-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GyTsK5TJhwWREy2uMOv9LKG0cnmCnVuNlMwwGTW/Ay4sXXf1iDYIhvV6oDhxTdED BCHNCYdjBYdbz8W1q+Z/nw== /in/edgar/work/0000881453-00-000313/0000881453-00-000313.txt : 20001025 0000881453-00-000313.hdr.sgml : 20001025 ACCESSION NUMBER: 0000881453-00-000313 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20001024 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN SKANDIA LIFE ASSURANCE CORP/CT CENTRAL INDEX KEY: 0000881453 STANDARD INDUSTRIAL CLASSIFICATION: [6399 ] IRS NUMBER: 061241288 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 033-62953 FILM NUMBER: 744757 BUSINESS ADDRESS: STREET 1: ONE CORPORATE DRIVE CITY: SHELTON STATE: CT ZIP: 06484 BUSINESS PHONE: 2039261888 MAIL ADDRESS: STREET 1: ONE CORPORATE DRIVE CITY: SHELTON STATE: CT ZIP: 06484 424B3 1 0001.txt ASL WELLS S2 DEFINITIVE Supplement to Prospectus Dated May 1, 2000 Supplement dated October 23, 2000 This Supplement should be retained with the current Prospectus for your variable annuity contract issued by American Skandia Life Assurance Corporation ("American Skandia"). If you do not have a current prospectus, please contact American Skandia at 1-800-SKANDIA. A. NOTICE OF SUBSTITUTION American Skandia has filed an exemptive application with the Securities and Exchange Commission ("SEC") to substitute the following "Replaced Portfolio/Sub-Account" with the "Substitute Portfolio/Sub-account". The Replaced Portfolio/Sub-account described below is only available until the effective date of the Substitution, at which time it will cease to be offered as an investment options. The Substitute Portfolio/Sub-account is only available as of the date of the Fund Substitution and is only available to those Contract Owners affected by the Fund Substitution.
- --------------------------------------------------------- ---------- --------------------------------------------------------------- REPLACED PORTFOLIO/SUB-ACCOUNT SUBSTITUTE PORTFOLIO/SUB-ACCOUNT - --------------------------------------------------------- ---------- --------------------------------------------------------------- Alger American Growth portfolio of The Alger American Fund/AA AST Alger Growth portfolio of American Skandia Trust/AST Growth Sub-account Alger Growth Sub-account - --------------------------------------------------------------- -------- ----------------------------------------------------------- The Alger American Fund - Growth: seeks long-term capital AST Alger Growth: seeks long-term capital growth. The appreciation. The Portfolio focuses on growing companies Portfolio invests primarily in equity securities, such as that generally have broad product lines, markets, financial common or preferred stocks, that are listed on U.S. resources and depth of management. Under normal exchanges or in the over-the-counter market. The Portfolio circumstances, the Portfolio invests primarily in the equity focuses on growing companies that generally have broad securities of large companies. The Portfolio considers a product lines, markets, financial resources and depth of large company to have a market capitalization of $1 billion management. The Portfolio normally invests at least 65% or greater. of its total assets in equity securities of companies that, at the time of purchase of the securities, have total market capitalizations of $1 billion or greater. - --------------------------------------------------------------- --- ---- -----------------------------------------------------------
We expect to receive the SEC Exemptive Order and complete the Substitution by the end of November 2000. Those Contract Owners effected by the Substitution will receive additional information from American Skandia notifying them of their rights under the SEC Exemptive Order. For a 30 day period following the Substitution, Contract Owners will be allowed to transfer Account Value out of the Replaced Portfolio/Sub-account to any other investment options available under the Annuity. Any such transfers during this period will not count in determining whether the maximum number of free transfers has been exceeded. Additionally, the transfer of Account Value from the Replaced Portfolio/Sub-account to the Substitute Portfolio/Sub-account would also not be subject to a transfer fee nor count in determining whether the maximum number of free transfers have been exceeded. The Substitution will not affect your rights or our obligations under the Annuity and American Skandia will bear any expenses in connection with the Substitution. B. ADDITIONAL VARIABLE INVESTMENT OPTIONS The underlying Portfolio shown below is being offered as a Sub-account under your Annuity.
- ------------------------------------------------------------------------------------------------------------------------------------ Underlying Mutual Fund Portfolio Annual Expenses (as a percentage of the average net assets of the underlying Portfolios) - ------------------------------------------------------------------------------------------------------------------------------------ - --------------------------------------------- --------------- ------------- --------------- -------------- -------------- ---------- Management Other 12b-1 Fees Total Annual Fee Net Fees Expenses Portfolio Waivers and Annual UNDERLYING PORTFOLIO Operating Expense Fund Expenses Reimbursement 1 Operating Expenses - --------------------------------------------- --------------- ------------- --------------- -------------- -------------- ---------- American Skandia Trust: 2 AST Alger Growth 3 0.75% 0.23% 0.00% 0.98% 0.19% 0.79% - --------------------------------------------- --------------- ------------- --------------- -------------- -------------- ----------
1 The Investment Manager of American Skandia Trust has agreed to reimburse and/or waive fees for certain Portfolios until at least April 30, 2001. The caption "Total Annual Fund Operating Expenses" reflects the Portfolios' fees and expenses before such waivers and reimbursements, while the caption "Net Annual Fund Operating Expenses" reflects the effect of such waivers and reimbursements. 2 American Skandia Trust (the "Trust") adopted a Distribution Plan (the "Distribution Plan") under Rule 12b-1 of the Investment Company Act of 1940 to permit an affiliate of the Trust's Investment Manager to receive brokerage commissions in connection with purchases and sales of securities held by Portfolios of the Trust, and to use these commissions to promote the sale of shares of such Portfolios. The staff of the Securities and Exchange Commission takes the position that commission amounts received under the Distribution Plan should be reflected as distribution expenses of the Portfolios. The Portfolios would pay the same or comparable commission amounts irrespective of the Distribution Plan; accordingly, total returns for the Portfolios are not expected to be adversely affected. The Distribution Fee estimates are derived from data regarding each Portfolio's brokerage transactions, and the proportions of such transactions directed to selling dealers, for the period ended December 31, 1999. However, it is not possible to determine with accuracy actual amounts that will be received under the Distribution Plan. Such amounts will vary based upon the level of a Portfolio's brokerage activity, the proportion of such activity directed under the Distribution Plan, and other factors. 3 This Portfolio commenced operations in October 2000, however, it is only available as of the date of the Fund Substitution and is only available to those Contract Owners affected by the Fund Substitution. "Other Expenses" and "12b-1 Fees" shown are based on estimated amounts for the fiscal year ending December 31, 2000. EXPENSE EXAMPLES The Expense Example shown below is being added with respect to the new Portfolio that is being offered as a Sub-account under your Annuity. - -------------------------------------------------------------------------------- Expense Examples (amounts shown are rounded to the nearest dollar) - -------------------------------------------------------------------------------- ---------------------------------------- There is no Contingent Deferred Sales Charge on withdrawals. Therefore, whether or not you surrender your Annuity at the end of the applicable time period or begin taking annuity payments at such time, you would pay the following expenses on a $1,000 investment, assuming 5% annual return on assets: ---------------------------------------- After: - ---------------------------------------- --------- --------- -------- ---------- Sub-Account: 1 Year 3 Years 5 Years 10 Years - ---------------------------------------- --------- --------- -------- ---------- AST Alger Growth 23 71 122 260 - ---------------------------------------- --------- --------- -------- ---------- C. PORTFOLIO/SUB-ACCOUNT NAME CHANGES 1. Effective October 23, 2000 GAMCO Investors, Inc. will be the new portfolio sub-advisor for the AST T. Rowe Price Small Company Value portfolio. In connection with this change the portfolio's name is changed to "AST Gabelli Small-Cap Growth." D. MAXIMUM NUMBER OF FREE TRANSFERS The maximum number of transfers you can make between investment options each Annuity Year without being subject to a Transfer Fee is increased from twelve (12) to twenty (20). E. PARTIAL EXCHANGES TAX CONSIDERATIONS The following paragraph replaces the corresponding paragraph under the Tax Considerations section in your Annuity prospectus: Special rules in relation to tax-free exchanges under Section 1035: On November 22, 1999, the Internal Revenue Service issued an acquiescence in the decision of the United States Tax Court in Conway v. Commissioner (111 T.C. 350 (1998)) that a taxpayer's partial surrender of a non-qualified annuity contract and direct transfer of the resulting proceeds for the purchase of a new non-qualified annuity contract qualifies as a non-taxable exchange under Section 1035 of the Internal Revenue Code. "Acquiescence" means that the IRS accepts the holding of the Court in a case and that the IRS will follow it in disposing of cases with the same controlling facts. Prior to the Conway decision, industry practice has been to treat a partial surrender of account value as fully taxable to the extent of any gain in the contract for tax reporting purposes and to "step-up" the basis in the contract accordingly. However with the IRS' acquiescence in the Conway decision, partial surrenders may be treated in the same way as tax-free 1035 exchanges of entire contracts, therefore avoiding current taxation of any gains in the contract as well as the 10% IRS tax penalty on pre-age 59 1/2 withdrawals. The IRS reserved the right to treat transactions it considers abusive as ineligible for this favorable partial 1035 exchange treatment. We do not know what transactions may be considered abusive. For example, we do not know how the IRS may view early withdrawals or annuitizations after a partial exchange. As of the date of this prospectus supplement, we will treat a partial surrender of this type as a "tax-free" exchange for future tax reporting purposes, except to the extent that we, as a reporting and withholding agent, believe that we would be expected to deem the transaction to be abusive. However, some insurance companies may not recognize these partial surrenders as tax-free exchanges and may report them as taxable distributions to the extent of any gain distributed as well as subjecting the taxable portion of the distribution to the 10% IRS early distribution penalty. We strongly urge you to discuss any transaction of this type with your tax advisor before proceeding with the transaction. While the principles expressed in the Conway decision appear applicable to partial exchanges from life insurance, there is no guidance from the Internal Revenue Service as to whether it concurs with non-recognition treatment under Section 1035 of the Code for such transactions. We will continue to report a partial surrender of a life insurance policy as subject to current taxation to the extent of any gain. In addition, please be cautioned that no specific guidance has been provided as to the impact of such a transaction for the remaining life insurance policy, particularly as to the subsequent methods to be used to test for compliance under the Code for both the definition of life insurance and the definition of a modified endowment contract. WFVASL-SUPP.- (10/23/2000) WFASL-SUPP. 10/23/00 -----END PRIVACY-ENHANCED MESSAGE-----