AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 6, 2006
REGISTRATION NO. 333-104036
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
POST-EFFECTIVE AMENDMENT NO. 3
to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------
PRUCO LIFE INSURANCE COMPANY
----------------------------
(Exact Name of Registrant)
ARIZONA
(State or other jurisdiction of incorporation or organization)
22-194455
(I.R.S. Employer Identification Number)
c/o PRUCO LIFE INSURANCE COMPANY
213 WASHINGTON STREET
NEWARK, NEW JERSEY 07102-2992
(973) 802-7333
(Address and telephone number of principal executive offices)
THOMAS C. CASTANO
ASSISTANT SECRETARY
PRUCO LIFE INSURANCE COMPANY
213 WASHINGTON STREET
NEWARK, NEW JERSEY 07102-2992
(973) 802-4708
(Name, address, and telephone number of agent for service)
Copies to:
C. CHRISTOPHER SPRAGUE
VICE PRESIDENT,
CORPORATE COUNSEL
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
213 WASHINGTON STREET
NEWARK, NEW JERSEY 07102-2992
(973) 802-6997
================================================================================
Approximate date of commencement of proposed sale to the public -- Immediately
upon effectiveness
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following
box:..............[ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box ........................[x]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering............[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering..........[ ]
If this Form is a registration statement pursuant to General Instruction I.D. or
a post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box........[ ]
If this Form is a post-effective amendment to a registration statement filed
pursuant to General Instruction I.D. filed to register additional securities or
additional classes of securities pursuant to Rule 413(b) under the Securities
Act, check the following box.........[ ]
<Table>
<Caption>
Calculation of Registration fee
Proposed Proposed
Title of each Amount maximum maximum Amount
class of to offering aggregate of
securities to be price per offering registration
be registered registered* unit* price fee **
------------- ----------- ----- ----- ------
Market value
adjustment
annuity contracts
(or modified
guaranteed
annuity
contracts) $500,000,000 $500,000,000 $-0-
</Table>
- ----------
* Securities are not issued in predetermined units
** Registration fee for these securities, in the amount of $46,000, was paid
at the time the securities were originally registered on Form S-1 as filed by
Pruco Life Insurance Company on May 31, 2002.
Prudential Investment Management Services LLC, the principal underwriter of
these contracts under a "best efforts" arrangement, will be reimbursed by Pruco
Life Insurance Company for its costs and expenses incurred in connection with
the sale of these contracts.
The risk factors section appears in Section 9 of the Summary of the prospectus.
The exhibit index appears in Part II of this registration statement.
STRATEGIC PARTNERS(SM)
HORIZON ANNUITY
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PROSPECTUS: MAY 1, 2006
THIS PROSPECTUS DESCRIBES A MARKET VALUE ADJUSTED INDIVIDUAL ANNUITY CONTRACT
OFFERED BY PRUCO LIFE INSURANCE COMPANY (PRUCO LIFE). PRUCO LIFE OFFERS SEVERAL
DIFFERENT ANNUITIES WHICH YOUR REPRESENTATIVE MAY BE AUTHORIZED TO OFFER TO YOU.
EACH ANNUITY HAS DIFFERENT FEATURES AND BENEFITS THAT MAY BE APPROPRIATE FOR YOU
BASED ON YOUR FINANCIAL SITUATION, YOUR AGE AND HOW YOU INTEND TO USE THE
ANNUITY. THE DIFFERENT FEATURES AND BENEFITS INCLUDE VARIATIONS IN DEATH BENEFIT
PROTECTION AND THE ABILITY TO ACCESS YOUR ANNUITY'S CONTRACT VALUE. THE FEES AND
CHARGES UNDER THE ANNUITY CONTRACT AND COMPENSATION PAID TO YOUR REPRESENTATIVE
MAY ALSO BE DIFFERENT BETWEEN EACH ANNUITY. IF YOU ARE PURCHASING THE CONTRACT
AS A REPLACEMENT FOR VARIABLE ANNUITY OR VARIABLE LIFE COVERAGE, YOU SHOULD
CONSIDER, AMONG OTHER THINGS, ANY SURRENDER OR PENALTY CHARGES YOU MAY INCUR
WHEN REPLACING YOUR EXISTING COVERAGE. PRUCO LIFE IS A WHOLLY OWNED SUBSIDIARY
OF THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. PRUCO LIFE IS LOCATED AT 213
WASHINGTON STREET, NEWARK, NJ 07102-2992, AND CAN BE CONTACTED BY CALLING
800-944-8786. PRUCO LIFE ADMINISTERS THE STRATEGIC PARTNERS HORIZON ANNUITY
CONTRACTS (SEE FILE NO. 333-104036) AT THE PRUDENTIAL ANNUITY SERVICE CENTER,
P.O. BOX 7960, PHILADELPHIA, PA 19176. YOU CAN CONTACT THE PRUDENTIAL ANNUITY
SERVICE CENTER BY CALLING, TOLL-FREE, (888) PRU-2888.
PLEASE READ THIS PROSPECTUS
- ------------------------------------------------------------
- --------------------------------------------------------------------------------
Please read this prospectus before purchasing a Strategic Partners Horizon
Annuity contract and keep it for future reference. The Risk Factors section
appears in Section 9 of the Summary.
THE SEC HAS NOT DETERMINED THAT THIS CONTRACT IS A GOOD INVESTMENT, NOR HAS THE
SEC DETERMINED THAT THIS PROSPECTUS IS COMPLETE OR ACCURATE. IT IS A CRIMINAL
OFFENSE TO STATE OTHERWISE. INVESTMENT IN A MARKET VALUE ADJUSTED ANNUITY
CONTRACT IS SUBJECT TO RISK, INCLUDING THE POSSIBLE LOSS OF YOUR MONEY. AN
INVESTMENT IN STRATEGIC PARTNERS HORIZON ANNUITY IS NOT A BANK DEPOSIT AND IS
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
STRATEGIC PARTNERS(SM) IS A SERVICE MARK OF THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA ORD01124
CONTENTS
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<Table>
PART I: STRATEGIC PARTNERS HORIZON ANNUITY PROSPECTUS
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SUMMARY
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Glossary........................................... 4
Summary............................................ 5
Risk Factors....................................... 6
PART II: STRATEGIC PARTNERS HORIZON ANNUITY PROSPECTUS
------------------------------------------------------------
Section 1: What Is The Strategic Partners Horizon
Annuity?............................................... 8
Short Term Cancellation Right Or "Free Look"....... 8
Section 2: What Guarantee Periods Can I Choose?......... 9
Guarantee Periods.................................. 9
Market Value Adjustment............................ 10
Section 3: What Kind Of Payments Will I Receive During
The Income Phase? (Annuitization)...................... 11
Payment Provisions................................. 11
Option 1: Annuity Payments For A Fixed
Period........................................ 11
Option 2: Life Annuity With 120 Payments (10
Years)........................................ 11
Option 3: Interest Payment Option.............. 11
Option 4: Other Annuity Options................ 12
Tax Considerations............................. 12
Section 4: What Is The Death Benefit?................... 13
Beneficiary........................................ 13
Calculation Of The Death Benefit................... 13
Joint Ownership Rules.............................. 13
Section 5: How Can I Purchase A Strategic Partners
Horizon Annuity Contract?.............................. 14
Purchase Payment................................... 14
Allocation Of Purchase Payment..................... 14
Section 6: What Are The Expenses Associated With The
Strategic Partners Horizon Annuity Contract?........... 15
Withdrawal Charge.................................. 15
Waiver Of Withdrawal Charge For Critical Care...... 16
Taxes Attributable To Premium...................... 16
Section 7: How Can I Access My Money?................... 17
Automated Withdrawals.............................. 17
Section 8: What Are The Tax Considerations Associated
With The Strategic Partners Horizon Annuity
Contract?.............................................. 18
Contracts Owned By Individuals (Not Associated With
Tax-Favored Retirement Plans)...................... 18
Contracts Held By Tax-Favored Plans................ 20
Section 9: Other Information............................ 25
Pruco Life Insurance Company....................... 25
Sale And Distribution Of The Contract.............. 25
Litigation......................................... 26
Assignment......................................... 27
Householding....................................... 27
Indemnification.................................... 27
Market-Value Adjustment Formula.................... 28
</Table>
2
PART I SUMMARY
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STRATEGIC PARTNERS HORIZON ANNUITY PROSPECTUS
3
PART I
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SUMMARY
GLOSSARY
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WE HAVE TRIED TO MAKE THIS PROSPECTUS AS EASY TO READ AND UNDERSTAND AS
POSSIBLE. BY THE NATURE OF THE CONTRACT, HOWEVER, CERTAIN TECHNICAL WORDS OR
TERMS ARE UNAVOIDABLE. WE HAVE IDENTIFIED THE FOLLOWING AS SOME OF THE KEY WORDS
OR TERMS. OTHER DEFINED TERMS ARE SET FORTH IN YOUR CONTRACT.
ACCUMULATION PHASE
The period that begins with the contract date (which we define below) and ends
when you start receiving income payments, or earlier if the contract is
terminated through a full withdrawal or payment of a death benefit.
ADJUSTED CONTRACT VALUE
When you begin receiving income payments, the value of your contract minus any
charge we impose for premium taxes and withdrawal charges, adjusted for any
market value adjustment.
ANNUITANT
The person whose life determines the amount of income payments that we will pay.
If the annuitant dies before the annuity date, the co-annuitant (if any) becomes
the annuitant if the contract's requirements for changing the annuity date are
met. If, upon the death of the annuitant, there is no surviving eligible
co-annuitant, and the owner is not the annuitant, then the owner becomes the
annuitant.
ANNUITY DATE
The date when income payments are scheduled to begin. You must have our
permission to change the annuity date. If the co-annuitant becomes the annuitant
due to the death of the annuitant, and the co-annuitant is older than the
annuitant, then the annuity date will be based on the age of the co-annuitant,
provided that the contract's requirements for changing the annuity date are met
(e.g., the co-annuitant cannot be older than a specified age). If the
co-annuitant is younger than the annuitant, then the annuity date will remain
unchanged.
BENEFICIARY
The person(s) or entity you have chosen to receive a death benefit.
BUSINESS DAY
A day on which the New York Stock Exchange is open for business. Our business
day generally ends at 4:00 p.m. Eastern time.
CO-ANNUITANT
The person shown on the contract data pages who becomes the annuitant (if
eligible) upon the death of the annuitant if the requirements for changing the
annuity date are met. No co-annuitant may be designated if the owner is a
non-natural person.
CONTRACT DATE
The date we accept your initial purchase payment and all necessary paperwork in
good order at the Prudential Annuity Service Center. Contract anniversaries are
measured from the contract date. A contract year starts on the contract date or
on a contract anniversary.
CONTRACT OWNER, OWNER OR YOU
The person entitled to the ownership rights under the contract.
CONTRACT SURRENDER VALUE
This is the total value of your contract adjusted by any market-value
adjustment, minus any withdrawal charge(s) and premium taxes.
CONTRACT VALUE
The total value of the amount in a contract allocated to a guarantee period as
of a particular date.
DEATH BENEFIT
If a death benefit is payable, the beneficiary you designate will receive the
contract value as the death benefit. If the contract is owned by an entity (e.g.
a corporation or trust), rather than by an individual, then we will pay the
death benefit upon the death of the annuitant. See Section 4, "What Is The Death
Benefit?"
GOOD ORDER
An instruction received at the Prudential Annuity Service Center, utilizing such
forms, signatures and dating as we require, which is sufficiently clear that we
do not need to exercise any discretion to follow such instructions.
GUARANTEE PERIOD
A period of time during which your invested purchase payment earns interest at
the declared rate. We currently make available guarantee periods equal to any or
all of the following: 1 year (currently available only as a renewal option), 3
years, 5 years, 7 years, and 10 years.
INCOME OPTIONS
Options under the contract that define the frequency and duration of income
payments. In your contract, we also refer to these as payout or annuity options.
INVESTED PURCHASE PAYMENT
Your purchase payment (which we define below) less any deduction we make for any
tax charge. In addition to the initial invested purchase payment, we allow you
to make additional purchase payments during the 30 days preceding the end of a
guarantee period.
JOINT OWNER
The person named as the joint owner, who shares ownership rights with the owner
as defined in the contract. The joint owner may be the owner's spouse, but need
not be.
PRUDENTIAL ANNUITY SERVICE CENTER
For general correspondence: P.O. Box 7960, Philadelphia, PA, 19176. For express
overnight mail: 2101 Welsh Road, Dresher, PA 19025. The phone number is (888)
PRU-2888. Prudential's Web site is www.prudential.com.
PURCHASE PAYMENTS
The amount of money you pay us to purchase the contract, as well as any
additional payment you make.
TAX DEFERRAL
This is a way to increase your assets without currently being taxed. Generally,
you do not pay taxes on your contract earnings until you take money out of your
contract. You should be aware that tax favored plans (such as IRAs) already
provide tax deferral regardless of whether they invest in annuity contracts. See
Section 8, "What Are The Tax Considerations Associated With The Strategic
Partners Horizon Annuity Contract?"
4
PART I
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SUMMARY
SUMMARY OF SECTIONS 1-9
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FOR A MORE COMPLETE DISCUSSION OF THE FOLLOWING TOPICS, SEE THE CORRESPONDING
SECTION IN THE PROSPECTUS.
SECTION 1
WHAT IS THE STRATEGIC PARTNERS HORIZON ANNUITY?
This market value adjusted annuity contract, offered by Pruco Life, is a
contract between you, as the owner, and us. The contract is intended for
retirement savings or other long-term investment purposes and provides a death
benefit and guaranteed income options.
While your money remains in the contract for the full guarantee period, your
principal amount is guaranteed and the minimum interest amount that your money
will earn is dictated by applicable state law. Payments allocated to the
contract are held as a separate pool of assets, but the income, gains or losses
experienced by these assets are not directly credited or charged against the
contracts. As a result, the strength of our guarantees under the contract are
based on the overall financial strength of Pruco Life.
The contract, like all deferred annuity contracts, has two phases: the
accumulation phase and the income phase. During the accumulation phase, earnings
grow on a tax-deferred basis and are taxed as income when you make a withdrawal.
The income phase starts when you begin receiving regular payments from your
contract. The amount of money you are able to accumulate in your contract during
the accumulation phase will help determine the amount of the payments you will
receive during the income phase. Other factors will affect the amount of your
payments such as age, gender and the payout option you selected.
We may amend the contract as permitted by law. For example, we may add new
features to the contract. Subject to applicable law, we determine whether or not
to make such contract amendments available to contracts that already have been
issued.
Free Look. If you change your mind about owning Strategic Partners Horizon
Annuity, you may cancel your contract within 10 days after receiving it (or
whatever period is required by applicable law).
SECTION 2
WHAT GUARANTEE PERIODS CAN I CHOOSE?
You can allocate your initial purchase payment to one of the guarantee periods
available under the contract. We have the right under the contract to offer one
or more of the following guarantee periods: 1 year (currently available only as
a renewal option), 3 years, 5 years, 7 years, or 10 years, and we may offer
other guarantee periods in the future. At any time, we may offer any or all of
these guarantee periods. You may not allocate your purchase payment to more than
one guarantee period.
SECTION 3
WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE INCOME PHASE? (ANNUITIZATION)
If you want to receive regular income from your annuity, you can choose one of
several options, including guaranteed payments for the annuitant's lifetime.
Once you begin receiving regular payments, you cannot change your payment plan.
SECTION 4
WHAT IS THE DEATH BENEFIT?
If the sole owner or the first of the joint owners dies, the designated
person(s) or the beneficiary will receive the contract value as the death
benefit. If the contract is owned by an entity (e.g., a corporation or trust),
rather than by an individual, then we will pay the death benefit upon the death
of the annuitant.
SECTION 5
HOW CAN I PURCHASE A STRATEGIC PARTNERS HORIZON ANNUITY CONTRACT?
You can purchase this contract, under most circumstances, with a minimum initial
purchase payment of $5,000, but not greater than $5 million, absent our prior
approval. We allow you to make additional purchase payments only during the 30
days immediately preceding the end of a guarantee period. Your representative
can help you fill out the proper forms.
5
SUMMARY OF SECTIONS 1-9 CONTINUED
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PART I
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SUMMARY
SECTION 6
WHAT ARE THE EXPENSES ASSOCIATED WITH THE STRATEGIC PARTNERS HORIZON ANNUITY
CONTRACT?
There are a few states/jurisdictions that assess a premium tax on us when you
begin receiving regular income payments from your annuity. In those states, we
deduct a charge designed to approximate this tax, which can range from 0-3.5% of
your contract value.
During the accumulation phase, if you withdraw money, you may have to pay a
withdrawal charge on all or part of the withdrawal. The withdrawal charge that
we impose depends on the guarantee period from which you are withdrawing your
money. The withdrawal charge ranges from 0%-7%. You also will be subject to a
market value adjustment if you make a withdrawal prior to the end of a guarantee
period.
SECTION 7
HOW CAN I ACCESS MY MONEY?
You may withdraw money at any time during the accumulation phase. You may,
however, be subject to income tax and, if you make a withdrawal prior to age
59 1/2, an additional tax penalty as well. Each contract year after the first,
you may withdraw without charge, an amount equal to the interest you earned
during the previous contract year. Withdrawals greater than that amount will be
subject to a withdrawal charge. A market-value adjustment may also apply.
SECTION 8
WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED WITH THE STRATEGIC PARTNERS HORIZON
ANNUITY CONTRACT?
Your earnings are generally not taxed until withdrawn. If you withdraw money
during the accumulation phase, the tax laws first treat the withdrawals as a
withdrawal of earnings, which are taxed as ordinary income. If you are younger
than age 59 1/2 when you withdraw money, you may be charged a 10% federal tax
penalty on the earnings in addition to ordinary taxation. A portion of the
payments you receive during the income phase is considered a partial return of
your original investment. Generally, all amounts withdrawn from an Individual
Retirement Annuity (IRA) contract (excluding Roth IRAs) are taxable and subject
to the 10% penalty if withdrawn prior to age 59 1/2.
SECTION 9
OTHER INFORMATION
This contract is issued by Pruco Life Insurance Company, a subsidiary of The
Prudential Insurance Company of America, and sold by registered representatives
of affiliated and unaffiliated broker/dealers.
RISK FACTORS
There are various risks associated with an investment in the Strategic Partners
Horizon Annuity that we summarize below.
ISSUER RISK. Your Strategic Partners Horizon Annuity is available under a
contract issued by Pruco Life, and thus is backed by the financial strength of
that company. If Pruco Life were to experience significant financial adversity,
it is possible that Pruco Life's ability to pay interest and principal under the
Strategic Partners Horizon Annuity could be impaired.
RISKS RELATED TO CHANGING INTEREST RATES. You do not participate directly in
the investment experience of the bonds and other instruments that Pruco Life
holds to support the Strategic Partners Horizon Annuity. Nonetheless, the market
value adjustment formula (which is detailed in the appendix to this prospectus)
reflects the effect that prevailing interest rates have on those bonds and other
instruments. If you need to withdraw your money during a period in which
prevailing interest rates have risen above their level when you made your
purchase, you will experience a "negative" market value adjustment. When we
impose this market value adjustment, it could result in the loss of both the
interest you have earned and a portion of your purchase payments. Thus, before
you commit to a particular guarantee period, you should consider carefully
whether you have the ability to remain invested throughout the guarantee period.
In addition, we cannot, of course, assure you that the Strategic Partners
Horizon Annuity will perform better than another investment that you might have
made.
RISKS RELATED TO THE WITHDRAWAL CHARGE. We may impose withdrawal charges that
range as high as 7%. If you anticipate needing to withdraw your money prior to
the end of a guarantee period, you should be prepared to pay the withdrawal
charge that we will impose.
6
PART II SECTIONS 1-9
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STRATEGIC PARTNERS HORIZON ANNUITY PROSPECTUS
7
PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
1:
WHAT IS THE STRATEGIC PARTNERS HORIZON
ANNUITY?
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THE STRATEGIC PARTNERS HORIZON ANNUITY IS A CONTRACT BETWEEN YOU, THE OWNER, AND
US, THE INSURANCE COMPANY, PRUCO LIFE INSURANCE COMPANY (PRUCO LIFE, WE OR US).
Under our contract or agreement, in exchange for your payment to us, we promise
to pay you a guaranteed income stream that can begin any time after the second
contract anniversary. This time period may differ in certain states. Your
annuity is in the accumulation phase until you decide to begin receiving annuity
payments. The date you begin receiving annuity payments is the annuity date. On
the annuity date, your contract switches to the income phase.
This annuity contract benefits from tax deferral. Tax deferral means that you
are not taxed on earnings or appreciation on the assets in your contract until
you withdraw money from your contract. (If you purchase the annuity contract in
a tax-favored plan such as an IRA, that plan generally provides tax deferral
even without investing in an annuity contract. Therefore, before purchasing an
annuity in a tax-favored plan, you should consider whether its features and
benefits beyond tax deferral meet your needs and goals. You may also want to
consider the relative features, benefits and costs of these annuities compared
with any other investment that you may use in connection with your retirement
plan or arrangement.)
Strategic Partners Horizon Annuity allows you to allocate a purchase payment
to one of several guarantee periods that we offer at the time. As the owner of
the contract, you have all of the decision-making rights under the contract. You
will also be the annuitant unless you designate someone else. The owner is the
person upon whose death during the accumulation phase, the death benefit
generally is payable. The annuitant is the person whose life is used to
determine the amount of annuity payments and how long the payments will
continue. On and after the annuity date, the annuitant may not be changed.
The beneficiary is the person(s) or entity designated to receive any death
benefit if the owner (or first-to-die of joint owners) dies during the
accumulation phase. You may change the beneficiary any time prior to the annuity
date by making a written request to us. Your request becomes effective when we
approve it.
SHORT TERM CANCELLATION RIGHT OR "FREE LOOK"
If you change your mind about owning Strategic Partners Horizon Annuity, you may
cancel your contract within 10 days after receiving it (or whatever period may
be required by applicable law). You can request a refund by returning the
contract either to the representative who sold it to you, or to the Prudential
Annuity Service Center at the address shown on the first page of this
prospectus. You will receive, depending on applicable state law:
- - Your full purchase payment less any applicable federal and state income tax
withholding; or
- - The amount your contract is worth as of the day we receive your request, less
any applicable federal and state income tax withholding. This amount may be
more or less than your original payment.
We impose neither a withdrawal charge nor any market value adjustment if you
cancel your contract under this provision. To the extent dictated by state law,
we will include in your refund the amount of any fees and charges that we
deducted.
8
PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
2:
WHAT GUARANTEE PERIODS
CAN I CHOOSE?
- --------------------------------------------------------------------------------
THE CONTRACT GIVES YOU THE CHOICE OF ALLOCATING YOUR PURCHASE PAYMENT TO ONE OF
THE GUARANTEE PERIODS THAT WE ARE OFFERING AT THE TIME.
GUARANTEE PERIODS
Under each Strategic Partners Horizon Annuity contract, we have the right to
offer one or more of several guarantee periods. These guarantee periods are 1
year (currently available only as a renewal option), 3 years, 5 years, 7 years,
or 10 years in length. In the future, we may offer other guarantee periods on
substantially the same terms as described in this prospectus. We are not
obligated to offer more than one guarantee period at any time. We will apply
your purchase payment to the guarantee period you have chosen. You must allocate
all of your initial purchase payment to a single guarantee period.
We declare the interest rate for each available guarantee period
periodically, but we guarantee that we will declare at least a minimum interest
rate, in the amount dictated by applicable state law. You will earn interest on
your invested purchase payment at the rate that we have declared for the
guarantee period you have chosen.
In addition to the basic interest, we also may pay additional interest with
respect to guarantee periods other than the one year and three year periods. The
amount of the additional interest varies according to the amount of your
purchase payment. Specifically, we will pay additional interest equal to 0.50%
annually for a purchase payment of $25,000 to $74,999, and 1.00% annually for a
purchase payment of $75,000 or more.
If we grant additional interest to you, you will earn that interest only
during the first year of your contract (and, in most states, during the first
year of the initial renewal guarantee period, other than the one and three year
periods). We are not obligated to offer this additional interest continuously,
meaning that we reserve the right to offer additional interest only during
limited time periods of our choosing. We also reserve the right to change the
amount of the additional interest.
We express interest rates as annual rates, although we credit interest within
each guarantee period on a daily basis. The daily interest that we credit is
equal to the pro rated portion of the interest that would be earned on an annual
basis. We credit interest from the business day on which your purchase payment
is received in good order at the Prudential Annuity Service Center until the
earliest to occur of any of the following events: (a) full surrender of the
Contract, (b) commencement of annuity payments or settlement, (c) cessation of
the guarantee period, or (d) death of the first to die of the owner and joint
owner (or annuitant, for entity-owned contracts).
During the 30-day period immediately preceding the end of a guarantee period,
we allow you to do any of the following, without the imposition of the
withdrawal charge or market value adjustment: (a) surrender the contract, in
whole or in part, (b) allocate the contract value to another guarantee period
available at that time (provided that the new guarantee period ends prior to the
contract anniversary next following the annuitant's 95th birthday and that you
reinvest at least $2,000), or (c) apply the adjusted contract value to the
annuity or settlement option of your choice. If we do not receive instructions
from you concerning the disposition of the contract value in your maturing
guarantee period, we will reinvest the contract value in a guarantee period
having the same duration as the guarantee period that matured (provided that the
new guarantee period ends prior to the contract anniversary next following the
annuitant's 95th birthday and that you reinvest at least $2,000). If any
available new guarantee period would end on or after the contract anniversary
next following the annuitant's 95th birthday, or if the annuitant is 91 years
old at the end of the guarantee period, then we will make only the one year
guarantee period available as the renewal period. We will not impose a
withdrawal charge on amounts you withdraw from the one year guarantee period
described in the immediately preceding sentence, although such a withdrawal
would be subject to a market value adjustment.
9
2:
WHAT GUARANTEE PERIODS CAN I CHOOSE? CONTINUED
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PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
MARKET VALUE ADJUSTMENT
When you allocate a purchase payment to a guarantee period, we use that money to
buy and sell securities and other instruments to support our obligation to pay
interest. Generally, we buy bonds for this purpose. The duration of the bonds
and other instruments that we buy with respect to a particular guarantee period
is influenced significantly by the length of the guarantee period. For example,
we typically would acquire longer-duration bonds with respect to the 10 year
guarantee period than we do for the 3 year guarantee period. The value of these
bonds is affected by changes in interest rates, among other factors. The market
value adjustment that we assess against your contract value if you withdraw
prior to the end of a guarantee period involves our attributing to you a portion
of our investment experience on these bonds and other instruments.
For example, if you make a full withdrawal when interest rates have risen
since the time of your investment, the bonds and other investments in the
guarantee period likely would have decreased in value, meaning that we would
impose a "negative" market value adjustment on you (i.e., one that results in a
reduction of the withdrawal proceeds that you receive). For a partial
withdrawal, we would deduct a negative market value adjustment from your
remaining contract value. Conversely, if interest rates have decreased, the
market value adjustment could be positive.
Other things you should know about the market value adjustment include the
following:
- - We determine the market value adjustment according to a mathematical formula,
which is set forth at the end of this prospectus under the heading
"Market-Value Adjustment Formula." In that section of the prospectus, we also
provide hypothetical examples of how the formula works.
- - A negative market value adjustment could cause you to lose not only the
interest you have earned but also a portion of your principal.
- - You may withdraw (after the first contract year), without the imposition of
any market value adjustment, an amount equal to the interest earned under
your contract during the immediately preceding contract year.
- - In addition to imposing a market value adjustment on withdrawals, we also
will impose a market value adjustment on the contract value you apply to an
annuity or settlement option, except if you annuitize during the 30-day
period preceding the end of a guarantee period (See Section 3 for details).
YOU SHOULD REALIZE, HOWEVER, THAT APART FROM THE MARKET VALUE ADJUSTMENT, THE
VALUE OF THE BENEFITS UNDER YOUR CONTRACT DOES NOT DEPEND ON THE INVESTMENT
PERFORMANCE OF THE BONDS AND OTHER INSTRUMENTS THAT WE HOLD WITH RESPECT TO YOUR
GUARANTEE PERIOD. APART FROM THE EFFECT OF ANY MARKET VALUE ADJUSTMENT, WE DO
NOT PASS THROUGH TO YOU THE GAINS OR LOSSES ON THE BONDS AND OTHER INSTRUMENTS
THAT WE HOLD IN CONNECTION WITH A GUARANTEE PERIOD.
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PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
3:
WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE
INCOME PHASE? (ANNUITIZATION)
- --------------------------------------------------------------------------------
PAYMENT PROVISIONS
We can begin making annuity payments any time after the second contract
anniversary (or as required by state law if different). Annuity payments must
begin no later than the contract anniversary coinciding with or next following
the annuitant's 95th birthday. If you begin annuity payments or commence Option
3 at a time other than the 30-day period prior to the end of a guarantee period,
then:
- - We will impose both a withdrawal charge, if applicable, and a market value
adjustment if you choose an annuity option with a fixed period of fewer than
10 years or Option 3. (If your adjusted contract value is allocated to the
one year guarantee period, we will impose only a market value adjustment).
- - We will impose a market value adjustment, but not a withdrawal charge, if you
choose a life annuity or an annuity option with a fixed period of at least 10
years.
We make the income plans described below available before the annuity date.
These plans are called annuity options. You must choose an annuity option at
least 30 days in advance of the annuity date. If you do not, we will select
Option 2 below on your behalf unless prohibited by applicable law. During the
income phase, all of the annuity options under this contract are fixed annuity
options. GENERALLY, ONCE THE ANNUITY PAYMENTS BEGIN, THE ANNUITY OPTION CANNOT
BE CHANGED AND YOU CANNOT MAKE WITHDRAWALS.
If the annuitant dies or assigns the contract, and the new annuitant is older
than the original annuitant, then the annuity date will be based on the new
annuitant's age. If the annuitant dies or assigns the contract, and the new
annuitant is younger than the original annuitant, then the annuity date will
remain unchanged. In no event, however, may an original or revised annuity date
be later than the contract anniversary next following the annuitant's 95th
birthday.
OPTION 1
ANNUITY PAYMENTS FOR A FIXED PERIOD
Under this option, we will make equal payments for the period chosen, up to 25
years (but no less than 5 years). The annuity payments may be made monthly,
quarterly, semi-annually, or annually, as you choose, for the fixed period. If
the annuitant dies during the income phase, a lump sum payment generally will be
made to the beneficiary. The amount of the lump sum payment is determined by
calculating the present value of the unpaid future payments. This is done by
using the interest rate used to compute the actual payments. The interest rate
will be at least 3% a year.
OPTION 2
LIFE ANNUITY WITH 120 PAYMENTS (10 YEARS)
Under this option, we will make annuity payments monthly, quarterly,
semi-annually, or annually as long as the annuitant is alive. If the annuitant
dies before we have made 10 years worth of payments, we will pay the beneficiary
in one lump sum the present value of the annuity payments scheduled to have been
made over the remaining portion of that 10 year period, unless we were
specifically instructed that such remaining annuity payments continue to be paid
to the beneficiary. The present value of the remaining annuity payments is
calculated by using the interest rate used to compute the amount of the original
120 payments. The interest rate will be at least 3% a year.
OPTION 3
INTEREST PAYMENT OPTION
Under this option, we will credit interest on the adjusted contract value until
you request payment of all or part of the adjusted contract value. We can make
interest payments on a monthly, quarterly, semiannual, or annual basis or allow
the interest to accrue on your contract assets. Under this option, we will pay
you interest at an effective rate of at least 1.50% a year. This option may not
be available in all states, and is not available if you hold your contract in an
IRA.
11
3:
WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE INCOME PHASE? (ANNUITIZATION)
CONTINUED
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PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
OPTION 4
OTHER ANNUITY OPTIONS
We currently offer a variety of other annuity options not described above. At
the time annuity payments are chosen, we may make available to you any of the
fixed annuity options that are offered at your annuity date.
TAX CONSIDERATIONS
If your contract is held under a tax-favored plan, you should consider the
minimum distribution requirements when selecting your annuity option.
12
PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
4:
WHAT IS THE
DEATH BENEFIT?
- --------------------------------------------------------------------------------
BENEFICIARY
The beneficiary is the person(s) or entity you name to receive any death
benefit. The beneficiary is named at the time the contract is issued, unless you
change it at a later date. Unless an irrevocable beneficiary has been named, you
can change the beneficiary at any time before the owner or last surviving owner
dies. However, if the contract is jointly owned, the owner must name the joint
owner and the joint owner must name the owner as the beneficiary.
CALCULATION OF THE DEATH BENEFIT
If the owner (or first-to-die of the owner and joint owner) dies during the
accumulation phase, we will, upon receiving appropriate proof of death and any
other needed documentation in good order (proof of death), pay a death benefit
to the beneficiary designated by the deceased owner or joint owner. If the
contract is owned by an entity (e.g., a corporation or trust), rather than by an
individual, then we will pay the death benefit upon the death of the annuitant.
We require proof of death to be submitted promptly. The beneficiary will receive
a death benefit equal to the contract value as of the date that proof of death
is received in good order at the Prudential Annuity Service Center.
Instead of asking us to pay a death benefit, the surviving spouse may opt to
continue the contract, as discussed below. Generally, we impose no withdrawal
charge or market value adjustment when we pay the death benefit.
JOINT OWNERSHIP RULES
If the contract has an owner and a joint owner and they are spouses, then upon
the first to die of the owner and joint owner, the surviving spouse has the
choice of the following:
- - The contract can continue, with the surviving spouse as the sole owner of the
contract; or
- - The surviving spouse can receive the death benefit and the contract will end.
If the surviving spouse wishes to receive the death benefit, he or she must
make that choice within the first 60 days following our receipt of proof of
death. Otherwise, the contract will continue with the surviving spouse as the
sole owner.
If the contract has an owner and a joint owner, and they are not spouses, the
contract will not continue. Instead, the beneficiary will receive the death
benefit.
The death benefit payout options are:
Choice 1. Lump sum.
Choice 2. Payment of the entire death benefit within 5 years of the date of
death of the first to die. Under this choice, we will impose a
market value adjustment upon any withdrawal made during the 5 year
period (unless the withdrawal is made during the 30-day period
immediately preceding the end of a guarantee period).
Choice 3. Payment under an annuity or settlement option over the lifetime of
the beneficiary or over a period not extending beyond the life
expectancy of the beneficiary with distribution beginning within
one year of the date of death of the first to die.
The tax consequences to the beneficiary may vary among the three death
benefit payout options. See Section 8, "What Are The Tax Considerations
Associated With The Strategic Partners Horizon Annuity Contract?"
13
PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
5:
HOW CAN I PURCHASE A STRATEGIC PARTNERS HORIZON
ANNUITY CONTRACT?
- --------------------------------------------------------------------------------
PURCHASE PAYMENT
A purchase payment is the amount of money you give us to purchase the contract.
The minimum initial purchase payment is $5,000, and may not exceed $5 million
absent our prior approval, unless we are prohibited under applicable state law
from insisting on such prior approval. You can allocate subsequent purchase
payments to a guarantee period only during the 30-day period immediately
preceding the end of a guarantee period, provided that any such purchase payment
is at least $1,000.
Generally, your initial purchase payment consists of a single sum. However,
with respect to an exchange or roll-over, your purchase payment can consist of
multiple sums that you identify at the time of application. With respect to the
latter:
- - we will aggregate each sum for purposes of computing the amount of any
additional interest that we pay on each sum; and
- - each sum will earn interest only from the business day on which it is
received in good order at the Prudential Annuity Service Center until the end
of the guarantee period.
We generally will sell you a contract only if the eldest of the owner, any
joint owner, annuitant, and any co-annuitant is 85 or younger on the contract
date.
ALLOCATION OF PURCHASE PAYMENT
When you purchase a contract, we will allocate your invested purchase payment to
the guarantee period of your choosing, provided that we are offering that
guarantee period at the time. You must allocate all of your initial purchase
payment to a single guarantee period. Likewise, any subsequent purchase payment
you make during the 30-day period immediately preceding the end of a guarantee
period will be consolidated with your existing contract value, and the total
will be allocated to a single guarantee period of your choosing.
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PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
6:
WHAT ARE THE EXPENSES ASSOCIATED WITH THE STRATEGIC PARTNERS
HORIZON ANNUITY CONTRACT?
- --------------------------------------------------------------------------------
THERE ARE CHARGES ASSOCIATED WITH THE CONTRACT THAT MAY REDUCE THE RETURN ON
YOUR INVESTMENT. THESE CHARGES AND EXPENSES ARE DESCRIBED BELOW.
WITHDRAWAL CHARGE
The withdrawal charge is for the payment of the expenses involved in selling and
distributing the contracts, including sales commissions, printing of
prospectuses, sales administration, preparation of sales literature and other
promotional activities.
You may surrender your contract in whole or in part while the guarantee
period remains in effect. If you do so, however, you will be subject to (a) a
possible withdrawal charge, (b) a market value adjustment (which we discussed in
Section 2 above) and (c) possible tax penalties. After the first contract year,
you may withdraw, without the imposition of any withdrawal charge or market
value adjustment, an amount equal to the interest earned under your contract
during the immediately preceding contract year. When we calculate the withdrawal
charge and market value adjustment, we first take into account any available
charge-free amount. We impose a withdrawal charge and market value adjustment
only after that amount has been exhausted. In addition, we do not impose either
a withdrawal charge or a market value adjustment on amounts you withdraw under
the contract's minimum distribution option to satisfy Internal Revenue Service
minimum distribution requirements.
If you make a full withdrawal, we will deduct the withdrawal charge from the
proceeds that we pay to you. If you make a partial withdrawal, we will deduct
the withdrawal charge from the contract value remaining in the guarantee period.
We calculate the withdrawal charge after we have given effect to any market
value adjustment.
The withdrawal charge that we impose is equal to a specified percentage of
the contract value withdrawn that is in excess of the charge-free amount
described above. With respect to the initial guarantee period, the withdrawal
charge is based on the number of contract anniversaries that have elapsed since
the contract date. If permitted by state law, the below withdrawal charge
schedule is reinstated during your first, renewal guarantee period, and the
contract anniversaries set out in the table below also refer to contract
anniversaries within the first, renewal guarantee period. No withdrawal charges
apply to any guarantee period that you choose subsequent to your first, renewal
guarantee period. Moreover, we impose no withdrawal charge on withdrawals from
any one year guarantee period. The withdrawal charge generally is equal to the
following, if the contract is issued (or the initial renewal guarantee period is
selected) by an owner who is 84 or younger at that time:
<Table>
<Caption>
NUMBER OF CONTRACT ANNIVERSARIES SINCE
THE LATER OF CONTRACT DATE (OR START OF
FIRST RENEWAL GUARANTEE PERIOD) WITHDRAWAL CHARGE
- --------------------------------------- -----------------
0 7%
1 7%
2 7%
3 6%
4 5%
5 5%
6 4%
7 3%
8 2%
9 1%
10 0%
</Table>
As specified in the contract, we reduce withdrawal charges (from what is
depicted above) if the owner is 85 or older. There is a separate withdrawal
charge schedule applicable to each of ages 85, 86, 87, 88, 89 and 90. With
certain exceptions, the withdrawal charge at any contract anniversary declines
by 1% from one age to the next successive age, at such older ages. Some or all
of the guarantee periods that we offer at any given time will be shorter than
the time periods indicated immediately above. As such, the length of the
guarantee period that you have selected, in and of itself, may prevent you from
taking advantage of the decreasing withdrawal charges depicted above. For
example, if you choose a three year guarantee period,
15
6:
WHAT ARE THE EXPENSES ASSOCIATED WITH THE STRATEGIC PARTNERS HORIZON ANNUITY
CONTRACT? CONTINUED
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PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
you would not be able to take advantage of the lower withdrawal charges that
would have been available in subsequent contract years. If a withdrawal is
effective on the day before a contract anniversary, the withdrawal charge
percentage will be that as of the next following contract anniversary. The
withdrawal charge applicable to contracts issued in certain states differs
slightly from what we describe above -- check your contract for complete
details.
WAIVER OF WITHDRAWAL CHARGE FOR CRITICAL CARE
We will allow you to withdraw money from the contract, and will waive any
withdrawal charge and market value adjustment, if the owner or joint owner (if
applicable) becomes confined to an eligible nursing home or hospital for a
period of at least three consecutive months after the contract was purchased.
You would need to provide us with proof of the confinement. If a physician has
certified that the owner or joint owner is terminally ill (has twelve months or
less to live) there will be no charge imposed for withdrawals nor any market
value adjustment. Critical Care Access is not available in all states.
TAXES ATTRIBUTABLE TO PREMIUM
There may be federal, state and local premium based taxes applicable to your
purchase payment. We are responsible for the payment of these taxes and may make
a charge against the value of the contract to pay some or all of these taxes. It
is our current practice not to deduct a charge for state premium taxes until
annuity payments begin. In the states that impose a premium tax on us, the
current rates range up to 3.5%. It is also our current practice not to deduct a
charge for the federal tax associated with deferred acquisition costs paid by us
that are based on premium received. However, we reserve the right to charge the
contract owner in the future for any such tax associated with deferred
acquisition costs and any federal, state or local income, excise, business or
any other type of tax measured by the amount of premium received by us.
16
PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
7:
HOW CAN I ACCESS
MY MONEY?
- --------------------------------------------------------------------------------
You can withdraw money at any time during the accumulation phase. If you do so,
however, you may be subject to income tax and, if the withdrawal is prior to
your attaining age 59 1/2, an additional tax penalty. You will need our consent
to make a partial withdrawal if the requested withdrawal is less than $250.
During the accumulation phase, we generally have the right to terminate your
contract and pay you the contract value if the current contract value is less
than $2,000 and certain other conditions apply.
INCOME TAXES, TAX PENALTIES, WITHDRAWAL CHARGES, AND A MARKET VALUE
ADJUSTMENT MAY APPLY TO ANY WITHDRAWAL YOU MAKE. FOR A MORE COMPLETE EXPLANATION
OF TAX CONSEQUENCES, SEE SECTION 8.
AUTOMATED WITHDRAWALS
We offer an automated withdrawal feature. This feature enables you to receive
periodic withdrawals in monthly, quarterly, semiannual, or annual intervals. We
will process your withdrawal at the end of the business day at the intervals you
specify. We will continue at these intervals until you tell us otherwise. We
reserve the right to cease paying automated withdrawals if paying any such
withdrawal would cause the contract value to be less than $2,000.
The minimum automated withdrawal amount you can make is $100. An assignment
of the contract terminates any automated withdrawal program that you had in
effect. Withdrawal charges, and a market value adjustment, may apply to any
automated withdrawal you make. You may not use the automated withdrawal feature
to withdraw the interest earned under your contract.
INCOME TAXES, TAX PENALTIES, WITHDRAWAL CHARGES, AND A MARKET VALUE
ADJUSTMENT MAY APPLY TO AUTOMATED WITHDRAWALS. FOR A MORE COMPLETE DISCUSSION OF
TAX CONSEQUENCES, SEE SECTION 8.
17
PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
8:
WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED WITH THE STRATEGIC PARTNERS
HORIZON ANNUITY CONTRACT?
- --------------------------------------------------------------------------------
The tax considerations associated with the Strategic Partners Horizon Annuity
contract vary depending on whether the contract is (i) owned by an individual
and not associated with a tax-favored retirement plan (including contracts held
by a non-natural person, such as a trust, acting as an agent for a natural
person), or (ii) held under a tax-favored retirement plan. We discuss the tax
considerations for these categories of contracts below. The discussion is
general in nature and describes only federal income tax law (not state or other
tax laws). It is based on current law and interpretations, which may change. The
discussion includes a description of certain spousal rights under the contract
and under tax-qualified plans. Our administration of such spousal rights and
related tax reporting accords with our understanding of the Defense of Marriage
Act (which defines a "marriage" as a legal union between a man and a woman and a
"spouse" as a person of the opposite sex). The information provided is not
intended as tax advice. You should consult with a qualified tax advisor for
complete information and advice. References to purchase payments below relate to
your cost basis in your contract. Generally, your cost basis in a contract not
associated with a tax-favored retirement plan is the amount you pay into your
contract, or into annuities exchanged for your contract, on an after-tax basis
less any withdrawals of such payments.
This contract may also be purchased as a non-qualified annuity (i.e., a
contract not held under a tax-favored retirement plan) by a trust or custodial
IRA account, which can hold other permissible assets other than the annuity. The
terms and administration of the trust or custodial account in accordance with
the laws and regulations for IRAs, as applicable, are the responsibility of the
applicable trustee or custodian.
CONTRACTS OWNED BY INDIVIDUALS (NOT ASSOCIATED WITH TAX FAVORED RETIREMENT
PLANS)
TAXES PAYABLE BY YOU
We believe the contract is an annuity contract for tax purposes. Accordingly, as
a general rule, you should not pay any tax until you receive money under the
contract.
Generally, annuity contracts issued by the same company (and affiliates) to
you during the same calendar year must be treated as one annuity contract for
purposes of determining the amount subject to tax under the rules described
below.
TAXES ON WITHDRAWALS AND SURRENDER
If you make a withdrawal from your contract or surrender it before annuity
payments begin, the amount you receive will be taxed as ordinary income, rather
than as return of purchase payments, until all gain has been withdrawn. You will
generally be taxed on any withdrawal from a contract while you are alive even if
the withdrawal is paid to someone else.
If you assign or pledge all or part of your contract as collateral for a
loan, the part assigned generally will be treated as a withdrawal. Also, if you
elect the interest payment option that we may offer, that election will be
treated, for tax purposes, as surrendering your contract.
If you transfer your contract for less than full consideration, such as by
gift, you will trigger tax on any gain in the contract. This rule does not apply
if you transfer the contract to your spouse or under most circumstances if you
transfer the contract incident to divorce.
TAXES ON ANNUITY PAYMENTS
A portion of each annuity payment you receive will be treated as a partial
return of your purchase payments and will not be taxed. The remaining portion
will be taxed as ordinary income. Generally, the nontaxable portion is
determined by multiplying the annuity payment you receive by a fraction, the
numerator of which is your purchase payments (less any amounts previously
received tax-free) and the denominator of which is the total expected payments
under the contract.
After the full amount of your purchase payments have been recovered tax-free,
the full amount of the annuity payments will be taxable. If annuity payments
stop due to the death of the annuitant before the full amount of your purchase
payments have been recovered, a tax deduction may be allowed for the unrecovered
amount.
18
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PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
TAX PENALTY ON WITHDRAWALS AND ANNUITY PAYMENTS
Any taxable amount you receive under your contract may be subject to a 10
percent tax penalty. Amounts are not subject to this tax penalty if:
- - the amount is paid on or after you reach age 59 1/2 or die;
- - the amount received is attributable to your becoming disabled;
- - the amount paid or received is in the form of substantially equal payments
not less frequently than annually (please note that substantially equal
payments must continue until the later of reaching 59 1/2 or 5 years.
Modification of payments during that time period will generally result in
retroactive application of the 10% tax penalty); or
- - the amount received is paid under an immediate annuity contract (in which
annuity payments begin within one year of purchase).
SPECIAL RULES IN RELATION TO TAX-FREE EXCHANGES UNDER SECTION 1035
Section 1035 of the Internal Revenue Code of 1986, as amended (Code) permits
certain tax-free exchanges of a life insurance, annuity or endowment contract
for an annuity. If the annuity is purchased through a tax-free exchange of a
life insurance, annuity or endowment contract that was purchased prior to August
14, 1982, then any purchase payments made to the original contract prior to
August 14, 1982 will be treated as made to the new contract prior to that date.
Partial surrenders may be treated in the same way as tax-free 1035 exchanges
of entire contracts, therefore avoiding current taxation of any gains in the
contract as well as the 10% tax penalty on pre-age 59 1/2 withdrawals. The
Internal Revenue Service (IRS) has reserved the right to treat transactions it
considers abusive as ineligible for this favorable partial 1035 exchange
treatment. We do not know what transactions may be considered abusive. For
example we do not know how the IRS may view early withdrawals or annuitizations
after a partial exchange. In addition, it is unclear how the IRS will treat a
partial exchange from a life insurance, endowment, or annuity contract into an
immediate annuity. As of the date of this prospectus, we will accept a partial
1035 exchange from a non-qualified annuity into an immediate annuity as a "tax-
free" exchange for future tax reporting purposes, except to the extent that we,
as a reporting and withholding agent, believe that we would be expected to deem
the transaction to be abusive. However, some insurance companies may not
recognize these partial surrenders as tax-free exchanges and may report them as
taxable distributions to the extent of any gain distributed as well as
subjecting the taxable portion of the distribution to the 10% tax penalty. We
strongly urge you to discuss any transaction of this type with your tax advisor
before proceeding with the transaction.
TAXES PAYABLE BY BENEFICIARIES
The death benefit options are subject to income tax to the extent the
distribution exceeds the cost basis in the contract. The value of the death
benefit, as determined under federal law, is also included in the owner's
estate.
Generally, the same tax rules described above would also apply to amounts
received by your beneficiary. Choosing any option other than a lump sum death
benefit may defer taxes. Certain minimum distribution requirements apply upon
your death, as discussed further below.
Tax consequences to the beneficiary vary among the death benefit payment
options.
- - CHOICE 1: The beneficiary is taxed on earnings in the contract.
- - CHOICE 2: The beneficiary is taxed as amounts are withdrawn (in this case
earnings are treated as being distributed first).
- - CHOICE 3: The beneficiary is taxed on each payment (part will be treated as
earnings and part as return of premiums).
REPORTING AND WITHHOLDING ON DISTRIBUTIONS
Taxable amounts distributed from your annuity contracts are subject to federal
and state income tax reporting and withholding. In general, we will withhold
federal income tax from the taxable portion of such distribution based on the
type of distribution. In the case of an annuity or similar periodic payment, we
will withhold as
19
8:
TAX CONSIDERATIONS ASSOCIATED WITH THE STRATEGIC PARTNERS HORIZON ANNUITY
CONTRACT CONTINUED
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PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
if you are a married individual with three exemptions unless you designate a
different withholding status. In the case of all other distributions, we will
withhold at a 10% rate. You may generally elect not to have tax withheld from
your payments. An election out of withholding must be made on forms that we
provide.
State income tax withholding rules vary and we will withhold based on the
rules of your State of residence. Special tax rules apply to withholding for
nonresident aliens, and we generally withhold income tax for nonresident aliens
at a 30% rate. A different withholding rate may be applicable to a nonresident
alien based on the terms of an existing income tax treaty between the United
States and the nonresident alien's country. Please refer to the CONTRACTS HELD
BY TAX FAVORED PLANS section below for a discussion regarding withholding rules
for tax favored plans (for example, an IRA).
Regardless of the amount withheld by us, you are liable for payment of
federal and state income tax on the taxable portion of annuity distributions.
You should consult with your tax advisor regarding the payment of the correct
amount of these income taxes and potential liability if you fail to pay such
taxes.
ANNUITY QUALIFICATION
REQUIRED DISTRIBUTIONS UPON YOUR DEATH. Upon your death, certain
distributions must be made under the contract. The required distributions depend
on whether you die on or before you start taking annuity payments under the
contract or after you start taking annuity payments under the contract.
If you die on or after the annuity date, the remaining portion of the
interest in the contract must be distributed at least as rapidly as under the
method of distribution being used as of the date of death.
If you die before the annuity date, the entire interest in the contract must
be distributed within 5 years after the date of death. However, if a periodic
payment option is selected by your designated beneficiary and if such payments
begin within 1 year of your death, the value of the contract may be distributed
over the beneficiary's life or a period not exceeding the beneficiary's life
expectancy. Your designated beneficiary is the person to whom benefit rights
under the contract pass by reason of death, and must be a natural person in
order to elect a periodic payment option based on life expectancy or a period
exceeding five years.
If the contract is payable to (or for the benefit of) your surviving spouse,
such portion of the contract may be continued with your spouse as the owner.
CHANGES IN THE CONTRACT. We reserve the right to make any changes we deem
necessary to assure that the contract qualifies as an annuity contract for tax
purposes. Any such changes will apply to all contractowners and you will be
given notice to the extent feasible under the circumstances.
CONTRACTS HELD BY TAX FAVORED PLANS
The following discussion covers annuity contracts held under tax-favored
retirement plans.
Currently, the contract may be purchased for use in connection with
individual retirement accounts and annuities (IRAs) which are subject to
Sections 408(a) and 408(b) of the Code and Roth Individual Retirement Accounts
(Roth IRAs) under Section 408A of the Code. This description assumes that you
have satisfied the requirements for eligibility for these products.
This contract may also be purchased as a non-qualified annuity (i.e., a
contract not held under a tax-favored retirement plan) by a trust or custodial
IRA or 403(b) account, which can hold other permissible assets other than the
annuity. The terms and administration of the trust or custodial account in
accordance with the laws and regulations for IRAs or 403(b)s, as applicable, are
the responsibility of the applicable trustee or custodian.
YOU SHOULD BE AWARE THAT TAX FAVORED PLANS SUCH AS IRAS GENERALLY PROVIDE
INCOME TAX DEFERRAL REGARDLESS OF WHETHER THEY INVEST IN ANNUITY CONTRACTS. THIS
MEANS THAT WHEN A TAX FAVORED PLAN INVESTS IN AN ANNUITY CONTRACT, IT GENERALLY
DOES NOT RESULT IN ANY ADDITIONAL TAX BENEFITS (SUCH AS INCOME TAX DEFERRAL AND
INCOME TAX FREE TRANSFERS).
20
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PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
TYPES OF TAX FAVORED PLANS
IRAs. If you buy a contract for use as an IRA, we will provide you a copy of
the prospectus and the contract. The "IRA Disclosure Statement," attached to
this prospectus, contains information about eligibility, contribution limits,
tax particulars and other IRA information. In addition to this information (some
of which is summarized below), the IRS requires that you have a "free look"
after making an initial contribution to the contract. During this time, you can
cancel the contract by notifying us in writing, and we will refund all of the
purchase payments under the contract (or, if provided by applicable state law,
the amount your contract is worth, if greater), less any applicable federal and
state income tax withholding.
CONTRIBUTIONS LIMITS/ROLLOVERS. Because of the way the contract is designed,
you may only purchase a contract for an IRA in connection with a "rollover" of
amounts from a qualified retirement plan, as a transfer from another IRA, as a
regular contribution and catch-up contribution if you are age 50 or over by the
end of the tax year for which you are making the contribution, or as a combined
contribution for both the current and prior tax year (only available between
January 1st and April 15th). You must make a minimum initial payment of $5,000
to purchase a contract. This minimum is greater than the maximum amount of any
annual contribution allowed by law you may make to an IRA. For 2006 the limit is
$4,000, increasing to $5,000 in 2008. After 2008, the contribution amount will
be indexed for inflation. The tax law also provides for a catch-up provision for
individuals who are age 50 and above, allowing these individuals an additional
$1,000 contribution each year.
The "rollover" rules under the Code are fairly technical; however, an
individual (or his or her surviving spouse) may generally "roll over" certain
distributions from tax favored retirement plans (either directly or within 60
days from the date of these distributions) if he or she meets the requirements
for distribution. Once you buy the contract, you can make regular IRA
contributions under the contract (to the extent permitted by law). However, if
you make such regular IRA contributions, you should note that you will not be
able to treat the contract as a "conduit IRA," which means that you will not
retain possible favorable tax treatment if you subsequently "roll over" the
contract funds originally derived from a qualified retirement plan into another
Section 401(a) plan.
REQUIRED PROVISIONS. Contracts that are IRAs (or endorsements that are part
of the contract) must contain certain provisions:
- - You, as owner of the contract, must be the "annuitant" under the contract
(except in certain cases involving the division of property under a decree of
divorce);
- - Your rights as owner are non-forfeitable;
- - You cannot sell, assign or pledge the contract, other than to Pruco Life;
- - The annual contribution you pay cannot be greater than the maximum amount
allowed by law, including catch-up contributions if applicable (which does
not include any rollover amounts);
- - The date on which required minimum distributions must begin cannot be later
than April 1st of the calendar year after the calendar year you turn age
70 1/2; and
- - Death and annuity payments must meet "minimum distribution requirements."
Usually, the full amount of any distribution from an IRA (including a
distribution from this contract) which is not a rollover is taxable. As taxable
income, these distributions are subject to the general tax withholding rules
described earlier. In addition to this normal tax liability, you may also be
liable for the following, depending on your actions:
- - A 10% "early distribution penalty";
- - Liability for "prohibited transactions" if you, for example, borrow against
the value of an IRA; or
- - Failure to take a minimum distribution.
Roth IRAs. Like standard IRAs, income within a Roth IRA accumulates tax-free,
and contributions are
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CONTRACT CONTINUED
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PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
subject to specific limits. Roth IRAs have, however, the following differences:
- - Contributions to a Roth IRA cannot be deducted from your gross income;
- - "Qualified distributions" from a Roth IRA are excludable from gross income. A
"qualified distribution" is a distribution that satisfies two requirements:
(1) the distribution must be made (a) after the owner of the IRA attains age
59 1/2; (b) after the owner's death; (c) due to the owner's disability; or
(d) for a qualified first time homebuyer distribution within the meaning of
Section 72(t)(2)(F) of the Code; and (2) the distribution must be made in the
year that is at least five tax years after the first year for which a
contribution was made to any Roth IRA established for the owner or five years
after a rollover, transfer, or conversion was made from a traditional IRA to
a Roth IRA. Distributions from a Roth IRA that are not qualified
distributions will be treated as made first from contributions and then from
earnings, and earnings will be taxed generally in the same manner as
distributions from a traditional IRA; and
- - If eligible (including meeting income limitations and earnings requirements),
you may make contributions to a Roth IRA after attaining age 70 1/2, and
distributions are not required to begin upon attaining such age or at any
time thereafter.
The "IRA Disclosure Statement" attached to this prospectus contains some
additional information on Roth IRAs.
Because the contract's minimum initial payment of $5,000 is greater than the
maximum annual contribution permitted to be made to a Roth IRA, you may only
purchase the contract for a Roth IRA in connection with a "rollover" or
"conversion" of amounts of a traditional IRA, conduit IRA, SEP, SIMPLE-IRA or
another Roth IRA, as your regular Roth IRA contribution and catch-up
contribution if you are age 50 or over by the end of the tax year for which you
are making the contribution, or as a combined Roth IRA contribution for both the
current and prior tax year (only available between January 1st and April 15th).
The Code permits persons who meet certain income limitations (generally,
adjusted gross income under $100,000) who are not married filing a separate
return, and who receive certain qualifying distributions from such non-Roth
IRAs, to directly rollover or make, within 60 days, a "rollover" of all or any
part of the amount of such distribution to a Roth IRA which they establish. This
conversion triggers current taxation (but is not subject to a 10% early
distribution penalty). Once the contract has been purchased, regular Roth IRA
contributions will be accepted to the extent permitted by law. In addition, as
of January 1, 2006, an individual receiving an eligible rollover distribution
from a designated Roth account under an employer plan may roll over the
distribution to a Roth IRA even if the individual is not eligible to make
regular or conversion contributions to a Roth IRA. If you are considering
rolling over funds from your Roth account under an employer plan, please contact
your financial professional prior to purchase to confirm whether such rollovers
are being accepted.
MINIMUM DISTRIBUTION REQUIREMENTS AND PAYMENT OPTION
If you hold the contract under an IRA (or other tax-favored plan), IRS minimum
distribution requirements must be satisfied. This means that generally payments
must start by April 1 of the year after the year you reach age 70 1/2 and must
be made for each year thereafter. Roth IRAs are not subject to these rules
during the owner's lifetime. The amount of the payment must at least equal the
minimum required under the IRS rules. Several choices are available for
calculating the minimum amount. More information on the mechanics of this
calculation is available on request. Please contact us a reasonable time before
the IRS deadline so that a timely distribution is made. Please note that there
is a 50% penalty tax on the amount of any minimum distribution not made in a
timely manner.
You can use the Minimum Distribution option to satisfy the IRS minimum
distribution requirements for this contract without either beginning annuity
payments or surrendering the contract. We will distribute to you
22
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STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
this minimum distribution amount, less any other partial withdrawals that you
made during the year.
Although the IRS rules determine the required amount to be distributed from
your IRA each year, certain payment alternatives are still available to you. If
you own more than one IRA, you can choose to satisfy your minimum distribution
requirement for each of your IRAs by withdrawing that amount from any of your
IRAs. Similar rules apply if you inherit more than one Roth IRA from the same
owner.
PENALTY FOR EARLY WITHDRAWALS
You may owe a 10% tax penalty on the taxable part of distributions received from
an IRA, Roth IRA, or qualified retirement plan before you attain age 59 1/2.
Amounts are not subject to this tax penalty if:
- - the amount is paid on or after you reach age 59 1/2 or die;
- - the amount received is attributable to your becoming disabled; or
- - the amount paid or received is in the form of substantially equal payments
not less frequently than annually (please note that substantially equal
payments must continue until the later of reaching age 59 1/2 or 5 years.
Modification of payments during that time period will generally result in
retroactive application of the 10% tax penalty.)
Other exceptions to this tax may apply. You should consult your tax advisor
for further details.
WITHHOLDING
Unless you elect otherwise, we will withhold federal income tax from the taxable
portion of such distribution at an appropriate percentage. The rate of
withholding on annuity payments where no mandatory withholding is required is
determined on the basis of the withholding certificate that you file with us. If
you do not file a certificate, we will automatically withhold federal taxes on
the following basis:
- - For any annuity payments not subject to mandatory withholding, you will have
taxes withheld by us as if you are a married individual, with three
exemptions; and
- - For all other distributions, we will withhold at a 10% rate.
We will provide you with forms and instructions concerning the right to elect
that no amount be withheld from payments in the ordinary course. However, you
should know that, in any event, you are liable for payment of federal income
taxes on the taxable portion of the distributions, and you should consult with
your tax advisor to find out more information on your potential liability if you
fail to pay such taxes. There may be additional state income tax withholding
requirements.
ERISA DISCLOSURE/REQUIREMENTS
ERISA (the "Employee Retirement Income Security Act of 1974") and the Code
prevent a fiduciary and other "parties in interest" with respect to a plan (and,
for these purposes, an IRA would also constitute a "plan") from receiving any
benefit from any party dealing with the plan, as a result of the sale of the
contract. Administrative exemptions under ERISA generally permit the sale of
insurance/annuity products to plans, provided that certain information is
disclosed to the person purchasing the contract. This information has to do
primarily with the fees, charges, discounts and other costs related to the
contract, as well as any commissions paid to any agent selling the contract.
Information about any applicable fees, charges, discounts, penalties or
adjustments may be found under Section 6, "What Are The Expenses Associated With
The Strategic Partners Horizon Contract?"
Information about sales representatives and commissions may be found under
"Other Information" and "Sale And Distribution Of The Contract" in Section 9.
In addition, other relevant information required by the exemptions is
contained in the contract and accompanying documentation. Please consult your
tax advisor if you have any additional questions.
ADDITIONAL INFORMATION
For additional information about federal tax law requirements applicable to tax
favored plans, see the
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TAX CONSIDERATIONS ASSOCIATED WITH THE STRATEGIC PARTNERS HORIZON ANNUITY
CONTRACT CONTINUED
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PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
"IRA Disclosure Statement," attached to this prospectus. The following
additional tax considerations also may be of interest.
ENTITY OWNERS.
Where a contract is held by a non-natural person (e.g., a corporation), other
than as an agent or nominee for a natural person (or in other limited
circumstances), the contract will not be taxed as an annuity and increases in
the value of the contract will be subject to tax.
PURCHASE PAYMENTS MADE BEFORE AUGUST 14, 1982.
If your contract was issued in exchange for a contract containing purchase
payments made before August 14, 1982, favorable tax rules may apply to certain
withdrawals from the contract. Generally, withdrawals are treated as a recovery
of your investment in the contract first until purchase payments made before
August 14, 1982 are withdrawn. Moreover, any income allocable to purchase
payments made before August 14, 1982, is not subject to the 10% tax penalty.
GENERATION-SKIPPING TRANSFERS.
If you transfer your contract to a person two or more generations younger than
you (such as a grandchild or grandniece) or to a person that is more than 37 1/2
years younger than you, there may be generation-skipping transfer tax
consequences.
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STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
9:
OTHER
INFORMATION
- --------------------------------------------------------------------------------
PRUCO LIFE INSURANCE COMPANY
Pruco Life Insurance Company (Pruco Life) is a stock life insurance company,
organized on December 23, 1971 under the laws of the State of Arizona. It is
licensed to sell life insurance and annuities in the District of Columbia, Guam,
and in all states except New York.
Pruco Life is a wholly-owned subsidiary of The Prudential Insurance Company
of America (Prudential), a New Jersey stock life insurance company that has been
doing business since October 13, 1875. Prudential is an indirect wholly-owned
subsidiary of Prudential Financial, Inc. (Prudential Financial), a New Jersey
insurance holding company. As Pruco Life's ultimate parent, Prudential Financial
exercises significant influence over the operations and capital structure of
Pruco Life and Prudential. However, neither Prudential Financial, Prudential,
nor any other related company has any legal responsibility to pay amounts that
Pruco Life may owe under the contract.
Pruco Life publishes annual and quarterly reports that are filed with the
SEC. These reports contain financial information about Pruco Life that is
annually audited by independent accountants. Pruco's Life annual report for the
year ended December 31, 2005, together with subsequent periodic reports that
Pruco Life files with the SEC, are incorporated by reference into this
prospectus. You can obtain copies, at no cost, of any and all of this
information, including the Pruco Life annual report that is not ordinarily
mailed to contract owners, the more current reports and any subsequently filed
documents at no cost by contacting us at the address or telephone number listed
on the cover. The SEC file number for Pruco Life is 33-37587. You may read and
copy any filings made by Pruco Life with the SEC at the SEC's Public Reference
Room at 100 F Street, N.E., Washington, D.C. 20549-0102. You can obtain
information on the operation of the Public Reference Room by calling (202)
551-8090. The SEC maintains an Internet site that contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the SEC at http://www.sec.gov.
SALE AND DISTRIBUTION OF THE CONTRACT
Prudential Investment Management Services LLC (PIMS), a wholly-owned subsidiary
of Prudential Financial, Inc., is the distributor and principal underwriter of
the securities offered through this prospectus. PIMS acts as the distributor of
a number of annuity contracts and life insurance products we offer.
PIMS's principal business address is 100 Mulberry Street, Newark, New Jersey
07102-4077. PIMS is registered as a broker/dealer under the Securities Exchange
Act of 1934 (Exchange Act) and is a member of the National Association of
Securities Dealers, Inc. (NASD).
The contract is offered on a continuous basis. PIMS enters into distribution
agreements with broker/dealers who are registered under the Exchange Act and
with entities that may offer the contract but are exempt from registration
(firms). Applications for the contract are solicited by registered
representatives of those firms. Such representatives will also be our appointed
insurance agents under state insurance law. In addition, PIMS may offer the
contract directly to potential purchasers.
Commissions are paid to firms on sales of the contract according to one or
more schedules. The individual representative will receive a portion of the
compensation, depending on the practice of his or her firm. Commissions are
generally based on a percentage of purchase payments made, up to a maximum of
5%. Alternative compensation schedules are available that provide a lower
initial commission plus ongoing annual compensation based on all or a portion of
contract value. We may also provide compensation to the distributing firm for
providing ongoing service to you in relation to the contract. Commissions and
other compensation paid in relation to the contract do not result in any
additional charge to you or to the separate account.
In addition, in an effort to promote the sale of our products (which may
include the placement of Pruco Life and/or the contract on a preferred or
recommended company or product list and/or access to the firm's registered
representatives), we or PIMS may
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OTHER INFORMATION CONTINUED
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PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
enter into compensation arrangements with certain broker/dealer firms with
respect to certain or all registered representatives of such firms under which
such firms may receive separate compensation or reimbursement for, among other
things, training of sales personnel and/or marketing and/or administrative
services and/or other services they provide to us or our affiliates. These
services may include, but are not limited to: educating customers of the firm on
the contract's features; conducting due diligence and analysis; providing office
access, operations and systems support; holding seminars intended to educate
registered representatives and make them more knowledgeable about the contract;
providing a dedicated marketing coordinator; providing priority sales desk
support; and providing expedited marketing compliance approval to PIMS. A list
of firms that PIMS paid pursuant to such arrangements is available upon request.
To the extent permitted by NASD rules and other applicable laws and
regulations, PIMS may pay or allow other promotional incentives or payments in
the form of cash or non-cash compensation. These arrangements may not be offered
to all firms and the terms of such arrangements may differ between firms.
You should note that firms and individual registered representatives and
branch managers within some firms participating in one of these compensation
arrangements might receive greater compensation for selling the contract than
for selling a different contract that is not eligible for these compensation
arrangements. While compensation is generally taken into account as an expense
in considering the charges applicable to a contract product, any such
compensation will be paid by us or PIMS and will not result in any additional
charge to you. Your registered representative can provide you with more
information about the compensation arrangements that apply upon the sale of the
contract.
LITIGATION
Pruco Life is subject to legal and regulatory actions in the ordinary course of
its businesses, including class action lawsuits. Our pending legal and
regulatory actions include proceedings specific to us and proceedings generally
applicable to business practices in the industries in which we operate. In our
insurance operations, we are subject to class action lawsuits and individual
lawsuits involving a variety of issues, including sales practices, underwriting
practices, claims payment and procedures, additional premium charges for
premiums paid on a periodic basis, denial or delay of benefits, return of
premiums or excessive premium charges and breaching fiduciary duties to
customers. In our annuities operations, we are subject to litigation involving
class action lawsuits and other litigation alleging, among other things, that we
made improper or inadequate disclosures in connection with the sale of annuity
products or charged excessive or impermissible fees on these products,
recommended unsuitable products to customers, mishandled customer accounts or
breached fiduciary duties to customers. In some of our pending legal and
regulatory actions, parties are seeking large and/or indeterminate amounts,
including punitive or exemplary damages. The following is such a pending
proceeding:
Stewart v. Prudential, et al. is a lawsuit brought in the Circuit Court of
the First Judicial District of Hinds County, Mississippi by the beneficiaries of
an alleged life insurance policy against Pruco Life and Prudential. The
complaint alleges that the Prudential defendants acted in bad faith when they
failed to pay a death benefit on an alleged contract of insurance that was never
delivered. In February 2006, the jury awarded the plaintiffs $1.4 million in
compensatory damages and $35 million in punitive damages. Pruco Life plans to
appeal the verdict.
Pruco Life's litigation and regulatory matters are subject to many
uncertainties, and given the complexity and scope, the outcomes cannot be
predicted. It is possible that the results of operations or the cash flow of
Pruco Life in a particular quarterly or annual period could be materially
affected by an ultimate unfavorable resolution of litigation and regulatory
matters. Management believes, however, that the ultimate outcome of all pending
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PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
litigation and regulatory matters should not have a material adverse effect on
Pruco Life's financial position.
ASSIGNMENT
In general, you can assign the contract at any time during your lifetime. We
will not be bound by the assignment until we receive written notice. We will not
be liable for any payment or other action we take in accordance with the
contract if that action occurs before we receive notice of the assignment. An
assignment, like any other change in ownership, may trigger a taxable event. If
you assign the contract, that assignment will result in the termination of any
automated withdrawal program that had been in effect. If the new owner wants to
re-institute an automated withdrawal program, then he/she needs to submit the
forms that we require, in good order.
If the contract is issued under a qualified plan, there may be limitations on
your ability to assign the contract. For further information please speak to
your representative.
HOUSEHOLDING
To reduce costs, we now send only a single copy of prospectuses to each
consenting household, in lieu of sending a copy to each contract owner that
resides in the household. If you are a member of such a household, you should be
aware that you can revoke your consent to householding at any time, and begin to
receive your own copy of prospectuses and shareholder reports, by calling (877)
778-5008.
INDEMNIFICATION
Pruco Life, in conjunction with certain affiliates, maintains insurance on
behalf of any person who is or was a trustee, director, officer, employee, or
agent of Pruco Life, or who is or was serving at the request of Pruco Life as a
trustee, director, officer, employee or agent of such other affiliated trust or
corporation, against any liability asserted against and incurred by him or her
arising out of his or her position with such trust or corporation.
Arizona, being the state of organization of Pruco Life, permits entities
organized under its jurisdiction to indemnify directors and officers with
certain limitations. The relevant provisions of Arizona law permitting
indemnification can be found in Section 10-850 et. seq. of the Arizona Statutes
Annotated. The text of Pruco Life's By-law, Article VIII, which relates to
indemnification of officers and directors, is incorporated by reference to
Exhibit 3(ii) to its form 10-Q filed August 15, 1997.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of Pruco
Life pursuant to the foregoing provisions or otherwise, Pruco Life has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Pruco Life of expenses incurred or
paid by a director, officer or controlling person of Pruco Life in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, Pruco Life will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
MARKET-VALUE
ADJUSTMENT FORMULA
- --------------------------------------------------------------------------------
MARKET-VALUE ADJUSTMENT FORMULA
With respect to residents of states, other than Indiana and Pennsylvania, in
which Strategic Partners Horizon Annuity is being offered.
The formula under which Pruco Life calculates the market value adjustment
applicable to a full or partial surrender, annuitization, or settlement under
Strategic Partners Horizon Annuity is set forth below. The market value
adjustment is expressed as a multiplier factor. That is, the Contract Value
after the market value adjustment ("MVA"), but before any surrender charge, is
as follows: Contract Value (after MVA) = Contract Value (before MVA) X (1 +
MVA). The MVA itself is calculated as follows:
MVA = (((1 + I)/(1 + J + .0025)) to the power of (N/12)) -1
<Table>
where: I = the guaranteed credited interest rate
(annual effective) for the given
contract at the time of withdrawal or
annuitization or settlement.
J = the current credited interest rate
offered on new money at the time of
withdrawal or annuitization or
settlement for a guarantee period of
equal length to the number of whole
years remaining in the Contract's
current guarantee period plus one
year.
N = equals the remaining number of months
in the contract's current guarantee
period (rounded up) at the time of
withdrawal or annuitization or
settlement.
</Table>
For contracts issued in Indiana, we use the same formula as is set forth above,
except that the .0025 component of the formula is eliminated. We use the same
MVA formula with respect to contracts issued in Pennsylvania, except that "J" in
the formula above uses an interpolated rate as the current credited interest
rate. Specifically, "J" is the interpolated current credited interest rate
offered on new money at the time of withdrawal, annuitization, or settlement.
The interpolated value is calculated using the following formula:
m/365 X (n + 1) year rate + (365 - m)/365 X n year rate,
where "n" equals the number of whole years remaining in the Contract's current
guarantee period, and "m" equals the number of additional days remaining in the
current guarantee period.
MARKET VALUE ADJUSTMENT EXAMPLE
(ALL STATES EXCEPT INDIANA AND PENNSYLVANIA)
The following will illustrate the application of the Market-Value Adjustment.
For simplicity, surrender charges are ignored in these hypothetical examples.
Positive market value adjustment
- - Suppose a contract owner made an invested purchase payment of $10,000 on July
1, 2005 and received a guaranteed interest rate of 6% for 5 years. A request
to surrender the contract is made on May 1, 2007. At the time, the Contract
Value has accumulated to $11,127.11. The number of whole years remaining in
the guarantee period is 3.
- - On May 1, 2007 the interest rate declared by Pruco Life for a guarantee
period of 4 years (the number of whole years remaining plus 1) is 5%.
The following computations would be made:
1) Calculate the Charge Free Amount. The Charge Free Amount is the interest
credited in the contract in the previous contract year. This amount is
$600.00. It is not subject to a Market Value Adjustment.
2) Subtract the Charge Free Amount from the Contract Value. The result is the
amount subject to a Market Value Adjustment (MVA).
$11,127.11 - $600.00 = $10,527.11
3) Determine the Market Value Adjustment factor.
<Table>
N = 38
I = 6% (0.06)
J = 5% (0.05)
</Table>
The MVA factor calculation would be:
([(1.06)/(1.05 + .0025)] to the power of (38/12)) -1 = 0.02274
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PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
4) Multiply the amount subject to a Market Value Adjustment by the factor
calculated in Step 3.
$10,527.11 X 0.02274 = $239.39
5) Add together the Market Value Adjustment and the amount subject to the MVA.
$10,527.11 + $239.39 = $10,766.50
6) Add back the Charge Free Amount to get the total Contract Surrender Value.
$10,766.50 + $600.00 = $11,366.50
The MVA may not always be positive. Here is an example where it is negative.
- - Suppose a contract owner made an invested purchase payment of $10,000 on July
1, 2005 and received a guaranteed interest rate of 6% for 5 years. A request
to surrender the contract is made on May 1, 2007. At the time, the Contract
Value has accumulated to $11,127.11. The number of whole years remaining in
the guarantee period is 3.
- - On May 1, 2007 the interest rate declared by Pruco Life for a guarantee
period of 4 years (the number of whole years remaining plus 1) is 7%.
The following computations would be made:
1) Calculate the Charge Free Amount. The Charge Free Amount is the interest
credited in the contract in the previous contract year. This amount is
$600.00. It is not subject to a Market Value Adjustment.
2) Subtract the Charge Free Amount from the Contract Value. The result is the
amount subject to a Market Value Adjustment (MVA).
$11,127.11 - $600.00 = $10,527.11
3) Determine the Market Value Adjustment factor.
<Table>
N = 38
I = 6% (0.06)
J = 7% (0.07)
</Table>
The MVA factor calculation would be:
([(1.06)/(1.07+.0025)] to the power of(38/12)) -1 = -0.03644
4) Multiply the amount subject to a Market Value Adjustment by the factor
calculated in Step 3.
$10,527.11 X -0.03644 = -$383.61
5) Add together the Market Value Adjustment and the amount subject to the MVA.
$10,527.11 - $383.61 = $10,143.50
6) Add back the Charge Free Amount to get the total Contract Surrender Value.
$10,143.50 + $600.00 = $10,743.50
MARKET VALUE ADJUSTMENT EXAMPLE
(INDIANA)
The following will illustrate the application of the Market-Value Adjustment.
For simplicity, surrender charges are ignored in this example.
Positive market value adjustment
- - Suppose a contract owner made an invested purchase payment of $10,000 on July
1, 2005 and received a guaranteed interest rate of 6% for 5 years. A request
to surrender the contract is made on May 1, 2007. At the time, the Contract
Value will have accumulated to $11,127.11. The number of whole years
remaining in the guarantee period is 3.
- - On May 1, 2007 the interest rate declared by Pruco Life for a guarantee
period of 4 years (the number of whole years remaining plus 1) is 5%.
The following computations would be made:
1) Calculate the Charge Free Amount. The Charge Free Amount is the interest
credited in the contract in the previous contract year. This amount is
$600.00. It is not subject to a Market Value Adjustment.
2) Subtract the Charge Free Amount from the Contract Value. The result is the
amount subject to a Market Value Adjustment (MVA).
$11,127.11 - $600.00 = $10,527.11
3) Determine the Market Value Adjustment factor.
<Table>
N = 38
I = 6% (0.06)
J = 5% (0.05)
</Table>
The MVA factor calculation would be:
([(1.06)/(1.05)] to the power of (38/12)) -1 = 0.03047
29
MARKET-VALUE ADJUSTMENT FORMULA CONTINUED
- --------------------------------------------------------------------------------
PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
4) Multiply the amount subject to a Market Value Adjustment by the factor
calculated in Step 3.
$10,527.11 X 0.03047 = $320.76
5) Add together the Market Value Adjustment and the amount subject to the MVA.
$10,527.11 + $320.76 = $10,847.87
6) Add back the Charge Free Amount to get the total Contract Surrender Value.
$10,847.87 + $600.00 = $11,447.87
The MVA may not always be positive. Here is an example where it is negative.
- - Suppose a contract owner made an invested purchase payment of $10,000 on July
1, 2005 and received a guaranteed interest rate of 6% for 5 years. A request
to surrender the contract is made on May 1, 2007. At the time, the Contract
Value will have accumulated to $11,127.11. The number of whole years
remaining in the guarantee period is 3.
- - On May 1, 2007 the interest rate declared by Pruco Life for a guarantee
period of 4 years (the number of whole years remaining plus 1) is 7%.
The following computations would be made:
1) Calculate the Charge Free Amount. The Charge Free Amount is the interest
credited in the contract in the previous contract year. This amount is
$600.00. It is not subject to a Market Value Adjustment (MVA).
2) Subtract the Charge Free Amount from the Contract Value. The result is the
amount subject to a Market Value Adjustment.
$11,127.11 - $600.00 = $10,527.11
3) Determine the Market Value Adjustment factor.
<Table>
N = 38
I = 6% (0.06)
J = 7% (0.07)
</Table>
The MVA factor calculation would be:
([(1.06)/(1.07)] to the power of (38/12)) -1 = -0.02930
4) Multiply the amount subject to a Market Value Adjustment by the factor
calculated in Step 3.
$10,527.11 X -0.02930 = -$308.44
5) Add together the Market Value Adjustment and the amount subject to the MVA.
$10,527.11 - $308.44 = $10,218.67
6) Add back the Charge Free Amount to get the total Contract Surrender Value.
$10,218.67 + $600.00 = $10,818.67
(PENNSYLVANIA)
The following will illustrate the application of the Market-Value Adjustment.
For simplicity, surrender charges are ignored in these hypothetical examples.
Positive market value adjustment
- - Suppose a contract owner made an invested purchase payment of $10,000 on July
1, 2005 and received a guaranteed interest rate of 6% for 5 years. A request
to surrender the contract is made on May 1, 2007. At the time, the Contract
Value has accumulated to $11,127.11. The number of whole years remaining in
the guarantee period is 3.
- - On May 1, 2007 the interest rate declared by Pruco Life for a guarantee
period of 3 years (the number of whole years remaining) is 4%, and for a
guarantee period of 4 years (the number of whole years remaining plus 1) is
5%.
The following computations would be made:
1) Calculate the Charge Free Amount. The Charge Free Amount is the interest
credited in the contract in the previous contract year. This amount is
$600.00. It is not subject to a Market Value Adjustment.
2) Subtract the Charge Free Amount from the Contract Value. The result is the
amount subject to a Market Value Adjustment (MVA).
$11,127.11 - $600.00 = $10,527.11
3) Determine the Market Value Adjustment factor.
<Table>
N = 38
I = 6% (0.06)
J = [(61/365) X 0.05] + [((365-61)/365) X 0.04] =
0.0417
</Table>
The MVA factor calculation would be:
([(1.06)/(1.0417 + .0025)] to the power of (38/12)) -1 = .04871
30
- --------------------------------------------------------------------------------
PART II
STRATEGIC PARTNERS GUARANTEED RATE ANNUITY PROSPECTUS SECTIONS 1-9
4) Multiply the amount subject to a Market Value Adjustment by the factor
calculated in Step 3.
$10,527.11 X 0.04871 = $512.78
5) Add together the Market Value Adjustment and the amount subject to the MVA.
$10,527.11 + $512.78 = $11,039.89
6) Add back the Charge Free Amount to get the total Contract Surrender Value.
$11,039.89 + $600.00 = $11,639.89
The MVA may not always be positive. Here is an example where it is negative.
- - Suppose a contract owner made an invested purchase payment of $10,000 on July
1, 2005 and received a guaranteed interest rate of 6% for 5 years. A request
to surrender the contract is made on May 1, 2007. At the time, the Contract
Value has accumulated to $11,127.11. The number of whole years remaining in
the guarantee period is 3.
- - On May 1, 2007 the interest rate declared by Pruco Life for a guarantee
period of 3 years (the number of whole years remaining) is 7%, and for a
guarantee period of 4 years (the number of whole years remaining plus 1) is
8%.
The following computations would be made:
1) Calculate the Charge Free Amount. The Charge Free Amount is the interest
credited in the contract in the previous contract year. This amount is
$600.00. It is not subject to a Market Value Adjustment.
2) Subtract the Charge Free Amount from the Contract Value. The result is the
amount subject to a Market Value Adjustment (MVA).
$11,127.11 - $600.00 = $10,527.11
3) Determine the Market Value Adjustment Factor.
<Table>
N = 38
I = 6% (0.06)
J = [(61/365) X 0.08] + [((365 - 61)/365) X 0.07] =
0.0717
</Table>
The MVA Factor calculation would be:
([(1.06)/(1.0717 + .0025)] to the power of (38/12)) -1 = -0.04126
4) Multiply the amount subject to a Market Value Adjustment by the factor
calculated in Step 3.
$10,527.11 X -0.04126 = -$434.35
5) Add together the Market Value Adjustment and the amount subject to the MVA.
$10,527.11 - $434.35 = $10,092.76
6) Add back the Charge Free Amount to get the total Contract Surrender Value.
$10,092.76 + $600.00 = $10,692.76
31
ORD01124
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Registration Fees
Pruco Life registered $500 million of interests in the market value adjusted
annuity contracts described in this registration statement. Pruco Life has paid
$46,000 to the SEC for the registration fees required under the Securities Act
of 1933.
Federal Taxes
Pruco Life Insurance Company estimates the federal tax effect associated with
the deferred acquisition costs attributable to receipt of $50 million of
purchase payments over a two year period (from 2004 to 2006) to be approximately
$185,000.
State Taxes
Pruco Life estimates that approximately $10,000 in premium taxes will be owed
upon receipt of $50 million of purchase payments under the contracts, and that
additional premium taxes in the approximate amount of $100,000 would be owed if
the full $500 million of purchase payments were applied to annuity options. The
taxes set forth here are an estimate, based on the amount of purchase payments
we expect to receive during the next two years (from 2004 to 2006).
Printing Costs
Pruco Life estimates that the cost of printing prospectuses for the amount of
securities registered herein will be approximately $23,866.
Legal Costs
This registration statement was prepared by Prudential attorneys whose time is
allocated to Pruco Life.
Accounting Costs
PricewaterhouseCoopers LLP, the independent registered public accounting firm
that audits Pruco Life's financial statements, charges approximately $4,000 in
connection with each filing of this registration statement with the Commission.
Premium Paid to Indemnify Officers
Officers and Directors of Pruco Life Insurance Company are indemnified under a
policy that also covers officers and directors of other entities controlled by
Prudential Financial, Inc. A portion of the cost of that policy is attributed to
Pruco Life.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant, in conjunction with certain of its affiliates, maintains
insurance on behalf of any person who is or was a trustee, director, officer,
employee, or agent of the Registrant, or who is or was serving at the request of
the Registrant as a trustee, director, officer, employee or agent of such other
affiliated trust or corporation, against any liability asserted against and
incurred by him or her arising out of his or her position with such trust or
corporation.
Arizona, the state of organization of Pruco Life Insurance Company ("Pruco"),
permits entities organized under its jurisdiction to indemnify directors and
officers with certain limitations. The relevant provisions of Arizona law
permitting indemnification can be found in Section 10-850 et. seq. of the
Arizona Statutes Annotated. The text of Pruco's By-law, Article VIII, which
relates to
indemnification of officers and directors, is incorporated by reference to
Exhibit 3(ii) to its form 10-Q filed August 15, 1997.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended (the "Securities Act") may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the foregoing provisions
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS
(1) Form of a Distribution Agreement between Prudential Investment Management Services, Inc.,
("PIMS") (Principal Underwriter) and Pruco Life Insurance Company (Depositor). (Note 2)
(1a) Amendment No. 1 to Distribution Agreement between PIMS and Pruco Life Insurance
Company. (Note 6)
(4) Form of Contract (Note 6)
(4)(a) Form of Application (Note 6)
(5) Opinion of Counsel as to the legality of the securities being registered. (Note 1)
(23) Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.
(Note 1)
(24) Powers of Attorney:
(a) Helen M. Galt (Note 3)
(b) James J. Avery, Jr. (Note 4)
(c) David R. Odenath, Jr., Ronald P. Joelson. (Note 5)
(d) C. Edward Chaplin, John Chieffo, Bernard J. Jacob (Note 7)
(Note 1) Filed herewith.
(Note 2) Incorporated by reference to Post Effective Amendment No. 4 on Form S-1, Registration No. 33-
61143, filed April 15, 1999, on behalf the Pruco Life Insurance Company.
(Note 3) Incorporated by reference to Post-Effective Amendment No. 5 to Form S-6, Registration No.
333-85115, filed on or about June 28, 2001 on behalf of the Pruco Life Variable Universal Account.
(Note 4) Incorporated by reference to Post-Effective Amendment No. 2 to Form S-6, Registration No.
333-07451, filed June 25, 1997 on behalf of the Pruco Life Variable Appreciable Account.
(Note 5) Incorporated by reference to initial Registration on Form N-4, Registration No. 333-52754, filed
December 26, 2000 on behalf of the Pruco Life Flexible Premium Variable Annuity Account.
(Note 6) Incorporated by reference to Pre-Effective Amendment No. 1 to Form S-1, Registration No. 333-
89530, filed September 27, 2002, on behalf of Pruco Life Insurance Company.
(Note 7) Incorporated by reference to Post-Effective Amendment No. 14 to Form N-4 to Registration No.
333-37228, filed November 15, 2004 on behalf of Pruco Life Flexible Premium Variable Annuity Account.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10 (a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information in the
registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at the time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
(4) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to section 13(a) or section 15(d)
of the Securities Exchange Act of 1934 that is incorporated by reference
in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(5) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this post-effective
amendment to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Newark, State of New Jersey, on this 6th day of
April, 2006.
PRUCO LIFE INSURANCE COMPANY
(Registrant)
By: /s/ BERNARD J. JACOB
------------------------
BERNARD J. JACOB
PRESIDENT AND DIRECTOR
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<Table>
SIGNATURE AND TITLE
/s/* April 6, 2006
-----------------------------------
JAMES J. AVERY, JR.
VICE CHAIRMAN AND DIRECTOR
/s/* *By: /s/ CLIFFORD E. KIRSCH
----------------------------------- ---------------------------
BERNARD J. JACOB CLIFFORD E. KIRSCH
PRESIDENT AND DIRECTOR (ATTORNEY-IN-FACT)
/s/*
---------------------------------------------
JOHN CHIEFFO
VICE PRESIDENT, CHIEF ACCOUNTING
OFFICER AND PRINCIPAL FINANCIAL OFFICER
/s/*
---------------------------------------------
RONALD P. JOELSON
DIRECTOR
/s/*
---------------------------------------------
C. EDWARD CHAPLIN
SENIOR VICE PRESIDENT AND DIRECTOR
/s/*
---------------------------------------------
HELEN M. GALT
DIRECTOR
/s/*
---------------------------------------------
DAVID R. ODENATH, JR.
DIRECTOR
</Table>
EXHIBIT INDEX
(5) Opinion of Counsel
(23) Written Consent of PricewaterhouseCoopers LLP, Independent Registered
Public Accounting Firm