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As filed with the Securities and Exchange Commission on November 21, 2014 |
Registration No. 333-166370 |
UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
FORM S-3 |
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |
Post Effective Amendment No. 4 |
VOYA RETIREMENT INSURANCE AND ANNUITY COMPANY |
(Exact name of registrant as specified in its charter) |
Connecticut |
(State or other jurisdiction of incorporation or organization) |
71-0294708 |
(I.R.S. Employer Identification Number) |
One Orange Way |
Windsor, Connecticut 06095-4774 |
1-800-262-3862 |
(Address, including zip code, and telephone number, |
including area code, of registrant's principal executive offices) |
J. Neil McMurdie, Senior Counsel |
Voya Retirement Insurance and Annuity Company |
One Orange Way, C2N |
Windsor, Connecticut 06095-4774 |
(860) 580-2824 |
(Name, address, including zip code, and telephone number, |
including area code, of agent for service) |
As soon as practicable after the effective date of this registration statement. It is proposed that this filing |
become effective December 15, 2014. A request for acceleration is included with this filing. |
(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 to 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 a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the |
following box and list the Securities Act registration statement number of the earlier effective registration statement |
for the same offering. ¨ |
If this Form is a 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. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller | |
reporting 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 ¨ |
PART I | |
INFORMATION REQUIRED IN THE PROSPECTUS |
PROSPECTUS | |||
Voya Select Rate | |||
Single Premium Deferred Modified Guaranteed Annuity Contracts | |||
Issued By Voya Retirement Insurance and Annuity Company | |||
This prospectus sets forth the information you ought to know before investing. You should keep the prospectus for future reference. | |||
Additional information has been filed with the Securities and Exchange Commission (“SEC”) and is available upon written or oral | |||
request without charge. | |||
The SEC maintains a web site (www.sec.gov) that contains material incorporated by reference, and other information about us, which | |||
we file electronically. The reference number assigned to this contract is 333-166370. | |||
How to reach us… | |||
Customer Service | |||
Call: | (888) 854-5950 | ||
Write: | P.O. Box 10450, Des Moines, Iowa, 50306-0450 | ||
Visit: | www.voya.com | ||
The allocation options available under the Contract are Guarantee Periods. A Guarantee Period | |||
is equal to one or more Contract Years during which a declared Guarantee Period Interest Rate is guaranteed to be credited to the | |||
Single Premium or Accumulation Value, as applicable. See page 13. The following Guarantee Periods are currently available: | |||
Initial Guarantee Periods | Guarantee Periods for Renewals | ||
5 to 10 years | 1 year | ||
(5, 6, 7 etc.) | |||
You select the Initial Guarantee Period for the Single Premium. | We automatically apply the Accumulation Value to the | ||
1-year Guarantee Period at the end of the Initial Guarantee | |||
Period, or each succeeding Guarantee Period, as applicable, | |||
until you give us alternative instructions. | |||
IMPORTANT NOTE: For Contracts issued in Minnesota, the Initial Guarantee Period is limited to 5 years or less if the | |||
Owner is age 76 to 80. | |||
The SEC has not approved or disapproved these securities or passed upon the adequacy of this | |||
prospectus. Any representation to the contrary is a criminal offense. | |||
NOT: FDIC/NCUA INSURED; A DEPOSIT OF A BANK; BANK GUARANTEED; OR INSURED | |||
BY ANY FEDERAL GOVERNMENT AGENCY. MAY LOSE VALUE. | |||
RIGHT TO EXAMINE AND RETURN THIS CONTRACT PERIOD: You | |||
may return the contract within 10 days of its receipt (or longer as state law may require or | |||
when issued as a replacement contract). If so returned, we will promptly pay you the | |||
Accumulation Value, adjusted for any Market Value Adjustment, where permitted. See | |||
page 23. | |||
EXCHANGES: Your agent should only recommend an exchange (replacement) if it is in your | |||
best interest and only after evaluating your personal and financial situation and needs, tolerance | |||
for risk and financial ability to pay for the contract. | |||
We pay compensation to broker/dealers whose registered representatives sell the contract. | |||
See page 24. | |||
December 15, 2014 | 1 |
Contents | |||
Contents | 2 | Annuity Payments and Annuity Plans | 20 |
Summary – Contract Charges and Risk Factors | 5 | Annuity Payments | 20 |
Surrender Charges 5 | Annuity Plans | 21 | |
Risk Factors | 5 | Payments for a Period Certain 21 | |
Voya Retirement Insurance and Annuity Company | 6 | Payments for Life with a Period Certain | 21 |
Organization and Operation | 6 | Life Only Payments | 22 |
Separate Account | 6 | Joint and Last Survivor Life Payments | 22 |
Charges | 7 | Death of the Annuitant who is not an Owner | 22 |
Surrender Charge | 7 | Other Important Information | 22 |
Overnight Charge | 9 | Annual Report to Owners | 22 |
Premium Tax and Other Taxes | 9 | Suspension of Payments 22 | |
The Annuity Contract 9 | Misstatement Made by Owner in Connection with Purchase | ||
Owner | 9 | of this Contract 22 | |
Joint Owner | 9 | Insurable Interest | 22 |
Annuitant and Contingent Annuitant | 9 | Assignment | 23 |
Beneficiary | 10 | Contract Changes — Applicable Tax Law | 23 |
Change of Owner or Beneficiary | 10 | Right to Examine and Return this Contract Period | 23 |
Contract Purchase Requirements | 10 | Non-Waiver | 24 |
Availability of the Contract | 11 | Special Arrangements | 24 |
Crediting of Premium Payments | 12 | Selling the Contract | 24 |
Accumulation Value 12 | State Regulation | 26 | |
Anti-Money Laundering | 12 | Legal Proceedings | 26 |
Administrative Procedures | 13 | Legal Matters | 27 |
Other Contracts | 13 | Experts | 27 |
Guarantee Periods and Market Value Adjustment | 13 | Further Information | 27 |
Initial Guarantee Periods and Guarantee Periods for | Incorporation of Certain Documents by Reference | 27 | |
Renewals | 13 | Inquiries | 27 |
Initial Guarantee Period Interest Rate and Guarantee | United States Federal Tax Considerations | 28 | |
Period Interest Rate | 13 | Introduction | 28 |
Market Value Adjustment 14 | Types of Contracts: Nonqualified and Qualified | 28 | |
Surrender and Withdrawals | 17 | Taxation of Nonqualified Contracts | 28 |
Cash Surrender Value | 17 | Premiums | 28 |
Withdrawals | 17 | Taxation of Gains Prior to Distribution | 28 |
Regular Withdrawals and the Minimum Withdrawal | Taxation of Distributions | 29 | |
Amount | 17 | Taxation of Qualified Contracts | 31 |
Systematic Withdrawals | 18 | General | 31 |
Market Value Adjustments on Systematic Withdrawals 18 | Tax Deferral 32 | ||
Withdrawals from Individual Retirement Annuities | 18 | Contributions | 32 |
Death Benefit | 19 | Distributions – General 32 | |
Death Benefit prior to the Annuity Commencement Date 19 | Withholding | 34 | |
Spousal Beneficiary Contract Continuation | 19 | Assignment and Other Transfers 34 | |
Payment of the Death Benefit to a Spousal or Non-spousal | Possible Changes in Taxation | 34 | |
Beneficiary | 20 | Taxation of Company | 34 |
Death Benefit after the Annuity Commencement Date 20 | |||
2 |
Glossary | |
This glossary defines the special terms used throughout the prospectus. A special term used in only one section of the prospectus is | |
defined there. The page references are to sections of the prospectus where more information can be found about a special term. | |
Accumulation Value – On the Contract Date, the Single | Contract Date – The date on which this Contract becomes |
Premium less any premium tax, if applicable. At the end | effective. |
of each day thereafter, the Accumulation Value equals | Contract Year – The period beginning on a Contract |
the Accumulation Value as of the end of the preceding | Anniversary (or, in the first Contract Year only, beginning |
day plus the interest, if any, pursuant to the Guaranteed | on the Contract Date) and ending on the day preceding the |
Period Interest Rate, which is credited from the end of | next Contract Anniversary. |
the previous day to the end of the current day, minus the | Death Benefit – The amount payable to the Beneficiary upon |
amount of any Withdrawals or Surrender, adjusted for | death of any Owner (or, if the Owner is not a natural |
any applicable Market Value Adjustment, and less any | person, upon the death of any Annuitant) prior to the |
applicable Surrender Charge, at the end of the current | Annuity Commencement Date. See page 19. |
day on which the Withdrawal is taken or a Surrender | Endorsements – Attachments to this Contract that add, |
occurs. See page 12. | change or supersede its terms or provisions. |
Annuitant – The individual designated by you and upon | Guarantee Period – A period equal to one or more Contract |
whose life Annuity Payments will be based. There may | Years during which the Guarantee Period Interest Rate we |
be two Annuitants. See page 9. | declare is guaranteed to be credited to the Accumulation |
Annuity Commencement Date – The date on which Annuity | Value. See page 13. |
Payments commence. | Guarantee Period Interest Rate – The effective annual |
Annuity Payments – Periodic payments made by us to you | interest rate that we will credit to the Accumulation Value |
or, subject to our consent in the event the payee is not a | for a specified Guaranteed Period. The rate for each |
natural person, to a payee designated by you. | Guarantee Period will be declared in advance by us, and, |
Annuity Plan – An option elected by you, or the contractually | except as otherwise provided in the Contract, will apply |
designated default option if none is elected, that | for the duration of the Guarantee Period. See page 13. |
determines the frequency, duration and amount of the | Hospital or Nursing Home – A hospital or skilled care or |
Annuity Payments. See page 20. | intermediate care nursing facility, operating as such |
Beneficiary – The individual or entity you select to receive | according to applicable law and at which medical |
the Death Benefit. See page 10. | treatment is available on a daily basis. This does not |
Business Day –Any day that the New York Stock Exchange | include a rest home or other facility whose primary |
(“NYSE”) is open for trading, exclusive of federal | purpose is to provide accommodations, board or personal |
holidays, or any day the SEC requires that mutual funds, | care services to individuals who do not need medical or |
unit investment trusts or other investment portfolios be | nursing care. See page 8. |
valued. | Initial Guarantee Period – The Guarantee Period selected by |
Cash Surrender Value – The amount you receive upon | you for the Single Premium. See page 13. |
Surrender of this Contract, which equals the | Initial Guarantee Period Interest Rate – The Guarantee |
Accumulation Value, as adjusted for any applicable | Period Interest Rate that we will credit to the |
Market Value Adjustment, minus any applicable | Accumulation Value for the Initial Guarantee Period. See |
Surrender Charges. See page 17. | page 13. |
Code – The Internal Revenue Code of 1986, as amended. | Interest Withdrawal Amount – The interest earned, if any, |
Company, we, our or us – Voya Retirement Insurance and | during the prior 12 months and not previously withdrawn. |
Annuity Company, a stock company domiciled in | We will waive the Market Value Adjustment and |
Connecticut. See page 6. | Surrender Charge on the portion of a Withdrawal |
Company Death Benefit Rate – The effective annual interest | representing an Interest Withdrawal Amount. If you |
rate that we will credit to the Death Benefit from the date | subsequently Surrender your Contract, any Market Value |
of death until the Death Benefit is paid. See page 19. | Adjustments and Surrender Charges previously waived as |
Contingent Annuitant – The individual who is not an | a result of any Interest Withdrawal Amounts taken in the |
Annuitant and will become the Annuitant if all named | same Contract Year as the Surrender will be deducted |
Annuitants die prior to the Annuity Commencement Date | from, or if applicable, added to the Accumulation Value. |
and the Death Benefit is not otherwise payable. See page | Additionally, we will apply the current Market Value |
9. | Adjustment and Surrender Charge at the time of the |
Contract – This single premium modified guaranteed annuity | Surrender. See pages 7 and 13, respectively. |
contract. | Irrevocable Beneficiary – A Beneficiary whose rights and |
Contract Anniversary – The same day and month each year | interests under this Contract cannot be changed without |
as the Contract Date. If the Contract Date is February | his, her or its consent. See page 10. |
29th , in non-leap years, the Contract Anniversary shall be | |
March 1st . | |
3 |
Joint Owner – An individual who, along with another | finding of a court of competent jurisdiction as to the cause |
individual Owner, is entitled to exercise the rights | of death; or (4) any other proof that we deem in our sole |
incident to ownership. Both Joint Owners must agree to | discretion to be satisfactory to us. See page 19. |
any change or the exercise of any rights under the | Qualifying Medical Professional – A legally licensed |
Contract. The Joint Owner may not be an entity and may | practitioner of the healing arts who: (1) is acting within |
not be named if the Owner is an entity. See page 9. | the scope of his or her license; (2) is not a resident of your |
Market Value Adjustment (“MVA”) – An adjustment to | household or that of the Annuitant; and (3) is not related |
certain Withdrawals or a Surrender that may increase, | to you or the Annuitant by blood or marriage. |
decrease or have no impact on the amount paid to you. | Right to Examine and Return this Contract Period – The |
See page 13. Additionally, the MVA will apply to the | period of time during which you have the right to return |
Accumulation Value on the date of death in regard to the | the Contract for any reason, or no reason at all, and |
Death Benefit, or the date the Accumulation Value is | receive the Accumulation Value, adjusted for any MVA, |
applied to an Annuity Plan, but only if the MVA is | which may be more or less than the Single Premium paid. |
positive and would result in an increase to the | See page 23. |
Accumulation Value. See pages 19 and 20, respectively. | Single Premium – The single payment you make to us to put |
A Surrender Charge may also apply to certain | this Contract into effect. See page 10. |
Withdrawals or to a Surrender. See page 7. | Surrender – A transaction in which the entire Cash Surrender |
Notice to Us – Notice made in a form that: (1) is approved by, | Value is taken from the Contract. See page 16. |
or is acceptable to, us; (2) has the information and any | Surrender Charge – A charge applied to certain Withdrawals |
documentation we determine in our discretion to be | and to a Surrender during the Initial Guarantee Period and |
necessary to take the action requested or exercise the right | will reduce the amount paid to you. See page 7. A MVA |
specified; and (3) is received by us at our Customer | may also apply to certain Withdrawals and to a Surrender |
Service at the address specified on page 1. Under certain | and increase, decrease or have no impact on the amount |
circumstances, we may permit you to provide Notice to | paid to you. See page 13. |
Us by telephone or electronically. | Terminal Condition – An illness or injury that results in a life |
Owner – The individual (or entity) who is entitled to exercise | expectancy of 12 months or less, as measured from the |
the rights incident to ownership. The terms “you” or | date of diagnosis by a Qualifying Medical Professional. |
“your,” when used in this prospectus, refer to the Owner. | Withdrawal – A transaction in which only a portion of the |
See page 9. | Cash Surrender Value is taken from the Contract. See |
Proof of Death – The documentation we deem necessary to | page 16. |
establish death including, but not limited to: (1) a certified | |
copy of a death certificate; (2) a certified copy of a | |
statement of death from an attending physician; (3) a | |
4 |
Summary – Contract Charges and Risk Factors | ||||||||||
Surrender Charges | ||||||||||
You will pay no charges in buying or owning the Contract. A Surrender Charge will apply to certain Withdrawals and to a Surrender, | ||||||||||
but only during the Guarantee Period you select for the Single Premium (which we refer to as the Initial Guarantee Period), | ||||||||||
according to the schedule below. The rate of the Surrender Charge is a percentage of the Accumulation Value being withdrawn that | ||||||||||
diminishes each Contract Year. The length of time the Surrender Charge will apply varies with the duration of the Initial Guarantee | ||||||||||
Period. The Surrender Charge is deducted from the Accumulation Value. | ||||||||||
Guarantee | Surrender Charge Schedule – Contract Year | |||||||||
Period | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
5 | 8% | 7% | 6% | 5% | 4% | 0 | 0 | 0 | 0 | 0 |
6 | 8% | 7% | 6% | 5% | 4% | 3% | 0 | 0 | 0 | 0 |
7 | 8% | 7% | 6% | 5% | 4% | 3% | 2% | 0 | 0 | 0 |
8 | 8% | 7% | 6% | 5% | 4% | 3% | 2% | 1% | 0 | 0 |
9 | 8% | 7% | 6% | 5% | 4% | 3% | 2% | 1% | 0 | 0 |
10 | 8% | 7% | 6% | 5% | 4% | 3% | 2% | 1% | 0 | 0 |
The Surrender Charge schedule does not restart when your Contract renews into another Guarantee Period. You will pay no Surrender | ||||||||||
Charge once the Surrender Charge is zero after the first time your Contract renews into another Guarantee Period. We will deduct any | ||||||||||
Surrender Charge after the MVA is applied. See page 13. A charge for premium taxes may also be deducted. See page 9. | ||||||||||
Risk Factors | ||||||||||
Purchasing the Contract involves certain risks as noted below. You should also carefully consider your personal tax situation before | ||||||||||
you purchase a Contract. See page 27 for a general discussion of the U.S. federal income tax treatment of the Contract. | ||||||||||
Liquidity Risk – The Contract is designed for long-term investment and should be held for the length of the Initial Guarantee Period | ||||||||||
or the Guarantee Period, as applicable. The Interest Withdrawal Amount provides some liquidity. However, if you withdraw more | ||||||||||
than the Interest Withdrawal Amount, a Surrender Charge may apply during the Initial Guarantee Period, which in combination with | ||||||||||
the MVA, could result in the loss of principal and earnings. Because the Contract provides only limited liquidity during the Surrender | ||||||||||
Charge period, it is not suitable for short-term investment. | ||||||||||
You may request a Withdrawal or Surrender the Contract by providing Notice to Us at any time prior to the Annuity Commencement | ||||||||||
Date. Notice to Us that is received before the close of business on any Business Day will be processed the same day; otherwise, the | ||||||||||
Withdrawal or Surrender will be taken as of the close of business on the next Business Day. We will generally pay the Cash | ||||||||||
Surrender Value within 7 days of receipt of Notice to Us. We reserve the right in the Contract to defer paying a Withdrawal or the | ||||||||||
Cash Surrender Value (except for Contracts issued in Arizona) for up to 6 months after we receive your request, contingent upon | ||||||||||
written approval of the insurance supervisory official in the jurisdiction in which the Contract is issued. | ||||||||||
Surrender Charge Risk during the Initial Guarantee Period – A Surrender Charge may apply to certain Withdrawals or a | ||||||||||
Surrender during the Initial Guarantee Period only. The Surrender Charge is designed to recover the costs we incur in selling the | ||||||||||
Contract if you request a Withdrawal or Surrender that is too early. Any Surrender 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 Single Premium. | ||||||||||
Interest Rate Risk and the Market Value Adjustment – The declared interest rate the Company offers may be as low as 0% for | ||||||||||
some Contracts. A MVA will apply to certain Withdrawals or a Surrender prior to the end of any Guarantee Period. See page 13. 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 | ||||||||||
Guarantee Period Interest Rate 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 beginning of the Guarantee Period. At | ||||||||||
the time of any transaction involving the Contract, in the event that interest rates in the current market are higher, you bear the risk that | ||||||||||
you may receive less than your Single Premium. | ||||||||||
Investment Risk – The Contract’s investment risk and return characteristics are similar to those of a zero coupon bond or certificate | ||||||||||
of deposit. See page 6. Accumulation Value maintained through the end of a Guarantee Period provides a fixed rate of return. The | ||||||||||
Company guarantees principal and credited interest only when held for the length of the Initial Guarantee Period or the Guarantee | ||||||||||
Period, as applicable. Otherwise, a Surrender 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 Single Premium. | ||||||||||
5 |
Voya Retirement Insurance and Annuity Company | |
Organization and Operation | |
Voya Retirement Insurance and Annuity Company (the “Company,” “we,” “us,” “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. Through a | |
merger, our operations include the business of Aetna Variable Annuity Life Insurance Company (formerly known as Participating | |
Annuity Life Insurance Company, an Arkansas life insurance company organized in 1954). 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. (“VoyaTM ”), which until April 7, 2014, was known as ING U.S., | |
Inc. In May 2013, the common stock of Voya began trading on the NYSE under the symbol “VOYA” and Voya completed its initial | |
public offering of common stock. | |
Voya is an affiliate of ING Groep N.V. (“ING”), a global financial institution active in the fields of insurance, banking and asset | |
management. In 2009, ING announced the anticipated separation of its global banking and insurance businesses, including the | |
divestiture of Voya, which together with its subsidiaries, including the Company, constitutes ING’s U.S.-based retirement, investment | |
management and insurance operations. As of November 18, 2014, ING’s ownership of Voya was approximately 19%. Under an | |
agreement with the European Commission, ING is required to divest itself of 100% of Voya by the end of 2016. | |
We are engaged in the business of issuing life insurance and annuities. Our principal executive offices are located at: | |
One Orange Way | |
Windsor, Connecticut 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 page 27 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. | |
Separate Account | |
We allocate to a separate account the Single Premium you make to put this Contract into effect, which we refer to as the Guaranteed | |
Annuity Account (“GAA”). The GAA is a non-unitized separate account, which means there are no discrete units of ownership of the | |
assets of GAA. We own the assets held in GAA. We are not the trustee of these assets. The income, gains and losses, realized or | |
unrealized, from the assets of GAA shall be credited to or charged against the separate account, without regard to other income, gains | |
or losses of Voya Retirement Insurance and Annuity Company. The assets of GAA, equal to the reserves and other contract liabilities | |
with respect to the separate account, shall not be chargeable with liabilities arising out of any other business of Voya Retirement | |
Insurance and Annuity Company. | |
We established and administer GAA according to Section 38a-433 of the Connecticut General Statutes and its related regulations that | |
are applicable. Although the offering of the Contract is registered with the SEC under the Securities Act of 1933, as amended, we are | |
not required to also register this separate account with the SEC under the Investment Company Act of 1940, as amended. | |
We intend to invest primarily in investment-grade fixed income securities, including: | |
· | Securities issued by the U.S. government; |
· | Issues of U.S. government agencies or instrumentalities (these issues may or may not be guaranteed by the U.S. government); |
· | Debt securities that have an investment grade, at the time of purchase, within the four highest grades assigned by Moody’s |
Investors Services, Inc. (Aaa, Aa, A or Baa), Standard & Poor’s Corporation (AAA, AA, A or BBB) or any other nationally | |
recognized rating service; | |
6 |
· | 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 services, are deemed by the | |||||||||||
Company’s management to have an investment quality comparable to securities that may be purchased as stated above; or | |||||||||||
· | Commercial paper, cash or cash equivalents, and other short-term investments having a maturity of less than one year that are | ||||||||||
considered by the Company’s management to have investment quality comparable to securities, which may be purchased as | |||||||||||
stated above. | |||||||||||
We may invest in futures and options. We purchase financial futures, related options and options on securities solely for non- | |||||||||||
speculative hedging purposes. Should securities prices be expected 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 GAA. Similarly, if securities prices are expected to | |||||||||||
rise, we may purchase a futures contract or a call option against anticipated positive cash flow or may purchase options on securities. | |||||||||||
We are not obligated to invest the assets attributable to the Contract according to any particular strategy, except as required by | |||||||||||
Connecticut and other state insurance laws. The Initial Guarantee Period Interest Rate and Guarantee Period Interest Rate we declare | |||||||||||
may not necessarily relate to the performance of GAA. | |||||||||||
Charges | |||||||||||
You pay no charges in buying or owning the Contract. A Surrender Charge may apply to a Withdrawal or upon Surrender of the | |||||||||||
Contract. A charge for premium taxes may also be deducted. | |||||||||||
Surrender Charge | |||||||||||
During the Initial Guarantee Period only, a Surrender Charge may be deducted from the portion of the Accumulation Value being | |||||||||||
withdrawn in the following events: | |||||||||||
· | A Withdrawal during the Initial Guarantee Period in an amount that is greater than the interest earned, if any, during the prior | ||||||||||
12 months and not previously withdrawn, which we refer to as the Interest Withdrawal Amount; or | |||||||||||
· | A Surrender of the Contract that occurs outside of the 30-day period following the end of the Initial Guarantee Period. | ||||||||||
The Surrender Charge is designed to recover the costs we incur in selling the Contract if you request a Withdrawal or Surrender that is | |||||||||||
too early. The rate of the Surrender Charge is a percentage of the Accumulation Value being withdrawn that diminishes each Contract | |||||||||||
Year. The length of time the Surrender Charge will apply varies by the duration of the Initial Guarantee Period. The Surrender | |||||||||||
Charge is deducted from the Accumulation Value, after the MVA, according to the below schedule: | |||||||||||
Guarantee | Surrender Charge Schedule – Contract Year | ||||||||||
Period | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | |
5 | 8% | 7% | 6% | 5% | 4% | 0 | 0 | 0 | 0 | 0 | |
6 | 8% | 7% | 6% | 5% | 4% | 3% | 0 | 0 | 0 | 0 | |
7 | 8% | 7% | 6% | 5% | 4% | 3% | 2% | 0 | 0 | 0 | |
8 | 8% | 7% | 6% | 5% | 4% | 3% | 2% | 1% | 0 | 0 | |
9 | 8% | 7% | 6% | 5% | 4% | 3% | 2% | 1% | 0 | 0 | |
10 | 8% | 7% | 6% | 5% | 4% | 3% | 2% | 1% | 0 | 0 | |
7 |
The Surrender Charge schedule will only apply to the Initial Guarantee Period and does not restart when your Contract renews into | |
another Guarantee Period. | |
No Surrender Charge applies to: | |
· | The Interest Withdrawal Amount, which is the maximum amount you may withdraw without incurring a Surrender Charge; |
IMPORTANT NOTE: If you subsequently Surrender your Contract, any Surrender Charges previously waived as a | |
result of any Interest Withdrawal Amounts taken in the same Contract Year as the Surrender will be deducted from the | |
Accumulation Value. | |
· | Payment of the Death Benefit; |
· | The commencement of Annuity Payments that begin after the first Contract Year; or |
· | Any Withdrawal or Surrender after the Initial Guarantee Period ends. |
Explanatory Example: | |
A Contract is purchased with $30,000 of Single Premium. The Initial Guarantee Period is five years with an annual effective | |
rate of 3% (which we refer to as the Initial Guarantee Period Interest Rate). After three Contract Years, the Accumulation | |
Value equals $32,782 of which $955 (3% interest on $31,827, accumulated over the prior 12 months) is available at the end | |
of the third Contract Year to withdraw without incurring Surrender Charges. | |
The Contract has a waiver of Surrender Charge for Extended Medical Care or a Terminal Condition. Extended Medical Care means | |
confinement in a Hospital or Nursing Home prescribed by a Qualifying Medical Professional. Terminal Condition means an illness or | |
injury that results in a life expectancy of 12 months or less, as measured from the date of diagnosis by a Qualifying Medical | |
Professional. For purposes of this waiver: | |
A Hospital or Nursing Home is defined as a hospital or a skilled care or intermediate care nursing facility: | |
· | Operating as such according to applicable law; and |
· | At which medical treatment is available on a daily basis. |
A Hospital or Nursing Home does not include a rest home or other facility whose primary purpose is to | |
provide accommodations, board or personal care services to individuals who do not need medical or nursing | |
care. | |
A Qualifying Medical Professional is defined as a legally licensed practitioner of the healing arts who: | |
· | Is acting within the scope of his or her license; |
· | Is not a resident of your household or that of the Annuitant; and |
· | Is not related to you or the Annuitant by blood or marriage. |
To qualify for a waiver as a result of Extended Medical Care: | |
· | You (or any Annuitant, if the Owner is a non-natural person) begin receiving Extended Medical Care on or after the first |
Contract Anniversary and receive such Extended Medical Care for at least 45 days during any continuous 60-day period; and | |
· | Your request for a Surrender or Withdrawal, together with satisfactory proof of such Extended Medical Care, must be |
provided by Notice to Us during the term of such Extended Medical Care or within 90 days after the last day that you | |
received Extended Medical Care. | |
To qualify for a waiver as a result of a Terminal Condition: | |
· | You (or any Annuitant, if the Owner is a non-natural person) must first be diagnosed by a Qualifying Medical Professional as |
having a Terminal Condition on or after the first Contract Anniversary; and | |
· | Your request for a Surrender or Withdrawal, together with satisfactory proof of such Terminal Condition, must be provided |
by Notice to Us. | |
We require the proof of Extended Medical Care or a Terminal Condition to be in writing and, where applicable, attested to by a | |
Qualifying Medical Professional. We reserve the right in the Contract to require a secondary medical opinion by a Qualifying | |
Medical Professional of our choosing. We will pay for any such secondary medical opinion. | |
IMPORTANT NOTE: The waiver of Surrender Charge for Extended Medical Care or a Terminal condition is not available for | |
contracts issued in Iowa, Indiana, Maryland, Massachusetts, North Carolina, Pennsylvania, Texas and Washington. | |
8 |
Any Withdrawal or Surrender of the Contract that is eligible for waiver of the Surrender Charges as a result of Extended Medical Care | |
or a Terminal Condition will remain subject to the MVA, as applicable. See page 13. | |
Overnight Charge | |
You may choose to have a $20 overnight charge deducted from the net amount of a Surrender or Withdrawal you would like sent to | |
you by overnight delivery service. | |
Premium Tax and Other Taxes | |
In certain states, the Single Premium you pay for the Contract is subject to a premium tax. A premium tax is generally any tax or fee | |
imposed or levied on us by any state government or political subdivision thereof in consideration of your Single Premium received by | |
us. Currently, the premium tax ranges from zero to 3.5%, depending on your state of residence. We reserve the right in the Contract | |
to recoup the amount of any premium tax from the Accumulation Value, adjusted for any MVA, if and when: | |
· | The premium tax is incurred by us; or |
· | The Accumulation Value is applied to an Annuity Plan on the Annuity Commencement Date. |
We reserve the right in the Contract to change the amount we charge for the premium tax if you change your state of residence. We | |
do not expect to incur any other tax liability attributable to the Contract. We also reserve the right to charge for any other taxes as a | |
result of any changes in applicable law. | |
The Annuity Contract | |
The Contract described in this prospectus is a single premium deferred modified guaranteed annuity contract. The Contract is non- | |
participating, which means it will not pay dividends resulting from any of the surplus or earnings of the Company. The Contract | |
consists of any attached application, amendment or Endorsements that are issued in consideration of the Single Premium paid. We | |
urge you to read the Contract, which details your rights as the Owner. The Contract provides a means for you to allocate the Single | |
Premium to a Guarantee Period (which we refer to as the Initial Guarantee Period). A Guarantee Period is equal to one or more | |
Contract Years during which a declared Guarantee Period Interest Rate is guaranteed to be credited to the Single Premium or | |
Accumulation Value, as applicable. Initial Guarantee Periods of 5 to 10 years are currently available (5, 6, 7 etc.) for the Single | |
Premium. At the end of the Initial Guarantee Period, the Contract will automatically renew into another Guarantee Period, until you | |
give us alternative instructions. The Guarantee Periods available for renewals, where permitted, are limited to 1 year. | |
Owner | |
The Owner is the individual (or entity) entitled to exercise the rights incident to ownership. The Owner may be an individual or a | |
non-natural person (e.g., a corporation or trust). We require the Owner to have an insurable interest in the Annuitant. See page 22. | |
Two individuals may own the Contract, which we refer to as Joint Owners. Joint Owners must agree to any changes or exercise of the | |
rights under the Contract. The Death Benefit becomes payable if any Owner dies prior to the Annuity Commencement Date. If the | |
Owner is a non-natural person, the Death Benefit becomes payable if any Annuitant dies prior to the Annuity Commencement Date. | |
See page 19. We will pay the Death Benefit to the Beneficiary (see below). | |
Joint Owner | |
For Contracts purchased with after-tax money, which we refer to as nonqualified Contracts, Joint Owners may be named in a written | |
request to us at any time before the Contract is in effect. A Joint Owner may not be an entity, however, and may not be named if the | |
Owner is an entity. In the case of Joint Owners, all Owners must agree to any change or exercise of the rights under the Contract. All | |
other rights of ownership must be exercised jointly by both Owners. Joint Owners own equal shares of any benefits accruing or | |
payments made to them. In the case of Joint Owners, upon the death of a Joint Owner, we will designate the surviving Joint Owner as | |
the Beneficiary, and the Death Benefit is payable. See page 19. This Beneficiary change will override any previous Beneficiary | |
designation. All rights of a Joint Owner terminate upon the death of that Owner, so long as the other Joint Owner survives, and the | |
deceased Joint Owner’s entire interest in the Contract will pass to the surviving Joint Owner. The Death Benefit is either payable to | |
the surviving Joint Owner, or in the case of a surviving Joint Owner who is the spouse of the deceased Joint Owner, will be payable if | |
the surviving Joint Owner dies prior to the Annuity Commencement Date. See page 19. | |
Annuitant and Contingent Annuitant | |
The Annuitant is the individual upon whose life the Annuity Payments are based. The Annuitant must be a natural person, who is | |
designated by you at the time the Contract is issued. There may be two Annuitants. If you do not designate the Annuitant, the Owner | |
will be the Annuitant. In the case of Joint Owners, we will not issue a Contract if you have not designated the Annuitant. If the Owner | |
is a non-natural person, an Annuitant must be named. We require the Owner to have an insurable interest in the Annuitant. See page | |
22. | |
You may name a Contingent Annuitant. A Contingent Annuitant is the individual who will become the Annuitant if the named | |
9 |
Annuitant dies prior to the Annuity Commencement Date. | |
Neither the Annuitant nor the Contingent Annuitant can be changed while he or she is still living. Permitted changes to the Annuitant: | |
· | If the Owner is an individual, and the Annuitant dies before the Annuity Commencement Date, the Contingent Annuitant, if |
any, will become the Annuitant, if two Owners do not exist. | |
· | Otherwise, the Owner will become the Annuitant if the Owner is a natural person. |
· | If two individual Owners exist, the youngest Owner will become the Annuitant. |
· | The Owner, or joint Owners, must name an individual as the Annuitant if the Owner is age 90 or older (or age 85 or older if |
the Contract was issued prior to January 3, 2011 or for Contracts issued in Minnesota) as of the date of the Annuitant’s death. | |
We require the Owner to have an insurable interest in the Annuitant. See page 22. | |
If the Owner is a non-natural person, and any Annuitant dies before the Annuity Commencement Date, we will pay the Death Benefit | |
to the designated Beneficiary (see below). There are different distribution requirements under the Code for paying the Death Benefit | |
on a Contract that is owned by a non-natural person. You should consult your tax adviser for more information if the Owner is a non- | |
natural person. | |
Beneficiary | |
The Beneficiary is the individual or entity designated by you to receive the Death Benefit. The Beneficiary may become the successor | |
Owner if the Owner, who is a spouse, as defined under U.S. federal law, dies before the Annuity Commencement Date. The Owner | |
may designate a Contingent Beneficiary, who will become the Beneficiary if all primary Beneficiaries die before any Owner (or any | |
Annuitant if the Owner is a non-natural person). The Owner may designate one or more primary Beneficiaries and Contingent | |
Beneficiaries. The Owner may also designate any Beneficiary to be an Irrevocable Beneficiary. An Irrevocable Beneficiary is a | |
Beneficiary whose rights and interest under the Contract cannot be changed without the consent of such Irrevocable Beneficiary. | |
Payment of the Death Benefit to the Beneficiary: | |
· | We pay the Death Benefit to the primary Beneficiary (unless there are Joint Owners, in which case the Death Benefit is paid |
to the surviving Owner(s)). | |
· | If all primary Beneficiaries die before any Annuitant or any Owner, as applicable, we pay the Death Benefit to any |
Contingent Beneficiary. | |
· | If there is a sole natural Owner and no surviving Beneficiary (or no Beneficiary is designated), we pay the Death Benefit to |
the Owner’s estate. | |
· | If the Owner is not a natural person and all Beneficiaries die before the Annuitant (or no Beneficiary is designated), the |
Owner will be deemed to be the primary Beneficiary. | |
· | One or more individuals may be a Beneficiary or Contingent Beneficiary. |
· | In the case of more than one Beneficiary, we will assume any Death Benefit is to be paid in equal shares to all surviving |
Beneficiaries in the same class (primary or contingent), unless you provide Notice to Us directing otherwise. | |
We will deem a Beneficiary to have predeceased the Owner if: | |
· | The Beneficiary died at the same time as the Owner; |
· | The Beneficiary died within 24 hours after the Owner’s death; or |
· | There is insufficient evidence to determine that the Beneficiary and Owner died other than at the same time. |
The Beneficiary may decide how to receive the Death Benefit, subject to the distribution requirements under Section 72(s) of the | |
Code. You may restrict a Beneficiary’s right to elect an Annuity Plan or receive the Death Benefit in a single lump-sum payment. | |
Change of Owner or Beneficiary | |
You may transfer ownership of a nonqualified Contract before the Annuity Commencement Date. We require any new Owner to have | |
an insurable interest in the Annuitant. See page 19. You have the right to change the Beneficiary unless you have designated such | |
person as an Irrevocable Beneficiary at any time prior to the Annuity Commencement Date. Notice to Us is required for any changes | |
pursuant to the Contract. Except as noted below, any such change will take effect as of the date Notice to Us is received and not affect | |
any payment made or action taken by us before recording the change. For Contracts issued in Iowa, Indiana, Maryland, North | |
Carolina, Pennsylvania, Texas and Washington, any such change will take effect as of the date Notice to Us is signed by you, subject | |
to any payments we make or actions we take prior to our receipt of such Notice to Us. A change of Owner likely has tax | |
consequences. See page 27 for more information. | |
Contract Purchase Requirements | |
We will issue a Contract so long as the Annuitant and the Owner (if a natural person) are age 80 or younger at the time of application. | |
An insurable interest must exist at the time we issue the Contract. In purchasing the Contract, you will represent and acknowledge | |
that the Owner has an insurable interest in the Annuitant. We require the agent/registered representative to confirm on the application | |
10 |
that the Owner has an insurable interest in the Annuitant. Insurable interest means the Owner has a lawful and substantial economic | ||
interest in the continued life of the Annuitant. See page 22. | ||
The payment (which we refer to as the Single Premium) for nonqualified (purchased with after-tax money) Contracts must be at least | ||
$15,000, and the Single Premium for qualified (purchased with pre-tax money) Contracts must be at least $15,000. We will accept as | ||
the Single Premium payments from multiple sources involving transfers and exchanges identified on the application and received no | ||
more than 45 days after our receipt of the application. In the case of multiple transfers and exchanges, the Contract Date will be the | ||
weighted average of when each payment is received: | ||
Example | ||
Three transfers are indicated on the application. We receive the first transfer, in the amount of $10,000, on January 16, 2009. | ||
We receive the second transfer, in the amount of $6,000, on February 12, 2009. We receive the third transfer, in the amount | ||
of $5,000, on February 15, 2009. | ||
Step 1 is to determine the date differences, using the date of the first transfer received as day 0 and calculating the number of | ||
days between the first transfer and the subsequent transfers. We received the second transfer 27 days after January 16, 2009. | ||
We received the third transfer 30 days after January 16, 2009. | ||
Step 2 is to weight the days by the amount of each transfer received. The calculation for this purpose equals the sum of the | ||
amount of each transfer multiplied by the number of days difference between the first transfer and the subsequent transfer, | ||
and divided by the sum of the amount of each transfer, as follows: | ||
(10,000 * 0) + (6,000 * 27) + (5,000* 30) = 312,000 | = 14.85714 days, rounded to 15 days, as the | |
10,000 + 6,000 + 5,000 = 21,000 | weighted average | |
Step 3 is to add the weighted average additional days to the date the first transfer was received, which in this case is January | ||
16, 2009. January 16, 2009 plus 15 days results in the Contract Date of January 31, 2009 in this example. | ||
We may refuse to accept certain forms of payment (e.g., travelers’ checks). We may also require information as to why a particular | ||
form of payment was used (e.g., third party checks), and the source of the funds, before we decide to accept it. We will not issue a | ||
Contract when you use an unacceptable form of payment. We will return to the source any payments we determine to be | ||
unacceptable. | ||
If your Single Premium payment was transmitted by wire order from your agent/registered representative (broker-dealer), we will | ||
follow one of the following two procedures after we receive and accept the wire order and investment instructions. The procedure we | ||
will follow depends on whether your state or agent/registered representative (broker-dealer) requires a paper application to issue the | ||
Contract: | ||
· | If an application is required, we will issue the Contract along with a Contract acknowledgement and delivery statement, but | |
we reserve the right to void the Contract if we are not in receipt of a properly completed application within 5 days of | ||
receiving the Single Premium. We will refund the Accumulation Value plus any charges we deducted, and the Contract will | ||
be voided. We will return the Single Premium when required. | ||
· | When an application is not required, we will issue the Contract along with a Contract acknowledgement and delivery | |
statement. We require you to execute and return the Contract acknowledgement and delivery statement. Until you do, we | ||
will require a signature guarantee, or notarized signature, on certain transactions prior to processing. | ||
Our prior approval is required for a Single Premium that would cause the premiums of all annuities you maintain with us to exceed | ||
$1,000,000. | ||
Availability of the Contract | ||
The Contract is designed for people seeking long-term tax-deferred accumulation of assets, generally for retirement or other long-term | ||
purposes. The tax-deferred feature is more attractive to people in high federal and state tax brackets. You should not buy this | ||
Contract if: | ||
· | You are looking for a short-term investment; | |
· | You cannot risk getting back an amount less than your initial investment; or | |
· | Your assets are in a plan that already provides for tax-deferral and you can identify no other benefits in purchasing this | |
Contract. | ||
11 |
When considering an investment in the Contract, you should consult with your investment professional about your financial | |
goals, investment time horizon and risk tolerance. | |
Replacing an existing insurance contract with this Contract may not be beneficial to you. Before purchasing the Contract, you | |
should determine whether your existing contract will be subject to any fees or penalties upon termination of such contract. | |
You should also compare the fees and charges, coverage provisions and limitations, if any, of your existing contract to this | |
Contract. | |
Individual Retirement Accounts, or IRAs, and other qualified plans already have the tax-deferral feature found in this Contract. For | |
an additional cost, the Contract provides other features and benefits, which other plans may not provide. You should not purchase a | |
qualified Contract unless you want these other features and benefits, taking into account their cost. See page 31 for more information. | |
Crediting of Premium Payments | |
We will process your Single Premium within 2 Business Days of receipt and allocate it according to the instructions you specify, so | |
long as the application and all information necessary for processing the Contract is complete. | |
In the event that your application is incomplete for any reason, we are permitted to retain your Single Premium for up to 5 Business | |
Days while attempting to complete it. If the application cannot be completed during this time, we will inform you of the reasons for | |
the delay. We will also return the Single Premium promptly. Once you complete the application, we will process your Single | |
Premium within 2 Business Days and allocate it to the Guarantee Period that you have specified. | |
Accumulation Value | |
On the Contract Date, the Accumulation Value equals the Single Premium less any premium tax. We calculate the Accumulation | |
Value at the end of each day thereafter: | |
· | Accumulation Value as of the end preceding of the preceding day; plus |
· | Interest, if any, pursuant to the Initial Guarantee Period Interest Rate or the Guarantee Period Interest Rate, as applicable (see |
below), to be credited from the end of the previous day to the end of the current day; minus | |
· | The amount of any Withdrawals or Surrender (see page 16); adjusted for |
· | The MVA (see page 13) at the end of the current day on which the Withdrawal is taken or a Surrender occurs; minus |
· | Any Surrender Charges (see page 7) at the end of the current day on which the Withdrawal is taken or a Surrender occurs. |
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 serve to | |
assure that our customers’ identities are properly verified and that premiums and loan repayments are not derived from improper | |
sources. | |
Under our anti-money laundering program, we may require policy owners, insured persons 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 premium payments or loan repayments (traveler’s cheques, cashier's checks, bank | |
drafts, bank checks and treasurer's checks, for example) or restrict the amount of certain forms of premium payments or loan | |
repayments (money orders totaling more than $5,000.00, for example). 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 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 policy 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. | |
12 |
Administrative Procedures | |
We may accept a request for Contract service in writing, by telephone, or other approved electronic means, subject to our | |
administrative procedures, which vary depending on the type of service requested and may include proper completion of certain | |
forms, providing appropriate identifying information, and/or other administrative requirements. Please be advised that the risk of a | |
fraudulent transaction is increased with telephonic or electronic instructions (for example, a facsimile Surrender request form), even if | |
appropriate identifying information is provided. | |
Other Contracts | |
We and our affiliates offer various other products with different features and terms than the Contract. These products may have | |
different benefits, fees and charges, and may or may not better match your needs. Please consult your agent/registered representative | |
if you are interested in learning more information about these other products. | |
Guarantee Periods and Market Value Adjustment | |
Initial Guarantee Periods and Guarantee Periods for Renewals | |
A Guarantee Period is equal to one or more Contract Years during which a declared Guarantee Period Interest Rate is guaranteed to be | |
credited to the Single Premium or Accumulation Value, as applicable. The following Guarantee Periods are currently available: | |
Initial Guarantee Periods | Guarantee Periods for Renewals |
5 to 10 years | 1 year |
(5, 6, 7 etc.) | |
You select the Initial Guarantee Period for the Single | We automatically apply the Accumulation Value to the |
Premium. | 1-year Guarantee Period at the end of the Initial Guarantee |
Period, or each succeeding Guarantee Period, as applicable, | |
until you give us alternative instructions. | |
You select the Guarantee Period for the Single Premium. You may only select one Guarantee Period to allocate the Single Premium | |
(which we refer to as the Initial Guarantee Period). At the end of the Initial Guarantee Period you selected for the Single Premium, we | |
automatically apply the Accumulation Value to the 1-year Guarantee Period. With each renewal thereafter, we will continue to | |
automatically apply your Accumulation Value to successive Guarantee Periods, each lasting no more than one year, until you | |
give us alternative instructions. | |
We may offer Guarantee Periods of different durations for the Initial Guarantee Periods. The Guarantee Periods available for | |
renewals, if available, are limited to 1 year each. | |
Initial Guarantee Period Interest Rate and Guarantee Period Interest Rate | |
Each of the Initial Guarantee Period Interest Rate and the Guarantee Period Interest Rate is the effective annual rate that we will credit | |
to the Accumulation Value when held for the duration of the Initial Guarantee Period and Guarantee Period, respectively. We credit | |
interest daily at a rate that yields the Initial Guarantee Period Interest Rate and the Guarantee Period Interest Rate for the Initial | |
Guarantee Period and the Guarantee Period, respectively. In the event of a Withdrawal, Surrender, the Death Benefit becomes | |
payable or you elect to receive Annuity Payments, interest, if any, will be credited to the portion of the Accumulation Value applied to | |
the transaction, including the day the transaction is processed. We will declare the Guaranteed Period Interest Rate in advance of the | |
applicable Guarantee Period. Your agent/registered representative should have the guaranteed rates of return currently available. You | |
can also find them out by contacting us. Our contact information appears on page 1. The minimum Guarantee Period Interest Rate is | |
0% (except for Contracts issued in Indiana, Iowa, Maryland, North Carolina, Pennsylvania, Texas and Washington, where the | |
Guaranteed Period Interest Rate is 0.25%). | |
We do not use a specific formula to set these guaranteed rates of interest. We determine the interest rates in our sole discretion. We | |
may, but are not required to consider, factors, including but not limited to the interest rate on the fixed income investments we use to | |
support our guarantees (in which you have no direct or indirect interest), regulatory and tax requirements, sales commissions and | |
administrative expenses borne by us, general economic trends and competitive factors. We cannot predict the level of future interest | |
rates. | |
13 |
Market Value Adjustment | |
A MVA will apply to certain Withdrawals or to a Surrender. Additionally, the MVA will apply to the Accumulation Value on the | |
date of death in regard to the Death Benefit, or the date the Accumulation Value is applied to an Annuity Plan, but only if the | |
adjustment would be positive and result in an increase to the Accumulation Value. | |
We apply the MVA to the Accumulation Value, before deducting any Surrender Charges, as follows: | |
· | The MVA will apply to a Withdrawal in an amount that is greater than the interest earned, if any, during the prior 12 months |
and not previously withdrawn, which we refer to as the Interest Withdrawal Amount. | |
· | If you request a Surrender, the MVA will be calculated on the total Accumulation Value. |
IMPORTANT NOTE: If you subsequently Surrender your Contract, any MVA previously waived as a result of any | |
Interest Withdrawal Amounts taken in the same Contract Year as the Surrender will be deducted from, or if applicable, | |
added to the Accumulation Value prior to the application of the current MVA at the time of Surrender. | |
· | In the event of a Death Benefit or commencement of Annuity Payments under an Annuity Plan, the MVA will apply to, and |
increase the Accumulation Value as a result, but only if positive. Any negative MVA is waived. | |
The MVA will not apply to: | |
· | The Interest Withdrawal Amount; or |
· | A Withdrawal or Surrender that takes place during the 30-day period following the end of the Initial Guarantee Period or any |
such succeeding Guarantee Period. | |
IMPORTANT NOTE: If you subsequently Surrender your Contract, any MVA previously waived as a result of any | |
Interest Withdrawal Amounts taken in the same Contract Year as the Surrender will be deducted from, or if applicable, | |
added to the Accumulation Value prior to the application of the current MVA at the time of Surrender. | |
The MVA is determined by a mathematical formula that measures the changes in the interest rate environment since the beginning of | |
the Guarantee Period. 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 Guarantee Period Interest Rate in order to pay you the amount requested. The MVA will generally | |
cause the Accumulation Value to be adjusted, either upward or downward, depending on whether interest rates in the market at that | |
time are higher or lower than when the Guarantee Period began. The MVA could also result in no adjustment to the Accumulation | |
Value. The MVA formula appears below followed by hypothetical examples illustrating both a negative and positive MVA. | |
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 beginning of the Guarantee Period (the Accumulation Value or Cash Surrender Value, as applicable, is adjusted | |
downward by the MVA Factor). The MVA is generally positive when the interest rates in the current market are lower than at the | |
beginning of the Guarantee Period (the Accumulation Value or Cash Surrender Value, as applicable, is adjusted upward by the MVA | |
Factor). The MVA Factor is a composite of index rates and corporate spreads with the values based on different external indexes, as | |
reported by a national quoting service. The index for the index rate is the Treasury Constant Maturity Series, as published by the | |
Federal Reserve. The corporate spread is based on the option adjusted spread (“OAS”) of the Barclays U.S. Aggregate Corporate | |
Index. | |
We currently set the index rate and corporate spread once a week. We reserve the right in the Contract to set these values more | |
frequently. We also reserve the right in the Contract to substitute the index in the event the Treasury Constant Maturity Series or | |
Barclays U.S. Aggregate Corporate Index is no longer available. For Contracts issued in Indiana, Iowa, Maryland, North Carolina, | |
Pennsylvania, Texas and Washington, this right is subject to approval of the Interstate Insurance Product Regulation Commission. | |
The MVA Factor has a bias of 0.25%, which means the MVA formula is weighted in our favor, except in the following states. This | |
bias will cause the MVA Factor to be slightly more negative or less positive, as applicable. For Contracts issued in Indiana, Iowa, | |
Maryland, North Carolina, Pennsylvania, Texas and Washington, the MVA Factor does not have a bias. Also, the bias is zero during | |
the Right to Examine and Return this Contract period. See page 23. | |
14 |
MVA Formula |
For Contracts issued in Indiana, Iowa, Maryland, North Carolina, Pennsylvania, Texas and Washington, and during the Right to |
Examine and Return this Contract period for all other Contracts: |
After the Right to Examine and Return this Contract period has expired for Contracts issued outside of Indiana, Iowa, Maryland, |
North Carolina, Pennsylvania, Texas, and Washington: |
Variables | |||||
a = | the index rate, determined at | Accumulation Value is | applied to an Annuity Plan, | ||
the beginning of the | applied to an Annuity Plan, | as applicable. | |||
Guarantee Period, based on | as applicable. | ||||
time to maturity equal to the | n = | number of months (including | |||
Guarantee Period. | i = | value of the corporate spread | the current month) remaining | ||
index at the beginning of the | in the Guarantee Period, | ||||
b = | the index rate based on time | Guarantee Period. | determined on: the date of the | ||
to maturity equal to the | Withdrawal or Surrender; the | ||||
number of years (including | j = | value of the corporate spread | date of death in regard to the | ||
the current year) remaining in | index determined on: the date | Death Benefit; or the date the | |||
the Guarantee Period, | of the Withdrawal or | Accumulation Value is | |||
determined on: the date of the | Surrender; the date of death | applied to an Annuity Plan, | |||
Withdrawal or Surrender; the | in regard to the Death | as applicable. | |||
date of death in regard to the | Benefit; or the date the | ||||
Death Benefit; or the date the | Accumulation Value is | ||||
15 |
MVA Examples |
The examples in the left-hand column below show the impact of the MVA on the Cash Surrender Value for both a Surrender |
and Withdrawal. These examples assume Surrender of a Contract with $100,000 of Accumulation Value in the fourth |
Contract Year of a 10-year Guarantee Period. The MVA factor and dollar amount of the MVA is determined by applying the |
values indicated in the right-hand column below to the MVA formula above. |
In addition to the MVA, the Accumulation Value in these examples is also subject to a 5% Surrender Charge. The dollar |
amount of the Surrender Charge, as indicated to the left below, is deducted from the Accumulation Value after the MVA is |
applied. |
Example #1 – Surrender |
Example #2 – Withdrawal of $20,000 |
Note: The first $5,000 withdrawn constitutes a Withdrawal of interest earned during the prior 12 months that is not previously |
withdrawn (which we refer to as the Interest Withdrawal Amount). Consequently, a Surrender Charge is payable on, and the MVA is |
applied to, $15,000, which is the amount by which the Withdrawal is greater than the Interest Withdrawal Amount (which we refer to |
as an Excess Withdrawal). |
Surrender and Withdrawals | |
Except under certain qualified Contracts, you may Surrender the Contract for the Cash Surrender Value, or make a Withdrawal of a | |
portion of the Accumulation Value any time before the earlier of: | |
· | The date on which Annuity Payments begin; and |
· | The death of the Owner (or, if the Owner is not a natural person, the death of the Annuitant). |
A Surrender or Withdrawal before the Owner or Annuitant, as applicable, reaches age 59 ½ may be subject to a U.S. federal income | |
tax penalty equal to 10% of the amount treated as income, for which you would be responsible. See page 27 for a general discussion | |
of the U.S. federal income tax treatment of the Contract, which discussion is not intended to be tax advice. You should consult a tax | |
adviser for advice about the effect of U.S. federal income tax laws, state laws or any other tax laws affecting the Contract, or any | |
transaction involving the Contract. | |
Cash Surrender Value | |
Upon a Surrender of the Contract, you will receive the full cash value of the Contract (which amount we refer to as the Cash Surrender | |
Value). We do not guarantee a minimum Cash Surrender Value. On any date during the Contract’s accumulation phase, we calculate | |
the Cash Surrender Value as follows: | |
· | The Accumulation Value; |
· | Adjusted by the MVA, if any. |
IMPORTANT NOTE: Any MVA previously waived as a result of any Interest Withdrawal Amounts taken in the same | |
Contract Year as the Surrender will be deducted from, or if applicable, added to the Accumulation Value prior to the | |
application of the current MVA at the time of Surrender. The MVA will not apply to a Surrender that takes place during | |
the 30-day period following the end of the Initial Guarantee Period or any succeeding Guarantee Period. | |
· | Minus any Surrender Charges. |
IMPORTANT NOTE: Any Surrender Charges previously waived as a result of any Interest Withdrawal Amounts taken | |
in the same Contract Year as the Surrender will be deducted from the Accumulation Value prior to the Surrender | |
Charges applicable at the time of Surrender. No Surrender Charges will apply after the Initial Guarantee Period ends. | |
To Surrender the Contract, you must provide Notice to Us of such Surrender. If we receive your Notice to Us before the close of | |
business on any Business Day, we will determine the Cash Surrender Value at the close of business on such Business Day; otherwise, | |
we will determine the Cash Surrender Value as of the close of the next Business Day. We will generally pay the Cash Surrender | |
Value within 7 days of receipt of Notice to Us of such Surrender. See page 22. | |
Withdrawals | |
You may take a portion of the Accumulation Value from the Contract (which we refer to as a Withdrawal). To make a Withdrawal, | |
you must provide Notice to Us of such Withdrawal. If we receive your Notice to Us before the close of business on any Business | |
Day, we will determine the amount of the Accumulation Value at the close of business on such Business Day; otherwise, we will | |
determine the amount of the Accumulation Value as of the close of the next Business Day. A Withdrawal may be subject to a | |
Surrender Charge. The Surrender Charge is a percentage of and deducted from the Accumulation Value, after the MVA. | |
We currently offer the following Withdrawal options: | |
· | Regular Withdrawals; and |
· | Systematic Withdrawals. |
Regular Withdrawals and the Minimum Withdrawal Amount | |
After your Right to Examine and Return this Contract period has expired (see page 23), you may make one or more regular | |
Withdrawals. Each Withdrawal must be a minimum of the lesser of: | |
· | $1,000; |
· | The Interest Withdrawal Amount; and |
· | The minimum distribution amount for qualified Contracts required by the Code (see page 31). |
IMPORTANT NOTE: You will pay applicable Surrender Charges, if any, and the MVA will apply to any such | |
Withdrawals that exceed the Interest Withdrawal Amount. | |
You are permitted to make regular Withdrawals regardless of whether you have previously elected, or continue to elect, to make | |
systematic Withdrawals. Except for Contracts issued in Arizona, a Withdrawal will be deemed a Surrender and the Cash Surrender | |
Value will be paid if, after giving effect to such Withdrawal, the Cash Surrender Value remaining would be less than $2,500. | |
17 |
Systematic Withdrawals | |
You may choose to receive automatic systematic Withdrawal payments from the Accumulation Value, provided you are not making | |
IRA withdrawals (see “Withdrawals from Individual Retirement Annuities” below). You may take systematic Withdrawals | |
monthly, quarterly or annually. Systematic Withdrawals will incur Surrender Charges, and the MVA may apply, as applicable. There | |
is no additional charge for electing the systematic Withdrawal option. | |
If you are eligible for systematic Withdrawals, you must provide Notice to Us of the date on which you would like such systematic | |
Withdrawals to start. This date must be no earlier than 30 days after the Contract Date and no later than the 28th day of the calendar | |
month. For a day that is after the 28th day of the calendar month, the payment will be made on the first Business Day of the next | |
succeeding calendar month. Subject to these restrictions on timing, if you have not indicated a start date, your systematic Withdrawals | |
will be made starting on the next Business Day after your Contract Date at the frequency you have selected, which may be either | |
monthly, quarterly or annually. If the day on which a systematic Withdrawal is scheduled to occur is not a Business Day, the | |
Withdrawal will be made on the next succeeding Business Day. | |
The amount of your systematic Withdrawal can be expressed as either: | |
· | A fixed dollar amount; or |
· | The interest earned, if any, during the prior 12 months not previously withdrawn, which we refer to as the Interest |
Withdrawal Amount. | |
The amount withdrawn by each systematic Withdrawal must be a minimum of $100. You may change your systematic Withdrawal | |
election once per Contract Year, except in a Contract Year during which you have previously made a regular Withdrawal. You may | |
cancel the systematic Withdrawal option at any time. You must provide Notice to Us at least 7 days before the date of the next | |
scheduled systematic Withdrawal to ensure such systematic Withdrawal and successive systematic Withdrawals are not affected. | |
Surrender Charges on Systematic Withdrawals | |
Systematic Withdrawals will incur Surrender Charges, unless you elect to limit the amount of your systematic Withdrawals to the | |
Interest Withdrawal Amount. In the event that a systematic Withdrawal incurs a Surrender Charge, we will deduct the Surrender | |
Charge from the Accumulation Value. | |
Market Value Adjustments on Systematic Withdrawals | |
A MVA will apply to systematic Withdrawals, unless you elect to limit the amount of your systematic Withdrawals to the Interest | |
Withdrawal Amount. In the event that a systematic Withdrawal is subject to the MVA, we will apply the MVA to the Accumulation | |
Value prior to deducting applicable Surrender Charges, if any. | |
Withdrawals from Individual Retirement Annuities | |
If you have an IRA Contract (other than a Roth IRA Contract) and will be at least age 70½ during the current calendar year, you may, | |
pursuant to your IRA Contract, elect to have distributions made to you to satisfy requirements imposed by U.S. federal income tax | |
law. Such IRA Withdrawals provide for the payout of amounts required to be distributed by the Internal Revenue Service rules | |
governing mandatory distributions under qualified plans. | |
If you elect to make IRA Withdrawals, we will send you a notice. You may elect to make IRA Withdrawals at that time, or at a later | |
date. Any IRA Withdrawals will be made at the frequency you have selected (which may be monthly, quarterly or annually) and will | |
commence on the start date you have selected, which must be no earlier than 30 days after the Contract Date and no later than the 28th | |
day of any calendar month. For a day that is after the 28th day of the calendar month, the payment will be made on the first Business | |
Day of the next succeeding month. Subject to these restrictions on timing, if you have not indicated a start date, your IRA | |
Withdrawals will begin on the first Business Day following your Contract Date at the frequency you have selected. | |
At your discretion, you may request that we calculate the amount that you are required to withdraw from your IRA Contract each year | |
based on the information you give us and the various options under the IRA Contract that you have chosen. This amount will be a | |
minimum of $100 per IRA Withdrawal. Alternatively, we will accept your written instructions setting forth your calculation of the | |
required amount to be withdrawn from your IRA Contract each year, also subject to the $100 minimum per IRA Withdrawal. If at any | |
time the IRA Withdrawal amount is greater than the Accumulation Value, we will immediately terminate the IRA Contract and | |
promptly send you an amount equal to the Cash Surrender Value. | |
18 |
You may not elect to make IRA Withdrawals if you have already elected to make systematic Withdrawals. Additionally, since only | |
one systemic Withdrawal option may be elected at a time, if you have elected to make such systematic Withdrawals, the distributions | |
thereunder must be sufficient to satisfy the mandatory distribution rules imposed by U.S. federal income tax law; otherwise, we may | |
alter such distributions to comply with U.S. federal income tax law. You are permitted to change the frequency of your IRA | |
Withdrawals once per Contract Year, and you may cancel IRA Withdrawals altogether at any time by providing Notice to Us at least 7 | |
days before the next scheduled IRA Withdrawal date to ensure such scheduled IRA Withdrawal and successive IRA Withdrawals are | |
not affected. | |
Death Benefit | |
Death Benefit prior to the Annuity Commencement Date | |
The Contract provides for a Death Benefit equal to the Accumulation Value, plus the MVA, but only if the adjustment would be | |
positive. The Death Benefit is calculated as of the date of death of any Owner (or, if the Owner is not a natural person, upon any | |
Annuitant’s death) and payable upon: | |
· | Our receipt of Proof of Death (provided the Accumulation Value has not been applied to an Annuity Plan); and |
· | Our receipt of all required claim forms. |
Proof of Death is the documentation we deem necessary to establish death, including, but not limited to: | |
· | A certified copy of a death certificate; |
· | A certified copy of a statement of death from an attending physician; |
· | A finding of a court of competent jurisdiction as to the cause of death; or |
· | Any other proof that we deem in our sole discretion to be satisfactory to us. |
From the date of death until the Death Benefit is paid, we will credit the Death Benefit with interest at the greater of: | |
· | The Company Death Benefit Rate, which is the effective annual interest rate, determined solely in our discretion and subject |
to change; or | |
· | The applicable state interest rate required to be paid on annuity death claims, if any. |
The Company Death Benefit Rate may be less than the Guarantee Period Interest Rate in effect as of the date of death, but shall not be | |
less than zero percent, and for Contracts issued in Virginia, shall not be greater than 6%. Your Beneficiaries may contact us to | |
determine the current Company Death Benefit Rate. Contact information for our Customer Service is specified on page 1. | |
Once we have received Proof of Death and all required documentation necessary to process the claim, we will generally pay the Death | |
Benefit within 7 days of such date. We will pay the Death Benefit under a nonqualified Contract according to Section 72(s) of the | |
Code. Only one Death Benefit is payable under the Contract. The Death Benefit will be paid to the named Beneficiary, unless the | |
Contract has joint Owners (or if the Owner is not a natural person, two Annuitants), in which case any surviving Owner (or Annuitant, | |
as applicable) will take the place of, and be deemed to be, the Beneficiary entitled to collect the Death Benefit. The Owner may | |
restrict how the Beneficiary is to receive the Death Benefit (e.g., by requiring a lump-sum payment, installment payments or that any | |
amount be applied to an Annuity Plan). See page 10. | |
Spousal Beneficiary Contract Continuation | |
Any surviving spouse of a deceased Owner who is a named Beneficiary (or deemed Beneficiary) has the option, but is not required, to | |
continue the Contract under the same terms existing prior to such Owner’s death. Such election would be in lieu of payment of the | |
Death Benefit. The surviving spouse’s right to continue the Contract is limited by our use of the term “spouse,” as it is defined under | |
U.S. federal law, which refers only to a person of the opposite sex who is a husband or a wife. Also, the surviving spouse may not | |
continue the Contract if he or she is age 90 or older on the date of the Owner’s death (age 85 or older for Contracts issued in | |
Minnesota). | |
If the surviving spouse elects to continue the Contract, the following will apply: | |
· | The surviving spouse will replace the deceased Owner as the Annuitant (if the deceased Owner was the Annuitant); |
· | The age of the surviving spouse will be used as the Owner’s age under the continued Contract as the surviving spouse will |
become the new Owner of the Contract; | |
· | The Initial Guarantee Period may not extend beyond the latest Annuity Commencement Date for the surviving spouse; |
· | All rights of the surviving spouse as the Beneficiary under the Contract in effect prior to such continuation election will |
cease; | |
· | Any Surrender Charge applicable to the Single Premium paid prior to the original Owner’s death will be waived (the MVA |
will continue to apply, however, to a subsequent Surrender or any Withdrawals); | |
19 |
· | All rights and privileges granted by the Contract or allowed by us will belong to the surviving spouse as the Owner of the |
continued Contract; and | |
· | Upon the death of the surviving spouse as the Owner of the Contract, the Death Benefit will be distributed to the Beneficiary |
or Beneficiaries as described below, and the Contract will terminate. | |
Payment of the Death Benefit to a Spousal or Non-spousal Beneficiary | |
Subject to any payment restriction imposed by the Owner, the Beneficiary may decide to receive the Death Benefit: | |
· | In one lump sum payment or installment payments; or |
· | By applying the Death Benefit to an Annuity Plan |
The Beneficiary may receive the Death Benefit in one lump sum payment or installment payments, provided the Death Benefit is | |
distributed to the Beneficiary within 5 years of the Owner’s death. The Beneficiary has until 1 year after the Owner’s death to decide | |
to apply the Death Benefit to an Annuity Plan. If the Death Benefit is applied to an Annuity Plan, the Beneficiary is deemed to be the | |
Annuitant, and the Annuity Payments must: | |
· | Be distributed in substantially equal installments over the life of such Beneficiary or over a period not extending beyond the |
life expectancy of such Beneficiary; and | |
· | Begin no later than 1 year after the date of the Owner’s death. |
If we do not receive a request to apply the Death Benefit to an Annuity Plan, we will make a single lump-sum payment to the | |
Beneficiary. Unless you elect otherwise, the payment will generally be made into an interest bearing account, backed by our general | |
account. This account is not FDIC insured and can be accessed by the Beneficiary through a draftbook feature. The Beneficiary may | |
access the Death Benefit proceeds at any time without penalty. For information on required distributions under U.S. federal income | |
tax laws, see “Required Distributions upon Contract Owner’s Death” below. At the time of death benefit election, the Beneficiary | |
may elect to receive the Death Benefit directly by check rather than through the draftbook feature of the interest bearing account by | |
notifying the Customer Service. | |
The Beneficiary may elect to receive the Death Benefit in payments over a period of time based on his or her life expectancy. These | |
payments are sometimes referred to as stretch payments. Stretch payments for each calendar year will vary in amount because they | |
are based on the Accumulation Value and the Beneficiary’s remaining life expectancy. The first stretch payment must be made by the | |
first anniversary of the Owner’s date of death. Each succeeding stretch payment is required to be made by December 31st of each | |
calendar year. Stretch payments are subject to the same conditions and limitations as systematic Withdrawals. See page 18. The | |
rules for, and tax consequences of, stretch payments are complex and contain conditions and exceptions not covered in this prospectus. | |
You should consult a tax adviser for advice about the effect of U.S. federal income tax laws, state laws or any other tax laws | |
affecting the Contract, or any transactions involving the Contract. | |
Death Benefit after the Annuity Commencement Date | |
There is no Death Benefit once the Owner decides to begin receiving Annuity Payments (see below). In the event that the Owner dies | |
(or, in the event that the Owner is not a natural person, the Annuitant dies) before all guaranteed Annuity Payments have been made | |
pursuant to any applicable Annuity Plan, we will continue to make the Annuity Payments until all such guaranteed payments have | |
been made. The Annuity Payments will be paid to the Beneficiary according to the Annuity Plan at least as frequently as before the | |
death of the Owner or Annuitant, as applicable. | |
Annuity Payments and Annuity Plans | |
Annuity Payments | |
The Contract provides for Annuity Payments. You can apply the Accumulation Value, plus the MVA (only if the adjustment would | |
be positive), less any premium tax owed, to an Annuity Plan on any date following the first Contract Anniversary, which date we refer | |
to as the Annuity Commencement Date. The Annuity Commencement Date cannot be later than the Contract Anniversary on or next | |
following the oldest Annuitant’s 90th birthday (or the Contract Anniversary on or next following the oldest Annuitant’s 85th birthday if | |
the Contract was issued prior to January 3, 2011, or if the Contract was issued in Minnesota), unless: | |
· | We agree to a later date; or |
· | The Internal Revenue Service publishes a final regulation or a revenue ruling concluding that an annuity contract with an |
Annuity Commencement Date that is later than the Contract Anniversary following the oldest Annuitant’s 90th birthday (or | |
the Contract Anniversary on or next following the oldest Annuitant’s 85th birthday if the Contract was issued prior to | |
January 3, 2011, or if the Contract was issued in Minnesota) will be treated as an annuity for U.S. federal tax purposes. | |
20 |
Notice to Us is required at least 30 days in advance of the date you wish to begin receiving Annuity Payments after we issue the | |||
Contract. If you do not select an Annuity Commencement Date, you will be deemed to have selected the Contract Anniversary on or | |||
immediately following the oldest Annuitant’s 90th birthday (or the Contract Anniversary on or next following the oldest Annuitant’s | |||
85th birthday if the Contract was issued prior to January 3, 2011, or if the Contract was issued in Minnesota). | |||
On the Annuity Commencement Date, we will apply the Accumulation Value, plus any positive MVA, less any premium tax owed, to | |||
an Annuity Plan so long as the Annuitant is then living. If the Accumulation Value plus any positive MVA is less than $2,000 on the | |||
Annuity Commencement Date, we will pay such amount in a single lump-sum payment. Each Annuity Payment must be at least $20. | |||
We will make the Annuity Payments in monthly installments (although you can direct us to make the Annuity Payments quarterly, | |||
semi-annually or annually instead). We reserve the right in the Contract to make the Annuity Payments less frequently, as necessary, | |||
to make the Annuity Payment equal to at least $20. We may also change the $2,000 and $20 minimums based upon increases | |||
reflected in the Consumer Price Index for All Urban Consumers (CPI-U) since January 1, 2005. There is no Death Benefit once you | |||
begin to receive Annuity Payments under an Annuity Plan. | |||
We will determine the amount of the Annuity Payments on the Annuity Commencement Date as follows: | |||
Accumulation Value | |||
· | Plus the MVA (positive MVA only) | ||
· | Minus any premium tax that may apply | ||
· | Multiplied by the applicable payment factor, which depends on: | ||
> | The Annuity Plan; | ||
> | The frequency of Annuity Payments; | ||
> | The age of the Annuitant (and sex, where appropriate under applicable law); and | ||
> | A net investment return of 1.0% is assumed (we may pay a higher return at our discretion). | ||
IMPORTANT NOTE: For Contracts issued in Indiana, Iowa, Maryland, North Carolina, Pennsylvania, Texas | |||
and Washington, the net investment return will be the greater of 1% and the net investment return assumed | |||
under a single premium immediate annuity available for purchase at the time, using the Cash Surrender Value | |||
of this Contract, to the same class of Annuitants. | |||
· | Divided by 1,000. | ||
Annuity Plans | |||
You may elect one of the Annuity Plans described below, which provide for Annuity Payments of a fixed dollar amount only, using | |||
the Annuity 2000 Mortality Tables. In addition, you may elect any other Annuity Plan we may be offering on the Annuity | |||
Commencement Date. The Annuity Plan may be changed at any time before the Annuity Commencement Date upon 30 days prior | |||
Notice to Us. If you do not elect an Annuity Plan, Annuity Payments will be made automatically each month for a minimum of 120 | |||
months and as long thereafter as the Annuitant is living, based on the oldest Annuitant’s life, unless otherwise limited by applicable | |||
law. | |||
Your election of an Annuity Plan is subject to the following additional terms and conditions: | |||
· | Annuity Payments will be made to the Owner, unless you provide Notice to us directing otherwise; | ||
· | You must obtain our consent if the payee is not a natural person; and | ||
· | Any change in the payee will take effect as of the date we receive Notice to Us. | ||
Payments for a Period Certain | |||
Annuity Payments are made in equal installments for a fixed number of years. The number of years cannot be less than 10 or | |||
more than 30, unless otherwise required by applicable law. | |||
Payments for Life with a Period Certain | |||
Annuity Payments are made for a fixed number of years and as long thereafter as the Annuitant is living. The number of years | |||
cannot be less than 10 or more than 30, unless otherwise required by applicable law. | |||
21 |
Life Only Payments | |
Annuity Payments are made for as long as the Annuitant is living. | |
Joint and Last Survivor Life Payments | |
Annuity Payments are made for as long as either of two Annuitants is living. | |
Death of the Annuitant who is not an Owner | |
In the event the Annuitant dies on or after the Annuity Commencement Date but before all Annuity Payments have been made | |
pursuant to the Annuity Plan elected, we will continue the Annuity Payments until all guaranteed payments have been made. The | |
Annuity Payments will be paid at least as frequently as before the Annuitant’s death until the end of any guaranteed period certain. | |
We may require Proof of Death in regard to the Annuitant before continuing the Annuity Payments. | |
Other Important Information | |
Annual Report to Owners | |
At least once a year, we will send you, without charge, a report showing the current Accumulation Value and the Cash Surrender | |
Value. This report will also show of the amounts deducted from, or added to, the Accumulation Value since the last report. This | |
report will include any other information that is required by law or regulation. | |
In addition we will provide you with any other reports, notices or documents that we are required by applicable law to furnish to you. | |
We will send this report to you at your last known address within 60 days after the report date. Upon your request, we will provide | |
additional reports, but we reserve the right in the Contract to assess a reasonable charge for each such additional report. | |
Suspension of Payments | |
We reserve the right to suspend or postpone the date of any payment or determination of any value (including the Accumulation | |
Value) under the Contract, beyond the 7 permitted days, on any Business Day that: | |
· | The NYSE is closed; |
· | Trading on the NYSE is restricted; |
· | An emergency exists as determined by the SEC; or |
· | The SEC so permits for the protection of security holders. |
We have the right to delay payment for up to 6 months, contingent upon written approval by the insurance supervisory official in the | |
jurisdiction in which this Contract is issued. | |
Misstatement Made by Owner in Connection with Purchase of this Contract | |
We may require proof of the age and sex of the person upon whose life certain benefit payments are determined (i.e., the Death | |
Benefit or Annuity Payments). If the Owner misstates the age or sex of a person in connection with the purchase of the Contract, we | |
reserve the right in the Contract to adjust (either upward or downward) these payments based on the correct age or sex. If an upward | |
adjustment to your benefit payment is required, we will include an amount in your next benefit payment representing the past | |
underpayments by us, with interest credited at the rate of 1.5% annually (where permitted). If a downward adjustment to your benefit | |
payment is required, we will make a deduction from future benefit payments until the past overpayments by us, plus interest at 1.5% | |
annually (where permitted), has been repaid in full by you. | |
Where permitted, we reserve the right in the Contract to void the Contract and return the Cash Surrender Value in the event of any | |
fraudulent material misrepresentation made by the Owner in connection with the purchase of the Contract. | |
Insurable Interest | |
We require the Owner of the Contract to have an insurable interest in the Annuitant. Insurable interest means the Owner has a lawful | |
and substantial economic interest in the continued life of the Annuitant. An insurable interest does not exist if the Owner’s sole | |
economic interest in the Annuitant arises as a result of the Annuitant’s death. A natural person is presumed to have an insurable | |
interest in his or her own life. A natural person is also generally considered to have an insurable interest in his or her spouse and | |
family members. State statutory and case law have established guidelines for circumstances in which an insurable interest is generally | |
considered to exist: | |
· | Relationships between parent and child, brother and sister, and grandparent and grandchild; and |
· | Certain business relationships and financial dependency situations (e.g., uncle has insurable interest in nephew who runs the |
uncle’s business and makes money for the uncle). | |
22 |
The above list is not comprehensive, but instead contains some common examples to help illustrate what it means for the Owner to |
have an insurable interest in the Annuitant. You should consult your agent/registered representative for advice on whether the Contract |
Owner would have an insurable interest in the Annuitant to be designated. |
An insurable interest must exist at the time we issue the Contract. In purchasing the Contract, you will represent and acknowledge |
that the Owner has an insurable interest in the Annuitant. We require the agent/registered representative to confirm on the application |
that the Owner has an insurable interest in the Annuitant. We also require that any new Owner after issuance of the Contract to have |
an insurable interest in the Annuitant. We will seek to void the Contract if we discover it was applied for and issued (or ownership |
was transferred) based on misinformation, or information that was omitted, in order to evade state insurable interest and other laws |
enacted to prevent an Owner from using the Contract to profit from the death of a person in whom such Owner does not have an |
insurable interest. |
Assignment |
You may assign a nonqualified Contract as collateral security for a loan or other obligation. This kind of assignment is not a change |
of ownership. But you should understand that your rights, and those of any Beneficiary, are subject to the terms of the assignment. |
To make, modify or release an assignment, you must provide Notice to Us. Except as noted below, your instructions will take effect |
as of the date we receive Notice to Us. For Contracts issued in Indiana, Iowa, Maryland, North Carolina, Pennsylvania, Texas and |
Washington, your instructions will take effect as of the date Notice to Us is signed by you, unless you specify otherwise, subject to |
any payments we make or actions we take prior to our receipt of such Notice of Us. We require written consent of any Irrevocable |
Beneficiary before your instructions will take effect. An assignment likely has U.S. federal income tax consequences. You should |
consult a tax adviser for tax advice. We are not responsible for the validity, tax consequences or other effects of any assignment you |
choose to make. |
Contract Changes — Applicable Tax Law |
We have the right to make changes to the Contract so that it continues to qualify as an annuity under applicable U.S. federal income |
tax law. If we deem it necessary to make such changes for tax reasons, we will give you advance notice of how and when your |
Contract will likely change. |
Right to Examine and Return this Contract Period |
For a prescribed period, you may return the Contract for any reason or no reason at all, which we refer to as the Right to Examine and |
Return this Contract period. Subject to the state requirements specified in the table below, you may return the Contract within 10 days |
of your receipt of it, and you have up to 30 days if the Contract was issued as a replacement contract. Unless as otherwise noted |
below, if so returned, we will promptly pay you the Accumulation Value, adjusted for any MVA. See page 13. In the event that the |
MVA is negative, the amount we pay you could be less than the Single Premium. |
If you decide to return the Contract, you must deliver it: | |
· | To us at our Customer Service (the address of which appears on page 1); or |
· | To your agent/registered representative. |
Non-Waiver | |
We may, in our discretion, elect not to exercise a right, privilege or option under the Contract. Such election will not constitute our | |
waiver of the right to exercise the right, privilege or option at a later date, nor will it constitute a waiver of any provision of the | |
Contract. | |
Special Arrangements | |
We may reduce or waive any Contract fees or charges for certain group or sponsored arrangements, under special programs, and for | |
certain employees, agents, and related persons of our parent corporation and its affiliates. We reduce or waive these items based on | |
expected economies, and the variations are based on differences in costs or services. | |
Selling the Contract | |
Our affiliate, Directed Services LLC, 1475 Dunwoody Drive, West Chester, Pennsylvania 19380 is the principal underwriter and | |
distributor of the Contract as well as of contracts issued by our affiliate, Voya Insurance and Annuity Company. Directed Services | |
LLC, a Delaware limited liability company, is registered with the SEC as a broker/dealer under the Securities Exchange Act of 1934, | |
as amended, and is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). | |
24 |
Directed Services LLC does not retain any commissions or compensation that we pay to it for Contract sales. Directed Services LLC | |
enters into selling agreements with affiliated and unaffiliated broker/dealers to sell the Contracts through their registered | |
representatives who are licensed to sell securities and variable insurance products, which representatives we refer to as selling firms. | |
Selling firms are also registered with the SEC and are FINRA member firms. | |
The following selling firm is affiliated with the Company and has entered into a selling agreement with Directed Services LLC for the | |
sale of our variable annuity contracts: | |
· | Voya Financial Advisors, Inc. |
Directed Services LLC pays selling firms compensation for the promotion and sale of the Contracts. Registered representatives of the | |
selling firms who solicit sales of the Contracts typically receive a portion of the compensation paid by Directed Services LLC to such | |
selling firm in the form of commissions or other compensation, depending on the agreement between the selling firm and the | |
registered representative. This compensation, as well as other incentives or payments, is not paid directly by Owners of the Contract. | |
We intend to recoup this compensation and other sales expenses paid to selling firms through fees and charges imposed under the | |
Contracts. | |
Directed Services LLC pays selling firms for Contract sales according to one or more schedules. This compensation is generally | |
based on a percentage of premium payments. Selling firms may receive commissions of up to 2.75% of premium payments. | |
Individual representatives may receive all or a portion of the compensation paid to their selling firm, depending on such selling firm’s | |
practices. Commissions and annual compensation, when combined with additional compensation or reimbursement of expenses (as | |
more fully described below), could exceed 2.75% of total premium payments. | |
Directed Services LLC has special compensation arrangements with certain selling firms based on such firms’ aggregate or anticipated | |
sales of the Contracts or other specified criteria. These special compensation arrangements will not be offered to all selling firms, and | |
the terms of such arrangements may differ among selling firms based on various factors. Any such compensation payable to a selling | |
firm will not result in any additional direct charge to you by us. | |
In addition to the direct cash compensation for sales of Contracts described above, Directed Services LLC may also pay selling firms | |
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 premium 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 calendar year; | |
· | Loans or advances of commissions in anticipation of future receipt of premium payments (i.e., a form of lending to |
agents/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 terms may be conditioned on fixed | |
insurance product 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 broker/dealers to use in sales contests and/or meetings for their |
agents/registered representatives who sell our products. We do not hold contests based solely on the sales of the Contract; | |
· | Certain overrides and other benefits that may include cash compensation based on the amount of earned commissions, |
agent/representative recruiting or other activities that promote the sale of Contracts; and | |
· | Additional cash or non-cash 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 Contract. | |
25 |
The following is a list of the top 25 selling firms that, during 2013, received the most total dollars of compensation, in the aggregate, | |||
from us in connection with the sale of registered annuity contracts issued by us, ranked from greatest compensation to least | |||
compensation: | |||
1. | ING Financial Partners Inc. | 14. | BC Ziegler and Company |
2. | Wells Fargo Advisors, LLC | 15. | Securities America, Inc. |
3. | UBS Financial Services Inc. | 16. | First Allied Securities Inc. |
4. | Morgan Stanley Smith Barney LLC | 17. | Mid Atlantic Capital Corporation |
5. | LPL Financial Corporation | 18. | Commonwealth Equity Services, Inc. |
6. | Cetera Advisor Networks LLC | 19. | Cambridge Investment Research Inc. |
7. | Raymond James and Associates Inc. | 20. | Ameriprise Financial Services Inc. |
8. | Merrill Lynch, Pierce, Fenner & Smith, Incorporated | 21. | Directed Services LLC |
9. | RBC Capital Markets Corporation | 22. | US Bancorp Investments, Inc. |
10. | Stifel Nicolaus and Company Incorporated | 23. | Vanderbilt Securities LLC |
11. | Royal Alliance Associates Inc. | 24. | Sagepoint Financial Inc. |
12. | Edward D. Jones & Co., L.P. dba Edward Jones | 25. | Proequities Inc. |
13. | FSC Securities Corporation | ||
Directed Services LLC may also compensate wholesalers/distributors, and their sales management personnel, for Contract sales within | |||
the wholesale/distribution channel. This compensation may be based on a percentage of premium payments and/or a percentage of | |||
Accumulation Value. Directed Services LLC may, at its discretion, pay additional cash compensation to wholesalers/distributors for | |||
sales by certain broker-dealers or “focus firms.” | |||
This is a general discussion of the types and levels of compensation paid by us for sale of our registered annuity contracts. It is | |||
important for you to know that the payment of volume- or sales-based compensation to a selling firm or registered representative may | |||
provide such selling firm or registered representative a financial incentive to promote our products, such as the Contract, over those of | |||
another company, and may also provide a financial incentive to promote one of our contracts over another, such as the Contract. | |||
State Regulation | |||
We are regulated by the Insurance Department of the State of Connecticut. We are also subject to the insurance laws and regulations | |||
of all jurisdictions in which we do business. The Contract offered by this prospectus has been approved where required by such | |||
jurisdictions. We are required to submit annual statements of our operations, including financial statements, to the insurance | |||
departments of the various jurisdictions in which we do business to allow regulators to access our solvency and compliance with state | |||
insurance laws and regulations. | |||
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, Directed Services LLC ability to distribute the contract or upon the separate account. | |||
Litigation. Notwithstanding the foregoing, the Company and/or Directed Services 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. Certain claims are | |||
asserted as class actions. 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 Directed Services 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. Regulatory investigations, exams, inquiries and | |||
audits could result in regulatory action against the Company or subject the Company to settlement payments, fines, penalties and other | |||
financial consequences, as well as changes to the Company’s policies and procedures. | |||
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. | |||
26 |
Legal Matters | |
The Company’s organization and authority, and the Contract’s legality and validity, have been passed on by the Company’s legal | |
department. | |
Experts | |
The consolidated financial statements of the Company on Form 10-K for the year ended December 31, 2013 (including schedules | |
appearing therein), have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their | |
reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated | |
herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing. | |
Further Information | |
This prospectus does not reflect all of the information contained in the registration statement, of which this prospectus is 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 Room of the SEC at: | |
Securities and Exchange Commission | |
100 F Street NE, Room 1580 | |
Washington, DC 20549 | |
You may also obtain copies of these materials at prescribed rates from the Public Reference Room of the above office. More | |
information on the operation of the Public Reference Room 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 https://voyaretirement.voyaplans.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 333-166370. | |
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 | |
incorporated documents are considered part of this prospectus. We can disclose important information to you by referring you to | |
those documents. This prospectus incorporates by reference the: | |
· | Annual Report on Form 10-K for the year ended December 31, 2013; and |
· | Quarterly Report on Form 10-Q for the period ended September 30, 2014. |
Form 10-K contains additional information about the Company and includes certified financial statements as of December 31, 2013 | |
and 2012, and for each of the three years in the period ended December 31, 2013. We were not required to file any other reports | |
pursuant to Sections 13(a) or 15(d) of the Exchange Act since September 30, 2014. 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. | |
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 10450 | |
Des Moines, Iowa 50306-0450 | |
(888) 854-5950 | |
Inquiries | |
You may contact us directly by writing or calling us at the address or phone number shown above. | |
27 |
United States Federal Tax Considerations | ||
Introduction | ||
The Contract is designed to be treated as an annuity for U.S. federal income tax purposes. The U.S. federal income tax treatment of | ||
the Contract is complex and sometimes uncertain. You should keep the following in mind when reading it: | ||
· | Your tax position (or the tax position of the designated Beneficiary, as applicable) may influence the U.S. federal taxation of | |
amounts held, or paid out, under the Contract; | ||
· | Tax laws change. It is possible that a change in the future could retroactively affect contracts issued in the past, including the | |
contract described in this prospectus; | ||
· | This section addresses some, but not all, applicable U.S. federal income tax rules and does not discuss U.S. federal estate and | |
gift tax implications, state and local taxes, taxes of any foreign jurisdiction or any other tax provisions; and | ||
· | We do not make any guarantee about the tax treatment of the Contract or transactions involving the Contract. | |
The information provided herein is not tax advice. For advice about the effect of U.S. federal income tax laws affecting the Contract, | ||
state tax laws or any other tax laws affecting the Contract or any transactions involving the Contract, you should consult a tax adviser. | ||
Types of Contracts: Nonqualified and Qualified | ||
Nonqualified annuity contracts are purchased with after-tax money to save money for retirement in exchange for the right to receive | ||
annuity payments for either a specified period of time or over the lifetime of an individual. Qualified annuity contracts are designed | ||
for use by individuals whose premium payments are comprised solely of proceeds from retirement plans, pre-tax contributions to | ||
Individual Retirement Annuities (“IRA”) or after-tax contributions to a Roth IRA that are intended to qualify for special favorable | ||
income tax treatment under Section 408 or 408A of the Code, respectively. | ||
Taxation of Nonqualified Contracts | ||
Premiums | ||
You may not deduct the amount of premiums paid into a nonqualified annuity contract. | ||
Taxation of Gains Prior to Distribution | ||
Section 72 of the Code governs the general U.S. federal income taxation of annuity contracts. If the owner of a nonqualified annuity | ||
contract is a natural person (e.g., an individual), generally such owner will not be taxed on increases in the value of his or her | ||
nonqualified contract until a distribution occurs or until annuity payments begin. An agreement to assign or pledge any portion of the | ||
contract’s value generally will be treated as a distribution. To be eligible to defer U.S. federal income taxation on the increases in the | ||
value of the contract, each of the following requirements must be satisfied. | ||
1. Required Distributions. To be treated as an annuity contract for U.S. federal income tax purposes, the Code requires | ||
any nonqualified contract to contain certain provisions specifying how the owner’s interest will be distributed in the | ||
event of the owner’s death. As a result, your Contract contains certain provisions that are intended to comply with these | ||
Code requirements. | ||
Different distribution requirements apply if the contract owner’s death occurs: | ||
· | After he or she begins receiving annuity payments under the contract; or | |
· | Before he or she begins receiving such distributions. | |
If the contract owner’s death occurs after he or she begins receiving annuity payments, distributions must be made at | ||
least as rapidly as under the method in effect at the time of such contract owner’s death. | ||
If the contract owner’s death occurs before he or she begins receiving annuity payments, such contract owner’s entire | ||
balance must be distributed within five years after the date of his or her death. For example, if the contract owner died | ||
on September 1, 2013, his or her entire balance must be distributed by August 31, 2018. However, if distributions begin | ||
within one year of such contract owner’s death, then payments may be made over either of the following two | ||
timeframes: | ||
· | Over the life of the designated beneficiary; or | |
· | Over a period not extending beyond the life expectancy of the designated beneficiary. | |
28 |
Under the terms of the Contract, if the designated Beneficiary is your spouse, your Contract may be continued after your | ||
death with the surviving spouse as the new Contract Owner. | ||
There are currently no regulations interpreting these Code requirements; however, if such requirements are clarified by | ||
regulation or otherwise, we will review the distribution provisions in your Contract and, if necessary, modify them to | ||
assure that such provisions comply with the applicable requirements. | ||
2. | Owners of Nonqualified Contracts That Are Not Natural Persons. If the owner of a nonqualified annuity contract is | |
not a natural person, such contract generally is not treated as an annuity for U.S. federal income tax purposes and any | ||
income on such contract during the applicable taxable year is taxable as ordinary income. The income on the contract | ||
during the applicable taxable year is equal to any increase in the contract’s value over the “investment in the contract” | ||
(generally, the premiums or other consideration paid for such contract less any nontaxable withdrawals) during such | ||
taxable year. There are certain exceptions to this rule, and a non-natural person considering an investment in the | ||
Contract should consult with its tax adviser prior to purchasing the Contract. If the Contract Owner is not a natural | ||
person and the primary Annuitant dies, the same rules apply on the death of the primary Annuitant as outlined above for | ||
the death of a Contract Owner. | ||
When the contract owner is a non-natural person, a change in the Annuitant is treated as the death of such contract | ||
owner. | ||
3. | Delayed Annuity Starting Date. If the date on which annuity payments begin under a nonqualified annuity contract | |
occurs, or is scheduled to occur, at a time after the Annuitant has, or will have, reached an advanced age (e.g., after age | ||
85), it is possible that such contract will not be treated as an annuity for U.S. federal income tax purposes. In that event, | ||
the income and gains under such contract could be currently includible in the contract owner’s taxable income. | ||
Taxation of Distributions | ||
General. When a withdrawal from a nonqualified annuity contract occurs, the amount received will be treated as ordinary | ||
income, subject to U.S. federal income tax, up to an amount equal to the excess, if any, of the contract’s value immediately prior to the | ||
distribution (without regard to the amount of any Surrender Charge) over the contract owner’s investment in the contract at such time. | ||
Investment in the contract generally is equal to the amount of all premiums paid into the contract, plus amounts previously included in | ||
taxable income as a result of certain loans, assignments, pledges and gifts, less the aggregate amount of non-taxable distributions | ||
previously made under such contract. | ||
In the case of a Surrender of a nonqualified annuity contract, the amount received generally will be taxable only to the extent it | ||
exceeds the contract owner’s investment in such contract (i.e., the cost basis). | ||
10% Penalty Tax. A distribution from a nonqualified annuity contract may be subject to a U.S. federal tax penalty equal to | ||
10% of the amount treated as income. In general, however, there is no penalty on distributions from nonqualified contracts if such | ||
distributions are: | ||
· | Made on or after the taxpayer reaches age 59½; | |
· | Made on or after the death of the contract owner (or the Annuitant, if the contract owner is a non-natural person); | |
· | Attributable to the taxpayer’s becoming “disabled,” as defined in the Code; | |
· | Made as part of a series of substantially equal periodic payments (which payments are made at least annually) over the life or | |
the life expectancy of the taxpayer, or the joint lives or joint life expectancies of the taxpayer and his, her or its designated | ||
beneficiary; or | ||
· | Allocable to investment in the contract before August 14, 1982. | |
The 10% penalty does not apply to distributions from an “immediate annuity,” as defined in the Code. Other exceptions may be | ||
applicable under certain circumstances, and special rules may be applicable in connection with the exceptions listed above. You | ||
should consult a tax adviser with regard to whether any distributions from your Contract meet the exceptions from the 10% penalty tax | ||
as provided in the Code. | ||
Tax-Free Exchanges. Section 1035 of the 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 carry over to the new | ||
contract. You should consult with your tax adviser regarding the procedures for making a Section 1035 exchange. | ||
29 |
If your Contract is acquired through a tax-free exchange of a life insurance, endowment or annuity contract that was purchased prior to | ||
August 14, 1982, then any distributions from your Contract, other than Annuity Payments, will be treated, for U.S. federal income tax | ||
purposes, as coming: | ||
· | First, from any remaining “investment in the contract” made prior to August 14, 1982 and exchanged into your Contract; | |
· | Second, from any “income on the contract” attributable to the investment made prior to August 14, 1982; | |
· | Third, from any remaining “income on the contract”; and | |
· | Fourth, from any remaining “investment in the contract.” | |
The IRS has concluded that in certain instances, the partial exchange of a portion of one annuity contract for another annuity contract | ||
will be tax-free. Pursuant to IRS guidance, receipt of partial withdrawals or surrenders from either an original contract or a new | ||
contract during the 180 day period beginning on the date of the partial exchange may retroactively negate the tax-free treatment of the | ||
partial exchange. If this occurs, the partial withdrawal or surrender of the original contract will be treated as a withdrawal, taxable as | ||
ordinary income to the extent of gain in the original contract. Furthermore, if the partial exchange occurred prior to the contract owner | ||
reaching age 59½, the contract owner may be subject to an additional 10% tax penalty. We are not responsible for the manner in | ||
which any other insurance companies administer, recognize or report, for U.S. federal income tax purposes, Section 1035 exchanges | ||
and partial exchanges and what the ultimate tax treatment may be by the IRS. You should consult with your tax adviser with respect | ||
to any proposed Section 1035 exchange or partial exchange prior to proceeding with any such transaction with respect to your | ||
Contract. | ||
Taxation of Annuity Payments. Although the U.S. federal income tax consequences may vary depending on the payment | ||
option elected under an annuity contract, a portion of each annuity payment generally is not taxed as ordinary income, while the | ||
remainder is taxed as ordinary income. The non-taxable portion of an annuity payment generally is determined in a manner that is | ||
designed to allow the contract owner to recover his, her or its investment in the annuity contract ratably on a tax-free basis over the | ||
expected stream of annuity payments when annuity payments begin. Once the investment in such contract has been fully recovered, | ||
the full amount of each subsequent annuity payment will be subject to tax as ordinary income. | ||
On September 27, 2010, President Obama signed into law the Small Business Jobs Act of 2010, which included language that permits | ||
the partial annuitization of nonqualified annuities, effective for amounts received in taxable years beginning after December 31, 2010. | ||
The provision applies an exclusion ratio to any amount received as an annuity under a portion of an annuity provided that the annuity | ||
payments are made for a period of 10 years or more or for life. Please consult your tax adviser before electing a partial annuitization. | ||
Death Benefit. Amounts may be distributed from an annuity contract, such as the Contract, because of the contract owner’s | ||
death or the death of the Annuitant. Generally, such amounts are includible in the income of the recipient as follows: | ||
· | If distributed in a lump sum, such amounts are taxed in the same manner as a surrender of the contract; or | |
· | If distributed under a payment option, such amounts are taxed in the same way as annuity payments. | |
As discussed above, the Code contain special rules that specify how the contract owner’s interest in a nonqualified contract will be | ||
distributed and taxed in the event of the contract owner’s death. | ||
Assignments and Other Transfers. A transfer, pledge or assignment of ownership of a nonqualified annuity contract, the | ||
selection of certain annuity dates or the designation of an Annuitant or payee other than a contract owner may result in certain tax | ||
consequences that are not discussed herein. The assignment, pledge or agreement to assign or pledge any portion of the contract value | ||
generally will be treated as a distribution. You should consult your tax adviser regarding the potential tax effects of any transfer, | ||
pledge, assignment, or designation or exchange of your Contract or any portion of your Contract value. | ||
Immediate Annuities. Under Section 72 of the Code, an “immediate annuity” means an annuity: | ||
· | That is purchased with a single purchase payment; | |
· | With annuity payments starting within one year from the date of purchase; and | |
· | That provides a series of substantially equal periodic payments made at least annually. | |
Your Contract is not designed as an immediate annuity. If your Contract were treated as an immediate annuity, it could affect the U.S. | ||
federal income tax treatment of your Contract with respect to (a) the application of certain exceptions from the 10% early Withdrawal | ||
penalty, (b) ownership, if the Owner is not a natural person, and (c) certain exchanges. | ||
30 |
Multiple Contracts. U.S. federal income tax laws require that all nonqualified 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 Section 72(e) of the Code. In addition, the Treasury Department has specific | |
authority to issue regulations that prevent the avoidance of Section 72(e) of the Code through the serial purchase of annuity contracts | |
or otherwise. | |
Withholding. We will withhold and remit to the IRS a part of the taxable portion of each distribution made under your | |
Contract unless the intended recipient of the distribution notifies us at or before the time of such distribution that the recipient elects | |
not to have any amounts withheld. Withholding is mandatory, however, if the intended recipient of such distribution fails to provide a | |
valid taxpayer identification number or if we are notified by the IRS that the taxpayer identification number we have on file is | |
incorrect. 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 non-periodic payments. | |
Regardless of whether you elect to have U.S. federal income tax withheld, you are still liable for payment of U.S. 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 their residents. | |
Generally, an election out of federal withholding will also be considered an election out of state withholding. In some state, 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 our Customer Service. Contact information appears on page 1. | |
If you or your designated Beneficiary is a non-resident alien, withholding is governed by Section 1441 of the Code based on your or | |
your designated Beneficiary’s citizenship, country of domicile and treaty status, and we may require additional documentation or | |
information prior to processing any requested transaction. | |
Taxation of Qualified Contracts | |
General | |
The tax rules applicable to owners of qualified contracts vary according to the type of qualified contract and the specific terms | |
and conditions of the qualified contract. Qualified annuity contracts are designed for use by individuals whose premium payments are | |
comprised solely of proceeds from retirement plans, pre-tax contributions to IRA or after-tax contributions to a Roth IRA that are | |
intended to qualify for special favorable income tax treatment under Sections 408 or 408A of the Code, respectively. The ultimate | |
effect of U.S. federal income taxes on the amounts held under a qualified contract, or on annuity payments from a qualified contract, | |
depends on the type of qualified contract 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 retirement plan in order to continue receiving favorable tax treatment. | |
Under U.S. federal income tax laws, earnings on amounts held in qualified annuity contracts used as an IRA or Roth IRA generally | |
are not taxed until they are withdrawn. It is not necessary, however, to purchase a qualified contract to obtain the favorable tax | |
treatment accorded to an IRA or Roth IRA under Sections 408 or 408A of the Code, respectively. A qualified contract, therefore, does | |
not provide any tax benefits beyond the deferral already available to an IRA or Roth IRA under the Code. Qualified contracts 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 the alternatives available to you with your financial | |
adviser, taking into account the additional fees and expenses you may incur in purchasing a qualified contract, such as the Contract. | |
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 |
· | Certain other specified circumstances. |
Some qualified contracts may be subject to additional distribution or other requirements that are not incorporated into your Contract. | |
No attempt is made to provide more than general information about the use of this Contract as a qualified contract. Contract Owners, | |
Annuitants and Beneficiaries are cautioned that the rights of any person to any benefits under qualified contracts may be subject to the | |
terms and conditions of the retirement plans or programs themselves, regardless of the terms and conditions of the Contract. The | |
Company is not bound by the terms and conditions of such plans to the extent such terms contradict any language of the Contract, | |
unless we consent to be so bound. | |
Contract Owners 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 consult your legal and tax advisers regarding the | |
suitability of the Contract for your particular situation. | |
31 |
Tax Deferral | |
The following discussion assumes that a qualified contract is purchased with premium payments that are comprised solely of | |
proceeds from retirement plans, pre-tax contributions to IRA or after-tax contributions to a Roth IRA that are intended to qualify for | |
special favorable income tax treatment under Sections 408 or 408A of the Code, respectively. | |
Individual Retirement Annuities. Section 408 of the Code permits eligible individuals to contribute to an individual | |
retirement program known as an Individual Retirement Annuity. IRAs are subject to limits on: | |
· The amounts that can be contributed; | |
· The deductible amount of the contribution; and | |
· The time when distributions can begin. | |
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. | |
Employers may establish Simplified Employee Pension (“SEP”) plans to provide IRA contributions on behalf of their employees. If | |
you make a tax-free rollover of a distribution from an IRA, you may not make another tax-free rollover from the IRA within a one- | |
year period. You should be aware that sales of the Contract for use with IRAs may be subject to special requirements imposed by the | |
IRS. | |
The IRS has not reviewed the Contract described in this prospectus for qualification as an IRA and has not addressed, in a ruling of | |
general applicability, whether the Contract’s Death Benefit provisions comply with IRS qualification requirements. You should | |
consult with your tax adviser in connection with purchasing the Contract as an IRA. | |
Roth IRAs. Section 408A of the Code permits certain eligible individuals to contribute to a Roth IRA. Contributions to a | |
Roth IRA are not deductible, are subject to certain limitations and must be made in cash or as a rollover or transfer from another Roth | |
IRA or other IRA. Certain qualifying 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. If you make a tax-free rollover of a distribution from a Roth IRA to | |
another Roth IRA, you may not make another tax-free rollover from the Roth IRA within a one-year period. A 10% penalty 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 such conversion was made. | |
Sales of a contract for use with a Roth IRA may be subject to special requirements imposed by the IRS. The IRS has not reviewed the | |
Contract described in this prospectus for qualification as a Roth IRA and has not addressed, in a ruling of general applicability, | |
whether the Contract’s Death Benefit provisions comply with IRS qualification requirements. You should consult with your tax | |
adviser in connection with purchasing the Contract as a Roth IRA. | |
Contributions | |
In order to be excludable from gross income for U.S. federal income tax purposes, total annual contributions to certain qualified | |
contracts are limited by the Code. You should consult with your tax adviser in connection with contributions to a qualified contract. | |
Distributions – General | |
Certain tax rules apply to distributions from the Contract. A distribution is any amount taken from your Contract including | |
Withdrawals, Annuity Payments, rollovers, exchanges and Death Benefit proceeds. We report the taxable portion of all distributions | |
to the IRS. | |
Individual Retirement Annuities. All distributions from an IRA are taxed when 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 Code; or | |
· The IRA owner made after-tax contributions to the IRA (e.g., Roth). In this latter case, the distribution will be taxed | |
according to the rules detailed in the Code. | |
The Code imposes a 10% penalty tax on the taxable portion of any distribution from an IRA unless certain exceptions, including one | |
or more of the following, have occurred: | |
· | The IRA owner has attained age 59½; |
· | The IRA owner has become “disabled,” as defined in the Code; |
· | The IRA owner has died and the distribution is to the beneficiary of such IRA; |
· | The distribution amount is directly transferred into another eligible retirement plan or to an IRA in accordance with the terms |
of the Code; | |
32 |
· | The distribution is made due to an IRS levy upon the IRA owner’s plan; or | ||
· | The distribution is a qualified reservist distribution as defined under the Pension Protection Act of 2006. | ||
In addition, the 10% penalty tax does not apply to a distribution made from an IRA to pay for health insurance premiums for certain | |||
unemployed individuals, for a qualified first-time home purchase or for higher education expenses. | |||
Roth IRAs. A qualified distribution from a Roth IRA is not taxed when it is received. A qualified distribution is a | |||
distribution that is both: | |||
· | Made after the five-taxable year period beginning with the first taxable year for which a contribution was made to the | ||
Roth IRA’s owner; and | |||
· | Made after the Roth IRA owner (i) attains age 59½, (ii) dies, or (iii) becomes “disabled,” as defined in the Code, or (b) Is | ||
for a qualified first-time home purchase. | |||
If a distribution is not qualified, generally it will be taxable to the extent of the accumulated earnings. A partial distribution will first | |||
be treated as a return of contributions that is not taxable and then as taxable accumulated earnings. | |||
The Code imposes a 10% penalty tax on the taxable portion of any distribution from a Roth IRA that is not a qualified distribution | |||
unless certain exceptions have been met. In general, the exceptions from imposition of the 10% penalty on distribution from an IRA | |||
listed above also apply to a distribution from a Roth IRA. The 10% penalty tax is also waived on a distribution made from a Roth | |||
IRA to pay for health insurance premiums for certain unemployed individuals, for a qualified first-time home purchase or for higher | |||
education expenses. | |||
Lifetime Required Minimum Distributions (IRAs only). To avoid certain tax penalties, you and any designated | |||
Beneficiary must also meet the minimum distribution requirements imposed by the Code. These rules may dictate the following: | |||
· | The start date for distributions; | ||
· | The time period in which all amounts in your account(s) must be distributed; and | ||
· | Distribution amounts. | ||
Start Date and Time Period. Generally, you must begin receiving distributions by April 1 of the calendar year | |||
following the calendar year in which you attain age 70½ or retire, whichever occurs later. We must pay out distributions from your | |||
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 Section | |||
401(a)(9) of the Code. The entire interest in the account includes the amount of any outstanding rollover, transfer, recharacterization, | |||
if applicable, and the actuarial present value of other benefits provided under the account, such as guaranteed death benefits. | |||
50% Excise Tax. If you fail to receive the minimum required distribution for any tax year, a 50% excise tax may be | |||
imposed on the required amount that was not distributed. | |||
Lifetime required minimum distributions are not applicable to Roth IRAs during your lifetime. Further information regarding required | |||
minimum distributions may be found in your Contract. | |||
Required Distributions upon Death (IRAs and Roth IRAs Only). Different distribution requirements apply to qualified | |||
contacts after your death, depending upon if you have been receiving required minimum distributions. Further information regarding | |||
required distributions upon death may be found in your Contract. | |||
If your death occurs on or after you begin receiving minimum distributions under the Contract, distributions generally must be made at | |||
least as rapidly as under the method in effect at the time of your death. Section 401(a)(9) of the Code provides specific rules for | |||
calculating the required minimum distributions after your death. | |||
If your death occurs before you begin receiving minimum distributions under your Contract, your entire balance must be distributed | |||
by December 31 of the calendar year containing the fifth anniversary of the date of your death. For example, if you die on September | |||
1, 2013, your entire balance must be distributed to the designated Beneficiary by December 31, 2018. However, if distributions begin | |||
33 |
by December 31 of the calendar year following the calendar year of your death, and you have named a designated Beneficiary, then | |||
payments may be made over either 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. | ||
Start Dates for Spousal Beneficiaries. If the designated Beneficiary is your spouse, distributions must begin on or | |||
before the later of the following: | |||
· | December 31 of the calendar year following the calendar year of your death; or | ||
· | December 31 of the calendar year in which you would have attained age 70½. | ||
No Designated Beneficiary. If there is no designated Beneficiary, the entire interest generally must be distributed by | |||
the end of the calendar containing the fifth anniversary of the your death. | |||
Special Rule for IRA Spousal Beneficiaries (IRAs and Roth IRAs Only). In lieu of taking a distribution under these | |||
rules, if the sole designated Beneficiary is the Contract Owner’s surviving spouse, the spousal Beneficiary may elect to treat the | |||
Contract as his or her own IRA and defer taking a distribution until his or her own start date. The surviving spouse will be deemed to | |||
have made such an election if the surviving spouse makes a rollover to or from the Contract or fails to take a distribution within the | |||
required time period. | |||
Withholding | |||
Any taxable distributions under the Contract are generally subject to withholding. U.S. federal income tax liability rates vary | |||
according to the type of distribution and the recipient’s tax position. | |||
IRAs and Roth IRAs. Generally, you or, if applicable, a designated Beneficiary may elect not to have tax withheld from | |||
distributions. | |||
Non-Resident Aliens. If you or your designated Beneficiary is a non-resident alien, then any withholding is governed by | |||
Section 1441 of the Code based on your or your designated Beneficiary’s citizenship, country of domicile and treaty status, and we | |||
may require additional documentation prior to processing any requested information. | |||
Assignment and Other Transfers | |||
IRAs and Roth IRAs. The Code does not allow a transfer or assignment of your rights under the IRA Contracts or Roth | |||
IRA Contracts except in limited circumstances. Adverse tax consequences may result if you assign or transfer your interest in the | |||
such a Contract to persons other than your spouse incident to a divorce. You should consult your tax adviser regarding the potential | |||
tax effects of such a transaction if you are contemplating such an assignment or transfer. | |||
Same-Sex Marriages | |||
Before June 26, 2013, pursuant to Section 3 of the federal Defense of Marriage Act (“DOMA”), same-sex marriages were not | |||
recognized for purposes of federal law. On that date the U.S. Supreme Court held in United States v. Windsor that Section 3 of | |||
DOMA is unconstitutional. While valid same-sex marriages are now recognized under federal law and the favorable income-deferral | |||
options afforded by federal tax law to an opposite-sex spouse under Tax Code sections 72(s) and 401(a)(9) are now available to a | |||
same-sex spouse, there are still unanswered questions regarding the scope and impact of the Windsor decision. Consequently, if you | |||
are married to a same-sex spouse you should contact a qualified tax adviser regarding your spouse’s rights and benefits under the | |||
contract described in this prospectus and your particular tax situation. | |||
Possible Changes in Taxation | |||
Although the likelihood of changes in tax legislation, regulation, rulings and other interpretations thereof is uncertain, there is always | |||
the possibility that the tax treatment of the Contract could change by such means. It is also possible that any such change could be | |||
retroactive (i.e., effective before the date of the change). You should consult a tax adviser with respect to legislative and regulatory | |||
developments and their potential effects on the Contract. | |||
Taxation of Company | |||
We are taxed as a life insurance company under the Code. | |||
34 |
PART II | |
INFORMATION NOT REQUIRED IN PROSPECTUS | |
Item 14. Other Expenses of Issuance and Distribution | |
Not Applicable. | |
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(3); (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 insurance policies issued by an international insurer. 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”). | |
Item 16. Exhibits | |
Exhibits: | |
(1)(i) | Distribution Agreement between ING Life Insurance and Annuity Company on behalf of Variable |
Annuity Account B and Directed Services, LLC, dated December 2, 2009 · Incorporated herein by | |
reference to Pre-Effective Amendment Registration Statement on Form S-1 for ING Life Insurance | |
and Annuity Company as filed with the Securities and Exchange Commission on December 31, | |
2009 (File No. 333-162140). | |
(1)(ii) | Intercompany Agreement dated December 22, 2010 (effective January 1, 2010) between Directed |
Services LLC and ING Life Insurance and Annuity Company · Incorporated by reference to Post- | |
Effective Amendment No. 1 to Registration Statement on Form N-4 (File No. 333-167680), as filed | |
on February 11, 2011. | |
(4)(i) | Single Premium Deferred Modified Guaranteed Annuity Contract (IU-IA-3096) · Incorporated |
herein by reference to Initial Registration Statement on Form S-1 for ING Life Insurance and | |
Annuity Company as filed with the Securities and Exchange Commission on September 25, 2009 | |
(File No. 333-162140). | |
(4)(ii) | IRA Endorsement (IU-RA-4021) · Incorporated herein by reference to Pre-Effective Amendment |
Registration Statement on Form S-1 for ING Life Insurance and Annuity Company as filed with the | |
Securities and Exchange Commission on December 31, 2009 (File No. 333-162140). |
(4)(iii) | Roth IRA Endorsement (IU-RA-4022) · Incorporated herein by reference to Pre-Effective | ||
Amendment Registration Statement on Form S-1 for ING Life Insurance and Annuity Company as | |||
filed with the Securities and Exchange Commission on December 31, 2009 (File No. 333-162140). | |||
(4)(iv) | Single Premium Deferred Modified Guaranteed Annuity Application (153740)(12/14/2009) · | ||
Incorporated herein by reference to Pre-Effective Amendment Registration Statement on Form S-1 | |||
for ING Life Insurance and Annuity Company as filed with the Securities and Exchange | |||
Commission on December 31, 2009 (File No. 333-162140). | |||
(4)(v) | Single Premium Deferred Modified Guaranteed Annuity Application (153740) (02/01/2010) · | ||
Incorporated herein by reference to Post-Effective Amendment No. 1 to Registration Statement on | |||
Form S-1 for ING Life Insurance and Annuity Company as filed with the Securities and Exchange | |||
Commission on April 7, 2010 (File No. 333-164981). | |||
(5) | Opinion as to Legality, attached. | ||
(23)(i) | Consent of Independent Registered Public Accounting Firm, attached. | ||
(23)(ii) | Consent of Legal Counsel (included in Exhibit (5) above). | ||
(24)(i) | Powers of Attorney, attached. | ||
(24)(ii) | Certificate of Resolution Authorizing Signature by Power of Attorney · Incorporated by reference to | ||
Post-Effective Amendment No. 5 to Registration Statement on Form N-4 (File No. 033-75986), as | |||
filed on April 12, 1996. | |||
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 offerings: | ||
(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. | |||
(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 that | |||
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. | ||
(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. |
SIGNATURES | ||
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 21st day of November, 2014. | ||
By: | ING LIFE INSURANCE AND ANNUITY COMPANY | |
(REGISTRANT) | ||
By: | /s/Alain M. Karaoglan | |
Alain M. Karaoglan | ||
President (principal executive officer) | ||
By: | /s/ J. Neil McMurdie | |
J. Neil McMurdie as | ||
Attorney-in-Fact | ||
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the | ||
following persons in the capacities indicated and on November 21, 2014. | ||
Signature | Title | |
/s/Alain M. Karaoglan | Director and President | |
Alain M. Karaoglan | (principal executive officer) | |
/s/Mark B. Kaye | Senior Vice President and Chief Financial Officer | |
Mark B. Kaye | (principal financial officer) | |
/s/Steven T. Pierson | Senior Vice President and Chief Accounting Officer | |
Steven T. Pierson | (principal accounting officer) | |
/s/Rodney O. Martin, Jr. | Director | |
Rodney O. Martin, Jr. | ||
/s/Chetlur S. Ragavan | Director | |
Chetlur S. Ragavan | ||
/s/Michael S. Smith | Director | |
Michael S. Smith | ||
Director | ||
Ewout L. Steenbergen* | ||
By: | /s/ J. Neil McMurdie | |
J. Neil McMurdie as | ||
Attorney-in-Fact | ||
*Executed by J. Neil McMurdie on behalf of those indicated pursuant to Powers of Attorney |
EXHIBIT INDEX | ||
Exhibit | ||
16(5) | Opinion as to Legality | EX-5 |
16(23)(i) | Consent of Independent Registered Public Accounting Firm | EX-23.I |
16(23)(ii) | Consent of Legal Counsel* | * |
16(24)(i) | Powers of Attorney | EX-24 |
*Included in Exhibit (5) above. |
This ‘POS AM’ Filing | Date | Other Filings | ||
---|---|---|---|---|
12/31/18 | ||||
8/31/18 | ||||
12/15/14 | ||||
Filed on: | 11/21/14 | S-3 | ||
11/18/14 | ||||
9/30/14 | 10-Q, POS AM, S-3 | |||
8/31/14 | ||||
4/7/14 | ||||
12/31/13 | 10-K | |||
9/1/13 | ||||
6/26/13 | ||||
12/31/12 | 10-K | |||
2/11/11 | 424B3 | |||
1/3/11 | 424B3 | |||
12/31/10 | 10-K | |||
12/22/10 | 8-K | |||
9/27/10 | ||||
4/7/10 | POS AM | |||
1/1/10 | ||||
12/31/09 | 10-K, 10-K/A, NT 10-K, S-1/A | |||
12/2/09 | ||||
9/25/09 | S-1 | |||
2/15/09 | ||||
2/12/09 | ||||
1/31/09 | ||||
1/16/09 | ||||
1/1/05 | ||||
1/1/02 | ||||
1/1/97 | ||||
4/12/96 | ||||
List all Filings |