ENDORSEMENT SECTION 1. GENERAL INFORMATION 1.1 WHAT IS OUR Our agreement with you includes this AGREEMENT WITH YOU? endorsement as a part of the contract to which it is attached. The provisions of the contract apply to this endorsement unless they...
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Exhibit 4(b)(ii)
FIXED ACCOUNT ENDORSEMENT
ENDORSEMENT
SECTION 1. GENERAL INFORMATION
1.1 WHAT IS OUR Our agreement with you includes this
AGREEMENT WITH YOU? endorsement as a part of the contract to
which it is attached. The provisions of the
contract apply to this endorsement unless
they conflict with the endorsement. If there
is a conflict, the endorsement provision
will apply. The issue date for this
endorsement is the same issue date as the
contract to which it is attached.
We promise to provide the investment option
described in this endorsement as long as the
contract and this endorsement are in force
and all the terms and conditions of this
endorsement are met.
1.2 WHAT IS THE BENEFIT This endorsement provides a choice of
PROVIDED BY THIS investment options under the fixed account.
ENDORSEMENT? These investment options are in addition to
the investment options available under the
variable account provided by the contract to
which this endorsement is attached.
ENDORSEMENT
SECTION 2. DEFINITIONS
2.1 WHAT ARE THE MOST FIXED ACCOUNT - an account under the
COMMONLY USED contract funded by our general account
TERMS AND WHAT DO providing a choice of fixed periods. It is
THEY MEAN? not part of nor dependent upon the
investment performance of the variable
account.
FIXED AMOUNT - any portion of fixed contract
value allocated to a particular fixed period
with a particular expiration date (including
interest thereon).
FIXED CONTRACT VALUE - the value of the
contract in the fixed account.
FIXED PERIOD - an investment option under
the fixed account with a specific number of
years for which we agree to credit a
particular effective annual interest rate.
ENDORSEMENT
SECTION 3. PURCHASE PAYMENTS
3.1 CAN NET PURCHASE This endorsement allows you to allocate net
PAYMENTS BE purchase payments to any available fixed
ALLOCATED TO THE period of the fixed account. Net purchase
FIXED ACCOUNT? payments allocated to a fixed period of the
fixed account become part of the fixed
contract value and earn interest at the
rate(s) declared for the fixed period(s)
selected.
The minimum net purchase payment allocated
to a fixed period is $1,000. If you request
an allocation of less than $1,000 to a fixed
period, that portion of the net purchase
payment intended for the fixed period will
automatically be allocated to the money
market subaccount of the variable account
(described in Section 6 of your contract).
2006-VAFIXED
ENDORSEMENT
SECTION 4. FIXED ACCOUNT
4.1 WHAT IS THE FIXED The fixed account is an option that is
ACCOUNT? supported by assets in our general account.
The fixed account does not depend on the
investment performance of the variable
account. Subject to applicable law, we have
sole discretion over the investment of
assets supporting the fixed account.
4.2 WHAT ARE THE FIXED The fixed periods as of the contract issue
PERIODS? date are shown on the data page. A fixed
period will begin on the date the net
purchase payment or transfer amount is
applied and will end when the number of
years in the fixed period selected has
elapsed. The last day of a fixed period is
the expiration date. As a result of any
additional purchase payments or transfer of
any portion of your fixed contract value,
fixed amounts allocated to fixed periods of
the same duration may have different
expiration dates.
4.3 WHAT HAPPENS WHEN DCA FIXED PERIOD. A minimum amount is
A FIXED PERIOD ENDS? required to be transferred monthly from a
DCA fixed period to deplete the fixed amount
by the expiration date. The minimum transfer
amount is the monthly sum required to fully
amortize the fixed amount as of the
expiration date.
ALL OTHER FIXED PERIODS. We will notify you
of the expiration date for the fixed amount.
You may exercise one of the following
options by written request at any time
during the 30-day time period prior to the
expiration date:
a.) You may transfer the fixed amount
to any available fixed period at
the current guaranteed interest
rate for that period. You may only
choose fixed periods other than a
DCA fixed period. The fixed period
selected cannot extend past the
payout date.
b.) You may transfer the fixed amount
to any available subaccount.
c.) If there is less than 1 year to
the payout date, you may continue
to accumulate interest on the
fixed amount at the current
guaranteed interest rate available
for the 1 year fixed period. If
the 1 year fixed period is not
available, interest will
accumulate at the rate that we
declare for that purpose. The
declared rate is guaranteed not to
be less that the fixed account
minimum guaranteed rate described
in Endorsement Section 6.3.
d.) If we are not notified during the
30-day time period prior to the
expiration date, a new fixed
period will begin automatically on
the day following the expiration
date. The new fixed period will be
the same duration as the previous
fixed period. If a new fixed
period of the same duration is not
available, it will automatically
be the next closest duration that
is available.
ENDORSEMENT
SECTION 5. TRANSFER PRIVILEGE
5.1 CAN YOU TRANSFER Your variable contract value may be
VALUES TO AND FROM transferred to any available fixed period
FIXED PERIODS? other than a DCA fixed period at any time.
Transfers from any fixed period other than a
DCA fixed period will be allowed only during
the 30-day period prior to the expiration
date of that fixed period.
Transfers to or from a fixed period are
subject to all of the following:
a.) the transfer request must be by
written request;
b.) the transfer request must be
received in our home office prior
to the payout date;
c.) the transfer is to any fixed
period other than the DCA fixed
period;
d.) the amount transferred to a fixed
period must be at least $1,000, or
it will be transferred
automatically to the money market
subaccount of the variable account
(described in Section 6 of your
contract);
e.) the fixed period selected to
transfer to cannot extend beyond
the payout date;
f.) the deduction of any transfer fees
that we may impose.
Monthly transfers from a DCA fixed
period are required to deplete the
fixed amount by the expiration date.
Transfers from a DCA fixed period are
also subject to the following:
a.) monthly transfers will be made
automatically to the subaccount(s)
you have designated;
b.) if no subaccounts have been
designated, the minimum transfer
amount will be automatically
transferred to the Money Market
subaccount;
c.) the minimum transfer amount is the
monthly sum required to fully
amortize the fixed amount as of
the expiration date;
d.) the initial monthly transfer must
occur within one month of the
purchase payment allocation to the
DCA fixed period and will occur on
the transfer day you have
designated;
e.) if an initial transfer day is not
designated, the initial transfer
will be made one (1) month after
allocation of the purchase payment
to the DCA fixed period;
f.) subsequent monthly transfers will
occur automatically on the same
monthly day as the initial monthly
transfer day and will continue
until the fixed amount is
depleted;
g.) if a transfer day falls on a
weekend or holiday, the transfer
will be made on the following
valuation day; and
h.) transfers from a DCA fixed period
are not subject to any transfer
fees that we may impose.
ENDORSEMENT
SECTION 6. FIXED CONTRACT VALUE
6.1 HOW IS YOUR FIXED Your fixed contract value at any time is the
CONTRACT VALUE sum of all fixed amounts. Each fixed amount
DETERMINED? is equal to:
a.) the amount initially allocated or
transferred to a fixed period with
a specified expiration date; plus
the interest subsequently earned;
b.) less any prior partial withdrawal
or amount borrowed (if loans are
allowed under the contract to
which this endorsement is
attached);
c.) less the pro-rata portion of the
annual contract fee described in
the contract to which this
endorsement is attached;
d.) less the pro-rata portion of any
applicable fees or charges
provided for by rider or
endorsement; and
e.) less any amounts transferred to
any subaccount or fixed period.
6.2 WHAT INTEREST WILL BE The fixed period selected will determine the
CREDITED TO A FIXED current guaranteed interest rate for that
AMOUNT? fixed amount. The current guaranteed
interest rate for each of the available
fixed periods as of the contract issue date
is shown on the data page. We will
periodically establish an applicable
guaranteed interest rate for each fixed
period we make available. Once an interest
rate is declared for a fixed amount, it is
guaranteed for the duration of the fixed
period. The guaranteed effective annual
interest rate that is declared for each of
the available fixed periods will meet or
exceed the fixed account minimum guaranteed
interest rate in effect at the time the
interest rate is declared.
6.3 WHAT IS THE FIXED The fixed account minimum guaranteed
ACCOUNT MINIMUM interest rate is shown on the data page.
GUARANTEED INTEREST
RATE?
ENDORSEMENT
SECTION 7. MARKET VALUE ADJUSTMENT
7.1 WHEN WILL A MARKET A market value adjustment will be imposed on
VALUE ADJUSTMENT BE any fixed amounts attributable to a fixed
IMPOSED? period of 3 years or greater that are
withdrawn at any time other than the 30-day
period prior to the expiration date of the
fixed period, including:
a.) partial withdrawals;
b.) full surrender;
c.) amounts borrowed (if loans are
allowed under the contract to
which this endorsement is
attached); and
d.) fixed amounts applied to the
income payout options titled
"Interest Option (Fixed Income
Payment)" or "Installment Option
(Variable Income Payment)", in
Section 14.2 of your contract, if
available in your state.
Each fixed amount will be treated
separately for purposes of determining
any market value adjustment.
A market value adjustment will not be
applied at any time to a fixed amount
allocated to a DCA fixed period or any fixed
period less than 3 years. No market value
adjustment will be imposed on any fixed
amount withdrawn in the following
situations:
a.) calculation of the death benefit
upon death of the annuitant;
b.) amounts withdrawn to pay fees or
charges related to your contract;
or
c.) amounts withdrawn during the
30-day period prior to the
expiration date of the fixed
period.
7.2 HOW IS A MARKET The amount of the market value adjustment
VALUE ADJUSTMENT will be calculated by multiplying the amount
CALCULATED? being withdrawn from the fixed amount
(before deduction of any applicable
surrender charge) by the following factor:
0.70 x (I - J) x N/12
where:
I = the guaranteed interest rate being
offered for new fixed periods equal in
duration to the period related to the
fixed amount being withdrawn. If the
applicable fixed period is no longer
offered, "I" will be the rate determined
by linear interpolation of the
guaranteed interest rates for the fixed
periods that are available. If the fixed
periods needed to perform the linear
interpolation are not available, "I"
will be the rate payable on the Treasury
Constant Maturity Series published by
the Federal Reserve for a security with
time to maturity equal to the applicable
fixed period. Linear interpolation will
be used if this period of time to
maturity is not quoted. The interest
rate being credited to a DCA fixed
period will not be used as a factor in
any market value adjustment calculation.
J = the interest rate being credited to the
fixed amount being withdrawn.
N = the number of complete months remaining
to the end of the fixed period.
7.3 IS THERE A LIMIT TO THE In no event will:
MARKET VALUE ADJUSTMENT?
a.) the market value adjustment exceed
an amount equal to the total
interest earned (for all fixed
amounts) that is in excess of the
effective annual rate(s) based on
the fixed account minimum
guaranteed interest rate in effect
for each fixed amount as described
in Endorsement Section 6;.
b.) the sum of any surrender charges
and market value adjustment for a
fixed amount be greater than 10%
of the amount withdrawn; or
c.) the market value adjustment reduce
the amounts withdrawn or
transferred below the amount
required under the nonforfeiture
laws of the state with
jurisdiction over the contract.
The total amount withdrawn or
surrendered could be less than the
total purchase payment(s) because of
the cumulative effect of the market
value adjustment and surrender charge.
ENDORSEMENT
SECTION 8. WITHDRAWALS
8.1 HOW WILL A MARKET In general, the market value adjustment will
VALUE ADJUSTMENT have the effect of reducing the amount
AFFECT PARTIAL available for withdrawal when interest rates
WITHDRAWALS AND THE rise (where "I" is greater than "J", in the
SURRENDER VALUE OF formula for the market value adjustment).
THE CONTRACT? Alternatively, the market value adjustment
will have the effect of increasing the
amount for withdrawal when interest rates
fall (where "J" is greater than "I" in the
formula for the market value adjustment).
The exact amount of the market value
adjustment is determined using the formula
shown in Endorsement Section 7.2.
Any applicable market value adjustment will
affect the amount available for withdrawal
from a fixed amount. We will pay you the
amount you request in connection with a
partial withdrawal from the fixed account by
reducing the appropriate fixed amount(s).
If, at the time a partial withdrawal is
requested from a fixed amount, the fixed
amount would be insufficient to permit the
deduction of a market value adjustment, then
we will not permit the partial withdrawal.
Any applicable market value adjustment is
subtracted upon full surrender of the
contract, as described in the contract to
which this endorsement is attached. Your
surrender value will not be less than the
amount required by state law.
8.2 DOES A SURRENDER The surrender charge provision described in
CHARGE APPLY TO FIXED the contract to which this endorsement is
AMOUNTS WITHDRAWN? attached includes fixed amounts withdrawn
from your contract. See Section 9 of your
contract.
ENDORSEMENT
SECTION 9. RESTRICTIONS
9.1 ARE THERE ANY We reserve the right to restrict purchase
RESTRICTIONS ON payments and transfers to the fixed account
PURCHASE PAYMENTS if:
AND TRANSFERS TO THE
FIXED ACCOUNT?
a.) the guaranteed effective annual
interest rate for the fixed
period(s) selected is equal to the
Fixed Account Minimum Guaranteed
Interest Rate described in
Endorsement Section 6; and
b.) the yield on investment does not
support the statutory minimum
interest rate for the fixed
period(s) selected; or
c.) your fixed account value exceeds
our published maximum fixed
account value as described in the
current prospectus or other
disclosure statement.
This restriction, if imposed, will be
exercised in a non-discriminatory
manner. We will give you at least 30
days advance written notice before
exercising our right to restrict
purchase payments and transfers to the
fixed account and will notify you when
we lift this restriction (in whole or
in part).
9.2 ARE THERE ANY Generally, the amount of any partial
RESTRICTIONS ON withdrawal or full surrender will be paid to
PAYMENT OF PROCEEDS FROM you within seven (7) days after we receive
THE FIXED ACCOUNT? your written request. Death benefit proceeds
are payable upon receipt of due proof of
death in our home office.
Subject to obtaining prior written approval
by the commissioner if required by state
law, we reserve the right to postpone
payment of any partial withdrawal or full
surrender from any fixed account investment
option for up to six (6) months from the
date we receive your written request or for
up to two (2) months from the date we
receive due proof of death. In the event
payment is postponed, we will pay interest
on the proceeds if required by state law.
Interest will be calculated at the effective
annual rate and for the time period required
under state law.
CUNA Mutual Insurance Society
A Mutual Insurance Company
/s/ Xxxx Xxxx
President
