UPDATE REMINDER: PENNSYLVANIA LIFE INSURANCE DISCLOSURE STATEMENT, RESTATED

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1 American General Life Companies COMPLIANCE UPDATE February 16, 2011 Bulletin # REMINDER: PENNSYLVANIA LIFE INSURANCE DISCLOSURE STATEMENT, RESTATED The disclosure statement is required to be provided to prospective purchasers of life insurance, except for the exempted products listed below The disclosure statement form is required to be completed on or before the date the application is signed. The completed disclosure statement form is to be signed by the agent, and is to be left with the customer. A completed copy, signed by the agent, is submitted with the application to the home office. Disclosure Statement AGLC replaces existing forms LD3670-PA [for permanent products] and AGLC [for term products] This is a reminder that the state of Pennsylvania requires producers to disclose certain policy elements to applicants using the following disclosure statement form. Disclosure Statement AGLC This form replaces existing disclosure statements LD3670-PA [for permanent products] and AGLC [for term products]. Exempted Products The disclosure statement forms are required for all life insurance products available in Pennsylvania except: annuities variable life insurance group life insurance, employer-based, family or sponsored insurance credit life insurance insurance in connection with qualified pension or retirement plans insurance issued as a result of contractual policy change or conversion life insurance of less than $1,000 life insurance that is of substandard risk Instructions for Completing the Disclosure Statement Forms The Disclosure Statement Form must be completed on or before the date the application is signed. Any section or question that does not apply should be filled in or checked N/A so that no field is left blank. Section-by-section instructions are provided in the accompanying annotated sample disclosure form. Continued on the next page American General Life Companies, is the marketing name for the insurance companies and affiliates comprising the domestic life operations of American International Group, Inc., including American General Life Insurance Company and The United States Life Insurance Company in the City of New York. FOR PRODUCER USE ONLY NOT FOR DISSEMINATION TO THE PUBLIC

2 Submission of the Completed Disclosure Statement Form The completed form, signed by the agent, is left with the customer A completed copy of the form, signed by the agent, is submitted with the application to the home office. If an incomplete or incorrectly filled form is submitted to the home office, the application will not be processed until a corrected form is received. Disclosure Format and How to Order The disclosure language and format has been authorized by Pennsylvania and may not be altered by the insurer or producer. Order, view or print the forms in Forms Depot. The forms are also included with this bulletin. Questions should be directed to the Home Office. American General Life Companies, is the marketing name for the insurance companies and affiliates comprising the domestic life operations of American International Group, Inc., including American General Life Insurance Company and The United States Life Insurance Company in the City of New York. FOR PRODUCER USE ONLY NOT FOR DISSEMINATION TO THE PUBLIC

3 This disclosure form replaces LD3670-PA [for permanent products] and AGLC [for term products] THIS DISCLOSURE STATEMENT WITH ALL APPLICABLE BLANKS FILLED IN IS FOR YOUR PROTECTION. IT GIVES YOU BASIC INFORMATION ABOUT THE COST AND COVERAGE OF THE INSURANCE BEING SOLICITED. READ IT CAREFULLY BEFORE SIGNING ANY AGREEMENT TO BUY LIFE INSURANCE. THIS DISCLOSURE STATEMENT SHALL NOT BE CONSIDERED AS AN OFFER TO CONTRACT OR AS ALTERING OR MODIFYING ANY POLICY OR RIDER THAT MAY BE ISSED. A. General Information: 1. Name of Proposed Insured: Age: Actual Age Sex: 2. Name of Agent Preparing Disclosure: Standard population 3. Agent Home or Agency Address: of fields 4. Agent Telephone Number: B. Coverage Description: Generic description of Coverage (e.g.: term or UL) Face Amount of Coverage (If not applicable, a description of coverage)* Annual Premium (If not known, premium for mode quoted)** Policy (NO MARKETING OR PRODUCT NAMES.) e.g., use: term; universal life; 20-year term insurance, etc. Policy face amount Policy annual premium or actual modal amount (list mode) Riders: if none, write N/A Examples: Waiver of Premium Accidental Death Benefit Disability Income Child Rider (1 unit = $XXX of coverage ) Total amount of coverage per rider Total annual premium for each rider Supplemental Benefit(s) (built into Policy); if none, write N/A Example: Terminal Illness Rider N/A for both Term and permanent products N/A for both Term and permanent products * If the face or coverage amount(s) shown above are scheduled to change during the lifetime of the insured under the terms of the policy, rider or supplemental benefit, and the change(s) can be determined at time of application, describe the changed amount(s) below; otherwise, indicate N/A : (Example: if the policy or rider increases following the end of the level term period, the cumulative premium amounts should be disclosed) N/A Face Amount Change: (e.g., if policy has a decreasing face amount: reduction of face amount to $ at age 90 ) ** If the premium(s) shown above are scheduled to change under the terms of the policy and of any rider or supplemental benefit during the lifetime of the insured, and the change(s) can be determined at time of application, describe change(s) below; otherwise, indicate N/A : N/A See below for changes AGLC Page 1 of 2

4 1. For Term insurance: (Note: The premium will change only at expiration of guaranteed premium period.) N/A In policy year (year next following guaranteed period), the maximum premium changes to $, and increases each year thereafter. Example: for a 20-Year ROP plan, the statement would read: In the policy year 21, the maximum premium changes to ($ amount) and increases each year thereafter. 2. For Whole Life, Universal Life Insurance and Interest Sensitive Whole Life: Since our WL premium does not change and since changes for our UL and ISWL premium can not be determined at time of application, check N/A here: (Check the N/A box) 3. For rider or supplemental benefit: N/A (Check N/A, if no riders.) The premium for the rider or supplemental benefit changes to $ at policy year (or age), and the ultimate premium will be $ at policy year (or age). (Example: The premium for the _Premium Waiver_ rider or supplemental benefit changes to $_00.00_at policy year (or age) _(refer to Rate Book)_, and the ultimate premium will be $_00.00_at _(age at which maximum is reached for product) policy year (or age). 4. Total initial annual (or modal) premium for the policy, riders and supplemental benefits: $ (Total of costs indicated in last column in B on first page) C. Retirement Income. This section applies only to permanent insurance products designed to provide a guaranteed retirement income : N/A (Check the N/A box for all products, since company does not market products which provide a guaranteed retirement income.) Guaranteed retire income pays $ starting at for. (age or year) (e.g. life or a period certain) D. Guaranteed Cash Value. This section applies to permanent products where an Illustration Certification form is not used in place of a basic illustration or to a return of premium type term product (ROP Term). If an Illustration Certification form is used for or if the term product is other than a return of premium-type product, indicate N/A below: N/A (If the term product is other than a return of premium product, check N/A ) If you continuously pay your premiums on this policy as they come due, you will have the following guaranteed cash value for each $1,000 (or face amount). You may borrow against this cash value at an annual % loan interest rate. (Pull the below data from the Quote / Illustration system): Number of years policy has been in force Age 65 Total Accumulated Cash Value per $1,000 (or Total Amount) E. Dividends. This section applies only to participating whole life products F. Other. N/A (Check the N/A box for all products, since company does not market participating policies.) If your policy pays dividends, the following is a dividend illustration for the policy based on the current interest, mortality and expense experience of the company as reflected in the dividends currently paid. However, the illustrations are not a guaranteed of what future dividends will be: Note: Payment of a dividend is contingent upon the payment of the next premium due. Number of years policy has been in force Illustrated Dividend for that individual year per $1,000 (or face amount) 1. A Surrender Comparison Index will be provided upon delivery of the policy or earlier if requested. This Index provides one means of comparing the relative costs of two or more similar policies. The prospective insured has requested an earlier delivery of the Index. 2. Upon request either the company or the agent will furnish you with additional information. I certify that this disclosure statement was given to the applicant at time of application. Agent Signature Date AGLC Page 2 of 2

5 Disclosure Statement Pennsylvania American General Life Insurance Company Home Office: 2727 Allen Parkway, Houston, Texas Direct all Correspondence to P.O. Box 1931, Houston, Texas THIS DISCLOSURE STATEMENT WITH ALL APPLICABLE BLANKS FILLED IN IS FOR YOUR PROTECTION. IT GIVES YOU BASIC INFORMATION ABOUT THE COST AND COVERAGE OF THE INSURANCE BEING SOLICITED. READ IT CAREFULLY BEFORE SIGNING ANY AGREEMENT TO BUY LIFE INSURANCE. THIS DISCLOSURE STATEMENT SHALL NOT BE CONSIDERED AS AN OFFER TO CONTRACT OR AS ALTERING OR MODIFYING ANY POLICY OR RIDER THAT MAY BE ISSUED. A. General Information: 1. Name of Proposed Insured: Age: Sex: 2. Name of Agent Preparing Disclosure: 3. Agent Home or Agency Address: 4. Agent Telephone Number: B. Coverage Description: Policy Generic description of Coverage Face Amount of Coverage Annual Premium (e.g.; term or UL, etc.) (If not applicable, a (If not known, premium description of coverage) * for mode quoted) ** Riders: if none, write N/A Supplemental Benefit(s) (built into Policy); if none, write N/A * If the face or coverage amount(s) shown above are scheduled to change during the lifetime of the insured under the terms of the policy, rider or supplemental benefit, and the change(s) can be determined at time of application, describe the changed amount(s) below; otherwise, indicate N/A : Face Amount Change: ** If the premium(s) shown above are scheduled to change under the terms of the policy and of any rider or supplemental benefit during the lifetime of the insured, and the change(s) can be determined at time of application, describe change(s) below; otherwise, indicate N/A : See below for changes AGLC Page 1 of 2

6 1. For Term Insurance: In policy year, the maximum premium changes to $, and increases each year thereafter. 2. For Whole Life, Universal Life Insurance and Interest Sensitive Whole Life: Since our WL premium does not change and since changes for our UL and ISWL premium can not be determined at time of application, check N/A here: 3. For a rider or supplemental benefit: The premium for the rider or supplemental benefit changes to $ at policy year (or age), and the ultimate premium will be $ at policy year (or age). 4. Total initial annual (or modal) premium for the policy, riders and supplemental benefits: $ C. Retirement Income. This section applies only to permanent insurance products designed to provide a guaranteed retirement income : Guaranteed retire income pays $ starting at for. (age or year) (e.g. life or a period certain) D. Guaranteed Cash Value. This section applies to permanent products where an Illustration Certification form is not used in place of a basic illustration or to a return of premium type term product. If an Illustration Certification form is used for or if the term product is other than a return of premium-type product, indicate N/A below: If you continuously pay your premiums on this policy as they come due, you will have the following guaranteed cash value for each $1,000 (or face amount). You may borrow against this cash value at an annual % loan interest rate. Number of years policy has been in force Age 65 Total Accumulated Cash Value per $1,000 (or Total Amount) E. Dividends. This section applies only to participating whole life products If your policy pays dividends, the following is a dividend illustration for the policy based on the current interest, mortality and expense experience of the company as reflected in the dividends currently paid. However, the illustrations are not a guaranteed of what future dividends will be: Note: Payment of a dividend is contingent upon the payment of the next premium due. F. Other. Number of years policy has been in force Illustrated Dividend for that individual year per $1,000 (or face amount) 1. A Surrender Comparison Index will be provided upon delivery of the policy or earlier if requested. This Index provides one means of comparing the relative costs of two or more similar policies. The prospective insured has requested an earlier delivery of the Index. 2. Upon request either the company or the agent will furnish you with additional information. I certify that this disclosure statement was given to the applicant at time of application. Agent Signature Date AGLC Page 2 of 2