T-MARK
PROSPECTUS
T-Mark Contracts are group or individual modified guaranteed annuities
("Contracts"), which provide a guaranteed fixed rate of return for Your
investment if You do not surrender Your Contract before the Guarantee Period
ends. Generally, if You do surrender Your Contract before the Guarantee Period
ends, Your Cash Value will be subject to a Market Value Adjustment and surrender
charges.
This prospectus explains:
- the Contract (single Purchase Payment)
- the MetLife Insurance Company of Connecticut and MetLife of CT
Separate Account MGA
- the Guarantee Periods and interest rates
- surrenders
- surrender charges
- Market Value Adjustment
- death benefit
- Annuity Payments
- other aspects of the Contract
This Contract is issued by MetLife Insurance Company of Connecticut. The Company
is located at 1300 Hall Boulevard, Bloomfield, Connecticut 06002-2910. The
telephone number is 1-800-599-9460. MetLife Investors Distribution Company, 5
Park Plaza, Suite 1900, Irvine, California 92614, is the principal underwriter
and distributor of the Contracts.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR THE ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
MUTUAL FUNDS, ANNUITIES AND INSURANCE PRODUCTS ARE NOT DEPOSITS OF ANY BANK, AND
ARE NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENT AGENCY.
PROSPECTUS DATED APRIL 30, 2010
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
----
Special Terms........................................................... 3
Summary................................................................. 5
The Insurance Company................................................... 6
The Contracts........................................................... 6
Application and Purchase Payment...................................... 6
Right to Cancel....................................................... 7
Civil Unions.......................................................... 7
Guarantee Periods....................................................... 8
Establishment of Guaranteed Interest Rates.............................. 9
Surrenders.............................................................. 9
General............................................................... 9
Surrender Charge...................................................... 9
Market Value Adjustment............................................... 10
Waiver of Surrender Charge............................................ 10
Premium Taxes......................................................... 11
Restrictions on Financial Transactions................................ 11
Death Benefit........................................................... 11
Total Control Account................................................. 12
Annuity Period.......................................................... 12
Election of Annuity Commencement Date and Form of Annuity............. 12
Misstatement.......................................................... 12
Change of Annuity Commencement Date or Annuity Option................. 12
Annuity Options....................................................... 12
Annuity Payment....................................................... 13
Death of Annuitant After the Annuity Commencement Date................ 13
Investments by the Company.............................................. 14
Annual Statement........................................................ 14
Amendment of the Contracts.............................................. 14
Assignment of the Contracts............................................. 14
Distribution of the Contracts........................................... 14
Distribution and Principal Underwriting Agreement..................... 14
Compensation.......................................................... 15
Sale of the Contracts by Affiliates of the Company.................... 16
Federal Tax Considerations.............................................. 16
General............................................................... 17
Withdrawals........................................................... 17
Qualified Contracts................................................... 18
TSAs (ERISA and non-ERISA) -- 403(b).................................. 21
Individual Retirement Annuities ("IRAs").............................. 23
Traditional IRA Annuities............................................. 23
KEOGH................................................................. 26
401(k)................................................................ 26
Non-Qualified Annuities............................................... 26
Puerto Rico Tax Considerations........................................ 29
Information Incorporated by Reference................................... 31
Experts................................................................. 32
Independent Registered Public Accounting Firm......................... 32
Appendix A: Information Concerning Qualified Plans...................... A-1
Appendix B: Market Value Adjustment..................................... B-1
</Table>
2
SPECIAL TERMS
- --------------------------------------------------------------------------------
In this prospectus, the following terms have the indicated meanings:
ACCOUNT -- The Cash Value or Cash Surrender Value credited to a participant or
Owner.
ACCUMULATION PERIOD -- The period before the commencement of Annuity Payments.
ACCUMULATED VALUE -- The Purchase Payment plus all interest earned, minus all
surrenders, surrender charges and applicable Premium Tax previously deducted.
ANNUITANT -- A person on whose life the maturity date depends and Annuity
Payments are made.
ANNUITY COMMENCEMENT DATE -- The date on which Annuity Payments are to start.
The date may be designated in the Contract or elected by the Owner.
ANNUITY PAYMENTS -- A series of periodic payments (a) for life; (b) for life
with a minimum number of payments; (c) for the joint lifetime of the Annuitant
and another person, and thereafter during the lifetime of the survivor; or (d)
for a fixed period.
ANNUITY PERIOD -- The period during which Annuity Payments are made.
BENEFICIARY (IES) -- The person(s) or trustee designated to receive any
remaining contractual benefits in the event of a participant's, Annuitant's or
Contract Owner's death, as applicable.
CASH SURRENDER VALUE -- The Cash Value less any amounts deducted upon a
withdrawal or surrender, outstanding loans, if available under the Contract, any
applicable Premium Taxes or other surrender charges not previously deducted.
CASH VALUE -- The Maturity Value of a deposit on the maturity date or the
market adjusted value before the maturity date of that deposit.
CODE -- The Internal Revenue Code of 1986, as amended, and all related laws and
regulations, which are in effect during the term of this Contract.
COMPANY (WE, US, OUR) -- MetLife Insurance Company of Connecticut.
CONTRACT -- For convenience, means the Contract or certificate, (if applicable).
For example, Contract Year also means certificate year.
CONTRACT DATE -- The date on which the Contract is issued. For certain group
Contracts, it is the date on which the Contract becomes effective, as shown on
the specifications page of the Contract.
CONTRACT OWNER -- The person named in the Contract (on the specifications page).
For certain group Contracts, the Contract Owner is the trustee or other entity
which owns the Contract.
CONTRACT YEAR -- A continuous twelve-month period beginning on the Contract Date
and each anniversary thereof. Contract Year also means certificate year.
DEPOSIT -- The premium payment applied to the Contract less Premium Taxes if
applicable.
DUE PROOF OF DEATH -- (a) A copy of a certified death certificate; (b) a copy of
a certified decree of a court of competent jurisdiction as to the finding of
death, (c) a written statement by a medical doctor who attended the deceased; or
(d) any other proof satisfactory to Us.
ERISA -- The Employee Retirement Income Security Act of 1974, as amended, and
all related laws and regulations which are in effect during the term of this
Contract.
FREE INTEREST/ FREE WITHDRAWAL AMOUNT -- The interest credited in the previous
Contract Year which is not subject to a surrender charge or a Market Value
Adjustment.
GOOD ORDER -- A request or transaction generally is considered in "Good Order"
if it complies with our administrative procedures and the required information
is complete and accurate. A request or transaction may be
3
rejected or delayed if not in Good Order. If You have any questions, You should
contact Us or Your sales representative before submitting the form or request.
GUARANTEE PERIOD -- The period for which either an initial or subsequent
Guaranteed Interest Rate is credited.
GUARANTEED INTEREST RATE -- The annual effective interest rate credited during
the Guarantee Period.
HOME OFFICE -- The principal executive offices of MetLife Insurance Company of
Connecticut located at 1300 Hall Boulevard, Bloomfield, Connecticut 06002-2910.
The office that administers Your Contract is located at 4700 Westown Parkway,
Ste. 200, West Des Moines, Iowa 50266.
MARKET VALUE ADJUSTMENT -- The Market Value Adjustment reflects the
relationship, at the time of surrender, between the then-current Guaranteed
Interest Rate for a Guarantee Period equal to the duration left in your
Guarantee Period, and the Guaranteed Interest Rate that applies to your
Contract.
MATURITY VALUE -- The accumulated value of a Purchase Payment at the Guaranteed
Interest Rate at the end of the Guarantee Period selected, minus all surrenders,
surrender charges and Premium Taxes previously deducted.
OWNER -- For an individual Contract, the person or entity to whom the individual
Contract is issued. For a group Contract, the person or entity to whom the
certificate under a group annuity Contract is issued.
PLAN -- The Plan or the arrangement used in a retirement plan or program whereby
the Purchase Payments and any gains are intended to qualify under Sections 401,
403(b) or 457 of the Code.
PREMIUM TAX -- The amount of tax, if any, charged by the state or municipality.
Generally, We will deduct any applicable Premium Tax from the Cash Value either
upon surrender, annuitization, death, or at the time a Purchase Payment is made,
but no earlier than when We have the liability under state law.
PURCHASE PAYMENTS-- The premium payments applied to the Contract less any
Premium Taxes if applicable.
QUALIFIED CONTRACT -- A Contract used in a retirement Plan or program that is
intended to qualify under Sections 401, 403, 408, 414(d) or 457 of the Code.
WRITTEN REQUEST --Written instructions or information sent to Us in a form and
content satisfactory to Us and received in Good Order at Our Home Office.
YOU, YOUR -- "You", depending on the context, may be the participant or the
Contract Owner and a natural person, a trust established for the benefit of a
natural person, a charitable remainder trust, or a Plan (or the employer
purchaser who has purchased the Contract on behalf of the Plan).
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SUMMARY
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MetLife Insurance Company of Connecticut (the "Company," "We," "Us"), a wholly-
owned subsidiary of MetLife, Inc., is offering group and individual modified
guaranteed annuity Contracts to eligible individuals. If a group Contract is
purchased, We issue certificates to the individual participants. Where We refer
to "You," We are referring to the individual Contract Owner or to the group
participant, as applicable. For convenience, this prospectus refers to Contracts
and certificates as "Contracts." Modified guaranteed annuities offer a
guaranteed fixed rate of return on Your principal investment if You do not
surrender Your Contract before the Guarantee Period ends. If You do surrender
Your Contract before the end of the Guarantee Period, generally Your Cash Value
is subject to a Market Value Adjustment and surrender charge (if applicable).
You may select an initial Guarantee Period from those available from the
Company. Currently, We offer Guarantee Periods up to ten years. Interest on the
Purchase Payment is credited on a daily basis and so compounded in the
Guaranteed Interest Rate. (See "Guarantee Periods" and "Establishment of
Guaranteed Interest Rates.")
At the end of each Guarantee Period, a subsequent Guarantee Period of seven days
will automatically begin unless You elect another duration within thirty days
before the Guarantee Period ends.
You may surrender Your Contract, but the Cash Value may be subject to a
surrender charge and/or a Market Value Adjustment. A full or partial surrender
made prior to the end of a Guarantee Period will be subject to a Market Value
Adjustment. The surrender charge will be assessed as a percentage of the Cash
Value withdrawn as follows:
<Table>
<Caption>
YEARS SINCE SURRENDER
DEPOSIT MADE CHARGE
- ------------ ---------
0-1 7%
2 6%
3 5%
4 4%
5 3%
6 or more 0%
</Table>
The surrender charges listed above apply to full or partial surrenders,
regardless of the length of the Guarantee Period selected. The surrender charge
will apply if a surrender occurs at the expiration date of the Guarantee Period
for Deposits in the Contract less than five years.
There is no Market Value Adjustment if You surrender at the end of a Guarantee
Period. Any such surrender request must be in writing and received by Us within
30 days before the Guarantee Period ends. You may request any interest that has
been credited during the prior Contract Year. No surrender charge or Market
Value Adjustment will be imposed on such interest payments; however, all
applicable Premium Taxes will be deducted. Any such surrender may also be
subject to federal and state taxes. (See "Surrenders and Federal Tax
Considerations.")
The Market Value Adjustment reflects the relationship between the current
Guaranteed Interest Rate for the time left in the Guarantee Period at surrender
and the Guaranteed Interest Rate that applies to Your Contract. The Market Value
Adjustment amount primarily depends on the interest rates the Company receives
on its investments when the current Guaranteed Interest Rates are established.
The Market Value Adjustment is sensitive, therefore, to changes in interest
rates. It is possible that the amount You receive upon surrender may be less
than Your original Purchase Payment if interest rates increase. It is also
possible that if interest rates decrease, the amount You receive upon surrender
may be more than Your original Purchase Payment plus accrued interest.
On the Annuity Commencement Date specified by You, the Company will make either
a lump sum payment or start to pay a series of payments based on the annuity
options You select. (See "Annuity Period".)
If a participant under a group Contract or an Annuitant under an individual
Contract dies before the Annuity Commencement Date, We will pay a death benefit
to the Beneficiary. This death benefit equals (a) the greater of the Cash Value
or the Accumulated Value of the Contract if death occurs before age 65 or (b)
the Cash Value of the Contract if death occurs on or after age 65, less any
applicable Premium Tax.
5
We will deduct any applicable Premium Taxes from the Cash Value either upon
death, surrender, annuitization, or at the time the Purchase Payment is made to
the Contract. (See "Surrenders -- Premium Taxes".)
THE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MetLife Insurance Company of Connecticut is a stock insurance company chartered
in 1863 in the state of Connecticut and has been continuously engaged in the
insurance business since that time. It is licensed to conduct life insurance
business in all states of the United States, the District of Columbia, Puerto
Rico, Guam, the U.S. and British Virgin Islands and the Bahamas. The Company is
a wholly-owned subsidiary of MetLife, Inc., a publicly traded company. MetLife,
Inc., through its subsidiaries and affiliates, is a leading provider of
insurance and other financial services to individual and institutional
customers. The Company's home office is located at 1300 Hall Boulevard,
Bloomfield, Connecticut 06002-2910. The office that administers Your Contract is
located at 4700 Westown Parkway, Ste. 200, West Des Moines, Iowa 50266.
Purchase Payments made to this Contract are invested in the MetLife of CT
Separate Account MGA. We have exclusive and absolute ownership and control of
the assets of the separate account. It is a non-unitized separate account. You
do not share in the investment performance of assets allocated to the separate
account. The obligations under this Contract are independent of the investment
performance of the separate account and are Our obligations.
The separate account's assets are solely for the benefit of those who invest in
the separate account and no one else, including Our creditors. The assets of the
separate account are held in Our name on behalf of the separate account and
legally belong to Us. All the income, gains and losses (realized or unrealized)
resulting from these assets are credited to or charged against the Contracts
issued from the separate account without regard to Our other business.
We are obligated to pay all money We owe under the Contracts -- such as death
benefits and income payments -- even if that amount exceeds the assets in the
separate account. Any such amount that exceeds the assets in the separate
account is paid from Our general account. Amounts paid from the general account
are subject to the financial strength and claims paying ability of the Company
and Our long term ability to make such payments. We issue other annuity
contracts and life insurance policies where We pay all money We owe under those
contracts and policies from Our general account. The Company is regulated as an
insurance company under state law, which includes generally limits on the amount
and type of investments in its general account. However, there is no guarantee
that We will be able to meet Our claims paying obligations; there are risks to
purchasing any insurance product.
THE CONTRACTS
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APPLICATION AND PURCHASE PAYMENT
For the Company to issue a Contract to You, You must:
- Complete an application or an order to purchase
- Include Your minimum Purchase Payment of at least $5,000 and
- Submit both to Our Home Office for approval.
The Company may:
- Accept Purchase Payments up to $1 million within a 12 month period
without prior approval;
- Contact You or Your agent if the application or order form is not
properly completed; and
- Return Your entire application or order form and Purchase Payment if
not properly completed.
We accept Purchase Payments made by check or cashier's check. We do not accept
cash, money orders or traveler's checks. We reserve the right to refuse Purchase
Payments made via a personal check in excess of $100,000. Purchase Payments over
$100,000 may be accepted in other forms, including but not limited to, EFT/wire
transfers,
6
certified checks, corporate checks, and checks written on financial
institutions. The form in which We receive a Purchase Payment may determine how
soon subsequent disbursement requests may be fulfilled.
RIGHT TO CANCEL
You may return Your Contract to Us at Our Home Office within 10 days of Your
original Purchase Payment in most states. Refer to Your Contract for any state-
specific information.
CIVIL UNIONS
Under the Code, spousal continuation and certain distribution options are
available only to a person who is defined as a "spouse" under the federal
Defense of Marriage Act or other applicable federal law. All Contract provisions
will be interpreted and administered in accordance with the requirements of the
Code. Therefore, under current federal law, a purchaser who has or is
contemplating a civil union or same-sex marriage should note that the favorable
tax treatment afforded under federal law would not be available to such same-sex
partner or same-sex spouse. Same-sex partners or spouses who own or are
considering the purchase of annuity products that provide benefits based upon
status as a spouse should consult a tax advisor.
7
GUARANTEE PERIODS
- --------------------------------------------------------------------------------
You will select the duration of the Guarantee Period and corresponding
Guaranteed Interest Rate. Your Purchase Payment will earn interest at the
Guaranteed Interest Rate during the entire Guarantee Period. All interest earned
will be credited daily; this compounding effect is reflected in the Guaranteed
Interest Rate.
EXAMPLE OF COMPOUNDING AT THE GUARANTEED INTEREST RATE
<Table>
Beginning account value: $50,000
Guarantee Period: 5 years
Guaranteed Interest Rate: 5.50% Annual Effective Rate
</Table>
<Table>
<Caption>
END OF CONTRACT YEAR
------------------------------------------------------------------
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
---------- ---------- ---------- ---------- ----------
Beginning account value $50,000.00
X (1 + Guaranteed Interest Rate) 1.055
---------- ---------- ---------- ---------- ----------
$52,750.00
========== ========== ========== ========== ==========
account value at end of Contract Year 1 $52,750.00
X (1 + Guaranteed Interest Rate) 1.055
---------- ---------- ---------- ---------- ----------
$55,651.25
========== ========== ========== ========== ==========
account value at end of Contract Year 2 $55,651.25
X (1 + Guaranteed Interest Rate) 1.055
---------- ---------- ---------- ---------- ----------
$58,712.07
========== ========== ========== ========== ==========
account value at end of Contract Year 3 $58,712.07
X (1 + Guaranteed Interest Rate) 1.055
---------- ---------- ---------- ---------- ----------
$61,941.23
========== ========== ========== ========== ==========
account value at end of Contract Year 4 $61,941.23
X (1 + Guaranteed Interest Rate) 1.055
---------- ---------- ---------- ---------- ----------
$65,348.00
========== ========== ========== ========== ==========
account value at end of Guarantee Period (i.e.
Maturity Value) $65,348.00
========== ========== ========== ========== ==========
</Table>
Total interest credited in Guarantee Period -- $65,348.00 - 50,000.00 =
$15,348.00
Account value at end of Guarantee Period -- $50,000.00 + 15,348.00 = $65,348.00
THE ABOVE EXAMPLE ASSUMES NO SURRENDERS, DEDUCTIONS FOR PREMIUM TAXES, OR PRE-
AUTHORIZED PAYMENT OF INTEREST DURING THE ENTIRE FIVE-YEAR PERIOD. A MARKET
VALUE ADJUSTMENT OR SURRENDER CHARGE MAY APPLY TO ANY SUCH INTERIM SURRENDER
(SEE "SURRENDERS"). THE HYPOTHETICAL GUARANTEED INTEREST RATES ARE ILLUSTRATIVE
ONLY AND ARE NOT INTENDED TO PREDICT FUTURE GUARANTEED INTEREST RATES TO BE
DECLARED UNDER THE CONTRACT. ACTUAL GUARANTEED INTEREST RATES DECLARED FOR ANY
GIVEN TIME MAY BE MORE OR LESS THAN THOSE SHOWN.
We will notify You about subsequent Guarantee Periods near the end of Your
current Guarantee Period. At the end of a Guarantee Period:
- You may elect a subsequent Guarantee Period by telephone or in writing
- Your account value will be transferred to the new Guarantee Period at
the Guaranteed Interest Rate offered at that time
- If You do not make any election, We will automatically transfer the
account values into a seven day Guarantee Period, which You may
transfer out of into a new Guarantee Period with no transfer,
surrender or Market Value Adjustment charge.
In no event may subsequent Guarantee Periods extend beyond the Annuity
Commencement Date then in effect.
8
ESTABLISHMENT OF GUARANTEED INTEREST RATES
- --------------------------------------------------------------------------------
When You purchase your Contract, You will know the Guaranteed Interest Rate for
the Guarantee Period You choose. We will send You a confirmation showing the
amount of Your Purchase Payment and the applicable Guaranteed Interest Rate.
After the end of each calendar year, We will send You a statement that will
show:
- Your account value as of the end of the preceding year
- all transactions regarding Your Contract during the year
- Your account value at the end of the current year
- the Guaranteed Interest Rate being credited to Your Contract.
The Company has no specific formula for determining Guaranteed Interest Rates in
the future. The Guaranteed Interest Rates will be declared from time to time as
market conditions dictate. (See "Investments by the Company.") In addition, the
Company may also consider various other factors in determining Guaranteed
Interest Rates for a given period, including regulatory and tax requirements,
sales commissions, administrative expenses, general economic trends and
competitive factors.
THE COMPANY WILL MAKE THE FINAL DETERMINATION AS TO GUARANTEED INTEREST RATES TO
BE DECLARED. WE CANNOT PREDICT NOR CAN WE GUARANTEE FUTURE GUARANTEED INTEREST
RATES.
SURRENDERS
- --------------------------------------------------------------------------------
GENERAL
You may make a full or partial surrender at any time, subject to certain tax law
and retirement Plan restrictions, and surrender charges described below. In the
case of all surrenders, the Cash Value and Maturity Value will be reduced.
Upon request, We will inform You of the amount payable upon a full or partial
surrender. Any full, partial or special surrender may be subject to tax. (See
"Federal Tax Considerations.")
Participants in Section 403(b) tax-deferred annuity Plans may not make
surrenders from certain amounts before the earliest of age 59 1/2, separation
from service, death, disability or hardship. (See "Federal Tax
Considerations -- Section 403(b) Plans and Arrangements.")
We may withhold payment of Cash Surrender Value or a participant's loan proceeds
if any portion of those proceeds would be derived from a Contract Owner's check
that has not yet cleared (i.e., that could still be dishonored by Your banking
institution). We may use telephone, fax, internet or other means of
communication to verify that payment from the Contract Owner's check has been or
will be collected. We will not delay payment longer than necessary for Us to
verify that payment has been or will be collected. Contract Owners may avoid the
possibility of delay in the disbursement of proceeds coming from a check that
has not yet cleared by providing Us with a certified check.
SURRENDER CHARGE
There are no front-end sales charges. A surrender charge may be assessed on
surrenders made before the end of the fifth year since Your Purchase Payment was
made. The surrender charge is computed as a percentage of the Cash Value being
surrendered.
9
<Table>
<Caption>
CHARGE AS A
YEARS SINCE PERCENTAGE OF CASH
DEPOSIT WAS MADE VALUE
- ---------------- ------------------
1 or less 7%
2 6%
3 5%
4 4%
5 3%
Thereafter 0%
</Table>
The surrender charges listed above will apply to full or partial surrenders,
regardless of the length of the Guarantee Period selected. For example, assume a
Guarantee Period of four years. In this case, any surrenders made during the
fourth year, even on the Maturity Date, will be subject to a 4% surrender
charge.
MARKET VALUE ADJUSTMENT
The Market Value Adjustment may adjust up or down the amount payable on a full
or partial withdrawal before the end of any Guarantee Period.
The Market Value Adjustment is the relationship between the then-current
Guaranteed Interest Rate for a Guarantee Period equal to the time left in Your
Guarantee Period, and the Guaranteed Interest Rate that applies to Your
Contract.
Generally, if Your Guaranteed Interest Rate is lower than or less than 0.50
percent higher than, the applicable current Guaranteed Interest Rate, then the
Market Value Adjustment will result in a lower payment upon surrender.
Conversely, if Your Guaranteed Interest Rate is more than 0.50 percent higher
than the applicable current Guaranteed Interest Rate, the Market Value
Adjustment will result in a higher payment upon surrender.
The Market Value Adjustment amount primarily depends on the level of interest
rates on the Company's investments when the current Guaranteed Interest Rates
are established. The Market Adjusted Value is sensitive, therefore, to changes
in current interest rates. It is possible that the amount You receive upon
surrender would be less than the original Purchase Payment if interest rates
increase. It is also possible that if interest rates decrease, the amount You
receive upon surrender may be more than the original Purchase Payment plus
accrued interest.
Appendix B shows the formula for calculating the Market Value Adjustment as well
as an additional illustration of the application of the Market Value Adjustment.
WAIVER OF SURRENDER CHARGE
The surrender charge will be waived if:
- an annuity payout is begun
- a level income option of at least three years' duration is begun after
the first certificate Year or Contract Year, as applicable
- the participant of a group Contract, or Annuitant of an individual
Contract becomes disabled (as defined by the Internal Revenue Service
("IRS")) subsequent to purchase of the certificate or Contract
- the participant of a group Contract, or Annuitant of an individual
Contract dies
- the participant of a group Contract, or Annuitant of an individual
Contract under a tax deferred annuity plan (403(b) Plan) retires after
age 55, provided the certificate or Contract has been in effect five
years or more and the proceeds are paid by check made payable to the
Owner of the group Contract
10
- the participant of a group Contract, or Annuitant of an individual
Contract under an individual retirement annuity plan reaches age
70 1/2, provided the certificate or Contract, as applicable, has been
in effect five years or more
- the participant of a group Contract, or Annuitant of an individual
Contract under a qualified pension or profit-sharing Plan, including a
401 (k) Plan, retires at or after age 59 1/2, provided the certificate
or Contract, as applicable, has been in effect five years or more; or
if refunds are made to satisfy the anti-discrimination test; (for
participants or Annuitants under contracts issued before May 1, 1992,
the surrender charge will also be waived if he or she retires at
normal retirement age (as defined by the Plan), provided the
certificate or Contract has been in effect one year or more) or
- the participant of a group Contract, or Annuitant of an individual
Contract under a Section 457 deferred compensation Plan retires and
the certificate or Contract has been in effect five years or more, or
if a financial hardship or disability withdrawal has been allowed by
the Plan administrator under applicable IRS rules
In addition, for individuals under a 403(b) annuity, a pension or profit-sharing
Plan, or a Section 457 deferred compensation Plan, there is a 10% free
withdrawal allowance for partial surrenders prior to the Annuity Commencement
Date. An individual under an individual retirement annuity plan who is over age
59 1/2 has a 20% free withdrawal allowance. This means that, each certificate or
Contract Year after the first such year, for the first partial surrender made in
that year, 10% (20% for individual retirement annuity plans) of his or her Cash
Value may be withdrawn without a surrender charge. All Cash Values withdrawn
will reflect any applicable Market Value Adjustment. Full surrenders are not
eligible for the free withdrawal allowance. Failure to use all or part of the
free withdrawal allowance in any certificate or Contract Year forfeits the
balance of the allowance for that year. For 403(b) Plan participants, partial
and full surrenders may be subject to restrictions. (See "Section 403(b) Plans
and Arrangements.")
PREMIUM TAXES
Certain state and local governments impose Premium Taxes. These taxes currently
range from 0% to 3.5%, depending upon the jurisdiction. The Company is
responsible for paying these taxes and will determine the method used to recover
Premium Tax expenses incurred. The Company may deduct any applicable Premium
Taxes from the Cash Value either upon death, surrender, annuitization, or at the
time the Purchase Payment is made to the Contract, but no earlier than when the
Company has a tax liability under state law.
RESTRICTIONS ON FINANCIAL TRANSACTIONS
Federal laws designed to counter terrorism and prevent money laundering might,
in certain circumstances, require Us to block a Contract Owner's ability to make
certain transactions and thereby refuse to accept any request for transfers,
withdrawals, surrenders, or death benefits, until instructions are received from
the appropriate regulator. We may also be required to provide additional
information about You and Your Contract to government regulators.
DEATH BENEFIT
- --------------------------------------------------------------------------------
If a participant under a group Contract, or an Annuitant under an individual
Contract dies before his or her Annuity Commencement Date, the death benefit
payable to the Beneficiary will equal (a) the greater of the Cash Value or the
Accumulated Value of the Contract, if death occurs before age 65; or (b) the
Cash Value of the Contract, if death occurs on or after age 65 less any
applicable Premium Tax. No Market Value Adjustment is made upon the payment of a
death benefit.
A qualified group Contract issued in connection with a qualified Plan, except
for group 403(b) annuity Contracts, will not provide a death benefit on those
Accounts held by individual participants.
The death benefit is calculated at the close of the business day on which the
Company's Home Office receives Due Proof of Death and written payment
instructions in Good Order.
11
TOTAL CONTROL ACCOUNT
If Your Contract was issued in connection with a 403(b) Plan, Your Beneficiary
may elect to have the Contract's death benefit proceeds paid through an account
called the Total Control Account at the time for payment. The Total Control
Account is an interest-bearing account through which the Beneficiary has
complete access to the proceeds, with unlimited check writing privileges. We
credit interest to the account at a rate that will not be less than a minimum
guaranteed rate.
Assets backing the Total Control Accounts are maintained in Our general account
and are subject to the claims of Our creditors. We will bear the investment
experience of such assets; however, regardless of the investment experience of
such assets, the interest credited to the Total Control Account will never fall
below the applicable guaranteed minimum rate. Because We bear the investment
experience of the assets backing the Total Control Account, We may receive a
profit from these assets. The Total Control Account is not insured by the FDIC
or any other governmental agency.
ANNUITY PERIOD
- --------------------------------------------------------------------------------
ELECTION OF ANNUITY COMMENCEMENT DATE AND FORM OF ANNUITY
You can select an Annuity Commencement Date at the time You apply for a
Contract. If no date is elected, for nonqualified Contracts, the automatic
default age is 75 (or ten years after the date of purchase, if later). For
Qualified Contracts, the automatic default age is 70. Within 30 days before Your
Annuity Commencement Date, You may elect to have all or a portion of Your Cash
Surrender Value paid in a lump sum on Your Annuity Commencement Date. Or, at
least 30 days before the Annuity Commencement Date, You may elect to have Your
Cash Value or a portion thereof (less applicable Premium Taxes, if any)
distributed under any of the annuity options described below.
If no option is elected and You do not have a spouse on the Annuity Commencement
Date, the Cash Value will be applied on the Annuity Commencement Date under the
second option to provide a life annuity with 120 monthly payments certain. If
You do have a spouse, the Cash Value will be applied to option 4, to provide a
Joint and Last Survivor Life Annuity.
MISSTATEMENT
We may require proof of age or, where not prohibited by state law, sex of the
Contract Owner, Beneficiary or Annuitant before making any payments under this
Contract that are measured by the Contract Owner's, Beneficiary's or Annuitant's
life. If the age or, where not prohibited by state law, sex of the measuring
life has been misstated, the amount payable will be the amount that would have
been provided at the correct age or, where not prohibited by state law, sex.
Once Annuity Payments have begun, the amount of any overpayments or
underpayments will be deducted from or added to the payment or payments made
after the adjustment. In certain states, We are required to pay interest on any
underpayments.
CHANGE OF ANNUITY COMMENCEMENT DATE OR ANNUITY OPTION
You may change the Annuity Commencement Date at any time as long as such change
is made in writing and is received by Us at least 30 days before the scheduled
Annuity Commencement Date. Once an annuity option has begun, it may not be
changed.
ANNUITY OPTIONS
Any one of the following annuity options may be elected. Annuity Payments may be
available on a monthly, quarterly, semiannual or annual basis. The minimum
amount that may be applied to annuity options is $5,000 unless We consent to a
smaller amount. Where required by state law or under a qualified retirement
plan, the Annuitant's sex will not be taken into account in calculating Annuity
Payments. Annuity rates will not be less than the rates
12
guaranteed by the Contract at the time of purchase. Due to underwriting,
administrative or Code considerations, the choice of percentage reduction and/or
the duration of the guarantee period may be limited.
Option 1 -- Life Annuity -- NO REFUND: The Company will make Annuity Payments
during the lifetime of the Annuitant ending with the last payment before death.
This option offers the maximum periodic payment, since there is no assurance of
a minimum number of payments or provision for a death benefit for Beneficiaries.
Option 2 -- Life Annuity With 120, 180, or 240 Monthly Payments Assured: The
Company will make monthly Annuity Payments during the lifetime of the Annuitant,
with the agreement that if, at the death of that person, payments have been made
for less than 120, 180, or 240 months as elected, We will continue making
payments to the Beneficiary during the remainder of the period.
Option 3 -- Cash Refund Life Annuity: The Company will make Annuity Payments
during the lifetime of the Annuitant. Upon the death of the Annuitant, the
Beneficiary will receive a payment equal to the Cash Value applied to this
option on the Annuity Commencement Date minus the dollar amount of Annuity
Payments already paid.
Option 4 -- Joint And Last Survivor Life Annuity -- NO REFUND: The Company will
make Annuity Payments during the joint lifetime of the Annuitant and a second
person. On the death of either person, We will continue making payments to the
survivor. No further payments will be made following the death of the survivor.
Option 5 -- Payments for a Fixed Period Without Life Contingency. We will make
monthly payments for the period selected. Please note that option 5 may not
satisfy minimum required distribution rules for Qualified Contracts. Consult a
tax advisor before electing this option.
Option 6 -- Other Annuity Options: An annuity payable as is mutually agreed upon
by the Company and the Annuitant or Owner, as provided in the Plan, if any.
The tables in the Contract reflect guaranteed dollar amounts of monthly payments
for each $1,000 applied under the first five annuity options listed above. Under
options 1, 2 or 3, the amount of each payment will depend upon the age (and, for
nonqualified Contracts, where not prohibited by state law, sex) of the Annuitant
at the time the first payment is due. Under option 4, the amount of each payment
will depend upon the payees' ages at the time the first payment is due (and, for
nonqualified Contracts, where not prohibited by state law, the sex of both
payees). Annuity rates will not be less than those guaranteed in the Contract.
The tables for options 1, 2, 3 and 4 are based on the Progressive Annuitant
Table (assuming births in the year 1900) with age set back two years and a net
investment rate of 3.5% per annum. If mortality appears more favorable and
interest rates so justify, at Our discretion, We may apply other tables that
will result in higher payments for each $1,000 applied under one or more of the
first four annuity options.
ANNUITY PAYMENT
The first payment under any annuity option will be made on the Annuity
Commencement Date. Subsequent payments will be made in accordance with the
manner of payment selected and are based on the first payment date.
The option elected must result in a payment at least equal to the minimum
payment amount according to Company rules then in effect. If at any time
payments are less than the minimum payment amount, the Company has the right to
change the frequency to an interval resulting in a payment at least equal to the
minimum. If any amount due is less than the minimum per year, the Company may
make other arrangements that are equitable to the Annuitant.
Once Annuity Payments have begun, no surrender of the annuity benefit can be
made for the purpose of receiving a lump-sum settlement.
DEATH OF ANNUITANT AFTER THE ANNUITY COMMENCEMENT DATE
If the Annuitant dies after the Annuity Commencement Date, any amount payable as
a death benefit will be distributed at least as rapidly as under the method of
distribution in effect.
13
INVESTMENTS BY THE COMPANY
- --------------------------------------------------------------------------------
We must invest Our assets according to applicable state laws regarding the
nature, quality and diversification of investments that may be made by life
insurance companies. In general, these laws permit investments, within specified
limits and subject to certain qualifications, in federal, state and municipal
obligations, corporate bonds, preferred and common stocks, real estate
mortgages, real estate and certain other investments. Purchase Payments made to
the Contracts are invested in Separate Account MGA, a non-unitized separate
account and are not chargeable with liabilities arising out of any other
business that the Company may conduct. Owners do not share in the investment
performance of assets allocated to Separate Account MGA. The obligations under
the Contract are independent of the investment performance of Separate Account
MGA and are the obligations of the Company.
In establishing Guaranteed Interest Rates, the Company will consider the yields
on fixed income securities that are part of the Company's current investment
strategy for the Contracts at the time that the Guaranteed Interest Rates are
established. (See "Establishment of Guaranteed Interest Rates".) The current
investment strategy for the Contracts is to invest in fixed income securities,
including public bonds, privately placed bonds, and mortgages, some of which may
be zero coupon securities. While this generally describes our investment
strategy, We are not obligated to follow any particular strategy except as may
be required by federal and state laws.
ANNUAL STATEMENT
- --------------------------------------------------------------------------------
At the end of each calendar year, You will receive a statement that will show:
- Your Cash Value as of the end of the preceding year;
- all transactions regarding Your Contract during the year;
- Your Cash Value at the end of the current year; and
- the interest credited to Your Contract.
AMENDMENT OF THE CONTRACTS
- --------------------------------------------------------------------------------
We reserve the right to amend the Contracts to comply with applicable federal or
state laws or regulations. We will notify You in writing of any such amendments.
ASSIGNMENT OF THE CONTRACTS
- --------------------------------------------------------------------------------
Our rights as evidenced by a Contract may be assigned as permitted by applicable
law. An assignment will not be binding upon Us until We receive notice from You
in writing. Ownership of Contracts issued in connection with Section 401(a),
401(k), 403(c), 403(b), 408, 414(d) or 457 plans may not generally be assigned.
We assume no responsibility for the validity or effect of any assignment. You
should consult Your tax adviser regarding the tax consequences of an assignment.
DISTRIBUTION OF THE CONTRACTS
- --------------------------------------------------------------------------------
DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT
The Company has appointed MetLife Investors Distribution Company ("MLIDC") to
serve as the principal underwriter and distributor of the securities offered
through this prospectus, pursuant to the terms of a Distribution and Principal
Underwriting Agreement. MLIDC, which is an affiliate of the Company, also acts
as the principal underwriter and distributor of other annuity contracts and
variable annuity contracts and variable life insurance policies issued by the
Company and its affiliated companies. The Company reimburses MLIDC for expenses
MLIDC incurs in distributing
14
the Contracts (e.g. commissions payable to retail broker-dealers who sell the
Contracts). MLIDC does not retain any fees under the Contracts. MLIDC's
principal executive offices are located at 5 Park Plaza, Suite 1900, Irvine, CA
92614.
MLIDC is registered as a broker-dealer with the Securities and Exchange
Commission ("SEC") under the Securities Exchange Act of 1934, as well as the
securities commissions in the states in which it operates, and is a member of
the Financial Industry Regulatory Authority ("FINRA"). FINRA provides background
information about broker-dealers and their registered representatives through
FINRA BrokerCheck. You may contact the FINRA BrokerCheck Hotline 1-800-289-9999,
or log on to www.finra.org. An investor brochure that includes information
describing FINRA BrokerCheck is available through the Hotline or on-line.
MLIDC and the Company enter into selling agreements with affiliated and
unaffiliated broker-dealers who are registered with the SEC and are members of
FINRA, and with entities that may offer the Contracts but are exempt from
registration. Applications for the Contract are solicited by registered
representatives who are associated persons of such affiliated or unaffiliated
broker-dealer firms. Such representatives act as appointed agents of the Company
under applicable state insurance law and must be licensed to sell variable
insurance products. The Company intends to offer the Contract in all
jurisdictions where it is licensed to do business and where the Contract is
approved. The Company no longer offers the Contracts to new purchasers, but it
continues to accept Purchase Payments from existing Contract Owners.
COMPENSATION
Broker-dealers who have selling agreements with MLIDC and the Company are paid
compensation for the promotion and sale of the Contracts. Registered
representatives who solicit sales of the Contract typically receive a portion of
the compensation payable to the broker-dealer firm. The amount the registered
representative receives depends on the agreement between the firm and the
registered representative. This agreement may also provide for the payment of
other types of cash and non-cash compensation and other benefits. A broker-
dealer firm or registered representative of a firm may receive different
compensation for selling one product over another and/or may be inclined to
favor one product provider over another product provider due to differing
compensation rates.
We generally pay compensation as a percentage of Purchase Payments invested in
the Contract. Alternatively, We may pay lower compensation on Purchase Payments
but pay periodic asset-based compensation based on all or a portion of the
contract value. The amount and timing of compensation may vary depending on the
selling agreement but is not expected to exceed 7% of Purchase Payments.
The Company and MLIDC have also entered into preferred distribution arrangements
with certain broker-dealer firms. These arrangements are sometimes called "shelf
space" arrangements. Under these arrangements, the Company and MLIDC pay
separate, additional compensation to the broker-dealer firm for services the
broker-dealer provides in connection with the distribution of the Company's
products. These services may include providing the Company with access to the
distribution network of the broker-dealer, the hiring and training of the
broker-dealer's sales personnel, the sponsoring of conferences and seminars by
the broker-dealer, or general marketing services performed by the broker-dealer.
The broker-dealer may also provide other services or incur other costs in
connection with distributing the Company's products.
These preferred distribution arrangements will not be offered to all broker-
dealer firms and the terms of such arrangements may differ between broker-dealer
firms. Compensation payable under such arrangements may be based on aggregate,
net or anticipated sales of the Contracts, total assets attributable to sales of
the Contract by registered representatives of the broker-dealer firm or based on
the length of time that a Contract Owner has owned the Contract. Any such
compensation payable to a broker-dealer firm will be made by MLIDC or the
Company out of their own assets and will not result in any additional direct
charge to You. Such compensation may cause the broker-dealer firm and its
registered representatives to favor the Company's products. The Company and
MLIDC have entered into preferred distribution arrangements with their affiliate
Tower Square Securities, Inc. as well as with unaffiliated broker-dealer firms.
The Company may enter into similar arrangements with its other affiliates
MetLife Securities, Inc., Walnut Street Securities, Inc. and New England
Securities Corporation. A list of unaffiliated broker-dealer firms which have
entered into such arrangements is on Our website.
15
SALE OF THE CONTRACTS BY AFFILIATES OF THE COMPANY
The Company and MLIDC may offer the Contracts through retail broker-dealer firms
that are affiliates of the Company, including Tower Square Securities, Inc.,
MetLife Securities, Inc., Walnut Street Securities, Inc. and New England
Securities Corporation. The compensation paid to affiliated broker-dealer firms
for sales of the Contracts is generally not expected to exceed, on a present
value basis, the percentages described above. These broker-dealer firms pay
their registered representatives all or a portion of the commissions received
for their sales of Contracts; some firms may retain a portion of commissions.
The amount the broker-dealer firms pass on to their registered representatives
is determined in accordance with their internal compensation programs. These
programs may also include other types of cash compensation, such as bonuses,
equity awards (such as stock options), training allowances, supplementary
salary, financing arrangements, marketing support, medical and other insurance
benefits, retirement benefits, non-qualified deferred compensation contract
values, and other benefits. For registered representatives of certain
affiliates, the amount of this additional cash compensation is based primarily
on the amount of proprietary products sold and serviced by the representative.
Proprietary products are those issued by the Company or its affiliates. The
managers who supervise these registered representatives may also be entitled to
additional cash compensation based on the sale of proprietary products by their
representatives. Because the additional cash compensation paid to these
registered representatives and their managers is primarily based on sales of
proprietary products, these registered representatives and their managers have
an incentive to favor the sale of proprietary products over other products
issued by non-affiliates.
The Contracts are also sold through Metropolitan Life Insurance Company
("MetLife", an affiliate of the Company) licensed sales representatives who are
associated with MetLife Securities, Inc. MetLife registered representatives
receive cash payments for the products they sell and service based upon a 'gross
dealer concession' model. The cash payment is equal to a percentage of the gross
dealer concession. For MetLife registered representatives other than those in
Our MetLife Resources (MLR) Division, the percentage is determined by a formula
that takes into consideration the amount of premiums and Purchase Payments
applied to proprietary products that the registered representative sells and
services. The percentage could be as high as 100%. (MLR registered
representatives receive compensation based upon premiums and Purchase Payments
applied to all products sold and serviced by the representative.) In addition,
all MetLife registered representatives are entitled to the additional
compensation described above based on sales of proprietary products. Because
sales of proprietary products are a factor determining the percentage of gross
dealer concession and/or the amount of additional compensation to which MetLife
registered representatives are entitled, they have an incentive to favor the
sale of proprietary products. In addition, because their sales managers'
compensation is based on the sales made by the representatives they supervise,
these sales managers also have an incentive to favor the sale of proprietary
products.
The Company's affiliates also offer their registered representatives and their
managers non-cash compensation incentives, such as conferences, trips, prizes
and awards. Other non-cash compensation payments may be made for other services
that are not directly related to the sale of products. These payments may
include support services in the form of recruitment and training of personnel,
production of promotional materials and similar services.
FEDERAL TAX CONSIDERATIONS
- --------------------------------------------------------------------------------
The following information on taxes is a general discussion of the subject. It is
not intended as tax advice. The Code is complex and subject to change regularly.
Failure to comply with the tax law may result in significant adverse tax
consequences and IRS penalties. Consult Your own tax advisor about Your
circumstances, any recent tax developments, and the impact of state income
taxation. For purposes of this section, We address Contracts and Annuity
Payments under the Contracts together.
You should read the general provisions and any sections relating to Your type of
annuity to familiarize Yourself with some of the tax rules for Your particular
Contract.
You are responsible for determining whether Your purchase of a Contract,
withdrawals, Annuity Payments and any other transactions under Your Contract
satisfy applicable tax law. We are not responsible for determining if Your
employer's plan or arrangement satisfies the requirements of the Code and/or
ERISA.
Where otherwise permitted under the Contract, the transfer of ownership of a
Contract, the designation or change in designation of an Annuitant, payee or
other Beneficiary who is not also a Contract Owner, the selection of certain
16
Maturity Dates, the exchange of a Contract, or the receipt of a Contract in an
exchange, may result in income tax and other tax consequences, including
additional withholding, estate tax, gift tax and generation skipping transfer
tax, that are not discussed in this prospectus. Please consult Your tax advisor.
ANNUITY PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS. Purchasers
that are not U.S. citizens or residents will generally be subject to U.S.
federal withholding tax on taxable distributions from annuity contracts at a 30%
rate, unless a lower treaty rate applies. In addition, purchasers may be subject
to state and/or municipal taxes and taxes that may be imposed by the purchaser's
country of citizenship or residence. Prospective purchasers are advised to
consult with a qualified tax advisor regarding U.S. state and foreign taxation
with respect to purchasing an annuity Contract.
GENERAL
Contracts are a means of setting aside money for future needs-usually
retirement. Congress recognizes how important saving for retirement is and has
provided special rules in the Code.
All tax-sheltered annuities ("TSAs"), individual retirement annuities (including
Simplified Employee Pensions ("SEP"s)), Keoghs and 401(k) Plans receive tax
deferral under the Code. Although there are no additional tax benefits by
funding such retirement arrangements with an annuity, doing so offers You
additional insurance benefits such as the availability of a guaranteed income
for life.
Under current federal income tax law, the taxable portion of distributions and
withdrawals from annuity Contracts (including TSAs, 403(a) and individual
retirement annuities) are subject to ordinary income tax and are not eligible
for the lower tax rates that apply to long term capital gains and qualifying
dividends.
WITHDRAWALS
When money is withdrawn from Your Contract (whether by You or Your Beneficiary),
the amount treated as taxable income and taxed as ordinary income differs
depending on the type of annuity You purchase (e.g., individual retirement
annuities or TSA) and payment method or annuity option You elect. If You meet
certain requirements, Your designated Roth earnings are free from federal income
taxes.
We will withhold a portion of the amount of Your withdrawal for income taxes,
unless You are eligible to and elect otherwise. The amount We withhold is
determined by the Code.
WITHDRAWALS BEFORE AGE 59 1/2
Because these products are intended for retirement, if You make a taxable
withdrawal before age 59 1/2 You may incur a 10% tax penalty, in addition to
ordinary income taxes.
As indicated in the chart below, some taxable distributions prior to age 59 1/2
are exempt from the penalty. Some of these exceptions include amounts received:
<Table>
<Caption>
--------------------------------------------
TYPE OF CONTRACT
- -----------------------------------------------------------------------------------------
KEOGH,
401(A)
AND 403(B) NON-
401(K) -TSA IRA SEP QUAL
- -----------------------------------------------------------------------------------------
In a series of substantially equal payments
made annually (or more frequently) for life X(1) X(1) X X X
or life expectancy (SEPP)
- -----------------------------------------------------------------------------------------
After You die X X X X X
- -----------------------------------------------------------------------------------------
After You become totally disabled (as
defined in the Code) X X X X X
- -----------------------------------------------------------------------------------------
To pay deductible medical expenses X X X X
- -----------------------------------------------------------------------------------------
After Separation from service if You are
over 55 at time of separation(1) X X
- -----------------------------------------------------------------------------------------
</Table>
17
<Table>
<Caption>
--------------------------------------------
TYPE OF CONTRACT
- -----------------------------------------------------------------------------------------
KEOGH,
401(A)
AND 403(B) NON-
401(K) -TSA IRA SEP QUAL
- -----------------------------------------------------------------------------------------
After December 31, 1999 for IRS levies X X X X
- -----------------------------------------------------------------------------------------
To pay medical insurance premiums if You are
unemployed X X
- -----------------------------------------------------------------------------------------
For qualified higher education expenses, X X
- -----------------------------------------------------------------------------------------
For qualified first time home purchases up
to $10,000 X X
- -----------------------------------------------------------------------------------------
Pursuant to qualified domestic relations
orders X X
- -----------------------------------------------------------------------------------------
Certain immediate annuities providing a
series of substantially equal periodic
payments made annually (or more frequently) X
over the specified payment period
- -----------------------------------------------------------------------------------------
</Table>
1. You must be separated from service at the time payments begin.
SUBSTANTIALLY EQUAL PERIODIC PAYMENTS ("SEPP")
If You receive systematic payments that You intend to qualify for the SEPP
exception, any modifications (except due to death or disability) to Your payment
before age 59 1/2 or within five years after beginning SEPP payments, whichever
is later, will result in the retroactive imposition of the 10% penalty with
interest. Such modification may include additional Purchase Payments or
withdrawals (including tax-free transfers or rollovers of Annuity Payments) from
Your contract. Consult Your tax advisor.
QUALIFIED CONTRACTS -- GENERALLY
PURCHASE PAYMENTS
Generally, all Purchase Payments will be contributed on a "before-tax" basis.
This means that the Purchase Payments entitle You to a tax deduction or are not
subject to current income tax.
Under some circumstances "after-tax" Purchase Payments can be made to certain
annuities. These Purchase Payments do not reduce Your taxable income or give You
a tax deduction.
There are different annual Purchase Payments limits for the annuities offered in
this prospectus. Purchase Payments in excess of the limits may result in adverse
tax consequences.
Your Contract may accept certain direct transfers and rollovers from other
qualified Plan accounts and contracts: such transfers and rollovers are
generally not subject to annual limitations on Purchase Payments.
WITHDRAWALS, TRANSFERS AND INCOME PAYMENTS
Because Your Purchase Payments are generally on a before-tax basis, You
generally pay income taxes on the full amount of money You withdraw as well as
income earned under the Contract. Withdrawals and Annuity Payments attributable
to any after-tax contributions are not subject to income tax (except for the
portion of the withdrawal or payment allocable to earnings).
If certain requirements are met, You may be able to transfer amounts in Your
Contract to another eligible retirement plan or individual retirement annuity.
For 457(b) Plans maintained by non-governmental employers, if certain conditions
are met, amounts may be transferred into another 457(b) Plan maintained by a
non-governmental employer.
Your Contract is not forfeitable (e.g., not subject to claims of Your creditors)
and You may not transfer it to someone else. An important exception is that Your
Account may be transferred pursuant to a qualified domestic relations order
(QDRO).
Please consult the specific section for the type of annuity You purchased to
determine if there are restrictions on withdrawals, transfers or Annuity
Payments.
18
Minimum distribution requirements also apply to the Contracts. These are
described separately later in this section.
Certain mandatory distributions made to participants in an amount in excess of
$1,000 (but less than $5,000) must be automatically rolled over to an individual
retirement annuity designated by the Plan, unless the participant elects to
receive it in cash or roll it over to a different individual retirement annuity
or eligible retirement Plan.
ELIGIBLE ROLLOVER DISTRIBUTIONS AND 20% MANDATORY WITHHOLDING
We are required to withhold 20% of the taxable portion of Your withdrawal that
constitutes an "eligible rollover distribution" for federal income taxes. We are
not required to withhold this money if You direct us, the trustee or the
custodian of the Plan, to directly rollover Your eligible rollover distribution
to a traditional individual retirement annuity or another eligible retirement
Plan.
Generally, an "eligible rollover distribution" is any taxable amount You receive
from Your Contract. (In certain cases, after-tax amounts may also be considered
eligible rollover distributions). However, it does not include taxable
distributions such as:
- Withdrawals made to satisfy minimum distribution requirements
- Certain withdrawals on account of financial hardship
Other exceptions to the definition of eligible rollover distribution may exist.
For taxable withdrawals that are not "eligible rollover distributions," the Code
requires different withholding rules. The withholding amounts are determined at
the time of payment. In certain instances, You may elect out of these
withholding requirements. You may be subject to the 10% penalty tax if You
withdraw taxable money before You turn age 59 1/2.
MINIMUM DISTRIBUTION REQUIREMENTS
Generally, You must begin receiving retirement plan withdrawals by April 1 of
the latter of:
- the calendar year following the year in which You reach age 70 1/2 or
- the calendar year following the calendar year You retire, provided You
do not own 5% or more of Your employer.
For individual retirement annuities, You must begin receiving withdrawals by
April 1 of the year after You reach age 70 1/2 even if You have not retired.
You (and after Your death, Your designated Beneficiaries) generally do not have
to take the required minimum distribution ("RMD") for 2009. If Your first RMD
would have been due by April 1, 2010, You are not required to take such
distribution; however, Your 2010 RMD is due by December 31, 2010. For after-
death RMDs, the five year rule is applied without regard to calendar year 2009.
For instance, for a Contract Owner who died in 2007, the five year period would
end in 2013 instead of 2012. This RMD waiver does not apply if You are receiving
Annuity Payments under Your Contract. The RMD rules are complex, so consult with
Your tax advisor because the application of these rules to Your particular
circumstances may have been impacted by the 2009 RMD waiver.
In general the amount of required minimum distribution (including death benefit
distributions discussed below) must be calculated separately with respect to
each 403(b) arrangement, but then the aggregate amount of the required
distribution may be taken under the tax law from any one or more of the
participant's several 403(b) arrangements. Otherwise, You may not satisfy
minimum distributions for an employer's qualified Plan (i.e., 401(a), 403(a),
457(b)) with distributions from another qualified Plan of the same or a
different employer.
Complex rules apply to the calculation of these withdrawals. A tax penalty of
50% applies to withdrawals which should have been taken but were not.
In general the amount of required minimum distribution (including death benefit
distributions discussed below) must be calculated separately with respect to
each individual retirement annuity or SEP individual retirement annuity, but
then the aggregate amount of the required distribution may be generally taken
under the tax law for the individual retirement annuities /SEP individual
retirement annuities from any one or more of the taxpayer's individual
retirement annuities /SEP individual retirement annuities.
19
You may not satisfy minimum distributions for one type of qualified Plan with
distributions from an account or annuity contract under another type of
qualified Plan (e.g. individual retirement annuity and 403(b)).
In general, income tax regulations permit annuity payments to increase with
respect to actuarial gains. Additionally, these regulations permit payments
under immediate annuities to increase due to a full withdrawal or to a partial
withdrawal under certain circumstances.
The regulations also require that the value of benefits under a Contract
including certain death benefits in excess of cash value must be added to the
amount credited to Your account in computing the amount required to be
distributed over the applicable period. You should consult Your own tax advisor
as to how these rules affect Your own Contract. We will provide You with
additional information regarding the amount that is subject to minimum
distribution under this rule.
If You intend to receive Your minimum distributions which are payable over the
joint lives of You and a Beneficiary who is not Your spouse (or over a period
not exceeding the joint life expectancy of You and Your non-spousal
Beneficiary), be advised that federal tax rules may require that payments be
made over a shorter period or may require that payments to the Beneficiary be
reduced after Your death to meet the minimum distribution incidental benefit
rules and avoid the 50% excise tax. Consult Your tax advisor.
DEATH BENEFITS
The death benefit is taxable to the recipient in the same manner as if paid to
the Contract Owner (under the rules for withdrawals or Annuity Payments,
whichever is applicable).
Generally, if You die before required minimum distribution withdrawals have
begun, We must make payment of Your entire interest by December 31st of the year
that is the fifth anniversary of Your death or begin making payments over a
period and in a manner allowed by the Code to Your Beneficiary by December 31st
of the year after Your death. Consult Your tax advisor because the application
of these rules to Your particular circumstances may have been impacted by the
2009 RMD waiver (see Minimum Distribution Requirements section for additional
information).
If Your spouse is Your Beneficiary, and Your Contract permits, Your spouse may
delay the start of these payments until December 31 of the year in which You
would have reached age 70 1/2. Alternatively, if Your spouse is Your sole
Beneficiary and Your Contract is an individual retirement annuity, he or she may
elect to rollover the death proceeds into his or her own individual retirement
annuity (or, if You meet certain requirements, a Roth individual retirement
annuity and pay tax on the taxable portion of the death proceeds in the year of
the rollover) and treat the individual retirement annuity (or Roth individual
retirement annuity) as his or her own.
If Your spouse is Your Beneficiary, Your spouse may also be able to rollover the
death proceeds into another eligible retirement Plan in which he or she
participates, if permitted under the receiving Plan.
Under federal tax rules, a same-sex spouse is treated as a non-spouse
beneficiary.
If Your spouse is not Your Beneficiary and Your Contract permits, Your
Beneficiary may also be able to rollover the death proceeds via a direct
trustee-to-trustee transfer into an inherited individual retirement annuity.
However, such Beneficiary may not treat the inherited individual retirement
annuity as his or her own individual retirement annuity. Starting in 2010,
certain employer Plans (i.e. 401(a), 403(a), 403(b), and governmental 457 Plans)
are required to permit a non-spouse direct trustee-to-trustee rollover.
If You die after required distributions begin, payments of Your entire remaining
interest must be made in a manner and over a period as provided under the Code
(and any applicable regulations).
If an individual retirement annuity Contract is issued in Your name after Your
death for the benefit of Your designated Beneficiary with a Purchase Payment
which is directly transferred to the Contract from another individual retirement
annuity or eligible retirement Plan, the death benefit must continue to be
distributed to Your Beneficiary's Beneficiary in a manner at least as rapidly as
the method of distribution in effect at the time of Your Beneficiary's death.
INCIDENTAL BENEFITS
Certain death benefits may be considered incidental benefits under a tax
qualified Plan, which are limited under the Code. Failure to satisfy these
limitations may have adverse tax consequences to the Plan and to the
participant.
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Where otherwise permitted to be offered under annuity contracts issued in
connection with qualified Plans, the amount of life insurance is limited under
the incidental death benefit rules. You should consult Your own tax advisor
prior to purchase of the Contract under any type of 403(b) arrangement or
qualified Plan as a violation of these requirements could result in adverse tax
consequences to the Plan and to the participant including current taxation of
amounts under the Contract.
TAX SHELTERED ANNUITIES (ERISA AND NON-ERISA) -- 403(B)
GENERAL
Tax Sheltered Annuities fall under Section 403(b) of the Code, which provides
certain tax benefits to eligible employees of public school systems and
organizations that are tax exempt under Section 501(c)(3) of the Code.
In general contributions to 403(b) arrangements are subject to contribution
limitations under Section 415(c) of the Code (the lesser of 100% of includable
compensation or the applicable limit for the year).
On July 26, 2007, final 403(b) regulations were issued by the U.S. Treasury
which will impact how We administer Your 403(b) Contract. In order to satisfy
the 403(b) final regulations and prevent Your Contract from being subject to
adverse tax consequences including potential penalties, contract exchanges after
September 24, 2007 must, at minimum, meet the following requirements: (1) the
Plan must allow the exchange, (2) the exchange must not result in a reduction in
the participant or Beneficiary's accumulated benefit, (3) the receiving contract
includes distribution restrictions that are no less stringent that those imposed
on the contract being exchanged, and (4) the employer enters into an agreement
with the issuer of the receiving contract to provide information to enable the
contract provider to comply with Code requirements. Such information would
include details concerning severance from employment, hardship withdrawals,
loans and tax basis. You should consult Your tax or legal counsel for any advice
relating to Contract exchanges or any other matter relating to these
regulations.
WITHDRAWALS AND ANNUITY PAYMENTS
If You are under 59 1/2, You generally cannot withdraw money from Your TSA
Contract unless the withdrawal:
- Relates to Purchase Payments made prior to 1989 (and pre-1989 earnings
on those Purchase Payments).
- Is directly transferred to another permissible investment under 403(b)
arrangements;
- Relates to amounts that are not salary reduction elective deferrals if
Your Plan allows it;
- Occurs after You die, leave Your job or become disabled (as defined by
the Code);
- Is for financial hardship (but only to the extent of Purchase
Payments) if Your Plan allows it;
- Relates to distributions attributable to certain TSA Plan terminations
if the conditions of the new income tax regulations are met;
- Relates to rollover or after-tax contributions; or
- Is for the purchase of permissive service credit under a governmental
defined benefit plan.
Recent income tax regulations also provide certain new restrictions on
withdrawals of amounts from tax sheltered annuities that are not attributable to
salary reduction contributions. Under these regulations, a Section 403(b)
Contract is permitted to distribute retirement benefits to distribute retirement
benefits attributable to pre-tax contributions other than elective deferrals to
the participant no earlier than upon the earlier of the participant's severance
from employment or upon the prior occurrence of some event such as after a fixed
number of years, the attainment of a stated age, or disability.
DESIGNATED ROTH ACCOUNT FOR 403(B) PLANS
Employers that established and maintain a TSA/ 403(b) plan ("the Plan") may also
establish a Qualified Roth Contribution Program under Section 402A of the Code
("Designated Roth Accounts") to accept after tax
21
contributions as part of the TSA Plan. In accordance with Our administrative
procedures, We may permit these contributions to be made as Purchase Payments to
a 403(b) Contract under the following conditions:
- The employer maintaining the Plan has demonstrated to Our satisfaction
that Designated Roth Accounts are permitted under the Plan.
- In accordance with Our administrative procedures, the amount of
elective deferrals has been irrevocably designated as an after-tax
contribution to the Designated Roth Account.
- All state regulatory approvals have been obtained to permit the
Contract to accept such after-tax elective deferral contributions
(and, where permitted under the Qualified Roth Contribution Program
and the Contract, rollovers and trustee-to trustee transfers from
other Designated Roth Accounts).
- In accordance with Our procedures and in a form satisfactory to Us, We
may accept rollovers from other funding vehicles under any Qualified
Roth Contribution Program of the same type in which the employee
participates as well as trustee-to-trustee transfers from other
funding vehicles under the same Qualified Roth Contribution Program
for which the participant is making elective deferral contributions to
the Contract.
- No other contribution types (including employer contributions,
matching contributions, etc.) will be allowed as designated Roth
contributions, unless they become permitted under the Code.
- If permitted under the federal tax law, We may permit both pre-tax
contributions under a 403(b) Plan as well as after-tax contributions
under that Plan's Qualified Roth Contribution Program to be made under
the same Contract as well as rollover contributions and contributions
by trustee-to-trustee transfers. In such cases, We will account
separately for the designated Roth contributions and the earnings
thereon from the contributions and earnings made under the pre-tax TSA
Plan (whether made as elective deferrals, rollover contributions or
trustee-to-trustee transfers). As between the pre-tax or traditional
Plan and the Qualified Roth Contribution Program, We will allocate any
living benefits or death benefits provided under the Contract on a
reasonable basis, as permitted under the tax law.
- We may refuse to accept contributions made as rollovers and trustee-to
trustee transfers, unless We are furnished with a breakdown as between
participant contributions and earnings at the time of the
contribution.
You and Your employer should consult their own tax and legal advisors prior to
making or permitting contributions to be made to a Qualified Roth Contribution
Program.
The IRS was given authority in the final Roth account regulations to issue
additional guidance addressing the potential for improper transfers of value to
Roth accounts due to the allocation of contract income, expenses, gains and
losses. The IRS has not issued the additional guidance and, as a result, there
is uncertainty regarding the status of Roth accounts and particularly Roth
accounts under annuity contracts that allocate charges for guarantees. You
should consult Your tax or legal counsel for advice relating to Roth accounts
and other matters relating to the final Roth account regulations.
SECTION 403(B) COLLATERALIZED LOANS
If Your employer's plan and TSA Contract permits loans, such loans will be made
only up to certain limits. In that case, We credit Your Account balance up to
the amount of the outstanding loan balance with a rate of interest that is less
than the interest rate We charge for the loan.
The Code and applicable income tax regulations limit the amount that may be
borrowed from Your Contract and all of Your employer plans in the aggregate and
also require that loans be repaid, at a minimum, in scheduled level payments
over a proscribed term.
Your employer's Plan and Contract will indicate whether loans are permitted. The
terms of the loan are governed by the Contract and loan agreement. Failure to
satisfy loan limits under the Code or to make any scheduled payments according
to the terms of Your loan agreement and federal tax law could have adverse tax
consequences. Consult Your tax advisor and read Your loan agreement and Contract
prior to taking any loan.
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INDIVIDUAL RETIREMENT ANNUITIES ("IRAS")
TRADITIONAL IRAS, ROTH IRA AND SEPS
The sale of a Contract for use with an IRA may be subject to special disclosure
requirements of the IRS. Purchasers of a Contract for use with IRAs will be
provided with supplemental information required by the IRS or other appropriate
agency. A Contract issued in connection with an IRA may be amended as necessary
to conform to the requirements of the Code.
IRA Contracts may not invest in life insurance. The Contract may offer death
benefits that in some cases exceed the greater of the Purchase Payments or the
Account value which could conceivably be characterized as life insurance.
Generally, except for Roth IRAs, IRAs can accept deductible (or pre-tax)
Purchase Payments. Deductible or pre-tax Purchase Payments will be taxed when
distributed from the Contract.
You must be both the Contract Owner and the Annuitant under the Contract. Your
IRA annuity is not forfeitable and You may not transfer, assign or pledge it to
someone else. You are not permitted to borrow from the Contract. You can
transfer Your IRA proceeds to a similar IRA, certain eligible retirement plans
of an employer without incurring federal income taxes if certain conditions are
satisfied.
Consult Your tax advisor prior to the purchase of the Contract as a Traditional
IRA, Roth IRA or SEP.
TRADITIONAL IRA ANNUITIES
PURCHASE PAYMENTS
Purchase Payments (except for permissible rollovers and direct transfers) are
generally not permitted after the calendar year in which You attain age 69 1/2.
Except for permissible rollovers and direct transfers, Purchase Payments to
Traditional and Roth IRAs for individuals under age 50 are limited to the lesser
of 100% of compensation or the deductible amount established each year under the
Code. A Purchase Payment up to the deductible amount can also be made for a non-
working spouse provided the couple's compensation is at least equal to their
aggregate contributions. See IRS Publication 590 available at www.irs.gov. for
additional information.
- Individuals age 50 or older can make an additional "catch-up" Purchase
Payments (assuming the individual has sufficient compensation).
- If You are an active participant in a retirement Plan of an employer,
Your contributions may be limited.
- Purchase Payments in excess of these amounts may be subject to a
penalty tax.
- If contributions are being made under a SEP or a SAR-SEP Plan of Your
employer, additional amounts may be contributed as permitted by the
Code and the terms of the employer's Plan.
- These age and dollar limits do not apply to tax-free rollovers or
transfers from other IRAs or other eligible retirement plans.
- If certain conditions are met, You can change Your Traditional IRA
Purchase Payment to a Roth IRA before You file Your income tax return
(including filing extensions).
WITHDRAWALS AND ANNUITY PAYMENTS
Withdrawals (other than tax free transfers or rollovers to other individual
retirement arrangements or eligible retirement Plans) and Annuity Payments are
included in income except for the portion that represents a return of non-
deductible Purchase Payments. This portion is generally determined based on a
ratio of all non-deductible Purchase Payments to the total values of all Your
Traditional IRAs. We will withhold a portion of the amount of Your withdrawal
for income taxes, unless You elect otherwise. The amount We withhold is
determined by the Code. Also see general section titled "Withdrawals" above.
DEATH BENEFITS
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The death benefit is taxable to the recipient in the same manner as if paid to
the Contract Owner (under the rules for withdrawals or Annuity Payments,
whichever is applicable).
Generally, if You die before required minimum distribution withdrawals have
begun, We must make payment of Your entire interest by December 31st of the year
that is the fifth anniversary of Your death or begin making payments over a
period and in a manner allowed by the Code to Your Beneficiary by December 31st
of the year after Your death. Consult Your tax advisor because the application
of these rules to Your particular circumstances may have been impacted by the
2009 RMD waiver (see Minimum Distribution Requirements for additional
information).
If Your spouse is Your Beneficiary, and Your Contract permits, Your spouse may
delay the start of these payments until December 31 of the year in which You
would have reached age 70 1/2. Alternatively, if Your spouse is Your
Beneficiary, he or she may elect to continue as "Contract Owner" of the
Contract.
Under federal tax rules, a same-sex spouse is treated as a non-spouse
beneficiary.
If You die after required distributions begin, payments of Your entire remaining
interest must be made in a manner and over a period as provided under the Code
(and any applicable regulations).
If the Contract is issued in Your name after Your death for the benefit of Your
designated Beneficiary with a Purchase Payment which is directly transferred to
the Contract from another IRA You owned, the death benefit must continue to be
distributed to Your Beneficiary's Beneficiary in a manner at least as rapidly as
the method of distribution in effect at the time of Your Beneficiary's death.
SEP ANNUITIES
The Code provides for certain contribution limitations and eligibility
requirements under SEP arrangements. The minimum distribution requirements are
generally the same as Traditional IRAs. There are some differences in the
contribution limits and the tax treatment of certain premature distribution
rules, transfers and rollovers.
ROTH IRA ANNUITIES
GENERAL
Roth IRAs are different from other IRAs because You have the opportunity to
enjoy tax-free earnings. However, You can only make after-tax Purchase Payments
to a Roth IRA.
PURCHASE PAYMENTS
Roth IRA Purchase Payments for individuals under age 50 are non-deductible and
are limited, in a manner similar to IRAs, to the lesser of 100% of compensation
or the annual deductible IRA amount. This limit includes contributions to all
Your Traditional and Roth IRAs for the year. Individuals age 50 or older can
make an additional "catch- up" Purchase Payment each year (assuming the
individual has sufficient compensation).
You may contribute up to the annual Purchase Payment limit if Your modified
adjusted gross income does not exceed certain limits. Purchase Payments are
phased out depending on Your modified adjusted gross income and Your filing
status. For additional information see IRS Publication 590 available at
www.irs.gov.
Further, with respect to Traditional IRA amounts which were converted to a Roth
IRA, such conversion must have occurred at least five years prior to purchase of
this Contract. Consult Your independent tax advisor.
Annual Purchase Payments limits do not apply to a rollover from a Roth IRA to
another Roth IRA or a conversion from a Traditional IRA to a Roth IRA. You can
contribute to a Roth IRA after age 70 1/2. If certain conditions are met, You
can change Your Roth IRA contribution to a Traditional IRA before You file Your
income return (including filing extensions).
Roth IRAs may also accept a rollover from other types of eligible retirement
Plans plans (e.g., 403(b), 401(a), and 457(b) plans of a state or local
government employer) if Code requirements are met. The taxable portion of the
proceeds are subject to income tax in the year the rollover distribution occurs.
If You exceed the Purchase Payment limits You may be subject to a tax penalty.
WITHDRAWALS
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Generally, withdrawals of earnings from Roth IRAs are free from federal income
tax if they meet the following two requirements:
- The withdrawal is made at least five taxable years after Your first
Purchase Payment to a Roth IRA, AND
- The withdrawal is made: on or after the date You reach age 59 1/2;
upon Your death or disability; or for a qualified first time home
purchase (up to $10,000).
Withdrawals of earnings which do not meet these requirements are taxable and a
10% penalty tax may apply if made before age 59 1/2. See Withdrawal chart above.
Consult Your tax advisor to determine if an exception applies.
Withdrawals from a Roth IRA are made first from Purchase Payments and then from
earnings. Generally, You do not pay income tax on withdrawals of Purchase
Payments. However, withdrawals of the taxable amounts converted from a non-Roth
IRA prior to age 59 1/2 will be subject to the 10% penalty tax (unless You meet
an exception) if made within 5 taxable years of such conversion. See withdrawals
chart above.
The order in which money is withdrawn from a Roth IRA is as follows (all Roth
IRAs owned by a taxpayer are combined for withdrawal purposes):
- The first money withdrawn is any annual (non-conversion/rollover)
contributions to the Roth IRA. These are received tax and penalty
free.
- The next money withdrawn is from conversion/rollover contributions
from a non-Roth IRA or an eligible retirement accounts (other than a
designated Roth accounts), on a first-in, first-out basis. For these
purposes, distributions are treated as coming first from the portion
of the conversion/rollover contribution that was subject to income tax
as a result of the conversion. As previously discussed, depending upon
when it occurs, withdrawals of the taxable amounts converted may be
subject to a penalty tax, or result in the acceleration of inclusion
of income.
- The next money withdrawn is from earnings in the Roth IRA. This is
received tax-free if it meets the requirements previously discussed;
otherwise it is subject to federal income tax and an additional 10%
penalty tax may apply if You are under age 59 1/2.
- We may be required to withhold a portion of Your withdrawal for income
taxes, unless You elect otherwise. The amount will be determined by
the Code.
CONVERSION
You may convert/rollover an existing Traditional IRA or an eligible retirement
account (other than a designated Roth account) to a Roth IRA.
Except to the extent You have non-deductible contributions, the amount converted
from an existing IRA or eligible retirement account (other than a designated
Roth account) into a Roth IRA is taxable. Generally, the 10% withdrawal penalty
does not apply to conversions/rollovers. (See exception discussed previously.)
For conversions occurring in 2010, the taxable amount distributed (or treated as
distributed) in 2010 and then converted into a Roth IRA may be included in Your
taxable income ratably over 2011 and 2012 and does not have to be included in
Your taxable income in 2010.
Caution: The IRS issued guidance in 2005 requiring the taxable amount converted
be based on the fair market value of the entire IRA annuity contract being
converted or redesignated into a Roth IRA. Such fair market value, in general,
is to be determined by taking into account the value of all benefits (both
living benefits and death benefits) in addition to the account balance; as well
as adding back certain loads and charges incurred during the prior 12 months
period. Your Contract may include such benefits, and applicable charges.
Accordingly, taxpayers considering redesignating a Traditional IRA annuity into
a Roth IRA annuity should consult their own tax advisor prior to converting. The
taxable amount may exceed the Account value at date of conversion.
Amounts converted from a Traditional IRA or an eligible retirement Plan (other
than a designated Roth account) to a Roth IRA generally will be subject to
income tax withholding. The amount withheld is determined by the Code.
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If You mistakenly convert or otherwise wish to change Your Roth IRA contribution
to a Traditional IRA contribution, the tax law allows You to reverse Your
conversion provided You do so before You file Your tax return for the year of
the contribution and if certain conditions are met.
REQUIRED DISTRIBUTIONS
Required minimum distribution rules that apply to other types of IRAs while You
are alive do not apply to Roth IRAs. However, in general, the same rules with
respect to minimum distributions required to be made to a Beneficiary after Your
death under Traditional IRAs do apply to Roth IRAs. Note, as previously
mentioned, certain required minimum distributions are waived for 2009. Consult
Your tax advisor because the application of these rules to Your particular
circumstances may have been impacted by the 2009 RMD waiver.
Note that where payments under a Roth annuity have begun prior to Your death the
remaining interest in the Contract must be paid to Your designated Beneficiary
by the end of the fifth year following Your death or over a period no longer
than the Beneficiary's remaining life expectancy at the time You die.
DEATH BENEFITS
Generally, when You die we must make payment of Your entire interest by the
December 31st of the year that is the fifth anniversary of Your death or begin
making payments over a period and in a manner allowed by the Code to Your
Beneficiary by December 31st of the year after Your death.
If Your spouse is Your Beneficiary, Your spouse may delay the start of required
payments until December 31st of the year in which You would have reached age
70 1/2.
If Your spouse is Your Beneficiary, he or she may elect to continue as "Contract
Owner" of the Contract.
KEOGH
A Keogh plan is generally a qualified retirement Plan (defined contribution or
defined benefit) that covers a self-employed person. Other employees may also be
covered. Special rules apply to contribution limits in the case of a self-
employed person. Please consult Your tax advisor about Your particular
situation. See the "Qualified Contracts -- Generally" heading under this section
for a brief description of the tax rules that apply to Keoghs.
401(K)
The tax rules regarding retirement plans are complex. We do not give tax advice.
Please consult Your tax advisor about Your particular situation. See the
"Qualified Contracts -- Generally" heading under this section for a brief
description of the tax rules that apply to 401(k)s.
NON-QUALIFIED ANNUITIES
- Purchase Payments to non-qualified Contracts are on an "after-tax"
basis, so You only pay income taxes on Your earnings. Generally, these
earnings are taxed when received from the Contract.
- Under the Code, withdrawals need not be made by a particular age.
However, it is possible that the IRS may determine that the Contract
must be surrendered or Annuity Payments must commence by a certain age
(e.g., 85 or older) or Your Contract may require that You commence
payments by a certain age.
- Your non-qualified Contract may be exchanged for another non-qualified
annuity or a qualified long-term care contract under Section 1035
without paying income taxes if certain Code requirements are met. Once
Annuity Payments have commenced, You may not be able to transfer
withdrawals to another non-qualified annuity contract or a qualified
long-term care contract in a tax-free Section 1035 exchange.
- The IRS recently issued guidance under which direct transfers of less
than the entire account value from one non-qualified annuity to
another non-qualified annuity ("partial exchange") on or after June
30, 2008, may be treated as a taxable withdrawal rather than a non-
taxable exchange under certain circumstances. Such circumstances
generally include situations where amounts are withdrawn or income
payments are made from either contract involved in the partial
exchange within a period of twelve months following the transfers.
Certain exceptions may apply. It is not clear whether this guidance
applies to a partial
26
exchange involving a qualified long-term care contract. Consult Your
own independent tax advisor prior to a partial exchange.
- Consult Your tax advisor prior to changing the Annuitant or prior to
changing the date You determine to commence Annuity Payments if
permitted under the terms of Your Contract. It is conceivable that the
IRS could consider such actions to be a taxable exchange of annuity
Contracts.
- Where otherwise permitted under the Contract, pledges, assignments and
other types of transfers of all or a portion of Your Account value
generally result in the immediate taxation of the gain in Your
Contract. This rule may not apply to certain transfers between
spouses.
- Contracts issued after October 21, 1988 by the same insurance company
or affiliates to an Owner in the same year are combined for tax
purposes. As a result, a greater portion of Your withdrawals may be
considered taxable income than You would otherwise expect.
- When a non-natural person owns a non-qualified Contract, the annuity
will generally not be treated as an annuity for tax purposes and thus
loses the benefit of tax deferral. Corporations and certain other
entities are generally considered non-natural persons. However, an
annuity owned by a non-natural person as agent for an individual will
be treated as an annuity for tax purposes.
- In those limited situations where the annuity is beneficially owned by
a non-natural person and the annuity qualifies as such for federal
income tax purposes, the entity may have a limited ability to deduct
interest. Certain immediate annuities under Section 72(u)(4) of the
Code purchased with a single payment consisting of substantially equal
periodic payments with a maturity date within 12 months of purchase
may also be considered annuities for federal income tax purposes where
owned by a non-natural person.
PURCHASE PAYMENTS
Although the Code does not limit the amount of Your Purchase Payments, Your
Contract may limit them.
PARTIAL AND FULL WITHDRAWALS
Generally, when You (or Your Beneficiary in the case of a death benefit) make a
partial withdrawal from Your non-qualified annuity, the Code treats such a
partial withdrawal as: first coming from earnings (and thus subject to income
tax); and then from Your Purchase Payments (which are not subject to income
tax). This rule does not apply to payments made pursuant to an annuity option
under Your Contract. In the case of a full withdrawal, the withdrawn amounts are
treated as first coming from Your non-taxable return of Purchase Payment and
then from a taxable payment of earnings.
Generally, once the total amount treated as a return of Your Purchase Payment
equals the amount of such Purchase Payment (reduced by any refund or guarantee
feature as required by federal tax law), all remaining withdrawals are fully
taxable. If You die before the Purchase Payment is returned, the unreturned
amount may be deductible on Your final income tax return or deductible by Your
Beneficiary if Annuity Payments continue after Your death. We will tell You what
Your Purchase Payment was and whether a withdrawal includes a non-taxable return
of Your Purchase Payment.
ANNUITY PAYMENTS
Annuity Payments are subject to an "exclusion ratio" or "excludable amount"
which determines how much of each payment is treated as a non-taxable return of
Your Purchase Payments and a taxable payment of earnings.
Annuity Payments and amounts received on the exercise of a withdrawal or partial
withdrawal option under Your non-qualified annuity may not be transferred in a
tax-free exchange into another annuity contract. In accordance with Our
procedures, such amounts will instead be taxable under the rules for Annuity
Payments or withdrawals, whichever is applicable.
Generally, once the total amount treated as a return of Your Purchase Payment
equals the amount of such Purchase Payment (reduced by any refund or guarantee
feature as required by federal tax law), all remaining Annuity Payments are
fully taxable. If You die before the Purchase Payment is returned, the
unreturned amount may be deductible on Your final income tax return or
deductible by Your Beneficiary if Annuity Payments continue after Your death. We
27
will tell You what Your Purchase Payment was and to what extent an Annuity
Payment includes a non-taxable return of Your Purchase Payment.
The IRS has not approved the use of an exclusion ratio when only part of an
Account value is used to convert to Annuity Payments.
We will treat the application of less than Your entire Account value under a
non-qualified Contract to an annuity option (taking an annuity) as a taxable
withdrawal for federal income tax purposes and also as subject to the 10%
penalty tax (if You are under age 59 1/2) in addition to ordinary income tax. We
will then treat the amount of the withdrawal as the purchase price of an annuity
and tax report the Annuity Payments received under the rules for immediate
annuities. Consult Your tax attorney prior to partially annuitizing Your
Contract.
We generally will tell You how much of each Annuity Payment is a return of non-
taxable Purchase Payments. We will determine such excludable amount for each
Annuity Payment under the Contract as a whole by using the rules applicable to
Annuity Payments in general (i.e., by dividing Your after-tax purchase price, as
adjusted for any refund or guarantee feature by the number of expected Annuity
Payments from the appropriate IRS table). However, it is possible that the IRS
could conclude that the taxable portion of Annuity Payments under a non-
qualified Contract is an amount greater (or lesser) than the taxable amount
determined by Us and reported by Us to You and the IRS.
Generally, once the total amount treated as a non-taxable return of Your
Purchase Payment equals Your Purchase Payment, then all remaining payments are
fully taxable. We will withhold a portion of the taxable amount of Your Annuity
Payment for income taxes, unless You elect otherwise. The amount We withhold is
determined by the Code
If the amount of Annuity Payments received in any calendar year is less than the
excludable amount applicable to the year, the excess is not allowable as a
deduction. However, You may generally elect the year in which to begin to apply
this excess ratably to increase the excludable amount attributable to future
years. Consult Your tax advisor as to the details and consequences of making
such election. Also, consult Your tax advisor as to the tax treatment of any
unrecovered after-tax cost in the year that the Contract terminates.
DEATH BENEFITS
The death benefit under an annuity is generally taxable to the recipient in the
same manner as if paid to the Contract Owner (under the rules for withdrawals or
Annuity Payments, whichever is applicable).
If You die before the annuity starting date, as defined under Treasury
Regulations, payments must begin for a period and in a manner allowed by the
Code (and any regulations thereunder) to Your Beneficiary within one year of the
date of Your death or, if not, payment of Your entire interest in the Contract
must be made within five years of the date of Your death. If Your spouse is Your
Beneficiary, he or she may elect to continue as Contract Owner.
If You die on or after the annuity starting date, as defined under Treasury
Regulations, payments must continue to be made at least as rapidly as before
Your death in accordance with the annuity option selected.
If You die before all Purchase Payments are returned, the unreturned amount may
be deductible on Your final income tax return or excluded from income by Your
Beneficiary if Annuity Payments continue after Your death.
In the case of joint Contract Owners, the above rules will be applied on the
death of any Contract Owner. Where the Contract Owner is not a natural person,
these rules will be applied on the death of any Annuitant (or on the change in
Annuitant, if permitted under the Contract).
If death benefit payments are being made to Your designated Beneficiary and
he/she dies prior to receiving the entire remaining interest in the Contract,
such remaining interest will be paid out at least as rapidly as under the
distribution method being used at the time of Your designated Beneficiary's
death.
After Your death, if Your designated Beneficiary dies prior to electing a method
for the payment of the death benefit, the remaining interest in the Contract
will be paid out in a lump sum. In all cases, such payments will be made within
five years of the date of Your death.
CHANGES TO TAX RULES AND INTERPRETATIONS
Changes in applicable tax rules and interpretations can adversely affect the tax
treatment of Your Contract. The changes may take effect retroactively.
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We reserve the right to amend Your Contract where necessary to maintain its
status as an annuity Contract under federal tax law and to protect You and other
Contract Owners from adverse tax consequences.
PUERTO RICO TAX CONSIDERATIONS
The Puerto Rico Internal Revenue Code of 1994 ("1994 Code") provides the
following tax treatment for Contracts issued to Contract Owners in the
Commonwealth of Puerto Rico.
GENERAL TAX TREATMENT OF ANNUITIES
For Puerto Rico tax purposes, amounts received as an annuity under an annuity
contract are defined as amounts (determined based on a computation with
reference to life expectancy and mortality tables) received in periodical
installments and payable over a period longer than one year from the annuity
starting date.
Annuity payments generally have two elements: a part that constitutes a return
of the annuity's cost (return of capital) and a part that constitutes income.
From each annuity payment received, taxpayers must include in their gross income
for income tax purposes the lower of (a) the annuity payments received during
the taxable year, or (b) 3% of the aggregate premiums or consideration paid for
the annuity divided by 12 and multiplied by the number of months in respect to
which the installment is paid. The excess over the 3% is excluded from gross
income until the aggregate premiums or consideration is recovered.
Once the annuity's cost has been fully recovered, all of the annuity payment
constitutes taxable income. There is no penalty tax on early distributions from
annuity contracts.
No gain or loss has to be generally recognized when certain insurance policies
are exchanged for other insurance policies. These tax free exchanges include a
life insurance contract for another or for an endowment or annuity contract (or
a combination thereof). The total amount received, within the same taxable year,
from an annuity contract issued by an eligible insurance company, may be taxed
as a long-term capital gain at the rate in effect at the time of the
transaction.
In the case of individuals, estates and trusts whose adjusted gross income
exceeds $100,000 ($150,000 for married couples filing a joint return), a special
temporary surtax of 5% will be added to the above described tax liability. The
surtax is calculated taking as the basis the described tax so that the total or
resulting tax liability is 105% of the tax determined. Certain credits may be
used against the special surtax like the credit for taxes withheld on dividends
or partnership profits distributions or the credit for foreign taxes paid to the
U.S. and foreign countries. This special surtax is in effect for taxable years
beginning after December 31, 2008 and before January 1,2012.
AN ANNUITY CONTRACT UNDER NON-QUALIFIED PLANS
An annuity contract may be purchased by an employer under a non-qualified stock
bonus, pension, profit-sharing or annuity plan. The employer may purchase the
annuity contract and transfer it to a trust created under the terms of the non-
qualified plan or can make contributions to the non-qualified trust in order to
provide (an) annuity contract(s) for his employees.
The Purchase Payments paid or the employer's contributions made to a trust under
a plan during a taxable year of the employer which ends within or with a taxable
year of the trust shall be included in the gross income of the employee, if his
beneficial interest in the employer's contribution is non-forfeitable at the
time the contribution is made. An employee's beneficial interest in the
contributions is non-forfeitable if there is no contingency under the plan which
may cause the employee to lose his rights in the contribution.
When the contributions are included in the employee's gross income, they are
considered part of the consideration paid by him for the annuity. The amounts
contributed by the employer constitute consideration paid by the employee which
is taken into account for purposes of determining the taxable amount of each
annuity payment received.
The contributions paid by the employer to or under the non-qualified plan for
providing retirement benefits to the employees under an annuity or insurance
contract are deductible in the taxable year when paid if the employee's rights
to or derived from such employer's contribution are non-forfeitable at the time
the contribution is made.
29
If an amount is paid on behalf of the employee during the taxable year but the
rights of the employee therein are forfeitable at the time the amount is paid,
no employer deduction is allowable for such amount for any taxable year.
A non-qualified plan may not be subject to certain rules which apply to a
qualified plan such as rules regarding participation, vesting, and funding.
Thus, non-qualified annuity plans may be used by an employer to provide
additional benefits to key employees.
Since a non-qualified trust is not tax-exempt, the trust itself will be taxable
on the income of the trust assets.
AN ANNUITY CONTRACT UNDER A QUALIFIED PLAN
An annuity contract may be purchased by an employer for an employee under a
qualified pension, profit-sharing, stock bonus, annuity, or a cash or deferred
arrangement ("CODA") plan established pursuant to Section 1165 of the 1994 Code.
The employer has two alternatives: (1) purchase the annuity contract and
transfer the same to the trust under the plan, or (2) make contributions to a
trust under a qualified plan for the purpose of providing an annuity contract
for an employee.
Qualified plans must comply with the requirements of Section 1165(a) of the 1994
Code which include, among others, certain participation requirements.
The trust created under the qualified plan is exempt from tax on its investment
income.
a. Contributions
The employer is entitled, in determining its net taxable income, to claim a
current income tax deduction for contributions made to the trust created under
the terms of a qualified plan. However, statutory limitations on the
deductibility of contributions made to the trust under a qualified plan limit
the amount of funds that may be contributed each year.
b. Distributions
The amount paid by the employer towards the purchase of an annuity contract or
contributed to the trust for providing annuity contracts for the employees is
not required to be included in the income of the employee. However, any amount
received or made available to the employee under the qualified plan is
includible in the gross income of the employee in the taxable year in which
received or made available.
In such case, the amount paid or contributed by the employer shall not
constitute consideration paid by the employee for the variable annuity contract
for purposes of determining the amount of annuity payments required to be
included in the employee's gross income. Thus, amounts actually distributed or
made available to any employee under the qualified plan shall be included in
their entirety in the employee's gross income.
Lump-sum proceeds from a Puerto Rico qualified retirement plan due to separation
from service will generally be taxed at a 20% capital gain tax rate to be
withheld at the source.
A special rate of 10% may apply instead, if the plan satisfies the following
requirements: (1) the plan's trust is organized under the laws of Puerto Rico,
or has a Puerto Rico resident trustee and uses such trustee as paying agent; and
(2) after December 31, 2007, 10% of all plan's trust assets attributable to
participants which are Puerto Rico residents must be invested in "property
located in Puerto Rico" for a three-year period. If those two requirements are
not satisfied, the distribution will generally be subject to the 20% tax rate.
The three-year period includes the year of the distribution and the two
immediately preceding years. Property located in Puerto Rico includes Shares of
stock of a Puerto Rico corporation, bonds, notes and other evidence of
indebtedness issued by the Commonwealth of Puerto Rico or the instrumentalities
thereof.
In the case of individuals whose adjusted gross income exceeds $100,000
($150,000 for married couples filing a joint return), a special temporary surtax
of 5% will be added to the above described tax liability. The surtax is
calculated taking as the basis the described tax so that the total or resulting
tax liability is 105% of the tax determined. Certain credits may be used against
the special surtax like the credit for taxes withheld on dividends or
partnership profits distributions or the credit for foreign taxes paid to the
U.S. and foreign countries. This special surtax is in effect for taxable years
beginning after December 31, 2008 and before January 1,2012.
The 1994 Code does not impose a penalty tax in cases of early (premature)
distributions from a qualified plan.
30
c. Rollover
Deferral of the recognition of income continues upon the receipt of a
distribution by a participant from a qualified plan, if the total distribution
is contributed to another qualified retirement plan or traditional individual
retirement account for the employee's benefit no later than sixty (60) days
after the distribution.
ERISA CONSIDERATIONS
In the context of a Puerto Rico qualified retirement plan trust, the IRS has
recently held that the transfer of assets and liabilities from a qualified
retirement plan trust under the Code to that type of plan would generally be
treated as a distribution includible in gross income for U. S. income tax
purposes even if the Puerto Rico retirement plan is a plan described in ERISA
Section 1022(i)(1). By contrast, a transfer from a qualified retirement plan
trust under the Code to a Puerto Rico qualified retirement plan trust that has
made an election under ERISA Section 1022(i)(2) is not treated as a distribution
from the transferor plan for U.S. income tax purposes because a Puerto Rico
retirement plan that has made an election under ERISA Section 1022(i)(2) is
treated as a qualified retirement plan for purposes Code Section 401(a). The IRS
has determined that the above described rules prescribing the inclusion in
income of transfers of assets and liabilities to a Puerto Rico retirement plan
trust described in ERISA Section 1022(i)(1) would be applicable to transfers
taking effect after December 31, 2010.
AN ANNUITY CONTRACT UNDER A KEOGH PLAN
An annuity contract may be purchased for purposes of funding a self employed
retirement plan under Section 1165(f) of the 1994 Code. This plan is commonly
known as a Keogh plan or an HR 10 plan.
This plan permits self-employed individuals and owner-employees to adopt pension
plans, profit sharing plans or annuity plans for themselves and their employees.
A self-employed individual is any individual who carries on a trade or business
as a sole proprietor, an independent contractor or anyone who is in business for
himself or herself.
An owner-employee is any individual who owns all of an unincorporated business.
In the case of a corporation of individuals or a special partnership under
Subchapter K of the 1994 Code, an owner-employee is a shareholder or a partner
owning more than 10% of the interest in capital or profits.
Similar to a qualified plan, the annuity contract may be purchased and be
transferred to a trust, or contributions may be made to the trust for the
purpose of providing an annuity contract for the trust beneficiaries.
a. Contributions
A tax deduction may be claimed for contributions made to the plan. As in other
qualified plans, contributions to the plan are subject to certain statutory
limits. The limit on the deduction depends on the type of plan selected.
Such contributions and the income generated from them are not taxable to the
owner employee, his employees or to the self-employed individual until the funds
are distributed or made available to them.
The investment income generated from the contributions made to the plan which
are held in a qualified trust is tax exempt to the trust.
b. Distributions
Distributions made under a qualified self-employed retirement plan
will be subject to the rules described above for "An Annuity Contract
under a Qualified Plan-Distributions and Rollover".
INFORMATION INCORPORATED BY REFERENCE
- --------------------------------------------------------------------------------
Under the Securities Act of 1933, the Company has filed with the Securities and
Exchange Commission ("SEC") a registration statement (the "Registration
Statement") relating to the Contracts offered by this prospectus. This
prospectus has been filed as a part of the Registration Statement and does not
contain all of the information set forth in the Registration Statement and the
exhibits, and reference is hereby made to such Registration Statement and
exhibits for further information relating to the Company and the Contracts. The
Company's annual report on Form 10-K was filed with the SEC on March 24, 2010
via EDGAR File No. 033-03094. The Form 10-K contains information for the period
ended December 31, 2009 about the Company, including consolidated audited
financial
31
statements for the Company's latest fiscal year. The Form 10-K is incorporated
by reference into this prospectus. All other reports filed by the Company
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended ("Exchange Act") (such as quarterly and periodic reports) or proxy or
information statements filed pursuant to Section 14 of the Exchange Act since
the end of the fiscal year ending December 31, 2009 are also incorporated by
reference into this prospectus. We are not incorporating by reference, in any
case, any documents or information deemed to have been furnished and not filed
in accordance with SEC rules.
There have been no material changes in the Company's affairs which have occurred
since the end of the latest fiscal year for which audited consolidated financial
statements were included in the latest Form 10-K or which have not been
described in a Form 10-Q or Form 8-K filed by the Company under the Exchange
Act.
If requested, the Company will furnish, without charge, a copy of any and all of
the reports or documents that have been incorporated by reference into this
prospectus. You may direct Your requests to the Company at, 1300 Hall Boulevard,
Bloomfield, Connecticut, 06002-2910. The telephone number is 1-800-599-9460. You
may also access the incorporated reports and other documents at www.metlife.com
You may also read and copy any materials that the Company files with the SEC at
the SEC's Public Reference Room at 100 F Street, N.E., Washington, DC 20549. The
public may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-202-551-8090. 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.
EXPERTS
- --------------------------------------------------------------------------------
Legal matters in connection with federal laws and regulations affecting the
issue and sale of the Contracts described in this prospectus and the
organization of the Company, its authority to issue such Contracts under
Connecticut law and the validity of the forms of the Contracts under Connecticut
law have been passed on by legal counsel for the Company.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The consolidated financial statements, and the related financial statement
schedules, incorporated by reference in this Registration Statement from the
MetLife Insurance Company of Connecticut and subsidiaries' (the "Company's")
Annual Report on Form 10-K for the year ended December 31, 2009, have been
audited by Deloitte & Touche LLP, an independent registered public accounting
firm, as stated in their report (which expresses an unqualified opinion and
includes an explanatory paragraph regarding changes in the Company's method of
accounting for the recognition and presentation of other-than-temporary
impairment losses for certain investments as required by accounting guidance
adopted on April 1, 2009, its method of accounting for certain assets and
liabilities to a fair value measurement approach as required by accounting
guidance adopted on January 1, 2008, and its method of accounting for deferred
acquisition costs as required by accounting guidance adopted on January 1,
2007), which is incorporated herein by reference. Such consolidated financial
statements and financial statement schedules have been so incorporated in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
The principal address of Deloitte & Touche LLP is Two World Financial Center,
New York, NY 10281-1414.
32
APPENDIX A
- --------------------------------------------------------------------------------
INFORMATION CONCERNING QUALIFIED PLANS
Plans eligible to purchase the Contract are pension and profit sharing Plans
qualified under Section 401(a) of the Code, Section 403(b) Plans, and eligible
state deferred compensation Plans under Section 457 of the Code ("Qualified
Plans"). Trustees should consider whether the Plan permits the investment of
Plan assets in the Contract, the distribution of such an annuity and payment of
death benefits in accordance with the requirements of the federal income tax
rules. Assuming continued Plan qualification and operation, earnings on Plan
assets will accumulate value on a tax-deferred basis even if the Plan is not
funded by this Contract. Trustees therefore should consider features of the
Contract other than tax-deferral before investing in the Contract. In addition,
because required minimum distributions must generally begin for Annuitants after
age 70 1/2, trustees should consider whether the Contract may not be an
appropriate purchase for Annuitants approaching or over age 70 1/2.
To apply for this Contract, the trustee or other applicant must complete an
application or purchase order for the group annuity Contract and make a Purchase
Payment. A group annuity Contract will then be issued to the applicant. While
certificates may or may not be issued, each Purchase Payment is confirmed to the
Contract Owner. Surrenders under the group annuity Contract may be made at the
election of the Contract Owner, from the Account established under the Contract.
Account surrenders are subject to the same limitations, adjustments and charges
as surrenders made under a certificate (see "Surrenders"). Cash Surrender Values
may be taken in cash or applied to purchase annuities for the Contract Owners'
Qualified Plan participants.
Because there are no individual participant Accounts, the qualified group
annuity Contract issued in connection with a Qualified Plan does not provide for
death benefits. Annuities purchased for Qualified Plan participants may provide
for a payment upon the death of the Annuitant depending on the option chosen
(see "Annuity Options"). Additionally, since there are no Annuitants prior to
the actual purchase of an annuity by the Contract Owner, the provisions
regarding the Annuity Commencement Date are not applicable.
A-1
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APPENDIX B
- --------------------------------------------------------------------------------
MARKET VALUE ADJUSTMENT
The application of a Market Value Adjustment may adjust up or down your Account
value. The following describes the amount the Market Value Adjustment applies
to:
Maturity Value = [ (Current Account Value -- FI) x (1 + iG) (t/365)]
<Table>
1
Market Adjusted Value = [ (Maturity Value) x ---------------- ]
(1 + iC) (t/365)
</Table>
- where: "FI" is the available Free Interest credited for the, "iG" is
the Guaranteed Credited rate as stated on the contract specification
page, "iC" is the current Guaranteed Interest Rate for a Guarantee
Period of "t" days, where "t" is the number of days remaining in the
Guarantee Period adjusted for leap years.
The total amount available to customers, prior to any charges or Premium Taxes,
is: Market Adjusted Value + Free Interest.
The current Guaranteed Interest Rate is declared periodically by the Company and
is based on the rate (straight line interpolation between whole years) which the
Company is then paying on premiums paid under this class of Contracts with the
same maturity date as the Purchase Payment to which the formula is being
applied.
In New York State the Guaranteed Interest Rate will not be less than 3.00%.
ILLUSTRATION OF A MARKET VALUE ADJUSTMENT
<Table>
Purchase Payment: $50,000.00
Guarantee Period: 5 years
Guaranteed Interest Rate: 5.50% Effective Annual Rate
</Table>
The following examples illustrate how the Market Value Adjustment may affect the
values of Your Contract. In these examples, a Purchase Payment of $50,000 was
made to the Contract. After one year of the Guarantee Period, the Account value
(i.e., the Purchase Payment plus accumulated interest) would be $52,750.
The Market Adjusted Value is calculated based on your then current Account value
less any available Free Interest, and is based on a rate the Company is
crediting at the time on new Purchase Payments of the same term-to-maturity as
the time remaining in Your Guarantee Period. One year after the Purchase Payment
was made, You would have four years remaining in the five-year Guarantee Period.
EXAMPLE OF A NEGATIVE MARKET VALUE ADJUSTMENT
A negative Market Value Adjustment results when interest rates have increased
since the date the Purchase Payment was made. Assume interest rates have
increased one year after the Purchase Payment and the Company is crediting 7.00%
for a four-year Guarantee Period.
The Maturity Value would be:
$61,941.23 = ($52,750.00 -- $2,750) x (1 + .055)(4)
The Market Adjusted Value would be:
<Table>
1
$46,381.63 = [ ($61,941.23) x ------------------- ]
(1 + .07 + .005)(4)
</Table>
Total amount available, prior to charges and Premium Taxes:
$49,131.63 = $46,381.63 + $2,750.00
B-1
EXAMPLE OF A POSITIVE MARKET VALUE ADJUSTMENT
A positive Market Value Adjustment results when interest rates have decreased
since the date the Purchase Payment was made. Assume interest rates have
decreased one year after the Purchase Payment and the Company is crediting 3.50%
for a four-year Guarantee Period.
The Maturity Value would be:
$61,941.23 = ($52,750.00 -- $2,750) x (1 + .055)(4)
The Market Adjusted Value would be:
<Table>
1
$52,947.62 = [ $61,941.23) x --------------------- ]
(1 + .035 + 0.005)(4)
</Table>
Total amount available, prior to charges and Premium Taxes:
$55,697.62 = $52,947.62 + $2,750.00
These examples illustrate what may happen when interest rates increase or
decrease from the beginning of a Guarantee Period. A particular Market Value
Adjustment may have a greater or lesser impact than that shown in these
examples, depending on how much interest rates have changed since the beginning
of a Guarantee Period and the amount of time remaining to maturity. In addition,
a surrender charge may be assessed on surrenders made before the Purchase
Payment has been under the Contract for five years.
B-2
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T-MARK
MODIFIED GUARANTEED ANNUITY CONTRACTS
ISSUED BY
METLIFE INSURANCE COMPANY OF CONNECTICUT
1300 BLOOMFIELD, CONNECTICUT 06002-2910
Book 27 April 30, 2010