EXHIBIT 4(a)
GROUP ANNUITY CONTRACT
Keyport
Life Insurance Company
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Providence, Rhode Island
SINGLE PREMIUM DEFERRED MODIFIED GUARANTEED ANNUITY
GROUP ANNUITY CONTRACT
NON-PARTICIPATING
MVA(1)
Keyport
Life Insurance Company
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A Stock Company
In this Group Contract, Keyport Life Insurance Company is referred to as "We,"
"Us," "Our," or the "Company."
This Group Contract, as issued to the Group Contract Owner by Us with any riders
or endorsements, alone makes up the agreement under which benefits are paid. The
Group Contract may be inspected at the office of the Group Contract Owner. In
consideration of any application for a Certificate and the payment of the Single
Premium, We agree, subject to the terms and conditions of the Group Contract, to
provide the benefits described in a Certificate to the Certificate Owner.
If a Certificate is In Force on the Income Date, We will begin making income
payments to the Annuitant. We will make such payments according to the terms of
the Certificate and Group Contract.
RIGHT TO EXAMINE CERTIFICATE: A Certificate Owner may return a Certificate to
Us or the agent through whom it was purchased within 10 days of receipt. If so
returned, We will treat the Certificate as though it were never issued. Upon
receipt We will promptly refund the Single Premium.
READ THIS CONTRACT CAREFULLY.
Secretary President
SINGLE PREMIUM DEFERRED MODIFIED GUARANTEED ANNUITY
GROUP ANNUITY CONTRACT
NON-PARTICIPATING
VALUES PROVIDED BY A CERTIFICATE ARE SUBJECT TO A MARKET VALUE ADJUSTMENT, THE
OPERATION OF WHICH MAY RESULT IN UPWARD OR DOWNWARD ADJUSTMENTS IN AMOUNTS
TRANSFERRED AND AMOUNTS PAID (INCLUDING WITHDRAWALS, SURRENDERS, DEATH BENEFITS,
AND AMOUNTS APPLIED TO PURCHASE ANNUITY PAYMENTS) TO A CERTIFICATE OWNER OR
OTHER PAYEE. PAYMENTS MADE FROM ACCOUNT VALUES THAT ARE WITHIN THE WINDOW PERIOD
ARE NOT SUBJECT TO THE MARKET VALUE ADJUSTMENT.
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TABLE OF CONTENTS
Page
Right to Examine Certificate.................................................1
Definitions..................................................................2
Contract Schedule............................................................3
General Provisions...........................................................7
The Accounts................................................................11
The Interest Accounts.......................................................11
The Indexed Accounts........................................................12
Calculation of Values.......................................................13
Market Value Adjustment.....................................................14
Transfers.................................................................. 16
Withdrawals and Surrender.................................................. 17
Death Provisions........................................................... 18
Annuity Provisions......................................................... 19
Endorsements (if any) are before page...................................... 23
DEFINITIONS
ACCOUNT: An Indexed Account or Interest Account.
ACCOUNT ANNIVERSARY: An anniversary of the most recent Reset Date for an
Account.
ACCOUNT VALUE: Indexed Account Value or Interest Account Value, whichever is
applicable. These are defined in the Calculation of Values provision.
ACCOUNT YEAR: The first Account Year is the annual period which begins on the
most recent Reset Date for an Account. Subsequent Account Years begin on each
Account Anniversary.
ADJUSTED ACCOUNT VALUE: The Account Value, plus or minus any applicable Market
Value Adjustment.
ADJUSTED CERTIFICATE VALUE: The Certificate Value multiplied by the ratio of the
Adjusted Account Value to the Account Value.
ANNUITANT: The natural person on whose life Annuity Payments are based, and to
whom any Annuity Payments will be made starting on the Income Date.
ANNUITY OPTIONS: Options available for Annuity Payments.
(Definitions continue on page 5)
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KEYPORT LIFE INSURANCE COMPANY
000 XXXX XXXXXX, XXXXXX, XX 00000
Modified Guaranteed Annuity - The Contract Schedule
GROUP CONTRACT OWNER [Keyport Insurance Trust]
GROUP CONTRACT NUMBER [123455]
GROUP CONTRACT ISSUE DATE [November 1, 1995]
SURRENDER CHARGE
No surrender charge is imposed during the Certificate Year preceding the Income
Date or during the Window Period for an Account. After the Window Period, at the
time of each partial withdrawal or at total surrender a surrender charge is
deducted from the amount payable. The surrender charge is a percentage of: in
the case of a partial withdrawal, the partial withdrawal amount before any
applicable Market Value Adjustment, less any amount excluded from surrender
charges by the Partial Withdrawals provision; and in the case of a total
surrender, the Account Value less any amount excluded from surrender charges by
the Surrender provision. The surrender charge will not be more than [10%].
The surrender charge depends on the Term and number of years remaining until the
end of the Term. The number of years remaining is rounded up to the next whole
number and used to look up the surrender charge percentage in the following
table:
Term (Length in Years)
Years [10 9 8 7 6 5 4 3 2] 1
Remaining
1 [1% 1% 1% 1% 1% 1% 1% 1% 1% 1%]
[2 2 2 2 2 2 2 2 2 2]
[3 3 3 3 3 3 3 3 3]
[4 4 4 4 4 4 4 4]
[5 5 5 5 5 5 5]
[6 6 6 6 6 6]
[7 7 7 7 7]
[8 7 7 7]
[9 7 7]
[10 7]
If a Term length different from those above is ever offered by Us and selected
by a Certificate Owner, We will inform a Certificate Owner in writing of the
surrender charge percentages for that Term.
TRANSFER CHARGE
Currently none, however, We reserve the right to charge [$25] for a transfer if
a Certificate Owner make more than [4] transfers per Certificate Year.
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INDEX
[The Standard & Poor's 500 Composite Stock Price Index. "Standard & Poor's 500"
is a trademark of XxXxxx-xxxx, Inc. and has been licensed for use by Keyport
Life Insurance Company. This annuity is not sponsored, endorsed, sold or
promoted by Standard & Poor's and Standard & Poor's makes no representation
regarding the advisability of purchasing the annuity.]
SINGLE PREMIUM ALLOCATION
Currently, Certificate Owners can select among Interest Accounts with Terms of
[1-10] years and Indexed Accounts with Terms of [1-10] years. Currently, the
Scaling Factor for Indexed Accounts is [1] for a 3-year Term and [1] for a 10-
year Term, and is calculated by straight line interpolation for Terms of 4-9
years.
PARTIAL WITHDRAWALS
Minimum withdrawal amount: [$300], unless the withdrawal is made pursuant to Our
systematic withdrawal program, in which case the minimum withdrawal is [$100].
Minimum Account Value which must remain after a partial withdrawal: [$2,500].
Partial Withdrawal Percentage: [10%]
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DEFINITIONS (Continued)
ANNUITY PAYMENTS: The series of payments made to the Annuitant, starting on the
Income Date, under the Annuity Option selected.
ANNUITY PERIOD: The period after the Income Date during which Annuity Payments
are made.
ANNUITY VALUE: The greater of: (a) the Adjusted Account Value; and (b) the
Adjusted Certificate Value.
BENEFICIARY: The person(s) or entity(ies) who controls the Certificate if any
Certificate Owner dies before the Income Date.
CAP: The maximum percentage by which an Indexed Account will be increased for a
Term. We will declare the Cap for an Indexed Account at each Reset Date on a
basis which does not discriminate unfairly within any class of Certificates.
CERTIFICATE: The document issued to a Certificate Owner to evidence a
Certificate Owner's participation under the Group Contract. The Certificate
summarizes the benefits and provisions of the Group Contract. All owners must
exercise ownership rights and privileges together, including the signing of
Written Requests.
CERTIFICATE ANNIVERSARY: An anniversary of the Certificate Issue Date.
CERTIFICATE ISSUE DATE: The date a Certificate is issued to a Certificate
Owner. The Certificate Issue Date is shown on the Certificate Schedule.
CERTIFICATE OWNER: The person who owns a Certificate under the Group Contract.
Any Joint Certificate Owners and the Certificate Owner own the Certificate
equally with rights of survivorship.
CERTIFICATE VALUE: As defined in the Calculation of Values provision.
CERTIFICATE WITHDRAWAL VALUE: The greater of: (a) the Adjusted Account Value
less any applicable surrender charges; and (b) the Adjusted Certificate Value.
CERTIFICATE YEAR: The first Certificate Year is the annual period which begins
on the Certificate Issue Date. Subsequent Certificate Years begin on each
Certificate Anniversary.
FIXED ANNUITY: An annuity with a series of payments made during the Annuity
Period which are guaranteed as to dollar amount by Us.
FLOOR: The minimum percentage by which an Indexed Account will be increased for
a Term. The Floor will never be less than 0%. We will declare the Floor for an
Indexed Account at each Reset Date on a basis which does not discriminate
unfairly within any class of Certificates.
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GENERAL ACCOUNT: Our general investment account which contains all of Our
assets except those in separate accounts.
GROUP CONTRACT OWNER: The person or entity to which the Group Contract is
issued.
GUARANTEED INTEREST RATE: The effective annual interest rate which We will
credit for a specified Term.
INCOME DATE: The date on which Annuity Payments begin. The Income Date is shown
on the Certificate Schedule.
INDEX: The Index shown on the Certificate Schedule. If the publication of the
Index is discontinued, or the calculation of the Index is changed substantially,
We will substitute a suitable index and notify a Certificate Owner.
INDEXED ACCOUNT: An account for which We calculate values depending on increases
in an Index.
INTEREST ACCOUNT: An account to which We credit a specified and guaranteed rate
of interest.
IN FORCE: The status of a Certificate before the Income Date so long as it has
not been totally surrendered and there has not been a death of a Certificate
Owner or Joint Certificate Owner that will cause the Certificate to end within
five years of the date of death.
OFFICE: Our executive office shown on the Certificate Schedule.
PARTICIPATION RATE: The percentage of the increase in the Index used to
calculate the Index Increase for an Indexed Account for a Term. We will declare
the Participation Rate for an Indexed Account at each Reset Date on a basis
which does not discriminate unfairly within any class of Certificates.
PERSON: A human being, trust, corporation, or any other legally recognized
entity.
RESET DATE: The date that an amount is allocated to an Account is the first
Reset Date for that Account. The start of the next Term is the next Reset Date
for that Account.
SINGLE PREMIUM: The payment made by or on behalf of a Certificate Owner with
respect to a Certificate.
TERM: A specific number of years for which the Company agrees to credit a
particular effective annual rate of interest to an Interest Account, or to apply
a particular Participation Rate, Cap, and Floor to an Indexed Account.
TRANSFER WINDOW - The first 10 calendar days after the end of each full Term.
WE, US, OUR: Keyport Life Insurance Company.
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WINDOW PERIOD - The first 30 calendar days after the end of each full Term.
WRITTEN REQUEST: A request in writing, in a form satisfactory to Us, and
received by Us at Our Office.
GENERAL PROVISIONS
SINGLE PREMIUM
The Single Premium is due on the Certificate Issue Date. It must be paid at Our
Office in United States currency. Coverage under a Certificate does not take
effect until We have accepted the Single Premium during a Certificate Owner's
lifetime.
ALLOCATION OF SINGLE PREMIUM
A Certificate Owner's Single Premium is allocated to one of the Accounts in
accordance with the selections made by a Certificate Owner at the Certificate
Issue Date. Allocation of a Certificate Owner's Single Premium is subject to the
terms and conditions imposed by Us.
THE CONTRACT
The Group Contract, including the application, if any, and any attached rider or
endorsement constitute the entire contract between the Group Contract Owner and
Us. All statements made by the Group Contract Owner, any Certificate Owner or
any Annuitant will be deemed representations and not warranties. No such
statement will be used in any contest unless it is contained in the application
signed by the Group Contract Owner or in a Certificate Enrollment Form signed by
the Certificate Owner, a copy of which has been furnished to the Certificate
Owner, the Beneficiary or the Group Contract Owner.
Only Our President or Secretary may agree to change any of the terms of the
Group Contract or a Certificate. Any changes must be in writing. Any change to
the terms of a Certificate must be with a Certificate Owner's consent, unless
provided otherwise by the Group Contract and the Certificate.
To assure that the Group Contract and the Certificate will maintain their status
as an annuity under the Internal Revenue Code, We reserve the right to change
the Group Contract and any Certificate issued thereunder to comply with future
changes in the Internal Revenue Code, any regulations or rulings issued
thereunder, and any requirements otherwise imposed by the Internal Revenue
Service. The Group Contract Owner and the affected Certificate Owner will be
sent a copy of any such amendment.
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CERTIFICATE OWNER
A Certificate Owner has all rights and may receive all benefits under a
Certificate. A Certificate Owner is the person designated as such on the
Certificate Issue Date, unless changed. a Certificate Owner may exercise all
rights of a Certificate while it is In Force, subject to the rights of (a) any
assignee under an assignment filed with Us, and (b) any irrevocably named
Beneficiary.
JOINT CERTIFICATE OWNER
A Certificate can be owned by Joint Certificate Owners. Upon the death of any
Certificate Owner or Joint Certificate Owner, the surviving owner(s) will be the
primary Beneficiary(ies). Any other beneficiary designation will be treated as a
Contingent Beneficiary unless otherwise indicated in a Written Request filed
with Us.
ANNUITANT
The Annuitant is the person on whose life Annuity Payments are based. The
Annuitant is the person designated by a Certificate Owner at the Certificate
Issue Date, unless changed prior to the Income Date. Any change of Annuitant is
subject to Our underwriting rules then in effect. The Annuitant may not be
changed in a Certificate which is owned by a non-natural person. A Certificate
Owner may name a Contingent Annuitant. The Contingent Annuitant becomes the
Annuitant if the Annuitant dies while a Certificate is In Force. If the
Annuitant dies and no Contingent Annuitant has been named, We will allow a
Certificate Owner sixty days to designate someone other than a Certificate
Ownerrself as Annuitant. A Certificate Owner will be the Contingent Annuitant
unless a Certificate Owner name someone else. If the Certificate is owned by a
non-natural person, the death of the Annuitant will be treated as the death of
the Certificate Owner and a new Annuitant may not be designated.
BENEFICIARY
The Beneficiary is the person who controls the Certificate if any Certificate
Owner dies prior to the Income Date. If the Certificate is owned by Joint
Certificate Owners, upon the death of any Certificate Owner or Joint Certificate
Owner, the surviving owner(s) will become the primary Beneficiary. Any other
beneficiary designation will be treated as a Contingent Beneficiary unless
otherwise indicated in a Written Request filed with Us. If a Certificate Owner
names more than one Person as primary Beneficiary or as Contingent Beneficiary,
and do not state otherwise on the application or in a Written Request to Us, any
non-survivors will not receive a benefit. The survivors will receive equal
shares. Subject to the rights of any irrevocable Beneficiary(ies), a Certificate
Owner may change primary or contingent Beneficiary(ies). A change must be made
by Written Request and will be effective as of the date the Written Request is
signed. We will not be liable for any payment We make or action We take before
We receive the Written Request.
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GROUP CONTRACT OWNER
The Group Contract Owner has title to the Group Contract. The Group Contract and
any amount accumulated under any Certificate are not subject to the claims of
the Group Contract Owner or any of its creditors. The Group Contract Owner may
transfer ownership of this Group Contract. Any transfer of ownership terminates
the interest of any existing Group Contract Owner. It does not change the rights
of any Certificate Owner.
CHANGE OF CERTIFICATE OWNER, BENEFICIARY OR CONTINGENT ANNUITANT
While a Certificate is In Force, a Certificate Owner may by Written Request
change the primary Certificate Owner, Joint Certificate Owner, primary
Beneficiary, Contingent Beneficiary, Contingent Annuitant, or in certain
instances, the Annuitant. An irrevocably named Person may be changed only with
the written consent of such Person. The change will be effective, following Our
receipt of the Written Request, as of the date the Written Request is signed.
The change will not affect any payments We make or actions We take prior to the
time We receive the Written Request.
ASSIGNMENT OF THE CERTIFICATE
A Certificate Owner may assign a Certificate at any time while it is In Force.
The assignment must be in writing and a copy must be filed at Our Office. A
Certificate Owner's rights and those of any revocably named Person will be
subject to the assignment. An assignment will not affect any payments We make or
actions We take before We receive the assignment. We are not responsible for the
validity of any assignment.
MISSTATEMENT OF AGE OR SEX
If the age or sex of the Annuitant or any payee has been misstated, We will
compute the amount payable based on the correct age and sex. If Annuity Payments
have begun, any underpayment(s) that have been made will be paid in full with
the next Annuity Payment. Any overpayment, unless repaid to Us in one sum, will
be deducted from future Annuity Payments otherwise due until We are repaid in
full.
NON-PARTICIPATING
A Certificate does not participate in Our divisible surplus.
EVIDENCE OF DEATH, AGE, SEX OR SURVIVAL
If a Certificate provision relates to the death of a natural Person, we will
require proof of death before We will act under that provision. Proof of death
shall be: (a) a certified death certificate; or (b) a certified decree of a
court of competent jurisdiction as to the finding of death; or (c) a written
statement by a medical doctor who attended the deceased; or (d) any other
document constituting due proof of death under applicable state law. If Our
action under a Certificate provision is based on the
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age, sex, or survival of any Person, We may require evidence of the particular
fact before we act under that provision.
PROTECTION OF PROCEEDS
No Beneficiary or payee may commute or assign any payments under a Certificate
before they are due. To the extent permitted by law, no payments shall be
subject to the debts of any Beneficiary or payee or to any judicial process for
payment of those debts.
REPORTS
We will send Certificate Owners a report that shows the Account Value, the
Certificate Withdrawal Value, the Market Value Adjustment used to determine the
Certificate Withdrawal Value, and any surrender charge, at least once each
Certificate Year. We will send any other reports that may be required by law.
TAXES
Any taxes paid to any governmental entity relating to a Certificate will be
deducted from the Single Premium or Account Value. We may, in Our sole
discretion, delay the deduction until a later date, including the Income Date.
By not deducting tax payments at the time of Our payment, We do not waive any
right We may have to deduct amounts at a later date. We will, in Our sole
discretion, determine when taxes relate to a Certificate. We will deduct from
any payment under a Certificate any withholding taxes required by applicable
law.
REGULATORY REQUIREMENTS
All values payable under a Certificate will not be less than the minimum
benefits required by the laws and regulations of the states in which the
Certificate is delivered.
THE SEPARATE ACCOUNT
Separate Account C is a nonunitized separate account organized under and
governed by the laws of the State of Rhode Island, Our state of domicile. The
Separate Account consists of assets set aside by Us, which are kept separate
from Our general assets and all other separate account assets We maintain. We
own the assets of the Separate Account. Subject to applicable law, We have sole
discretion over investment of assets in the Separate Account.
We may transfer to Our General Account assets which exceed the reserves and
other liabilities of the Separate Account. Income and realized and unrealized
gains or losses from assets in the Separate Account are credited to or charged
against the account without regard to other income, gains or losses in Our other
investment accounts.
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Our obligations under (and the values and benefits under) the Certificates do
not vary as a function of the investment performance of the Separate Account.
Certificate Owners, Beneficiaries and payees with rights under a Certificate do
not participate in the investment gains or losses of the assets of the Separate
Account. We retain the risk that the value of the assets in the Separate Account
may fall below the reserves and other liabilities that it must maintain in
connection with its obligations under the Certificates. In such an event, the
Company will transfer assets from its General Account to the Separate Account to
make up the difference.
The Separate Account is not registered as an investment company under the
Investment Company Act of 1940.
THE ACCOUNTS
The Single Premium may be allocated to, and transfers of Account Value may be
made to, one of the Accounts. We will allocate the Single Premium to the Account
a Certificate Owner selects based on a Certificate Owner's allocation
instructions (as stated on the Certificate Date).
A Term begins on the date as of which the Single Premium is allocated or an
amount is transferred to the Account and ends when the number of years in the
Term elected has elapsed. The last day of the Term is the expiration date for
that Term. Subsequent Terms begin on the first day following the expiration date
of a previous Term (the Reset Date).
We will notify a Certificate Owner in writing at least 30 days prior to the
expiration date of any Term. A new Term of the shortest duration We then offer
for the expiring Account will commence automatically on the Reset Date unless We
receive a Certificate Owner's Written Request prior to the start of the new Term
of a Certificate Owner's election of a different Term from among those being
offered by Us at that time, or instructions to transfer the expiring Account
Value to another Account. A new Term cannot be longer than the number of years
remaining until the Income Date. If less than one year is remaining, the new
Term will automatically be the one-year Interest Account.
If an Account Value is surrendered, withdrawn, transferred, or applied to an
Annuity Payment Option prior to the expiration of the Term, the Account Value is
subject to a Market Value Adjustment, as described below.
To the extent permitted by law, We reserve the right at any time to offer Terms
that differ from those available when a Certificate Owner's Certificate was
issued. We also reserve the right, at any time, to stop accepting Single Premium
allocations, transfers of Account Value, or subsequent Term renewals to a
particular Term. Since the specific Terms available may change periodically,
please contact Us to determine the Terms currently being offered.
THE INTEREST ACCOUNTS
Through the Interest Accounts, We offer specified effective annual rates of
interest (Guaranteed Interest Rates) that are available for specified periods of
time (Terms) selected by a Certificate Owner.
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Although the Guaranteed Interest Rate may differ among Terms, it will never be
less than 3% per year. The applicable Guaranteed Interest Rate does not change
during a Term.
Allocations of the Single Premium and transfers to the Interest Accounts may
have different applicable Guaranteed Interest Rates depending on the timing of
such allocations or transfers. We reserve the right to offer a different
Guaranteed Interest Rate to allocations than to transfers.
If the allocated or transferred amount remains in the Interest Account until the
end of the applicable Term, its value will be equal to the amount originally
allocated or transferred plus all interest credited to the Interest Account less
all amounts withdrawn from the Interest Account. Interest is credited daily at a
rate which, compounded, equals an effective annual rate equal to the Guaranteed
Interest Rate.
Our notice to a Certificate Owner of the expiration of a Term will contain
information about the then currently available Terms.
THE INDEXED ACCOUNTS
Through the Indexed Accounts, We offer participation in increases in a specified
Index. The participation is determined based on a formula with specified
parameters (the Participation Rate, Cap, and Floor) that are available for
specified periods of time (Terms) selected by a Certificate Owner. The rate at
which the value of an Indexed Account grows depends on changes in the Index on
which it is based, as well as its Cap, Floor, and Participation Rate. The
Participation Rate, Cap, and Floor may differ among Terms. However, the
applicable Participation Rate, Cap, and Floor do not change during a Term.
Allocations of the Single Premium and transfers of Account Value to the Indexed
Accounts may have different applicable Participation Rates, Caps, and Floors
depending on the timing of such allocations or transfers. We reserve the right
to offer a different Participation Rate, Cap, and Floor to allocations than to
transfers.
If the allocated or transferred amount remains in the Indexed Account until the
end of the applicable Term, its value will be equal to the amount originally
allocated or transferred plus all Index Increases made to the Indexed Account
(including End of Term Increases) less all amounts withdrawn from the Indexed
Account.
Our notice to a Certificate Owner of the expiration of a Term will contain
information about the then currently available Terms.
INDEX INCREASES
We will calculate the Index Increase for an Indexed Account at each Account
Anniversary after the Reset Date using the Index and the Participation Rate,
subject to the Cap and Floor. We use an Index growth percentage in calculating
the Index Increase. This Index growth percentage can be no more than the Cap and
no less than the Floor for a Certificate Owner's current Term.
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Subject to these maximum and minimum limits, the growth percentage on each
Account Anniversary within a Term equals:
A x (B - C)/C
where:
"A" is the Participation Rate for the Indexed Account;
"B" is the highest value of the Index on any Account Anniversary during the Term
(including the start of the Term and the current Account Anniversary); and
"C" is the value of the Index at the previous Reset Date.
The Index Increase on each Account Anniversary within a Term equals:
(D x E) - F
where:
"D" is the Index growth percentage on the current Account Anniversary (see
above);
"E" is the smallest of the Account Value on the most recent Reset Date and the
Account Value (prior to crediting of any Index Increases) on any Account
Anniversary during the Term (including the current Account Anniversary); and
"F" is the sum of all prior Index Increases for the Indexed Account during the
Term.
The Index Increase cannot be less than zero. If the Index Increase is greater
than zero we will increase the Indexed Account Value by the Index Increase.
END OF TERM INCREASE
If at the end of a Term the Indexed Account Value, after making any Index
Increases, is less than the Certificate Value, the End of Term Increase will
equal the excess of the Certificate Value over the Indexed Account Value.
CALCULATION OF VALUES
INTEREST ACCOUNT VALUE
The value of an Interest Account at any time is equal to:
(a) all allocations and transfers to the Interest Account; plus
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(b) all interest credited to the Interest Account at the Guaranteed
Interest Rate; less
(c) all amounts transferred or withdrawn from the Interest Account.
INDEXED ACCOUNT VALUE
The value of an Indexed Account at any time is equal to:
(a) all allocations and transfers to the Indexed Account; plus
(b) all Index Increases (including any End of Term Increases) made to the
Indexed account; less
(c) all amounts transferred or withdrawn from the Indexed Account.
CERTIFICATE VALUE
The Certificate Value at any time is equal to:
(a) 90% of the Single Premium; plus
(b) any Excess Interest Credits; less
(c) all amounts withdrawn from the Account; plus
(d) at the time of any transfer when a Market Value Adjustment applies,
the positive or negative amount equal to the Adjusted Certificate
Value less the Certificate Value; plus
(e) interest on the above items (a) through (d) credited annually at a
rate of 3% per year.
Excess Interest Credits
On each Reset Date, after making any Index Increase, we will calculate an Excess
Interest Credit. The amount of the Excess Interest Credit will be the amount, if
any, by which (a) plus (b) exceeds (c), where:
(a) is the sum of all Index Increases ever made to the Indexed Account
Values;
(b) is all interest ever credited to the Interest Accounts; and
(c) is all interest and previous Excess Interest Credits ever credited to
the Certificate Value.
MARKET VALUE ADJUSTMENT
APPLICATION OF MARKET VALUE ADJUSTMENT
Any surrender, withdrawal, or application to an Annuity Payment Option of an
Account Value from an Account with a Term of three years or more is subject to a
Market Value Adjustment, unless the effective date of the surrender, withdrawal,
or application is within the Window Period for the Account.
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Any transfer of an Account Value from an Account with a Term of three years or
more is subject to a Market Value Adjustment, unless the effective date of the
transfer is:
(a) within the final year of the Term and the transfer is to an Account
with a Term of three or more years; or
(b) within the Transfer Window.
No Market Value Adjustment is ever applicable to Accounts with a Term of less
than three years.
EFFECT OF MARKET VALUE ADJUSTMENT
A Market Value Adjustment reflects the change in prevailing current interest
rates since the most recent Reset Date. The Market Value Adjustment may be
positive or negative.
Generally, if the Treasury Rate for a Certificate Owner's Account is lower than
the Treasury Rate for new Accounts with a Term equal to the balance of the Term
for a Certificate Owner's Account, then the application of the Market Value
Adjustment will result in the payment of an amount less than the Account Value
(or portion thereof) being surrendered, withdrawn, transferred or applied to an
Annuity Payment Option.
Similarly, if the Treasury Rate for a Certificate Owner's Account is higher than
the Treasury Rate for new Accounts with a Term equal to the balance of the Term
for a Certificate Owner's Account, then the application of the Market Value
Adjustment will result in the payment of an amount greater than the Account
Value (or portion thereof) being surrendered, withdrawn, transferred or applied
to an Annuity Payment Option.
The Market Value Adjustment will be applied before the deduction of any
applicable surrender charge or applicable taxes.
MARKET VALUE ADJUSTMENT FACTOR
The Market Value Adjustment is computed by multiplying the amount being
surrendered, withdrawn, transferred, or applied to an Annuity Payment Option, by
the Market Value Adjustment Factor. However, if a Certificate Owner has not
previously made a partial withdrawal in the Certificate Year of a Certificate
Owner's surrender, withdrawal or transfer, the Market Value Adjustment Factor
will instead be multiplied by the amount being surrendered, withdrawn or
transferred less the partial withdrawal amount defined in the first paragraph of
the Partial Withdrawals provision. The Market Value Adjustment Factor is
calculated as:
[(1+a)/(1+b)](n/12) - 1
where:
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"a" is the Treasury Rate for the Term of a Certificate Owner's Account from
which the amount is taken;
"b" is the Treasury Rate for a period equal to the time remaining (rounded up to
the next whole number of years) to the expiration of the Term for the Account
from which the amount is taken; and
"n" is the number of complete months remaining before the expiration of the Term
for a Certificate Owner's Account from which the amount is taken, times the
applicable Scaling Factor from the Certificate Schedule if the Certificate
Owner's Account is an Indexed Account.
TREASURY RATES
The Treasury Rate for an Account is the interest rate in the Treasury Constant
Maturity Series, as published by the Federal Reserve Board, for a maturity equal
to the number of years specified in "a" and "b" above. For "a", We use the
Treasury Constant Maturity Series for the week which includes the most recent
Determination Date on or preceding the Reset Date for a Certificate Owner's
Account. For "b", We use the Treasury Constant Maturity Series for the week
which includes the most recent Determination Date on or preceding the date of
calculation of the Market Value Adjustment Factor. The Determination Dates are
the last business day prior to the first and fifteenth of each calendar month.
If the number of years specified in "a" or "b" above is not equal to a maturity
in the Treasury Constant Maturity Series, the Treasury Rate will be determined
by straight line interpolation between the interest rates of the next highest
and next lowest maturities. The one-year rate will be used for any periods equal
to or less than twelve (12) months.
If the Treasury Constant Maturity Series becomes unavailable, We will adopt a
comparable constant maturity index or, if such a comparable index also is not
available, We will replicate calculation of the Treasury Constant Maturity
Series Index based on U.S. Treasury Security coupon rates.
TRANSFERS
The value of an Indexed Account may be transferred to another Account only if
the effective date is within the Transfer Window. The amount transferred will
be equal to the Account Value.
The value of an Interest Account may be transferred to another Account at any
time before the Income Date. The amount transferred will be equal to the
Account Value with a Market Value Adjustment. However, the Market Value
Adjustment will not apply to transfers with an effective date:
(a) within the final year of the Term where the transfer is to an Account
with a Term of three or more years; or
(b) within the Transfer Window.
MVA(1) Page 16
No Market Value Adjustment is ever applicable to Accounts with a Term of less
than three years.
The following conditions apply to transfers:
(a) For a transfer not within the Transfer Window, the Term of the new
Account cannot be less than the number of years remaining in the Term
of the Account from which value is being transferred, rounded up to
the next whole number of years.
(b) The Term of the new Account cannot be longer than the number of years
remaining until the Income Date.
(c) Transfer instructions may be made by Written Request or by telephone.
We reserve the right, at any time and without prior notice to any party, to
terminate, suspend or modify the transfer privileges described above. We will
not be liable for transfers made in accordance with a Certificate Owner's
instructions.
WITHDRAWALS AND SURRENDER
SYSTEMATIC WITHDRAWALS
At any time before the Income Date, a Certificate Owner may make withdrawals of
interest earnings from the Interest Account subject to Our systematic withdrawal
program without incurring a surrender charge or Market Value Adjustment.
PARTIAL WITHDRAWALS
Before the Income Date while the Certificate is In Force, a Certificate Owner
may, once in each Certificate Year upon Written Request, make a partial
withdrawal of an amount no greater than the sum of:
(a) the Index Increases for any Indexed Accounts in the preceding year
from the date of the withdrawal, and
(b) interest earned by any Interest Accounts in the preceding year from
the date of the withdrawal,
but not more than the sum of:
(c) the Index Increases for any Indexed Accounts since the last partial
withdrawal, and
(d) interest earned by the Interest Accounts since the last partial
withdrawal,
MVA(1) PAGE 17
without incurring a surrender charge or Market Value Adjustment. However, a
Certificate Owner may withdraw an amount equal to the Partial Withdrawal
Percentage shown on the Certificate Schedule times the Account Value if this is
greater.
Surrender charges and Market Value Adjustments will apply to any partial
withdrawal amount in excess of the amounts described above or any subsequent
partial withdrawal made within the same Certificate Year. Each partial
withdrawal must be for an amount not less than the amount shown on the
Certificate Schedule. The Account Value which must remain is shown on the
Certificate Schedule. The Certificate Schedule also shows any surrender charge.
SURRENDER
Before the Income Date while the Certificate is In Force, a Certificate Owner
may, upon Written Request, make a total surrender of the Certificate.
Surrendering the Certificate will end it. We will pay a Certificate Owner the
Account Value during the Window Period. At other times we will pay a Certificate
Owner the Certificate Withdrawal Value; if a Certificate Owner has not
previously made a partial withdrawal in the Certificate Year of surrender, any
applicable surrender charge and Market Value Adjustment will apply only to the
surrender amount in excess of the partial withdrawal amount defined in the first
paragraph of the Partial Withdrawals provision.
For a total surrender made at any time after the first Certificate Year, instead
of receiving a Certificate Owner's surrender benefit in a lump sum, a
Certificate Owner may request that it be paid to a Certificate Owner under an
Annuity Option.
For lump sum withdrawal and surrender payments, We may delay payment for up to
six months from the date We receive the written request to surrender. This right
to delay is required by most states. We will notify you if there is to be a
delay.
DEATH PROVISIONS
DEATH OF CERTIFICATE OWNER
These provisions apply if, before the Income Date while the Certificate is In
Force, the Certificate Owner or any Joint Certificate Owner dies (whether or not
the decedent is also the Annuitant) or the Annuitant dies under a Certificate
owned by a non-natural Person. The "designated beneficiary" will control the
Certificate after such a death. This "designated beneficiary" will be the first
Person among the following who is alive on the date of death: Certificate Owner;
Joint Certificate Owner; primary Beneficiary; Contingent Beneficiary; and
Certificate Owner's estate. If the Certificate Owner and Joint Certificate Owner
are both alive, they shall be the "designated beneficiary" together.
If the decedent was the Certificate Owner or the Annuitant if the Certificate
Owner is not a natural person, the "designated beneficiary" may surrender a
Certificate within 90 days of the date of death for the greatest of the Account
Value, the Certificate Value, and the Certificate Withdrawal Value. For a
surrender after 90 days and for a surrender at any time after the death of the
Joint Certificate
MVA(1) PAGE 18
Owner, the Certificate Withdrawal Value is payable instead. If the Certificate
is not surrendered, it will stay in force for the time period specified below.
IF THE DECEDENT'S SURVIVING SPOUSE (IF ANY) IS THE SOLE "DESIGNATED
BENEFICIARY", the surviving spouse will automatically become the new sole
Certificate Owner as of the date of the death. And, if the Annuitant is the
decedent, the new Annuitant will be any living Contingent Annuitant, otherwise
the surviving spouse. The Certificate may stay in force until another death
occurs (i.e., until the death of the Certificate Owner or Joint Certificate
Owner). Except for this paragraph, all of "Death Provisions" will apply to that
subsequent death.
IN ALL OTHER CASES, the Certificate may stay in force up to five years from the
date of death. During this period, the "designated beneficiary" may exercise all
ownership rights, including the right to make transfers or partial withdrawals
or the right to surrender the Certificate for its Certificate Withdrawal Value.
If a Certificate is still in force at the end of the five-year period, We will
automatically end it then by paying to the "designated beneficiary" the
Certificate Withdrawal Value without the deduction of any applicable surrender
charges. If the "designated beneficiary" is not alive then, We will pay any
Person(s) named by the "designated beneficiary" in a Written Request; otherwise
the "designated beneficiary's" estate.
DEATH OF ANNUITANT
These provisions apply if before the Income Date while the Certificate is In
Force, (a) the Annuitant dies, (b) the Annuitant is not an Owner, and (c) the
Owner is a natural person. The Certificate will continue In Force after the
Annuitant's death. The new Annuitant will be any living Contingent Annuitant,
otherwise the Certificate Owner.
PAYMENT OF DEATH BENEFIT
Instead of receiving a lump sum, a Certificate Owner or any "designated
beneficiary" may by Written Request direct that We pay any benefit of $5,000 or
more under an Annuity Option that meets the following: (a) the first payment to
the "designated beneficiary" must be made no later than one year after the date
of death; (b) payments must be made over the life of the "designated
beneficiary" or over a period not extending beyond that person's life
expectancy; and (c) any Annuity Option that provides for payments to continue
after the death of the "designated beneficiary" will not allow the successor
payee to extend the period of time over which the remaining payments are to be
made.
ANNUITY PROVISIONS
GENERAL
If the Certificate is In Force on the Income Date, the Annuity Value will be
applied under the Annuity Option selected by a Certificate Owner. Annuity
Payments will be made on a fixed basis.
MVA(1) PAGE 19
INCOME DATE
The Income Date is shown on the Certificate Schedule. It is the later of the
Certificate Anniversary after the Annuitant's 85th birthday and the tenth
Certificate Anniversary.
ANNUITY OPTIONS
The following Annuity Options or any other Annuity Option acceptable to Us may
be selected:
A. ANNUITY FOR A FIXED NUMBER OF YEARS: Annuity Payments for a chosen number
of years, not less than 5. If the payee dies during the payment period and
the Beneficiary does not desire payments to continue for the remainder of
the period, he/she may elect to have the present value of the remaining
payments commuted and paid in a lump sum.
B. LIFE ANNUITY WITH PERIOD CERTAIN OF 10 YEARS: Annuity Payments during the
lifetime of the payee and in any event for 10 years certain. If the payee
dies during the guaranteed payment period and the Beneficiary does not
desire payments to continue for the remainder of the guaranteed period,
he/she may elect to have the present value of the guaranteed payments
remaining commuted and paid in a lump sum.
C. JOINT AND SURVIVOR ANNUITY: Annuity Payments payable during the joint
lifetime of the payee and a designated second natural person and then
during the lifetime of the survivor.
A payee may not withdraw or otherwise end an Annuity Option after it begins.
Payments will end upon the payee's death unless the Annuity Option provides for
payments continuing to a successor payee. No successor payee may extend the
period of time over which the remaining payments are to be made.
SELECTION OF AN ANNUITY OPTION
An Annuity Option may be selected by a Certificate Owner. If no Annuity Option
is selected, Option B will automatically be applied. Prior to the Income Date, a
Certificate Owner may change the Annuity Option selected by Written Request. Any
change must be requested at least 30 days prior to the Income Date.
FREQUENCY AND AMOUNT OF ANNUITY PAYMENTS
Annuity Payments are paid in monthly installments unless quarterly, semi-annual
or annual payments are chosen. The Annuity Value is applied to the Annuity Table
for the Annuity Option selected. If the Annuity Value is less than $5,000, We
reserve the right to make a lump sum payment in lieu of Annuity Payments. If the
Annuity Payment would be less than $100, We will reduce the frequency of
payments to a longer interval which will result in each payment being at least
$100.
MVA(1) PAGE 20
ANNUITY PAYMENTS
The Annuity Value is allocated to the General Account and the Annuity is paid as
a Fixed Annuity. The Annuity Value will be applied to the applicable Annuity
Table contained in the Certificate based upon the Annuity Option a Certificate
Owner selects. The dollar amount of each Annuity Payment for each $1,000 of
Annuity Value is shown in the Annuity Tables. After the initial Annuity Payment,
the payments will not change regardless of investment, mortality or expense
experience.
USING THE TABLES
Tables 2 and 3 are age-dependent. The amount of the first Annuity Payment will
be based on an age a specified number of years younger than the person's then-
attained age (i.e., age last birthday). This age setback is as follows:
Date of First Payment 1996-1999 2000-2009 2010-2019 2020-2029 2030 or later
Age Setback 1 year 2 years 4 years 5 years 6 years
We will calculate the amount for a payment frequency other than monthly and for
any ages not shown in the tables. Upon request, We will tell a Certificate Owner
any such amount.
BASIS OF CALCULATION
Table 1 is based on interest at 3% per year. Tables 2 and 3 are based on the
1983 Individual Annuity Valuation Tables, weighted 40% male and 60% female, with
interest at 3% per year, projected dynamically with Projection Scale G.
TABLE 1: MONTHLY PAYMENT PAYABLE UNDER OPTION A FOR EACH $1,000 APPLIED
YEARS PAYMENT YEARS PAYMENT YEARS PAYMENT YEARS PAYMENT
5 $17.91 12 $8.24 19 5.73 25 $4.71
6 15.14 13 7.71 20 5.51 26 4.59
7 13.16 14 7.26 21 5.32 27 4.47
8 11.68 15 6.87 22 5.15 28 4.37
9 10.53 16 6.53 23 4.99 29 4.27
10 9.61 17 6.23 24 4.84 30 4.18
11 8.86 18 5.96
MVA(1) Page 21
TABLE 2: MONTHLY PAYMENT PAYABLE UNDER OPTION B FOR EACH $1,000 APPLIED
AGE PAYMENT AGE PAYMENT AGE PAYMENT AGE PAYMENT AGE PAYMENT
30 $3.05 43 $3.46 56 $4.24 69 $5.79 82 $8.24
31 3.07 44 3.50 7 4.32 70 5.96 83 8.41
32 3.09 45 3.55 58 4.41 71 6.13 84 8.57
33 3.12 46 3.60 59 4.51 72 6.31 85 8.72
34 3.15 47 3.65 60 4.61 73 6.50 86 8.85
35 3.18 48 3.70 61 4.71 74 6.69 87 8.97
36 3.21 49 3.76 62 4.82 75 6.88 88 9.08
37 3.24 50 3.82 63 4.94 76 7.08 89 9.18
38 3.27 51 3.88 64 5.07 77 7.48 91 9.34
39 3.31 52 3.94 65 5.20 78 7.48 91 9.34
40 3.34 53 4.01 66 5.34 79 7.68 92 9.40
41 3.38 54 4.08 67 5.48 80 7.87 93 9.46
42 3.42 55 4.16 68 5.63 81 8.06 94 9.50
95 9.53
TABLE 3: MONTHLY PAYMENT PAYABLE UNDER OPTION C FOR EACH $1,000 APPLIED
COMBINATION OF AGES
30 35 40 45 50 55 60 65 70 75 80 85 90 95
30 $2.88 $2.92 $2.95 $2.98 $3.00 $3.01 $3.02 $3.03 $3.04 $3.04 $3.04 $3.05 $3.05 $3.05
35 2.97 3.02 3.06 3.09 3.12 3.14 3.15 3.16 3.17 3.17 3.18 3.18 3.18
40 3.09 3.15 3.20 3.24 3.27 3.30 3.32 3.33 3.34 3.34 3.34 3.35
45 3.24 3.31 3.38 3.44 3.48 3.51 3.53 3.54 3.55 3.56 3.56
50 3.43 3.53 3.62 3.69 3.74 3.78 3.80 3.82 3.83 3.83
55 3.68 3.81 3.93 4.02 4.09 4.13 4.16 4.18 4.19
60 4.01 4.19 4.35 4.47 4.56 4.61 4.65 4.66
65 4.47 4.73 4.94 5.11 5.21 5.28 5.32
70 5.11 5.48 5.78 6.00 6.13 6.21
75 6.04 6.57 6.99 7.28 7.46
80 7.40 8.16 8.75 9.15
85 9.38 10.46 11.29
90 12.18 13.68
95 16.02
MVA(1) PAGE 22
ENDORSEMENTS
To be inserted only by Us
MVA(1) PAGE 23
