As filed with the Securities and Exchange Commission on April 2, 2021
Registration File No. 333-__________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
VOYA RETIREMENT INSURANCE AND ANNUITY COMPANY
(Exact name of registrant as specified in its charter)
Connecticut
(State or jurisdiction of incorporation or organization)
71-0294708
(I.R.S. Employer Identification Number)
One Orange Way, C2S, Windsor, Connecticut 06095-4774, 1-800-262-3862
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Peter M. Scavongelli, Assistant Vice President and Senior Counsel
Voya Retirement Insurance and Annuity Company
One Orange Way, C2S, Windsor, Connecticut 06095-4774
(860) 580-1631
As soon as practical after the effective date of this registration statement
(Approximate date of commencement of proposed sale to the public)
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: ¨
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. þ
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ¨
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,†“accelerated filer†and “smaller reporting company†and “emerging growth company†in Rule 12b-2 of the Exchange Act. ¨
Large accelerated filer ¨ Accelerated Filer ¨
Non-accelerated filer þ (Do not check if a smaller reporting company) Smaller reporting company ¨
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected to not use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 8(a)(2)(B) of Securities Act. ¨
CALCULATION OF THE REGISTRATION FEE
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Title of each class of securities to be registered |
Amount to be registered* |
Proposed maximum offering price per unit* |
Proposed maximum aggregate offering price |
Amount of registration fee* |
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$1,000,000.00 |
$109.10 |
* The proposed maximum aggregate offering price is estimated solely for the purpose of determining the registration fee. The amount to be registered and the proposed maximum offering price per unit are not applicable as these securities are not issued in predetermined amounts or units.
PART I
INFORMATION REQUIRED IN PROSPECTUS
Voya Retirement Insurance and Annuity Company
Single Premium Deferred Modified Guaranteed Annuity Contract
VOYA MULTI-RATE ANNUITY
May 1, 2021
The Contract. The contract described in this prospectus is a group or individual, single purchase payment, modified guaranteed deferred annuity contract issued by Voya Retirement Insurance and Annuity Company (“VRIAC,” the “Company,” “we,” “us” or “our”). Prior to January 1, 2006, the Contract was issued by ING Insurance Company of America (“IICA”). On December 31, 2005, IICA merged with and into ING Life Insurance and Annuity Company (now known as VRIAC), and VRIAC assumed responsibility for all of IICA’s obligations under the contracts. This contract is no longer available for purchase. See “Purchase” in this prospectus for additional information.
Why Reading this Prospectus is Important. This prospectus contains facts about the contract that you should know before investing. The information will help you determine if the contract is right for you. Read this prospectus carefully. If you do invest in the contract, retain this document for future reference.
How it Works. Upon purchase, you may direct your purchase payment to different guaranteed terms ranging up to and including 20 years. Each guaranteed term has its own guaranteed interest rate. When the guaranteed term(s) end, you can reinvest in another guaranteed term, begin receiving income payments, or withdraw your full account value.
Withdrawals. You may withdraw all or part of your accumulated funds at any time. Withdrawals prior to the end of a guaranteed term may be subject to a market value adjustment and certain fees. Upon a full withdrawal, you could, therefore, receive less than your purchase payment. See the “Market Value Adjustment” section and the “Fees” section in this prospectus for additional information.
PLEASE REFER TO PAGE 4 OF THIS PROSPECTUS FOR A DISCUSSION OF THE RISK FACTORS ASSOCIATED WITH THE CONTRACT.
Additional Disclosure Information. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed on the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. We do not intend for this prospectus to be an offer to sell or a solicitation of an offer to buy these securities in any state that does not permit their sale. We have not authorized anyone to provide you with information different from that contained in this prospectus. The contract described in this prospectus is not a deposit with, obligation of, or guaranteed or endorsed by any bank, nor is it insured by the Federal Deposit Insurance Corporation (“FDIC”).
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Our Home Office: Voya Retirement Insurance and Annuity Company One Orange Way Windsor, CT 06095-4774 |
Customer Service: P.O. Box 9271 Des Moines, IA 50306-9271 1-800-531-4547 |
We pay compensation to broker/dealers whose registered representatives sell the contract. See “Other Topics – Contract Distribution,” for further information about the amount of compensation we pay.
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VRIAC MRA |
Page
CONTRACT OVERVIEW 3
GUARANTEED TERMS AND GUARANTEED INTEREST RATES 5
YOUR CHOICES AT THE END OF A GUARANTEED TERM 7
PURCHASE 8
RIGHT TO CANCEL 9
FEES 9
WITHDRAWALS 11
SYSTEMATIC DISTRIBUTION OPTIONS 12
MARKET VALUE ADJUSTMENT 13
DEATH BENEFIT 14
INCOME PHASE 15
INVESTMENTS 17
FEDERAL TAX CONSIDERATIONS 19
OTHER TOPICS 30
APPENDIX I – Calculating a Market Value Adjustment I-1
VRIAC MRA 2
The following is intended as a summary. Please read each section of this prospectus for additional detail.
Questions: Contacting the Company. To answer your questions, contact your sales representative or write or call Customer Service:
Voya Retirement Insurance and Annuity Company
P.O. Box 9271
Des Moines, IA 50306-9271
1-800-531-4547
Contract Design
The contract described in this prospectus is a group or individual, single purchase payment, modified guaranteed deferred annuity contract issued by Voya Retirement Insurance and Annuity Company. It is intended to be used as a retirement savings vehicle that allows you to invest in fixed interest options in order to help meet long-term financial goals.
Who’s Who
The contract holder (“you”): The person to whom we issue an individual contract or a certificate under a group contract. We may also refer to the contract holder as the contract owner.
The Company (“we,” “us” or “our”): Voya Retirement Insurance and Annuity Company. We issue the contract.
The contract: Both individual contracts and certificates under a group contract are referred to in this prospectus as the contract.
Contract Phases
The Accumulation Phase
· At Investment. Upon purchase, you may direct your purchase payment to different guaranteed terms ranging up to and including 20 years. Each guaranteed term has its own guaranteed interest rate. Generally, your purchase payment will earn interest at the guaranteed interest rate(s) for the duration of the guaranteed term(s) you select. If you withdraw or transfer amounts prior to the end of a guaranteed term, those amounts may be subject to a market value adjustment and certain fees. See “Market Value Adjustment” and “Fees.”
· At Maturity. We will notify you at least 18 days before the guaranteed term ends. If you do not make any election before the guaranteed term ends, we will automatically renew the contract for a guaranteed term of the same or similar duration. If you do not want to automatically renew, contact us before the guaranteed term ends. Prior to the end of a guaranteed term, you can elect to reinvest in a different guaranteed term, begin income phase payments, or withdraw the full amount available at maturity.
The Income Phase
You may start receiving income phase payments at any time after the first year of the contract. Several payment options are available. See “Income Phase.” In general, you may receive payments for a specified period of time or for life; receive payments monthly, quarterly, semi-annually or annually; and select an option that provides a death benefit to beneficiaries.
VRIAC MRA 3
Contract Facts
Free Look/Right to Cancel: You may cancel the contract within ten days of receipt (or as otherwise provided by state law). See “Right to Cancel.”
Death Benefit: A beneficiary may receive a benefit in the event of your death during both the accumulation and income phases (described in “Contract Phases,” above). The availability of a death benefit during the income phase depends upon the payment option selected. See “Death Benefit” and “Income PHASE.”
Withdrawals: During the accumulation phase, you may withdraw all or part of your account value. Amounts withdrawn may be subject to a market value adjustment, early withdrawal charge, maintenance fee, tax withholding and taxation. See “Market Value Adjustment,” “Withdrawals,” “Fees” and “Federal Tax Considerations.”
Systematic Distribution Options: You may elect to receive regular payments from your account, while retaining the account in the accumulation phase. See “Systematic Distribution Options.”
Fees: Certain fees may be deducted from your account value. See “Fees.”
Taxation: You will not generally pay taxes on any earnings from the annuity contract described in this prospectus until they are withdrawn. Tax-qualified retirement arrangements (e.g., IRAs) also defer payment of taxes on earnings until they are withdrawn. If you are considering funding a tax-qualified retirement arrangement with an annuity contract, you should know that the annuity contract does not provide any additional tax deferral of earnings beyond the tax deferral provided by the tax-qualified retirement arrangement. However, annuities do provide other features and benefits which may be valuable to you. You should discuss your alternatives with your financial representative.
Taxes will generally be due when you receive a distribution. Tax penalties may apply in some circumstances. See “Federal Tax Considerations.”
Market Value Adjustment (“MVA”): If you withdraw all or part of your account value before a guaranteed term is completed, an MVA may apply. The MVA reflects the change in the value of the investment due to changes in interest rates since the date of investment, and may be positive or negative. See “Market Value Adjustment.”
Purchasing the contract involves certain risks as noted below. You should also carefully consider your personal tax situation before you purchase a contract. See “FEDERAL TAX CONSIDERATIONS” and discuss your personal tax situation with a tax and/or legal adviser for information about the tax treatment of the contract.
Liquidity Risk – The contract is designed for long-term investment and your purchase payment should be invested in the contract for at least the length of the early withdrawal charge period. The special withdrawal percentage does provide some liquidity. However, if you withdraw more than the special withdrawal percentage, an early withdrawal charge may apply, which in combination with the Market Value Adjustment, could result in the loss of principal and earnings. Because the contract provides only limited liquidity during the early withdrawal charge period, it is not suitable for short-term investment.
Fees – Your account value may be impacted by the early withdrawal charge, maintenance fee, premium taxes, Market Value Adjustment, and taxes. These fees and other deductions could result in you receiving less than your purchase payment.
VRIAC MRA 4
Early Withdrawal Charge – An early withdrawal charge may apply to certain withdrawals of all or a portion of your account value. The early withdrawal charge is designed to recover some of our sales and administrative costs associated with the contract. Any early withdrawal charge, in combination with the MVA, could result in the loss of principal and earnings. You bear the risk that you may receive less than your purchase payment.
The Market Value Adjustment – An MVA may apply to surrenders and early withdrawals or other transactions associated with the contract. We use the MVA to protect us from the risk that we will suffer a loss should we need to liquidate the investments we use to support the guaranteed interest rates that we offer in order to pay you the amount requested. The MVA may be negative, positive or result in no change. The MVA is generally negative when interest rates in the current market are higher than at the guaranteed interest rates for the guaranteed terms in which you are invested. At the time of any transaction triggering an MVA, in the event that interest rates in the current market are higher, you bear the risk that you may receive less than your purchase payment.
Interest Rate Risk – The minimum guaranteed interest rate associated with any applicable guaranteed term will never be less than the rate stated in your contract. We will periodically determine the interest rates we offer in excess of the guaranteed minimum interest rate in our sole discretion. We have no specific formula for determining the rate of interest we will declare in the future. The interest rates we declare are influenced by, but do not necessarily correspond with, interest rates available on the type of debt instruments in which we intend to invest amounts attributable to the contract. We cannot predict the level of future interest rates.
Investment Risk – The contract’s investment risk and return characteristics are similar to those of a zero coupon bond or certificate of deposit. Your account value maintained through the end of a guaranteed term provides a fixed rate of return. The Company guarantees principal and credited interest only when held for the length of the guaranteed term. Otherwise, an early withdrawal charge may apply, which in combination with the MVA, could result in the loss of principal and earnings. You bear the risk that you may receive less than your purchase payment.
Financial Strength – All guarantees under the contract are subject to the financial strength and claims paying ability of the Company.
The contract offers fixed interest options called guaranteed terms. On the application or enrollment form, you select the guaranteed term(s) you want to invest in from among the guaranteed terms we offer at that time. Your purchase payment earns interest at the guaranteed interest rate applicable to that guaranteed term.
Guaranteed Terms
Start Date. Guaranteed terms always start on the first business day of the month.
Length. Guaranteed terms are offered at our discretion for various lengths of time ranging up to and including 20 years.
Minimum Payments. Your single purchase payment must be at least $10,000.00. You may divide your single purchase payment among any of the various guaranteed terms we offer, but you must invest at least $1,000 in any single guaranteed term.
VRIAC MRA 5
Guaranteed Interest Rates. We state the guaranteed interest rates as an effective annual rate of return. In other words, we credit the interest you earn on your purchase payment at a rate that provides the guaranteed rate of return over a one-year period, assuming you make no withdrawals. Guaranteed interest rates will never be less than the minimum guaranteed interest rate stated in the contract. We reserve the right to offer, from time to time, guaranteed interest rates to prospective investors that are higher than those offered to current contract holders with respect to guaranteed terms of the same duration.
One Guaranteed Term/Multiple Guaranteed Interest Rates. More than one guaranteed interest rate may be applicable during a guaranteed term greater than one year. For example, a guaranteed term of five years may apply one guaranteed interest rate for the first year, a different guaranteed interest rate for the next two years, and a third guaranteed interest rate for the last two years. You may not select a guaranteed term with multiple guaranteed interest rates if your contract is issued in the State of New York.
Example of Interest Crediting at the Guaranteed Interest Rate. The example below shows how interest is credited during a guaranteed term. The hypothetical guaranteed interest rate used in this example is illustrative only and is not intended to predict future guaranteed interest rates to be offered under the contract. Actual guaranteed interest rates offered may be more or less than those shown. The example assumes no withdrawals of any amount during the entire seven-year guaranteed term illustrated. The example does not reflect any market value adjustment, federal income taxes, possible tax penalties, or deductions of any early withdrawal charge, premium taxes, or maintenance fees. See “Withdrawals,” “Market Value Adjustment,” “Fees” and “Federal Tax Considerations.”
Example:
Purchase payment: $20,000.00
Guaranteed term: 7 years
Guaranteed interest rate: 6.00% per year
The guaranteed interest rate is applied in this example by using the formula:
1 + the guaranteed interest rate = 1.06
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Account Value at End |
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Interest Earned at End |
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Contract year 1 = $21,200.00 ($20,000.00 x 1.06) |
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Interest at end of contract year 1 = $1,200.00 |
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Contract year 2 = $22,472.00 ($21,200.00 x 1.06) |
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Interest at end of contract year 2 = $1,272.00 |
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Contract year 3 = $23,820.32 ($22,472.00 x 1.06) |
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Interest at end of contract year 3 = $1,348.32 |
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Contract year 4 = $25,249.54 ($23,820.32 x 1.06) |
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Interest at end of contract year 4 = $1,429.22 |
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Contract year 5 = $26,764.51 ($25,249.54 x 1.06) |
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Interest at end of contract year 5 = $1,514.97 |
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Contract year 6 = $28,370.38 ($26,764.51 x 1.06) |
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Interest at end of contract year 6 = $1,605.87 |
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End of guaranteed term = $30,072.61 ($28,370.38 x 1.06) |
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Interest at end of contract year 7 = $1,702.23 |
Total interest credited in guaranteed term = $10,072.61 ($30,072.61 - $20,000.00)
VRIAC MRA 6
Determination of Guaranteed Interest Rates. We will periodically determine the guaranteed interest rates we offer at our sole discretion. We have no specific formula for determining the rate of interest we will declare as future guaranteed interest rates. Our determination of guaranteed interest rates is influenced by, but does not necessarily correspond to, interest rates available on the types of debt instruments in which we intend to invest the amounts attributable to the contract. See “Investments.” The Company’s management will also consider various factors in determining guaranteed interest rates for a given guaranteed term, including some or all of the following:
· Regulatory and tax requirements;
· Sales commissions;
· Administrative expenses;
· General economic trends; and
· Competitive factors.
The Company’s management determines the guaranteed interest rates we will offer. We cannot predict nor guarantee future levels of guaranteed interest rates above the contractually guaranteed minimum rate nor guarantee what rates will be offered in the future.
At least 18 calendar days prior to the end of a guaranteed term, we will notify you that the guaranteed term is about to end. At the end of a guaranteed term, you can do three things with the amount you have accumulated for that guaranteed term:
· Reinvest all or part of it in another guaranteed term;
· Withdraw all or part of it; or
· Use all or part of it to start your income phase payments.
These choices can also be combined. For example, you can withdraw part of the amount you have accumulated and reinvest the balance or reinvest part and use the balance to start income phase payments. Each of these choices has certain consequences, which you should consider carefully. See “Withdrawals,” “Income Phase” and “Federal Tax Considerations.”
Requesting Your Choice. Once you decide what you want to do with your account value for that guaranteed term, you must advise us of your decision by completing an election form. We must receive your completed election form at least five days prior to the end of the guaranteed term to which it applies.
If we do not receive your properly completed election form in time, or you do not submit an election form, your account value at the end of the guaranteed term will be automatically reinvested in the following manner:
· For a guaranteed term equal to the guaranteed term just ended;
· If no such guaranteed term is available, for the guaranteed term with the next shortest duration; or
· If no such shorter guaranteed term is available, for the guaranteed term with the next longest duration.
Your account value will then earn interest at the guaranteed interest rate applicable to the guaranteed term automatically selected for you. We will mail a confirmation statement to you the next business day after the completion of the just-ended guaranteed term advising you of the new guaranteed term and guaranteed interest rate.
VRIAC MRA 7
Contract Type. The contract is no longer available for purchase. The contract was available to be purchased as one of the following:
(1) A nonqualified deferred annuity;
(2) A rollover to a traditional individual retirement annuity (“IRA”) under Tax Code Section 408(b); (limitations apply, see “Purchasing a Traditional IRA” in this section); or
(3) A rollover to a Roth IRA under Tax Code Section 408A (limitations apply, see “Purchasing a Roth IRA” in this section).
How to Purchase. To purchase a contract, complete an application or enrollment form and submit it to the Company along with your purchase payment.
Payment Methods. The following purchase payment methods are allowed:
· One lump-sum payment; or
· Transfer or rollover from a pre-existing plan or account.
We reserve the right to reject any payments without advance notice.
Payment Amount. The minimum purchase payment is $10,000. We may limit the amount of the maximum purchase payment. All purchase payments over $1,000,000 will be allowed only with our consent. You may not make any additional purchase payments under an existing contract. However, eligible persons may purchase additional contracts at the then prevailing guaranteed interest rates and guaranteed terms.
Purchasing a Traditional IRA. To purchase the contract as a traditional IRA, your purchase payment must be a transfer of amounts held in one of the following:
· A traditional individual retirement account under Tax Code Section 408(a);
· A traditional individual retirement annuity under Tax Code Section 408(b); or
· A retirement plan qualified under Tax Code Section 401 or 403.
Purchasing a Roth IRA. A contract may be purchased as a Roth IRA under Tax Code Section 408A, by transferring amounts previously accumulated under another Roth IRA or from a traditional individual retirement annuity or individual retirement account, provided certain conditions are met. See “Federal Tax Considerations.”
Acceptance or Rejection of Applications or Enrollment Forms. We must accept or reject your application or enrollment form within two business days of receipt. If the application or enrollment form is incomplete, we may hold it and any accompanying purchase payment for five days. Payments may be held for longer periods only with your consent, pending acceptance of the application or enrollment form. If the application or enrollment form is accepted, a contract will be issued to you. If the application or enrollment form is rejected, we will return it and any payments to you, without interest.
What Happens to Your Purchase Payment? If we accept your application or enrollment form, your purchase payment becomes part of our general assets and is credited to an account established for you. We will confirm the crediting of your purchase payment within five business days of receipt of your properly completed application or enrollment form. You start earning interest on your purchase payment beginning on the effective date of the contract, which is the date your purchase payment is credited. During the period of time between the date your purchase payment is credited and the start of the guaranteed term you selected, your purchase payment earns interest at the guaranteed interest rate applicable to the guaranteed term you selected.
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You may cancel the contract within ten days of receiving it (or as otherwise provided by state law) by returning it to Customer Service along with a written notice of cancellation. We will issue a refund within seven days of our receipt of the contract and written notice of cancellation. The refund will equal the amount of your purchase payment.
The following fees and other deductions may impact your account value:
· Early Withdrawal Charge (see below);
· Maintenance Fee (see below);
· Premium Taxes (see below);
· Market Value Adjustment (see “Market Value Adjustment”); and
· Taxation (see “Federal Tax Considerations”).
Early Withdrawal Charge
Withdrawals of all or a portion of your account value may be subject to a charge. In the case of a partial withdrawal where you request a specified dollar amount, the amount withdrawn from your account will be the amount you specified plus adjustment for any applicable early withdrawal charge.
Amount. The amount is a percentage of the purchase payment you withdraw. The percentage will be determined by the early withdrawal charge schedule below.
Purpose. This is a deferred sales charge. It reimburses some of our sales and administrative expenses associated with the contract.
Early Withdrawal Charge Schedule:
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Years since purchase payment credited: |
0 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
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Fee as a percentage of payment withdrawn: |
7% |
7% |
6% |
6% |
5% |
4% |
2% |
0% |
How We Apply the Schedule. For purposes of applying the early withdrawal charge, all time periods are measured from the date your purchase payment is credited, even if you reinvest all or part of your account value in another guaranteed term. Once the early withdrawal charge declines to 0%, it no longer applies, regardless of how long you own the contract.
The early withdrawal charge applies only to withdrawals of your purchase payment. However, for the purposes of this charge, we assume you are withdrawing all or part of your purchase payment first (not your earnings). This assumption is not made for tax purposes. See “Federal Tax Considerations.”
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Example. Assume the first guaranteed term you select is for five years. Further assume that at the end of this five-year guaranteed term, you decide to reinvest your account value for another guaranteed term of four years. Assume you then make a withdrawal (but not a special withdrawal, as described below) during the second year of the new guaranteed term. Because six years have passed since your purchase payment was credited, you would pay a 2% early withdrawal charge, even though you could have withdrawn all or part of your account value at the end of the first five-year guaranteed term without paying an early withdrawal charge. See “Waiver of Charge,” below. However, if you make a withdrawal during the third year of the new guaranteed term, or anytime thereafter, you would pay no early withdrawal charge, because seven years would have passed since your purchase payment was credited.
Special Withdrawals. After 12 months from the contract effective date, you may make one withdrawal equal to 10% or less of your account value during any calendar year, valued at the time we receive your withdrawal request in writing, and we will not deduct any early withdrawal charge. This special withdrawal is subject to the following restrictions:
· It applies only to the first withdrawal each calendar year;
· All subsequent withdrawals that calendar year are subject to an early withdrawal charge, even if you did not withdraw the full 10% with your first withdrawal; and
· If your first withdrawal of the calendar year is in excess of 10% of your account value, the excess amount is subject to an early withdrawal charge.
Waiver of Charge. The early withdrawal charge is waived for amounts that are:
· Withdrawn at the end of a guaranteed term, provided that at least five days prior to the end of that guaranteed term we receive your withdrawal request in writing. (If you reinvest those amounts in another guaranteed term, future withdrawals will be subject to an early withdrawal charge as described above);
· A full surrender of the account, where the current value of the account is $2,500 or less, provided that no withdrawal has been made from your account during the prior 12 months;
· Withdrawn due to your election of a systematic distribution option (see “SYSTEMATIC DISTRIBUTION OPTIONS”); or
· Withdrawn due to an involuntary termination. This may occur if your account value is less than $2,500. See “Other Topics ‒ Involuntary Terminations.”
Nursing Home Waiver. If approved in your state, you may withdraw all or a portion of your account value without an early withdrawal charge if all of the following conditions are met:
· More than one account year has elapsed since the date your purchase payment was credited;
· The annuitant designated under the contract has spent at least 45 consecutive days in a licensed nursing facility (in New Hampshire, the facility may be non-licensed); and
· The withdrawal is requested within three years of the designated annuitant’s admission to a licensed nursing facility (in Oregon there is no three year limitation and in New Hampshire, the facility may be non-licensed).
We will not waive the early withdrawal charge if the annuitant was in a licensed nursing care facility at the time you purchased the contract. The nursing home waiver may not be available in all states.
Market Value Adjustment and Taxation. Except for withdrawals at the end of a guaranteed term as noted above, and withdrawals under a systematic distribution option, a market value adjustment is applicable to any amounts you withdraw. Regardless of when or how withdrawals are taken, you may also be required to pay taxes and tax penalties. See “Market Value Adjustment” and “Federal Tax Considerations.”
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Annual Maintenance Fee
Currently, we do not charge a maintenance fee. However, prior to the time you enter the income phase, an annual maintenance fee may be deducted from your account value on each anniversary of the contract’s effective date and if you make a full withdrawal from the contract. The terms and conditions under which the maintenance fee may be deducted are stated in the contract. A maintenance fee would be used to reimburse us for our administrative expenses relating to establishing and maintaining the contract.
Premium Taxes
Maximum Amount. Some states and municipalities charge a premium tax on annuities. These taxes currently range from 0% to 4%, depending upon the jurisdiction.
When/How. We reserve the right to deduct a charge for premium taxes from your account value or from your payment to the account at any time, but not before there is a tax liability under state law. For example, we may deduct a charge for premium taxes at the time of a complete withdrawal or we may reflect the cost of premium taxes in our income phase payment rates when you commence income phase payments. If, at your death, your beneficiary elects to receive a lump-sum distribution, a charge may be deducted for any premium taxes paid on your behalf for which we have not been reimbursed. If we deduct premium taxes from your purchase payment, the amount invested in a guaranteed term will be equal to the amount of your purchase payment reduced by any applicable premium tax.
You may withdraw all or part of your account value at any time during the accumulation phase. Amounts are withdrawn on a pro-rata basis from each of the guaranteed terms under the contract. You may request that we inform you in advance of the amount payable upon a withdrawal.
Steps for Making a Withdrawal
· Select the withdrawal amount.
(1) Full Withdrawal: You will receive, reduced by any required withholding tax, your account value, plus or minus any applicable market value adjustment, and minus any applicable early withdrawal charge and annual maintenance fee.
(2) Partial Withdrawal (Percentage or Specified Dollar Amount): You will receive, reduced by any required withholding tax, the amount you specify, subject to the value available in your account. However, the amount actually withdrawn from your account will be adjusted for any applicable early withdrawal charge and any positive or negative market value adjustment, and accordingly, may be more or less than the amount requested.
· Properly complete a disbursement form and submit it to Customer Service.
Delivery of Payment. Payment of withdrawal requests will be made in accordance with the SEC’s requirements. Normally, payment will be sent not later than seven days following our receipt of the disbursement form in good order. Generally, a request is considered to be in “good order” when it is signed, dated and made with such clarity and completeness that we are not required to exercise any discretion in carrying it out. However, under certain emergency situations, we may defer payment of any withdrawal for a period not exceeding six months from the date we receive your withdrawal request.
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Taxes, Fees and Deductions. Amounts withdrawn may be subject to one or more of the following:
· Early Withdrawal Charge: Withdrawals of all or a portion of your account may be subject to an early withdrawal charge. This is a deferred sales charge that reimburses us for some of the sales and administrative expenses associated with the contract. See “Fees ‒ Early Withdrawal Charge.”
· Annual Maintenance Fee: If you make a full withdrawal from the contract, we may deduct any applicable annual maintenance fee. See “Fees ‒ Annual Maintenance Fee.”
· Market Value Adjustment: The MVA reflects changes in interest rates since the start of the guaranteed term. The MVA may be positive or negative. If you make a withdrawal before the end of a guaranteed term, we will calculate an MVA and the amount withdrawn will be adjusted for any applicable positive or negative MVA. See “Market Value Adjustment.”
· Tax Penalty: If you make a withdrawal before you attain age 59½, the amount withdrawn may be subject to a 10% penalty tax. See “Federal Tax Considerations.”
· Tax Withholding: Amounts withdrawn may be subject to withholding for federal income taxes. See “Federal Tax Considerations.”
All applicable fees and deductions are deducted from the amount of your withdrawal in accordance with the terms of the contract. Any market value adjustment applicable to your withdrawal, taxes, fees and deductions may either increase or decrease the amount paid to you. To determine which may apply, refer to the appropriate sections of this prospectus, contact your sales representative or call Customer Service at the number listed in “Contract Overview.”
Features of a Systematic Distribution Option
A systematic distribution option allows you to receive regular payments from the contract without moving into the income phase. By remaining in the accumulation phase, certain rights and flexibility not available during the income phase are retained. These options may be exercised at any time during the accumulation phase of the contract.
The following systematic distribution options may be available:
· Systematic Withdrawal Option (“SWO”). SWO is a series of automatic partial withdrawals from your account based on a payment method you select. It is designed for those who want a periodic income while retaining investment flexibility for amounts accumulated under the contract.
SWO allows you to withdraw either a specified amount or a specified percentage of the contract’s value, or to withdraw amounts over a specified time period that you determine, within certain limits described in the contract. SWO payments can be made on a monthly or quarterly basis, and the amount of each payment is determined by dividing the designated annual amount by the number of payments due each calendar year. SWO payments are withdrawn pro-rata from each of the guaranteed terms under the contract.
Under a contract purchased as a traditional IRA, if the SWO payment for any year is less than the required minimum distribution under the Tax Code, the SWO payment will be increased to an amount equal to the minimum distribution amount.
If you participate in SWO, you may not utilize a special withdrawal to make additional withdrawals from the contract. See “fees ‒ Special Withdrawals.”
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· Estate Conservation Option (“ECO”). ECO offers the same investment flexibility as SWO, but is designed for those who want to receive only the minimum distribution the Tax Code requires each year.
Under ECO, we calculate the minimum distribution amount required by law, and pay you that amount once a year. ECO is not available under nonqualified contracts or under Roth IRA contracts. ECO payments are withdrawn pro-rata from each of the guaranteed terms under the contract. We will, upon request, inform you in advance of the amount payable under ECO.
If you participate in ECO, you may not utilize a special withdrawal to make additional withdrawals from the contract. See “fees ‒ Special Withdrawals.”
· Other Systematic Distribution Options. We may add additional systematic distribution options from time to time. You may obtain additional information relating to any of the systematic distribution options from your sales representative or from Customer Service.
Availability. If allowed by applicable law, we reserve the right to discontinue the availability of one or all of the systematic distribution options for new elections at any time and to change the terms of future elections.
Eligibility. To exercise one of these options you must meet certain age criteria and your account value must meet certain minimum requirements. To determine if you meet the age and account value criteria and to assess terms and conditions that may apply, contact your sales representative or Customer Service.
Termination. You may revoke a systematic distribution option at any time by submitting a written request to Customer Service. However, once cancelled, you or your spousal beneficiary may not elect SWO again. In addition, once cancelled, ECO may not be elected again until 36 months have elapsed.
Deductions and Taxation. When you elect a systematic distribution option, your account value remains in the accumulation phase and subject to the applicable charges and deductions described in “Fees.” However, we will not apply an early withdrawal charge or market value adjustment to any part of your account value paid under SWO or ECO. Taking a withdrawal through a systematic distribution option may have tax consequences. If you are concerned about tax implications consult a tax and/or legal adviser before one of these options is elected. See “Federal Tax Considerations.”
Purpose of the MVA. If you make an early withdrawal from the contract, we may need to liquidate certain assets or use existing cash flow that would otherwise be available to invest at current interest rates. The assets we may liquidate to provide your withdrawal amount may be sold at a profit or a loss, depending upon market conditions. To lessen this impact, certain withdrawals are subject to an MVA.
What is an MVA? In certain situations described below, including when you make a withdrawal before the end of a guaranteed term, we will calculate an MVA and either add or deduct that value from the amount withdrawn. The calculation we use to determine the MVA reflects the change in the value of your investment due to changes in interest rates since the start of the guaranteed term under the contract. When these interest rates increase, the value of the investment decreases, and the MVA amount may be negative and cause a deduction from your withdrawal amount. Conversely, when these interest rates decrease, the value of the investment increases, and the MVA amount may be positive and cause an increase in your withdrawal amount.
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Calculation of the MVA. For a further explanation of how the MVA is calculated, see “Appendix I.”
When Does an MVA Apply? An MVA may apply when:
· You request a withdrawal before the end of a guaranteed term. In this case the withdrawal amount may be increased or decreased by the application of the MVA.
· You initiate income phase payments before the end of your guaranteed term. In this case an MVA may be applied to any amounts used to start income phase payments. While either a positive or negative MVA may apply to amounts used to start a nonlifetime payment option, only a positive MVA will apply to amounts used to start a lifetime payment option. See “Income Phase.”
· We terminate the contract because your account value is less than $2,500.
· You cancel the contract.
· A death benefit is paid upon the death of the annuitant, more than six months after the annuitant’s death. See “Death Benefit.”
· A death benefit is paid upon the death of a person other than the annuitant.
When Does an MVA Not Apply? An MVA will not be applied to:
· Withdrawals under SWO or ECO as described in “Systematic Distribution Options.”
· A death benefit payable upon death of an annuitant, if paid within six months of the annuitant’s death. See “Death Benefit.”
· Amounts withdrawn at the end of a guaranteed term, provided that at least five days prior to the end of that guaranteed term we receive your withdrawal request in writing. The MVA, however, remains applicable to any amount you reinvest for another guaranteed term.
During the Accumulation Phase
Who Receives the Benefit? If you or the annuitant dies during the accumulation phase, a death benefit will be paid to your beneficiary in accordance with the terms of the contract subject to the following:
· Upon the death of a joint contract holder, the surviving joint contract holder will be deemed the designated beneficiary, and any other beneficiary on record will be treated as the beneficiary at the death of the surviving joint contract holder;
· If you are not a natural person, the death benefit will be payable at the death of the annuitant designated under the contract or upon any change of the annuitant; and
· If you die and no beneficiary exists, the death benefit will be paid in a lump sum to your estate.
Designating a Beneficiary(ies). You may designate a beneficiary on your application or enrollment form, or by providing a written request in good order to Customer Service. Generally, a request is considered to be in “good order” when it is signed, dated and made with such clarity and completeness that we are not required to exercise any discretion in carrying it out.
Calculation of the Benefit. The death benefit is calculated as of the date proof of death and the beneficiary’s right to receive the death benefit are received in good order at Customer Service. The amount of the death benefit is determined as follows:
· If the death benefit is paid within six months of the death of the annuitant, the amount equals your account value;
· If the death benefit is paid more than six months after the date of death of the annuitant, or if paid upon your death and you are not the annuitant, it equals your account value as adjusted by any applicable market value adjustment; and
· If you are not the annuitant, the death benefit payable may be subject to an early withdrawal charge.
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Benefit Payment Options. If you are the annuitant and you die before income phase payments begin, or if you are not a natural person and the annuitant dies before income phase payments begin, any beneficiary under the contract who is an individual has several options for receiving payment of the death benefit. The death benefit may be paid:
· In one lump-sum payment;
· In accordance with any of the available income phase payment options. See “Income Phase ‒ Income Phase Payment Options;” or
· In certain circumstances, your beneficiary, spousal beneficiary or joint contract holder may have the option to continue the contract rather than receive the death benefit.
Unless the beneficiary elects otherwise, lump-sum payments will generally be made into an interest bearing retained asset account that is backed by our general account. This account is not FDIC insured and as part of our general account, is subject to the claims of our creditors. Beneficiaries that receive death benefit distributions through this account may access the entire proceeds at any time without penalty through a draftbook feature. Interest credited on this account may be less than you could earn if the lump-sum payment was invested outside of the contract. Additionally, interest credited on this account may be less than under other settlement options available through the contract, and the Company seeks to earn a profit on this account.
At the time of death benefit election, the beneficiary may elect to receive the death benefit proceeds directly by check rather than through the retained asset account draftbook feature by notifying us at the address shown in the “Contract Overview – Questions: Contacting the Company” section of this prospectus.
Taxation. The Tax Code requires distribution of death benefit proceeds within a certain period of time. Failure to begin receiving death benefit payments within those time periods can result in tax penalties. Regardless of the method of payment, death benefit proceeds will generally be taxed to the beneficiary in the same manner as if you had received those payments. See “Federal Tax Considerations” for additional information.
Change of Beneficiary. You may change the beneficiary previously designated at any time by submitting notice in writing to Customer Service. The change will not be effective until we receive and record it.
During the income phase you receive payments from your accumulated account value. You may apply all or a portion of your account value to provide these payments. Income phase payments are made to you or you can, subject to availability, request that payments be deposited directly to your bank account. After your death, we will send your designated beneficiary any income phase payments still due. You may be required to pay taxes on all or a portion of the income phase payments you receive. See “Federal Tax Considerations.”
Partial Entry into the Income Phase. You may elect a payment option for a portion of your account value, while leaving the remaining portion in a guaranteed term(s). Whether the Tax Code considers such payments taxable as annuity payments or as withdrawals is currently unclear; therefore, you should consult with a tax and/or legal adviser before electing this option.
Initiating Income Phase Payments. At least 30 days prior to the date you want to start receiving income phase payments, you must notify us in writing of the following:
· Start date;
· Payment option (see the payment options table in this section); and
· Payment frequency (i.e., monthly, quarterly, semi-annually or annually).
The account will continue in the accumulation phase until you properly initiate income phase payments. You may change your payment option election up to 30 days before income phase payments begin. Once you elect for income phase payments to begin, you may not elect a different payment option or elect to receive a lump-sum payment.
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What Affects Income Phase Payment Amounts? Some of the factors that may affect payment amounts include your age, your gender, your account value, the payment option selected and number of guaranteed payments (if any) selected.
Minimum Income Phase Payment Amounts. The payment option you select must result in one or both of the following:
· A first payment of at least $50; or
· Total yearly payments of at least $250.
If your account value is too low to meet these minimum payment amounts, you must elect a lump-sum payment. We reserve the right to increase the minimum payment amount based upon increases in the Consumer Price Index ‒ Urban.
Payment Start Date. Income phase payments may start any time after the first year of the contract, and will start the later of the annuitant’s 85th birthday or the tenth anniversary of your purchase payment, unless you elect otherwise.
Regardless of your income phase payment start date, your income phase payments will not begin until you have selected an income phase payment option. Failure to select a payment option by your payment start date, or postponement of the start date past the later of the annuitant’s 85th birthday or the tenth anniversary of your purchase payment, may have adverse tax consequences. You should consult with a tax and/or legal adviser if you are considering either of these courses of action.
Payment Length. If you choose a lifetime income phase payment option with guaranteed payments, the age of the annuitant plus the number of years for which payments are guaranteed must not exceed 95 at the time payments begin. Additionally, federal income tax requirements currently applicable to traditional IRAs provide that the period of years guaranteed may not be greater than the joint life expectancies of the payee and his or her designated beneficiary.
Charges Deducted. No early withdrawal charge will be applied to amounts used to start income phase payments, although a market value adjustment may be applicable.
Market Value Adjustment. If your income phase payments start before the end of your guaranteed term, a market value adjustment will be applied to any amounts used to start income phase payments. If you select a lifetime payment option, only a positive market value adjustment will be applied. See “Market Value Adjustment.”
Death Benefit During the Income Phase. Upon the death of either the annuitant or the surviving joint annuitant, the amount payable, if any, to your beneficiary depends on the payment option currently in force. Any amounts payable must be paid at least as rapidly as under the method of distribution in effect at the annuitant’s death. If you die and you are not the annuitant, any remaining payments will continue to be made to your beneficiary at least as rapidly as under the method of distribution in effect at your death.
Taxation. To avoid certain tax penalties, you or your beneficiary must meet the distribution rules imposed by the Tax Code. See “Federal Tax Considerations.”
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Income Phase Payment Options
The following table lists the income phase payment options and accompanying death benefits that may be available during the income phase. We may offer additional payment options under the contract from time to time.
Terms used in the tables:
Annuitant: The person(s) on whose life expectancy the income phase payments are calculated.
Beneficiary: The person designated to receive the death benefit payable under the contract.
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Lifetime Income Phase Payment Options |
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Life Income |
Length of Payments: For as long as the annuitant lives. It is possible that only one payment will be made should the annuitant die prior to the second payment’s due date. Death Benefit ‒ None: All payments end upon the annuitant’s death. |
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Life Income ‒ Guaranteed Payments |
Length of Payments: For as long as the annuitant lives, with payments guaranteed for your choice of 5, 10, 15 or 20 years, or other periods specified in the contract. Death Benefit: If the annuitant dies before we have made all the guaranteed payments, payments will continue to the beneficiary. |
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Life Income ‒ Two Lives |
Length of Payments: For as long as either annuitant lives. It is possible only one payment will be made if both the annuitant and joint annuitant die before the second payment’s due date. Continuing Payments: When you select this option, you will also choose either: (a) 100%, 66⅔% or 50% of the payment to continue to the surviving annuitant after the first death; or (b) 100% of the payment to continue to the first annuitant on the second annuitant’s death, and 50% of the payment to continue to the second annuitant on the first annuitant’s death. Death Benefit ‒ None: All payments end upon the death of both annuitants. |
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Life Income ‒ Two Lives ‒ Guaranteed Payments |
Length of Payments: For as long as either annuitant lives, with payments guaranteed for a minimum of 120 months, or other periods specified in the contract. Continuing Payments: 100% of the payment will continue to the surviving annuitant after the first death. Death Benefit: If both annuitants die before the guaranteed payments have all been paid, payments will continue to the beneficiary. |
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Nonlifetime Income Phase Payment Option |
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Nonlifetime ‒ Guaranteed Payments |
Length of Payments: Payments will continue for your choice of 10 through 30 years (or other periods specified in the contract). Death Benefit: If the annuitant dies before we make all the guaranteed payments, payment will continue to the beneficiary. |
Separate Account. Purchase payments received under the contract and allocated to guaranteed terms will be deposited to, and accounted for, in a nonunitized separate account that we established under Connecticut law. A nonunitized separate account is a separate account in which you do not participate in the performance of the assets through unit values or any other interest. Prior to January 1, 2006, amounts under the contract were held in a nonunitized separate account of ING Insurance Company of America (“IICA”), a wholly-owned subsidiary of the Company. In connection with the merger of IICA with and into the Company, this nonunitized separate account was transferred to the Company on December 31, 2005. The nonunitized separate account now operates pursuant to Connecticut law.
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Persons allocating amounts to the nonunitized separate account do not receive a unit value of ownership of assets accounted for in the separate account. The assets accrue solely to our benefit and we bear the entire risk of investment gain or loss. All of our obligations due to allocations to the nonunitized separate account are contractual guarantees we have made and are accounted for in the separate account. All of our general assets are available to meet the guarantees under the contracts. However, to the extent provided for in the applicable contracts, assets of the nonunitized separate account are not chargeable with liabilities arising out of any other business we conduct. Income, gains or losses of the separate account are credited to or charged against the assets of the separate account without regard to other income, gains or losses of the Company.
Setting Guaranteed Interest Rates. We do not have any specific formula for setting guaranteed interest rates for the guaranteed terms. We expect the guaranteed interest rates to be influenced by, but not necessarily correspond to, yields on fixed income securities we acquire with amounts allocated to the guaranteed terms when the guaranteed interest rates are set.
Types of Investments. Our assets will be invested in accordance with the requirements established by applicable state laws regarding the nature and quality of investments that may be made by life insurance companies and the percentage of their assets that may be committed to any particular type of investment. In general, these laws permit investments, within specified limits and subject to certain qualifications, in federal, state, and municipal obligations, corporate bonds, preferred and common stocks, real estate mortgages, and certain other investments.
We intend to invest in assets which, in the aggregate, have characteristics, especially cash flow patterns, reasonably related to the characteristics of the liabilities. Various immunization techniques will be used to achieve the objective of close aggregate matching of assets and liabilities. We will primarily invest in investment-grade fixed income securities including:
· Securities issued by the United States Government or its agencies or instrumentalities, which issues may or may not be guaranteed by the United States Government;
· Debt securities that are rated, at the time of purchase, within the four highest grades assigned by Moody’s Investors Services, Inc. (Aaa, Aa, A or Baa) or Standard & Poor’s Corporation (AAA, AA, A or BBB) or any other nationally recognized rating organizations;
· Other debt instruments including those issued or guaranteed by banks or bank holding companies and of corporations, which although not rated by Moody’s, Standard & Poor’s, or other nationally recognized rating organizations, are deemed by the Company’s management to have an investment quality comparable to securities which may be purchased as stated above; and
· Commercial paper, cash or cash equivalents, and other short-term investments having a maturity of less than one year which are considered by the Company’s management to have investment quality comparable to securities which may be purchased as stated above.
In addition, we may invest in futures and options. We purchase financial futures and related options and options on securities solely for non-speculative hedging purposes. In the event securities prices are anticipated to decline, we may sell a futures contract or purchase a put option on futures or securities to protect the value of securities held in or to be sold for the nonunitized separate account. Similarly, if securities prices are expected to rise, we may purchase a futures contract or a call option against anticipated positive cash flow or we may purchase options on securities.
While this section generally describes our investment strategy, we are not obligated to invest the assets attributable to the contract according to any particular strategy, except as may be required by Connecticut and other state insurance laws. The guaranteed interest rates we establish need not relate to the investment performance of the nonunitized separate account.
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Introduction
The contract described in this prospectus is designed to be treated as an annuity for U.S. federal income tax purposes. This section discusses our understanding of current federal income tax laws affecting the contract. The U.S. federal income tax treatment of the contracts is complex and sometimes uncertain. You should keep the following in mind when reading this section:
· Your tax position (or the tax position of the beneficiary, as applicable) determines the federal taxation of amounts held or paid out under the contract;
· Tax laws change. It is possible that a change in the future could affect contracts issued in the past, including the contract described in this prospectus;
· This section addresses some, but not all, applicable federal income tax rules and generally does not discuss federal estate and gift tax implications, state and local taxes, or any other tax provisions;
· We do not make any guarantee about the tax treatment of the contract or transactions involving the contract; and
· No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of those set forth below.
We do not intend this information to be tax advice. No attempt is made to provide more than a general summary of information about the use of the contract with non-tax-qualified and tax-qualified retirement arrangements, and the Tax Code may contain other restrictions and conditions that are not included in this summary. You should consult with a tax and/or legal adviser for advice about the effect of federal income tax laws, state tax laws or any other tax laws affecting the contract or any transactions involving the contract.
Types of Contracts: Nonqualified or Qualified
The contract described in this prospectus may be purchased on a non-tax-qualified basis (nonqualified contracts) or on a tax-qualified basis (qualified contracts).
Nonqualified Contracts. Nonqualified contracts do not receive the same tax benefits as are afforded to contracts funding qualified plans. You may not deduct the amount of your purchase payments to a nonqualified contract. Rather nonqualified contracts are purchased with after-tax contributions, generally for retirement, with the right to receive annuity payments for either a specified period of time or over a lifetime.
Qualified Contracts. Qualified contracts are designed for use by individuals and/or employers whose purchase payments are comprised solely of proceeds from and/or contributions under retirement plans or programs that are intended to qualify as plans or programs entitled to special favorable income tax treatment under sections 408 or 408A of the Tax Code. Employers or individuals intending to use the contract with such plans should seek legal and/or tax advice.
Taxation of Nonqualified Contracts
Taxation of Gains Prior to Distribution or Annuity Starting Date
General. Tax Code Section 72 governs the federal income taxation of annuities in general. We believe that if you are a natural person (in other words, an individual) you will generally not be taxed on increases in the value of a nonqualified contract until a distribution occurs or until annuity payments begin. This assumes that the contract will qualify as an annuity contract for federal income tax purposes. For these purposes, the agreement to collaterally assign or pledge any portion of the contract value generally will be treated as a distribution. In order to be eligible to receive deferral of taxation, the following requirements must be satisfied:
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· Required Distributions. In order to be treated as an annuity contract for federal income tax purposes, the Tax Code requires a nonqualified contract to contain certain provisions specifying how your interest in the contract will be distributed in the event of your death. The nonqualified contracts contain provisions that are intended to comply with these Tax Code requirements, although no regulations interpreting these requirements have yet been issued. When such requirements are clarified by regulation or otherwise, we intend to review such distribution provisions and modify them if necessary to assure that they comply with the applicable requirements;
· Non-Natural Owners of a Nonqualified Contract. If the owner of the contract is not a natural person (in other words, is not an individual), a nonqualified contract generally is not treated as an annuity for federal income tax purposes and the income on the contract for the taxable year is currently taxable as ordinary income. Income on the contract is any increase in the contract value over the “investment in the contract” (generally, the purchase payments or other consideration you paid for the contract less any nontaxable withdrawals) during the taxable year. There are some exceptions to this rule and a non-natural person should consult with a tax and/or legal adviser before purchasing the contract. When the contract owner is not a natural person, a change in the annuitant is treated as the death of the contract owner for purposes of the required distribution rules described above; and
· Delayed Annuity Starting Date. If the contract’s annuity starting date occurs (or is scheduled to occur) at a time when the annuitant has reached an advanced age (e.g., after age 95), it is possible that the contract would not be treated as an annuity for federal income tax purposes. In that event, the income and gains under the contract could be currently includible in your income.
Taxation of Distributions
General. When a withdrawal from a nonqualified contract occurs before the contract’s annuity starting date, the amount received will be treated as ordinary income subject to tax up to an amount equal to the excess (if any) of the contract value (unreduced by the amount of any surrender charge) immediately before the distribution over the contract owner’s investment in the contract at that time. A market value adjustment, if applicable, could increase the contract value. Investment in the contract is generally equal to the amount of all purchase payments to the contract, plus amounts previously included in your gross income as the result of certain loans, collateral assignments or gifts, less the aggregate amount of non-taxable distributions previously made.
In the case of a surrender under a nonqualified contract, the amount received generally will be taxable only to the extent it exceeds the contract owner’s investment in the contract (cost basis).
10% Penalty Tax. A distribution from a nonqualified contract may be subject to a penalty tax equal to 10% of the amount treated as income. In general, however, there is no penalty tax on distributions:
· Made on or after the taxpayer reaches age 59½;
· Made on or after the death of a contract owner (the annuitant if the contract owner is a non-natural person);
· Attributable to the taxpayer’s becoming disabled as defined in the Tax Code;
· Made as part of a series of substantially equal periodic payments (at least annually) over your life or life expectancy or the joint lives or joint life expectancies of you and your designated beneficiary; or
· The distribution is allocable to investment in the contract before August 14, 1982.
The 10% penalty tax does not apply to distributions from an immediate annuity as defined in the Tax Code. Other exceptions may be applicable under certain circumstances and special rules may be applicable in connection with the exceptions enumerated above. A tax and/or legal adviser should be consulted with regard to exceptions from the penalty tax.
Tax-Free Exchanges. Section 1035 of the Tax Code permits the exchange of a life insurance, endowment or annuity contract for an annuity contract on a tax-free basis. In such instance, the “investment in the contract” in the old contract will generally carry over to the new contract. You should consult with a tax and/or legal adviser regarding procedures for making Section 1035 exchanges.
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If your contract is purchased through a tax-free exchange of an annuity contract that was purchased prior to August 14, 1982, then any distributions other than annuity payments will be treated, for tax purposes, as coming:
· First, from any remaining “investment in the contract” made prior to August 14, 1982 and exchanged into the contract;
· Next, from any “income on the contract” attributable to the investment made prior to August 14, 1982;
· Then, from any remaining “income on the contract;” and
· Lastly, from any remaining “investment in the contract.”
In certain instances, the partial exchange of a portion of one annuity contract for another contract is a tax-free exchange Pursuant to IRS guidance, receipt of partial withdrawals or surrenders from either an original contract or the new contract during the 180 day period beginning on the date of the partial exchange may retroactively negate the partial exchange. If the partial exchange is retroactively negated, the partial withdrawal or surrender of the original contract may be treated as a withdrawal, taxable as ordinary income to the extent of gain in the original contract and, if the partial exchange occurred prior to you reaching age 59½, may be subject to an additional 10% penalty tax. We are not responsible for the manner in which any other insurance company, for tax reporting purposes, or the IRS, with respect to the ultimate tax treatment, reports or recognizes a partial exchange. We strongly advise you to discuss any proposed 1035 exchange or subsequent distribution within 180 days of a partial exchange with your tax and/or legal adviser prior to proceeding with the transaction.
Taxation of Annuity Payments. Although tax consequences may vary depending on the payment option elected under an annuity contract, a portion of each annuity payment is generally not taxed and the remainder is taxed as ordinary income. The non-taxable portion of an annuity payment is generally determined in a manner that is designed to allow you to recover your investment in the contract ratably on a tax-free basis over the expected stream of annuity payments, as determined when annuity payments start. Once your investment in the contract has been fully recovered, however, the full amount of each subsequent annuity payment is subject to tax as ordinary income.
Annuity contracts that are partially annuitized are treated as separate contracts with their own annuity starting date and exclusion ratio. Specifically, an exclusion ratio will be applied to any amount received as an annuity under a portion of the annuity contract provided that annuity payments are made for a period of ten years or more or for life. Please consult your tax and/or legal adviser before electing a partial annuitization.
Death Benefits. Amounts may be distributed from a contract because of your death or the death of the annuitant. Different distribution requirements apply if your death occurs:
· After you begin receiving annuity payments under the contract; or
· Before you begin receiving such distributions.
If your death occurs after you begin receiving annuity payments, distributions must be made at least as rapidly as under the method in effect at the time of your death.
If your death occurs before you begin receiving annuity payments, your entire balance must be distributed within five years after the date of your death. For example, if you die on September 1, 2021, your entire balance must be distributed by August 31, 2026. However, if distributions begin within one year of your death, then payments may be made over one of the following timeframes:
· Over the life of the designated beneficiary; or
· Over a period not extending beyond the life expectancy of the designated beneficiary.
If the designated beneficiary is your spouse, the contract may be continued with the surviving spouse as the new contract owner. If the contract owner is a non-natural person and the primary annuitant dies or is changed, the same rules apply as outlined above for the death of a contract owner.
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Generally, amounts distributed from a contract because of your death or the death of the annuitant prior to the time annuity payments begin are includible in the income of the recipient as follows:
· If distributed in a lump sum, they are taxed in the same manner as a surrender of the contract; or
· If distributed under a payment option, they are taxed in the same way as annuity payments.
Special rules apply to amounts distributed after a beneficiary has elected to maintain the contract value and receive payments.
If the death occurs after annuity payments begin, a guaranteed period exists under the annuity option selected, and the annuitant dies before the end of that period, payments made for the remainder of that period are includible in income as follows:
· If distributed in a lump sum, they are included in income to the extent that they exceed the unrecovered investment in the contract at that time; or
· If distributed in accordance with the existing annuity option selected, they are fully excluded from income until the remaining investment in the contract is deemed to be recovered, and all payments thereafter are fully includible in income.
Some contracts offer a death benefit that may exceed the greater of the purchase payments and the contract value. Certain charges are imposed with respect to these death benefits. It is possible that these charges (or some portion thereof) could be treated for federal tax purposes as a distribution from the contract.
Collateral Assignments, Pledges, Gratuitous Transfers and Other Issues. A pledge or collateral assignment (or agreement to pledge or collaterally assign) any portion of the contract value of a nonqualified contract is treated as a distribution of such amount or portion. If the entire contract value is pledged or collaterally assigned, subsequent increases in the contract value are also treated as distributions for as long as the pledge or collateral assignment remains in place. The investment in the contract is increased by the amount includible in income with respect to such pledge or collateral assignment, though it is not affected by any other aspect of the pledge or collateral assignment (including its release).
If an owner transfers a nonqualified contract without adequate consideration (a gratuitous transfer) to a person other than the owner’s spouse (or to a former spouse incident to a divorce), the owner must include in income the difference between the “cash surrender value” and the investment in the contract at the time of the transfer. In such case, the transferee’s investment in the contract will be increased to reflect the amount that is included in the transferor’s income. The exceptions for transfers to an owner’s spouse or former spouse are limited to individuals who are treated as spouses under federal law.
The designation of an annuitant or payee other than an owner may result in certain tax consequences to you that are generally not discussed herein.
Anyone contemplating any pledges, collateral assignments, gratuitous transfers, or other designations, should consult a tax and/or legal adviser regarding the potential tax effects of such a transaction.
Multiple Contracts. Tax laws require that all nonqualified deferred annuity contracts that are issued by a company or its affiliates to the same contract owner during any calendar year be treated as one annuity contract for purposes of determining the amount includible in gross income under Tax Code Section 72(e). In addition, the Treasury Department has specific authority to issue regulations that prevent the avoidance of Tax Code Section 72(e) through the serial purchase of annuity contracts or otherwise.
Net Investment Income Tax. A net investment income tax of 3.8% will apply to some types of investment income. This tax will apply to all taxable distributions from nonqualified contracts. This tax only applies to taxpayers with “modified adjusted gross income” above $250,000 in the case of married couples filing jointly or a qualifying widow(er) with dependent child, $125,000 in the case of married couples filing separately, and $200,000 for all others.
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Withholding. We will withhold and remit to the IRS a part of the taxable portion of each distribution made under a contract unless the distributee notifies us at or before the time of the distribution that he or she elects not to have any amounts withheld. Withholding is mandatory, however, if the distributee fails to provide a valid taxpayer identification number, if we are notified by the IRS that the taxpayer identification number we have on file is incorrect or if payment is made outside of the U.S. The withholding rates applicable to the taxable portion of periodic annuity payments are the same as the withholding rates generally applicable to payments of wages. In addition, a 10% withholding rate applies to the taxable portion of any non-periodic payments. Regardless of whether you elect to have federal income tax withheld, you are still liable for payment of federal income tax on the taxable portion of the payment.
Certain states have indicated that state income tax withholding will also apply to payments from the contracts made to residents. Generally, an election out of federal withholding will also be considered an election out of state withholding. In some states, you may elect out of state withholding, even if federal withholding applies. If you need more information concerning a particular state or any required forms, please contact Customer Service.
If the payee is a non-resident alien, then U.S. federal withholding on taxable distributions will generally be at a 30% rate, unless a lower tax treaty rate applies. We may require additional documentation prior to processing any requested distribution.
If the payee of a distribution from the contract is a foreign financial institution (“FFI”) or a non-financial foreign entity (“NFFE”) within the meaning of the Tax Code as amended by the Foreign Account Tax Compliance Act (“FATCA”), the distribution could be subject to U.S. federal withholding tax on the taxable amount of the distribution at a 30% rate irrespective of the status of any beneficial owner of the contract or the distribution. The rules relating to FATCA are complex, and a tax advisor should be consulted if an FFI or NFFE is or may be designated as a payee with respect to the contract.
Taxation of Qualified Contracts
Eligible Retirement Plans and Programs.
The contract may be purchased with the following retirement plans and programs to accumulate retirement savings:
· Individual Retirement Annuities (“IRA”) and Roth IRA. Section 408 of the Tax Code permits eligible individuals to contribute to an individual retirement program known as an Individual Retirement Annuity (“IRA”). Certain employers may establish Simplified Employee Pension (“SEP”) or Savings Incentive Match Plan for Employees (“SIMPLE”) plans to provide IRA contributions on behalf of their employees. Section 408A of the Tax Code permits certain eligible individuals to contribute to a Roth IRA, which provides for tax-free distributions, subject to certain restrictions. Sales of the contract for use with IRAs or Roth IRAs may be subject to special requirements of the IRS. The IRS has not reviewed the contracts described in this prospectus for qualification as IRAs and has not addressed, in a ruling of general applicability, whether the contract’s death benefit provisions comply with IRA qualification requirements.
The Company may offer or have offered the contract for use with certain other types of qualified plans. Please see your contract and consult with your tax adviser if you have questions about other types of plan arrangements not discussed herein.
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Special Considerations for IRAs. IRAs are subject to limits on the amounts that can be contributed, the deductible amount of the contribution, the persons who may be eligible, and the time when distributions commence. Contributions to IRAs must be made in cash or as a rollover or a transfer from another eligible plan. Also, distributions from IRAs, individual retirement accounts, and other types of retirement plans may be “rolled over” on a tax-deferred basis into an IRA. You may roll over a distribution from an IRA to an IRA only once in any 12 month period. You will not be able to roll over any portion of an IRA distribution if you rolled over any other IRA a distribution during the preceding one-year period. This limit applies by aggregating all of your IRAs, including SEP and SIMPLE IRAs as well as traditional and Roth IRAs, effectively treating them as one IRA for purposes of this limit. Please note that this one-rollover-per-year rule does not apply to: (1) the conversion of a traditional IRA to a Roth IRA; (2) a rollover to or from a qualified plan; or (3) a trustee-to-trustee transfer between IRAs. Please consult your own tax and/or legal adviser if you have additional questions about these rules.
Early distributions from SIMPLE IRAs made within two years of beginning participation in the SIMPLE IRA are subject to a 25% early distribution tax.
Special Considerations for Roth IRAs. Contributions to a Roth IRA are subject to limits on the amount of contributions and the persons who may be eligible to contribute. Roth IRA contributions are not deductible, and must be made in cash or as a rollover or transfer from another Roth IRA, IRA or eligible plan. Individuals may convert an IRA, SEP, or a SIMPLE to a Roth IRA. Such rollovers and conversions are subject to tax, and other special rules may apply. A conversion of a traditional IRA to a Roth IRA and a rollover from any other eligible retirement plan to a Roth IRA made after December 31, 2017, cannot be recharacterized as having been made to a traditional IRA.
You will not be able to roll over any portion of a Roth IRA distribution if you rolled over any other IRA distribution during the preceding one-year period. This limit applies by aggregating all of your IRAs, including SEP and SIMPLE IRAs, effectively treating them as one IRA for purposes of this limit. Please note that this one-rollover-per-year rule does not apply to: (1) the conversion of a traditional IRA to a Roth IRA; (2) a rollover to or from a qualified plan; or (3) a trustee-to-trustee transfer between Roth IRAs. Please consult your own tax and/or legal adviser if you have additional questions about these rules.
A 10% penalty tax may apply to amounts attributable to a conversion to a Roth IRA if the amounts are distributed during the five taxable years beginning with the year in which the conversion was made.
Taxation
The tax rules applicable to qualified contracts vary according to the type of qualified contract and the specific terms and conditions of the qualified contract and the terms and conditions of the qualified plan or program. The ultimate effect of federal income taxes on the amounts held under a qualified contract, or on income phase (i.e., annuity) payments from a qualified contract, depends on the type of qualified contract or program as well as your particular facts and circumstances. Special favorable tax treatment may be available for certain types of contributions and distributions. In addition, certain requirements must be satisfied in purchasing a qualified contract with proceeds from a tax-qualified plan or program in order to continue receiving favorable tax treatment.
Adverse tax consequences may result from:
· Contributions in excess of specified limits;
· Distributions before age 59½ (subject to certain exceptions);
· Distributions that do not conform to specified commencement and minimum distribution rules; and
· Other specified circumstances.
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Some qualified plans and programs are subject to additional distribution or other requirements that are not incorporated into the contract described in this prospectus. No attempt is made to provide more than general information about the use of the contract with qualified plans and programs. Contract owners, sponsoring employers, participants, annuitants, and beneficiaries are cautioned that the rights of any person to any benefit under these qualified plans and programs may be subject to the terms and conditions of the plan or program, regardless of the terms and conditions of the contract. The Company is not bound by the terms and conditions of such plans and programs to the extent such terms contradict the language of the contract, unless we consent in writing.
Contract owners, sponsoring employers, participants, annuitants and beneficiaries generally are responsible for determining that contributions, distributions and other transactions with respect to the contract comply with applicable law. Therefore, you should seek tax and/or legal advice regarding the suitability of a contract for your particular situation. The following discussion assumes that qualified contracts are purchased with proceeds from and/or contributions under retirement plans or programs that qualify for the intended special federal tax treatment.
Tax Deferral. Under the federal tax laws, earnings on amounts held in annuity contracts are generally not taxed until they are withdrawn. However, in the case of a qualified plan (as described in this prospectus), an annuity contract is not necessary to obtain this favorable tax treatment and does not provide any tax benefits beyond the deferral already available to the qualified plan itself. Annuities do provide other features and benefits (such as guaranteed living benefits and/or death benefits or the option of lifetime income phase options at established rates) that may be valuable to you. You should discuss your alternatives with your financial representative taking into account the additional fees and expenses you may incur in an annuity.
Contributions
In order to be excludable from gross income for federal income tax purposes, total annual contributions to certain qualified plans and programs are limited by the Tax Code. We provide general information on these requirements for certain plans and programs below. You should consult with a tax and/or legal adviser in connection with contributions to a qualified contract.
Repeal of Maximum Age for Contributions to a Traditional IRA. The SECURE Act eliminated the maximum age after which contributions to a traditional IRA were not allowed. Consequently, individuals who have attained age 70½ will no longer be prohibited from making non-rollover contributions to traditional IRAs.
Traditional and Roth IRAs. You are eligible to contribute to a traditional IRA if you have compensation includible in income for the taxable year. For 2021, the contribution to your traditional IRA cannot exceed the lesser of $6,000 or your taxable compensation. If you are age 50 or older, you can make an additional catch-up contribution of $1,000. Contributions to a traditional IRA may be deductible depending on your modified adjusted gross income (“MAGI”), tax filing status, and whether you or your spouse are an active participant in a retirement plan.
You may be eligible to contribute to a Roth IRA if you have compensation includible in income for the year. For 2021, the contribution to a Roth IRA cannot exceed the lesser of $6,000 or your taxable compensation. If you are age 50 or older, you can make an additional catch up contribution of $1,000. The amount you can contribute to a Roth IRA is reduced by the amount of any contributions you make to an individual retirement plan for your benefit (not including SEPs or SIMPLE IRAs). Your ability to contribute to a Roth IRA may be further limited by your MAGI and tax filing status. Contributions to a Roth IRA are not deductible.
Distributions – General
Certain tax rules apply to distributions from the contract. A distribution is any amount taken from a contract including withdrawals, income phase (i.e., annuity) payments and death benefit proceeds. If a portion of a distribution is taxable, the distribution will be reported to the IRS.
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IRAs. All distributions from an IRA are taxed as received unless either one of the following is true:
· The distribution is directly transferred to another IRA or to a plan eligible to receive rollovers as permitted under the Tax Code; or
· You made after-tax contributions to the IRA. In this case, the distribution will be taxed according to rules detailed in the Tax Code.
10% Additional Tax. The Tax Code imposes a 10% additional tax on the taxable portion of any distribution from a traditional or Roth IRA.
Exceptions to the 10% additional tax may apply if:
· You have attained age 59½;
· You have become disabled, as defined in the Tax Code;
· You have died and the distribution is to your Beneficiary;
· The distribution amount is rolled over tax free into another eligible retirement plan or to a traditional or Roth IRA in accordance with the terms of the Tax Code;
· The distribution is paid directly to the government in accordance with an IRS levy;
· The distribution is a qualified reservist distribution as defined under the Tax Code;
· The distribution is a qualified birth or adoption distribution;
· The distribution is eligible for penalty relief extended to victims of certain natural disasters;
· You have unreimbursed medical expenses that are deductible (without regard to whether you itemized deductions);
· The distribution amount is made in substantially equal periodic payments (at least annually) over your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary;
· The distributions are not more than the cost of your medical insurance due to a period of unemployment (subject to certain conditions);
· The distributions are not more than your qualified higher education expenses; or
· You use the distribution to buy, build or rebuild a first home.
The Tax Code may provide other exceptions or impose other penalty taxes in other circumstances.
Qualified Distributions ‒ Roth IRAs. A partial or full distribution of purchase payments to a Roth IRA account and earnings credited on those purchase payments will be excludable from income if it is a qualified distribution. A “qualified distribution” from a Roth IRA account is defined as a distribution that meets the following two requirements:
· The distribution occurs after the five-year taxable period measured from the earlier of:
> The first taxable year you, as applicable, made a contribution to a Roth IRA or a designated Roth contribution to any designated Roth account established for you under the same applicable retirement plan as defined in Tax Code Section 402A; or
> If a rollover contribution was made from a designated Roth account previously established for you under another applicable retirement plan, the first taxable year for which you made a designated Roth contribution to such previously established account; AND
· The distribution occurs after you attain age 59½, die with payment being made to your beneficiary or estate or become disabled as defined in the Tax Code.
A distribution from a Roth account that is not a qualified distribution is includible in gross income under the Tax Code in proportion to your investment in the contract (basis) and earnings on the contract.
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Distributions Eligibility
Distributions from qualified plans (as described in this prospectus) generally may occur only upon the occurrence of certain events. The terms of your plan will govern when you are eligible to take a distribution from the plan. The following describes circumstance when you may be able to take a distribution from certain more common types of plans.
Lifetime Required Minimum Distributions (IRAs)
To avoid certain tax penalties, you and any designated beneficiary must also satisfy the required minimum distribution rules set forth in the Tax Code. These rules may dictate the following:
· The start date for distributions;
· The time period in which all amounts in your contract(s) must be distributed; and
· Distribution amounts.
Start Date. Generally, you must begin receiving distributions by April 1 of the calendar year following the calendar year in which you attain age 72 (age 70½ if born before July 1, 1949) or in the case of an employer-sponsored plan, April 1 of the calendar year following the calendar year in which you retire, whichever occurs later.
Time Period. You must receive distributions from the contract over a period not extending beyond one of the following time periods:
· Over your life or the joint lives of you and your designated beneficiary; or
· Over a period not greater than your life expectancy or the joint life expectancies of you and your designated beneficiary.
Distribution Amounts. The amount of each required distribution must be calculated in accordance with Tax Code Section 401(a)(9). Before annuity payments begin, the required minimum distribution amount is generally determined by dividing the entire interest in the account as of December 31 of the preceding year by the applicable distribution period. The entire interest in the account includes the amount of any outstanding rollover, transfer and recharacterization, if applicable, and the actuarial present value of any other benefits provided under the account, such as guaranteed death benefits. If annuity payments have begun under an annuity option that satisfies the Tax Code Section 401(a)(9) regulations, such payments will generally be viewed as satisfying your required minimum distribution.
50% Excise Tax. If you fail to receive the minimum required distribution for any tax year, a 50% excise tax is imposed on the required amount that was not distributed. In certain circumstances this excise tax may be waived by the IRS.
Roth IRAs. Required minimum distributions are not applicable to Roth IRAs. Further information regarding required minimum distributions may be found in your contract.
Required Distributions upon Death (IRAs and Roth IRAs)
Upon your death, any remaining interest in an IRA or qualified retirement plan must be distributed in accordance with federal income tax requirements under Section 401(a)(9) of the Tax Code. The death benefit provisions of your contract will be interpreted to comply with those requirements. The SECURE Act amended the post-death distribution requirements that are generally applicable with respect to deaths occurring after 2019. The post-death distribution requirements under prior law continue to apply in certain circumstances.
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Prior Law. Under prior law, if you die prior to the required beginning date, the remaining interest must be distributed (1) within five years after the death (the “5-year rule”); or (2) over the life of the designated beneficiary, or over a period not extending beyond the life expectancy of the designated beneficiary, provided that such distributions commence within one year after death (the “lifetime payout rule”). If you die on or after the required beginning date (including after the date distributions have commenced in the form of an annuity), the remaining interest must be distributed at least as rapidly as under the method of distribution being used as of the date of death (the “at-least-as-rapidly rule”).
The New Law. Under the new law, if you die after 2019, and you have a designated beneficiary, any remaining interest must be distributed within ten years after your death, unless the designated beneficiary is an eligible designated beneficiary (“EDB”) or some other exception applies. A designated beneficiary is any individual designated as a beneficiary by you, the IRA owner or employee. An EDB is any designated beneficiary who is (1) your surviving spouse; (2) your minor child; (3) disabled; (4) chronically ill; or (5) an individual not more than ten years younger than you. An individual’s status as an EDB is determined on the date of your death.
This ten-year post-death distribution period applies regardless of whether you die before your required beginning date or you die on or after that date (including after distributions have commenced in the form of an annuity). However, if the beneficiary is an EDB and the EDB dies before the entire interest is distributed under this ten-year rule, the remaining interest must be distributed within ten years after the EDB’s death (i.e., a new ten-year distribution period begins).
Instead of taking distributions under the new ten-year rule, an EDB can stretch distributions over life, or over a period not extending beyond life expectancy, provided that such distributions commence within one year of your death, subject to certain special rules. In particular, if the EDB dies before the remaining interest is distributed under this stretch rule, the remaining interest must be distributed within ten years after the EDB’s death (regardless of whether the remaining distribution period under the stretch rule was more or less than ten years). In addition, if your minor child is an EDB, the child will cease to be an EDB on the date the child reaches the age of majority, and any remaining interest must be distributed within ten years after that date (regardless of whether the remaining distribution period under the stretch rule was more or less than ten years).
If your beneficiary is not an individual, such as a charity, your estate, or in some cases a trust, any remaining interest after your death generally must be distributed under prior law in accordance with the 5-year rule or the at-least-as-rapidly rule, as applicable (but not the lifetime payout rule). However, if your beneficiary is a trust and all the beneficiaries of the trust are individuals, the new law may apply pursuant to special rules that treat the beneficiaries of the trust as designated beneficiaries, including special rules allowing a beneficiary of a trust who is disabled or chronically ill to stretch the distribution of their interest over their life or life expectancy in some cases. You should consult a professional tax adviser about the federal income tax consequences of your beneficiary designations, particularly if a trust is involved.
More generally, the new law applies if you die after 2019, subject to several exceptions. In particular, if your plan is maintained pursuant to one or more collective bargaining agreements, the new law applies to your interest in that plan if you die after 2021 (unless the collective bargaining agreements terminate earlier).
In addition, the new post-death distribution requirements generally do not apply if the IRA owner or employee died prior to January 1, 2020. However, if the designated beneficiary of the deceased IRA owner or employee dies after January 1, 2020, any remaining interest must be distributed within ten years of the designated beneficiary’s death. Hence, this ten-year rule generally will apply to a contract issued prior to 2020 which continues to be held by a designated beneficiary of an IRA or employee who died prior to 2020.
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It is important to note that under prior law, annuity payments that commenced under a method that satisfied the distribution requirements while the IRA owner or employee was alive could continue to be made under that method after the death of the IRA owner or employee. Under the new law, however, if you commence taking distributions in the form of an annuity that can continue after your death, such as in the form of a joint and survivor annuity or an annuity with a guaranteed period of more than ten years, any distributions after your death that are scheduled to be made beyond the applicable distribution period imposed under the new law might need to be accelerated at the end of that period (or otherwise modified after your death if permitted under federal tax law and by us) in order to comply with the new post-death distribution requirements.
Certain transition rules may apply. Please consult your tax adviser.
Start Dates for Spousal Beneficiaries. Under the new law, as under prior law, if your beneficiary is your spouse, your surviving spouse can delay the application of the post-death distribution requirements until after your surviving spouse’s death by transferring the remaining interest tax-free to your surviving spouse’s own IRA, or by treating your IRA as your surviving spouse’s own IRA.
The post-death distribution requirements are complex and unclear in numerous respects. The Internal Revenue Service and U.S. Department of the Treasury have issued very little guidance on the new law. In addition, the manner in which these requirements will apply will depend on your particular facts and circumstances. You should consult a professional tax adviser for tax advice as to your particular situation.
Withholding
Taxable distributions under the contract are generally subject to withholding. Federal income tax withholding rates vary according to the type of distribution and the recipient’s tax status.
IRAs and Roth IRAs. Generally, you or, if applicable, a designated beneficiary may elect not to have tax withheld from distributions. Withholding is mandatory, however, if the distributee fails to provide a valid taxpayer identification number, if we are notified by the IRS that the taxpayer identification number we have on file is incorrect, or if the payment is made outside of the U.S. Regardless of whether you elect to have federal income tax withheld, you are still liable for payment of federal income tax on the taxable portion of the payment.
Non-Resident Aliens. If you or your designated beneficiary is a non-resident alien, withholding will generally be 30% based on the individual’s citizenship, the country of domicile and tax treaty status.
Assignment and Other Transfers
IRAs and Roth IRAs. The Tax Code does not allow a transfer or assignment of your rights under the contracts except in limited circumstances. Adverse tax consequences may result if you assign or transfer your interest in the contract to persons other than your spouse incident to a divorce. Anyone contemplating such an assignment or transfer should contact a tax and/or legal adviser regarding the potential tax effects of such a transaction.
Same-Sex Marriages
The contract provides that upon your death a surviving spouse may have certain continuation rights that he or she may elect to exercise for the contract’s death benefit and any joint-life coverage under a living benefit. All contract provisions relating to spousal continuation are available only to a person who meets the definition of “spouse” under federal law. U.S. Treasury Department regulations provide that for federal tax purposes, the term “spouse” does not include individuals (whether of the opposite sex or the same sex) who have entered into a registered domestic partnership, civil union, or other similar formal relationship that is not denominated as a marriage under the laws of the state where the relationship was entered into, regardless of domicile. As a result, if a beneficiary of a deceased owner and the owner were parties to such a relationship, the beneficiary will be required by federal tax law to take distributions from the contract in the manner applicable to non-spouse beneficiaries and will not be able to continue the contract. Please consult your tax and/or legal adviser for further information about this subject.
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Possible Changes in Taxation
Although the likelihood of legislative change and tax reform is uncertain, there is always the possibility that the tax treatment of the contracts could change by legislation or other means. It is also possible that any change could be retroactive (that is, effective before the date of the change). You should consult a tax and/or legal adviser with respect to legislative developments and their effect on the contract.
Taxation of the Company
We are taxed as a life insurance company under the Tax Code. The Company owns all assets supporting the contract obligations. Any income earned on such assets is considered income to the Company. We do not intend to make any provision or impose a charge under the contracts with respect to any tax liability of the Company.
Anti-Money Laundering
In order to protect against the possible misuse of our products in money laundering or terrorist financing, we have adopted an anti-money laundering program satisfying the requirements of the USA PATRIOT Act and other current anti-money laundering laws. Among other things, this program requires us, our agents and customers to comply with certain procedures and standards that will allow us to verify the identity of the sponsoring organization and that contributions and loan repayments are not derived from improper sources.
Under our anti-money laundering program, we may require customers, and/or beneficiaries to provide sufficient evidence of identification, and we reserve the right to verify any information provided to us by accessing information databases maintained internally or by outside firms.
We may also refuse to accept certain forms of payments or loan repayments (traveler’s cheques, for example) or restrict the amount of certain forms of payments or loan repayments. In addition, we may require information as to why a particular form of payment was used (third party checks, for example) and the source of the funds of such payment in order to determine whether or not we will accept it. Use of an unacceptable form of payment may result in us returning the payment to you and not issuing the Contract.
Applicable laws designed to prevent terrorist financing and money laundering might, in certain circumstances, require us to block certain transactions until authorization is received from the appropriate regulator. We may also be required to provide additional information about you and your contract to government regulators.
Our anti-money laundering program is subject to change without notice to take account of changes in applicable laws or regulations and our ongoing assessment of our exposure to illegal activity.
Unclaimed Property
Every state has some form of unclaimed property laws that impose varying legal and practical obligations on insurers and, indirectly, on contract owners, insureds, beneficiaries and other payees of proceeds. Unclaimed property laws generally provide for escheatment to the state of unclaimed proceeds under various circumstances.
Contract owners are urged to keep their own, as well as their beneficiaries’ and other payees’, information up to date, including full names, postal and electronic media addresses, telephone numbers, dates of birth, and Social Security numbers. Such updates should be communicated to Customer Service.
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Cyber Security
Like others in our industry, we are subject to operational and information security risks resulting from "cyber-attacks", "hacking" or similar illegal or unauthorized intrusions into computer systems and networks. These risks include, among other things, the theft, misuse, corruption and destruction of data maintained online or digitally, denial of service attacks on websites and other operational disruption and unauthorized release of confidential customer information. Although we seek to limit our vulnerability to such risks through technological and other means and we rely on industry standard commercial technologies to maintain the security of our information systems, it is not possible to anticipate or prevent all potential forms of cyber-attack or to guarantee our ability to fully defend against all such attacks. In addition, due to the sensitive nature of much of the financial and similar personal information we maintain, we may be at particular risk for targeting.
Cyber-attacks affecting us, any third party administrator, intermediaries and other affiliated or third-party service providers may adversely affect us and your account value. For instance, cyber-attacks may interfere with our processing of contract transactions, including the processing of orders from our website impact our ability to calculate accumulation unit values, cause the release and possible destruction of confidential customer or business information, impede order processing, subject us and/or our service providers and intermediaries to regulatory fines and financial losses and/or cause reputational damage. There can be no assurance that we or our service providers will avoid losses affecting your contract that result from cyber-attacks or information security breaches in the future.
The Company
Voya Retirement Insurance and Annuity Company (the “Company,” “we,” “us,” or “our”) issues the contracts described in this prospectus and is responsible for providing each contract’s insurance and annuity benefits. All guarantees and benefits provided under the contracts that are not related to the separate account are subject to the claims paying ability of the Company and our general account. We are a stock life insurance company organized under the insurance laws of the State of Connecticut in 1976. Prior to January 1, 2002, the Company was known as Aetna Life Insurance and Annuity Company. From January 1, 2002, until August 31, 2014, the Company was known as ING Life Insurance and Annuity Company.
We are an indirect, wholly owned subsidiary of Voya Financial, Inc. (“Voya”), which until April 7, 2014, was known as ING U.S., Inc. In May, 2013 the common stock of Voya began trading on the New York Stock Exchange under the symbol “VOYA.”
We are engaged in the business of selling life insurance and annuities and providing financial services in the United States. We are authorized to conduct business in all states, the District of Columbia, Guam, Puerto Rico and the Virgin Islands. Our principal executive offices are located at:
One Orange Way
Windsor, CT 06095-4774
Product Regulation. Our annuity, retirement and investment products are subject to a complex and extensive array of state and federal tax, securities, insurance and employee benefit plan laws and regulations, which are administered and enforced by a number of different governmental and self-regulatory authorities, including state insurance regulators, state securities administrators, state banking authorities, the SEC, the Financial Industry Regulatory Authority (“FINRA”), the Department of Labor (“DOL”), the IRS and the Office of the Comptroller of the Currency (“OCC”). For example, U.S. federal income tax law imposes requirements relating to insurance and annuity product design, administration and investments that are conditions for beneficial tax treatment of such products under the Tax Code. See “FEDERAL TAX CONSIDERATIONS” for further discussion of some of these requirements. Additionally, state and federal securities and insurance laws impose requirements relating to insurance and annuity product design, offering and distribution and administration. Failure to administer product features in accordance with contract provisions or applicable law, or to meet any of these complex tax, securities, or insurance requirements could subject us to administrative penalties imposed by a particular governmental or self-regulatory authority, unanticipated costs associated with remedying such failure or other claims, harm to our reputation, interruption of our operations or adversely impact profitability.
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Contract Distribution
The Company’s subsidiary, Voya Financial Partners, LLC, serves as the principal underwriter for the contracts. Voya Financial Partners, LLC, a Delaware limited liability company, is registered as a broker-dealer with the SEC. Voya Financial Partners, LLC is also a member of FINRA and the Securities Investor Protection Corporation (“SIPC”). Voya Financial Partners, LLC’s principal office is located at One Orange Way, Windsor, CT 06095-4774.
The contracts are offered to the public by individuals who are registered representatives of Voya Financial Partners, LLC or other broker-dealers which have entered into a selling arrangement with Voya Financial Partners, LLC. We refer to Voya Financial Partners, LLC and the other broker-dealers selling the contracts as “distributors.”
All registered representatives selling the contracts must also be licensed as insurance agents for the Company.
Registered representatives of distributors who solicit sales of the contracts typically receive a portion of the compensation paid to the distributor in the form of commissions or other compensation, depending upon the agreement between the distributor and the registered representative. This compensation, as well as other incentives or payments, is not paid directly by contract owners or the Separate Account. We intend to recoup this compensation and other sales expenses paid to distributors through fees and charges imposed under the contracts.
Compensation Arrangements. Registered Representatives who offer and sell the contracts may be paid a commission. The maximum percentage amount that may be paid with respect to a given purchase payment is the first-year percentage which ranges from 0% to a maximum of 6% of the first year of payments to an account. Renewal commissions paid on payments made after the first year and asset-based service fees may also be paid.
Individual registered representatives may receive all or a portion of compensation paid to their distributor, depending upon the firm’s practices. Commissions and any annual payments, when combined, could exceed 6.0% of total purchase payments. To the extent permitted by SEC and FINRA rules and other applicable laws and regulations, we may also pay or allow other promotional incentives or payments in the form of cash payments or other compensation to distributors, which may require the registered representative to attain a certain threshold of sales of Company products.
We may also enter into special compensation arrangements with certain distributors based on those firms’ aggregate or anticipated sales of the contracts or other criteria. These arrangements may include commission specials, in which additional commissions may be paid in connection with purchase payments received for a limited time period, within the maximum commission rates noted above. These special compensation arrangements will not be offered to all distributors, and the terms of such arrangements may differ among distributors based on various factors. These special compensation arrangements may also be limited only to Voya Financial Advisors, Inc. and other distributors affiliated with the Company. Any such compensation payable to a distributor will not result in any additional direct charge to you by us.
Some personnel may receive various types of non-cash compensation as special sales incentives, including trips, and we may also pay for some personnel to attend educational and/or business seminars. Any such compensation will be paid in accordance with SEC and FINRA rules. Employees of the Company or its affiliates (including wholesaling employees) may receive more compensation when funds advised by the Company or its affiliates (“affiliated funds”) are selected by a contract holder than when unaffiliated funds are selected. Additionally, management personnel of the Company, and of its affiliated broker-dealers, may receive additional compensation if the overall amount of investments in funds advised by the Company or its affiliates meets certain target levels or increases over time. Compensation for certain management personnel, including sales management personnel, may be enhanced if management personnel meet or exceed goals for sales of the contracts, or if the overall amount of investments in the contracts and other products issued or advised by the Company or its affiliates increases over time. Certain sales management personnel may also receive compensation that is a specific percentage of the commissions paid to distributors or of purchase payments received under the contracts, or which may be a flat dollar amount that varies based upon other factors, including management’s ability to meet or exceed service requirements, sell new contracts or retain existing contracts, or sell additional service features such as a common remitting program.
VRIAC MRA 32
In addition to direct cash compensation for sales of contracts described above, through Voya Financial Partners, LLC, we may also pay distributors additional compensation or reimbursement of expenses for their efforts in selling the contracts to you and other customers. These amounts may include:
· Marketing/distribution allowances which may be based on the percentages of purchase payments received, the aggregate commissions paid and/or the aggregate assets held in relation to certain types of designated insurance products issued by the Company and/or its affiliates during the year;
· Loans or advances of commissions in anticipation of future receipt of purchase payments (a form of lending to registered representatives). These loans may have advantageous terms, such as reduction or elimination of the interest charged on the loan and/or forgiveness of the principal amount of the loan, which may be conditioned on sales;
· Education and training allowances to facilitate our attendance at certain educational and training meetings to provide information and training about our products. We also hold training programs from time to time at our expense;
· Sponsorship payments or reimbursements for distributors to use in sales contests and/or meetings for their registered representatives who sell our products. We do not hold contests based solely on sales of this product;
· Certain overrides and other benefits that may include cash compensation based on the amount of earned commissions, representative recruiting or other activities that promote the sale of policies; and
· Additional cash or noncash compensation and reimbursements permissible under existing law. This may include, but is not limited to, cash incentives, merchandise, trips, occasional entertainment, meals and tickets to sporting events, client appreciation events, business and educational enhancement items, payment for travel expenses (including meals and lodging) to pre-approved training and education seminars, and payment for advertising and sales campaigns.
We may pay commissions, dealer concessions, wholesaling fees, overrides, bonuses, other allowances and benefits and the costs of all other incentives or training programs from our resources, which include the fees and charges imposed under the contracts.
The following is a list of the top 25 distributors that, during 2020, received the most compensation, in the aggregate, from us in connection with the sale of registered variable annuity contracts issued by the Company, ranked by total dollars received:
|
· Lincoln Investment Planning, Inc.; · Regulus Advisors, LLC; · LPL Financial LLC; · Morgan Stanley Smith Barney LLC; · Voya Financial Advisors, Inc.; · Kestra Investment Services, LLC; · Royal Alliance Associates, Inc.; · Pensionmark Securities, LLC; · American Portfolios Financial Services, Inc.; · Securities America, Inc.; · Northwestern Mutual Investment Services, Inc.; · Lincoln Financial Advisors Corporation; · Cetera Advisors LLC; |
· Ameriprise Financial Services, Inc.; · Woodbury Financial Services, Inc.; · Cetera Advisor Networks LLC; · MMA Securities LLC; · PlanMember Securities Corporation; · Cadaret, Grant & Co., Inc.; · IMA Wealth, Inc.; · First Allied Securities, Inc.; · NYLIFE Securities LLC; · SagePoint Financial, Inc.; · Hornor, Townsend & Kent, LLC; and · Lockton Investment Securities, LLC. |
This is a general discussion of the types and levels of compensation paid by us for the sale of our variable annuity contracts. It is important for you to know that the payment of volume or sales-based compensation to a distributor or registered representative may provide that registered representative a financial incentive to promote our contracts over those of another Company, and may also provide a financial incentive to promote one of our contracts and/or services over another.
VRIAC MRA 33
Contract Modification
Only an authorized officer of the Company may change the terms of the contract. We may change the contract as required by federal or state law. In addition, we may, upon 30 days’ written notice to the contract holder, make other changes to group contracts that would apply only to individuals who become participants under that contract after the effective date of such changes. If the group contract holder does not agree to a change, we reserve the right to refuse to establish new accounts under the contract. Certain changes will require the approval of appropriate state or federal regulatory authorities.
Certain changes will require the approval of appropriate state or federal regulatory authorities.
Transfer of Ownership; Assignment
Your rights under a nonqualified contract may be assigned or transferred. An assignment of a contract will only be binding on us if it is made in writing and sent to and accepted by us at Customer Service. We will use reasonable procedures to confirm the assignment is authentic, including verification of signature. If we fail to follow our own procedures, we will be liable for any losses to you directly resulting from the failure. Otherwise, we are not responsible for the validity of any assignment. The rights of the contract holder and the interest of the annuitant and any designated beneficiary will be subject to the rights of any assignee we have on our records. We reserve the right not to accept any assignment or transfer to a non-natural person. In some cases, an assignment may have adverse tax consequences. You should consult a tax and/or legal adviser.
Involuntary Terminations
We reserve the right to terminate any account with a value of $2,500 or less immediately following a partial withdrawal. However, an IRA may only be closed out when payments to the contract have not been received for a 24-month period and the paid-up annuity benefit at maturity would be less than $20 per month. If such right is exercised, you will be given 90 days’ advance written notice. No early withdrawal charge will be deducted for involuntary terminations. We do not intend to exercise this right in cases where the account value is reduced to $2,500 or less solely due to investment performance.
Experts
The consolidated financial statements of the Company appearing in the Company’s Annual Report (Form 10-K) for the year ended December 31, 2020 (including schedules appearing therein), have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
The primary business address of Ernst & Young LLP is The Frost Tower, Suite 1901, 111 West Houston Street, San Antonio, TX 78205.
Legal Proceedings
We are not aware of any pending legal proceedings that are likely to have a material adverse effect upon the Company’s ability to meet its obligations under the contract, Voya Financial Partners, LLC’s ability to distribute the contract or upon the separate account.
VRIAC MRA 34
· Litigation. Notwithstanding the foregoing, the Company and/or Voya Financial Partners, LLC, is a defendant in a number of litigation matters arising from the conduct of its business, both in the ordinary course and otherwise. In some of these matters, claimants seek to recover very large or indeterminate amounts, including compensatory, punitive, treble and exemplary damages. Modern pleading practice in the U.S. permits considerable variation in the assertion of monetary damages and other relief. The variability in pleading requirements and past experience demonstrates that the monetary and other relief that may be requested in a lawsuit or claim oftentimes bears little relevance to the merits or potential value of a claim.
· Regulatory Matters. As with other financial services companies, the Company and its affiliates, including Voya Financial Partners, LLC, periodically receive informal and formal requests for information from various state and federal governmental agencies and self-regulatory organizations in connection with inquiries and investigations of the products and practices of the Company or the financial services industry. It is the practice of the Company to cooperate fully in these matters.
The outcome of a litigation or regulatory matter and the amount or range of potential loss is difficult to forecast and estimating potential losses requires significant management judgment. It is not possible to predict the ultimate outcome for all pending litigation and regulatory matters and given the large and indeterminate amounts sought and the inherent unpredictability of such matters, it is possible that an adverse outcome in certain litigation or regulatory matters could, from time to time, have a material adverse effect upon the Company’s results of operations or cash flows in a particular quarterly or annual period.
Suspension of Payments
We reserve the right to suspend or postpone the date of any payment of benefits or determination of any value (including the Accumulation Value) under the Contract, beyond the seven permitted days, under any of the following circumstances:
· On any Business Day when the NYSE is closed (except customary weekend and holiday closings) or when trading on the NYSE is restricted;
· When an emergency exists as determined by the SEC; or
· During any other periods the SEC may, by order, permit for the protection of investors.
The conditions under which restricted trading or an emergency exists shall be determined by the rules and regulations of the SEC.
We have the right to delay payment for up to six months, contingent upon written approval by the insurance supervisory official in the jurisdiction in which this Contract is issued. For Contracts issued in Idaho, any payment deferred 30 days or more will include interest as required by applicable state law. Payment of benefits or values may also be delayed or suspended as required by court order or any regulatory action.
Further Information
This prospectus does not contain all of the information contained in the registration statement of which this prospectus is a part. Portions of the registration statement have been omitted from this prospectus as allowed by the SEC. You may obtain the omitted information from the offices of the SEC, as described below. We are required by the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, to file periodic reports and other information with the SEC. You may inspect or copy information concerning the Company at the Public Reference Branch of the SEC at:
Securities and Exchange Commission
Public Reference Branch
100 F Street, N.E., Room 1580
Washington, DC 20549
VRIAC MRA 35
You may also obtain copies of these materials at prescribed rates from the Public Reference Branch of the above office. More information on the operation of the Public Reference Branch is available by calling the SEC at either 1-800-SEC-0330 or 1-202-551-8090 or by e-mailing publicinfo@sec.gov. You may also find more information about the Company by visiting the Company’s homepage on the internet at www.voya.com.
Our filings are available to the public on the SEC’s website at www.sec.gov. (This uniform resource locator (URL) is an inactive textual reference only and is not intended to incorporate the SEC website into this prospectus.) When looking for more information about the Contract, you may find it useful to use the number assigned to the registration statement under the Securities Act of 1933. This number is 333-________.
Incorporation of Certain Documents by Reference
The SEC allows us to “incorporate by reference” information that we file with the SEC into this prospectus, which means that the incorporated document is considered part of this prospectus. We can disclose important information to you by referring you to this document. This prospectus incorporates by reference the Annual Report on Form 10-K for the year ended December 31, 2020. Form 10-K contains additional information about the Company and includes certified financial statements as of December 31, 2020 and 2019, and for each of the three years in the period ended December 31, 2020. We were not required to file any other reports pursuant to Sections 13(a) or 15(d) of the Exchange Act since December 31, 2020. All documents subsequently filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering shall be deemed to be incorporated by reference into the prospectus. The registration statement, of which this prospectus is a part, and our Exchange Act filings are available to the public on the SEC’s website at www.sec.gov, and we file these documents electronically according to EDGAR under CIK No. 0000837010.
You may request a free copy of any documents incorporated by reference in this prospectus (including any exhibits that are specifically incorporated by reference in them). Please direct your request to:
Voya Retirement Insurance and Annuity Company
Customer Service
P.O. Box 9271
Des Moines, IA 50306-9271
1-800-531-4547
Inquiries
You may contact us directly by writing or calling us at the address or phone number shown above.
VRIAC MRA 36
Calculating a Market Value Adjustment
Market Value Adjustment Formula
The mathematical formula used to determine the MVA is:
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{ |
(1+i) |
} |
x |
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|
365 |
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|||
|
(1+j) |
|
|||
Where:
i is the deposit period yield;
j is the current yield; and
x is the number of days remaining (computed from Wednesday of the week of withdrawal) in the guaranteed term.
We make an adjustment in the formula of the MVA to reflect the period of time remaining in the guaranteed term from the Wednesday of the week of a withdrawal.
Explanation of the Market Value Adjustment Formula
The MVA essentially involves a comparison of two yields: the yield available at the start of the current guaranteed term of the contract (the deposit period yield) and the yield currently available (the current yield).
The MVA depends on the relationship between the following:
· The deposit period yield of U.S. Treasury Notes that mature in the last quarter of the guaranteed term; and
· The current yield of these U.S. Treasury Notes at the time of withdrawal.
If the current yield is the lesser of the two, the MVA will decrease the amount withdrawn from the contract to satisfy the withdrawal request (the MVA will be positive). If the current yield is the higher of the two, the MVA will increase the amount withdrawn from the contract to satisfy the withdrawal request (the MVA will be negative, or detrimental to the investor). As a result of the MVA imposed, the amount withdrawn from the contract prior to the maturity date may be less than the amount paid into the contract.
To determine the deposit period yield and the current yield, certain information must be obtained about the prices of outstanding U.S. Treasury Notes. This information may be found each business day in publications such as the Wall Street Journal, which publishes the yield-to-maturity percentages for all Treasury Notes as of the preceding business day. These percentages are used in determining the deposit period yield and the current yield for the MVA calculation.
Deposit Period Yield
Determining the deposit period yield in the MVA calculation involves consideration of interest rates prevailing at the start of the guaranteed term from which the withdrawal will be made, as follows:
· We identify the Treasury Notes that mature in the last three months of the guaranteed term; and
· We determine the yield-to-maturity percentages of these Treasury Notes for the last business day of each week in the deposit period.
VRIAC MRA I-1
The resulting percentages are then averaged to determine the deposit period yield. The deposit period is the period of time during which the purchase payment or any reinvestment may be made to available guaranteed terms. A deposit period may be a month, a calendar quarter, or any other period of time we specify.
Current Yield
To determine the current yield, we use the same Treasury Notes identified for the deposit period yield ‒ Treasury Notes that mature in the last three months of the guaranteed term. However, the yield-to-maturity percentages used are those for the last business day of the week preceding the withdrawal. We average these percentages to determine the current yield.
Examples of MVA Calculations
The following are examples of MVA calculations using several hypothetical deposit period yields and current yields. These examples do not include the effect of any early withdrawal charge that may be assessed under the contract upon withdrawal.
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EXAMPLE I |
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|
Assumptions:
i, the deposit period yield, is 4%
j, the current yield, is 6%
x, the number of days remaining (computed from Wednesday of the week of withdrawal) in the guaranteed term, is 927. |
Assumptions:
i, the deposit period yield, is 5%
j, the current yield, is 6%
x, the number of days remaining (computed from Wednesday of the week of withdrawal) in the guaranteed term, is 927. |
|
MVA = { |
(1 + i) |
} |
x 365 |
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MVA = { |
(1 + i) |
} |
x 365 |
|
|
(1 + j) |
|
|
(1 + j) |
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|
|
MVA = { |
(1.04) |
} |
927 365 |
|
MVA = { |
(1.05) |
} |
927 365 |
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|
|
(1.06) |
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|
(1.06) |
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|
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||||
|
|
= .9528 |
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= .9762 |
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||||||
|
In this example, the deposit period yield of 4% is less than the current yield of 6%; therefore, the MVA is less than one. The amount withdrawn from the guaranteed term is multiplied by this MVA.
If a withdrawal or transfer of a specific dollar amount is requested, the amount withdrawn from a guaranteed term will be increased to compensate for the negative MVA amount. For example, a withdrawal request to receive a check for $2,000.00 would result in a $2,099.08 withdrawal from the guaranteed term. |
In this example, the deposit period yield of 5% is less than the current yield of 6%; therefore, the MVA is less than one. The amount withdrawn from the guaranteed term is multiplied by this MVA.
If a withdrawal or transfer of a specific dollar amount is requested, the amount withdrawn from a guaranteed term will be increased to compensate for the negative MVA amount. For example, a withdrawal request to receive a check for $2,000.00 would result in a $2,048.76 withdrawal from the guaranteed term. |
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VRIAC MRA I-2
|
EXAMPLE II |
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|
Assumptions:
i, the deposit period yield, is 6%
j, the current yield, is 4%
x, the number of days remaining (computed from Wednesday of the week of withdrawal) in the guaranteed term, is 927. |
Assumptions:
i, the deposit period yield, is 5%
j, the current yield, is 4%
x, the number of days remaining (computed from Wednesday of the week of withdrawal) in the guaranteed term, is 927. |
|
MVA = { |
(1 + i) |
} |
x 365 |
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MVA = { |
(1 + i) |
} |
x 365 |
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|
(1 + j) |
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|
(1 + j) |
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|
MVA = { |
(1.06) |
} |
927 365 |
|
MVA = { |
(1.05) |
} |
927 365 |
|
|
|
(1.04) |
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|
(1.04) |
|
|
|
||||
|
|
= 1.0496 |
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= 1.0246 |
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||||||
|
In this example, the deposit period yield of 6% is greater than the current yield of 4%; therefore, the MVA is greater than one. The amount withdrawn from the guaranteed term is multiplied by this MVA.
If a withdrawal or transfer of a specific dollar amount is requested, the amount withdrawn from a guaranteed term will be decreased to compensate for the positive MVA amount. For example, a withdrawal request to receive a check for $2,000.00 would result in a $1,905.49 withdrawal from the guaranteed term. |
In this example, the deposit period yield of 5% is greater than the current yield of 4%; therefore, the MVA is greater than one. The amount withdrawn from the guaranteed term is multiplied by this MVA.
If a withdrawal or transfer of a specific dollar amount is requested, the amount withdrawn from a guaranteed term will be decreased to compensate for the positive MVA amount. For example, a withdrawal request to receive a check for $2,000.00 would result in a $1,951.98 withdrawal from the guaranteed term. |
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VRIAC MRA I-3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses in connection with issuance and distribution of the securities to be registered, other than underwriting discounts and commissions, are as follows Except for the Securities and Exchange Commission Filing Fee, all amounts shown are estimates):
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Securities and Exchange Commission Registration Fees |
$109.10 |
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Federal Taxes |
$0 |
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State Taxes and Fees |
$0 |
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Trustees’ and Transfer Agents’ Fees |
$0 |
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Printing and Engraving |
$0 |
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Accounting Fees and Expenses |
$5,000.00 |
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Legal Fees and Expenses |
$0 |
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Engineering Fees |
$0 |
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Total Expenses |
$5,109.10 |
Item 15. Indemnification of Directors and Officers
Section 33-779 of the Connecticut General Statutes (“CGS”) provides that a corporation may provide indemnification of or advance expenses to a director, officer, employee or agent only as permitted by Sections 33-770 to 33-778, inclusive, of the CGS. Reference is hereby made to Section 33-771(e) of the CGS regarding indemnification of directors and Section 33-776(d) of CGS regarding indemnification of officers, employees and agents of Connecticut corporations.
These statutes provide in general that Connecticut corporations incorporated prior to January 1, 1997 shall, except to the extent that their certificate of incorporation expressly provides otherwise, indemnify their directors, officers, employees and agents against “liability” (defined as the obligation to pay a judgment, settlement, penalty, fine, including an excise tax assessed with respect to an employee benefit plan, or reasonable expenses incurred with respect to a proceeding) when (1) a determination is made pursuant to Section 33-775 that the party seeking indemnification has met the standard of conduct set forth in Section 33-771 or (2) a court has determined that indemnification is appropriate pursuant to Section 33-774. Under Section 33-775, the determination of and the authorization for indemnification are made (a) by two or more disinterested directors, as defined in Section 33-770(2); (b) by special legal counsel; (c) by the shareholders; or (d) in the case of indemnification of an officer, agent or employee of the corporation, by the general counsel of the corporation or such other officer(s) as the board of directors may specify. Also, Section 33-772 with Section 33-776 provide that a corporation shall indemnify an individual who was wholly successful on the merits or otherwise against reasonable expenses incurred by him in connection with a proceeding to which he was a party because he is or was a director, officer, employee, or agent of the corporation. Pursuant to Section 33-771(d), in the case of a proceeding by or in the right of the corporation or with respect to conduct for which the director, officer, agent or employee was adjudged liable on the basis that he received a financial benefit to which he was not entitled, indemnification is limited to reasonable expenses incurred in connection with the proceeding against the corporation to which the individual was named a party.
A corporation may procure indemnification insurance on behalf of an individual who is or was a director of the corporation. Consistent with the laws of the State of Connecticut, Voya Financial, Inc. maintains Professional Liability and Fidelity bond, Employment Practices liability and Network Security insurance policies. The policies cover Voya Financial, Inc. and any company in which Voya Financial, Inc. has a controlling financial interest of 50% or more. The policies cover the funds and assets of the principal underwriter/depositor under the care, custody and control of Voya Financial, Inc. and/or its subsidiaries. The policies provide for the following types of coverage: Errors and Omissions/Professional Liability, Employment Practices liability and Fidelity/Crime (a.k.a. “Financial Institutional Bond”) and Network Security (a.k.a. “Cyber/IT”).
Section 20 of the Voya Financial Partners, LLC Amended and Restated Limited Liability Company Agreement executed as of June 30, 2016 provides that Voya Financial Partners, LLC will indemnify certain persons against any loss, damage, claim or expenses (including legal fees) incurred by such person if he is made a party or is threatened to be made a party to a suit or proceeding because he was a member, officer, director, employee or agent of Voya Financial Partners, LLC, as long as he acted in good faith on behalf of Voya Financial Partners, LLC and in a manner reasonably believed to be within the scope of his authority. An additional condition requires that no person shall be entitled to indemnity if his loss, damage, claim or expense was incurred by reason of his gross negligence or willful misconduct. This indemnity provision is authorized by and is consistent with Title 8, Section 145 of the General Corporation Law of the State of Delaware.
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 of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Item 16. Exhibits
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(1) |
Exhibits |
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(a) |
Underwriting Agreement dated November 17, 2006, between ING Life Insurance and Annuity Company and ING Financial Advisers, LLC. |
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(3) |
(a) |
Restated Certificate of Incorporation (amended and restated as of October 1, 2007) of ING Life Insurance and Annuity Company. |
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(b) |
Amended and Restated By-Laws of ING Life Insurance and Annuity Company, effective October 1, 2007. |
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(4) |
(a) |
Group Annuity Contract (Form No. G2-MGA-95). |
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(b) |
Individual Annuity Contract (Form No. I2-MGA-95). |
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(c) |
Certificate (G2CC-MGA-95) to Group Annuity Contract Form No. G-MGA. |
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(d) |
Endorsement (E2-MGAIRA-95-2) to Group Annuity Contract Form No. G2-MGA-95 and Certificate No. G2CC-MGA-95. |
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(e) |
Endorsement (E2-MGAROTH-97) to Group Annuity Contract Form No. G2-MGA-95 and Certificate No. G2CC-MGA-95. |
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(f) |
Name Change Endorsement (ENMCHGI (05/02)). |
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(g) |
Name Change Endorsement (EVNMGHC (09/14)). |
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(h) |
SECURE Act Endorsement (E-DCSECURE-20) |
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(i) |
SECURE Act Endorsement (E-IRASECURE-20) |
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(5) |
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Opinion re: Legality |
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(23) |
(a) |
Consent of Independent Registered Public Accounting Firm. |
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(b) |
Consent of Legal Counsel (included in Exhibit (5) above). |
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(24) |
(a) |
Powers of Attorney, included on signature page of this Registration Statement. |
Exhibits other than those listed above are omitted because they are not required or are not applicable.
Item 17. Undertakings
The undersigned registrant hereby undertakes as follows, pursuant to Item 512 of Regulation S-K:
(a) Rule 415 offering
(1) Not Applicable
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) Not Applicable
(5)(i) Not Applicable
(5)(ii) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(6) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(b) Filings incorporating subsequent Exchange Act documents by reference:
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Not applicable
(d) Not applicable
(e) Not applicable
(f) Not applicable
(g) Not applicable
(h) Request for acceleration of effective date:
Insofar as indemnification for liabilities 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.
(i) Not applicable
(j) Not applicable
(k) Not applicable
(l) Not applicable
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SIGNATURES |
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Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Windsor, State of Connecticut, on this 2nd day of April, 2021. |
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By: |
VOYA RETIREMENT INSURANCE AND ANNUITY COMPANY |
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By: |
/s/ Charles P. Nelson |
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Charles P. Nelson President (principal executive officer) |
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As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the date indicated. Each person whose signature appears below hereby constitutes and appoints Peter M. Scavongelli, such person’s true and lawful attorney and agent with full power of substitution and re-substitution for him or her and in his or her name, place and stead, in any and all capacities, to sign for such person and in such person’s name and capacity indicated below, any and all amendments to this Registration Statement, hereby ratifying and confirming such person’s signature as it may be signed by said attorney to any and all amendments (pre-effective and post-effective amendments). |
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Signature |
Title |
Date |
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/s/ Charles P. Nelson |
Director and President |
February 18, 2021 |
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Charles P. Nelson |
(principal executive officer) |
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/s/ Robert L. Grubka |
Director |
Feb. 22, 2021 |
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Robert L. Grubka |
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/s/ Michael R. Katz |
Director and Chief Financial Officer |
Feb 19, 2021 |
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Michael R. Katz |
(principal financial officer) |
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/s/ Heather H. Lavallee |
Director |
2/25/21 |
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Heather H. Lavallee |
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/s/ Francis G. O’Neill |
Director |
2/21/2021 |
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Francis G. O’Neill |
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/s/ Rodney O. Martin, Jr. |
Director |
3/4/21 |
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Rodney O. Martin, Jr. |
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/s/ Michael S. Smith |
Director |
March 12, 2021 |
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Michael S. Smith |
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/s/ C. Landon Cobb, Jr. |
Chief Accounting Officer |
02/23/2021 |
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C. Landon Cobb, Jr. |
(principal accounting officer) |
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Notary
State of Washington
County of Skagit
I certify that I know or have satisfactory evidence that Charles P. Nelson is the person who appeared before me, and said person acknowledged that he signed this instrument and acknowledged it to be his free and voluntary act for the uses and purposes mentioned in the instrument.
Dated: February 18, 2021
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(Seal or stamp) |
Signature /s/ Susann Elizabeth Dillard |
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SUSANN ELIZABETH DILLARD |
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My appointment expires: July 9, 2023 |
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*****************************************************
STATE OF MINNESOTA
COUNTY OF Hennepin
The foregoing instrument was acknowledged before me this 22 day of Feb. 2021, by Robert L. Grubka.
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/s/ Melissa O’Donnell Notary Public |
MELISSA ODONNELL Notary Public, State of Minnesota Commission Expires 01/31/2025 |
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Witness & Notary
Attested and subscribed in the presence of the principal and subsequent to the principal subscribing same:
First Witness signs: /s/ Michele Eleveld Second Witness Signs: /s/ Kyle Puffer
Printed name of witness: Michele Eleveld Printed name of witness: Kyle Puffer
State of Connecticut)
County of Hartford ) ss: at Windsor on 2/25/21
Personally Appeared Heather H. Lavallee, Signer and Sealer of the foregoing instrument, and acknowledged the same to be his free act and deed, before me.
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/s/Christine Donohue Notary Public |
Christine Donohue Notary Public, State of Connecticut Commission Expires 12/31/22 |
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STATEMENT OF WITNESS
On the date written above, the principal (Francis G. O’Neill) declared to me in my presence that this instrument is his general durable power of attorney and that he had willingly signed or directed another to sign for him, and that he executed it as his free and voluntary act for the purposes therein expressed.
/s/ James C. Lehan Signature
of Witness #1
James C. Lehan Printed
or typed name of Witness #1
15 Fredrickson Rd Address
of Witness #1
Norfolk, MA 02056
/s/ Elizabeth S. Lehan Signature
of Witness #2
Elizabeth S. Lehan Printed
or typed name of Witness #2
15 Fredrickson Rd. Address
of Witness #2
Norfolk, MA 02056
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Notary
State of New York
County of New York
On the 4 day of March in the year 2021, before me, the undersigned, personally appeared Rodney O. Martin, Jr., personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.
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Notary Public |
/s/ Pier A. Moore Notary Public, NY County No. 01M06115336 Qualified in Kings County Certificate Filed in NY County Commission Expires 9/7/2024 |
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STATEMENT OF WITNESS
On the date written above, the principal (C. Landon Cobb, Jr.) declared to me in my presence that this instrument is his general durable power of attorney and that he had willingly signed or directed another to sign for him, and that he executed it as his free and voluntary act for the purposes therein expressed.
/s/ Tracy S. Cosby Signature
of Witness #1
Tracy S. Cosby Printed
or typed name of Witness #1
6267 Wager Ct. Address
of Witness #1
Powder Springs, GA 30127
/s/ Linda Bell Signature
of Witness #2
Linda Bell Printed
or typed name of Witness #2
2889 Torreya Way SE Address
of Witness #2
Marietta, GA 30067
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EXHIBIT INDEX |
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Exhibit No. |
Exhibit |
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16(1)(a) |
Underwriting Agreement dated November 17, 2006, between ING Life Insurance and Annuity Company and ING Financial Advisers, LLC. |
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16(3)(a) |
Restated Certificate of Incorporation (amended and restated as of October 1, 2007) of ING Life Insurance and Annuity Company |
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16(3)(b) |
Amended and Restated By-Laws of ING Life Insurance and Annuity Company, effective October 1, 2007 |
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16(4)(a) |
Group Annuity Contract (Form No. G2-MGA-95) |
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16(4)(b) |
Individual Annuity Contract (Form No. I2-MGA-95) |
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16(4)(c) |
Certificate (G2CC-MGA-95) to Group Annuity Contract Form No. G-MGA-95 |
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16(4)(d) |
Endorsement (E2-MGAIRA-95-2) to Group Annuity Contract Form No. G2-MGA-95 and Certificate No. G2CC-MGA-95 |
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16(4)(e) |
Endorsement (E2-MGAROTH-97) to Group Annuity Contract Form No. G2-MGA-95 and Certificate No. G2CC-MGA-95 |
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16(4)(f) |
Name Change Endorsement (ENMCHGI (05/02)) |
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16(4)(g) |
Name Change Endorsement (EVNMGHC (09/14)) |
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16(4)(h) |
SECURE Act Endorsement (E-DCSECURE-20) |
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16(4)(i) |
SECURE Act Endorsement (E-IRASECURE-20) |
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16(5) |
Opinion re: Legality |
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16(23)(a) |
Consent of Independent Registered Public Accounting Firm |
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16(23)(b) |
Consent of Legal Counsel (included in Exhibit (5) above) |
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16(24)(a) |
Powers of Attorney, included on signature page of this Registration Statement |
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Exhibit 16(1)(a): Underwriting Agreement dated November 17, 2006, between ING Life Insurance and Annuity Company and ING Financial Advisers, LLC
PRINCIPAL UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT (“Agreement”) is effective as of the 17th day of November, 2006, by and between ING Life Insurance and Annuity Company (“ILIAC”), on its own behalf and on behalf of its nonunitized separate accounts for modified guaranteed annuity contracts (“MGA Accounts”), and on behalf of Variable Annuity Accounts B, C, F, G and I, Separate Account D, and Variable Life Accounts B and C (separate accounts of ILIAC (Variable Annuity Accounts B, C, F, G and I, Separate Account D and Variable Life Accounts B and C hereinafter collectively referred to as the “Accounts”)), and ING Financial Advisers, LLC (the “Underwriter”).
WHEREAS, the Accounts were established under Connecticut law as separate accounts of ILIAC pursuant to authority granted by resolutions of ILIAC’s Board of Directors dated October 18, 1976, as amended June 17, 1992 and January 1, 1997 and as further amended on November 15, 1993 (as regards Variable Annuity Accounts B, C, G and Separate Account D), and June 18, 1986 (as regards Variable Life Account B), May 31, 1994 as regards the establishment of Variable Annuity Account I (formerly Variable Annuity Account I of ING Insurance Company of America), August 31, 1999 (as regards Variable Life Account C), and September 24, 2004 (as regards Separate Account D);
WHEREAS, the Accounts will maintain the net proceedsof and reserves for certain variable annuity contracts issued by ILIAC, and ILIAC’s MGA Accounts will receive the purchase payments under certain modified guaranteed annuity contracts issued by ILIAC (collectively the “Contracts);
WHEREAS, ILIAC has registered the Accounts as unit investment trusts under the Investment Company Act of 1940 and has registered or will register the Contracts for sale under the Securities Act of 1933 (where such registration is required by law); and
WHEREAS, ILIAC, the Accounts, and the MGA Accounts desire to have the Contracts sold through the Underwriter, and the Underwriter is willing to provide for the sale of the Contracts under the terms stated herein.
NOW THEREFORE, in consideration of their mutual promises the parties hereto agree as follows:
1. Principal Underwriter
ILIAC appoints the Underwriter as, and the Underwriter agrees to serve as, principal underwriter of the Contracts during the term of this Agreement. The Underwriter agrees to use its best efforts to provide for
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the solicitation of applications for the Contracts, and to undertake at its own expense to provide all sales services relative to the Contracts and to perform otherwise all duties and functions that are necessary and proper for the distribution of the Contracts.
2. Sales Agreements
The Underwriter is hereby authorized to enter into written sales agreements with other broker-dealers for the sale of the Contracts on terms and conditions not inconsistent with and subject to this Agreement.
3. Registration and Responsibility of Underwriter
The Underwriter represents that it is registered as a broker-dealer with the SEC under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. ("NASD") and shall be registered if necessary or otherwise appropriately qualified under the securities laws of any state or other jurisdiction. The Underwriter shall be responsible for carrying out its sales and underwriting obligations hereunder in compliance with the NASD Rules of Fair Practice and federal and state securities laws and regulations. In this connection, the Underwriter agrees that it shall be responsible for ensuring that any organization with which it enters into a sales agreement for the sale of the Contracts, and such organization's agents or representatives, are duly and appropriately licensed, registered, appointed and otherwise qualified to offer and sell the Contracts under the federal securities laws and any applicable securities and insurance laws of each state or other jurisdiction in which the Contracts may be lawfully sold and in which ILIAC is licensed to sell the Contracts.
4. Control and Responsibility
ILIAC shall have ultimate control and responsibility of the functions that it has delegated. ILIAC shall own and have custody of its general corporate accounts and records.
5. Administrative Services, Books, Records and Reports
The Underwriter shall cause to be maintained and preserved for the periods prescribed such accounts, books and other documents as are required of it by the Investment Company Act of 1940 and any other applicable laws and regulations. The books, accounts and records of ILIAC, the Accounts and the Underwriter as to all transactions effected in accordance with this Agreement shall be maintained so as to clearly and accurately disclose the nature and details of such transactions, including the sale of Contracts and payment of commissions and service fees by ILIAC. The Underwriter shall furnish
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ILIAC with such reports as it may reasonably request for the purpose of meeting its reporting and record keeping requirements in accordance with applicable laws and regulations.
6. Fiduciary Capacity
Underwriter agrees that any purchase payments it receives for the Contracts will be held in a fiduciary capacity and agrees to transfer any such amount to ILIAC within three business days.
7. Compensation to Underwriter
ILIAC will pay the Underwriter for services rendered hereunder as billed by the Underwriter and agreed to by ILIAC. Underwriter agrees that reimbursement shall be limited to actual expenses.
8. Non Exclusivity
The services of the Underwriter to the Accounts hereunder are not to be deemed exclusive and the Underwriter shall be free to render similar services to others as long as its services provided hereunder are not impaired or interfered with thereby.
9. Non Assignability
This Agreement shall be nonassignable by the parties hereto.
10. Amendment
This Agreement shall be amended only by written agreement of the parties hereto.
11. Term
This Agreement shall be effective on the seventeenth day of November, 2006, and shall end on the sixteenth day of November, 2009; provided however, that this Agreement shall be automatically renewed on the seventeenth day of November of each calendar year thereafter for a twelve-month period under the same terms and conditions, subject to the provisions for termination set forth herein.
12. Termination
(a) This Agreement may be terminated by either party hereto for any reason upon 60 days’ written notice to the other party.
(b) This Agreement may be terminated upon written notice of one party to the other party hereto in the event of bankruptcy or insolvency of such party to which notice is given.
(c) This Agreement may be terminated at any time upon the mutual written consent of the parties hereto.
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(d) Upon termination of this Agreement, all authorizations, rights and obligations shall cease except the obligations to settle accounts hereunder, including payment of contributions subsequently received for Contracts in effect at the time of termination or issued pursuant to applications received by ILIAC prior to
termination.
13. Applicable Law
This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Connecticut.
14. Severabilitv
If any provision of this Agreement shall be held or made invalid by a court, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be signed by their respective officials thereunder duly authorized and seals to be affixed as of the day and year first above written.
ING LIFE INSURANCE AND ANNUITY COMPANY
By: /s/ Brian D. Comer
Title: President
Date: November 13, 2006
ING LIFE INSURANCE AND ANNUITY COMPANY, ON BEHALF OF ITS VARIABLE ANNUITY ACCOUNTS B, C, F, G and I, SEPARATE ACCOUNT D and VARIABLE LIFE ACCOUNTS B AND C
By: /s/ Brian D. Comer
Title: President
Date: November 13, 2006
ING FINANCIAL ADVISERS, L.L.C.
By: /s/ Richard R. Barhorst
Title: President
Date: November 13, 2006
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Exhibit 16(3)(a): Restated Certificate of Incorporation (amended and restated as of October 1, 2007) of ING Life Insurance and Annuity Company
Amended and Restated Certificate of Incorporation
of
ING LIFE INSURANCE AND ANNUITY COMPANY
(Amended and Restated as of October 1, 2007)
The Restated Certificate of Incorporation supersedes and takes the place of the existing certificate of incorporation and all amendments to it.
ARTICLE I
NAME
The name of the company is ING Life Insurance and Annuity Company.
ARTICLE II
OFFICES
The principal place of business and Home Office of the company shall be One Orange Way, Windsor, Connecticut.
ARTICLE III
POWERS AND PRIVILEGES
The company shall have the power to acquire, by purchase or otherwise, invest in, hold, sell, convey and have and exercise any and all rights of ownership or interest in or to any real or personal property whatsoever, including, without limitation, shares, securities and any other interest in or obligation of other firms, persons, corporations, governmental bodies, or other entities; to borrow money, issue promissory notes, bonds or other evidences of indebtedness and secure the same by mortgage, pledge or other form of security on any or all of its real or personal property or an interest therein; to make contracts of any nature and give security therefore; to carry on business in any place, if not prohibited by the laws of the place where such business is carried on; and to exercise all legal powers necessary or convenient to effect any or all of the purposes stated whether or not such powers are expressly set forth herein.
ARTICLE IV
NATURE OF BUSINESS
The business of the company shall be life insurance, endowments, annuities, accident insurance, health insurance and any other business or type of business which any other corporation now or hereafter chartered by Connecticut and empowered to do a life insurance business may now or hereafter lawfully do; and the company is specifically empowered to accept and to cede reinsurance of any such risks or hazards. The company may exercise such powers outside of Connecticut to the extent permitted by the laws of the particular jurisdiction. Policies or other contracts may be issued stipulated to be with or without participation in profits; and they may be with or without seal. The company may carry on any other lawful business in connection with the foregoing or which is
calculated, directly or indirectly, to promote the interest of the company or to enhance the value of its properties.
ARTICLE V
CAPITALIZATION
The capital with which the company shall commence business shall be an amount not less than one thousand dollars. The authorized number of shares of capital stock shall be one hundred thousand (100,000) shares of common capital stock with a par value of fifty dollars ($50) each.
ARTICLE VI
BOARD OF DIRECTORS
Section 1. The company shall have three (3) or more directors, the exact number of which shall be determined from time to time in accordance with the company's by-laws. The names and residence addresses of the board of directors of the company as of the adoption of the amended and restated Certificate of Incorporation are as follows:
| Thomas J. McInerney | Kathleen A. Murphy |
| 12 Brownstone Turn Weatogue, | 72 Kingswood Dr. |
| CT 06089 | South Glastonbury, CT 06073 |
| David A. Wheat | Robert W. Crispin |
| 3070 Cypress Pond Pass 7 | 20 Piper Rd. |
| Duluth, GA 30097 | Scarborough, ME 04074 |
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Catherine H. Smith 90 Foote Hill Rd. Northford, CT 06472 |
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Section 2. The by-laws of the company may provide for classification of directors as to terms of office, provided no director shall be elected by the shareholders for a shorter term than one year or for a longer term than five years and the classification shall be such that the term of one or more classes shall expire each succeeding year. If any vacancy occurs in the board of directors, such vacancy may be filled by the remaining directors for the unexpired portion of the term, and if the number of directors is increased by an amendment to the by-laws voted by the board of directors between meetings of shareholders, the additional directors, not to exceed three, may be chosen by the board of directors for terms expiring with the next annual meeting thereafter. The by-laws of the company may determine what number of directors shall constitute a quorum for the transaction of business.
Section 3. In action to the powers and authorities herein or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the company, subject to the provisions of the laws of the State of Connecticut, these Certificate of Incorporation, and
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the by-laws of the company; provided, however, that no by-law hereafter adopted by the shareholders shall invalidate any prior act of the directors which would have been valid if such by-law had not been adopted.
ARTICLE VII
ANNUAL MEETING
The annual meeting of the shareholders of the company shall be held at such time and place within the state and upon such notice as may be prescribed in the by-laws of the company.
ARTICLE VIII
DURATION
The company shall have a perpetual duration.
ARTICLE IX
INDEMNIFICATION
The company shall have every power and duty of indemnification of directors, officers, and employees without limitation, as provided in the by-laws and in accordance with the laws of the State of Connecticut.
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Exhibit 16(3)(b): Amended and Restated By-Laws of ING Life Insurance and Annuity Company, effective October 1, 2007
AMENDED AND RESTATED BYLAWS OF
ING LIFE INSURANCE AND ANNUITY COMPANY
ARTICLE I
LOCATION
Section 1. The principal office of ING Life Insurance and Annuity Company (“ILIAC” or the “Company”) shall be in the City of Windsor, County of Hartford, State of Connecticut. The Company may establish and maintain such other office or offices, within or without the State of Connecticut, as the Board of Directors (“Board”) may authorize or the business of the Company may require.
ARTICLE II
SHAREHOLDERS
Section 1. TIME AND PLACE OF MEETINGS. All meetings of the shareholders of the Company may be held at such time and place, within or without the State of Connecticut, as fixed by the Board, or as designated in the notice of meeting, provided that any or all shareholders may participate in such meeting by means of conference telephone, video conference, or similar telephonic communications by means of which all persons participating in the meeting can simultaneously hear each other. A shareholder participating in a meeting by this means shall be considered to be present at the meeting.
Section 2. ANNUAL MEETING. The annual meeting of the shareholders shall be held each year at a time and place designated by the Board. Annual meetings may be called by the Board or by any officer of the Company instructed by the Board to call the meeting. At the annual meeting, the shareholders shall elect Directors, and may elect a Chairman of the Board (“Chairman”), to serve until the next annual meeting or until their successors shall be elected and qualified, whichever is later. Any other proper business may also be transacted at the annual meeting
Section 3. SPECIAL MEETINGS. Special meetings of shareholders may be called at any time by the Chairman, the Board acting upon majority vote, the President or Secretary of the Company. A special meeting of shareholders shall also be called by the Secretary upon the written request of shareholders who together own of record a majority of the outstanding shares of each class of stock entitled to vote at such meeting, which written request shall state the purpose for the meeting. No business other than that specified in the notice of meeting shall be transacted at a special meeting of the shareholders.
Section 4. NOTICE OF MEETING. A written notice, in either paper or electronic format, stating the time and place of any meeting of shareholders, and in the case of a special meeting the purpose of the meeting, shall be mailed or delivered to each shareholder entitled to vote at the meeting, as required by law. Shareholders may waive notice of any meeting, and the presence of a shareholder at any meeting, in person or represented by proxy, shall constitute a waiver of notice of such meeting.
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Section 5. ORGANIZATION. Meetings of shareholders shall be presided over by the Chairman, or in his absence by the President, or if in his absence by a Vice-President, or in the absence of all of the foregoing persons, a person designated by the Board. The Secretary shall act as the secretary of the meeting, but in his absence the chairman of the meeting may appoint any person to act as secretary of the meeting.
Section 6. ADJOURNMENTS. Any meeting of shareholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of any such reconvened meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. Any business which might have been transacted at the original meeting, can be transacted at the reconvened meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the reconvened meeting, a notice of the reconvened meeting shall be given to each shareholder of record entitled to vote at the meeting.
Section 7. QUORUM. Except as otherwise provided by law or these by-laws, a quorum at any meeting of the shareholders shall consist of the number of shareholders holding a majority of the shares of each class of outstanding voting stock, present in person or represented by proxy. For purposes of the foregoing, two or more classes or series of stock shall be considered a single class if holders thereof are entitled to vote together as a single class at the meeting.
Section 8. VOTING AND PROXIES. At all meetings of the shareholders, each shareholder may cast one vote in person or by proxy for each share held. All proxies must be in writing and signed by the shareholder or by his duly authorized attorney-in-fact. All proxies shall be filed with the Secretary of the Company and recorded as part of the minutes of the shareholders meetings.
Section 9. DETERMINATION OF SHAREHOLDERS OF RECORD. The Company shall determine the shareholders entitled to notice of or to vote at any meeting of shareholders, or to express consent to an action without a meeting, or to receive payment of any dividend or other distribution or allotment of rights, or to exercise any shareholder rights, as follows: (i) the record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (ii) the record date for determining shareholders entitled to express consent to an action in writing without a meeting shall be the day on which the written consent is signed by the shareholder; and (iii) the record date for determining shareholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
Section 10. ACTION WITHOUT MEETING. Any action required or permitted to be taken at any annual or special meeting of shareholders may be taken without a meeting, without prior notice or vote, if all shareholders consent in writing to the action. Written actions must describe the action taken, bear the signature of each of the shareholders, and be delivered to the Secretary to be filed in the Company’s records. The written action shall be effective on the date the last of the shareholders has approved the action unless a different date is specified.
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ARTICLE III
BOARD OF DIRECTORS
Section 1. GENERAL POWERS. The affairs, property and business of the Company shall be managed by the Board.
Section 2. NUMBER, TERM, AND QUALIFICATIONS OF DIRECTORS. The Board shall consist of not less than five (5) nor more than fifteen (15) persons elected by the shareholders at the annual meeting of the shareholders. The number of directors may be increased or decreased by amendment to, or in the manner provided in, these bylaws or articles of incorporation. The number of directors to be elected may be determined by a resolution of the shareholders, but in the absence of such a resolution, there shall be elected the number of directors that were elected at the previous annual meeting of shareholders. Each Director shall hold office for the term for which he was elected, until his successor shall have been elected and qualified, or until his earlier resignation or removal.
Section 3. RESIGNATION. A Director may resign at any time by providing written notice to the Board, the Chairman, or the Secretary. If no effective date is specified in the notice, it will become effective at the time it is received by the Secretary.
Section 4. REMOVAL. At any meeting of shareholders, any Director or Directors may be removed from office, with or without cause, by the affirmative vote of the holders of a majority of the outstanding shares entitled to vote.
Section 5. VACANCIES. Unless otherwise provided in the Articles of Incorporation or these bylaws, vacancies and any newly created directorships resulting from any increase in the authorized number of directors may be filled by the affirmative vote of a majority of the Directors then in office, even if less than a quorum of the Board. A Director so elected shall be elected for the unexpired term of his predecessor in office or for the full term of a new directorship.
Section 6. TIME AND PLACE OF MEETINGS. The Board may hold regular meetings at such time and place as fixed by the Board from time to time. Special meetings may also be called by the Chairman, or any other member of the Board, the President, or the Secretary. Members of the Board may participate in such meeting by means of conference telephone, video conference, or similar telephonic communications by means of which all persons participating in the meeting can simultaneously hear each other. A Director participating in a meeting by this means is considered to be present at the meeting.
Section 7. NOTICE OF MEETINGS. Notice shall not be required with respect to any regular meeting called by the Board. With respect to a special meeting called by the Chairman or any other member of the Board, the President or the Secretary, written notice, in either paper or electronic format, stating the time, place and purpose of the meeting shall be mailed or delivered to each Director not less than twenty-four (24) hours before such meeting. Directors may waive notice of any meeting, and the presence of a Director at any meeting shall constitute a waiver of notice of such meeting.
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Section 8. ORGANIZATION. Meetings shall be presided over by the Chairman, or in his absence by the President, or if in his absence by a Vice-President, or in the absence of all of the foregoing persons a person designated by the Board. The Secretary shall act as the secretary of the meeting, but in his absence the chairman of the meeting may appoint any person to act as secretary of the meeting.
Section 9. ADJOURNMENTS. Any meeting may be adjourned from time to time to reconvene at the same or some other place, and notice need not be given of any such reconvened meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. Any business which might have been transacted at the original meeting, can be transacted at the reconvened meeting.
Section 10. QUORUM. Except as otherwise provided by law or these bylaws, a majority of the entire Board currently holding office shall constitute a quorum at any meeting of the Board. The act of a majority of the Directors at a meeting at which a quorum is present shall constitute the act of the Board, unless the law or these bylaws shall require the vote of a greater number. At any meeting of the Board where a quorum is not present, the Directors present shall adjourn the meeting until such time as a quorum shall be present.
Section 11. ACTION BY BOARD OF DIRECTORS WITHOUT MEETING. Any action that might be taken at a meeting of the Board may be taken without a meeting if done in writing signed by all of the Directors currently holding office. Written actions must describe the action taken, bear the signature of each of the Directors, and be delivered to the Secretary to be filed in the Company’s records. The written action shall be effective on the date the last of the Directors has approved the action unless a different date is specified.
ARTICLE IV
COMMITTEES OF THE BOARD
Section 1. COMMITTEE CREATION. The Board may, in its discretion, appoint one or more committees consisting of two or more members of the Board. The duties and responsibilities of each committee so appointed shall be determined in accordance with customary corporate practice, and as more specifically set forth in the Board resolution creating such committee and in the charter of such Committee which must be approved by the Board. Each committee shall have all the authority of the Board, except as expressly limited by the Board and applicable law. Committee actions shall be subject to revision or alteration by the Board provided rights of third parties would not be affected.
Section 2. QUORUM; ALTERNATE MEMBER. A majority of the members of any Committee appointed by the Board shall constitute a quorum for the transaction of any business at any meeting of such Committee. The Board may appoint one or more members of the Board as alternate members of any Committee, who will act in the place of any absent or disqualified Committee member. Any vacancy occurring in the membership of the Committee will be filled by any alternate Committee member previously appointed by the Board, until such time as the Board may appoint a replacement Committee member who will serve for the remainder of the vacating member’s term. If a committee member is absent from or disqualified from voting at a Committee meeting and no alternate Committee member has been appointed by the Board, the remaining member or members of the
4
Committee at the meeting, whether or not he or they constitute a quorum, may unanimously select from the Board a Director to act at the meeting in place of the absent or disqualified Committee member. The Board may remove a member of a Committee, with or without cause, whenever in its judgment such removal would serve the best interests of the Company.
Section 3. COMMITTEE RULES AND OPERATIONS. Unless the Board otherwise provides, each Committee appointed by the Board may adopt, amend and repeal rules for the conduct of its business without the approval of the Board, so long as such rules are not inconsistent with the Board resolution creating such Committee or with the Committee charter. In the absence of a specific provision in the Committee charter or the rules of the Committee, each Committee shall conduct its business in the same manner as the Board conducts its business pursuant to the relevant provisions of Article III of these bylaws.
Section 4. REPORTS TO THE BOARD. The Secretary of the Company (or such other officer as the Committee members shall designate) shall keep a written record of each Committee’s proceedings and shall submit a report of the Committee’s activities to the Board as stated in the Board resolution creating such Committee or as otherwise required by the Board.
ARTICLE V
OFFICERS
Section 1. ELECTION OF OFFICERS. As soon as practicable after the annual meeting of shareholders, the Board may, at its option, elect from among its members a Chairman, who shall be designated as the Chairman of the Board and an elected officer of the Company, but in any event shall elect a President; one or more Vice Presidents; a Treasurer; a Secretary; and such other officers as the Board deems necessary and may give them such designations or titles it considers desirable. The Board may authorize the classification of certain levels of Vice President and may authorize Assistant Treasurers, Assistant Secretaries, and other categories it deems proper. The Board of Directors may also elect or, by resolution, delegate to the President of the Company, the authority to appoint from time to time one or more business unit Presidents to act as the chief operating officers of the various business units of the Company. Unless prohibited by applicable law, the same person may hold two or more offices simultaneously.
Section 2. TERM OF OFFICE. Elected officers shall hold office until a successor is elected and qualified, or until his death, resignation, removal or suspension. Any officer vacancy may be filled prior to the next annual election by the Board at any regular or special meeting of the Board, or by written Board action without a meeting. Election as an officer shall not of itself create any contractual rights or expectation of continued employment.
The Board may remove an elected officer, with or without cause, whenever in its judgment such removal would serve the best interests of the Company. Such removal may be with or without prejudice to the contractual rights of such officer, if any.
An officer may resign at any time upon written notice to the Board, the President or the Secretary of the Company. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein, no acceptance of such resignation shall be necessary to make it effective. If no time is specified in the written resignation notice, it shall be effective upon delivery.
5
Section 3. POWERS AND DUTIES OF THE CHAIRMAN OF THE BOARD. If one is elected, the Chairman shall preside at all meetings of the Board and shall perform such other duties and have such other authority as the Board may from time to time prescribe.
Section 4. POWERS AND DUTIES OF THE PRESIDENT. The President shall have operational charge and management of the affairs, property and business of the Company, as well as all duties prescribed by the Board from time to time. The President shall also be responsible to ensure that all directives and resolutions of the Board are carried into effect.
Any business unit President appointed by the President shall be the chief operating executive for and shall have supervisory authority over the business unit for which he is appointed. Powers and duties of the business unit Presidents shall also include, but not be limited to, all of the authority, powers, and duties usually incident to the office of Vice President.
Section 5. POWERS AND DUTIES OF VICE PRESIDENTS. Vice Presidents shall have such authority, powers and duties in the management of the Company as generally pertain to such office, as well as all duties prescribed by the Board or President from time to time.
Section 6. POWERS AND DUTIES OF THE TREASURER. The Treasurer (and Assistant Treasurers), except as otherwise required by law, shall have charge and custody of all funds and securities of the Company under the direction of the Board; shall deposit all moneys of the company to the credit of the Company in such depositories as are authorized by the Board; shall see that all expenditures are duly authorized and evidenced; and perform all other duties usually incident to the office of Treasurer, as well as all duties prescribed by the Board or President from time to time.
Section 7. POWERS AND DUTIES OF THE SECRETARY. The Secretary (and Assistant Secretaries) shall give, or cause to be given, all required notices of Board and shareholders meetings; attend all Board and shareholders meetings and record and retain the minutes of such meetings (if the Secretary is absent from any meeting, the Chairman of the meeting may appoint a temporary secretary to act at such meeting); have custody of the stock register, minute books, and seal of the Company; and perform all other duties usually incident to the office of Secretary, as well as all duties prescribed by the Board from time to time.
ARTICLE VI
CAPITAL STOCK
All certificates of stock shall be signed by the President or a Vice President, and the Secretary or an Assistant Secretary of the Company. When a certificate is signed by a transfer agent or registrar appointed by the Board of Directors, the signature of any corporate officer and the corporate seal upon the certificate may be facsimiles, engraved, printed, or digital. The Company may issue a new certificate of stock to replace one that has been lost, stolen, or destroyed, and may require the owner or the owner’s legal representative to indemnify the Company against any claim that may be made against it on account of the loss.
6
ARTICLE VII
INDEMNIFICATION OF DIRECTORS, OFFICERS, AND OTHER PERSONNEL
Section 1. RIGHT TO INDEMNIFICATION AND STANDARD OF CONDUCT. To the full extent permitted by Connecticut law, Title XXXIII, Section 773-778, as amended from time to time, or by other provisions of applicable law, each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, wherever brought, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director, officer, fiduciary or employee of the Company, or is or was serving at the request of the Company as a director, officer, fiduciary, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall be indemnified by the company against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding, if he acted in good faith and in a manner reasonably believed to be in and not opposed to the best interests of the Company, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 2. AUTHORIZATION. Any indemnification under this Article VII (unless ordered by a court) shall be made by the Company only as authorized in the specific case upon a determination that the indemnification is proper in the circumstances because the person claiming indemnification has met the applicable standard of conduct set forth in Section 1. Such determination shall be made by the Board by a majority vote of a quorum consisting of Directors who were not parties to the action, suit or proceeding in question. If such a quorum is not obtainable, the Board shall retain independent legal counsel who shall make such determination in a written opinion.
Section 3. ADVANCE PAYMENT OF EXPENSES. Expenses (including attorney’s fees) incurred in defending a civil or criminal action, suit, or proceeding may be paid by the Company in advance of the final disposition of such action upon receipt of an undertaking by or on behalf of a person entitled to claim indemnification to repay such amount, unless it is ultimately determined that he is entitled to be indemnified under this Article VII.
Section 4. INSURANCE. The Company shall have power to purchase and maintain insurance on behalf of any person described in Section 1 against any liability asserted against and incurred by him, whether or not the Company would have the power to indemnify him against such liability under this Article VII.
Section 5. NON-EXCLUSIVITY. The indemnification provided by this Article VII shall not be deemed exclusive of any other rights to which any person indemnified may be entitled under the Articles of Incorporation, any agreement, insurance policy, vote of the shareholders or disinterested Directors, or otherwise.
Section 6. CONTINUANCE. The indemnification provided by this Article VII shall continue as to a person who has ceased to be director, officer, fiduciary, employee or agent with regard to acts or omissions of such person occurring or alleged to have occurred while the person was so engaged, shall apply whether or not the claim against such person arises out of matters occurring before the adoption of this by-law, and shall inure to the benefit of heirs, executors, and administrators of such person.
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ARTICLE VIII
MISCELLANEOUS
Section 1. FISCAL YEAR. The fiscal year of the Company begins with January first and ends with December thirty-first, or as otherwise determined by the Board from time to time.
Section 2. SEAL. The seal of the Company shall bear the corporate name of the Company, the place of its home office and such other features as may be approved by the Board from time to time. The seal of the Company shall be kept in the custody of the Secretary and may be affixed to any instrument requiring a seal and may be duly attested to by any officer of the Company.
Section 3. DIVIDENDS. The Board may from time to time declare, subject where required to regulatory approval or notice, and cause to be paid dividends of cash, property, or shares of stock or securities of, or owned by, the Company.
Section 4. INVESTMENTS. The President, a Vice President, the Secretary, and the Treasurer, or other officers or employees designated by the Board, have authority to sign instruments, including but not limited to: all note, bond, stock, or other securities purchase agreements and security, mortgage, or real estate commitment letters and amendments thereto, deeds and leases, and assignments, releases, or partial releases, or payment or performance moratoriums of any mortgages, debt obligations or other security interests held by the Company.
Section 5. POLICY CONTRACTS. All insurance policies and contracts for annuities, guaranteed investment contracts (GICs) or funding agreements, and for the disposition of the proceeds thereof, may be signed by any of the following officers: the President, a Vice President, the Treasurer, the Secretary or an Assistant Secretary; with respect to GICs or funding agreements, the business unit President may also execute contracts on behalf of the Company. The signatures may be facsimile, digital or electronic signatures.
Section 6. AGENCY AND OTHER CONTRACTS. The President, a Vice President, the Secretary and other officers or employees designated by the Board shall have authority to sign or approve agency contracts and related agreements, tax returns or reports, and any other reports filed with governmental agencies.
Section 7. OTHER INSTRUMENTS. All other contracts and written instruments not previously described shall be signed by one of the following officers: the President, a Vice President, the Secretary or the Treasurer, or by any other officer or employee of the Company designated by the Board, or by such other person or persons as may be designated from time to time by the Board.
Section 8. STATUTORY AGENTS. The President, a Vice President and the Secretary or an Assistant Secretary are authorized to appoint statutory agents of the Company and to execute powers of attorney as needed, to accept service of process against the Company, to execute papers to comply with laws in order to qualify the Company to do business in any state, territory, district, country or jurisdiction and to take other actions needed to be taken to comply with laws, rules, or regulations in order to qualify the Company to do business.
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Section 9. FORM OF RECORDS. Unless otherwise required by law, any records maintained by the Company in the regular course of its business, including its stock ledger, books of account and minute books, may be kept on, or be in the form of, magnetic tape, magnetic disk, optical disk, CD-ROM, microfiche, microfilm, or any other information storage format, provided that the records so kept can be converted into clearly legible form within a reasonable time.
Section 10. AMENDMENTS. The Board shall have the power to make, alter, amend or repeal any and all of these bylaws. Any such action by the Board may be amended, altered, or repealed by the shareholders.
These amended and restated bylaws were duly adopted by the Board of Directors of the Company on the 1st day of October, 2007.
/s/ Joy M. Benner
Joy M. Benner, Secretary
9
Exhibit 16(4)(a): Group Annuity Contract (Form No. GS-MGA-95)
| -------------------------------------------------------------- | ||||
| [AETNA LOGO] | Aetna Insurance Company of America | |||
| Home Office: 151 Farmington Avenue | ||||
| Hartford, Connecticut 06156 | ||||
| (800) 531-4547 | ||||
| A STOCK COMPANY | ||||
| Aetna Insurance Company of America, herein called Aetna, | ||||
| agrees to pay the benefits stated in this Contract. | ||||
| Specifications | ||||
| ----------------------------------------------------------------------------- | ||||
| Plan | ||||
| AETNA MULTI-RATE ANNUITY | ||||
| ----------------------------------------------------------------------------- | ||||
| Type of Plan | ||||
| SINGLE PREMIUM MODIFIED GUARANTEED DEFERRED ANNUITY | ||||
| ----------------------------------------------------------------------------- | ||||
| Contract Holder(s) | ||||
| ANY BROKER | ||||
| ----------------------------------------------------------------------------- | ||||
| Contract No. | ||||
| SPECIMEN | ||||
| ----------------------------------------------------------------------------- | ||||
| Effective Date | ||||
| DECEMBER 1, 1995 | ||||
| ----------------------------------------------------------------------------- | ||||
| This Contract is Delivered in | and is Subject to the Laws of that | |||
| Jurisdiction | ||||
| Right to Cancel | ||||
| ----------------------------------------------------------------------------- | ||||
| The Contract | Holder may cancel this Contract within 10 days of receiving it | |||
| by returning | this Contract along with a written notice to Aetna at the above | |||
| address | or to the agent from whom it was purchased. Within 7 days after it | |||
| receives | the notice of cancellation and this Contract at its Home Office, | |||
| Aetna will return the entire consideration paid. | ||||
| Signed at the Home Office on the Effective Date. | ||||
| /s/Dan Kearney | /s/Maria McKeon | |||
| President | Secretary | |||
| Group Single Premium Modified Guaranteed Deferred Annuity Contract | ||||
| Nonparticipating | ||||
| THIS CONTRACT | CONTAINS A MARKET VALUE ADJUSTMENT FORMULA. APPLICATION OF A | |||
| MARKET VALUE | ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR DECREASE IN THE | |||
| CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT APPLY TO A | ||||
| GUARANTEED PERIOD AT THE TIME OF ITS MATURITY. | ||||
| G2-MGA-95 | ||||
| <PAGE> | ||||
| Specifications | ||||
| ----------------------------------------------------------------------------- | ||||
| Guaranteed | There is a guaranteed interest rate for the Purchase | |||
| Interest Rate | Payment held in the AMG Account. (See Contract | |||
| Schedule I). | ||||
| ----------------------------------------------------------------------------- | ||||
| Deduction from | The Purchase Payment may be subject to a deduction | |||
| Purchase | for premium taxes, if applicable. (See 3.01.) | |||
| Payment | ||||
| ----------------------------------------------------------------------------- | ||||
| Surrender | There may be a charge | deducted upon surrender (See | ||
| Fee | Contract Schedule I). | |||
| This Contract is a legal contract and | constitutes the entire legal | |||
| relationship between Aetna and the Contract Holder. | ||||
| READ THIS CONTRACT CAREFULLY. This Contract sets forth, in detail, all of the | ||||
| rights and obligations of both you and Aetna. IT IS THEREFORE IMPORTANT THAT | ||||
| YOU READ THIS CONTRACT CAREFULLY. | ||||
| G2-MGA-95 | 2 | |||
| <PAGE> | ||||
| Contract Schedule I | ||||
| Accumulation Period | ||||
Page 1 of 17
https://www.sec.gov/Archives/edgar/data/925988/0000908634-95-000104.txt 02/12/2018
| AICA Modified Guaranteed Account (AMG Account) | |||||||
| ----------------------------------------------------------------------------- | |||||||
| Minimum Guaranteed | [3.0%] | ||||||
| Interest Rate: | |||||||
| (effective annual rate of return) | |||||||
| Maintenance Fee: |
The annual Maintenance Fee is [$0.] | ||||||
| Annuity Date: | The Annuity Date will be the later of the date the Annuitant reaches age [85] or the [10th] anniversary of the Purchase Payment. | ||||||
| Minimum Purchase Payment: | [$10,000.] | ||||||
| Maximum Purchase Payment: | Purchase Payments exceeding [$1,000,000] must be approved by Aetna. | ||||||
| Minimum Guaranteed Period | [$1,000.] | ||||||
| Allocation Amount: | |||||||
| Maximum Age of | [90.] If there are joint Certificate Holders, the age of the oldest Certificate Holder cannot exceed [90]. | ||||||
| Certificate Holder at issue: | |||||||
| Surrender Fee: | Length of Time from Surrender Fee (Percentage Certificate Effective Date of Net Purchase Payment (Years) Withdrawn) | ||||||
| Less than 1 year | 7% | ||||||
| 1 year but less than 2 | 7% | ||||||
| 2 years but less than 3 | 6% | ||||||
| 3 years but less than 4 | 6% | ||||||
| 4 years but less than 5 | 5% | ||||||
| 5 years but less than 6 | 4% | ||||||
| 6 years but less than 7 | 2% | ||||||
| 7 years or more | 0% | ||||||
| After seven years have elapsed from the certificate effective date, the Surrender Fee will no longer be assessed. | |||||||
| Special Withdrawl: | [10%] | ||||||
| Systematic Withdrawal | The specified payment or specified percentage may not be greater than [10%]. | ||||||
| Option (SWO): | |||||||
| See 1. GENERAL DEFINITIONS for explanations. | |||||||
| G2-MGA-95 | 3 | ||||||
| <PAGE> | |||||||
| Contract Schedule II | |||||||
| Annuity Period | |||||||
| Fixed Annuity | |||||||
| ----------------------------------------------------------------------------- | |||||||
| Minimum Guaranteed | [3.0%] | ||||||
| Interest Rate | |||||||
| (effective annual rate of | |||||||
| return): | |||||||
| See 1. GENERAL DEFINITIONS for explanations. | |||||||
| G2-MGA-95 | 4 | ||||||
| TABLE OF CONTENTS | |||||||
| Page | |||||||
| I. | GENERAL DEFINITIONS | ||||||
| ----------------------------------------------------------------------------- | |||||||
| 1.01 | ACCOUNT | 7 | |||||
| 1.02 | ACCUMULATION PERIOD | 7 | |||||
| 1.03 | ADJUSTED CURRENT VALUE | 7 | |||||
| 1.04 | ANNUITANT | 7 | |
| 1.05 | ANNUITY | 7 | |
| 1.06 | ANNUITY DATE | 7 | |
| 1.07 | BENEFICIARY | 7 | |
| 1.08 | CERTIFICATE HOLDER | 7 | |
| 1.09 | CODE | 7 | |
| 1.10 | CONTRACT | 7 | |
| 1.11 | CONTRACT HOLDER | 7 | |
| 1.12 | CURRENT VALUE | 7 | |
| 1.13 | DEPOSIT PERIOD | 8 | |
| 1.14 | ENTIRE CONTRACT | 8 | |
| 1.15 | FIXED ANNUITY | 8 | |
| 1.16 | GENERAL ACCOUNT | 8 | |
| 1.17 | GUARANTEED RATES -- AMG ACCOUNT | 8 | |
| 1.18 | GUARANTEED PERIOD | 8 | |
| 1.19 | GUARANTEED PERIOD GROUPS | 8 | |
| 1.20 | MAINTENANCE FEE | 8 | |
| 1.21 | AICA MODIFIED GUARANTEED ACCOUNT (AMG ACCOUNT) | 9 | |
| 1.22 | MARKET VALUE ADJUSTMENT (MVA) | 9 | |
| 1.23 | MATURED PERIOD VALUE | 9 | |
| 1.24 | MATURITY DATE | 9 | |
| 1.25 | NET PURCHASE PAYMENT | 9 | |
| 1.26 | NONUNITIZED SEPARATE ACCOUNT | 9 | |
| 1.27 | PURCHASE PAYMENT | 9 | |
| 1.28 | REINVESTMENT | 9 | |
| 1.29 | SURRENDER VALUE | 10 | |
| G2-MGA-95 | 5 | ||
| II. GENERAL PROVISIONS | |||
| ----------------------------------------------------------------------------- | |||
| 2.01 | CHANGE OF CONTRACT | 10 | |
| 2.02 | NONPARTICIPATING CONTRACT | 10 | |
| 2.03 | PAYMENTS AND ELECTIONS | 10 | |
| 2.04 | STATE LAWS | 10 | |
| 2.05 | CONTROL OF CONTRACT | 10 | |
| 2.06 | DESIGNATION OF BENEFICIARY | 11 | |
| 2.07 | MISSTATEMENTS AND ADJUSTMENTS | 11 | |
| 2.08 | INCONTESTABILITY | 11 | |
| 2.09 | INDIVIDUAL CERTIFICATES | 11 | |
| III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS | |||
| ----------------------------------------------------------------------------- | |||
| 3.01 | NET PURCHASE PAYMENT | 11 | |
| 3.02 | MARKET VALUE ADJUSTMENT | 12 | |
| 3.03 | NOTICE TO THE CERTIFICATE HOLDER | 13 | |
| 3.04 | LOANS | 13 | |
| 3.05 | SYSTEMATIC WITHDRAWAL OPTION (SWO) | 13 | |
| 3.06 | DEATH BENEFIT AMOUNT | 14 | |
| 3.07 | DEATH BENEFIT OPTIONS AVAILABLE TO BENEFICIARY | 15 | |
| 3.08 | LIQUIDATION OF SURRENDER VALUE | 16 | |
| 3.09 | SURRENDER FEE | 16 | |
| 3.10 | PAYMENT OF SURRENDER VALUE | 16 | |
| 3.11 | PAYMENT OF ADJUSTED CURRENT VALUE | 17 | |
| IV. ANNUITY PROVISIONS | |||
| ----------------------------------------------------------------------------- | |||
| 4.01 | CHOICES TO BE MADE | 17 | |
| 4.02 | TERMS OF ANNUITY OPTIONS | 17 | |
| 4.03 | DEATH OF ANNUITANT/ BENEFICIARY | 18 | |
| 4.04 | ANNUITY OPTIONS | 18 | |
| G2-MGA-95 | 6 | ||
I. GENERAL DEFINITIONS
-----------------------------------------------------------------------------
1.01 Account: A record established for each
Certificate Holder to maintain the
value of the Net Purchase Payment held
on his/her behalf during the
Accumulation Period.
1.02 Accumulation Period: The period during which the Net
Purchase Payment is applied to an
Account to provide future Annuity
payment(s).
1.03 Adjusted Current Value: The Current Value of an Account
plus or minus any aggregate AMG Account
MVA, if applicable. (see 1.22)
1.04 Annuitant: The person named by the Certificate
Holder whose life is measured for
purposes of the guaranteed death
benefit and the duration of Annuity
payments under this Contract. Subject
to Aetna approval, the Annuitant may be
changed by the Certificate Holder by
notifying Aetna in writing prior to the
Annuity Date of an Account.
1.05 Annuity: Payment of an income:
(a) For the life of one or two
persons;
(b) For a stated period; or
(c) For some combination of (a) and
(b).
1.06 Annuity Date: The date on which Annuity payments
begin under an Annuity option elected
by the Certificate Holder. (see 4.01)
The Annuity Date is shown on Contract
Schedule I. The Certificate Holder may
change this date by notifying Aetna at
least 30 days prior to the Annuity
Date.
1.07 Beneficiary: The person(s) entitled to receive death
benefits under the terms of this
Contract.
1.08 Certificate Holder: A person who purchases an interest in
this Contract as evidenced by a
certificate. Aetna reserves the right
to limit Account ownership to natural
persons. If more than one Certificate
Holder owns an Account, each
Certificate Holder will be a joint
Certificate Holder. Any joint
Certificate Holder must be the spouse
of the other joint Certificate Holder.
Joint Certificate Holders have joint
ownership rights and both must
authorize exercising any ownership
rights unless Aetna allows otherwise.
1.09 Code: The Internal Revenue Code of 1986, as
it may be amended from time to time.
1.10 Contract: This agreement between Aetna and the
Contract Holder.
1.11 Contract Holder: The entity to which the Contract is
issued.
1.12 Current Value: The Net Purchase Payment plus any
interest credited; less all Maintenance
Fees deducted, any amounts surrendered
and any amounts applied to an Annuity.
G2-MGA-95 7
1.13 Deposit Period: A calendar week, a calendar month, a
calendar quarter, or any other period
of time specified by Aetna during which
the Net Purchase Payment and
Reinvestments are accepted into the AMG
Account for one or more Guaranteed
Periods. Aetna reserves the right to
extend the Deposit Period.
1.14 Entire Contract: The Contract, all attached pages and
any subsequent endorsements make up the
Entire Contract.
1.15 Fixed Annuity: An Annuity with payments that do not
vary in amount based on investment
performance.
1.16 General Account: The Account holding the assets of
Aetna, other than those assets held in
Aetna's separate accounts.
1.17 Guaranteed Rates - Aetna will declare the interest rate
AMG Account: applicable for each Guaranteed Period
at the start of the Deposit Period for
that applicable Guaranteed Period. The
rate(s) are guaranteed by Aetna for
that Deposit Period and the ensuing
Guaranteed Period(s). The Guaranteed
Rates are effective annual rates of
return. That is, interest is credited
daily at a rate that will produce the
Guaranteed Interest Rate over the
period of a year. No Guaranteed Rate
will ever be less than the Minimum
Guaranteed Interest Rate shown on
Contract Schedule I.
For Guaranteed Periods of one year or
less, one Guaranteed Rate is credited
for the full Guaranteed Period. For
longer Guaranteed Periods, an initial
Guaranteed Rate is credited from the
date of deposit to the end of a
specified period within the Guaranteed
Period. There may be different
Guaranteed Rate(s) declared at the
beginning of the Deposit Period for
subsequent specified time intervals
throughout the Guaranteed Period.
1.18 Guaranteed Period: The period of time for which Guaranteed
Rates are guaranteed on the Net
Purchase Payment and Reinvestments made
during a current Deposit Period. Such
period begins on the day following the
close of the Deposit Period and ends on
the designated Maturity Date.
Guaranteed Periods are offered at
Aetna's discretion for various lengths
of time ranging up to and including
twenty years.
During a Deposit Period, Aetna may make
available any number of Guaranteed
Periods. The Certificate Holder may
allocate the Net Purchase Payment or
Reinvestment into any or all of the
available Guaranteed Periods.
1.19 Guaranteed Period Groups: All Guaranteed Periods with the same
length of time from the close of the
Deposit Period until the designated
Maturity Date.
1.20 Maintenance Fee: The Maintenance Fee, if any (see
Contract Schedule I) will be deducted
from the Account during the
Accumulation Period on each anniversary
of the date the Account is established
and upon surrender of the entire
Account.
G2-MGA-95 8
1.21 AICA Modified An accumulation option where Aetna
Guaranteed Account guarantees rate(s) of interest for
(AMG Account): specified periods of time. All assets
of Aetna, including amounts in the
Nonunitized Separate Account, are
available to meet the guarantees under
the AMG Account.
1.22 Market Value Adjustment An adjustment that may apply to the
(MVA): amount withdrawn from a Guaranteed
Period prior to the end of that
Guaranteed Period. The adjustment
reflects the change in the value of the
investment due to changes in interest
rates since the date of deposit and is
computed using the formula given in
3.02. The adjustment is expressed as a
percentage or a factor of each dollar
being withdrawn.
1.23 Matured Period Value: The amount payable on a Guaranteed
Period's Maturity Date.
1.24 Maturity Date: The last day of a Guaranteed Period.
1.25 Net Purchase Payment: The Purchase Payment less premium
taxes, as applicable.
1.26 Nonunitized Separate A separate account set up by Aetna
Account: under Title 38, Section 38a-433, of the
Connecticut General Statutes, that
holds assets for AMG Account Guaranteed
Periods. There are no discrete units
for the AMG Account. The Certificate
Holder does not participate in the
investment gain or loss from the assets
held in the Nonunitized Separate
Account. Such gain or loss is borne
entirely by Aetna. The assets held in
the AMG Account may be chargeable with
liabilities arising out of any other
business of Aetna.
1.27 Purchase Payment: Payment accepted by Aetna at its Home
Office. Aetna reserves the right to
refuse to accept any Purchase Payment
at any time for any reason. No advance
notice will be given to the Contract
Holder.
1.28 Reinvestment: Aetna will notify the Certificate
Holder of the approaching Maturity Date
at least 18 calendar days prior to the
end of any Guaranteed Period. If no
specific direction is given by the
Certificate Holder prior to the
Maturity Date, each Matured Period
Value will be reinvested on the
Maturity Date for a Guaranteed Period
of the same duration. If a Guaranteed
Period of the same duration is
unavailable, each Matured Period Value
will automatically be reinvested on the
Maturity Date for the next shortest
Guaranteed Period available. If no
shorter Guaranteed Period is available,
the next longer Guaranteed Period will
be used. Aetna will mail a confirmation
statement to the Certificate Holder the
next business day after the Maturity
Date.
At any time prior to the Maturity Date,
the Certificate Holder may request in
writing a reinvestment of the Matured
Period Value in a different Guaranteed
Period(s) or a surrender of all or a
part of the Matured Period Value
without an MVA or Surrender Fee. Such
request will be executed on the
Maturity Date. If reinvesting in a
G2-MGA-95 9
1.28 Reinvestment: different Guaranteed Period(s), all or
(Cont'd) part of the Matured Period Value will
be reinvested in the elected Guaranteed
Period(s) at the then prevailing
rate(s). This provision only applies to
a written request from the Certificate
Holder received at Aetna's Home Office
in good order at least five (5) days
prior to the Maturity Date.
1.29 Surrender Value: The amount payable by Aetna upon the
surrender of all or any portion of an
Account.
II. GENERAL PROVISIONS
-----------------------------------------------------------------------------
2.01 Change of Contract: Only an authorized officer of Aetna may
change the terms of this Contract.
Aetna reserves the right to modify this
Contract to meet the requirements of
applicable state and federal laws or
regulations. Aetna will notify the
Contract Holder and Certificate Holder
in writing of any changes.
2.02 Nonparticipating Contract: The Contract Holder, Certificate
Holders or Beneficiaries will not have
a right to share in the earnings of
Aetna.
2.03 Payments and Elections: While the Certificate Holder is living,
Aetna will pay the Certificate Holder
any Annuity payments as and when due.
After the Certificate Holder's death,
or at the death of the first
Certificate Holder if the Account is
owned jointly, any Annuity payments
will be paid in accordance with 4.03.
Aetna will make any other payments
within seven (7) calendar days of
receipt of a written request for
payment, which is in good order, at its
Home Office, except as provided in
3.10.
2.04 State Laws: The Contract and the certificates
comply with the laws of the state in
which they are delivered. Any
surrender, death, or Annuity payments
are equal to or greater than the
minimum required by such laws. Annuity
tables for legal reserve valuation
shall be as required by state law. Such
tables may be different from Annuity
tables used to determine Annuity
payments.
2.05 Control of Contract: This is a Contract between the Contract
Holder and Aetna. The Contract Holder
has title to the Contract. Contract
Holder rights are limited to accepting
or rejecting Contract modifications.
The Certificate Holder has all other
rights to amounts held in his or her
Account.
Each Certificate Holder shall own all
amounts held in his or her Account.
Each Certificate Holder may make any
choices allowed by this Contract for
his or her Account. Choices made under
this Contract must be in writing. If
the Account is owned jointly, both
joint Certificate Holders must
authorize any choices in writing. Until
receipt of such choices at Aetna's Home
Office, Aetna may rely on any previous
choices made.
G2-MGA-95 10
2.05 Control of Contract: The Contract is not subject to the
(Cont'd) claims of any creditors of the Contract
Holder or the Certificate Holder,
except to the extent permitted by law.
The Certificate Holder may assign or
transfer his or her rights under the
Contract. Aetna reserves the right not
to accept assignment or transfer to a
nonnatural person. Any assignment or
transfer made must be submitted to
Aetna's Home Office in writing and will
not be effective until accepted by
Aetna. Aetna assumes no responsibility
for the validity of any assignment.
2.06 Designation of Each Certificate Holder shall name his
Beneficiary: or her Beneficiary. The Beneficiary may
be changed at any time. Changes to a
Beneficiary must be submitted to
Aetna's Home Office in writing and will
not be effective until received and
recorded by Aetna.
2.07 Misstatements and If Aetna finds the age of any Annuitant
Adjustments: to be misstated, the correct facts will
be used to adjust payments.
2.08 Incontestability: Aetna will not contest this Contract
from its effective date.
2.09 Individual Certificates: Aetna shall issue a certificate to each
Certificate Holder. The certificate
will summarize certain provisions of
the Contract. Certificates are for
information only and are not a part of
the Contract, except as evidence of the
Certificate Holder's interest in the
Contract.
III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS
-----------------------------------------------------------------------------
3.01 Net Purchase Payment: This amount is the Purchase Payment
less any applicable premium tax. Aetna
reserves the right to deduct any
premium tax at any time from the
Purchase Payment or from the
Certificate Holder's Account.
The Certificate Holder shall designate,
on the enrollment form, the allocation
percentage of the Net Purchase Payment
to be applied to each of the available
Guaranteed Periods during the current
Deposit Period(s). The minimum amount
that may be allocated to any Guaranteed
Period is shown on Contract Schedule I.
G2-MGA-95 11
3.02 Market Value Adjustment: There will be an MVA for any withdrawal
from the AMG Account before the end of
a Guaranteed Period when the withdrawal
is due to:
(a) Any full or partial surrender, but
not for a partial withdrawal under
the Systematic Withdrawal Option
(see 3.05); or
(b) Payment made to a Beneficiary as a
death benefit during the
Accumulation Period, but not
payment made within six months of
the date of the Annuitant's death
(see 3.06); or
(c) An election of an Annuity option.
Only a positive MVA, if any, will
apply upon election of option 2 or
3 (see 4.04).
Market value adjusted amounts will be
equal to the amount withdrawn
multiplied by the following ratio:
| x | |
| --- | |
| 365 | |
| (1 + i) | |
| ------- |
| x | |
| --- | |
| 365 | |
| (1 + j) |
Where:
i is the Deposit Period Yield
j is the Current Yield
x is the number of days
remaining, (computed from
Wednesday of the week of
withdrawal) in the Guaranteed
Period.
The Deposit Period Yield will be
determined as follows:
(a) At the close of the last business
day of each week of the Deposit
Period, a yield will be computed
as the average of the yields on
that day of U.S. Treasury Notes
which mature in the last three
months of the Guaranteed Period.
G2-MGA-95 12
3.02 Market Value (b) The Deposit Period Yield is the
Adjustment: average of those yields for the
(Cont'd) Deposit Period. If withdrawal is
made before the close of the
Deposit Period, it is the average
of those yields on each week
preceding withdrawal.
The Current Yield is the average of the
yields on the last business day of the
week preceding withdrawal on the same
U.S. Treasury Notes included in the
Deposit Period Yield.
In the event that no U.S. Treasury
Notes which mature in the last three
months of the Guaranteed Period exist,
Aetna reserves the right to use the
U.S. Treasury Notes that mature in the
following quarter.
3.03 Notice to the Certificate The Certificate Holder will receive
Holder: statements at least annually from Aetna
showing the value of any amounts held
in the AMG Account.
Such values will be as of a specific
date no more than 60 days before the
date of the notice.
3.04 Loans: Loans are not available under this
Contract.
3.05 Systematic Withdrawal The Certificate Holder may elect a
Option (SWO): distribution option under which a
portion of the Account's Current Value
will automatically be surrendered and
distributed each year. SWO payments
will be calculated based on the
Account's full Current Value. The
distributed amount is withdrawn pro
rata from each Guaranteed Period(s). A
Surrender Fee will not be deducted from
any portion of the Current Value which
is paid as a distribution under SWO.
Certificate Holders should consult
their tax adviser prior to requesting
this distribution option.
(a) Amount of Distribution: The
Certificate Holder may elect one
of the three payment methods
described below.
(1) Specified Payment: Payments
of a designated dollar
amount. The annual amount may
not be greater than the
percentage shown on Contract
Schedule I times the Current
Value at time of election.
This annual dollar amount
will remain constant. At its
discretion, Aetna may require
a minimum initial payment
amount;
(2) Specified Period: Payments
which are made over a period
of time which must be at
least 10 years. The annual
amount paid each year is
calculated by dividing the
Current Value as of December
31 of the prior year by the
number of payment years
remaining; or
G2-MGA-95 13
3.05 Systematic Withdrawal (3) Specified Percentage: Payment
Option (SWO): of a designated percentage
(Cont'd) which cannot be greater than
the percentage shown on
Contract Schedule I. The
percentage may be changed by
written request. Aetna
reserves the right to limit
the number of times the
percentage may be changed.
The annual amount is
calculated by multiplying the
Current Value as of December
31 of the year prior to the
payment by the designated
percentage.
Payments upon the Certificate Holder's
or Annuitant's death will be made to
the Beneficiary in the manner described
in 3.07.
(b) Minimum Initial Current Value: At
its discretion, Aetna may require
a minimum initial Current Value
for election of this option. If
after election of this option the
Current Value is insufficient to
make a scheduled SWO payment,
Aetna will distribute the entire
Account balance.
(c) Date of Distribution: The
Certificate Holder shall specify
the initial distribution date. As
elected by the Certificate Holder,
SWO payments will be made on a
monthly or quarterly basis unless
Aetna allows otherwise. If SWO
payments are made more frequently
than annually, the designated
annual amount is divided by the
number of payments due each
calendar year. Subsequent
distributions will be made on the
15th of any month or such other
date as Aetna may designate or
allow.
(d) Election and Revocation: SWO may
be elected by submitting a
completed and signed election form
to Aetna's Home Office. Aetna
reserves the right to establish
the date when SWO may first be
elected by a Certificate Holder.
Once elected, this option may be
revoked by the Certificate Holder
or spousal Beneficiary, if elected
after the Certificate Holder's
death, by submitting a written
request to Aetna at its Home
Office. Any revocation will apply
only to amounts not yet paid. SWO
may be elected only once by the
Certificate Holder or by the
spousal Beneficiary.
3.06 Death Benefit Amount: If the Certificate Holder or Annuitant
dies before Annuity payments start, the
Beneficiary is entitled to a death
benefit under the Account. If the
Account is owned jointly, the death
benefit is paid at the first death of
either of the joint Certificate
Holders. If the Account is held by
joint Certificate Holders, the survivor
will be deemed the designated
Beneficiary and any other Beneficiary
on record will be treated as the
contingent Beneficiary. If the
Certificate Holder is a nonnatural
person, the death benefit will be
payable at the death of the Annuitant.
G2-MGA-95 14
3.06 Death Benefit Amount: If paid within 6 months of the date of
(Cont'd) the Annuitant's death, the death
benefit will be the Current Value of
the Account. Otherwise, the death
benefit will be the Adjusted Current
Value of the Account determined as of
the claim date. The claim date is the
date when proof of death and the
Beneficiary's claim are received in
good order at Aetna's Home Office.
When the Certificate Holder dies, and
the Certificate Holder is not the
Annuitant, the death benefit payable
will be subject to a Surrender Fee, if
applicable.
3.07 Death Benefit Options Prior to any election, or until amounts
available to Beneficiary: must be otherwise distributed under
this section, the Current Value of the
Account will be retained in the
Account. The following options are
available to the Beneficiary:
(a) When the Certificate Holder dies
or, if the Certificate Holder is
not a natural person, when the
Annuitant dies:
(1) If the Beneficiary is the
Certificate Holder's
surviving spouse, the
Beneficiary may exercise all
Certificate Holder rights
under the Contract and
continue in the Accumulation
Period, or may elect (i) or
(ii) below. Distributions
from the Account are not
required until the spousal
Beneficiary's death. The
spousal Beneficiary may elect
to:
(i) Apply some or all of the
death benefit amount to
an Annuity option 1, 2
or 3 (see 4.04); or
(ii) Receive, at any time, a
lump sum payment equal
to the death benefit
amount.
(2) If the Beneficiary is an
individual who is not the
Certificate Holder's
surviving spouse, then
options (i) or (ii) under (1)
above apply. Any portion of
the death benefit amount not
applied to Annuity option 1,
2 or 3 within one year of the
Certificate Holder's death,
must be distributed within
five years of the date of
death.
(3) If the Beneficiary is not a
natural person, then only
option (ii) under (1) above
applies.
(4) If no Beneficiary has been
designated, a lump sum
payment equal to the death
benefit amount will be made
to the Certificate Holder's
estate.
(b) If the Certificate Holder is a
natural person but is not the
Annuitant, and the Annuitant dies,
the Beneficiary may elect either
to apply the death benefit amount
to Annuity option 1, 2, or 3
within 60 days of the Annuitant's
date of death, or to receive a
lump sum payment.
G2-MGA-95 15
<PAGE>
3.08 Liquidation of Surrender All or any portion of the Account's
Value: Current Value may be surrendered at any
time prior to the Annuity Date.
Surrender requests can be submitted as
a percentage to the Account value or as
a specific dollar amount. Net Purchase
Payment amounts are withdrawn first,
and then the excess value, if any. For
any partial surrender, amounts are
withdrawn on a pro rata basis from the
Guaranteed Period(s) Groups of the AMG
Account in which the Current Value is
invested. Within a Guaranteed Period
Group, the amount to be surrendered
will be withdrawn first from the oldest
Deposit Period, then from the next
oldest, and so on until the amount
requested is satisfied.
After deduction of the Maintenance Fee
and any Premium Tax, if applicable, the
surrendered amount shall be reduced by
a Surrender Fee, if applicable. An MVA
may apply to amounts surrendered.
3.09 Surrender Fee: The Surrender Fee only applies to the
Net Purchase Payment portion
surrendered and varies according to the
elapsed time from the certificate
effective date (see Contract Schedule
I).
No Surrender Fee is deducted from any
portion of the Current Value which is
paid:
(a) To a Beneficiary due to the
Annuitant's death before Annuity
payments start (see 3.06);
(b) As a premium for an Annuity option
1, 2 or 3 under this Contract (see
Page 12 of 17
https://www.sec.gov/Archives/edgar/data/925988/0000908634-95-000104.txt 02/12/2018
4.04);
(c) As a distribution under the SWO
provision (see 3.05);
(d) At least 12 months after the date
of the Purchase Payment, in an
amount equal to or less than the
special withdrawal percentage
shown on Contract Schedule I times
the Current Value at the time of
the withdrawl. This applies to the
first surrender request, partial
or full, in a calendar year. The
Current Value is calculated as of
the date the surrender request is
received in good order at Aetna's
Home Office. This waiver is not
available to the Certificate
Holder while SWO is in effect;
(e) For a full surrender of the
Account where the Current Value of
the Account is $2,500 or less and
no surrenders have been taken from
the Account within the prior 12
months;
(f) Upon withdrawl of any Matured
Period Value; or
(g) By Aetna under 3.11.
3.10 Payment of Surrender Under certain emergency conditions,
Value: as allowed by law, Aetna may defer
payment for a period of up to 6 months.
G2-MGA-95 16
3.11 Payment of Adjusted Upon 90 days' written notice to the
Current Value: Certificate Holder, Aetna will
terminate any Account if the Current
Value becomes less than $2,500
immediately following any partial
surrender. A Surrender Fee will not be
deducted from the Adjusted Current
Value.
IV. ANNUITY PROVISIONS
-----------------------------------------------------------------------------
4.01 Choices to be Made: The Certificate Holder may tell Aetna
to apply any portion of the Adjusted
Current Value (minus any premium tax)
for an Annuity under option 1, 2 or 3
(see 4.04). The first Annuity payment
may not be earlier than twelve months
after the Purchase Payment. At least 30
days prior to the Annuity Date, the
Certificate Holder must tell Aetna
which Annuity option is elected.
Annuity payments will be made monthly,
unless the Certificate Holder elects
otherwise in writing.
In lieu of the election of an Annuity,
the Certificate Holder may elect a lump
sum payment.
The Annuity purchase rate for the
option chosen reflects the Minimum
Guaranteed Interest Rate (see Contract
Schedule II), but may reflect a higher
interest rate.
4.02 Terms of Annuity Options (a) When payments start, the age of
the Annuitant plus the number of
years for which payments are
guaranteed must not exceed 95.
(b) An Annuity option may not be
elected if the first payment would
be less than $50 or if the total
payments in a year would be less
than $250 (less if required by
state law). Aetna reserves the
right to increase the minimum
first Annuity payment amount and
the annual minimum Annuity payment
amount based upon increases
reflected in the Consumer Price
Index-Urban, (CPI-U) since July 1,
1993.
(c) If an Annuity under option 1, 2 or
3 is chosen and a larger payment
would result from applying the
Surrender Value to a current Aetna
single premium immediate Annuity,
Aetna will make the larger
payment.
(d) For purposes of calculating the
guaranteed first payment of an
Annuity, the Annuitant's and
second Annuitant's adjusted age
will be used. The Annuitant's and
second Annuitant's adjusted age is
his or her age as of the birthday
closest to the Annuity
commencement date reduced by one
year for Annuity commencement
dates occurring during the period
of time through December 31, 1999.
G2-MGA-95 17
4.02 Terms of Annuity Options The Annuitant's and second
(Cont'd) Annuitant's age will be reduced by
two years for Annuity commencement
dates occurring during the period
of time from January 1, 2000
through December 31, 2009. The
Annuitant's and second Annuitant's
age will be reduced by one
additional year for Annuity
commencement dates occurring in
each succeeding decade.
The Annuity purchase rates for
options 2 and 3 are based on
mortality from 1983 Table a.
(e) Once elected, an Annuity option
may not be revoked and Annuity
payments cannot be commuted to a
lump sum.
4.03 Death of Annuitant/ If the Annuitant dies after Annuity
Beneficiary: payments have begun, the death benefit,
if any, will be payable to the
Beneficiary as specified in the Annuity
option elected. Death benefits will be
paid at least as rapidly as under the
method of distribution in effect at the
Annuitant's death.
If the Certificate Holder who is not
the Annuitant dies after Annuity
payments have begun, any remaining
payments under the Annuity option
elected will be made to the Beneficiary
at least as rapidly as under the method
of distribution in effect at the
Certificate Holder's death.
If the Account is held by joint
Certificate Holders, the survivor will
be deemed the designated Beneficiary
and any other Beneficiary on record
will be treated as the contingent
Beneficiary.
Aetna will require proof of death.
4.04 Annuity Options: Option 1 -- Payments for a Stated
Period of Time -- An Annuity will be
paid for the number of years chosen.
The number of years must be at least 10
and not more than 30.
If a nonspouse Beneficiary elects this
option at the death of the Certificate
Holder, the period selected may not
Page 15 of 17
extend beyond the Beneficiary's life
expectancy.
Option 2 -- Life Income -- An Annuity
will be paid for the life of the
Annuitant. If also chosen, Aetna will
guarantee payments for 60, 120, 180, or
240 months.
Option 3 -- Life Income Based upon the
Lives of Two Annuitants -- An Annuity
will be paid during the lives of the
Annuitant and a second Annuitant.
Payments will continue until both
Annuitants have died. When this option
is chosen, one of the following choices
must be made:
(a) 100% of the payment to continue
after the first death;
(b) 66 2/3% of the payment to continue
after the first death;
G2-MGA-95 18
4.04 Annuity Options: (c) 50% of the payment to continue
(Cont'd) after the first death;
(d) Payments for a minimum of 120
months with 100% of the payment to
continue after the first death; or
(e) 100% of the payment to continue at
the death of the second Annuitant
and 50% of the payment to continue
at the death of the Annuitant.
Other Options -- Aetna may make other
options available as allowed by the
laws of the state in which the Contract
and the Certificate is delivered.
G2-MGA-95 19
OPTION 1
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
------------------------------------------------------------------------------------------------------------
| Years | Guaranteed Rate |
Monthly Payment |
Quarterly Payment |
Semi-Annual Payment |
Annual Payment |
| 5 | 3.00% | 17.91 | 53.59 | 106.78 | 211.99 |
| 6 | 3.00% | 15.14 | 45.30 | 90.27 | 179.22 |
| 7 | 3.00% | 13.16 | 39.39 | 78.49 | 155.83 |
| 8 | 3.00% | 11.68 | 34.96 | 69.66 | 138.31 |
| 9 | 3.00% | 10.53 | 31.52 | 62.81 | 124.69 |
| 10 | 3.00% | 9.61 | 28.77 | 57.33 | 113.82 |
| 11 | 3.00% | 8.86 | 26.52 | 52.85 | 104.93 |
| 12 | 3.00% | 8.24 | 24.65 | 49.13 | 97.54 |
| 13 | 3.00% | 7.71 | 23.08 | 45.98 | 91.29 |
| 14 | 3.00% | 7.26 | 21.73 | 43.29 | 85.95 |
| 15 | 3.00% | 6.87 | 20.56 | 40.96 | 81.33 |
| 16 | 3.00% | 6.53 | 19.54 | 38.93 | 77.29 |
| 17 | 3.00% | 6.23 | 18.64 | 37.14 | 73.74 |
| 18 | 3.00% | 5.96 | 17.84 | 35.56 | 70.59 |
| 19 | 3.00% | 5.73 | 17.13 | 34.14 | 67.78 |
| 20 | 3.00% | 5.51 | 16.50 | 32.87 | 65.26 |
| 21 | 3.00% | 5.32 | 15.92 | 31.72 | 62.98 |
| 22 | 3.00% | 5.15 | 15.40 | 30.68 | 60.92 |
| 23 | 3.00% | 4.99 | 14.92 | 29.74 | 59.04 |
| 24 | 3.00% | 4.84 | 14.49 | 28.88 | 57.33 |
| 25 | 3.00% | 4.71 | 14.09 | 28.08 | 55.76 |
| 26 | 3.00% | 4.59 | 13.73 | 27.36 | 54.31 |
| 27 | 3.00% | 4.47 | 13.39 | 26.68 | 52.97 |
| 28 | 3.00% | 4.37 | 13.08 | 26.06 | 51.74 |
| 29 | 3.00% | 4.27 | 12.79 | 25.49 | 50.60 |
| 30 | 3.00% | 4.18 | 12.52 | 24.95 | 49.53 |
| G2-MGA-95 | 20 | |||||
| OPTION 2 | ||||||
| Life Income | ||||||
| Amount of First Monthly Payment for Each $1,000 | ||||||
| After Deduction of any Charge for Premium Taxes | ||||||
| Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0% | ||||||
| Payments Guaranteed for a Stated Period of Months | ||||||
| ------------------------------------------------------------------------------------------------------------ | ||||||
| Adjusted | None | 60 | 120 | 180 | 240 | |
| Age of | ||||||
| Annuitant | ||||||
| ------------------------------------------------------------------------------------------------------------ | ||||||
| 50 | $ 4.05 | $ 4.05 | $ 4.03 | $ 3.99 | $ 3.93 | |
| 51 | 4.12 | 4.11 | 4.09 | 4.05 | 3.99 | |
| 52 | 4.19 | 4.19 | 4.16 | 4.11 | 4.04 | |
| 53 | 4.27 | 4.26 | 4.23 | 4.18 | 4.10 | |
| 54 | 4.35 | 4.34 | 4.31 | 4.25 | 4.16 | |
| 55 | 4.44 | 4.42 | 4.39 | 4.32 | 4.22 | |
| 56 | 4.53 | 4.51 | 4.47 | 4.40 | 4.29 | |
| 57 | 4.62 | 4.61 | 4.56 | 4.48 | 4.35 | |
| 58 | 4.72 | 4.71 | 4.65 | 4.56 | 4.42 | |
| 59 | 4.83 | 4.81 | 4.75 | 4.64 | 4.49 | |
| 60 | 4.95 | 4.93 | 4.86 | 4.73 | 4.55 | |
| 61 | 5.07 | 5.05 | 4.97 | 4.83 | 4.62 | |
| 62 | 5.20 | 5.17 | 5.08 | 4.92 | 4.69 | |
| 63 | 5.34 | 5.31 | 5.20 | 5.02 | 4.76 | |
| 64 | 5.49 | 5.45 | 5.33 | 5.12 | 4.83 | |
| 65 | 5.65 | 5.61 | 5.47 | 5.22 | 4.89 | |
| 66 | 5.82 | 5.77 | 5.61 | 5.33 | 4.96 | |
| 67 | 6.01 | 5.94 | 5.75 | 5.44 | 5.02 | |
| 68 | 6.20 | 6.13 | 5.91 | 5.54 | 5.08 | |
| 69 | 6.41 | 6.33 | 6.07 | 5.65 | 5.14 | |
| 70 | 6.64 | 6.54 | 6.23 | 5.76 | 5.19 | |
| 71 | 6.88 | 6.76 | 6.41 | 5.86 | 5.24 | |
| 72 | 7.14 | 7.00 | 6.59 | 5.97 | 5.28 | |
| 73 | 7.43 | 7.26 | 6.77 | 6.06 | 5.32 | |
| 74 | 7.73 | 7.53 | 6.96 | 6.16 | 5.35 | |
| 75 | 8.06 | 7.82 | 7.14 | 6.25 | 5.38 | |
| ------------------------------------------------------------------------------------------------------------ | ||||||
| Rates are based on mortality from 1983 Table a. The rates do not differ by sex. | ||||||
| Rates for ages not shown will be provided on request and will be computed | ||||||
| on a basis consistent with the rates in the above tables. | ||||||
| G2-MGA-95 | 21 | |||||
| OPTION 3 | ||||||
| Life Income for Two Payees | ||||||
| Amount of First Monthly Payment for Each $1,000 | ||||||
| After Deduction of any Charge for Premium Taxes | ||||||
| Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0% | ||||||
| ------------------------------------------------------------------------------------------------------------ | ||||||
| Adjusted Ages | ||||||
| ------------------------------- | ||||||
| Annuitant | Second | Option 3a | Option 3b | Option 3c | Option 3d | Option 3e |
| Annuitant | ||||||
| ------------------------------------------------------------------------------------------------------------ | ||||||
| <S> | <C> | <C> | <C> | <C> | <C> | <C> |
| 55 | 50 | $ 3.69 | $ 4.05 | $ 4.27 | $ 3.69 | $ 4.03 |
| 55 | 55 | 3.88 | 4.25 | 4.47 | 3.87 | 4.14 |
| 55 | 60 | 3.99 | 4.44 | 4.71 | 3.98 | 4.42 |
| 60 | 55 | 3.99 | 4.44 | 4.71 | 3.98 | 4.42 |
Page 17 of 17
| 60 | 60 | 4.24 | 4.71 | 4.99 | 4.23 | 4.57 |
| 60 | 65 | 4.38 | 4.97 | 5.32 | 4.38 | 4.93 |
| 65 | 60 | 4.38 | 4.97 | 5.32 | 4.38 | 4.93 |
| 65 | 65 | 4.72 | 5.33 | 5.70 | 4.71 | 5.14 |
| 65 | 70 | 4.93 | 5.68 | 6.15 | 4.91 | 5.66 |
| 70 | 65 | 4.93 | 5.68 | 6.15 | 4.91 | 5.66 |
| 70 | 70 | 5.40 | 6.21 | 6.70 | 5.36 | 5.96 |
| 70 | 75 | 5.69 | 6.68 | 7.32 | 5.62 | 6.67 |
| 75 | 70 | 5.69 | 6.68 | 7.32 | 5.62 | 6.67 |
| 75 | 75 | 6.37 | 7.45 | 8.15 | 6.23 | 7.12 |
| 75 | 80 | 6.78 | 8.11 | 8.99 | 6.54 | 8.13 |
| ------------------------------------------------------------------------------------------------------------ | ||||||
| Rates are based on mortality from 1983 Table a. The rates do not differ by sex. | ||||||
| Rates for ages not shown will be provided on request and will be computed | ||||||
| on a basis consistent with the rates in the above tables. | ||||||
| G2-MGA-95 | 22 | |||||
| [AETNA LOGO] | ||||||
| Aetna Insurance Company of America | ||||||
| Home Office: 151 Farmington Avenue | ||||||
| Hartford, Connecticut 06156 | ||||||
| (800) 531-4547 | ||||||
| Group Single Premium Modified Guaranteed Deferred Annuity Contract | ||||||
| Nonparticipating | ||||||
| THIS CONTRACT | CONTAINS A MARKET VALUE ADJUSTMENT | FORMULA. | APPLICATION OF A | |||
| MARKET VALUE | ADJUSTMENT | MAY RESULT IN EITHER AN INCREASE OR DECREASE IN THE | ||||
| CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT APPLY TO A | ||||||
| GUARANTEED PERIOD AT THE TIME OF ITS MATURITY. | ||||||
| G2-MGA-95 | ||||||
Exhibit 16(4)(b): Individual Annuity Contract (Form No. I2-MGA-95)
[AETNA LOGO]
Aetna Insurance Company of America
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
| (800) 531-4547 | |
| A STOCK COMPANY |
| Aetna Insurance Company of America, herein called Aetna, agrees |
| to pay the benefits stated in this Contract. |
| Specifications |
| ------------------------------------------------------------------------ |
| Plan AETNA MULTI-RATE ANNUITY |
| ------------------------------------------------------------------------ |
| Type of Plan SINGLE PREMIUM MODIFIED GUARANTEED DEFERRED ANNUITY |
| ------------------------------------------------------------------------ |
| Contract Holder(s) ANY INDIVIDUAL |
| ------------------------------------------------------------------------ |
| Contract No. SPECIMEN |
| ------------------------------------------------------------------------ |
| Effective Date DECEMBER 1, 1995 |
| ------------------------------------------------------------------------ |
| This Contract is Delivered in YOUR STATE and is Subject |
| to the Laws of that Jurisdiction |
| RIGHT TO CANCEL |
| ------------------------------------------------------------------------ |
| The Contract Holder may cancel this Contract within 10 days of receiving it by |
returning this Contract along with a written notice to Aetna at the above
address or to the agent from whom it was purchased. Within 7 days after it
receives the notice of cancellation and this Contract at its Home Office,
Aetna will return the entire consideration paid.
Signed at the Home Office on the Effective Date.
/s/Dan Kearney /s/ Marie McKeon
President Secretary
Individual Single Premium Modified Guaranteed Deferred Annuity Contract
Nonparticipating
THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA. APPLICATION OF A
MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR DECREASE IN THE
CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT APPLY TO A
GUARANTEED PERIOD AT THE TIME OF ITS MATURITY.
I2-MGA-95
Specifications
-----------------------------------------------------------------------------
Guaranteed There is a guaranteed interest rate for the Purchase
Interest Rate Payment held in the AMG Account. (See Contract
Schedule I).
-----------------------------------------------------------------------------
Deduction from The Purchase Payment may be subject to a deduction for
Purchase premium taxes, if applicable. (See 3.01.)
Payment
-----------------------------------------------------------------------------
Surrender There may be a charge deducted upon surrender. (See
Fee Contract Schedule 1).
This Contract is a legal contract and constitutes the entire legal
relationship between Aetna and the Contract Holder.
READ THIS CONTRACT CAREFULLY. This Contract sets forth, in detail, all of the
rights and obligations of both you and Aetna. IT IS THEREFORE IMPORTANT THAT
YOU READ THIS CONTRACT CAREFULLY.
2
I2-MGA-95
Contract Schedule I
Accumulation Period
AICA Modified Guaranteed Account (AMG Account)
-----------------------------------------------------------------------------
| Minimum Guaranteed | [3.0%] | |
| Interest Rate: | ||
| (effective annual rate of return) | ||
| Maintenance Fee: | The annual Maintenance Fee is [$0.] [If | |
| the Current Value is [$50,000] or more | ||
| on the date the Maintenance Fee is to | ||
| be deducted, the Maintenance Fee is | ||
| $0.] | ||
| Annuity Date: | The Annuity Date will be the later of | |
| the date the Annuitant reaches age [85] | ||
| or the [10th] anniversary of the | ||
| Purchase Payment. | ||
| Minimum Purchase | [$10,000.] | |
| Payment: | ||
| Maximum Purchase | Purchase Payments exceeding | |
| Payment: | [$1,000,000] must be approved by Aetna. | |
| Minimum Guaranteed Period | [$1,000.] | |
| Allocation Amount: | ||
| Maximum Age of | [90.] If there are joint Contract | |
| Contract Holder at issue: | Holders, the age of the oldest Contract | |
| Holder cannot exceed [90.] | ||
| Surrender Fee: | Length of Time from Surrender Fee Contract Effective (Percentage of Date (Years) Net Purchase Payment Withdrawn) | |
| Less than 1 year | 7% | |
| 1 year but less than 2 | 7% | |
| 2 years but less than 3 | 6% | |
| 3 years but less than 4 | 6% | |
| 4 years but less than 5 | 5% | |
| 5 years but less than 6 | 4% | |
| 6 years but less than 7 | 2% | |
| 7 years or more | 0% | |
| After seven years have elapsed from the | ||
| contract effective date, the Surrender | ||
| Fee will no longer be assessed. | ||
| Special Withdrawal: | The percentage may not be greater | |
| than [10%]. | ||
| Systematic Withdrawal | The specified payment or specified | |
| Option (SWO): | percentage may not be greater than [10%]. | |
See 1. GENERAL DEFINITIONS for explanations.
3
I2-MGA-95
Contract Schedule II
Annuity Period
Fixed Annuity ------------------------------------------------------------------------------
| Minimum Guaranteed | [3.0%] |
| Interest Rate | |
| (effective annual rate of | |
| return): |
See 1. GENERAL DEFINITIONS for explanations.
4
I2-MGA-95
TABLE OF CONTENTS
Page
| I. GENERAL DEFINITIONS | |
| ------------------------------------------------------------------------ | |
| 1.01 | Accumulation Period | 7 |
| 1.02 | Adjusted Current Value | 7 |
| 1.03 | Annuitant | 7 |
| 1.04 | Annuity | 7 |
| 1.05 | Annuity Date | 7 |
| 1.06 | Beneficiary | 7 |
| 1.07 | Code | 7 |
| 1.08 | Contract | 7 |
| 1.09 | Contract Holder | 7 |
| 1.10 | Current Value | 7 |
| 1.11 | Deposit Period | 7 |
| 1.12 | Entire Contract | 7 |
| 1.13 | Fixed Annuity | 7 |
| 1.14 | General Account | 8 |
| 1.15 | Guaranteed Rates -- AMG Account | 8 |
| 1.16 | Guaranteed Period | 8 |
| 1.17 | Guaranteed Period Groups | 8 |
| 1.18 | Maintenance Fee | 8 |
| 1.19 | AICA Modified Guaranteed Account (AMG Account) | 8 |
| 1.20 | Market Value Adjustment (MVA) | 9 |
| 1.21 | Matured Period Value | 9 |
| 1.22 | Maturity Date | 9 |
| 1.23 | Net Purchase Payment | 9 |
| 1.24 | Nonunitized Separate Account | 9 |
| 1.25 | Purchase Payment | 9 |
| 1.26 | Reinvestment | 9 |
| 1.27 | Surrender Value | 10 |
| 5 | ||
| I2-MGA-95 | ||
| II. GENERAL PROVISIONS | |
| ------------------------------------------------------------------------ | |
| 2.01 | Change of Contract | 10 |
| 2.02 | Nonparticipating Contract | 10 |
| 2.03 | Payments and Elections | 10 |
| 2.04 | State Laws | 10 |
| 2.05 | Control of Contract | 10 |
| 2.06 | Designation of Beneficiary | 11 |
| 2.07 | Misstatements and Adjustments | 11 |
| 2.08 | Incontestability | 11 |
| III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS | |
| ------------------------------------------------------------------------ | |
3.01 Net Purchase Payment 11
| 3.02 | Market Value Adjustment | 11 |
| 3.03 | Notice to the Contract Holder | 12 |
| 3.04 | Loans | 12 |
| 3.05 | Systematic Withdrawal Option (SWO) | 13 |
| 3.06 | Death Benefit Amount | 14 |
| 3.07 | Death Benefit Options available to Beneficiary | 15 |
| 3.08 | Liquidation of Surrender Value | 16 |
| 3.09 | Surrender Fee | 16 |
| 3.10 | Payment of Surrender Value | 16 |
| 3.11 | Payment of Adjusted Current Value | 17 |
| IV. | ANNUITY PROVISIONS |
----------------------------------------------------------------------
| 4.01 | Choices to be Made | 17 |
| 4.02 | Terms of Annuity Options | 17 |
| 4.03 | Death of Annuitant/ Beneficiary | 18 |
| 4.04 | Annuity Options | 18 |
6
I2-MGA-95
| I. |
GENERAL DEFINITIONS |
| ------------------------------------------------------------------------ |
| 1.01 | Accumulation Period: | The period during which the Net | |
| Purchase Payment is applied to the | |||
| Contract to provide future Annuity | |||
| payment(s). | |||
| 1.02 | Adjusted Current Value: | The Current Value of a Contract plus or | |
| minus any aggregate AMG Account MVA, if | |||
| applicable. (see 1.20) | |||
| 1.03 | Annuitant: | The person named by the Contract Holder | |
| whose life is measured for purposes of | |||
| the guaranteed death benefit and the | |||
| duration of Annuity payments under this | |||
| Contract. Subject to Aetna's approval, | |||
| the Annuitant may be changed by the | |||
| Contract Holder by notifying Aetna in | |||
| writing prior to the Annuity Date of | |||
| this Contract. | |||
| 1.04 | Annuity: | Payment of an income: | |
| (a) | For the life of one or two | ||
| persons; | |||
| (b) | For a stated period; or | ||
| (c) | For some combination of (a) | ||
| and (b). | |||
| 1.05 | Annuity Date: | The date on which Annuity payments | |
| begin under an Annuity option elected | |||
| by the Contract Holder. (see 4.01). The | |||
| Annuity Date is shown on Contract | |||
| Schedule I. The Contract Holder may | |||
| change this date by notifying Aetna at | |||
| least 30 days prior to the Annuity | |||
| Date. | |||
| 1.06 | Beneficiary: | The person(s) entitled to receive death | |
| benefits under the terms of this | |||
| Contract. | |||
| 1.07 | Code: | The Internal Revenue Code of 1986, as | |
| it may be amended from time to time. | |||
| 1.08 | Contract: | This agreement between Aetna and the | |
| Contract Holder. | |||
| 1.09 |
Contract Holder: |
| 1.10 |
Current Value: |
| 1.11 |
Deposit Period: |
| 1.12 |
Entire Contract: |
| 1.13 |
Fixed Annuity: |
I2-MGA-95
| 1.14 |
General Account: |
| 1.15 |
Guaranteed Rates -- AMG Account: |
1.16 Guaranteed Period:
| 1.17 |
Guaranteed Period Groups: |
7
The entity to which the Contract is
issued. Joint Contract Holders must be
spouses.
The Net Purchase Payment plus any
interest credited; less all Maintenance
Fees deducted, any amounts surrendered
and any amounts applied to an Annuity.
A calendar week, a calendar month, a
calendar quarter, or any other period
of time specified by Aetna during which
the Net Purchase Payment and
Reinvestments are accepted into the AMG
Account for one or more Guaranteed
Periods. Aetna reserves the right to
extend the Deposit Period.
The Contract, all attached pages and
any subsequent endorsements make up the
Entire Contract.
An Annuity with payments that do not
vary in amount based on investment
performance.
The account holding the assets of
Aetna, other than those assets held in
Aetna's separate accounts.
Aetna will declare the interest rate
applicable for each Guaranteed Period
at the start of the Deposit Period for
that applicable Guaranteed Period. The
rate(s) are guaranteed by Aetna for
that Deposit Period and the ensuing
Guaranteed Period(s). The Guaranteed
Rates are effective annual rates of
return. That is, interest is credited
daily at a rate that will produce the
Guaranteed Interest Rate over the
period of a year. No Guaranteed Rate
will ever be less than the Minimum
Guaranteed Interest Rate shown on
Contract Schedule I.
For Guaranteed Periods of one year or
less, one Guaranteed Rate is credited
for the full Guaranteed Period. For
longer Guaranteed Periods, an initial
Guaranteed Rate is credited from the
date of deposit to the end of a
specified period within the Guaranteed
Period. There may be different
Guaranteed Rate(s) declared at the
beginning of the Deposit Period for
subsequent specified time intervals
throughout the Guaranteed Period.
The period of time for which Guaranteed
Rates are guaranteed on the Net
Purchase Payment and Reinvestments made
during a current Deposit Period. Such
period begins on the day following the
close of the Deposit Period and ends on
the designated Maturity Date.
Guaranteed Periods are offered at
Aetna's discretion for various lengths
of time ranging up to and including
twenty years.
During a Deposit Period, Aetna may make
available any number of Guaranteed
Periods. The Contract Holder may
allocate the Net Purchase Payment or
Reinvestment into any or all of the
available Guaranteed Periods.
All Guaranteed Periods with the same
length of time from the close of the
Deposit Period until the designated
| 1.18 |
Maintenance Fee: |
| 1.19 |
AICA Modified Guaranteed Account (AMG Account): |
I2-MGA-95
1.20 Market Value Adjustment (MVA):
| 1.21 |
Matured Period Value: |
| 1.22 |
Maturity Date: |
| 1.23 |
Net Purchase Payment: |
1.24 Nonunitized Separate Account:
| 1.25 |
Purchase Payment: |
| 1.26 |
Reinvestment: |
Maturity Date.
The Maintenance Fee, if any (see
Contract Schedule I), will be deducted
during the Accumulation Period on each
anniversary of the date the Contract is
established and upon surrender of the
entire Contract.
An accumulation option where Aetna
guarantees rate(s) of interest for
specified periods of time. All assets
of Aetna, including amounts in the
Nonunitized Separate Account, are
available to meet the guarantees under
the AMG Account.
8
An adjustment that may apply to the
amount withdrawn from a Guaranteed
Period prior to the end of that
Guaranteed Period. The adjustment
reflects the change in the value of the
investment due to changes in interest
rates since the date of deposit and is
computed using the formula given in
3.02. The adjustment is expressed as a
percentage or a factor of each dollar
being withdrawn.
The amount payable on Guaranteed
Period's Maturity Date.
The last day of a Guaranteed Period.
The Purchase Payment less premium
taxes, as applicable.
A separate account set up by Aetna
under Title 38, Section 38a-433, of the
Connecticut General Statutes, that
holds assets for AMG Account Guaranteed
Periods. There are no discrete units
for the AMG Account. The Contract
Holder does not participate in the
investment gain or loss from the assets
held in the Nonunitized Separate
Account. Such gain or loss is borne
entirely by Aetna. The assets held in
the AMG Account may be chargeable with
liabilities arising out of any other
business of Aetna.
Payment accepted by Aetna at its Home
Office. Aetna reserves the right to
refuse to accept any Purchase Payment
at any time for any reason.
Aetna will notify the Contract Holder
of the approaching Maturity Date at
least 18 calendar days prior to the end
of any Guaranteed Period. If no
specific direction is given by the
Contract Holder prior to the Maturity
Date, each Matured Period Value will be
reinvested on the Maturity Date for a
Guaranteed Period of the same duration.
If a Guaranteed Period of the same
duration is unavailable, each Matured
Period Value will automatically be
reinvested on the Maturity Date for the
next shortest Guaranteed Period
available. If no shorter Guaranteed
Period is available, the next longer
Guaranteed Period will be used. Aetna
will mail a confirmation statement to
the Contract Holder the next business
day after the Maturity Date.
At any time prior to the Maturity Date,
the Contract Holder may request in
writing a reinvestment of the Matured
| Period Value in a different Guaranteed | |||
| Period(s) or a surrender of all or a | |||
| part of the Matured Period Value | |||
| without an MVA or Surrender Fee. Such | |||
| request will be executed on the | |||
| Maturity Date If reinvesting in a | |||
| different Guaranteed Period(s), all or | |||
| part of the Matured Period Value will | |||
| be reinvested in the elected Guaranteed | |||
| Period(s) at the then prevailing | |||
| rate(s). This provision only applies to | |||
| a written request from the Contract | |||
| Holder received at Aetna's Home Office | |||
| in good order at least five (5) days | |||
| prior to the Maturity Date. 1.27 | |||
| Surrender Value: The amount payable by | |||
| Aetna upon the surrender of all or any | |||
| portion of the Contract. | |||
| 9 | |||
| I2-MGA-95 | |||
| 1.27 | Surrender Value: | The amount payable by Aetna upon the | |
| surrender of all or any portion of the | |||
| Contract. | |||
| II. | GENERAL PROVISIONS | ||
------------------------------------------------------------------------
| 2.01 | Change of Contract: | Only an authorized officer of Aetna may |
| change the terms of this Contract. | ||
| Aetna reserves the right to modify this | ||
| Contract to meet the requirements of | ||
| applicable state and federal laws or | ||
| regulations. Aetna will notify the | ||
| Contract Holder in writing of any | ||
| changes. | ||
| 2.02 | Nonparticipating Contract: | Contract Holders or Beneficiaries will |
| not have a right to share in the | ||
| earnings of Aetna. | ||
| 2.03 | Payments and Elections: | While the Contract Holder is living, |
| Aetna will pay any Annuity payments as | ||
| and when due. After the Contract | ||
| Holder's death, or at the death of the | ||
| first Contract Holder if the Contract | ||
| is owned jointly, any Annuity payments | ||
| will be paid in accordance with 4.03. | ||
| Aetna will make any other payments | ||
| within seven (7) calendar days of | ||
| receipt of a written request for | ||
| payment, which is in good order, at its | ||
| Home Office, except as provided in | ||
| 3.10. | ||
| 2.04 | State Laws: | The Contract complies with the laws of |
| the state in which it is delivered. Any | ||
| surrender, death, or Annuity payments | ||
| are equal to or greater than the | ||
| minimum required by such laws. Annuity | ||
| tables for legal reserve valuation | ||
| shall be as required by state law. Such | ||
| tables may be different from Annuity | ||
| tables used to determine Annuity | ||
| payments. | ||
| 2.05 | Control of Contract: | This is a Contract between the Contract |
| Holder and Aetna. The Contract Holder | ||
| has all rights, title and interest in | ||
| amounts held in this Contract. | ||
| Choices made under this Contract must | ||
| be in writing. If the Contract is owned | ||
| jointly, both Contract Holders must | ||
| authorize any choices in writing. Until | ||
| receipt of such choices at Aetna's Home | ||
| Office, Aetna may rely on any previous | ||
| choices made. | ||
| The Contract is not subject to the | ||
| claims of any creditors of the Contract | ||
| Holder, except to the extent permitted | ||
| by law. The Contract Holder may assign | ||
or transfer his or her rights under the
Contract. Aetna reserves the right not
to accept assignment or transfer to a
nonnatural person. Any assignment or
transfer made must be submitted to
Aetna's Home Office in writing and will
not be effective until accepted by
Aetna. Aetna assumes no responsibility
for the validity of any assignment.
10
| I2-MGA-95 | ||
| 2.06 | Designation of Beneficiary: | The Contract Holder shall name his or |
| her Beneficiary. The Beneficiary may be | ||
| changed at any time. Changes to a | ||
| Beneficiary must be submitted to | ||
| Aetna's Home Office in writing and will | ||
| not be effective until received and | ||
| recorded by Aetna. | ||
| 2.07 | Misstatements and Adjustments: | If Aetna finds the age of any Annuitant |
| to be misstated, the correct facts will | ||
| be used to adjust payments. | ||
| 2.08 | Incontestability: | Aetna will not contest this Contract |
| from its effective date. | ||
| III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS | |
| ------------------------------------------------------------------------ | |
| 3.01 | Net Purchase Payment: | This amount is the actual Purchase | |
| Payment less any applicable premium | |||
| tax. Aetna reserves the right to deduct | |||
| any premium tax at any time from the | |||
| Purchase Payment or from the Contract | |||
| Holder's Current Value. The Contract | |||
| Holder shall tell Aetna the allocation | |||
| percentage of the Net Purchase Payment | |||
| to be applied to each of the available | |||
| Guaranteed Periods during the current | |||
| Deposit Period(s). The minimum amount | |||
| that may be allocated to any Guaranteed | |||
| Period is shown on Contract Schedule l. | |||
| 3.02 | Market Value Adjustment: | There will be an MVA for any withdrawal | |
| before the end of a Guaranteed Period | |||
| when the withdrawal is due to: | |||
| (a) | Any full or partial surrender, but | ||
| not for a partial withdrawal under | |||
| the Systematic Withdrawal Option | |||
| (see 3.05); or | |||
| (b) | Payment made to a Beneficiary as a | ||
| death benefit during the | |||
| Accumulation Period, but not | |||
| payment made within six months of | |||
| the date of the Annuitant's death | |||
| (see 3.06); or | |||
| (c) | An election of an Annuity option. | ||
| Only a positive MVA, if any, will | |||
| apply upon election of option 2 or | |||
| 3 (see 4.04). | |||
| Market value adjusted amounts will be | |||
| equal to the amount withdrawn | |||
| multiplied by the following ratio: | |||
x
---
365
(1 + i)
----------------
x
---
365
(1 + j)
Where:
i is the Deposit Period Yield
j is the Current Yield
x is the number of days remaining,
(computed from Wednesday of the week
of withdrawal) in the Guaranteed
Period.
11
| I2-MGA-95 | |||
| 3.02 | Market Value Adjustment: | The Deposit Period Yield will be | |
| (Cont'd) | determined as follows: | ||
| (a) | At the close of the last business | ||
| day of each week of the Deposit | |||
| Period, a yield will be computed | |||
| as the average of the yields on | |||
| that day of U.S. Treasury Notes | |||
| which mature in the last three | |||
| months of the Guaranteed Period. | |||
| (b) | The Deposit Period Yield is the | ||
| average of those yields for the | |||
| Deposit Period. If withdrawal is | |||
| made before the close of the | |||
| Deposit Period, it is the average | |||
| of those yields on each week | |||
| preceding withdrawal. | |||
| The Current Yield is the average of the | |||
| yields on the last business day of the | |||
| week preceding withdrawal on the same | |||
| U.S. Treasury Notes included in the | |||
| Deposit Period Yield. | |||
| In the event that no U.S. Treasury | |||
| Notes which mature in the last three | |||
| months of the Guaranteed Period exist, | |||
| Aetna reserves the right to use the | |||
| U.S. Treasury Notes that mature in the | |||
| following quarter. | |||
| 3.03 | Notice to the Contract | The Contract Holder will receive | |
| Holder: | statements at least annually from Aetna | ||
| showing the value of any amounts held | |||
| in the AMG Account. | |||
| Such values will be as of a specific | |||
| date no more than 60 days before the | |||
| date of the notice. | |||
| 3.04 | Loans: | Loans are not available under this | |
| Contract. | |||
| 12 | |||
| I2-MGA-95 | |||
| 3.05 | Systematic Withdrawal Option | The Contract Holder may elect a | |
| (SWO): | distribution option under which a | ||
| portion of the Current Value will | |||
| automatically be surrendered and | |||
| distributed each year. SWO payments | |||
| will be calculated based on the | |||
| Contract's full Current Value. The | |||
| distributed amount is withdrawn pro | |||
| rata from each Guaranteed Period(s). A | |||
| Surrender Fee will not be deducted from | |||
| any portion of the Current Value which | |||
| is paid as a distribution under SWO. | |||
| Contract Holders should consult their | |||
| tax adviser prior to requesting this | |||
| distribution option. | |||
| (a) | Amount of Distribution: The | ||
| Contract Holder may elect one of | |||
| the three payment methods | |||
| described below. | |||
| (1) Specified Payment: Payments | |||
| of a designated dollar | |||
| amount. The annual amount may | |||
| not be greater than the | |||
| percentage shown on Contract | |||
| Schedule I times the Current | |||
| Value at time of election. | |||
| This annual dollar amount | |||
| will remain constant. At its | |||
| discretion, Aetna may require | |||
| a minimum initial payment | |||
| amount; | |||
| (2) | Specified Period: Payments | ||
| which are made over a period | |||
| of time which must be at | |||
| least 10 years. The annual | |||
| amount paid each year is | |||
| calculated by dividing the | |||
| Current Value as of December | |||
| 31 of the prior year by the | |||
| number of payment years | |||
| remaining; or | |||
| (3) | Specified Percentage: | ||
| Paymentof a designated | |||
| percentage which cannot be | |||
| greater than the percentage | |||
| shown on Contract Schedule I. | |||
| The percentage may be changed | |||
| by written request. Aetna | |||
| reserves the right to limit | |||
| the number of times the | |||
| percentage may be changed. | |||
| The annual amount is | |||
| calculated by multiplying the | |||
| Current Value as of | |||
| December 31 of the year prior | |||
| to the payment by the | |||
| designated percentage. | |||
| Payments upon the Contract | |||
| Holder's or Annuitant's death will | |||
| be made to the Beneficiary in the | |||
| manner described in 3.07. | |||
| (b) | Minimum Initial Current Value: At | ||
| its discretion, Aetna may require | |||
| a minimum initial Current Value | |||
| for election of this option. If | |||
| after election of this option the | |||
| Current Value is insufficient to | |||
| make a scheduled SWO payment, | |||
| Aetna will distribute the entire | |||
| balance. | |||
| 13 | |||
| I2-MGA-95 | |||
| 3.05 Systematic Withdrawal Option | (c) | Date of Distribution: The Contract | |
| (SWO): (Cont'd) | Holder shall specify the initial | ||
| distribution date. As elected by | |||
| the Contract Holder, SWO payments | |||
| will be made on a monthly or | |||
| quarterly basis unless Aetna | |||
| allows otherwise. If SWO payments | |||
| are made more frequently than | |||
| annually, the designated annual | |||
| amount is divided by the number of | |||
| payments due each calendar year. | |||
| Subsequent distributions will be | |||
| made on the 15th of any month or | |||
| such other date as Aetna may | |||
| designate or allow. | |||
| (d) | Election and Revocation: SWO may | ||
| be elected by submitting a | |||
| completed and signed election form | |||
| to Aetna's Home Office. Aetna | |||
| reserves the right to establish | |||
| the date when SWO may first be | |||
| elected by a Contract Holder. Once | |||
| elected, this option may be | |||
| revoked by the Contract Holder or | |||
| spousal Beneficiary, if elected | |||
| after the Contract Holder's death, | |||
| by submitting a written request to | |||
| Aetna at its Home Office. Any | |||
| revocation will apply only to | |||
| amounts not yet paid. SWO may be | |||
| elected only once by the Contract | |||
| Holder or by the spousal | ||
| Beneficiary. | ||
| 3.06 Death Benefit Amount: | If the Contract Holder or Annuitant | |
| dies before Annuity payments start, the | ||
| Beneficiary is entitled to a death | ||
| benefit under the Contract. If the | ||
| Contract is owned jointly, the death | ||
| benefit is paid at the first death of | ||
| either of the joint Contract Holders. | ||
| If the Contract is held by joint | ||
| Contract Holders, the survivor will be | ||
| deemed the designated Beneficiary and | ||
| any other Beneficiary on record will be | ||
| treated as the contingent Beneficiary. | ||
| If the Contract Holder is a nonnatural | ||
| person, the death benefit will be | ||
| payable at the death of the Annuitant. | ||
| If paid within 6 months of the date of | ||
| the Annuitant's death, the death | ||
| benefit will be the Current Value of | ||
| the Contract. Otherwise, the death | ||
| benefit will be the Adjusted Current | ||
| Value determined as of the claim date. | ||
| The claim date is the date when proof | ||
| of death and the Beneficiary's claim | ||
| are received in good order at Aetna's | ||
| Home Office. | ||
| When the Contract Holder dies and the | ||
| Contract Holder is not the Annuitant, | ||
| the death benefit payable will be | ||
| subject to a Surrender Fee, if | ||
| applicable. | ||
| 14 | ||
| I2-MGA-95 | ||
| 3.07 Death Benefit Options | Prior to any election, or until amounts | |
| available to Beneficiary: | must be otherwise distributed under | |
| this section, the Current Value will be | ||
| retained in the Contract. The following | ||
| options are available to the | ||
| Beneficiary: | ||
| (a) When the Contract Holder dies or | ||
| if the Contract Holder is not a | ||
| natural person, when the Annuitant | ||
| dies: | ||
| (1) | If the Beneficiary is the | |
| Contract Holder's surviving | ||
| spouse, the Beneficiary may | ||
| exercise all Contract Holder | ||
| rights under the Contract and | ||
| continue in the Accumulation | ||
| Period, or may elect (i) or | ||
| (ii) below. Distributions | ||
| from the Contract are not | ||
| required until the spousal | ||
| Beneficiary's death. The | ||
| spousal Beneficiary may elect | ||
| to: | ||
| (i) Apply some or all of the | ||
| death benefit amount to | ||
| an Annuity option 1, 2 | ||
| or 3 (see 4.04); or | ||
| (ii) Receive, at any time, a | ||
| lump sum payment equal | ||
| to the death benefit | ||
| amount. | ||
| (2) | If the Beneficiary is an | |
| individual who is not the | ||
| Contract Holder's surviving | ||
| spouse, then options (i) or | ||
| (ii) under (1) above apply. | ||
| Any portion of the death | ||
| benefit amount not applied to | ||
| Annuity option 1, 2 or 3 | ||
| within one year of the | ||
| Contract Holder's death, must | ||
| be distributed within five | ||
| years of the date of death. | ||||
| (3) | If the Beneficiary is not a | |||
| natural person, then only | ||||
| option (ii) under (1) above | ||||
| applies. | ||||
| (4) | If no Beneficiary has been | |||
| designated, a lump sum | ||||
| payment equal to the death | ||||
| benefit amount will be made | ||||
| to the Contract Holder's | ||||
| estate. | ||||
| (b) | If the Contract Holder is a | |||
| natural person but is not the | ||||
| Annuitant, and the Annuitant dies, | ||||
| the Beneficiary may elect either | ||||
| to apply the death benefit amount | ||||
| to Annuity option 1, 2 or 3 within | ||||
| 60 days of the Annuitant's date of | ||||
| death, or to receive a lump sum | ||||
| payment. | ||||
| 15 | ||||
| I2-MGA-95 | ||||
| 3.08 | Liquidation of Surrender | All or any portion of the Contract's | ||
| Value: | Current Value may be surrendered at any | |||
| time prior to the Annuity Date. | ||||
| Surrender requests can be submitted as | ||||
| a percentage of the Contract value or | ||||
| as a specific dollar amount. Net | ||||
| Purchase Payment amounts are withdrawn | ||||
| first, and then the excess value, if | ||||
| any. For any partial surrender, amounts | ||||
| are withdrawn on a pro rata basis from | ||||
| the Guaranteed Period(s) Groups of the | ||||
| AMG Account in which the Current Value | ||||
| is invested. Within a Guaranteed Period | ||||
| Group, the amount to be surrendered | ||||
| will be withdrawn first from the oldest | ||||
| Deposit Period, then from the next | ||||
| oldest, and so on until the amount | ||||
| requested is satisfied. | ||||
| After deduction of the Maintenance Fee | ||||
| and any Premium Tax, if applicable, the | ||||
| surrendered amount shall be reduced by | ||||
| a Surrender Fee, if applicable. An MVA | ||||
| may apply to amounts surrendered. | ||||
| 3.09 | Surrender Fee: | The Surrender Fee only applies to the | ||
| Net Purchase Payment portion | ||||
| surrendered and varies according to the | ||||
| elapsed time from the Contract | ||||
| effective date (see Contract Schedule | ||||
| I). | ||||
| No Surrender Fee is deducted from any | ||||
| portion of the Current Value which is | ||||
| paid: | ||||
| (a) | To a Beneficiary due to the | |||
| Annuitant's death before Annuity | ||||
| payments start (see 3.06); | ||||
| (b) | As a premium for an Annuity option | |||
| 1, 2 or 3 under this Contract (see | ||||
| 4.04); | ||||
| (c) | As a distribution under the SWO | |||
| provision (see 3.05); | ||||
| (d) | At least 12 months after the date | |||
| of the Purchase Payment, in an | ||||
| amount equal to or less than the | ||||
| special withdrawal percentage | ||||
| shown on Contract Schedule l times | ||||
| the current value at the time of | ||||
| the withdrawal. This applies to | ||||
| the first surrender request, | ||||
| partial or full, in a calendar | ||||
| year. The Current Value is | ||||
| calculated as of the date the | ||||
| surrender request is received in | ||||
| good order at Aetna's Home Office. | |||
| This waiver is not available to | |||
| the Contract Holder while SWO is | |||
| in effect; | |||
| (e) | For a full surrender of the | ||
| Contract where the Current Value | |||
| is $2,500 or less and no | |||
| surrenders have been taken from | |||
| the Contract within the prior 12 | |||
| months; or | |||
| (f) | Upon withdrawal of any Matured | ||
| Period Value; or | |||
| (g) | By Aetna under 3.11. | ||
| 3.10 | Payment of Surrender Value: | Under certain emergency conditions, as | |
| allowed by law, Aetna may defer payment | |||
| for a period of up to 6 months. | |||
| 16 | |||
| I2-MGA-95 | |||
| 3.11 | Payment of Adjusted Current | Upon 90 days' written notice to the | |
| Value: | Contract Holder, Aetna will terminate | ||
| any Contract if the Current Value | |||
| becomes less than $2,500 immediately | |||
| following any partial surrender. A | |||
| Surrender Fee will not be deducted from | |||
| the Adjusted Current Value. | |||
| IV. | ANNUITY PROVISIONS | ||
| ------------------------------------------------------------------------ | |||
| 4.01 | Choices to be Made: | The Contract Holder may tell Aetna to | |
| apply any portion of the Adjusted | |||
| Current Value (minus any premium tax) | |||
| for an Annuity under option 1, 2 or 3 | |||
| (see 4.04). The first Annuity payment | |||
| may not be earlier than twelve months | |||
| after the Purchase Payment At least 30 | |||
| days prior to the Annuity Date, the | |||
| Contract Holder must tell Aetna which | |||
| Annuity option is elected. Annuity | |||
| payments will be made monthly, unless | |||
| the Contract Holder elects otherwise in | |||
| writing. In lieu of the election of an | |||
| Annuity, the Contract Holder may elect | |||
| a lump sum payment. | |||
| The Annuity purchase rate for the | |||
| option chosen reflects the Minimum | |||
| Guaranteed Interest Rate (see Contract | |||
| Schedule II), but may reflect a higher | |||
| interest rate. | |||
| 4.02 | Terms of Annuity Options: | (a) | When payments start, the age of |
| the Annuitant plus the number of | |||
| years for which payments are | |||
| guaranteed must not exceed 95. | |||
| (b) | An Annuity option may not be | ||
| elected if the first payment would | |||
| be less than $50 or if the total | |||
| payments in a year would be less | |||
| than $250 (less if required by | |||
| state law). Aetna reserves the | |||
| right to increase the minimum | |||
| first Annuity payment amount and | |||
| the annual minimum Annuity payment | |||
| amount based upon increases | |||
| reflected in the Consumer Price | |||
| Index-Urban, (CPI-U) since July 1, | |||
| 1993. | |||
| (c) | If an Annuity under option 1, 2 or | ||
| 3 is chosen and a larger payment | |||
| would result from applying the | |||
| Surrender Value to a current Aetna | |||
| single premium immediate Annuity, | |||
| Aetna will make the larger | |||
| payment. | |||
| (d) | For purposes of calculating the | ||
| guaranteed first payment of an | ||
| Annuity, the Annuitant's and | ||
| second Annuitant's adjusted age | ||
| will be used. The Annuitant's and | ||
| second Annuitant's adjusted age is | ||
| his or her age as of the birthday | ||
| closest to the Annuity | ||
| commencement date reduced by one | ||
| year for Annuity commencement | ||
| dates occurring during the period | ||
| of time through December 31, 1999. | ||
| 4.02 Terms of Annuity Options | ||
| (Cont'd) The Annuitant's and | ||
| second Annuitant's age will be | ||
| reduced by two years for Annuity | ||
| commencement dates occurring | ||
| during the period of time from | ||
| January 1, 2000 through | ||
| December 31, 2009. The Annuitant's | ||
| and second Annuitant's age will be | ||
| reduced by one additional year for | ||
| Annuity commencement dates | ||
| occurring in each succeeding | ||
| decade. The Annuity purchase rates | ||
| for options 2 and 3 are based on | ||
| mortality from 1983 Table a. | ||
| 17 | ||
| I2-MGA-95 | ||
| 4.02 | Terms of Annuity Options: | (e) Once elected, an Annuity option |
| (Cont'd) | may not be revoked and Annuity | |
| payments cannot be commuted to a | ||
| lump sum. | ||
| 4.03 | Death of Annuitant/ | If the Annuitant dies after Annuity |
| Beneficiary: | payments have begun, the death benefit, | |
| if any, will be payable to the | ||
| Beneficiary as specified in the Annuity | ||
| option elected. Death benefits will be | ||
| paid at least as rapidly as under the | ||
| method of distribution in effect at the | ||
| or Annuitant's death. | ||
| If the Contract Holder who is not the | ||
| Annuitant dies after Annuity payments | ||
| have begun, any remaining payments | ||
| under the Annuity option elected will | ||
| be made to the Beneficiary at least as | ||
| rapidly as under the method of | ||
| distribution in effect at the Contract | ||
| Holder's death. | ||
| If the Contract is held by joint | ||
| Contract Holders, the survivor will be | ||
| deemed the designated Beneficiary and | ||
| any other Beneficiary on record will be | ||
| treated as the contingent Beneficiary. | ||
| Aetna will require proof of death. | ||
| 4.04 | Annuity Options: | Option 1 -- Payments for a Stated |
| Period of Time -- An Annuity will be | ||
| paid for the number of years chosen. | ||
| The number of years must be at least 10 | ||
| and not more than 30. | ||
| If a nonspouse Beneficiary elects this | ||
| option at the death of the Contract | ||
| Holder, the period selected may not | ||
| extend beyond the Beneficiary's life | ||
| expectancy. | ||
| Option 2 -- Life Income -- An Annuity | ||
| will be paid for the life of the | ||
| Annuitant, if also chosen, Aetna will | ||
| guarantee payments for 60, 120, 180, or | ||
| 240 months. | ||
| Option 3 -- Life Income Based upon the | ||
| Lives of Two Annuitants -- An Annuity | ||
| will be paid during the lives of the | ||
| Annuitant and a second Annuitant. | ||
| Payments will continue until both | ||
| Annuitants have died. When this option | ||
| is chosen, one of the following choices | ||
must be made:
| (a) |
100% of the payment to continue after the first death; |
| (b) |
66 2/3% of the payment to continue after the first death; |
18
I2-MGA-95
| 4.04 Annuity Options: | (c) | 50% of the payment to continue |
| (Cont'd) | after the first death; | |
| (d) | Payments for a minimum of 120 | |
| months with 100% of the payment to | ||
| continue after the first death; or | ||
| (e) | 100% of the payment to continue at | |
| the death of the second Annuitant | ||
| and 50% of the payment to continue | ||
| at the death of the Annuitant. | ||
| Other Options -- Aetna may make other | ||
| options available as allowed by the | ||
| laws of the state in which the Contract | ||
| is delivered. | ||
| 19 | ||
| I2-MGA-95 | ||
OPTION 1
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
| <CAPTION> | |||||
| Guaranteed | Monthly | Quarterly | Semi-Annual | Annual | |
| Years | Rate | Payment | Payment | Payment | Payment |
| 5 | 3.00% | 17.91 | 53.59 | 106.78 | 211.99 |
| 6 | 3.00% | 15.14 | 45.30 | 90.27 | 179.22 |
| 7 | 3.00% | 13.16 | 39.39 | 78.49 | 155.83 |
| 8 | 3.00% | 11.68 | 34.96 | 69.66 | 138.31 |
| 9 | 3.00% | 10.53 | 31.52 | 62.81 | 124.69 |
| 10 | 3.00% | 9.61 | 28.77 | 57.33 | 113.82 |
| 11 | 3.00% | 8.86 | 26.52 | 52.85 | 104.93 |
| 12 | 3.00% | 8.24 | 24.65 | 49.13 | 97.54 |
| 13 | 3.00% | 7.71 | 23.08 | 45.98 | 91.29 |
| 14 | 3.00% | 7.26 | 21.73 | 43.29 | 85.95 |
| 15 | 3.00% | 6.87 | 20.56 | 40.96 | 81.33 |
| 16 | 3.00% | 6.53 | 19.54 | 38.93 | 77.29 |
| 17 | 3.00% | 6.23 | 18.64 | 37.14 | 73.74 |
| 18 | 3.00% | 5.96 | 17.84 | 35.56 | 70.59 |
| 19 | 3.00% | 5.73 | 17.13 | 34.14 | 67.78 |
| 20 | 3.00% | 5.51 | 16.50 | 32.87 | 65.26 |
| 21 | 3.00% | 5.32 | 15.92 | 31.72 | 62.98 |
| 22 | 3.00% | 5.15 | 15.40 | 30.68 | 60.92 |
| 23 | 3.00% | 4.99 | 14.92 | 29.74 | 59.04 |
| 24 | 3.00% | 4.84 | 14.49 | 28.88 | 57.33 |
| 25 | 3.00% | 4.71 | 14.09 | 28.08 | 55.76 |
| 26 | 3.00% | 4.59 | 13.73 | 27.36 | 54.31 |
| 27 | 3.00% | 4.47 | 13.39 | 26.68 | 52.97 |
| 28 | 3.00% | 4.37 | 13.08 | 26.06 | 51.74 |
| 29 | 3.00% | 4.27 | 12.79 | 25.49 | 50.60 |
| 30 | 3.00% | 4.18 | 12.52 | 24.95 | 49.53 |
| 20 | |||||
| I2-MGA-95 | |||||
| OPTION 2 | |||||
| Life Income | |||||
| Amount of First Monthly Payment for Each $1,000 | |||||
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
Payments Guaranteed for a Stated Period of Months
| Adjusted Age | |||||
| of | None | 60 | 120 | 180 | 240 |
| Annuitant | |||||
| 50 | $4.05 | $4.05 | $4.03 | $3.99 | $3.93 |
| 51 | 4.12 | 4.11 | 4.09 | 4.05 | 3.99 |
| 52 | 4.19 | 4.19 | 4.16 | 4.11 | 4.04 |
| 53 | 4.27 | 4.26 | 4.23 | 4.18 | 4.10 |
| 54 | 4.35 | 4.34 | 4.31 | 4.25 | 4.16 |
| 55 | 4.44 | 4.42 | 4.39 | 4.32 | 4.22 |
| 56 | 4.53 | 4.51 | 4.47 | 4.40 | 4.29 |
| 57 | 4.62 | 4.61 | 4.56 | 4.48 | 4.35 |
| 58 | 4.72 | 4.71 | 4.65 | 4.56 | 4.42 |
| 59 | 4.83 | 4.81 | 4.75 | 4.64 | 4.49 |
| 60 | 4.95 | 4.93 | 4.86 | 4.73 | 4.55 |
| 61 | 5.07 | 5.05 | 4.97 | 4.83 | 4.62 |
| 62 | 5.20 | 5.17 | 5.08 | 4.92 | 4.69 |
| 63 | 5.34 | 5.31 | 5.20 | 5.02 | 4.76 |
| 64 | 5.49 | 5.45 | 5.33 | 5.12 | 4.83 |
| 65 | 5.65 | 5.61 | 5.47 | 5.22 | 4.89 |
| 66 | 5.82 | 5.77 | 5.61 | 5.33 | 4.96 |
| 67 | 6.01 | 5.94 | 5.75 | 5.44 | 5.02 |
| 68 | 6.20 | 6.13 | 5.91 | 5.54 | 5.08 |
| 69 | 6.41 | 6.33 | 6.07 | 5.65 | 5.14 |
| 70 | 6.64 | 6.54 | 6.23 | 5.76 | 5.19 |
| 71 | 6.88 | 6.76 | 6.41 | 5.86 | 5.24 |
| 72 | 7.14 | 7.00 | 6.59 | 5.97 | 5.28 |
| 73 | 7.43 | 7.26 | 6.77 | 6.06 | 5.32 |
| 74 | 7.73 | 7.53 | 6.96 | 6.16 | 5.35 |
| 75 | 8.06 | 7.82 | 7.14 | 6.25 | 5.38 |
| </TABLE> | |||||
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables.
21
G2-MGA-95
OPTION 3
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
| Adjusted Ages | ||||||
| Annuitant | Second Annuitant | Option 3a | Option 3b | Option 3c | Option 3d | Option 3e |
| --------- | ---------------- | --------- | --------- | --------- | --------- | --------- |
| <S> | <C> | <C> | <C> | <C> | <C> | <C> |
| 55 | 50 | $3.69 | $4.05 | $4.27 | $3.69 | $4.03 |
| 55 | 55 | 3.88 | 4.25 | 4.47 | 3.87 | 4.14 |
| 55 | 60 | 3.99 | 4.44 | 4.71 | 3.98 | 4.42 |
| 60 | 55 | 3.99 | 4.44 | 4.71 | 3.98 | 4.42 |
| 60 | 60 | 4.24 | 4.71 | 4.99 | 4.23 | 4.57 |
| 60 | 65 | 4.38 | 4.97 | 5.32 | 4.38 | 4.93 |
| 65 | 60 | 4.38 | 4.97 | 5.32 | 4.38 | 4.93 |
| 65 | 65 | 4.72 | 5.33 | 5.70 | 4.71 | 5.14 |
| 65 | 70 | 4.93 | 5.68 | 6.15 | 4.91 | 5.66 |
| 70 | 65 | 4.93 | 5.68 | 6.15 | 4.91 | 5.66 |
| 70 | 70 | 5.40 | 6.21 | 6.70 | 5.36 | 5.96 |
| 70 | 75 | 5.69 | 6.68 | 7.32 | 5.62 | 6.67 |
| 75 | 70 | 5.69 | 6.68 | 7.32 | 5.62 | 6.67 |
| 75 | 75 | 6.37 | 7.45 | 8.15 | 6.23 | 7.12 |
| 75 | 80 | 6.78 | 8.11 | 8.99 | 6.54 | 8.13 |
| --------- | ---------------- | --------- | --------- | --------- | --------- | --------- |
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables.
22
G2-MGA-95
[AETNA LOGO]
Aetna Insurance Company of America
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
(800) 531-4547
Individual Single Premium Modified Guaranteed Deferred Annuity Contract Nonparticipating
THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA. APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT APPLY TO A GUARANTEED PERIOD AT THE TIME OF ITS MATURITY.
G2-MGA-95
Exhibit 16(4)(c): Certificate (G2CC-MGA-95) to Group Annuity Contract form No. G2-MGA-95
CERTIFICATE (G2CC-MGA-95)
------------------------------------------
Aetna Insurance Company of America
Home Office: 151 Farmington Avenue
Hartford, Connecticut 06156
(800) 531-4547
A Stock Company
Aetna Insurance Company of America, herein
called Aetna, agrees to pay the benefits
stated in this Contract.
- - --------------------------------------------------------------------------------Certificate of Group Annuity To the Certificate Holder: Coverage
Aetna certifies that coverage is in force
for you under the stated Group Annuity
Contract and Certificate numbers. All data
shown here is taken from Aetna records and
is based upon information furnished by
you.
This Certificate is a summary of the Group
Annuity Contract provisions. It replaces
any and all prior certificates, riders, or
amendments issued to you under the stated
Contract and Certificate numbers. This
Certificate is for information only and is
not a part of the Contract.
- - --------------------------------------------------------------------------------Right to Cancel You may cancel the Account evidenced by this Certificate within 10 days of receiving it, by sending a written notice to Aetna at the above address or to the agent from whom it was purchased.
Aetna will return all payments made for this Certificate within 7 days after it receives the notice of cancellation and this Certificate.
| /s/ Dan Kearney | /s/ Maria F. McKeon |
| President | Secretary |
- - --------------------------------------------------------------------------------
|
Certificate Holder(s) SPECIMEN |
Certificate No. SPECIMEN |
- - --------------------------------------------------------------------------------
|
Contract Holder E.G. ANY BROKER |
Group Annuity Contract No. SPECIMEN |
- - --------------------------------------------------------------------------------
|
Annuitant Name JOHN DOE JR. |
Type of Plan SPECIMEN |
- - --------------------------------------------------------------------------------
THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA. APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT APPLY TO A GUARANTEED PERIOD AT THE TIME OF ITS MATURITY.
| G2CC-MGA-95 |
| <PAGE> |
| Specifications |
| - - -------------------------------------------------------------------------------- |
|
Guaranteed Interest Rate |
There is a guaranteed interest rate for the Purchase Payment held in the AMG Account. (See Contract Schedule I). |
- - --------------------------------------------------------------------------------
| Deduction from | The Purchase Payment may be subject to a |
| Purchase Payment | deduction for premium taxes, if applicable. (See |
| 3.01.) |
- - --------------------------------------------------------------------------------Surrender Fee There may be a charge deducted upon surrender.
(See Contract Schedule I).
https://www.sec.gov/Archives/edgar/data/925988/0000950146-97-001786.txt 02/12/2018
| 2 | ||
| Contract Schedule I | ||
| Accumulation Period | ||
| AICA Modified Guaranteed Account (AMG Account) | ||
| - - -------------------------------------------------------------------------------- | ||
| Minimum Guaranteed | [3.0%] | |
| Interest Rate: | ||
| (effective annual rate of return) | ||
| Maintenance Fee: | The annual Maintenance Fee is [$0.] | |
| [If the Account's Current Value is | ||
| [$50,000] or more on the date the | ||
| Maintenance Fee is to be deducted, the | ||
| Maintenance Fee is $0.] | ||
| Annuity Date: | The Annuity Date will be the later of | |
| the date the Annuitant reaches age [85] | ||
| or the [10th] anniversary of the | ||
| Purchase Payment. | ||
| Minimum Purchase Payment: | [$10,000.] | |
| Maximum Purchase Payment: | Purchase Payments exceeding [$1,000,000] | |
| must be approved by Aetna. | ||
| Minimum Guaranteed Period | [$1,000.] | |
| Allocation Amount: | ||
| Maximum Age of Certificate Holder | [90.] If there are joint Certificate | |
| at Issue: | Holders, the age of the oldest | |
| Certificate Holder cannot exceed [90.] | ||
| <TABLE> | ||
| <CAPTION> | ||
| Surrender Fee: | Length of Time from | Surrender Fee |
| Certificate Effective Date | (Percentage of Net | |
| (Years) | Purchase Payment | |
| Withdrawn) | ||
| <S> | <C> | <C> |
| Less than 1 year | 7% | |
| 1 year but less than 2 | 7% | |
| 2 years but less than 3 | 6% | |
| 3 years but less than 4 | 6% | |
| 4 years but less than 5 | 5% | |
| 5 years but less than 6 | 4% | |
| 6 years but less than 7 | 2% | |
| 7 years or more | 0% | |
| After seven years have elapsed from the certificate effective date, the | ||
| Surrender Fee will no longer be assessed. | ||
| </TABLE> | ||
| Special Withdrawal: | [10%] | |
| Systematic Withdrawal Option | The specified payment or specified | |
| (SWO): | percentage may not be greater than | |
| [10%.] | ||
| See 1. GENERAL DEFINITIONS for explanations. | ||
| 3 | ||
Contract Schedule II
Annuity Period
Fixed Annuity
- - --------------------------------------------------------------------------------
| Minimum Guaranteed Interest Rate: | [3.0%] |
| (effective annual rate of return): |
See 1. GENERAL DEFINITIONS for explanations.
4
TABLE OF CONTENTS
| I. |
GENERAL DEFINITIONS |
| - |
- -------------------------------------------------------------------------------- |
| Page | ||
| 1.01 | Account | 7 |
| 1.02 | Accumulation Period | 7 |
| 1.03 | Adjusted Current Value | 7 |
| 1.04 | Annuitant | 7 |
| 1.05 | Annuity | 7 |
| 1.06 | Annuity Date | 7 |
| 1.07 | Beneficiary | 7 |
| 1.08 | Certificate Holder | 7 |
| 1.09 | Code | 7 |
| 1.10 | Contract | 7 |
| 1.11 | Contract Holder | 7 |
| 1.12 | Current Value | 8 |
| 1.13 | Deposit Period | 8 |
| 1.14 | Entire Contract | 8 |
| 1.15 | Fixed Annuity | 8 |
| 1.16 | General Account | 8 |
| 1.17 | Guaranteed Rates - AMG Account | 8 |
| 1.18 | Guaranteed Period | 8 |
| 1.19 | Guaranteed Period Groups | 8 |
| 1.20 | Maintenance Fee | 9 |
| 1.21 | AICA Modified Guaranteed Account (AMG Account) | 9 |
| 1.22 | Market Value Adjustment (MVA) | 9 |
| 1.23 | Matured Period Value | 9 |
| 1.24 | Maturity Date | 9 |
| 1.25 | Net Purchase Payment | 9 |
| 1.26 | Nonunitized Separate Account | 9 |
| 1.27 | Purchase Payment | 9 |
| 1.28 | Reinvestment | 9 |
| 1.29 | Surrender Value | 10 |
| II. |
GENERAL PROVISIONS |
| - |
- -------------------------------------------------------------------------------- |
| 2.01 | Change of Contract | 10 | |
| 2.02 | Nonparticipating Contract | 10 | |
| 2.03 | Payments and Elections | 10 | |
| 2.04 | State Laws | 10 | |
| 2.05 | Control of Contract | 10 | |
| 2.06 | Designation of Beneficiary | 11 | |
| 2.07 | Misstatements and Adjustments | 11 | |
| 5 | |||
| Page | ||
| 2.08 | Incontestability | 11 |
| 2.09 | Individual Certificates | 11 |
| III. |
PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS |
| - |
- -------------------------------------------------------------------------------- |
| 3.01 | Net Purchase Payment | 11 |
| 3.02 | Market Value Adjustment | 11 |
| 3.03 | Notice to the Certificate Holder | 12 |
| 3.04 | Loans | 12 |
| 3.05 | Systematic Withdrawal Option (SWO) | 13 |
| 3.06 | Death Benefit Amount | 14 |
| 3.07 | Death Benefit Options available to Beneficiary | 14 |
| 3.08 | Liquidation of Surrender Value | 15 |
| 3.09 | Surrender Fee | 16 |
| 3.10 | Payment of Surrender Value | 16 |
| 3.11 | Payment of Adjusted Current Value | 16 |
| IV. |
ANNUITY PROVISIONS |
| - |
- -------------------------------------------------------------------------------- |
| 4.01 | Choices to be Made | 17 |
| 4.02 | Terms of Annuity Options | 17 |
| 4.03 | Death of Annuitant/Beneficiary | 18 |
| 4.04 | Annuity Options | 18 |
6
| I. |
GENERAL DEFINITIONS |
| - |
- -------------------------------------------------------------------------------- |
| 1.01 | Account: | A record established for each |
| Certificate Holder to maintain the value | ||
| of the Net Purchase Payment held on | ||
| his/her behalf during the Accumulation | ||
| Period. | ||
| 1.02 | Accumulation Period: | The period during which the Net Purchase |
| Payment is applied to an Account to | ||
| provide future Annuity payment(s). | ||
| 1.03 | Adjusted Current Value: | The Current Value of an Account plus or |
| minus any aggregate AMG Account MVA, if | ||
| applicable. (see 1.22) | ||
| 1.04 | Annuitant: | The person named by the Certificate |
| Holder whose life is measured for | ||
| purposes of the guaranteed death benefit | ||
| and the duration of Annuity payments | ||
| under this Contract. Subject to Aetna's | ||
| approval, the Annuitant may be changed | ||
| by the Certificate Holder by notifying | ||
| Aetna in writing prior to the Annuity | ||
| Date of an Account. | ||
| 1.05 | Annuity: | Payment of an income: |
| (a) For the life of one or two persons; | ||
| (b) For a stated period; or | ||
| (c) For some combination of (a) and (b). | ||
| 1.06 | Annuity Date: | The date on which Annuity payments begin |
| under an Annuity option elected by the | ||
| Certificate Holder. (see 4.01) The | ||
| Annuity Date is shown on Contract | ||
| Schedule I. The Certificate Holder may | ||
| change this date by notifying Aetna at | ||
| least 30 days prior to the Annuity Date. | ||
| 1.07 | Beneficiary: | The person(s) entitled to receive death |
| benefits under the terms of this | ||
| Contract. | ||
| 1.08 | Certificate Holder: | A person who purchases an interest in |
| this Contract as evidenced by a | ||
| certificate. Aetna reserves the right to | ||
| limit Account ownership to natural | ||
| persons. If more than one Certificate | ||
| Holder owns an Account, each Certificate | ||
| Holder will be a joint Certificate | ||
| Holder. Any joint Certificate Holder | ||
| 1.09 |
Code: |
| 1.10 |
Contract: |
| 1.11 |
Contract Holder: |
| 1.12 |
Current Value: |
| 1.13 |
Deposit Period: |
| 1.14 |
Entire Contract: |
| 1.15 |
Fixed Annuity: |
| 1.16 |
General Account: |
| 1.17 |
Guaranteed Rates -- AMG Account: |
| 1.18 |
Guaranteed Period: |
must be the spouse of the other joint
Certificate Holder. Joint Certificate
Holders have joint ownership rights and
both must authorize exercising any
ownership rights unless Aetna allows
otherwise.
The Internal Revenue Code of 1986, as it
may be amended from time to time.
This agreement between Aetna and the
Contract Holder.
The entity to which the Contract is
issued.
7
The Net Purchase Payment plus any
interest credited; less all Maintenance
Fees deducted, any amounts surrendered
and any amounts applied to an Annuity.
A calendar week, a calendar month, a
calendar quarter, or any other period of
time specified by Aetna during which the
Net Purchase Payment and Reinvestments
are accepted into the AMG Account for
one or more Guaranteed Periods. Aetna
reserves the right to extend the Deposit
Period.
The Contract, all attached pages and any
subsequent endorsements make up the
Entire Contract.
An Annuity with payments that do not
vary in amount based on investment
performance.
The Account holding the assets of Aetna,
other than those assets held in Aetna's
separate accounts.
Aetna will declare the interest rate
applicable for each Guaranteed Period at
the start of the Deposit Period for that
applicable Guaranteed Period. The
rate(s) are guaranteed by Aetna for that
Deposit Period and the ensuing
Guaranteed Period(s). The Guaranteed
Rates are effective annual rates of
return. That is, interest is credited
daily at a rate that will produce the
Guaranteed Interest Rate over the period
of a year. No Guaranteed Rate will ever
be less than the Minimum Guaranteed
Interest Rate shown on Contract Schedule
I.
For Guaranteed Periods of one year or
less, one Guaranteed Rate is credited
for the full Guaranteed Period. For
longer Guaranteed Periods, an initial
Guaranteed Rate is credited from the
date of deposit to the end of a
specified period within the Guaranteed
Period. There may be different
Guaranteed Rate(s) declared at the
beginning of the Deposit Period for
subsequent specified time intervals
throughout the Guaranteed Period.
The period of time for which Guaranteed
Rates are guaranteed on the Net Purchase
Payment and Reinvestments made during a
current Deposit Period. Such period
begins on the day following the close of
the Deposit Period and ends on the
designated Maturity Date. Guaranteed
Periods are offered at Aetna's
discretion for various lengths of time
ranging up to and including twenty
years.
During a Deposit Period, Aetna may make
available any number of Guaranteed
1.19 Guaranteed Period Groups:
| 1.20 |
Maintenance Fee: |
| 1.21 |
AICA Modified Guaranteed Account (AMG Account): |
| 1.22 |
Market Value Adjustment (MVA): |
| 1.23 |
Matured Period Value: |
| 1.24 |
Maturity Date: |
| 1.25 |
Net Purchase Payment: |
| 1.26 |
Nonunitized Separate Account: |
| 1.27 |
Purchase Payment: |
| 1.28 |
Reinvestment: |
Periods. The Certificate Holder may
allocate the Net Purchase Payment or
Reinvestment into any or all of the
available Guaranteed Periods.
All Guaranteed Periods with the same
length of time from the close of the
Deposit Period until the designated
Maturity Date.
8
The Maintenance Fee, if any (see
Contract Schedule I), will be deducted
from the Account during the Accumulation
Period on each anniversary of the date
the Account is established and upon
surrender of the entire Account.
An accumulation option where Aetna
guarantees rate(s) of interest for
specified periods of time. All assets
of Aetna, including amounts in the
Nonunitized Separate Account, are
available to meet the guarantees under
the AMG Account.
An adjustment that may apply to the
amount withdrawn from a Guaranteed
Period prior to the end of that
Guaranteed Period. The adjustment
reflects the change in the value of the
investment due to changes in interest
rates since the date of deposit and is
computed using the formula given in
3.02. The adjustment is expressed as a
percentage or a factor of each dollar
being withdrawn.
The amount payable on a Guaranteed
Period's Maturity Date.
The last day of a Guaranteed Period.
The Purchase Payment less premium taxes,
as applicable.
A separate account set up by Aetna under
Title 38, Section 38a-433, of the
Connecticut General Statutes, that holds
assets for AMG Account Guaranteed
Periods. There are no discrete units for
the AMG Account. The Certificate Holder
does not participate in the investment
gain or loss from the assets held in the
Nonunitized Separate Account. Such gain
or loss is borne entirely by Aetna. The
assets held in the AMG Account may be
chargeable with liabilities arising out
of any other business of Aetna.
Payment accepted by Aetna at its Home
Office. Aetna reserves the right to
refuse to accept any Purchase Payment at
any time for any reason. No advance
notice will be given to the Contract
Holder.
Aetna will notify the Certificate Holder
of the approaching Maturity Date at
least 18 calendar days prior to the end
of any Guaranteed Period. If no specific
direction is given by the Certificate
Holder prior to the Maturity Date, each
Matured Period Value will be reinvested
on the Maturity Date for a Guaranteed
Period of the same duration. If a
Guaranteed Period of the same duration
is unavailable, each Matured Period
Value will automatically be reinvested
on the Maturity Date for the next
shortest Guaranteed Period available. If
no shorter Guaranteed Period is
available, the next longer Guaranteed
Period will be used. Aetna will mail a
confirmation statement to the
Certificate Holder the next business day
after the Maturity Date.
| 9 | |||
| 1.28 | Reinvestment (Cont'd): | At any time prior to the Maturity Date, | |
| the Certificate Holder may request in | |||
| writing a reinvestment of the Matured | |||
| Period Value in a different Guaranteed | |||
| Period(s) or a surrender of all or a | |||
| part of the Matured Period Value without | |||
| an MVA or Surrender Fee. Such request | |||
| will be executed on the Maturity Date. | |||
| If reinvesting in a different Guaranteed | |||
| Period(s), all or part of the Matured | |||
| Period Value will be reinvested in the | |||
| elected Guaranteed Period(s) at the then | |||
| prevailing rate(s). This provision only | |||
| applies to a written request from the | |||
| Certificate Holder received at Aetna's | |||
| Home Office in good order at least five | |||
| (5) days prior to the Maturity Date. | |||
| 1.29 | Surrender Value: | The amount payable by Aetna upon the | |
| surrender of all or any portion of an | |||
| Account. | |||
| II. | GENERAL PROVISIONS | ||
- - --------------------------------------------------------------------------------
| 2.01 | Change of Contract: | Only an authorized officer of Aetna may |
| change the terms of this Contract. Aetna | ||
| reserves the right to modify this | ||
| Contract to meet the requirements of | ||
| applicable state and federal laws or | ||
| regulations. Aetna will notify the | ||
| Contract Holder and Certificate Holder | ||
| in writing of any changes. | ||
| 2.02 | Nonparticipating Contract: | The Contract Holder, Certificate Holders |
| or Beneficiaries will not have a right | ||
| to share in the earnings of Aetna. | ||
| 2.03 | Payments and Elections: | While the Certificate Holder is living, |
| Aetna will pay the Certificate Holder | ||
| any Annuity payments as and when due. | ||
| After the Certificate Holder's death, or | ||
| at the death of the first Certificate | ||
| Holder if the Account is owned jointly, | ||
| any Annuity payments will be paid in | ||
| accordance with 4.03. Aetna will make | ||
| any other payments within seven (7) | ||
| calendar days of receipt of a written | ||
| request for payment, which is in good | ||
| order, at its Home Office, except as | ||
| provided in 3.10. | ||
| 2.04 | State Laws: | The Contract and the certificates comply |
| with the laws of the state in which they | ||
| are delivered. Any surrender, death, or | ||
| Annuity payments are equal to or greater | ||
| than the minimum required by such laws. | ||
| Annuity tables for legal reserve | ||
| valuation shall be as required by state | ||
| law. Such tables may be different from | ||
| Annuity tables used to determine Annuity | ||
| payments. | ||
| 2.05 | Control of Contract: | This is a Contract between the Contract |
| Holder and Aetna. The Contract Holder | ||
| has title to the Contract. Contract | ||
| Holder rights are limited to accepting | ||
| or rejecting Contract modifications. The | ||
| Certificate Holder has all other rights | ||
| to amounts held in his or her Account. | ||
| 2.05 | Control of Contract | Each Certificate Holder shall own all |
| (Cont'd): | amounts held in his or her Account. Each | |
| Certificate Holder may make any choices | ||
| allowed by this Contract for his or her | ||
| Account. Choices made under this | ||
| Contract must be in writing. If the | ||
| Account is owned jointly, both joint | ||
| Certificate Holders must authorize any | ||
| choices in writing. Until receipt of | ||
| such choices at Aetna's Home Office, | ||
| Aetna may rely on any previous choices | ||
| made. | ||
10
| 2.06 |
Designation of Beneficiary: |
| 2.07 |
Misstatements and Adjustments: |
| 2.08 |
Incontestability: |
| 2.09 |
Individual Certificates: |
The Contract is not subject to the
claims of any creditors of the Contract
Holder or the Certificate Holder, except
to the extent permitted by law.
The Certificate Holder may assign or
transfer his or her rights under the
Contract. Aetna reserves the right not
to accept assignment or transfer to a
nonnatural person. Any assignment or
transfer made must be submitted to
Aetna's Home Office in writing and will
not be effective until accepted by
Aetna. Aetna assumes no responsibility
for the validity of any assignment.
Each Certificate Holder shall name his
or her Beneficiary. The Beneficiary may
be changed at any time. Changes to a
Beneficiary must be submitted to Aetna's
Home Office in writing and will not be
effective until received and recorded by
Aetna.
If Aetna finds the age of any Annuitant
to be misstated, the correct facts will
be used to adjust payments.
Aetna will not contest this Contract
from its effective date.
Aetna shall issue a certificate to each
Certificate Holder. The certificate
will summarize certain provisions of
the Contract. Certificates are for
information only and are not a part of
the Contract, except as evidence of the
Certificate Holder's interest in the
Contract.
| III. |
PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS |
| - |
- -------------------------------------------------------------------------------- |
3.01 Net Purchase Payment:
| 3.02 |
Market Value Adjustment: |
| 3.02 |
Market Value Adjustment (Cont'd): |
This amount is the actual Purchase Payment less any applicable premium tax. Aetna reserves the right to deduct any premium tax at any time from the Purchase Payment or from the Certificate Holder's Account.
The Certificate Holder shall designate, on the enrollment form, the allocation percentage of the Net Purchase Payment to be applied to each of the available Guaranteed Periods during the current Deposit Period(s). The minimum amount that may be allocated to any Guaranteed Period is shown on Contract Schedule I.
There will be an MVA for any withdrawal before the end of a Guaranteed Period when the withdrawal is due to:
(a) Any full or partial surrender, but not for a partial withdrawal under the Systematic Withdrawal Option (see 3.05); or (b) Payment made to a Beneficiary as a death benefit during the Accumulation Period, but not payment made within six months of the date of the Annuitant's death (see 3.06); or (c) An election of an Annuity option. Only a positive MVA, if any, will apply upon election of option 2 or 3 (see 4.04).
11
Market value adjusted amounts will be equal to the amount withdrawn multiplied by the following ratio:
x
---
365
(1 + i)/(1 + J)x/365
Where:
i is the Deposit Period Yield
j is the Current Yield
x is the number of days
remaining, (computed from
Wednesday of the week of
withdrawal) in the
Guaranteed Period.
The Deposit Period Yield will be
determined as follows:
(a) At the close of the last
business day of each week of the
Deposit Period, a yield will be
computed as the average of the
yields on that day of U.S.
Treasury Notes which mature in
the last three months of the
Guaranteed Period.
(b) The Deposit Period Yield is the
average of those yields for the
Deposit Period. If withdrawal is
made before the close of the
Deposit Period, it is the
average of those yields on each
week preceding withdrawal.
The Current Yield is the average of the
yields on the last business day of the
week preceding withdrawal on the same
U.S. Treasury Notes included in the
Deposit Period Yield.
In the event that no U.S. Treasury Notes
which mature in the last three months of
the Guaranteed Period exist, Aetna
reserves the right to use the U.S.
Treasury Notes that mature in the
following quarter.
3.03 Notice to the Certificate The Certificate Holder will receive
Holder: statements at least annually from Aetna
showing the value of any amounts held in
the AMG Account.
Such values will be as of a specific
date no more than 60 days before the
date of the notice.
3.04 Loans: Loans are not available under this
Contract.
12
3.05 Systematic Withdrawal Option The Certificate Holder may elect a
(SWO): distribution option under which a
portion of the Account's Current Value
will automatically be surrendered and
distributed each year. SWO payments will
be calculated based on the Account's
full Current Value. The distributed
amount is withdrawn pro rata from each
Guaranteed Period(s). A Surrender Fee
will not be deducted from any portion of
the Current Value which is paid as a
distribution under SWO.
Certificate Holders should consult their
tax adviser prior to requesting this
distribution option.
(a) Amount of Distribution: The
Certificate Holder may elect one
of the three payment methods
described below.
(1) Specified Payment:
Payments of a designated
| 3.05 |
Systematic Withdrawal Option (b) (SWO) (Cont'd): |
dollar amount. The annual
(2) Specified Period:
Payments which are made
over a period of time
which must be at least 10
years. The annual amount
paid each year is
calculated by dividing
the Current Value as of
December 31 of the prior
year by the number of
payment years remaining;
or
(3) Specified Percentage:
Payment of a designated
percentage which cannot
be greater than the
percentage shown on
Contract Schedule I. The
percentage may be changed
by written request. Aetna
reserves the right to
limit the number of times
the percentage may be
changed. The annual
amount is calculated by
multiplying the Current
Value as of December 31
of the year prior to the
payment by the designated
percentage.
Payments upon the Certificate
Holder's or Annuitant's death
will be made to the Beneficiary
in the manner described in 3.07.
Minimum Initial Current Value:
At its discretion, Aetna may
require a minimum initial
Current Value for election of
this option. If after election
of this option the Current Value
is insufficient to make a
scheduled SWO payment, Aetna
will distribute the entire
Account balance.
Date of Distribution: The
Certificate Holder shall specify
the initial distribution date.
As elected by the Certificate
Holder, SWO payments will be
made on a monthly or quarterly
basis unless Aetna allows
otherwise. If SWO payments are
made more frequently than
annually, the designated annual
amount is divided by the number
of payments due each calendar
year. Subsequent distributions
will be made on the 15th of any
month or such other date as
Aetna may designate or allow.
Election and Revocation: SWO may
be elected by submitting a
completed and signed election
form to Aetna's Home Office.
Aetna reserves the right to
establish the date when SWO may
first be elected by a
Certificate Holder. Once
elected, this option may be
revoked by the Certificate
3.06 Death Benefit Amount:
| 3.07 |
Death Benefit Options available to Beneficiary: |
| 3.07 |
Death Benefit Options available to Beneficiary (Cont'd): |
Holder or spousal Beneficiary,
if elected after the Certificate
Holder's death, by submitting a
written request to Aetna at its
Home Office. Any revocation will
apply only to amounts not yet
paid. SWO may be elected only
once by the Certificate Holder
or by the spousal Beneficiary.
If the Certificate Holder or Annuitant
dies before Annuity payments start, the
Beneficiary is entitled to a death
benefit under the Account. If the
Account is owned jointly, the death
benefit is paid at the first death of
either of the joint Certificate Holders.
If the Account is held by joint
Certificate Holders, the survivor will
be deemed the designated Beneficiary and
any other Beneficiary on record will be
treated as the contingent Beneficiary.
If the Certificate Holder is a
nonnatural person, the death benefit
will be payable at the death of the
Annuitant.
If paid within 6 months of the date of
the Annuitant's death, the death benefit
will be the Current Value of the
Account. Otherwise, the death benefit
will be the Adjusted Current Value of
the Account determined as of the claim
date. The claim date is the date when
proof of death and the Beneficiary's
claim are received in good order at
Aetna's Home Office.
When the Certificate Holder dies and the
Certificate Holder is not the Annuitant,
the death benefit payable will be
subject to a Surrender Fee, if
applicable.
Prior to any election, or until amounts
must be otherwise distributed under this
section, the Current Value of the
Account will be retained in the Account.
The following options are available to
the Beneficiary:
(a) When the Certificate Holder dies
or if the Certificate Holder is
not a natural person, when the
Annuitant dies:
14
(1) If the Beneficiary is the
Certificate Holder's
surviving spouse, the
Beneficiary may exercise
all Certificate Holder
rights under the Contract
and continue in the
Accumulation Period, or
may elect (i) or (ii)
below. Distributions from
the Account are not
required until the
spousal Beneficiary's
death. The spousal
Beneficiary may elect to:
(i) Apply some or all of
the death benefit
amount to an Annuity
option 1, 2 or 3
(see 4.04); or
(ii) Receive, at any
time, a lump sum
payment equal to the
death benefit
amount.
(2) If the Beneficiary is an
individual who is not the
Certificate Holder's
| 3.08 |
Liquidation of Surrender Value: |
| 3.08 |
Liquidation of Surrender Value (Cont'd): |
3.09 Surrender Fee:
surviving spouse, then
options (i) or (ii) under
(1) above apply. Any
portion of the death
benefit amount not
applied to Annuity option
1, 2 or 3 within one year
of the Certificate
Holder's death, must be
distributed within five
years of the date of
death.
| (3) |
If the Beneficiary is not a natural person, then only option (ii) under (1) above applies. |
| (4) |
If no Beneficiary has been designated, a lump sum payment equal to the death benefit amount will be made to the Certificate Holder's estate. |
(b) If the Certificate Holder is a
natural person but is not the
Annuitant, and the Annuitant
dies, the Beneficiary may elect
either to apply the death
benefit amount to Annuity option
1, 2 or 3 within 60 days of the
Annuitant's date of death, or to
receive a lump sum payment.
All or any portion of the Account's
Current Value may be surrendered at any
time prior to the Annuity Date.
Surrender requests can be submitted as a
percentage of the Account value or as a
specific dollar amount. Net Purchase
Payment amounts are withdrawn first, and
then the excess value, if any. For any
partial surrender, amounts are withdrawn
on a pro rata basis from the Guaranteed
Period(s) Groups of the AMG Account in
which the Current Value is invested.
Within a Guaranteed Period Group, the
amount to be surrendered will be
withdrawn first from the oldest Deposit
Period, then from the next oldest, and
so on until the amount requested is
satisfied.
After deduction of the Maintenance Fee
and any premium tax, if applicable, the
surrendered amount shall be reduced by a
Surrender Fee, if applicable. An MVA may
apply to amounts surrendered.
15
The Surrender Fee only applies to the
Net Purchase Payment portion surrendered
and varies according to the elapsed
time from the certificate effective date
(see Contract Schedule I).
No Surrender Fee is deducted from any
portion of the Current Value which is
paid:
(a) To a Beneficiary due to the
Annuitant's death before Annuity
payments start (see 3.06);
(b) As a premium for an Annuity
option 1, 2 or 3 under this
Contract (see 4.04);
(c) As a distribution under the SWO
provision (see 3.05);
(d) At least 12 months after the
date of the Purchase Payment, in
an amount equal to or less than
the special withdrawal
percentage shown on Contract
| 3.10 |
Payment of Surrender Value: |
| 3.11 |
Payment of Adjusted Current Value: |
Schedule I times the Current
Value at the time of the
withdrawal. This applies to the
first surrender request, partial
or full, in a calendar year. The
Current Value is calculated as
of the date the surrender
request is received in good
order at Aetna's Home Office.
This waiver is not available to
the Certificate Holder while SWO
is in effect;
(e) For a full surrender of the
Account where the Current Value
of the Account is $2,500 or less
and no surrenders have been
taken from the Account within
the prior 12 months; or
(f) Upon withdrawal of any Matured
Period Value; or
(g) By Aetna under 3.11.
Under certain emergency conditions, as
allowed by law, Aetna may defer payment
for a period of up to 6 months.
Upon 90 days' written notice to the
Certificate Holder, Aetna will terminate
any Account if the Current Value becomes
less than $2,500 immediately following
any partial surrender. A Surrender Fee
will not be deducted from the Adjusted
Current Value.
16
| IV. |
ANNUITY PROVISIONS |
| - |
- -------------------------------------------------------------------------------- |
| 4.01 | Choices to be Made: | The Certificate Holder may tell Aetna to | |
| apply any portion of the Adjusted | |||
| Current Value (minus any premium tax) | |||
| for an Annuity under option 1, 2, or 3 | |||
| (see 4.04). The first Annuity payment | |||
| may not be earlier than twelve months | |||
| after the Purchase Payment. At least 30 | |||
| days prior to the Annuity Date, the | |||
| Certificate Holder must tell Aetna which | |||
| Annuity option is elected. Annuity | |||
| payments will be made monthly, unless | |||
| the Certificate Holder elects otherwise | |||
| in writing. | |||
| In lieu of the election of an Annuity, | |||
| the Certificate Holder may elect a lump | |||
| sum payment. | |||
| The Annuity purchase rate for the option | |||
| chosen reflects the Minimum Guaranteed | |||
| Interest Rate (see Contract Schedule | |||
| II), but may reflect a higher interest | |||
| rate. | |||
| 4.02 | Terms of Annuity Options: | (a) | When payments start, the age of |
| the Annuitant plus the number of | |||
| years for which payments are | |||
| guaranteed must not exceed 95. | |||
| (b) | An Annuity option may not be | ||
| elected if the first payment | |||
| would be less than $50 or if the | |||
| total payments in a year would | |||
| be less than $250 (less if | |||
| required by state law). Aetna | |||
| reserves the right to increase | |||
| the minimum first Annuity | |||
| payment amount and the annual | |||
| minimum Annuity payment amount | |||
| based upon increases reflected | |||
| in the Consumer Price | |||
| Index-Urban, (CPI-U) since July | |||
| 1, 1993. | |||
| (c) | If an Annuity under option 1, 2 | ||
| or 3 is chosen and a larger | |||
| payment would result from | |||
| 4.02 |
Terms of Annuity Options (Cont'd): |
| 4.03 |
Death of Annuitant/ Beneficiary: |
| 4.04 |
Annuity Options: |
applying the Surrender Value to
a current Aetna single premium
immediate Annuity, Aetna will
make the larger payment.
(d) For purposes of calculating the
guaranteed first payment of an
Annuity, the Annuitant's and
second Annuitant's adjusted age
will be used. The Annuitant's
and second Annuitant's adjusted
age is his or her age as of the
birthday closest to the Annuity
commencement date reduced by one
year for Annuity commencement
dates occurring during the
period of time through December
31, 1999. The Annuitant's and
second Annuitant's age will be
reduced by two years for Annuity
commencement dates occurring
during the period of time from
January 1, 2000 through December
31, 2009. The Annuitant's and
second Annuitant's age will be
reduced by one additional year
for Annuity commencement dates
occurring in each succeeding
decade.
The Annuity purchase rates for
options 2 and 3 are based on
mortality from 1983 Table a.
17
(e) Once elected, an Annuity option
may not be revoked and Annuity
payments cannot be commuted to a
lump sum.
If the Annuitant dies after Annuity
payments have begun, the death benefit,
if any, will be payable to the
Beneficiary as specified in the Annuity
option elected. Death benefits will be
paid at least as rapidly as under the
method of distribution in effect at the
Annuitant's death.
If the Certificate Holder who is not the
Annuitant dies after Annuity payments
have begun, any remaining payments under
the Annuity option elected will be made
to the Beneficiary at least as rapidly
as under the method of distribution in
effect at the Certificate Holder's
death.
If the Account is held by joint
Certificate Holders, the survivor will
be deemed the designated Beneficiary and
any other Beneficiary on record will be
treated as the contingent Beneficiary.
Aetna will require proof of death.
Option 1 -- Payments for a Stated Period
of Time -- An Annuity will be paid for
the number of years chosen. The number
of years must be at least 10 and not
more than 30.
If a nonspouse Beneficiary elects this
option at the death of the Certificate
Holder, the period selected may not
extend beyond the Beneficiary's life
expectancy.
Option 2 -- Life Income -- An Annuity
will be paid for the life of the
Annuitant. If also chosen, Aetna will
guarantee payments for 60, 120, 180, or
240 months.
Option 3 -- Life Income Based upon the
Lives of Two Annuitants -- An Annuity
will be paid during the lives of the
Annuitant and a second Annuitant.
Page 15 of 17
Payments will continue until both
Annuitants have died. When this option
is chosen, one of the following choices
must be made:
| (a) |
100% of the payment to continue after the first death; |
| (b) |
66 2/3% of the payment to continue after the first death; |
| (c) |
50% of the payment to continue after the first death; |
| (d) |
Payments for a minimum of 120 months with 100% of the payment to continue after the first death; or |
| (e) |
100% of the payment to continue at the death of the second Annuitant and 50% of the payment to continue at the death of the Annuitant. |
Other Options -- Aetna may make other
options available as allowed by the laws
of the state in which this Contract and
the certificate is delivered.
18
OPTION 1
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- -
| Years | Guaranteed Rate |
Monthly Payment |
Quarterly Payment |
Semi-Annual Payment |
Annual Payment | |
| 5 | 3.00% | 17.91 | 53.59 | 106.78 | 211.99 | |
| 6 | 3.00% | 15.14 | 45.30 | 90.27 | 179.22 | |
| 7 | 3.00% | 13.16 | 39.39 | 78.49 | 155.83 | |
| 8 | 3.00% | 11.68 | 34.96 | 69.66 | 138.31 | |
| 9 | 3.00% | 10.53 | 31.52 | 62.81 | 124.69 | |
| 10 | 3.00% | 9.61 | 28.77 | 57.33 | 113.82 | |
| 11 | 3.00% | 8.86 | 26.52 | 52.85 | 104.93 | |
| 12 | 3.00% | 8.24 | 24.65 | 49.13 | 97.54 | |
| 13 | 3.00% | 7.71 | 23.08 | 45.98 | 91.29 | |
| 14 | 3.00% | 7.26 | 21.73 | 43.29 | 85.95 | |
| 15 | 3.00% | 6.87 | 20.56 | 40.96 | 81.33 | |
| 16 | 3.00% | 6.53 | 19.54 | 38.93 | 77.29 | |
| 17 | 3.00% | 6.23 | 18.64 | 37.14 | 73.74 | |
| 18 | 3.00% | 5.96 | 17.84 | 35.56 | 70.59 | |
| 19 | 3.00% | 5.73 | 17.13 | 34.14 | 67.78 | |
| 20 | 3.00% | 5.51 | 16.50 | 32.87 | 65.26 | |
| 21 | 3.00% | 5.32 | 15.92 | 31.72 | 62.98 | |
| 22 | 3.00% | 5.15 | 15.40 | 30.68 | 60.92 | |
| 23 | 3.00% | 4.99 | 14.92 | 29.74 | 59.04 | |
| 24 | 3.00% | 4.84 | 14.49 | 28.88 | 57.33 | |
| 25 | 3.00% | 4.71 | 14.09 | 28.08 | 55.76 | |
| 26 | 3.00% | 4.59 | 13.73 | 27.36 | 54.31 | |
| 27 | 3.00% | 4.47 | 13.39 | 26.68 | 52.97 | |
| 28 | 3.00% | 4.37 | 13.08 | 26.06 | 51.74 | |
| 29 | 3.00% | 4.27 | 12.79 | 25.49 | 50.60 | |
| 30 | 3.00% | 4.18 | 12.52 | 24.95 | 49.53 |
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
Payments Guaranteed for a Stated Period of Months -------------------------------------------------
<TABLE> <CAPTION>
- - --------------------------------------------------------------------------------------------------------------------Adjusted Age of Annuitant None 60 120 180 240 - - --------------------------------------------------------------------------------------------------------------------
| <S> | <C> | <C> | <C> | <C> | <C> | |
| 50 | $ 4.05 | $ 4.05 | $ 4.03 | $ 3.99 | $ 3.93 | |
| 51 | 4.12 | 4.11 | 4.09 | 4.05 | 3.99 | |
| 52 | 4.19 | 4.19 | 4.16 | 4.11 | 4.04 | |
| 53 | 4.27 | 4.26 | 4.23 | 4.18 | 4.10 | |
| 54 | 4.35 | 4.34 | 4.31 | 4.25 | 4.16 | |
| 55 | 4.44 | 4.42 | 4.39 | 4.32 | 4.22 | |
| 56 | 4.53 | 4.51 | 4.47 | 4.40 | 4.29 | |
| 57 | 4.62 | 4.61 | 4.56 | 4.48 | 4.35 | |
| 58 | 4.72 | 4.71 | 4.65 | 4.56 | 4.42 | |
| 59 | 4.83 | 4.81 | 4.75 | 4.64 | 4.49 | |
| 60 | 4.95 | 4.93 | 4.86 | 4.73 | 4.55 | |
| 61 | 5.07 | 5.05 | 4.97 | 4.83 | 4.62 | |
| 62 | 5.20 | 5.17 | 5.08 | 4.92 | 4.69 | |
| 63 | 5.34 | 5.31 | 5.20 | 5.02 | 4.76 | |
| 64 | 5.49 | 5.45 | 5.33 | 5.12 | 4.83 | |
| 65 | 5.65 | 5.61 | 5.47 | 5.22 | 4.89 | |
| 66 | 5.82 | 5.77 | 5.61 | 5.33 | 4.96 | |
| 67 | 6.01 | 5.94 | 5.75 | 5.44 | 5.02 | |
| 68 | 6.20 | 6.13 | 5.91 | 5.54 | 5.08 | |
| 69 | 6.41 | 6.33 | 6.07 | 5.65 | 5.14 | |
| 70 | 6.64 | 6.54 | 6.23 | 5.76 | 5.19 | |
| 71 | 6.88 | 6.76 | 6.41 | 5.86 | 5.24 | |
| 72 | 7.14 | 7.00 | 6.59 | 5.97 | 5.28 | |
| 73 | 7.43 | 7.26 | 6.77 | 6.06 | 5.32 | |
| 74 | 7.73 | 7.53 | 6.96 | 6.16 | 5.35 | |
| 75 | 8.06 | 7.82 | 7.14 | 6.25 | 5.38 | |
- - --------------------------------------------------------------------------------------------------------------------</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables.
20
<PAGE>
OPTION 3
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
| Annuitant | Second Annuitant |
Option 3a | Option 3b | Option 3c | Option 3d | Option 3e | |
| 55 | 50 | $ 3.69 | $ 4.05 | $ 4.27 | $ 3.69 | $ 4.03 | |
| 55 | 55 | 3.88 | 4.25 | 4.47 | 3.87 | 4.14 | |
| 55 | 60 | 3.99 | 4.44 | 4.71 | 3.98 | 4.42 | |
| 60 | 55 | 3.99 | 4.44 | 4.71 | 3.98 | 4.42 | |
| 60 | 60 | 4.24 | 4.71 | 4.99 | 4.23 | 4.57 | |
| 60 | 65 | 4.38 | 4.97 | 5.32 | 4.38 | 4.93 | |
| 65 | 60 | 4.38 | 4.97 | 5.32 | 4.38 | 4.93 | |
| 65 | 65 | 4.72 | 5.33 | 5.70 | 4.71 | 5.14 | |
| 65 | 70 | 4.93 | 5.68 | 6.15 | 4.91 | 5.66 | |
| 70 | 65 | 4.93 | 5.68 | 6.15 | 4.91 | 5.66 | |
| 70 | 70 | 5.40 | 6.21 | 6.70 | 5.36 | 5.96 | |
| 70 | 75 | 5.69 | 6.68 | 7.32 | 5.62 | 6.67 |
| 75 | 70 | 5.69 | 6.68 | 7.32 | 5.62 | 6.67 |
| 75 | 75 | 6.37 | 7.45 | 8.15 | 6.23 | 7.12 |
| 75 | 80 | 6.78 | 8.11 | 8.99 | 6.54 | 8.13 |
- - ---------------------------------------------------------------------------------------------------------------------------</TABLE>
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables.
21
- - --------------------------------------------------------------------------------
Aetna Insurance Company of America Home Office: 151 Farmington Avenue Hartford, Connecticut 06156 (800) 531-4547
Certificate of Group Annuity Contract Coverage
- - --------------------------------------------------------------------------------
THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA. APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT APPLY TO A GUARANTEED PERIOD AT THE TIME OF ITS MATURITY.
G2CC-MGA-95
Exhibit 16(4)(d): Endorsement (E2-MGAIRA-95-2) to Group Annuity contract form No. G2-MGA-95 and Certificate No. G2CC-MGA-95
Aetna Insurance Company of America
Endorsement
This Contract or Certificate is endorsed as follows.
The following provisions apply to a Contract which qualifies as an Individual Retirement Annuity under Internal Revenue Code (Code) Section 408(b). In the case of a conflict with any provision in the Contract, the provisions of this Endorsement control.
1. The Certificate Holder and the Annuitant must be the same person. Joint Certificate Holders are not permitted.
2. The Certificate Holder's Account and the Certificate Holder's rights under the Contract are not transferable. The Certificate Holder may not sell, assign, transfer, pledge or use as collateral for a loan or as security for the performance of an obligation or for any other purpose, his or her interest in the Contract to any person other than the issuer of the Contract.
3. The Certificate Holder's entire interest in the Contract is nonforfeitable.
4. The Certificate Holder's Account is established for the exclusive benefit of the Certificate Holder or his or her Beneficiary(ies).
5. The Purchase Payment under this Contract must be a cash rollover amount under Code Section 402(c), 403(a)(4), 403(b)(8), or 408(d)(3). Aetna may require verification that a rollover amount qualifies as such under the Code.
Payments to Simplified Employee Pension plans and annual deductible and nondeductible contributions to Individual Retirement Annuities are not accepted under the Contract.
6. The entire interest of the Certificate Holder will be distributed, or begin to be distributed, no later than the first day of April following the calendar year in which the Certificate Holder attains age 70-1/2 (required beginning date), over:
| (a) |
The life of the Certificate Holder, or the lives of the Certificate Holder and his or her designated Beneficiary, or |
| (b) |
A period certain not extending beyond the life expectancy of the Certificate Holder or the joint and last survivor expectancy of the Certificate Holder and his or her designated Beneficiary. |
Payments must be made in periodic payments at intervals of no longer than one year. In addition, payments must be either nonincreasing or they may increase only as provided in Question and Answer F-3 of Section 1.401(a)(9)-l of the Proposed Income Tax Regulations.
E2-MGAIRA-95-2
1
All distributions made hereunder shall be made in accordance with the requirements of Section 401(a)(9) of the Code, including the incidental death benefit requirements of Section 401(a)(9)(G) of the Code, and the regulations thereunder, including the minimum distribution incidental benefit requirements of Section 1.401(a)(9)-2 of the Proposed Income Tax Regulations.
Life expectancy is computed by use of the expected return multiples in Tables V and VI of Section 1.72-9 of the Income Tax Regulations. Life expectancy for distributions under an Annuity option may not be recalculated.
7. If distributions are to be made under the Systematic Withdrawal Option (SWO) after the required beginning date, a higher amount will be distributed in any year if required under the minimum distribution requirements of the Code. The minimum amount to be distributed each year, beginning with the first calendar year for which distributions are required and then for each succeeding calendar year, shall not be less than the quotient obtained by dividing the Current Value as of December 31 of the prior year by the lesser of (1) the applicable life expectancy or (2) if the Certificate Owner's spouse is not the designated Beneficiary, the applicable divisor determined from the table set forth in Question and Answer 4 of Section 1.401(a)(9)-2 of the Proposed Income Tax Regulations. For purposes of this determination, life expectancy for the initial distribution year will be calculated based on the applicable life expectancy from Table V or VI of Section 1.72-9 of the Income Tax Regulations. Distributions for any subsequent year shall be calculated based on such life expectancy reduced by one for each calendar year which has elapsed since the calendar year life expectancy was first calculated.
8. During the Accumulation Period, the Certificate Holder may elect the Estate Conservation Option (ECO) to receive automatic annual withdrawals of the
Page 2 of 3
minimum distribution required under the Code. The annual distribution amount will be determined by dividing the Current Value as of December 31 of the prior year by the lesser of (1) the applicable life expectancy recalculated each year in accordance with Question and Answer E-8 of Section 1.401(a)(9)-l of the Proposed Income Tax Regulations, or (2) if the Certificate Holder's spouse is not the designated Beneficiary, the applicable divisor determined from the table set forth in Question and Answer 4 of Section 1.401(a)(9)-2 of the Proposed Income Tax Regulations. For purposes of this determination, life expectancy for the initial distribution year will be calculated based on the applicable life expectancy from Table V or VI of Section 1.72-9 of the Income Tax Regulations.
Aetna will not impose a Surrender Fee on any portion of the Current Value which is paid as an ECO distribution. The Surrender Fee will apply to any additional amounts withdrawn while ECO is in effect.
The Certificate Holder may elect ECO beginning with the year he or she turns age 70-1/2, but not earlier than 12 months after receipt of the Purchase Payment, by submitting a properly completed election form to Aetna's Home Office. Aetna may require a minimum initial Current Value for the election of ECO.
E2-MGAIRA-95-2
2
<PAGE>
The Certificate Holder, or a spousal Beneficiary if ECO is elected after the Certificate Holder's death, may revoke ECO at any time by submitting a written request to Aetna's Home Office. If ECO is revoked, it may not begin again until 36 months have elapsed.
9. At the death of the Certificate Holder:
| (a) |
If the Certificate Holder dies on or after distribution of his or her interest | |
| (b) |
If the Certificate Holder dies before distribution of his or her interest | |
| (i) |
Distributions to the Beneficiary may be made in installments over the life of the Beneficiary or over a period not extending beyond the life expectancy of the Beneficiary commencing no later than December 31 of the calendar year immediately following the calendar year in which the Certificate Holder died. | |
| (ii) |
If the Beneficiary is the Certificate Holder's surviving spouse, and distributions are to be made in accordance with (i) above, distributions must begin on or before the later of December 31 of the calendar year immediately following the calendar year in which the Certificate Holder died or December 31 of the calendar year in which the Certificate Holder would have attained age 70-1/2. | |
A spousal Beneficiary may elect an Annuity option, SWO, ECO, a lump sum payment, or treat the Contract as his or her own IRA. An election to treat the Contract as his or her own will be deemed to have been made if such surviving spouse makes a rollover to or from such Contract, or fails to elect any of the above provisions.
Life expectancy is computed by use of the expected return multiples in Tables V and VI of Section 1.72-9 of the Income Tax Regulations. Life expectancies for distributions under an Annuity option may not be recalculated.
Distributions under this section are considered to have begun if distributions are made on account of the Certificate Holder reaching the required beginning date or, if prior to the required beginning date, distributions irrevocably commence over a period permitted and in an Annuity option acceptable under Section 1.401(a)(9) of the Proposed Income Tax Regulations.
If SWO or ECO is in effect and the Certificate Holder dies before the required beginning date for minimum distributions, payments will cease and the Beneficiary may claim the death benefit in accordance with the terms of this Section.
E2-MGAIRA-95-2
3
If SWO or ECO is in effect and the Certificate Holder dies after the required beginning date for minimum distributions, the Beneficiary may
elect to continue payments, if permitted by Section 1.401(a)(9) of the Proposed Income Tax Regulations, or may claim the death benefit in accordance with the terms of this Section.
| 10. |
Aetna will furnish annual calendar year reports concerning the status of the Certificate Holder's Account. |
| 11. |
After two full consecutive certificate years, and upon 90 days written notice to the Certificate Holder, Aetna may terminate the Certificate Holder's Account if the paid-up Annuity benefit at maturity would be less than $20 per month. |
/s/ Dan Kearney
President
Aetna Insurance Company of America
E2-MGAIRA-95-2
4
Exhibit 16(4)(e): Endorsement (E2-MGAROTH-97) to Group Annuity Contract form No. GS-MGA-95 and Certificate No. G2CC-MGA-95
Aetna Insurance Company of America
Endorsement
The Contract and Certificate are hereby endorsed to meet the qualification requirements for a Roth Individual Retirement Annuity under Internal Revenue Code ("Code") Section 408A. The following provisions apply and, in the case of a conflict with any provision in the Contract, this endorsement controls.
Certificate Holder. The Certificate Holder and the Annuitant must be the same person. Joint Certificate Holders are not permitted.
Nontransferable/Nonforfeitable. The Contract is nontransferable. The Certificate Holder may not sell, assign, transfer, pledge or use as collateral for a loan or as security for the performance of an obligation or for any other purpose, his or her interest in the Contract to any person other than the issuer of the Contract or to a spouse incident to a divorce under the provisions of Code Section 408(d)(6). The Certificate Holder's entire interest in the Contract is nonforfeitable.
Exclusive Benefit. The Account is established for the exclusive benefit of the Certificate Holder or his or her Beneficiary(ies).
Contributions. The Purchase Payment under the Contract must be a cash rollover amount under Code Section 408A(e). Aetna may require verification that a rollover amount qualifies as such under the Code. Annual contributions are not accepted under the Contract.
Distributions. The distribution rules of Code Section 401(a)(9)(A) do not apply. Any periodic payments will be paid only to the Certificate Holder.
Payment of Death Benefit. Section 3.07 is deleted in its entirety. The death benefit amount is determined in accordance with the provisions of Sections 3.06 and 3.02. At the death of the Certificate Holder:
| (a) |
If the Certificate Holder dies on or after the date distribution of his | |
| (b) |
If the Certificate Holder dies before distribution of his or her interest | |
| (i) |
Distributions to the Beneficiary may be made in installments over the life of the Beneficiary or over a period not extending beyond the life expectancy of the Beneficiary, commencing no later than December 31 of the calendar year immediately following the calendar year in which the Certificate Holder died. | |
| E2-MGAROTH-97 | ||
| (ii) |
If the Beneficiary is the Certificate Holder's surviving spouse, and distributions are to be made in accordance with (i) above, distributions must begin on or before the later of December 31 of the calendar year immediately following the calendar year in which the Certificate Holder died or December 31 of the calendar year in which the Certificate Holder would have attained age 70 1/2. |
If the Certificate Holder dies before Annuity payments begin, a spousal Beneficiary may elect an Annuity option, a systematic distribution option, a lump sum payment or to treat the Account as his or her own IRA. The election to treat the Account as his or her own IRA will be deemed to have been made if such surviving spouse makes a rollover to or from such Account, or fails to elect to receive a distribution in accordance with (b) above.
Life expectancy is computed by use of the expected return multiples in Tables V and VI of Section 1.72-9 of the Income Tax Regulations. Life expectancies for distributions under an Annuity option may not be recalculated.
Annual Reports. Aetna will furnish annual calendar year reports concerning the status of the Certificate Holder's Account.
Termination of Account. Upon 90 days written notice to the Certificate Holder, Aetna may terminate the Certificate Holder's Account if no Purchase Payments have been received for two full consecutive Certificate years and the paid-up Annuity benefit at maturity would be less than $20 per month.
Right to Cancel. The Certificate Holder may cancel the Certificate within 10 days of receiving it by returning it to Aetna or to the person from whom it was purchased. Within seven days from the cancellation request, Aetna will return
all the Certificate Holder's Purchase Payments.
Endorsed and made a part of the Contract and Certificate as of the Effective Date.
/s/ Thomas J. McInerney, President
Thomas J. McInerney, President
Aetna Insurance Company of America
E2-MGAROTH-97
Exhibit 16(4)(f): Name Change Endorsement ENMGHGI (05/02)
| ING LIFE INSURANCE AND ANNUITY COMPANY |
| ENDORSEMENT |
The Contract is hereby endorsed effective May 1, 2002, as follows:
The name of AETNA LIFE INSURANCE AND ANNUITY COMPANY has been changed to ING LIFE INSURANCE AND ANNUITY COMPANY. Accordingly, all references to AETNA LIFE INSURANCE AND ANNUITY COMPANY, ALIAC, and AETNA in the Contract are changed to ING LIFE INSURANCE AND ANNUITY COMPANY, ILIAC, and ING, respectively.
The address remains as follows:
| 151 Farmington Avenue | ||
| Hartford, Connecticut 06156 | ||
All terms and conditions of your Contract remain the same.
| /s/ Thomas J. McInerney ----------------------- Thomas J. McInerney |
| President ING Life Insurance and Annuity Company |
ENMCHGI (05/02)
Exhibit 16(4)(g): Name Change Endorsement (EVNMGHC (09/14))
Voya Retirement Insurance and Annuity Company
ENDORSEMENT
The Contract, Policy and/or Certificate are hereby endorsed effective September 1, 2014, as follows:
The name of ING Life Insurance and Annuity Company has been changed to Voya Retirement Insurance and Annuity Company. Accordingly, all references to ING Life Insurance and Annuity Company or ING in the Contract, Policy and/or Certificate are changed to Voya Retirement Insurance and Annuity Company and Voya, respectively.
The address and phone number remain as follows:
One Orange Way
Windsor, Connecticut 06095
Tel: 1.800.584.6001
All other terms, conditions and provisions of your Contract, Policy and/or Certificate remain unchanged.
|
|
/s/ Mary (Maliz) E. Beams |
|
|
Mary (Maliz) E. Beams |
|
|
President Voya Retirement Insurance and Annuity Company |
EVNMCHG (09/14)
Exhibit 16(4)(h) – SECURE Act Endorsement
Voya Retirement Insurance and Annuity Company
ENDORSEMENT
This Endorsement is made a part of the Contract and, if applicable, the Certificate to which it is attached. Where used in this Endorsement, the term Contract shall mean Certificate when this Endorsement is attached to a Certificate.
The purpose of this Endorsement is to amend the Contract to reflect amendments to the Internal Revenue Code of 1986, as may be amended from time to time (the "Code"), made pursuant to the Setting Every Community Up for Retirement Enhancement Act of 2019 ("the SECURE Act").
The following provisions amend the terms of the Contract, and the provisions of this Endorsement supersede any conflicting provisions in the Contract or in any prior endorsements. All other provisions of the Contract shall remain in full force.
|
A. |
Modification to the Required Minimum Distribution ("RMD") Rules |
|
References to the participant reaching age 70 1/2 in conjunction with the date on which RMDs must begin are hereby removed and replaced with the following: |
|
RMDs are governed and administered consistent with section 401(a)(9) of the Code and regulations thereunder. |
|
B. |
RMD Rules for Payments to Beneficiaries |
|
References to the participant reaching age 70 1/2 in conjunction with the date on which RMDs must begin and descriptions of non-spousal beneficiary payment terms are hereby removed and replaced with the following: |
|
RMD payments to beneficiaries of qualified retirement plan participants are governed and administered consistent with section 401(a)(9) of the Code and regulations thereunder. |
|
C. |
Withdrawals for Birth or Adoption of a Child |
|
If a plan permits, any references to qualified distributions or withdrawals are updated to include the following: |
|
Withdrawals of up to $5,000 (which may be amended by the Code from time to time) per birth or adoption of a child from eligible defined contribution plans are allowed as a qualified birth or adoption distribution subject to applicable tax, withholding and reporting rules. In addition, plan participants may be able to re-contribute such amounts subject to applicable regulations. |
|
D. |
Lifetime Distribution Options |
|
If permitted by a plan, any references to lifetime distribution options are updated to include the following: |
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For plan years beginning after December 31, 2019, participants in defined contribution plans, section 403(b) plans, or governmental section 457(b) plans with a lifetime income investment option may take a distribution of the lifetime income investment, without regard to any of the Code’s withdrawal restrictions, if the lifetime income investment is no longer authorized to be held under the plan. The distribution must be a direct trustee-to-trustee transfer of the investment in the form of a qualified plan distribution annuity to another employer-sponsored retirement plan or Individual Retirement Account. |
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E. |
Loans |
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If a plan permits, any references to loans are updated to include the following: |
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Loans are governed and administered consistent with the plan and section 72(p) of the Code and regulations thereunder, as may be amended from time to time. |
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E-DCSECURE-20 |
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F. |
Conformity with Law and Plan |
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The Contract is updated to include the following: |
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The Contract will be subject to and interpreted in conformity with the provisions, terms, and conditions of the plan document of which this Contract is a part, if any, as well as any administrative procedures and with: |
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1. |
The Code and regulations thereunder; and |
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2. |
Other applicable law (including, without limitation, the Employee Retirement Income Security Act of 1974, as amended) as determined by the plan administrator or other designated plan fiduciary or, if none, you. |
The effective date of this Endorsement is January 1, 2020, or the effective date of the Contract, if later.
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/s/ Charles P. Nelson |
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President Voya Retirement Insurance and Annuity Company |
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E-DCSECURE-20 |
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Exhibit 16(4)(i): SECURE Act Endorsement
Voya Retirement Insurance and Annuity Company
ENDORSEMENT
This Endorsement is made a part of the Contract. The purpose of this Endorsement is to amend the Contract to reflect amendments to the Internal Revenue Code of 1986, as may be amended from time to time (the "Code"), made pursuant to the Setting Every Community Up for Retirement Enhancement Act of 2019 ("the SECURE Act").
The following provisions amend the terms of the Contract, and the provisions of this Endorsement supersede any conflicting provisions in the Contract or in any prior endorsements. All other provisions of the Contract shall remain in full force.
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A. |
Modification to the Required Minimum Distribution ("RMD") Rules |
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References to the IRA owner reaching age 70 1/2 in conjunction with the date on which RMDs must begin are hereby removed and replaced with the following: |
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RMDs are governed and administered consistent with section 401(a)(9) of the Code and regulations thereunder. |
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B. |
RMD Rules for Payments to Beneficiaries |
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References to the IRA owner reaching age 70 1/2 in conjunction with the date on which RMDs must begin and descriptions of non-spousal beneficiary payment terms are hereby removed and replaced with the following: |
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RMD payments to beneficiaries of an IRA owner are governed and administered consistent with section 401(a)(9) of the Code and regulations thereunder. |
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C. |
Withdrawals for Birth or Adoption of a Child |
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Any references to qualified distributions or withdrawals are updated to include the following: |
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Withdrawals of up to $5,000 (which may be amended by the Code from time to time) per birth or adoption of a child from an IRA are allowed as a qualified birth or adoption distribution subject to applicable tax, withholding and reporting rules. In addition, IRA owners may be able to re-contribute such amounts subject to applicable regulations. |
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D. |
Contributions to IRAs |
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Any references to non-rollover contributions to IRAs are updated to include the following: |
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Contribution age limits are governed and administered consistent with section 408 of the Code and regulations thereunder. |
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E. |
Conformity with Law |
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The Contract is updated to include the following: |
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The Contract will be subject to and interpreted in conformity with the provisions of the Code, as well as any administrative procedures. |
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E-IRASECURE-20 |
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The effective date of this Endorsement is January 1, 2020, or the effective date of the Contract, if later.
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/s/ Charles P. Nelson |
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President Voya Retirement Insurance and Annuity Company |
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E-IRASECURE-20 |
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Exhibit 16(5): Opinion as to Legality
VOYA LETTERHEAD
LAW / PRODUCT FILING UNIT
ONE ORANGE WAY, C2S
WINDSOR, CT 06095-4774
PETER M. SCAVONGELLI
ASSISTANT VICE PRESIDENT AND SENIOR COUNSEL
PHONE: (860) 580-1631 | EMAIL: PETER.SCAVONGELLI@VOYA.COM
April 2, 2021
BY EDGARLINK
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Re: Registrant: Voya Retirement Insurance and Annuity Company
Form S-3 Initial Registration
Prospectus Title: Voya Multi-Rate Annuity
Ladies and Gentlemen:
The undersigned serves as counsel to Voya Retirement Insurance and Annuity Company, a Connecticut domiciled corporation (the “Company”).
In connection with this opinion, I have reviewed the above-referenced Initial Registration Statement on Form S-3. This filing describes the Voya Multi-Rate Annuity group or individual, single purchase payment, modified guaranteed deferred annuity contract (the “Contract”) offered by the Company.
I have also examined, or supervised the examination of, originals or copies, certified or otherwise identified to my satisfaction, of such documents, trust records and other instruments I have deemed necessary or appropriate for the purpose of rendering this opinion. For purposes of such examination, I have assumed the genuineness of all signatures on original documents and the conformity to the original of all copies. On the basis of this examination, it is my opinion that:
1. The Company was organized in accordance with the laws of the State of Connecticut and is a duly authorized stock life insurance company under the laws of Connecticut and the laws of those states in which the Company is admitted to do business;
2. The Company is authorized to issue Contracts in those states in which it is admitted and upon compliance with applicable local law;
3. The Contracts, when issued in accordance with the prospectus contained in the aforesaid registration statement and upon compliance with applicable local law, will be legal and binding obligations of the Company in accordance with their terms;
4. The interests in the Contracts will, when issued and sold in the manner described in the registration statement, be legal and binding obligations of the Company and will be legally and validly issued, fully paid, and non-assessable.
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PLAN | INVEST | PROTECT |
Voya Logo |
U.S. Securities and Exchange Commission
Page 2
I hereby consent to the filing of this opinion as an exhibit to the aforesaid registration statement. In giving this consent I do not thereby admit that I come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or the Rules and Regulations of the Securities and Exchange Commission thereunder.
Sincerely,
/s/ Peter M. Scavongelli
Peter M. Scavongelli
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PLAN | INVEST | PROTECT |
Voya Logo |
Exhibit 16(23)(a) – Consent of Independent Registered Public Accounting Firm
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Exhibit 16(23)(a)– Consent of Independent Registered Public Accounting Firm |
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We consent to the reference to our firm under the caption “Experts” in the Registration Statement (Form S-3, No. 333-) and related Prospectus of Voya Retirement Insurance and Annuity Company (“VRIAC”) and to the incorporation by reference therein of our report dated March 16, 2021, with respect to the consolidated financial statements and schedule of VRIAC included in its Annual Report (Form 10-K) for the year ended December 31, 2020, filed with the Securities and Exchange Commission. |
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/s/ Ernst & Young LLP |
San Antonio, TX
April 2, 2021