HARTFORD LIFE INSURANCE COMPANY
(A STOCK INSURANCE COMPANY)
HARTFORD PLAZA, HARTFORD, CONNECTICUT 06115
GROUP ANNUITY CONTRACT
INDIVIDUALLY ALLOCATED
CONTRACTHOLDER
CONTRACT EFFECTIVE DATE
PLACE OF DELIVERY
CONTRACT NUMBER
THIS CONTRACT IS ISSUED IN CONSIDERATION OF THE APPLICATION OF THE
CONTRACTHOLDER, A COPY OF WHICH IS ATTACHED TO AND MADE A PART OF THIS
CONTRACT AND THE PAYMENT OF CONTRIBUTIONS IN ACCORDANCE WITH THE TERMS AND
CONDITIONS OF THE CONTRACT.
THIS CONTRACT IS SUBJECT TO THE LAWS OF THE JURISDICTION WHERE IT IS
DELIVERED.
THE CONDITIONS AND PROVISIONS OF THIS AND THE FOLLOWING PAGES ARE PART
OF THE CONTRACT.
THIS CONTRACT MAKES PROVISION FOR THE ACCUMULATION OF CONTRACT VALUES IN THE
GENERAL ACCOUNT OF THE INSURANCE COMPANY TO PROVIDE FIXED ANNUITY
ACCUMULATIONS AND BENEFITS AND IN A SEPARATE ACCOUNT OF THE INSURANCE COMPANY
TO PROVIDE VARIABLE ANNUITY ACCUMULATIONS AND BENEFITS. ACTUAL ANNUITY PAYOUT
COMMENCING ON THE ANNUITY COMMENCEMENT DATE MAY BE ON A VARIABLE BASIS
(SEPARATE ACCOUNT) AND/OR ON A FIXED BASIS (GENERAL ACCOUNT).
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. DETAILS OF THE VARIABLE PROVISIONS ARE DESCRIBED HEREIN.
INDIVIDUAL ALLOCATIONS - NONPARTICIPATING
SIGNED FOR THE HARTFORD
/s/ XXX X. XXXXX /s/ X. XXXXXXX
Xxx X. Xxxxx, President X. Xxxxxxx, Secretary
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TABLE OF CONTENTS
SECTION STARTING ON PAGE
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1 Definitions 2
2 Contribution Provisions 5
3 Allocation of Contributions 9
4 Investment of Contributions 11
5 Payment of Benefits 14
6 Distribution Value and Limitation
on Transfers and Distributions 19
7 Minimum Required Distributions 20
8 Death Benefits 23
9 Settlement Options 25
10 Charges Against the Contract 31
11 Loans 35
12 General Provisions 38
13 Suspension and Termination Provisions 42
Following Last Section:
Annuity Purchase Rate Table A
Annuity Purchase Rate Table B
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SECTION 1
DEFINITIONS
1.1 ACCUMULATION PERIOD - The period under this Contract prior to the
Annuity Commencement Date.
1.2 ANNUITY COMMENCEMENT DATE - The date on which annuity payments are
scheduled to begin as described under Sections 5 and 9 of this Contract.
1.3 ANNUITY PERIOD - The period in the Contract, following the Accumulation
Period, during which actual annuity payments are made.
1.4 BENEFICIARY - The person(s) designated to receive Participant Individual
Account values in the event of the Participant's death.
1.5 CODE - The Internal Revenue Code of 1986 and any amendments thereto.
1.6 CONTRACT - The Contract is group annuity Contract GA - <
issued by the Insurance Company.
1.7 CONTRACTHOLDER - The Contractholder is < .
1.8 CONTRACT YEAR - A period of 12 months commencing with the effective
date of this contract or with any contract anniversary.
1.9 DATE OF COVERAGE - the date on which the application on behalf of an
Eligible Employee is received in good order by the Insurance Company.
1.10 ELECTIVE DEFERRAL - With respect to any taxable year of a Participant,
the Elective Deferral is the sum of all employer contributions made on
behalf of such Participant pursuant to an election to defer under
(1) any qualified cash or deferred arrangements as described in section
401(k) of the Code, (2) any simplified employee pension cash or deferred
arrangement as described in section 402(h)(1)(B) of the Code, (3) any
eligible deferred compensation plan under section 457 of the Code,
(4) any plan as described under section 501(c)(18) of the Code, and
(5) an annuity contract satisfying section 403(b) of the Code.
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1.11 ELIGIBLE EMPLOYEE - Any employee who is employed by the Employer.
Notwithstanding the foregoing, an Eligible Employee does not include an
employee who is customarily employed on a part-time, temporary, or
irregular basis for less than 20 hours per week. An Eligible Employee
also does not include a person whose employment is incidental to his or
her education program.
1.12 EMPLOYER - The term Employer means < .
1.13 FUND - The Funds described on the Contract Specification page which
are included in the Separate Account and such other Funds as may be
added to the Separate Account as they become available.
1.14 GENERAL ACCOUNT - That portion of the Contract invested in the
general account of the Insurance Company.
1.15 HOME OFFICE - The term Home Office refers to the mailing address of
the Insurance Company which is P.O. Box 2999, Hartford, Connecticut
06104-2999.
1.16 INSURANCE COMPANY - The Insurance Company is Hartford Life Insurance
Company, a legal reserve life insurance company incorporated in
Connecticut.
1.17 PARTICIPANT - Any Eligible Employee or former Eligible Employee who
elects to participate in this contract or formerly participated in
this Contract, and who currently has an Individual Account maintained
on his or her behalf under the Contract.
1.18 PARTICIPANT'S CONTRACT YEAR - A period of twelve (12) months commencing
with the Date of Coverage of a Participant and each successive twelve
(12) month period thereafter.
1.19 PARTICIPANT'S INDIVIDUAL ACCOUNT - An account to which the General
Account values and the Separate Account Accumulation Units held by the
Contract Owner on behalf of a Participant are allocated.
1.20 PREMIUM TAX - The tax or amount of tax, if any, charged by a state or
municipality on premiums, purchase payments or contract value.
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1.21 ROLLOVER CONTRIBUTION - A contribution made to the Contract as
described in Section 2.2 of the Contract.
1.22 SALARY REDUCTION CONTRIBUTION - A contribution made to the Contract
pursuant to a salary reduction agreement as described in Section 2.1
of the Contract.
1.23 SEPARATE ACCOUNT - A separate account of the Insurance Company,
entitled Hartford Life Insurance Company Separate Account Two, under
which income, gains and losses, whether or not realized, from assets
allocated to such account are, in accordance with the contracts issued
with respect thereto, credited to or charged against such separate
account without regard to the other income, gains, or losses of the
Insurance Company.
1.24 SUB-ACCOUNT - An account established and maintained within the
Separate Account with respect to a Fund.
1.25 TRANSFER AMOUNTS - Any amount transferred to this Contract on behalf
of an Eligible Employee pursuant to Section 2.3 of the Contract.
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SECTION 2
CONTRIBUTION PROVISIONS
2.1 SALARY REDUCTION CONTRIBUTIONS. (a) Any Eligible Employee may make
Salary Reduction Contributions to the Contract at any time. To
participate in the contract, an Eligible Employee must complete a written
salary reduction agreement with the Employer specifying the portion of his
compensation that is to be contributed to this Contract as Salary
Reduction Contributions. The salary reduction agreement shall only apply
to amounts earned after the agreement becomes effective and shall be
irrevocable with respect to compensation earned while the salary
reduction agreement is in effect. An Eligible Employee may only enter
into one salary reduction agreement with the Employer during each
taxable year of the Eligible Employee. An Eligible Employee may
terminate a salary reduction agreement for amounts not yet earned at
any time. An Eligible Employee's salary reduction agreement shall remain
in effect until the Eligible Employee either terminates such agreement or
files a new salary reduction agreement with the Employer in a
subsequent taxable year.
(c) The Contractholder agrees to reduce each Participant's
compensation by the amount indicated in the salary reduction agreement
and remit such amount as a Salary Reduction Contribution to the Insurance
Company. Salary Reduction Contributions shall become due and payable to
the Insurance Company within thirty days of deferral. A grace period of
sixty days, or the time required by law for the contribution to be made,
if less, shall be allowed for such payment.
(d) The amount of Elective Deferrals, including Salary Reduction
Contributions, for any Participant's taxable year under this Contract
and all other plans, contracts, or arrangements of the Employer shall
not exceed the dollar limit in effect under Code section 402(g) at the
beginning of such taxable year.
(e) Notwithstanding any other provision of the Contract, excess
deferrals, plus any income and minus any loss allocable thereto, may
be distributed to a Participant who requests such distribution in
accordance with this subsection (e):
(1) Not later than the March 1 following the close of the
the Participant's taxable year, the Participant may notify the
Insurance Company of the amount of excess deferrals received by
the Contract during the taxable year. The notification shall be
in writing, shall specify the amount of the Participant's excess
deferrals, and shall be accompanied by the
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Participant's written statement that if such amounts are not
distributed, these amounts, when added to all other Elective
Deferrals made on behalf of the Participant during the taxable
year, shall exceed the dollar limitation specified in
section 402 (g) of the Code.
(2) If the Participant provides the Insurance Company with
satisfactory evidence and written notice to demonstrate that all
Elective Deferrals by the Participant to this Contract and any
other qualified plan exceed the applicable limit under
section 402(g) of the Code for such individual's taxable year, then
the Insurance Company may (but is not required to) distribute a
sufficient amount attributable to the Participant's Salary
Reduction Contributions (not to exceed the amount of Salary
Reduction Contributions actually contributed to the Contract on
behalf of the Participant during the taxable year) from the Contract
to allow the Participant to comply with the applicable limit. The
evidence provided by the Participant must establish clearly the
amount of the excess deferral.
(3) The term "excess deferral" means those Elective Deferrals
that are includible in a Participant's gross income under
section 402(g) of the Code because they exceed the applicable
dollar limit under section 402(g) of the Code.
(4) The excess deferral distributed to a Participant with respect
to a taxable year shall be adjusted to reflect income or loss in
the Participant's Individual Account for the taxable year allocable
thereto. The income or loss allocable to such excess deferral shall
be determined by the method generally used under the Contract to
allocate income or loss to a Participant's Individual Account.
2.2 ROLLOVER CONTRIBUTIONS. (a) The Insurance Company will accept
Rollover Contributions on behalf of any Participant who is making
Salary Reduction Contributions to the Contract. The Rollover
Contribution must consist entirely of amount attributable to an eligible
rollover distribution from an annuity, custodial account, or retirement
income account described in section 403(b) of the Code (referred to
herein as a "403(b) annuity"). For purposes of this section, the term
"eligible rollover distribution" has the same meaning as provided in
Section 5.4(b) of the Contract.
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(b) The Rollover Contribution may be remitted to the Contract by
either one of the following methods:
(1) A cash amount representing the Rollover Contribution may
be transferred directly from the 403(b) annuity from which such
amount is distributable to the Insurance Company; or
(2) the Participant may remit a cash amount to the Insurance
Company that constitutes the Rollover Contribution from a 403(b)
annuity or an individual retirement arrangement (as described in
Section 5.4(b) of the Contract) within sixty (60) days of receipt
of such amount from the 403(b) program or individual retirement
arrangement.
(c) The Insurance Company may require a Participant to provide such
information as it deems necessary to demonstrate that the Participant
is entitled to rollover an amount to this Contract.
2.3 TRANSFER AMOUNTS. The Insurance Company may accept directly from
another 403(b) annuity all or part of an Eligible Employee's interest
in such 403(b) annuity. Any transfer of an Eligible Employee's interest
from another 403(b) annuity into this Contract must comply with the
requirements of Revenue Ruling 90-24 and any other applicable guidance
issued by the Internal Revenue Service. The Insurance Company may
request any documents or other information from the Eligible Employee or
opinions of counsel which the Insurance Company deems necessary to
establish that such interest may be properly transferred to this
Contract. The Insurance Company shall not accept any Transfer Amount to
the extent that acceptance of such Transfer Amount would necessitate
the Insurance Company to take actions inconsistent with the other
provisions of this Contract.
2.4 LIMITATION ON ANNUAL ADDITIONS. (a) Notwithstanding anything in this
Section 2 to the contrary, the total annual additions made to the
Contract on behalf of a Participant for any year may not exceed the
limits imposed by section 415 of the Code, as they may be adjusted from
time to time. The limits of section 415 of the Code applicable to 403(b)
annuity contracts are herein incorporated by reference.
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(b) If, as a result of a reasonable error in estimating a
Participant's annual compensation (as defined in section 415 of the
Code), a reasonable error in determining the amount of Salary
Reduction Contributions that may be made with respect to any
individual under the limits of section 415, or such other
circumstances that the Commissioner of Internal Revenue may find,
there is an amount allocated to a Participant's Individual Account in
excess of the section 415 limits, such excess may be disposed of as
follows at the request of the Participant:
(1) Any Salary Reduction Contributions (including any gains
thereon) to the extent they would reduce the excess amount,
may be returned to the Participant.
(c) For purposes of this Section 2.4, the term "annual additions"
means the amount of Salary Reduction Contributions credited to
a Participant's Individual Account for a taxable year.
2.5 LIMITATION OF AMOUNTS BY INSURANCE COMPANY. The Insurance Company
reserves the right to limit any increase in the amount of Salary
Reduction Contributions, Rollover Contributions, or Transfer Amounts
made to a Participant's Individual Account to no more than three (3)
times the total amount of such contributions or transfers made on
behalf of such Participant during the initial twelve (12) consecutive
months following the Date of Coverage. Increases in excess of those
described will be accepted only with the consent of the Insurance
Company and subject to the then current deductions being made under
the Contract.
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SECTION 3
ALLOCATION OF CONTRIBUTIONS
3.1 ALLOCATION TO PARTICIPANT'S INDIVIDUAL ACCOUNT. (a) An account shall
be established and maintained under this Contract for each Participant.
Such account shall be referred to herein as the Participant's Individual
Account. All Salary Reduction Contributions, Rollover Contributions,
and Transfer Amounts made to the Contract on behalf of a Participant
shall be deposited to such Participant's Individual Account and
allocated to the General Account and Sub-Accounts in accordance with
the Participant's currently effective investment election.
(b) With respect to an initial Salary Reduction Contribution, Rollover
Contribution, or Transfer Amount, the initial contribution shall be
credited to the Participant's Individual Account by the Insurance
Company within two business days of receipt of a properly completed
application and such initial contribution. If an application or any
other information is complete when received, the contribution shall be
credited to the Participant's Individual Account within five (5)
business days. If an application is not received in good order, as
determined by the Insurance Company, within five (5) business days of
the receipt of the initial contribution, it will be returned to the
Participant, unless the Insurance Company informs the Participant of
the delay and the Participant requests that the contribution not be
returned.
3.2 INVESTMENT ELECTION. A Participant shall make an investment election in
the manner and form prescribed by the Insurance Company. The investment
election shall specify the percentage that Salary Reduction
Contributions and Rollover Contributions, as applicable, shall be
allocated between the General Account and the Sub-Accounts of the
Separate Account. The percentages specified in any investment election
must be in multiples of ten percent (10%) and the sum of such
percentages must equal one hundred percent (100%). A Participant's
investment election shall remain in effect until the Participant changes
the investment election, in the manner prescribed by the Insurance
Company.
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3.3 CHANGE OF INVESTMENT ELECTION. A Participant may change the investment
election applicable to the allocation of contributions at any time during
the Accumulation Period. The percentages specified in any changed
investment election must be in multiples of ten percent (10%) and the
sum of such percentages under the
resulting investment election must equal one hundred percent (100%). Any
change in investment election must be requested in the form and manner
required by the Insurance Company.
3.4 TRANSFER OF AMOUNTS WITHIN CONTRACT. A Participant may, at any time, elect
to transfer, in multiples of ten percent (10%), the value of such
Participant's Individual Account among the various investment alternative
provided under the Contract, subject to the following requirements:
(a) Amounts invested in a Sub-Account may be transferred to any other
Sub-Account offered under the Contract, to the General Account, or to
any combination thereof.
(b) Amounts invested in the General Account may be transferred to one or
any combination of any Sub-Accounts offered under the Contract.
(c) Notwithstanding (b) above, amounts invested in the General Account,
or amounts previously invested in the General Account during the
three month period immediately preceding the date such transfer is
requested, may not be transferred to any Sub-Account which the
Insurance Company considers to be a competing fixed income account.
(d) A transfer may be elected by a Participant under this Section 3.4
only during the Accumulation Period that applies to such Participant.
(e) A transfer shall only be made in the form and manner prescribed by
the Insurance Company.
(f) The amount transferred from the General Account to a Sub-Account may
be limited by the Insurance Company in accordance with the terms of
Section 6.2 of the Contract.
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SECTION 4
INVESTMENT OF CONTRIBUTIONS
4.1 VALUE OF GENERAL ACCOUNT (a) The value of the portion of a Participant's
Individual Account invested in the General Account on any date is an amount
equal to the product of the number of General Account Accumulation Units
credited to such Participant's Individual Account multiplied by the
dollar value of a General Account Accumulation Unit for that date.
(b) When an amount is allocated to the Contract on behalf of a
Participant for investment in the General Account, the portion of
the Participant's Individual Account invested in the General
Account shall be credited with a number of General Account
Accumulation Units equal to the amount so allocated divided by the
General Account Accumulation Unit Value as of that date.
(c) When an amount is transferred or distributed from that portion of a
Participant's Individual Account invested in the General Account,
the Participant's Individual Account shall be debited by the number
of General Accumulation Units equal to the amount transferred or
distributed divided by the General Account Accumulation Unit Value
as of the date of the transfer or distribution.
(d) The General Account Accumulation Unit Value as of any date shall be
calculated in accordance with the following formula:
1/N
UV + PV x (1 + i)
Where:
UV is the General Account Accumulation Unit Value as of the
current date.
PV is the General Account Accumulation Unit Value on the
immediately preceding date.
i is the Declared Interest Rate (as described in Section 4.1(f)
below) on such date.
N is the number of days in the applicable calendar year.
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(e) The number of General Account Accumulation Units credited to a
Participant's Individual Account is determined by dividing the
amount allocated to that portion of the Participant's Individual
Account invested in the General Account by the General Account
Accumulation Unit Value for that date.
(f) For purposes of this Contract, the "Declared Interest Rate" is the
rate of interest credited to the General Account for any period of
time as shall be determined by the Insurance Company. As of the
Effective Date of this Contract the Declared Interest Rate is >
percent. The Declared Interst Rate may be changed by the Insurance
Company from time to time. Any such change shall be declared in
advance and shall become effective as of the first day of the month
immediately following the date the Contractholder is notified of such
change. The Declared Interest Rate shall not be less than > percent.
The Declared Interest Rate shall be compounded annually.
4.2 VALUE OF SEPARATE ACCOUNT. (a) The value of a Participant's Individual
Account under the Separate Account shall be determined by multiplying the
total number of Sub-Account Accumulation Units credited to the
Participant's Individual Account by the current Accumulation Unit value
for the respective Sub-Account.
(b) A "Sub-Account Accumulation Unit" is an accounting unit of measure
used to calculate the Separate Account value of a Participant's
Individual Account during the Accumulation Period. The Sub-Account
Accumulation Unit Value shall be determined on each Valuation Day
by a Net Investment Factor for that Sub-Account for the Valuation
Period then ended.
(c) The value of the Sub-Account Accumulation Units in the Separate
Account representing an interest in the appropriate Fund shares
that are held under the Contract were initially established on the
date that contributions were first contributed to the appropriate
Sub-Account of the Separate Account. The Accumulation Unit value
for each Sub-Account will vary to reflect the investment experience
of the applicable Fund and shall be determined on each Valuation Day
by multiplying the Accumulation Unit value of the particular
Sub-Account on the preceding day by the "Net Investment Factor" for
that Sub-Account for the Valuation Period then ended.
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(d) The Net Investment Factor for each of the Sub-Accounts is equal to
the net asset value per share of the corresponding Fund at the end
of the Valuation Period, plus the per share amount of any dividends
or capital gains by that Fund if the ex-dividend date occurs in the
Valuation Period ended, divided by the net asset value per share of
the corresponding Fund at the beginning of the Valuation Period then
ending.
(e) The shares of the Fund are valued at net asset value on a daily
basis.
(f) For purposes of this Section 4, the Valuation Date is each day the
New York Stock Exchange is open for unrestricted trading and the
Insurance Company is open to transact normal business.
(g) For purposes of this Section 4, the Valuation Period is the period
between Valuation Days.
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SECTION 5
PAYMENT OF BENEFITS
5.1 COMMENCEMENT OF PAYMENTS. (a) Payments will begin to be paid to a
Participant from the Contract as of the Participant's Annuity Commencement
Date. The Insurance Company reserves the right to begin payments on the
first day of the month coincident with or next following the Participant's
65th birthday under Option 2, as described in Section 9.2 of the Contract,
with 120 Monthly Payments Certain, unless the Participant elects otherwise
in accordance with the remaining provisions of this Section 5.1
(b) A Participant may elect as an Annuity Commencement Date the first
day of any month. Notwithstanding the foregoing, in no event may a
Participant elect an Annuity Commencement Date earlier than the date
the Participant attains age 59 1/2, unless such Participant has
separated from service (within the meaning of Section 5.2(c) of the
Contract) or has become disabled (within the meaning of Section 5.2(d)
of the Contract).
(c) A Participant may elect to have the benefit paid from the Contract
pursuant to any of the annuity options described in Section 9.2 of
the Contract.
(d) Election of any of the options provided in (b) and (c) above must
be made by notice in writing to the Home Office of the Insurance
Company at least thirty (30) days prior to the date such election is
to become effective.
5.2 OTHER DISTRIBUTIONS. (a) A Participant may request, in form and manner
prescribed by the Insurance Company, a distribution of all or a portion
of the value of his Participant's Individual Account provided that the
Participant demonstrates that the distribution is a result of one
of the events described in (b), (c), (d), or (e) below.
Distributions pursuant to this Section 5.2 shall be paid be paid
pursuant to the single sum payment option, as described in
Section 9.3 of the Contract, except that a Participant may request
that a distribution made on account of the Participant's separation
from service, as described in (c) below, be paid in accordance with
either the single sum payment option or the systematic withdrawal
option described in Section 9.4 of the Contract. Any distribution
requested under this Section 5.2 must also satisfy the requirements
of (f) and (g) below.
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(b) A Participant may request a distribution on or after the date such
Participant attains age 59-1/2.
(c) A Participant may request a distribution if such Participant
separates from service. For purposes of this subsection, the term
"separates from service" means the actual severance of the
employment relationship between the Participant and the Employer of
a presumably permanent nature for reasons other than temporary
absence, any change in position or other occurrence qualifying as a
temporary break in service, the transfer or other change of position
resulting in employment by an entity controlling, controlled by, or
under common control by the Employer, or the cessation of an
employment relationship resulting from a reorganization, merger, or
the sale or discontinuance of all or any part of the Employer's
business.
(d) A Participant may request a distribution on or after the date such
Participant becomes disabled within the meaning of Code
section 72(m)(7), provided that such disability would entitle the
Participant to receive social security disability benefits.
(e) A Participant may request a distribution if such Participant incurs
a hardship. The amount distributed on account of a hardship may not
include any income attributable to contributions made pursuant to a
salary reduction agreement. For purposes of this Contract, the term
"hardship" means an immediate and heavy financial need of the
Participant. In addition, a distribution may be made on account of
a hardship only if the distribution is necessary to satisfy the
immediate and heavy financial need.
(1) For purposes of this Contract, a distribution is made on
account of an immediate and heavy financial need only if the
distribution is on account of:
(A) Expenses for medical care described in Code section 213(d)
previously incurred by the Participant, the Participant's
spouse, or any dependents of the Participant (as described
in Code section 152) or necessary for these persons to
obtain medical care described in Code section 213(d);
(B) Costs directly related to the purchase of a principal
residence for the Participant (excluding mortgage
payments);
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(C) Payment of tuition, related educational fees, and room and
board expenses, for the next 12 months of post-secondary
education for the Participant, or the Participant's
spouse, children, or dependents (as defined in Code
section 152); or
(D) Payments necessary to prevent the eviction of the
Participant from the Participant's principal residence or
foreclosure on the mortgage on that residence.
(2) A distribution will be considered as necessary to satisfy an
immediate an heavy financial need of the Participant only if:
(A) the Participant has obtained all distributions, other
than hardship distributions, and all nontaxable loans
(to the extent that the loan would not increase the amount
of the need) under all plans maintained by the Employer;
and
(B) the distribution is not in excess of the amount of the
immediate and heavy financial need (including amounts
necessary to pay any federal, state or local income taxes
or penalties reasonably anticipated to result from the
distribution).
(3) If a Participant receives a hardship distribution in accordance
with this subsection (e), such Participant shall be suspended
from making additional Salary Reduction Contributions to the
Contract for a period of twelve months beginning on the first
day of the month immediately following the month such
distribution is paid to the Participant.
(4) The Insurance Company may rely on the Participant's
representations that the hardship is on account of an immediate
and heavy financial need and that the amount requested is
necessary to satisfy such immediate and heavy financial need.
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(f) If the amount requested to be distributed is less than the full value
of the Participant's Individual Account, such amount shall either be taken
out of the General Account and Sub-Account(s) in which the Participant
Individual Account is invested, as specified in the request for
distribution, or, if no specification is made, the requested distribution
shall be taken out of the Participant's Individual Account from the General
Account and Sub-Account(s) in which such Individual Account is invested on
the same basis as the Participant's investment election applicable to the
allocation of contributions then in effect.
(g) The amount actually distributed to a Participant pursuant to this
Section 5.2 shall be equal to the Distribution Value as determined under
Section 6 of the Contract.
(h) Any distribution made in accordance with this Section 5.2, other than
distributions made pursuant to Section 5.2(c) or 5.2(d), may be limited by
the Insurance Company in accordance with the terms of Section 6.2 of the
Contract.
5.3 TRANSFER TO ANOTHER PLAN. (a) Notwithstanding anything in this Section 5
to the contrary, a Participant may request in writing, that the Insurance
Company transfer all or a portion of the Participant's Individual Account
to:
(1) another annuity contract that qualifies under Code
section 403(b); or
(2) a custodial account for regulated investment company stock
that qualifies under Code section 403(b).
(b) The amount actually transferred pursuant to this Section 5.3 shall
be equal to the Distribution Value of the Participant's Individual
Account as determined under Section 6 of the Contract.
(c) Any transfer to another plan may be limited by the Insurance Company
in accordance with the terms of Section 6.2 of the Contract.
5.4 DIRECT ROLLOVERS. (a) This section applies to distributions made on or
after January 1, 1993. Notwithstanding any provision in this Contract to
the contrary that would otherwise limit a distributee's election under this
section, a distributee may elect, at the time and in the manner
prescribed by the Insurance Company, to have any portion of an
eligible rollover distribution paid directly to an eligible rollover
plan specified by the distributee in a direct rollover.
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(b) Definitions.
(1) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or a portion of the
balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal
period payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee and the
distributee's or the joint lives (or joint life expectancies)
of the distributees and the distributee's designated
beneficiary, or for a specified period of ten years or more;
any distribution to the extent such distribution is required
under section 401(a)(9) of the Code; the portion of any
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to employer securities); and any other
distribution that the Internal Revenue Service provides by rule
or regulation is not an eligible rollover distribution.
(2) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of
the Code, and individual retirement annuity described in
section 408(b) of the Code, or an annuity, custodial account,
or retirement income account described in section 403(b) of the
Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or an individual
retirement annuity.
(3) Distributee: A distributee includes an employee or former
employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's spouse
or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in section 414(p) of the
Code, are distributees with regard to the interest of the spouse
or former spouse.
(4) Direct rollover: A direct rollover is a payment by the
Contract to the eligible retirement plan specified by the
distributee.
18
SECTION 6
DISTRIBUTION VALUE AND
LIMITATION ON TRANSFERS AND DISTRIBUTIONS
6.1 DISTRIBUTION VALUE. (a) The Distribution Value of a Participant's
Individual Account for any day during the Accumulation Period is
equal to the value of the Participant's Individual Account on that
day, less:
(1) any applicable premium taxes not previously deducted; and
(2) the Annual Contract Fee described in Section 10, if
applicable; and
(3) any applicable Contingent Deferred Sales Charge described
in Section 10; and
(4) the amount of any outstanding loan made from this Contract.
(b) The value of a Participant's Individual Account shall be
determined in accordance with the provisions of Section 4 of this
Contract.
6.2 LIMITATION ON TRANSFERS AND DISTRIBUTIONS. The Insurance Company
reserves the right to limit a transfer or distribution (as described
in Section 3.4(f), Section 5.2(h), and Section 5.3(e) of the Contract)
from that portion of a Participant's Individual Account invested in the
General Account, if the amount of such transfer or distribution, when
added to the aggregate of all transfers or distributions from the
General Account made by all Participants during the current Contract
Year would exceed one-sixth (1/6) of the balance of the General Account
as of the first day of such Contract Year.
(b) If this Section 6.2 applies to a transfer or distribution, the
amount of such transfer or distribution shall be disbursed in level
monthly installments over a period not to exceed five (5) years, in
which event interest will continue to be credited to the unpaid balance
remaining in the General Account in accordance to the terms of
Section 4.1 of the Contract. Notwithstanding the foregoing, the
Insurance Company reserves the right to disburse at any time the
remaining unpaid balance in a single sum payment.
19
SECTION 7
MINIMUM REQUIRED DISTRIBUTIONS
7.1 APPLICABILITY. (a) The requirements of this Section shall apply to
any distributions of a Participant's interest from this Contract and
will take precedence over any inconsistent provisions of the Contract.
(b) All distributions hereunder shall be made in accordance with the
requirements of section 401(a)(9) of the Code, including the
incidental death benefit requirements of section 401(a)(9)(G) of the
Code, and the regulations thereunder, including the minimum distribution
incidental benefit requirement of section 1.401(a)(9)-2 of the
Proposed Income Tax Regulations.
7.2 REQUIRED DISTRIBUTIONS BEFORE DEATH. (a) The entire interest of a
Participant will be distributed or commence to be distributed no later
than the first of April following the calendar year in which such
Participant attains age 70 1/2 (required beginning date), over (a) the
life of such Participant, or the lives of such Participant and his or
her designated beneficiary, or (b) a period certain not extending beyond
the life expectancy of such individual, or the joint and last survivor
expectancy of such participant and his or her designated beneficiary.
Payments must be made in periodic payments at intervals no longer than one
year. In addition, payments must be either nonincreasing or they may
increase only as provided in Q&A F-3 of section 1.401(a)(9)-1 of the
Proposed Income Tax Regulations.
(b) Life Expectancy is computed by use of the expected return multiples
in Tables V and VI of section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the individual by the time distributions are
required to begin, life expectancies shall be recalculated annually.
Such election shall be irrevocable by the Participant and shall apply to
all subsequent years. The life expectancy of a non-spouse beneficiary
may not be recalculated. Instead, life expectancy will be calculated
assuming the attained age of such beneficiary during the calendar year
in which the beneficiary attains age 70 1/2, and payments for subsequent
years shall be calculated based on such life expectancy reduced by one for
each calendar year which has elapsed since the calendar year life
expectancy was first calculated.
20
7.3 REQUIRED DISTRIBUTIONS UPON DEATH. (a) If the individual dies after
distribution of his or her interest has begun, the remaining portion of
such interest will continue to be distributed at least as rapidly as under
the method of distribution being used prior to the individual's death.
(b) If the Participant dies before distribution of his or her interest
begins, distributions of the Participant's entire interest shall be
completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death except to the extent that an
election is made to receive distributions in accordance with (1) or (2)
below:
(1) If the Participant's interest is payable to a designated
beneficiary, then the entire interest of the Participant may be
distributed over a period not greater than the life expectancy of
the designated beneficiary commencing on or before December 31 of
the calendar year immediately following the calendar year in which
the individual died.
(2) If the designated beneficiary is the Participant's surviving
spouse, the date distributions are required to begin in accordance
with (1) above shall not be earlier than the later of (A)
December 31 of the calendar year immediately following the calendar
year in which the Participant died, or (B) December 31 of the
calendar year in which the Participant would have attained age
70-1/2.
(c) Life expectancy is computed by use of the expected return multiples
in Tables V and VI of section 1.72-9 of the Income Tax Regulations. For
purposes of distributions beginning after the Participant's death,
unless otherwise elected by the surviving spouse by the time
distributions are required to begin, life expectancies shall be
recalculated annually. Such election shall be irrevocable by the
surviving spouse and shall apply to all subsequent years. In the case of
any other designated beneficiary, life expectancies shall be calculated
using the attained age of such beneficiary using the calendar year in
which distributions are required to begin pursuant to this section, and
payments for any subsequent calendar year shall be calculated based on
such life expectancy reduced by one for such calendar year which has
elapsed since the calendar year life expectancy was first calculated.
21
(d) Distributions under this section are considered to have begun if
distributions are made on account of the individual reaching his or her
required beginning date or if prior to the required beginning date
distributions irrevocably commence to a Participant over a period
permitted and in an annuity form acceptable under section 1.401(a)(9)
of the Regulations.
22
SECTION 8
DEATH BENEFITS
8.1 DEATH BENEFIT PRIOR TO ANNUITY COMMENCEMENT DATE. (a) If a
Participant dies prior to the earlier of the Annuity Commencement Date
or the Participant's 65th birthday, the Insurance Company will pay the
Participant's Beneficiary the greater of (a) the value in the
Participant's Individual Account as of the day written proof of death
of such person is received by the Insurance Company, or (b) 100% of
the total contributions made to the contract, reduced by any prior
distributions.
(b) If a Participant dies prior to his Annuity Commencement Date but
on or after his 65th birth date, the Beneficiary shall receive the
value of the Participant's Individual Account as of the date of
receipt of due proof of the death at the Home Office of the Insurance
Company.
(c) Notwithstanding anything in this Section 8.1 to the contrary, in
no event shall the amount of any death benefit exceed the Distribution
Value of the Participant's Individual Account determined in accordance
with Section 6 of the Contract.
8.2 DEATH BENEFIT ON OR AFTER ANNUITY COMMENCEMENT DATE. (a) If the
Participant dies on or after the Annuity Commencement Date, the death
benefit, if any, will be paid in accordance with the terms of the
applicable annuity certificate.
8.3 FORM OF DEATH BENEFIT. (a) The death benefit shall be paid to the
Beneficiary in a single sum, in which case payment will be made within
seven days of receipt of proof of death by the Insurance Company,
unless otherwise provided. In lieu of payment in a single sum, a
Beneficiary may elect that the amount be applied any settlement option
described in Section 9 of the Contract.
(b) An election to receive death benefits under a form of Annuity
must be made (1) prior to the payment of a single sum settlement and
(2) prior to the December 31 of the calendar year immediately
following the calendar year in which the employee died. No election
to provide Annuity Payments will become operative unless the initial
Annuity payment is at least $20.00 on either a fixed or variable
basis, or $20.00 on each basis when a combination benefit is selected.
8.4 BENEFICIARY DESIGNATION. (a) The designation of a Beneficiary will
remain in effect until changed by the Participant.
23
(b) Changes in designation of the Beneficiary may be made during the
lifetime of the Participant by written notice to the Insurance Company
provided, however, that when a Beneficiary has been designated
irrevocably, such designation cannot be changed or revoked without
such Beneficiary's written consent.
(c) Upon receipt of such notice and written consent, if required, at
the Home Office of the Insurance Company, the new designation shall
take effect as of the date the notice is signed, whether or not the
Participant is alive at the time of receipt of such notice subject to
any payment made or other action taken by the Insurance Company before
such receipt.
(d) At the Participant's death the Beneficiary will be as provided in
the beneficiary designation then in effect. If no Beneficiary is then
in effect or if there is no designated Beneficiary living, the
Participant's estate will be the Beneficiary.
24
SECTION 9
SETTLEMENT OPTIONS
9.1 SETTLEMENT OPTIONS. This section describes the various options by
which benefits may be paid from this Contract to a Participant or a
Beneficiary. Such options may only be elected by a Participant or
Beneficiary as otherwise permitted under the terms of this Contract.
9.2 ANNUITY OPTIONS. The following annuity options are available under
the contract and may be elected by a Participant as otherwise provided
under the terms of this contract:
Option 1: Life Annuity. This is an annuity payable during the
lifetime of the Annuitant and terminating with the last monthly
payment preceding the death of the Annuitant.
Option 2: Life Annuity with 120, 180 or 240 Monthly Payments
Certain. This is an annuity payable monthly during the lifetime
of the annuitant with the provision that if, at the death of the
Annuitant, payments have been made for less than 120, 180, or 240
months, as elected, the remaining guaranteed monthly payments
will be made to the Participant's Beneficiary.
Option 3: Unit Refund Annuity. This is an annuity payable
monthly for the lifetime of the annuitant terminating with the
last payment due prior to the death of the Annuitant, except that
an additional payment will be made to the Beneficiary if (1)
exceeds (2) below:
(1) equals the total amount applied under the option at the
Annuity Commencement Date divided by the Annuity Unit value
(as described in Section 9.4 below) at the Annuity
Commencement Date; and
2) equals the number of Annuity Units represented by each
monthly Annuity payment made multiplied by the number of
monthly annuity payments made.
25
The amount of the additional payments will be determined by
multiplying such excess by the Annuity Unit Value as of the date
the proof of death is received by the Insurance Company.
Option 4: Joint and Last Survivor Annuity. This is an annuity
payable monthly for the lifetime of the annuitant. At the
annuitant's death, payments will continue to the contingent
annuitant, if living, for the remainder of the contingent
annuitant's life. When the annuity is purchased, the annuitant
elects what percentage (50%, 66 2/3%, or 100%) of the monthly
payment will be continued to be paid to the contingent annuitant.
The following also applies to this annuity option:
Option 5: Designated (Fixed) Period Annuity. This is an
annuity payable monthly for the number of years selected, but not
less than three. In the event of the payee's death prior to the
end of the designated period, any then remaining proceeds will be
paid in to the Beneficiary unless other provisions are made and
approved by the Insurance Company. Option 5 does not involve
life contingencies and thus no mortality guarantee.
In addition to the annuity options described above, a Participant may
select any type of annuity which the Insurance Company agrees in
writing to issue.
(b) Under any of the annuity options above, except Option 5 when paid
on a variable basis, no surrenders are permitted once payments
commence. Surrenders out of Option 5 will be subject to any
applicable contingent deferred sales charge.
(c) The amount the Insurance Company will apply toward the purchase
of an annuity will be the Distribution Value of the Individual Account
as of the Annuity Commencement Date.
(d) Any annuity option provided in Section 9.1 above may be paid as
(1) a fixed annuity, (2) a variable annuity, or (3) a combination of
both a fixed annuity and a variable annuity.
26
(e) Fixed Annuity Payments. To determine the amount of each fixed
annuity payment, the amount available to purchase an annuity is
multiplied by the annuity purchase rate then in effect for all
contracts in this class of business. In no event shall the annuity
purchase rates used for the purchase of a fixed annuity be greater
than those provided in Annuity Purchase Rate Table A which is attached
to and made a part of this Contract.
(e) Variable Annuity Payments.
(1) To determine the amount of the first monthly variable
annuity payment, the amount available to purchase the variable
annuity is multiplied by the appropriate annuity purchase rate
based on the 1983 IAM Mortality Table, set back one year, with an
assumed interest rate of four percent (4%), as represented by
Annuity Purchase Rate Table B.
(2) On or before the fifth business day immediately preceding
the annuitant's Annuity Commencement Date, the annuitant must
elect the Sub-Accounts into which the amount used to provide the
variable annuity will be invested, and the percentages that such
amounts will be allocated to such Sub-Accounts. Failure to make
an election in accordance with the preceding sentence shall be
deemed to be an election to invest the amount used to provide the
variable annuity in the same Sub-Accounts and at the same
percentages as the Participant's Individual Account is invested
on such date and to transfer any amounts held in the General
Account on such date proportionately to such Sub-Accounts. In no
event may any election made in accordance with this paragraph (2)
be changed on or after the Annuity Commencement Date.
(3) The amount of the first monthly annuity payment is divided
by the value of an Annuity Unit for the appropriate Sub-Account
as of the close of business on the fifth business day preceding
the day on which payment is due in order to determine the number
of Annuity Units represented by the first payment. The number of
Annuity Units remains fixed during the Annuity Period, and in
each subsequent month the dollar amount of the Annuity payment is
determined by multiplying the fixed number of Annuity Units by
the then current Annuity Unit value.
27
(4) An "Annuity Unit" is an accounting unit of measure in the
Separate Account used to calculate the amount of variable annuity
payments. The value of the Annuity Unit for each Sub-Account in
the Separate Account for any day is determined by multiplying the
value for the preceding day by the product of (1) the Net
Investment Factor (as described in Section 4.2 of the Contract)
for the day for which the Annuity Unit value is being
calculated, and (2) a factor to neutralize the assumed interest
rate.
(5) When annuity payments are to commence, the value of the
contract is determined as the product of the value of the Sub-
Account Accumulation Unit (as described in Section 4.2 of the
Contract) credited to each Sub-Account as of the close of
business on the fifth business day preceding the date the first
annuity payment is due and the number of Sub-Account Accumulation
Units credited to each Sub-Account as of the date the annuity is
to commence.
(6) Annuity payments will be made on the first day of each month
following selection. The Annuity Unit value used in calculating
the amount of annuity payments will be based on an Annuity Unit
value determined as of the close of business on a day not more
than the fifth business day preceding the date of the annuity
payment.
9.3 SINGLE SUM PAYMENT OPTION. Under this option payments are made in the
form of a single sum cash payment.
9.4 SYSTEMATIC WITHDRAWAL OPTION. (a) Under this option payments are
made in a series of monthly, quarterly, semiannual, or annual
installments, as elected by the Participant, over a period not
extending beyond the Participant's life expectancy, or the
joint and last survivor life expectancy of the Participant and the
Participant's Beneficiary, as of the start date. Any election of the
systematic withdrawal option is subject to the following requirements:
(1) To be eligible to elect payments under the systematic
withdrawal option, the value of a Participant's Individual
Account must equal or exceed ten thousand dollars ($10,000.00) at
the time payments begin under this option. A Participant may not
elect the systematic withdrawal option if they have a loan
outstanding from the Contract.
28
(2) Each installment payment shall be equal in amount, except
for the last payment in the series, which may be less, to the
extent that the value of the Participant's Individual Account is
insufficient to make a full installment payment.
(3) The minimum periodic payment amount that may be elected is
one hundred dollars ($100).
(4) The maximum amount that may be paid as a periodic
installment payment may not exceed, on an annual basis, eighteen
percent (18%) of the value of the Participant's Individual
Account balance calculated at the time the Systematic Withdrawal
Option is implemented.
(5) A Participant may elect to have the installment payments (A)
equal a certain number of payments, or (B) paid as a specified
dollar amount until the Participant's Individual Account is
depleted. Under either election, the number of installment
payments made shall be limited to the amount that can be provided
from the value of the Participant's Individual Account. In no
event may installment payments be made over a period of time
extending beyond the Participant's life expectancy as of the
start date, or the joint and last survivor life expectancy of the
Participant and the Participant's Beneficiary as of the start
date.
(6) A Participant may change an election previously made with
regard to the systematic withdrawal option four times during a
calendar year, provided the Participant notifies the Insurance
Company of such change at least thirty (30) days before such
change is to become effective.
(8) A Participant may cancel the systematic withdrawal option at
anytime.
(b) If a Participant dies while the systematic withdrawal option is
in effect, payments under the systematic withdrawal option shall cease
and any remaining value in the Participant's Individual Account shall
be paid to the Participant's Beneficiary in accordance with the
provisions of Section 8 of the Contract.
29
(c) Payments under the systematic withdrawal option shall be made pro
rata from each Sub-Account and the General Account in which the
Participant's Individual Account is invested.
(d) Definitions. For purposes of this Section 9.4, the following
definitions shall apply:
(1) The "start date" is the day for which the first payment
under the systematic withdrawal option is scheduled to be paid.
(2) The term "life expectancy" means the determination of life
expectancies made on the basis of the expected return multiples
in Tables V and VI of Section 1.72-9 of the federal Treasury
Regulations and shall be calculated annually for the Participant
and/or his Beneficiary, if the Beneficiary is his spouse, as
determined by the Participant at the time installment payments
begin.
30
SECTION 10
CHARGES AGAINST THE CONTRACT
10.1 ANNUAL CONTRACT FEE. (a) The Annual Contract Fee is thirty dollars
($30.00). The Annual Contract Fee shall be deducted from the value of
each Participant's Individual Account on the last business day of each
Participant's Contract Year. However, if the value of the
Participant's Individual Account is distributed in full at any time
before the last business day of the Participant's Contract Year, the
Annual Contract Fee charge shall be deducted from the proceeds of such
distribution.
(b) No deduction for the Annual Contract Fee shall be made from a
Participant's Individual Account during the Annuity Period under the
Contract. The Annual Contract Fee shall also not be applied to any
distribution which is on account of a Participant's:
(1) death,
(2) disability within the meaning of Code section 72(m)(7),
provided such disability would entitle the Participant to receive
social security disability benefits,
(3) long term confinement in an officially recognized nursing
home or hospital, provided the Participant's confinement in the
hospital or nursing home is prescribed by a physician and such
confinement is for at least ninety (90) days,
(4) separation from service on or after the fifth Participant's
Contract Year, provided the Participant has attained age 59 1/2,
or
(5) hardship, as described in Section 5.2(e) of the Contract,
other than hardship resulting from the purchase of a principal
residence, as described in Section 5.2(e)(1)(B) of the Contract
and a hardship resulting from the payment of tuition, related
educational fees, and room and board expenses as described in
Section 5.2(e)(1)(C) of the Contract.
Paragraphs (1) through (5) above are further subject to the
requirements of Section 5 or 8 of the Contract, whichever is
applicable.
31
10.2 DEDUCTION FOR MORTALITY, EXPENSE, AND ADMINISTRATIVE UNDERTAKINGS.
(a) For assuming the mortality, expense and administrative
undertakings under this Contract, the Insurance Company shall take a
deduction from the average daily net assets of the Separate Account.
The deduction for such risks has initially been set at 1.25% per year
of the average net assets of the Separate Account. The rate or amount
may be increased by the Insurance Company in its sole discretion,
subject to a maximum charge of 2.00% per year.
10.3 TRANSFER FEE. Transfers among the available investment alternatives
provided under this Contract, as described in Section 3.4 herein,
shall be subject to a fee of five dollars ($5.00). Such transfer fee
shall be deducted from the Sub-Account or the General Account in which
the Participant's Individual Account is invested and from which the
transfer is being made. Notwithstanding the preceding, the transfer
fee shall be waived for the first twelve (12) transfers during a
Participant's Contract Year.
10.4 CONTINGENT DEFERRED SALES CHARGE. (a) Except as otherwise provided
in this Section 10.4, distributions from the Contract (including
transfers made pursuant to Section 5.3 of the Contract) shall be
subject to a Contingent Deferred Sales Charge. The Contingent
Deferred Sales Charge is a percentage, determined in accordance with
the table in subsection (b) below, of the amount distributed. The
number of Participant's Contract Years completed prior to the
distribution will determine the amount of the Contingent Deferred
Sales Charge.
(b) The Contingent Deferred Sales Charge shall be determined from the
following table:
TABLE OF CONTINGENT DEFERRED
SALES CHARGE
Participant's Contract Contingent Deferred
Year of Withdrawal Sales Charge
------------------ -------------------
1 5%
2 5%
3 5%
4 5%
5 5%
6 4%
7 3%
8 2%
9 1%
10 and later None
32
(c) A Participant may request a distribution, in accordance with the
provisions of Section 5 of the Contract, of up to ten percent (10%) of
his Individual Account value on a non-cumulative basis each
Participant Contract Year, after the first participant Contract
Year, without application of the Contingent Deferred Sales Charge.
For any portion of a distribution to be eligible for a waiver
of the Contingent Deferred Sales Charge, the amount distributed may
not be less than two hundred and fifty dollars ($250.00).
(d) The Contingent Deferred Sales Charge shall also be waived for any
distribution which is on account of a Participant's:
(1) death,
(2) disability within the meaning of Code section 72(m)(7),
provided such disability would entitle the Participant to receive
social security disability benefits,
(3) long term confinement in an officially recognized nursing
home or hospital, provided the Participant's confinement in the
hospital or nursing home is prescribed by a physician and such
confinement is for at least ninety (90) days.
(4) separation from service on or after the fifth Participant's
Contract Year, provided the Participant has attained age 59 1/2,
or
(5) hardship, as described in Section 5.2(e) of the Contract,
other than hardship resulting from the purchase of a principal
residence, as described in Section 5.2(e)(1)(B) of the Contract
and a hardship resulting from the payment of tuition, related
educational fees, and room and board expenses as described in
Section 5.2(e)(1)(C) of the Contract.
Paragraphs (1) through (5) above are further subject to the
requirements of Section 5 or 8 of the Contract, whichever is
applicable.
(e) Amounts applied to effect an annuity payment involving life
contingencies or non-life contingencies for a period of three (3)
years or more shall not be subject to a Contingent Deferred Sales
Charge.
33
10.5 ADDITIONAL SERVICES. If the Contractholder requests that the
Insurance Company perform an additional service not specifically
provided under the terms of this Contract that is related to the
Contractholder's 403(b) annuity program, and the Insurance Company
agrees to perform such service, the Insurance Company reserves the
right to charge the Contractholder an additional fee for the
performance of such service calculated on an hourly rate. The hourly
charge shall be determined by agreement between the Contractholder and
the Insurance Company.
34
SECTION 11
LOANS
11.1 AVAILABILITY OF LOANS. A Participant may request a cash loan from the
Contract during the Participant's Accumulation Period.
11.2 ELIGIBILITY FOR LOANS. Only one loan may be outstanding at any time
for any Participant. Once a loan has been made, it may not be
refinanced. Once a loan has been repaid, a Participant may not obtain
a subsequent loan until after the period of six months from the date
the previous loan has been repaid in full.
11.3 AVAILABILITY OF LOANS. (a) Application for a loan must be made to
the Insurance Company in writing and on a form prescribed by the
Insurance Company. The decisions by the Insurance Company on loan
applications shall be made on a reasonably equivalent, uniform and
nondiscriminatory basis. The Insurance Company may change the terms
of any outstanding loan to the extent required by applicable law.
(b) Loan proceeds shall be distributed from the Contract as soon as
practicable after the end of any month to Participants whose
applications are received by the Insurance Company on or before the
20th day of such month and approved by the Insurance Company by the
end of such month.
11.4 AMOUNT OF LOAN. A loan shall be derived from, and the amount
available for a loan shall be based on, the value of the Participant's
Individual Account based on the most recent account valuation
available to the Insurance Company on the date the loan is approved.
The minimum loan amount is $2,000. The maximum loan available is the
lesser of (1) 50% of the value of the Participant's Individual
Account, or (2) $50,000, reduced by the highest outstanding
balance of any loan to such Participant during the twelve-month period
ending on the day before the loan is made. In no event shall the
amount of any loan made from this Contract to a Participant exceed the
Distribution Value of the Participant's Individual Account, determined
in accordance with Section 6, as of the date of such loan.
35
11.5 TERMS OF LOAN. (a) A loan shall be secured by a lien on the
Participant's Individual Account, to the maximum extent permitted by
the relevant provisions of the Internal Revenue Code and any
regulations or other guidance issued thereunder.
(b) At the beginning of each calendar quarter the Insurance Company
shall determine the rate of interest to be charged to all loans issued
during such quarter. Such rate shall reflect current investment
market conditions and prevailing loan interest levels under this
Contract. The maximum rate charged shall not exceed the current
guaranteed interest rate as provided under Section 4.1(c) of the
Contract plus 2%.
(c) The principal amount and interest on a loan shall be repaid no
less frequently than monthly. Such loan repayment shall be due and
payable to the Insurance Company on the last business day of each
month such loan is outstanding. A Participant may prepay the full
amount of the outstanding loan upon the Participant's separation from
service (as described in Section 5.2(c) of the Contract) or after the
first twelve months following distribution of the loan proceeds to
the Participant. The Participant may elect a repayment term from
one(1) to five (5) years, in twelve (12) month increments, starting
from the last business day of the first month in which the loan amount
is distributed from the contract, except that the Participant may
elect a repayment term of up to ten (10) years, in twelve (12) month
increments, if the loan is for the acquisition of a dwelling unit to
be used as the principal residence of the Participant (determined at
the time the loan is made). The Insurance Company may request any
documents or other information from the Participant the Insurance
Company deems necessary to establish the suitability of a loan
repayment period greater than five (5) years.
(d) Repayment of both principal and interest, less a monthly charge
of .166% of the outstanding loan balance at the beginning of the month
(to be retained by the Insurance Company), shall be credited to the
General Account.
(e) Each loan shall be evidenced by a promissory note, evidencing the
Participant's obligation to repay the borrowed amount to the Contract,
in such form and with such provisions consistent with this Section 11
as are acceptable to the Insurance Company.
36
(f) Under the terms of the loan agreement, an Insurance Company
representative may determine a loan to be in default, and may take
such actions upon default in accordance with Section 11.7 below.
11.6 DISTRIBUTION AND REPAYMENT OF LOAN. (a) The loan proceeds shall be
derived from the Participant's Individual Account attributable to the
General Account. The Participant's Individual Account remaining after
the loan proceeds are distributed to the Participant shall be reduced
by a $100.00 loan processing fee which shall be retained by the
Insurance Company.
(b) Repayments of loans shall be made to the Participant's General
Account.
11.7 EVENTS OF DEFAULT AND ACTIONS UPON DEFAULT. (a) If a Participant
does not repay the principal and account interest with respect to a
loan at the time required by the terms of the loan, the loan shall be
in default and the unpaid balance of the loan, together with interest
thereon, shall become immediately due and payable. In addition to the
foregoing, the loan agreement may include such other events of default
as the Insurance Company shall determine are necessary or desirable.
(b) Upon the default of a loan by any Participant, the Insurance
Company may take such action as it reasonably determines to be
necessary in order to preclude the loss of principal and interest,
including:
(1) demanding repayment of the outstanding amount on the loan
(including principal and accrued interest); or
(2) if the loan is not repaid within 31 days of a request for
repayment, causing a foreclosure of the loan to occur by
distributing the promissory note to the Participant or otherwise
reducing the Participant's Individual Account by the value of the
loan. For these purposes, such loan shall be deemed to have a
fair market value equal to its face value (including accrued but
unpaid interest) reduced by any payments thereon by the
Participant. In all events, however, no foreclosure shall be
made until the earliest time contributions made pursuant to a
salary reduction agreement may be distributed without violating
any provisions of Section 403(b) of the Code and the regulations
issued thereunder.
37
SECTION 12
GENERAL PROVISIONS
12.1 ENTIRE CONTRACT. This Contract and the application for the Contract
together with any tables, schedules, or endorsements which are
attached hereto when issued to the Contractholder, constitute the
entire contract. All statements in the application shall, in the
absence of fraud, be deemed representations and not warranties. No
statement shall avoid this contract or be used in defense of a claim
under it unless contained in the written application for this
contract.
12.2 MODIFICATION OF CONTRACT. (a) This Contract may be modified at any
time by written agreement between the Contractholder and the Insurance
Company. No modification will affect the amount or terms of any
annuities begun prior to the effective date of the modification,
unless it is required to conform this Contract to, or give the
Contractholder the benefit of, any federal or state statutes or any
rule or regulation of the United States Treasury Department.
(b) The Insurance Company reserves the right to modify the Contract,
but only if such modification: (1) is necessary to make the contract
or the Separate Account comply with any law or regulation issued by a
governmental agency to which the Company is subject; (2) is necessary
to assure continued qualification of the contract under section 403(b)
of the Code or other federal or state laws relating to retirement
annuities or annuity contracts; (3) is necessary to reflect a change
in the operation of the Separate Account; (4) provides additional
Separate Account options; or (5) withdraws Separate Account options.
In the event of any such modification, the Insurance Company will
provide notice to the Contractholder, or to the payee(s) during the
annuity period. The Insurance Company may also make appropriate
endorsement in the Contract to reflect such modification.
38
(c) On and after the fifth anniversary of the Contract Effective
Date, the Insurance Company may change from time to time any or all of
the terms of this contract by giving 90 days' advance written notice
of such change to the Contractholder except that the annuity tables,
guaranteed interest rates and Contingent Deferred Sales Charges which
are applicable on the Date of Coverage of a Participant's Individual
Account under this contract will continue to be applicable to all
contributions made to such Individual Account which in any year do not
exceed three times the total contributions made to such Individual
Account during the initial Participant's Contract Year. In addition,
the limitations on the deductions for the mortality, expense risks,
administrative undertakings and the Annual Contract Fee will continue
to apply in all Contract Years.
(d) No modification of this Contract shall be made except over the
signature of the President, a Vice President, an Assistant Vice
President, a Secretary, or an Assistant Secretary.
12.3 NON-PARTICIPATING. This contract does not share in the surplus
earnings of the Company.
12.4 MISSTATEMENT OF AGE. (a) If the age of an annuitant has been
misstated, the amount of the annuity payable by the Insurance Company
shall be that provided by the values under this Contract allocated to
effect such annuity on the basis of the corrected information, without
changing the date of the first payment of such annuity.
(b) Any underpayments by the Insurance Company shall be made up
immediately and any overpayment shall be charged against future
amounts becoming payable.
12.5 REPORTS TO THE CONTRACTHOLDER. The Insurance Company will at the end
of each calendar year quarter, transmit to each Participant a written
statement of account showing the total value of General Account and
Separate Account interests held in each Participant's Individual
Accounts under this Contract.
12.6 REPORTS FROM THE CONTRACTHOLDER. The Contractholder will furnish any
information which the Insurance Company may reasonably require in
order to administer this Contract. If the Contract Owner cannot
furnish any required item of information, the Company may request the
person concerned to furnish the information. The Insurance Company
will not be liable for the fulfillment of any obligations dependent
upon that information until it receives such information.
39
12.7 PROOF OF SURVIVAL. The payment of any annuity benefit will be subject
to evidence that the annuitant is alive on the date such payment is
otherwise due.
12.8 INDIVIDUAL CERTIFICATES. The Insurance Company will issue to each
Participant an individual certificate which evidences that
contributions are to be made on behalf of that Participant under this
Contract. The Insurance Company will also issue an individual annuity
certificate to each individual for whom an annuity is purchased from
the Contract.
12.9 NONFORFEITURE. A Participant shall have a nonforfeitable right to his
Participant's Individual Account at all times.
12.10 DUE PROOF OF DEATH. A certified copy of the death certificate, an
order of a court of competent jurisdiction, a statement from a
physician who attended the deceased or any other proof acceptable to
the Company.
12.11 DEFERRAL OF PAYMENTS FROM GENERAL ACCOUNT. (a) The Insurance Company
has the right to defer payment of a surrender of General Account
values under this contract for a period not to exceed six (6) months
from the date the Participant's request is received in the Home Office
of the Company. If the Insurance Company defers payment as specified
above, the deferred amount will be credited with interest at the rate
of four percent (4%) from the date such request is deferred to the
date the requested amount of the surrender is paid.
(b) A deferral of any payment by the Insurance Company of General
Account values may be made only to the extent such deferral will not
cause a surrender of a Participant's Individual Account to fail to
satisfy section 401(a)(9) of the Code.
12.12 PREMIUM TAXES. For any Contract subject to a Premium Tax, the
Insurance Company will pay the taxes when imposed by the applicable
taxing authority. The Insurance Company, in its sole discretion, will
deduct the taxes from Contributions when received, from the proceeds
at surrender, or from the amount applied to effect an Annuity at the
time annuity payments commence.
40
12.13 PARTICIPATION AND BENEFICIARY RIGHTS. The rights enforceable under
the Contract with respect to a Participant's Individual Account
shall be exercised solely by the Participant or the Participant's
designated Beneficiary. Where the Contract provides that these rights
are enforceable by the Contractholder, they shall be exercised by the
Contractholder solely in its capacity as the authorized representative
of the Participant or the Participant's Beneficiary, and with such
Participant's or Beneficiary's direction and approval.
12.14 NON-TRANSFERABILITY. Amounts held in a Participant's Individual
Account are nontransferable and cannot be sold, assigned, or pledged
as security, except as otherwise permitted under the Code and the
terms of this Contract.
41
SECTION 13
SUSPENSION AND TERMINATION PROVISIONS
13.1 SUSPENSION OF CONTRACT. This contract may be suspended by the
Contractholder by written notice to the Insurance Company at its Home
Office least 90 days prior to the effective date of such suspension
The Contract will be suspended automatically on a Contract Year
anniversary if the Contractholder fails to assent to any
modifications, as described under Modification of the Contract in
Section 12 which would have been effective on or before that contract
anniversary. On suspension, contributions will be accepted by the
Insurance Company on behalf of Participants covered under the Contract
prior to the date of suspension, but no contributions will be accepted
on behalf of new Participants. Suspension of the Contract will not
affect payments to be made by the Insurance Company under an annuity
which commenced prior to the date of suspension.
13.2 CHANGE TO PAID-UP CONTRACT. The Contract will be deemed paid-up
within 30 days after the end of the Contract Year if the
Contractholder has not remitted a contribution to the Insurance
Company during the preceding twelve-month period. Effective with a
change to paid-up status, no further contributions will be accepted by
the Insurance Company and each Participant will be considered an
inactive Participant until the commencement of annuity payments on his
behalf or until the value of a Participant's Individual Account is
disbursed or applied in accordance with the Termination Provisions.
13.3 An annuity effected under this contract may not be surrendered for its
termination value after the commencement of annuity payments.
13.4 TIMING OF CASH DISTRIBUTIONS FROM SEPARATE ACCOUNT. When all or any
part of the Separate Account value of a Participant's Individual
Account is taken by the Participant in the form of a cash settlement,
payment will be made within seven (7) days following the day the
request is received, except as the Company may be permitted to defer
payment under the Investment Company Act of 1940.
13.5 TERMINATION PROVISIONS. (a) On termination of contributions to the
Contract by the Contractholder on behalf of a Participant prior to the
selected Annuity Commencement Date for such Participant, the
Participant shall have the following options:
(1) To continue the Participant's Individual Account under the
Contract. When the selected Xxxxxxx Commencement Date arrives,
the Participant shall begin
42
to receive payments pursuant to the selected Annuity Option under
Section 9.2 of the Contract. Prior to the Annuity Commencement
Date, the Participant may request a distribution in accordance
with Section 5.2 of the Contract.
(2) To request an immediate distribution pursuant to one of the
settlement options described in Section 9 of the Contract,
provided such distribution otherwise satisfies the terms of
Section 5 of this Contract.
(3) To transfer an amount to another plan as provided in Section
5.3 of the Contract.
(b) This Contract shall be considered terminated when the last
payment due a Participant or Beneficiary has been paid and not assets
remain invested hereunder.
43
ANNUITY PURCHASE RATE
TABLE A
Fixed Annuity
Amount Required To Purchase $1.00 of Yearly Retirement Annuity
ANNUITANT'S LIFE LIFE ANNUITY WITH 50% CONTINGENT ANNUITY
AGE* ANNUITY 120 PAYMENTS CERTAIN AGE OF CONTINGENT ANNUITANT
-------------------------------------------------------------------------------
55 60 65 70
-----------------------------
55 18.97 19.18 20.35 19.96 19.65 19.41
60 17.06 17.37 19.00 18.50 18.06 17.72
65 14.98 15.47 17.65 17.03 16.46 15.99
70 12.81 13.59 16.33 15.60 14.90 14.28
*Age nearest birthday on date premium is determined.
Amounts required for ages and forms of annuity not shown will be furnished by
The Hartford upon request. The rates applied to purchase other forms of
annuities will be the actuarial equivalent of the rates in this Annuity Purchase
Rate Table A, as determined by The Hartford.
Annuity Purchase Rate Table A is based on the 1983 IAM Mortality Table, set back
one year, and a net investment rate of 3% per annum.
VARIABLE ANNUITY PURCHASE RATE
TABLE B
Amount of First Monthly Payment For Each $1000 Applied
FIRST, SECOND AND THIRD OPTIONS:
--------------------------------------------------------------------------------
LIFE ANNUITY LIFE ANNUITY LIFE ANNUITY
PAYEE'S LIFE WITH WITH WITH UNIT
AGE* ANNUITY 120 PAYMENTS 180 PAYMENTS 240 PAYMENTS REFUND
CERTAIN CERTAIN CERTAIN ANNUITY
--------------------------------------------------------------------------------
50 4.62 4.58 4.54 4.48 4.48
55 4.98 4.92 4.85 4.75 4.77
60 5.46 5.36 5.24 5.06 5.15
65 6.14 5.94 5.70 5.38 5.64
70 7.08 6.67 6.20 5.66 6.28
--------------------------------------------------------------------------------
* Age nearest birthday on date premium applied.
Amounts required for ages and forms of annuity not shown will be furnished by
The Hartford upon request. The rates applied to purchase other forms of
annuities will be the actuarial equivalent of the rates in this Annuity Purchase
Rate Table B, as determined by The Hartford.
Annuity Purchase Rate Table B is based on the 1983 IAM Mortality Table, set back
one year, and an assumed interest rate (AIR) of 4%.
SECOND AND SUBSEQUENT ANNUITY PAYMENTS ARE BASED ON THE INVESTMENT EXPERIENCE OF
A SEPARATE ACCOUNT AND ARE VARIABLE AND NOT GUARANTEED AS TO A FIXED DOLLAR
AMOUNT.
APPLICATION FOR
INDIVIDUALLY ALLOCATED [LOGO]
GROUP ANNUITY CONTRACT ITT HARTFORD
Hartford Life Insurance Company
P.O. Box 2999
Hartford, CT 06104-2999
Application is hereby made for an Individually Allocated Group Annuity Contract:
1. Applicant-Contractholder:
___________________________________________________________________________
___________________________________________________________________________
Street or P.O. Box
___________________________________________________________________________
City State Zip Code
2. Nature of Applicant's Business: __________________________________________
3. Requested Effective Date of Contract: _____________________________________
4. Special Requests: ________________________________________________________
___________________________________________________________________________
IT IS UNDERSTOOD THAT ALL PAYMENTS AND VALUES PROVIDED BY THE CONTRACT WHEN
BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT.
Dated at: ________________________________ this____day of_______________,19___
For________________________________
(Contractholder)
__________________________________________
Registered Representative (Licensed Agent) By_________________________________
_________________________________
(Title)
