

For policies issued with, or subsequently subject to, an extra premium payable annually, an extra reserve is held. The extra premium reserve is the unearned gross extra premium payable during the year if the policies are rated for reasons other than medical impairments. For medical impairments, the extra premium reserve is calculated as the excess of the reserve based on rated mortality over that based on standard mortality. All substandard annuities are valued at their true ages.

At December 31, 2018 and 2017, the Company had $3,904,519 and $4,354,703, respectively of insurance in force for which the gross premiums are less than the net premiums according to the standard valuation set by the Division.

Tabular interest, tabular interest on funds not involving life contingencies and tabular cost have been determined from the basic data for the calculation of aggregate reserves. Tabular less actual reserves released has been determined from basic data for the calculation of aggregate reserves and the actual reserves released.

The withdrawal characteristics of annuity reserves and deposit liabilities are as follows:

 

     December 31, 2018
     General Account   Separate
Account with
Guarantees		  

Separate

Account Non-

guaranteed

   Total   Percent of
total gross
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Subject to discretionary withdrawal:

           

With market value adjustment

    $ 850,240     $ —     $ —     $ 850,240       2.8 % 

At book value less current surrender charges of 5% or more

      779,760       —       —       779,760       2.5 % 

At fair value

      —       6,460,894       11,311,267       17,772,161       57.5 % 
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total with adjustment or at market value

      1,630,000       6,460,894       11,311,267       19,402,161       62.8 % 

At book value without adjustment (minimal or no charge adjustment)

      155,150       —       —       155,150       0.5 % 

Not subject to discretionary withdrawal

      11,355,177       —       —       11,355,177       36.7 % 
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total gross

      13,140,327       6,460,894       11,311,267       30,912,488       100.0 % 
          

 

 

 

Reinsurance ceded

      1,479       —       —       1,479     
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

Total, net

    $         13,138,848      $         6,460,894      $             11,311,267      $     30,911,009    
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

     December 31, 2017
    

General

Account

    Separate
Account with
Guarantees		   

Separate
Account Non-

guaranteed

    Total    Percent of
total gross
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Subject to discretionary withdrawal:

               

With market value adjustment

    $ 780,008      $ —      $ —      $ 780,008        2.3%  

At book value less current surrender charges of 5% or more

      716,402        —        —        716,402        2.1%  

At fair value

      —        6,914,918        14,390,470        21,305,388        62.4%  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Total with adjustment or at market value

      1,496,410        6,914,918        14,390,470        22,801,798        66.8%  

At book value without adjustment (minimal or no charge adjustment)

      159,104        —        —        159,104        0.5%  

Not subject to discretionary withdrawal

      11,181,649        —        —        11,181,649        32.7%  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Total gross

      12,837,163        6,914,918        14,390,470        34,142,551        100.0%  
              

 

 

 

Reinsurance ceded

      73,007        —        —        73,007     
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

Total, net

    $             12,764,156      $         6,914,918      $         14,390,470      $     34,069,544     
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

The following information is obtained from the applicable exhibit in the Company’s December 31, 2018 and 2017 annual statements and related separate account annual statement, both of which are filed with the Division and is provided to reconcile annuity reserves and deposit funds to amounts reported in the Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus:

 

     December 31,
     2018    2017

Life and Accident and Health Annual Statement (net of reinsurance):

      

Annuities included in aggregate reserve for life policies and contracts

    $                 12,936,341      $                 12,544,414  

Supplementary contracts with life contingencies and other contracts included in aggregate reserve for life policies and contracts

      12,611        13,608  

Liability for deposit-type contracts

      189,896        206,134  
  

 

 

 

   

 

 

 

Subtotal - general account

      13,138,848        12,764,156  

Separate Accounts Annual Statement:

      

Annuities included in aggregate reserve for life policies and contracts

      17,772,161        21,305,388  
  

 

 

 

   

 

 

 

Total

    $ 30,911,009      $ 34,069,544  
  

 

 

 

   

 

 

 

11. Liability for Unpaid Claims and Claim Adjustment Expenses

Activity in the accident and health liability for unpaid claims and for claim adjustment expenses included in aggregate reserve for life policies and contracts and accident and health policies, excluding unearned premium reserves, is summarized as follows:

 

     2018   2017

Balance, January 1, net of reinsurance of $25,283 and $28,843

    $ 243,517     $ 240,280  

Incurred related to:

     

Current year

      38,844       53,969  

Prior year

      6,634       (6,728 ) 
  

 

 

 

  

 

 

 

Total incurred

      45,478       47,241  
  

 

 

 

  

 

 

 

Paid related to:

     

Current year

      (10,375 )      (6,896 ) 

Prior year

      (31,091 )      (37,108 ) 
  

 

 

 

  

 

 

 

Total paid

      (41,466 )      (44,004 ) 
  

 

 

 

  

 

 

 

Balance, December 31, net of reinsurance of $19,082 and $25,283

    $                     247,529     $                     243,517  
  

 

 

 

  

 

 

 

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

Reserves for incurred claims and claim adjustment expenses attributable to insured events of prior years has increased (decreased) by $6,634 and $(6,728) during the years ended December 31, 2018 and 2017, respectively. The change in both years is the result of ongoing analysis of recent claim development trends.

12. Commercial Paper

The Company has a commercial paper program that is partially supported by a $50,000 credit facility agreement. The commercial paper has been given a rating of A-1+ by Standard & Poor’s Ratings Services and a rating of P-1 by Moody’s Investors Service, each being the highest rating available. The Company’s issuance of commercial paper is not used to fund daily operations and does not have a significant impact on the Company’s liquidity.

The following table provides information regarding the Company’s commercial paper program:

 

     December 31,  
                 2018                              2017              

Face value

    $                         98,859      $                         99,886  

Carrying value

    $ 98,859      $ 99,886  

Interest expense paid

    $ 1,746      $ 974  

Effective interest rate

      2.5% - 2.7%        1.4% - 1.7%  

Maturity range (days)

      16 - 25        19 - 67  

13. Separate Accounts

The Company utilizes separate accounts to record and account for assets and liabilities for particular lines of business and/or transactions. The Company reported assets and liabilities from the following product lines into a separate account:

 

•  

Individual Annuity Product

•  

Group Annuity Product

•  

Variable Life Insurance Product

•  

Hybrid Ordinary Life Insurance Product

•  

Individual Indexed-Linked Annuity Product

In accordance with the domiciliary state procedures for approving items within the separate account, the separate account classification of the following items are supported by Colorado Insurance Code Section 10-7-402:

 

•  

Individual Annuity

•  

Group Annuity

•  

Variable Life Insurance Product

The following items are supported by direct approval by the Commissioner:

 

  •  

Hybrid Ordinary Life Insurance Product

  •  

Group Annuity - Custom Stable Value Asset Funds

  •  

Variable Life Insurance Product

  •  

Individual Indexed-Linked Annuity Product

The Company’s separate accounts invest in shares of Great-West Funds, Inc. and Putnam Funds, open-end management investment companies, which are related parties of the Company, and shares of other non-affiliated mutual funds. and government and corporate bonds.

Some assets within each of the Company’s separate accounts are considered legally insulated whereas others are not legally insulated from the general account. The legal insulation of the separate accounts prevents such assets from being generally available to satisfy claims resulting from the general account.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

At December 31, 2018 and 2017, the Company’s separate account assets that are legally insulated from the general account claims are $24,652,973 and $28,192,883, respectively.

Some separate account liabilities are guaranteed by the general account. In accordance with the guarantees provided, if the investment proceeds are insufficient to cover the rate of return guaranteed for the product, the policyholder proceeds will be remitted by the general account. To compensate the general account for the risk taken, the separate account has paid risk charges of $11,608, $12,581, $12,961, $12,542 and $12,171 for the years ended December 31, 2018, 2017, 2016, 2015 and 2014, respectively. No separate account guarantees were paid by the general account for the years ending December 31, 2018, 2017, 2016, 2015 and 2014, respectively.

Separate accounts with guarantees

The Government Guaranteed Funds are separate accounts investing in fixed income securities backed by the credit of the U.S. Government, its agencies or its instrumentalities.

The Stable Asset Funds invest in investment-grade corporate bonds in addition to the above mentioned securities.

The Company also has separate accounts comprised of assets underlying variable universal life policies issued privately to accredited investors. The accounts invest in investment grade fixed income securities.

The Individual Indexed-Linked Annuity Product provides returns based on the performance of one or more indices and invests in fixed income securities. The returns from these securities are invested in derivative instruments which mimic the returns of select indices. There is also a return of premium death benefit guarantee to policyholders.

The Government Guaranteed Funds and Stable Asset Funds have a guaranteed minimum crediting rate of at least 0%. All of the above separate accounts provide a book value guarantee. Some of them also provide a death benefit of the greater of account balance or premium paid.

Distributions to a participant are based on the participant’s account balance and are permitted for the purpose of paying a benefit to a participant. Distributions for purposes other than paying a benefit to a participant may be restricted. Participants’ distributions are based on the amount of their account balance, whereas, distributions as a result of termination of the group annuity contract are based on net assets attributable to the contract and can be made to the group through (1) transfer of the underlying securities and any remaining cash balance, or (2) transfer of the cash balance after sale of the Fund’s securities.

Most guaranteed separate account assets and related liabilities are carried at fair value. Certain separate account assets are carried at book value based on the prescribed deviation from the Division.

Non-guaranteed separate accounts

The non-guaranteed separate accounts include unit investment trusts or series accounts that invest in diversified open-end management investment companies. These separate account assets and related liabilities are carried at fair value.

The investments in shares are valued at the closing net asset value as determined by the appropriate fund/portfolio at the end of each day. The net investment experience of the separate account is credited directly to the policyholder and can be positive or negative. Some of the separate accounts provide an incidental death benefit of the greater of the policyholder’s account balance or premium paid and some provide an incidental annual withdrawal benefit for the life of the policyholder. Certain contracts contain provisions relating to a contingent deferred sales charge. In such contracts, charges will be made for total or partial surrender of a participant annuity account in excess of the “free amount” before the retirement date by a deduction from a participant’s account. The “free amount” is an amount equal to 10% of the participant account value at December 31 of the calendar year prior to the partial or total surrender.

The following tables provide information regarding the Company’s separate accounts:

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

     Year Ended December 31, 2018
     Non-indexed
guaranteed less
than/equal to 4%		    Non-guaranteed
separate account		    Total

 

Premiums, considerations or deposits

    $ 721,339      $ 1,900,171      $ 2,621,510  
  

 

 

 

   

 

 

 

   

 

 

 

Reserves

         

For accounts with assets at:

         

Fair value

    $ 7,286,636      $ 15,682,027      $ 22,968,663  

Amortized cost

      1,107,812        —        1,107,812  
  

 

 

 

   

 

 

 

   

 

 

 

Total reserves

    $         8,394,448      $ 15,682,027      $         24,076,475  
  

 

 

 

   

 

 

 

   

 

 

 

By withdrawal characteristics:

         

At fair value

    $ 7,286,636      $         15,682,027      $ 22,968,663  

At book value without fair value adjustment and with current surrender charge less than 5%

      1,107,812        —        1,107,812  
  

 

 

 

   

 

 

 

   

 

 

 

Total subject to discretionary withdrawals

    $ 8,394,448      $ 15,682,027      $ 24,076,475  
  

 

 

 

   

 

 

 

   

 

 

 

     Year Ended December 31, 2017
     Non-indexed
guaranteed less
than/equal to 4%		    Non-guaranteed
separate account		    Total

 

Premiums, considerations or deposits

    $ 560,537      $ 1,888,820      $ 2,449,357  
  

 

 

 

   

 

 

 

   

 

 

 

Reserves

         

For accounts with assets at:

         

Fair value

    $ 7,918,332      $ 18,643,242      $ 26,561,574  

Amortized cost

      958,780        —        958,780  
  

 

 

 

   

 

 

 

   

 

 

 

Total reserves

    $ 8,877,112      $ 18,643,242      $ 27,520,354  
  

 

 

 

   

 

 

 

   

 

 

 

By withdrawal characteristics:

         

At fair value

    $ 7,918,332      $ 18,643,242      $ 26,561,574  

At book value without fair value adjustment and with current surrender charge less than 5%

      958,780        —        958,780  
  

 

 

 

   

 

 

 

   

 

 

 

Total subject to discretionary withdrawals

    $ 8,877,112      $ 18,643,242      $ 27,520,354  
  

 

 

 

   

 

 

 

   

 

 

 

A reconciliation of the amounts transferred to and from the separate accounts is presented below:

 

     Year Ended December 31,
     2018   2017   2016

Transfers as reported in the Summary of Operations of the separate account statement:

       

Transfers to separate accounts

    $ 2,621,510     $ 2,449,357     $ 2,686,225  

Transfers from separate accounts

      (5,198,817 )      (4,417,525 )      (3,561,699 ) 
  

 

 

 

  

 

 

 

  

 

 

 

Net transfers from separate accounts

      (2,577,307 )      (1,968,168 )      (875,474 ) 

Reconciling adjustments:

       

Net transfer of reserves to separate accounts

      1,464,314       1,023,384       773,253  

Miscellaneous other

      528       140       739  
  

 

 

 

  

 

 

 

  

 

 

 

Net transfers as reported in the Statements of Operations

    $ (1,112,465 )    $ (944,644 )    $ (101,482 ) 
  

 

 

 

  

 

 

 

  

 

 

 

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

14.  Capital and Surplus, Dividend Restrictions, and Other Matters

On November 15, 2004, the Company issued a surplus note in the face amount of $195,000 to GWL&A Financial. The proceeds were used to redeem a $175,000 surplus note issued May 4, 1999 and for general corporate purposes. The new surplus note bears interest at the rate of 6.675% and is due November 14, 2034. The carrying amount of the surplus note was $194,558 and $194,530 at December 31, 2018 and 2017, respectively. Payments of principal and interest under this surplus note can be made only with prior written approval of the Commissioner of Insurance of the State of Colorado. Such payments are payable only out of surplus funds of the Company and only if at the time of such payment, and after giving effect to the making thereof, the financial condition of the Company is such that its surplus would not fall below two and one-half times the authorized control level as required by the most recent risk-based capital calculations. Subject to the foregoing restrictions on payment of principal and interest, (a) interest is payable on the principal sum of the surplus note semi-annually, in arrears, on May 14 and November 14 of each year, and (b) the surplus note may only be redeemed prior to its stated maturity in connection with (i) a mandatory redemption by the Company in the event of a redemption or acceleration by GWL&A Financial Inc., of its 6.675% junior subordinated deferrable debentures due November 14, 2034, or (ii) an optional redemption by the Company at any time on or after November 15, 2024. Interest paid on the note was $13,016 for all the years ended December 31, 2018, 2017 and 2016, respectively, bringing total interest paid from inception to December 31, 2018 to $182,227. The amount of unapproved principal and interest was $0 at December 31, 2018 and 2017.

On May 19, 2006, the Company issued a surplus note in the face amount and carrying amount of $333,400 to GWL&A Financial Inc. The proceeds were used for general corporate purposes. Initially, the surplus note bore interest at the rate of 7.203% per annum, and was payable on each May 16 and November 16 until May 16, 2016. After May 16, 2016, the surplus note bears an interest rate of 2.588% plus the then current three-month London Interbank Offering Rate. The carrying amount of the surplus note was $0 and $333,400 at December 31, 2018 and 2017. The surplus note became redeemable by the company at the principal amount plus any accrued and unpaid interest after May 16, 2016. On June 15, 2018, this surplus note was redeemed in full. Payments of principal and interest under the surplus note can be made only with prior written approval of the Commissioner of Insurance of the State of Colorado. Such payments are payable out of surplus funds of the Company and only if at the time of such payment, and after giving effect to the making thereof, the financial condition of the Company is such that its surplus would not fall below two and one-half times the authorized control level as required by the most recent risk-based capital calculations. Interest paid on the note was $6,868, $12,721 and $16,137 for the year ended December 31, 2018, 2017 and 2016, respectively, bringing total interest paid from inception to December 31, 2018 to $262,875. The amount of unapproved principal and interest was $0 at December 31, 2018 and 2017.

On December 29, 2017, the Company issued a surplus note in the face amount and carrying amount of $12,000 to GWL&A Financial Inc. The proceeds were used for general corporate purposes. The surplus note bears an interest rate of 3.5% per annum. The note matures of December 29, 2027. Payments of principal and interest under the surplus note can be made only with prior written approval of the Commissioner of Insurance of the State of Colorado. Such payments are payable out of surplus funds of the Company and only if at the time of such payment, and after giving effect to the making thereof, the financial condition of the Company is such that its surplus would not fall below two and one-half times the authorized control level as required by the most recent risk-based capital calculations. Interest paid on the note during 2018, 2017 and 2016 amounted to $420, $2 and $0, respectively, bringing total interest paid from inception to December 31, 2018 to $422. The amount of unapproved principal and interest was $0 at December 31, 2018.

On May 17, 2018, the Company issued a surplus note in the face amount and carrying amount of $346,218 to GWL&A Financial Inc. The proceeds were used to redeem the $333,400 surplus note issued in 2006 and for general corporate purposes. The surplus note bears an interest rate of 4.881% per annum. The note matures on May 17, 2048. Payments of principal and interest under the surplus note can be made only with prior written approval of the Commissioner of Insurance of the State of Colorado. Such payments are payable out of surplus funds of the Company and only if at the time of such payment, and after giving effect to the making thereof, the financial condition of the Company is such that its surplus would not fall below two and one-half times the authorized control level as required by the most recent risk-based capital calculations. Interest paid on the note during 2018 and 2017 amounted to $10,515 and $0, respectively, bringing total interest paid from inception to December 31, 2018 to $10,515 The amount of unapproved principal and interest was $0 at December 31, 2018.

In the first quarter of 2018, the Company realized a $39,921 after tax gain on an interest rate swap that hedged the existing $333,400 surplus note. The Company adjusted the basis of the hedged item, in this case the surplus note, for the amount of the after tax gain. Further, the Company accounted for the redemption of the $333,400 surplus note and the issuance of the $346,218 surplus note in the second quarter as debt modification instead of debt extinguishment. Therefore, the after tax swap

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

gain will be amortized into income over the 30 year life of the new surplus note. Amortization of the gain during 2018, 2017 and 2016 amounted to $998, $0 and $0, respectively bringing the total amortization from inception to December 31, 2018 amounted to $998, leaving an unamortized balance of $38,923 in surplus as part of the surplus note amounts.

Interest paid to GWL&A Financial attributable to these surplus notes, was $30,819, $25,739 and $29,153 for the years ended December 31, 2018, 2017 and 2016, respectively.

As an insurance company domiciled in the State of Colorado, the Company is required to maintain a minimum of $2,000 of capital and surplus. In addition, the maximum amount of dividends which can be paid to stockholders by insurance companies domiciled in the State of Colorado, without prior approval of the Insurance Commissioner, is subject to restrictions relating to statutory capital and surplus and statutory net gain from operations. The Company may pay an amount less than $132,692 of dividends during the year ended December 31, 2019, without the prior approval of the Colorado Insurance Commissioner. Prior to any payment of dividends, the Company provides notice to the Colorado Insurance Commissioner. Dividends are non-cumulative.

The Company paid cash dividends on common stock during 2018 as follows: $24,000 on March 30, 2018 (ordinary); $20,000 on May 1, 2018 (extraordinary); $55,895 on May 17, 2018 (extraordinary); $30,000 on September 28, 2018 (extraordinary) and $22,400 on September 29, 2018 (extraordinary). Dividends during 2017 were paid as follows: $77,000 on March 15, 2017 (extraordinary); $60,301 on June 15, 2017 (ordinary); and $8,000 on September 29, 2017 (ordinary). Dividends are paid as determined by the Board of Directors, subject to the limitations described above.

The portion of unassigned funds (surplus) represented or (reduced) by each of the following items is:

 

             December 31,        
             2018                   2017        

Unrealized gains (losses)

    $ 152,801     $ 165,416  

Non-admitted assets

      (330,803 )      (359,724 ) 

Asset valuation reserve

      (204,393 )      (203,546 ) 

Provision for reinsurance

      (17 )      (17 ) 

Separate account business

      (1,076 )      (868 ) 

Risk-based capital (“RBC”) is a regulatory tool for measuring the minimum amount of capital appropriate for a life, accident and health organization to support its overall business operations in consideration of its size and risk profile. The Division requires the Company to maintain minimum capital and surplus equal to the company action level as calculated in the RBC model. The Company exceeds the required amount.

15. Federal Income Taxes

The following table presents the components of the net admitted deferred tax asset (liability):

 

     December 31, 2018   December 31, 2017   Change
     Ordinary   Capital   Total   Ordinary   Capital   Total   Ordinary   Capital   Total

Gross deferred tax assets

    $ 368,917     $ 2,793     $ 371,710     $ 388,131     $ 16,580     $ 404,711     $ (19,214 )    $ (13,787 )    $ (33,001 ) 

Valuation allowance adjustment

      —       —       —       —       —       —       —       —       —  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Adjusted gross deferred tax asset

      368,917       2,793       371,710       388,131       16,580       404,711       (19,214 )      (13,787 )      (33,001 ) 

Deferred tax assets non-admitted

      (189,578 )      (570 )      (190,148 )      (228,728 )      (4,145 )      (232,873 )      39,150       3,575       42,725  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Net admitted deferred tax asset

      179,339       2,223       181,562       159,403       12,435       171,838       19,936       (10,212 )      9,724  

Gross deferred tax liabilities

      (31,065 )      —       (31,065 )      (22,523 )      —       (22,523 )      (8,542 )      —       (8,542 ) 
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Net admitted deferred tax asset

    $ 148,274     $ 2,223     $ 150,497     $ 136,880     $ 12,435     $ 149,315     $ 11,394     $ (10,212 )    $ 1,182  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

The Company admits deferred tax assets pursuant to paragraphs 11.a, 11.b.i, 11.b.ii, and 11.c, in SSAP No. 101. The following table presents the amount of deferred tax asset admitted under each component of SSAP No. 101:

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

     December 31, 2018      December 31, 2017      Change  
     Ordinary      Capital      Total      Ordinary      Capital      Total      Ordinary      Capital   Total

(a) Federal income taxes paid in prior years recoverable through loss carrybacks

    $ —      $ 2,224      $ 2,224      $ —      $ 3,884      $ 3,884      $ —      $ (1,660 )    $ (1,660 ) 

(b) Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets from (a) above) after application of the threshold limitation (lesser of (i) and (ii) below)

      148,274           148,274        136,880        8,551        145,431        11,394        (8,551 )      2,843  

(i) Adjusted gross deferred tax assets expected to be realized following the balance sheet date

      148,274           148,274        136,880        8,551        145,431        11,394        (8,551 )      2,843  

(ii) Adjusted gross deferred tax assets expected allowed per limitation threshold

            175,682              145,431        —        —       30,251  

(c) Adjusted gross deferred tax assets (excluding the amount of deferred tax assets from (a) and (b) above) offset by gross deferred tax liabilities

      31,065        —        31,065        22,523        —        22,523        8,542        —       8,542  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

  

 

 

 

Total deferred tax assets admitted as a result of the application of SSAP No. 101

    $ 179,339      $ 2,224      $ 181,563      $ 159,403      $ 12,435      $ 171,838      $ 19,936      $ (10,211 )    $ 9,725  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

  

 

 

 

The following table presents the threshold limitations utilized in the admissibility of deferred tax assets under paragraph 11.b of SSAP No. 101:

 

             2018                    2017        

Ratio percentage used to determine recovery period and threshold limitation amount

      867.76%        894.97%  

Amount of adjusted capital and surplus used to determine recovery period and threshold limitation

    $         1,171,212          $         969,537      

The following table presents the impact of tax planning strategies:

 

     December 31, 2018                     December 31, 2017   Change
         Ordinary           Capital           Ordinary           Capital           Ordinary           Capital    

Adjusted gross deferred tax asset

    $ 368,917     $ 2,793     $ 388,131     $ 16,580     $ (19,214 )    $ (13,787 ) 

% of adjusted gross deferred tax asset by character attributable to tax planning strategies

      — %      — %      — %      — %      — %      — % 

Net admitted adjusted gross deferred tax assets

    $ 179,339     $ 2,224     $ 159,403     $ 12,435     $ 19,936     $ (10,211 ) 

% of net admitted adjusted gross deferred tax asset by character attributable to tax planning strategies

      — %      — %      — %      — %      — %      — % 

The Company’s tax planning strategies do not include the use of reinsurance.

There are no temporary differences for which deferred tax liabilities are not recognized.

The components of current income taxes incurred include the following:

 

             Year Ended December 31,            
             2018                   2017                   Change        

Current income tax

    $ (17,604 )    $ 50,584     $ (68,188 ) 

Federal income tax on net capital gains

      1,030       (6,744 )      7,774  
  

 

 

 

  

 

 

 

  

 

 

 

Total

    $ (16,574 )    $ 43,840     $ (60,414 ) 
  

 

 

 

  

 

 

 

  

 

 

 

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

             Year Ended December 31,            
         2017           2016           Change    

Current income tax

    $ 50,584     $ (37,932 )    $ 88,516  

Federal income tax on net capital gains

      (6,744 )      16,117       (22,861 ) 
  

 

 

 

  

 

 

 

  

 

 

 

Total

    $ 43,840     $ (21,815 )    $ 65,655  
  

 

 

 

  

 

 

 

  

 

 

 

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

The tax effects of temporary differences, which give rise to the deferred income tax assets and liabilities are as follows:

 

     December 31,    

 Deferred income tax assets:

    2018   2017   Change

Ordinary:

       

Reserves

    $                     80,303     $                     65,831     $                     14,472  

Investments

      4,374       1,263       3,111  

Deferred acquisition costs

      76,759       77,369       (610 ) 

Provision for dividends

      3,399       4,593       (1,194 ) 

Fixed assets

      3,264       2,761       503  

Compensation and benefit accrual

      20,890       22,065       (1,175 ) 

Receivables - non-admitted

      13,991       12,737       1,254  

Tax credit carryforward

      131,409       168,567       (37,158 ) 

Other

      34,527       32,945       1,582  
  

 

 

 

  

 

 

 

  

 

 

 

Total ordinary gross deferred tax assets

      368,916       388,131       (19,215 ) 

Valuation allowance adjustment

      —       —       —  
  

 

 

 

  

 

 

 

  

 

 

 

Total adjusted ordinary gross deferred tax assets

      368,916       388,131       (19,215 ) 

Non-admitted ordinary deferred tax assets

      (189,578 )      (228,728 )      39,150  
  

 

 

 

  

 

 

 

  

 

 

 

Admitted ordinary deferred tax assets

      179,338       159,403       19,935  
  

 

 

 

  

 

 

 

  

 

 

 

Capital:

          —  

Investments

      2,793       16,580       (13,787 ) 
  

 

 

 

  

 

 

 

  

 

 

 

Total capital gross deferred tax assets

      2,793       16,580       (13,787 ) 

Valuation allowance adjustment

      —       —       —  
  

 

 

 

  

 

 

 

  

 

 

 

Total adjusted gross capital deferred tax assets

      2,793       16,580       (13,787 ) 

Non-admitted capital deferred tax assets

      (569 )      (4,145 )      3,576  
  

 

 

 

  

 

 

 

  

 

 

 

Admitted capital deferred tax assets

      2,224       12,435       (10,211 ) 
  

 

 

 

  

 

 

 

  

 

 

 

Total admitted deferred tax assets

    $ 181,562     $ 171,838     $ 9,724  
  

 

 

 

  

 

 

 

  

 

 

 

Deferred income tax liabilities:

       

Ordinary:

       

Investments

    $ —     $ (4,501 )    $ 4,501  

Premium receivable

      (5,417 )      (3,343 )      (2,074 ) 

Policyholder Reserves

      (17,644 )      (10,033 )      (7,611 ) 

Experience Refunds

      (5,079 )      —       (5,079 ) 

Other

      (2,925 )      (4,646 )      1,721  
  

 

 

 

  

 

 

 

  

 

 

 

Total ordinary deferred tax liabilities

      (31,065 )      (22,523 )      (8,542 ) 
  

 

 

 

  

 

 

 

  

 

 

 

Net admitted deferred income tax asset

    $ 150,497     $ 149,315     $ 1,182  
  

 

 

 

  

 

 

 

  

 

 

 

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

The change in deferred income taxes reported in surplus before consideration of non-admitted assets is comprised of the following components:

 

     December 31,  

 

    

    2018   2017   Change

Total deferred income tax assets

    $ 371,710     $ 404,711     $ (33,001 ) 

Total deferred income tax liabilities

      (31,065 )      (22,523 )      (8,542 ) 
  

 

 

 

  

 

 

 

  

 

 

 

Net deferred income tax asset

    $                     340,645     $                     382,188       (41,543 ) 
  

 

 

 

  

 

 

 

  

Tax effect of unrealized capital gains (losses)

          (260 ) 

Other surplus

                              1,071  

Change in net deferred income tax

        $ (40,732 ) 
      

 

 

 

     December 31,  

 

    

    2017   2016   Change

Total deferred income tax assets

    $ 404,711     $ 521,431     $ (116,720 ) 

Total deferred income tax liabilities

      (22,523 )      (20,681 )      (1,842 ) 
  

 

 

 

  

 

 

 

  

 

 

 

Net deferred income tax asset

    $ 382,188     $ 500,750       (118,562 ) 
  

 

 

 

  

 

 

 

  

Tax effect of unrealized capital gains (losses)

          6,427  

Other surplus

          1,607  
      

 

 

 

Change in net deferred income tax

        $ (110,528 ) 
      

 

 

 

The provision for federal income taxes and change in deferred income taxes differ from that which would be obtained by applying the statutory federal income tax rate of 21% and 35% to income before income taxes. The significant items causing this difference are as follows:

 

     December 31,
     2018   2017   2016

Income tax expense at statutory rate

    $                 60,337     $                 77,023     $             22,425  

Federal tax rate change

      —       132,029       —  

Earnings from subsidiaries

      (22,003 )      (28,875 )      (35,175 ) 

Swap gain on debt refinancing

      8,175       —       —  

Dividend received deduction

      (6,657 )      (7,992 )      (7,302 ) 

Tax adjustment for interest maintenance reserve

      (5,221 )      (7,716 )      (8,138 ) 

Prior year adjustment

      (4,124 )      (1,881 )      (2,032 ) 

Tax effect on non-admitted assets

      (3,476 )      2,291       (1,111 ) 

Tax credits

      (2,901 )      (908 )      (21,212 ) 

Income tax (benefit) on realized capital gain (loss)

      1,030       (6,744 )      16,117  

Tax contingency

      (607 )      359       (99 ) 

Other

      (395 )      (3,219 )      (1,893 ) 
  

 

 

 

  

 

 

 

  

 

 

 

Total

    $ 24,158     $ 154,367     $ (38,420 ) 
  

 

 

 

  

 

 

 

  

 

 

 

      
  

 

 

 

     2018   2017   2016

Federal income taxes incurred

    $ (16,574 )    $ 43,839     $ (21,815 ) 

Change in net deferred income taxes

      40,732       110,528       (16,605 ) 
  

 

 

 

  

 

 

 

  

 

 

 

Total income taxes

    $ 24,158     $ 154,367     $ (38,420 ) 
  

 

 

 

  

 

 

 

  

 

 

 

On December 22, 2017, H.R. 1, the Tax Cuts and Jobs Act (the “Act”), was enacted. The legislation, which is generally effective for tax years beginning on January 1, 2018, represented significant U.S. tax reform and revised the Internal Revenue Code by, among other items, lowering the federal corporate income tax rate from 35% to 21% and modifying how the U.S.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

taxes multinational entities. Further, the Act changed how tax basis policy reserves, capitalized specified policy acquisition expenses, and the company’s share of the dividends received deduction and tax exempt interest are to be calculated.

Shortly after enactment, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (“SAB 118”) which provided US GAAP guidance on the accounting for the Act’s impact at December 31, 2017. A reporting entity could recognize provisional amounts, where the necessary information was not available, prepared or analyzed (including computations) in reasonable detail or where additional guidance was needed from the taxing authority to determine the appropriate application of the Act. A reporting entity’s provisional impact analysis was to be adjusted within the 12 month measurement period provided for under SAB 118. The Statutory Accounting Working Group subsequently provided informal interpretative guidance allowing for statutory accounting conformity with the SAB 118 US GAAP guidance.

The Company’s accounting for the income tax effects of the Act is complete as of the period ended December 31, 2018, and no material measurement period adjustments were recognized during the 2018 reporting period.

As of December 31, 2018, the Company had no operating loss carryforwards.

As of December 31, 2018, the Company has Guaranteed Federal Low Income Housing tax credit carryforwards of $111,328. These credits will begin to expire in 2030.

As of December 31, 2018, the Company has foreign tax credit carryforwards of $20,082. These credits will begin to expire in 2020.

The following are income taxes incurred in prior years that will be available for recoupment in the event of future net losses:

 

Year Ended December 31, 2018

    $               4,146  

Year Ended December 31, 2017

      13,328  

The Company has no deposits admitted under Section 6603 of the Internal Revenue Code.

The Company’s federal income tax return is consolidated with the following entities (the “U.S. Consolidated Group”):

Great-West Lifeco U.S. LLC

Emjay Corporation

GWFS Equities, Inc.

GWL&A Financial Inc.

Great-West Life & Annuity Insurance Company of South Carolina

Great-West Life & Annuity Insurance Company of New York

Putnam Investments, LLC

Putnam Acquisition Financing, Inc.

Putnam Retail Management, LP

Putnam Retail Management GP, Inc.

Putnam Advisory Company, LLC

Putnam Advisory Holdings, LLC

Putnam Fiduciary Trust Company

Putnam Investor Services, Inc.

PanAgora Holdings, Inc

PanAgora Asset Management, Inc.

Putnam Advisory Holdings II, LLC

FASCore, LLC

Advised Assets Group, LLC

Great-West Trust Company, LLC

Great-West Capital Management, LLC

The Company, GWL&A NY and GWSC (“GWLA Subgroup”) are life insurance companies who form a life subgroup under the consolidated return regulations. These regulations determine whether the taxable income or losses of this subgroup may offset or be offset with the taxable income or losses of other non-life entities.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

The GWLA Subgroup accounts for income taxes on the modified separate return method on each of their separate company, statutory financial statements. Under this method, current and deferred tax expense or benefit is determined on a standalone basis; however the Company also considers taxable income or losses from other members of the GWLA Subgroup when determining its deferred tax assets and liabilities, and in evaluating the realizability of its deferred tax assets.

The method of settling income tax payables and receivables (“Tax Sharing Agreement”) among the U.S. consolidated group is subject to a written agreement approved by the Board of Directors, whereby settlement is made on a separate return basis (i.e., the amount that would be due to or from a jurisdiction had an actual separate return been filed) except for the current utilization of any net operating losses and other tax attributes by members of the U.S. Consolidated Group, which can lead to receiving a payment when none would be received from the jurisdiction had a real separate tax return been required. The GWLA Subgroup has a policy of settling intercompany balances as soon as practical after the filing of the federal consolidated return or receipt of the income tax refund from the Internal Revenue Service (“I.R.S.”).

The Company determines income tax contingencies in accordance with Statement of Statutory Accounting Principles No. 5R, Liabilities, Contingencies and Impairments of Assets (“SSAP No. 5R”) as modified by SSAP 101. As of December 31, 2018 the amount of tax contingencies computed in accordance with SSAP No. 5R is $0, with the exception of interest and penalties. The Company does not expect a significant increase in tax contingencies within the 12 month period following the balance sheet date.

The Company recognizes accrued interest and penalties related to tax contingencies in current income tax expense. During the years ended December 31, 2018 and 2017, the Company recognized approximately $607 and $359 of benefit and expense, respectively, from interest and penalties related to the uncertain tax positions. The Company had $314 and $921 accrued for the payment of interest and penalties at December 31, 2018 and 2017, respectively.

The Company files income tax returns in the U.S. federal jurisdiction and various states. With few exceptions, the Company is no longer subject to U.S. federal income tax examinations by the I.R.S. for years 2014 and prior. Tax years 2015 through 2017 are open to federal examination by the I.R.S. The Company does not expect significant increases or decreases to tax contingencies relating to federal, state or local audits.

The Company does not have any outstanding AMT credits as of the filing of the 2017 tax return.

The Company does not have any foreign operations as of the periods ended December 31, 2017 and December 31, 2018 and therefore is not subject to the Repatriation Transition Tax or the tax on Global Intangible Low-Taxed Income.

16. Employee Benefit Plans

Post-Retirement Medical and Supplemental Executive Retirement Plans

The Company sponsors an unfunded Post-Retirement Medical Plan (the “Medical Plan”) that provides health benefits to retired employees who are not Medicare eligible. The Medical Plan is contributory and contains other cost sharing features which may be adjusted annually for the expected general inflation rate. The Company’s policy is to fund the cost of the Medical Plan benefits in amounts determined at the discretion of management.

The Company also provides Supplemental Executive Retirement Plans to certain key executives. These plans provide key executives with certain benefits upon retirement, disability or death based upon total compensation. The Company has purchased individual life insurance policies with respect to employees covered by these plans. The Company is the owner and beneficiary of the insurance contracts.

A December 31 measurement date is used for the employee benefit plans.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

The following tables provide a reconciliation of the changes in the benefit obligations, fair value of plan assets and the underfunded status for the Company’s Post-Retirement Medical and Supplemental Executive Retirement plans:

 

     Post-Retirement
Medical Plan		   Supplemental Executive
Retirement Plan		   Total
     Year Ended December 31,   Year Ended December 31,   Year Ended December 31,
     2018   2017   2018   2017   2018   2017

Change in projected benefit obligation:

             

Benefit obligation, January 1

    $ 19,329     $ 19,031     $ 40,921     $ 44,501     $ 60,250     $ 63,532  

Service cost

      1,425       1,457       —       (16 )      1,425       1,441  

Interest cost

      703       758       1,357       1,620       2,060       2,378  

Actuarial (gain) loss

      (1,511 )      (1,216 )      (2,316 )      (1,872 )      (3,827 )      (3,088 ) 

Regular benefits paid

      (407 )      (701 )      (2,400 )      (3,336 )      (2,807 )      (4,037 ) 

Amendment

      —       —       —       24       —       24  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Benefit obligation and under funded status, December 31

    $ 19,539     $ 19,329     $ 37,562     $ 40,921     $ 57,101     $ 60,250  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Accumulated benefit obligation

    $           19,539     $           19,329     $           37,562     $           40,921     $           57,101     $           60,250  
     Post-Retirement
Medical Plan		   Supplemental Executive
Retirement Plan		   Total
     Year Ended December 31,   Year Ended December 31,   Year Ended December 31,
     2018   2017   2018   2017   2018   2017

Change in plan assets:

             

Value of plan assets, January 1

    $ —     $ —     $ —     $ —     $ —     $ —  

Employer contributions

      407       701       2,400       3,337       2,807       4,038  

Regular benefits paid

      (407 )      (701 )      (2,400 )      (3,337 )      (2,807 )      (4,038 ) 
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Value of plan assets, December 31

    $ —     $ —     $ —     $ —     $ —     $ —  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

The following table presents amounts recognized in the Statutory Statements of Admitted Assets, Liabilities, Capital and Surplus for the Company’s Post-Retirement Medical and Supplemental Executive Retirement plans:

 

     Post-Retirement
Medical Plan		   Supplemental Executive
Retirement Plan		   Total
     December 31,   December 31,   December 31,
     2018   2017   2018   2017   2018   2017

Amounts recognized in the statutory statements of admitted assets, liabilities, capital and surplus:

             

Accrued benefit liability

    $ (20,534 )    $ (18,078 )    $ (40,091 )    $ (40,855 )    $ (60,625 )    $ (58,933 ) 

Liability for pension benefits

      995       (1,251 )      2,529       (66 )      3,524       (1,317 ) 
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Total other liabilities

    $ (19,539 )    $ (19,329 )    $ (37,562 )    $ (40,921 )    $ (57,101 )    $ (60,250 ) 
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Unassigned surplus (deficit)

    $                 995     $         (1,251 )    $             2,529     $                 (66 )    $             3,524     $          (1,317 ) 

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

The following table presents amounts not yet recognized in the statements of financial position for the Company’s Post-Retirement Medical and Supplemental Executive Retirement plans:

 

     Post-Retirement
Medical Plan		   Supplemental Executive
Retirement Plan		   Total
     December 31,   December 31,   December 31,
     2018   2017   2018   2017   2018   2017

Unrecognized net actuarial gain (loss)

    $             5,152     $             3,723     $             3,428     $             1,157     $             8,580     $             4,880  

Unrecognized prior service cost

      (4,157 )      (4,974 )      (899 )      (1,223 )      (5,056 )      (6,197 ) 

The following table presents amounts in unassigned funds recognized as components of net periodic benefit cost for the Company’s Post-Retirement Medical and Supplemental Executive Retirement plans:

 

     Post-Retirement
Medical Plan		   Supplemental Executive
Retirement Plan		   Total
     Year Ended December 31,   Year Ended December 31,   Year Ended December 31,
     2018   2017   2018   2017   2018   2017

Items not yet recognized as component of net periodic cost on January 1,

    $ (1,251 )    $ (3,021 )    $ (66 )    $ (2,360 )    $ (1,317 )    $ (5,381 ) 

Prior service cost recognized in net periodic cost

      817       587       324       501       1,141       1,088  

(Gain) loss recognized in net periodic cost

      (82 )      (33 )      (45 )      (54 )      (127 )      (87 ) 

Gain (loss) arising during the year

                  1,511                   1,216                   2,316                       1,847                   3,827                   3,063  
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Items not yet recognized as component of net periodic cost on December 31

    $ 995     $ (1,251 )    $ 2,529     $ (66 )    $ 3,524     $ (1,317 ) 
  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

The following table provides information regarding amounts in unassigned funds that are expected to be recognized as components of net periodic benefit costs during the year ended December 31, 2019:

 

     Post-Retirement
Medical Plan		   Supplemental
Executive
Retirement Plan		   Total

Net actuarial gain

    $                         217     $                         50     $                         267  

Prior service cost

      (817 )      (300 )      (1,117 ) 

The expected benefit payments for the Company’s Post-Retirement Medical and Supplemental Executive Retirement plans for the years indicated are as follows:

 

     2019      2020      2021      2022      2023      2024
through
2028		  

Post-retirement medical plan

    $                 961      $                 959      $             1,054      $             1,123      $             1,234      $             7,119  

Supplemental executive retirement plan

      2,347        2,530        2,473        10,206        5,701        9,085  

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

The following table presents the components of net periodic cost (benefit):

 

    

Post-Retirement

Medical Plan

       

Supplemental Executive

Retirement Plan

        Total
     Year Ended December 31,        Year Ended December 31,        Year Ended December 31,
     2018        2017   2016        2018        2017   2016        2018        2017   2016

Components of net periodic cost (benefit):

                                  

Service cost

    $     1,425        $     1,457     $     1,246        $ —        $ (16 )    $ 294        $ 1,425        $ 1,441     $ 1,540  

Interest cost

      703          758       713          1,356          1,620       1,775          2,059          2,378       2,488  

Amortization of unrecognized prior service cost

      817          587       150          324          501       501          1,141          1,088       651  

Amortization of gain from prior periods

      (82 )         (33 )      (137 )         (45 )         (54 )      (61 )         (127 )         (87 )      (198 ) 

Net periodic cost

    $     2,863        $     2,769     $     1,972        $     1,635        $     2,051     $     2,509        $     4,498        $     4,820     $     4,481  
                                                                                       

The following tables present the assumptions used in determining benefit obligations of the Post-Retirement Medical and the Supplemental Executive Retirement plans at December 31, 2018 and 2017:

 

    Post-Retirement Medical Plan
    December 31,
    2018       2017

Discount rate

   4.34%     3.63%

Initial health care cost trend

   6.25%     6.50%

Ultimate health care cost trend

   5.00%     5.00%

Year ultimate trend is reached

   2024     2024
    Supplemental Executive Retirement Plan
    December 31,
    2018       2017

Discount rate

   4.16%     3.43%

Rate of compensation increase

   N/A     4.00%

During 2018, the Company adopted the Society of Actuaries Morality Improvement Scale (MP-2018).

During 2017, the Company adopted the Society of Actuaries Morality Improvement Scale (MP-2017).

The following tables present the weighted average interest rate assumptions used in determining the net periodic benefit/cost of the Post-Retirement Medical and the Supplemental Executive Retirement plans:

 

            Post-Retirement Medical Plan         
    Year Ended December 31,
    2018       2017

Discount rate

   3.63%     4.05%

Initial health care cost trend

   6.50%     6.75%

Ultimate health care cost trend

   5.00%     5.00%

Year ultimate trend is reached

   2024     2024

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

     Supplemental Executive Retirement Plan  
     Year Ended December 31,
     2018        2017

Discount rate

    3.43%      3.80%

Rate of compensation increase

    4.00%      4.00%

The discount rate has been set based on the rates of return on high-quality fixed-income investments currently available and expected to be available during the period the benefits will be paid. In particular, the yields on bonds rated AA or better on the measurement date have been used to set the discount rate.

The following table presents the impact on the Post-Retirement Medical Plan that one-percentage-point change in assumed health care cost trend rates would have on the following:

 

    One percentage
    point increase    		     One percentage
    point decrease    		  
 

 

 

  

Increase (decrease) on total service and interest cost on  components

   $                     357     $ (297)  

Increase (decrease) on post-retirement benefit obligations

     2,417       (2,075)  

Beginning December 31, 2012, the Company began participation in the pension plan sponsored by GWL&A Financial. During 2017, that plan froze all future benefit accruals for pension-eligible participants as of December 31, 2017. The Company’s share of net expense for the pension plan was $3,057, $0 and $0 during the years ended December 31, 2018, 2017 and 2016.

In August 2017, the Company filed an application for a compliance statement from the IRS under their Voluntary Correction Program with respect to operational matters under the pension plan. The IRS issued a compliance statement approving the Company’s request in November 2018. The corrective measure will result in a payment of approximately $7 million to the plan in 2019.

The Company offers unfunded, non-qualified deferred compensation plans to a select group of executives, management and highly compensated individuals. Participants defer a portion of their compensation and realize potential market gains / losses or interest on the amount deferred. The programs are not qualified under Section 401 of the Internal Revenue Code. Participant balances, which are included in Amounts withheld or retained by company as agent or trustee in the accompanying statutory financial statements, are $35,588 and $33,454 at December 31, 2018 and 2017, respectively.

The Company sponsors a qualified defined contribution benefit plan covering all employees. Under this plan, employees may contribute a percentage of their annual compensation to the plan up to certain maximums, as defined by the plan and by the Internal Revenue Service (“IRS”). Currently, the Company matches a percentage of employee contributions in cash. The Company recognized $11,935, $8,713 and $7,275 in expense related to this plan for the years ended December  31, 2018, 2017 and 2016, respectively.

17. Share-Based Compensation

Equity Awards

Lifeco, of which the Company is an indirect wholly-owned subsidiary, maintains the Great-West Lifeco Inc. Stock Option Plan (the “Lifeco plan”) that provides for the granting of options on its common shares to certain of its officers and employees and those of its subsidiaries, including the Company. Options are granted with exercise prices not less than the average market price of the shares on the five days preceding the date of the grant. The Lifeco plan provides for the granting of options with varying terms and vesting requirements with vesting commencing on the first anniversary of the grant, exercisable within 10 years from the date of grant. Compensation expense is recognized in the Company’s financial statements over the vesting period of these stock options using the accelerated method of recognition.

Termination of employment prior to the vesting of the options results in the forfeiture of the unvested options, unless otherwise determined by the Human Resources Committee. At its discretion, the Human Resources Committee may vest the unvested options of retiring option holders, with the options exercisable within five years from the date of retirement. In such event, the Company

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

accelerates the recognition period to the date of retirement for any unrecognized share-based compensation cost related thereto and recognizes it in its earnings at that time.

Liability Awards

The Company maintains a Performance Share Unit Plan (“PSU plan”) for officers and employees of the Company. Under the PSU plan, “performance share units” are granted to certain of its officers and employees of the Company. Each performance unit has a value equal to one share of Lifeco common stock and is subject to adjustment for cash dividends paid to Lifeco stockholders, Company earnings results as well as stock dividends and splits, consolidations and the like that affect shares of Lifeco common stock outstanding.

If the performance share units vest, they are payable in cash equal to the average closing price of Lifeco common stock for the 20 trading days prior to the date following the last day of the three-year performance period. The estimated fair value of the performance unit is based on the average closing price of Lifeco common stock for the 20 trading days prior to the grant. The performance share units generally vest in their entirety at the end of the three years performance period based on continued service. The PSU plan contains a provision that permits all unvested performance share units to become vested upon death or retirement. Changes in the fair value of the performance share units that occur during the vesting period is recognized as compensation cost over that period.

Performance share units are settled in cash and are recorded as liabilities until payout is made. Unlike share-settled awards, which have a fixed grant-date fair value, the fair value of unsettled or unvested liabilities awards is remeasured at the end of each reporting period based on the change in fair value of one share of Lifeco common stock. The liability and corresponding expense are adjusted accordingly until the award is settled.

Compensation Expense Related to Share-Based Compensation

The compensation expense related to share-based compensation was as follows:

 

                     Year Ended December 31,                   
  

 

 

  
     2018      2017      2016  
  

 

 

     

 

 

  

Lifeco Stock Plan

    $ 768      $         1,451      $         2,113  

Performance Share Unit Plan

      5,388        7,207        5,318  
  

 

 

     

 

 

  

Total compensation expense

    $         6,156      $ 8,658      $ 7,431  
  

 

 

     

 

 

  

Income tax benefits

    $ 1,243      $ 2,831      $ 2,445  

During the year ended December 31, 2018, 2017 and 2016, the Company had $26, $769 and $555 respectively, income tax benefits realized from stock options exercised.

The following table presents the total unrecognized compensation expense related to share-based compensation at December 31, 2018 and the expected weighted average period over which these expenses will be recognized:

 

                 Expense                  Weighted average
      period (years)      		  
  

 

 

     

 

 

  

Lifeco Stock Plan

    $ 819        1.6  

Performance Share Unit Plan

      8,403        1.4  

Equity Award Activity

During the year ended December 31, 2018, Lifeco granted 473,400 stock options to employees of the Company. These stock options vest over five-year periods ending in 2023. Compensation expense of $448 will be recognized in the Company’s financial statements over the vesting period of these stock options using the accelerated method of recognition.

 

55

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

The following table summarizes the status of, and changes in, the Lifeco plan options granted to Company employees which are outstanding. The options granted relate to underlying stock traded in Canadian dollars on the Toronto Stock Exchange; therefore, the amounts, which are presented in United States dollars, will fluctuate as a result of exchange rate fluctuations.

 

                  Weighted average          
   

 

 

  
    Shares under
      option      		     Exercise price
    (Whole dollars)    		     Remaining
contractual
    term (Years)    		   Aggregate
    intrinsic value (1)    		  
 

 

 

    

 

 

    

 

  

 

 

  

Outstanding, January 1, 2018

     3,446,975     $ 24.88      

Granted

     473,400       25.15      

Exercised

     (114,589 )      21.06      

Cancelled and expired

     (156,000 )      24.54      
 

 

 

        

Outstanding, December 31, 2018

                 3,649,786       23.32     5.9   $ 2,339  
 

 

 

        

Vested and expected to vest, December 31, 2018

     3,649,786       23.32     5.9     2,144  

Exercisable, December 31, 2018

     2,323,353       21.95     4.7     2,144  

(1) The aggregate intrinsic value is calculated as the difference between the market price of Lifeco common shares on December 31, 2018 and the exercise price of the option (only if the result is positive) multiplied by the number of options.

The following table presents additional information regarding stock options under the Lifeco plan:

 

                     Year Ended December 31,                   
  

 

 

  
         2018              2017              2016      
  

 

 

     

 

 

     

 

 

  

Weighted average fair value of options granted

    $ 0.95      $ 2.75      $ 2.74  

Intrinsic value of options exercised (1)

      345        2,869        2,102  

Fair value of options vested

      1,115        2,203        1,605  

(1) The intrinsic value of options exercised is calculated as the difference between the market price of Lifeco common shares on the date of exercise and the exercise price of the option multiplied by the number of options exercised.

The fair value of the options granted during the years ended December 31, 2018, 2017 and 2016 was estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

 

                     Year Ended December 31,                   
  

 

 

  
         2018             2017             2016      
  

 

 

    

 

 

    

 

 

  

Dividend yield

      4.55 %      3.98 %      3.99 % 

Expected volatility

      9.01 %      13.99 %      19.03 % 

Risk free interest rate

      2.03 %      1.25 %      0.80 % 

Expected duration (years)

      6.0       6.0       6.0  

Liability Award Activity

The following table summarizes the status of, and changes in, the Performance Share Unit Plan units granted to Company employees which are outstanding:

 

         Performance Units    
  

 

 

 

Outstanding, January 1, 2018

      681,510  

Granted

      405,464  

Forfeited

      (18,397 ) 

Paid

      (157,510 ) 
  

 

 

 

Outstanding, December 31, 2018

                      911,067  
  

 

 

 

Vested and expected to vest, December 31, 2018

      911,067  

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

The cash payment in settlement of the Performance Share Unit Plan units was $4,104, $3,398 and $3,988 for the years ended December 31, 2018, 2017 and 2016, respectively.

 

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GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

18. Participating Insurance

Individual life insurance premiums paid, net of reinsurance, under individual life insurance participating policies were 1%, 6%, and (2)% of total individual life insurance premiums earned during the years ended December 31, 2018, 2017 and 2016 respectively. The Company accounts for its policyholder dividends based upon the three-factor formula. The Company paid dividends in the amount of $31,276, $38,782 and $45,842 to its policyholders during the years ended December  31, 2018, 2017 and 2016, respectively.

19. Concentrations

No customer accounted for 10% or more of the Company’s revenues during the year ended December 31, 2018. In addition, neither Individual Markets nor Empower Retirement is dependent upon a single customer or a few customers. The loss of business from any one, or a few, independent brokers or agents would not have a material adverse effect on the Company or any of its business agents.

20. Commitments and Contingencies

Future Contractual Obligations

The following table summarizes the Company’s estimated future contractual obligations:

 

     Payment due by period

                                                 

    2019    2020    2021    2022    2023    Thereafter    Total

Surplus notes - principal (1)

    $ —      $ —      $ —      $ —      $ —      $ 553,219      $ 553,219  

Surplus notes - interest (2)

      30,335        30,335        30,335        30,335        30,335        557,094        708,769  

Investment purchase obligations (3)

      136,396        —        —        —        —        —        136,396  

Operating leases (4)

      9,929        7,844        3,717        1,235        1,037        11,743        35,505  

Other liabilities (5)

      23,334        26,774        12,695        19,579        6,935        16,204        105,521  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

Total

    $       199,994      $       64,953      $       46,747      $       51,149      $       38,307      $       1,138,260      $       1,539,410  
  

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

(1) Surplus notes principal - Represents contractual maturities of principal due to the Company’s parent, GWL&A Financial, under the terms of three long-term surplus notes. The amounts shown in this table differ from the amounts included in the Company’s Statement of Admitted Assets, Liabilities, Capital and Surplus because the amounts shown above do not consider the discount upon the issuance of one of the surplus notes.

(2) Surplus notes interest - One long-term surplus note bears interest at a fixed rate through maturity. The second surplus note bore interest initially at a fixed rate but changed during 2016 to be based upon the current three-month London Interbank Offering Rate in addition to a spread. The third long-term surplus note bears interest at a fixed rate through maturity. The interest payments shown in this table are calculated based upon the contractual rates in effect on December 31, 2018 and do not consider the impact of future interest rate changes.

(3) Investment purchase obligations - The Company makes commitments to fund partnership interests, mortgage loans, and other investments in the normal course of its business. As the timing of the fulfillment of the commitment to fund partnership interests cannot be predicted, such obligations are presented in the less than one year category. The timing of the funding of mortgage loans is based on the expiration date of the commitment. The amounts of these unfunded commitments at December 31, 2018 and 2017 were $136,396 and $313,242, of which $104,286 and $114,726 were related to cost basis limited partnership interests, respectively. All unfunded commitments at December 31, 2018 were due within one year. At December 31, 2017, $312,152 is due within one year, and $1,090 is due within one to three years.

(4) Operating leases - The Company is obligated to make payments under various non-cancelable operating leases, primarily for office space. Contractual provisions exist that could increase the lease obligations presented, including operating expense escalation clauses. Management does not consider the impact of any such clauses to be material to the Company’s operating lease obligations. Rent expense for the years ended December 31, 2018, 2017 and 2016 were $27,768, $28,244 and $27,815 respectively.

 

58

Table of Contents

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

From time to time, the Company enters into agreements or contracts, including capital leases, to purchase goods or services in the normal course of its business. However, these agreements and contracts are not material and are excluded from the table above.

(5)    Other liabilities - Other liabilities include those other liabilities which represent contractual obligations not included elsewhere in the table above. If the timing of the payment of any other liabilities was sufficiently uncertain, the amounts were included in the less than one year category. Other liabilities presented in the table above include:

 

•  

Expected benefit payments for the Company’s post-retirement medical plan and supplemental executive retirement plan through 2027

•  

Unrecognized tax benefits

•  

Miscellaneous purchase obligations to acquire goods and services

The Company has a revolving credit facility agreement in the amount of $50,000 for general corporate purposes. The credit facility expired on March 1, 2018 and was replaced with a revolving credit facility agreement in the amount of $50,000 with an expiration date of March 1, 2023. Interest accrues at a rate dependent on various conditions and terms of borrowings. The agreement requires, among other things, the Company to maintain a minimum adjusted net worth, of $1,022,680, as defined in the credit facility agreement (compiled on the unconsolidated statutory accounting basis prescribed by the NAIC), at any time. The Company was in compliance with all covenants at December 31, 2018 and 2017. At December 31, 2018 and 2017 there were no outstanding amounts related to the current and prior credit facilities.

In addition, the Company has other letters of credit with a total amount of $9,095, renewable annually for an indefinite period of time. At December 31, 2018 and 2017, there were no outstanding amounts related to those letters of credit.

Contingencies

From time to time, the Company may be threatened with, or named as a defendant in, lawsuits, arbitrations, and administrative claims. Any such claims that are decided against the Company could harm the Company’s business. The Company is also subject to periodic regulatory audits and inspections which could result in fines or other disciplinary actions. Unfavorable outcomes in such matters may result in a material impact on the Company’s financial position, results of operations, or cash flows.

The Company is defending lawsuits relating to the costs and features of certain of its retirement or fund products. Management believes the claims are without merit and will defend these actions. Based on the information known, these actions will not have a material adverse effect on the financial position of the Company.

The Company is involved in other various legal proceedings that arise in the ordinary course of its business. In the opinion of management, after consultation with counsel, the likelihood of loss from the resolution of these proceedings is remote and/or the estimated loss is not expected to have a material effect on the Company’s financial position, results of its operations, or cash flows.

The Company and GWL&A NY have an agreement whereby the Company has committed to provide financial support to GWL&A NY related to the maintenance of adequate regulatory surplus and liquidity. The Company is obligated to invest in shares of GWL&A NY in order for GWL&A NY to maintain the capital and surplus at the greater of 1) $6,000, 2) 200% of GWL&A NY RBC minimum capital requirements if GWL&A NY total assets are less than $3,000,000 or 3) 175% of GWL&A NY RBC minimum capital requirements if GWL&A NY total assets are $3,000,000 or more. There is no limitation on the maximum potential future payments under the guarantee. The Company has no liability at December 31, 2018 and 2017 for obligations under the guarantee.

21.  Subsequent Events

Management has evaluated subsequent events for potential recognition or disclosure in the Company’s statutory financial statements through March 12, 2019, the date on which they were issued.

On January 24, 2019, the Company announced that it had entered into an agreement with Protective Life Insurance Company (“Protective”) to sell, via indemnity reinsurance, substantially all of its non-participating individual life insurance and annuity

 

59

Table of Contents

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Notes to Statutory Financial Statements

(In Thousands, Except Share Amounts)

 

business and group life and health business. The transaction is in its initial stage, and is expected to close in the first half of 2019 subject to regulatory and customary closing conditions. On the closing date of the proposed transaction, the Company will transfer to Protective assets equal to the statutory liabilities being reinsured and will receive a ceding commission (subject to post-closing adjustments) from Protective in consideration of the transferred business.

 

60

Table of Contents

COLI VUL-2 Series Account

of Great-West Life & Annuity

Insurance Company

Annual Statement for the Year Ended

December 31, 2018 and Report of Independent

Registered Public Accounting Firm

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
            ALGER SMALL    
CAP GROWTH
PORTFOLIO		       AMERICAN
CENTURY
INVESTMENTS
VP CAPITAL
  APPRECIATION  
FUND		       AMERICAN
CENTURY
INVESTMENTS
VP INCOME &
  GROWTH FUND  		       AMERICAN
CENTURY
  INVESTMENTS  
VP INFLATION
PROTECTION
FUND		       AMERICAN
CENTURY
INVESTMENTS
VP
  INTERNATIONAL  
FUND		         AMERICAN
CENTURY
INVESTMENTS
  VP VALUE FUND  

ASSETS:

                        

Investments at fair value (1)

   $     455,483     $     173,675     $     21     $     644,013     $     51,535     $         844,297  

Investment income due and accrued

                        

Receivable for investments sold

                        

Purchase payments receivable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total assets

       455,483         173,675         21         644,013         51,535         844,297  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

LIABILITIES:

                        

Payable for investments purchased

                        

Redemptions payable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total liabilities

       0         0         0         0         0         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS

   $     455,483     $     173,675     $     21     $     644,013     $     51,535     $         844,297  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS REPRESENTED BY:

                        

Accumulation units

   $     455,483     $     173,675     $     21     $     644,013     $     51,535     $         844,297  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

ACCUMULATION UNITS OUTSTANDING

       2,751         13,113         1         63,575         4,207         21,181  

UNIT VALUE (ACCUMULATION)

   $     165.57     $     13.24     $     21.00     $     10.13     $     12.25     $         39.86  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

(1)   Cost of investments:

   $     435,609     $     188,984     $     23     $     677,016     $     54,583     $         863,344  

        Shares of investments:

       19,440         12,257         2         66,806         5,402         84,345  

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        AMERICAN
FUNDS IS
GLOBAL SMALL
  CAPITALIZATION  
FUND		       AMERICAN
FUNDS IS
  GROWTH FUND  		       AMERICAN
FUNDS IS
  INTERNATIONAL  
FUND		       AMERICAN
  FUNDS IS NEW  
WORLD FUND		       BLACKROCK
GLOBAL
  ALLOCATION VI  
FUND		           CLEARBRIDGE  
VARIABLE
MID CAP
PORTFOLIO  

ASSETS:

                        

Investments at fair value (1)

   $     125,634     $     2,394,145     $     1,468,841     $     1,567,789     $     20,904     $         47,544  

Investment income due and accrued

                        

Receivable for investments sold

                        

Purchase payments receivable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total assets

       125,634         2,394,145         1,468,841         1,567,789         20,904         47,544  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

LIABILITIES:

                        

Payable for investments purchased

                        

Redemptions payable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total liabilities

       0         0         0         0         0         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS

   $     125,634     $     2,394,145     $     1,468,841     $     1,567,789     $     20,904     $         47,544  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS REPRESENTED BY:

                        

Accumulation units

   $     125,634     $     2,394,145     $     1,468,841     $     1,567,789     $     20,904     $         47,544  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

ACCUMULATION UNITS OUTSTANDING

       8,765         97,951         117,101         79,891         1,916         4,336  

UNIT VALUE (ACCUMULATION)

   $     14.33     $     24.44     $     12.54     $     19.62     $     10.91     $         10.96  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

(1)   Cost of investments:

   $     149,171     $     2,450,622     $     1,567,954     $     1,663,612     $     23,478     $         55,243  

        Shares of investments:

       5,937         34,458         83,457         75,411         1,376         2,755  

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
          CLEARBRIDGE  
VARIABLE
SMALL CAP
GROWTH
PORTFOLIO		       COLUMBIA
VARIABLE
PORTFOLIO-
  SMALL CAP  
VALUE FUND		       DAVIS
FINANCIAL
  PORTFOLIO  		         DAVIS VALUE  
PORTFOLIO		         DELAWARE VIP  
INTERNATIONAL
VALUE EQUITY
SERIES		           DELAWARE VIP  
SMALL CAP
VALUE SERIES

ASSETS:

                        

Investments at fair value (1)

   $     52,591     $     56,374     $     40,784     $     98,420     $     78     $         31,720  

Investment income due and accrued

                        

Receivable for investments sold

                        

Purchase payments receivable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total assets

       52,591         56,374         40,784         98,420         78         31,720  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

LIABILITIES:

                        

Payable for investments purchased

                        

Redemptions payable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total liabilities

       0         0         0         0         0         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS

   $     52,591     $     56,374     $     40,784     $     98,420     $     78     $         31,720  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS REPRESENTED BY:

                        

Accumulation units

   $     52,591     $     56,374     $     40,784     $     98,420     $     78     $         31,720  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

ACCUMULATION UNITS OUTSTANDING

       3,611         2,086         1,864         4,515         7         2,671  

UNIT VALUE (ACCUMULATION)

   $     14.56     $     27.02     $     21.88     $     21.80     $     11.14     $         11.88  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

(1)   Cost of investments:

   $     54,673     $     75,117     $     50,249     $     127,168     $     93     $         39,130  

        Shares of investments:

       2,202         3,964         3,531         14,284         7         974  

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
          DREYFUS STOCK  
INDEX FUND		           
    
DREYFUS VIF
  INTERNATIONAL  
EQUITY
PORTFOLIO		         DWS CROCI® U.S.  
VIP		       DWS HIGH
  INCOME VIP  		         DWS SMALL CAP  
INDEX VIP		           DWS SMALL MID  
CAP VALUE VIP

ASSETS:

                        

Investments at fair value (1)

   $     24,867,692     $     52,041     $     281,480     $     65,029     $     5,912,937     $         1,556,394  

Investment income due and accrued

       119,312                      

Receivable for investments sold

       24                      

Purchase payments receivable

                       26      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total assets

       24,987,028         52,041         281,480         65,029         5,912,963         1,556,394  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

LIABILITIES:

                        

Payable for investments purchased

                       26      

Redemptions payable

       24                      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total liabilities

       24         0         0         0         26         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS

   $     24,987,004     $     52,041     $     281,480     $     65,029     $     5,912,937     $         1,556,394  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS REPRESENTED BY:

                        

Accumulation units

   $     24,987,004     $     52,041     $     281,480     $     65,029     $     5,912,937     $         1,556,394  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

ACCUMULATION UNITS OUTSTANDING

       1,060,105         2,586         19,497         3,631         272,250         70,013  

UNIT VALUE (ACCUMULATION)

   $     23.57     $     20.12     $     14.44     $     17.91     $     21.72     $         22.23  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

(1)   Cost of investments:

   $     21,036,424     $     59,235     $     297,163     $     70,607     $     6,530,643     $         1,988,821  

        Shares of investments:

       507,711         2,945         20,912         11,389         394,986         127,469  

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        FEDERATED
  KAUFMANN  
FUND II		       FIDELITY VIP
  CONTRAFUND  
PORTFOLIO		         FIDELITY VIP  
GROWTH
PORTFOLIO		           
    
FIDELITY VIP
INVESTMENT
  GRADE BOND  
PORTFOLIO		         FIDELITY VIP  
MID CAP
PORTFOLIO		         GOLDMAN
  SACHS VIT MID  
CAP VALUE
FUND

ASSETS:

                        

Investments at fair value (1)

   $     144,338     $     2,660,248     $     738,672     $     280,461     $     885,128     $         44,837  

Investment income due and accrued

                        

Receivable for investments sold

                        

Purchase payments receivable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total assets

       144,338         2,660,248         738,672         280,461         885,128         44,837  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

LIABILITIES:

                        

Payable for investments purchased

                        

Redemptions payable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total liabilities

       0         0         0         0         0         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS

   $     144,338     $     2,660,248     $     738,672     $     280,461     $     885,128     $         44,837  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS REPRESENTED BY:

                        

Accumulation units

   $     144,338     $     2,660,248     $     738,672     $     280,461     $     885,128     $         44,837  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

ACCUMULATION UNITS OUTSTANDING

       5,416         81,166         31,857         13,019         18,847         3,270  

UNIT VALUE (ACCUMULATION)

   $     26.65     $     32.78     $     23.19     $     21.54     $     46.96     $         13.71  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

(1)   Cost of investments:

   $     139,944     $     2,863,897     $     731,469     $     289,441     $     1,008,741     $         57,915  

       Shares of investments:

       7,781         84,965         11,931         23,313         30,292         3,478  

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        GREAT-WEST
AGGRESSIVE
  PROFILE FUND  		       GREAT-WEST
  ARIEL MID CAP  
VALUE FUND		         GREAT-WEST  
BOND INDEX
FUND		       GREAT-WEST
  CONSERVATIVE  
PROFILE FUND		         GREAT-WEST  
CORE BOND
FUND		             
  GREAT-WEST  
EMERGING
MARKETS
  EQUITY  FUND  

ASSETS:

                        

Investments at fair value (1)

   $     1,083,583     $     196,813     $     1,975,994     $     792,267     $     2,394,461     $         2,085  

Investment income due and accrued

                        

Receivable for investments sold

                        

Purchase payments receivable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total assets

       1,083,583         196,813         1,975,994         792,267         2,394,461         2,085  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

LIABILITIES:

                        

Payable for investments purchased

                        

Redemptions payable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total liabilities

       0         0         0         0         0         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS

   $     1,083,583     $     196,813     $     1,975,994     $     792,267     $     2,394,461     $         2,085  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS REPRESENTED BY:

                        

Accumulation units

   $     1,083,583     $     196,813     $     1,975,994     $     792,267     $     2,394,461     $         2,085  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

ACCUMULATION UNITS OUTSTANDING

       107,222         4,397         138,949         78,473         166,396         253  

UNIT VALUE (ACCUMULATION)

   $     10.11     $     44.76     $     14.22     $     10.10     $     14.39     $         8.24  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

(1)   Cost of investments:

   $     1,369,812     $     225,694     $     2,010,201     $     817,951     $     2,507,889     $         2,053  

        Shares of investments:

       195,240         133,886         145,615         105,777         231,349         268  

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        GREAT-WEST
  GLOBAL BOND  
FUND		           
GREAT-WEST
GOVERNMENT
  MONEY MARKET  
FUND		       GREAT-WEST
  INTERNATIONAL  
INDEX FUND		       GREAT-WEST
  INTERNATIONAL  
VALUE FUND		       GREAT-WEST
LARGE CAP
  GROWTH FUND  		         GREAT-WEST
  LIFETIME 2015  
FUND

ASSETS:

                        

Investments at fair value (1)

   $     4,772,828     $     8,690,776     $     54,164     $     5,064,402     $     207,050     $         1,646,998  

Investment income due and accrued

           1,397                  

Receivable for investments sold

                        

Purchase payments receivable

           14                  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total assets

       4,772,828         8,692,187         54,164         5,064,402         207,050         1,646,998  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

LIABILITIES:

                        

Payable for investments purchased

           14                  

Redemptions payable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total liabilities

       0         14         0         0         0         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS

   $     4,772,828     $     8,692,173     $     54,164     $     5,064,402     $     207,050     $         1,646,998  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS REPRESENTED BY:

                        

Accumulation units

   $     4,772,828     $     8,692,173     $     54,164     $     5,064,402     $     207,050     $         1,646,998  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

ACCUMULATION UNITS OUTSTANDING

       336,028         656,196         4,857         435,820         6,566         148,678  

UNIT VALUE (ACCUMULATION)

   $     14.20     $     13.25     $     11.15     $     11.62     $     31.53     $         11.08  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

(1)   Cost of investments:

   $     5,246,267     $     8,690,776     $     56,898     $     6,435,625     $     240,380     $         1,823,952  

        Shares of investments:

       591,429         8,690,776         5,368         539,340         25,189         129,481  

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
            
    
    
GREAT-WEST
   LIFETIME 2020  
FUND		       GREAT-WEST
  LIFETIME 2025  
FUND		       GREAT-WEST
  LIFETIME 2030  
FUND		       GREAT-WEST
  LIFETIME 2035  
FUND		       GREAT-WEST
  LIFETIME 2040  
FUND		         GREAT-WEST
  LIFETIME 2045  
FUND

ASSETS:

                        

Investments at fair value (1)

   $     443,605     $     2,159,380     $     1,210,928     $     1,549,084     $     579,839     $         485,706  

Investment income due and accrued

                        

Receivable for investments sold

                        

Purchase payments receivable

                       8      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total assets

       443,605         2,159,380         1,210,928         1,549,084         579,847         485,706  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

LIABILITIES:

                        

Payable for investments purchased

                       8      

Redemptions payable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total liabilities

       0         0         0         0         8         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS

   $     443,605     $     2,159,380     $     1,210,928     $     1,549,084     $     579,839     $         485,706  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS REPRESENTED BY:

                        

Accumulation units

   $     443,605     $     2,159,380     $     1,210,928     $     1,549,084     $     579,839     $         485,706  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

ACCUMULATION UNITS OUTSTANDING

       39,591         191,021         105,326         134,062         49,646         41,863  

UNIT VALUE (ACCUMULATION)

   $     11.20     $     11.30     $     11.50     $     11.55     $     11.68     $         11.60  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

(1)   Cost of investments:

   $     501,174     $     2,410,389     $     1,355,992     $     1,836,373     $     678,173     $         567,697  

        Shares of investments:

       44,361         163,713         119,539         121,783         58,510         38,579  

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        GREAT-WEST
  LIFETIME 2050  
FUND		       GREAT-WEST
LIFETIME 2055  
FUND		           
GREAT-WEST
  LOOMIS SAYLES  
SMALL CAP
VALUE FUND		       GREAT-WEST
  MID CAP VALUE  
FUND		       GREAT-WEST
MODERATE
  PROFILE FUND  		         GREAT-WEST
MODERATELY
AGGRESSIVE
  PROFILE FUND  

ASSETS:

                        

Investments at fair value (1)

   $     228,159     $     172,961     $     755,793     $     81,373     $     283,209     $         77,197  

Investment income due and accrued

                        

Receivable for investments sold

                        

Purchase payments receivable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total assets

       228,159         172,961         755,793         81,373         283,209         77,197  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

LIABILITIES:

                        

Payable for investments purchased

                        

Redemptions payable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total liabilities

       0         0         0         0         0         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS

   $     228,159     $     172,961     $     755,793     $     81,373     $     283,209     $         77,197  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS REPRESENTED BY:

                        

Accumulation units

   $     228,159     $     172,961     $     755,793     $     81,373     $     283,209     $         77,197  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

ACCUMULATION UNITS OUTSTANDING

       19,520         14,937         21,531         7,024         27,995         7,633  

UNIT VALUE (ACCUMULATION)

   $     11.69     $     11.58     $     35.10     $     11.58     $     10.12     $         10.11  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

(1)   Cost of investments:

   $     253,717     $     192,326     $     847,945     $     98,654     $     328,301     $         92,253  

        Shares of investments:

       22,368         11,417         33,222         7,779         45,605         11,123  

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        GREAT-WEST
MODERATELY
  CONSERVATIVE  
PROFILE FUND		       GREAT-WEST
  MULTI-SECTOR  
BOND FUND		       GREAT-WEST
  REAL ESTATE  
INDEX FUND		           
    
GREAT-WEST
  S&P MID CAP  
400® INDEX
FUND		       GREAT-WEST
  S&P SMALL CAP  
600® INDEX
FUND		         GREAT-WEST
SHORT
  DURATION BOND  
FUND

ASSETS:

                        

Investments at fair value (1)

   $     87,352     $     506,881     $     194,734     $     1,387,673     $     14,078     $         7,645,234  

Investment income due and accrued

                        

Receivable for investments sold

                   27          

Purchase payments receivable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total assets

       87,352         506,881         194,734         1,387,700         14,078         7,645,234  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

LIABILITIES:

                        

Payable for investments purchased

                        

Redemptions payable

                   27          
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total liabilities

       0         0         0         27         0         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS

   $     87,352     $     506,881     $     194,734     $     1,387,673     $     14,078     $         7,645,234  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS REPRESENTED BY:

                        

Accumulation units

   $     87,352     $     506,881     $     194,734     $     1,387,673     $     14,078     $         7,645,234  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

ACCUMULATION UNITS OUTSTANDING

       8,645         13,336         15,574         89,851         1,090         542,209  

UNIT VALUE (ACCUMULATION)

   $     10.10     $     38.01     $     12.50     $     15.44     $     12.92     $         14.10  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

(1)   Cost of investments:

   $     98,237     $     521,343     $     214,386     $     1,631,481     $     14,796     $         7,761,047  

        Shares of investments:

       11,085         40,165         18,234         100,775         1,305         750,268  

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        GREAT-WEST T.
ROWE PRICE
  EQUITY INCOME  
FUND		       GREAT-WEST T.
  ROWE PRICE MID  
CAP GROWTH
FUND		           
GREAT-WEST
U.S.
  GOVERNMENT  
SECURITIES
FUND		       INVESCO V.I.
  CORE EQUITY  
FUND		       INVESCO V.I.
  GLOBAL REAL  
ESTATE FUND		         INVESCO V.I.
  HEALTH CARE  
FUND

ASSETS:

                        

Investments at fair value (1)

   $     1,624,599     $     3,762,974     $     2,963,805     $     19,388     $     1,471,044     $         81,105  

Investment income due and accrued

                        

Receivable for investments sold

                        

Purchase payments receivable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total assets

       1,624,599         3,762,974         2,963,805         19,388         1,471,044         81,105  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

LIABILITIES:

                        

Payable for investments purchased

                        

Redemptions payable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total liabilities

       0         0         0         0         0         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS

   $     1,624,599     $     3,762,974     $     2,963,805     $     19,388     $     1,471,044     $         81,105  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS REPRESENTED BY:

                        

Accumulation units

   $     1,624,599     $     3,762,974     $     2,963,805     $     19,388     $     1,471,044     $         81,105  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

ACCUMULATION UNITS OUTSTANDING

       60,750         88,693         133,853         908         39,828         2,639  

UNIT VALUE (ACCUMULATION)

   $     26.74     $     42.43     $     22.14     $     21.35     $     36.93     $         30.73  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

(1)   Cost of investments:

   $     1,701,806     $     3,832,400     $     3,062,630     $     22,716     $     1,553,570     $         89,941  

        Shares of investments:

       90,406         156,791         251,596         627         94,784         3,465  

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        INVESCO V.I.
  INTERNATIONAL  
GROWTH FUND		       INVESCO V.I.
  MID CAP CORE  
EQUITY FUND		       INVESCO V.I.
  TECHNOLOGY  
FUND		           
    
JANUS
  HENDERSON VIT  
BALANCED
PORTFOLIO		       JANUS
  HENDERSON VIT  
FLEXIBLE BOND
PORTFOLIO		         JANUS
  HENDERSON VIT  
FORTY
PORTFOLIO

ASSETS:

                        

Investments at fair value (1)

   $     3,100,458     $     196,181     $     129,460     $     2,200,424     $     1,804,920     $         2,256,775  

Investment income due and accrued

                        

Receivable for investments sold

                        

Purchase payments receivable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total assets

       3,100,458         196,181         129,460         2,200,424         1,804,920         2,256,775  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

LIABILITIES:

                        

Payable for investments purchased

                        

Redemptions payable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total liabilities

       0         0         0         0         0         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS

   $     3,100,458     $     196,181     $     129,460     $     2,200,424     $     1,804,920     $         2,256,775  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS REPRESENTED BY:

                        

Accumulation units

   $     3,100,458     $     196,181     $     129,460     $     2,200,424     $     1,804,920     $         2,256,775  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

ACCUMULATION UNITS OUTSTANDING

       203,419         8,707         5,259         71,151         68,530         49,567  

UNIT VALUE (ACCUMULATION)

   $     15.24     $     22.53     $     24.62     $     30.93     $     26.34     $         45.53  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

(1)   Cost of investments:

   $     3,319,677     $     239,306     $     118,557     $     2,217,050     $     1,819,003     $         2,629,797  

        Shares of investments:

       94,010         17,883         5,906         65,198         161,010         64,113  

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        JANUS
  HENDERSON VIT  
GLOBAL
RESEARCH
PORTFOLIO		       JANUS
  HENDERSON VIT  
GLOBAL
TECHNOLOGY
PORTFOLIO		       JANUS
  HENDERSON VIT  
OVERSEAS
PORTFOLIO		           
  LORD ABBETT  
SERIES
DEVELOPING
GROWTH
PORTFOLIO		         MFS VIT III MID  
CAP VALUE
PORTFOLIO		           MFS VIT MID CAP  
GROWTH SERIES

ASSETS:

                        

Investments at fair value (1)

   $     757,306     $     921,762     $     49,358     $     80,521     $     2,456     $         2,320  

Investment income due and accrued

                        

Receivable for investments sold

                        

Purchase payments receivable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total assets

       757,306         921,762         49,358         80,521         2,456         2,320  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

LIABILITIES:

                        

Payable for investments purchased

                        

Redemptions payable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total liabilities

       0         0         0         0         0         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS

   $     757,306     $     921,762     $     49,358     $     80,521     $     2,456     $         2,320  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS REPRESENTED BY:

                        

Accumulation units

   $     757,306     $     921,762     $     49,358     $     80,521     $     2,456     $         2,320  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

ACCUMULATION UNITS OUTSTANDING

       58,581         21,903         1,996         6,917         253         199  

UNIT VALUE (ACCUMULATION)

   $     12.93     $     42.08     $     24.73     $     11.64     $     9.71     $         11.66  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

(1)   Cost of investments:

   $     706,699     $     987,998     $     57,237     $     92,811     $     2,390     $         2,213  

        Shares of investments:

       16,068         83,342         1,848         3,225         331         282  

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
          MFS VIT TOTAL  
RETURN BOND
SERIES		         MFS VIT VALUE  
SERIES		       NEUBERGER
  BERMAN AMT  
GUARDIAN
PORTFOLIO		       NEUBERGER
  BERMAN AMT  
LARGE CAP
VALUE
PORTFOLIO		       NEUBERGER
  BERMAN AMT  
MID CAP
GROWTH
PORTFOLIO		         NEUBERGER
  BERMAN AMT  
MID CAP
INTRINSIC
VALUE
PORTFOLIO

ASSETS:

                        

Investments at fair value (1)

   $     907,848     $     356,133     $     19,368     $     8,069     $     12,988     $         713,744  

Investment income due and accrued

                        

Receivable for investments sold

                        

Purchase payments receivable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total assets

       907,848         356,133         19,368         8,069         12,988         713,744  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

LIABILITIES:

                        

Payable for investments purchased

                        

Redemptions payable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total liabilities

       0         0         0         0         0         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS

   $     907,848     $     356,133     $     19,368     $     8,069     $     12,988     $         713,744  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS REPRESENTED BY:

                        

Accumulation units

   $     907,848     $     356,133     $     19,368     $     8,069     $     12,988     $         713,744  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

ACCUMULATION UNITS OUTSTANDING

       89,611         30,312         683         290         576         32,280  

UNIT VALUE (ACCUMULATION)

   $     10.13     $     11.75     $     28.36     $     27.82     $     22.55     $         22.11  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

(1)   Cost of investments:

   $     968,928     $     404,939     $     21,626     $     7,327     $     14,181     $         855,256  

        Shares of investments:

       71,767         20,586         1,442         553         539         45,490  

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
            
NEUBERGER
BERMAN AMT
  SUSTAINABLE  
EQUITY
PORTFOLIO		         OPPENHEIMER  
MAIN STREET
SMALL CAP
FUND/VA		         PIMCO VIT HIGH  
YIELD
PORTFOLIO		         PIMCO VIT LOW  
DURATION
PORTFOLIO		         PIMCO VIT REAL  
RETURN
PORTFOLIO		         PIMCO VIT
  TOTAL RETURN  
PORTFOLIO

ASSETS:

                        

Investments at fair value (1)

   $     77,183     $     913,048     $     179,729     $     6,107,035     $     509,339     $         3,535,406  

Investment income due and accrued

               761         15,863         889         9,563  

Receivable for investments sold

                        

Purchase payments receivable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total assets

       77,183         913,048         180,490         6,122,898         510,228         3,544,969  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

LIABILITIES:

                        

Payable for investments purchased

                        

Redemptions payable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total liabilities

       0         0         0         0         0         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS

   $     77,183     $     913,048     $     180,490     $     6,122,898     $     510,228     $         3,544,969  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS REPRESENTED BY:

                        

Accumulation units

   $     77,183     $     913,048     $     180,490     $     6,122,898     $     510,228     $         3,544,969  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

ACCUMULATION UNITS OUTSTANDING

       2,458         80,774         7,702         403,509         29,567         181,400  

UNIT VALUE (ACCUMULATION)

   $     31.40     $     11.30     $     23.43     $     15.17     $     17.26     $         19.54  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

(1)   Cost of investments:

   $     86,027     $     1,127,543     $     188,057     $     6,296,928     $     530,432     $         3,722,725  

        Shares of investments:

       3,400         44,845         24,688         605,857         42,982         337,348  

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        PIONEER REAL
  ESTATE SHARES  
VCT PORTFOLIO		       PUTNAM VT
  EQUITY INCOME  
FUND		           
    
PUTNAM VT
  HIGH YIELD  
FUND		       PUTNAM VT
  INCOME FUND  		       PUTNAM VT
  INTERNATIONAL  
GROWTH FUND		         PUTNAM VT
SMALL CAP
  VALUE FUND  

ASSETS:

                        

Investments at fair value (1)

   $     49,208     $     341,020     $     721,658     $     135,090     $     44,796     $         78,435  

Investment income due and accrued

                        

Receivable for investments sold

                        

Purchase payments receivable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total assets

       49,208         341,020         721,658         135,090         44,796         78,435  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

LIABILITIES:

                        

Payable for investments purchased

                        

Redemptions payable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total liabilities

       0         0         0         0         0         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS

   $     49,208     $     341,020     $     721,658     $     135,090     $     44,796     $         78,435  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS REPRESENTED BY:

                        

Accumulation units

   $     49,208     $     341,020     $     721,658     $     135,090     $     44,796     $         78,435  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

ACCUMULATION UNITS OUTSTANDING

       4,946         10,372         32,047         12,703         2,265         7,546  

UNIT VALUE (ACCUMULATION)

   $     9.95     $     32.88     $     22.52     $     10.63     $     19.78     $         10.39  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

(1)   Cost of investments:

   $     59,228     $     346,316     $     774,943     $     137,005     $     56,403     $         120,774  

        Shares of investments:

       3,921         14,605         121,491         12,625         2,537         8,696  

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        PUTNAM VT
  SUSTAINABLE  
FUTURE FUND		         ROYCE CAPITAL  
FUND - SMALL-
CAP PORTFOLIO		           
    
  T. ROWE PRICE  
BLUE CHIP
GROWTH
PORTFOLIO		         VAN ECK VIP  
EMERGING
MARKETS FUND		       VAN ECK VIP
  GLOBAL HARD  
ASSETS FUND		         VICTORY RS
SMALL CAP
  GROWTH EQUITY  
VIP SERIES

ASSETS:

                        

Investments at fair value (1)

   $     87,947     $     1,007,690     $     1,586,586     $     45,587     $     779,498     $         6,259  

Investment income due and accrued

                        

Receivable for investments sold

                        

Purchase payments receivable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total assets

       87,947         1,007,690         1,586,586         45,587         779,498         6,259  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

LIABILITIES:

                        

Payable for investments purchased

                        

Redemptions payable

                        
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total liabilities

       0         0         0         0         0         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS

   $     87,947     $     1,007,690     $     1,586,586     $     45,587     $     779,498     $         6,259  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

NET ASSETS REPRESENTED BY:

                        

Accumulation units

   $     87,947     $     1,007,690     $     1,586,586     $     45,587     $     779,498     $         6,259  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

ACCUMULATION UNITS OUTSTANDING

       2,589         55,536         109,856         1,121         19,412         719  

UNIT VALUE (ACCUMULATION)

   $     33.97     $     18.14     $     14.44     $     40.67     $     40.16     $         8.71  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

(1)   Cost of investments:

   $     92,208     $     1,286,442     $     1,550,940     $     49,087     $     955,023     $         5,842  

        Shares of investments:

       5,213         131,039         53,492         3,821         45,799         409  

 

 

The accompanying notes are an integral part of these financial statements.    (Concluded)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
          ALGER SMALL  
CAP GROWTH
PORTFOLIO		       AMERICAN
CENTURY
  INVESTMENTS  
VP CAPITAL
APPRECIATION
FUND		       AMERICAN
CENTURY
  INVESTMENTS  
VP INCOME &
GROWTH FUND		       AMERICAN
CENTURY
  INVESTMENTS  
VP INFLATION
PROTECTION
FUND		       AMERICAN
CENTURY
INVESTMENTS
VP
  INTERNATIONAL  
FUND		         AMERICAN
CENTURY
INVESTMENTS
  VP VALUE FUND  

INVESTMENT INCOME:

                        

Dividends

   $     $     $     44     $     18,104     $     664         $     15,172  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INVESTMENT INCOME (LOSS)

       0         0         44         18,104         664             15,172  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

                        

Net realized gain (loss) on sale of fund shares

       (13,948 )        164         474         (2,539 )        416             29,606  

Realized gain distributions

       18,469         843         293             3,435             52  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized gain (loss) on investments

       4,521         1,007         767         (2,539 )        3,851             29,658  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Change in net unrealized appreciation (depreciation) on investments

       7,403         (14,839 )        (731 )        (34,080 )        (12,711)            (134,347 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized and unrealized gain (loss) on investments

       11,924         (13,832 )        36         (36,619 )        (8,860)            (104,689 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

   $     11,924     $     (13,832 )    $     80     $     (18,515 )    $     (8,196)        $     (89,517 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
            
AMERICAN
FUNDS IS
GLOBAL SMALL
  CAPITALIZATION  
FUND		         AMERICAN
FUNDS IS
  GROWTH FUND  		         AMERICAN
FUNDS IS
  INTERNATIONAL  
FUND		         AMERICAN
  FUNDS IS NEW  
WORLD FUND		         BLACKROCK
GLOBAL
  ALLOCATION VI  
FUND		             CLEARBRIDGE  
VARIABLE MID
CAP PORTFOLIO		  
                                                (1)              

INVESTMENT INCOME:

                        

Dividends

   $     67     $         11,253     $         28,224     $         15,157     $         218         $         272      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET INVESTMENT INCOME (LOSS)

       67         11,253         28,224         15,157         218             272      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

                        

Net realized gain (loss) on sale of fund shares

       (1,499 )        4,400         39,875         10,594         (3)            32      

Realized gain distributions

       1,449         256,120         78,008         47,113         848             978      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Net realized gain (loss) on investments

       (50 )        260,520         117,883         57,707         845             1,010      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Change in net unrealized appreciation (depreciation) on investments

       (23,879 )        (285,953 )        (366,366 )        (330,745 )        (2,574)            (8,144)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Net realized and unrealized gain (loss) on investments

       (23,929 )        (25,433 )        (248,483 )        (273,038 )        (1,729)            (7,134)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

   $     (23,862 )    $         (14,180 )    $         (220,259 )    $         (257,881 )    $         (1,511)        $         (6,862)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  
 

(1)   For the period July 9, 2018 to December 31, 2018.

 

    

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
            
  CLEARBRIDGE  
VARIABLE
SMALL CAP
GROWTH
PORTFOLIO		         COLUMBIA
VARIABLE
PORTFOLIO -
  SMALL CAP  
VALUE FUND		         DAVIS
  FINANCIAL  
PORTFOLIO		           DAVIS VALUE  
PORTFOLIO		         DELAWARE VIP
  INTERNATIONAL  
VALUE EQUITY
SERIES		             DELAWARE VIP  
SMALL CAP
VALUE SERIES		  
                                                (1)              

INVESTMENT INCOME:

                        

Dividends

   $     $         278     $         520     $         1,006     $                  $         346      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET INVESTMENT INCOME (LOSS)

       0         278         520         1,006         0             346      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

                        

Net realized gain (loss) on sale of fund shares

       3,032         544         1,173         80             (2,540)     

Realized gain distributions

       5,938         9,998         5,381         20,234             4,143      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Net realized gain (loss) on investments

       8,970         10,542         6,554         20,314         0             1,603      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Change in net unrealized appreciation (depreciation) on investments

       (7,962 )        (23,079 )        (11,011 )        (36,824 )        (15)            (12,190)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Net realized and unrealized gain (loss) on investments

       1,008         (12,537 )        (4,457 )        (16,510 )        (15)            (10,587)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

   $     1,008     $         (12,259 )    $         (3,937 )    $         (15,504 )    $         (15)        $         (10,241)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  
 

(1)  For the period May 29, 2018 to December 31, 2018.

 

    

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
          DREYFUS STOCK  
INDEX FUND		             
    
DREYFUS VIF
  INTERNATIONAL  
EQUITY
PORTFOLIO		           DWS CROCI® U.S.  
VIP		         DWS GLOBAL
  SMALL CAP VIP  		         DWS HIGH
  INCOME VIP  		             DWS SMALL CAP  
INDEX VIP		  
                                      (1)                        

INVESTMENT INCOME:

                        

Dividends

   $     449,486     $         423     $         7,698     $         370     $         5,173         $         65,936      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET INVESTMENT INCOME (LOSS)

       449,486         423         7,698         370         5,173             65,936      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

                        

Net realized gain (loss) on sale of fund shares

       615,932         282         (4,058 )        (8,724 )        (126)            76,522      

Realized gain distributions

       598,723             22,042         17,417             467,982      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Net realized gain (loss) on investments

       1,214,655         282         17,984         8,693         (126)            544,504      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Change in net unrealized appreciation (depreciation) on investments

       (2,858,477 )        (9,353 )        (54,923 )        (5,268 )        (6,627)            (1,362,257)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Net realized and unrealized gain (loss) on investments

       (1,643,822 )        (9,071 )        (36,939 )        3,425         (6,753)            (817,753)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

   $     (1,194,336 )    $         (8,648 )    $         (29,241 )    $         3,795     $         (1,580)        $         (751,817)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  
 

(1)  For the period January 1, 2018 to June 11, 2018.

 

    

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
          DWS SMALL MID  
CAP VALUE VIP		         FEDERATED  
KAUFMANN
FUND II		       FIDELITY VIP
  CONTRAFUND  
PORTFOLIO		         FIDELITY VIP  
GROWTH
PORTFOLIO		           
    
FIDELITY VIP
INVESTMENT
  GRADE BOND  
PORTFOLIO		         FIDELITY VIP MID
  CAP PORTFOLIO  

INVESTMENT INCOME:

                        

Dividends

   $     23,823     $     $     12,939     $     356     $     12,042        $     4,188  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INVESTMENT INCOME (LOSS)

       23,823         0         12,939         356         12,042            4,188  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

                        

Net realized gain (loss) on sale of fund shares

       19,042         2,246         35,963         (8,130 )        (7,528)            (561 ) 

Realized gain distributions

       307,706         10,575         256,144         123,224         3,233             89,860  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized gain (loss) on investments

       326,748         12,821         292,107         115,094         (4,295)            89,299  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Change in net unrealized appreciation (depreciation) on investments

       (624,251 )        (8,023 )        (495,777 )        (127,070 )        (12,951)            (253,140 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized and unrealized gain (loss) on investments

       (297,503 )        4,798         (203,670 )        (11,976 )        (17,246)            (163,841 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

   $     (273,680 )    $     4,798     $     (190,731 )    $     (11,620 )    $     (5,204)        $     (159,653 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
            
    
GOLDMAN
  SACHS VIT MID  
CAP VALUE
FUND		       GREAT-WEST
AGGRESSIVE
  PROFILE FUND  		       GREAT-WEST
  ARIEL MID CAP  
VALUE FUND		         GREAT-WEST  
BOND INDEX
FUND		       GREAT-WEST
  CONSERVATIVE  
PROFILE FUND		           GREAT-WEST  
CORE BOND
FUND

INVESTMENT INCOME:

                        

Dividends

   $     678     $     29,520     $     3,006     $     26,744     $     13,422         $     56,265  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INVESTMENT INCOME (LOSS)

       678         29,520         3,006         26,744         13,422             56,265  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

                        

Net realized gain (loss) on sale of fund shares

       14         663         (19,724 )        (5,723 )        (124)            (1,495 ) 

Realized gain distributions

       6,152         135,347         258             13,681          
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized gain (loss) on investments

       6,166         136,010         (19,466 )        (5,723 )        13,557             (1,495 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Change in net unrealized appreciation (depreciation) on investments

       (12,967 )        (294,737 )        (48,351 )        (31,012 )        (25,786)            (83,114 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized and unrealized gain (loss) on investments

       (6,801 )        (158,727 )        (67,817 )        (36,735 )        (12,229)            (84,609 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

   $     (6,123 )    $     (129,207 )    $     (64,811 )    $     (9,991 )    $     1,193         $     (28,344 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        GREAT-WEST
EMERGING
MARKETS
  EQUITY FUND  		         GREAT-WEST
  GLOBAL BOND  
FUND		             
    
GREAT-WEST
GOVERNMENT
  MONEY MARKET  
FUND		         GREAT-WEST
  INTERNATIONAL  
INDEX FUND		         GREAT-WEST
  INTERNATIONAL  
VALUE FUND		           GREAT-WEST
LARGE CAP
  GROWTH FUND  		  
        (1)                                                      

INVESTMENT INCOME:

                        

Dividends

   $     17     $         121,094     $         145,671     $         1,103     $         72,240         $         551      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET INVESTMENT INCOME (LOSS)

       17         121,094         145,671         1,103         72,240             551      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

                        

Net realized gain (loss) on sale of fund shares

           (120,835 )            302         16,385             13,181      

Realized gain distributions

           17,450             718         1,028,449             42,206      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Net realized gain (loss) on investments

       0         (103,385 )        0         1,020         1,044,834             55,387      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Change in net unrealized appreciation (depreciation) on investments

       32         (21,154 )            (9,242 )        (2,000,998)            (57,932)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Net realized and unrealized gain (loss) on investments

       32         (124,539 )        0         (8,222 )        (956,164)            (2,545)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

   $     49     $         (3,445 )    $         145,671     $         (7,119 )    $         (883,924)        $         (1,994)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  
 

(1)  For the period December 24, 2018 to December 31, 2018.

 

    

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        GREAT-WEST
  LIFETIME 2015  
FUND		       GREAT-WEST
  LIFETIME 2020  
FUND		           
    
    
GREAT-WEST
  LIFETIME 2025  
FUND		       GREAT-WEST
  LIFETIME 2030  
FUND		       GREAT-WEST
  LIFETIME 2035  
FUND		         GREAT-WEST
  LIFETIME 2040  
FUND

INVESTMENT INCOME:

                        

Dividends

   $     33,724     $     12,767     $     47,013     $     32,549     $     26,457         $     18,311  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INVESTMENT INCOME (LOSS)

       33,724         12,767         47,013         32,549         26,457             18,311  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

                        

Net realized gain (loss) on sale of fund shares

       14,771         1,273         47,246         1,130         12,885             (6,062 ) 

Realized gain distributions

       60,350         12,122         113,832         46,978         127,204             27,574  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized gain (loss) on investments

       75,121         13,395         161,078         48,108         140,089             21,512  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Change in net unrealized appreciation (depreciation) on investments

       (194,154 )        (59,202 )        (337,308 )        (180,929 )        (320,459)            (115,822 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized and unrealized gain (loss) on investments

       (119,033 )        (45,807 )        (176,230 )        (132,821 )        (180,370)            (94,310 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

   $     (85,309 )    $     (33,040 )    $     (129,217 )    $     (100,272 )    $     (153,913)        $     (75,999 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        GREAT-WEST
  LIFETIME 2045  
FUND		       GREAT-WEST
  LIFETIME 2050  
FUND		       GREAT-WEST
  LIFETIME 2055  
FUND		           
    
GREAT-WEST
  LOOMIS SAYLES  
SMALL CAP
VALUE FUND		       GREAT-WEST
  MID CAP VALUE  
FUND		         GREAT-WEST
MODERATE
  PROFILE FUND  

INVESTMENT INCOME:

                        

Dividends

   $     8,370     $     6,679     $     2,833     $     $     4,123         $     8,151  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INVESTMENT INCOME (LOSS)

       8,370         6,679         2,833         0         4,123             8,151  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

                        

Net realized gain (loss) on sale of fund shares

       14,738         1,394         580         1,475         27             (394 ) 

Realized gain distributions

       38,335         10,589         12,983         21,272         2,330             18,037  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized gain (loss) on investments

       53,073         11,983         13,563         22,747         2,357             17,643  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Change in net unrealized appreciation (depreciation) on investments

       (107,438 )        (44,541 )        (35,180 )        (161,852 )        (16,628)            (44,833 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized and unrealized gain (loss) on investments

       (54,365 )        (32,558 )        (21,617 )        (139,105 )        (14,271)            (27,190 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

   $     (45,995 )    $     (25,879 )    $     (18,784 )    $     (139,105 )    $     (10,148)        $     (19,039 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        GREAT-WEST
MODERATELY
AGGRESSIVE
  PROFILE FUND  		           
    
GREAT-WEST
MODERATELY
  CONSERVATIVE  
PROFILE FUND		       GREAT-WEST
  MULTI-SECTOR  
BOND FUND		       GREAT-WEST
  REAL ESTATE  
INDEX FUND		         GREAT-WEST  
S&P MID  CAP
400® INDEX
FUND		         GREAT-WEST
  S&P SMALL CAP  
600® INDEX
FUND

INVESTMENT INCOME:

                        

Dividends

   $     2,168     $     2,445     $     14,683     $     2,720     $     9,869         $     2,053  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INVESTMENT INCOME (LOSS)

       2,168         2,445         14,683         2,720         9,869             2,053  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

                        

Net realized gain (loss) on sale of fund shares

       113         (33 )        6,407         12         11,633             (16,629 ) 

Realized gain distributions

       6,178         3,816         3,281         3,753         94,518             17,957  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized gain (loss) on investments

       6,291         3,783         9,688         3,765         106,151             1,328  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Change in net unrealized appreciation (depreciation) on investments

       (15,179 )        (11,164 )        (45,222 )        (19,266 )        (323,188)            (19,264 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized and unrealized gain (loss) on investments

       (8,888 )        (7,381 )        (35,534 )        (15,501 )        (217,037)            (17,936 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

   $     (6,720 )    $     (4,936 )    $     (20,851 )    $     (12,781 )    $     (207,168)        $     (15,883 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        GREAT-WEST
SHORT
  DURATION BOND  
FUND		         GREAT-WEST
SMALL CAP
  GROWTH FUND  		             
    
GREAT-WEST T.
ROWE PRICE
  EQUITY INCOME  
FUND		         GREAT-WEST T.
  ROWE PRICE MID  
CAP GROWTH
FUND		           GREAT-WEST U.S.  
GOVERNMENT
SECURITIES
FUND		           INVESCO V.I.
  CORE EQUITY  
FUND		  
                  (1)                                            

INVESTMENT INCOME:

                        

Dividends

   $     143,678     $         $         5,154     $         3,399     $         63,321         $         1,646      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET INVESTMENT INCOME (LOSS)

       143,678         0         5,154         3,399         63,321             1,646      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

                        

Net realized gain (loss) on sale of fund shares

       (11,424 )        2,882         8,091         163,316         (37,973)            (29,735)     

Realized gain distributions

               94,944         214,370             11,786      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Net realized gain (loss) on investments

       (11,424 )        2,882         103,035         377,686         (37,973)            (17,949)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Change in net unrealized appreciation (depreciation) on investments

       (89,020 )            (272,081 )        (428,922 )        (11,748)            (1,664)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Net realized and unrealized gain (loss) on investments

       (100,444 )        2,882         (169,046 )        (51,236 )        (49,721)            (19,613)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

   $     43,234     $         2,882     $         (163,892 )    $         (47,837 )    $         13,600         $         (17,967)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  
 

(1)  For the period June 11, 2018 to July 13, 2018.

 

    

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        INVESCO V.I.
  GLOBAL REAL  
ESTATE FUND		       INVESCO V.I.
  HEALTH CARE  
FUND		       INVESCO V.I.
  INTERNATIONAL  
GROWTH FUND		         INVESCO V.I. MID  
CAP CORE
EQUITY FUND		       INVESCO V.I.
  TECHNOLOGY  
FUND		             
    
JANUS
  HENDERSON VIT  
BALANCED
PORTFOLIO

INVESTMENT INCOME:

                        

Dividends

   $     60,962     $     $     73,520     $     1,153     $              $     46,506  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INVESTMENT INCOME (LOSS)

       60,962         0         73,520         1,153         0             46,506  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

                        

Net realized gain (loss) on sale of fund shares

       12,491         265         39,306         (639 )        13,308             138,255  

Realized gain distributions

       19,064         11,184         24,898         31,910         6,540             56,582  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized gain (loss) on investments

       31,555         11,449         64,204         31,271         19,848             194,837  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Change in net unrealized appreciation (depreciation) on investments

       (191,911 )        (10,473 )        (673,676 )        (58,430 )        (16,559)            (240,131)  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized and unrealized gain (loss) on investments

       (160,356 )        976         (609,472 )        (27,159 )        3,289             (45,294)  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

   $     (99,394 )    $     976     $     (535,952 )    $     (26,006 )    $     3,289         $     1,212  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        JANUS
  HENDERSON VIT  
FLEXIBLE BOND
PORTFOLIO		       JANUS
  HENDERSON VIT  
FORTY
PORTFOLIO		       JANUS
  HENDERSON VIT  
GLOBAL
RESEARCH
PORTFOLIO		           
JANUS
  HENDERSON VIT  
GLOBAL
TECHNOLOGY
PORTFOLIO		       JANUS
  HENDERSON VIT  
OVERSEAS
PORTFOLIO		           LORD ABBETT  
SERIES
DEVELOPING
GROWTH
PORTFOLIO

INVESTMENT INCOME:

                        

Dividends

   $     58,472     $     39,393     $     9,779     $     7,427     $     1,016         $  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INVESTMENT INCOME (LOSS)

       58,472         39,393         9,779         7,427         1,016             0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

                        

Net realized gain (loss) on sale of fund shares

       (68,879 )        273,877         12,476         24,805         (55)            740  

Realized gain distributions

           423,236             22,423             12,019  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized gain (loss) on investments

       (68,879 )        697,113         12,476         47,228         (55)            12,759  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Change in net unrealized appreciation (depreciation) on investments

       2,799         (658,232 )        (79,514 )        (128,669 )        (9,656)            (16,088 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized and unrealized gain (loss) on investments

       (66,080 )        38,881         (67,038 )        (81,441 )        (9,711)            (3,329 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

   $     (7,608 )    $     78,274     $     (57,259 )    $     (74,014 )    $     (8,695)        $     (3,329 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
          MFS VIT III MID  
CAP VALUE
PORTFOLIO		           MFS VIT MID CAP  
GROWTH SERIES		           MFS VIT TOTAL  
RETURN BOND
SERIES		           MFS VIT VALUE  
SERIES		         NEUBERGER
  BERMAN AMT  
GUARDIAN
PORTFOLIO		               
NEUBERGER
  BERMAN AMT  
LARGE CAP
VALUE
PORTFOLIO		  
        (1)         (1)                                            

INVESTMENT INCOME:

                        

Dividends

   $     $         $         29,640     $         6,032     $         544         $         114      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET INVESTMENT INCOME (LOSS)

       0         0         29,640         6,032         544             114      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

                        

Net realized gain (loss) on sale of fund shares

               (551 )        565         (32,194)            1,322      

Realized gain distributions

                   26,262         10,647             1,011      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Net realized gain (loss) on investments

       0         0         (551 )        26,827         (21,547)            2,333      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Change in net unrealized appreciation (depreciation) on investments

       66         107         (38,366 )        (72,178 )        13,271             (2,502)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Net realized and unrealized gain (loss) on investments

       66         107         (38,917 )        (45,351 )        (8,276)            (169)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

   $     66     $         107     $         (9,277 )    $         (39,319 )    $         (7,732)        $         (55)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  
 

(1)  For the period December 24, 2018 to December 31, 2018.

 

    

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        NEUBERGER
  BERMAN AMT  
MID CAP
GROWTH
PORTFOLIO		       NEUBERGER
  BERMAN AMT  
MID CAP
INTRINSIC
VALUE
PORTFOLIO		       NEUBERGER
  BERMAN AMT  
SUSTAINABLE
EQUITY
PORTFOLIO		         OPPENHEIMER  
MAIN STREET
SMALL CAP
FUND/VA		         PIMCO VIT HIGH  
YIELD
PORTFOLIO		           PIMCO VIT LOW  
DURATION
PORTFOLIO

INVESTMENT INCOME:

                        

Dividends

   $     $     5,673     $     406     $     3,217     $     10,873         $     115,953  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INVESTMENT INCOME (LOSS)

       0         5,673         406         3,217         10,873             115,953  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

                        

Net realized gain (loss) on sale of fund shares

       10,166         139,739         427         3,998         (839)            (10,619 ) 

Realized gain distributions

       8,454         39,299         4,539         132,497          
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized gain (loss) on investments

       18,620         179,038         4,966         136,495         (839)            (10,619 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Change in net unrealized appreciation (depreciation) on investments

       (25,839 )        (296,631 )        (10,289 )        (246,455 )        (14,960)            (83,547 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized and unrealized gain (loss) on investments

       (7,219 )        (117,593 )        (5,323 )        (109,960 )        (15,799)            (94,166 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

   $     (7,219 )    $     (111,920 )    $     (4,917 )    $     (106,743 )    $     (4,926)        $     21,787  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
          PIMCO VIT REAL  
RETURN
PORTFOLIO		       PIMCO VIT
  TOTAL RETURN  
PORTFOLIO		           
    
PIONEER REAL
  ESTATE SHARES  
VCT PORTFOLIO		       PUTNAM VT
  EQUITY INCOME  
FUND		       PUTNAM VT
  HIGH YIELD  
FUND		         PUTNAM VT
  INCOME FUND  

INVESTMENT INCOME:

                        

Dividends

   $     13,688     $     92,404     $     1,355     $     4,206     $     49,683         $     3,371  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INVESTMENT INCOME (LOSS)

       13,688         92,404         1,355         4,206         49,683             3,371  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

                        

Net realized gain (loss) on sale of fund shares

       (14,665 )        (14,135 )        (148 )        26,017         (7,716)            (43 ) 

Realized gain distributions

           43,922         4,599         20,649          
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized gain (loss) on investments

       (14,665 )        29,787         4,451         46,666         (7,716)            (43 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Change in net unrealized appreciation (depreciation) on investments

       (19,173 )        (142,553 )        (8,662 )        (79,680 )        (67,997)            (2,153 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

Net realized and unrealized gain (loss) on investments

       (33,838 )        (112,766 )        (4,211 )        (33,014 )        (75,713)            (2,196 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

   $     (20,150 )    $     (20,362 )    $     (2,856 )    $     (28,808 )    $     (26,030)        $     1,175  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        PUTNAM VT
INTERNATIONAL
GROWTH FUND		         PUTNAM VT
SMALL CAP
  VALUE FUND  		         PUTNAM VT
SUSTAINABLE
  FUTURE FUND  		         ROYCE CAPITAL
FUND - MICRO-
  CAP PORTFOLIO  		         ROYCE CAPITAL
FUND - SMALL-
  CAP PORTFOLIO  		               
    
  T. ROWE PRICE  
BLUE CHIP
GROWTH
PORTFOLIO		  
                                      (1)                        

INVESTMENT INCOME:

                        

Dividends

   $     27     $         586     $         981     $         $         3,483         $               
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET INVESTMENT INCOME (LOSS)

       27         586         981         0         3,483             0      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

                        

Net realized gain (loss) on sale of fund shares

       120         (1,770 )        4,487         150         (3,802)            18,363      

Realized gain distributions

       1,615         26,833         3,790             14,267             53,306      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Net realized gain (loss) on investments

       1,735         25,063         8,277         150         10,465             71,669      
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Change in net unrealized appreciation (depreciation) on investments

       (13,064 )        (44,547 )        (10,440 )        (119 )        (109,921)            (104,966)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

Net realized and unrealized gain (loss) on investments

       (11,329 )        (19,484 )        (2,163 )        31         (99,456)            (33,297)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

   $     (11,302 )    $         (18,898 )    $         (1,182 )    $         31     $         (95,973)        $         (33,297)     
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

      

 

 

  
 

(1)  For the period January 1, 2018 to May 23, 2018.

 

    

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

 

 

   

INVESTMENT DIVISIONS

  
        VAN ECK VIP
EMERGING
  MARKETS FUND  		         VAN ECK VIP
  GLOBAL HARD  
ASSETS FUND		             
    
VICTORY RS
SMALL CAP
  GROWTH EQUITY  
VIP SERIES
                            (1)

INVESTMENT INCOME:

            

Dividends

   $     153     $         $      
   

 

 

 

    

 

 

 

    

 

 

 

NET INVESTMENT INCOME (LOSS)

       153         0         0  
   

 

 

 

    

 

 

 

    

 

 

 

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:

            

Net realized gain (loss) on sale of fund shares

       780         (3,821 )     

Realized gain distributions

            
   

 

 

 

    

 

 

 

    

 

 

 

Net realized gain (loss) on investments

       780         (3,821 )        0  
   

 

 

 

    

 

 

 

    

 

 

 

Change in net unrealized appreciation (depreciation) on investments

       (15,003 )        (268,190 )        417  
   

 

 

 

    

 

 

 

    

 

 

 

Net realized and unrealized gain (loss) on investments

       (14,223 )        (272,011 )        417  
   

 

 

 

    

 

 

 

    

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

   $     (14,070 )    $         (272,011 )    $         417  
   

 

 

 

    

 

 

 

    

 

 

 

 

(1)  For the period December 24, 2018 to December 31, 2018.

 

 

The accompanying notes are an integral part of these financial statements.    (Concluded)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
            ALGER SMALL CAP GROWTH PORTFOLIO               
        AMERICAN CENTURY INVESTMENTS VP             
CAPITAL APPRECIATION FUND		               AMERICAN CENTURY INVESTMENTS VP
INCOME & GROWTH FUND
        2018       2017       2018       2017       2018       2017

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     $     $     $     $     44     $     139  

Net realized gain (loss) on investments

       4,521         (34,100 )        1,007         5,085         767         1,798  

Change in net unrealized appreciation (depreciation) on investments

       7,403         129,998         (14,839 )        5,141         (731 )        (815 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       11,924         95,898         (13,832 )        10,226         80         1,122  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

               45,000              

Transfers for contract benefits and terminations

       (5,185 )        (20,170 )        (6,284 )        (987 )        (4,647 )        (3,799 ) 

Net transfers

       21,196         13,357         59,987         (39,012 )         

Contract maintenance charges

       (152 )        (113 )        (273 )        (80 )        (14 )        (13 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       15,859         (6,926 )        98,430         (40,079 )        (4,661 )        (3,812 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       27,783         88,972         84,598         (29,853 )        (4,581 )        (2,690 ) 

NET ASSETS:

                        

Beginning of period

       427,700         338,728         89,077         118,930         4,602         7,292  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     455,483     $     427,700     $     173,675     $     89,077     $     21     $     4,602  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       617         344         7,218         6,442             1  

Units redeemed

       (486 )        (395 )        (481 )        (10,434 )        (188 )        (173 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       131         (51 )        6,737         (3,992 )        (188 )        (172 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
            
    
      AMERICAN CENTURY INVESTMENTS VP       
INFLATION PROTECTION FUND		             AMERICAN CENTURY INVESTMENTS VP      
INTERNATIONAL FUND		             AMERICAN CENTURY INVESTMENTS VP      
VALUE FUND
        2018       2017       2018       2017       2018       2017

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     18,104     $     13,883     $     664     $     503     $     15,172     $     11,402  

Net realized gain (loss) on investments

       (2,539 )        (208 )        3,851         292         29,658         6,559  

Change in net unrealized appreciation (depreciation) on investments

       (34,080 )        5,289         (12,711 )        13,688         (134,347 )        42,147  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (18,515 )        18,964         (8,196 )        14,483         (89,517 )        60,108  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

           1                 140,538         49,793  

Transfers for contract benefits and terminations

       (6,972 )        (5,591 )        (1,072 )        (1,002 )        (22,729 )        (31,527 ) 

Net transfers

       88,290         134,952         6,004         (8,873 )        34,822         192,981  

Contract maintenance charges

       (296 )        (263 )        (22 )        (22 )        (441 )        (383 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       81,022         129,099         4,910         (9,897 )        152,190         210,864  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       62,507         148,063         (3,286 )        4,586         62,673         270,972  

NET ASSETS:

                        

Beginning of period

       581,506         433,443         54,821         50,235         781,624         510,652  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     644,013     $     581,506     $     51,535     $     54,821     $     844,297     $     781,624  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       12,621         13,938         610         10         6,841         6,240  

Units redeemed

       (4,833 )        (1,260 )        (197 )        (778 )        (3,475 )        (1,082 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       7,788         12,678         413         (768 )        3,366         5,158  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
              AMERICAN FUNDS IS GLOBAL SMALL      
CAPITALIZATION FUND		             AMERICAN FUNDS IS GROWTH FUND                 
    
      AMERICAN FUNDS IS INTERNATIONAL       
FUND
        2018       2017       2018       2017       2018       2017

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     67     $     7     $     11,253     $     10,636     $     28,224     $     20,794  

Net realized gain (loss) on investments

       (50 )        (6,966 )        260,520         256,321         117,883         33,821  

Change in net unrealized appreciation (depreciation) on investments

       (23,879 )        9,079         (285,953 )        285,213         (366,366 )        395,485  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (23,862 )        2,120         (14,180 )        552,170         (220,259 )        450,100  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

               51,906         76,669         33,234         35,181  

Transfers for contract benefits and terminations

       (1,154 )        (16,221 )        (34,831 )        (32,731 )        (30,469 )        (31,767 ) 

Net transfers

       146,859         (23,971 )        123,088         (342,575 )        (102,891 )        (137,660 ) 

Contract maintenance charges

       (56 )        (6 )        (1,131 )        (857 )        (566 )        (691 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       145,649         (40,198 )        139,032         (299,494 )        (100,692 )        (134,937 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       121,787         (38,078 )        124,852         252,676         (320,951 )        315,163  

NET ASSETS:

                        

Beginning of period

       3,847         41,925         2,269,293         2,016,617         1,789,792         1,474,629  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     125,634     $     3,847     $     2,394,145     $     2,269,293     $     1,468,841     $     1,789,792  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       9,439         243         17,076         20,356         8,110         7,666  

Units redeemed

       (914 )        (3,297 )        (11,738 )        (33,328 )        (14,959 )        (18,667 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       8,525         (3,054 )        5,338         (12,972 )        (6,849 )        (11,001 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
              AMERICAN FUNDS IS NEW WORLD FUND             BLACKROCK
GLOBAL
ALLOCATION VI
FUND		             CLEARBRIDGE VARIABLE MID CAP      
PORTFOLIO
        2018       2017       2018       2018       2017
                        (1)               (2)

INCREASE (DECREASE) IN NET ASSETS:

                    

OPERATIONS:

                    

Net investment income (loss)

   $     15,157     $     15,713     $     218     $     272     $     59  

Net realized gain (loss) on investments

       57,707         (5,140 )        845         1,010         787  

Change in net unrealized appreciation (depreciation) on investments

       (330,745 )        401,117         (2,574 )        (8,144 )        445  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (257,881 )        411,690         (1,511 )        (6,862 )        1,291  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                    

Purchase payments received

       59,806         49,203             14,038      

Transfers for contract benefits and terminations

       (31,824 )        (23,852 )        (183 )        (1,776 )        (218 ) 

Net transfers

       (24,766 )        50,402         22,600         27,982         13,149  

Contract maintenance charges

       (562 )        (559 )        (2 )        (45 )        (15 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       2,654         75,194         22,415         40,199         12,916  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       (255,227 )        486,884         20,904         33,337         14,207  

NET ASSETS:

                    

Beginning of period

       1,823,016         1,336,132         0         14,207         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     1,567,789     $     1,823,016     $     20,904     $     47,544     $     14,207  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                    

Units issued

       11,282         14,098         1,934         3,357         1,155  

Units redeemed

       (11,248 )        (10,003 )        (18 )        (154 )        (22 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       34         4,095         1,916         3,203         1,133  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

(1)   For the period July 9, 2018 to December 31, 2018.

 

    
 

(2)   For the period March 24, 2017 to December 31, 2017.

 

    

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
              

        CLEARBRIDGE VARIABLE SMALL CAP         
GROWTH PORTFOLIO

                 COLUMBIA VARIABLE PORTFOLIO - SMALL         
CAP VALUE FUND		                 DAVIS FINANCIAL PORTFOLIO        
          2018         2017         2018         2017         2018         2017
                    (1)                                        

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $         $         $         278     $         614     $         520     $         276  

Net realized gain (loss) on investments

       8,970         1,113         10,542         16,800         6,554         3,253  

Change in net unrealized appreciation (depreciation) on investments

       (7,962 )        5,880         (23,079 )        (6,315 )        (11,011 )        2,047  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       1,008         6,993         (12,259 )        11,099         (3,937 )        5,576  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

       6,068         1,561         2,499         2,501         10,847         847  

Transfers for contract benefits and terminations

       (1,146 )        (501 )        (1,080 )        (1,467 )        (1,163 )        (373 ) 

Net transfers

       (2,761 )        41,474         (772 )        (63,714 )        (5,775 )        28,967  

Contract maintenance charges

       (65 )        (40 )        (12 )        (19 )        (59 )        (58 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       2,096         42,494         635         (62,699 )        3,850         29,383  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       3,104         49,487         (11,624 )        (51,600 )        (87 )        34,959  

NET ASSETS:

                        

Beginning of period

       49,487         0         67,998         119,598         40,871         5,912  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $         52,591     $         49,487     $         56,374     $         67,998     $         40,784     $         40,871  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       1,402         4,005         259         599         701         1,549  

Units redeemed

       (1,305 )        (491 )        (236 )        (2,684 )        (505 )        (174 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       97         3,514         23         (2,085 )        196         1,375  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

   

(1)   For the period January 26, 2017 to December 31, 2017.

          

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
                  DAVIS VALUE PORTFOLIO                     

DELAWARE VIP
  INTERNATIONAL  
VALUE EQUITY
SERIES

         DELAWARE VIP SMALL CAP VALUE SERIES        
          2018         2017         2018         2018         2017
                              (1)                    

INCREASE (DECREASE) IN NET ASSETS:

                    

OPERATIONS:

                    

Net investment income (loss)

   $         1,006     $         832     $               $         346     $         176  

Net realized gain (loss) on investments

       20,314         (56,770 )            1,603         1,032  

Change in net unrealized appreciation (depreciation) on investments

       (36,824 )        85,508         (15)         (12,190 )        3,151  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (15,504 )        29,570         (15)         (10,241 )        4,359  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                    

Purchase payments received

                   7,020         10,000  

Transfers for contract benefits and terminations

       (2,072 )        (3,463 )        (1)         (1,651 )        (1,098 ) 

Net transfers

           (248,097 )        94          (15,679 )        25,217  

Contract maintenance charges

       (10 )        (35 )            (99 )        (79 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       (2,082 )        (251,595 )        93          (10,409 )        34,040  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       (17,586 )        (222,025 )        78          (20,650 )        38,399  

NET ASSETS:

                    

Beginning of period

       116,006         338,031         0          52,370         13,971  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $         98,420     $         116,006     $         78      $         31,720     $         52,370  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                    

Units issued

       11         15         7          506         2,664  

Units redeemed

       (94 )        (11,847 )            (1,498 )        (93 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       (83 )        (11,832 )        7          (992 )        2,571  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

   

(1)   For the period May 29, 2018 to December 31, 2018.

      
     

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
                  DREYFUS STOCK INDEX FUND                     
        DREYFUS VIF INTERNATIONAL EQUITY         
PORTFOLIO		                 DWS CORE EQUITY        
VIP
          2018         2017         2018       2017         2017
                                                (1)

INCREASE (DECREASE) IN NET ASSETS:

                    

OPERATIONS:

                    

Net investment income (loss)

   $         449,486     $         403,469     $         423     $     944     $         253  

Net realized gain (loss) on investments

       1,214,655         896,450         282         7,326         2,506  

Change in net unrealized appreciation (depreciation) on investments

       (2,858,477 )        3,293,963         (9,353 )        7,172         (994 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (1,194,336 )        4,593,882         (8,648 )        15,442         1,765  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                    

Purchase payments received

       574,321         586,555         17,379         2,946         6,648  

Transfers for contract benefits and terminations

       (950,652 )        (407,482 )        (1,447 )        (1,079 )        (22,506 ) 

Net transfers

       672,882         (95,506 )        31,702         (88,873 )        314  

Contract maintenance charges

       (9,912 )        (9,539 )        (14 )        (87 )        (34 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       286,639         74,028         47,620         (87,093 )        (15,578 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       (907,697 )        4,667,910         38,972         (71,651 )        (13,813 ) 

NET ASSETS:

                    

Beginning of period

       25,894,701         21,226,791         13,069         84,720         13,813  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $         24,987,004     $         25,894,701     $         52,041     $     13,069     $         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                    

Units issued

       80,183         60,578         2,145         233         365  

Units redeemed

       (67,774 )        (56,695 )        (106 )        (4,204 )        (1,102 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       12,409         3,883         2,039         (3,971 )        (737 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

   

(1)  For the period January 1, 2017 to August 11, 2017.

      

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
            
      DWS CROCI® U.S.  VIP      		               DWS GLOBAL SMALL CAP VIP                     DWS HIGH INCOME VIP      
        2018       2017       2018       2017       2018       2017
                        (1)                        

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     7,698     $     3,955     $     370     $     0     $     5,173     $     3,475  

Net realized gain (loss) on investments

       17,984         (19,795 )        8,693         7,728         (126 )        (1,025 ) 

Change in net unrealized appreciation (depreciation) on investments

       (54,923 )        73,502         (5,268 )        15,307         (6,627 )        1,356  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (29,241 )        57,662         3,795         23,035         (1,580 )        3,806  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

           740             4,636         13,500         16,892  

Transfers for contract benefits and terminations

       (19,101 )        (3,983 )        (7,295 )        (2,106 )        (1,600 )        (1,803 ) 

Net transfers

       20,557         (56,163 )        (133,926 )        3,185         26         (10,055 ) 

Contract maintenance charges

       (136 )        (138 )        (31 )        (61 )        (41 )        (51 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       1,320         (59,544 )        (141,252 )        5,654         11,885         4,983  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       (27,921 )        (1,882 )        (137,457 )        28,689         10,305         8,789  

NET ASSETS:

                        

Beginning of period

       309,401         311,283         137,457         108,768         54,724         45,935  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     281,480     $     309,401     $     0     $     137,457     $     65,029     $     54,724  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       3,539         1,693         240         714         766         993  

Units redeemed

       (3,223 )        (6,226 )        (5,736 )        (438 )        (114 )        (702 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       316         (4,533 )        (5,496 )        276         652         291  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

(1) For the period January 1, 2018 to June 11, 2018.

 

    

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
            DWS SMALL CAP INDEX VIP               DWS SMALL MID CAP VALUE VIP               
  FEDERATED HIGH  
INCOME BOND
FUND II
        2018       2017       2018       2017       2017
                                        (1)

INCREASE (DECREASE) IN NET ASSETS:

                    

OPERATIONS:

                    

Net investment income (loss)

   $     65,936     $     33,285     $     23,823     $     11,871     $     1,965  

Net realized gain (loss) on investments

       544,504         186,357         326,748         70,578         1,088  

Change in net unrealized appreciation (depreciation) on investments

       (1,362,257 )        501,219         (624,251 )        78,095         (1,296 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (751,817 )        720,861         (273,680 )        160,544         1,757  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                    

Purchase payments received

       20,453         45,980         21,810         34,836      

Transfers for contract benefits and terminations

       (158,266 )        (81,712 )        (87,669 )        (25,541 )        (289 ) 

Net transfers

       249,625         2,787,680         201,332         (18,413 )        (30,101 ) 

Contract maintenance charges

       (5,750 )        (3,326 )        (337 )        (364 )        (30 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       106,062         2,748,622         135,136         (9,482 )        (30,420 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       (645,755 )        3,469,483         (138,544 )        151,062         (28,663 ) 

NET ASSETS:

                    

Beginning of period

       6,558,692         3,089,209         1,694,938         1,543,876         28,663  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     5,912,937     $     6,558,692     $     1,556,394     $     1,694,938     $     0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                    

Units issued

       19,476         140,009         12,963         6,924         2  

Units redeemed

       (15,298 )        (16,293 )        (6,985 )        (7,355 )        (1,005 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       4,178         123,716         5,978         (431 )        (1,003 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

(1) For the period January 1, 2017 to August 4, 2017.

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
            FEDERATED KAUFMANN FUND II               FIDELITY VIP CONTRAFUND PORTFOLIO               
    FIDELITY VIP GROWTH PORTFOLIO    
        2018       2017       2018       2017       2018       2017

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     $     $     12,939     $     20,819     $     356     $     938  

Net realized gain (loss) on investments

       12,821         8,523         292,107         228,242         115,094         104,855  

Change in net unrealized appreciation (depreciation) on investments

       (8,023 )        12,046         (495,777 )        248,663         (127,070 )        195,072  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       4,798         20,569         (190,731 )        497,724         (11,620 )        300,865  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

               15,645         57,519          

Transfers for contract benefits and terminations

       (2,167 )        (1,156 )        (67,648 )        (47,711 )        (206,305 )        (39,426 ) 

Net transfers

       5,653         52,099         32,398         29,212         166,437         (422,435 ) 

Contract maintenance charges

       (184 )        (105 )        (1,403 )        (1,149 )        (447 )        (526 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       3,302         50,838         (21,008 )        37,871         (40,315 )        (462,387 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       8,100         71,407         (211,739 )        535,595         (51,935 )        (161,522 ) 

NET ASSETS:

                        

Beginning of period

       136,238         64,831         2,871,987         2,336,392         790,607         952,129  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     144,338     $     136,238     $     2,660,248     $     2,871,987     $     738,672     $     790,607  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       558         5,193         6,918         14,778         9,677         4,997  

Units redeemed

       (451 )        (3,126 )        (7,561 )        (13,888 )        (11,769 )        (26,168 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       107         2,067         (643 )        890         (2,092 )        (21,171 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
            
    
    FIDELITY VIP INVESTMENT GRADE BOND    
PORTFOLIO		       FIDELITY VIP MID CAP PORTFOLIO               GOLDMAN SACHS VIT MID CAP VALUE    
FUND
        2018       2017       2018       2017       2018       2017

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     12,042     $     12,048     $     4,188     $     4,296     $     678     $     149  

Net realized gain (loss) on investments

       (4,295 )        4,915         89,299         32,802         6,166         1,472  

Change in net unrealized appreciation (depreciation) on investments

       (12,951 )        8,340         (253,140 )        129,091         (12,967 )        26  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (5,204 )        25,303         (159,653 )        166,189         (6,123 )        1,647  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

               39,171         86,713         330         100  

Transfers for contract benefits and terminations

       (237,353 )        (45,446 )        (221,614 )        (23,930 )        (736 )        (414 ) 

Net transfers

       27,317         (276,758 )        275,312         (240,902 )        30,483         9,391  

Contract maintenance charges

       (433 )        (450 )        (473 )        (358 )        (25 )        (20 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       (210,469 )        (322,654 )        92,396         (178,477 )        30,052         9,057  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       (215,673 )        (297,351 )        (67,257 )        (12,288 )        23,929         10,704  

NET ASSETS:

                        

Beginning of period

       496,134         793,485         952,385         964,673         20,908         10,204  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     280,461     $     496,134     $     885,128     $     952,385     $     44,837     $     20,908  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       2,636         4,963         6,673         2,411         2,185         1,375  

Units redeemed

       (12,466 )        (20,116 )        (5,110 )        (6,229 )        (280 )        (750 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       (9,830 )        (15,153 )        1,563         (3,818 )        1,905         625  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
          GREAT-WEST AGGRESSIVE PROFILE FUND             
GREAT-WEST
AGGRESSIVE
PROFILE I FUND		         GREAT-WEST ARIEL MID CAP VALUE FUND  
        2018       2017       2017       2018       2017
                (1)       (2)                

INCREASE (DECREASE) IN NET ASSETS:

                    

OPERATIONS:

                    

Net investment income (loss)

   $     29,520     $     13,942     $     $     3,006     $     11,262  

Net realized gain (loss) on investments

       136,010         43,782         15,528         (19,466 )        38,356  

Change in net unrealized appreciation (depreciation) on investments

       (294,737 )        8,508         36,780         (48,351 )        20,577  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (129,207 )        66,232         52,308         (64,811 )        70,195  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                    

Purchase payments received

       241,442         4,600         248,324          

Transfers for contract benefits and terminations

       (32,697 )        (5,704 )        (33,458 )        (191,148 )        (36,495 ) 

Net transfers

       339,007         600,854         (779,393 )        54,777         (230,541 ) 

Contract maintenance charges

       (680 )        (264 )        (360 )        (485 )        (689 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       547,072         599,486         (564,887 )        (136,856 )        (267,725 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       417,865         665,718         (512,579 )        (201,667 )        (197,530 ) 

NET ASSETS:

                    

Beginning of period

       665,718         0         512,579         398,480         596,010  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     1,083,583     $     665,718     $     0     $     196,813     $     398,480  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                    

Units issued

       53,417         73,871         15,852         1,235         1,584  

Units redeemed

       (5,214 )        (14,852 )        (37,800 )        (4,459 )        (7,072 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       48,203         59,019         (21,948 )        (3,224 )        (5,488 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

(1) For the period July 11, 2017 to December 31, 2017.

 

    
 

(2) For the period January 1, 2017 to July 11, 2017.

 

    

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
            GREAT-WEST BOND INDEX FUND               GREAT-WEST CONSERVATIVE PROFILE    
FUND		           
GREAT-WEST
  CONSERVATIVE  
PROFILE I FUND
        2018       2017       2018       2017       2017
                                (1)       (2)

INCREASE (DECREASE) IN NET ASSETS:

                    

OPERATIONS:

                    

Net investment income (loss)

   $     26,744     $     21,153     $     13,422     $     1,657     $  

Net realized gain (loss) on investments

       (5,723 )        (686 )        13,557         2,225         (664 ) 

Change in net unrealized appreciation (depreciation) on investments

       (31,012 )        40,210         (25,786 )        102         7,529  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (9,991 )        60,677         1,193         3,984         6,865  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                    

Purchase payments received

       5,189         11,488         19,132         1,307         38,005  

Transfers for contract benefits and terminations

       (99,955 )        (25,975 )        (4,299 )        (15,446 )        (205,955 ) 

Net transfers

       11,412         62,083         680,483         105,997         (207,541 ) 

Contract maintenance charges

       (745 )        (837 )        (53 )        (31 )        (85 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       (84,099 )        46,759         695,263         91,827         (375,576 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       (94,090 )        107,436         696,456         95,811         (368,711 ) 

NET ASSETS:

                    

Beginning of period

       2,070,084         1,962,648         95,811         0         368,711  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     1,975,994     $     2,070,084     $     792,267     $     95,811     $     0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                    

Units issued

       7,989         7,861         70,154         14,609         2,035  

Units redeemed

       (14,011 )        (4,538 )        (872 )        (5,418 )        (18,426 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       (6,022 )        3,323         69,282         9,191         (16,391 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

(1)  For the period May 12, 2017 to December 31, 2017.

 

    
 

(2)  For the period January 1, 2017 to July 11, 2017.

 

    

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
            GREAT-WEST CORE BOND FUND           GREAT-WEST
EMERGING
  MARKETS EQUITY  
FUND		           GREAT-WEST GLOBAL BOND FUND    
        2018       2017       2018       2018       2017
                        (1)                

INCREASE (DECREASE) IN NET ASSETS:

                    

OPERATIONS:

                    

Net investment income (loss)

   $     56,265     $     46,068     $     17     $     121,094     $     83,713  

Net realized gain (loss) on investments

       (1,495 )        (1,536 )            (103,385 )        (31,538 ) 

Change in net unrealized appreciation (depreciation) on investments

       (83,114 )        46,125         32         (21,154 )        31,251  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (28,344 )        90,657         49         (3,445 )        83,426  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                    

Purchase payments received

       7,787         5,893             346,658         364,555  

Transfers for contract benefits and terminations

       (26,542 )        (25,469 )            (139,375 )        (82,332 ) 

Net transfers

       66,125         (44,295 )        2,036         (443,735 )        402,191  

Contract maintenance charges

       (105 )        (106 )            (1,444 )        (1,561 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       47,265         (63,977 )        2,036         (237,896 )        682,853  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       18,921         26,680         2,085         (241,341 )        766,279  

NET ASSETS:

                    

Beginning of period

       2,375,540         2,348,860         0         5,014,169         4,247,890  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     2,394,461     $     2,375,540     $     2,085     $     4,772,828     $     5,014,169  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                    

Units issued

       6,239         1,163         253         39,330         68,439  

Units redeemed

       (2,930 )        (5,618 )            (55,358 )        (20,458 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       3,309         (4,455 )        253         (16,028 )        47,981  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

(1) For the period December 24, 2018 to December 31, 2018.

 

    

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

   

INVESTMENT DIVISIONS

  
                GREAT-WEST GOVERNMENT MONEY         
MARKET FUND		       GREAT-WEST INTERNATIONAL INDEX FUND               GREAT-WEST INTERNATIONAL VALUE         
FUND
        2018       2017       2018       2017       2018       2017

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     145,671     $     46,298     $     1,103     $     942     $     72,240     $     40,453  

Net realized gain (loss) on investments

               1,020         1,847         1,044,834         188,515  

Change in net unrealized appreciation (depreciation) on investments

               (9,242 )        6,383         (2,000,998 )        687,336  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       145,671         46,298         (7,119 )        9,172         (883,924 )        916,304  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

       5,705,272         5,214,202         1,034         4,180         89,305         65,526  

Transfers for contract benefits and terminations

       (730,178 )        (1,893,911 )        (650 )        (7,847 )        (60,859 )        (52,415 ) 

Net transfers

       (7,257,195 )        (5,717,936 )        11,544         39,811         1,686,700         (260,122 ) 

Contract maintenance charges

       (8,130 )        (14,927 )        (26 )        (28 )        (1,829 )        (1,324 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       (2,290,231 )        (2,412,572 )        11,902         36,116         1,713,317         (248,335 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       (2,144,560 )        (2,366,274 )        4,783         45,288         829,393         667,969  

NET ASSETS:

                        

Beginning of period

       10,836,733         13,203,007         49,381         4,093         4,235,009         3,567,040  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     8,692,173     $     10,836,733     $     54,164     $     49,381     $     5,064,402     $     4,235,009  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       740,238         700,013         1,262         4,515         143,640         32,477  

Units redeemed

       (913,478 )        (885,225 )        (220 )        (1,094 )        (15,506 )        (52,533 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       (173,240 )        (185,212 )        1,042         3,421         128,134         (20,056 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

   

INVESTMENT DIVISIONS

  
                GREAT-WEST LARGE CAP GROWTH FUND                    GREAT-WEST LIFETIME 2015 FUND                   GREAT-WEST LIFETIME 2020 FUND         
        2018       2017       2018       2017       2018       2017
                                                (1)

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     551     $     1,517     $     33,724     $     8,454     $     12,767     $     1,951  

Net realized gain (loss) on investments

       55,387         13,147         75,121         19,099         13,395         1,252  

Change in net unrealized appreciation (depreciation) on investments

       (57,932 )        34,888         (194,154 )        15,349         (59,202 )        1,633  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (1,994 )        49,552         (85,309 )        42,902         (33,040 )        4,836  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

       16,706         21,829         519,256         486,821         56,964         35,199  

Transfers for contract benefits and terminations

       (80,141 )        (6,200 )        (74,373 )        (32,730 )        (11,530 )        (2,812 ) 

Net transfers

       48,994             564,487         (1 )        362,936         31,941  

Contract maintenance charges

       (81 )        (85 )        (676 )        (322 )        (857 )        (32 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       (14,522 )        15,544         1,008,694         453,768         407,513         64,296  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       (16,516 )        65,096         923,385         496,670         374,473         69,132  

NET ASSETS:

                        

Beginning of period

       223,566         158,470         723,613         226,943         69,132         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     207,050     $     223,566     $     1,646,998     $     723,613     $     443,605     $     69,132  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       2,171         797         107,204         43,732         36,822         8,344  

Units redeemed

       (2,699 )        (242 )        (20,963 )        (3,055 )        (3,096 )        (2,479 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       (528 )        555         86,241         40,677         33,726         5,865  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

      (1)  For the period January 30, 2017 to December 31, 2017.      

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

        INVESTMENT DIVISIONS
                GREAT-WEST LIFETIME 2025 FUND                        GREAT-WEST LIFETIME 2030 FUND                        GREAT-WEST LIFETIME 2035 FUND         
        2018       2017       2018       2017       2018       2017

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     47,013     $     27,016     $     32,549     $     23,076     $     26,457     $     8,546  

Net realized gain (loss) on investments

       161,078         67,998         48,108         7,194         140,089         25,714  

Change in net unrealized appreciation (depreciation) on investments

       (337,308 )        79,203         (180,929 )        37,018         (320,459 )        30,524  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (129,217 )        174,217         (100,272 )        67,288         (153,913 )        64,784  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

       578,318         565,322         230,644         401,266         359,831         194,219  

Transfers for contract benefits and terminations

       (62,561 )        (42,485 )        (30,531 )        (31,133 )        (34,486 )        (13,842 ) 

Net transfers

       (31,187 )        208,685         293,127         289,485         826,873         58,459  

Contract maintenance charges

       (1,830 )        (1,210 )        (1,663 )        (607 )        (1,128 )        (423 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       482,740         730,312         491,577         659,011         1,151,090         238,413  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       353,523         904,529         391,305         726,299         997,177         303,197  

NET ASSETS:

                        

Beginning of period

       1,805,857         901,328         819,623         93,324         551,907         248,710  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     2,159,380     $     1,805,857     $     1,210,928     $     819,623     $     1,549,084     $     551,907  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       82,570         69,756         41,681         60,717         102,067         23,116  

Units redeemed

       (42,141 )        (4,955 )        (2,843 )        (3,024 )        (12,012 )        (2,582 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       40,429         64,801         38,838         57,693         90,055         20,534  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

   

INVESTMENT DIVISIONS

  
                GREAT-WEST LIFETIME 2040 FUND           GREAT-WEST LIFETIME 2045 FUND                    GREAT-WEST LIFETIME 2050 FUND         
        2018       2017       2018       2017       2018       2017
                                                (1)

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     18,311     $     19,447     $     8,370     $     5,140     $     6,679     $     6,057  

Net realized gain (loss) on investments

       21,512         19,729         53,073         19,302         11,983         1,969  

Change in net unrealized appreciation (depreciation) on investments

       (115,822 )        15,456         (107,438 )        21,325         (44,541 )        18,983  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (75,999 )        54,632         (45,995 )        45,767         (25,879 )        27,009  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

       56,472         96,965         70,211         25,726             6,916  

Transfers for contract benefits and terminations

       (15,220 )        (12,194 )        (44,485 )        (6,341 )        (2,904 )        (2,328 ) 

Net transfers

       138,819         250,022         170,516         134,161         61,304         164,200  

Contract maintenance charges

       (814 )        (350 )        (1,321 )        (386 )        (94 )        (65 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       179,257         334,443         194,921         153,160         58,306         168,723  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       103,258         389,075         148,926         198,927         32,427         195,732  

NET ASSETS:

                        

Beginning of period

       476,581         87,506         336,780         137,853         195,732         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     579,839     $     476,581     $     485,706     $     336,780     $     228,159     $     195,732  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       21,835         43,847         24,263         19,037         5,565         15,416  

Units redeemed

       (9,422 )        (14,785 )        (8,710 )        (5,696 )        (1,193 )        (268 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       12,413         29,062         15,553         13,341         4,372         15,148  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

      (1)  For the period January 30, 2017 to December 31, 2017.      

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

   

 

   INVESTMENT DIVISIONS
                GREAT-WEST LIFETIME 2055 FUND                        GREAT-WEST LOOMIS SAYLES SMALL CAP         
VALUE FUND		               GREAT-WEST MID CAP VALUE FUND         
        2018       2017       2018       2017       2018       2017

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     2,833     $     2,181     $     $     604     $     4,123     $     3,897  

Net realized gain (loss) on investments

       13,563         5,468         22,747         56,945         2,357         1,965  

Change in net unrealized appreciation (depreciation) on investments

       (35,180 )        14,247         (161,852 )        19,957         (16,628 )        (630 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (18,784 )        21,896         (139,105 )        77,506         (10,148 )        5,232  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

       22,128         21,123         22,064         14,593         45,434         25,157  

Transfers for contract benefits and terminations

       (3,293 )        (2,533 )        (11,718 )        (11,510 )        (4,309 )        (1,932 ) 

Net transfers

       29,854         47,218         53,650         16,197         251         21,068  

Contract maintenance charges

       (200 )        (118 )        (253 )        (299 )        (43 )        (34 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       48,489         65,690         63,743         18,981         41,333         44,259  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       29,705         87,586         (75,362 )        96,487         31,185         49,491  

NET ASSETS:

                        

Beginning of period

       143,256         55,670         831,155         734,668         50,188         697  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     172,961     $     143,256     $     755,793     $     831,155     $     81,373     $     50,188  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       4,308         6,297         3,940         3,903         3,715         3,904  

Units redeemed

       (536 )        (374 )        (2,252 )        (3,307 )        (490 )        (167 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       3,772         5,923         1,688         596         3,225         3,737  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

   

INVESTMENT DIVISIONS

  
                GREAT-WEST MODERATE PROFILE FUND                GREAT-WEST
MODERATE
    PROFILE I FUND    		           GREAT-WEST MODERATELY AGGRESSIVE    
PROFILE FUND		       GREAT-WEST
MODERATELY
AGGRESSIVE
    PROFILE I FUND    
        2018       2017       2017       2018       2017       2017
                (1)       (2)               (1)       (2)

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     8,151     $     2,440     $     $     2,168     $     610     $  

Net realized gain (loss) on investments

       17,643         8,210         2,384         6,291         3,328         1,176  

Change in net unrealized appreciation (depreciation) on investments

       (44,833 )        (259 )        12,673         (15,179 )        123         4,423  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (19,039 )        10,391         15,057         (6,720 )        4,061         5,599  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

       53,000         19,910         16,265         9,030         2,780         4,209  

Transfers for contract benefits and terminations

       (16,473 )        (2,582 )        (34,777 )        (4,377 )        (611 )        (969 ) 

Net transfers

       199,206         39,121         (266,977 )        59,678         13,457         (75,032 ) 

Contract maintenance charges

       (227 )        (98 )        (132 )        (69 )        (32 )        (38 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       235,506         56,351         (285,621 )        64,262         15,594         (71,830 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       216,467         66,742         (270,564 )        57,542         19,655         (66,231 ) 

NET ASSETS:

                        

Beginning of period

       66,742         0         270,564         19,655         0         66,231  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     283,209     $     66,742     $     0     $     77,197     $     19,655     $     0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       26,528         25,727         3,000         6,938         9,098         712  

Units redeemed

       (4,714 )        (19,546 )        (14,564 )        (1,100 )        (7,303 )        (3,551 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       21,814         6,181         (11,564 )        5,838         1,795         (2,839 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

(1) For the period July 11, 2017 to December 31, 2017.

      
 

(2) For the period January 1, 2017 to July 31, 2017.

      

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

   

INVESTMENT DIVISIONS

  
        GREAT-WEST MODERATELY
        CONSERVATIVE PROFILE FUND         		       GREAT-WEST
MODERATELY
CONSERVATIVE
    PROFILE I FUND    		           GREAT-WEST MULTI-SECTOR BOND FUND     
        2018       2017       2017       2018       2017
                (1)       (2)                

INCREASE (DECREASE) IN NET ASSETS:

                    

OPERATIONS:

                    

Net investment income (loss)

   $     2,445     $     895     $     $     14,683     $     10,038  

Net realized gain (loss) on investments

       3,783         1,831         2,726         9,688         (19,203 ) 

Change in net unrealized appreciation (depreciation) on investments

       (11,164 )        279         (374 )        (45,222 )        47,567  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (4,936 )        3,005         2,352         (20,851 )        38,402  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                    

Purchase payments received

       3,000         4,163         9,902         93,852         122,177  

Transfers for contract benefits and terminations

       (2,678 )        (903 )        (1,364 )        (141,974 )        (277,759 ) 

Net transfers

       38,088         47,687         (40,999 )        3,042         (98,868 ) 

Contract maintenance charges

       (50 )        (24 )        (28 )        (384 )        (394 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       38,360         50,923         (32,489 )        (45,464 )        (254,844 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       33,424         53,928         (30,137 )        (66,315 )        (216,442 ) 

NET ASSETS:

                    

Beginning of period

       53,928         0         30,137         573,196         789,638  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     87,352     $     53,928     $     0     $     506,881     $     573,196  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                    

Units issued

       4,153         7,730         1,890         3,246         4,000  

Units redeemed

       (593 )        (2,645 )        (3,220 )        (4,523 )        (10,780 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       3,560         5,085         (1,330 )        (1,277 )        (6,780 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

(1) For the period January 30, 2017 to December 31, 2017.

 

    
 

(2) For the period January 1, 2017 to July 31, 2017.

 

    

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

   

INVESTMENT DIVISIONS

  
            GREAT-WEST REAL ESTATE INDEX FUND             GREAT-WEST S&P MID CAP 400® INDEX       
FUND		         GREAT-WEST S&P SMALL CAP 600® INDEX  
FUND
        2018       2017       2018       2017       2018       2017
                (1)                                

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     2,720     $     455     $     9,869     $     6,073     $     2,053     $     2,185  

Net realized gain (loss) on investments

       3,765         2,088         106,151         58,268         1,328         16,024  

Change in net unrealized appreciation (depreciation) on investments

       (19,266 )        (386 )        (323,188 )        71,457         (19,264 )        (2,304 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (12,781 )        2,157         (207,168 )        135,798         (15,883 )        15,905  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

       31,766         13,533         69,447         33,473          

Transfers for contract benefits and terminations

       (2,936 )        (1,387 )        (22,887 )        (15,753 )        (143,890 )        (21,874 ) 

Net transfers

       115,920         48,531         408,350         567,485         32,220         19,126  

Contract maintenance charges

       (46 )        (23 )        (700 )        (590 )        (243 )        (191 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       144,704         60,654         454,210         584,615         (111,913 )        (2,939 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       131,923         62,811         247,042         720,413         (127,796 )        12,966  

NET ASSETS:

                        

Beginning of period

       62,811         0         1,140,631         420,218         141,874         128,908  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     194,734     $     62,811     $     1,387,673     $     1,140,631     $     14,078     $     141,874  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       12,227         5,071         33,469         43,847         2,299         1,951  

Units redeemed

       (1,432 )        (292 )        (8,932 )        (6,360 )        (10,685 )        (2,184 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       10,795         4,779         24,537         37,487         (8,386 )        (233 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

  (1) For the period January 30, 2017 to December 31, 2017.      

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

   

INVESTMENT DIVISIONS

  
              GREAT-WEST SHORT DURATION BOND      
FUND		       GREAT-WEST
SMALL CAP
    GROWTH FUND    		               GREAT-WEST T. ROWE PRICE EQUITY         
INCOME FUND
        2018       2017       2018       2018       2017
                        (1)                

INCREASE (DECREASE) IN NET ASSETS:

                    

OPERATIONS:

                    

Net investment income (loss)

   $     143,678     $     92,435     $     $     5,154     $     14,624  

Net realized gain (loss) on investments

       (11,424 )        738         2,882         103,035         79,995  

Change in net unrealized appreciation (depreciation) on investments

       (89,020 )        52,048             (272,081 )        156,687  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       43,234         145,221         2,882         (163,892 )        251,306  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                    

Purchase payments received

       310,155         333,886             13,015         13,271  

Transfers for contract benefits and terminations

       (181,394 )        (104,636 )        (150 )        (21,707 )        (21,920 ) 

Net transfers

       (2,113,095 )        1,978,489         (2,727 )        42,356         (20,493 ) 

Contract maintenance charges

       (2,040 )        (2,224 )        (5 )        (330 )        (366 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       (1,986,374 )        2,205,515         (2,882 )        33,334         (29,508 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       (1,943,140 )        2,350,736         0         (130,558 )        221,798  

NET ASSETS:

                    

Beginning of period

       9,588,374         7,237,638         0         1,755,157         1,533,359  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     7,645,234     $     9,588,374     $     0     $     1,624,599     $     1,755,157  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                    

Units issued

       57,670         172,554         7,772         4,740         4,421  

Units redeemed

       (199,743 )        (14,922 )        (7,772 )        (3,375 )        (5,333 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       (142,073 )        157,632         0         1,365         (912 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

(1) For the period June 11, 2018 to July 13, 2018.

 

    

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

        INVESTMENT DIVISIONS
              GREAT-WEST T. ROWE PRICE MID CAP       
GROWTH FUND		               GREAT-WEST U.S. GOVERNMENT         
SECURITIES FUND		               INVESCO V.I. CORE EQUITY FUND        
        2018       2017       2018       2017       2018       2017

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     3,399     $     10,024     $     63,321     $     49,214     $     1,646     $     1,606  

Net realized gain (loss) on investments

       377,686         260,050         (37,973 )        (16,297 )        (17,949 )        6,060  

Change in net unrealized appreciation (depreciation) on investments

       (428,922 )        371,206         (11,748 )        48,751         (1,664 )        12,791  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (47,837 )        641,280         13,600         81,668         (17,967 )        20,457  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

       297,046         293,618             1          

Transfers for contract benefits and terminations

       (101,006 )        (742,652 )        (455,239 )        (155,168 )        (147,837 )        (26,511 ) 

Net transfers

       495,339         (78,063 )        (160,502 )        (198,539 )        25,447         19,145  

Contract maintenance charges

       (1,719 )        (1,680 )        (1,229 )        (1,615 )        (249 )        (212 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       689,660         (528,777 )        (616,970 )        (355,321 )        (122,639 )        (7,578 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       641,823         112,503         (603,370 )        (273,653 )        (140,606 )        12,879  

NET ASSETS:

                        

Beginning of period

       3,121,151         3,008,648         3,567,175         3,840,828         159,994         147,115  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     3,762,974     $     3,121,151     $     2,963,805     $     3,567,175     $     19,388     $     159,994  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       36,970         20,526         1,514         2,798         1,135         1,249  

Units redeemed

       (20,131 )        (34,858 )        (29,513 )        (19,072 )        (7,016 )        (1,525 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       16,839         (14,332 )        (27,999 )        (16,274 )        (5,881 )        (276 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

   

INVESTMENT DIVISIONS

  
       

INVESCO V.I.
DIVERSIFIED
    DIVIDEND FUND    

         INVESCO V.I. GLOBAL REAL ESTATE FUND                 INVESCO V.I. HEALTH CARE FUND        
       

2017

       2018       2017       2018       2017
        (1)                                

INCREASE (DECREASE) IN NET ASSETS:

                    

OPERATIONS:

                    

Net investment income (loss)

   $          $     60,962     $     51,523     $     $     427  

Net realized gain (loss) on investments

           31,555         28,727         11,449         (16,791 ) 

Change in net unrealized appreciation (depreciation) on investments

           (191,911 )        114,799         (10,473 )        33,271  
   

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

     0           (99,394 )        195,049         976         16,907  
   

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                    

Purchase payments received

           11,496         23,697          

Transfers for contract benefits and terminations

     (4)          (49,401 )        (22,497 )        (1,091 )        (1,499 ) 

Net transfers

           (104,443 )        23,768         (7,052 )        (38,991 ) 

Contract maintenance charges

           (430 )        (450 )        (100 )        (154 ) 
   

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

     (4)          (142,778 )        24,518         (8,243 )        (40,644 ) 
   

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

     (4)          (242,172 )        219,567         (7,267 )        (23,737 ) 

NET ASSETS:

                    

Beginning of period

     4           1,713,216         1,493,649         88,372         112,109  
   

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $   0       $     1,471,044     $     1,713,216     $     81,105     $     88,372  
   

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                    

Units issued

           2,264         1,887         31         1,799  

Units redeemed

           (5,968 )        (1,260 )        (293 )        (3,161 ) 
   

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

     0           (3,704 )        627         (262 )        (1,362 ) 
   

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

(1) For the period January 1, 2017 to January 2, 2017.

 

    

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

        INVESTMENT DIVISIONS
              INVESCO V.I. INTERNATIONAL GROWTH      
FUND		     INVESCO V.I. MID CAP CORE EQUITY FUND             INVESCO V.I. TECHNOLOGY FUND        
        2018       2017       2018       2017       2018       2017

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     73,520     $     45,965     $     1,153     $     916     $     $  

Net realized gain (loss) on investments

       64,204         56,213         31,271         23,871         19,848         15,853  

Change in net unrealized appreciation (depreciation) on investments

       (673,676 )        538,854         (58,430 )        13,686         (16,559 )        37,969  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (535,952 )        641,032         (26,006 )        38,473         3,289         53,822  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

       47,661         73,103             1          

Transfers for contract benefits and terminations

       (59,548 )        (43,586 )        (1,895 )        (10,418 )        (2,021 )        (2,358 ) 

Net transfers

       217,646         (17,034 )        44,394         (260,470 )        (41,043 )        (53,234 ) 

Contract maintenance charges

       (1,095 )        (1,100 )        (121 )        (112 )        (188 )        (242 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       204,664         11,383         42,378         (270,999 )        (43,252 )        (55,834 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       (331,288 )        652,415         16,372         (232,526 )        (39,963 )        (2,012 ) 

NET ASSETS:

                        

Beginning of period

       3,431,746         2,779,331         179,809         412,335         169,423         171,435  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     3,100,458     $     3,431,746     $     196,181     $     179,809     $     129,460     $     169,423  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       26,618         23,130         2,586         4,042         98         2,031  

Units redeemed

       (14,637 )        (22,397 )        (954 )        (15,611 )        (1,691 )        (4,548 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       11,981         733         1,632         (11,569 )        (1,593 )        (2,517 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
            

        JANUS HENDERSON VIT BALANCED         
PORTFOLIO

               JANUS HENDERSON VIT FLEXIBLE BOND         
PORTFOLIO     		               JANUS HENDERSON VIT FORTY PORTFOLIO         
        2018       2017       2018       2017       2018       2017

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     46,506     $     29,410     $     58,472     $     63,017     $     39,393     $  

Net realized gain (loss) on investments

       194,837         59,481         (68,879 )        (24,694 )        697,113         483,142  

Change in net unrealized appreciation (depreciation) on investments

       (240,131 )        212,693         2,799         43,380         (658,232 )        361,454  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       1,212         301,584         (7,608 )        81,703         78,274         844,596  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

       342,161         300,167         103,001         102,679         83,210         69,458  

Transfers for contract benefits and terminations

       (128,529 )        (54,076 )        (204,353 )        (57,760 )        (150,243 )        (69,366 ) 

Net transfers

       (306,594 )        564,049         317,228         (516,983 )        516,133         (2,340,257 ) 

Contract maintenance charges

       (1,490 )        (1,112 )        (800 )        (1,127 )        (2,414 )        (3,535 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       (94,452 )        809,028         215,076         (473,191 )        446,686         (2,343,700 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       (93,240 )        1,110,612         207,468         (391,488 )        524,960         (1,499,104 ) 

NET ASSETS:

                        

Beginning of period

       2,293,664         1,183,052         1,597,452         1,988,940         1,731,815         3,230,919  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     2,200,424     $     2,293,664     $     1,804,920     $     1,597,452     $     2,256,775     $     1,731,815  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       30,951         51,874         66,110         32,349         41,613         9,308  

Units redeemed

       (34,472 )        (22,815 )        (57,625 )        (49,770 )        (30,837 )        (64,826 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       (3,521 )        29,059         8,485         (17,421 )        10,776         (55,518 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
            

        JANUS HENDERSON VIT GLOBAL  RESEARCH
PORTFOLIO

               JANUS HENDERSON VIT GLOBAL         
TECHNOLOGY PORTFOLIO		               JANUS HENDERSON VIT OVERSEAS         
PORTFOLIO
        2018       2017       2018       2017       2018       2017

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     9,779     $     6,453     $     7,427     $     1,293     $     1,016     $     897  

Net realized gain (loss) on investments

       12,476         16,944         47,228         44,746         (55 )        (2,864 ) 

Change in net unrealized appreciation (depreciation) on investments

       (79,514 )        152,187         (128,669 )        46,427         (9,656 )        16,575  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (57,259 )        175,584         (74,014 )        92,466         (8,695 )        14,608  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

               94,558         71,609             1  

Transfers for contract benefits and terminations

       (38,891 )        (13,747 )        (17,151 )        (8,615 )        (1,036 )        (7,250 ) 

Net transfers

       53,965         23,740         584,949         64,782             (4,309 ) 

Contract maintenance charges

       (384 )        (395 )        (513 )        (291 )        (5 )        (5 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       14,690         9,598         661,843         127,485         (1,041 )        (11,563 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       (42,569 )        185,182         587,829         219,951         (9,736 )        3,045  

NET ASSETS:

                        

Beginning of period

       799,875         614,693         333,933         113,982         59,094         56,049  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     757,306     $     799,875     $     921,762     $     333,933     $     49,358     $     59,094  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       7,320         19,147         15,675         6,129         5         5  

Units redeemed

       (6,364 )        (17,775 )        (1,801 )        (2,076 )        (42 )        (500 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       956         1,372         13,874         4,053         (37 )        (495 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
              

JPMORGAN
        INSURANCE TRUST         
INTREPID MID CAP
PORTFOLIO

               LORD ABBETT SERIES DEVELOPING         
GROWTH PORTFOLIO		               MFS VIT III MID CAP         
VALUE PORTFOLIO		           MFS VIT MID CAP        
GROWTH SERIES
          2017       2018       2017       2018       2018
          (1)                       (2)       (2)

INCREASE (DECREASE) IN NET ASSETS:

                    

OPERATIONS:

                    

Net investment income (loss)

   $         $     $     $     $  

Net realized gain (loss) on investments

       (11 )        12,759         1,953          

Change in net unrealized appreciation (depreciation) on investments

       19         (16,088 )        4,139         66      

 

107

 

   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       8         (3,329 )        6,092         66         107  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                    

Purchase payments received

       19                  

Transfers for contract benefits and terminations

       (13 )        (1,229 )        (630 )         

Net transfers

       (1,905 )        57,891         1,261         2,390         2,213  

Contract maintenance charges

       (2 )        (31 )        (23 )         
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       (1,901 )        56,631         608         2,390         2,213  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       (1,893 )        53,302         6,700         2,456         2,320  

NET ASSETS:

                    

Beginning of period

       1,893         27,219         20,519         0         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $         0     $     80,521     $     27,219     $     2,456     $     2,320  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                    

Units issued

       353         4,668         2,560         253         199  

Units redeemed

       (538 )        (204 )        (2,509 )         
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       (185 )        4,464         51         253         199  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

   

(1) For the period January 1, 2017 to April 18, 2017.

      
   

(2) For the period December 24, 2018 to December 31, 2018.

      
     

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
                  MFS VIT TOTAL RETURN BOND SERIES                        MFS VIT VALUE SERIES                   

        NEUBERGER BERMAN AMT GUARDIAN         
PORTFOLIO

          2018       2017       2018       2017       2018       2017
                  (1)                                

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $         29,640     $     28,728     $     6,032     $     5,996     $     544     $     427  

Net realized gain (loss) on investments

       (551 )        (89 )        26,827         13,536         (21,547 )        (8,915 ) 

Change in net unrealized appreciation (depreciation) on investments

       (38,366 )        (22,714 )        (72,178 )        28,621         13,271         39,757  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (9,277 )        5,925         (39,319 )        48,153         (7,732 )        31,269  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

           1         21,056         4,051          

Transfers for contract benefits and terminations

       (8,984 )        (2,830 )        (5,897 )        (3,846 )        (82,989 )        (21,098 ) 

Net transfers

       60,443         863,158         43,386         118,888         (28,035 )        (20,779 ) 

Contract maintenance charges

       (442 )        (146 )        (283 )        (250 )        (144 )        (169 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       51,017         860,183         58,262         118,843         (111,168 )        (42,046 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       41,740         866,108         18,943         166,996         (118,900 )        (10,777 ) 

NET ASSETS:

                        

Beginning of period

       866,108         0         337,190         170,194         138,268         149,045  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $         907,848     $     866,108     $     356,133     $     337,190     $     19,368     $     138,268  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       6,206         84,925         5,705         12,644         99         207  

Units redeemed

       (1,158 )        (362 )        (1,198 )        (2,163 )        (3,923 )        (1,792 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       5,048         84,563         4,507         10,481         (3,824 )        (1,585 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

   

(1) For the period August 4, 2017 to December 31, 2017.

      
         

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
            NEUBERGER BERMAN AMT LARGE CAP    
VALUE PORTFOLIO		           NEUBERGER BERMAN AMT MID CAP    
GROWTH PORTFOLIO		           
    NEUBERGER BERMAN AMT MID CAP    
INTRINSIC VALUE  PORTFOLIO
        2018       2017       2018       2017       2018       2017

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     114     $     75     $     $     $     5,673     $     11,322  

Net realized gain (loss) on investments

       2,333         1,597         18,620         (8,087 )        179,038         54,068  

Change in net unrealized appreciation (depreciation) on investments

       (2,502 )        (12 )        (25,839 )        51,094         (296,631 )        74,208  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (55 )        1,660         (7,219 )        43,007         (111,920 )        139,598  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

           1                 13,213         24,278  

Transfers for contract benefits and terminations

       (4,253 )        (3,647 )        (91,319 )        (23,078 )        (14,882 )        (14,389 ) 

Net transfers

               (27,478 )        (117,980 )        (633,985 )        600,138  

Contract maintenance charges

       (27 )        (26 )        (157 )        (275 )        (234 )        (245 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       (4,280 )        (3,672 )        (118,954 )        (141,333 )        (635,888 )        609,782  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       (4,335 )        (2,012 )        (126,173 )        (98,326 )        (747,808 )        749,380  

NET ASSETS:

                        

Beginning of period

       12,404         14,416         139,161         237,487         1,461,552         712,172  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     8,069     $     12,404     $     12,988     $     139,161     $     713,744     $     1,461,552  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

           1         92         291         947         31,044  

Units redeemed

       (150 )        (141 )        (5,293 )        (6,867 )        (24,670 )        (6,897 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       (150 )        (140 )        (5,201 )        (6,576 )        (23,723 )        24,147  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
            
    NEUBERGER BERMAN AMT SUSTAINABLE    
EQUITY PORTFOLIO		         OPPENHEIMER MAIN STREET SMALL CAP  
FUND/VA		           PIMCO VIT HIGH YIELD PORTFOLIO    
        2018       2017       2018       2017       2018       2017

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     406     $     37     $     3,217     $     6,687     $     10,873     $     14,053  

Net realized gain (loss) on investments

       4,966         961         136,495         54,113         (839 )        (10,106 ) 

Change in net unrealized appreciation (depreciation) on investments

       (10,289 )        1,113         (246,455 )        10,148         (14,960 )        16,526  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (4,917 )        2,111         (106,743 )        70,948         (4,926 )        20,473  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

               240,398         245,892         35,095      

Transfers for contract benefits and terminations

       (1,055 )        (94 )        (26,301 )        (21,782 )        (31,346 )        (43,797 ) 

Net transfers

       6,517         67,452         141,886         116,586         (71,786 )        (206,065 ) 

Contract maintenance charges

       (98 )        (9 )        (495 )        (445 )        (200 )        (288 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       5,364         67,349         355,488         340,251         (68,237 )        (250,150 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       447         69,460         248,745         411,199         (73,163 )        (229,677 ) 

NET ASSETS:

                        

Beginning of period

       76,736         7,276         664,303         253,104         253,653         483,330  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     77,183     $     76,736     $     913,048     $     664,303     $     180,490     $     253,653  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       241         2,249         31,433         45,795         1,498         1,473  

Units redeemed

       (87 )        (204 )        (3,361 )        (16,017 )        (4,333 )        (12,341 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       154         2,045         28,072         29,778         (2,835 )        (10,868 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
            
    PIMCO VIT LOW DURATION PORTFOLIO    		           PIMCO VIT REAL RETURN PORTFOLIO               PIMCO VIT TOTAL RETURN PORTFOLIO    
        2018       2017       2018       2017       2018       2017

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     115,953     $     73,349     $     13,688     $     17,982     $     92,404     $     71,999  

Net realized gain (loss) on investments

       (10,619 )        (6,706 )        (14,665 )        (4,001 )        29,787         (8,136 ) 

Change in net unrealized appreciation (depreciation) on investments

       (83,547 )        5,835         (19,173 )        14,384         (142,553 )        105,918  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       21,787         72,478         (20,150 )        28,365         (20,362 )        169,781  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

                   7,125         77,185         20,973  

Transfers for contract benefits and terminations

       (125,888 )        (98,403 )        (9,327 )        (11,346 )        (78,599 )        (63,868 ) 

Net transfers

       485,489         909,592         (600,599 )        497,444         (105,258 )        90,490  

Contract maintenance charges

       (2,587 )        (2,022 )        (237 )        (287 )        (785 )        (809 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       357,014         809,167         (610,163 )        492,936         (107,457 )        46,786  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       378,801         881,645         (630,313 )        521,301         (127,819 )        216,567  

NET ASSETS:

                        

Beginning of period

       5,744,097         4,862,452         1,140,541         619,240         3,672,788         3,456,221  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     6,122,898     $     5,744,097     $     510,228     $     1,140,541     $     3,544,969     $     3,672,788  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       36,527         63,603         1,919         35,060         6,997         8,414  

Units redeemed

       (12,862 )        (9,635 )        (36,985 )        (6,801 )        (12,537 )        (6,037 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       23,665         53,968         (35,066 )        28,259         (5,540 )        2,377  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
            
    
    PIONEER REAL ESTATE SHARES VCT    
PORTFOLIO		           PUTNAM VT EQUITY INCOME FUND               PUTNAM VT HIGH YIELD FUND    
        2018       2017       2018       2017       2018       2017

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     1,355     $     627     $     4,206     $     7,186     $     49,683     $     44,876  

Net realized gain (loss) on investments

       4,451         1,581         46,666         23,953         (7,716 )        164  

Change in net unrealized appreciation (depreciation) on investments

       (8,662 )        (1,383 )        (79,680 )        41,528         (67,997 )        7,982  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (2,856 )        825         (28,808 )        72,667         (26,030 )        53,022  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

       19,638         11,201         41,864         47,891         24,713         53,143  

Transfers for contract benefits and terminations

       (2,095 )        (1,069 )        (59,209 )        (15,570 )        (9,975 )        (11,055 ) 

Net transfers

           21,163         (65,972 )        15,569         (97,536 )        112,966  

Contract maintenance charges

       (38 )        (31 )        (293 )        (300 )        (365 )        (407 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       17,505         31,264         (83,610 )        47,590         (83,163 )        154,647  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       14,649         32,089         (112,418 )        120,257         (109,193 )        207,669  

NET ASSETS:

                        

Beginning of period

       34,559         2,470         453,438         333,181         830,851         623,182  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     49,208     $     34,559     $     341,020     $     453,438     $     721,658     $     830,851  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       1,941         3,094         2,900         3,624         2,334         11,307  

Units redeemed

       (218 )        (109 )        (5,178 )        (2,041 )        (5,859 )        (4,342 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       1,723         2,985         (2,278 )        1,583         (3,525 )        6,965  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
            PUTNAM VT INCOME FUND               
    PUTNAM VT INTERNATIONAL GROWTH    
FUND		           PUTNAM VT SMALL CAP VALUE FUND    
        2018       2017       2018       2017       2018       2017
                (1)                               (2)

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     3,371     $     $     27     $     72     $     586     $     741  

Net realized gain (loss) on investments

       (43 )        (1 )        1,735         1,015         25,063         3,125  

Change in net unrealized appreciation (depreciation) on investments

       (2,153 )        238         (13,064 )        1,388         (44,547 )        2,208  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       1,175         237         (11,302 )        2,475         (18,898 )        6,074  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

       58,232         22,986                     3,645  

Transfers for contract benefits and terminations

       (4,927 )        (1,429 )        (620 )        (252 )        (1,057 )        (1,180 ) 

Net transfers

       58,846             46,043         1,673         5,881         84,039  

Contract maintenance charges

       (22 )        (8 )        (15 )        (10 )        (36 )        (33 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       112,129         21,549         45,408         1,411         4,788         86,471  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       113,304         21,786         34,106         3,886         (14,110 )        92,545  

NET ASSETS:

                        

Beginning of period

       21,786         0         10,690         6,804         92,545         0  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     135,090     $     21,786     $     44,796     $     10,690     $     78,435     $     92,545  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       11,145         2,192         1,854         391         995         8,138  

Units redeemed

       (495 )        (139 )        (30 )        (330 )        (600 )        (987 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       10,650         2,053         1,824         61         395         7,151  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

(1)  For the period July 24, 2017 to December 31, 2017.

 

    
 

(2)  For the period January 30, 2017 to December 31, 2017.

 

    

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
            PUTNAM VT SUSTAINABLE FUTURE FUND               ROYCE CAPITAL FUND - MICRO-CAP     
PORTFOLIO		           
    ROYCE CAPITAL FUND -  SMALL-CAP    
PORTFOLIO
        2018       2017       2018       2017       2018       2017
                        (1)                        

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     981     $     776     $     $     9     $     3,483     $     8,469  

Net realized gain (loss) on investments

       8,277         3,210         150         540         10,465         (38,331 ) 

Change in net unrealized appreciation (depreciation) on investments

       (10,440 )        5,814         (119 )        (1,014 )        (109,921 )        81,946  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (1,182 )        9,800         31         (465 )        (95,973 )        52,084  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

       24,655         34,135             1         28,155         27,900  

Transfers for contract benefits and terminations

       (2,369 )        (2,388 )        (21 )        (11,466 )        (18,733 )        (17,162 ) 

Net transfers

       (47,616 )            (1,777 )        (12,010 )            (91,835 ) 

Contract maintenance charges

       (49 )        (68 )            (6 )        (252 )        (243 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       (25,379 )        31,679         (1,798 )        (23,481 )        9,170         (81,340 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       (26,561 )        41,479         (1,767 )        (23,946 )        (86,803 )        (29,256 ) 

NET ASSETS:

                        

Beginning of period

       114,508         73,029         1,767         25,713         1,094,493         1,123,749  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     87,947     $     114,508     $     0     $     1,767     $     1,007,690     $     1,094,493  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       809         1,020             1         1,406         2,246  

Units redeemed

       (1,435 )        (79 )        (120 )        (1,711 )        (1,064 )        (6,612 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       (626 )        941         (120 )        (1,710 )        342         (4,366 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

(1)  For the period January 1, 2018 to May 23, 2018.

 

        

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

    INVESTMENT DIVISIONS  
            
    T. ROWE PRICE BLUE CHIP GROWTH    
PORTFOLIO		         VAN ECK VIP EMERGING MARKETS FUND           VAN ECK VIP GLOBAL HARD ASSETS FUND  
        2018       2017       2018       2017       2018       2017

INCREASE (DECREASE) IN NET ASSETS:

                        

OPERATIONS:

                        

Net investment income (loss)

   $     $     $     153     $     194     $     $  

Net realized gain (loss) on investments

       71,669         16,222         780         63         (3,821 )        (16,788 ) 

Change in net unrealized appreciation (depreciation) on investments

       (104,966 )        140,416         (15,003 )        19,367         (268,190 )        28,786  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from operations

       (33,297 )        156,638         (14,070 )        19,624         (272,011 )        11,998  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CONTRACT TRANSACTIONS:

                        

Purchase payments received

       27,462         791         2,499         2,500         13,119         5,923  

Transfers for contract benefits and terminations

       (25,599 )        (10,615 )        (1,089 )        (1,214 )        (11,112 )        (10,493 ) 

Net transfers

       593,526         811,943         8             128,905         162,101  

Contract maintenance charges

       (536 )        (311 )        (8 )        (8 )        (239 )        (231 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       594,853         801,808         1,410         1,278         130,673         157,300  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Total increase (decrease) in net assets

       561,556         958,446         (12,660 )        20,902         (141,338 )        169,298  

NET ASSETS:

                        

Beginning of period

       1,025,030         66,584         58,247         37,345         920,836         751,538  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

End of period

   $     1,586,586     $     1,025,030     $     45,587     $     58,247     $     779,498     $     920,836  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

CHANGES IN UNITS OUTSTANDING:

                        

Units issued

       41,740         68,696         100         65         3,593         4,581  

Units redeemed

       (4,029 )        (2,916 )        (75 )        (30 )        (629 )        (1,329 ) 
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

Net increase (decrease)

       37,711         65,780         25         35         2,964         3,252  
   

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

    

 

 

 

 

The accompanying notes are an integral part of these financial statements.    (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31, 2018 AND 2017

 

 

              INVESTMENT DIVISIONS    
              
    VICTORY RS SMALL CAP    
GROWTH EQUITY VIP
SERIES
          2018
          (1)

INCREASE (DECREASE) IN NET ASSETS:

    

OPERATIONS:

    

Net investment income (loss)

   $      

Net realized gain (loss) on investments

    

Change in net unrealized appreciation (depreciation) on investments

       417  
   

 

 

 

Increase (decrease) in net assets resulting from operations

       417  
   

 

 

 

CONTRACT TRANSACTIONS:

    

Purchase payments received

    

Transfers for contract benefits and terminations

    

Net transfers

       5,842  

Contract maintenance charges

    
   

 

 

 

Increase (decrease) in net assets resulting from contract transactions

       5,842  
   

 

 

 

Total increase (decrease) in net assets

       6,259  

NET ASSETS:

    

Beginning of period

       0  
   

 

 

 

End of period

   $         6,259  
   

 

 

 

CHANGES IN UNITS OUTSTANDING:

    

Units issued

       719  

Units redeemed

    
   

 

 

 

Net increase (decrease)

       719  
   

 

 

 

(1)  For the period December 24, 2018 to December 31, 2018.

 

The accompanying notes are an integral part of these financial statements.    (Concluded)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2018

 

 

1.

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

The COLI VUL-2 Series Account (the Series Account), a variable life separate account of Great-West Life & Annuity Insurance Company (the Company), is registered as a unit investment trust under the Investment Company Act of 1940, as amended, and exists in accordance with regulations of the Colorado Division of Insurance. It is a funding vehicle for variable life insurance policies. The Series Account consists of numerous investment divisions (Investment Divisions), each being treated as an individual accounting entity for financial reporting purposes, and each investing all of its investible assets in the named underlying mutual fund.

Under applicable insurance law, the assets and liabilities of each of the Investment Divisions of the Series Account are clearly identified and distinguished from the Company’s other assets and liabilities. The portion of the Series Account’s assets applicable to the reserves and other contract liabilities with respect to the Series Account is not chargeable with liabilities arising out of any other business the Company may conduct.

The preparation of financial statements and financial highlights of each of the Investment Divisions in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and financial highlights and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Series Account is an investment company and, therefore, applies specialized accounting guidance in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 “Financial Services – Investment Companies” (ASC Topic 946). The following is a summary of the significant accounting policies of the Series Account.

Security Valuation

Mutual fund investments held by the Investment Divisions are valued at the reported net asset values of such underlying mutual funds, which value their investment securities at fair value.

The Series Account classifies its valuations into three levels based upon the observability of inputs to the valuation of the Series Account’s investments. The valuation levels are not necessarily an indication of the risk or liquidity associated with the underlying investment. Classification is based on the lowest level of input significant to the fair value measurement. The three levels are defined as follows:

Level 1 – Unadjusted quoted prices for identical securities in active markets.

Level 2 – Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly. These may include quoted prices for similar assets in active markets.

Level 3 – Unobservable inputs to the extent observable inputs are not available and may include prices obtained from single broker quotes. Unobservable inputs reflect the reporting entity’s own assumptions and would be based on the best information available under the circumstances.

As of December 31, 2018, the only investments of each of the Investment Divisions of the Series Account were in underlying mutual funds that are actively traded, therefore 100% of the investments are valued using Level 1 inputs.

Table of Contents

Fund of Funds Structure Risk

Since the Series Account invests directly in underlying funds, all risks associated with the eligible underlying funds apply to the Series Account. To the extent the Series Account invests more of its assets in one underlying fund than another, the Series Account will have greater exposure to the risks of the underlying fund.

Security Transactions and Investment Income

Transactions are recorded on the trade date. Realized gains and losses on sales of investments are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date and the amounts distributed to the Investment Division for its share of dividends are reinvested in additional full and fractional shares of the related mutual funds.

Federal Income Taxes

The operations of each of the Investment Divisions of the Series Account are included in the federal income tax return of the Company, which is taxed as a life insurance company under the provisions of the Internal Revenue Code (IRC). The Company is included in the consolidated federal tax return of Great-West Lifeco U.S. Inc. Under the current provisions of the IRC, the Company does not expect to incur federal income taxes on the earnings of each of the Investment Divisions of the Series Account to the extent the earnings are credited under the contracts. Based on this, no charge is being made currently to the Series Account for federal income taxes. The Company will periodically review the status of the federal income tax policy in the event of changes in the tax law. A charge may be made in future years for any federal income taxes that would be attributable to the contracts.

Purchase Payments Received

Purchase payments received from contract owners by the Company are credited as accumulation units, and are reported as Contract Transactions on the Statement of Changes in Net Assets of the applicable Investment Divisions.

Net Transfers

Net transfers include transfers between Investment Divisions of the Series Account as well as transfers between other investment options of the Company, not included in the Series Account.

Application of Recent Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board issued ASU No. 2018-13, “Fair-Value Measurement: Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” (ASU No. 2018-13). ASU No. 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. The disclosure changes in ASU 2018-13 are effective for the first interim or annual period beginning after December 15, 2019. Early adoption is permitted for any eliminated or modified disclosures. Eliminated and modified disclosures have been adopted, and there was no impact to the financial statements.

Table of Contents
2.

PURCHASES AND SALES OF INVESTMENTS

The cost of purchases and proceeds from sales of investments for the year ended December 31, 2018 were as follows:

 

Investment Division

          Purchases                      Sales          

Alger Small Cap Growth Portfolio

    $ 124,473          $ 90,145      

American Century Investments VP Capital Appreciation Fund

      103,068            3,795      

American Century Investments VP Income & Growth Fund

      337            4,661      

American Century Investments VP Inflation Protection Fund

      146,311            47,185      

American Century Investments VP International Fund

      11,779            2,770      

American Century Investments VP Value Fund

      306,767            139,353      

American Funds IS Global Small Capitalization Fund

      161,112            13,947      

American Funds IS Growth Fund

      687,519            281,114      

American Funds IS International Fund

      208,882            203,342      

American Funds IS New World Fund

      285,276            220,352      

BlackRock Global Allocation Fund

      23,666            185      

Clearbridge Variable Mid Cap Portfolio

      42,428            979      

Clearbridge Variable Small Cap Growth Portfolio

      26,528            18,494      

Columbia Variable Portfolio - Small Cap Value Fund

      18,038            7,127      

Davis Financial Portfolio

      21,533            11,782      

Davis Value Portfolio

      21,240            2,082      

Delaware VIP International Value Equity Series

      94            1      

Delaware VIP Small Cap Value Series

      11,088            17,008      

Dreyfus Stock Index Fund

      2,901,007            1,566,159      

Dreyfus VIF International Equity Portfolio

      49,698            1,655      

DWS CROCI® U.S. VIP

      81,786            50,726      

DWS Global Small Cap Growth VIP

      23,573            147,038      

DWS High Income VIP

      18,108            1,050      

DWS Small Cap Index VIP

      998,421            358,441      

DWS Small Mid Cap Value VIP

      641,864            175,199      

Federated Kaufmann Fund II

      26,247            12,370      

Fidelity VIP Contrafund Portfolio

      509,403            261,328      

Fidelity VIP Growth Portfolio

      353,677            270,412      

Fidelity VIP Investment Grade Bond Portfolio

      70,694            265,888      

Fidelity VIP Mid Cap Portfolio

      448,736            262,292      

Goldman Sachs VIT Mid Cap Value Fund

      40,973            4,091      

Great-West Aggressive Profile Fund

      756,003            44,064      

Great-West Ariel Mid Cap Value Fund

      66,094            199,686      

Great-West Bond Index Fund

      133,107            190,462      

Great-West Conservative Profile Fund

      729,736            7,370      

Great-West Core Bond Fund

      138,981            35,451      

Great-West Emerging Markets Equity Fund

      2,053            -          

Great-West Global Bond Fund

      651,762            751,114      

Great-West Government Money Market Fund

      9,351,716            11,496,275      

Great-West International Index Fund

      16,013            2,290      

Great-West International Value Fund

      2,982,379            168,373      

Great-West Large Cap Growth Fund

      113,663            85,428      

Great-West Lifetime 2015 Fund

      1,318,693            215,925      

Great-West Lifetime 2025 Fund

      464,206            31,804      

Great-West Lifetime 2025 Fund

      1,120,828            477,243      

Great-West Lifetime 2030 Fund

      584,143            13,039      

Great-West Lifetime 2035 Fund

      1,437,175            132,424      

Great-West Lifetime 2040 Fund

      325,066            99,924      

Great-West Lifetime 2045 Fund

      345,999            104,373      

Great-West Lifetime 2050 Fund

      88,487            12,913      

Great-West Lifetime 2055 Fund

      67,879            3,574      

Great-West Loomis Sayles Small Cap Value Fund

      173,568            88,553      

Great-West Mid Cap Value Fund

      51,565            3,779      

Great-West Moderate Profile Fund

      306,675            44,981      

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Investment Division

          Purchases                    Sales          

Great-West Moderately Aggressive Profile Fund

    $ 83,341          $ 10,733      

Great-West Moderately Conservative Profile Fund

      50,310            5,689      

Great-West Multi-Sector Bond Fund

      139,303            166,803      

Great-West Real Estate Index Fund

      161,025            9,848      

Great-West S&P Mid Cap 400® Index Fund

      695,678            137,081      

Great-West S&P Small Cap 600® Index Fund

      53,007            144,910      

Great-West Short Duration Bond Fund

      919,706            2,762,402      

Great-West Small Cap Growth Fund

      125,412            128,294      

Great-West T. Rowe Price Equity Income Fund

      229,205            95,773      

Great-West T. Rowe Price Mid Cap Growth Fund

      1,807,030            899,601      

Great-West U. S. Government Securities Fund

      87,137            640,786      

Invesco V.I. Core Equity Fund

      39,667            148,874      

Invesco V.I. Global Real Estate Fund

      159,949            222,701      

Invesco V.I. Health Care Fund

      11,895            8,954      

Invesco V.I. International Growth Fund

      526,740            223,658      

Invesco V.I. Mid Cap Core Equity Fund

      97,908            22,467      

Invesco V.I. Technology Fund

      8,933            45,645      

Janus Henderson VIT Balanced Portfolio

      1,041,964            1,033,328      

Janus Henderson VIT Flexible Bond Portfolio

      1,767,760            1,494,212      

Janus Henderson VIT Forty Portfolio

      2,456,653            1,547,338      

Janus Henderson VIT Global Research Portfolio

      109,853            85,384      

Janus Henderson VIT Global Technology Portfolio

      760,804            69,111      

Janus Henderson VIT Overseas Portfolio

      1,016            1,041      

Lord Abbett Series Developing Growth Portfolio

      71,053            2,403      

MFS VIT III Mid Cap Value Portfolio

      2,390            -          

MFS VIT Mid Cap Growth Series

      2,213            -          

MFS VIT Total Return Bond Series

      90,082            9,425      

MFS VIT Value Series

      102,239            11,683      

Neuberger Berman AMT Guardian Portfolio

      13,760            113,737      

Neuberger Berman AMT Large Cap Value Portfolio

      1,125            4,280      

Neuberger Berman AMT Mid Cap Growth Portfolio

      10,211            120,711      

Neuberger Berman AMT Mid Cap Intrinsic Value Portfolio

      66,265            657,181      

Neuberger Berman AMT Sustainable Equity Portfolio

      13,016            2,707      

Oppenheimer Main Street Small Cap Fund/VA

      520,189            28,987      

PIMCO VIT High Yield Portfolio

      43,862            101,226      

PIMCO VIT Low Duration Portfolio

      643,607            170,640      

PIMCO VIT Real Return Portfolio

      42,883            639,358      

PIMCO VIT Total Return Portfolio

      261,957            233,088      

Pioneer Real Estate Shares VCT Portfolio

      24,413            954      

Putnam VT Equity Income Fund

      121,928            180,683      

Putnam VT High Yield Fund

      98,830            132,310      

Putnam VT Income Fund

      117,654            2,154      

Putnam VT International Growth Fund

      47,686            636      

Putnam VT Small Cap Value Fund

      39,237            7,030      

Putnam VT Sustainable Future Fund

      33,293            53,901      

Royce Capital Fund - Micro-Cap Portfolio

      -                1,798      

Royce Capital Fund - Small-Cap Portfolio

      44,638            17,718      

T. Rowe Price Blue Chip Growth Portfolio

      705,363            57,204      

Van Eck VIP Emerging Markets Fund

      4,786            3,223      

Van Eck VIP Global Hard Assets Fund

      159,974            29,301      

Victory RS Small Cap Growth Equity VIP Series

      5,842            -          

Table of Contents
3.

EXPENSES AND RELATED PARTY TRANSACTIONS

Cost of Insurance

The Company deducts from each participant’s account an amount to pay for the insurance provided on each life. This charge varies based on individual characteristics of the policy holder and is recorded as Transfers for contract benefits and terminations on the Statement of Changes in Net Assets of the applicable Investment Divisions.

Charges Incurred for Partial Surrenders

The Company deducts from each participant’s account a maximum administrative fee of $25 for all partial withdrawals after the first made during the same policy year. This charge is recorded as Transfers for contract benefits and terminations on the Statement of Changes in Net Assets of the applicable Investment Divisions.

Charges Incurred for Change of Death Benefit Option Fee

The Company deducts from each participant’s account a maximum fee of $100 for each change of death benefit option. This charge is recorded as Transfers for contract benefits and terminations on the Statement of Changes in Net Assets of the applicable Investment Divisions.

Transfer Fees

The Company deducts from each participant’s account a fee of $10 for each transfer between Investment Divisions in excess of 12 transfers in any calendar year. This charge is recorded as Transfers for contract benefits and terminations on the Statement of Changes in Net Assets of the applicable Investment Divisions.

Service Charge

The Company deducts from each participant’s account an amount equal to a maximum of $10 per month. This charge compensates the Company for certain administrative costs and is recorded as Contract maintenance charges on the Statement of Changes in Net Assets of the applicable Investment Divisions.

Deductions for Assumption of Mortality and Expense Risks

The Company deducts an amount, computed and accrued daily, from each participant’s account equal to an annual rate that will not exceed 0.90% annually. Currently, the charge is 0.28% for Policy Years 1 through 20 and 0.10% thereafter. These charges compensate the Company for its assumption of certain mortality, death benefit and expense risks. These charges are recorded as Transfers for contract benefits and terminations on the Statement of Changes in Net Assets of the applicable Investment Divisions.

If the above charges prove insufficient to cover actual costs and assumed risks, the loss will be borne by the Company; conversely, if the amounts deducted prove more than sufficient, the excess will be a profit to the Company.

Expense Charges Applied to Premium

The Company deducts a maximum charge of 10% from each premium payment received. A maximum of 6.5% of this charge will be deducted as sales load to compensate the Company in part for sales and promotional expenses in connection with selling the policies. A maximum of 3.5% of this charge will be used to cover premium taxes and certain federal income tax obligations resulting from the receipt of premiums. This charge is netted with Purchase payments received on the Statement of Changes in Net Assets of the applicable Investment Divisions.

Table of Contents

Supplemental Benefit Charges

The Company deducts from each participant’s account an amount to pay for certain riders selected by the policy holder. This charge varies based on individual characteristics of the policy holder when the rider is added to the policy and is recorded as Transfers for contract benefits and terminations on the Statement of Changes in Net Assets of the applicable Investment Divisions.

Related Party Transactions

Great-West Funds, Inc., funds of which are underlying certain Investment Divisions, is a registered investment company affiliated with the Company. Great-West Capital Management, LLC (GWCM), a wholly owned subsidiary of the Company, serves as investment adviser to Great-West Funds, Inc. Fees are assessed against the average daily net assets of the portfolios of Great-West Funds, Inc. to compensate GWCM for investment advisory services.

 

4.

FINANCIAL HIGHLIGHTS

For each Investment Division, the accumulation units outstanding, net assets, investment income ratio, the range of lowest to highest expense ratio (excluding expenses of the underlying funds), total return and accumulation unit fair values for each year or period ended December 31 are included on the following pages. The unit values in the Financial Highlights are calculated based on the net assets and accumulation units outstanding as of December 31 of each year presented and may differ from the unit value reflected on the Statement of Assets and Liabilities due to rounding.

The Expense Ratios represent the annualized contract expenses of the respective Investment Divisions of the Series Account, consisting of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund have been excluded.

The Total Return amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and expenses assessed through the reduction of unit values. These returns do not include any expenses assessed through the redemption of units. Investment Divisions with a date notation indicate the effective date that the investment option was available in the Series Account. The total returns are calculated for each 12-month period indicated or from the effective date through the end of the reporting period and are not annualized for periods less than one year. When a new Investment Division is added to the Series Account, the calculation of the total return begins on the day it is added even though it may not have had operations for all or some of the same period. Unit values and returns for bands or Investment Divisions that had no operations activity during the reporting period are not shown.

The Investment Income Ratio represents the dividends, excluding distributions of capital gains, received by the Investment Division from the underlying mutual fund divided by average net assets during the period. It is not annualized for periods less than one year. The ratio excludes those expenses, such as mortality and expense charges, that result in direct reductions in the unit values. The recognition of investment income by the Investment Division is affected by the timing of the declaration of dividends by the underlying fund in which the Investment Division invests.

Table of Contents

 COLI VUL-2 SERIES ACCOUNT OF

 GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

 

FINANCIAL HIGHLIGHTS     At December 31       For the year or period ended December 31   

INVESTMENT DIVISIONS

     Units (000s)         Unit Fair Value          Net Assets (000s)      Investment
   Income Ratio   		         Expense Ratio             Total Return      

ALGER SMALL CAP GROWTH PORTFOLIO

                

(Effective date 05/12/2009)

                

2018

      3        $            165.57         $              455        0.00 %          0.00 %          1.44  %    

2017

      3        $            163.24         $              428        0.00 %          0.00 %          28.73  %    

2016

      3        $            126.82         $              339        0.00 %          0.00 %          6.24  %    

2015

      3        $            119.36         $              327        0.00 %          0.00 %          (3.32) %    

2014

      3        $            123.46         $              404        0.00 %          0.00 %          0.43  %    

AMERICAN CENTURY INVESTMENTS VP CAPITAL APPRECIATION FUND

                

(Effective date 04/24/2014)

                

2018

      13        $              13.24         $              174        0.00 %          0.00 %          (5.20) %    

2017

      6        $              13.97         $                89        0.00 %          0.00 %          21.79  %    

2016

      10        $              11.47         $              119        0.00 %          0.00 %          3.23  %    

2015

      11        $              11.11         $              120        0.00 %          0.00 %          1.93  %    

2014

      10        $              10.90         $              114        0.00 %          0.00 %          9.00  %    

AMERICAN CENTURY INVESTMENTS VP INCOME & GROWTH FUND

                

2018

      0    *      $              21.00         $                  0    *      1.71 %          0.00 %          (6.87) %    

2017

      0    *      $              24.35         $                  5        2.26 %          0.00 %          20.49  %    

2016

      0    *      $              20.20         $                  7        2.33 %          0.00 %          13.49  %    

2015

      1        $              17.77         $                13        2.01 %          0.00 %          (5.63) %    

2014

      1        $              18.84         $                22        2.01 %          0.00 %          12.54  %    

AMERICAN CENTURY INVESTMENTS VP INFLATION PROTECTION FUND

                

(Effective date 05/01/2015)

                

2018

      64        $              10.13         $              644        2.92 %          0.00 %          (2.82) %    

2017

      56        $              10.42         $              582        2.73 %          0.00 %          3.67  %    

2016

      43        $              10.05         $              433        0.72 %          0.00 %          4.39  %    

AMERICAN CENTURY INVESTMENTS VP INTERNATIONAL FUND

                

2018

      4        $              12.25         $                52        1.24 %          0.00 %          (15.22) %    

2017

      4        $              14.45         $                55        0.94 %          0.00 %          31.20  %    

2016

      5        $              11.01         $                50        0.98 %          0.00 %          (5.49) %    

2015

      4        $              11.65         $                48        0.77 %          0.00 %          0.75  %    

2014

      48        $              11.57         $              555        1.63 %          0.00 %          (5.47) %    

AMERICAN CENTURY INVESTMENTS VP VALUE FUND

                

2018

      21        $              39.86         $              844        1.70 %          0.00 %          (9.15) %    

2017

      18        $              43.87         $              782        1.74 %          0.00 %          8.75  %    

2016

      13        $              40.35         $              511        1.74 %          0.00 %          20.48  %    

2015

      3        $              33.49         $              108        1.64 %          0.00 %          (3.88) %    

2014

      23        $              34.84         $              817        1.54 %          0.00 %          13.08  %    

AMERICAN FUNDS IS GLOBAL SMALL CAPITALIZATION FUND

                

(Effective date 05/05/2008)

                

2018

      9        $              14.33         $              126        0.09 %          0.00 %          (10.55) %    

2017

      0    *      $              16.03         $                  4        0.15 %          0.00 %          25.90  %    

2016

      3        $              12.73         $                42        0.21 %          0.00 %          2.09  %    

2015

      6        $              12.47         $                78        0.00 %          0.00 %          0.27  %    

2014

      12        $              12.43         $              144        0.13 %          0.00 %          2.05  %    

 

(Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

 

FINANCIAL HIGHLIGHTS     At December 31        For the year or period ended December 31   

INVESTMENT DIVISIONS

     Units (000s)          Unit Fair Value          Net Assets (000s)       Investment
   Income Ratio   		         Expense Ratio             Total Return      

AMERICAN FUNDS IS GROWTH FUND

                  

(Effective date 05/05/2008)

                  

2018

      98         $            24.44         $            2,394         0.44 %          0.00 %          (0.25) %    

2017

      93         $            24.50         $            2,269         0.48 %          0.00 %          28.29  %    

2016

      106         $            19.10         $            2,017         0.71 %          0.00 %          9.49  %    

2015

      121         $            17.44         $            2,105         0.62 %          0.00 %          6.85  %    

2014

      121         $            16.32         $            1,975         0.73 %          0.00 %          8.51  %    

AMERICAN FUNDS IS INTERNATIONAL FUND

                  

(Effective date 05/05/2008)

                  

2018

      174         $            12.54         $            1,469         1.68 %          0.00 %          (13.14) %    

2017

      124         $            14.44         $            1,790         1.26 %          0.00 %          32.15  %    

2016

      135         $            10.93         $            1,475         1.47 %          0.00 %          3.53  %    

2015

      130         $            10.55         $            1,370         1.48 %          0.00 %          (4.53) %    

2014

      155         $            11.05         $            1,715         1.39 %          0.00 %          (2.73) %    

AMERICAN FUNDS IS NEW WORLD FUND

                  

(Effective date 04/24/2009)

                  

2018

      80         $            19.62         $            1,568         0.86 %          0.00 %          (14.04) %    

2017

      80         $            22.83         $            1,823         0.95 %          0.00 %          29.45  %    

2016

      76         $            17.64         $            1,336         0.81 %          0.00 %          5.26  %    

2015

      72         $            16.76         $            1,210         0.64 %          0.00 %          (3.14) %    

2014

      56         $            17.30         $               967         1.01 %          0.00 %          (7.88) %    

BLACKROCK GLOBAL ALLOCATION VI FUND

                  

(Effective date 04/29/2016)

                  

2018

      2         $            10.91         $                 21         0.99 %          0.00 %          (7.34) %    

CLEARBRIDGE VARIABLE MID CAP PORTFOLIO

                  

(Effective date 04/29/2016)

                  

2018

      4         $            10.96         $                 48         0.65 %          0.00 %          (12.52) %    

2017

      1         $            12.54         $                 14         0.43 %          0.00 %          12.80  %    

CLEARBRIDGE VARIABLE SMALL CAP GROWTH PORTFOLIO

                  

(Effective date 04/29/2016)

                  

2018

      4         $              14.56         $                 53         0.00 %          0.00 %          3.44  %    

2017

      4         $              14.08         $                 49         0.00 %          0.00 %          24.27  %    

COLUMBIA VARIABLE PORTFOLIO - SMALL CAP VALUE FUND

                  

(Effective date 05/12/2009)

                  

2018

      2         $              27.02         $                 56         0.41 %          0.00 %          (18.01) %    

2017

      2         $              32.96         $                 68         0.63 %          0.00 %          14.31  %    

2016

      4         $              28.83         $               120         0.72 %          0.00 %          33.05  %    

2015

      10         $              21.67         $               206         0.86 %          0.00 %          (6.12) %    

2014

      11         $              23.08         $               248         0.63 %          0.00 %          3.27  %    

 

   (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

 

FINANCIAL HIGHLIGHTS     At December 31       For the year or period ended December 31   

INVESTMENT DIVISIONS

     Units (000s)         Unit Fair Value          Net Assets (000s)      Investment
   Income Ratio   		         Expense Ratio             Total Return      

DAVIS FINANCIAL PORTFOLIO

                

(Effective date 05/02/2005)

                

2018

      2        $            21.88         $                 41        1.35 %          0.00 %          (10.67)  %    

2017

      2        $            24.50         $                 41        1.05 %          0.00 %          21.42   %    

2016

      0    *      $            20.18         $                   6        0.85 %          0.00 %          14.25   %    

2015

      0    *      $            17.66         $                   7        0.74 %          0.00 %          2.00   %    

2014

      1        $            17.30         $                 11        1.08 %          0.00 %          12.78   %    

DAVIS VALUE PORTFOLIO

                

(Effective date 05/02/2005)

                

2018

      5        $            21.80         $                 98        0.87 %          0.00 %          (13.60)  %    

2017

      5        $            25.23         $               116        0.62 %          0.00 %          22.63   %    

2016

      16        $            20.57         $               338        1.21 %          0.00 %          11.88   %    

2015

      19        $            18.39         $               348        0.77 %          0.00 %          1.60   %    

2014

      20        $            18.10         $               371        0.94 %          0.00 %          6.03   %    

DELAWARE VIP INTERNATIONAL VALUE EQUITY SERIES

                

(Effective date 04/29/2016)

                

2018

      0    *      $            11.14         $                   0    *      0.00 %          0.00 %          (17.64)  %    

DELAWARE VIP SMALL CAP VALUE SERIES

                

(Effective date 05/01/2014)

                

2018

      3        $            11.88         $                 32        0.61 %          0.00 %          (16.95)  %    

2017

      4        $            14.30         $                 52        0.53 %          0.00 %          11.76   %    

2016

      1        $            12.79         $                 14        0.73 %          0.00 %          31.07   %    

2015

      0    *      $              9.77         $                   5        0.00 %          0.00 %          (6.46)  %    

DREYFUS STOCK INDEX FUND

                

2018

      1,060        $            23.57         $          24,987        1.67 %          0.00 %          (4.64)  %    

2017

      1,048        $            24.72         $          25,895        1.72 %          0.00 %          21.54   %    

2016

      1,044        $            20.34         $          21,227        2.02 %          0.00 %          11.71   %    

2015

      1,089        $            18.20         $          19,827        1.84 %          0.00 %          1.11   %    

2014

      1,089        $            18.01         $          19,606        1.76 %          0.00 %          13.48   %    

DREYFUS VIF INTERNATIONAL EQUITY PORTFOLIO

                

2018

      3        $            20.12         $                 52        1.05 %          0.00 %          (15.72)  %    

2017

      1        $            23.89         $                 13        1.67 %          0.00 %          27.33   %    

2016

      5        $            18.75         $                 85        0.94 %          0.00 %          (5.54)  %    

2015

      5        $            19.85         $               102        3.27 %          0.00 %          1.37   %    

2014

      5        $            19.58         $                 97        2.37 %          0.00 %          (2.64)  %    

 

   (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

 

FINANCIAL HIGHLIGHTS     At December 31        For the year or period ended December 31   

INVESTMENT DIVISIONS

     Units (000s)          Unit Fair Value          Net Assets (000s)       Investment
   Income Ratio   		         Expense Ratio             Total Return      

DWS CROCI® U.S. VIP

                  

(Effective date 05/02/2005)

                  

2018

      19         $            14.44         $               281         2.62 %          0.00 %          (10.50) %    

2017

      19         $            16.13         $               309         1.41 %          0.00 %          22.88  %    

2016

      24         $            13.13         $               311         1.10 %          0.00 %          (4.38) %    

2015

      15         $            13.73         $               204         1.26 %          0.00 %          (6.87) %    

2014

      6         $            14.74         $                 96         0.26 %          0.00 %          10.66  %    

DWS HIGH INCOME VIP

                  

(Effective date 04/25/2007)

                  

2018

      4         $            17.91         $                 65         8.15 %          0.00 %          (2.52) %    

2017

      3         $            18.37         $                 55         6.64 %          0.00 %          7.50  %    

2016

      3         $            17.09         $                 46         5.09 %          0.00 %          12.87  %    

2015

      1         $            15.14         $                 22         4.92 %          0.00 %          (4.44) %    

2014

      6         $            15.84         $                 93         6.21 %          0.00 %          1.47 %    

DWS SMALL CAP INDEX VIP

                  

(Effective date 04/25/2007)

                  

2018

      272         $            21.72         $            5,913         0.95 %          0.00 %          (11.23) %    

2017

      268         $            24.47         $            6,559         0.72 %          0.00 %          14.33  %    

2016

      144         $            21.40         $            3,089         1.07 %          0.00 %          21.03  %    

2015

      151         $            17.68         $            2,673         0.98 %          0.00 %          (4.60) %    

2014

      147         $            18.53         $            2,730         0.89 %          0.00 %          4.75  %    

DWS SMALL MID CAP VALUE VIP

                  

(Effective date 05/01/2006)

                  

2018

      70         $            22.23         $            1,556         1.37 %          0.00 %          (16.01) %    

2017

      64         $            26.47         $            1,695         0.73 %          0.00 %          10.52  %    

2016

      64         $            23.95         $            1,544         0.60 %          0.00 %          16.89  %    

2015

      81         $            20.49         $            1,666         0.29 %          0.00 %          (1.91) %    

2014

      80         $            20.89         $            1,678         0.78 %          0.00 %          5.56  %    

FEDERATED KAUFMANN FUND II

                  

(Effective date 03/08/2010)

                  

2018

      5         $            26.65         $               144         0.00 %          0.00 %          3.84  %    

2017

      5         $            25.66         $               136         0.00 %          0.00 %          28.33  %    

2016

      3         $            20.00         $                 65         0.00 %          0.00 %          3.66  %    

2015

      2         $            19.29         $                 38         0.00 %          0.00 %          6.37  %    

2014

      1         $            18.14         $                 22         0.00 %          0.00 %          9.74  %    

FIDELITY VIP CONTRAFUND PORTFOLIO

                        

2018

      81         $            32.78         $            2,660         0.44 %          0.00 %          (6.64) %    

2017

      82         $            35.11         $            2,872         0.81 %          0.00 %          21.59  %    

2016

      81         $            28.87         $            2,336         0.62 %          0.00 %          7.73  %    

2015

      85         $            26.80         $            2,268         0.73 %          0.00 %          0.42  %    

2014

      113         $            26.69         $            3,018         0.75 %          0.00 %          11.67  %    

 

   (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

 

FINANCIAL HIGHLIGHTS     At December 31        For the year or period ended December 31   

INVESTMENT DIVISIONS

     Units (000s)          Unit Fair Value          Net Assets (000s)       Investment
   Income Ratio   		         Expense Ratio             Total Return      

FIDELITY VIP GROWTH PORTFOLIO

                  

2018

      32         $            23.19         $            739         0.03 %          0.00 %          (0.43) %    

2017

      34         $            23.29         $            791         0.10 %          0.00 %          34.82  %    

2016

      55         $            17.27         $            952         0.00 %          0.00 %          0.55  %    

2015

      51         $            17.18         $            883         0.03 %          0.00 %          6.90  %    

2014

      81         $            16.07         $         1,306         0.00 %          0.00 %          10.98  %    

FIDELITY VIP INVESTMENT GRADE BOND PORTFOLIO

                  

2018

      13         $            21.54         $            280         2.33 %          0.00 %          (0.79) %    

2017

      23         $            21.71         $            496         1.93 %          0.00 %          3.99  %    

2016

      38         $            20.88         $            793         2.27 %          0.00 %          4.48  %    

2015

      32         $            19.99         $            644         2.05 %          0.00 %          (0.85) %    

2014

      40         $            20.16         $            810         2.04 %          0.00 %          5.66  %    

FIDELITY VIP MID CAP PORTFOLIO

                  

2018

      19         $            46.96         $            885         0.42 %          0.00 %          (14.77) %    

2017

      17         $            55.10         $            952         0.50 %          0.00 %          20.54  %    

2016

      21         $            45.71         $            965         0.33 %          0.00 %          11.92  %    

2015

      22         $            40.85         $            903         0.25 %          0.00 %          (1.63) %    

2014

      20         $            41.52         $            851         0.02 %          0.00 %          6.03  %    

GOLDMAN SACHS VIT MID CAP VALUE FUND

                  

(Effective date 05/01/2013)

                  

2018

      3         $            13.71         $              45         1.57 %          0.00 %          (10.46) %    

2017

      1         $            15.32         $              21         0.97 %          0.00 %          11.07  %    

2016

      1         $            13.79         $              10         1.28 %          0.00 %          13.53  %    

GREAT-WEST AGGRESSIVE PROFILE FUND

                  

(Effective date 04/28/2017)

                  

2018

      107         $            10.11         $         1,084         2.98 %          0.00 %          (10.41) %    

2017

      59         $            11.28         $            666         2.00 %          0.00 %          12.80  %    

GREAT-WEST ARIEL MID CAP VALUE FUND

                  

2018

      4         $            44.76         $            197         0.69 %          0.00 %          (14.40) %    

2017

      8         $            52.29         $            398         2.07 %          0.00 %          15.01  %    

2016

      13         $            45.47         $            596         1.42 %          0.00 %          13.05  %    

2015

      16         $            40.22         $            643         1.06 %          0.00 %          (6.10) %    

2014

      25         $            42.83         $         1,067         1.67 %          0.00 %          7.80  %    

GREAT-WEST BOND INDEX FUND

                  

(Effective date 04/24/2009)

                  

2018

      139         $            14.22         $         1,976         1.33 %          0.00 %          (0.41) %    

2017

      145         $            14.28         $         2,070         1.04 %          0.00 %          3.05  %    

2016

      142         $            13.86         $         1,963         0.96 %          0.00 %          1.94  %    

2015

      133         $            13.59         $         1,814         1.61 %          0.00 %          0.24  %    

2014

      140         $            13.56         $         1,892         2.13 %          0.00 %          5.77  %    

 

   (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

 

FINANCIAL HIGHLIGHTS     At December 31        For the year or period ended December 31   

INVESTMENT DIVISIONS

     Units (000s)         Unit Fair Value          Net Assets (000s)       Investment
   Income Ratio   		         Expense Ratio             Total Return      

GREAT-WEST CONSERVATIVE PROFILE FUND

                 

(Effective date 04/28/2017)

                 

2018

      78        $            10.10         $               792         8.65 %          0.00 %          (3.15) %    

2017

      9        $            10.42         $                 96         1.81 %          0.00 %          4.24  %    

GREAT-WEST CORE BOND FUND

                 

(Effective date 04/24/2009)

                 

2018

      166        $            14.39         $            2,394         2.39 %          0.00 %          (1.21) %    

2017

      163        $            14.57         $            2,376         1.95 %          0.00 %          3.89  %    

2016

      168        $            14.02         $            2,349         3.06 %          0.00 %          4.70  %    

2015

      0    *      $            13.40         $                   6         3.65 %          0.00 %          (1.17) %    

GREAT-WEST EMERGING MARKETS EQUITY FUND

                 

(Effective date 04/30/2018)

                 

2018

      0    *      $              8.24         $                   2         0.82 %          0.00 %          (17.55) %    

GREAT-WEST GLOBAL BOND FUND

                 

(Effective date 05/05/2008)

                 

2018

      336        $            14.20         $            4,773         2.55 %          0.00 %          (0.27) %    

2017

      352        $            14.24         $            5,014         1.77 %          0.00 %          1.95  %    

2016

      304        $            13.97         $            4,248         1.33 %          0.00 %          2.98  %    

2015

      307        $            13.57         $            4,170         4.13 %          0.00 %          (4.19) %    

2014

      256        $            14.16         $            3,628         4.86 %          0.00 %          0.14  %    

GREAT-WEST GOVERNMENT MONEY MARKET FUND

                 

2018

      656        $            13.25         $            8,692         1.37 %          0.00 %          1.39  %    

2017

      829        $            13.07         $          10,837         0.38 %          0.00 %          0.41  %    

2016

      1,015        $            13.01         $          13,203         0.00 %          0.00 %          0.00  %    

2015

      830        $            13.01         $          10,807         0.00 %          0.00 %          0.00  %    

2014

      749        $            13.01         $            9,740         0.00 %          0.00 %          0.00  %    

GREAT-WEST INTERNATIONAL INDEX FUND

                 

(Effective date 05/01/2013)

                 

2018

      5        $            11.15         $                 54         2.16 %          0.00 %          (13.84) %    

2017

      4        $            12.94         $                 49         2.03 %          0.00 %          24.62  %    

2016

      0    *      $            10.39         $                   4         0.34 %          0.00 %          0.66  %    

2015

      1        $            10.32         $                 15         1.22 %          0.00 %          (1.08) %    

2014

      1        $            10.43         $                   8         1.59 %          0.00 %          (6.21) %    

GREAT-WEST INTERNATIONAL VALUE FUND

                 

(Effective date 04/25/2007) 2018

      436        $            11.62         $            5,064         1.55 %          0.00 %          (15.58) %    

2017

      308        $            13.76         $            4,235         1.03 %          0.00 %          26.46  %    

2016

      328        $            10.88       $            3,567         0.57 %          0.00 %          3.88  %    

2015

      480        $            10.48         $            5,028         0.87 %          0.00 %          6.45  %    

2014

      379        $              9.84         $            3,727         0.93 %          0.00 %          0.92  %    

 

   (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

 

FINANCIAL HIGHLIGHTS     At December 31        For the year or period ended December 31   

INVESTMENT DIVISIONS

     Units (000s)          Unit Fair Value          Net Assets (000s)       Investment
   Income Ratio   		         Expense Ratio             Total Return      

GREAT-WEST LARGE CAP GROWTH FUND

                  

(Effective date 04/24/2009)

                  

2018

      7         $            31.53         $               207         0.25 %          0.00 %          0.05  %    

2017

      7         $            31.51         $               224         0.78 %          0.00 %          30.05  %    

2016

      7         $            24.23         $               158         0.17 %          0.00 %          1.01  %    

2015

      6         $            23.99         $               136         0.21 %          0.00 %          6.41  %    

2014

      4         $            22.55         $                 90         0.66 %          0.00 %          12.30  %    

GREAT-WEST LIFETIME 2015 FUND

                  

(Effective date 04/21/2016)

                  

2018

      149         $            11.08         $            1,647         2.48 %          0.00 %          (4.41) %    

2017

      62         $            11.59         $               724         1.90 %          0.00 %          11.12  %    

2016

      22         $            10.43         $               227         2.01 %          0.00 %          4.29  %    

GREAT-WEST LIFETIME 2020 FUND

                  

(Effective date 04/29/2016)

                  

2018

      40         $            11.20         $               444         2.91 %          0.00 %          (4.95) %    

2017

      6         $            11.79         $                 69         4.04 %          0.00 %          12.44  %    

GREAT-WEST LIFETIME 2025 FUND

                  

(Effective date 04/21/2016)

                  

2018

      191         $            11.30         $            2,159         2.12 %          0.00 %          (5.74) %    

2017

      151         $            11.99         $            1,806         2.00 %          0.00 %          14.14  %    

2016

      86         $            10.51         $               901         2.20 %          0.00 %          5.06  %    

GREAT-WEST LIFETIME 2030 FUND

                  

(Effective date 04/29/2016)

                  

2018

      105         $            11.50         $            1,211         2.91 %          0.00 %          (6.73) %    

2017

      66         $            12.33         $               820         4.73 %          0.00 %          16.17  %    

2016

      9         $            10.61         $                 93         1.18 %          0.00 %          6.11  %    

GREAT-WEST LIFETIME 2035 FUND

                  

(Effective date 04/21/2016)

                  

2018

      134         $            11.55         $            1,549         2.30 %          0.00 %          (7.86) %    

2017

      44         $            12.54         $               552         2.16 %          0.00 %          18.36  %    

2016

      23         $            10.60         $               249         2.11 %          0.00 %          5.96  %    

GREAT-WEST LIFETIME 2040 FUND

                  

(Effective date 04/29/2016)

                  

2018

      50         $            11.68         $               580         2.75 %          0.00 %          (8.75) %    

2017

      37         $            12.80         $               477         5.96 %          0.00 %          19.53  %    

2016

      8         $            10.71         $                 88         2.39 %          0.00 %          7.09  %    

GREAT-WEST LIFETIME 2045 FUND

                  

(Effective date 04/21/2016)

                  

2018

      42         $            11.60         $               486         1.88 %          0.00 %          (9.36) %    

2017

      26         $            12.80         $               337         2.03 %          0.00 %          20.43  %    

2016

      13         $            10.63         $               138         1.82 %          0.00 %          6.29  %    

 

   (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

 

FINANCIAL HIGHLIGHTS     At December 31        For the year or period ended December 31   

INVESTMENT DIVISIONS

     Units (000s)         Unit Fair Value          Net Assets (000s)       Investment
   Income Ratio   		         Expense Ratio             Total Return      

GREAT-WEST LIFETIME 2050 FUND

                 

(Effective date 04/29/2016)

                 

2018

      20        $            11.69         $               228        2.77 %          0.00 %          (9.53) %    

2017

      15        $            12.92         $               196        3.54 %          0.00 %          20.59  %    

GREAT-WEST LIFETIME 2055 FUND

                 

(Effective date 04/21/2016)

                 

2018

      15        $            11.58         $               173        1.61 %          0.00 %          (9.74) %    

2017

      11        $            12.83         $               143        1.82 %          0.00 %          20.80  %    

2016

      5        $            10.62         $                 56        1.71 %          0.00 %          6.21  %    

GREAT-WEST LOOMIS SAYLES SMALL CAP VALUE FUND

                 

2018

      22        $            35.10         $               756        0.00 %          0.00 %          (16.20) %    

2017

      20        $            41.89         $               831        0.08 %          0.00 %          9.74  %    

2016

      19        $            38.17         $               735        0.08 %          0.00 %          25.83  %    

2015

      17        $            30.34         $               525        0.23 %          0.00 %          (3.47) %    

2014

      20        $            31.42         $               629        0.94 %          0.00 %          4.84  %    

GREAT-WEST MID CAP VALUE FUND

                 

(Effective date 05/01/2015)

                 

2018

      7        $            11.58         $                 81        4.81 %          0.00 %          (12.31) %    

2017

      4        $            13.21         $                 50        13.64 %          0.00 %          16.99  %    

2016

      0    *      $            11.24         $                   1        1.56 %          0.00 %          20.29  %    

GREAT-WEST MODERATE PROFILE FUND

                 

(Effective date 04/28/2017)

                 

2018

      28        $            10.12         $               283        3.33 %          0.00 %          (6.29) %    

2017

      6        $            10.80         $                 67        1.51 %          0.00 %          7.96  %    

GREAT-WEST MODERATELY AGGRESSIVE PROFILE FUND

                 

(Effective date 04/28/2017)

                 

2018

      8        $            10.11         $                 77        3.06 %          0.00 %          (7.63) %    

2017

      2        $            10.95         $                 20        1.15 %          0.00 %          9.49  %    

GREAT-WEST MODERATELY CONSERVATIVE PROFILE FUND

                 

(Effective date 04/28/2017)

                 

2018

      9        $            10.10         $                 87        2.97 %          0.00 %          (4.72) %    

2017

      5        $            10.61         $                 54        1.43 %          0.00 %          6.06  %    

GREAT-WEST MULTI-SECTOR BOND FUND

                 

2018

      13        $            38.01         $               507        2.44 %          0.00 %          (3.11) %    

2017

      15        $            39.23         $               573        1.66 %          0.00 %          6.27  %    

2016

      21        $            36.91         $               790        2.33 %          0.00 %          11.38  %    

2015

      19        $            33.14         $               639        1.34 %          0.00 %          (6.55) %    

2014

      69        $            35.46         $            2,444        3.89 %          0.00 %          3.44  %    

 

   (Continued)

Table of Contents

 COLI VUL-2 SERIES ACCOUNT OF

 GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

 

FINANCIAL HIGHLIGHTS     At December 31        For the year or period ended December 31 

INVESTMENT DIVISIONS

     Units (000s)         Unit Fair Value        Net Assets (000s)     Investment
   Income Ratio   		       Expense Ratio           Total Return    

GREAT-WEST REAL ESTATE INDEX FUND

                 

(Effective date 05/01/2013)

                 

2018

      16          $ 12.50          $ 195        2.17 %        0.00 %        (4.85)  % 

2017

      5          $ 13.14          $ 63        0.84 %        0.00 %        3.10   % 

GREAT-WEST S&P MID CAP 400® INDEX FUND

                                   

(Effective date 05/01/2013)

                 

2018

      90          $ 15.44          $ 1,388        0.69 %        0.00 %        (11.57)  % 

2017

      65          $ 17.46          $ 1,141        0.66 %        0.00 %        15.65   % 

2016

      28          $ 15.10          $ 420        0.61 %        0.00 %        19.96   % 

2015

      24          $ 12.59          $ 300        1.65 %        0.00 %        (2.77)  % 

2014

      0    *        $ 12.92          $ 2        1.39 %        0.00 %        9.19   % 

GREAT-WEST S&P SMALL CAP 600® INDEX FUND

                                         

(Effective date 02/29/2016)

                                         

2018

      1          $ 12.92          $ 14        1.20 %        0.00 %        (8.99)  % 

2017

      9          $ 14.97          $ 142        1.51 %        0.00 %        12.75   % 

2016

      10          $ 13.28          $ 129        1.00 %        0.00 %        32.77   % 

GREAT-WEST SHORT DURATION BOND FUND

                                         

(Effective date 04/25/2007)

                                         

2018

      542          $ 14.10          $ 7,645        1.83 %        0.00 %        0.63   % 

2017

      684          $ 14.01          $ 9,588        1.15 %        0.00 %        1.96   % 

2016

      527          $ 13.74          $ 7,238        1.52 %        0.00 %        1.70   % 

2015

      452          $ 13.51          $ 6,105        1.19 %        0.00 %        0.54   % 

2014

      428          $ 13.44          $ 5,752        1.52 %        0.00 %        0.98   % 

GREAT-WEST T. ROWE PRICE EQUITY INCOME FUND

                                         

2018

      61          $ 26.74          $ 1,625        0.29 %        0.00 %        (9.52)  % 

2017

      59          $ 29.56          $ 1,755        0.88 %        0.00 %        16.22   % 

2016

      60          $ 25.43          $ 1,533        0.66 %        0.00 %        18.75   % 

2015

      90          $ 21.42          $ 1,931        1.21 %        0.00 %        (6.89)  % 

2014

      106          $ 23.00          $ 2,448        1.91 %        0.00 %        7.38   % 

GREAT-WEST T. ROWE PRICE MID CAP GROWTH FUND

                                         

2018

      89          $ 42.43          $ 3,763        0.09 %        0.00 %        (2.33)  % 

2017

      72          $ 43.44          $ 3,121        0.34 %        0.00 %        24.43   % 

2016

      86          $ 34.91          $ 3,009        0.06 %        0.00 %        6.18   % 

2015

      81          $ 32.88          $ 2,670        0.02 %        0.00 %        6.52   % 

2014

      94          $ 30.87          $ 2,906        0.73 %        0.00 %        12.79   % 

GREAT-WEST U.S. GOVERNMENT SECURITIES FUND

                                

2018

      134          $ 22.14          $ 2,964        1.90 %        0.00 %        0.46   % 

2017

      162          $ 22.04          $ 3,567        1.35 %        0.00 %        2.22   % 

2016

      178          $ 21.56          $ 3,841        1.71 %        0.00 %        1.22   % 

2015

      190          $ 21.30          $ 4,057        2.04 %        0.00 %        0.79   % 

2014

      192          $ 21.13          $ 4,062        2.47 %        0.00 %        5.44   % 

 

   (Continued)

Table of Contents

 COLI VUL-2 SERIES ACCOUNT OF

 GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

 

FINANCIAL HIGHLIGHTS     At December 31        For the year or period ended December 31 

INVESTMENT DIVISIONS

     Units (000s)          Unit Fair Value        Net Assets (000s)     Investment
   Income Ratio   		       Expense Ratio           Total Return    

INVESCO V.I. CORE EQUITY FUND

                  

2018

      1           $ 21.35          $ 19        0.91 %        0.00 %        (9.40)  % 

2017

      7           $ 23.57          $ 160        0.95 %        0.00 %        13.17   % 

2016

      7           $ 20.82          $ 147        0.76 %        0.00 %        10.26   % 

2015

      7           $ 18.88          $ 128        0.33 %        0.00 %        (5.77)  % 

2014

      44           $ 20.04          $ 883        0.85 %        0.00 %        8.15   % 

INVESCO V.I. GLOBAL REAL ESTATE FUND

                                          

(Effective date 04/25/2007)

                                          

2018

      40           $ 36.93          $ 1,471        3.70 %        0.00 %        (6.15)  % 

2017

      44           $ 39.36          $ 1,713        3.23 %        0.00 %        13.05   % 

2016

      43           $ 34.81          $ 1,494        1.60 %        0.00 %        2.04   % 

2015

      41           $ 34.12          $ 1,402        3.73 %        0.00 %        (1.48)  % 

2014

      36           $ 34.63          $ 1,242        1.61 %        0.00 %        14.63   % 

INVESCO V.I. HEALTH CARE FUND

                                          

2018

      3           $ 30.73          $ 81        0.00 %        0.00 %        0.91   % 

2017

      3           $ 30.46          $ 88        0.37 %        0.00 %        15.83   % 

2016

      4           $ 26.30          $ 112        0.00 %        0.00 %        (11.46)  % 

2015

      4           $ 29.70          $ 115        0.00 %        0.00 %        3.16   % 

2014

      13           $ 28.79          $ 361        0.00 %        0.00 %        19.66   % 

INVESCO V.I. INTERNATIONAL GROWTH FUND

                                          

(Effective date 05/01/2006)

                                          

2018

      203           $ 15.24          $ 3,100        2.18 %        0.00 %        (14.97)  % 

2017

      191           $ 17.93          $ 3,432        1.46 %        0.00 %        23.00   % 

2016

      191           $ 14.57          $ 2,779        1.43 %        0.00 %        (0.45)  % 

2015

      196           $ 14.64          $ 2,873        1.61 %        0.00 %        (2.34)  % 

2014

      164           $ 14.99          $ 2,456        1.50 %        0.00 %        0.33   % 

INVESCO V.I. MID CAP CORE EQUITY FUND

                                 

(Effective date 04/24/2009)

                                          

2018

      9           $ 22.53          $ 196        0.57 %        0.00 %        (11.35)  % 

2017

      7           $ 25.41          $ 180        0.36 %        0.00 %        14.92   % 

2016

      19           $ 22.12          $ 412        0.07 %        0.00 %        13.43   % 

2015

      17           $ 19.50          $ 323        0.36 %        0.00 %        (4.03)  % 

2014

      17           $ 20.32          $ 346        0.04 %        0.00 %        4.47   % 

INVESCO V.I. TECHNOLOGY FUND

                                          

2018

      5           $ 24.62          $ 129        0.00 %        0.00 %        (0.45)  % 

2017

      7           $ 24.73          $ 169        0.00 %        0.00 %        35.13   % 

2016

      9           $ 18.30          $ 171        0.00 %        0.00 %        (0.75)  % 

2015

      9           $ 18.44          $ 171        0.00 %        0.00 %        6.81   % 

2014

      28           $ 17.26          $ 485        0.00 %        0.00 %        11.07   % 

 

   (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

 

FINANCIAL HIGHLIGHTS     At December 31        For the year or period ended December 31 

INVESTMENT DIVISIONS

     Units (000s)          Unit Fair Value        Net Assets (000s)     Investment
   Income Ratio   		       Expense Ratio           Total Return    

JANUS HENDERSON VIT BALANCED PORTFOLIO

                        

2018

      71           $ 30.93          $ 2,200        2.09 %        0.00 %        0.68   % 

2017

      75           $ 30.72          $ 2,294        1.69 %        0.00 %        18.43   % 

2016

      46           $ 25.94          $ 1,183        2.26 %        0.00 %        4.61   % 

2015

      37           $ 24.80          $ 910        1.67 %        0.00 %        0.62   % 

2014

      48           $ 24.64          $ 1,177        1.69 %        0.00 %        8.50   % 

JANUS HENDERSON VIT FLEXIBLE BOND PORTFOLIO

                        

2018

      69           $ 26.34          $ 1,805        3.63 %        0.00 %        (1.00)  % 

2017

      60           $ 26.60          $ 1,597        3.13 %        0.00 %        3.62   % 

2016

      77           $ 25.68          $ 1,989        2.55 %        0.00 %        2.47   % 

2015

      189           $ 25.06          $ 4,725        2.16 %        0.00 %        0.22   % 

2014

      233           $ 25.00          $ 5,830        3.61 %        0.00 %        4.91   % 

JANUS HENDERSON VIT FORTY PORTFOLIO

                        

2018

      50           $ 45.53          $ 2,257        1.39 %        0.00 %        1.98   % 

2017

      39           $ 44.64          $ 1,732        0.00 %        0.00 %        30.31   % 

2016

      94           $ 34.26          $ 3,231        0.00 %        0.00 %        2.20   % 

2015

      55           $ 33.52          $ 1,855        0.68 %        0.00 %        12.22   % 

2014

      27           $ 29.87          $ 801        0.17 %        0.00 %        8.74   % 

JANUS HENDERSON VIT GLOBAL RESEARCH PORTFOLIO

                        

2018

      59           $ 12.93          $ 757        1.15  %        0.00 %        (6.87)  % 

2017

      58           $ 13.88          $ 800        0.85 %        0.00 %        27.03   % 

2016

      56           $ 10.93          $ 615        1.10 %        0.00 %        2.06   % 

2015

      51           $ 10.71          $ 550        0.50 %        0.00 %        (2.29)  % 

2014

      75           $ 10.96          $ 826        1.21 %        0.00 %        7.45   % 

JANUS HENDERSON VIT GLOBAL TECHNOLOGY PORTFOLIO

                                          

(Effective date 05/05/2008)

                        

2018

      22           $ 42.08          $ 922        1.00 %        0.00 %        1.19   % 

2017

      8           $ 41.59          $ 334        0.47 %        0.00 %        45.09   % 

2016

      4           $ 28.67          $ 114        0.19 %        0.00 %        14.21   % 

2015

      3           $ 25.10          $ 73        0.80 %        0.00 %        4.85   % 

2014

      3           $ 23.93          $ 71        0.00 %        0.00 %        9.57   % 

JANUS HENDERSON VIT OVERSEAS PORTFOLIO

                                 

(Effective date 05/01/2006)

                        

2018

      2           $ 24.73          $ 49        1.76 %        0.00 %        (14.94)  % 

2017

      2           $ 29.07          $ 59        1.64 %        0.00 %        31.12   % 

2016

      3           $ 22.17          $ 56        4.48 %        0.00 %        (6.45)  % 

2015

      3           $ 23.70          $ 76        0.42 %        0.00 %        (8.59)  % 

2014

      7           $ 25.93          $ 188        5.82 %        0.00 %        (11.86)  % 

 

   (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

 

FINANCIAL HIGHLIGHTS     At December 31        For the year or period ended December 31 

INVESTMENT DIVISIONS

     Units (000s)         Unit Fair Value        Net Assets (000s)     Investment
   Income Ratio   		       Expense Ratio           Total Return    

LORD ABBETT SERIES DEVELOPING GROWTH PORTFOLIO

                 

(Effective date 05/01/2015)

                 

2018

      7          $ 11.64          $ 81        0.00 %        0.00  %        4.88   % 

2017

      2          $ 11.10          $ 27        0.00 %        0.00 %        29.92   % 

2016

      2          $ 8.54          $ 21        0.00 %        0.00 %        (2.61)  % 

MFS VIT III MID CAP VALUE PORTFOLIO

                                   

(Effective date 04/28/2017)

                 

2018

      0    *        $ 9.71          $ 2        0.00 %        0.00 %        (11.45)  % 

MFS VIT MID CAP GROWTH SERIES

                                   

(Effective date 04/28/2017)

                 

2018

      0    *        $ 11.66          $ 2        0.00 %        0.00 %        1.23   % 

MFS VIT TOTAL RETURN BOND SERIES

                                   

(Effective date 04/28/2017)

                 

2018

      90          $ 10.13          $ 908        3.33 %        0.00 %        (1.08)  % 

2017

      85          $ 10.24          $ 866        3.32 %        0.00 %        2.42   % 

MFS VIT VALUE SERIES

                                   

(Effective date 05/01/2015)

                       

2018

      30          $ 11.75          $ 356        1.61 %        0.00 %        (10.09)  % 

2017

      26          $ 13.07          $ 337        2.02 %        0.00 %        17.66   % 

2016

      15          $ 11.11          $ 170        3.25 %        0.00 %        14.08   % 

NEUBERGER BERMAN AMT GUARDIAN PORTFOLIO

                 

2018

      1          $ 28.36          $ 19        0.49 %        0.00 %        (7.61)  % 

2017

      5          $ 30.68          $ 138        0.31 %        0.00 %        25.41   % 

2016

      6          $ 24.47          $ 149        0.55 %        0.00 %        8.73   % 

2015

      7          $ 22.50          $ 153        0.73 %        0.00 %        (4.97)  % 

2014

      5          $ 23.68          $ 128        0.46 %        0.00 %        9.02   % 

NEUBERGER BERMAN AMT LARGE CAP VALUE PORTFOLIO

                 

2018

      0    *        $ 27.82          $ 8        1.08 %        0.00 %        (1.04)  % 

2017

      0    *        $ 28.19          $ 12        0.56 %        0.00 %        13.36   % 

2016

      1          $ 24.86          $ 14        0.70 %        0.00 %        27.37   % 

2015

      1          $ 19.51          $ 17        0.70 %        0.00 %        (11.80)  % 

2014

      1          $ 22.11          $ 26        0.71 %        0.00 %        9.89   % 

NEUBERGER BERMAN AMT MID CAP GROWTH PORTFOLIO

                 

2018

      1          $ 22.55          $ 13        0.00 %        0.00 %        (6.41)  % 

2017

      6          $ 24.09          $ 139        0.00 %        0.00 %        25.29   % 

2016

      12          $ 19.23          $ 237        0.00 %        0.00 %        4.39   % 

2015

      13          $ 18.42          $ 244        0.00 %        0.00 %        1.28   % 

2014

      12          $ 18.18          $ 210        0.00 %        0.00 %        7.57   % 

 

   (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

 

FINANCIAL HIGHLIGHTS     At December 31        For the year or period ended December 31 

INVESTMENT DIVISIONS

     Units (000s)         Unit Fair Value        Net Assets (000s)     Investment
   Income Ratio   		       Expense Ratio           Total Return    

NEUBERGER BERMAN AMT MID CAP INTRINSIC VALUE PORTFOLIO

                 

(Effective date 05/01/2006)

                 

2018

      32          $ 22.11          $ 714        0.63 %        0.00 %        (15.28)  % 

2017

      56          $ 26.10          $ 1,462        1.18 %        0.00 %        16.74   % 

2016

      32          $ 22.36          $ 712        0.67 %        0.00 %        16.17   % 

2015

      36          $ 19.24          $ 688        0.75 %        0.00 %        (8.34)  % 

2014

      40          $ 21.00          $ 837        1.12 %        0.00 %        13.88   % 

NEUBERGER BERMAN AMT SUSTAINABLE EQUITY PORTFOLIO

                                   

(Effective date 08/20/2001)

                                         

2018

      2          $ 31.40          $ 77        0.49 %        0.00 %        (5.72)  % 

2017

      2          $ 33.31          $ 77        0.32 %        0.00 %        18.43   % 

2016

      0    *        $ 28.09          $ 7        0.00 %        0.00 %        9.86   % 

OPPENHEIMER MAIN STREET SMALL CAP FUND/VA

                                   

(Effective date 05/01/2015)

                                         

2018

      81          $ 11.30          $ 913        0.34 %        0.00 %        (10.32)  % 

2017

      53          $ 12.60          $ 664        1.25 %        0.00 %        14.16   % 

2016

      23          $ 11.04          $ 253        0.01 %        0.00 %        18.05   % 

2015

      0    *        $ 9.36          $ 2        0.00 %        0.00 %        (6.46)  % 

PIMCO VIT HIGH YIELD PORTFOLIO

                                   

2018

      8          $ 23.43          $ 180        5.08 %        0.00 %        (2.65)  % 

2017

      11          $ 24.07          $ 254        4.87 %        0.00 %        6.60   % 

2016

      21          $ 22.58          $ 483        5.22 %        0.00 %        12.44   % 

2015

      24          $ 20.08          $ 476        5.27 %        0.00 %        (1.64)  % 

2014

      21          $ 20.42          $ 432        5.29 %        0.00 %        3.34   % 

PIMCO VIT LOW DURATION PORTFOLIO

                                   

2018

      404          $ 15.17          $ 6,123        1.93 %        0.00 %        0.34   % 

2017

      380          $ 15.12          $ 5,744        1.33 %        0.00 %        1.35   % 

2016

      326          $ 14.92          $ 4,862        1.44 %        0.00 %        1.41   % 

2015

      163          $ 14.71          $ 2,400        3.35 %        0.00 %        0.31   % 

2014

      186          $ 14.67          $ 2,735        1.12 %        0.00 %        0.89   % 

PIMCO VIT REAL RETURN PORTFOLIO

                                         

2018

      30          $ 17.26          $ 510        2.26 %        0.00 %        (2.21)  % 

2017

      65          $ 17.65          $ 1,141        2.57 %        0.00 %        3.66   % 

2016

      36          $ 17.02          $ 619        2.27 %        0.00 %        5.19   % 

2015

      69          $ 16.18          $ 1,115        4.66 %        0.00 %        (2.71)  % 

2014

      53          $ 16.63          $ 880        1.44 %        0.00 %        3.10   % 

PIMCO VIT TOTAL RETURN PORTFOLIO

                                         

2018

      181          $ 19.54          $ 3,545        2.54 %        0.00 %        (0.53)  % 

2017

      187          $ 19.65          $ 3,673        2.02 %        0.00 %        4.91   % 

2016

      185          $ 18.73          $ 3,456        2.14 %        0.00 %        2.68   % 

2015

      352          $ 18.24          $ 6,428        4.80 %        0.00 %        0.45   % 

2014

      461          $ 18.16          $ 8,372        2.21 %        0.00 %        4.31   % 

 

   (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

 

FINANCIAL HIGHLIGHTS     At December 31        For the year or period ended December 31 

INVESTMENT DIVISIONS

     Units (000s)         Unit Fair Value        Net Assets (000s)     Investment
   Income Ratio   		       Expense Ratio           Total Return    

PIONEER REAL ESTATE SHARES VCT PORTFOLIO

                 

(Effective date 04/29/2016)

                 

2018

      5          $ 9.95          $ 49        2.89 %        0.00 %        (7.24)  % 

2017

      3          $ 10.72          $ 35        2.71 %        0.00 %        3.50   % 

2016

      0    *        $ 10.38          $ 2        1.07 %        0.00 %        3.61   % 

PUTNAM VT EQUITY INCOME FUND

                                   

(Effective date 04/24/2009)

                                   

2018

      10          $ 32.88          $ 341        0.89 %        0.00 %        (8.27)  % 

2017

      13          $ 35.84          $ 453        1.74 %        0.00 %        19.06   % 

2016

      11          $ 30.11          $ 333        1.91 %        0.00 %        13.96   % 

2015

      10          $ 26.42          $ 276        1.69 %        0.00 %        (2.79)  % 

2014

      9          $ 27.18          $ 235        1.80 %        0.00 %        12.97   % 

PUTNAM VT HIGH YIELD FUND

                                   

(Effective date 04/24/2009)

                                   

2018

      32          $ 22.52          $ 722        6.17 %        0.00 %        (3.59)  % 

2017

      36          $ 23.36          $ 831        5.72 %        0.00 %        7.22   % 

2016

      29          $ 21.78          $ 623        6.12 %        0.00 %        15.66   % 

2015

      28          $ 18.83          $ 520        2.01 %        0.00 %        (5.14)  % 

2014

      5          $ 19.86          $ 93        6.17 %        0.00 %        1.95   % 

PUTNAM VT INCOME FUND

                                   

(Effective date 10/31/2014)

                                   

2018

      13          $ 10.63          $ 135        2.96 %        0.00 %        0.20   % 

2017

      2          $ 10.61          $ 22        0.00 %        0.00 %        5.59   % 

PUTNAM VT INTERNATIONAL GROWTH FUND

                                   

(Effective date 04/24/2009)

                          

2018

      2          $ 19.78          $ 45        0.07 %        0.00 %        (18.41)  % 

2017

      0   *        $ 24.24          $ 11        0.83 %        0.00 %        35.37   % 

2016

      0    *        $ 17.91          $ 7        0.00 %        0.00 %        (6.47)   % 

PUTNAM VT SMALL CAP VALUE FUND

                                   

(Effective date 05/01/2015)

                                   

2018

      8          $ 10.39          $ 78        0.63 %        0.00 %        (19.69)  % 

2017

      7          $ 12.94          $ 93        0.88 %        0.00 %        8.15   % 

PUTNAM VT SUSTAINABLE FUTURE FUND

                                   

(Effective date 04/24/2009)

                                   

2018

      3          $ 33.97          $ 88        0.90 %        0.00 %        (4.64)  % 

2017

      3          $ 35.62          $ 115        0.87 %        0.00 %        10.94   % 

2016

      2          $ 32.11          $ 73        0.69 %        0.00 %        13.23   % 

2015

      1          $ 28.35          $ 34        0.00 %        0.00 %        (4.06)  % 

 

   (Continued)

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

 

FINANCIAL HIGHLIGHTS     At December 31        For the year or period ended December 31 

INVESTMENT DIVISIONS

     Units (000s)          Unit Fair Value        Net Assets (000s)     Investment
   Income Ratio   		       Expense Ratio           Total Return    

ROYCE CAPITAL FUND - SMALL-CAP PORTFOLIO

                  

(Effective date 05/01/2006)

                  

2018

      56           $ 18.14          $ 1,008        0.31 %        0.00 %        (8.50)  % 

2017

      55           $ 19.83          $ 1,094        0.82 %        0.00 %        5.10   % 

2016

      60           $ 18.87          $ 1,124        1.70 %        0.00 %        20.54   % 

2015

      60           $ 15.65          $ 946        0.38 %        0.00 %        (11.97)  % 

2014

      59           $ 17.78          $ 1,053        0.00 %        0.00 %        2.89   % 

T. ROWE PRICE BLUE CHIP GROWTH PORTFOLIO

                                          

(Effective date 05/01/2015)

                                          

2018

      110           $ 14.44          $ 1,587        0.00 %        0.00 %        1.65   % 

2017

      72           $ 14.21          $ 1,025        0.00 %        0.00 %        35.83   % 

2016

      6           $ 10.46          $ 67        0.00 %        0.00 %        0.53   % 

VAN ECK VIP EMERGING MARKETS FUND

                                          

(Effective date 05/05/2008)

                                          

2018

      1           $ 40.67          $ 46        0.28 %        0.00 %        (23.49)  % 

2017

      1           $ 53.15          $ 58        0.40 %        0.00 %        51.03   % 

2016

      1           $ 35.20          $ 37        0.44 %        0.00 %        0.10   % 

2015

      1           $ 35.14          $ 41        0.51 %        0.00 %        (13.99)  % 

2014

      1           $ 40.87          $ 41        0.44 %        0.00 %        (0.41)  % 

VAN ECK VIP GLOBAL HARD ASSETS FUND

                                          

(Effective date 05/05/2008)

                                          

2018

      19           $ 40.16          $ 779        0.00 %        0.00 %        (28.28)  % 

2017

      16           $ 55.98          $ 921        0.00 %        0.00 %        (1.70)  % 

2016

      13           $ 56.95          $ 752        0.43 %        0.00 %        43.71  % 

2015

      18           $ 39.63          $ 719        0.03 %        0.00 %        (33.45)  % 

2014

      10           $ 59.54          $ 623        0.09 %        0.00 %        (19.11)  % 

VICTORY RS SMALL CAP GROWTH EQUITY VIP SERIES

                                          

(Effective date 04/30/2018)

                                          

2018

      1           $ 8.71          $ 6        0.00 %        0.00 %        (12.97)  % 

(Concluded)

* The Investment Division has units and/or assets that round to less than $1,000 or 1,000 units.

 

  

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Contract Owners of COLI VUL-2 Series Account and the Board of Directors of Great-West Life & Annuity Insurance Company

Opinion on the Financial Statements

We have audited the accompanying statements of assets and liabilities of the investment divisions listed in Appendix A of the COLI VUL-2 Series Account of Great-West Life & Annuity Insurance Company (the “Series Account”) as of December 31, 2018, the related statements of operations and changes in net assets for the periods indicated in Appendix A, and the related notes. In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the investment divisions constituting the Series Account as of December 31, 2018, the results of their operations, and the changes in their net assets for each of the periods indicated in Appendix A, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Series Account’s management. Our responsibility is to express an opinion on the Series Account’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Series Account in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Series Account is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Series Account’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of December 31, 2018, by correspondence with mutual fund companies; when replies were not received from mutual fund companies, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

/s/ DELOITTE & TOUCHE LLP

Denver, Colorado

April 8, 2019

We have served as the auditor of one or more Great-West investment company separate accounts since 1981.

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Report of Independent Registered Public Accounting Firm

APPENDIX A

 

 

Investment division      

Statement of
assets and
liabilities

 

   Statement of
operations		   Statements of changes in net
assets
       
ALGER SMALL CAP GROWTH PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
AMERICAN CENTURY INVESTMENTS VP CAPITAL APPRECIATION FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
AMERICAN CENTURY INVESTMENTS VP INCOME & GROWTH FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
AMERICAN CENTURY INVESTMENTS VP INFLATION PROTECTION FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
AMERICAN CENTURY INVESTMENTS VP INTERNATIONAL FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
AMERICAN CENTURY INVESTMENTS VP VALUE FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
AMERICAN FUNDS IS GLOBAL SMALL CAPITALIZATION FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
AMERICAN FUNDS IS GROWTH FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
AMERICAN FUNDS IS INTERNATIONAL FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
AMERICAN FUNDS IS NEW WORLD FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
BLACKROCK GLOBAL ALLOCATION VI FUND   December 31, 2018   For the period July 9, 2018 to December 31, 2018   For the period July 9, 2018 to December 31, 2018
       
CLEARBRIDGE VARIABLE MID CAP PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For the year ended December 31, 2018 and for the period March 24, 2017 to December 31, 2017.
       
CLEARBRIDGE VARIABLE SMALL CAP GROWTH PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For the year ended December 31, 2018 and for the period January 26, 2017 to December 31, 2017.
       
COLUMBIA VARIABLE PORTFOLIO - SMALL CAP VALUE FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018

 

Page 1 of 7

Table of Contents

COLI VUL-2 SERIES ACCOUNT OF GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Report of Independent Registered Public Accounting Firm

APPENDIX A

 

 

       
DAVIS FINANCIAL PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
DAVIS VALUE PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
DELAWARE VIP INTERNATIONAL VALUE EQUITY SERIES   December 31, 2018   For the period May 29, 2018 to December 31, 2018   For the period May 29, 2018 to December 31, 2018
       
DELAWARE VIP SMALL CAP VALUE SERIES   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
DREYFUS STOCK INDEX FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
DREYFUS VIF INTERNATIONAL EQUITY PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
DWS CORE EQUITY VIP   N/A   N/A   For the period January 1, 2017 to August 11, 2017
       
DWS CROCI® U.S. VIP   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
DWS GLOBAL SMALL CAP VIP   N/A   For the period January 1, 2018 to June 11, 2018   For the period January 1, 2018 to June 11, 2018 and for the year ended December 31, 2017
       
DWS HIGH INCOME VIP   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
DWS SMALL CAP INDEX VIP   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
DWS SMALL MID CAP VALUE VIP   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
FEDERATED HIGH INCOME BOND FUND II   N/A   N/A   For the period January 1, 2017 to August 4, 2017
       
FEDERATED KAUFMANN FUND II   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
FIDELITY VIP CONTRAFUND PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
FIDELITY VIP GROWTH PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
FIDELITY VIP INVESTMENT GRADE BOND PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
FIDELITY VIP MID CAP PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GOLDMAN SACHS VIT MID CAP VALUE FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018

 

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COLI VUL-2 SERIES ACCOUNT OF GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Report of Independent Registered Public Accounting Firm

APPENDIX A

 

 

       
GREAT-WEST AGGRESSIVE PROFILE FUND   December 31, 2018   For the year ended December 31, 2018   For the year ended December 31, 2018 and for the period July 11, 2017 to December 31, 2017
       
GREAT-WEST AGGRESSIVE PROFILE I FUND   N/A   N/A   For the period January 1, 2017 to July 11, 2017
       
GREAT-WEST ARIEL MID CAP VALUE FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST BOND INDEX FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST CONSERVATIVE PROFILE FUND   December 31, 2018   For the year ended December 31, 2018   For the year ended December 31, 2018 and for the period May 12, 2017 to December 31, 2017
       
GREAT-WEST CONSERVATIVE PROFILE I FUND   N/A   N/A   For the period January 1, 2017 to July 11, 2017.
       
GREAT-WEST CORE BOND FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST EMERGING MARKETS EQUITY FUND   December 31, 2018   For the period December 24, 2018 to December 31, 2018   For the period December 24, 2018 to December 31, 2018
       
GREAT-WEST GLOBAL BOND FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST GOVERNMENT MONEY MARKET FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST INTERNATIONAL INDEX FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST INTERNATIONAL VALUE FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST LARGE CAP GROWTH FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST LIFETIME 2015 FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST LIFETIME 2020 FUND   December 31, 2018   For the year ended December 31, 2018   For the year ended December 31, 2018 and for the period January 30, 2017 to December 31, 2017
       
GREAT-WEST LIFETIME 2025 FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST LIFETIME 2030 FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST LIFETIME 2035 FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018

 

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COLI VUL-2 SERIES ACCOUNT OF GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Report of Independent Registered Public Accounting Firm

APPENDIX A

 

 

       
GREAT-WEST LIFETIME 2040 FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST LIFETIME 2045 FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST LIFETIME 2050 FUND   December 31, 2018   For the year ended December 31, 2018   For the year ended December 31, 2018 and for the period January 30, 2017 to December 31, 2017
       
GREAT-WEST LIFETIME 2055 FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST LOOMIS SAYLES SMALL CAP VALUE FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST MID CAP VALUE FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST MODERATE PROFILE FUND   December 31, 2018   For the year ended December 31, 2018   For the year ended December 31, 2018 and for the period July 11, 2017 to December 31, 2017
       
GREAT-WEST MODERATE PROFILE I FUND   N/A   N/A   For the period January 1, 2017 to July 31, 2017.
       
GREAT-WEST MODERATELY AGGRESSIVE PROFILE FUND   December 31, 2018   For the year ended December 31, 2018   For the year ended December 31, 2018 and for the period July 11, 2017 to December 31, 2017
       
GREAT-WEST MODERATELY AGGRESSIVE PROFILE I FUND   N/A   N/A   For the period January 1, 2017 to July 11, 2017
       
GREAT-WEST MODERATELY CONSERVATIVE PROFILE FUND   December 31, 2018   For the year ended December 31, 2018   For the year ended December 31, 2018 and for the period July 11, 2017 to December 31, 2017
       
GREAT-WEST MODERATELY CONSERVATIVE PROFILE I FUND   N/A   N/A   For the period January 1, 2017 to July 11, 2017
       
GREAT-WEST MULTI-SECTOR BOND FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST REAL ESTATE INDEX FUND   December 31, 2018   For the year ended December 31, 2018   For the year ended December 31, 2018 and for the period January 30, 2017 to December 31, 2017
       
GREAT-WEST S&P MID CAP 400® INDEX FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST S&P SMALL CAP 600® INDEX FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018

 

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COLI VUL-2 SERIES ACCOUNT OF GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Report of Independent Registered Public Accounting Firm

APPENDIX A

 

 

       
GREAT-WEST SHORT DURATION BOND FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST SMALL CAP GROWTH FUND   N/A   For the period June 11, 2018 to July 13, 2018   For the period June 11, 2018 to July 13, 2018
       
GREAT-WEST T. ROWE PRICE EQUITY INCOME FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST T. ROWE PRICE MID CAP GROWTH FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
GREAT-WEST U.S. GOVERNMENT SECURITIES FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
INVESCO V.I. CORE EQUITY FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
INVESCO V.I. DIVERSIFIED DIVIDEND FUND   N/A   N/A   For the period January 1, 2017 to January 2, 2017
       
INVESCO V.I. GLOBAL REAL ESTATE FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
INVESCO V.I. HEALTH CARE FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
INVESCO V.I. INTERNATIONAL GROWTH FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
INVESCO V.I. MID CAP CORE EQUITY FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
INVESCO V.I. TECHNOLOGY FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
JANUS HENDERSON VIT BALANCED PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
JANUS HENDERSON VIT FLEXIBLE BOND PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
JANUS HENDERSON VIT FORTY PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
JANUS HENDERSON VIT GLOBAL RESEARCH PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
JANUS HENDERSON VIT GLOBAL TECHNOLOGY PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
JANUS HENDERSON VIT OVERSEAS PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018

 

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COLI VUL-2 SERIES ACCOUNT OF GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Report of Independent Registered Public Accounting Firm

APPENDIX A

 

 

       
JPMORGAN INSURANCE TRUST INTREPID MID CAP PORTFOLIO   N/A   N/A   For the period January 1, 2017 to April 18, 2017
       
LORD ABBETT SERIES DEVELOPING GROWTH PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
MFS VIT III MID CAP VALUE PORTFOLIO   December 31, 2018   For the period December 24, 2018 to December 31, 2018   For the period December 24, 2018 to December 31, 2018
       
MFS VIT MID CAP GROWTH SERIES   December 31, 2018   For the period December 24, 2018 to December 31, 2018   For the period December 24, 2018 to December 31, 2018
       
MFS VIT TOTAL RETURN BOND SERIES   December 31, 2018   For the year ended December 31, 2018   For the year ended December 31, 2018 and for the period August 4, 2017 to December 31, 2017
       
MFS VIT VALUE SERIES   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
NEUBERGER BERMAN AMT GUARDIAN PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
NEUBERGER BERMAN AMT LARGE CAP VALUE PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
NEUBERGER BERMAN AMT MID CAP GROWTH PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
NEUBERGER BERMAN AMT MID CAP INTRINSIC VALUE PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
NEUBERGER BERMAN AMT SUSTAINABLE EQUITY PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
OPPENHEIMER MAIN STREET SMALL CAP FUND/VA   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
PIMCO VIT HIGH YIELD PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
PIMCO VIT LOW DURATION PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
PIMCO VIT REAL RETURN PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
PIMCO VIT TOTAL RETURN PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018

 

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COLI VUL-2 SERIES ACCOUNT OF GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Report of Independent Registered Public Accounting Firm

APPENDIX A

 

 

       
PIONEER REAL ESTATE SHARES VCT PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
PUTNAM VT EQUITY INCOME FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
PUTNAM VT HIGH YIELD FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
PUTNAM VT INCOME FUND   December 31, 2018   For the year ended December 31, 2018   For the year ended December 31, 2018 and for the period July 24, 2017 to December 31, 2017
       
PUTNAM VT INTERNATIONAL GROWTH FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
PUTNAM VT SMALL CAP VALUE FUND   December 31, 2018   For the year ended December 31, 2018   For the year ended December 31, 2018 and for the period January 30, 2017 to December 31, 2017
       
PUTNAM VT SUSTAINABLE FUTURE FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
ROYCE CAPITAL FUND—MICRO-CAP PORTFOLIO   N/A   For the period January 1, 2018 to May 23, 2018   For the period January 1, 2018 to May 23, 2018 and for the year ended December 31, 2017
       
ROYCE CAPITAL FUND—SMALL-CAP PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
T. ROWE PRICE BLUE CHIP GROWTH PORTFOLIO   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
VAN ECK VIP EMERGING MARKETS FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
VAN ECK VIP GLOBAL HARD ASSETS FUND   December 31, 2018   For the year ended December 31, 2018   For each of the two years in the period ended December 31, 2018
       
VICTORY RS SMALL CAP GROWTH EQUITY VIP SERIES   December 31, 2018   For the period December 24, 2018 to December 31, 2018   For the period December 24, 2018 to December 31, 2018

 

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Table of Contents
PART C
OTHER INFORMATION
Item 26. Exhibits
(a) Board of Directors Resolution. Resolution authorizing establishment of Registrant is incorporated by reference to initial Registrant’s Registration Statement on Form S-6 filed on January 22, 1999 (File No. 333-70963).
(b) Custodian Agreements. None.
(c) Underwriting Contracts. Copy of underwriting contract between Great-West Life & Annuity Insurance Company (“Great-West”) and GWFS Equities, Inc. (formerly Benefits Corp Equities, Inc.) is incorporated by reference to Registrant’s Post- Effective Amendment No. 9 on Form N-6 filed on April 29, 2003 (File No. 333-70963).
(d) Policies.
  (1) Specimen Policy Form 355-CSO is incorporated by reference to Registrant’s Post-Effective Amendment No. 17 on form N-6 filed on September 30, 2008 (File No. 333-70963).
  (2) Specimen Term Life Insurance Rider (Form J355rider-CSO for policies issued after January 1, 2009) is incorporated by reference to Registrant’s Post-Effective Amendment No. 17 on form N-6 filed on September 30, 2008 (File No. 333-70963).
  (3) Specimen Policy Free-Look Endorsement is incorporated by reference to Registrant’s Post- Effective Amendment No. 1 on Form S-6 filed on April 27, 2000 (File No. 333-70963).
  (4) Specimen Policy Return of Expense Charge Endorsement is incorporated by reference to Registrant’s Post-Effective Amendment No. 4 on Form S-6 filed on April 25, 2001 (File No. 333- 70963).
  (5) Change of Insured Rider is incorporated by reference to Registrant’s Post-Effective Amendment No. 10 on Form N-6 filed on April 30, 2004 (File Nos. 333-70963 and 811-09201).
  (6) Specimen Fixed Account Endorsement Form 379 is incorporated by reference to Registrant’s Post- Effective Amendment No. 19 to Registration Statement on Form N-6 as filed on December 17, 2008 (File No. 333-70963).
  (7) Specimen Policy Form J355rev2 is incorporated by reference to Registrant’s Post-Effective Amendment No. 25 to Registration Statement on Form N-6 as filed on April 27, 2012 (File Nos. 333-70963 and 811-09201).
  (8) Specimen Policy Endorsement (Form ICC 12-J801) is incorporated by reference to Registrant’s Post- Effective Amendment No. 26 to Registration Statement filed on Form N-6 as filed on September 27, 2012 (File No. 333-70963).
  (9) Specimen Policy Form J355rev3 is incorporated by reference to Registrant’s Post-Effective Amendment No. 28 to Registration Statement on Form N-6 as filed on February 28, 2014 (File No. 333-70963).
  (10) Specimen Policy Form ICC14-J355X incorporated by reference to Registrant’s Post-Effective Amendment No. 29 to Registration Statement on Form N-6 as filed on December 19, 2014 (File No. 333-70963).
(e) Applications. Specimen Application is incorporated by reference to Registrant’s Pre-Effective Amendment No. 1 on Form S-6 filed on June 23, 1999 (File No. 333-70963).
(f) Depositor’s Certificate of Incorporation and By-Laws.
  (1) Depositor’s Certificate of Incorporation are incorporated by reference to Registrant’s Post-Effective Amendment No. 32 on Form N-6 as filed on April 29, 2015 (File Nos. 333-70963 and 811-09201).
  (2) By-Laws of Great-West are incorporated by reference to Registrant’s Post-Effective Amendment No. 32 on Form N-6 as filed on April 29, 2015 (File Nos. 333-70963 and 811-09201).
(g) Reinsurance Contracts.
C-1

 

  (1) Automatic YRT Reinsurance Agreement Effective October 1, 2008 between Great-West and The Canada Life Assurance Company (redacted), Amendment 1 to the Automatic YRT Reinsurance Agreement Effective October 1, 2008 dated August 1, 2010 (redacted) and Amendment 2 to the Automatic YRT Reinsurance Agreement Effective October 1, 2008 dated August 1, 2010 (redacted) are incorporated by reference to Post-Effective Amendment No. 6 to the Registration Statement filed by COLI VUL-4 Series Account of Great-West Life & Annuity Insurance Company of New York(“Great-West of New York”) on Form N-6 on April 26, 2011 (File No. 333-146241).
  (2) Automatic/Facultative YRT Guaranteed Issue and Fully Underwritten Reinsurance Agreement between Great-West and RGA Reinsurance Company effective May 1, 2010 (redacted) is incorporated by reference to Post-Effective Amendment No. 6 to the Registration Statement filed by COLI VUL-4 Series Account of Great-West of New York on Form N-6 on April 26, 2011 (File No. 333-146241).
  (3) Automatic Yearly Renewable Term Reinsurance Agreement between Great-West and SCOR Global Life U.S. Re Insurance Company effective May 1, 2010 (redacted) is incorporated by reference to Post- Effective Amendment No. 6 to the Registration Statement filed by COLI VUL-4 Series Account of Great-West of New York on Form N-6 on April 26, 2011 (File No. 333-146241).
  (4) Automatic Yearly Renewable Term Reinsurance Agreement between Great-West and Hannover Life Reassurance Company of America effective May 1, 2010 (redacted) is incorporated by reference to Post-Effective Amendment No. 6 to the Registration Statement filed by COLI VUL- 4 Series Account of Great-West of New York on Form N-6 on April 26, 2011 (File No. 333- 146241).
(h) Participation Agreements.
  (1) Participation Agreement among Great-West, AIM Variable Insurance Funds, Inc., and AIM Distributors, Inc., dated April 30, 2004 is filed herewith.
  (2) First Amendment to Participation Agreement among Great-West, AIM Variable Insurance Funds and AIM Distributors, Inc. dated April 30, 2004 is filed herewith.
  (3) Second Amendment to Participation Agreement among Great-West, AIM Variable Insurance Funds and AIM Distributors dated August 1, 2006, is incorporated by reference to Pre Effective Amendment No. 1 to the Registration Statement filed by COLI VUL-4 Series Account of Great-West of New York on Form N-6 filed on December 4, 2007 (File No. 333-146241).
  (4) Third Amendment to Participation Agreement among Great-West, AIM Variable Insurance Funds and AIM Distributors dated November 15, 2007, is incorporated by reference to Pre Effective Amendment No. 1 to the Registration Statement filed by COLI VUL-4 Series Account of Great-West of New York on Form N-6 filed on December 4, 2007 (File No. 333-146241).
  (5) Fourth Amendment to Participation Agreement among Great-West, AIM Variable Insurance Funds and AIM Distributors dated April 30, 2010 is filed herewith.
  (6) Fifth Amendment to Participation Agreement among Great-West, AIM Variable Insurance Funds and AIM Distributors dated November 6, 2013 is filed herewith.
  (7) Fund Participation Agreement among Great-West, The Alger American Fund, Fred Alger Management, Inc., and Fred Alger & Company, Inc. dated September 13, 1999 is filed herewith.
  (8) Amendment to Fund Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), The Alger American Fund, Fred Alger Management, Inc., and Fred Alger & Company, Inc. dated August 17, 2006 is filed herewith.
  (9) Second Amendment to the Fund Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), The Alger American Fund, Fred Alger Management, Inc., and Fred Alger & Company, Inc. dated November 2, 2009 is incorporated by reference to Registrant’s Post-Effective Amendment No. 21 on form N-6 filed on April 16, 2010 (File No. 333- 70963).
C-2

 

  (10) Third Amendment to the Fund Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), The Alger American Fund, Fred Alger Management, Inc., and Fred Alger & Company, Inc. dated September 23, 2013 is filed herewith.
  (11) Fund Participation Agreement among Great-West, American Century Investment Management, Inc., and Fund Distributors, dated September 14, 1999, is incorporated by reference to Registrant’s Post-Effective Amendment No. 5 to Form S-6 filed on April 24, 2002 (File No. 333-70963).
  (12) First Amendment to Fund Participation Agreement among Great-West, American Century Investment Management, Inc. and Fund Distributors, dated April 20, 2000, is incorporated by reference to Registrant’s Post-Effective Amendment No. 13 on Form N-6 filed on April 28, 2006 (File No. 333-70963).
  (13) Second Amendment to Fund Participation Agreement among Great-West, American Century Investment Management, Inc. and American Century Investment Services, Inc., dated May 1, 2002, is incorporated by reference to Registrant’s Post-Effective Amendment No. 13 on Form N-6 filed on April 28, 2006 (File No. 333-70963).
  (14) Third Amendment to Fund Participation Agreement among Great-West, American Century Investment Management, Inc., and American Century Investment Services, Inc., dated April 26, 2005, is incorporated by reference to Registrant’s Post-Effective Amendment No. 12 on Form N-6 filed on April 29, 2005 (File No. 333-70963).
  (15) Fourth Amendment to Fund Participation Agreement among Great-West, American Century Investment Management, Inc., and American Century Investment Services, Inc., dated September 17, 2007 is incorporated by reference to the Initial Registration Statement filed by COLI VUL-4 Series Account of Great-West of New York on Form N-6 filed on September 21, 2007 (File No. 333-146241).
  (16) Fifth Amendment to Fund Participation Agreement among Great-West, American Century Investment Management, Inc., and American Century Investment Services, Inc., dated November 18, 2008 is filed herewith.
  (17) Sixth Amendment to Fund Participation Agreement among Great-West, Great-West of New York, American Century Investment Management, Inc., and American Century Investment Services, Inc., dated September 1, 2013 is filed herewith.
  (18) Seventh Amendment to Fund Participation Agreement among Great-West, Great-West of New York, American Century Investment Management, Inc., and American Century Investment Services, Inc., dated May 1, 2015 is filed herewith.
  (19) Fund Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), American Funds Insurance Series and Capital Research and Management Company dated January 28, 2008 is incorporated by reference to Registrant’s Post-Effective No. 16 on Form N-6 filed on April 21, 2008 (File No. 333-70963).
  (20) Amendment #1 to Fund Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), American Funds Insurance Series and Capital Research and Management Company dated September 30, 2011 is filed herewith.
  (21) Amendment #2 to Fund Participation Agreement among Great-West, Great-West of New York, American Funds Insurance Series and Capital Research and Management Company dated August 28, 2013 is filed herewith.
  (22) Amendment #3 to Fund Participation Agreement among Great-West, Great-West of New York, American Funds Insurance Series and Capital Research and Management Company dated April 3, 2014 is filed herewith.
  (23) Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), Columbia Funds Variable Insurance Trust, Columbia Management Advisors, LLC and Columbia Management Distributors, Inc. dated April 30, 2009 is incorporated by reference to Registrant’s Post-Effective Amendment No. 21 on form N-6 filed on April 16, 2010 (File No. 333- 70963).
C-3

 

  (24) Amendment to Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), Columbia Funds Variable Insurance Trust, Columbia Management Investment Advisors, LLC and Columbia Management Investment Distributors, Inc. dated April 29, 2011 is filed herewith.
  (25) Amendment to Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), Columbia Funds Variable Insurance Trust, Columbia Management Investment Advisors, LLC and Columbia Management Investment Distributors, Inc. dated October 24, 2013 is filed herewith.
  (26) Participation Agreement among Great-West, Great-West of New York, Columbia Funds Variable Insurance Trust, Columbia Management Investment Advisors, LLC and Columbia Management Investment Distributors, Inc. dated May 1, 2015 is filed herewith.
  (27) Participation Agreement among Great-West, Great-West of New York, Columbia Funds Variable Insurance Trust I, Columbia Management Investment Advisors, LLC and Columbia Management Investment Distributors, Inc. dated May 1, 2015 is filed herewith.
  (28) Participation Agreement among Great-West, Great-West of New York, Columbia Funds Variable Insurance Trust II, Columbia Management Investment Advisors, LLC and Columbia Management Investment Distributors, Inc. dated May 1, 2015 is filed herewith.
  (29) Fund Participation Agreement among Great-West, Davis Variable Account Fund, Inc., Davis Selected Advisers, L.P. and Davis Distributors, LLC, dated December 16, 2004, is incorporated by reference to Registrant’s Post-Effective Amendment No. 12 on Form N-6 filed on April 29, 2005 (File No. 333-70963).
  (30) First Amendment to Fund Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), Davis Variable Account Fund, Inc., Davis Selected Advisers, L.P., and Davis Distributors, LLC, dated July 2, 2007 is incorporated by reference to the Initial Registration Statement filed by COLI VUL-4 Series Account of First Great-West on Form N-6 filed on September 21, 2007 (File No. 333-146241).
  (31) Second Amendment to Fund Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), Davis Variable Account Fund, Inc., Davis Selected Advisers, L.P., and Davis Distributors, LLC, dated October 29, 2008 is filed herewith.
  (32) Third Amendment to Fund Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), Davis Variable Account Fund, Inc., Davis Selected Advisers, L.P., and Davis Distributors, LLC, dated August 16, 2013 is filed herewith.
  (33) Participation Agreement among Great-West, Delaware Group Premium Fund (now known as Delaware VIP Trust), Delaware Management Company, and Delaware Distributors, L.P., dated April 20, 2001 is incorporated by reference to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, filed by Variable Annuity-1 Series Account of Great-West on April 24, 2001 (File No. 333-52956).
  (34) Amendment to Participation Agreement among Great-West, Delaware Group Premium Fund (now known as Delaware VIP Trust), Delaware Management Company, and Delaware Distributors, L.P., dated May 1, 2003 is filed herewith.
  (35) Amendment to Participation Agreement among Great-West, Delaware Group Premium Fund (now known as Delaware VIP Trust), Delaware Management Company, and Delaware Distributors, L.P., dated June 2, 2003 is incorporated by reference to Post-Effective Amendment No. 10 to Variable Annuity-1 Series Account of Great-West’s Registration Statement on Form N-4, filed May 29, 2003 (File No. 333- 52956).
  (36) Amendment to Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), Delaware VIP Trust, Delaware Management Company, and Delaware Distributors, L.P., dated April 2005 is incorporated by reference to Post-Effective Amendment No. 16 on Form N-4 filed on April 29, 2005 (File No. 333- 01153).
  (37) Amendment to Participation Agreement among Great-West, Delaware VIP Trust, Delaware Management Company, and Delaware Distributors, L.P., dated October 1, 2005 is filed herewith.
C-4

 

  (38) Amendment to Participation Agreement among Great-West, Delaware VIP Trust, Delaware Management Company, and Delaware Distributors, L.P., dated November 14, 2011 is incorporated by reference to Pre-Effective Amendment No. 1 to the Registration Statement filed by Variable Annuity-2 Series Account on Form N-4, filed December 30, 2011 (File No. 333-176926).
  (39) Amendment to Fund Participation Agreement among Great-West, Delaware VIP Trust, Delaware Management Company and Delaware Distributors, L.P. dated May 7, 2014 is incorporated by reference to Registrant’s Post-Effective Amendment No. 30 to Registration Statement on Form N-6 as filed on October 22, 2014 (File No. 333-70963).
  (40) Amendment to Participation Agreement among Great-West, Delaware VIP Trust, Delaware Management Company, and Delaware Distributors, L.P., dated August 1, 2014 is filed herewith.
  (41) Amendment to Participation Agreement among Great-West, Delaware VIP Trust, Delaware Management Company, and Delaware Distributors, L.P., dated May 1, 2016 is filed herewith.
  (42) Fund Participation Agreement among Great-West and Dreyfus Stock Index Fund Inc. (formerly known as Dreyfus Life & Annuity Index Fund, Inc.), dated December 31, 1998, is incorporated by reference to Registrant’s Post- Effective Amendment No. 5 to Form S-6 filed on April 24, 2002 (File No. 333-70963).
  (43) Amendment to Fund Participation Agreement among Great-West and Dreyfus Stock Index Fund, Inc. (formerly known as Dreyfus Life & Annuity Index Fund, Inc.), dated March 15, 1999, is incorporated by reference to Registrant’s Post-Effective Amendment No. 5 to Form S-6 filed on April 24, 2002 (File No. 333-70963).
  (44) Amendment to Fund Participation Agreement among Great-West, Dreyfus Growth and Value Funds, Inc., Dreyfus Stock Index Fund, Inc. (formerly known as Dreyfus Life & Annuity Index Fund, Inc.) and Dreyfus Variable Investment Fund, dated January 1, 2002, is incorporated by reference to Registrant’s Post-Effective Amendment No. 13 on Form N-6 filed on April 28, 2006 (File No. 333-70963).
  (45) Third Amendment to Fund Participation Agreement among Great-West, Dreyfus Stock Index Fund, Inc. (formerly known as Dreyfus Life & Annuity Index Fund, Inc.) and Dreyfus Variable Investment Fund, dated December 1, 2004, is incorporated by reference to Registrant’s Post- Effective Amendment No. 13 on Form N-6 filed on April 28, 2006 (File No. 333-70963).
  (46) Fourth Amendment to Fund Participation Agreement among Great-West, First Great-West (now known as Great- West of New York), Dreyfus Investment Portfolios, The Dreyfus Socially Responsible Growth Fund, Inc., Dreyfus Stock Index Fund, Inc. and Dreyfus Variable Investment Fund, dated July 31, 2007 is incorporated by reference to Initial Registration Statement filed by COLI VUL-4 Series Account of First Great-West on Form N-6 filed on September 21, 2007 (File No. 333-146241).
  (47) Fifth Amendment to Fund Participation Agreement among Great-West, First Great-West (now known as Great- West of New York), Dreyfus Investment Portfolios, The Dreyfus Socially Responsible Growth Fund, Inc., Dreyfus Stock Index Fund, Inc. and Dreyfus Variable Investment Fund, dated January 9, 2009 is filed herewith.
  (48) Sixth Amendment to Fund Participation Agreement among Great-West, First Great-West (now known as Great- West of New York), Dreyfus Investment Portfolios, The Dreyfus Socially Responsible Growth Fund, Inc., Dreyfus Stock Index Fund, Inc. and Dreyfus Variable Investment Fund, dated October 1, 2009 is filed herewith.
  (49) Eighth Amendment to Fund Participation Agreement among Great-West, First Great-West (now known as Great- West of New York), Dreyfus Investment Portfolios, The Dreyfus Socially Responsible Growth Fund, Inc., Dreyfus Stock Index Fund, Inc. and Dreyfus Variable Investment Fund, dated November 1, 2013 is filed herewith.
  (50) Fund Participation Agreement among Great-West, Scudder Variable Series I, Scudder Variable Series II, Scudder Investment VIT Funds, Deutsche Investment Management Americas, Inc., Deutsche Asset Management, Inc. and Scudder Distributors, dated March 31, 2005, is incorporated by reference to Registrant’s Post-Effective Amendment No. 12 on Form N-6 filed on April 29, 2005 (File No. 333-70963).
C-5

 

  (51) First Amendment to Fund Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), DWS Variable Series I (formerly Scudder Variable Series I), DWS Variable Series II (formerly Scudder Variable Series II), DWS Investments VIT Funds (formerly Scudder Investments VIT Funds), Deutsche Investment Management Americas Inc. and DWS Scudder Distributors, Inc. (formerly Scudder Distributors, Inc.) dated April 11, 2007 is incorporated by reference to the Initial Registration Statement of COLI VUL-4 Series Account of Great-West of New York filed on September 21, 2007 (File No. 333-146241).
  (52) Second Amendment to Fund Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), DWS Variable Series I, DWS Variable Series II, DWS Investments VIT Funds, Deutsche Investment Management Americas Inc. and DWS Scudder Distributors, Inc. dated July 1, 2007 is incorporated by reference to the Initial Registration Statement of COLI VUL-4 Series Account of Great-West of New York filed on September 21, 2007 (File No. 333-146241).
  (53) Third Amendment to Fund Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), DWS Variable Series I, DWS Variable Series II, DWS Investments VIT Funds, Deutsche Investment Management Americas Inc. and DWS Investments Distributors, Inc. (formerly DWS Scudder Distributors, Inc.) dated November 20, 2008 is filed herewith.
  (54) Fourth Amendment to Fund Participation Agreement among Great-West, Great-West of New York), DWS Variable Series I, DWS Variable Series II, DWS Investments VIT Funds, Deutsche Investment Management Americas Inc. and DWS Investments Distributors, Inc. dated August 10, 2013 is filed herewith.
  (55) Fund Participation Agreement among Great-West, Great-West of New York, Eaton Vance Variable Trust and Eaton Vance Distributors, Inc. dated April 28, 2016 is filed herewith.
  (56) Fund Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), Federated Insurance Series and Federated Securities Corp. dated March 3, 2012 is incorporated by reference to Registrant’s Post-Effective Amendment No. 25 to Registration Statement on Form N-6 as filed on April 27, 2012 (File No. 333-70963).
  (57) First Amendment to Fund Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), GWFS Equities, Inc., Federated Insurance Series and Federated Securities Corp. dated March 3, 2012 is incorporated by reference to Registrant’s Post- Effective Amendment No. 25 to Registration Statement on Form N-6 as filed on April 27, 2012 (File Nos. 333-70963 and 811-09201).
  (58) Participation Agreement among Great-West, Variable Insurance Products Fund and Fidelity Distributors Corporation, dated February 1, 1994, is incorporated by reference to Registrant’s Post-Effective Amendment No. 5 to Form S-6 filed on April 24, 2002 (File No. 333-70963).
  (59) First Amendment to Participation Agreement among Great-West, Variable Insurance Products Fund and Fidelity Distributors Corporation, dated November 1, 2000, is incorporated by reference to Registrant’s Post-Effective Amendment No. 5 to Form S-6 filed on April 24, 2002 (File No. 333-70963).
  (60) Second Amendment to Participation Agreement among Great-West, Variable Insurance Products Fund and Fidelity Distributors Corporation, dated May 1, 2001, is incorporated by reference to Registrant’s Post-Effective Amendment No. 5 to Form S-6 filed on April 24, 2002 (File No. 333- 70963).
  (61) Participation Agreement among Great-West, Variable Insurance Products Fund II and Fidelity Distributors Corporation, dated May 1, 1999, is incorporated by reference to Registrant’s Post- Effective Amendment No. 5 to Form S-6 filed on April 24, 2002 (File No. 333-70963).
  (62) First Amendment to Participation Agreement among Great-West, Variable Insurance Products Fund II and Fidelity Distributors Corporation, dated November 1, 2000, is incorporated by reference to Registrant’s Post-Effective Amendment No. 5 to Form S-6 filed on April 24, 2002 (File No. 333-70963).
  (63) Participation Agreement among Great-West, Variable Insurance Products Fund III and Fidelity Distributors Corporation, dated November 1, 2000, is incorporated by reference to Registrant’s Post-Effective Amendment No. 13 on Form N-6 filed on April 28, 2006 (File No. 333-70963).
C-6

 

  (64) First Amendment to Participation Agreement among Great-West, Variable Insurance Products Fund III and Fidelity Distributors Corporation, dated May 1, 2001, is incorporated by reference to Registrant’s Post-Effective Amendment No. 13 on Form N-6 filed on April 28, 2006 (File No. 333-70963).
  (65) Amended and Restated Fund Participation Agreement among Great-West, Variable Insurance Products Funds, and Fidelity Distributors Corporation dated October 26, 2006 is incorporated by reference to Registrant’s Post-Effective Amendment No. 14 to the Registration Statement filed on Form N-6 on April 30, 2007 (File No. 333-70963).
  (66) Amendment to Fund Participation Agreement among Great-West, Variable Insurance Products Funds, and Fidelity Distributors Corporation dated May 16, 2007 is incorporated by reference to Pre-Effective Amendment No. 1 to the Registration Statement filed by COLI VUL-4 Series Account of Great-West on Form N-6 filed on November 1, 2007 (File No. 333-145333).
  (67) Second Amendment to Amended and Restated Participation Agreement among Great-West, Variable Insurance Products I, Variable Insurance Products II, Variable Insurance Products III, Variable Insurance Products IV, Variable Insurance Products V and Fidelity Distributors Corporation dated August 29, 2007 is incorporated by reference to Pre-Effective Amendment No. 1 to the Registration Statement filed by COLI VUL-4 Series Account of Great-West on Form N-6 filed on November 1, 2007 (File No. 333-145333).
  (68) Third Amendment to Amended and Restated Participation Agreement among Great-West, Variable Insurance Products I, Variable Insurance Products II, Variable Insurance Products III, Variable Insurance Products IV, Variable Insurance Products V and Fidelity Distributors Corporation dated October 1, 2009 is filed herewith.
  (69) Fourth Amendment to Amended and Restated Participation Agreement among Great-West, Variable Insurance Products I, Variable Insurance Products II, Variable Insurance Products III, Variable Insurance Products IV, Variable Insurance Products V and Fidelity Distributors Corporation dated September 1, 2013 is filed herewith.
  (70) Fifth Amendment to Amended and Restated Participation Agreement among Great-West, Variable Insurance Products I, Variable Insurance Products II, Variable Insurance Products III, Variable Insurance Products IV, Variable Insurance Products V and Fidelity Distributors Corporation dated April 28, 2017 is filed herewith.
  (71) Participation Agreement among Great-West, Great-West of New York, Goldman Sachs Variable Insurance Trust, and Goldman, Sachs & Co. dated April 19, 2013 is incorporated by reference to Registrant’s Post-Effective Amendment No. 27 to Registration Statement on Form N-6 as filed on April 26, 2013 (File No. 333-70963).
  (72) First Amendment to Participation Agreement among Great-West, Great-West of New York, Goldman Sachs Variable Insurance Trust, and Goldman, Sachs & Co. dated July 22, 2013 is filed herewith.
  (73) Agreement among Great-West and Maxim Series Fund, Inc. (now known as Great-West Funds, Inc.) dated November 1, 1999 is filed herewith.
  (74) Amendment to Agreement among Great-West, First Great-West (now known as Great-West of New York), and Maxim Series Fund, Inc. (now known as Great-West Funds, Inc.) dated October 31, 2007, is incorporated by reference to Pre-Effective Amendment No. 1 to the Registration Statement filed by COLI VUL-4 Series Account of Great-West on Form N-6 filed on November 1, 2007 (File No. 333-145333).
  (75) Second Amendment to Agreement among Great-West, First Great-West (now known as Great-West of New York), and Maxim Series Fund, Inc. (now known as Great-West Funds, Inc.) dated March 23, 2008 is filed herewith.
  (76) Amendment to Agreement among Great-West, First Great-West (now known as Great-West of New York), and Great-West Funds, Inc. dated August 2, 2013 is filed herewith.
C-7

 

  (77) Fund Participation Agreement among Great-West, Great-West of New York, Maxim Series Fund, Inc. (now known as Great-West Funds, Inc.), GW Capital Management LLC, and GWFS Equities, Inc. dated December 15, 2011 is filed herewith.
  (78) Fund Participation Agreement among Great-West, Janus Aspen Series and Janus Capital Corporation, dated June 1, 1998, is incorporated by reference to Registrant’s Post-Effective Amendment No. 5 to Form S-6 filed on April 24, 2002 (File No. 333-70963).
  (79) Letter Agreement Supplement to Fund Participation Agreement among Great-West, Janus Aspen Series and Janus Capital Corporation, dated April 27, 1998, is incorporated by reference to Registrant’s Post-Effective Amendment No. 5 to Form S-6 filed on April 24, 2002 (File No. 333- 70963).
  (80) Amendment to Fund Participation Agreement among Great-West, Janus Aspen Series and Janus Capital Corporation, dated December 1, 1998, is incorporated by reference to Registrant’s Post- Effective Amendment No. 5 to Form S-6 filed on April 24, 2002 (File No. 333-70963).
  (81) Amendment to Fund Participation Agreement among Great-West, Janus Aspen Series and Janus Capital Corporation, dated October 4, 1999, is incorporated by reference to Registrant’s Post- Effective Amendment No. 5 to Form S-6 filed on April 24, 2002 (File No. 333-70963).
  (82) Amendment to Fund Participation Agreement among Great-West, Janus Aspen Series, and Janus Capital Corporation dated January 31, 2007 is incorporated by reference to Registrant’s Post- Effective Amendment No. 17 on form N-6 filed on September 30, 2008 (File No. 333-70963).
  (83) Third Amendment to Fund Participation Agreement between Great-West, Janus Aspen Series and Janus Capital Corporation, dated September 14, 2007 is incorporated by reference to Pre-Effective Amendment No. 1 to the Registration Statement filed by COLI VUL-4 Series Account of Great- West on Form N-6 filed on November 1, 2007 (File No. 333-145333).
  (84) Amendment to Fund Participation Agreement between Great-West, Janus Aspen Series and Janus Capital Corporation, dated January 16, 2013 is filed herewith.
  (85) Amendment to Fund Participation Agreement between Great-West, Janus Aspen Series and Janus Capital Corporation, dated September 11, 2013 is filed herewith.
  (86) Fund Participation Agreement among Great-West, Great-West of New York, Janus Aspen Series and Janus Distributors, LLC dated December 1, 2015 is filed herewith.
  (87) Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), JPMorgan Insurance Trust, JPMorgan Investment Advisors Inc., and J.P. Morgan Investment Management Inc., dated April 24, 2009 is filed herewith.
  (88) Amendment to Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), JPMorgan Insurance Trust, JPMorgan Investment Advisors Inc., J.P. Morgan Investment Management Inc. and JPMorgan Funds Management, Inc., dated April 13, 2015 is filed herewith.
  (89) Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), Lord Abbett Series Fund, Inc. and Lord Abbett Distributor LLC dated September 8, 2011 is filed herewith.
  (90) First Amendment to Participation Agreement among Great-West, Great-West of New York, Lord Abbett Series Fund, Inc. and Lord Abbett Distributor LLC dated August 21, 2013 is filed herewith.
  (91) Second Amendment to Participation Agreement among Great-West, Great-West of New York, Lord Abbett Series Fund, Inc. and Lord Abbett Distributor LLC dated April 1, 2014 is filed herewith.
  (92) Third Amendment to Participation Agreement among Great-West, Great-West of New York, Lord Abbett Series Fund, Inc. and Lord Abbett Distributor LLC dated April 17, 2015 is filed herewith.
C-8

 

  (93) Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), MFS Variable Insurance Trust I (now known as MFS Variable Insurance Trust), MFS Variable Insurance Trust II, and MFS Fund Distributors, Inc., dated April 1, 2011, is incorporated by reference to Registrant’s Post-Effective Amendment No. 27 to Registration Statement on Form N-6 as filed on April 21, 2017 (File No. 333-70963).
  (94) Amendment to Participation Agreement among Great-West, Great-West of New York, MFS Variable Insurance Trust, MFS Variable Insurance Trust II, and MFS Fund Distributors, Inc., dated April 2017 is filed herewith.
  (95) Fund Participation Agreement among Great-West, Neuberger Berman Advisers Management Trust, Advisers Managers Trust, and Neuberger Berman Management Incorporated, dated January 1, 1999, is incorporated by reference to Registrant’s Post-Effective Amendment No. 5 to Form S-6 filed on April 24, 2002 (File No. 333-70963).
  (96) Amendment to Fund Participation Agreement among Great-West, Neuberger Berman Advisers Management Trust, Advisers Managers Trust, and Neuberger Berman Management Incorporated, dated October 24, 2007 is incorporated by reference to Pre-Effective Amendment No. 1 to the Registration Statement filed by COLI VUL-4 Series Account of Great-West of New York on Form N-6 filed on December 4, 2007 (File No. 333-146241).
  (97) Fund Participation Agreement among Great-West, PIMCO Variable Insurance Trust, Pacific Investment Management Company LLC and PIMCO Advisors Distributors LLC, dated March 1, 2004 is incorporated by reference to Registrant’s Post-Effective Amendment No. 10 on Form N-6 filed on May 3, 2004 (File No. 333-70963).
  (98) First Amendment to Participation Agreement among Great-West, PIMCO Variable Trust, Pacific Investment Management Company, LLC, Allianz Global Investors Distributors, LLC and First- Great-West dated August 31, 2007 is incorporated by reference to Pre-Effective Amendment No. 1 to the Registration Statement filed by COLI VUL-4 Series Account of Great-West on Form N-6 filed on November 1, 2007 (File No. 333-145333).
  (99) Second Amendment to Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), PIMCO Variable Insurance Trust, Pacific Investment Management Company, LLC and Allianz Global Investors Distributors, LLC dated November 5, 2008 is filed herewith.
  (100) Participation Agreement among Great-West, Great-West of New York, Pioneeer Variable Contracts Trust, Pioneer Investment Management, Inc. and Pioneer Funds Distributor, Inc. dated 2016 is filed herewith.
  (101) Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), Putnam Variable Trust and Putnam Management Limited Partnership dated April 30, 2008 is incorporated by reference to Registrant’s Post-Effective Amendment No. 17 on form N-6 filed on September 30, 2008 (File No. 333-70963).
  (102) First Amendment to Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), Putnam Variable Trust and Putnam Management Limited Partnership, dated July 22, 2009 is filed herewith.
  (103) Fund Participation Agreement among Great-West, Royce Capital Fund, and Royce & Associates, LLC dated September 30, 2005 is incorporated by reference to Registrant’s Post-Effective Amendment No. 14 to the Registration Statement filed on Form N-6 on April 30, 2007 (File No. 333-70963).
  (104) Amendment to Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), Royce Capital Fund, and Royce and Associates, LLC dated May 1, 2009 is incorporated by reference to Registrant’s Post-Effective Amendment No. 21 on form N-6 filed on April 16, 2010 (File No. 333-70963).
  (105) Second Amendment to Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), Royce Capital Fund, and Royce and Associates, LLC dated September 18, 2013 is filed herewith.
C-9

 

  (106) Fund Participation Agreement among Great-West, T. Rowe Price Equity Series, Inc., T. Rowe Price Fixed Income Series, Inc., T. Rowe Price International Series, Inc. and T. Rowe Price Investment Services, Inc. dated February 1, 2002 is filed herewith.
  (107) First Amendment to Fund Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), T. Rowe Price Equity Series, Inc., T. Rowe Price Fixed Income Series, Inc., T. Rowe Price International Series, Inc. and T. Rowe Price Investment Services, Inc. dated November 10, 2008 is filed herewith.
  (108) Second Amendment to Fund Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), T. Rowe Price Equity Series, Inc., T. Rowe Price Fixed Income Series, Inc., T. Rowe Price International Series, Inc. and T. Rowe Price Investment Services, Inc. dated November 30, 2011 is filed herewith.
  (109) Amendment to Fund Participation Agreement among Great-West, Great-West of New York, T. Rowe Price Equity Series, Inc., T. Rowe Price Fixed Income Series, Inc., T. Rowe Price International Series, Inc. and T. Rowe Price Investment Services, Inc. dated August 29, 2013 is filed herewith.
  (110) Amendment to Fund Participation Agreement among Great-West, Great-West of New York, T. Rowe Price Equity Series, Inc., T. Rowe Price Fixed Income Series, Inc., T. Rowe Price International Series, Inc. and T. Rowe Price Investment Services, Inc. dated March 17, 2014 is filed herewith.
  (111) Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), Van Eck Worldwide Insurance Trust, Van Eck Securities Corporation and Van Eck Associates Corporation dated October 11, 2007 is incorporated by reference to Registrant’s Post-Effective Amendment No. 16 on Form N-6, as filed on April 21, 2008 (File No. 333-70963).
  (112) Amendment No. 1 to Participation Agreement among Great-West, First Great-West (now known as Great-West of New York), Van Eck Worldwide Insurance Trust, Van Eck Securities Corporation and Van Eck Associates Corporation dated October 1, 2009 is filed herewith.
  (113) Amendment No. 3 to Participation Agreement among Great-West, Great-West of New York, Van Eck Worldwide Insurance Trust, Van Eck Securities Corporation and Van Eck Associates Corporation dated August 28, 2014 is filed herewith.
  (114) Participation Agreement among Great-West, Great-West of New York, Victory Variable Insurance Funds, Victory Capital Management Inc. and Victory Capital Advisers, Inc. dated May 1, 2018 is filed herewith.
(i) Administrative Contracts. None.
(j) Other Material Contracts. Form of Rule 22c-2 Shareholder Information Agreement is incorporated by reference to Post Effective Amendment No. 14 to the Registration Statement filed on Form N-6 on April 30, 2007 (File No. 333-70963).
(k) Legal Opinion. An opinion and consent of counsel regarding the legality of the securities being registered is incorporated by reference to Registrant’s Pre-Effective Amendment No. 1 to Form S-6 filed on June 23, 1999 (File No. 333-70963).
(l) Actuarial Opinion. None.
(m) Calculation of Hypothetical Illustration Value is incorporated by reference to Registrant’s Post Effective Amendment No. 9 to Form N-6 filed on April 29, 2003 (File No. 333-70963).
(n) Other Opinions.
  (1) Legal Consent of Carlton Fields, P.A. is filed herewith.
  (2) Written consent of Deloitte & Touche LLP is filed herewith.
(o) Omitted Financial Statements. None
(p) Initial Capital Agreements. None.
C-10

 

(q) Redeemability Exemption. None.
(r) Powers of Attorney for Directors Bernbach, Bienfait, Coutu, A. Desmarais, P. Desmarais, Jr., Doer, Fleming, Généreux, Louvel, Madoff, Mahon, Orr, Ryan, Jr., Selitto, Tretiak, and Walsh are filed herewith.
Item 27. Directors and Officers of the Depositor
Name Principal Business Address Positions and Offices with Depositor
R.J. Orr (4) Chairman of the Board
J.L. Bernbach 32 East 57th Street, 10th Floor
New York, NY 10022 		Director
R. Bienfait (4) Director
M.R. Coutu Brookfield Asset Management Inc.
335 8th Avenue SW, Suite 1700
Calgary, AB T2P 1C9 		Director
A.R. Desmarais (4) Director
P.G. Desmarais, Jr. (4) Director
G.A. Doer (1) Director
G.J. Fleming (2) Director
C. Généreux (4) Director
A. Louvel 930 Fifth Avenue, Apt. 17D
New York, NY 10021 		Director
P.B. Madoff 260 West 11th Street
New York, NY 10021 		Director
P.A. Mahon (1) Director
D. Raymond First Canadian Place
100 King Street West
Suite 7050 – 70th Floor
Toronto, ON M5X 1C7 		Director
R.L. Reynolds (2) Director
T.T. Ryan, Jr. JP Morgan Chase
270 Park Avenue, Floor 47
New York, NY 10017 		Director
J.J. Selitto 437 West Chestnut Hill Avenue
Philadelphia, PA 19118 		Director
G.D. Tretiak (4) Director
B.E. Walsh Saguenay Capital, LLC
The Centre at Purchase
Two Manhattanville Road, Suite 403
Purchase, NY 10577 		Director
E.F. Murphy, III (2) President and Chief Executive Officer
R.K. Shaw (2) President, Individual Markets
S.C. Sipple (2) President, Great-West Investments
A.S. Bolotin (2) Executive Vice President & Chief Financial Officer
J.W. Knight (3) Senior Vice President & Chief Technology Officer
C.M. Moritz (2) Senior Vice President and Chief Financial Officer, Empower Retirement
S.M. Sanchez (2) Chief Human Resources Officer
K.I. Schindler (3) Chief Compliance Officer
R.G. Schultz (3) General Counsel, Chief Legal Officer, and Secretary
J.F. Bevacqua (2) Chief Risk Officer
R.H. Linton, Jr. (2) Executive Vice President, Empower Retirement Operations
C-11

 

Name Principal Business Address Positions and Offices with Depositor
R.G. Capone (2) Senior Vice President, GWI Sales
J.E. Brown (2) Senior Vice President, Separate Accounts
S.E. Jenks (2) Senior Vice President, Marketing
R.J. Laeyendecker (2) Senior Vice President, Executive Benefits Markets
W.J. McDermott (2) Senior Vice President, Large, Mega, NFP Market
D.G. McLeod (2) Senior Vice President, Product Management
D.A. Morrison (2) Senior Vice President, Government Markets
J.M. Smolen (2) Senior Vice President, Core Market
C.G. Step (2) Senior Vice President, Empower Retirement Products
C. E. Waddell (2) Senior Vice President, Retirement Solutions
(1)    100 Osborne Street North, Winnipeg, Manitoba, Canada R3C 3A5.
(2)    8515 East Orchard Road, Greenwood Village, Colorado 80111.
(3)    8525 East Orchard Road, Greenwood Village, Colorado 80111.
(4)    Power Financial Corporation, 751 Victoria Square, Montreal, Quebec, Canada H2Y 2J3.
Item 28. Persons Controlled by or Under Common Control with the Depositor or Registrant as of December 31, 2018
The Registrant is a separate account of Great-West Life & Annuity Insurance Company, a stock life insurance company incorporated under the laws of the State of Colorado (“Depositor”). The Depositor is an indirect subsidiary of Power Corporation of Canada. An organizational chart for Power Corporation of Canada is set forth below.
C-12

 

Organizational Chart – December 31, 2018
I. OWNERSHIP OF POWER CORPORATION OF CANADA
The following sets out the ownership, based on votes attached to the outstanding voting shares, of Power Corporation of Canada:
The Desmarais Family Residuary Trust
  99.999% - Pansolo Holding Inc.
        59.11% - Power Corporation of Canada
          The total voting rights of Power Corporation of Canada (PCC) controlled directly and indirectly by the Desmarais Family Residuary Trust are as follows. There are issued and outstanding as of December 31, 2018 417,101,146 Subordinate Voting Shares (SVS) of PCC carrying one vote per share and 48,854,772 Participating Preferred Shares (PPS) carrying 10 votes per share; hence the total voting rights are 905,648,866.
           
          Pansolo Holding Inc. owns directly and indirectly 48,363,392 SVS and 48,697,962 PPS, entitling Pansolo Holding Inc. to an aggregate percentage of voting rights of 535,343,012 or 59.11% of the total voting rights attached to the shares of PCC.
II. OWNERSHIP BY POWER CORPORATION OF CANADA
Power Corporation of Canada has a voting interest in the following entities:
A. Great-West Life & Annuity Insurance Company Group of Companies (U.S. insurance)
   
Power Corporation of Canada
  100.0% - 171263 Canada Inc.
    65.515% - Power Financial Corporation
      67.788% - Great-West Lifeco Inc.
        100.0% - Great-West Financial (Canada) Inc.
          100.0% - Great-West Financial (Nova Scotia) Co.
            100.0% - Great-West Lifeco U.S. LLC
              100.0% - Great-West Services Singapore I Private Limited
                100.0% - Great-West Services Singapore II Private Limited
                  99.0% - Great West Global Business Services India Private Limited (1% owned by Great-West Services Singapore I Private Limited)
                1.0% - Great West Global Business Services India Private Limited (99% owned by Great-West Services Singapore II Private Limited)
              100.0% - GWL&A Financial Inc.
                60.0% - Great-West Life & Annuity Insurance Capital (Nova Scotia) Co. (40% owned by Great-West Life & Annuity Insurance Capital, LP)
                  40.0% - Great-West Life & Annuity Insurance Capital, LLC (60% owned by GWL&A Financial Inc.)
                60.0% - Great-West Life & Annuity Insurance Capital, LLC (40% owned by Great-West Life & Annuity Insurance Capital (Nova Scotia) Co.)
                100.0% - Great-West Life & Annuity Insurance Company (Fed ID # 84-0467907 - NAIC # 68322, CO)
C-13

 

                  100.0% - Great-West Life & Annuity Insurance Company of New York (Fed ID # 13-2690792 - NAIC # 79359, NY)
                  100.0% - Advised Assets Group, LLC
                  100.0% - GWFS Equities, Inc.
                  100.0% - Great-West Life & Annuity Insurance Company of South Carolina
                  100.0% - Emjay Corporation
                  100.0% - FASCore, LLC
                  100.0% - Great-West Capital Management, LLC
                  100.0% - Great-West Trust Company, LLC
                  100.0% - Lottery Receivable Company One LLC
                  100.0% - LR Company II, L.L.C.
                  100.0% - Singer Collateral Trust IV
                  100.0% - Great-West Financial Retirement Plan Services, LLC
                  100.0% - Empower Insurance Agency, LLC
B. Putnam Investments Group of Companies (Mutual Funds)
   
Power Corporation of Canada
  100.0% - 171263 Canada Inc.
    65.515% - Power Financial Corporation
      67.788% - Great-West Lifeco Inc.
        100.0% - Great-West Life & Annuity Insurance Capital, LLC II
        100.0% - Great-West Financial (Canada) Inc.
          100.0% - Great-West Financial (Nova Scotia) Co.
            100% - Great-West Lifeco U.S. LLC
              99.0% - Great-West Lifeco U.S. Holdings, L.P. (1% owned by Great-West Lifeco U.S. Holdings, LLC)
              100.0% - Great-West Lifeco U.S. Holdings, LLC
                1% - Great-West Lifeco U.S. Holdings, L.P. (99% owned by Great-West Lifeco U.S. LLC)
              100.0% - Putnam Investments, LLC
                100.0% - Putnam Acquisition Financing, Inc.
                  100.0% - Putnam Acquisition Financing LLC
                    100.0% - Putnam U.S. Holdings I, LLC
                    20.0% - PanAgora Asset Management, Inc (80% owned by PanAgora Holdings, Inc.)
                      100.0% - Putnam Investment Management, LLC
                      100.0% - Putnam Fiduciary Trust Company
                      100.0% - Putnam Investor Services, Inc.
                      100.0% - Putnam Retail Management GP, Inc.
                          1.0% - Putnam Retail Management Limited Partnership (99% owned by Putnam U.S. Holdings I, LLC)
                      99.0% - Putnam Retail Management Limited Partnership (1% owned by Putnam Retail Management GP, Inc.)
                      100.0% - PanAgora Holdings, Inc.
                        80.00% - PanAgora Asset Management, Inc. (20.0% owned by Putnam U.S. Holdings I, LLC)
                      100.0% - Putnam Investment Holdings, L.L.C.
                          100.0% - Savings Investments, LLC
                          100.0% - Putnam Capital, LLC
                      100.0% - The Putnam Advisory Holdings II, LLC
                        100.0% - Putnam Investments (Ireland) Limited
                        100.0% - Putnam Investments Australia Pty Limited
C-14

 

                        100.0% - Putnam Investments Securities Co., Ltd.
                        100.0% - Putnam International Distributors, Ltd.
                          100.0% - Putnam Investments Argentina S.A.
                        100.0% - Putnam Investments Limited
                        100.0% - The Putnam Advisory Company, LLC
                      100.0% - Putnam Advisory Holdings, LLC
                        100.0% - Putnam Investments Canada ULC
C. The Great-West Life Assurance Company Group of Companies (Canadian insurance)
   
Power Corporation of Canada
  100.0% - 171263 Canada Inc.
    65.515% - Power Financial Corporation
      67.788% - Great-West Lifeco Inc.
          100.0% - 2142540 Ontario Inc.
              1.0% - Great-West Lifeco Finance (Delaware) LP (99.0% owned by Great-West Lifeco Inc.)
              40.0% - Great-West Lifeco Finance (Delaware) LLC (60.0% owned by The Great-West Life Assurance Company)
              100.0% - Great-West Lifeco Finance 2017 I, LLC
          100.0% - 2023308 Ontario Inc.
              1.0% - Great-West Life & Annuity Insurance Capital, LP (99.0% owned by Great-West Lifeco Inc.)
                    40.0% - Great-West Life & Annuity Insurance Capital (Nova Scotia) Co. (60.0% owned by GWL&A Financial Inc.)
                          40.0% - Great-West Life & Annuity Insurance Capital, LLC (60.0% owned by GWL&A Financial Inc.)
                    40.0% - Great-West Life & Annuity Insurance Capital (Nova Scotia) Co. II (60.0% owned by GWL&A Financial Inc.)
                          40.0% - Great-West Life & Annuity Insurance Capital, LLC II (60.0% owned by GWL&A Financial Inc.)
          100.0% - 2171866 Ontario Inc
          100.0% - 2619747 Ontario Inc
            1.0% - Great-West Lifeco Finance 2018, LP (99.0% owned by Great-West Lifeco Inc.)
              100.0% - Great-West Lifeco Finance 2018, LLC
              100.0% - Great-West Lifeco Finance 2018 II, LLC
        99.0% - Great West Lifeco Finance 2018, LP (1.0% owned by 2619747 Ontario Inc.)
        100.0% - 6109756 Canada Inc.
        100.0% - 6922023 Canada Inc.
        100.0% - 8563993 Canada Inc.
        100.0% - 9855297 Canada Inc.
        100.0% - The Great-West Life Assurance Company (NAIC #80705, MI)
          29.4% - GWL THL Private Equity I Inc. (11.8% owned by The Canada Life Assurance Company, 58.8% owned by The Canada Life Insurance Company of Canada)
            100.0% - GWL THL Private Equity II Inc.
            23.0% - Great-West Investors Holdco Inc. (22% owned by The Canada Life Assurance Company, 55% owned by The Great-West Life Assurance Company)
            100.0% - Great-West Investors LLC
              100.0% - Great-West Investors LP Inc.
C-15

 

                99.0% - Great-West Investors LP (1.0% owned by Great-West Investors GP Inc.)
                  100.0% - T.H. Lee Interests
                100.0% - Great-West Investors GP Inc.
                  1.0% - Great-West Investors LP (99.0% owned by Great-West Investors LP Inc.)
                  100.0% - T.H. Lee Interests
        100.0% - GWL Realty Advisors Inc.
            100.0% - GWL Realty Advisors U.S., Inc.
              100.0% - EverWest Property Management, LLC
                100.0% - EverWest Property Services of Arizona, LLC
              100.0% EverWest Real Estate Investors, LLC
              100.0% EverWest Advisors, LLC
                100.0% EverWest Advisors AZ, LLC
                100.0% EW Manager LLC
            100.0% - RA Real Estate Inc.
              0.1% - RMA Real Estate LP (69.9% owned by The Great-West Life Assurance Company, 30.0% owned by London Life Insurance Company)
                100% - RMA Properties Ltd.
                100% - RMA Properties (Riverside) Ltd.
                100% - S-8025 Holdings Ltd.
        100.0% - Vertica Resident Services Inc.
        100.0% - 2278372 Ontario Inc.
    12.5% - 555 Robson Holding Ltd. (75% owned by London Life Insurance Company, 12.5% owned by The Canada Life Insurance Company of Canada)
    100.0% - GLC Asset Management Group Ltd.
    100.0% - 200 Graham Ltd.
    100.0% - 801611 Ontario Limited
    100.0% - 1213763 Ontario Inc.
        99.99% - Riverside II Limited Partnership (0.01% owned by 2024071 Ontario Limited)
    70.0% - Kings Cross Shopping Centre Ltd. (30% owned by London Life Insurance Company)
    100.0% - 681348 Alberta Ltd.
    50.0% - 3352200 Canada Inc.
    100.0% - 1420731 Ontario Limited
    60.0% - Great-West Lifeco Finance (Delaware) LLC (40.0% owned by Great-West Lifeco Finance (Delaware) LP)
    100.0% - 1455250 Ontario Limited
    100.0% - CGWLL Inc.
    100.0% - 2020917 Alberta Ltd.
    55.0% - Great-West Investor Holdco Inc. (23% owned by GWL THL Private Equity I Inc., 22% owned by The Canada Life Assurance Company)
    26.0% - 2148902 Alberta Ltd. (53% owned by London Life Insurance Company, 16% owned by The Canada Life Insurance Company of Canada and 5% owned by The Canada Life Assurance Company)
    20.0% - 2157113 Alberta Ltd. (40% owned by London Life Insurance Company, 30% owned by The Canada Life Insurance Company of Canada and 10% owned by The Canada Life Assurance Company)
    65.0% - The Walmer Road Limited Partnership (35.0% owned by London Life Insurance Company)
    50.0% - Laurier House Apartments Limited (50.0% owned by London Life Insurance Company)
    50.0% - Marine Promenade Properties Inc. (50.0% owned by London Life Insurance Company)
    100.0% - 2024071 Ontario Limited
        100.0% - 431687 Ontario Limited
          0.01% - Riverside II Limited Partnership (99.99% owned by 1213763 Ontario Inc.)
    100.0% - High Park Bayview Inc.
C-16

 

        0.001% - High Park Bayview Limited Partnership
    75.0% - High Park Bayview Limited Partnership (25.0% owned by London Life Insurance Company)
    5.6% - MAM Holdings Inc. (94.4% owned by The Canada Life Insurance Company of Canada)
        100% - Mountain Asset Management LLC
    70.0% - TGS North American Real Estate Investment Trust (30% owned by London Life Insurance Company)
        100.0% - TGS Trust
    70.0% - RMA Realty Holdings Corporation Ltd. (30.0% owned by London Life Insurance Company)
        100.0% - 1995709 Alberta Ltd.
        100.0% - RMA (U.S.) Realty LLC (Delaware) (special shares held by 1995709 Alberta Ltd.
          100.0% - RMA American Realty Corp.
            1% - RMA American Realty Limited Partnership ((99% owned by RMA (U.S.) Realty LLC (Delaware))
          99.0% - RMA American Realty Limited Partnership (1% owned by RMA American Realty Corp.)
        69.9% - RMA Real Estate LP (30.0% owned by London Life Insurance Company; 0.1% owned by RA Real Estate Inc.)
          100.0% - RMA Properties Ltd.
          100.0% - S-8025 Holdings Ltd.
          100.0% - RMA Properties (Riverside) Ltd.
    70.0% - KS Village (Millstream) Inc. (30.0% owned by London Life Insurance Company)
    70.0% - 0726861 B.C. Ltd. (30.0% owned by London Life Insurance Company)
    70.0% - Trop Beau Developments Limited (30.0% owned by London Life Insurance Company)
    70.0% - Kelowna Central Park Properties Ltd. (30.0% owned by London Life Insurance Company)
    70.0% - Kelowna Central Park Phase II Properties Ltd. (30.0% owned by London Life Insurance Company)
    12.5% - Vaudreuil Shopping Centres Limited (75.0% owned by London Life Insurance Company, 12.5% owned by The Canada Life Insurance Company of Canada)
    70.0% - Saskatoon West Shopping Centres Limited (30.0% owned by London Life Insurance Company)
    12.5% - 2331777 Ontario Ltd. (75.0% owned by London Life Insurance Company, 12.5% owned by The Canada Life Insurance Company of Canada)
    12.5% - 2344701 Ontario Ltd. (75.0% owned by London Life Insurance Company, 12.5% owned by The Canada Life Insurance Company of Canada)
    12.5% - 2356720 Ontario Ltd. (75.0% owned by London Life Insurance Company, 12.5% owned by The Canada Life Insurance Company of Canada)
    12.5% - 0977221 B.C. Ltd. (75.0% owned by London Life Insurance Company, 12.5% owned by The Canada Life Insurance Company of Canada)
    12.5% - 555 Robson Holding Ltd. ((75% owned by London Life Insurance Company, 12.5% owned by The Canada Life Insurance Company of Canada)
    100.0% - 7419521 Manitoba Ltd.
        0.04% - 7420928 Manitoba Limited Partnership (24.99% owned each by The Great-West Life Assurance Company, London Life Insurance Company, The Canada Life Assurance Company and The Canada Life Insurance Company of Canada)
          100.0% - 7419539 Manitoba Ltd.
    100.0% - London Insurance Group Inc.
      100.0% - Trivest Insurance Network Limited
      100.0% - London Life Insurance Company (Fed ID # 52-1548741 – NAIC # 83550, MI)
          100.0% - 1542775 Alberta Ltd.
          100.0% - 0813212 B.C. Ltd.
          30.0% - Kings Cross Shopping Centre Ltd. (70% owned by The Great-West Life Assurance Company)
          30.0% - 0726861 B.C. Ltd. (70% owned by The Great-West Life Assurance Company)
          30.0% - TGS North American Real Estate Investment Trust (70% owned by The Great-West Life Assurance Company)
              100.0% - TGS Trust
          30.0% - RMA Realty Holdings Corporation Ltd. (70% owned by The Great-West Life Assurance Company)
              100.0% - 1995709 Alberta Ltd.
              100.0% - RMA (U.S.) Realty LLC (Delaware) (special shares held by 1995709 Alberta Ltd.)
                100.0% - RMA American Realty Corp.
                  1.0% - RMA American Realty Limited Partnership ((99% owned by RMA (U.S.) Realty LLC (Delaware))
                99.0% - RMA American Realty Limited Partnership (1% owned by RMA American Realty Corp.)
C-17

 

          30.0% - RMA Real Estate LP (69.9% owned by The Great-West Life Assurance Company; 0.1% owned by RA Real Estate Inc.)
            100.0% - RMA Properties Ltd.
            100.0% - S-8025 Holdings Ltd.
            100.0% - RMA Properties (Riverside) Ltd.
          100.0% - 1319399 Ontario Inc.
          24.99% - 7420928 Manitoba Limited Partnership (24.99% limited partner interest each held by The Great-West Life Assurance Company, The Canada Life Assurance Company and The Canada Life Insurance Company of Canada; 7419521 Manitoba Ltd. holds 0.04% interest)
          50.0% - Laurier House Apartments Limited (50.0% owned by The Great-West Life Assurance Company)
          50.0% - Marine Promenade Properties Inc. (50.0% owned by The Great-West Life Assurance Company)
          30.0% - Kelowna Central Park Properties Ltd. (70.0% owned by The Great-West Life Assurance Company)
          30.0% - Kelowna Central Park Phase II Properties Ltd. (70.0% owned by The Great-West Life Assurance Company)
          30.0% - Trop Beau Developments Limited (70.0% owned by The Great-West Life Assurance Company)
          53.0% - 2148902 Alberta Ltd. (26% owned by the Great-West Life & Annuity Insurance Company, 16% owned by the Canada Life Insurance Company of Canada and 5% owned by the Canada Life Assurance Company)
          40.0% - 2157113 Alberta Ltd. (20% owned by the Great-West Life & Annuity Insurance Company, 30% owned by the Canada Life Insurance Company of Canada and 10% owned by the Canada Life Assurance Company)
          100.0% - 4298098 Canada Inc.
          100.0% - GWLC Holdings Inc.
            100% - GLC Reinsurance Corporation
          100.0% - 389288 B.C. Ltd.
          100.0% - Quadrus Investment Services Ltd.
          35.0% - The Walmer Road Limited Partnership (65.0% owned by The Great-West Life Assurance Company)
          88.0% - Neighborhood Dental Services Ltd.
          100.0% - Quadrus Distribution Services Ltd.
          100.0% - Toronto College Park Ltd.
          25.0% - High Park Bayview Limited Partnership (75.0% owned by The Great-West Life Assurance Company)
          30.0% - KS Village (Millstream) Inc. (70.0% owned by The Great-West Life Assurance Company)
          100.0% - London Life Financial Corporation
            73.57% - London Reinsurance Group, Inc. (26.43% owned by London Life Insurance Company)
              100.0% - London Life and Casualty Reinsurance Corporation
                100.0% - Trabaja Reinsurance Company Ltd.
                100.0% - London Life and Casualty (Barbados) Corporation
              100.0% - LRG (US), Inc.
                100.0% - London Life International Reinsurance Corporation
                100.0% - London Life Reinsurance Company (Fed ID # 23-2044256 – NAIC # 76694, PA)
          75.0% - Vaudreuil Shopping Centres Limited (12.5% owned by The Great-West Life Assurance Company, 12.5% owned by The Canada Life Insurance Company of Canada)
          26.43% - London Reinsurance Group Inc. (73.57% owned by London Life Financial Corporation)
          30.0% - Saskatoon West Shopping Centres Limited (70.0% owned by The Great-West Life Assurance Company)
          75.0% - 2331777 Ontario Ltd. (12.5% owned by The Great-West Life Assurance Company, 12.5% owned by The Canada Life Insurance Company of Canada)
          75.0% - 2344701 Ontario Ltd. (12.5% owned by The Great-West Life Assurance Company, 12.5% owned by The Canada Life Insurance Company of Canada)
          75.0% - 2356720 Ontario Ltd. (12.5% owned by The Great-West Life Assurance Company, 12.5% owned by The Canada Life Insurance Company of Canada)
          75.0% - 0977221 B.C. Ltd. (12.5% owned by The Great-West Life Assurance Company, 12.5% owned by The Canada Life Insurance Company of Canada)
          100.0% - Financial Horizons Group Inc.
            100.0% - Financial Horizons Incorporated
              100.0% - 9099-1696 Quebec Inc.
C-18

 

              100.0% - Continuum Financial Centres Inc.
              100.0% - Excel Private Wealth Inc.
              100.0% - Odyssey Financial Group Inc./Groupe Odyssee Inc.
              100.0% - Henderson GP ULC
                0.01% - Henderson Structured Settlements LP (99.9% held by Financial Horizons Incorporated)
              99.9% - Henderson Structures Settlements LP (0.01% held by Henderson GP ULC)
    100.0% - Canada Life Financial Corporation
            100.0% - The Canada Life Assurance Company (Fed ID # 38-0397420, NAIC # 80659, MI)
          24.99% - 7420928 Manitoba Limited Partnership (24.99% limited partner interest held by The Great-West Life Assurance Company, London Life Insurance Company and the Canada Life Insurance Company of Canada; 7419521 Manitoba Ltd. holds 0.04% interest)
          5.0% - 2148902 Alberta Ltd. (53% owned by London Life Insurance Company, 26% by The Great-West Life Assurance Company and 16% by The Canada Life Insurance Company of Canada)
          10.0% - 2157113 Alberta Ltd. (40% owned by London Life Insurance Company, 20% by The Great-West Life Assurance Company and 30% by The Canada Life Insurance Company of Canada)
          100.0% - Canada Life Capital Corporation, Inc.
            100.0% - Canada Life International Holdings Limited
              100.0% - Canada Life Annuity Reinsurance (Barbados) Corporation
              100.0% - Canada Life Group Holdings Limited
              100.0% - Canada Life International Services Limited
              100.0% - Canada Life International Limited
                100.0% - CLI Institutional Limited
              100.0% - Canada Life Reinsurance International Ltd.
              100.0% - Canada Life Reinsurance Ltd.
              100.0% - The Canada Life Group (U.K.) Limited
                80.0% - Canada Life International Assurance (Ireland) Designated Activity Company (20.0% owned by CL Abbey Limited)
                100.0% - Canada Life Irish Holding Company Limited
                  100.0% - Canada Life Group Services Limited
                  100.0% - Canada Life Europe Investment Limited
                    100.0% - Canada Life Europe Management Services Limited
                      21.33% - Canada Life Assurance Europe Limited (78.67% owned by Canada Life Europe Investment Limited)
                    78.67% - Canada Life Assurance Europe Limited (21.33% owned by Canada Life Europe Management Services Limited)
                100.0% - London Life and General Reinsurance dac
                  100.0% - Canada Life Dublin dac
                100.0% -CL Abbey Limited
                  20.0% - Canada Life International Assurance (Ireland) Designated Activity Company (80.0% owned by The Canada Life Group (U.K.) Limited)
                100.0% - Irish Life Investment Managers Limited
                  100.0% - Summit Asset Managers Limited
                    7.0% - Irish Association of Investment Managers CLG
                100.0% - Setanta Asset Management Limited
                100.0% - Canada Life Pension Managers & Trustees Limited
                100.0% - Canada Life Asset Management Limited
                100.0% - Canada Life European Real Estate Limited
                  100.0% - Hotel Operations (Walsall) Limited
                  100.0% - Hotel Operations (Cardiff) Limited
                100.0% - Canada Life Trustee Services (U.K.) Limited
C-19

 

                100.0% - CLFIS (U.K.) Limited
                100.0% - MGM Advantage Holdings Limited
                100.0% - Stonehaven UK Limited
                100.0% - MGM Advantage Services Limited
                100.0% - MGM Advantage Life Limited
                    100.0% - MGM Advantage Life Trustee Limited
                100.0% - Canada Life Limited
                  26.0% - ETC Hobley Drive Management Company Limited
                  100.0% - Synergy Sunrise (Wellington Row) Limited
                  76.0% - Radial Park Management Limited
                  100.0% - Canada Life (U.K.) Limited
                    100.0% - Albany Life Assurance Company Limited
                    100.0% - Canada Life Management (U.K.) Limited
                    100.0% - Canada Life Services (U.K.) Limited
                    100.0% - Canada Life Fund Managers (U.K.) Limited
                    100.0% - Canada Life Group Services (U.K.) Limited
                    100.0% - Canada Life Holdings (U.K.) Limited
                  100.0% - Canada Life Irish Operations Limited
                    100.0% - Canada Life Ireland Holdings Limited.
                  100.0% - Irish Life Group Limited
                    100.0% - Irish Life Health dac
                    100.0% - Irish Progressive Services International Ltd
                    100.0% - Irish Life Group Services Limited
                    100.0% - Irish Life Financial Services Ltd.
                    100.0% - Glohealth Financial Services Limited
                    49.0% - Affinity First Limited (51.0% interest unknown)
                    100.0% - Vestone Ltd.
                          100.0% - Cornmarket Group Financial Services Limited
                          100.0% - Cornmarket Insurance Services Limited
                            25.0% EIS Financial Services Limited (75.0% interest unknown)
                          100.0% - Cornmarket Retail Trading Ltd.
                          100.0% - Penpro Limited
                    100.0% - Irish Life Associate Holdings Unlimited Company
                        100.0% - Irish Life Irish Holdings Unlimited Company
                    75.0% - 1939 ILIV Consulting Limited
                        100.0% - Invesco Limited
                          100.0% - Invesco Trustee DAC
                          100.0% - ILP Pension Trustees DAC
                    100.0% - Irish Life Assurance plc.
                        100.0% - Ilona Financial Group, Inc.
                        100.0% - Irish Life Trustee Services Limited
                        100.0% - Office Park De Mont-St-Guibert A S.A.
                        100.0% - Office Park De Mont-St-Guibert B S.A.
                        100.0% - Office Park De Mont-St-Guibert C S.A.
                        100.0% - Stephen Court Limited
                        100.0% - Tredwell Associates Limited
                        100.0% - (2,3&4) Basement Company Limited
C-20

 

                        66.66% - City Gate Park Administration Limited
                        51.0% - SJRQ Riverside IV Management Company Ltd.
                        50.0% - Hollins Clough Management Company Ltd.
                        50.0% - Dakline Company Ltd.
                        20.0% - Choralli Limited
                        14.0% - Baggot Court Management Limited
                        5.5% - Padamul Ltd.
                        18.2143% - Tour Esplanade (Paris) LP
        100.0% - 4073649 Canada, Inc.
          100.0% - CL Luxembourg Capital Management S.á.r.l.
          100.0% - Canada Life France (U.K.) Limited
        100.0% - 8478163 Canada Limited
          100.0% - Canada Life Capital Bermuda Limited
        100.0% - 9983813 Canada Inc.
          100.0% - Canada Life Capital Bermuda III Limited
        100.0% - Canada Life Capital Bermuda II Limited
      22.0% - Great-West Investors Holdco Inc. (23% owned by GWL THL I Private Equity I Inc., 55% owned by The Great-West Life Assurance Company)
        100.0% - CL 22 Chapel GP Inc.
          0.001% - CL 22 Chapel LP (99.99% owned by The Canada Life Assurance Company)
        99.99% - CL 22 Chapel GP (0.001%owned by CL 22 Chapel GP Inc.)
      100.0% - The Canada Life Insurance Company of Canada
        24.99% - 7420928 Manitoba limited Partnership (24.99% limited partner interest held by The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company; 7419521 Manitoba Ltd. holds 0.04% interest)
        100.0% - 6855572 Manitoba Ltd.
        94.4% - MAM Holdings Inc. (5.6% owned by The Great-West Life Assurance Company)
          100.0% - Mountain Asset Management LLC
        12.5% - 2331777 Ontario Ltd. (75% owned by London Life Insurance Company, 12.5% owned by The Great-West Life Assurance Company)
        12.5% - 2344701 Ontario Ltd. (75% owned by London Life Insurance Company, 12.5% owned by The Great-West Life Assurance Company)
        12.5% - Vaudreuil Shopping Centres Limited (75% owned by London Life Insurance Company, 12.5% owned by The Great-West Life Assurance Company)
        12.5% - 2356720 Ontario Ltd. (75% owned by London Life Insurance Company, 12.5% owned by The Great-West Life Assurance Company)
        12.5% - 0977221 B.C. Ltd. (75% owned by London Life Insurance Company, 12.5% owned by The Great-West Life Assurance Company)
        12.5% - 555 Robson Holding Ltd. (75% owned by London Life Insurance Company, 12.5% owned by The Great-West Life Assurance Company)
        58.8% - GWL THL Private Equity I Inc. (11.8% The Canada Life Assurance Company, 29.4% The Great-West Life Assurance Company)
          100.0% - GWL THL Private Equity II Inc.
        16.0% - 2148902 Alberta Ltd. (53% owned by London Life Insurance Company, 26% by The Great-West Life Assurance Company and 5% by The Canada Life Assurance Company)
        30.0% - 2157113 Alberta Ltd (40% owned by London Life Insurance Company, 20% by The Great-West Life Assurance Company and 10% by The Canada Life Assurance Company)
          100.0% - Great-West Investors Holdco Inc.
            100.0% - Great-West Investors LLC
              100.0% - Great-West Investors LP Inc.
                99.0% - Great-West Investors LP (1.0% owned by Great-West Investors GP Inc.)
                  100.0% - T.H. Lee Interests
                100.0% - Great-West Investors GP Inc.
                  1.0% - Great-West Investors LP (99.0% Great-West Investors LP Inc.)
                      100.0% - T.H. Lee Interests
C-21

 

      100.0% - CL Capital Management (Canada), Inc.
      100.0% - 587443 Ontario Inc.
      100.0% - Canada Life Mortgage Services Ltd.
      11.8% - GWL THL Private Equity I Inc. (29.4% owned by The Great-West Life Assurance Company, 58.8% owned by The Canada Life Insurance Company of Canada)
        100.0% - GWL THL Private Equity II Inc.
        100.0% - Great-West Investors Holdco Inc.
            100.0% - Great-West Investors LLC
              100.0% - Great-West Investors LP Inc.
                99.0% - Great-West Investors LP (1.0% owned by Great-West Investors GP Inc.)
                  100% - T.H. Lee Interests
                100.0% - Great-West Investors GP Inc.
                  1.0% - Great-West Investors LP (99.0% Great-West Investors LP Inc.)
                    100.0% - T.H. Lee Interests
      100.0% - Canada Life Capital Trust
      100.0% - Great-West US RE Holdings, Inc.
        100.0% - CL Burlingame, LLC
          10.0% - PGEW Burlingame, LLC
            100.0% - EW PG – Airport Owner, LLC
D. IGM Financial Inc. Group of Companies (Canadian mutual funds)
   
Power Corporation of Canada
  100.0% - 171263 Canada Inc.
    65.515% - Power Financial Corporation
      61.412% - IGM Financial Inc. (direct and indirect 65.246%)
        100.0% - Investors Group Inc.
            100.0% - Investors Group Financial Services Inc.
            100.0% - I.G. International Management Limited
              100.0% - I.G. Investment Management (Hong Kong) Limited
            100.0% - Investors Group Trust Co. Ltd.
            100.0% - I.G. Insurance Services Inc.
            100.0% - Investors Syndicate Limited
            100.0% - Investors Group Securities Inc.
            100.0% - 6460675 Manitoba Ltd.
            100.0% - I.G. Investment Management, Ltd.
              100.0% - Investors Group Corporate Class Inc.
              100.0% - Investors Syndicate Property Corp.
              100.0% - 0992480 B.C. Ltd.
              100.0% - 1081605 B.C. Ltd.
              100.0% - I.G. Investment Corp.
              100.0% - 10206903 Canada Inc.
        100.0% - Mackenzie Inc.
          100.0% - Mackenzie Financial Corporation
            100.0% - Mackenzie Investments Charitable Foundation
            14.28% - Strategic Charitable Giving Foundation
            100.0% - Mackenzie Cundill Investment Management (Bermuda) Ltd.
C-22

 

            100.0% - Mackenzie Financial Capital Corporation
            100.0% - Multi-Class Investment Corp.
            100.0% - MMLP GP Inc.
            100.0% - Mackenzie Investments Corporation
            100.0% - Mackenzie U.S. Fund Management Inc.
            100.0% - MGELS Fund Management (Canada) Ltd.
            13.9% - China Asset Management Co., Ltd.
            100.0% - MGELS Fund Management (Cayman) Ltd.
            100.0% - MGELS Investments Limited
            100.0% - MEMLS Fund Management (Cayman) Ltd.
            100.0% - Mackenzie EM Funds Management (Cayman) Ltd.
        100.0% - Investment Planning Counsel Inc.
            100.0% - IPC Investment Corporation
            100.0% - IPC Estate Services Inc.
            100.0% - IPC Securities Corporation
                100.0% - Counsel Portfolio Services Inc.
                  100.0% - Counsel Portfolio Corporation
        18.5% - Portag3 Ventures LP
          26.79% - Springboard LP
        53.0% - Springboard LP
          83.2% - WealthSimple Financial Corp.
        29.3% - Springboard II LP
        19.8% - Personal Capital Corporation
        33.3% - Portag3 Ventures II Affiliates LP
          46.96% - Portag3 ventures II LP
E. Pargesa Holding SA Group of Companies (European investments)
   
Power Corporation of Canada
  100.0% - 171263 Canada Inc.
    65.515% - Power Financial Corporation
      100.0% - Power Financial Europe B.V.
        50.0% - Parjointco N.V.
          75.4% - Pargesa Holding SA (55.5% capital)
            100.0% - Pargesa Netherlands B.V.
              100.0% - SFPG
              50.83% (taking into account the treasury shares - Groupe Bruxelles Lambert (50.0% in capital)
                Capital
                11.8% - Pernod Ricard (7.5% in capital)
                17.6% - Umicore
                19.8% - Ontex
                0.4% - LTI One SA
                96.5% - FINPAR II SA
                    0.1% - Groupe Bruxelles Lambert
                    0.1% - Ontex
                90.2% - FINPAR III SA
                    0.1% - Groupe Bruxelles Lamber
C-23

 

                    0.1% - GEA
                1.2% - Sagerpar SA
                100.0% - Belgian Securities BV
                    Capital
                      67.5% - Imerys (53.8% in capital)
                  100.0% - Brussels Securities SA
                    Capital
                        99.6% - LTI One SA
                          0.1% - Groupe Bruxelles Lambert
                        100.0% - LTI Two SA
                          0.1% - Groupe Bruxelles Lambert
                          0.1% - Umicore
                        100.0% - URDAC SA
                          0.1% - Groupe Bruxelles Lambert
                        100.0% - FINPAR SA
                          0.1% - Groupe Bruxelles Lambert
                        98.8% - Sagerpar SA
                          1.0% - Groupe Bruxelles Lambert
                        10.0% - GBL Participations SA
                        10.0% - Brussels Advisors SA
                  100.0% - GBL O
                  90.0% - GBL Participations SA
                  90.0% - Brussels Advisors SA
                  100.0% - GBL Advisors Limited
                    5.4% - FINPAR III SA
                  100.0% - GBL Development Limited
                  100.0% - GBL Verwaltung SA.
                    Capital
                        100.0% - GBL Investments Limited
                        100.0% - GBL R S.á.r.l.
                        100.0% - GBL Energy S.á.r.l.
                          Capital
                          1.24% - Total (0.6% in capital)
                        100.0% - Serena S.á.r.l.
                          Capital
                          16.6% - SGS
                          100.0% - Eliott Capital S.á.r.l.
                          Capital
                          9.4% - LafargeHolcim
                        100.0% - Sienna Capital S.á.r.l
                          Capital
                          10.8% - Sagard FCPR
                          0.3% - Sagard II A FPCI
                          75.0% - Sagard II B FPCI
                          26.9% - Sagard 3 Millésime 1 FPCI
                          29.6% - Kartesia Credit Opportunities III SCA, SICAV-SIF
                          17.2% - Kartesia Credit Opportunities IV SCS
C-24

 

                          22.2% - Kartesia Management SA
                          50.0% - Ergon Capital Partners SA
                          42.4% - Ergon Capital Partners II SA
                          89.9% - Ergon Capital Partners III SA
                          15.1% - Mérieux Participations SAS
                          37.7% - Mérieux Participations 2 SAS
                          78.4% - PrimeStone Capital Fund ICAV
                          1.7% - PrimeStone Capital Special Limited Partner SCSp
                          9.8% - BDT Capital Partners Fund II (INT),L.P.
                          48.6% - Backed 1 LP
                          9.6% - Backed 1 Founder LP
                          100.0% - Sienna Capital International Ltd.
                          34.9% - KKR Sigma Co-Invest II L.P.
                        100.0% - GBL Finance S.á.r.l
                        100.0% - Miles Capital S.á.r.l
                          Capital
                          21.2% - Parques Reunidos
                        100.0% - Oliver Capital S.á.r.l
                          Capital
                          8.4% - GEA
                        100.0% - Theo Capital S.á.r.l
                          Capital
                          7.8% - adidas
                        100.0% - Owen Capital S.á.r.l
                        3.5% - FINPAR II SA
                        4.4% - FINPAR III SA
F. Power Corporation (International) Limited Group of Companies (Asian investments)
   
Power Corporation of Canada
  100.0% - Power Corporation (International) Limited
    99.9% - Power Pacific Corporation Limited
      0.1% - Power Pacific Equities Limited
    99.9% - Power Pacific Equities Limited
  100.0% - Power Communications Inc.
    0.1% - Power Pacific Corporation Limited
  13.9% - China Asset Management Limited
  100.0% - Power Pacific Investment Management Inc.
    100.0% - Sagard China Absolute Return A Share Fund (Canada) GP Inc.
      100.0% - GP interest in Sagard China Absolute Return A Share Fund (Canada) LP
    100.0% - Power Pacific Investment Management (Ireland) Limited
G. Other PCC Companies
   
Power Corporation of Canada
  100.0% - 152245 Canada Inc.
    100.0% - 3540529 Canada Inc.
C-25

 

  100.0% - Square Victoria Real Estate Inc./ Square Victoria Immobilier Inc.
    100.0% - SVRE Management Inc.
    70.0% - 7 Saint-Jacques GP Inc.
      0.01% 7 Saint-Jacques Limited Partnership
    49.99% - 7 Saint-Jacques Limited Partnership
  100.0% - 3121011 Canada Inc.
  100.0% - 171263 Canada Inc.
  100.0% - Victoria Square Ventures Inc.
      14.88% - Bellus Health Inc.
      25.0% (voting) - 9314-0093 Québec Inc. (formerly Club de Hockey Les Remparts de Québec Inc.)
      100.0% - Power Energy Corporation
          100.0% - Potentia Renewables Inc.
            64.0% - Potentia MN Solar Fund I, LLC
            75.0% - Paintearth Wind Project LP
            75.0% - Stirling Wind Project LP
            75.0% - Wheatland Wind Project LP
            100.0% - Emerald Solar Energy, SRL
            100.0% - Jenner Wind Limited Partnership
            100.0% - Power Renewable Energy Corporation
              100.0% - Sequoia Energy Inc.
              100.0% - Sequoia Energy US Inc.
            100.0% - Potentia Solar Holdings II Limited Partnership
              100.0% - Potentia Solar Holdings Limited Partnership
              100.0% - Schooltop Solar LP
              85.0% - Reliant First Nations LP
              100.0% - PSI Solar Finance 1 LP
              100.0% MOM Solar LP
              100.0% - Potentia Solar 5 LP
              100.0% - Potentia Solar 6 LP
              100.0% - Potentia Solar 7 LP
              100.0% - Potentia Solar 9 LP
              100.0% - Potentia Solar 14 LP
          100.0% - Power Energy Eagle Creek Inc.
            60.0% - Power Energy Eagle Creek LLP
              54.8% - Eagle Creek Renewable Energy, LLC
          60.51% - Lumenpulse Group Inc.
            100.0% - Lumenpulse Finance Corp.
            100.0% - Lumenpulse Lighting Corp.
              80.0% - Sternberg Lanterns, Inc.
            100.0% - Fluxwerx Illumination Inc.
            100.0% - Exenia s.r.l.
            100.0% - Lumenpulse UK Limited
              100.0% - Lumenpulse Alphaled Limited
          43.8% - The Lion Electric Company
  100.0% - Power Communications Inc.
      100.0% - Brazeau River Resources Investments Inc.
  100.0% - PCC Industrial (1993) Corporation
C-26

 

  100.0% - Power Corporation International
  100.0% - 9808655 Canada Inc.
    100.0% - 9958363 Canada Inc.
    100.0% - Sagard Holdings Participation US LP
        25.0% - Sagard Holdings ULC
  100.0% - Sagard Holdings Participation Inc.
    100.0% - Sagard Credit Partners GP, Inc.
      100.0% - Sagard Credit Partners, LP
    100.0% - Sagard Holdings Manager GP Inc.
      100.0% - Sagard Holdings Manager LP
    100.0% - Sagard Credit Partners (Cayman) GP, Inc.
      100.0% - Sagard Credit Partners (Cayman), LP
    100.0% - Portag3 ventures II GP Inc.
      100.0% - Portage3 Ventures II LP
    75.0% - Sagard Holdings ULC
      4.0% - 1069759 B.C. Unlimited Liability Company
      17.96% - Sagard Credit Partners, LP
      100.0% - Sagard Credit Partners Carried Interest GP Inc.
          100.0% - Sagard Credit Partners Carried Interest LP
      100.0% - Sagard Capital Partners GP, Inc.
          100.0% - Sagard Capital Partners, L.P.
            22.0% - GP Strategies Corp.
            11.9% - Jaguar Health Inc.
            96.0% - 1069759 B.C. Unlimited Liability Company
              91.6 % - Integrated Fertility Holding, LLC.
      50.0% - Peak Achievement Athletics Inc. (42.58% equity)
          100.0% - 10094439 Canada Inc.
          100.0% - 10094455 Canada Inc.
            100.0% - Limited Partnership Interests in Peak Management Participation LP
            100.0% - 1167410 B.C. Unlimited Liability Company
              100.0% - General Partnership Interests in Peak Management Participation LP
                100.0% - Limited Partnership Interests in Peak Holdings LP
                100.0% - 1167387 B.C. Unlimited Liability Company
                100.0% - General Partnership Interests in Peak Holdings LP
                100.0% - Bauer Hockey Ltd.
                100.0% - Bauer Innovations Canada Ltd.
                100.0% - Bauer Hockey AB
                100.0% - Bauer Hockey GmbH
                100.0% - Performance Sports Group Hong Kong Ltd.
                100.0% - Jacmal BV
                100.0% - Bauer CR spol s.r.o.
                100.0% - BCE Acquisitions US, Inc.
                100.0% - Bauer Innovations US, LLC
                100.0% - Easton Diamond Sports, LLC
                100.0% - Bauer Hockey LLC
                100.0% - Cascade Maverik Lacrosse, LLC
                100.0% - Bauer Hockey Retail, LLC
C-27

 

  100.0% - Power Corporation of Canada Inc.
    100.0% - 4190297 Canada Inc.
    100.0% - Sagard Capital Partners Management Corp.
  100.0% - Sagard S.A.S.
  100.0% - Marquette Communications (1997) Corporation
  100.0% - 4507037 Canada Inc.
  100.0% - 4524781 Canada Inc.
  100.0% - 4524799 Canada Inc.
  100.0% - 4524802 Canada Inc.
  100.0% - Squart Victoria Communications Group Inc.
    100.0% - Gesca Ltee
      100.0% Gestion Gesca Inc.
        100.0% - 10206911 Canada Inc.
        100.0% - Gesca Numerigue Inc.
          100.0% - 10206938 Canada Inc.
        100.0% - 9214470 Canada Inc.
      100.0% - 10322105 Canada Inc.
    100.0% - Square Victoria Digital Properties Inc.
      100.0% Les Editions Plus Ltee
      100.0% - 10206920 Canada Inc.
      50.0% - 1004096 Canada Inc. (“workopolis”)
  100.0% - 10322091 Canada Inc.
H. Other PFC Companies
   
Power Financial Corporation
  100.0% - 4400003 Canada Inc.
  100.0% - 3411893 Canada Inc.
  100.0% - 3439453 Canada Inc.
  100.0% - Power Financial Capital Corporation
  100.0% - 7973594 Canada Inc.
  100.0% - 7973683 Canada Inc.
  100.0% - 7974019 Canada Inc.
  19.65% - Springboard L.P.
    83.2% - WealthSimple Financial Corp. (81.7% equity)
      100.0% - Wealthsimple Inc.
      100.0% - Canadian ShareOwner Investments Inc.
      100.0% - CSA Computing Inc.
      100.0% - Wealthsimple US, Inc.
      100.0% - Wealthsimple Technologies, Inc.
      100.0% - ShareOwner Mutual Fund Dealer Inc.
      99.96% - Wealthsimple Europe S.a.r.l
        100.0% - Wealthsimple UK Ltd.
        100.0% - Wealthsimple Germany GmbH
        100.0% - Wealthsimple Technologies Europe Ltd.
  29.3% - Springboard II LP
    63.4% - Koho Financial Inc.
C-28

 

  100.0% - PFC Ventures Inc.
    100.0% - Portag3 Ventures GP Inc.
      100.0% - 9194649 Canada Inc.
      100.0% - Portag3 Ventures Participation ULC
    62.9% - Portag3 Ventures L.P.
      100.0% - Portag3 International Investments Inc.
      26.79% - Springboard L.P.
      20.0% - 11066498 Canada Inc.
      20.0% - 11066510 Canada Inc.
      9.41% - Collage Inc.
      4.44% - dfuse Platform Inc. (EOS Canada Inc.)
      4.41% - Nesto Inc.
      4.22% - Breathe Life Inc.
      2.59% - Dialogue Technologies Inc.
      12.02% - Springboard II LP
      53.46% - Springboard III, LP
        68.06% - Diagram Ventures, LP
        80.0% - 11066498 Canada Inc.
        80.0% - 11066510 Canada Inc.
        40.78% - Collage Inc.
        22.97% - Nesto Inc.
        24.40% - Dialogue Technologies Inc.
        26.66% - dfuse Platform Inc. (EOS Canada Inc.)
        21.60% - Breathe Life Inc.
    33.33% - Portag3 Ventures II Affiliates L.P.
      46.96% - Portag3 ventures II L.P.
        100.00% - Portag3 Ventures II International Investments Inc.
        46.54% - Springboard III, LP.
        6.57% - Dialogue Technologies Inc.
  50.0% - Diagram Ventures GP Inc. (9629262 Canada Inc.)
C-29

 

Item 29. Indemnification
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.
Provisions exist under the Colorado Business Corporation Act and the Bylaws of Great-West whereby Great-West may indemnify a director, officer or controlling person of Great-West against liabilities arising under the Securities Act of 1933. The following excerpts contain the substance of these provisions:
Colorado Business Corporation Act
Article 109 – INDEMNIFICATION
Section 7-109-101. Definitions.
As used in this article:
(1) “Corporation” includes any domestic or foreign entity that is a predecessor of a corporation by reason of a merger or other transaction in which the predecessor’s existence ceased upon consummation of the transaction.
(2) “Director” means an individual who is or was a director of a corporation or an individual who, while a director of a corporation, is or was serving at the corporation’s request as a director, an officer, an agent, an associate, an employee, a fiduciary, a manager, a member, a partner, a promoter, or a trustee of, or to hold any similar position with, another domestic or foreign entity or of an employee benefit plan. A director is considered to be serving an employee benefit plan at the corporation’s request if the director’s duties to the corporation also impose duties on, or otherwise involve services by, the director to the plan or to participants in or beneficiaries of the plan. “Director” includes, unless the context requires otherwise, the estate or personal representative of a deceased director.
(3) “Expenses” includes counsel fees.
(4) “Liability” means the obligation incurred with respect to a proceeding to pay a judgment, settlement, penalty, fine, including an excise tax assessed with respect to an employee benefit plan, or reasonable expenses.
(5) “Official capacity” means, when used with respect to a director, the office of director in a corporation and, when used with respect to a person other than a director as contemplated in section 7-109-107, the office in a corporation held by the officer or the employment, fiduciary, or agency relationship undertaken by the employee, fiduciary, or agent on behalf of the corporation. “Official capacity” does not include service for any other domestic or foreign corporation or other person or employee benefit plan.
(6) “Party” includes a person who was, is, or is threatened to be made a named defendant or respondent in a proceeding.
(7) “Proceeding” means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal.
Section 7-109-102. Authority to indemnify directors.
(1) Except as provided in subsection (4) of this section, a corporation may indemnify a person made a party to a proceeding because the person is or was a director against liability incurred in the proceeding if:
  (a) The person’s conduct was in good faith; and
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  (b) The person reasonably believed:
    (I) In the case of conduct in an official capacity with the corporation, that such conduct was in the corporation’s best interests; and
    (II) In all other cases, that such conduct was at least not opposed to the corporation’s best interests; and
  (c) In the case of any criminal proceeding, the person had no reasonable cause to believe the person’s conduct was unlawful.
(2) A director’s conduct with respect to an employee benefit plan for a purpose the director reasonably believed to be in the interests of the participants in or beneficiaries of the plan is conduct that satisfies the requirement of subparagraph (II) of paragraph (b) of subsection (1) of this section. A director’s conduct with respect to an employee benefit plan for a purpose that the director did not reasonably believe to be in the interests of the participants in or beneficiaries of the plan shall be deemed not to satisfy the requirements of paragraph (a) of subsection (1) of this section.
(3) The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the standard of conduct described in this section.
(4) A corporation may not indemnify a director under this section:
  (a) In connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation; or
  (b) In connection with any other proceeding charging that the director derived an improper personal benefit, whether or not involving action in an official capacity, in which proceeding the director was adjudged liable on the basis that the director derived an improper personal benefit.
(5) Indemnification permitted under this section in connection with a proceeding by or in the right of the corporation is limited to reasonable expenses incurred in connection with the proceeding.
Section 7-109-103. Mandatory Indemnification of Directors.
Unless limited by its articles of incorporation, a corporation shall indemnify a person who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the person was a party because the person is or was a director, against reasonable expenses incurred by the person in connection with the proceeding.
Section 7-109-104. Advance of Expenses to Directors.
(1) A corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if:
  (a) The director furnishes to the corporation a written affirmation of the director’s good-faith belief that the director has met the standard of conduct described in section 7-109-102;
  (b) The director furnishes to the corporation a written undertaking, executed personally or on the director’s behalf, to repay the advance if it is ultimately determined that the director did not meet the standard of conduct; and
  (c) A determination is made that the facts then known to those making the determination would not preclude indemnification under this article.
(2) The undertaking required by paragraph (b) of subsection (1) of this section shall be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment.
(3) Determinations and authorizations of payments under this section shall be made in the manner specified in section 7-109-106.
C-31

 

Section 7-109-105. Court-Ordered Indemnification of Directors.
(1) Unless otherwise provided in the articles of incorporation, a director who is or was a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the court, after giving any notice the court considers necessary, may order indemnification in the following manner:
  (a) If it determines that the director is entitled to mandatory indemnification under section 7-109-103, the court shall order indemnification, in which case the court shall also order the corporation to pay the director’s reasonable expenses incurred to obtain court-ordered indemnification.
  (b) If it determines that the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director met the standard of conduct set forth in section 7-109-102(1) or was adjudged liable in the circumstances described in section 7-109-102(4), the court may order such indemnification as the court deems proper; except that the indemnification with respect to any proceeding in which liability shall have been adjudged in the circumstances described in section 7-109-102(4) is limited to reasonable expenses incurred in connection with the proceeding and reasonable expenses incurred to obtain court-ordered indemnification.
Section 7-109-106. Determination and Authorization of Indemnification of Directors.
(1) A corporation may not indemnify a director under section 7-109-102 unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because the director has met the standard of conduct set forth in section 7-109-102. A corporation shall not advance expenses to a director under section 7-109-104 unless authorized in the specific case after the written affirmation and undertaking required by section 7-109-104(1)(a) and (1)(b) are received and the determination required by section 7-109-104(1)(c) has been made.
(2) The determinations required by subsection (1) of this section shall be made:
  (a) By the board of directors by a majority vote of those present at a meeting at which a quorum is present, and only those directors not parties to the proceeding shall be counted in satisfying the quorum; or
  (b) If a quorum cannot be obtained, by a majority vote of a committee of the board of directors designated by the board of directors, which committee shall consist of two or more directors not parties to the proceeding; except that directors who are parties to the proceeding may participate in the designation of directors for the committee.
(3) If a quorum cannot be obtained as contemplated in paragraph (a) of subsection (2) of this section, and a committee cannot be established under paragraph (b) of subsection (2) of this section, or, even if a quorum is obtained or a committee is designated, if a majority of the directors constituting such quorum or such committee so directs, the determination required to be made by subsection (1) of this section shall be made:
  (a) By independent legal counsel selected by a vote of the board of directors or the committee in the manner specified in paragraph (a) or (b) of subsection (2) of this section or, if a quorum of the full board cannot be obtained and a committee cannot be established, by independent legal counsel selected by a majority vote of the full board of directors; or
  (b) By the shareholders.
(4) Authorization of indemnification and advance of expenses shall be made in the same manner as the determination that indemnification or advance of expenses is permissible; except that, if the determination that indemnification or advance of expenses is permissible is made by independent legal counsel, authorization of indemnification and advance of expenses shall be made by the body that selected such counsel.
Section 7-109-107. Indemnification of Officers, Employees, Fiduciaries, and Agents.
(1) Unless otherwise provided in the articles of incorporation:
C-32

 

  (a) An officer is entitled to mandatory indemnification under section 7-109-103, and is entitled to apply for court-ordered indemnification under section 7-109-105, in each case to the same extent as a director;
  (b) A corporation may indemnify and advance expenses to an officer, employee, fiduciary, or agent of the corporation to the same extent as to a director; and
  (c) A corporation may also indemnify and advance expenses to an officer, employee, fiduciary, or agent who is not a director to a greater extent, if not inconsistent with public policy, and if provided for by its bylaws, general or specific action of its board of directors or shareholders, or contract.
Section 7-109-108. Insurance.
A corporation may purchase and maintain insurance on behalf of a person who is or was a director, officer, employee, fiduciary, or agent of the corporation, or who, while a director, officer, employee, fiduciary, or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, fiduciary, or agent of another domestic or foreign entity or of an employee benefit plan, against liability asserted against or incurred by the person in that capacity or arising from the person’s status as a director, officer, employee, fiduciary, or agent, whether or not the corporation would have power to indemnify the person against the same liability under section 7-109-102, 7-109-103, or 7-109-107. Any such insurance may be procured from any insurance company designated by the board of directors, whether such insurance company is formed under the law of this state or any other jurisdiction of the United States or elsewhere, including any insurance company in which the corporation has an equity or any other interest through stock ownership or otherwise.
Section 7-109-109. Limitation of Indemnification of Directors.
(1) A provision treating a corporation’s indemnification of, or advance of expenses to, directors that is contained in its articles of incorporation or bylaws, in a resolution of its shareholders or board of directors, or in a contract, except an insurance policy, or otherwise, is valid only to the extent the provision is not inconsistent with sections 7-109-101 to 7-109-108. If the articles of incorporation limit indemnification or advance of expenses, indemnification and advance of expenses are valid only to the extent not inconsistent with the articles of incorporation.
(2) Sections 7-109-101 to 7-109-108 do not limit a corporation’s power to pay or reimburse expenses incurred by a director in connection with an appearance as a witness in a proceeding at a time when the director has not been made a named defendant or respondent in the proceeding.
Section 7-109-110. Notice to Shareholders of Indemnification of Director.
If a corporation indemnifies or advances expenses to a director under this article in connection with a proceeding by or in the right of the corporation, the corporation shall give written notice of the indemnification or advance to the shareholders with or before the notice of the next shareholders’ meeting. If the next shareholder action is taken without a meeting at the instigation of the board of directors, such notice shall be given to the shareholders at or before the time the first shareholder signs a writing consenting to such action.
Bylaws of Great-West
Article IV. Indemnification
SECTION 1. In this Article, the following terms shall have the following meanings:
  (a) “expenses” means reasonable expenses incurred in a proceeding, including expenses of investigation and preparation, expenses in connection with an appearance as a witness, and fees and disbursement of counsel, accountants or other experts;
  (b) “liability” means an obligation incurred with respect to a proceeding to pay a judgment, settlement, penalty or fine;
  (c) “party” includes a person who was, is, or is threatened to be made a named defendant or respondent in a proceeding;
C-33

 

  (d) “proceeding” means any threatened, pending or completed action, suit, or proceeding whether civil, criminal, administrative or investigative, and whether formal or informal.
SECTION 2. Subject to applicable law, if any person who is or was a director, officer or employee of the corporation is made a party to a proceeding because the person is or was a director, officer or employee of the corporation, the corporation shall indemnify the person, or the estate or personal representative of the person, from and against all liability and expenses incurred by the person in the proceeding (and advance to the person expenses incurred in the proceeding) if, with respect to the matter(s) giving rise to the proceeding:
  (a) the person conducted himself or herself in good faith; and
  (b) the person reasonably believed that his or her conduct was in the corporation’s best interests; and
  (c) in the case of any criminal proceeding, the person had no reasonable cause to believe that his or her conduct was unlawful; and
  (d) if the person is or was an employee of the corporation, the person acted in the ordinary course of the person’s employment with the corporation.
SECTION 3. Subject to applicable law, if any person who is or was serving as a director, officer, trustee or employee of another company or entity at the request of the corporation is made a party to a proceeding because the person is or was serving as a director, officer, trustee or employee of the other company or entity, the corporation shall indemnify the person, or the estate or personal representative of the person, from and against all liability and expenses incurred by the person in the proceeding (and advance to the person expenses incurred in the proceeding) if:
  (a) the person is or was appointed to serve at the request of the corporation as a director, officer, trustee or employee of the other company or entity in accordance with Indemnification Procedures approved by the Board of Directors of the corporation; and
  (b) with respect to the matter(s) giving rise to the proceeding:
    (i) the person conducted himself or herself in good faith; and
    (ii) the person reasonably believed that his or her conduct was at least not opposed to the corporation’s best interests (in the case of a trustee of one of the corporation’s staff benefits plans, this means that the person’s conduct was for a purpose the person reasonably believed to be in the interests of the plan participants); and
    (iii) in the case of any criminal proceeding, the person had no reasonable cause to believe that his or her conduct was unlawful; and
    (iv) if the person is or was an employee of the other company or entity, the person acted in the ordinary course of the person’s employment with the other company or entity.
Item 30. Principal Underwriter
  (a) GWFS Equities, Inc. (“GWFS”) is the distributor of securities of the Registrant. Including the Registrant, GWFS serves as distributor or principal underwriter for Great-West Funds, Inc., an open-end management investment company, Variable Annuity-1 Series Account of Great-West Life & Annuity Insurance Company (“GWL&A”), Variable Annuity-1 Series Account of Great-West Life & Annuity Insurance Company of New York (“GWL&A NY”), Variable Annuity-2 Series Account of GWL&A, Variable Annuity-2 Series Account of GWL&A NY, Variable Annuity-8 Series Account of GWL&A, Variable Annuity-8 Series Account of GWL&ANY, COLI VUL-2 Series Account of GWL&A, COLI VUL-2 Series Account of GWL&A NY, COLI VUL-4 Series Account of GWL&A, FutureFunds Series Account of GWL&A, Maxim Series Account of GWL&A, Prestige Variable Life Account of GWL&A, and Trillium Variable Annuity Account of GWL&A.
  (b) Directors and Officers of GWFS:
    
Name Principal Business Address Positions and Offices with Underwriter
C.E. Waddell 8515 East Orchard Road
Greenwood Village, CO 80111 		Chair, President, and Chief Executive Officer
C-34

 

Name Principal Business Address Positions and Offices with Underwriter
S.E. Jenks 8515 East Orchard Road
Greenwood Village, CO 80111 		Director and Executive Vice President
R.H. Linton, Jr. 8515 East Orchard Road
Greenwood Village, CO 80111 		Director and Executive Vice President
R.K. Shaw 8515 East Orchard Road
Greenwood Village, CO 80111 		Executive Vice President
R.J. Laeyendecker 8515 East Orchard Road
Greenwood Village, CO 80111 		Senior Vice President
W.J. McDermott 8515 East Orchard Road
Greenwood Village, CO 80111 		Senior Vice President
D.A. Morrison 8515 East Orchard Road
Greenwood Village, CO 80111 		Senior Vice President
J.M. Smolen 8515 East Orchard Road
Greenwood Village, CO 80111 		Senior Vice President
S.M. Gile 8515 East Orchard Road
Greenwood Village, CO 80111 		Vice President
R.L. Logsdon 8515 East Orchard Road
Greenwood Village, CO 80111 		Vice President, Counsel, and Secretary
R.M. Mattie 8515 East Orchard Road
Greenwood Village, CO 80111 		FIN OP Principal, Principal Financial Officer, Principal Operations Officer, Vice President and Treasurer
K.I. Schindler 8515 East Orchard Road
Greenwood Village, CO 80111 		Chief Compliance Officer
M.J. Kavanagh 8515 East Orchard Road
Greenwood Village, CO 80111 		Associate Chief Compliance Officer
T.L. Luiz 8515 East Orchard Road
Greenwood Village, CO 80111 		Compliance Officer
B.R. Hudson 8515 East Orchard Road
Greenwood Village, CO 80111 		Senior Counsel and Assistant Secretary
    
  (c) Commissions and other compensation received by Principal Underwriter, directly or indirectly, from the Registrant during Registrant’s last fiscal year:
    
Name of Principal
Underwriter 		Net Underwriting
Discounts and
Commissions 		Compensation
on Redemption 		Brokerage
Commissions 		Compensation
GWFS -0- -0- -0- -0-
Item 31. Location of Accounts and Records
All accounts, books, or other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the rules promulgated thereunder are maintained by the Registrant through the Depositor, 8515 East Orchard Road, Greenwood Village, Colorado 80111.
Item 32. Management Services
Not Applicable.
Item 33. Fee Representation.
The Depositor represents that the fees and charges deducted under the Policy, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the Depositor.
C-35

 

SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this registration statement under rule 485(b) under the Securities Act and has duly caused this registration statement to be signed on its behalf by the undersigned, duly authorized, in the City of Greenwood Village, and State of Colorado, on this 22nd day of April, 2019.
COLI VUL-2 SERIES ACCOUNT
(Registrant)
By: /s/ Edmund F. Murphy III
  Edmund F. Murphy III
President and Chief Executive Officer of Great-West Life & Annuity Insurance Company
    
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
(Depositor)
By: /s/ Edmund F. Murphy III
  Edmund F. Murphy III
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.
Signature   Title   Date
/s/ R. Jeffrey Orr   Chairman of the Board   April 22, 2019
R. Jeffrey Orr*  
/s/ Edmund F. Murphy III   President and Chief Executive Officer   April 22, 2019
Edmund F. Murphy III  
/s/ Andra S. Bolotin   Executive Vice President & Chief Financial Officer   April 22, 2019
Andra S. Bolotin  
/s/ John L. Bernbach   Director   April 22, 2019
John L. Bernbach*  
/s/ Robin Bienfait   Director   April 22, 2019
Robin Bienfait*        
/s/ Marcel R. Coutu   Director   April 22, 2019
Marcel R. Coutu*        
/s/ André R. Desmarais   Director   April 22, 2019
André R. Desmarais*        
/s/ Paul G. Desmarais, Jr.   Director   April 22, 2019
Paul G. Desmarais, Jr.*        
/s/ Gary A. Doer   Director   April 22, 2019
Gary A. Doer*        
/s/ Gregory J. Fleming   Director   April 22, 2019
Gregory J. Fleming*        
/s/ Claude Généreux   Director   April 22, 2019
Claude Généreux*        

 

Signature   Title   Date
/s/ Alain Louvel   Director   April 22, 2019
Alain Louvel*        
/s/ Paula B. Madoff   Director   April 22, 2019
Paula B. Madoff*        
/s/ Paul A. Mahon   Director   April 22, 2019
Paul A. Mahon*        
    Director    
Donald Raymond        
    Director    
Robert L. Reynolds        
/s/ T. Timothy Ryan, Jr.   Director   April 22, 2019
T. Timothy Ryan, Jr.*        
/s/ Jerome J. Selitto   Director   April 22, 2019
Jerome J. Selitto*        
/s/ Gregory D. Tretiak   Director   April 22, 2019
Gregory D. Tretiak*        
/s/ Brian E. Walsh   Director   April 22, 2019
Brian E. Walsh*        
         
*By: /s/ Ryan L. Logsdon   *Attorney-in-fact pursuant to Power of Attorney   April 22, 2019
  Ryan L. Logsdon
  
EX-99.(H)(1) 2 d694125dex99h1.htm EX-99.(H)(1) EX-99.(H)(1)

PARTICIPATION AGREEMENT

BY AND AMONG

AIM VARIABLE INSURANCE FUNDS,

A I M DISTRIBUTORS, INC.,

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY,

ON BEHALF OF ITSELF AND

ITS SEPARATE ACCOUNTS, AND AS UNDERWRITER OF VARIABLE

CONTRACTS AND POLICIES

TABLE OF CONTENTS

 

Description

 

    Page  

Section 1.   Available Funds

      2  

    1.1

  

Availability

      2  

    1.2

  

Addition, Deletion or Modification of Funds

      2  

    1.3

  

No Sales to the General Public

      2  

Section 2.   Processing Transactions

      2  

    2.1

  

Timely Pricing and Orders

      2  

    2.2

  

Timely Payments

      3  

    2.3

  

Applicable Price

      3  

    2.4

  

Dividends and Distributions

      4  

    2.5

  

Book Entry

      4  

Section 3.   Costs and Expenses

      5  

    3.1

  

General

      5  

    3.2

  

Parties To Cooperate

      5  

Section 4.   Legal Compliance

      5  

    4.1

  

Tax Laws

      5  

    4.2

  

Insurance and Certain Other Laws

      7  

    4.3

  

Securities Laws

      8  

    4.4

  

Notice of Certain Proceedings and Other Circumstances

      9  

    4.5

  

G-WL&A To Provide Documents; Information About AVIF

      9  

    4.6

  

AVIF To Provide Documents; Information About G-WL&A

      10  

Section 5.   Mixed and Shared Funding

      12  

    5.1

  

General

      12  

    5.2

  

Disinterested Trustees

      12  

    5.3

  

Monitoring for Material Irreconcilable Conflicts

      12  

    5.4

  

Conflict Remedies

      13  

    5.5

  

Notice to G-WL&A

      14  

    5.6

  

Information Requested by Board

      14  

    5.7

  

Compliance with SEC Rules

      14  

    5.8

  

Other Requirements

      15  

Section 6.   Termination

      15  

    6.1

  

Events of Termination

      15  

    6.2

  

Notice Requirement for Termination

      16  

    6.3

  

Funds To Remain Available

      17  

    6.4

  

Survival of Warranties and Indemnifications

      17  

    6.5

  

Continuance of Agreement for Certain Purposes

      17  

Section 7.   Parties To Cooperate Respecting Termination

      17  

Section 8.   Assignment

      18  

Section 9.   Notices

      18  

Section 10. Voting Procedures

      18  

Section 11.  Foreign Tax Credits

      19  

 

i

Section 12.   Indemnification

      19  

    12.1

  

Of AVIF and AIM by G-WL&A and UNDERWRITER

      19  

    12.2

  

Of G-WL&A and UNDERWRITER by AVIF and AIM

      21  

    12.3

  

Effect of Notice

      24  

    12.4

  

Successors

      24  

Section 13.   Applicable Law

      24  

Section 14.   Execution in Counterparts

      24  

Section 15.   Severability

      24  

Section 16.   Rights Cumulative

      24  

Section 17.   Headings

      25  

Section 18.   Confidentiality

      25  

Section 19.   Trademarks and Fund Names

      25  

Section 20.   Parties to Cooperate

      26  

Section 21.   Amendments; Need For

      26  

Section 22.   Force Majeure

      26  

 

ii

PARTICIPATION AGREEMENT

THIS AGREEMENT, made and entered into as of the 30th day of April, 2004 (“Agreement”), by and among AIM VARIABLE INSURANCE FUNDS, a Delaware Trust (“AVIF”), A I M Distributors, Inc., a Delaware corporation (“AIM”), GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY, a Colorado life insurance company (“G-WL&A”), on behalf of itself and each of its segregated asset accounts listed in Schedule A hereto, as the parties hereto may amend from time to time (each, an “Account,” and collectively, the “Accounts”); and as the principal underwriter of the Contracts (“UNDERWRITER”) (collectively, the “Parties”).

WITNESSETH THAT:

WHEREAS, AVIF is registered with the Securities and Exchange Commission (“SEC”) as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”); and

WHEREAS, AVIF currently consists of twenty-eight separate series (“Series”), shares (“Shares”) each of which are registered under the Securities Act of 1933, as amended (the “1933 Act”) and are currently sold to one or more separate accounts of life insurance companies to fund benefits under variable annuity contracts and variable life insurance contracts; and

WHEREAS, AVIF will make Shares of each Series listed on Schedule A hereto as the Parties hereto may amend from time to time (each a “Fund”; reference herein to “AVIF” includes reference to each Fund, to the extent the context requires) available for purchase by the Accounts; and

WHEREAS, G-WL&A will be the issuer of certain variable annuity contracts and variable life insurance contracts (“Contracts”) as set forth on Schedule A hereto, as the Parties hereto may amend from time to time, which Contracts (hereinafter collectively, the “Contracts”), if required by applicable law, will be registered under the 1933 Act; and

WHEREAS, G-WL&A will fund the Contracts through the Accounts, each of which may be divided into two or more subaccounts (“Subaccounts”; reference herein to an “Account” includes reference to each Subaccount thereof to the extent the context requires); and

WHEREAS, G-WL&A will serve as the depositor of the Accounts, each of which is registered as a unit investment trust investment company under the 1940 Act (or exempt therefrom), and the security interests deemed to be issued by the Accounts under the Contracts will be registered as securities under the 1933 Act (or exempt therefrom); and

WHEREAS, to the extent permitted by applicable insurance laws and regulations, G-WL&A intends to purchase Shares in one or more of the Funds on behalf of the Accounts to fund the Contracts; and

 

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WHEREAS, GWL&A intends to utilize its NSCC member broker/dealer affiliate, GWFS Equities, Inc., (“GWFS”) to transmit instructions for the purchase, redemption and transfer of Fund shares on behalf of the Account, and GWFS, alone, or with the assistance of a recordkeeping affiliate, to perform certain recordkeeping functions associated with the transfer of Fund shares into and out of the Account in order to recognize certain organizational economies; and

WHEREAS, AIM is a broker-dealer registered with the SEC under the 1934 Act and a member in good standing of the NASD;

NOW, THEREFORE, in consideration of the mutual benefits and promises contained herein, the Parties hereto agree as follows:

Section 1. Available Funds

 

  1.1

Availability

AVIF will make Shares of each Fund available to G-WL&A for purchase and redemption at net asset value and with no sales charges, subject to the terms and conditions of this Agreement. The Board of AVIF (the “Board”) may refuse to sell Shares of any Fund to any person, or suspend or terminate the offering of Shares of any Fund (a) if such action is required by law or by regulatory authorities having jurisdiction, (b) if, in the sole discretion of the Trustees acting in good faith and in light of their fiduciary duties under federal and any applicable state laws, such action is deemed in the best interests of the shareholders of such Fund, or (c) if such action is required by any policies that the Board has adopted and that apply to all Participating Insurance Companies.

 

  1.2

Addition, Deletion or Modification of Funds

The Parties hereto may agree, from time to time, to add other Funds to provide additional funding media for the Contracts, or to delete, combine, or modify existing Funds, by amending Schedule A hereto. Upon such amendment to Schedule A, any applicable reference to a Fund, AVIF, or its Shares herein shall include a reference to any such additional Fund. Schedule A, as amended from time to time, is incorporated herein by reference and is a part hereof.

 

  1.3

No Sales to the General Public

AVIF represents and warrants that no Shares of any Fund have been or will be sold to the general public.

Section 2. Processing Transactions

 

  2.1

Timely Pricing and Orders

 

2

(a)      AVIF or its designated agent will use its best efforts to provide G-WL&A with the net asset value per Share for each Fund by 6:00 p.m. Central Time on each Business Day. As used herein, “Business Day” shall mean any day on which (i) the New York Stock Exchange is open for regular trading, (ii) AVIF calculates the Fund’s net asset value, and (iii) G-WL&A is open for business.

(b)      G-WL&A will use the data provided by AVIF each Business Day pursuant to paragraph (a) immediately above to calculate Account unit values and to process transactions that receive that same Business Day’s Account unit values. G-WL&A will perform such Account processing the same Business Day, and will place corresponding orders to purchase or redeem Shares with AVIF by 9:00 a.m. Central Time the following Business Day; provided, however, that AVIF shall provide additional time to G-WL&A in the event that AVIF is unable to meet the 6:00 p.m. time stated in paragraph (a) immediately above. Such additional time shall be equal to the additional time that AVIF takes to make the net asset values available to G-WL&A.

(c)      With respect to payment of the purchase price by G-WL&A and of redemption proceeds by AVIF, G-WL&A and AVIF shall net purchase and redemption orders with respect to each Fund and shall transmit one net payment per Fund in accordance with Section 2.2, below.

(d)      If AVIF provides materially incorrect Share net asset value information (as determined under SEC guidelines), G-WL&A shall be entitled to an adjustment to the number of Shares purchased or redeemed to reflect the correct net asset value per Share. Any material error in the calculation or reporting of net asset value per Share, dividend or capital gain information shall be reported promptly upon discovery to G-WL&A. Materiality and reprocessing cost reimbursement shall be determined in accordance with standards established by the Parties as provided in Schedule B, attached hereto and incorporated herein (except that for any money market fund, materiality shall be determined in a manner consistent with Rule 2a-7 under the 1940 Act).

 

  2.2

Timely Payments

G-WL&A will wire payment for net purchases to a custodial account designated by AVIF by 1:00 p.m. Central Time on the same day as the order for Shares is placed, to the extent practicable. AVIF will wire payment for net redemptions to an account designated by G-WL&A by 1:00 p.m. Central Time on the same day as the Order is placed, to the extent practicable, but in any event within five (5) calendar days after the date the order is placed in order to enable G-WL&A to pay redemption proceeds within the time specified in Section 22(e) of the 1940 Act or such shorter period of time as may be required by law.

 

  2.3

Applicable Price

(a)      Share purchase payments and redemption orders that result from purchase payments, premium payments, surrenders and other transactions under Contracts (collectively, “Contract transactions”) and that G-WL&A receives prior to the close of regular trading on the New York Stock Exchange (or such other time set by the Board for purposes of determining the current net asset value of a Fund in accordance with Rule 22c-1 under the 1940 Act) on a Business Day will be executed at the net asset values of the appropriate Funds next computed after receipt by AVIF or its

 

3

designated agent of the orders. For purposes of this Section 2.3(a), G-WL&A shall be the designated agent of AVIF for receipt of orders relating to Contract transactions, in accordance with Section 22(c) and Rule 22c-1 under the 1940 Act, on each Business Day and receipt by such designated agent shall constitute receipt by AVIF; provided that AVIF receives notice of such orders by 9:00 a.m. Central Time on the next following Business Day or such later time as computed in accordance with Section 2.1(b) hereof. In connection with this Section 2.3(a), G-WL&A represents and warrants that it will not knowingly submit any order for Shares or engage in any practice, nor will it knowingly allow or suffer any person acting on its behalf to submit any order for Shares or engage in any practice, that would violate or cause a violation of applicable law or regulation including, without limitation Section 22 of the 1940 Act and the rules thereunder.

(b)      All other Share purchases and redemptions by G-WL&A will be effected at the net asset values of the appropriate Funds next computed after receipt by AVIF or its designated agent of the order therefor, and such orders will be irrevocable.

(c)      Without limiting the scope or effect of Section 1.1 hereof, pursuant to which the Board may reject a Share purchase order by or on behalf of G-WL&A under the circumstances described therein, G-WL&A and its designated affiliate agrees to cooperate with the Fund and AIM to prevent any person exercising, or purporting to exercise, rights or privileges under one or more Contracts (including, but not limited to Contract owners, annuitants, insureds or participants, as the case may be (collectively, “Participants”)) from engaging in any trading practices in any Fund that the Board or AIM determines, in good faith and in their sole discretion, to be detrimental or potentially detrimental to the other shareholders of the Fund, or to be in contravention of any applicable law or regulation including, without limitation, Section 22 of the 1940 Act and the rules thereunder. Such cooperation may include, but shall not be limited to, identifying the person or persons engaging in such trading practices, facilitating the imposition of any applicable redemption fee on such person or persons, limiting the telephonic or electronic trading privileges of such person or persons, and taking such other remedial steps, all to the extent permitted or required by applicable law and the Funds’ then current prospectus.

 

  2.4

Dividends and Distributions

AVIF will furnish notice by wire or telephone (followed by written confirmation) on or prior to the payment date to G-WL&A of any income dividends or capital gain distributions payable on the Shares of any Fund. G-WL&A hereby elects to reinvest all dividends and capital gains distributions in additional Shares of the corresponding Fund at the ex-dividend date net asset values until G-WL&A otherwise notifies AVIF in writing, it being agreed by the Parties that the ex-dividend date and the payment date with respect to any dividend or distribution will be the same Business Day. G-WL&A reserves the right to revoke this election and to receive all such income dividends and capital gain distributions in cash.

 

  2.5

Book Entry

Issuance and transfer of AVIF Shares will be by book entry only. Stock certificates will not be issued to G-WL&A. Shares ordered from AVIF will be recorded in an appropriate title for G-WL&A, on behalf of its Account.

 

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Section 3. Costs and Expenses

 

  3.1

General

Except as otherwise specifically provided in Schedule C, attached hereto and made a part hereof, each Party will bear, or arrange for others to bear, all expenses incident to its performance under this Agreement.

 

  3.2

Parties To Cooperate

Each Party agrees to cooperate with the others, as applicable, in arranging to print, mail and/or deliver, in a timely manner, combined or coordinated prospectuses or other materials of AVIF and the Accounts.

Section 4. Legal Compliance

 

  4.1

Tax Laws

(a)      AVIF represents and warrants that each Fund is currently qualified as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), and represents that it will use its best efforts to qualify and to maintain qualification of each Fund as a RIC. AVIF will notify G-WL&A immediately upon having a reasonable basis for believing that a Fund has ceased to so qualify or that it might not so qualify in the future.

(b)      AVIF represents that it will use its best efforts to comply and to maintain each Fund’s compliance with the diversification requirements set forth in Section 817(h) of the Code and Section 1.817-5(b) of the regulations under the Code. AVIF will notify G-WL&A immediately upon having a reasonable basis for believing that a Fund has ceased to so comply or that a Fund might not so comply in the future. In the event of a breach of this Section 4.1(b) by AVIF, it will take all reasonable steps to adequately diversify the Fund so as to achieve compliance within the grace period afforded by Section 1.817-5 of the regulations under the Code.

(c)      Notwithstanding any other provision of this Agreement, but without limiting the ability of AVIF and/or AIM to assume the defense of any action pursuant to Section 12.2(d) hereof, G-WL&A agrees that if the Internal Revenue Service (“IRS”) asserts in writing in connection with any governmental audit or review of G-WL&A or, to G-WL&A’s knowledge, of any Participants, that any Fund has failed to comply with the diversification requirements of Section 817(h) of the Code or G-WL&A otherwise becomes aware of any facts that could give rise to any claim against AVIF or its affiliates as a result of such a failure or alleged failure:

 

  (i)

G-WL&A shall promptly notify AVIF of such assertion or potential claim (subject to the Confidentiality provisions of Section 18 as to any Participant);

 

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  (ii)

G-WL&A shall consult with AVIF as to how to minimize any liability that may arise as a result of such failure or alleged failure;

 

  (iii)

G-WL&A shall use all commercially reasonable efforts to minimize any liability of AVIF or its affiliates resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations Section 1.817-5(a)(2), to the Commissioner of the IRS that such failure was inadvertent;

 

  (iv)

G-WL&A shall permit AVIF, its affiliates and their legal and accounting advisors to participate in any conferences, settlement discussions or other administrative or judicial proceeding or contests (including judicial appeals thereof) with the IRS, any Participant or any other claimant regarding any claims that could give rise to liability to AVIF or its affiliates as a result of such a failure or alleged failure; provided, however, that G-WL&A will retain control of the conduct of such conferences discussions, proceedings, contests or appeals;

 

  (v)

any written materials to be submitted by G-WL&A to the IRS, any Participant or any other claimant in connection with any of the foregoing proceedings or contests that would affect AIM, it affiliates and/or AVIF and/or AVIF’s shareholders, (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations Section 1.817-5(a)(2)), (a) shall be provided by G-WL&A to AVIF (together with any supporting information or analysis); subject to the confidentiality provisions of Section 18, at least ten (10) business days or such shorter period to which the Parties hereto agree prior to the day on which such proposed materials are to be submitted, and (b) shall not be submitted by G-WL&A to any such person without the express written consent of AVIF which shall not be unreasonably withheld;

 

  (vi)

G-WL&A shall provide AVIF or its affiliates and their accounting and legal advisors with such cooperation as AVIF shall reasonably request (including, without limitation, by permitting AVIF and its accounting and legal advisors to review the relevant books and records of G-WL&A) in order to facilitate review by AVIF or its advisors of any written submissions provided to it pursuant to the preceding clause or its assessment of the validity or amount of any claim against its arising from such a failure or alleged failure;

 

  (vii)

G-WL&A shall not with respect to any claim of the IRS or any Participant that would give rise to a claim against AVIF or its affiliates (a) compromise or settle any claim, (b) accept any adjustment on audit, or (c) forego any allowable administrative or judicial appeals, without the express written consent of AVIF or its affiliates, which shall not be unreasonably withheld, provided that G-WL&A shall not be required, after exhausting all administrative remedies, to appeal any adverse judicial decision unless AVIF

 

6

 

or its affiliates shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and provided further that the costs of any such appeal shall be borne solely by AVIF. Notwithstanding the foregoing, GWL&A agrees to share in fifty percent (50%) of the reasonable costs of appeal should the decision of the appellate court relieve GWL&A of any direct liability with respect to the claim appealed thereto; and

 

  (viii)

AVIF and its affiliates shall have no liability as a result of such failure or alleged failure if G-WL&A fails to comply with any of the foregoing clauses (i) through (vii), and such failure could be shown to have materially contributed to the liability.

Should AVIF or any of its affiliates refuse to give its written consent to any compromise or settlement of any claim or liability hereunder, G-WL&A may, in its discretion, authorize AVIF or its affiliates to act in the name of G-WL&A in, and to control the conduct of, such conferences, discussions, proceedings, contests or appeals and all administrative or judicial appeals thereof, and in that event AVIF or its affiliates shall bear the fees and expenses associated with the conduct of the proceedings that it is so authorized to control; provided, that in no event shall G-WL&A have any liability resulting from AVIF’s refusal to accept the proposed settlement or compromise with respect to any failure caused by AVIF. As used in this Agreement, the term “affiliates” shall have the same meaning as “affiliated person” as defined in Section 2(a)(3) of the 1940 Act.

(d)      G-WL&A represents and warrants that the Contracts currently are and will be treated as annuity contracts or life insurance contracts under applicable provisions of the Code and that it will use its best efforts to maintain such treatment; G-WL&A will notify AVIF immediately upon having a reasonable basis for believing that any of the Contracts have ceased to be so treated or that they might not be so treated in the future.

(e)      G-WL&A represents and warrants that each Account is a “segregated asset account” and that interests in each Account are offered exclusively through the purchase of or transfer into a “variable contract,” within the meaning of such terms under Section 817 of the Code and the regulations thereunder. G-WL&A will use its best efforts to continue to meet such definitional requirements, and it will notify AVIF immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future.

 

  4.2

Insurance and Certain Other Laws

(a)      AVIF will use its best efforts to comply with any applicable state insurance laws or regulations, to the extent specifically requested in writing by G-WL&A, which efforts shall include, without limitation, the furnishing of information that is not otherwise available to G-WL&A and that is required by state insurance law to enable G-WL&A to obtain the authority needed to issue the Contracts in any applicable state.

(b)      G-WL&A represents and warrants that (i) it is an insurance company duly organized, validly existing and in good standing under the laws of the State of Colorado and has full corporate

 

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power, authority and legal right to execute, deliver and perform its duties and comply with its obligations under this Agreement, and (ii) the Contracts comply in all material respects with all other applicable federal and state laws and regulations.

(c)      AVIF represents and warrants that it is lawfully organized, validly existing, and in good standing under the laws of the State of Delaware and has full power, authority, and legal right to execute, deliver, and perform its duties and comply with its obligations under this Agreement.

 

  4.3

Securities Laws

(a)      G-WL&A represents and warrants that (i) interests in each Account pursuant to the Contracts will be registered under the 1933 Act to the extent required by the 1933 Act, (ii) the Contracts will be duly authorized for issuance and sold in compliance with all applicable federal and state laws, including, without limitation, the 1933 Act, the 1934 Act, the 1940 Act and the law(s) of G-WL&A’s state(s) of organization and domicile, (iii) each Account is and will remain registered under the 1940 Act, to the extent required by the 1940 Act, (iv) each Account does and will comply in all material respects with the requirements of the 1940 Act and the rules thereunder, to the extent required, (v) each Account’s 1933 Act registration statement relating to the Contracts, together with any amendments thereto, will at all times comply in all material respects with the requirements of the 1933 Act and the rules thereunder, (vi) G-WL&A will amend the registration statement for its Contracts under the 1933 Act and for its Accounts under the 1940 Act from time to time as required in order to effect the continuous offering of its Contracts or as may otherwise be required by applicable law, and (vii) each Account Prospectus, Statement of Additional Information, and then-current stickers (collectively referred to herein as “Account Prospectus”), will at all times comply in all material respects with the requirements of the 1933 Act and the rules thereunder.

(b)      AVIF represents and warrants that (i) Shares sold pursuant to this Agreement will be registered under the 1933 Act to the extent required by the 1933 Act and duly authorized for issuance and sold in compliance with Delaware law, (ii) AVIF is and will remain registered under the 1940 Act to the extent required by the 1940 Act, (iii) AVIF will amend the registration statement for its Shares under the 1933 Act and itself under the 1940 Act from time to time as required in order to effect the continuous offering of its Shares, (iv) AVIF does and will comply in all material respects with the requirements of the 1940 Act and the rules thereunder, (v) AVIF’s 1933 Act registration statement, together with any amendments thereto, will at all times comply in all material respects with the requirements of the 1933 Act and rules thereunder, and (vi) AVIF’s Prospectus, Statement of Additional Information, and then-current stickers (collectively referred to herein as “AVIF Prospectus”), will at all times comply in all material respects with the requirements of the 1933 Act and the rules thereunder.

(c)      AVIF will at its expense register and qualify its Shares for sale in accordance with the laws of any state or other jurisdiction if and to the extent reasonably deemed advisable by AVIF.

(d)      AVIF represents and warrants that all of its trustees, officers, employees, investment advisers, and other individuals/entities having access to the funds and/or securities of the Fund are and continue to be at all times covered by a blanket fidelity bond or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage as required currently by Rule 17g-(1) of

 

8

the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bond includes coverage for larceny and embezzlement and is issued by a reputable bonding company.

 

  4.4

Notice of Certain Proceedings and Other Circumstances

(a)      AVIF or AIM will immediately notify G-WL&A of (i) the issuance by any court or regulatory body of any stop order, cease and desist order, or other similar order with respect to AVIF’s registration statement under the 1933 Act or AVIF Prospectus, (ii) any request by the SEC for any amendment to such registration statement or AVIF Prospectus that may affect the offering of Shares of AVIF, (iii) the initiation of any proceedings for that purpose or for any other purpose relating to the registration or offering of AVIF’s Shares, or (iv) any other action or circumstances that may prevent the lawful offer or sale of Shares of any Fund in any state or jurisdiction, including, without limitation, any circumstances in which (a) such Shares are not registered and, in all material respects, issued and sold in accordance with applicable state and federal law, or (b) such law precludes the use of such Shares as an underlying investment medium of the Contracts issued or to be issued by G-WL&A. AVIF and AIM will make every reasonable effort to prevent the issuance, with respect to any Fund, of any such stop order, cease and desist order or similar order and, if any such order is issued, to obtain the lifting thereof at the earliest possible time.

(b)      G-WL&A or its designated underwriter affiliate will immediately notify AVIF of (i) the issuance by any court or regulatory body of any stop order, cease and desist order, or other similar order with respect to each Account’s registration statement under the 1933 Act relating to the Contracts or each Account Prospectus, (ii) any request by the SEC for any amendment to such registration statement or Account Prospectus that may affect the offering of Shares of AVIF, (iii) the initiation of any proceedings for that purpose or for any other purpose relating to the registration or offering of each Account’s interests pursuant to the Contracts, or (iv) any other action or circumstances that may prevent the lawful offer or sale of said interests in any state or jurisdiction, including, without limitation, any circumstances in which said interests are not registered and, in all material respects, issued and sold in accordance with applicable state and federal law. G-WL&A and its designated underwriter affiliate will make every reasonable effort to prevent the issuance of any such stop order, cease and desist order or similar order and, if any such order is issued, to obtain the lifting thereof at the earliest possible time.

 

  4.5

G-WL&A To Provide Documents; Information About AVIF

(a)      G-WL&A will provide to AVIF or its designated agent at least one (1) complete copy of all SEC registration statements, Account Prospectuses, reports, any preliminary and final voting instruction solicitation material, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to each Account or the Contracts, contemporaneously with the filing of such document with the SEC or other regulatory authorities.

(b)      G-WL&A will provide to AVIF or its designated agent at least one (1) complete copy of each piece of sales literature or other promotional material in which AVIF or any of its affiliates is named, at least five (5) Business Days prior to its use or such shorter period as the Parties hereto

 

9

may, from time to time, agree upon. No such material shall be used if AVIF or its designated agent objects to such use within five (5) Business Days after receipt of such material or such shorter period as the Parties hereto may, from time to time, agree upon. AVIF hereby designates AIM as the entity to receive such sales literature, until such time as AVIF appoints another designated agent by giving notice to G-WL&A in the manner required by Section 9 hereof.

(c)      Neither G-WL&A nor any of its affiliates, will give any information or make any representations or statements on behalf of or concerning AVIF or its affiliates in connection with the sale of the Contracts other than (i) the information or representations contained in the registration statement, including the AVIF Prospectus contained therein, relating to Shares, as such registration statement and AVIF Prospectus may be amended from time to time; or (ii) in reports or proxy materials for AVIF; or (iii) in published reports for AVIF that are in the public domain and approved by AVIF for distribution; or (iv) in sales literature or other promotional material approved by AVIF, except with the express written permission of AVIF.

(d)      G-WL&A shall adopt and implement procedures reasonably designed to ensure that information concerning AVIF and its affiliates that is intended for use only by brokers or agents selling the Contracts (i.e., information that is not intended for distribution to Participants) (“broker only materials”) is so used, and neither GWL&A, AVIF nor any of their affiliates shall be liable for any losses, damages or expenses relating to the improper use of such broker only materials.

(e)      For the purposes of this Section 4.5, the phrase “sales literature or other promotional material” includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media, (e.g., on-line networks such as the Internet or other electronic messages), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, registration statements, prospectuses, statements of additional information, shareholder reports, and proxy materials and any other material constituting sales literature or advertising under the NASD rules, the 1933 Act, or the 1940 Act.

 

  4.6

AVIF To Provide Documents; Information About G-WL&A

(a)      AVIF will provide to G-WL&A at least one (1) complete copy of all SEC registration statements, AVIF Prospectuses, reports, any preliminary and final proxy material, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to AVIF or the Shares of a Fund, contemporaneously with the filing of such document with the SEC or other regulatory authorities.

(b)      AVIF will provide to G-WL&A a camera ready copy of all AVIF prospectuses and printed copies, in an amount specified by G-WL&A, of AVIF statements of additional information, proxy materials, periodic reports to shareholders and other materials required by law to be sent to

 

10

Participants who have allocated any Contract value to a Fund. AVIF will provide such copies to G-WL&A in a timely manner so as to enable G-WL&A, as the case may be, to print and distribute such materials within the time required by law to be furnished to Participants.

(c)      AVIF will provide to G-WL&A or its designated agent at least one (1) complete copy of each piece of sales literature or other promotional material in which G-WL&A, or any of its respective affiliates is named, or that refers to the Contracts, at least five (5) Business Days prior to its use or such shorter period as the Parties hereto may, from time to time, agree upon. No such material shall be used if G-WL&A or its designated agent objects to such use within five (5) Business Days after receipt of such material or such shorter period as the Parties hereto may, from time to time, agree upon. G-WL&A shall receive all such sales literature until such time as it appoints a designated agent by giving notice to AVIF in the manner required by Section 9 hereof.

(d)      Neither AVIF nor any of its affiliates will give any information or make any representations or statements on behalf of or concerning G-WL&A, each Account, or the Contracts other than (i) the information or representations contained in the registration statement, including each Account Prospectus contained therein, relating to the Contracts, as such registration statement and Account Prospectus may be amended from time to time; or (ii) in published reports for the Account or the Contracts that are in the public domain and approved by G-WL&A for distribution; or (iii) in sales literature or other promotional material approved by G-WL&A or its affiliates, except with the express written permission of G-WL&A.

(e)      AVIF shall cause its principal underwriter to adopt and implement procedures reasonably designed to ensure that information concerning G-WL&A, and its respective affiliates that is intended for use only by brokers or agents selling the Contracts (i.e., information that is not intended for distribution to Participants) (“broker only materials”) is so used, and neither G-WL&A, nor any of its respective affiliates shall be liable for any losses, damages or expenses relating to the improper use of such broker only materials.

(f)      For purposes of this Section 4.6, the phrase “sales literature or other promotional material” includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media, (e.g., on-line networks such as the Internet or other electronic messages), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, registration statements, prospectuses, statements of additional information, shareholder reports, and proxy materials and any other material constituting sales literature or advertising under the NASD rules, the 1933 Act, or the 1940 Act.

 

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Section 5. Mixed and Shared Funding

 

  5.1

General

The SEC has granted an order to AVIF exempting it from certain provisions of the 1940 Act and rules thereunder so that AVIF may be available for investment by certain other entities, including, without limitation, separate accounts funding variable annuity contracts or variable life insurance contracts, separate accounts of insurance companies unaffiliated with G-WL&A, and trustees of qualified pension and retirement plans (collectively, “Mixed and Shared Funding”). The Parties recognize that the SEC has imposed terms and conditions for such orders that are substantially identical to many of the provisions of this Section 5. Sections 5.2 through 5.8 below shall apply pursuant to the exemptive order granted to AVIF. AVIF hereby notifies G-WL&A that, in the event that AVIF implements Mixed and Shared Funding, it may be appropriate to include in the prospectus pursuant to which a Contract is offered disclosure regarding the potential risks of Mixed and Shared Funding.

 

  5.2

Disinterested Trustees

AVIF agrees that its Board shall at all times consist of trustees a majority of whom (the “Disinterested Trustees”) are not interested persons of AVIF within the meaning of Section 2(a)(19) of the 1940 Act and the rules thereunder and as modified by any applicable orders of the SEC, except that if this condition is not met by reason of the death, disqualification, or bona fide resignation of any director, then the operation of this condition shall be suspended (a) for a period of forty-five (45) days if the vacancy or vacancies may be filled by the Board; (b) for a period of sixty (60) days if a vote of shareholders is required to fill the vacancy or vacancies or (c) for such longer period as the SEC may prescribe by order upon application.

 

  5.3

Monitoring for Material Irreconcilable Conflicts

AVIF agrees that its Board will monitor for the existence of any material irreconcilable conflict between the interests of the Participants in all separate accounts of life insurance companies utilizing AVIF (“Participating Insurance Companies”), including each Account, and participants in all qualified retirement and pension plans investing in AVIF (“Participating Plans”). G-WL&A agrees to inform the Board of AVIF of the existence of or any potential for any such material irreconcilable conflict of which it is aware. The concept of a “material irreconcilable conflict” is not defined by the 1940 Act or the rules thereunder, but the Parties recognize that such a conflict may arise for a variety of reasons, including, without limitation:

(a) an action by any state insurance or other regulatory authority;

(b)      a change in applicable federal or state insurance, tax or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax or securities regulatory authorities;

(c) an administrative or judicial decision in any relevant proceeding;

 

12

(d)     the manner in which the investments of any Fund are being managed;

(e)     a difference in voting instructions given by variable annuity contract and variable life insurance contract Participants or by Participants of different Participating Insurance Companies;

(f)     a decision by a Participating Insurance Company to disregard the voting instructions of Participants; or

(g)     a decision by a Participating Plan to disregard the voting instructions of Plan participants.

Consistent with the SEC’s requirements in connection with exemptive orders of the type referred to in Section 5.1 hereof, G-WL&A will assist the Board in carrying out its responsibilities by providing the Board with all information reasonably necessary for the Board to consider any issue raised, including information as to a decision by G-WL&A to disregard voting instructions of Participants. G-WL&A’s responsibilities in connection with the foregoing shall be carried out with a view only to the interests of Participants.

5.4    Conflict Remedies

(a)     It is agreed that if it is determined by a majority of the members of the Board or a majority of the Disinterested Trustees that a material irreconcilable conflict exists, G-WL&A will, if it is a Participating Insurance Company for which a material irreconcilable conflict is relevant, at its own expense and to the extent reasonably practicable (as determined by a majority of the Disinterested Trustees), take whatever steps are necessary to remedy or eliminate the material irreconcilable conflict, which steps may include, but are not limited to:

 

  (i)

withdrawing the assets allocable to some or all of the Accounts from AVIF or any Fund and reinvesting such assets in a different investment medium, including another Fund of AVIF, or submitting the question whether such segregation should be implemented to a vote of all affected Participants and, as appropriate, segregating the assets of any particular group (e.g., annuity Participants, life insurance Participants or all Participants) that votes in favor of such segregation, or offering to the affected Participants the option of making such a change; and

  (ii)

establishing a new registered investment company of the type defined as a “management company” in Section 4(3) of the 1940 Act or a new separate account that is operated as a management company.

(b)     If the material irreconcilable conflict arises because of G-WL&A’s decision to disregard Participant voting instructions and that decision represents a minority position or would preclude a majority vote, G-WL&A may be required, at AVIF’s election, to withdraw each Account’s investment in AVIF or any Fund. No charge or penalty will be imposed as a result of such withdrawal. Any such withdrawal must take place within six (6) months after AVIF gives notice to

 

13

G-WL&A that this provision is being implemented, and until such withdrawal AVIF shall continue to accept and implement orders by G-WL&A for the purchase and redemption of Shares of AVIF.

(c)     If a material irreconcilable conflict arises because a particular state insurance regulator’s decision applicable to G-WL&A conflicts with the majority of other state regulators, then G-WL&A will withdraw each Account’s investment in AVIF within six (6) months after AVIF’s Board informs G-WL&A that it has determined that such decision has created a material irreconcilable conflict, and until such withdrawal AVIF shall continue to accept and implement orders by G-WL&A for the purchase and redemption of Shares of AVIF. No charge or penalty will be imposed as a result of such withdrawal.

(d)     G-WL&A agrees that any remedial action taken by it in resolving any material irreconcilable conflict will be carried out at its expense and with a view only to the interests of Participants.

(e)     For purposes hereof, a majority of the Disinterested Trustees will determine whether or not any proposed action adequately remedies any material irreconcilable conflict. In no event, however, will AVIF or any of its affiliates be required to establish a new funding medium for any Contracts. G-WL&A will not be required by the terms hereof to establish a new funding medium for any Contracts if an offer to do so has been declined by vote of a majority of Participants materially adversely affected by the material irreconcilable conflict.

 

  5.5    Notice

to G-WL&A

AVIF will promptly make known in writing to G-WL&A the Board’s determination of the existence of a material irreconcilable conflict, a description of the facts that give rise to such conflict and the implications of such conflict.

5.6    Information Requested by Board

G-WL&A and AVIF (or its investment adviser) will at least annually submit to the Board of AVIF such reports, materials or data as the Board may reasonably request so that the Board may fully carry out the obligations imposed upon it by the provisions hereof or any exemptive order granted by the SEC to permit Mixed and Shared Funding, and said reports, materials and data will be submitted at any reasonable time deemed appropriate by the Board. All reports received by the Board of potential or existing conflicts, and all Board actions with regard to determining the existence of a conflict, notifying Participating Insurance Companies and Participating Plans of a conflict, and determining whether any proposed action adequately remedies a conflict, will be properly recorded in the minutes of the Board or other appropriate records, and such minutes or other records will be made available to the SEC upon request.

5.7    Compliance with SEC Rules

If, at any time during which AVIF is serving as an investment medium for variable life insurance Contracts, 1940 Act Rules 6e-3(T) or, if applicable, 6e-2 are amended or Rule 6e-3 is

 

14

adopted to provide exemptive relief with respect to Mixed and Shared Funding, AVIF agrees that it will comply with the terms and conditions thereof and that the terms of this Section 5 shall be deemed modified if and only to the extent required in order also to comply with the terms and conditions of such exemptive relief that is afforded by any of said rules that are applicable.

5.8    Other Requirements

AVIF will require that each Participating Insurance Company and Participating Plan enter into an agreement with AVIF that contains in substance the same provisions as are set forth in Sections 4.1(b), 4.1(d), 4.3(a), 4.4(b), 4.5(a), 5, and 10 of this Agreement.

Section 6. Termination

6.1    Events of Termination

Subject to Section 6.4 below, this Agreement will terminate as to a Fund:

(a)     at the option of any party, with or without cause with respect to the Fund, upon six (6) months advance written notice to the other parties, or, if later, upon receipt of any required exemptive relief from the SEC, unless otherwise agreed to in writing by the parties; or

(b)     at the option of AVIF upon institution of formal proceedings against G-WL&A or its affiliates by the NASD, the SEC, any state insurance regulator or any other regulatory body regarding G-WL&A’s obligations under this Agreement or related to the sale of the Contracts, the operation of each Account, or the purchase of Shares, if, in each case, AVIF reasonably determines that such proceedings, or the facts on which such proceedings would be based, have a material likelihood of imposing material adverse consequences on the Fund with respect to which the Agreement is to be terminated; or

(c)     at the option of G-WL&A upon institution of formal proceedings against AVIF, its principal underwriter, or its investment adviser by the NASD, the SEC, or any state insurance regulator or any other regulatory body regarding AVIF’s obligations under this Agreement or related to the operation or management of AVIF or the purchase of AVIF Shares, if, in each case, G-WL&A reasonably determines that such proceedings, or the facts on which such proceedings would be based, have a material likelihood of imposing material adverse consequences on G-WL&A, or the Subaccount corresponding to the Fund with respect to which the Agreement is to be terminated; or

(d)     at the option of any Party in the event that (i) the Fund’s Shares are not registered and, in all material respects, issued and sold in accordance with any applicable federal or state law, or (ii) such law precludes the use of such Shares as an underlying investment medium of the Contracts issued or to be issued by G-WL&A; or

(e)     upon termination of the corresponding Subaccount’s investment in the Fund pursuant to Section 5 hereof; or

 

15

(f)     at the option of G-WL&A if the Fund ceases to qualify as a RIC under Subchapter M of the Code or under successor or similar provisions, or if G-WL&A reasonably believes that the Fund may fail to so qualify; or

(g)     at the option of G-WL&A if the Fund fails to comply with Section 817(h) of the Code or with successor or similar provisions, or if G-WL&A reasonably believes that the Fund may fail to so comply; or

(h)     at the option of AVIF if the Contracts issued by G-WL&A cease to qualify as annuity contracts or life insurance contracts under the Code (other than by reason of the Fund’s noncompliance with Section 817(h) or Subchapter M of the Code) or if interests in an Account under the Contracts are not registered, where required, and, in all material respects, are not issued or sold in accordance with any applicable federal or state law; or

(i)     upon another Party’s material breach of any provision of this Agreement.

6.2    Notice Requirement for Termination

No termination of this Agreement will be effective unless and until the Party terminating this Agreement gives prior written notice to the other Party to this Agreement of its intent to terminate, and such notice shall set forth the basis for such termination. Furthermore:

(a)     in the event that any termination is based upon the provisions of Sections 6.1(a) or 6.1(e) hereof, such prior written notice shall be given at least six (6) months in advance of the effective date of termination unless a shorter time is agreed to by the Parties hereto;

(b)     in the event that any termination is based upon the provisions of Sections 6.1(b) or 6.1(c) hereof, such prior written notice shall be given at least ninety (90) days in advance of the effective date of termination unless a shorter time is agreed to by the Parties hereto; and

 

16

(c)     in the event that any termination is based upon the provisions of Sections 6.1(d), 6.1(f), 6.1(g), 6.1(h) or 6.1(i) hereof, such prior written notice shall be given as soon as possible within twenty-four (24) hours after the terminating Party learns of the event causing termination to be required.

6.3    Funds To Remain Available

Notwithstanding any termination of this Agreement by G-WL&A, AVIF will, at the option of G-WL&A, continue to make available additional shares of the Fund pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as “Existing Contracts”), unless AIM or the Board determines that doing so would not serve the best interests of the shareholders of the affected Funds or would be inconsistent with applicable law or regulation. Specifically, without limitation, the owners of the Existing Contracts will be permitted to reallocate investments in the Fund (as in effect on such date), redeem investments in the Fund and/or invest in the Fund upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 6.3 will not apply to any (i) terminations under Section 5 and the effect of such terminations will be governed by Section 5 of this Agreement or (ii) any rejected purchase and/or redemption order as described in Section 2.3(c) hereof.

6.4    Survival of Warranties and Indemnifications

All warranties and indemnifications will survive the termination of this Agreement.

6.5    Continuance of Agreement for Certain Purposes

If any Party terminates this Agreement with respect to any Fund pursuant to Sections 6.1(b), 6.1(c), 6.1(d), 6.1(f), 6.1(g), 6.1(h) or 6.1(i) hereof, this Agreement shall nevertheless continue in effect as to any Shares of that Fund that are outstanding as of the date of such termination (the “Initial Termination Date”). This continuation shall extend to the earlier of the date as of which an Account owns no Shares of the affected Fund or a date (the “Final Termination Date”) six (6) months following the Initial Termination Date, except that G-WL&A may, by written notice shorten said six (6) month period in the case of a termination pursuant to Sections 6.1(d), 6.1(f), 6.1(g), 6.1(h) or 6.1(i).

Section 7. Parties To Cooperate Respecting Termination

The Parties hereto agree to cooperate and give reasonable assistance to one another in taking all necessary and appropriate steps for the purpose of ensuring that an Account owns no Shares of a Fund after the Final Termination Date with respect thereto, or, in the case of a termination pursuant to Section 6.1(a), the termination date specified in the notice of termination. Such steps may include combining the affected Account with another Account, substituting other mutual fund shares for those of the affected Fund, or otherwise terminating participation by the Contracts in such Fund.

 

17

Section 8. Assignment

This Agreement may not be assigned by any Party, except with the written consent of each other Party. For purposes of this Agreement, the designation of an affiliate of a Party to perform some, or all, the duties and obligations hereto shall not be construed as an assignment. An affiliate is that entity which is controlled, either directly or indirectly by a Party and shall include any entity that conforms to such definition as of the effective date of the Agreement as well as any entity that conforms to the definition anytime thereafter.

Section 9. Notices

Notices and communications required or permitted will be given by means mutually acceptable to the Parties concerned. Each other notice or communication required or permitted by this Agreement will be given to the following persons at the following addresses and facsimile numbers, or such other persons, addresses or facsimile numbers as the Party receiving such notices or communications may subsequently direct in writing:

AIM VARIABLE INSURANCE FUNDS

A I M DISTRIBUTORS, INC.

11 Greenway Plaza, Suite 100

Houston, Texas 77046

Facsimile:    (713) 993-9185

Attn:    Peter A. Davidson, Esq.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

8515 East Orchard Road

Greenwood Village, Colorado 80111

Attn:    Vice President, Institutional Insurance

cc:    Beverly A. Byrne, V.P. Counsel and Associate Secretary

Section 10. Voting Procedures

Subject to the cost allocation procedures set forth in Section 3 hereof, G-WL&A will distribute all proxy material furnished by AVIF to Participants to whom pass-through voting privileges are required to be extended and will solicit voting instructions from Participants. G-WL&A will vote Shares in accordance with timely instructions received from Participants. G-WL&A will vote Shares that are (a) not attributable to Participants to whom pass-through voting privileges are extended, or (b) attributable to Participants, but for which no timely instructions have been received, in the same proportion as Shares for which said instructions have been received from Participants, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass through voting privileges for Participants. Neither G-WL&A nor any of its affiliates will in any way recommend action in connection with or oppose or interfere with the solicitation of proxies for the Shares held for such Participants. G-WL&A reserves the right to vote shares held in any Account in its own right, to the extent permitted by law. G-WL&A shall be responsible for assuring that each of its Accounts holding Shares calculates voting privileges in a manner consistent with that of other

 

18

Participating Insurance Companies or in the manner required by the Mixed and Shared Funding exemptive order obtained by AVIF. AVIF will notify G-WL&A of any changes of interpretations or amendments to Mixed and Shared Funding exemptive order it has obtained. AVIF will comply with all provisions of the 1940 Act requiring voting by shareholders, and in particular, AVIF either will provide for annual meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not to require such meetings) or will comply with Section 16(c) of the 1940 Act (although AVIF is not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further, AVIF will act in accordance with the SEC’s interpretation of the requirements of Section 16(a) with respect to periodic elections of trustees and with whatever rules the SEC may promulgate with respect thereto.

Section 11. Foreign Tax Credits

AVIF agrees to consult in advance with G-WL&A concerning any decision to elect or not to elect pursuant to Section 853 of the Code to pass through the benefit of any foreign tax credits to its shareholders.

Section 12. Indemnification

12.1    Of AVIF and AIM by G-WL&A

(a)     Except to the extent provided in Sections 12.1(b) and 12.1(c), below, G-WL&A and

its designated affiliates agree to indemnify and hold harmless AVIF, AIM, their affiliates, and each person, if any, who controls AVIF, AIM, or their affiliates within the meaning of Section 15 of the 1933 Act and each of their respective trustees and officers, (collectively, the “Indemnified Parties” for purposes of this Section 12.1) against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the written consent of G-WL&A or actions in respect thereof (including, to the extent reasonable, legal and other expenses), to which the Indemnified Parties may become subject under any statute, regulation, at common law or otherwise; provided, the Account owns shares of the Fund and insofar as such losses, claims, damages, liabilities or actions:

 

  (i)

arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Account’s 1933 Act registration statement, any Account Prospectus, the Contracts, or sales literature or advertising for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, that this agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished to G-WL&A or its designated affiliate by or on behalf of AVIF or AIM for use in any Account’s 1933 Act registration statement, any Account Prospectus, the

 

19

Contracts, or sales literature or advertising or otherwise for use in connection with the sale of Contracts or Shares (or any amendment or supplement to any of the foregoing); or

 

  (ii)

arise out of or as a result of any other statements or representations (other than statements or representations contained in AVIF’s 1933 Act registration statement, AVIF Prospectus, sales literature or advertising of AVIF, or any amendment or supplement to any of the foregoing, not supplied for use therein by or on behalf of G-WL&A or their respective affiliates and on which such persons have reasonably relied) or the negligent, illegal or fraudulent conduct of G-WL&A or their respective affiliates or persons under their control (including, without limitation, their employees and “persons associated with a member,” as that term is defined in paragraph (q) of Article I of the NASD’s By-Laws), in connection with the sale or distribution of the Contracts or Shares; or

 

  (iii)

arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in AVIF’s 1933 Act registration statement, AVIF Prospectus, sales literature or advertising of AVIF, or any amendment or supplement to any of the foregoing, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading if such a statement or omission was made in reliance upon and in conformity with information furnished to AVIF, AIM or their affiliates by or on behalf of G-WL&A or their respective affiliates for use in AVIF’s 1933 Act registration statement, AVIF Prospectus, sales literature or advertising of AVIF, or any amendment or supplement to any of the foregoing; or

 

  (iv)

arise as a result of any failure by G-WL&A or its designated affiliates to perform the obligations, provide the services and furnish the materials required of them under the terms of this Agreement, or any material breach of any representation and/or warranty made by G-WL&A or its designated affiliates in this Agreement or arise out of or result from any other material breach of this Agreement by G-WL&A or its designated affiliates; or

 

  (v)

arise as a result of failure by the Contracts issued by G-WL&A to qualify as annuity contracts or life insurance contracts under the Code, otherwise than by reason of any Fund’s failure to comply with Subchapter M or Section 817(h) of the Code.

(b)     Neither G-WL&A nor its designated affiliates shall be liable under this Section 12.1 with respect to any losses, claims, damages, liabilities or actions to which an Indemnified Party would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance by that Indemnified Party of its duties or by reason of that Indemnified Party’s reckless disregard of obligations or duties (i) under this Agreement, or (ii) to AVIF or AIM.

 

20

(c)     Neither G-WL&A nor its designated affiliates shall be liable under this Section 12.1 with respect to any action against an Indemnified Party unless AVIF or AIM shall have notified G-WL&A and its designated affiliates in writing within a reasonable time after the summons or other first legal process giving information of the nature of the action shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify G-WL&A and its designated affiliates of any such action shall not relieve G-WL&A and its designated affiliates from any liability which they may have to the Indemnified Party against whom such action is brought otherwise than on account of this Section 12.1. Except as otherwise provided herein, in case any such action is brought against an Indemnified Party, G-WL&A and its designated affiliates shall be entitled to participate, at their own expense, in the defense of such action and also shall be entitled to assume the defense thereof, with counsel approved by the Indemnified Party named in the action, which approval shall not be unreasonably withheld. After notice from G-WL&A or its designated affiliates to such Indemnified Party of G-WL&A’s or its designated affiliates’ election to assume the defense thereof, the Indemnified Party will cooperate fully with G-WL&A and its designated affiliates and shall bear the fees and expenses of any additional counsel retained by it, and neither LIFE COMPANY nor its designated affiliates will be liable to such Indemnified Party under this Agreement for any legal or other expenses subsequently incurred by such Indemnified Party independently in connection with the defense thereof, other than reasonable costs of investigation.

12.2    Of G-WL&A by AVIF and AIM

(a)     Except to the extent provided in Sections 12.2(c), 12.2(d) and 12.2(e), below, AVIF and AIM agree to indemnify and hold harmless G-WL&A and its respective affiliates, and each person, if any, who controls G-WL&A or its respective affiliates within the meaning of Section 15 of the 1933 Act and each of their respective trustees and officers, (collectively, the “Indemnified Parties” for purposes of this Section 12.2) against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the written consent of AVIF and/or AIM) or actions in respect thereof (including, to the extent reasonable, legal and other expenses), to which the Indemnified Parties may become subject under any statute, regulation, at common law, or otherwise; provided, the Account owns shares of the Fund and insofar as such losses, claims, damages, liabilities or actions:

 

  (i)

arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in AVIF’s 1933 Act registration statement, AVIF Prospectus or sales literature or advertising of AVIF (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, that this agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished to AVIF or its affiliates by or on behalf of G-WL&A, or its respective affiliates for use in AVIF’s 1933 Act registration statement,

 

21

AVIF Prospectus, or in sales literature or advertising or otherwise for use in connection with the sale of Contracts or Shares (or any amendment or supplement to any of the foregoing); or

 

  (ii)

arise out of or as a result of any other statements or representations (other than statements or representations contained in any Account’s 1933 Act registration statement, any Account Prospectus, sales literature or advertising for the Contracts, or any amendment or supplement to any of the foregoing, not supplied for use therein by or on behalf of AVIF, AIM or their affiliates and on which such persons have reasonably relied) or the negligent, illegal or fraudulent conduct of AVIF, AIM or their affiliates or persons under their control (including, without limitation, their employees and “persons associated with a member” as that term is defined in Section (q) of Article I of the NASD By-Laws), in connection with the sale or distribution of AVIF Shares; or

 

  (iii)

arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Account’s 1933 Act registration statement, any Account Prospectus, sales literature or advertising covering the Contracts, or any amendment or supplement to any of the foregoing, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such statement or omission was made in reliance upon and in conformity with information furnished to G-WL&A or its respective affiliates by or on behalf of AVIF or AIM for use in any Account’s 1933 Act registration statement, any Account Prospectus, sales literature or advertising covering the Contracts, or any amendment or supplement to any of the foregoing; or

 

  (iv)

arise as a result of any failure by AVIF to perform the obligations, provide the services and furnish the materials required of it under the terms of this Agreement, or any material breach of any representation and/or warranty made by AVIF in this Agreement or arise out of or result from any other material breach of this Agreement by AVIF.

(b)     The parties agree that the foregoing indemnification by AVIF shall not apply to any acts or omissions of AIM. Except to the extent provided in Sections 12.2(c), 12.2(d) and 12.2(e) hereof, AVIF and AIM agree to indemnify and hold harmless the Indemnified Parties from and against any and all losses, claims, damages, liabilities (including amounts paid in settlement thereof with, the written consent of AVIF and/or AIM) or actions in respect thereof (including, to the extent reasonable, legal and other expenses) to which the Indemnified Parties may become subject directly or indirectly under any statute, at common law or otherwise, insofar as such losses, claims, damages, liabilities or actions directly or indirectly result from or arise out of the failure of any Fund to operate as a regulated investment company in compliance with (i) Subchapter M of the Code and regulations thereunder, or (ii) Section 817(h) of the Code and regulations thereunder, including,

 

22

without limitation, any income taxes and related penalties, rescission charges, liability under state law to Participants asserting liability against G-WL&A pursuant to the Contracts, the costs of any ruling and closing agreement or other settlement with the IRS, and the cost of any substitution by G-WL&A of Shares of another investment company or portfolio for those of any adversely affected Fund as a funding medium for each Account that G-WL&A reasonably deems necessary or appropriate as a result of the noncompliance.

(c)     Neither AVIF nor AIM shall be liable under this Section 12.2 with respect to any losses, claims, damages, liabilities or actions to which an Indemnified Party would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance by that Indemnified Party of its duties or by reason of such Indemnified Party’s reckless disregard of its obligations and duties (i) under this Agreement, or (ii) to G-WL&A, UNDERWRITER, each Account or Participants.

(d)     Neither AVIF nor AIM shall be liable under this Section 12.2 with respect to any action against an Indemnified Party unless the Indemnified Party shall have notified AVIF and/or AIM in writing within a reasonable time after the summons or other first legal process giving information of the nature of the action shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify AVIF or AIM of any such action shall not relieve AVIF or AIM from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this Section 12.2. Except as otherwise provided herein, in case any such action is brought against an Indemnified Party, AVIF and/or AIM will be entitled to participate, at its own expense, in the defense of such action and also shall be entitled to assume the defense thereof (which shall include, without limitation, the conduct of any ruling request and closing agreement or other settlement proceeding with the IRS), with counsel approved by the Indemnified Party named in the action, which approval shall not be unreasonably withheld. After notice from AVIF and/or AIM to such Indemnified Party of AVIF’s or AIM’s election to assume the defense thereof, the Indemnified Party will cooperate fully with AVIF and AIM and shall bear the fees and expenses of any additional counsel retained by it, and AVIF and AIM will not be liable to such Indemnified Party under this Agreement for any legal or other expenses subsequently incurred by such Indemnified Party independently in connection with the defense thereof, other than reasonable costs of investigation.

(e)     In no event shall AVIF or AIM be liable under the indemnification provisions contained in this Agreement to any individual or entity, including, without limitation, G-WL&A or any other Participating Insurance Company or any Participant, with respect to any losses, claims, damages, liabilities or expenses that arise out of or result from (i) a breach of any representation, warranty, and/or covenant made by G-WL&A or its designated affiliates hereunder or by any other Participating Insurance Company under an agreement containing substantially similar representations, warranties and covenants; (ii) the failure by G-WL&A or any other Participating Insurance Company to maintain its segregated asset account (which invests in any Fund) as a legally and validly established segregated asset account under applicable state law and as a duly registered unit investment trust under the provisions of the 1940 Act (unless exempt therefrom); or (iii) the failure by G-WL&A or any other Participating Insurance Company to maintain its variable annuity or

 

23

life insurance contracts (with respect to which any Fund serves as an underlying funding vehicle) as annuity contracts or life insurance contracts under applicable provisions of the Code.

12.3    Effect of Notice

Any notice given by the indemnifying Party to an Indemnified Party referred to in Sections 12.1(c) or 12.2(d) above of participation in or control of any action by the indemnifying Party will in no event be deemed to be an admission by the indemnifying Party of liability, culpability or responsibility, and the indemnifying Party will remain free to contest liability with respect to the claim among the Parties or otherwise.

 

  12.4    

Successors

A successor by law of any Party shall be entitled to the benefits of the indemnification contained in this Section 12.

Section 13. Applicable Law

This Agreement will be construed and the provisions hereof interpreted under and in accordance with Delaware law, without regard for that state’s principles of conflict of laws.

Section 14. Execution in Counterparts

This Agreement may be executed simultaneously in two or more counterparts, each of which taken together will constitute one and the same instrument.

Section 15. Severability

If any provision of this Agreement is held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement will not be affected thereby.

Section 16. Rights Cumulative

The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, that the Parties are entitled to under federal and state laws.

 

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Section 17. Headings

The Table of Contents and headings used in this Agreement are for purposes of reference only and shall not limit or define the meaning of the provisions of this Agreement.

Section 18. Confidentiality

AVIF acknowledges that the identities of the customers of G-WL&A or any of its affiliates (collectively, the “G-WL&A Protected Parties” for purposes of this Section 18), information maintained regarding those customers, and all computer programs and procedures or other information developed by the G-WL&A Protected Parties or any of their employees or agents in connection with G-WL&A’s performance of its duties under this Agreement are the valuable property of the G-WL&A Protected Parties. AVIF agrees that if it comes into possession of any list or compilation of the identities of or other information about the G-WL&A Protected Parties’ customers, or any other information or property of the G-WL&A Protected Parties, other than such information as may be independently developed or compiled by AVIF from information supplied to it by the G-WL&A Protected Parties’ customers who also maintain accounts separate from those Accounts registered by G-WL&A directly with AVIF, AVIF will hold such information or property in confidence and refrain from using, disclosing or distributing any of such information or other property except: (a) with G-WL&A’s prior written consent; or (b) as required by law or judicial process. G-WL&A acknowledges that the identities of the customers of AVIF or any of its affiliates (collectively, the “AVIF Protected Parties” for purposes of this Section 18), information maintained regarding those customers, and all computer programs and procedures or other information developed by the AVIF Protected Parties or any of their employees or agents in connection with AVIF’s performance of its duties under this Agreement are the valuable property of the AVIF Protected Parties. G-WL&A agrees that if it comes into possession of any list or compilation of the identities of or other information about the AVIF Protected Parties’ customers or any other information or property of the AVIF Protected Parties, other than such information as may be independently developed or compiled by G-WL&A from information supplied to it by the AVIF Protected Parties’ customers who also maintain accounts directly with G-WL&A, G-WL&A will hold such information or property in confidence and refrain from using, disclosing or distributing any of such information or other property except: (a) with AVIF’s prior written consent; or (b) as required by law or judicial process. Each party acknowledges that any breach of the agreements in this Section 18 would result in immediate and irreparable harm to the other parties for which there would be no adequate remedy at law and agree that in the event of such a breach, the other parties will be entitled to equitable relief by way of temporary and permanent injunctions, as well as such other relief as any court of competent jurisdiction deems appropriate.

Section 19. Trademarks and Fund Names

(a)     Except as may otherwise be provided in a License Agreement among A I M Management Group Inc., G-WL&A or its designated affiliates, neither G-WL&A nor its designated affiliates or any of their respective affiliates, shall use any trademark, trade name, service mark or

 

25

logo of AVIF, AIM or any of their respective affiliates, or any variation of any such trademark, trade name, service mark or logo, without AVIF’s or AIM’s prior written consent, the granting of which shall be at AVIF’s or AIM’s sole option.

(b)     Except as otherwise expressly provided in this Agreement, neither AVIF, its investment adviser, its principal underwriter, or any affiliates thereof shall use any trademark, trade name, service mark or logo of G-WL&A or any of its affiliates, or any variation of any such trademark, trade name, service mark or logo, without G-WL&A’s prior written consent, the granting of which shall be at G-WL&A’s sole option.

Section 20. Parties to Cooperate

Each party to this Agreement will cooperate with each other party and all appropriate governmental authorities (including, without limitation, the SEC, the NASD and state insurance regulators) and will permit each other and such authorities reasonable access to its books and records (including copies thereof) in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby.

Section 21. Amendments; Need For

No provision of this Agreement may be amended or modified in any manner except by mutual written agreement executed by all parties hereto. The Parties shall, from time to time, review this Agreement to determine the extent to which an amendment thereto may be necessary or appropriate to reflect changes in applicable law or regulation, and shall cooperate in implementing any such amendment in a timely manner, it being understood and agreed to that no such amendment shall take effect except upon mutual written agreement of all Parties as stated above.

Section 22. Force Majeure

Each Party shall be excused from the performance of any of its obligations to the other where such nonperformance is occasioned by any event beyond its control which shall include, without limitation, any applicable order, rule or regulation of any federal, state or local body, agency or instrumentality with jurisdiction, work stoppage, accident, natural disaster, war, acts of terrorism or civil disorder, provided that the Party so excused shall use all reasonable efforts to minimize its nonperformance and overcome, remedy, cure or remove such event as soon as is reasonably practicable, and such performance shall be excused only for so long as, in any given case, the force or circumstances making performance impossible shall exist.

 

26

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in their names and on their behalf by and through their duly authorized officers signing below.

 

      AIM VARIABLE INSURANCE FUNDS

Attest:

  

/s/ Jim A. Coppedge

    

By:

  

/s/ Robert H. Graham

Name:

  

Jim A. Coppedge

    

Name:

  

Robert H. Graham

Title:

  

Assistant Secretary

    

Title:

  

President

      A I M DISTRIBUTORS, INC.

Attest:

  

/s/ Jim A. Coppedge

    

By:

  

/s/ Gene L. Needles

Name:

  

Jim A. Coppedge

    

Name:

  

Gene L. Needles

Title:

  

Assistant Secretary

    

Title:

  

President

      GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY, as Underwriter and on behalf of itself and its separate accounts and its Affiliate

Attest:

  

 

    

By:

  

/s/ Ron Laeyendecker

Name:

  

 

    

Name:

  

Ron Laeyendecker

Title:

  

Vice President

  

        

  

Title:

  

Vice President

 

27

SCHEDULE A

FUNDS AVAILABLE UNDER THE CONTRACTS

 

AIM V.I. Aggressive Growth Fund

AIM V.I. Balanced Fund

AIM V.I. Basic Value Fund

AIM V.I. Blue Chip Fund

AIM V.I. Capital Appreciation Fund

AIM V.I. Capital Development Fund

AIM V.I. Core Equity Fund

AIM V.I. Dent Demographic Trends Fund

AIM V.I. Diversified Income Fund

AIM V.I. Government Securities Fund

AIM V.I. Growth Fund

AIM V.I. High Yield Fund

AIM V.I. International Growth Fund

AIM V.I. Large Cap Growth Fund

AIM V.I. Mid Cap Core Equity Fund

   

AIM V.I. Money Market Fund

AIM V.I. Premier Equity Fund

AIM V.I. Real Estate Fund

AIM V.I. Small Cap Equity Fund

INVESCO VIF – Core Equity Fund (name will be changed to AIM V.I. Core Stock Fund on October 15, 2004)

INVESCO VIF – Dynamics Fund (name will be changed to AIM V.I. Dynamics Fund on October 15, 2004)

INVESCO VIF – Financial Services Fund (name will be changed to AIM V.I. Financial Services Fund on October 15, 2004)

INVESCO VIF – Health Sciences Fund (name will be changed to AIM V.I. Health Sciences Fund on October 15, 2004) INVESCO VIF – Leisure Fund (name will be changed to AIM V.I. Leisure Fund on October 15, 2004)

INVESCO VIF – Small Company Growth Fund (name will be changed to AIM V.I. Small Company Growth Fund on October 15, 2004)

INVESCO VIF – Technology Fund (name will be changed to AIM V.I. Technology Fund on October 15, 2004)

INVESCO VIF – Total Return Fund (name will be changed to AIM V.I. Total Return Fund on October 15, 2004)

INVESCO VIF – Utilities Fund (name will be changed to AIM V.I. Utilities Fund on October 15, 2004)

 

28

SEPARATE ACCOUNTS UTILIZING THE FUNDS

 

CONTRACTS

   

FORM NUMBERS

Future Funds Series Account

   

GTDAMF92 Vol

  

GTGAMF92 ER

  

GTMSG184-1

  

GTSAMF191

COLI VUL – 2 Series Account

    J355

COLI VUL – 7 Series Account

    J350

 

29

SCHEDULE B

AIM’s PRICING ERROR POLICIES

Determination of Materiality

In the event that AIM discovers an error in the calculation of the Fund’s net asset value, the following policies will apply:

If the amount of the error is less than $.01 per share, it is considered immaterial and no adjustments are made.

If the amount of the error is $.01 per share or more, then the following thresholds are applied:

 

  a.

If the amount of the difference in the erroneous net asset value and the correct net asset value is less than .5% of the correct net asset value, AIM will reimburse the affected Fund to the extent of any loss resulting from the error. No other adjustments shall be made.

 

  b.

If the amount of the difference in the erroneous net asset value and the correct net asset value is .5% of the correct net asset value or greater, then AIM will determine the impact of the error to the affected Fund and shall reimburse such Fund (and/or G-WL&A, as appropriate, such as in the event that the error was not discovered until after G-WL&A processed transactions using the erroneous net asset value) to the extent of any loss resulting from the error. To the extent that an overstatement of net asset value per share is detected quickly and G-WL&A has not mailed redemption checks to Participants, G-WL&A and AIM agree to examine the extent of the error to determine the feasibility of reprocessing such redemption transaction (for purposes of reimbursing the Fund to the extent of any such overpayment). In no event shall G-WL&A be liable to Participants for any such adjustments or underpayment amounts unless the error is due to G-WL&A’s own willful misfeasance, bad faith, or gross negligence. A pricing error within categories (a) or (b) above shall be deemed to be “materially incorrect” or constitute a “material error” for purposes of this Agreement.

Reprocessing Cost Reimbursement

To the extent a reprocessing of Participant transactions is required pursuant to paragraph (b), above, AIM shall reimburse G-WL&A for G-WL&A’s reprocessing costs in an amount not to exceed $1.00 per contract affected by $10 or more.

 

30

SCHEDULE C

EXPENSE ALLOCATIONS

 

G-WL&A

 

       

 

AVIF / AIM

 

     
preparing and filing the Account’s registration statement        Preparing and filing the Fund’s registration statement
     
text composition for Account prospectuses and supplements        text composition for Fund prospectuses and supplements
     
text alterations of prospectuses (Account) and supplements (Account)        text alterations of prospectuses (Fund) and supplements (Fund)
     
printing Account and Fund prospectuses and supplements        a camera ready Fund prospectus
     
text composition and printing Account SAIs        text composition and printing Fund SAIs
     
mailing and distributing Account SAIs to policy owners upon request by policy owners        mailing and distributing Fund SAIs to policy owners upon request by policy owners
     
mailing and distributing prospectuses (Account and Fund) and supplements (Account and Fund) to policy owners of record as required by Federal Securities Laws and to prospective purchasers         
     
text composition (Account), printing, mailing, and distributing annual and semi-annual reports for Account (Fund and Account as, applicable)        text composition of annual and semi-annual reports (Fund)
     
text composition, printing, mailing, distributing, and tabulation of proxy statements and voting instruction solicitation materials to policy owners with respect to proxies related to the Account       

text composition, printing, mailing, distributing and tabulation of proxy statements and voting instruction solicitation materials to policy owners with respect to proxies related to the Fund

 

     

If required by G-WLA: preparation, printing and distributing sales material and advertising relating to the Accounts, insofar as such materials relate to the Contracts and filing such materials with and obtaining approval from, the SEC, the NASD, any state insurance regulatory authority, and any other appropriate regulatory authority, to the extent required

 

         

 

31

EX-99.(H)(2) 3 d694125dex99h2.htm EX-99.(H)(2) EX-99.(H)(2)

AMENDMENT NO. 1

PARTICIPATION AGREEMENT

The Participation Agreement (the “Agreement”), dated April 30, 2004, by and among AIM Variable Insurance Funds, a Delaware trust; A I M Distributors, Inc., a Delaware corporation, and GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY, a Colorado life insurance company (“G-WL&A”), on behalf of itself and each of its segregated asset accounts listed in Schedule A hereto, as the parties hereto may amend from time to time (each, an “Account,” and collectively, the “Accounts”); and as the principal underwriter of the Contracts (“UNDERWRITER”), is hereby amended as follows:

Schedule A of the Agreement is hereby deleted in its entirety and replaced with the following:

SCHEDULE A

FUNDS AVAILABLE UNDER THE CONTRACTS

 

AIM V.I. Aggressive Growth Fund

AIM V.I. Basic Balanced Fund

AIM V.I. Basic Value Fund

AIM V.I. Blue Chip Fund

AIM V.I. Capital Appreciation Fund

AIM V.I. Capital Development Fund

AIM V.I. Core Equity Fund

AIM V.I. Demographic Trends Fund

AIM V.I. Diversified Income Fund

AIM V.I. Government Securities Fund

AIM V.I. Growth Fund

AIM V.I. High Yield Fund

AIM V.I. International Growth Fund

AIM V.I. Large Cap Growth Fund

   

AIM V.I. Mid Cap Core Equity Fund

AIM V.I. Money Market Fund

AIM V.I. Premier Equity Fund

AIM V.I. Real Estate Fund

AIM V.I. Small Cap Equity Fund

AIM V.I. Core Stock Fund

AIM V.I. Dynamics Fund

AIM V.I. Financial Services Fund

AIM V.I. Global Health Care Fund

AIM V.I. Leisure Fund

AIM V.I. Small Company Growth Fund

AIM V.I. Technology Fund

AIM V.I. Total Return Fund

AIM V.I. Utilities Fund

SEPARATE ACCOUNTS UTILIZING THE FUNDS

 

CONTRACTS

   

FORM NUMBERS

Future Funds Series Account

   

GTDAMF92 Vol

  

GTGAMF92 ER

  

GTMSG184-1

  

GTSAMF191

COLI VUL – 2 Series Account

   

J355

COLI VUL – 7 Series Account

   

J350

Charles Schwab & Co., Inc.

   

J444MMFAPP

Schwab Variable Annuity

   

J444SAAPP

  

J434VAROR

All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.

Effective date: April 30, 2004

 

      AIM VARIABLE INSURANCE FUNDS

Attest:

  

/s/ Jim A. Coppedge

    

By:

  

/s/ Robert H. Graham

Name:

  

Jim A. Coppedge

    

Name:

  

Robert H. Graham

Title:

  

Assistant Secretary

    

Title:

  

President

      A I M DISTRIBUTORS, INC.

Attest:

  

/s/ P. Michelle Grace

    

By:

  

/s/ Gene L. Needles

Name:

  

P. Michelle Grace

    

Name:

  

Gene L. Needles

Title:

  

Assistant Secretary

    

Title:

  

President

   

        

   GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Attest:

  

/s/ Ryan Logsdon

    

By:

  

/s/ Chris Bergeon

Name:

  

Ryan Logsdon

    

Name:

  

Chris Bergeon

Title:

  

Sr. Associate Counsel

    

Title:

  

VP

 

2

EX-99.(H)(5) 4 d694125dex99h5.htm EX-99.(H)(5) EX-99.(H)(5)

AMENDMENT NO. 4

PARTICIPATION AGREEMENT

The Participation Agreement (the “Agreement”), dated April 30, 2004, by and among AIM Variable Insurance Funds, a Delaware trust; A I M Distributors, Inc., a Delaware corporation, and GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY, a Colorado life insurance company (“G-WL&A”), on behalf of itself and each of its segregated asset accounts listed in Schedule A hereto, as the parties hereto may amend from time to time (each, an “Account,” and collectively, the “Accounts”); and as the principal underwriter of the Contracts (“UNDERWRITER”), is hereby amended as follows:

WHEREAS, effective April 30, 2010, AIM Variable Insurance Funds was renamed AIM Variable Insurance Funds (Invesco Variable Insurance Funds). All references to AIM Variable Insurance Funds is hereby deleted and replaced with AIM Variable Insurance Funds (Invesco Variable Insurance Funds);

WHEREAS, on March 31, 2008, A I M Distributors, Inc. was renamed Invesco Aim Distributors, Inc. Effective April 30, 2010, Invesco Aim Distributors, Inc. was renamed Invesco Distributors, Inc. All references to Invesco Aim Distributors, Inc. is hereby deleted and replaced with Invesco Distributors, Inc.

Schedule A of the Agreement is hereby deleted in its entirety and replaced with the following:

SCHEDULE A

FUNDS AVAILABLE UNDER THE CONTRACTS

ALL SERIES I SHARES AND SERIES II SHARES OF AIM VARIABLE INSURANCE FUNDS (INVESCO VARIABLE INSURANCE FUNDS)

SEPARATE ACCOUNTS UTILIZING THE FUNDS

ALL SEPARATE ACCOUNTS UTILIZING THE FUNDS

CONTRACTS FUNDED BY THE SEPARATE ACCOUNTS

ALL CONTRACTS FUNDED BY THE SEPARATE ACCOUNTS

All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.

Effective date: April 30, 2010

 

     

AIM VARIABLE INSURANCE FUNDS

(INVESCO VARIABLE INSURANCE FUNDS)

Attest:

  

/s/ Peter Davidson

  

        

  

By:

  

/s/ John M. Zerr

Name:

  

Peter Davidson

    

Name:

  

John M. Zerr

Title:

  

Assistant Secretary

    

Title:

  

Senior Vice President

     

INVESCO DISTRIBUTORS, INC.

Attest:

  

/s/ Peter Davidson

    

By:

  

/s/ John S. Cooper

Name:

  

Peter Davidson

    

Name:

  

John S. Cooper

Title:

  

Assistant Secretary

    

Title:

  

President

      GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

Attest:

  

/s/ Michael Siedschlag

    

By:

  

/s/ Susan Gile

Name:

  

Michael Siedschlag

    

Name:

  

Susan Gile

Title:

  

BOLI/COLI Fund Manager

    

Title:

  

V.P. Individual Markets

 EX-99.(H)(6) 5 d694125dex99h6.htm EX-99.(H)(6) EX-99.(H)(6)

AMENDMENT NO. 5

PARTICIPATION AGREEMENT

The Participation Agreement (the “Agreement”), dated April 30, 2014, by and among AIM Variable Insurance Funds (Invesco Variable Insurance Funds), a Delaware trust; Invesco Distributors, Inc., a Delaware corporation, and GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY, a Colorado life insurance company (“GWL&A”), on behalf of itself and each of its segregated asset accounts listed in Schedule A hereto, as the parties hereto may amend from time to time (each, an “Account,” and collectively, the “Accounts”); and as the principal underwriter of the Contracts (“UNDERWRITER”), is hereby amended as follows:

Schedule A of the Agreement is hereby deleted in its entirety and replaced with the following:

SCHEDULE A

FUNDS AVAILABLE UNDER THE CONTRACTS

ALL SERIES I AND SERIES II SHARES OF AIM VARIABLE INSURANCE FUNDS (INVESCO VARIABLE INSURANCE FUNDS)

SEPARATE ACCOUNTS UTILIZING THE FUNDS AND CONTRACTS FUNDED BY THE SEPARATE ACCOUNTS

 

CONTRACTS

   

FORM NUMBERS

Future Funds Series Account

   

GTDAMF92 Vol

  

GTGAMF92 ER

  

GTSMF184-1

  

GTSAMF191

COLI VUL  – 2 Series Account

   

J355

COLI VUL – 4 Series Account

   

J500

COLI VUL – 7 Series Account

   

J350

COLI VUL – 14 Series Account

   

ICC13-J600/J600

Charles Schwab & Co., Inc.

   

J444MMFAPP

Schwab Variable Annuity

   

J444SAAPP

  

J434VAROR

 

1

PAA-AMD5-GREATWEST-PPLI_INVESCO

All other terms and provisions of the Agreement not amended herein shall remain in full force and effect.

Effective date: November 6, 2013.

 

     

AIM VARIABLE INSURANCE FUNDS

(INVESCO VARIABLE INSURANCE FUNDS)

Attest:

  

/s/ Veronica Castillo

  

        

  

By:

  

/s/ John M. Zerr

Name:

  

Veronica Castillo

    

Name:

  

John M. Zerr

Title:

  

Assistant Secretary

    

Title:

  

Senior Vice President

     

INVESCO DISTRIBUTORS, INC.

Attest:

  

/s/ Veronica Castillo

    

By:

  

/s/ Brian Thorp

Name:

  

Veronica Castillo

    

Name:

  

Brian Thorp

Title:

  

Assistant Secretary

    

Title:

  

Vice President

      GREAT-WEST LIFE & ANNUlTY INSURANCE COMPANY

Attest:

  

/s/ Andy Blomquist

    

By:

  

/s/ Susan Gile

Name:

  

Andy Blomquist

    

Name:

  

Susan Gile

Title:

  

Senior Product Associate

    

Title:

  

V.P. Individual Markets

 

2

EX-99.(H)(7) 6 d694125dex99h7.htm EX-99.(H)(7) EX-99.(H)(7)

 

FUND PARTICIPATION AGREEMENT

TABLE OF CONTENTS

 

ARTICLE I.

   

Sale of Fund Shares

      3  

ARTICLE II.

   

Representations and Warranties

      7  

ARTICLE III.

   

Prospectuses and Proxy Statements; Voting

      11  

ARTICLE IV.

   

Sales Material and Information

      13  

ARTICLE V.

   

Fees and Expenses

      15  

ARTICLE VI.

   

Diversification and Qualification

      16  

ARTICLE VII.

   

Potential Conflicts and Compliance With

Mixed and Shared Funding Exemptive Order

      19  

ARTICLE VIII.

   

Indemnification

      23  

ARTICLE IX.

   

Applicable Law

      32  

ARTICLE X.

   

Termination

      32  

ARTICLE XI.

   

Notices

      35  

ARTICLE XII.

   

Miscellaneous

      36  

SCHEDULE A

   

Contracts

      40  

SCHEDULE B

   

Designated Portfolios

      41  

SCHEDULE C

   

Reports per Section 6.6

      42  

SCHEDULE D

   

Expenses

      44  

SCHEDULE E

   

Administrative Services

      47  

PARTICIPATION AGREEMENT

Among

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

THE ALGER AMERICAN FUND,

FRED ALGER MANAGEMENT, INC.,

and

FRED ALGER & COMPANY, INCORPORATED

THIS AGREEMENT, made and entered into as of this 13th day of September, 1999 by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter “GWL&A”), a Colorado life insurance company, on its own behalf and on behalf of its Separate Account COLI VUL Series Account 2 and the FutureFunds Series Account (collectively, the “Account”); THE ALGER AMERICAN FUND, a business trust organized under the laws of the Commonwealth of Massachusetts (hereinafter the “Fund”); FRED ALGER MANAGEMENT, INC. (hereinafter the “Adviser”), a New York Corporation; and FRED ALGER & COMPANY, INCORPORATED (hereinafter the “Distributor”), a Delaware corporation.

WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the “Variable Insurance Products”) to be offered by insurance companies, including GWL&A, which have entered into participation agreements similar to this Agreement (hereinafter “Participating Insurance Companies”); and

WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a “Portfolio” and representing the interest in a particular managed portfolio of securities and other assets; and

 

1

WHEREAS, the Fund has obtained an order from the Securities and Exchange Commission (hereinafter the “SEC”), dated February 17, 1989 (File No. 812-7076), granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the “1940 Act”) and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance separate accounts of life insurance companies that may or may not be affiliated with one another and qualified pension and retirement plans (“Qualified Plans”) (hereinafter the “Mixed and Shared Funding Exemptive Order”); and

WHEREAS, the Fund is registered as an open-end management investment company under the 1940 Act and shares of the Portfolio(s) are registered under the Securities Act of 1933, as amended (hereinafter the “1933 Act”); and

WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and

WHEREAS, the Distributor is duly registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, (the “1934 Act”) and is a member in good standing of the National Association of Securities Dealers, Inc. (the “NASD”); and

WHEREAS, GWL&A has registered certain variable life and annuity contracts supported wholly or partially by the Account (the “Contracts”) under the 1933 Act and said Contracts are listed in Schedule A attached hereto and incorporated herein by reference, as such Schedule may be amended from time to time by mutual written agreement; and

WHEREAS, the Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of GWL&A, under the insurance laws of the State of Colorado, to set aside and invest assets attributable to the Contracts; and

 

2

WHEREAS, GWL&A has registered the Account as a unit investment trust under the 1940 Act and has registered the securities deemed to be issued by the Account under the 1933 Act; and

WHEREAS, to the extent permitted by applicable insurance laws and regulations, GWL&A intends to purchase shares in the Portfolio(s) listed in Schedule B attached hereto and incorporated herein by reference, as such Schedule may be amended from time to time by mutual written agreement (the “Designated Portfolio(s)”), on behalf of the Account to fund the Contracts, and the Fund is authorized to sell such shares to unit investment trusts such as the Account at net asset value; and

WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Account also intends to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the “Unaffiliated Funds”) on behalf of the Account to fund the Contracts; and

NOW, THEREFORE, in consideration of their mutual promises, GWL&A, the Fund, the Distributor and the Adviser agree as follows:

 

ARTICLE I.

Sale of Fund Shares

1.1.    The Fund agrees to sell to GWL&A those shares of the Designated Portfolio(s) which the Account orders, executing such orders on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the order for the shares of the Portfolios. For purposes of this Section 1.1, GWL&A shall be the designee of the Fund for receipt of such orders and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such order by 10:00 a.m. Eastern time on the next following Business Day. “Business Day” shall mean any day on which the New York Stock Exchange is open for trading and on which the Fund calculates its net asset value pursuant to the rules of the SEC.

 

3

1.2.    The Fund agrees to make shares of the Designated Portfolio(s) available for purchase at the applicable net asset value per share by GWL&A on behalf of the Account on those days on which the Fund calculates its Designated Portfolio(s)’ net asset value pursuant to rules of the SEC, and the Fund shall calculate such net asset value on each day which the New York Stock Exchange is open for trading. Notwithstanding the foregoing, the Board of Trustees of the Fund (hereinafter the “Board”) may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Board acting in good faith and in light of its fiduciary duties under federal and any applicable state laws, necessary in the best interests of the shareholders of such Portfolio.

1.3.    The Fund will not sell shares of the Designated Portfolio(s) to any other Participating Insurance Company separate account unless an agreement containing provisions substantially the same as Sections 2.1, 3.5, 3.6, 3.7, and Article VII of this Agreement is in effect to govern such sales.

1.4.    The Fund agrees to redeem for cash, on GWL&A’s request, any full or fractional shares of the Fund held by GWL&A, executing such requests on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the request for redemption, except that the Fund reserves the right to suspend the right of redemption, consistent with Section 22 (e) of the 1940 Act and any applicable rules thereunder. Requests for redemption identified by GWL&A, or its agent, as being in connection with surrenders, annuitizations, or death benefits under the Contracts, upon prior written notice, may be executed within seven (7) calendar days after receipt by the Fund or its designee of the requests for redemption. This Section 1.4 may be amended, in writing, by the parties consistent with the requirements of the 1940 Act and interpretations thereof. For purposes of this Section 1.4, GWL&A shall be the designee of the Fund for receipt of requests for redemption and receipt by such designee shall constitute receipt by the Fund, provided that the

 

4

Fund receives notice of any such request for redemption by 10:00 a.m. Eastern time on the next following Business Day.

1.5.    The Parties hereto acknowledge that the arrangement contemplated by this Agreement is not exclusive; the Fund’s shares may be sold to other Participating Insurance Companies (subject to Section 1.3 and Article VI hereof) and the cash value of the Contracts may be invested in other investment companies.

1.6.    GWL&A shall pay for Fund shares by 5:30 p.m. Eastern time on the next Business Day after an order to purchase Fund shares is made in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or by a credit for any shares redeemed the same day as the purchase.

1.7.    The Fund shall pay and transmit the proceeds of redemptions of Fund shares by 5:30 p.m. Eastern Time on the next Business Day after a redemption order is received in accordance with Section 1.4 hereof, except that payment may be delayed if, for example, the Fund’s cash position so requires or if extraordinary market conditions exist, but in no event shall payment be delayed for a period greater than is permitted by the 1940 Act. Payment shall be in federal funds transmitted by wire and/or a credit for any shares purchased the same day as the redemption.

1.8.    Issuance and transfer of the Fund’s shares will be by book entry only. Stock certificates will not be issued to GWL&A or the Account. Shares ordered from the Fund will be recorded in an appropriate title for the Account or the appropriate sub-account of the Account.

1.9.    The Fund shall furnish same day notice (by wire or telephone, followed by written confirmation) to GWL&A of any income, dividends or capital gain distributions payable on the Designated Portfolio(s)’ shares. GWL&A hereby elects to receive all such income dividends and capital gain distributions as are payable on the Portfolio shares in additional shares of that Portfolio.

 

5

GWL&A reserves the right to revoke this election and to receive all such income dividends and capital gain distributions in cash. The Fund shall notify GWL&A by the end of the next following Business Day of the number of shares so issued as payment of such dividends and distributions.

1.10.    The Fund shall make the net asset value per share (“NAV”) for each Designated Portfolio available to GWL&A on each Business Day as soon as reasonably practical after NAV is calculated and shall use its best efforts to make such NAV available by 6:00 p.m. Eastern time. In the event of a material error in the computation of a Designated Portfolio’s NAV or any dividend or capital gain distribution (each, a “pricing error”), which results in adjustments to Contractowner’s accounts, the Adviser or the Fund shall immediately notify GWL&A as soon as possible after the discovery of the error. Such notification may be verbal, but shall be confirmed promptly in writing in accordance with Article XI of this Agreement. A pricing error shall be corrected as follows: (a) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than $0.01 per share, but less than 1/2 of 1% of the Designated Portfolio’s NAV at the time of the error, then the Adviser shall either reimburse the Designated Portfolio for any loss, after taking into consideration any positive effect of such error and no adjustments to Contractowner accounts need be made, or, in the Adviser’s discretion, the procedures described in item (b) shall be followed; and (b) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than 1/2 of 1% of the Designated Portfolio’s NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any unrecovered excess redemption proceeds (as defined below) and shall reimburse GWL&A for its reasonable costs of adjustments made to correct Contractowner accounts in accordance with the provisions of Schedule D. If an adjustment is necessary to correct an error of category (b) above, which has caused Contractowners to receive less than the amount of shares or redemption proceeds to which they are entitled, or is elected by the Adviser in connection with an error of category (a), the number of shares of the applicable account of each such Contractowners will be adjusted and the amount of any underpayments on redemption transactions not corrected by such adjustment shall be credited by the Fund to GWL&A for crediting of such amounts to the applicable Contractowners’ accounts. In the event an NAV pricing error results in a Contractowner’s receiving redemption proceeds in an

 

6

amount which is $500 or more in excess of the amount that such Contractowner would have received with the correct NAV (such amount being the “ excess redemption proceeds”), then the effect of such overpayment shall be corrected, to the extent possible, by an adjustment to the number of shares in the Contractowner’s account and GWL&A agrees that it will make a good faith attempt to collect such excess proceeds not accounted for by such adjustment. Any overpayments that have not yet been paid to Contractowners will be remitted to the Fund by GWL&A upon notification by the Adviser of such overpayment. In no event shall GWL&A be liable to Contractowners for any such adjustments or underpayment amounts, other than amounts paid by the Fund or Adviser for crediting Contractowner amounts, other than amounts paid by the Fund or Adviser for crediting to Contractowner Accounts as set forth above. No provision in this section 1.10 shall require the adjustment of a Contractowner’s account if the adjustment required for that account is less then $25. A pricing error within categories (a) or (b) above shall be deemed to be “materially incorrect” or constitute a “material error” for purposes of this Agreement.

The standards set forth in this Section 1.10 are based on the Parties’ understanding of the views expressed by the staff of the SEC as of the date of this Agreement. In the event the views of the SEC staff are later modified or superseded by SEC or judicial interpretation, the parties shall amend the foregoing provisions of this Agreement to comport with the appropriate applicable standards, on terms mutually satisfactory to all Parties.

ARTICLE II.   Representations and Warranties

2.1.      GWL&A represents and warrants that the Contracts and the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act; that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with state insurance suitability requirements. GWL&A further represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset

 

7

account under Section 10-7-401, et. seq. of the Colorado Insurance Law and has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts and that it will maintain such registration for so long as any Contracts are outstanding as required by applicable law.

2.2.    The Fund represents and warrants that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of the shares of the Designated Portfolio(s).

2.3.    The Fund reserves the right to adopt a plan pursuant to Rule 12b-l under the 1940 Act and to impose an asset-based or other charge to finance distribution expenses as permitted by applicable law and regulation. In any event, the Fund and Adviser agree to comply with applicable provisions and SEC staff interpretations of the 1940 Act to assure that the investment advisory or management fees paid to the Adviser by the Fund are in accordance with the requirements of the 1940 Act. To the extent that the Fund decides to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its Board, a majority of whom are not interested persons of the Fund, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses.

2.4.    The Fund represents and warrants that it will make every effort to ensure that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with the insurance and other applicable laws of the State of Colorado and any other applicable state to the extent required to perform this Agreement. The Fund further represents and warrants that it will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with the insurance laws of the State of Colorado and all applicable state insurance

 

8

and securities laws. The Fund shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by applicable law. GWL&A and the Fund will endeavor to mutually cooperate with respect to the implementation of any modifications necessitated by any change in state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a “Law Change”), and to keep each other informed of any Law Change that becomes known to either party. In the event of a Law Change, the Fund agrees that, except in those circumstances where the Fund has advised GWL&A that its Board of Directors has determined that implementation of a particular Law Change is not in the best interest of all of the Fund’s shareholders with an explanation regarding why such action is lawful, any action required by a Law Change will be taken.

2.5.    The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the Commonwealth of Massachusetts and that it does and will comply in all material respects with the 1940 Act.

2.6.    The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of New York and any applicable state and federal securities laws.

2.7.    The Distributor represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of Delaware and any applicable state and federal securities laws.

2.8.    The Fund and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by one or more blanket fidelity bonds or similar coverage for the benefit of the Fund in an amount not less than the

 

9

minimal coverage required by Rule 17g-l under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bonds shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company.

2.9.    The Fund will provide GWL&A with as much advance notice as is reasonably practicable of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated Portfolio(s) and consult with GWL&A in order to implement any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expenses by implementing them in conjunction with regular annual updates of the prospectus for the Contracts. The Fund agrees to share equitably in expenses incurred by GWL&A as a result of actions taken by the Fund, consistent with the allocation of expenses contained in Schedule D attached hereto and incorporated herein by reference.

2.10.  GWL&A represents and warrants, for purposes other than diversification under Section 817 of the Internal Revenue Code of 1986 as amended (“the Code”), that the Contracts are currently and at the time of issuance will be treated as life insurance or annuity contracts, as applicable, under applicable provisions of the Code, and that it will make every effort to maintain such treatment and that it will notify the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, GWL&A represents and warrants that the Account is a “segregated asset account” and that interests in the Account are offered exclusively through the purchase of or transfer into a “variable contract” within the meaning of such terms under Section 817 of the Code and the regulations thereunder. GWL&A will use every effort to continue to meet such definitional requirements, and it will notify the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. GWL&A represents and warrants that

 

10

it will not purchase Fund shares with assets derived from tax-qualified retirement plans except, indirectly, through Contracts purchased in connection with such plans.

 

ARTICLE III.

Prospectuses and Proxy Statements; Voting

3.1.      Annually, or more often, should an amended prospectus be filed within 12 months of its predecessor, the Adviser or Distributor shall provide GWL&A with as many copies of the Fund’s current prospectus for the Designated Portfolio(s) as GWL&A may reasonably request for marketing purposes (including distribution to Contractowners with respect to new sales of a Contract), with expenses to be borne in accordance with Schedule D hereof. If requested by GWL&A in lieu thereof, the Adviser, Distributor or Fund shall provide such documentation (including a camera-ready copy and computer diskette of the current prospectus for the Designated Portfolio(s)) and other assistance as is reasonably necessary in order for GWL&A once each year (or more frequently if the prospectuses for the Designated Portfolio(s) are amended) to have the prospectus for the Contracts and the Fund’s prospectus for the Designated Portfolio(s) printed together in one document. The Fund and Adviser agree that the prospectus (and semi-annual and annual reports) for the Designated Portfolio(s) will describe only the Designated Portfolio(s) and will not name or describe any other portfolios or series that may be in the Fund unless required by law.

3.2.      If applicable state or federal laws or regulations require that the Statement of Additional Information (“SAI”) for the Fund be distributed to all Contractowners, then the Fund, Distributor and/or the Adviser shall provide GWL&A with copies of the Fund’s SAI or documentation thereof for the Designated Portfolio(s) in such quantities, with expenses to be borne in accordance with Schedule D hereof, as GWL&A may reasonably require to permit timely distribution thereof to Contractowners. The Adviser, Distributor and/or the Fund shall also provide SAIs to any Contractowner or prospective owner who requests such SAI from the Fund (although it is anticipated that such requests will be made to GWL&A).

 

11

3.3.      The Fund, Distributor and/or Adviser shall provide GWL&A with copies of the Fund’s proxy material, reports to stockholders and other communications to stockholders for the Designated Portfolio(s) in such quantity, with expenses to be borne in accordance with Schedule D hereof, as GWL&A may reasonably require to permit timely distribution thereof to Contractowners.

3.4.      It is understood and agreed that, except with respect to information regarding GWL&A provided in writing by that party, GWL&A is not responsible for the content of the prospectus or SAI for the Designated Portfolio(s). It is also understood and agreed that, except with respect to information regarding the Fund, the Distributor, the Adviser or the Designated Portfolio(s) provided in writing by the Fund, the Distributor or the Adviser, neither the Fund, the Distributor nor Adviser are responsible for the content of the prospectus or SAI for the Contracts.

3.5.      If and to the extent required by law GWL&A shall:

 

  (i)

solicit voting instructions from Contractowners;

 

 

(ii)

vote the Designated Portfolio(s) shares held in the Account in accordance with instructions received from Contractowners: and

 

 

(iii)

vote Designated Portfolio shares held in the Account for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contractowners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. GWL&A reserves the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law and the Mixed and Shared Funding Exemptive Order.

3.6.      GWL&A shall be responsible for assuring that each of its separate accounts holding shares of a Designated Portfolio calculates voting privileges and the Fund shall provide GWL&A with appropriate assistance in fulfilling such responsibility. The Fund agrees to promptly notify

 

12

GWL&A of any changes of interpretations or amendments of the Mixed and Shared Funding Exemptive Order.

3.7.      The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders, and in particular the Fund will either provide for annual meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not to require such meetings) or, as the Fund currently intends, comply with Section 16(c) of the 1940 Act (although the Fund is not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in accordance with the SEC’s interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the Commission may promulgate with respect thereto.

ARTICLE IV.  Sales Material and Information

4.1.      GWL&A shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that GWL&A, respectively, develops or proposes to use and in which the Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers or the Distributor is named in connection with the Contracts, at least ten (10) Business Days prior to its use. No such material shall be used if the Fund objects to such use within five (5) Business Days after receipt of such material. If sales literature or promotional material goes beyond naming the Fund, a Designated Portfolio, the Adviser or the Distributor, GWL&A shall obtain from the Fund or its designee affirmative written approval to use such material.

4.2.      GWL&A shall not give any information or make any representations or statements on behalf of or concerning the Fund, the Adviser or the Distributor in connection with the sale of the Contracts other than the information or representations contained in the registration statement, prospectus or SAI for the Fund shares, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by the Fund, Distributor or Adviser, except with the permission of the Fund, Distributor or Adviser.

 

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4.3.      The Fund or the Adviser shall furnish, or shall cause to be furnished, to GWL&A, a copy of each piece of sales literature or other promotional material in which GWL&A and/or those separate account(s) connected with the transactions contemplated by this Agreement, is named at least ten (10) Business Days prior to its use. No such material shall be used if GWL&A objects to such use within five (5) Business Days after receipt of such material.

4.4.      The Fund, the Distributor and the Adviser shall not give any information or make any representations on behalf of GWL&A or concerning GWL&A, the Account, or the Contracts other than the information or representations contained in a registration statement, prospectus or SAI for the Contracts, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by GWL&A or its designee, except with the permission of GWL&A.

4.5.      The Fund will provide to GWL&A at least one complete copy of all registration statements, prospectuses, SAIs, sales literature and other promotional materials which refer to GWL&A and/or those separate accounts connected with the transactions contemplated by this Agreement, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Designated Portfolio(s), contemporaneously with the filing of such document(s) with the SEC or NASD or other regulatory authorities.

4.6.      GWL&A will provide to the Fund at least one complete copy of all registration statements, prospectuses, SAIs, reports, solicitations for voting instructions, sales literature and other promotional materials which refer to GWL&A, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Account, contemporaneously with the filing of such document(s) with the SEC, NASD, or other regulatory authority.

 

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4.7.      For purposes of Articles IV and VIII, the phrase “sales literature and other promotional material” includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., online networks such as the Internet or other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and shareholder reports, and proxy materials (including solicitations for voting instructions) and any other material constituting sales literature or advertising under the NASD rules, the 1933 Act or the 1940 Act.

4.8.      At the request of any party to this Agreement, each other party will make available to the other party’s independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party’s obligations under this Agreement.

ARTICLE V.   Fees and Expenses

5.1.      The Fund and the Adviser shall pay no fee or other compensation to GWL&A under this Agreement, other than pursuant to Schedule E attached hereto and incorporated herein by reference, and GWL&A shall pay no fee or other compensation to the Fund or Adviser under this Agreement, although the parties hereto will bear certain expenses in accordance with Schedule D, Articles III, V, and other provisions of this Agreement.

5.2.      All expenses incident to performance by the Fund, the Distributor and the Adviser under this Agreement shall be paid by the appropriate party, as further provided in Schedule D.

 

15

The Fund shall see to it that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent required, in accordance with applicable state laws prior to their sale.

5.3.      The parties shall bear the expenses of routine annual distribution (mailing costs) of the Fund’s prospectus and distribution (mailing costs) of the Fund’s proxy materials and reports to owners of Contracts offered by GWL&A, in accordance with Schedule D.

5.4.      The Fund, the Distributor and the Adviser acknowledge that a principal feature of the Contracts is the Contractowner’s ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract’s cash value between funds and portfolios. The Fund, the Distributor and the Adviser agree to not interfere with GWL&A in facilitating the operation of the Account and the Contracts as described in the prospectus for the Contracts, including but not limited to not interfering with facilitating transfers between Unaffiliated Funds.

5.5.      GWL&A agrees to provide certain administrative services, specified in Schedule E attached hereto and incorporated herein by reference, in connection with the arrangements contemplated by this Agreement. The parties acknowledge and agree that the services referred to in this Section 5.5 are recordkeeping, shareholder communication, and other transaction facilitation and processing, and related administrative services only and are not the services of an underwriter or a principal underwriter of the Fund and that GWL&A is not an underwriter for the shares of the Designated Portfolio(s), within the meaning of the 1933 Act or the 1940 Act.

ARTICLE VI.  Diversification and Qualification

6.1.      The Fund, Distributor and Adviser represent and warrant that the Fund and each Designated Portfolio thereof will at all times comply with Section 817(h) of the Code and Treasury

 

16

Regulation §1.817-5, as amended from time to time, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Fund and the Distributor agree that shares of the Designated Portfolio(s) will be sold only to Participating Insurance Companies and their separate accounts and to Qualified Plans.

6.2.      No shares of any Designated Portfolio of the Fund will be sold to the general public.

6.3.      The Fund, the Distributor and the Adviser represent and warrant that the Fund and each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect.

6.4.      The Fund, Distributor or Adviser will notify GWL&A immediately upon having a reasonable basis for believing that the Fund or any Designated Portfolio has ceased to comply with the aforesaid Section 817(h) diversification or Subchapter M qualification requirements or might not so comply in the future.

6.5.      Without in any way limiting the effect of Sections 8.2, 8.3 and 8.4 hereof and without in any way limiting or restricting any other remedies available to GWL&A, the Adviser or Distributor will pay all costs associated with or arising out of any failure of the Fund or any Designated Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to GWL&A and any federal income taxes or tax penalties and interest thereon (or “toll

 

17

charges” or exactments or amounts paid in settlement) incurred by GWL&A with respect to itself or owners of its Contracts in connection with any such failure.

6.6.      The Fund at the Fund’s expense shall provide GWL&A or its designee with reports certifying compliance with the aforesaid Section 817(h) diversification and Subchapter M qualification requirements, at the times provided for and substantially in the form attached hereto as Schedule C and incorporated herein by reference; provided, however, that providing such reports does not relieve the Fund of its responsibility for such compliance or of its liability for any non- compliance.

6.7.      GWL&A agrees that if the Internal Revenue Service (“IRS”) asserts in writing in connection with any governmental audit or review of GWL&A or, to GWL&A’s knowledge, or any Contractowner that any Designated Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or GWL&A otherwise becomes aware of any facts that could give rise to any claim against the Fund, Distributor or Adviser as a result of such a failure or alleged failure:

(a)    GWL&A shall promptly notify the Fund, the Distributor and the Adviser of such assertion or potential claim;

(b)    GWL&A shall consult with the Fund, the Distributor and the Adviser as to how to minimize any liability that may arise as a result of such failure or alleged failure;

(c)    GWL&A shall use its best efforts to minimize any liability of the Fund, the Distributor and the Adviser resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent;

 

18

(d)    any written materials to be submitted by GWL&A to the IRS, any Contractowner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by GWL&A to the Fund, the Distributor and the Adviser (together with any supporting information or analysis) within at least two (2) business days prior to submission;

(e)  GWL&A shall provide the Fund, the Distributor and the Adviser with such cooperation as the Fund, the Distributor and the Adviser shall reasonably request (including, without limitation, by permitting the Fund, the Distributor and the Adviser to review the relevant books and records of GWL&A) in order to facilitate review by the Fund, the Distributor and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure;

(f)  GWL&A shall not with respect to any claim of the IRS or any Contractowner that would give rise to a claim against the Fund, the Distributor and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any allowable administrative or judicial appeals, without the express written consent of the Fund, the Distributor and the Adviser, which shall not be unreasonably withheld; provided that, GWL&A shall not be required to appeal any adverse judicial decision unless the Fund and the Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Fund, the Distributor and the Adviser shall bear the costs and expenses, including reasonable attorney’s fees, incurred by GWL&A in complying with this clause (f).

 

ARTICLE VII.

               Potential Conflicts and Compliance With

    

    Mixed and Shared Funding Exemptive Order      

7.1.    The Board will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the contract owners of all separate accounts investing in the Fund

 

19

and determine what action, if any, should be taken in response to such conflict. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of contract owners. The Board shall promptly inform GWL&A if it determines that an irreconcilable material conflict exists and the implications thereof.

7.2.      GWL&A will report any potential or existing conflicts of which it is aware to the Board. GWL&A will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by GWL&A to inform the Board whenever contract owner voting instructions are to be disregarded. Such responsibilities shall be carried out by GWL&A with a view only to the interests of its Contractowners.

7.3.      If it is determined by a majority of the Board, or a majority of its directors who are not interested persons of the Fund, the Distributor, the Adviser or any sub-adviser to any of the Designated Portfolios (the “Independent Directors”), that a material irreconcilable conflict exists, GWL&A and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Directors), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any Designated Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another portfolio of the Fund, or submitting the question whether such segregation

 

20

should be implemented to a vote of all affected contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account.

7.4.      If a material irreconcilable conflict arises because of a decision by GWL&A to disregard contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, GWL&A may be required, at the Fund’s election, to withdraw the Account’s investment in the Fund and terminate this Agreement; provided, however that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six month period the Adviser, the Distributor and the Fund shall continue to accept and implement orders by GWL&A for the purchase (and redemption) of shares of the Fund.

7.5.      If a material irreconcilable conflict arises because a particular state insurance regulator’s decision applicable to GWL&A conflicts with the majority of other state regulators, then GWL&A will withdraw the Account’s investment in the Fund and terminate this Agreement within six months after the Board informs GWL&A in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. Until the end of the foregoing six month period, the Fund shall continue to accept and implement orders by GWL&A for the purchase (and redemption) of shares of the Fund.

7.6.      For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the disinterested members of the Board shall determine whether any proposed action adequately

 

21

remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. GWL&A shall not be required by Section 7.3 to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contractowners affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then GWL&A will withdraw the Account’s investment in the Fund and terminate this Agreement within six (6) months after the Board informs GWL&A in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the Independent Directors.

7.7.      If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall be deemed modified to the extent necessary also to comply with the terms and conditions contained in such Rule(s) as so amended or adopted.

7.8      GWL&A shall at least annually submit to the Board of Trustees of the Fund such reports, materials or data as the Trustees may reasonably request so that the Trustees may fully carry out the obligations imposed upon them by the Mixed and Shared Funding Exemptive Order, and said reports, materials and data shall be submitted more frequently if deemed appropriate by the Board of Trustees.

 

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ARTICLE VIII.     Indemnification

8.1.      Indemnification By GWL&A

8.1(a). GWL&A agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their respective officers and directors or trustees and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.1) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of GWL&A) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages or liabilities (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund’s shares or the Contracts and:

 

  (i)

arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or prospectus or SAI covering the Contracts or contained in the Contracts or sales literature or other promotional material for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to GWL&A by or on behalf of the Adviser, Distributor or Fund for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or Fund shares; or

 

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature or other promotional material of the Fund not supplied by GWL&A or persons under its control) or wrongful conduct of GWL&A or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or

 

  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature or other promotional material of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be

 

23

 

stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund by or on behalf of GWL&A; or

 

  (iv)

arise as a result of any failure by GWL&A to provide the services and furnish the materials under the terms of this Agreement; or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by GWL&A in this Agreement or arise out of or result from any other material breach of this Agreement by GWL&A, including without limitation Section 2.11 and Section 6.7 hereof,

as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof.

8.1(b). GWL&A shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties.

8.1(c). GWL&A shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified GWL&A in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify GWL&A of any such claim shall not relieve GWL&A from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that GWL&A has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, GWL&A shall be entitled to participate, at its own expense, in the defense of such action. GWL&A also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from GWL&A to such party of GWL&A’s election to assume the defense

 

24

thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and GWL&A will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

8.1(d). The Indemnified Parties will promptly notify GWL&A of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund.

8.2.      Indemnification by the Adviser

8.2(a). The Adviser agrees to indemnify and hold harmless GWL&A and its directors and officers and each person, if any, who controls GWL&A within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.2) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund’s shares or the Contracts and:

 

  (i)

arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, the Distributor or the Adviser (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Adviser, the Distributor or the Fund by or on behalf of GWL&A for use in the registration statement, prospectus or SAI for the Fund or in sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or the Fund shares; or

 

25

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Fund, the Distributor or the Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or

 

  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon and in conformity with information furnished in writing to GWL&A by or on behalf of the Adviser, the Distributor or the Fund; or

 

  (iv)

arise as a result of any failure by the Fund, the Distributor or the Adviser to provide the services and furnish the materials under the terms of this Agreement (including a failure to comply with the diversification and other qualification requirements of Article VI of this Agreement); or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by the Fund, the Distributor or the Adviser in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser, the Distributor or the Fund; or

 

  (vi)

arise out of or result from the materially incorrect or untimely calculation or reporting by the Fund, the Distributor or the Adviser of the daily net asset value per share or dividend or capital gain distribution rate;

as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI hereof.

8.2(b). The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified

 

26

Party’s reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties.

8.2(c).  The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

8.2(d).  GWL&A agrees to promptly notify the Adviser of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account.

8.3.     Indemnification By the Fund

8.3(a). The Fund agrees to indemnify and hold harmless GWL&A and its directors and officers and each person, if any, who controls GWL&A within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.3) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the

 

27

written consent of the Fund) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may be required to pay or become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements, are related to the operations of the Fund and:

 

  (i)

arise as a result of any failure by the Fund to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or

 

  (ii)

arise out of or result from any material breach of any representation and/or warranty made by the Fund in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund;

as limited by and in accordance with the provisions of Sections 8.3(b) and 8.3(c) hereof.

8.3(b).  The Fund shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties.

8.3(c).  The Fund shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Fund in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Fund of any such claim shall not relieve it from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Fund has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Fund will be entitled to participate, at its own expense, in the defense thereof. The Fund shall also be entitled to

 

28

assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Fund to such party of the Fund’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Fund will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

8.3(d). GWL&A each agrees to promptly notify the Fund of the commencement of any litigation or proceeding against itself or any of its respective officers or directors in connection with the Agreement, the issuance or sale of the Contracts, the operation of the Account, or the sale or acquisition of shares of the Fund.

8.3(e). It is understood and agreed that no liability of the Fund pursuant to this section 8.3 shall extend to the assets of any portfolio of the Fund other than the Designated Portfolio(s), or where the failure or breach giving rise to such liability relates to a single Designated Portfolio, to the assets of any other Designated Portfolio.

8.4.      Indemnification by the Distributor

8.4(a). The Distributor agrees to indemnify and hold harmless GWL&A and its directors and officers and each person, if any, who controls GWL&A within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.4) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of the Distributor) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund’s shares or the Contracts and:

 

  (i)

arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund,

 

29

 

Adviser or Distributor (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Adviser, the Distributor or Fund by or on behalf of GWL&A for use in the registration statement or SAI or prospectus for the Fund or in sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or Fund shares; or

 

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI, sales literature or other promotional material for the Contracts not supplied by the Distributor or persons under its control) or wrongful conduct of the Fund, the Distributor or Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or

 

  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon and in conformity with information furnished in writing to GWL&A by or on behalf of the Adviser, the Distributor or Fund; or

 

  (iv)

arise as a result of any failure by the Fund, Adviser or Distributor to provide the services and furnish the materials under the terms of this Agreement (including a failure to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by the Fund, Adviser or Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund, Adviser or Distributor; or

 

  (vi)

arise out of or result from the materially incorrect or untimely calculation or reporting by the Fund, the Distributor or the Adviser of the daily net asset value per share or dividend or capital gain distribution rate;

 

30

as limited by and in accordance with the provisions of Sections 8.4(b) and 8.4(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Distributor specified in Article VI hereof.

8.4(b). The Distributor shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties.

8.4(c) The Distributor shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Distributor in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Distributor of any such claim shall not relieve the Distributor from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Distributor has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Distributor will be entitled to participate, at its own expense, in the defense thereof. The Distributor also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Distributor to such party of the Distributor’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Distributor will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

 

31

8.4(d) GWL&A agrees to promptly notify the Distributor of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account.

ARTICLE IX.      Applicable Law

9.1.      Except as provided in Section 9.2., this Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of Colorado, without regard to the Colorado Conflict of Laws provisions.

9.2.      This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the SEC may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith.

ARTICLE X.   Termination

 

  10.1.

This Agreement shall terminate:

(a) at the option of any party, with or without cause, with respect to some or all Portfolios, upon six (6) months advance written notice delivered to the other parties; provided, however, that such notice shall not be given earlier than six (6) months following the date of this Agreement; or

(b) at the option of GWL&A by written notice to the other parties with respect to any Portfolio based upon GWL&A’s reasonable determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; or

(c) at the option of GWL&A by written notice to the other parties with respect to any Portfolio in the event any of the Portfolio’s shares are not registered, issued or sold in accordance with applicable state and/ or federal law or such law precludes the use of such shares as the underlying investment media of the Contracts issued or to be issued by GWL&A; or

 

32

(d) at the option of the Fund, Distributor or Adviser in the event that formal administrative proceedings are instituted against GWL&A by the NASD, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body if, in each case, the Fund, Distributor or Adviser, as the case may be, reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of GWL&A to perform its obligations under this Agreement; or

(e) at the option of GWL&A in the event that formal administrative proceedings are instituted against the Fund, the Distributor or the Adviser by the NASD, the SEC, or any state securities or insurance department or any other regulatory body, if GWL&A reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of the Fund, the Distributor or the Adviser to perform their obligations under this Agreement; or

(f) at the option of GWL&A by written notice to the Fund with respect to any Portfolio if GWL&A reasonably believes that the Portfolio will fail to meet the Section 817(h) diversification requirements or Subchapter M qualifications specified in Article VI hereof; or

(g) at the option of either the Fund, the Distributor or the Adviser, if (i) the Fund, Distributor or Adviser, respectively, shall determine, in its sole judgment reasonably exercised in good faith, that GWL&A has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on GWL&A’s ability to perform its obligations under this Agreement, (ii) the Fund, Distributor or Adviser notifies GWL&A of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by GWL&A and any other changes in circumstances since the giving of such a notice, the determination of the Fund, Distributor or Adviser shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or

(h) at the option of either GWL&A, if (i) GWL&A shall determine, in its sole judgment reasonably exercised in good faith, that the Fund, Distributor or Adviser has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Fund’s, Distributor’s or Adviser’s ability to perform its obligations under this Agreement, (ii) GWL&A notifies the Fund, Distributor or Adviser, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Fund, Distributor or Adviser and any other changes in circumstances since the giving of such a notice, the determination of GWL&A shall continue to apply on the sixtieth

 

33

(60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or

(i) at the option of the Fund, the Adviser or the Distributor by written notice to GWL&A, in the event that the terminating party reasonably believes that the Contracts will cease to qualify as life insurance or annuity contracts, as applicable, under the Code or that a definitional requirement referred to in Section 2.11 will not be met, or if the Contracts are not registered, issued or sold in accordance with applicable state and/or federal law; or

(j) at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the “defaulting party”) other than as described in 10.1(a)-(i); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non-defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party.

10.2.   Notice Requirement. No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore,

(a) in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties;

(b) in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e), 10.1(i) or 10.1(j) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and

(c) in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c), 10.1(f) or 10.1(i), the prior written notice shall be given in advance of the effective date of termination, which date shall be determined by the party sending the notice.

10.3.    Effect of Termination. Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or GWL&A to meet Section 817(h) of the Code

 

34

diversification requirements, the Fund, the Distributor and the Adviser shall, at the option of GWL&A, continue to make available additional shares of the Designated Portfolio(s) pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as “Existing Contracts”). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolio(s), redeem investments in the Designated Portfolio(s) and/or invest in the Designated Portfolio(s) upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement.

10.3. Surviving Provisions. Notwithstanding any termination of this Agreement, each party’s obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement.

ARTICLE XI. Notices

Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party.

If to the Fund:

The Alger American Fund

1 World Trade Center, Suite 9333

New York, New York 10048

Attention: Gregory S. Duch

If to GWL&A:

Great-West Life & Annuity Insurance Company

8515 East Orchard Road

Englewood, CO 80111

Attention: Vice President, Institutional Insurance

 

35

If to the Adviser:

Fred Alger Management, Inc.

1 World Trade Center, Suite 9333

New York, New York 10048

Attention: Gregory S. Duch

If to the Distributor:

Fred Alger Management, Inc.

1 World Trade Center, Suite 9333

New York, New York 10048

Attention: Gregory S. Duch

ARTICLE XII. Miscellaneous

12.1.      Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected party until such time as such information may come into the public domain. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary.

12.2.      The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect.

12.3.      This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument.

12.4.      If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby.

 

36

12.5.      Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, the NASD and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the Colorado Insurance Commissioner with any information or reports in connection with services provided under this Agreement which such Commissioner may request in order to ascertain whether the variable annuity operations of GWL&A are being conducted in a manner consistent with the Colorado Variable Annuity Regulations and any other applicable law or regulations.

12.6.      Any controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be settled by arbitration in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

12.7.      The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws.

12.8.      This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto.

12.9      The Fund is a business trust organized under the laws of the Commonwealth of Massachusetts and under a Declaration of Trust, to which reference is hereby made, a copy of which is on file at the office of the Secretary of State of the Commonwealth of Massachusetts, and to any and all amendments thereto so filed or hereafter filed. The obligations of the Fund entered into hereunder in the name of the Fund or on behalf thereof by any of its Trustees, officers, employees or agents are undertaken not individually but in such capacities, and are not binding

 

37

upon any of the Trustees, officers, employees or shareholders of the Fund personally, but bind only the assets of the Fund or of the Designated Portfolio(s).

12.10.  GWL&A agrees that the obligations assumed by the Distributor and the Adviser pursuant to this Agreement shall be limited in any case to the Distributor and Adviser and their respective assets and GWL&A shall not seek satisfaction of any such obligation from the shareholders of the Distributor or the Adviser, the Directors, officers, employees or agents of the Distributor or Adviser, or any of them.

12.11.  The Fund, the Distributor and the Adviser agree that the obligations assumed by GWL&A pursuant to this Agreement shall be limited in any case to GWL&A and its assets and neither the Fund, Distributor nor Adviser shall seek satisfaction of any such obligation from the shareholders of GWL&A, the directors, officers, employees or agents of GWL&A, or any of them, except to the extent permitted under this Agreement.

12.12.  No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Adviser and the Fund, and the Distributor and the Fund.

 

38

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by its duly authorized representative and its seal to be hereunder affixed hereto as of the date specified below.

 

                                                         

  

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

  

                         

 

By its authorized officer,

    
 

By:

  

                      

    
 

Title:

    
 

Date: 9/13/99

    
 

THE ALGER AMERICAN FUND

 

By its authorized officer,

  

                                                 

  
 

By:

  

/s/ Gregory Dual

    
 

Title: Treasurer

    
 

Date: 9-13-99

    
 

FRED ALGER MANAGEMENT, INC.

    
 

By its authorized officer,

    
 

By:

  

/s/ Gregory Dual

    
 

Title: Executive Vice President

    
 

Date: 9-13-99

    
 

FRED ALGER & COMPANY, INCORPORATED

  
 

By its authorized officer,

    
 

By:

  

/s/ Gregory Dual

    
 

Title: Executive Vice President

    
 

Date: 9-13-99

    

 

39

SCHEDULE A

 

                 Contracts

    Form Numbers

Group Tax Deferred Annuity

    GTDAMF92 Vol

Group Tax Deferred Annuity

    GTDAMF92 ER

 

40

SCHEDULE B

Designated Portfolios

Alger American MidCap Portfolio

Alger American Balanced Portfolio

 

41

SCHEDULE C

Reports per Section 6.6

With regard to the reports relating to the quarterly testing of compliance with the requirements of Section 817(h) and Subchapter M under the Internal Revenue Code (the “Code”) and the regulations thereunder, the Fund shall provide within twenty (20) Business Days of the close of the calendar quarter a report to GWL&A in the Form D1 attached hereto and incorporated herein by reference, regarding the status under such sections of the Code of the Designated Portfolio(s), and if necessary, identification of any remedial action to be taken to remedy non-compliance.

With regard to the reports relating to the year-end testing of compliance with the requirements of Subchapter M of the Code, referred to hereinafter as “RIC status,” the Fund will provide the reports on the following basis: (i) the last quarter’s quarterly reports can be supplied within the 20-day period, and (ii) a year-end report will be provided 45 days after the end of the calendar year. However, if a problem with regard to RIC status, as defined below, is identified in the third quarter report, on a weekly basis, starting the first week of December, additional interim reports will be provided specially addressing the problems identified in the third quarter report.

If any interim report memorializes the cure of the problem, subsequent interim reports will not be required.

A problem with regard to RIC status is defined as any violation of the following standards, as referenced to the applicable sections of the Code:

(a) Less than ninety percent of gross income is derived from sources of income specified in Section 851(b)(2);

(b) Thirty percent or greater gross income is derived from the sale or disposition of assets specified in Section 851(b)(3);

(c) Less than fifty percent of the value of total assets consists of assets specified in Section 851(b)(4)(A); and

(d) No more than twenty-five percent of the value of total assets is invested in the securities of one issuer, as that requirement is set forth in Section 851(b)(4)(B).

 

42

FORM C1

CERTIFICATE OF COMPLIANCE

For the quarter ended:                             

I,                         , a duly authorized officer, director or agent of              Fund hereby swear and affirm that                                          Fund is in compliance with all requirements of Section 817(h) and Subchapter M of the Internal Revenue Code (the “Code”) and the regulations thereunder as required in the Fund Participation Agreement among Great-West Life & Annuity Insurance Company, and                                          other than the exceptions discussed below:

 

Exceptions

  

                         

   

Remedial Action

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

If no exception to report, please indicate “None.”
    

Signed this        day of       ,         .

    

 

    

(Signature)

 

      By:  

                      

  

                         

   

(Type or Print Name and Title/Position)

SCHEDULE D

EXPENSES

The Fund and/or the Distributor and/or Adviser, and GWL&A will coordinate the functions and pay the costs of the completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Fund’s share of the total costs determined according to the number of pages of the Fund’s respective portions of the documents.

Item   Function   Party Responsible for Coordination   Party Responsible for Expense
Mutual Fund Prospectus   Printing of combined prospectuses   GWL&A   Fund, Distributor or Adviser, as applicable
    Fund, Distributor or Adviser shall supply GWL&A with such numbers of the Designated Portfolio(s) prospectus(es) as GWL&A shall reasonably request   GWL&A   Fund, Distributor or Adviser, as applicable
    Distribution to New and Inforce Clients   GWL&A   GWL&A
    Distribution to Prospective Clients   GWL&A   GWL&A
Product Prospectus   Printing for Inforce Clients   GWL&A   GWL&A
    Printing for Prospective Clients   GWL&A   GWL&A
    Distribution to New and Inforce Clients   GWL&A   GWL&A
    Distribution to Prospective Clients   GWL&A   GWL&A
Item   Function   Party Responsible for Coordination   Party Responsible for Expense
Mutual Fund Prospectus Update & Distribution   If Required by Fund, Distributor or Adviser   Fund, Distributor or Adviser   Fund, Distributor or Adviser
    If Required by GWL&A   GWL&A   GWL&A
Product Prospectus Update & Distribution   If Required by Fund, Distributor or Adviser   GWL&A   Fund, Distributor or Adviser

 

44

Item   Function   Party Responsible for Coordination   Party Responsible for Expense
    If Required by GWL&A   GWL&A   GWL&A
Mutual Fund SAI   Printing   Fund, Distributor or Adviser   Fund, Distributor or Adviser
    Distribution   GWL&A   GWL&A
Product SAI   Printing   GWL&A   GWL&A
    Distribution   GWL&A   GWL&A
Item   Function   Party Responsible for Coordination   Party Responsible for Expense
Proxy Material for Mutual Fund:   Printing if proxy required by Law   Fund, Distributor or Adviser   Fund, Distributor or Adviser
    Distribution (including labor) if proxy required by Law   GWL&A   Fund, Distributor or Adviser
    Printing & distribution if required by GWL&A   GWL&A   GWL&A

    

 

Item   Function   Party Responsible for Coordination   Party Responsible for Expense
Mutual Fund Annual & Semi-Annual Report   Printing of combined reports   GWL&A   Fund, Distributor or Adviser
    Distribution   GWL&A   GWL&A
Other communication to New and Prospective clients   If Required by the Fund, Distributor or Adviser   GWL&A   Fund, Distributor or Adviser
    If Required by GWL&A   GWL&A   GWL&A
Item   Function   Party Responsible for Coordination   Party Responsible for Expense
Other communication to inforce   Distribution (including labor and printing) if required by the Fund, Distributor or Adviser   GWL&A   Fund, Distributor or Adviser
    Distribution (including labor and printing) if required by GWL&A   GWL&A   GWL&A

    

 

 

45

Item   Function   Party Responsible for Coordination   Party Responsible for Expense
Errors in Share Price calculation pursuant to Section 1.10   Cost of error to participants   GWL&A   Fund or Adviser
    Cost of administrative work to correct error   GWL&A   Fund or Adviser
Operations of the Fund   All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of   shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by   the fund pursuant to any Rule 12b-1 plan   Fund, Distributor or Adviser   Fund or Adviser
Operations of the Account   Federal registration of units of separate account (24f-2 fees)   GWL&A   GWL&A

 

46

SCHEDULE E

Administrative Services

 

A.

GWL&A, or an affiliate, will provide the properly registered and licensed personnel and systems needed for all customer service and support – for both fund and annuity information and questions – including:

respond to Contractowner inquiries;

delivery of prospectus – both fund and annuity;

entry of initial and subsequent orders;

transfer of cash to insurance company and/or funds;

explanations of fund objectives and characteristics;

entry of transfers between funds;

fund balance and allocation inquiries;

mail fund prospectus.

 

B.

GWL&A, or an affiliate, will communicate all purchase, withdrawal, and exchange orders it receives from customers to GWL&A who will transmit them to each fund.

Administrative Service Fee

For the services, GWL&A shall receive a fee of 0.25% per annum applied to the average daily value of the shares of the fund held by GWL&A’s customers, payable by the Adviser directly to GWL&A, such payments being due and payable within 15 (fifteen) days after the last day of the month to which such payment relates.

The Fund will calculate and GWL&A will verify the asset balance for each day on which the fee is to be paid pursuant to this Agreement with respect to each Designated Portfolio.

p:\legal\bbyr\msa\gen fundp msa

 

47

EX-99.(H)(8) 7 d694125dex99h8.htm EX-99.(H)(8) EX-99.(H)(8)

AMENDMENT DATED AUGUST 17, 2006 TO FUND PARTICIPATION

AGREEMENT

WHEREAS, GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A), THE ALGER AMERICAN FUND (the “Fund”), FRED ALGER MANAGEMENT, INC. (the “Adviser”), and FRED ALGER&COMPANY, INCORPORATED (the “Distributor”), collectively the Parties, entered into a Fund Participation Agreement dated September 13, 1999, as amended (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire and agree to add First Great-West Life & Annuity Insurance Company (“First GWL&A”), a New York life insurance company, on its own behalf and on behalf of its Separate Account FutureFunds II Series Account as a Party to the Agreement; and

WHEREAS, the Parties desire and agree to add GWL&A ’ s Separate Account FutureFunds II Series Account to the Agreement.

WHEREAS, The Parties desire and agree to amend the Agreement by deleting in its entirety Schedule B of the Agreement and replacing it with the Schedule B attached hereto.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows :

1. First GWL&A is hereby added as a Party to the Agreement. The Parties to the Agreement, including First GWL&A, agree that each representation, warranty, covenant, condition and other provision of the Agreement that is applicable to GWL&A shall also be applicable to First GWL&A, with the following changes: (i) the “Account” was established under the insurance laws of the State of New York;

(ii)

references in Section 2.1 to certain Colorado laws shall be changed to Section 4240, et. seq., of New York Insurance Law ; (iii) references in Section 2.4 to certain Colorado insurance laws shall be to the insurance laws of the State of New York; and

(iv)

references in Section 12.5 to the Colorado Insurance Commissioner shall be changed to the New York Insurance Commissioner. The rights and obligations of

GWL&A and First GWL&A under the Agreement as amended hereby shall be

several and not joint.

 

  1.

GWL&A’s Separate Account FutureFunds II Series Account is hereby added to the

  2.

Agreement.

  2.

The tenth WHEREAS of the Agreement is hereby deleted in its entirety and replaced with the following:

WHEREAS, to the extent required by applicable law, GWL&A has registered the Account as a unit investment trust under the 1940 Act and has registered the securities deemed to be issued by the Account under the 1933 Act; and

4. Section 2.1 of the Agreement is hereby deleted in its entirety and replaced with the following:

2.1 GWL&A represents that the Contracts and the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act, or are exempt from registration; that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with the state insurance suitability requirements. GWL&A further represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset account under Section 10-7-401. et. seq. of the Colorado Insurance Law, and to the extent required by applicable law has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts and that it will maintain such registration for so long as any Contracts are outstanding as required by applicable law.

5. Schedule B of the Agreement is hereby replaced in its entirety with Schedule B as

attached and incorporated by reference to this Amendment.

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 17th day of August, 2006.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

By its authorized officer,

 

By:

    

Title:

  

Senior Vice President

Date:

  

8-17-06

FIRST GREAT-WEST LIFE AND ANNUITY

By its authorized officer,

 

By:

    

Title:

  

Senior Vice President

Date:

  

8-17-06

UITY INSURANCE COMPANY

THE ALGER AMERICAN FUND

B’

By its authorized officer,

By:

Title: Secretary Date: 08/17/00

FRED ALGER MANAGEMENT, INC.

By its authorized officer,

 

By:

    

Title:

  

COO

Date:

  

08/17/06

FRED ALGER & COMPANY, INCORPORATED

By its authorized officer,

 

By:

    

Title:

  

COO

Date:

  

08/17/06

SCHEDULE B

Designated Portfolios

All portfolios or series of the Fund that are available and open to new investors on or after the effective date of this Agreement.

 

FUND PARTICIPATION AGREEMENT

TABLE OF CONTENTS

 

ARTICLE I.

   

Sale of Fund Shares

      3  

ARTICLE II.

   

Representations and Warranties

      7  

ARTICLE III.

   

Prospectuses and Proxy Statements; Voting

      11  

ARTICLE IV.

   

Sales Material and Information

      13  

ARTICLE V.

   

Fees and Expenses

      15  

ARTICLE VI.

   

Diversification and Qualification

      16  

ARTICLE VII.

   

Potential Conflicts and Compliance With

Mixed and Shared Funding Exemptive Order

      19  

ARTICLE VIII.

   

Indemnification

      23  

ARTICLE IX.

   

Applicable Law

      32  

ARTICLE X.

   

Termination

      32  

ARTICLE XI.

   

Notices

      35  

ARTICLE XII.

   

Miscellaneous

      36  

SCHEDULE A

   

Contracts

      40  

SCHEDULE B

   

Designated Portfolios

      41  

SCHEDULE C

   

Reports per Section 6.6

      42  

SCHEDULE D

   

Expenses

      44  

SCHEDULE E

   

Administrative Services

      47  

PARTICIPATION AGREEMENT

Among

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

THE ALGER AMERICAN FUND,

FRED ALGER MANAGEMENT, INC.,

and

FRED ALGER & COMPANY, INCORPORATED

 

THIS AGREEMENT, made and entered into as of this 13th day of September, 1999 by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter “GWL&A”), a Colorado life insurance company, on its own behalf and on behalf of its Separate Account COLI VUL Series Account 2 and the FutureFunds Series Account (collectively, the “Account”); THE ALGER AMERICAN FUND, a business trust organized under the laws of the Commonwealth of Massachusetts (hereinafter the “Fund”); FRED ALGER MANAGEMENT, INC. (hereinafter the “Adviser”), a New York Corporation; and FRED ALGER & COMPANY, INCORPORATED (hereinafter the “Distributor”), a Delaware corporation.

WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the “Variable Insurance Products”) to be offered by insurance companies, including GWL&A, which have entered into participation agreements similar to this Agreement (hereinafter “Participating Insurance Companies”); and

WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a “Portfolio” and representing the interest in a particular managed portfolio of securities and other assets; and

 

1

WHEREAS, the Fund has obtained an order from the Securities and Exchange Commission (hereinafter the “SEC”), dated February 17, 1989 (File No. 812-7076), granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the “1940 Act”) and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance separate accounts of life insurance companies that may or may not be affiliated with one another and qualified pension and retirement plans (“Qualified Plans”) (hereinafter the “Mixed and Shared Funding Exemptive Order”); and

WHEREAS, the Fund is registered as an open-end management investment company under the 1940 Act and shares of the Portfolio(s) are registered under the Securities Act of 1933, as amended (hereinafter the “1933 Act”); and

WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and

WHEREAS, the Distributor is duly registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, (the “1934 Act”) and is a member in good standing of the National Association of Securities Dealers, Inc. (the “NASD”); and

WHEREAS, GWL&A has registered certain variable life and annuity contracts supported wholly or partially by the Account (the “Contracts”) under the 1933 Act and said Contracts are listed in Schedule A attached hereto and incorporated herein by reference, as such Schedule may be amended from time to time by mutual written agreement; and

WHEREAS, the Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of GWL&A, under the insurance laws of the State of Colorado, to set aside and invest assets attributable to the Contracts; and

 

2

WHEREAS, GWL&A has registered the Account as a unit investment trust under the 1940 Act and has registered the securities deemed to be issued by the Account under the 1933 Act; and

WHEREAS, to the extent permitted by applicable insurance laws and regulations. GWL&A intends to purchase shares in the Portfolio(s) listed in Schedule B attached hereto and incorporated herein by reference, as such Schedule may be amended from time to time by mutual written agreement (the “Designated Portfolio(s)”), on behalf of the Account to fund the Contracts, and the Fund is authorized to sell such shares to unit investment trusts such as the Account at net asset value; and

WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Account also intends to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the “Unaffiliated Funds”) on behalf of the Account to fund the Contracts; and

NOW, THEREFORE, in consideration of their mutual promises, GWL&A, the Fund, the Distributor and the Adviser agree as follows:

ARTICLE I.             Sale of Fund Shares

1.1.      The Fund agrees to sell to GWL&A those shares of the Designated Portfolio(s) which the Account orders, executing such orders on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the order for the shares of the Portfolios. For purposes of this Section 1.1, GWL&A shall be the designee of the Fund for receipt of such orders and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such order by 10:00 a.m. Eastern time on the next following Business Day. “Business Day” shall mean any day on which the New York Stock Exchange is open for trading and on which the Fund calculates its net asset value pursuant to the rules of the SEC.

 

3

1.2.      The Fund agrees to make shares of the Designated Portfolio(s) available for purchase at the applicable net asset value per share by GWL&A on behalf of the Account on those days on which the Fund calculates its Designated Portfolio(s)’ net asset value pursuant to rules of the SEC. and the Fund shall calculate such net asset value on each day which the New York Stock Exchange is open for trading. Notwithstanding the foregoing, the Board of Trustees of the Fund (hereinafter the “Board”) may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Board acting in good faith and in light of its fiduciary duties under federal and any applicable state laws, necessary in the best interests of the shareholders of such Portfolio.

1.3.      The Fund will not sell shares of the Designated Portfolio(s) to any other Participating Insurance Company separate account unless an agreement containing provisions substantially the same as Sections 2.1, 3.5, 3.6, 3.7, and Article VII of this Agreement is in effect to govern such sales.

1.4.      The Fund agrees to redeem for cash, on GWL&A’s request, any full or fractional shares of the Fund held by GWL&A, executing such requests on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the request for redemption, except that the Fund reserves the right to suspend the right of redemption, consistent with Section 22 (e) of the 1940 Act and any applicable rules thereunder. Requests for redemption identified by GWL&A, or its agent, as being in connection with surrenders, annuitizations, or death benefits under the Contracts, upon prior written notice, may be executed within seven (7) calendar days after receipt by the Fund or its designee of the requests for redemption. This Section 1.4 may be amended, in writing, by the parties consistent with the requirements of the 1940 Act and interpretations thereof. For purposes of this Section 1.4, GWL&A shall be the designee of the Fund for receipt of requests for redemption and receipt by such designee shall constitute receipt by the Fund, provided that the

 

4

Fund receives notice of any such request for redemption by 10:00 am. Eastern time on the next following Business Day.

1.5.      The Parties hereto acknowledge that the arrangement contemplated by this Agreement is not exclusive; the Fund’s shares may be sold to other Participating Insurance Companies (subject to Section 1.3 and Article VI hereof) and the cash value of the Contracts may be invested in other investment companies.

1.6.      GWL&A shall pay for Fund shares by 5:30 p.m. Eastern time on the next Business Day after an order to purchase Fund shares is made in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or by a credit for any shares redeemed the same day as the purchase.

1.7.      The Fund shall pay and transmit the proceeds of redemptions of Fund shares by 5:30 p.m. Eastern Time on the next Business Day after a redemption order is received in accordance with Section 1.4 hereof, except that payment may be delayed if, for example, the Fund’s cash position so requires or if extraordinary market conditions exist, but in no event shall payment be delayed for a period greater than is permitted by the 1940 Act. Payment shall be in federal funds transmitted by wire and/or a credit for any shares purchased the same day as the redemption.

1.8.      Issuance and transfer of the Fund’s shares will be by book entry only. Stock certificates will not be issued to GWL&A or the Account. Shares ordered from the Fund will be recorded in an appropriate title for the Account or the appropriate sub-account of the Account.

1.9.      The Fund shall furnish same day notice (by wire or telephone, followed by written confirmation) to GWL&A of any income, dividends or capital gain distributions payable on the Designated Portfolio(s)’ shares. GWL&A hereby elects to receive all such income dividends and capital gain distributions as are payable on the Portfolio shares in additional shares of that Portfolio.

 

5

GWL&A reserves the right to revoke this election and to receive all such income dividends and capital gain distributions in cash. The Fund shall notify GWL&A by the end of the next following Business Day of the number of shares so issued as payment of such dividends and distributions.

1.10.      The Fund shall make the net asset value per share (“NAV”) for each Designated Portfolio available to GWL&A on each Business Day as soon as reasonably practical after NAV is calculated and shall use its best efforts to make such NAV available by 6:00 p.m. Eastern time. In the event of a material error in the computation of a Designated Portfolio’s NAV or any dividend or capital gain distribution (each, a “pricing error”), which results in adjustments to Contractowner’s accounts, the Adviser or the Fund shall immediately notify GWL&A as soon as possible after the discovery of the error. Such notification may be verbal, but shall be confirmed promptly in writing in accordance with Article XI of this Agreement. A pricing error shall be corrected as follows: (a) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than $0.01 per share, but less than 1/2 of 1% of the Designated Portfolio’s NAV at the time of the error, then the Adviser shall either reimburse the Designated Portfolio for any loss, after taking into consideration any positive effect of such error and no adjustments to Contractowner accounts need be made, or, in the Adviser’s discretion, the procedures described in item (b) shall be followed; and (b) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than 1/2 of 1% of the Designated Portfolio’s NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any unrecovered excess redemption proceeds (as defined below) and shall reimburse GWL&A for its reasonable costs of adjustments made to correct Contractowner accounts in accordance with the provisions of Schedule D. If an adjustment is necessary to correct an error of category (b) above, which has caused Contractowners to receive less than the amount of shares or redemption proceeds to which they are entitled, or is elected by the Adviser in connection with an error of category (a), the number of shares of the applicable account of each such Contractowners will be adjusted and the amount of any underpayments on redemption transactions not corrected by such adjustment shall be credited by the Fund to GWL&A for crediting of such amounts to the applicable Contractowners’ accounts. In the event an NAV pricing error results in a Contractowner’s receiving redemption proceeds in an

 

6

amount which is $500 or more in excess of the amount that such Contractowner would have received with the correct NAV (such amount being the “excess redemption proceeds”), then the effect of such overpayment shall be corrected, to the extent possible, by an adjustment to the number of shares in the Contractowner’s account and GWL&A agrees that it will make a good faith attempt to collect such excess proceeds not accounted for by such adjustment. Any overpayments that have not yet been paid to Contractowners will be remitted to the Fund by GWL&A upon notification by the Adviser of such overpayment. In no event shall GWL&A be liable to Contractowners for any such adjustments or underpayment amounts, other than amounts paid by the Fund or Adviser for crediting Contractowner amounts, other than amounts paid by the Fund or Adviser for crediting to Contractowner Accounts as set forth above. No provision in this section 1.10 shall require the adjustment of a Contractowner’s account if the adjustment required for that account is less then $25. A pricing error within categories (a) or (b) above shall be deemed to be “materially incorrect” or constitute a “material error” for purposes of this Agreement.

The standards set forth in this Section 1.10 are based on the Parties’ understanding of the views expressed by the staff of the SEC as of the date of this Agreement. In the event the views of the SEC staff are later modified or superseded by SEC or judicial interpretation, the parties shall amend the foregoing provisions of this Agreement to comport with the appropriate applicable standards, on terms mutually satisfactory to all Parties.

ARTICLE II. Representations and Warranties

2.1.      GWL&A represents and warrants that the Contracts and the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act; that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with state insurance suitability requirements. GWL&A further represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset

 

7

account under Section 10-7-401. et. seq. of the Colorado Insurance Law and has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts and that it will maintain such registration for so long as any Contracts are outstanding as required by applicable law.

2.2.      The Fund represents and warrants that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act. the 1934 Act, and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of the shares of the Designated Portfolio(s).

2.3.      The Fund reserves the right to adopt a plan pursuant to Rule 12b-1 under the 1940 Act and to impose an asset-based or other charge to finance distribution expenses as permitted by applicable law and regulation. In any event, the Fund and Adviser agree to comply with applicable provisions and SEC staff interpretations of the 1940 Act to assure that the investment advisory or management fees paid to the Adviser by the Fund are in accordance with the requirements of the 1940 Act. To the extent that the Fund decides to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its Board, a majority of whom are not interested persons of the Fund, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses.

2.4.      The Fund represents and warrants that it will make every effort to ensure that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with the insurance and other applicable laws of the State of Colorado and any other applicable state to the extent required to perform this Agreement. The Fund further represents and warrants that it will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with the insurance laws of the State of Colorado and all applicable state insurance

 

8

and securities laws. The Fund shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by applicable law. GWL&A and the Fund will endeavor to mutually cooperate with respect to the implementation of any modifications necessitated by any change in state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a “Law Change”), and to keep each other informed of any Law Change that becomes known to either party. In the event of a Law Change, the Fund agrees that, except in those circumstances where the Fund has advised GWL&A that its Board of Directors has determined that implementation of a particular Law Change is not in the best interest of all of the Fund’s shareholders with an explanation regarding why such action is lawful, any action required by a Law Change will be taken.

2.5.      The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the Commonwealth of Massachusetts and that it does and will comply in all material respects with the 1940 Act.

2.6.      The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of New York and any applicable state and federal securities laws.

2.7.      The Distributor represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of Delaware and any applicable state and federal securities laws.

2.8.      The Fund and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by one or more blanket fidelity bonds or similar coverage for the benefit of the Fund in an amount not less than the

 

9

minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bonds shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company.

2.9.      The Fund will provide GWL&A with as much advance notice as is reasonably practicable of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated Portfolio(s) and consult with GWL&A in order to implement any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expenses by implementing them in conjunction with regular annual updates of the prospectus for the Contracts. The Fund agrees to share equitably in expenses incurred by GWL&A as a result of actions taken by the Fund, consistent with the allocation of expenses contained in Schedule D attached hereto and incorporated herein by reference.

2.10.      GWL&A represents and warrants, for purposes other than diversification under Section 817 of the Internal Revenue Code of 1986 as amended (“the Code”), that the Contracts are currently and at the time of issuance will be treated as life insurance or annuity contracts, as applicable, under applicable provisions of the Code, and that it will make every effort to maintain such treatment and that it will notify the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition. GWL&A represents and warrants that the Account is a “segregated asset account” and that interests in the Account are offered exclusively through the purchase of or transfer into a “variable contract” within the meaning of such terms under Section 817 of the Code and the regulations thereunder. GWL&A will use every effort to continue to meet such definitional requirements, and it will notify the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. GWL&A represents and warrants that

 

10

it will not purchase Fund shares with assets derived from tax-qualified retirement plans except, indirectly, through Contracts purchased in connection with such plans.

ARTICLE III.             Prospectuses and Proxy Statements; Voting

3.1.      Annually, or more often, should an amended prospectus be filed within 12 months of its predecessor, the Adviser or Distributor shall provide GWL&A with as many copies of the Fund’s current prospectus for the Designated Portfolio(s) as GWL&A may reasonably request for marketing purposes (including distribution to Contractowners with respect to new sales of a Contract), with expenses to be borne in accordance with Schedule D hereof. If requested by GWL&A in lieu thereof, the Adviser, Distributor or Fund shall provide such documentation (including a camera-ready copy and computer diskette of the current prospectus for the Designated Portfolio(s)) and other assistance as is reasonably necessary in order for GWL&A once each year (or more frequently if the prospectuses for the Designated Portfolio(s) are amended) to have the prospectus for the Contracts and the Fund’s prospectus for the Designated Portfolio(s) printed together in one document. The Fund and Adviser agree that the prospectus (and semi-annual and annual reports) for the Designated Portfolio(s) will describe only the Designated Portfolio(s) and will not name or describe any other portfolios or series that may be in the Fund unless required by law.

3.2.      If applicable state or federal laws or regulations require that the Statement of Additional Information (“SAI”) for the Fund be distributed to all Contractowners, then the Fund, Distributor and/or the Adviser shall provide GWL&A with copies of the Fund’s SAI or documentation thereof for the Designated Portfolio(s) in such quantities, with expenses to be borne in accordance with Schedule D hereof, as GWL&A may reasonably require to permit timely distribution thereof to Contractowners. The Adviser, Distributor and/or the Fund shall also provide SAIs to any Contractowner or prospective owner who requests such SAI from the Fund (although it is anticipated that such requests will be made to GWL&A).

 

11

3.3.       The Fund. Distributor and/or Adviser shall provide GWL&A with copies of the Fund’s proxy material, reports to stockholders and other communications to stockholders for the Designated Portfolio(s) in such quantity, with expenses to be borne in accordance with Schedule D hereof, as GWL&A may reasonably require to permit timely distribution thereof to Contractowners.

3.4.       It is understood and agreed that, except with respect to information regarding GWL&A provided in writing by that party. GWL&A is not responsible for the content of the prospectus or SAI for the Designated Portfolio(s). It is also understood and agreed that, except with respect to information regarding the Fund, the Distributor, the Adviser or the Designated Portfolio(s) provided in writing by the Fund, the Distributor or the Adviser, neither the Fund, the Distributor nor Adviser are responsible for the content of the prospectus or SAI for the Contracts.

3.5.       If and to the extent required by law GWL&A shall:

 

 

(i)

solicit voting instructions from Contractowners;

 

 

(ii)

vote the Designated Portfolio(s) shares held in the Account in accordance with instructions received from Contractowners: and

 

 

(iii)

vote Designated Portfolio shares held in the Account for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contractowners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. GWL&A reserves the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law and the Mixed and Shared Funding Exemptive Order.

3.6.       GWL&A shall be responsible for assuring that each of its separate accounts holding shares of a Designated Portfolio calculates voting privileges and the Fund shall provide GWL&A with appropriate assistance in fulfilling such responsibility. The Fund agrees to promptly notify

 

12

GWL&A of any changes of interpretations or amendments of the Mixed and Shared Funding Exemptive Order.

3.7.       The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders, and in particular the Fund will either provide for annual meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not to require such meetings) or. as the Fund currently intends, comply with Section 16(c) of the 1940 Act (although the Fund is not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in accordance with the SEC’s interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the Commission may promulgate with respect thereto.

ARTICLE IV. Sales Material and Information

4.1.       GWL&A shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that GWL&A, respectively, develops or proposes to use and in which the Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers or the Distributor is named in connection with the Contracts, at least ten (10) Business Days prior to its use. No such material shall be used if the Fund objects to such use within five (5) Business Days after receipt of such material. If sales literature or promotional material goes beyond naming the Fund, a Designated Portfolio, the Adviser or the Distributor, GWL&A shall obtain from the Fund or its designee affirmative written approval to use such material.

4.2.       GWL&A shall not give any information or make any representations or statements on behalf of or concerning the Fund, the Adviser or the Distributor in connection with the sale of the Contracts other than the information or representations contained in the registration statement, prospectus or SAI for the Fund shares, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by the Fund, Distributor or Adviser, except with the permission of the Fund, Distributor or Adviser.

 

13

4.3.       The Fund or the Adviser shall furnish, or shall cause to be furnished, to GWL&A. a copy of each piece of sales literature or other promotional material in which GWL&A and/or those separate account(s) connected with the transactions contemplated by this Agreement, is named at least ten (10) Business Days prior to its use. No such material shall be used if GWL&A objects to such use within five (5) Business Days after receipt of such material.

4.4.       The Fund, the Distributor and the Adviser shall not give any information or make any representations on behalf of GWL&A or concerning GWL&A, the Account, or the Contracts other than the information or representations contained in a registration statement, prospectus or SAI for the Contracts, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by GWL&A or its designee, except with the permission of GWL&A.

4.5.       The Fund will provide to GWL&A at least one complete copy of all registration statements, prospectuses, SAIs, sales literature and other promotional materials which refer to GWL&A and/or those separate accounts connected with the transactions contemplated by this Agreement, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Designated Portfolio(s), contemporaneously with the filing of such document(s) with the SEC or NASD or other regulatory authorities.

4.6.       GWL&A will provide to the Fund at least one complete copy of all registration statements, prospectuses, SAIs. reports, solicitations for voting instructions, sales literature and other promotional materials which refer to GWL&A. applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Account, contemporaneously with the filing of such document(s) with the SEC, NASD, or other regulatory authority.

 

14

4.7.       For purposes of Articles IV and VIII. the phrase “sales literature and other promotional material” includes, but is not limited to. advertisements (such as material published, or designed for use in. a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media: e.g., online networks such as the Internet or other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and shareholder reports, and proxy materials (including solicitations for voting instructions) and any other material constituting sales literature or advertising under the NASD rules, the 1933 Act or the 1940 Act.

4.8.       At the request of any party to this Agreement, each other party will make available to the other party’s independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party’s obligations under this Agreement.

ARTICLE V. Fees and Expenses

5.1.       The Fund and the Adviser shall pay no fee or other compensation to GWL&A under this Agreement, other than pursuant to Schedule E attached hereto and incorporated herein by reference, and GWL&A shall pay no fee or other compensation to the Fund or Adviser under this Agreement, although the parties hereto will bear certain expenses in accordance with Schedule D, Articles III, V, and other provisions of this Agreement.

5.2.       All expenses incident to performance by the Fund, the Distributor and the Adviser under this Agreement shall be paid by the appropriate party, as further provided in Schedule D.

 

15

The Fund shall see to it that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and. if and to the extent required, in accordance with applicable state laws prior to their sale.

5.3.       The parties shall bear the expenses of routine annual distribution (mailing costs) of the Fund’s prospectus and distribution (mailing costs) of the Fund’s proxy materials and reports to owners of Contracts offered by GWL&A, in accordance with Schedule D.

5.4.       The Fund, the Distributor and the Adviser acknowledge that a principal feature of the Contracts is the Contractowner’s ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract’s cash value between funds and portfolios. The Fund, the Distributor and the Adviser agree to not interfere with GWL&A in facilitating the operation of the Account and the Contracts as described in the prospectus for the Contracts, including but not limited to not interfering with facilitating transfers between Unaffiliated Funds.

5.5.       GWL&A agrees to provide certain administrative services, specified in Schedule E attached hereto and incorporated herein by reference, in connection with the arrangements contemplated by this Agreement. The parties acknowledge and agree that the services referred to in this Section 5.5 are recordkeeping, shareholder communication, and other transaction facilitation and processing, and related administrative services only and are not the services of an underwriter or a principal underwriter of the Fund and that GWL&A is not an underwriter for the shares of the Designated Portfolio(s). within the meaning of the 1933 Act or the 1940 Act.

ARTICLE VI. Diversification and Qualification

6.1.       The Fund, Distributor and Adviser represent and warrant that the Fund and each Designated Portfolio thereof will at all times comply with Section 817(h) of the Code and Treasury

 

16

Regulation §1.817-5. as amended from time to time, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Fund and the Distributor agree that shares of the Designated Portfolio(s) will be sold only to Participating Insurance Companies and their separate accounts and to Qualified Plans.

6.2.       No shares of any Designated Portfolio of the Fund will be sold to the general public.

6.3.       The Fund, the Distributor and the Adviser represent and warrant that the Fund and each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect.

6.4.       The Fund, Distributor or Adviser will notify GWL&A immediately upon having a reasonable basis for believing that the Fund or any Designated Portfolio has ceased to comply with the aforesaid Section 817(h) diversification or Subchapter M qualification requirements or might not so comply in the future.

6.5.       Without in any way limiting the effect of Sections 8.2, 8.3 and 8.4 hereof and without in any way limiting or restricting any other remedies available to GWL&A, the Adviser or Distributor will pay all costs associated with or arising out of any failure of the Fund or any Designated Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to. the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to GWL&A and any federal income taxes or tax penalties and interest thereon (or “toll

 

17

charges” or exactments or amounts paid in settlement) incurred by GWL&A with respect to itself or owners of its Contracts in connection with any such failure.

6.6.       The Fund at the Fund’s expense shall provide GWL&A or its designee with reports certifying compliance with the aforesaid Section 817(h) diversification and Subchapter M qualification requirements, at the times provided for and substantially in the form attached hereto as Schedule C and incorporated herein by reference; provided, however, that providing such reports does not relieve the Fund of its responsibility for such compliance or of its liability for any non- compliance.

6.7.       GWL&A agrees that if the Internal Revenue Service (“IRS”) asserts in writing in connection with any governmental audit or review of GWL&A or, to GWL&A’s knowledge, or any Contractowner that any Designated Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or GWL&A otherwise becomes aware of any facts that could give rise to any claim against the Fund, Distributor or Adviser as a result of such a failure or alleged failure:

(a)     GWL&A shall promptly notify the Fund, the Distributor and the Adviser of such assertion or potential claim;

(b)     GWL&A shall consult with the Fund, the Distributor and the Adviser as to how to minimize any liability that may arise as a result of such failure or alleged failure;

(c)     GWL&A shall use its best efforts to minimize any liability of the Fund, the Distributor and the Adviser resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent;

 

18

(d)     any written materials to be submitted by GWL&A to the IRS, any Contractowner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by GWL&A to the Fund, the Distributor and the Adviser (together with any supporting information or analysis) within at least two (2) business days prior to submission;

(e)     GWL&A shall provide the Fund, the Distributor and the Adviser with such cooperation as the Fund, the Distributor and the Adviser shall reasonably request (including, without limitation, by permitting the Fund, the Distributor and the Adviser to review the relevant books and records of GWL&A) in order to facilitate review by the Fund, the Distributor and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure;

(f)     GWL&A shall not with respect to any claim of the IRS or any Contractowner that would give rise to a claim against the Fund, the Distributor and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any allowable administrative or judicial appeals, without the express written consent of the Fund, the Distributor and the Adviser, which shall not be unreasonably withheld; provided that, GWL&A shall not be required to appeal any adverse judicial decision unless the Fund and the Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Fund, the Distributor and the Adviser shall bear the costs and expenses, including reasonable attorney’s fees, incurred by GWL&A in complying with this clause (f).

ARTICLE VII.         Potential Conflicts and Compliance With

      Mixed and Shared Funding Exemptive Order      

7.1.       The Board will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the contract owners of all separate accounts investing in the Fund

 

19

and determine what action, if any, should be taken in response to such conflict. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of contract owners. The Board shall promptly inform GWL&A if it determines that an irreconcilable material conflict exists and the implications thereof.

7.2.       GWL&A will report any potential or existing conflicts of which it is aware to the Board. GWL&A will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by GWL&A to inform the Board whenever contract owner voting instructions are to be disregarded. Such responsibilities shall be carried out by GWL&A with a view only to the interests of its Contractowners.

7.3.       If it is determined by a majority of the Board, or a majority of its directors who are not interested persons of the Fund, the Distributor, the Adviser or any sub-adviser to any of the Designated Portfolios (the “Independent Directors”), that a material irreconcilable conflict exists, GWL&A and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Directors), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any Designated Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another portfolio of the Fund, or submitting the question whether such segregation

 

20

should be implemented to a vote of all affected contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change: and (2) establishing a new registered management investment company or managed separate account.

7.4.       If a material irreconcilable conflict arises because of a decision by GWL&A to disregard contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, GWL&A may be required, at the Fund’s election, to withdraw the Account’s investment in the Fund and terminate this Agreement; provided, however that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six month period the Adviser, the Distributor and the Fund shall continue to accept and implement orders by GWL&A for the purchase (and redemption) of shares of the Fund.

7.5.       If a material irreconcilable conflict arises because a particular state insurance regulator’s decision applicable to GWL&A conflicts with the majority of other state regulators, then GWL&A will withdraw the Account’s investment in the Fund and terminate this Agreement within six months after the Board informs GWL&A in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. Until the end of the foregoing six month period, the Fund shall continue to accept and implement orders by GWL&A for the purchase (and redemption) of shares of the Fund.

7.6.       For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the disinterested members of the Board shall determine whether any proposed action adequately

 

21

remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. GWL&A shall not be required by Section 7.3 to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contractowners affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then GWL&A will withdraw the Account’s investment in the Fund and terminate this Agreement within six (6) months after the Board informs GWL&A in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the Independent Directors.

7.7.       If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall be deemed modified to the extent necessary also to comply with the terms and conditions contained in such Rule(s) as so amended or adopted.

7.8       GWL&A shall at least annually submit to the Board of Trustees of the Fund such reports, materials or data as the Trustees may reasonably request so that the Trustees may fully carry out the obligations imposed upon them by the Mixed and Shared Funding Exemptive Order, and said reports, materials and data shall be submitted more frequently if deemed appropriate by the Board of Trustees.

 

22

ARTICLE VIII.     Indemnification

8.1.    Indemnification By GWL&A

8.1(a). GWL&A agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their respective officers and directors or trustees and each person, if any. who controls the Fund. Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.1) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of GWL&A) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages or liabilities (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund’s shares or the Contracts and:

 

  (i)

arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or prospectus or SAI covering the Contracts or contained in the Contracts or sales literature or other promotional material for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to GWL&A by or on behalf of the Adviser, Distributor or Fund for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or Fund shares; or

 

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature or other promotional material of the Fund not supplied by GWL&A or persons under its control) or wrongful conduct of GWL&A or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or

 

  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature or other promotional material of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be

 

23

 

stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund by or on behalf of GWL&A; or

 

  (iv)

arise as a result of any failure by GWL&A to provide the services and furnish the materials under the terms of this Agreement; or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by GWL&A in this Agreement or arise out of or result from any other material breach of this Agreement by GWL&A, including without limitation Section 2.11 and Section 6.7 hereof,

as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof.

8.1(b). GWL&A shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties.

8.1(c). GWL&A shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified GWL&A in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify GWL&A of any such claim shall not relieve GWL&A from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that GWL&A has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, GWL&A shall be entitled to participate, at its own expense, in the defense of such action. GWL&A also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from GWL&A to such party of GWL&A’s election to assume the defense

 

24

thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it. and GWL&A will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

8.1(d).     The Indemnified Parties will promptly notify GWL&A of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund.

8.2.     Indemnification by the Adviser

8.2(a). The Adviser agrees to indemnify’ and hold harmless GWL&A and its directors and officers and each person, if any, who controls GWL&A within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.2) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund’s shares or the Contracts and:

 

  (i)

arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, the Distributor or the Adviser (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Adviser, the Distributor or the Fund by or on behalf of GWL&A for use in the registration statement, prospectus or SAI for the Fund or in sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or the Fund shares; or

 

25

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus. SAI or sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Fund, the Distributor or the Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or

 

  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus. SAI, or sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon and in conformity with information furnished in writing to GWL&A by or on behalf of the Adviser, the Distributor or the Fund; or

 

  (iv)

arise as a result of any failure by the Fund, the Distributor or the Adviser to provide the services and furnish the materials under the terms of this Agreement (including a failure to comply with the diversification and other qualification requirements of Article VI of this Agreement); or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by the Fund, the Distributor or the Adviser in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser, the Distributor or the Fund; or

 

  (vi)

arise out of or result from the materially incorrect or untimely calculation or reporting by the Fund, the Distributor or the Adviser of the daily net asset value per share or dividend or capital gain distribution rate;

as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI hereof.

8.2(b). The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified

 

26

Party’s reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties.

8.2(c). The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

8.2(d). GWL&A agrees to promptly notify the Adviser of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account.

8.3.     Indemnification By the Fund

8.3(a). The Fund agrees to indemnify and hold harmless GWL&A and its directors and officers and each person, if any, who controls GWL&A within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.3) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the

 

27

written consent of the Fund) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may be required to pay or become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements, are related to the operations of the Fund and:

 

  (i)

arise as a result of any failure by the Fund to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or

 

  (ii)

arise out of or result from any material breach of any representation and/or warranty made by the Fund in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund;

as limited by and in accordance with the provisions of Sections 8.3(b) and 8.3(c) hereof.

8.3(b). The Fund shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties.

8.3(c). The Fund shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Fund in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Fund of any such claim shall not relieve it from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Fund has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Fund will be entitled to participate, at its own expense, in the defense thereof. The Fund shall also be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Fund to such party of the Fund’s election to

 

28

assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Fund will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

8.3(d). GWL&A each agrees to promptly notify the Fund of the commencement of any litigation or proceeding against itself or any of its respective officers or directors in connection with the Agreement, the issuance or sale of the Contracts, the operation of the Account, or the sale or acquisition of shares of the Fund.

8.3(e). It is understood and agreed that no liability of the Fund pursuant to this section 8.3 shall extend to the assets of any portfolio of the Fund other than the Designated Portfolio(s). or where the failure or breach giving rise to such liability relates to a single Designated Portfolio, to the assets of any other Designated Portfolio.

8.4.     Indemnification by the Distributor

8.4(a). The Distributor agrees to indemnify and hold harmless GWL&A and its directors and officers and each person, if any, who controls GWL&A within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.4) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of the Distributor) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund’s shares or the Contracts and:

 

  (i)

arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund,

 

29

 

Adviser or Distributor (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Adviser, the Distributor or Fund by or on behalf of GWL&A for use in the registration statement or SAI or prospectus for the Fund or in sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or Fund shares; or

 

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI, sales literature or other promotional material for the Contracts not supplied by the Distributor or persons under its control) or wrongful conduct of the Fund, the Distributor or Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or

 

  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon and in conformity with information furnished in writing to GWL&A by or on behalf of the Adviser, the Distributor or Fund; or

 

  (iv)

arise as a result of any failure by the Fund, Adviser or Distributor to provide the services and furnish the materials under the terms of this Agreement (including a failure to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by the Fund, Adviser or Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund, Adviser or Distributor; or

 

  (vi)

arise out of or result from the materially incorrect or untimely calculation or reporting by the Fund, the Distributor or the Adviser of the daily net asset value per share or dividend or capital gain distribution rate;

 

30

as limited by and in accordance with the provisions of Sections 8.4(b) and 8.4(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Distributor specified in Article VI hereof.

8.4(b).    The Distributor shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties.

8.4(c)    The Distributor shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Distributor in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Distributor of any such claim shall not relieve the Distributor from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Distributor has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Distributor will be entitled to participate, at its own expense, in the defense thereof. The Distributor also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Distributor to such party of the Distributor’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Distributor will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

 

31

8.4(d)    GWL&A agrees to promptly notify the Distributor of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account.

ARTICLE IX.         Applicable Law

9.1.          Except as provided in Section 9.2., this Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of Colorado, without regard to the Colorado Conflict of Laws provisions.

9.2.          This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the SEC may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith.

ARTICLE X.    Termination

10.1.        This Agreement shall terminate:

(a) at the option of any party, with or without cause, with respect to some or all Portfolios, upon six (6) months advance written notice delivered to the other parties; provided, however, that such notice shall not be given earlier than six (6) months following the date of this Agreement; or

(b) at the option of GWL&A by written notice to the other parties with respect to any Portfolio based upon GWL&A’s reasonable determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; or

(c) at the option of GWL&A by written notice to the other parties with respect to any Portfolio in the event any of the Portfolio’s shares are not registered, issued or sold in accordance with applicable state and/or federal law or such law precludes the use of such shares as the underlying investment media of the Contracts issued or to be issued by GWL&A; or

 

32

(d) at the option of the Fund. Distributor or Adviser in the event that formal administrative proceedings are instituted against GWL&A by the NASD, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body if, in each case, the Fund. Distributor or Adviser, as the case may be, reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of GWL&A to perform its obligations under this Agreement; or

(e) at the option of GWL&A in the event that formal administrative proceedings are instituted against the Fund, the Distributor or the Adviser by the NASD, the SEC, or any state securities or insurance department or any other regulatory body, if GWL&A reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of the Fund, the Distributor or the Adviser to perform their obligations under this Agreement; or

(f) at the option of GWL&A by written notice to the Fund with respect to any Portfolio if GWL&A reasonably believes that the Portfolio will fail to meet the Section 817(h) diversification requirements or Subchapter M qualifications specified in Article VI hereof; or

(g) at the option of either the Fund, the Distributor or the Adviser, if (i) the Fund, Distributor or Adviser, respectively, shall determine, in its sole judgment reasonably exercised in good faith, that GWL&A has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on GWL&A’s ability to perform its obligations under this Agreement, (ii) the Fund, Distributor or Adviser notifies GWL&A of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by GWL&A and any other changes in circumstances since the giving of such a notice, the determination of the Fund, Distributor or Adviser shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or

(h) at the option of either GWL&A, if (i) GWL&A shall determine, in its sole judgment reasonably exercised in good faith, that the Fund, Distributor or Adviser has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Fund’s, Distributor’s or Adviser’s ability to perform its obligations under this Agreement, (ii) GWL&A notifies the Fund, Distributor or Adviser, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Fund, Distributor or Adviser and any other changes in circumstances since the giving of such a notice, the determination of GWL&A shall continue to apply on the sixtieth

 

33

(60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or

(i) at the option of the Fund, the Adviser or the Distributor by written notice to GWL&A, in the event that the terminating party reasonably believes that the Contracts will cease to qualify as life insurance or annuity contracts, as applicable, under the Code or that a definitional requirement referred to in Section 2.11 will not be met. or if the Contracts are not registered, issued or sold in accordance with applicable state and/or federal law; or

(j) at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the “defaulting party”) other than as described in 10.1(a)-(i); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non-defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party.

10.2.       Notice Requirement. No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore,

(a) in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties;

(b) in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e), 10.1(i) or 10.1(j) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and

(c) in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c), 10.1(f) or 10.1(i), the prior written notice shall be given in advance of the effective date of termination, which date shall be determined by the party sending the notice.

10.3.    Effect of Termination. Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or GWL&A to meet Section 817(h) of the Code

 

34

diversification requirements, the Fund, the Distributor and the Adviser shall, at the option of GWL&A, continue to make available additional shares of the Designated Portfolio(s) pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as “Existing Contracts”). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolio(s), redeem investments in the Designated Portfolio(s) and/or invest in the Designated Portfolio(s) upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement.

10.3.      Surviving Provisions. Notwithstanding any termination of this Agreement, each party’s obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement.

ARTICLE XI. Notices

Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party.

If to the Fund:

The Alger American Fund

1 World Trade Center, Suite 9333

New York, New York 10048

Attention:  Gregory S. Duch

If to GWL&A:

Great-West Life & Annuity Insurance Company

8515 East Orchard Road

Englewood, CO 80111

Attention:  Vice President, Institutional Insurance

 

35

If to the Adviser:

Fred Alger Management, Inc.

1 World Trade Center, Suite 9333

New York, New York 10048

Attention:  Gregory S. Duch

If to the Distributor:

Fred Alger Management, Inc.

1 World Trade Center, Suite 9333

New York, New York 10048

Attention:  Gregory S. Duch

ARTICLE XII. Miscellaneous

12.1.      Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected party until such time as such information may come into the public domain. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary.

12.2.      The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect.

12.3.      This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument.

12.4.      If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby.

 

36

12.5.      Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, the NASD and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the Colorado Insurance Commissioner with any information or reports in connection with services provided under this Agreement which such Commissioner may request in order to ascertain whether the variable annuity operations of GWL&A are being conducted in a manner consistent with the Colorado Variable Annuity Regulations and any other applicable law or regulations.

12.6.      Any controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be settled by arbitration in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

12.7.      The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws.

12.8.      This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto.

12.9.      The Fund is a business trust organized under the laws of the Commonwealth of Massachusetts and under a Declaration of Trust, to which reference is hereby made, a copy of which is on file at the office of the Secretary of State of the Commonwealth of Massachusetts, and to any and all amendments thereto so filed or hereafter filed. The obligations of the Fund entered into hereunder in the name of the Fund or on behalf thereof by any of its Trustees, officers, employees or agents are undertaken not individually but in such capacities, and are not binding

 

37

upon any of the Trustees, officers, employees or shareholders of the Fund personally, but bind only the assets of the Fund or of the Designated Portfolio(s).

12.10.      GWL&A agrees that the obligations assumed by the Distributor and the Adviser pursuant to this Agreement shall be limited in any case to the Distributor and Adviser and their respective assets and GWL&A shall not seek satisfaction of any such obligation from the shareholders of the Distributor or the Adviser, the Directors, officers, employees or agents of the Distributor or Adviser, or any of them.

12.11.      The Fund, the Distributor and the Adviser agree that the obligations assumed by GWL&A pursuant to this Agreement shall be limited in any case to GWL&A and its assets and neither the Fund. Distributor nor Adviser shall seek satisfaction of any such obligation from the shareholders of GWL&A, the directors, officers, employees or agents of GWL&A, or any of them, except to the extent permitted under this Agreement.

12.12.      No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Adviser and the Fund, and the Distributor and the Fund.

 

38

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by its duly authorized representative and its seal to be hereunder affixed hereto as of the date specified below.

 

                                           

  

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

  

                         

 

By its authorized officer,

    
 

By:

  

                      

    
 

Title:

    
 

Date: 9/13/99

    
 

THE ALGER AMERICAN FUND

 

By its authorized officer,

  

                                                 

  
 

By:

  

/s/ Gregory Dual

    
 

Title: Treasurer

    
 

Date: 9-13-99

    
 

FRED ALGER MANAGEMENT, INC.

    
 

By its authorized officer,

    
 

By:

  

/s/ Gregory Dual

    
 

Title: Executive Vice President

    
 

Date: 9-13-99

    

                                           

   FRED ALGER & COMPANY, INCORPORATED  

                                                 

  

                         

 

                             

  

By its authorized officer,

  

                                                 

  

                         

 

By:

  

/s/ Gregory Dual

    
 

Title: Executive Vice President

    
 

Date: 9-13-99

    

 

39

SCHEDULE A

 

                 Contracts

    Form Numbers

Group Tax Deferred Annuity

    GTDAMF92 Vol

Group Tax Deferred Annuity

    GTDAMF92 ER

 

40

SCHEDULE B

Designated Portfolios

Alger American MidCap Portfolio

Alger American Balanced Portfolio

 

41

SCHEDULE C

Reports per Section 6.6

With regard to the reports relating to the quarterly testing of compliance with the requirements of Section 817(h) and Subchapter M under the Internal Revenue Code (the “Code”) and the regulations thereunder, the Fund shall provide within twenty (20) Business Days of the close of the calendar quarter a report to GWL&A in the Form D1 attached hereto and incorporated herein by reference, regarding the status under such sections of the Code of the Designated Portfolio(s), and if necessary, identification of any remedial action to be taken to remedy non-compliance.

With regard to the reports relating to the year-end testing of compliance with the requirements of Subchapter M of the Code, referred to hereinafter as “RIC status,” the Fund will provide the reports on the following basis: (i) the last quarter’s quarterly reports can be supplied within the 20-day period, and (ii) a year-end report will be provided 45 days after the end of the calendar year. However, if a problem with regard to RIC status, as defined below, is identified in the third quarter report, on a weekly basis, starting the first week of December, additional interim reports will be provided specially addressing the problems identified in the third quarter report. If any interim report memorializes the cure of the problem, subsequent interim reports will not be required.

A problem with regard to RIC status is defined as any violation of the following standards, as referenced to the applicable sections of the Code:

(a)  Less than ninety percent of gross income is derived from sources of income specified in Section 851(b)(2);

(b)  Thirty percent or greater gross income is derived from the sale or disposition of assets specified in Section 851(b)(3);

(c)  Less than fifty percent of the value of total assets consists of assets specified in Section 851(b)(4)(A); and

(d)  No more than twenty-five percent of the value of total assets is invested in the securities of one issuer, as that requirement is set forth in Section 851(b)(4)(B).

 

42

FORM C1

CERTIFICATE OF COMPLIANCE

For the quarter ended:                             

I,                         , a duly authorized officer, director or agent of                  Fund hereby swear and affirm that                                  Fund is in compliance with all requirements of Section 817(h) and Subchapter M of the Internal Revenue Code (the “Code”) and the regulations thereunder as required in the Fund Participation Agreement among Great-West Life & Annuity Insurance Company, and                          other than the exceptions discussed below:

 

Exceptions

  

                         

   

Remedial Action

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

    
If no exception to report, please indicate “None.”
    

Signed this        day of       ,         .

    

 

    

(Signature)

 

By:

  

                              

(Type or Print Name and Title/Position)

 
 
 

SCHEDULE D

EXPENSES

The Fund and/or the Distributor and/or Adviser, and GWL&A will coordinate the functions and pay the costs of the completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Fund’s share of the total costs determined according to the number of pages of the Fund’s respective portions of the documents.

Item   Function   Party Responsible for Coordination   Party Responsible for Expense
Mutual Fund Prospectus   Printing of combined prospectuses   GWL&A   Fund, Distributor or Adviser, as applicable
    Fund, Distributor or Adviser shall supply GWL&A with such numbers of the Designated Portfolio(s) prospectus(es) as GWL&A shall reasonably request   GWL&A   Fund, Distributor or Adviser, as applicable
    Distribution to New and Inforce Clients   GWL&A   GWL&A
    Distribution to Prospective Clients   GWL&A   GWL&A
Product Prospectus   Printing for Inforce Clients   GWL&A   GWL&A
    Printing for Prospective Clients   GWL&A   GWL&A
    Distribution to New and Inforce Clients   GWL&A   GWL&A
    Distribution to Prospective Clients   GWL&A   GWL&A
Item   Function   Party Responsible for Coordination   Party Responsible for Expense
Mutual Fund Prospectus Update & Distribution   If Required by Fund, Distributor or Adviser   Fund, Distributor or Adviser   Fund, Distributor or Adviser
    If Required by GWL&A   GWL&A   GWL&A
Product Prospectus Update & Distribution   If Required by Fund. Distributor or Adviser   GWL&A   Fund, Distributor or Adviser

 

44

Item   Function   Party Responsible for Coordination   Party Responsible for Expense
    If Required by GWL&A   GWL&A   GWL&A
Mutual Fund SAI   Printing   Fund, Distributor or Adviser   Fund. Distributor or Adviser
    Distribution   GWL&A   GWL&A
Product SAI   Printing   GWL&A   GWL&A
    Distribution   GWL&A   GWL&A
Item   Function   Party Responsible for Coordination   Party Responsible for Expense
Proxy Material for Mutual Fund:   Printing if proxy required by Law   Fund, Distributor or Adviser   Fund, Distributor or Adviser
    Distribution (including labor) if proxy required by Law   GWL&A   Fund, Distributor or Adviser
    Printing & distribution if required by GWL&A   GWL&A   GWL&A
             
Item   Function   Party Responsible for Coordination   Party Responsible for Expense
Mutual Fund Annual & Semi-Annual Report   Printing of combined reports   GWL&A   Fund. Distributor or Adviser
    Distribution   GWL&A   GWL&A
Other communication to New and Prospective clients   If Required by the Fund, Distributor or Adviser   GWL&A   Fund, Distributor or Adviser
    If Required by GWL&A   GWL&A   GWL&A
Item   Function   Party Responsible for Coordination   Party Responsible for Expense
Other communication to inforce   Distribution (including labor and printing) if required by the Fund, Distributor or Adviser   GWL&A   Fund, Distributor or Adviser
    Distribution (including labor and printing) if required by GWL&A   GWL&A   GWL&A
             

 

45

       
Item   Function   Party Responsible for Coordination   Party Responsible for Expense
Errors in Share Price calculation pursuant to Section 1.10   Cost of error to participants   GWL&A   Fund or Adviser
    Cost of administrative work to correct error   GWL&A   Fund or Adviser
Operations of the Fund   All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by the fund pursuant to any Rule 12b-1 plan   Fund. Distributor or Adviser   Fund or Adviser
Operations of the Account   Federal registration of units of separate account (24f-2 fees)   GWL&A   GWL&A

 

46

SCHEDULE E

Administrative Services

 

A.

GWL&A. or an affiliate, will provide the properly registered and licensed personnel and systems needed for all customer service and support – for both fund and annuity information and questions – including:

respond to Contractowner inquiries;

delivery of prospectus – both fund and annuity;

entry of initial and subsequent orders;

transfer of cash to insurance company and/or funds;

explanations of fund objectives and characteristics;

entry of transfers between funds;

fund balance and allocation inquiries;

mail fund prospectus.

 

B.

GWL&A, or an affiliate, will communicate all purchase, withdrawal, and exchange orders it receives from customers to GWL&A who will transmit them to each fund.

Administrative Service Fee

For the services, GWL&A shall receive a fee of 0.25% per annum applied to the average daily value of the shares of the fund held by GWL&A’s customers, payable by the Adviser directly to GWL&A, such payments being due and payable within 15 (fifteen) days after the last day of the month to which such payment relates.

The Fund will calculate and GWL&A will verify the asset balance for each day on which the fee is to be paid pursuant to this Agreement with respect to each Designated Portfolio.

 

p: legal\bbyr\msa\gen fundp msa

 

47

EX-99.(H)(10) 8 d694125dex99h10.htm EX-99.(H)(10) EX-99.(H)(10)

THIRD AMENDMENT

TO

FUND PARTICIPATION AGREEMENT

WHEREAS, GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A), FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY, THE ALGER PORTFOLIOS (formerly known as The Alger American Fund) (the “Fund”), FRED ALGER MANAGEMENT, INC., and FRED ALGER & COMPANY, INCORPORATED, collectively the Parties, entered into a Fund Participation Agreement dated September 13, 1999, as amended on August 17, 2006 and November 2, 2009 (the “Agreement”); and

WHEREAS, the Parties desire and agree to amend the Agreement by revising FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY to reflect its current name, GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK (“GWLA-NY”); and

WHEREAS, the Parties desire and agree to add GWL&A’s COLI VUL 14 Separate Account to the Agreement;

WHEREAS, The Parties desire and agree to amend the Agreement by deleting in its entirety Schedule A of the Agreement and replacing it with the Schedule A attached hereto.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

  1.

GWL&A’s Separate Account COLI VUL 14 Series Account is hereby added to the Agreement.

 

1

  2.

Schedule A of the Agreement is hereby replaced in its entirety with Schedule A as attached and incorporated by reference to this Amendment.

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 21st day of August, 2013.

 

             GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
           By its authorized officer,
  By: /s/ Susan Gile                                    
  Title: Susan Gile, V.P. Individual Markets
  Date: 8-21-13

 

             GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK
           By its authorized officer,
  By: /s/ Ron Laeyendecker                            
  Title: Ron Laeyendecker, Senior Vice President
  Date: 8-21-13
  THE ALGER PORTFOLIOS
  By its authorized officer,
  By:                                                             
  Title: Assistant Secretary
  Date: 9-23-13
  FRED ALGER MANAGEMENT, INC.
  By its authorized officer,
  By:                                                             
  Title: Senior Vice President
  Date: 9-23-13

 

             FRED ALGER & COMPANY, INCORPORATED

 

           By its authorized officer,
  By:                                                             
  Title: Senior Vice President
  Date: 9-23-13

 

 

2

SCHEDULE A

 

Separate Account

 

  

Contract

 

   
FutureFunds I of GWLA  

Group Tax Deferred

Annuity

   
FutureFunds II of GWLA  

Group Tax Deferred

Annuity

   
FutureFunds II of GWLA-NY    

Group Tax Deferred

Annuity

   
COLI VUL 2 of GWLA  

Individual Flexible

Premium Variable

Universal Life

   
COLI VUL 2 of GWLA-NY  

Individual Flexible

Premium Variable

Universal Life

   
COLI VUL 4 of GWLA  

Individual Flexible

Premium Variable

Universal Life

   
COLI VUL 4 of GWLA-NY  

Individual Flexible

Premium Variable

Universal Life

   
COLI VUL 7 of GWLA  

Individual Flexible

Premium Variable

Universal Life

   
COLI VUL 1 of GWLA-NY  

Individual Flexible

Premium Variable

Universal Life

   
COLI VUL 14 of GWLA  

Individual Flexible

Premium Variable

Universal Life

   

 

3

EX-99.(H)(16) 9 d694125dex99h16.htm EX-99.(H)(16) EX-99.(H)(16)

FIFTH AMENDMENT TO PARTICIPATION AGREEMENT

THIS FIFTH AMENDMENT TO PARTICIPATION AGREEMENT is made as of this 18th day of Nov, 2008, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”), FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“First GWL&A”), AMERICAN CENTURY INVESTMENT MANAGEMENT, INC. (the “Adviser”), and AMERICAN CENTURY INVESTMENT SERVICES, INC. (the “Distributor), collectively the Parties. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the original Agreement (defined below).

RECITALS

WHEREAS, GWL&A, First GWL&A, the Adviser and the Distributor are parties to a Participation Agreement dated September 14, 1999, and amended April 20, 2000, May 1, 2002, April 26, 2005 and September 17, 2007 (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to add additional separate accounts to the list of separate accounts subject to this Agreement; and

WHEREAS, The Parties desire and agree to amend the Agreement by deleting in its entirety Schedule A of the Agreement and replacing it with the Schedule A attached hereto;

WHEREAS, The Parties desire and agree to amend the Agreement by adding additional fund options; and

WHEREAS, The Parties desire and agree to amend the Agreement by deleting in its entirety Schedule B of the Agreement and replacing it with the Schedule B attached hereto;

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

  1.

All references to the “First GWL&A Account” shall now include the COLI VUL Series Account 1 (First GWL&A).

 

  2.

All references to the “GWL&A Account” shall now include the COLI VUL Series Account 7 (GWL&A)

 

  3.

Schedule A of the Agreement is hereby replaced in its entirety with Schedule A as attached and incorporated by reference to this Amendment.

 

  4.

Schedule B of the Agreement is hereby replaced in its entirety with Schedule B as attached and incorporated by reference to this Amendment.

 

1

5.

GWL&A and First GWL&A agree that each has registered or will register certain variable life insurance and variable annuity contracts under the 1933 Act, unless such contracts are exempt from registration thereunder.

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 18th day of Nov, 2008.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By its authorized officer,

By:

  

/s/ Ron Laeyendecker

Name:

  

Ron Laeyendecker

Title:

  

Senior Vice-President

Date:

   11/13/08

FIRST GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By its authorized officer,

By:

  

/s/ Robert K. Shaw

Name:  

Robert K. Shaw

Title:  

Sr. VP

Date:  

11/14/08

AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.

 

By its authorized officer,

By:

  

/s/ Otis H. Cowan

Name:  

Otis H. Cowan

Title:  

Vice President

Date:  

1/8/09

AMERICAN CENTURY INVESTMENT SERVICES, INC.

 

By its authorized officer,

By:

  

/s/ Cindy A. Johnson

Name:  

Cindy A. Johnson

Title:  

Vice President

Date:  

12/5/08

 

2

SCHEDULE A

 

Contracts    Form Number    Account

Individual Flexible Premium

   

J355

   

COLI VUL-2 GWLA

Variable Universal Life

   

J355(NY)

   

COLI VUL-2 (NY) FGWL

  

J500

   

COLI VUL-4 GWLA

  

J500 (NY)

   

COLI VUL-4 (NY) FGWL

  

PPVUL

   

COLI VUL-7 GWLA

  

PPVUL - NY

   

COLI VUL-1 (NY) FGWL

Group Tax Deferred Annuity

   

GTDAMF92 Vol

   

FutureFunds

  

GTDAMF92 ER

   

FutureFunds

 

3

SCHEDULE B

Designated Portfolios (offered either directly or indirectly to the Accounts)

 

     

Admin. Serv.

Name of Portfolio

   

Available Class

   

Reimb. Fees

American Century VP Capital Appreciation

   

Class I

   

30 bps

American Century VP Balanced

   

Class I

   

30 bps

American Century VP International

   

Class I

   

30 bps

American Century VP Value

   

Class I

   

30 bps

American Century VP Income & Growth

   

Class I

   

30 bps

American Century VP Ultra

   

Class I

   

30 bps

American Century VP Vista

   

Class I

   

30 bps

American Century VP Inflation Protection

   

Class I

   

  5 bps

American Century VP Large Company Value

   

Class I

   

30 bps

American Century VP Mid Cap Value

   

Class I

   

30 bps

 

4

EX-99.(H)(17) 10 d694125dex99h17.htm EX-99.(H)(17) EX-99.(H)(17)

SIXTH AMENDMENT TO PARTICIPATION AGREEMENT

THIS SIXTH AMENDMENT TO PARTICIPATION AGREEMENT is made as of this 1st day of September, 2013, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”), AMERICAN CENTURY INVESTMENT MANAGEMENT, INC. (the “Adviser”), AMERICAN CENTURY INVESTMENT SERVICES, INC. (the “Distributor), collectively the Parties, and GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK formerly known as FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A-NY”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Original Agreement (defined below).

RECITALS

WHEREAS, GWL&A, GWLA-NY, the Adviser and the Distributor are parties to a Participation Agreement dated September 14, 1999, and amended April 20, 2000, May 1, 2002, April 26, 2005, September 17, 2007 and November 18, 2008 (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to add an additional separate Account; and

WHEREAS, The Parties desire and agree to amend the Agreement by deleting in its entirety Schedule A of the Agreement and replacing it with the Schedule A attached hereto.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

  1.

All references to the “Account” now include the COLI VUL Series Account 14;

 

  2.

Schedule A of the Agreement is hereby replaced in its entirety with Schedule A as attached and incorporated by reference to this Amendment.

[lntentionally Left Blank]

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 1st day of September, 2013.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By its authorized officer,
By:   /s/ Susan Gile
Name:   Susan Gile
Title:   V.P. Individual Markets
Date:   9-1-2013

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY OF NEW YORK

 

By its authorized officer,
By:   /s/ Ron Laeyendecker
Name:   Ron Laeyendecker
Title:   Senior Vice President
Date:   9-1-2013

AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.

 

By its authorized officer,
By:   /s/ Otis H. Cowan
Name:   Otis H. Cowan
Title:   Vice President
Date:   10/3/13

AMERICAN CENTURY INVESTMENT SERVICES, INC.

 

By its authorized officer,
By:   /s/ Cindy A. Johnson
Name:   Cindy A. Johnson
Title:   Vice President
Date:  

SCHEDULE A

 

Contracts

 

    Form Number    Account   

Individual Flexible Premium

Variable Universal Life

   

 

J355

J355 (NY)

J500

J500 (NY)

PPVUL

PPVUL

ICC13-J600/J600

   

 

COLI VUL-2

COLI VUL-2 (GWLA-NY)

COLI VUL-4

COLI VUL-4 (GWLA-NY)

COLI VUL-7

COLI VUL-1 (GWLA-NY)

COLI VUL-14

   
Group Tax Deferred Annuity    GTDAMF92 Vol    FutureFunds   
Group Tax Deferred Annuity    GTDAMF92 ER    FutureFunds   
EX-99.(H)(18) 11 d694125dex99h18.htm EX-99.(H)(18) EX-99.(H)(18)

SEVENTH AMENDMENT TO PARTICIPATION AGREEMENT

THIS SEVENTH AMENDMENT TO PARTICIPATION AGREEMENT is made as of this 1st day of May, 2015, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”), AMERICAN CENTURY INVESTMENT MANAGEMENT, INC. (the “Adviser”), AMERICAN CENTURY INVESTMENT SERVICES, INC. (the “Distributor), and GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK formerly known as FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A-NY”), collectively the Parties. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Original Agreement (defined below).

RECITALS

WHEREAS, GWL&A, GWLA-NY, the Adviser and the Distributor are parties to a Participation Agreement dated September 14, 1999, and amended April 20, 2000, May 1, 2002, April 26, 2005, September 17, 2007, November 18, 2008, and September 1, 2013 (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to add additional fund options available under the Agreement and to revise the reimbursement terms as set forth; and

WHEREAS, the Parties now desire to further modify the Agreement as provided herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

1.         Article V. Fees and Expenses. The first sentence of Section 5.6 is hereby deleted and replaced in its entirety with the following:

“As compensation for the services specified in the Schedule C hereto, the Adviser agrees to pay GWL&A and GWL&A-NY an Administrative Service Fee based on the percentage per annum on Schedule B hereto applied to the average daily value of the shares of the Designated Portfolios(s) held in the Accounts, either directly or indirectly, with respect to Contracts sold by GWL&A and GWL&A-NY.”

2.         Article V. Fees and Expenses. Section 5.7 of the Agreement is hereby added as follows:

“Certain of the Funds have adopted distribution plans pursuant to which the Distributor, on behalf of each such Fund, will pay a service fee to dealers in accordance with the provisions of such Funds’ distribution plans. The service fee is paid as additional consideration for all personal services, account maintenance services and/or Distribution Services provided by the broker/dealer of record to shareholders of the applicable Fund. The provisions and terms of these Funds’ distribution plans are

described in their respective Prospectuses, and GWL&A and GWL&A-NY hereby agree that the Distributor has made no representations with respect to the distribution plans of such Funds in addition to, or conflicting with, the description set forth in their respective Prospectuses. The fee for each class of Shares will be set by the Distributor based on the relevant distribution plans. Any such fee shall be paid only to the broker/dealer of record pursuant to the Distributor’s records, whether that broker is GWL&A, GWL&A-NY, or another entity. Only one broker may be designated as the broker/dealer of record on any account.”

3.         Replacement of Section 12.7. Section 12.7 of the Agreement is hereby deleted and replaced in its entirety with the following:

“This Agreement will terminate automatically in the event of its assignment.”

4.         Replacement of SCHEDULE B. SCHEDULE B to the Agreement is hereby deleted in its entirety and replaced with SCHEDULE B attached hereto.

5.         Replacement of Article B of SCHEDULE C. Article B of SCHEDULE C is hereby deleted and replaced in its entirety with the following:

“B. For the services, GWL&A and GWL&A-NY shall receive a fee as set forth on Schedule B per annum applied to the average daily value of the shares of the Fund held by the Accounts, either directly or indirectly through the Profile Portfolios of the Great-West Series Fund, Inc., in order to fund Contracts purchased by GWL&A’s and GWL&A-NY’s customers, payable by the Adviser directly to GWL&A and GWL&A-NY, such payments being due and payable within 30 (thirty) days after the last day of the quarter to which such payment relates.”

6.         Ratification and Confirmation of Agreement. In the event of a conflict between the terms of this Amendment and the Agreement, it is the intention of the Parties that the terms of this Amendment shall control and the Agreement shall be interpreted on that basis. To the extent the provisions of the Agreement have not been amended by this Amendment, the Parties hereby confirm and ratify the Agreement.

7.         Counterparts. This Amendment may be executed in two or more counterparts, each of which shall be an original and all of which together shall constitute one instrument.

8.         Full Force and Effect. Except as expressly supplemented, amended or consented to hereby, all of the representations, warranties, terms, covenants and conditions of the Agreement shall remain unamended and shall continue to be in full force and effect.

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 23rd day of April, 2015.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By its authorized officer,
By:   /s/ Susan Gile
Name:   Susan Gile
Title:   VP - Individual Markets
Date:   4-23-2015

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY OF NEW YORK

 

By its authorized officer,
By:   /s/ Ron Laeyendecker
Name:   Ron Laeyendecker
Title:  

Senior Vice President

Date:  

AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.

 

By its authorized officer,
By:   /s/ Otis H. Cowan
Name:   Otis H. Cowan
Title:   Vice President
Date:   5/15/15

AMERICAN CENTURY INVESTMENT SERVICES, INC.

 

By its authorized officer,
By:   /s/ Cindy A. Johnson
Name:   Cindy A. Johnson
Title:   Vice President
Date:   5/5/15

SCHEDULE B

 

 Designated Portfolios (offered either directly or indirectly to the Accounts)

 

 

Class I Funds    Class   

Administrative Service

Reimbursement Fees

   

12b1

Fee

    Total Fee

VP Capital Appreciation

   

Class I

    30 bps    n/a    30

VP Balanced

   

Class I

    30 bps    n/a    30

VP International

   

Class I

    30 bps    n/a    30

VP Value

   

Class I

    30 bps    n/a    30

VP Income & Growth

   

Class I

    30 bps    n/a    30

VP Ultra

   

Class I

    30 bps    n/a    30

VP Inflation Protection

   

Class I

    5 bps    n/a    5

VP Large Company Value

   

Class I

    30 bps    n/a    30

VP Mid Cap Value

   

Class I

    30 bps    n/a    30

 

 

Class II Funds    Class    Administrative Service
Reimbursement Fees		   

12b1

Fee

    Total Fee

VP Income & Growth

   

Class II

    10 bps    25    35

VP Inflation Protection

   

Class II

    5 bps    25    30

VP International

   

Class II

    15 bps    25    40

VP Large Company Value

   

Class II

    15 bps    25    40

VP Mid Cap Value

   

Class II

    15 bps    25    40

VP Ultra

   

Class II

    15 bps    25    40

VP Value

   

Class II

    15 bps    25    40

VP Capital Appreciation

   

Class II

    15 bps    25    40
 EX-99.(H)(20) 12 d694125dex99h20.htm EX-99.(H)(20) EX-99.(H)(20)

AMENDMENT No. 1 TO FUND PARTICIPATION AGREEMENT

THIS AMENDMENT TO PARTICIPATION AGREEMENT is made as of this 30 day of September, 2011, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”), FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“First GWL&A”), AMERICAN FUNDS INSURANCE SERIES (“Series”), an open-end management investment company organized under the laws of the Commonwealth of Massachusetts; and CAPITAL RESEARCH AND MANAGEMENT COMPANY (“CRMC”), a corporate organized under the laws of the State of Delaware, (collectively, the “Parties”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Original Agreement (defined below).

RECITALS

WHEREAS, GWL&A, First GWL&A, the Series and CRMC are parties to a Fund Participation Agreement dated January 28, 2008 (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to add the COLI VUL-1 Series Account of First GWL&A to the Agreement;

WHEREAS, The Parties desire and agree to amend the Agreement by deleting in its entirety Attachment B of the Agreement and replacing it with the Attachment B attached hereto.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

  1.

All references to “Class 1” in the Agreement are replaced with “Class 2”.

 

  2.

The following provision is added to the Agreement:

“The Insurance Company will be entitled to a Rule 12b-1 service fee paid by the Series, to be accrued daily and paid monthly at an annual rate of 0.25% of the average daily net assets of the Class 2 shares of each Fund attributable to the Contracts for personal services and account maintenance services for Contract owners for as long as the Series’ Plan of Distribution pursuant to Rule 12b-l under the 1940 Act remains in effect.”

 

  3.

All references to the “Account” now include the COLI VUL 1 Series Account of First GWL&A;

 

  4.

Attachment B of the Agreement is hereby replaced in its entirety with Attachment B as attached and incorporated by reference to this Amendment.

 

1

Except as expressly supplemented, amended or consented to hereby, all of the representations and conditions of the Agreement will remain unamended and will continue to be in full force and effect.

[Intentionally Left Blank]

 

2

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the          day of                , 2011.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

By its authorized officer,

 

By:   /s/ Christopher Bergeon
Name:   Christopher Bergeon
Title:   VP
Date:   9/29/11

FIRST GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

By its authorized officer,

 

By:  

/s/ Susan Gile

Name:  

Susan Gile

Title:   V.P.
Date:   9.29.11

AMERICAN FUNDS INSURANCE SERIES

By its authorized officer,

 

By:   /s/ Steven I. Koszalka
Name:   Steven I. Koszalka
Title:   Secretary
Date:   10/6/11

CAPITAL RESEARCH AND MANAGEMENT COMPANY

By its authorized officer,

 

By:   /s/ Michael J. Downer
Name: Michael J. Downer
Title:   Senior Vice President and Secretary
Date:   10/7/11

 

3

ATTACHMENT B

LIST OF ACCOUNTS:

COLI VUL 2 SERIES ACCOUNT OF GWLA

COLI VUL 4 SERIES ACCOUNT OF GWLA

COLI VUL 7 SERIES ACCOUNT OF GWLA

COLI VUL 1 SERIES ACCOUNT OF FGWLA

COLI VUL 2 SERIES ACCOUNT OF FGWLA

COLI VUL 4 SERIES ACCOUNT OF FGWLA

 

4

EX-99.(H)(21) 13 d694125dex99h21.htm EX-99.(H)(21) EX-99.(H)(21)

AMENDMENT No. 2 TO FUND PARTICIPATION AGREEMENT

THIS AMENDMENT TO PARTICIPATION AGREEMENT is made as of this 28th day of August, 2013, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”), GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK, formerly known as FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A-NY”), AMERICAN FUNDS INSURANCE SERIES (“Series”), an open-end management investment company organized under the laws of the Commonwealth of Massachusetts; and CAPITAL RESEARCH AND MANAGEMENT COMPANY (“CRMC”), a corporate organized under the laws of the State of Delaware, (collectively, the “Parties”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Original Agreement (defined below).

RECITALS

WHEREAS, GWL&A, GWL&A-NY, the Series and CRMC are parties to a Fund Participation Agreement dated January 28, 2008, as amended, (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to add the COLI VUL-14 Series Account of GWL&A to the Agreement;

WHEREAS, The Parties desire and agree to amend the Agreement by deleting in its entirety Attachment B of the Agreement and replacing it with the Attachment B attached hereto.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

  1.

All references to the “Account” now include the COLI VUL 14 Series Account of GWL&A;

 

  2.

Attachment B of the Agreement is hereby replaced in its entirety with Attachment B as attached and incorporated by reference to this Amendment.

Except as expressly supplemented, amended or consented to hereby, all of the representations and conditions of the Agreement will remain unamended and will continue to be in full force and effect.

 

1

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 28th day of August, 2013.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

By its authorized officer,

By: /s/ Susan Gile                                                 

Name: Susan Gile                            

Title:   VP - Individual Markets

Date:   8-30-2013

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY OF NEW YORK

By its authorized officer,

By: /s/ Ron Laeyendecker                                    

Name: Ron Laeyendecker

Title:   Senior Vice President

Date:   8-30-2013

AMERICAN FUNDS INSURANCE SERIES

By its authorized officer,

By: /s/ Steven I. Koszalka                                     

Name:  Steven I. Koszalka

Title:    Secretary

Date:    August 28, 2013

CAPITAL RESEARCH AND MANAGEMENT COMPANY

By its authorized officer,

 

By: /s/ Michael J. Downer                                     

Name: Michael J. Downer

Title:   Senior Vice President and Secretary

Date:   August 28, 2013

  

 

2

ATTACHMENT B

LIST OF ACCOUNTS:

COLI VUL 2 SERIES ACCOUNT OF GWLA

COLI VUL 4 SERIES ACCOUNT OF GWLA

COLI VUL 7 SERIES ACCOUNT OF GWLA

COLI VUL 14 SERIES ACCOUNT OF GWLA

COLI VUL 1 SERIES ACCOUNT OF FGWLA

COLI VUL 2 SERIES ACCOUNT OF FGWLA

COLI VUL 4 SERIES ACCOUNT OF FGWLA

 

3

EX-99.(H)(22) 14 d694125dex99h22.htm EX-99.(H)(22) EX-99.(H)(22)

AMENDMENT No. 3 TO FUND PARTICIPATION AGREEMENT

THIS AMENDMENT TO PARTICIPATION AGREEMENT is made as of this 3rd day of April, 2014, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”), GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK, (“GWL&A-NY” and together with GWL&A, “Insurance Company”) and AMERICAN FUNDS INSURANCE SERIES (the “Series”), an open-end management investment company organized under the laws of the Commonwealth of Massachusetts, and CAPITAL RESEARCH AND MANAGEMENT COMPANY (“CRMC”) a corporation organized under the laws of the State of Delaware, (collectively, the “Parties”). Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to such term in the Agreement (defined below).

WHEREAS, GWL&A, GWL&A-NY, the Series, and CRMC are parties to a Fund Participation Agreement dated January 28, 2008, as amended, (the “Agreement”); and

WHEREAS, the Parties desire and agree to amend the Agreement by deleting in its entirety Attachment A and Attachment B of the Agreement and replacing it with Attachment B attached hereto.

NOW, THERFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreements follows:

 

1.

The sixth recital is hereby deleted and replaced with the following:

 

 

“WHEREAS, certain Funds will serve as certain of the underlying investment mediums for the Contracts issued with respect to the Accounts listed on Attachment B; and”

 

2.

The first sentence of Section 4 is hereby deleted and replaced with the following:

 

 

“The Series agrees to make Class 1 shares, Class 2 shares and Class 4 shares of the Funds that offer such share classes available to the Contracts. Insurance Company agrees to give the Series and CRMC at least 30 days’ notice prior to adding any additional Funds or share classes of a Fund as underlying investment options to the Contracts.

 

3.

The reference to “Class 2 shares” in the second paragraph of Section 4 (pursuant to item 1 of Amendment No. 1 to the Agreement) is replaced with “Class 1 shares, Class 2 shares and Class 4 shares.”

 

4.

The provision added by item 2 in Amendment No. 1 to the Agreement is hereby deleted in its entirety and replaced with the following:

 

 

“Insurance Company will be entitled to a Rule 12b-l fee paid by the Series and to be accrued daily and paid monthly at an annual rate of 0.25% of the average daily net assets of the Class 2 shares and the Class 4 shares of each Fund attributable to the Contracts with investments in Accounts corresponding to the Class 2 and Class 4 shares of each Fund for as long as the

 

Page 1 of 6

 

Series’ Plan of Distribution pursuant to Rule 12b-l under the 1940 Act for each of Class 2 shares or Class 4 shares (each, a “12b-l plan”) remains in effect.”

 

5.

Attachment A of the Agreement is hereby deleted in its entirety.

 

6.

Attachment B of the Agreement is hereby replaced in its entirety with Attachment B as attached and incorporated by reference to this Amendment.

 

7.

The attached Attachment C is added to the Agreement.

 

8.

The following Section 28 is added to the Agreement:

 

 

28. Insurance Company, directly or through subcontractors (including a designated affiliate), shall provide the certain services described in this Agreement on behalf of American Funds Distributors, Inc. (“AFD”), American Funds Service Company (the “Transfer Agent”) and the Funds in connection with the sale and servicing of the Contracts in Class 1 shares and Class 2 Shares. The services to be provided by Insurance Company to its Accounts may include, (i) mailing and otherwise making available to Contractholders, shareholder communications including, without limitation, prospectuses, proxy materials, shareholder reports, unaudited semi-annual and audited annual financial statements, and other notices; (ii) handling general questions regarding the Funds from Contractholders including, without limitation, advising as to performance, yield being earned, dividends declared, and providing assistance with other questions concerning the Funds; (iii) preparing and mailing periodic account statements showing the total number of Account units owned by the Contractholder in that account, the value of such units, and purchases, redemptions, dividends, and distributions in the account during the period covered by the statement; and (iv) preparing and mailing IRS Form 1099-R, IRS Form W-2 and/or other IRS forms as required by applicable Internal Revenue Service rules and regulations. Administrative services to Contractholders shall be the responsibility of Insurance Company and shall not be the responsibility of the Funds, AFD, Transfer Agent or any of their affiliates.

 

9.

The following Section 29 is added to the Agreement:

 

 

29. During the term of this Agreement, Insurance Company shall perform the administrative services (“Services”) set forth on Attachment C hereto, as such exhibit may be amended from time to time by mutual consent of the parties, in respect of Accounts holding Class 4 Shares of each Fund. In consideration of Insurance Company performing the Services, the Series agrees to pay Insurance Company an administrative services fee of 0.25% of the average daily net asset value of all Class 4 shares of the Funds held by each Account, payable quarterly, in arrears, pursuant to an Insurance Administrative Services Plan adopted by the Series. The fee will be calculated as the product of (a) the average daily net asset value of all Class 4 shares of the Funds held by each Account during the quarter; (b) the number of days in the quarter; and (c) the quotient of 0.0025 divided by 365. The Series shall pay all fees within forty-five (45) days following the end of the calendar quarter for fees accrued during that quarter. The Series shall not be responsible for payment of fees for Services more than six (6) months in arrears in respect of accounts that were not timely identified by Insurance

 

Page 2 of 6

 

Company as eligible for compensation pursuant to this Agreement. CRMC will evaluate periodically Insurance Company’s service levels, including compliance with established NSCC guidelines, transaction errors, compliance with the prospectus and complaints from Contractholders, in determining whether to continue making payments under the Insurance Administrative Services Plan. Insurance Company represents to the Series and CRMC that it will not receive compensation for the Services from Contractholder fees or any other source.

 

10.

Except as specifically set forth herein, all other provisions of the Agreement shall remain in full force and effect.

 

Page 3 of 6

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first written above.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

 

By:   /s/ Ron Laeyendecker
Name:   Ron Laeyendecker
Title:   Senior Vice President

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK

 

By:   /s/ Susan Gile
Name:   Susan Gile
Title:   VP - Individual Markets

AMERICAN FUNDS INSURANCE SERIES

 

By:   /s/ Steven I. Koszalka
Name:   Steven I. Koszalka
Title:   Secretary

CAPITAL RESEARCH AND MANAGEMENT COMPANY

 

By:   /s/ Michael J. Downer
Name:   Michael J. Downer
Title:   Senior Vice President and Secretary

 

Page 4 of 6

Attachment B

List of Accounts

GWL&A Accounts:

COLI VUL-2 Series Account

COLI VUL-4 Series Account

COLI VUL-7 Series Account

COLI VUL-14 Series Account

Variable Annuity-1 Series Account

Variable Annuity-2 Series Account

GWL&A-NY Accounts:

COLI VUL-1 Series Account

COLI VUL-2 Series Account

COLI VUL-4 Series Account

Variable Annuity-1 Series Account

Variable Annuity-2 Series Account

 

Page 5 of 6

Attachment C

Administrative Services

1.        Periodic Reconciliation. The Insurance Company shall provide the Funds with sufficient information to allow for the periodic reconciliation of outstanding units of Insurance Company Accounts and shares of the Funds.

2.        Record Maintenance. To facilitate the reconciliation activities described in paragraph 1 above, the Insurance Company shall maintain with respect to each Account holding the Funds’ Class 4 Shares and each Contractholder for whom such shares are beneficially owned the following records:

 

  a.

Number of shares;

  b.

Date, price and amount of purchases and redemptions (including dividend reinvestments) and dates and amounts of dividends paid for at least the current year to date;

  c.

Name and address and taxpayer identification numbers;

  d.

Records of distributions and dividend payments; and

  e.

Any transfers of shares.

3.        Fund Information. The Insurance Company shall respond to inquiries from Contractholders regarding the Funds, including questions about the Funds’ objectives and investment strategies.

4.        Shareholder Communications. The Insurance Company shall provide for the delivery of certain Fund-related materials as required by applicable law or as requested by Contractholders. The Fund related materials shall consist of updated prospectuses and any supplements and amendments thereto, statements of additional information, annual and other periodic reports, proxy or information statements and other appropriate shareholder communications. The Insurance Company shall respond to inquiries from Contractholders relating to the services provided by it and inquiries relating to the Funds.

5.        Transactional Services. The Insurance Company shall (a) communicate to the Funds’ transfer agent, purchase, redemption and exchange orders; and (b) communicate to the Accounts and Contractholders, mergers, splits and other reorganization activities of the Funds.

6.        Other Information. The Insurance Company shall provide to the Accounts and Contractholders such other information as shall be required under applicable law and regulations.

 

Page 6 of 6

EX-99.(H)(24) 15 d694125dex99h24.htm EX-99.(H)(24) EX-99.(H)(24)

AMENDMENT TO FUND PARTICIPATION AGREEMENT

THIS AMENDMENT TO FUND PARTICIPATION AGREEMENT effective April 29, 2011, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”), FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“First GWL&A”), COLUMBIA FUNDS VARIABLE INSURANCE TRUST (the “Fund”), COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC (ASSIGNEE OF COLUMBIA MANAGEMENT ADVISORS, LLC) (the “Adviser”), and COLUMBIA MANAGEMENT INVESTMENT DISTIBUTORS, INC. (ASSIGNEE OF COLUMBIA MANAGEMENT DISTRIBUTORS, INC.) (the “Distributor”), (collectively the “Parties”), Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement (defined below).

RECITALS

WHEREAS, GWL&A, First GWL&A, the Fund, the Adviser and the Distributor entered into a Fund Participation Agreement dated April 30, 2009 (the “Agreement”); and

WHEREAS, the Parties desire correct a typographical error on Schedule A to the Agreement; and

WHEREAS, the Parties desire and agree to add the Columbia Variable Portfolio – Mid Cap Growth Fund and the Columbia Variable Portfolio – Small Company Growth Fund to the Designated Portfolios of the Agreement;

WHEREAS, the Parties desire and agree to amend the Agreement by deleting in its entirety Schedule A of the Agreement and replacing it with the Schedule A attached hereto; and

WHEREAS, the Parties desire and agree to amend the Agreement by deleting in its entirety Schedule B of the Agreement and replacing it with the Schedule B attached hereto.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

 

1.

Schedule A of the Agreement is hereby replaced in its entirety with Schedule A as attached and incorporated by reference to this Amendment.

 

 

2.

The Columbia Mid Cap Growth Fund is hereby added as a Designated Portfolio of the Agreement.

 

1

 

3.

Schedule B of the Agreement is hereby replaced in its entirety with Schedule B as attached and incorporated by reference to this Amendment.

 

2

IN WITNESS WHEREOF, the Parties have executed this Amendment effective the date listed above.

 

           GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY
           By its authorized officer,
  By:                                                              
  Title: VP
  Date: 11/8/11
           FIRST GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY
           By its authorized officer,
  By: /s/ Susan Gile                                      
  Title: V.P., Individual Markets
  Date: 11.7.11
           COLUMBIA FUNDS VARIABLE INSURANCE TRUST
           By its authorized officer,
  By:                                                              
  Title: President
  Date:
           COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC
           By its authorized officer,
  By:                                                              
  Title: Senior Vice President
  Date: 11-10-11
           COLUMBIA MANAGEMENT INVESTMENT DISTRIBUTORS, INC.
           By its authorized officer,
  By:                                                              
  Title: Senior Vice President
  Date: 11-10-11

 

 

3

SCHEDULE A

SEPARATE ACCOUNTS

GWL&A Account(s):

COLI VUL-2 Series Account

COLI VUL-4 Series Account

COLI VUL-7 Series Account

FutureFunds Series Account

Variable Annuity-1 Series Account

Variable Annuity-2 Series Account

First GWL&A Account(s):

COLI VUL-1 Series Account

COLI VUL-2 Series Account

COLI VUL-4 Series Account

Variable Annuity-1 Series Account

Variable Annuity-2 Series Account

 

4

SCHEDULE B

Designated Portfolios

Columbia Variable Portfolio - Mid Cap Growth Fund

Columbia Variable Portfolio - Small Cap Value Fund

Columbia Variable Portfolio – Small Company Growth Fund

 

5

EX-99.(H)(25) 16 d694125dex99h25.htm EX-99.(H)(25) EX-99.(H)(25)

AMENDMENT

TO

FUND PARTICIPATION AGREEMENT

WHEREAS, GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”), GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK, formerly known as FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A-NY”), COLUMBIA FUNDS VARIABLE INSURANCE TRUST (the “Fund”), COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC (ASSIGNEE OF COLUMBIA MANAGEMENT ADVISORS, LLC) (the “Adviser”), and COLUMBIA MANAGEMENT INVSETMENT DISTRIBUTORS, INC. (ASSIGNEE OF COLUMBIA MANAGEMENT DISTRIBUTORS, INC.) (the “Distributor”), collectively the Parties, entered into a Fund Participation Agreement dated April 30, 2009, as amended (the “Agreement”); and

WHEREAS, the Parties desire and agree to add GWL&A’s COLI VUL-14 Separate Account to the Agreement; and

WHEREAS, The Parties desire and agree to amend the Agreement by deleting in their entirety Schedules A and B of the Agreement and replacing them with the Schedules A and B attached hereto.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

  1.

GWL&A’s Separate Account COLI VUL-14 Series Account is hereby added to the Agreement.

 

  2.

Schedule A of the Agreement is hereby replaced in its entirety with Schedule A as attached and incorporated by reference to this Amendment.

 

  3.

Schedule B of the Agreement is hereby replaced in its entirety with Schedule B as attached and incorporated by reference to this Amendment.

 

1

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 24th day of October, 2013.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By its authorized officer,

By:

  

/s/ Susan Gile

Title: Susan Gile, VP Individual Markets

Date: 10-24-2013

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY OF NEW YORK

 

By its authorized officer,

By:

  

/s/ Ron Laeyendecker

Title: Ron Laeyendecker, Senior Vice President

Date: 10-24-2013

COLUMBIA FUNDS VARIABLE INSURANCE TRUST

 

By its authorized officer,

By:

  

/s/ J. Kevin Connaughton

Title: J. Kevin Connaughton, President

Date:

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

 

By its authorized officer,

By:

  

                                                                   

Title:

Date:

COLUMBIA MANAGEMENT INVESTMENT DISTRIBUTORS, INC.

 

By its authorized officer,

By:

  

                                                                   

Title:

Date:

 

2

SCHEDULE A

SEPARATE ACCOUNTS

GWL&A Accounts:

COLI VUL-2 Series Account

COLI VUL-4 Series Account

COLI VUL-7 Series Account

COLI VUL-14 Series Account

GWL&A-NY Accounts:

COLI VUL-1 Series Account

COLI VUL-2 Series Account

COLI VUL-4 Series Account

 

3

SCHEDULE B

DESIGNATED PORTFOLIOS

Class 1 shares of all current and future Fund portfolios

 

4

EX-99.(H)(26) 17 d694125dex99h26.htm EX-99.(H)(26) EX-99.(H)(26)

FUND PARTICIPATION AGREEMENT

Great-West Life & Annuity Insurance Company

Great-West Life & Annuity Insurance Company of New York

Columbia Funds Variable Insurance Trust

Columbia Management Investment Advisers, LLC

and

Columbia Management Investment Distributors, Inc.

May 1, 2015

TABLE OF CONTENTS

 

Article I. Sale of Fund Shares

      3  

Article II. Representations and Warranties

      5  

Article III. Prospectuses and Proxy Statements; Voting

      10  

Article IV. Sales Material and Information

      11  

Article V. Fees and Expenses

      12  

Article VI. Diversification and Qualification

      12  

Article VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order

      14  

Article VIII. Indemnification

      16  

Article IX. Applicable Law

      20  

Article X. Termination

      20  

Article XI. Notices

      22  

Article XII. Miscellaneous

      23  

SCHEDULE A

      27  

SCHEDULE B

      28  

SCHEDULE C

      29  

PARTICIPATION AGREEMENT

Among

Great-West Life & Annuity Insurance Company

Great-West Life & Annuity Insurance Company of New York

COLUMBIA FUNDS VARIABLE INSURANCE TRUST

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

and

COLUMBIA MANAGEMENT INVESTMENT DISTRIBUTORS, INC.

THIS AGREEMENT, made and entered into as of this 1st day of May, 2015 (the “Effective Date”), by and among Great-West Life & Annuity Insurance Company and Great-West Life & Annuity Insurance Company of New York (the “Company”), respectively a Colorado and a New York life insurance company, on its own behalf and on behalf of its separate accounts (the “Accounts”); COLUMBIA FUNDS VARIABLE INSURANCE TRUST, an open-end management investment company organized under the laws of the Commonwealth of Massachusetts (the “Fund”); COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC (the “Adviser”), a Delaware limited liability company; and COLUMBIA MANAGEMENT INVESTMENT DISTRIBUTORS, INC. (the “Distributor”), a Massachusetts corporation.

WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the “Variable Insurance Products”) to be offered by insurance companies, many of which have entered into participation agreements similar to this Agreement (hereinafter “Participating Insurance Companies”); and

WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a “portfolio” and representing the interest in a particular managed portfolio of securities and other assets; and

WHEREAS, the Fund is able to rely on an order from the Securities and Exchange Commission (hereinafter the “SEC”) granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the “1940 Act”) and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance separate accounts of life insurance companies that may or may not be affiliated with one another

 

1

and qualified pension and retirement plans (“Qualified Plans”) (hereinafter the “Mixed and Shared Funding Exemptive Order”); and

WHEREAS, the Fund is registered as an open-end management investment company under the 1940 Act and shares of the portfolios are registered under the Securities Act of 1933, as amended (hereinafter the “1933 Act”); and

WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended; and

WHEREAS, the Distributor is duly registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, (the “1934 Act”) and is a member in good standing of the Financial Industry Regulatory Authority (“FINRA”); and

WHEREAS, the Company has issued and plans to continue to issue certain variable life insurance policies and/or variable annuity contracts supported wholly or partially by the Accounts (the “Contracts”), and the Contracts are listed on Schedule A attached hereto and incorporated herein by reference, as such schedule may be amended from time to time by mutual written agreement of the parties; and

WHEREAS, each Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of the Company under the insurance laws of the State of Colorado and New York, to set aside and invest assets attributable to the Contracts; and

WHEREAS, the Company has registered each Account as a unit investment trust under the 1940 Act, unless such Account is exempt from registration thereunder;

WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Company intends to purchase shares in the Portfolios listed on Schedule B attached hereto and incorporated herein by reference, as such schedule may be amended from time to time by mutual written agreement of the parties (the “Portfolios”), on behalf of the Accounts to fund the Contracts, and the Distributor is authorized to sell such shares to unit investment trusts such as the Accounts at net asset value; and

WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Company also intends to continue to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the “Unaffiliated Funds”) on behalf of the Accounts to fund the Contracts.

NOW, THEREFORE, in consideration of their mutual promises, the Company, the Fund, the Distributor and the Adviser agree as follows:

ARTICLE I. Sale of Fund Shares

1.1.      The Distributor agrees to sell to the Company those shares of the Portfolios which the Account orders, executing such orders on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the order for the shares of the Portfolios,

 

2

subject to the terms and conditions set forth in the Fund’s then-current prospectus. For purposes of this Section 1.1, the Company shall be the designee of the Fund for receipt of such orders and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such order sufficiently in advance of 10:00 a.m. Eastern time on the next following Business Day to effect any purchase by 10:00 a.m. Eastern time on that Business Day. The parties agree that receipt by the Fund of notice of such order prior to 9:00 a.m. Eastern time will be deemed to be sufficiently in advance for purposes of the preceding sentence; receipt of such notice between 9:00 a.m. and 10:00 a.m. Eastern time will be deemed to be sufficiently in advance solely in the discretion of the Fund or its designee (which shall not be the Company). Any such notice received between 9:00 a.m. and 10:00 a.m. Eastern time that the Fund or its designee (which shall not be the Company) deems not to have been received sufficiently in advance will become a notice for execution at the net asset value next computed on such next Business Day. “Business Day” shall mean any day on which the New York Stock Exchange is open for trading and on which a Portfolio calculates its net asset value pursuant to the rules of the SEC.

1.2.      The Fund agrees to make shares of the Portfolios available for purchase at the applicable net asset value per share by the Company and the Accounts on those days on which the Fund calculates its Portfolios’ net asset value pursuant to rules of the SEC, and the Fund shall calculate such net asset value on each day on which the New York Stock Exchange is open for trading. Notwithstanding the foregoing, the Fund may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Fund acting in good faith, necessary or appropriate in the best interests of the shareholders of such Portfolio. All orders received by the Company shall be subject to the terms of the then current prospectus of the Fund, including the Fund’s excessive trading policies. The Company shall use its best efforts, and shall reasonably cooperate with, the Fund to enforce stated prospectus policies regarding transactions in Portfolio shares. The Company represents and warrants to the Fund, the Adviser and the Distributor that the Company’s personnel have sufficient expertise and experience to implement this Agreement in accordance with its terms. The Company acknowledges that orders received by it in violation of the Fund’s stated policies may be subsequently revoked or cancelled by the Fund and that the Fund shall not be responsible for any losses incurred by the Company or the Contract owner as a result of such cancellation. In addition, the Company acknowledges that the Fund has the right to refuse any purchase order for any reason, particularly if the Fund determines that a Portfolio would be unable to invest the money effectively in accordance with its investment policies or would otherwise be adversely affected due to the size of the transaction, frequency of trading, or other factors.

1.3.      The Fund will not sell shares of the Portfolios to any other Participating Insurance Company separate account unless an agreement containing provisions the substance of which are the same as Sections 2.1, 2.2 (except with respect to designation of applicable law), 3.5, 3.6, 3.7, and Article VII of this Agreement is in effect to govern such sales.

1.4.      The Fund agrees to redeem for cash, on the Company’s request, any full or fractional shares of the Portfolios held by the Company, executing such requests on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the request for redemption. For purposes of this Section 1.4, the Company shall be the designee of

 

3

the Fund for receipt of requests for redemption and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such request for redemption sufficiently in advance of 10:00 a.m. Eastern time on the next following Business Day to effect any redemption by 10:00 a.m. Eastern time on that Business Day. The parties agree that receipt by the Fund of notice of such order prior to 9:00 a.m. Eastern time will be deemed to be sufficiently in advance for purposes of the preceding sentence; receipt of such notice between 9:00 a.m. and 10:00 a.m. Eastern time will be deemed to be sufficiently in advance solely in the discretion of the Fund or its designee. Any such notice received between 9:00 a.m. and 10:00 a.m. Eastern time that the Fund or its designee deems not to have been received sufficiently in advance will become a notice for execution at the net asset value next computed on such next Business Day.

1.5.      The parties hereto acknowledge that the arrangement contemplated by this Agreement is not exclusive; the Fund’s shares may be sold to other Participating Insurance Companies (subject to Section 1.3) and the cash value of the Contracts may be invested in other investment companies.

1.6.      In the event of net purchases, the Company shall pay for Fund shares by 3:00 p.m. Eastern time on the next Business Day after an order to purchase Fund shares is received in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or by a credit for any shares redeemed the same day as the purchase.

1.7.      The Fund shall pay and transmit the proceeds of redemptions of Fund shares by 2:00 p.m. Eastern Time on the next Business Day after a redemption order is received in accordance with Section 1.4 hereof; provided, however, that the Fund may delay payment in extraordinary circumstances to the extent permitted under Section 22(e) of the 1940 Act. Payment shall be in federal funds transmitted by wire and/or a credit for any shares purchased the same day as the redemption.

Each party has the right to rely on information or confirmations provided by the other party (or by an affiliate of the other party), and shall not be liable in the event that an error is a result of any misinformation supplied by the other party.

1.8.      Issuance and transfer of the Fund’s shares will be by book entry only. Stock certificates will not be issued to the Company or the Accounts. Shares purchased from the Fund will be recorded in an appropriate title for the relevant Account or the relevant sub-account of an Account.

1.9.      The Fund shall furnish same day notice (by electronic communication or telephone, followed by electronic confirmation) to the Company of any income, dividends or capital gain distributions payable on a Portfolio’s shares. The Company hereby elects to receive all such income dividends and capital gain distributions as are payable on a Portfolio’s shares in cash.

1.10.    The Fund shall make the net asset value per share for each Portfolio available to the Company on each Business Day as soon as reasonably practicable after the net asset value per share is calculated and shall use its best efforts to make such net asset value per share

 

4

available by 7:00 p.m. Eastern time. In the event of an error in the computation of a Portfolio’s net asset value per share (“NAV”) or any dividend or capital gain distribution (each, a “pricing error”), the Adviser or the Fund shall notify the Company as soon as possible after discovery of the error. Such notification may be oral, but shall be confirmed promptly in writing. A pricing error shall be corrected in accordance with the Fund’s policies and procedures, which comply in all material respects with applicable law. Upon notification by the Adviser of any overpayment due to a material error, the Company shall promptly remit to the Adviser any overpayment that has not been paid to Contract owners. In no event shall the Company be liable to Contract owners for any such adjustments or underpayment amounts. Only the following pricing errors shall be deemed to be “materially incorrect” or constitute a “material error” for purposes of this Agreement: pricing errors that result in a difference between the erroneous NAV and the correct NAV equal to or greater than $0.01 per share.

1.11.     The parties agree to mutually cooperate with respect to any state insurance law restriction or requirement applicable to the Fund’s investments; provided, however, that the Fund reserves the right not to implement restrictions or take other actions required by state insurance law if the Fund or the Adviser determines that the implementation of the restriction or other action is not in the best interest of Fund shareholders.

ARTICLE II.  Representations and Warranties

2.1.      The Company represents and warrants that: (a) Contracts or interests in the Accounts are or will be registered under the 1933 Act, or are not so registered in proper reliance upon an exemption from such registration requirements (in the event the Company or the Account relies upon an exemption from such registration requirements, the Company undertakes to promptly so notify the Fund); (b) the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws; and (c) the sale of the Contracts shall comply in all material respects with state insurance suitability requirements.

2.2.      The Company represents and warrants that: (a) it is an insurance company duly organized and in good standing under applicable law; (b) it has legally and validly established each Account prior to any issuance or sale of units thereof as a segregated asset account under Colorado and New York law, as applicable; and (c) it has registered each Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts and will maintain such registration for so long as any Contracts are outstanding as required by applicable law or, alternatively, the Company has not registered one or more Accounts in proper reliance upon an exclusion from such registration requirements.

2.3.      The Fund represents and warrants that: (a) the Fund shares sold pursuant to this Agreement shall be registered under the 1933 Act; (b) the Fund shares sold pursuant to this Agreement shall be duly authorized for issuance and sold in compliance with all applicable state and federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act; (c) the Fund is and shall remain registered under the 1940 Act; and (d) the Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares.

 

5

2.4.      The Fund currently does not intend to make any payments to finance distribution expenses pursuant to Rule 12b-1 under the 1940 Act, although it may make such payments in the future subject to applicable law and after providing notice to the Company.

2.5.      The Fund represents and warrants that it shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by applicable law.

2.6.      The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the State of the Commonwealth of Massachusetts and that it does and will comply in all material respects with the 1940 Act.

2.7.      The Fund makes no representation as to whether any aspect of its operations (including, but not limited to, fees and expenses and investment policies) complies with the insurance laws or regulations of the various states.

2.8.      The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with any applicable state and federal securities laws.

2.9.      The Distributor represents and warrants that it is and shall remain duly registered as a broker-dealer under all applicable federal and state securities laws and is a member in good standing with FINRA, and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of any applicable state and federal securities laws.

2.10.    The Fund and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by one or more blanket fidelity bonds or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bonds shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company.

2.11.    To the extent permitted by law and the Fund’s compliance policies and procedures, the Fund and the Adviser represent and warrant that they will provide the Company with notice as is reasonably practicable of any material change affecting the Portfolios (including, but not limited to, any material change in the registration statement or prospectus affecting the Portfolios) and any proxy solicitation affecting the Portfolios and advise the Company concerning the implementation of any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expense by implementing them in conjunction with regular annual updates of the prospectus for the Contracts where reasonably practicable.

2.12.    The Company represents and warrants, for purposes other than diversification under Section 817 of the Internal Revenue Code of 1986 as amended (the “Code”), that the Contracts are currently and at the time of issuance will be treated as annuity contracts or life insurance policies under applicable provisions of the Code, and that it will make every effort to

 

6

maintain such treatment and that it will notify the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, the Company represents and warrants that each Account is a “segregated asset account” and that interests in each Account are offered exclusively through the purchase of or transfer into a “variable contract” within the meaning of such terms under Section 817 of the Code and the regulations thereunder. The Company will use every effort to continue to meet such definitional requirements, and it will notify the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. The Company represents and warrants that it will not purchase Fund shares with assets derived from tax-qualified retirement plans except, indirectly, through Contracts purchased in connection with such plans.

2.13.      The Company represents and warrants that it is currently in compliance, and will remain in compliance, with all applicable anti-money laundering laws, regulations, and requirements. In addition, the Company represents and warrants that it has adopted and implemented policies and procedures reasonably designed to achieve compliance with the applicable requirements administered by the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury.

2.14.      The Company represents and warrants that it is currently in compliance, and will remain in compliance, with all applicable laws, rules and regulations relating to consumer privacy, including, but not limited to, Regulation S-P.

2.15.      The Company represents and warrants that it has adopted, and will at all times during the term of this Agreement maintain, reasonable and appropriate procedures (“Late Trading Procedures”) reasonably designed to ensure that any and all orders relating to the purchase, sale or exchange of Fund shares communicated to the Fund to be treated in accordance with Article I of this Agreement as having been received on a Business Day, have been received by the Valuation Time on such Business Day and were not modified after the Valuation Time, and that all orders received from Contract owners but not rescinded by the Valuation Time were communicated to the Fund or its agent as received for that Business Day. The Company represents and warrants that it has adopted and implemented controls reasonably designed to ensure that all orders received by the Company after the close of the New York Stock Exchange on a particular Business Day will not be aggregated with orders received by the Company before the close of the New York Stock Exchange on such Business Day. “Valuation Time” shall mean the time as of which the Fund calculates net asset value for the shares of the Portfolios on the relevant Business Day.

2.16.      Each transmission of orders by the Company shall constitute a representation by the Company that such orders are accurate and complete and relate to orders received by the Company by the Valuation Time on the Business Day for which the order is to be priced and that such transmission includes all orders relating to Fund shares received from Contract owners but not rescinded by the Valuation Time. The Company agrees to provide the Fund or its designee with a copy of the Late Trading Procedures and such certifications and representations regarding the Late Trading Procedures as the Fund or its designee may reasonably request. The Company will promptly notify the Fund in writing of any material change to the Late Trading Procedures.

 

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2.17  (a)      The Company agrees to cooperate with all requests by the Fund with respect to discouraging, monitoring and terminating patterns of trading that the Fund deems disruptive, including providing no less than weekly, the Taxpayer Identification Number (“TIN”), if known, of any and all Contract owner(s) of the account and the amount, date, name or other identifier of any investment professional(s) associated with the Contract owner(s) or account (if known) and transaction type (purchase, redemption, transfer, or exchange) of every purchase, redemption, transfer or exchange of the Portfolios’ shares held through an Account maintained by the Company.

(i)      The Fund may request such transaction information older than three (3) months from the date of the request as it deems necessary to investigate compliance with policies established by the Fund for the purpose of eliminating or reducing any dilution of the value of the outstanding shares issued by the Fund. If the Company provides the Fund a daily feed, unless otherwise directed by the Fund, the Company agrees to provide the information specified in this Section 2.17(a) for each trading day.

(ii)      The Company agrees to transmit the transaction information that is on its books and records to the Fund or its designee promptly, but in any event not later than five (5) business days, upon the conclusion of the period covered by the information. If the transaction information is not on the Company’s books and records, the Company agrees to use reasonable efforts to: (A) promptly obtain and transmit the requested information; (B) obtain assurances from the Contract owner that the requested information will be provided to the Fund promptly; or (C) if directed by the Fund, restrict or prohibit further purchases of the Fund’s shares from such Contract owner. In such instance, the Company agrees to inform the Fund whether it plans to perform (A), (B), or (C). Responses required by this sub-Section must be communicated in writing and in a format mutually agreed upon by the parties. To the extent practicable, the format for any transaction information provided to the Fund should be consistent with the National Securities Clearing Corporation’s Standardized Data Reporting Format.

(iii)      The Fund agrees not to use the information received pursuant to this Section 2.17(a) for marketing or any other similar purpose without the Company’s prior written consent.

(b)    The Company agrees to execute written instructions from the Fund to restrict or prohibit further purchases or exchanges of the Portfolios’ shares by a Contract owner that has been identified by a Fund as having engaged in transactions of such Portfolios’ shares (directly or indirectly through your account) that violate policies established by the Fund for the purpose of eliminating or reducing any dilution of the value of the outstanding securities issued by the Fund.

 

  (i)

Instructions must include the TIN, if known, and the specific restriction(s) to be executed. If the TIN is not known, the instructions must include an equivalent identifying number of the Contract owner or other agreed upon information to which the instruction relates.

 

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  (ii)

The Company agrees to execute instructions as soon as reasonably practicable, but not later than five (5) business days after receipt by the Company of the instructions.

 

  (iii)

The Company must provide written confirmation to the Fund that instructions have been executed. The Company agrees to provide confirmation as soon as reasonably practicable, but not later than ten (10) business days after the instructions have been executed.

 

  (c)

For purposes of this Section 2.17:

 

  (i)

The term “Fund” includes the Adviser and Columbia Management Investment Services Corp., the Fund’s Transfer Agent, but does not include any “excepted funds” as defined in Rule 22c-2(b) under the 1940 Act.

 

  (ii)

The term “Contract owner” means holder of interests in a variable annuity or variable life insurance Contract issued by the Company.

 

  (iii)

The term “written” includes electronic writings and facsimile transmissions.

2.18      The Company agrees to cooperate fully with any and all efforts by the Fund to assure the Fund that the Company has implemented effective compliance policies and procedures administered by qualified personnel as required by and in accordance with any and all applicable laws, rules and regulations.

2.19      Each party represents that the execution and delivery of this Agreement and the consummation of the transactions contemplated herein have been duly authorized by all necessary corporate or board action, as applicable, by such party and when so executed and delivered this Agreement will be the valid and binding obligation of such party enforceable in accordance with its terms.

ARTICLE III.   Prospectuses and Proxy Statements; Voting

3.1.        At least annually, the Adviser or Distributor shall provide the Company with as many copies of the Fund’s current prospectus as the Company may reasonably request, with expenses to be borne in accordance with Schedule C hereof. If requested by the Company in lieu thereof, the Distributor shall provide such documentation (including an electronic version of the current prospectus) and other assistance as is reasonably necessary in order for the Company once each year (or more frequently if the prospectus for the Fund is amended) to have the prospectus for the Contracts and the prospectus for the Fund printed together in one document.

3.2.        If applicable state or federal laws or regulations require that the Statement of Additional Information (“SAI”) for the Fund be distributed to all Contract owners, then the Distributor shall provide the Company with copies of the Fund’s SAI in such quantities, with expenses to be borne in accordance with Schedule C hereof, as the Company may reasonably require to permit timely distribution thereof to Contract owners. The Distributor shall also provide an SAI to any Contract owner or prospective owner who requests such SAI from the Fund.

 

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3.3.       The Distributor shall provide the Company with copies of the Fund’s proxy materials, reports to shareholders and other communications to shareholders in such quantity, with expenses to be borne in accordance with Schedule C hereof, as the Company may reasonably require to permit timely distribution thereof to Contract owners.

3.4.       It is understood and agreed that, except with respect to information regarding the Company provided in writing by that party, the Company shall not be responsible for the content of the prospectus or SAI for the Fund. It is also understood and agreed that, except with respect to information regarding the Fund, the Distributor, the Adviser or the Portfolios provided in writing by the Fund, the Distributor or the Adviser, neither the Fund, the Distributor nor Adviser are responsible for the content of the prospectus or SAI for the Contracts.

3.5.       If and to the extent required by law the Company shall:

(a)    solicit voting instructions from Contract owners;

(b)     vote the Portfolio shares held in the Accounts in accordance with instructions received from Contract owners;

(c)     vote Portfolio shares held in the Accounts for which no instructions have been received in the same proportion as Portfolio shares for which instructions have been received from Contract owners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners; and

(d)     vote Portfolio shares held in its general account or otherwise in the same proportion as Portfolio shares for which instructions have been received from Contract owners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require such voting by the insurance company. The Company reserves the right to vote Fund shares in its own right, to the extent permitted by law.

3.6.       The Company shall be responsible for assuring that each of its separate accounts holding shares of a Portfolio calculates voting privileges as directed by the Fund and agreed to by the Company and the Fund. The Fund agrees to promptly notify the Company of any changes of interpretations or amendments of the Mixed and Shared Funding Exemptive Order.

3.7.       The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders. Further, the Fund will act in accordance with the SEC’s interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the SEC may promulgate with respect thereto.

ARTICLE IV. Sales Material and Information

4.1.       The Company shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that the Company develops or proposes to use and in which the Fund (or Portfolio thereof), the Adviser or the Distributor is named in connection with the Contracts, at least ten (10) business days prior to its use. No such material shall be used if the Fund objects to such use within five (5) business days after receipt of such material.

 

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4.2.       The Company shall not give any information or make any representations or statements on behalf of the Fund in connection with the sale of the Contracts other than the information or representations contained in the registration statement, including the prospectus or SAI for the Fund shares, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by the Fund, Distributor or Adviser, except with the permission of the Fund, Distributor or Adviser.

4.3.       The Fund, the Adviser or the Distributor shall furnish, or shall cause to be furnished, to the Company, a copy of each piece of sales literature or other promotional material in which the Company and/or its Accounts are named at least ten (10) business days prior to its use. No such material shall be used if the Company objects to such use within five (5) business days after receipt of such material.

4.4.       The Fund, the Distributor and the Adviser shall not give any information or make any representations on behalf of the Company or concerning the Company, the Accounts, or the Contracts other than the information or representations contained in a registration statement, including the prospectus or SAI for the Contracts, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by the Company or its designee, except with the permission of the Company.

4.5.       For purposes of Articles IV and VIII, the phrase “sales literature and other promotional material” includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as the Internet or other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and shareholder reports, and proxy materials (including solicitations for voting instructions) and any other material constituting sales literature or advertising under the FINRA rules, the 1933 Act or the 1940 Act.

4.6.       At the request of any party to this Agreement, each other party will make available to the other party’s independent auditors and/or representatives of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party’s obligations under this Agreement.

ARTICLE V. Fees and Expenses

5.1.       The Fund, the Distributor and the Adviser shall pay no fee or other compensation to the Company under this Agreement, and the Company shall pay no fee or other compensation to the Fund, the Distributor or Adviser under this Agreement; provided, however, (a) the parties will bear their own expenses as reflected in Schedule C and other provisions of this Agreement, and (b) the parties may enter into other agreements relating to the Company’s investment in the Fund, including services agreements.

 

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Each Party agrees to cooperate with the others, as applicable, in arranging to print, mail and/or deliver, in a timely manner, combined or coordinated prospectuses or other materials of the Portfolio and the Accounts.

ARTICLE VI. Diversification and Qualification

6.1.       The Fund, Distributor and Adviser represent and warrant that the Fund and each Portfolio thereof will at all times comply with Section 817(h) of the Code and Treasury Regulation §1.817-5, as amended from time to time, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Fund, the Distributor or the Adviser shall, upon request, provide to the Company a written diversification report, which shall show the results of the quarterly Section 817(h) diversification test and include, upon reasonable request, a certification as to whether each Portfolio complies with the Section 817(h) diversification requirement.

6.2.       The Fund, the Distributor and the Adviser agree that shares of the Portfolios will be sold only to Participating Insurance Companies and their separate accounts and to Qualified Plans. No shares of any Portfolio of the Fund will be sold to the general public. However, it is understood by the Company that the Fund may sell shares of any Portfolio to any person eligible to invest in that Portfolio in accordance with applicable provisions of Section 817(h) under the Code and the regulations thereunder, and that if such provisions are not applicable, then the Fund may sell shares of any Portfolio to any person, including members of the general public.

6.3.       The Fund, the Distributor and the Adviser represent and warrant that the Fund and each Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect.

6.4.       The Company agrees that if the Internal Revenue Service (“IRS”) asserts in writing in connection with any governmental audit or review of the Company (or, to the Company’s knowledge, of any Contract owner) that any Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or the Company otherwise becomes aware of any facts that could give rise to any claim against the Fund, Distributor or Adviser as a result of such a failure or alleged failure:

(a)       The Company shall promptly notify the Fund, the Distributor and the Adviser of such assertion or potential claim;

(b)       The Company shall consult with the Fund, the Distributor and the Adviser as to how to minimize any liability that may arise as a result of such failure or alleged failure;

(c)       The Company shall use its best efforts to minimize any liability of the Fund, the Distributor and the Adviser resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent;

 

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(d)       Any written materials to be submitted by the Company to the IRS, any Contract owner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by the Company to the Fund, the Distributor and the Adviser (together with any supporting information or analysis) within at least two (2) business days prior to submission;

(e)       The Company shall provide the Fund, the Distributor and the Adviser with such cooperation as the Fund, the Distributor and the Adviser shall reasonably request (including, without limitation, by permitting the Fund, the Distributor and the Adviser to review the relevant books and records of the Company) in order to facilitate review by the Fund, the    Distributor and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure;

(f)       The Company shall not with respect to any claim of the IRS or any Contract owner that would give rise to a claim against the Fund, the Distributor and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any allowable administrative or judicial appeals, without the express written consent of the Fund, the Distributor and the Adviser, which shall not be unreasonably withheld; provided that, the Company shall not be required to appeal any adverse judicial decision unless the Fund and the Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Company shall not be required to bear the costs and expenses, including reasonable attorney’s fees, incurred by the Company in complying with this clause (f).

ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order

7.1.       The Board of Trustees of the Fund (the “Board”) will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the Contract owners of all separate accounts investing in the Fund. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio is being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of Contract owners. The Board shall promptly inform the Company if it determines that an irreconcilable material conflict exists and the implications thereof.

7.2.       The Company will report any potential or existing conflicts of which it is aware to the Board. The Company will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by the Company to inform the Board whenever Contract owner voting

 

13

instructions are to be disregarded. Such responsibilities shall be carried out by the Company with a view only to the interests of its Contract owners.

7.3.       If it is determined by a majority of the Board, or a majority of its directors who are not interested persons of the Fund, the Distributor, the Adviser or any subadviser to any of the Portfolios (the “Independent Directors”), that a material irreconcilable conflict exists, the Company and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Directors), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another Portfolio, or submitting the question whether such segregation should be implemented to a vote of all affected Contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account. The Company’s responsibility to take remedial action shall be carried out by the Company with a view only to the interests of Contract owners.

7.4.       If a material irreconcilable conflict arises because of a decision by the Company to disregard Contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, the Company may be required, at the Fund’s election, to withdraw the Account’s investment in the Fund and terminate this Agreement; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six-month period the Adviser, the Distributor and the Fund shall continue to accept and implement orders by the Company for the purchase (and redemption) of shares of the Fund, subject to the terms of the Fund’s then-current prospectus.

7.5.       If a material irreconcilable conflict arises because a particular state insurance regulator’s decision applicable to the Company conflicts with the majority of other state regulators, then the Company will withdraw the Account’s investment in the Fund and terminate this Agreement within six months after the Board informs the Company in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Until the end of the foregoing six-month period, the Fund shall continue to accept and implement orders by the Company for the purchase (and redemption) of shares of the Fund, subject to the terms of the Fund’s then-current prospectus.

7.6.       For purposes of Sections 7.3 through 7.5 of this Agreement, a majority of the Independent Directors shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. The Company shall not be required by Section 7.3 to

 

14

establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contract owners affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then the Company will withdraw the Account’s investment in the Fund and terminate this Agreement within six (6) months after the Board informs the Company in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the Independent Directors.

7.7.       If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the extent that terms and conditions substantially identical to such Sections are contained in such Rule(s) as so amended or adopted.

ARTICLE VIII. Indemnification

8.1.       Indemnification by the Company

(a)       The Company agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their respective officers, employees, agents and directors or trustees and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.1) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of the Company) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages or liabilities (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund’s shares or the Contracts and:

(i)       arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or prospectus or SAI covering the Contracts or contained in the Contracts or sales literature or other promotional material for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of the Fund for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature or other

 

15

promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or Fund shares; or

(ii)       arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature or other promotional material of the Fund not supplied by the Company or persons under its control) or wrongful conduct of the Company or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or

(iii)       arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature or other promotional material of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund by or on behalf of the Company; or

(iv)       arise as a result of any failure by the Company to provide the services and furnish the materials under the terms of this Agreement; or

(v)       arise out of or result from any material breach of any representation and/or warranty made by the Company in this Agreement or arise out of or result from any other material breach of this Agreement by the Company, including without limitation Section 2.12 and Section 6.4 hereof,

as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof.

(b)       The Company shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or gross negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement.

(c)       The Company shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Company in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Company of any such claim shall not relieve the Company from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Company has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Company shall be entitled to participate, at its own expense, in the defense of such action. The Company also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the

 

16

Company to such party of the Company’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Company will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

(d)       The Indemnified Parties will promptly notify the Company of (i) the issuance by any court or regulatory body of any stop order, cease and desist order, or other similar order with respect to the Fund’s registration statement under the 1933 Act or prospectus, (ii) any request by the SEC for any amendment to such registration statement or prospectus that may affect the offering of shares of the Fund, (iii) the initiation of any litigation or proceedings for that purpose or for any other purpose relating to the registration or offering of the Fund’s shares, or (iv) any other action or circumstances that may prevent the lawful offer or sale of shares of any Fund in any state or jurisdiction, including, without limitation, any circumstances in which (a) such shares are not registered and, in all material respects, issued and sold in accordance with applicable state and federal law, or (b) such law precludes the use of such shares as an underlying investment medium of the Contracts issued or to be issued by the Company. The Fund and Adviser will make every reasonable effort to prevent the issuance, with respect to any Fund, of any such stop order, cease and desist order or similar order and, if any such order is issued, to obtain the lifting thereof at the earliest possible time.

8.2.       Indemnification by the Adviser

(a)       The Adviser agrees to indemnify and hold harmless the Company and its directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.2) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Portfolios or the Contracts and:

(i)       arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, the Distributor or the Adviser (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Adviser, the Distributor or the Fund by or on behalf of the Company for use in the registration statement, prospectus or SAI for the Fund or in sales literature or other promotional material (or any amendment or supplement to any of the

 

17

foregoing) or otherwise for use in connection with the sale of the Contracts or the Portfolios; or

(ii)       arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Fund, the Distributor or the Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Portfolios; or

(iii)       arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to the Company by or on behalf of the Adviser, the Distributor or the Fund; or

(iv)       arise as a result of any failure by the Fund, the Distributor or the Adviser to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or

(v)       arise out of or result from any material breach of any representation and/or warranty made by the Fund, the Distributor or the Adviser in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser, the Distributor or the Fund; or

(vi)       arise out of or result from the incorrect or untimely calculation or reporting by the Fund, the Distributor or the Adviser of the daily net asset value per share (subject to Section 1.10 of this Agreement) or dividend or capital gain distribution rate;

as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI hereof.

(b)       The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or gross negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement.

(c)       The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Adviser in writing within a reasonable time after the summons or other first legal

 

18

process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

(d)       The Company and its broker-dealer subsidiary agree promptly to notify the Fund, the Distributor or the Adviser of (i) the issuance by any court or regulatory body of any stop order, cease and desist order, or other similar order with respect to each Account relating to the Contracts, (ii) any request by the SEC for any amendment to the registration statement or Account prospectus that may affect the offering of shares of the Fund, (iii) the initiation of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account for that purpose or for any other purpose relating to the registration or offering of each Account’s interests pursuant to the Contracts, or (iv) any other action or circumstances that may prevent the lawful offer or sale of said interests in any state or jurisdiction, including, without limitation, any circumstances in which said interests are not registered and, in all material respects, issued and sold in accordance with applicable state and federal law. The Company will make every reasonable effort to prevent the issuance of any such stop order, cease and desist order or similar order and, if any such order is issued, to obtain the lifting thereof at the earliest possible time.

ARTICLE IX. Applicable Law

9.1.       This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the Commonwealth of Massachusetts, without regard to conflict of laws provisions.

9.2.       This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the SEC may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith.

ARTICLE X. Termination

10.1.       This Agreement shall terminate:

 

19

(a)      at the option of any party, with or without cause, with respect to some or all Portfolios, upon sixty (60) days advance written notice delivered to the other parties; or

(b)      at the option of the Company by written notice to the other parties with respect to any Portfolio based upon the Company’s determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; or

(c)      at the option of the Company by written notice to the other parties with respect to any Portfolio in the event any of the Portfolio’s shares are not registered, issued or sold in accordance with applicable state and/or federal law or such law precludes the use of such shares as the underlying investment media of the Contracts issued or to be issued by the Company; or

(d)      at the option of the Fund, Distributor or Adviser in the event that formal administrative proceedings are instituted against the Company by FINRA, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding the Company’s duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares, if, in each case, the Fund, Distributor or Adviser, as the case may be, reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of the Company to perform its obligations under this Agreement; or

(e)      at the option of the Company in the event that formal administrative proceedings are instituted against the Fund, the Distributor or the Adviser by FINRA, the SEC, or any state securities or insurance department or any other regulatory body, if the Company reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of the Fund, the Distributor or the Adviser to perform their obligations under this Agreement; or

(f)      At the option of the Company by written notice to the Fund, the Adviser and the Distributor, in the event that any Portfolio (i) ceases to qualify, or the Company reasonably believes such Portfolio may fail to so qualify, as a Regulated Investment Company under Subchapter M or (ii) fails to comply with the Section 817(h) diversification requirements specified in Article VI hereof; or

(g)      at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the “defaulting party”) other than as described in Section 10.1(a)-(h); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non-defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party; or

(h)      at any time upon written agreement of all parties to this Agreement.

10.2.  Notice Requirement

 

20

No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore,

(a)      in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties;

(b)      in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e) or 10.1(g) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and

(c)      in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given in advance of the effective date of termination, which date shall be determined by the party sending the notice.

10.3. Effect of Termination

Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or the Company to meet Section 817(h) of the Code diversification requirements, the Fund, the Distributor and the Adviser shall, at the option of the Company, continue to make available additional shares of the Fund pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as “Existing Contracts”). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Fund, redeem investments in the Fund and/or invest in the Fund upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement.

10.4. Surviving Provisions

Notwithstanding any termination of this Agreement, each party’s obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement.

ARTICLE XI. Notices

Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other parties.

If to the Company:

Great West Life and Annuity Insurance Company

 

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Great West Life and Annuity Insurance Company of New York

8515 East Orchard Road

Greenwood Village CO 80111

Attention: Chief Compliance Officer

If to the Fund:

Columbia Funds Variable Insurance Trust

225 Franklin Street

Boston, MA 02110

Attention: Secretary

If to the Adviser:

Columbia Management Investment Advisers, LL

225 Franklin Street

Boston, MA 02110

Attention: Secretary

If to the Distributor:

Columbia Management Investment Distributors, Inc.

225 Franklin Street

Boston, MA 02101

Attention: Secretary

ARTICLE XII. Miscellaneous

12.1. Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected party until such time as such information may come into the public domain. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary.

12.2. The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect.

12.3. This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument.

 

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12.4. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby.

12.5. Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, FINRA and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby.

12.6. Any controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be settled by arbitration in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

12.7. The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws.

12.8. This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto.

12.9. The Company agrees that the obligations assumed by the Fund, Distributor and the Adviser pursuant to this Agreement shall be limited in any case to the Fund, Distributor and Adviser and their respective assets and the Company shall not seek satisfaction of any such obligation from the shareholders of the Fund, Distributor or the Adviser, the Directors, officers, employees or agents of the Fund, Distributor or Adviser, or any of them.

12.10. The Fund, the Distributor and the Adviser agree that the obligations assumed by the Company pursuant to this Agreement shall be limited in any case to the Company and its assets and neither the Fund, Distributor nor Adviser shall seek satisfaction of any such obligation from the shareholders of the Company, the directors, officers, employees or agents of the Company, or any of them.

12.11. No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Adviser and the Fund, and the Distributor and the Fund.

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be effective as of the Effective Date, to be executed in its name and on its behalf by its duly authorized representative, and its seal to be hereunder affixed hereto as of the date specified below.

 

                                           

   Great-West Life & Annuity Insurance Company  

                         

  By its authorized officer,    
  By:  

/s/ Susan Gile

    
    Title: Susan Gile, V.P. Individual Markets  
 

Great-West Life & Annuity Insurance Company of New York

By its authorized officer,

  
  By:  

/s/ Ron Laeyendecker

    
    Title: Ron Laeyendecker, Senior Vice President  

                                         

  
  COLUMBIA FUNDS VARIABLE INSURANCE TRUST  
  By its authorized officer,    
  By:  

 

    
    Title: Vice President    
  COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC  
  By its authorized officer,    
  By:  

 

    
    Title: Managing Director    
  COLUMBIA MANAGEMENT INVESTMENT DISTRIBUTORS INC.  
  By its authorized officer,    
  By:  

 

    
  Title: Managing Director    

 

24

SCHEDULE A

CONTRACTS

Variable Annuity-1 Series Account of Great-West Life & Annuity Insurance Company (GWLA) contracts

Variable Annuity-1 Series Account of Great-West Life & Annuity Insurance Company of New York (GWLANY) contracts

Variable Annuity-2 Series Account of GWLA contracts

Variable Annuity-2 Series Account of GWLANY contracts

FutureFunds Series Account of GWLA contracts

FutureFunds II Series Account of GWLA contracts

FutureFunds II Series Account of GWLANY contracts

COLI VUL-1 Series Account of GWLANY contracts

COLI VUL-2 Series Account of GWLA contracts

COLI VUL-2 Series Account of GWLANY contracts

COLI VUL-4 Series Account of GWLA contracts

COLI VUL-7 Series Account of GWLA contracts

 

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SCHEDULE B

Columbia Funds Variable Insurance Trust

Class 1 and Class 2 Shares of all Columbia Variable Portfolios* under Columbia Funds Variable Insurance Trust

*Portfolios managed by Columbia Management Investment Advisers, LLC

 

26

SCHEDULE C

EXPENSES

The Fund and/or the Distributor and/or Adviser, and the Company will coordinate the functions and pay the costs of the completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Fund’s share of the total costs determined according to the number of pages of the Fund’s respective portions of the documents.

 

       
Item    Function   

Party Responsible

for Coordination

 

   

Party Responsible

for Expense

 

       
Mutual Fund Prospectus    Electronic copy of combined prospectuses made available    Company    Current – Fund Prospective – Company
       
     Distribution (including postage) to Current Clients    Company    Fund
       
     Distribution (including postage) to Prospective Clients    Company    Company
       
Product Prospectus    Printing and Distribution for Current and Prospective Clients    Company    Company
       
Mutual Fund Prospectus Update & Distribution    Electronic copy, if Required by Fund, Distributor or Adviser    Fund, Distributor or Adviser    Fund, Distributor or Adviser
       
     If Required by Company    Company (Fund, Distributor or Adviser to provide Company with document in PDF format)    Company

 

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Item    Function   

Party Responsible

for Coordination

 

   

Party Responsible for Expense

 

       
Product Prospectus Update & Distribution    If Required by Fund, Distributor or Adviser    Company    Fund, Distributor or Adviser
       
     If Required by Company    Company    Company
       
Mutual Fund SAI    Printing    Fund, Distributor or Adviser    Fund, Distributor or Adviser
       
     Distribution (including postage)    Party who receives the request    Party who receives the request
       
Product SAI    Printing    Company    Company
       
     Distribution    Company    Company
       
Proxy Material for Mutual Fund    Electronic copy of proxy if required by Law    Fund, Distributor or Adviser    Fund, Distributor or Adviser
       
     Distribution (including labor) if proxy required by Law    Company    Fund, Distributor or Adviser
       
     Printing & distribution if required by Company    Company    Company
       
Mutual Fund Annual & Semi-Annual Report    Electronic copy made available    Fund, Distributor or Adviser    Fund, Distributor or Adviser
       
     Distribution    Company    Fund, Distributor or Adviser
       
Operations of the Accounts    Federal registration of units of separate account (24f-2 fees)    Company    Company

 

28

EX-99.(H)(27) 18 d694125dex99h27.htm EX-99.(H)(27) EX-99.(H)(27)

FUND PARTICIPATION AGREEMENT

Great-West Life & Annuity Insurance Company

Great-West Life & Annuity Insurance Company of New York

Columbia Funds Variable Insurance Trust I

Columbia Management Investment Advisers, LLC

and

Columbia Management Investment Distributors, Inc.

May 1, 2015

TABLE OF CONTENTS

 

Article I. Sale of Fund Shares

    3

Article II. Representations and Warranties

    5

Article III. Prospectuses and Proxy Statements; Voting

    10

Article IV. Sales Material and Information

    11

Article V. Fees and Expenses

    12

Article VI. Diversification and Qualification

    12

Article VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order

    14

Article VIII. Indemnification

    16

Article IX. Applicable Law

    20

Article X. Termination

    20

Article XI. Notices

    22

Article XII. Miscellaneous

    23

SCHEDULE A

    26

SCHEDULE B

    27

SCHEDULE C

    28

 

PARTICIPATION AGREEMENT

Among

Great-West Life & Annuity Insurance Company

Great-West Life & Annuity Insurance Company of New York

COLUMBIA FUNDS VARIABLE INSURANCE TRUST I

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

and

COLUMBIA MANAGEMENT INVESTMENT DISTRIBUTORS, INC.

THIS AGREEMENT, made and entered into as of this 1st day of May, 2015 (the “Effective Date”), by and among Great-West Life & Annuity Insurance Company and Great-West Life & Annuity Insurance Company of New York (the “Company”), respectively a Colorado and a New York life insurance company, on its own behalf and on behalf of its separate accounts (the “Accounts”); COLUMBIA FUNDS VARIABLE INSURANCE TRUST I, an open-end management investment company organized under the laws of the State of Delaware (the “Fund”); COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC (the “Adviser”), a Delaware limited liability company; and COLUMBIA MANAGEMENT INVESTMENT DISTRIBUTORS, INC. (the “Distributor”), a Massachusetts corporation.

WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the “Variable Insurance Products”) to be offered by insurance companies, many of which have entered into participation agreements similar to this Agreement (hereinafter “Participating Insurance Companies”); and

WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a “portfolio” and representing the interest in a particular managed portfolio of securities and other assets; and

WHEREAS, the Fund is able to rely on an order from the Securities and Exchange Commission (hereinafter the “SEC”) granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the “1940 Act”) and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance

 

1

separate accounts of life insurance companies that may or may not be affiliated with one another and qualified pension and retirement plans (“Qualified Plans”) (hereinafter the “Mixed and Shared Funding Exemptive Order”); and

WHEREAS, the Fund is registered as an open-end management investment company under the 1940 Act and shares of the portfolios are registered under the Securities Act of 1933, as amended (hereinafter the “1933 Act”); and

WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended; and

WHEREAS, the Distributor is duly registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, (the “1934 Act”) and is a member in good standing of the Financial Industry Regulatory Authority (“FINRA”); and

WHEREAS, the Company has issued and plans to continue to issue certain variable life insurance policies and/or variable annuity contracts supported wholly or partially by the Accounts (the “Contracts”), and the Contracts are listed on Schedule A attached hereto and incorporated herein by reference, as such schedule may be amended from time to time by mutual written agreement of the parties; and

WHEREAS, each Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of the Company under the insurance laws of the State of Colorado and New York, to set aside and invest assets attributable to the Contracts; and

WHEREAS, the Company has registered each Account as a unit investment trust under the 1940 Act, unless such Account is exempt from registration thereunder;

WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Company intends to purchase shares in the Portfolios listed on Schedule B attached hereto and incorporated herein by reference, as such schedule may be amended from time to time by mutual written agreement of the parties (the “Portfolios”), on behalf of the Accounts to fund the Contracts, and the Distributor is authorized to sell such shares to unit investment trusts such as the Accounts at net asset value; and

WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Company also intends to continue to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the “Unaffiliated Funds”) on behalf of the Accounts to fund the Contracts.

NOW, THEREFORE, in consideration of their mutual promises, the Company, the Fund, the Distributor and the Adviser agree as follows:

 

2

ARTICLE I.   Sale of Fund Shares

1.1.     The Distributor agrees to sell to the Company those shares of the Portfolios which the Account orders, executing such orders on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the order for the shares of the Portfolios, subject to the terms and conditions set forth in the Fund’s then-current prospectus. For purposes of this Section 1.1, the Company shall be the designee of the Fund for receipt of such orders and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such order sufficiently in advance of 10:00 a.m. Eastern time on the next following Business Day to effect any purchase by 10:00 a.m. Eastern time on that Business Day. The parties agree that receipt by the Fund of notice of such order prior to 9:00 a.m. Eastern time will be deemed to be sufficiently in advance for purposes of the preceding sentence; receipt of such notice between 9:00 a.m. and 10:00 a.m. Eastern time will be deemed to be sufficiently in advance solely in the discretion of the Fund or its designee (which shall not be the Company). Any such notice received between 9:00 a.m. and 10:00 a.m. Eastern time that the Fund or its designee (which shall not be the Company) deems not to have been received sufficiently in advance will become a notice for execution at the net asset value next computed on such next Business Day. “Business Day” shall mean any day on which the New York Stock Exchange is open for trading and on which a Portfolio calculates its net asset value pursuant to the rules of the SEC.

1.2.     The Fund agrees to make shares of the Portfolios available for purchase at the applicable net asset value per share by the Company and the Accounts on those days on which the Fund calculates its Portfolios’ net asset value pursuant to rules of the SEC, and the Fund shall calculate such net asset value on each day on which the New York Stock Exchange is open for trading. Notwithstanding the foregoing, the Fund may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Fund acting in good faith, necessary or appropriate in the best interests of the shareholders of such Portfolio. All orders received by the Company shall be subject to the terms of the then current prospectus of the Fund, including the Fund’s excessive trading policies. The Company shall use its best efforts, and shall reasonably cooperate with, the Fund to enforce stated prospectus policies regarding transactions in Portfolio shares. The Company represents and warrants to the Fund, the Adviser and the Distributor that the Company’s personnel have sufficient expertise and experience to implement this Agreement in accordance with its terms. The Company acknowledges that orders received by it in violation of the Fund’s stated policies may be subsequently revoked or cancelled by the Fund and that the Fund shall not be responsible for any losses incurred by the Company or the Contract owner as a result of such cancellation. In addition, the Company acknowledges that the Fund has the right to refuse any purchase order for any reason, particularly if the Fund determines that a Portfolio would be unable to invest the money effectively in accordance with its investment policies or would otherwise be adversely affected due to the size of the transaction, frequency of trading, or other factors.

1.3.     The Fund will not sell shares of the Portfolios to any other Participating Insurance Company separate account unless an agreement containing provisions the substance of which are

 

3

the same as Sections 2.1, 2.2 (except with respect to designation of applicable law), 3.5, 3.6, 3.7, and Article VII of this Agreement is in effect to govern such sales.

1.4.    The Fund agrees to redeem for cash, on the Company’s request, any full or fractional shares of the Portfolios held by the Company, executing such requests on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the request for redemption. For purposes of this Section 1.4, the Company shall be the designee of the Fund for receipt of requests for redemption and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such request for redemption sufficiently in advance of 10:00 a.m. Eastern time on the next following Business Day to effect any redemption by 10:00 a.m. Eastern time on that Business Day. The parties agree that receipt by the Fund of notice of such order prior to 9:00 a.m. Eastern time will be deemed to be sufficiently in advance for purposes of the preceding sentence; receipt of such notice between 9:00 a.m. and 10:00 a.m. Eastern time will be deemed to be sufficiently in advance solely in the discretion of the Fund or its designee. Any such notice received between 9:00 a.m. and 10:00 a.m. Eastern time that the Fund or its designee deems not to have been received sufficiently in advance will become a notice for execution at the net asset value next computed on such next Business Day.

1.5.    The parties hereto acknowledge that the arrangement contemplated by this Agreement is not exclusive; the Fund’s shares may be sold to other Participating Insurance Companies (subject to Section 1.3) and the cash value of the Contracts may be invested in other investment companies.

1.6.    In the event of net purchases, the Company shall pay for Fund shares by 3:00 p.m. Eastern time on the next Business Day after an order to purchase Fund shares is received in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or by a credit for any shares redeemed the same day as the purchase.

1.7.    The Fund shall pay and transmit the proceeds of redemptions of Fund shares by 2:00 p.m. Eastern Time on the next Business Day after a redemption order is received in accordance with Section 1.4 hereof; provided, however, that the Fund may delay payment in extraordinary circumstances to the extent permitted under Section 22(e) of the 1940 Act. Payment shall be in federal funds transmitted by wire and/or a credit for any shares purchased the same day as the redemption.

Each party has the right to rely on information or confirmations provided by the other party (or by an affiliate of the other party), and shall not be liable in the event that an error is a result of any misinformation supplied by the other party.

1.8.    Issuance and transfer of the Fund’s shares will be by book entry only. Stock certificates will not be issued to the Company or the Accounts. Shares purchased from the Fund will be recorded in an appropriate title for the relevant Account or the relevant sub-account of an Account.

 

4

1.9.     The Fund shall furnish same day notice (by electronic communication or telephone, followed by electronic confirmation) to the Company of any income, dividends or capital gain distributions payable on a Portfolio’s shares. The Company hereby elects to receive all such income dividends and capital gain distributions as are payable on a Portfolio’s shares in cash.

1.10.     The Fund shall make the net asset value per share for each Portfolio available to the Company on each Business Day as soon as reasonably practicable after the net asset value per share is calculated and shall use its best efforts to make such net asset value per share available by 7:00 p.m. Eastern time. In the event of an error in the computation of a Portfolio’s net asset value per share (“NAV”) or any dividend or capital gain distribution (each, a “pricing error”), the Adviser or the Fund shall notify the Company as soon as possible after discovery of the error. Such notification may be oral, but shall be confirmed promptly in writing. A pricing error shall be corrected in accordance with the Fund’s policies and procedures, which comply in all material respects with applicable law. Upon notification by the Adviser of any overpayment due to a material error, the Company shall promptly remit to the Adviser any overpayment that has not been paid to Contract owners. In no event shall the Company be liable to Contract owners for any such adjustments or underpayment amounts. Only the following pricing errors shall be deemed to be “materially incorrect” or constitute a “material error” for purposes of this Agreement: pricing errors that result in a difference between the erroneous NAV and the correct NAV equal to or greater than $0.01 per share.

1.11.     The parties agree to mutually cooperate with respect to any state insurance law restriction or requirement applicable to the Fund’s investments; provided, however, that the Fund reserves the right not to implement restrictions or take other actions required by state insurance law if the Fund or the Adviser determines that the implementation of the restriction or other action is not in the best interest of Fund shareholders.

ARTICLE II. Representations and Warranties

2.1.     The Company represents and warrants that: (a) Contracts or interests in the Accounts are or will be registered under the 1933 Act, or are not so registered in proper reliance upon an exemption from such registration requirements (in the event the Company or the Account relies upon an exemption from such registration requirements, the Company undertakes to promptly so notify the Fund); (b) the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws; and (c) the sale of the Contracts shall comply in all material respects with state insurance suitability requirements.

2.2.     The Company represents and warrants that: (a) it is an insurance company duly organized and in good standing under applicable law; (b) it has legally and validly established each Account prior to any issuance or sale of units thereof as a segregated asset account under Colorado and New York law, as applicable; and (c) it has registered each Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts and will maintain such registration for so long as any Contracts are outstanding as required by applicable law or, alternatively, the Company has not

 

5

registered one or more Accounts in proper reliance upon an exclusion from such registration requirements.

2.3.     The Fund represents and warrants that: (a) the Fund shares sold pursuant to this Agreement shall be registered under the 1933 Act; (b) the Fund shares sold pursuant to this Agreement shall be duly authorized for issuance and sold in compliance with all applicable state and federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act; (c) the Fund is and shall remain registered under the 1940 Act; and (d) the Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares.

2.4.     The Fund currently does not intend to make any payments to finance distribution expenses pursuant to Rule 12b-1 under the 1940 Act, although it may make such payments in the future subject to applicable law and after providing notice to the Company.

2.5.     The Fund represents and warrants that it shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by applicable law.

2.6.     The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the State of Delaware and that it does and will comply in all material respects with the 1940 Act.

2.7.     The Fund makes no representation as to whether any aspect of its operations (including, but not limited to, fees and expenses and investment policies) complies with the insurance laws or regulations of the various states.

2.8.     The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with any applicable state and federal securities laws.

2.9.     The Distributor represents and warrants that it is and shall remain duly registered as a broker-dealer under all applicable federal and state securities laws and is a member in good standing with FINRA, and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of any applicable state and federal securities laws.

2.10.    The Fund and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by one or more blanket fidelity bonds or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bonds shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company.

 

6

2.11.     To the extent permitted by law and the Fund’s compliance policies and procedures, the Fund and the Adviser represent and warrant that they will provide the Company with notice as is reasonably practicable of any material change affecting the Portfolios (including, but not limited to, any material change in the registration statement or prospectus affecting the Portfolios) and any proxy solicitation affecting the Portfolios and advise the Company concerning the implementation of any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expense by implementing them in conjunction with regular annual updates of the prospectus for the Contracts where reasonably practicable.

2.12.     The Company represents and warrants, for purposes other than diversification under Section 817 of the Internal Revenue Code of 1986 as amended (the “Code”), that the Contracts are currently and at the time of issuance will be treated as annuity contracts or life insurance policies under applicable provisions of the Code, and that it will make every effort to maintain such treatment and that it will notify the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, the Company represents and warrants that each Account is a “segregated asset account” and that interests in each Account are offered exclusively through the purchase of or transfer into a “variable contract” within the meaning of such terms under Section 817 of the Code and the regulations thereunder. The Company will use every effort to continue to meet such definitional requirements, and it will notify the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. The Company represents and warrants that it will not purchase Fund shares with assets derived from tax-qualified retirement plans except, indirectly, through Contracts purchased in connection with such plans.

2.13.     The Company represents and warrants that it is currently in compliance, and will remain in compliance, with all applicable anti-money laundering laws, regulations, and requirements. In addition, the Company represents and warrants that it has adopted and implemented policies and procedures reasonably designed to achieve compliance with the applicable requirements administered by the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury.

2.14.     The Company represents and warrants that it is currently in compliance, and will remain in compliance, with all applicable laws, rules and regulations relating to consumer privacy, including, but not limited to, Regulation S-P.

2.15.     The Company represents and warrants that it has adopted, and will at all times during the term of this Agreement maintain, reasonable and appropriate procedures (“Late Trading Procedures”) reasonably designed to ensure that any and all orders relating to the purchase, sale or exchange of Fund shares communicated to the Fund to be treated in accordance with Article I of this Agreement as having been received on a Business Day, have been received by the Valuation Time on such Business Day and were not modified after the Valuation Time, and that all orders received from Contract owners but not rescinded by the Valuation Time were communicated to the Fund or its agent as received for that Business Day. The Company

 

7

represents and warrants that it has adopted and implemented controls reasonably designed to ensure that all orders received by the Company after the close of the New York Stock Exchange on a particular Business Day will not be aggregated with orders received by the Company before the close of the New York Stock Exchange on such Business Day. “Valuation Time” shall mean the time as of which the Fund calculates net asset value for the shares of the Portfolios on the relevant Business Day.

2.16.     Each transmission of orders by the Company shall constitute a representation by the Company that such orders are accurate and complete and relate to orders received by the Company by the Valuation Time on the Business Day for which the order is to be priced and that such transmission includes all orders relating to Fund shares received from Contract owners but not rescinded by the Valuation Time. The Company agrees to provide the Fund or its designee with a copy of the Late Trading Procedures and such certifications and representations regarding the Late Trading Procedures as the Fund or its designee may reasonably request. The Company will promptly notify the Fund in writing of any material change to the Late Trading Procedures.

2.17 (a)         The Company agrees to cooperate with all requests by the Fund with respect to discouraging, monitoring and terminating patterns of trading that the Fund deems disruptive, including providing no less than weekly, the Taxpayer Identification Number (“TIN”), if known, of any and all Contract owner(s) of the account and the amount, date, name or other identifier of any investment professional(s) associated with the Contract owner(s) or account (if known) and transaction type (purchase, redemption, transfer, or exchange) of every purchase, redemption, transfer or exchange of the Portfolios’ shares held through an Account maintained by the Company.

(i)     The Fund may request such transaction information older than three (3) months from the date of the request as it deems necessary to investigate compliance with policies established by the Fund for the purpose of eliminating or reducing any dilution of the value of the outstanding shares issued by the Fund. If the Company provides the Fund a daily feed, unless otherwise directed by the Fund, the Company agrees to provide the information specified in this Section 2.17(a) for each trading day.

(ii)     The Company agrees to transmit the transaction information that is on its books and records to the Fund or its designee promptly, but in any event not later than five (5) business days, upon the conclusion of the period covered by the information. If the transaction information is not on the Company’s books and records, the Company agrees to use reasonable efforts to: (A) promptly obtain and transmit the requested information; (B) obtain assurances from the Contract owner that the requested information will be provided to the Fund promptly; or (C) if directed by the Fund, restrict or prohibit further purchases of the Fund’s shares from such Contract owner. In such instance, the Company agrees to inform the Fund whether it plans to perform (A), (B), or (C). Responses required by this sub-Section must be communicated in writing and in a format mutually agreed upon by the parties. To the extent practicable, the format for any transaction information provided to the Fund should be consistent with the National Securities Clearing Corporation’s Standardized Data Reporting Format.

 

8

(iii)     The Fund agrees not to use the information received pursuant to this Section 2.17(a) for marketing or any other similar purpose without the Company’s prior written consent.

(b)     The Company agrees to execute written instructions from the Fund to restrict or prohibit further purchases or exchanges of the Portfolios’ shares by a Contract owner that has been identified by a Fund as having engaged in transactions of such Portfolios’ shares (directly or indirectly through your account) that violate policies established by the Fund for the purpose of eliminating or reducing any dilution of the value of the outstanding securities issued by the Fund.

 

  (i)

Instructions must include the TIN, if known, and the specific restriction(s) to be executed. If the TIN is not known, the instructions must include an equivalent identifying number of the Contract owner or other agreed upon information to which the instruction relates.

 

  (ii)

The Company agrees to execute instructions as soon as reasonably practicable, but not later than five (5) business days after receipt by the Company of the instructions.

 

  (iii)

The Company must provide written confirmation to the Fund that instructions have been executed. The Company agrees to provide confirmation as soon as reasonably practicable, but not later than ten (10) business days after the instructions have been executed.

(c)     For purposes of this Section 2.17:

 

  (i)

The term “Fund” includes the Adviser and Columbia Management Investment Services Corp., the Fund’s Transfer Agent, but does not include any “excepted funds” as defined in Rule 22c-2(b) under the 1940 Act.

 

  (ii)

The term “Contract owner” means holder of interests in a variable annuity or variable life insurance Contract issued by the Company.

 

  (iii)

The term “written” includes electronic writings and facsimile transmissions.

2.18     The Company agrees to cooperate fully with any and all efforts by the Fund to assure the Fund that the Company has implemented effective compliance policies and procedures administered by qualified personnel as required by and in accordance with any and all applicable laws, rules and regulations.

2.19     Each party represents that the execution and delivery of this Agreement and the consummation of the transactions contemplated herein have been duly authorized by all necessary corporate or board action, as applicable, by such party and when so executed and delivered this Agreement will be the valid and binding obligation of such party enforceable in accordance with its terms.

 

9

ARTICLE III. Prospectuses and Proxy Statements: Voting

3.1.     At least annually, the Adviser or Distributor shall provide the Company with as many copies of the Fund’s current prospectus as the Company may reasonably request, with expenses to be borne in accordance with Schedule C hereof. If requested by the Company in lieu thereof, the Distributor shall provide such documentation (including an electronic version of the current prospectus) and other assistance as is reasonably necessary in order for the Company once each year (or more frequently if the prospectus for the Fund is amended) to have the prospectus for the Contracts and the prospectus for the Fund printed together in one document.

3.2.     If applicable state or federal laws or regulations require that the Statement of Additional Information (“SAI”) for the Fund be distributed to all Contract owners, then the Distributor shall provide the Company with copies of the Fund’s SAI in such quantities, with expenses to be borne in accordance with Schedule C hereof, as the Company may reasonably require to permit timely distribution thereof to Contract owners. The Distributor shall also provide an SAI to any Contract owner or prospective owner who requests such SAI from the Fund.

3.3.     The Distributor shall provide the Company with copies of the Fund’s proxy materials, reports to shareholders and other communications to shareholders in such quantity, with expenses to be borne in accordance with Schedule C hereof, as the Company may reasonably require to permit timely distribution thereof to Contract owners.

3.4.     It is understood and agreed that, except with respect to information regarding the Company provided in writing by that party, the Company shall not be responsible for the content of the prospectus or SAI for the Fund. It is also understood and agreed that, except with respect to information regarding the Fund, the Distributor, the Adviser or the Portfolios provided in writing by the Fund, the Distributor or the Adviser, neither the Fund, the Distributor nor Adviser are responsible for the content of the prospectus or SAI for the Contracts.

3.5.     If and to the extent required by law the Company shall:

(a)     solicit voting instructions from Contract owners;

(b)     vote the Portfolio shares held in the Accounts in accordance with instructions received from Contract owners;

(c)     vote Portfolio shares held in the Accounts for which no instructions have been received in the same proportion as Portfolio shares for which instructions have been received from Contract owners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners; and

(d) vote Portfolio shares held in its general account or otherwise in the same proportion as Portfolio shares for which instructions have been received from Contract owners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require such

 

10

voting by the insurance company. The Company reserves the right to vote Fund shares in its own right, to the extent permitted by law.

3.6.     The Company shall be responsible for assuring that each of its separate accounts holding shares of a Portfolio calculates voting privileges as directed by the Fund and agreed to by the Company and the Fund. The Fund agrees to promptly notify the Company of any changes of interpretations or amendments of the Mixed and Shared Funding Exemptive Order.

3.7.     The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders. Further, the Fund will act in accordance with the SEC’s interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the SEC may promulgate with respect thereto.

ARTICLE IV. Sales Material and Information

4.1.     The Company shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that the Company develops or proposes to use and in which the Fund (or Portfolio thereof), the Adviser or the Distributor is named in connection with the Contracts, at least ten (10) business days prior to its use. No such material shall be used if the Fund objects to such use within five (5) business days after receipt of such material.

4.2.     The Company shall not give any information or make any representations or statements on behalf of the Fund in connection with the sale of the Contracts other than the information or representations contained in the registration statement, including the prospectus or SAI for the Fund shares, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by the Fund, Distributor or Adviser, except with the permission of the Fund, Distributor or Adviser.

4.3.     The Fund, the Adviser or the Distributor shall furnish, or shall cause to be furnished, to the Company, a copy of each piece of sales literature or other promotional material in which the Company and/or its Accounts are named at least ten (10) business days prior to its use. No such material shall be used if the Company objects to such use within five (5) business days after receipt of such material.

4.4.     The Fund, the Distributor and the Adviser shall not give any information or make any representations on behalf of the Company or concerning the Company, the Accounts, or the Contracts other than the information or representations contained in a registration statement, including the prospectus or SAI for the Contracts, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by the Company or its designee, except with the permission of the Company.

4.5.     For purposes of Articles IV and VIII, the phrase “sales literature and other promotional material” includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media;

 

11

e.g., on-line networks such as the Internet or other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and shareholder reports, and proxy materials (including solicitations for voting instructions) and any other material constituting sales literature or advertising under the FINRA rules, the 1933 Act or the 1940 Act.

4.6.     At the request of any party to this Agreement, each other party will make available to the other party’s independent auditors and/or representatives of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party’s obligations under this Agreement.

ARTICLE V. Fees and Expenses

5.1.     The Fund, the Distributor and the Adviser shall pay no fee or other compensation to the Company under this Agreement, and the Company shall pay no fee or other compensation to the Fund, the Distributor or Adviser under this Agreement; provided, however, (a) the parties will bear their own expenses as reflected in Schedule C and other provisions of this Agreement, and (b) the parties may enter into other agreements relating to the Company’s investment in the Fund, including services agreements.

Each Party agrees to cooperate with the others, as applicable, in arranging to print, mail and/or deliver, in a timely manner, combined or coordinated prospectuses or other materials of the Portfolio and the Accounts.

ARTICLE VI. Diversification and Qualification

6.1.     The Fund, Distributor and Adviser represent and warrant that the Fund and each Portfolio thereof will at all times comply with Section 817(h) of the Code and Treasury Regulation §1.817-5, as amended from time to time, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Fund, the Distributor or the Adviser shall, upon request, provide to the Company a written diversification report, which shall show the results of the quarterly Section 817(h) diversification test and include, upon reasonable request, a certification as to whether each Portfolio complies with the Section 817(h) diversification requirement.

6.2.     The Fund, the Distributor and the Adviser agree that shares of the Portfolios will be sold only to Participating Insurance Companies and their separate accounts and to Qualified Plans. No shares of any Portfolio of the Fund will be sold to the general public. However, it is understood by the Company that the Fund may sell shares of any Portfolio to any person eligible to invest in that Portfolio in accordance with applicable provisions of Section 817(h) under the

 

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Code and the regulations thereunder, and that if such provisions are not applicable, then the Fund may sell shares of any Portfolio to any person, including members of the general public.

6.3.     The Fund, the Distributor and the Adviser represent and warrant that the Fund and each Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect.

6.4.     The Company agrees that if the Internal Revenue Service (“IRS”) asserts in writing in connection with any governmental audit or review of the Company (or, to the Company’s knowledge, of any Contract owner) that any Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or the Company otherwise becomes aware of any facts that could give rise to any claim against the Fund, Distributor or Adviser as a result of such a failure or alleged failure:

(a)     The Company shall promptly notify the Fund, the Distributor and the Adviser of such assertion or potential claim;

(b)     The Company shall consult with the Fund, the Distributor and the Adviser as to how to minimize any liability that may arise as a result of such failure or alleged failure;

(c)     The Company shall use its best efforts to minimize any liability of the Fund, the Distributor and the Adviser resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent;

(d)     Any written materials to be submitted by the Company to the IRS, any Contract owner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by the Company to the Fund, the Distributor and the Adviser (together with any supporting information or analysis) within at least two (2) business days prior to submission;

(e)     The Company shall provide the Fund, the Distributor and the Adviser with such cooperation as the Fund, the Distributor and the Adviser shall reasonably request (including, without limitation, by permitting the Fund, the Distributor and the Adviser to review the relevant books and records of the Company) in order to facilitate review by the Fund, the Distributor and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure;

(f)     The Company shall not with respect to any claim of the IRS or any Contract owner that would give rise to a claim against the Fund, the Distributor and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any allowable administrative or judicial appeals, without the express written consent of the Fund, the Distributor and the Adviser, which shall not be unreasonably withheld; provided that, the Company shall not be required to appeal any adverse judicial decision unless the Fund and the

 

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Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Company shall not be required to bear the costs and expenses, including reasonable attorney’s fees, incurred by the Company in complying with this clause (f).

ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order

7.1.     The Board of Trustees of the Fund (the “Board”) will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the Contract owners of all separate accounts investing in the Fund. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio is being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of Contract owners. The Board shall promptly inform the Company if it determines that an irreconcilable material conflict exists and the implications thereof.

7.2.     The Company will report any potential or existing conflicts of which it is aware to the Board. The Company will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by the Company to inform the Board whenever Contract owner voting instructions are to be disregarded. Such responsibilities shall be carried out by the Company with a view only to the interests of its Contract owners.

7.3.     If it is determined by a majority of the Board, or a majority of its directors who are not interested persons of the Fund, the Distributor, the Adviser or any subadviser to any of the Portfolios (the “Independent Directors”), that a material irreconcilable conflict exists, the Company and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Directors), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another Portfolio, or submitting the question whether such segregation should be implemented to a vote of all affected Contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account. The Company’s responsibility to take remedial action shall be carried out by the Company with a view only to the interests of Contract owners.

 

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7.4.     If a material irreconcilable conflict arises because of a decision by the Company to disregard Contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, the Company may be required, at the Fund’s election, to withdraw the Account’s investment in the Fund and terminate this Agreement; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six-month period the Adviser, the Distributor and the Fund shall continue to accept and implement orders by the Company for the purchase (and redemption) of shares of the Fund, subject to the terms of the Fund’s then-current prospectus.

7.5.     If a material irreconcilable conflict arises because a particular state insurance regulator’s decision applicable to the Company conflicts with the majority of other state regulators, then the Company will withdraw the Account’s investment in the Fund and terminate this Agreement within six months after the Board informs the Company in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Until the end of the foregoing six-month period, the Fund shall continue to accept and implement orders by the Company for the purchase (and redemption) of shares of the Fund, subject to the terms of the Fund’s then-current prospectus.

7.6.     For purposes of Sections 7.3 through 7.5 of this Agreement, a majority of the Independent Directors shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. The Company shall not be required by Section 7.3 to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contract owners affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then the Company will withdraw the Account’s investment in the Fund and terminate this Agreement within six (6) months after the Board informs the Company in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the Independent Directors.

7.7.     If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall

 

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continue in effect only to the extent that terms and conditions substantially identical to such Sections are contained in such Rule(s) as so amended or adopted.

ARTICLE VIII.   Indemnification

8.1.     Indemnification by the Company

(a)     The Company agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their respective officers, employees, agents and directors or trustees and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.1) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of the Company) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages or liabilities (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund’s shares or the Contracts and:

(i)     arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or prospectus or SAI covering the Contracts or contained in the Contracts or sales literature or other promotional material for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of the Fund for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or Fund shares; or

(ii)     arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature or other promotional material of the Fund not supplied by the Company or persons under its control) or wrongful conduct of the Company or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or

(iii)     arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature or other promotional material of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not

 

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misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund by or on behalf of the Company; or

(iv)     arise as a result of any failure by the Company to provide the services and furnish the materials under the terms of this Agreement; or

(v)     arise out of or result from any material breach of any representation and/or warranty made by the Company in this Agreement or arise out of or result from any other material breach of this Agreement by the Company, including without limitation Section 2.12 and Section 6.4 hereof,

as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof.

(b)     The Company shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or gross negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement.

(c)     The Company shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Company in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Company of any such claim shall not relieve the Company from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Company has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Company shall be entitled to participate, at its own expense, in the defense of such action. The Company also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Company to such party of the Company’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Company will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

(d)     The Indemnified Parties will promptly notify the Company of (i) the issuance by any court or regulatory body of any stop order, cease and desist order, or other similar order with respect to the Fund’s registration statement under the 1933 Act or prospectus, (ii) any request by the SEC for any amendment to such registration statement or prospectus that may affect the offering of shares of the Fund, (iii) the initiation of any litigation or proceedings for that purpose or for any other purpose relating to the registration or offering of the Fund’s shares, or (iv) any other action or circumstances that may prevent the lawful offer or sale of shares of any Fund in any state or jurisdiction, including, without limitation, any circumstances in which (a) such shares are not registered and, in all material respects, issued and sold in

 

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accordance with applicable state and federal law, or (b) such law precludes the use of such shares as an underlying investment medium of the Contracts issued or to be issued by the Company. The Fund and Adviser will make every reasonable effort to prevent the issuance, with respect to any Fund, of any such stop order, cease and desist order or similar order and, if any such order is issued, to obtain the lifting thereof at the earliest possible time.

8.2.     Indemnification by the Adviser

(a)     The Adviser agrees to indemnify and hold harmless the Company and its directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.2) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Portfolios or the Contracts and:

(i)     arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, the Distributor or the Adviser (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Adviser, the Distributor or the Fund by or on behalf of the Company for use in the registration statement, prospectus or SAI for the Fund or in sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or the Portfolios; or

(ii)     arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Fund, the Distributor or the Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Portfolios; or

(iii)     arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or

 

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statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to the Company by or on behalf of the Adviser, the Distributor or the Fund; or

(iv)     arise as a result of any failure by the Fund, the Distributor or the Adviser to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or

(v)     arise out of or result from any material breach of any representation and/or warranty made by the Fund, the Distributor or the Adviser in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser, the Distributor or the Fund; or

(vi)     arise out of or result from the incorrect or untimely calculation or reporting by the Fund, the Distributor or the Adviser of the daily net asset value per share (subject to Section 1.10 of this Agreement) or dividend or capital gain distribution rate;

as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI hereof.

(b)     The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or gross negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement.

(c)     The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by

 

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such party independently in connection with the defense thereof other than reasonable costs of investigation.

(d)     The Company and its broker-dealer subsidiary agree promptly to notify the Fund, the Distributor or the Adviser of (i) the issuance by any court or regulatory body of any stop order, cease and desist order, or other similar order with respect to each Account relating to the Contracts, (ii) any request by the SEC for any amendment to the registration statement or Account prospectus that may affect the offering of shares of the Fund, (iii) the initiation of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account for that purpose or for any other purpose relating to the registration or offering of each Account’s interests pursuant to the Contracts, or (iv) any other action or circumstances that may prevent the lawful offer or sale of said interests in any state or jurisdiction, including, without limitation, any circumstances in which said interests are not registered and, in all material respects, issued and sold in accordance with applicable state and federal law. The Company will make every reasonable effort to prevent the issuance of any such stop order, cease and desist order or similar order and, if any such order is issued, to obtain the lifting thereof at the earliest possible time.

ARTICLE IX.   Applicable Law

9.1.     This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the Commonwealth of Massachusetts, without regard to conflict of laws provisions.

9.2.     This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the SEC may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith.

ARTICLE X.   Termination

10.1.    This Agreement shall terminate:

(a)     at the option of any party, with or without cause, with respect to some or all Portfolios, upon sixty (60) days advance written notice delivered to the other parties; or

(b)     at the option of the Company by written notice to the other parties with respect to any Portfolio based upon the Company’s determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; or

(c)     at the option of the Company by written notice to the other parties with respect to any Portfolio in the event any of the Portfolio’s shares are not registered, issued or sold in accordance with applicable state and/or federal law or such law precludes the use of such shares as the underlying investment media of the Contracts issued or to be issued by the Company; or

 

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(d)     at the option of the Fund, Distributor or Adviser in the event that formal administrative proceedings are instituted against the Company by FINRA, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding the Company’s duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares, if, in each case, the Fund, Distributor or Adviser, as the case may be, reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of the Company to perform its obligations under this Agreement; or

(e)     at the option of the Company in the event that formal administrative proceedings are instituted against the Fund, the Distributor or the Adviser by FINRA, the SEC, or any state securities or insurance department or any other regulatory body, if the Company reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of the Fund, the Distributor or the Adviser to perform their obligations under this Agreement; or

(f)     At the option of the Company by written notice to the Fund, the Adviser and the Distributor, in the event that any Portfolio (i) ceases to qualify, or the Company reasonably believes such Portfolio may fail to so qualify, as a Regulated Investment Company under Subchapter M or (ii) fails to comply with the Section 817(h) diversification requirements specified in Article VI hereof; or

(g)     at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the “defaulting party”) other than as described in Section 10.1(a)-(h); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non-defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party; or

(h)     at any time upon written agreement of all parties to this Agreement.

10.2.     Notice Requirement

No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore,

(a)     in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties;

(b)     in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e) or 10.1(g) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and

 

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(c)     in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given in advance of the effective date of termination, which date shall be determined by the party sending the notice.

10.3.     Effect of Termination

Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or the Company to meet Section 817(h) of the Code diversification requirements, the Fund, the Distributor and the Adviser shall, at the option of the Company, continue to make available additional shares of the Fund pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as “Existing Contracts”). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Fund, redeem investments in the Fund and/or invest in the Fund upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement.

10.4.     Surviving Provisions

Notwithstanding any termination of this Agreement, each party’s obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement.

ARTICLE XI.   Notices

Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other parties.

If to the Company:

Great West Life and Annuity Insurance Company

Great West Life and Annuity Insurance Company of New York

8515 East Orchard Road

Greenwood Village CO 80111

Attention: Chief Compliance Officer

 

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If to the Fund:

Columbia Funds Variable Insurance Trust I

225 Franklin Street

Boston, MA 02110

Attention: Secretary

If to the Adviser:

Columbia Management Investment Advisers, LLC

225 Franklin Street

Boston, MA 02110

Attention: Secretary

If to the Distributor:

Columbia Management Investment Distributors, Inc.

225 Franklin Street

Boston, MA 02101

Attention: Secretary

ARTICLE XII.     Miscellaneous

12.1.     Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected party until such time as such information may come into the public domain. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary.

12.2.     The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect.

12.3.     This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument.

12.4.     If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby.

12.5.     Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, FINRA and state insurance regulators) and shall permit such authorities reasonable access to its books and records in

 

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connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby.

12.6.     Any controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be settled by arbitration in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

12.7.     The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws.

12.8.     This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto.

12.9.     The Company agrees that the obligations assumed by the Fund, Distributor and the Adviser pursuant to this Agreement shall be limited in any case to the Fund, Distributor and Adviser and their respective assets and the Company shall not seek satisfaction of any such obligation from the shareholders of the Fund, Distributor or the Adviser, the Directors, officers, employees or agents of the Fund, Distributor or Adviser, or any of them.

12.10.     The Fund, the Distributor and the Adviser agree that the obligations assumed by the Company pursuant to this Agreement shall be limited in any case to the Company and its assets and neither the Fund, Distributor nor Adviser shall seek satisfaction of any such obligation from the shareholders of the Company, the directors, officers, employees or agents of the Company, or any of them.

12.11.     No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Adviser and the Fund, and the Distributor and the Fund.

 

24

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be effective as of the Effective Date, to be executed in its name and on its behalf by its duly authorized representative, and its seal to be hereunder affixed hereto as of the date specified below.

 

                                           

   Great-West Life & Annuity Insurance Company  

                         

  By its authorized officer,    
  By:  

/s/ Susan Gile                    

    
    Title: Susan Gile - VP - Individual Markets  
 

Great-West Life & Annuity Insurance Company of New York

By its authorized officer,

  
  By:  

/s/ Ron Laeyendecker

    
    Title: Ron Laeyendecker Senior Vice President    
  COLUMBIA FUNDS VARIABLE INSURANCE TRUST I  
  By its authorized officer,    
  By:  

 

  

                                                 

  
    Title: Vice President    
  COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC  
  By its authorized officer,    
  By:  

 

    
    Title: Managing Director    
  COLUMBIA MANAGEMENT INVESTMENT DISTRIBUTORS INC.  
  By its authorized officer,    
  By:  

 

    
  Title: Managing Director    

 

25

SCHEDULE A

CONTRACTS

Variable Annuity-1 Series Account of Great-West Life & Annuity Insurance Company (GWLA) contracts

Variable Annuity-1 Series Account of Great-West Life & Annuity Insurance Company of New York (GWLANY) contracts

Variable Annuity-2 Series Account of GWLA contracts

Variable Annuity-2 Series Account of GWLANY contracts

FutureFunds Series Account of GWLA contracts

FutureFunds II Series Account of GWLA contracts

FutureFunds II Series Account of GWLANY contracts

COLI VUL-1 Series Account of GWLANY contracts

COLI VUL-2 Series Account of GWLA contracts

COLI VUL-2 Series Account of GWLANY contracts

COLI VUL-4 Series Account of GWLA contracts

COLI VUL-7 Series Account of GWLA contracts

 

26

SCHEDULE B

Columbia Funds Variable Insurance Trust I

Class 1 and Class 2 Shares of all Columbia Variable Portfolios* under Columbia Funds Variable Insurance Trust I

* Portfolios managed by Columbia Management Investment Advisers, LLC

 

27

SCHEDULE C

EXPENSES

The Fund and/or the Distributor and/or Adviser, and the Company will coordinate the functions and pay the costs of the completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Fund’s share of the total costs determined according to the number of pages of the Fund’s respective portions of the documents.

 

Item    Function   

Party Responsible

for Coordination

   

Party Responsible

for Expense

Mutual Fund

Prospectus

   

Electronic copy of combined

prospectuses made

available

    Company    Current - Fund Prospective - Company
    

Distribution

(including postage)

to Current Clients

    Company    Fund
    

Distribution

(including postage)

to Prospective Clients

    Company    Company
Product Prospectus   

Printing and

Distribution for

Current and

Prospective Clients

    Company    Company

Mutual Fund

Prospectus Update & Distribution

   

Electronic copy, if

Required by Fund, Distributor

or Adviser

   

Fund, Distributor or

Adviser

    Fund, Distributor or Adviser
    

If Required by

Company

   

Company (Fund,

Distributor or

Adviser to provide

Company with

document in PDF

format)

    Company

 

28

Item    Function   

Party Responsible

for Coordination

    Party Responsible for Expense

Product Prospectus

Update &

Distribution

   

If Required by Fund, Distributor or

Adviser

    Company    Fund, Distributor or Adviser
    

If Required by

Company

    Company    Company
Mutual Fund SAI    Printing    Fund, Distributor or Adviser    Fund, Distributor or Adviser
    

Distribution

(including postage)

    Party who receives the request    Party who receives the request
Product SAI    Printing    Company    Company
     Distribution    Company    Company

Proxy Material for

Mutual Fund

   

Electronic copy of

proxy if required by

Law

    Fund, Distributor or Adviser    Fund, Distributor or Adviser
    

Distribution

(including labor) if

proxy required by

Law

    Company    Fund, Distributor or Adviser
    

Printing &

distribution if

required by Company

    Company    Company

Mutual Fund Annual

& Semi-Annual

Report

    Electronic copy made available    Fund, Distributor or Adviser    Fund, Distributor or Adviser
     Distribution    Company    Fund, Distributor or Adviser

Operations of the

Accounts

   

Federal registration

of units of separate

account (24f-2 fees)

    Company    Company

 

29

EX-99.(H)(28) 19 d694125dex99h28.htm EX-99.(H)(28) EX-99.(H)(28)

FUND PARTICIPATION AGREEMENT

Great-West Life & Annuity Insurance Company

Great-West Life & Annuity Insurance Company of New York

Columbia Funds Variable Series Trust II

Columbia Management Investment Advisers, LLC

and

Columbia Management Investment Distributors, Inc.

May 1, 2015

TABLE OF CONTENTS

 

Article I. Sale of Fund Shares

   

3

Article II. Representations and Warranties

   

5

Article III. Prospectuses and Proxy Statements; Voting

   

10

Article IV. Sales Material and Information

   

11

Article V. Fees and Expenses

   

12

Article VI. Diversification and Qualification

   

12

Article VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order

   

14

Article VIII. Indemnification

   

16

Article IX. Applicable Law

   

20

Article X. Termination

   

20

Article XI. Notices

   

22

Article XII. Miscellaneous

   

23

SCHEDULE A

   

27

SCHEDULE B

   

28

SCHEDULE C

   

29

PARTICIPATION AGREEMENT

Among

Great-West Life & Annuity Insurance Company

Great-West Life & Annuity Insurance Company of New York

COLUMBIA FUNDS VARIABLE SERIES TRUST II

COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC

and

COLUMBIA MANAGEMENT INVESTMENT DISTRIBUTORS, INC.

THIS AGREEMENT, made and entered into as of this 1st day of May, 2015 (the “Effective Date”), by and among Great-West Life & Annuity Insurance Company and Great-West Life & Annuity Insurance Company of New York (the “Company”), respectively a Colorado and a New York life insurance company, on its own behalf and on behalf of its separate accounts (the “Accounts”); COLUMBIA FUNDS VARIABLE SERIES TRUST II, an open-end management investment company organized under the laws of the Commonwealth of Massachusetts (the “Fund”); COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC (the “Adviser”), a Delaware limited liability company; and COLUMBIA MANAGEMENT INVESTMENT DISTRIBUTORS, INC. (the “Distributor”), a Massachusetts corporation.

WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the “Variable Insurance Products”) to be offered by insurance companies, many of which have entered into participation agreements similar to this Agreement (hereinafter “Participating Insurance Companies”); and

WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a “portfolio” and representing the interest in a particular managed portfolio of securities and other assets; and

WHEREAS, the Fund is able to rely on an order from the Securities and Exchange Commission (hereinafter the “SEC”) granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the “1940 Act”) and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance

 

1

separate accounts of life insurance companies that may or may not be affiliated with one another and qualified pension and retirement plans (“Qualified Plans”) (hereinafter the “Mixed and Shared Funding Exemptive Order”); and

WHEREAS, the Fund is registered as an open-end management investment company under the 1940 Act and shares of the portfolios are registered under the Securities Act of 1933, as amended (hereinafter the “1933 Act”); and

WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended; and

WHEREAS, the Distributor is duly registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, (the “1934 Act”) and is a member in good standing of the Financial Industry Regulatory Authority (“FINRA”); and

WHEREAS, the Company has issued and plans to continue to issue certain variable life insurance policies and/or variable annuity contracts supported wholly or partially by the Accounts (the “Contracts”), and the Contracts are listed on Schedule A attached hereto and incorporated herein by reference, as such schedule may be amended from time to time by mutual written agreement of the parties; and

WHEREAS, each Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of the Company under the insurance laws of the State of Colorado and New York, to set aside and invest assets attributable to the Contracts; and

WHEREAS, the Company has registered each Account as a unit investment trust under the 1940 Act, unless such Account is exempt from registration thereunder;

WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Company intends to purchase shares in the Portfolios listed on Schedule B attached hereto and incorporated herein by reference, as such schedule may be amended from time to time by mutual written agreement of the parties (the “Portfolios”), on behalf of the Accounts to fund the Contracts, and the Distributor is authorized to sell such shares to unit investment trusts such as the Accounts at net asset value; and

WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Company also intends to continue to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the “Unaffiliated Funds”) on behalf of the Accounts to fund the Contracts.

NOW, THEREFORE, in consideration of their mutual promises, the Company, the Fund, the Distributor and the Adviser agree as follows:

 

2

ARTICLE I. Sale of Fund Shares

1.1.     The Distributor agrees to sell to the Company those shares of the Portfolios which the Account orders, executing such orders on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the order for the shares of the Portfolios, subject to the terms and conditions set forth in the Fund’s then-current prospectus. For purposes of this Section 1.1, the Company shall be the designee of the Fund for receipt of such orders and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such order sufficiently in advance of 10:00 a.m. Eastern time on the next following Business Day to effect any purchase by 10:00 a.m. Eastern time on that Business Day. The parties agree that receipt by the Fund of notice of such order prior to 9:00 a.m. Eastern time will be deemed to be sufficiently in advance for purposes of the preceding sentence; receipt of such notice between 9:00 a.m. and 10:00 a.m. Eastern time will be deemed to be sufficiently in advance solely in the discretion of the Fund or its designee (which shall not be the Company). Any such notice received between 9:00 a.m. and 10:00 a.m. Eastern time that the Fund or its designee (which shall not be the Company) deems not to have been received sufficiently in advance will become a notice for execution at the net asset value next computed on such next Business Day. “Business Day” shall mean any day on which the New York Stock Exchange is open for trading and on which a Portfolio calculates its net asset value pursuant to the rules of the SEC.

1.2.     The Fund agrees to make shares of the Portfolios available for purchase at the applicable net asset value per share by the Company and the Accounts on those days on which the Fund calculates its Portfolios’ net asset value pursuant to rules of the SEC, and the Fund shall calculate such net asset value on each day on which the New York Stock Exchange is open for trading. Notwithstanding the foregoing, the Fund may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Fund acting in good faith, necessary or appropriate in the best interests of the shareholders of such Portfolio. All orders received by the Company shall be subject to the terms of the then current prospectus of the Fund, including the Fund’s excessive trading policies. The Company shall use its best efforts, and shall reasonably cooperate with, the Fund to enforce stated prospectus policies regarding transactions in Portfolio shares. The Company represents and warrants to the Fund, the Adviser and the Distributor that the Company’s personnel have sufficient expertise and experience to implement this Agreement in accordance with its terms. The Company acknowledges that orders received by it in violation of the Fund’s stated policies may be subsequently revoked or cancelled by the Fund and that the Fund shall not be responsible for any losses incurred by the Company or the Contract owner as a result of such cancellation. In addition, the Company acknowledges that the Fund has the right to refuse any purchase order for any reason, particularly if the Fund determines that a Portfolio would be unable to invest the money effectively in accordance with its investment policies or would otherwise be adversely affected due to the size of the transaction, frequency of trading, or other factors.

1.3.     The Fund will not sell shares of the Portfolios to any other Participating Insurance Company separate account unless an agreement containing provisions the substance of which are

 

3

the same as Sections 2.1, 2.2 (except with respect to designation of applicable law), 3.5, 3.6, 3.7, and Article VII of this Agreement is in effect to govern such sales.

1.4.     The Fund agrees to redeem for cash, on the Company’s request, any full or fractional shares of the Portfolios held by the Company, executing such requests on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the request for redemption. For purposes of this Section 1.4, the Company shall be the designee of the Fund for receipt of requests for redemption and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such request for redemption sufficiently in advance of 10:00 a.m. Eastern time on the next following Business Day to effect any redemption by 10:00 a.m. Eastern time on that Business Day. The parties agree that receipt by the Fund of notice of such order prior to 9:00 a.m. Eastern time will be deemed to be sufficiently in advance for purposes of the preceding sentence; receipt of such notice between 9:00 a.m. and 10:00 a.m. Eastern time will be deemed to be sufficiently in advance solely in the discretion of the Fund or its designee. Any such notice received between 9:00 a.m. and 10:00 a.m. Eastern time that the Fund or its designee deems not to have been received sufficiently in advance will become a notice for execution at the net asset value next computed on such next Business Day.

1.5.     The parties hereto acknowledge that the arrangement contemplated by this Agreement is not exclusive; the Fund’s shares may be sold to other Participating Insurance Companies (subject to Section 1.3) and the cash value of the Contracts may be invested in other investment companies.

1.6.     In the event of net purchases, the Company shall pay for Fund shares by 3:00 p.m. Eastern time on the next Business Day after an order to purchase Fund shares is received in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or by a credit for any shares redeemed the same day as the purchase.

1.7.     The Fund shall pay and transmit the proceeds of redemptions of Fund shares by 2:00 p.m. Eastern Time on the next Business Day after a redemption order is received in accordance with Section 1.4 hereof; provided, however, that the Fund may delay payment in extraordinary circumstances to the extent permitted under Section 22(e) of the 1940 Act. Payment shall be in federal funds transmitted by wire and/or a credit for any shares purchased the same day as the redemption.

Each party has the right to rely on information or confirmations provided by the other party (or by an affiliate of the other party), and shall not be liable in the event that an error is a result of any misinformation supplied by the other party.

1.8.     Issuance and transfer of the Fund’s shares will be by book entry only. Stock certificates will not be issued to the Company or the Accounts. Shares purchased from the Fund will be recorded in an appropriate title for the relevant Account or the relevant sub-account of an Account.

 

4

1.9.     The Fund shall furnish same day notice (by electronic communication or telephone, followed by electronic confirmation) to the Company of any income, dividends or capital gain distributions payable on a Portfolio’s shares. The Company hereby elects to receive all such income dividends and capital gain distributions as are payable on a Portfolio’s shares in cash.

1.10.     The Fund shall make the net asset value per share for each Portfolio available to the Company on each Business Day as soon as reasonably practicable after the net asset value per share is calculated and shall use its best efforts to make such net asset value per share available by 7:00 p.m. Eastern time. In the event of an error in the computation of a Portfolio’s net asset value per share (“NAV”) or any dividend or capital gain distribution (each, a “pricing error”), the Adviser or the Fund shall notify the Company as soon as possible after discovery of the error. Such notification may be oral, but shall be confirmed promptly in writing. A pricing error shall be corrected in accordance with the Fund’s policies and procedures, which comply in all material respects with applicable law. Upon notification by the Adviser of any overpayment due to a material error, the Company shall promptly remit to the Adviser any overpayment that has not been paid to Contract owners. In no event shall the Company be liable to Contract owners for any such adjustments or underpayment amounts. Only the following pricing errors shall be deemed to be “materially incorrect” or constitute a “material error” for purposes of this Agreement: pricing errors that result in a difference between the erroneous NAV and the correct NAV equal to or greater than $0.01 per share.

1.11.     The parties agree to mutually cooperate with respect to any state insurance law restriction or requirement applicable to the Fund’s investments; provided, however, that the Fund reserves the right not to implement restrictions or take other actions required by state insurance law if the Fund or the Adviser determines that the implementation of the restriction or other action is not in the best interest of Fund shareholders.

ARTICLE II. Representations and Warranties

2.1.     The Company represents and warrants that: (a) Contracts or interests in the Accounts are or will be registered under the 1933 Act, or are not so registered in proper reliance upon an exemption from such registration requirements (in the event the Company or the Account relies upon an exemption from such registration requirements, the Company undertakes to promptly so notify the Fund); (b) the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws; and (c) the sale of the Contracts shall comply in all material respects with state insurance suitability requirements.

2.2.     The Company represents and warrants that: (a) it is an insurance company duly organized and in good standing under applicable law; (b) it has legally and validly established each Account prior to any issuance or sale of units thereof as a segregated asset account under Colorado and New York law, as applicable; and (c) it has registered each Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts and will maintain such registration for so long as any Contracts are outstanding as required by applicable law or, alternatively, the Company has not

 

5

registered one or more Accounts in proper reliance upon an exclusion from such registration requirements.

2.3.     The Fund represents and warrants that: (a) the Fund shares sold pursuant to this Agreement shall be registered under the 1933 Act; (b) the Fund shares sold pursuant to this Agreement shall be duly authorized for issuance and sold in compliance with all applicable state and federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act; (c) the Fund is and shall remain registered under the 1940 Act; and (d) the Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares.

2.4.     The Fund represents and warrants that it has adopted a plan pursuant to Rule 12b-1 under the 1940 Act. The parties acknowledge that the Fund reserves the right to modify its existing plan or to adopt additional plans pursuant to Rule 12b-1 under the 1940 Act and to impose an asset-based or other charge to finance distribution expenses as permitted by applicable law and regulation. The Fund and the Adviser agree to comply with applicable provisions and SEC interpretation of the 1940 Act with respect to any distribution plan.

2.5.     The Fund represents and warrants that it shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by applicable law.

2.6.     The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the Commonwealth of Massachusetts and that it does and will comply in all material respects with the 1940 Act.

2.7.     The Fund makes no representation as to whether any aspect of its operations (including, but not limited to, fees and expenses and investment policies) complies with the insurance laws or regulations of the various states.

2.8.     The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with any applicable state and federal securities laws.

2.9.     The Distributor represents and warrants that it is and shall remain duly registered as a broker-dealer under all applicable federal and state securities laws and is a member in good standing with FINRA, and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of any applicable state and federal securities laws.

2.10.     The Fund and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by one or more blanket fidelity bonds or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as

 

6

may be promulgated from time to time. The aforesaid bonds shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company.

2.11.     To the extent permitted by law and the Fund’s compliance policies and procedures, the Fund and the Adviser represent and warrant that they will provide the Company with notice as is reasonably practicable of any material change affecting the Portfolios (including, but not limited to, any material change in the registration statement or prospectus affecting the Portfolios) and any proxy solicitation affecting the Portfolios and advise the Company concerning the implementation of any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expense by implementing them in conjunction with regular annual updates of the prospectus for the Contracts where reasonably practicable.

2.12.     The Company represents and warrants, for purposes other than diversification under Section 817 of the Internal Revenue Code of 1986 as amended (the “Code”), that the Contracts are currently and at the time of issuance will be treated as annuity contracts or life insurance policies under applicable provisions of the Code, and that it will make every effort to maintain such treatment and that it will notify the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, the Company represents and warrants that each Account is a “segregated asset account” and that interests in each Account are offered exclusively through the purchase of or transfer into a “variable contract” within the meaning of such terms under Section 817 of the Code and the regulations thereunder. The Company will use every effort to continue to meet such definitional requirements, and it will notify the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. The Company represents and warrants that it will not purchase Fund shares with assets derived from tax-qualified retirement plans except, indirectly, through Contracts purchased in connection with such plans.

2.13.     The Company represents and warrants that it is currently in compliance, and will remain in compliance, with all applicable anti-money laundering laws, regulations, and requirements. In addition, the Company represents and warrants that it has adopted and implemented policies and procedures reasonably designed to achieve compliance with the applicable requirements administered by the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury.

2.14.     The Company represents and warrants that it is currently in compliance, and will remain in compliance, with all applicable laws, rules and regulations relating to consumer privacy, including, but not limited to, Regulation S-P.

2.15.     The Company represents and warrants that it has adopted, and will at all times during the term of this Agreement maintain, reasonable and appropriate procedures (“Late Trading Procedures”) reasonably designed to ensure that any and all orders relating to the purchase, sale or exchange of Fund shares communicated to the Fund to be treated in accordance with Article I of this Agreement as having been received on a Business Day, have been received

 

7

by the Valuation Time on such Business Day and were not modified after the Valuation Time, and that all orders received from Contract owners but not rescinded by the Valuation Time were communicated to the Fund or its agent as received for that Business Day. The Company represents and warrants that it has adopted and implemented controls reasonably designed to ensure that all orders received by the Company after the close of the New York Stock Exchange on a particular Business Day will not be aggregated with orders received by the Company before the close of the New York Stock Exchange on such Business Day. “Valuation Time” shall mean the time as of which the Fund calculates net asset value for the shares of the Portfolios on the relevant Business Day.

2.16.     Each transmission of orders by the Company shall constitute a representation by the Company that such orders are accurate and complete and relate to orders received by the Company by the Valuation Time on the Business Day for which the order is to be priced and that such transmission includes all orders relating to Fund shares received from Contract owners but not rescinded by the Valuation Time. The Company agrees to provide the Fund or its designee with a copy of the Late Trading Procedures and such certifications and representations regarding the Late Trading Procedures as the Fund or its designee may reasonably request. The Company will promptly notify the Fund in writing of any material change to the Late Trading Procedures.

2.17 (a)         The Company agrees to cooperate with all requests by the Fund with respect to discouraging, monitoring and terminating patterns of trading that the Fund deems disruptive, including providing no less than weekly, the Taxpayer Identification Number (“TIN”), if known, of any and all Contract owner(s) of the account and the amount, date, name or other identifier of any investment professional(s) associated with the Contract owner(s) or account (if known) and transaction type (purchase, redemption, transfer, or exchange) of every purchase, redemption, transfer or exchange of the Portfolios’ shares held through an Account maintained by the Company.

(i)       The Fund may request such transaction information older than three (3) months from the date of the request as it deems necessary to investigate compliance with policies established by the Fund for the purpose of eliminating or reducing any dilution of the value of the outstanding shares issued by the Fund. If the Company provides the Fund a daily feed, unless otherwise directed by the Fund, the Company agrees to provide the information specified in this Section 2.17(a) for each trading day.

(ii)       The Company agrees to transmit the transaction information that is on its books and records to the Fund or its designee promptly, but in any event not later than five (5) business days, upon the conclusion of the period covered by the information. If the transaction information is not on the Company’s books and records, the Company agrees to use reasonable efforts to: (A) promptly obtain and transmit the requested information; (B) obtain assurances from the Contract owner that the requested information will be provided to the Fund promptly; or (C) if directed by the Fund, restrict or prohibit further purchases of the Fund’s shares from such Contract owner. In such instance, the Company agrees to inform the Fund whether it plans to perform (A), (B), or (C). Responses required by this sub-Section must be communicated in writing and in a format mutually agreed upon by the parties. To the extent practicable, the

 

8

format for any transaction information provided to the Fund should be consistent with the National Securities Clearing Corporation’s Standardized Data Reporting Format.

(iii)       The Fund agrees not to use the information received pursuant to this Section 2.17(a) for marketing or any other similar purpose without the Company’s prior written consent.

(b)     The Company agrees to execute written instructions from the Fund to restrict or prohibit further purchases or exchanges of the Portfolios’ shares by a Contract owner that has been identified by a Fund as having engaged in transactions of such Portfolios’ shares (directly or indirectly through your account) that violate policies established by the Fund for the purpose of eliminating or reducing any dilution of the value of the outstanding securities issued by the Fund.

 

  (i)

Instructions must include the TIN, if known, and the specific restriction(s) to be executed. If the TIN is not known, the instructions must include an equivalent identifying number of the Contract owner or other agreed upon information to which the instruction relates.

 

  (ii)

The Company agrees to execute instructions as soon as reasonably practicable, but not later than five (5) business days after receipt by the Company of the instructions.

 

  (iii)

The Company must provide written confirmation to the Fund that instructions have been executed. The Company agrees to provide confirmation as soon as reasonably practicable, but not later than ten (10) business days after the instructions have been executed.

(c) For purposes of this Section 2.17:

 

  (i)

The term “Fund” includes the Adviser and Columbia Management Investment Services Corp., the Fund’s Transfer Agent, but does not include any “excepted funds” as defined in Rule 22c-2(b) under the 1940 Act.

 

  (ii)

The term “Contract owner” means holder of interests in a variable annuity or variable life insurance Contract issued by the Company.

 

  (iii)

The term “written” includes electronic writings and facsimile transmissions.

2.18     The Company agrees to cooperate fully with any and all efforts by the Fund to assure the Fund that the Company has implemented effective compliance policies and procedures administered by qualified personnel as required by and in accordance with any and all applicable laws, rules and regulations.

2.19     Each party represents that the execution and delivery of this Agreement and the consummation of the transactions contemplated herein have been duly authorized by all

 

9

necessary corporate or board action, as applicable, by such party and when so executed and delivered this Agreement will be the valid and binding obligation of such party enforceable in accordance with its terms.

ARTICLE III. Prospectuses and Proxy Statements; Voting

3.1.     At least annually, the Adviser or Distributor shall provide the Company with as many copies of the Fund’s current prospectus as the Company may reasonably request, with expenses to be borne in accordance with Schedule C hereof. If requested by the Company in lieu thereof, the Distributor shall provide such documentation (including an electronic version of the current prospectus) and other assistance as is reasonably necessary in order for the Company once each year (or more frequently if the prospectus for the Fund is amended) to have the prospectus for the Contracts and the prospectus for the Fund printed together in one document.

3.2.     If applicable state or federal laws or regulations require that the Statement of Additional Information (“SAI”) for the Fund be distributed to all Contract owners, then the Distributor shall provide the Company with copies of the Fund’s SAI in such quantities, with expenses to be borne in accordance with Schedule C hereof, as the Company may reasonably require to permit timely distribution thereof to Contract owners. The Distributor shall also provide an SAI to any Contract owner or prospective owner who requests such SAI from the Fund.

3.3.     The Distributor shall provide the Company with copies of the Fund’s proxy materials, reports to shareholders and other communications to shareholders in such quantity, with expenses to be borne in accordance with Schedule C hereof, as the Company may reasonably require to permit timely distribution thereof to Contract owners.

3.4.     It is understood and agreed that, except with respect to information regarding the Company provided in writing by that party, the Company shall not be responsible for the content of the prospectus or SAI for the Fund. It is also understood and agreed that, except with respect to information regarding the Fund, the Distributor, the Adviser or the Portfolios provided in writing by the Fund, the Distributor or the Adviser, neither the Fund, the Distributor nor Adviser are responsible for the content of the prospectus or SAI for the Contracts.

3.5.     If and to the extent required by law the Company shall:

(a)       solicit voting instructions from Contract owners;

(b)       vote the Portfolio shares held in the Accounts in accordance with instructions received from Contract owners;

(c)       vote Portfolio shares held in the Accounts for which no instructions have been received in the same proportion as Portfolio shares for which instructions have been received from Contract owners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners; and

 

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(d)       vote Portfolio shares held in its general account or otherwise in the same proportion as Portfolio shares for which instructions have been received from Contract owners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require such voting by the insurance company. The Company reserves the right to vote Fund shares in its own right, to the extent permitted by law.

3.6.     The Company shall be responsible for assuring that each of its separate accounts holding shares of a Portfolio calculates voting privileges as directed by the Fund and agreed to by the Company and the Fund. The Fund agrees to promptly notify the Company of any changes of interpretations or amendments of the Mixed and Shared Funding Exemptive Order.

3.7.     The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders. Further, the Fund will act in accordance with the SEC’s interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the SEC may promulgate with respect thereto.

ARTICLE IV. Sales Material and Information

4.1.     The Company shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that the Company develops or proposes to use and in which the Fund (or Portfolio thereof), the Adviser or the Distributor is named in connection with the Contracts, at least ten (10) business days prior to its use. No such material shall be used if the Fund objects to such use within five (5) business days after receipt of such material.

4.2.     The Company shall not give any information or make any representations or statements on behalf of the Fund in connection with the sale of the Contracts other than the information or representations contained in the registration statement, including the prospectus or SAI for the Fund shares, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by the Fund, Distributor or Adviser, except with the permission of the Fund, Distributor or Adviser.

4.3.     The Fund, the Adviser or the Distributor shall furnish, or shall cause to be furnished, to the Company, a copy of each piece of sales literature or other promotional material in which the Company and/or its Accounts are named at least ten (10) business days prior to its use. No such material shall be used if the Company objects to such use within five (5) business days after receipt of such material.

4.4.     The Fund, the Distributor and the Adviser shall not give any information or make any representations on behalf of the Company or concerning the Company, the Accounts, or the Contracts other than the information or representations contained in a registration statement, including the prospectus or SAI for the Contracts, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by the Company or its designee, except with the permission of the Company.

 

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4.5.     For purposes of Articles IV and VIII, the phrase “sales literature and other promotional material” includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as the Internet or other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and shareholder reports, and proxy materials (including solicitations for voting instructions) and any other material constituting sales literature or advertising under the FINRA rules, the 1933 Act or the 1940 Act.

4.6.     At the request of any party to this Agreement, each other party will make available to the other party’s independent auditors and/or representatives of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party’s obligations under this Agreement.

ARTICLE V. Fees and Expenses

5.1.     The Fund, the Distributor and the Adviser shall pay no fee or other compensation to the Company under this Agreement, and the Company shall pay no fee or other compensation to the Fund, the Distributor or Adviser under this Agreement; provided, however, (a) the parties will bear their own expenses as reflected in Schedule C and other provisions of this Agreement, and (b) the parties may enter into other agreements relating to the Company’s investment in the Fund, including services agreements.

Each Party agrees to cooperate with the others, as applicable, in arranging to print, mail and/or deliver, in a timely manner, combined or coordinated prospectuses or other materials of the Portfolio and the Accounts.

ARTICLE VI. Diversification and Qualification

6.1.     The Fund, Distributor and Adviser represent and warrant that the Fund and each Portfolio thereof will at all times comply with Section 817(h) of the Code and Treasury Regulation §1.817-5, as amended from time to time, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Fund, the Distributor or the Adviser shall, upon request, provide to the Company a written diversification report, which shall show the results of the quarterly Section 817(h) diversification test and include, upon reasonable request, a certification as to whether each Portfolio complies with the Section 817(h) diversification requirement.

6.2.     The Fund, the Distributor and the Adviser agree that shares of the Portfolios will be sold only to Participating Insurance Companies and their separate accounts and to Qualified

 

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Plans. No shares of any Portfolio of the Fund will be sold to the general public. However, it is understood by the Company that the Fund may sell shares of any Portfolio to any person eligible to invest in that Portfolio in accordance with applicable provisions of Section 817(h) under the Code and the regulations thereunder, and that if such provisions are not applicable, then the Fund may sell shares of any Portfolio to any person, including members of the general public.

6.3.     The Fund, the Distributor and the Adviser represent and warrant that the Fund and each Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect.

6.4.     The Company agrees that if the Internal Revenue Service (“IRS”) asserts in writing in connection with any governmental audit or review of the Company (or, to the Company’s knowledge, of any Contract owner) that any Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or the Company otherwise becomes aware of any facts that could give rise to any claim against the Fund, Distributor or Adviser as a result of such a failure or alleged failure:

(a)       The Company shall promptly notify the Fund, the Distributor and the Adviser of such assertion or potential claim;

(b)       The Company shall consult with the Fund, the Distributor and the Adviser as to how to minimize any liability that may arise as a result of such failure or alleged failure;

(c)       The Company shall use its best efforts to minimize any liability of the Fund, the Distributor and the Adviser resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent;

(d)       Any written materials to be submitted by the Company to the IRS, any Contract owner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by the Company to the Fund, the Distributor and the Adviser (together with any supporting information or analysis) within at least two (2) business days prior to submission;

(e)       The Company shall provide the Fund, the Distributor and the Adviser with such cooperation as the Fund, the Distributor and the Adviser shall reasonably request (including, without limitation, by permitting the Fund, the Distributor and the Adviser to review the relevant books and records of the Company) in order to facilitate review by the Fund, the Distributor and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure;

(f)       The Company shall not with respect to any claim of the IRS or any Contract owner that would give rise to a claim against the Fund, the Distributor and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any

 

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allowable administrative or judicial appeals, without the express written consent of the Fund, the Distributor and the Adviser, which shall not be unreasonably withheld; provided that, the Company shall not be required to appeal any adverse judicial decision unless the Fund and the Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Company shall not be required to bear the costs and expenses, including reasonable attorney’s fees, incurred by the Company in complying with this clause (f).

 

ARTICLE VII.  

Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order

7.1.    The Board of Trustees of the Fund (the “Board”) will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the Contract owners of all separate accounts investing in the Fund. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio is being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of Contract owners. The Board shall promptly inform the Company if it determines that an irreconcilable material conflict exists and the implications thereof.

7.2.    The Company will report any potential or existing conflicts of which it is aware to the Board. The Company will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by the Company to inform the Board whenever Contract owner voting instructions are to be disregarded. Such responsibilities shall be carried out by the Company with a view only to the interests of its Contract owners.

7.3.    If it is determined by a majority of the Board, or a majority of its directors who are not interested persons of the Fund, the Distributor, the Adviser or any subadviser to any of the Portfolios (the “Independent Directors”), that a material irreconcilable conflict exists, the Company and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Directors), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another Portfolio, or submitting the question whether such segregation should be implemented to a vote of all affected Contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a

 

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change; and (2) establishing a new registered management investment company or managed separate account. The Company’s responsibility to take remedial action shall be carried out by the Company with a view only to the interests of Contract owners.

7.4.    If a material irreconcilable conflict arises because of a decision by the Company to disregard Contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, the Company may be required, at the Fund’s election, to withdraw the Account’s investment in the Fund and terminate this Agreement; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six-month period the Adviser, the Distributor and the Fund shall continue to accept and implement orders by the Company for the purchase (and redemption) of shares of the Fund, subject to the terms of the Fund’s then-current prospectus.

7.5.    If a material irreconcilable conflict arises because a particular state insurance regulator’s decision applicable to the Company conflicts with the majority of other state regulators, then the Company will withdraw the Account’s investment in the Fund and terminate this Agreement within six months after the Board informs the Company in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Until the end of the foregoing six-month period, the Fund shall continue to accept and implement orders by the Company for the purchase (and redemption) of shares of the Fund, subject to the terms of the Fund’s then-current prospectus.

7.6.    For purposes of Sections 7.3 through 7.5 of this Agreement, a majority of the Independent Directors shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. The Company shall not be required by Section 7.3 to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contract owners affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then the Company will withdraw the Account’s investment in the Fund and terminate this Agreement within six (6) months after the Board informs the Company in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the Independent Directors.

7.7.    If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with

 

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Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the extent that terms and conditions substantially identical to such Sections are contained in such Rule(s) as so amended or adopted.

ARTICLE VIII.   Indemnification

8.1.  Indemnification by the Company

(a)    The Company agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their respective officers, employees, agents and directors or trustees and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.1) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of the Company) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages or liabilities (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund’s shares or the Contracts and:

(i)    arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or prospectus or SAI covering the Contracts or contained in the Contracts or sales literature or other promotional material for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of the Fund for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or Fund shares; or

(ii)    arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature or other promotional material of the Fund not supplied by the Company or persons under its control) or wrongful conduct of the Company or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or

(iii)    arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature or other promotional material of the Fund, or any amendment thereof or

 

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supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund by or on behalf of the Company; or

(iv)    arise as a result of any failure by the Company to provide the services and furnish the materials under the terms of this Agreement; or

(v)    arise out of or result from any material breach of any representation and/or warranty made by the Company in this Agreement or arise out of or result from any other material breach of this Agreement by the Company, including without limitation Section 2.12 and Section 6.4 hereof,

as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof.

(b)    The Company shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or gross negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement.

(c)    The Company shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Company in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Company of any such claim shall not relieve the Company from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Company has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Company shall be entitled to participate, at its own expense, in the defense of such action. The Company also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Company to such party of the Company’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Company will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

(d)    The Indemnified Parties will promptly notify the Company of (i) the issuance by any court or regulatory body of any stop order, cease and desist order, or other similar order with respect to the Fund’s registration statement under the 1933 Act or prospectus, (ii) any request by the SEC for any amendment to such registration statement or prospectus that may affect the offering of shares of the Fund, (iii) the initiation of any litigation or proceedings for that purpose or for any other purpose relating to the registration or offering of the Fund’s shares, or (iv) any other action or circumstances that may prevent the lawful offer or sale of

 

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shares of any Fund in any state or jurisdiction, including, without limitation, any circumstances in which (a) such shares are not registered and, in all material respects, issued and sold in accordance with applicable state and federal law, or (b) such law precludes the use of such shares as an underlying investment medium of the Contracts issued or to be issued by the Company. The Fund and Adviser will make every reasonable effort to prevent the issuance, with respect to any Fund, of any such stop order, cease and desist order or similar order and, if any such order is issued, to obtain the lifting thereof at the earliest possible time.

8.2.  Indemnification by the Adviser

(a)    The Adviser agrees to indemnify and hold harmless the Company and its directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.2) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Portfolios or the Contracts and:

(i)    arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, the Distributor or the Adviser (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Adviser, the Distributor or the Fund by or on behalf of the Company for use in the registration statement, prospectus or SAI for the Fund or in sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or the Portfolios; or

(ii)     arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Fund, the Distributor or the Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Portfolios; or

(iii)     arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature or other promotional material covering the Contracts, or any amendment

 

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thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to the Company by or on behalf of the Adviser, the Distributor or the Fund; or

(iv)     arise as a result of any failure by the Fund, the Distributor or the Adviser to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or

(v)     arise out of or result from any material breach of any representation and/or warranty made by the Fund, the Distributor or the Adviser in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser, the Distributor or the Fund; or

(vi)     arise out of or result from the incorrect or untimely calculation or reporting by the Fund, the Distributor or the Adviser of the daily net asset value per share (subject to Section 1.10 of this Agreement) or dividend or capital gain distribution rate;

as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI hereof.

(b)     The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or gross negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement.

(c)     The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable

 

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to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

(d)     The Company and its broker-dealer subsidiary agree promptly to notify the Fund, the Distributor or the Adviser of (i) the issuance by any court or regulatory body of any stop order, cease and desist order, or other similar order with respect to each Account relating to the Contracts, (ii) any request by the SEC for any amendment to the registration statement or Account prospectus that may affect the offering of shares of the Fund, (iii) the initiation of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account for that purpose or for any other purpose relating to the registration or offering of each Account’s interests pursuant to the Contracts, or (iv) any other action or circumstances that may prevent the lawful offer or sale of said interests in any state or jurisdiction, including, without limitation, any circumstances in which said interests are not registered and, in all material respects, issued and sold in accordance with applicable state and federal law. The Company will make every reasonable effort to prevent the issuance of any such stop order, cease and desist order or similar order and, if any such order is issued, to obtain the lifting thereof at the earliest possible time.

ARTICLE IX. Applicable Law

9.1.     This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the Commonwealth of Massachusetts, without regard to conflict of laws provisions.

9.2.     This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the SEC may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith.

ARTICLE X. Termination

10.1.     This Agreement shall terminate:

(a)     at the option of any party, with or without cause, with respect to some or all Portfolios, upon sixty (60) days advance written notice delivered to the other parties; or

(b)     at the option of the Company by written notice to the other parties with respect to any Portfolio based upon the Company’s determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; or

(c)     at the option of the Company by written notice to the other parties with respect to any Portfolio in the event any of the Portfolio’s shares are not registered, issued or sold in accordance with applicable state and/or federal law or such law precludes the use of such

 

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shares as the underlying investment media of the Contracts issued or to be issued by the Company; or

(d)     at the option of the Fund, Distributor or Adviser in the event that formal administrative proceedings are instituted against the Company by FINRA, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding the Company’s duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares, if, in each case, the Fund, Distributor or Adviser, as the case may be, reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of the Company to perform its obligations under this Agreement; or

(e)     at the option of the Company in the event that formal administrative proceedings are instituted against the Fund, the Distributor or the Adviser by FINRA, the SEC, or any state securities or insurance department or any other regulatory body, if the Company reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of the Fund, the Distributor or the Adviser to perform their obligations under this Agreement; or

(f)     At the option of the Company by written notice to the Fund, the Adviser and the Distributor, in the event that any Portfolio (i) ceases to qualify, or the Company reasonably believes such Portfolio may fail to so qualify, as a Regulated Investment Company under Subchapter M or (ii) fails to comply with the Section 817(h) diversification requirements specified in Article VI hereof; or

(g)     at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the “defaulting party”) other than as described in Section 10.1(a)-(h); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non-defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party; or

(h)     at any time upon written agreement of all parties to this Agreement.

10.2.     Notice Requirement

No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore,

(a)     in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties;

 

21

(b)     in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e) or 10.1(g) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and

(c)     in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given in advance of the effective date of termination, which date shall be determined by the party sending the notice.

10.3.     Effect of Termination

Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or the Company to meet Section 817(h) of the Code diversification requirements, the Fund, the Distributor and the Adviser shall, at the option of the Company, continue to make available additional shares of the Fund pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as “Existing Contracts”). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Fund, redeem investments in the Fund and/or invest in the Fund upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement.

10.4.     Surviving Provisions

Notwithstanding any termination of this Agreement, each party’s obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement.

ARTICLE XI. Notices

Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other parties.

If to the Company:

Great West Life and Annuity Insurance Company

Great West Life and Annuity Insurance Company of New York

8515 East Orchard Road

Greenwood Village CO 80111

Attention: Chief Compliance Officer

 

22

If to the Fund:

Columbia Funds Variable Series Trust II

225 Franklin Street

Boston, MA 02110

Attention: Secretary

If to the Adviser:

Columbia Management Investment Advisers, LLC

225 Franklin Street

Boston, MA 02110

Attention: Secretary

If to the Distributor:

Columbia Management Investment Distributors, Inc.

225 Franklin Street

Boston, MA 02101

Attention: Secretary

ARTICLE XII. Miscellaneous

12.1.     Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected party until such time as such information may come into the public domain. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary.

12.2.     The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect.

12.3.     This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument.

12.4.     If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby.

12.5.     Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, FINRA and state insurance

 

23

regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby.

12.6.     Any controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be settled by arbitration in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

12.7.     The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws.

12.8.     This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto.

12.9.     The Company agrees that the obligations assumed by the Fund, Distributor and the Adviser pursuant to this Agreement shall be limited in any case to the Fund, Distributor and Adviser and their respective assets and the Company shall not seek satisfaction of any such obligation from the shareholders of the Fund, Distributor or the Adviser, the Directors, officers, employees or agents of the Fund, Distributor or Adviser, or any of them.

12.10.     The Fund, the Distributor and the Adviser agree that the obligations assumed by the Company pursuant to this Agreement shall be limited in any case to the Company and its assets and neither the Fund, Distributor nor Adviser shall seek satisfaction of any such obligation from the shareholders of the Company, the directors, officers, employees or agents of the Company, or any of them.

12.11.     No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Adviser and the Fund, and the Distributor and the Fund.

 

24

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be effective as of the Effective Date, to be executed in its name and on its behalf by its duly authorized representative, and its seal to be hereunder affixed hereto as of the date specified below.

 

Great-West Life & Annuity Insurance Company
By its authorized officer,  
By:  

/s/ Susan Gile

                   
  Title:  Susan Gile - VP. Individual Markets  
Great-West Life & Annuity Insurance Company of New York
By its authorized officer,  
By:  

/s/ Ron Laeyendecker

  
  Title:  Ron Laeyendecker Senior Vice President  
COLUMBIA FUNDS VARIABLE SERIES TRUST II
By its authorized officer,  

By:

  

/s/                                                              

  
 

Title:  Vice President

  
COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC
By its authorized officer,  

By:

  

/s/

  
 

Title:   Managing Director

  
COLUMBIA MANAGEMENT INVESTMENT DISTRIBUTORS INC.
By its authorized officer,  

By:

  

/s/

  

Title  Managing Director

  

 

25

SCHEDULE A

CONTRACTS

Variable Annuity-1 Series Account of Great-West Life & Annuity Insurance Company (GWLA) contracts

Variable Annuity-1 Series Account of Great-West Life & Annuity Insurance Company of New

York (GWLANY) contracts

Variable Annuity-2 Series Account of GWLA contracts

Variable Annuity-2 Series Account of GWLANY contracts

FutureFunds Series Account of GWLA contracts

FutureFunds II Series Account of GWLA contracts

FutureFunds II Series Account of GWLANY contracts

COLI VUL-1 Series Account of GWLANY contracts

COLI VUL-2 Series Account of GWLA contracts

COLI VUL-2 Series Account of GWLANY contracts

COLI VUL-4 Series Account of GWLA contracts

COLI VUL-7 Series Account of GWLA contracts

 

26

SCHEDULE B

Columbia Funds Variable Series Trust II

Class 1 and Class 2 Shares of all Columbia Variable Portfolios* under Columbia Funds Variable Series Trust II

* Portfolios managed by Columbia Management Investment Advisers, LLC

 

27

SCHEDULE C

EXPENSES

The Fund and/or the Distributor and/or Adviser, and the Company will coordinate the functions and pay the costs of the completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Fund’s share of the total costs determined according to the number of pages of the Fund’s respective portions of the documents.

 

Item    Function   

Party Responsible

for Coordination

   

Party Responsible

for Expense

Mutual Fund

Prospectus

   

Electronic copy of

combined

prospectuses made

available

    Company   

Current - Fund

Prospective -

Company

    

Distribution

(including postage)

to Current Clients

    Company    Fund
    

Distribution

(including postage)

to Prospective

Clients

    Company    Company
Product Prospectus   

Printing and

Distribution for

Current and

Prospective Clients

    Company    Company

Mutual Fund

Prospectus Update &

Distribution

   

Electronic copy, if

Required by Fund,

Distributor or

Adviser

   

Fund, Distributor or

Adviser

   

Fund, Distributor or

Adviser

    

If Required by

Company

   

Company (Fund,

Distributor or

Adviser to provide

Company with

document in PDF

format)

    Company

 

28

Item    Function   

Party Responsible

for Coordination

   

Party Responsible

for Expense

Product Prospectus

Update &

Distribution

   

If Required by Fund,

Distributor or

Adviser

    Company   

Fund, Distributor or

Adviser

    

If Required by

Company

    Company    Company
Mutual Fund SAI    Printing   

Fund, Distributor or

Adviser

   

Fund, Distributor or

Adviser

    

Distribution

(including postage)

   

Party who receives

the request

   

Party who receives

the request

Product SAI    Printing    Company    Company
     Distribution    Company    Company
Proxy Material for Mutual Fund   

Electronic copy of

proxy if required by

Law

   

Fund, Distributor or

Adviser

   

Fund, Distributor or

Adviser

    

Distribution

(including labor) if

proxy required by

Law

    Company   

Fund, Distributor or

Adviser

    

Printing &

distribution if

required by Company

    Company    Company
Mutual Fund Annual & Semi-Annual Report   

Electronic copy made

available

   

Fund, Distributor or

Adviser

   

Fund, Distributor or

Adviser

     Distribution    Company   

Fund, Distributor or

Adviser

Operations of the Accounts   

Federal registration

of units of separate

account (24f-2 fees)

    Company    Company

 

29

EX-99.(H)(31) 20 d694125dex99h31.htm EX-99.(H)(31) EX-99.(H)(31)

SECOND AMENDMENT TO PARTICIPATION AGREEMENT

THIS SECOND AMENDMENT TO PARTICIPATION AGREEMENT is made as of this 29th day of October 2008 by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”), FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“First GWL&A”), DAVIS VARIABLE ACCOUNT FUND, INC. (the “Fund”), DAVIS SELECTED ADVISERS, L.P. (the “Adviser”), and DAVIS DISTRIBUTORS, LLC. (the “Distributor”), collectively the Parties. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Original Agreement (defined below).

RECITALS

WHEREAS, GWL&A, First GWL&A, the Fund, the Adviser and the Distributor are parties to a Fund Participation Agreement dated December 16, 2004 and amended July 2, 2007, (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to add additional Separate Accounts that are exempt from registration.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

  1.

All references to the “First GWL&A Account” now include the COLI VUL Series Account 1 (First GWL&A).

 

  2.

All references to the “GWL&A Account” now include COLI VUL Series Account 7 (GWL&A).

 

  3.

Paragraph 2.1 of the Agreement is deleted in its entirety and replaced with the following:

 

  2.1

GWL&A and First GWL&A represent and warrant that the Contracts and the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act (unless exempt from registration); that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with state insurance suitability requirements.

 

 

1

   

GWL&A and First GWL&A further represent that each is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset account under Colorado insurance law and has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act (unless exempt from registration) to serve as a segregated investment account for the Contracts and that it will maintain such registration for so long as any Contracts are outstanding as required by applicable law.

 

 

  4.

GWL&A and First GWL&A agree that each has registered or will register certain variable life insurance and variable annuity contracts under the 1933 Act, unless such contracts are exempt from registration thereunder.

[Signature Page Follows]

 

2

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 29th day of October 2008.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

  By its authorized officer,
  By:   /s/ Ron Laeyendecker
  Name:   Ron Laeyendecker
  Title:   Senior Vice-President
  Date:   11/5/08

FIRST GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

  By its authorized officer,
  By:   /s/ Bob Shaw
  Name:   Bob Shaw
  Title:   Senior Vice President
  Date:   11/5/08

DAVIS VARIABLE ACCOUNT FUND, INC.

 

  By its authorized officer,
  By:   /s/ Kenneth C. Eich
  Name:  

Kenneth C. Eich

  Title:  

Executive Vice President

  Date:  

October 29, 2008

DAVIS SELECTED ADVISERS, L.P.

 

  By its authorized officer,
  By:   /s/ Kenneth C. Eich
  Name:  

Kenneth C. Eich

  Title:  

Chief Operating Officer

  Date:  

October 29, 2008

DAVIS DISTRIBUTORS, LLC

 

  By its authorized officer,
  By:   /s/ Kenneth C. Eich
  Name:  

Kenneth C. Eich

  Title:   President
  Date:  

October 29, 2008

 

3

EX-99.(H)(32) 21 d694125dex99h32.htm EX-99.(H)(32) EX-99.(H)(32)

THIRD AMENDMENT TO PARTICIPATION AGREEMENT

THIS THIRD AMENDMENT TO PARTICIPATION AGREEMENT is made as of this 16th day of August, 2013, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”), DAVIS VARIABLE ACCOUNT FUND, INC. (the “Fund”), DAVIS SELECTED ADVISERS, L.P. (the “Adviser”), DAVIS DISTRIBUTORS, LLC (the “Distributor”), collectively the Parties, and GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK, formerly known as FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A-NY”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Original Agreement (defined below).

RECITALS

WHEREAS, GWL&A, GWLA-NY, the Fund, the Adviser and the Distributor are parties to a Fund Participation Agreement dated December 16, 2004, as amended (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to add an additional Separate Account to the Agreement;

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

All references to the “Account” now include the COLI VUL-14 Series Account (GWL&A).

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 16th day of August, 2013.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

By its authorized officer,

  By:   /s/ Ron Laeyendecker
  Name:   Ron Laeyendecker
  Title:   Senior Vice President
  Date:   9-18-2013

 

1

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY OF NEW YORK

By its authorized officer,

  By:   /s/ Susan Gile
  Name:   Susan Gile
  Title:   V.P. Individual Markets
  Date:   9-18-2013

DAVIS VARIABLE ACCOUNT FUND, INC.

By its authorized officer,

  By:   /s/ Kenneth C. Eich
  Name:   Kenneth C. Eich
  Title:   Executive Vice President
  Date:   August 16, 2013

DAVIS SELECTED ADVISERS, L.P.

By its authorized officer,

  By:   /s/ Kenneth C. Eich
  Name:   Kenneth C. Eich
  Title:   Chief Operating Officer
  Date:   August 16, 2013

DAVIS DISTRIBUTORS, LLC

By its authorized officer,

  By:   /s/ Kenneth C. Eich
  Name:   Kenneth C. Eich
  Title:   President
  Date:   August 16, 2013

 

2

EX-99.(H)(34) 22 d694125dex99h34.htm EX-99.(H)(34) EX-99.(H)(34)

Charles Schwab

 

THE SCHWAB BUILDING     •    101 MONTGOMERY STREET     •    SAN FRANCISCO, CA 94104    •    (415) 627-7000

April 18, 2003

Richelle S. Maestro

General Counsel

Delaware Group Premium Fund

1 Commerce Square

2005 Market Street

Philadelphia, PA 19103

Re: Clarification and Amendment of Expense Calculation in Participation Agreement

Dear Ms. Maestro:

This letter serves to clarify and amend the calculation of expenses associated with the printing of documents referenced on Schedule E (“Schedule E”) of our participation agreement, dated April 20, 2001 with Delaware Group Premium Fund, (the “Agreement”). Any mailings or distribution of documents made on or after May 1, 2003, will be calculated under the following method:

“Costs shall be allocated to reflect the Fund’s share of the total costs determined according to the number of pages of the Fund’s respective portions of the documents, except with respect to the printing of combined fund prospectuses. The calculation for costs associated with the printing of combined fund prospectuses shall be a weighted average factoring in the percentage of assets allocated to the Fund’s respective portfolio(s) as of April 30 of each year, and the actual number of pages in that portfolio’s prospectus.”

The Agreement otherwise remains unchanged and shall continue in full force and effect.

In the space provided below, please acknowledge your agreement to the foregoing.

 

Very truly yours,

Charles Schwab & Co., Inc.

By:

  

/s/ Tina M. Perrino

Name:

  

Tina M. Perrino

Title:

  

Vice President, Partner Relations

Great-West Life & Annuity Insurance Company

By:

  

/s/ Chris Bergeon

Name:

  

Chris Bergeon

Title:

  

VP FIM

 

CHARLES SCHWAB & CO., INC. MEMBER SIPC, NEW YORK STOCK EXCHANGE AND OTHER PRINCIPAL STOCK AND OPTIONS EXCHANGES

 

Page 2 of 2

 

ACKNOWLEDGED AND AGREED TO:

Delaware VIP Trust, on behalf of its various series

By:

  

/s/ David K. Downes

Name:

  

David K. Downes

Title:

  

President, COO & CFO

Delaware Management Company, a series of Delaware Management Business Trust

By:

  

/s/ David K. Downes

Name:

  

David K. Downes

Title:

  

Executive Vice President, COO & CFO

Delaware Distributors, L.P.

By:

  

/s/ David K. Downes

Name:

  

David K. Downes

Title:

  

Executive Vice President, COO & CFO

cc:

  

Beverly Byrne, Esq.

 

Tina Perrino

 

Erin Spivak

 EX-99.(H)(37) 23 d694125dex99h37.htm EX-99.(H)(37) EX-99.(H)(37)

LOGO

 

Great-West

LIFE & ANNUITY INSURANCE COMPANY

      

 

 

8525 East Orchard Road

Greenwood Village, CO 80111

(303) 737-3000

Mailing Address:

PO Box 1080, Denver CO 80201

www.gwla.com

September 1, 2005

Adam Cherubini

Vice President

Great-West Life & Annuity Insurance Company

8515 E. Orchard Road

Greenwood Village, CO 80111

Ms. Richelle S. Maestro

General Counsel

Delaware Management Company

1 Commerce Square, 2005 Market Street

Philadelphia, PA 19103

 

RE:

An Amendment—Removal of Charles Schwab and Consolidation of Administrative Services from Charles Schwab & Co. to Great-West Life & Annuity Insurance Company

Dear Ms. Maestro:

Please be advised that, as a result of a restructuring of our variable annuity distribution and servicing arrangement with Charles Schwab and Co., Inc., (“Schwab”), Schwab will no longer be a party to the fund participation agreement dated April 20, 2001, as amended (the “Agreement”). Effective October 1, 2005, all administrative services performed under the Agreement will be consolidated and performed exclusively by Great-West Life and Annuity Insurance Company (“GWL&A”).

We are seeking your consent pursuant to this Agreement to: a) remove Schwab from the Agreement, and b) substitute GWL&A for Schwab as the party responsible for performing Fund administrative services under this Agreement. Specifically, this amendment will replace Schwab with GWL&A in the provisions of Article 5 and Schedule C of the Agreement.

You should note that the purpose of this amendment is not to change your substantive obligations, responsibilities, or rights under this Agreement, but only to amend the Agreement so as to properly reflect the removal of Schwab, and the designation of GWL&A, as the party responsible for providing administrative services under the Agreement. In addition, in consideration of GWL&A performing such services, all fees (including 12b-1 distribution and/or administrative services fees) formerly paid by the Fund(s) to Schwab should now be paid to GWL&A after the October 1, 2005 effective date.

For further instructions on remittance of these fees, please contact:

Jill Kerschen, Associate Manager, Financial Control

Great West Life & Annuity

Attn: Revenue Department 2T2

8515 E Orchard Rd

Greenwood Village, CO 80111

All other provisions of the Agreement otherwise remain unchanged.

Three executed originals are enclosed for execution by Delaware VIP Trust, Delaware Management Company, and Delaware Distributors, L.P. Please return two duly executed originals to us in the enclosed stamped, self-addressed envelope.

If you have any questions, please do not hesitate to contact Joel Terwilliger (business card attached). I remain,

Yours truly,

 

Great-West Life & Annuity Insurance Company

By its authorized officer noted below

By:                                                                                                                                

Name:                                                                                                                           

Title: V.P.                                                                                                                      

I have read the foregoing letter and agree to accept this amendment to the Agreement.

 

Charles Schwab & Co., Inc.

By its authorized officer noted below

   

Delaware VIP Trust

By its authorized officer noted below

By: /s/ Tina Perrino                                                

   

By: /s/ Ryan K. Brist                                                     

Name: Tina Perrino                                                     

   

Name: Ryan K. Brist

Title:    Vice President                                                    

   

Title: EVP

Delaware Management Company

By its authorized officer noted below

   

Delaware Distributors, L.P.

By its authorized officer noted below

By: /s/ Patrick P. Coyne                                          

By: /s/ Kevin J. Lucey                                          

    Name:    Patrick P. Coyne

    Title:       Executive Vice President/Managing

      Director/Chief Investment Officer

      Equity Investments

   

Name:      Kevin J. Lucey                                    

Title:        President & CEO

 EX-99.(H)(40) 24 d694125dex99h40.htm EX-99.(H)(40) EX-99.(H)(40)

AMENDMENT TO FUND PARTICIPATION AGREEMENT BETWEEN

GREAT WEST LIFE & ANNUITY COMPANY, DELAWARE VIP TRUST,

DELAWARE MANAGEMENT COMPANY AND DELAWARE DISTRIBUTORS, L.P.

THIS AMENDMENT TO FUND PARTICIPATION AGREEMENT is made as of this 1 day of August, 2014, by and among Delaware VIP Trust, Delaware Management Company, Delaware Distributors, L.P. and Great-West Life & Annuity Insurance Company (“Great-West”) (collectively, the “Parties”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement (defined below).

RECITALS

WHEREAS, the Parties entered into to a Fund Participation Agreement dated April 20, 2001, as amended, (the “Agreement”); and

WHEREAS, the Parties desire to add an additional Great-West separate account which is exempt from registration under the 1933 Act and the 1940 Act; and

WHEREAS, the Parties desire and agree to amend the Agreement by deleting in its entirety Schedule A of the Agreement and replacing it with the Schedule A attached hereto.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

 

1.

Schedule A to the Agreement is hereby deleted in its entirety and replaced with the Schedule A attached hereto; and

 

 

2.

Paragraph 2.1 of the Agreement is deleted in its entirety and replaced with the following:

2.1  GWL&A represents and warrants that the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act or exempt from registration thereunder, and that the Contracts will be issued and sold in compliance in all material respects with all applicable laws, rules and regulations (collectively, “laws”). GWL&A further represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has a legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset account under Section 10-7-401, et seq.

 

of the Colorado Insurance Law and has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act, unless exempt from registration, to serve as a segregated investment account for the Contracts and that it will maintain such registration for so long as any Contracts are outstanding as required by applicable law.

 

 

3.  All

other provisions of the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 1 day of August, 2014.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

By its authorized officer,

 

        

  

By:

  

/s/ Susan Gile

 

Name:

  

Susan Gile

 

Title:

  

VP, Individual Markets

  DELAWARE VIP TRUST,
 

By its authorized officer,

 

By:

  

/s/ Patrick P. Coyne

 

Name:

  

Patrick P. Coyne

 

Title:

  

President

DELAWARE MANAGEMENT COMPANY,

A SERIES OF DELAWARE MANAGEMENT BUSINESS TRUST

 

        

  

By its authorized officer,

 

By:

  

/s/ Patrick P. Coyne

 

Name:

  

Patrick P. Coyne

 

Title:

  

President

  DELAWARE DISTRIBUTORS, L.P.
 

By its authorized officer,

 

By:

 

/s/ J. Scott Coleman,

 

Name:

  

J. Scott Coleman, CFA

 

Title:

   Executive Vice President

SCHEDULE A

Separate Accounts

Name of Separate Accounts

Great-West Life & Annuity Insurance Company Accounts:

Variable Annuity-1 Series Account

Variable Annuity-2 Series Account

COLI VUL 2 Series Account

COLI VUL 4 Series Account

COLI VUL 7 Series Account

EX-99.(H)(41) 25 d694125dex99h41.htm EX-99.(H)(41) EX-99.(H)(41)

AMENDMENT TO FUND PARTICIPATION AGREEMENT BETWEEN GREAT

WEST LIFE & ANNUITY COMPANY, DELAWARE VIP TRUST, DELAWARE

MANAGEMENT COMPANY AND DELAWARE DISTRIBUTORS, L.P.

THIS AMENDMENT TO FUND PARTICIPATION AGREEMENT is made as of this 1st day of May, 2016, by and among Delaware VIP Trust, Delaware Management Company, Delaware Distributors, L.P. and Great-West Life & Annuity Insurance Company (“Great-West”) (collectively, the “Parties”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement (defined below).

RECITALS

WHEREAS, the Parties entered into to a Fund Participation Agreement dated April 20, 2001, as amended, (the “Agreement”); and

WHEREAS, the Parties desire to add additional Great-West separate accounts to the Agreement; and

WHEREAS, the Parties desire and agree to amend the Agreement by deleting in its entirety Schedule A of the Agreement and replacing it with the Schedule A attached hereto.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

 

1.

Schedule A to the Agreement is hereby deleted in its entirety and replaced with the Schedule A attached hereto; and

 

 

2.

All other provisions of the Agreement shall remain in full force and effect.

[Remainder of page left intentionally blank.]

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 1st day of May, 2016.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

By its authorized officer,

 

        

  

By:

  

/s/ Ron Laeyendecker

 

Name:

  

Ron Laeyendecker

 

Title:

  

Senior Vice President

  DELAWARE VIP TRUST,
 

By its authorized officer,

 

By:

  

/s/ Roger A. Early

 

Name:

  

Roger A. Early

 

Title:

  

Executive Vice President

DELAWARE MANAGEMENT COMPANY,

A SERIES OF DELAWARE MANAGEMENT BUSINESS TRUST

By its authorized officer,

 

        

  

By:

  

/s/ Susan Natalini

 

Name:

  

Susan Natalini

 

Title:

  

Senior Vice President

  DELAWARE DISTRIBUTORS, L.P.
 

By its authorized officer,

 

By:

  

/s/ Stephen J. Busch

 

Name:

  

Stephen J. Busch

 

Title:

  

Senior Vice President

SCHEDULE A

Separate Accounts

Name of Separate Accounts

Great-West Life & Annuity Insurance Company Accounts:

FutureFunds Series Account

FutureFunds II Series Account

Retirement Plan Series Account

Trillium Variable Annuity Account

Variable Annuity-1 Series Account

Variable Annuity-2 Series Account

Variable Annuity Account 5

COLI VUL-2 Series Account

COLI VUL-4 Series Account

COLI VUL-7 Series Account

Variable Annuity-8 Series Account

Variable Annuity-9 Series Account

EX-99.(H)(47) 26 d694125dex99h47.htm EX-99.(H)(47) EX-99.(H)(47)

FIFTH AMENDMENT TO PARTICIPATION AGREEMENT

THIS FIFTH AMENDMENT TO PARTICIPATION AGREEMENT is made as of this 9th day of January, 2009, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”), FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“First GWL&A”), DREYFUS INVESTMENT PORTFOLIOS, THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC., DREYFUS STOCK INDEX FUND, INC. and DREYFUS VARIABLE INVESTMENT FUND (the “Funds”), collectively the “Parties”. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement (defined below).

RECITALS

WHEREAS, GWL&A, First GWL&A and the Funds are parties to a Fund Participation Agreement dated December 31, 1998, as amended from time to time (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to add additional separate Accounts;

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

  1.

Schedule A of the Agreement is hereby replaced in its entirety with Schedule A as attached and incorporated by reference to this Amendment.

 

  2.

All references to the “First GWL&A Account” now includes the COLI VUL Series Account 1 (First GWL&A).

IN WITNESS WHEREOF, the Parties have executed this Amendment.

[The rest of this page is intentionally left blank.]

 

1

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By its authorized officer,

By:

  

     

Title:  
Date:  

FIRST GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By its authorized officer,
By:   /s/ Ron Laeyendecker
Name:   Ron Laeyendecker
Title:   Sr. Vice President
Date:   1/16/09

ON BEHALF OF THE DREYFUS FUNDS LISTED ABOVE AS PARTIES TO THE AGREEMENT

By:   /s/ Michael A. Rosenberg
Name:   Michael A. Rosenberg
Title:    Secretary

 

2

SCHEDULE A

 

Contracts

   

Form Numbers

AICPA Variable Annuity

   

J438

Individual Flexible Premium Variable

Universal Life Insurance

   

J355, J355NY, J350, J50rev

J500, J500NY

PPVUL – NY

PPVUL

Separate Accounts

Maxim Series Account

COLI VUL-2 Series Account (GWL&A)

COLI VUL-4 (GWL&A)

COLI VUL-7 Series Account (GWL&A) (an unregistered Separate Account)

COLI VUL-1 Series Account (First GWL&A) (an unregistered Separate Account)

COLI VUL-2 Series Account (First GWL&A)

COLI VUL-4 (First GWL&A)

 

3

EX-99.(H)(48) 27 d694125dex99h48.htm EX-99.(H)(48) EX-99.(H)(48)

SIXTH AMENDMENT TO PARTICIPATION AGREEMENT

THIS SIXTH AMENDMENT TO PARTICIPATION AGREEMENT is made effective this 1st day of October, 2009, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”), FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“First GWL&A”), DREYFUS INVESTMENT PORTFOLIOS, THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC., DREYFUS STOCK INDEX FUND, INC. and DREYFUS VARIABLE INVESTMENT FUND (the “Funds”), collectively the “Parties”. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement (defined below).

RECITALS

WHEREAS, GWL&A, First GWL&A and the Funds are parties to a Fund Participation Agreement dated December 31, 1998, as amended from time to time (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to add additional contracts and separate Accounts;

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

  1.

Schedule A of the Agreement is hereby replaced in its entirety with Schedule A as attached and incorporated by reference to this Amendment.

 

  2.

All references to the “GWL&A Account” now includes the Varifund Variable Annuity Account and the Prestige Variable Life Account.

IN WITNESS WHEREOF, the Parties have executed this Amendment.

[The rest of this page is intentionally left blank.]

 

1

Signatures for Sixth Amendment to Participation Agreement October 1, 2009

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By its authorized officer,
By:   /s/ Susan Gile
Name:   Susan Gile
Title:   Vice President, Individual Markets
Date:   11.12.09

FIRST GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By its authorized officer,
By:   /s/ Ron Laeyendecker
Name:   Ron Laeyendecker
Title:   Senior Vice President
Date:   11/13/07

ON BEHALF OF THE DREYFUS FUNDS LISTED ABOVE AS PARTIES TO THE AGREEMENT

 

By:   /s/ Michael A. Rosenberg
Name:   Michael A. Rosenberg
Title:   Secretary
Date:  

 

2

SCHEDULE A

 

Contracts

   

Form Numbers

AICPA Variable Annuity

   

J438

Individual Flexible Premium Variable

   

Universal Life Insurance

   

J355, J355NY, J350, J50rev

J500, J500NY

PPVUL – NY

PPVUL

Varifund Variable Annuity Account

Prestige Variable Life Account

   

V30000, VA40000, VPP50000

CL 1035-99

Separate Accounts

Maxim Series Account

COLI VUL-2 Series Account (GWL&A)

COLI VUL-4 (GWL&A)

COLI VUL-7 Series Account (GWL&A) (an unregistered Separate Account)

COLI VUL-1 Series Account (First GWL&A) (an unregistered Separate Account)

COLI VUL-2 Series Account (First GWL&A)

COLI VUL-4 (First GWL&A)

Varifund Variable Annuity Account (GWL&A)

Prestige Variable Life Account (GWL&A)

 

3

EX-99.(H)(49) 28 d694125dex99h49.htm EX-99.(H)(49) EX-99.(H)(49)

EIGHTH AMENDMENT TO PARTICIPATION AGREEMENT

THIS EIGHTH AMENDMENT TO PARTICIPATION AGREEMENT is made effective this 1st day of November, 2013, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”), FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“First GWL&A”), DREYFUS INVESTMENT PORTFOLIOS, THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC., DREYFUS STOCK INDEX FUND, INC. and DREYFUS VARIABLE INVESTMENT FUND (the “Funds”), collectively the “Parties”. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement (defined below).

RECITALS

WHEREAS, GWL&A, First GWL&A and the Funds are parties to a Fund Participation Agreement dated December 31, 1998, as amended from time to time (the “Agreement”);

WHEREAS, First Great-West Life & Annuity Insurance Company has been renamed Great-West Life & Annuity Insurance Company of New York. and

WHEREAS, the Parties to the Agreement desire to add additional contracts and separate Accounts;

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

  1.

All references to First Great-West Life & Annuity Insurance Company and First GWL&A are hereby deleted, and replaced with Great-West Life & Annuity Insurance Company of New York and GWL&A-NY, respectively.

 

  2.

Schedule A of the Agreement is hereby replaced in its entirety with Schedule A as attached and incorporated by reference to this Amendment.

 

  3.

All references to the “GWL&A Account” now includes the COLI VUL-14 Series Account.

IN WITNESS WHEREOF, the Parties have executed this Amendment.

[The rest of this page is intentionally left blank.]

 

1

  Eighth Amendment to Fund Participation Agreement

  November 1, 2013

  Page 2

 

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By its authorized officer,

 

By:      /s/ Susan Gile                          

 

Name: Susan Gile                               

 

Title:   VP - Individual Markets          

 

Date:  11-4-2013                                 

 

  

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY OF NEW YORK

 

By its authorized officer,

 

By:      /s/ Ron Laeyendecker            

 

Name: Ron Laeyendecker                 

 

Title:   Senior Vice President             

 

Date:  11-4-2013                                  

 

  

ON BEHALF OF THE DREYFUS FUNDS LISTED ABOVE AS PARTIES TO THE AGREEMENT

 

By its authorized officer,

 

By:      /s/ Bradley J. Skapyak            

 

Name: Bradley J. Skapyak                 

 

Title:   President                                  

 

Date:  12/5/13                                      

 

  

 

2

SCHEDULE A

 

Contracts    Form Numbers

AICPA Variable Annuity

   

J438

Individual Flexible Premium Variable

Universal Life Insurance

   

J355, J355NY, J350, J50rev

J500, J500NY

PPVUL – NY

PPVUL

ICC13-J600/J600

Varifund Variable Annuity Account

Prestige Variable Life Account

   

V30000, VA40000, VPP50000

CL 1035-99

Separate Accounts

Maxim Series Account

COLI VUL-2 Series Account (GWL&A)

COLI VUL-4 (GWL&A)

COLI VUL-7 Series Account (GWL&A) (an unregistered Separate Account)

COLI VUL-14 Series Account (GWL&A) (an unregistered Separate Account)

COLI VUL-1 Series Account (GWL&A-NY) (an unregistered Separate Account)

COLI VUL-2 Series Account (GWL&A-NY)

COLI VUL-4 (GWL&A-NY)

Varifund Variable Annuity Account (GWLA)

Prestige Variable Life Account (GWLA)

 

3

EX-99.(H)(53) 29 d694125dex99h53.htm EX-99.(H)(53) EX-99.(H)(53)

THIRD AMENDMENT TO PARTICIPATION AGREEMENT

THIS THIRD AMENDMENT TO PARTICIPATION AGREEMENT is made as of this 20th day of Nov, 2008, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”); FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“First GWL&A”), DWS VARIABLE SERIES I, DWS VARIABLE SERIES II, DWS INVESTMENTS VIT FUNDS (collectively, the “Funds”); DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (the “Adviser”); and DWS INVESTMENTS DISTRIBUTORS, INC. (formerly DWS Scudder Distributors, Inc.) (the “Distributor), collectively the Parties. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Original Agreement (defined below).

RECITALS

WHEREAS, GWL&A, First GWL&A, the Funds, the Adviser and the Distributor are parties to a Fund Participation Agreement dated March 31, 2005 as amended on April 11, 2007 and July 1, 2007, (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to add additional separate Accounts which are exempt from registration.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

  1.

All references to the “First GWL&A Account” now include the COLI VUL Series Account 1 (First GWL&A).

 

  2.

All references to the “GWL&A Account” now include the COLI VUL Series Account 7 (GWL&A).

 

  3.

GWL&A and First GWL&A agree that each has registered or will register certain variable life insurance and variable annuity contracts under the 1933 Act, unless such contracts are exempt from registration thereunder.

 

  4.

Paragraph 2.1 of the Agreement is deleted in its entirety and replaced with the following:

 

  2.1

GWL&A and First GWL&A represent and warrant that the Contracts and the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act (unless exempt

 

1

 

from registration); that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with state insurance suitability requirements. GWL&A & First GWL&A further represents that each is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset account under Colorado insurance law and has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act (unless exempt from registration) to serve as a segregated investment account for the Contracts and that it will maintain such registration for so long as any Contracts are outstanding as required by applicable law.

[Intentionally Left Blank]

 

2

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 20th day of Nov, 2008.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

By its authorized officer,

 

By:

  

/s/ Ron Laeyendecker

Name:

  

Ron Laeyendecker

Title:

  

Senior Vice-President

Date:

  

11/20/08

FIRST GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

By its authorized officer,

 

By:

  

/s/ Robert K. Shaw

Name:

  

Robert K. Shaw

Title:

  

Sr. VP

Date:

  

11/20/08

DWS VARIABLE SERIES I

By its authorized officer,

 

By:

  

/s/ Patricia J. DeFilippis

Name:

  

Patricia J. DeFilippis

Title:

  

Assistant Secretary

Date:

  

DWS VARIABLE SERIES II

By its authorized officer,

 

By:

  

/s/ Patricia J. DeFilippis

Name:

  

Patricia J. DeFilippis

Title:

  

Assistant Secretary

Date:

  

 

3

DWS INVESTMENTS VIT FUNDS

 

By its authorized officer,

By:

  

/s/ Patricia J. DeFilippis

Name:

  

Patricia J. DeFilippis

Title:

  

Assistant Secretary

Date:

  

DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.

By its authorized officers,

By:

  

/s/ Michael Colon

Name:

  

Michael Colon

Title:

  

Chief Operating officer

Date:

  

11/13/08

 

By:

  

/s/ John Ashley

Name:

  

John Ashley

Title:

  

Director

Date:

  

DWS INVESTMENTS DISTRIBUTORS, INC.

 

By its authorized officers,

By:

  

/s/ Philipp Hensler

Name:

  

Philipp Hensler

Title:

  

Chairman & CEO

Date:

  

 

By:

  

/s/ Michael Colon

Name:

  

Michael Colon

Title:

  

Chief Operating officer

Date:

  

11/13/08

 

4

EX-99.(H)(54) 30 d694125dex99h54.htm EX-99.(H)(54) EX-99.(H)(54)

FOURTH AMENDMENT TO PARTICIPATION AGREEMENT

THIS FIFTH AMENDMENT TO PARTICIPATION AGREEMENT is effective this 10th day of August, 2013, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”); GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK, formerly known as FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A-NY”); and DWS VARIABLE SERIES I, DWS VARIABLE SERIES II, and DWS INVESTMENTS VIT FUNDS (collectively, the “Funds”); DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (the “Adviser”); and DWS INVESTMENTS DISTRIBUTORS, INC. (the “Distributor”), collectively the “Parties.” Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Original Agreement (defined below).

RECITALS

WHEREAS, the Parties are parties to a Fund Participation Agreement dated March 31, 2005, as amended on April 11, 2007, July 1, 2007, and November 20, 2008 (the “Agreement”); and

WHEREAS, the Parties desire to add an additional separate Account and update Schedule A to the Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

  1.

All references to the “GWL&A Account” now include the COLI VUL-14 Series Account.

 

  2.

Schedule A is hereby deleted in its entirety and replaced with Schedule A attached hereto.

 

  3.

Except as amended by this Amendment, all other provisions of the Agreement shall remain in full force and effect.

[Intentionally left blank]

 

1

For internal use only

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 10th day of August, 2013.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By its authorized officer,
By:  

/s/ Susan Gile

Name:   Susan Gile
Title:   VP - Individual Markets

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY OF NEW YORK

 

By its authorized officer,
By:  

/s/ Ron Laeyendecker

Name:   Ron Laeyendecker
Title:   Senior Vice President

DWS VARIABLE SERIES I

 

By its authorized officer,
By:  

/s/ W Douglas Beck

Name:   W Douglas Beck
Title:   Managing Director

DWS VARIABLE SERIES II

 

By its authorized officer,
By:  

/s/ W Douglas Beck

Name:   W Douglas Beck
Title:   Managing Director

DWS INVESTMENTS VIT FUNDS

 

By its authorized officer,
By:  

/s/ W Douglas Beck

Name:   W Douglas Beck
Title:   Managing Director

 

2

For internal use only

DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.

 

By its authorized officers,
By:  

 

Name:  
Title:  

 

By:  

/s/ W Douglas Beck

Name:  

W Douglas Beck

Title:   Managing Director

 

DWS INVESTMENTS DISTRIBUTORS, INC.

 

By its authorized officers,
By:  

 

Name:  
Title:  

 

 

By:  

/s/ W Douglas Beck

Name:  

W Douglas Beck

Title:   Managing Director

 

3

For internal use only

SCHEDULE A

DESIGNATED PORTFOLIOS

Class A shares of the following Designated Portfolios:

 

A.

DWS Variable Series I:

DWS Capital Growth VIP

DWS Global Small Cap Growth VIP

DWS Core Equity VIP

DWS International VIP

DWS Bond VIP

 

B.

DWS Variable Series II:

DWS Alternative Asset Allocation VIP

DWS Global Growth VIP

DWS Government & Agency Securities VIP

DWS High Income VIP

DWS Global Equity VIP

DWS Large Cap Value VIP

DWS Money Market VIP

DWS Small Mid Cap Growth VIP

DWS Unconstrained Income VIP

DWS Global Income Builder VIP

DWS Small Mid Cap Value VIP

 

C.

DWS Investments VIT Funds:

DWS Equity 500 Index VIP

DWS Small Cap Index VIP

 

4

For internal use only

EX-99.(H)(55) 31 d694125dex99h55.htm EX-99.(H)(55) EX-99.(H)(55)

FUND PARTICIPATION AGREEMENT

Among

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK

EATON VANCE VARIABLE TRUST

and

EATON VANCE DISTRIBUTORS, INC.

THIS FUND PARTICIPATION AGREEMENT (the “Agreement”) is made and entered into as of this 28TH day of April, 2016 (the “Effective Date”) by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter “GWL&A”), a Colorado life insurance company, on its own behalf and on behalf of its separate account(s) listed on Schedule B attached hereto (the “GWL&A Account(s)”); GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK (hereinafter “GWL&ANY”), a New York life insurance company, on its own behalf and on behalf of its separate account(s) listed on Schedule B (the “GWL&ANY Account(s)”); (the GWL&A Account(s) and the GWL&ANY Account(s) may be referred to herein individually, or collectively as the “Accounts”) (GWL&A and GWL&ANY may be referred to herein individually, each as an “Insurance Party,” or collectively as the “Insurance Parties”); EATON VANCE VARIABLE TRUST (the “Trust”), a Massachusetts business trust, on its behalf and on behalf of each separate investment series thereof, whether existing as of the date above or established subsequent thereto, (each a “Fund” and collectively, the “Funds”); and EATON VANCE DISTRIBUTORS, INC. (hereinafter the “Distributor”) a company organized under the laws of Massachusetts (each a “Party” and collectively the “Parties”).

WHEREAS, the Trust is registered as an open-end management investment company under the Investment Company Act of 1940 (the “1940 Act”) and its shares are registered under the Securities Act of 1933, as amended (hereinafter the “1933 Act”); and

WHEREAS, the Distributor is duly registered as a broker-dealer under the Securities Exchange Act of 1934, as amended (the “1934 Act”) and is a member in good standing of the Financial Industry Regulatory Authority, Inc. (the “FINRA”); and

WHEREAS, the Insurance Parties have certain registered and unregistered variable annuity and variable life contracts supported wholly or partially by the Accounts (the “Contracts”) to be made available to owners thereof, including any participants or employees of such owners as applicable (“Contract Owners”); and

WHEREAS, to the extent required by applicable law, the Insurance Parties have registered the Account(s) as a unit investment trust under the 1940 Act unless excepted from registration pursuant to Section 3(c)(7) or Section 3(c)(l1) of the 1940 Act, and have registered the securities deemed to be issued by the Account(s) under the 1933 Act unless exempt from registration; and

WHEREAS, the GWL&A Account(s) is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of GWL&A, under the insurance laws of the State of Colorado, to set aside and invest assets attributable to the GWL&A Contracts, and the GWL&ANY

Account(s) is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of GWL&ANY, under the insurance laws of the State of New York, to set aside and invest assets attributable to the GWL&ANY Contracts; and

WHEREAS, to the extent permitted by applicable laws and regulations, GWL&A and GWL&ANY intend to purchase shares in the Fund(s) listed in Schedule A attached hereto and incorporated herein by reference, as such Schedule may be amended from time to time by mutual written agreement (the “Designated Portfolio(s)”), on behalf of their respective Accounts to fund the applicable Contracts, and the Fund is authorized to sell such shares to unregistered unit investment trusts such as the Accounts at net asset value (“NAV”); and

WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Accounts also intend to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the “Unaffiliated Funds”) on behalf of the Accounts to fund the Contracts; and

WHEREAS, GWL&A has arrangements with GWL&ANY to provide administrative services, including certain services related to certain performances contemplated herein by GWL&ANY; and

WHEREAS, GWL&A and GWL&ANY intend to utilize their NSCC member broker/dealer affiliate, GWFS Equities, Inc. (“GWFS”), which is and at all times shall remain, duly registered with the SEC as a broker-dealer under the 1934 Act and a member of the FINRA, to transmit instructions for the purchase, redemption and transfer of Fund shares on behalf of the Accounts, and alone, or with the assistance of a recordkeeping affiliate, to perform certain recordkeeping functions associated with the transfer of Fund shares into and out of the Accounts in order to recognize certain organizational economies; and

NOW, THEREFORE, the Parties agree as follows:

 

ARTICLE I.    Sale

of Fund Shares

1.1.        All purchases, redemptions and exchanges of Designated Portfolio shares for the Accounts, in addition to the pricing and correction thereof, of Designated Portfolio shares, shall be governed by and subject to the terms of the Trading and NSCC Fund/SERV Networking Agreement, by and between GWFS and Eaton Vance Distributors, Inc., dated May 29, 2008 (“NSCC Agreement”).

1.2.        Notwithstanding Section 1.1 of this Agreement, if an adjustment is necessary to correct an error which has caused Contract Owners to receive less than the amount to which they are entitled, the number of shares of the applicable sub-account of such Contract Owners will be adjusted and the amount of any underpayments shall be credited by the Distributor to GWL&A and GWL&ANY for crediting of such amounts to the applicable Contract Owners accounts. Upon notification by the Distributor of any overpayment due to an error, GWL&A or GWL&ANY, as applicable, shall promptly remit to Distributor any overpayment that has not been paid to Contract Owners; however, Distributor acknowledges that GWL&A or GWL&ANY, as applicable, does not intend to seek additional payments from any Contract owner unless GWL&A or GWL&ANY, as applicable, is at fault for such error. GWL&A or GWL&ANY, as applicable, will use commercially reasonable efforts to provide Distributor with the necessary information relevant for Distributor to seek remuneration from Contract Owner. In no event shall GWL&A or GWL&ANY, as applicable, be liable to Contract Owners for such adjustments or underpayment amounts unless such adjustment or underpayment is primarily due to the fault of GWL&A or GWL&ANY, as applicable.

1.3        Notwithstanding Section 1.1, the Trust reserves the right to redeem Fund shares in assets other than cash in accordance with the then current Eaton Vance Funds Procedures for Redemptions in Kind and the policies of the Trust as described in the Funds’ then current prospectus.

 

Page 2 of 22

ARTICLE II.    Representations

and Warranties

2.1.        GWL&A represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the GWL&A Account prior to any issuance or sale of units thereof as a segregated asset account under Colorado Law. GWL&ANY represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the GWL&ANY Account prior to any issuance or sale of units thereof as a segregated asset account under New York law.

2.2.        The Insurance Parties represent and warrant that the Contracts are currently and at the time of issuance will be treated as life insurance, endowment or annuity contracts under applicable provisions of the Internal Revenue Code of 1986, as amended (hereinafter the “Code”), that it will maintain such treatment and that it will notify the Trust immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future.

2.3.        The Fund represents and warrants that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares.

2.4.        To the extent that the Fund finances distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its Board, a majority of whom are not interested persons of the Fund, formulate and approve any plan pursuant to Rule 12b-l under the 1940 Act to finance distribution expenses.

2.5.        The Fund represents and warrants that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with the Fund’s Prospectus and any Applicable Law. The Fund and Distributor represent and warrant that they will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with all Applicable Law. The Fund and Distributor shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by Applicable Law. The Insurance Parties will endeavor to keep each other and the Distributor informed of any change in state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a “Law Change”). In the event of a Law Change, the Fund agrees that it may (in its sole discretion) take any action required by a Law Change.

2.6.        The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the Commonwealth of Massachusetts and that it does and will comply in all material respects with the 1940 Act.

2.7.        The Distributor represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the Commonwealth of Massachusetts and any applicable state and federal securities laws.

2.8.        The Fund and the Distributor represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by one or more blanket fidelity bonds or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-l under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bonds must include coverage for larceny and embezzlement and must be issued by a reputable bonding company.

 

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2.9        The Trust represents and warrants that each Fund will comply with the diversification requirements set forth in Section 817(h) of the Code, and the rules and regulations thereunder, including without limitation Treasury Regulation §1.817-5, and will notify the Insurance Parties immediately upon having a reasonable basis for believing any Fund has ceased to comply or might not so comply and will immediately take all reasonable steps to adequately diversify the Fund to achieve compliance. Upon request, the Fund shall provide Insurance Parties a certification of its compliance with Section 817(h) of the Code and Treasury Regulation 1.817-5 within thirty (30) days of the end of each calendar quarter.

2.10.        The Insurance Parties represent and warrant that all of their employees and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by one or more blanket fidelity bonds or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-l under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bonds must include coverage for larceny and embezzlement and must be issued by a reputable bonding company.

2.11.        The Fund will provide the Insurance Parties with as much advance notice as is reasonably practicable of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated Portfolio(s) and consult with the Insurance Parties in order to implement any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expenses by implementing them in conjunction with regular annual updates of the prospectus for the Contracts.

 

ARTICLE III.  

Prospectuses and Proxy Statements: Voting

3.1.        The Distributor or Fund shall provide such documentation (including a camera-ready copy and computer diskette of the current prospectus for the Designated Portfolio(s)) and other assistance as is reasonably necessary in order for the Insurance Parties once each year (or more frequently if the prospectuses for the Designated Portfolio(s) are amended) to have the prospectus for the Contracts and the Fund’s prospectus for the Designated Portfolio(s) printed together in one document. The Fund agrees that in the future, the Insurance Parties may request that the prospectus (and semi-annual and annual reports) for the Designated Portfolio(s) describe only the Designated Portfolio(s) and not name or describe any other portfolios or series that may be in the Fund, unless required by law. The Fund or Distributor, as applicable agree to assist the Insurance Parties in obtaining the required information from EDGAR and the expenses associated with this form of distribution will be borne in accordance with Schedule C.

3.2.        If applicable state or federal laws or regulations require that the Statement of Additional Information (“SAI”) for the Fund be distributed to all Contract Owners, then the Fund and/or Distributor shall provide the Insurance Parties in portable document format (i.e., PDF) only the Fund’s SAI or documentation thereof for the Designated Portfolio(s), with expenses to be borne in accordance with Schedule C, as the Insurance Parties may reasonably require to permit timely distribution thereof to Contract Owners. The Fund shall also provide SAIs to any Contract Owner or prospective owner who requests such SAI from the Fund (although it is anticipated that such requests will be made to the Insurance Parties).

3.3.        The Fund and/or Distributor shall provide the Insurance Parties with copies of the Fund’s proxy material, reports to stockholders and other communications to stockholders for the Designated Portfolio(s) in portable document format (i.e., PDF) only, with expenses to be borne in accordance with Schedule C, as the Insurance Parties may reasonably require to permit timely distribution thereof to Contract Owners, as required by law.

 

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3.4.        It is understood and agreed that, except with respect to information regarding an Insurance Party provided in writing by that Party, such Insurance Party is not responsible for the content of the prospectus or SAI for the Designated Portfolio(s).

3.5.        If and to the extent required by law each Insurance Party shall:

 

  (i)

solicit voting instructions from Contract Owners;

 

  (ii)

vote the Designated Portfolio(s) shares held in the Accounts in accordance with instructions received from Contract Owners; and

 

  (iii)

vote Designated Portfolio shares held in the Accounts for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contract Owners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. The Insurance Parties reserve the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law.

 

ARTICLE IV.  

Sales Material and Information

4.1.        The Insurance Parties shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that the Insurance Parties develop or propose to use and in which the Fund (or a Portfolio thereof), its investment adviser or one of its sub-advisers or the Distributor is named in connection with the Contracts, at least ten (10) Business Days prior to its use. No such material shall be used if the Fund objects to such use within five (5) Business Days after receipt of such material.

4.2.        The Insurance Parties shall not give any information or make any representations or statements on behalf of the Fund in connection with the sale of the Contracts other than the information or representations contained in the registration statement, prospectus or SAI for the Fund shares, as the same may be amended or supplemented from time to time, or in sates literature or other promotional material approved by the Fund or Distributor, except with the permission of the Fund or Distributor.

4.3.        The Fund or the Distributor shall furnish, or shall cause to be furnished, to The Insurance Parties, a copy of each piece of sales literature or other promotional material in which the Insurance Parties and/or their separate account(s) are named at least ten (10) Business Days prior to its use. No such material shall be used if the Insurance Parties object to such use within five (5) Business Days after receipt of such material.

4.4.        The Fund shall not give any information or make any representations on behalf of the Insurance Parties or concerning the Insurance Parties, the Accounts, or the Contracts other than the information or representations contained in the Contracts, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by the Insurance Parties or their designee, except with the permission of the Insurance Parties.

4.5.        The Fund will provide to the Insurance Parties at least one complete copy of all registration statements, prospectuses, SAIs, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Designated Portfolio(s), after the filing of such document(s) with the SEC or FINRA or other regulatory authorities.

 

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4.6.        The Insurance Parties will provide to the Fund at least one complete copy of all sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Accounts, contemporaneously with the filing of such document(s) with the SEC, FINRA, or other regulatory authority.

4.7.        For purposes of Articles IV and VII, the phrase “sales literature and other promotional material” includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as the Internet or other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and shareholder reports, and proxy materials (including solicitations for voting instructions) and any other material constituting sales literature or advertising under the FINRA rules, the 1933 Act or the 1940 Act.

4.8.        At the request of any Party to this Agreement, each other Party will make available to the other Party’s independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any Party’s obligations under this Agreement.

4.9      Pricing errors in the computation of the Fund’s NAV shall be handled in accordance with Section 7 of the NSCC Agreement.

ARTICLE V.     Fees and Expenses

5.1.        Except as otherwise provided under this Agreement, the Trust and the Distributor shall pay no fee or other compensation to the Insurance Parties under this Agreement, and the Insurance Parties shall pay no fee or other compensation to the Fund or the Distributor, except as made a part of this Agreement as it may be amended from time to time with the mutual consent of the parties hereto. All expenses incident to performance by each party of its respective duties under this Agreement shall be paid by that party, unless otherwise specified in this Agreement.

5.2.        All expenses incident to performance by the Fund and the Distributor under this Agreement shall be paid by the appropriate Party, as further provided in Schedule C. The Fund shall ensure that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent required, in accordance with applicable state laws prior to their sale.

5.3.        The Parties shall bear the expenses of routine annual distribution (mailing costs) of the Fund’s prospectus and distribution (mailing costs) of the Fund’s proxy materials and reports to owners of Contracts offered by the Insurance Parties, which may be required by law, in accordance with Schedule C.

5.4        The Fund, the Distributor and the Adviser acknowledge that a principal feature of the Contracts is the Contract Owner’s ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract’s cash value between funds and portfolios. The Fund and the Adviser agree to cooperate with the Insurance Parties in facilitating the operation of the Accounts and the Contracts as described in the prospectus for the Contracts, including but not limited to cooperation in facilitating transfers between Unaffiliated Funds.

ARTICLE VI.  Diversification and Qualification

 

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6.1.        The Fund and the Distributor represent and warrant that the Fund and each Designated Portfolio thereof will at all times invest money from the Contracts in such a manner as to ensure that the Contracts will be treated as variable contracts under the Code and the regulations issued thereunder. Without limiting the scope of the foregoing, the Fund will at all times comply with Section 817(h) of the Code and Treasury Regulation §1.817-5, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications to such Section or Regulations. In the event of a breach of this Article VII by the Fund, it will take all reasonable steps (a) to notify the Insurance Companies of such breach and (b) to adequately diversify the Fund so as to achieve compliance within the grace period afforded by Regulation §1.817-5.

6.2.        The Fund and the Distributor represent and warrant that the Fund and each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect.

6.3.        The Fund and the Distributor will notify the Insurance Parties promptly upon having a reasonable basis for believing that the Fund or any Designated Portfolio has ceased to comply with the aforesaid Subchapter M qualification requirements or might not so comply in the future.

6.4.        The Fund at the Fund’s expense shall provide the Insurance Parties or their designees with reports certifying compliance with the aforesaid Subchapter M qualification requirements, at the times provided for; provided, however, that providing such reporting does not relieve the Fund of its responsibility for such compliance or of its liability for any non-compliance.

ARTICLE VII.    Indemnification

7.1.        Indemnification by the Insurance Parties

(a)        Each Insurance Party (solely with respect to their respective Account) agrees to indemnify and hold harmless the Fund and the Distributor and each of their respective officers and directors or trustees and each person, if any, who controls the Fund or Distributor within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 7.1) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of such Insurance Party) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages or liabilities (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund’s shares or the Contracts and:

 

  (i)

arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the Contracts or sales literature or other promotional material for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished to the Insurance Parties by or on behalf of the Fund for use in the Contracts or sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or Fund shares; or

 

Page 7 of 22

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in sales literature or other promotional material of the Fund not supplied by the Insurance Parties or persons under their control) or wrongful conduct of the Insurance Parties or persons under their control, with respect to the sale or distribution of the Contracts or Fund Shares; or

 

  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in sales literature or other promotional material of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished to the Fund by or on behalf of the Insurance Parties; or

 

  (iv)

arise as a result of any failure by the Insurance Parties to provide the services and furnish the materials under the terms of this Agreement; or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by the Insurance Parties in this Agreement or arise out of or result from any other material breach of this Agreement by the Insurance Parties,

as limited by and in accordance with the provisions of Sections 7.1(b) and 7.1(c) of this Agreement.

(b)  Each Insurance Party shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this. Agreement to any of the Indemnified Parties.

(c)  Each Insurance Party shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party has notified such Insurance Party in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim has been served upon such Indemnified Party (or after such Indemnified Party has received notice of such service on any designated agent), but failure to notify such Insurance Party of any such claim shall not relieve such Insurance Party from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that such Insurance Party has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, such Insurance Party shall be entitled to participate, at its own expense, in the defense of such action. Such Insurance Party also shall be entitled to assume the defense thereof, with counsel satisfactory to the Party named in the action. After notice from the Insurance Party to such Party of the Insurance Party’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and such Insurance Party will not be liable to such Party under this Agreement for any legal or other expenses subsequently incurred by such Party independently in connection with the defense thereof other than reasonable costs of investigation.

(d)        The Indemnified Parties will promptly notify the affected Insurance Party(ies) of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund.

7.2.        Indemnification by the Fund

 

Page 8 of 22

(a) The Fund agrees to indemnify and hold harmless the Insurance Parties and their directors and officers and each person, if any, who controls an Insurance Party within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 7.3) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of the Fund) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may be required to pay or become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements, are related to the operations of the Fund and:

 

  (i)

arise as a result of any failure by the Fund to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or

 

  (ii)

arise out of or result from any material breach of any representation and/or warranty made by the Fund in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund;

as limited by and in accordance with the provisions of Sections 7.2(b) and 7.2(c).

(b) The Fund shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement to any of the Indemnified Parties.

(c) The Fund shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party has notified the Fund in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim has been served upon such Indemnified Party (or after such Indemnified Party has received notice of such service on any designated agent), but failure to notify the Fund of any such claim shall not relieve it from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Fund has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Fund will be entitled to participate, at its own expense, in the defense thereof. The Fund shall also be entitled to assume the defense thereof, with counsel satisfactory to the Party named in the action. After notice from the Fund to such Party of the Fund’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Fund will not be liable to such Party under this Agreement for any legal or other expenses subsequently incurred by such Party independently in connection with the defense thereof other than reasonable costs of investigation.

(d) Each Insurance Party agrees to promptly notify the Fund of the commencement of any litigation or proceeding against itself or any of its respective officers or directors in connection with this Agreement, the issuance or sale of the Contracts, the operation of the Accounts, or the sale or acquisition of shares of the Fund.

7.3.        Indemnification by the Distributor

(a)        The Distributor agrees to indemnify and hold harmless the Insurance Parties and their directors and officers and each person, if any, who controls an Insurance Party within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 7.4) against any and

 

Page 9 of 22

all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of the Distributor) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund’s shares or the Contracts and:

 

  (i)

arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund or Distributor (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished to the Distributor or Fund by or on behalf of the Insurance Parties for use in the registration statement or SAI or prospectus for the Fund or in sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or Fund shares; or

 

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI, sales literature or other promotional material for the Contracts not supplied by the Distributor or persons under its control) or wrongful conduct of the Fund or the Distributor or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or

 

  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished to the Insurance Party for inclusion therein by or on behalf of the Distributor or Fund; or

 

  (iv)

arise as a result of any failure by the Fund or Distributor to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by the Fund or Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund or Distributor, as limited by and in accordance with the provisions of Sections 7.3(b) and 7.3(c). This indemnification is in addition to and apart from the responsibilities and obligations of the Distributor specified in Article VI.

(b)        The Distributor shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement to any of the Indemnified Parties.

(c)        The Distributor shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party has notified the Distributor in writing

 

Page 10 of 22

within a reasonable time after the summons or other first legal process giving information of the nature of the claim has been served upon such Indemnified Party (or after such Indemnified Party has received notice of such service on any designated agent), but failure to notify the Distributor of any such claim shall not relieve the Distributor from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Distributor has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Distributor will be entitled to participate, at its own expense, in the defense thereof. The Distributor also shall be entitled to assume the defense thereof, with counsel satisfactory to the Party named in the action. After notice from the Distributor to such Party of the Distributor’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Distributor will not be liable to such Party under this Agreement for any legal or other expenses subsequently incurred by such Party independently in connection with the defense thereof other than reasonable costs of investigation.

(d)        Each Insurance Party agrees to promptly notify the Distributor of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Accounts.

ARTICLE VIII.  Applicable Law

8.1.        This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of Delaware.

8.2.        This Agreement is subject to the provisions of the 1933, 1934, and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the SEC may grant and the terms of this Agreement will be interpreted and construed in accordance therewith.

ARTICLE IX. Termination

9.1.        This Agreement will terminate:

(a)        at the option of any Party, with or without cause, with respect to some or all Portfolios, upon one-hundred and twenty (120) days advance written notice delivered to the other Parties; provided, however, that such notice shall not be given earlier than one-hundred and twenty (120) days following the Effective Date of this Agreement; or

(b)        at the option of an Insurance Party by written notice to the other Parties with respect to any Portfolio based upon such Insurance Party’s determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; provided, however, that termination by only one Insurance Party will not terminate this Agreement as between the other Insurance Parties and the Fund and Distributor. Prompt advance written notice of election to terminate shall be furnished by the Insurance Party, said termination to be effective ten days after receipt of notice unless the Fund makes available a sufficient number of Fund shares to reasonably meet the requirements of the Contracts, as agreed upon by an Insurance Party, within said ten-day period; or

(c)        at the option of an Insurance Party by written notice to the other Parties with respect to any Portfolio in the event any of the Portfolio’s shares are not registered, issued or sold in accordance with applicable state and/or federal law or such law precludes the use of such shares as the underlying investment media of the Contracts issued or to be issued by such Insurance Party; provided, however, that termination by

 

Page 11 of 22

only one Insurance Party will not terminate this Agreement as between the other Insurance Parties and the Fund and Distributor; or

(d)        at the option of the Fund or Distributor in the event that formal administrative proceedings are instituted against any Insurance Party by the FINRA, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding such Insurance Party’s duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares, if, in each case, the Fund or Distributor, as the case may be, reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of such Insurance Party to perform its obligations under this Agreement. Prompt notice of election to terminate shall be furnished by the Fund with said termination to be effective upon receipt of notice; or

(e)        at the option of an Insurance Party in the event that formal administrative proceedings are instituted against the Fund or the Distributor by the FINRA, the SEC, or any state securities or insurance department or any other regulatory body, if such Insurance Party reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of the Fund, the Distributor or the Adviser to perform their obligations under this Agreement; provided, however, that termination by only one Insurance Party will not terminate this Agreement as between the other Insurance Parties and the Fund and Distributor. Prompt notice of election to terminate shall be furnished by the Fund with said termination to be effective upon receipt of notice; or

(f)        at the option of either the Fund or the Distributor, if (i) the Fund or the Distributor, respectively, determines, in its sole judgment reasonably exercised in good faith, that an Insurance Party has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on such Insurance Party’s ability to perform its obligations under this Agreement, (ii) the Fund or the Distributor notifies such Insurance Party of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by such Insurance Party and any other changes in circumstances since the giving of such a notice, the determination of the Fund or the Distributor continues to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day will be the effective date of termination; provided, however, that termination under this subsection (f) with respect to only one Insurance Party will not terminate this Agreement as between the other Insurance Parties and the Fund and Distributor; or

(g)        at the option of an Insurance Party, if (i) such Insurance Party determines, in its sole judgment reasonably exercised in good faith, that the Fund or the Distributor has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Fund’s or Distributor’s ability to perform its obligations under this Agreement, (ii) such Insurance Party notifies the Fund or Distributor, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Fund or Distributor and any other changes in circumstances since the giving of such a notice, the determination of such Insurance Party continues to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day will be the effective date of termination; provided, however, that termination by only one Insurance Party will not terminate this Agreement as between the other Insurance Parties and the Fund and Distributor; or

(h)        at the option of any non-defaulting Party in the event of a material breach of this Agreement by any Party (the “Defaulting Party”) other than as described in 9.1(a)-(g); provided, that the non-defaulting Party gives written notice thereof to the Defaulting Party, with copies of such notice to all other non-defaulting Parties, and if such breach has not been remedied within (30) days after such written notice is given, then the non-defaulting Party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the Defaulting Party.

 

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9.2.        Notice Requirement. No termination of this Agreement will be effective unless the Party terminating this Agreement gives prior written notice to all other Parties of its intent to terminate, which notice must set forth the basis for the termination. Furthermore:

(a)        in the event any termination is based upon the provisions of Section 9.1(a), 9.1(f), 9.1(g) or 9.1(h) of this Agreement, the prior written notice must be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the Parties;

(b)        in the event any termination is based upon the provisions of Section 9.1(d) or 9.1(e) of this Agreement, the prior written notice must be given at least thirty (30) days before the effective date of termination; and

(c)        in the event any termination is based upon the provisions of Section 9.1(c), the prior written notice must be given in advance of the effective date of termination, which date will be determined by the Party sending the notice.

9.3.        Effect of Termination. Notwithstanding any termination of this Agreement, the Fund and the Distributor shall, at the option of the Insurance Parties, continue to make available additional shares of the Designated Portfolio(s) pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as “Existing Contracts”). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolio(s), redeem investments in the Designated Portfolio(s) and/or invest in the Designated Portfolio(s) upon the making of additional purchase payments under the Existing Contracts.

9.4.        Surviving Provisions. Notwithstanding any termination of this Agreement, each Party’s obligations under Article VII, Section 11.1, and Section 11.5 will survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement will also survive and not be affected by any termination of this Agreement.

ARTICLE X.   Notices

Any notice will be sufficiently given when sent by registered or certified mail to the other Party at the address of such Party set forth below or at such other address as such Party may from time to time specify in writing to the other Parties.

If to GWL&A:

Great-West Life & Annuity Insurance Company

8515 East Orchard Road

Greenwood Village, CO 80111

Attn: Chief Legal Counsel, Financial Services

If to GWL&ANY:

Great-West Life & Annuity Insurance Company of New York

c/o Great-West Life & Annuity Insurance Company

8515 East Orchard Road

Greenwood Village, CO 80111

 

Page 13 of 22

Attn: Chief Legal Counsel, Financial Services

 

If to the Fund:

   

 

c/o Eaton Vance Distributors, Inc.

Two International Place

Boston, MA 02100:

   
  

Attention: Chief Legal Officer

   

 

If to the Distributor:

      
  

 

Eaton Vance Distributors, Inc.

Two International Place

Boston, MA 02110

   
  

Attention: Chief Legal Officer

   

ARTICLE XI. Miscellaneous

11.1.    Subject to the requirements of legal process and regulatory authority, each Party shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other Party and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected Party until such time as such information may come into the public domain. Without limiting the foregoing, no Party shall disclose any information that another Party has designated as proprietary.

11.2.    The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect.

11.3.    This Agreement may be executed simultaneously in two or more counterparts, each of which taken together constitutes one and the same instrument. Any signature that is delivered by facsimile transmission or by email delivery of a ‘pdf’ format data file will create a valid and binding obligation of the Party executing with the same force and effect as if such facsimile or ‘pdf’ signature were an original thereof.

11.4.    If any provision of this Agreement is held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement will not be affected thereby.

11.5.    Each Party shall cooperate with each other Party and all appropriate governmental authorities (including without limitation the SEC, the FINRA and state insurance regulators) and shall permit such other Party and authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each Party further agrees to furnish the Colorado and/or New York Insurance Commissioner(s) with any information or reports in connection with services provided under this Agreement which such Commissioner may reasonably request in order to ascertain whether the variable annuity

 

Page 14 of 22

operations of GWL&A and/or GWL&ANY are being conducted in a manner consistent with the applicable state’s applicable laws or regulations.

11.6.    The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the Parties are entitled to under state and federal laws.

11.7    This Agreement may not be amended except by a writing signed by each of the Parties. The terms or provisions of this Agreement may be waived only by a writing signed by the Party waiving compliance. No waiver by any Party of any term or provision of this Agreement will be deemed to be a continuing waiver, or deemed to be a waiver of any other term or provision of this Agreement.

11.8.    This Agreement or any of the rights and obligations hereunder may not be assigned by any Party without the prior written consent of all Parties.

11.9.    Each Insurance Party is hereby expressly put on notice of the limitation of liability as set forth in the Declarations of Trust of the Fund and agree that the obligations assumed by the Fund and the Distributor pursuant to this Agreement are limited in any case to the Fund and its respective assets and the Insurance Parties shall not seek satisfaction of any such obligation from the shareholders of the Fund, trustees, officers, employees or agents of the Fund, and neither shareholders of the Fund, trustees, officers, employees or agents of the Fund assume any personal liability in connection with its business or for obligations entered into on its behalf. It is also understood that each of the Funds shall be deemed to be entering into a separate Agreement with the Insurance Parties so that it is as if each of the Funds had signed a separate Agreement with the Insurance Parties and that a single document is being signed simply to facilitate the execution and administration of the Agreement.

11.10.    The Fund and the Distributor agree that the obligations assumed by each Insurance Party pursuant to this Agreement are limited in any case to the applicable Insurance Party and its assets and neither the Fund nor Distributor shall seek satisfaction of any such obligation from the shareholders of any of the Insurance Parties, the directors, officers, employees or agents of any of the Insurance Parties, or any of them, except to the extent permitted under this Agreement.

11.11.    No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Distributor and the Fund.

11.12.    None of the Parties shall be liable to the other for any and all losses, damages, costs, charges, counsel fees, payments, expenses or liability due to any failure, delay or interruption in performing its obligations under this Agreement, and without the fault or negligence of such Party, due to causes or conditions beyond its control including, without limitation, labor disputes, strikes (whether legal or illegal), lock outs (whether legal or illegal), civil commotion, riots, war and war-like operations including acts of terrorism, embargoes, epidemics, invasion, rebellion, hostilities, insurrections, explosions, floods, unusually severe weather conditions, earthquakes, military power, sabotage, governmental regulations or controls, failure of power, fire or other casualty, accidents, national or local emergencies, boycotts, picketing, slow-downs, work stoppages, acts of God or natural disasters, provided that such failure or delay was not capable of mitigation pursuant to a prudent business continuity, disaster recovery or similar program.

11.13.    This Agreement sets forth the entire agreement and understanding of the Parties relating to the subject matter hereof, and supersedes all other prior agreements, arrangements, and understandings, whether written or oral, between the Parties.

11.14     The Insurance Parties may hire or make arrangements for subcontractors, agents or affiliates to perform the services set forth in this Agreement. The Insurance Parties shall provide the Fund with written

 

Page 15 of 22

notice of the names of any subcontractors, agents or affiliates the Insurance Parties hires or arranges to perform such services, and any specific operational requirements that arise as a result of such arrangement. The Insurance Parties agree that it is and will be responsible for the acts and omissions of its subcontractors, affiliates, and agents and that the indemnification provided by the Insurance Parties in Section 7.1 of this Agreement shall be deemed to cover the acts and omissions of such subcontractors, affiliates, and agents to the same extent as if they were the acts or omissions of the Insurance Parties.

ARTICLE XII. Potential Conflicts

12.1    The parties acknowledge that the Fund has received the “Mixed and Shared Funding Exemptive Order which requires the Fund and each participating insurance company and plan to comply with conditions and undertakings substantially as provided in this Article. In the event of any inconsistencies between the terms of the Mixed and Shared Funding Exemptive Order and those provided for in this Article, the conditions and undertakings imposed by the Mixed and Shared Funding Exemptive Order shall govern this Agreement.

12.2    The Trust’s Board will monitor each Fund for the existence of any material irreconcilable conflict between and among the interests of the Contract Owners of all participating insurance companies and of plan participants and plans investing in the Fund, and determine what action, if any, should be taken in response to such conflicts. An irreconcilable material conflict may arise for a variety of reasons, which may include: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling or any similar action by insurance, tax or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of the Funds are being managed; (e) a difference in voting instructions given by variable annuity and variable life insurance Contract Owners; (f) a decision by a participating insurance company to disregard the voting instructions of Contract Owners and (g) if applicable, a decision by a plan to disregard the voting instructions of plan participants. The Board shall have sole authority to determine whether an irreconcilable material conflict exists and its determination shall be binding upon Insurance Parties.

12.3    The Insurance Parties will report promptly any potential or existing conflicts to the Board. The Insurance Parties will be obligated to assist the Board in carrying out its duties and responsibilities under the Mixed and Shared Funding Exemptive Order by providing the Board with all information reasonably necessary for the Board to consider any issues. The responsibility includes, but is not limited to, an obligation by the Insurance Parties to inform the Board whenever it has determined to disregard Contract Owners voting instructions.

12.4    If a majority of the Board, or a majority of its disinterested Board members, determines that a material irreconcilable conflict exists with regard to Contract Owner investments in the Fund, the Board shall give prompt notice of the conflict and the implications thereof to all participating insurance companies and plans. If the Board determines that the Insurance Parties are a relevant participating insurance company or plan with respect to said conflict, the Insurance Parties shall at its sole cost and expense, and to the extent reasonably practicable (as determined by a majority of the disinterested Board members), take such action as is necessary to remedy or eliminate the irreconcilable material conflict. Such necessary action may include but shall not be limited to: (a) withdrawing the assets allocable to some or all of the Accounts from the Fund and reinvesting those assets in a different investment medium, which may include another Fund of the Trust, or another investment company; (b) submitting the question as to whether such segregation should be implemented to a vote of all affected Contract Owners and as appropriate, segregating the assets of any appropriate group (i.e., variable annuity or variable life insurance Contract Owners of one or more participating insurance companies) that votes in favor of such segregation, or offering to the affected Contract Owners the option of making such a change; and (c) establishing a new registered management investment company (or series thereof) or managed separate account and obtaining any necessary approvals or orders of

 

Page 16 of 22

the SEC in connection therewith. If a material irreconcilable conflict arises because of the Insurance Parties’ decision to disregard Contract Owner voting instructions, and that decision represents a minority position or would preclude a majority vote, the Insurance Parties may be required, at the election of the Trust to withdraw the Account’s investment in the Fund, and no charge or penalty will be imposed as a result of such withdrawal. The responsibility to take such remedial action shall be carried out with a view only to the interests of the Contract Owners. For the purposes of this Article, a majority of the disinterested members of the Board shall determine whether or not any proposed action adequately remedies any irreconcilable material conflict but in no event will the Fund(s) or its investment adviser (or any other investment adviser of the Fund) be required to establish a new funding medium for any Contract. Further, the Insurance Parties shall not be required by this Article to establish a new funding medium for any Contracts if any offer to do so has been declined by a vote of a majority of Contract Owners materially and adversely affected by the irreconcilable material conflict.

12.5    The Board’s determination of the existence of an irreconcilable material conflict and its implications shall be made known promptly and in writing to the Insurance Parties.

12.6    No less than annually, the Insurance Parties shall submit to the Board such reports, materials or data as the Board may reasonably request so that the Board may fully carry out its obligations. Such reports, materials, and data shall be submitted more frequently if deemed appropriate by the Board.

12.7    If and to the extent that the SEC promulgates new rules or regulations with respect to mixed or shared funding on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Trust and/or the participating insurance companies as appropriate, shall take such steps as may be necessary to comply with such rules and regulations, as adopted, to the extent such rules are applicable; and (b) this Article XII shall be deemed to incorporate such new terms and conditions, and any term or condition of this Article XII that is inconsistent therewith, shall be deemed to be succeeded thereby.

12.8    The Insurance Parties acknowledges each has been advised by the Trust that it may be appropriate for the Insurance Parties to disclose the potential risks of mixed and shared funding in prospectuses or other applicable disclosure documents.

(The remainder of this page intentionally left blank; signature page to follow)

 

Page 17 of 22

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on its behalf by its duly authorized representative, to be effective as of the Effective Date.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

       By:   /s/ Susan Gile
  Name:   Susan Gile
  Title:   VP - Individual Markets

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK

  By:   /s/ Ron Laeyendecker
  Name:   Ron Laeyendecker
  Title:   Senior Vice President
  EATON VANCE VARIABLE TRUST
  By:   /s/ James F. Kirchner
  Name:   James F. Kirchner
  Title:   Treasurer
  EATON VANCE DISTRIBUTORS, INC.
  By:   /s/ Sean P. Kelly
  Name:   Sean P. Kelly, CFA

Title:   SVP and Managing Director Sub-Advisory and DCIO Services

(Schedule A to follow)

 

Page 18 of 22

SCHEDULE A

DESIGNATED PORTFOLIOS

Any and all Funds of the Trust available to new investors on or after the effective date of this Agreement which, pursuant to the terms of the Funds’ registration statements, are eligible to serve as underlying funds to the Separate Accounts listed in Schedule B.

(Schedule B to follow)

 

Page 19 of 22

SCHEDULE B

SEPARATE ACCOUNTS

GWL&A Accounts

FutureFunds Series Account

FutureFunds II Series Account

Retirement Plan Series Account

Trillium Variable Annuity Account

Variable Annuity-1 Series Account

Variable Annuity-2 Series Account

Variable Annuity Account 5

COLI VUL-2 Series Account

COLI VUL-4 Series Account

COLI VUL-7 Series Account

COLI VUL-14 Series Account

DB-1 Series Account

Variable Annuity-8 Series Account

Variable Annuity-9 Series Account

GWL&ANY Accounts

FutureFunds II Series Account

COLI VUL-1 Series Account

COLI VUL-2 Series Account

DB-1 Series Account

Variable Annuity-1 Series Account

Variable Annuity-2 Series Account

Variable Annuity Account 5

Variable Annuity-8 Series Account

Variable Annuity-9 Series Account

(Schedule C to follow)

 

Page 20 of 22

SCHEDULE C

EXPENSES

The Fund and/or Adviser, and the Insurance Parties (“GWL&A” in this Schedule C) will coordinate the functions and pay the costs of completing these functions based upon an allocation of costs in the tables below.

 

Item    Function   

Party Responsible

for Coordination

  

Party

Responsible

for Expense

Mutual Fund Prospectus    Printing of combined prospectuses, or compiling of electronic prospectus, if needed in the future    GWL&A   Fund or Distributor, as applicable
     Fund or Adviser shall supply GWL&A with such numbers of the Designated Portfolio(s) prospectus(es) as GWL&A reasonably requests    GWL&A   Fund or Distributor, as applicable
     Distribution to New and Inforce Clients    GWL&A   GWL&A
     Distribution to Prospective Clients    GWL&A   GWL&A
Mutual Fund Prospectus Update & Distribution    If Required by Fund or Adviser   

GWL&A

(electronic copies to be timely provided by Fund or Distributor)

   Fund or Distributor
     If Required by GWL&A    GWL&A   GWL&A
Mutual Fund SAI    Printing   

GWL&A

(electronic copies to be timely provided by Fund or Distributor)

   Fund or Distributor
     Distribution    GWL&A   GWL&A
Proxy Material for Mutual Fund:    Printing if proxy required by Law    Fund or Distributor   Fund or Distributor
     Distribution to Contract Owners (including labor, if required) if proxy required by Law    GWL&A   Fund or Distributor
     Printing & distribution if required by GWL&A    GWL&A   GWL&A
Mutual Fund Annual & Semi-Annual Report    Printing of combined reports    GWL&A   Fund or Distributor
     Distribution    GWL&A   GWL&A
Other communication to New and Prospective clients    If Required by the Fund or Adviser    GWL&A   Fund or Distributor

 

Page 21 of 22

    If Required by GWL&A   GWL&A   GWL&A
Other communication to Inforce Clients   Distribution (including labor and printing) if required by the Fund or Adviser   GWL&A   Fund or Distributor
    Distribution (including labor and printing) if required by GWL&A   GWL&A   GWL&A
Operations of the Fund  

All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by the fund pursuant to any Rule 12b-l plan

 

   Fund or Distributor   Fund or Distributor

 

Page 22 of 22

EX-99.(H)(68) 32 d694125dex99h68.htm EX-99.(H)(68) EX-99.(H)(68)

THIRD AMENDMENT TO AMENDED AND RESTATED PARTICIPATION AGREEMENT

THIS THIRD AMENDMENT TO AMENDED AND RESTATED PARTICIPATION AGREEMENT is effective this 1st day of October, 2009, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“Company”), FIDELITY DISTRIBUTORS CORPORATION (the “Underwriter”), and VARIABLE INSURANCE PRODUCTS I, VARIABLE INSURANCE PRODUCTS II, VARIABLE INSURANCE PRODUCTS III, VARIABLE INSURANCE PRODUCTS IV and VARIABLE INSURANCE PRODUCTS FUND V (the “Funds”), collectively the Parties. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Original Agreement (defined below).

RECITALS

WHEREAS, the Company, the Underwriter and the Funds are parties to the Amended and Restated Participation Agreement dated October 26, 2006, the Amendment and Assignment dated May 16, 2007, and the Second Amendment dated August 29, 2007 (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to add additional separate Accounts to Schedule A of the Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

 

1.

All references to the “Account” now include the Varifund Variable Annuity Account and the Prestige Variable Life Account.

 

 

2.

Schedule A of the Agreement is hereby deleted in its entirety and replaced with the attached Schedule A.

[signature page follows]

 

1

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 1st day of October, 2009.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

By its authorized officer,

 

        

  

By:

  

/s/ Susan Gile

 

Name:

  

Susan Gile

 

Title:

  

V.P. Individual Markets

 

Date:

  

9.23.09

VARIABLE INSURANCE PRODUCTS I,

VARIABLE INSURANCE PRODUCTS II

VARIABLE INSURANCE PRODUCTS FUND III

VARIABLE INSURANCE PRODUCTS IV and

VARIABLE INSURANCE PRODUCTS FUND V

By its authorized officer,

 

        

  

By:

  

/s/ Bryan Mehrmann

 

Name:

  

Bryan Mehrmann

 

Title:

  

Deputy Treasurer

 

Date:

  

10/7/09

FIDELITY DISTRIBUTORS CORPORATION

By its authorized officer,

 

        

  

By:

  

/s/ Thomas J Corra

 

Name:

  

Thomas J Corra

 

Title:

  

CAO

 

Date:

  

9/30/2009

 

2

SCHEDULE A

 

Separate Account Name    Contract Form No.

COLI VUL-1 Series Account

    J350, PPVUL

COLI VUL-2 Series Account

    J355

COLI VUL-3 Series Account

    J350, PPVUL

COLI VUL-4 Series Account

    J500

COLI VUL-5 Series Account

    J350, PPVUL

COLI VUL-6 Series Account

    J350, PPVUL

COLI VUL-7 Series Account

    J350, PPVUL

COLI VUL-8 Series Account

    J350, PPVUL

COLI VUL-9 Series Account

    J350, PPVUL

COLI VUL-10 Series Account

    J350, PPVUL

COLI VUL-11 Series Account

    J350, PPVUL

COLI VUL-12 Series Account

    J350, PPVUL

COLI VUL-13 Series Account

    J350, PPVUL

COLI VUL-14 Series Account

    J350, PPVUL

COLI VUL-15 Series Account

    J350, PPVUL

Varifund Variable Annuity Account

    V30000, VA40000, VPP50000

Prestige Variable Life Account

    CL 1035-99

 

3

EX-99.(H)(69) 33 d694125dex99h69.htm EX-99.(H)(69) EX-99.(H)(69)

FOURTH AMENDMENT TO AMENDED AND RESTATED PARTICIPATION

AGREEMENT

THIS FOURTH AMENDMENT TO AMENDED AND RESTATED PARTICIPATION AGREEMENT is effective this 1st day of Sept 2013, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“Company”), FIDELITY DISTRIBUTORS CORPORATION (the “Underwriter”), and VARIABLE INSURANCE PRODUCTS I, VARIABLE INSURANCE PRODUCTS II, VARIABLE INSURANCE PRODUCTS III, VARIABLE INSURANCE PRODUCTS IV and VARIABLE INSURANCE PRODUCTS FUND V (the “Funds”), collectively the “Parties.” Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Original Agreement (defined below).

RECITALS

WHEREAS, the Company, the Underwriter and the Funds are parties to the Amended and Restated Participation Agreement dated October 26, 2006, the Amendment and Assignment dated May 16, 2007, the Second Amendment dated August 29, 2007 and the Third Amendment dated October 1, 2009 (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to add revise Schedule A of the Agreement to reflect the correct contract form numbers for the COLI VUL-14 Series Account.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

  1.

Schedule A of the Agreement is hereby deleted in its entirety and replaced with the attached Schedule A.

[signature page follows]

 

1

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 1st day of September, 2013.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

        

  

By its authorized officer,

 

By:

  

/s/ Ron Laeyendecker

 

Name:

  

Ron Laeyendecker

 

Title:

  

Senior Vice-President

 

Date:

  

8/5/13

VARIABLE INSURANCE PRODUCTS I,

VARIABLE INSURANCE PRODUCTS II

VARIABLE INSURANCE PRODUCTS FUND III

VARIABLE INSURANCE PRODUCTS IV and

VARIABLE INSURANCE PRODUCTS FUND V

 

 

By its authorized officer,

 

By:

  

 

        

  

Name:

  
 

Title:

  
 

Date:

  

FIDELITY DISTRIBUTORS CORPORATION

 

        

  

By its authorized officer,

 

By:

  

/s/ Robert Bachman

 

Name:

  

Robert Bachman

 

Title:

  

EVP

 

Date:

  

08/19/13

 

2

SCHEDULE A

 

Separate Account Name    Contract Form No.

COLI VUL-1 Series Account

   

J350, PPVUL

COLI VUL-2 Series Account

   

J355

COLI VUL-3 Series Account

   

J350, PPVUL

COLI VUL-4 Series Account

   

J500

COLI VUL-5 Series Account

   

J350, PPVUL

COLI VUL-6 Series Account

   

J350, PPVUL

COLI VUL-7 Series Account

   

J350, PPVUL

COLI VUL-8 Series Account

   

J350, PPVUL

COLI VUL-9 Series Account

   

J350, PPVUL

COLI VUL-10 Series Account

   

J350, PPVUL

COLI VUL-11 Series Account

   

J350, PPVUL

COLI VUL-12 Series Account

   

J350, PPVUL

COLI VUL-13 Series Account

   

J350, PPVUL

COLI VUL-14 Series Account

   

ICC13-J600, J600

COLI VUL-15 Series Account

   

J350, PPVUL

Varifund Variable Annuity Account

   

V30000, VA40000, VPP50000

Prestige Variable Life Account

   

CL 1035-99

 

3

EX-99.(H)(70) 34 d694125dex99h70.htm EX-99.(H)(70) EX-99.(H)(70)

FIFTH AMENDMENT TO AMENDED AND RESTATED PARTICIPATION

AGREEMENT

THIS FIFTH AMENDMENT TO AMENDED AND RESTATED PARTICIPATION AGREEMENT is effective this 28th day of April, 2017, by and among Great-West Life & Annuity Insurance Company (“Company”), Fidelity Distributors Corporation (the “Underwriter”), and Variable Insurance Products I, Variable Insurance Products II, Variable Insurance Products III, Variable Insurance Products IV and Variable Insurance Products Fund V (the “Funds”), collectively the “Parties.” Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement (as defined below).

RECITALS

WHEREAS, the Company, the Underwriter and the Funds are parties to the Amended and Restated Participation Agreement dated October 26, 2006, the Amendment and Assignment dated May 16, 2007, the Second Amendment dated August 29, 2007, the Third Amendment dated October 1, 2009, and the Fourth Amendment dated September 1, 2013 (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to revise Schedule A of the Agreement to reflect the current contract forms covered by the Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

Schedule A of the Agreement is hereby deleted in its entirety and replaced with the attached Schedule A.

All other terms, covenants and conditions of the Agreement remain in full force and effect.

Signature page to Follow

 

1

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 28th day of April, 2017.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By:

  

/s/ William S Harmon

Name:

  

William S Harmon

Title:

  

Senior Vice President

VARIABLE INSURANCE PRODUCTS I,

VARIABLE INSURANCE PRODUCTS II

VARIABLE INSURANCE PRODUCTS FUND III

VARIABLE INSURANCE PRODUCTS IV and

VARIABLE INSURANCE PRODUCTS FUND V

 

By:

  

/s/ Colm Hogan

Name:

  

Colm Hogan

Title:

  

VP Deputy Treasurer

FIDELITY DISTRIBUTORS CORPORATION

By:

  

/s/ Robert Bachman

Name:

  

Robert Bachman

Title:

  

EVP

 

2

SCHEDULE A

 

Separate Account Name    Contract Form No.

COLI VUL-1 Series Account

   

J350, PPVUL

COLI VUL-2 Series Account

   

J500

COLI VUL-3 Series Account

   

J350, PPVUL

COLI VUL-4 Series Account

   

J500

COLI VUL-5 Series Account

   

J350, PPVUL

COLI VUL-6 Series Account

   

J350, PPVUL

COLI VUL-7 Series Account

   

J350, PPVUL

COLI VUL-8 Series Account

   

J350, PPVUL

COLI VUL-9 Series Account

   

J350, PPVUL

COLI VUL-10 Series Account

   

J350, PPVUL

COLI VUL-11 Series Account

   

J350, PPVUL

COLI VUL-12 Series Account

   

J350, PPVUL

COLI VUL-13 Series Account

   

J350, PPVUL

COLI VUL-14 Series Account

   

ICC13-J600, J600

COLI VUL-15 Series Account

   

J350, PPVUL

Varifund Variable Annuity Account

   

V30000, VA40000, VPP50000

Prestige Variable Life Account

   

CL 1035-99

Variable Annuity-1 Series Account

   

J444; ICC14-J465; ICC14-J466

Variable Annuity-2 Series Account

   

ICC11-J555; ICC13-J777; ICC15-J888;

  

ICC16-J100

 

3

EX-99.(H)(72) 35 d694125dex99h72.htm EX-99.(H)(72) EX-99.(H)(72)

FIRST AMENDMENT TO PARTICIPATION AGREEMENT

THIS FIRST AMENDMENT TO PARTICIPATION AGREEMENT, made and entered into this 22 day of July, 2013 by and between GOLDMAN SACHS VARIABLE INSURANCE TRUST, statutory trust formed under the laws of Delaware (the “Trust”), GOLDMAN, SACHS & CO., a New York limited partnership (the “Distributor”), and GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY, a Colorado life insurance company (“GWLA”), and GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK, a New York life insurance company (“GWLA-NY), (GWLA and GWLA-NY are collectively referred to as the “Company”), on its own behalf and on behalf of each separate account of the Company identified herein, collectively the Parties.

WHEREAS, the Company, the Trust and the Distributor are parties to a Participation Agreement dated April 19, 2013 (the “Agreement”); and

WHEREAS, the Parties desire to add several separate Accounts; and

WHEREAS, the Parties desire and agree to amend the Agreement by adding Schedule 3 to the Agreement as provided in the attachment hereto.

NOW, THEREFORE, in consideration of their mutual promises, the Trust, the Distributor and the Company agree as follows:

1.    All references to Schedule 3 Accounts now refer to those Accounts listed on Schedule 3A.

2.    All references to Schedule 3 Contracts now refer to those Contracts listed on Schedule 3B.

3.    Section 2.3(a) of the Agreement is deleted in its entirety and replaced with the following:

(a) The Trust hereby appoints the Company as an agent for the limited purpose of receiving purchase and redemption requests for Trust Shares by Owners of Contracts to the extent such Owners make such requests indirectly through their purchase and redemption requests for units of the . As a limited agent for the Trust, receipt of requests for the purchase and redemption of units of the Accounts on any Business Day by the Company prior to the Trust’s close of business, as disclosed from time to time in the applicable Prospectus for such Series or Class (which as of the date of execution of this Agreement is the close of regular trading on the New York Stock Exchange), shall constitute receipt by the Trust on that Business Day of requests from such Accounts for the purchase and redemption of Trust Shares necessary to facilitate such purchase and redemption of units of such Accounts. This limited agency only extends to requests by the Accounts for the purchase and redemption of

Trust Shares that the Trust (or its transfer agent) receives by 9:00 a.m. New York Time on the next following Business Day. Such requests for the purchase and redemption of Trust Shares may be communicated by facsimile, electronic mail, or telephone to the office or person designated by the Trust and shall be confirmed by facsimile or electronic mail.

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and behalf by its duly authorized officer on the date specified below.

 

    GOLDMAN SACHS VARIABLE INSURANCE TRUST
              (Trust)  
Date:  7/22/13     By:   /s/ Greg Wilson  
          Name: Greg Wilson  
          Title:   Managing Director  
    GOLDMAN, SACHS & CO.  
                (Distributor)  
Date:  7/22/13     By:   /s/ Greg Wilson  
          Name: Greg Wilson  
          Title:   Managing Director  
    GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
                   (Company)  
Date:  8/5/13     By:   /s/ Ron Laeyendecker  
          Name: Ron Laeyendecker  
          Title:   Senior Vice-President  
    GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK
                   (Company)  
Date:  8.5.13     By:   /s/ Susan Gile  
          Name: Susan Gile  
          Title:   V. P., Individual Markets  

 

2

SCHEDULE 3

Schedule 3A

Separate Accounts of the Company Excluded From the Definition of an Investment

Company as Provided for by Section 3(c)(1) or 3(c)(7) of the 1940 Act

  The following separate accounts of the Company are subject to the Agreement:

Name of Account   

Date Established by

Board of Directors of

the Company

       

Type of Product

Supported by Account

 

COLI VUL 7 Series

Account of GWLA

   

11/23/1999

        Variable Life Insurance

COLI VUL 1 Series

Account of GWLA

NY

    2/14/2006        Variable Life Insurance

COLI VUL 14 Series

Account of GWLA

    1/30/2001        Variable Life Insurance

Schedule 3B

Variable Annuity Contracts and Variable Life Insurance Contracts Not Registered Under

the Securities Act of 1933 in Reliance Upon Section 4(2) of the Act and Regulation D

Thereunder

  The following Contracts are subject to the Agreement:

                

Name of Contract

   

Available Funds/Share        

Classes        

      Group or Individual     

Type of Product

Supported by Account

                
PPVUL   

All Series of

Goldman Sachs

Variable Insurance

Trust (Service and

Institutional Shares)

    Individual    Variable Life Insurance
                
                
PPVULrev2 - NY   

All Series of

Goldman Sachs

Variable Insurance

Trust (Service and

Institutional Shares)

    Individual    Variable Life Insurance
ICC13-J600/J600   

All Series of

Goldman Sachs

Variable Insurance

Trust (Service and

Institutional Shares)

    Individual    Variable Life Insurance

 

3

EX-99.(H)(73) 36 d694125dex99h73.htm EX-99.(H)(73) EX-99.(H)(73)

AGREEMENT

AGREEMENT effective as of November 1, 1999, by and between the Great-West Life & Annuity Insurance Company (the “Insurance Company”), a Colorado corporation, on its behalf and on behalf of the separate accounts listed on Schedule A attached hereto (the “Accounts”), and Maxim Series Fund, Inc. (the “Fund”).

WITNESSETH:

WHEREAS, the Accounts are separate accounts registered under the Investment Company Act of 1940 (the “1940 Act”) and established and maintained by the Insurance Company pursuant to the laws of the State of Colorado for variable life contracts issued by the Insurance Company;

WHEREAS, the Insurance Company has certain registered variable life contracts supported wholly or partially by the Accounts (the “Contracts”);

WHEREAS, the Fund is registered as an open-end management company organized as a series fund under the 1940 Act;

WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Insurance Company intends to purchase shares in the portfolios of the Fund and, in its discretion, in any other portfolios that may be established, on behalf of the Accounts to fund variable life contracts;

NOW, THEREFORE, in consideration of the mutual promises made herein, the Insurance Company and the Fund hereby agree as follows:

1.    The Fund represents and warrants that its shares sold pursuant to this Agreement shall be registered under the Securities Act of 1933 (the “1933 Act”), duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the Securities Exchange Act of 1934 (the “1934 Act”), and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares.

2.    The Fund agrees that it will sell to the Accounts those shares of the Fund which the Accounts order, executing such orders on a daily basis at the net asset value next computed after receipt of the order for the shares of the Fund.

3.    The Fund agrees that it will redeem for cash, on the Accounts’ request, any full or fractional shares of the Fund held by the Account, executing such requests on a daily basis at the net asset value next computed after receipt of the request for redemption of shares of the Fund.

4.    All purchases and redemptions of shares of the Fund by the Insurance Company for the Account shall be at net asset value and no commission, dealer spread or other fee shall be payable to the Fund or any broker/dealer.

5.    A purchase of Fund shares shall be settled within 7 days after the transaction is effected.

6.    A redemption of Fund shares shall be settled within 7 days after the transaction is effected.

7.    The Fund shall provide the Insurance Company with copies of the Fund’s prospectus(es), statement of additional information (the “SAI”), proxy material, reports to stockholders and other

 

1

communications to stockholders for its portfolio(s) as the Insurance Company may require to permit timely distribution thereof to Contract owners, if required by law.

8.    The Fund represents and warrants that the Fund is currently qualified as a Regulated Investment Company under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), and that each of its portfolios will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect. The Fund further represents and warrants that each portfolio thereof currently complies with the diversification requirements pursuant to Section 817(h) of the Code and Section 1.817-5(b) of the Federal Tax Regulations, if required, and that such portfolios will make every effort to maintain compliance with such diversification requirements, unless they are otherwise exempt from Section 817(h) and/or except as otherwise disclosed in each portfolio’s prospectus. The Fund will notify the Insurance Company promptly upon having a reasonable basis for believing that the portfolios have ceased to so qualify, or that they might not so qualify in the future.

9.    The Insurance Company shall not give any information or make any representations or statements on behalf of the Fund in connection with the sale of the Contracts other than the information or representations contained in the registration statement, prospectus or SAI for the Fund shares, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by the Fund, except with the permission of the Fund.

10.    The Fund shall not give any information or make any representation on behalf of the Insurance Company or concerning the Insurance Company, the Accounts or the Contracts other than the information or representations contained in such Contracts, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by the Insurance Company or its designee, except with the permission of the Insurance Company.

11.    This Agreement shall remain in effect until terminated by the mutual written consent of the parties hereto.

12.    This Agreement shall be subject to the provisions of the 1940 Act, the 1933 Act and the 1934 Act and the rules and regulations, and rulings thereunder, including such exemptions from those statutes, rules and regulations as the Securities and Exchange Commission may grant, and the terms hereof shall be interpreted and construed in accordance therewith.

13.    If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as follows.

 

 

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY  

By:

   Robert K. Shaw

 

Attest:

 

 

 

2

MAXIM SERIES FUND INC.

By:

    

 

Attest:

 

 

 

3

SCHEDULE A

Accounts

COLI VUL – 2 Series Account

 

4

EX-99.(H)(75) 37 d694125dex99h75.htm EX-99.(H)(75) EX-99.(H)(75)

SECOND AMENDMENT TO PARTICIPATION AGREEMENT

THIS SECOND AMENDMENT TO PARTICIPATION AGREEMENT is made as of this 23rd day of March, 2008, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”) and Maxim Series Fund (the “Fund”), collectively the Parties, and FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“First GWL&A”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the original Agreement (defined below).

RECITALS

WHEREAS, GWL&A, the Fund, and the Adviser are parties to a Fund Participation Agreement dated November 1, 1999, and amended November 1, 2007, (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to add the following additional separate Accounts: COLI VUL Series Account 1 (First GWL&A) and COLI VUL Series Account 7 (GWL&A); and

WHEREAS, The Parties desire and agree to amend the Agreement by deleting in its entirety Schedule A of the Agreement and replacing it with the Schedule A attached hereto.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

  1.

All references to the “Account” now include the COLI VUL Series Account 7 (GWL&A).

 

  2.

All references to the “First GWL&A Account” include the COLI VUL Series Account 1 (First GWL&A).

 

  3.

Schedule A of the Agreement is hereby replaced in its entirety with Schedule A as attached and incorporated by reference to this Amendment.

 

  4.

GWL&A and First GWL&A agree that it has registered or will register certain variable life insurance and variable annuity contracts under the Securities Act of 1933 and the Investment Company Act of 1940, unless such contracts are exempt from registration thereunder.

[Intentionally Left Blank]

 

1

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 23rd day of March, 2008.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By its authorized officer,

By:   /s/ Ron Laeyendecker
Name:   Ron Laeyendecker
Title:   Senior Vice-President
Date:   11/5/08

FIRST GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By its authorized officer,
By:   /s/ Bob Shaw
Name:   Bob Shaw
Title:   Senior Vice President
Date:   11/5/08

MAXIM SERIES FUND

 

By its authorized officer,
By:   /s/ Mary Maiers
Name:   Mary Maiers
Title:   Treasurer
Date:  

 

2

SCHEDULE A

Accounts

COLI VUL – 1 (First GWL&A)

COLI VUL – 2 (First GWL&A)

COLI VUL – 2 (GWL&A)

COLI VUL – 4 (GWL&A)

COLI VUL – 4 (First GWL&A)

COLI VUL – 7 (GWL&A)

 

3

EX-99.(H)(76) 38 d694125dex99h76.htm EX-99.(H)(76) EX-99.(H)(76)

AMENDMENT TO AGREEMENT

THIS AMENDMENT TO AGREEMENT (this “Amendment”) effective this 2nd day of August, 2013, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY, GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK, formerly known as FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (collectively the “Insurance Company”), and GREAT-WEST FUNDS, INC., formerly known as MAXIM SERIES FUND, INC. (the “Fund”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement (defined below).

RECITALS

WHEREAS, the Insurance Company and the Fund are parties to an Agreement dated November 1, 1999, as amended (the “Agreement”), which permits the Insurance Company to purchase shares of the series of the Fund on behalf of the Accounts to fund certain variable life contracts; and

WHEREAS, the Insurance Company and the Fund desire to add additional variable life separate accounts of the Insurance Company to the Agreement; and

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Insurance Company and the Fund hereby amend the Agreement as follows:

 

  1.

All references to the “Contracts” now include both registered variable life and variable annuity contracts supported by the Accounts.

 

  2.

All references to the “Account” now include the COLI VUL-10 Series Account, COLI VUL-13 Series Account and the COLI VUL-14 Series Account of Great-West Life & Annuity Insurance Company.

 

  3.

Schedule A is hereby deleted in its entirety and replaced with Schedule A attached hereto.

 

  4.

In the event of a conflict between the terms of this Amendment and the Agreement, the terms of this Amendment shall control.

 

  5.

This Amendment may be executed in two or more counterparts, each of which shall be an original and all of which together shall constitute one instrument.

 

  6.

Except as amended by this Amendment, all other provisions of the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Amendment this 2nd day of August, 2013.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

By:       /s/ Ron Laeyendecker                              

Title:    Senior Vice President                         

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK

By:       /s/ Susan Gile                                           

Title:    V. P., Individual Markets                    

GREAT-WEST FUNDS, INC.

By:       /s/ Mary Maiers                                        

Title:    Treasurer                                              

SCHEDULE A

Accounts

COLI VUL-1 (Great-West Life & Annuity Insurance Company of New York (“GWLA-NY”))

COLI VUL-2 Series Account (GWL&A)

COLI VUL-2 Series Account (GWL&A-NY)

COLI VUL-3 Series Account (GWL&A-NY)

COLI VUL-4 Series Account (GWL&A)

COLI VUL-4 Series Account (GWL&A-NY)

COLI VUL-7 (GWL&A)

COLI VUL-10 (GWL&A)

COLI VUL-13 (GWL&A)

COLI VUL-14 (GWL&A)

Variable Annuity-2 Series Account (GWL&A)

Trillium Variable Annuity Account (GWL&A)

Prestige Variable Life Account (GWL&A)

EX-99.(H)(77) 39 d694125dex99h77.htm EX-99.(H)(77) EX-99.(H)(77)

FUND PARTICIPATION AGREEMENT

Among

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY,

FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY,

MAXIM SERIES FUND, INC.

GW CAPITAL MANAGEMENT, LLC,

and

GWFS EQUITIES, INC.

THIS AGREEMENT (this “Agreement”) effective this 15th day of December, 2011 by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter “GWL&A”), a Colorado life insurance company, on its own behalf and on behalf of its separate accounts identified on Schedule A attached hereto and incorporated herein be reference, FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter “FGWL&A”), a New York life insurance company, on its own behalf and on behalf of its separate accounts identified on Schedule A, Maxim Series Fund, Inc., a corporation organized under the laws of Maryland (hereinafter the “Fund”), GW Capital Management, LLC, doing business as Maxim Capital Management, LLC (hereinafter the “Adviser”), a limited liability company organized under the laws of Colorado, and GWFS Equities, Inc., a corporation organized under the laws of Delaware (hereinafter the “Distributor”). GWL&A and FGWL&A are collectively referred to herein as “Insurer” and the separate accounts identified on Schedule A are collectively referred to herein as the “Account.”

WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the “Variable Insurance Products”) to be offered by insurance companies, including Insurer, which have entered into participation agreements similar to this Agreement (hereinafter “Participating Insurance Companies”); and

WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a “Portfolio” and representing the interest in a particular managed portfolio of securities and other assets; and

 

1

WHEREAS, the Fund has obtained an order from the Securities and Exchange Commission (hereinafter the “SEC”), granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the “1940 Act”) and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance separate accounts of life insurance companies that may or may not be affiliated with one another and qualified pension and retirement plans (“Qualified Plans”) (hereinafter the “Mixed and Shared Funding Exemptive Order”); and

WHEREAS, the Fund is registered as an open-end management investment company under the Investment Company Act of 1940 Act (the “1940 Act”) and shares of the Portfolio(s) are registered under the Securities Act of 1933, as amended (hereinafter the “1933 Act”); and

WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and

WHEREAS, the Distributor is duly registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, (the “1934 Act”) and is a member in good standing of the Financial Industry Regulatory Authority, Inc. (“FINRA”); and

WHEREAS, Insurer has registered certain variable life contracts supported wholly or partially by the Account (the “Contracts”) to be made available to owners thereof, including any participants or employees of such owners as applicable (“Contract Owners”); and

WHEREAS, the Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of Insurer, under the insurance laws of the State of Colorado and New York, as applicable, to set aside and invest assets attributable to the Contracts; and

WHEREAS, Insurer has registered the Account as a unit investment trust under the 1940 Act and has registered the securities deemed to be issued by the Account under the 1933 Act; and

WHEREAS, to the extent permitted by applicable insurance laws and regulations, Insurer intends to purchase shares in the Portfolio(s) listed in Schedule A, as such Schedule may be amended from time to time by mutual written agreement (the “Designated Portfolio(s)”), on behalf of the Account to fund the Contracts, and the Fund is authorized to sell such shares to unit investment trusts such as the Account at net asset value; and

 

2

WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Account also intends to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the “Unaffiliated Funds”) on behalf of the Account to fund the Contracts; and

WHEREAS, Insurer intends to utilize the Distributor to transmit instructions for the purchase, redemption and transfer of Fund shares on behalf of the Account, and the Distributor, alone, or with the assistance of a recordkeeping affiliate, to perform certain recordkeeping functions associated with the transfer of Fund shares into and out of the Account in order to recognize certain organizational economies; and

NOW, THEREFORE, in consideration of their mutual promises, Insurer, the Fund, the Distributor and the Adviser agree as follows:

ARTICLE I.                Sale of Fund Shares

1.1         The Fund agrees that shares of the Designated Portfolios will be sold only to Participating Insurance Companies and their separate accounts and to certain qualified pension and retirement plans. No shares of any Designated Portfolio will be sold to the general public. The Fund will not sell shares of the Designated Portfolio(s) to any other Participating Insurance Company separate account unless an agreement containing provisions substantially similar to Sections 2.4, 2.10, 3.5, 3.6, 5.1, and Article VII of this Agreement is in effect to govern such sales.

1.3.         If an adjustment is necessary to correct an error which has caused Contract Owners to receive less than the amount to which they are entitled, the number of shares of the applicable sub-account of such Contract Owners will be adjusted and the amount of any underpayments shall be credited by the Adviser to Insurer for crediting of such amounts to the applicable Contract Owners accounts. Upon notification by the Adviser of any overpayment due to an error, Insurer shall promptly remit to Adviser any overpayment that has not been paid to Contract Owners.

1.4         The Adviser shall promptly reimburse Insurer for any and all costs or expenses which Insurer incurs that are associated with any failure of the Fund to settle trades by the time specified on the Business Day following the Trade Date.

ARTICLE II.            Representations and Warranties

2.1.         Insurer represents and warrants that the Contracts and the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act; that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with state

 

3

insurance suitability requirements. Insurer further represents that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset account under Colorado insurance law and New York insurance law, as applicable, and has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts and that it will maintain such registration for so long as any Contracts are outstanding as required by applicable law.

2.2.        The Fund represents and warrants that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares.

2.3.        The Fund reserves the right to adopt a plan pursuant to Rule 12b-1 under the 1940 Act and to impose an asset-based or other charge to finance distribution expenses as permitted by applicable law and regulation. In any event, the Fund and Adviser agree to comply with applicable provisions and SEC staff interpretations of the 1940 Act to assure that the investment advisory or management fees paid to the Adviser by the Fund are in accordance with the requirements of the 1940 Act. To the extent that the Fund decides to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its Board (the “Board”), a majority of whom are not interested persons of the Fund, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses.

2.4.        The Fund represents and warrants that it will make every effort to ensure that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with all applicable state insurance and other applicable laws to the extent required to perform this Agreement. The Fund further represents and warrants that it will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with applicable state securities and insurance laws. The Fund shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by applicable law. Insurer and the Fund will endeavor to mutually cooperate with respect to the implementation of any modifications necessitated by any change in applicable state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a “Law Change”), and to keep each other informed of any Law Change that becomes known to either party. In the event of a Law Change, the Fund agrees that, except in those circumstances where the Fund has advised Insurer that its Board of Directors has determined that implementation of a particular Law Change is not in the best interest of all of the Fund’s shareholders with an explanation regarding why such action is lawful, any action required by a Law Change will be taken.

 

4

2.5.        The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the State of Maryland and that it does and will comply in all material respects with the 1940 Act.

2.6.        The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of Colorado and any applicable state and federal securities laws.

2.7.        The Distributor represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of Delaware and any applicable state and federal securities laws.

2.8.        The Fund and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by one or more blanket fidelity bonds or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bonds shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company.

2.9.        The Fund will provide Insurer with as much advance notice as is reasonably practicable of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated Portfolio(s).

2.10.        Insurer represents and warrants, for purposes other than diversification under Section 817 of the Internal Revenue Code of 1986 as amended (the “Code”), that the Contracts are currently and at the time of issuance will be treated as life insurance contracts under applicable provisions of the Code, and that it will make every effort to maintain such treatment and that it will notify the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, Insurer represents and warrants that the Account is a “segregated asset account” and that interests in the Account are offered exclusively through the purchase of or transfer into a “variable contract” within the meaning of such terms under Section 817 of the Code and the regulations thereunder. Insurer will use every effort to continue to meet such definitional requirements, and it will notify the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. Insurer represents and warrants that it will not purchase Fund shares with

 

5

assets derived from tax-qualified retirement plans except, indirectly, through Contracts purchased in connection with such plans.

ARTICLE III.    Prospectuses and Proxy Statements; Voting

3.1.        It is understood and agreed that, except with respect to information regarding Insurer provided in writing by that party, Insurer is not responsible for the content of the prospectus or SAI for the Designated Portfolio(s). It is also understood and agreed that, except with respect to information regarding the Fund, the Distributor, the Adviser or the Designated Portfolio(s) provided in writing by the Fund, the Distributor or the Adviser, neither the Fund, the Distributor nor Adviser are responsible for the content of the prospectus or SAI for the Contracts.

3.2.        If and to the extent required by law Insurer shall:

  (i)

solicit voting instructions from Contract Owners;

  (ii)

vote the Designated Portfolio(s) shares held in the Account in accordance with instructions received from Contract Owners: and

  (iii)

vote Designated Portfolio shares held in the Account for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contract Owners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. Insurer reserves the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law.

3.3.        Insurer shall be responsible for assuring that each of its separate accounts holding shares of a Designated Portfolio calculates voting privileges as directed by the Fund and agreed to by Insurer and the Fund. The Fund agrees to promptly notify Insurer of any changes of interpretations or amendments of the Mixed and Shared Funding Exemptive Order.

3.4.        The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders, and in particular the Fund will either provide for annual meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not to require such meetings) or, as the Fund currently intends, comply with Section 16(c) of the 1940 Act (although the Fund is not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in accordance with the SEC’s interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the Commission may promulgate with respect thereto.

ARTICLE IV.     Sales Material and Information

 

6

4.1.        Insurer shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that Insurer develops or proposes to use and in which the Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers or the Distributor is named in connection with the Contracts, at least ten (10) business days prior to its use. No such material shall be used if the Fund objects to such use within five (5) business days after receipt of such material. Notwithstanding the foregoing, Insurer shall not be required to furnish to the Fund or its designee any sales literature or other promotional material which Insurer receives from the Fund or third party vendors and which is unaltered by Insurer.

4.2.        Insurer shall not give any information or make any representations or statements on behalf of the Fund in connection with the sale of the Contracts other than the information or representations contained in the registration statement, prospectus or SAI for the Fund shares, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by the Fund, Distributor or Adviser, except with the written permission of the Fund, Distributor or Adviser.

4.3.        The Fund or the Adviser shall furnish, or shall cause to be furnished, to Insurer, a copy of each piece of sales literature or other promotional material in which Insurer and/or its separate account(s), is named at least ten (10) business days prior to its use. No such material shall be used if Insurer objects to such use within five (5) business days after receipt of such material.

4.4.        The Fund, the Distributor and the Adviser shall not give any information or make any representations on behalf of Insurer or concerning Insurer, the Account, or the Contracts other than the information or representations contained in a registration statement, prospectus or SAI for the Contracts, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by Insurer or its desigee, except with the permission of Insurer.

4.5.        The Fund will provide to Insurer at least one complete copy of any registration statements, prospectuses, SAIs, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Designated Portfolio(s), contemporaneously with the filing of such document(s) with the SEC or FINRA or other regulatory authorities.

4.6.        Insurer will provide to the Fund at least one complete copy of any registration statements, prospectuses, SAIs, reports, solicitations for voting instructions, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Account, contemporaneously with the filing of such document(s) with the SEC, FINRA, or other regulatory authority.

 

7

4.7.    For purposes of Articles IV and VIII, the phrase “sales literature and other promotional material” includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as the Internet or other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and shareholder reports, and proxy materials (including solicitations for voting instructions) and any other material constituting sales literature or advertising under FINRA rules, the 1933 Act or the 1940 Act.

4.8.    At the request of any party to this Agreement, each other party will make available to the other party’s independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party’s obligations under this Agreement.

ARTICLE V.    Fees and Expenses

5.1.      Neither the Fund, the Distributor nor the Adviser shall pay any fee or other compensation to Insurer under this Agreement, other than pursuant to Schedule B attached hereto and incorporated by reference herein. In addition, the parties will bear certain expenses in accordance Articles III, V, and other provisions of this Agreement.

5.2.      All expenses incident to performance by the Fund, the Distributor and the Adviser under this Agreement shall be paid by the appropriate party. The Fund shall see to it that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent required, in accordance with applicable state laws prior to their sale.

5.3.      The Fund, the Distributor and the Adviser acknowledge that a principal feature of the Contracts is the Contract Owner’s ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract’s cash value between funds and portfolios. The Fund, the Distributor and the Adviser agree to cooperate with Insurer in facilitating the operation of the Account and the Contracts as described in the prospectus for the Contracts, including but not limited to cooperation in facilitating transfers between Unaffiliated Funds. The Fund does not allow market timing, short-term trading, or other excessive trading into and out of the Fund. Insurer agrees to cooperate with the Fund, the Adviser, and the Distributor to prevent Contract Owners from market timing the Fund,

 

8

and agrees to comply with the provisions of the Fund’s registration statement with respect to market timing, short-term trading, or other excessive trading.

ARTICLE VI.     Diversification and Qualification

6.1.    The Fund, the Distributor and the Adviser represent and warrant that the Fund will at all times sell its shares and invest its assets in such a manner as to ensure that the Contracts will be treated as life insurance contracts under the Code, and the regulations issued thereunder. Without limiting the scope of the foregoing, the Fund, Distributor and Adviser represent and warrant that the Fund and each Designated Portfolio thereof will at all times comply with Section 817(h) of the Code and Treasury Regulation §1.817-5, as amended from time to time, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Fund, the Distributor and the Adviser agree that shares of the Designated Portfolio(s) will be sold only to Participating Insurance Companies and their separate accounts and to qualified pension and retirement plans.

6.2.    No shares of any Designated Portfolio of the Fund will be sold to the general public.

6.3.    The Fund, the Distributor and the Adviser represent and warrant that the Fund and each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect.

6.4.    The Fund, Distributor or Adviser will notify Insurer immediately upon having a reasonable basis for believing that the Fund or any Designated Portfolio has ceased to comply with the aforesaid Section 817(h) diversification or Subchapter M qualification requirements or might not so comply in the future.

6.5.    Without in any way limiting the effect of Sections 8.2 and 8.3 hereof and without in any way limiting or restricting any other remedies available to Insurer, the Adviser or Distributor will pay all costs associated with or arising out of any failure, or any anticipated or reasonably foreseeable failure, of the Fund or any Designated Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to Insurer and any federal income taxes or tax penalties and interest thereon (or “toll charges” or exactments or amounts paid in settlement)

 

9

incurred by Insurer with respect to itself or owners of its Contracts in connection with any such failure or anticipated or reasonably foreseeable failure.

6.6.    The Fund at the Fund’s expense shall provide Insurer or its designee with reports certifying compliance with the aforesaid Section 817(h) diversification and Subchapter M qualification requirements, upon the reasonable request of the Insurer; provided, however, that providing such reports does not relieve the Fund of its responsibility for such compliance or of its liability for any non-compliance.

6.7.    Insurer agrees that if the Internal Revenue Service (“IRS”) asserts in writing in connection with any governmental audit or review of Insurer or, to Insurer’s knowledge, or any Contract Owner that any Designated Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or Insurer otherwise becomes aware of any facts that could give rise to any claim against the Fund, Distributor or Adviser as a result of such a failure or alleged failure:

(a)  Insurer shall promptly notify the Fund, the Distributor and the Adviser of such assertion or potential claim;

(b)  Insurer shall consult with the Fund, the Distributor and the Adviser as to how to minimize any liability that may arise as a result of such failure or alleged failure;

(c)  Insurer shall use its best efforts to minimize any liability of the Fund, the Distributor and the Adviser resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent;

(d)  any written materials to be submitted by Insurer to the IRS, any Contract Owner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by Insurer to the Fund, the Distributor and the Adviser (together with any supporting information or analysis) within at least two (2) business days prior to submission;

(e)  Insurer shall provide the Fund, the Distributor and the Adviser with such cooperation as the Fund, the Distributor and the Adviser shall reasonably request (including, without limitation, by permitting the Fund, the Distributor and the Adviser to review the relevant books and records of Insurer) in order to facilitate review by the Fund, the Distributor and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure;

 

10

(f) Insurer shall not with respect to any claim of the IRS or any Contract Owner that would give rise to a claim against the Fund, the Distributor and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any allowable administrative or judicial appeals, without the express written consent of the Fund, the Distributor and the Adviser, which shall not be unreasonably withheld; provided that, Insurer shall not be required to appeal any adverse judicial decision unless the Fund and the Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Fund, the Distributor and the Adviser shall bear the costs and expenses, including reasonable attorney’s fees, incurred by Insurer in complying with this clause (f).

ARTICLE VII.                Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order

7.1.    The Board will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the contract owners of all separate accounts investing in the Fund. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of contract owners. The Board shall promptly inform Insurer if it determines that an irreconcilable material conflict exists and the implications thereof.

7.2.    Insurer will report any potential or existing conflicts of which it is aware to the Board. Insurer will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by Insurer to inform the Board whenever contract owner voting instructions are to be disregarded. Such responsibilities shall be carried out by Insurer with a view only to the interests of its Contract Owners.

7.3.    If it is determined by a majority of the Board, or a majority of its directors who are not interested persons of the Fund, the Distributor, the Adviser or any sub-adviser to any of the Designated Portfolios (the “Independent Directors”), that a material irreconcilable conflict exists, Insurer and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Directors), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any

 

11

Designated Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another portfolio of the Fund, or submitting the question whether such segregation should be implemented to a vote of all affected contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account.

7.4.    If a material irreconcilable conflict arises because of a decision by Insurer to disregard contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, Insurer may be required, at the Fund’s election, to withdraw the Account’s investment in the Fund and terminate this Agreement; provided, however that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six month period the Adviser, the Distributor and the Fund shall continue to accept and implement orders by Insurer for the purchase (and redemption) of shares of the Fund.

7.5.    If a material irreconcilable conflict arises because a particular state insurance regulator’s decision applicable to Insurer conflicts with the majority of other state regulators, then Insurer will withdraw the Account’s investment in the Fund and terminate this Agreement within six months after the Board informs Insurer in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. Until the end of the foregoing six month period, the Fund shall continue to accept and implement orders by Insurer for the purchase (and redemption) of shares of the Fund.

7.6.    For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the disinterested members of the Board shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. Insurer shall not be required by Section 7.3 to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contract owners affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then Insurer will withdraw the Account’s investment in the Fund and terminate this Agreement within six (6) months after the Board informs Insurer in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the

 

12

extent required by any such material irreconcilable conflict as determined by a majority of the Independent Directors.

7.7.      If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the extent that terms and conditions substantially identical to such Sections are contained in such Rule(s) as so amended or adopted.

ARTICLE VIII.    Indemnification

8.1.   Indemnification By Insurer

8.1(a). Insurer agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their respective officers and directors or trustees and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.1) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of Insurer) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages or liabilities (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund’s shares or the Contracts and:

 

  (i)

arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or prospectus or SAI covering the Contracts or contained in the Contracts or sales literature or other promotional material for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to Insurer by or on behalf of the Adviser, Distributor or Fund for use in the registration statement or prospectus for the Contracts or sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or Fund shares; or

 

13

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature or other promotional material of the Fund not supplied by Insurer or persons under its control) or wrongful conduct of Insurer or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or

 

  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature or other promotional material of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund by or on behalf of Insurer; or

 

  (iv)

arise as a result of any failure by Insurer to provide the services and furnish the materials under the terms of this Agreement; or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by Insurer in this Agreement or arise out of or result from any other material breach of this Agreement by Insurer, including without limitation Section 2.10 and Section 6.7 hereof,

as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof.

8.1(b).    Insurer shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties.

8.1(c).    Insurer shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified Insurer in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify Insurer of any such claim shall not relieve Insurer from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that Insurer has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, Insurer shall be

 

14

entitled to participate, at its own expense, in the defense of such action. Insurer also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from Insurer to such party of Insurer’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and Insurer will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

8.1(d).    The Indemnified Parties will promptly notify Insurer of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund.

8.2.    Indemnification by the Adviser

8.2(a). The Adviser agrees to indemnify and hold harmless Insurer and its directors and officers and each person, if any, who controls Insurer within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.2) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund’s shares or the Contracts and:

 

  (i)

arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, the Distributor or the Adviser (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Adviser, the Distributor or the Fund by or on behalf of Insurer for use in the registration statement, prospectus or SAI for the Fund or in sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or the Fund shares; or

 

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature or other promotional material for the Contracts not supplied by the Adviser

 

15

 

or persons under its control) or wrongful conduct of the Fund, the Distributor or the Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or

 

  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to Insurer by or on behalf of the Adviser, the Distributor or the Fund; or

 

  (iv)

arise as a result of any failure by the Fund, the Distributor or the Adviser to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by the Fund, the Distributor or the Adviser in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser, the Distributor or the Fund; or

 

  (vi)

arise out of or result from the incorrect or untimely calculation or reporting by the Fund, the Distributor or the Adviser of the daily net asset value per share or dividend or capital gain distribution rate;

as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI hereof.

8.2(b).    The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties.

8.2(c).    The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the

 

16

Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

8.2(d).    Insurer agrees to promptly notify the Adviser of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account.

8.3.       Indemnification by the Distributor

8.3(a).    The Distributor agrees to indemnify and hold harmless Insurer and its directors and officers and each person, if any, who controls Insurer within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.3) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of the Distributor) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund’s shares or the Contracts and:

 

  (i)

arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, Adviser or Distributor (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Adviser, the Distributor or Fund by or on behalf of Insurer for use in the registration statement or SAI or prospectus for the Fund or in sales literature or

 

17

other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or Fund shares; or

 

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI, sales literature or other promotional material for the Contracts not supplied by the Distributor or persons under its control) or wrongful conduct of the Fund, the Distributor or Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or

 

  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to Insurer by or on behalf of the Adviser, the Distributor or Fund; or

 

  (iv)

arise as a result of any failure by the Fund, Adviser or Distributor to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by the Fund, Adviser or Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund, Adviser or Distributor; or

 

  (vi)

arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate;

as limited by and in accordance with the provisions of Sections 8.3(b) and 8.3(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Distributor specified in Article VI hereof.

8.3(b).    The Distributor shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or

 

18

negligence in the performance or such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties.

8.3(c)    The Distributor shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Distributor in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Distributor of any such claim shall not relieve the Distributor from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Distributor has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Distributor will be entitled to participate, at its own expense, in the defense thereof. The Distributor also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Distributor to such party of the Distributor’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Distributor will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

8.3(d)    Insurer agrees to promptly notify the Distributor of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account.

ARTICLE IX.   Applicable Law

9.1.      This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of Colorado, without regard to the Colorado Conflict of Laws provisions.

9.2.      This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the SEC may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith.

ARTICLE X.    Termination

10.1.    This Agreement shall terminate:

 

19

(a) at the option of any party, with or without cause, with respect to some or all Designated Portfolios, upon six (6) months advance written notice delivered to the other parties; provided, however, that such notice shall not be given earlier than six (6) months following the date of this Agreement; or

(b) at the option of Insurer by written notice to the other parties with respect to any Designated Portfolio based upon Insurer’s determination that shares of such Designated Portfolio are not reasonably available to meet the requirements of the Contracts; or

(c) at the option of Insurer by written notice to the other parties with respect to any Designated Portfolio in the event any of the Designated Portfolio’s shares are not registered, issued or sold in accordance with applicable state and/or federal law or such law precludes the use of such shares as the underlying investment media of the Contracts issued or to be issued by Insurer; or

(d) at the option of the Fund, Distributor or Adviser in the event that formal administrative proceedings are instituted against Insurer by FINRA, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding Insurer’s duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares, if, in each case, the Fund, Distributor or Adviser, as the case may be, reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of Insurer to perform its obligations under this Agreement; or

(e) at the option of Insurer in the event that formal administrative proceedings are instituted against the Fund, the Distributor or the Adviser by FINRA, the SEC, or any state securities or insurance department or any other regulatory body, if Insurer reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of the Fund, the Distributor or the Adviser to perform their obligations under this Agreement; or

(f) at the option of Insurer by written notice to the Fund with respect to any Portfolio if Insurer reasonably believes that the Portfolio will fail to meet the Section 817(h) diversification requirements or Subchapter M qualifications specified in Article VI hereof; or

(g) at the option of either the Fund, the Distributor or the Adviser, if (i) the Fund, Distributor or Adviser, respectively, shall determine, in its sole judgment reasonably exercised in good faith, that Insurer has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on Insurer’s ability to perform its obligations under this Agreement, (ii) the Fund, Distributor or Adviser notifies Insurer of that determination and its intent to terminate

 

20

this Agreement, and (iii) after considering the actions taken by Insurer and any other changes in circumstances since the giving of such a notice, the determination of the Fund, Distributor or Adviser shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or

(h) at the option of either Insurer, if (i) Insurer shall determine, in its sole judgment reasonably exercised in good faith, that the Fund, Distributor or Adviser has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Fund’s, Distributor’s or Adviser’s ability to perform its obligations under this Agreement, (ii) Insurer notifies the Fund, Distributor or Adviser, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Fund, Distributor or Adviser and any other changes in circumstances since the giving of such a notice, the determination of Insurer shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or

(i) at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the “defaulting party”) other than as described in 10.1(a)-(j); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non-defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party.

10.2.    Notice Requirement No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore,

(a) in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties;

(b) in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e), 10.1(i) or 10.1(j) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and

(c) in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given in advance of the effective date of termination, which date shall be determined by the party sending the notice.

10.3.    Effect of Termination Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or Insurer to meet Section 817(h) of the Code diversification requirements, the Fund, the Distributor and the Adviser shall, at the option of Insurer, continue to

 

21

make available additional shares of the Designated Portfolio(s) pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as “Existing Contracts”). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolio(s), redeem investments in the Designated Portfolio(s) and/or invest in the Designated Portfolio(s) upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement.

10.4.    Surviving Provisions.    Notwithstanding any termination of this Agreement, each party’s obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement.

ARTICLE XI.    Notices

Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party.

If to the Fund:

Maxim Series Fund, Inc.

8515 E. Orchard Road

Greenwood Village, CO 80111

Attn: Beverly Byrne, Chief Legal Counsel and Chief Compliance Officer

If to Insurer:

GWL&A:

Great-West Life & Annuity Insurance Company

8515 East Orchard Road

Greenwood Village, CO 80111

Attention: Robert K. Shaw, Executive Vice President

cc: Beverly Byrne, Chief Compliance Officer, Chief Legal Counsel, Financial Services

FGWL&A:

First Great-West Life & Annuity Insurance Company

8515 East Orchard Road

Greenwood Village, CO 80111

 

22

Attention: Robert K. Shaw, Executive Vice President

cc: Beverly Byrne, Chief Compliance Officer, Chief Legal Counsel, Financial Services

If to the Adviser:

GW Capital Management, LLC

8515 East Orchard Road

Greenwood Village, CO 80111

Attn: Beverly Byrne, Chief Legal Counsel and Chief Compliance Officer

If to the Distributor:

GWFS Equities, Inc.

8515 East Orchard Road

Greenwood Village, CO 80111

Attn: Charles Nelson, President

CC: Beverly Byrne, Chief Legal Counsel and Chief Compliance Officer

ARTICLE XII. Miscellaneous

12.1.    The parties hereto acknowledge that any nonpublic personal information (as defined by applicable law or regulation promulgated under Title V of the Gramm-Leach-Bliley Act of 1999 (the “Act”)) of Contract Owners (and any participants thereof, as applicable) will be disclosed or utilized solely to carry out the terms of this Agreement or pursuant to an exception contained in any applicable law or regulation promulgated under the Act. Further, Fund, Distributor and Adviser agree to maintain and enforce procedures for the safeguarding and protection of such nonpublic personal information at least as rigorous as those required to be used by Insurer under applicable law. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary.

12.2.    The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect.

12.3.    This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument.

12.4.    If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby.

 

23

12.5.    Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, FINRA and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the Colorado or New York Insurance Commissioner, as applicable, with any information or reports in connection with services provided under this Agreement which such Commissioner may request in order to ascertain whether the variable life operations of Insurer are being conducted in a manner consistent with the applicable Colorado or New York insurance regulations, as applicable, and any other applicable law or regulations.

12.6.    Any controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be settled by arbitration in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

12.7.    The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws.

12.8.    This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto.

12.9.    Insurer agrees that the obligations assumed by the Fund, Distributor and the Adviser pursuant to this Agreement shall be limited in any case to the Fund, Distributor and Adviser and their respective assets and Insurer shall not seek satisfaction of any such obligation from the shareholders of the Fund, Distributor or the Adviser, the directors, officers, employees or agents of the Fund, Distributor or Adviser, or any of them.

12.10.    The Fund, the Distributor and the Adviser agree that the obligations assumed by Insurer pursuant to this Agreement shall be limited in any case to Insurer and its assets and neither the Fund, Distributor nor Adviser shall seek satisfaction of any such obligation from the shareholders of Insurer, the directors, officers, employees or agents of Insurer, or any of them, except to the extent permitted under this Agreement.

12.11.    No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Adviser and the Fund, and the Distributor and the Fund.

12.12.    None of the parties hereto shall be liable to the other for any and all losses,

 

24

damages, costs, charges, counsel fees, payments, expenses or liability due to any failure, delay or interruption in performing its obligations under this Agreement, and without the fault or negligence of such party, due to causes or conditions beyond its control including, without limitation, labor disputes, strikes (whether legal or illegal), lock outs (whether legal or illegal), civil commotion, riots, war and war-like operations including acts of terrorism, embargoes, epidemics, invasion, rebellion, hostilities, insurrections, explosions, floods, unusually severe weather conditions, earthquakes, military power, sabotage, governmental regulations or controls, failure of power, fire or other casualty, accidents, national or local emergencies, boycotts, picketing, slow-downs, work stoppages, acts of God or natural disasters.

[Remainder of page intentionally blank; signature page to follow.]

 

25

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by its duly authorized representative as specified below.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

By its authorized officer,

By:

   /s/ Christopher Bergeon

Title:    

  

VP

FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

By its authorized officer,

By:

  

/s/ Christopher Bergeon

Title:    

  

VP

 

26

  

MAXIM SERIES FUND, INC.

   
  

By its authorized officer,

   
  

By:

   

/s/ Ryan L Logsdon

   
  

Title:    

   

AVP, Counsel, & Secretary

   

 

  

GW CAPITAL MANAGEMENT, LLC

   
  

By its authorized officer,

   
  

By:

   

/s/ Ryan L Logsdon

   
  

Title:    

   

AVP, Counsel, & Secretary

   

 

  

GWFS EQUITIES, INC.

   
  

By its authorized officer,

   
  

By:

   

/s/ Teresa L. Luiz

   
  

Title:    

   

Compliance Officer

   

 

27

SCHEDULE A

Designated Portfolios

Any and all portfolios of the Fund available and open to new investors on or after the effective date of this Agreement which, pursuant to the terms of the Fund’s registration statement, are eligible to serve as underlying funds to the Separate Accounts listed below.

Separate Accounts

Great-West Life & Annuity Insurance Company

COLI VUL 2

COLI VUL 4

Pinnacle Series Account

Prestige Variable Life Account

First Great-West Life & Annuity Insurance Company

COLI VUL 2

COLI VUL 4

 

28

SCHEDULE B

Administrative Service Fee

For the services, Insurer or its affiliate shall receive a fee of 0.35% per annum of the average aggregate monthly net asset value of shares of the Designated Portfolio(s) held in the Account, payable by the Adviser directly to Insurer or its affiliate. Such fee shall be paid in arrears quarterly. Each quarter’s fee shall be determined based on assets in the Account at the end of each quarter and each quarterly fee will be independent of every other quarterly fee. Such fee shall be due and payable automatically within thirty (30) days after the last day of the quarter to which such payment relates.

The Fund will calculate the asset balance for each day on which the fee is to be paid pursuant to this Agreement with respect to each applicable Designated Portfolio of the Fund. Insurer shall have the right to reasonably audit the preparation of such calculation.

12b-1 Distribution Related Fees

The Adviser, or its designee, agrees to pay Insurer or its affiliate a fee 0.25% per annum of the average aggregate monthly net asset value of Class L shares of the Designated Portfolio(s) held in the Account. Such fee shall be paid in arrears, quarterly. Each quarter’s fee shall be determined based on assets in the Account at the end of each quarter and each quarterly fee will be independent of every other quarterly fee. Such fee shall be due and payable automatically within 30 (thirty) days after the last day of the quarter to which such payment relates.

The Fund will calculate the asset balance for each day on which the fee is to be paid pursuant to this Amendment with respect to each applicable portfolio of the Fund. Insurer shall have the right to reasonably audit the preparation of such calculation.

 

29

EX-99.(H)(84) 40 d694125dex99h84.htm EX-99.(H)(84) EX-99.(H)(84)

AMENDMENT TO FUND PARTICIPATION AGREEMENT

(Institutional Shares)

THIS AMENDMENT TO FUND PARTICIPATION AGREEMENT is made as of this 16th day of January, 2013, by and among Janus Aspen Series (the “Fund”), Janus Capital Management LLC, successor-in-interest to Janus Capital Corporation (the “Adviser”), and Great-West Life & Annuity Insurance Company (“GWL&A”) (collectively, the “Parties”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement (defined below).

RECITALS

WHEREAS, the Parties entered into to a Fund Participation Agreement dated June 1, 1998, as amended (the “Agreement”); and

WHEREAS, the Parties desire to add additional GWL&A separate accounts to the Agreement; and

WHEREAS, the Parties to the Agreement desire to amend the Agreement further as set forth below.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

 

1.

Schedule A is hereby deleted in its entirety and replaced with the Schedule A attached hereto.

 

 

2.

Schedule B is hereby deleted in its entirety and replaced with the Schedule B attached hereto.

 

 

3.

The following shall be added to the end of Article I:

“1.11 (a)     All orders accepted by GWL&A shall be subject to the terms of the then current prospectus of each Portfolio, including without limitation, policies regarding minimum account sizes, market timing and excessive trading. GWL&A shall use its commercially reasonable best efforts, and shall reasonably cooperate with, the Fund to enforce stated prospectus policies regarding transactions in Shares, particularly those related to market timing. GWL&A acknowledges that orders accepted by it in violation of the Fund’s stated policies may be subsequently revoked or cancelled by the Fund and that the Fund shall not be responsible for any losses incurred by GWL&A or Contract or Account as a result of such cancellation. The Fund or its agent shall notify GWL&A of such cancellation prior to 12:00 p.m. Eastern time on the next following Business Day after any such cancellation.

 

1

(b)     In addition, GWL&A acknowledges that the Fund has the right to refuse any purchase order for any reason, particularly if the Funds determines that a Portfolio would be unable to invest the money effectively in accordance with its investment policies or would otherwise be adversely affected due to the size of the transaction, frequency of trading by the account or other factors.

1.12.     GWL&A certifies that it is following all relevant rules and regulations, as well as internal policies and procedures, regarding “forward pricing” and the handling of mutual fund orders on a timely basis. As evidence of its compliance, GWL&A shall:

(a)     upon reasonable notice and during normal business hours, permit the Fund or its agent to audit its operations no more frequently than annually, as well as any books and records preserved in connection with its provision of services under this Agreement;

(b)     provide the Fund with the results of a Statement on Auditing Standards No. 70 (SAS 70) review or similar report of independent auditors as soon as practicable following execution of this Agreement; or

(c)     upon reasonable request from the Fund, provide annual certification to the Fund or its affiliate that it is following all relevant rules, regulations, and internal policies and procedures regarding “forward pricing” and the handling of mutual fund orders on a timely basis.”

 

 

4.

The following shall be added to the end of Article II:

“2.10     GWL&A is in compliance with all applicable anti-money laundering laws, rules and regulations including, but not limited to, the U.S.A. PATRIOT Act of 2001, P.L. 107-56. GWL&A further represents that it has policies and procedures in place to detect money laundering and terrorist financing, including the reporting of suspicious activity.

2.11     GWL&A is a “financial intermediary” as defined by Rule 22c-2 of the 1940 Act (the “Rule”), and has entered into an appropriate agreement with the Fund or one of its affiliates pursuant to the requirements of The Rule.”

 

 

5.

Article XI shall be revised as follows:

“If to the Fund:

Janus Aspen Series

151 Detroit Street

Denver, CO 80206

Attn: Chief Legal Counsel

 

2

If to GWL&A:

Great-West Life & Annuity Insurance Company

8515 E. Orchard Road

Greenwood Village, CO, 80111

Attn: Chief Legal Counsel

If to the Adviser:

Janus Capital Management LLC

151 Detroit Street

Denver, CO 80206

Attn: General Counsel”

 

 

6.

All other provisions of the Agreement shall remain in full force and effect.

 

 

7.

The Agreement, as supplemented by this Amendment, is ratified and confirmed.

 

 

8.

This Amendment may be executed in two or more counterparts which together shall constitute one instrument.

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first written above.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

       

  

By its authorized officer,

       

  

By:

  

/s/ Ron Laeyendecker

       

  

Name:

  

Ron Laeyendecker

       

  

Title:

  

Senior Vice-President

       

  

Date:

  

2/6/13

       

  

JANUS ASPEN SERIES

       

  

By its authorized officer,

       

  

By:

  

/s/ Stephanie Grauerholz

       

  

Name:

  

Stephanie Grauerholz

       

  

Title:

  

Vice President

       

  

Date:

  

 

3

       

   JANUS CAPITAL MANAGEMENT LLC

       

  

By its authorized officer,

       

  

By:

  

/s/ Russell P. Shipman

       

  

Name:

  

Russell P. Shipman

       

  

Title:

  

Senior Vice President

       

  

Date:

  

 

4

SCHEDULE A

Separate Accounts & Associated Contracts

 

Contract

   

Form Number

COLI VUL Series Account 2

   

J355

COLI VUL Series Account 4

   

J500

COLI VUL Series Account 7

   

J350, PPVUL

FutureFunds Series Account

   

Maxim Series Account

   

SCHEDULE B

List of Portfolios

Name of Portfolio

All Portfolios of Janus Aspen Series open to new investors (as set forth in the current prospectus of Janus Aspen Series) excluding Janus Aspen Protected Series Portfolios.

EX-99.(H)(85) 41 d694125dex99h85.htm EX-99.(H)(85) EX-99.(H)(85)

AMENDMENT TO FUND PARTICIPATION AGREEMENT

This Amendment to the Fund Participation Agreement (“Agreement”) dated June 1, 1998, as amended, between Janus Aspen Series, an open-end management investment company organized as a Delaware business trust (the “Trust”), Janus Capital Management LLC, successor-in-interest to Janus Capital Corporation (“Advisor”), a Delaware limited liability company, and Great West Life & Annuity Insurance Company, a Colorado life insurance company (“GWL&A”) is made as of this 11th day of September, 2013.

AMENDMENT

For good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree to amend the Agreement as follows:

1.      Schedule A of this Agreement shall be deleted and replaced with the attached Schedule A.

2.      Schedule B of this Agreement shall be deleted and replaced with the attached Schedule B.

3.      The following shall be added to the end of Article II:

“2.12   GWL&A represents and warrants that either it or the principal underwriter of any unregistered separate account holding Portfolio shares is a broker or dealer registered under the Securities Exchange Act of 1934 (the “1934 Act”) or is controlled (as defined in the 1940 Act) by a broker or dealer registered under the 1934 Act.

2.13   GWL&A will not hold any other investment security (as defined in Section 3 of the 1940 Act) in an unregistered separate account that holds shares of a Portfolio.

2.14   GWL&A will not substitute another security for shares of a Portfolio held in an unregistered separate account unless the Securities and Exchange Commission approves the substitution in the manner provided in Section 26 of the 1940 Act.”

4.      All other terms of the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have caused their duly authorized officers to execute this Amendment as of the date and year first above written.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY      JANUS ASPEN SERIES
By:  

/s/ Susan Gile

                   By:   

/s/ Stephanie Grauerholz

Name:   Susan Gile      Name:    Stephanie Grauerholz
Title:   VP, Individual Markets      Title:    Vice President
      

JANUS CAPITAL MANAGEMENT LLC

       By:   

/s/ Russell P. Shipman

       Name:    Russell P. Shipman
       Title:    Senior Vice President

 

Schedule A

Separate Accounts and Associated Contracts

 

Contract

   

Form Number

COLI VUL Series Account 2

   

J355

COLI VUL Series Account 4

   

J500

COLI VUL Series Account 7

   

J350, PPVUL

COLI VUL Series Account 14

   

ICC13-J600/J600

FutureFunds Series Account

   

Maxim Series Account

   

Schedule B

List of Portfolios

Name of Portfolio

All Portfolios of Janus Aspen Series open to new investors (as set forth in the current prospectus of Janus Aspen Series).

EX-99.(H)(86) 42 d694125dex99h86.htm EX-99.(H)(86) EX-99.(H)(86)

JANUS ASPEN SERIES

FUND PARTICIPATION AGREEMENT

(Institutional and Service Shares)

THIS AGREEMENT (the “Agreement”) is made this 1st day of December, 2015 (the “Effective Date”), between JANUS ASPEN SERIES, an open-end management investment company organized as a Delaware statutory trust (the “Trust”), Janus Distributors LLC, a Delaware limited liability company (the “Distributor”), and Great-West Life & Annuity Insurance Company, a life insurance company organized under the laws of the state of Colorado (“GWL&A”) and Great-West Life & Annuity Insurance Company of New York, a life insurance company organized under the laws of the state of New York (“GWLA&NY”) (collectively the “Company”), on its own behalf and on behalf of each segregated asset account of the Company set forth on Schedule A, as may be amended from time to time (the “Accounts”) (each a “Party” and collectively the “Parties”).

W I T N E S S E T H:

WHEREAS, the Trust has registered with the Securities and Exchange Commission (“SEC”) as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), and the beneficial interest in the Trust is divided into several series of shares, each series representing an interest in a particular managed portfolio of securities and other assets (the “Portfolios”); and

WHEREAS, the Trust has registered the offer and sale of classes of shares designated the Institutional and Service Shares (“Shares”) of each of its Portfolios under the Securities Act of 1933, as amended (the “1933 Act”); and

WHEREAS, the Trust desires to act as an investment vehicle for separate accounts established for variable life insurance policies and variable annuity contracts to be offered by insurance companies that have entered into participation agreements with the Trust (the “Participating Insurance Companies”); and

WHEREAS, the Trust has received an order from the Securities and Exchange Commission granting Participating Insurance Companies and their separate accounts exemptions from the provisions of Sections 9(a), 13(a), 15(a) and 15(b) of the 1940 Act, and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Trust to be sold to and held by variable annuity and variable life insurance separate accounts of both affiliated and unaffiliated life insurance companies and certain qualified pension and retirement plans (the “Exemptive Order”); and

WHEREAS, the Company has registered or will register (unless registration is not required under applicable law) certain variable life insurance policies and/or variable annuity contracts under the 1933 Act (the “Contracts”); and

 

-1-

WHEREAS, the Company has registered or will register each Account as a unit investment trust under the 1940 Act (unless registration is not required under applicable law); and

WHEREAS, the Company desires to utilize the Shares of one or more Portfolios as an investment vehicle of the Accounts;

NOW, THEREFORE, in consideration of their mutual promises, the Parties agree as follows:

ARTICLE I

Sale of Trust Shares

1.1    The Trust shall make Shares of its Portfolios listed on Schedule B available to the Accounts at the net asset value next computed after receipt of such purchase order by the Trust (or its agent), as established in accordance with the provisions of the then current prospectus of the Trust. Shares of a particular Portfolio of the Trust shall be ordered in such quantities and at such times as determined by the Company to be necessary to meet the requirements of the Contracts. The Trustees of the Trust (the “Trustees”) may refuse to sell Shares of any Portfolio to any person, or suspend or terminate the offering of Shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Trustees acting in good faith and in light of their fiduciary duties under federal and any applicable state laws, necessary in the best interests of the shareholders of such Portfolio. With respect to payment of purchase price by the Company and of redemption proceeds by the Trust, the Company and the Trust shall remit gross purchase and sale orders with respect to each Portfolio and shall transmit one net payment per Portfolio in accordance with the provisions of this Article I.

1.2    The Trust will redeem any full or fractional Shares of any Portfolio when requested by the Company on behalf of an Account at the net asset value next computed after receipt by the Trust (or its agent) of the request for redemption, as established in accordance with the provisions of the then current prospectus of the Trust. The Trust shall make payment for such Shares in the manner established from time to time by the Trust, but in no event shall payment be delayed for a greater period than is permitted by the 1940 Act.

1.3    For the purposes of Sections 1.1 and 1.2, the Trust hereby appoints the Company as its agent for the limited purpose of receiving and accepting purchase and redemption orders resulting from investment in and payments under the Contracts. Receipt by the Company shall constitute receipt by the Trust provided that (i) such orders are received by the Company in good order prior to the time the net asset value of each Portfolio is priced in accordance with its prospectus and (ii) the Trust receives notice of such orders by 9:00 a.m. New York time on the next Business Day. “Business Day” shall mean any day on which the New York Stock Exchange is open for trading and on which the Trust calculates its net asset value pursuant to the rules of the Securities and Exchange Commission.

1.4    Purchase orders that are transmitted to the Trust in accordance with Section 1.3

 

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shall be paid for no later than 12:00 p.m. New York time on the same Business Day that the Trust receives notice of the order. Payments shall be made in federal funds transmitted by wire.

1.5    Issuance and transfer of the Trust’s Shares will be by book entry only. Stock certificates will not be issued to the Company or the Account. Shares ordered from the Trust will be recorded in the appropriate title for each Account or the appropriate subaccount of each Account.

1.6    The Trust shall furnish prompt notice to the Company of any income dividends or capital gain distributions payable on the Trust’s Shares. The Company hereby elects to receive all such income dividends and capital gain distributions as are payable on a Portfolio’s Shares in additional Shares of that Portfolio. The Trust shall notify the Company of the number of Shares so issued as payment of such dividends and distributions.

1.7    The Trust shall make the net asset value per Share for each Portfolio available to the Company on a daily basis as soon as reasonably practical after the net asset value per Share is calculated. If the Trust provides the Company with materially incorrect share net asset value information, the Trust shall make an adjustment to the number of shares purchased or redeemed for the Accounts to reflect the correct net asset value per share. The Trust shall make the determination as to whether an error in net asset value has occurred and is a material error in accordance with its own internal policies, which are consistent with SEC materiality guidelines. Any material error in the calculation or reporting of net asset value per share, dividend or capital gains information shall be reported promptly upon discovery to the Company.

1.8    The Trust agrees that its Shares will be sold only to Participating Insurance Companies and their separate accounts and to certain qualified pension and retirement plans to the extent permitted by the Exemptive Order. No Shares of any Portfolio will be sold directly to the general public. The Company agrees that Trust Shares will be used only for the purposes of funding the Contracts in the Accounts listed in Schedule A, as amended from time to time.

1.9    The Trust agrees that all Participating Insurance Companies shall have the obligations and responsibilities regarding pass-through voting and conflicts of interest corresponding to those contained in Section 2.8 and Article IV of this Agreement.

1.10  (a)    All orders accepted by the Company shall be subject to the terms of the then current prospectus of each Portfolio, including without limitation, policies regarding excessive trading. The Company shall use commercially reasonable efforts, and shall reasonably cooperate with, the Trust to enforce stated prospectus policies regarding transactions in Shares, particularly those related to excessive trading and short-term trading. The Company acknowledges that orders accepted by it in violation of the Trust’s stated policies may be subsequently revoked or cancelled by the Trust and that the Trust shall not be responsible for any losses incurred by the Company or Contract or Account as a result of such cancellation. The Trust or its agent shall notify the Company of such cancellation prior to 12:00 p.m. New York time on the next Business Day after any such cancellation.

 

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(b)    The Company acknowledges and agrees that all orders for Shares are subject to acceptance or rejection by the Trust in its sole discretion and the Trust may, in its discretion and without notice, suspend or withdraw the sale of Shares of any Fund, including the sale of such Shares to the Company for the account of any Contract owner. In addition, the Company acknowledges that the Trust has the right to refuse any purchase order for any reason, particularly if the Trust determines that a Portfolio would be unable to invest the money effectively in accordance with its investment policies or would otherwise be adversely affected due to the size of the transaction, frequency of trading by the account or other factors.

1.11    The Company certifies that it is following all relevant rules and regulations, as well as internal policies and procedures, regarding “forward pricing” and the handling of mutual fund orders on a timely basis. As evidence of its compliance, the Company shall:

(a)    permit the Trust or its agent to audit its operations, as well as any books and records preserved in connection with its provision of services under this Agreement; or

(b)    provide the Trust with the results of a Statement on Standards for Attestation Engagements No. 16 (“SSAE-16”) review or similar report of independent auditors upon request; or

(c)    provide, upon request, certification to the Trust that it is following all relevant rules, regulations, and internal policies and procedures regarding “forward pricing” and the handling of mutual fund orders on a timely basis.

ARTICLE II

Obligations of the Parties

2.1    The Trust shall prepare and be responsible for filing with the Securities and Exchange Commission and any state regulators requiring such filing all shareholder reports, notices, proxy materials (or similar materials such as voting instruction solicitation materials), prospectuses and statements of additional information of the Trust. The Trust shall bear the costs of registration and qualification of its shares, preparation and filing of the documents listed in this Section 2.1 and all taxes to which an issuer is subject on the issuance and transfer of its shares.

2.2    At the option of the Company, the Trust shall either (a) provide the Company with as many copies of the Trust’s Shares’ current prospectus, annual report, semi-annual report and other shareholder communications, including any amendments or supplements to any of the foregoing, as the Company shall reasonably request; or (b) provide the Company with a camera ready copy of such documents in a form suitable for printing. The Trust shall provide the Company with a copy of the Shares’ statement of additional information in a form suitable for duplication by the Company. The Trust (at its expense) shall provide the Company with copies of any Trust-sponsored proxy materials in such quantity as the Company shall reasonably require for distribution to Contract owners.

2.3    (a)    The Trust shall bear the costs of printing the Trust’s Shares’ prospectus,

 

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statement of additional information, shareholder reports and other shareholder communications (“Trust Shareholder Materials”) to Contract owners of policies for which the Trust is serving as an investment vehicle, and the costs of distributing supplements to the Trust’s Shares’ prospectus to Contract owners. Except as noted above, the Company shall bear the costs of distributing Trust Shareholder Materials to Contract owners, and the costs of printing and distributing Trust Shareholder Materials for applicants for policies. The Trust shall bear the costs of distributing proxy materials (or similar materials such as voting solicitation instructions) to Contract owners. The Company assumes sole responsibility for ensuring that such materials are delivered to Contract owners in accordance with applicable federal and state securities laws. Costs shall be allocated to reflect the Trust’s share of the total costs determined according to the number of pages of the Trust’s respective portions of the documents.

(b)    If the Company elects to include any materials provided by the Trust, specifically prospectuses, statements of additional information, shareholder reports and proxy materials, on its web site or in any other computer or electronic format, the Company assumes sole responsibility for maintaining such materials in the form provided by the Trust and for promptly replacing such materials with all updates provided by the Trust.

2.4    The Company agrees and acknowledges that Janus International Holding LLC (“Janus Holding”) or its affiliate is the sole owner of the name and mark “Janus.” All references contained in this Agreement to “the name or mark ‘Janus’” shall include but not be limited to the Janus logo, the website www.janus.com and any and all electronic links relating to such website. Neither the Service Provider, nor its affiliates, employees, or agents shall, without prior written consent of Janus Holding, use the name or mark “Janus” or make representations regarding the Trust, Janus Holding, or their affiliates, or any products or services sponsored, managed, advised, or administered by the Trust, Janus Holding, or their affiliates, except those contained in the then-current Prospectus and the then-current printed sales literature for the Shares of the Portfolios. The Service Provider will make no use of the name or mark “Janus” except as expressly provided in this Agreement or expressly authorized by Janus Holding in writing. All goodwill associated with the name and mark “Janus” shall inure to the benefit of Janus Holding or its affiliate. Upon termination of this Agreement for any reason, the Service Provider shall immediately cease any and all use of any Janus mark(s).

2.5    The Company shall furnish, or cause to be furnished, to the Trust or its designee, a copy of each Contract prospectus or statement of additional information in which the Trust or its investment adviser is named prior to the filing of such document with the Securities and Exchange Commission. The Company shall furnish, or shall cause to be furnished, to the Trust or its designee, each piece of sales literature or other promotional material in which the Trust or its investment adviser is named, at least fifteen (15) Business Days prior to its use. No such material shall be used if the Trust or its designee reasonably objects to such use within fifteen (15) Business Days after receipt of such material.

2.6    The Company shall not give any information or make any representations or statements on behalf of the Trust or concerning the Trust or its investment adviser in connection with the sale of the Contracts other than information or representations contained in and accurately derived from the registration statement or prospectus for the Trust Shares (as such

 

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registration statement and prospectus may be amended or supplemented from time to time), reports of the Trust, Trust-sponsored proxy statements, or in sales literature or other promotional material approved by the Trust or its designee, except as required by legal process or regulatory authorities or with the written permission of the Trust or its designee.

2.7    The Trust shall not give any information or make any representations or statements on behalf of the Company or concerning the Company, the Accounts or the Contracts other than information or representations contained in and accurately derived from the registration statement or prospectus for the Contracts (as such registration statement and prospectus may be amended or supplemented from time to time), or in materials approved by the Company for distribution including sales literature or other promotional materials, except as required by legal process or regulatory authorities or with the written permission of the Company.

2.8    So long as, and to the extent that the Securities and Exchange Commission interprets the 1940 Act to require pass-through voting privileges for variable policyowners, the Company will provide pass-through voting privileges to owners of policies whose cash values are invested, through the Accounts, in shares of the Trust. The Trust shall require all Participating Insurance Companies to calculate voting privileges in the same manner and the Company shall be responsible for assuring that the Accounts calculate voting privileges in the manner established by the Trust. With respect to each Account, the Company will vote Shares of the Trust held by the Account and for which no timely voting instructions from policyowners are received as well as Shares it owns that are held by that Account, in the same proportion as those Shares for which voting instructions are received. The Company and its agents will in no way recommend or oppose or interfere with the solicitation of proxies for Trust shares held by Contract owners without the prior written consent of the Trust, which consent may be withheld in the Trust’s sole discretion.

2.9    The Company has determined that the investment restrictions set forth in the current Trust prospectus are sufficient to comply with all investment restrictions under state insurance laws that are currently applicable to the Portfolios as a result of the Accounts’ investment therein. The Company shall notify the Trust of any additional applicable state insurance laws that restrict the Portfolios’ investments, or otherwise affect the operation of the Trust after the date of this Agreement.

ARTICLE III

Representations and Warranties

3.1    The Company represents and warrants that:

(a)    it is an insurance company duly organized and in good standing under the laws of the state of Colorado or state of New York, as applicable, and that it has legally and validly established each Account as a segregated asset account under such law;

 

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(b)    each Account has been registered or, prior to any issuance or sale of the Contracts, will be registered as a unit investment trust in accordance with the provisions of the 1940 Act (unless registration is not required under applicable law);

(c)    the Contracts or interests in the Accounts (1) are or, prior to issuance, will be registered as securities under the 1933 Act or, alternatively (2) are not registered because they are properly exempt from registration under the 1933 Act or will be offered exclusively in transactions that are properly exempt from registration under the 1933 Act. The Company further represents and warrants that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws; and the sale of the Contracts shall comply in all material respects with state insurance suitability requirements;

(d)    it is, and shall carry out its activities under this Agreement, in compliance with all applicable anti-money laundering laws, rules and regulations including, but not limited to, the U.S.A. PATRIOT Act of 2001, P.L. 107-56. The Company further represents that it has policies and procedures in place reasonably designed to detect money laundering and terrorist financing, including the reporting of suspicious activity; and

(e)    The Company is a “financial intermediary” as defined by SEC Rule 22c-2 of the 1940 Act (“The Rule”), and its affiliate, GWFS Equities, Inc., has entered into an appropriate agreement with the Trust or one of its affiliates pursuant to the requirements of The Rule on the Company’s behalf.

(f)    the principal underwriter of any unregistered separate account holding Portfolio shares is a broker or dealer registered under the Securities Exchange Act of 1934 (the “1934 Act”) or is controlled (as defined in the 1940 Act) by a broker or dealer registered under the 1934 Act;

(g)    it will not hold any other investment security (as defined in Section 3 of the 1940 Act) in an investment division that holds shares of a Portfolio offered in the unregistered Account;             (h)         if and to the extent required by law, it will seek instructions from holders of interests in an unregistered separate account holding Portfolio shares with regard to the voting of all proxies solicited in connection with a Portfolio and will vote those proxies only in accordance with those instructions, or the Company will vote Portfolio shares held in its unregistered separate accounts in the same proportion as the vote all of the Portfolio’s other shareholders; and

(i)    it will not substitute another security for shares of a Portfolio held in an unregistered separate account unless the Securities and Exchange Commission approves the substitution in the manner provided in Section 26 of the 1940 Act

3.2    The Trust and Distributor represent and warrant that:

(a)    the Trust is duly organized and validly existing under the laws of the State of Delaware;

(b)    the Trust Shares offered and sold pursuant to this Agreement will be

 

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registered under the 1933 Act and the Trust shall be registered under the 1940 Act prior to any issuance or sale of such Shares. The Trust shall amend its registration statement under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its Shares. The Trust shall register and qualify its Shares for sale in accordance with the laws of the various states only if and to the extent deemed advisable by the Trust;

(c)    the investments of each Portfolio will comply with the diversification requirements set forth in Section 817(h) of the Internal Revenue Code of 1986, as amended, and the rules and regulations thereunder;

ARTICLE IV

Potential Conflicts

4.1    The Parties acknowledge that the Trust’s shares may be made available for investment to other Participating Insurance Companies. In such event, the Trustees will monitor the Trust for the existence of any material irreconcilable conflict between the interests of the contract owners of all Participating Insurance Companies. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners; or (f) a decision by an insurer to disregard the voting instructions of contract owners. The Trustees shall promptly inform the Company if they determine that an irreconcilable material conflict exists and the implications thereof.

4.2    The Company agrees to promptly report any potential or existing conflicts of which it is aware to the Trustees. The Company will reasonably assist the Trustees in carrying out their responsibilities under the Exemptive Order by providing the Trustees with all information reasonably necessary for the Trustees to consider any issues raised including, but not limited to, information as to a decision by the Company to disregard Contract owner voting instructions.

4.3    If it is determined by a majority of the Trustees, or a majority of its disinterested Trustees, that a material irreconcilable conflict exists that affects the interests of Contract owners, the Company shall, in cooperation with other Participating Insurance Companies whose contract owners are also affected, at its expense and to the extent reasonably practicable (as determined by the Trustees) take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, which steps could include: (a) withdrawing the assets allocable to some or all of the Accounts from the Trust or any Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another Portfolio of the Trust, or submitting the question of whether or not such segregation should be implemented to a vote of all affected Contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to

 

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the affected Contract owners the option of making such a change; and (b) establishing a new registered management investment company or managed separate account.

4.4    If a material irreconcilable conflict arises because of a decision by the Company to disregard Contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, the Company may be required, at the Trust’s election, to withdraw the affected Account’s investment in the Trust and terminate this Agreement with respect to such Account; provided, however that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested Trustees. Any such withdrawal and termination must take place within six (6) months after the Trust gives written notice that this provision is being implemented. Until the end of such six (6) month period, the Trust shall continue to accept and implement orders by the Company for the purchase and redemption of shares of the Trust.

4.5    If a material irreconcilable conflict arises because a particular state insurance regulator’s decision applicable to the Company conflicts with the majority of other state regulators, then the Company will withdraw the affected Account’s investment in the Trust and terminate this Agreement with respect to such Account within six (6) months after the Trustees inform the Company in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested Trustees. Until the end of such six (6) month period, the Trust shall continue to accept and implement orders by the Company for the purchase and redemption of Shares of the Trust.

4.6    For purposes of Sections 4.3 through 4.6 of this Agreement, a majority of the disinterested Trustees shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Company be required to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contract owners materially adversely affected by the irreconcilable material conflict. In the event that the Trustees determine that any proposed action does not adequately remedy any irreconcilable material conflict, then the Company will withdraw the Account’s investment in the Trust and terminate this Agreement within six (6) months after the Trustees inform the Company in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the disinterested Trustees.

4.7    The Company shall at least annually submit to the Trustees such reports, materials or data as the Trustees may reasonably request so that the Trustees may fully carry out the duties imposed upon them by the Exemptive Order, and said reports, materials and data shall be submitted more frequently if deemed appropriate by the Trustees.

4.8    If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Exemptive Order) on terms and conditions materially different from those contained in the Exemptive Order, then the Trust

 

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and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable.

ARTICLE V

Indemnification

5.1    Indemnification By the Company. The Company agrees to indemnify and hold harmless the Distributor, the Trust and each of their Trustees, officers, employees and agents and each person, if any, who controls the Trust within the meaning of Section 15 of the 1933 Act (collectively, the “Trust Indemnified Parties” for purposes of this Article V) against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the written consent of the indemnified Party) or expenses (including the reasonable costs of investigating or defending any alleged loss, claim, damage, liability or expense and reasonable legal counsel fees incurred in connection therewith) (collectively, “Losses”), to which the Trust Indemnified Parties may become subject under any statute or regulation, or at common law or otherwise, insofar as such Losses:

(a)    arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in a registration statement or prospectus for the Contracts or in the Contracts themselves or in sales literature for the Trust generated or approved by the Company on behalf of the Contracts or Accounts (or any amendment or supplement to any of the foregoing) (collectively, the “Company Documents” for the purposes of this Article V), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this indemnity shall not apply as to any Trust Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and was accurately derived from written information furnished to the Company by or on behalf of the Trust or Distributor for use in Company Documents or otherwise for use in connection with the sale of the Contracts or the Shares; or

(b)    arise out of or result from statements or representations (other than statements or representations contained in and accurately derived from the Trust Documents as defined in Section 5.2(a)) or wrongful conduct of the Company or persons under its control, with respect to the sale or acquisition of the Contracts or the Shares; or

(c)    arise out of or result from any untrue statement or alleged untrue statement of a material fact contained in the Trust Documents or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading if such statement or omission was made in reliance upon and accurately derived from written information furnished to the Trust by or on behalf of the Company; or

(d)    arise out of or result from any failure by the Company to provide the services or furnish the materials required under the terms of this Agreement; or

(e)    arise out of or result from any material breach of any representation and/or

 

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warranty made by the Company in this Agreement or arise out of or result from any other material breach of this Agreement by the Company.

5.2    Indemnification By the Trust and Distributor. The Trust and Distributor agree to indemnify and hold harmless the Company and each of its directors, officers, employees and agents and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act (collectively, the “Company Indemnified Parties” for purposes of this Article V) against any and all Losses to which the Company Indemnified Parties may become subject under any statute or regulation, or at common law or otherwise, insofar as such Losses:

(a)    arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or prospectus for the Trust (or any amendment or supplement thereto), (collectively, the “Trust Documents” for the purposes of this Article V), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this indemnity shall not apply as to any Company Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and was accurately derived from written information furnished to the Trust or Distributor by or on behalf of the Company for use in the Trust Documents or otherwise for use in connection with the sale of the Contracts or the Shares; or

(b)    arise out of or result from statements or representations (other than statements or representations contained in and accurately derived from the Company Documents) or wrongful conduct of the Trust or Distributor or persons under their control, with respect to the sale or acquisition of the Contracts or the Shares; or

(c)    arise out of or result from any untrue statement or alleged untrue statement of a material fact contained in the Company Documents or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading if such statement or omission was made in reliance upon and accurately derived from written information furnished to the Company by or on behalf of the Trust or Distributor; or

(d)    arise out of or result from any failure by the Trust or Distributor to provide the services or furnish the materials required under the terms of this Agreement; or

(e)    arise out of or result from any material breach of any representation and/or warranty made by the Trust or Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Trust or Distributor.

5.3    Neither the Company nor the Trust or Distributor shall be liable under the indemnification provisions of Sections 5.1 or 5.2, as applicable, with respect to any Losses incurred or assessed against an indemnified Party that arise from such indemnified Party’s willful misfeasance, bad faith or negligence in the performance of such indemnified Party’s duties or by reason of such indemnified Party’s reckless disregard of obligations or duties under this Agreement.

 

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5.4    Neither the Company nor the Trust or Distributor shall be liable under the indemnification provisions of Sections 5.1 or 5.2, as applicable, with respect to any claim made against an indemnified Party unless such indemnified Party shall have notified the other Party in writing within a reasonable time after the summons, or other first written notification, giving information of the nature of the claim shall have been served upon or otherwise received by such indemnified Party (or after such indemnified Party shall have received notice of service upon or other notification to any designated agent), but failure to notify the Party against whom indemnification is sought of any such claim shall not relieve that Party from any liability which it may have to the indemnified Party in the absence of Sections 5.1 and 5.2.

5.5    In case any such action is brought against the indemnified Parties, the indemnifying Party shall be entitled to participate, at its own expense, in the defense of such action. The indemnifying Party also shall be entitled to assume the defense thereof, with counsel reasonably satisfactory to the Party named in the action. After notice from the indemnifying Party to the indemnified Party of an election to assume such defense, the indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the indemnifying Party will not be liable to the indemnified Party under this Agreement for any legal or other expenses subsequently incurred by such Party independently in connection with the defense thereof other than reasonable costs of investigation.

ARTICLE VI

Termination

6.1    This Agreement may be terminated by any Party for any reason by ninety (90) days advance written notice delivered to the other Party.

6.2    Notwithstanding any termination of this Agreement, the Trust shall, at the option of the Company, continue to make available additional shares of the Trust (or any Portfolio) pursuant to the terms and conditions of this Agreement for all Contracts in effect on the effective date of termination of this Agreement, provided that the Company continues to pay the costs set forth in Section 2.3.

6.3    The provisions of Article V and Section 8.12 shall survive the termination of this Agreement, and the provisions of Article IV and Section 2.8 shall survive the termination of this Agreement as long as Shares of the Trust are held on behalf of Contract owners in accordance with Section 6.2.

ARTICLE VII

Notices

Any notice shall be sufficiently given when sent by registered or certified mail to the other Party at the address of such Party set forth below or at such other address as such Party may from time to time specify in writing to the other Party.

If to the Trust:

 

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Janus Aspen Series

151 Detroit Street

Denver, Colorado 80206

Attention: Chief Legal Counsel

If to the Distributor:

Janus Distributors LLC

151 Detroit Street

Denver, Colorado 80206

Attn: General Counsel

If to the Company:

Great-West Life & Annuity Insurance Company

8515 East Orchard Road

Greenwood Village, CO 80111

Attention: Chief Compliance Officer

Great-West Life & Annuity Insurance Company of New York

8515 East Orchard Road

Greenwood Village CO 80111

Attention: Chief Compliance Officer

ARTICLE VIII

Miscellaneous

8.1    The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect.

8.2    This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument.

8.3    If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby.

8.4    This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of state of Colorado.

8.5    The Parties acknowledge and agree that all liabilities of the Trust arising, directly or indirectly, under this Agreement, of any and every nature whatsoever, shall be satisfied solely out of the assets of the Trust and that no Trustee, officer, agent or holder of shares of beneficial interest of the Trust shall be personally liable for any such liabilities. The Trust and the

 

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Distributor acknowledge and agree that the obligations assumed by the Company pursuant to this Agreement are limited in any case to the Company and its assets and neither the Trust nor the Distributor shall seek satisfaction of any such obligation from the shareholders of the Company, the directors, officers, employees or agents of the company, except to the extent permitted under this Agreement.

8.6    Each Party shall cooperate with each other Party and all appropriate governmental authorities (including without limitation the SEC, the Financial Industry Regulatory Authority, and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby.

8.7    The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the Parties are entitled to under state and federal laws.

8.8    The Parties acknowledge and agree that this Agreement shall not be exclusive in any respect.

8.9    Neither this Agreement nor any rights or obligations hereunder may be assigned by any Party without the prior written approval of the other Party, such written approval not to be unreasonably withheld or delayed.

8.10    No provisions of this Agreement may be amended or modified in any manner except by a written agreement properly authorized and executed by all Parties. The terms or provisions of this Agreement may be waived only by a writing signed by the Party waiving compliance. No waiver by any Party of any term or provision of this Agreement will be deemed to be a continuing waiver, or deemed to be a waiver of any other term or provision of this Agreement.

8.11    No Party shall be liable for any delay or failure to perform its obligations (other than a failure to comply with payment obligations) hereunder if such delay or failure is caused by an event reasonably beyond the control of such Party, including without limitation acts of God, war or civil disorder, or acts of terrorism.

8.12    Subject to the requirements of legal process and regulatory authority, each Party shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified in writing as confidential or proprietary by any other Party and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected Party until such time as such information may come into the public domain.

8.13    This Agreement sets forth the entire agreement and understanding of the Parties relating to the subject matter hereof, and supersedes all other prior agreements, arrangements, and understandings, whether written or oral, between the Parties.

 

-14 -

(the remainder of this page intentionally blank; signature page to follow)

 

-15-

IN WITNESS WHEREOF, the Parties have caused their duly authorized officers to execute this Participation Agreement to be effective as of the Effective Date.

 

JANUS ASPEN SERIES

By:

  

/s/ Stephanie Grauerholz

Name:

  

Stephanie Grauerholz

Title:

  

Vice President

 

JANUS DISTRIBUTORS LLC

By:

  

/s/ Russell P. Shipman

Name:

  

Russell P. Shipman

Title:

  

Senior Vice President

 

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

By:

  

/s/ Susan Gile

Name:

  

Susan Gile

Title:

  

VP. Individual Markets

 

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY of NEW YORK

By:

  

/s/ Ron Laeyendecker

Name:

  

Ron Laeyendecker

Title:

  

Senior Vice President

 

-16-

Schedule A

Separate Accounts and Associated Contracts

GWL&A Accounts

FutureFunds Series Account

FutureFunds II Series Account

Variable Annuity-1 Series Account

Variable Annuity-2 Series Account

Variable Annuity Account 5

COLI VUL-2 Series Account

COLI VUL-4 Series Account

COLI VUL-7 Series Account

DB-1 Series Account

GWL&ANY Accounts

FutureFunds II Series Account

Variable Annuity-1 Series Account

Variable Annuity-2 Series Account

Variable Annuity Account 5

COLI VUL-1 Series Account

COLI VUL-2 Series Account

DB-1 Series Account

 

- 17 -

Schedule B

List of Portfolios

Available Portfolios

All Portfolios of Institutional and Service Shares of Janus Aspen Series open to new investors (as set forth in the current prospectus of Janus Aspen Series).

 

-18 -

Schedule C

To Fund Participation Agreement

Order Submission and Processing

Effective Date: December 1, 2015

With respect to Article I of the Agreement, the Company by its agent is:

 

  ☒

Self-clearing orders through NSCC systems (see Section 1 below)

  ☐

Clearing orders through a clearing agent

  ☐

Approved by Distributor or its agent operations for manual submission of orders (see Section 2 below)

 

1.

Submission of Orders through NSCC. Distributor or its agent will accept trades submitted via the NSCC Systems in accordance with the following terms.

 

  (a)

Obligations of Distributor or its agent.

 

  (i)

Transactions Subject to Fund/SERV. On each business day that the New York Stock Exchange is open for business on which the Funds determine their per share net asset values (“Business Day”), Distributor or its agent shall accept, and effect, changes in its records upon receipt of purchase, redemption, exchanges, and registration instructions from the Company or its agent electronically through Fund/SERV (“Instructions”) without supporting documentation from the Customer in accordance with the terms and conditions set forth in this Schedule 4. On each Business Day, Distributor or its agent shall accept for processing any Instructions from the Company or its agent and shall process such Instructions in a timely manner. Purchases to a Customer’s Fund account shall be posted to such account through nightly processing after both the account registration and purchase settlement have been received. Such purchase shall appear on the account record the following Business Day. Shares are ineligible for redemption until they are posted and appear on the account record.

 

  (ii)

Performance of Duties. Distributor or its agent shall perform any and all duties, functions, procedures and responsibilities assigned to it under this Agreement and as otherwise established by the NSCC. Distributor or its agent shall maintain facilities, equipment and skilled personnel sufficient to perform the foregoing activities and to otherwise comply with the terms of this Agreement. Distributor or its agent shall conduct each of the foregoing activities in a competent manner and in compliance with all applicable laws, rules and regulations, including NSCC rules and procedures relating to

 

-19-

 

Fund/SERV, and in compliance with the then-current prospectuses and SAIs of the Funds.

 

  (iii)

Accuracy of Information, Transmissions Through, and Access to Fund/SERV. Confirmed trades and any other information provided by Distributor or its agent to Company or its agent through Fund/SERV and pursuant to this Agreement shall be accurate, complete, and in the format prescribed by the NSCC. Distributor or its agent shall adopt, implement and maintain procedures reasonably designed to ensure the accuracy of all transmissions through Fund/SERV and to limit the access to, and the inputting of data into, Fund/SERV to persons specifically authorized by Distributor or its agent.

 

  (iv)

Notice of Prospectus and Statement of Additional Information Revisions. The Funds shall provide Company or its agent with reasonable notice of any material revisions to the Funds’ prospectuses and SAIs as are necessary to enable Company or its agent to fulfill its obligations under this Agreement.

 

  (b)

Obligations of Company or its agent.

 

  (i)

Transactions Subject to Fund/SERV. Company or its agent certifies that all Instructions delivered to Distributor or its agent on any Business Day shall have been received by Company or its agent from the Customer by the close of trading (currently 4:00 p.m. Eastern Time (“ET”)) on the New York Stock Exchange (the “Close of Trading”) on such Business Day and that any Instructions received by it after the Close of Trading on any given Business Day will be transmitted to Distributor or its agent on the next Business Day. Except with respect to Instructions on behalf of Defined Contribution Plans, Company or its agent further certifies that all such Instructions received by it from a Customer by the Close of Trading on any Business Day will be delivered to Distributor or its agent on such Business Day. With respect to processing of Instructions on behalf of Defined Contribution Plans that Company or its agent received by the Close of Trading on a Business Day, Company or its agent certifies it will:

 

  (A)

transmit such Instructions to Distributor or its agent through Fund/SERV by 6:00 a.m. ET on the next Business Day, or

 

  (B)

otherwise notify Distributor or its agent of such Instructions by 10:00 a.m. ET on the next Business Day. If Company or its agent must deliver any Instructions to Distributor or its agent on a certain Business Day for processing as of the prior Business Day due to systems problems or errors, such Instructions must be delivered by 10:00 a.m. ET to Distributor or its agent on such Business Day. If Distributor or its agent receives such Instructions after the 10:00 a.m. ET deadline and processes the Instructions,

 

-20-

  resulting in a loss to the Funds, Company or its agent agrees to reimburse Distributor or its agent for such loss upon receipt of a reclaim letter from Distributor or its agent. Distributor or its agent appoints Company or its agent as its agent for the limited purpose of accepting orders for the purchase and redemption of shares of the Funds by Company or its agent on behalf of its Customers.

 

  (ii)

Performance of Duties. Company or its agent shall perform any and all duties, functions, procedures and responsibilities assigned to it under this Agreement and as otherwise established by the NSCC. Company or its agent shall maintain facilities, equipment and skilled personnel sufficient to perform the foregoing activities and to otherwise comply with the terms of this Agreement. Company or its agent shall conduct each of the forgoing activities in a competent manner and in compliance with all applicable laws, rules and regulations, including NSCC rules and procedures relating to Fund/SERV, and in compliance with the then-current prospectuses and SAIs of the Funds.

 

  (iii)

Accuracy of Information, Transmissions Through, and Access to Fund/SERV. Trade, registration, and if applicable, broker/dealer information provided by the Trust Entity to the Fund Agent through Fund/SERV and pursuant to this Agreement shall be accurate, complete and, in the format prescribed by the NSCC. All Instructions by Company or its agent regarding each Fund/SERV account shall be true and correct and will have been duly authorized by the Customer under whose name the account appears in the records of Company or its agent. Company or its agent shall adopt, implement and maintain procedures reasonably designed to ensure the accuracy of all transmissions through Fund/SERV and to limit the access to, and the inputting of data into, Fund/SERV to persons specifically authorized by Company or its agent.

 

  (iv)

Information Relating to Fund/SERV Transactions. For each Fund/SERV transaction, including transactions establishing a Customer account with Distributor or its agent, Company or its agent shall provide the Funds and Distributor or its agent with all information necessary or appropriate to establish and maintain each Fund/SERV transaction (and any subsequent changes to such information) which Company or its agent hereby certifies is, and shall remain, true and correct. Company or its agent shall maintain documents required by the Funds or by applicable law, rules or regulations to effect Fund/SERV transactions.

 

  (v)

As-of Transactions. Processing errors which result from any delay or error caused by Company or its agent may be adjusted through Fund/SERV by Company or its agent by the necessary transactions on an as-of basis and the cost to the Fund or Distributor or its agent of such transactions shall be borne by Company or its agent.

 

-21 -

  (vi)

Duplicate Transactions and Payments. Company or its agent acknowledges that as a result of the automated settlement features of NSCC’s Fund/SERV program, Distributor or its agent’ compliance with redemption and/or settlement instructions involves a risk that the shareholder whose account is being redeemed may issue an inconsistent instruction, that the account being redeemed may be subject to backup or penalty withholding, or that a record date may occur while the redemption transaction is pending, resulting in a duplication transaction, overpayment, or dividend payment to the record owner. If Distributor or its agent’ compliance with redemption and settlement instructions result in a duplicate transaction or overpayment, in addition to the procedures described above, Company or its agent will, within two (2) business days after receipt of notice, refund all or any appropriate portion of any sums received by it in connection with such duplicate transaction or overpayment.

 

  (vii)

Trade Confirmation. Any information provided by Distributor or its agent to Company or its agent electronically through Fund/SERV and pursuant to this Agreement, shall satisfy the delivery obligations as outlined by SEC Rule 10b-10 and, as such, Distributor or its agent has the informed consent of Company or its agent to suppress the delivery of this information using paper-media. Company or its agent will promptly verify accuracy of confirmations of transactions and records received by Distributor or its agent through Fund/SERV.

 

  (viii)

Shareholder Reports and Other Documents; Solicitation of Proxies. Company or its agent shall timely deliver to each Customer all reports and other documents provided to it by the Funds or Distributor or its agent as is required by applicable securities law and the Company or its agent’s agreement with the Customer, provided that Company or its agent has timely received copies of such reports and/or documents. The Fund or Distributor or its agent and Company or its agent shall cooperate with each other in the solicitation and voting of proxies on behalf of the Funds according to Company or its agent’s fiduciary responsibility as written in the trust agreement or as required by state law or Federal Regulation.

 

  (ix)

Settlement of Transactions. For any purchase or redemption of Shares processed through Fund/SERV, Distributor or its agent and Company or its agent will settle all trades on the next Business Day following transmission of Instructions by Company or its agent to Distributor or its agent (the “Settlement Date”) in the manner provided by NSCC Fund/SERV Rules.

 

  (c)

Overpayments.

 

  (i)

In the event any overpayment is made to Company or its agent by Distributor or its agent, Company or its agent shall promptly repay such

 

-22-

 

overpayment to Distributor or its agent after Company or its agent receives notice of such overpayment.

 

  (ii)

In the event any overpayment is made to Distributor or its agent by Company or its agent, Distributor or its agent shall promptly repay such overpayment to Company or its agent after Distributor or its agent receives notice of such overpayment.

 

  (d)

Indemnification. Distributor or its agent shall indemnify and hold harmless Company or its agent, Company or its agent’s affiliates, directors, officers, agents and employees and assigns of the foregoing (collectively, “Indemnified Company or its agent Parties”), against and from any and all demands, damages, liabilities, and losses, or any pending or completed actions, claims, suits, complaints, proceedings, or investigations (including reasonable attorneys fees and other costs, including all expenses of litigation or arbitration, judgments, fines or amounts paid in any settlement consented to by Distributor or its agent) to which any of them may be or become subject to as a result or arising out of (a) any willful act or omission by Distributor or its agent, the Funds or their agents relating to Fund/SERV and not arising out of Company or its agent’s negligence; (b) any breach of the Distributor or its agent’ representations or warranties in Section 1 of this Schedule; or (c) Distributor or its agent’ failure to comply with any of the terms of Section 1 of this Schedule. Additional provisions governing the parties’ respective indemnification obligations are set forth in Section 13 of the Agreement.

 

2.

Non-NSCC Order Process. Distributor or its agent will accept trades not submitted via the NSCC Systems on an exception-only basis if Company or its agent is servicing employer sponsored retirement plans or insurance company products such as variable life/annuities in accordance with the following terms:

 

  (a)

On any business day (“Day One”), the Company or its agent may accept orders from Customers for the purchase and redemption of Shares of the Funds. The Company or its agent will send such orders to Distributor or its agent prior to 9:00 a.m. ET of the next business day (“Day Two”) pursuant to the Trading Requirements listed in Section 2(b). The Funds will execute orders at the NAV determined as of the close of trading on Day One, and dividends, if applicable, shall begin to accrue on Day Two, provided that:

 

  (i)

Company or its agent received such orders prior to the time the NAVs of the Shares of the Funds were calculated on Day One, and

 

  (ii)

Such orders and payment for such orders were received by Distributor or its agent prior to the times set forth in Section 2(b)(iv).

 

-23-

If either of the above conditions is not met, the orders will be executed at the NAV next in effect after such orders are received, and dividends, if applicable, will begin to accrue the day after settlement.

 

  (b)

Trading Requirements for trades not submitted via the NSCC Systems:

 

  (i)

All trades must be netted (i.e., one purchase or redemption per Fund, per account). For example: a purchase for $2,000 and a redemption for $500 should be netted into one purchase for $1,500.

 

  (ii)

All trades must be submitted in dollars. No Share trades will be accepted.

 

  (iii)

No exchanges will be accepted, sell/buys must be requested.

 

  (iv)

Electronic or typed trade requests must be received by Distributor or its agent prior to 9:00 a.m. ET.

 

  (v)

All trades will be processed at the NAV.

 

  (c)

Settlement. Payment for net purchases and redemptions will be wired pursuant the following settlement requirements:

 

  (i)

Company or its agent will send Distributor or its agent one combined purchase wire for all purchase orders by 4:00 p.m. ET on Day Two.

 

  (ii)

Distributor or its agent will send one combined wire for all redemption proceeds by 4:00 p.m. ET on Day Two.

In the event of extraordinary market conditions affecting any such redemption, however, Distributor or its agent may delay such redemption for up to five (5) business days, or longer to the extent permitted under Section 22(e) of the 1940 Act.

 

  3.

Provisions Applicable to all Orders. The following provisions apply to order submission and processing, whether through NSCC or otherwise.

 

  (a)

Dividends and Distributions. Distributor or its agent will provide to the Company or its agent closing NAVs, dividends, and capital gains information at the Close of Trading on each Business Day. Dividends and capital gains distributions shall be reinvested in accordance with the terms of the relevant Prospectus.

(b)    State Information. Company or its agent shall maintain and transmit to the Distributor information on sales, redemptions and exchanges of Shares of each Fund by state or jurisdiction of residence of individual Customers and any other information requested by the Distributor to enable the Distributor or its affiliates to properly register or report the sale of the Shares under the

 

-24-

securities, licensing or qualification laws of the various states and jurisdictions. Such information shall be provided in a form mutually agreeable to the Distributor and Service Provide

 

-25-

EX-99.(H)(87) 43 d694125dex99h87.htm EX-99.(H)(87) EX-99.(H)(87)

FUND PARTICIPATION AGREEMENT

This Fund Participation Agreement (the “Agreement”), effective as of 24th day of April, 2009, is made by and among Great-West Life & Annuity Insurance Company (“GWL&A”), First Great-West Life & Annuity Insurance Company (“First GWL&A”), (collectively, the “Company”), JPMorgan Insurance Trust (the Trust”), the Trust’s investment advisors, JPMorgan Investment Advisors Inc. and J. P. Morgan Investment Management Inc. (the “Advisers”), and the Trust’s administrator, JPMorgan Funds Management, Inc. (the “Administrator”).

WHEREAS, the Trust engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established by insurance companies for individual and group life insurance policies and annuity contracts with variable accumulation and/or pay-out provisions (hereinafter referred to individually and/or collectively as “Variable Insurance Products”);

WHEREAS, insurance companies desiring to utilize the Trust as an investment vehicle under their Variable Insurance Products are required to enter into participation agreements with the Trust and the Administrator (the “Participating Insurance Companies”);

WHEREAS, shares of the Trust are divided into several series of shares, each representing the interest in a particular managed portfolio of securities and other assets, any one or more of which may be made available for Variable Insurance Products of Participating Insurance Companies;

WHEREAS, the Trust intends to offer shares of the series set forth on Schedule B (each such series hereinafter referred to as a “Portfolio”) as may be amended from time to time by mutual agreement of the parties hereto under this Agreement to the accounts of the Company specified on Schedule A (hereinafter referred to individually as an “Account,” collectively, the “Accounts”);

WHEREAS, the Trust has obtained an order from the Securities and Exchange Commission, granting the Trust exemptions from the provisions of Sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended (hereinafter the “1940 Act”) and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Trust to be sold to and held by Variable Insurance Product separate accounts of both affiliated and unaffiliated insurance companies (hereinafter the “Shared Funding Exemptive Order”);

WHEREAS, the Trust is registered as an open-end management investment company under the 1940 Act and its shares are registered under the Securities Act of 1933, as amended (hereinafter the “1933 Act”);

WHEREAS, the Advisers are duly registered as an investment advisers under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws;

WHEREAS, the Advisers is the investment adviser of the Portfolios of the Trust;

WHEREAS, the Company has registered certain Variable Insurance Products under the 1933 Act; and

WHEREAS, to the extent permitted by applicable insurance laws and regulations, each Account intends to purchase shares of the Portfolios to fund certain of the aforesaid Variable Insurance Products and the Trust is authorized to sell such shares to each such Account at net asset value.

NOW, THEREFORE, in consideration of their mutual promises, the Company, the Trust, the Advisers, and the Administrator agree as follows:

Article 1

The Contracts

1.        GWL&A represents that it has established each of its Accounts specified on Schedule A as a separate account under Colorado law and First GWL&A represents that it has established its Accounts

 

- 1 -

designated by the Company as the recipient for such notice of such delay by 3:00 p.m. Eastern Time on Trade Date plus 1.

2.6.    Issuance and transfer of the Trust’s shares will be by book entry only. Share certificates will not be issued to the Company or any Account. Shares ordered from the Trust will be recorded in an appropriate title for each Account or the appropriate subaccount of each Account.

2.7.    On each record date, the Administrator shall use its best efforts to furnish same day notice by 6:30 p.m. Eastern Time (by wire, telephone, electronic media or by fax) to the Company of any dividends or capital gain distributions payable on the Trust’s shares. The Company hereby elects to receive all such dividends and capital gain distributions as are payable on the Portfolio shares in additional shares of that Portfolio. The Company reserves the right to revoke this election and to receive all such dividends and capital gain distributions in cash. The Trust shall notify the Company of the number of shares so issued as payment of such dividends and distributions.

2.8.    The Administrator shall make the net asset value per share of each Portfolio available to the Company on a daily basis as soon as reasonably practical after the net asset value per share is calculated and shall use its best efforts to make such net asset value per share available by 6:30 p.m. Eastern Time. In the event that the Administrator is unable to meet the 6:30 p.m. time stated immediately above, then the Administrator shall provide the Company with additional time to notify the Administrator of purchase or redemption orders pursuant to Sections 2.1 and 2.3, respectively, above. Such additional time shall be equal to the additional time that the Administrator takes to make the net asset values available to the Company.

2.9.    If the Administrator provides materially incorrect share net asset value information through no fault of the Company, the Company shall be entitled to an adjustment with respect to the Trust shares purchased or redeemed to reflect the correct net asset value per share as subsequently determined by the Administrator. The determination of the materiality of any net asset value pricing error shall be based on the Trust’s policy for correction of pricing errors (the “Pricing Policy”). The Company shall correct such error in its records and in the records prepared by it for Contract owners in accordance with information provided by the Administrator. Any material error in the calculation or reporting of net asset value per share, dividend or capital gain information shall be reported promptly upon discovery to the Company.

2.10    The Administrator shall provide information to the Company of the amount of shares traded and the associated cost per share (NAV) total trade amount and the outstanding share balances held by the Account in each Portfolio as of the end of each Business Day. Such information will be furnished (electronically or by fax) by 1:00 p.m. Eastern time on the next Business Day.

2.11 Contract Owner Information

Section 1 – Definitions.

 

a.

Day(s) - calendar days unless noted otherwise.

 

b.

Exchange Purchase – Participant-Initiated fund transfer of any portion of a Participant’s assets into a Fund (not including purchases into the Fund made with new assets contributed or rolled into a Plan).

 

c.

Exchange Redemption – Participant-Initiated fund transfer of any portion of a Participant’s assets in a Plan out of a Fund (not including the withdrawal or distribution of assets out of a Plan).

 

d.

Fund(s) – The term “Fund” includes JPMorgan Distribution Services, Inc., which is the Fund’s principal underwriter, the Fund’s transfer agent and the series of the trusts and corporation listed in the Agreement. Fund(s)

 

- 2 -

 

Intermediary will not provide Participant or Plan share balance or dollar account balance information, agent or broker/dealer identification, or Participant name and address.

b.    Written requests for data shall set forth the specific period, not to exceed one hundred eighty (180) calendar days from the date of the request, for which transaction information is sought. Fund Company or its designee may request transaction information older than (180) calendar days from the date of the request as Fund Company deems necessary to investigate compliance with policies established by Fund Company for the purpose of eliminating or reducing any dilution of the value of the outstanding shares issued by Fund Company. Fund Company agrees that in the absence of extraordinary circumstances, such requests will not be made more frequently than quarterly.

c.    Intermediary agrees to transmit the requested information that is on its books and records to Fund Company or their designee as soon as reasonably practicable, and agrees to use best efforts to transmit the requested information within five (5) business days after receipt of the request. Intermediary has no information housed by an indirect intermediary. The requested information shall be communicated in accordance with standards that are mutually agreed upon by the parties.

d.    Fund Company or its designee agree not to use the information received from Intermediary for any purpose other than to comply with SEC Rule 22c-2, and such other applicable laws, rules and regulations. Fund Company shall treat the information as strictly confidential and shall take such steps as are reasonably necessary to protect its confidentiality and prevent the unauthorized disclosure or use of such information.

e.    Intermediary agrees to execute written instructions from the Fund Company to restrict or prohibit further purchases or exchanges of Shares by a Participant that has been identified by the Fund Company as having engaged in transactions in Shares (directly or indirectly through the Intermediary’s account) that violate the trading policies established or utilized by the Funds for the purpose of eliminating or reducing potentially harmful market timing or frequent trading. Instructions must include the Taxpayer Identification Number (“TIN”), if known, and the specific restriction(s) to be executed. If the TIN is not known, the instructions must include an equivalent identifying number of the Participant(s) or account(s) or other agreed upon information to which the instruction relates. Intermediary agrees to execute instructions from the Fund to restrict or prohibit trading as soon as reasonably practicable, but not later than five business days after receipt of the instructions by the Intermediary. Intermediary agrees to provide written confirmation to Fund Company or its designee that instructions have been executed. Intermediary agrees to provide confirmation as soon as reasonably practicable and shall use best efforts to provide such confirmation not later than ten (10) business days after the instructions have been executed.

f.    Upon written request to Intermediary by a Plan or Participant, Fund Company agrees to provide to Intermediary with a copy of the Fund Company’s market timing or other abusive trading policies with respect to the Fund(s) that the Intermediary may provide to the Plan or Participant initiating the request.

Section 4 - Plan Fiduciary Directions. At the direction of a fiduciary with respect to a Plan (e.g., trustee or plan sponsor), in lieu of following the policies and procedures set forth herein with respect to said Plan, Intermediary will close a Fund(s) to all new purchases including exchanges and contributions, for all Participants in the Plan.

Article 3

Prospectuses, Reports to Shareholders and Proxy Statements, Voting

3.1.    The Trust shall provide the Company with as many printed copies of the Trust’s current prospectuses as the Company may reasonably request. The Administrator will provide the Company with a copy of the statement of additional information suitable for duplication. If requested by the Company, in lieu of providing printed copies, the Trust shall provide camera-ready film or computer diskettes containing the Trust’s prospectuses and statement of additional information in order for the Company once each year (or more frequently if the prospectuses and/or statement of additional information for the Trust is amended during

 

- 3 -

  (ii)

vote the Trust shares in accordance with instructions received from Contract owners; and

 

  (iii)

vote Trust shares for which no instructions have been received in the same proportion as Trust shares of such Portfolio for which instructions have been received, so long as and to the extent that the Securities and Exchange Commission continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners.

The Company reserves the right to vote Trust shares held in any segregated asset account in its own right, to the extent permitted by law.

Article 4

Sales Material and Information

4.1.    The Company shall furnish, or shall cause to be furnished, to the Trust, the Advisers or their designee, drafts of any language related to the Trust Portfolio(s) used in the prospectus, each piece of sales literature or other promotional material prepared by the Company or any person contracting with the Company to prepare such material in which the Trust, the Advisers or the Administrator is described, at least ten Business Days prior to its use. No such material shall be used if the Trust, the Advisers, the Administrator or their designee reasonably objects to such use within five Business Days after receipt of such material.

4.2.    Neither the Company nor any person contracting with the Company to prepare sales literature or other promotional material shall give any information or make any representations or statements on behalf of the Trust or concerning the Trust in connection with the sale of the Contracts other than the information or representations contained in the registration statement or Trust prospectus, as such registration statement or Trust prospectus may be amended or supplemented from time to time, or in reports to shareholders or proxy statements for the Trust, or in sales literature or other promotional material approved by the Trust or its designee, except with the permission of the Trust or its designee.

4.3.    The Administrator shall furnish, or shall cause to be furnished, to the Company or its designee, each piece of sales literature or other promotional material prepared by the Trust in which the Company or its Accounts, are described at least ten Business Days prior to its use. No such material shall be used if the Company or its designee reasonably objects to such use within five Business Days after receipt of such material.

4.4.    Neither the Trust, the Administrator, nor the Advisers shall give any information or make any representations on behalf of the Company or concerning the Company, each Account, or the Contracts, other than the information or representations contained in a registration statement or prospectus for the Contracts, as such registration statement or prospectus may be amended or supplemented from time to time, or in published reports or solicitations for voting instruction for each Account which are in the public domain or approved by the Company for distribution to Contract owners, or in sales literature or other promotional material approved by the Company or its designee, except with the permission of the Company.

4.5.    The Trust will provide to the Company, upon its request, at least one complete copy of all registration statements, prospectuses, statements of additional information, reports, proxy statements, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Trust or its shares, promptly after the filing of such document with the Securities and Exchange Commission or other regulatory authorities.

4.6.    The Company will provide to the Trust, upon the Trust’s request, at least one complete copy of all registration statements, prospectuses, statements of additional information, reports, solicitations for voting instructions, sales literature and other promotional materials, applications for exemptions, requests for no action letters, and all amendments to any of the above, that relate to the investment in an Account or Contract, promptly after the filing of such documents with the Securities and Exchange Commission or other regulatory authorities.

 

- 4 -

6.5.    The Company represents that it believes, in good faith, that the Account is a “segregated asset account” and that interests in the Account are offered exclusively through the purchase of a “variable contract,” within the meaning of such terms under Section 1.817-5(f)(2) of the regulations under the Code, and that it will make every effort to continue to meet such definitional requirements, and that it will notify the Trust immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future.

6.6.    The Trust represents and warrants that it is and shall continue to be at all times covered by a blanket fidelity bond or similar coverage for the benefit of the Trust in an amount no less than the minimal coverage as required currently by Rule 17g-(1) of the 1940 Act or related provisions as may be promulgated from time to time. Such bond shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company. The Trust will notify the Company immediately upon having a reasonable basis for believing that the Trust no longer has the coverage required by this Section 6.6.

6.7.    The Company represents and warrants that all of its directors, officers, employees, investment advisers, and other entities dealing with the money or securities of the Trust are and shall continue to be at all times covered by a blanket fidelity bond or similar coverage for the benefit of the Trust, in an amount not less than five million dollars ($5,000,000). Such bond shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company. The Company agrees to make all reasonable efforts to see that this bond or another bond containing these provisions is always in effect and agrees to notify the Trust immediately upon having a reasonable basis for believing that the Company no longer has the coverage required by this Section 6.7.

6.8.    The Trust represents that a majority of its disinterest trustees have approved the Trust’s distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act.

6.9.    The Advisers and the Administrator each represents and warrants that it complies with all applicable federal and state laws and regulations and that it will perform its obligations for the Trust and the Company in compliance with the laws and regulations of its state of domicile and any applicable state and federal laws and regulations.

Article 7

Statements and Reports

7.1.    The Administrator or its designee will make available electronically to the Company within five (5) Business Days after the end of each month a monthly statement of account confirming all transactions made during that month in the Account.

7.2.    The Trust and Administrator agree to provide the Company no later than March 1 of each year with the investment advisory and other expenses of the Trust incurred during the Trust’s most recently completed fiscal year, to permit the Company to fulfill its prospectus disclosure obligations under the SEC’s variable annuity fee table requirements.

Article 8

Potential Conflicts

8.1.    If required under the Shared Funding Exemptive Order, the Board will monitor the Trust for the existence of any material irreconcilable conflict between the interests of the Contract owners of all Accounts investing in the Trust. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract owners and variable life insurance Contract owners; or (f) a decision by a Participating Insurance Company to

 

- 5 -

8.7.    If required under the Shared Funding Exemptive Order, each of the Company and the Advisers shall at least annually submit to the Board such reports, materials or data as the Board may reasonably request so that the Board may fully carry out the obligations imposed upon them by the provisions hereof and in the Shared Funding Exemptive Order, and said reports, materials and data shall be submitted more frequently if deemed appropriate by the Board. Without limiting the generality of the foregoing or the Company’s obligations under Section 8.2, the Company shall provide to the Administrator a written report to the Board no later than January 15th of each year indicating whether any material irreconcilable conflicts have arisen during the prior fiscal year of the Trust. All reports received by the Board of potential or existing conflicts, and all Board action with regard to determining the existence of a conflict, notifying Participating Insurance Companies of a conflict, and determining whether any proposed action adequately remedies a conflict, shall be properly recorded in the minutes of the Board or other appropriate records, and such minutes or other records shall be made available to the Securities and Exchange Commission upon request.

Article 9

Indemnification

9.1.    Indemnification By The Company

9.1 (a). The Company agrees to indemnify and hold harmless the Trust, the Administrator, the Advisers, and each member of their respective Boards and officers and each person, if any, who controls the Trust within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 9.1) against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the written consent of the Company) or litigation (including legal and other expenses), to which the Indemnified Parties may become subject under any statute, regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Trust’s shares or the Contracts and:

 

  (i)

arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or prospectus for the Contracts or contained in the Contracts or sales literature for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished to the Company by or on behalf of the Trust for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Trust shares; or

 

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature of the Trust not supplied by the Company, or persons under its control and other than statements or representations authorized by the Trust) or unlawful conduct of the Company or persons under its control, with respect to the sale or distribution of the Contracts or Trust shares; or

 

  (iii)

arise out of or as a result of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, or sales literature of the Trust or any amendment thereof or supplement thereto or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading if such a statement or omission was made in reliance upon and in conformity with information furnished to the Trust by or on behalf of the Company; or

 

  (iv)

arise as a result of any failure by the Company to provide the services and furnish the materials under the terms of this Agreement; or

 

- 6 -

Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished to the Company by or on behalf of the Administrator; or

 

  (iii)

arise as a result of any failure by the Administrator to provide the services and furnish the materials under the terms of this Agreement; or

 

  (iv)

arise out of or result from any material breach of any representation and/or warranty made by the Administrator in this Agreement or arise out of or result from any other material breach of this Agreement by the Administrator; as limited by and in accordance with the provisions of Section 9.2(b) and 9.2(c) hereof.

9.2(b). The Administrator shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation incurred or assessed against an Indemnified Party as such may arise from such Indemnified Party’s willful misfeasance, bad faith, or gross negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations and duties under this Agreement.

9.2(c). The Administrator shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Administrator in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Administrator of any such claim shall not relieve the Administrator from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision. In case any such action is brought against the Indemnified Parties, the Administrator will be entitled to participate, at its own expense, in the defense thereof. The Administrator also shall be entitled to assume the defense thereof, with counsel satisfactory to the Indemnified Party named in the action. After notice from the Administrator to such Indemnified Party of the Administrator’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Administrator will not be liable to such Indemnified Party under this Agreement for any legal or other expenses subsequently incurred by such Indemnified Party independently in connection with the defense thereof other than reasonable costs of investigation.

9.2(d). The Company agrees promptly to notify the Administrator of the commencement of any litigation or proceedings against it or any of its Indemnified Parties in connection with the issuance or sale of the Contracts or the operation of each Account in which the Portfolios are made available.

9.3.     Indemnification by the Advisers

9.3(a). The Advisers agree to indemnify and hold harmless the Company and its directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act (hereinafter collectively, the “Indemnified Parties” and individually, “Indemnified Party,” for purposes of this Section 9.3) against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the written consent of the Advisers) or litigation (including legal and other expenses) to which the Indemnified Parties may become subject under any statute, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements:

 

  (i)

arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or sales literature of the Trust (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this agreement to indemnify shall not apply as to any Indemnified Party if such statement or

 

- 7 -

Parties may become subject under any statute, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements:

 

  (i)

arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or sales literature of the Trust (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished the Trust by or on behalf of the Advisers, the Company, or the Administrator for use in the registration statement or prospectus for the Trust or in sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Portfolio shares; or

 

  (ii)

arise out of or as a result of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, or sales literature covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished to the Company by or on behalf of the Trust; or

 

  (iii)

arise as a result of any failure by the Trust to provide the services and furnish the materials under the terms of this Agreement; or

 

  (iv)

arise out of or result from any material breach of any representation and/or warranty made by the Trust in this Agreement or arise out of or result from any other material breach of this Agreement by the Trust; as limited by and in accordance with the provisions of Section 9.4(b) and 9.4(c) hereof.

9.4(b). The Trust shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation incurred or assessed against an Indemnified Party as may arise from such Indemnified Party’s willful misfeasance, bad faith, or gross negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations and duties under this Agreement.

9.4(c). The Trust shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Trust in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Trust of any such claim shall not relieve the Trust from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision. In case any such action is brought against the Indemnified Parties, the Trust will be entitled to participate, at its own expense, in the defense thereof. The Trust also shall be entitled to assume the defense thereof, with counsel satisfactory to the Indemnified Party named in the action. After notice from the Trust to such Indemnified Party of the Trust’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Trust will not be liable to such Indemnified Party under this Agreement for any legal or other expenses subsequently incurred by such Indemnified Party independently in connection with the defense thereof other then reasonable costs of investigation.

9.4(d). The Company agrees to promptly notify the Trust of the commencement of any litigation or proceedings against it or any of the Indemnified Parties in connection with this Agreement, the issuance or sale of the Contracts, with respect to the operation of each Account, or the sale or acquisition of shares of the Trust.

 

- 8 -

  (g)

termination by the Company by written notice to the Trust, the Advisers, or the Administrator, if the Company shall determine, in its sole judgment exercised in good faith, that either the Trust, the Advisers, or the Administrator has suffered a material adverse change in its business, operations, financial condition or prospects since the date of this Agreement or is the subject of material adverse publicity, provided that the Company will give the Trust, the Advisers, and the Administrator sixty (60) days’ advance written notice of such determination of its intent to terminate this Agreement, and provided further that after consideration of the actions taken by the Trust, the Advisers, or the Administrator and any other changes in circumstances since the giving of such notice, the determination of the Company shall continue to apply on the 60th day since giving of such notice, then such 60th day shall be the effective date of termination; or

 

  (h)

termination by any party upon the other party’s breach of any representation or any material breach of any provision of this Agreement, which breach has not been cured to the satisfaction of the terminating party within ten (10) days after written notice of such breach is delivered to the Trust or the Company, as the case may be; or

 

  (i)

termination by the Trust, the Advisers, or Administrator by written notice to the Company in the event an Account or Contract is not registered (unless exempt from registration) or sold in accordance with applicable federal or state law or regulation, or the Company fails to provide pass-through voting privileges as specified in Section 3.3; or

 

  (j)

at the option of Trust, upon the institution of formal proceedings against First GWL&A or GWL&A by the SEC, FINRA, any state insurance regulator or any other regulatory body regarding their respective obligations under this Agreement or related to the sale of the Contracts, the operation of each Separate Account, or the purchase of Shares, if, in each case, Trust reasonably determines that such proceedings, or the facts on which such proceedings would be based, have a material likelihood of imposing material adverse consequences on the Trust with respect to which the Agreement is to be terminated AND only with respect to proceedings against either First GWL&A or GWL&A; or

 

  (k)

at the option of the Company upon institution of formal proceedings against the Trust, the Advisers or the Administrator by the SEC, FINRA or any state insurance regulator or any other regulatory body regarding Trust’s obligations under this Agreement or related to the operation or management of Fund or the purchase of Fund Shares, if, in each ease, the Company reasonably determine that such proceedings, or the facts on which such proceedings would be based, have a material likelihood of imposing material adverse consequences on First GWL&A. GWL&A, their respective affiliates, officers or directors, or the Subaccount corresponding to the Fund with respect to which the Agreement is to be terminated.

11.2.     Effect of Termination. Notwithstanding any termination of this Agreement, the Trust may continue to make available additional shares of the Trust pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as “Existing Contracts”) unless such further sale of Trust shares is proscribed by law, regulation or applicable regulatory body, or unless the Trust determines that liquidation of the Trust following termination of this Agreement is in the best interests of the Trust and its shareholders. The parties agree that this Section 11.2 shall not apply to any terminations under Article 8 and the effect of such Article 8 terminations shall be governed by Article 8 of this Agreement.

11.3.     The Company shall not redeem Trust shares attributable to the Contracts (as distinct from Trust shares attributable to the Company’s assets held in the Account) except (i) as necessary to implement Contract owner initiated or approved transactions, or (ii) as required by state and/or federal laws or regulations

 

- 9 -

If to the Company:

Great-West Life & Annuity Insurance Company; and/or

First Great-West Life & Annuity Insurance Company

8515 E. Orchard Road

Greenwood Village, CO 80111

Attn: Beverly A. Byrne, Chief Compliance Officer & Legal Counsel, Financial Services

Article 13

Miscellaneous

13.1.    All persons dealing with the Trust must look solely to the property of the Trust for the enforcement of any claims against the Trust as neither the Board, officers, agents or shareholders assume any personal liability for obligations entered on behalf of the Trust. Each of the Company, the Advisers, and the Administrator acknowledges and agrees that, as provided by the Trust’s Amended and Restated Declaration of Trust, the shareholders, trustees, officers, employees and other agents of the Trust and the Portfolios shall not personally be bound by or liable for matters set forth hereunder, nor shall resort be had to their private property for the satisfaction of any obligation or claim hereunder. The Trust’s Amended and Restated Declaration of Trust is on file with the Secretary of State The Commonwealth of Massachusetts.

13.2.    The Company will comply with all applicable laws and regulations aimed at preventing, detecting, and reporting money laundering and suspicious transactions. Without limiting the generality of the foregoing, the Company shall take all necessary and appropriate steps, consistent with applicable regulations and generally accepted industry practices, to: (i) obtain, verify, and retain information with regard to Contract owner identification and source of Contract owner funds, and (ii) maintain records of all Contract owner transactions. The Company will (but only to the extent consistent with applicable law) take all steps necessary and appropriate to provide the Trust with any requested information about Contract owners and their accounts in the event that the Trust shall request such information due to an inquiry or investigation by any law enforcement, regulatory, or administrative authority. To the extent permitted by applicable law and regulations, the Company will notify the Trust of any concerns that the Company may have in connection with any Contract owner in the context of relevant anti-money laundering laws or regulations.

13.3.    Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information until such time as it may come into the public domain without the express written consent of the affected party.

13.4.    The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect.

13.5.    This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument.

13.6.    If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.

13.7.    Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the Securities and Exchange Commission, the National Association of Securities Dealers and state insurance regulators) and shall permit such authorities (and other parties hereto) reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby.

 

- 10 -

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By:  

/s/ Susan Gile

Name:  

Susan Gile

Title:  

VP., Individual Markets

FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By:  

/s/ Christopher Bergeon

Name:  

Christopher Bergeon

Title:  

Vice President

JPMORGAN INSURANCE TRUST
By:  

/s/ Jeffrey D. House

Name:  

Jeffrey D. House

Title:  

Assistant Treasurer

JPMORGAN INVESTMENT ADVISORS INC.
By:  

/s/ John C. Noel

Name:  

John C. Noel

Title:  

Treasurer & CFO

J.P. MORGAN INVESTMENT MANAGEMENT INC.
By:  

/s/ Gary J Madich

Name:  

Gary J Madich

Title:  

Managing Director

JPMORGAN FUNDS MANAGEMENT, INC.
By:  

/s/ Robert L. Young

Name:  

Robert L. Young

Title:  

Vice President

 

- 11 -

SCHEDULE A

SEPARATE ACCOUNTS AND CONTRACTS

as of April 24, 2009 which Accounts and Contracts may be changed from time to time upon written notification to the Trust by the Company within a reasonable time from such change;

 

Name of Separate Account and Date Established by Board of Directors   

Contract & Form Number

Funded by Separate Account

   
Variable Annuity-1 Separate Account of Great-West Life & Annuity Insurance Company – 7/24/95   

Select - J444

OneSource – J434

   
Variable Annuity-1 Separate Account of First Great-West Life & Annuity Insurance Company – 1/15/97   

Select - J444 (NY)

OneSource – J434 (NY)

   
      
   
      
   
      
   
      
   
      

 

- 12 -

Schedule B

Portfolios of the Trust

JPMorgan Insurance Trust Balanced Portfolio Class 1

JPMorgan Insurance Trust Core Bond Portfolio Class 1

JPMorgan Insurance Trust U.S. Equity Portfolio Class 1

JPMorgan Insurance Trust Diversified Mid Cap Growth Portfolio Class 1

JPMorgan Insurance Trust Mid Cap Value Portfolio Class 1

JPMorgan Insurance Trust Equity Index Portfolio Class 1

JPMorgan Insurance Trust International Equity Portfolio Class 1

JPMorgan Insurance Trust Intrepid Growth Portfolio Class 1

JPMorgan Insurance Trust Intrepid Mid Cap Portfolio Class 1

JPMorgan Insurance Trust Small Cap Core Portfolio Class 1

 

- 13 -

EX-99.(H)(88) 44 d694125dex99h88.htm EX-99.(H)(88) EX-99.(H)(88)

AMENDMENT TO FUND PARTICIPATION AGREEMENT

THIS AMENDMENT TO FUND PARTICIPATION AGREEMENT is made as of this 13th day of April, 2015, by and among Great-West Life & Annuity Insurance Company (“GWL&A”) Great-West Life & Annuity Insurance Company of New York (formerly known as First Great-West Life & Annuity Insurance Company) (collectively, the “Company”) JPMorgan Insurance Trust (the “Trust”), the Trust’s investment advisors, JPMorgan Investment Advisors Inc. and J.P. Morgan Investment Management Inc. (the “Advisers”, and the Trust’s administrator, JPMorgan Funds Management, Inc. (the “Administrator”) (collectively, the “Parties”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement (defined below).

RECITALS

WHEREAS, the Parties entered into to a Fund Participation Agreement dated April 24, 2009, as amended, (the “Agreement”); and

WHEREAS, the Parties desire to add additional Great-West separate accounts to the Agreement; and

WHEREAS, the Parties desire and agree to amend the Agreement by deleting in its entirety Schedule A of the Agreement and replacing it with the Schedule A attached hereto; and

WHEREAS, the Parties desire to add additional Portfolios of the Trust the Agreement; and

WHEREAS, the Parties desire and agree to amend the Agreement by deleting in its entirety Schedule B of the Agreement and replacing it with the Schedule B attached hereto.

WHEREAS, JPMorgan Investment Advisors Inc. (“JPMIA”) was a party to the Agreement and served as an investment adviser to JPMorgan Trust II; and effective January 1, 2010, JPMIA transferred its investment advisory business to JPMorgan Investment Management, Inc. (“JPMIM”) pursuant to an internal reorganization, and in connection therewith JPMIM, JPMIA and JPMorgan Trust II executed an Amendment to Investment Advisory agreement under which JPMIM assumed all of JPMIA’s rights and responsibilities as investment adviser to JPMorgan Trust II;

 

1

WHEREAS, the Company, the Advisors and the Administrator desire to amend the Agreement pursuant to Section 13 of the Agreement;

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

  1.

Schedule A to the Agreement is hereby deleted in its entirety and replaced with the Schedule A attached hereto; and

 

  2.

Schedule B to the Agreement is hereby deleted in its entirety and replaced with the Schedule B attached hereto; and

 

  3.

JPMIA is no longer a party to the Agreement, effective retroactively as of January 1, 2010; and

 

  4.

All other provisions of the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date entered above.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

 

  

By its authorized officer,

   
  

By:

   

/s/ Susan Gile

   

    

   

Name:

   

Susan Gile

   
  

Title:

   

VP - Individual Markets

   
  

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF

NEW YORK (formerly known as FIRST GREAT-WEST LIFE &

ANNUITY INSURANCE COMPANY)

  

By its authorized officer,

   
  

By:

   

/s/ Ron Laeyendecker

   
  

Name:

   

Ron Laeyendecker

   
  

Title:

   

Senior Vice President

   

 

2

JPMORGAN INSURANCE TRUST

By its authorized officer,

By:

  

/s/ Julie A Roach

Name:

  

Julie A Roach

Title:

  

Assistant Treasurer

JPMORGAN INVESTMENT MANAGEMENT, INC.

By its authorized officer,

By:

  

/s/ Robert L. Young

Name:

  

Robert L. Young

Title:

  

Managing Director

JPMORGAN FUNDS MANAGEMENT, INC.

By its authorized officer,

By:

  

/s/ Susan S. Montgomery

Name:

  

Susan S. Montgomery

Title:

  

President

 

3

SCHEDULE A

SEPARATE ACCOUNTS AND CONTRACTS

 

Name of Separate Account   

Contract and Form Number

Funded by Separate Account

Variable Annuity-1 Series Account of Great-West Life & Annuity Insurance Company

   

Select J434

OneSource J444

OneSource Choice J465

Advisor Choice J466

Variable Annuity-1 Series Account of Great-West Life & Annuity Insurance Company of New York

   

Select J434NY

OneSource J444NY

OneSource Choice J465NY

Advisor Choice J466NY

Variable Annuity-2 Series Account of Great-West Life & Annuity Insurance Company

   

Smart Track J555

Smart Track II J777

[         ] J888

Variable Annuity-2 Series Account of Great-West Life & Annuity Insurance Company of New York

   

Smart Track J555NY

Smart Track II J777NY

[        ] J888NY

   

COLI VUL 2 Series Account

   

J355

COLI VUL-2 Series Account of Great-West Life & Annuity Insurance Company of New York

   

J355NY

COLI VUL-4 Series Account of Great-West Life & Annuity Insurance Company

   

J500

COLI VUL-7 Series Account of Great-West Life & Annuity Insurance Company

   

PPVUL

COLI VUL-1 Series Account of Great-West Life & Annuity Insurance Company of New York

   

PPVULNY

FutureFunds Series Account of Great-West Life & Annuity Insurance Company

   

FutureFunds

FutureFunds Select

SCHEDULE B

All Class 1 and Class 2 portfolios of the JPMorgan Insurance Trust.

EX-99.(H)(89) 45 d694125dex99h89.htm EX-99.(H)(89) EX-99.(H)(89)

FUND PARTICIPATION AGREEMENT

THIS FUND PARTICIPATION AGREEMENT (“Agreement”) made as of the 8 day of September, 2011, by and between Lord Abbett Series Fund, Inc. (the “Fund”) a Maryland Corporation, on its behalf and on behalf of each separate investment series thereof, whether existing as of the date above or established subsequent thereto, (each a “Portfolio”) and collectively, the “Portfolios”) Lord Abbett Distributor LLC, a New York limited liability company (the “Distributor”), Great-West Life & Annuity Insurance Company (“Great-West”), a life insurance company organized under the laws of the State of Colorado, on behalf of itself and its separate account listed on attached Schedule A, and First Great-West Life & Annuity Company (“First Great-West”), a life insurance company organized under the laws of the State of New York, on behalf of itself and its separate account listed on attached Schedule A (collectively the “Company

WHEREAS, the Fund is registered with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940, as amended (the “ ‘40 Act”) as an open-end, diversified management investment company; and

WHEREAS, the Fund is organized as a series fund comprised of separate investment series, namely the Portfolios; and

WHEREAS, the Fund was organized to act as the funding vehicle for certain variable life insurance and/or variable annuity contracts offered by life insurance companies through separate accounts of such life insurance companies and also offers its shares to certain qualified pension and retirement plans; and

WHEREAS, the Fund has filed an application with the SEC requesting an order granting relief from various provisions of the ‘40 Act and the rules thereunder to the extent necessary to permit Fund shares to be sold to and held by variable annuity and variable life insurance separate accounts of both affiliated and unaffiliated participating insurance companies accounts (“Participating Companies”) and qualified pension and retirement plans outside the separate account context (including, without limitation, those trusts, plans, accounts, contracts or annuities described in Sections 401(a), 403(a), 403(b), 408(a), 408(b), 414(d), 457(b), 408(k), 501(c)(18) of the Internal Revenue Code of 1986, as amended (the “Code”) and any other trust, plan, account, contract or annuity trust that is determined to be within the scope of Treasury Regulation §1.817.5(f)(3)(iii) (“Plans”); and

WHEREAS, the Company has established or will establish one or more designated separate accounts (“Separate Accounts”) to offer certain unregistered variable life contracts (“Variable Contracts”) and is desirous of having the Fund as one of the underlying funding vehicles for such Variable Contracts; and

WHEREAS, the Distributor is registered with the SEC as a broker-dealer under the Securities Exchange Act of 1934 as amended (the “ ‘34 Act”) and acts as the Fund’s principal underwriter; and

 

WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Company intends to purchase shares of the Fund to fund the aforementioned Variable Contracts and the Fund is authorized to sell such shares to the Company at NAV; and

WHEREAS, the Company intends to utilize its NSCC member broker/dealer affiliate, GWFS Equities, Inc. which is and at all times shall remain, duly registered with the SEC as a broker-dealer under the 1934 Act and a member of the FINRA, to transmit instructions for the purchase, redemption and transfer of Fund shares on behalf of the Separate Accounts, and alone, or with the assistance of a recordkeeping affiliate, to perform certain recordkeeping functions associated with the transfer of Fund shares into and out of the Separate Accounts in order to recognize certain organizational economies.

NOW, THEREFORE, in consideration of their mutual promises, the Company, the Fund, and the Distributor agree as follows:

Article I. Sale of Fund Shares

1.1    The Fund agrees to make Variable Contract Class shares (“Shares”) of the Fund available to the designated Separate Accounts of the Company for the investment of purchase payments of Variable Contracts allocated to the designated Separate Accounts as provided in the Fund’s then current prospectus and statement of additional information. The Company agrees to purchase and redeem the Shares of the Portfolios offered by the then current prospectus and statement of additional information of the Fund in accordance with the provisions of such prospectus and statement of additional information. The Company shall not permit any person other than a Variable Contract owner (“Owner”) to give instructions to the Company which would require the Company to redeem or exchange Shares.

1.2    The Fund agrees to sell to the Company those Shares which the Company orders, executing such orders on a daily basis at the net asset value (“NAV”) next computed after receipt by the Fund or its designee of the order for the Shares. For purposes of this Section 1.2, the Company shall be the designee of the Fund for receipt of such orders from the designated Separate Account and receipt by such designee shall constitute receipt by the Fund; provided, to the extent not inconsistent with regulatory requirements, that the Company receives the order by 4:00 p.m. Eastern time and the Fund receives notice from the Company through the NSCC, by telephone, e-mail or facsimile (in each case, orally confirmed) or by such other means as the Fund and the Company may mutually agree of such order by 9:00 a.m. Eastern time on the next following Business Day. “Business Day” shall mean any day on which the New York Stock Exchange is open for trading and on which the Fund calculates its NAV pursuant to the rules of the SEC.

1.3    The Fund agrees to redeem on the Company’s request, any full or fractional Shares held by the Company, executing such requests on a daily basis at the NAV next computed after receipt by the Fund or its designee of the request for redemption, in accordance with the provisions of this agreement and the Fund’s then current registration statement. For purposes of this Section 1.3, the Company shall be the designee of the Fund for receipt of requests for redemption from the designated Separate Account and receipt by such designee shall constitute receipt by the Fund; provided, to the extent not inconsistent with regulatory requirements, that the Company receives the request for redemption by 4:00 p.m. Eastern time and the Fund receives notice from the Company through the NSCC, by telephone, e-mail or facsimile (in each case,

 

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orally confirmed) or by such other means as the Fund and the Company may mutually agree of such request for redemption by 9:00 a.m. Eastern time on the next following Business Day.

1.4    The Fund shall furnish, on or before the ex-dividend date, notice to the Company of any income dividends or capital gain distributions payable on the Shares of any Portfolios of the Fund. The Company hereby elects to receive all such income dividends and capital gain distributions as are payable on a Portfolio’s Shares in additional Shares of the Portfolio. The Fund shall notify the Company or its designee of the number of Shares so issued as payment of such dividends and distributions.

1.5    The Fund shall make the NAV per share for the selected Portfolios available to the Company on a daily basis, via the NSCC and/or a mutually agreeable form, as soon as reasonably practicable after the NAV per share is calculated but shall use its best efforts to make such NAV available by 6:30 p.m. Eastern time.

1.6    At the end of each Business Day, the Company shall use the information described in Section 1.5 to calculate designated Separate Account unit values for the day. Using these unit values, the Company shall process each such Business Day’s Separate Account transactions based on requests and premiums received by it by the close of trading on the floor of the New York Stock Exchange (currently 4:00 p.m. Eastern time) to determine the net dollar amount of Shares which shall be purchased or redeemed at that day’s closing NAV per share. To the extent not inconsistent with regulatory requirements, the net purchase or redemption orders so determined shall be transmitted to the Fund by the Company by 9:00 a.m. Eastern time on the Business Day next following the Company’s receipt of such requests and premiums in accordance with the terms of Sections 1.2 and 1.3 hereof.

1.7    If the Company’s order requests the purchase of Fund Shares, the Company shall pay for such purchase in accordance with NSCC rules and procedures or by wiring federal funds to the Fund or its designated custodial account on the day the order is transmitted by the Company. If the Company’s order requests a net redemption resulting in a payment of redemption proceeds to the Company, the Fund shall settle such redemptions in accordance with NSCC rules and procedures or use its best efforts to wire the redemption proceeds to the Company by the next Business Day,

1.8    The Fund agrees that all Shares will be sold only to Participating Insurance Companies which have agreed to participate in the Fund to fund their Separate Accounts and/or to Plans, all in accordance with the requirements of Section 817(h) of the Code and Treasury Regulation §1.817-5. Shares will not be sold directly to the general public.

1.9    The Fund may refuse to sell Shares of any Portfolios to any person, or suspend or terminate the offering of the Shares of any Portfolios if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Board of Directors/Trustees of the Fund (the “Board”), deemed necessary, desirable or appropriate. Without limiting the foregoing, it has been determined that there is a significant risk that the Fund and its shareholders may be adversely affected by short-term or excessive trading activity, particularly activity used to try and take advantage of short-term swings in the market. Accordingly, the Fund reserves the right to reject any purchase order, including those purchase orders with respect to shareholders or accounts whose trading has been or may be disruptive to the Fund or that may otherwise adversely affect the Fund. The Company agrees to use its reasonable

 

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best efforts to render assistance to, and to cooperate with, the Fund to achieve compliance with the Fund’s policies and restrictions on short-term or excessive trading activity as they may be amended from time to time, or to the extent required by applicable regulatory requirements.

1.10    Issuance and transfer of Portfolio Shares will be by book entry only. Stock certificates will not be issued to the Company or the Separate Accounts. Shares ordered from Portfolios will be recorded in appropriate book entry titles for the Separate Accounts.

Article II. Owner Transaction Information

The parties or their relevant affiliates agree to maintain an agreement pursuant to Rule 22c-2 of the ‘40 Act pertaining to the transactions covered by this Agreement.

Article III. Fees and Expenses

3.1    Except as otherwise provided under this Agreement, the Fund and the Distributor shall pay no fee or other compensation to the Company under this Agreement, and the Company shall pay no fee or other compensation to the Fund or the Distributor, except as made a part of this Agreement as it may be amended from time to time with the mutual consent of the parties hereto. All expenses incident to performance by each party of its respective duties under this Agreement shall be paid by that party, unless otherwise specified in Schedule B of this Agreement.

Article IV. Representations and Warranties

4.1    Great-West represents and warrants that it is an insurance company duly organized and in good standing under the laws of Colorado and that it has legally and validly established each respective designated Separate Account as a segregated asset account under such laws. First Great-West represents and warrants that it is an insurance company duly organized and in good standing under the laws of New York and that it has legally and validly established each respective designated Separate Account as a segregated asset account under such laws.

4.2    The Company represents and warrants that the income, gains and losses, whether or not realized, from assets allocated to each respective designated Separate Account are, in accordance with the applicable Variable Contracts, to be credited to or charged against such Separate Account without regard to other respective income, gains or losses from assets allocated to any other accounts of the Company. The Company represents and warrants that the assets of each designated Separate Account are and will be kept separate from the Company’s General Account and any other separate accounts the Company may have, and will not be charged with liabilities from any business the Company may conduct or the liabilities of any companies affiliated with the Company.

4.3    The Company represents and warrants that the Variable Contracts will be registered under the Securities Act of 1933 (the “ ‘33 Act”) unless an exemption from registration is available prior to any issuance or sale of the Variable Contracts and that the Variable Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and further that the sale of the Variable Contracts shall comply in all material respects with state insurance law suitability requirements. The Company agrees to notify the Fund promptly of any investment restrictions imposed by state insurance law applicable to the Fund.

 

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4.4    The Company represents and warrants that the Variable Contracts are currently and at the time of issuance will be treated as life insurance, endowment or annuity contracts under applicable provisions of the Code, that it will maintain such treatment and that it will notify the Fund immediately upon having a reasonable basis for believing that the Variable Contracts have ceased to be so treated or that they might not be so treated in the future.

4.5    The Fund represents and warrants that the Portfolio Shares offered and sold pursuant to this Agreement will be registered under the ‘33 Act and sold in accordance with all applicable federal and state laws, and the Fund shall be registered under the ‘40 Act prior to and at the time of any issuance or sale of such Shares. The Fund shall amend its registration statement under the ‘33 Act and the ‘40 Act from time to time as required in order to effect the continuous offering of its Shares. The Fund shall register and qualify its Shares for sale in accordance with the laws of the various states only if and to the extent deemed advisable by the Fund.

4.6    The Fund represents and warrants that each Portfolio will comply with the diversification requirements set forth in Section 817(h) of the Code, and the rules and regulations thereunder, including without limitation Treasury Regulation §1.817-5, and will notify the Company immediately upon having a reasonable basis for believing any Portfolio has ceased to comply or might not so comply and will immediately take all reasonable steps to adequately diversify the Portfolio to achieve compliance.

4.7    The Fund represents and warrants that each Portfolio invested in by a Separate Account intends to elect to be treated as a “regulated investment company” under Subchapter M of the Code, and to qualify for such treatment for each taxable year and will notify the Company immediately upon having a reasonable basis for believing it has ceased to so qualify or might not so qualify in the future.

4.8    The Fund represents and warrants that it is lawfully organized and validly existing under the laws of its state of organization and that it does and will comply in all material respects with applicable provisions of the ’40 Act.

4.9    The Distributor represents and warrants that it is and will be a member in good standing of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and is and will be registered as a broker-dealer with the SEC. The Distributor further represents that it will sell and distribute Portfolio Shares in accordance with all applicable state and federal laws and regulations, including without limitation the ‘33 Act, the ‘34 Act and the ‘40 Act.

4.10    The Distributor represents and warrants that it will remain duly registered and licensed in all material respects under all applicable federal and state securities laws and shall perform its obligations hereunder in compliance in all material respects with any applicable state and federal laws.

4.11    The Fund represents and warrants that all its directors, trustees, officers, employees, and other individuals/entities who deal with the money and/or securities of the Fund are and shall continue to be at all times covered by a blanket fidelity bond or similar coverage for the benefit of the Fund in an amount not less than that required by Rule 17g-1 under the ‘40 Act. The aforesaid bond shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company. The Fund shall make all reasonable efforts to see that this bond or another bond containing these same provisions is always in effect, and each agrees to notify the

 

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Company in the event such coverage no longer applies.

4.12    To the extent required by Rule 17g-1 under the ‘40 Act, the Company represents and warrants that all of its employees and agents who deal with the money and/or securities of the Fund are and shall continue to be at all times covered by a blanket fidelity bond or similar coverage in an amount not less than that required to be maintained by entities subject to the requirements of Rule 17g-1 under the ‘40 Act. The aforesaid bond shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company. The Company shall make all reasonable efforts to see that this bond or another bond containing these same provisions is always in effect, and each agrees to notify the Fund in the event such coverage no longer applies.

4.13    The Fund will provide the Company with reasonably practicable advance notice of any material change affecting a Portfolio, including a material change in a Fund/Portfolio’s prospectus or statement of additional information, or a proxy solicitation involving a Fund/Portfolio, and will reasonably cooperate with the Company in implementing such change.

Article V. Prospectus and Proxy Statements

5.1    The Fund shall prepare and be responsible for filing with the SEC and any state regulators requiring such filing all shareholder reports, notices, proxy materials (or similar materials such as voting instruction solicitation materials), prospectuses and statements of additional information of the Fund.

5.2    At least annually, the Fund or its designee shall provide the Company, free of charge, with as many copies of the current prospectus for the Shares of the Portfolios as the Company may reasonably request for distribution to existing Owners whose Variable Contracts are funded by such Shares. The Fund or its designee shall provide the Company with as many more copies of the current prospectus for the Shares as the Company may reasonably request for distribution to prospective purchasers of Variable Contracts. If requested by the Company in lieu thereof, the Fund or its designee shall provide such documentation in a mutually agreeable form and such other assistance as is reasonably necessary in order for the parties hereto once a year (or more frequently if the prospectus for the Shares is supplemented or amended) to have the prospectus for the Variable Contracts and the prospectus for the Fund Shares and any other fund shares offered as investments for the Variable Contracts printed at the Company’s expense together in one document, provided however that the Company shall ensure that, except as expressly authorized in writing by the Fund, no alterations, edits or changes whatsoever are made to prospectuses or other Fund documentation after such documentation has been furnished to the Company or its designee, and the Company shall assume liability for any and all alterations, errors or other changes that occur to such prospectuses or other Fund documentation after any such document has been furnished to the Company or its designee.

5.3    The Fund shall provide the Company with copies of the Fund’s proxy statements, Fund reports to shareholders, and other Fund communications to shareholders in such quantity as the Company shall reasonably require for distributing to Owners. Alternatively and in lieu thereof, the Company may elect to print at its own expense any of the Fund’s proxy statements, Fund reports to shareholders, and other Fund communications to shareholders.

5.4    The Fund will provide the Company with at least one complete copy of all

 

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prospectuses, statements of additional information, annual and semi-annual reports, proxy statements, and all amendments or supplements to any of the above that relate to the Portfolios promptly after the filing of each such document with the SEC or other regulatory authority. Upon written request, the Company will provide the Fund with at least one complete copy of all prospectuses, statements of additional information, annual and semi-annual reports, proxy statements, and all amendments or supplements to any of the above that relate to a Separate Account promptly after the filing of each such document with the SEC or other regulatory authority.

Article VI. Sales Materials

6.1    The Company will furnish, or will cause to be furnished, to the Fund or the Distributor, each piece of sales literature or other promotional material in which the Fund, the Distributor or any affiliate thereof is named, at least ten (10) Business Days prior to its intended use. No such material shall be used unless the Fund or the Distributor approves such material in writing. Such approval shall be presumed given if notice to the contrary is not received by the Company within ten (10) Business Days after receipt by the Fund or the Distributor of such material.

6.2    The Fund or the Distributor will furnish, or will cause to be furnished, to the Company, each piece of sales literature or other promotional material in which the Company or its Separate Accounts are named, at least ten (10) Business Days prior to its intended use. No such material shall be used unless the Company approves such material. Such approval shall be presumed given if notice to the contrary is not received by the Fund or within ten (10) Business Days after receipt by the Company of such material.

6.3    Except with the permission of the Company, neither the Fund nor the Distributor shall give any information or make any representations on behalf of the Company or concerning the Company, the Separate Accounts, or the Variable Contracts other than the information or representations contained in the registration statement or prospectus for such Variable Contracts, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports of the Separate Accounts for distribution to Owners of such Variable Contracts, or in sales literature or other promotional material approved by the Company or its designee. Neither the Fund nor the Distributor shall give such information or make such representations or statements in a context that causes the information, representations or statements to be false or misleading.

6.4    Except with the permission of the Fund or the Distributor, neither the Company nor its affiliates or agents shall give any information or make any representations or statements on behalf of the Fund, the Distributor or any affiliate thereof or concerning the Fund, the Distributor or any affiliate thereof, other than the information or representations contained in the registration statements or prospectuses for the Fund, as such registration statements and prospectuses may be amended or supplemented from time to time, or in reports to shareholders or proxy statements for the Fund, or in sales literature or other promotional material approved by the Fund or the Distributor or designee thereof. Neither the Company nor its affiliates or agents shall give such information or make such representations or statements in a context that causes the information, representations or statements to be false or misleading.

6.5    For purposes of this Agreement, the phrase “sales literature or other promotional

 

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material” or words of similar import include, without limitation, advertisements (such as material published, or designed for use, in a newspaper, magazine or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures or other public media), sales literature (such as any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, or reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, shareholder reports and proxy materials, and any other material constituting sales literature or advertising under FINRA rules, the ‘40 Act or the ‘33 Act.

6.6    The Company agrees and acknowledges that the Company has no right, title or interest in the names and marks of the Fund and that all use of any designation comprised in whole or part or such names or marks under this Agreement shall inure to the benefit of the Fund and the Distributor. Except as provided in Section 6.1, the Company shall not use any such names or marks on its own behalf or on behalf of a Separate Account in connection with marketing the Variable Contracts without prior written consent of the Fund and the Distributor. Upon termination of this Agreement for any reason, the Company shall cease all use of any such names or marks relating to the subject matter contemplated herein.

6.7    The Fund and the Distributor agree and acknowledge that each has no right, title or interest in the names and marks of the Company, and that all use of any designation comprised in whole or part or such names or marks under this Agreement shall inure to the benefit of the Company. Except as provided in Section 6.3, the Fund and Distributor shall not use any such names or marks on its own behalf or on behalf of the Fund in connection with marketing the Fund without prior written consent of the Company. Upon termination of this Agreement for any reason, the Fund and Distributor shall cease all use of any such names or marks relating to the subject matter contemplated herein.

Article VII. Potential Conflicts

7.1    The parties acknowledge that the Fund has received an exemptive order from the SEC granting relief from various provisions of the ‘40 Act and the rules thereunder to the extent necessary to permit the Fund Shares to be sold to and held by variable annuity and variable life insurance separate accounts of Participating Companies and Plans. The terms of such exemptive order (the “Mixed and Shared Funding Exemptive Order”) require the Fund and each Participating Company and Plan to comply with conditions and undertakings substantially as provided in this Article. In the event of any inconsistencies between the terms of the Mixed and Shared Funding Exemptive Order and those provided for in this Article, the conditions and undertakings imposed by the Mixed and Shared Funding Exemptive Order shall govern this Agreement.

7.2    The Fund’s Board will monitor the Fund for the existence of any material irreconcilable conflict between and among the interests of the Owners of all Participating Companies and of Plan Participants and Plans investing in the Fund, and determine what action, if any, should be taken in response to such conflicts. An irreconcilable material conflict may arise for a variety of reasons, which may include: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling or any similar action by insurance, tax or

 

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securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of the Fund are being managed; (e) a difference in voting instructions given by variable annuity and variable life insurance contract Owners; (f) a decision by a Participating Insurance Company to disregard the voting instructions of Owners and (g) if applicable, a decision by a Plan to disregard the voting instructions of plan participants.

7.3    The Company will report any potential or existing conflicts to the Board. The Company will be obligated to assist the Board in carrying out its duties and responsibilities under the Mixed and Shared Funding Exemptive Order by providing the Board with all information reasonably necessary for the Board to consider any issues raised. The responsibility includes, but is not limited to, an obligation by the Company to inform the Board whenever it has determined to disregard Owners voting instructions.

7.4    If a majority of the Board, or a majority of its disinterested Board members, determines that a material irreconcilable conflict exists with regard to contract Owner investments in the Fund, the Board shall give prompt notice of the conflict and the implications thereof to all Participating Companies and Plans. If the Board determines that the Company is a relevant Participating Company or Plan with respect to said conflict, the Company shall at its sole cost and expense, and to the extent reasonably practicable (as determined by a majority of the disinterested Board members), take such action as is necessary to remedy or eliminate the irreconcilable material conflict. Such necessary action may include but shall not be limited to: (a) withdrawing the assets allocable to some or all of the Separate Accounts from the Fund or any Portfolio thereof and reinvesting those assets in a different investment medium, which may include another Portfolio of the Fund, or another investment company; (b) submitting the question as to whether such segregation should be implemented to a vote of all affected Owners and as appropriate, segregating the assets of any appropriate group (i.e., variable annuity or variable life insurance contract Owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected Owners the option of making such a change; and (c) establishing a new registered management investment company (or series thereof) or managed separate account. If a material irreconcilable conflict arises because of the Company’s decision to disregard Owner voting instructions, and that decision represents a minority position or would preclude a majority vote, the Company may be required, at the election of the Fund to withdraw the Separate Account’s investment in the Fund, and no charge or penalty will be imposed as a result of such withdrawal. The responsibility to take such remedial action shall be carried out with a view only to the interests of the Owners. For the purposes of this Article, a majority of the disinterested members of the Board shall determine whether or not any proposed action adequately remedies any irreconcilable material conflict but in no event will the Fund or its investment adviser (or any other investment adviser of the Fund) be required to establish a new funding medium for any Variable Contract. Further, the Company shall not be required by this Article to establish a new funding medium for any Variable Contracts if any offer to do so has been declined by a vote of a majority of Owners materially and adversely affected by the irreconcilable material conflict.

7.5    The Board’s determination of the existence of an irreconcilable material conflict and its implications shall be made known promptly and in writing to the Company.

7.6    No less than annually, the Company shall submit to the Board such reports, materials or data as the Board may reasonably request so that the Board may fully carry out its

 

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obligations. Such reports, materials, and data shall be submitted more frequently if deemed appropriate by the Board.

7.7    If and to the extent that the SEC promulgates new rules or regulations with respect to mixed or shared funding on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies as appropriate, shall take such steps as may be necessary to comply with such rules and regulations, as adopted, to the extent such rules are applicable; and (b) this Article VI shall be deemed to incorporate such new terms and conditions, and any term or condition of this Article VI that is inconsistent therewith, shall be deemed to be succeeded thereby.

7.8    The Company acknowledges it has been advised by the Fund that it may be appropriate for the Company to disclose the potential risks of mixed and shared funding in prospectuses or other applicable disclosure documents.

Article VIII. Voting

8.1    The Company will provide pass-through voting privileges to all Owners so long as the SEC continues to interpret the ‘40 Act as requiring pass-through voting privileges for Owners. Accordingly, the Company, where applicable, will vote Shares of the Portfolio held in its Separate Accounts in a manner consistent with voting instructions timely received from its Owners. The Company will vote Shares for which it has not received timely voting instructions, as well as Shares it owns, in the same proportion as its votes those Shares for which it has received voting instructions. The Company and its agents shall not oppose or interfere with the solicitation of proxies for Fund Shares held for such Owners.

Article IX. Indemnification

9.1    Indemnification by the Company. (a) Subject to Section 9.3 below, the Company agrees to indemnify and hold harmless the Fund and the Distributor, and each of their trustees, directors, members, principals, officers, partners, employees and agents and each person, if any, who controls the Fund or the Distributor within the meaning of Section 15 of the ‘33 Act (collectively, the “Indemnified Parties” for purposes of this Article) against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the written consent of the Company, which consent shall not be unreasonably withheld) or litigation (including legal and other expenses), to which the Indemnified Parties may become subject under any statute, regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of Shares or the Variable Contracts and:

(i)    arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or prospectus for the Variable Contracts or contained in the Variable Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished to the Company by or on behalf of an Indemnified Party for use in the registration statement or prospectus for the Variable Contracts or in the

 

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Variable Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Variable Contracts or Fund Shares; or

(ii)    arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature of the Fund not supplied by the Company, or persons under its control) or wrongful conduct of the Company or persons under its control, with respect to the sale or distribution of the Variable Contracts or Fund Shares; or

(iii)    arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, or sales literature of the Fund or any amendment thereof or supplement thereto or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished to the Fund by or on behalf of the Company; or

(iv)    arise as a result of any failure by the Company to provide the services and furnish the materials under the terms of this Agreement; or

(v)    arise out of information or instructions from the Company or its agents concerning the purchase, redemption, transfer or other transaction in Fund Shares, to the extent that such information is relied upon or such instructions are followed by the Fund and/or the Distributor; or

(vi)    arise out of or result from any material breach of any representation and/or warranty made by the Company in this Agreement or arise out of or result from any other material breach of this Agreement by the Company.

(b)    The Company shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation incurred or assessed against an Indemnified Party as such may arise from such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement.

(c)    The Company shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Company in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Company of any such claim shall not relieve the Company from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision. In case any such action is brought against an Indemnified Party, the Company shall be entitled to participate at its own expense in the defense of such action. The Company also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Company to such party of the Company’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Company will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

 

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9.2    Indemnification by the Fund and the Distributor. (a) Subject to Section 9.3 below, the Fund and the Distributor agree to indemnify and hold harmless the Company and each of its directors, officers, employees, and agents and each person, if any, who controls the Company within the meaning of Section 15 of the ‘33 Act (collectively, the “Indemnified Parties” for the purposes of this Article) against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the written consent of the Fund and the Distributor which consent shall not be unreasonably withheld) or litigation (including legal and other expenses) to which the Indemnified Parties may become subject under any statute, or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund’s Shares or the Variable Contracts and:

(i)    arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus of the Fund (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished to the Fund or the Distributor by or on behalf of the Company for use in the registration statement or prospectus for the Fund (or any amendment or supplement) or otherwise for use in connection with the sale of the Variable Contracts or Shares; or

(ii)    arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature for the Variable Contracts not supplied by the Fund or the Distributor or persons under its control) or wrongful conduct of the Fund or the Distributor or persons under its control, with respect to the sale or distribution of the Variable Contracts or Shares; or

(iii)    arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement or prospectus covering the Variable Contracts, or any amendment thereof or supplement thereto or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished to the Company for inclusion therein by or on behalf of the Fund or the Distributor; or

(iv)    arise as a result of a failure by the Fund or the Distributor to provide the services and furnish the materials under the terms of this Agreement, including the failure to execute or properly execute any redemption, transfer or other transaction in Fund Shares; or

(v)    arise out of or result from any material breach of any representation and/or warranty made by the Fund or the Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund or the Distributor.

(b)    Neither the Fund nor the Distributor shall be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful

 

12

misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations and duties under this Agreement.

(c)    The Fund or the Distributor, as the case may be, shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Fund or the Distributor, as the case may be, in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Fund or the Distributor of any such claim shall not relieve the Fund or the Distributor from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision. In case any such action is brought against the Indemnified Parties, the Fund or the Distributor shall be entitled to participate at its own expense in the defense thereof. The Fund or the Distributor also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Fund or the Distributor to such party of the Fund’s or the Distributor’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Fund or the Distributor will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

9.3    Indemnification for Errors. In the event of any error or delay with respect to information regarding the calculation of the NAV, purchase, redemption, transfer or registration of Shares of the Fund, the parties agree that each is obligated to make the Separate Accounts and/or the Fund, respectively, whole for any error or delay that it causes, subject in the case of pricing errors to the related Portfolio’s policies on materiality of pricing errors. In addition, each party agrees to compensate the other party for any reasonable cost of reprocessing and/or adjustments to an Owner’s account and or a Fund/Portfolio, as applicable, provided however the minimum and maximum amounts that would be payable by either party for any such reprocessing and/or adjustment costs (not including amounts to make Owners - Fund/Portfolio whole) are $250 and $8,000, respectively. In the event that an Owner receives less than his proportionate, indirect ownership interest in a Portfolio from a related purchase, redemption or exchange due to the error of the Company or any affiliate, the Company shall solely be responsible for compensating the Owner. Each party agrees to provide the other with prompt notice of any errors or delays of the type referred to in this Section.

Article X. Term; Termination

10.1    This Agreement shall be effective as of the date hereof and shall continue in force until terminated in accordance with the provisions herein.

10.2    This Agreement shall terminate in accordance with the following provisions:

(a)    At the option of the Company or the Fund at any time from the date hereof upon ninety (90) days notice, unless a shorter time is agreed to by the parties;

(b)    At the option of the Company, if Fund Shares are not reasonably available to meet

 

13

the requirements of the Variable Contracts as determined by the Company. Prompt notice of election to terminate shall be furnished by the Company, said termination to be effective ten days after receipt of notice unless the Fund makes available a sufficient number of Shares to reasonably meet the requirements of the Variable Contracts within said ten-day period;

(c)    At the option of the Company, upon the institution of formal proceedings against the Fund by the SEC, FINRA, or any other regulatory body, the expected or anticipated ruling, judgment or outcome of which would, in the Company’s reasonable judgment, materially impair the Fund’s ability to meet and perform the Fund’s obligations and duties hereunder. Prompt notice of election to terminate shall be furnished by the Company with said termination to be effective upon receipt of notice;

(d)    At the option of the Fund, upon the institution of formal proceedings against the Company by the SEC, FINRA, or any other regulatory body, the expected or anticipated ruling, judgment or outcome of which would, in the Fund’s reasonable judgment, materially impair the Company’s ability to meet and perform its obligations and duties hereunder. Prompt notice of election to terminate shall be furnished by the Fund with said termination to be effective upon receipt of notice;

(e)    In the event the Fund’s Shares are not registered, issued or sold in accordance with applicable state or federal law, or such law precludes the use of such Shares as the underlying investment medium of Variable Contracts issued or to be issued by the Company. Termination shall be effective upon such occurrence without notice;

(f)    At the option of the Fund if the Variable Contracts cease to qualify as annuity contracts or life insurance contracts, as applicable, under the Code, or if the Fund reasonably believes that the Variable Contracts may fail to so qualify. Termination shall be effective upon receipt of notice by the Company;

(g)    At the option of the Company, upon the Fund’s breach of any material provision of this Agreement, which breach has not been cured to the satisfaction of the Company within ten days after written notice of such breach is delivered to the Fund;

(h)    At the option of the Fund, upon the Company’s breach of any material provision of this Agreement, which breach has not been cured to the satisfaction of the Fund within ten days after written notice of such breach is delivered to the Company;

(i)    At the option of the Fund, if the Variable Contracts are not registered, issued or sold in accordance with applicable federal and/or state law. Termination shall be effective immediately upon such occurrence without notice; and

(j)    In the event this Agreement is assigned without the prior written consent of the Company, the Fund, and the Distributor, termination shall be effective immediately upon such occurrence without notice.

10.3    Notwithstanding any termination of this Agreement pursuant to Section 10.2 hereof, the Fund at the option of the Company will continue for a period of six (6) months following termination to make available additional Fund Shares, as provided below, pursuant to the terms and conditions of this Agreement, for all Variable Contracts in effect on the effective

 

14

date of termination of this Agreement (hereinafter referred to as “Existing Contracts”). Specifically, without limitation, the Owners of the Existing Contracts or the Company, whichever shall have legal authority to do so, shall be permitted to reallocate investments in the Fund, redeem investments in the Fund and/or invest in the Fund upon the payment of additional premiums under the Existing Contracts.

Article XI. Notices

11.1    Any notice hereunder shall be given by registered or certified mail return receipt requested to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party.

If to the Fund:

Lord Abbett Family of Funds

90 Hudson Street

Jersey City, NJ 07302

Attention: General Counsel

If to the Distributor:

Lord Abbett Distributor LLC

90 Hudson Street

Jersey City, NJ 07302

Attention: General Counsel

If to the Company:

Great-West Life & Annuity Insurance Company

8515 East Orchard Road

Greenwood Village, CO 80111

Attention: Ron Laeyendecker, Senior Vice President

Cc: Beverly Byrne, Chief Compliance Officer, Chief

Legal Counsel, Financial Services

First Great-West Life & Annuity Insurance Company

c/o Great-West Life & Annuity Insurance Company

8515 East Orchard Road

Greenwood Village, CO 80111

Attention: Ron Laeyendecker, Senior Vice President

Cc: Beverly Byrne, Chief Compliance Officer, Chief

Legal Counsel, Financial Services

Notice shall be deemed given on the date of receipt by the addressee as evidence by the return receipt.

Article XII. Miscellaneous

12.1    Privacy. Each party hereto acknowledges that, by reason of its performance under

 

15

this Agreement, it shall have access to, and shall receive from the other party (and its affiliates, partners and employees), the confidential information of the other party (and its affiliates, partners and employees), including but not limited to the “nonpublic personal information” of their consumers within the meaning of SEC Regulation S-P (collectively, “Confidential Information”). Each party shall hold all such Confidential Information in the strictest confidence and shall use such Confidential Information solely in connection with its performance under this Agreement and for the business purposes set forth in this Agreement. Under no circumstances may a party cause any Confidential Information of the other party to be disclosed to any third party or reused or redistributed without the other party’s prior written consent.

12.2    Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument.

12.3    Severability. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby.

12.4    Governing Law. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of Colorado. It shall also be subject to the provisions of the federal securities laws and the rules and regulations thereunder and to any orders of the SEC granting exemptive relief therefrom and the conditions of such orders.

12.5    Liability. This Agreement has been executed on behalf of the Fund by the undersigned officer of the Fund in his or her capacity as an officer of the Fund. The obligations of this Agreement shall be binding upon the assets and property of the Fund and each respective Portfolio thereof only and shall not be binding on any Director/Trustee, officer or shareholder of the Fund individually. In addition, notwithstanding any other provision of this Agreement, no Portfolio shall be liable for any loss, expense, fee, charge or liability of any kind relating to or arising from the actions or omissions of any other Portfolio or from the application of this Agreement to any other Portfolio. It is also understood that each of the Portfolios shall be deemed to be entering into a separate Agreement with the Company so that it is as if each of the Portfolios had signed a separate Agreement with the Company and that a single document is being signed simply to facilitate the execution and administration of the Agreement.

12.6    Inquiries and Investigations. Each party shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, FINRA and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby.

12.7    Subcontractors, Agents or Affiliates. The Company may hire or make arrangements for subcontractors, agents or affiliates to perform the services set forth in this Agreement. The Company shall provide the Fund with written notice of the names of any subcontractors or agents the Company hires or arranges to perform such services, and any specific operational requirements that arise as a result of such arrangement. The Company agrees that it is and will be responsible for the acts and omissions of its subcontractors, affiliates, and agents and that the indemnification provided by the Company in Section 9 of this Agreement shall be deemed to cover the acts and omissions of such subcontractors, affiliates, and agents to the same extent as if they were the acts or omissions of the Company.

 

16

12.8    Client Lists. The Company hereby consents to the Distributor’s, the Fund’s, or its investment adviser’s use or reference to the Company’s name in connection with any full, partial or representative list of clients.

12.9    Entire Agreement. This Agreement constitutes the entire agreement and understanding between the parties hereto and supersedes all prior agreement and understandings relating to the subject matter hereof.

12.10  Amendment, Waiver and Other Matters. Neither this Agreement, nor any provision hereof, may be amended, waived, modified or terminated in any manner except by a written instrument properly authorized and executed by all parties hereto. The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws.

IN WITNESS WHEREOF, the parties have caused their duly authorized officers to execute this Fund Participation Agreement as of the date and year first above written.

 

LORD ABBETT SERIES FUND, INC.

    

LORD ABBETT DISTRIBUTOR LLC

   

By: Lord, Abbett & Co. LLC, its

Managing Member

By:

  

/s/ Lawrence H. Kaplan

    

By:

  

/s/ Lawrence H. Kaplan

 

Lawrence H. Kaplan

      

Lawrence H. Kaplan

 

Vice President and Secretary

      

Member

 

GREAT-WEST LIFE & INSURANCE COMPANY

By:

  

/s/ Susan Gile

Name:

  

Susan Gile

Title:

  

V.P., Individual Markets

 

FIRST GREAT-WEST LIFE & INSURANCE COMPANY

By:

  

/s/ Ron Laeyendecker

Name:

  

Ron Laeyendecker

Title:

  

Senior Vice President

 

 

17

SCHEDULE A

Separate Accounts

COLI VUL 7 Series Account of Great-West

COLI VUL 1 Series Account of First Great-West

 

SCHEDULE B

Expenses

The Fund and/or Distributor, and GWL&A will coordinate the functions and pay the costs of completing these functions based upon an allocation of costs in the tables below.

 

       
Item    Function   

Party

Responsible for
Coordination

 

   

Party

Responsible
for Expense

 

       
Fund Prospectus    Printing of combined prospectuses, or compiling of electronic prospectus, if needed in the future    GWL&A    Fund or Distributor, as applicable
       
     Fund or Distributor shall supply GWL&A with such numbers of the Designated Portfolio(s) prospectus(es) as GWL&A shall reasonably request    GWL&A    Fund or Distributor, as applicable
       
     Distribution to New and In-force Clients    GWL&A    GWL&A
       
     Distribution to Prospective Clients    GWL&A    GWL&A
       
Fund Prospectus Update & Distribution    If Required by Fund or Distributor    Fund or Distributor    Fund or Distributor
       
     If Required by GWL&A    GWL&A    GWL&A
       
Fund SAI    Printing    Fund or Distributor    Fund or Distributor
       
     Distribution    GWL&A    GWL&A
       
Proxy Material for Fund:    Printing if proxy required by Law    Fund or Distributor    Fund or Distributor
       
     Distribution to Contract owners (including labor, if required) if proxy required by Law    GWL&A    Fund or Distributor
       
     Printing & distribution if required by GWL&A    GWL&A    GWL&A
       
Fund Annual & Semi- Annual Report    Printing of combined reports    GWL&A    Fund or Distributor
       
     Distribution    GWL&A    GWL&A
       
Other communication to New and Prospective Clients    If Required by Fund or Distributor    GWL&A    Fund or Distributor

 

       
     If Required by GWL&A    GWL&A    GWL&A
       
Item    Function   

Party

Responsible for Coordination

   

Party

Responsible for Expense

       
Other communication to in-force    Distribution (including labor and printing) if required by Fund or Distributor    GWL&A    Fund or Distributor
       
     Distribution (including labor and printing) if required by GWL&A    GWL&A    GWL&A
       
Errors in Share Price calculation    Cost of error to participants    GWL&A    In accordance with §9.3
       
     Cost of administrative work to correct error    GWL&A    In accordance with §9.3
       
Operations of the Fund    All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by the fund pursuant to any shareholder services plan    Fund or Distributor    Fund or Distributor

 

20

EX-99.(H)(90) 46 d694125dex99h90.htm EX-99.(H)(90) EX-99.(H)(90)

FIRST AMENDMENT TO PARTICIPATION AGREEMENT

THIS FIRST AMENDMENT TO FUND PARTICIPATION AGREEMENT (“Agreement”) made as of the 21th day of August, 2013, by and among Lord Abbett Series Fund, Inc. (the “Fund”) a Maryland Corporation, on its behalf and on behalf of each separate investment series thereof, whether existing as of the date above or established subsequent thereto, (each a “Portfolio”) and collectively, the “Portfolios”), Lord Abbett Distributor LLC, a New York limited liability company (the “Distributor”), Great-West Life & Annuity Insurance Company (“Great-West”), a life insurance company organized under the laws of the State of Colorado, on behalf of itself and its separate account listed on attached Schedule A, and Great-West Life & Annuity Insurance Company of New York, formerly known as First Great-West Life & Annuity Company (“Great-West of New York”), a life insurance company organized under the laws of the State of New York, on behalf of itself and its separate account listed on attached Schedule A (collectively the “Company”)

WHEREAS, the Company, the Fund and the Distributor are parties (the “Parties”) to a Participation Agreement dated September 8, 2011 (the “Agreement”); and

WHEREAS, the Parties desire to add a Separate Account to Schedule A of the Agreement.

NOW, THEREFORE, in consideration of their mutual promises, the Fund, the Distributor and the Company agree as follows:

 

  1.

All references to the “Separate Accounts” shall include the COLI VUL-14 Series Account of Great-West.

 

  2.

Schedule A is deleted in its entirety and replaced with the Schedule A attached hereto.

 

1

IN WITNESS WHEREOF, the parties have caused their duly authorized officers to execute this Amendment as of the date and year first above written.

 

LORD ABBETT SERIES FUND, INC.

By:

  

/s/ Lawrence H. Kaplan

Name:

  

Lawrence H. Kaplan

Title:

  

Vice President and Secretary

LORD ABBETT DISTRIBUTOR LLC, by

Lord, Abbett & Co. LLC, its Managing Member

By:

  

/s/ Lawrence H. Kaplan

Name:

  

Lawrence H. Kaplan

Title:

  

Member

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

By:

  

/s/ Susan Gile

Name:

  

Susan Gile

Title:

  

V.P. Individual Markets

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK

By:

  

/s/ Ron Laeyendecker

Name:

  

Ron Laeyendecker

Title:

  

Senior Vice President

 

 

2

SCHEDULE A

Separate Accounts

COLI VUL-7 Series Account of Great-West

COLI VUL-14 Series Account of Great-West

COLI VUL-1 Series Account of Great-West of New York

 

3

EX-99.(H)(91) 47 d694125dex99h91.htm EX-99.(H)(91) EX-99.(H)(91)

SECOND AMENDMENT TO FUND

PARTICIPATION AGREEMENT

*        *        *

This Second Amendment to Fund Participation Agreement (the “Amendment”) is entered into as of April 1, 2014, by and among Lord Abbett Series Fund, Inc. (the “Fund”), Lord Abbett Distributor LLC (the “Distributor”), Great-West Life & Annuity Insurance Company (“Great-West”) and Great-West Life & Annuity Insurance Company of New York (formerly First Great-West Life & Annuity) (“Great-West NY”) (Great West and Great West NY collectively referred to as “Company”) (each a “Party” and collectively the “Parties”).

WHEREAS, the Parties entered into a Fund Participation Agreement dated September 8, 2011 (the “Agreement”), as amended August 21, 2013, and the Parties now desire to amend the Agreement to add certain Separate Accounts that offer registered variable annuity contracts, and to provide for fee payments in connection the servicing connected therewith; and

WHEREAS, unless otherwise defined herein, capitalized terms used herein have the same meaning as in the Agreement.

NOW THEREFORE, in consideration of the promises and mutual covenants expressed herein, and pursuant to Section 12.10 of the Agreement, the Parties agree to amend the Agreement as follows:

1.   The fifth Recital of the Agreement is deleted in its entirety and replaced with the following new fifth Recital:

“WHEREAS, the Company has established or will establish one or more designated separate accounts (“Separate Accounts”) to offer certain registered variable annuity contracts (“VA Contracts”) and certain unregistered variable life contracts (“VL Contracts”) (VA Contracts and VL Contracts are collectively referred to as “Variable Contracts”) and is desirous of having the Fund as one of the underlying funding vehicles for such Variable Contracts; and”

2.   Schedule A to the Agreement is hereby deleted in its entirety and replaced with the attached new Schedule A.

3.   Section 3.1 of the Agreement is deleted in its entirety and replaced with the following new Section 3.1:

“3.1 The Fund shall pay the Company a shareholder service fee and an administrative service fee as set forth in the attached Schedule C of the Agreement. The Fund and the Distributor shall pay no other fee or compensation to the Company under this Agreement and the Company shall pay no fee or compensation to the Fund or the Distributor, except as made a part of this Agreement as it may be amended from time to time with the mutual consent of the Parties. All expenses incident to performance by each Party of its respective duties under this Agreement shall be paid by that Party, unless otherwise specified in Schedule B of this Agreement.”

3.   The attached new Schedule C is added to the Agreement.

4. In the event of any inconsistencies between the Agreement and the Amendment, the terms of the Amendment shall govern. All other terms and conditions of the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed as of the date first above written.

 

LORD ABBETT SERIES FUND, INC.

By:

  

/s/ Lawrence H. Kaplan

 

Lawrence H. Kaplan

 

Vice President and Secretary

LORD ABBETT DISTRIBUTOR LLC, BY ITS

MANAGING MEMBER, LORD, ABBETT &

CO. LLC

By:

  

/s/ Lawrence H. Kaplan

 

Lawrence H. Kaplan

 

Member

GREAT-WEST LIFE & ANNUITY

INSURANCE COMPANY

By:

  

/s/ Susan Gile

Name:

  

Susan Gile

Title:

  

V.P. Individual Markets

GREAT-WEST LIFE & ANNUITY

INSURANCE COMPANY OF NEW YORK

By:

  

/s/ Ron Laeyendecker

Name:

  

Ron Laeyendecker

Title:

  

Senior Vice President

(Schedule A to follow)

 

2

SCHEDULE A

SEPARATE ACCOUNTS

COLI VUL-7 Series Account of Great-West (VL Contracts)

COLI VUL-14 Series Account of Great-West (VL Contracts)

COLI VUL-1 Series Account of Great-West NY (VL Contracts)

Variable Annuity-1 Series Account of Great-West (VA Contracts)

Variable Annuity-2 Series Account of Great-West (VA Contracts)

Variable Annuity-1 Series Account of Great-West NY (VA Contracts)

Variable Annuity-2 Series Account of Great-West NY (VA Contracts)

(Schedule C to follow)

 

3

SCHEDULE C

VARIABLE CONTRACT FEES

The Fund shall pay the following fees to the Company in return for shareholder services and administrative (sub-accounting) services provided by Company relating shares of the Fund held in Variable Contracts Separate Accounts:

Shareholder Services Fee (non-Rule 12b-1): Annual rate of 0.25% of the average daily net asset value of shares of the Fund held by the Variable Contracts Separate Accounts.

Administrative Services Fee (sub-accounting fee): Annual rate of 0.10% of the average daily net asset value of shares of the Fund held by the Variable Contracts Separate Accounts. The above-referenced fees shall be calculated daily and paid quarterly. The average net value of shares of the Fund shall be calculated in accordance with the procedure set forth in the Fund’s current prospectus and statement of additional information. The Parties agree that the administrative services fee is for administrative services only and does not constitute payment in any manner for distribution services.

 

4

EX-99.(H)(92) 48 d694125dex99h92.htm EX-99.(H)(92) EX-99.(H)(92)

THIRD AMENDMENT TO FUND

PARTICIPATION AGREEMENT

*         *         *

This Third Amendment to Fund Participation Agreement (the “Amendment”) is entered into as of April 17, 2015, by and among Lord Abbett Series Fund, Inc. (the “Fund”), Lord Abbett Distributor LLC (the “Distributor”), Great-West Life & Annuity Insurance Company (“Great-West”) and Great-West Life & Annuity Insurance Company of New York (“Great-West NY”) (Great West and Great West NY collectively referred to as “Company”) (each a “Party” and collectively the “Parties”).

WHEREAS, the Parties entered into a Fund Participation Agreement dated September 8, 2011 (the “Agreement”), as amended, and the Parties now desire to amend the Agreement to add certain Separate Accounts that offer registered variable life insurance contracts; and

WHEREAS, unless otherwise defined herein, capitalized terms used herein have the same meaning as in the Agreement.

NOW THEREFORE, in consideration of the promises and mutual covenants expressed herein, and pursuant to Section 12.10 of the Agreement, the Parties agree to amend the Agreement as follows:

1. The fifth Recital of the Agreement is deleted in its entirety and replaced with the following new fifth Recital:

“WHEREAS, the Company has established or will establish one or more designated separate accounts (“Separate Accounts”) to offer certain registered variable annuity contracts (“VA Contracts”) and certain registered and unregistered variable life contracts (“VL Contracts”) (VA Contracts and VL Contracts are collectively referred to as “Variable Contracts”) and is desirous of having the Fund as one of the underlying funding vehicles for such Variable Contracts; and”

2. Schedule A to the Agreement is hereby deleted in its entirety and replaced with the attached new Schedule A.

3. In the event of any inconsistencies between the Agreement and the Amendment, the terms of the Amendment shall govern. All other terms and conditions of the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed as of the date first above written.

(Signature page to follow)

LORD ABBETT SERIES FUND, INC.
By:  

/s/ Lawrence H. Kaplan

 

Lawrence H. Kaplan

Vice President and Secretary

LORD ABBETT DISTRIBUTOR LLC, BY ITS

MANAGING MEMBER, LORD, ABBETT & CO. LLC

By:  

/s/ Lawrence H. Kaplan

  Lawrence H. Kaplan
  Member
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By:  

/s/ Susan Gile

Name:  

Susan Gile

Title:  

V.P. Individual Markets

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK
By:  

/s/ Ron Laeyendecker

Name:  

Ron Laeyendecker

Title:  

Senior Vice President

(Schedule A to follow)

 

2

SCHEDULE A

SEPARATE ACCOUNTS

COLI VUL-2 Series Account of Great-West (VL Contracts)

COLI VUL-4 Series Account of Great-West (VL Contracts)

COLI VUL-7 Series Account of Great-West (VL Contracts)

COLI VUL-14 Series Account of Great-West (VL Contracts)

COLI VUL-1 Series Account of Great-West NY (VL Contracts)

COLI VUL-2 Series Account of Great-West NY (VL Contracts)

Variable Annuity-1 Series Account of Great-West (VA Contracts)

Variable Annuity-2 Series Account of Great-West (VA Contracts)

Variable Annuity-1 Series Account of Great-West NY (VA Contracts)

Variable Annuity-2 Series Account of Great-West NY (VA Contracts)

 

3

EX-99.(H)(94) 49 d694125dex99h94.htm EX-99.(H)(94) EX-99.(H)(94)

AMENDMENT TO PARTICIPATION AGREEMENT

THIS AMENDMENT, made and entered into as of the first day of April, 2017, is to the Participation Agreement dated April 1, 2011, by and among Great-West Life & Annuity Insurance Company, Great-West Life & Annuity Insurance Company of New York (f/k/a First Great-West Life & Annuity Insurance Company), MFS Variable Insurance Trust, MFS Variable Insurance Trust II, and MFS Fund Distributors, Inc., as amended (the “Participation Agreement”).

WHEREAS, the parties desire to add to the Agreement MFS Variable Insurance Trust III (“Trust III”), an open-end management investment company and Delaware statutory trust for which MFD serves as principal underwriter;

NOW, THEREFORE, in consideration of their mutual promises, the Trusts, the Insurer, and MFD hereby agree as follows:

 

  1.

Trust III is hereby added as a party.

 

  2.

All references to “Trust(s)” now include, as the context may require, Trust III.

 

  3.

Article XIII, “Notices,” is hereby restated in its entirety as follows:

ARTICLE XI. Section 11.3 NOTICES

Any notice shall be sufficiently given when sent by registered or certified mail, overnight courier, email or facsimile to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party.

If to Insurer:

Great-West Life & Annuity Insurance Company

8515 East Orchard Road

Greenwood Village, CO 80111

Email:

Attn: Ron Laeyendecker, Senior Vice President

Pc: Ryan Logsdon | Associate General Counsel, Products & Corporate

Great-West Life & Annuity Insurance Company of New York

8515 East Orchard Road

Greenwood Village, CO 80111

Email:

Attn: Ron Laeyendecker, Senior Vice President

Pc: Ryan Logsdon | Associate General Counsel, Products & Corporate

If to Trusts:

MFS Variable Insurance Trust I, MFS Variable Insurance Trust II and MFS Variable Insurance Trust III

111 Huntington Avenue

Boston, Massachusetts 02199

email: DLGDSDealerSpt@MFS.com

Facsimile No.: (617) 954-5182

Attn: Ethan Corey, Assistant Secretary

If to MFD:

MFS Fund Distributors, Inc.

111 Huntington Avenue

Boston, Massachusetts 02199

email: DLGDSDealerSpt@MFS.com

Attn: General Counsel

5.    Schedule A is hereby deleted in its entirety and replaced with the Schedule A attached hereto.

Terms not otherwise defined herein have the definitions ascribed to them in the Participation Agreement. Except as expressly amended hereby, the Participation Agreement shall continue in full force and effect and unamended.

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to the Participation Agreement to be executed in its name and on its behalf by its duly authorized representative:

 

MFS VARIABLE INSURANCE TRUST
MFS VARIABLE INSURANCE TRUST II
MFS VARIABLE INSURANCE TRUST III		      

GREAT-WEST LIFE & ANNUITY INSURANCI COMPANY

By its authorized officer,

on behalf of their respective Portfolios      
By their authorized officer and not individually,        
By:  

/s/ Ethan Corey

                By:  

/s/ Susan Gile

Ethan Corey       Name: Susan Gile
Assistant Secretary/ Assistant Clerk       Title: VP - Individual Markets

MFS FUND DISTRIBUTORS, INC.

By its authorized officer,

       GREAT-WEST LIFE & ANNUITY INSURANCI COMPANY of New York
      By its authorized officer,
By:  

/s/ James A. Jessee

       By:  

/s/ Ron Laeyendecker

James A. Jessee       Name:   Ron Laeyendecker
President       Title:   Senior Vice President

SCHEDULE A

ACCOUNTS, POLICIES, AND PORTFOLIOS

SUBJECT TO THE PARTICIPATION AGREEMENT

Portfolios Applicable to Separate Accounts:

All Portfolios or series of shares of the Trusts that are available and open to new investors on or after the effective date of this Amendment

Share Class

All Share Classes available under the Trusts

Separate Accounts:

COLI VUL 2 of GWLA

COLI VUL 4 of GWLA

COLI VUL 7 of GWLA

COLI VUL 1 of FGWLA

COLI VUL 2 of FGWLA

COLI VUL 4 of FGW

EX-99.(H)(99) 50 d694125dex99h99.htm EX-99.(H)(99) EX-99.(H)(99)

EXECUTION VERSION

SECOND AMENDMENT TO PARTICIPATION AGREEMENT

THIS SECOND AMENDMENT TO PARTICIPATION AGREEMENT is made as of this 5th day of November, 2008, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”), FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“First GWL&A”), PIMCO VARIABLE INSURANCE TRUST (the “Trust”), PACIFIC INVESTMENT MANAGEMENT COMPANY LLC (the “Adviser”), and ALLIANZ GLOBAL INVESTORS DISTIBUTORS LLC (formerly known as PIMCO ADVISORS DISTRIBUTORS LLC) (the “Distributor), collectively the Parties. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Original Agreement (defined below).

RECITALS

WHEREAS, GWL&A, First GWL&A, the Trust, the Adviser and the Distributor are parties to a Fund Participation Agreement dated March 1, 2004 and amended August 31, 2007 (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to add additional separate Accounts not subject to registration under the 1933 Act or the 1940 Act; and

WHEREAS, The Parties desire and agree to amend the Agreement by deleting in its entirety Schedule A of the Agreement and replacing it with the Schedule A attached hereto.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

 

1.

All references to the “First GWL&A Account” now includes COLI VUL Series Account 1 (First GWL&A).

 

 

2.

All references to the “GWL&A Account” now include COLI VUL Series Account 7 (GWL&A).

 

 

3.

Schedule A of the Agreement is hereby replaced in its entirety with Schedule A as attached and incorporated by reference to this Amendment.

 

 

4.

Paragraph 2.1 is amended to add the following at the end of the paragraph: “if such registration is required.”

[Intentionally Left Blank]

(Signatures located on the following page)

 

1

EXECUTION VERSION

IN WITNESS WHEREOF, the Parties have executed this Amendment by their duly authorized officers as of the date and year first written above.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By its authorized officer,
By:  

/s/ Ron Laeyendecker

Name: Ron Laeyendecker
Title:   Senior Vice-President
Date:   11/13/08

FIRST GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By its authorized officer,
By:  

/s/ ROBERT K. SHAW

Name: ROBERT K. SHAW
Title:   Sr. VP
Date:   11/14/08

PIMCO VARIABLE INSURANCE TRUST

 

By its authorized officer,

 

       LOGO
By:  

/s/ Ernest L. Schmider

                

Name:

   Ernest L. Schmider   

Title:

   President   

Date:

     

 

2

EXECUTION VERSION

PACIFIC INVESTMENT MANAGEMENT COMPANY LLC

 

By its authorized officer,

 

      

LOGO

By:   

/s/ Ernest L. Schmider

                
Name:    Ernest L. Schmider   
Title:    Managing Director   
Date:      

ALLIANZ GLOBAL INVESTORS DISTRIBUTORS LLC

(formerly known as PIMCO ADVISORS DISTRIBUTORS LLC)

 

By its authorized officer,

 

      

LOGO

By:

  

    

   

            

Name:

     

Title:

  

Managing Director

   

Date:

  

12/5/08

   

 

3

EXECUTION VERSION

SCHEDULE A

 

Contract

    Form Number

COLI VUL-1 Series Account (First GWL&A)

    PPVUL NY

COLI VUL-2 Series Account (GWL&A)

    J355

COLI VUL-2 Series Account (First GWL&A)

    J355NY

COLI VUL-4 Series Account (GWL&A)

    J500

COLI VUL-4 Series Account (First GWL&A)

    J500NY

COLI VUL-7 Series Account (GWL&A)

    PPVUL

 

4

EX-99.(H)(100) 51 d694125dex99h100.htm EX-99.(H)(100) EX-99.(H)(100)

FUND PARTICIPATION AGREEMENT

Among

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK

PIONEER VARIABLE CONTRACTS TRUST

PIONEER INVESTMENT MANAGEMENT, INC.

AND

PIONEER FUNDS DISTRIBUTOR, INC.

THIS FUND PARTICIPATION AGREEMENT (the “Agreement”) is made and entered into as of this         day of                 , 2016 (the “Effective Date”) by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter “GWL&A”), a Colorado life insurance company, on its own behalf and on behalf of its separate account(s) listed on Schedule B attached hereto (the “GWL&A Account(s)”); GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK (hereinafter “GWL&ANY”), a New York life insurance company, on its own behalf and on behalf of its separate account(s) listed on Schedule B (the “GWL&ANY Account(s)”); (the GWL&A Account(s) and the GWL&ANY Account(s) may be referred to herein individually, or collectively as the “Accounts”) (GWL&A and GWL&ANY may be referred to herein individually, each as an “Insurance Party,” or collectively as the “Insurance Parties”); PIONEER VARIABLE CONTRACTS TRUST (hereinafter the “Fund”);, a trust _organized under the laws of Delaware; PIONEER INVESTMENT MANAGEMENT, INC. (hereinafter the “Adviser”), a corporation organized under the laws of Delaware; and PIONEER FUNDS DISTRIBUTOR, INC. (hereinafter the “Distributor”) a corporation organized under the laws of Massachusetts (each a “Party” and collectively the “Parties”).

WHEREAS, the Fund is registered as an open-end management investment company under the Investment Company Act of 1940 (the “1940 Act”) and its shares are registered under the Securities Act of 1933, as amended (hereinafter the “1933 Act”); and

WHEREAS, the Fund has obtained an order from the Securities and Exchange Commission (the “SEC”), dated July 9, 1997 (File No. 812-10494) (the “Mixed and Shared Funding Exemptive Order”) granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of Sections 9(a), 13(a), 15(a) and 15(b) of the 1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance companies that may or may not be affiliated with one another and qualified pension and retirement plans (“Qualified Plans”);

WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and

WHEREAS, the Distributor is duly registered as a broker-dealer under the Securities Exchange Act of 1934, as amended (the “1934 Act”) and is a member in good standing of the Financial Industry Regulatory Authority, Inc. (the “FINRA”); and

WHEREAS, the Insurance Parties have certain registered and unregistered variable annuity and variable life contracts supported wholly or partially by the Accounts (the “Contracts”) to be made available to owners thereof, including any participants or employees of such owners as applicable (“Contract Owners”); and

WHEREAS, to the extent required by applicable law, the Insurance Parties have registered the Account(s)as a unit investment trust under the 1940 Act unless excepted from registration pursuant to Section 3(c)(7) or Section 3(c)(11) of the 1940 Act, and have registered the securities deemed to be issued by the Account(s) under the 1933 Act unless exempt from registration; and

WHEREAS, the GWL&A Account(s) is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of GWL&A, under the insurance laws of the State of Colorado, to set aside and invest assets attributable to the GWL&A Contracts, and the GWL&ANY Account(s) is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of GWL&ANY, under the insurance laws of the State of New York, to set aside and invest assets attributable to the GWL&ANY Contracts; and

WHEREAS, to the extent permitted by applicable laws and regulations, GWL&A and GWL&ANY intend to purchase shares in the Fund(s) listed in Schedule A attached hereto and incorporated herein by reference, as such Schedule may be amended from time to time by mutual written agreement (the “Designated Portfolio(s)”), on behalf of their respective Accounts to fund the applicable Contracts, and the Fund is authorized to sell such shares to unregistered unit investment trusts such as the Accounts at net asset value; and

WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Accounts also intend to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the “Unaffiliated Funds”) on behalf of the Accounts to fund the Contracts; and

WHEREAS, GWL&A has arrangements with GWL&ANY to provide administrative services, including certain services related to certain performances contemplated herein by GWL&ANY; and

WHEREAS, GWL&A and GWL&ANY intend to utilize their NSCC member broker/dealer affiliate, GWFS Equities, Inc. (“GWFS”), which is and at all times shall remain, duly registered with the SEC as a broker-dealer under the 1934 Act and a member of the FINRA, to transmit instructions for the purchase, redemption and transfer of Fund shares on behalf of the Accounts, and alone, or with the assistance of a recordkeeping affiliate, to perform certain recordkeeping functions associated with the transfer of Fund shares into and out of the Accounts in order to recognize certain organizational economies; and

WHEREAS, the Parties intend for the following Agreement to supplant and supersede any and all prior executed agreements involving the Parties, their affiliates, Safeco Life & Investments, and/or Safeco Mutual Funds (or any similar derivation thereof) covering the same subject matter as described herein; and

NOW, THEREFORE, the Parties agree as follows:

ARTICLE I.            Sale of Fund Shares

1.1.        All purchases, redemptions and exchanges of Designated Portfolio shares for the Accounts, in addition to the pricing and correction thereof, of Designated Portfolio shares, shall be governed by and subject to the terms of the Trading and NSCC Fund/SERV Networking Agreement, by and between GWFS and Pioneer Funds Distributor, Inc., dated October 10, 2000, as amended from time to time.

 

GWLA GWLANY Fund Participation Agreement (rev 02-2016)    Page 2 of 26

1.2.        Notwithstanding Section 1.1 of this Agreement, if an adjustment is necessary to correct an error which has caused Contract owners to receive less than the amount to which they are entitled, the number of shares of the applicable sub-account of such Contract owners will be adjusted and the amount of any underpayments shall be credited by the Adviser or the fund to GWL&A and GWL&ANY for crediting of such amounts to the applicable Contract owners accounts. Upon notification by the Adviser of any overpayment due to an error, GWL&A or GWL&ANY, as applicable, shall promptly remit to Adviser or the Fund any overpayment that has not been paid to Contract owners; however, Adviser acknowledges that GWL&A or GWL&ANY, as applicable, does not intend to seek additional payments from any Contract owner who, because of a pricing error, may have underpaid for units of interest credited to his/her account. In no event will GWL&A or GWL&ANY be liable to Contract owners for any such adjustments or underpayment amounts, unless GWL&A or GWL&ANY is solely at fault, in which case such party shall bear such costs.

ARTICLE II.            Representations and Warranties

2.1.        GWL&A represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the GWL&A Account prior to any issuance or sale of units thereof as a segregated asset account under Colorado Law. GWL&ANY represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the GWL&ANY Account prior to any issuance or sale of units thereof as a segregated asset account under New York law.

2.2.        Each of the Insurance Parties represents and warrants that the Contracts are or will be registered under the 1933 Act or are exempt from or not subject to registration thereunder, and that the Contracts will be issued, sold, and distributed in compliance in all material respects with all applicable state and federal laws, including without limitation the 1933 Act, the 1934 Act, and the 1940 Act. GWL&A further represents and warrants that it (i) is an insurance company duly organized and in good standing under applicable law; (ii) has legally and validly established each Account as a segregated asset account under applicable law; (iii) has registered or, prior to any issuance or sale of the Contracts, will register the Accounts as unit investment trusts in accordance with the provisions of the 1940 Act (unless exempt therefrom) to serve as segregated investment accounts for the Contracts, and (iv) will maintain such registration for so long as any Contracts are outstanding. The Insurance Parties shall amend the registration statements under the 1933 Act for the Contracts and the registration statements under the 1940 Act for the Accounts from time to time as required in order to effect the continuous offering of the Contracts or as may otherwise be required by applicable law. The Insurance Parties shall register and qualify the Contracts for sales in accordance with the securities laws of the various states only if and to the extent deemed necessary by them. At the time the Insurance Parties are required to deliver the Fund’s prospectus or statement of additional information to a purchaser of Shares in accordance with the requirements of federal or state securities laws, the Insurance Parties shall distribute to such Contract purchasers the then current Fund prospectus, as supplemented.

2.3.        Each of the Insurance Parties represents and warrants that the Contracts are currently and at the time of issuance will be treated as life insurance, endowment or annuity contracts under applicable provisions of the Code, that it will maintain such treatment and that it will notify the Fund or the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future.

2.4.        Each of the Insurance Parties represents and warrants that GWFS, the underwriter for the individual variable annuity contracts and the variable life policies, is a member in good standing of FINRA and is a registered broker-dealer with the SEC. Each of the Insurance Parties represents and warrants that GWL&A, GWL&ANY and GWFS will sell and distribute such contracts and policies in accordance in all material respects with all applicable state and federal laws.

 

GWLA GWLANY Fund Participation Agreement (rev 02-2016)    Page 3 of 26

2.5.        The Fund represents and warrants that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares.

2.6.        The Fund and Adviser agree to comply with applicable provisions and SEC staff interpretations of the 1940 Act to assure that the investment advisory or management fees paid to the Adviser by the Fund are in accordance with the requirements of the 1940 Act. To the extent that the Fund finances distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its Board, a majority of whom are not interested persons of the Fund, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses.

2.7.        The Fund represents and warrants that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with the Fund’s Prospectus and any Applicable Law. The Fund and Distributor represent and warrant that they will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with all Applicable Law. The Fund and Distributor shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by Applicable Law. The Insurance Parties will endeavor to keep each other and the Adviser informed of any change in state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a “Law Change”). In the event of a Law Change, the Fund agrees that it may (in its sole discretion) take any action required by a Law Change.

2.8.        The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the State of Delaware and that it does and will comply in all material respects with the 1940 Act.

2.9.        The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of Delaware and any applicable state and federal securities laws.

2.10.    The Distributor represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the Commonwealth of Massachusetts and any applicable state and federal securities laws.

2.11.    The Fund and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by one or more blanket fidelity bonds or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to lime. The aforesaid bonds must include coverage for larceny and embezzlement and must be issued by a reputable bonding company.

2.12.    The Fund will provide the Insurance Parties with as much advance notice as is reasonably practicable of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated Portfolio(s) and consult with the Insurance Parties in order to implement any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expenses by implementing them in conjunction with regular annual updates of the prospectus for the Contracts. The Fund agrees to share equitably in expenses incurred by the Insurance Parties as a result

 

GWLA GWLANY Fund Participation Agreement (rev 02-2016)    Page 4 of 26

of actions taken by the Fund, consistent with the allocation of expenses contained in Schedule C attached hereto and incorporated herein by reference.

2.13.        No less frequently than annually, the Insurance Parties shall submit to the Board of Trustees of the Fund (the “Board”) such reports, material or data as the Board may reasonably request so that it may carry out fully the obligations imposed upon it by the conditions contained in the Mixed and Shared Funding Exemptive Order pursuant to which the SEC has granted exemptive relief to permit mixed and shared funding.

2.14.        Each of the Insurance Parties represents and warrants, for purposes other than diversification under Section 817 of the Code, that the Contracts are currently at the time of issuance and, assuming the Fund meets the requirements of Article VI, will be treated as annuity contracts under applicable provisions of the Code, and that it will make every effort to maintain such treatment and that it will notify the Fund, the Adviser, and the Distributor immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, each of the Insurance Parties represents and warrants that each Account is a “segregated asset account” and that interests in the Account are offered exclusively through the purchase of or transfer into a “variable contract” within the meaning of such terms under Section 817 of the Code and the regulations thereunder. The Insurance Parties will use every effort to continue to meet such definitional requirements and will notify the Fund, the Adviser, and the Distributor immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. Each of the Insurance Parties represents and warrants represents and warrants that it will not purchase Fund shares with assets derived from tax-qualified retirement plans except, indirectly, through Contracts purchased in connection with such plans.

ARTICLE III.            Prospectuses and Proxy Statements; Voting

3.1.        If applicable state or federal laws or regulations require that prospectuses for the Fund be distributed to all Contract owners, then at least annually, the Adviser or Distributor shall provide the Insurance Parties with as many copies of the Fund’s current prospectus for the Designated Portfolio(s) as the Insurance Parties may reasonably request for marketing purposes (including distribution to Contract owners with respect to new sales of a Contract), with expenses to be borne in accordance with Schedule C. If requested by the Insurance Parties in lieu thereof, the Adviser, Distributor or Fund shall provide such documentation (including a camera-ready copy and computer diskette of the current prospectus for the Designated Portfolio(s)) and other assistance as is reasonably necessary in order for the Insurance Parties once each year (or more frequently if the prospectuses for the Designated Portfolio(s) are amended) to have the prospectus for the Contracts and the Fund’s prospectus for the Designated Portfolio(s) printed together in one document. The Fund and Adviser agree that in the future, the Insurance Parties may request that the prospectus (and semi-annual and annual reports) for the Designated Portfolio(s) describe only the Designated Portfolio(s) and not name or describe any other portfolios or series that may be in the Fund, unless required by law. Should the Insurance Parties determine that they will make the prospectuses available in an electronic format, the Fund, Adviser or Distributor, as applicable agree to assist the Insurance Parties in obtaining the required information from EDGAR and the expenses associated with this form of distribution will be borne in accordance with Schedule C.

3.2.        If applicable state or federal laws or regulations require that the Statement of Additional Information (“SAI”) for the Fund be distributed to all Contract owners, then the Fund, Distributor and/or the Adviser shall provide the Insurance Parties with copies of the Fund’s SAI or documentation thereof for the Designated Portfolio(s) in such quantities, with expenses to be borne in accordance with Schedule C, as the Insurance Parties may reasonably require to permit timely distribution thereof to Contract owners. The

 

GWLA GWLANY Fund Participation Agreement (rev 02-2016)    Page 5 of 26

Adviser and/or the Fund shall also provide SAIs to any Contract owner or prospective owner who requests such SAI from the Fund (although it is anticipated that such requests will be made to the Insurance Parties).

3.3.        The Fund, Distributor and/or Adviser shall provide the Insurance Parties with copies of the Fund’s proxy material, reports to stockholders and other communications to stockholders for the Designated Portfolio(s) in such quantity, with expenses to be borne in accordance with Schedule C, as the Insurance Parties may reasonably require to permit timely distribution thereof to Contract owners, as required by law.

3.4.        It is understood and agreed that, except with respect to information regarding an Insurance Party provided in writing by that Party, such Insurance Party is not responsible for the content of the prospectus or SAI for the Designated Portfolio(s).

3.5.        The Fund hereby notifies the Insurance Parties that it may be appropriate to include in the prospectus pursuant to which a Contract is offered disclosure regarding the potential risks of mixed and shared funding.

3.6.        If and to the extent required by law each Insurance Party shall:

 

  (i)

solicit voting instructions from Contractowners;

 

  (ii)

vote the Designated Portfolio(s) shares held in the Accounts in accordance with instructions received from Contractowners; and

 

  (iii)

vote Designated Portfolio shares held in the Accounts for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contractowners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. The Insurance Parties reserve the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law.

3.6.        The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders, and in particular the Fund will either provide for annual meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not to require such meetings) or, as the Fund currently intends, comply with Section 16(c) of the 1940 Act (although the Fund is not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in accordance with the SEC’s interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the Commission may promulgate with respect thereto.

ARTICLE IV.            Sales Material and Information

4.1.        The Insurance Parties shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that the Insurance Parties develop or propose to use and in which the Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers or the Distributor is named in connection with the Contracts, at least ten (10) Business Days prior to its use. No such material shall be used if the Fund objects to such use within five (5) Business Days after receipt of such material.

 

GWLA GWLANY Fund Participation Agreement (rev 02-2016)    Page 6 of 26

4.2.        The Insurance Parties shall not give any information or make any representations or statements on behalf of the Fund in connection with the sale of the Contracts other than the information or representations contained in the registration statement, prospectus or SAI for the Fund shares, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by the Fund, Distributor or Adviser, except with the permission of the Fund, Distributor or Adviser. The Fund, the Adviser, and the Distributor or their respective designees each agrees to respond to any request for approval on a prompt and timely basis. The Insurance Parties shall adopt and implement procedures reasonably designed to ensure that information concerning the Fund, the Adviser, and the Distributor or any of their affiliates which is intended for use only by brokers or agents selling the Contracts (i.e., information that is not intended for distribution to Contract owners or prospective Contract owners) is so used, and neither the Fund, the Adviser, and the Distributor nor any of their affiliates shall be liable for any losses, damages or expenses relating to the improper use of such broker only materials.

4.3.        The Fund, the Distributor or the Adviser shall furnish, or shall cause to be furnished, to The Insurance Parties, a copy of each piece of sales literature or other promotional material in which the Insurance Parties and/or their separate account(s) are named at least ten (10) Business Days prior to its use. No such material shall be used if the Insurance Parties object to such use within five (5) Business Days after receipt of such material.

4.4.        The Fund and the Adviser shall not give any information or make any representations on behalf of the Insurance Parties or concerning the Insurance Parties, the Accounts, or the Contracts other than the information or representations contained in the Contracts, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by the Insurance Parties or their designee, except with the permission of the Insurance Parties. The Insurance Parties or their respective designess agrees to respond to any request for approval on a prompt and timely basis. The parties hereto agree that this Section 4.4. is neither intended to designate nor otherwise imply that the Adviser is an underwriter or distributor of the Contracts.

4.5.        The Fund will provide to the Insurance Parties at least one complete copy of all registration statements, prospectuses, SAIs, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Designated Portfolio(s), contemporaneously with the filing of such document(s) with the SEC or FINRA or other regulatory authorities.

4.6.        The Insurance Parties will provide to the Fund at least one complete copy of all sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Accounts, contemporaneously with the filing of such document(s) with the SEC, FINRA, or other regulatory authority.

4.7.        For purposes of Articles IV and VII, the phrase “sales literature and other promotional material” includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as the Internet or other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and shareholder reports, and proxy materials (including solicitations for voting instructions) and any other material constituting sales literature or advertising under the FINRA rules, the 1933 Act or the 1940 Act.

 

GWLA GWLANY Fund Participation Agreement (rev 02-2016)    Page 7 of 26

4.8.        At the request of any Party to this Agreement, each other Party will make available to the other Party’s independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any Party’s obligations under this Agreement.

4.9        Subject to the terms of Sections 4.1 and 4.2 of this Agreement, the Fund (and its Portfolios), the Adviser and the Distributor hereby each consents in connection with the marketing of the Contracts to the Insurance Parties’ use of their names or other identifying marks, including PIONEER INVESTMENTS® and Pioneer’s sail logo, in connection with the marketing of the Contracts. The Fund, the Adviser, and the Distributor or their affiliates may withdraw this authorization as to any particular use of any such name or identifying mark at any time: (i) upon a reasonable determination that such use would have a material adverse effect on its reputation or marketing efforts or its affiliates or (ii) if any of the Portfolios of the Fund cease to be available through the Insurance Parties. Except as set forth in the previous sentence or as permitted under Sections 4.1 or 4.2 of this Agreement, the Company will not cause or permit, without prior written permission, the use, description or reference to a Pioneer party’s name, or to the relationship contemplated in this Agreement, in any advertisement, or promotional materials or activities, including without limitation, any advertisement or promotional materials published, distributed, or made available, or any activity conducted through, the Internet or any other electronic medium.

ARTICLE V.            Fees and Expenses

5.1.        The Fund and the Adviser will pay certain fees in accordance with Schedule D. In addition, the Parties will bear certain expenses in accordance with Schedule C, as well as Articles III and V of this Agreement.

5.2.        All expenses incident to performance by the Fund, Distributor and the Adviser under this Agreement shall be paid by the appropriate Party, as further provided in Schedule C. The Fund shall ensure that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent required, in accordance with applicable state laws prior to their sale.

5.3.        The Parties shall bear the expenses of routine annual distribution (mailing costs) of the Fund’s prospectus and distribution (mailing costs) of the Fund’s proxy materials and reports to owners of Contracts offered by the Insurance Parties, which may be required by law, in accordance with Schedule C.

5.4        The Fund, the Distributor and the Adviser acknowledge that a principal feature of the Contracts is the Contract owner’s ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract’s cash value between funds and portfolios. The Fund and the Adviser agree to cooperate with the Insurance Parties in facilitating the operation of the Accounts and the Contracts as described in the prospectus for the Contracts, including but not limited to cooperation in facilitating transfers between Unaffiliated Funds.

5.5.        The Insurance Parties agree to provide certain administrative services, specified in Schedule C attached hereto, in connection with the arrangements contemplated by this Agreement. The parties intend that the services referred to in the Section 5.4 be recordkeeping, shareholder communication, and other transaction facilitation and processing, and related administrative services and are not the services of an underwriter or principal underwriter of the Fund, and the Insurance Parties are not underwriters of Shares within the meaning of the 1933 Act.

 

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ARTICLE VI.            Diversification and Qualification

6.1.        The Fund, Distributor and Adviser represent and warrant that the Fund and each Designated Portfolio thereof will at all times invest money from the Contracts in such a manner as to ensure that the Contracts will be treated as variable contracts under the Code and the regulations issued thereunder. Without limiting the scope of the foregoing, the Fund will at all times comply with Section 817(h) of the Code and Treasury Regulation §1.817-5, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications to such Section or Regulations. In the event of a breach of this Article VII by the Fund, it will take all reasonable steps (a) to notify the Insurance Companies of such breach and (b) to adequately diversify the Fund so as to achieve compliance within the grace period afforded by Regulation § 1.817-5.

6.2.        The Fund, the Distributor and the Adviser represent and warrant that the Fund and each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Internal Revenue Code of 1986, as amended (hereinafter the “Code”), and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect.

6.3.        The Fund, Distributor or Adviser will notify the Insurance Parties promptly upon having a reasonable basis for believing that the Fund or any Designated Portfolio has ceased to comply with the aforesaid Subchapter M qualification requirements or might not so comply in the future.

6.4        Without in any way limiting the effect of Sections 7.2, 7.3 and 7.4 of this Agreement, and without in any way limiting or restricting any other remedies available to the Insurance Parties, the Adviser or Distributor will pay all costs associated with or arising out of any failure, or any anticipated or reasonably foreseeable failure, of the Fund or any Designated Portfolio to comply with Section 6.1, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed portfolio (including but not limited to an order pursuant to Section 26(c) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to the Insurance Parties and any federal income taxes or tax penalties and interest thereon (or “toll charges” or exactments or amounts paid in settlement) incurred by any of the Insurance Parties with respect to itself or owners of its Contracts in connection with any such failure or anticipated or reasonably foreseeable failure.

6.5        Upon the Insurance Parties’ request, the Fund at the Fund’s expense shall provide the Insurance Parties or their designees with reports certifying compliance with the aforesaid 817(h) diversification and Subchapter M qualification requirements, at the times provided for, provided, however, that providing such reporting does not relieve the Fund of its responsibility for such compliance or of its liability for any non-compliance. Such requests will only be made as frequently as is reasonably necessary to fulfill the Insurance Parties’ regulatory obligations.

ARTICLE VII.            Indemnification

7.1.        Indemnification by the Insurance Parties

(a)         Each Insurance Party (solely with respect to their respective Account) agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their respective officers and directors or trustees and each person, if any, who controls the Fund, Distributor or Adviser within the

 

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meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 7.1) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of such Insurance Party) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages or liabilities (or actions in respect thereof) or settlements arc related to the sale or acquisition of the Fund’s shares or the Contracts and:

 

  (i)

arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the Contracts or sales literature or other promotional material for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Insurance Parties by or on behalf of the Adviser or Fund for use in the Contracts or sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or Fund shares; or

 

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in sales literature or other promotional material of the Fund not supplied by the Insurance Parties or persons under their control) or wrongful conduct of the Insurance Parties or persons under their control, with respect to the sale or distribution of the Contracts or Fund Shares; or

 

  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in sales literature or other promotional material of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund by or on behalf of the Insurance Parties; or

 

  (iv)

arise as a result of any failure by the Insurance Parties to provide the services and furnish the materials under the terms of this Agreement; or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by the Insurance Parties in this Agreement or arise out of or result from any other material breach of this Agreement by the Insurance Parties,

as limited by and in accordance with the provisions of Sections 7.1(b) and 7.1(c) of this Agreement.

(b) Each Insurance Party shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties.

(c) Each Insurance Party shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party has notified such Insurance Party in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim has been served upon such Indemnified Party (or after such Indemnified Party has received notice of such service on any designated agent), but failure to notify such Insurance Party of any

 

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such claim shall not relieve such Insurance Party from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that such Insurance Party has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, such Insurance Party shall be entitled to participate, at its own expense, in the defense of such action. Such Insurance Party also shall be entitled to assume the defense thereof, with counsel satisfactory to the Party named in the action. After notice from the Insurance Party to such Party of the Insurance Party’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and such Insurance Party will not be liable to such Party under this Agreement for any legal or other expenses subsequently incurred by such Party independently in connection with the defense thereof other than reasonable costs of investigation.

(d)        The Indemnified Parties will promptly notify the affected Insurance Party(ies) of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund.

7.2.        Indemnification by the Adviser

(a) The Adviser agrees to indemnify and hold harmless the Insurance Parties and their directors and officers and each person, if any, who controls an Insurance Party within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 7.2) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund’s shares or the Contracts and:

 

  (i)

arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, the Distributor or the Adviser (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Adviser, the Distributor or the Fund by or on behalf of the Insurance Parties for use in the registration statement, prospectus or SAI for the Fund or in sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or the Fund shares; or

 

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Fund, the Distributor or the Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or

 

  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished

 

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  in writing to an Insurance Party by or on behalf of the Adviser, the Distributor or the Fund; or

 

  (iv)

arise as a result of any failure by the Fund, the Distributor or the Adviser to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by the Fund, the Distributor or the Adviser in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser, the Distributor or the Fund; or

 

  (vi)

arise out of or result from the incorrect or untimely calculation or reporting by the Fund, the Distributor or the Adviser of the daily net asset value per share or dividend or capital gain distribution rate;

as limited by and in accordance with the provisions of Sections 7.2(b) and 7.2(c). This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI.

(b) The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties.

(c) The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party has notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim has been served upon such Indemnified Party (or after such Indemnified Party has received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the Party named in the action. After notice from the Adviser to such Party of the Adviser’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such Party under this Agreement for any legal or other expenses subsequently incurred by such Party independently in connection with the defense thereof other than reasonable costs of investigation.

(d) Each Insurance Party agrees to promptly notify the Adviser of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Accounts.

7.3.        Indemnification by the Distributor

(a)         The Distributor agrees to indemnify and hold harmless the Insurance Parties and their directors and officers and each person, if any, who controls an Insurance Party within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 7.3) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of the Distributor) or litigation (including reasonable legal and other expenses) to which the

 

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Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund’s shares or the Contracts and:

 

  (i)

arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, Adviser or Distributor (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Adviser, the Distributor or Fund by or on behalf of the Insurance Parties for use in the registration statement or SAI or prospectus for the Fund or in sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or Fund shares; or

 

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI, sales literature or other promotional material for the Contracts not supplied by the Distributor or persons under its control) or wrongful conduct of the Fund, the Distributor or Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or

 

  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to and Insurance Party by or on behalf of the Adviser, the Distributor or Fund; or

 

  (iv)

arise as a result of any failure by the Fund, Adviser or Distributor to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by the Fund, Adviser or Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund, Adviser or Distributor; or

 

  (vi)

arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate;

as limited by and in accordance with the provisions of Sections 7.3(b) and 7.3(c). This indemnification is in addition to and apart from the responsibilities and obligations of the Distributor specified in Article VI.

(b)        The Distributor shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance or such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties.

 

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(c)        The Distributor shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party has notified the Distributor in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim has been served upon such Indemnified Party (or after such Indemnified Party has received notice of such service on any designated agent), but failure to notify the Distributor of any such claim shall not relieve the Distributor from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Distributor has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Distributor will be entitled to participate, at its own expense, in the defense thereof. The Distributor also shall be entitled to assume the defense thereof, with counsel satisfactory to the Party named in the action. After notice from the Distributor to such Party of the Distributor’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Distributor will not be liable to such Party under this Agreement for any legal or other expenses subsequently incurred by such Party independently in connection with the defense thereof other than reasonable costs of investigation.

(d)        Each Insurance Party agrees to promptly notify the Distributor of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Accounts.

ARTICLE VIII.             POTENTIAL MATERIAL CONFLICTS

8.1.        The Fund agrees that the Board, constituted with a majority of disinterested trustees, will monitor each Portfolio of the Fund for the existence of any material irreconcilable conflict between the interests of the variable annuity contract owners and the variable life insurance policy owners of the Insurance Parties and/or affiliated companies (“contract owners”) investing in the Fund. A material irreconcilable conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretive letter, or any similar action by insurance, tax or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Insurance Parties; or (f) a decision by an Insurance Party to disregard the voting instructions of contract owners. The Board shall have the sole authority to determine if a material irreconcilable conflict exists, and such determination shall be binding on the Insurance Parties only if approved in the form of a resolution by a majority of the Board, or a majority of the disinterested trustees of the Board. The Board will give prompt notice of any such determination to the Insurance Parties.

8.2.        The Insurance Parties agree that they will be responsible for assisting the Board in carrying out its responsibilities under the conditions set forth in the Fund’s exemptive application pursuant to which the SEC has granted the Mixed and Shared Funding Exemptive Order by providing the Board, as it may reasonably request, with all information necessary for the Board to consider any issues raised and agrees that it will be responsible for promptly reporting any potential or existing conflicts of which it is aware to the Board including, but not limited to, an obligation by the Insurance Parties to inform the Board whenever contract owner voting instructions are disregarded. The Insurance Parties also agree that, if a material irreconcilable conflict arises, it will at its own cost remedy such conflict up to and including (a) withdrawing the assets allocable to some or all of the Accounts from the Fund or any Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another Portfolio of the Fund, or submitting to a vote of all affected contract owners whether to withdraw assets from the Fund or any Portfolio and reinvesting such assets in a different investment medium and, as appropriate,

 

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segregating the assets attributable to any appropriate group of contract owners (e.g., annuity contract owners, life insurance owners or variable contract owners of one or more Insurance Parties) that votes in favor of such segregation, or offering to any of the affected contract owners the option of segregating the assets attributable to their contracts or policies, and (b) establishing a new registered management investment company and segregating the assets underlying the Contracts, unless a majority of Contract owners materially adversely affected by the conflict have voted to decline the offer to establish a new registered management investment company.

8.3.        A majority of the disinterested trustees of the Board shall determine whether any proposed action by the Insurance Parties adequately remedies any material irreconcilable conflict. In the event that the Board determines that any proposed action does not adequately remedy any material irreconcilable conflict, the Insurance Parties will withdraw from investment in the Fund each of the Accounts designated by the disinterested trustees and terminate this Agreement within six (6) months after the Board informs the Insurance Parties in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required to remedy any such material irreconcilable conflict as determined by a majority of the disinterested trustees of the Board.

8.4        If a material irreconcilable conflict arises because of a decision by the Insurance Parties to disregard Contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, the Insurance Parties may be required, at the Fund’s election, to withdraw the Account’s investment in the Fund and terminate this Agreement; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Fund’s independent trustees. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six-month period the Distributor and the Fund shall continue to accept and implement orders by the Insurance Parties for the purchase and redemption of shares of the Fund.

8.5.        If material irreconcilable conflict arises because of particular state insurance regulator’s decision applicable to the Insurance Parties conflicts with the majority of other state regulators, then the Insurance Parties will withdraw the Account’s investment in the Fund and terminate this Agreement within six (6) months after the Fund’s Board informs the Insurance Parties in writing that it has determined that such decision has created a material irreconcilable conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Fund’s Board. Until the end of the foregoing six (6) month period, the Fund and the Distributor shall continue to accept and implement orders by the Insurance Parties for the purchase and redemption of shares of the Fund.

8.6        For purposes of Sections 8.3 through 8.6 of this Agreement, a majority of the disinterested members of the Board shall determine whether any proposed action adequately remedies any material irreconcilable conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. The Insurance Parties shall not be required by Section 8.2 to establish a new funding medium for the contracts if an offer to do so has been declined by vote of a majority of Contract owners affected by the material irreconcilable conflict. In the event that the Board determines that any proposed action does not adequately remedy any material irreconcilable conflict, then the Insurance Parties will withdraw the Account’s investment in the Fund and terminate this Agreement within six (6) months after the Board informs the Insurance Parties in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the independent trustees.

8.7.        If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with

 

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respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rule 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable; and (b) Sections 3.5, 3.6, 8.1, 8.2, 8.3 and 8.7 of this Agreement shall continue in effect only to the extent that terms and conditions substantially identical to such Sections are contained in such Rule(s) as so amended or adopted.

ARTICLE IX.            Applicable Law

9.1.        This Agreement will be construed and interpreted in accordance with the laws of the State of Colorado, without regard to the Colorado Conflict of Laws provisions.

9.2.        This Agreement is subject to the provisions of the 1933, 1934, and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes (including, but not limited to, the Mixed and Shared Funding Exemptive Order), rules and regulations as the SEC may grant and the terms of this Agreement will be interpreted and construed in accordance therewith.

ARTICLE X.            Termination

10.1.    This Agreement will terminate:

(a)        at the option of any Party, with or without cause, with respect to some or all Portfolios, upon six (6) months advance written notice delivered to the other Parties; provided, however, that such notice shall not be given earlier than six (6) months following the Effective Dale of this Agreement; or

(b)        at the option of an Insurance Party by written notice to the other Parties with respect to any Portfolio based upon such Insurance Party’s determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; provided, however, that termination by only one Insurance Party will not terminate this Agreement as between the other Insurance Parties and the Fund, Distributor and Adviser; or

(c)        at the option of an Insurance Party by written notice to the other Parties with respect to any Portfolio in the event any of the Portfolio’s shares are not registered, issued or sold in accordance with applicable state and/ or federal law or such law precludes the use of such shares as the underlying investment media of the Contracts issued or to be issued by such Insurance Party; provided, however, that termination by only one Insurance Party will not terminate this Agreement as between the other Insurance Parties and the Fund, Distributor and Adviser; or

(d)        at the option of the Fund, Distributor or Adviser in the event that formal administrative proceedings are instituted against any Insurance Party by the FINRA, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding such Insurance Party’s duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares, if, in each case, the Fund, Distributor or Adviser, as the case may be, reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of such Insurance Party to perform its obligations under this Agreement; or

(e)        at the option of an Insurance Party in the event that formal administrative proceedings are instituted against the Fund, the Distributor or the Adviser by the FINRA, the SEC, or any state securities or insurance department or any other regulatory body, if such Insurance Party reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of the Fund, the Distributor or the Adviser to perform their obligations under this Agreement;

 

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provided, however, that termination by only one Insurance Party will not terminate this Agreement as between the other Insurance Parties and the Fund, Distributor and Adviser; or

(f)        at the option of either the Fund, the Distributor or the Adviser, if (i) the Fund, the Distributor or Adviser, respectively, determines, in its sole judgment reasonably exercised in good faith, that an Insurance Party has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on such Insurance Party’s ability to perform its obligations under this Agreement, (ii) the Fund, the Distributor or Adviser notifies such Insurance Party of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by such Insurance Party and any other changes in circumstances since the giving of such a notice, the determination of the Fund, the Distributor or Adviser continues to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day will be the effective date of termination; provided, however, that termination under this subsection (f) with respect to only one Insurance Party will not terminate this Agreement as between the other Insurance Parties and the Fund, Distributor and Adviser; or

(g)        at the option of an Insurance Party, if (i) such Insurance Party determines, in its sole judgment reasonably exercised in good faith, that the Fund, the Distributor or Adviser has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Fund’s, Distributor’s or Adviser’s ability to perform its obligations under this Agreement, (ii) such Insurance Party notifies the Fund, Distributor or Adviser, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Fund, Distributor or Adviser and any other changes in circumstances since the giving of such a notice, the determination of such Insurance Party continues to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day will be the effective date of termination; provided, however, that termination by only one Insurance Party will not terminate this Agreement as between the other Insurance Parties and the Fund, Distributor and Adviser; or

(h)        at the option of any non-defaulting Party in the event of a material breach of this Agreement by any Party (the “Defaulting Party”) other than as described in 9.1(a)-(g); provided, that the non-defaulting Party gives written notice thereof to the Defaulting Party, with copies of such notice to all other non-defaulting Parties, and if such breach has not been remedied within thirty (30) days after such written notice is given, then the non-defaulting Party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the Defaulting Party.

10.2.    Notice Requirement. No termination of this Agreement will be effective unless the Party terminating this Agreement gives prior written notice to all other Parties of its intent to terminate, which notice must set forth the basis for the termination. Furthermore:

(a)        in the event any termination is based upon the provisions of Section 10.1(a), 10.1(f), 10.1(g) or 10.1(h) of this Agreement, the prior written notice must be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the Parties;

(b)        in the event any termination is based upon the provisions of Section 10.1(d) or 10.1 (e) of this Agreement, the prior written notice must be given at least sixty (60) days before the effective date of termination; and

(c)        in the event any termination is based upon the provisions of Section 10.1(b) or 10.1(c), the prior written notice must be given in advance of the effective date of termination, which date will be determined by the Party sending the notice.

 

GWLA GWLANY Fund Participation Agreement (rev 02-2016)    Page 17 of 26

10.3.        Effect of Termination. Notwithstanding any termination of this Agreement, the Fund, the Distributor and the Adviser shall, at the option of the Insurance Parties, continue to make available additional shares of the Designated Portfolio(s) pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as “Existing Contracts”). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolio(s), redeem investments in the Designated Portfolio(s) and/or invest in the Designated Portfolio(s) upon the making of additional purchase payments under the Existing Contracts.

10.4.        Surviving Provisions. Notwithstanding any termination of this Agreement, each Party’s obligations under Article VII, Section 12.1, and Section 12.5 will survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement will also survive and not be affected by any termination of this Agreement.

ARTICLE XI.            Notices

Any notice will be sufficiently given when sent by registered or certified mail to the other Party at the address of such Party set forth below or at such other address as such Party may from time to time specify in writing to the other Parties.

If to GWL&A:

Great-West Life & Annuity Insurance Company

8515 East Orchard Road

Greenwood Village, CO 80111

Attn: Beverly Byrne, Chief Legal Counsel, Financial Services

If to GWL&ANY:

Great-West Life & Annuity Insurance Company of New York

c/o Great-West Life & Annuity Insurance Company

8515 East Orchard Road

Greenwood Village, CO 80111

Attn: Beverly Byrne, Chief Legal Counsel, Financial Services

If to the Fund:

Pioneer Variable Contracts Trust

60 State Street

Boston, Massachusetts 02109

Attn: Secretary

If to the Adviser:

Pioneer Funds Distributor, Inc.

60 State Street

Boston, Massachusetts 02109

 

GWLA GWLANY Fund Participation Agreement (rev 02-2016)    Page 18 of 26

Attn: President

Copy: General Counsel.

If to the Distributor:

Pioneer Funds Distributor, Inc.

60 State Street

Boston, Massachusetts 02109

Attn: President

Copy: General Counsel

ARTICLE XII.             Miscellaneous

12.1.        Subject to the requirements of legal process and regulatory authority, each Party shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other Party and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected Party until such time as such information may come into the public domain. Without limiting the foregoing, no Party shall disclose any information that another Party has designated as proprietary.

12.2.        The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect.

12.3.        This Agreement may be executed simultaneously in two or more counterparts, each of which taken together constitutes one and the same instrument. Any signature that is delivered by facsimile transmission or by email delivery of a ‘pdf’ format data file will create a valid and binding obligation of the Party executing with the same force and effect as if such facsimile or ‘pdf’ signature were an original thereof.

12.4.        If any provision of this Agreement is held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement will not be affected thereby.

12.5.        Each Party shall cooperate with each other Party and all appropriate governmental authorities (including without limitation the SEC, the FINRA and state insurance regulators) and shall permit such other Party and authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each Party further agrees to furnish the Colorado and/or New York Insurance Commissioner(s) with any information or reports in connection with services provided under this Agreement which such Commissioner may reasonably request in order to ascertain whether the variable annuity operations of GWL&A and/or GWL&ANY are being conducted in a manner consistent with the applicable state’s applicable laws or regulations.

12.6.        The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the Parties are entitled to under state and federal laws.

 

GWLA GWLANY Fund Participation Agreement (rev 02-2016)    Page 19 of 26

12.7        This Agreement may not be amended except by a writing signed by each of the Parties. The terms or provisions of this Agreement may be waived only by a writing signed by the Party waiving compliance. No waiver by any Party of any term or provision of this Agreement will be deemed to be a continuing waiver, or deemed to be a waiver of any other term or provision of this Agreement.

12.8.        This Agreement or any of the rights and obligations hereunder may not be assigned by any Party without the prior written consent of all Parties.

12.9.        Each Insurance Party is hereby expressly put on notice of the limitation of liability as set forth in the Declarations of Trust of the Fund and agree that the obligations assumed by the Fund, the Distributor and the Adviser pursuant to this Agreement are limited in any case to the Fund and Adviser and their respective assets and the Insurance Parties shall not seek satisfaction of any such obligation from the shareholders of the Fund, officers, employees or agents of the Fund, if an applicable trust.

12.10.        The Fund, the Distributor and the Adviser agree that the obligations assumed by each Insurance Party pursuant to this Agreement are limited in any case to the applicable Insurance Party and its assets and neither the Fund, Distributor nor Adviser shall seek satisfaction of any such obligation from the shareholders of any of the Insurance Parties, the directors, officers, employees or agents of any of the Insurance Parties, or any of them, except to the extent permitted under this Agreement.

12.11.        No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Adviser, the Distributor and the Fund.

12.12.        None of the Parties shall be liable to the other for any and all losses, damages, costs, charges, counsel fees, payments, expenses or liability due to any failure, delay or interruption in performing its obligations under this Agreement, and without the fault or negligence of such Party, due to causes or conditions beyond its control including, without limitation, labor disputes, strikes (whether legal or illegal), lock outs (whether legal or illegal), civil commotion, riots, war and war-like operations including acts of terrorism, embargoes, epidemics, invasion, rebellion, hostilities, insurrections, explosions, floods, unusually severe weather conditions, earthquakes, military power, sabotage, governmental regulations or controls, failure of power, fire or other casualty, accidents, national or local emergencies, boycotts, picketing, slow-downs, work stoppages, acts of God or natural disasters, provided that such failure or delay was not capable of mitigation pursuant to a prudent business continuity, disaster recovery or similar program.

12.13.        This Agreement sets forth the entire agreement and understanding of the Parties relating to the subject matter hereof, and supersedes all other prior agreements, arrangements, and understandings, whether written or oral, between the Parties.

(The remainder of this page intentionally left blank; signature page to follow)

 

GWLA GWLANY Fund Participation Agreement (rev 02-2016)    Page 20 of 26

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on its behalf by its duly authorized representative, to be effective as of the Effective Date.

 

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By: /s/ Ron Laeyendecker                
Name: Ron Laeyendecker                
Title: Senior Vice President            
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK
By: /s/ Susan Gile                    
Name: Susan Gile                    
Title: VP - Individual Markets        
PIONEER VARIABLE CONTRACTS TRUST
By: /s/ Christopher J. Kelley        
Name: Christopher J. Kelley        
Title: Secretary                            
PIONEER INVESTMENT MANAGEMENT, INC.
By: /s/ Frank Connelly                
Name: Frank Connelly                
Title: SVP, COO                          
PIONEER FUNDS DISTRIBUTOR, INC.
By: /s/ Mark Spina            
Name: Mark Spina            
Title: President                  

(Schedule A to follow)

 

 

GWLA GWLANY Fund Participation Agreement (rev 02-2016)    Page 21 of 26

SCHEDULE A

DESIGNATED PORTFOLIOS

Any and all portfolios of the Fund available to new investors on or after the effective date of this Agreement which, pursuant to the terms of the Funds’ registration statement, are eligible to serve as underlying funds to the Separate Accounts listed in Schedule B.

(Schedule B to follow)

 

 

GWLA GWLANY Fund Participation Agreement (rev 02-2016)    Page 22 of 26

SCHEDULE B

SEPARATE ACCOUNTS

GWL&A Accounts

FutureFunds Series Account

FutureFunds II Series Account

Retirement Plan Series Account

Trillium Variable Annuity Account

Variable Annuity-1 Series Account

Variable Annuity-2 Series Account

Variable Annuity Account 5

COLI VUL-2 Series Account

COLI VUL-4 Series Account

COLI VUL-7 Series Account

COLI VUL-14 Series Account

DB-I Series Account

Variable Annuity-8 Series Account

Variable Annuity-9 Series Account

GWL&ANY Accounts

FutureFunds II Series Account

COLI VUL-1 Series Account

COLI VUL-2 Series Account

DB-I Series Account

Variable Annuity-1 Series Account

Variable Annuity-2 Series Account

Variable Annuity Account 5

Variable Annuity-8 Series Account

Variable Annuity-9 Series Account

(Schedule C to follow)

 

 

GWLA GWLANY Fund Participation Agreement (rev 02-2016)    Page 23 of 26

SCHEDULE C

EXPENSES

The Fund and/or Adviser, and the Insurance Parties (“GWL&A” in this Schedule C) will coordinate the functions and pay the costs of completing these functions based upon an allocation of costs in the tables below.

 

Item    Function   

Party Responsible

for Coordination

   

Party

Responsible

for Expense

       
Mutual Fund Prospectus    Printing of combined prospectuses, or compiling of electronic prospectus, if needed in the future    GWL&A   

Fund or

Adviser, as applicable

 

       
    

Fund or Adviser shall supply GWL&A with such numbers of the Designated Portfolio(s) prospectus(es) as GWL&A reasonably requests

 

    GWL&A    Fund or Adviser, as applicable
       
    

Distribution to New and Inforce Clients

 

   

GWL&A

 

   

GWL&A

 

     
    

Distribution to Prospective Clients

 

   

GWL&A

 

   

GWL&A

 

       

Mutual Fund Prospectus Update & Distribution

 

    If Required by Fund or Adviser    Fund or Adviser    Fund or Adviser
     
    

If Required by GWL&A

 

   

GWL&A

 

   

GWL&A

 

       

Mutual Fund SAI

 

   

Printing

 

   

Fund or Adviser

 

   

Fund or Adviser

 

     
    

Distribution

 

   

GWL&A

 

   

GWL&A

 

       

Proxy Material for Mutual Fund:

 

    Printing if proxy required by Law    Fund or Adviser    Fund or Adviser
     
    

Distribution to Contractowners (including labor, if required) if proxy required by Law

 

    GWL&A    Fund or Adviser
       
    

Printing & distribution if required by GWL&A

 

   

GWL&A

 

   

GWL&A

 

     

Mutual Fund Annual & Semi-Annual Report

 

    Printing of combined reports    GWL&A    Fund or Adviser
       
    

Distribution

 

   

GWL&A

 

   

GWL&A

 

     

Other communication to New and Prospective clients

 

    If Required by the Fund or Adviser    GWL&A    Fund or Adviser
       
    

If Required by GWL&A

 

   

GWL&A

 

   

GWL&A

 

     

Other communication to Inforce Clients

 

   

Distribution (including labor and printing) if required by the Fund or Adviser

 

    GWL&A    Fund or Adviser
       
    

Distribution (including labor and

 

   

GWL&A

 

   

GWL&A

 

 

GWLA GWLANY Fund Participation Agreement (rev 02-2016)    Page 24 of 26

    

printing) if required by GWL&A

 

          
       

Errors in Share Price calculation

 

    Cost of error to participants    GWL&A    Fund or Adviser
     
     Cost of administrative work to correct error    GWL&A, Fund, or Adviser   

Fund or Adviser or GWL&A if GWL&A is at fault for the error

 

       
Operations of the Fund   

All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by the fund pursuant to any Rule 12b-1 plan

 

    Fund or Adviser    Fund or Adviser

(Schedule D to follow)

 

 

GWLA GWLANY Fund Participation Agreement (rev 02-2016)    Page 25 of 26

SCHEDULE D

ADMINISTRATIVE SERVICES

 

A.

The Insurance Parties, or an affiliate, will provide the properly registered and licensed personnel and systems needed for all customer servicing and support - for both fund and annuity information and questions – including:

responding to Contract owner inquiries;

delivering prospectuses - both fund and annuity;

entering initial and subsequent orders;

transferring cash to insurance company and/or funds;

explaining fund objectives and characteristics;

entering transfers between funds;

responding to fund balance and allocation inquiries;

mailing fund prospectus.

 

B.

The Insurance Parties, or an affiliate, will communicate all purchase, withdrawal, and exchange orders it receives from its customers to each Designated Portfolio.

Administrative Service Fee

For the services related to Class I shares of any Designated Portfolio, the Insurance Parties or their affiliate shall receive a fee of 0.35% per annum of the average aggregate daily net asset value of shares of the Designated Portfolio(s) held in the Accounts, and for the services related to Class II shares of any Designated Portfolio, the Insurance Parties or their affiliate shall receive a fee of 0.25% per annum of the average aggregate daily net asset value of shares of the Designated Portfolio(s) held in the Accounts. In each case, the fee is payable by the Adviser, or its designee, directly to the Insurance Parties or their affiliate. Such fee shall be paid in arrears quarterly. Each quarterly fee will be determined based on assets in the Accounts and each quarterly fee will be independent of every other quarterly fee. Such fee shall be due and payable automatically within 20 (twenty) days after the last day of the quarter to which such payment relates.

The Fund will calculate and the Insurance Parties will verify the asset balance for each day on which the fee is to be paid pursuant to this Agreement with respect to each Designated Portfolio.

12b-1 Distribution Related Fees

The Adviser, or its designee, agrees to pay the Insurance Parties or their affiliate a fee of 0.25% per annum of the average aggregate daily net asset value of Class II shares of Designated Portfolio(s) held in the Accounts. Such fee shall be paid in arrears, quarterly. Each quarterly fee will be determined based on assets in the Accounts and each quarterly fee will be independent of every other quarterly fee. Such fee shall be due and payable automatically within 20 (twenty) days after the last day of the quarter to which such payment relates.

 

GWLA GWLANY Fund Participation Agreement (rev 02-2016)    Page 26 of 26
 EX-99.(H)(102) 52 d694125dex99h102.htm EX-99.(H)(102) EX-99.(H)(102)

FIRST AMENDMENT TO PARTICIPATION AGREEMENT

THIS FIRST AMENDMENT TO PARTICIPATION AGREEMENT is made as of this 22nd day of July, 2009, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY, FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY, PUTNAM VARIABLE TRUST, and PUTNAM RETAIL MANAGEMENT LIMITED PARTNERSHIP, collectively, “the Parties”. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Original Agreement (defined below).

RECITALS

WHEREAS, the Parties are parties to a Fund Participation Agreement dated April 30, 2008 (the “Original Agreement”);

WHEREAS, the Parties desire and agree to amend the Original Agreement by deleting in its entirety Schedule B of the Agreement and replacing it with the Schedule B attached hereto.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Original Agreement as follows:

 

 

1.

Schedule B of the Original Agreement is hereby replaced in its entirety with Schedule B as attached and incorporated by reference to this Amendment.

 

 

2.

In all other respects, the terms of the Original Agreement shall remain in full force and effect.

[intentionally left blank]

 

1

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 22nd day of July, 2009.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By its authorized officer,
By:  

/s/ Ron Laeyendecker

Name:   Ron Laeyendecker
Title.   Senior Vice-President
Date:   7/22/09

FIRST GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By its authorized officer,
By:  

/s/ Ron Laeyendecker

Name:   Ron Laeyendecker
Title:   Senior Vice-President
Date:   7/22/09

PUTNAM VARIABLE TRUST

 

By its authorized officer,
By:  

/s/ Jonathan Horwitz

Name:   Jonathan Horwitz
Title:   Fund Treasurer
Date:   8/5/09

PUTNAM RETAIL MANAGEMENT LIMITED PARTNERSHIP

 

By its authorized officer,
By:  

/s/ Mark Coneeny

Name:   Mark Coneeny
Title:   Managing Director
Date:   7/29/09

 

2

SCHEDULE B

Authorized Funds and Fees

 

Authorized Funds    12b-1 Fees
All Class IA portfolios or series of the    Not Applicable
Putnam Variable Trust   
All Class IB portfolios or series of the   
Putnam Variable Trust    .25% per annum

 

3

EX-99.(H)(105) 53 d694125dex99h105.htm EX-99.(H)(105) EX-99.(H)(105)

SECOND AMENDMENT TO PARTICIPATION AGREEMENT

THIS SECOND AMENDMENT TO PARTICIPATION AGREEMENT is made as of this 18th day of September, 2013, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”), ROYCE CAPITAL FUND (the “Fund”), ROYCE AND ASSOCIATES, LLC (the “Adviser”), collectively the Parties, and GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK, formerly known as FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A-NY”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Original Agreement (defined below).

RECITALS

WHEREAS, GWL&A, GWL&A-NY the Fund, and the Adviser are parties to a Fund Participation Agreement dated September 30, 2005, as amended (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to add the COLI VUL-14 Series Account of GWL&A to the agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

 

1.

All references to the “Account” now include the COLI VUL Series Account 14 (GWL&A);.

 

 

2.

The Agreement is hereby amended to include Schedule D, listing all separate accounts pertaining to this agreement.

[Signature Page Follows]

 

1

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 18th day of September, 2013.

 

          GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY
  By its authorized officer,
  By:     /s/ Ron Laeyendecker                             
  Name: Ron Laeyendecker
  Title:   Senior Vice President
  Date:   9-18-2013
  GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY OF NEW YORK
  By its authorized officer,
  By:      /s/ Susan Gile                                       
  Name: Susan Gile
  Title:   VP, Individual Markets
  Date:   9-18-2013
  ROYCE CAPITAL FUND
  By its authorized officer,
  By:      /s/ John Diederich                                    
  Name: John Diederich
  Title:   VP, Treasurer
  Date:   8/21/13
  ROYCE & ASSOCIATES, LLC
  By its authorized officer,
  By:      /s/ John Diederich                                    
  Name: John Diederich
  Title:   COO, Managing Director
  Date:   8/21/13

 

2

Schedule D

Separate Accounts of GWL&A

COLI VUL Series Account 2 (GWL&A)

COLI VUL Series Account 4 (GWL&A);

COLI VUL Series Account 7 (GWL&A);

COLI VUL Series Account 14 (GWL&A);

Variable Annuity-1 Series Account of GWL&A

Separate Accounts of GWL&A-NY

COLI VUL Series Account 1 (GWL&A-NY);

COLI VUL Series Account 2 (GWL&A-NY);

COLI VUL Series Account 4 (GWL&A-NY);

Variable Annuity-1 Series Account of GWL&A-NY

 

3

EX-99.(H)(106) 54 d694125dex99h106.htm EX-99.(H)(106) EX-99.(H)(106)

PARTICIPATION AGREEMENT

Among

T. ROWE PRICE EQUITY SERIES, INC.,

T. ROWE PRICE FIXED INCOME SERIES, INC.,

T. ROWE PRICE INTERNATIONAL SERIES, INC.,

T. ROWE PRICE INVESTMENT SERVICES, INC.,

and

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

THIS AGREEMENT, made and entered into as of this 1st day of February, 2002 by and among Great-West Life & Annuity Insurance Company (hereinafter referred to as the “Company”), an insurance company organized under the laws of Colorado, on its own behalf and on behalf of each segregated asset account of the Company set forth on Schedule A hereto as may be amended from time to time (each account hereinafter referred to as the “Account”); and the undersigned funds, each, a corporation organized under the laws of Maryland (each hereinafter referred to as the “Funds”) and T. Rowe Price Investment Services, Inc. (hereinafter referred to as the “Underwriter”), a corporation organized under the laws of Maryland (each a “Party,” and collectively, the “Parties”).

WHEREAS, the Funds engage in business as open-end management investment companies and are or will be available to act as the investment vehicles for separate accounts established for variable life insurance and variable annuity contracts (the “Variable Insurance Products”) to be offered by insurance companies which have entered into participation agreements with the Funds and Underwriter (hereinafter “Participating Insurance Companies”); and

WHEREAS, the beneficial interest in the Funds are divided into several series of shares, each designated a “Portfolio” and representing the interest in a particular managed portfolio of securities and other assets; and

WHEREAS, the Funds have obtained an order from the Securities and Exchange Commission (“SEC”) granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the “1940 Act”) and Rules 6e-2(b)(15) and 6e-3(T) (b)(15) thereunder, to the extent necessary to permit shares of the Funds to be sold to and held by variable annuity and variable life insurance separate accounts of both affiliated and unaffiliated life insurance companies (hereinafter the “Shared Funding Exemptive Order”); and

WHEREAS, the Funds are registered as open-end management investment companies under the 1940 Act and shares of the Portfolios are registered under the Securities Act of 1933, as amended (hereinafter the “1933 Act”); and

WHEREAS, T. Rowe Price Associates, Inc. and T. Rowe Price International, Inc.(each hereinafter referred to as the “Adviser”) are each duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and

WHEREAS, the Company has issued or will issue certain variable life insurance or variable annuity contracts (including any certificates thereunder) supported wholly or partially by the Account (the “Contracts”) to be made available to the owners of the Contracts, including their participants or employees (collectively, “Contract Owners”); and

WHEREAS, the Account is duly established and maintained as a segregated asset account, established by resolution of the Board of Directors of the Company, on the date shown for such Account on Schedule A hereto, to set aside and invest assets attributable to the aforesaid Contracts; and

WHEREAS, the Company has registered or will register the Account as a unit investment trust under the 1940 Act or will not register the Account in proper reliance upon an exclusion from registration under the 1940 Act; and

WHEREAS, the Underwriter is registered as a broker dealer with the SEC under the Securities Exchange Act of 1934, as amended (hereinafter the “1934 Act”), and is a member in good standing of the National Association of Securities Dealers, Inc. (hereinafter “NASD”); and

WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Company intends to purchase shares in the Portfolios listed in Schedule A hereto, as it may be amended from time to time by mutual written agreement (the “Designated Portfolios”) on behalf of the Account to fund the aforesaid Contracts, and the Underwriter is authorized to sell such shares to unit investment trusts such as the Account at net asset value;

NOW, THEREFORE, in consideration of their mutual promises, the Company, the Funds and the Underwriter agree as follows:

ARTICLE I. Sale of Fund Shares

1.1        The Funds and the Underwriter agree that shares of the Funds will be sold only to Participating Life Insurance Companies and their separate accounts. No shares of any Designated Portfolio will be sold to the general public. The Funds will not sell shares of the Designated Portfolio(s) to any other Participating Insurance Company separate account unless an agreement containing provisions substantially similar to Sections 6.4, 3.4, 3.5, 5.1, and Article VII of this Agreement is in effect to govern such sales.

1.2.        All purchases, redemptions and exchanges of Designated Portfolio shares by the Company on behalf of the Account, in addition to the pricing and correction thereof, of Designated Portfolio shares, shall be governed by and subject to the terms of the Trading and NSCC Fund/SERV Networking Agreement, entered into by and between GWL&A’s affiliate, BenefitsCorp Equities, Inc. and T. Rowe Price Services, Inc. dated January 18, 2001 (“Trading Agreement”).

 

2

ARTICLE II. Representations and Warranties

2.1        The Company represents and warrants that the Contracts are or will be registered under the 1933 Act or that the Contracts are not registered because the are properly exempt from registration under the 1933 Act or will be offered exclusively in transactions that are properly exempt from registration under the 1933 Act. The Company further represents and warrants that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with state insurance suitability requirements. The Company further represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale thereof as a segregated asset account under the Colorado Insurance Law and has registered or, prior to any issuance or sale of the Contracts, will register the Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts and that it will maintain such registration for so long as any Contracts are outstanding as required by applicable law, or that it has not registered the Account in proper reliance upon an exclusion from registration under the 1940 Act.

2.2        The Funds represent and warrant that Fund shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal laws and with the laws of the state of Colorado and other state securities laws where the Contracts are offered for sale in the U.S., and that the Funds are and shall remain registered under the 1940 Act. The Funds shall amend the Registration Statement for their shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of their shares. The Funds shall register and qualify the shares for sale in accordance with the laws of the various states only if and to the extent deemed advisable by the Funds or the Underwriter.

2.3        The Funds currently do not intend to make any payments to finance distribution expenses pursuant to Rule 12b-1 under the 1940 Act, although they may make such payments in the future. To the extent that it decides to finance distribution expenses pursuant to Rule 12b-1, the Funds will undertake to have the Board, a majority of whom are not interested persons of the Funds, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses.

2.4        The Funds represent and warrant that it will make every effort to ensure that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with the insurance and other applicable laws of the State of Colorado and any other applicable state to the extent required to perform this Agreement. The Underwriter represents and warrants that it will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with all applicable securities laws. Company and the Funds will endeavor to mutually cooperate with respect to the implementation of any modifications necessitated by any change in state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a “Law Change”), and to keep each other informed of any Law Change that become known to either Party. In the event of a Law Change, the Fund agrees that, except in those circumstances where the Funds have advised the Company that its Board or Fund counsel has determined that implementation of a particular Law Change is not in the best interest of all of the

 

3

Funds’ shareholders or would be unduly burdensome to the Funds, any action required by a Law Change will be taken.

2.5        The Funds represent that they are lawfully organized and validly existing under the laws of the State of Maryland and that it does and will comply in all material respects with the 1940 Act. The Funds further represent that they are or will be qualified as a Regulated Investment Company under Subchapter M of the Code, and that it will make every effort to maintain such qualification (under Subchapter M or any successor or similar provisions) and that it will notify the Company immediately upon having a reasonable basis for believing that has ceased to so qualify or that it might not so qualify in the future.

2.6        The Underwriter represents and warrants that it is a member in good standing of the NASD and is registered as a broker-dealer with the SEC. The Underwriter further represents that it will sell and distribute the Fund shares in accordance with the laws of the State of Colorado and any applicable state and federal securities laws.

2.7        The Underwriter represents and warrants that the Adviser is and shall remain duly registered under all applicable federal and state securities laws and that the Adviser shall perform its obligations for the Funds in compliance in all material respects with the laws of the State Colorado and any applicable state and federal securities laws.

2.8        The Funds and the Underwriter represent and warrant that all of their directors, officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Funds are and shall continue to be at all times covered by a blanket fidelity bond or similar coverage for the benefit of the Funds in an amount not less than the minimum coverage as required currently by Rule 17g-1 of the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bond shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company.

2.9        The Company represents and warrants that all of its directors, officers, employees, and other individuals/entities employed or controlled by the Company dealing with the money and/or securities of the Funds are covered by a blanket fidelity bond or similar coverage in an amount not less than the minimum coverage as required by Rule 17g-1 of the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bond includes coverage for larceny and embezzlement and is issued by a reputable bonding company. The Company agrees that any amounts received under such bond in connection with claims that arise from the arrangements described in this Agreement will be held by the Company for the benefit of the Funds. The Company agrees to make all reasonable efforts to see that this bond or another bond containing these provisions is always in effect, and agrees to notify the Funds and the Underwriter in the event that such coverage no longer applies. The Company agrees to exercise its best efforts to ensure that other individuals/entities not employed or controlled by the Company and dealing with the money and/or securities of the Fund maintain a similar bond or coverage in a reasonable amount.

 

4

ARTICLE III. Prospectuses, Statements of Additional Information, and Proxy Statements; Voting

3.1.        If applicable state or federal laws or regulations require that prospectuses for the Funds be distributed to all Contract Owners, then at least annually, the Underwriter shall provide the Company with as many copies of the Funds’ current prospectus for the Designated Portfolio(s) as the Company may reasonably request for current Contract Owners, with expenses to be borne in accordance with Schedule C hereof. If requested by the Company in lieu thereof, the Underwriter or Funds shall provide such documentation (including a camera-ready copy and computer diskette of the current prospectus for the Designated Portfolio(s)) and other assistance as is reasonably necessary in order for the Company once each year (or more frequently if the prospectuses for the Designated Portfolio(s) are amended) to have any prospectus for the Contracts and the Funds’ prospectus for the Designated Portfolio(s) printed together in one document.

3.2.        If applicable state or federal laws or regulations require that the Statement of Additional Information (“SAI”) for the Funds be distributed to all Contract Owners, then the Funds or Underwriter shall provide the Company with copies of the Funds’ SAI or documentation thereof for the Designated Portfolio(s) in such quantities, with expenses to be borne in accordance with Schedule C hereof, as the Company may reasonably require to permit timely distribution thereof to Contract Owners. The Underwriter and/or the Funds shall also provide SAIs to any Contract Owner or prospective owner who requests such SAI from the Funds (although it is anticipated that such requests will be made to the Company in which case the Company shall send an SAI to any such Contract Owner within 3 business days of the receipt of a request).

3.3        The Funds shall provide the Company with copies of its proxy material, reports to shareholders, and other communications to shareholders, with expenses to be borne in accordance with Schedule C hereof, in such quantity as the Company shall reasonably require for distributing to Contract Owners in the Funds if and as required by applicable law. The Underwriter shall provide the Company with copies of the Funds’ annual and semi-annual reports, with expenses to be borne in accordance with Schedule C hereof, to shareholders in such quantity as the Company shall reasonably request for use in connection with offering the Variable Contracts issued by the Company. If requested by the Company in lieu thereof, the Underwriter shall provide such documentation (which may include a final copy of the Funds’ annual and semi-annual reports as set in type or on diskette) and other assistance as is reasonably necessary in order for the Company to print such shareholder communications for distribution to Contract Owners. The Company shall send a copy of the Funds’ annual or semi-annual report within 3 business days of the receipt of a request by a Contract Owner.

3.4        The Company shall:

 

  (i)

solicit voting instructions from Contract Owners;

 

  (ii)

vote the Fund shares in accordance with instructions received from Contract Owners; and

 

  (iii)

vote Fund shares for which no instructions have been received in the same proportion as Fund shares of such Designated Portfolio for which instructions have been received,

 

5

so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners or to the extent otherwise required by law. The Company reserves the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law.

3.5        The Company shall be responsible for assuring that each of its separate accounts participating in a Designated Portfolio calculates voting privileges as required by the Shared Funding Exemptive Order and consistent with any reasonable standards that the Funds may adopt and as agreed to by the Company (such approval shall not be unreasonably withheld).

3.6        The Funds will comply with all provisions of the 1940 Act requiring voting by shareholders, and in particular the Funds will either provide for annual meetings or comply with Section 16(c) of the 1940 Act (although the Funds are not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further, the Funds will act in accordance with the SEC’s interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the SEC may promulgate with respect thereto.

ARTICLE IV. Sales Material and Information

4.1        The Company shall furnish, or shall cause to be furnished, to the Funds or their designee, each piece of sales literature or other promotional material that the Company develops or uses and in which the Funds (or a Portfolio thereof) or the Advisers or the Underwriter is named, at least ten calendar days prior to its use. No such material shall be used if the Funds or their designee reasonably object to such use within ten calendar days after receipt of such material. The Funds or their designee reserves the right to reasonably object to the continued use of such material, and no such material shall be used if the Funds or their designee so object.

4.2        The Company shall not give any information or make any representations or statements on behalf of the Funds or concerning the Funds in connection with the sale of the Contracts other than the information or representations contained in the registration statement or prospectus or SAI for the Fund shares, as such registration statement and prospectus or SAI may be amended or supplemented from time to time, or in reports or proxy statements for the Funds, or in sales literature or other promotional material approved by the Funds or their designee or by the Underwriter, except with the permission of the Funds or the Underwriter or the designee of either.

4.3        The Funds, Underwriter, or its designee shall furnish, or shall cause to be furnished, to the Company, each piece of sales literature or other promotional material in which the Company, and/or its Account, is named at least ten calendar days prior to its use. No such material shall be used if the Company reasonably objects to such use within ten calendar days after receipt of such material. The Company reserves the right to reasonably object to the continued use of such material and no such material shall be used if the Company so objects.

4.4.        The Funds and the Underwriter shall not give any information or make any representations on behalf of the Company or concerning the Company, the Account, or the Contracts other than the information or representations contained in a registration statement, prospectus, or SAI for the Contracts, as such registration statement, prospectus or SAI may be amended or supplemented from time to time, or in published reports for the Account which are in the public

 

6

domain or approved by the Company for distribution to Contract Owners, or in sales literature or other promotional material approved by the Company or its designee, except with the permission of the Company.

4.5        The Funds will provide to the Company at least one complete copy of all registration statements, prospectuses, SAIs, reports, proxy statements, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Funds or their shares, within a reasonable time after the filing of such document(s) with the SEC or other regulatory authorities.

4.6        The Company will provide to the Fund at least one complete copy of all registration statements, prospectuses, SAIs, reports, solicitations for voting instructions, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Account, within a reasonable time after the filing of such document(s) with the SEC or other regulatory authorities.

4.7        For purposes of this Article IV, the phrase “sales literature and other promotional materials” includes, but is not limited to, any of the following that refer to the Funds or any affiliate of the Funds: advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and registration statements, prospectuses, SAIs, shareholder reports, proxy materials, and any other communications distributed or made generally available with regard to the Funds.

ARTICLE V. Fees and Expenses

5.1        The Funds and the Underwriter shall pay no fee or other compensation to the Company under this Agreement, except that if the Funds or any Portfolio adopts and implements a plan pursuant to Rule 12b-1 to finance distribution expenses, then the Underwriter may make payments to the Company or to the underwriter for the Contracts if and in amounts agreed to by the Underwriter in writing, and such payments will be made out of existing fees otherwise payable to the Underwriter, past profits of the Underwriter, or other resources available to the Underwriter. No such payments shall be made directly by the Funds. Currently, no such payments are contemplated.

All expenses incident to performance by the Underwriter under this Agreement shall be paid by the Underwriter, except the parties hereto may bear certain expenses in accordance with Schedule C hereof.

5.2        All expenses incident to performance by the Funds under this Agreement shall be paid by the Funds, except as otherwise provided herein. The Funds shall see to it that all their shares are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent deemed advisable by the Funds, in accordance with applicable state laws prior to their sale. The Funds shall bear the expenses for the cost of registration and qualification of the Funds’ shares, preparation and filing of the Funds’ prospectus and registration statement, proxy materials and reports, setting the prospectus in type, setting in type and printing the proxy materials and

 

7

reports to shareholders (including the costs of printing a prospectus that constitutes an annual report), the preparation of all statements and notices required by any federal or state law, and all taxes on the issuance or transfer of the Funds’ shares.

ARTICLE VI. Diversification and Qualification

6.1        The Funds will invest the assets of each Designated Portfolio in such a manner as to ensure that the Contracts will be treated as annuity, endowment, or life insurance contracts, whichever is appropriate, under the Internal Revenue Code of 1986, as amended (the Code) and the regulations issued thereunder (or any successor provisions). Without limiting the scope of the foregoing, each Designated Portfolio of the Funds will comply with Section 817(h) of Code and Treasury Regulation 1.817-5, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts, and any amendments or other modifications or successor provisions to such Section or Regulations. In the event of a breach of this Article VI by the Funds, it will take all reasonable steps (a) to notify the Company of such breach and (b) to adequately diversify the Funds so as to achieve compliance within the grace period afforded by Regulation 817.5.

6.2        The Funds represent that each Designated Portfolio is or will be qualified as a Regulated Investment Company under Subchapter M of the Code, and that it will make every effort to maintain such qualification (under Subchapter M or any successor or similar provisions) and that it will notify the Company immediately upon having a reasonable basis for believing that it has ceased to so qualify or that it might not so qualify in the future.

6.3        The Company represents, for purposes other than diversification under Section 817 of the Code, that the Contracts are currently, and at the time of issuance shall be, treated as life insurance, endowment contracts, or annuity insurance contracts, under applicable provisions of the Code, and that it will make every effort to maintain such treatment, and that it will notify the Funds and the Underwriter immediately upon having a reasonable basis for believing the Contracts have ceased to be so treated or that they might not be so treated in the future. The Company agrees that any prospectus offering a contract that is a “modified endowment contract” as that term is defined in Section 7702A of the Code (or any successor or similar provision), shall identify such contract as a modified endowment contract.

6.4        The Funds shall provide the Company or its designee with reports certifying compliance with the aforesaid Section 817(h) diversification and Subchapter M qualification requirements, at the times provided for and substantially in the form attached hereto as Schedule B hereto; provided, however, that providing such reports does not relieve the Funds of their responsibility for such compliance or of its liability for any non-compliance.

6.5        Without in any way limiting the effect of Sections 8.2, 8.3 and 8.4 hereof and without in any way limiting or restricting any other remedies available to the Company, the Advisers or Underwriter will pay all costs associated with or arising out of any failure, or any anticipated or reasonably foreseeable failure, of the Funds or any Designated Portfolio to comply with Sections 6.1 or 6.2 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment

 

8

company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act).

ARTICLE VII. Potential Conflicts.

7.1        The Board will monitor the Funds for the existence of any material irreconcilable conflict between the interests of the contract owners of all separate accounts investing in the Funds. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners; or (f) a decision by an insurer to disregard the voting instructions of contract owners. The Board shall promptly inform the Company if it determines that an irreconcilable material conflict exists and the implications thereof.

7.2.        The Company will report any potential or existing conflicts of which it is aware to the Board. The Company will assist the Board in carrying out its responsibilities under the Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by the Company to inform the Board whenever Contract Owner voting instructions are disregarded.

7.3        If it is determined by a majority of the Board, or a majority of its disinterested members, that a material irreconcilable conflict exists, the Company and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the disinterested Board members), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1), withdrawing the assets allocable to some or all of the separate accounts from the Funds or any Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another Portfolio of the Funds, or submitting the question whether such segregation should be implemented to a vote of all affected contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2), establishing a new registered management investment company or managed separate account.

7.4        If a material irreconcilable conflict arises because of a decision by the Company to disregard Contract Owner voting instructions and that decision represents a minority position or would preclude a majority vote, the Company may be required, at the Funds’ election, to withdraw the affected Account’s investment in the Funds and terminate this Agreement with respect to such Account provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. Any such withdrawal and termination must take place within six (6) months after the Funds gives written notice that this provision is being implemented, and until the end of that six month period the Funds shall continue to accept and implement orders by the Company for the purchase (and redemption) of shares of the Funds.

 

9

7.5        If a material irreconcilable conflict arises because a particular state insurance regulator’s decision applicable to the Company conflicts with the majority of other state regulators, then the Company will withdraw the affected Account’s investment in the Funds and terminate this Agreement with respect to such Account within six months after the Board informs the Company in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. Until the end of the foregoing six month period, the Funds shall continue to accept and implement orders by the company for the purchase (and redemption) of shares of the Funds.

7.6        For purposes of Section 7.3 through 7.6 of this Agreement, a majority of the disinterested members of the Board shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Funds be required to establish a new funding medium for the Contracts. The Company shall not be required by Section 7.3 to establish a new funding medium for the Contract if an offer to do so has been declined by vote of a majority of contract Owners materially adversely affected by the irreconcilable material conflict.

In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then the Company will withdraw the Account’s investment in the Funds and terminate this Agreement within six (6) months after the Board informs the Company in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the disinterested members of the Board.

7.7        If and to the extent Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Shared Funding Exemptive Order, then (a) the Funds and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable; and (b) Sections 3.4, 3.5, 3.6, 7.1., 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the extent that terms and conditions substantially identical to such Sections are contained in such Rule(s) as so amended or adopted.

ARTICLE VIII. Indemnification

8.1         Indemnification By the Company

8.1(a).    The Company agrees to indemnify and hold harmless the Funds and the Underwriter and each of their officers and directors and each person, if any, who controls the Funds or the Underwriter within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.1) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Company) or litigation (including legal and other expenses), to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Funds’ shares or the Contracts and:

 

10

  (i)

arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the Registration Statement, prospectus (which shall include an offering memorandum, if any), or statement of additional information (“SAT”) for the Contracts or contained in the Contracts or sales literature or other promotional material for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished to the Company by or on behalf of the Funds for use in the Registration Statement, prospectus or SAI for the Contracts or in the Contracts or sales literature or other promotional material (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or

 

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in the Registration Statement, prospectus or sales literature or other promotional material of the Funds not supplied by the Company or persons under its control) or wrongful conduct of the Company or persons under its authorization or control, with respect to the sale or distribution of the Contracts or Fund Shares; or

 

  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement, prospectus, SAI, or sales literature or other promotional material of the Funds or any amendment thereof or supplement thereto or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading if such a statement or omission was made in reliance upon information furnished to the Funds by or on behalf of the Company; or

 

  (iv)

arise as a result of any material failure by the Company to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with any qualification requirements specifically applicable to the Company in Article VI of this Agreement); or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by the Company in this Agreement or arise out of or result from any other material breach of this Agreement by the Company,

as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof.

8.1(b).    The Company shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or

 

11

negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of its obligations or duties under this Agreement.

8.1(c).    The Company shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Company in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Company of any such claim shall not relieve the Company from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision. In case any such action is brought against an Indemnified Party, the Company shall be entitled to participate, at its own expense, in the defense of such action. The Company also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action and to settle the claim at its own expense; provided, however, that no such settlement shall, without the Indemnified Parties’ written consent, include any factual stipulation referring to the Indemnified Parties or their conduct. After notice from the Company to such party of the Company’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Company will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

8.1(d).    The Indemnified Parties will promptly notify the Company of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Funds.

8.2    Indemnification by the Underwriter

8.2(a).    The Underwriter agrees to indemnify and hold harmless the Company and each of it directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.2) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Underwriter) or litigation (including legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Funds’ shares or the Contracts; and

 

  (i)

arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement or prospectus or SAI or sales literature or other promotional material of the Funds (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity

 

12

 

with information furnished to the Underwriter or Funds by or on behalf of the Company for use in the Registration Statement or prospectus for the Funds or in sales literature or other promotional material (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or

 

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in the Registration Statement, prospectus or sales literature or other promotional material for the Contracts not supplied by the Underwriter or persons under its control) or wrongful conduct of the Funds or Underwriter or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or

 

  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement, prospectus, SAI, or sales literature or other promotional material of the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished to the Company by or on behalf of the Funds; or

 

  (iv)

arise as a result of any material failure by the Funds or Underwriter to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by the Funds or Underwriter in this Agreement or arise out of or result from any other material breach of this Agreement by the Funds or Underwriter,

 

  (vi)

arises out of or results from material pricing errors in the calculations of the daily net asset value per share or dividend or capital gain distribution rate of the Funds;

as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof, and with respect to 8.2(a) (vi), as further limited and in accordance with the provisions of the Trading Agreement.

8.2(b).    The Underwriter shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance or such Indemnified Party’s duties or by reason of such Indemnified

 

13

Party’s reckless disregard of obligations and duties under this Agreement or to the Company or the Account, whichever is applicable.

8.2(c).    The Underwriter shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Underwriter in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Underwriter of any such claim shall not relieve the Underwriter from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision. In case any such action is brought against the Indemnified Party, the Underwriter will be entitled to participate, at its own expense, in the defense thereof. The Underwriter also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action and to settle the claim at its own expense; provided, however, that no such settlement shall, without the Indemnified Parties’ written consent, include any factual stipulation referring to the Indemnified Parties or their conduct. After notice from the Underwriter to such party of the Underwriter’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Underwriter will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

8.2(d).    The Company agrees promptly to notify the Underwriter of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account.

8.3    Indemnification By the Funds

8.3(a).    The Funds agree to indemnify and hold harmless the Company and each of its directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 8.3) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the applicable Fund) or litigation (including legal and other expenses) to which the Indemnified Parties may be required to pay or may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements, are related to the operations of the Funds and:

 

  (i)

arise as a result of any material failure by the Fund to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or

 

  (ii)

arise out of or result from any material breach of any representation and/or warranty made by the Funds in this Agreement or arise out of or result from any other material breach of this Agreement by the Funds;

 

14

as limited by and in accordance with the provisions of Sections 8.3(b) and 8.3(c) hereof.

8.3(b).    The Funds shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations and duties under this Agreement or to the Company, the Funds, the Underwriter or the Account, whichever is applicable.

8.3(c).    The Funds shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Funds in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Funds of any such claim shall not relieve the Funds from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision. In case any such action is brought against the Indemnified Parties, the Funds will be entitled to participate, at its own expense, in the defense thereof. The Funds also shall be entitled to assume the expense thereof, with counsel satisfactory to the party named in the action and to settle the claim at its own expense; provided, however, that no such settlement shall, without the Indemnified Parties’ written consent, include any factual stipulation referring to the Indemnified Parties or their conduct. After notice from the Funds to such party of the Fund’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Funds will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation.

8.3(d).    The Company and the Underwriter agree promptly to notify the Funds of the commencement of any litigation or proceeding against it or any of its respective officers or directors in connection with the Agreement, the issuance or sale of the Contracts, the operation of the Account, or the sale or acquisition of shares of the Funds.

ARTICLE IX.    Applicable Law

9.1        This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of Maryland.

9.2        This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the SEC may grant (including, but not limited to, any Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith.

ARTICLE X.    Termination

10.1        This Agreement shall continue in full force and effect until the first to occur of:

 

15

  (a)

termination by any party, for any reason with respect to some or all Designated Portfolios, by six (6) months’ advance written notice delivered to the other Parties; or

 

  (b)

termination by the Company by written notice to the other Parties with respect to any Designated Portfolio based upon the Company’s determination that shares of the Funds are not reasonably available to meet the requirements of the Contracts; provided that such termination shall apply only to the Designated Portfolio not reasonably available; or

 

  (c)

termination by the Company by written notice to the other Parties with respect to the Designated Portfolio in the event any of the Designated Portfolio’s shares are not registered, issued or sold in accordance with applicable state and/or federal law or such law precludes the use of such shares as the underlying investment media of the Contracts issued or to be issued by the Company; or

 

  (d)

termination by the Funds or Underwriter in the event that formal administrative proceedings are instituted against the Company by the NASD, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding the Company’s duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares; provided, however, that the Funds or Underwriter determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of the Company to perform its obligations under this Agreement; or

 

  (e)

termination by the Company in the event that formal administrative proceedings are instituted against the Funds, Underwriter or Advisers by the NASD, the SEC, or any state securities or insurance department or any other regulatory body; provided, however, that the Company determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of the Funds, Underwriter or Advisers to perform its obligations under this Agreement; or

 

  (f)

termination by the Company by written notice to the other Parties with respect to any Designated Portfolio in the event that such Designated Portfolio ceases to qualify as a Regulated Investment Company under Subchapter M or fails to comply with the Section 817(h) diversification requirements specified in Article VI hereof, or if the Company reasonably believes that such Designated Portfolio may fail to so qualify or comply; or

 

  (g)

termination by the Funds or Underwriter by written notice to the Company in the event that the Contracts fail to meet the qualifications specified in Section 6.3 hereof; or if the Funds or Underwriter reasonably believes that such Contracts may fail to so qualify; or

 

16

  (h)

termination by either the Funds or Underwriter by written notice to the Company, if either one or all of the Funds or Underwriter respectively, shall determine, in their sole judgment exercised in good faith, that the Company has suffered a material adverse change in its business, operations, financial condition, or prospects since the date of this Agreement or is the subject of material adverse publicity; or

 

  (i)

termination by the Company by written notice to the other Parties, if the Company shall determine, in its sole judgment exercised in good faith, that the Funds, Underwriter or Advisers has suffered a material adverse change in its business, operations, financial condition or prospects since the date of this Agreement or is the subject of material adverse publicity.

 

  (j)

at the option of any non-defaulting Party hereto in the event of a material breach of this Agreement by any Party hereto (the “defaulting Party”); provided, that the non-defaulting Part gives written notice thereof to the defaulting Party, with copies of such notice to all other non-defaulting Parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non-defaulting Party giving such written notice may terminate this Agreement by giving (30) days written notice of termination to the defaulting Party.

10.2        Effect of Termination. Notwithstanding any termination of this Agreement, the Funds and the Underwriter shall, at the option of the Company, continue to make available additional shares of the Funds pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as “Existing Contracts”). Specifically, the Contract Owners of the Existing Contracts may be permitted to reallocate investments in the Funds, redeem investments in the Funds and/or invest in the Funds upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.2 shall not apply to any termination under Article VII and the effect of such Article VII termination shall be governed by Article VII of this Agreement. The parties further agree that this Section 10.2 shall not apply to any termination under Section 10.1(g) of this Agreement.

10.3        The Company shall not redeem Fund shares attributable to the Contracts (as opposed to Fund shares attributable to the Company’s assets held in the Account) except (i) as necessary to implement Contract Owner initiated or approved transactions, (ii) as required by state and/or federal laws or regulations or judicial or other legal precedent of general application (hereinafter referred to as a Legally Required Redemption), or (iii) pursuant to the terms of a substitution order issued by the SEC pursuant to Section 26(b) of the 1940 Act. Upon request, the Company will promptly furnish to the Funds and the Underwriter the opinion of counsel for the Company (which counsel shall be reasonably satisfactory to the Funds and the Underwriter) to the effect that any redemption pursuant to clause (ii) above is a Legally Required Redemption. Furthermore, except in cases where permitted under the terms of the Contracts, the Company shall not prevent Contract Owners from allocating payments to a Portfolio that was otherwise available under the Contracts without first giving the Funds or the Underwriter 90 days notice of its intention to do so.

 

17

10.4        Notwithstanding any termination of this Agreement, each party’s obligation under Article VIII to indemnify the other parties shall survive. In addition, with respect to Existing Contracts, all provisions of this Agreement, or any side letter agreement relating to the subject matter hereof, shall also survive and not be affected by any termination of this Agreement.

ARTICLE XI. Notices

Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party.

If to the Funds:

T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, Maryland 21202

Attention:  Henry H. Hopkins, Esq.

If to the Company:

Great-West Life & Annuity Insurance Company

8515 East Orchard Road

Greenwood Village, CO 80111

Attention:            Ron J. Laeyendecker, Vice President, Life Insurance Markets

PC:        Beverly Byrne, Esq. Vice President and Counsel

If to Underwriter:

T. Rowe Price Investment Services

100 East Pratt Street

Baltimore, Maryland 21202

Attention:  Henry H. Hopkins, Esq.

ARTICLE XII. Miscellaneous

12.1        The Parties hereto acknowledge that any nonpublic personal information (as defined by applicable law or regulation promulgated under Title V of the Gramm-Leach-Bliley Act of 1999 (the “Act”)) of Contract Owners (and any participants thereof, as applicable) will be disclosed or utilized solely to carry out the terms of this Agreement or pursuant to an exception contained in any applicable law or regulation promulgated under this Act. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary.

12.2        All references herein to the Funds are to each of the undersigned Funds as if this agreement were between such individual Fund, the Underwriter, and the Company. All references herein to the Advisers relate solely to the Adviser of such individual Fund, as appropriate. All persons dealing with a Fund must look solely to the property of such Fund, and in the case of a series company, the respective Designated Portfolio listed on Schedule A hereto as though such Designated Portfolio had separately contracted with the Company and the Underwriter for the enforcement of any claims against the Fund. The parties agree that neither the Board, officers, agents or

 

18

shareholders assume any personal liability or responsibility for obligations entered into by or on behalf of the Funds.

12.3        The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect.

12.4        This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument.

12.5        If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby.

12.6        Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, the NASD, and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the Colorado Insurance Commissioner with any information or reports in connection with services provided under this Agreement which such Commissioner may request in order to ascertain whether the variable life or annuity operations of the Company are being conducted in a manner consistent with Colorado variable life or annuity laws and regulations and any other applicable law or regulations.

12.7        The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies, and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws.

12.8        This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto.

12.9        The Company shall furnish or cause to be furnished, to the Funds or their designee copies of the following reports:

 

  (a)

the Company’s annual statement (prepared under statutory accounting principles) and annual report (prepared under generally accepted accounting principles (“GAAP”), if any), as soon as practical and in any event within 90 days after the end of each fiscal year.

 

  (b)

the Company’s quarterly statements (statutory) (and GAAP, if any), as soon as practical and in any event within 45 days after the end of each quarterly period.

12.10        The Funds and the Underwriter agree that the obligations assumed by the Company pursuant to this Agreement shall be limited in any case to the Company and its assets and neither the Funds and Underwriter shall seek satisfaction of any such obligation from the shareholders of the Company, the directors, officers, employees or agents of the Company, or any of them, except to the extent permitted under this Agreement.

 

19

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by its duly authorized representative as of the date specified below.

 

COMPANY:

    

GREAT-WEST LIFE & ANNUITY INSURANCE CO.

   

By its authorized officer

   

By:

  

/s/ Ron Laeyendecker

   

Title:

  

                     Vice President

   

Date:

  

            3/21/02

FUND:

    

T. ROWE PRICE EQUITY SERIES, INC.

 

By its authorized officer

   

By:

  

/s/ Henry H. Hopkins

     

                    Henry H. Hopkins

   

Title:

  

                     Vice President

   

Date:

  

            1/31/02

   

T. ROWE PRICE FIXED INCOME SERIES, INC.

   

By its authorized officer

   

By:

  

/s/ Henry H. Hopkins

   

Title:

  

                     Vice President

   

Date:

  

            1/31/02

 

20

   

T. ROWE PRICE INTERNATIONAL SERIES, INC.

   

By its authorized officer

   

By:

  

/s/ Henry H. Hopkins

   

Title:

  

                    Vice President

   

Date:

  

                 1/31/02

UNDERWRITER:

    

T. ROWE PRICE INVESTMENT SERVICES, INC.

   

By its authorized officer

   

By:

  

/s/ Darrell N. Braman

     

                    Darrell N. Braman

   

Title:

  

                     Vice President

   

Date:

  

                 1/30/02

 

21

SCHEDULE A

 

Name of Separate Account and

       

Date Established by Board of Directors

    

Designated Portfolios

Key Business COLI VUL Series Account 7

    

(Insurance Series)

   

November 23, 1999

   

T. Rowe Price Equity Series, Inc.

 

    

  

•

   

T. Rowe Price Equity Income Portfolio

   

•

   

T. Rowe Price New America Growth Portfolio

   

•

   

T. Rowe Price Personal Strategy Balanced Portfolio

   

•

   

T. Rowe Price Mid-Cap Growth Portfolio

   

•

   

T. Rowe Price Blue Chip Growth Portfolio

   

•

   

T. Rowe Price Equity Index 500 Portfolio

   

•

   

T. Rowe Price Health Sciences Portfolio

   

T. Rowe Price Fixed Income Series, Inc.

   

•

   

T. Rowe Price Limited-Term Bond Portfolio

   

•

   

T. Rowe Price Prime Reserve Portfolio

   

T. Rowe Price International Series, Inc.

   

•

   

T. Rowe Price International Stock Portfolio

And any other portfolios or series of the Funds that are available and open to new investors on or after the effective date of this Agreement.

SCHEDULE B

Reports per Section 6.4

With regard to the reports relating to the quarterly testing of compliance with the requirements of Section 817(h) and Subchapter M under the Internal Revenue Code (the “Code”) and the regulations thereunder, the Funds shall provide within twenty (20) business days of the close of the calendar quarter a report to Company in the Form B1 attached hereto and incorporated herein by reference, regarding the status under such sections of the Code of the Designated Portfolio(s), and if necessary, identification of any remedial action to be taken to remedy non-compliance.

With regard to the reports relating to the year-end testing of compliance with the requirements of Subchapter M of the Code, referred to hereinafter as “RIC status,” the Funds will provide the reports on the following basis: (i) the last quarter’s quarterly reports can be supplied within the 20-day period, and (ii) a year-end report will be provided 45 business days after the end of the calendar year. However, if a problem with regard to RIC status, as defined below, is identified in the third quarter report, on a weekly basis, starting the first week of December, additional interim reports will be provided specially addressing the problems identified in the third quarter report. If any interim report memorializes the cure of the problem, subsequent interim reports will not be required.

A problem with regard to RIC status is defined as any violation of the following standards, as referenced to the applicable sections of the Code:

(a)  Less than ninety percent of gross income is derived from sources of income specified in Section 851(b)(2);

(b)  Less than fifty percent of the value of total assets consists of assets specified in Section 851(b)(3)(A); and

(c)  No more than twenty-five percent of the value of total assets is invested in the securities of one issuer, as that requirement is set forth in Section 851(b)(3)(B).

FORM B1

CERTIFICATE OF COMPLIANCE

For the quarter ended:                        

I ,                    , a duly authorized officer, director or agent of                 Fund hereby swear and affirm that                     Fund is in compliance with all requirements of Section 817(h) and Subchapter M of the Internal Revenue Code (the “Code”) and the regulations thereunder as required in the Fund Participation Agreement among Great-West Life & Annuity Insurance Company, and                          other than the exceptions discussed below:

 

Exceptions

  

                    

   

Remedial Action

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

    
If no exception to report, please indicate “None.”
    

Signed this              day of         ,             .

    

 

    

(Signature)

 

                             

  

By:

  

                          

   

(Type or Print Name and Title/Position)

SCHEDULE C

EXPENSES

The Funds and/or the Underwriter and/or Advisers, and Company will coordinate the functions and pay the costs of completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Funds’ share of the total costs determined according to the number of pages of the Fund’s respective portions of the documents. The Company in seeking reimbursement for such costs shall submit an invoice showing the allocation of the Funds’ share of the total costs, and the methodology by which such allocation was calculated.

 

Item    Function    Party Responsible for Coordination    Party Responsible for Expense
Fund Prospectus    Printing of prospectuses, or compiling of electronic prospectus, if needed in the future for current Contract Owners    Company    Funds or Underwriter as applicable
     Funds, Underwriter or Advisers shall supply Company with such-numbers of the Designated Portfolio(s) prospectus(es) as Company shall reasonably request for current Contract Owners    Company    Funds or Underwriter as applicable
     Printing of prospectuses, or compiling of electronic prospectus, if needed in the future for prospective Contract Owners    Company    Company
     Distribution to New and Inforce Clients    Company    Company
     Distribution to Prospective Clients    Company    Company
Funds Prospectus Update & Distribution    If Required by Funds    Funds, Underwriter or Advisers    Funds or Underwriter, as applicable
     If Required by Company    Company    Company
Fund SAI    Printing    Funds, Underwriter or Advisers    Funds or Underwriter, as applicable
     Distribution    Company    Company
Proxy Material for Funds:    Printing if proxy required by Law    Funds, Underwriter or Advisers    Funds or Underwriter
     Distribution (including labor) if proxy required by Law    Company    Funds or Underwriter
     Printing & distribution if required by Company    Company    Company

 

Item    Function    Party Responsible for Coordination    Party Responsible for Expense
Fund Annual & Semi- Annual Report for distribution to current Contract Owners    Printing of reports    Company    Funds or Underwriter
     Distribution    Company    Company
Operations of the Funds    All operations and related expenses, including cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Funds, and expenses paid or assumed by the Funds pursuant to any Rule 12b-1 Plan    Funds or Underwriter    Funds or Underwriter
Substitution Orders    Application for, and implementation of (including necessary printing and mailings), substitution orders required as a result of Funds’ action    Company    Funds or Underwriter

SCHEDULE D

NON-COMPETE PROVISIONS

The Funds, Underwriter (for purposes of this Schedule, collectively a “party”) and GWL&A agree that they will treat as confidential all facts, circumstances, information, data, plans, projects and technical or commercial knowledge gained in relation to the other party, or received from the other party, including, but not limited to, information regarding customers (such as retirement plans and plan participants), employees, suppliers servicing methods, programs, fees, strategies and related information (“Confidential Information”). Information in the public domain, through no wrongful action on the part of either party, shall not be considered Confidential Information. The Funds, Underwriter and GWL&A undertake that they will not disclose Confidential Information to any third parties or to either parties’ affiliates and neither company will use such Confidential Information obtained from the other company to directly compete with the company, except a company may disclose the Confidential Information in the following limited circumstances: (i) to employees, affiliates or agents as necessary to perform the services under this Agreement, (ii) to their legal advisers, (iii) with the prior written consent of the other party or (iv) as required by law. Prior to any disclosure under the foregoing subsection (iv), the party intending such disclosure shall first notify the other party to allow such other party a reasonable opportunity to seek an appropriate protective order.

The parties further agree that for deferred compensation plans, which are 457 and 403(b) plans only and for which GWL&A or any of its affiliates acts as a current recordkeeper or service provider, the Funds or Underwriter and/or their affiliates will not directly or indirectly contact these plans for the purpose of offering recordkeeping or other services, except that the Funds or Underwriter or their affiliates may respond to inquiries or requests for proposals from such plans or their consultants regarding the Funds’ or Underwriter’s or their affiliates recordkeeping services. Nothing contained herein will preclude Underwriter offering its Funds on an investment-only basis to any defined contribution plan.

The term of this Schedule D shall run concurrent to the term of the Confidentiality and Non-Compete Agreement by and between T. Rowe Price Investment Services, Inc. and BenefitsCorp Equities, Inc. effective January 18, 2001.

EX-99.(H)(107) 55 d694125dex99h107.htm EX-99.(H)(107) EX-99.(H)(107)

FIRST AMENDMENT TO PARTICIPATION AGREEMENT

THIS FIRST AMENDMENT TO PARTICIPATION AGREEMENT is made as of this 10th day of November, 2008, by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”) and T. ROWE PRICE EQUITY SERIES INC., T. ROWE PRICE FIXED INCOME SERIES, INC., and T. ROWE PRICE INTERNATIONAL SERIES, INC., (collectively, the “Funds”), T. ROWE PRICE INVESTMENT SERVICES, INC., (the “Underwriter”), and FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“First GWL&A”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the original Agreement (defined below).

RECITALS

WHEREAS, GWL&A, the Funds, and the Underwriter are parties to a Fund Participation Agreement dated February 1, 2002, (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to add First GWL&A, a New York life insurance company, as a Party to the Agreement; and

WHEREAS, the Parties to the Agreement desire to add an additional separate Account; and

WHEREAS, The Parties desire and agree to amend the Agreement by deleting in its entirety Schedule A of the Agreement and replacing it with the Schedule A attached hereto.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

 

1.

First GWL&A is hereby added as a Party to the Agreement. The Parties to the Agreement, including First GWL&A, agree that each representation, warranty, covenant, condition and other provision of the Agreement that is applicable to GWL&A shall also be applicable to First GWL&A, with the following changes: (i) the First GWL&A Account was established under the insurance laws of the State of New York; (ii) any references to Colorado law in paragraph 2.1 and 2.2 shall be changed to New York Insurance Law. The rights and obligations of GWL&A and First GWL&A under the Agreement as amended hereby shall be several and not joint.

 

 

2.

All references to the “First GWL&A Account” include the COLI VUL Series Account 1 (First GWL&A).

 

 

3.

Schedule A of the Agreement is hereby replaced in its entirety with Schedule A as attached and incorporated by reference to this Amendment.

[The rest of this page is intentionally left blank]

 

1

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 10th day of November, 2008.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

           By its authorized officer,
           By:  

/s/ Ron Laeyendecker

           Name:   Ron Laeyendecker
  Title:   Senior Vice-President
  Date:   11/5/08

FIRST GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

           By its authorized officer,
           By:  

/s/ Bob Shaw

           Name:   Bob Shaw
  Title:   Senior Vice President
  Date:   11/5/08

T. ROWE PRICE EQUITIY SERIES, INC.

 

           By its authorized officer,
           By:  

/s/ David Oestreicher

           Name:   David Oestreicher
  Title:   Vice President
  Date:   11/10/08

T. ROWE PRICE FIXED INCOME SERIES, INC.

 

           By its authorized officer,
           By:  

/s/ David Oestreicher

           Name:   David Oestreicher
  Title:   Vice President
  Date:   11/10/08

T.ROWE PRICE INTERNATIONAL SERIES, INC.

 

           By its authorized officer,
           By:  

/s/ David Oestreicher

           Name:   David Oestreicher
  Title:   Vice President
  Date:   11/10/08

 

2

T.ROWE PRICE INVESTMENT SERVICES, INC.

 

           By its authorized officer,
           By:  

/s/ Darrell N. Braman

           Name:   Darrell N. Braman
  Title:   Vice President
  Date:   11/11/08

 

3

SCHEDULE A

 

Name of Separate Account and            
Date Established by Board of Directors    

 

 

Key Business COLI VUL Series Account 7

       November 23, 1999
(GWL&A)      
Key Business COLI VUL Series Account 1       February 14, 2006
(First GWL&A)      
Designated Portfolios       T. Rowe Price Equity Series, Inc.
              •    T. Rowe Price Equity Income Portfolio
         •    T. Rowe Price New America Growth Portfolio
        

•    T. Rowe Price Personal Strategy Balanced

      Portfolio

         •    T. Rowe Price Mid-Cap Growth Portfolio
         •    T. Rowe Price Blue Chip Growth Portfolio
         •    T. Rowe Price Equity Index 500 Portfolio
         •    T. Rowe Price Health Sciences Portfolio
      T. Rowe Price Fixed Income Series, Inc.
         •    T. Rowe Price Limited-Term Bond Portfolio
         •    T. Rowe Price Prime Reserve Portfolio
      T. Rowe Price International Series, Inc.
         •    T. Rowe Price International Stock Portfolio

And any other portfolios or series of the Funds that are available and open to new investors on or after the effective date of this Agreement.

 

4

EX-99.(H)(108) 56 d694125dex99h108.htm EX-99.(H)(108) EX-99.(H)(108)

SECOND AMENDMENT TO PARTICIPATION AGREEMENT

THIS SECOND AMENDMENT TO PARTICIPATION AGREEMENT is made as of this 30th day of November, 2011, by and among, Great-West Life & Annuity Insurance Company, First Great-West Life & Annuity Insurance Company (each the “Company”), T. Rowe Price Equity Series, Inc., T. Rowe Price Fixed Income Series, Inc., T. Rowe Price International Series, Inc., (collectively, the “Funds”), T. Rowe Price Investment Services, Inc. (the “Underwriter”). Capitalized terms not otherwise defined herein shall have the meaning as ascribed to them in the original Agreement (defined below).

WHEREAS, Company, the Funds and the Underwriter are parties to a Fund Participation Agreement dated February 1, 2002, as amended (the “Agreement”);

WHEREAS, the parties desire to amend the Agreement to provide for the Company to use the Variable Insurance Portfolio-II class of shares as investment vehicles for the Variable Insurance Products offered by the Company; and

WHEREAS, the parties desire to amend certain provisions and Schedules of the Agreement.

NOW THEREFORE, the parties do hereby agree as follows:

 

1.

A new Section 1.3 of the Participation Agreement is added as follows:

“1.3 If the net asset value is materially incorrect through no fault of the Company, the Company on behalf of each Account, shall be entitled to an adjustment to the number of shares purchased or redeemed to reflect the correct net asset value in accordance with Fund procedures and SEC guidelines. Any material error in the calculation of the net asset value, income dividend or capital gain information shall be reported by the Fund or its designee to the Company promptly upon discovery. Additionally, the Company shall be entitled to reimbursement from the Fund or the Underwriter for any expenses incurred by the Company in correcting an Account or Contract records or in adjusting proceeds paid to Contract owners who have redeemed or reallocated interests under their Contracts pursuant to Schedule E attached.”

 

2.

Section 2.3 of the Participation Agreement is deleted in its entirety and replaced with the following:

“2.3 The T. Rowe Price Equity Series, Inc. and the T. Rowe Price Fixed Income Series, Inc. currently are authorized to issue a class of shares with respect to which such Fund has adopted a plan for purposes of paying for certain services under Rule 12b-1 of the 1940 Act. To the extent that another Fund decides to finance certain expenses pursuant to Rule 12b-1, the Fund will undertake to have the Board, a majority of whom are not interested persons of the Fund, formulate

and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance such expenses.”

 

3.

Section 5.1 of the Participation Agreement is deleted in its entirety and replaced with the following:

“5.1 The Underwriter shall pay a fee to the Company or to the underwriter for the Contracts pursuant to Rule 12b-1 to finance personal services expenses as set forth in the Letter Agreement entered into between the Company and the Underwriter dated November 30, 2011.”

 

4.

Schedule A is hereby replaced with the attached Schedule A.

 

5.

Schedule C is hereby replaced with the attached Schedule C.

 

6.

All other terms and provisions of the Agreement are not amended herein shall remain in full force and effect.

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to the Agreement to be executed in its name and on its behalf by its duly authorized representative.

 

GREAT-WEST LIFE & ANNUITY

INSURANCE COMPANY

By its Authorized Officer

           

FIRST GREAT-WEST LIFE & ANNUITY

INSURANCE COMPANY

By its Authorized Officer

By:   

/s/ Ron Laeyendecker

       By:   

/s/ Susan Gile

Name:    Ron Laeyendecker       Name:    Susan Gile
Title:    Senior Vice-President       Title:    Vice President
Date:    12/12/11       Date:   

 

T. ROWE PRICE EQUITY SERIES,

INC.

By its Authorized Officer

      

T. ROWE PRICE FIXED INCOME

SERIES, INC.

By its Authorized Officer

By:   

/s/ David Oestreicher

       By:   

/s/ David Oestreicher

Name:    David Oestreicher       Name:    David Oestreicher
Title:    Vice President       Title:    Vice President
Date:    11/30/11       Date:    11/30/11

 

2

T. ROWE PRICE INTERNATIONAL

SERIES, INC.

By its Authorized Officer

   

    

   

T. ROWE PRICE INVESTMENT

SERVICES, INC.

By its Authorized Officer

By:   

/s/ David Oestreicher

       By:   

/s/ Fran Pollack-Matz

Name:    David Oestreicher       Name:    Fran Pollack-Matz
Title:    Vice President       Title:    Vice President
Date:    11/30/11       Date:    11/30/11

 

 

3

SCHEDULE A

 

Name of Separate Account and            
Date Established by Board of Directors    

 

 

Key Business COLI VUL Series Account 7

       November 23, 1999
(GWL&A)      
Key Business COLI VUL Series Account 1       February 14, 2006
(First GWL&A)      
Variable Annuity-1 Series Account       July 24, 1995
(GWL&A)      
Variable Annuity-1 Series Account       January 15, 1997
(First GWL&A)      
Variable Annuity-2 Series Account       June 25, 2009
(GWL&A)      
Variable Annuity-2 Series Account       September 13, 1989
(First GWL&A)      
Designated Portfolios       T. Rowe Price Equity Series, Inc.
              •    T. Rowe Price Equity Income Portfolio
         •    T. Rowe Price Equity Income Portfolio-II
         •    T. Rowe Price New America Growth Portfolio
        

•    T. Rowe Price Personal Strategy Balanced

      Portfolio

         •    T. Rowe Price Mid-Cap Growth Portfolio
         •    T. Rowe Price Mid-Cap Growth Portfolio-II
         •    T. Rowe Price Blue Chip Growth Portfolio
         •    T. Rowe Price Blue Chip Growth Portfolio-II
         •    T. Rowe Price Equity Index 500 Portfolio
         •    T. Rowe Price Health Sciences Portfolio
         •    T. Rowe Price Health Sciences Portfolio-II
      T. Rowe Price Fixed Income Series, Inc.
         •    T. Rowe Price Limited-Term Bond Portfolio
         •    T. Rowe Price Limited-Term Bond Portfolio-II
         •    T. Rowe Price Prime Reserve Portfolio
      T. Rowe Price International Series, Inc.
         •    T. Rowe Price International Stock Portfolio

And any other portfolios or series of the Funds that are available and open to new investors on or after the effective date of this Agreement.

 

A-1

SCHEDULE C

EXPENSES

The Fund and/or the Underwriter and/or Adviser, and Company

will coordinate the functions and pay the costs of completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Fund’s share of the total costs determined according to the number of pages of the Fund’s respective portions of the documents. The Company in seeking reimbursement for such costs shall submit an invoice showing the allocation of the Fund’s share of the total costs, and the methodology by which such allocation was calculated.

 

Item    Function   

Party Responsible

for Coordination

   

Party

Responsible for

Expense

Fund Prospectus (Statutory and Summary Prospectuses)   

Printing of prospectuses, or compiling of electronic

prospectus, if needed in the future

    Company    Fund or Underwriter, as applicable
     Fund, Underwriter or Adviser shall supply Company with such- numbers of the Designated Portfolio(s) prospectus(es) as Company shall reasonably request    Company    Fund or Underwriter, as applicable
     Distribution to New and Inforce Clients    Company    Company
     Distribution to Prospective Clients    Company    Company
     Distribution to Clients in connection with initial rollout of Fund in connection with the Contracts    Company   

Fundor

Underwriter, as applicable

Fund Prospectus

Update (Statutory

and Summary Prospectuses) Update & Distribution

    If Required by Fund, Underwriter or Adviser   

Fund, Underwriter or

Adviser

   

Fund or

Underwriter, as

applicable

     If Required by    Company    Company

 

C-1

     Company          
Fund SAI    Printing    Fund, Underwriter or Adviser    Fund or Underwriter, as applicable
     Distribution    Company    Company
Proxy Material for Fund    Printing if proxy required by Law    Fund, Underwriter or Adviser    Fund or Underwriter
     Distribution (including labor) if proxy required by Law    Company    Fund or Underwriter
     Printing & distribution if required by Company    Company    Company
                
Fund Annual & Semi- Annual Report    Printing of reports    Company    Fund or Underwriter
     Distribution    Company    Company
Other communication to New and Prospective clients    If Required by the Fund, Underwriter or Adviser    Company    Fund or Underwriter, as applicable
     If Required by Company    Company    Company
Other communication to inforce    Distribution (including labor and printing) if required by the Fund, Underwriter or Adviser    Company    Fund or Underwriter, as applicable
     Distribution (including labor and printing) if required by Company    Company    Company
                
                
                
Substitution Orders    Application for, and implementation of (including necessary printing and mailings), substitution orders required as a result of Fund action    Company    Fund or Underwriter
Operations of the    All operations and    Fund, Underwriter    Fund or

 

C-2

Fund    related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by the fund pursuant to any Rule 12b-1 plan         Underwriter

 

C-3

SCHEDULE E

Compensating for Contract Owner Losses Caused by Pricing, Income, Dividend and Capital Gains Distribution Errors.

 In the event the Fund provides a materially incorrect price for the Fund, or provides incorrect income, dividend or capital gains distribution information for the Fund, through no fault of the Company, the Underwriter will adjust the Account with the Fund on a net basis to correct the shares in the account. The materiality of an incorrect price will be determined with reference to applicable SEC guidance. If the Company adjusts the underlying Contract owners’ accounts, those accounts with gains shall be used to offset those accounts with losses, including those Contract owners who received underpaid distributions (“Contract owner Adjustments”). After the Contract owner Adjustments, the Company will identify those Contract owners who received distributions or made exchanges into other investment options during the time period affected by the incorrect price or the incorrect dividend or distribution information. The Company will then notify the Underwriter of the amount of losses suffered as a result of (i) for an overstated price or overstated income, dividend or capital gains distributions, Contract owners whose accounts had a loss that could not be offset by the overpayments (gains) made to Contract owners who took distributions; or (ii) for an understated price or understated dividends or distributions, Contract owners who received underpaid distributions that could not be offset by gains in other Contract owner accounts; or (iii) for exchanges into other investment options, Contract owners whose accounts had a loss due to the adjustment in the other investment option (caused by market fluctuation of the other investment option) and such loss cannot be offset by the gains received by Contract owners who exchanged into other investment options where such fluctuation caused a gain. Upon receipt of appropriate documentation verifying such losses, the Underwriter shall reimburse the Account with the appropriate number of additional shares. Should the Company fail to collect overpayments made to those Contract owners who received distributions with a gain, the Company agrees to subrogate its claim against such Contract owner to the Fund, the Underwriter or its affiliate. Any net gains calculated after Contract owner Adjustments will be returned by the Company to the Underwriter.

Compensating the Company for its Expenses Incurred as a Result of Pricing, Income, Dividend or Capital Gains Distribution Errors.     Set forth below is the criteria that must be met before the Underwriter will reimburse the Company for expenses incurred due to pricing, income, dividend or capital gains distribution errors:

 

  •  

The Company must provide a full accounting of expenses;

 

  •  

A $5,000 cap will be imposed on each occurrence;

 

  •  

Expenses may include payroll overtime, system fees, postage and stationery (if separate mailing is required);

 

  •  

The Company must use its best efforts to mitigate all expenses which may be reimbursable; and

 

  •  

Expenses and payroll overtime shall not include any time spent customizing the Company’s systems to correct the error.

 

E-1

EX-99.(H)(109) 57 d694125dex99h109.htm EX-99.(H)(109) EX-99.(H)(109)

AMENDMENT TO PARTICIPATION AGREEMENT

This Amendment to Participation Agreement (the “Agreement”), made and entered into this 29th day of August, 2013 by and among Great-West Life & Annuity Insurance Company (“GWL&A”), Great-West Life & Annuity Insurance Company of New York (GWL&A-NY”), formerly known as First Great-West Life & Annuity Insurance Company (collectively the “Company”), T. Rowe Price Equity Series, Inc., T. Rowe Price Fixed Income Series, Inc., T. Rowe Price International Series, Inc. (collectively, the “Funds”) and T. Rowe Price Investment Services, Inc. (the “Underwriter”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the original Agreement (defined below).

WHEREAS, the Company, the Funds and the Underwriter are parties to a Participation Agreement dated February 1, 2002, as amended (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to add an additional separate Account; and

WHEREAS, the Parties desire and agree to amend the Agreement by deleting in its entirety Schedule A of the Agreement and replacing with the Schedule A attached hereto.

NOW, THEREFORE, in consideration of their mutual promises, the Parties agree as follows:

 

  1.

All references to the Account now include the COLI VUL-14 Series Account of GWL&A;

  2.

Schedule A of the Agreement is hereby replaced in its entirety with Schedule A as attached and incorporated by reference into this Amendment.

IN WITNESS WHEREOF, each of the Parties hereto has caused this Amendment to be executed in its name and behalf by its duly authorized officer.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By:  

/s/ Susan Gile

Name:   Susan Gile
Title:   V.P. Individual Markets
Date:   09/04/2013

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY OF NEW YORK

 

By:  

/s/ Ron Laeyendecker

Name:   Ron Laeyendecker
Title:   Senior Vice President
Date:   09/04/2013

T. ROWE PRICE INTERNATIONAL SERIES, INC.

 

By:  

/s/ David Oestreicher

Name:   David Oestreicher
Title:   Vice President
Date:   8/29/13

T. ROWE PRICE EQUITY SERIES, INC.

 

By:  

/s/ David Oestreicher

Name:   David Oestreicher
Title:   Vice President
Date:   8/29/13

T. ROWE PRICE FIXED INCOME SERIES, INC.

 

By:  

/s/ David Oestreicher

Name:   David Oestreicher
Title:   Vice President
Date:   8/29/13

T. ROWE PRICE INVESTMENT SERVICES, INC.

 

By:  

/s/ Fran Pollack-Matz

Name:   Fran Pollack-Matz
Title:   Vice President
Date:   8/29/13

SCHEDULE A

 

Name of Separate Account   

Date Established by Board of Directors

COLI VUL-7 Series Account of GWL&A

    November 23, 1999

COLI VUL-14 Series Account of GWL&A

    January 20, 2001

COLI VUL-1 Series Account of GWL&A-NY

    February 14, 2006

Variable Annuity-1 Series Account of GWL&A

    July 24, 1995

Variable Annuity-1 Series Account of GWL&A- NY

    January 15, 1997

Variable Annuity-2 Series Account of GWL&A

    June 25, 2009
Variable Annuity-2 Series Account of GWL&A- NY    September 13, 1989

Designated Portfolios

T. Rowe Price Equity Series, Inc.

  •  

T. Rowe Price Equity Income Portfolio

  •  

T. Rowe Price Equity Income Portfolio II

  •  

T. Rowe Price New America Growth Portfolio

  •  

T. Rowe Price Personal Strategy Balanced Portfolio

  •  

T. Rowe Price Mid-Cap Growth Portfolio

  •  

T. Rowe Price Mid-Cap Growth Portfolio II

  •  

T. Rowe Price Blue Chip Growth Portfolio

  •  

T. Rowe Price Blue Chip Growth Portfolio II

  •  

T. Rowe Price Equity Index 500 Portfolio

  •  

T. Rowe Price Health Sciences Portfolio

  •  

T. Rowe Price Health Sciences Portfolio II

T. Rowe Price Fixed Income Series, Inc.

  •  

T. Rowe Price Limited-Term Bond Portfolio

  •  

T. Rowe Price Limited-Term Bond Portfolio II

  •  

T. Rowe Price Prime Reserve Portfolio

T. Rowe Price International Series, Inc.

  •  

T. Rowe Price International Stock Portfolio

And any other portfolios or series of the Funds that are available and open to new investors on or after the effective date of this Agreement.

EX-99.(H)(110) 58 d694125dex99h110.htm EX-99.(H)(110) EX-99.(H)(110)

AMENDMENT TO PARTICIPATION AGREEMENT

This Amendment to Participation Agreement (the “Agreement”), made and entered into this 17th day of March, 2014 by and among Great-West Life & Annuity Insurance Company (“GWL&A”), Great-West Life & Annuity Insurance Company of New York (“GWL&A-NY”) (collectively the “Company”), T. Rowe Price Equity Series, Inc., T. Rowe Price Fixed Income Series, Inc., T. Rowe Price International Series, Inc. (collectively, the “Funds”) and T. Rowe Price Investment Services, Inc. (the “Underwriter”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the original Agreement (defined below).

WHEREAS, the Company, the Funds and the Underwriter are parties to a Participation Agreement dated February 1, 2002, as amended (the “Agreement”); and

WHEREAS, the Parties to the Agreement desire to add additional separate Accounts; and

WHEREAS, the Parties and agree to amend the Agreement by deleting in its entirety Schedule A of the Agreement and replacing with the Schedule A attached hereto.

NOW, THEREFORE, in consideration of their mutual promises, the Parties agree as follows:

 

    1.

All references to the Account now include the COLI VUL-2 Series Account of GWL&A;

    2.

All references to the Account now include the COLI VUL-2 Series Account of GWL&A-NY;

    3.

All references to the Account now include the COLI VUL 4 Series Account of GWL&A; and

    4.

Schedule A of the Agreement is hereby replaced in its entirety with Schedule A as attached and incorporated by reference into this Amendment.

IN WITNESS WHEREOF, each of the Parties hereto has caused this Amendment to be executed in its name and behalf by its duly authorized officer.

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY

 

By:  

/s/ Susan Gile

Name:   Susan Gile
Title:   VP- Individual Markets
Date:   3-17-2014

GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY OF NEW YORK

 

By:  

/s/ Ron Laeyendecker

Name:   Ron Laeyendecker
Title:   Senior Vice President
Date:   3-17-2014

 

Page 1 of 3

T. ROWE PRICE INTERNATIONAL SERIES, INC.

 

By:  

/s/ David Oestreicher

Name:   David Oestreicher
Title:   Vice President
Date:   3/25/14

T. ROWE PRICE EQUITY SERIES, INC.

 

By:  

/s/ David Oestreicher

Name:   David Oestreicher
Title:   Vice President
Date:   3/25/14

T. ROWE PRICE FIXED INCOME SERIES, INC.

 

By:  

/s/ David Oestreicher

Name:   David Oestreicher
Title:   Vice President
Date:   3/25/14

T. ROWE PRICE INVESTMENT SERVICES, INC.

 

By:  

/s/ Fran Pollack-Matz

Name:   Fran Pollack-Matz
Title:   Vice President
Date:   3/26/14

 

Page 2 of 3

SCHEDULE A

 

Name of Separate Account    Date Established by Board of Directors
COLI VUL-2 Series Account of GWL&A    November 25, 1997
COLI VUL-4 Series Account of GWL&A    November 25, 1997
COLI VUL-7 Series Account of GWL&A    November 23, 1999
COLI VUL-14 Series Account of GWL&A    January 20, 2001
COLI VUL-1 Series Account of GWL&A-NY    February 14, 2006
COLI VUL-2 Series Account of GWL&A-NY    February 14, 2006
Variable Annuity-1 Series Account of GWL&A    July 24, 1995
Variable Annuity-1 Series Account of GWL&A-NY    January 15, 1997
Variable Annuity-2 Series Account of GWL&A    June 25, 2009
Variable Annuity-2 Series Account of GWL&A-NY    September 13, 1989

Designated Portfolios

T. Rowe Price Equity Series, Inc.

  •  

T. Rowe Price Equity Income Portfolio

  •  

T. Rowe Price Equity Income Portfolio II

  •  

T. Rowe Price New America Growth Portfolio

  •  

T. Rowe Price Personal Strategy Balanced Portfolio

  •  

T. Rowe Price Mid-Cap Growth Portfolio

  •  

T. Rowe Price Mid-Cap Growth Portfolio II

  •  

T. Rowe Price Blue Chip Growth Portfolio

  •  

T. Rowe Price Blue Chip Growth Portfolio II

  •  

T. Rowe Price Equity Index 500 Portfolio

  •  

T. Rowe Price Health Sciences Portfolio

  •  

T. Rowe Price Health Sciences Portfolio II

T. Rowe Price Fixed Income Series, Inc.

  •  

T. Rowe Price Limited-Term Bond Portfolio

  •  

T. Rowe Price Limited-Term Bond Portfolio II

  •  

T. Rowe Price Prime Reserve Portfolio

T. Rowe Price International Series, Inc.

  •  

T. Rowe Price International Stock Portfolio

And any other portfolios or series of the Funds that are available and open to new investors on or after the effective date of this Agreement.

 

Page 3 of 3

EX-99.(H)(112) 59 d694125dex99h112.htm EX-99.(H)(112) EX-99.(H)(112)

AMENDMENT NO. 1 TO PARTICIPATION AGREEMENT

THIS AMENDMENT NO. 1 TO PARTICIPATION AGREEMENT, effective October 1, 2009, by and among, VAN ECK WORLDWIDE INSURANCE TRUST, VAN ECK SECURITIES CORPORATION, VAN ECK ASSOCIATES CORPORATION, GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”) and FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“First GWL&A”) (collectively, the “Parties”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement (defined below).

RECITALS

WHEREAS, the Parties entered into to a Participation Agreement dated October 11, 2007 (the “Agreement”) pertaining to segregated asset accounts established by GWL&A and First GWL&A (the “Accounts”); and

WHEREAS, the Parties desire and agree to amend the Agreement to include additional Accounts.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

 

1.

Schedule A of the Agreement is hereby replaced in its entirety with Schedule A as attached and incorporated by reference to this Amendment.

 

 

2.

All other terms and provisions of the Agreement shall remain in full force and effect.

[Intentionally Left Blank]

 

1

Schedule A

Designated Portfolios

Worldwide Hard Assets Fund – Initial Class, Worldwide Emerging Markets Fund – Initial Class, Worldwide Real Estate Fund – Initial Class, Worldwide Multi-Manager Alternatives Fund – Initial Class, and Worldwide Bond Fund – Initial Class, and any and all other portfolios of the Fund that are available and open to new investors on or after the effective date of this Agreement.

 

Separate Accounts

   

COLI VUL-1

   

COLI VUL-8

COLI VUL-2 (GWL&A)

   

COLI VUL-9

COLI VUL-2 (FGWL&A)

   

COLI VUL-10

COLI VUL-3

   

COLI VUL-11

COLI VUL-4 (GWL&A)

   

COLI VUL-12

COLI VUL-4 (GWL&A)

   

COLI VUL-13

COLI VUL-5

   

COLI VUL-14

COLI VUL-6

   

COLI VUL-15

COLI VUL-7

   

Varifund Variable Annuity Account Prestige

Variable Life Account

 

3

AMENDMENT NO. 2 TO SERVICE AGREEMENT

THIS AMENDMENT NO. 2 TO SERVICE AGREEMENT, effective October 1, 2009, by and among VAN ECK SECURITIES CORPORATION, GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“GWL&A”) and FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (“First GWL&A”) (collectively, the “Parties”) is made to a certain Service Agreement dated October 11, 2007, as amended, entered into by and among the Parties. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement (defined below).

RECITALS

WHEREAS, the Parties desire and agree to amend the Agreement to include additional Accounts.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties hereby amend the Agreement as follows:

 

 

1.

Exhibit B of the Agreement is hereby replaced in its entirety with Exhibit B as attached and incorporated by reference to this Amendment.

 

 

2.

All other terms and provisions of the Agreement shall remain in full force and effect.

[Intentionally Left Blank]

 

1

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the 6 day of Nov, 2009.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

      

  

By its authorized officer,

      

  

By:

  

/s/ Ron Laeyendecker

 

Name: Ron Laeyendecker

      

  

Title:   Senior Vice President

 

Date:   10/06/09

FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

      

  

By its authorized officer,

      

  

By:

  

/s/ Susan Gile

 

Name: Susan Gile

      

  

Title:   Vice President

 

Date:   10/06/09

VAN ECK SECURITIES CORPORATION

      

  

By its authorized officer,

      

  

By:

  

/s/ Peter Moeller

      

  

Name: Peter Moeller

 

Title: SVP

 

Date:

 

2

EXHIBIT B

NAME OF VARIABLE ACCOUNTS/CONTRACTS

Variable Annuity-1 Separate Account of GWL&A – Select

Variable Annuity-1 Separate Account of GWL&A – OneSource

Variable Annuity-1 Separate Account of First GWL&A – Select

Variable Annuity-1 Separate Account of First GWL&A – OneSource

Varifund Variable Annuity Account

Prestige Variable Life Account

 

COLI VUL-1

    COLI VUL-8

COLI VUL-2 (GWL&A)

    COLI VUL-9

COLI VUL-2 (FGWL&A)

    COLI VUL-10

COLI VUL-3

    COLI VUL-11

COLI VUL-4 (GWL&A)

    COLI VUL-12

COLI VUL-4 (GWL&A)

    COLI VUL-13

COLI VUL-5

    COLI VUL-14

COLI VUL-6

    COLI VUL-15

COLI VUL-7

   

 

3

EX-99.(H)(113) 60 d694125dex99h113.htm EX-99.(H)(113) EX-99.(H)(113)

AMENDMENT NO. 3 TO

SERVICE AGREEMENT

THIS AMENDMENT NO. 3 (“Amendment”) is made and entered into this 28th day of August, 2014 and amends that certain Service Agreement (the “Agreement”) dated October 11, 2007 by and among Great-West Life & Annuity Insurance Company, Great-West Life & Annuity Insurance Company of New York (formerly First Great-West Life & Annuity Insurance Company) and Van Eck Securities Corporation, as amended May 1, 2009 and October 1, 2009.

WHEREAS, the parties to the Agreement wish to amend the Agreement;

NOW, THEREFORE, in consideration of their mutual promises, the undersigned parties agree as follows:

 

  1.

Exhibit A of the Agreement is hereby deleted in its entirety and replaced with Exhibit A as attached and incorporated by reference to this Amendment.

 

  2.

Exhibit B of the Agreement is hereby deleted in its entirety and replaced with Exhibit B as attached and incorporated by reference to this Amendment.

 

  3.

All references in the Agreement to “First Great-West Life & Annuity Insurance Company” or to “FGWL&A” are hereby deleted and replaced with “Great-West Life & Annuity Insurance Company of New York” or “GWL&A NY”, as appropriate.

 

  4.

Except as expressly modified hereby, all other terms and conditions of the Agreement shall remain in full force and effect.

 

  5.

This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original and such counterparts together shall constitute one instrument.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties have caused their duly authorized officers to execute this Amendment as of the date and year first above written.

 

        

   GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
  By:  

/s/ Susan Gile

  
  Name: Susan Gile  
  Title:     VP- Individual Markets  
  GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK
  By:  

/s/ Ron Laeyendecker

  
  Name: Ron Laeyendecker  
  Title:    Senior Vice President  
  VAN ECK SECURITIES CORPORATION
  By:  

/s/ Bruce Smith

  
  Name: Bruce Smith  
  Title:     SVP and Chief Financial Officer  

EXHIBIT A

Initial Class and S Class of each series of Van Eck VIP Trust

EXHIBIT B

Name of Variable Accounts/Contracts

Variable Annuity–1 Series Account of GWL&A – Schwab Select Annuity

Variable Annuity–1 Series Account of GWL&A – Schwab OneSource Annuity

Variable Annuity–1 Series Account of GWL&A – Schwab OneSource Choice Variable Annuity

Variable Annuity–1 Series Account of GWL&A – Schwab Adviser Choice Variable Annuity

Variable Annuity–1 Series Account of GWL&A NY – Schwab Select Annuity

Variable Annuity–1 Series Account of GWL&A NY – Schwab OneSource Annuity

Variable Annuity–1 Series Account of GWL&A NY – Schwab OneSource Choice Variable Annuity

Variable Annuity–1 Series Account of GWL&A NY – Schwab Adviser Choice Variable Annuity

Variable Annuity–2 Series Account of GWL&A – Varifund

Variable Annuity–2 Series Account of GWL&A – Varifund Advisor

Variable Annuity–2 Series Account of GWL&A – Varifund Plus

Variable Annuity–2 Series Account of GWL&A – Great-West Smart Track Variable Annuity

Variable Annuity–2 Series Account of GWL&A – Great-West Smart Track II Variable Annuity Variable

Annuity–2 Series Account of GWL&A NY – Great-West Smart Track Variable Annuity

Variable Annuity–2 Series Account of GWL&A NY – Great-West Smart Track II Variable Annuity

Prestige Variable Life Account

 

COLI VUL-1   

COLI VUL-8

COLI VUL-2 (GWL&A)

   

COLI VUL-9

COLI VUL-2 (GWL&A NY)

   

COLI VUL-10

COLI VUL-3   

COLI VUL-11

COLI VUL-4 (GWL&A)

   

COLI VUL-12

COLI VUL-4 (GWL&A NY)

   

COLI VUL-13

COLI VUL-5   

COLI VUL-14

COLI VUL-6   

COLI VUL-15

COLI VUL-7   
EX-99.(H)(114) 61 d694125dex99h114.htm EX-99.(H)(114) EX-99.(H)(114)

TRUST PARTICIPATION AGREEMENT

Among

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK

Victory Variable Insurance Funds

Victory Capital Management Inc.

and

Victory Capital Advisers, Inc.

THIS TRUST PARTICIPATION AGREEMENT (the “Agreement”) is made and entered into as of this 1st day of May, 2018 (the “Effective Date”) by and among GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter “GWL&A”), a Colorado life insurance company, on its own behalf and on behalf of its separate account(s) listed on Schedule B attached hereto (the “GWL&A Account(s)”); GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK (hereinafter “GWL&ANY”), a New York life insurance company, on its own behalf and on behalf of its separate account(s) listed on Schedule B (the “GWL&ANY Account(s)”); (the GWL&A Account(s) and the GWL&ANY Account(s) may be referred to herein individually, or collectively as the “Accounts”) (GWL&A and GWL&ANY may be referred to herein individually, each as an “Insurance Party,” or collectively as the “Insurance Parties”); Victory Variable Insurance Trusts, a Delaware statutory trust (the “Trust”) on behalf of its series portfolios, individually and not jointly (collectively, the “Funds”, individually the “Fund”);, Victory Capital Management Inc., a New York Corporation (hereinafter the “Adviser”),; and Victory Capital Advisers, Inc., a (hereinafter the “Distributor”), (each a “Party” and collectively the “Parties”).

WHEREAS, the Trust is registered as an open-end management investment company under the Investment Company Act of 1940 (the “1940 Act”) and its shares are registered under the Securities Act of 1933, as amended (hereinafter the “1933 Act”); and

WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and

WHEREAS, the Distributor is duly registered as a broker-dealer under the Securities Exchange Act of 1934, as amended (the “1934 Act”) and is a member in good standing of the Financial Industry Regulatory Authority, Inc. (the “FINRA”); and

WHEREAS, the Insurance Parties have certain registered and unregistered variable annuity and variable life contracts supported wholly or partially by the Accounts (the “Contracts”) to be made available to owners thereof, including any participants or employees of such owners as applicable (“Contract Owners”); and

WHEREAS, to the extent required by applicable law, the Insurance Parties have registered the Account(s) as a unit investment trust under the 1940 Act unless excepted from registration pursuant to Section 3(c)(7) or Section 3(c)(11) of the 1940 Act, and have registered the securities deemed to be issued by the Account(s) under the 1933 Act unless exempt from registration; and

GWLA GWLANY Fund Participation Agreement (rev 03-2015)

WHEREAS, the GWL&A Account(s) is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of GWL&A, under the insurance laws of the State of Colorado, to set aside and invest assets attributable to the GWL&A Contracts, and the GWL&ANY Account(s) is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of GWL&ANY, under the insurance laws of the State of New York, to set aside and invest assets attributable to the GWL&ANY Contracts; and

WHEREAS, to the extent permitted by applicable laws and regulations, GWL&A and GWL&ANY intend to purchase shares in the Fund(s) listed in Schedule A attached hereto and incorporated herein by reference, as such Schedule may be amended from time to time by mutual written agreement (the “Designated Portfolio(s)”), on behalf of their respective Accounts to fund the applicable Contracts, and the Trust is authorized to sell such shares to unregistered unit investment trusts such as the Accounts at net asset value; and

WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Accounts also intend to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the “Unaffiliated Funds”) on behalf of the Accounts to fund the Contracts; and

WHEREAS, GWL&A has arrangements with GWL&ANY to provide administrative services, including certain services related to certain performances contemplated herein by GWL&ANY; and

WHEREAS, GWL&A and GWL&ANY intend to utilize their NSCC member broker/dealer affiliate, GWFS Equities, Inc. (“GWFS”), which is and at all times shall remain, duly registered with the SEC as a broker-dealer under the 1934 Act and a member of the FINRA, to transmit instructions for the purchase, redemption and transfer of Fund shares on behalf of the Accounts, and alone, or with the assistance of a recordkeeping affiliate, to perform certain recordkeeping functions associated with the transfer of Fund shares into and out of the Accounts in order to recognize certain organizational economies; and

NOW, THEREFORE, the Parties agree as follows:

ARTICLE I.    Sale of Fund Shares

1.1.          All purchases, redemptions and exchanges of Designated Portfolio shares for the Accounts, in addition to the pricing and correction thereof, of Designated Portfolio shares, shall be governed by and subject to the terms of the Trading and NSCC Fund/SERV Networking Agreement, by and between GWFS and Victory Portfolios, dated December 1, 2002, as amended.

1.2.          Notwithstanding Section 1.1 of this Agreement, if an adjustment is necessary to correct an error which has caused Contract owners to receive less than the amount to which they are entitled, the number of shares of the applicable sub-account of such Contract owners will be adjusted and the amount of any underpayments shall be credited by the Trust’s designee to GWL&A and GWL&ANY for crediting of such amounts to the applicable Contract owners accounts. Upon notification by the Trust’s designee of any overpayment due to an error, GWL&A or GWL&ANY, as applicable, shall promptly remit to the Trust any overpayment that has not been paid to Contract owners; in instances where over payment to Contract owners has been made, GWL&A or GWL&ANY as appropriate will make a good faith effort to recover any overpayment but shall not otherwise be affirmatively bound hereby to do so. . In no event will GWL&A or GWL&ANY be liable to Contract owners for any such adjustments or underpayment amounts

ARTICLE II.    Representations and Warranties

2.1.          GWL&A represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the GWL&A Account prior

 

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to any issuance or sale of units thereof as a segregated asset account under Colorado Law. GWL&ANY represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the GWL&ANY Account prior to any issuance or sale of units thereof as a segregated asset account under New York law.

2.2.         The Trust represents and warrants that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act and that the Trust is and shall remain registered under the 1940 Act. The Trust shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares.

2.3.        The Trust and Adviser agree to comply with applicable provisions and SEC staff interpretations of the 1940 Act to assure that the investment advisory or management fees paid to the Adviser by the Trust are in accordance with the requirements of the 1940 Act. To the extent that the Trust finances distribution expenses pursuant to Rule 12b-1, the Trust undertakes to have its Board, a majority of whom are not interested persons of the Trust, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses.

2.4.        The Trust represents and warrants that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with the Trust’s Prospectus and any Applicable Law. The Trust and Distributor represent and warrant that they will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with all Applicable Law. The Trust and Distributor shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by Applicable Law. The Insurance Parties will endeavor to keep each other and the Adviser informed of any change in state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a “Law Change”). In the event of a Law Change, the Trust agrees that it may (in its sole discretion) take any action required by a Law Change.

2.5.        The Trust represents and warrants that it is lawfully organized and validly existing under the laws of the State of Delaware and that it does and will comply in all material respects with the 1940 Act.

2.6        The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Trust in compliance in all material respects with the laws of the State of New York and any applicable state and federal securities laws.

2.7.        The Distributor represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Trust in compliance in all material respects with the laws of the State of Delaware and any applicable state and federal securities laws.

2.8.        The Trust and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Trust are, and shall continue to be at all times, covered by one or more blanket fidelity bonds or similar coverage for the benefit of the Trust in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bonds must include coverage for larceny and embezzlement and must be issued by a reputable bonding company.

2.9.        The Trust will promptly notify the Insurance Parties of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated

 

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Portfolio(s) and consult with the Insurance Parties in order to implement any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expenses by implementing them in conjunction with regular annual updates of the prospectus for the Contracts. The Trust agrees to share equitably in expenses incurred by the Insurance Parties as a result of actions taken by the Trust, consistent with the allocation of expenses contained in Schedule C attached hereto and incorporated herein by reference.

ARTICLE III.   Prospectuses and Proxy Statements; Voting

3.1.          If applicable state or federal laws or regulations require that prospectuses for the Trust be distributed to all Contract owners, then at least annually, the Distributor or Trust shall provide the Insurance Parties with as many copies of the Fund’s current prospectus as the Insurance Parties may reasonably request for marketing purposes (including distribution to Contract owners with respect to new sales of a Contract), with expenses to be borne in accordance with Schedule C. If requested by the Insurance Parties in lieu thereof, the Distributor or Trust shall provide such documentation (including a camera-ready copy and computer diskette of the Fund(s) current prospectus and other assistance as is reasonably necessary in order for the Insurance Parties once each year (or more frequently if the prospectuses are amended) to have the prospectus for the Contracts and the Fund’s prospectus printed together in one document. The Trust and Distributor agree that in the future, the Insurance Parties may request that the prospectus (and semi-annual and annual reports) for the Fund(s) describe only the Fund(s) and not name or describe any other portfolios or series that may be in the Trust, unless required by law. Should the Insurance Parties determine that they will make the prospectuses available in an electronic format, the Trust or Distributor, as applicable agree to assist the Insurance Parties in obtaining the required information from EDGAR and the expenses associated with this form of distribution will be borne in accordance with Schedule C.

3.2.          If applicable state or federal laws or regulations require that the Statement of Additional Information (“SAI”) for the Trust be distributed to all Contract owners, then the Trust or Distributor shall provide the Insurance Parties with copies of the Fund’s SAI or documentation thereof in such quantities, with expenses to be borne in accordance with Schedule C, as the Insurance Parties may reasonably require to permit timely distribution thereof to Contract owners. The Distributor and/or the Trust shall also provide SAIs to any Contract owner or prospective owner who requests such SAI from the Trust (although it is anticipated that such requests will be made to the Insurance Parties).

3.3.          The Trust, Distributor and/or Adviser shall provide the Insurance Parties with copies of the Trust’s proxy material, reports to stockholders and other communications to stockholders for the Designated Portfolio(s) in such quantity, with expenses to be borne in accordance with Schedule C, as the Insurance Parties may reasonably require to permit timely distribution thereof to Contract owners, as required by law.

3.4.          It is understood and agreed that, except with respect to information regarding an Insurance Party provided in writing by that Party, such Insurance Party is not responsible for the content of the prospectus or SAI for the Designated Portfolio(s).

3.5.          If and to the extent required by law each Insurance Party shall:

 

  (i)

solicit voting instructions from Contractowners;

 

  (ii)

vote the Designated Portfolio(s) shares held in the Accounts in accordance with instructions received from Contractowners; and

 

  (iii)

vote Designated Portfolio shares held in the Accounts for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contractowners, so long as and to the

 

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  extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. The Insurance Parties reserve the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law.

3.6.          The Trust will comply with all provisions of the 1940 Act requiring voting by shareholders, and in particular the Trust will either provide for annual meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not to require such meetings) or, as the Trust currently intends, comply with Section 16(c) of the 1940 Act (although the Trust is not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further, the Trust will act in accordance with the SEC’s interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the Commission may promulgate with respect thereto.

ARTICLE IV.   Sales Material and Information

4.1.          The Insurance Parties shall furnish, or shall cause to be furnished, to the Trust or its designee, a copy of each piece of sales literature or other promotional material that the Insurance Parties develop or propose to use and in which the Trust (or a Portfolio thereof), its Adviser or one of its sub-advisers or the Distributor is named in connection with the Contracts, at least ten (10) Business Days prior to its use. No such material shall be used if the Trust objects to such use within five (5) Business Days after receipt of such material.

4.2.          The Insurance Parties shall not give any information or make any representations or statements on behalf of the Trust in connection with the sale of the Contracts other than the information or representations contained in the registration statement, prospectus or SAI for the Trust shares, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by the Trust, Distributor or Adviser, except with the permission of the Trust, Distributor or Adviser.

4.3.          The Trust, the Distributor or the Adviser shall furnish, or shall cause to be furnished, to The Insurance Parties, a copy of each piece of sales literature or other promotional material in which the Insurance Parties and/or their separate account(s) are named at least ten (10) Business Days prior to its use. No such material shall be used if the Insurance Parties object to such use within five (5) Business Days after receipt of such material.

4.4.          The Trust and the Adviser shall not give any information or make any representations on behalf of the Insurance Parties or concerning the Insurance Parties, the Accounts, or the Contracts other than the information or representations contained in the Contracts, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by the Insurance Parties or their designee, except with the permission of the Insurance Parties.

4.5.          The Trust will provide to the Insurance Parties at least one complete copy of all registration statements, prospectuses, SAIs, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Designated Portfolio(s), contemporaneously with the filing of such document(s) with the SEC or FINRA or other regulatory authorities.

4.6.          The Insurance Parties will provide to the Trust at least one complete copy of all sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Accounts, contemporaneously with the filing of such document(s) with the SEC, FINRA, or other regulatory authority.

 

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4.7.          For purposes of Articles IV and VII, the phrase “sales literature and other promotional material” includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as the Internet or other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and shareholder reports, and proxy materials (including solicitations for voting instructions) and any other material constituting sales literature or advertising under the FINRA rules, the 1933 Act or the 1940 Act.

4.8.          At the request of any Party to this Agreement, each other Party will make available to the other Party’s independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any Party’s obligations under this Agreement.

ARTICLE V.   Fees and Expenses

5.1.          The Trust and the Adviser will pay certain fees in accordance with Schedule D. In addition, the Parties will bear certain expenses in accordance with Schedule C, as well as Articles III and V of this Agreement.

5.2.          All expenses incident to performance by the Trust, Distributor and the Adviser under this Agreement shall be paid by the appropriate Party, as further provided in Schedule C. The Trust shall ensure that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent required, in accordance with applicable state laws prior to their sale.

5.3.          The Parties shall bear the expenses of routine annual distribution (mailing costs) of the Fund(s) prospectus and distribution (mailing costs) of the Fund(s) proxy materials and reports to owners of Contracts offered by the Insurance Parties, which may be required by law, in accordance with Schedule C.

5.4          The Trust, the Distributor and the Adviser acknowledge that a principal feature of the Contracts is the Contract owner’s ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract’s cash value between funds and portfolios. The Trust and the Adviser agree to cooperate with the Insurance Parties in facilitating the operation of the Accounts and the Contracts as described in the prospectus for the Contracts, including but not limited to cooperation in facilitating transfers between Unaffiliated Funds.

ARTICLE VI.   Diversification and Qualification

6.1.          The Trust, Distributor and Adviser represent and warrant that the Trust and each Designated Portfolio thereof will at all times invest money from the Contracts in such a manner as to ensure that the Contracts will be treated as variable contracts under the Code and the regulations issued thereunder. Without limiting the scope of the foregoing, the Trust will at all times comply with Section 817(h) of the Code and Treasury Regulation §1.817-5, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications to such Section or Regulations. In the event of a breach of this Article VII by the Trust, it will take all reasonable steps (a) to notify the Insurance Companies of such breach and (b) to adequately diversify the Trust so as to achieve compliance within the grace period afforded by Regulation §1.817-5.

 

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6.2.        The Trust, the Distributor and the Adviser represent and warrant that the Trust and each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Internal Revenue Code of 1986, as amended (hereinafter the “Code”), and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect.

6.3.        The Trust, Distributor or Adviser will notify the Insurance Parties promptly upon having a reasonable basis for believing that the Trust or any Designated Portfolio has ceased to comply with the aforesaid Subchapter M qualification requirements or might not so comply in the future.

6.4.        Without in any way limiting the effect of Sections 7.2, 7.3 and 7.4 of this Agreement, and without in any way limiting or restricting any other remedies available to the Insurance Parties, the Adviser or Distributor will pay all costs associated with or arising out of any failure, or any anticipated or reasonably foreseeable failure, of the Trust or any Designated Portfolio to comply with Section 6.1, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed portfolio (including but not limited to an order pursuant to Section 26(c) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to the Insurance Parties and any federal income taxes or tax penalties and interest thereon (or “toll charges” or exactments or amounts paid in settlement) incurred by any of the Insurance Parties with respect to itself or owners of its Contracts in connection with any such failure or anticipated or reasonably foreseeable failure.

6.5.        The Trust at the Trust’s expense shall provide the Insurance Parties or their designees with reports certifying compliance with the aforesaid Subchapter M qualification requirements, at the times provided for; provided, however, that providing such reporting does not relieve the Trust of its responsibility for such compliance or of its liability for any non-compliance.

6.6        GWL&A represents that (a) it has established and maintains policies and procedures reasonably designed to detect and prevent the occurrence of transactions that would violate Rule 22c-1 under the 1940 Act and other applicable rules and regulations; and (b) it has reviewed its policies and procedures to ensure that they are adequate with respect to preventing violations of law and prospectus requirements related to timely order-taking and market timing activity[; and (c) that you will provide the confirmation set forth in Appendix D hereto].

6.7        GWL&A agrees to comply with applicable U.S. Department of Treasury and/or Office of Foreign Assets Control laws, regulations, requirements, and guidance (“OFAC Requirements”) by adopting compliance policies and procedures with respect to Policy owners’ investments in the Accounts. GWL&A agrees to comply with applicable money laundering and current transactions reporting laws, regulations, and government or regulatory guidance, including the use of a customer identification program, suspicious activity reporting, and recordkeeping requirements (collectively with the OFAC Requirements, the “AML Requirements”), and with any “anti-money laundering” guidelines as may be agreed to by the parties. GWL&A will ensure the ability of federal examiners to obtain information and records relating to AML Requirements. Upon the reasonable request of the Trust or its agent, and in accordance with AML Requirements, GWL&A with provide sufficient documentation regarding GWL&A’s compliance with AML Requirements.

ARTICLE VII.   Indemnification

 

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7.1.        Indemnification by the Insurance Parties

(a)         Each Insurance Party (solely with respect to their respective Account) agrees to indemnify and hold harmless the Trust, the Distributor and the Adviser and each of their respective officers and directors or trustees and each person, if any, who controls the Trust, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 7.1) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of such Insurance Party) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages or liabilities (or actions in respect thereof) or settlements are related to the sale or acquisition of the Trust’s shares or the Contracts and:

 

  (i)

arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the Contracts or sales literature or other promotional material for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Insurance Parties by or on behalf of the Adviser or Trust for use in the Contracts or sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or Trust shares; or

 

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in sales literature or other promotional material of the Trust not supplied by the Insurance Parties or persons under their control) or wrongful conduct of the Insurance Parties or persons under their control, with respect to the sale or distribution of the Contracts or Trust Shares; or

 

  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in sales literature or other promotional material of the Trust, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Trust by or on behalf of the Insurance Parties; or

 

  (iv)

arise as a result of any failure by the Insurance Parties to provide the services and furnish the materials under the terms of this Agreement; or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by the Insurance Parties in this Agreement or arise out of or result from any other material breach of this Agreement by the Insurance Parties,

as limited by and in accordance with the provisions of Sections 7.1(b) and 7.1(c) of this Agreement.

(b)  Each Insurance Party shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject solely by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties.

 

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(c)   Each Insurance Party shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party has notified such Insurance Party in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim has been served upon such Indemnified Party (or after such Indemnified Party has received notice of such service on any designated agent), but failure to notify such Insurance Party of any such claim shall not relieve such Insurance Party from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that such Insurance Party has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, such Insurance Party shall be entitled to participate, at its own expense, in the defense of such action. Such Insurance Party also shall be entitled to assume the defense thereof, with counsel satisfactory to the Party named in the action. After notice from the Insurance Party to such Party of the Insurance Party’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and such Insurance Party will not be liable to such Party under this Agreement for any legal or other expenses subsequently incurred by such Party independently in connection with the defense thereof other than reasonable costs of investigation.

(d)        The Indemnified Parties will promptly notify the affected Insurance Party(ies) of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Trust Shares or the Contracts or the operation of the Trust.

7.2.      Indemnification by the Adviser

(a)      The Adviser agrees to indemnify and hold harmless the Insurance Parties and their directors and officers and each person, if any, who controls an Insurance Party within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 7.2) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Trust’s shares or the Contracts and:

 

  (i)

arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Trust prepared by the Trust, the Distributor or the Adviser (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Adviser, the Distributor or the Trust by or on behalf of the Insurance Parties for use in the registration statement, prospectus or SAI for the Trust or in sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or the Trust shares; or

 

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Trust, the Distributor or the Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Trust shares; or

 

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  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to an Insurance Party by or on behalf of the Adviser, the Distributor or the Trust; or

 

  (iv)

arise as a result of any failure by the Trust, the Distributor or the Adviser to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by the Trust, the Distributor or the Adviser in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser, the Distributor or the Trust; or

 

  (vi)

arise out of or result from the incorrect or untimely calculation or reporting by the Trust, the Distributor or the Adviser of the daily net asset value per share or dividend or capital gain distribution rate;

as limited by and in accordance with the provisions of Sections 7.2(b) and 7.2(c). This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI.

(b) The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject solely by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties.

(c) The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party has notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim has been served upon such Indemnified Party (or after such Indemnified Party has received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the Party named in the action. After notice from the Adviser to such Party of the Adviser’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such Party under this Agreement for any legal or other expenses subsequently incurred by such Party independently in connection with the defense thereof other than reasonable costs of investigation.

(d) Each Insurance Party agrees to promptly notify the Adviser of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Accounts.

7.3.     Indemnification by the Trust

 

GWLA GWLANY Fund Participation Agreement (rev 03-2015)    Page 10 of 24

(a) The Trust, with respect to each Fund individually and not jointly, agrees to indemnify and hold harmless the Insurance Parties and their directors and officers and each person, if any, who controls an Insurance Party within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 7.3) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of the Trust) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may be required to pay or become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements, are related to the operations of the Trust and:

 

  (i)

arise as a result of any failure by the Trust to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or

 

  (ii)

arise out of or result from any material breach of any representation and/or warranty made by the Trust in this Agreement or arise out of or result from any other material breach of this Agreement by the Trust;

as limited by and in accordance with the provisions of Sections 7.3(b) and 7.3(c).

(b) The Trust shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties.

(c) The Trust shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party has notified the Trust in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim has been served upon such Indemnified Party (or after such Indemnified Party has received notice of such service on any designated agent), but failure to notify the Trust of any such claim shall not relieve it from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Trust has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Trust will be entitled to participate, at its own expense, in the defense thereof. The Trust shall also be entitled to assume the defense thereof, with counsel satisfactory to the Party named in the action. After notice from the Trust to such Party of the Trust’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Trust will not be liable to such Party under this Agreement for any legal or other expenses subsequently incurred by such Party independently in connection with the defense thereof other than reasonable costs of investigation.

(d) Each Insurance Party agrees to promptly notify the Trust of the commencement of any litigation or proceeding against itself or any of its respective officers or directors in connection with this Agreement, the issuance or sale of the Contracts, the operation of the Accounts, or the sale or acquisition of shares of the Trust.

7.4.     Indemnification by the Distributor

(a)      The Distributor agrees to indemnify and hold harmless the Insurance Parties and their directors and officers and each person, if any, who controls an Insurance Party within the meaning of Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 7.4) against any and

 

GWLA GWLANY Fund Participation Agreement (rev 03-2015)    Page 11 of 24

all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of the Distributor) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Trust’s shares or the Contracts and:

 

  (i)

arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Trust prepared by the Trust, Adviser or Distributor (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Adviser, the Distributor or Trust by or on behalf of the Insurance Parties for use in the registration statement or SAI or prospectus for the Trust or in sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or Trust shares; or

 

  (ii)

arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI, sales literature or other promotional material for the Contracts not supplied by the Distributor or persons under its control) or wrongful conduct of the Trust, the Distributor or Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Trust shares; or

 

  (iii)

arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to and Insurance Party by or on behalf of the Adviser, the Distributor or Trust; or

 

  (iv)

arise as a result of any failure by the Trust, Adviser or Distributor to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or

 

  (v)

arise out of or result from any material breach of any representation and/or warranty made by the Trust, Adviser or Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Trust, Adviser or Distributor; or

 

  (vi)

arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate;

as limited by and in accordance with the provisions of Sections 7.4(b) and 7.4(c). This indemnification is in addition to and apart from the responsibilities and obligations of the Distributor specified in Article VI.

(b)         The Distributor shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject solely by reason of such Indemnified Party’s willful misfeasance, bad faith, or negligence in the

 

GWLA GWLANY Fund Participation Agreement (rev 03-2015)    Page 12 of 24

performance or such Indemnified Party’s duties or by reason of such Indemnified Party’s reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties.

(c)      The Distributor shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party has notified the Distributor in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim has been served upon such Indemnified Party (or after such Indemnified Party has received notice of such service on any designated agent), but failure to notify the Distributor of any such claim shall not relieve the Distributor from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Distributor has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Distributor will be entitled to participate, at its own expense, in the defense thereof. The Distributor also shall be entitled to assume the defense thereof, with counsel satisfactory to the Party named in the action. After notice from the Distributor to such Party of the Distributor’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Distributor will not be liable to such Party under this Agreement for any legal or other expenses subsequently incurred by such Party independently in connection with the defense thereof other than reasonable costs of investigation.

(d)      Each Insurance Party agrees to promptly notify the Distributor of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Accounts.

ARTICLE VIII.     Applicable Law

8.1.      This Agreement will be construed and interpreted in accordance with the laws of the State of Colorado, without regard to the Colorado Conflict of Laws provisions.

8.2.      This Agreement is subject to the provisions of the 1933, 1934, and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the SEC may grant and the terms of this Agreement will be interpreted and construed in accordance therewith.

ARTICLE IX.    Termination

9.1.      This Agreement will terminate:

(a)       at the option of any Party, with or without cause, with respect to some or all Portfolios, upon six (6) months advance written notice delivered to the other Parties; provided, however, that such notice shall not be given earlier than six (6) months following the Effective Date of this Agreement; or

(b)       at the option of an Insurance Party by written notice to the other Parties with respect to any Portfolio based upon such Insurance Party’s determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; provided, however, that termination by only one Insurance Party will not terminate this Agreement as between the other Insurance Parties and the Trust, Distributor and Adviser; or

(c)       at the option of an Insurance Party by written notice to the other Parties with respect to any Portfolio in the event any of the Portfolio’s shares are not registered, issued or sold in accordance with applicable state and/ or federal law or such law precludes the use of such shares as the underlying investment media of the Contracts issued or to be issued by such Insurance Party; provided, however, that termination by

 

GWLA GWLANY Fund Participation Agreement (rev 03-2015)    Page 13 of 24

only one Insurance Party will not terminate this Agreement as between the other Insurance Parties and the Trust, Distributor and Adviser; or

(d)       at the option of the Trust, Distributor or Adviser in the event that formal administrative proceedings are instituted against any Insurance Party by the FINRA, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding such Insurance Party’s duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Trust shares, if, in each case, the Trust, Distributor or Adviser, as the case may be, reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of such Insurance Party to perform its obligations under this Agreement; or

(e)       at the option of an Insurance Party in the event that formal administrative proceedings are instituted against the Trust, the Distributor or the Adviser by the FINRA, the SEC, or any state securities or insurance department or any other regulatory body, if such Insurance Party reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of the Trust, the Distributor or the Adviser to perform their obligations under this Agreement; provided, however, that termination by only one Insurance Party will not terminate this Agreement as between the other Insurance Parties and the Trust, Distributor and Adviser; or

(f)       at the option of either the Trust, the Distributor or the Adviser, if (i) the Trust, the Distributor or Adviser, respectively, determines, in its sole judgment reasonably exercised in good faith, that an Insurance Party has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on such Insurance Party’s ability to perform its obligations under this Agreement, (ii) the Trust, the Distributor or Adviser notifies such Insurance Party of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by such Insurance Party and any other changes in circumstances since the giving of such a notice, the determination of the Trust, the Distributor or Adviser continues to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day will be the effective date of termination; provided, however, that termination under this subsection (f) with respect to only one Insurance Party will not terminate this Agreement as between the other Insurance Parties and the Trust, Distributor and Adviser; or

(g)       at the option of an Insurance Party, if (i) such Insurance Party determines, in its sole judgment reasonably exercised in good faith, that the Trust, the Distributor or Adviser has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Trust’s, Distributor’s or Adviser’s ability to perform its obligations under this Agreement, (ii) such Insurance Party notifies the Trust, Distributor or Adviser, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Trust, Distributor or Adviser and any other changes in circumstances since the giving of such a notice, the determination of such Insurance Party continues to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day will be the effective date of termination; provided, however, that termination by only one Insurance Party will not terminate this Agreement as between the other Insurance Parties and the Trust, Distributor and Adviser; or

(h)       at the option of any non-defaulting Party in the event of a material breach of this Agreement by any Party (the “Defaulting Party”) other than as described in 9.1(a)-(g); provided, that the non-defaulting Party gives written notice thereof to the Defaulting Party, with copies of such notice to all other non-defaulting Parties, and if such breach has not been remedied within thirty (30) days after such written notice is given, then the non-defaulting Party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the Defaulting Party.

 

GWLA GWLANY Fund Participation Agreement (rev 03-2015)    Page 14 of 24

9.2.     Notice Requirement. No termination of this Agreement will be effective unless the Party terminating this Agreement gives prior written notice to all other Parties of its intent to terminate, which notice must set forth the basis for the termination. Furthermore:

(a)      in the event any termination is based upon the provisions of Section 9.1(a), 9.1(f), 9.1(g) or 9.1(h) of this Agreement, the prior written notice must be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the Parties;

(b)       in the event any termination is based upon the provisions of Section 9.1(d) or 9.1(e) of this Agreement, the prior written notice must be given at least sixty (60) days before the effective date of termination; and

(c)       in the event any termination is based upon the provisions of Section 9.1(b) or 9.1(c), the prior written notice must be given in advance of the effective date of termination, which date will be determined by the Party sending the notice.

9.3.     Effect of Termination. Notwithstanding any termination of this Agreement, the Trust, the Distributor and the Adviser shall, at the option of the Insurance Parties, continue to make available additional shares of the Designated Portfolio(s) pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as “Existing Contracts”). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolio(s), redeem investments in the Designated Portfolio(s) and/or invest in the Designated Portfolio(s) upon the making of additional purchase payments under the Existing Contracts.

9.4.     Surviving Provisions. Notwithstanding any termination of this Agreement, each Party’s obligations under Article VII, Section 11.1, and Section 11.5 will survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement will also survive and not be affected by any termination of this Agreement.

ARTICLE X.    Notices

Any notice will be sufficiently given when sent by registered or certified mail to the other Party at the address of such Party set forth below or at such other address as such Party may from time to time specify in writing to the other Parties.

If to GWL&A:

Great-West Life & Annuity Insurance Company

8515 East Orchard Road

Greenwood Village, CO 80111

Attn: Beverly Byrne, Chief Legal Counsel, Financial Services

If to GWL&ANY:

Great-West Life & Annuity Insurance Company of New York

c/o Great-West Life & Annuity Insurance Company

8515 East Orchard Road

Greenwood Village, CO 80111

 

GWLA GWLANY Fund Participation Agreement (rev 03-2015)    Page 15 of 24

Attn: Beverly Byrne, Chief Legal Counsel, Financial Services

If to the Trust:

Victory Variable Insurance Funds

4900 Tiedeman Road, 4th Floor

Brooklyn, Ohio 44144

Attention: General Counsel

If to the Adviser:

Victory Capital Management Inc.

4900 Tiedeman Road, 4th Floor

Brooklyn, Ohio 44144

Attention: General Counsel

If to the Distributor:

Victory Capital Advisers, Inc.

4900 Tiedeman Road, 4th Floor

Brooklyn, Ohio 44144

Attention: General Counsel

ARTICLE XI.    Miscellaneous

11.1.     Subject to the requirements of legal process and regulatory authority, each Party shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other Party and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected Party until such time as such information may come into the public domain. Without limiting the foregoing, no Party shall disclose any information that another Party has designated as proprietary.

11.2.     The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect.

11.3.     This Agreement may be executed simultaneously in two or more counterparts, each of which taken together constitutes one and the same instrument. Any signature that is delivered by facsimile transmission or by email delivery of a ‘pdf’ format data file will create a valid and binding obligation of the Party executing with the same force and effect as if such facsimile or ‘pdf’ signature were an original thereof.

11.4.     If any provision of this Agreement is held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement will not be affected thereby.

11.5.     Each Party shall cooperate with each other Party and all appropriate governmental authorities (including without limitation the SEC, the FINRA and state insurance regulators) and shall permit such other Party and authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each Party further agrees to furnish the Colorado and/or New York Insurance

 

GWLA GWLANY Fund Participation Agreement (rev 03-2015)    Page 16 of 24

Commissioner(s) with any information or reports in connection with services provided under this Agreement which such Commissioner may reasonably request in order to ascertain whether the variable annuity operations of GWL&A and/or GWL&ANY are being conducted in a manner consistent with the applicable state’s applicable laws or regulations.

11.6.     The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the Parties are entitled to under state and federal laws.

11.7     This Agreement may not be amended except by a writing signed by each of the Parties. The terms or provisions of this Agreement may be waived only by a writing signed by the Party waiving compliance. No waiver by any Party of any term or provision of this Agreement will be deemed to be a continuing waiver, or deemed to be a waiver of any other term or provision of this Agreement.

11.8.     This Agreement or any of the rights and obligations hereunder may not be assigned by any Party without the prior written consent of all Parties.

11.9.     Each Insurance Party is hereby expressly put on notice of the limitation of liability as set forth in the Declarations of Trust of the Trust and agree that the obligations assumed by the Trust, the Distributor and the Adviser pursuant to this Agreement are limited in any case to the Trust and Adviser and their respective assets and the Insurance Parties shall not seek satisfaction of any such obligation from the shareholders of the Trust, officers, employees or agents of the Trust, if an applicable trust.

11.10.     The Trust, the Distributor and the Adviser agree that the obligations assumed by each Insurance Party pursuant to this Agreement are limited in any case to the applicable Insurance Party and its assets and neither the Trust, Distributor nor Adviser shall seek satisfaction of any such obligation from the shareholders of any of the Insurance Parties, the directors, officers, employees or agents of any of the Insurance Parties, or any of them, except to the extent permitted under this Agreement.

11.11.     No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Adviser, the Distributor and the Trust.

11.12.     None of the Parties shall be liable to the other for any and all losses, damages, costs, charges, counsel fees, payments, expenses or liability due to any failure, delay or interruption in performing its obligations under this Agreement, and without the fault or negligence of such Party, due to causes or conditions beyond its control including, without limitation, labor disputes, strikes (whether legal or illegal), lock outs (whether legal or illegal), civil commotion, riots, war and war-like operations including acts of terrorism, embargoes, epidemics, invasion, rebellion, hostilities, insurrections, explosions, floods, unusually severe weather conditions, earthquakes, military power, sabotage, governmental regulations or controls, failure of power, fire or other casualty, accidents, national or local emergencies, boycotts, picketing, slow-downs, work stoppages, acts of God or natural disasters, provided that such failure or delay was not capable of mitigation pursuant to a prudent business continuity, disaster recovery or similar program.

11.13.     The Trust is governed by a Trust Instrument of the Trust, as amended, and notice is hereby given that this instrument is executed on behalf of the Trust as officers of the Trust and not individually and that the obligations of this instrument are not binding upon any of the Trustees, officers, or Shareholders individually but are binding only upon the assets and property of the Portfolios. The Company further acknowledges that the assets and liabilities of each Portfolio are separate and distinct and that the obligations of or arising out of this instrument are binding solely upon the assets or property of the Portfolio on whose behalf the Trust has executed this instrument. The Company also agrees that the obligations of each Portfolio hereunder shall be separate and not joint, and the Company agrees to look solely to the assets and property of

 

GWLA GWLANY Fund Participation Agreement (rev 03-2015)    Page 17 of 24

the respective Portfolios listed on Schedule B hereto as though each such Portfolio had separately contracted with the Company for the enforcement of any claims against the Trust.

11.14.     This Agreement sets forth the entire agreement and understanding of the Parties relating to the subject matter hereof, and supersedes all other prior agreements, arrangements, and understandings, whether written or oral, between the Parties.

(The remainder of this page intentionally left blank; signature page to follow)

 

GWLA GWLANY Fund Participation Agreement (rev 03-2015)    Page 18 of 24

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on its behalf by its duly authorized representative, to be effective as of the Effective Date.

 

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By: /s/ Ron Laeyendecker                                         
Name: Ron Laeyendecker                                         
Title: Senior Vice-President                                      
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY OF NEW YORK
By:  /s/ Ron Laeyendecker                                         
Name: Ron Laeyendecker                                         
Title: Senior Vice-President                                     

VICTORY VARIABLE INSURANCE FUNDS,

on behalf of its series portfolios, individually and not jointly

By:  /s/ Christopher Dyer                                         
Name: Christopher Dyer                                            
Title: President                                                         
VICTORY CAPITAL MANAGEMENT INC.
By: /s/ Michael Policarpo                                             
Name: Michael Policarpo                                             
Title: COO                                                                        
VICTORY CAPITAL ADVISERS, INC.
By: /s/ Michael Policarpo                                             
Name: Michael Policarpo                                             
Title: President                                                         

(Schedule A to follow)

 

GWLA GWLANY Fund Participation Agreement (rev 03-2015)    Page 19 of 24

SCHEDULE A

DESIGNATED PORTFOLIOS

Any portfolios or series of the Trust that are available, or which become available to new investors on or after the Effective Date of this Agreement.

(Schedule B to follow)

 

GWLA GWLANY Trust Participation Agreement (rev 03-2015)    Page 20 of 24

SCHEDULE B

SEPARATE ACCOUNTS

GWL&A Accounts

FutureFunds Series Account

FutureFunds II Series Account

Variable Annuity-1 Series Account

Variable Annuity-2 Series Account

Variable Annuity Account 5

COLI VUL-2 Series Account

COLI VUL-4 Series Account

COLI VUL-7 Series Account

DB-1 Series Account

GWL&ANY Accounts

FutureFunds II Series Account

Variable Annuity-1 Series Account

Variable Annuity-2 Series Account

Variable Annuity Account 5

COLI VUL-1 Series Account

COLI VUL-2 Series Account

DB-1 Series Account

(Schedule C to follow)

 

GWLA GWLANY Trust Participation Agreement (rev 03-2015)    Page 21 of 24

SCHEDULE C

EXPENSES

The Trust and/or Adviser, and the Insurance Parties (“GWL&A” in this Schedule C) will coordinate the functions and pay the costs of completing these functions based upon an allocation of costs in the tables below.

 

           
Item    Function         

Party Responsible

for Coordination

      

   

Party

Responsible

for Expense

           
Mutual Fund Prospectus   

Printing of combined prospectuses, or

compiling of electronic prospectus, if

needed in the future

         GWL&A        

Trust or

Adviser, as

applicable

           
    

Trust or Adviser shall supply GWL&A

with such numbers of the Designated

Portfolio(s) prospectus(es) as GWL&A

reasonably requests

         GWL&A        

Trust or

Adviser, as

applicable

           
     Distribution to New and Inforce Clients         GWL&A        

GWL&A

           
     Distribution to Prospective Clients         GWL&A        

GWL&A

           

Mutual Fund Prospectus

Update & Distribution

    If Required by Trust or Adviser         Trust or Adviser        

Trust or

Adviser

           
     If Required by GWL&A         GWL&A        

GWL&A

           
Mutual Fund SAI    Printing         Trust or Adviser        

Trust or

Adviser

           
     Distribution         GWL&A        

GWL&A

           

Proxy Material for

Mutual Fund:

    Printing if proxy required by Law         Trust or Adviser        

Trust or

Adviser

           
    

Distribution to Contractowners (including labor, if required) if proxy

required by Law

         GWL&A        

Trust or

Adviser

           
    

Printing & distribution if required by

GWL&A

         GWL&A        

GWL&A

           

Mutual Fund Annual &

Semi-Annual Report

    Printing of combined reports         GWL&A        

Trust or

Adviser

           
     Distribution         GWL&A        

GWL&A

           

Other communication to

New and Prospective

clients

    If Required by the Trust or Adviser         GWL&A        

Trust or

Adviser

           
     If Required by GWL&A         GWL&A        

GWL&A

           

Other communication to

Inforce Clients

   

Distribution (including labor and

printing) if required by the Trust or

Adviser

         GWL&A        

Trust or

Adviser

           
     Distribution (including labor and         GWL&A        

GWL&A

 

GWLA GWLANY Trust Participation Agreement (rev 03-2015)    Page 22 of 24

           
Item    Function         

Party Responsible

for Coordination

   

  

   

Party

Responsible

for Expense

           
     printing) if required by GWL&A                  
           

Errors in Share Price

calculation

    Cost of error to participants         GWL&A        

Trust or

Adviser

           
     Cost of administrative work to correct error         GWL&A        

Trust or

Adviser

           
Operations of the Fund   

All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Trust, and expenses paid or assumed by the Trust pursuant to any Rule 12b-1 plan

 

         Trust or Adviser        

Trust or

Adviser

(Schedule D to follow)

 

GWLA GWLANY Trust Participation Agreement (rev 03-2015)    Page 23 of 24

SCHEDULE D

ADMINISTRATIVE SERVICES

 

A.

The Insurance Parties, or an affiliate, will provide the properly registered and licensed personnel and systems needed for all customer servicing and support – for both fund and annuity information and questions – including:

responding to Contract owner inquiries;

delivering prospectuses – both fund and annuity;

entering initial and subsequent orders;

transferring cash to insurance company and/or funds;

explaining fund objectives and characteristics;

entering transfers between funds;

responding to fund balance and allocation inquiries;

mailing fund prospectus.

 

B.

The Insurance Parties, or an affiliate, will communicate all purchase, withdrawal, and exchange orders it receives from its customers to each Designated Portfolio.

Administrative Service Fee

For the services, the Distributor agrees to pay or cause to be paid to the Insurance Parties or their affiliate a fee of 0.10% per annum of the average aggregate daily net asset value of shares of the Designated Portfolio(s) held in the Accounts. Such fee shall be paid in arrears quarterly. Each quarterly fee will be determined based on assets in the Accounts and each quarterly fee will be independent of every other quarterly fee. Such fee shall be due and payable automatically within 20 (twenty) days after the last day of the quarter to which such payment relates.

The Trust or its designee will calculate and the Insurance Parties will verify the asset balance for each day on which the fee is to be paid pursuant to this Agreement with respect to each Designated Portfolio.

12b-1 Distribution Related Fees

The Distributor agrees to pay or cause to be paid to the Insurance Parties or their affiliate a fee of 0.25% per annum of the average aggregate daily net asset value of any class of shares of a Designated Portfolio(s) held in the Accounts that has adopted a distribution and service plan pursuant to Rule 12b-1. Such fee shall be paid in arrears, quarterly. Each quarterly fee will be determined based on assets in the Accounts and each quarterly fee will be independent of every other quarterly fee. Such fee shall be due and payable automatically within 20 (twenty) days after the last day of the quarter to which such payment relates.

Recordkeeping Fees

The Distributor agrees to pay or cause to be paid to GWFS an annual fee of 0.00% of the average aggregate daily net asset value of shares of the Trust or its Portfolios held in Omnibus Accounts. Such fee shall be paid in arrears, quarterly. Each quarterly fee will be determined based on assets in the accounts and each quarterly fee will be independent of every other quarterly fee.

 

GWLA GWLANY Trust Participation Agreement (rev 03-2015)    Page 24 of 24
 EX-99.(N)(1) 62 d694125dex99n1.htm EX-99.(N)(1) EX-99.(N)(1)

 

LOGO

 

ATTORNEYS AT LAW

 

1025 Thomas Jefferson Street, NW | Suite 400 West

Washington, DC 20007-5208

202.965.8100 | fax 202.965.8104

www.carltonfields.com

 

Atlanta

Hartford

Los Angeles

Miami

New York

Orlando

Short Hills, NJ

Tallahassee

Tampa

Washington, DC

West Palm Beach

Exhibit n(1)

April 22, 2019

Great-West Life & Annuity Insurance Company

8515 East Orchard Road

Greenwood Village, Colorado 80111

Re: COLI VUL-2 Series Account

Post-Effective Amendment No. 36 to Registration Statement on Form N-6

File Nos. 333-70963 and 811-09201

Ladies and Gentlemen:

We have acted as counsel to Great-West Life & Annuity Insurance Company, a Colorado corporation, regarding the federal securities laws applicable to the issuance and sale of the policies described in the above-referenced registration statement. We hereby consent to the reference to our name under the caption “Legal Matters” in the prospectus filed as part of the above-referenced registration statement. In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933.

 

Very truly yours,
/s/ Carlton Fields, P.A.
Carlton Fields, P.A.

 

 

Carlton Fields, P.A.

Carlton Fields, P.A. practices law in California through Carlton Fields, LLP.

EX-99.(N)(2) 63 d694125dex99n2.htm EX-99.(N)(2) EX-99.(N)(2)

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the use in this Post-Effective Amendment No. 36 to Registration Statement No. 333-70963 of the COLI VUL-2 Series Account of Great-West Life & Annuity Insurance Company (the “Company”) on Form N-6 of our report dated April 8, 2019 on the financial statements and financial highlights of each of the investment divisions of the COLI VUL-2 Series Account of the Company and of our report dated March 19, 2019 on the statutory financial statements of the Company, appearing in the Statement of Additional Information, which is part of such Registration Statement.

We also consent to the references to us as experts under the heading “Independent Registered Public Accounting Firm” in the Prospectus and in the Statement of Additional Information, which are part of such Registration Statement.

/s/ DELOITTE & TOUCHE LLP

Denver, Colorado

April 22, 2019

EX-99.(R) 64 d694125dex99r.htm EX-99.(R) EX-99.(R)

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I, John L. Bernbach, a member of the Board of Directors of Great-West Life & Annuity Insurance Company (the “Company”), a Colorado corporation, do hereby constitute and appoint Richard G. Schultz and Ryan L. Logsdon, and each of them (with full power to each of them to act alone), as my true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for me and in my name, place and stead, in any and all capacities to execute and file any and all reports (and amendments thereto) by the Company under the Securities Exchange Act of 1934 (including but not limited to any report on Form 10-K) and any and all registration statements by the Company or its separate accounts relating to annuity contracts and life insurance policies under the Securities Act of 1933 and/or the Investment Company Act of 1940, and any and all amendments thereto, including the “Registration Statements,” as defined below, with all exhibits, instruments, and other documents necessary or appropriate in connection therewith, and to file with the Securities and Exchange Commission or any other regulatory authority as may be necessary or desirable, hereby ratifying and confirming all and every act and thing requisite to all intents and purposes that said attorney in fact and agent or his or her substitute, may lawfully do or cause to be done by virtue hereof. This Power of Attorney does not revoke any prior power of attorney.

The “Registration Statements” covered by the Power of Attorney are defined to include the registration statements listed below:

 

Registration Statement Name    Securities Act File Number  
COLI VUL 2 Series Account (811-09201)    333-70963
FutureFunds Series Account (811-03972)    002-89550
FutureFunds Series Account -- FutureFunds Select (811-03972)    333-158546
Variable Annuity-1 Series Account -- Schwab OneSource Annuity (811-07549)    333-52956
Variable Annuity-1 Series Account -- Schwab OneSource Choice Variable Annuity (811-07549)    333-194043
Variable Annuity-1 Series Account -- Schwab Advisor Choice Variable Annuity (811-07549)    333-194099
Variable Annuity-2 Series Account -- Great-West Smart Track Variable Annuity (811-05817)    333-176926
Variable Annuity-2 Series Account -- Great-West Smart Track II Variable Annuity (811-05817)    333-189114
Variable Annuity-2 Series Account -- Great-West Smart Track II – 5 Year Variable Annuity (811-05817)    333-203262
Variable Annuity-2 Series Account -- Great-West Smart Track Advisor Variable Annuity (811-05817)    333-212090
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203627
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203628
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-217292
Great-West Secure-Foundation Group Fixed Deferred Annuity Contract    333-217293
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-209902
Great-West Capital Choice and Capital Choice Select Index-Linked Annuity    333-219410
Great-West Capital Choice Advisor and Capital Choice Select Advisor Index-Linked Annuity    333-219412
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for index-linked investment options to be offered in connection with the Great-West Capital ChoiceTM line of index-linked annuity products.    333-
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for future iterations of the Great-West Capital ChoiceTM line of index-linked annuity products or similar index-linked annuity products.    333-
Form S-1, S-3, N-3, N-4 or N-6 Registration Statements to be filed, as necessary, including but not limited to any Registration Statement filed to continue the offering of, and/or register more securities for, any securities offered by the Registration Statements identified above.    333-

IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of January, 2019.

 

 

/s/ John L. Bernbach

                                       
  John L. Bernbach  
  Member, Board of Directors  
  Great-West Life & Annuity Insurance Company              

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I, Robin Bienfait, a member of the Board of Directors of Great-West Life & Annuity Insurance Company (the “Company”), a Colorado corporation, do hereby constitute and appoint Richard G. Schultz and Ryan L. Logsdon, and each of them (with full power to each of them to act alone), as my true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for me and in my name, place and stead, in any and all capacities to execute and file any and all reports (and amendments thereto) by the Company under the Securities Exchange Act of 1934 (including but not limited to any report on Form 10-K) and any and all registration statements by the Company or its separate accounts relating to annuity contracts and life insurance policies under the Securities Act of 1933 and/or the Investment Company Act of 1940, and any and all amendments thereto, including the “Registration Statements,” as defined below, with all exhibits, instruments, and other documents necessary or appropriate in connection therewith, and to file with the Securities and Exchange Commission or any other regulatory authority as may be necessary or desirable, hereby ratifying and confirming all and every act and thing requisite to all intents and purposes that said attorney in fact and agent or his or her substitute, may lawfully do or cause to be done by virtue hereof. This Power of Attorney does not revoke any prior power of attorney.

The “Registration Statements” covered by the Power of Attorney are defined to include the registration statements listed below:

 

Registration Statement Name    Securities Act File Number  
COLI VUL 2 Series Account (811-09201)    333-70963
FutureFunds Series Account (811-03972)    002-89550
FutureFunds Series Account -- FutureFunds Select (811-03972)    333-158546
Variable Annuity-1 Series Account -- Schwab OneSource Annuity (811-07549)    333-52956
Variable Annuity-1 Series Account -- Schwab OneSource Choice Variable Annuity (811-07549)    333-194043
Variable Annuity-1 Series Account -- Schwab Advisor Choice Variable Annuity (811-07549)    333-194099
Variable Annuity-2 Series Account -- Great-West Smart Track Variable Annuity (811-05817)    333-176926
Variable Annuity-2 Series Account -- Great-West Smart Track II Variable Annuity (811-05817)    333-189114
Variable Annuity-2 Series Account -- Great-West Smart Track II – 5 Year Variable Annuity (811-05817)    333-203262
Variable Annuity-2 Series Account -- Great-West Smart Track Advisor Variable Annuity (811-05817)    333-212090
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203627
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203628
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-217292
Great-West Secure-Foundation Group Fixed Deferred Annuity Contract    333-217293
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-209902
Great-West Capital Choice and Capital Choice Select Index-Linked Annuity    333-219410
Great-West Capital Choice Advisor and Capital Choice Select Advisor Index-Linked Annuity    333-219412
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for index-linked investment options to be offered in connection with the Great-West Capital ChoiceTM line of index-linked annuity products.    333-
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for future iterations of the Great-West Capital ChoiceTM line of index-linked annuity products or similar index-linked annuity products.    333-
Form S-1, S-3, N-3, N-4 or N-6 Registration Statements to be filed, as necessary, including but not limited to any Registration Statement filed to continue the offering of, and/or register more securities for, any securities offered by the Registration Statements identified above.    333-

IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of January, 2019.

 

 

/s/ Robin Bienfait

                                       
  Robin Bienfait  
  Member, Board of Directors  
  Great-West Life & Annuity Insurance Company              

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I, Marcel R. Coutu, a member of the Board of Directors of Great-West Life & Annuity Insurance Company (the “Company”), a Colorado corporation, do hereby constitute and appoint Richard G. Schultz and Ryan L. Logsdon, and each of them (with full power to each of them to act alone), as my true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for me and in my name, place and stead, in any and all capacities to execute and file any and all reports (and amendments thereto) by the Company under the Securities Exchange Act of 1934 (including but not limited to any report on Form 10-K) and any and all registration statements by the Company or its separate accounts relating to annuity contracts and life insurance policies under the Securities Act of 1933 and/or the Investment Company Act of 1940, and any and all amendments thereto, including the “Registration Statements,” as defined below, with all exhibits, instruments, and other documents necessary or appropriate in connection therewith, and to file with the Securities and Exchange Commission or any other regulatory authority as may be necessary or desirable, hereby ratifying and confirming all and every act and thing requisite to all intents and purposes that said attorney in fact and agent or his or her substitute, may lawfully do or cause to be done by virtue hereof. This Power of Attorney does not revoke any prior power of attorney.

The “Registration Statements” covered by the Power of Attorney are defined to include the registration statements listed below:

 

Registration Statement Name    Securities Act File Number  
COLI VUL 2 Series Account (811-09201)    333-70963
FutureFunds Series Account (811-03972)    002-89550
FutureFunds Series Account -- FutureFunds Select (811-03972)    333-158546
Variable Annuity-1 Series Account -- Schwab OneSource Annuity (811-07549)    333-52956
Variable Annuity-1 Series Account -- Schwab OneSource Choice Variable Annuity (811-07549)    333-194043
Variable Annuity-1 Series Account -- Schwab Advisor Choice Variable Annuity (811-07549)    333-194099
Variable Annuity-2 Series Account -- Great-West Smart Track Variable Annuity (811-05817)    333-176926
Variable Annuity-2 Series Account -- Great-West Smart Track II Variable Annuity (811-05817)    333-189114
Variable Annuity-2 Series Account -- Great-West Smart Track II – 5 Year Variable Annuity (811-05817)    333-203262
Variable Annuity-2 Series Account -- Great-West Smart Track Advisor Variable Annuity (811-05817)    333-212090
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203627
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203628
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-217292
Great-West Secure-Foundation Group Fixed Deferred Annuity Contract    333-217293
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-209902
Great-West Capital Choice and Capital Choice Select Index-Linked Annuity    333-219410
Great-West Capital Choice Advisor and Capital Choice Select Advisor Index-Linked Annuity    333-219412
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for index-linked investment options to be offered in connection with the Great-West Capital ChoiceTM line of index-linked annuity products.    333-
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for future iterations of the Great-West Capital ChoiceTM line of index-linked annuity products or similar index-linked annuity products.    333-
Form S-1, S-3, N-3, N-4 or N-6 Registration Statements to be filed, as necessary, including but not limited to any Registration Statement filed to continue the offering of, and/or register more securities for, any securities offered by the Registration Statements identified above.    333-

IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of January, 2019.

 

 

/s/ Marcel R. Coutu

                                       
  Marcel R. Coutu  
  Member, Board of Directors  
  Great-West Life & Annuity Insurance Company              

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I, André R. Desmarais, a member of the Board of Directors of Great-West Life & Annuity Insurance Company (the “Company”), a Colorado corporation, do hereby constitute and appoint Richard G. Schultz and Ryan L. Logsdon, and each of them (with full power to each of them to act alone), as my true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for me and in my name, place and stead, in any and all capacities to execute and file any and all reports (and amendments thereto) by the Company under the Securities Exchange Act of 1934 (including but not limited to any report on Form 10-K) and any and all registration statements by the Company or its separate accounts relating to annuity contracts and life insurance policies under the Securities Act of 1933 and/or the Investment Company Act of 1940, and any and all amendments thereto, including the “Registration Statements,” as defined below, with all exhibits, instruments, and other documents necessary or appropriate in connection therewith, and to file with the Securities and Exchange Commission or any other regulatory authority as may be necessary or desirable, hereby ratifying and confirming all and every act and thing requisite to all intents and purposes that said attorney in fact and agent or his or her substitute, may lawfully do or cause to be done by virtue hereof. This Power of Attorney does not revoke any prior power of attorney.

The “Registration Statements” covered by the Power of Attorney are defined to include the registration statements listed below:

 

Registration Statement Name    Securities Act File Number  
COLI VUL 2 Series Account (811-09201)    333-70963
FutureFunds Series Account (811-03972)    002-89550
FutureFunds Series Account -- FutureFunds Select (811-03972)    333-158546
Variable Annuity-1 Series Account -- Schwab OneSource Annuity (811-07549)    333-52956
Variable Annuity-1 Series Account -- Schwab OneSource Choice Variable Annuity (811-07549)    333-194043
Variable Annuity-1 Series Account -- Schwab Advisor Choice Variable Annuity (811-07549)    333-194099
Variable Annuity-2 Series Account -- Great-West Smart Track Variable Annuity (811-05817)    333-176926
Variable Annuity-2 Series Account -- Great-West Smart Track II Variable Annuity (811-05817)    333-189114
Variable Annuity-2 Series Account -- Great-West Smart Track II – 5 Year Variable Annuity (811-05817)    333-203262
Variable Annuity-2 Series Account -- Great-West Smart Track Advisor Variable Annuity (811-05817)    333-212090
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203627
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203628
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-217292
Great-West Secure-Foundation Group Fixed Deferred Annuity Contract    333-217293
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-209902
Great-West Capital Choice and Capital Choice Select Index-Linked Annuity    333-219410
Great-West Capital Choice Advisor and Capital Choice Select Advisor Index-Linked Annuity    333-219412
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for index-linked investment options to be offered in connection with the Great-West Capital ChoiceTM line of index-linked annuity products.    333-
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for future iterations of the Great-West Capital ChoiceTM line of index-linked annuity products or similar index-linked annuity products.    333-
Form S-1, S-3, N-3, N-4 or N-6 Registration Statements to be filed, as necessary, including but not limited to any Registration Statement filed to continue the offering of, and/or register more securities for, any securities offered by the Registration Statements identified above.    333-

IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of January, 2019.

 

 

/s/ André R. Desmarais

                                       
  André R. Desmarais  
  Member, Board of Directors  
  Great-West Life & Annuity Insurance Company              

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I, Paul G. Desmarais, Jr., a member of the Board of Directors of Great-West Life & Annuity Insurance Company (the “Company”), a Colorado corporation, do hereby constitute and appoint Richard G. Schultz and Ryan L. Logsdon, and each of them (with full power to each of them to act alone), as my true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for me and in my name, place and stead, in any and all capacities to execute and file any and all reports (and amendments thereto) by the Company under the Securities Exchange Act of 1934 (including but not limited to any report on Form 10-K) and any and all registration statements by the Company or its separate accounts relating to annuity contracts and life insurance policies under the Securities Act of 1933 and/or the Investment Company Act of 1940, and any and all amendments thereto, including the “Registration Statements,” as defined below, with all exhibits, instruments, and other documents necessary or appropriate in connection therewith, and to file with the Securities and Exchange Commission or any other regulatory authority as may be necessary or desirable, hereby ratifying and confirming all and every act and thing requisite to all intents and purposes that said attorney in fact and agent or his or her substitute, may lawfully do or cause to be done by virtue hereof. This Power of Attorney does not revoke any prior power of attorney.

The “Registration Statements” covered by the Power of Attorney are defined to include the registration statements listed below:

 

Registration Statement Name    Securities Act File Number  
COLI VUL 2 Series Account (811-09201)    333-70963
FutureFunds Series Account (811-03972)    002-89550
FutureFunds Series Account -- FutureFunds Select (811-03972)    333-158546
Variable Annuity-1 Series Account -- Schwab OneSource Annuity (811-07549)    333-52956
Variable Annuity-1 Series Account -- Schwab OneSource Choice Variable Annuity (811-07549)    333-194043
Variable Annuity-1 Series Account -- Schwab Advisor Choice Variable Annuity (811-07549)    333-194099
Variable Annuity-2 Series Account -- Great-West Smart Track Variable Annuity (811-05817)    333-176926
Variable Annuity-2 Series Account -- Great-West Smart Track II Variable Annuity (811-05817)    333-189114
Variable Annuity-2 Series Account -- Great-West Smart Track II – 5 Year Variable Annuity (811-05817)    333-203262
Variable Annuity-2 Series Account -- Great-West Smart Track Advisor Variable Annuity (811-05817)    333-212090
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203627
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203628
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-217292
Great-West Secure-Foundation Group Fixed Deferred Annuity Contract    333-217293
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-209902
Great-West Capital Choice and Capital Choice Select Index-Linked Annuity    333-219410
Great-West Capital Choice Advisor and Capital Choice Select Advisor Index-Linked Annuity    333-219412
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for index-linked investment options to be offered in connection with the Great-West Capital ChoiceTM line of index-linked annuity products.    333-
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for future iterations of the Great-West Capital ChoiceTM line of index-linked annuity products or similar index-linked annuity products.    333-
Form S-1, S-3, N-3, N-4 or N-6 Registration Statements to be filed, as necessary, including but not limited to any Registration Statement filed to continue the offering of, and/or register more securities for, any securities offered by the Registration Statements identified above.    333-

IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of January, 2019.

 

 

/s/ Paul G. Desmarais, Jr.

                                       
  Paul G. Desmarais, Jr.  
  Member, Board of Directors  
  Great-West Life & Annuity Insurance Company              

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I, Gary A. Doer, a member of the Board of Directors of Great-West Life & Annuity Insurance Company (the “Company”), a Colorado corporation, do hereby constitute and appoint Richard G. Schultz and Ryan L. Logsdon, and each of them (with full power to each of them to act alone), as my true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for me and in my name, place and stead, in any and all capacities to execute and file any and all reports (and amendments thereto) by the Company under the Securities Exchange Act of 1934 (including but not limited to any report on Form 10-K) and any and all registration statements by the Company or its separate accounts relating to annuity contracts and life insurance policies under the Securities Act of 1933 and/or the Investment Company Act of 1940, and any and all amendments thereto, including the “Registration Statements,” as defined below, with all exhibits, instruments, and other documents necessary or appropriate in connection therewith, and to file with the Securities and Exchange Commission or any other regulatory authority as may be necessary or desirable, hereby ratifying and confirming all and every act and thing requisite to all intents and purposes that said attorney in fact and agent or his or her substitute, may lawfully do or cause to be done by virtue hereof. This Power of Attorney does not revoke any prior power of attorney.

The “Registration Statements” covered by the Power of Attorney are defined to include the registration statements listed below:

 

Registration Statement Name    Securities Act File Number  
COLI VUL 2 Series Account (811-09201)    333-70963
FutureFunds Series Account (811-03972)    002-89550
FutureFunds Series Account -- FutureFunds Select (811-03972)    333-158546
Variable Annuity-1 Series Account -- Schwab OneSource Annuity (811-07549)    333-52956
Variable Annuity-1 Series Account -- Schwab OneSource Choice Variable Annuity (811-07549)    333-194043
Variable Annuity-1 Series Account -- Schwab Advisor Choice Variable Annuity (811-07549)    333-194099
Variable Annuity-2 Series Account -- Great-West Smart Track Variable Annuity (811-05817)    333-176926
Variable Annuity-2 Series Account -- Great-West Smart Track II Variable Annuity (811-05817)    333-189114
Variable Annuity-2 Series Account -- Great-West Smart Track II – 5 Year Variable Annuity (811-05817)    333-203262
Variable Annuity-2 Series Account -- Great-West Smart Track Advisor Variable Annuity (811-05817)    333-212090
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203627
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203628
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-217292
Great-West Secure-Foundation Group Fixed Deferred Annuity Contract    333-217293
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-209902
Great-West Capital Choice and Capital Choice Select Index-Linked Annuity    333-219410
Great-West Capital Choice Advisor and Capital Choice Select Advisor Index-Linked Annuity    333-219412
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for index-linked investment options to be offered in connection with the Great-West Capital ChoiceTM line of index-linked annuity products.    333-
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for future iterations of the Great-West Capital ChoiceTM line of index-linked annuity products or similar index-linked annuity products.    333-
Form S-1, S-3, N-3, N-4 or N-6 Registration Statements to be filed, as necessary, including but not limited to any Registration Statement filed to continue the offering of, and/or register more securities for, any securities offered by the Registration Statements identified above.    333-

IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of January, 2019.

 

 

/s/ Gary A. Doer

                                       
  Gary A. Doer  
  Member, Board of Directors  
  Great-West Life & Annuity Insurance Company              

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I, Gregory J. Fleming, a member of the Board of Directors of Great-West Life & Annuity Insurance Company (the “Company”), a Colorado corporation, do hereby constitute and appoint Richard G. Schultz and Ryan L. Logsdon, and each of them (with full power to each of them to act alone), as my true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for me and in my name, place and stead, in any and all capacities to execute and file any and all reports (and amendments thereto) by the Company under the Securities Exchange Act of 1934 (including but not limited to any report on Form 10-K) and any and all registration statements by the Company or its separate accounts relating to annuity contracts and life insurance policies under the Securities Act of 1933 and/or the Investment Company Act of 1940, and any and all amendments thereto, including the “Registration Statements,” as defined below, with all exhibits, instruments, and other documents necessary or appropriate in connection therewith, and to file with the Securities and Exchange Commission or any other regulatory authority as may be necessary or desirable, hereby ratifying and confirming all and every act and thing requisite to all intents and purposes that said attorney in fact and agent or his or her substitute, may lawfully do or cause to be done by virtue hereof. This Power of Attorney does not revoke any prior power of attorney.

The “Registration Statements” covered by the Power of Attorney are defined to include the registration statements listed below:

 

Registration Statement Name    Securities Act File Number  
COLI VUL 2 Series Account (811-09201)    333-70963
FutureFunds Series Account (811-03972)    002-89550
FutureFunds Series Account -- FutureFunds Select (811-03972)    333-158546
Variable Annuity-1 Series Account -- Schwab OneSource Annuity (811-07549)    333-52956
Variable Annuity-1 Series Account -- Schwab OneSource Choice Variable Annuity (811-07549)    333-194043
Variable Annuity-1 Series Account -- Schwab Advisor Choice Variable Annuity (811-07549)    333-194099
Variable Annuity-2 Series Account -- Great-West Smart Track Variable Annuity (811-05817)    333-176926
Variable Annuity-2 Series Account -- Great-West Smart Track II Variable Annuity (811-05817)    333-189114
Variable Annuity-2 Series Account -- Great-West Smart Track II – 5 Year Variable Annuity (811-05817)    333-203262
Variable Annuity-2 Series Account -- Great-West Smart Track Advisor Variable Annuity (811-05817)    333-212090
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203627
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203628
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-217292
Great-West Secure-Foundation Group Fixed Deferred Annuity Contract    333-217293
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-209902
Great-West Capital Choice and Capital Choice Select Index-Linked Annuity    333-219410
Great-West Capital Choice Advisor and Capital Choice Select Advisor Index-Linked Annuity    333-219412
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for index-linked investment options to be offered in connection with the Great-West Capital ChoiceTM line of index-linked annuity products.    333-
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for future iterations of the Great-West Capital ChoiceTM line of index-linked annuity products or similar index-linked annuity products.    333-
Form S-1, S-3, N-3, N-4 or N-6 Registration Statements to be filed, as necessary, including but not limited to any Registration Statement filed to continue the offering of, and/or register more securities for, any securities offered by the Registration Statements identified above.    333-

IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of January, 2019.

 

 

/s/ Gregory J. Fleming

                                       
  Gregory J. Fleming  
  Member, Board of Directors  
  Great-West Life & Annuity Insurance Company              

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I, Claude Généreux, a member of the Board of Directors of Great-West Life & Annuity Insurance Company (the “Company”), a Colorado corporation, do hereby constitute and appoint Richard G. Schultz and Ryan L. Logsdon, and each of them (with full power to each of them to act alone), as my true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for me and in my name, place and stead, in any and all capacities to execute and file any and all reports (and amendments thereto) by the Company under the Securities Exchange Act of 1934 (including but not limited to any report on Form 10-K) and any and all registration statements by the Company or its separate accounts relating to annuity contracts and life insurance policies under the Securities Act of 1933 and/or the Investment Company Act of 1940, and any and all amendments thereto, including the “Registration Statements,” as defined below, with all exhibits, instruments, and other documents necessary or appropriate in connection therewith, and to file with the Securities and Exchange Commission or any other regulatory authority as may be necessary or desirable, hereby ratifying and confirming all and every act and thing requisite to all intents and purposes that said attorney in fact and agent or his or her substitute, may lawfully do or cause to be done by virtue hereof. This Power of Attorney does not revoke any prior power of attorney.

The “Registration Statements” covered by the Power of Attorney are defined to include the registration statements listed below:

 

Registration Statement Name    Securities Act File Number  
COLI VUL 2 Series Account (811-09201)    333-70963
FutureFunds Series Account (811-03972)    002-89550
FutureFunds Series Account -- FutureFunds Select (811-03972)    333-158546
Variable Annuity-1 Series Account -- Schwab OneSource Annuity (811-07549)    333-52956
Variable Annuity-1 Series Account -- Schwab OneSource Choice Variable Annuity (811-07549)    333-194043
Variable Annuity-1 Series Account -- Schwab Advisor Choice Variable Annuity (811-07549)    333-194099
Variable Annuity-2 Series Account -- Great-West Smart Track Variable Annuity (811-05817)    333-176926
Variable Annuity-2 Series Account -- Great-West Smart Track II Variable Annuity (811-05817)    333-189114
Variable Annuity-2 Series Account -- Great-West Smart Track II – 5 Year Variable Annuity (811-05817)    333-203262
Variable Annuity-2 Series Account -- Great-West Smart Track Advisor Variable Annuity (811-05817)    333-212090
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203627
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203628
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-217292
Great-West Secure-Foundation Group Fixed Deferred Annuity Contract    333-217293
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-209902
Great-West Capital Choice and Capital Choice Select Index-Linked Annuity    333-219410
Great-West Capital Choice Advisor and Capital Choice Select Advisor Index-Linked Annuity    333-219412
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for index-linked investment options to be offered in connection with the Great-West Capital ChoiceTM line of index-linked annuity products.    333-
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for future iterations of the Great-West Capital ChoiceTM line of index-linked annuity products or similar index-linked annuity products.    333-
Form S-1, S-3, N-3, N-4 or N-6 Registration Statements to be filed, as necessary, including but not limited to any Registration Statement filed to continue the offering of, and/or register more securities for, any securities offered by the Registration Statements identified above.    333-

IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of January, 2019.

 

 

/s/ Claude Généreux

                                       
  Claude Généreux  
  Member, Board of Directors  
  Great-West Life & Annuity Insurance Company              

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I, Alain Louvel, a member of the Board of Directors of Great-West Life & Annuity Insurance Company (the “Company”), a Colorado corporation, do hereby constitute and appoint Richard G. Schultz and Ryan L. Logsdon, and each of them (with full power to each of them to act alone), as my true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for me and in my name, place and stead, in any and all capacities to execute and file any and all reports (and amendments thereto) by the Company under the Securities Exchange Act of 1934 (including but not limited to any report on Form 10-K) and any and all registration statements by the Company or its separate accounts relating to annuity contracts and life insurance policies under the Securities Act of 1933 and/or the Investment Company Act of 1940, and any and all amendments thereto, including the “Registration Statements,” as defined below, with all exhibits, instruments, and other documents necessary or appropriate in connection therewith, and to file with the Securities and Exchange Commission or any other regulatory authority as may be necessary or desirable, hereby ratifying and confirming all and every act and thing requisite to all intents and purposes that said attorney in fact and agent or his or her substitute, may lawfully do or cause to be done by virtue hereof. This Power of Attorney does not revoke any prior power of attorney.

The “Registration Statements” covered by the Power of Attorney are defined to include the registration statements listed below:

 

Registration Statement Name    Securities Act File Number  
COLI VUL 2 Series Account (811-09201)    333-70963
FutureFunds Series Account (811-03972)    002-89550
FutureFunds Series Account -- FutureFunds Select (811-03972)    333-158546
Variable Annuity-1 Series Account -- Schwab OneSource Annuity (811-07549)    333-52956
Variable Annuity-1 Series Account -- Schwab OneSource Choice Variable Annuity (811-07549)    333-194043
Variable Annuity-1 Series Account -- Schwab Advisor Choice Variable Annuity (811-07549)    333-194099
Variable Annuity-2 Series Account -- Great-West Smart Track Variable Annuity (811-05817)    333-176926
Variable Annuity-2 Series Account -- Great-West Smart Track II Variable Annuity (811-05817)    333-189114
Variable Annuity-2 Series Account -- Great-West Smart Track II – 5 Year Variable Annuity (811-05817)    333-203262
Variable Annuity-2 Series Account -- Great-West Smart Track Advisor Variable Annuity (811-05817)    333-212090
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203627
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203628
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-217292
Great-West Secure-Foundation Group Fixed Deferred Annuity Contract    333-217293
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-209902
Great-West Capital Choice and Capital Choice Select Index-Linked Annuity    333-219410
Great-West Capital Choice Advisor and Capital Choice Select Advisor Index-Linked Annuity    333-219412
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for index-linked investment options to be offered in connection with the Great-West Capital ChoiceTM line of index-linked annuity products.    333-
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for future iterations of the Great-West Capital ChoiceTM line of index-linked annuity products or similar index-linked annuity products.    333-
Form S-1, S-3, N-3, N-4 or N-6 Registration Statements to be filed, as necessary, including but not limited to any Registration Statement filed to continue the offering of, and/or register more securities for, any securities offered by the Registration Statements identified above.    333-

IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of January, 2019.

 

 

/s/ Alain Louvel

                                       
  Alain Louvel  
  Member, Board of Directors  
  Great-West Life & Annuity Insurance Company              

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I, Paula B. Madoff, a member of the Board of Directors of Great-West Life & Annuity Insurance Company (the “Company”), a Colorado corporation, do hereby constitute and appoint Richard G. Schultz and Ryan L. Logsdon, and each of them (with full power to each of them to act alone), as my true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for me and in my name, place and stead, in any and all capacities to execute and file any and all reports (and amendments thereto) by the Company under the Securities Exchange Act of 1934 (including but not limited to any report on Form 10-K) and any and all registration statements by the Company or its separate accounts relating to annuity contracts and life insurance policies under the Securities Act of 1933 and/or the Investment Company Act of 1940, and any and all amendments thereto, including the “Registration Statements,” as defined below, with all exhibits, instruments, and other documents necessary or appropriate in connection therewith, and to file with the Securities and Exchange Commission or any other regulatory authority as may be necessary or desirable, hereby ratifying and confirming all and every act and thing requisite to all intents and purposes that said attorney in fact and agent or his or her substitute, may lawfully do or cause to be done by virtue hereof. This Power of Attorney does not revoke any prior power of attorney.

The “Registration Statements” covered by the Power of Attorney are defined to include the registration statements listed below:

 

Registration Statement Name    Securities Act File Number  
COLI VUL 2 Series Account (811-09201)    333-70963
FutureFunds Series Account (811-03972)    002-89550
FutureFunds Series Account -- FutureFunds Select (811-03972)    333-158546
Variable Annuity-1 Series Account -- Schwab OneSource Annuity (811-07549)    333-52956
Variable Annuity-1 Series Account -- Schwab OneSource Choice Variable Annuity (811-07549)    333-194043
Variable Annuity-1 Series Account -- Schwab Advisor Choice Variable Annuity (811-07549)    333-194099
Variable Annuity-2 Series Account -- Great-West Smart Track Variable Annuity (811-05817)    333-176926
Variable Annuity-2 Series Account -- Great-West Smart Track II Variable Annuity (811-05817)    333-189114
Variable Annuity-2 Series Account -- Great-West Smart Track II – 5 Year Variable Annuity (811-05817)    333-203262
Variable Annuity-2 Series Account -- Great-West Smart Track Advisor Variable Annuity (811-05817)    333-212090
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203627
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203628
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-217292
Great-West Secure-Foundation Group Fixed Deferred Annuity Contract    333-217293
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-209902
Great-West Capital Choice and Capital Choice Select Index-Linked Annuity    333-219410
Great-West Capital Choice Advisor and Capital Choice Select Advisor Index-Linked Annuity    333-219412
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for index-linked investment options to be offered in connection with the Great-West Capital ChoiceTM line of index-linked annuity products.    333-
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for future iterations of the Great-West Capital ChoiceTM line of index-linked annuity products or similar index-linked annuity products.    333-
Form S-1, S-3, N-3, N-4 or N-6 Registration Statements to be filed, as necessary, including but not limited to any Registration Statement filed to continue the offering of, and/or register more securities for, any securities offered by the Registration Statements identified above.    333-

IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of January, 2019.

 

 

/s/ Paula B. Madoff

                                       
  Paula B. Madoff  
  Member, Board of Directors  
  Great-West Life & Annuity Insurance Company              

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I, Paul A. Mahon, a member of the Board of Directors of Great-West Life & Annuity Insurance Company (the “Company”), a Colorado corporation, do hereby constitute and appoint Richard G. Schultz and Ryan L. Logsdon, and each of them (with full power to each of them to act alone), as my true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for me and in my name, place and stead, in any and all capacities to execute and file any and all reports (and amendments thereto) by the Company under the Securities Exchange Act of 1934 (including but not limited to any report on Form 10-K) and any and all registration statements by the Company or its separate accounts relating to annuity contracts and life insurance policies under the Securities Act of 1933 and/or the Investment Company Act of 1940, and any and all amendments thereto, including the “Registration Statements,” as defined below, with all exhibits, instruments, and other documents necessary or appropriate in connection therewith, and to file with the Securities and Exchange Commission or any other regulatory authority as may be necessary or desirable, hereby ratifying and confirming all and every act and thing requisite to all intents and purposes that said attorney in fact and agent or his or her substitute, may lawfully do or cause to be done by virtue hereof. This Power of Attorney does not revoke any prior power of attorney.

The “Registration Statements” covered by the Power of Attorney are defined to include the registration statements listed below:

 

Registration Statement Name    Securities Act File Number  
COLI VUL 2 Series Account (811-09201)    333-70963
FutureFunds Series Account (811-03972)    002-89550
FutureFunds Series Account -- FutureFunds Select (811-03972)    333-158546
Variable Annuity-1 Series Account -- Schwab OneSource Annuity (811-07549)    333-52956
Variable Annuity-1 Series Account -- Schwab OneSource Choice Variable Annuity (811-07549)    333-194043
Variable Annuity-1 Series Account -- Schwab Advisor Choice Variable Annuity (811-07549)    333-194099
Variable Annuity-2 Series Account -- Great-West Smart Track Variable Annuity (811-05817)    333-176926
Variable Annuity-2 Series Account -- Great-West Smart Track II Variable Annuity (811-05817)    333-189114
Variable Annuity-2 Series Account -- Great-West Smart Track II – 5 Year Variable Annuity (811-05817)    333-203262
Variable Annuity-2 Series Account -- Great-West Smart Track Advisor Variable Annuity (811-05817)    333-212090
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203627
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203628
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-217292
Great-West Secure-Foundation Group Fixed Deferred Annuity Contract    333-217293
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-209902
Great-West Capital Choice and Capital Choice Select Index-Linked Annuity    333-219410
Great-West Capital Choice Advisor and Capital Choice Select Advisor Index-Linked Annuity    333-219412
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for index-linked investment options to be offered in connection with the Great-West Capital ChoiceTM line of index-linked annuity products.    333-
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for future iterations of the Great-West Capital ChoiceTM line of index-linked annuity products or similar index-linked annuity products.    333-
Form S-1, S-3, N-3, N-4 or N-6 Registration Statements to be filed, as necessary, including but not limited to any Registration Statement filed to continue the offering of, and/or register more securities for, any securities offered by the Registration Statements identified above.    333-

IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of January, 2019.

 

 

/s/ Paul A. Mahon

                                       
  Paul A. Mahon  
  Member, Board of Directors  
  Great-West Life & Annuity Insurance Company              

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I, R. Jeffrey Orr, a member of the Board of Directors of Great-West Life & Annuity Insurance Company (the “Company”), a Colorado corporation, do hereby constitute and appoint Richard G. Schultz and Ryan L. Logsdon, and each of them (with full power to each of them to act alone), as my true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for me and in my name, place and stead, in any and all capacities to execute and file any and all reports (and amendments thereto) by the Company under the Securities Exchange Act of 1934 (including but not limited to any report on Form 10-K) and any and all registration statements by the Company or its separate accounts relating to annuity contracts and life insurance policies under the Securities Act of 1933 and/or the Investment Company Act of 1940, and any and all amendments thereto, including the “Registration Statements,” as defined below, with all exhibits, instruments, and other documents necessary or appropriate in connection therewith, and to file with the Securities and Exchange Commission or any other regulatory authority as may be necessary or desirable, hereby ratifying and confirming all and every act and thing requisite to all intents and purposes that said attorney in fact and agent or his or her substitute, may lawfully do or cause to be done by virtue hereof. This Power of Attorney does not revoke any prior power of attorney.

The “Registration Statements” covered by the Power of Attorney are defined to include the registration statements listed below:

 

Registration Statement Name    Securities Act File Number  
COLI VUL 2 Series Account (811-09201)    333-70963
FutureFunds Series Account (811-03972)    002-89550
FutureFunds Series Account -- FutureFunds Select (811-03972)    333-158546
Variable Annuity-1 Series Account -- Schwab OneSource Annuity (811-07549)    333-52956
Variable Annuity-1 Series Account -- Schwab OneSource Choice Variable Annuity (811-07549)    333-194043
Variable Annuity-1 Series Account -- Schwab Advisor Choice Variable Annuity (811-07549)    333-194099
Variable Annuity-2 Series Account -- Great-West Smart Track Variable Annuity (811-05817)    333-176926
Variable Annuity-2 Series Account -- Great-West Smart Track II Variable Annuity (811-05817)    333-189114
Variable Annuity-2 Series Account -- Great-West Smart Track II – 5 Year Variable Annuity (811-05817)    333-203262
Variable Annuity-2 Series Account -- Great-West Smart Track Advisor Variable Annuity (811-05817)    333-212090
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203627
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203628
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-217292
Great-West Secure-Foundation Group Fixed Deferred Annuity Contract    333-217293
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-209902
Great-West Capital Choice and Capital Choice Select Index-Linked Annuity    333-219410
Great-West Capital Choice Advisor and Capital Choice Select Advisor Index-Linked Annuity    333-219412
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for index-linked investment options to be offered in connection with the Great-West Capital ChoiceTM line of index-linked annuity products.    333-
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for future iterations of the Great-West Capital ChoiceTM line of index-linked annuity products or similar index-linked annuity products.    333-
Form S-1, S-3, N-3, N-4 or N-6 Registration Statements to be filed, as necessary, including but not limited to any Registration Statement filed to continue the offering of, and/or register more securities for, any securities offered by the Registration Statements identified above.    333-

IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of January, 2019.

 

 

/s/ R. Jeffrey Orr

                                       
  R. Jeffrey Orr  
  Member, Board of Directors  
  Great-West Life & Annuity Insurance Company              

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I, T. Timothy Ryan, Jr., a member of the Board of Directors of Great-West Life & Annuity Insurance Company (the “Company”), a Colorado corporation, do hereby constitute and appoint Richard G. Schultz and Ryan L. Logsdon, and each of them (with full power to each of them to act alone), as my true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for me and in my name, place and stead, in any and all capacities to execute and file any and all reports (and amendments thereto) by the Company under the Securities Exchange Act of 1934 (including but not limited to any report on Form 10-K) and any and all registration statements by the Company or its separate accounts relating to annuity contracts and life insurance policies under the Securities Act of 1933 and/or the Investment Company Act of 1940, and any and all amendments thereto, including the “Registration Statements,” as defined below, with all exhibits, instruments, and other documents necessary or appropriate in connection therewith, and to file with the Securities and Exchange Commission or any other regulatory authority as may be necessary or desirable, hereby ratifying and confirming all and every act and thing requisite to all intents and purposes that said attorney in fact and agent or his or her substitute, may lawfully do or cause to be done by virtue hereof. This Power of Attorney does not revoke any prior power of attorney.

The “Registration Statements” covered by the Power of Attorney are defined to include the registration statements listed below:

 

Registration Statement Name    Securities Act File Number  
COLI VUL 2 Series Account (811-09201)    333-70963
FutureFunds Series Account (811-03972)    002-89550
FutureFunds Series Account -- FutureFunds Select (811-03972)    333-158546
Variable Annuity-1 Series Account -- Schwab OneSource Annuity (811-07549)    333-52956
Variable Annuity-1 Series Account -- Schwab OneSource Choice Variable Annuity (811-07549)    333-194043
Variable Annuity-1 Series Account -- Schwab Advisor Choice Variable Annuity (811-07549)    333-194099
Variable Annuity-2 Series Account -- Great-West Smart Track Variable Annuity (811-05817)    333-176926
Variable Annuity-2 Series Account -- Great-West Smart Track II Variable Annuity (811-05817)    333-189114
Variable Annuity-2 Series Account -- Great-West Smart Track II – 5 Year Variable Annuity (811-05817)    333-203262
Variable Annuity-2 Series Account -- Great-West Smart Track Advisor Variable Annuity (811-05817)    333-212090
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203627
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203628
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-217292
Great-West Secure-Foundation Group Fixed Deferred Annuity Contract    333-217293
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-209902
Great-West Capital Choice and Capital Choice Select Index-Linked Annuity    333-219410
Great-West Capital Choice Advisor and Capital Choice Select Advisor Index-Linked Annuity    333-219412
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for index-linked investment options to be offered in connection with the Great-West Capital ChoiceTM line of index-linked annuity products.    333-
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for future iterations of the Great-West Capital ChoiceTM line of index-linked annuity products or similar index-linked annuity products.    333-
Form S-1, S-3, N-3, N-4 or N-6 Registration Statements to be filed, as necessary, including but not limited to any Registration Statement filed to continue the offering of, and/or register more securities for, any securities offered by the Registration Statements identified above.    333-

IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of January, 2019.

 

 

/s/ T. Timothy Ryan, Jr.

                                       
  T. Timothy Ryan, Jr.  
  Member, Board of Directors  
  Great-West Life & Annuity Insurance Company              

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I, Jerome J. Selitto, a member of the Board of Directors of Great-West Life & Annuity Insurance Company (the “Company”), a Colorado corporation, do hereby constitute and appoint Richard G. Schultz and Ryan L. Logsdon, and each of them (with full power to each of them to act alone), as my true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for me and in my name, place and stead, in any and all capacities to execute and file any and all reports (and amendments thereto) by the Company under the Securities Exchange Act of 1934 (including but not limited to any report on Form 10-K) and any and all registration statements by the Company or its separate accounts relating to annuity contracts and life insurance policies under the Securities Act of 1933 and/or the Investment Company Act of 1940, and any and all amendments thereto, including the “Registration Statements,” as defined below, with all exhibits, instruments, and other documents necessary or appropriate in connection therewith, and to file with the Securities and Exchange Commission or any other regulatory authority as may be necessary or desirable, hereby ratifying and confirming all and every act and thing requisite to all intents and purposes that said attorney in fact and agent or his or her substitute, may lawfully do or cause to be done by virtue hereof. This Power of Attorney does not revoke any prior power of attorney.

The “Registration Statements” covered by the Power of Attorney are defined to include the registration statements listed below:

 

Registration Statement Name    Securities Act File Number  
COLI VUL 2 Series Account (811-09201)    333-70963
FutureFunds Series Account (811-03972)    002-89550
FutureFunds Series Account -- FutureFunds Select (811-03972)    333-158546
Variable Annuity-1 Series Account -- Schwab OneSource Annuity (811-07549)    333-52956
Variable Annuity-1 Series Account -- Schwab OneSource Choice Variable Annuity (811-07549)    333-194043
Variable Annuity-1 Series Account -- Schwab Advisor Choice Variable Annuity (811-07549)    333-194099
Variable Annuity-2 Series Account -- Great-West Smart Track Variable Annuity (811-05817)    333-176926
Variable Annuity-2 Series Account -- Great-West Smart Track II Variable Annuity (811-05817)    333-189114
Variable Annuity-2 Series Account -- Great-West Smart Track II – 5 Year Variable Annuity (811-05817)    333-203262
Variable Annuity-2 Series Account -- Great-West Smart Track Advisor Variable Annuity (811-05817)    333-212090
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203627
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203628
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-217292
Great-West Secure-Foundation Group Fixed Deferred Annuity Contract    333-217293
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-209902
Great-West Capital Choice and Capital Choice Select Index-Linked Annuity    333-219410
Great-West Capital Choice Advisor and Capital Choice Select Advisor Index-Linked Annuity    333-219412
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for index-linked investment options to be offered in connection with the Great-West Capital ChoiceTM line of index-linked annuity products.    333-
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for future iterations of the Great-West Capital ChoiceTM line of index-linked annuity products or similar index-linked annuity products.    333-
Form S-1, S-3, N-3, N-4 or N-6 Registration Statements to be filed, as necessary, including but not limited to any Registration Statement filed to continue the offering of, and/or register more securities for, any securities offered by the Registration Statements identified above.    333-

IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of January, 2019.

 

 

/s/ Jerome J. Selitto

                                       
  Jerome J. Selitto  
  Member, Board of Directors  
  Great-West Life & Annuity Insurance Company              

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I, Gregory D. Tretiak, a member of the Board of Directors of Great-West Life & Annuity Insurance Company (the “Company”), a Colorado corporation, do hereby constitute and appoint Richard G. Schultz and Ryan L. Logsdon, and each of them (with full power to each of them to act alone), as my true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for me and in my name, place and stead, in any and all capacities to execute and file any and all reports (and amendments thereto) by the Company under the Securities Exchange Act of 1934 (including but not limited to any report on Form 10-K) and any and all registration statements by the Company or its separate accounts relating to annuity contracts and life insurance policies under the Securities Act of 1933 and/or the Investment Company Act of 1940, and any and all amendments thereto, including the “Registration Statements,” as defined below, with all exhibits, instruments, and other documents necessary or appropriate in connection therewith, and to file with the Securities and Exchange Commission or any other regulatory authority as may be necessary or desirable, hereby ratifying and confirming all and every act and thing requisite to all intents and purposes that said attorney in fact and agent or his or her substitute, may lawfully do or cause to be done by virtue hereof. This Power of Attorney does not revoke any prior power of attorney.

The “Registration Statements” covered by the Power of Attorney are defined to include the registration statements listed below:

 

Registration Statement Name    Securities Act File Number  
COLI VUL 2 Series Account (811-09201)    333-70963
FutureFunds Series Account (811-03972)    002-89550
FutureFunds Series Account -- FutureFunds Select (811-03972)    333-158546
Variable Annuity-1 Series Account -- Schwab OneSource Annuity (811-07549)    333-52956
Variable Annuity-1 Series Account -- Schwab OneSource Choice Variable Annuity (811-07549)    333-194043
Variable Annuity-1 Series Account -- Schwab Advisor Choice Variable Annuity (811-07549)    333-194099
Variable Annuity-2 Series Account -- Great-West Smart Track Variable Annuity (811-05817)    333-176926
Variable Annuity-2 Series Account -- Great-West Smart Track II Variable Annuity (811-05817)    333-189114
Variable Annuity-2 Series Account -- Great-West Smart Track II – 5 Year Variable Annuity (811-05817)    333-203262
Variable Annuity-2 Series Account -- Great-West Smart Track Advisor Variable Annuity (811-05817)    333-212090
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203627
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203628
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-217292
Great-West Secure-Foundation Group Fixed Deferred Annuity Contract    333-217293
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-209902
Great-West Capital Choice and Capital Choice Select Index-Linked Annuity    333-219410
Great-West Capital Choice Advisor and Capital Choice Select Advisor Index-Linked Annuity    333-219412
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for index-linked investment options to be offered in connection with the Great-West Capital ChoiceTM line of index-linked annuity products.    333-
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for future iterations of the Great-West Capital ChoiceTM line of index-linked annuity products or similar index-linked annuity products.    333-
Form S-1, S-3, N-3, N-4 or N-6 Registration Statements to be filed, as necessary, including but not limited to any Registration Statement filed to continue the offering of, and/or register more securities for, any securities offered by the Registration Statements identified above.    333-

IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of January, 2019.

 

 

/s/ Gregory D. Tretiak

                                       
  Gregory D. Tretiak  
  Member, Board of Directors  
  Great-West Life & Annuity Insurance Company              

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I, Brian E. Walsh, a member of the Board of Directors of Great-West Life & Annuity Insurance Company (the “Company”), a Colorado corporation, do hereby constitute and appoint Richard G. Schultz and Ryan L. Logsdon, and each of them (with full power to each of them to act alone), as my true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for me and in my name, place and stead, in any and all capacities to execute and file any and all reports (and amendments thereto) by the Company under the Securities Exchange Act of 1934 (including but not limited to any report on Form 10-K) and any and all registration statements by the Company or its separate accounts relating to annuity contracts and life insurance policies under the Securities Act of 1933 and/or the Investment Company Act of 1940, and any and all amendments thereto, including the “Registration Statements,” as defined below, with all exhibits, instruments, and other documents necessary or appropriate in connection therewith, and to file with the Securities and Exchange Commission or any other regulatory authority as may be necessary or desirable, hereby ratifying and confirming all and every act and thing requisite to all intents and purposes that said attorney in fact and agent or his or her substitute, may lawfully do or cause to be done by virtue hereof. This Power of Attorney does not revoke any prior power of attorney.

The “Registration Statements” covered by the Power of Attorney are defined to include the registration statements listed below:

 

Registration Statement Name    Securities Act File Number  
COLI VUL 2 Series Account (811-09201)    333-70963
FutureFunds Series Account (811-03972)    002-89550
FutureFunds Series Account -- FutureFunds Select (811-03972)    333-158546
Variable Annuity-1 Series Account -- Schwab OneSource Annuity (811-07549)    333-52956
Variable Annuity-1 Series Account -- Schwab OneSource Choice Variable Annuity (811-07549)    333-194043
Variable Annuity-1 Series Account -- Schwab Advisor Choice Variable Annuity (811-07549)    333-194099
Variable Annuity-2 Series Account -- Great-West Smart Track Variable Annuity (811-05817)    333-176926
Variable Annuity-2 Series Account -- Great-West Smart Track II Variable Annuity (811-05817)    333-189114
Variable Annuity-2 Series Account -- Great-West Smart Track II – 5 Year Variable Annuity (811-05817)    333-203262
Variable Annuity-2 Series Account -- Great-West Smart Track Advisor Variable Annuity (811-05817)    333-212090
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203627
Variable Annuity-8 Series Account – Great-West SecureFoundation II Variable Annuity (811-23050)    333-203628
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-217292
Great-West Secure-Foundation Group Fixed Deferred Annuity Contract    333-217293
Great-West Secure-Foundation Group Fixed Deferred Annuity Certificate    333-209902
Great-West Capital Choice and Capital Choice Select Index-Linked Annuity    333-219410
Great-West Capital Choice Advisor and Capital Choice Select Advisor Index-Linked Annuity    333-219412
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for index-linked investment options to be offered in connection with the Great-West Capital ChoiceTM line of index-linked annuity products.    333-
New Form S-1, S-3 or N-4 Registration Statements to be filed, as necessary, for future iterations of the Great-West Capital ChoiceTM line of index-linked annuity products or similar index-linked annuity products.    333-
Form S-1, S-3, N-3, N-4 or N-6 Registration Statements to be filed, as necessary, including but not limited to any Registration Statement filed to continue the offering of, and/or register more securities for, any securities offered by the Registration Statements identified above.    333-

IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of January, 2019.

 

 

/s/ Brian E. Walsh

                                       
  Brian E. Walsh  
  Member, Board of Directors  
  Great-West Life & Annuity Insurance Company              
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