Exhibit 99-B.8.1
FUND PARTICIPATION AGREEMENT
Aetna Insurance Company of America (the "Company"), and Aetna Variable
Fund, Aetna Variable Encore Fund, Aetna Income Shares, Aetna Balanced VP, Inc.,
Aetna GET Fund, on behalf of each of its series, Aetna Generation Portfolios,
Inc., on behalf of each of its series, and Aetna Variable Portfolios, Inc., on
behalf of each of its series ("Funds"), and Aeltus Investment Management, Inc.
("Aeltus" or "Adviser") hereby agree to an arrangement whereby the Funds shall
be made available to serve as underlying investment media for Variable Annuity
Contracts ("Contracts") to be issued by the Company.
1. Establishment of Account.
The Company represents that it has established Variable Annuity Account I
and may establish such other accounts as may be set forth in Schedule A
attached hereto (as may be amended from time to time with the mutual
consent of the parties hereto) (the "Accounts"), each of which is a
separate account registered under the Investment Company Act of 1940
(except for such accounts for which no registration is required), to serve
as an investment vehicle for the Contracts. Each Contract provides for the
allocation of net amounts received by the Company to an Account for
investment in the shares of one of more specified open-end management
investment companies available through that Account as underlying
investment media. Selection of a particular investment management company
and changes therein from time to time are made by the participant or
Contract owner, as applicable under a particular Contract.
2. Pricing Information; Orders; Settlement.
(a) Each Fund will make shares available to be purchased by the Company,
and will accept redemption orders from the Company, on behalf of
each Account at the net asset value applicable to each order on
those days on which the Fund calculates its net asset value (a
"Business Day"). Fund shares shall be purchased and redeemed in such
quantity and at such times as determined by the Company to be
necessary to meet the requirements of those Contracts for which the
Fund serves as underlying investment media, provided, however, that
the Board of Directors of the Fund (hereinafter the "Directors")
may, upon reasonable notice to the Company, refuse to sell shares of
any Fund to any person, or suspend or terminate the offering of
shares of any Fund if such action is required by law or by
regulatory authorities having jurisdiction or is, in the sole
discretion of the Directors acting in good faith and in light of
their fiduciary duties under federal and/or any applicable state
laws, necessary in the best interests of the shareholders of such
Fund.
(b) Each Fund will provide to the Company closing net asset value,
dividend and capital gain information at the close of trading each
day that the New York Stock Exchange (the "Exchange") is open (each
such day a "Business Day"), and in no event later than 6:30 p.m.
eastern time on such Business Day. The Company will send via
facsimile or electronic transmission to each Fund or its specified
agent orders to purchase and/or redeem Fund shares by 9:30 a.m.
eastern time the following business day. Payment for net purchases
will be wired by the Company to an account designated by the Fund.
(c) Each Fund hereby appoints the Company as its agent for the limited
purpose of accepting purchase and redemption orders for Fund shares
relating to the Contracts from Contract owners or participants.
Orders from Contract owners or participants received from any
distributor of the Contracts (including affiliates of the Company)
by the Company, acting as agent for the Fund, prior to the close of
the Exchange on any given business day will be executed by the Fund
at the net asset value determined as of the close of the Exchange on
such Business Day, provided that the Fund receives written (or
facsimile) notice of such order by 9:30 a.m. eastern time on the
next following Business Day. Any orders received by the Company
acting as agent on such day but after the close of the Exchange will
be executed by the Fund at the net asset value determined as of the
close of the Exchange on the next business day following the day of
receipt of such order, provided that the Fund receives written (or
facsimile) notice of such order by 9:30 a.m. eastern time within two
days following the day of receipt of such order.
(d) Payments for net redemptions of shares of a Fund will be wired by
the Fund to an account designated by the Company. Payments for net
purchases of the Fund will be wired by the Company to an account
designated by the Fund on the same Business Day the Company places
an order to purchase Fund shares. Payments shall be in federal funds
transmitted by wire.
(e) Each party has the right to rely on information or confirmations
provided by the other party (or by any affiliate of the other
party), and shall not be liable in the event that an error is a
result of any misinformation supplied by the other party. The
Company shall assume responsibility as herein described for any loss
to a Fund caused by a cancellation or correction made to an
Instruction by a Plan Representative or Participant subsequent to
the date as of which such Instruction has been received by the
Company and originally relayed to Aeltus, and the Company will
immediately pay such loss to such Fund upon the Company's receipt of
written notification, with supporting data. Aeltus shall indemnify
and hold the Company harmless, from the effective date of this
Agreement, against any amount the Company is required to pay to
Plans, Plan Representatives, or Participants due to: (i) an
incorrect calculation of a Fund's daily net asset value, dividend
rate, or capital gains distribution rate or (ii) incorrect or
unreasonably late reporting of the daily net asset value deemed
material in accordance with the Fund's error correction policy,
dividend rate, or capital gain
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distribution rate, upon written notification by the Company, with
supporting data, to Aeltus.
(f) The Company agrees to purchase and redeem the shares of the Funds
named in this Agreement or in Schedule B hereof in accordance with
the provisions of each Fund's then-current prospectus and statement
of additional information. The Company shall not permit any person
other than a Contract owner or Participant to give instructions to
the Company which would require the Company to redeem or exchange
shares of a Fund. This provision shall not be construed to prohibit
the Company from substituting shares of another fund, as permitted
by law.
3. Expenses.
(a) Except as otherwise provided in this Agreement, all expenses
incident to the performance by each respective Fund under this
Agreement shall be paid by that Fund, including the cost of
registration of its shares with the Securities and Exchange
Commission (the "SEC") and in states where required. All expenses
incident to performance by each party of its respective duties under
this Agreement shall be paid by that party, unless otherwise
specified in this Agreement.
(b) The Funds or the Adviser shall provide to the Company periodic fund
reports to shareholders and other materials that are required by law
to be sent to Contract owners. In addition, the Funds or the Adviser
shall provide the Company with a sufficient quantity of
prospectuses, statements of additional information and any
supplements to any of these materials, to be used in connection with
the offerings and transactions contemplated by this Agreement. In
addition, the Funds shall provide the Company with a sufficient
quantity of proxy material that is required to be sent to Contract
owners. The Adviser shall be permitted to review and approve the
typeset form of such material prior to such printing provided such
material has been provided by the Adviser to the Company within a
reasonable period of time prior to typesetting.
(c) In lieu of the Funds' or Adviser's providing printed copies of
prospectuses, statements of additional information and any
supplements to any of these materials, and periodic fund reports to
shareholders, the Company shall have the right to request that the
Funds transmit a copy of such materials in an electronic format
(Post Script files), which the Company may use to have such
materials printed together with similar materials of other Account
funding media that the Company or any distributor will distribute to
existing or prospective Contract owners or participants.
4. Representations.
The Company agrees that it and its agents shall not, without the written
consent of a Fund or the Adviser, make representations concerning the
Fund, or its shares except those contained in the then current
prospectuses and in current printed sales literature approved by or deemed
approved by the Fund or the Adviser.
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5. Termination.
This agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of either the Company, the Adviser or with respect to
any Fund, upon sixty days advance written notice to the other
parties;
(b) at the option of the Company, upon one week advance written notice
to the Adviser and to any Fund, if Fund shares are not available for
any reason to meet the requirement of Contracts as determined by the
Company. Reasonable advance notice of election to terminate shall be
furnished by Company;
(c) at the option of either the Company, the Adviser or any Fund,
immediately upon institution of formal proceedings against the
broker-dealer or broker-dealers marketing the Contracts, the
Account, the Company, the Fund or the Adviser by the National
Association of Securities Dealers, Inc. (the "NASD"), the SEC or any
other regulatory body;
(d) upon the determination of the Accounts to substitute for the shares
of a Fund the shares of another investment company in accordance
with the terms of the applicable Contracts. The Company will give
sixty days written notice to the Fund and the Adviser of any
decision to replace the shares of that Fund;
(e) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
(f) if shares of a Fund are not registered, issued or sold in
conformance with Federal law or such law precludes the use of such
shares as an underlying investment medium for Contracts issued or to
be issued by the Company. Prompt notice shall be given by the
appropriate party should such situation occur.
6. Continuation of Agreement.
Termination as the result of any cause listed in Section 5 shall not
affect the Funds' obligation to furnish shares to Contracts then in force
for which such shares serve or may serve as the underlying medium unless
such further sale of Fund shares is prohibited by law or the SEC or other
regulatory body.
7. Advertising Materials; Filed Documents.
(a) Advertising and sales literature with respect to any Fund prepared
by the Company or its agents for use in marketing its Contracts will
be submitted to that Fund or its designee for review before such
material is submitted to any regulatory body for review. No such
material shall be used if the Fund or its designee reasonably
objects
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to such use in writing, transmitted by facsimile within two business
days after receipt of such material.
(b) Each Fund will provide additional copies of its financials as soon
as available to the Company and at least one complete copy of all
registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements and
all amendments or supplements to any of the above that relate to the
Fund promptly after the filing of such document with the SEC or
other regulatory authorities. At the Adviser's request, the Company
will provide to the Adviser at least one complete copy of all
registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements, and
all amendments or supplements to any of the above that relate to the
Accounts promptly after the filing of such document with the SEC or
other regulatory authority.
(c) Each Fund or the Adviser will provide via Excel spreadsheet diskette
format or in electronic transmission to the Company at least
quarterly portfolio information necessary to update Fund profiles
within seven business days following the end of each quarter.
8. Proxy Voting.
(a) The Company shall provide pass-through voting privileges on shares
of a Fund held by the separate accounts to all Contract owners.
(b) The Company will distribute to Contract owners all proxy material
furnished by any Fund and will vote shares of the Fund in accordance
with instructions received from such Contract owners. The Company
and its agents shall not oppose or interfere with the solicitation
of proxies for shares of a Fund held for such Contract owners and
participants.
9. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Fund and the
Adviser, and their directors, officers, employees, agents and each
person, if any, who controls any Fund or its Adviser within the
meaning of the Securities Act of 1933 (the "1933 Act") against any
losses, claims, damages or liabilities to which the Fund or any such
director, officer, employee, agent, or controlling person may become
subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement, prospectus or sales literature of the Company or arise
out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or arise
out of or as a result of conduct, statements or representations
(other than statements or representations contained in the
prospectuses or sales literature of the Fund) of the
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Company or its agents, with respect to the sale and distribution of
Contracts for which shares of the Fund are the underlying
investment. The Company will reimburse any legal or other expenses
reasonably incurred by a Fund or any such director, officer,
employee, agent, investment adviser, or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company
will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon (i)
an untrue statement or omission or alleged omission made in such
Registration Statement or prospectus in conformity with written
materials furnished to the Company by the Fund specifically for use
therein or (ii) the willful misfeasance, bad faith, or gross
negligence by the Fund or Adviser in the performance of their duties
or the Fund's or Adviser's reckless disregard of obligations or
duties under this Agreement or to the Company, whichever is
applicable. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Fund and the Adviser agree to indemnify and hold harmless the
Company and its directors, officers, employees, agents and each
person, if any, who controls the Company within the meaning of the
1933 Act against any losses, claims, damages or liabilities to which
the Company or any such director, officer, employee, agent or
controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, prospectuses or sales
literature of the Fund or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or material fact required to be stated
therein or necessary to make the statements therein not misleading.
Each Fund, as appropriate, will reimburse any legal or other
expenses reasonably incurred by the Company or any such director,
officer, employee, agent, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability
or action; provided, however, that the Fund will not be liable in
any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or
omission or alleged omission made in such Registration Statement or
prospectuses which are in conformity with written materials
furnished to the Fund by the Company specifically for use therein.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying
party hereunder, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 9. In case any
such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to
the extent that it may wish to, assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its
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election to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section 9 for any
legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable
costs of investigation.
10. Miscellaneous.
(a) Amendment and Waiver. Neither this Agreement, nor any provision
hereof, may be amended, waived, discharged or terminated orally, but
only by an instrument in writing signed by all parties hereto.
(b) Notices. All notices and other communications hereunder shall be
given or made in writing and shall be delivered personally, or sent
by telex, facsimile or registered or certified mail, postage
prepaid, return receipt requested, or recognized overnight courier
service to the party or parties to whom they are directed at the
following addresses, or at such other addresses as may be designated
by notice from such party to all other parties.
To the Company: To the Adviser:
Aetna Insurance Company of America Aeltus Investment Management, Inc.
000 Xxxxxxxxxx Xxxxxx 000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000 Hartford, Connecticut 06103-1205
Attn: Xxxxx X. Xxxxxxx Attn: Xxxxxx X. Xxxxxx
To any Fund:
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: J. Xxxxx Xxx
Any notice, demand or other communication given in a manner prescribed in
this subsection (b) shall be deemed to have been delivered on receipt.
(c) Successors and Assigns. This agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
permitted successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any party hereto may execute this Agreement by
signing any such counterpart.
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(e) Severability. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby.
(f) Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the parties hereto and supersedes all
prior agreement and understandings relating to the subject matter
hereof.
(g) Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Connecticut.
(h) It is understood by the parties that this Agreement is not an
exclusive arrangement in any respect.
(i) The terms of this Agreement and the Schedules thereto will be held
confidential by each party except to the extent that either party or
its counsel may deem it necessary to disclose such terms.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers effective as of the 1st day of May, 1998.
AETNA INSURANCE COMPANY OF AMERICA
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
--------------------------------
Title: Senior Vice President
-------------------------------
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AETNA VARIABLE FUND
AETNA VARIABLE ENCORE FUND
AETNA INCOME SHARES
AETNA BALANCED VP, INC.
AETNA GET FUND
AETNA GENERATION PORTFOLIOS, INC.
AETNA VARIABLE PORTFOLIOS, INC.
By: /s/Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: Managing Director
------------------------------
AELTUS INVESTMENT MANAGEMENT, INC.
By: /s/J. Xxxxx Xxx
--------------------------------
Name: J. Xxxxx Xxx
------------------------------
Title: Managing Director, Chief Operating Officer
------------------------------------------
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Schedule A
(For any future separate accounts - See Section 1)
Schedule B
Aetna Variable Fund
Aetna Variable Encore Fund
Aetna Income Shares
Aetna Balanced VP, Inc.
Aetna GET Fund
Series B
Series C
Aetna Generation Portfolios, Inc.
Aetna Ascent VP
Aetna Crossroads VP
Aetna Legacy VP
Aetna Variable Portfolios, Inc.
Aetna Value Opportunity VP
Aetna Growth VP
Aetna Small Company VP
Aetna Index Plus Large Cap VP
Aetna High Yield VP
Aetna Real Estate Securities VP
Aetna Mid Cap VP
Aetna Index Plus Mid Cap VP
Aetna Index Plus Small Cap VP
Aetna Index Plus Bond VP
Aetna International VP
