Filed Pursuant to Rule 424(b)(3)
File Number 333-69620
SUPPLEMENT DATED AUGUST 2, 2005 TO
PROSPECTUS DATED APRIL 29, 2005 FOR
MODIFIED GUARANTEED ANNUITY CONTRACTS
ISSUED BY
GE LIFE AND ANNUITY ASSURANCE COMPANY
This supplement updates certain information contained in your prospectus.
Please read it and keep it with your prospectus for future reference.
Legal Proceedings
The "Legal Proceedings" provision of your prospectus is replaced with the
following:
We face a significant risk of litigation and regulatory investigations and
actions in the ordinary course of operating our businesses, including the risk
of class action lawsuits. Our pending legal and regulatory actions include
proceedings specific to us and others generally applicable to business
practices in the industries in which we operate. In our insurance operations,
we are or may become subject to class actions and individual suits alleging,
among other things, issues relating to sales or underwriting practices, payment
of contingent or other sales commissions, claims payments and procedures,
product design, disclosure, administration, additional premium charges for
premiums paid on a periodic basis, denial or delay of benefits and breaches of
fiduciary or other duties to customers. Plaintiffs in class action and other
lawsuits against us may seek very large or indeterminate amounts, including
punitive and treble damages, which may remain unknown for substantial periods
of time. We are also subject to various regulatory inquiries, such as
information requests, subpoenas and books and record examinations, from state
and federal regulators and other authorities. A substantial legal liability or
a significant regulatory action against us could have an adverse effect on our
business, financial condition and results of operations. Moreover, even if we
ultimately prevail in the litigation, regulatory action or investigation, we
could suffer significant reputational harm, which could have an adverse effect
on our business, financial condition and results of operations.
Recently, the insurance industry has become the focus of increased scrutiny by
regulatory and law enforcement authorities concerning certain practices within
the insurance industry. In this regard, in May 2005, we received a subpoena
from the Northeast Regional Office of the Securities and Exchange Commission,
requiring the production of documents related to "certain loss mitigation
insurance products," such as finite risk reinsurance. We are cooperating fully
with the SEC in connection with its subpoena. In June 2005, General Electric
Company ("GE") received a subpoena from the United States Attorneys Office for
the Southern District of New York, on the same general subject. In the
subpoena, GE is defined as including, among other things, its subsidiaries and
affiliates. We are cooperating with GE in connection with GE's response to the
subpoena.
This industry scrutiny also includes the commencement of investigations and
other proceedings by the New York State Attorney General and other governmental
authorities relating to allegations of improper conduct in connection with the
payment of, and the failure to disclose, contingent commissions by insurance
companies to insurance brokers and agents, the solicitation and provision of
fictitious or inflated quotes, the use of inducements to brokers or companies
in the sale of insurance products and the use of captive reinsurance
arrangements. We have not received a subpoena or inquiry from the State of New
York with respect to these matters. However, as part of industry-wide inquiries
in this regard, we have received inquiries and informational requests with
respect to some of these matters from other federal and state regulatory
authorities. We have responded to these inquiries and informational requests
and will continue to cooperate with these regulatory authorities.
Recent industry-wide inquiries also include those regarding market timing and
late trading in variable annuity contracts, variable annuity sales
practices/exchanges and electronic communication document retention practices.
In this regard, we responded in late 2003 to a New York State Attorney General
subpoena regarding market timing and late trading in variable products and
mutual funds. We have not received any further inquiries from the New York
State Attorney General regarding these matters, although we received inquiries
and informational requests regarding these matters from other federal and state
regulatory authorities. We have responded to these inquiries, follow-up
inquiries and informational requests and will continue to cooperate with these
regulatory authorities.
We cannot assure you that the current investigations and proceedings will not
have a material adverse effect on our business, financial condition or results
of operations. It is also possible that related investigations and proceedings
may be commenced in the future, and we could become subject to further
investigations and have lawsuits filed against us. In addition, increased
regulatory scrutiny and any resulting investigations or proceedings could
result in new legal precedents and industry-wide regulations or practices that
could adversely affect our business, financial condition and results of
operation.
In our investment-related operations, we are subject to, and may become subject
to further litigation involving commercial disputes with counterparties or
others and class action and other litigation alleging, among other things, that
we made improper or inadequate disclosures in connection with the sale of
assets and annuity and investment products or charged excessive or
impermissible fees on these products, recommended unsuitable products to
customers or breached fiduciary or other duties to customers. We are also
subject to litigation arising out of our general business activities such as
our contractual and employment relationships.
Except as described below, there have been no material developments in any of
the legal proceedings identified in Part 1, Item 3 of our Annual Report on Form
10-K for the year ended December 31, 2004. In addition there were no new
material legal proceedings during the quarter.
In a prior prospectus supplement, we identified settlements in principle with
two groups of class members who had elected to exclude themselves from the
class action settlement in McBride v. Life Insurance Co. of Virginia dba GE
Life and Annuity Assurance Co. During the second quarter of 2005, those
settlements in principle were finalized.
Capital Brokerage Corporation, the principal underwriter, is not engaged in any
litigation of any material nature. However, Capital Brokerage Corporation, like
other insurance company principal underwriters, face significant risk or
litigation and regulatory investigations and actions in the ordinary course of
operating our business. Although it is not anticipated that any actions
described in this "Legal Proceedings" section will have an adverse impact on
Capital Brokerage Corporation, the Separate Account, or us there can be no
assurance at this time.