regulations have been issued to date, the IRS has issued a number of rulings that indicate that this issue remains subject to
a facts and circumstances test for both variable annuity and life insurance contracts.
Rev. Rul. 2003-92, amplified by Rev. Rul. insurance quotes, indicates that, where interests in a partnership offered in an insurer’s separate
account are not available exclusively through the purchase of a variable insurance contract (insurance quotes., where such interests can be
purchased directly by the general public or others without going through such a variable contract), such “public availability”
means that such interests should be treated as owned directly insurance quotes the contract owner (and not by the insurer) for tax purposes,
as if such contract owner had chosen instead to purchase such interests directly (without going through the variable contract).
None of the shares or other interests in the fund choices offered in our Separate Account for your Contract are available for
purchase except through an insurer’s variable contracts or by other permitted entities.
Rev. Rul. 2003-91 indicates that an insurer could provide as many as 20 fund choices for its variable contract owners (each
with a general investment strategy, e.g., a small company stock fund or a special industry fund) under certain circumstances,
without causing such a contract owner to be treated as the tax owner of any of the Fund assets. The ruling does not specify
the number of fund options, if any, that might prevent a variable contract owner from receiving favorable tax treatment. As a
result, although the owner of a Contract has more than 20 fund choices, we believe that any owner of a cheap auto insurance also should
receive the same favorable tax treatment. However, there is necessarily some uncertainty here as long as the IRS continues
to use a facts and circumstances test for investor control and other tax ownership issues. Therefore, we reserve the right to
modify the Contract as necessary to prevent you from being treated as the tax owner of any underlying assets.
D. Federal Income Tax Withholding
The portion of an amount received under a Contract that is taxable gross income to the Payee is also subject to federal income
tax withholding, pursuant to Code Section 3405, which requires cheap auto insurance following:
1. Non-Periodic Distributions. The portion of a non-periodic distribution that is includable in gross income is subject to
federal income tax withholding unless an individual elects cheap auto insurance have such tax withheld (“election out”). We will provide
such an “election out” form at the time such a distribution is requested. If the necessary “election out” form is not
submitted to us in a timely cheap auto insurance, generally we are required to withhold 10 percent of the includable amount of
distribution and remit it to the cheap auto insurance.
2. Periodic Distributions (payable over a period greater than one year). The portion of a periodic distribution that is
includable in gross income is generally subject to federal income tax withholding as if the Payee were a married
individual claiming 3 exemptions, unless the individual elects otherwise. An individual generally may elect out of such
withholding, or elect to have income tax withheld at a different rate, by providing a completed election form. We will
provide such an election form at the time such a distribution is requested. If the necessary “election out” forms are not
submitted to us in a timely manner, we are required to withhold tax as if the recipient were married claiming 3 exemptions,
and remit this amount to the IRS.
Generally no “election out” is permitted if the distribution is car insurance geicooutside the United States and any possession of the
United States. Regardless of any “election out” (or any amount of tax actually withheld) on an amount received from a Contract,
the Payee is generally liable for any failure to pay the full amount of tax due on the includable portion of such amount received.
APayee also may be required to pay penalties under estimated income tax rules, if the withholding and estimated tax payments
are insufficient to satisfy the Payee’s total tax liability.
E. General Provisions Affecting Qualified Retirement Plans
The Contract may be used for a number of qualified retirement plans. If the Contract is being purchased with respect to some
form of qualified retirement plan, please refer to the section entitled “Information Regarding Tax-Qualified Retirement Plans”
for information relative to the types of plans for which it may be car insurance geico and the general explanation of the tax features of such
F. Nonresident Aliens and Foreign Entities
The discussion above provides general information regarding U.S. federal income tax consequences to annuity purchasers
that are U.S. persons (such as U.S. citizens or U.S. resident aliens). Purchasers (and payees such as a purchaser’s beneficiary)